AGREEMENT AND PLAN OF MERGER

                                      Among

                       CLEAR CHANNEL COMMUNICATIONS, INC.,

                             CCU II MERGER SUB, INC.

                                       and

                             SFX ENTERTAINMENT, INC.

                          Dated as of February 28, 2000


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                                TABLE OF CONTENTS

                                                                         Page

ARTICLE 1.        THE MERGER.................................................2
Section 1.1.......The Merger.................................................2
Section 1.2.......Closing  2
Section 1.3.......Effective Time.............................................2
Section 1.4.......Effects of the Merger......................................2
Section 1.5.......Certificate of Incorporation and Bylaws of the
                   Surviving Corporation.....................................2
Section 1.6.......Directors..................................................3
Section 1.7.......Officers 3
ARTICLE 2.........EFFECT  OF  THE  MERGER  ON THE  CAPITAL  STOCK  OF THE
                  CONSTITUENT  CORPORATIONS;  EXCHANGE  OF CERTIFICATES......3
Section 2.1.......Capital Stock of Merger Sub................................3
Section 2.2.......Cancellation of Treasury Stock and Parent Owned Stock......3
Section 2.3.......Conversion of Company Common Stock.........................3
Section 2.4.......Exchange of Certificates...................................4
Section 2.5.......Stock Transfer Books.......................................7
ARTICLE 3.........REPRESENTATIONS AND WARRANTIES OF THE COMPANY..............7
Section 3.1.......Organization, Qualification, Etc...........................7
Section 3.2.......Capital Stock..............................................8
Section 3.3.......Corporate Authority Relative to this Agreement;
                  No Violation...............................................9
Section 3.4.......Reports and Financial Statements..........................10
Section 3.5.......No Undisclosed Liabilities................................10
Section 3.6.......No Violation of Law.......................................11
Section 3.7.......Environmental Laws and Regulations........................11
Section 3.8.......No Undisclosed Employee Benefit Plan Liabilities or
                  Severance Arrangements....................................11
Section 3.9.......Absence of Certain Changes or Events......................13
Section 3.10......Investigations; Litigation................................14
Section 3.11......Joint Proxy Statement; Registration Statement;
                  Other Information.........................................14
Section 3.12......Lack of Ownership of Parent Common Stock..................14
Section 3.13......Tax Matters...............................................14
Section 3.14......Opinion of Financial Advisor..............................15
Section 3.15......Required Vote of the Company Stockholders.................15
Section 3.16......Insurance.................................................15
Section 3.17......Real Property; Title......................................16
Section 3.18......Collective Bargaining Agreements and Labor................16
Section 3.19......Material Contracts........................................16

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                               TABLE OF CONTENTS
                                   (Continued)

Section 3.20......Takeover Statute..........................................16
Section 3.21......Transactions With Affiliates..............................17
Section 3.22......Intellectual Property.....................................17
ARTICLE 4.........REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER
                  SUB.......................................................17
Section 4.1.......Organization, Qualification, Etc..........................18
Section 4.2.......Capital Stock.............................................18
Section 4.3.......Corporate Authority Relative to this Agreement.
                  No Violation..............................................19
Section 4.4.......Reports and Financial Statements..........................20
Section 4.5.......No Undisclosed Liabilities................................21
Section 4.6.......No Violation of Law.......................................21
Section 4.7.......Environmental Laws and Regulations........................21
Section 4.8.......No Undisclosed Employee Benefit Plan Liabilities
                  or Severance Arrangements.................................22
Section 4.9.......Absence of Certain Changes or Events......................22
Section 4.10......Investigations; Litigation................................22
Section 4.11......Joint Proxy Statement; Registration Statement;
                  Other Information.........................................22
Section 4.12......Lack of Ownership of Company Common Stock.................23
Section 4.13......Tax Matters...............................................23
Section 4.14......Required Vote of Parent Stockholders......................23
Section 4.15......Opinion of Financial Advisor..............................24
Section 4.16......Insurance.................................................24
Section 4.17......Real Property; Title......................................24
Section 4.18......Collective Bargaining Agreements and Labor................24
Section 4.19......Material Contracts........................................24
Section 4.20......Takeover Statute..........................................24
ARTICLE 5.........COVENANTS RELATING TO CONDUCT OF BUSINESS.................24
Section 5.1.......Conduct of Business by the Company or Parent..............24
Section 5.2.......Proxy Material; Registration Statement....................29
Section 5.3.......Stockholders' Meeting.....................................30
Section 5.4.......Approvals and Consents; Cooperation.......................30
Section 5.5.......Access to Information; Confidentiality....................31
Section 5.6.......Affiliates................................................32
Section 5.7.......Rights Under Stock Plans..................................32
Section 5.8.......Filings; Other Action.....................................33
Section 5.9.......Further Assurances........................................34
Section 5.10......No Solicitation by the Company............................34
Section 5.11......Director and Officer Liability............................36
Section 5.12......Accountants' "Comfort" Letters............................39
Section 5.13......Additional Reports........................................39
Section 5.14......Plan of Reorganization....................................39
Section 5.15......Conveyance Taxes..........................................39
Section 5.16......Public Announcements......................................39
Section 5.17......Termination Fee and Expenses..............................40
Section 5.18......Notice of Certain Events..................................41
Section 5.19......Section 16(b) Board Approval..............................42
Section 5.20......Employee Plans and Employment Agreement...................42
ARTICLE 6.........CONDITIONS TO THE MERGER..................................43
Section 6.1.......Conditions to the Obligations of Each Party...............43
Section 6.2.......Conditions to the Obligations of Parent and Merger Sub....44
Section 6.3.......Conditions to the Obligations of the Company..............45
ARTICLE 7.........TERMINATION AND AMENDMENT.................................45
Section 7.1.......Termination...............................................45
Section 7.2.......Effect of Termination.....................................47
ARTICLE 8.........GENERAL PROVISIONS........................................47
Section 8.1.......Notices  47
Section 8.2.......Definitions...............................................48
Section 8.3.......Counterparts..............................................51
Section 8.4.......Agreement; No Third-Party Beneficiaries...................51
Section 8.5.......Assignment................................................51
Section 8.6.......Governing Law.............................................51
Section 8.7.......Enforcement...............................................51
Section 8.8.......Severability..............................................52
Section 8.9.......Interpretation............................................52
Section 8.10......Finders or Brokers........................................52
Section 8.11......Survival of Representations and Warranties................52
Section 8.12......Survival of Covenants and Agreements......................52
Section 8.13......Attorneys' Fees...........................................52
Section 8.14......Amendment.................................................52
Section 8.15......Extension; Waiver.........................................53
Section 8.16......Procedure for Termination, Amendment, Extension or Waiver.53





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     This  AGREEMENT  AND PLAN OF MERGER,  dated as of  February  28,  2000,  is
entered  into  by  and  among  Clear  Channel  Communications,   Inc.,  a  Texas
corporation  ("Parent"),  CCU II Merger Sub, Inc., a Delaware ------ corporation
and a wholly owned subsidiary of Parent ("Merger Sub"),  and SFX  Entertainment,
Inc., a Delaware ----------- corporation (the "Company"). -------

                                               W I T N E S S E T H:

                  WHEREAS,  the  respective  Boards of  Directors  of Parent and
Merger Sub and the Company  have  approved  the  combination  of the Company and
Parent upon the terms and subject to the  conditions set forth in this Agreement
and Plan of Merger, including,  without limitation, the exhibits attached hereto
(collectively, this "Agreement");

                  WHEREAS,  the  respective  Boards of  Directors  of Parent and
Merger Sub and the Company have  determined that it is advisable and in the best
interests of their respective  shareholders for the Merger Sub to merge with and
into Company as set forth below (the "Merger") upon the terms and subject to the
conditions  set forth in this  Agreement,  whereby  each issued and  outstanding
share of  Class A common  stock,  par  value  $.01  per  share,  of the  Company
("Company Class A Common Stock"), and each issued and outstanding share of Class
B common  stock,  par value $.01 per share,  of the  Company  ("Company  Class B
Common Stock" and,  together with the Company Class A Common Stock, the "Company
Common Stock") other than shares owned directly or indirectly by Parent,  Merger
Sub or the Company,  will be converted  into shares of common  stock,  par value
$0.10 per  share,  of Parent  ("Parent  Common  Stock") in  accordance  with the
provisions of Article 2 of this Agreement;

                  WHEREAS, as a condition and inducement to Parent's willingness
to enter into this  Agreement,  concurrently  with the execution and delivery of
this Agreement,  (a) Parent and certain stockholders of the Company are entering
into voting agreements dated as of the date of this Agreement (collectively, the
"Company  Stockholders  Voting  Agreement")  pursuant to which such stockholders
have  agreed  to vote  their  shares  of  Company  Common  Stock in favor of the
proposal to approve and adopt the Merger,  the approval of the Charter Amendment
(as defined herein) and this Agreement,  (b) Parent and certain  stockholders of
the Company are entering into stockholders  agreements,  dated as of the date of
this Agreement (collectively,  the "Stockholder Agreement"),  relating to, among
other things, the recapture by Parent of a specified profit amount that would be
realized by such stockholders in connection with certain specified transactions,
and (c) Parent and Robert F.X. Sillerman, Executive Chairman and a member of the
Board  of  Directors  of the  Company  are  entering  into a  Nondisclosure  and
Noncompetition   Agreement,   dated   as  of  the   date   of   this   Agreement
("Noncompetition  Agreement") and a Registration  Rights Agreement,  dated as of
the date of this Agreement ("Registration Rights Agreement");

                  WHEREAS,  for  federal  income  tax  purposes,  the  Merger is
intended to qualify as a  reorganization  under the provisions of Section 368(a)
of the United States Internal Revenue Code of 1986, as amended (the "Code"); and

                  WHEREAS,  Parent,  Merger Sub and the  Company  desire to make
certain representations, warranties, covenants and agreements in connection with
the Merger and also to prescribe certain conditions to the Merger.

<PAGE>

                  NOW,  THEREFORE,  in  consideration  of the  foregoing and the
mutual covenants and agreements  herein  contained,  and intending to be legally
bound hereby, Parent, Merger Sub and the Company hereby agree as follows:

                                   ARTICLE 1
                                   THE MERGER

Section  1.1......The  Merger.  Upon the terms and subject to the conditions set
forth in this  Agreement and the Delaware  General  Corporation  Law, as amended
(the  "DGCL"),  the Merger Sub shall be merged  with and into the Company at the
Effective Time (as defined in Section 1.3) of the Merger.  Following the Merger,
the separate corporate  existence of the Merger Sub shall cease, and the Company
shall continue as the surviving  corporation (the "Surviving  Corporation")  and
shall  succeed to and assume all the rights and  obligations  of the Company and
Merger Sub in accordance with the DGCL.

Section  1.2......Closing.  The closing of the Merger  shall take place at 10:00
a.m. on a date to be specified  by the parties  which shall be no later than the
second business day after the satisfaction or waiver of the conditions set forth
in Article 6 (the "Closing Date") at the offices of Akin, Gump, Strauss, Hauer &
Feld, L.L.P., 300 Convent Street,  Suite 1500, San Antonio,  Texas 78205, unless
another date, time or place is agreed in writing by the parties hereto.

Section  1.3      Effective Time. On the Closing Date, the parties shall execute
and file in the office of the  Secretary of State of Delaware a  certificate  of
merger (a  "Certificate  of Merger")  executed in  accordance  with the DGCL and
shall make all other  filings  or  recordings,  and take such other and  further
action as may be required  under the DGCL in  connection  with the  Merger.  The
Merger  shall  become  effective  at the time of  filing of the  Certificate  of
Merger,  or at such later time as is agreed upon by the  parties  hereto and set
forth therein (such time as the Merger  becomes  effective is referred to herein
as the "Effective  Time").

Section 1.4 Effects of the Merger.  The Merger  shall have the effects set forth
in the DGCL.

Section  1.5   Certificate  of   Incorporation   and  Bylaws  of  the  Surviving
Corporation.

     (a) The Amended and Restated Certificate of Incorporation of the Company as
in effect  immediately  prior to the Effective Time shall be the  Certificate of
Incorporation  of the  Surviving  Corporation  after  the  Effective  Time,  and
thereafter  may be amended as provided  therein and as permitted by law and this
Agreement.

     (b) The  By-Laws of the Merger  Sub as in effect  immediately  prior to the
Effective Time shall become the By-Laws of the Surviving  Corporation  after the
Effective  Time,  and  thereafter  may be amended  as  provided  therein  and as
permitted by law and this Agreement.

<PAGE>

Section 1.6      Directors. The directors of the Merger Sub immediately prior to
the  Effective  Time shall become the  directors of the  Surviving  Corporation,
until the  earlier of their  resignation  or removal or until  their  respective
successors are duly elected and qualified, as the case may be.

Section 1.7......Officers.  The officers of the Company immediately prior to the
Effective Time shall become the officers of the Surviving Corporation, until the
earlier of their resignation or removal or until their respective successors are
duly elected and qualified, as the case may be.

                                    ARTICLE 2
          EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT
                     CORPORATIONS; EXCHANGE OF CERTIFICATES

     Section  2.1......Capital Stock of Merger Sub. As of the Effective Time, by
virtue of the  Merger  and  without  any action on the part of the holder of any
shares of Company  Common  Stock or any shares of capital  stock of Merger  Sub,
each share of common stock,  par value $0.01 per share, of Merger Sub issued and
outstanding  immediately prior to the Effective Time shall be converted into and
become 80,000 fully paid and non-assessable  shares of the Class A common stock,
par value $.01 per share, of the Surviving Corporation, and 3,000 fully paid and
non-assessable  shares of the Class B common stock, par value $.01 per share, of
the  Surviving  Corporation,  and  such  shares  shall,  following  the  Merger,
represent  all of the  issued and  outstanding  capital  stock of the  Surviving
Corporation.

Section  2.2......Cancellation  of Treasury Stock and Parent Owned Stock.  As of
the  Effective  Time, by virtue of the Merger and without any action on the part
of the  holder of any shares of  Company  Common  Stock or any shares of capital
stock of Merger  Sub,  each  share of  Company  Common  Stock  issued  and held,
immediately prior to the Effective Time, in the Company's  treasury or by any of
the Company's  direct or indirect wholly owned  subsidiaries,  and each share of
Company Common Stock that is owned by Parent,  Merger Sub or any other direct or
indirect wholly-owned  subsidiary of Parent, shall automatically be canceled and
retired and shall cease to exist,  and no  consideration  shall be  delivered in
exchange therefor.

Section  2.3......Conversion  of Company Common Stock. As of the Effective Time,
by virtue of the Merger and  without any action on the part of the holder of any
shares of Company  Common  Stock or any shares of capital  stock of Merger  Sub,
subject to this Section 2.3 and Section  2.4(f),  each share of Company  Class A
Common Stock issued and  outstanding  immediately  prior to the  Effective  Time
(other  than  shares to be canceled in  accordance  with  Section  2.2) shall be
converted  into 0.60  (the  "Class A  Conversion  Number")  of duly  authorized,
validly issued and  nonassessable  shares of Parent Common Stock; and each share
of Company Class B Common Stock issued and outstanding  immediately prior to the
Effective  Time (other than shares to be  cancelled in  accordance  with Section
2.2) shall be  converted  into 1.0 (the  "Class B  Conversion  Number")  of duly
authorized,  validly  issued and  nonassessable  shares of Parent  Common Stock;
provided, however, that, in any event, if between the date of this Agreement and
the Effective  Time,  the  outstanding  shares of Parent Common Stock shall have
been changed into a different  number of shares or a different  class of shares,
by  reason  of  any  declared  or   completed   stock   dividend,   subdivision,
reclassification,  recapitalization,  split,  combination or exchange of shares,
the  Class A  Conversion  Number  and the  Class B  Conversion  Number  shall be
correspondingly  adjusted  to the  extent  appropriate  to  reflect  such  stock
dividend, subdivision, reclassification, recapitalization, split, combination or
exchange of shares. The shares of Parent Common Stock to be issued to holders of
Company Common Stock in accordance  with this Section 2.3 and the amount in cash
to be paid in lieu of fractional  shares in accordance  with Section  2.4(f)(ii)
are collectively referred to as the "Merger Consideration".  As of the Effective
Time,  all shares of Company  Common  Stock shall no longer be  outstanding  and
shall  automatically  be canceled and retired and shall cease to exist, and each
holder of a certificate or certificates which immediately prior to the Effective
Time represented  outstanding shares of Company Common Stock shall cease to have
any  rights  with  respect  thereto,  except  the right to  receive  the  Merger
Consideration.  The  Company  represents  and  warrants  that the holders of the
Company  Class A Common  Stock will not be entitled to  appraisal  rights in the
Merger.

<PAGE>

Section  2.4......Exchange of Certificates.

(a) Exchange Agent. Promptly after the Effective Time, Parent shall deliver to a
bank or trust company  designated by Parent and reasonably  satisfactory  to the
Company  (the  "Exchange  Agent"),  for the  benefit of the holders of shares of
Company  Common Stock,  for exchange in accordance  with this Article 2, through
the  Exchange  Agent,  certificates  evidencing  such number of shares of Parent
Common Stock issuable to holders of Company Common Stock in the Merger  pursuant
to Section  2.3 and cash in an amount  required  to be paid  pursuant to Section
2.4(d) and 2.4(f) (such certificates for shares of Parent Common Stock, together
with any  dividends  or  distributions  with  respect  thereto  and cash,  being
hereinafter  referred to as the  "Exchange  Fund").  The  Exchange  Agent shall,
pursuant to  irrevocable  instructions,  deliver,  out of the Exchange  Fund, to
holders of Company Common Stock,  Parent Common Stock  contemplated to be issued
pursuant to Section 2.3 (and any dividends or other  distributions to which such
holders  are  entitled  pursuant  to  Section  2.4(d))  and the  cash in lieu of
fractional  shares of Parent  Common Stock to which such holders are entitled to
pursuant  to  Section  2.4(f)  hereof,  out  of the  Exchange  Fund.  Except  as
contemplated  by Section 2.4(g) hereof,  the Exchange Fund shall not be used for
any other purpose.

(b) Exchange  Procedures.  As promptly as practicable  after the Effective Time,
Parent shall cause the Exchange Agent to mail to each holder of a certificate or
certificates (the "Certificates")  which immediately prior to the Effective Time
represented  outstanding  shares of Company  Common  Stock  (other  than  shares
cancelled in accordance with Section 2.2 (the "Cancelled  Shares")) (i) a letter
of transmittal (which shall be in customary form and shall specify that delivery
shall be effected,  and risk of loss and title to the  Certificates  shall pass,
only upon proper  delivery of the  Certificates  to the Exchange Agent) and (ii)
instructions  for use in effecting the surrender of the Certificates in exchange
for  certificates  evidencing  shares of Parent Common Stock, or cash in lieu of
fractional  shares of  Parent  Common  Stock to which  such  holder is  entitled
pursuant to Section 2.4(f) hereof.

(c)  Exchange  of  Certificates.  Upon  surrender  to the  Exchange  Agent  of a
Certificate  for  cancellation,  together  with a letter  of  transmittal,  duly
executed and completed in accordance  with the  instructions  thereto,  and such
other documents as may be reasonably required pursuant to such instructions, the
holder of such Certificate  shall be entitled to receive in exchange  therefor a
certificate  representing  that number of whole  shares of Parent  Common  Stock
which such  holder's  shares of Company  Common Stock shall have been  converted
into pursuant to this Article 2 (and any cash in lieu of any  fractional  shares
of Parent  Common  Stock to which such  holder is  entitled  pursuant to Section
2.4(f) and any dividends or other distributions to which such holder is entitled
pursuant to Section 2.4(d)),  and the Certificate so surrendered shall forthwith
be canceled. In the event of a transfer of ownership of shares of Company Common
Stock which is not registered in the transfer records of the Company,  shares of
Parent  Common  Stock,  cash in lieu of any  fractional  shares of Parent Common
Stock to which  such  holder is  entitled  pursuant  to  Section  2.4(f) and any
dividends or other  distributions  to which such holder is entitled  pursuant to
Section  2.4(d) may be issued to a transferee  if the  Certificate  representing
such  shares  of  Company  Common  Stock is  presented  to the  Exchange  Agent,
accompanied  by all documents  required to evidence and effect such transfer and
by evidence  that any  applicable  stock  transfer  taxes have been paid.  Until
surrendered  as  contemplated  by this Section 2.4,  each  Certificate  shall be
deemed at all times  after the  Effective  Time to  represent  only the right to
receive upon such  surrender  the number of whole shares of Parent  Common Stock
into which the shares of Company Common Stock formerly  represented thereby have
been converted,  cash in lieu of any fractional shares of Parent Common Stock to
which such holder is entitled  pursuant to Section  2.4(f) and any  dividends or
other distributions to which such holder is entitled pursuant to Section 2.4(d).

<PAGE>


(d) Distributions  with Respect to Unexchanged Shares of Parent Common Stock. No
dividends or other distributions  declared or made after the Effective Time with
respect to Parent Common Stock with a record date after the Effective Time shall
be paid to the  holder of any  unsurrendered  Certificate  with  respect  to the
shares of Parent Common Stock represented  thereby,  and no cash payment in lieu
of any  fractional  shares shall be paid to any such holder  pursuant to Section
2.4(f),  until the holder of such Certificate  shall surrender such Certificate.
Subject  to the  effect of  escheat,  tax or other  applicable  laws,  following
surrender of any such Certificate, there shall be paid promptly to the holder of
such  Certificate  representing  whole  shares of Parent  Common Stock issued in
exchange  therefor,  without  interest,  (i) the amount of  dividends  and other
distributions  with a record date after the Effective Time and theretofore  paid
with  respect  to  such  whole  shares  of  Parent  Common  Stock,  (ii)  at the
appropriate payment date, the amount of dividends and other distributions,  with
a record date after the Effective Time but prior to surrender and a payment date
occurring after  surrender,  payable with respect to such whole shares of Parent
Common  Stock  and  (iii)  the  amount of any cash  payable  with  respect  to a
fractional  share of  Parent  Common  Stock to which  such  holder  is  entitled
pursuant to Section 2.4(f).

(e) No Further Rights in Company Common Stock. All shares of Parent Common Stock
into which the shares of Company  Common Stock shall be converted in  accordance
with the terms hereof  (including  any cash paid  pursuant to Section  2.4(d) or
2.4(f)) shall be deemed to have been issued in full  satisfaction  of all rights
pertaining to such shares of Company Common
Stock.

(f)      No Fractional Shares.

(i) No certificates  or scrip  representing  fractional  shares of Parent Common
Stock shall be issued  upon the  surrender  for  exchange  of  Certificates,  no
dividend  or  distribution  of  Parent  shall  relate to such  fractional  share
interests and such fractional share interests will not entitle the owner thereof
to vote or to any rights of a stockholder of Parent.

<PAGE>

(ii) In lieu of the issuance of fractional shares, each holder of Company Common
Stock  shall be  entitled  to  receive  an amount in cash  equal to the  product
obtained by multiplying  (A) the fractional  share interest to which such holder
(after  taking  into  account  all  shares of Company  Common  Stock held at the
Effective  Time by such holder)  would  otherwise be entitled by (B) the closing
price for a share of  Parent  Common  Stock as  reported  on the New York  Stock
Exchange  ("NYSE")  Composite  Transaction  Tape (as reported in The Wall Street
Journal or, if not reported thereby, any other authoritative source) on the last
trading day prior to the Closing Date.

(g)  Termination of Exchange  Fund. Any portion of the Exchange Fund  (including
any shares of Parent Common Stock) which remains undistributed to the holders of
Company  Common Stock for six months after the Effective Time shall be delivered
to Parent,  upon  demand,  and any holders of Company  Common Stock who have not
theretofore  complied with this Article 2 shall  thereafter  look only to Parent
for, and Parent shall deliver, the applicable Merger Consideration,  any cash in
lieu of  fractional  shares of Parent  Common  Stock to which they are  entitled
pursuant to Section 2.4(f) and any dividends or other distributions with respect
to Parent  Common Stock to which they are entitled  pursuant to Section  2.4(d).
Any portion of the  Exchange  Fund  remaining  unclaimed by holders of shares of
Company  Common  Stock as of a date which is  immediately  prior to such time as
such amounts would  otherwise  escheat to or become  property of any  government
entity shall, to the extent  permitted by applicable law, become the property of
Parent  free and  clear of any  claims  or  interest  of any  Person  previously
entitled thereto.

(h)  No  Liability.  None  of the  Exchange  Agent,  Parent  nor  the  Surviving
Corporation  shall be liable to any holder of shares of Company Common Stock for
any such shares of Parent  Common  Stock (or  dividends  or  distributions  with
respect  thereto)  or  cash  delivered  to a  public  official  pursuant  to any
abandoned property, escheat or similar law.

(i) Withholding Rights. Each of the Surviving Corporation and the Exchange Agent
shall be  entitled  to deduct  and  withhold  from the  consideration  otherwise
payable  pursuant to this  Agreement  to any holder of shares of Company  Common
Stock such amounts as it is required to deduct and withhold  with respect to the
making of such  payment  under the Code,  or any  provision  of state,  local or
foreign  tax law. To the extent  that  amounts  are so properly  withheld by the
Surviving  Corporation or the Exchange  Agent, as the case may be, such withheld
amounts shall be treated for all purposes of this  Agreement as having been paid
to the holder of the shares of Company  Common  Stock,  in respect of which such
deduction and withholding was made by the Surviving  Corporation or the Exchange
Agent, as the case may be.

(j) Lost  Certificates.  If any  Certificate  shall  have been  lost,  stolen or
destroyed,  upon the making of an affidavit of that fact by the Person  claiming
such  Certificate  to be lost,  stolen or  destroyed  and,  if  required  by the
Surviving Corporation,  the posting by such Person of a bond, in such reasonable
amount as the Surviving  Corporation may direct,  as indemnity against any claim
that may be made against it with respect to such Certificate, the Exchange Agent
will  issue in  exchange  for such lost,  stolen or  destroyed  Certificate  the
applicable Merger Consideration, any cash in lieu of fractional shares of Parent
Common Stock to which the holder thereof is entitled  pursuant to Section 2.4(f)
and any dividends or other distributions to which the holder thereof is entitled
pursuant to Section 2.4(d).

<PAGE>

(k) Further Assurances.  If, at any time after the Effective Time, the Surviving
Corporation  shall  consider  or be  advised  that  any  deeds,  bills  of sale,
assignments,  assurances  or any  other  actions  or  things  are  necessary  or
desirable to vest,  perfect or confirm of record or  otherwise in the  Surviving
Corporation  its right,  title or  interest  in, to or under any of the  rights,
properties  or assets of either of the Merger Sub or the Company  acquired or to
be acquired by the Surviving  Corporation as a result of, or in connection with,
the  Merger  or  otherwise  to carry out this  Agreement,  the  officers  of the
Surviving  Corporation  shall be authorized to execute and deliver,  in the name
and on behalf of each of the Merger Sub and the Company or  otherwise,  all such
deeds,  bills of sale,  assignments  and  assurances and to take and do, in such
names and on such  behalves or  otherwise,  all such other actions and things as
may be necessary  or  desirable  to vest,  perfect or confirm any and all right,
title and  interest in, to and under such  rights,  properties  or assets in the
Surviving Corporation or otherwise to carry out the purposes of this Agreement.

Section 2.5      Stock Transfer Books. At the Effective Time, the stock transfer
books of the Company shall be closed and there shall be no further  registration
of transfers of shares of Company Common Stock  thereafter on the records of the
Company.  From and  after  the  Effective  Time,  the  holders  of  Certificates
representing shares of Company Common Stock outstanding immediately prior to the
Effective  Time shall  cease to have any rights  with  respect to such shares of
Company Common Stock, except as otherwise provided herein or by law. On or after
the Effective Time, any Certificates  presented to the Exchange Agent (or Parent
for any reason) shall promptly be exchanged for certificates representing shares
of Parent Common Stock,  any cash in lieu of fractional  shares of Parent Common
Stock to which the holders  thereof are entitled  pursuant to Section 2.4(f) and
any dividends or other  distributions  to which the holders thereof are entitled
pursuant to Section 2.4(d).

                               ARTICLE 3
                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

                  The  Company  hereby  represents  and  warrants  to Parent and
Merger Sub that,  except as set forth in the disclosure  letter delivered by the
Company to Parent and Merger  Sub on the date of this  Agreement  (the  "Company
Disclosure Letter"):

Section 3.1......Organization,  Qualification, Etc. The Company is a corporation
duly  organized,  validly  existing and in good  standing  under the laws of the
State  of  Delaware  and  has  the  corporate  power  and  authority  to own its
properties and assets and to carry on its business as it is now being  conducted
and  is  duly  qualified  to  do  business  and  is in  good  standing  in  each
jurisdiction  in which the  ownership  of its  properties  or the conduct of its
business  requires such  qualification,  except for  jurisdictions in which such
failure to be so qualified or to be in good standing  would not in the aggregate
reasonably  be expected to have a Material  Adverse  Effect on the Company.  The
copies of the Company's  Amended and Restated  Certificate of Incorporation  and
By-laws which have been made available to Parent are complete and correct and in
full  force and  effect  on the date of this  Agreement.  Each of the  Company's
Significant  Subsidiaries  (as defined in Regulation S-X  promulgated  under the
Securities Act of 1933, as amended (the "Securities Act")) (a) is a corporation,
general  partnership,  limited  partnership  or limited  liability  company duly
organized,  validly  existing  and  in  good  standing  under  the  laws  of its
jurisdiction of incorporation or  organization,  (b) has the corporate,  general
partnership,   limited  partnership  or  limited  liability  company  power  and
authority to own its  properties and to carry on its business as it is now being
conducted,  and (c) is duly  qualified to do business and is in good standing in
each  jurisdiction  in which the ownership of its property or the conduct of its
business requires such qualification,  except in the case of clauses (a) and (c)
for  jurisdictions  in which such  failure to be so  qualified  or to be in good
standing  would not in the  aggregate  reasonably be expected to have a Material
Adverse  Effect on the  Company  and  except in the case of clause  (b) for such
exceptions  as would  not in the  aggregate  reasonably  be  expected  to have a
Material  Adverse Effect on the Company.  All the outstanding  shares of capital
stock of, or other ownership  interests in, the Company's  Subsidiaries  are (y)
validly  issued,  fully  paid and  nonassessable  and (z) owned by the  Company,
directly  or  indirectly,  free and  clear of all  Liens,  except in the case of
clause  (y) for such  exceptions  as would not in the  aggregate  reasonably  be
expected to have a Material Adverse Effect on the Company and except in the case
of clause (z) for  restrictions  and Liens  contained in credit  agreements  and
similar  instruments  to  which  the  Company  is a Party  and  except  for such
exceptions  as are  disclosed in the Company SEC Reports and those that would be
immaterial to the Company and its Subsidiaries,  taken as a whole. Except as set
forth in the  Company  SEC  Reports,  there  are no  outstanding  subscriptions,
options,  warrants, rights of first refusal,  preemptive rights, calls or rights
or other arrangements or commitments of any character  obligating any Subsidiary
of the  Company  to issue any  capital  stock or other  securities  of, or other
ownership  interests in, any Subsidiary of the Company,  except those that would
be immaterial to the Company and its Subsidiaries, taken as a whole.

<PAGE>

Section  3.2      Capital  Stock.  The  authorized  capital stock of the Company
consists  of  100,000,000  shares of Company  Class A Common  Stock,  10,000,000
shares of Company Class B Common Stock and 25,000,000 shares of preferred stock,
$.01  par  value  per  share  ("Preferred  Stock").  As of  February  24,  2000,
64,116,270  shares  of  Company  Class A Common  Stock and  2,545,557  shares of
Company  Class B Common  Stock were issued and  outstanding,  112,529  shares of
Company  Class A Common  Stock were held in treasury  and no shares of Preferred
Stock were issued and  outstanding.  All the  outstanding  shares of the Company
Common Stock have been validly issued and are fully paid and non-assessable.  As
of the date of this Agreement, there are no outstanding subscriptions,  options,
warrants, rights or other arrangements or commitments,  rights of first refusal,
preemptive  rights,  calls or rights obligating the Company to issue any capital
stock or other  securities  of, or other  ownership  interests  in, the Company,
other than options, warrants and other rights to receive or acquire an aggregate
of  9,867,512  shares  of the  Company  Class A  Common  Stock  pursuant  to the
Company's  stock option plans, as amended (the "Company Stock Option Plans") and
the  options and  warrants  described  in Section 3.2 of the Company  Disclosure
Letter.

                  Except for the issuance of shares of the Company  Common Stock
pursuant  to (i)  the  Company  Stock  Option  Plans,  (ii) in  connection  with
acquisitions permitted under Section 5.1 of this Agreement and (iii) the options
and  warrants  referred to in Section 3.2 of the  Company's  Disclosure  Letter,
since February 24, 2000, no shares of the Company Common Stock have been issued.

<PAGE>

Section  3.3      Corporate  Authority Relative to this Agreement; No Violation.
The Company has the corporate  power and authority to enter into this  Agreement
and to carry out its obligations  hereunder.  The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been
duly and validly authorized by the Board of Directors of the Company and, except
for the approval  and adoption of the  agreement of merger (as such term is used
in Section 251 of the DGCL)  contained  in this  Agreement,  the approval of the
Merger and the approval of the amendment to the  Company's  Amended and Restated
Certificate  of  Incorporation  to repeal  Section  5.7  thereof  (the  "Charter
Amendment"),  by the holders of a majority of the outstanding  shares of Company
Common  Stock (with the holders of Company  Class A Common Stock and the holders
of Company  Class B Common  Stock  voting  together  as a single  class) and the
affirmative vote of the holders of a majority of the outstanding  shares of each
of the Company  Class A Common Stock and Company  Class B Common Stock voting as
separate classes, no other corporate  proceedings on the part of the Company are
necessary to authorize this Agreement and the transactions  contemplated hereby.
As of the date of this  Agreement,  the Board of  Directors  of the  Company has
determined  that the  transactions  contemplated by this Agreement are advisable
and in the best  interest of its  stockholders  and,  subject to the  provisions
contained in Section 5.10, to recommend to such  stockholders  that they vote in
favor thereof.  This Agreement has been duly and validly  executed and delivered
by the Company and,  assuming this Agreement has been duly and validly  executed
and  delivered  by  the  other  parties  hereto,  and  subject  to  the  Company
Stockholder  Approval  (as  defined  in  Section  5.3  hereof),  this  Agreement
constitutes a valid and binding  agreement of the Company,  enforceable  against
the Company in accordance with its terms (except insofar as  enforceability  may
be limited by applicable bankruptcy, insolvency,  reorganization,  moratorium or
similar laws affecting  creditors' rights generally,  or by principles governing
the  availability  of equitable  remedies).  Other than in connection with or in
compliance  with the provisions of the Securities  Act, the Securities  Exchange
Act of 1934, as amended (the  "Exchange  Act"),  the rules of the NYSE, the Hart
Scott Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), any
non-United States competition,  antitrust and investment laws and the securities
or blue sky laws of the  various  states,  and,  other  than the  filing  of the
Certificate  of Merger with the Delaware  Secretary  of State and any  necessary
state  filings to maintain the good standing or  qualification  of the Surviving
Corporation  and  its   Subsidiaries   (collectively,   the  "Company   Required
Approvals"),  no  authorization,  consent or approval  of, or filing  with,  any
governmental  body or authority is necessary for the consummation by the Company
of  the   transactions   contemplated  by  this   Agreement,   except  for  such
authorizations,  consents,  approvals or filings,  the failure to obtain or make
which would not,  in the  aggregate,  reasonably  be expected to have a Material
Adverse Effect on the Company; provided that the Company makes no representation
with  respect  to  such  of the  foregoing  as are  required  by  reason  of the
regulatory  status of Parent or any of its  Subsidiaries  or facts  specifically
pertaining  to any of them.  Except  for the  Company  Required  Approvals,  the
Company is not  subject  to or  obligated  under any  charter,  bylaw,  material
contract or any  governmental  license,  franchise or permit,  or subject to any
order or decree,  which  would be breached  or  violated  by its  executing  or,
subject to the approval of its stockholders, carrying out this Agreement, except
for any breaches or violations which would not, in the aggregate,  reasonably be
expected to have a Material Adverse Effect on the Company.

<PAGE>

Section 3.4      Reports and Financial Statements.  The following reports, proxy
statements  and  prospectuses  filed by the  Company  with the SEC are  publicly
available:

(a) the  Company's  Annual  Report on Form 10-K  filed with the  Securities  and
Exchange Commission (the "SEC") for the year ended December 31, 1998;

(b) the  Company's  Quarterly  Reports  on Form 10-Q  filed with the SEC for the
quarters ended March 31, 1999, June 30, 1999 and September 30, 1999;

(c) each  definitive  proxy  statement  filed by the Company  with the SEC since
April 27, 1998;

(d) each final  prospectus  filed by the  Company  with the SEC since  April 27,
1998, except any final prospectus on Form S-8; and

(e) all  Current  Reports  on Form 8-K filed by the  Company  with the SEC since
December 31, 1998.

                  As of their respective dates, such reports,  proxy statements,
and prospectuses filed on or prior to the date of this Agreement  (collectively,
the "Company SEC Reports") (i) complied as to form in all material respects with
the  applicable  requirements  of the  Securities  Act, the Exchange Act and the
rules and regulations promulgated thereunder and (ii) did not contain any untrue
statement  of a material  fact or omit to state a material  fact  required to be
stated  therein or necessary  to make the  statements  therein,  in light of the
circumstances  under which they were made, not  misleading;  provided,  that the
foregoing  clause (ii) shall not apply to the financial  statements  included in
the Company  SEC Reports  (which are  covered by the  following  sentence).  The
audited  consolidated  financial  statements and unaudited  consolidated interim
financial  statements included in the Company SEC Reports (including any related
notes and  schedules)  fairly  present in all material  respects  the  financial
position  of the  Company  and its  consolidated  Subsidiaries  as of the  dates
thereof and their  results of  operations  and cash flows for the  periods  then
ended (subject, where appropriate, to normal year-end adjustments), in each case
in accordance with past practice and generally accepted accounting principles in
the United States  ("GAAP")  consistently  applied  during the periods  involved
(except  as  otherwise  disclosed  in the  notes  thereto  and  except  that the
unaudited  financial  statements  therein  do not  contain  all of the  footnote
disclosures  required  by GAAP).  Since April 27,  1998,  the Company has timely
filed all material reports,  registration  statements and other filings required
to be filed by it with the SEC under the rules and regulations of the SEC.

Section 3.5      No Undisclosed  Liabilities.  As of the date of this Agreement,
neither  the  Company  nor  any of  its  Subsidiaries  has  any  liabilities  or
obligations of any nature, whether or not accrued, contingent or otherwise, of a
type required by GAAP to be reflected on a consolidated balance sheet except (a)
liabilities  or  obligations  reflected in any of the Company SEC  Reports,  (b)
liabilities  or obligations  incurred  since  September 30, 1999 in the ordinary
course of the Company's  business and (c) liabilities or obligations which would
not in the aggregate reasonably be expected to have a Material Adverse Effect on
the Company.

<PAGE>

Section  3.6      No  Violation  of Law. The  businesses  of the Company and its
Subsidiaries  are not being  conducted  in  violation  of any law,  ordinance or
regulation   of  any   governmental   body  or  authority   (provided   that  no
representation  or  warranty  is  made in  this  Section  3.6  with  respect  to
Environmental  Laws (as  defined  in  Section  3.7  below)  which are dealt with
exclusively  in Section  3.7) except (a) as  described in any of the Company SEC
Reports and (b) for  violations  or possible  violations  which would not in the
aggregate  reasonably  be  expected  to have a  Material  Adverse  Effect on the
Company.  The  Company  and its  Subsidiaries  have all  permits,  licenses  and
governmental   authorizations  material  to  ownership  or  occupancy  of  their
respective  properties  and  assets  and the  carrying  on of  their  respective
businesses,  except for such permits,  licenses and governmental  authorizations
the  failure of which to have would not  reasonably  be  expected to have in the
aggregate a Material Adverse Effect on the Company.

Section 3.7      Environmental Laws and Regulations.  Except as described in any
of the Company SEC Reports, (a) to the Knowledge of the Company, the Company and
each of its Subsidiaries is in material  compliance with all applicable federal,
state,  local  and  foreign  laws  and  regulations  relating  to  pollution  or
protection of human health or the environment  (including,  without  limitation,
ambient air,  surface water,  ground water,  land surface or subsurface  strata)
(collectively,  "Environmental  Laws"), except for noncompliance which would not
in the aggregate reasonably be expected to have a Material Adverse Effect on the
Company, which compliance includes, but is not limited to, the possession by the
Company  and  its  Subsidiaries  of  material  permits  and  other  governmental
authorizations  required  under  applicable  Environmental  Laws,  and  material
compliance  with the terms and conditions  thereof,  (b) neither the Company nor
any of its  Subsidiaries has received written notice of, or, to the Knowledge of
the  Company,  is the  subject  of,  any  actions,  causes  of  action,  claims,
investigations,  demands or notices by any Person alleging  liability  under, or
non-compliance with, any Environmental Law or that the Company or any Subsidiary
is a potentially  responsible  party at any Superfund  site or state  equivalent
site  ("Environmental  Claims")  which  would  in the  aggregate  reasonably  be
expected to have a Material Adverse Effect on the Company,  (c) to the Knowledge
of the Company, there are no circumstances that are reasonably likely to prevent
or interfere with such material  compliance in the future,  (d) to the Knowledge
of the  Company,  the  Company  and its  Subsidiaries  have not  disposed  of or
released  hazardous  materials  (at a  concentration  or  level  which  requires
remedial  action under any  Environmental  Law) at any real  property  currently
owned or leased by the Company or any  Subsidiary or at any other real property,
except for such  disposals or releases as would not in the aggregate  reasonably
be expected to have a Material  Adverse  Effect on the Company,  and (e) neither
the Company nor its  Subsidiaries  have agreed to indemnify any  predecessor  or
other party with respect to any  environmental  liability,  other than customary
indemnity provisions contained in agreements entered into in the ordinary course
of business  and  provisions  which  would not in the  aggregate  reasonably  be
expected to have a Material Adverse Effect on the Company.

Section 3.8 No  Undisclosed  Employee  Benefit  Plan  Liabilities  or  Severance
Arrangements.


                  (a) All benefit and compensation plans,  contracts,  policies,
agreements  or  other  arrangements   providing  for  compensation,   severance,
termination  pay,  performance  awards,  stock or stock related  awards,  fringe
benefits,  change in control,  employment  agreement,  deferred  compensation or
other  employee  benefits of any kind,  whether  formal or  informal,  funded or
unfunded,  written or oral, or arrangements covering current employees or former
employees  of the  Company  and its  Subsidiaries  (all such  current and former
employees of the Company and its  Subsidiaries  being herein  referred to as the
"Employees") and current or former directors of the Company,  including, but not
limited to,  "employee  benefit plans" within the meaning of Section 3(3) of the
Employee  Retirement  Income  Security Act of 1974,  as amended  ("ERISA")  (the
"Benefit Plans") are listed on Section 3.8(a) of the Company  Disclosure Letter,
except for those plans,  contracts,  policies or other arrangements that are not
material  to the Company and its  Subsidiaries,  taken as a whole.  There are no
"change in control" or similar  provisions  covering  current  employees  of the
Company  or any of its  Subsidiaries,  and,  to the  Knowledge  of the  Company,
covering any former employees of the Company or any of its  Subsidiaries,  other
than those set forth in the Benefit Plans  identified  on Section  3.8(a) of the
Company  Disclosure  Letter and except for such  exceptions  as would not in the
aggregate  reasonably  be  expected  to have a  Material  Adverse  Effect on the
Company.


<PAGE>
                  (b)  All employee  benefit plans within the meaning of Section
3(3) of ERISA,  other than  "multiemployer  plans" within the meaning of Section
3(37) of ERISA, covering Employees (the "Plans"), to the extent subject to ERISA
or the Code, are in substantial  compliance with ERISA,  the Code, and all other
applicable  law,  except  for  such  exceptions  as would  not in the  aggregate
reasonably be expected to have a Material  Adverse  Effect on the Company.  Each
Plan which is an "employee  pension  benefit plan" within the meaning of Section
3(2) of ERISA  ("Pension  Plan") and which is  intended  to be  qualified  under
Section 401(a) of the Code, has received a favorable  determination  letter from
the Internal Revenue Service,  or operates as a standardized  prototype plan, or
is  operating  within  the  remedial  amendment  period  and may still  obtain a
favorable  determination  letter from the Internal  Revenue  Service and, to the
Company's  Knowledge,   there  exists  no  circumstances  likely  to  result  in
revocation of any such favorable determination letter, except, in each case, for
such  exceptions as would not in the aggregate  reasonably be expected to have a
Material Adverse Effect on the Company.  There is no material pending or, to the
Knowledge of the Company, threatened litigation relating to the Plans except for
such  litigation as would not in the aggregate  reasonably be expected to have a
Material Adverse Effect on the Company.  Except for such exceptions as would not
in the aggregate reasonably be expected to have a Material Adverse Effect on the
Company,  neither  the  Company  nor any of its  Subsidiaries  has  engaged in a
transaction  with respect to any Plan that,  assuming the taxable period of such
transaction expired as of the date of this Agreement,  could subject the Company
or any Subsidiary to a tax or penalty imposed by either Section 4975 of the Code
or Section 502(i) of ERISA in an amount which would be material.

                  (c) No current or former Pension Plan of the Company or any of
its  Subsidiaries,  or any entity  which is  considered  one  employer  with the
Company  under  Section  4001 of ERISA  or  Section  414 of the Code (an  "ERISA
Affiliate"),  is or has been  subject to Title IV of ERISA or Section 412 of the
Code within the past six years,  except for such  exceptions as would not in the
aggregate  reasonably  be  expected  to have a  Material  Adverse  Effect on the
Company.

<PAGE>

                 (d) All  contributions  required to be made under the terms of
any Benefit  Plan have been timely  made or have been  reflected  on the audited
financial statements of the Company,  except for such exceptions as would not in
the aggregate  reasonably be expected to have a Material  Adverse  Effect on the
Company.

                  (e)  Neither the Company nor any of its  Subsidiaries  has any
obligations for retiree health and life benefits under any Benefit Plan,  except
for those under collective  bargaining  agreements  existing on the date of this
Agreement  and such  exceptions  as would  not in the  aggregate  reasonably  be
expected to have a Material Adverse Effect on the Company.

                  (f)  Except for such  exceptions as would not in the aggregate
reasonably  be expected to have a Material  Adverse  Effect on the Company,  the
consummation of the transactions contemplated by this Agreement will not, solely
as a result of such  consummation,  (i) entitle any Employees to severance  pay,
(ii) accelerate the time of payment or vesting or trigger any payment or funding
(through a grantor  trust or  otherwise)  of  compensation  or  benefits  under,
materially  increase the amount payable or trigger any other material obligation
pursuant to, any of the Benefit Plans (other than the Company Stock Option Plans
and the options and warrants  described in Section 3.2 of the Company Disclosure
Letter) or (iii) result in any breach or violation of, or a default  under,  any
of the Benefit Plans.

                  (g)  Any  amount  that  could be  received  (whether  in cash,
property,  or vesting of property) as a result of the transactions  contemplated
by this Agreement by any officer,  director,  employee or independent contractor
of the Company or any of its  Subsidiaries,  who is a "disqualified  individual"
(as  defined  in  proposed  Treasury  Regulation  Section  1.280G-1),  under any
employment  arrangement or Benefit Plan would not be characterized as an "excess
parachute  payment"  (as  defined in Section  280G of the Code)  except for such
exceptions  as would  not in the  aggregate  reasonably  be  expected  to have a
Material Adverse Effect on the Company.

     (h) All Benefit Plans covering current or former non-U.S.  Employees comply
in all material  respects with  applicable  law,  except for such  exceptions as
would not in the  aggregate  reasonably  be expected to have a Material  Adverse
Effect on the Company. No unfunded liabilities exist with respect to any Benefit
Plan that covers such non-U.S.  Employees,  except for such  exceptions as would
not in the aggregate reasonably be expected to have a Material Adverse Effect on
the Company.

Section  3.9      Absence of Certain Changes or Events.  Other than as disclosed
in the Company SEC Reports or previously  disclosed in writing to Parent,  since
September  30, 1999 and to the date of this  Agreement,  the  businesses  of the
Company and its Subsidiaries have been conducted in all material respects in the
ordinary  course and there has not been any event,  occurrence,  development  or
state of  circumstances  or facts that has had a Material  Adverse Effect on the
Company.  Since  September  30,  1999  and to the  date  of this  Agreement,  no
dividends or distributions have been declared or paid on or made with respect to
the shares of capital  stock or other  equity  interests  of the  Company or its
Subsidiaries nor have any such shares been  repurchased or redeemed,  other than
dividends or distributions paid to the Company or a wholly-owned  Subsidiary and
other than dividends, distributions, repurchases and redemptions with respect to
equity interests in Subsidiaries not exceeding $2.0 million in the aggregate.

<PAGE>

Section  3.10     Investigations;  Litigation. Except as described in any of the
Company SEC Reports or  previously  disclosed  in writing to Parent:

     (a) to the  Knowledge of the  Company,  no  investigation  or review by any
governmental  body  or  authority  with  respect  to the  Company  or any of its
Subsidiaries  which  would in the  aggregate  reasonably  be  expected to have a
Material Adverse Effect on the Company is pending nor has any governmental  body
or  authority  notified  the Company in writing of an  intention  to conduct the
same; and

     (b)  there  are no  actions,  suits  or  proceedings  pending  (or,  to the
Company's  Knowledge,  threatened)  against  or  affecting  the  Company  or its
Subsidiaries,  or any of their  respective  properties  or before  any  federal,
state, local or foreign governmental body or authority, which, in the aggregate,
are reasonably likely to have a Material Adverse Effect on the Company.

Section 3.11     Proxy Statement; Registration Statement; Other Information. The
information,  taken as a whole,  with respect to the Company or its Subsidiaries
to be  included  in the Proxy  Statement  (as  defined  in  Section  5.2) or the
Registration  Statement (as defined in Section 5.2) will not, in the case of the
Proxy Statement or any amendments thereof or supplements thereto, at the time of
the mailing of the Proxy Statement or any amendments or supplements thereto, and
at the time of the Company  Special  Meeting (as defined in Section 5.3), or, in
the case of the Registration  Statement,  at the time it becomes effective or at
the effective time of any post-effective amendment, contain any untrue statement
of a material  fact or omit to state any  material  fact  required  to be stated
therein or necessary in order to make the  statements  therein,  in light of the
circumstances  under  which  they were  made,  not  misleading,  except  that no
representation  is made by the Company with respect to  information  supplied in
writing  by Parent,  Merger  Sub or any  affiliate  of Parent  specifically  for
inclusion  in the Proxy  Statement.  The Proxy  Statement  (as it relates to the
Company) will comply as to form in all material  respects with the provisions of
the Exchange Act and the rules and regulations promulgated  thereunder.

Section 3.12 Lack of Ownership of Parent Common  Stock.  Neither the Company nor
any of its  Subsidiaries  owns  any  shares  of  Parent  Common  Stock  or other
securities  convertible  into shares of Parent  Common Stock  (exclusive  of any
shares owned by the Company's Benefit Plans).

Section  3.13    Tax Matters.

(a) All federal, state, local and foreign Tax Returns required to be filed by or
on  behalf  of the  Company,  each of its  Subsidiaries,  and  each  affiliated,
combined,  consolidated  or  unitary  group of which the  Company  or any of its
Subsidiaries  or was a member (a  "Company  Group")  have been  timely  filed or
requests for  extensions  to file such returns or reports have been timely filed
and  granted  and have not  expired,  and all  returns  filed are  complete  and
accurate  except to the extent any failure to file or any  inaccuracies in filed
returns would not,  individually or in the aggregate,  reasonably be expected to
have a Material  Adverse  Effect on the Company.  All Taxes due and owing by the
Company,  any  Subsidiary of the Company or any Company Group have been paid, or
adequately  reserved  for,  except to the extent  any  failure to pay or reserve
would not,  individually  or in the  aggregate  reasonably be expected to have a
Material  Adverse  Effect  on  the  Company.  There  is  no  audit  examination,
deficiency, refund litigation, proposed adjustment or matter in controversy with
respect to any Taxes due and owing by the Company, any Subsidiary of the Company
or any Company Group nor has the Company or any  Subsidiary  filed any waiver of
the statute of  limitations  applicable  to the  assessment or collection of any
Tax, in each case, which would, individually or in the aggregate,  reasonably be
expected to have a Material  Adverse Effect on the Company.  All assessments for
Taxes due and owing by the Company, any Subsidiary of the Company or any Company
Group with respect to completed and settled examinations or concluded litigation
have been paid.  Neither the Company  nor any  Subsidiary  is a party to any tax
indemnity  agreement,  tax sharing  agreement or other agreement under which the
Company or any  Subsidiary  could become liable to another Person as a result of
the  imposition of a Tax upon any Person,  or the  assessment or collection of a
Tax,  except for such  agreements  as would not in the  aggregate  reasonably be
expected to have a Material Adverse Effect on the Company.  The Company and each
of its  Subsidiaries  has complied in all material  respects  with all rules and
regulations  relating to the withholding of Taxes, except to the extent any such
failure to comply would not,  individually  or in the  aggregate,  reasonably be
expected  to have a Material  Adverse  Effect on the  Company.

<PAGE>


(b) Neither the Company nor any of its Subsidiaries has Knowledge of any fact or
has taken any action  that could  reasonably  be  expected to prevent the Merger
from qualifying as a reorganization  within the meaning of Section 368(a) of the
Code.

Section  3.14     Opinion of Financial Advisors.  On the date of this Agreement,
the Board of  Directors  of the Company has  received an oral opinion from Bear,
Stearns & Co. and the Special Committee of the Board of Directors of the Company
has received an oral opinion from Lehman Brothers (together with Bear, Stearns &
Co.,  the  "Financial  Advisors")  to the  effect  that,  as of the date of this
Agreement, the Class A Conversion Number is fair to the holders of Company Class
A Common Stock from a financial point of view. Copies of the written opinions of
the  Financial  Advisors,  substantially  in the forms  previously  submitted to
Parent,  will be  delivered to Parent as soon as  practicable  after the date of
this Agreement.

Section 3.15     Required Vote of the Company Stockholders. The affirmative vote
of the holders of a majority  of the  outstanding  shares of the Company  Common
Stock  (with the  holders of  Company  Class A Common  Stock and the  holders of
Company  Class B  Common  Stock  voting  together  as a  single  class)  and the
affirmative vote of the holders of a majority of the outstanding  shares of each
of the Company  Class A Common Stock and Company  Class B Common Stock voting as
separate classes is required to adopt this Agreement, the Merger and the Charter
Amendment.  No other vote of the  stockholders of the Company is required by law
or the charter or Bylaws of the  Company in order for the Company to  consummate
the Merger and the transactions contemplated hereby.

Section 3.16.....Insurance. Except to the extent that the lack of a policy would
not reasonably be expected to have a Material Adverse Effect on the Company, the
Company  and  its  Subsidiaries  have  insurance  policies,  including,  without
limitation,  policies of fire and other casualty and liability  insurance,  that
the Company believes are sufficient for the respective businesses and operations
of the Company and its Subsidiaries.

<PAGE>

Section  3.17.....Real  Property;  Title. The Company and its Subsidiaries  have
good and  marketable  title  subject to Permitted  Liens to all real  properties
owned by them,  except  where the  failure to have such  title  would not in the
aggregate  reasonably  be  expected  to have a  Material  Adverse  Effect on the
Company.

Section  3.18.....Collective  Bargaining  Agreements and Labor.  The Company has
previously  made  available  to  Parent  all  labor  or  collective   bargaining
agreements  in  effect  as of the  date of this  Agreement  which  pertain  to a
material number of the employees of the Company and its Subsidiaries.  As of the
date of this  Agreement,  there are no  pending  complaints,  charges  or claims
against the Company or its  Subsidiaries  filed with any public or  governmental
authority,  arbitrator or court based upon the  employment or termination by the
Company of any individual,  except for such complaints,  charges or claims which
if  adversely  determined  would not in the  aggregate  have a Material  Adverse
Effect on the Company.

Section  3.19.....Material Contracts.

(a) Neither the Company nor any of its  Subsidiaries  has  Knowledge  of, or has
received  notice of, any  violation or default  under any material  contract (as
such term is defined in item  601(b)(10) of Regulation  S-K of the SEC) to which
the Company or any of its Subsidiaries is a party, except for such violations or
defaults as would not in the aggregate reasonably be expected to have a Material
Adverse  Effect  on  the  Company.

(b) Neither the Company nor any of its  Subsidiaries  is (i) in  violation of or
default under any contract or agreement that restricts its ability to compete or
otherwise  conduct  its  business  as  presently  conducted,   except  for  such
violations or defaults as would not in the  aggregate  reasonably be expected to
have a Material  Adverse  Effect on the Company or (ii) a party to, or bound by,
any contract or agreement  that  restricts or would  restrict the ability of the
Company,  Parent  or any of their  respective  Subsidiaries  from  competing  or
otherwise  conducting  their  respective   businesses  as  such  businesses  are
conducted on the date of this Agreement, except for such restrictions that would
not in the aggregate reasonably be expected to have a Material Adverse Effect on
Parent or the Company.

Section 3.20     Takeover Statute. The Board of Directors of the Company, having
considered the Company Stockholders Voting Agreement, the Stockholder Agreement,
the Noncompetition Agreement and the Registration Rights Agreement, has approved
this  Agreement  and the  transactions  contemplated  hereby  and  thereby  and,
assuming  the  accuracy of Parent's  representation  and  warranty  contained in
Section  4.12,  such approval  constitutes  approval of the Merger and the other
transactions  contemplated hereby by the Board of Directors of the Company under
the provisions of Section 203 of the DGCL, such that the restrictions of Section
203 of the DGCL do not apply to this Agreement and the transactions contemplated
hereby,  including the Merger.  Except as provided in Section 4.20 below, to the
Knowledge of the Company,  no other state takeover  statute is applicable to the
Merger or the other transactions contemplated hereby.

<PAGE>

Section  3.21     Transactions  With  Affiliates.  Other  than the  transactions
contemplated by this Agreement or except to the extent  disclosed in the Company
SEC  Reports,  there  have been no  transactions,  agreements,  arrangements  or
understandings between the Company or its Subsidiaries, on the one hand, and the
Company's  Affiliates  (other  than  Subsidiaries  of the  Company) or any other
Person, on the other hand, that would be required to be disclosed under Item 404
of  Regulation  S-K  under the  Securities  Act.

Section  3.22  Intellectual  Property.  Except to the  extent  disclosed  in the
Company SEC Reports and except to the extent that the  inaccuracy  of any of the
following (or the circumstances giving rise to such inaccuracy), individually or
in the aggregate,  would not  reasonably be expected to have a Material  Adverse
Effect on the Company:  (a) the Company and each of its Subsidiaries owns, or is
licensed to use (in each case,  free and clear of any Liens),  all  Intellectual
Property  (as  defined  below)  necessary  for the  conduct of its  business  as
currently conducted; (b) to the Company's Knowledge, the use of any Intellectual
Property by the Company and its  Subsidiaries  does not infringe on or otherwise
violate the rights of any Person and is in accordance  in all material  respects
with any  applicable  license  pursuant to which the  Company or any  Subsidiary
acquired the right to use any Intellectual  Property; (c) as of the date of this
Agreement, to the Knowledge of the Company, no Person is challenging, infringing
on or  otherwise  violating  any  material  right of the  Company  or any of its
Subsidiaries with respect to any Intellectual  Property owned by and/or licensed
to the Company or its  Subsidiaries;  and (d) as of the date of this  Agreement,
neither the Company nor any of its  Subsidiaries has received any written notice
of any  pending  claim with  respect to any  Intellectual  Property  used by the
Company  and  its  Subsidiaries  and,  to  the  Knowledge  of  the  Company,  no
Intellectual  Property owned and/or licensed by the Company or its  Subsidiaries
is being used or  enforced  in a manner  that would  result in the  abandonment,
cancellation or unenforceability of such Intellectual  Property. For purposes of
this Agreement,  "Intellectual  Property" shall mean trademarks,  service marks,
brand names and other  indications of origin,  the goodwill  associated with the
foregoing and  registrations  in any  jurisdiction  of, and  applications in any
jurisdiction to register, the foregoing,  including any extension,  modification
or renewal of any such registration or application;  inventions, discoveries and
ideas, whether patentable or not, in any jurisdiction; patents, applications for
patents (including, without limitation, divisions, continuations,  continuations
in part and renewal  applications),  and any  renewals,  extensions  or reissues
thereof,  in  any  jurisdiction;   nonpublic  information,   trade  secrets  and
confidential  information  and  rights in any  jurisdiction  to limit the use or
disclosure   thereof  by  any  Person;   writings  and  other   works,   whether
copyrightable  or not, in any  jurisdiction;  registrations  or applications for
registration of copyrights in any  jurisdiction,  and any renewals or extensions
thereof; any similar intellectual property or proprietary rights; and any claims
or  causes  of  action  arising  out  of or  relating  to  any  infringement  or
misappropriation of any of the foregoing.

                                   ARTICLE 4
             REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB

                  Parent and Merger Sub hereby  jointly and severally  represent
and warrant to the Company  that  except as set forth in the  disclosure  letter
delivered  to the  Company  on the date of this  Agreement  ("Parent  Disclosure
Letter"):

<PAGE>

Section 4.1      Organization, Qualification, Etc. Each of Parent and Merger Sub
is a corporation duly organized, validly existing and in good standing under the
laws  of its  jurisdiction  of  organization  and has the  corporate  power  and
authority to own its properties and assets and to carry on its business as it is
now being conducted and is duly qualified to do business and is in good standing
in each  jurisdiction in which the ownership of its properties or the conduct of
its business requires such qualification, except for jurisdictions in which such
failure to be so qualified or to be in good standing  would not in the aggregate
reasonably  be  expected to have a Material  Adverse  Effect on Parent or Merger
Sub. The copies of Parent's Articles of Incorporation,  as amended,  and Amended
and Restated  By-laws and Merger Sub's  charter and by-laws which have been made
available  to the Company are  complete and correct and in full force and effect
on the date of this Agreement.  Each of Parent's Significant Subsidiaries (a) is
a corporation,  partnership or limited liability company duly organized, validly
existing  and  in  good  standing  under  the  laws  of  its   jurisdiction   of
incorporation  or  organization,  (b) has the corporate,  partnership or limited
liability  company power and authority to own its properties and to carry on its
business as it is now being conducted,  and (c) is duly qualified to do business
and is in good  standing  in each  jurisdiction  in which the  ownership  of its
property or the conduct of its business requires such  qualification,  except in
case of clauses  (a) and (c) for  jurisdictions  in which such  failure to be so
qualified or to be in good  standing  would not in the  aggregate  reasonably be
expected to have a Material Adverse Effect on Parent or Merger Sub and except in
the  case of  clause  (b) for such  exceptions  as  would  not in the  aggregate
reasonably  be  expected to have a Material  Adverse  Effect on Parent or Merger
Sub.  All the  outstanding  shares  of  capital  stock  of,  or other  ownership
interests in, Parent's Subsidiaries and Merger Sub are (y) validly issued, fully
paid and  non-assessable and (z) owned by Parent,  directly or indirectly,  free
and clear of all Liens,  except in the case of clause (y) for such exceptions as
would not in the  aggregate  reasonably  be expected to have a Material  Adverse
Effect on Parent and except in the case of clause (z) for restrictions contained
in credit agreements and similar  instruments to which Parent is a party and for
such exceptions as would be immaterial to Parent.  Except as disclosed in Parent
SEC Reports, there are no outstanding  subscriptions,  warrants, options (except
for those set forth in Section 4.2 below),  rights of first refusal,  preemptive
rights,  calls or rights or other  arrangements  or  commitments  obligating any
Subsidiary  of the  Parent or Merger  Sub to issue  any  capital  stock or other
securities  of, or other  ownership  interests  in, any  Subsidiary of Parent or
Merger Sub, except as would be immaterial to Parent.

Section  4.2      Capital Stock. The authorized capital stock of Parent consists
of 900,000,000  shares of Parent Common Stock,  and 2,000,000  shares of Class A
Preferred  Stock,  par value  $1.00 per  share and  8,000,000  shares of Class B
Preferred Stock, par value $1.00 per share (collectively,  the "Parent Preferred
Stock").  The shares of Parent  Common  Stock to be issued in the Merger or upon
the exercise of the Company stock options, warrants,  conversion rights or other
rights  or  upon  vesting  or  payment  of  other  Company  equity-based  awards
thereafter will, when issued,  be validly issued fully paid and  non-assessable.
As of February 24, 2000, 338,807,036 shares of Parent Common Stock and no shares
of Parent  Preferred  Stock were  issued and  outstanding  and 12,829  shares of
Parent  Common  Stock held in  treasury.  All the  outstanding  shares of Parent
Common Stock have been validly issued and are fully paid and non-assessable.  As
of the date of this Agreement, there are no outstanding subscriptions,  options,
warrants, rights or other arrangements or commitments,  rights of first refusal,
pre-emptive rights,  calls or rights obligating Parent to issue capital stock or
other  securities  of, or other  ownership  interests  in the Parent  other than
options and other rights to receive or acquire an aggregate of up to  42,575,482
shares of Parent Common Stock pursuant to:

<PAGE>

(a)      the 1984 Incentive Stock Option Plan of Parent;

(b)      the 1994 Non-Qualified Stock Option Plan;

(c)      Parent Director's Non-Qualified Stock Option Plan;

(d)      the 1998 Stock Incentive Plan;

(e)      the 2000 Employee Stock Purchase Plan;

(f) various  other  option  agreements  with  officers or employees of Parent or
Parent's Subsidiaries,  option assumption agreements, and incentive compensation
grants;

(g) Parent's 2-5/8% Senior  Convertible Notes due 2003,  convertible into Parent
Common Stock;

(h) Parent's 1-1/2% Senior  Convertible Notes due 2002,  convertible into Parent
Common Stock;

(i) the warrants of Jacor Communications, Inc. ("Jacor") assumed by Parent;

(j) Jacor liquid yield option notes due 2011; and

(k) Jacor liquid yield  option  notes due 2018.

Section  4.3      Corporate Authority Relative to this Agreement. No Violation.

(a) Parent has the corporate  power and authority to enter into this  Agreement,
the Registration Rights Agreement, the Company Stockholders Voting Agreement and
the  Stockholder  Agreement  (collectively,  the  "Ancillary  Agreements"),  the
Stockholder Agreement and the Company Stockholders Voting Agreement and to carry
out its obligations hereunder and thereunder. The execution and delivery of this
Agreement and the Ancillary  Agreements and the consummation of the transactions
contemplated  hereby and thereby  have been duly and validly  authorized  by the
Board of Directors of Parent and no other  corporate or stockholder  proceedings
on the part of Parent are necessary to authorize this  Agreement,  the Ancillary
Agreements,  the issuance of Parent Common Stock in  connection  with the Merger
and the other transactions  contemplated hereby and thereby.  This Agreement and
the Ancillary  Agreements  have been duly and validly  executed and delivered by
Parent and, assuming this Agreement and the Ancillary  Agreements have been duly
and validly executed and delivered by the other parties hereto and thereto, this
Agreement and the Ancillary  Agreements  constitute valid and binding agreements
of Parent,  enforceable  against it in accordance  with their  respective  terms
(except  insofar as  enforceability  may be limited  by  applicable  bankruptcy,
insolvency,  reorganization,  moratorium  or similar laws  affecting  creditors'
rights  generally,  or by  principles  governing the  availability  of equitable
remedies). Other than in connection with or in compliance with the provisions of
the DGCL,  the  Securities  Act, the Exchange  Act, the HSR Act, any  non-United
States  competition,  antitrust and investments  laws and the securities or blue
sky laws of the various  states and the rules of the NYSE,  and,  other than the
filing of the  Certificate of Merger with the Delaware  Secretary of State,  and
any necessary  state filings to maintain the good standing or  qualification  of
the Surviving Corporation  (collectively,  the "Parent Required Approvals"),  no
authorization,  consent or approval of, or filing with, any governmental body or
authority  is  necessary  for the  consummation  by Parent  of the  transactions
contemplated  by this  Agreement or the  Ancillary  Agreements,  except for such
authorizations,  consents,  approvals or filings,  the failure to obtain or make
which would not, in the  aggregate,  have a Material  Adverse  Effect on Parent;
provided  that  Parent  makes  no  representation  with  respect  to such of the
foregoing as are required by reason of the  regulatory  status of the Company or
any of its Subsidiaries or facts specifically  pertaining to any of them. Except
for Parent  Required  Approvals,  neither Parent nor Merger Sub is subject to or
obligated  under any charter,  bylaw or contract  provision or any  governmental
license,  franchise or permit, or subject to any order or decree, which would be
breached or violated by its  executing  or carrying  out this  Agreement  or the
Ancillary Agreements,  except for any breaches or violations which would not, in
the  aggregate,  reasonably  be  expected to have a Material  Adverse  Effect on
Parent.

<PAGE>

(b) Merger Sub has the corporate power and authority to enter into this
Agreement and to carry out its obligations hereunder. The execution and delivery
of this Agreement and the  consummation of the transaction  contemplated  hereby
have been duly and validly  authorized  by the Board of Directors of Merger Sub,
and no other corporate or stockholder  proceedings on the part of Merger Sub are
necessary to authorize this Agreement and the transactions  contemplated hereby.
The  Board of  Directors  of Merger  Sub has  determined  that the  transactions
contemplated  by this  Agreement  are  advisable and in the best interest of its
stockholder  and recommends to such  stockholder  that it vote in favor thereof.
This  Agreement  has been duly and validly  executed and delivered by Merger Sub
and, assuming this Agreement has been duly and validly executed and delivered by
the Company,  this Agreement constitutes a valid and binding agreement of Merger
Sub,  enforceable  against it in accordance  with its terms  (except  insofar as
enforceability   may  be   limited   by   applicable   bankruptcy,   insolvency,
reorganization,   moratorium  or  similar  loss  affecting   creditors'   rights
generally, or by principles governing the available of equitable remedies). This
Agreement has been approved by Parent as the sole stockholder of Merger Sub.

(c) Merger Sub was formed solely for the purpose of engaging in the transactions
contemplated by this Agreement.

(d) All of the  outstanding  capital  stock of Merger Sub is owned  directly  or
indirectly by Parent.

Section 4.4 Reports and  Financial  Statements.  The  following  reports,  proxy
statements and prospectuses filed by Parent with the SEC are publicly available:

(a)  Parent's  Annual  Reports  on Form 10-K  filed with the SEC for each of the
years ended December 31, 1996, 1997 and 1998;

(b) Parent's  Quarterly Reports on Form 10-Q filed with the SEC for the quarters
ended March 31, 1999, June 30, 1999 and September 30, 1999;

<PAGE>

(c) each  definitive  proxy statement filed by Parent with the SEC since January
1, 1996;

(d) each final  prospectus  filed by Parent with the SEC since  January 1, 1996,
except any final prospectus on Form S-8; and

(e) all Current  Reports on Form 8-K filed by Parent with the SEC since December
31, 1998.

                  As of their respective dates,  such reports,  proxy statements
and prospectuses filed on or prior to the date of this Agreement  (collectively,
"Parent SEC Reports")  (i) complied as to form in all material  respect with the
applicable  requirements  of the Securities Act, the Exchange Act, and the rules
and  regulations  promulgated  thereunder  and (ii) did not  contain  any untrue
statement  of a material  fact or omit to state a material  fact  required to be
stated  therein or necessary  to make the  statements  therein,  in light of the
circumstances  under which they were made, not  misleading;  provided,  that the
foregoing  clause (ii) shall not apply to the financial  statements  included in
Parent SEC Reports  (which are covered by the following  sentence).  The audited
consolidated  financial statements and unaudited  consolidated interim financial
statements  included in Parent SEC  Reports  (including  any  related  notes and
schedules)  fairly  present in all material  respects the financial  position of
Parent and its consolidated Subsidiaries as of the dates thereof and the results
of their  operations  and their cash flows for the periods then ended  (subject,
where appropriate,  to normal year-end adjustments),  in each case in accordance
with GAAP consistently  applied during the periods involved (except as otherwise
disclosed  in  the  notes  thereto  and  except  that  the  unaudited  financial
statements  therein do not contain all of the footnote  disclosures  required by
GAAP).  Since  January 1, 1996,  Parent has timely filed all  material  reports,
registration  statements  and other filings  required to be filed by it with the
SEC under the rules and regulations of the SEC.

Section 4.5      No Undisclosed  Liabilities.  As of the date of this Agreement,
neither Parent nor any of its Subsidiaries has any liabilities or obligations of
any nature, whether or not accrued,  contingent or otherwise, of a type required
by GAAP to be reflected on a consolidated  balance sheet except (a)  liabilities
or  obligations  reflected  in any of Parent SEC  Reports,  (b)  liabilities  or
obligations incurred since September 30, 1999 in the ordinary course of Parent's
business and (c)  liabilities  or  obligations  which would not in the aggregate
reasonably be expected to have a Material Adverse Effect on Parent.

Section  4.6      No  Violation  of  Law.  The  businesses  of  Parent  and  its
Subsidiaries  are not being  conducted  in  violation  of any law,  ordinance or
regulation  of  any  governmental  body  or  authority,  including  the  Federal
Communications  Commission  (provided that no representation or warranty is made
in this Section 4.6 with respect to Environmental  Laws) except (a) as described
in any of Parent SEC Reports and (b) for violations or possible violations which
would not in the  aggregate  reasonably  be expected to have a Material  Adverse
Effect on Parent.

Section 4.7  Environmental  Laws and Regulations.  Except as described in any of
Parent SEC  Reports,  (a) to the  Knowledge  of  Parent,  Parent and each of its
Subsidiaries is in material  compliance with all applicable  Environmental Laws,
except  for  non-compliance  which  would  not in the  aggregate  reasonably  be
expected to have a Material Adverse Effect on Parent, which compliance includes,
but is not limited to, the possession by Parent and its Subsidiaries of material
permits  and  other  governmental   authorizations   required  under  applicable
Environmental  Laws, and compliance with the terms and conditions  thereof;  (b)
neither Parent nor any of its  Subsidiaries  has received written notice of, or,
to the Knowledge of Parent,  is the subject of, any  Environmental  Claims which
would in the aggregate  reasonably be expected to have a Material Adverse Effect
on Parent;  and (c) to the Knowledge of Parent,  there are no circumstances that
are reasonably  likely to prevent or interfere with such material  compliance in
the future.

<PAGE>

Section 4.8      No  Undisclosed  Employee Benefit Plan Liabilities or Severance
Arrangements.  Except as described in any of Parent SEC Reports,  all  "employee
benefit plans" as defined in Section 3(3) of ERISA, maintained or contributed to
by Parent or its  Subsidiaries  are in material  compliance with their terms and
all  applicable   provisions  of  ERISA,  the  Code  and  any  other  applicable
legislation,  and Parent and its  Subsidiaries  do not have any  liabilities  or
obligations  with respect to any such  employee  benefit  plans,  whether or not
accrued,  contingent or otherwise,  except (a) as described in any of Parent SEC
Reports and (b) for instances of  noncompliance  or  liabilities  or obligations
that  would not in the  aggregate  reasonably  be  expected  to have a  Material
Adverse Effect on Parent.

Section  4.9      Absence of Certain Changes or Events.  Other than as disclosed
in  Parent  SEC  Reports,  since  September  30,  1999  and to the  date of this
Agreement,  the businesses of Parent and its Subsidiaries have been conducted in
all material  respects in the ordinary  course and there has not been any event,
occurrence,  development  or state  of  circumstances  or  facts  that has had a
Material Adverse Effect on Parent.

Section 4.10  Investigations;  Litigation.  Except as described in any of Parent
SEC Reports or previously disclosed in writing to the Company:

(a) to the Knowledge of Parent,  no  investigation or review by any governmental
body or authority with respect to Parent or any of its Subsidiaries  which would
in the  aggregate  reasonably be expected to have a Material  Adverse  Effect on
Parent is pending nor has any governmental body or authority  notified Parent in
writing of an intention to conduct the same; and

(b)  there  are no  actions,  suits or  proceedings  pending  (or,  to  Parent's
Knowledge,  threatened) against or affecting Parent or its Subsidiaries,  or any
of their respective properties,  or before any federal,  state, local or foreign
governmental  body or authority  which in the aggregate is reasonably  likely to
have a Material Adverse Effect on Parent.

Section 4.11     Proxy Statement; Registration Statement; Other Information. The
information,  taken as a whole, with respect to Parent or its Subsidiaries to be
included in the Proxy Statement (as defined in Section 5.2) or the  Registration
Statement  (as  defined  in  Section  5.2)  will  not,  in the case of the Proxy
Statement or any amendments thereof or supplements  thereto,  at the time of the
mailing of the Proxy Statement or any amendments or supplements  thereto, and at
the time of the Company  Special  Meeting,  or, in the case of the  Registration
Statement,  at the time it becomes  effective  or at the  effective  time of any
post-effective  amendment,  contain any untrue  statement of a material  fact or
omit to state any material  fact  required to be stated  therein or necessary in
order to make the statements  therein, in light of the circumstances under which
they were made, not misleading,  except that no representation is made by Parent
or Merger Sub with respect to information  supplied in writing by the Company or
any affiliate of the Company  specifically  for inclusion in the Proxy Statement
or the  Registration  Statement.  Each of the Proxy  Statement and  Registration
Statement will comply as to form in all material respects with the provisions of
the Exchange Act and the rules and regulations promulgated  thereunder.

<PAGE>

Section 4.12 Ownership of Company Common Stock.  Parent and its Subsidiaries and
other  Affiliates  beneficially  own,  in the  aggregate,  less  than 10% of the
outstanding shares of Class A Common Stock or other securities  convertible into
shares of Class A Common Stock.

Section  4.13      Tax Matters.

(a) All federal, state, local and foreign Tax Returns required to be filed by or
on behalf of Parent,  each of its Subsidiaries,  and each affiliated,  combined,
consolidated  or unitary group of which Parent or any of its  Subsidiaries is or
was a  member  (a  "Parent  Group")  have  been  timely  filed or  requests  for
extensions  to file such  returns or reports  have been timely filed and granted
and have not expired,  and all returns filed are complete and accurate except to
the extent any failure to file or any  inaccuracies  in filed returns would not,
individually or in the aggregate,  have a Material Adverse Effect on Parent. All
Taxes due and owing by Parent, any Subsidiary of Parent or any Parent Group have
been paid, or adequately  reserved for,  except to the extent any failure to pay
or reserve would not, individually or in the aggregate,  have a Material Adverse
Effect on Parent. There is no audit examination,  deficiency, refund litigation,
proposed  adjustment or matter in controversy  with respect to any Taxes due and
owing by Parent,  any  Subsidiary  of Parent or any Parent Group nor has Parent,
any  Subsidiary of Parent or any Parent Group filed any waiver of the statute of
limitations applicable to the assessment or collection of any Tax, in each case,
which could  individually  or in the aggregate  reasonably be expected to have a
Material  Adverse Effect on Parent.  All  assessments for Taxes due and owing by
Parent,  any  Subsidiary of Parent or any Parent Group with respect to completed
and settled examinations or concluded litigation have been paid. Parent and each
of its  Subsidiaries  has complied in all material  respects  with all rules and
regulations  relating to the withholding of Taxes, except to the extent any such
failure to comply would not,  individually or in the aggregate,  have a Material
Adverse Effect on Parent.

(b) Neither Parent nor any of its  Subsidiaries has Knowledge of any fact or has
taken any action  that could  reasonably  be expected to prevent the Merger from
qualifying as a reorganization within the meaning of Section 368(a) of the Code.

Section 4.14     Required Vote of Stockholders.  Other than the affirmative vote
of the  holders of a majority of the  outstanding  shares of Merger Sub to adopt
this  Agreement  and approve the Merger,  no other vote of the  stockholders  of
Parent or Merger  Sub is  required  by law,  the  charter or Bylaws of Parent or
Merger Sub in order for Parent and Merger Sub to  consummate  the Merger and the
transactions contemplated hereby.

<PAGE>

Section 4.15 Opinion of Financial Advisor.  The Board of Directors of Parent has
received the opinion of Salomon Smith Barney Inc.  ("Financial  Advisor")  dated
the date of this  Agreement  to the effect that,  as of such date,  the Exchange
Ratios (as defined therein) are fair from a financial point of view to Parent. A
copy of the written  opinion of the  Financial  Advisor will be delivered to the
Company as soon as practicable after the date of this Agreement.

Section 4.16     Insurance. Except to the extent that the lack of a policy would
not reasonably be expected to have a Material  Adverse Effect on Parent,  Parent
and its  Subsidiaries  have insurance  policies,  including  without  limitation
policies  of fire and  other  casualty  and  liability  insurance,  that  Parent
believes are sufficient  for the respective  businesses and operations of Parent
and its Subsidiaries.

Section 4.17     Real Property; Title. Parent and its Subsidiaries have good and
marketable  title subject to Permitted Liens to all real properties owned by it,
except  where  the  failure  to  have  such  title  would  not in the  aggregate
reasonably be expected to have a Material Adverse Effect on Parent.

Section  4.18     Collective  Bargaining Agreements and Labor. As of the date of
this  Agreement,  there are no pending  complaints,  charges  or claims  against
Parent or its  Subsidiaries  filed  with any public or  governmental  authority,
arbitrator or court based upon the  employment or  termination  by Parent of any
individual,  except for such  complaints,  charges or claims  which if adversely
determined would not in the aggregate have a Material Adverse Effect on Parent.

Section 4.19     Material  Contracts. Neither Parent nor any of its Subsidiaries
has Knowledge of, or has received  notice of, any violation or default under any
material  contract (as such term is defined in item 601(b)(10) of Regulation S-K
of the SEC) to which Parent or any of its  Subsidiaries  is a party,  except for
such violations or defaults as would not in the aggregate reasonably be expected
to have a Material Adverse Effect on Parent.

Section 4.20     Takeover Statute. The Board of Directors of Parent has approved
this Agreement,  the Company  Stockholders  Voting  Agreement,  the Stockholders
Agreement,  the Noncompetition  Agreement and Registration  Rights Agreement and
the transactions  contemplated  hereby and thereby and, assuming the accuracy of
the  Company's  representation  and  warranty  contained in Section  3.12,  such
approval   constitutes  approval  of  the  Merger  and  the  other  transactions
contemplated  hereby and thereby by the Board of  Directors  of Parent under the
provisions of Article 13.03 of the Texas Business  Corporation Act (the "TBCA"),
such that  Article  13.03 of the TBCA does not apply to this  Agreement  and the
transactions contemplated hereby and thereby. Except as provided in Section 3.20
above, to the Knowledge of Parent, no other state takeover statute is applicable
to the Merger or the other transactions contemplated hereby.

                                   ARTICLE 5
                    COVENANTS RELATING TO CONDUCT OF BUSINESS

Section  5.1      Conduct  of  Business  by the  Company  or  Parent.  Except as
contemplated by this Agreement or as set forth in the Company  Disclosure Letter
or Parent  Disclosure  Letter,  or as  necessary or  appropriate  to satisfy the
obligations  hereunder  or to  comply  with  applicable  Law or  stock  exchange
regulations,  between the date of this Agreement and prior to the Effective Time
or the date, if any, on which this Agreement is earlier  terminated  pursuant to
Section  7.1, and except as may be agreed to by the other  parties  hereto or as
may be permitted pursuant to this Agreement:

<PAGE>

(a)      The Company:

     (i)  shall,  and shall  cause  each of its  Subsidiaries  to,  conduct  its
operations according to their ordinary and usual course of business;

     (ii) shall use its reasonable  efforts,  and cause each of its Subsidiaries
to use its reasonable efforts,  consistent with prudent business practice to (A)
preserve intact its business organization and goodwill in all material respects,
(B) keep  available the services of its officers and key  employees,  subject to
changes in the ordinary course, and (C) maintain satisfactory relationships with
suppliers,  distributors,  customers  and  others  having  significant  business
relationships with them, in each case as a group;

     (iii) shall  notify  Parent of any  emergency or other change in the normal
course of its or its Subsidiaries'  respective businesses or in the operation of
its  or  its  Subsidiaries'   respective   properties  and  of  any  complaints,
investigations  or hearings (or  communications  indicating that the same may be
contemplated) of any governmental  body or authority if such emergency,  change,
complaint,  investigation  or hearing  would  reasonably  be  expected to have a
Material Adverse Effect on the Company;

     (iv) shall not authorize or pay any  dividends on or make any  distribution
with respect to its outstanding shares of capital stock;

     (v) shall not, and shall not permit any of its  Subsidiaries to, enter into
or amend any  severance or similar  agreements  or  arrangements  which would be
triggered by the transactions  contemplated hereby, with any of their respective
directors or employees, except to the extent required by Law or the terms of any
agreement  or Benefit  Plan in  existence  on the date hereof or any  collective
bargaining agreement entered into in the ordinary course of business;

     (vi) shall not, and shall not permit any of its  Subsidiaries  to,  without
the consent of Parent, which consent shall not be unreasonably  withheld,  enter
into any new written  employment,  consulting or salary  continuation  agreement
with any employee or director  which,  in any case,  has a term of more than one
year or  compensation  at an annual  rate in excess  of  $150,000,  or grant any
increases in the compensation or benefits to any management employee, officer or
director,  other than as required by any  agreement or Benefit Plan in existence
on the date of this Agreement and other than (A) salary  increases not in excess
of 10% per year of such Person's compensation which increases are awarded in the
ordinary course of business, and (B) wages and benefits to employees pursuant to
collective  bargaining  agreements  entered  into  in  the  ordinary  course  of
business;

<PAGE>

     (vii)  shall  not,  and  shall  not  permit  any  of its  Subsidiaries  to,
authorize,  propose or announce an intention  to authorize or propose,  or enter
into or consummate an agreement with respect to (x) any new Internet initiative,
(y) any merger,  consolidation or business  combination,  any acquisition of any
assets or  securities,  or any  disposition  of assets or  securities  involving
consideration  (including stock, debt and all contingent  payments) in excess of
$50 million in the aggregate,  provided that any merger, business combination or
other acquisition undertaken by the Company is in a line of business the same as
or related to the line of business of the Company and its Subsidiaries as of the
date of this  Agreement  or (z) any release or  relinquishment  of any  material
contract rights;

     (viii) shall not propose or adopt any  amendments to its corporate  charter
or By-laws (except as contemplated by this Agreement);


     (ix) shall not, and shall not permit any of its  Subsidiaries to, (A) issue
any shares of their  capital  stock  (other than with  respect to  issuances  by
Subsidiaries,  to the  Company or a  wholly-owned  subsidiary  of the  Company),
except (y) upon  exercise  of  options  under the  Company  Stock  Option  Plans
existing on the date of this  Agreement  and the options and warrants  listed in
Section 3.2 of the  Company  Disclosure  Letter and (z) shares of capital  stock
issued in connection with  acquisitions  permitted under this Section 5.1 or (B)
effect any stock split not  previously  announced  or (C)  otherwise  change the
capitalization  of the  Company  as it  existed  on the date of this  Agreement,
except as contemplated by or permitted under this Agreement;

     (x) without the consent of Parent,  which consent shall not be unreasonably
withheld,  shall not, and shall not permit any of its  Subsidiaries  to,  grant,
confer or award any  options,  warrants,  conversion  rights or other  rights to
acquire  any  shares  of its  capital  stock,  other  than  as  required  in any
employment  or other  agreement  or pursuant to any Benefit Plan in existence on
the date of this Agreement or as otherwise  contemplated  by or permitted  under
this Agreement;

     (xi) shall not, and shall not permit any of its  Subsidiaries to, except in
the  ordinary  course of business in  connection  with  employee  incentive  and
benefit  plans,  programs  or  arrangements  in  existence  on the  date of this
Agreement,  purchase,  exchange,  convert, or redeem any shares of the Company's
capital stock other than shares of preferred stock of Subsidiaries;

     (xii) shall not, and shall not permit any of its  Subsidiaries to, amend in
any significant  respect the terms of their respective Benefit Plans,  including
but not limited to employee benefit plans, programs or arrangements in existence
on the date of this Agreement, or adopt any new employee benefit plans, programs
or arrangements,  except as required by law, by the terms of any Benefit Plan or
agreement  in  existence  on the  date of this  Agreement,  by the  terms of any
collective  bargaining agreement entered into in the ordinary course of business
or to maintain tax  qualified  status or as  requested  by the Internal  Revenue
Service in order to receive a  determination  letter for such  employee  benefit
plan;

     (xiii)  shall not, and shall not permit any of its  Subsidiaries  to, enter
into any credit  facilities  or other loan  agreements as borrower or as lender,
amend any existing  credit  facility or loan agreement to increase the borrowing
availability  thereunder or increase  applicable  prepayment  penalties or incur
indebtedness that is subject to any prepayment  penalty or for which the Company
or its  Subsidiaries  are obligated to pay any discount,  origination or similar
fees, or grant any Liens on any of its assets;  provided,  however, that nothing
in this clause shall limit the ability of the Company or any of its Subsidiaries
to incur indebtedness or grant Liens under their respective credit facilities or
other loan agreements existing on the date of this Agreement;

<PAGE>

     (xiv) except as contemplated  by or permitted  under this Agreement,  shall
not, and shall not permit any of its Subsidiaries to (a) enter into any material
agreement with aggregate consideration in excess of $5.0 million per year or (b)
make any cash  touring  advance or upfront  guarantee  in excess of $10  million
individually or $30 million in the aggregate;

     (xv) shall not, and shall not permit any of its Subsidiaries to, enter into
an agreement or arrangement with any Affiliate of the Company, any family member
of any Affiliate of the Company or any stockholder who owns more than 10% of the
outstanding capital stock of the Company;

     (xvi) shall not, and shall not permit any of its  Subsidiaries to, make any
material Tax election or settle or compromise any material Tax liability,  other
than in  connection  with  currently  pending  proceedings  or other than in the
ordinary  course of  business  consistent  in all  material  respects  with past
practices;

     (xvii)  shall not, and shall not permit any of its  Subsidiaries  to, enter
into,  amend,  or extend  any  material  collective  bargaining  or other  labor
agreement,  except  as  required  by law and  except in the  ordinary  course of
business consistent in all material respects with past practices;

     (xviii)  except as may be  required by  applicable  Law or the terms of any
agreement in existence on the date of this  Agreement,  shall not, and shall not
permit any of its Subsidiaries to, make any acquisition, by means of a merger or
otherwise,  of assets or securities,  or any sale,  lease,  encumbrance or other
disposition of assets or securities,  or enter into any similar transaction,  or
enter into an agreement to effect any of the foregoing, in each case which would
reasonably  be  expected  to  adversely  affect the  ability  of the  Company to
consummate the  transactions  contemplated by this Agreement or materially delay
obtaining any consents or approvals of any  Governmental  Entity  required under
this Agreement or otherwise materially delay the Closing; and

     (xix)  shall not agree,  or permit  any of its  Subsidiaries  to agree,  in
writing or otherwise,  to take any of the foregoing actions described in clauses
(iv) through (xviii) or take any action that is intended or would  reasonably be
expected to result in any of the conditions to the Merger set forth in Article 6
not being satisfied, except, in each case, as may be required by applicable Law.

(b) Parent:

     (i)  shall,  and shall  cause  each of its  Subsidiaries  to,  conduct  its
operations  according to their ordinary and usual course of business;  provided,
however,  that nothing  contained in this clause shall limit Parent's ability to
authorize or propose,  or enter into or amend,  an agreement with respect to any
acquisitions  or credit  facilities  or to issue or refinance any debt or equity
securities,  provided that any such  acquisition or issuance of securities would
not  reasonably be expected to adversely  affect the ability of Parent or Merger
Sub to consummate the transactions  contemplated by this Agreement or materially
delay  obtaining  any consents or approvals of any  Government  Entity  required
under this Agreement or otherwise materially delay the Closing;;

<PAGE>

     (ii) shall take all action  necessary  to cause  Merger Sub to perform  its
obligations  under this  Agreement and to consummate the Merger on the terms and
conditions set forth in this Agreement;

     (iii) shall and shall cause Merger Sub to vote all shares of Company Common
Stock, if any,  beneficially owned by Parent,  Merger Sub or their Affiliates in
favor of adoption and  approval of the Merger and this  Agreement at the Company
Special Meeting (as defined in Section 5.3);

     (iv)  except  as may be  required  by  applicable  Law or the  terms of any
agreement in existence on the date of this  Agreement,  shall not, and shall not
permit any of its Subsidiaries to, make any acquisition, by means of a merger or
otherwise,  of assets or securities,  or any sale,  lease,  encumbrance or other
disposition of assets or securities,  or enter into any similar transaction,  or
enter into an agreement to effect any of the foregoing, in each case which would
reasonably  be expected to adversely  affect the ability of Parent to consummate
the  transactions  contemplated by this Agreement or materially  delay obtaining
any  consents  or  approvals  of any  Governmental  Entity  required  under this
Agreement or otherwise materially delay the Closing;

     (v) shall not, and shall not permit any of its  Subsidiaries to, change any
of the accounting principles or practices used by it or any of its Subsidiaries,
except as required by the Securities Exchange Commission (the "SEC") or required
by GAAP;

     (vi) shall not authorize or pay any  dividends on or make any  distribution
with respect to its outstanding shares of capital stock;

     (vii) shall not propose or adopt any amendments to its corporate charter or
By-laws;

     (viii)  shall not agree,  or permit any of its  Subsidiaries  to agree,  in
writing or otherwise,  to take any of the foregoing actions described in clauses
(iv) through  (vii) or take any action that is intended or would  reasonably  be
expected to result in any of the conditions to the Merger set forth in Article 6
not being satisfied, except, in each case, as may be required by applicable Law;
and

     (ix) shall use its reasonable  efforts,  and cause each of its Subsidiaries
to use its reasonable efforts,  consistent with prudent business practice to (A)
preserve intact its business organization and goodwill in all material respects,
(B) keep  available the services of its officers and key  employees,  subject to
changes in the ordinary course, and (C) maintain satisfactory relationships with
suppliers,  distributors,  customers  and  others  having  significant  business
relationships with them, in each case as a group.

<PAGE>

Section  5.2......Proxy  Material;  Registration  Statement.

     (a) As promptly as practicable  after the execution of this Agreement,  the
Company  shall prepare and file with the SEC a proxy  statement  relating to the
meeting of the Company's  stockholders  to be held in connection with the Merger
(together with any amendments  thereof or supplements  thereto,  in each case in
the form or forms mailed to the Company's  stockholders,  the "Proxy Statement")
and Parent shall prepare and file with the SEC a registration  statement on Form
S-4 (together  with all amendments  thereto,  the  "Registration  Statement") in
which the Proxy Statement shall be included as a prospectus,  in connection with
the  registration  under the Securities Act of the shares of Parent Common Stock
to be issued to the stockholders of the Company pursuant to the Merger.  Each of
Parent and the Company will use all reasonable efforts to cause the Registration
Statement to become  effective  as promptly as  practicable,  and,  prior to the
effective  date of the  Registration  Statement,  Parent  shall  take all or any
action  required  under  any  applicable  federal  or state  securities  laws in
connection  with the  issuance of shares of Parent  Common  Stock in the Merger.
Each of Parent and the Company shall furnish all  information  concerning it and
the  holders  of its  capital  stock as the  other  may  reasonably  request  in
connection with such actions and the preparation of the  Registration  Statement
and Proxy Statement. As promptly as practicable after the Registration Statement
shall have become  effective,  the Company shall mail the Proxy Statement to its
stockholders.  The Proxy Statement shall include the recommendation of the Board
of Directors of the Company in favor of the Merger  (subject to Section  5.10(d)
hereof) and the Charter Amendment.

         Subject to Section  5.10(d)  hereof,  no amendment or supplement to the
Proxy  Statement  or the  Registration  Statement  will be made by Parent or the
Company  without the  approval of the other party (which  approval  shall not be
unreasonably  withheld or delayed).  Parent and the Company each will advise the
other,  promptly  after  it  receives  notice  thereof,  of the  time  when  the
Registration  Statement has become  effective or any supplement or amendment has
been  filed,  of  the  issuance  of  any  stop  order,  the  suspension  of  the
qualification  of the Parent Common Stock issuable in connection with the Merger
for  offering  or  sale  in any  jurisdiction,  or any  request  by the  SEC for
amendment  of the Proxy  Statement  or the  Registration  Statement  or comments
thereon and responses thereto or requests by the SEC for additional information.

(b) The  information  supplied  by  Parent  for  inclusion  in the  Registration
Statement and the Proxy  Statement  shall not, at (1) the time the  Registration
Statement  is  declared  effective,  (2) the time the  Proxy  Statement  (or any
amendment thereof or supplement  thereto) is first mailed to the stockholders of
the Company,  (3) the time of the Company Special Meeting, and (4) the Effective
Time,  contain  any untrue  statement  of a  material  fact or omit to state any
material  fact  required to be stated  therein or necessary in order to make the
statements  therein not  misleading.  If at any time prior to the Effective Time
any event or  circumstance  relating  to Parent or any of its  Subsidiaries,  or
their  respective  officers or  directors,  should be discovered by Parent which
should  be set  forth  in an  amendment  or a  supplement  to  the  Registration
Statement or Proxy  Statement,  Parent shall  promptly  inform the Company.  All
documents that Parent is responsible  for filing with the SEC in connection with
the transactions contemplated herein will comply as to form and substance in all
material respects with the applicable requirements of the Securities Act and the
rules  and  regulations  thereunder  and the  Exchange  Act and  the  rules  and
regulations thereunder.

<PAGE>

(c) The  information  supplied by the Company for inclusion in the  Registration
Statement and the Proxy  Statement  shall not, at (1) the time the  Registration
Statement  is  declared  effective,  (2) the time the  Proxy  Statement  (or any
amendment thereof or supplement  thereto) is first mailed to the stockholders of
the Company,  (3) the time of the Company Special Meeting, and (4) the Effective
Time,  contain  any untrue  statement  of a  material  fact or omit to state any
material  fact  required to be stated  therein or necessary in order to make the
statements  therein not  misleading.  If at any time prior to the Effective Time
any event or circumstance relating to the Company or any of its Subsidiaries, or
their  respective  officers or  directors,  should be  discovered by the Company
which should be set forth in an amendment  or a supplement  to the  Registration
Statement or Proxy  Statement,  the Company shall promptly  inform  Parent.  All
documents that the Company is responsible  for filing with the SEC in connection
with the transactions  contemplated  herein will comply as to form and substance
in all material respects with the applicable  requirements of the Securities Act
and the rules and regulations  thereunder and the Exchange Act and the rules and
regulations thereunder.

Section  5.3      Stockholders'  Meeting.  The Company shall, in accordance with
applicable  law and its Amended and Restated  Certificate of  Incorporation  and
By-laws duly call, give notice of, convene and hold a special meeting (which, as
may be duly adjourned,  the "Company  Special  Meeting") of its stockholders for
the purpose of approving  and adopting the  agreement of merger (as such term is
used in  Section  251 of the DGCL) set forth in this  Agreement,  approving  the
Merger and  approving  the Charter  Amendment,  in each case by the holders of a
majority of the outstanding  shares of Company Common Stock (with the holders of
Company  Class A Common  Stock and the holders of Company  Class B Common  Stock
voting together as a single class) and the affirmative  vote of the holders of a
majority of the  outstanding  shares of each of the Company Class A Common Stock
and Company  Class B Common  Stock  voting as  separate  classes  (the  "Company
Stockholder  Approval").  The Company  agrees to use its  reasonable  efforts to
cause the Company Special Meeting to occur within  seventy-five  (75) days after
the date on which the Registration Statement becomes effective,  but not earlier
than  twenty  (20)  business  days after the date the Proxy  Statement  is first
mailed to  stockholders.  The Company shall  include in the Proxy  Statement the
recommendation of its Board of Directors ("Company Board  Recommendation")  that
its stockholders vote in favor of the Company Stockholder  Approval,  subject to
the  duties  of the  Board of  Directors  of the  Company  to make  any  further
disclosure  to the  stockholders  (which  shall not,  unless  expressly  stated,
constitute a withdrawal  or adverse  modification  of such  recommendation)  and
subject  to the  right to  withdraw,  modify or change  such  recommendation  in
accordance with Section 5.10 of this Agreement. If the Board of Directors of the
Company  withdraws,  modifies or changes its recommendation of this Agreement or
the Merger in a manner adverse to Parent or resolves to do any of the foregoing,
the Company shall nevertheless remain obligated to call, give notice of, convene
and hold the Company Special Meeting.

Section  5.4       Approvals and Consents; Cooperation.

(a) The Company and Parent  shall  together,  or  pursuant to an  allocation  of
responsibility  to be agreed upon  between  them:

<PAGE>

     (i) as soon as is  reasonably  practicable  take all such  action as may be
required  under  state  blue  sky or  securities  laws in  connection  with  the
transactions contemplated by this Agreement;

     (ii) promptly prepare and file with the NYSE listing applications  covering
the shares of Parent Common Stock issuable in the Merger or upon exercise of the
Company stock options, warrants, conversion rights or other rights or vesting or
payment of other Company equity based awards and use its reasonable best efforts
to obtain,  prior to the Effective Time, approval for the listing of such Parent
Common Stock, subject only to official notice of issuance;

     (iii)  cooperate  with  one  another  in  seeking  any  actions,  consents,
approvals or waivers or making any filings in connection  with the  transactions
contemplated by this Agreement; and

     (iv)  cooperate  with one another in obtaining  the  opinions  described in
Section 6.1(g) of this Agreement.

(b) Subject to the limitations  contained in Section 5.2, the Company and Parent
shall  each  furnish  to one  another  and to one  another's  counsel  all  such
information as may be required in order to effect the foregoing actions.

Section  5.5      Access to Information;  Confidentiality.  As permitted by law,
each of the Company and Parent  shall,  upon  reasonable  notice to an Executive
Officer (as defined in Section 8.2 hereof) of the Company or Parent, as the case
may be,  afford to the other  party,  and to such party's  authorized  officers,
employees,  accountants,  counsel,  financial advisors and other representatives
(collectively,  "Representatives"),  reasonable  access during  normal  business
hours,  in a manner so as not to  interfere  with the normal  operations  of the
Company or Parent and their  respective  Subsidiaries  and subject to reasonable
restrictions  imposed by an Executive  Officer of the Company or Parent,  as the
case  may  be,  during  the  period  prior  to the  Effective  Time  to all  the
properties,  books, contracts,  commitments and records of the Company or Parent
and their respective Subsidiaries, and during such period, the Company or Parent
shall furnish  promptly to the other party (a) a copy of each report,  schedule,
registration statement and other document filed by it or its Subsidiaries during
such  period  pursuant  to the  requirements  of  applicable  federal  or  state
securities  laws  and  (b)  all  other  information   concerning  its  business,
properties   and   personnel  as  the  other  party  may   reasonably   request.
Notwithstanding  anything to the contrary in this  Agreement,  neither party nor
any or its  Subsidiaries  shall be required to disclose any  information  to the
other party or its authorized  representatives if doing so would (i) violate any
federal,  state, local or foreign law, rule or regulation to which such party or
any of its Subsidiaries is subject, (ii) violate the regulations or requirements
of the NYSE, (iii) violate the terms of any confidentiality agreement or similar
agreement or  arrangement  to which such party or any of its  Subsidiaries  is a
party  (provided that such party shall use all  reasonable  efforts to cause the
counterparty  thereto to waive such  agreement)  or (iv)  directly or indirectly
affect either party's competitive position in any of the markets in which either
party operates or in respect of the activities in which either party is engaged.
No  investigation  or information  furnished  pursuant to this Section 5.5 shall
affect any  representations  or  warranties  made by the  parties  herein or the
conditions  to the  obligations  of the parties to consummate  the Merger.  Each
party will,  and will  counsel  its  Representatives  to, keep such  information
provided to it by the other party  confidential  in accordance with the terms of
the Confidentiality  Agreement,  dated February 18, 2000, between Parent and the
Company (the  "Confidentiality  Agreement") the terms of which are  incorporated
herein by reference,  as if such information were  Confidential  Information (as
such   term   is   defined   in   the   Confidentiality   Agreement).

<PAGE>

Section  5.6      Affiliates.  The Company shall,  prior to the Effective  Time,
deliver  to Parent a list  (reasonably  satisfactory  to  counsel  for  Parent),
setting forth the names and addresses of all Persons who are, at the time of the
Company Special Meeting, in the Company's reasonable  judgment,  "affiliates" of
the Company for purposes of Rule 145 under the Securities Act. The Company shall
furnish such information and documents as Parent may reasonably  request for the
purpose of reviewing such list.  The Company will use its reasonable  efforts to
cause its  affiliates  to  deliver to Parent not later that 10 days prior to the
date of the Company Special Meeting,  a written  agreement  substantially in the
form attached as Exhibit 5.6, with such modifications as may be appropriate, and
will use its  reasonable  efforts  to  cause  Persons  or  entities  who  become
"affiliates"  after  such  date but prior to the  Closing  Date to  execute  and
deliver these agreements at least 5 days prior to the Closing Date.

Section  5.7......Rights Under Stock Plans.

(a) Each  outstanding  option or warrant to  purchase  shares of Company  Common
Stock  ("Option")  granted  under the Company  Stock Option Plans or  otherwise,
which is outstanding  immediately  prior to the Effective  Time,  whether or not
then exercisable,  shall vest in accordance with the terms of such Company Stock
Option  Plan or  agreement  under  which it was  granted and shall be assumed by
Parent and deemed to  constitute  an option or warrant to  acquire,  on the same
terms  and  conditions,   mutatis  mutandis   (including,   without   limitation
adjustments   for   any   stock   dividend,    subdivision,    reclassification,
recapitalization,   split,   combination,   exchange   of  shares   or   similar
transaction),  as were  applicable  under such Option or agreement  prior to the
Effective  Time,  the number of shares of Parent  Common  Stock as the holder of
such Option would have been entitled to receive  pursuant to the Merger had such
holder  exercised  such Option in full  immediately  prior to the Effective Time
(not taking into account whether or not such Option was in fact  exercisable) at
a price per share equal to (x) the aggregate  exercise  price for Company Common
Stock purchasable  pursuant to such Option divided by (y) the Class A Conversion
Number;  provided,  that the number of shares of Parent Common Stock that may be
purchased  upon  exercise of any such Option or agreement  shall not include any
fractional share and, upon exercise of such Option or agreement,  a cash payment
shall be made for any fractional  share based upon the last sale price per share
of Parent  Common  Stock on the trading day  immediately  preceding  the date of
exercise.   From  and  after  the  Effective  Time,  Parent  and  the  Surviving
Corporation  shall  comply with the terms of the Company  Stock Option Plans and
the  agreements  governing any Options.  The  adjustments  provided  herein with
respect to any Options that are "incentive stock options" (as defined in Section
422 of the Code) shall be effected in a manner consistent with Section 424(a) of
the Code.

(b) Parent shall cause to be taken all corporate action necessary to reserve for
issuance a sufficient  number of shares of Parent Common Stock for delivery upon
exercise  of Options  in  accordance  with this  Section  5.7.  As  promptly  as
practicable after the Effective Time, Parent shall use its reasonable efforts to
cause Parent Common Stock subject to assumed Options to be registered  under the
Securities  Act  pursuant  to a  registration  statement  on  Form  S-8  (or any
successor or other  appropriate  forms) and shall use its reasonable  efforts to
cause the  effectiveness of such  registration  statement (and current status of
the prospectus or  prospectuses  contained  therein) to occur promptly after the
Effective  Time  and to be  maintained  for  so  long  as  such  Options  remain
outstanding.

<PAGE>

(c) At the Effective Time, by virtue of the Merger and without any action on the
part of the holder of any stock appreciation right ("SAR"), each outstanding SAR
issued by the Company on or prior to the date of this Agreement shall, as of the
Effective Time,  automatically  and without any action on the part of the holder
thereof,  be assumed by Parent. The holders of such SARs shall continue to have,
and be subject  to, the same terms and  conditions  set forth in the  agreements
pursuant  to which the SARs  were  issued  in  effect  immediately  prior to the
Effective  Time,  except  that  (i) such  SARs  shall  be  exercisable  for cash
representing  that number of whole  shares of Parent  Common  Stock equal to the
product  of the  number  of shares of Class A Common  Stock  covered  by the SAR
immediately  prior to the  Effective  Time  multiplied by the Class A Conversion
Number  rounded up to the nearest  whole number of shares of Parent Common Stock
and (ii) the per share strike price for the cash  representing  shares of Parent
Common  Stock  issuable  upon the exercise of such assumed SAR shall be equal to
the quotient determined by dividing the strike price per share of Class A Common
Stock specified for such SAR under the applicable agreement immediately prior to
the  Effective  Time by the Class A Conversion  Number,  rounding the  resulting
strike  price down to the nearest  whole  cent.  The holders of the SARs will be
entitled to receive only cash upon exercise of the SARs in lieu of Parent Common
Stock as such amount  shall be  determined  in  accordance  with the  agreements
pursuant to which the SARs were issued.

Section  5.8      Filings; Other Action.

(a) Subject to the terms and conditions herein provided,  the Company and Parent
shall (i) promptly make their  respective  filings and thereafter make any other
required  submissions  under the HSR Act,  and (ii) use  reasonable  efforts  to
cooperate with one another in (A)  determining  whether any filings are required
to be made with, or consents, permits,  authorizations or approvals are required
to be obtained  from,  any third  party,  the United  States  government  or any
agencies,  departments or  instrumentalities  thereof or other  governmental  or
regulatory  bodies  or  authorities  of  federal,   state,   local  and  foreign
jurisdictions  in connection  with the execution and delivery of this  Agreement
and the consummation of the transactions contemplated hereby and thereby and (B)
timely making all such filings and timely  seeking all such  consents,  permits,
authorizations  or approvals,  and (iii) take,  or cause to be taken,  all other
actions  and do, or cause to be done,  all  other  things  necessary,  proper or
advisable to consummate and make effective the transactions contemplated hereby,
including, without limitation,  taking or undertaking all such further action as
may be  necessary  to resolve  such  objections,  if any, as the  Federal  Trade
Commission, the Antitrust Division of the Department of Justice, state antitrust
enforcement  authorities or competition authorities of any other nation or other
jurisdiction  or any  other  Person  may  assert  under  relevant  antitrust  or
competition laws with respect to the transactions  contemplated hereby,  subject
to  Parent's  right to direct  such  actions  and things to be done set forth in
Section 5.8(b) below.

<PAGE>

(b) Without  limiting the  generality  of the  undertakings  pursuant to Section
5.8(a):  (i) each of  Parent  and the  Company  shall  provide  promptly  to the
Governmental  Entities with  regulatory  jurisdiction  over  enforcement  of any
applicable  antitrust laws (each a, "Government  Antitrust Entity")  information
and documents requested by such Government Antitrust Entity or necessary, proper
or advisable to permit  consummation  of the  transactions  contemplated by this
Agreement;  (ii) without in any way limiting the provisions of Section 5.8(a)(i)
above,  each of Parent and the Company  shall file any  Notification  and Report
Form and  related  material  required  under  the HSR Act as soon as  reasonably
practicable   after  the  date  of  this  Agreement,   and  thereafter  use  its
commercially reasonable efforts to certify as soon as reasonably practicable its
substantial   compliance  with  any  requests  for  additional   information  or
documentary  material  that may be made under the HSR Act,  unless Parent in its
reasonable judgment determines that it is reasonable in the circumstances not to
comply   substantially   with  any  requests  for  additional   information  and
documentary  material  under the HSR Act;  (iii) each of the  Company and Parent
will keep the other informed of any material  communication,  and provide to the
other  copies  of all  correspondence,  between  it (or  its  advisors)  and any
Government  Antitrust  Entity  relating to this  Agreement or any of the matters
described in this Section 5.8(b);  and (iv) each of the Company and Parent shall
permit the other to review any material  communication to be given by it to, and
shall  consult with each other in advance of any  telephonic  calls,  meeting or
conference with, any Government  Antitrust Entity and, to the extent  permitted,
give  the  other  party  the  opportunity  to  attend  and  participate  in such
telephonic  calls,   meetings  and  conferences.   Notwithstanding  any  of  the
foregoing,  no failure to obtain termination of the waiting period under the HSR
Act shall be deemed to be a breach  hereunder by the Company or Parent.  Subject
to the foregoing,  Parent shall be principally responsible for and in control of
the process of dealing with any Government Antitrust Entity. Notwithstanding the
provisions of Section 5.8(a) and 5.8(b),  in the event that either Parent or the
Company  is  requested,  as  a  condition  to  obtaining  the  approval  of  any
Governmental  Antitrust Entity to the transactions  contemplated  hereunder,  to
take any  action  which if taken  would have a  Material  Adverse  Effect on the
combined consolidated businesses,  assets, operations or prospects of Parent and
Company,  then  neither  Parent nor the  Company  shall be required to take such
action and no failure by either  Parent or the Company to take such action shall
be  deemed  a breach  of this  Section  5.8 or of any  other  provision  of this
Agreement.

Section 5.9 Further Assurances. In case at any time after the Effective Time any
further  action is  necessary  or  desirable  to carry out the  purposes of this
Agreement,  the proper  officers of the  Company and Parent  shall take all such
necessary action.

Section 5.10      No Solicitation by the Company.

(a) The Company agrees that it, prior to the Effective Time, shall not, directly
or  indirectly,  nor shall it permit  any of its  Subsidiaries  to, nor shall it
authorize  or  permit  any  officer,  director,  employee  or agent  of,  or any
investment banker,  attorney,  accountant or other advisor or representative of,
the   Company  or  any  of  its   Subsidiaries   (collectively,   the   "Company
Representatives")  to, directly or indirectly  through another Person,  solicit,
initiate, encourage, induce or facilitate the making, submission or announcement
of any Acquisition  Proposal,  or participate in any discussions or negotiations
regarding, or furnish to any Person any information with respect to, or take any
other action to  facilitate  any  inquiries  or the making of any proposal  that
constitutes,  or  would  reasonably  be  expected  to lead to,  any  Acquisition
Proposal,  or approve,  endorse or recommend any Acquisition  Proposal, or enter
into any letter of intent,  agreement  in  principle,  acquisition  agreement or
other document or contract contemplating or otherwise relating to an Acquisition
Proposal,  provided,  however,  that, prior to the adoption and approval of this
Agreement by the requisite Company Stockholder Approval, the foregoing shall not
prohibit the Company from furnishing information to or entering into discussions
or negotiations with, any Person that makes an unsolicited bona fide proposal to
enter into a business  combination  with the Company  pursuant to an Acquisition
Proposal  which the Board of Directors of the Company (or any committee  thereof
considering such proposal) in good faith  determines is reasonably  likely to be
more favorable to the Company's stockholders than the transactions  contemplated
by this Agreement (a "Superior Proposal"), so long as:

<PAGE>

(i) prior to furnishing  any  information  to, or entering into  discussions  or
negotiations  with, such a Person the Company provides 48 hours' advance written
notice to Parent to the effect that it is furnishing information to, or entering
into  substantive  discussions  or  negotiations  with,  a Person  from whom the
Company  shall have received an executed  confidentiality  agreement in form and
substance  similar to the  Confidentiality  Agreement  prior to furnishing  such
information;

(ii) such notice  shall  include the terms and  conditions  of such  Acquisition
Proposal or any agreement proposed by, or any information  supplied to, any such
Person;

(iii) prior to furnishing  any  nonpublic  information  to any such Person,  the
Company furnishes such nonpublic  information to Parent (to the extent that such
nonpublic  information  has not been  previously  furnished  by the  Company  to
Parent);

(iv)  neither  the Company  nor any of its  Subsidiaries  nor any of the Company
Representatives  shall have violated any of the  restrictions  set forth in this
Section 5.10;

(v) such unsolicited bona fide proposal  relating to a Superior Proposal is made
by a third party that the Board of  Directors  of the Company (or any  committee
thereof  considering such proposal)  determines in good faith has the good faith
intent to proceed with negotiations to consider such Superior Proposal;

(vi) the Board of Directors of the Company (or any committee thereof considering
such  proposal),  after duly  considering  the written  advice of outside  legal
counsel to the  Company,  determines  in good faith that such action is required
for the Board of Directors of the Company to comply with its fiduciary duties to
stockholders imposed by applicable law; and

(vii) the Company  uses all  reasonable  efforts to keep Parent  informed in all
material  respects  of  the  status  and  terms  of  any  such  negotiations  or
discussions  (including  without limitation the identity of the Person with whom
such  negotiations  or discussions are being held) and provides Parent copies of
such written proposals and any amendments or revisions thereto or correspondence
related thereto.

<PAGE>

(b) The Company  shall notify  Parent  orally and in writing of the fact that it
has received  inquiries,  offers or proposals that it reasonably  believes to be
bona fide with  respect to an  Acquisition  Proposal  within 24 hours  after the
Company obtains  Knowledge of the receipt thereof.  The Company will immediately
cease  and  cause to be  terminated  any  existing  activities,  discussions  or
negotiations  with any other  Person that have been  conducted  heretofore  with
respect to a potential  Acquisition  Proposal.  The Company agrees to inform the
Company  Representatives  of the  obligations  undertaken  in this Section 5.10;
provided,  however,  that nothing  contained in this Agreement shall prevent the
Board of Directors of the Company from referring any third-party to this Section
5.10.

(c) The Company  agrees not to release or permit the release of any Person from,
or to waive or permit  the  waiver of any  provision  of,  any  confidentiality,
"standstill"  or  similar   agreement  to  which  the  Company  or  any  of  its
Subsidiaries is a party, and will use its best efforts to enforce or cause to be
enforced each such agreement at the request of Parent.

(d) Except as expressly  permitted by this  Section  5.10,  neither the Board of
Directors of the Company nor any committee thereof shall (i) withdraw, modify or
change,  or propose publicly to withdraw,  modify or change, in a manner adverse
to Parent,  the  approval or  recommendation  by such Board of Directors or such
committee of the Merger or this Agreement, (ii) approve or recommend, or propose
publicly  to approve or  recommend,  any  Superior  Proposal  or (iii) cause the
Company to enter into any letter of intent, agreement in principle,  acquisition
agreement or other similar agreement (each, an "Acquisition  Agreement") related
to any Acquisition  Proposal.  Notwithstanding the foregoing,  in the event that
the Board of Directors of the Company (or any committee  thereof  considering an
Acquisition  Proposal) determines in good faith, after consultation with outside
counsel,  that in light of a Superior Proposal it is necessary to do so in order
to act in a  manner  consistent  with  its  fiduciary  duties  to the  Company's
stockholders  under  applicable  law,  the Board of Directors of the Company may
(subject to this and the  following  sentences)  withdraw,  modify or change its
recommendation of the Merger, but only after 48 hours following Parent's receipt
of written notice  advising Parent that the Board of Directors of the Company is
prepared to do so, and only if, during such 48- hour period, the Company and its
advisors  shall  have  negotiated  in  good  faith  with  Parent  to  make  such
adjustments in the terms and conditions of this Agreement as would enable Parent
to proceed with the transactions contemplated herein on such adjusted terms.

(e) Nothing  contained  in this  Section  5.10 shall  prohibit  the Company from
taking and disclosing to its stockholders a position contemplated by Rules 14d-9
and/or 14e-2(a) promulgated under the Exchange Act or from making any disclosure
to the  Company's  stockholders  if, in the good faith  judgment of the Board of
Directors of the Company, after consultation with outside counsel, failure so to
disclose would be inconsistent with its obligations under applicable law.

Section 5.11    Director and Officer Liability.

<PAGE>

(a) Parent,  Merger Sub and the Company agree that all rights to indemnification
and all limitations on liability existing in favor of any Indemnitee (as defined
below)  as  provided  in the  Company's  Amended  and  Restated  Certificate  of
Incorporation,  Company's  By-laws,  the charter or By-laws of any Subsidiary of
the Company or any  Indemnity  Agreement  (as defined  below) shall  survive the
Merger and continue in full force and effect. To the extent permitted by (i) the
DGCL, (ii) the Company's Amended and Restated Certificate of Incorporation,  the
Company's  By-laws,  the charter or By-laws of any  Subsidiary of the Company or
(iii)  any  agreement  providing  for  indemnification  by  the  Company  or any
Subsidiary  of the  Company  of any  Indemnitee  in  effect  on the date of this
Agreement  (including  any  indemnity  provisions  contained  in  any  agreement
providing for the registration of securities) (each, an "Indemnity  Agreement"),
advancement of Indemnitee  Expenses (as defined below)  pursuant to this Section
5.11 shall be mandatory  rather than  permissive  and the Parent shall cause the
Surviving  Corporation  to advance Costs (as defined  below) in connection  with
such  indemnification.  Parent shall cause the Surviving Corporation to honor in
accordance  with their  terms all  Indemnity  Agreements.  In the event that the
Surviving Corporation fails to make any payments required or permitted under any
Indemnity  Agreement,  Parent  agrees to make all such  payments  within 15 days
thereafter.

(b) For a period of six (6) years after the Effective  Time,  Parent  shall,  or
shall cause the Surviving  Corporation  to,  maintain  officers' and  directors'
liability  insurance and fiduciary  liability insurance covering the Indemnitees
who are currently covered by the Company's  existing officers' and directors' or
fiduciary  liability  insurance  policies on terms no less  advantageous to such
indemnified  parties  than such  existing  insurance;  provided,  however,  that
neither  Parent  nor the  Surviving  Corporation  will be  required  in order to
maintain such policies to pay an annual premium in excess of 150% of the greater
of (i) the last annual  premium  paid by the  Company  prior to the date of this
Agreement and (ii) the annual  premium for the year in which the Closing  occurs
(the "Cap");  and provided,  further,  that, if  equivalent  coverage  cannot be
obtained,  or can be obtained only by paying an annual  premium in excess of the
Cap, then Parent shall,  or shall cause the Surviving  Corporation  to, maintain
policies  that, in Parent's good faith  judgment,  provide the maximum  coverage
available at an annual premium equal to the Cap.

(c) In addition to the other rights provided for in this Section 5.11 and not in
limitation thereof,  for six (6) years from and after the Effective Time, Parent
shall cause the Surviving  Corporation  to, to the fullest  extent  permitted by
applicable  law, (i) indemnify and hold harmless the individuals who on or prior
to the Effective  Time were  officers,  directors or employees of the Company or
any of its Subsidiaries,  and the heirs,  executors,  trustees,  fiduciaries and
administrators  of such  officers,  directors or  employees  and each person who
served at the request,  or on behalf,  of the Company or any of its Subsidiaries
as an officer, director or employee of another corporation,  partnership, trust,
joint   venture,   pension  or  other   employee   benefit  plan  or  enterprise
(collectively,  the "Indemnitees")  against all losses,  Indemnitee Expenses (as
hereinafter defined), claims, damages,  liabilities,  judgments, or amounts paid
in settlement (collectively,  "Costs") in respect to any threatened,  pending or
completed  claim,   action,  suit  or  proceeding,   whether  criminal,   civil,
administrative  or investigative  based on, or arising out of or relating to the
fact that such person is or was a  director,  officer or employee of the Company
or any of its  Subsidiaries  or  served at the  request,  or on  behalf,  of the
Company  or any of its  Subsidiaries  and  arising  out  of  acts  or  omissions
occurring on or prior to the Effective Time (including,  without limitation,  in
respect  of  acts  or  omissions  in  connection  with  this  Agreement  and the
transactions contemplated hereby) (an "Indemnifiable Claim") and (ii) advance to
such  Indemnitees  all  Indemnitee  Expenses  incurred  in  connection  with any
Indemnifiable  Claim  promptly after receipt of reasonably  detailed  statements
therefor;  provided that, except as otherwise provided pursuant to any Indemnity
Agreement, the person to whom Indemnitee Expenses are to be advanced provides an
undertaking  to repay such  advances if it is  ultimately  determined  that such
person  is  not  entitled  to  indemnification  from  Parent  or  the  Surviving
Corporation.  In the  event  that the  Surviving  Corporation  fails to make any
payments required or permitted under this Section 5.11(c), Parent agrees to make
all such  payments  within 15 days  thereafter.  In the event any  Indemnifiable
Claim  is  asserted  or  made  within  such  six  year  period,  all  rights  to
indemnification  and  advancement of Indemnitee  Expenses in respect of any such
Indemnifiable Claim shall continue until such Indemnifiable Claim is disposed of
or all  judgments,  orders,  decrees or other  rulings in  connection  with such
Indemnifiable Claim are fully satisfied;  provided,  however,  that Parent shall
not be liable for any  settlement  effected  without its written  consent (which
consent shall not be unreasonably withheld or delayed).  Except as otherwise may
be provided pursuant to any Indemnity Agreement,  the Indemnitees as a group may
retain  only one law firm with  respect  to each  related  matter  except to the
extent there is, in the opinion of counsel to an  Indemnitee,  under  applicable
standards of professional  conduct,  a conflict on any significant issue between
positions of any two or more Indemnitees. For the purposes of this Section 5.11,
"Indemnitee  Expenses"  shall include  reasonable  attorneys' fees and all other
costs,  charges and expenses paid or incurred in connection with  investigating,
defending,  being a witness in or  participating  in (including  on appeal),  or
preparing to defend, be a witness in or participate in any Indemnifiable Claim.

<PAGE>

(d) Notwithstanding any other provisions hereof, the obligations of the Company,
the  Surviving  Corporation  and Parent  contained in this Section 5.11 shall be
binding upon the successors and assigns of Parent and the Surviving Corporation.
In the event  Parent or the  Surviving  Corporation  or any of their  respective
successors or assigns (i)  consolidates  with or merges into any other Person or
(ii)  transfers  all or  substantially  all of its  properties  or assets to any
Person,  then,  and in  each  case,  proper  provision  shall  be  made  so that
successors and assigns of Parent or the Surviving  Corporation,  as the case may
be, honor the indemnification obligations set forth in this Section 5.11.

(e) The obligations of the Company, the Surviving Corporation,  and Parent under
this Section 5.11 shall survive the  consummation of the Merger and shall not be
terminated or modified in such a manner as to adversely affect any Indemnitee to
whom this Section 5.11 applies  without the consent of such affected  Indemnitee
(it being  expressly  agreed  that the  Indemnitees  to whom this  Section  5.11
applies shall be third party  beneficiaries  of this Section 5.11,  each of whom
may enforce the provisions of this Section 5.11).

(f) Parent  shall cause the  Surviving  Corporation  to advance  all  Indemnitee
Expenses to any Indemnitee incurred enforcing the indemnity or other obligations
provided for in this Section 5.11.

<PAGE>

Section 5.12 Accountants'  "Comfort"  Letters.  The Company and Parent will each
use reasonable efforts to cause to be delivered to each other letters from their
respective independent accountants, dated a date within two business days before
the  effective  date  of  the   Registration   Statement,   in  form  reasonably
satisfactory  to the  recipient  and  customary  in scope  for  comfort  letters
delivered by independent  accountants in connection with registration statements
on Form S-4 under the Securities Act.


Section  5.13.....Additional  Reports. The Company and Parent shall each furnish
to the other  copies of any reports of the type  referred to in Sections 3.4 and
4.4 which it files with the SEC on or after the date of this Agreement,  and the
Company or Parent,  as the case may be,  represents  and warrants that as of the
respective dates thereof,  such reports will not contain any untrue statement of
a material fact or omit to state a material  fact required to be stated  therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not  misleading;  provided,  that the foregoing  shall not
apply to the financial  statements  contained  therein (which are covered by the
following  sentence).  Any consolidated  financial  statements  included in such
reports (including any related notes and schedules) will fairly present,  in all
material  respects,  the financial  position of the Company and its consolidated
Subsidiaries or Parent and its consolidated Subsidiaries, as the case may be, as
of the dates thereof and their  results of  operations  and changes in financial
position  or other  information  included  therein  for the periods or as of the
dates then ended (subject,  where appropriate,  to normal year-end adjustments),
in each case in accordance  with GAAP  consistently  applied  during the periods
involved  (except as otherwise  disclosed  in the notes  thereto and except that
such  unaudited  financial  statements  will  not  include  all of the  footnote
disclosures notes required by GAAP).

Section 5.14 Plan of Reorganization.  This Agreement is intended to constitute a
"plan of reorganization"  within the meaning of Section 1.368-2(g) of the income
tax  regulations  promulgated  under the  Code.  From and after the date of this
Agreement  and  until  the  Effective  Time,  each  party  hereto  shall use its
reasonable  efforts to cause the Merger to qualify,  and will not knowingly take
any actions or cause any actions to be taken which could prevent the Merger from
qualifying,  as a  reorganization  under the provisions of Section 368(a) of the
Code.  Following the Effective Time, neither the Surviving  Corporation,  Parent
nor any of their  affiliates  shall knowingly take any action or knowingly cause
any  action to be taken  which  would  cause the  Merger to fail to qualify as a
reorganization under Section 368(a) of the Code.

Section 5.15.....Conveyance Taxes. Each of Parent and the Company, respectively,
shall timely pay any stock  transfer and stamp taxes,  any transfer,  recording,
registration  and other fees,  and any similar  taxes or fees not  including any
income tax, gross receipts tax or any similar tax measured with respect to gross
or net income  (collectively,  the "Conveyance Taxes") imposed on it at or prior
to the Effective Time in connection with the transactions contemplated hereunder
that are  required to be paid in  connection  therewith.  Parent and the Company
shall  cooperate in the  preparation,  execution  and filing of all Tax Returns,
questionnaires,  applications,  or other documents regarding any such Conveyance
Taxes.

Section  5.16     Public  Announcements.  The initial press release  relating to
this Agreement shall be a joint press release mutually agreed upon by Parent and
the Company.  Unless otherwise required by applicable Law or the requirements of
any listing agreement with any applicable stock exchange, Parent and the Company
shall  each use their  reasonable  efforts to  consult  with each  other  before
issuing any press release or otherwise making any public statements with respect
to this Agreement or any  transaction  contemplated  by this Agreement and shall
not issue any such press release or make any such public statement prior to such
consultation.

<PAGE>

Section  5.17      Termination  Fee and Expenses.

(a) Except as provided in paragraph (c) and (d), all Expenses (as defined below)
incurred by the parties  hereto  shall be borne solely and entirely by the party
that has incurred such Expenses;  provided,  however,  that if this Agreement is
terminated  for any  reason,  then the share of Parent and the  Company  for all
Expenses  (including  any  fees  and  expenses  of  accountants,   experts,  and
consultants, but excluding the fees and expenses of legal counsel and investment
bankers)  related to preparing,  printing,  filing and mailing the  Registration
Statement,  the Proxy  Statement  and all SEC and other  regulatory  filing fees
incurred in connection with the Registration Statement,  Proxy Statement and HSR
Act, shall be one-half each.

(b)  "Expenses" as used in this  Agreement  shall
include all reasonable  out-of-pocket  expenses (including,  without limitation,
all reasonable fees and expenses of counsel,  accountants,  investment  bankers,
experts and  consultants  to a party  hereto and its  affiliates)  incurred by a
party or on its  behalf in  connection  with or  related  to the  authorization,
preparation,  negotiation,  execution and  performance  of this  Agreement,  the
preparation,  printing,  filing and mailing of the Registration  Statement,  the
Proxy Statement,  the solicitation of stockholder  approvals,  requisite HSR Act
filings and all other matters related to the  consummation  of the  transactions
contemplated hereby.

(c) The Company agrees that, if:

(i) Parent terminates this Agreement  pursuant to Section  7.1(g);

(ii) Parent  terminates  this  Agreement  pursuant to Section 7.1(d) as a direct
result of a material  breach by the  Company of a  representation,  warranty  or
covenant  under  this  Agreement  that is within the  control of the  Company or
Parent  terminates  this  Agreement  pursuant to Section 7.1(b) at a time that a
Company Breach (as defined in Section  7.1(d)) within the control of the Company
exists; or

(iii) the Company or Parent terminates this Agreement pursuant to Section 7.1(f)
due to the failure to receive Company Stockholder Approval;

and,  in each case  described  in  clauses  (i)  through  (iii) of this  Section
5.17(c),  within ten  months  after the  termination  of this  Agreement:

(A)  a transaction is consummated,  which  transaction,  if offered or proposed,
     would constitute an Acquisition Proposal;


(B)  a  definitive  agreement  (the  execution  and  delivery  of which has been
     authorized by the boards of directors,  or comparable bodies, that would if
     consummated  constitute an Acquisition  Proposal) for such a transaction is
     entered into and such transaction is consummated whether or not within such
     ten-month period; or

<PAGE>

(C)  any Person shall have acquired beneficial ownership or the right to acquire
     beneficial  ownership  of, or any  "group"  (as such term is defined  under
     Section 13(d) of the Exchange Act and the rules and regulations promulgated
     hereunder), shall have been formed that beneficially owns, or has the right
     to acquire beneficial  ownership of, outstanding shares of capital stock of
     the  Company  then  representing  50% or more of any  class of the  Company
     Common Stock,  provided  that this  subclause (C) shall not apply to Robert
     F.X.  Sillerman  and his  Affiliates  with respect to the shares of Company
     Common Stock  beneficially  owned by Mr.  Sillerman or his Affiliates as of
     the date of this Agreement,

then,  upon the first to occur of any such case referred to in  subclauses  (A),
(B) or (C), the Company shall pay to Parent a  termination  fee of $100 million,
plus the  reasonably  documented  Expenses  of Parent up to $20 million (in each
case,  less any amounts paid by the Company to Parent  pursuant to the following
paragraph).  Parent  may assert its right to the  termination  fee and  Expenses
under one or more cases set forth under this  Section  5.17(c),  but in no event
shall  Parent  receive a  termination  fee or fees of more than $100  million or
reimbursement  of  Expenses  in an amount of more than $20  million  under  this
Section 5.17.

                  Without  limiting the  foregoing,  if Parent  terminates  this
Agreement pursuant to Section 7.1(g), then, within 48 hours of such termination,
the  Company  shall pay to Parent a  termination  fee of $50  million,  plus the
reasonably documented Expenses of Parent of up to $20 million.

(d)  Notwithstanding the provisions of Section 5.17(c), if the Company or Parent
terminates  this  Agreement  pursuant  to Section  7.1(f) due to the  failure to
receive Company  Stockholder  Approval and (x) at the time of such  termination,
Parent shall not have a right to terminate  this  Agreement  pursuant to Section
7.1(g),  (y) the Company  does not enter into an  Acquisition  Agreement  within
seventy-five (75) days after the date of such termination and (z) the applicable
Parent Common Stock Market Value is less than $69.72 per share, then the Company
shall  not be  required  to pay to  Parent  any  termination  fee (but  shall be
required to pay  reasonably  documented  Expenses  of Parent up to $20  million)
pursuant to Section 5.17(c).

Section 5.18     Notice of Certain Events. Each party to this Agreement shall as
promptly as reasonably  practicable  notify the other parties hereto of:

     (a) any notice or other  communication  from any Person  alleging  that the
consent of such Person (or other  Person) is or may be  required  in  connection
with the transactions contemplated by this Agreement;

     (b) any  notice  or other  communication  from any  Governmental  Entity in
connection with the transactions contemplated by this Agreement;

     (c) any actions, suits, claims, investigations or proceedings commenced or,
to the best of its Knowledge,  threatened  against,  relating to or involving or
otherwise  affecting  it  which  would  cause  any  representation  or  warranty
contained in this  Agreement to be untrue or inaccurate in any material  respect
at any time  from  the date of this  Agreement  to the  Effective  Time or which
relate to the consummation of the transactions contemplated by this Agreement;

<PAGE>

     (d) any notice of, or other  communication  relating to, a default or event
that, with notice or lapse of time or both, would become a default,  received by
it or any of its  Subsidiaries  subsequent to the date of this Agreement,  under
any material agreement; and

     (e) any Material  Adverse Effect of the Company or Material  Adverse Effect
of Parent or the occurrence of any event which is reasonably likely to result in
a Material Adverse Effect of the Company or a Material Adverse Effect of Parent,
as the case may be.

Section  5.19   Section 16(b) Board Approval.

(a) Prior to Closing, the Board of Directors of Parent shall, by resolution duly
adopted  by  such  Board  of  Directors  or  a  duly  authorized   committee  of
"non-employee  directors" thereof,  approve and adopt, for purposes of exemption
from  "short-swing"  liability  under  Section  16(b) of the  Exchange  Act, the
acquisition  of  Parent  Common  Stock at the  Effective  Time by  officers  and
directors of Parent (including  officers or directors of the Company who become,
prior to,  at, or  following  the  Effective  Time of the  Merger,  officers  or
directors of Parent) as a result of the  conversion of shares of Company  Common
Stock in the Merger and the assumption of the Options by Parent at the Effective
Time. Such resolution shall set forth the name of the applicable  "insiders" for
purposes  of Section 16 of the  Exchange  Act,  the number of  securities  to be
acquired by each  individual,  that the approval is being  granted to exempt the
transaction  under Rule 16b-3 under the Exchange Act, and, for the Options to be
assumed by Parent at the Effective  Time,  the material terms of the options and
warrants to purchase  Parent Common Stock  acquired by such insiders as a result
of the assumption by Parent of such Options.

(b) Prior to Closing, the Board of Directors of the Company shall, by resolution
duly  adopted by such  Board of  Directors  or a duly  authorized  committee  of
"non-employee  directors" thereof,  approve and adopt, for purposes of exemption
from  "short-swing"  liability  under  Section  16(b) of the  Exchange  Act, the
conversion at the Effective  Time of the shares of the Company Common Stock held
by officers and directors of the Company into shares of Parent Common Stock as a
result of the  conversion of shares in the Merger,  and the assumption by Parent
at the  Effective  Time of the  Options of the  officers  and  directors  of the
Company.  Such resolution shall set forth the name of the applicable  "insiders"
for  purposes of Section 16 of the Exchange  Act and,  for each  "insider,"  the
number of shares of Company  Common Stock to be converted  into shares of Parent
Common Stock at the Effective Time, the number and material terms of the Options
to be assumed by Parent at the  Effective  Time,  and that the approval is being
granted to exempt the  transaction  under Rule  16b-3  under the  Exchange  Act.


Section 5.20       Employee Plans and Employment Agreements.

(a) From and  after  the  Effective  Time,  the  Surviving  Corporation  and its
Subsidiaries will honor in accordance with their terms all existing  employment,
severance,  consulting and salary continuation agreements between the Company or
any of its Subsidiaries and any current or former officer, director, employee or
consultant of the Company or any of its  Subsidiaries or group of such officers,
directors, employees or consultants.

<PAGE>

(b) As soon  as  administratively  feasible  following  the  Closing  Date,  the
Surviving  Corporation  and its  Subsidiaries  shall or Parent  shall  cause the
Surviving  Corporation and it Subsidiaries to, provide  employees of the Company
or its  Subsidiaries  (excluding  employees  covered  by  collective  bargaining
agreements) employee benefit plans, severance benefits,  programs,  policies and
arrangements  that are no less favorable in the aggregate than such programs and
policies   provided  to   similarly   situated   employees  of  Parent  and  its
Subsidiaries.

(c) To the extent  permitted under  applicable law, each employee of the Company
or its  Subsidiaries  shall be given  credit for all service with the Company or
its Subsidiaries (or service credited by the Company or its Subsidiaries)  under
all employee benefit plans,  programs,  policies and arrangements  maintained by
the  Surviving  Corporation  in which they  participate  or in which they become
participants  for  all  purposes  including,  without  limitation,  service  for
purposes of determining (i) short-term and long-term disability  benefits;  (ii)
severance  benefits;  (iii) vacation benefits;  and (iv) vesting and eligibility
but  not  accrued  benefits  under  any  qualified,   non-qualified  pension  or
retirement plan and each welfare benefit plan. All  pre-existing  conditions and
exclusions  (to the extent such  conditions or exclusions  are covered under the
plans of the Company and any of its Subsidiaries)  shall be waived. All expenses
incurred by any employee for  deductibles  and co-payments in the portion of the
year prior to the date an employee first became a participant in such plan shall
be credited to the benefit of such employee under such plan in the year in which
such employee's participation commenced.

Section  5.21     Stock  Exchange  Listing.  Parent shall  promptly  prepare and
submit  to the NYSE and any other  applicable  exchange  a  listing  application
covering the shares of Parent  Common Stock to be issued in the Merger and shall
use  reasonable  best efforts to cause such shares to be approved for listing on
such exchange,  subject to official  notice of issuance,  prior to the Effective
Time.

                                   ARTICLE 6
                            CONDITIONS TO THE MERGER

Section 6.1      Conditions to the Obligations of Each Party. The obligations of
the Company,  Parent and Merger Sub to consummate  the Merger are subject to the
satisfaction  or  waiver  on or  prior  to the  Closing  Date  of the  following
conditions:

(a) The Registration  Statement shall have become effective under the Securities
Act and no stop order suspending the effectiveness of the Registration Statement
shall have been issued by the SEC and no proceeding  for that purpose shall have
been initiated by the SEC.

<PAGE>

(b)      The Company Stockholder Approval shall have been obtained.

(c) No statute,  rule,  regulation,  executive  order,  decree,  preliminary  or
permanent  injunction or  restraining  order shall have been  enacted,  entered,
promulgated  or  enforced  by  any  Governmental   Entity  which  prohibits  the
consummation of the transactions  contemplated  hereby.  No action or proceeding
(other  than any action or  proceeding  pursuant  to or in  connection  with the
Antitrust  Laws) by any  Governmental  Entity shall have been  commenced (and be
pending),  or, to the Knowledge of the parties hereto,  threatened,  against the
Company or Parent or any of their respective Affiliates,  partners,  associates,
officers or directors, or any officers or directors of such Persons,  seeking to
prevent or delay the transactions  contemplated hereby or challenging any of the
terms of provisions of this Agreement or seeking  material damages in connection
therewith.

(d) All  consents  and  approvals  (other than any consent or approval  required
pursuant to or in connection with the Antitrust  Laws) of Governmental  Entities
necessary for  consummation of the transactions  contemplated  hereby shall have
been  obtained,  other  than  those  which,  if not  obtained,  would not in the
aggregate  reasonably  be  expected  to have a  Material  Adverse  Effect on the
Company or Parent.

(e)  Any  waiting  period  (and  any  extension   thereof)   applicable  to  the
consummation  of the  Merger  under  the  HSR Act  shall  have  expired  or been
terminated.

(f) The  shares  of  Parent  Common  Stock to be  issued  in the  Merger or upon
exercise  of the  Options  shall have been  authorized  for listing on the NYSE,
subject to official notice of listing.

(g)  Each  of  the  Company  and  Parent  shall  have  received   prior  to  the
effectiveness of the Registration Statement an opinion of its tax counsel, Paul,
Hastings,  Janofsky & Walker LLP, and Akin, Gump, Strauss, Hauer & Feld, L.L.P.,
respectively,  in form and substance reasonably  satisfactory to the Company and
Parent,  as applicable,  to the effect that, the Merger will qualify for federal
income tax purposes as a reorganization  within the meaning of Section 368(a) of
the Code,  that the Company,  Parent and Merger Sub will each be a "party to the
reorganization"  within  the  meaning of  Section  368(b) of the Code,  and that
accordingly  none of the Company,  Parent and Merger Sub shall recognize gain or
loss for federal income tax purposes as a result of the Merger and  stockholders
of the Company will not recognize  gain or loss for federal  income tax purposes
on the receipt  pursuant to the Merger of Parent  Common  Stock in exchange  for
shares of Company Common Stock,  except with respect to cash received in lieu of
fractional  shares of Parent Common Stock.  For purposes of these opinions,  the
Merger will not include the Charter Amendment. In rendering such opinions, Paul,
Hastings,  Janofsky & Walker LLP and Akin, Gump,  Strauss,  Hauer & Feld, L.L.P.
shall receive and may rely upon  representations  contained in  certificates  of
Parent,  Merger Sub and the Company in form and substance  substantially similar
to the certificates attached hereto as Exhibits 6.1(a)-1 and 6.1(a)-2.

Section  6.2      Conditions  to the  Obligations  of Parent and Merger Sub. The
obligations of Parent and Merger Sub to consummate the Merger are subject to the
satisfaction  or  waiver  by  Parent  on or  prior  to the  Closing  Date of the
following further condition:

<PAGE>

(a) The Company shall have  performed in all material  respects its  obligations
under this Agreement required to be performed by it at or prior to the Effective
Time and the  representations  and  warranties of the Company  contained in this
Agreement, to the extent qualified with respect to materiality shall be true and
correct in all  respects,  and to the extent not so qualified  shall be true and
correct in all material respects,  in each case as of the date of this Agreement
and at and as of the Effective Time as if made at and as of such time, except as
expressly  contemplated by the Company  Disclosure  Letter or this Agreement and
except that the accuracy of  representations  and warranties that by their terms
speak as of the date of this  Agreement or some other date will be determined as
of such  date,  and  Parent  shall  have  received  a  certificate  of the Chief
Executive  Officer  and  Chief  Financial  Officer  of  the  Company  as to  the
satisfaction of this condition.

Section  6.3      Conditions  to the Obligations of the Company. The obligations
of the  Company to  consummate  the Merger are  subject to the  satisfaction  or
waiver by the Company on or prior to the Closing Date of the  following  further
condition:

(a) Parent shall have performed in all material  respects its obligations  under
this Agreement  required to be performed by it at or prior to the Effective Time
and the representations and warranties of Parent contained in this Agreement, to
the extent  qualified with respect to  materiality  shall be true and correct in
all  respects,  and to the extent not so qualified  shall be true and correct in
all material respects,  in each case as of the date of this Agreement and at and
as of the Effective Time as if made at and as of such time,  except as expressly
contemplated by Parent  Disclosure  Letter or this Agreement and except that the
accuracy of  representations  and warranties that by their terms speak as of the
date of this  Agreement or some other date will be  determined  as of such date,
and the Company shall have received a certificate of the Chief Executive Officer
and Chief Financial Officer of Parent as to the satisfaction of this condition.

                                   ARTICLE 7
                                   TERMINATION

Section 7.1      Termination. This Agreement may be terminated at any time prior
to the Effective Time,  whether before or after approval by the  stockholders of
the Company:

(a) by the mutual written consent of Parent and the Company;

(b) by  either  Parent  or the  Company  if the  Effective  Time  shall not have
occurred on or before January 31, 2001 (the "Termination  Date");  provided that
the party seeking to terminate  this  Agreement  pursuant to this Section 7.1(b)
shall not have  breached  in any  material  respect its  obligations  under this
Agreement in any manner that shall have  proximately  contributed to the failure
to consummate the Merger on or before the Termination Date;

(c) by the  Company  if there  has  been a  material  breach  by  Parent  of any
representation,  warranty,  covenant or  agreement  set forth in this  Agreement
which  breach  (if  susceptible  to  cure)  has not been  cured in all  material
respects  within twenty  business days following  receipt by Parent of notice of
such breach (a "Parent Breach");

<PAGE>

(d) by  Parent,  if there  has been a  material  breach  by the  Company  of any
representation,  warranty,  covenant  or  other  agreement  set  forth  in  this
Agreement  which  breach  (if  susceptible  to cure)  has not been  cured in all
material  respects within twenty business days following  receipt by the Company
of notice of such breach (a "Company Breach");

(e) by either the Company or Parent,  if there shall be any applicable law, rule
or regulation that makes  consummation of the Merger illegal or if any judgment,
injunction, order or decree of a court or other Governmental Entity of competent
jurisdiction shall restrain or prohibit the consummation of the Merger, and such
judgment, injunction, order or decree shall become final and nonappealable;

(f) by either  the  Company  or  Parent,  if the  Company  Stockholder  Approval
referred to in Section 5.3 shall not have been obtained by reason of the failure
to obtain the requisite vote upon a vote at a duly held meeting of  stockholders
or at any adjournment or postponement thereof; or

(g) by Parent,  if a Company  Triggering  Event shall have occurred.  A "Company
Triggering  Event"  shall  be  deemed  to have  occurred  if:  (i) the  Board of
Directors  of the  Company  (or any  committee  thereof)  shall  have  failed to
recommend that the Company's stockholders vote to adopt this Agreement, or shall
have  withdrawn  or  modified in a manner  adverse to Parent the  Company  Board
Recommendation;  (ii) the  Company  shall  have  failed to  include in the Proxy
Statement the Company Board Recommendation or a statement to the effect that the
Board of Directors of the Company has determined and believes that the Merger is
in the  best  interests  of the  Company's  stockholders;  (iii)  the  Board  of
Directors of the Company (or any committee  thereof) fails to publicly  reaffirm
the Company Board  Recommendation,  or fails to reaffirm its determination  that
the Merger is in the best  interests of the Company's  stockholders,  within ten
business   days  after   Parent   reasonably   requests  in  writing  that  such
recommendation  or determination  be reaffirmed;  (iv) the Board of Directors of
the  Company  (or any  committee  thereof)  shall  have  approved,  endorsed  or
recommended  any Acquisition  Proposal;  (v) the Company shall have entered into
any  letter  of intent or  similar  document  or any  Contract  relating  to any
Acquisition  Proposal;  (vi) the  Company  shall have failed to hold the Company
Special Meeting as promptly as practicable and in any event within 75 days after
the Form S-4 Registration  Statement is declared  effective under the Securities
Act;  (vii) a tender or exchange  offer  relating to  securities  of the Company
shall have been  commenced  and the Company  shall not have sent to its security
holders,  within ten  business  days after the  commencement  of such  tender or
exchange offer, a statement  disclosing that the Company recommends rejection of
such  tender or  exchange  offer;  (viii) an  Acquisition  Proposal  is publicly
announced,  and the Company  fails to issue a press  release that  reaffirms the
Company Board  Recommendation  within ten business  days after such  Acquisition
Proposal  is  announced  or (ix) the Company or any of its  Subsidiaries  or any
Company Representative shall have violated the restrictions set forth in Section
5.10, other than in an immaterial respect.

<PAGE>

Section  7.2      Effect  of  Termination.  In the event of  termination  of the
Agreement  and the  abandonment  of the Merger  pursuant to this  Article 7, all
obligations  of the parties shall  terminate,  this  Agreement  shall  forthwith
become void and have no effect,  without any liability or obligation on the part
of any party  hereto,  except the  obligations  of the parties  pursuant to this
Section 7.2 and except for the  provisions  of  Sections  5.16,  5.17,  the last
sentence  of Section 5.5 and Article 8, other than  Section  8.11 and 8.12,  and
except to the extent that such termination results from the willful and material
breach  by a  party  of any of its  representations,  warranties,  covenants  or
agreements set forth in this Agreement.

                                   ARTICLE 8
                               GENERAL PROVISIONS

Section  8.1      Notices.  All  notices,  requests,  claims,  demands and other
communications  under this  Agreement  shall be in  writing  and shall be deemed
given if delivered  personally  or sent by facsimile  transmission  or overnight
courier (providing proof of delivery) to the parties at the following  addresses
(or at such address for a party as shall be specified by like notice):

(a)      if to the Company, to:

                           SFX Entertainment, Inc.
                           650 Madison Avenue
                           New York, New York 10022
                           Attention:   Howard J. Tytel
                           Facsimile No.: (212) 753-3188

                  with a copy to:

                           Winston & Strawn
                           200 Park Avenue
                           New Park, New York 10166

                           Attention:   Jonathan Goldstein
                                        Daniel A. Ninivaggi

                           Facsimile No.: (212) 294-4700
(b)      if to Parent or Merger Sub, to:

                           Clear Channel Communications, Inc.
                           200 Concord Plaza
                           Suite 600
                           San Antonio, Texas 78216
                           Attention: Mark P. Mays
                           Facsimile No.: (210) 822-2299

                           with a copy to:

                           Akin, Gump, Strauss, Hauer & Feld, L.L.P.
                           300 Convent Street, Suite 1500
                           San Antonio, Texas 78205
                           Attention: Stephen C. Mount
                                         John Strickland
                           Facsimile No.: (210) 224-2035


<PAGE>

Section  8.2      Definitions.  For purposes of this Agreement:

(a)  "Acquisition  Proposal"  means any offer or proposal for (whether or not in
writing and whether or not delivered to the Company's  stockholders  generally),
from any Person  relating to any (i) direct or indirect  acquisition or purchase
of a business that  constitutes  15% or more of the net revenues,  net income or
the assets of the Company and its Subsidiaries  taken as a whole, (ii) direct or
indirect  acquisition  or  purchase  of  15% or  more  of any  class  of  equity
securities of the Company or any of its Subsidiaries whose business  constitutes
15% or more of the net  revenues,  net income or assets of the  Company  and its
Subsidiaries,  taken as a whole,  (iii) tender  offer or exchange  offer that if
consummated would result in any Person beneficially owning 15% more of any class
of equity  securities of the Company or any of its  Subsidiaries  whose business
constitutes 15% or more of the net revenues, net income or assets of the Company
and its Subsidiaries, taken as a whole, or (iv) merger, consolidation,  business
combination,  recapitalization,  liquidation, dissolution or similar transaction
involving the Company or any of its Subsidiaries whose business  constitutes 15%
or more of the net  revenues,  net  income  or  assets  of the  Company  and its
Subsidiaries, taken as a whole, other than the transactions contemplated by this
Agreement.

(b)  "Affiliate" of any person means another person that directly or indirectly,
through  one or more  intermediaries  controls,  is  controlled  by, or is under
common control with,  such first person.

(c) "Antitrust  Laws" mean and include the Sherman Act, as amended,  the Clayton
Act, as amended,  the HSR Act, the Federal Trade Commission Act, as amended, and
all other  federal,  state or  foreign  statutes,  rules,  regulations,  orders,
decrees,  administrative and judicial doctrines and other laws that are designed
or intended to  prohibit,  restrict  or regulate  actions  having the purpose or
effect of monopolization or restraint of trade.

(d) "Control"  (including  the terms  "controlled  by" and "under common control
with") 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.

(e) "Executive  Officer"  means,  with respect to the Company,  those  executive
officers of the Company listed on Exhibit  8.2(e)(i) hereto and, with respect to
Parent, those executive officers of Parent listed on Exhibit 8.2(e)(ii) hereto.

(f)  "Governmental  Entity" means any government or any agency,  bureau,  board,
commission,  court,  department,  official,  political subdivision,  tribunal or
other  instrumentality  of any  government,  whether  federal,  state or  local,
domestic or foreign.

<PAGE>

(g)  "Knowledge",  "Know"  or  "Known"  means,  with  respect  to the  matter in
question, if any of the Executive Officers of the Company or Parent, as the case
may be, has actual knowledge of such matter.

(h) "Law" shall mean any foreign or domestic,  whether federal,  state,  county,
municipal or local, law, statute,  code,  ordinance,  rule,  regulation,  order,
judgment, writ, stipulation,  award, injunction,  decree or arbitration award or
finding.

(i) "Lien" means any encumbrance,  hypothecation,  infringement, lien, mortgage,
pledge,  restriction,  security  interest,  title  retention  or other  security
arrangement,  or any adverse  right or  interest,  charge or claim of any nature
whatsoever of, on, or with respect to any asset,  property or property interest;
provided,  however,  that the term "Lien"  shall not include (i) liens for water
and sewer charges and current  taxes not yet due and payable or being  contested
in good faith, (ii) mechanics', carriers', workers', repairers',  materialmen's,
warehousemen's  and other  similar  liens  arising or incurred  in the  ordinary
course of  business  (iii) all liens  approved  in  writing  by the other  party
hereto,  (iv)  statutory  rights of set-off  and (v)  restrictions  on  transfer
imposed by federal or state securities laws.

(j)  "Material  Adverse  Effect"  means,  any  adverse  change in the  business,
financial  condition or results of operations  of the Company or Parent,  as the
case may be, or its respective  Subsidiaries  that is material to the Company or
Parent,  as the case may be, and its  respective  Subsidiaries  taken as a whole
except for (i) any change resulting form general  economic,  financial or market
conditions  or (ii)  any  change  resulting  from  conditions  or  circumstances
generally  affecting the industries in which the Company or Parent,  as the case
may be, or its respective Subsidiaries participate.

(k)  "Parent  Common  Stock  Market  Value"  shall mean the average of the daily
closing  price per share of Parent  Common Stock on the New York Stock  Exchange
for each of the ten consecutive  trading days for which such shares are actually
traded (as reported on the New York Stock Exchange Composite Transaction Tape as
reported in the Wall Street  Journal,  Eastern  Edition)  ending on the close of
trading on the tenth New York Stock Exchange  trading day immediately  preceding
the date on which the Company Special  Meeting is first  convened.

(l) "Person" means any natural person, firm, individual,  business trust, trust,
association, corporation, partnership, limited liability company, joint venture,
company, unincorporated entity or Governmental Entity.

(m) "Permitted Liens" shall mean: (i) Liens imposed by Law securing payments not
yet  delinquent  or the  validity of which are being  contested in good faith by
appropriate  actions,  (ii)  Liens  arising  out of pledges  or  deposits  under
workmen's compensation laws, unemployment insurance,  old age pensions, or other
social  security  benefits  other than any Lien  imposed by ERISA;  (iii)  Liens
incurred or deposits  made in the ordinary  course of business to secure  surety
bonds  provided  that such Liens shall extend only to cash  collateral  for such
surety bonds;  (iv) purchase  money Liens  arising in the ordinary  course,  (v)
Liens for Taxes and special  assessments (e.g., for municipal  improvements) not
yet due and payable and/or delinquent,  (vi) Liens reflected or reserved against
in the latest unaudited balance sheet of the Company included in the Company SEC
Reports (which have not been discharged),  (vii) Liens which in the aggregate do
not  materially  detract  from the value or  materially  impair the  present and
continued  use of the  properties  or assets  subject  thereto  in the usual and
normal conduct of the respective businesses of the Company and its Subsidiaries,
(viii) Liens on leases, subleases, sub-subleases, easements, licenses, rights of
use,  rights to access and rights of way  arising  from the  provisions  of such
agreements or benefiting  or created by any superior  estate,  right or interest
which is prior in right or prior in lien to that of the subject lease, sublease,
sub-sublease,  easement, license, right of use, right to access or right of way,
(ix) any Liens set forth in the title policies, endorsements, title commitments,
title certificates and title reports relating to the Company's interests in real
property identified in the Company Disclosure Letter, (x) any leases, subleases,
occupancy  agreements  or licenses set forth in the Company  Disclosure  Letter,
(xi) the Lien of any and all security agreements, documents, mortgages and deeds
of trust held by, or for the benefit of any lenders  under any of the  Company's
credit agreements,  and their respective successors and assigns, (xii) any state
of facts that an accurate survey or personal  inspection of the Company's or any
of its  Subsidiaries'  real property  (whether owned,  leased or licensed) would
show,  provided same does not  materially  adversely  affect the use thereof for
their present purposes,  (xiii) encroachments of stoops,  areas, cellar steps or
doors,  trim,  copings,  retaining  walls,  bay  windows,  balconies,   sidewalk
elevators,  fences, fire escapes,  cornices,  foundations,  footings and similar
projections,  if any,  on,  over or  under  any of the  Company's  or any of its
Subsidiaries'  real property (whether owned,  leased or licensed) or the streets
or sidewalks abutting any of such real property,  and the rights of governmental
authorities  to require  the  removal  of any such  projections  and  variations
between record lines of such real property and retaining  walls and the like, if
any,  (xiv) any  easements  or rights of use,  if any,  created  in favor of any
public utility or municipal  department or agency for electricity,  steam,  gas,
telephone,  cable  television,  water,  sewer or other services in any street or
avenue abutting the Company's or any of its Subsidiaries' real property (whether
owned,  leased or licensed),  and the right,  if any, to use and maintain wires,
cables, terminal boxes, lines, service connections,  poles, mains and facilities
servicing  any of such real  property or in, on, over or across any of such real
property,  (xv) covenants,  easements,  restrictions,  agreements,  consents and
other  instruments,  now of record,  provided same do not  materially  adversely
interfere  with  the  use of the  Company's  or  any of its  Subsidiaries'  real
property (whether owned,  leased or licensed) for their present purposes,  (xvi)
variations, if any, between tax lot lines and property lines, (xvii) deviations,
if any, of fences or shrubs from property lines,  (xviii) any other  declaration
or instrument  affecting any of the Company's or any of its  Subsidiaries'  real
property (whether owned,  leased or licensed) necessary or appropriate to comply
with any  Law,  ordinance,  regulation,  zoning  resolution  or  requirement  of
applicable governmental authorities or any other public authority, applicable to
the maintenance, demolition, construction,  alteration, repair or restoration of
the  improvements  at the  Company's or any of its  Subsidiaries'  real property
(whether owned, leased or licensed),  which does not materially adversely affect
the use of thereof  for their  present  purposes,  (xix) the  provisions  of the
applicable zoning resolution and other  regulations,  resolutions and ordinances
and any  amendments  thereto  now or  hereafter  adopted,  provided  same do not
materially  adversely  interfere  with  the use of the  Company's  or any of its
Subsidiaries' real property for their present purposes,  (xx) Liens described in
the  Company  SEC  Reports,  and (xxi) any other  Liens set forth in the Company
Disclosure Letter.

(n) "Subsidiary" or "Subsidiaries" of any Person means another Person, an amount
of the voting securities, other voting ownership or voting partnership interests
of which is sufficient to elect at least a majority of its board of directors or
other governing body (or, if there are no such voting interests,  50% or more of
the equity  interests of which) is owned  directly or  indirectly  by such first
Person.

<PAGE>

(o) "Tax" or "Taxes" means any and all federal,  state, local,  foreign or other
taxes of any kind (together with any and all interest,  penalties,  additions to
tax and additional  amounts imposed with respect  thereto) imposed by any taxing
authority,  including,  without  limitation,  taxes or other  charges on or with
respect  to  income,  franchise,  windfall  or other  profits,  gross  receipts,
property,  sales, use,  transfer,  capital stock,  payroll,  employment,  social
security,  workers' compensation,  unemployment compensation,  or net worth, and
taxes or other charges in the nature of excise, withholding, ad valorem or value
added.

(p) "Tax Return" means any return,  report or similar  statement  (including the
attached  schedules)  required to be filed with  respect to any Tax,  including,
without limitation,  any information return, claim for refund, amended return or
declaration of estimated Tax.

Section  8.3  Counterparts.  This  Agreement  may be  executed  in  one or  more
counterparts,  all of which shall be considered  one and the same  agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other  parties,  it being  understood  that all
parties need not sign the same counterpart.

Section 8.4 Entire  Agreement;  No  Third-Party  Beneficiaries.  This  Agreement
constitutes  the entire  agreement,  and  supersedes  all prior  agreements  and
understandings,  both  written and oral,  among the parties  with respect to the
subject matter of this Agreement (provided,  however, that the provisions of the
Confidentiality  Agreement shall remain valid and in effect) and, except for the
provisions  of Article 2 and  Sections  5.7 and 5.11,  is not intended to confer
upon any Person other than the parties any rights or remedies hereunder.

Section 8.5 Assignment.  Neither this Agreement nor any of the rights, interests
or obligations  under this Agreement shall be assigned,  in whole or in part, by
operation  of law or otherwise  by any of the parties  hereto  without the prior
written consent of the other parties,  except that Merger Sub may assign, in its
sole discretion,  any or all of its rights, interests and obligations under this
Agreement  to Parent or to any direct or indirect  wholly  owned  subsidiary  of
Parent,  but  no  such  assignment  shall  relieve  Merger  Sub  of  any  of its
obligations  under this  Agreement.  Subject  to the  preceding  sentence,  this
Agreement will be binding upon,  inure to the benefit of, and be enforceable by,
the parties hereto and their  respective legal  representatives,  successors and
assigns.

Section 8.6 Governing Law. This Agreement shall be governed by, and construed in
accordance  with,  the laws of the  State of  Delaware,  without  regard  to any
applicable  conflicts of law.

Section 8.7 Enforcement.  The parties agree that irreparable  damage would occur
in the event that any of the  provisions of this Agreement were not performed in
accordance  with  their  specific  terms  or  were  otherwise  breached.  It  is
accordingly  agreed that the  parties  shall be  entitled  to an  injunction  or
injunctions to prevent  breaches of this  Agreement and to enforce  specifically
the terms and  provisions  of this  Agreement in any court of the United  States
located in the State of Delaware or in any Delaware  state court,  this being in
addition to any other remedy to which they are entitled at law or in equity.  In
addition,  each of the  parties  hereto  (a)  consents  to submit  itself to the
personal  jurisdiction  of any  federal  court  located in the State of Delaware
state court in the event any dispute  arises out of this Agreement or any of the
transactions contemplated by this Agreement, (b) agrees that it will not attempt
to deny or defeat  such  personal  jurisdiction  by motion or other  request for
leave  from any such  court and (c)  agrees  that it will not  bring any  action
relating  to this  Agreement  or any of the  transactions  contemplated  by this
Agreement in any court other than a federal or state court  sitting in the State
of Delaware.

<PAGE>

Section 8.8  Severability.  Any term or  provision  of this  Agreement  which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,  be
ineffective  to the  extent  of  such  invalidity  or  unenforceability  without
rendering  invalid or  unenforceable  the remaining terms and provisions of this
Agreement in any other  jurisdiction.  If any provision of this  Agreement is so
broad as to be unenforceable,  such provision shall be interpreted to be only so
broad as is enforceable.

Section  8.9  Interpretation.  Headings  of the  Articles  and  Sections of this
Agreement  are for  convenience  of the  parties  only,  and  shall  be given no
substantive or interpretive  effect whatsoever.  The disclosure of any matter in
any section of the Company  Disclosure  Letter or Parent Disclosure Letter shall
not be deemed to constitute an admission by any party or to otherwise imply that
any such matter is material or may have a Material  Adverse  Effect for purposes
of this Agreement.

Section  8.10  Finders  or  Brokers.  Except  for Bear  Stearns & Co. and Lehman
Brothers with respect to the Company, and Salomon Smith Barney Inc. with respect
to Parent,  a copy of whose  engagement  agreements  have been  provided  by the
Company and Parent to the other, neither the Company nor Parent nor any of their
respective  Subsidiaries has employed any investment banker,  broker,  finder or
intermediary in connection with the transactions  contemplated  hereby who might
be entitled to any fee or any commission in connection with or upon consummation
of the Merger.

Section 8.11 Survival of Representations and Warranties. The representations and
warranties  of the parties  contained  in this  Agreement  shall not survive the
Effective Time.

Section 8.12 Survival of Covenants and Agreements.  The covenants and agreements
of the  parties to be  performed  after the  Effective  Time  contained  in this
Agreement shall survive the Effective Time.

Section  8.13  Attorneys'  Fees.  If any action in law or equity,  including  an
action for declaratory  relief, is brought to enforce or interpret any provision
of this Agreement,  the prevailing party shall be entitled to recover reasonable
attorneys' fees and expenses from the other party, which fees and expenses shall
be in addition to any other relief which may be awarded.

Section 8.14 Amendment. This Agreement may be amended by the parties at any time
before or after approval  hereof by the  stockholders of the Company and Parent;
provided,  however, that after such stockholder approval there shall not be made
any amendment that by law requires  further  approval by the stockholders of the
Company or Parent  without  the  further  approval  of such  stockholders.  This
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties.

<PAGE>

Section 8.15  Extension;  Waiver.  At any time prior to the Effective  Time, the
parties may (a) extend the time for the performance of any of the obligations or
other  acts  of  the  other  parties,   (b)  waive  any   inaccuracies   in  the
representations  and  warranties  contained in this Agreement or in any document
delivered  pursuant to this  Agreement  or (c) subject to the proviso of Section
8.14,  waive  compliance  with any of the agreements or conditions  contained in
this  Agreement.  Any agreement on the part of a party to any such  extension or
waiver shall be valid only if set forth in an instrument  in writing,  signed on
behalf of such party.  The failure of any party to this  Agreement to assert any
of its rights under this Agreement or otherwise shall not constitute a waiver of
those rights.

Section 8.16  Procedure  for  Termination,  Amendment,  Extension  or Waiver.  A
termination  of this  Agreement  or  other  action  attributed  to the  Board of
Directors  pursuant to Section 7.1, an amendment of this  Agreement  pursuant to
Section 8.14 or an extension or waiver  pursuant to Section 8.15 shall, in order
to be  effective,  require  in the case of Parent,  Merger  Sub or the  Company,
action  by its  Board of  Directors  (or a  committee  thereof),  acting  by the
affirmative  vote of a majority of the members of the entire  Board of Directors
or such committee.

                                             [SIGNATURE PAGE FOLLOWS]



<PAGE>




                   AGREEMENT AND PLAN OF MERGER SIGNATURE PAGE

                  IN WITNESS  WHEREOF,  Parent,  Merger Sub and the Company have
caused this Agreement to be signed by their respective  officers  thereunto duly
authorized, all as of the date first written above.

                                          CLEAR CHANNEL COMMUNICATIONS, INC.



                                          By:   /s/ RANDALL MAYS
                                          Name:     Randall Mays
                                          Title:    Executive Vice President CFO

                                          CCU II MERGER SUB, INC.



                                          By:      /s/ RANDALL MAYS
                                                   ----------------------
                                          Name:     Randall Mays
                                          Title:    Executive Vice President CFO

                                          SFX ENTERTAINMENT, INC.



                                          By:   /s/ ROBERT F. X. SILLERMAN
                                                --------------------------
                                                 Robert. F.X. Sillerman
                                                  Executive Chairman

Source: OneCLE Business Contracts.