S-4

     AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 15, 2002

                                                     REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                             ---------------------

                                    FORM S-4
            REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
                             ---------------------

                       PAXSON COMMUNICATIONS CORPORATION
             (Exact name of Registrant as specified in its charter)
                             ---------------------

                                                          
           DELAWARE                          4832                         59-3212788
(State or other jurisdiction of  (Primary Standard Industrial          (I.R.S. Employer
incorporation or organization)    Classification Code Number)       Identification Number)



                            601 CLEARWATER PARK ROAD
                         WEST PALM BEACH, FLORIDA 33401
                                 (561) 659-4122
  (Address, including zip code, and telephone number, including area code, of
                   Registrant's principal executive offices)
                              ANTHONY L. MORRISON
          EXECUTIVE VICE PRESIDENT, CHIEF LEGAL OFFICER AND SECRETARY
                       PAXSON COMMUNICATIONS CORPORATION
                            601 CLEARWATER PARK ROAD
                         WEST PALM BEACH, FLORIDA 33401
                                 (561) 659-4122
 (Name, address, including zip code, and telephone number, including area code,
                             of agent for service)
                            SEE TABLE OF ADDITIONAL
                               REGISTRANTS BELOW
                                   COPIES TO:
                                 DAVID L. PERRY
                              HOLLAND & KNIGHT LLP
                       625 NORTH FLAGLER DRIVE, SUITE 700
                         WEST PALM BEACH, FLORIDA 33401
                                 (561) 833-2000

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

    If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box.  [ ]

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

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

                        CALCULATION OF REGISTRATION FEE



- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
                                                                                  PROPOSED MAXIMUM
                                                                                     AGGREGATE
                                                                               OFFERING PRICE, BASED
                                      GROSS PROCEEDS TO                             ON THE GROSS
                                     THE REGISTRANT FROM                          PROCEEDS TO THE
                                       THE SALE OF THE                          REGISTRANT FROM THE
                                          SECURITIES        PROPOSED MAXIMUM   SALE OF THE SECURITIES      AMOUNT OF
       TITLE OF EACH CLASS OF               TO BE            OFFERING PRICE            TO BE             REGISTRATION
    SECURITIES TO BE REGISTERED           REGISTERED          PER UNIT(1)          REGISTERED(1)              FEE
- -------------------------------------------------------------------------------------------------------------------------
                                                                                          
12 1/4% Senior Subordinated Discount
  Notes due 2009....................     $308,338,127             100%              $308,338,127            $28,367
- -------------------------------------------------------------------------------------------------------------------------
Guarantee of 12 1/4% Senior
  Subordinated Discount Notes due
  2009..............................         N/A                  N/A                   N/A                  $0(2)
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------


(1) Estimated solely for the purpose of calculating the registration fee under
    Rule 457(f)(2) under the Securities Act.

(2) The Additional Registrants, each a subsidiary of Paxson Communications
    Corporation, will guarantee the payment of the 12 1/4% Senior Subordinated
    Discount Notes due 2009. Under Rule 457(n) under the Securities Act of 1933,
    no filing fee is required.
                             ---------------------

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

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


                             ADDITIONAL REGISTRANTS



                                                                 STATE OR          PRIMARY
                                                                   OTHER           STANDARD
                                                              JURISDICTION OF     INDUSTRIAL         I.R.S.
                                                              INCORPORATION/    CLASSIFICATION   IDENTIFICATION
NAME                                                             FORMATION          NUMBER           NUMBER
- ----                                                          ---------------   --------------   --------------
                                                                                        
AMERICA 51, L.P. ...........................................  Delaware               4833          86-0889042
BUD HITS, INC. .............................................  Florida                7819          65-0912159
BUD SONGS, INC. ............................................  Florida                7819          65-0897301
CAP COMMUNICATIONS LICENSE OF NEW LONDON, INC. .............  Florida                4833          65-0882807
CAP COMMUNICATIONS OF NEW LONDON, INC. .....................  Florida                4833          65-0882805
CAP COMMUNICATIONS, INC. ...................................  Florida                4833          65-0882809
CHANNEL 66 OF TAMPA, INC. ..................................  Florida                4833          59-3227857
CLEARLAKE PRODUCTIONS, INC. ................................  Florida                7812          65-0863302
COCOLA MEDIA CORPORATION OF FLORIDA.........................  Delaware               4833          77-0406411
COCOLA MEDIA CORPORATION OF SAN FRANCISCO, INC. ............  California             4833          77-0448296
DP MEDIA, INC. .............................................  Florida                4833          59-3227378
DP MEDIA LICENSE OF BATTLE CREEK, INC. .....................  Florida                4833          65-0769770
DP MEDIA LICENSE OF BOSTON, INC. ...........................  Florida                4833          65-0822057
DP MEDIA LICENSE OF MARTINSBURG, INC. ......................  Florida                4833          65-0769782
DP MEDIA LICENSE OF MILWAUKEE, INC. ........................  Florida                4833          65-0817050
DP MEDIA LICENSE OF RALEIGH DURHAM, INC. ...................  Florida                4833          65-0769780
DP MEDIA OF BATTLE CREEK, INC. .............................  Florida                4833          65-0773604
DP MEDIA OF BOSTON, INC. ...................................  Florida                4833          65-0829541
DP MEDIA OF MARTINSBURG, INC. ..............................  Florida                4833          65-0719860
DP MEDIA OF MILWAUKEE, INC. ................................  Florida                4833          65-0816378
DP MEDIA OF RALEIGH DURHAM, INC. ...........................  Florida                4833          65-0733737
DP MEDIA OF ST. LOUIS, INC. ................................  Florida                4833          65-0769772
FLAGLER PRODUCTIONS, INC. ..................................  Florida                7812          65-1118465
HISPANIC BROADCASTING, INC. ................................  Florida                4833          59-2537913
IRON MOUNTAIN PRODUCTIONS, INC. ............................  Florida                4833          65-1001631
OCEAN STATE TELEVISION, LLC.................................  Delaware               4833            06-14832
PAX HITS PUBLISHING, INC. ..................................  Florida                7819          65-0897299
PAX INTERNET, INC. .........................................  Florida                7373          59-2907133
PAX NET TELEVISION PRODUCTIONS, INC. .......................  Florida                7812          65-0830580
PAX NET, INC. ..............................................  Delaware               7812          65-0789886
PAXSON AKRON LICENSE, INC. .................................  Florida                4833          65-0611729
PAXSON ALBANY LICENSE, INC. ................................  Florida                4833          65-0736665
PAXSON ALBUQUERQUE LICENSE, INC. ...........................  Florida                4833          65-0813266
PAXSON ATLANTA LICENSE, INC. ...............................  Florida                4833          59-3291854
PAXSON BIRMINGHAM LICENSE, INC. ............................  Florida                4833          65-0688716
PAXSON BOSTON LICENSE, INC. ................................  Florida                4833          59-3283741
PAXSON BOSTON-68 LICENSE, INC. .............................  Florida                4833          65-0964667
PAXSON BUFFALO LICENSE, INC. ...............................  Florida                4833          65-0744425
PAXSON CEDAR RAPIDS LICENSE, INC. ..........................  Florida                4833          65-0744422
PAXSON CHARLESTON LICENSE, INC. ............................  Florida                4833          65-0780849
PAXSON CHICAGO LICENSE, INC. ...............................  Florida                4833          59-3498673
PAXSON COMMUNICATIONS LICENSE COMPANY, LLC..................  Delaware               4833          65-0858700





                                                                 STATE OR          PRIMARY
                                                                   OTHER           STANDARD
                                                              JURISDICTION OF     INDUSTRIAL         I.R.S.
                                                              INCORPORATION/    CLASSIFICATION   IDENTIFICATION
NAME                                                             FORMATION          NUMBER           NUMBER
- ----                                                          ---------------   --------------   --------------
                                                                                        
PAXSON COMMUNICATIONS LPTV, INC. ...........................  Florida                4833          65-0641981
PAXSON COMMUNICATIONS MANAGEMENT COMPANY, INC. .............  Florida                7842          59-3212233
PAXSON COMMUNICATIONS OF AKRON-23, INC. ....................  Florida                4833          65-0611718
PAXSON COMMUNICATIONS OF ALBANY-55, INC. ...................  Florida                4833          65-0628627
PAXSON COMMUNICATIONS OF ALBUQUERQUE-14, INC. ..............  Florida                4833          65-0766945
PAXSON COMMUNICATIONS OF ATLANTA-14, INC. ..................  Florida                4833          59-3235962
PAXSON COMMUNICATIONS OF BIRMINGHAM-44, INC. ...............  Florida                4833          65-0688713
PAXSON COMMUNICATIONS OF BOSTON-46, INC. ...................  Florida                4833          65-0686132
PAXSON COMMUNICATIONS OF BOSTON-60, INC. ...................  Florida                4833          59-3283737
PAXSON COMMUNICATIONS OF BOSTON-68, INC. ...................  Florida                4833          65-0918840
PAXSON COMMUNICATIONS OF BUFFALO-51, INC. ..................  Florida                4833          65-0744433
PAXSON COMMUNICATIONS OF CEDAR RAPIDS-48, INC. .............  Florida                4833          65-0744431
PAXSON COMMUNICATIONS OF CHARLESTON-29, INC. ...............  Florida                4833          65-0780847
PAXSON COMMUNICATIONS OF CHICAGO-38, INC. ..................  Florida                4833          65-0806274
PAXSON COMMUNICATIONS OF DALLAS-68, INC. ...................  Florida                4833          59-3283742
PAXSON COMMUNICATIONS OF DAVENPORT-67, INC. ................  Florida                4833          65-0813879
PAXSON COMMUNICATIONS OF DENVER-59, INC. ...................  Florida                4833          65-0603895
PAXSON COMMUNICATIONS OF DES MOINES-39, INC. ...............  Florida                4833          65-0813632
PAXSON COMMUNICATIONS OF DETROIT-31, INC. ..................  Florida                4833          65-0735187
PAXSON COMMUNICATIONS OF FAYETTEVILLE-62, INC. .............  Florida                4833          65-0771647
PAXSON COMMUNICATIONS OF FRESNO-61, INC. ...................  Florida                4833          65-0742713
PAXSON COMMUNICATIONS OF GREENSBORO-16, INC. ...............  Florida                4833          65-0653894
PAXSON COMMUNICATIONS OF GREENVILLE-38, INC. ...............  Florida                4833          65-0813242
PAXSON COMMUNICATIONS OF HONOLULU-66, INC. .................  Florida                4833          65-0754528
PAXSON COMMUNICATIONS OF HOUSTON-49, INC. ..................  Florida                4833          76-0461679
PAXSON COMMUNICATIONS OF JACKSONVILLE-21, INC. .............  Florida                4833          65-1004849
PAXSON COMMUNICATIONS OF JACKSONVILLE-35, INC. .............  Florida                4833          65-0922580
PAXSON COMMUNICATIONS OF KANSAS CITY-50, INC. ..............  Florida                4833          65-0712686
PAXSON COMMUNICATIONS OF KNOXVILLE-54, INC. ................  Florida                4833          65-0804455
PAXSON COMMUNICATIONS OF LEXINGTON-67, INC. ................  Florida                4833          65-0826029
PAXSON COMMUNICATIONS OF LOS ANGELES-30, INC. ..............  Florida                4833          59-3295991
PAXSON COMMUNICATIONS OF LOUISVILLE-21, INC. ...............  Florida                4833          65-0917351
PAXSON COMMUNICATIONS OF MEMPHIS-50, INC. ..................  Florida                4833          65-0804519
PAXSON COMMUNICATIONS OF MIAMI-35, INC. ....................  Florida                4833          65-0471066
PAXSON COMMUNICATIONS OF MINNEAPOLIS-41, INC. ..............  Florida                4833          59-3295983
PAXSON COMMUNICATIONS OF MOBILE-61, INC. ...................  Florida                4833          65-0815802
PAXSON COMMUNICATIONS OF NASHVILLE-28, INC. ................  Florida                4833          65-0744429
PAXSON COMMUNICATIONS OF NEW ORLEANS-49, INC. ..............  Florida                4833          65-0804451
PAXSON COMMUNICATIONS OF NEW YORK-31, INC. .................  Florida                4833          65-0752309
PAXSON COMMUNICATIONS OF NORFOLK-49, INC. ..................  Florida                4833          65-0814356
PAXSON COMMUNICATIONS OF OKLAHOMA CITY-62, INC. ............  Florida                4833          65-0682182
PAXSON COMMUNICATIONS OF ORLANDO-56, INC. ..................  Florida                4833          59-3297996
PAXSON COMMUNICATIONS OF PHILADELPHIA-61, INC. .............  Florida                4833          59-3283731
PAXSON COMMUNICATIONS OF PHOENIX-13, INC. ..................  Florida                4833          65-0635181
PAXSON COMMUNICATIONS OF PHOENIX-51, INC. ..................  Florida                4833          65-0686052
PAXSON COMMUNICATIONS OF PITTSBURGH-40, INC. ...............  Florida                4833          65-0731832
PAXSON COMMUNICATIONS OF PORTLAND-22, INC. .................  Florida                4833          65-0826031





                                                                 STATE OR          PRIMARY
                                                                   OTHER           STANDARD
                                                              JURISDICTION OF     INDUSTRIAL         I.R.S.
                                                              INCORPORATION/    CLASSIFICATION   IDENTIFICATION
NAME                                                             FORMATION          NUMBER           NUMBER
- ----                                                          ---------------   --------------   --------------
                                                                                        
PAXSON COMMUNICATIONS OF PORTLAND-23, INC. .................  Florida                4833          65-0806275
PAXSON COMMUNICATIONS OF PROVIDENCE-69, INC. ...............  Florida                4833          65-0643775
PAXSON COMMUNICATIONS OF ROANOKE-38, INC. ..................  Florida                4833          65-0741687
PAXSON COMMUNICATIONS OF SACRAMENTO-29, INC. ...............  Florida                4833          65-0685880
PAXSON COMMUNICATIONS OF SALT LAKE CITY-30, INC. ...........  Florida                4833          65-0717339
PAXSON COMMUNICATIONS OF SAN ANTONIO-26, INC. ..............  Florida                4833          65-0826035
PAXSON COMMUNICATIONS OF SAN JOSE-65, INC. .................  Florida                4833          59-3283735
PAXSON COMMUNICATIONS OF SAN JUAN, INC. ....................  Florida                4833         58-22195653
PAXSON COMMUNICATIONS OF SCRANTON-64, INC. .................  Florida                4833          65-0735747
PAXSON COMMUNICATIONS OF SEATTLE-33, INC. ..................  Florida                4833          65-0686130
PAXSON COMMUNICATIONS OF SHREVEPORT-21, INC. ...............  Florida                4833          65-0813244
PAXSON COMMUNICATIONS OF SPOKANE-34, INC. ..................  Florida                4833          65-0815799
PAXSON COMMUNICATIONS OF ST. CROIX-15, INC. ................  Florida                4833          65-0815807
PAXSON COMMUNICATIONS OF SYRACUSE-56, INC. .................  Florida                4833          65-0795912
PAXSON COMMUNICATIONS OF TAMPA-66, INC. ....................  Florida                4833          59-3227558
PAXSON COMMUNICATIONS OF TUCSON-46, INC. ...................  Florida                4833          65-0744426
PAXSON COMMUNICATIONS OF TULSA-44, INC. ....................  Florida                4833          65-0653898
PAXSON COMMUNICATIONS OF WASHINGTON-66, INC. ...............  Florida                4833          65-0735951
PAXSON COMMUNICATIONS OF WAUSAU-46, INC. ...................  Florida                4833            65-08317
PAXSON COMMUNICATIONS OF WEST PALM BEACH-67, INC. ..........  Florida                4833          65-0823013
PAXSON COMMUNICATIONS TELEVISION, INC. .....................  Florida                4833          59-3283729
PAXSON DALLAS LICENSE, INC. ................................  Florida                4833          59-3283743
PAXSON DAVENPORT LICENSE, INC. .............................  Florida                4833          65-0813875
PAXSON DENVER LICENSE, INC. ................................  Florida                4833          65-0645191
PAXSON DES MOINES LICENSE, INC. ............................  Florida                4833          65-0813637
PAXSON DETROIT LICENSE, INC. ...............................  Florida                4833          65-0735190
PAXSON DEVELOPMENT, INC. ...................................  Florida                7812          65-0860488
PAXSON FAYETTEVILLE LICENSE, INC. ..........................  Florida                4833          65-0771656
PAXSON FRESNO LICENSE, INC. ................................  Florida                4833          65-0742709
PAXSON GREENSBORO LICENSE, INC. ............................  Florida                4833          65-0653901
PAXSON GREENVILLE LICENSE, INC. ............................  Florida                4833          65-0813243
PAXSON HAWAII LICENSE, INC. ................................  Florida                4833          65-0754523
PAXSON HOUSTON LICENSE, INC. ...............................  Florida                4833          76-0461475
PAXSON JACKSONVILLE LICENSE, INC. ..........................  Florida                4833          65-0903781
PAXSON JAX LICENSE, INC. ...................................  Florida                4833          65-1004850
PAXSON KANSAS CITY LICENSE, INC. ...........................  Florida                4833          65-0712711
PAXSON KNOXVILLE LICENSE, INC. .............................  Florida                4833          65-0829210
PAXSON LEXINGTON LICENSE, INC. .............................  Florida                4833          65-0826033
PAXSON LOS ANGELES LICENSE, INC. ...........................  Florida                4833          59-3295992
PAXSON MERCHANDISING & LICENSING, INC. .....................  Florida                5999          65-0926836
PAXSON MIAMI-35 LICENSE, INC. ..............................  Florida                4833          65-0752329
PAXSON MINNEAPOLIS LICENSE, INC. ...........................  Florida                4833          59-3295988
PAXSON MOBILE LICENSE, INC. ................................  Florida                4833          65-0815806
PAXSON NEW YORK LICENSE, INC. ..............................  Florida                4833          65-0611721





                                                                 STATE OR          PRIMARY
                                                                   OTHER           STANDARD
                                                              JURISDICTION OF     INDUSTRIAL         I.R.S.
                                                              INCORPORATION/    CLASSIFICATION   IDENTIFICATION
NAME                                                             FORMATION          NUMBER           NUMBER
- ----                                                          ---------------   --------------   --------------
                                                                                        
PAXSON NORFOLK LICENSE, INC. ...............................  Florida                4833          65-1086982
PAXSON OKLAHOMA CITY LICENSE, INC. .........................  Florida                4833          65-0741346
PAXSON ORLANDO LICENSE, INC. ...............................  Florida                4833          65-0806278
PAXSON PHILADELPHIA LICENSE, INC. ..........................  Florida                4833          59-3283730
PAXSON PHOENIX LICENSE, INC. ...............................  Florida                4833          65-0625873
PAXSON PORTLAND LICENSE, INC. ..............................  Florida                4833          65-0812841
PAXSON PRODUCTIONS, INC. ...................................  Florida                7812          65-0860490
PAXSON ROANOKE LICENSE, INC. ...............................  Florida                4833          65-0741692
PAXSON SACRAMENTO LICENSE, INC. ............................  Florida                4833          65-0685878
PAXSON SALEM LICENSE, INC. .................................  Florida                4833          65-0826037
PAXSON SALT LAKE CITY LICENSE, INC. ........................  Florida                4833          65-0748582
PAXSON SAN ANTONIO LICENSE, INC. ...........................  Florida                4833          65-1086981
PAXSON SAN JOSE LICENSE, INC. ..............................  Florida                4833          59-3283733
PAXSON SCRANTON LICENSE, INC. ..............................  Florida                4833          65-0735746
PAXSON SEATTLE LICENSE, INC. ...............................  Florida                4833          65-0686136
PAXSON SHREVEPORT LICENSE, INC. ............................  Florida                4833          65-0813247
PAXSON SPOKANE LICENSE, INC. ...............................  Florida                4833          65-0815800
PAXSON SPORTS OF MIAMI, INC. ...............................  Florida                7941          59-3227303
PAXSON ST. CROIX LICENSE, INC. .............................  Florida                4833          65-0815808
PAXSON SYRACUSE LICENSE, INC. ..............................  Florida                4833          65-0795915
PAXSON TAMPA-66 LICENSE, INC. ..............................  Florida                4833          65-0752325
PAXSON TELEVISION PRODUCTIONS, INC. ........................  Florida                7812          65-0791898
PAXSON TELEVISION, INC. ....................................  Florida                7812          65-0902915
PAXSON TENNESSEE LICENSE, INC. .............................  Florida                4833          65-0744418
PAXSON TULSA LICENSE, INC. .................................  Florida                4833          65-0829209
PAXSON WASHINGTON LICENSE, INC. ............................  Florida                4833          59-3319719
PAXSON WAUSAU LICENSE, INC. ................................  Florida                4833          65-0834744
PCC DIRECT, INC. ...........................................  Florida                7313          65-0684251
RDP COMMUNICATIONS LICENSE OF INDIANAPOLIS, INC. ...........  Florida                4833          65-0866576
RDP COMMUNICATIONS OF INDIANAPOLIS, INC. ...................  Florida                4833          65-0866575
RDP COMMUNICATIONS, INC. ...................................  Florida                4833          65-0860333
TRAVEL CHANNEL ACQUISITION CORPORATION......................  Florida                4841          65-0766049



              SUBJECT TO COMPLETION, DATED MARCH           , 2002

PROSPECTUS

                                  $496,263,000

                       PAXSON COMMUNICATIONS CORPORATION

                               EXCHANGE OFFER FOR
              12 1/4% SENIOR SUBORDINATED DISCOUNT NOTES DUE 2009

         THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M. NEW YORK CITY TIME
                  ON                   , 2002 UNLESS EXTENDED

     We hereby offer, upon the terms and subject to the conditions set forth in
this prospectus and the accompanying Letter of Transmittal, to exchange up to
$496,263,000 aggregate principal amount at maturity of our 12 1/4% Senior
Subordinated Discount Notes due 2009 that have been registered under the
Securities Act of 1933, which we refer to as the new notes, for up to
$496,263,000 aggregate principal amount at maturity of our 12 1/4% Senior
Subordinated Discount Notes due 2009 that were sold under a private offering
consummated in January 2002, which notes we refer to as the original notes. The
new notes and the original notes are sometimes referred to herein collectively
as the notes.

     The terms of the new notes are substantially identical in all respects
(including interest rate and maturity) to the terms of the original notes,
except that the new notes will be freely transferable by holders thereof and
free of any covenant restricting transfer absent registration, except in certain
circumstances relating to broker-dealers described in this prospectus. For a
complete description of the terms of the new notes, see "Description of the
Notes". There will be no cash proceeds to us from the exchange offer.

     We will accept all original notes that noteholders properly tender and do
not withdraw before the expiration of the exchange offer. The exchange offer is
not subject to any condition other than that the exchange offer not violate
applicable law or any applicable interpretation of the staff of the SEC. You
will not recognize any income, gain or loss for U.S. federal income tax purposes
as a result of the exchange. The exchange offer is not conditioned on the tender
of any minimum principal amount at maturity of original notes.

     The new notes are expected to trade in the Private Offerings, Resales, and
Trading through Automatic Linkages Market, commonly referred to as the PORTAL
Market.

     SEE "RISK FACTORS" BEGINNING ON PAGE 14 FOR A DISCUSSION OF CERTAIN FACTORS
YOU SHOULD CONSIDER BEFORE MAKING ANY DECISION CONCERNING THIS EXCHANGE OFFER.

     NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED THE
SECURITIES TO BE DISTRIBUTED IN THE EXCHANGE OFFER, NOR HAVE ANY OF THESE
ORGANIZATIONS DETERMINED THAT THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.


     YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED, OR INCORPORATED BY
REFERENCE, IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
DIFFERENT INFORMATION. WE ARE NOT, AND THE INITIAL PURCHASERS ARE NOT, MAKING AN
OFFER OF THESE SECURITIES IN ANY STATE WHERE THE OFFERING IS NOT PERMITTED. YOU
SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN THIS PROSPECTUS IS ACCURATE
AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THIS PROSPECTUS.

                               TABLE OF CONTENTS



                                                               PAGE
                                                               ----
                                                            
Summary.....................................................     1
Risk Factors................................................    13
Ratios of Earnings to Fixed Charges.........................    25
Use of Proceeds.............................................    25
Capitalization..............................................    26
Selected Consolidated Financial and Other Data..............    27
Management's Discussion and Analysis of Financial Condition
  and Results of Operations.................................    29
Business....................................................    40
Management..................................................    59
Executive Compensation......................................    62
Principal Stockholders......................................    65
Certain Relationships and Related Transactions..............    67
Description of Material Indebtedness and Preferred Stock....    69
The Exchange Offer..........................................    78
Description of Notes........................................    85
Important Federal Income Tax Considerations.................   122
Plan of Distribution........................................   127
Legal Matters...............................................   127
Experts.....................................................   127
Where You Can Find Additional Information...................   127
Index of Financial Statements...............................   F-1


                           FORWARD-LOOKING STATEMENTS

     This prospectus includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. All statements other than statements of historical facts
included in this prospectus, including, without limitation, statements under the
captions "Summary," "Risk Factors," "Use of Proceeds," "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and "Business"
and other statements located elsewhere in this prospectus, in each case
regarding the prospects of our industry and our prospects, plans, financial
position and business strategy, may constitute forward-looking statements. In
addition, forward-looking statements generally can be identified by the use of
forward-looking terminology such as "may," "will," "expect," "intend,"
"estimate," "anticipate," "believe" or "continue" or the negatives of these
terms or variations of them or similar terminology. Although we believe that the
expectations reflected in these forward-looking statements are reasonable, we
cannot assure you that these expectations will prove to be correct. Important
factors that could cause actual results to differ materially from our
expectations are disclosed in this prospectus, including in conjunction with the
forward-looking statements included in this prospectus and under "Risk Factors."
All subsequent written and oral forward-looking statements attributable to us or
persons acting on our behalf are expressly qualified in their entirety by the
cautionary statements included in this document. These forward-looking
statements speak only as of the date of this prospectus. We do not intend to
update these statements unless the securities laws require us to do so.

                                        i


                                    SUMMARY

     This summary highlights selected information about us.  In addition to
reading this summary, you should carefully review the entire prospectus,
especially the "Risk Factors" section beginning on page 14. Unless the context
otherwise requires, in this prospectus, the terms "we," "us" and "our" refer to
Paxson Communications Corporation and its subsidiaries.

     We have obtained audience ratings and share, market rank and television
household data contained in this prospectus from the most recent information
available from Nielsen Media Research. We do not assume responsibility for the
accuracy or completeness of this data.

                                  OUR COMPANY

     We are a network television broadcasting company which owns and operates
the largest broadcast television station group in the United States, as measured
by the number of television households in the markets our stations serve. We
currently own and operate 65 full power broadcast television stations (including
three stations we operate under time brokerage agreements), 64 of which carry
PAX TV, including stations reaching all of the top 20 U.S. markets, and 41 of
the top 50 U.S. markets. We operate PAX TV, a network that provides family
oriented entertainment programming seven days per week between the hours of 1:00
p.m. and midnight, Monday through Friday, and 5:00 p.m. and midnight Saturday
and Sunday. PAX TV's programming consists of shows originally developed by us
and shows that have appeared previously on other broadcast networks which we
have purchased the right to air. PAX TV reaches approximately 85% of prime time
television households in the U.S. through our broadcast television station
group, and pursuant to distribution agreements with cable and satellite systems
and affiliates. PAX TV reaches approximately 64% of U.S. television households
through our broadcast television station group. We have agreements with cable
television system owners and satellite television providers to carry PAX TV,
through which we reach an additional 16% of U.S. television households in
markets not served by our owned and operated stations. We reach an additional 5%
of U.S. television households through affiliation agreements with 63
independently owned PAX TV affiliated stations.

     We derive our revenues from the sale of network spot advertising time,
network long form paid programming and station advertising:

     - Network spot advertising.  We sell commercial air time to advertisers who
       want to reach the entire nationwide PAX TV viewing audience with a single
       advertisement. Most of our network advertising is sold under advance, or
       "upfront," commitments to purchase advertising time which are obtained
       before the beginning of our PAX TV programming season. The National
       Broadcasting Company, Inc. ("NBC") serves as our exclusive sales
       representative to sell most of our network advertising. Any remaining
       inventory which is not sold by NBC is sold by us as direct response
       advertising. Our network advertising sales represented approximately 33%
       of our revenue during the year ended December 31, 2001.

     - Network long form paid programming.  We sell air time for long form paid
       programming, consisting primarily of infomercials, during broadcasting
       hours when we are not airing PAX TV. Infomercials are shows produced by
       others, at no cost to us, principally to promote and sell products or
       services through viewer direct response. Our network long form paid
       programming represented approximately 33% of our revenue during the year
       ended December 31, 2001.

     - Station advertising.  We sell commercial air time to advertisers who want
       to reach the viewing audience in specific geographic markets in which our
       stations operate. These advertisers may be local businesses or regional
       or national advertisers who want to target their advertising in these
       markets. NBC provides national advertising sales services for a majority
       of our stations. In markets in which our stations are operating under
       joint sales agreements, or JSAs, our JSA partner serves as our exclusive
       sales representative to sell our local station advertising. For stations
       for which NBC does not provide national account representation, our JSA
       partner performs this function. Our local sales forces sell this
       advertising in markets without JSAs. Our station advertising sales
       represented approximately 34% of our revenue during the year ended
       December 31, 2001 (including 16% of our revenue during such year which
       was derived from local and national long form paid programming).

                                        1


     We believe that our business model benefits from many of the favorable
attributes of both traditional television networks and network-affiliated
television station groups. Similar to traditional television networks, we
provide advertisers with nationwide reach through our extensive television
distribution system. We own and operate most of our distribution system and,
therefore, we receive advertising revenue from the entire broadcast day
(consisting of both PAX TV and long form paid programming), unlike traditional
networks, which receive advertising revenue only from commercials aired during
network programming hours. In addition, due to the size and centralized
operations of our station group, we are able to achieve economies of scale with
respect to our programming, promotional, research, engineering, accounting and
administrative expenses which we believe enable us to have lower per station
expenses than those of a typical network-affiliated station.

     We have made consistent progress in the development of our PAX TV network
since its launch on August 31, 1998. Before launching PAX TV, our stations aired
infomercials and other long form paid programming throughout the day. In the
fourth quarter of 2000, we generated $7.1 million of adjusted EBITDA (as defined
on pages 12-13), and we believe we achieved positive quarterly adjusted EBITDA
faster than any other recently launched television broadcast network. We
generated adjusted EBITDA of $18.1 million for the year ended December 31, 2001
and negative $4.9 million for the year ended December 31, 2000.

     Our principal programming on PAX TV consists of original programs and
syndicated programs.

     - Original programs.  We produce original family entertainment programs to
       air during our network's prime time hours. For the 2000-2001 season, our
       original shows, such as Doc, Mysterious Ways, Miracle Pets, It's a
       Miracle and Encounters with the Unexplained, achieved an average of 39%
       ratings improvements over programs shown in their time slots the prior
       year. We currently have nine hours of PAX TV original programs which we
       air during prime time hours. We intend to continue increasing the number
       of hours of original programming aired on PAX TV because this programming
       has generated improved ratings and we are able to produce it in a cost
       efficient manner.

     - Syndicated programs.  We have purchased the rights to air on PAX TV a
       variety of syndicated programs, which are programs that have previously
       appeared on other broadcast networks. Our library of syndicated
       programming includes shows that have had successful first runs on
       television in terms of audience ratings, such as Touched by an Angel and
       Diagnosis Murder. While most of our current PAX TV programming is
       syndicated programming, we expect the amount of syndicated programming we
       air to decrease as we increase our offerings of original programs on PAX
       TV.

     Our PAX TV programming also includes sports, movies and other content
provided to us by NBC from time to time, the amount of which varies and is
dependent upon mutual agreement as to the terms under which we have access to
this programming, but which generally has not exceeded ten hours per month.
During non-PAX TV programming hours, our owned and operated stations and cable
and satellite distribution carry infomercials and other forms of long form paid
programming. We believe that airing long form paid programming provides us with
a significant and stable source of revenue.

                                NBC RELATIONSHIP

     In September 1999, NBC, a subsidiary of General Electric Company, invested
$415 million in our company. In connection with this investment, we entered into
a number of business arrangements with NBC that are intended to strengthen our
business. As part of these arrangements and our relationship with NBC:

     - NBC provides network advertising sales, marketing and network research
       services for PAX TV;

     - NBC provides national advertising sales services for a majority of our
       stations;

     - NBC provides some of its programming, including movies and sporting
       events, for broadcast on PAX TV; and

     - We have entered into JSAs with NBC with respect to 13 of our stations
       serving 11 markets also served by an NBC owned and operated station, and
       with 35 independently owned NBC affiliated stations serving our markets.

     In connection with NBC's investment in us, NBC also entered into an
agreement with Lowell W. "Bud" Paxson, our Chairman and controlling stockholder,
which gives NBC the right to purchase all the shares of
                                        2


our Class B common stock owned by Mr. Paxson, and thereby acquire control of our
company. The acquisition of these shares by NBC is subject to the satisfaction
of various conditions, including compliance with applicable provisions of the
Communications Act of 1934 and the approval of the Federal Communications
Commission.

                              RECENT DEVELOPMENTS

     In December 2001, we commenced a binding arbitration proceeding against NBC
in which we asserted that NBC has breached its agreements with us and has
breached its fiduciary duty to us and to our shareholders. We have asserted that
NBC's proposed acquisition of Telemundo Communications Group, Inc. ("Telemundo
Group") violates the terms of the agreements governing the investment and
partnership between us and NBC. We also made two filings with the FCC, one of
which requests a declaratory ruling as to whether conduct by NBC, including
NBC's influence and apparent control over certain members of our board of
directors selected by NBC (all of whom have since resigned from our board), has
caused NBC to have an attributable interest in us in violation of FCC rules or
has infringed upon our rights as an FCC license holder. The second FCC filing
seeks to deny FCC approval of NBC's acquisition of the Telemundo Group's
television stations.

     The initiation of these proceedings by us casts significant uncertainty
over the future direction of our relationship with NBC. The hearing in the
arbitration proceeding is currently scheduled to occur in April 2002, and we
expect that, under the applicable arbitration rules, the arbitrator will render
a decision by the end of May 2002. If we do not prevail in the arbitration
proceeding, and our position expressed in the FCC filings is not accepted by the
FCC, NBC could consummate the acquisition of the Telemundo Group and thereby
render it highly unlikely that NBC would be able to acquire control of our
company, while at the same time retaining its investment in us and its ability
to exercise a significant influence over our operations.

                             JOINT SALES AGREEMENTS

     In order to improve the operations of our local stations, we have entered
into JSAs with respect to 55 of our stations, including JSAs between 48 of our
stations and NBC owned or affiliated stations. Substantially all of those
stations are currently operating under the terms of the JSAs. Substantially all
JSA partners have the right to terminate the JSA upon a sale by the JSA partner
of its station that is the subject of the JSA. Each JSA typically provides the
following:

     - The JSA partner serves as our exclusive sales representative to sell our
       station advertising, enabling our station to benefit from the strength of
       the JSA partner's sales organization and existing advertiser
       relationships;

     - We integrate and co-locate many of our station operations with those of
       the JSA partner, reducing our costs through operating efficiencies and
       economies of scale, including the elimination of redundant owned and
       leased facilities and staffing; and

     - The JSA partner may provide local news and syndicated programming,
       supplementing and enhancing our station's programming lineup.

                               BUSINESS STRATEGY

     The principal components of our strategy are:

     - To build a nationally recognized brand by offering quality family
       programming;

     - To achieve operating efficiencies and cost savings by centralizing many
       of the functions of our owned and operated stations, including
       programming, promotions, advertising and research;

     - To streamline our station operations and achieve both revenue gains and
       cost savings through the implementation of JSAs;

     - To further expand and improve our television distribution system to reach
       as many U.S. television households as possible in a cost efficient manner
       and to thereby increase the attractiveness of PAX TV to network
       advertisers; and
                                        3


     - To capitalize on opportunities in digital broadcasting through our
       ownership of a significant portfolio of broadcast television stations.

                                  OUR HISTORY

     We were founded in 1991 by Mr. Paxson, who remains our Chairman and
controlling stockholder. We began by purchasing radio and television stations,
and grew to become Florida's largest radio station group, while also owning two
network-affiliated television stations and other television stations which
carried principally infomercials and other paid programming. In 1997, we sold
our radio station group and our network-affiliated television stations to
concentrate on building our owned and operated television station group. Since
commencing our television operations in 1994, we have established the largest
owned and operated broadcast television station group in the U.S., as measured
by the number of television households in the markets our stations serve. We
launched PAX TV on August 31, 1998, and are now in our fourth network
programming season.

     Our Class A common stock is listed on the American Stock Exchange under the
symbol "PAX." Our principal executive offices are located at 601 Clearwater Park
Road, West Palm Beach, Florida 33401 and our telephone number is (561) 659-4122.

                                THE REFINANCING

     The issuance of the original notes was part of our January 2002 refinancing
of approximately $284.4 million aggregate principal amount of our 12 1/2%
Exchange Debentures due 2006 that were issued in exchange for approximately
$284.4 million aggregate liquidation preference and accrued and unpaid dividends
of our outstanding 12 1/2% exchangeable preferred stock. We refer to this
refinancing plan as the "Refinancing."

     The following table summarizes the sources and uses of funds in the
Refinancing:

                                                           
                            (In thousands)
Sources:
Original notes..............................................  $308,338
                                                              ========
Uses:
Redeem 12 1/2% exchange debentures due 2006(a)..............  $298,650
Pay transaction fees and expenses...........................     9,688
                                                              --------
          Total uses........................................  $308,338
                                                              ========



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

(a) Includes redemption premium of $14.2 million.

                         PURPOSE OF THE EXCHANGE OFFER

     On January 14, 2002, we sold, through a private placement exempt from the
registration requirements of the Securities Act of 1933, $496,263,000 aggregate
principal amount at maturity of our 12 1/4% Senior Subordinated Discount Notes
due 2009. We used the net proceeds from the sale of the original notes to effect
the Refinancing.

     Simultaneously with the private placement, we entered into a registration
rights agreement with the initial purchasers of the original notes. Under the
registration rights agreement, we are required to use our reasonable best
efforts to cause a registration statement for substantially identical notes,
which will be issued in exchange for the original notes, to become effective on
or before May 14, 2002. You may exchange your original notes for new notes in
this exchange offer. You should read the discussion under the headings
"-- Summary of the Exchange Offer," "The Exchange Offer" and "Description of the
Notes" for further information regarding the new notes.

     We did not register the original notes under the Securities Act or any
state securities laws, nor do we intend to do so after the exchange offer. As a
result, the original notes may only be transferred in limited circumstances
under the securities laws. If the holders of the original notes do not exchange
their original
                                        4


notes in the exchange offer, they lose their right to have the original notes
registered under the Securities Act, subject to certain limitations. Anyone who
still holds original notes after the exchange offer may be unable to resell
their original notes.

     We believe, however, that holders of the new notes may resell the new notes
without complying with the registration and prospectus delivery provisions of
the Securities Act, if they meet certain conditions. You should read the
discussion under the headings "-- Summary of the Exchange Offer" and "The
Exchange Offer" for further information regarding the exchange offer and resales
of the new notes.

                         SUMMARY OF THE EXCHANGE OFFER

The Initial Offering of
Original Notes................   We sold the original notes on January 14, 2002
                                 to Salomon Smith Barney Inc., UBS Warburg LLC,
                                 Bear, Stearns & Co. Inc. and Credit Suisse
                                 First Boston Corporation. We collectively refer
                                 to these parties in this prospectus as the
                                 "initial purchasers." The initial purchasers
                                 subsequently resold the original notes to
                                 qualified institutional buyers under Rule 144A
                                 under the Securities Act.

Registration Rights
Agreement.....................   We are making the exchange offer in reliance on
                                 the position of the staff of the SEC as set
                                 forth in certain no-action letters addressed to
                                 other parties in other transactions. We have
                                 not, however, sought our own no-action letter,
                                 and we cannot assure you that the staff of the
                                 SEC would make a similar determination with
                                 respect to the exchange offer as in such other
                                 transactions. Based on these interpretations by
                                 the staff of the SEC, we believe that the new
                                 notes issued under this exchange offer in
                                 exchange for original notes may be offered for
                                 resale, resold and otherwise transferred by a
                                 holder thereof other than (i) a broker-dealer
                                 who purchased such original notes directly from
                                 us to resell under Rule 144A or any other
                                 available exemption under the Securities Act or
                                 (ii) a person that is our "affiliate" (as
                                 defined in Rule 405 of the Securities Act),
                                 without compliance with the registration and
                                 prospectus delivery provisions of the
                                 Securities Act, provided that such original
                                 notes were acquired in the ordinary course of
                                 the holder's business and that the holder is
                                 not participating, and has no arrangement or
                                 understanding with any persons to participate,
                                 in the distribution of those original notes.
                                 Holders of original notes accepting the
                                 exchange offer will represent to us in the
                                 Letter of Transmittal that these conditions
                                 have been met.

Resale........................   Any holder who participates in the exchange
                                 offer for the purpose of participating in a
                                 distribution of the new notes may not rely on
                                 the position of the staff of the SEC as set
                                 forth in the no-action letters referred to
                                 above and would have to comply with the
                                 registration and prospectus delivery
                                 requirements of the Securities Act in
                                 connection with any secondary resale
                                 transaction. This prospectus may not be used by
                                 such holders for any secondary resale. A
                                 secondary resale transaction in the United
                                 States by a holder who is using the exchange
                                 offer to participate in the distribution of new
                                 notes must be covered by a registration
                                 statement containing the selling securityholder
                                 information required by Item 507 of Regulation
                                 S-K of the Securities Act. Each broker-dealer
                                 (other than an "affiliate" of us) that receives
                                 new notes for its own account under the
                                 exchange offer in exchange for original notes,
                                 where such original notes were acquired by such
                                 broker-dealer as a result of market-making
                                 activities or other trading

                                        5


                                 activities, must acknowledge that it acquired
                                 the original notes as the result of
                                 market-making activities or other trading
                                 activities and must deliver a prospectus in
                                 connection with any resale of such new notes.
                                 See "Plan of Distribution." The Letter of
                                 Transmittal states that by so acknowledging and
                                 by delivering a prospectus, a broker-dealer
                                 will not be deemed to admit that it is an
                                 "underwriter" within the meaning of the
                                 Securities Act. This prospectus, as it may be
                                 amended or supplemented from time to time, may
                                 be used by a broker-dealer in connection with
                                 resales of new notes received in exchange for
                                 original notes where such original notes were
                                 acquired by such broker-dealer as a result of
                                 market-making activities or other trading
                                 activities. In addition, under Section 4(3) of
                                 the Securities Act, all dealers effecting
                                 transactions in the new notes, whether or not
                                 participating in the exchange offer, may be
                                 required to deliver a prospectus. We have
                                 agreed that we will make this prospectus
                                 available to any broker-dealer for use in
                                 connection with any such resale. See "Plan of
                                 Distribution." Any broker-dealer who is our
                                 affiliate may not rely on the no-action letters
                                 referred to above and must comply with the
                                 registration and prospectus delivery
                                 requirements of the Securities Act in
                                 connection with any secondary resale
                                 transaction. See "The Exchange Offer -- Purpose
                                 and Effect of the Exchange Offer" and "Plan of
                                 Distribution."

The Exchange Offer............   We are offering to exchange under the exchange
                                 offer up to $496,263,000 aggregate principal
                                 amount at maturity of new notes for up to
                                 $496,263,000 aggregate principal amount at
                                 maturity of original notes. The terms of the
                                 new notes are substantially identical in all
                                 respects (including interest rate and maturity)
                                 to the terms of the original notes for which
                                 they may be exchanged under the exchange offer,
                                 except that the new notes are freely
                                 transferable by holders thereof (other than as
                                 provided herein), and are not subject to any
                                 covenant restricting transfer absent
                                 registration under the Securities Act. See "The
                                 Exchange Offer -- Terms of the Exchange" and
                                 "The Exchange Offer -- Procedures for
                                 Tendering."

                                 The exchange offer is not conditioned upon any
                                 minimum number of original notes being tendered
                                 for exchange.

Record Date...................   We mailed this prospectus and the related
                                 exchange offer documents to registered holders
                                 of original notes on                , 2002.

Expiration Date...............   The exchange offer will expire at 5:00 p.m.,
                                 New York City time on                , 2002,
                                 unless extended, which date we refer to in this
                                 prospectus as the "expiration date."

Conditions of the Exchange
Offer.........................   Our obligations to consummate the exchange
                                 offer are subject to certain conditions. See
                                 "The Exchange Offer -- Conditions to the
                                 Exchange Offer." We reserve the right to
                                 terminate or amend the exchange offer at any
                                 time before the expiration date upon the
                                 occurrence of any such conditions.

Withdrawal Rights.............   Tenders may be withdrawn at any time before the
                                 expiration date; otherwise, all tenders will be
                                 irrevocable.

Procedures for Tendering
Notes.........................   See "The Exchange Offer -- Procedures for
                                 Tendering."

                                        6


Federal Income Tax
Consequences..................   The exchange of original notes for new notes
                                 should not be a taxable exchange for federal
                                 income tax purposes. See "Certain Federal
                                 Income Tax Considerations."

Effect on Holders of the
Original Notes................   As a result of the making of this exchange
                                 offer, and upon acceptance for exchange of all
                                 validly tendered original notes under the terms
                                 of this exchange offer, we will have fulfilled
                                 our obligations related to the exchange offer
                                 that are contained in the registration rights
                                 agreement and, accordingly, there will be no
                                 increase in the interest rate on the original
                                 notes under the applicable terms of the
                                 registration rights agreement or the indenture
                                 governing the notes because of the exchange
                                 offer. Holders of the original notes who do not
                                 tender their original notes will be entitled to
                                 all the rights and limitations applicable
                                 thereto under the indenture except for any
                                 rights which by their terms terminate or cease
                                 to have further effect as a result of the
                                 making of, and the acceptance for exchange of
                                 all validly tendered original notes under, the
                                 exchange offer. All untendered original notes
                                 will continue to be subject to the restrictions
                                 on transfer provided for in the indenture. To
                                 the extent that original notes are tendered and
                                 accepted in the exchange offer, the trading
                                 market for untendered original notes could be
                                 adversely affected.

Exchange Agent................   The exchange agent with respect to the exchange
                                 offer is The Bank of New York, which we refer
                                 to in this prospectus as the "exchange agent".
                                 The address and telephone number of the
                                 exchange agent are set forth in "The Exchange
                                 Offer -- Exchange Agent."

Use of Proceeds...............   There will be no cash proceeds to us from the
                                 exchange under the exchange offer.

Special Procedures for
Beneficial Owners.............   If you are the beneficial owner of book-entry
                                 interests and your name does not appear on a
                                 security position listing of DTC as the holder
                                 of the book-entry interests or if you are a
                                 beneficial owner of original notes that are
                                 registered in the name of broker, dealer,
                                 commercial bank, trust company or other nominee
                                 and you wish to tender the book-entry interests
                                 or original notes in the exchange offer, you
                                 should contact the person in whose name the
                                 book-entry interests or original notes are
                                 registered promptly and instruct that person to
                                 tender on your behalf.

                                 THE NEW NOTES

     The form and terms of the new notes will be identical in all material
respects to the form and terms of the original notes, except that the issuance
of the new notes will be registered under the Securities Act. As a result, the
new notes will not bear legends restricting their transfer and will not contain
the registration rights provisions that applied to the original notes. The new
notes represent the same debt as the original notes exchanged for the new notes.
Both the original notes and the new notes are governed by the same indenture. We
use the term "notes" in this prospectus to collectively refer to the original
notes and the new notes.

Issuer........................   Paxson Communications Corporation

Notes Offered.................   $496,263,000 aggregate principal amount at
                                 stated maturity of 12 1/4% senior subordinated
                                 discount notes due 2009.

Issue Price...................   $621.32 per $1,000 principal amount at
                                 maturity.

Maturity......................   January 15, 2009.
                                        7


Accretion.....................   Accretion means adjustment of the price of a
                                 note to reflect the difference between the
                                 price of a note bought at an original issue
                                 discount and the stated amount at maturity of
                                 the note. The aggregate accreted value of the
                                 notes will increase from approximately
                                 $308,338,000 at issuance at a rate of 12 1/4%,
                                 compounded semi-annually, to a final accreted
                                 value equal to their aggregate principal amount
                                 at maturity of $496,263,000 at January 15,
                                 2006.

Interest Rate.................   Before January 15, 2006 no cash interest will
                                 accrue on the notes. The notes will accrue
                                 interest at the rate of 12 1/4% per annum,
                                 payable semi-annually in cash in arrears on
                                 January 15 and July 15 of each year, commencing
                                 July 15, 2006.

Guarantees....................   The notes are fully guaranteed, on a senior
                                 subordinated unsecured basis, by all of our
                                 domestic subsidiaries.

Ranking.......................   The notes are:

                                 - our senior subordinated, unsecured
                                 obligations;

                                 - subordinate in right of payment to all of our
                                   existing and future senior debt and that of
                                   the subsidiary guarantors;

                                 - pari passu in right of payment with all of
                                   our existing and future senior subordinated
                                   debt and that of the subsidiary guarantors;

                                 - senior to all of our existing and future
                                   subordinated obligations and those of the
                                   subsidiary guarantors; and

                                 - senior to all of our preferred stock;
                                   however, we have the option, subject to
                                   various limitations, of exchanging
                                   outstanding shares of our Series B preferred
                                   stock and 13 1/4% exchangeable preferred
                                   stock into exchange debentures, which will
                                   rank pari passu with the notes.

                                 As of December 31, 2001, we and the subsidiary
                                 guarantors had approximately $329.2 million of
                                 senior debt and approximately $200.0 million of
                                 senior subordinated debt. In addition, as of
                                 that date, we had $1,090.2 million of preferred
                                 stock outstanding that is exchangeable, subject
                                 to various restrictions, into an aggregate of
                                 $1,090.2 million of senior subordinated debt.
                                 As of December 31, 2001, after giving effect to
                                 the Refinancing, we and the subsidiary
                                 guarantors would have had approximately $329.2
                                 million of senior debt and approximately $508.3
                                 million of senior subordinated debt. In
                                 addition, as of that date, after giving effect
                                 to the Refinancing, we would have had $807.0
                                 million of preferred stock outstanding that is
                                 exchangeable, subject to various restrictions,
                                 into an aggregate of $807.0 million of senior
                                 subordinated debt.

Optional Redemption...........   Before January 15, 2006, we may redeem all or
                                 part of the notes by paying a "make-whole"
                                 premium based on U.S. Treasury rates as
                                 specified in this prospectus under "Description
                                 of Notes -- Optional Redemption."

                                 At any time on or after January 15, 2006, we
                                 may redeem all or a part of the notes at the
                                 redemption prices specified in this prospectus
                                 under "Description of Notes -- Optional
                                 Redemption."

                                 At any time before January 15, 2005, we may
                                 redeem up to 35% of the notes with the net
                                 proceeds of certain equity offerings, at a
                                 price equal to 112.25% of the accreted value,
                                 provided that at least

                                        8


                                 65% of the original aggregate principal amount
                                 at maturity of the notes remains outstanding
                                 after the redemption.

Change of Control.............   Following a change of control, we will be
                                 required to make an offer to purchase all of
                                 the notes at a purchase price of 101% of the
                                 accreted value, if before January 15, 2006, or
                                 101% of their principal amount, if after
                                 January 15, 2006, plus accrued and unpaid
                                 interest.

Certain Covenants.............   We issued the original notes under, and the new
                                 notes will be issued under, an indenture
                                 between us, the guarantors and The Bank of New
                                 York, as trustee. The indenture limits our
                                 ability and the ability of our restricted
                                 subsidiaries to:

                                 - incur more debt;

                                 - pay dividends or make other restricted
                                   payments;

                                 - create or permit to exist certain liens;

                                 - issue stock of subsidiaries;

                                 - sell certain assets;

                                 - incur dividend or other payment restrictions
                                   affecting our subsidiaries;

                                 - enter into transactions with affiliates; and

                                 - consolidate, merge or transfer all or
                                   substantially all our assets.

                                 These limitations are subject to a number of
                                 important exceptions and qualifications.

Original Issue Discount.......   The accretion of the notes from their issue
                                 price to their principal amount at maturity
                                 will produce taxable ordinary interest income
                                 in the amount of the accretion for holders of
                                 the notes during the accretion period. The
                                 Internal Revenue Code calls this original issue
                                 discount. Thus, although interest will not be
                                 payable on the notes before January 15, 2006,
                                 U.S. holders will be required to include in
                                 gross income for U.S. federal income tax
                                 purposes a portion of the original issue
                                 discount for each day during each taxable year
                                 in which a note is held. See "Important Federal
                                 Income Tax Consequences."

Use of Proceeds...............   We used the proceeds from the offering of the
                                 original notes to redeem $298.7 million
                                 aggregate principal amount of our 12 1/2%
                                 exchange debentures due 2006 (which were issued
                                 in exchange for all of the outstanding shares
                                 of our 12 1/2% exchangeable preferred stock),
                                 including the redemption premium required to be
                                 paid in connection therewith, and to pay fees
                                 and expenses related to the Refinancing. We
                                 will not receive any proceeds from the exchange
                                 offer.

Risk Factors..................   You should carefully consider the information
                                 set forth in the section entitled "Risk
                                 Factors" and the other information in this
                                 prospectus in deciding whether to participate
                                 in the exchange offer.

                                        9


                 SUMMARY CONSOLIDATED FINANCIAL AND OTHER DATA

     The following table sets forth our summary consolidated financial data for
the years ended December 31, 1999, 2000 and 2001 and at December 31, 2001. The
data for the years ended December 31, 1999, 2000 and 2001 and at December 31,
2001 have been derived from our audited consolidated financial statements. Our
audited consolidated financial statements are included elsewhere in this
prospectus. This summary financial data should be read in conjunction with the
information contained in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and our consolidated audited financial
statements, including the notes related thereto.



                                                                    YEAR ENDED DECEMBER 31,
                                                            ---------------------------------------
                                                               1999          2000          2001
                                                            -----------   -----------   -----------
                                                             (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                                                               
STATEMENT OF OPERATIONS DATA:
Revenues..................................................   $ 248,362     $ 315,936     $ 308,806
Less: agency commissions..................................     (34,182)      (44,044)      (43,480)
                                                             ---------     ---------     ---------
Net revenues..............................................     214,180       271,892       265,326
Expenses:
  Programming and broadcast operations....................      33,139        38,633        42,457
  Program rights amortization.............................      91,799       100,324        84,808
  Selling, general and administrative.....................     135,063       137,804       120,000
  Time brokerage and affiliation fees.....................      14,257         5,259         3,621
  Stock-based compensation(1).............................      16,814        13,866        10,161
  Adjustment of programming to net realizable value.......      70,499        24,400        66,992
  Restructuring charge related to Joint Sales
     Agreements...........................................          --         5,760        (1,229)
  Depreciation and amortization...........................      77,860        96,881        96,248
                                                             ---------     ---------     ---------
     Total operating expenses.............................     439,431       422,927       423,058
                                                             ---------     ---------     ---------
Operating loss............................................    (225,251)     (151,035)     (157,732)
Other income (expense):
  Interest expense........................................     (50,286)      (47,973)      (49,722)
  Interest income.........................................       8,570        14,022         4,538
  Other expenses, net.....................................      (7,855)       (4,426)       (4,049)
  Gains on modification of program rights obligations.....          --        10,221           932
  Gains on sale of Travel Channel and other broadcast
     assets...............................................      59,453         1,325        12,274
  Equity in loss of unconsolidated investment.............      (2,260)         (539)           --
                                                             ---------     ---------     ---------
Loss before income taxes..................................    (217,629)     (178,405)     (193,759)
Income tax (provision) benefit............................      57,257          (120)         (120)
                                                             ---------     ---------     ---------
Loss before extraordinary item............................    (160,372)     (178,525)     (193,879)
Extraordinary item(2).....................................          --            --        (9,903)
                                                             ---------     ---------     ---------
Net loss..................................................    (160,372)     (178,525)     (203,782)
Dividends, accretion and beneficial conversion feature on
  preferred stock(3)......................................    (154,207)     (212,804)     (146,656)
                                                             ---------     ---------     ---------
Net loss available to common stockholders.................   $(314,579)    $(391,329)    $(350,438)
                                                             =========     =========     =========


                                        10




                                                                    YEAR ENDED DECEMBER 31,
                                                            ---------------------------------------
                                                               1999          2000          2001
                                                            -----------   -----------   -----------
                                                             (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                                                               
Basic and diluted loss per share(4):
  Loss before extraordinary item..........................   $   (5.10)    $   (6.16)    $   (5.28)
  Extraordinary item......................................          --            --         (0.15)
  Net loss................................................       (5.10)        (6.16)        (5.43)
  Weighted average shares outstanding -- basic and
     diluted..............................................      61,738        63,515        64,509
OTHER DATA:
Cash flows used in operating activities...................   $(181,808)    $ (76,036)    $ (60,772)
Cash flows (used in) provided by investing activities.....    (160,508)      (12,784)       48,477
Cash flows provided by financing activities...............     418,065        14,994        44,790
Adjusted EBITDA(5)........................................     (45,821)       (4,869)       18,061
Program rights payments and deposits......................     125,916       128,288       130,566
Payments for cable distribution rights....................      30,713        10,727        14,418
Capital expenditures......................................      34,609        25,110        35,213
Ratio of earnings to fixed charges(6).....................          --            --            --
Deficiency in earnings to cover fixed charges(6)..........    (215,369)     (177,866)     (193,759)
Ratio of earnings to combined fixed charges and preferred
  stock dividends(6)......................................          --            --            --
Deficiency in earnings to cover combined fixed charges and
  preferred stock dividends(6)............................    (369,576)     (390,670)     (340,415)




                                                                AT DECEMBER 31, 2001
                                                              -------------------------
                                                                                AS
                                                                ACTUAL      ADJUSTED(7)
                                                              ----------    -----------
                                                                            (UNAUDITED)
                                                                      
BALANCE SHEET DATA:
Working capital.............................................  $   57,888    $   57,888
Total assets................................................   1,383,675     1,393,363
Total debt..................................................     529,180       837,518
Total redeemable preferred stock............................   1,164,160       884,270
Total stockholders' deficit.................................    (538,043)     (556,803)


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

(1) Stock-based compensation represents a non-cash charge associated with the
    granting of stock options to employees. See "Management's Discussion and
    Analysis of Financial Condition and Results of Operations."

(2) Extraordinary charge related to early extinguishment of debt in connection
    with our July 2001 refinancing.

(3) Dividends, accretion and beneficial conversion feature on preferred stock
    include non-cash dividends, accretion and the beneficial conversion feature
    on our mandatorily redeemable securities of $154.0 million in 1999, $205.7
    million in 2000 and $142.9 million in 2001.

(4) Because of losses from continuing operations, the effect of stock options
    and warrants is antidilutive. Accordingly, our presentation of diluted
    earnings per share is the same as that of basic earnings per share.

(5) "Adjusted EBITDA" is defined as operating loss plus depreciation,
    amortization, stock-based compensation, programming net realizable value
    adjustments, restructuring and other one-time charges, and time brokerage
    and affiliation fees. Adjusted EBITDA does not purport to represent cash
    provided by operating activities as reflected in the consolidated statements
    of cash flows, is not a measure of financial performance under generally
    accepted accounting principles, and should not be considered in isolation.
    We believe the presentation of adjusted EBITDA is relevant and useful
    because adjusted EBITDA is a measurement industry analysts use when
    evaluating our operating performance. We also believe adjusted

                                        11


    EBITDA enhances an investor's understanding of our financial condition,
    results of operations and cash flows because it measures our operating
    performance and cash flows, exclusive of interest and other non-operating
    and non-recurring items as well as non-cash charges for depreciation,
    amortization and stock compensation. In evaluating adjusted EBITDA,
    investors should consider various factors including its relationship to our
    reported operating losses and cash flows from operating activities.
    Investors should be aware that adjusted EBITDA may not be comparable to
    similarly titled measures presented by other companies and could be
    misleading unless all companies and analysts calculate such measures in the
    same manner. The funds depicted by adjusted EBITDA are not available for our
    discretionary use because of other commitments including but not limited to
    debt service under our debt facilities.

(6) For purposes of this calculation, earnings are defined as loss before income
    taxes, extraordinary item and fixed charges. Fixed charges consist of
    interest expense, amortization of deferred financing costs and the component
    of operating lease expense which we believe represents an appropriate
    interest factor.

(7) Adjusted to give effect to the Refinancing.

                                        12


                                  RISK FACTORS

     You should consider carefully the following risk factors in addition to the
other information in this prospectus before deciding whether to participate in
the exchange offer.

RISKS RELATING TO OUR BUSINESS

WE HAVE A HISTORY OF OPERATING LOSSES AND NEGATIVE CASH FLOW AND WE MAY NOT
BECOME PROFITABLE IN THE FUTURE.

     We have incurred losses from continuing operations in each fiscal year
since our inception. As a result of these net losses, for the years ended
December 31, 2001, 2000 and 1999, our earnings were insufficient to cover
combined fixed charges and preferred stock dividend requirements by
approximately $340.4 million, $390.7 million and $369.6 million, respectively.
These amounts include non-cash preferred stock dividends of $75.1 million and
$65.5 million in 2000 and 1999, respectively, which resulted from our issuance
of convertible preferred stock to NBC with a conversion price per share of Class
A common stock that was less than the public trading price of the Class A common
stock on the closing date of the preferred stock sale. We expect to continue to
experience net losses in the foreseeable future, principally due to interest
charges on outstanding debt (and the debentures into which our outstanding
preferred stock can be exchanged, if issued), dividends on outstanding preferred
stock, and non-cash charges for depreciation and amortization expense related to
fixed assets and intangible assets relating to acquisitions. Future net losses
could be greater than those we have experienced in the past.

     Our adjusted EBITDA has been insufficient to cover our operating expenses,
debt service requirements and other cash commitments in each of the years ended
December 31, 2001, 2000 and 1999. Our adjusted EBITDA for these periods was
$18.1 million, negative $4.9 million and negative $45.8 million, respectively.
We have financed our operating cash requirements, as well as our capital needs,
during these periods with the proceeds of financing activities, including the
issuance of preferred stock and additional borrowings. We cannot assure you that
we will generate sufficient operating cash flow in the future to pay our debt
service requirements on the notes or that we will be able to obtain sufficient
additional financing to meet our debt service requirements on terms acceptable
to us, or at all.

WE CANNOT PREDICT WHETHER PAX TV WILL BE SUCCESSFUL.

     We launched PAX TV on August 31, 1998, and have a relatively limited
history of operating PAX TV. The experiences of other new television networks
during the past decade indicate that it requires a substantial period of time
and the commitment of significant financial, managerial and other resources to
gain market acceptance of a new television network by viewing audiences and
advertisers to a sufficient degree that the new network can attain
profitability. The network television industry has been dominated for many years
by ABC, NBC and CBS, and only recently have additional broadcast networks
entered the market. Although we believe that our approach is unique among
broadcast television networks, in that we own and operate the stations reaching
most of the television households reached by PAX TV, our business model is
unproven. We cannot assure you that PAX TV will gain sufficient market
acceptance to be profitable or otherwise be successful.

IF OUR TELEVISION PROGRAMMING DOES NOT ATTRACT SUFFICIENT NUMBERS OF VIEWERS IN
DESIRABLE DEMOGRAPHIC GROUPS, OUR ADVERTISING REVENUE COULD DECREASE.

     Our success depends upon our ability to generate advertising revenues,
which constitute substantially all of our operating revenues. Our ability to
generate advertising revenues in turn largely depends upon our ability to
provide programming which attracts sufficient numbers of viewers in desirable
demographic groups to generate audience ratings that advertisers will find
attractive. While PAX TV audience ratings and our advertising revenues generally
have been increasing since the launch of PAX TV on August 31, 1998, we cannot
assure you that our programming will attract sufficient targeted viewership or
that, whether or not it achieves favorable ratings, we will be able to generate
enough advertising revenues to achieve profitability. Our ratings depend partly
upon unpredictable volatile factors beyond our control, such as viewer
preferences, competing programming and the availability of other entertainment
activities. A shift in viewer preferences could cause our programming not to
gain popularity or to decline in popularity, which could adversely impact our
advertising revenues. We may not be able to anticipate and react effectively to
shifts in viewer tastes and

                                        13


interests in our markets or to generate sufficient demand and market acceptance
for our programming. Further, we acquire rights to our syndicated programming
under multi-year commitments, and it is difficult to accurately predict how a
program will perform in relation to its cost. In some instances, we must replace
programs before their costs have been fully amortized, resulting in write-offs
that increase our operating costs. We cannot assure you that our programming
costs will not increase to a degree which may materially adversely affect our
operating results. In addition, we incur production, talent and other ancillary
costs to produce original programs for PAX TV. We cannot assure you that our
original programming will generate advertising revenues in excess of our
programming costs.

OUR JOINT SALES AGREEMENTS MAY NOT IMPROVE THE OPERATIONS OF OUR TELEVISION
STATIONS, AND THIS COULD MATERIALLY INCREASE OUR COSTS TO OPERATE THOSE STATIONS
OR MATERIALLY REDUCE THE REVENUES WE RECEIVE FROM THOSE STATIONS.

     While we believe that each of our stations which operates under a JSA
should experience an improvement in overall operating performance through a
combination of improved revenues and operating cost reductions, we cannot assure
you that we will realize any overall operating improvements. The achievement of
operating improvements at our stations operating under JSAs depends to a
substantial degree on the performance of our JSA partners, over which we have no
control. In addition, if we elect to terminate a JSA in a particular market, we
may incur significant costs to transfer the JSA to another broadcast television
station operator or to resume operating the station ourselves.

IF ADVERTISERS HAVE TO PAY HIGHER RESIDUAL PAYMENTS TO THE MEMBERS OF THE ACTORS
GUILDS THAT THEY USE IN SPOT ADVERTISEMENTS ON OUR NETWORK, ADVERTISERS MAY
REDUCE OR DISCONTINUE THEIR ADVERTISING ON OUR NETWORK.

     Approximately 33% of our 2001 revenues were derived from network commercial
spot advertisements aired on PAX TV. We believe substantially all of our network
spot advertisements were produced by advertisers or their advertising agencies
using performers who are members of the Screen Actors Guild and the American
Federation of Television and Radio Artists. When commercials are aired on
broadcast and cable television networks, the performers are entitled to residual
payments from the advertisers, which are determined under collective bargaining
agreements between the guilds and the advertising community. In the fall of
2000, after the expiration of the then effective guild agreements and a
prolonged strike by performers, the guilds and the advertising community entered
into new guild agreements. Under both the old guild agreements and the current
guild agreements, the residual payments required to be paid by advertisers in
connection with advertisements aired on cable networks are substantially lower
than the residuals required to be paid in connection with advertising aired on
broadcast networks. To date, we believe that a substantial portion of the
network spot advertising time on PAX TV was purchased by advertisers under the
assumption that the residual payment obligations the advertising community
incurred in connection with airing these spots were to be calculated under the
rates applicable to cable networks, not those applicable to other broadcast
networks. Although the old guild agreements did not specify how residual
payments were to be calculated for advertisements aired on PAX TV, the current
guild agreements include provisions establishing residual rates that are
applicable to network advertisements aired on PAX TV and that are substantially
lower than the rates applicable to broadcast networks but still higher, in most
circumstances, than the rates applicable to cable networks. As a result of this
development, some advertisers have informed us that our network advertising
spots are no longer as attractive as those of cable networks because of the
relatively higher residual payments applicable to PAX TV under the current guild
agreements. Because of these higher residual payments, some advertisers may be
unwilling to purchase advertising time on PAX TV unless we lower our rates or
otherwise provide financial compensation to them. We are unable to predict the
magnitude of the effect of this development on our network spot advertising
revenues.

                                        14


NBC'S EXERCISE OF ITS RIGHTS TO EXERT SIGNIFICANT INFLUENCE UPON OUR OPERATIONS
COULD ADVERSELY AFFECT OUR BUSINESS.

     In September 1999, we entered into a series of agreements with NBC under
which it invested $415 million in our company. The agreements with NBC provided,
among other things, that we must obtain NBC's consent for:

     - approval of annual budgets;

     - expenditures materially in excess of budgeted amounts;

     - material acquisitions of programming;

     - material amendments to our certificate of incorporation or bylaws;

     - material asset sales or purchases, including, in some cases, sales of our
       television stations;

     - business combinations where we would not be the surviving corporation or
       as a result of which we would experience a change of control;

     - issuances or sales of any capital stock, with some exceptions;

     - stock splits or recombinations;

     - any increase in the size of our board of directors other than an increase
       resulting from provisions of our outstanding preferred stock of up to two
       additional directors; and

     - joint sales, joint services, time brokerage, local marketing or similar
       agreements as a result of which our stations with national household
       coverage of 20% or more would be subject to those agreements.

     As a result of our agreements with NBC, NBC is in a position to exert
significant influence over our management and policies and to prevent us from
taking actions which our management may otherwise desire to take. NBC may have
interests that differ from those of our other stockholders and debtholders.

     In connection with its investment in us, NBC acquired rights to purchase
more of our securities from us and the right, subject to various conditions, to
purchase all of the shares of our Class B common stock owned by Mr. Paxson. The
exercise of these rights would result in NBC acquiring control of our company.

THE OUTCOME OF OUR ARBITRATION PROCEEDING AGAINST NBC AND OUR FCC FILINGS WITH
RESPECT TO NBC COULD ADVERSELY AFFECT OUR BUSINESS.

     In December 2001, we commenced a binding arbitration proceeding against NBC
in which we asserted that NBC has breached its agreements with us and has
breached its fiduciary duty to us and to our shareholders. We have asserted that
NBC's proposed acquisition of the Telemundo Group violates the terms of the
agreements governing the investment and partnership between us and NBC. We also
made two filings with the FCC, one of which requests a declaratory ruling as to
whether conduct by NBC, including NBC's influence and apparent control over
certain members of our board of directors selected by NBC (all of whom have
since resigned from our board), has caused NBC to have an attributable interest
in us in violation of FCC rules or has infringed upon our rights as an FCC
license holder. The second FCC filing seeks to deny FCC approval of NBC's
acquisition of the Telemundo Group's television stations. In addition, in
January 2002, we filed a petition to deny with the FCC arguing that NBC was
ineligible under FCC regulations to acquire control of television station
KNTV-TV, San Jose, California from Granite Broadcasting Corp. because of NBC's
attributable interest in the Company.

     NBC's acquisition of the Telemundo Group's television stations would create
serious additional regulatory obstacles to NBC's ability to acquire control of
us. Should NBC complete its acquisition of the Telemundo Group, it is highly
unlikely that NBC would be able to obtain regulatory approval of its acquisition
of control of us without significant changes in FCC rules and our agreement to
divest some of our most significant television station assets, which in turn
could have a material adverse effect upon the value of our company. These
factors may substantially reduce the likelihood of NBC acquiring more of our
shares and control of our company. Should the FCC find that NBC has an
attributable interest in our television stations, the FCC may require NBC to
divest its investment in us, and NBC will have the right to demand that we
redeem its investment and if we cannot do so within one year, NBC will be free
to transfer its investment and

                                        15


its related rights to a third party selected by NBC in its discretion. The
hearing in the arbitration proceeding is currently scheduled to occur in April
2002, and we expect the arbitrator to render a decision by the end of May 2002.
We cannot provide assurance that the outcome of the proceeding will be favorable
to us or that either of our FCC filings will be resolved favorably to us. Should
the arbitration and FCC proceedings be protracted, our senior management will be
required to divert significant time and attention to these proceedings and we
may incur significant legal and other expenses, which could have a material
adverse effect upon us. Further, we cannot predict the effect that the outcome
of these proceedings will have upon our business.

     We have significant operating relationships with NBC which have been
developed since NBC's investment in us in September 1999. NBC serves as our
exclusive sales representative to sell most of our PAX TV network advertising
and is the exclusive national sales representative for most of our stations. We
have entered into JSAs with NBC owned or NBC affiliated stations with respect to
48 of our television stations. Each JSA typically provides for our JSA partner
to serve as our exclusive sales representative to sell our local station
advertising and for many of our station's operations to be integrated and
co-located with those of the JSA partner. Should the outcome of our arbitration
proceeding against NBC or our FCC filing seeking a declaratory ruling as to
whether NBC has an attributable interest in our stations require the unwinding
or termination of some or all of these operating relationships, or should NBC or
the NBC affiliates elect not to renew the agreements under which these operating
relationships have been implemented, we could be required to incur significant
costs to resume performing the advertising sales and other operating functions
currently performed by NBC and our JSA partners, including the expense of
re-establishing office and studio facilities separate from those of the JSA
partners, or to transfer performance of these functions to another broadcast
television station operator. Our network and station revenues could also be
adversely affected because of the disruption of our advertising sales efforts
that could result from the unwinding of the JSAs. The unwinding or termination
of some or all of our JSAs could have a materially adverse effect upon us.

WE MAY NOT BE ABLE TO REDEEM OUR SECURITIES HELD BY NBC WERE NBC TO DEMAND THAT
WE DO SO AND THIS COULD HAVE ADVERSE CONSEQUENCES FOR US.

     NBC has the right, at any time that the FCC renders a final decision that
NBC's investment in us is "attributable" to NBC (as that term is defined under
applicable rules of the FCC), or for a period of 60 days beginning on September
15, 2002 and on each September 15 after 2002, to demand that we redeem, or
arrange for a third party to acquire, any shares of our Series B preferred stock
then held by NBC. In connection with the FCC filings described above under "Risk
Factors -- The outcome of our arbitration proceeding against NBC and our FCC
filings with respect to NBC could adversely affect our business", we have
requested a declaratory ruling from the FCC as to whether NBC has an interest in
us that is "attributable" to NBC. Our ability to effect any redemption is
restricted by the terms of our outstanding debt and preferred stock. NBC also
has the right to demand that we redeem any Series B preferred stock and Class A
common stock issued upon conversion of the Series B preferred stock then held by
NBC upon the occurrence of various events of default. Should we fail to effect a
redemption within prescribed time periods, NBC generally will be permitted to
transfer, without restriction, any of our securities acquired by it, its right
to acquire Mr. Paxson's Class B common stock, the contractual rights described
above, and its other rights under the related transaction agreements. Should we
fail to effect a redemption triggered by an event of default on our part within
180 days after demand, NBC will have the right to exercise in full its existing
warrants to purchase shares of our Class A common stock and its right to acquire
Mr. Paxson's Class B common stock at reduced prices. If NBC does not exercise
these rights, we will have another 30 day period to effect a redemption. If we
then fail to effect a redemption, NBC may require us to conduct, at our option,
a public sale or liquidation of our assets, after which time NBC will not be
permitted to exercise its rights to acquire more of our securities.

     Should NBC exercise any of its redemption rights, we may not have
sufficient funds to pay the redemption price for the securities to be redeemed
and may not be able to identify another party willing to purchase those
securities at the required redemption prices. If we are unable to complete a
redemption, we will be unable to prevent NBC from transferring a controlling
interest in our company to a third party selected by NBC in its discretion or,
in the case of a default by us, requiring us to effect a public sale or
liquidation of our assets. The occurrence of any of these events could have a
material adverse effect upon us.

                                        16


IF A DELAWARE COURT WERE TO CONCLUDE THAT WE HAD INCURRED DEBT UNDER OUR SENIOR
CREDIT AGREEMENT IN VIOLATION OF THE TERMS OF OUR 13 1/4% EXCHANGEABLE PREFERRED
STOCK AND OUR SERIES B PREFERRED STOCK, THE HOLDERS OF THOSE SHARES OF PREFERRED
STOCK COULD ACQUIRE THE RIGHT TO ELECT AN AGGREGATE OF FOUR ADDITIONAL MEMBERS
OF OUR BOARD OF DIRECTORS.

     The certificates of designation of our 13 1/4% exchangeable preferred stock
and our Series B preferred stock (the "Certificates") restrict our ability to
incur indebtedness. NBC has asserted that certain aspects of our senior credit
facility entered into in July 2001 may have given us the ability to incur
additional indebtedness in violation of the terms of the Certificate with
respect to our Series B preferred stock held by NBC. NBC has not given us a
formal notice of default. Further, we believe that NBC's assertion is incorrect
and that the implementation of our senior credit facility and our borrowings
thereunder are in compliance with all applicable covenants and restrictions,
including those contained in the Certificate, and we have received the opinion
of our legal counsel to that effect. Nevertheless, we cannot assure you that a
Delaware court would reach the same conclusion. If a court were to conclude that
we had incurred indebtedness in violation of the terms of the Certificate with
respect to our Series B preferred stock, and we were not able to cure the
violation, we would be required to increase the size of our board of directors
by two members and the holder of the Series B preferred stock would have the
sole right to elect directors to fill those vacancies (provided that NBC or any
other such holder were permitted under FCC rules to elect members of our board
of directors). Because the Certificate for our 13 1/4% exchangeable preferred
stock contains substantially identical restrictions on our ability to incur
indebtedness, the holders of our 13 1/4% exchangeable preferred stock could
acquire the right to elect two additional directors to our board of directors in
the same fashion. We cannot predict the effect that the addition of four
directors elected by the holders of these series of preferred stock would have
on the operations and prospects of our company.

WE COULD BE SUBJECT TO A MATERIAL TAX LIABILITY IF THE IRS SUCCESSFULLY
CHALLENGES OUR POSITION REGARDING THE 1997 DISPOSITION OF OUR RADIO DIVISION.

     We structured the disposition of our radio division in 1997 in a manner
that management believes will permit us to defer recognizing for income tax
purposes up to approximately $333 million of gain (before deferred taxes). The
IRS could, however, contest our position. Based on the advice of our legal
counsel, our management believes that, were the IRS to challenge our tax
position, it is more likely than not that we would prevail. Should the IRS
successfully challenge our position on these matters, we could be subject to a
material current tax liability. At December 31, 2001, we had net operating loss
carryforwards of approximately $640 million.

WE ARE REQUIRED BY THE FCC TO ABANDON THE ANALOG BROADCAST SERVICE OF 24 OF OUR
FULL POWER STATIONS OCCUPYING THE 700 MHZ SPECTRUM AND MAY SUFFER ADVERSE
CONSEQUENCES IF WE ARE UNABLE TO SECURE ALTERNATIVE DISTRIBUTION ON REASONABLE
TERMS.

     Twenty-four of our full power stations are licensed to broadcast by using
either an analog or digital signal on channels 52-69, a portion of the frequency
within the 700 MHz band of broadcast spectrum currently allocated to television
broadcasters by the FCC. As part of the nationwide transition from analog to
digital broadcasting, current FCC rules require that, after December 31, 2006,
provided that 85% of television households in a television market are capable of
receiving digital services, broadcasters give up their analog signal occupying
the 700 MHz spectrum and broadcast only on their allotted digital frequency. In
some cases broadcasters, including our company, have been given a digital
channel allocation within the 700 MHz band of spectrum. We recently lobbied
Congress and the FCC to delay enforcement of these rules to allow us to develop
and implement strategies to vacate our 700 MHz spectrum and secure alternative
distribution. The FCC, by order released September 17, 2001, authorized analog
stations operating in the 700 MHz band to operate their analog signal on the
channel assigned for digital service and to delay the institution of digital
service until December 31, 2005, or later than December 31, 2005 if it can be
demonstrated that less than 70% of the television households in the station's
market area are capable of receiving digital broadcast signals. Broadcasters
given a digital channel allocation within the 700 MHz band may forego the use of
that channel for digital service until December 31, 2005, or later than December
31, 2005 if it can be demonstrated that less than 70% of the television
households in the station's market are capable of receiving digital broadcast
signals. We cannot predict when we will abandon, by private agreement or as
required by law, the broadcast service of each of our 24 stations occupying the
700 MHz spectrum. We could suffer adverse consequences if we are

                                        17


unable to secure alternative simultaneous distribution of both the analog and
digital signals of those stations on reasonable terms and conditions. We cannot
now predict the impact, if any, on our business of the abandonment of our
broadcast television service in the 700 MHz spectrum.

WE CANNOT ASSURE YOU THAT WE WILL SUCCESSFULLY DEVELOP OUR BROADCAST STATION
GROUP'S DIGITAL TELEVISION PLATFORM.

     We have commenced construction of our digital broadcasting facilities and
intend to explore the most effective use of digital broadcast technology for
each of our stations. We cannot assure you, however, that we will derive
commercial benefits from the development of our digital broadcasting capacity.
Although we believe that proposed alternative and supplemental uses of our
analog and digital spectrum will continue to grow in number, the viability and
success of each proposed alternative or supplemental use of spectrum involves a
number of contingencies and uncertainties. We cannot predict what future actions
the FCC or Congress may take with respect to regulatory control of these
activities or what effect these actions would have on us.

WE ARE DEPENDENT UPON OUR SENIOR MANAGEMENT TEAM AND KEY PERSONNEL AND THE LOSS
OF ANY OF THEM COULD MATERIALLY AND ADVERSELY AFFECT US.

     Our business depends upon the efforts, abilities and expertise of our
executive officers and other key employees, including Mr. Paxson and Jeffrey
Sagansky, our Chief Executive Officer. We cannot assure you that we will be able
to retain the services of any of our key executives. If any of these executive
officers were to leave us, our operating results could be adversely affected.

WE OPERATE IN A VERY COMPETITIVE BUSINESS ENVIRONMENT.

     We compete for audience share and advertising revenues with other providers
of television programming. Our PAX TV programming competes for audience share
and advertising revenues with the programming offered by other broadcast and
cable networks, and also competes for audience share and advertising revenues in
our stations' respective market areas with the programming offered by
non-network affiliated television stations. Our ability to compete successfully
for audience share and advertising revenues depends upon the popularity of our
programming with viewing audiences in demographic groups that advertisers desire
to reach. Our ability to provide popular programming depends upon many factors,
including our ability to correctly gauge audience tastes and accurately predict
which programs will appeal to viewing audiences, to produce original programs
and purchase the right to air syndicated programs at costs which are not
excessive in relation to the advertising revenue generated by the programming,
and to fund marketing and promotion of our programming to generate sufficient
viewer interest. Many of our competitors have greater financial and operational
resources than we do which may enable them to compete more effectively for
audience share and advertising revenues. All of the existing television
broadcast networks and most of the cable networks have been operating for a
longer period than we have been operating PAX TV, and therefore have more
experience in network television operations than we have which may enable them
to compete more effectively.

     Our television stations also compete for audience share with other forms of
entertainment programming, including home entertainment systems and direct
broadcast satellite video distribution services which transmit programming
directly to homes equipped with special receiving antennas and tuners. Further
advances in technology may increase competition for household audiences. Our
stations also compete for advertising revenues with other television stations in
their respective markets, as well as with other advertising media, such as
newspapers, radio stations, magazines, outdoor advertising, transit advertising,
yellow page directories, direct mail and local cable systems. We cannot assure
you that our stations will be able to compete successfully for audience share or
that we will be able to obtain or maintain significant advertising revenue.

     The television broadcasting industry faces continual technological change
and innovation, the possible rise in popularity of competing entertainment and
communications media, and governmental restrictions or actions of federal
regulatory bodies, including the FCC and the Federal Trade Commission, any of
which could have a material effect on our operations.

                                        18


RISKS RELATING TO OUR INDUSTRY

OUR TELEVISION STATIONS COULD BE ADVERSELY AFFECTED BY CHANGES IN THE TELEVISION
BROADCASTING INDUSTRY OR A RECESSION IN THE BROADER U.S. ECONOMY.

     The profitability of our television stations is subject to various factors
that influence the television broadcasting industry as a whole, including:

     - changes in audience tastes;

     - changes in priorities of advertisers;

     - new laws and governmental regulations and policies;

     - changes in broadcast technical requirements;

     - technological changes;

     - proposals to eliminate the tax deductibility of expenses incurred by
       advertisers;

     - changes in the law governing advertising by candidates for political
       office; and

     - changes in the willingness of financial institutions and other lenders to
       finance television station acquisitions and operations.

     We cannot predict which, if any, of these or other factors might have a
significant impact on the television broadcasting industry in the future, nor
can we predict what impact, if any, the occurrence of these or other events
might have on our operations. Generally, advertising expenditures tend to
decline during economic recession or downturn. Consequently, our revenues are
likely to be adversely affected by a recession or downturn in the U.S. economy
or other events or circumstances that adversely affect advertising activity. Our
operating results in individual geographic markets also could be adversely
affected by local regional economic downturns. Seasonal revenue fluctuations are
common in the television broadcasting industry and result primarily from
fluctuations in advertising expenditures by local retailers.

OUR BUSINESS IS SUBJECT TO EXTENSIVE AND CHANGING REGULATION THAT COULD INCREASE
OUR COSTS, EXPOSE US TO GREATER COMPETITION, OR OTHERWISE ADVERSELY AFFECT THE
OWNERSHIP AND OPERATION OF OUR STATIONS OR OUR BUSINESS STRATEGIES.

     Our television operations are subject to significant regulation by the FCC
under the Communications Act of 1934. A television station may not operate
without the authorization of the FCC. Approval of the FCC is required for the
issuance, renewal and transfer of station operating licenses. In particular, our
business depends upon our ability to continue to hold television broadcasting
licenses from the FCC. FCC licenses generally have a term of eight years. Our
station licenses are subject to renewal at various times between 2004 and 2007.
Third parties may challenge our license renewal applications. Although we have
no reason to believe that our licenses will not be renewed in the ordinary
course, we cannot assure you that our licenses or the licenses owned by the
owner-operators of the stations with which we have JSAs will be renewed. The
non-renewal or revocation of one or more of our primary FCC licenses could have
a material adverse effect on our operations.

     The Communications Act of 1934 empowers the FCC to regulate other aspects
of our business, in addition to imposing licensing requirements. For example,
the FCC has the authority to:

     - determine the frequencies, location and power of our broadcast stations,

     - regulate the equipment used by our stations,

     - adopt and implement regulations and policies concerning the ownership and
       operation of our television stations, and

     - impose penalties on us for violations of the Communications Act of 1934
       or FCC regulations.

     Our failure to observe FCC or other rules and policies can result in the
imposition of various sanctions, including monetary forfeitures or the
revocation of a license.

     Congress and the FCC currently have under consideration, and may in the
future adopt, new laws, regulations, and policies regarding a wide variety of
matters that could, directly or indirectly, affect the

                                        19


operation and ownership of our broadcast properties. Relaxation and proposed
relaxation of existing cable ownership rules and broadcast multiple ownership
and cross-ownership rules and policies by the FCC and other changes in the FCC's
rules following passage of the Telecommunications Act of 1996 have affected and
may continue to affect the competitive landscape in ways that could increase the
competition we face, including competition from larger media, entertainment and
telecommunications companies, which may have greater access to capital and
resources. We are unable to predict the impact that any such laws, regulations
or policies may have on our operations.

WE BELIEVE THAT THE SUCCESS OF OUR TELEVISION OPERATIONS DEPENDS TO A
SIGNIFICANT EXTENT UPON ACCESS TO HOUSEHOLDS SERVED BY CABLE TELEVISION SYSTEMS.
IF THE LAW REQUIRING CABLE SYSTEM OPERATORS TO CARRY OUR SIGNAL WERE TO CHANGE,
WE MIGHT LOSE ACCESS TO CABLE TELEVISION HOUSEHOLDS, WHICH COULD ADVERSELY
AFFECT OUR OPERATIONS.

     Under the 1992 Cable Act, each broadcast station is required to elect,
every three years, to either require cable television system operators in their
local market to carry their signals, which we refer to as "must carry" rights,
or to prohibit cable carriage or condition it upon payment of a fee or other
consideration. By electing the "must carry" rights, a broadcaster can demand
carriage on a specified channel on cable systems within its market. These "must
carry" rights are not absolute, and under some circumstances, a cable system may
decline to carry a given station. Our television stations elected "must carry"
on local cable systems for the three year election period which commenced
January 1, 2000. The required election date for the next three year election
period commencing January 1, 2003 will be October 1, 2002. If the law were
changed to eliminate or materially alter "must carry" rights, our business could
be adversely affected.

     The FCC is developing rules to govern the obligations of cable television
systems to carry local television stations during and following the transition
from analog to digital television broadcasting. The FCC tentatively concluded
that a television broadcast station would not be entitled to mandatory carriage
of both the station's analog signal and its digital signal, and would not be
entitled to mandatory carriage of its digital signal unless it first gives up
its analog signal. Furthermore, the FCC tentatively concluded that a broadcaster
with multiple digital programming streams would be required to designate the
primary video stream eligible for mandatory carriage. If the FCC maintains its
current position, mandatory carriage rights for digital signals would be
accorded only to those television stations operating solely with a digital
signal. Broadcasters operating with both analog and digital signals nevertheless
could negotiate with cable television systems for carriage of their digital
signal. We cannot predict what final rules the FCC ultimately will adopt or what
effect those rules will have on our business.

IF A COURT WERE TO DETERMINE THAT RECENTLY ENACTED FEDERAL LEGISLATION REQUIRING
SATELLITE TELEVISION SERVICE PROVIDERS TO CARRY BROADCAST TELEVISION SIGNALS IS
UNCONSTITUTIONAL, OUR RIGHTS TO HAVE OUR TELEVISION BROADCAST SIGNALS CARRIED ON
SATELLITE SERVICE PROVIDERS COULD BE ADVERSELY AFFECTED.

     Under recently enacted federal law, satellite television providers have an
obligation to deliver local broadcast signals to customers residing in a
broadcast television station's local market. Satellite carriers must obtain
consent from the broadcast television station before carrying its signal, and
television stations must negotiate for retransmission consent in good faith. A
satellite carrier delivering the signal of any local television station is
required to carry all stations licensed in the carried station's local market.
To implement this law, the FCC recently adopted rules similar to the "must
carry" obligations that apply to cable television systems. Under the new rules,
stations may elect either mandatory carriage or negotiate for retransmission
consent. Two satellite television providers and a satellite broadcasting trade
association have instituted litigation challenging the constitutionality of the
statutory satellite "must carry" requirements. In June 2001 a federal district
court upheld the constitutionality of the federal law, and in December 2001 a
federal appellate court affirmed the district court's ruling. The proponents of
this litigation have petitioned the U.S. Supreme Court for review of this
decision. Our PAX TV signal currently is carried on satellite systems under
agreements we negotiated with the satellite television providers, which allow
the satellite provider to sell and retain the advertising revenues from a
portion of the non-network advertising time during PAX TV programming hours. We
cannot predict the final outcome of the litigation challenging the
constitutionality of satellite "must carry" requirements or the effect, if any,
that the failure to implement satellite "must carry" would have on our business.

                                        20


RISKS RELATING TO GENERAL ECONOMIC CONDITIONS AND EXTRAORDINARY EVENTS

WE MAY BE ADVERSELY AFFECTED BY A GENERAL DETERIORATION IN ECONOMIC CONDITIONS.

     The risks associated with our business become more acute in periods of a
slowing economy or recession, which may be accompanied by a decrease in
television advertising. A decline in the level of business activity of our
advertisers could have an adverse effect on our revenues and profit margins.
Because of the recent economic slowdown in the United States, many advertisers
are reducing advertising expenditures. The impact of this slowdown on our
business is difficult to predict, but it may result in further reductions in
purchases of advertising. If the current economic slowdown continues or worsens,
our results of operations may be adversely affected.

THE OCCURRENCE OF EXTRAORDINARY EVENTS, SUCH AS THE ATTACKS ON THE WORLD TRADE
CENTER AND THE PENTAGON, MAY SUBSTANTIALLY DECREASE THE USE OF AND DEMAND FOR
ADVERTISING, WHICH MAY DECREASE OUR REVENUES.

     On September 11, 2001, terrorists attacked the World Trade Center in New
York City and the Pentagon outside of Washington, D.C. In addition to the tragic
loss of life and suffering occasioned by these attacks, there has been
infrastructure damage and a nationwide disruption of commercial and leisure
activities. Following the terrorist attacks, the already weak advertising market
worsened, resulting in lower advertising sales revenues for television network
and cable programming businesses nationwide. The occurrence of future terrorist
attacks cannot be predicted, and their occurrence can be expected to further
negatively affect the United States economy generally, and specifically the
market for television advertising.

RISKS RELATING TO THE NOTES

OUR SUBSTANTIAL INDEBTEDNESS AND PREFERRED STOCK COULD IMPAIR OUR FINANCIAL
CONDITION AND OUR ABILITY TO FULFILL OUR OBLIGATIONS UNDER OUR INDEBTEDNESS AND
PREFERRED STOCK.

     We have substantial debt and redeemable preferred stock. As of December 31,
2001 we had total indebtedness of $529.2 million and redeemable preferred stock
with an aggregate liquidation preference of approximately $1,195.8 million
($1,090.2 million of which is exchangeable, subject to certain restrictions,
into subordinated indebtedness ranking equally with the notes). After giving
effect to the Refinancing, as of December 31, 2001 we would have had total
indebtedness of $837.5 million and redeemable preferred stock with an aggregate
liquidation preference of approximately $912.6 million ($807.0 million of which
is exchangeable, subject to certain restrictions, into subordinated indebtedness
ranking equally with the notes). Our interest expense was $50.3 million for the
year ended December 31, 1999, $48.0 million for the year ended December 31, 2000
and $49.7 million for the year ended December 31, 2001. Subject to the
restrictions contained in the indenture governing the notes and the restrictions
in the agreement governing the senior credit facility, the indenture governing
the 10 3/4% notes, the terms of our existing preferred stock and the indentures
governing the indebtedness for which the preferred stock may be exchanged, we
may incur additional indebtedness. The level of our indebtedness and redeemable
preferred stock could have important consequences to us and you.

     For example, our substantial indebtedness and redeemable preferred stock
could:

     - make it more difficult for us to satisfy our obligations with respect to
       the notes;

     - require us to dedicate a substantial portion of our cash flow from
       operations to payments on our debt and preferred stock, thereby reducing
       the availability of our cash flow to fund working capital, capital
       expenditures and other general corporate requirements;

     - limit our flexibility in planning for, or reacting to, changes in our
       business and the industry in which we operate;

     - place us at a competitive disadvantage compared to our competitors that
       have proportionately less debt and preferred stock;

     - make it more difficult for us to borrow money for working capital,
       capital expenditures, acquisitions or other purposes; and

     - expose us to the risk of increased interest rates with respect to that
       portion of our debt which has a variable rate of interest.

                                        21


     If we are unable to meet our indebtedness and preferred stock obligations,
we could be forced to restructure or refinance our indebtedness, seek additional
equity capital or sell assets. We may be unable to obtain financing or sell
assets on satisfactory terms, or at all.

THE TERMS OF OUR INDEBTEDNESS AND OUR PREFERRED STOCK IMPOSE SIGNIFICANT
RESTRICTIONS ON OUR BUSINESS.

     The indenture governing the notes, the agreement governing our senior
credit facility, the indenture governing the 10 3/4% notes and the terms of our
existing preferred stock and the indentures governing the indebtedness for which
the preferred stock may be exchanged contain various covenants that limit our
ability to:

     - incur additional debt;

     - engage in transactions with affiliates;

     - incur liens;

     - make restricted payments, including dividends;

     - enter into business combinations and asset sale transactions; and

     - make investments.

     These restrictions could limit our ability to obtain future financing, make
acquisitions or needed capital expenditures, withstand a future downturn in our
business or the economy in general, conduct operations or otherwise take
advantage of business opportunities that may arise. Our senior credit facility
also requires us to maintain specified financial ratios. We cannot assure you
that we will be able to meet these financial ratios or covenants or that we will
be able to obtain waivers from the lenders under the senior credit facility if
we are unable to meet these ratios or covenants. Our ability to meet these
covenants and financial ratios in the future can be affected by events beyond
our control, such as general economic conditions. Our failure to observe any
covenants or maintain any applicable financial ratios and to obtain waivers from
the lenders would prevent us from borrowing additional amounts under the senior
credit facility and could result in a default under that facility, which could
cause the indebtedness outstanding under the facility, and by reason of
cross-default provisions, the notes and any other indebtedness we may then have,
to become immediately due and payable. If we were unable to repay those amounts,
the lenders under the senior credit facility could initiate a bankruptcy
proceeding or liquidation proceeding or proceed against the collateral granted
to them to secure that indebtedness. If the lenders under the senior credit
facility were to accelerate the repayment of outstanding borrowings, we might
not have sufficient assets to repay our indebtedness, including the notes.

WE DEPEND UPON OUR SUBSIDIARIES' CASH FLOW TO MEET OUR OBLIGATIONS, AND
THEREFORE OUR ABILITY TO PAY INTEREST AND PRINCIPAL ON THE NOTES MAY BE
ADVERSELY AFFECTED BY RESTRICTIONS THAT APPLY TO OUR SUBSIDIARIES UNDER THE
TERMS OF THEIR INDEBTEDNESS.

     Our operations are conducted through our direct and indirect wholly-owned
subsidiaries, which will guarantee the notes, jointly and severally, on a senior
subordinated unsecured basis. We do not have significant assets other than our
equity in our subsidiaries, and we depend upon the cash flow of our subsidiaries
to meet our own obligations. Accordingly, our ability to make interest and
principal payments when due to holders of the notes and our ability to purchase
the notes upon a change of control depend upon the receipt of sufficient funds
from our subsidiaries, which may be restricted by the terms of their senior
indebtedness. As a result, the notes and the subsidiary guarantees effectively
are subordinated to all existing and future senior indebtedness and other
liabilities and commitments of the guarantors.

YOUR RIGHT TO RECEIVE PAYMENTS ON THE NOTES AND UNDER THE SUBSIDIARY GUARANTEES
IS JUNIOR TO OUR SENIOR DEBT AND THAT OF THE SUBSIDIARY GUARANTORS.

     The notes are junior in right of payment to all of our existing and future
senior debt, including obligations under our senior credit facility. Each
guarantee of the notes is subordinate to all existing and future senior debt of
the respective guarantors, including the guarantors' obligations under the
senior credit facility. In the event of our bankruptcy, liquidation or
reorganization, or the bankruptcy, liquidation or reorganization of a guarantor,
our assets, or the assets of the guarantor, will be available to pay obligations
on the notes or under the applicable guarantee only after all senior debt has
been paid in full, and then such payments will be made
                                        22


only on a pro rata basis with payments made to holders of our other subordinated
debt, including holders of the 10 3/4% notes, and we cannot assure you that we
or the guarantors will have sufficient assets to pay amounts due on the notes.
The lenders under our senior credit facility have a first priority security
interest covering substantially all of our assets and the assets of the
guarantors. The subordination provisions of the indenture governing the notes
also provide that we can make no payment to you during the continuance of
payment defaults on our senior debt, and payments to you may be suspended for a
period of up to 179 days if a nonpayment default exists under our senior debt.
See "Description of Notes -- Ranking" for additional information. As of December
31, 2001, after giving effect to the Refinancing, we would have had senior debt
in an aggregate principal amount of approximately $329.2 million (excluding
unused commitments of $30.0 million under our senior credit facility) and the
guarantors would have guarantees with respect to senior debt in an aggregate
principal amount of $269.5 million (excluding unused commitments of $30.0
million under our senior credit facility, and consisting entirely of guarantees
of a portion of our borrowings under our senior credit facility). We may incur
additional debt from time to time, subject to certain restrictions, some or all
of which may be senior debt.

WE MAY BE UNABLE TO REPURCHASE THE NOTES IF WE EXPERIENCE A CHANGE OF CONTROL.

     If we were to experience a change of control, the indenture governing the
notes requires us to offer to purchase all of the outstanding notes at a price
equal to 101% of their principal amount, plus accrued interest, or 101% of their
accreted value, as the case may be. Our senior credit facility restricts our
ability to repurchase notes, including the repurchase of notes under a change of
control offer. Our failure to repay holders tendering notes upon a change of
control will result in an event of default under the notes. A change of control,
or an event of default under the notes, may also result in an event of default
under our senior credit facility and the indenture governing the 10 3/4% notes,
which may result in the acceleration of the indebtedness under that facility and
that indenture requiring us to repay that indebtedness immediately. Further, the
terms of our 10 3/4% notes and our outstanding preferred stock require us to
offer to purchase all of the notes and preferred shares then outstanding at 101%
of the principal amount thereof, in the case of the 10 3/4% notes, plus accrued
interest, and 101% or 10 0% (as applicable) of the then effective liquidation
preference of those preferred shares, plus accumulated and unpaid dividends. The
indentures governing the debentures for which most of the preferred stock may be
exchanged have similar change of control provisions. If a change of control were
to occur, we cannot assure you that we would have sufficient funds to repay debt
outstanding under the new credit facility or to purchase the notes or any other
securities which we would be required to offer to purchase. We expect that we
would require additional financing from third parties to fund any such
purchases, and we cannot assure you that we would be able to obtain financing on
satisfactory terms or at all.

A COURT MAY VOID THE GUARANTEES OF THE NOTES OR SUBORDINATE THE GUARANTEES TO
OTHER OBLIGATIONS OF THE SUBSIDIARY GUARANTORS.

     Although standards may vary depending on the applicable law, generally
under U.S. federal bankruptcy law and comparable provisions of state fraudulent
transfer laws, if a court were to find that, among other things, at the time any
guarantor of the notes incurred the debt evidenced by its guarantee of the
notes, the guarantor:

     either:

     - was insolvent or rendered insolvent by reason of the incurrence of the
       guarantee;

     - was engaged or about to engage in a business or transaction for which
       that guarantor's remaining assets constituted unreasonably small capital;

     - was a defendant in an action for money damages, or had a judgment for
       money damages docketed against it, if in either case, after a final
       judgment, the judgment were unsatisfied; or

     - intended to incur, or believed that it would incur, debts beyond its
       ability to pay such debts as they mature;

     and

     - that guarantor received less than reasonable equivalent value or fair
       consideration for the incurrence of its guarantee; or

                                        23


     - incurred the guarantee or made related distributions or payments with the
       intent of hindering, delaying or defrauding creditors,

there is a risk that the guarantee of that guarantor could be voided by the
court, or claims by holders of the notes under the guarantee could be
subordinated to other debts of that guarantor. In addition, any payment by the
guarantor under its guarantee could be required to be returned to that
guarantor, or to a fund for the benefit of the creditors of that guarantor.

     The measures of insolvency for purposes of the foregoing considerations
will vary depending upon the law applied in any proceeding. Generally, however,
a guarantor of the notes would be considered insolvent if:

     - the sum of its debts, including contingent liabilities, was greater than
       the fair value of all of its assets at a fair valuation; or

     - the present fair value of its assets was less than the amount that would
       be required to pay its probable liability on its existing debts,
       including contingent liabilities, as they become absolute and mature; or

     - it could not pay its debts as they become due.

THERE IS NO PUBLIC TRADING MARKET FOR THE NOTES.

     The notes are a new issue of securities for which there is currently no
established trading market. We do not intend to have the notes listed on a
national securities exchange, although we expect that they will be eligible for
trading in the PORTAL market. In addition, although the initial purchasers of
the notes have advised us that they currently intend to make a market in the
notes, they are not obligated to do so, and may discontinue market making
activities at any time without notice. If an active market does not develop or
is not maintained, the market price and liquidity of the notes may be adversely
affected. We cannot assure you as to the liquidity of the market for the notes
or the prices at which you may be able to sell the notes.

     In addition, any holder of original notes who tenders in the exchange offer
for the purpose of participating in a distribution of the new notes may be
deemed to have received restricted securities, and if so, will be required to
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any resale transaction.

YOU WILL BE REQUIRED TO INCLUDE ORIGINAL ISSUE DISCOUNT WITH RESPECT TO THE
NOTES IN GROSS INCOME FOR U.S. FEDERAL INCOME TAX PURPOSES EVEN IF WE DO NOT PAY
CASH INTEREST.

     The original notes were issued at a substantial discount from their
principal amount at maturity. Although cash interest will not accrue on the
notes before January 15, 2006, and there will be no periodic payments of cash
interest on the notes before January 15, 2006, original issue discount (the
difference between the stated redemption price at maturity and the issue price
of the notes) will accrue from the issue date of the original notes.
Consequently, holders of the notes generally will be required to include amounts
in gross income for United States federal income tax purposes in advance of
their receipt of the cash payments to which the income is attributable. Such
amounts in the aggregate will be equal to the difference between the stated
redemption price at maturity (inclusive of stated interest on the notes) and the
issue price of the notes. See "Important U.S. Federal Income Tax
Considerations."

     If a bankruptcy case is commenced by or against us under the United States
Bankruptcy Code after the issuance of the notes, the claim of a holder of the
notes may be limited to an amount equal to the sum of (1) the initial offering
price and (2) that portion of the original issue discount which is not deemed to
constitute "unmatured interest" for purposes of the Bankruptcy Code. Any
original issue discount that was not amortized as of the date of any such
bankruptcy filing would constitute "unmatured interest." To the extent that the
Bankruptcy Code differs from the Internal Revenue Code in determining the method
of amortization of original issue discount, a holder of notes may realize
taxable gain or loss on payment of such holder's claim in bankruptcy.

YOUR ORIGINAL NOTES WILL NOT BE ACCEPTED FOR EXCHANGE IF YOU FAIL TO FOLLOW THE
EXCHANGE OFFER PROCEDURES.

     We will issue new notes under this exchange offer only after a timely
receipt of your original notes, a properly completed and duly executed Letter of
Transmittal and all other required documents. Therefore, if you want to tender
your original notes, please allow sufficient time to ensure timely delivery. If
we do not
                                        24


receive your original notes, Letter of Transmittal and other required documents
by the expiration date of the exchange offer, we will not accept your original
notes for exchange. We are under no duty to give notification of defects or
irregularities with respect to the tenders of original notes for exchange. If
there are defects or irregularities with respect to your tender of original
notes, we will not accept your original notes for exchange.

IF YOU DO NOT EXCHANGE YOUR ORIGINAL NOTES, YOUR ORIGINAL NOTES WILL CONTINUE TO
BE SUBJECT TO THE EXISTING TRANSFER RESTRICTIONS AND YOU MAY BE UNABLE TO SELL
YOUR ORIGINAL NOTES.

     We did not register the original notes, nor do we intend to do so following
the exchange offer. Original notes that are not tendered will therefore continue
to be subject to the existing transfer restrictions and may be transferred only
in limited circumstances under the securities laws. If you do not exchange your
original notes, you will lose your right to have your original notes registered
under the federal securities laws. As a result, if you hold original notes after
the exchange offer, you may be unable to sell your original notes.

                      RATIOS OF EARNINGS TO FIXED CHARGES

     The following are the consolidated ratios of earnings to fixed charges for
each of the years in the five-year period ended December 31, 2001.



                                              YEAR ENDED DECEMBER 31,
                              --------------------------------------------------------
                                1997       1998        1999        2000        2001
                              --------   ---------   ---------   ---------   ---------
                                                   (IN THOUSANDS)
                                                              
Ratio of earnings to fixed
  charges...................        --          --          --          --          --
Deficiency in earnings to
  cover fixed charges.......  $(57,953)  $(113,586)  $(215,369)  $(177,866)  $(193,759)


     For purposes of the ratios of earnings to fixed charges, earnings are
defined as income (loss) from continuing operations before income taxes,
extraordinary item and fixed charges. Fixed charges consist of interest expense,
amortization of deferred financing costs and the component of operating lease
expense which we believe represents an appropriate interest factor. A statement
setting forth the computation of the ratio of earnings to fixed charges is filed
as an exhibit to the Registration Statement of which this prospectus is a part.

                                USE OF PROCEEDS

     This exchange offer is intended to satisfy certain of our obligations under
the registration rights agreement. We will not receive any cash proceeds from
the issuance of the new notes. In consideration for issuing the new notes
contemplated in this prospectus, we will receive original notes in like
principal amount at maturity, the form and terms of which are the same as the
form and terms of the new notes, except as otherwise described in this
prospectus. The original notes surrendered in exchange for new notes will be
retired and canceled.

     Accordingly, no additional debt will result from the exchange. We have
agreed to bear the expenses of the exchange offer. The indebtedness under our
12 1/2% exchange debentures due 2006 that were issued in exchange for
outstanding shares of our 12 1/2% exchangeable preferred stock, which exchange
debentures were redeemed in connection with the Refinancing, would have matured
on October 31, 2006 and bore interest at a fixed rate of 12 1/2%.

                                        25


                                 CAPITALIZATION

     The following table sets forth (1) our audited capitalization as of
December 31, 2001 on a historical basis and (2) our unaudited capitalization as
of December 31, 2001 as adjusted to give effect to the Refinancing as if these
events had occurred on December 31, 2001. This table should be read in
conjunction with the information contained in our consolidated financial
statements and the notes appearing elsewhere in this prospectus.



                                                                AT DECEMBER 31, 2001
                                                            ----------------------------
                                                              ACTUAL      AS ADJUSTED(1)
                                                            -----------   --------------
                                                                   (IN THOUSANDS)
                                                                    
Revolving facility........................................  $    25,000    $    25,000
Term A facility...........................................       20,000         20,000
Term B facility...........................................      283,575        283,575
10 3/4% Notes.............................................      200,000        200,000
12 1/4% Senior Subordinated Discount Notes(1).............           --        308,338
Other long-term debt......................................          605            605
                                                            -----------    -----------
Total debt................................................      529,180        837,518
                                                            -----------    -----------
12 1/2% exchangeable preferred stock......................      279,890             --
13 1/4% exchangeable preferred stock......................      310,068        310,068
Series A convertible preferred stock......................      103,140        103,140
Series B convertible preferred stock......................      471,062        471,062
                                                            -----------    -----------
          Total redeemable preferred stock................    1,164,160        884,270
                                                            -----------    -----------
          Total debt and redeemable preferred stock.......    1,693,340      1,721,788
                                                            -----------    -----------
Class A common stock......................................           56             56
Class B common stock......................................            8              8
Common stock warrants and call option.....................       68,384         68,384
Stock subscription notes receivable.......................       (1,088)        (1,088)
Additional paid-in capital................................      512,194        512,194
Deferred stock option compensation........................       (6,537)        (6,537)
Accumulated other comprehensive loss......................       (1,350)        (1,350)
Accumulated deficit.......................................   (1,109,710)    (1,128,470)
                                                            -----------    -----------
          Total stockholders' deficit.....................     (538,043)      (556,803)
                                                            -----------    -----------
          Total capitalization............................  $ 1,155,297    $ 1,164,985
                                                            ===========    ===========


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

(1) The notes are reflected above at a discount to their aggregate principal
    amounts at maturity. The notes will accrete at a rate of 12 1/4% per year to
    an aggregate principal amount of $496,263,000 by January 15, 2006.
    Thereafter, the notes will accrue cash interest at a rate of 12 1/4% per
    year.

                                        26


                 SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA

     The following table sets forth our consolidated financial data as of and
for the years ended December 31, 1997, 1998, 1999, 2000 and 2001 and as adjusted
at December 31, 2001. The data as of and for the years ended December 31, 1997,
1998, 1999, 2000 and 2001 has been derived from our audited consolidated
financial statements. The audited consolidated financial statements for the
years ended December 31, 1999, 2000 and 2001 are included elsewhere in this
prospectus. This financial data should be read in conjunction with the
information contained in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and our consolidated audited financial
statements, including the related notes.



                                                                YEAR ENDED DECEMBER 31,
                                               ---------------------------------------------------------
                                                 1997        1998        1999        2000        2001
                                               ---------   ---------   ---------   ---------   ---------
                                                         (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                                                                
STATEMENT OF OPERATIONS DATA:
Revenues.....................................  $  88,421   $ 134,196   $ 248,362   $ 315,936   $ 308,806
Less: agency commissions.....................    (10,537)    (16,908)    (34,182)    (44,044)    (43,480)
                                               ---------   ---------   ---------   ---------   ---------
Net revenues.................................     77,884     117,288     214,180     271,892     265,326
Expenses:
  Programming and broadcast operations.......     13,289      26,717      33,139      38,633      42,457
  Program rights amortization................        704      31,422      91,799     100,324      84,808
  Selling, general and administrative........     33,751     118,559     135,063     137,804     120,000
  Time brokerage and affiliation fees........     16,961      15,699      14,257       5,259       3,621
  Stock-based compensation(1)................      3,370      10,413      16,814      13,866      10,161
  Compensation associated with Paxson Radio
    asset sales(2)...........................      9,700          --          --          --          --
  Adjustment of programming to net realizable
    value....................................         --          --      70,499      24,400      66,992
  Restructuring charge related to Joint Sales
    Agreements...............................         --          --          --       5,760      (1,229)
  Depreciation and amortization..............     22,044      50,009      77,860      96,881      96,248
                                               ---------   ---------   ---------   ---------   ---------
    Total operating expenses.................     99,819     252,819     439,431     422,927     423,058
                                               ---------   ---------   ---------   ---------   ---------
Operating loss...............................    (21,935)   (135,531)   (225,251)   (151,035)   (157,732)
Other income (expense):
  Interest expense...........................    (37,728)    (41,906)    (50,286)    (47,973)    (49,722)
  Interest income............................      9,495      14,992       8,570      14,022       4,538
  Other expenses, net........................     (5,722)     (2,744)     (7,855)     (4,426)     (4,049)
  Gains on modification of program rights
    obligations..............................         --          --          --      10,221         932
  Gains on sale of Travel Channel and other
    broadcast assets.........................         --      51,603      59,453       1,325      12,274
  Equity in loss of unconsolidated
    investment...............................     (2,493)    (13,273)     (2,260)       (539)         --
                                               ---------   ---------   ---------   ---------   ---------
Loss from continuing operations before income
  taxes and extraordinary item...............    (58,383)   (126,859)   (217,629)   (178,405)   (193,759)
Income tax benefit (provision)...............     21,879      37,389      57,257        (120)       (120)
                                               ---------   ---------   ---------   ---------   ---------
Loss from continuing operations before
  extraordinary item.........................    (36,504)    (89,470)   (160,372)   (178,525)   (193,879)
Gain on disposal of discontinued operations,
  net of applicable income taxes(3)..........    251,193       1,182          --          --          --
                                               ---------   ---------   ---------   ---------   ---------
Loss before extraordinary item...............    214,689     (88,288)   (160,372)   (178,525)   (193,879)
Extraordinary item(4)........................         --          --          --          --      (9,903)
                                               ---------   ---------   ---------   ---------   ---------
Net loss.....................................    214,689     (88,288)   (160,372)   (178,525)   (203,782)
Dividends, accretion and beneficial
  conversion feature on preferred stock(5)...    (26,277)    (49,667)   (154,207)   (212,804)   (146,656)
                                               ---------   ---------   ---------   ---------   ---------
Net income (loss) available to common
  stockholders...............................  $ 188,412   $(137,955)  $(314,579)  $(391,329)  $(350,438)
                                               =========   =========   =========   =========   =========
Basic and diluted earnings (loss) per
  share(6):
  Continuing operations......................  $   (1.17)  $   (2.31)  $   (5.10)  $   (6.16)  $   (5.28)
  Discontinued operations....................       4.67        0.02          --          --          --
  Extraordinary item.........................         --          --          --          --       (0.15)
  Net income (loss)..........................       3.50       (2.29)      (5.10)      (6.16)      (5.43)
  Weighted average shares
    outstanding -- basic and diluted.........     53,808      60,360      61,738      63,515      64,509


                                        27




                                                                YEAR ENDED DECEMBER 31,
                                               ---------------------------------------------------------
                                                 1997        1998        1999        2000        2001
                                               ---------   ---------   ---------   ---------   ---------
                                                         (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                                                                
OTHER DATA:
Cash flows used in operating activities......  $ (76,041)  $(150,580)  $(181,808)  $ (76,036)  $ (60,772)
Cash flows (used in) provided by investing
  activities.................................    (21,772)   (168,486)   (160,508)    (12,784)     48,477
Cash flows provided by financing
  activities.................................    118,705     285,865     418,065      14,994      44,790
Adjusted EBITDA(7)...........................     30,140     (59,410)    (45,821)     (4,869)     18,061
Program rights payments and deposits.........     37,485      62,076     125,916     128,288     130,566
Payments for cable distribution rights.......         --      19,905      30,713      10,727      14,418
Capital expenditures.........................     44,474      82,922      34,609      25,110      35,213
Ratio of earnings to fixed charges(8)........         --          --          --          --          --
Deficiency in earnings to cover fixed
  charges(8).................................    (57,953)   (113,586)   (215,369)   (177,866)   (193,759)
Ratio of earnings to combined fixed charges
  and preferred stock dividends(8)...........         --          --          --          --          --
Deficiency in earnings to cover combined
  fixed charges and preferred stock
  dividends(8)...............................    (84,230)   (163,253)   (369,576)   (390,670)   (340,415)




                                                  AT DECEMBER 31,                           AT DECEMBER 31, 2001
                           --------------------------------------------------------------   --------------------
                              1997         1998         1999         2000         2001         AS ADJUSTED(9)
                           ----------   ----------   ----------   ----------   ----------   --------------------
                                                                                                (UNAUDITED)
                                                                          
BALANCE SHEET DATA:
Working capital..........  $   86,944   $    1,807   $  237,855   $   74,298   $   57,888        $   57,888
Total assets.............   1,057,113    1,542,786    1,690,087    1,526,047    1,383,675         1,393,363
Total debt...............     350,754      373,998      388,421      405,476      529,180           837,518
Mandatorily redeemable
  preferred stock........     210,987      521,401      949,807    1,080,389    1,164,160           884,270
Total stockholders'
  equity (deficit).......     367,744      247,673       96,721     (199,789)    (538,043)         (556,803)


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

(1) Stock-based compensation represents a non-cash charge associated with the
    granting of stock options to employees. See "Management's Discussion and
    Analysis of Financial Condition and Results of Operations."

(2) Bonuses paid to certain members of our management team in connection with
    their efforts in assimilating, operating and arranging for the sale of our
    radio stations and properties in 1997.

(3) Includes gains on the 1997 disposal of our former Network-Affiliated
    Television and Paxson Radio segments of $254.7 million in 1997 and $1.2
    million in 1998, net of applicable income taxes.

(4) Extraordinary charge related to early extinguishment of debt in connection
    with our July 2001 refinancing.

(5) Dividends, accretion and beneficial conversion feature on preferred stock
    include non-cash dividends, accretion and the beneficial conversion feature
    on our mandatorily redeemable securities of $26.3 million in 1997, $49.7
    million in 1998, $154.0 million in 1999, $205.7 million in 2000 and $142.9
    million in 2001.

(6) Because of losses from continuing operations, the effect of stock options
    and warrants is antidilutive. Accordingly, our presentation of diluted
    earnings per share is the same as that of basic earnings per share.

(7) "Adjusted EBITDA" is defined as operating loss plus depreciation,
    amortization, stock-based compensation, programming net realizable value
    adjustments, restructuring and other one-time charges, and time brokerage
    and affiliation fees. Adjusted EBITDA does not purport to represent cash
    provided by operating activities as reflected in the consolidated statements
    of cash flows, is not a measure of financial performance under generally
    accepted accounting principles, and should not be considered in isolation.
    Management believes the presentation of adjusted EBITDA is relevant and
    useful because adjusted EBITDA is a measurement industry analysts utilize
    when evaluating our operating performance. We also believe adjusted EBITDA
    enhances an investor's understanding of our financial condition, results of
    operations and cash flows because it measures our operating performance and
    cash flows, exclusive of interest and other non-operating and non-recurring
    items as well as non-cash charges for depreciation, amortization and stock
    compensation. In evaluating adjusted EBITDA, investors should consider
    various factors including its relationship to our reported operating losses
    and cash flows from operating activities. We believe our adjusted EBITDA
    trends reflect year over year improvements in our operating performance and
    cash flows since launching the PAX TV network. Investors should be aware
    that adjusted EBITDA may not be comparable to similarly titled measures
    presented by other companies and could be misleading unless all companies
    and analysts calculate such measures in the same manner. The funds depicted
    by adjusted EBITDA are not available for our discretionary use because of
    other commitments including but not limited to debt service under our debt
    facilities.

(8) For purposes of this calculation, earnings are defined as net income (loss)
    from continuing operations before income taxes, extraordinary item and fixed
    charges. Fixed charges consist of interest expense, amortization of deferred
    financing costs and the component of operating lease expense which we
    believe represents an appropriate interest factor.

(9) As adjusted to give effect to the Refinancing.

                                        28


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

GENERAL

     We are a network television broadcasting company which owns and operates
the largest broadcast television station group in the U.S., as measured by the
number of television households in the markets our stations serve. We currently
own and operate 65 broadcast television stations (including three stations we
operate under time brokerage agreements), which reach all of the top 20 U.S.
markets and 41 of the top 50 U.S. markets. We operate PAX TV, a network that
provides family entertainment programming seven days per week and reaches
approximately 85% of prime time television households in the U.S. through our
broadcast television station group, and under distribution arrangements with
cable and satellite distribution systems and our affiliates.

     We were founded in 1991 by Mr. Paxson, who remains our Chairman and
controlling stockholder. We began by purchasing radio and television stations,
and grew to become Florida's largest radio station group, while also owning two
network-affiliated television stations and other television stations that
carried principally infomercials and other paid programming. In 1997, we sold
our radio station group and our network-affiliated television stations to
concentrate on building our owned and operated television station group. We used
the proceeds from the sale of our radio station group and network-affiliated
television stations to acquire television stations and build the PAX TV network.
Since commencing our television operations in 1994, we have established the
largest owned and operated broadcast television station group in the U.S., as
measured by the number of television households in the markets our stations
serve. We launched PAX TV on August 31, 1998, and are now in our fourth network
programming season.

     In September 1999, NBC invested $415 million in our company. We have also
entered into a number of agreements with NBC that are intended to strengthen our
business. Under these agreements, NBC sells our network spot advertising and
performs our network research and sales marketing functions. We have also
entered into JSAs with NBC with respect to all of our stations serving markets
also served by an NBC owned and operated station, and with many independently
owned NBC affiliated stations serving markets also served by our stations.
During the year ended December 31, 2001, we paid or accrued amounts due to NBC
totaling approximately $19.1 million for commission compensation and cost
reimbursements incurred under our agreements with NBC.

     In December 2001, we commenced a binding arbitration proceeding against NBC
in which we asserted that NBC has breached its agreements with us and has
breached its fiduciary duty to us and to our shareholders. We also made two
filings with the FCC, one of which requests a declaratory ruling as to whether
conduct by NBC, including NBC's influence and apparent control over certain
members of our board of directors selected by NBC (all of whom have since
resigned from our board), has caused NBC to have an attributable interest in us
in violation of FCC rules or has infringed upon our rights as an FCC license
holder. The second FCC filing seeks to deny FCC approval of NBC's acquisition of
the Telemundo Group's television stations. The hearing in the arbitration
proceeding is currently scheduled to occur in April 2002, and we expect the
arbitrator to render a decision by the end of May 2002. Should the outcome of
our arbitration proceeding against NBC or our FCC filing seeking a declaratory
ruling as to whether NBC has an attributable interest in our stations require
the unwinding or termination of some or all of these operating relationships, or
should NBC or the NBC affiliates elect not to renew the agreements under which
these operating relationships have been implemented, we could be required to
incur significant costs to resume performing the advertising sales and other
operating functions currently performed by NBC and our JSA partners or to
transfer performance of these functions to another broadcast television station
operator, which could have a material adverse effect upon us.

     We derive our revenues from the sale of network spot advertising time,
network long form paid programming and station advertising:

     - Network spot advertising revenue.  We sell commercial air time to
       advertisers who want to reach the entire nationwide PAX TV viewing
       audience with a single advertisement. Most of our network advertising is
       sold under advance, or "upfront," commitments to purchase advertising
       time, which are obtained before the beginning of our PAX TV programming
       season. Network advertising rates are significantly affected by audience
       ratings and our ability to reach audience demographics that are
                                        29


       desirable to advertisers. Higher ratings generally will enable us to
       charge higher rates to advertisers. We pay commissions of up to 15% of
       gross revenue to advertising agencies for network advertising. Our
       network advertising sales represented approximately 33% of our revenue
       during the year ended December 31, 2001.

     - Network long form paid programming.  We sell air time for long form paid
       programming, consisting primarily of infomercials, during broadcasting
       hours when we are not airing PAX TV. We pay commissions of up to 15% of
       gross revenue to advertising agencies for long form paid programming. Our
       network long form paid programming represented approximately 33% of our
       revenue during the year ended December 31, 2001.

     - Station advertising revenue.  We sell commercial air time to advertisers
       who want to reach the viewing audience in specific geographic markets in
       which our stations operate. These advertisers may be local businesses or
       regional or national advertisers who want to target their advertising in
       these markets. Station advertising rates are affected by ratings and
       local market conditions. We pay commissions of up to 15% of gross revenue
       to advertising agencies for station advertising sales. Our station
       advertising sales represented approximately 34% of our revenue during the
       year ended December 31, 2001. Included in station advertising revenue is
       long form paid programming sold locally or nationally which represented
       approximately 16% of our revenue during the year ended December 31, 2001.

     Our revenue mix has changed since we launched PAX TV in 1998. The
percentage mix of our long form paid programming has declined from more than 90%
in 1997 to 49% (combined network and station long form) in the year ended
December 31, 2001 due to the increase in spot advertising sales following the
launch of PAX TV. Long-form paid programming, however, continues to represent a
significant portion of our revenues.

     Starting in the fourth quarter of 1999, we began entering into JSAs with
owners of broadcast stations in markets served by our stations. After
implementation of a JSA, we no longer employ our own on-site station sales
staff. The JSA partner provides station spot advertising sales management and
representation for our stations and we integrate and co-locate our station
operations with those of our JSA partners. To date, we have entered into JSAs
for 55 of our television stations.

     Our primary operating expenses include selling, general and administrative
expenses, depreciation and amortization expenses, programming expenses, employee
compensation and costs associated with cable and satellite distribution, ratings
services and promotional advertising. Programming amortization is a significant
expense and is affected significantly by several factors, including the mix of
syndicated versus lower cost original programming as well as the frequency with
which programs are aired. As we acquire a more complete library of lower cost
original programming to replace our syndicated programming, our programming
amortization expense should decline.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

     The discussion and analysis of our financial condition and results of
operations is based on our consolidated financial statements, which have been
prepared in accordance with U.S. generally accepted accounting principles. The
preparation of financial statements requires us to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities and the reported amounts of
revenues and expenses during the reporting period. We believe the most
significant estimates involved in preparing our financial statements include
estimates related to the net realizable value of our programming rights, barter
revenue recognition, estimates used in accounting for leases and estimates
related to the impairment of long-lived assets, FCC licenses and goodwill. We
base our estimates on historical experience and various other assumptions we
believe are reasonable. Actual results could differ from those estimates.

     We consider the accounting policies described below to be critical since
they have the greatest impact on our reported financial condition and results of
operations and they require significant estimates and judgments.

     We carry programming rights assets on our balance sheet at the lower of
unamortized cost or net realizable value. We periodically evaluate the net
realizable value of our program rights based on anticipated future usage of
programming and the anticipated future ratings and related advertising revenues.
We evaluate the net realizable value of our programming rights by aggregating
the program costs and related estimated future revenues for each programming
daypart. If estimated future revenues are insufficient to recover the
                                        30


unamortized cost of the programming assets in each daypart, we record an
adjustment to write-down the value of our assets to net realizable value. We
also evaluate whether future revenues will be sufficient to recover the cost of
programs we are committed to purchase in the future, and if estimated future
revenues are insufficient, we accrue a loss related to our programming
commitments. Our estimates of future advertising revenues are based upon our
actual revenues generated currently, adjusted for estimated revenue growth
assumptions. If market conditions were to deteriorate, we may not achieve our
estimated future revenues, which could result in future write-downs to net
realizable value and accrued losses on programming commitments.

     We have entered into agreements with satellite television providers and
certain cable operators for carriage on their systems in exchange for
advertising spots on our network. We have recorded satellite and cable
distribution rights related to these agreements based on the estimated value of
the advertising credits at prevailing unit rates. The satellite and cable assets
are amortized over the terms of the agreements. Deferred revenue under these
barter arrangements is recognized when the spots are aired on our network. Had
we used other estimates, our revenues recognized under these agreements may have
been different.

     We have made judgments and estimates in connection with some of our leasing
transactions regarding the estimated useful lives of the assets subject to lease
as well as the discount rates used to estimate the present value of future lease
payments. These judgments and estimates have led us to conclude that these
leases should be accounted for as operating leases. Had we used different
judgments and estimates, these leases may have been classified as capital
leases. The terms of our senior credit facility, senior subordinated note
indentures and outstanding preferred stock restrict our ability to incur
indebtedness, including our ability to enter into capital leases.

     We review our long-lived assets, FCC licenses and goodwill for possible
impairment whenever events or changes in circumstances indicate that, based on
estimated undiscounted future cash flows, the carrying amount of the assets may
not be fully recoverable. If our analysis indicates that a possible impairment
exists, we are required to then estimate the fair value of the asset determined
either by third party appraisal or estimated discounted future cash flows. As
described below under "New Accounting Pronouncements", effective January 1,
2002, we are required at least annually to test for impairment of our FCC
licenses and goodwill. We believe that we have made reasonable estimates and
judgments in determining whether our long-lived assets, FCC licenses and
goodwill have been impaired. If, however, there were a material change in our
determination of fair values or if there were a material change in the
conditions or circumstances influencing fair value, we could be required to
recognize an impairment charge. In addition, it is possible that the estimated
life of certain long-lived assets will be reduced significantly in the near term
because of the anticipated industry migration from analog to digital
broadcasting. If and when we become aware of such a reduction of useful lives,
we will adjust depreciation expense prospectively to ensure assets are fully
depreciated on migration.

RESULTS OF OPERATIONS

     The following table sets forth net revenues, the components of operating
expenses with percentages of net revenues, and other operating data for the
periods presented:



                                                                    YEARS ENDED DECEMBER 31,
                                                   ----------------------------------------------------------
                                                     2001        %       2000        %       1999        %
                                                   ---------   -----   ---------   -----   ---------   ------
                                                                                     
REVENUES.........................................  $ 308,806           $ 315,936           $ 248,362
Less agency commissions..........................    (43,480)            (44,044)            (34,182)
                                                   ---------           ---------           ---------
Net revenues.....................................    265,326   100.0     271,892   100.0     214,180    100.0
Expenses:
Programming and broadcast operations.............     42,457    16.0      38,633    14.2      33,139     15.5
Program rights amortization......................     84,808    32.0     100,324    36.9      91,799     42.9
Selling, general and administrative..............    120,000    45.2     137,804    50.7     135,063     63.1
Time brokerage and affiliation fees..............      3,621     1.4       5,259     1.9      14,257      6.7
Stock-based compensation.........................     10,161     3.8      13,866     5.1      16,814      7.8
Adjustment of programming to net realizable
  value..........................................     66,992    25.2      24,400     9.0      70,499     32.9
Restructuring charge related to JSAs.............     (1,229)   (0.5)      5,760     2.1          --       --
Depreciation and amortization....................     96,248    36.3      96,881    35.6      77,860     36.3
                                                   ---------   -----   ---------   -----   ---------   ------
        Total operating expenses.................    423,058   159.4     422,927   155.5     439,431    205.2
                                                   ---------   -----   ---------   -----   ---------   ------
Operating loss...................................  $(157,732)  (59.4)  $(151,035)  (55.5)  $(225,251)  (105.2)
                                                   =========   =====   =========   =====   =========   ======


                                        31




                                                                    YEARS ENDED DECEMBER 31,
                                                   ----------------------------------------------------------
                                                     2001        %       2000        %       1999        %
                                                   ---------   -----   ---------   -----   ---------   ------
                                                                                     
OTHER DATA:
Cash flows used in operating activities..........  $ (60,772)          $ (76,036)          $(181,808)
Cash flows provided by (used in) investing
  activities.....................................     48,477             (12,784)           (160,508)
Cash flows provided by financing activities......     44,790              14,994             418,065
Adjusted EBITDA(1)...............................     18,061              (4,869)            (45,821)
Program rights payments and deposits.............    130,566             128,288             125,916
Payments for cable distribution rights...........     14,418              10,727              30,713
Capital expenditures.............................     35,213              25,110              34,609


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

(1) "Adjusted EBITDA" is defined as operating loss plus depreciation,
    amortization, stock-based compensation, programming net realizable value
    adjustments, restructuring and other one-time charges, and time brokerage
    and affiliation fees. Adjusted EBITDA does not purport to represent cash
    provided by operating activities as reflected in the consolidated statements
    of cash flows, is not a measure of financial performance under generally
    accepted accounting principles, and should not be considered in isolation.
    We believe the presentation of adjusted EBITDA is relevant and useful
    because adjusted EBITDA is a measurement industry analysts use when
    evaluating our operating performance. We also believe adjusted EBITDA
    enhances an investor's understanding of our financial condition, results of
    operations and cash flows because it measures our operating performance and
    cash flows, exclusive of interest and other non-operating and non-recurring
    items as well as non-cash charges for depreciation, amortization and stock
    compensation. In evaluating adjusted EBITDA, investors should consider
    various factors including its relationship to our reported operating losses
    and cash flows from operating activities. We believe our adjusted EBITDA
    trends reflect year over year improvements in our operating performance and
    cash flows since launching the PAX TV network. Investors should be aware
    that adjusted EBITDA may not be comparable to similarly titled measures
    presented by other companies and could be misleading unless all companies
    and analysts calculate such measures in the same manner. The funds depicted
    by adjusted EBITDA are not available for our discretionary use because of
    other commitments including but not limited to debt service under our debt
    facilities.

  YEARS ENDED DECEMBER 31, 2001 AND 2000

     Net revenues decreased 2.4% to $265.3 million for the year ended December
31, 2001 from $271.9 million for 2000. This decrease is primarily attributable
to lower station revenues offset in part by higher advertising revenues from the
PAX TV network. The decrease in television station revenues is primarily due to
reduced television spot advertising revenues in our local markets. The increase
in PAX TV network advertising revenues resulted from increases in ratings and
distribution of PAX TV and favorable results from our network sales agreement
with NBC. On an overall basis, network spot revenues increased approximately 11%
in 2001 resulting from a strong upfront market for the 2000/2001 broadcast
season, which ended in August 2001. However, due to a weaker upfront market for
the 2001/2002 broadcast season, network spot revenues declined approximately 8%
in the fourth quarter and we expect this trend to continue through the end of
the third quarter of 2002.

     Our revenues during the year ended December 31, 2001 were negatively
affected by the temporary loss of the broadcast signal of our New York
television station when our antenna, transmitter and other broadcast equipment
were destroyed upon the collapse of the World Trade Center on September 11,
2001. We are currently broadcasting from towers outside of Manhattan at
substantially lower height and power. We are evaluating several alternatives to
improve our signal through transmission from other locations, however we expect
it could take several years to replace the signal we enjoyed at the World Trade
Center location with a comparable signal. We believe the loss of a significant
portion of our over-the-air viewership in the New York market has had a negative
effect on our revenues as a result of lower ratings for the PAX TV network and
our station serving the New York market. We have property and business
interruption insurance coverage to mitigate the losses sustained. Insurance
recoveries will be recognized in the period they become probable of collection
and can be reasonably estimated. Because of the preliminary stages of our
insurance claim, we did not recognize any insurance recoveries in 2001 and are
unable at this point to estimate the amount of insurance proceeds we will
receive.

                                        32


     Programming and broadcast operations expenses were $42.5 million during the
year ended December 31, 2001 compared with $38.6 million in 2000. This increase
is primarily due to a one-time payment to terminate a tower lease and tower rent
expense from the sale of certain of our broadcast towers in the fourth quarter
of 2001 described below. Program rights amortization expense was $84.8 million
during the year ended December 31, 2001 compared with $100.3 million for 2000.
The decrease is due to syndicated programming changes and a greater mix of lower
cost original programming as compared with last year. Selling, general and
administrative expenses were $120.0 million during the year ended December 31,
2001 compared with $137.8 million for 2000. The decrease is primarily due to
lower selling costs and other cost cutting measures. Time brokerage and
affiliation fees were $3.6 million during the year ended December 31, 2001
compared with $5.3 million for 2000. This decrease is due to the completion of
acquisitions of stations we previously operated under time brokerage agreements.
Stock-based compensation expense was $10.2 million during the year ended
December 31, 2001 compared with $13.9 million for 2000. This decrease is due to
a reduction in options vesting in the year ended December 31, 2001 compared with
2000. The programming rights adjustment to net realizable value described below
was $67.0 million during the year ended December 31, 2001 compared with $24.4
million for 2000. Depreciation and amortization expense was $96.2 million during
the year ended December 31, 2001, which was comparable with $96.9 million for
2000. We expect our amortization expense to decrease in 2002 by approximately
$40.0 million as a result of adoption of SFAS 142 as further described below.

     We have issued options to purchase shares of Class A common stock to
certain members of management and employees under our stock compensation plans.
As of December 31, 2001, there were 9,452,436 options outstanding under these
plans. In addition to these options, we have granted options to purchase
3,200,000 shares of Class A common stock to members of senior management and
others. In connection with option grants, we recognized stock-based compensation
expense of approximately $10.2 million, $13.9 million and $16.8 million in 2001,
2000 and 1999, respectively, and expect that approximately $6.5 million of
additional compensation expense will be recognized over the remaining vesting
period of the outstanding options. In October 1999, we amended the terms of
substantially all of our outstanding employee stock options to provide for
accelerated vesting of the options in the event of termination of employment as
a result of the consolidation of our operations or functions with those of NBC
or within six months preceding or three years following a change in control of
our company. If any of these events occur, we could be required to recognize
stock-based compensation expense at earlier dates than currently expected.

     In furtherance of our strategy to increase audience ratings through the
development of PAX TV original programming, in the third quarter of 2001, we
decided to gradually phase the syndicated program Touched By An Angel out of
primetime and into the daytime period. This program will be replaced in
primetime with original programming. Based on this change, we adjusted our
estimate of the anticipated future usage of Touched By An Angel and certain
other syndicated programs and the related advertising revenues expected to be
generated and recognized a charge of approximately $67.0 million related to the
net realizable value of these programming assets and related programming
commitments. The charge includes a $22.2 million accrued loss related to
programming commitments for the 2001/2002 season of Touched By An Angel
currently airing on CBS. We are contractually obligated to license future
seasons of Touched By An Angel if the series is renewed by CBS. Additional
programming losses, if any, will be recorded at the time we become committed to
license future seasons of this program.

     Interest expense for the year ended December 31, 2001 increased 3.6% to
$49.7 million from $48.0 million in 2000. The increase is primarily due to a
greater level of debt in 2001 resulting from our July refinancing of our 12%
preferred stock and 11 5/8% senior subordinated notes and borrowings to fund
capital expenditures. At December 31, 2001, total long-term debt and senior
subordinated notes were $529.2 million compared with $405.5 million as of
December 31, 2000. Although the July 2001 refinancing and the Refinancing
reduced our overall cost of capital, the refinancings increased our debt and
reduced our preferred stock, and as a result we expect our interest expense to
increase in 2002. Interest income for the year ended December 31, 2001 decreased
to $4.5 million from $14.0 million in 2000. The decrease is due to lower cash
and investment balances and lower interest rates.

     During the year ended December 31, 2001, we sold five television stations
for aggregate consideration of $31.9 million and realized pre-tax gains of
approximately $12.3 million.

                                        33


  YEARS ENDED DECEMBER 31, 2000 AND 1999

     Net revenues increased to $271.9 million for 2000 from $214.2 million for
1999, an increase of 26.9%. The increase in net revenues in 2000 was due to
increases in advertising revenues from PAX TV and our television stations. The
increase in PAX TV network advertising revenues resulted from increased ratings
and distribution of PAX TV and the favorable effect of our network sales
agreement with NBC. The increase in station advertising revenues resulted from
an increase in ratings and television station acquisitions. Our net revenues for
2000 were also favorably affected by increases in our long form programming
rates.

     Programming and broadcast operations expenses were $38.6 million in 2000
compared with $33.1 million in 1999. The increase was primarily due to
completion of acquisitions of stations we previously operated under TBAs.
Program rights amortization expense was $100.3 million in 2000 compared with
$91.8 million in 1999. The increase reflects the increased cost of new
programming and greater usage of certain programs compared with last year.
Selling, general and administrative expenses were $137.8 million in 2000
compared with $135.1 million in 1999. The increase was primarily due to
commissions paid under JSAs entered into during 2000. Time brokerage and
affiliation fees were $5.3 million in 2000 compared with $14.3 million in 1999.
The decrease was due to the completion of acquisitions of stations we previously
operated under TBAs. In 2000, we recorded a programming rights adjustment to net
realizable value of $24.4 million compared with $70.5 million in 1999 resulting
from changes in our estimated future usage of certain programming. Depreciation
and amortization expense was $96.9 million in 2000 compared with $77.9 million
in 1999. The increase was due primarily to acquisitions and accelerated
depreciation on assets to be disposed of in connection with the JSA
restructuring plan described below.

     Interest expense for 2000 decreased 4.6% to $48.0 million from $50.3
million in 1999. The decrease was due to repayment in the fourth quarter of 1999
of debt of DP Media, Inc., a corporation formerly owned by family members of Mr.
Paxson that we acquired in June 2000 and whose financial results were
consolidated with ours since September 30, 1999. At December 31, 2000, we had
total long term debt and senior subordinated notes of $405.5 million compared
with $388.4 million as of December 31, 1999. Interest income for 2000 increased
63.6% to $14.0 million from $8.6 million in 1999. The increase was due primarily
to the investment of the cash proceeds from the September 1999 $415 million
investment by NBC.

     During 2000, we recognized a $10.2 million gain from the modification of
program rights obligations primarily resulting from our return of certain fully
amortized programming rights in exchange for cash of $4.9 million and the
cancellation of our remaining payment obligations. During 1999, we recognized an
approximately $59.5 million pre-tax gain on the sale of our 30% interest in the
Travel Channel LLC and television stations. This gain consisted of a $17.0
million pre-tax gain on the sale of our interest in the Travel Channel, a $23.8
million pre-tax gain on the transfer of our interest in station KWOK serving the
San Francisco market during the first quarter of 1999 and pre-tax gains of $18.7
million on the sale of four television stations during the second quarter of
1999.

     The Series B preferred stock issued in conjunction with the NBC transaction
was issued with a conversion price per share that was less than the closing
price of the Class A common stock on the date of issuance. As a result, we
recognized a beneficial conversion feature in connection with the issuance of
the stock equal to the amount of the discount multiplied by the number of shares
into which the Series B preferred stock is convertible. The beneficial
conversion feature calculated for 1999, totaling approximately $65.5 million,
was reflected in our statement of operations as a preferred stock dividend
during 1999 and was allocated to additional paid-in capital because the
preferred stock was immediately convertible. In November 2000, the Emerging
Issues Task Force of the Financial Accounting Standards Board reached a
consensus regarding the accounting for beneficial conversion features which
required us to recalculate the beneficial conversion feature utilizing the
accounting conversion price rather than the stated conversion price used for
1999. This change resulted in a cumulative catch-up adjustment totaling
approximately $75.1 million, which was recorded as a preferred stock dividend in
the fourth quarter of 2000.

RESTRUCTURING ACTIVITIES

     During the fourth quarter of 2000, we approved a plan to restructure our
television station operations by entering into JSAs with owners of broadcast
stations in markets in which our stations were not already operating under JSAs.
Our restructuring plan included two major components: (1) termination of 226
station sales and administrative employees and (2) the closing of our leased
studio and sales office facilities at each of
                                        34


our stations. These restructuring activities resulted in a charge of
approximately $5.8 million in the fourth quarter of 2000, consisting of $2.7
million of termination benefits and $3.1 million of costs associated with the
closing of our studios and sales offices that will no longer be utilized upon
implementation of the JSAs. Through December 31, 2001, we paid termination
benefits to 76 employees totaling approximately $1.5 million and paid lease
termination costs of approximately $0.9 million, which were charged against the
restructuring reserve. We have made substantial progress in executing our
restructuring plan, however due to events outside our control, including the
events of September 11, 2001, we were unable to fully complete the plan in 2001.
Although we have completed the integration of our sales function at most of the
JSA locations, we were unable to complete the integration of our master control
operations at certain JSA stations in 2001. We now expect to substantially
complete the JSA restructuring by the end of the third quarter of 2002, except
for contractual lease obligations for closed locations, which continue through
2008.

     To date we have been unable to reach an agreement with a JSA partner for
four of the stations included in our restructuring plan. Although we intend to
continue pursuing JSAs for these stations, we are currently unable to determine
the ultimate timing of these JSAs. Accordingly, in the fourth quarter of 2001,
we reversed approximately $1.2 million of restructuring reserves primarily
related to these four stations and certain other reserves which were no longer
required.

     Upon full implementation of JSAs, we expect to reduce our annual station
operating expenses by approximately $20 million consisting primarily of salary
and occupancy costs. These savings will be partially offset by commissions paid
to our JSA partners which, based on 2001 actual station net revenues, would
total approximately $9 million. Actual commissions will vary based on actual
revenues realized.

LIQUIDITY AND CAPITAL RESOURCES

     Our primary capital requirements are to fund capital expenditures for our
television properties, programming rights payments and debt service payments.
Our primary sources of liquidity are our net working capital, availability under
the Term A portion of our senior credit facility and proceeds from the planned
sale of certain non-core assets. Proceeds from the sale of these assets are
expected to generate approximately $40 million to $45 million and include our
second television station serving the Boston market and the securitization of
our accounts receivable. We expect to receive the proceeds related to these
asset sales during 2002. We believe that cash provided by future operations, net
working capital, available funding under the Term A portion of our senior credit
facility and the proceeds from the planned asset sales will provide the
liquidity necessary to meet our obligations and financial commitments for at
least the next twelve months. If we are unable to sell the identified assets on
acceptable terms or our financial results are not as anticipated, we may be
required to seek to sell additional assets or raise additional funds through the
offering of equity securities in order to generate sufficient cash to meet our
liquidity needs. We cannot assure you that we would be successful in selling
assets or raising additional funds if this were to occur.

     As of December 31, 2001, we had $96.0 million in cash and short-term
investments and working capital of approximately $57.9 million. During the year
ended December 31, 2001, our working capital decreased by approximately $16.4
million due primarily to the use of $40.0 million to pay interest, $34.5 million
to fund operations including programming and cable payments partially offset by
$34.0 million in proceeds from the sale of certain of our towers and $25.0
million in borrowings under our revolving credit facility.

     Cash used in operating activities was approximately $60.8 million, $76.0
million and $181.8 million for 2001, 2000 and 1999, respectively. These amounts
primarily reflect payments for interest on our debt and the operating costs
incurred in connection with the operation of PAX TV and the related cable
distribution rights and programming rights payments.

     Cash provided by (used in) investing activities was approximately $48.5
million, ($12.8) million and ($160.5) million for 2001, 2000 and 1999,
respectively. These amounts include acquisitions of broadcast properties,
capital expenditures, short-term investment transactions, proceeds from the sale
of television stations and our broadcast towers and other transactions. As of
December 31, 2001, we had agreements to purchase significant assets of broadcast
properties totaling approximately $36.0 million, net of deposits. We do not
anticipate spending any significant amounts to satisfy these commitments until
2003 or thereafter.

     In December 2001, we completed the sale and leaseback of certain of our
tower assets for aggregate proceeds of $34.0 million. This transaction resulted
in a gain of approximately $5.2 million which has been

                                        35


deferred and will be recognized over the lease term as a reduction of rent
expense. As part of the transaction, we entered into operating leases related to
both our analog and digital antennas at these facilities for terms of up to 20
years. Annual rent expense over the lease term will be approximately $4.0
million. For certain tower assets with a net book value of approximately $9.1
million, we were temporarily unable to transfer title or assign leases to the
buyer at closing. We expect to complete such transfers in 2002. In the interim,
at closing we entered into management agreements with the buyer on terms
consistent with the operating leases. Included in the $34.0 million proceeds was
approximately $12.1 million of deferred consideration for the managed sites
which is included in other liabilities in the accompanying December 31, 2001
consolidated balance sheet.

     During 2001, we acquired the assets of three television stations for total
consideration of $30.8 million, of which $16.1 million was paid in prior years,
and we paid $1.0 million to acquire the minority interest in a station acquired
in 1998. During 2000, in addition to the acquisition of DP Media described
below, we acquired the assets of four television stations for total
consideration of approximately $68.7 million, of which $10.9 million was paid in
prior years, and we paid approximately $8.9 million of additional consideration
in respect of an acquisition completed in February 1999. During 1999, we
acquired the assets of five television stations for total consideration of
approximately $65.6 million. In February 1999, we also completed the acquisition
of WCPX in Chicago by transferring our interest in KWOK serving the San
Francisco market as partial consideration for WCPX. In connection with the
transfer of ownership of KWOK, we recognized a pre-tax gain of approximately
$23.8 million.

     In June 2000, we completed the acquisition of DP Media, Inc. Before the
acquisition, DP Media was beneficially owned by family members of Mr. Paxson. We
acquired DP Media for aggregate consideration of $113.5 million, $106 million of
which we had previously advanced during 1999. DP Media's assets included a 32%
equity interest in a limited liability company that owns television station WWDP
in Norwell, Massachusetts and is controlled by the former stockholders of DP
Media. We allocated the aggregate purchase price of DP Media to the assets
acquired and liabilities assumed based on their relative fair market values.
During the third quarter of 1999, we advanced funds to DP Media to fund
operating cash flow needs. As a result of our significant operating
relationships with DP Media and our funding of DP Media's operating cash flow
needs, the assets and liabilities of DP Media, together with their results of
operations, have been included in our consolidated financial statements since
September 30, 1999.

     During 2001, we sold our interests in five television stations for
aggregate consideration of $31.9 million and realized pre-tax gains of
approximately $12.3 million. During 2000, we sold our interests in four stations
for aggregate consideration of approximately $14.5 million and realized pre-tax
gains of approximately $1.3 million on these sales. During 1999, we sold our
interests in four stations for aggregate consideration of approximately $61
million and realized pre-tax gains of approximately $18.7 million on these
sales. In addition, in February 1999, we sold a 30% interest in the Travel
Channel for aggregate consideration of approximately $55 million and realized a
pre-tax gain of approximately $17 million. The results of operations of the
Travel Channel have been included in our 1999 consolidated statement of
operations using the equity method of accounting through the date of sale.

     Capital expenditures, which consist primarily of digital conversion costs
and purchases of broadcasting equipment for our station operations, were
approximately $35.2 million in 2001, $25.1 million in 2000 and $34.6 million in
1999. Except for television stations presently operating analog television
service in the 700 MHz band and stations given a digital channel allocation
within that band, the FCC has mandated that each licensee of a full power
broadcast television station, that was allotted a second digital television
channel in addition to the current analog channel, complete the construction of
digital facilities capable of serving its community of license with a signal of
requisite strength by May 2002, and complete the build-out of the balance of its
full authorized facilities by a later date to be established by the FCC. For
those stations now operating in the 700 MHz band or allotted a digital channel
within that band, the institution of digital television service may be delayed
until December 31, 2005, or later than December 31, 2005 if it can be
demonstrated that less than 70% of the television households in the station's
market are capable of receiving digital television signals. Despite the current
uncertainty that exists in the broadcasting industry with respect to standards
for digital broadcast services, planned formats and usage, we intend to comply
with the FCC's timing requirements for the broadcast of digital television. We
have commenced migration to digital broadcasting in certain of our markets and
will continue to do so throughout the required time period. Because of the
uncertainty as to standards, formats and usage, however, we cannot currently
predict with reasonable
                                        36


certainty the amount or timing of the expenditures we will likely have to make
to complete the digital conversion of our stations, but we currently anticipate
spending at least $70 million, of which we have spent approximately $18 million
to date. We will likely fund our digital conversion from availability under the
$50 million Term A facility entered into as part of our July 2001 refinancing,
as well as cash on hand, the sale of assets and from other financing
arrangements.

     Cash provided by financing activities was $44.8 million in 2001, $15.0
million in 2000 and $418.1 million in 1999. These amounts include the proceeds
from the July 2001 refinancing described below, as well as the related principal
repayments, redemption premium, preferred stock redemption and refinancing
costs. Also included are proceeds from borrowings to fund capital expenditures,
proceeds from preferred stock issuances and proceeds from stock option
exercises, net of principal repayments and preferred stock dividends.

     In January 2002, we completed the offering of the original notes. Gross
proceeds of the original offering totaled approximately $308 million and were
used to complete the Refinancing and to pay costs related to the original
offering. The original notes were sold at a discount of 62.132%, which
represents a yield to maturity of 12 1/4%. Interest on the notes will be payable
semi-annually beginning on July 15, 2006. The original notes are guaranteed by
our subsidiaries. In the first quarter of 2002, we will recognize an
extraordinary loss totaling approximately $18 million resulting primarily from
the redemption premium associated with the Refinancing.

     On July 12, 2001, we completed a $560 million financing consisting of a
$360 million senior credit facility and $200 million of 10 3/4% senior
subordinated notes due 2008. Proceeds from the initial funding under the senior
credit facility and the 10 3/4% senior subordinated notes offering were used to
repay all of our indebtedness and obligations under our previously existing
credit facilities, which were scheduled to mature in June 2002, to redeem our
11 5/8% senior subordinated notes and our 12% redeemable preferred stock and to
pay redemption premiums, fees and expenses in connection with the refinancing.
In 2001, we recognized an extraordinary loss related to early extinguishment of
debt totaling approximately $9.9 million resulting primarily from the write-off
of unamortized debt costs related to the refinanced indebtedness and the
redemption premium and costs associated with the repayment of the 11 5/8% senior
subordinated notes.

     The $360 million senior credit facility consists of a fully drawn $25
million revolving credit facility maturing June 2006, a $50 million delayed draw
Term A facility maturing December 2005, of which $20.0 million was outstanding
at December 31, 2001, and a $285 million fully drawn Term B facility maturing
June 2006. The revolving credit facility is available for general corporate
purposes and the Term A facility is available to fund capital expenditures. We
intend to use the Term A portion of the facility to fund the majority of our
capital expenditures through the end of 2002. The interest rate under the bank
facility is LIBOR plus 3.0% or Base Rate (as defined) plus 2.0% at the Company's
option. The 10 3/4% senior subordinated notes are due in 2008 and interest on
the notes is payable on January 15 and July 15 of each year. We have entered
into a variable to fixed interest rate swap in the notional amount of $144.0
million to hedge the impact of interest rate changes on a portion of our
variable rate indebtedness. The fixed rate under the swap is 3.64% and variable
rates are indexed to LIBOR. Including the impact of the swap, the weighted
average interest rate of our indebtedness at December 31, 2001 was 8.16%.

     The terms of the indentures governing our senior subordinated notes contain
covenants limiting our ability to incur additional indebtedness except for
specified indebtedness related to the funding of capital expenditures and
refinancing indebtedness. In addition, our senior credit facility also contains
covenants restricting our ability and the ability of our subsidiaries to incur
additional indebtedness, dispose of assets, pay dividends, repurchase or redeem
capital stock and indebtedness, create liens, make capital expenditures, make
certain investments or acquisitions and enter into transactions with affiliates
and otherwise restricting our activities. Our senior credit facility also
contains the following financial covenants: (1) twelve-month trailing minimum
net revenue and minimum EBITDA (as defined in the senior credit facility) for
each of the fiscal quarters ended June 30, 2001 through December 31, 2003, and
(2) maximum ratio of total senior debt to EBITDA, maximum ratio of total debt to
EBITDA, minimum permitted interest coverage ratio and minimum permitted fixed
charge coverage ratio, each beginning for each of the fiscal quarters ending on
or

                                        37


after June 30, 2004. Our twelve-month trailing minimum net revenue and EBITDA
covenants for 2002 are as follows (in thousands):



FISCAL QUARTER ENDING                             MINIMUM NET REVENUES   MINIMUM EBITDA
- ---------------------                             --------------------   --------------
                                                                   
March 31, 2002..................................        $240,000            $18,000
June 30, 2002...................................        $250,000            $24,000
September 30, 2002..............................        $260,000            $29,000
December 31, 2002...............................        $270,000            $36,500


     Our ability to meet these financial covenants is influenced by several
factors, the most significant of which include the effect on our revenues of
overall conditions in the television advertising marketplace, our network and
station ratings and the success of our JSA strategy. Although we currently
expect to meet these covenants over the next twelve months, adverse developments
with respect to these or other factors could result in our failing to meet one
or more of these covenants. If we were to violate any of these covenants, we
would be required to seek a waiver from our lenders under our senior credit
facility and possibly seek an amendment to our senior credit facility. Although
we believe, based on discussions with our lenders, that we would be able to
obtain waivers or amendments to our senior credit facility relating to these
covenants, we can provide no assurance that our lenders under our senior credit
facility would grant us any waiver or amendment which might become necessary. If
we failed to meet any of our financial covenants and our lenders did not grant a
waiver or amend our facility, they would have the right to declare an event of
default and seek remedies including acceleration of all outstanding amounts due
under the senior credit facility. Should an event of default be declared under
the senior credit facility, this would cause a cross default to occur under the
senior subordinated note and senior subordinated discount note indentures, thus
giving each trustee the right to accelerate repayment. We cannot assure you that
we would be successful in obtaining alternative sources of funding to repay
these obligations should these events occur.

CONTRACTUAL OBLIGATIONS AND COMMITMENTS

     We are obligated under the terms of our debt facilities, programming
contracts, cable distribution agreements and operating lease agreements and
employment contracts as of December 31, 2001 to make future payments as follows
(in thousands):



                                  2002      2003      2004      2005       2006     THEREAFTER    TOTAL
                                --------   -------   -------   -------   --------   ----------   --------
                                                                            
Long-term debt................  $  2,899   $ 3,004   $ 3,107   $22,617   $297,246    $200,307    $529,180
Programming contracts.........    76,169    26,673    12,500     4,223         --          --     119,565
Cable agreements..............    12,325       504       180       180         --          --      13,189(1)
Operating leases and
  employment contracts........    17,772    15,750    12,267    11,230     11,625     104,933     173,577
                                --------   -------   -------   -------   --------    --------    --------
                                $109,165   $45,931   $28,054   $38,250   $308,871    $305,240    $835,511
                                ========   =======   =======   =======   ========    ========    ========


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

(1) Includes imputed interest of $154,000

     In addition, under the terms of our programming contracts, as of December
31, 2001 we have committed to pay for certain programs for which we currently do
not have airing rights as follows (in thousands):

                                                            
2002........................................................   $10,803
2003........................................................     9,218
2004........................................................    10,085
2005........................................................     9,635
2006........................................................     3,345
                                                               -------
                                                               $43,086
                                                               =======



     We are also committed to purchase at similar terms additional future series
episodes of our licensed programs should they be made available.

     See Note 14 in the accompanying consolidated financial statements for a
summary of the redemption features of our mandatorily redeemable preferred
stock.

                                        38


NEW ACCOUNTING PRONOUNCEMENTS

     In June 2001, the Financial Accounting Standards Board issued Statements of
Financial Accounting Standards No. 141, "Business Combinations" ("SFAS 141"),
and No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142"). SFAS 141
addresses financial accounting and reporting for business combinations and
requires all business combinations to be accounted for using the purchase method
of accounting. SFAS 141 is effective for all business combinations initiated
after June 30, 2001. We do not believe adoption of SFAS 141 will have a material
effect on our financial position, results of operations or cash flows.

     SFAS 142 addresses financial accounting and reporting for acquired goodwill
and other intangible assets. Under SFAS 142, goodwill and intangible assets that
have indefinite lives will not be amortized but rather will be tested at least
annually for impairment. Intangible assets that have finite useful lives will
continue to be amortized over their useful lives. SFAS 142 is effective for
fiscal years beginning after December 15, 2001. Impairment losses for goodwill
and other indefinite-lived intangible assets that arise due to the initial
application of SFAS 142 are to be reported as resulting from a change in
accounting principle. We will adopt SFAS 142 effective January 1, 2002. We are
currently assessing the impact of adopting SFAS 142, however we do not believe
adoption will result in a material impairment loss, if any. Upon adoption of
SFAS 142, we will no longer amortize goodwill and FCC license intangibles (which
we believe have indefinite lives) which totaled approximately $842.7 million,
net of accumulated amortization of $140.3 million at December 31, 2001. Under
existing accounting standards, these assets are being amortized over 25 years.
Amortization expense related to goodwill and FCC licenses totaled approximately
$39.5 million for the year ended December 31, 2001.

     In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets" ("SFAS 144"). SFAS 144 supersedes
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and Long-Lived
Assets to be Disposed Of" and Accounting Principles Board Opinion ("APB") No.
30, "Reporting the Results of Operations -- Reporting the Effects of the
Disposal of a Segment Business and Extraordinary, Unusual and Infrequently
Occurring Events and Transactions." SFAS 144 establishes a single accounting
model for assets to be disposed of by sale whether previously held and used or
newly acquired. SFAS 144 retains the provisions of APB No. 30 for presentation
of discontinued operations in the income statement, but broadens the
presentation to include a component of an entity. SFAS 144 is effective for
fiscal years beginning after December 15, 2001. We do not believe that the
adoption of SFAS 144 will have a material effect on our financial position or
results of operations.

                                        39


                                    BUSINESS

GENERAL

     We are a network television broadcasting company which owns and operates
the largest broadcast television station group in the United States, as measured
by the number of television households in the markets our stations serve. We
currently own and operate 65 full power broadcast television stations (including
three stations we operate under time brokerage agreements), 64 of which carry
PAX TV, including stations reaching all of the top 20 U.S. markets, and 41 of
the top 50 U.S. markets. We operate PAX TV, a network that provides family
oriented entertainment programming seven days per week between the hours of 1:00
p.m. and midnight, Monday through Friday, and 5:00 p.m. and midnight Saturday
and Sunday. PAX TV's programming consists of shows originally developed by us
and shows that have appeared previously on other broadcast networks which we
have purchased the right to air. PAX TV reaches approximately 85% of prime time
television households in the U.S. through our broadcast television station
group, and pursuant to distribution agreements with cable and satellite systems
and affiliates. PAX TV reaches approximately 64% of U.S. television households
through our broadcast television station group. We have agreements with cable
television system owners and satellite television providers to carry PAX TV,
through which we reach an additional 16% of U.S. television households in
markets not served by our owned and operated stations. We reach an additional 5%
of U.S. television households through affiliation agreements with 63
independently owned PAX TV affiliated stations. We have obtained audience
ratings and share, market rank and television household data set forth in this
prospectus from the most recent information available from Nielsen Media
Research. We do not assume responsibility for the accuracy or completeness of
this data.

     We derive our revenues from the sale of network spot advertising time,
network long form paid programming and station advertising:

     - Network spot advertising.  We sell commercial air time to advertisers who
       want to reach the entire nationwide PAX TV viewing audience with a single
       advertisement. Most of our network advertising is sold under advance, or
       "upfront," commitments to purchase advertising time which are obtained
       before the beginning of our PAX TV programming season. The National
       Broadcasting Company, Inc. ("NBC") serves as our exclusive sales
       representative to sell most of our network advertising. Any remaining
       inventory which is not sold by NBC is sold by us as direct response
       advertising. Our network advertising sales represented approximately 33%
       of our revenue during the year ended December 31, 2001.

     - Network long form paid programming.  We sell air time for long form paid
       programming, consisting primarily of infomercials, during broadcasting
       hours when we are not airing PAX TV. Infomercials are shows produced by
       others, at no cost to us, principally to promote and sell products or
       services through viewer direct response. Our network long form paid
       programming represented approximately 33% of our revenue during the year
       ended December 31, 2001.

     - Station advertising.  We sell commercial air time to advertisers who want
       to reach the viewing audience in specific geographic markets in which our
       stations operate. These advertisers may be local businesses or regional
       or national advertisers who want to target their advertising in these
       markets. NBC provides national advertising sales services for a majority
       of our stations. In markets in which our stations are operating under
       joint sales agreements, or JSAs, our JSA partner serves as our exclusive
       sales representative to sell our local station advertising. For stations
       for which NBC does not provide national account representation, our JSA
       partner performs this function. Our local sales forces sell this
       advertising in markets without JSAs. Our station advertising sales
       represented approximately 34% of our revenue during the year ended
       December 31, 2001 (including 16% of our revenue during such year which
       was derived from local and national long form paid programming).

     We believe that our business model benefits from many of the favorable
attributes of both traditional television networks and network-affiliated
television station groups. Similar to traditional television networks, we
provide advertisers with nationwide reach through our extensive television
distribution system. We own and operate most of our distribution system and,
therefore, we receive advertising revenue from the entire broadcast day
(consisting of both PAX TV and long form paid programming), unlike traditional
networks, which receive advertising revenue only from commercials aired during
network programming hours. In addition, due to the size and centralized
operations of our station group, we are able to achieve economies of
                                        40


scale with respect to our programming, promotional, research, engineering,
accounting and administrative expenses which we believe enable us to have lower
per station expenses than those of a typical network-affiliated station.

BUSINESS STRATEGY

     The principal components of our strategy are set forth below:

     - Provide Quality Family Programming.  We believe there is significant
       demand, including from adult demographic groups which are attractive to
       advertisers, for quality family oriented programming which is free of
       excessive violence, explicit sexual themes and foul language. We are
       attracting viewers and establishing a nationally recognized brand by
       offering quality family programming. As our PAX TV brand recognition
       grows, we believe that PAX TV will increasingly be a "destination
       channel" to which viewers turn regularly for family programming, and that
       PAX TV will continue to attract advertisers who want to reach the viewer
       demographics attracted by our programming. We are expanding the amount of
       original programming we air as we believe this will further improve our
       viewer demographics and our positive ratings trends by employing cost
       efficient development and production techniques. We have developed
       original entertainment programming for PAX TV at lower costs than those
       typically incurred by other broadcast networks for original entertainment
       programming.

     - Benefit from a Centralized, Efficient Operating Structure.  We centralize
       many of the functions of our owned and operated stations, including
       promotions, advertising, research, engineering, accounting and sales
       traffic. Our stations average fewer than ten employees compared to an
       average of 90 employees at network-affiliated stations, and an average of
       60 employees at independent stations in markets of similar size to ours.
       We promote PAX TV and each of our television stations by utilizing a
       centralized advertising and promotional program. We also employ a
       centralized programming strategy, which we believe enables us to keep our
       programming costs per station significantly lower than those of
       comparable stations. We provide programming for all of our stations and,
       except for local news and syndicated programming provided by JSA
       partners, each station offers substantially the same programming
       schedule.

     - Improve Local Television Station Operations by Implementing Joint Sales
       Agreements.  In order to improve the operations of our local stations, we
       have entered into JSAs with respect to 55 of our stations, including JSAs
       between 48 of our stations and NBC owned or affiliated stations.
       Substantially all of those stations are currently operating under the
       terms of the JSAs. Generally, JSAs are for ten year terms. Substantially
       all JSA partners have the right to terminate the JSA upon a sale by the
       JSA partner of its station that is the subject of the JSA. Each JSA
       typically provides the following:

      - The JSA partner serves as our exclusive sales representative to sell our
        station advertising, enabling our station to benefit from the strength
        of the JSA partner's sales organization and existing advertiser
        relationships;

      - We integrate and co-locate many of our station operations with those of
        the JSA partner, reducing our costs through operating efficiencies and
        economies of scale, including the elimination of redundant owned and
        leased facilities and staffing; and

      - The JSA partner may provide local news and syndicated programming,
        supplementing and enhancing our station's programming lineup.

     - Expand and Improve PAX TV Distribution.  We intend to continue to expand
       our television distribution system through the addition of affiliated
       broadcast television stations and cable systems. We intend to expand our
       distribution to reach as many U.S. television households as possible in a
       cost efficient manner. We continue to improve the channel positioning of
       our broadcast television stations on local cable systems across the
       country, as we believe the ability to view our programming on one of the
       lower numbered channel positions (generally below channel 30) on a cable
       system improves the likelihood that viewers will watch our programming.

     - Develop Our Broadcast Station Group's Digital Television Platform.  Our
       owned and operated station group gives us a significant platform for
       digital broadcasting. We have commenced construction of our digital
       broadcast facilities and intend to explore the most effective use of
       digital broadcast technology

                                        41


       for each of our stations. Upon completion of the construction of our
       digital facilities, we believe that we will be able to provide a
       significant broadband platform on which to broadcast digital television,
       including multiple additional television networks. While future
       applications of this technology and the time frame within which digital
       broadcasting will commence are uncertain, we believe that our existing
       broadcast stations make us well positioned to take advantage of future
       digital broadcasting opportunities.

OUR HISTORY

     We were founded in 1991 by Mr. Paxson, who remains our Chairman and
controlling stockholder. We began by purchasing radio and television stations,
and grew to become Florida's largest radio station group, while also owning two
network-affiliated television stations and other television stations which
carried principally infomercial and other paid programming. In 1997, we sold our
radio station group and our network-affiliated television stations to
concentrate on building our owned and operated television station group. Since
commencing our television operations in 1994, we have established the largest
owned and operated broadcast television station group in the U.S., as measured
by the number of television households in the markets our stations serve. We
launched PAX TV on August 31, 1998, and are now in our fourth network
programming season.

DISTRIBUTION

     We distribute PAX TV through a television distribution system comprised of
our owned and operated broadcast television stations, cable television systems
in various markets not served by a PAX TV station, satellite television
providers and independently owned PAX TV affiliated broadcast stations.
According to Nielsen our programming currently reaches 85% of U.S. television
households.

     We seek to reach as many U.S. television households as possible in a cost
efficient manner. In evaluating opportunities to increase our television
distribution, we consider factors such as the attractiveness of specific
geographic markets and their audience demographics to potential television
advertisers, the degree to which the increased distribution would improve our
nationwide audience reach or upgrade our distribution in a market in which we
already operate, and the effect of any changes in our distribution on our
national ownership position under the Communications Act and FCC rules
restricting the ownership of attributable interests in television stations. We
have increased the number of U.S. television households which can receive our
programming by entering into agreements with cable system operators and
satellite television providers under which they carry our programming on a
designated channel of their cable system or satellite service.

     Our Owned and Operated Television Stations.  We currently own and operate
65 full power broadcast television stations (including three stations we operate
under time brokerage agreements, or TBAs), 64 of which carry PAX TV, including
stations reaching all of the top 20 U.S. markets and 41 of the top 50 U.S.
markets. Our owned and operated station group reaches approximately 64% of U.S.
prime time television households, according to Nielsen. Our ownership of the
stations providing most of our television distribution enables us to receive
advertising revenue from each station's entire broadcast day and to achieve
operating efficiencies typically not enjoyed by network affiliated television
stations. As nearly all of our owned and operated stations operate in the "ultra
high frequency," or UHF, portion of the broadcast spectrum, only half of the
number of television households they reach are counted against the national
ownership cap under the Communications Act. By exercising our rights under the
Communications Act to require cable television system operators to carry the
broadcast signals of our owned and operated stations, we reach many more
television households in each station's designated market area, or DMA, than we
would if our stations were limited to transmitting their broadcast signals over
the airwaves.

     We operate an additional three stations (WPXL, New Orleans; WPXX, Memphis;
and WBNA, Louisville) under TBAs with the station owners. Under these
agreements, we provide the station with PAX TV programming and retain the
advertising revenues from the sale of advertising time during PAX TV programming
hours. We have options to acquire two of these stations (WPXL and WPXX) and a
right of first refusal to acquire the third (WBNA). The owners of the two
stations for which we have options have the right to require us to purchase
these stations at any time after January 1, 2003 through December 31, 2005. We
may enter into additional TBAs to operate stations that we intend to acquire or
to enable us to operate additional

                                        42


stations that we might not be able to own under the current ownership
restrictions of the Communications Act.

     The table below provides information about our owned and operated stations,
stations we operate under TBAs, and stations subject to pending acquisition
transactions. Upon completion of the pending acquisition transactions and
construction projects noted in the table, we will own 66 stations, 65 of which
will carry PAX TV, including stations reaching all of the top 20 U.S. markets
and 41 of the top 50 markets.



                         MARKET    STATION CALL   BROADCAST   TOTAL MARKET TV
MARKET NAME              RANK(1)     LETTERS       CHANNEL     HOUSEHOLDS(2)             JSA PARTNER(3)
- -----------              -------   ------------   ---------   ---------------   --------------------------------
                                                                 
New York...............     1      WPXN              31          7,301,060      NBC
Los Angeles............     2      KPXN              30          5,303,490      NBC
Chicago................     3      WCPX              38          3,360,770      NBC
Philadelphia...........     4      WPPX              61          2,801,010      NBC
San Francisco..........     5      KKPX              65          2,426,010      Granite Broadcasting Corp.
Boston(4)..............     6      WPXB              60          2,315,700      --
Boston (3 stations)....     6      WBPX              68          2,315,700      --
Dallas.................     7      KPXD              68          2,201,170      NBC
Washington D.C. .......     8      WPXW              66          2,128,430      NBC
Washington D.C. .......     8      WWPX              60          2,128,430      NBC
Atlanta................     9      WPXA              14          1,990,650      Gannett Co., Inc.
Detroit................    10      WPXD              31          1,878,670      Post-Newsweek Stations, Inc.
Houston................    11      KPXB              49          1,831,680      Post-Newsweek Stations, Inc.
Seattle................    12      KWPX              33          1,647,230      Belo Corp.
Minneapolis............    13      KPXM              41          1,573,640      Gannett Co., Inc.
Tampa..................    14      WXPX              66          1,568,180      Media General, Inc.
Miami..................    15      WPXM              35          1,549,680      NBC
Phoenix................    16      KPPX              51          1,536,950      Gannett Co., Inc.
Cleveland..............    17      WVPX              23          1,513,130      Gannett Co., Inc.
Denver.................    18      KPXC              59          1,381,620      Gannett Co., Inc.
Sacramento.............    19      KSPX              29          1,226,670      Hearst-Argyle Television, Inc.
Orlando................    20      WOPX              56          1,182,420      Hearst-Argyle Television, Inc.
Portland, OR...........    23      KPXG              22          1,069,260      Belo Corp.
Indianapolis...........    25      WIPX              63          1,013,290      Dispatch Broadcast Group
Hartford...............    28      WHPX              26            953,130      NBC
Raleigh-Durham.........    29      WFPX              62            939,000      NBC
Raleigh-Durham.........    29      WRPX              47            939,000      NBC
Nashville..............    30      WNPX              28            879,030      --
Kansas City............    31      KPXE              50            849,730      Scripps Howard Broadcasting
                                                                                Company
Milwaukee..............    33      WPXE              55            832,330      Journal Broadcast Group, Inc.
Salt Lake City.........    35      KUPX              16            782,960      --
San Antonio(5).........    37      KPXL              26            710,030      Clear Channel Broadcasting, Inc.
Grand Rapids...........    38      WZPX              43            702,210      LIN Television Corp.
Birmingham.............    39      WPXH              44            683,830      NBC
West Palm Beach........    40      WPXP              67            681,100      Scripps Howard Broadcasting
                                                                                Company
Memphis(6)(7)..........    41      WPXX              50            655,210      Raycom America, Inc.
Norfolk................    42      WPXV              49            654,150      LIN Television Corp.
New Orleans(6)(7)......    43      WPXL              49            653,020      Hearst-Argyle Television, Inc.
Greensboro.............    44      WGPX              16            634,130      Hearst-Argyle Television, Inc.
Oklahoma City..........    45      KOPX              62            623,760      The New York Times Company
Buffalo................    47      WPXJ              51            616,610      Gannett Co., Inc.
Albuquerque............    48      KAPX              14            607,170      Hubbard Broadcasting, Inc.


                                        43




                         MARKET    STATION CALL   BROADCAST   TOTAL MARKET TV
MARKET NAME              RANK(1)     LETTERS       CHANNEL     HOUSEHOLDS(2)             JSA PARTNER(3)
- -----------              -------   ------------   ---------   ---------------   --------------------------------
                                                                 
Providence.............    49      WPXQ              69            600,730      NBC
Louisville(6)(8).......    50      WBNA              21            598,940      --
Wilkes Barre...........    52      WQPX              64            567,810      The New York Times Company
Jacksonville-Brunswick...   53     WPXC              21            563,510      Post-Newsweek Stations, Inc.
Fresno-Visalia.........    55      KPXF              61            524,970      Granite Broadcasting Corp.
Albany.................    57      WYPX              55            514,770      Hubbard Broadcasting, Inc.
Tulsa..................    59      KTPX              44            502,500      Scripps Howard Broadcasting
                                                                                Company
Charleston, WV.........    61      WLPX              29            478,910      --
Knoxville..............    63      WPXK              54            478,190      Raycom America, Inc.
Lexington..............    66      WUPX              67            435,780      --
Roanoke................    67      WPXR              38            422,760      Media General, Inc.
Des Moines.............    70      KFPX              39            404,910      The New York Times Company
Honolulu...............    72      KPXO              66            398,460      --
Spokane................    78      KGPX              34            380,480      KHQ, Incorporated
Shreveport.............    79      KPXJ              21            372,490      KTBS, Inc.
Portland-Auburn, ME....    80      WMPX              23            372,470      Gannett Co., Inc.
Syracuse...............    81      WSPX              56            363,340      Raycom America, Inc.
Cedar Rapids...........    89      KPXR              48            317,980      Second Generation of Iowa, Ltd.
Greenville-N. Bern.....   106      WEPX              38            250,780      GOCOM Television LLC
Greenville-N. Bern.....   106      WPXU              35            250,780      GOCOM Television LLC
Wausau(9)..............   137      WTPX              46            168,510      --
St. Croix..............    NR      WPXO              15                 --      Alpha Broadcasting Corporation


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

(1) Market rank is based on the number of television households in the
    television market or Designated Market Area, or "DMA," as used by Nielsen,
    effective as of September 2001.

(2) Refers to the number of television households in the DMA as estimated by
    Nielsen, effective as of September 2001.

(3) Indicates the company with which we have entered into a JSA for the station.

(4) Currently carries the home shopping programming of ValueVision
    International, Inc.

(5) JSA is scheduled to terminate August 13, 2002.

(6) Station is independently owned and is operated by us under a time brokerage
    agreement.

(7) We have the option to acquire the station and the current owner has the
    right to require us to purchase the station at anytime after January 1, 2003
    through December 31, 2005.

(8) We have a right of first refusal to acquire the station.

(9) The station has been constructed but is not yet operational.

     Cable and Satellite Distribution.  In order to increase the distribution of
our programming, we have entered into carriage agreements with the nation's
largest cable multiple system operators, as well as with other cable system
operators and satellite television providers. These cable and satellite system
operators carry our programming on a designated channel of their service. These
carriage agreements enable us to reach television households in markets not
served by our owned or affiliated stations. Our carriage agreements with cable
system operators generally require us to pay an amount based upon the number of
additional television households reached. Our carriage agreements with satellite
television providers allow the satellite provider to sell and retain the
advertising revenue from a portion of the non-network advertising time during
PAX TV programming hours. Some of our carriage agreements with cable operators
also provide this form of compensation to the cable operator. We do not pay
compensation for reaching households in DMAs already served by our broadcast
stations, even though the cable operator may provide our programming to these
households because we have exercised our "must carry" rights under the
Communications Act. We believe that the ability to view our programming on one
of the lower numbered channel positions (generally below channel 30) on a cable
system improves the likelihood that viewers will watch our programming, and we
have

                                        44


successfully negotiated favorable channel positions with most of the cable
system operators and satellite television providers with whom we have carriage
agreements. Through cable and satellite distribution, we reach approximately 16%
of U.S. prime time television households in DMAs not already served by a PAX TV
station.

     Our PAX TV Affiliated Stations.  To increase the distribution of PAX TV, we
have entered into affiliation agreements with stations in markets where we do
not otherwise own or operate a broadcast station. These stations include full
power and low power television stations. Each affiliation agreement gives the
particular station the right to broadcast PAX TV programming, or portions of it,
in the station's market. Although the majority of the affiliation agreements
provide for the distribution of PAX TV prime time programming, some affiliates
do not carry all of our PAX TV programming. In addition, some affiliates do not
air PAX TV programming in the exact time patterns that the programming is
broadcast on our network because of issues related to their specific markets.
Our affiliation agreements provide us with additional distribution of our PAX TV
programming without the expense of acquiring a station or paying compensation to
cable system operators in the markets reached. Under our affiliation agreements,
we are not required to pay cash compensation to the affiliate, and the affiliate
is entitled to sell and retain the revenue from all or a portion of the
non-network advertising time during the PAX TV programming hours. We have
affiliation agreements with respect to 63 television stations which reach
approximately 5% of U.S. prime time television households.

PROGRAMMING

     During our PAX TV network hours, which are between 1:00 p.m. and midnight,
Monday through Friday, and 5:00 p.m. and midnight Saturday and Sunday, we offer
family entertainment programs that are free of excessive violence, explicit
sexual themes and foul language. We produce original shows to air during PAX
TV's prime time hours. The balance of our PAX TV lineup consists of syndicated
programs and a limited amount of entertainment and sports programming provided
by NBC under cross programming agreements with us. We began PAX TV with a lineup
of syndicated programming that had experienced successful first runs in terms of
audience ratings, giving us the ability to offer a full programming schedule
immediately upon the launch of PAX TV. Since our launch, we have sought to
develop and increase our original PAX TV programming, as our operating
experience with PAX TV has shown that quality original programs can generate
higher ratings and deliver a greater return to us, in terms of advertising
revenues, than syndicated programs of comparable cost.

     We have developed original entertainment programming for PAX TV at lower
costs than those typically incurred by other broadcast networks for original
entertainment programming. We have done this by employing cost efficient
development and production techniques, such as the development of program
concepts without the use of pilots, and by entering into production arrangements
with foreign production companies through which we are able to share production
costs, gain access to lower cost production labor and participate in tax
incentives. In addition, we generally pre-sell the foreign and other
distribution rights to our original PAX TV programming and thereby are able to
recover a significant portion of the program's production costs, while retaining
all of the domestic exploitation rights. Our agreements for syndicated
programming generally entitle us to exclusive nationwide distribution rights
over our entire television distribution system for a fixed cost, without regard
to the number of households that receive our programming. As our syndicated
programming licenses expire, we intend to replace that programming with less
costly original programming.

     During non-network hours, our stations broadcast long form paid
programming, consisting primarily of infomercials, which are shows produced at
no cost to us to market and sell products and services through viewer direct
response, and paid religious programming. Under an agreement with The Christian
Network, Inc., or CNI, our broadcast stations carry CNI's programming during the
hours of 1:00 a.m. and 6:00 a.m., seven days per week. For additional details on
our relationship with CNI, see "Certain Relationships and Related Transactions."

     Under many of our JSAs, the JSA partner provides our station with late
evening local news broadcasts, which we believe enhances our station's appeal to
viewers and advertisers. This news programming may be a rebroadcast of the JSA
partner's news in a different time slot or a news broadcast produced for PAX TV.

                                        45


     Original Prime Time Programming.  Our current lineup of original
programming consists of one hour shows which we broadcast during prime time
hours on PAX TV. This lineup consists of:



PROGRAM NAME                               PROGRAM DESCRIPTION
- ------------           ------------------------------------------------------------
                    
Doc                    A series that captures the drama and comedy of big city
                       medicine as seen through the eyes of Clint Cassidy (Billy
                       Ray Cyrus), a country doctor from Montana who relocates to
                       New York City.
Encounters with the    A reality series hosted by Jerry Orbach (Law & Order) where
Unexplained            scientists, explorers, analysts and historians discover
                       answers to mysteries and riddles that have baffled mankind
                       for generations.
It's a Miracle         A reality series hosted by Richard Thomas and devoted to
                       exploring "miracles" -- life-altering stories of chance
                       encounters, medical miracles, rescues and interventions that
                       defy plausible explanation.
Miracle Pets           A reality series hosted by Alan Thicke featuring miraculous
                       animal stories.
Mysterious Ways        A drama series in which professor of anthropology Declan
                       Dunn (Adrian Pasdar) and skeptical psychiatrist Peggy Fowler
                       (Rae Dawn Chong) join forces to uncover uncanny and
                       inexplicable phenomena people call "miracles."
Twice in a Lifetime    A drama series in which a celestial guardian, Mr. Smith
                       (Paul Popowich), gives lucky souls a second chance to change
                       their destiny.
Candid Camera          The updated version of the classic television series "Candid
                       Camera!" that is hosted by Peter Funt, son of original host
                       Allen Funt, and Dina Eastwood.
Next Big Star          A talent search program, hosted by Ed McMahon and produced
                       by George Schlatter (Laugh-In), bringing together bright new
                       stars-to-be for their shot at stardom.
The Ponderosa          Our newest series, a prequel to the popular series Bonanza.
                       This drama series picks up the story of the Cartwrights in
                       1849 and follows the family through the early years when
                       they first settled on a small piece of scrub land in the
                       wilds of the Nevada territory.
The Weakest Link       A quiz show in which eight contestants are quizzed on trivia
                       and general knowledge. At the end of each round, one of the
                       contestants is deemed "the weakest link" and voted off the
                       show (co-developed by NBC and us).
Supermarket Sweep      A game show where family members and friends race against
                       each other and the clock to win supermarket goods.
Shop 'Til You Drop     A game show which combines physical stamina, pricing
                       strategies and knowledge of retail items for the opportunity
                       to win a mad-dash shopping spree.


     Syndicated Programming.  We also broadcast syndicated programming during
prime time and other network hours. Our current lineup of syndicated programming
includes:

     - Bonanza

     - Diagnosis Murder

     - Remington Steele

     - Promised Land

     - Scarecrow & Mrs. King

     - Touched by an Angel

RATINGS

     The advertising revenues from our PAX TV operations are largely dependent
upon the popularity of our programming, in terms of audience ratings, and the
attractiveness of our PAX TV viewing audience to advertisers. Higher ratings
generally will enable us to charge higher rates to advertisers. Nielsen, one of
the leading providers of national audience measuring services, has grouped all
television stations in the country

                                        46


into approximately 210 DMAs that are ranked in size according to the number of
television households, and periodically publishes data on estimated audiences
for the television stations in the various DMAs. The estimates are expressed in
terms of the percentage of the total potential audience in the market viewing a
station (the station's "Rating") and of the percentage of the audience actually
watching television (the station's "Share"). Nielsen provides this data on the
basis of total television households and selected demographic groupings in the
DMA.

     The ratings for PAX TV's lineup of original and syndicated family
entertainment programming generally increased in the PAX TV 2000-2001 season
ended May 27, 2001 over the prior season in most time periods and for most
demographic groups which we target. Our prime time ratings increases primarily
were attributable to increases in the ratings for our original programming. For
the 2000-2001 season, ratings in the 8:00-9:00 p.m., Monday through Friday and
Sunday time slots, during which we aired our original programming, increased 39%
in total viewing households over last season. Among adults from ages 25-54, an
audience segment which we believe many advertisers find attractive, ratings for
our original programs increased by 54% over the ratings from last season in the
same time slots. Among adults from ages 18-49, ratings for our original
programming increased 60% over the ratings from last season in the 8:00-9:00
p.m. Monday through Friday and Sunday time periods. All of our other original
programs have improved their time period's viewing audience among adults from
ages 18-49 as well. Prime time ratings for our syndicated programming generally
have increased as well, although at a slower rate than the ratings growth of our
original programming.

     PAX TV's fourth season began September 9, 2001 with the series premiere of
The Ponderosa. Season to date, The Ponderosa has increased the year earlier time
period delivery among target demographic groups by 40%. In its second season on
PAX TV, Doc, starring Billy Ray Cyrus, has averaged 1.4 million homes and 2.0
million viewers. Doc has improved ratings among target demographics by 55%, year
to year, and is PAX TV's highest rated program in the 2001-2002 season. Overall,
with an average 1.3 million viewers in primetime, PAX TV is up 2% in season to
date audience delivery over the prior year period.

     Some viewer demographic groups are more attractive to advertisers than
others, such as adults of working age who typically have greater purchasing
power than other viewer demographic groups. Many products and services are
targeted to consumers with specific demographic characteristics, and a viewer
demographic group containing a concentration of these types of consumers
generally will be more attractive to advertisers. Based on our experiences with
PAX TV, advertisers often will pay higher rates to advertise during programming
that reaches demographic groups that are targeted by that advertiser. In
general, we believe that advertisers for many products and services, consider
adults from ages 25-54 to be one of the most desirable viewer demographic
groups. A significant component of our original programming strategy is to
develop and air programming that will increase PAX TV's ratings among the
demographic groups that are most attractive to advertisers.

     The table below shows our PAX TV ratings over our first three broadcast
seasons during prime time and during other network broadcast hours, for both
total viewing households and adults from ages 25-54.

PAX TV AUDIENCE DELIVERY



                                  1998-1999 SEASON      1999-2000 SEASON      2000-2001 SEASON
                                 -------------------   -------------------   -------------------
                                 RATING   % INCREASE   RATING   % INCREASE   RATING   % INCREASE
                                 ------   ----------   ------   ----------   ------   ----------
                                                                    
PRIME TIME(1)
Total Households...............   0.7         NA        0.8         14%       1.0         25%
Adults 25-54...................   0.3         NA        0.4         33%       0.5         25%
OTHER PARTS OF DAY(2)
Total Households...............   0.2         NA        0.4        100%       0.4          0%
Adults 25-54...................   0.1         NA        0.2        100%       0.2          0%


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

(1) 8:00-11:00 p.m., Monday through Saturday; and 7:00-11:00 p.m., Sunday.

(2) 1:00-8:00 p.m., Monday through Friday.

Source: Nielsen NTI 8/21/00-8/19/01; 8/22/99-8/20/00; 8/21/98-8/22/99

                                        47


ADVERTISING

     We sell commercial air time to advertisers who want to reach the entire
nationwide PAX TV viewing audience with a single advertisement. Most of our
network advertising is sold under advance, or "upfront," commitments to purchase
advertising time, which are obtained before the beginning of our PAX TV
programming season. NBC serves as our exclusive sales representative to sell
most of our network advertising. Network advertising represented approximately
33% of our revenue during the year ended December 31, 2001. The central
programming signal through which we supply PAX TV and other programming to our
stations and to cable and satellite viewers includes advertising, generally of a
direct response nature, which reaches our cable and satellite viewers (during
both PAX TV and other viewing hours) in markets not served by our stations
during time that is otherwise allocated to station spot advertising, and which
reaches viewers in local markets during unsold station spot advertising time. We
include the revenue from this advertising in our network advertising revenues.

     We also sell commercial air time to advertisers who want to reach the
viewing audience in specific geographic markets in which we operate. These
advertisers may be local businesses or regional or national advertisers who want
to target their advertising in these markets. NBC provides national advertising
sales services for a majority of our stations. In markets in which our stations
are operating under JSAs, our JSA partner serves as our exclusive sales
representative to sell our local station advertising. For stations for which NBC
does not provide national account representation, our JSA partner performs this
function. Our local sales force sells this advertising in markets without JSAs.
Our station spot advertising represented approximately 34% of our revenue during
the year ended December 31, 2001 (including 16% of our revenue during such year
which was derived from local and national long form paid programming).

     We believe that the average rates paid for air time by advertisers seeking
to target viewers within specific markets are generally higher per viewer than
those for a single commercial aired across an entire network. For example, based
on industry data for the first quarter of 2001, advertisers paid weighted
average rates per viewer for air time in the markets served by our stations
which were approximately 67% higher per viewer than the rate per viewer for a
single network advertisement. Since networks and station affiliates usually are
owned by different entities, the allocation of commercial spots between network
and station advertisers is relatively fixed by an affiliation agreement. With
respect to our owned and operated station group, however, we retain the
flexibility to allocate air time among various categories of advertisers and we
seek to maximize our advertising revenue by optimizing the mix of advertising
time sold to network and station advertisers.

     Our advertising rates are based upon:

     - the size of the market in which a station operates;

     - the ratings of the show during which the advertising will appear;

     - the number of advertisers competing for a time slot; and

     - the demographic composition of the market served by the station.

     We offer advertisers the opportunity to reach PAX TV's nationwide viewing
audience with a single commercial and to target their advertising to the
demographic groups with which our programming is most popular.

     We also sell long form paid programming, consisting primarily of
infomercials. This programming may appear on our entire television distribution
system or it may be aired only in specific markets. Network and regional paid
programming time is sold by our national long form sales team. Local paid
programming may be sold by our national sales team or by the local sales team at
each station.

NBC RELATIONSHIP

     On September 15, 1999, we entered into an investment agreement with NBC
under which wholly-owned subsidiaries of NBC purchased shares of our Series B
preferred stock and warrants to purchase shares of our common stock for an
aggregate purchase price of $415 million. At the same time, a wholly-owned
subsidiary of NBC entered into an agreement with Mr. Paxson and entities
controlled by Mr. Paxson, under which the NBC subsidiary was granted the right
to purchase all, but not less than all, of the 8,311,639 shares of our Class B
common stock beneficially owned by Mr. Paxson. This right is exercisable through
September 15,

                                        48


2009. These shares of Class B common stock are entitled to ten votes per share
on all matters submitted to a vote of our stockholders and are convertible into
an equal number of shares of Class A common stock. The purchase price per share
of Class B common stock is equal to the higher of:

     - the average of the closing sale prices of the Class A common stock for
       the 45 consecutive trading days ending on the trading day immediately
       preceding the exercise of NBC's call right, provided that the average
       price shall not be more than 17.5% higher or 17.5% lower than the six
       month trailing average closing sale prices; and

     - $22.50 per share for any shares purchased on or before September 15,
       2002, and $20.00 per share for shares purchased after that date.

     The owners of the shares that are subject to the call right have agreed not
to transfer those shares before September 15, 2005, and not to convert those
shares into any of our other securities, including shares of Class A common
stock. NBC's exercise of the call right is subject to compliance with applicable
provisions of the Communications Act and the rules and regulations of the FCC.

     Under the investment agreement, a wholly-owned subsidiary of NBC acquired
$415 million aggregate liquidation preference of our Series B preferred stock,
which accrues cumulative dividends at an annual rate of 8% and is convertible,
subject to adjustment under the terms of the Series B preferred stock, into
31,896,032 shares of our Class A common stock at an initial conversion price of
$13.01 per share ($15.40 per share as of December 31, 2001). The Series B
preferred stock is exchangeable at the option of the holder at any time, subject
to various conditions, into our 8% exchange debentures. A wholly-owned
subsidiary of NBC also acquired a warrant ("Warrant A") to purchase up to
13,065,507 shares of Class A common stock at an exercise price of $12.60 per
share, and a warrant ("Warrant B") to purchase up to 18,966,620 shares of Class
A common stock at an exercise price equal to the average of the closing sale
prices of the Class A common stock for the 45 consecutive trading days ending on
the trading day immediately preceding the warrant exercise date, provided that
the average price shall not be more than 17.5% higher or 17.5% lower than the
six month trailing average closing sale price, subject to a minimum exercise
price during the three years ending September 15, 2002, of $22.50 per share. The
warrants are exercisable until September 2009 subject to various conditions and
limitations. In addition:

     - Warrant B may not be exercised before the exercise in full of Warrant A;
       and

     - Warrant B may not be exercised to the extent that, after giving effect to
       the exercise, Mr. Paxson would no longer constitute our "single majority
       stockholder" unless Warrant B is exercised in full and at the same time
       NBC exercises its right to purchase all the shares of our Class B common
       stock held by Mr. Paxson.

     NBC has the right, at any time that the FCC renders a final decision that
NBC's investment in us is "attributable" to NBC (as that term is defined under
applicable rules of the FCC), or for a period of 60 days beginning on September
15, 2002 and on each September 15 thereafter, to demand that we redeem, or
arrange for a third party to acquire, any shares of our Series B preferred stock
then held by NBC (an "Involuntary Redemption"). If NBC exercises this right, we
will have up to one year to consummate the redemption, except that if at any
time during the one year period, the terms of our outstanding debt and preferred
stock do not prohibit the redemption and we have sufficient funds on hand to
consummate the redemption, we must consummate the redemption at that time. NBC
may not exercise Warrant A, Warrant B or its right to purchase shares of Class B
common stock beneficially owned by Mr. Paxson during the one year redemption
period.

     NBC also has the right to require that we redeem any Series B preferred
stock and Class A common stock issued upon conversion of the Series B preferred
stock then held by NBC upon the occurrence of various events of default (a
"Default Redemption"). If NBC exercises this right, we will have up to 180 days
to consummate the redemption, except that if at any time during the 180 day
period, the terms of our outstanding debt and preferred stock do not prohibit
the redemption and we have sufficient funds on hand to consummate the
redemption, we must consummate the redemption at that time. NBC may not exercise
Warrant A, Warrant B or its right to purchase shares of Class B common stock
beneficially owned by Mr. Paxson during the 180 day redemption period.

                                        49


     Our ability to effect any redemption is restricted by the terms of our
outstanding debt and preferred stock. Were NBC to exercise its right to demand
that we redeem its Series B preferred stock, in order to be able to do so we
would need to not only raise sufficient cash to fund payment of the redemption
price, but would also need to obtain the consents of the holders of our
outstanding debt and preferred stock or repay, redeem or refinance these
securities in a manner that obviated the need to obtain the consents of the
holders. Alternatively, we would need to identify a third party willing to
purchase NBC's Series B preferred stock directly from NBC or to enter into a
merger, acquisition or other transaction with us as a result of which NBC's
Series B preferred stock would be redeemed or acquired at the stated redemption
price.

     Should we fail to effect an Involuntary Redemption within one year after
NBC has exercised its right to demand that we redeem its securities, NBC will
again be permitted to exercise Warrant A and Warrant B and its right to acquire
Mr. Paxson's Class B common stock, and generally will be permitted to transfer,
without restriction, any of our securities acquired by it, its right to acquire
Mr. Paxson's Class B common stock, the contractual rights described below, and
its other rights under the related transaction agreements, provided that Warrant
A, Warrant B and the right to acquire Mr. Paxson's Class B common stock shall
expire, to the extent unexercised, 30 days after any such transfer.

     Should we fail to effect a Default Redemption within 180 days after NBC has
exercised its right to require us to redeem its securities, NBC will have 180
days within which to exercise Warrant A and Warrant B and its right to acquire
Mr. Paxson's Class B common stock, and generally will be permitted to transfer,
without restriction, any of our securities acquired by it, its right to acquire
Mr. Paxson's Class B common stock, the contractual rights described below, and
its other rights under the related transaction agreements, provided that Warrant
A, Warrant B and the right to acquire Mr. Paxson's Class B common stock shall
expire, to the extent unexercised, 30 days after any such transfer. If NBC does
not effect any of these transactions within the 180 day period, we will have the
right, for 30 days, to redeem NBC's securities. If we do not effect a redemption
during this period, NBC will have the right to require us to effect, at our
option, either a public sale or a liquidation of our company and may participate
as a bidder in any such transaction. If the highest bid in any public sale of
our company would be insufficient to pay NBC the redemption price of its
securities, NBC will have a right of first refusal to purchase our company for
the highest bid amount. NBC will not be permitted to exercise Warrant A, Warrant
B or its right to acquire Mr. Paxson's Class B common stock during the public
sale or liquidation process.

     The investment agreement also provides that we must obtain the consent of
NBC for various actions, including:

     - approval of annual budgets;

     - expenditures materially in excess of budgeted amounts;

     - material acquisitions of programming;

     - material amendments to our certificate of incorporation or bylaws;

     - material asset sales or purchases, including, in some cases, sales of our
       television stations;

     - business combinations where we would not be the surviving corporation or
       as a result of which we would experience a change of control;

     - issuances or sales of any capital stock, with some exceptions;

     - stock splits or recombinations;

     - any increase in the size of our board of directors other than any
       increase resulting from provisions of our outstanding preferred stock of
       up to two additional directors; and

     - joint sales, joint services, time brokerage, local marketing or similar
       agreements as a result of which our stations with national household
       coverage of 20% or more would be subject to those agreements.

     In connection with its investment in us, we also granted NBC various rights
with respect to our broadcast television operations, including:

     - the right to require the conversion of our television stations to NBC
       network affiliates, subject to various conditions;

                                        50


     - a right of first refusal on proposed sales of television stations; and

     - the right to require our television stations to carry NBC network
       programming that is preempted by NBC network affiliates.

     We also entered into a stockholders agreement with NBC, Mr. Paxson and
entities controlled by Mr. Paxson under which we are permitted (but not
required) to nominate persons named by NBC for election to our board of
directors upon request by NBC if NBC determines that its nominees are permitted
under the Communications Act and FCC rules to serve on our board. Mr. Paxson and
his affiliates agreed to vote their shares of common stock in favor of the
election of those persons as our directors. The stockholders agreement further
provides that we will not, without the prior written consent of NBC, enter into
certain agreements or adopt certain plans which would be breached or violated
upon the acquisition of our securities by NBC or its affiliates or would
otherwise restrict or impede the ability of NBC or its affiliates to acquire
additional shares of our capital stock.

     We also granted NBC demand and piggyback registration rights with respect
to the shares of Class A common stock issuable upon:

     - conversion of the Series B preferred stock;

     - conversion of the debentures for which the Series B preferred stock is
       exchangeable;

     - exercise of the warrants; or

     - conversion of the Class B common stock.

     In connection with these transactions, we entered into a number of business
arrangements with NBC that were intended to strengthen our operations. As part
of these arrangements and our relationship with NBC:

     - NBC provides network advertising sales, marketing and network research
       services for PAX TV;

     - NBC provides national advertising sales services for a majority of our
       stations;

     - NBC provides some of its programming, including movies and sporting
       events, for broadcast on PAX TV; and

     - We have entered into JSAs with NBC with respect to 13 of our stations
       serving 11 markets also served by an NBC owned and operated station, and
       with 33 independently owned NBC affiliated stations serving our markets.
       Under the JSAs, the NBC stations sell all non-network advertising of our
       stations and receive commission compensation for those sales, and each of
       our stations may carry one hour per day of NBC syndicated programming,
       subject to compliance with our family programming content standards.

     In December 2001, we commenced a binding arbitration proceeding against NBC
in which we asserted that NBC has breached its agreements with us and has
breached its fiduciary duty to us and to our shareholders. We have asserted that
NBC's proposed acquisition of Telemundo Communications Group, Inc. ("Telemundo
Group") violates the terms of the agreements governing the investment and
partnership between us and NBC. We also made two filings with the FCC, one of
which requests a declaratory ruling as to whether conduct by NBC, including
NBC's influence and apparent control over certain members of our board of
directors selected by NBC (all of whom have since resigned from our board), has
caused NBC to have an attributable interest in us in violation of FCC rules or
has infringed upon our rights as an FCC license holder. The second FCC filing
seeks to deny FCC approval of NBC's acquisition of the Telemundo Group's
television stations. In addition, in January 2002, we filed a petition to deny
with the FCC arguing that NBC was ineligible under FCC regulations to acquire
control of television station KNTV-TV, San Jose, California from Granite
Broadcasting Corp. due to NBC's attributable interest in the Company.

     The initiation of these proceedings by us casts significant uncertainty
over the future direction of our relationship with NBC. The hearing in the
arbitration proceeding is currently scheduled to occur in April 2002, and we
expect that, under the applicable arbitration rules, the arbitrator will render
a decision by the end of May 2002. If we do not prevail in the arbitration
proceeding, and our position expressed in the FCC filings is not accepted by the
FCC, NBC could consummate the acquisition of the Telemundo Group and thereby
render it highly unlikely that NBC would be able to acquire control of our
company under the terms of the

                                        51


existing agreement, while at the same time retaining its investment in us and
its ability to exercise a significant influence over our operations.

COMPETITION

     We compete for audience and advertisers and our television stations are
located in highly competitive markets and face strong competition on all levels.

     Audience.  Television stations compete for audience share principally on
the basis of program popularity, which has a direct effect on advertising rates.
Our PAX TV programming competes for audience share in all of our markets with
the programming offered by other broadcast networks, and competes for audience
share in our stations' respective market areas with the programming offered by
non-network affiliated television stations. Our other programming also competes
for audience share in our stations' respective market areas principally with the
non-network programming offered by other television stations. We believe our
stations also compete for audience share in their respective markets on the
basis of their channel positions on the cable systems which carry our
programming, and that the ability to view our programming on the lower numbered
channel positions (generally below channel 30) generally improves the likelihood
that viewers will watch our programming.

     Our stations also compete for audience share with other forms of
entertainment programming, including home entertainment systems and direct
broadcasting satellite video distribution services which transmit programming
directly to homes equipped with special receiving antennas and tuners. Further
advances in technology may increase competition for household audiences.

     Advertising.  Advertising rates are based upon:

     - the size of the market in which the station operates;

     - a program's popularity among the viewers that an advertiser wishes to
       attract;

     - the number of advertisers competing for the available time;

     - the demographic makeup of the market served by the station;

     - the availability of alternative advertising media in the market area; and

     - development of projects, features and programs that tie advertiser
       messages to programming.

PAX TV competes for advertising revenues principally with other television
broadcast networks and to some degree with other nationally distributed
advertising media, such as print publications. During the annual "up front"
process, broadcast networks seek to obtain advance commitments from advertisers
to purchase network commercial air time, and competition occurs principally on
the basis of the advertisers' perception of the anticipated popularity (i.e.,
ratings) of a network's programming for the upcoming broadcast season and the
demographic groups to which the programming is expected to appeal.

     Our television stations also compete for advertising revenues with other
television stations in their respective markets, as well as with other
advertising media, such as newspapers, radio stations, magazines, outdoor
advertising, transit advertising, yellow page directories, direct mail and local
cable systems. Competition for advertising dollars at the television station
level occurs primarily within individual markets. Generally, a television
station in one market does not compete with stations in other market areas.

FEDERAL REGULATION OF BROADCASTING

     The FCC regulates television broadcast stations under the Communications
Act. The following is a brief summary of certain provisions of the
Communications Act and the rules of the FCC.

     License Issuance and Renewal.  The Communications Act provides that a
broadcast station license may be granted to an applicant if the public interest,
convenience and necessity will be served thereby, subject to certain
limitations. Television broadcast licenses generally are granted and renewed for
a period of eight years. Interested parties including members of the public may
file petitions to deny a license renewal application but competing applications
for the license will not be accepted unless the current licensee's renewal
application is denied. The FCC is required to grant a license renewal
application if it finds that the licensee (1) has served the public interest,
convenience and necessity; (2) has committed no serious violations of the
Communica-
                                        52


tions Act or the FCC's rules; and (3) has committed no other violations of the
Communications Act or the FCC's rules which would constitute a pattern of abuse.
Our licenses are subject to renewal at various times between 2004 and 2007.

     General Ownership Matters.  The Communications Act requires the prior
approval of the FCC for the assignment of a broadcast license or the transfer of
control of a corporation or other entity holding a license. In determining
whether to approve such an assignment or transfer of control, the FCC considers,
among other things, the financial and legal qualifications of the prospective
assignee or transferee, including compliance with rules limiting the common
ownership of certain attributable interests in broadcast, cable and newspaper
properties.

     The FCC's multiple ownership rules may limit the acquisitions and
investments that we may make or the investments that others may make in us. The
FCC generally applies its ownership limits to attributable interests held by an
individual, corporation, partnership or other association or entity. In the case
of corporations holding or controlling broadcast licenses, the interests of
officers, directors and those who, directly or indirectly, have the right to
vote five percent or more of the corporation's stock are generally attributable.
The FCC treats all partnership and limited liability company interests as
attributable, except for those interests that are insulated under FCC rules and
policies. For insurance companies, certain regulated investment companies and
bank trust departments that hold stock for investment purposes only, stock
interests become attributable with the ownership of 20% or more of the voting
stock of the corporation holding or controlling broadcast licenses.

     In December 2000, the FCC eliminated its "single majority shareholder"
exception to its attribution rules prospectively. Under that exception, the FCC
generally did not treat any minority voting shareholder as attributable if one
person or entity (such as Mr. Paxson in the case of our company) held more than
50% of the combined voting power of the common stock of a company holding or
controlling broadcast licenses. Under the FCC's new rule, a person who acquired
a minority voting interest in a company holding or controlling broadcast
licenses before December 14, 2000, will not have that interest treated as
attributable for purposes of the FCC's ownership rules so long as a majority
shareholder of the corporation (such as Mr. Paxson in the case of our company)
continues to hold more than 50% of the combined voting power of the corporation.
This exception for a minority interest acquired before December 14, 2000, will
be permanent until the interest is transferred or assigned. We filed with the
FCC a petition for reconsideration of the decision, and in March 2001, the U.S.
Court of Appeals for the D.C. Circuit reversed and remanded a decision by the
FCC to eliminate the single majority shareholder exception as it applies to the
ownership of cable systems. On December 14, 2001, the FCC suspended the repeal
of the single majority shareholder exception for broadcast attribution rules
pending resolution of certain ownership issues being considered in a separate
rulemaking proceeding. We cannot predict at this time the rules the FCC may
adopt or how they will affect the single majority shareholder exception as it
applies to the ownership of broadcast stations.

     The FCC treats as attributable debt and equity interests which combined
exceed 33% of a station licensee's total assets, defined as the total amount of
debt and equity capital, if the party holding the equity and debt interests (1)
supplies more than 15% of the station's total weekly programming or (2) has an
attributable interest in another media entity, whether television, radio, cable
or newspaper, in the same market. Non-voting equity, loans, and insulated
interests count toward the 33% equity/debt threshold. Non-conforming interests
acquired before November 7, 1996, are permanently grandfathered for purposes of
the equity/debt rules and thus do not constitute attributable ownership
interests.

     Television National Ownership Rule.  Under FCC rules, no individual or
entity may have an attributable interest in television stations reaching more
than 35% of the national television viewing audience. The FCC applies a 50%
discount for purposes of calculating a UHF station's audience reach. If a
broadcast licensee has an attributable interest in a second television station
in any of its markets, the audience for that market will not be counted twice
for the purposes of determining compliance with the national cap. The
constitutionality of the television national ownership rule was challenged in
federal court and in February 2002, the U.S. Court of Appeals for the District
of Columbia Circuit held that the reasons the FCC gave for deciding not to
repeal or modify its national ownership cap rule as part of its biennial rules
review were inadequate and therefore not in compliance with a provision of the
Communications Act that requires the FCC to review its rules every two years and
to repeal or modify any that are no longer in the public interest. The court did
not find the rule to be

                                        53


unconstitutional, but instructed the FCC to consider what further action it
should take with respect to the 35% cap and what reasons it will provide to
support its decision.

     Television Duopoly Rule.  The FCC's television duopoly rule permits a party
to own two television stations without regard to signal contour overlap if each
of the stations is located in a separate designated market area, or DMA. A party
may own two television stations in the same DMA so long as (1) at least eight
independently owned and operating full-power commercial and non-commercial
television stations remain in the market at the time of acquisition and (2) at
least one of the two stations is not among the four top-ranked stations in the
market based on audience share. Without regard to numbers of independently owned
television stations, the FCC permits television duopolies within the same DMA so
long as the stations' Grade B service contours do not overlap. Satellite
stations that are authorized to rebroadcast the programming of a "parent"
station located in the same DMA are also exempt from the duopoly rule. The FCC's
television duopoly rule has been challenged by another broadcasting company in a
proceeding currently pending in the U.S. Court of Appeals for the District of
Columbia Circuit.

     Television Time Brokerage and Joint Sales Agreements.  Over the past few
years, a number of television stations, including certain of our television
stations, have entered into agreements commonly referred to as time brokerage
agreements and joint sales agreements. Under these agreements, separately owned
and licensed stations agree to function cooperatively subject to the
requirements of antitrust laws and compliance with the FCC's rules and policies,
including the requirement that each party maintain independent control over the
programming and operations of its own station. The FCC's attribution and
television duopoly rules apply to time brokerage agreements in which one station
brokers more than 15% of the broadcast time per week of another station with an
overlapping Grade B contour. Time brokerage agreements that were in effect on
August 5, 1999, are exempt from the television duopoly rule for a limited period
of time of either two or five years, depending on the date of the time brokerage
agreement.

     Alien Ownership.  Under the Communications Act, no FCC broadcast license
may be held by a corporation of which more than one-fifth of its capital stock
is owned or voted by aliens or their representatives or by a foreign government
or its representative, or by any corporation organized under the laws of a
foreign country (collectively "Aliens"). Furthermore, the Communications Act
provides that no FCC broadcast license may be granted to any corporation
controlled by any other corporation of which more than one-fourth of its capital
stock is owned of record or voted by Aliens if the FCC should find that the
public interest would be served by the refusal of the license.

     Cross Ownership Rules.  The FCC's rules prohibit a party from holding
attributable interests in (1) a television station and a cable television
system, or (2) a television or radio station and a daily newspaper, in each
case, in the same local market. The FCC rules also limit the number of commonly
owned radio and television stations in the same market depending upon the number
of independently owned media voices in that market. In February 2002, the U.S.
Court of Appeals for the District of Columbia Circuit held that there was no
basis for the FCC's refusal to repeal or modify the rule prohibiting local cross
ownership of television stations and cable television systems. The court's
decision vacating the rule will take effect on April 5, 2002, unless any party
files a petition for rehearing by that date, in which case the effectiveness of
the decision is likely to be postponed pending the outcome of the petition for
rehearing. While the FCC will be free to undertake a rulemaking proceeding to
adopt a new version of the rule, unless and until it does adopt a new rule,
there will be no prohibition on television station and cable television system
cross ownership in local markets. The FCC has issued a notice that it intends to
consider proposing new rules modifying the prohibition on broadcast station and
daily newspaper cross ownership. We are unable to predict the outcome of the
foregoing or the effect, if any, changes would have upon our business.

     Dual Network Rule.  FCC rules permit any of the four major networks (ABC,
CBS, Fox or NBC) to acquire the UPN or WB networks. Nothing in the rules
presently prohibits one of the four major networks from establishing a new
network or from purchasing a network ranking below the top six networks. The
dual network rule continues to prohibit a merger between any two or more of the
top four networks.

     Biennial Review of Broadcast Ownership Rules.  The Communications Act
requires the FCC to undertake a biennial review of its broadcast ownership
rules. In the review completed in June 2000, the FCC declined to amend the
national television ownership and the local television station and cable
television system cross ownership rules, but stated it would begin rule making
proceedings to relax the standards for waiving the daily newspaper/broadcast
cross ownership rule. In February 2002, the U.S. Court of Appeals for the
District
                                        54


of Columbia Circuit held that the reasons the FCC gave for declining to amend
the national ownership cap rule and its failure to repeal or modify the rule
prohibiting local television station and cable television system cross ownership
were not in compliance with the biennial review provisions of the Communications
Act. The court vacated the local television station and cable television system
cross ownership prohibition and instructed the FCC to consider what further
action it should take with respect to the 35% national ownership cap. The FCC
has issued a notice of proposed rule making to determine whether and to what
extent the daily newspaper/broadcast cross ownership rules should be revised.
Our expansion of our broadcast operations on both a local and national level and
the level of competition we face will continue to be subject to the FCC's
ownership rules and any changes that may be adopted. We cannot predict the
ultimate outcome of the FCC's ownership proceedings or the effect of these or
other changes on our business operations.

     Programming and Operation.  The Communications Act requires broadcasters to
present programming that responds to community problems, needs and interests and
to maintain certain records demonstrating its responsiveness. Stations also must
follow various rules that regulate, among other things, obscene and indecent
broadcasts, sponsorship identification, the advertising of contests and
lotteries and technical operations, including limits on radio frequency
radiation.

     The FCC's rules limit the amount of advertising in television programming
designed for children 12 years of age and under and require that television
broadcast stations air specified amounts of programming during specified time
periods to serve the educational and informational needs of children 16 years of
age and under.

     The Communications Act and FCC rules also regulate the broadcasting of
political advertisements by television stations. Stations must provide
"reasonable access" for the purchase of time by legally qualified candidates for
federal office and "equal opportunities" for the purchase of equivalent amounts
of comparable broadcast time by opposing candidates for the same elective
office. Before primary and general elections, legally qualified candidates for
elective office may be charged no more than the station's "lowest unit charge"
for the same class of advertisement, length of advertisement and daypart.

     The U.S. Congress presently is considering amending the political
advertising law by changing the statutory definition of "lowest unit charge" in
a manner which would require television stations to sell time to federal
political candidates at lower rates. We are unable to predict whether changes to
the law will be enacted or the effect, if any, such changes would have upon our
business.

     Equal Employment Opportunity Requirements.  In early 2000, the FCC adopted
revised rules requiring broadcast licensees to develop and implement programs
designed to promote equal employment opportunities and submit reports on these
matters to the FCC. The United States Court of Appeals for the District of
Columbia Circuit has struck down the recruitment, outreach and reporting
portions of these rules as unconstitutional and the FCC has suspended the
enforcement of the rules pending further developments. In December 2001, the FCC
issued a rulemaking notice proposing new equal employment opportunity rules
requiring broadcast licensees to affirmatively recruit minorities and imposing
certain record-keeping and reporting requirements. The general prohibition
against discrimination in employment remains in effect.

     "Must Carry"/Retransmission Consent Regulations.  Under the Communications
Act, every local commercial television broadcast stations must elect once every
three years to require a cable system to carry the station subject to certain
exceptions, or to negotiate for retransmission consent to carry the station.
Stations' "must carry" rights are not absolute, and their exercise depends on
variables such as the number of activated channels on a cable system, the
location and size of a cable system, the amount of duplicative programming on a
broadcast station and the signal quality of the station at the cable system's
headend. Alternatively, if a broadcaster chooses to exercise retransmission
consent rights, it can prohibit cable systems from carrying its signal or grant
the cable system consent to retransmit the broadcast signal for a fee or other
consideration. Our television stations have generally elected the "must carry"
alternative. Our elections of retransmission or "must carry" status will
continue until the next election period, which commences on January 1, 2003.

     In an ongoing rulemaking proceeding, the FCC is considering rules to govern
the obligations of cable television systems to carry the analog and digital
television, or DTV, signals of local television stations or to obtain
retransmission consent to carry those signals during and following the
transition from analog to DTV broadcasting. In an initial order in the
proceeding, the FCC tentatively concluded that broadcasters would not be
entitled to mandatory carriage of both their analog and DTV signals and that
broadcasters with multiple

                                        55


DTV video programming streams would be required to designate a single, primary
video stream eligible for mandatory carriage. Alternatively, television
licensees may negotiate with cable television systems for carriage of their DTV
signal in addition to their analog signal under retransmission consent.

     Under retransmission consent agreements, our television stations are also
carried as distant signals on cable systems which are located outside of the
stations' markets. Cable systems must remit a compulsory license royalty fee to
the United States Copyright Office to carry our stations in these distant
markets. We have filed a request with the Copyright Office to change our
stations' status under the compulsory license from "independent" to "network"
signals. If the Copyright Office grants our request, certain cable systems may
transmit our stations at reduced royalty rates. We cannot determine when the
Copyright Office will act on this request, or whether we will receive a
favorable ruling.

     Satellite Carriage of Television Broadcast Signals.  Under the Satellite
Home Viewer Improvement Act, which we refer to as SHVIA, a satellite carrier
must obtain retransmission consent before carrying a television station, and
beginning January 1, 2002, a satellite carrier delivering the signal of any
local television station will be required to carry all stations licensed to the
carried station's local market. The FCC recently adopted rules implementing
SHVIA that are similar to the must-carry and retransmission consent rules that
apply to cable television systems. Under the new rules, stations may elect
either mandatory carriage or negotiation for retransmission consent. The first
election period is four years, with subsequent election periods set at three
years to coincide with the cable election period. We have elected, effective
January 1, 2002, mandatory carriage with respect to our stations. Two satellite
television providers and a satellite broadcasting trade association have
instituted litigation challenging the constitutionality of the statutory
satellite "must carry" requirements. In June 2001 a federal district court
upheld the constitutionality of the federal law and in December 2001 the U.S.
Court of Appeals for the Fourth Circuit affirmed this decision. The proponents
of this litigation have petitioned the U.S. Supreme Court for review of this
decision.

     Digital Television Service.  The FCC has adopted rules for the
implementation of DTV service, a technology which is intended to improve the
quality of television broadcast signals. Each (i) full service television
licensee, (ii) permittee authorized as of October 24, 1991 and (iii) entity
awarded a license for a station for which an application for a construction
permit was on file as of October 24, 1991 was allotted a second channel for its
DTV operations. Each such licensee and permittee must return one of its two
channels at the end of the DTV transition period currently scheduled to end on
December 31, 2006. The transition period could be extended in certain areas
depending generally on the level of DTV market penetration or if the FCC or
Congress changes the schedule. Except for stations operating analog facilities
in the 700 MHz spectrum band and those stations allotted a digital channel in
the 700 MHz spectrum band, the FCC has established a schedule by which
broadcasters must begin DTV service absent extenuating circumstances that may
affect individual stations. Each of our stations applied for a DTV construction
permit before November 1, 1999. In November 2001 the FCC modified its digital
television transition rules to provide that a station would be in compliance
with its build-out requirement, without constructing the full authorized
facilities, so long as, by May 1, 2002, it constructed digital facilities
capable of serving its community of license with a signal of requisite strength.
The date by which digital facilities replicating a station's analog service area
must be constructed will be set by the FCC at a later date. The FCC, by order
released September 17, 2001, authorized analog stations operating in the 700 MHz
spectrum band to operate their analog signal on the channel assigned for digital
service and to delay the institution of digital service until December 31, 2005,
or later than December 31, 2005 if it can be demonstrated that less than 70% of
the television households in the station's market are capable of receiving
digital broadcast signals. Broadcasters given a digital channel allocation
within the 700 MHz band may forego the use of that channel for digital service
until December 31, 2005, or later than December 31, 2005 if it can be
demonstrated that less than 70% of the television households in the station's
market are capable of receiving digital broadcast signals. Broadcasters left
with a single-channel allotment as a result of clearing the 700 MHz spectrum
band will retain the interference protection associated with their digital
television channel allotment for a period of 31 months after beginning to
transmit in digital.

     The FCC has adopted rules permitting DTV licensees to offer "ancillary or
supplementary services" on their DTV channels, so long as such services are
consistent with the FCC's DTV standards, do not derogate required DTV services,
and are regulated in the same manner as similar non-DTV services. The FCC's
rules require that DTV licensees pay a fee (based on revenues) for any
subscription-based services that are provided.
                                        56


     The FCC also has commenced a proceeding to consider additional public
interest obligations for television stations as they transition to digital
broadcast television operation. The FCC is considering various proposals that
would require DTV stations to use digital technology to increase program
diversity, political discourse, access for disabled viewers and emergency
warnings and relief. If these proposals are adopted, our stations may be
required to increase their current level of public interest programming, which
generally does not generate as much revenue from commercial advertisers.

     Class A Television.  In November 1999, Congress passed the Community
Broadcasters Protection Act of 1999, which directs the FCC to offer a new Class
A status to qualifying low power television stations. The FCC's rules grant
Class A stations a measure of interference protection against full power and
other low power television stations. The protected status of Class A stations
could limit our ability to modify our television facilities in the future and
could affect any pending applications for new or modified facilities to the
extent that changes proposed by us would create interference to qualifying Class
A stations. Class A stations will not be protected from interference from DTV
stations proposing to maximize their DTV service, provided the DTV stations
notified the FCC of their intent to maximize facilities no later than December
31, 1999, and filed a maximization application by May 1, 2000.

     Proposed Changes.  Congress and the FCC have under consideration, and may
in the future adopt, new laws, regulations and policies regarding a wide variety
of matters that could, directly or indirectly, affect our operation, ownership
and profitability of our company and our television broadcast stations. We
cannot predict what other matters may be considered in the future, nor can we
judge in advance what impact, if any, the implementation of any of these
proposals or changes might have on our business.

EMPLOYEES

     As of December 31, 2001, we had 609 full-time employees and 63 part-time
employees. The substantial majority of our employees are not represented by
labor unions. We consider our relations with our employees to be good.

SEASONALITY

     Seasonal revenue fluctuations are common within the television broadcasting
industry and result primarily from fluctuations in advertising expenditures. We
believe that generally television advertisers spend relatively more for
commercial advertising time in the second and fourth calendar quarters and spend
relatively less during the first calendar quarter of each year.

TRADEMARKS AND SERVICE MARKS

     We have 14 registered trademarks and service marks and pending applications
for registration of another 52 trademarks and service marks. We do not own any
patents or have any pending patent applications.

PROPERTIES AND FACILITIES

     Our corporate headquarters is located in West Palm Beach, Florida. We have
a satellite up-link facility through which we supply our central programming
feed, including PAX TV, to satellite transmitters which relay the signal to our
stations. Our satellite up-link facility is located on leased property in
Clearwater, Florida.

     Each of our stations has a facility in the market in which it operates at
which the central programming feed is received and retransmitted in its market.
Each of our stations broadcasts its signal from a transmission tower or antenna
situated on a transmitter site. Each station also has an office and studio and
related broadcasting equipment. For those stations with respect to which we have
entered into JSA's, we have vacated or expect to vacate the leased studio and
office facilities of our stations as we co-locate our operations with those of
our JSA partner. We generally lease our broadcast transmission towers and own
substantially all of the equipment used in our broadcasting operations. Our
tower leases have expiration dates that range generally from two to twenty
years. We do not anticipate any difficulties in renewing those leases that
expire within the next several years or in leasing other space, if required.

     Our antenna, transmitter and other broadcast equipment for our New York
television station (WPXN) were destroyed upon the collapse of the World Trade
Center on September 11, 2001. We are currently
                                        57


broadcasting from towers outside of Manhattan at substantially lower height and
power. We are evaluating several alternatives to improve our signal through
transmission from other locations, however we expect it could take several years
to replace the signal we enjoyed at the World Trade Center location with a
comparable signal. We have property and business interruption insurance coverage
to mitigate the losses sustained.

     We believe our existing facilities are adequate for our current and
anticipated future needs. No single property is material to our overall
operations.

LEGAL PROCEEDINGS

     We are involved in litigation from time to time in the ordinary course of
our business. We believe the ultimate resolution of these matters will not have
a material effect on our financial position or results of operations or cash
flows.

     In October, November and December 1999, complaints were filed in the 15th
Judicial Circuit Court in Palm Beach County, Florida, in the Court of Chancery
of the State of Delaware and in Superior Court of the State of California
against certain of our officers and directors by alleged stockholders of our
company alleging breach of fiduciary duty by the directors in approving the
September 1999 transactions with NBC. The complaints asserted nearly identical
purported class and derivative claims and generally alleged that the directors
rejected a takeover offer and instead completed the NBC transactions, thereby
precluding the plaintiffs from obtaining a premium price for their shares. The
complaints sought to rescind the NBC transactions, to require us to pursue other
acquisition offers and to recover damages. In July 2001, the four actions in
Delaware were dismissed by the court. In August 2001, the Florida action was
voluntarily dismissed. In January 2002, the California action was voluntarily
dismissed.

     In December 2001, we commenced a binding arbitration proceeding against NBC
in which we asserted that NBC has breached its agreements with us and has
breached its fiduciary duty to us and to our shareholders. We have asserted that
NBC's proposed acquisition of Telemundo Group violates the terms of the
agreements governing the investment and partnership between us and NBC. We also
made two filings with the FCC, one of which requests a declaratory ruling as to
whether conduct by NBC, including NBC's influence and apparent control over
certain members of our board of directors selected by NBC (all of whom have
since resigned from our board), has caused NBC to have an attributable interest
in us in violation of FCC rules or has infringed upon our rights as an FCC
license holder. The second FCC filing seeks to deny FCC approval of NBC's
acquisition of the Telemundo Group's television stations.

     The initiation of these proceedings by us casts significant uncertainty
over the future direction of our relationship with NBC. The hearing in the
arbitration proceeding is currently scheduled to occur in April 2002, and we
expect that, under the applicable arbitration rules, the arbitrator will render
a decision by the end of May 2002. If we do not prevail in the arbitration
proceeding, and our position expressed in the FCC filings is not accepted by the
FCC, NBC could consummate the acquisition of the Telemundo Group and thereby
render it highly unlikely that NBC would be able to acquire control of our
company, while at the same time retaining its investment in us and its ability
to exercise a significant influence over our operations.

                                        58


                                   MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

     Set forth below is information concerning our directors and executive
officers.



NAME                                        AGE                      TITLE
- ----                                        ---                      -----
                                            
Lowell W. Paxson..........................  66    Chairman of the Board, Class I Director
Jeffrey Sagansky..........................  50    President, Chief Executive Officer, Class I
                                                  Director
Dean M. Goodman...........................  54    Executive Vice President and Chief
                                                  Operating Officer
Anthony L. Morrison.......................  40    Executive Vice President, Secretary, Chief
                                                  Legal Officer
Seth A. Grossman..........................  37    Executive Vice President, Chief Strategic
                                                  Officer
Thomas E. Severson, Jr....................  38    Senior Vice President, Chief Financial
                                                  Officer
Ronald L. Rubin...........................  36    Vice President, Chief Accounting Officer,
                                                  Corporate Controller
Henry J. Brandon..........................  44    Class I Director
Bruce L. Burnham..........................  68    Class II Director
James L. Greenwald........................  75    Class II Director
John E. Oxendine..........................  59    Class II Director


     Our board of directors is comprised of three classes, each consisting of
three directors. Each director is elected for a three year term. Terms of all
Class I directors expire at the annual meeting in 2004. Terms of all Class II
directors expire at the annual meeting in 2002. Terms of all Class III directors
expire at the annual meeting in 2003. We currently have no Class III directors.
R. Brandon Burgess, Keith G. Turner and Royce E. Wilson, all of whom are
employees of NBC, resigned as Class III directors during November and December,
2001.

     Lowell W. Paxson.  Mr. Paxson has been our Chairman of the Board since 1991
and was our Chief Executive Officer from 1991 to 1998. Mr. Paxson was a
co-founder of Home Shopping Network, Inc. and served as its President from 1985
to 1990.

     Jeffrey Sagansky.  Mr. Sagansky has been our President, Chief Executive
Officer and a director since 1998. Mr. Sagansky was Co-President of Sony
Pictures Entertainment, a producer of film and video programming, from 1996 to
1997.

     Dean M. Goodman.  Mr. Goodman became our Executive Vice President and Chief
Operating Officer in September 2001. Mr. Goodman also served as the president of
our PAX TV network television operations from 1998 until September 2001 and
president of our inTV and Network-Affiliated Television divisions from 1995 to
1997. From 1993 to 1995, Mr. Goodman was general manager of our Miami, Florida
radio station group.

     Anthony L. Morrison.  Mr. Morrison has served as our Executive Vice
President, Secretary and Chief Legal Officer since 1995. Before that time, Mr.
Morrison was an attorney in private practice with the O'Melveny & Myers law
firm, concentrating his practice on commercial financings.

     Seth A. Grossman.  Mr. Grossman has been our Executive Vice President and
Chief Strategic Officer since August 2000. Mr. Grossman also served as our
Senior Vice President and Chief Financial Officer from December 1999 until
August 2000. From 1997 to December 1999, Mr. Grossman was our Senior Vice
President, Corporate Development and from 1995 to 1997, Mr. Grossman was our
Director of Finance.

     Thomas E. Severson, Jr.  Mr. Severson has been our Senior Vice President
and Chief Financial Officer since August 2000. From 1995 until August 2000, Mr.
Severson was employed by Sinclair Broadcast Group, Inc., a television and radio
broadcasting company, in various finance and accounting positions, most recently
serving as its Vice President and Chief Accounting Officer.

     Ronald L. Rubin.  Mr. Rubin has been our Vice President, Chief Accounting
Officer and Corporate Controller since January 2001. From 1996 until January
2001, Mr. Rubin was employed by AutoNation, Inc.,

                                        59


an automotive retailer, in various finance and accounting positions, most
recently serving as its Vice President and Corporate Controller and Principal
Accounting Officer.

     Henry J. Brandon.  Mr. Brandon has been a director since 2001. Mr. Brandon
has been a Principal of William E. Simon & Sons, LLC, a private investment firm
and merchant bank, since 1995.

     Bruce L. Burnham.  Mr. Burnham has been a Director since 1996. Mr. Burnham
has been President of The Burnham Group, a firm providing consulting and
marketing services to the retail industry, since 1993. Mr. Burnham is a director
of Forcenergy, Inc. and J.B. Rudolph, Inc.

     James L. Greenwald.  Mr. Greenwald has been a Director since 1996. Mr.
Greenwald was the Chairman and Chief Executive Officer of Katz Communications,
Inc., a broadcast advertising representative sales firm, from 1975 to 1994, and
has been Chairman Emeritus of that firm since 1994. Mr. Greenwald is a director
of Granite Broadcasting Company and Source Media, Inc.

     John E. Oxendine.  Mr. Oxendine has been a Director since 2000. Mr.
Oxendine has been President and Chief Executive Officer of Blackstar, Inc. since
1998, and Chairman and Chief Executive Officer of Broadcast Capital, Inc. since
1999. Mr. Oxendine was Chairman of Blackstar LLC from 1994 to 1998, and Chairman
and Chief Executive Officer of Blackstar Communications, Inc. from 1987 to 1998.
All of these entities are owners and operators of, or investors in, broadcast
television stations.

EMPLOYMENT AGREEMENTS

     Mr. Paxson is employed as our Chairman, and in that capacity he serves as
our senior executive officer, under an employment agreement for a three year
term commencing on October 16, 1999. The agreement is automatically renewable
after the initial term for successive one year periods so long as Mr. Paxson
remains our "Single Majority Shareholder," as that term is defined under the
rules of the FCC. Mr. Paxson's current base salary is $660,000, increasing 10%
per year. Mr. Paxson may receive an annual bonus of up to twice his base salary
if we attain revenue targets established by the compensation committee of our
Board of Directors. In connection with the employment agreement, we granted Mr.
Paxson nonqualified options to purchase 1,000,000 shares of Class A common
stock, which vest in equal installments over a three year period, and which
expire ten years from the date of grant. The exercise price for options which
vested in October 2000 is $10 per share, for options which vested in October
2001 is $12.03 per share, and for options vesting in October 2002 is $9.03 per
share. Mr. Paxson is eligible to participate in all employee benefit plans and
arrangements that are generally available to our other senior executives. The
Board of Directors may terminate Mr. Paxson's employment agreement before
expiration for good cause, and Mr. Paxson may terminate the agreement for good
reason, each as defined in the agreement. If Mr. Paxson dies, becomes
permanently disabled, terminates his employment for good reason or is terminated
other than for good cause during the term of the agreement, we will pay Mr.
Paxson or his estate, as the case may be, his then existing salary for the
remaining term of the agreement, in the case of disability, termination for good
reason or termination other than for good cause, or 18 months, in the case of
death.

     Mr. Sagansky is employed as our President and Chief Executive Officer under
an employment agreement entered into in September 1999 for a four year term
expiring September 15, 2003. Mr. Sagansky's current base salary under the
agreement is $660,000, increasing 10% per year. Mr. Sagansky may receive an
annual bonus of up to twice his base salary if we attain revenue targets
established by our compensation committee, which shall be the same revenue
targets established for purposes of Mr. Paxson's bonus compensation. In
connection with the employment agreement, we granted Mr. Sagansky nonqualified
options to purchase 2,000,000 shares of Class A common stock, vesting in four
equal annual installments commencing September 15, 2000, and expiring ten years
from the date of the grant. The vesting of these options will be accelerated if,
at any time after Mr. Paxson ceases to be our FCC Single Majority Shareholder,
Mr. Sagansky's employment is terminated other than by reason of his death or
disability and other than for good cause (as defined in the agreement). The
exercise price for options which vested in September 2000 is $10 per share, for
options which vested in September 2001 is $11.68 per share, for options vesting
in September 2002 is $10.85 per share, and for options vesting in September 2003
is the lower of $21 per share or the average of the closing sale price of the
common stock over the 45 trading days preceding September 15, 2002. Mr. Sagansky
is eligible to participate in all employee benefit plans and arrangements that
are generally available to our other senior executives. The Board of Directors
may terminate Mr. Sagansky's employment agreement before expiration for good
cause, and Mr. Sagansky may terminate the agreement for good reason, each as
defined in the
                                        60


agreement. If Mr. Sagansky dies, becomes permanently disabled, terminates his
employment for good reason or is terminated other than for good cause during the
term of the agreement, we will pay Mr. Sagansky or his estate, as the case may
be, his then existing salary for the remaining term of the agreement, in the
case of disability, termination for good reason or termination other than for
good cause, or 18 months, in the case of death.

     Mr. Goodman is employed as our Executive Vice President and Chief Operating
Officer under a four year employment agreement commencing January 1, 2001. Mr.
Goodman is eligible to receive an annual bonus. Mr. Goodman is eligible to
participate in all employee benefit plans and arrangements that are generally
available to our other senior executives and to receive such other cash and
non-cash bonus awards and compensation, including awards under our stock
incentive plans, as we may determine. We may terminate Mr. Goodman's employment
for cause, as defined in the agreement. If Mr. Goodman's employment is
terminated by reason of his disability, or other than for cause, or if Mr.
Goodman terminates his death or employment for cause, as defined in the
agreement, we will continue to pay Mr. Goodman his base salary for the lesser of
one year or the balance of the employment term.

     Mr. Morrison is employed as our Executive Vice President and Chief Legal
Officer under a four year employment agreement commencing January 1, 2001. Mr.
Morrison is eligible to receive an annual bonus. Mr. Morrison is eligible to
participate in all employee benefit plans and arrangements that are generally
available to our other senior executives and to receive such other cash and
non-cash bonus awards and compensation, including awards under our stock
incentive plans, as we may determine. We may terminate Mr. Morrison's employment
for cause, as defined in the agreement. If Mr. Morrison's employment is
terminated by reason of his death or disability or other than for cause, or if
Mr. Morrison terminates his employment for cause, as defined in the agreement,
we will continue to pay Mr. Morrison his base salary for the lesser of one year
or the balance of the employment term.

     Mr. Grossman is employed as our Executive Vice President and Chief
Strategic Officer under a four year employment agreement commencing January 1,
2002. Mr. Grossman is eligible to receive an annual bonus. Mr. Grossman is
eligible to participate in all employee benefit plans and arrangements that are
generally available to our other senior executives and to receive such other
cash and non-cash bonus awards and compensation, including awards under our
stock incentive plans, as we may determine. We may terminate Mr. Grossman's
employment for cause, as defined in the agreement. If Mr. Grossman's employment
is terminated by reason of his death or disability or other than for cause, or
if Mr. Grossman terminates his employment for cause, as defined in the
agreement, we will continue to pay Mr. Grossman his base salary for the lesser
of one year or the balance of the employment term.

                                        61


                             EXECUTIVE COMPENSATION

     The following table presents information concerning the compensation
received or accrued for services rendered during the fiscal years ended December
31, 2001, 2000, and 1999 for our Chief Executive Officer and our four most
highly compensated executive officers other than the Chief Executive Officer who
were serving as of December 31, 2001 (collectively, the "Named Executive
Officers").

                           SUMMARY COMPENSATION TABLE



                                                                           LONG-TERM
                                                                          COMPENSATION
                                            ANNUAL COMPENSATION            NUMBER OF
                                    -----------------------------------    SECURITIES     ALL OTHER
                                                           OTHER ANNUAL    UNDERLYING    COMPENSATION
NAME AND PRINCIPAL POSITION  YEAR   SALARY(1)    BONUS     COMPENSATION     OPTIONS       (2)(3)(4)
- ---------------------------  ----   ---------   --------   ------------   ------------   ------------
                                                                       
Jeffrey Sagansky..........   2001   $660,000    $330,000   $         --             0      $69,640
  Chief Executive Officer    2000    610,000      75,000             --             0       63,276
  President                  1999    600,000          --      140,070(5)    2,000,000       62,912

Lowell W. Paxson..........   2001    660,000          --             --             0        4,913
  Chairman of the Board      2000    610,000      75,000             --             0           --
                             1999    493,798          --             --     1,000,000           --

Dean M. Goodman...........   2001    433,650     130,095             --       150,000       43,771
  Executive Vice President   2000    412,997      30,975    1,023,273(6)            0       44,270
  and Chief Operating        1999    315,000          --      924,937(6)            0       15,426
  Officer

Anthony L. Morrison.......   2001    288,750      86,625      165,584(6)      150,000       29,477
  Executive Vice President,  2000    275,000      10,313             --             0       29,756
  Chief Legal Officer        1999    223,438          --      432,781(6)       99,000       21,897

Seth A. Grossman..........   2001    247,500      24,750             --       125,000        1,000
  Executive Vice President,  2000    219,750      80,363             --             0        1,000
  Chief Strategic Officer    1999    177,292          --             --        22,000        1,000


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

(1) Includes amounts Named Executive Officers elected to defer under our Profit
    Sharing Plan.

(2) Includes contributions to supplemental retirement plans as follows: during
    2001, Mr. Sagansky -- $66,000; Mr. Goodman -- $41,300; Mr.
    Morrison -- $27,500; during 2000, Mr. Sagansky -- $60,000; Mr.
    Goodman -- $41,300; Mr. Morrison -- $27,500; during 1999, Mr.
    Sagansky -- $60,000; Mr. Goodman -- $12,600; Mr. Morrison -- $19,688.

(3) Includes $1,000 Company contributions to the Profit Sharing Plan during
    1999, 2000 and 2001.

(4) Includes cost of term life insurance equivalent for life insurance policies
    as follows: during 2001, Mr. Sagansky -- $2,640; Mr. Paxson -- $4,913; Mr.
    Goodman -- $1,471; Mr. Morrison -- $977; during 2000, Mr.
    Sagansky -- $2,276; Mr. Goodman -- $1,970; Mr. Morrison -- $1,256; during
    1999, Mr. Sagansky -- $1,912; Mr. Goodman -- $1,826; Mr. Morrison -- $1,209.

(5) Consists of tax reimbursement in 1999 related to relocation allowance in
    1998.

(6) Represents the difference between the price paid by the Named Executive
    Officer upon the exercise of stock options and the fair market value of the
    underlying common stock at the time of exercise.

                                        62


OPTION GRANTS IN LAST FISCAL YEAR

     The table below presents information regarding each of the Named Executive
Officers who was granted options to purchase shares of our Class A common stock
during the year ended December 31, 2001.



                                                                                           POTENTIAL REALIZABLE VALUES
                            NUMBER OF          % OF TOTAL                                   AT ASSUMED ANNUAL RATES OF
                            SHARES OF        OPTIONS GRANTED                              STOCK APPRECIATION FOR OPTION
                           COMMON STOCK       TO EMPLOYEES     EXERCISE                              TERM(1)
                        UNDERLYING OPTIONS      IN FISCAL        PRICE     EXPIRATION   ----------------------------------
NAME                         GRANTED              YEAR         PER SHARE      DATE         0%          5%          10%
- ----                    ------------------   ---------------   ---------   ----------   --------   ----------   ----------
                                                                                           
Dean M. Goodman.......       150,000               6.5%          $7.25     7/31/2011    $735,000   $1,881,160   $3,639,596
Anthony L. Morrison...       150,000               6.5%           7.25     7/31/2011     735,000    1,881,160    3,639,596
Seth A. Grossman......       125,000               5.4%           7.25     7/31/2011     612,500    1,567,634    3,032,996


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

(1) Based on the closing price on the grant date and the option exercise price.

2001 AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES

     The following table sets forth information with respect to stock options
exercised by the Named Executive Officers during the fiscal year ended December
31, 2001 and stock options held as of December 31, 2001 by each Named Executive
Officer.



                                                                NUMBER OF
                                                          SECURITIES UNDERLYING            VALUE OF UNEXERCISED
                                                          UNEXERCISED OPTIONS AT         IN-THE-MONEY OPTIONS AT
                              SHARES                        DECEMBER 31, 2001              DECEMBER 31, 2001(1)
                            ACQUIRED ON     VALUE      ----------------------------   ------------------------------
NAME                         EXERCISE      REALIZED    EXERCISABLE(2)   UNEXERCISED   EXERCISABLE   UNEXERCISABLE(3)
- ----                        -----------   ----------   --------------   -----------   -----------   ----------------
                                                                                  
Jeffrey Sagansky..........         --     $       --     1,960,000       1,240,000    $9,891,000       $2,505,600
Lowell W. Paxson..........         --             --       666,666         333,334       150,000          474,296
Dean M. Goodman...........         --             --       525,161         598,200     2,562,418        3,264,315
Anthony L. Morrison.......     20,000        165,584       381,900         317,100     1,892,330        1,301,970
Seth A. Grossman..........         --             --       165,250         134,750       685,064          431,200


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

(1) Based on the closing sale price of the Class A common stock of $10.45 on
    December 31, 2001.

(2) Excludes securities underlying options which vested January 1, 2002 as
    follows: Mr. Goodman, 120,000 shares; Mr. Morrison, 59,800 shares; Mr.
    Grossman, 24,400 shares.

(3) Certain options held by Mr. Sagansky which are not currently exercisable
    have variable exercise prices to be determined at future dates, as described
    above under "Employment Agreements," and are therefore not treated as "in
    the money" for purposes of the amounts shown in this column.

STOCK INCENTIVE PLANS

     We established our Stock Incentive Plan, 1996 Stock Incentive Plan and 1998
Stock Incentive Plan (collectively, the "Stock Incentive Plans") to provide
incentives to officers, employees and others who perform services for us through
awards of options and shares of restricted stock. Awards are granted under the
Stock Incentive Plans at the discretion of our Compensation Committee and may be
in the form of either incentive or nonqualified stock options or awards of
restricted stock. Options granted under the Stock Incentive Plans generally vest
over either a four or a five year period and expire ten years after the date of
grant. At December 31, 2001, 693,978 shares of Class A common stock were
available for additional awards under the Stock Incentive Plans.

     The exercise price per share of Class A common stock, vesting schedule and
expiration date of each stock option granted under the Stock Incentive Plans is
determined by our Compensation Committee at the date the option is granted and
as provided in the terms of the Plans. The Compensation Committee may, in its
sole discretion, accelerate the time at which any stock option may be exercised.
Holders of more than ten percent (10%) of the combined voting power of our
capital stock may be granted stock options, provided that if any of such options
are intended to be incentive stock options, the exercise price must be at least
110% of the fair market value of the Class A common stock as of the date of the
grant and the term of the option may not exceed five years. Options granted
under the Stock Incentive Plans may be exercised by the participant to

                                        63


whom granted or by his or her legal representative. If a participant's
employment is terminated for cause, each option which has not been exercised
shall terminate.

     The Compensation Committee also has the discretion to award restricted
stock, consisting of shares of Class A common stock which vest over a period
determined by the Committee and are subject to forfeiture in whole or in part if
the recipient's employment is terminated before the end of the restricted
period. Before vesting, the participant may transfer the restricted stock to a
trust for the benefit of the participant or an immediate family member, but may
not otherwise sell, assign, transfer, give or otherwise dispose of, mortgage,
pledge or encumber the restricted stock. The Compensation Committee may, in its
discretion, provide that a participant shall be vested in whole or with respect
to any portion of the participant's award not previously vested if the
participant's employment with us is terminated because of death, disability or
retirement or in the event of a change of control. To date, we have not awarded
any restricted stock under the Stock Incentive Plans.

EXECUTIVE BONUS PLAN

     Under our Executive Bonus Plan, members of our senior management approved
by the Compensation Committee may earn cash bonus compensation on an annual
basis in such amounts as are determined by the Committee, based upon the
achievement of operating and financial objectives and individual performance
criteria. The bonus calculation criteria are established on an annual basis by
the Committee, and generally consist of a set of operating and financial
performance objectives which we must meet for any participant to be entitled to
receive a bonus, and individualized performance criteria and bonus levels for
each participant (generally expressed as a percentage of the participant's base
salary). Bonuses awarded with respect to a fiscal year are to be paid during the
following year.

PROFIT SHARING PLAN

     We have a profit sharing plan under Section 401(k) of the Internal Revenue
Code under which our employees must complete six months of service in order to
be eligible to defer salary and, if available, receive matching contributions
under the Section 401(k) portion of the plan. Participants may elect to
contribute a specified percentage of their compensation to the plan on a pre-tax
basis. We may, at our discretion, make matching contributions based on a
percentage of deferred salary contributions at a rate to be determined by
certain of our officers, which matching contributions may be paid in our stock.
In addition, we may make supplemental profit sharing contributions in such
amounts as certain of our officers may determine. Participants earn a vested
right to their profit sharing contribution in increasing amounts over a period
of five years. After five years of service, a participant's right to his or her
profit sharing contribution is fully vested. Thereafter the participant may
receive a distribution of the entire value of his or her account at age 55, 62
or 65 or upon termination of employment, death or disability.

COMPENSATION OF DIRECTORS

     Directors who are not our employees receive an annual retainer of $24,000
and are paid fees of $1,500 for each board meeting attended, $1,000 for each
committee meeting attended and $500 for each meeting chaired. All directors
receive reimbursement of reasonable out-of-pocket expenses incurred in
connection with attending meetings of the Board of Directors. In September 2001
Mr. Burnham and Mr. Greenwald each received a 50,000 share option grant at an
exercise price of $7.25 per share, vesting ratably over a four year period
commencing in May 2001. In connection with his commencement of service as a
director, Mr. Oxendine received options to purchase 50,000 shares of Class A
common stock at the same exercise price, vesting ratably over a five year period
commencing in March 2000. In April 1999, Mr. Burnham and Mr. Greenwald each
received a 50,000 share option grant at the same exercise price, vesting ratably
over five years. No other directors receive separate compensation for services
rendered as a director, including directors who are employed by us.

                                        64


                             PRINCIPAL STOCKHOLDERS

     The table below sets forth information regarding the beneficial ownership
of our shares of common stock as of March 1, 2002 by:

     - each of our directors and our five most highly compensated executive
       officers in 2001;

     - all of our directors and executive officers as a group; and

     - any person who is known by us to be the beneficial owner of more than
       five percent of any class of our common stock.



                                                                                  AGGREGATE
                                                            NUMBER OF    % OF    VOTING POWER
CLASS OF STOCK         NAME OF BENEFICIAL OWNER(1)            SHARES     CLASS       (%)
- --------------   ----------------------------------------   ----------   -----   ------------
                                                                     
                 National Broadcasting Company,
Class A          Inc.(2).................................   63,928,159   53.1%       30.4%
                 Lowell W. Paxson(3).....................   21,141,594   37.0        14.5
                 Mario J. Gabelli(4).....................    6,716,922   11.9         4.6
                 Merrill Lynch & Co., Inc.(5)............    4,042,217    7.2         2.8
                 Jeffrey Sagansky(6).....................    1,960,000    3.4         1.3
                 Henry J. Brandon(7).....................    1,067,961    1.9           *
                 Dean M. Goodman(6)......................      691,636    1.2           *
                 Anthony L. Morrison(6)..................      472,250      *           *
                 Seth A. Grossman(6).....................      217,825      *           *
                 Bruce L. Burnham(6).....................       65,850      *           *
                 James L. Greenwald(6)...................       49,500      *           *
                 John E. Oxendine(6).....................       20,000      *           *
                 All directors and executive officers as
                 a group (11 persons)(8).................   25,736,616   41.8
Class B          Lowell W. Paxson........................    8,311,639    100%       56.9%
                 All directors and executive officers as
                 a group (1 person)......................    8,311,639    100%       56.9%


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

 *  Less than 1%

(1) Unless otherwise specified in the footnotes to this table, the address of
    each person in this table is c/o Paxson Communications Corporation, 601
    Clearwater Park Road, West Palm Beach, Florida 33401-6233.

(2) Consists of 31,896,032 shares of Class A common stock issuable upon
    conversion of shares of our Series B preferred stock held by NBC Palm Beach
    Investment I, Inc., and 32,032,127 shares of Class A common stock issuable
    upon exercise of outstanding warrants held by NBC Palm Beach Investment II,
    Inc. The holders' rights to acquire shares of Class A common stock upon
    conversion and exercise of those securities, although currently exercisable,
    are subject to material conditions, including compliance with the rules of
    the FCC. This amount does not include shares beneficially owned by Mr.
    Paxson that NBC Palm Beach Investment II, Inc. has the right to acquire.
    According to information contained in a Schedule 13D filed with the SEC,
    dated September 15, 1999, NBC Palm Beach Investment I and NBC Palm Beach
    Investment II are subsidiaries of NBC, and NBC and its parent entity,
    General Electric Company, Inc., each disclaims beneficial ownership of these
    securities. The address of NBC is 30 Rockefeller Plaza, New York, New York
    10112.

(3) Includes 666,666 shares which may be acquired within 60 days through the
    exercise of stock options; does not include 8,311,639 shares of Class B
    common stock, each share of which is convertible into one share of Class A
    common stock. Mr. Paxson is the beneficial owner of all reported shares,
    other than 666,766 shares of Class A common stock, through his control of
    Second Crystal Diamond, Limited Partnership and Paxson Enterprises, Inc.

(4) According to information contained in an amendment to Schedule 13D filed
    with the SEC, dated January 18, 2002, various investment funds and other
    entities controlled by or affiliated with Mario J. Gabelli and Marc J.
    Gabelli, each of whose address is c/o Gabelli Asset Management, Inc., One
                                        65


    Corporate Center, Rye, New York 10580, acquired those shares for investment
    for one or more accounts over which they have shared or sole investment and
    voting power or for their own account.

(5) The address of Merrill Lynch & Co. Inc., is World Financial Center, North
    Tower, 250 Vesey Street, New York, New York 10381.

(6) Includes shares which may be acquired within 60 days through the exercise of
    stock options granted under our stock incentive plans as follows: Jeffrey
    Sagansky -- 960,000; Dean M. Goodman -- 645,161; Anthony L.
    Morrison -- 441,700; Seth A. Grossman -- 189,650; Bruce L.
    Burnham -- 53,750; James L. Greenwald -- 49,500; and John E.
    Oxendine -- 20,000. Also includes 1,000,000 shares which may be acquired by
    Mr. Sagansky within 60 days through the exercise of additional stock
    options.

(7) Consists of shares which may be acquired upon the exercise of warrants and
    conversion of shares of our Series A preferred stock held by an affiliate of
    William E. Simon & Sons, LLC, a private investment firm with which Mr.
    Brandon is employed as a Principal; Mr. Brandon disclaims beneficial
    ownership of all such shares.

(8) Includes 2,409,761 shares which may be acquired within 60 days through the
    exercise of stock options granted under our stock incentive plans, 1,666,666
    shares which may be acquired within 60 days through the exercise of
    additional stock options granted to Mr. Paxson and Mr. Sagansky, and
    1,067,961 shares which may be acquired upon the exercise of warrants and
    conversion of shares of our Series A preferred stock held by an affiliate of
    William E. Simon & Sons, LLC, a private investment firm with which Mr.
    Brandon is employed.

                                        66


                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     NBC Transactions.  On September 15, 1999, NBC entered into an agreement
with us under which subsidiaries of NBC acquired $415 million liquidation
preference of Series B preferred stock, which is convertible into 31,896,032
shares of our Class A common stock, and common stock purchase warrants entitling
the holder to purchase 32,032,127 shares of Class A common stock. NBC also
entered into an agreement with Mr. Paxson and entities controlled by Mr. Paxson
under which NBC was granted the right to purchase all, but not less than all
8,311,639, shares of our Class B common stock beneficially owned by Mr. Paxson,
which shares are entitled to ten votes per share on all matters submitted to a
vote of our stockholders and are convertible into an equal number of shares of
Class A common stock. We have entered into other agreements with NBC under which
we pay amounts to NBC for commission compensation and cost reimbursements, as
described in "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- General." During December 1999 and March 2000, our
board of directors appointed three employees of NBC to fill vacancies on the
board of directors. The NBC employees serving on our board resigned as directors
during November and December 2001. For more information regarding our
relationship with NBC, see "Business -- NBC Relationship."

     DP Media.  DP Media, Inc., CAP Communications, Inc. and RDP Communications,
Inc., which we refer to collectively as DP Media, are companies formerly
beneficially owned by family members of Mr. Paxson. During the past several
years, we have engaged in numerous transactions with DP Media involving
television station purchases and sales, time brokerage and affiliation
agreements and other matters. In April 1998, DP Media, Inc. entered into a
contract to acquire WHPX in Hartford, Connecticut, from Roberts Broadcasting
Company for $250,000 plus the assumption of a note payable to us for $15
million, and WHPX became a PAX TV affiliate. In February 1999, DP Media, Inc.
assigned its rights to acquire WHPX to CAP Communications, Inc., which completed
the acquisition.

     In February 1999, DP Media acquired two television stations, which were PAX
TV affiliates, indirectly from us for consideration of approximately $30.5
million, including the assumption of notes payable to us. These notes were
repaid during August 1999. During 1998 and 1999, Mr. Paxson served as guarantor
on approximately $31.4 million in bank loans made to DP Media, which guaranty
was secured by a pledge of approximately 6.1 million shares of Class A common
stock owned by an affiliate of Mr. Paxson. Mr. Paxson's guaranties were
terminated in connection with DP Media's refinancing of its indebtedness during
August 1999. During 1999, we had affiliation agreements with DP Media under
which we provided the DP Media station affiliates with programming and paid a
fixed monthly affiliation fee, and the affiliates retained a portion of the
advertising airtime during our network programming. We also served as the
network, national and regional sales representative for the DP Media station
affiliates and received a commission of 15% for sales revenue generated. During
1999, we recorded $404,000 of commissions revenue under our services agreements
with DP Media. We recorded time brokerage and affiliation fees expenses related
to stations owned by DP Media of approximately $13.6 million in 1999.

     On November 21, 1999, we agreed to purchase the television station assets
of DP Media and related corporations. These assets consisted of eight television
stations and a contractual right to acquire a ninth television station, WBPX,
and two full power satellite stations serving the Boston, Massachusetts market.
We advanced approximately $106 million to DP Media in the transaction, under a
secured loan agreement, which was used to repay DP Media's outstanding
indebtedness to third party lenders. On March 3, 2000, we agreed with DP Media
to convert the asset sale transaction into a purchase by us of all of the
capital stock of DP Media. In June 2000, we completed the acquisition of DP
Media for aggregate consideration of $113.5 million, including the $106 million
previously advanced. DP Media's assets include a 32% equity interest in a
limited liability company controlled by the former stockholders of DP Media,
which owns television station WWDP in Norwell, Massachusetts. We have the right
to require a sale of WWDP, which is not a PAX TV affiliate, if the station is
not sold within a specified period, and the right to receive 45% of the net
proceeds from the sale of the station.

     The Christian Network, Inc.  We have entered into several agreements with
The Christian Network, Inc., or CNI. CNI is a section 501(c)(3) not-for-profit
corporation to which Mr. Paxson has been a substantial contributor and of which
he was a member of the Board of Stewards through 1993.

     On September 10, 1999, we entered into a master agreement with CNI for
overnight programming and use of a portion of our digital capacity in exchange
for CNI's providing public interest programming. The
                                        67


master agreement has a term of 50 years and is automatically renewable for
successive ten-year periods unless CNI ceases to exist, commences action to
liquidate, ceases family values programming or the FCC revokes the licenses of a
majority of our stations. Under the master agreement, we broadcast CNI overnight
programming on each of our stations seven days a week from 1:00 a.m. to 6:00
a.m. We do not receive or pay cash compensation for carrying this programming.
If and when our stations begin digital programming in multiple channels, we are
required to make a digital channel available for CNI's use. CNI will have the
right to use the digital channel for 24 hour CNI digital programming.

     We entered into an agreement with CNI in May 1994 under which we agreed
that, if the tax exempt status of CNI were jeopardized by virtue of its
relationship with us, we would take certain actions to ensure that CNI's tax
exempt status would no longer be so jeopardized. These steps could include
additional payments by us or rescission of one or more transactions. We believe
that our agreements with CNI have been on terms as favorable to CNI as it would
obtain in arm's-length transactions, and we intend any future agreements with
CNI to be as favorable to CNI as CNI would obtain in arm's-length transactions.
Accordingly, if our activities with CNI are consistent with the terms governing
our relationship, we should not be required to take any actions under this
agreement. We cannot be sure, however, that we will not be required to take any
actions under this agreement which might have a material cost to us.

     We have contracted with CNI to lease CNI's television production and
distribution facility, the Worship Channel Studio, in Clearwater, Florida. We
utilize this facility primarily as our network operations center and originate
our PAX TV network signal from this location. During 2001, we incurred rental
charges of $205,000 in connection with this agreement.

     In March 1999, we entered into a three-year agreement with CNI to license
CNI's religious programming. During the year ended December 31, 2001, we paid
license fees in connection with this agreement of approximately $215,000.

     Aircraft Lease.  During 1997, we entered into a three-year lease with a
company owned by Mr. Paxson for a Boeing 727 aircraft. The lease provided for
monthly payments of $63,600. We incurred rental costs under the lease of
approximately $759,000 during 2000. The lease expired in December 2000 without
being renewed. At the lease expiration, we had leasehold improvements of
approximately $222,577 (net of accumulated depreciation).

     Simon Interests.  Henry Brandon, who has been one of our directors since
September 2001, is employed as a principal of William E. Simon & Sons, LLC, a
private investment firm and an affiliate of William E. Simon, Jr., who served as
Vice Chairman of our Board of Directors from May 1998 until September 2001. In
June 1998 we issued to an affiliate of Mr. Simon fully vested warrants to
purchase 155,500 shares of Class A common stock at an exercise price of $16 per
share. In connection with our June 1998 offering of Series A preferred stock and
warrants to purchase Class A common stock, we paid an affiliate of Mr. Simon a
consulting fee of $500,000 and an underwriting fee of $550,000 for services
rendered in connection with the placement of such securities. Also in June 1998,
the affiliate of Mr. Simon purchased $10 million aggregate liquidation
preference of our Series A preferred stock and warrants to purchase 32,000
shares of Class A common stock at an exercise price of $16 per share. In March
2000, we reduced the exercise price of the 187,500 warrants held by Mr. Simon's
affiliate from $16 per share to $12.60 per share.

     Officer Loans.  During December 1996, we approved a program to extend loans
to members of our senior management to finance their purchase of shares of Class
A common stock in the open market. The loans are full recourse promissory notes
bearing interest at 5.75% per annum and are collateralized by a pledge of the
shares of Class A common stock purchased with the loan proceeds. We extended the
maturity date of all loans outstanding under this program until March 31, 2003.
During 2001, approximately $182,000 of principal and interest was paid to us
under this program. At December 31, 2001, the outstanding balances of principal
and accrued interest on such loans to our Named Executive Officers were as
follows: Mr. Goodman, $640,850, Mr. Morrison, $336,576 and Mr. Grossman,
$153,965.

                                        68


            DESCRIPTION OF MATERIAL INDEBTEDNESS AND PREFERRED STOCK

     The following is a summary of the terms and conditions of some of our
material indebtedness and of the terms of our preferred stock, and is subject to
and qualified in its entirety by reference to the terms and conditions of the
agreement, indenture or certificate of designation, as applicable, governing the
indebtedness or preferred stock the terms and conditions of which are being
summarized.

SENIOR CREDIT FACILITY

     In connection with our July 2001 refinancing, we entered into a new $360.0
million senior secured credit facility. The senior credit facility comprises
three facilities:

          (1) a Term A facility in the aggregate principal amount of $50.0
     million to be used for capital expenditures, maturing December 31, 2005.
     Borrowing availability under the Term A facility will be reduced to $15
     million on July 12, 2003 and no further borrowings under the Term A
     facility will be permitted after July 12, 2004;

          (2) a Term B facility in the aggregate principal amount of $285.0
     million, which was fully drawn in the July 2001 refinancing, maturing June
     30, 2006; and

          (3) a revolving facility in the aggregate principal amount of up to
     $25.0 million to be used for general corporate purposes, maturing June 30,
     2006.

     We are required to begin making quarterly principal repayments under the
Term A facility on September 30, 2003. The first four installments shall each be
0.25% of the amount outstanding under the Term A facility on each such repayment
date, and the next four installments shall each be 0.25%, and the final two
installments shall each be 49.5%, of the amount outstanding under the Term A
facility on June 30, 2006. We have begun making quarterly principal repayments
under the Term B facility. The first 18 installments shall each be $712,500 and
the final two installments shall each be $136,087,500. The revolving facility is
required to be permanently repaid at the maturity date of the revolving
facility. Before its maturity date, the revolving facility may be repaid and
then reborrowed; however, no amount repaid under the Term A facility or the Term
B facility may be reborrowed.

     Borrowings under the Term A facility and the revolving facility bear
interest at a rate per annum equal to (1) before January 1, 2004, at our option,
either the alternate base rate (which is defined as the highest of 1/2% plus the
federal funds rate, the prime rate most recently announced by the agent under
the senior credit facility and 1/2% plus the CD rate of the agent under the
senior credit facility) plus 2.00%, or LIBOR plus 3.00%, and (2) on and after
January 1, 2004, at our option either:

     - LIBOR plus

      - if our leverage ratio is greater than 6 to 1, 3.00%;

      - if our leverage ratio is less than or equal to 6 to 1 and greater than
        4.5 to 1, 2.75%; or

      - if our leverage ratio is less than or equal to 4.5 to 1, 2.50%; or

     - the alternate base rate plus

      - if our leverage ratio is greater than 6 to 1, 2.00%;

      - if our leverage ratio is less than or equal to 6 to 1 and greater than
        4.5 to 1, 1.75%; or

      - if our leverage ratio is less than or equal to 4.5 to 1, 1.50%.

     Borrowings under the Term B facility bear interest at a rate per annum
equal to, at our option, either the alternate base rate plus 2.00% or LIBOR plus
3.00%.

     Our obligations under the senior credit facility, other than $59.1 million
of borrowings under the Term B facility that were used to redeem our 12%
preferred stock, are unconditionally guaranteed, jointly and severally, by all
of our material subsidiaries. Our obligations and those of our guarantors under
the senior credit facility are secured primarily by a first priority lien on all
the assets of our company and those guarantors.

                                        69


     The senior credit facility contains various covenants, representations,
warranties and indemnities, including covenants restricting our ability and the
ability of our subsidiaries to incur additional indebtedness, dispose of assets,
pay dividends, repurchase or redeem capital stock and indebtedness (including
the notes), create liens, make capital expenditures, make certain investments or
acquisitions and enter into transactions with affiliates and otherwise
restricting our activities. The senior credit facility also contains the
following financial covenants: (1) minimum net revenue and minimum EBITDA for
each of the fiscal quarters ended June 30, 2001 through December 31, 2003, and
(2) maximum ratio of total senior debt to EBITDA, maximum ratio of total debt to
EBITDA, minimum permitted interest coverage ratio and minimum permitted fixed
charge coverage ratio, each beginning for each of the fiscal quarters ending on
or after June 30, 2004.

     The senior credit facility also contains provisions requiring repayment of
the facilities (and permanent commitment reductions) from certain net proceeds
of asset sales, insurance, debt and equity issuances and excess cash flow as
well as to the extent necessary to ensure that outstanding amounts under the
senior credit facility do not exceed a certain percentage of the value of the
broadcasting stations of our company and the subsidiary guarantors.

     Events of defaults under the senior credit facility include those usual and
customary for transactions of this type, including, among other things, failure
to pay principal, interest and other amounts payable under the senior credit
facility; material breaches of representations or warranties under the new
credit facility; breach of negative or financial covenants under the new credit
facility; breach of any other covenant under the senior credit facility (subject
to a 30 day cure period in most cases); failure to pay or default under other
material indebtedness; failure generally to pay debts or bankruptcy; material
judgments, unenforceability of any guaranty or security in respect of the senior
credit facility or loss of protection or priority of liens thereunder; change of
control; material adverse change; loss of any material FCC license or failure to
comply with material FCC requirements in respect of an acquisition; and material
liabilities arising under breach of environmental law or ERISA (each of the
foregoing applying to the company and our subsidiaries). Upon the occurrence and
continuance of an event of default under the senior credit facility, the agent
may declare the then outstanding loans due and payable and exercise remedies,
including foreclosure upon collateral.

10 3/4% SENIOR SUBORDINATED NOTES DUE 2008

     In July 2001 we issued $200.0 million aggregate principal amount of our
10 3/4% senior subordinated notes due 2008. The 10 3/4% notes are our senior
subordinated unsecured obligations, subordinate in right of payment to all of
our existing and future senior indebtedness and that of the subsidiary
guarantors, as defined in the indenture governing the 10 3/4% notes. The 10 3/4%
notes rank equally in right of payment with the notes and with all of our
existing and future senior subordinated debt and that of the subsidiary
guarantors and senior to all of our existing and future subordinated obligations
and those of the subsidiary guarantors. The 10 3/4% notes rank senior to all of
our preferred stock; however, we have the option, subject to various
limitations, of exchanging outstanding shares of our Series B preferred stock,
13 1/4% exchangeable preferred stock and 12 1/2% exchangeable preferred stock
into exchange debentures, which will rank equally with the 10 3/4% notes. The
10 3/4% notes are fully guaranteed, on a senior subordinated unsecured basis, by
all of our domestic subsidiaries.

     The 10 3/4% notes will mature on July 15, 2008 and bear interest at a rate
of 10 3/4% per annum from the date of original issuance until maturity. Interest
is payable semi-annually on January 15 and July 15, beginning January 15, 2002.

     Before July 15, 2005, we may redeem all or part of the 10 3/4% notes by
paying a "make-whole" premium based on U.S. Treasury rates. At our option, we
may redeem all or a part of the 10 3/4% notes at a redemption price equal to
105.375% of the principal amount during a twelve-month period beginning on July
15, 2005, 102.688% of the principal amount during a twelve-month period
beginning on July 15, 2006, and 100.000% of the principal amount beginning on
July 15, 2007 and thereafter. At any time before July 15, 2004, we may redeem up
to 35% of the 10 3/4% notes with the net proceeds of certain equity offerings,
at a price equal to 110.75% of the principal amount, plus accrued and unpaid
interest, if any, to the redemption date, provided that at least 65% of the
aggregate principal amount of the 10 3/4% notes remains outstanding after the
redemption.

     Following a change of control, we will be required to make an offer to
purchase all of the 10 3/4% notes at a purchase price of 101% of their principal
amount, plus accrued and unpaid interest.

                                        70


     The indenture governing the 10 3/4% notes contains covenants for the
benefit of the holders of the 10 3/4% notes that, among other things, and
subject to certain exceptions, restrict our ability and the ability of our
restricted subsidiaries, as defined in the indenture governing the 10 3/4%
notes, to:

     - incur more debt;

     - pay dividends or make other restricted payments;

     - create or permit to exist certain liens;

     - issue stock of subsidiaries;

     - sell certain assets;

     - incur dividend or other payment restrictions affecting our subsidiaries;

     - enter into transactions with affiliates; and

     - consolidate, merge or transfer all or substantially all our assets.

     These limitations are subject to a number of important exceptions and
qualifications.

13 1/4% EXCHANGEABLE PREFERRED STOCK

     General.  We have designated 72,000 shares as our 13 1/4% Cumulative Junior
Exchangeable Preferred Stock of which, as of December 31, 2001, there were
31,076 shares issued and outstanding.

     Dividends.  The holders of the 13 1/4% exchangeable preferred stock are
entitled to receive dividends at a rate equal to 13 1/4% per year of the
liquidation preference per share, payable semi-annually and accumulating from
the original issue date. We may, at our option, pay dividends on any dividend
payment date either in cash or by the issuance of additional shares of 13 1/4%
exchangeable preferred stock having an aggregate liquidation preference equal to
the amount of such dividends. If dividends for any period ending after May 15,
2003 are not paid in cash, the dividend rate will increase by 1% per year for
that dividend payment period. To date, we have paid no cash dividends on the
13 1/4% exchangeable preferred stock. During 2001, 2000 and 1999, we paid
dividends of approximately $37.4 million, $32.9 million and $28.9 million,
respectively, by the issuance of additional shares of 13 1/4% exchangeable
preferred stock. Accrued 13 1/4% exchangeable preferred stock dividends since
the last dividend payment date aggregated approximately $5.1 million and $4.5
million at December 31, 2001 and 2000, respectively.

     Voting Rights.  The 13 1/4% exchangeable preferred stock is non-voting,
except as otherwise required by law and in certain circumstances, including with
respect to:

     - amending certain rights of the holders of the 13 1/4% exchangeable
       preferred stock; and

     - issuing any class of equity securities that ranks on a parity with or
       senior to the 13 1/4% exchangeable preferred stock, other than the
       issuance of additional shares of 13 1/4% exchangeable preferred stock to
       pay dividends on the 13 1/4% exchangeable preferred stock in accordance
       with its terms.

     In addition, if we fail to (1) make a mandatory redemption or a change of
control offer (as defined in the certificate of designation for the 13 1/4%
exchangeable preferred stock) or (2) comply with certain covenants or make
certain payments on our indebtedness, holders of a majority of the outstanding
shares of 13 1/4% exchangeable preferred stock, voting separately as one class,
will be entitled to elect the lesser of two directors or that number of
directors constituting at least 25% of the board of directors.

     Liquidation Rights.  The 13 1/4% exchangeable preferred stock, with respect
to dividend rights and rights on our liquidation, winding-up and dissolution,
ranks senior to all classes of our common stock and all other series of our
preferred stock and junior to all of our outstanding indebtedness.

                                        71


     Redemption; Priorities.  We may redeem all or a portion of the 13 1/4%
exchangeable preferred stock, at our option, at any time on or after May 15,
2003 at the redemption prices set forth below, plus, without duplication,
accumulated and unpaid dividends to the date of redemption, if redeemed during
the 12 month period commencing May 15 of the year set forth below:



                                                               REDEMPTION
PERIOD                                                           PRICE
- ------                                                         ----------
                                                            
2003........................................................    106.625%
2004........................................................    103.313%
2005 and thereafter.........................................    100.000%


     We are required to redeem all of the 13 1/4% exchangeable preferred stock
outstanding on November 15, 2006 at a redemption price equal to 100% of the
liquidation preference, plus, without duplication, accumulated and unpaid
dividends to the date of redemption. Upon a change of control (as defined in the
certificate of designation for the 13 1/4% exchangeable preferred stock), we are
required to offer to purchase the 13 1/4% exchangeable preferred stock at a
price equal to 101% of the liquidation preference, plus accumulated and unpaid
dividends.

     Exchange Provisions.  As described below under "13 1/4% Exchange
Debentures," the 13 1/4% exchangeable preferred stock is exchangeable into the
13 1/4% exchange debentures, at our option, subject to certain conditions in
whole or in part, on a pro rata basis, on any scheduled dividend payment date;
provided that immediately after giving effect to any partial exchange, there
must be outstanding shares of 13 1/4% exchangeable preferred stock (whether
initially issued or issued in lieu of cash dividends) with an aggregate
liquidation preference of not less than $75.0 million and not less than $75.0
million of aggregate principal amount of 13 1/4% exchange debentures.

     Restrictive Covenants.  The certificate of designation for the 13 1/4%
exchangeable preferred stock contains covenants for the benefit of the holders
of the 13 1/4% exchangeable preferred stock that, among other things, and
subject to certain exceptions, restrict our ability and the ability of our
restricted subsidiaries to:

     - incur additional indebtedness;

     - pay dividends and make other restricted payments;

     - issue certain stock of subsidiaries;

     - enter into transactions with affiliates;

     - merge or consolidate us or the guarantors; and

     - transfer and sell assets.

     Although we have received the opinion of our legal counsel that it is more
likely than not that a Delaware court would conclude that the accretion of the
notes issued in this offering from their original issue price to their principal
amount at maturity will not constitute an incurrence of debt that would violate
the restrictive covenant limiting our ability to incur additional debt that is
contained in the certificate of designation for the 13 1/4% exchangeable
preferred stock, we cannot assure you that a Delaware court would reach the same
conclusion. If a court were to conclude that we had incurred debt in violation
of the terms of the certificate of designation for the 13 1/4% exchangeable
preferred stock, and we were not able to cure the violation, we would be
required to increase the size of our board of directors by two members and the
holders of the 13 1/4% exchangeable preferred stock would have the sole right to
elect directors to fill those vacancies. Because the certificate of designation
for our Series B preferred stock contains substantially identical restrictions
on our ability to incur debt, the holders of our Series B preferred stock could
acquire the right to elect two additional directors to our board of directors in
the same fashion. We cannot predict the effect that the addition of four
directors elected by the holders of these series of preferred stock would have
on the operations and prospects of our company.

SERIES A PREFERRED STOCK

     General.  We have designated 17,500 shares as our 9 3/4% Series A
Convertible Preferred Stock, of which, as of December 31, 2001, there were
10,566 shares issued and outstanding.

                                        72


     Dividends.  The holders of the Series A preferred stock are entitled to
receive dividends at a rate equal to 9 3/4% per year of the liquidation
preference per share, payable quarterly and accumulating from the original issue
date. We may, at our option, pay dividends on any dividend payment date either
in cash or by the issuance of additional shares of Series A preferred stock
having an aggregate liquidation preference equal to the amount of such dividends
or shares of Class A common stock having a market value equal to the amount of
such dividends; provided that if we elect to pay dividends in shares of Class A
common stock and those shares are not freely tradeable without volume or manner
of sale limitations by any holder of Series A preferred stock which is not one
of our affiliates, the dividend rate per year for such payment will be increased
to 12 1/4%.

     Voting Rights.  Holders of the Series A preferred stock have voting rights
(voting as a class with the Class A common stock) on all matters equivalent to
one vote for each share of Class A common stock into which their Series A
preferred stock is convertible. In addition, if we fail to (1) make a mandatory
redemption or a change of control offer (as defined in the certificate of
designation for the Series A preferred stock) or (2) comply with certain
covenants or make certain payments on our indebtedness, holders of a majority of
the outstanding shares of Series A preferred stock, voting separately as one
class, will be entitled to elect the lesser of two directors or that number of
directors constituting at least 25% of the board of directors.

     Liquidation Rights.  The Series A preferred stock, with respect to dividend
rights and rights on our liquidation, winding-up and dissolution, ranks senior
to all classes of common stock and to our Series B preferred stock and junior to
all other series of our preferred stock.

     Redemption.  We may redeem all or a portion of the Series A preferred
stock, at our option, at any time on or after June 30, 2003 at the redemption
prices set forth below, plus, without duplication, accumulated and unpaid
dividends to the date of redemption, if redeemed during the 12 month period
commencing June 30 of the year set forth below:



                                                               REDEMPTION
PERIOD                                                           PRICE
- ------                                                         ----------
                                                            
2003........................................................    104.000%
2004........................................................    102.000%
2005 and thereafter.........................................    100.000%


     We are required to redeem all of the Series A preferred stock outstanding
on December 31, 2006 at a redemption price equal to 100% of its liquidation
preference, plus, without duplication, accumulated and unpaid dividends to the
date of redemption.

     Conversion Rights.  The Series A preferred stock is convertible at any time
at the option of its holder into a number of shares of Class A common stock
equal to the aggregate liquidation preference of the shares of Series A
preferred stock surrendered for conversion divided by the conversion price. The
conversion price is an initial conversion rate of 625 shares of Class A common
stock for each share of Series A preferred stock (equivalent to a conversion
price of $16.00 per share of Class A common stock), and is subject to adjustment
in certain events.

     Restrictive Covenants.  The certificate of designation for the Series A
preferred stock contains covenants for the benefit of the holders of the Series
A preferred stock that, among other things, and subject to certain exceptions,
restrict our ability and the ability of our restricted subsidiaries to:

     - pay dividends and make other restricted payments;

     - enter into transactions with affiliates;

     - merge or consolidate us or the guarantors; and

     - transfer and sell assets.

SERIES B PREFERRED STOCK

     General.  We have designated 41,500 shares as our 8% Series B Convertible
Exchangeable Preferred Stock, all of which are issued and outstanding.

                                        73


     Dividends.  The holders of the Series B preferred stock are entitled to
receive dividends at a rate equal to 8% per year of its liquidation preference
per share, subject to adjustment under the terms of the Series B certificate of
designation, payable quarterly and accumulating from its original issue date.
Series B preferred stock dividends in arrears aggregated approximately $76.1
million and $42.9 million at December 31, 2001 and 2000, respectively.

     Voting Rights.  The Series B preferred stock is non-voting, except as
otherwise required by law and except in certain circumstances, including with
respect to:

     - amending certain rights of the holders of the Series B preferred stock;
       and

     - issuing any class of equity securities that ranks on a parity with or
       senior to the Series B preferred stock, other than the issuance of:

      - a new class of senior securities at any time after the trading price of
        our Class A common stock first exceeds 120% of the conversion price (as
        then in effect) for 20 consecutive trading days;

      - additional shares of existing preferred stock, parity securities or
        senior securities, which senior securities rank equally with the
        existing preferred stock, and which senior securities or parity
        securities require cash dividends at a time and in an amount not in
        excess of one percentage point greater than the dividend rate borne by
        any series of the existing preferred stock (as existing on the issue
        date of the Series B preferred stock) and which do not prevent either
        the payment of cash dividends on the Series B preferred stock, or the
        exchange of the Series B preferred stock for the 8% exchange debentures,
        in an amount sufficient to acquire any series of the existing preferred
        stock, in accordance with its terms on the original issue date of the
        Series B preferred stock (including any premium required to be paid),
        plus the amount of reasonable expenses incurred by us in acquiring such
        series of existing preferred stock and issuing such additional existing
        preferred stock, parity securities or senior securities (as the case may
        be); with such shares being issued no sooner than the date we
        repurchase, redeem or otherwise retire such series of the existing
        preferred stock; and

      - additional shares of existing preferred stock as dividends on the
        existing preferred stock in accordance with the certificates of
        designation of the existing preferred stock, as in existence on the
        original issue date of the Series B preferred stock.

     In addition, if we fail to (1) make a mandatory redemption or conversion or
a change of control offer or (2) comply with certain covenants or make certain
payments on our indebtedness, holders of a majority of the outstanding shares of
Series B preferred stock, voting separately as one class, will be entitled to
elect the lesser of two directors or that number of directors constituting at
least 25% of the board of directors.

     Liquidation Rights.  The Series B preferred stock, with respect to dividend
rights and rights on our liquidation, winding-up and dissolution, ranks senior
to all classes of common stock and junior to all of our outstanding indebtedness
and all other series of our preferred stock.

     Redemption.  We may redeem all or a portion of the Series B preferred
stock, at our option, at any time on or after the date that is five years after
its original issue date, at the redemption price set forth in the Series B
certificate of designation. The holder of the Series B preferred stock also has
the right, for a period of 60 days beginning on September 16, 2002, and on each
September 16 after 2002, or in case of events of default under the transaction
agreements with NBC, which is the holder of the Series B preferred stock, to
demand that we redeem the Series B preferred stock, subject in each case to
conditions which include compliance by us with the covenants contained in the
terms of our outstanding indebtedness and preferred stock. NBC has the right to
demand that we redeem the Series B preferred stock if the FCC renders a final
decision that NBC's investment in us and the acquisition of the other rights
provided for in the transaction agreements with NBC is "attributable" to NBC (as
that term is defined under applicable rules of the FCC). In the event of a
change of control, we are required to make an offer to purchase all then
outstanding shares of Series B preferred stock at a purchase price of 101% of
the liquidation preference plus, without duplication, an amount in cash equal to
all of its accumulated and unpaid dividends.

     Conversion Rights.  Shares of the Series B preferred stock will be
convertible at the option of the holder into (1) a number of shares of Class A
common stock or (2) in the case of NBC only, if NBC determines in its sole
discretion that it is prevented under applicable laws and regulations of the FCC
from holding shares of Class A common stock issuable upon conversion of its
shares of Series B preferred stock, into a number of
                                        74


shares of non-voting common stock (which upon disposition by NBC will
automatically be converted into shares of Class A common stock), equal to the
original issue price of the shares of Series B preferred stock surrendered for
conversion, plus, without duplication, an amount in cash equal to accumulated
and unpaid dividends, divided by the conversion price then in effect. The
conversion price of the Series B preferred stock was initially $13.01 per share,
and increases at a rate equal to the dividend rate on the Series B preferred
stock, such that each share of Series B preferred stock is convertible into a
fixed number of shares of common stock. We are required to cause the shares of
Class A common stock issuable upon conversion of the Series B preferred stock
(or in the case of NBC's election to convert into non-voting common stock, upon
conversion of such non-voting common stock) to be approved for listing on the
American Stock Exchange (or other principal securities exchange on which the
Class A common stock may at the time be listed for trading), subject to official
notification of issuance, before the date of issuance.

     Exchange Provisions.  The shares of Series B preferred stock are
exchangeable, at the option of the holders, into convertible debentures ranking
on a parity with our other subordinated indebtedness subject, with respect to
any exchange before January 1, 2007, to the exchange being permitted under the
terms of our debt and preferred stock instruments.

     Restrictive Covenants.  The certificate of designation for the Series B
preferred stock contains covenants for the benefit of the holder of the Series B
preferred stock that, among other things, and subject to certain exceptions,
restrict our ability and the ability of our restricted subsidiaries to:

     - incur additional indebtedness;

     - pay dividends and make other restricted payments;

     - issue certain stock of subsidiaries;

     - enter into transactions with affiliates;

     - merge or consolidate us or the guarantors; and

     - transfer and sell assets.

     Our rights and obligations in respect of the Series B preferred stock are
also subject to the terms of our agreements with NBC. See "Business -- NBC
Relationship."

     Although we have received the opinion of our legal counsel that it is more
likely than not that a Delaware court would conclude that the accretion of the
notes issued in this offering from their original issue price to their principal
amount at maturity will not constitute an incurrence of debt that would violate
the restrictive covenant limiting our ability to incur additional debt that is
contained in the certificate of designation for the Series B preferred stock, we
cannot assure you that a Delaware court would reach the same conclusion. If a
court were to conclude that we had incurred debt in violation of the terms of
the certificate of designation for the Series B preferred stock, and we were not
able to cure the violation, we would be required to increase the size of our
board of directors by two members and the holders of the Series B preferred
stock would have the sole right to elect directors to fill those vacancies
(provided the holder was permitted under FCC rules to elect members of our board
of directors). Because the certificate of designation for our 13 1/4%
exchangeable preferred stock contains substantially identical restrictions on
our ability to incur debt, the holders of our 13 1/4% exchangeable preferred
stock could acquire the right to elect two additional directors to our board of
directors in the same fashion. We cannot predict the effect that the addition of
four directors elected by the holders of these series of preferred stock would
have on the operations and prospects of our company.

13 1/4% EXCHANGE DEBENTURES

     Our 13 1/4% exchange debentures due 2006 are issuable upon exchange of our
13 1/4% exchangeable preferred stock. Currently, no 13 1/4% exchange debentures
are outstanding. At our option, the 13 1/4% exchangeable preferred stock is
exchangeable into the 13 1/4% exchange debentures, in whole or in part; provided
that immediately after giving effect to a partial exchange, there must be
outstanding shares of 13 1/4% exchangeable preferred stock with an aggregate
liquidation preference of not less than $75.0 million and not less than $75.0
million of aggregate principal amount of 13 1/4% exchange debentures.

     The 13 1/4% exchange debentures are limited in aggregate principal amount
to the aggregate liquidation preference of the 13 1/4% exchangeable preferred
stock. If issued, the 13 1/4% exchange debentures will be our
                                        75


general unsecured obligations, subordinated in right of payment to our senior
indebtedness, will rank equally with the notes and our 10 3/4% notes and 8%
exchange debentures, and will be senior in right of payment to all of our common
and preferred stock.

     If issued, the 13 1/4% exchange debentures will be fully and
unconditionally guaranteed, on a senior subordinated basis, as to payment of
principal, premium, if any, and interest, jointly and severally, by all of our
direct and indirect subsidiaries. The 13 1/4% exchange debentures are
subordinated to all senior indebtedness of the respective guarantors.

     If issued, the 13 1/4% exchange debentures will mature on November 15,
2006, and bear interest at a rate of 13 1/4% per annum from the date of original
issuance until maturity. Interest will be payable semi-annually in arrears on
May 15 and November 15. We will be entitled, on or after May 15, 2003, to redeem
all or a portion of any 13 1/4% exchange debentures that may be issued, at our
option, at any time at the redemption prices set forth below, expressed in
percentages of principal amount on the redemption date, if redeemed during the
12-month period commencing on May 15 of the year set forth below:



                                                               REDEMPTION
PERIOD                                                           PRICE
- ------                                                         ----------
                                                            
2003........................................................    106.625%
2004........................................................    103.313%
2005 and thereafter.........................................    100.000%


in each case together with accrued and unpaid interest to the redemption date.
In the event of a change of control (as defined in the 13 1/4% exchange
indenture), we will be required to make an offer to purchase all outstanding
13 1/4% exchange debentures at a price equal to 101% of the principal amount,
plus accrued and unpaid interest to the date of repurchase.

     The 13 1/4% exchange indenture contains covenants for the benefit of the
holders of the 13 1/4% exchange debentures that restrict our ability and the
ability of our restricted subsidiaries (as defined in the junior exchange
indenture) to:

     - incur additional indebtedness;

     - pay dividends and make other restricted payments;

     - issue certain stock of subsidiaries;

     - enter into transactions with affiliates;

     - merge or consolidate our company or the guarantors; and

     - transfer and sell assets.

8% EXCHANGE DEBENTURES

     Our 8% exchange debentures due 2009 are issuable upon exchange of our
Series B preferred stock. Currently, no 8% exchange debentures are outstanding.
At the option of the holder of the Series B preferred stock, the Series B
preferred stock is exchangeable in whole or in part into the 8% exchange
debentures, subject to certain conditions, including that, with respect to any
exchange before January 1, 2007, the exchange be permitted under the terms of
our existing debt instruments (including the indenture governing the notes);
provided that any partial exchange must be with respect to outstanding shares of
Series B preferred stock with an aggregate liquidation preference of not less
than $50.0 million.

     If issued, the 8% exchange debentures will be our general unsecured
obligations, subordinated in right of payment to our senior indebtedness (as
defined in the related indenture), will rank equally with the notes and our
10 3/4% notes and 13 1/4% exchange debentures, and will be senior in right of
payment to all of our common and preferred stock.

     If issued, the 8% exchange debentures will be fully and unconditionally
guaranteed, on a senior subordinated basis, as to payment of principal, premium,
if any, and interest, jointly and severally, by all of our direct and indirect
subsidiaries. The 8% exchange debentures are subordinated to all senior
indebtedness of the respective guarantors.

                                        76


     If issued, the 8% exchange debentures will mature on December 31, 2009, and
bear interest at a rate of 8% per annum from the date of original issuance until
maturity, provided that if the 8% exchange debentures are issued before
September 15, 2004, then the dividend rate will be adjusted on September 15,
2004, to equal the dividend rate at which the 8% exchange debentures would trade
at par, as determined by a nationally recognized investment banking firm.
Interest will be payable semi-annually in arrears on June 30 and December 31. We
may, at our option, pay interest on any interest payment date either in cash or
by the issuance of additional 8% exchange debentures in an aggregate principal
amount equal to the amount of interest due.

     We will be entitled, at any time on or after September 10, 2004, to redeem
all or a portion of any 8% exchange debentures that are issued at a redemption
price of 100% of the principal amount thereof plus accrued and unpaid interest.
In the event of a change of control (as defined in the related indenture), we
will be required to make an offer to purchase all outstanding 8% exchange
debentures at a price equal to 101% of the principal amount plus accrued and
unpaid interest to the date of repurchase.

     The indenture for the 8% exchange debentures contains covenants for the
benefit of the holders of the 8% exchange debentures that restrict our ability
and the ability of our restricted subsidiaries (as defined in the related
indenture) to:

     - incur additional indebtedness;

     - pay dividends and make other restricted payments;

     - issue certain stock of subsidiaries;

     - enter into transactions with affiliates;

     - merge or consolidate our company or the guarantors; and

     - transfer and sell assets.

     The 8% exchange debentures will be convertible into our common stock to the
same extent, in the same manner and subject to the same restrictions, as the
Series B preferred stock.

                                        77


                               THE EXCHANGE OFFER

PURPOSE AND EFFECT OF THE EXCHANGE OFFER

     The original notes were sold by us on January 14, 2002 to the initial
purchasers, who resold them to certain qualified institutional buyers in a
private offering. In connection with the private offering, we entered into the
registration rights agreement, which requires that within 60 days following the
issuance of the original notes, we file with the SEC a registration statement
under the Securities Act with respect to an issue of new notes of our company
identical in all material respects to the original notes, that we use our best
efforts to cause such registration statement to become effective under the
Securities Act within 120 days following the issuance of the original notes, and
that upon the effectiveness of that registration statement, we offer to the
holders of the original notes the opportunity to exchange their original notes
for a like principal amount at maturity new notes, which will be issued without
a restrictive legend. The purpose of the exchange offer is to fulfill our
obligations under the registration rights agreement. The original notes were
initially represented by one global note in registered form, registered in the
name of Cede & Co., a nominatee of The Depository Trust Company, New York, New
York ("DTC"), as depositary.

     We are making the exchange offer in reliance on the position of the staff
of the SEC as set forth in Exxon Capital Holdings Corp., SEC No-Action Letter
(April 13, 1989), Morgan Stanley & Co. Inc., SEC No-Action Letter (June 5, 1991)
and Shearman & Sterling, SEC No-Action Letter (July 2, 1993). We have not,
however, sought our own no-action letter, and we cannot assure you that the
staff of the SEC would make a similar determination with respect to the exchange
offer as in such other circumstances. Based upon these interpretations by the
staff of the SEC, we believe that the new notes issued under the exchange offer
in exchange for original notes may be offered for resale, resold and otherwise
transferred by a holder thereof other than (i) a broker-dealer who purchased
such original notes directly from us to resell under Rule 144A or any other
available exemption under the Securities Act or (ii) a person that is our
"affiliate" (as defined in Rule 405 of the Securities Act), without compliance
with the registration and prospectus delivery provisions of the Securities Act,
provided that such new notes are acquired in the ordinary course of such
holder's business and that such holder is not participating, and has no
arrangement or understanding with any person to participate, in the distribution
of such new notes. Holders of original notes accepting the exchange offer will
represent to us in the Letter of Transmittal that such conditions have been met.
Any holder who participates in the exchange offer for the purpose of
participating in a distribution of the new notes may not rely on the position of
the staff of the SEC as set forth in these no-action letters and would have to
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any secondary resale transaction. This
prospectus may not be used by such holders for any secondary resale. A secondary
resale transaction in the United States by a holder who is using the exchange
offer to participate in the distribution of new notes must be covered by a
registration statement containing the selling securityholder information
required by Item 507 of Regulation S-K of the Securities Act.

     Each broker-dealer that receives new notes for its own account under the
exchange offer must acknowledge that it acquired the original notes as a result
of market-making activities or other trading activities and will deliver a
prospectus in connection with any resale of such new notes. This prospectus, as
it may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of new notes received in exchange for
original notes where such original notes were acquired by such broker-dealer as
a result of market-making activities or other trading activities. The Letter of
Transmittal states that by acknowledging and delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. We have agreed that we will make this prospectus
available to broker-dealers for use in connection with any such resale. See
"Plan of Distribution."

     Except as aforesaid, this prospectus may not be used for an offer to
resell, resale or other retransfer of new notes.

     The exchange offer is not being made to, nor will we accept tenders for
exchange from, holders of original notes in any jurisdiction in which the
exchange offer or the acceptance thereof would not be in compliance with the
securities or blue sky laws of such jurisdiction.

     As described above, the original notes were sold to the initial purchasers
and resold by the initial purchasers to certain qualified institutional buyers
on January 14, 2002, and there is currently a limited trading market for them.
To the extent original notes are tendered and accepted in the exchange offer,
the aggregate
                                        78


outstanding principal amount at maturity original notes will decrease. Following
the consummation of the exchange offer, holders of original notes will continue
to be subject to certain restrictions on transfer. Accordingly, the liquidity of
the market for the original notes could be adversely affected. See "Risk
Factors -- If you do not exchange your original notes, your original notes will
continue to be subject to the existing transfer restrictions and you may be
unable to sell your original notes."

TERMS OF THE EXCHANGE OFFER

     Upon the terms and subject to the conditions set forth in this prospectus
and in the Letter of Transmittal (which together constitute the "exchange
offer"), we will accept any and all original notes validly tendered, and not
theretofore withdrawn, before 5:00 p.m., New York City time, on the expiration
date. We will issue $1,000 principal amount at maturity of new notes in exchange
for each $1,000 principal amount at maturity of original notes accepted in the
exchange offer. Holders may tender some or all of their original notes under the
exchange offer. The exchange offer is not conditioned upon any minimum number of
original notes being tendered for exchange.

     The form and terms of the new notes are identical in all material respects
to the form and terms of the original notes except that the new notes will have
been registered under the Securities Act and, therefore, will not bear legends
restricting the transfer thereof.

     We intend to conduct the exchange offer in accordance with the applicable
requirements of the Exchange Act and the rules and regulations of the SEC
thereunder.

     For purposes of the exchange offer, we shall be deemed to have accepted for
exchange and exchanged original notes validly tendered for exchange when, as and
if we give oral or written notice to the exchange agent of acceptance of the
tenders of such original notes for exchange. Exchange of original notes accepted
for exchange under the exchange offer will be made by deposit of tendered
original notes with the exchange agent, which will act as agent for the
tendering holders for the purpose of receiving new notes from us and
transmitting such new notes to tendering holders. In all cases, any exchange of
new notes for original notes accepted for exchange under the exchange offer will
be made only after timely receipt by the exchange agent of such original notes
(or of a confirmation of a book-entry transfer of such original notes in the
exchange agent's account at the Book-Entry Transfer Facility (as defined in
"Procedures for Tendering" below)), a properly completed and duly executed
Letter of Transmittal (or facsimile thereof) and any other required documents.
For a description of the procedures for tendering original notes under the
exchange offer, see "Procedures for Tendering."

     If any tendered original notes are not accepted for exchange because of an
invalid tender, or because of the occurrence of certain other events set forth
herein or otherwise, any such unaccepted original notes will be returned without
expense to the tendering holders thereof (or in the case of original notes
tendered by book-entry transfer, such original notes will be credited to the
account of that holder maintained at the Book-Entry Transfer Facility), as
promptly as practicable after the expiration or termination of the exchange
offer.

     No alternative, conditional or contingent tenders will be accepted. All
tendering holders, by execution of a Letter of Transmittal (or facsimile
thereof), waive any right to receive notice of acceptance of their original
notes for exchange.

     Holders who tender original notes in the exchange offer will not be
required to pay brokerage commission or fees or, subject to the instructions in
the Letter of Transmittal, transfer taxes with respect to the exchange of
original notes under the exchange offer. We will pay all charges and expenses,
other than certain applicable taxes, in connection with the exchange offer. See
"Fees and Expenses."

     This prospectus, together with the Letter of Transmittal, is being sent to
registered holders of original notes as of March   , 2002.

EXPIRATION DATE; EXTENSIONS; AMENDMENTS; TERMINATION

     The expiration date will be 5:00 p.m. New York City time on March   , 2002,
unless we, in our sole discretion, extend the exchange offer, in which case the
expiration date will be the latest date and time to which the exchange offer is
extended.

                                        79


     In order to extend the exchange offer, we will notify the exchange agent of
any extension by oral (promptly confirmed in writing) or written notice and will
make a public announcement thereof, each before 9:00 a.m. New York City time, on
the next business day after the previously scheduled expiration date of the
exchange offer.

     We reserve the right, at any time and from time to time, in our sole
discretion (subject to our obligations under the registration rights agreement)
(i) to delay accepting any original notes or to delay the issuance and exchange
of new notes for original notes, (ii) to extend the exchange offer or, if any of
the conditions set forth below under "Conditions to the Exchange Offer" have not
been satisfied, to terminate the exchange offer by giving oral or written notice
of such delay, extension or termination to the exchange agent, or (iii) to amend
the terms of the exchange offer in any manner.

     If we extend the period of time during which the exchange offer is open, or
if we are delayed in accepting for exchange, or in issuing and exchanging the
new notes for, any original notes, or are unable to accept for exchange, or
issue new notes for, any original notes under the exchange offer for any reason,
then, without prejudice to our rights under the exchange offer, the exchange
agent may, on our behalf, retain all original notes tendered, and such original
notes may not be withdrawn except as otherwise provided below in "Withdrawal of
Tenders." The exercise by us of the right to delay acceptance for exchange of,
or the issuance and the exchange of the new notes for, any original notes is
subject to applicable law, including Rule 14e-1(c) under the Exchange Act, which
requires that we pay the consideration offered or return the original notes
deposited by or on behalf of the holders thereof promptly after the termination
or withdrawal of the exchange offer.

     Any such delay in acceptance, extension, termination or amendment will be
followed as promptly as practicable by a public announcement thereof. If the
exchange offer is amended in a manner determined by us to constitute a material
change, we will promptly disclose such amendment by means of a prospectus
supplement that will be distributed to the registered holders, and we will
extend the exchange offer for a period of five to ten business days, depending
upon the significance of the amendment and the manner of disclosure to the
registered holders, if the exchange offer would otherwise expire during such
five to ten business day period. The term "business day" shall mean any day
other than Saturday, Sunday or a federal holiday and shall consist of the time
period from 12:01 a.m. through 12:00 midnight, New York City time.

     Without limiting the manner in which we may choose to make a public
announcement of any delay, extension, termination or amendment of the exchange
offer, we shall have no obligation to make public, advertise or otherwise
communicate any such public announcement, other than by making a timely release
to the Dow Jones News Service. Any such announcement of an extension of the
exchange offer shall be issued no later than 9:00 a.m., New York City time, on
the next business day after the previously scheduled expiration date of the
exchange offer.

PROCEDURES FOR TENDERING

     Only a holder of original notes may tender such original notes in the
exchange offer. To tender in the exchange offer, the holder must complete, sign
and date the Letter of Transmittal, or a facsimile thereof, have the signatures
thereon guaranteed if required by the Letter of Transmittal, and mail or
otherwise deliver such Letter of Transmittal, or such facsimile, together with
any other required documents, to the exchange agent so that delivery is received
before 5:00 p.m., New York City time, on the expiration date. To be tendered
effectively, the Letter of Transmittal and other required documents must be
received by the exchange agent at the address set forth below under "Exchange
Agent" before 5:00 p.m., New York City time, on the expiration date. In
addition, either (i) the tendered original notes must be received by the
exchange agent along with the Letter of Transmittal, or such original notes must
be tendered under the procedures for book-entry transfer described below and a
confirmation of receipt of such tendered original notes must be received by the
exchange agent before 5:00 p.m., New York City time, on the expiration date, or
(ii) the tendering holder must comply with the guaranteed delivery procedures
described below.

     NO LETTERS OF TRANSMITTAL, CERTIFICATES REPRESENTING ORIGINAL NOTES OR ANY
OTHER REQUIRED DOCUMENTATION SHOULD BE SENT TO US. SUCH DOCUMENTS SHOULD BE SENT
ONLY TO THE EXCHANGE AGENT.

                                        80


     The tender by a holder of original notes made under any method of delivery
set forth in the Letter of Transmittal will constitute a binding agreement
between such tendering holder and us in accordance with the terms and subject to
the conditions of the exchange offer.

     The method of delivery of original notes and the Letter of Transmittal and
all other required documents to the exchange agent is at the election and risk
of the holder. Instead of delivery by mail, we recommend that holders use an
overnight or hand delivery service. In all cases, sufficient time should be
allowed to assure delivery to the exchange agent before the expiration date.
Holders may request their respective brokers, dealers, commercial banks, trust
companies or nominees to effect the above transaction for such holders or for
assistance concerning the exchange offer.

     Any beneficial owner whose original notes are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should contact the registered holder promptly and instruct such
registered holder to tender on such beneficial owner's behalf. If such
beneficial owner wishes to tender on such owner's own behalf, such owner must,
before completing and executing the Letter of Transmittal and delivering such
owner's original notes, either make appropriate arrangements to register
ownership of the original notes in such owner's name or obtain a properly
completed bond power from the registered holder. The transfer of registered
ownership may take considerable time.

     If the Letter of Transmittal is signed by a person other than the
registered holder of any original notes (which term includes any participants in
DTC whose name appears on a security position listing as the owner of the
original notes) or if delivery of the original notes is to be made to a person
other than the registered holder, such original notes must be endorsed or
accompanied by a properly completed bond power, in either case signed by such
registered holder as such registered holder's name appears on such original
notes with the signature on the original notes or the bond power guaranteed by
an Eligible Institution (as defined herein).

     If the Letter of Transmittal or any original notes or bond powers are
signed by trustees, executors, administrators, guardians, attorney-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing and, unless waived by us,
must submit with the Letter of Transmittal evidence satisfactory to us of their
authority to so act.

     Signature on a Letter of Transmittal or a notice of withdrawal, as the case
may be, must be guaranteed by an Eligible Institution unless the original notes
tendered pursuant thereto are tendered (i) by a registered holder who has not
completed the box entitled "Special Registration Instructions" or "Special
Delivery Instructions" on the Letter of Transmittal, (ii) for the account of an
Eligible Institution, or (iii) for the account of DTC. See Instruction 4 in the
Letter of Transmittal. If signature on a Letter of Transmittal or a notice of
withdrawal, as the case may be, is required to be guaranteed, such guarantee
must be by a member firm of a registered national securities exchange or of the
National Association of Securities Dealers, Inc., a commercial bank or trust
company having an office or correspondent in the United States or an "eligible
guarantor institution" within the meaning of Rule 17Ad-15 under the Exchange Act
(any of which is referred to in this prospectus as an "Eligible Institution").

     The exchange agent will establish an account with respect to the original
notes at DTC (the "Book-Entry Transfer Facility") for the purpose of the
exchange offer promptly after the date of this prospectus, and any financial
institution that is a participant in the Book-Entry Transfer Facility's system
may make delivery of the original notes by causing the Book-Entry Transfer
Facility to transfer such original notes into the exchange agent's notes account
in accordance with the Book-Entry Transfer Facility's procedure for such
transfer. ALTHOUGH DELIVERY OF ORIGINAL NOTES MAY BE EFFECTED THROUGH BOOK-ENTRY
TRANSFER IN THE EXCHANGE AGENT'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY,
THE LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF) WITH ALL REQUIRED SIGNATURE
GUARANTEES AND ANY OTHER REQUIRED DOCUMENTS MUST, IN ANY CASE, BE TRANSMITTED TO
AND received and confirmed by the exchange agent at its address set forth below
before 5:00 p.m., New York City time, on the expiration date, except as
otherwise provided below under the caption "Guaranteed Delivery Procedures."
Delivery of documents to the Book-Entry Transfer facility in accordance with its
procedures does not constitute delivery to the exchange agent.

     All questions as to the validity, form (including time of receipt),
acceptance and withdrawal of tendered original notes will be determined by us in
our sole discretion, which determination will be final and binding. We reserve
the absolute right to reject any and all original notes determined by us not to
be validly tendered or any original notes our acceptance of which would, in the
opinion of our counsel, be unlawful. We also reserve

                                        81


the absolute right to waive any defects, irregularities or conditions of tender
as to particular original notes. Our interpretation of the terms and conditions
of the exchange offer (including the instructions in the Letter of Transmittal)
will be final and binding on all parties. Unless waived by us in our sole
discretion, any defects or irregularities in connection with tenders of original
notes will render such tenders invalid unless such defects or irregularities are
cured within such time as we shall determine. Although we intend to notify
holders of defects or irregularities with respect to tenders of original notes,
neither we, the exchange agent nor any other person shall incur any liability
for failure to give such notification. Any original notes received by the
exchange agent that are not properly tendered and as to which the defects or
irregularities have not been cured or waived, as provided for herein, will be
returned by the exchange agent to the tendering holders, unless otherwise
provided in the Letter of Transmittal, as soon as practicable following the
expiration date.

     In addition, we reserve the right in our sole discretion to purchase or
make offers for any original notes that remain outstanding after the expiration
date, or, as set forth herein, to terminate the exchange offer and, to the
extent permitted by applicable law, purchase original notes in the open market,
privately negotiated transactions or otherwise. The terms of any such purchases
or offers could differ from the terms of the exchange offer.

GUARANTEED DELIVERY PROCEDURES

     Holders who wish to tender their original notes and (i) whose original
notes are not immediately available, or (ii) who cannot deliver their original
notes (or complete the procedures for book-entry transfer), the Letter of
Transmittal or any other required documents to the exchange agent before the
expiration date, may nevertheless effect a tender of original notes if all of
the following conditions are met:

          (a) the tender is made by or through an Eligible Institution;

          (b) before the expiration date, the exchange agent receives from such
     Eligible Institution a properly completed and duly executed Notice of
     Guaranteed Delivery (by facsimile transmission, mail, hand delivery or
     overnight courier) setting forth the name and address of the holder, any
     certificate number(s) of such original notes and the principal amount at
     maturity original notes tendered, stating that the tender is being made
     thereby and guaranteeing that, within five New York Stock Exchange trading
     days after the expiration date, the Letter of Transmittal (or facsimile
     thereof) together with the certificate(s) representing the original notes
     (or a confirmation of a book-entry transfer of such original notes in the
     exchange agent's account at the Book-Entry Transfer Facility) and any other
     documents required by the Letter of Transmittal will be deposited into the
     exchange agent's account at the Book-Entry Transfer Facility and any other
     documents required by the Letter of Transmittal will be deposited by the
     Eligible Institution with the exchange agent; and

          (c) such properly completed and executed Letter of Transmittal (or
     facsimile thereof) as well as the certificate(s) representing all tendered
     original notes in proper form for transfer (or a confirmation of book-entry
     transfer of such original notes into the Exchange Agent's account at the
     Book-Entry Transfer Facility) and all other documents required by the
     Letter of Transmittal are received by the exchange agent within five New
     York Stock Exchange trading days after the Expiration Date.

          A Notice of Guaranteed Delivery is being sent to holders along with
     this prospectus and the Letter of Transmittal.

WITHDRAWAL OF TENDERS

     Except as otherwise provided in this prospectus, tenders of original notes
may be withdrawn at any time before 5:00 p.m. New York City time, on the
expiration date, as such term is defined above under the caption "Expiration
Date; Extensions; Amendments; Termination." If we extend the period of time
during which the exchange offer is open, or if we are delayed in accepting for
exchange, or in issuing and exchanging the new notes for, any original notes or
are unable to accept for exchange, or issue and exchange the new notes for, any
original notes under the exchange offer for any reason, then without prejudice
to our rights under the exchange offer, the exchange agent may, on our behalf,
retain all original notes tendered, and such original notes may not be withdrawn
except as otherwise provided herein, subject to Rule 14e-1(c) under the Exchange
Act, which provides that the person making an issuer tender offer shall either
pay the consideration offered or return tendered securities, promptly after the
termination or withdrawal of the offer.

                                        82


     To withdraw a tender of original notes in the exchange offer, a written or
facsimile transmission notice of withdrawal must be received by the exchange
agent at its offices as set forth herein before 5:00 p.m., New York City time,
on the expiration date. Any such notice of withdrawal must (i) specify the name
of the person having deposited the original notes to be withdrawn (the
"Depositor"), (ii) specify the serial numbers on the particular certificates
evidencing the original notes to be withdrawn and the name of the registered
holder thereof (if certificates have been delivered or otherwise identified to
the exchange agent) or the name and number of the account at DTC to be credited
with withdrawal of the original notes (if the original notes have been tendered
under the procedures for book-entry transfer), (iii) be signed by the holders in
the same manner as the original signature on the Letter of Transmittal by which
original notes were tendered (including any required signature guarantees) or be
accompanied by documents of transfer sufficient to have the registrar (the
"Registrar") with respect to the original notes register the transfer of such
original notes into the name of the person withdrawing the tender and (iv)
specify the name in which any such original notes are to be registered, if
different from that of the Depositor. All questions as to the validity, form and
eligibility (including time of receipt) of such notices will be determined by us
in our sole discretion, which determination shall be final and binding on all
parties. Any original notes so withdrawn will be deemed not to have been validly
retendered for purposes of the exchange offer and no new notes will be issued
with respect thereto unless the original notes so withdrawn are validly
retendered. Properly withdrawn original notes may be retendered by following one
of the procedures described above under "Procedures for Tendering" at any time
before the expiration date.

CONDITIONS TO THE EXCHANGE OFFER

     Notwithstanding any other term of the exchange offer and without prejudice
to our other rights under the exchange offer, we will not be required to accept
for exchange, or exchange new notes for, any original notes, and may amend or
terminate the exchange offer as provided herein before the acceptance of such
original notes, if, among other things:

          (a) any action or proceeding is instituted or threatened in any court
     or by or before any governmental agency with respect to the exchange offer,
     which might materially impair our ability to proceed with the exchange
     offer or materially impair the contemplated benefits of the exchange offer
     to us, or any material adverse development has occurred in any existing
     action or proceeding with respect to us or any of our subsidiaries; or

          (b) any change, or any development involving a prospective change, in
     our business or financial affairs or those of any of our subsidiaries has
     occurred, which might materially impair our ability to proceed with the
     exchange offer or materially impair the contemplated benefits of the
     exchange offer to us; or

          (c) any law, statute, rule or regulation is proposed, adopted or
     enacted, which might materially impair our ability to proceed with the
     exchange offer or materially impair the contemplated benefits of the
     exchange offer to us; or

          (d) the new notes to be received by holders of original notes in the
     exchange offer, upon receipt, will not be transferable by such holders
     (other than our "affiliates") without restriction under the Securities Act
     and Exchange Act and without material restriction under the blue sky laws
     of substantially all of the states of the United States (subject, in the
     case of Restricted Holders, to any requirements that such persons comply
     with the prospectus delivery requirements applicable to Restricted
     Holders).

     If we determine in our reasonable judgment that any of the conditions are
not satisfied, we may, subject to our obligations under the registration rights
agreement to consummate the exchange offer, (i) terminate the exchange offer and
return all tendered original notes to tendering holders, (ii) extend the
exchange offer and, subject to withdrawal rights as set forth in "Withdrawal of
Tenders" above, retain all such original notes until the expiration of the
exchange offer as so extended, (iii) waive such condition and, subject to any
requirement to extend the period of time during which the exchange offer is
open, exchange all original notes validly tendered for exchange by the
expiration date and not withdrawn, or (iv) delay acceptance or exchange of, or
delay the issuance and exchange of new notes for, any original notes until
satisfaction or waiver of such conditions to the exchange offer even though the
exchange offer has expired. Our right to delay acceptance for exchange of, or
delay the issuance and exchange of new notes for, original notes tendered for
exchange under the exchange offer is subject to provisions of applicable law,
including, to the extent applicable, Rule 14e-1(c)
                                        83


promulgated under the Exchange Act, which requires that we pay the consideration
offered or return the original notes deposited by or on behalf of holders of
original notes promptly after the termination or withdrawal of the exchange
offer. For a description of our right to extend the period of time during which
the exchange offer is open and to amend, delay or terminate the exchange offer,
see "Expiration Date; Extensions; Amendments; Termination" above. If such waiver
constitutes a material change to the exchange offer, we will promptly disclose
such waiver by means of a prospectus supplement that will be distributed to the
registered holders, and we will extend the exchange offer for a period of five
to ten business days, depending upon the significance of the waiver and the
manner of disclosure to the registered holders, if the exchange offer would
otherwise expire during such five to ten business day period.

EXCHANGE AGENT

     The Bank of New York has been appointed as exchange agent for the exchange
offer. Questions and requests for assistance, requests for additional copies of
this prospectus or of the Letter of Transmittal and requests for Notices of
Guaranteed Delivery should be directed to the exchange agent addressed as
follows:

     By Registered or Certified Mail, Overnight Courier or Hand:

          The Bank of New York
        15 Broad Street
        Reorganization Unit, 16th Floor
        New York, NY 10286
        Attention:

     By Phone:
          (   )

     By Facsimile:
          (   )

FEES AND EXPENSES

     The expense of soliciting tenders will be borne by us. The principal
solicitation is being made by mail; additional solicitation, however, may be
made by telegraph, telephone or in person by officers and regular employees of
us and our affiliates.

     We have not retained any dealer-manager or other soliciting agent in
connection with the exchange offer and will not make any payments to brokers,
dealers or other persons soliciting acceptance of the exchange offer. We will,
however, pay the exchange agent reasonable and customary fees for its services
and will reimburse it for its reasonable out-of-pocket expenses in connection
therewith.

     The cash expenses to be incurred in connection with the exchange offer will
be paid by us and are estimated in the aggregate to be approximately $250,000.
Such expenses include fees and expenses of the exchange agent, Trustee, Paying
Agent and Registrar, accounting and legal fees and printing costs, among others.

     We will pay all transfer taxes, if any, applicable to the exchange of
original notes under the exchange offer. If, however, certificates representing
new notes, or original notes not tendered or accepted for exchange, are to be
delivered to, or are to be issued in the name of, any person other than the
registered holders of the original notes tendered, or if tendered original notes
are registered in the name of any person other than the person signing the
Letter of Transmittal, or if a transfer tax is imposed for any reason other than
the exchange of original notes under the exchange offer, then the amount of any
such transfer taxes (whether imposed on the registered holder or any other
persons) will be payable by the tendering holder. If satisfactory evidence of
payment of such taxes or exemption therefrom is not submitted with the Letter of
Transmittal, the amount of such transfer taxes will be billed directly to such
tendering holder.

ACCOUNTING TREATMENT

     The new notes will be recorded at the same carrying value as the original
notes as reflected in our accounting records on the date of the exchange.
Accordingly, no gain or loss for accounting purposes will be recognized. The
expenses of the exchange offer will be amortized over the term of the new notes.
                                        84


                              DESCRIPTION OF NOTES

     You can find the definitions of certain terms used in this description
under the subheading "Certain Definitions." In this description, the words "our
company", "we", "us" and "our" refer only to Paxson Communications Corporation
and not to any of its subsidiaries.

     We issued the original notes under, and the new notes will be issued under,
an indenture dated as of January 14, 2002 (the "Indenture"), among us, the
Subsidiary Guarantors and The Bank of New York, as trustee (the "Trustee").

     We urge you to read the Indenture because it, and not this description,
defines your rights as a holder of these notes. A copy of the Indenture is
available upon request to us at the address indicated under "Where You Can Find
Additional Information." We will issue notes only in fully registered form
without coupons, in denominations of $1,000 and integral multiples of $1,000.

PRINCIPAL, MATURITY AND INTEREST

     The notes will mature on January 15, 2009.

     The original notes were issued at a substantial discount to their aggregate
principal amount at maturity and generated gross proceeds to us of approximately
$308.3 million. Based on the issue price thereof, the yield to maturity of the
notes is 12 1/4% (computed on a semi-annual bond equivalent basis), calculated
from January 14, 2002. See "Important Federal Income Tax Consequences."
Additional Notes in an aggregate principal amount at maturity not to exceed
$300.0 million may be issued from time to time subject to the limitations set
forth under "-- Certain Covenants -- Limitation on Debt."

     Cash interest will not accrue or be payable on the notes before January 15,
2006. Thereafter cash interest on the notes will accrue at a rate of 12 1/4% per
annum and will be payable semi-annually in arrears on each January 15 and July
15, commencing on July 15, 2006, to the holders of record of the notes at the
close of business on January 1 and July 1, respectively, immediately preceding
such interest payment date. Cash interest will accrue from the most recent
interest payment date to which interest has been paid or, if no interest has
been paid, from January 15, 2006. Interest will be computed on the basis of a
360-day year of twelve 30-day months.

     The interest rate on the notes will increase if certain conditions are not
satisfied.

     You should refer to the description under the heading "Exchange Offer;
Registration Rights" for a more detailed description of the circumstances under
which the interest rate will increase.

RANKING

     The notes are:

     - senior subordinated, unsecured obligations of our company;

     - guaranteed on a senior subordinated, unsecured basis by the Subsidiary
       Guarantors;

     - subordinate in right of payment to all existing and future Senior Debt of
       our company and the Subsidiary Guarantors;

     - equal in ranking ("pari passu") in right of payment with all existing and
       future Senior Subordinated Debt (including, without limitation, the
       10 3/4% Notes) of our company and the Subsidiary Guarantors; and

     - senior to all existing and future Subordinated Obligations of our company
       and the Subsidiary Guarantors.

     In addition, the notes are senior to all of our Preferred Stock; however,
we have the option to exchange outstanding shares of our 13 1/4% exchangeable
preferred stock, and the holder has the right to require us to exchange
outstanding shares of its Series B preferred stock, in each case, into the
applicable series of Exchange Debentures, which will rank pari passu with the
notes, provided, however, that the Series B preferred stock and 13 1/4%
exchangeable preferred stock may only be exchanged for Exchange Debentures if,

                                        85


at the time of any such exchange, we are permitted to incur the Debt represented
by the Exchange Debentures under the covenant described under "-- Limitation on
Debt."

     The payment of principal of, premium, if any, interest on, and Special
Interest, if any, on the notes, and payment under any Subsidiary Guarantee, will
be subordinated in right of payment to the prior payment in full in cash, cash
equivalents or, as acceptable to the holders of Senior Debt, in any other
manner, of all Senior Debt of our company or the relevant Subsidiary Guarantor,
as the case may be. As a result of this subordination, holders of Senior Debt
will be entitled, in any of the following situations, to receive payment in full
of all amounts owed to them in respect of Senior Debt before any kind of payment
in respect of the notes can be made to holders of the notes:

     - liquidation, dissolution or other winding up of our company or the
       relevant Subsidiary Guarantor;

     - bankruptcy, reorganization, receivership or similar proceedings of or
       with respect to our company or the relevant Subsidiary Guarantor;

     - assignments for the benefit of our or the relevant Subsidiary Guarantor's
       creditors; or

     - any marshaling of our or the relevant Subsidiary Guarantor's assets and
       liabilities.

     As of December 31, 2001, after giving effect to the Refinancing, the total
outstanding Senior Debt and Senior Subordinated Debt of our company and the
Subsidiary Guarantors, excluding unused commitments made by lenders, would have
been as follows:

        $329.2 million -- approximate Senior Debt of our company

        $269.5 million -- approximate Senior Debt of the Subsidiary Guarantors
                          (consisting entirely of guarantees of a portion of our
                          borrowings under our senior credit facility)

        $508.3 million -- approximate Senior Subordinated Debt of our company
                          and the Subsidiary Guarantors combined

     In addition, as of December 31, 2001, after giving effect to the
Refinancing, we had $807.0 million aggregate liquidation preference of Preferred
Stock outstanding that is exchangeable, subject to the terms of the Preferred
Stock and the restrictions contained in the Indenture, into an aggregate
principal amount of $807.0 million of Exchange Debentures.

     Holders of the notes will only be creditors of our company and of those
subsidiaries that are Subsidiary Guarantors. In the case of subsidiaries that
are not Subsidiary Guarantors, all the existing and future liabilities of those
subsidiaries, including any claims of trade creditors and preferred
stockholders, will be effectively senior to the notes.

     A substantial portion of our operations is conducted through our
subsidiaries. Therefore, our ability to service our debt, including the notes,
is dependent upon the earnings of our subsidiaries, and their ability to
distribute those earnings as dividends, loans or other payments to us. Certain
laws may restrict our subsidiaries' ability to pay us dividends or to make loans
and advances to us. If these restrictions were applied to subsidiaries that are
not Subsidiary Guarantors, then we would not be able to use the earnings of
those subsidiaries to make payments on the notes. Furthermore, under certain
circumstances, bankruptcy "fraudulent conveyance" laws or other similar laws
could invalidate the Subsidiary Guarantees. If this were to occur, we would also
be unable to use the assets of the Subsidiary Guarantors to the extent they face
restrictions on distributing funds to us. Any of the situations described above
could make it more difficult for us to service our debt. See "Risk
Factors -- Risks Relating to the Notes -- A court may void the guarantees of the
notes or subordinate the guarantees to other obligations of the subsidiary
guarantors."

     The Indenture contains limitations on the amount of additional Debt that we
and the Restricted Subsidiaries may incur. The amounts of such Debt could
nevertheless be substantial and may be incurred either by Subsidiary Guarantors
or by our other subsidiaries.

     We may not pay principal of, premium, if any, interest on or Special
Interest, if any, on the notes, or make any deposit under the provisions
described under "-- Defeasance," and may not repurchase, redeem or otherwise
retire any notes (collectively, "pay the notes"), if any principal, including
amounts payable upon

                                        86


acceleration, premium, interest or other Obligation owing in respect of any
Designated Senior Debt has not been paid within any applicable grace period
(including at maturity), unless:

          (1) the default has been cured or waived or has ceased to exist; or

          (2) such Designated Senior Debt has been paid in full in cash;

provided, however, that we may pay the notes without regard to the foregoing if
we and the Trustee receive written notice approving such payment from the
Representative of such issue of Designated Senior Debt.

     During the continuance of any default (other than a default described in
the preceding paragraph) with respect to any Designated Senior Debt under which
the maturity thereof may be accelerated, we may not pay the notes for a period
(a "Payment Blockage Period") commencing upon the receipt by the Trustee of
written notice of such default from the Representative of the holders of such
Designated Senior Debt specifying an election to effect a Payment Blockage
Period (a "Payment Blockage Notice") and ending 179 days thereafter, unless such
Payment Blockage Period is earlier terminated:

          (a) by written notice to the Trustee or us from the Representative
     that gave such Payment Blockage Notice or the holders of at least a
     majority in principal amount of such issue of Designated Senior Debt;

          (b) because such default is cured, waived or otherwise no longer
     continuing; or

          (c) because such Designated Senior Debt has been repaid in full in
     cash.

Unless the holders of such Designated Senior Debt or the Representative of such
holders have accelerated the maturity of such Designated Senior Debt and not
rescinded such acceleration, we may (unless otherwise prohibited as described in
the first sentence of this paragraph) resume payments on the notes after the end
of such Payment Blockage Period.

     Not more than one Payment Blockage Notice with respect to all issues of
Designated Senior Debt may be given in any consecutive 360-day period,
irrespective of the number of defaults with respect to one or more issues of
Designated Senior Debt during such period.

     Upon any payment or distribution of our assets upon a total or partial
liquidation, dissolution or winding up of our company or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to us or
our Property, an assignment for the benefit of creditors or any marshaling of
our assets and liabilities:

          (a) the holders of Senior Debt will be entitled to receive payment in
     full in cash or cash equivalents or, as acceptable to the holders of Senior
     Debt, in any other manner, before the holders of the notes are entitled to
     receive any payment of principal of, premium, if any, interest on or
     Special Interest, if any, on the notes, except that holders of notes may
     receive and retain Permitted Junior Securities; and

          (b) until the Senior Debt is paid in full in cash, any distribution to
     which holders of the notes would be entitled but for the subordination
     provisions of the Indenture will be made to holders of the Senior Debt. If
     a payment or distribution is made to holders of notes (or the trustee for
     the benefit of such holders) that, because of the subordination provisions,
     should not have been made to them (or it), the recipients are required to
     hold the amount paid in trust for the holders of Senior Debt and pay it
     over to them as their interests may appear.

     If the maturity of the notes is accelerated when any amounts are
outstanding under instruments constituting Senior Debt, we may not pay the notes
until the first to occur of an acceleration under any of the instruments
constituting Senior Debt or five business days after receipt by us and the
Representative under any Senior Debt of notice of the acceleration of the notes
unless all Events of Default specified in such notice have been cured or waived.

     The Subsidiary Guarantee of each Subsidiary Guarantor will be subordinated
to Senior Debt of such Subsidiary Guarantor to the same extent and in the same
manner as the notes are subordinated to our Senior Debt.

     Because of the Indenture's subordination provisions, holders of Senior Debt
and other creditors (including trade creditors) of our company or the Subsidiary
Guarantors may recover disproportionately more than the holders of the notes
recover in a bankruptcy or similar proceeding relating to our company or a
Subsidiary Guarantor. This could apply even if the notes or the applicable
Subsidiary Guarantee ranked pari

                                        87


passu with the other creditors' claims. In such a case, there may be
insufficient assets, or no assets, remaining to pay the principal of or interest
on the notes.

     Payment from the money or the proceeds of U.S. Government Obligations held
in any defeasance trust under the provisions described under "-- Defeasance"
will not be subject to the subordination provisions described above.

     See "Risk Factors -- Risks Relating to the Notes -- Our substantial
indebtedness and preferred stock could impair our financial condition and our
ability to fulfill our obligations under our indebtedness and preferred stock,"
"-- Risks Relating to the Notes -- Your right to receive payments on the notes
and under the subsidiary guarantees is junior to the senior debt and that of the
subsidiary guarantors" and "Description of Material Indebtedness and Preferred
Stock."

SUBSIDIARY GUARANTEES

     Our obligations under the Indenture, including the repurchase obligation
resulting from a Change of Control, will be fully and unconditionally
guaranteed, jointly and severally, on a senior subordinated, unsecured basis, by
each Subsidiary Guarantor.

     If

          (1) our company and its Restricted Subsidiaries have sold their
     ownership interest in a Subsidiary Guarantor;

     or

          (2) our company or a Subsidiary Guarantor has sold all or
     substantially all the assets of a Subsidiary Guarantor, such Subsidiary
     Guarantor will be released from all of its obligations under its Subsidiary
     Guarantee. In addition, if we redesignate a Subsidiary Guarantor as an
     Unrestricted Subsidiary, which we can do under certain circumstances, the
     redesignated Subsidiary Guarantor will be released from all of its
     obligations under its Subsidiary Guarantee. See "-- Certain
     Covenants -- Designation of Restricted and Unrestricted Subsidiaries,"
     "-- Limitation on Issuance or Sale of Capital Stock of Restricted
     Subsidiaries" and "-- Merger, Consolidation and Sale of Property."

     If any Subsidiary Guarantor makes payments under its Subsidiary Guarantee,
each of our company and the other Subsidiary Guarantors must contribute their
share of such payments. Our company and the other Subsidiary Guarantors' shares
of such payment will be computed based on the proportion that the net worth of
our company or the relevant Subsidiary Guarantor represents relative to the
aggregate net worth of our company and all the Subsidiary Guarantors combined.

OPTIONAL REDEMPTION

     Except as set forth below, the notes will not be redeemable at our option
before January 15, 2006. Starting on that date, we may redeem all or any portion
of the notes, at once or over time, after giving the required notice under the
Indenture. We may redeem the notes at the redemption prices set forth below,
plus accrued and unpaid interest and Special Interest, if any, to the redemption
date (subject to the right of holders of record on the relevant record date to
receive interest due on the relevant interest payment date). The following
prices are for notes redeemed during the 12-month period commencing on January
15 of the years set forth below, and are expressed as percentages of principal
amount:



REDEMPTION YEAR                                                 PRICE
- ---------------                                                -------
                                                            
2006........................................................   106.125%
2007........................................................   103.063%
2008 and thereafter.........................................   100.000%


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     At any time before January 15, 2006, we may redeem all or any portion of
the notes, at once or over time, after giving the required notice under the
Indenture at a redemption price equal to the greater of:

          (a) 100% of the Accreted Value at such time of the notes to be
     redeemed, and

          (b) the present value at such time of the Accreted Value of such Note
     on January 15, 2006 discounted to the date of redemption on a semiannual
     basis (assuming a 360-day year consisting of twelve 30-day months) at the
     Treasury Rate plus 50 basis points,

plus, in either case, accrued and unpaid interest and Special Interest, if any,
to the redemption date (subject to the right of holders of record on the
relevant record date to receive interest due on the relevant interest payment
date).

     Any notice to holders of notes of any such redemption needs to include the
appropriate calculation of the redemption price, but does not need to include
the redemption price itself. The actual redemption price, calculated as
described above, must be set forth in an Officers' Certificate delivered to the
Trustee no later than two business days before the redemption date.

     At any time and from time to time, before January 15, 2005, we may redeem
up to a maximum of 35% of the original aggregate principal amount at maturity of
the notes with the proceeds of one or more Public Equity Offerings, at a
redemption price equal to 112.25% of the Accreted Value thereof, plus accrued
and unpaid Special Interest, if any, to the redemption date, provided, however,
that after giving effect to any such redemption, at least 65% of the original
aggregate principal amount at maturity of the notes remains outstanding. Any
such redemption shall be made within 90 days of such Public Equity Offering upon
not fewer than 30 nor more than 60 days' prior notice.

SINKING FUND

     There will be no mandatory sinking fund payments for the notes.

REPURCHASE AT THE OPTION OF HOLDERS UPON A CHANGE OF CONTROL

     Upon the occurrence of a Change of Control, each holder of notes shall have
the right to require us to repurchase all or any part of such holder's notes
under the offer described below (the "Change of Control Offer") at a purchase
price (the "Change of Control Purchase Price") equal to (a) 101% of the Accreted
Value and Special Interest, if any, if the purchase date is on or before January
15, 2006 and (b) 101% of the principal amount thereof, plus accrued and unpaid
interest, if any, and Special Interest, if any, to the purchase date if the
purchase date is after January 15, 2006 (subject to the right of holders of
record on the relevant record date to receive interest due on the relevant
interest payment date).

     Within 30 days following any Change of Control, we shall:

          (a) cause a notice of the Change of Control Offer to be sent at least
     once to the Dow Jones News Service or similar business news service in the
     United States; and

          (b) send, by first-class mail, with a copy to the Trustee, to each
     holder of notes, at such holder's address appearing in the Security
     Register, a notice stating:

             (1) that a Change of Control has occurred and a Change of Control
        Offer is being made under the covenant entitled "Repurchase at the
        Option of Holders Upon a Change of Control" and that all notes timely
        tendered will be accepted for payment;

             (2) the Change of Control Purchase Price and the purchase date,
        which shall be, subject to any contrary requirements of applicable law,
        a business day no earlier than 30 days nor later than 60 days from the
        date such notice is mailed;

             (3) the circumstances and relevant facts regarding the Change of
        Control (including information with respect to pro forma historical
        income, cash flow and capitalization after giving effect to the Change
        of Control); and

             (4) the procedures that holders of notes must follow in order to
        tender their notes (or portions thereof) for payment, and the procedures
        that holders of notes must follow in order to withdraw an election to
        tender notes (or portions thereof) for payment.
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     We will comply, to the extent applicable, with the requirements of Section
14(e) of the Exchange Act and any other securities laws or regulations in
connection with the repurchase of notes under a Change of Control Offer. To the
extent that the provisions of any securities laws or regulations conflict with
the provisions of the covenant described hereunder, we will comply with the
applicable securities laws and regulations and will be deemed not to have
breached our obligations under the covenant described hereunder by virtue of
such compliance.

     The Change of Control repurchase feature is a result of negotiations
between us and the initial purchasers. Management has no present intention to
engage in a transaction involving a Change of Control, although it is possible
that we would decide to do so in the future. In addition, our company and Mr.
Paxson currently are parties to agreements with NBC under which, subject to the
satisfaction of certain conditions, NBC may acquire control of us. As discussed
below, such acquisition would not constitute a Change of Control under the
notes, but would constitute a change of control under certain of our other
indebtedness and preferred stock. Subject to certain covenants described below,
we could, in the future, enter into certain transactions, including
acquisitions, refinancings or other recapitalizations, that would not constitute
a Change of Control under the Indenture, but that could increase the amount of
Debt outstanding at such time or otherwise affect our capital structure or
credit ratings.

     A change of control (as defined in the Senior Credit Facility) would
constitute an event of default under that facility and would permit the lenders
to require us to repay all outstanding amounts thereunder. The terms of the
Existing Indenture, the Exchange Indentures and the Existing Preferred Stock
each require us to make an offer to purchase the outstanding securities upon the
occurrence of a change of control (as such term is defined in the applicable
Indenture or Existing Preferred Stock). Other future debt of our company may
contain prohibitions of certain events which would constitute a change of
control or require such debt to be repurchased upon a change of control. The
definitions of change of control in the Exchange Indentures and Existing
Preferred Stock differ (and in future debt may differ) from the definition of
Change of Control as used in the notes in certain material respects.
Consequently, certain events, such as the acquisition by NBC of control of us,
could trigger an obligation of our company to offer to repurchase the Exchange
Debentures, the Existing Preferred Stock and any future debt we may have, but
not the notes.

     To the extent our other debt is both subject to repurchase obligations in
the event of a change of control and ranks senior in right of payment to the
notes, all available funds will first be expended for the repurchase of such
debt. Moreover, the exercise by holders of notes of their right to require us to
repurchase such notes could cause a default under our existing or future debt,
even if the Change of Control itself does not, because of the financial effect
of such repurchase on us. Finally, our ability to pay cash to holders of notes
in connection with a Change of Control Offer may be limited by our then existing
financial resources. We cannot assure you that sufficient funds will be
available when necessary to make any required repurchases. Our failure to
purchase notes tendered by holders accepting a Change of Control Offer would
result in a default under the Indenture. Such a default would, in turn,
constitute a default under our existing debt, and may constitute a default under
future debt as well. If such debt constitutes Designated Senior Debt, the
subordination provisions in the Indenture would likely restrict payment to
holders of notes. Our obligation to make a Change of Control Offer may be waived
or modified at any time before the occurrence of such Change of Control with the
written consent of the holders of a majority in principal amount of the notes.
See "-- Amendments and Waivers."

CERTAIN COVENANTS

     Limitation on Debt.  We shall not, and shall not permit any Restricted
Subsidiary to, incur, directly or indirectly, any Debt (including Acquired Debt)
other than Permitted Debt unless:

          (1) after giving effect to the incurrence of such Debt and the
     application of the proceeds thereof, the ratio of total Debt to our
     Consolidated EBITDA (determined on a pro forma basis for the last four full
     fiscal quarters for which financial statements are available at the date of
     determination) would be less than 7.0 to 1.0; provided that for purposes of
     calculating the ratio, Debt shall not include the Existing Preferred Stock,
     and, provided, further that if the Debt which is the subject of a
     determination under this provision is Acquired Debt or Debt to be incurred
     in connection with the simultaneous acquisition of any Person, business,
     property or assets, then such ratio shall be determined by giving effect
     (on a pro forma basis, as if the transaction had occurred at the beginning
     of the four quarter period) to both the

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     incurrence of the Acquired Debt or other Debt by us and the inclusion in
     our Consolidated EBITDA of the Consolidated EBITDA of the acquired Person,
     business, property or assets; and

          (2) no Default or Event of Default would occur as a consequence of
     such incurrence or be continuing following such incurrence.

     The term "Permitted Debt" is defined to include the following:

          (a) Debt of our company evidenced by the notes (excluding the
     Additional Notes, to the extent the debt evidenced thereby would not
     otherwise be Permitted Debt) and the Exchange Notes and of Subsidiary
     Guarantors evidenced by Subsidiary Guarantees;

          (b) Debt under the Credit Facilities, provided that the aggregate
     principal amount of all such Debt under the Credit Facilities at any one
     time outstanding shall not exceed $360.0 million;

          (c) Debt in respect of Capital Lease Obligations and Purchase Money
     Debt, provided that:

             (1) the aggregate principal amount of such Debt does not exceed the
        Fair Market Value (on the date of the incurrence thereof) of the
        Property acquired, constructed or leased, and

             (2) the aggregate principal amount of all Debt incurred and then
        outstanding under this clause (c) (together with all Refinancing Debt
        incurred and then outstanding in respect of Debt previously incurred
        under this clause (c)) does not exceed 5% of our consolidated total
        assets at the date of incurrence of Permitted Debt under this clause
        (c);

          (d) Debt of our company owing to and held by any Wholly Owned
     Restricted Subsidiary and Debt of a Restricted Subsidiary owing to and held
     by us or any Wholly Owned Restricted Subsidiary; provided, however, that
     any subsequent issue or transfer of Capital Stock or other event that
     results in any such Wholly Owned Restricted Subsidiary ceasing to be a
     Wholly Owned Restricted Subsidiary or any subsequent transfer of any such
     Debt (except to our company or a Wholly Owned Restricted Subsidiary) shall
     be deemed, in each case, to constitute the incurrence of such Debt by the
     issuer thereof;

          (e) Debt under Interest Rate Agreements entered into by us or a
     Restricted Subsidiary for the purpose of limiting interest rate risk in the
     ordinary course of the financial management of our company or such
     Restricted Subsidiary and not for speculative purposes, provided that the
     obligations under such agreements are directly related to payment
     obligations on Debt otherwise permitted by the terms of this covenant;

          (f) Debt under Currency Exchange Protection Agreements entered into by
     us or a Restricted Subsidiary for the purpose of limiting currency exchange
     rate risks directly related to transactions entered into by us or such
     Restricted Subsidiary in the ordinary course of business and not for
     speculative purposes;

          (g) Debt in connection with one or more standby letters of credit or
     performance bonds issued by us or a Restricted Subsidiary in the ordinary
     course of business or under self-insurance obligations and not in
     connection with the borrowing of money or the obtaining of advances or
     credit;

          (h) Attributable Debt with respect to Sale and Leaseback Transactions;
     provided, that the aggregate principal amount outstanding at any one time
     (together with all Refinancing Debt incurred and then outstanding in
     respect of Debt previously incurred under this clause (h)) does not exceed
     $40.0 million;

          (i) Debt outstanding on the Issue Date not otherwise described in
     clauses (a) through (h) above (including, without limitation, Debt
     represented by the 10 3/4% Notes);

          (j) Debt in an aggregate principal amount outstanding at any one time
     not to exceed $25.0 million;

          (k) Refinancing Debt incurred in respect of Debt incurred under clause
     (1) of the first paragraph of this covenant or clauses (a), (c), (h) or (i)
     above; provided, however, that Refinancing Debt can not be used to
     refinance the Existing Preferred Stock;

          (l) Debt of our company or any Restricted Subsidiary under any
     Receivables Facility not to exceed $35.0 million at any one time
     outstanding;

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          (m) Debt under the 12 1/2% Exchange Debentures due 2006 provided that
     the 12 1/2% Exchange Debentures due 2006 are substantially concurrently
     refinanced with Additional Notes; and

          (n) Additional Notes issued to refinance (i) the 12 1/2% exchangeable
     preferred stock including accrued and unpaid dividends thereon, or (ii) the
     12 1/2% Exchange Debentures due 2006; provided that such Additional Notes
     are issued substantially concurrently with such refinancing.

     Notwithstanding anything to the contrary contained in this covenant,

          (a) we shall not, and shall not permit any Subsidiary Guarantor to,
     incur any Debt under this covenant (other than Debt incurred under clause
     (1) of the first paragraph of this covenant) if the proceeds thereof are
     used, directly or indirectly, to Refinance

             (1) any Subordinated Obligations unless such Debt shall be
        subordinated to the notes or the applicable Subsidiary Guarantee, as the
        case may be, to at least the same extent as such Subordinated
        Obligations or

             (2) any Senior Subordinated Debt unless such Debt shall be Senior
        Subordinated Debt or shall be subordinated to the notes or the
        applicable Subsidiary Guarantee, as the case may be;

          (b) we shall not permit any Restricted Subsidiary that is not a
     Subsidiary Guarantor to incur any Debt under this covenant (other than Debt
     incurred under clause (1) of the first paragraph of this covenant) if the
     proceeds thereof are used, directly or indirectly, to Refinance any
     Subordinated Obligations or Senior Subordinated Debt of our company or any
     Subsidiary Guarantor;

          (c) accrual of interest, accretion or amortization of original issue
     discount and the payment of interest or dividends in the form of additional
     Debt, will be deemed not to be an incurrence of Debt for purposes of this
     covenant; and

          (d) for purposes of determining compliance with this covenant, if an
     item of Debt (including Acquired Debt) meets the criteria of more than one
     of the categories of Permitted Debt described in clauses (a) through (n)
     above or is entitled to be incurred under clause (1) of the first paragraph
     of this covenant, we will, in our sole discretion, classify (or later
     reclassify in whole or in part, in our sole discretion) such item of Debt
     in any manner that complies with this covenant.

     Limitation on Restricted Payments.  We shall not make, and shall not permit
any Restricted Subsidiary to make, directly or indirectly, any Restricted
Payment if at the time of, and after giving effect to, such proposed Restricted
Payment:

          (a) a Default or Event of Default shall have occurred and be
     continuing:

          (b) we could not incur at least $1.00 of additional Debt under clause
     (1) of the first paragraph of the covenant described under "-- Limitation
     on Debt;" or

          (c) the aggregate amount of such Restricted Payment and all other
     Restricted Payments declared or made since the Issue Date (the amount of
     any Restricted Payment, if made other than in cash, to be based upon Fair
     Market Value) would exceed the sum of

             (1) 100% of our Cumulative Consolidated EBITDA minus 1.4 times our
        Cumulative Consolidated Interest Expense, plus

             (2) 100% of the aggregate net proceeds (after deduction of fees,
        expenses, discounts and commissions incurred in connection with issuance
        and sale) and the Fair Market Value of securities or other Property
        received by us from the issue or sale, after the Issue Date, of our
        Capital Stock (other than our Disqualified Capital Stock or Capital
        Stock of our company issued to any Restricted Subsidiary of our company)
        or any of our Debt or other securities convertible into or exercisable
        or exchangeable for Capital Stock (other than Disqualified Capital
        Stock) which have been so converted or exercised or exchanged, as the
        case may be, plus

             (3) $10.0 million.

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     Notwithstanding the foregoing limitation, we may:

          (a) pay dividends on our Capital Stock within 60 days of the
     declaration thereof if, on said declaration date, such dividends could have
     been paid in compliance with the Indenture; provided, however, that such
     dividend shall be included in the calculation of the amount of Restricted
     Payments;

          (b) purchase, repurchase, redeem, legally defease, acquire or retire
     for value (x) our Capital Stock or Subordinated Obligations in exchange
     for, or out of the proceeds of the substantially concurrent sale of, our
     Capital Stock (other than Disqualified Capital Stock and other than Capital
     Stock issued or sold to a Subsidiary of our company), and (y) our
     Disqualified Capital Stock in exchange for, or out of the proceeds of the
     substantially concurrent sale of (other than to a Subsidiary of our
     company) our Disqualified Capital Stock that has a redemption date, and
     requires the payment of current dividends in cash, no earlier than the
     Disqualified Capital Stock being purchased, redeemed or otherwise acquired
     or retired; provided, however, that

             (1) such purchase, repurchase, redemption, legal defeasance,
        acquisition or retirement shall be excluded in the calculation of the
        amount of Restricted Payments and

             (2) the Capital Stock Sale Proceeds from such exchange or sale
        shall be excluded from the calculation under clause (c) (2) above;

          (c) purchase, repurchase, redeem, legally defease, acquire or retire
     for value (i) any Subordinated Obligations (other than Existing Preferred
     Stock) in exchange for, or out of the proceeds of the substantially
     concurrent sale of, Refinancing Debt or (ii) any 12 1/2% exchangeable
     preferred stock in exchange for 12 1/2% Exchange Debentures due 2006 which
     debentures are substantially concurrently refinanced with Debt permitted
     under clause (n) of "Limitation on Debt;" provided, however, that such
     purchase, repurchase, redemption, legal defeasance, acquisition or
     retirement shall be excluded in the calculation of the amount of Restricted
     Payments;

          (d) repurchase shares of, or options to purchase shares of, common
     stock of our company or any of its Subsidiaries from current or former
     officers, directors or employees of our company or any of its Subsidiaries
     (or permitted transferees of such current or former officers, directors or
     employees), under the terms of agreements (including employment agreements)
     or plans (or amendments thereto) approved by the Board of Directors under
     which such individuals purchase or sell, or are granted the option to
     purchase or sell, shares of such common stock; provided, however, that:

             (1) the aggregate amount of such repurchases shall not exceed $1.0
        million in any calendar year and

             (2) at the time of such repurchase, no other Default or Event of
        Default shall have occurred and be continuing (or result therefrom);

provided further, however, that such repurchases shall be included in the
calculation of the amount of Restricted Payments;

          (e) as long as no Default or Event of Default has occurred and is
     continuing, purchase, repurchase, redeem, legally defease, acquire or
     retire for value outstanding Preferred Stock in exchange for, or out of,
     consideration received by us or any Restricted Subsidiary from any Spectrum
     Sale as permitted under "-- Limitation on Asset Sales and Spectrum Sales;"
     provided, however, that such purchase, repurchase, redemption, legal
     defeasance, acquisition or retirement shall be excluded in the calculation
     of the amount of Restricted Payments;

          (f) as long as no Default or Event of Default has occurred and is
     continuing, pay cash dividends (not constituting a return on capital) on
     the Existing Preferred Stock under the terms related to the payment of
     dividends on the Existing Preferred Stock as in effect on the Issue Date
     and described under "Description of Material Indebtedness and Preferred
     Stock" in this prospectus; provided, however, that any cash dividends paid
     with respect to the Existing Preferred Stock shall reduce amounts otherwise
     available for Restricted Payments; and provided further, however, in no
     event shall any such cash dividend be paid at any time when we are
     permitted to pay a dividend on such stock otherwise than in cash, unless we
     would be required to pay such non-cash dividends at a rate higher than that
     applicable to cash dividends;

                                        93


          (g) pay dividends on Disqualified Capital Stock solely in additional
     shares of Disqualified Capital Stock;

          (h) make Restricted Payments in the aggregate of $15.0 million; and

          (i) make distributions or payments of Receivables Fees.

     Limitation on Liens.  We shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, incur or suffer to exist any Lien (other
than Permitted Liens or Liens securing Obligations in respect of Senior Debt)
upon any of our Property (including Capital Stock of a Restricted Subsidiary),
whether owned at the Issue Date or thereafter acquired, or any interest therein
or any income or profits therefrom, unless:

          (a) if such Lien secures Senior Subordinated Debt, the notes or the
     applicable Subsidiary Guarantee are secured on an equal and ratable basis
     with such Debt; and

          (b) if such Lien secures Subordinated Obligations, such Lien shall be
     subordinated to a Lien securing the notes or the applicable Subsidiary
     Guarantee in the same Property as that subject to such Lien to the same
     extent as such Subordinated Obligations are subordinated to the notes and
     the Subsidiary Guarantees.

     Limitation on Issuance or Sale of Capital Stock of Restricted
Subsidiaries.  We shall not:

          (a) sell, pledge, hypothecate or otherwise dispose of any shares of
     Capital Stock of a Restricted Subsidiary; or

          (b) permit any Restricted Subsidiary to, directly or indirectly, issue
     or sell or otherwise dispose of any shares of its Capital Stock; other
     than, in the case of either (a) or (b):

             (1) directors' qualifying shares;

             (2) to us or a Wholly Owned Restricted Subsidiary;

             (3) Preferred Stock issued by a Restricted Subsidiary other than to
        us or a Restricted Subsidiary if we or such Restricted Subsidiary would
        be permitted to incur Debt under clause (1) of the first paragraph of
        the covenant described under "-- Limitation on Debt" in the principal
        amount of the aggregate liquidation value of the Preferred Stock to be
        issued;

             (4) to secure our or a Restricted Subsidiary's obligations under
        any Senior Debt; or

             (5) a disposition of the Capital Stock of a Restricted Subsidiary;
        provided, however, that such disposition is effected in compliance with
        the covenant described under "-- Limitation on Asset Sales and Spectrum
        Sales."

     Limitation on Asset Sales and Spectrum Sales.

          (a) We shall not, and shall not permit any Restricted Subsidiary to,
     directly or indirectly, consummate any Asset Sale unless:

             (1) we or such Restricted Subsidiary receive consideration at the
        time of such Asset Sale at least equal to the Fair Market Value of the
        Property subject to such Asset Sale;

             (2) at least 75% of the consideration paid to us or such Restricted
        Subsidiary in connection with such Asset Sale is in the form of cash or
        cash equivalents (other than as set forth in clause (3) below) or the
        assumption by the purchaser of liabilities of our company or any
        Restricted Subsidiary (other than liabilities that are by their terms
        subordinated to the notes or the applicable Subsidiary Guarantee) as a
        result of which we and the Restricted Subsidiaries are no longer
        obligated with respect to such liabilities; and

             (3) notwithstanding clause (2) above, we may exchange all or
        substantially all of the assets of one or more media properties operated
        by us, including by way of the transfer of Capital Stock, for all or
        substantially all of the assets, including by way of Capital Stock,
        constituting one or more media properties operated by another Person,
        provided that not less than 75% of the consideration received by us in
        the exchange is in the form of cash or cash equivalents considering, for
        this purpose only, the media properties, valued at their Fair Market
        Value, as cash equivalents; and
                                        94


             (4) we deliver an Officers' Certificate to the Trustee certifying
        that such Asset Sale complies with the foregoing clauses (1), (2) and,
        if applicable, (3).

     The Net Available Cash (or any portion thereof) from Asset Sales other than
from Excluded Asset Sales may be applied by us or a Restricted Subsidiary, to
the extent our company or such Restricted Subsidiary elects (or is required by
the terms of any Debt):

             (1) to Repay Senior Debt of our company or any Subsidiary Guarantor
        or Debt of any Restricted Subsidiary that is not a Subsidiary Guarantor
        (excluding, in any such case, any Debt owed to us or an Affiliate of our
        company);

             (2) to reinvest in Additional Assets (including by means of an
        Investment in Additional Assets by a Restricted Subsidiary with Net
        Available Cash received by us or another Restricted Subsidiary); or

             (3) to make any required offer in connection with Asset Sales to
        holders of the Exchange Debentures in accordance with the terms of the
        Exchange Indentures.

     Any Net Available Cash from an Asset Sale other than an Excluded Asset Sale
not applied in accordance with the preceding paragraph within 180 days from the
date of the receipt of such Net Available Cash or allocated for investment in
identified Additional Assets in respect of a project that shall have been
commenced, and for which binding contractual commitments have been entered into,
before the end of such 180-day period and that shall not have been completed or
abandoned shall constitute "Excess Proceeds"; provided, however, that the amount
of any Net Available Cash that ceases to be so allocated as contemplated above
and any Net Available Cash that is allocated in respect of a project that is
abandoned or completed shall also constitute "Excess Proceeds" at the time any
such Net Available Cash ceases to be so allocated or at the time the relevant
project is so abandoned or completed, as applicable; provided further, however,
that the amount of any Net Available Cash that continues to be allocated for
investment and that is not actually reinvested within 24 months from the date of
the receipt of such Net Available Cash shall also constitute "Excess Proceeds."

     When the aggregate amount of Excess Proceeds exceeds $10.0 million, we will
be required to make an offer to purchase (the "Prepayment Offer") the notes,
which offer shall be in the amount of the Allocable Excess Proceeds, on a pro
rata basis according to Accreted Value or principal amount, as the case may be,
at a purchase price equal to (a) 100% of the Accreted Value plus Special
Interest, if any, on the purchase date, if such purchase date is before January
15, 2006 and (b) 100% of the principal amount thereof, plus accrued and unpaid
interest and Special Interest, if any, to the purchase date if the purchase date
is after January 15, 2006 (subject to the right of holders of record on the
relevant record date to receive interest due on the relevant interest payment
date), in accordance with the procedures (including prorating in the event of
oversubscription) set forth in the Indenture. To the extent that any portion of
the amount of Excess Proceeds remains after compliance with the preceding
sentence and provided that all holders of notes have been given the opportunity
to tender their notes for purchase in accordance with the Indenture, we or such
Restricted Subsidiary may use such remaining amount for any purpose permitted by
the Indenture, and the amount of Excess Proceeds will be reset to zero.

          (b) We or any Restricted Subsidiary may use any Net Available Cash
     from any Spectrum Sales (the "Spectrum Proceeds") in any manner permitted
     by the Indenture, and may use any Spectrum Proceeds in excess of an
     aggregate of $200 million (cumulative from the date of the Indenture)
     ("Excess Spectrum Proceeds"), whether or not otherwise permitted by the
     Indenture, to purchase, repurchase, redeem, legally defease, acquire or
     retire our outstanding preferred stock, provided we have first made an
     offer in the amount of the Allocable Spectrum Proceeds to purchase (the
     "Spectrum Prepayment Offer") the notes on a pro rata basis according to
     principal amount, at a price of 105% of Accreted Value, or the principal
     amount thereof, as the case may be, plus accrued and unpaid interest, if
     any, to the purchase date (subject to the right of holders of record on the
     relevant record date to receive interest due on the relevant interest
     payment date), in accordance with the procedures (including prorating in
     the event of oversubscription) set forth in the Indenture.

                                        95


     The terms "Allocable Excess Proceeds" and "Allocable Spectrum Proceeds," as
the case may be, shall mean the product of:

             (1) the Excess Proceeds or Excess Spectrum Proceeds, as the case
        may be; and

             (2) a fraction,

                (A) the numerator of which is the aggregate Accreted Value or
           principal amount, as the case may be, of the notes outstanding on the
           date of the Prepayment Offer or Spectrum Prepayment Offer, as the
           case may be, and

                (B) the denominator of which is the sum of the aggregate
           Accreted Value or principal amount, as the case may be of the notes
           outstanding on the date of the Prepayment Offer or Spectrum
           Prepayment Offer, as the case may be, and the aggregate principal
           amount of our other Debt outstanding on the date of the Prepayment
           Offer or Spectrum Prepayment Offer, as the case may be, that is pari
           passu in right of payment with the notes and subject to terms and
           conditions in respect of Asset Sales similar in all material respects
           to the covenant described hereunder and requiring us to make an offer
           to purchase such Debt at substantially the same time as the
           Prepayment Offer or Spectrum Prepayment Offer, as the case may be.
           Notwithstanding the foregoing, Debt under the Exchange Debentures
           shall not be included in the denominator for purposes of this clause
           (B).

     Promptly, and in any event within 30 days after we are obligated to make a
Prepayment Offer or Spectrum Prepayment Offer, as the case may be, as described
in the preceding paragraph, we shall send a written notice, by first-class mail,
to the holders of notes, accompanied by such information regarding us and our
Subsidiaries as we in good faith believe will enable such holders to make an
informed decision with respect to such Prepayment Offer or Spectrum Prepayment
Offer, as the case may be. Such notice shall state, among other things, the
purchase price and the purchase date, which shall be, subject to any contrary
requirements of applicable law, a business day no earlier than 30 days nor later
than 60 days from the date such notice is mailed.

     We will comply, to the extent applicable, with the requirements of Section
14(e) of the Exchange Act and any other securities laws or regulations in
connection with the repurchase of notes under the covenant described hereunder.
To the extent that the provisions of any securities laws or regulations conflict
with provisions of the covenant described hereunder, we will comply with the
applicable securities laws and regulations and will be deemed not to have
breached our obligations under the covenant described hereunder by virtue
thereof.

     Limitation on Restrictions on Distributions from Restricted
Subsidiaries.  We shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, create or otherwise cause or suffer to exist any
consensual restriction on the right of any Restricted Subsidiary to:

          (a) pay dividends, in cash or otherwise, or make any other
     distributions on or in respect of its Capital Stock, or pay any Debt or
     other obligation owed, to us or any other Restricted Subsidiary;

          (b) make any loans or advances to us or any other Restricted
     Subsidiary; or

          (c) transfer any of its Property to us or any other Restricted
     Subsidiary.

     The foregoing limitations will not apply:

             (1) with respect to clauses (a), (b) and (c), to restrictions

                (A) in effect on the Issue Date,

                (B) relating to Debt of a Restricted Subsidiary and existing at
           the time it became a Restricted Subsidiary if such restriction was
           not created in connection with or in anticipation of the transaction
           or series of transactions under which such Restricted Subsidiary
           became a Restricted Subsidiary or was acquired by us,

                (C) relating to the Senior Credit Facility,

                (D) created in connection with any Receivables Facility that, in
           the good faith determination of our Board of Directors, are necessary
           or advisable to effect such Receivables Facility, or
                                        96


                (E) that result from the Refinancing of Debt incurred under an
           agreement referred to in clause (1) (A), (B) or (C) above or in
           clause (2) (A) or (B) below, provided such restriction is no less
           favorable to the holders of notes than those under the agreement
           evidencing the Debt so Refinanced; and

             (2) with respect to clause (c) only, to restrictions

                (A) relating to Debt that is permitted to be incurred and
           secured without also securing the notes or the applicable Subsidiary
           Guarantee under the covenants described under "-- Limitation on Debt"
           and "-- Limitation on Liens" that limit the right of the debtor to
           dispose of the Property securing such Debt,

                (B) encumbering Property at the time such Property was acquired
           by us or any Restricted Subsidiary, so long as such restriction
           relates solely to the Property so acquired and was not created in
           connection with or in anticipation of such acquisition,

                (C) resulting from customary provisions restricting subletting
           or assignment of leases or customary provisions in other agreements
           that restrict assignment of such agreements or rights thereunder or

                (D) customarily contained in asset sale agreements limiting the
           transfer of such Property pending the closing of such sale.

     Limitation on Transactions with Affiliates.  We shall not, and shall not
permit any Restricted Subsidiary to, directly or indirectly, conduct any
business or enter into or suffer to exist any transaction or series of
transactions (including the purchase, sale, transfer, assignment, lease,
conveyance or exchange of any Property or the rendering of any service) with, or
for the benefit of, any Affiliate of our company (an "Affiliate Transaction"),
unless:

          (a) the terms of such Affiliate Transaction are

             (1) fair and reasonable to us or such Restricted Subsidiary, as the
        case may be, and

             (2) no less favorable to us or such Restricted Subsidiary, as the
        case may be, those that could be obtained in a comparable arm's-length
        transaction with a Person that is not an Affiliate of our company;

          (b) if such Affiliate Transaction involves aggregate payments or value
     in excess of $1.0 million, we obtain and promptly deliver to the Trustee a
     resolution of our Board of Directors (including a majority of the
     disinterested members of the Board of Directors) approving such Affiliate
     Transaction and certifying that, in its good faith judgment, such Affiliate
     Transaction complies with clauses (a) (1) and (2) of this paragraph; and

          (c) if such Affiliate Transaction involves aggregate payments or value
     in excess of $5.0 million, we obtain a written opinion from an Independent
     Financial Advisor that the transaction is fair to us and the Restricted
     Subsidiaries.

     Without regard to the foregoing limitations, we or any Restricted
Subsidiary may enter into or suffer to exist the following:

          (a) any transaction or series of transactions between us and one or
     more Restricted Subsidiaries or between two or more Restricted Subsidiaries
     in the ordinary course of business, provided that no more than 5% of the
     total voting power of the Voting Stock (on a fully diluted basis) of any
     such Restricted Subsidiary is owned by an Affiliate of our company (other
     than a Restricted Subsidiary);

          (b) any Restricted Payment permitted to be made under the covenant
     described under "-- Limitation on Restricted Payments" or any Permitted
     Investment;

          (c) any transaction, including compensation and employee benefit
     arrangements, with an officer or director of our company or any of the
     Restricted Subsidiaries in his or her capacity as an officer or director,
     so long as the Board of Directors in good faith shall have approved the
     terms thereof,

          (d) loans and advances to employees made in the ordinary course of
     business and consistent with the past practices of our company or such
     Restricted Subsidiary, as the case may be, provided that such
                                        97


     loans and advances do not exceed $1.0 million to any one employee and $5.0
     million in the aggregate at any one time outstanding;

          (e) agreements in effect on the Issue Date and any modifications,
     extensions or renewals thereto that are no less favorable to us or any
     Restricted Subsidiary than such agreement as in effect on the Issue Date;
     and

          (f) sales of accounts receivable, or participations therein, in
     connection with any Receivables Facility.

     Limitation on Layered Debt.  We shall not, and shall not permit any
Subsidiary Guarantor to, incur, directly or indirectly, any Debt that is
subordinate or junior in right of payment to any Senior Debt unless such Debt is
Senior Subordinated Debt or is expressly subordinated in right of payment to
Senior Subordinated Debt. In addition, no Subsidiary Guarantor shall Guarantee,
directly or indirectly, any of our Debt that is subordinate or junior in right
of payment to any Senior Debt unless such Guarantee is expressly subordinate in
right of payment to, or ranks pari passu with, the Subsidiary Guarantee of such
Subsidiary Guarantor.

     Designation of Restricted and Unrestricted Subsidiaries.  The Board of
Directors may designate any Subsidiary of our company to be an Unrestricted
Subsidiary if:

          (a) the Subsidiary to be so designated does not own any Capital Stock
     or Debt of, or own or hold any Lien on any Property of, us or any other
     Restricted Subsidiary; and

          (b) either:

             (1) the Subsidiary to be so designated has total assets of $1,000
        or less or

             (2) such designation is effective immediately upon such entity
        becoming our Subsidiary.

     Unless so designated as an Unrestricted Subsidiary, any Person that becomes
our Subsidiary will be classified as a Restricted Subsidiary; provided,
however,that such Subsidiary shall not be designated a Restricted Subsidiary and
shall be automatically classified as an Unrestricted Subsidiary if either of the
requirements set forth in clauses (x) and (y) of the second immediately
following paragraph will not be satisfied after giving pro forma effect to such
classification or if such Person is a Subsidiary of an Unrestricted Subsidiary.

     Except as provided in the first sentence of the preceding paragraph, no
Restricted Subsidiary may be redesignated as an Unrestricted Subsidiary. In
addition, neither our company nor any Restricted Subsidiary shall at any time be
directly or indirectly liable for any Debt that provides that the holder thereof
may (with the passage of time or notice or both) declare a default thereon or
cause the payment thereof to be accelerated or payable before its Stated
Maturity upon the occurrence of a default with respect to any Debt, Lien or
other obligation of any Unrestricted Subsidiary (including any right to take
enforcement action against such Unrestricted Subsidiary). Upon designation of a
Restricted Subsidiary as an Unrestricted Subsidiary in compliance with this
covenant, such Restricted Subsidiary shall, by execution and delivery of a
supplemental indenture in form satisfactory to the Trustee, be released from any
Subsidiary Guarantee previously made by such Restricted Subsidiary.

     The Board of Directors may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary if, immediately after giving pro forma effect to such
designation,

          (x) we could incur at least $1.00 of additional Debt under clause (1)
     of the first paragraph of the covenant described under "-- Limitation on
     Debt" and

          (y) no Default or Event of Default shall have occurred and be
     continuing or would result therefrom.

     Any such designation or redesignation by the Board of Directors will be
evidenced to the Trustee by filing with the Trustee a Board Resolution giving
effect to such designation or redesignation and an Officers' Certificate that

          (a) certifies that such designation or redesignation complies with the
     foregoing provisions and

          (b) gives the effective date of such designation or redesignation,

                                        98


such filing with the Trustee to occur within 45 days after the end of the fiscal
quarter of our company in which such designation or redesignation is made (or,
in the case of a designation or redesignation made during the last fiscal
quarter of our fiscal year, within 90 days after the end of such fiscal year).

     Future Subsidiary Guarantors.  We shall cause each Person that becomes a
Domestic Restricted Subsidiary following the Issue Date and any other entity
that guarantees any Exchange Debentures to execute and deliver to the Trustee a
Subsidiary Guarantee at the time such Person becomes a Domestic Restricted
Subsidiary or guarantees any Exchange Debentures.

MERGER, CONSOLIDATION AND SALE OF PROPERTY

     We shall not merge, consolidate or amalgamate with or into any other Person
(other than a merger of a Wholly Owned Restricted Subsidiary into us) or sell,
transfer, assign, lease, convey or otherwise dispose of all or substantially all
our Property in any one transaction or series of transactions unless:

          (a) we shall be the surviving Person in such merger, consolidation or
     amalgamation, or the surviving person (if other than us) formed by such
     merger, consolidation or amalgamation or to which such sale, transfer,
     assignment, lease, conveyance or disposition is made (the "Surviving
     Person") shall be a corporation organized and existing under the laws of
     the United States of America, any State thereof or the District of
     Columbia;

          (b) the Surviving Person expressly assumes, by supplemental indenture
     in form satisfactory to the Trustee, executed and delivered to the Trustee
     by such Surviving Person, the due and punctual payment of the principal of,
     and premium, if any, and interest on, all the notes, according to their
     tenor, and the due and punctual performance and observance of all the
     covenants and conditions of the Indenture to be performed by us;

          (c) in the case of a sale, transfer, assignment, lease, conveyance or
     other disposition of all or substantially all our Property, such Property
     shall have been transferred as an entirety or virtually as an entirety to
     one Person;

          (d) immediately before and after giving effect to such transaction or
     series of transactions on a pro forma basis (and treating, for purposes of
     this clause (d) and clauses (e) and (f) below, any Debt that becomes, or is
     anticipated to become, an obligation of the Surviving Person or any
     Restricted Subsidiary as a result of such transaction or series of
     transactions as having been incurred by the Surviving Person or such
     Restricted Subsidiary at the time of such transaction or series of
     transactions), no Default or Event of Default shall have occurred and be
     continuing;

          (e) immediately after giving effect to such transaction or series of
     transactions on a pro forma basis, we or the Surviving Person, as the case
     may be, would be able to incur at least $1.00 of additional Debt under
     clause (1) of the first paragraph of the covenant described under
     "-- Certain Covenants -- Limitation on Debt"; and

          (f) we shall deliver, or cause to be delivered, to the Trustee, in
     form and substance reasonably satisfactory to the Trustee, an Officers'
     Certificate and an Opinion of Counsel, each stating that such transaction
     and the supplemental indenture, if any, in respect thereto comply with this
     covenant and that all conditions precedent provided for in the Indenture
     relating to such transaction have been satisfied.

     We shall not permit any Subsidiary Guarantor to merge, consolidate or
amalgamate with or into any other Person (other than a merger of a Wholly Owned
Restricted Subsidiary into us or any such Subsidiary Guarantor) or sell,
transfer, assign, lease, convey or otherwise dispose of all or substantially all
its Property in any one transaction or series of transactions unless:

          (a) the Surviving Person (if not such Subsidiary Guarantor) formed by
     such merger, consolidation or amalgamation or to which such sale, transfer,
     assignment, lease, conveyance or disposition is made shall be a corporation
     organized and existing under the laws of the United States of America, any
     State thereof or the District of Columbia;

          (b) the Surviving Person (if other than such Subsidiary Guarantor)
     expressly assumes, by Subsidiary Guarantee in form satisfactory to the
     Trustee, executed and delivered to the Trustee by such

                                        99


     Surviving Person, the due and punctual performance and observance of all
     the obligations of such Subsidiary Guarantor under its Subsidiary
     Guarantee;

          (c) in the case of a sale, transfer, assignment, lease, conveyance or
     other disposition of all or substantially all the Property of such
     Subsidiary Guarantor, such Property shall have been transferred as an
     entirety or virtually as an entirety to one Person;

          (d) immediately before and after giving effect to such transaction or
     series of transactions on a pro forma basis (and treating, for purposes of
     this clause (d) and clauses (e) and (f) below, any Debt that becomes, or is
     anticipated to become, an obligation of the Surviving Person, our company
     or any Restricted Subsidiary as a result of such transaction or series of
     transactions as having been incurred by the Surviving Person, our company
     or such Restricted Subsidiary at the time of such transaction or series of
     transactions), no Default or Event of Default shall have occurred and be
     continuing;

          (e) immediately after giving effect to such transaction or series of
     transactions on a pro forma basis, we would be able to incur at least $1.00
     of additional Debt under clause (1) of the first paragraph of the covenant
     described under "-- Certain Covenants -- Limitation on Debt"; and

          (f) we shall deliver, or cause to be delivered, to the Trustee, in
     form and substance reasonably satisfactory to the Trustee, an Officers'
     Certificate and an Opinion of Counsel, each stating that such transaction
     and such Subsidiary Guarantee, if any, in respect thereto comply with this
     covenant and that all conditions precedent provided for in the Indenture
     relating to such transaction have been satisfied.

     The foregoing provisions shall not apply to any transactions which
constitute an Asset Sale if we have complied with the covenant described under
"-- Certain Covenants -- Limitation on Asset Sales and Spectrum Sales."

     The Surviving Person shall succeed to, and be substituted for, and may
exercise every right and power of our company under the Indenture (or of the
Subsidiary Guarantor under the Subsidiary Guarantee, as the case may be), but
the predecessor company in the case of

          (a) a sale, transfer, assignment, conveyance or other disposition
     (unless such sale, transfer, assignment, conveyance or other disposition is
     of all our assets as an entirety or virtually as an entirety) or

          (b) a lease,

shall not be released from any of the obligations or covenants under the
Indenture, including with respect to the payment of the notes.

SEC REPORTS

     Notwithstanding that we may not be subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, for so long as the notes are
outstanding, we shall file with the Commission and provide the Trustee and
holders of notes with such annual reports and such information, documents and
other reports as are specified in Sections 13 and 15(d) of the Exchange Act and
applicable to a U.S. corporation subject to such Sections, such information,
documents and reports to be so filed and provided at the times specified for the
filing of such information, documents and reports under such Sections; provided,
however, that we shall not be so obligated to file such information, documents
and reports with the Commission if the Commission does not permit such filings.

EVENTS OF DEFAULT

     Events of Default in respect of the notes include:

          (1) failure to pay any interest on, or Special Interest with respect
     to, any note when the same becomes due and payable, and such failure
     continues for a period of 30 days;

          (2) failure to pay any principal of, or premium, if any, on, any of
     the notes when the same becomes due and payable at its Stated Maturity,
     upon acceleration, redemption, optional redemption, required repurchase or
     otherwise;

          (3) failure to comply with the covenant described under "-- Merger,
     Consolidation and Sale of Property;"
                                       100


          (4) failure to comply with any other covenant or agreement in the
     notes or in the Indenture (other than a failure that is the subject of the
     foregoing clause (1), (2) or (3)) and such failure continues for 60 days
     after written notice is given to us as provided below;

          (5) a default under any Debt (other than the Existing Preferred Stock
     and any Disqualified Capital Stock issued to refinance Existing Preferred
     Stock, the terms of which provide for substantially the same remedies to
     the holders thereof upon a failure to pay any amount due at maturity as the
     terms of the Existing Preferred Stock so refinanced) by us or any
     Restricted Subsidiary that results in acceleration of the maturity of such
     Debt, or failure to pay any such Debt at maturity, in an aggregate amount
     of Debt greater than $10.0 million or its foreign currency equivalent at
     the time (the "cross acceleration provisions");

          (6) any judgment or judgments for the payment of money in an aggregate
     amount in excess of $10.0 million (or its foreign currency equivalent at
     the time) shall be rendered against us or any Restricted Subsidiary and
     shall not be waived, satisfied or discharged for any period of 60
     consecutive days during which a stay of enforcement shall not be in effect
     (the "judgment default provisions");

          (7) certain events involving bankruptcy, insolvency or reorganization
     of our company or any Significant Subsidiary (the "bankruptcy provisions");
     and

          (8) Subsidiary Guarantees provided by Subsidiary Guarantors that
     individually or together would constitute a Significant Subsidiary cease to
     be in full force and effect (other than in accordance with the terms of
     such Subsidiary Guarantees) or any Subsidiary Guarantor denies or
     disaffirms its obligations under its Subsidiary Guaranty (the "guarantee
     provisions").

     A Default under clause (4) is not an Event of Default until the Trustee or
the holders of not less than 25% in aggregate principal amount or Accreted
Value, as the case may be, of the notes then outstanding notify us of the
Default and we do not cure such Default within the time specified after receipt
of such notice. Such notice must specify the Default, demand that it be remedied
and state that such notice is a "Notice of Default."

     We shall deliver to the Trustee, within 30 days after the occurrence
thereof, written notice in the form of an Officers' Certificate of any event
that with the giving of notice and the lapse of time would become an Event of
Default, its status and what action we are taking or propose to take with
respect thereto.

     If an Event of Default with respect to the notes (other than an Event of
Default resulting from certain events involving bankruptcy, insolvency or
reorganization with respect to us) shall have occurred and be continuing, the
Trustee or the registered holders of not less than 25% in aggregate principal
amount or Accreted Value, as the case may be, of the notes then outstanding may
declare to be immediately due and payable (a) the Accreted Value if such Event
of Default is on or before January 15, 2006 or (b) the principal amount of all
the notes then outstanding, plus accrued but unpaid interest to the date of
acceleration if such Event of Default is after January 15, 2006 and (i) such
amounts shall become immediately due and payable or (ii) if there are any
amounts outstanding under any of the instruments constituting Senior Debt, such
amounts shall become due and payable upon the first to occur of an acceleration
under any of the instruments constituting Senior Debt or five business days
after receipt by us and the Representative under any Senior Debt of notice of
the acceleration of the notes unless all Events of Default specified in such
notice have been cured or waived. If an Event of Default resulting from certain
events of bankruptcy, insolvency or reorganization with respect to us shall
occur, such amount with respect to all the notes shall be due and payable
immediately without any declaration or other act on the part of the Trustee or
the holders of the notes. After any such acceleration, but before a judgment or
decree based on acceleration is obtained by the Trustee, the registered holders
of a majority in aggregate principal amount or Accreted Value, as the case may
be, of the notes then outstanding may, under certain circumstances, rescind and
annul such acceleration if all Events of Default, other than the nonpayment of
accelerated principal, premium or interest, have been cured or waived as
provided in the Indenture.

     Subject to the provisions of the Indenture relating to the duties of the
Trustee, if an Event of Default shall occur and be continuing, the Trustee will
be under no obligation to exercise any of its rights or powers under the
Indenture at the request or direction of any of the holders of the notes, unless
such holders shall have offered to the Trustee reasonable indemnity. Subject to
such provisions for the indemnification of the Trustee, the holders of a
majority in aggregate principal amount or Accreted Value, as the case may be, of
the notes
                                       101


then outstanding will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee with respect to the notes.

     No holder of notes will have any right to institute any proceeding with
respect to the Indenture, or for the appointment of a receiver or trustee, or
for any remedy thereunder, unless:

          (a) such holder has previously given to the Trustee written notice of
     a continuing Event of Default;

          (b) the registered holders of at least 25% in aggregate principal
     amount or Accreted Value, as the case may be, of the notes then outstanding
     have made written request and offered reasonable indemnity to the Trustee
     to institute such proceeding as trustee; and

          (c) the Trustee shall not have received from the registered holders of
     a majority in aggregate principal amount or Accreted Value, as the case may
     be, of the notes then outstanding a direction inconsistent with such
     request and shall have failed to institute such proceeding within 60 days.

However, such limitations do not apply to a suit instituted by a holder of any
note for enforcement of payment of the principal of, and premium, if any, or
interest on, such note on or after the respective due dates expressed in such
note.

AMENDMENTS AND WAIVERS

     Subject to certain exceptions, our company, the Trustee and the Subsidiary
Guarantors, with the consent of the registered holders of a majority in
aggregate principal amount of the notes then outstanding (including consents
obtained in connection with a tender offer or exchange offer for the notes) may
amend the Indenture and may waive any past default or compliance with any
provisions (except a default in the payment of principal, premium, interest or
Special Interest and certain covenants and provisions of the Indenture which
cannot be amended without the consent of each holder of an outstanding Note).
Without the consent of each holder of an outstanding Note, however, no amendment
may, among other things,

          (1) reduce the amount of notes whose holders must consent to an
     amendment or waiver,

          (2) reduce the rate of or extend the time for payment of interest or
     Special Interest on any note or amend the rate of accretion on the notes or
     amend the definition of Accreted Value,

          (3) reduce the principal or Accreted Value, or extend the Stated
     Maturity, of any note,

          (4) make any note payable in money other than that stated in the note,

          (5) impair the right of any holder of the notes to receive payment of
     principal of and interest on such holder's notes on or after the due dates
     therefor or to institute suit for the enforcement of any payment on or with
     respect to such holder's notes or any Subsidiary Guarantee,

          (6) release any Guarantee or security interest that may have been
     granted in favor of the holders of the notes other than under the terms of
     the Indenture or such security interest,

          (7) reduce the premium payable upon the redemption of any note or
     change the time at which any note may be redeemed, as described under
     "-- Optional Redemption,"

          (8) reduce the premium payable in connection with a Change of Control
     Offer or, at any time after a Change of Control has occurred, change the
     time at which the Change of Control Offer relating thereto must be made or
     at which the notes must be repurchased under such Change of Control Offer,

          (9) at any time after we are obligated to make a Prepayment Offer with
     the Excess Proceeds from Asset Sales, change the time at which such
     Prepayment Offer must be made or at which the notes must be repurchased
     pursuant thereto,

          (10) make any change to the subordination provisions of the Indenture
     that would adversely affect the holders of the notes, or

          (11) make any change in any Subsidiary Guarantee that would adversely
     affect the holders of the notes.

                                       102


     Without the consent of any holder of the notes, our company, the Trustee
and the Subsidiary Guarantors may amend the Indenture to

          (1) cure any ambiguity, omission, defect or inconsistency,

          (2) provide for the assumption by a successor corporation of our
     obligations under the Indenture,

          (3) provide for uncertificated notes in addition to or in place of
     certificated notes (provided that the uncertificated notes are issued in
     registered form for purposes of Section 163(f) of the Code, or in a manner
     such that the uncertificated notes are described in Section 163(f)(2)(B) of
     the Code),

          (4) add additional Guarantees with respect to the notes or release
     Subsidiary Guarantors from Subsidiary Guarantees as provided by the terms
     of the Indenture,

          (5) secure the notes, add to our covenants for the benefit of the
     holders of the notes or surrender any right or power conferred upon us,

          (6) make any change that does not adversely affect the rights of any
     holder of the notes,

          (7) make any change to the subordination provisions of the Indenture
     that would limit or terminate the benefits available to any holder of
     Senior Debt under such provisions, or

          (8) comply with any requirement of the Commission in connection with
     the qualification of the Indenture under the Trust Indenture Act.

     No amendment may be made to the subordination provisions of the Indenture
that adversely affects the rights of any holder of Designated Senior Debt then
outstanding unless the holders of such Designated Senior Debt (or their
Representative) consent to such change. The consent of the holders of the notes
is not necessary to approve the particular form of any proposed amendment. It is
sufficient if such consent approves the substance of the proposed amendment.
After an amendment becomes effective, we are required to mail to each registered
holder of the notes at such holder's address appearing in the Security Register
a notice briefly describing such amendment. However, the failure to give such
notice to all holders of the notes, or any defect therein, will not impair or
affect the validity of the amendment.

DEFEASANCE

     We at any time may terminate all of our obligations under the notes and the
Indenture ("legal defeasance"), except for certain obligations, including those
respecting the defeasance trust and obligations to register the transfer or
exchange of the notes, to replace mutilated, destroyed, lost or stolen notes and
to maintain a registrar and paying agent in respect of the notes. We at any time
may terminate:

          (1) our obligations under the covenants described under "-- Repurchase
     at the Option of Holders Upon a Change of Control" and "-- Certain
     Covenants";

          (2) the operation of the cross acceleration provisions, the judgment
     default provisions, and the bankruptcy provisions and the guarantee
     provisions described under "-- Events of Default" above; and

          (3) the limitations contained in clause (e) under each of the first
     and second paragraphs of "-- Merger, Consolidation and Sale of Property"
     above ("covenant defeasance").

     We may exercise our legal defeasance option notwithstanding our prior
exercise of our covenant defeasance option.

     If we exercise our legal defeasance option, payment of the notes may not be
accelerated because of an Event of Default with respect thereto. If we exercise
our covenant defeasance option, payment of the notes may not be accelerated
because of an Event of Default specified in clause (4) (with respect to the
covenants described under "-- Certain Covenants"), (5), (6) or (7) (with respect
only to Significant Subsidiaries) or (8) under "-- Events of Default" above or
because of our failure to comply with clause (e) under either the first or
second paragraphs of "-- Merger, Consolidation and Sale of Property" above. If
we exercise our legal defeasance option or our covenant defeasance option, each
Subsidiary Guarantor will be released from all its obligations under its
Subsidiary Guarantee.

                                       103


     The legal defeasance option or the covenant defeasance option may be
exercised only if:

          (a) we irrevocably deposit in trust with the Trustee money or U.S.
     Government Obligations for the payment of principal of and interest or
     Special Interest, if any, on the notes to maturity or redemption, as the
     case may be;

          (b) we deliver to the Trustee a certificate from a nationally
     recognized firm of independent certified public accountants expressing
     their opinion that the payments of principal and interest when due and
     without reinvestment on the deposited U.S. Government Obligations plus any
     deposited money without investment will provide cash at such times and in
     such amounts as will be sufficient to pay principal and interest when due
     on all the notes to maturity or redemption, as the case may be;

          (c) 123 days pass after the deposit is made and during the 123-day
     period no Default described in clause (7) under "-- Events of Default"
     occurs with respect to us or any other Person making such deposit which is
     continuing at the end of the period;

          (d) no Default or Event of Default has occurred and is continuing on
     the date of such deposit and after giving effect thereto;

          (e) such deposit does not constitute a default under any other
     agreement or instrument binding on us;

          (f) we deliver to the Trustee an Opinion of Counsel to the effect that
     the trust resulting from the deposit does not constitute, or is qualified
     as, a regulated investment company under the Investment Company Act of
     1940;

          (g) in the case of the legal defeasance option, we deliver to the
     Trustee an Opinion of Counsel stating that

             (1) we have received from, or there has been published by, the
        Internal Revenue Service a ruling or

             (2) since the date of the Indenture there has been a change in the
        applicable federal income tax law,

     to the effect, in either case, that, and based thereon such Opinion of
     Counsel shall confirm that, the holders of the notes will not recognize
     income, gain or loss for federal income tax purposes as a result of such
     defeasance and will be subject to federal income tax on the same amounts,
     in the same manner and at the same time as would have been the case if such
     defeasance had not occurred;

          (h) in the case of the covenant defeasance option, we deliver to the
     Trustee an Opinion of Counsel to the effect that the holders of the notes
     will not recognize income, gain or loss for federal income tax purposes as
     a result of such covenant defeasance and will be subject to federal income
     tax on the same amounts, in the same manner and at the same times as would
     have been the case if such covenant defeasance had not occurred; and

          (i) we deliver to the Trustee an Officers' Certificate and an Opinion
     of Counsel, each stating that all conditions precedent to the defeasance
     and discharge of the notes have been complied with as required by the
     Indenture.

GOVERNING LAW

     The Indenture and the notes are governed by the internal laws of the State
of New York without reference to principles of conflicts of law.

THE TRUSTEE

     The Bank of New York is the Trustee under the Indenture. Except during the
continuance of an Event of Default, the Trustee will perform only such duties as
are specifically set forth in the Indenture. During the existence of an Event of
Default, the Trustee will exercise such of the rights and powers vested in it
under the Indenture and use the same degree of care and skill in its exercise as
a prudent person would exercise under the circumstances in the conduct of such
person's own affairs.

                                       104


     The Bank of New York also serves as the trustee under the Existing
Indenture and the Exchange Indentures.

CERTAIN DEFINITIONS

     Set forth below is a summary of some of the defined terms used in the
Indenture. You should refer to the Indenture for the full definition of all such
terms as well as any other capitalized terms used herein for which no definition
is provided. Unless the context otherwise requires, an accounting term not
otherwise defined has the meaning assigned to it in accordance with GAAP.

     "Accreted Value" means, as of any date of determination, the sum (rounded
to the nearest whole dollar) of (a) the initial offering price of each $1,000 in
principal amount at maturity of notes and (b) the portion of the excess of the
principal amount of notes over such initial offering price which shall have been
accreted thereon through such date, such amount to be so accreted on a daily
basis at the rate of 12 1/4% per annum compounded semi-annually on each January
15 and July 15 from the Issue Date through that date of determination. On and
after January 15, 2006, the Accreted Value of each Note shall be equal to its
principal amount at maturity.

     "Acquired Debt" means Debt of a Person (including an Unrestricted
Subsidiary) outstanding on the date on which such Person becomes a Restricted
Subsidiary or assumed in connection with the acquisition of assets from such
Person.

     "Additional Assets" means:

          (a) any Property (other than cash, cash equivalents and securities) to
     be owned by us or any Restricted Subsidiary and used in a Company Business;
     or

          (b) Capital Stock of a Person that becomes a Restricted Subsidiary as
     a result of the acquisition of such Capital Stock by us or another
     Restricted Subsidiary from any Person other than us or another Restricted
     Subsidiary; provided, however, that, in the case of clause (b), such
     Restricted Subsidiary is primarily engaged in a Company Business.

     "Affiliate" of any specified Person means:

          (a) any other Person directly or indirectly controlling or controlled
     by or under direct or indirect common control with such specified Person;
     or

          (b) any other Person who is a director or officer of

             (1) such specified Person,

             (2) any Subsidiary of such specified Person or

             (3) any Person described in clause (a) above.

     For the purposes of this definition, "control" when used with respect to
     any Person means the power to direct the management and policies of such
     Person, directly or indirectly, whether through the ownership of voting
     securities, by contract or otherwise; and the terms "controlling" and
     "controlled" have meanings correlative to the foregoing. For purposes of
     the covenant described under "-- Certain Covenants -- Limitation on
     Transactions with Affiliates" only, "Affiliate" shall also mean any
     beneficial owner of shares representing 10% or more of the total voting
     power of our Voting Stock (on a fully diluted basis) or of rights or
     warrants to purchase such Voting Stock (whether or not currently
     exercisable) and any Person who would be an Affiliate of any such
     beneficial owner under the first sentence hereof.

     "Asset Sale" means any sale, lease, transfer, issuance or other disposition
(or series of related sales, leases, transfers, issuances or dispositions) by us
or any Restricted Subsidiary, including any disposition by means of a merger,
consolidation or similar transaction (each referred to for the purposes of this
definition as a "disposition"), of

          (a) any shares of Capital Stock of a Restricted Subsidiary (other than
     directors' qualifying shares) or

          (b) any other assets of our company or any Restricted Subsidiary
     outside of the ordinary course of business of our company or such
     Restricted Subsidiary,
                                       105


other than, in the case of clause (a) or (b) above,

             (1) any disposition by a Restricted Subsidiary to us or by us or a
        Restricted Subsidiary to a Wholly Owned Restricted Subsidiary,

             (2) any disposition that constitutes a Permitted Investment or
        Restricted Payment permitted by the covenant described under "-- Certain
        Covenants -- Limitation on Restricted Payments,"

             (3) any disposition effected in compliance with the covenant
        described under "-- Merger, Consolidation and Sale of Property," and

             (4) any disposition in a single transaction or a series of related
        transactions of assets for aggregate consideration of less than $1.0
        million.

Notwithstanding the foregoing, a Spectrum Sale shall not constitute an Asset
Sale.

     "Attributable Debt" in respect of a Sale and Leaseback Transaction means,
at any date of determination,

          (a) if such Sale and Leaseback Transaction is a Capital Lease
     Obligation, the amount of Debt represented thereby according to the
     definition of "Capital Lease Obligation" and

          (b) in all other instances, the present value (discounted at the
     interest rate borne by the notes, compounded annually) of the total
     obligations of the lessee for rental payments during the remaining term of
     the lease included in such Sale and Leaseback Transaction (including any
     period for which such lease has been extended).

     "Average Life" means, as of any date of determination, with respect to any
Debt or Preferred Stock, the quotient obtained by dividing

          (a) the sum of the product of the numbers of years (rounded to the
     nearest one-twelfth of one year) from the date of determination to the
     dates of each successive scheduled principal payment of such Debt or
     redemption or similar payment with respect to such Preferred Stock
     multiplied by the amount of such payment by

          (b) the sum of all such payments.

     "Capital Lease Obligations" means any obligation under a lease that is
required to be capitalized for financial reporting purposes in accordance with
GAAP; and the amount of Debt represented by such obligation shall be the
capitalized amount of such obligations determined in accordance with GAAP; and
the Stated Maturity thereof shall be the date of the last payment of rent or any
other amount due under such lease before the first date upon which such lease
may be terminated by the lessee without payment of a penalty. For purposes of
"-- Certain Covenants -- Limitation on Liens," a Capital Lease Obligation shall
be deemed secured by a Lien on the Property being leased.

     "Capital Stock" means, with respect to any Person, any shares or other
equivalents (however designated) of any class of corporate stock or partnership
interests or any other participations, rights, warrants, options or other
interests in the nature of an equity interest in such Person, including
Preferred Stock, but excluding any debt security convertible or exchangeable
into such equity interest.

     "Capital Stock Sale Proceeds" means the aggregate cash proceeds received by
us from the issuance or sale (other than to a Subsidiary of our company) by us
of our Capital Stock (other than Disqualified Capital Stock) after the Issue
Date, net of attorneys' fees, accountants' fees, underwriters' or placement
agents' fees, discounts or commissions and brokerage, consultant and other fees
actually incurred in connection with such issuance or sale and net of taxes paid
or payable as a result thereof.

     "Change of Control" means the occurrence of any of the following events:

          (a) any "person" or "group" (as such terms are used in Sections 13(d)
     and 14(d) of the Exchange Act or any successor provisions to either of the
     foregoing), including any group acting for the purpose of acquiring,
     holding, voting or disposing of securities within the meaning of Rule 13d-5
     (b) (1) under the Exchange Act, other than any one or more of the Permitted
     Holders, becomes the "beneficial owner" (as defined in Rule 13d-3 under the
     Exchange Act, except that a person will be deemed to have "beneficial
     ownership" of all shares that any such person has the right to acquire,
     whether such right is exercisable immediately or only after the passage of
     time), directly or indirectly, of 33 1/3% or more of the total voting
                                       106


     power of our Voting Stock; provided, however, that the Permitted Holders
     are the "beneficial owners" (as defined in Rule 13d-3 under the Exchange
     Act, except that a person will be deemed to have "beneficial ownership" of
     all shares that any such person has the right to acquire, whether such
     right is exercisable immediately or only after the passage of time),
     directly or indirectly, in the aggregate of a lesser percentage of the
     total voting power of our Voting Stock than such other person or group (for
     purposes of this clause (a), such person or group shall be deemed to
     beneficially own any Voting Stock of a corporation held by any other
     corporation (the "parent corporation") so long as such person or group
     beneficially owns, directly or indirectly, in the aggregate a majority of
     the total voting power of the Voting Stock of such parent corporation); or

          (b) we merge, consolidate or amalgamate with or into any other Person
     or any other Person merges, consolidates or amalgamates with or into us, in
     any such event under a transaction in which our outstanding Voting Stock is
     reclassified into or exchanged for cash, securities or other Property,
     other than any such transaction where

             (1) our outstanding Voting Stock is reclassified into or exchanged
        for other Voting Stock of our company or for Voting Stock of the
        surviving corporation and

             (2) the holders of our Voting Stock immediately before such
        transaction own, directly or indirectly, not less than a majority of the
        Voting Stock of our company or the surviving corporation immediately
        after such transaction and in substantially the same proportion as
        before the transaction; or

          (c) during any period of two consecutive years, individuals who at the
     beginning of such period constituted the Board of Directors (together with
     any new directors whose election or appointment by such Board or whose
     nomination for election by our stockholders was approved by a vote of not
     less than a majority of the directors then still in office who were either
     directors at the beginning of such period or whose election or nomination
     for election was previously so approved) cease for any reason to constitute
     a majority of the Board of Directors then in office; or

          (d) our stockholders shall have approved any plan of liquidation or
     dissolution of our company.

     "Code" means the Internal Revenue Code of 1986, as amended.

     "Company Business" means any business in which our company or any
Restricted Subsidiary was engaged on the Issue Date, or any business related or
ancillary to any business or industry in which our company or any Restricted
Subsidiary was engaged on the Issue Date.

     "Consolidated EBITDA" means, for any Person, for any period, an amount
equal to:

          (a) the sum of Consolidated Net Income for such period, plus, to the
     extent deducted in determining Consolidated Net Income,

             (i) the provision for taxes for such period based on income or
        profits and any provision for taxes utilized in computing a loss in
        Consolidated Net Income above, plus

             (ii) Consolidated Interest Expense, net of interest income earned
        on cash or cash equivalents for such period, plus

             (iii) depreciation for such period on a consolidated basis, plus

             (iv) amortization of intangibles (excluding the amortization of
        Film Contracts), plus

             (v) any other non-cash items (other than any such non-cash item to
        the extent that it represents an accrual of or reserve for cash
        expenditures in any future period); minus

          (b) all non-cash items increasing Consolidated Net Income for such
     period (other than any such non-cash item to the extent that it will result
     in the receipt of cash payments in any future period);

provided, however, that, for purposes of calculating Consolidated EBITDA during
any fiscal quarter, cash income from a particular Investment of such Person
shall be included only if cash income has been received by such Person as a
result of the operation of the business in which such Investment has been made
in the ordinary course without giving effect to any extraordinary unusual and
non-recurring gains.

                                       107


     "Consolidated Interest Expense" means, with respect to any Person, for any
period, the aggregate amount of interest which, in conformity with GAAP, would
be set forth opposite the caption "interest expense" or any like caption on an
income statement for such Person and its Restricted Subsidiaries on a
consolidated basis, including, but not limited to:

          (a) interest expense attributable or imputed to leases constituting
     part of a Sale and Leaseback Transaction and to Capital Lease Obligations;

          (b) all commissions, discounts and other fees and charges owed with
     respect to letters of credit and bankers' acceptance financing;

          (c) the net costs associated with Hedging Obligations;

          (d) amortization of other financing fees and expenses;

          (e) the interest portion of any deferred payment obligation;

          (f) amortization of discount or premium, if any, and all other
     non-cash interest expense (other than interest amortized to cost of sales);
     and

          (g) without duplication,

             (1) all net capitalized interest for such period and all interest
        incurred or paid under any Guarantee of Debt (including a Guarantee of
        principal, interest or any combination thereof) of any Person, and

             (2) all time brokerage fees relating to financing of radio or
        television stations which such Person has an agreement or option to
        acquire.

     "Consolidated Net Income" means, with respect to any Person, for any
period, the aggregate of the net income (or loss) of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; provided, however, that:

          (a) the net income of any Person (the "other Person") in which the
     Person in question or any of its Restricted Subsidiaries has less than a
     100% interest (which interest does not cause the net income of such other
     Person to be consolidated into the net income of the Person in question in
     accordance with GAAP) shall be included only to the extent of the amount of
     dividends or distributions paid to the Person in question or to the
     Subsidiary;

          (b) the net income of any Restricted Subsidiary of the Person in
     question that is subject to any restriction or limitation on the payment of
     dividends or the making of other distributions (other than, if applicable,
     under the notes, the Indenture, the Exchange Debentures, the Exchange
     Indentures, the 10 3/4% Notes or the Existing Indenture) shall be excluded
     to the extent of such restriction or limitation;

          (c) (i) the net income of any Person acquired in a pooling of
     interests transaction for any period before the date of such acquisition
     and (ii) any net gain (but not loss) resulting from an Asset Sale by the
     Person in question or any of its Subsidiaries other than in the ordinary
     course of business shall be excluded;

          (d) extraordinary, unusual and non-recurring gains and losses shall be
     excluded;

          (e) losses associated with discontinued and terminated operations in
     an amount not to exceed $1.0 million per annum shall be excluded; and

          (f) all non-cash items (including, without limitation, cumulative
     effects of changes in GAAP and equity entitlements granted to employees of
     such Person and its Restricted Subsidiaries) increasing and decreasing
     Consolidated Net Income and not otherwise included in the definition of
     Consolidated EBITDA shall be excluded.

     "Credit Facilities" means, with respect to us or any Restricted Subsidiary,
one or more debt or commercial paper facilities with banks or other
institutional lenders (including the Senior Credit Facility) providing for
revolving credit loans, term loans, receivables or inventory financing
(including through the sale of receivables or inventory to such lenders or to
special purpose, bankruptcy remote entities formed to borrow from such lenders
against such receivables or inventory) or trade letters of credit, in each case
together with

                                       108


any amendments, amendments and restatements or modifications thereof or
extensions, revisions, refinancings or replacements thereof by one or more
lenders or a syndicate of lenders.

     "Cumulative Consolidated EBITDA" means, with respect to any Person, as of
any date of determination, Consolidated EBITDA from the Issue Date to the end of
our most recently ended full fiscal quarter before such date, taken as a single
accounting period.

     "Cumulative Consolidated Interest Expense" means, with respect to any
Person, as of any date of determination, Consolidated Interest Expense from the
Issue Date to the end of such Person's most recently ended full fiscal quarter
before such date, taken as a single accounting period.

     "Currency Exchange Protection Agreement" means, in respect of a Person, any
foreign exchange contract, currency swap agreement, currency option or other
similar agreement or arrangement designed to protect such Person against
fluctuations in currency exchange rates.

     "Debt" means, with respect to any Person on any date of determination
(without duplication):

          (a) the principal of and premium (if any) in respect of

             (1) debt of such Person for money borrowed and

             (2) debt evidenced by notes, debentures, bonds or other similar
        instruments for the payment of which such Person is liable;

          (b) all Capital Lease Obligations of such Person and all Attributable
     Debt in respect of Sale and Leaseback Transactions entered into by such
     Person;

          (c) all obligations of such Person representing the deferred and
     unpaid purchase price of Property, all conditional sale obligations of such
     Person and all obligations of such Person under any title retention
     agreement (but excluding trade accounts payable and other accrued
     liabilities arising in the ordinary course of business, including any
     obligations in respect of Film Contracts);

          (d) all obligations of such Person for the reimbursement of any
     obligor on any letter of credit, banker's acceptance or similar credit
     transaction (other than obligations with respect to letters of credit
     securing obligations (other than obligations described in (a) through (c)
     above) entered into in the ordinary course of business of such Person to
     the extent such letters of credit are not drawn upon or, if and to the
     extent drawn upon, such drawing is reimbursed no later than the third
     business day following receipt by such Person of a demand for reimbursement
     following payment on the letter of credit);

          (e) the amount of all obligations of such Person with respect to the
     Repayment of any Disqualified Capital Stock or, with respect to any
     Subsidiary of such Person, any Preferred Stock (but excluding, in each
     case, any accrued dividends);

          (f) all obligations of the type referred to in clauses (a) through (e)
     of other Persons and all dividends of other Persons for the payment of
     which, in either case, such Person is liable, directly or indirectly, as
     obligor, guarantor or otherwise, including by means of any Guarantee;

          (g) all obligations of the type referred to in clauses (a) through (f)
     of other Persons secured by any Lien on any Property of such Person
     (whether or not such obligation is assumed by such Person), the amount of
     such obligation being deemed to be the lesser of the value of such Property
     and the amount of the obligation so secured; and

          (h) to the extent not otherwise included in this definition, Hedging
     Obligations of such Person.

The amount of Debt of any Person at any date shall be the outstanding principal
balance, or the accreted value of such Debt in the case of Debt issued with
original issue discount, at such date of all unconditional obligations as
described above and the maximum liability upon the occurrence of the contingency
giving rise to the obligation, of any contingent obligations at such date. Debt
shall not include contingent obligations

                                       109


arising out of customary indemnification agreements with respect to the sale of
assets or securities. The amount of Debt represented by a Hedging Obligation
shall be equal to:

             (1) zero if such Hedging Obligation has been incurred under clause
        (e) or (f) of the second paragraph of the covenant described under
        "-- Certain Covenants -- Limitation on Debt"; or

             (2) the notional amount of such Hedging Obligation if not incurred
        under such clauses.

     "Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.

     "Designated Senior Debt" means:

          (a) any Senior Debt which, at the time of determination, has an
     aggregate principal amount outstanding of at least $25.0 million (or
     accreted value in the case of Debt issued at a discount) that is
     specifically designated in the instrument evidencing such Senior Debt as
     "Designated Senior Debt;" and

          (b) the Senior Credit Facility.

     "Disqualified Capital Stock" means, with respect to any Person, any Capital
Stock that by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable, in either case at the option of the
holder thereof) or otherwise

          (a) matures or is mandatorily redeemable under a sinking fund
     obligation or otherwise,

          (b) is or may become redeemable or repurchaseable at the option of the
     holder thereof, in whole or in part, or

          (c) is convertible or exchangeable at the option of the holder thereof
     for Debt or Disqualified Capital Stock, on or before, in the case of clause
     (a), (b) or (c), the 91st day after the Stated Maturity of the notes.

     "Domestic Restricted Subsidiary" means any Restricted Subsidiary other than
(a) a Foreign Restricted Subsidiary or (b) a Subsidiary of a Foreign Restricted
Subsidiary.

     "Event of Default" has the meaning set forth under "-- Events of Default."

     "Exchange Act" means the Securities Exchange Act of 1934, as amended.

     "Exchange Debentures" means the 8% Exchange Debentures due 2009, if issued,
the 13 1/4% Exchange Debentures due 2006, if issued, and the 12 1/2% Exchange
Debentures due 2006, if issued, each as issued under the Exchange Indentures, in
each case as they may be modified or amended from time to time.

     "Exchange Indentures" means the indentures dated September 15, 1999, June
10, 1998 and October 4, 1996, between the Company, the guarantors parties
thereto and The Bank of New York, as trustee, which govern the Exchange
Debentures, in each case as they may be modified or amended from time to time.

     "Excluded Asset Sales" means (1) the sale of our stations in each of
Honolulu, Hawaii (one full power station), Boston (Merrimack, New Hampshire)
(one full power station), New York (East Orange, New Jersey & Long Island) (two
low power stations), St. Croix, Virgin Islands (one full power station),
Houston, Texas (one low power station), West Palm Beach, Florida (one low power
station), Boston-Cape Cod, Massachusetts (Dennis, Massachusetts) (one low power
station), and Indianapolis, Indiana (one low power station), (2) the sale of
Tower Assets, and (3) any disposition of accounts receivable in connection with
a Receivables Facility.

     "Existing Indenture" means the indenture, dated July 12, 2001, between us,
the guarantors parties thereto and The Bank of New York, as trustee, which
governs the 10 3/4% Notes, as it may be modified or amended from time to time.

     "Existing Preferred Stock" means:

          (a) the 13 1/4% Cumulative Junior Exchangeable Preferred Stock, $.001
     par value, of which 31,076 shares were outstanding as of the Issue Date
     with a liquidation preference of $10,000 per share, and any additional
     shares issued as payment of dividends on such shares;

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          (b) the 8% Series B Convertible Exchangeable Preferred Stock, $.001
     par value, of which 41,500 shares were outstanding as of the Issue Date
     with a liquidation preference of $10,000 per share; and

          (c) the 9 3/4% Series A Convertible Preferred Stock, $.001 par value,
     of which 10,566 shares were outstanding as of the Issue Date with a
     liquidation preference of $10,000 per share, and any additional shares
     issued as payment of dividends on such shares;

in each case as they may be modified or amended from time to time.

     "Fair Market Value" means, with respect to any Property, the sale price for
such Property that could be negotiated in an arm's-length transaction, for cash,
between a willing seller and a willing buyer, neither of whom is under undue
pressure or compulsion to complete the transaction.

     "Film Contract" means any contract with suppliers that conveys the right to
broadcast specified film, videotape, motion pictures, syndicated television
programs or sports or other programming.

     "Foreign Restricted Subsidiary" means any Restricted Subsidiary which is
not organized under the laws of the United States of America or any State
thereof or the District of Columbia.

     "GAAP" means United States generally accepted accounting principles as in
effect from time to time, including those set forth in:

          (a) the opinions and pronouncements of the Accounting Principles Board
     of the American Institute of Certified Public Accountants;

          (b) the statements and pronouncements of the Financial Accounting
     Standards Board; and

          (c) the rules and regulations of the Commission governing the
     inclusion of financial statements (including pro forma financial
     statements) in periodic reports required to be filed under Section 13 of
     the Exchange Act, including opinions and pronouncements in staff accounting
     bulletins and similar written statements from the accounting staff of the
     Commission.

     "Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Debt of any other Person and any
obligation, direct or indirect, contingent or otherwise, of such Person:

          (a) to purchase or pay (or advance or supply funds for the purchase or
     payment of) such Debt of such other Person (whether arising by virtue of
     partnership arrangements, or by agreements to keep-well, to purchase
     assets, goods, securities or services, to take-or-pay or to maintain
     financial statement conditions or otherwise); or

          (b) entered into for the purpose of assuring in any other manner the
     obligee against loss in respect thereof (in whole or in part);

provided, however, that the term "Guarantee" shall not include:

             (1) endorsements for collection or deposit in the ordinary course
        of business; or

             (2) a contractual commitment to invest in another Person for so
        long as such Investment is reasonably expected to constitute a Permitted
        Investment under clause (b) of the definition of "Permitted Investment."

The term "Guarantee" used as a verb has a corresponding meaning. The term
"Guarantor" shall mean any Person Guaranteeing any obligation.

     "Hedging Obligation" of any Person means any obligation of such Person
under any Interest Rate Agreement, Currency Exchange Protection Agreement or any
other similar agreement or arrangement.

     "incur" means, with respect to any Debt or other obligation of any Person,
to create, issue, incur (by merger, conversion, exchange or otherwise), extend,
assume, Guarantee or become liable in respect of such Debt or other obligation
or the recording, as required under GAAP or otherwise, of any such Debt or
obligation on the balance sheet of such Person (and "incurrence" and "incurred"
shall have meanings correlative to the foregoing); provided, however, that a
change in GAAP that results in an obligation of such Person that exists at such
time, and is not theretofore classified as Debt, becoming Debt shall not be
deemed an incurrence of such Debt, and provided further, however, that any Debt
or other obligations of a Person
                                       111


existing at the time such Person becomes a Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be incurred by such
Subsidiary at the time it becomes a Subsidiary.

     "Independent Financial Advisor" means an investment banking firm of
national standing, provided that such firm is not our Affiliate.

     "Interest Rate Agreement" means, for any Person, any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement designed to protect against fluctuations in interest rates.

     "Investment" by any Person means any direct or indirect loan (other than
advances to customers in the ordinary course of business that are recorded as
accounts receivable on the balance sheet of such Person), advance or other
extension of credit or capital contribution (by means of transfers of cash or
other Property to others or payments for Property or services for the account or
use of others, or otherwise) to, or incurrence of a Guarantee of any obligation
of, or purchase or acquisition of Capital Stock, bonds, notes, debentures or
other securities or evidence of Debt issued by, any other Person. For purposes
of the covenant described under "-- Certain Covenants -- Limitation on
Restricted Payments," "-- Designation of Restricted and Unrestricted
Subsidiaries" and the definition of "Restricted Payment," "Investment" shall
include the portion (proportionate to our equity interest in such Subsidiary) of
the Fair Market Value of the net assets of any Subsidiary of our company at the
time that such Subsidiary is designated an Unrestricted Subsidiary; provided,
however, that upon a redesignation of such Subsidiary as a Restricted
Subsidiary, we shall be deemed to continue to have a permanent "Investment" in
an Unrestricted Subsidiary of an amount (if positive) equal to

          (a) our "Investment" in such Subsidiary at the time of such
     redesignation, less

          (b) the portion (proportionate to our equity interest in such
     Subsidiary) of the Fair Market Value of the net assets of such Subsidiary
     at the time of such redesignation.

     In determining the amount of any Investment made by transfer of any
Property other than cash, such Property shall be valued at its Fair Market Value
at the time of such Investment.

     "Issue Date" means the date on which the notes are initially issued.

     "Lien" means, with respect to any Property of any Person, any mortgage or
deed of trust, pledge, hypothecation, assignment, deposit arrangement, security
interest, lien, charge, easement (other than any easement not materially
impairing usefulness or marketability), encumbrance, preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever on or with respect to such Property (including any Capital Lease
Obligation, conditional sale or other title retention agreement having
substantially the same economic effect as any of the foregoing or any Sale and
Leaseback Transaction).

     "Moody's" means Moody's Investors Service, Inc. or any successor to the
rating agency business thereof.

     "Net Available Cash" from any Asset Sale or Spectrum Sale means cash
payments received therefrom (including any cash payments received by way of
deferred payment of principal under a note or installment receivable or
otherwise, but only as and when received, but excluding any other consideration
received in the form of assumption by the acquiring Person of Debt or other
obligations relating to the Property that is the subject of such Asset Sale or
Spectrum Sale or received in any other non-cash form), in each case net of:

          (a) all legal, title and recording tax expenses, commissions and other
     fees and expenses incurred, and all Federal, state, provincial, foreign and
     local taxes required to be accrued as a liability under GAAP, as a
     consequence of such Asset Sale or Spectrum Sale;

          (b) all payments made on or in respect of any Debt that is secured by
     any Property subject to such Asset Sale or Spectrum Sale in accordance with
     the terms of any Lien upon or other security agreement of any kind with
     respect to such Property, or which must by its terms, or in order to obtain
     a necessary consent to such Asset Sale or Spectrum Sale, or by applicable
     law, be repaid out of the proceeds from such Asset Sale or Spectrum Sale;

          (c) all distributions and other payments required to be made to
     minority interest holders in Subsidiaries or joint ventures as a result of
     such Asset Sale or Spectrum Sale; and

                                       112


          (d) the deduction of appropriate amounts provided by the seller as a
     reserve, in accordance with GAAP, against any liabilities associated with
     the Property disposed of in such Asset Sale or Spectrum Sale and retained
     by us or any Restricted Subsidiary after such Asset Sale or Spectrum Sale.

     "Obligations" means, with respect to any Debt, any principal, premium, if
any, interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization, at the rate specified in the
applicable documents governing such Debt, whether or not a claim for post-filing
interest is allowed in such proceeding), penalties, fees, indemnification,
guarantees, reimbursements, damages and other liabilities payable under the
documentation governing any Debt.

     "Officer" means the Chief Executive Officer, the President, the Chief
Financial Officer or any Executive Vice President of our company or a Subsidiary
Guarantor.

     "Officers' Certificate" means with respect to any Person, a certificate
signed by two Officers, at least one of whom shall be the principal executive
officer or principal financial officer of such Person, and delivered to the
Trustee.

     "Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to us or
the Trustee.

     "Permitted Holders" means:

          (a) collectively Lowell W. Paxson, his spouse, children or other
     lineal descendants (whether adoptive or biological), and any revocable or
     irrevocable inter vivos or testamentary trust or the probate estate of any
     such individual, so long as one or more of the foregoing individuals is the
     principal beneficiary of such trust or probate estate; and

          (b) National Broadcasting Company, Inc. and its Affiliates.

     "Permitted Investment" means any Investment by us or a Restricted
Subsidiary in existence on the Issue Date, and any Investment after the Issue
Date in:

          (a) our company or any Restricted Subsidiary or any Person that will,
     upon the making of such Investment, become a Restricted Subsidiary,
     provided that the primary business of such Restricted Subsidiary is a
     Company Business;

          (b) any Person if as a result of such Investment such Person is merged
     or consolidated with or into, or transfers or conveys all or substantially
     all its Property to, us or a Restricted Subsidiary, provided that such
     Person's primary business is a Company Business;

          (c) Temporary Cash Investments;

          (d) receivables owing to us or a Restricted Subsidiary, if created or
     acquired in the ordinary course of business and payable or dischargeable in
     accordance with customary trade terms; provided, however,that such trade
     terms may include such concessionary trade terms as our company or such
     Restricted Subsidiary deems reasonable under the circumstances;

          (e) payroll, travel and similar advances to cover matters that are
     expected at the time of such advances ultimately to be treated as expenses
     for accounting purposes and that are made in the ordinary course of
     business;

          (f) loans and advances to employees made in the ordinary course of
     business consistent with past practices of us or such Restricted
     Subsidiary, as the case may be, provided that such loans and advances do
     not exceed $1.0 million to any one employee and $5.0 million in the
     aggregate at any one time outstanding;

          (g) stock, obligations or other securities received in settlement of
     debts created in the ordinary course of business and owing to us or a
     Restricted Subsidiary or in satisfaction of judgments;

          (h) any Person to the extent such Investment represents the non-cash
     portion of the consideration received in connection with an Asset Sale
     consummated in compliance with the covenant described under "-- Certain
     Covenants -- Limitation on Asset Sales and Spectrum Sales";

                                       113


          (i) Investments in connection with time brokerage and other similar
     agreements with independently owned broadcast properties, not to exceed an
     aggregate of $25.0 million outstanding at any one time;

          (j) Investments primarily for the purpose of acquiring programming,
     not to exceed an aggregate of $25.0 million outstanding at any one time;

          (k) any transaction where the consideration provided by us or any
     Restricted Subsidiary in connection with such Investment consists solely or
     principally of broadcast air time, not to exceed an aggregate of $5.0
     million in any one year;

          (l) other Investments that do not exceed $40.0 million outstanding at
     any one time in the aggregate; provided, however, that such Investments are
     related to a Company Business; and

          (m) Investments relating to any special purpose wholly-owned
     Subsidiary of our company organized in connection with a Receivables
     Facility that, in the good faith determination of our Board of Directors,
     are necessary or advisable to effect such Receivables Facility.

For purposes of determining the amount of an Investment under clauses (i)
through (1), the amount of the Investment shall be the fair market value thereof
as measured at the time made and without giving effect to subsequent changes in
value.

     "Permitted Junior Securities" means:

             (1) Capital Stock in us or any Subsidiary Guarantor of the notes;
        or

             (2) debt securities that are subordinated to all Senior Debt and
        debt securities that are issued in exchange for Senior Debt to
        substantially the same extent as, or to a greater extent than, the notes
        and the Subsidiary Guarantees are subordinated to Senior Debt under the
        Indenture and have a stated maturity after (and do not provide for
        scheduled principal payments before) the stated maturity of any Senior
        Debt and any debt securities issued in exchange for Senior Debt;

provided, however, that, if such Capital Stock or debt securities are
distributed in a bankruptcy or insolvency proceeding, such Capital Stock or debt
securities are distributed under a plan of reorganization consented to by each
class of Designated Senior Debt.

     "Permitted Liens" means:

          (a) Liens to secure all Obligations in respect of Debt permitted to be
     incurred under clause (c) of the second paragraph of the covenant described
     under "-- Certain Covenants -- Limitation on Debt"; provided that any such
     Lien may not extend to any Property of our company or any Restricted
     Subsidiary other than the Property acquired, constructed or leased with the
     proceeds of such Debt and any improvements or accessions to such Property;

          (b) Liens for taxes, assessments or governmental charges or levies on
     the Property of our company or any Restricted Subsidiary if the same shall
     not at the time be delinquent or thereafter can be paid without penalty, or
     are being contested in good faith and by appropriate proceedings promptly
     instituted and diligently concluded, provided that any reserve or other
     appropriate provision that shall be required in conformity with GAAP shall
     have been made therefor;

          (c) Liens imposed by law, such as carriers', warehousemen's and
     mechanics' Liens and other similar Liens, on the Property of our company or
     any Restricted Subsidiary arising in the ordinary course of business and
     securing payment of obligations that are not more than 60 days past due or
     are being contested in good faith and by appropriate proceedings;

          (d) Liens on the Property of our company or any Restricted Subsidiary
     incurred in the ordinary course of business to secure performance of
     obligations with respect to statutory or regulatory requirements,
     performance or return-of-money bonds, surety bonds or other obligations of
     a like nature and incurred in a manner consistent with industry practice,
     in each case which are not incurred in connection with the borrowing of
     money, the obtaining of advances or credit or the payment of the deferred
     purchase price of Property and which do not in the aggregate impair in any
     material respect the use of Property in the operation of the business of
     our company and the Restricted Subsidiaries taken as a whole;

                                       114


          (e) Liens on Property at the time we or any Restricted Subsidiary
     acquired such Property, including any acquisition by means of a merger or
     consolidation with or into us or any Restricted Subsidiary; provided,
     however, that any such Lien may not extend to any other Property of our
     company or any Restricted Subsidiary; provided further, however, that such
     Liens shall not have been incurred in anticipation of or in connection with
     the transaction or series of transactions under which such Property was
     acquired by us or any Restricted Subsidiary;

          (f) Liens on the Property of a Person at the time such Person becomes
     a Restricted Subsidiary; provided, however, that any such Lien may not
     extend to any other Property of our company or any other Restricted
     Subsidiary that is not a direct Subsidiary of such Person; provided
     further, however, that any such Lien was not incurred in anticipation of or
     in connection with the transaction or series of transactions under which
     such Person became a Restricted Subsidiary;

          (g) pledges or deposits by us or any Restricted Subsidiary under
     workmen's compensation laws, unemployment insurance laws or similar
     legislation, or good faith deposits in connection with bids, tenders,
     contracts (other than for the payment of Debt) or leases to which our
     company or any Restricted Subsidiary is party, or deposits to secure our
     public or statutory obligations, or deposits for the payment of rent, in
     each case incurred in the ordinary course of business;

          (h) utility easements, building restrictions and such other
     encumbrances or charges against real Property as are of a nature generally
     existing with respect to properties of a similar character,

          (i) Liens existing on the Issue Date not otherwise described in
     clauses (a) through (h) above; and

          (j) Liens on the Property of our company or any Restricted Subsidiary
     to secure any Refinancing, in whole or in part, of any Debt secured by
     Liens referred to in clause (a), (e), (f), or (i) above; provided, however,
     that any such Lien shall be limited to all or part of the same Property
     that secured the original Lien (together with improvements and accessions
     to such Property) and the aggregate principal amount of Debt that is
     secured by such Lien shall not be increased to an amount greater than the
     sum of:

             (1) the outstanding principal amount, or, if greater, the committed
        amount. of the Debt secured by Liens described under clause (a), (e),
        (f), or (i) above, as the case may be, at the time the original Lien
        became a Permitted Lien under the Indenture; and

             (2) an amount necessary to pay any fees and expenses, including
        premiums and defeasance costs, incurred by us or such Restricted
        Subsidiary in connection with such Refinancing.

     "Person" means any individual, corporation, company (including any limited
liability company), association, partnership, joint venture, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.

     "Preferred Stock" means any Capital Stock of a Person, however designated,
which entitles the holder thereof to a preference with respect to the payment of
dividends, or as to the distribution of assets upon any voluntary or involuntary
liquidation or dissolution of such Person, over shares of any other class of
Capital Stock issued by such Person.

     "Property" means, with respect to any Person, any interest of such Person
in any kind of property or asset, whether real, personal or mixed, or tangible
or intangible, including Capital Stock in, and other securities of, any other
Person. For purposes of any calculation required under the Indenture, the value
of any Property shall be its Fair Market Value.

     "Public Equity Offering" means an underwritten public offering by us of our
common stock under an effective registration statement under the Securities Act.

     "Purchase Money Debt" means Debt:

          (a) consisting of the deferred purchase price of property, conditional
     sale obligations, obligations under any title retention agreement, other
     purchase money obligations and obligations in respect of industrial revenue
     bonds; and

          (b) incurred to finance the acquisition, construction or lease by us
     or a Restricted Subsidiary of such Property, including additions and
     improvements thereto;

                                       115


in each case including the reasonable fees and expenses incurred in connection
therewith; provided, however, that such Debt is incurred within 180 days after
the acquisition, construction or lease of such Property by us or such Restricted
Subsidiary.

     "Receivable Fees" means distributions or payments made directly or by means
of discounts with respect to any participation interests issued or sold, and
other fees paid to a Person that is not a Restricted Subsidiary, in connection
with any Receivables Facility.

     "Receivables Facility" means one or more receivables financing facilities,
as amended from time to time, under which our company or any of its Restricted
Subsidiaries sells its accounts receivable to a Person that is not a Restricted
Subsidiary.

     "Refinance" means, in respect of any Debt, to refinance, extend, renew,
refund, repay, prepay, repurchase, redeem, defease or retire, or to issue other
Debt in exchange or replacement for, such Debt. "Refinanced" and "Refinancing"
shall have correlative meanings.

     "Refinancing Debt" means any Debt that Refinances any other Debt, including
any successive Refinancings, so long as:

          (a) such Debt is in an aggregate principal amount (or if incurred with
     original issue discount, an aggregate issue price) not in excess of the sum
     of

             (1) the aggregate principal amount then outstanding (or if incurred
        with original issue discount, the aggregate accreted value at the date
        of such Refinancing) of the Debt being Refinanced and

             (2) an amount necessary to pay any fees and expenses, including
        premiums and defeasance costs, related to such Refinancing;

          (b) the Average Life of such Debt is equal to or greater than the
     Average Life of the Debt being Refinanced;

          (c) the Stated Maturity of such Debt is no earlier than the Stated
     Maturity of the Debt being Refinanced; and

          (d) with respect to Debt that is being Refinanced that is subordinate
     to the notes or the Subsidiary Guarantees, such Refinancing Debt shall be
     subordinate to the notes or the Subsidiary Guarantees at least to the same
     extent and in the same manner as the Debt being Refinanced;

     provided, however, that Refinancing Debt shall not include:

             (x) Debt of a Subsidiary that is not a Subsidiary Guarantor that
        Refinances Debt of our company or a Subsidiary Guarantor; or

             (y) Debt of our company or a Restricted Subsidiary that Refinances
        Debt of an Unrestricted Subsidiary.

     "Repay" means, in respect of any Debt, to repay, prepay, repurchase,
redeem, legally defease or otherwise retire such Debt. "Repayment" and "Repaid"
shall have correlative meanings. For purposes of the covenant described under
"-- Certain Covenants -- Limitation on Asset Sales and Spectrum Sales," Debt
shall be considered to have been Repaid only to the extent the related loan
commitment, if any, shall have been permanently reduced in connection therewith.

     "Representative" means the trustee, agent or representative expressly
authorized to act in such capacity, if any, for an issue of Designated Senior
Debt.

     "Restricted Payment" means:

          (a) any dividend or distribution (whether made in cash, securities or
     other Property) declared or paid on or with respect to any shares of
     Capital Stock of our company or any Restricted Subsidiary (including any
     payment in connection with any merger or consolidation with or into us or
     any Restricted Subsidiary), except for any dividend or distribution that is
     made solely to us or a Restricted Subsidiary (and, if such Restricted
     Subsidiary is not a Wholly Owned Restricted Subsidiary, to the other
     shareholders of such Restricted Subsidiary on a pro rata basis or on a
     basis that results in the receipt by

                                       116


     our company or a Restricted Subsidiary of dividends or distributions of
     greater value than it would receive on a pro rata basis) or any dividend or
     distribution payable solely in shares of our Capital Stock (other than
     Disqualified Capital Stock);

          (b) the purchase, repurchase, redemption, acquisition or retirement
     for value of any Capital Stock of our company or any Restricted Subsidiary
     (other than from us or a Restricted Subsidiary) or any securities
     exchangeable for or convertible into any such Capital Stock, including the
     exercise of any option to exchange any Capital Stock (other than for or
     into Capital Stock of our company that is not Disqualified Capital Stock),
     but excluding the conversion of any Capital Stock, Debt or other securities
     into our Capital Stock (other than Disqualified Capital Stock);

          (c) the purchase, repurchase, redemption, acquisition or retirement
     for value, before the date for any scheduled maturity, sinking fund or
     amortization or other installment payment, of any Subordinated Obligation
     (other than the purchase, repurchase or other acquisition of any
     Subordinated Obligation purchased in anticipation of satisfying a scheduled
     maturity, sinking fund or amortization or other installment obligation, in
     each case due within one year of the date of acquisition); or

          (d) any Investment (other than Permitted Investments) in any Person.

     "Restricted Subsidiary" means any Subsidiary of our company other than an
Unrestricted Subsidiary.

     "S&P" means Standard & Poor's Ratings Service or any successor to the
rating agency business thereof.

     "Sale and Leaseback Transaction" means any direct or indirect arrangement
relating to Property now owned or hereafter acquired whereby our company or a
Restricted Subsidiary transfers such Property to another Person and our company
or a Restricted Subsidiary leases it from such Person.

     "Securities Act" means the Securities Act of 1933, as amended.

     "Senior Credit Facility" means the credit agreement, dated as of July 12,
2001, by and among our company, Citicorp USA, Inc., as Administrative Agent, and
the several banks and other financial institutions or entities from time to time
parties thereto, including any related notes, collateral documents, letters of
credit and documentation and guarantees and any appendices, exhibits or
schedules to any of the foregoing, as any or all of such agreements may be in
effect from time to time, in each case, as any or all of such agreements (or any
other agreement that renews, refunds, refinances, restructures, replaces, repays
or extends any or all of such agreements) have been and may be amended,
restated, modified or supplemented from time to time, or renewed, refunded,
refinanced, restructured, replaced, repaid or extended from time to time,
whether with the original agents and lenders or other agents and lenders or
otherwise, and whether provided under the original credit agreement or one or
more other credit agreements or otherwise.

     "Senior Debt" of our company means:

          (a) all Obligations consisting of the principal, premium, if any, and
     accrued and unpaid interest (including interest accruing on or after the
     filing of any petition in bankruptcy or for reorganization relating to us
     at the rate specified in the agreement or instrument evidencing such Debt,
     whether or not such interest is allowed in such proceeding) and any other
     Obligation in respect of

             (1) the Credit Facilities,

             (2) Debt of our company for borrowed money and

             (3) Debt of our company evidenced by notes, debentures, bonds or
        other similar instruments permitted under the Indenture for the payment
        of which we are responsible or liable;

          (b) all our Capital Lease Obligations and all Attributable Debt in
     respect of Sale and Leaseback Transactions entered into by us;

          (c) all our obligations

             (1) for the reimbursement of any obligor on any letter of credit,
        bankers' acceptance or similar credit transaction,

             (2) under any Interest Rate Agreement or

                                       117


             (3) issued or assumed as the deferred purchase price of Property
        and all our conditional sale obligations and all obligations under any
        title retention agreement permitted under the Indenture; and

          (d) all obligations of other Persons of the type referred to in
     clauses (a), (b) and (c) for the payment of which we are responsible or
     liable as Guarantor;

     provided, however, that Senior Debt shall not include:

          (A) Debt of our company that is by its terms subordinate or pari passu
     in right of payment to the notes, including any Senior Subordinated Debt or
     any Subordinated Obligations;

          (B) any Debt incurred in violation of the provisions of the Indenture;

          (C) accounts payable or any other obligations of our company to trade
     creditors created or assumed by us in the ordinary course of business in
     connection with the obtaining of materials or services (including
     Guarantees thereof or instruments evidencing such liabilities and
     obligations with respect to Film Contracts);

          (D) any liability for federal, state, local or other taxes owed or
     owing by us;

          (E) any obligation of our company to any Subsidiary;

          (F) any obligations with respect to any of our Capital Stock; or

          (G) any Debt that does not constitute Senior Debt under the Exchange
     Indentures, for so long as any Exchange Debentures are outstanding or
     issuable thereunder (it being understood that, in any event, Obligations
     under the Credit Facilities constitute Senior Debt).

     "Senior Debt" of any Subsidiary Guarantor has a correlative meaning.

     "Senior Subordinated Debt" of our company means the notes, the Exchange
Debentures (or any Debt ranking pari passu with the Exchange Debentures), the
10 3/4% Notes and any other subordinated Debt of our company that specifically
provides that such Debt is to rank pari passu with the notes and is not
subordinated by its terms to any other subordinated Debt or other obligation of
our company which is not Senior Debt. "Senior Subordinated Debt" of any
Subsidiary Guarantor has a correlative meaning and includes any Guarantee by
such Subsidiary Guarantor of Exchange Debentures (or any Guarantee by such
Subsidiary Guarantor of Debt ranking pari passu with the Exchange Debentures).

     "Significant Subsidiary" means any Subsidiary that would be a "Significant
Subsidiary" of our company within the meaning of Rule 1-02 under Regulation S-X
promulgated by the Commission.

     "Spectrum Sale" means any sale, lease, transfer, license or other
disposition (or series of related sales, leases, transfers, licenses or
dispositions), with or without the consent of our company or any Restricted
Subsidiary, of any broadcast license issued by the FCC under or in connection
with either: (a) the FCC's upper 700MHz (746-764 MHz and 776-794 MHz) band
auction or (b) the FCC's lower 700MHz (698-746 MHz) band auction, provided that,
in each case, the expected use of such license shall not include the
transmission of a television signal.

     "Stated Maturity" means, with respect to any security, the date specified
in such security as the fixed date on which the payment of principal of such
security is due and payable, including under any mandatory redemption provision
(but excluding any provision providing for the repurchase of such security at
the option of the holder thereof upon the happening of any contingency beyond
the control of the issuer unless such contingency has occurred).

     "Subordinated Obligation" means any Debt of our company or any Subsidiary
Guarantor (whether outstanding on the Issue Date or thereafter incurred) that is
subordinate or junior in right of payment to the notes or the applicable
Subsidiary Guarantee under a written agreement to that effect or otherwise under
the terms of such Debt.

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     "Subsidiary" means, in respect of any Person, any corporation, company
(including any limited liability company), association, partnership, joint
venture or other business entity of which a majority of the total voting power
of the Voting Stock is at the time owned or controlled, directly or indirectly,
by:

          (a) such Person;

          (b) such Person and one or more Subsidiaries of such Person; or

          (c) one or more Subsidiaries of such Person.

     "Subsidiary Guarantor" means each Domestic Restricted Subsidiary and any
other Person that becomes a Subsidiary Guarantor under the covenant described
under "-- Certain Covenants -- Future Subsidiary Guarantors."

     "Subsidiary Guarantee" means a Guarantee on the terms set forth in the
Indenture by a Subsidiary Guarantor of our obligations with respect to the
notes.

     "Temporary Cash Investments" means any of the following:

          (a) Investments in U.S. Government Obligations maturing within 365
     days of the date of acquisition thereof;

          (b) Investments in time deposit accounts, certificates of deposit and
     money market deposits maturing within 90 days of the date of acquisition
     thereof issued by a bank or trust company organized under the laws of the
     United States of America or any state thereof having capital, surplus and
     undivided profits aggregating in excess of $500.0 million and whose
     long-term debt is rated "A-3" or "A-" or higher according to Moody's or S&P
     (or such similar equivalent rating by at least one "nationally recognized
     statistical rating organization" (as defined in Rule 436 under the
     Securities Act));

          (c) repurchase obligations with a term of not more than 30 days for
     underlying securities of the types described in clause (a) entered into
     with

             (1) a bank meeting the qualifications described in clause (b) above
        or

             (2) any primary government securities dealer reporting to the
        Market Reports Division of the Federal Reserve Bank of New York;

          (d) Investments in commercial paper, maturing not more than 90 days
     after the date of acquisition, issued by a corporation (other than an
     Affiliate of our company) organized and in existence under the laws of the
     United States of America with a rating at the time as of which any
     Investment therein is made of "P-1" (or higher) according to Moody's or
     "A-1" (or higher) according to S&P (or such similar equivalent rating by at
     least one "nationally recognized statistical rating organization" (as
     defined in Rule 436 under the Securities Act)); and

          (e) direct obligations (or certificates representing an ownership
     interest in such obligations) of any state of the United States of America
     (including any agency or instrumentality thereof) for the payment of which
     the full faith and credit of such state is pledged and which are not
     callable or redeemable at the issuer's option, provided that

             (1) the long-term debt of such state is rated "A-3" or "A-" or
        higher according to Moody's or S&P (or such similar equivalent rating by
        at least one "nationally recognized statistical rating organization" (as
        defined in Rule 436 under the Securities Act)) and

             (2) such obligations mature within 180 days of the date of
        acquisition thereof.

     "10 3/4% Notes" means our 10 3/4% Senior Subordinated Notes due 2008.

     "Tower Assets" means the broadcast towers, transmitters and antennas and
related real property on which they are situated owned by us or any of our
Subsidiaries.

     "Treasury Rate" means, as of any redemption date, the yield to maturity as
of such redemption date of United States Treasury securities with a constant
maturity (as compiled and published in the most recent Federal Reserve
Statistical Release H.15 (519) that has become publicly available at least two
business days before the redemption date (or, if such statistical release is no
longer published, any publicly available source of similar market data)) most
nearly equal to the period from the redemption date to January 15, 2006;
                                       119


provided, however, that if the period from the redemption date to January 15,
2006 is less than one year, the weekly average yield on actually traded United
States Treasury securities adjusted to a constant maturity of one year shall be
used.

     "Unrestricted Subsidiary" means:

          (a) any Subsidiary of our company that is designated after the Issue
     Date as an Unrestricted Subsidiary as permitted or required under the
     covenant described under "-- Certain Covenants -- Designation of Restricted
     and Unrestricted Subsidiaries" and is not thereafter redesignated as a
     Restricted Subsidiary as permitted pursuant thereto; and

          (b) any Subsidiary of an Unrestricted Subsidiary.

     "U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable or redeemable at the issuer's option.

     "Voting Stock" of any Person means all classes of Capital Stock or other
interests (including partnership interests) of such Person then outstanding and
normally entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers or trustees thereof.

     "Wholly Owned Restricted Subsidiary" means, at any time, a Restricted
Subsidiary all of the Voting Stock of which (except directors' qualifying
shares) is at such time owned, directly or indirectly, by us or one or more
Wholly Owned Subsidiaries of our company.

BOOK-ENTRY SYSTEM

     The new notes will be issued in the form of one or more Global Securities
registered in the name of The Depository Trust Company ("DTC") or its nominee.

     Upon the issuance of a Global Security, DTC or its nominee will credit the
accounts of Persons holding through it with the respective principal amounts of
the notes represented by such Global Security acquired by such Persons in the
exchange offer. Such accounts were designated by the initial purchasers.
Ownership of beneficial interests in a Global Security is limited to Persons
that have accounts with DTC ("participants") or Persons that may hold interests
through participants. Any Person acquiring an interest in a Global Security
through an offshore transaction in reliance on Regulation S of the Securities
Act may hold such interest through Clearstream or Euroclear. Ownership of
beneficial interests in a Global Security is shown on, and the transfer of that
ownership interest will be effected only through, records maintained by DTC
(with respect to participants' interests) and such participants (with respect to
the owners of beneficial interests in such Global Security other than
participants). The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
a Global Security.

     Payment of principal of and interest on notes represented by a Global
Security will be made in immediately available funds to DTC or its nominee, as
the case may be, as the sole registered owner and the sole holder of the notes
represented thereby for all purposes under the Indenture. We have been advised
by DTC that upon receipt of any payment of principal of or interest on any
Global Security, DTC will immediately credit, on its book-entry registration and
transfer system, the accounts of participants with payments in amounts
proportionate to their respective beneficial interests in the principal or face
amount of such Global Security as shown on the records of DTC. Payments by
participants to owners of beneficial interests in a Global Security held through
such participants will be governed by standing instructions and customary
practices as is now the case with securities held for customer accounts
registered in "street name" and will be the sole responsibility of such
participants.

     A Global Security may not be transferred except as a whole by DTC or a
nominee of DTC to a nominee of DTC or to DTC. A Global Security is exchangeable
for certificated notes only if:

          (a) DTC notifies us that it is unwilling or unable to continue as a
     depositary for such Global Security or if at any time DTC ceases to be a
     clearing agency registered under the Exchange Act;

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          (b) we in our discretion at any time determine not to have all the
     notes represented by such Global Security; or

          (c) there shall have occurred and be continuing a Default or an Event
     of Default with respect to the notes represented by such Global Security.

Any Global Security that is exchangeable for certificated notes under the
preceding sentence will be exchanged for certificated notes in authorized
denominations and registered in such names as DTC or any successor depositary
holding such Global Security may direct. Subject to the foregoing, a Global
Security is not exchangeable, except for a Global Security of like denomination
to be registered in the name of DTC or any successor depositary or its nominee.
If a Global Security becomes exchangeable for certificated notes,

          (a) certificated notes will be issued only in fully registered form in
     denominations of $1,000 or integral multiples thereof,

          (b) payment of principal of, and premium, if any, and interest on, the
     certificated notes will be payable and the transfer of the certificated
     notes will be registerable, at our office or agency maintained for such
     purposes, and

          (c) no service charge will be made for any registration of transfer or
     exchange of the certificated notes, although we may require payment of a
     sum sufficient to cover any tax or governmental charge imposed in
     connection therewith.

     So long as DTC or any successor depositary for a Global Security, or any
nominee, is the registered owner of such Global Security, DTC or such successor
depositary or nominee, as the case may be, will be considered the sole owner or
holder of the notes represented by such Global Security for all purposes under
the Indenture and the notes. Except as set forth above, owners of beneficial
interests in a Global Security will not be entitled to have the notes
represented by such Global Security registered in their names, will not receive
or be entitled to receive physical delivery of certificated notes in definitive
form and will not be considered to be the owners or holders of any notes under
such Global Security. Accordingly, each Person owning a beneficial interest in a
Global Security must rely on the procedures of DTC or any successor depositary,
and, if such Person is not a participant, on the procedures of the participant
through which such Person owns its interest, to exercise any rights of a holder
under the Indenture. We understand that under existing industry practices, if we
request any action of holders or if an owner of a beneficial interest in a
Global Security desires to give or take any action which a holder is entitled to
give or take under the Indenture, DTC or any successor depositary would
authorize the participants holding the relevant beneficial interest to give or
take such action and such participants would authorize beneficial owners owning
through such participants to give or take such action or would otherwise act
upon the instructions of beneficial owners owning through them.

     DTC has advised us that DTC is a limited-purpose trust company organized
under the Banking Law of the State of New York, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code and a "clearing agency" registered under the Exchange Act. DTC
was created to hold the securities of its participants and to facilitate the
clearance and settlement of securities transactions among its participants in
such securities through electronic book-entry changes in accounts of the
participants, thereby eliminating the need for physical movement of securities
certificates. DTC's participants include securities brokers and dealers (which
may include the Initial Purchasers), banks, trust companies, clearing
corporations and certain other organizations, some of which (or their
representatives) own DTC. Access to DTC's book-entry system is also available to
others, such as banks, brokers, dealers and trust companies, that clear through
or maintain a custodial relationship with a participant, either directly or
indirectly.

     Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in Global Securities among participants of DTC, it is
under no obligation to perform or continue to perform such procedures, and such
procedures may be discontinued at any time. None of our company, the Trustee or
the initial purchasers will have any responsibility for the performance by DTC
or its participants or indirect participants of their respective obligations
under the rules and procedures governing their operations.

                                       121


                  IMPORTANT FEDERAL INCOME TAX CONSIDERATIONS

     The following discussion is based upon the provisions of the Internal
Revenue Code of 1986, as amended (the "Code"), the applicable Treasury
Regulations promulgated and proposed thereunder, judicial authority and current
administrative rulings and practice, all of which are subject to change,
possibly with retroactive effect. Except as specifically provided below, the
following discussion is limited to the U.S. federal income tax consequences
relevant to a holder of a note who or which is (i) a citizen or resident of the
United States, (ii) a corporation (or other entity, other than a partnership,
estate or trust) created or organized under the laws of the United States, or
any political subdivision thereof, (iii) an estate the income of which is
subject to U.S. federal income taxation regardless of its source, or (iv) a
trust if a U.S. court is able to exercise primary supervision over the
administration of the trust and one or more U.S. persons have the authority to
control all substantial decisions of the trust (each a "U.S. Holder"). This
discussion does not purport to deal with all aspects of U.S. federal income
taxation that might be relevant to particular holders in light of their personal
investment circumstances or status, nor does it discuss the U.S. federal income
tax consequences to certain types of holders subject to special treatment under
the U.S. federal income tax laws (for example, financial institutions, insurance
companies, dealers in securities, tax-exempt organizations, or taxpayers holding
the notes through a partnership or similar pass-thru entity or as part of a
"straddle," "hedge" or "conversion transaction"). Moreover, the effect of any
applicable state, local or foreign tax laws is not discussed.

     Except as otherwise indicated below, this discussion assumes that the notes
are held as capital assets (as defined in Section 1221 of the Code) by the
holders thereof. This discussion is limited to the U.S. federal income tax
consequences to holders acquiring notes on original issue for cash. We will
treat the notes as indebtedness for U.S. federal income tax purposes, and the
balance of the discussion is based on the assumption that such treatment will be
respected.

     PROSPECTIVE HOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS REGARDING
THE FEDERAL, STATE, LOCAL AND OTHER TAX CONSIDERATIONS OF THE ACQUISITION,
OWNERSHIP AND DISPOSITION OF THE NOTES.

EXCHANGE OFFER

     The exchange of the original notes for the new notes under the exchange
offer should not constitute a significant modification of the terms of the notes
and, therefore, such exchange should not constitute an exchange for U.S. federal
income tax purposes. Accordingly, such exchange should have no U.S. federal
income tax consequences to U.S. Holders of notes.

U.S. HOLDERS

     Original Issue Discount.  The notes will have original issue discount
("OID") for U.S. federal income tax purposes, and accordingly, U.S. Holders of
notes will be subject to special rules relating to the accrual of income for tax
purposes. U.S. Holders of notes generally must include OID in gross income for
U.S. federal income tax purposes on an annual basis under a constant yield
accrual method regardless of their regular method of tax accounting. However,
U.S. holders of the notes generally will not be required to include separately
in income cash payments received on such notes, even if denominated as interest,
to the extent such payments constitute payments of previously accrued OID.

     The notes are treated as issued with OID equal to the excess of a note's
"stated redemption price at maturity" over its "issue price." The stated
redemption price at maturity of a note will include all payments on the note,
whether denominated as principal or interest. The issue price is the first price
at which a substantial amount of notes are sold for money (excluding sales to
bond houses, brokers or similar persons or organizations acting as underwriters,
placement agents or wholesalers). The amount of OID includible in income by a
U.S. Holder of a note is the sum of the "daily portions" of OID with respect to
the note for each day during the taxable year or portion thereof in which such
U.S. Holder holds such note ("accrued OID"). A daily portion is determined by
allocating to each day in an "accrual period" a pro rata portion of the OID that
accrued in such period. The "accrual period" of a note may be of any length and
may vary in length over the term of the note, provided that each accrual period
is no longer than one year and each scheduled payment of principal or interest
occurs either on the first or last day of an accrual period. The amount of OID
that accrues with respect to any accrual period is the product of the note's
adjusted issue price at the beginning of such accrual period and its yield to
maturity, determined on the basis of compounding at the close of each accrual
                                       122


period and properly adjusted for the length of such period. The "adjusted issue
price" of a note at the start of any accrual period is equal to its issue price,
increased by the accrued OID for each prior accrual period and reduced by any
prior payments made on such note.

     Applicable High Yield Discount Obligation Rules.  If the "yield to
maturity" on the notes equals or exceeds the sum of 5% and the appropriate
"applicable federal rate" in effect for the month in which the notes are issued
and the notes have "significant" OID, the notes are considered "applicable high
yield discount obligations" ("AHYDOS"). A debt instrument has "significant" OID
if (a) the aggregate amount which would be includible in gross income with
respect to such debt instrument for periods before the close of any accrual
period ending after the date five years after the date of issue exceeds (b) the
sum of (i) the aggregate amount of interest to be paid under the instrument
before the close of such accrual period and (ii) the product of the issue price
of the debt instrument and its yield to maturity.

     If the notes are AHYDOS, we will not be permitted to deduct for U.S.
federal income tax purposes OID accrued on the notes until such time as we
actually pay such OID in cash or in property other than our stock or our debt
(or stock or debt of a person related to us). Moreover, the lesser of (a) the
amount of OID on the notes and (b) the product of the total OID on the notes
times the ratio of (i) the excess of the note's yield to maturity over the sum
of the appropriate applicable federal rate plus 6% to (ii) the yield to maturity
(the "Dividend-Equivalent Interest") will not be deductible at any time by us
for U.S. federal income tax purposes (regardless of whether we actually pay such
Dividend-Equivalent Interest in cash or other property). A corporate U.S. Holder
is eligible for the dividends received deduction for the portion of the
Dividend-Equivalent Interest that would have been treated as a dividend had it
been distributed by us with respect to our stock.

     Tax Basis.  A U.S. Holder's initial tax basis in a note will be equal to
the purchase price paid by such holder for such note increased by OID included
in gross income with respect to the note and decreased by the amount of any
payments received by such holder.

     Effect of Optional Redemption on Original Issue Discount.  In the event of
a Change of Control (as defined above under "Description of Notes -- Certain
Definitions"), we will be required to offer to redeem all of the notes at
redemption prices specified elsewhere herein. If we receive net proceeds from
one or more Public Equity Offerings (as defined above under "Description of
Notes -- Certain Definitions"), we may, at our option, use all or a portion of
such net proceeds to redeem in the aggregate up to 35% of the original aggregate
principal amount at maturity of the notes at a price equal to 112.25% of the
Accreted Value thereof, provided that at least 65% of the original aggregate
principal amount at maturity of the notes remains outstanding after each such
redemption. Computation of the yield and maturity of the notes is not affected
by such redemption rights and obligations if, based on all the facts and
circumstances as of the issue date, the stated payment schedule of the notes
(that does not reflect the Change of Control event or Public Equity Offering
event) is significantly more likely than not to occur. We have determined that,
based on all of the facts and circumstances as of the issue date, it is
significantly more likely than not that the notes will be paid according to
their stated schedule.

     We may redeem the notes, in whole or in part, at any time on or after
January 15, 2006, at redemption prices specified elsewhere herein plus accrued
and unpaid interest and Special Interest, if any, on the notes so redeemed to
but excluding the date of redemption. The United States Treasury Regulations
contain rules for determining the "maturity date" and the stated redemption
price at maturity of an instrument that may be redeemed before its stated
maturity date at the option of the issuer. Under United States Treasury
Regulations, solely for the purposes of the accrual of original issue discount,
it is assumed that an issuer will exercise any option to redeem a debt
instrument if such exercise would lower the yield to maturity of the debt
instrument. We believe that we will not be presumed to redeem the notes before
their stated maturity under these rules because the exercise of such options
would not lower the yield to maturity of the notes.

     U.S. Holders may wish to consult their own tax advisors regarding the
treatment of such contingencies.

     Sale, Exchange, Redemption or Repayment.  Unless a nonrecognition provision
applies, the sale, exchange, redemption or other disposition of notes will be a
taxable event for U.S. federal income tax purposes. In such event, a U.S. Holder
will recognize gain or loss equal to the difference between (i) the amount of
cash plus the fair market value of any property received (except to the extent
that amounts received are attributable to accrued interest not previously
included in income, which portion of the consideration

                                       123


would be taxed as ordinary income) and (ii) the holder's adjusted tax basis
therein. Such gain or loss will be capital gain or loss and will be long-term
capital gain or loss if the notes have been held for more than one year at the
time of disposition. Noncorporate taxpayers are generally subject to a maximum
regular U.S. federal income tax rate of 20% on net long term capital gains. The
deductibility of capital losses is subject to certain limitations.

     Exchange Offer.  The exchange of notes for exchange notes under the
exchange offer should not constitute a significant modification of the terms of
the notes and, therefore, such exchange should not constitute an exchange for
U.S. federal income tax purposes. Accordingly, such exchange should have no U.S.
federal income tax consequences to U.S. Holders of notes.

     Backup Withholding and Information Reporting.  Under the Code, U.S. Holders
of notes may be subject, under certain circumstances, to information reporting
and "backup withholding" at 30% (subject to periodic reductions through 2006)
rate with respect to cash payments in respect of principal (and premium, if
any), interest, and the gross proceeds from dispositions thereof. Backup
withholding applies only if the U.S. Holder (i) fails to furnish its social
security or other taxpayer identification number ("TIN") within a reasonable
time after a request therefor, (ii) furnishes an incorrect TIN, (iii) fails to
report properly interest or dividends, or (iv) fails, under certain
circumstances, to provide a certified statement, signed under penalty of
perjury, that the TIN provided is its correct number and that it is not subject
to backup withholding. Any amount withheld from a payment to a U.S. Holder under
the backup withholding rules is allowable as a credit (and may entitle such
holder to a refund) against such U.S. Holder's U.S. federal income tax
liability, provided that the required information is furnished to the Internal
Revenue Service. Certain persons are exempt from backup withholding, including
corporations and financial institutions. U.S. Holders of notes should consult
their tax advisors as to their qualification for exemption from backup
withholding and the procedure for obtaining such exemption.

     We will furnish annually to the Internal Revenue Service and to record
holders of the notes (to whom it is required to furnish such information)
information relating to the amount of interest.

     THE FOREGOING DISCUSSION IS BASED ON THE PROVISIONS OF THE CODE,
REGULATIONS, RULINGS AND JUDICIAL DECISIONS NOW IN EFFECT, ALL OF WHICH ARE
SUBJECT TO CHANGE. ANY SUCH CHANGES MAY BE APPLIED RETROACTIVELY IN A MANNER
THAT COULD ADVERSELY AFFECT U.S. HOLDERS OF NOTES. EACH PURCHASER OF ANY OF THE
NOTES SHOULD CONSULT ITS OWN TAX ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES TO
IT, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER TAX
LAWS, OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE NOTES.

NON-U.S. HOLDERS

     The following discussion is limited to the U.S. federal income tax
consequences relevant to a non-U.S. Holder of a note.

     For purposes of the following discussion, interest and gain on the sale,
exchange or other disposition of a note will be considered to be "U.S. trade or
business income" if such income or gain is (i) effectively connected with the
conduct of a U.S. trade or business and (ii) in the case of a treaty resident,
attributable to a permanent establishment (or, in the case of an individual, a
fixed-base) in the United States.

     Stated Interest and OID on Notes.  Generally any interest or OID paid to a
non-U.S. Holder of a note that is not U.S. trade or business income will not be
subject to U.S. federal income tax if the interest qualifies as "portfolio
interest." Generally interest (and OID) on the notes will qualify as portfolio
interest if (i) the non-U.S. Holder does not actually or constructively own 10%
or more of our total voting power of all voting stock (in the case of the notes)
and (ii) such holder is not a "controlled foreign corporation" with respect to
which we are a "related person" within the meaning of the Code, and (iii) either
the beneficial owner, under penalty of perjury, certifies that the beneficial
owner is not a United States person and such certificate provides the beneficial
owner's name and address, or a securities clearing organization, bank or other
financial institution that holds customers' securities in the ordinary course of
its trade or business and holds the notes certifies under penalties of perjury,
that such statement has been received from the beneficial owner by it or by a
financial institution between it and the beneficial owner, and (iv) the non-U.S.
Holder is not a bank

                                       124


receiving interest on the extension of credit made under a loan agreement made
in the ordinary course of its trade or business.

     The gross amount of payments to a non-U.S. Holder of interest (and OID)
that do not qualify for the portfolio interest exception and that are not
effectively connected with the conduct of a U.S. trade or business will be
subject to U.S. federal income tax at the rate of 30%, unless a U.S. income tax
treaty applies to reduce or eliminate withholding. U.S. trade or business income
will be taxed on a net basis at regular U.S. rates rather than the 30% gross
rate. In the case of a non-U.S. Holder that is a corporation, such United States
trade or business income may also be subject to the branch profits tax (which is
generally imposed on a foreign corporation on the actual or deemed repatriation
from the United States of earnings and profits attributable to United States
trade or business income) at a 30% rate. The branch profits tax may not apply
(or may apply at a reduced rate) if a recipient is a qualified resident of
certain countries with which the United States has an income tax treaty. To
claim the benefit of a tax treaty or to claim exemption from withholding because
the income is U.S. trade or business income, the non-U.S. Holder must provide a
properly executed Form W-8BEN or W-8ECI (or such successor forms as the Internal
Revenue Service designates), as applicable, before the payment of interest or
OID. These forms must be periodically updated. Also under these regulations, a
non-U.S. Holder who is claiming the benefits of a treaty may be required in
certain instances to obtain a U.S. taxpayer identification number and to provide
certain documentary evidence issued by foreign governmental authorities to prove
residence in the foreign country.

     Sales, Exchange or Redemption of Notes.  A non-U.S. Holder will generally
not be subject to U.S. federal income tax on gain recognized on a sale,
redemption or other disposition of a note unless (i) the gain is effectively
connected with the conduct of a trade or business within the United States by
the non-U.S. Holder; (ii) in the case of a non-U.S. Holder who is a nonresident
alien individual and holds such note as a capital asset, such holder is present
in the United States for 183 or more days in the taxable year and certain other
requirements are met; or (iii) the non-U.S. Holder is subject to the special
rules applicable to former citizens and residents of the United States.

     Federal Estate Tax.  If interest on the notes is exempt from withholding of
U.S. federal income tax as portfolio interest described above, the notes will
not be included in the estate of a deceased non-U.S. Holder for U.S. federal
estate tax purposes.

     Information Reporting and Backup Withholding.  We must report annually to
the Internal Revenue Service and to each non-U.S. Holder any interest that is
subject to withholding, or that is exempt from U.S. withholding tax under a tax
treaty, or interest that is exempt from United States tax under the portfolio
interest exception. Copies of these information returns may also be made
available under the provisions of a specific treaty or agreement to the tax
authorities of the country in which the non-U.S. Holder resides.

     In the case of payments of interest to non-U.S. Holders, Treasury
Regulations provide that information reporting and backup withholding at a rate
of 30% (subject to periodic reductions through 2006) will not apply to such
payments with respect to which either the requisite certification has been
received or an exemption has otherwise been established (provided that neither
the payor nor its paying agent has actual knowledge that the holder is a U.S.
person or the conditions of any other exemption are not, in fact, satisfied).

     The Treasury Regulations provide that backup withholding and information
reporting will not apply to payments of principal on the notes by us to a
non-U.S. Holder, if the Holder certifies as to its non-U.S. status under
penalties of perjury or otherwise establishes an exemption (provided that
neither we nor our paying agents have actual knowledge that the holder is a
United States person or that the conditions of any other exemption are not, in
fact, satisfied).

     The payment of the proceeds from the disposition of the notes to or through
the United States office of any broker, U.S. or foreign, will be subject to
information reporting and possible backup withholding unless the owner certifies
as to its non-U.S. status under penalty of perjury or otherwise establishes an
exemption, provided that the broker does not have actual knowledge that the
holder is a U.S. person or that the conditions of any other exemption are not,
in fact, satisfied. The payment of the proceeds from the disposition of a note
to or through a non-U.S. office of a non-U.S. broker that is not a U.S. related
person will not be subject to information reporting or backup withholding. For
this purpose a "U.S. related person" is (i) a "controlled foreign corporation"
for U.S. federal income tax purposes or (ii) a foreign person 50% or more of
whose gross income from all sources for the three-year period ending with the
close of its taxable year preceding the

                                       125


payment (or for such part of the period that the broker has been in existence)
is derived from activities that are effectively connected with the conduct of a
United States trade or business.

     In the case of the payment of proceeds from the disposition of notes to or
through a non-U.S. office of a broker that is either a U.S. person or a U.S.
related person, the Regulations require information reporting on the payment
unless the broker has documentary evidence in its files that the owner is a
non-U.S. Holder and the broker has no knowledge to the contrary. Backup
withholding will not apply to payments made through foreign offices of a broker
that is not a U.S. person or a U.S. related person (absent actual knowledge that
the payee is a U.S. person).

     The Treasury Department recently promulgated final Treasury Regulations
regarding the withholding and information reporting rules discussed above. In
general, the final Regulations do not significantly alter the substantive
withholding and information reporting requirements but rather unify current
certification procedures and forms and clarify reliance standards. Non-U.S.
Holders should consult their own tax advisors with respect to the impact, if
any, of the new final Treasury Regulations.

     Any amounts withheld under the backup withholding rules from a payment to a
non-U.S. Holder will be allowed as a refund or a credit against such non-U.S.
Holder's U.S. federal income tax liability, provided that the requisite
procedures are followed.

     THE PRECEDING DISCUSSION OF CERTAIN UNITED STATES FEDERAL INCOME TAX
CONSEQUENCES IS FOR GENERAL INFORMATION ONLY AND IS NOT TAX ADVICE. ACCORDINGLY,
EACH INVESTOR SHOULD CONSULT ITS OWN TAX ADVISER AS TO PARTICULAR TAX
CONSEQUENCES TO IT OF PURCHASING, HOLDING AND DISPOSING OF THE NOTES, INCLUDING
THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS, AND OF ANY
PROPOSED CHANGES IN APPLICABLE LAWS.

                              PLAN OF DISTRIBUTION

     Each broker-dealer that receives new notes for its own account under the
exchange offer ("Restricted Holder") must acknowledge that it will deliver a
prospectus in connection with any resale of such new notes. This prospectus, as
it may be amended or supplemented from time to time, may be used by a Restricted
Holder in connection with resales of new notes received in exchange for original
notes where such original notes were acquired as a result of market-making
activities or other trading activities. We will make this prospectus available
to any Restricted Holder for use in connection with any such resale if such
Restricted Holder indicates in the Letter of Transmittal that it is a
broker-dealer. In addition, under Section 4(3) of the Securities Act, all
dealers effecting transactions in the new notes, whether or not participating in
the exchange offer, may be required to deliver a prospectus.

     We will not receive any proceeds from any sale of new notes by Restricted
Holders. New notes received by Restricted Holders for their own account under
the exchange offer may be sold from time to time in one or more transactions in
the over-the-counter market, in negotiated transactions, through the writing of
options on the new notes or through a combination of such methods of resale, at
market prices prevailing at the time of resale, or at prices related to such
prevailing market prices or at negotiated prices. Any such resale may be made
directly to purchasers or to or through Restricted Holders who may receive
compensation in the form of commissions or concessions from any such Restricted
Holder and/or the purchasers of any new notes. Any Restricted Holder that
resells new notes that were received by it for its own account under the
exchange offer and any person that participates in the distribution of such new
notes may be deemed to be an "underwriter" within the meaning of the Securities
Act, and any profit on any such resale of new notes and any commissions or
concessions received by any such Restricted Holder may be deemed to be
underwriting compensation under the Securities Act. The Letter of Transmittal
states that by acknowledging that it will deliver and by delivering a
prospectus, a Restricted Holder will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.

     For a period of one year after the expiration of the exchange offer, we
will promptly send additional copies of this prospectus and any amendment or
supplement to this prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. We have agreed to pay all expenses incident to the
exchange offer, including the reasonable fees and expenses of counsel to the
initial purchasers of the original notes, other

                                       126


than commissions or concessions of any brokers or dealers, and will indemnify
holders of the notes, including any broker-dealers, against certain liabilities,
including liabilities under the Securities Act.

     By acceptance of the exchange offer, each Restricted Holder that receives
new notes under the exchange offer agrees that, upon receipt of notice from us
of the happening of any event that makes any statement in this prospectus untrue
in any material respect or that requires the making of any changes in this
prospectus to make the statements herein not misleading (which notice we agree
to deliver promptly to such Restricted Holder), such Restricted Holder will
suspend use of the prospectus until we have amended or supplemented the
prospectus to correct such misstatement or omission and have furnished copies of
the amended or supplemented prospectus to such Restricted Holder.

                                 LEGAL MATTERS

     Legal matters in connection with the issuance of the new notes in exchange
for the original notes will be passed upon for us by Holland & Knight LLP (a
registered limited liability partnership).

                                    EXPERTS

     The financial statements as of December 31, 2001 and 2000 and for each of
the three years in the period ended December 31, 2001 included in this
prospectus have been so included in reliance on the report of
PricewaterhouseCoopers LLP, independent certified public accountants, given on
the authority of said firm as experts in auditing and accounting.

                   WHERE YOU CAN FIND ADDITIONAL INFORMATION

     We are subject to the informational requirements of the Exchange Act, and
in accordance with the requirements of the Exchange Act, we file reports and
other information with the SEC. You may read and, for a fee, copy any document
that we file with the SEC: (1) at the public reference facilities maintained by
the SEC at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, or (2) at the regional office of the SEC located at Northwestern Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of
these documents may also be obtained at prescribed rates from the Public
Reference Section of the SEC at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549. You may also obtain the documents that we file
electronically from the SEC's Web site at http://www.sec.gov. While any notes
remain outstanding, we will make available, upon request, to any beneficial
owner and any prospective purchaser of notes the information required under Rule
144A(d)(4) under the Securities Act during any period in which we are not
subject to Section 13 or 15(d) of the Exchange Act. Any such request should be
directed to our Secretary at 601 Clearwater Park Road, West Palm Beach, Florida
33401.

                                       127


                       PAXSON COMMUNICATIONS CORPORATION

                 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND
                          FINANCIAL STATEMENT SCHEDULE



                                                               PAGE
                                                               -----
                                                            
Report of Independent Certified Public Accountants..........   F-2
Consolidated Balance Sheets.................................   F-3
Consolidated Statements of Operations.......................   F-4
Consolidated Statement of Changes in Common Stockholders'
  Equity (Deficit)..........................................   F-5
Consolidated Statements of Cash Flows.......................   F-6
Notes to Consolidated Financial Statements..................   F-7


                                       F-1


               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders
of Paxson Communications Corporation:

     In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of operations, of changes in stockholders'
equity (deficit) and of cash flows present fairly, in all material respects, the
financial position of Paxson Communications Corporation and its subsidiaries at
December 31, 2001 and 2000, and the results of their operations and their cash
flows for each of the three years in the period ended December 31, 2001 in
conformity with accounting principles generally accepted in the United States of
America. These financial statements are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with auditing standards generally accepted in the United States of
America, which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

Miami, Florida
February 19, 2002

                                       F-2


                       PAXSON COMMUNICATIONS CORPORATION

                          CONSOLIDATED BALANCE SHEETS
                        (IN THOUSANDS EXCEPT SHARE DATA)



                                                                    DECEMBER 31,
                                                              ------------------------
                                                                 2001          2000
                                                              -----------   ----------
                                                                      
                                        ASSETS
Current assets:
  Cash and cash equivalents.................................  $    83,858   $   51,363
  Short-term investments....................................       12,150       50,001
  Restricted cash and short-term investments................           --       13,729
  Accounts receivable, less allowance for doubtful accounts
    of $3,635 and $4,167, respectively......................       29,728       39,528
  Program rights............................................       65,370       79,160
  Prepaid expenses and other current assets.................        5,667        2,065
                                                              -----------   ----------
         Total current assets...............................      196,773      235,846
Property and equipment, net.................................      147,641      174,649
Intangible assets, net......................................      912,147      949,614
Program rights, net of current portion......................       89,672      119,423
Investments in broadcast properties.........................       15,271       33,453
Other assets, net...........................................       22,171       13,062
                                                              -----------   ----------
         Total assets.......................................  $ 1,383,675   $1,526,047
                                                              ===========   ==========
 LIABILITIES, MANDATORILY REDEEMABLE PREFERRED STOCK AND COMMON STOCKHOLDERS' DEFICIT
Current liabilities:
  Accounts payable and accrued liabilities..................  $    25,858   $   21,828
  Accrued interest..........................................       15,220       10,464
  Obligations for program rights............................       76,169       88,336
  Obligations for cable distribution rights.................       12,325       19,840
  Deferred revenue from satellite distribution rights.......        6,414        5,114
  Current portion of bank financing.........................        2,899       15,966
                                                              -----------   ----------
         Total current liabilities..........................      138,885      161,548
Obligations for program rights, net of current portion......       43,396       79,341
Obligations for cable distribution rights, net of current
  portion...................................................          710          972
Deferred revenue from satellite distribution rights, net of
  current portion...........................................       11,776       14,076
Senior subordinated notes and bank financing................      526,281      389,510
Other liabilities...........................................       36,510           --
                                                              -----------   ----------
         Total liabilities..................................      757,558      645,447
                                                              -----------   ----------
Mandatorily redeemable preferred stock......................    1,164,160    1,080,389
                                                              -----------   ----------
Commitments and contingencies (Note 17).....................           --           --
                                                              -----------   ----------
Stockholders' deficit:
  Class A common stock $0.001 par value; one vote per share;
    215,000,000 shares authorized and 56,380,177 and
    55,872,152 shares issued and outstanding................           56           56
  Class B common stock, $0.001 par value; ten votes per
    share; 35,000,000 shares authorized and 8,311,639 shares
    issued and outstanding..................................            8            8
  Common stock warrants and call option.....................       68,384       68,384
  Stock subscription notes receivable.......................       (1,088)      (1,270)
  Addition paid-in capital..................................      512,194      499,304
  Deferred stock option compensation........................       (6,537)      (6,999)
  Accumulated deficit.......................................   (1,109,710)    (759,272)
  Accumulated other comprehensive loss......................       (1,350)          --
                                                              -----------   ----------
         Total stockholders' deficit........................     (538,043)    (199,789)
                                                              -----------   ----------
         Total liabilities, mandatorily redeemable preferred
           stock and common stockholders' deficit...........  $ 1,383,675   $1,526,047
                                                              ===========   ==========


   The accompanying notes are an integral part of the consolidated financial
                                  statements.

                                       F-3


                       PAXSON COMMUNICATIONS CORPORATION

                     CONSOLIDATED STATEMENTS OF OPERATIONS
                 (IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)



                                                           FOR THE YEARS ENDED DECEMBER 31,
                                                        ---------------------------------------
                                                           2001          2000          1999
                                                        -----------   -----------   -----------
                                                                           
Revenues..............................................  $   308,806   $   315,936   $   248,362
Less: agency commissions..............................      (43,480)      (44,044)      (34,182)
                                                        -----------   -----------   -----------
Net revenues..........................................      265,326       271,892       214,180
                                                        -----------   -----------   -----------
Expenses:
  Programming and broadcast operations (excluding
     stock-based compensation of $1,113, $351 and
     $432)............................................       42,457        38,633        33,139
  Program rights amortization.........................       84,808       100,324        91,799
  Selling, general and administrative (excluding
     stock-based compensation of $9,048, $13,515 and
     $16,382).........................................      120,000       137,804       135,063
  Time brokerage and affiliation fees.................        3,621         5,259        14,257
  Stock-based compensation............................       10,161        13,866        16,814
  Adjustment of programming to net realizable value...       66,992        24,400        70,499
  Restructuring charge related to Joint Sales
     Agreements.......................................       (1,229)        5,760            --
  Depreciation and amortization.......................       96,248        96,881        77,860
                                                        -----------   -----------   -----------
       Total operating expenses.......................      423,058       422,927       439,431
                                                        -----------   -----------   -----------
Operating loss........................................     (157,732)     (151,035)     (225,251)
Other income (expense):
  Interest expense....................................      (49,722)      (47,973)      (50,286)
  Interest income.....................................        4,538        14,022         8,570
  Other expenses, net.................................       (4,049)       (4,426)       (7,855)
  Gain on modification of program rights
     obligations......................................          932        10,221            --
  Gain on sale of broadcast assets....................       12,274         1,325        59,453
  Equity in loss of unconsolidated investment.........           --          (539)       (2,260)
                                                        -----------   -----------   -----------
Loss before income taxes and extraordinary item.......     (193,759)     (178,405)     (217,629)
Income tax (provision) benefit........................         (120)         (120)       57,257
                                                        -----------   -----------   -----------
Loss before extraordinary item........................     (193,879)     (178,525)     (160,372)
Extraordinary item....................................       (9,903)           --            --
                                                        -----------   -----------   -----------
Net loss..............................................     (203,782)     (178,525)     (160,372)
Dividends and accretion on redeemable preferred
  stock...............................................     (146,656)     (137,674)      (88,740)
Beneficial conversion feature on issuance of
  convertible preferred stock.........................           --       (75,130)      (65,467)
                                                        -----------   -----------   -----------
Net loss available to common stockholders.............  $  (350,438)  $  (391,329)  $  (314,579)
                                                        ===========   ===========   ===========
Basic and diluted loss per share:
  Loss before extraordinary item......................  $     (5.28)  $     (6.16)  $     (5.10)
  Extraordinary item..................................        (0.15)           --            --
                                                        -----------   -----------   -----------
  Net loss............................................  $     (5.43)  $     (6.16)  $     (5.10)
                                                        ===========   ===========   ===========
Weighted average shares outstanding...................   64,508,761    63,515,340    61,737,576
                                                        ===========   ===========   ===========


   The accompanying notes are an integral part of the consolidated financial
                                  statements.
                                       F-4


                       PAXSON COMMUNICATIONS CORPORATION

      CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                                 (IN THOUSANDS)


                                                     COMMON
                                                     STOCK        STOCK
                                  COMMON STOCK      WARRANTS   SUBSCRIPTION   ADDITIONAL     DEFERRED
                                -----------------   AND CALL      NOTES        PAID-IN     OPTION PLAN    ACCUMULATED
                                CLASS A   CLASS B    OPTION     RECEIVABLE     CAPITAL     COMPENSATION     DEFICIT
                                -------   -------   --------   ------------   ----------   ------------   -----------
                                                                                     
Balance at December 31,
 1998.........................    $53       $8      $ 1,582      $(2,813)      $318,935      $(16,728)    $  (53,364)
 Net loss.....................                                                                              (160,372)
 Stock issued for cable
   distribution rights........      1                                             8,478
 Stock issued for
   acquisition................                                                      500
 Issuance of common stock
   warrants and Class B common
   Stock call option..........                       66,663
 Deferred option plan
   compensation...............                                                   20,112       (20,112)
 Repayment of stock
   subscription receivable....                                     1,543
 Stock-based compensation.....                                                                 16,814
 Stock options exercised......      1                                             4,160
 Beneficial conversion feature
   on issuance of convertible
   preferred stock............                                                   65,467                      (65,467)
 Dividends on redeemable and
   convertible preferred
   stock......................                                                                               (79,005)
 Accretion on redeemable
   preferred stock............                                                                                (9,735)
                                  ---       --      -------      -------       --------      --------     -----------
Balance at December 31,
 1999.........................     55        8       68,245       (1,270)       417,652       (20,026)      (367,943)
 Net loss.....................                                                                              (178,525)
 Stock issued for
   acquisition................                                                      251
 Deferred option plan
   compensation...............                                                      700          (700)
 Stock-based compensation.....                          139                                    13,727
 Stock options exercised......      1                                             5,571
 Cumulative effect adjustment
   for beneficial conversion
   feature....................                                                   75,130                      (75,130)
 Dividends on redeemable and
   convertible preferred
   stock......................                                                                              (111,203)
 Accretion on redeemable
   preferred stock............                                                                               (26,471)
                                  ---       --      -------      -------       --------      --------     -----------
Balance at December 31,
 2000.........................     56        8       68,384       (1,270)       499,304        (6,999)      (759,272)
 Comprehensive loss:
     Net loss.................                                                                              (203,782)
     Unrealized loss on
       interest rate swap.....
     Comprehensive loss.......
 Deferred option plan
   compensation...............                                                    9,699        (9,699)
 Stock-based compensation.....                                                                 10,161
 Stock options exercised......                                                    3,191
 Repayment of stock
   subscription notes
   receivable.................                                       182
 Dividends on redeemable and
   convertible preferred
   stock......................                                                                              (117,056)
 Accretion on redeemable
   preferred stock............                                                                               (29,600)
                                  ---       --      -------      -------       --------      --------     -----------
Balance at December 31,
 2001.........................    $56       $8      $68,384      $(1,088)      $512,194      $ (6,537)    $(1,109,710)
                                  ===       ==      =======      =======       ========      ========     ===========



                                 ACCUMULATED        TOTAL
                                    OTHER       STOCKHOLDERS'
                                COMPREHENSIVE      EQUITY       COMPREHENSIVE
                                    LOSS          (DEFICIT)          LOSS
                                -------------   -------------   --------------
                                                       
Balance at December 31,
 1998.........................     $    --        $ 247,673
 Net loss.....................                     (160,372)      $(160,372)
                                                                  =========
 Stock issued for cable
   distribution rights........                        8,479
 Stock issued for
   acquisition................                          500
 Issuance of common stock
   warrants and Class B common
   Stock call option..........                       66,663
 Deferred option plan
   compensation...............                           --
 Repayment of stock
   subscription receivable....                        1,543
 Stock-based compensation.....                       16,814
 Stock options exercised......                        4,161
 Beneficial conversion feature
   on issuance of convertible
   preferred stock............                           --
 Dividends on redeemable and
   convertible preferred
   stock......................                      (79,005)
 Accretion on redeemable
   preferred stock............                       (9,735)
                                   -------        ---------
Balance at December 31,
 1999.........................          --           96,721
 Net loss.....................                     (178,525)      $(178,525)
                                                                  =========
 Stock issued for
   acquisition................                          251
 Deferred option plan
   compensation...............                           --
 Stock-based compensation.....                       13,866
 Stock options exercised......                        5,572
 Cumulative effect adjustment
   for beneficial conversion
   feature....................                           --
 Dividends on redeemable and
   convertible preferred
   stock......................                     (111,203)
 Accretion on redeemable
   preferred stock............                      (26,471)
                                   -------        ---------
Balance at December 31,
 2000.........................          --         (199,789)
 Comprehensive loss:
     Net loss.................                     (203,782)      $(203,782)
     Unrealized loss on
       interest rate swap.....      (1,350)          (1,350)         (1,350)
                                                                  ---------
     Comprehensive loss.......                                    $(205,132)
                                                                  =========
 Deferred option plan
   compensation...............                           --
 Stock-based compensation.....                       10,161
 Stock options exercised......                        3,191
 Repayment of stock
   subscription notes
   receivable.................                          182
 Dividends on redeemable and
   convertible preferred
   stock......................                     (117,056)
 Accretion on redeemable
   preferred stock............                      (29,600)
                                   -------        ---------
Balance at December 31,
 2001.........................     $(1,350)       $(538,043)
                                   =======        =========


   The accompanying notes are an integral part of the consolidated financial
                                  statements.

                                       F-5


                       PAXSON COMMUNICATIONS CORPORATION

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)



                                                              FOR THE YEARS ENDED DECEMBER 31,
                                                              ---------------------------------
                                                                2001        2000        1999
                                                              ---------   ---------   ---------
                                                                             
Cash flows from operating activities:
  Net loss..................................................  $(203,782)  $(178,525)  $(160,372)
  Adjustments to reconcile net loss to net cash used in
    operating activities:
    Depreciation and amortization...........................     96,248      96,881      77,860
    Stock-based compensation................................     10,161      13,866      16,814
    Loss on extinguishment of debt..........................      9,903          --          --
    Non-cash restructuring charge...........................     (1,229)      5,677          --
    Program rights amortization.............................     84,808     100,324      91,799
    Adjustment of programming to net realizable value.......     66,992      24,400      70,499
    Payments for cable distribution rights..................    (14,418)    (10,727)    (30,713)
    Non-cash barter revenue.................................     (2,168)     (1,102)         --
    Program rights payments and deposits....................   (130,566)   (128,288)   (125,916)
    Provision for doubtful accounts.........................      2,119       3,277       6,164
    Deferred income tax benefit.............................         --          --     (58,109)
    Loss on sale or disposal of assets......................      2,908       3,449       4,483
    Gain on sale of broadcast assets........................    (12,274)     (1,325)    (59,453)
    Equity in loss of unconsolidated investment.............         --         539       2,260
    Gain on modification of program rights obligations......       (932)     (9,230)         --
    Changes in assets and liabilities:
      Decrease (increase) in restricted cash and short-term
         investments........................................     13,729      (5,571)     17,638
      Decrease (increase) in accounts receivable............      3,593      (2,654)    (21,036)
      (Increase) decrease in prepaid expenses and other
         current assets.....................................       (959)        712         394
      Decrease in other assets..............................      6,531       9,393       1,425
      Increase (decrease) in accounts payable and accrued
         liabilities........................................      3,808         266     (13,837)
      Increase (decrease) in accrued interest...............      4,756       2,602      (1,708)
                                                              ---------   ---------   ---------
         Net cash used in operating activities..............    (60,772)    (76,036)   (181,808)
                                                              ---------   ---------   ---------
Cash flows from investing activities:
  Decrease (increase) in short-term investments.............     37,851      74,987    (124,987)
  Acquisitions of broadcasting properties, including DP
    Media, Inc..............................................    (15,679)    (74,180)   (171,586)
  (Increase) decrease in investments in broadcast
    properties..............................................         --      (2,957)     14,994
  Purchases of property and equipment.......................    (35,213)    (25,110)    (34,609)
  Proceeds from sales of broadcast assets...................     27,122      14,476     120,726
  Proceeds from sale of broadcast towers and property and
    equipment...............................................     34,396          --          --
  Collection of notes receivable from affiliate.............         --          --      30,644
  DP Media cash balance upon consolidation..................         --          --       4,310
                                                              ---------   ---------   ---------
         Net cash provided by (used in) investing
           activities.......................................     48,477     (12,784)   (160,508)
                                                              ---------   ---------   ---------
Cash flows from financing activities:
  Borrowings of long-term debt..............................    539,767      19,452      15,812
  Repayments of long-term debt..............................   (416,924)     (2,018)     (9,780)
  Redemption of preferred stock.............................    (59,102)         --          --
  Payment of loan origination costs.........................    (13,787)       (920)         --
  Preferred stock dividends.................................     (3,783)     (7,092)       (171)
  Debt extinguishment premium and costs.....................     (4,754)         --          --
  Proceeds from exercise of common stock options, net.......      3,191       5,572       4,161
  Repayment of stock subscription notes receivable..........        182          --       1,543
  Proceeds from issuance of exchangeable and convertible
    preferred stock, net....................................         --          --     406,500
                                                              ---------   ---------   ---------
         Net cash provided by financing activities..........     44,790      14,994     418,065
                                                              ---------   ---------   ---------
Increase (decrease) in cash and cash equivalents............     32,495     (73,826)     75,749
Cash and cash equivalents, beginning of year................     51,363     125,189      49,440
                                                              ---------   ---------   ---------
Cash and cash equivalents, end of year......................  $  83,858   $  51,363   $ 125,189
                                                              =========   =========   =========


   The accompanying notes are an integral part of the consolidated financial
                                  statements.

                                       F-6


                       PAXSON COMMUNICATIONS CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. NATURE OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

BASIS OF PRESENTATION

     Paxson Communications Corporation (the "Company"), a Delaware corporation,
was organized in 1993. The Company owns and operates television stations
nationwide, and on August 31, 1998, launched PAX TV. PAX TV is the brand name
for the programming that the Company broadcasts through its owned, operated and
affiliated television stations, as well as certain cable and satellite system
affiliates.

     The consolidated financial statements include the accounts of the Company
and its subsidiaries and those of DP Media, Inc. ("DP Media"), a company
acquired in June 2000. Prior to acquisition, DP Media was beneficially owned by
family members of Lowell W. Paxson ("Mr. Paxson"), the Company's Chairman and
principal shareholder. The financial position and results of operations of DP
Media have been included in the Company's consolidated financial statements
since September 1999 (see Note 4). All significant inter-company balances and
transactions have been eliminated.

CASH AND CASH EQUIVALENTS

     Cash and cash equivalents include highly liquid investments with original
maturities of three months or less and are stated at cost.

SHORT-TERM INVESTMENTS

     Short-term investments consist of marketable government securities with
original maturities of one year or less. All short-term investments are
classified as trading and are recorded at fair value based upon quoted market
prices.

RESTRICTED CASH AND SHORT-TERM INVESTMENTS

     Restricted cash and short-term investments at December 31, 2000 consist of
cash and other liquid securities held in an escrow account for the payment of
principal and interest due in connection with the Company's former senior credit
facility (see Note 10).

PROPERTY AND EQUIPMENT

     Purchases of property and equipment, including additions and improvements
and expenditures for repairs and maintenance that significantly add to
productivity or extend the economic lives of assets, are capitalized at cost and
depreciated using the straight line method over their estimated useful lives as
follows (see Note 6):

                                                           
Broadcasting towers and equipment...........................     6-30 years
Office furniture and equipment..............................     5-10 years
Buildings and building improvements.........................    15-40 years
Leasehold improvements......................................  Term of lease
Aircraft, vehicles and other................................        5 years



     Maintenance, repairs, and minor replacements are charged to expense as
incurred.

                                       F-7

                       PAXSON COMMUNICATIONS CORPORATION

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

INTANGIBLE ASSETS

     Intangible assets are recorded at cost and amortized using the straight
line method over their estimated useful lives as follows (see Note 7):

                                                           
FCC licenses and goodwill...................................           25 years
Cable distribution rights...................................  Generally 7 years
Covenants not to compete....................................  Generally 3 years
Favorable lease and other contracts.........................      Contract term



     As further described below under "New Accounting Pronouncements", effective
January 1, 2002, the Company will no longer amortize Federal Communications
Commission ("FCC") licenses and goodwill.

PROGRAM RIGHTS

     The Company's programming consists of both originally developed programs
and syndicated programs that have previously aired on other networks. The
Company generally has unlimited exclusive domestic broadcast rights for its
original programs. For syndicated programs, the Company licenses the exclusive
domestic distribution rights for a fixed cost over the license term. Program
rights are carried at the lower of unamortized cost or estimated net realizable
value. Program rights and the related liabilities are recorded at the
contractual amounts when the programming is available to air. Original
programming generally is amortized over three years. Syndicated programming
rights are amortized over the licensing agreement term using the greater of the
straight line per run or straight line over the license term method. The
estimated costs of programming which will be amortized during the next year are
included in current assets; program rights obligations which become due within
the next year are included in current liabilities.

     The Company periodically evaluates the net realizable value of its program
rights based on anticipated future usage of programming and the anticipated
future ratings and related advertising revenue to be generated on a daypart
basis. The Company also evaluates whether future revenues will be sufficient to
recover the cost of programs the Company is committed to purchase in the future
and, if estimated future revenues are insufficient, the Company accrues a loss
related to its programming commitments. As further described in Note 8, during
the years ended December 31, 2001, 2000 and 1999, the Company recorded charges
of approximately $67.0 million, $24.4 million and $70.5 million, respectively,
related to the write-down of program rights to their estimated net realizable
value and losses on programming commitments.

CABLE DISTRIBUTION RIGHTS

     The Company has agreements under which it receives cable carriage of its
PAX TV programming on certain cable systems in markets not currently served by a
Company owned television station. The Company pays fees based on the number of
cable television subscribers reached and in certain instances provides local
advertising airtime during PAX TV programming. Cable distribution rights
generally are recorded at the present value of the Company's future obligation
when the Company receives affidavits of subscribers delivered. Cable
distribution rights are amortized over seven years using the straight line
method. Obligations for cable distribution rights which will be paid within the
next year are included in current liabilities.

SATELLITE DISTRIBUTION RIGHTS

     The Company has entered into agreements with satellite television providers
for carriage on their systems in exchange for advertising credits. The Company
has recorded satellite distribution rights based on the estimated value of the
advertising credits at prevailing rates. Satellite distribution rights are
amortized over five to seven years using the straight line method. Obligations
for satellite distribution rights are recognized as

                                       F-8

                       PAXSON COMMUNICATIONS CORPORATION

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

advertising revenue when advertising credits are utilized. An estimate of the
advertising credit that will be utilized within the next year is included in
current liabilities.

INVESTMENTS IN BROADCAST PROPERTIES

     Investments in broadcast properties represent the Company's financing of
television station acquisitions by third party licensees, purchase options or
other investments in entities owning television broadcasting stations or
construction permits. In connection with certain of these agreements, the
Company has obtained the right to provide programming for the related stations
pursuant to time brokerage agreements ("TBAs") and has options to purchase
certain of the related station assets and FCC licenses at various amounts and
terms (see Note 17). Included in other expenses, net for 1999 is a loss of $4.5
million, reflecting the Company's estimate of advances and costs related to the
planned acquisition of a television station which were determined to be
unrecoverable due to the termination of the acquisition contract.

LONG-LIVED ASSETS

     The Company reviews long-lived assets, identifiable intangibles and
goodwill and reserves for impairment whenever events or changes in circumstances
indicate that, based on estimated undiscounted future cash flows, the carrying
amount of the assets may not be fully recoverable. It is possible that the
estimated life of certain long-lived assets will be reduced significantly in the
near term due to the anticipated industry migration from analog to digital
broadcasting. If and when the Company becomes aware of such a reduction of
useful lives, depreciation expense will be adjusted prospectively to ensure
assets are fully depreciated upon migration. See "New Accounting Pronouncements"
for additional information.

DERIVATIVE FINANCIAL INSTRUMENTS

     The Company accounts for derivative financial instruments in accordance
with SFAS No. 133 as amended by SFAS No. 137 and SFAS No. 138, "Accounting for
Derivative Instruments and Hedging Activities" ("SFAS 133"). SFAS 133, as
amended, establishes accounting and reporting standards requiring that every
derivative instrument (including certain derivative instruments embedded in
other contracts) be recorded in the balance sheet as either an asset or
liability measured at its fair value. SFAS 133 requires that changes in the
derivative instrument's fair value be recognized currently in earnings unless
specific hedge accounting criteria are met. Special accounting for qualifying
hedges allows a derivative instrument's gains and losses to offset related
results on the hedged item in the statement of operations, to the extent
effective, and requires that a company must formally document, designate, and
assess the effectiveness of transactions that receive hedge accounting.

     The Company utilizes an interest rate swap to manage the impact of interest
rate changes on the Company's senior credit facility borrowings. Under the
interest rate swap, the Company agrees with the other party to exchange, at
specified intervals, the difference between fixed-rate and floating-rate
interest amounts calculated by reference to an agreed notional principal amount.
Income or expense under these instruments is recorded on an accrual basis as an
adjustment to the yield of the underlying exposures over the periods covered by
the contracts. If an interest rate swap is terminated early, any resulting gain
or loss is deferred and amortized as an adjustment of the cost of the underlying
exposure position over the remaining periods originally covered by the
terminated swap. If all or part of an underlying position is terminated, the
related pro-rata portion of any unrecognized gain or loss on the swap is
recognized in income at that time as part of the gain or loss on the
termination.

OTHER COMPREHENSIVE LOSS

     Other comprehensive loss for the year ended December 31, 2001 includes the
unrealized loss totaling approximately $1.4 million on the Company's interest
rate swap accounted for as a cash flow hedge. No
                                       F-9

                       PAXSON COMMUNICATIONS CORPORATION

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

income tax benefit has been recorded due to uncertainty regarding realization of
the Company's deferred tax assets. No reclassification adjustments were recorded
in 2001. There were no components of other comprehensive loss in 2000 and 1999.

REVENUE RECOGNITION

     Revenue is recognized as commercial spots are aired and ratings guarantees
to advertisers, as applicable, are achieved.

TIME BROKERAGE AGREEMENTS

     The Company operates certain stations under TBAs whereby the Company has
agreed to provide the station with programming and sells and retains all
advertising revenue during such programming. The broadcast station licensee
retains responsibility for ultimate control of the station in accordance with
FCC policies. The Company pays a fixed fee to the station owner as well as
certain expenses of the station and performs other functions. The financial
results of TBA operated stations are included in the Company's statements of
operations from the date of commencement of the TBA.

STOCK-BASED COMPENSATION

     Employee stock options are accounted for using the intrinsic value method.
Stock-based compensation to non-employees is accounted for using the fair value
method. The Company also provides disclosure of certain pro forma information as
if employee stock options were accounted for using the fair value method (see
Note 13).

INCOME TAXES

     The Company records deferred income taxes using the liability method. Under
the liability method, deferred tax assets and liabilities are recognized for the
expected future tax consequences of temporary differences between the financial
statement and income tax bases of the Company's assets and liabilities. An
allowance is recorded, based upon currently available information, when it is
more likely than not that any or all of a deferred tax asset will not be
realized. The Company's income tax provision consists of taxes currently
payable, if any, and the change during the year of deferred tax assets and
liabilities.

PER SHARE DATA

     Basic and diluted loss per share was computed by dividing the net loss less
dividends and accretion and the effect of beneficial conversion features on
redeemable preferred stock by the weighted average number of common shares
outstanding during the period. Because of losses, the effect of stock options
and warrants is antidilutive. Accordingly, the Company's presentation of diluted
earnings per share is the same as that of basic earnings per share.

     The following securities, which could potentially dilute earnings per share
in the future, were not included in the computation of diluted earnings per
share, because to do so would have been antidilutive for the periods presented
(in thousands):



                                                               2001     2000     1999
                                                              ------   ------   ------
                                                                       
Stock options outstanding...................................  12,652   10,974   11,991
Class A common stock warrants outstanding...................  32,428   32,428   32,428
Class A common stock reserved under convertible
  securities................................................  38,500   37,893   37,342
                                                              ------   ------   ------
                                                              83,580   81,295   81,761
                                                              ======   ======   ======


                                       F-10

                       PAXSON COMMUNICATIONS CORPORATION

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

USE OF ESTIMATES

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

RECLASSIFICATIONS

     Certain reclassifications have been made to prior year's financial
statements to conform with the 2001 presentation.

NEW ACCOUNTING PRONOUNCEMENTS

     In June 2001, the Financial Accounting Standards Board issued Statements of
Financial Accounting Standards No. 141, "Business Combinations" ("SFAS 141"),
and No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142"). SFAS 141
addresses financial accounting and reporting for business combinations and
requires all business combinations to be accounted for using the purchase method
of accounting. SFAS 141 is effective for all business combinations initiated
after June 30, 2001. The Company does not believe adoption of SFAS 141 will have
a material impact on its financial position, results of operations or cash
flows.

     SFAS 142 addresses financial accounting and reporting for acquired goodwill
and other intangible assets. Under SFAS 142, goodwill and intangible assets that
have indefinite lives will not be amortized but rather will be tested at least
annually for impairment. Intangible assets that have finite useful lives will
continue to be amortized over their useful lives. SFAS 142 is effective for
fiscal years beginning after December 15, 2001. Impairment losses for goodwill
and other indefinite-lived intangible assets that arise due to the initial
application of SFAS 142 are to be reported as resulting from a change in
accounting principle. The Company will adopt SFAS 142 effective January 1, 2002.
The Company is currently assessing the impact of adopting SFAS 142, however it
does not anticipate a material impairment loss, if any, resulting from adoption.
Upon adoption of SFAS 142, the Company will no longer amortize goodwill and FCC
license intangibles (which the Company believes have indefinite lives), which
totaled approximately $842.7 million, net of accumulated amortization of $140.3
million at December 31, 2001. Under existing accounting standards, these assets
are being amortized over 25 years. Amortization expense related to goodwill and
FCC licenses totaled approximately $39.5 million for the year ended December 31,
2001.

     In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets" ("SFAS 144"). SFAS 144 supersedes
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and Long-Lived
Assets to be Disposed of" and Accounting Principles Board Opinion ("APB") No.
30, "Reporting the Results of Operations -- Reporting the Effects of the
Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently
Occurring Events and Transactions." SFAS 144 establishes a single accounting
model for assets to be disposed of by sale whether previously held and used or
newly acquired. SFAS 144 retains the provisions of APB No. 30 for presentation
of discontinued operations in the income statement, but broadens the
presentation to include a component of an entity. SFAS 144 is effective for
fiscal years beginning after December 15, 2001. The Company does not believe
that the adoption of SFAS 144 will have a material impact on its financial
position or results of operations.

2. NBC TRANSACTION:

     Effective September 15, 1999 (the "Issue Date"), the Company entered into
an Investment Agreement (the "Investment Agreement") with National Broadcasting
Company, Inc. ("NBC"), pursuant to which

                                       F-11

                       PAXSON COMMUNICATIONS CORPORATION

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NBC purchased shares of convertible exchangeable preferred stock (the "Series B
Convertible Preferred Stock"), and common stock purchase warrants from the
Company for an aggregate purchase price of $415 million. Further, Mr. Paxson and
certain entities controlled by Mr. Paxson granted NBC the right (the "Call
Right") to purchase all (but not less than all) 8,311,639 shares of Class B
Common Stock of the Company beneficially owned by Mr. Paxson.

     The common stock purchase warrants issued to NBC consist of a warrant to
purchase up to 13,065,507 shares of Class A Common Stock at an exercise price of
$12.60 per share ("Warrant A") and a warrant to purchase up to 18,966,620 shares
of Class A Common Stock ("Warrant B") at an exercise price equal to the average
of the closing sale prices of the Class A Common Stock for the 45 consecutive
trading days ending on the trading day immediately preceding the warrant
exercise date (provided that such price shall not be more than 17.5% higher or
17.5% lower than the six month trailing average closing sale price), subject to
a minimum exercise price during the first three years after the Issue Date of
$22.50 per share. The Warrants are exercisable through September 2009 subject to
certain conditions and limitations.

     The Call Right has a per share exercise price equal to the higher of (i)
the average of the closing sale prices of the Class A Common Stock for the 45
consecutive trading days ending on the trading day immediately preceding the
exercise of the Call Right (provided that such price shall not be more than
17.5% higher or 17.5% lower than the six month trailing average closing sale
prices), and (ii) $22.50 for any exercise of the Call Right on or prior to the
third anniversary of the Issue Date and $20.00 for any exercise of the Call
Right thereafter. The owners of the shares which are subject to the Call Right
may not transfer such shares prior to the sixth anniversary of the Issue Date,
and may not convert such shares into any other securities of the Company
(including shares of Class A Common Stock). Exercise of the Call Right is
subject to compliance with applicable provisions of the Communications Act of
1934, as amended (the "Communications Act"), and the rules and regulations of
the FCC. The Call Right may not be exercised until Warrant A and Warrant B have
been exercised in full. The Call Right expires on the tenth anniversary of the
Issue Date, or prior thereto under certain circumstances.

     The Company valued the common stock purchase warrants issued to NBC and the
Call Right at $66.7 million. The Company recorded this value along with
transaction costs as a reduction of the face value of the Series B Convertible
Preferred Stock. Such discount is being accreted as preferred stock dividends
over three years using the interest method.

     The Series B Convertible Preferred Stock was issued with a conversion price
per share that was less than the closing price of the Class A Common Stock at
the Issue Date. As a result, the Company recognized a beneficial conversion
feature in connection with the issuance of the stock equal to the difference
between the closing price and the conversion price multiplied by the number of
shares issuable upon conversion of the Series B Convertible Preferred Stock. The
amount of the beneficial conversion feature calculated for the 1999 fiscal year
totaling approximately $65.5 million was reflected in the accompanying statement
of operations as a preferred stock dividend during 1999 and allocated to
additional paid-in capital in the accompanying balance sheet because the
preferred stock was immediately convertible. In November 2000, the Emerging
Issues Task Force of the Financial Accounting Standards Board reached a
consensus regarding the accounting for beneficial conversion features which
required the Company to recalculate the beneficial conversion feature utilizing
the accounting conversion price as opposed to the stated conversion price used
for 1999. This change resulted in a cumulative catch-up adjustment totaling
approximately $75.1 million which was recorded as a preferred stock dividend in
the fourth quarter of 2000.

     The Investment Agreement requires the Company to obtain the consent of NBC
or its permitted transferee with respect to certain corporate actions, as set
forth in the Investment Agreement, and grants NBC certain rights with respect to
the operations of the Company. NBC was also granted certain demand and piggyback
registration rights with respect to the shares of Class A Common Stock issuable
upon conversion of

                                       F-12

                       PAXSON COMMUNICATIONS CORPORATION

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

the Series B Convertible Preferred Stock (or conversion of any exchange
debentures issued in exchange therefor), exercise of the Warrants or conversion
of the Class B Common Stock subject to the Call Right.

     NBC, the Company, Mr. Paxson and certain entities controlled by Mr. Paxson
also entered into a Stockholder Agreement, pursuant to which, if permitted by
the Communications Act and FCC rules and regulations, the Company may nominate
persons named by NBC for election to the Company's board of directors and Mr.
Paxson and his affiliates have agreed to vote their shares of common stock in
favor of the election of such persons as directors of the Company. Should no NBC
nominee be serving as a member of the Company's board of directors, then NBC may
appoint two observers to attend all board meetings. In December 1999 and March
2000, the Company's Board of Directors elected three NBC nominees to fill newly
created vacancies on the board. At the Company's Annual Meeting of Stockholders
in May 2000, all of the Company's directors, including the NBC nominees were
re-elected for terms of one to three years. In November and December of 2001,
the three Directors nominated by NBC resigned. The Stockholder Agreement further
provides that the Company shall not, without the prior written consent of NBC,
enter into certain agreements or adopt certain plans, as set forth in the
Stockholder Agreement, which would be breached or violated upon the acquisition
of the Company securities by NBC or its affiliates or would otherwise restrict
or impede the ability of NBC or its affiliates to acquire additional shares of
capital stock of the Company.

     The Company and NBC have entered into a number of agreements affecting the
Company's business operations, including an agreement under which NBC provides
network sales, marketing and research services for the Company's PAX TV Network,
and Joint Sales Agreements ("JSA") between the Company's stations and NBC's
owned and operated stations serving the same markets. Pursuant to the terms of
the JSAs, the NBC stations sell all non-network spot advertising of the
Company's stations and receive commission compensation for such sales and the
Company's stations may agree to carry one hour per day of the NBC station's
syndicated or news programming. Certain Company station operations, including
sales operations, are integrated with the corresponding functions of the related
NBC station and the Company reimburses NBC for the cost of performing these
operations. During the years ended December 31, 2001 and 2000, the Company paid
or accrued amounts due to NBC totaling approximately $19.1 million and $17.8
million, respectively, for commission compensation and cost reimbursements
incurred in conjunction with these agreements.

     In December 2001, the Company commenced a binding arbitration proceeding
against NBC. The Company also made two filings with the FCC, one of which
requests a declaratory ruling as to whether conduct by NBC has caused NBC to
have an attributable interest in the Company in violation of FCC rules or has
infringed upon the Company's rights as an FCC license holder. The second FCC
filing seeks to deny FCC approval of NBC's acquisition of Telemundo
Communications Group, Inc. (the "Telemundo Group") television stations. See Note
17 for further discussion.

3. JSA RESTRUCTURING:

     In connection with the NBC strategic relationship, the Company entered into
JSAs with certain of NBC's owned and operated stations in 1999 and 2000. During
the fourth quarter of 2000, the Company approved a plan to restructure its
television station operations by entering into JSAs primarily with NBC affiliate
stations in each of the Company's remaining non-JSA markets. To date, the
Company has entered into JSAs for 55 of its television stations, 19 of which
entered into JSAs prior to adoption of the formal JSA restructuring plan. Under
the JSA structure, the Company generally terminates its station sales staff. The
JSA partner then provides local and national spot advertising sales management
and representation to the Company station and integrates and co-locates the
Company station operations. The Company's restructuring plan included two major
components: (1) termination of 226 station sales and administrative employees;
and (2) exiting Company studio and sales office leased properties. These
restructuring activities resulted in a charge of approximately $5.8 million in
the fourth quarter of 2000 consisting of $2.7 million of termination

                                       F-13

                       PAXSON COMMUNICATIONS CORPORATION

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

benefits and $3.1 million of costs associated with exiting leased properties
which will no longer be utilized upon implementation of the JSAs. Through
December 31, 2001, the Company has paid termination benefits to 76 employees
totaling approximately $1.5 million and paid lease termination costs of
approximately $0.9 million, which were charged against the restructuring
reserve. The Company has made substantial progress in executing its
restructuring plan, however due to events outside the Company's control
including the events of September 11, 2001, the Company was unable to fully
complete the plan in 2001. Although the Company has completed the integration of
its sales function at most of the JSA locations, the Company has been unable to
complete the integration of its master control operations at certain JSA
stations in 2001. The Company now expects to substantially complete the JSA
restructuring by the end of the third quarter of 2002, except for contractual
lease obligations for closed locations, which continue through 2008.

     To date the Company has been unable to reach an agreement with a JSA
partner for four of the stations included in its restructuring plan. Although
the Company intends to continue pursuing JSAs for these stations, the Company is
currently unable to determine the ultimate timing of these JSAs. Accordingly, in
the fourth quarter of 2001, the Company reversed approximately $1.2 million of
restructuring reserves primarily related to these four stations and certain
other reserves which were no longer required.

     The following summarizes the activity in the Company's restructuring
reserves for the year ended December 31, 2001 (in thousands):



                                          BALANCE           CASH      AMOUNTS CREDITED TO        BALANCE
                                     DECEMBER 31, 2000   DEDUCTIONS   COSTS AND EXPENSES    DECEMBER 31, 2001
                                     -----------------   ----------   -------------------   -----------------
                                                                                
Accrued liabilities:
  Lease costs......................       $3,091          $  (944)          $  (430)             $1,717
  Severance........................        2,586           (1,405)             (799)                382
                                          ------          -------           -------              ------
                                          $5,677          $(2,349)          $(1,229)             $2,099
                                          ======          =======           =======              ======


     During 2000, the Company recognized severance and lease termination costs
related to JSAs entered into prior to management's approval of the restructuring
plan totaling approximately $942,000 which are included in selling, general and
administrative expenses.

4. CERTAIN TRANSACTIONS WITH RELATED PARTIES:

     In addition to the transactions with NBC described in Note 2, the Company
has entered into certain operating and financing transactions with related
parties as described below.

DP MEDIA, INC.

     In June 2000, the Company completed the acquisition of DP Media for
aggregate consideration of $113.5 million, $106.0 million of which had
previously been advanced by the Company during 1999. DP Media's assets included
a 32% equity interest in a limited liability company controlled by the former
stockholders of DP Media, which owns television station WWDP in Norwell,
Massachusetts. The Company is entitled to receive a 45% distribution of the
proceeds upon sale of the station which, pursuant to the terms of the limited
liability company agreement, must be sold by March 2003. The Company allocated
the aggregate purchase price of DP Media to the assets acquired and liabilities
assumed based on their relative fair market values. The assets, liabilities and
results of operations of WWDP are no longer consolidated within the financial
statements of the Company. The Company accounts for its equity interest in WWDP
utilizing the equity method of accounting and has recorded its equity investment
in WWDP within other assets.

     During the third quarter of 1999, the Company advanced funds to DP Media
which were utilized to fund operating cash flow needs. As a result of the
Company's significant operating relationships with DP Media and its funding of
DP Media's operating cash flow needs, the assets and liabilities of DP Media,
together with their

                                       F-14

                       PAXSON COMMUNICATIONS CORPORATION

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

results of operations were included in the Company's consolidated financial
statements since September 30, 1999. In consolidating DP Media, at December 31,
1999, the Company recorded current assets of approximately $4.3 million, current
liabilities of approximately $1.3 million, property, plant and equipment of
approximately $22.2 million, intangible assets of approximately $72.2 million
and other assets of approximately $2.6 million.

     In August 1999, a subsidiary of DP Media repaid notes receivable to the
Company of $15.5 million and $15.0 million in connection with its acquisition of
WBPX in Boston and WHPX in Hartford.

     Prior to the acquisition of DP Media, the Company and DP Media had entered
into various operating agreements including affiliation, services and commercial
representation and sales agreements. Subsequent to the consolidation of DP Media
in September 1999, all intercompany transactions with DP Media have been
eliminated. Prior to consolidation, the Company recorded time brokerage and
affiliation fees related to stations owned by DP Media totaling approximately
$13.6 million in 1999. Additionally, during 1999, the Company recorded
commission revenue of $404,000 under its services and commercial representation
agreements with DP Media.

THE CHRISTIAN NETWORK, INC.

     The Company has entered into several agreements with The Christian Network,
Inc. and certain of its for profit subsidiaries (individually and collectively
referred to herein as "CNI"). The Christian Network, Inc. is a section 501(c)(3)
not-for-profit corporation to which Mr. Paxson, the majority stockholder of the
Company, has been a substantial contributor and of which he was a member of the
Board of Stewards through 1993.

     In connection with the NBC transactions described elsewhere herein, the
Company entered into a Master Agreement for Overnight Programming, Use of
Digital Capacity and Public Interest Programming with CNI, pursuant to which the
Company granted CNI, for a term of 50 years (with automatic ten year renewals,
subject to certain limited conditions), certain rights to continue broadcasting
CNI's programming on Company stations during the hours of 1:00 a.m. to 6:00 a.m.
When digital programming begins, the Company will make a digital channel
available for CNI's use for 24 hour CNI digital programming.

     License Agreement.  The Company and CNI entered into a three year agreement
in March 1999 under which the Company pays license fees to CNI to broadcast
CNI's religious programming. During the years ended December 31, 2001, 2000 and
1999, the Company paid license fees in connection with this agreement of
approximately $215,000, $210,000 and $138,000, respectively.

     CNI Agreement.  The Company and CNI entered into an agreement in May 1994
(the "CNI Agreement") under which the Company agreed that, if the tax exempt
status of CNI were jeopardized by virtue of its relationships with the Company
and its subsidiaries, the Company would take certain actions to ensure that
CNI's tax exempt status would no longer be so jeopardized. Such steps could
include, but not be limited to, rescission of one or more transactions or
payment of additional funds by the Company. If the Company's activities with CNI
are consistent with the terms governing their relationship, the Company believes
that it will not be required to take any actions under the CNI Agreement.
However, there can be no assurance that the Company will not be required to take
any actions under the CNI Agreement at a material cost to the Company.

     Worship Channel Studio.  CNI and the Company have contracted for the
Company to lease CNI's television production and distribution facility, the
Worship Channel Studio. The Company utilizes this facility primarily as its
network operations center and originates the PAX TV network signal from this
location. During the years ended December 31, 2001, 2000 and 1999, the Company
incurred rental charges in connection with this agreement of $205,000, $199,000
and $195,000, respectively.

                                       F-15

                       PAXSON COMMUNICATIONS CORPORATION

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

AIRCRAFT LEASE

     During 1997, the Company entered into a three year aircraft lease with a
company which is owned by Mr. Paxson. The lease is for a Boeing 727 aircraft
with monthly payments of approximately $64,000. Effective, January 1, 2001 the
Company no longer leases the aircraft. In connection with such lease, the
Company incurred rental costs of approximately $759,000 and $763,000 during the
years ended December 31, 2000 and 1999, respectively.

STOCKHOLDERS AGREEMENT

     Certain entities controlled by Mr. Paxson are parties to a stockholders
agreement whereby they were granted registration rights with respect to shares
of common stock they hold.

5. ACQUISITIONS AND DIVESTITURES:

     During 2001, the Company acquired the assets of three television stations
for total consideration of approximately $30.8 million of which $16.1 million
was paid in prior years. Additionally, the Company paid approximately $1.0
million to acquire the minority interest in a station acquired in 1998. During
2000, in addition to the acquisition of DP Media described in Note 4, the
Company acquired the assets of four television stations (including construction
permits) for total consideration of approximately $68.7 million of which $10.9
million was paid in prior years. During 1999, the Company acquired the assets of
five television stations (including construction permits), for total
consideration of approximately $65.6 million. In February 1999, the Company also
completed its acquisition of WCPX in Chicago by transferring its interest in
KWOK in San Francisco as partial consideration for WCPX. In connection with the
transfer of ownership of KWOK, the Company recognized a pre-tax gain of
approximately $23.8 million.

     During 2001, the Company sold interests in five stations for aggregate
consideration of approximately $31.9 million and realized pre-tax gains of
approximately $12.3 million on these sales. During 2000, the Company sold
interests in four stations for aggregate consideration of approximately $14.5
million and realized pre-tax gains of approximately $1.3 million on these sales.
During 1999, the Company sold its interests in four stations for aggregate
consideration of approximately $61 million and realized pre-tax gains of
approximately $18.7 million on these sales. In addition, in February 1999, the
Company sold its 30% interest in The Travel Channel, L.L.C. ("The Travel
Channel") for aggregate consideration of approximately $55 million and realized
a pre-tax gain of approximately $17 million. The results of operations of The
Travel Channel have been included in the Company's December 31, 1999
consolidated statement of operations using the equity method of accounting
through the date of sale.

6. PROPERTY AND EQUIPMENT:

     Property and equipment consist of the following (in thousands):



                                                                2001        2000
                                                              ---------   ---------
                                                                    
Broadcasting towers and equipment...........................  $ 231,797   $ 229,414
Office furniture and equipment..............................     19,854      20,012
Buildings and leasehold improvements........................     17,610      21,446
Land and land improvements..................................      1,280       3,417
Aircraft, vehicles and other................................      3,539       3,905
                                                              ---------   ---------
                                                                274,080     278,194
Accumulated depreciation....................................   (126,439)   (103,545)
                                                              ---------   ---------
Property and equipment, net.................................  $ 147,641   $ 174,649
                                                              =========   =========


                                       F-16

                       PAXSON COMMUNICATIONS CORPORATION

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Depreciation expense aggregated approximately $37.1 million, $37.7 million
and $28.4 million for the years ended December 31, 2001, 2000 and 1999,
respectively. In connection with restructuring activities described in Note 3,
the Company identified certain leasehold improvements and office furniture and
equipment which will no longer be used in its operations upon exiting certain
leased properties. The Company has prospectively shortened the estimated
remaining useful lives through the expected disposal date of these assets
resulting in approximately $3.1 million and $2.1 million of additional
depreciation expense in 2001 and 2000, respectively.

     As described in Note 10, the Company's senior credit facility is secured by
all assets of the Company, including property and equipment.

7. INTANGIBLE ASSETS:

     Intangible assets consist of the following (in thousands):



                                                                 2001         2000
                                                              ----------   ----------
                                                                     
FCC licenses and goodwill...................................  $  982,941   $  969,052
Cable distribution rights...................................     106,957      101,172
Satellite distribution rights...............................      20,345       20,345
Covenants not to compete....................................       3,484        4,364
Favorable lease and other contracts.........................       2,028        2,003
                                                              ----------   ----------
                                                               1,115,755    1,096,936
Accumulated amortization....................................    (203,608)    (147,322)
                                                              ----------   ----------
Intangible assets, net......................................  $  912,147   $  949,614
                                                              ==========   ==========


     Amortization expense related to intangible assets aggregated $59.1 million,
$59.2 million and $49.5 million for the years ended December 31, 2001, 2000 and
1999, respectively. As discussed in Note 1, upon adoption of SFAS 142 on January
1, 2002, the Company will no longer amortize FCC licenses and goodwill.

8. PROGRAM RIGHTS:

     Program rights consist of the following (in thousands):



                                                                2001        2000
                                                              ---------   ---------
                                                                    
Program rights..............................................  $ 394,847   $ 512,804
Accumulated amortization....................................   (239,805)   (314,221)
                                                              ---------   ---------
                                                                155,042     198,583
Less: current portion.......................................    (65,370)    (79,160)
                                                              ---------   ---------
Program rights, net.........................................  $  89,672   $ 119,423
                                                              =========   =========


     Program rights amortization expense aggregated $84.8 million, $100.3
million and $91.8 million for the years ended December 31, 2001, 2000 and 1999,
respectively.

     In furtherance of the Company's strategy to increase its audience ratings
through the development of PAX TV original programming, in the third quarter of
2001, the Company decided to gradually phase the syndicated program Touched By
An Angel ("Touched") out of primetime and into the daytime period. Touched will
be replaced in primetime with original programming. Based on this change, the
Company adjusted its estimate of the anticipated future usage of Touched and
certain other syndicated programs and the related advertising revenues expected
to be generated and recognized a charge of approximately $67.0 million related
to the net realizable value of these programming assets and related programming
commitments. The charge includes a $22.2 million accrued loss related to
programming commitments for the 2001/2002 season

                                       F-17

                       PAXSON COMMUNICATIONS CORPORATION

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

of Touched currently airing on CBS which is included in other liabilities in the
accompanying December 31, 2001 balance sheet. The Company is contractually
obligated to license future seasons of Touched if the series is renewed by CBS.
Additional programming losses, if any, will be recorded at the time the Company
becomes committed to license future seasons of Touched. In addition, in 2000 and
1999, respectively, the Company adjusted the carrying value of certain of its
program rights to net realizable value resulting in an expense of approximately
$24.4 million and $70.5 million, respectively.

     In March 2000, the Company gave up its rights to air certain syndicated
programming, in exchange for approximately $4.9 million in cash and forgiveness
of the remaining programming rights payments due under the original programming
agreement. This transaction resulted in a gain of approximately $9.9 million. In
September 2000, the Company assigned certain other programming rights to a third
party who assumed the Company's remaining payment obligation. In connection with
this transaction, $2.8 million of deferred gain was recorded. The deferred gain
is being amortized over the term of the third party's assumed payments as the
Company remains liable should the third party default. Approximately $932,000
and $311,000 of this deferred gain was recognized into income in 2001 and 2000,
respectively.

     As of December 31, 2001, the Company's programming contracts require
collective payments by the Company of approximately $162.7 million as follows
(in thousands):



                                                  OBLIGATIONS FOR     PROGRAM
                                                      PROGRAM         RIGHTS
                                                      RIGHTS        COMMITMENTS    TOTAL
                                                  ---------------   -----------   --------
                                                                         
2002............................................     $ 76,169         $10,803     $ 86,972
2003............................................       26,673           9,218       35,891
2004............................................       12,500          10,085       22,585
2005............................................        4,223           9,635       13,858
2006............................................           --           3,345        3,345
                                                     --------         -------     --------
                                                     $119,565         $43,086     $162,651
                                                     ========         =======     ========


     The Company has also committed to purchase at similar terms additional
future episodes of certain of these programs should they be made available.

9. OBLIGATIONS FOR CABLE DISTRIBUTION RIGHTS:

     As of December 31, 2001, obligations for cable distribution rights require
collective payments by the Company of approximately $13.2 million as follows (in
thousands):

                                                            
2002........................................................   $12,325
2003........................................................       504
2004........................................................       180
2005........................................................       180
                                                               -------
                                                                13,189
Less: Amount representing interest..........................      (154)
                                                               -------
Present value of obligations for cable distribution
  rights....................................................   $13,035
                                                               =======



                                       F-18

                       PAXSON COMMUNICATIONS CORPORATION

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

10. SENIOR SUBORDINATED NOTES AND BANK FINANCING:

     Senior subordinated notes and bank financing consists of the following (in
thousands):



                                                                2001       2000
                                                              --------   --------
                                                                   
10 3/4% Senior Subordinated Notes, due 2008.................  $200,000   $     --
11 5/8% Senior Subordinated Notes, repaid in July 2001......        --    230,000
Senior Credit Facility, secured by all assets of the
  Company:
     - $25 million revolving line of credit, maturing June
       30, 2006, interest at LIBOR plus 3.0% or Base Rate
       (as defined) plus 2.0% at the Company's option (5.43%
       at December 31, 2001)................................    25,000         --
     - $50 million Term A loan, maturing December 31, 2005,
       interest at LIBOR plus 3.0% or Base Rate (as defined)
       plus 2.0% at the Company's option (5.33% at December
       31, 2001), quarterly principal payments beginning
       September 30, 2003...................................    20,000         --
     - $285 million Term B loan, maturing June 30, 2006,
       interest at LIBOR plus 3.0% or Base Rate (as defined)
       plus 2.0% at the Company's option (6.16% at December
       31, 2001), quarterly principal payments..............   283,575         --
Senior Credit Facility, repaid in July 2001, interest at
  LIBOR plus 3.50% or base rate plus 2.50%, at the Company's
  option (10.26% at December 31, 2000)......................        --    122,000
Equipment facility, repaid in July 2001, interest at the
  Index Rate, as defined, plus 2.75% per annum, LIBOR plus
  3.75% per annum or the commercial paper rate plus 3.75%
  per annum, at the Company's option (10.11% at December 31,
  2000), secured by purchased assets........................        --     53,689
Other.......................................................       605        648
                                                              --------   --------
                                                               529,180    406,337
Less: discount on Senior Subordinated Notes.................        --       (861)
Less: current portion.......................................    (2,899)   (15,966)
                                                              --------   --------
                                                              $526,281   $389,510
                                                              ========   ========


     On July 12, 2001, the Company completed a $560 million financing consisting
of a $360 million senior credit facility and $200 million of 10 3/4% Senior
Subordinated Notes due 2008 (the "Notes"). Proceeds from the initial funding
under the new senior credit facility and the 10 3/4% Senior Subordinated Notes
offering were used to repay all of the Company's indebtedness and obligations
under its previously existing credit facilities which were scheduled to mature
in June 2002, to redeem its 11 5/8% Senior Subordinated Notes and its 12%
redeemable preferred stock, as well as to pay redemption premiums, fees and
expenses in connection with the refinancing. In 2001, the Company recognized an
extraordinary loss related to early extinguishment of debt totaling
approximately $9.9 million resulting primarily from the write-off of unamortized
debt costs related to the refinanced indebtedness and the redemption premium and
costs associated with the repayment of the 11 5/8% Senior Subordinated Notes. As
further described in Note 18, in January 2002 the Company issued $308.3 million
of senior subordinated discount notes due 2009.

     The $360 million senior credit facility consists of a $25 million revolving
credit facility maturing June 2006, a $50 million delayed draw Term A facility
maturing December 2005 and a $285 million Term B facility maturing June 2006.
The revolving credit facility is available for general corporate purposes and
the Term A

                                       F-19

                       PAXSON COMMUNICATIONS CORPORATION

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

facility is available to fund capital expenditures. The interest rate under the
bank facility is LIBOR plus 3.0% or Base Rate (as defined) plus 2.0% at the
Company's option. The 10 3/4 Senior Subordinated Notes are due in 2008 and
interest on the notes is payable on January 15 and July 15 of each year,
beginning on January 15, 2002. In September 2001, the Company entered into an
interest rate swap in the notional amount of $144.0 million to hedge the impact
of interest rate changes on a portion of our variable rate indebtedness. The
fixed rate under the swap is 3.64% and variable rates are indexed to LIBOR.

     The Notes contain certain covenants, which, among other things, restrict
additional indebtedness, payment of dividends, stock issuance of subsidiaries,
certain investments and transfers or sales of assets, and provide for the
repurchase of the Notes in the event of a change in control of the Company. The
Notes are general unsecured obligations of the Company subordinate in right of
payment to all existing and future senior indebtedness of the Company and senior
in right to all future subordinated indebtedness of the Company.

     The Notes are redeemable at the Company's option on or after July 15, 2005
at the redemption prices set forth below (expressed as a percentage of the face
value) plus accrued interest to the date of redemption:



TWELVE MONTH PERIOD
BEGINNING JULY 15,
- -------------------
                                                            
       2005.................................................   105.375%
       2006.................................................   102.688%
       2007.................................................   100.000%


     The senior credit facility contains various covenants restricting the
Company's ability and the ability of its subsidiaries to incur additional
indebtedness, dispose of assets, pay dividends, repurchase or redeem capital
stock and indebtedness, create liens, make capital expenditures, make certain
investments or acquisitions and enter into transactions with affiliates and
otherwise restricting our activities. The senior credit facility also contains
the following financial covenants: (1) twelve-month trailing minimum net revenue
and minimum EBITDA (as defined) for each of the fiscal quarters ended June 30,
2001 through December 31, 2003 and (2) maximum ratio of total senior debt to
EBITDA, maximum ratio of total debt to EBITDA, minimum permitted interest
coverage ratio and minimum permitted fixed charge coverage ratio, each beginning
for each of the fiscal quarters ending on or after June 30, 2004. At December
31, 2001, the Company was in compliance with these covenants, as applicable. The
Company believes that it will continue to be in compliance with its debt
covenants through the end of fiscal 2002. However, there can be no assurance
that the Company will continue to be in compliance. If the Company were to
violate any of these covenants, the Company would be required to seek a waiver
from its lenders under the senior credit facility and possibly seek an amendment
to the senior credit facility. Although the Company believes, based on
discussions with its lenders, that the Company would be able to obtain waivers
or amendments to its senior credit facility relating to these covenants, there
can be no assurance that the Company's lenders under its senior credit facility
would grant the Company any waiver or amendment which might become necessary. If
the Company failed to meet any of its financial covenants and the Company's
lenders did not grant a waiver or amend the facility, the lenders would have the
right to declare an event of default and seek remedies including acceleration of
all outstanding amounts due under the senior credit facility. Should an event of
default be declared under the senior credit facility, this would cause a cross
default to occur under the senior subordinated note and senior subordinated
discount note indentures, thus giving each trustee the right to accelerate
repayment. There can be no assurance that the Company would be successful in
obtaining alternative sources of funding to repay these obligations should these
events occur.

                                       F-20

                       PAXSON COMMUNICATIONS CORPORATION

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Aggregate maturities of senior subordinated notes and bank financing at
December 31, 2001 are as follows (in thousands):

                                                           
        2002........................................................  $  2,899
        2003........................................................     3,004
        2004........................................................     3,107
        2005........................................................    22,617
        2006........................................................   297,246
        Thereafter..................................................   200,307
                                                                      --------
                                                                      $529,180
                                                                      ========

        

     Debt issuance costs are amortized to interest expense over the term of the
indebtedness using the effective interest method.

11. DERIVATIVE FINANCIAL INSTRUMENTS:

     The Company has entered into an interest rate swap with a financial
institution to manage the impact of interest rate changes on the Company's
variable rate indebtedness. This interest rate swap has an aggregate notional
amount of $144.0 million and contractually matures in 2003. The fixed rate under
the swap is 3.64% and variable rates are indexed to LIBOR.

     The amounts exchanged by the counterparties to interest rate derivatives
are based upon the notional amounts and other terms, generally related to
interest rates, of the derivatives. While notional amounts of interest rate
derivatives form part of the basis for the amounts exchanged by the
counterparties, the notional amounts are not themselves exchanged and,
therefore, do not represent a measure of the Company's exposure as an end user
of derivative financial instruments.

     The Company is exposed to credit related losses in the event of
non-performance by counterparties to derivative financial instruments. The
Company monitors the credit worthiness of the counterparties and presently does
not expect default by any of the counterparties. The Company does not obtain
collateral in connection with its derivative financial instruments.

     The Company has accounted for the swap as a cash flow hedge pursuant to
SFAS No. 133, as amended, with changes in the fair value included as a component
of other comprehensive loss. At December 31, 2001, the fair value of the swap
was a liability of approximately $1.4 million.

12. INCOME TAXES:

     The (provision) benefit for federal and state income taxes for the three
years ended December 31, 2001, 2000 and 1999 is as follows (in thousands):



                                                             2001    2000     1999
                                                             -----   -----   -------
                                                                    
Current:
     Federal...............................................  $  --   $  --   $   975
     State.................................................   (120)   (120)   (1,827)
                                                             -----   -----   -------
                                                             $(120)  $(120)  $  (852)
                                                             =====   =====   =======
Deferred:
     Federal...............................................  $  --   $  --   $51,293
     State.................................................     --      --     6,816
                                                             -----   -----   -------
                                                             $  --   $  --   $58,109
                                                             =====   =====   =======


                                       F-21

                       PAXSON COMMUNICATIONS CORPORATION

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Deferred tax assets and deferred tax liabilities reflect the tax effect of
differences between financial statement carrying amounts and tax bases of assets
and liabilities as follows (in thousands):



                                                                2001        2000
                                                              ---------   ---------
                                                                    
Deferred tax assets:
     Net operating loss carryforwards.......................  $ 243,112   $ 190,365
     Programming rights.....................................     29,306      14,980
     Deferred compensation..................................     17,731      14,987
     Other..................................................      2,583       4,335
                                                              ---------   ---------
                                                                292,732     224,667
     Deferred tax asset valuation allowance.................   (156,753)    (84,204)
                                                              ---------   ---------
                                                                135,979     140,463
Deferred tax liabilities:
     Basis difference on fixed and intangible assets........   (135,979)   (140,463)
                                                              ---------   ---------
          Net deferred taxes................................  $      --   $      --
                                                              =========   =========


     The reconciliation of income tax provision (benefit) computed at the U.S.
federal statutory tax rate, to the provision (benefit) for income taxes is as
follows (in thousands):



                                                         2001       2000       1999
                                                       --------   --------   --------
                                                                    
Tax benefit at U.S. federal statutory tax rate.......  $(71,281)  $(62,442)  $(76,170)
State income tax benefit, net of federal tax.........    (5,958)    (5,145)    (6,426)
Non deductible items.................................     1,773      1,548      1,198
Valuation allowance..................................    72,549     63,498     24,358
Other................................................     3,037      2,661       (217)
                                                       --------   --------   --------
Provision (benefit) for income taxes.................  $    120   $    120   $(57,257)
                                                       ========   ========   ========


     The Company has recorded a valuation allowance for its net deferred tax
assets at December 31, 2001 and 2000, as it believes it is more likely than not
that it will be unable to utilize its net deferred tax assets. During the year
ended December 31, 1999, the Company recognized a deferred tax benefit to the
extent that the Company had offsetting deferred tax liabilities.

     The Company has net operating loss carryforwards for income tax purposes
subject to certain carryforward limitations of approximately $640 million at
December 31, 2001 expiring through 2021. A portion of the net operating losses,
amounting to approximately $7.9 million, are limited to annual utilization as a
result of a change in ownership occurring when the Company acquired the
subsidiary. Additionally, further limitations on the utilization of the
Company's net operating tax loss carryforwards could result in the event of
certain changes in the Company's ownership.

13. STOCK INCENTIVE PLANS:

     The Company has established various stock incentive plans to provide
incentives to officers, employees and others who perform services for the
Company through awards of options and shares of restricted stock. Awards granted
under the plans are at the discretion of the Company's Compensation Committee
and may be in the form of either incentive or nonqualified stock options or
awards of restricted stock. Options granted under the plans generally vest over
a four to five year period and expire ten years after the date of grant. At
December 31, 2001, 693,978 shares of Class A common stock were available for
additional awards under the plans.

                                       F-22

                       PAXSON COMMUNICATIONS CORPORATION

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     When options are granted to employees, a non-cash charge representing the
difference between the exercise price and the fair market value of the common
stock underlying the vested options on the date of grant is recorded as
stock-based compensation expense with the balance deferred and amortized over
the remaining vesting period. For the years ended December 31, 2001, 2000 and
1999, the Company recognized approximately $10.2 million, $13.9 million and
$16.8 million, respectively, of stock-based compensation expense related to
options and warrants and expects to recognize an additional expense of
approximately $6.5 million over the next four years as such outstanding options
vest.

     In May 2000, the Compensation Committee of the Board of Directors approved
certain amendments to the terms of the stock options previously granted under
the Company's stock option plans. The amendments were as follows: (1) to extend
the exercise period in the event of an involuntary termination other than for
cause to three years from the date of termination (or the original expiration,
if earlier); (2) to extend the exercise period in the event of a voluntary
termination to one year from the date of termination (or the original
expiration, if earlier); and (3) to retroactively revise the vesting schedule
for those options which included a deferred vesting schedule over a five year
period at the rates of 10%, 15%, 20%, 25% and 30% per year to a vesting schedule
at the rate of 20% per year over a five year period. These modifications
resulted in a new measurement date for purposes of measuring compensation
expense for stock options outstanding at the date of the modification. However,
no additional compensation expense was recognized as the intrinsic value at the
modification date did not exceed the intrinsic value at the original measurement
date.

     During 1999, the Company modified the terms of certain stock options in
connection with the termination of employment of the holders. Included in
stock-based compensation expense is $2.1 million reflecting the additional
intrinsic value of those awards at the date of modification. Also in 1999, the
Compensation Committee of the Board of Directors reduced the per share exercise
price of 840,000 unvested stock options held by the Company's CEO to $.01 and
360,000 vested stock options held by the Company's CEO to $1.00. The Company
recognized stock based compensation of approximately $2.3 million, $5.7 million
and $9.1 million for the years ended December 31, 2001, 2000 and 1999,
respectively, related to these options.

     In October 1999, the Company amended the terms of substantially all of its
outstanding employee stock options to provide for certain accelerated vesting of
the options in the event of termination of employment with the Company as a
result of the consolidation of Company operations or functions with those of NBC
or within six months preceding or three years following a change in control of
the Company. Were such events to occur, the Company could be required to
recognize stock-based compensation expense at earlier dates than currently
expected.

     A summary of the Company's 1994, 1996 and 1998 stock option plans as of
December 31, 2001, 2000 and 1999 and changes during the three years ending
December 31, 2001 is presented below:



                                       2001                   2000                    1999
                               --------------------   ---------------------   ---------------------
                                           WEIGHTED                WEIGHTED                WEIGHTED
                                           AVERAGE                 AVERAGE                 AVERAGE
                               NUMBER OF   EXERCISE   NUMBER OF    EXERCISE   NUMBER OF    EXERCISE
                                OPTIONS     PRICE      OPTIONS      PRICE      OPTIONS      PRICE
                               ---------   --------   ----------   --------   ----------   --------
                                                                         
Outstanding, beginning of
  year.......................  7,774,286    $6.66      8,891,061    $6.31      9,341,662    $5.86
Granted......................  2,303,750     7.25        515,000     7.25      2,364,000     7.25
Forfeited....................   (117,575)    8.23       (366,925)    6.88     (1,612,500)    7.21
Exercised....................   (508,025)    6.39     (1,264,850)    4.40     (1,202,101)    3.46
                               ---------              ----------              ----------
Outstanding, end of year.....  9,452,436     5.91      7,774,286     5.59      8,891,061     5.37
                               =========              ==========              ==========
Weighted average fair value
  of options granted during
  the year...................                8.22                    6.88                    6.90


                                       F-23

                       PAXSON COMMUNICATIONS CORPORATION

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The majority of the Company's option grants have been at exercise prices of
$7.25 and $3.42, prices which have historically been below the fair market value
of the underlying common stock at the date of grant.

     The following table summarizes information about employee and director
stock options outstanding and exercisable at December 31, 2001:



                                                                   WEIGHTED
                                                      NUMBER        AVERAGE         NUMBER
                                                   OUTSTANDING     REMAINING    EXERCISABLE AT
                                                   DECEMBER 31,   CONTRACTUAL    DECEMBER 31,
EXERCISE PRICES                                        2001          LIFE            2001
- ---------------                                    ------------   -----------   --------------
                                                                       
  $0.01..........................................     840,000          6            600,000
  $1.00..........................................     360,000          6            360,000
  $3.42..........................................   1,123,711          3          1,118,711
  $7.25..........................................   7,128,725          8          3,409,325
                                                    ---------                     ---------
                                                    9,452,436                     5,488,036
                                                    =========                     =========


     Had compensation expense for the Company's option plans been determined
using the fair value method the Company's net loss and net loss per share would
have been as follows (in thousands except per share data):



                                                         YEAR ENDED DECEMBER 31,
                                                    ---------------------------------
                                                      2001        2000        1999
                                                    ---------   ---------   ---------
                                                                   
Net loss available to common stockholders:
  As reported.....................................  $(350,438)  $(391,329)  $(314,579)
  Pro forma.......................................   (358,587)   (410,845)   (319,919)
Basic and diluted net loss per share:
  As reported.....................................  $   (5.43)  $   (6.16)  $   (5.10)
  Pro forma.......................................      (5.56)      (6.47)      (5.18)


     The fair value of each option grant was estimated on the date of grant
using the Black-Scholes option pricing model assuming a dividend yield of 0.0%,
expected volatility range of 50% to 73%, and risk free interest rates of 4.3% to
6.9% and weighted average expected option terms of .5 to 7.5 years.

     In addition to the options granted under its stock incentive plans, the
Company has granted nonqualified options to purchase 3,200,000 (3,100,000 in
1999) shares of Class A common stock to members of senior management and others.
These grants consist primarily of options granted in 1999 to purchase 1,000,000
shares of Class A common stock, which vest over three years and expire in ten
years, and options to purchase 2,000,000 shares which vest over four years and
expire in ten years. The exercise price for options vesting on the first
anniversary is $10. The exercise prices for options vesting on the second
anniversary are $12.03 (options to purchase 333,333 shares) and $11.68 (options
to purchase 500,000 shares). The exercise prices for options vesting on the
third anniversary are $9.03 (options to purchase 333,334 shares) and $10.85
(options to purchase 500,000 shares). The exercise price for options vesting on
the final anniversary (500,000 shares) will be the lower of $21, or the fair
market value of the common stock on the prior anniversary date. The Company
recognized stock-based compensation related to these grants of approximately
$929,000, $2.3 million and $873,000 for the years ended December 2001, 2000 and
1999, respectively. The options granted which vest on the final anniversary are
being accounted for as variable plans and the ultimate compensation expense for
such options cannot be determined until their vesting date.

                                       F-24

                       PAXSON COMMUNICATIONS CORPORATION

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

14. MANDATORILY REDEEMABLE PREFERRED STOCK:

     The following represents a summary of the changes in the Company's
mandatorily redeemable preferred stock during the three years ended December 31,
2001 and the aggregate liquidation preference as of December 31, 2001 (in
thousands):



                                                              JUNIOR
                                                           EXCHANGEABLE                   SERIES B
                                JUNIOR     EXCHANGEABLE     PREFERRED     CONVERTIBLE    CONVERTIBLE
                               PREFERRED     PREFERRED        STOCK        PREFERRED      PREFERRED
                               STOCK 12%   STOCK 12 1/2%     13 1/4%      STOCK 9 3/4%    STOCK 8%       TOTAL
                               ---------   -------------   ------------   ------------   -----------   ----------
                                                                                     
Balance at December 31,
  1998.......................   $49,096      $191,517        $205,632       $ 75,156      $     --     $  521,401
Issuances....................        --            --              --             --       339,837        339,837
Accretion....................       697           673           1,164            486         6,715          9,735
Accrual of cumulative
  dividends..................     6,519        25,371          29,430          8,002         9,683         79,005
Cash dividends...............      (171)           --              --             --            --           (171)
                                -------      --------        --------       --------      --------     ----------
Balance at December 31,
  1999.......................    56,141       217,561         236,226         83,644       356,235        949,807
Accretion....................       714           676           1,170            489        23,422         26,471
Accrual of cumulative
  dividends..................     7,092        28,641          33,458          8,812        33,200        111,203
Cash dividends...............    (7,092)           --              --             --            --         (7,092)
                                -------      --------        --------       --------      --------     ----------
Balance at December 31,
  2000.......................    56,855       246,878         270,854         92,945       412,857      1,080,389
Accretion....................     2,247           679           1,177            492        25,005         29,600
Accrual of cumulative
  dividends..................     3,783        32,333          38,037          9,703        33,200        117,056
Cash dividends...............    (3,783)           --              --             --            --         (3,783)
Redemption...................   (59,102)           --              --             --            --        (59,102)
                                -------      --------        --------       --------      --------     ----------
Balance at December 31,
  2001.......................   $    --      $279,890        $310,068       $103,140      $471,062     $1,164,160
                                =======      ========        ========       ========      ========     ==========
Aggregate liquidation
  preference at December 31,
  2001.......................   $    --      $283,167        $315,911       $105,655      $491,083     $1,195,816
                                =======      ========        ========       ========      ========     ==========


JUNIOR PREFERRED STOCK 12%

     In July 2001, the Company redeemed all 33,000 shares issued and outstanding
of its $0.001 par value Junior Preferred Stock (the "Junior Preferred Stock").
Prior to redemption, the Company paid cash dividends of approximately $3.8
million and $7.1 million in 2001 and 2000, respectively.

CUMULATIVE EXCHANGEABLE PREFERRED STOCK 12 1/2%

     At December 31, 2001, the Company had authorized 440,000 shares of $0.001
par value Cumulative Exchangeable Preferred Stock (the "Exchangeable Preferred
Stock") of which 277,380 and 245,706 shares were issued and outstanding as of
December 31, 2001 and 2000, respectively. As discussed in Note 18, in January
2002 the Company redeemed all issued and outstanding shares of Exchangeable
Preferred Stock for approximately $298.7 million, including accumulated but
unpaid dividends and the redemption premium.

     During 2001, 2000 and 1999, the Company paid dividends of approximately
$31.7 million, $28.1 million, $24.9 million, respectively, by the issuance of
additional shares of Exchangeable Preferred Stock. Accrued Exchangeable
Preferred Stock dividends since the last dividend payment date aggregated
approximately $5.8 million and $5.1 million at December 31, 2001 and 2000,
respectively.

JUNIOR EXCHANGEABLE PREFERRED STOCK 13 1/4%

     During 1998, the Company issued 20,000 shares of Cumulative Junior
Exchangeable Preferred Stock (the "Junior Exchangeable Preferred Stock") with an
aggregate $200 million liquidation preference for gross

                                       F-25

                       PAXSON COMMUNICATIONS CORPORATION

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

proceeds of an equivalent amount. At December 31, 2001 and 2000, the Company had
authorized 72,000 shares of $0.001 par value Junior Exchangeable Preferred Stock
of which 31,076 and 27,335 shares were issued and outstanding, respectively.
Holders of the Junior Exchangeable Preferred Stock are entitled to cumulative
dividends at an annual rate of 13 1/4% of the liquidation preference, payable
semi-annually in cash or additional shares beginning November 15, 1998 and
accumulating from the issue date. If dividends for any period ending after May
15, 2003 are paid in additional shares of Junior Exchangeable Preferred Stock,
the dividend rate will increase by 1% per annum for such dividend payment
period.

     The Company is required to redeem all of the then outstanding Junior
Exchangeable Preferred Stock on November 15, 2006, at a price equal to the
aggregate liquidation preference thereof plus accumulated and unpaid dividends
to the date of redemption. The Junior Exchangeable Preferred Stock is redeemable
at the Company's option at any time on or after May 15, 2003, at the redemption
prices set forth below (expressed as a percentage of liquidation preference)
plus accumulated and unpaid dividends to the date of redemption:



TWELVE MONTH PERIOD
BEGINNING MAY 15,
- -------------------
                                                           
       2003.................................................  106.625%
       2004.................................................  103.313%
       2005 and thereafter..................................  100.000%


     Upon a change of control, the Company is required to offer to purchase the
Junior Exchangeable Preferred Stock at a price equal to 101% of the liquidation
preference thereof plus accumulated and unpaid dividends.

     The Company may, provided it is not contractually prohibited from doing so,
exchange the outstanding Junior Exchangeable Preferred Stock on any dividend
payment date for 13 1/4% Exchange Debentures due 2006. The Exchange Debentures
have redemption features similar to those of the Junior Exchangeable Preferred
Stock.

     During 2001, 2000 and 1999, the Company paid dividends of approximately
$37.4 million, $32.9 million and $28.9 million, respectively, by the issuance of
additional shares of Junior Exchangeable Preferred Stock. Accrued Junior
Exchangeable Preferred Stock dividends since the last dividend payment date
aggregated approximately $5.1 million and $4.5 million at December 31, 2001 and
2000, respectively.

CONVERTIBLE PREFERRED STOCK 9 3/4%

     During 1998, the Company issued 7,500 shares of Series A Convertible
Preferred Stock ("Convertible Preferred Stock") with an aggregate liquidation
preference of $75 million, and warrants to purchase 240,000 shares of Class A
common stock. Of the gross proceeds of $75 million, approximately $960,000 was
allocated to the value of the warrants, which are exercisable at a price of $16
per share through June 2003. At December 31, 2001 and 2000, the Company had
authorized 17,500 shares of $0.001 par value Convertible Preferred Stock of
which 10,566 and 9,595 shares were issued and outstanding, respectively. Holders
of the Convertible Preferred Stock are entitled to receive cumulative dividends
at an annual rate of 9 3/4%, payable quarterly beginning September 30, 1998 and
accumulating from the issue date. The Company may pay dividends either in cash,
in additional shares of Convertible Preferred Stock, or (subject to an increased
dividend rate) by the issuance of shares of Class A common stock equal in value
to the amount of such dividends.

     During 2001, 2000 and 1999, the Company paid dividends of approximately
$9.7 million, $8.8 million and $8.0 million, respectively, by the issuance of
additional shares of Convertible Preferred Stock. At December 31, 2001 and 2000,
there were no accrued and unpaid dividends on the Convertible Preferred Stock.

                                       F-26

                       PAXSON COMMUNICATIONS CORPORATION

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The Company is required to redeem the Convertible Preferred Stock on
December 31, 2006, at a price equal to the aggregate liquidation preference
thereof plus accumulated and unpaid dividends to the date of redemption. The
Convertible Preferred Stock is redeemable at the Company's option at any time on
or after June 30, 2003, at the redemption prices set forth below (expressed as a
percentage of liquidation preference) plus accumulated and unpaid dividends to
the date of redemption:



TWELVE MONTH PERIOD
BEGINNING JUNE 30,
- -------------------
                                                           
       2003.................................................  104.00%
       2004.................................................  102.00%
       2005 and thereafter..................................  100.00%


     Upon a change of control, the Company is required to offer to purchase the
Convertible Preferred Stock at a price equal to the liquidation preference
thereof plus accumulated and unpaid dividends. The Convertible Preferred Stock
contains restrictions, primarily based on the trading price of the common stock,
on the issuance of additional preferred stock ranking senior to the Convertible
Preferred Stock.

     Each share of Convertible Preferred Stock is convertible into shares of
Class A common stock at an initial conversion price of $16 per share. If the
Convertible Preferred Stock is called for redemption, the conversion right will
terminate at the close of business on the date fixed for redemption.

     Holders of the Convertible Preferred Stock have voting rights on all
matters submitted for a vote to the Company's common stockholders and are
entitled to one vote for each share of Class A common stock into which their
Convertible Preferred Stock is convertible.

SERIES B CONVERTIBLE PREFERRED STOCK 8%

     Pursuant to the Investment Agreement, NBC acquired $415 million aggregate
liquidation preference of a new series of the Company's convertible exchangeable
preferred stock which accrues cumulative dividends from the Issue Date at an
annual rate of 8% and is convertible (subject to adjustment under the terms of
the Certificate of Designation relating to the Series B Convertible Preferred
Stock) into 31,896,032 shares of the Company's Class A common stock at an
initial conversion price of $13.01 per share, which increases at a rate equal to
the dividend rate.

     NBC has the right to demand that the Company redeem the Series B
Convertible Preferred Stock in September 2002 or annually thereafter through
September 2009. NBC also has the right to demand redemption of the Series B
Convertible Preferred Stock prior to September 2002 under certain circumstances
related to the attribution to NBC of its investment in the Company under rules
established by the FCC. The Company's redemption obligation in respect of the
Series B Convertible Preferred Stock is subject to the Company's compliance with
the terms of its existing debt and preferred stock instruments as well as the
existence of funds on hand to consummate such redemption.

     The Series B Convertible Preferred Stock is exchangeable, at the option of
the holder, subject to the Company's debt and preferred stock covenants limiting
additional indebtedness but in any event not later than January 1, 2007, into
convertible debentures of the Company ranking on a parity with the Company's
other subordinated indebtedness. Should NBC determine that the rules and
regulations of the FCC prohibit it from holding shares of Class A common stock,
NBC may convert the Series B Convertible Preferred Stock held by it into an
equal number of shares of non-voting common stock of the Company, which
non-voting common stock shall be immediately convertible into Class A common
stock upon transfer by NBC.

     Series B Convertible Preferred Stock dividends in arrears aggregated
approximately $76.1 million and $42.9 million at December 31, 2001 and 2000,
respectively.

                                       F-27

                       PAXSON COMMUNICATIONS CORPORATION

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

REDEMPTION FEATURES OF PREFERRED STOCK

     The following table presents the redemption value of the four classes of
preferred stock outstanding at December 31, 2001 should the Company elect to
redeem the preferred stock in the indicated year, assuming no dividends are paid
in cash prior to redemption (in thousands):



                                                                  JUNIOR
                                                EXCHANGEABLE   EXCHANGEABLE                      SERIES B
                                                 PREFERRED      PREFERRED       CONVERTIBLE     CONVERTIBLE
                                                   STOCK          STOCK          PREFERRED       PREFERRED
                                                 12 1/2%(1)     13 1/4%(2)    STOCK 9 3/4%(3)   STOCK 8%(4)
                                                ------------   ------------   ---------------   -----------
                                                                                    
2002..........................................    $298,650       $     --         $     --       $     --
2003..........................................          --        437,474          133,228             --
2004..........................................          --        486,697          143,880        582,383
2005..........................................          --        540,916          155,324        615,583
2006..........................................          --        609,879          171,029        648,783


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

(1) Redeemed in January 2002. See Note 18.
(2) Mandatorily redeemable on November 15, 2006; redeemable by the Company on or
    after May 15, 2003.
(3) Mandatorily redeemable on December 31, 2006; redeemable by the Company on or
    after June 30, 2003.
(4) NBC has the right to demand redemption in September 2002 and annually
    thereafter through September 2009, and prior to such dates under certain
    circumstances related to the attribution of NBC's investment in the Company
    under rules established by the FCC. The Company has the right to redeem the
    Series B Convertible Preferred Stock in whole or in part commencing in
    September 2004 at the redemption value of such shares plus accrued and
    unpaid dividends.

COVENANTS UNDER PREFERRED STOCK TERMS

     The certificates of designation of the preferred stock contain certain
covenants which, among other things, restrict additional indebtedness, payment
of dividends, transactions with related parties, certain investments and
transfers or sales of assets.

15. COMMON STOCK AND COMMON STOCK WARRANTS:

     On May 1, 2000, the Company's stockholders approved an amendment to the
Company's certificate of incorporation to increase the total number of
authorized shares of common stock from 197,500,000 shares to 327,500,000 shares,
the number of authorized shares of Class A common stock from 150,000,000 shares
to 215,000,000 shares and the number of authorized shares of Class C non-voting
common stock, par value $0.001 per share, from 12,500,000 shares to 77,500,000
shares. No shares of the Company's Class C common stock were issued or
outstanding at December 31, 2001 or 2000.

     Class A common stock and Class B common stock will vote as a single class
on all matters submitted to a vote of the stockholders, with each share of Class
A common stock entitled to one vote and each share of Class B common stock
entitled to ten votes; Class C common stock is non-voting. Each share of Class B
common stock is convertible, at the option of its holder, into one share of
Class A common stock at any time. Under certain circumstances, Class C common
stock may be converted, at the option of the holder, into Class A common stock.

     During December 1996, the Company approved a program under which it
extended loans to certain members of management for the purchase of Company
common stock in the open market by those individuals. The loans are full
recourse promissory notes bearing interest at 5.75% per annum and are
collateralized by the shares of stock purchased with the loan proceeds. The
Company extended the maturity of all outstanding loans under this program until
March 31, 2003. The outstanding principal balance on such

                                       F-28

                       PAXSON COMMUNICATIONS CORPORATION

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

loans was approximately $1.1 million and $1.3 million at December 31, 2001 and
2000, respectively and is reflected as stock subscription notes receivable in
the accompanying balance sheets.

     In connection with the NBC transaction discussed elsewhere herein, NBC
acquired a warrant to purchase up to 13,065,507 shares of Class A Common stock
at an exercise price of $12.60 per share ("Warrant A") and a warrant to purchase
up to 18,966,620 shares of Class A Common Stock ("Warrant B") at an exercise
price equal to the average of the closing sale prices of the Class A Common
Stock for the 45 consecutive trading days ending on the trading day immediately
preceding the warrant exercise date (provided that such price shall not be more
than 17.5% higher or 17.5% lower than the six month trailing average closing
sale price) subject to a minimum exercise price during the first three years
after the Issue Date of $22.50 per share. The Warrants are exercisable for ten
years from the Issue Date, subject to certain conditions and limitations.

     In connection with the Series A Convertible Preferred Stock sale in June
1998, the Company issued warrants to purchase 240,000 shares of Class A common
stock at an exercise price of $16. The warrants were valued at $960,000.

     In June 1998, the Company issued to an affiliate of a former member of its
Board of Directors five year warrants entitling the holder to purchase 155,500
shares of Class A common stock at an exercise price of $16.00 per share. In
March 2000, the Company reduced the exercise price of warrants held by the
affiliate from $16.00 per share to $12.60 per share resulting in compensation
expense of $139,000.

16. FAIR VALUE OF FINANCIAL INSTRUMENTS:

     The estimated fair value of financial instruments has been determined by
the Company using available market information and appropriate valuation
methodologies. However, considerable judgment is required in interpreting data
to develop the estimates of fair value. Accordingly, the estimates presented
herein are not necessarily indicative of the amounts that the Company could
realize in a current market exchange. The fair value estimates presented herein
are based on pertinent information available to management as of December 31,
2001. Although management is not aware of any factors that would significantly
affect the estimated fair value amounts, such amounts have not been
comprehensively revalued for purposes of these financial statements since that
date and current estimates of fair value may differ significantly from the
amounts presented herein. The following methods and assumptions were used to
estimate the fair value of each class of financial instruments for which it is
practicable to estimate such value:

     Cash and cash equivalents, accounts receivable, accounts payable and
accrued expenses.  The fair values approximate the carrying values due to their
short term nature.

     Investments in broadcast properties.  The fair value of investments in
broadcast properties is estimated based on recent market sale prices for
comparable stations and/or markets. The fair value approximates the carrying
value.

     Long-term debt.  The fair value of the Company's long-term debt is
estimated based on current market rates and instruments with the same risk and
maturities. The fair value of the Company's senior credit facility borrowings
approximates its carrying value. The fair market value of the Company's senior
subordinated notes is estimated based on year end quoted market prices for such
securities. At December 31, 2001, the estimated fair value of the Company's
senior subordinated notes was approximately $208.0 million.

                                       F-29

                       PAXSON COMMUNICATIONS CORPORATION

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Mandatorily redeemable securities.  The fair value of the Company's
mandatorily redeemable preferred stock is estimated based on quoted market
prices plus accumulated but unpaid dividends except for the Series B Convertible
Preferred Stock which is estimated at the December 31, 2001 aggregate
liquidation preference as no quoted market prices are available for these
securities. The estimated fair value of the Company's mandatorily redeemable
preferred stock is as follows (in thousands):

                                                           
Exchangeable Preferred 12 1/2%..............................  $  264,046
Junior Exchangeable Preferred 13 1/4%.......................     268,521
Convertible Preferred 9 3/4%................................      91,924
Series B Convertible Preferred 8%...........................     491,083
                                                              ----------
                                                              $1,115,574
                                                              ==========



17. COMMITMENTS AND CONTINGENCIES:

     Future minimum annual payments under non-cancelable operating leases for
broadcasting facilities and equipment and employment agreements, as of December
31, 2001, are as follows (in thousands):

                                                           
2002........................................................  $ 17,772
2003........................................................    15,750
2004........................................................    12,267
2005........................................................    11,230
2006........................................................    11,625
Thereafter..................................................   104,933
                                                              --------
                                                              $173,577
                                                              ========



     The Company incurred total operating expenses of approximately $17.4
million, $17.7 million and $15.2 million for the years ended December 31, 2001,
2000 and 1999, respectively, under these agreements.

     In December 2001, the Company completed the sale and leaseback of certain
of its tower assets for aggregate proceeds of $34.0 million. This transaction
resulted in a gain of approximately $5.2 million which has been deferred and
will be recognized over the lease term as a reduction of rent expense. As part
of the transaction, the Company entered into operating leases related to both
its analog and digital antennas at these facilities for terms of up to 20 years.
Annual rent expense over the lease term will be approximately $4.0 million. For
certain tower assets with a net book value of approximately $9.1 million, the
Company was temporarily unable to transfer title or assign leases to the buyer
at closing. The Company expects to complete such transfers in 2002. In the
interim, at closing the Company entered into management agreements with the
buyer on terms consistent with the operating leases. Included in the $34.0
million proceeds was approximately $12.1 million of deferred consideration for
the managed sites which is included in other liabilities.

INVESTMENT COMMITMENTS

     The Company has an option to purchase the assets of two television stations
serving the Memphis, TN and New Orleans, LA markets for an aggregate purchase
price of $40.0 million of which $4.0 million has been deposited into escrow. The
owners of these stations also have the right to require the Company to purchase
these stations at any time after January 1, 2003 through December 31, 2005.
These stations are currently operating under time brokerage agreements with the
Company. The purchase of these assets is subject to various conditions,
including the receipt of regulatory approvals. The completion of these
investments is also subject to a variety of factors and to the satisfaction of
various conditions, and there can be no assurance that these investments will be
completed.

                                       F-30

                       PAXSON COMMUNICATIONS CORPORATION

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

LEGAL PROCEEDINGS

     The Company is involved in litigation from time to time in the ordinary
course of its business. In the opinion of management, the ultimate resolution of
these matters will not have a material effect on the Company's consolidated
financial position or results of operations and cash flows.

     In October, November and December 1999, complaints were filed in the 15th
Judicial Circuit Court in Palm Beach County, Florida, in the Court of Chancery
of the State of Delaware and in Superior Court of the State of California
against certain of the Company's officers and directors by alleged stockholders
of the Company alleging breach of fiduciary duty by the directors in approving
the September 1999 transactions with NBC. The complaints asserted nearly
identical purported class and derivative claims and generally alleged that the
directors rejected a takeover offer and instead completed the NBC transactions,
thereby precluding the plaintiffs from obtaining a premium price for their
shares. The complaints sought to rescind the NBC transactions, to require the
Company to pursue other acquisition offers and to recover damages. In July 2001,
the four actions in Delaware were dismissed by the court. In August 2001, the
Florida action was voluntarily dismissed. In January 2002, the California action
was voluntarily dismissed.

     In December 2001, the Company commenced a binding arbitration proceeding
against NBC in which the Company asserted that NBC has breached its agreements
with the Company and has breached its fiduciary duty to the Company and to its
shareholders. The Company has asserted that NBC's proposed acquisition of the
Telemundo Group violates the terms of the agreements governing the investment
and partnership between the Company and NBC. The Company also made two filings
with the FCC, one of which requests a declaratory ruling as to whether conduct
by NBC, including NBC's influence and apparent control over certain members of
the Company's board of directors selected by NBC (all of whom have since
resigned from the Company's board), has caused NBC to have an attributable
interest in the Company in violation of FCC rules or has infringed upon our
rights as an FCC license holder. The second FCC filing seeks to deny FCC
approval of NBC's acquisition of the Telemundo Group's television stations. In
addition, in January 2002, the Company filed a petition to deny with the FCC
arguing that NBC was ineligible under FCC regulations to acquire control of
television station KNTV-TV, San Jose, California from Granite Broadcasting Corp.
due to NBC's attributable interest in the Company.

     The initiation of these proceedings by the Company casts significant
uncertainty over the future direction of the Company's relationship with NBC.
The hearing in the arbitration proceeding is currently scheduled to occur in
April 2002, and the Company expects that, under the applicable arbitration
rules, the arbitrator will render a decision by the end of May 2002. If the
Company does not prevail in the arbitration proceeding, and the Company's
position expressed in the FCC filings is not accepted by the FCC, NBC could
consummate the acquisition of the Telemundo Group and thereby render it highly
unlikely that NBC would be able to acquire control of the Company, while at the
same time retaining its investment in the Company and its ability to exercise a
significant influence over the Company's operations.

OTHER

     See also Notes 8, 9 and 14.

18. SUBSEQUENT EVENT:

     In January 2002, the Company completed an offering of senior subordinated
discount notes due in 2009. Gross proceeds of the offering totaled approximately
$308.3 million and were used to refinance the Company's 12 1/2% exchange
debentures due 2006, which were issued in exchange for the outstanding shares of
the Company's 12 1/2% exchangeable preferred stock on January 14, 2002, and to
pay costs related to the offering. The notes were sold at a discount of 62.132%,
which represents a yield to maturity of 12 1/4%. Interest on the notes will be
payable semi-annually beginning on July 15, 2006. The senior subordinated
discount notes are

                                       F-31

                       PAXSON COMMUNICATIONS CORPORATION

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

guaranteed by the Company's subsidiaries. In the first quarter of 2002, the
Company will recognize an extraordinary loss totaling approximately $18 million
resulting primarily from the redemption premium associated with the repayment of
the 12 1/2% exchange debentures.

19. SUPPLEMENTAL CASH FLOW INFORMATION:

     Supplemental cash flow information and non-cash operating, investing and
financing activities are as follows (in thousands):



                                                          YEARS ENDED DECEMBER 31,
                                                        -----------------------------
                                                          2001       2000      1999
                                                        --------   --------   -------
                                                                     
Supplemental disclosures of cash flow information:
  Cash paid for interest..............................  $ 39,987   $ 40,101   $44,076
                                                        ========   ========   =======
  Cash paid for income taxes..........................  $    255   $  1,301   $ 1,346
                                                        ========   ========   =======
Non-cash operating, investing and financing
  activities:
  Accretion of discount on Senior Subordinated
     Notes............................................  $    240   $    445   $   389
                                                        ========   ========   =======
  Issuance of common stock in connection with
     acquisitions.....................................  $     --   $    251   $   500
                                                        ========   ========   =======
  Beneficial conversion feature on issuance of
     convertible preferred stock......................  $     --   $ 75,130   $65,467
                                                        ========   ========   =======
  Dividends accrued on redeemable preferred stock.....  $113,273   $104,111   $78,834
                                                        ========   ========   =======
  Discount accretion on redeemable securities.........  $ 29,600   $ 26,471   $ 9,735
                                                        ========   ========   =======
  Satellite and cable distribution....................  $  1,151   $  5,345   $15,000
                                                        ========   ========   =======
  Sale of KWOK in exchange for WCPX...................  $     --   $     --   $30,000
                                                        ========   ========   =======
  Issuance of common stock in payment of obligations
     for cable distribution rights....................  $     --   $     --   $ 8,479
                                                        ========   ========   =======
  Notes receivable from sales of broadcast
     properties.......................................  $  4,792   $     --   $    --
                                                        ========   ========   =======


20. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED):

     Seasonal revenue fluctuations are common within the television broadcasting
industry and result primarily from fluctuations in advertising expenditures. The
Company believes that television advertisers generally spend relatively more for
commercial advertising time in the second and fourth calendar quarters and spend
relatively less during the first calendar quarter of each year.

     Operating loss in the third quarter of 2001 and the first quarter of 2000
includes adjustments of programming to net realizable value of approximately
$67.0 million and $24.4 million, respectively as described in Note 8.

     Operating loss in the fourth quarters of 2001 and 2000 include
restructuring charges (credits) of ($1.2) million and $5.8 million, respectively
as described in Note 3.

     Net loss attributable to common stockholders in the third quarter of 2001
includes an extraordinary charge of $9.9 million related to the early
extinguishment of debt as described in Note 10.

                                       F-32

                       PAXSON COMMUNICATIONS CORPORATION

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)



                                                        FOR THE 2001 QUARTERS ENDED
                                           ------------------------------------------------------
                                               (IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
                                           ------------------------------------------------------
                                           DECEMBER 31   SEPTEMBER 30     JUNE 30      MARCH 31
                                           -----------   ------------   -----------   -----------
                                                                          
Revenues.................................  $    77,149   $    72,462    $    78,981   $    80,214
Less: agency commissions.................      (10,825)      (10,507)       (11,249)      (10,899)
                                           -----------   -----------    -----------   -----------
Net revenues.............................       66,324        61,955         67,732        69,315
Expenses, excluding depreciation,
  amortization and stock based
  compensation...........................       58,960       127,366         63,391        66,932
Depreciation and amortization............       23,903        24,213         24,136        23,996
Stock-based compensation.................        4,426         2,546          2,071         1,118
                                           -----------   -----------    -----------   -----------
Operating loss...........................      (20,965)      (92,170)       (21,866)      (22,731)
                                           ===========   ===========    ===========   ===========
Net loss attributable to common
  stockholders before extraordinary
  charge.................................  $   (71,336)  $  (139,640)   $   (59,721)  $   (69,838)
                                           ===========   ===========    ===========   ===========
Net loss attributable to common
  stockholders...........................  $   (71,336)  $  (149,543)   $   (59,721)  $   (69,838)
                                           ===========   ===========    ===========   ===========
Basic and diluted loss per share before
  extraordinary charge...................  $     (1.10)  $    ( 2.16)   $     (0.93)  $     (1.09)
                                           ===========   ===========    ===========   ===========
Weighted average common shares
  outstanding............................   64,657,508    64,602,832     64,482,532    64,288,943
                                           ===========   ===========    ===========   ===========
  Stock price(1)
     High................................  $     10.50   $     12.75    $     14.00   $     12.48
     Low.................................  $      6.85   $      7.00    $      9.70   $      8.75


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

(1) The Company's Class A common stock is listed on the American Stock Exchange
    under the symbol PAX.



                                                        FOR THE 2000 QUARTERS ENDED
                                           ------------------------------------------------------
                                               (IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
                                           ------------------------------------------------------
                                           DECEMBER 31   SEPTEMBER 30     JUNE 30      MARCH 31
                                           -----------   ------------   -----------   -----------
                                                                          
Revenues.................................  $    85,886   $    73,443    $    78,151   $    78,456
Less: agency commissions.................      (11,830)      (10,344)       (10,886)      (10,984)
                                           -----------   -----------    -----------   -----------
Net revenues.............................       74,056        63,099         67,265        67,472
Expenses, excluding depreciation,
  amortization and stock based
  compensation...........................       73,622        74,472         67,675        96,411
Depreciation and amortization............       31,713        22,594         21,394        21,180
Stock-based compensation.................        3,026         3,090          5,583         2,167
                                           -----------   -----------    -----------   -----------
Operating loss...........................  $   (34,305)  $   (37,057)   $   (27,387)  $   (52,286)
                                           ===========   ===========    ===========   ===========
Net loss attributable to common
  stockholders...........................  $  (154,785)  $   (80,073)   $   (68,835)  $   (87,636)
                                           ===========   ===========    ===========   ===========
Basic and diluted loss per share.........  $     (2.41)  $     (1.26)   $     (1.09)  $     (1.39)
                                           ===========   ===========    ===========   ===========
Weighted average common shares
  outstanding............................   64,167,739    63,705,076     63,135,530    63,043,758
                                           ===========   ===========    ===========   ===========
  Stock price(1)
     High................................  $     11.94   $     13.81    $      8.88   $     12.38
     Low.................................  $      8.75   $      8.38    $      6.13   $      7.75


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

(1) The company's Class A common stock is listed on the American Stock Exchange
    under the symbol PAX.

                                       F-33


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

     UNTIL           , 2002 (90 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE NEW NOTES, WHETHER OR NOT PARTICIPATING IN
THIS EXCHANGE OFFER, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN
ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS
UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

                                  $496,263,000

                       PAXSON COMMUNICATIONS CORPORATION

                           OFFER TO EXCHANGE 12 1/4%
                  SENIOR SUBORDINATED DISCOUNT NOTES DUE 2009,
                      WHICH HAVE BEEN REGISTERED UNDER THE
                  SECURITIES ACT OF 1933, AS AMENDED, FOR ANY
                       AND ALL OUTSTANDING 12 1/4% SENIOR
                      SUBORDINATED DISCOUNT NOTES DUE 2009

                           -------------------------
                                   PROSPECTUS
                           -------------------------

                                 March   , 2002

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


                                    PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20.  INDEMNIFICATION OF DIRECTORS AND OFFICERS

     We are a Delaware corporation. Our certificate of incorporation and bylaws
provide for the mandatory indemnification of our directors and officers to the
fullest extent permitted by the Delaware General Corporation Law. Reference is
made to the Delaware General Corporation Law and to its Section 145, which
permits, and in some cases requires, indemnification of our directors, officers,
employees and agents under certain circumstances, subject to certain
limitations.

     The Delaware General Corporation Law permits the indemnification by a
Delaware corporation of its directors, officers, employees and other agents
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement in connection with specified actions, suits or proceedings,
whether civil, criminal, administrative or investigative (other than derivative
actions that are by or in the right of the corporation) if they acted in good
faith and in a manner they reasonably believed to be in or not opposed to the
best interests of the corporation, and, with respect to any criminal action or
proceedings, had no reasonable cause to believe their conduct was illegal. A
similar standard of care is applicable in the case of derivative actions, except
that indemnification extends only to expenses (including attorneys' fees)
incurred in connection with defense or settlement of such an action, and court
approval is required before there can be any indemnification if the person
seeking indemnification has been found liable to the corporation.

     We have purchased insurance with respect to, among other things, any
liabilities that may arise under the statutory provisions referred to above.

ITEM 21.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

     (a) Exhibits



EXHIBIT
  NO.                                    DESCRIPTION
- -------                                  -----------
           
 3.1.1     --    Certificate of Incorporation of the Company(1)
 3.1.2     --    Bylaws of the Company(2)
 3.1.3     --    Certificate of Designations of the Company's 13 1/4%
                 Cumulative Junior Exchangeable Preferred Stock(4)
 3.1.4     --    Certificate of Designations of the Company's 9 3/4% Series a
                 Convertible Preferred Stock(4)
 3.1.5     --    Certificate of Designations of the Company's 8% Series B
                 Convertible Exchangeable Preferred Stock(5)
 3.2.1     --    Certificate of Limited Partnership of America 51, L.P.(7)
 3.2.2     --    Second Amended and Restated Agreement of Limited Partnership
                 of America 51, L.P.(7)
 3.3.1     --    Articles of Incorporation of Bud Hits, Inc.(7)
 3.3.2     --    Bylaws of Bud Hits, Inc.(7)
 3.4.1     --    Articles of Incorporation of Bud Songs, Inc.(7)
 3.4.2     --    Bylaws of Bud Songs, Inc.(7)
 3.5.1     --    Articles of Incorporation of CAP Communications, Inc.(7)
 3.5.2     --    Bylaws of CAP Communications, Inc.(7)
 3.6.1     --    Articles of Incorporation of CAP Communications License of
                 New London, Inc.(7)
 3.6.2     --    Bylaws of CAP Communications License of New London, Inc.(7)
 3.7.1     --    Articles of Incorporation of CAP Communications of New
                 London, Inc.(7)
 3.7.2     --    Bylaws of CAP Communications of New London, Inc.(7)
 3.8.1     --    Articles of Incorporation of Channel 66 of Tampa, Inc.(7)
 3.8.2     --    Bylaws of Channel 66 of Tampa, Inc.(7)


                                       II-1




EXHIBIT
  NO.                                    DESCRIPTION
- -------                                  -----------
           
 3.9.1     --    Articles of Incorporation of Clearlake Productions, Inc.(7)
 3.9.2     --    Bylaws of Clearlake Productions, Inc.(7)
 3.10.1    --    Certificate of Incorporation of Cocola Media Corporation of
                 Florida(4)
 3.10.2    --    Bylaws of Cocola Media Corporation of Florida(4)
 3.11.1    --    Certificate of Incorporation of Cocola Media Corporation of
                 San Francisco, Inc.(4)
 3.11.2    --    Bylaws of Cocola Media Corporation of San Francisco(4)
 3.12.1    --    Amended and Restated Articles of Incorporation of DP Media,
                 Inc.(7)
 3.12.2    --    Amended and Restated Bylaws of DP Media, Inc.(7)
 3.13.1    --    Articles of Incorporation of DP Media License of Battle
                 Creek, Inc.(7)
 3.13.2    --    Bylaws of DP Media License of Battle Creek, Inc.(7)
 3.14.1    --    Articles of Incorporation of DP Media License of Boston,
                 Inc.(7)
 3.14.2    --    Bylaws of DP Media License of Boston, Inc.(7)
 3.15.1    --    Articles of Incorporation of DP Media License of
                 Martinsburg, Inc.(7)
 3.15.2    --    Bylaws of DP Media License of Martinsburg, Inc.(7)
 3.16.1    --    Articles of Incorporation of DP Media License of Milwaukee,
                 Inc.(7)
 3.16.2    --    Bylaws of DP Media License of Milwaukee, Inc.(7)
 3.17.1    --    Articles of Incorporation of DP Media License of Raleigh
                 Durham, Inc.(7)
 3.17.2    --    Bylaws of DP Media License of Raleigh Durham, Inc.(7)
 3.18.1    --    Articles of Incorporation of DP Media Battle Creek, Inc.(7)
 3.18.2    --    Articles of Amendment to Articles of Incorporation of DP
                 Media Battle Creek, Inc.(7)
 3.18.3    --    Bylaws of DP Media Battle Creek, Inc.(7)
 3.19.1    --    Articles of Incorporation of DP Media of Boston, Inc.(7)
 3.19.2    --    Bylaws of DP Media of Boston, Inc.(7)
 3.20.1    --    Articles of Incorporation of DP Media of Martinsburg,
                 Inc.(7)
 3.20.2    --    Bylaws of DP Media of Martinsburg, Inc.(7)
 3.21.1    --    Articles of Incorporation of DP Media of Milwaukee, Inc.(7)
 3.21.2    --    Bylaws of DP Media of Milwaukee, Inc.(7)
 3.22.1    --    Articles of Incorporation of DP Media of Raleigh Durham,
                 Inc.(7)
 3.22.2    --    Articles of Amendment to Articles of Incorporation of DP
                 Media of Raleigh Durham, Inc.(7)
 3.22.3    --    Bylaws of DP Media of Raleigh Durham, Inc.(7)
 3.23.1    --    Articles of Incorporation of DP Media of St. Louis, Inc.(7)
 3.23.2    --    Bylaws of DP Media of St. Louis, Inc.(7)
 3.24.1    --    Articles of Incorporation of Flagler Productions, Inc.(7)
 3.24.2    --    Bylaws of Flagler Productions, Inc.(7)
 3.25.1    --    Articles of Incorporation of Hispanic Broadcasting, Inc.(7)
 3.25.2    --    Articles of Amendment to Articles of Incorporation of
                 Hispanic Broadcasting, Inc.(7)
 3.25.3    --    Amended and Restated Bylaws of Hispanic Broadcasting,
                 Inc.(7)
 3.26.1    --    Articles of Incorporation of Iron Mountain Productions,
                 Inc.(7)
 3.26.2    --    Bylaws of Iron Mountain Productions, Inc.(7)
 3.27.1    --    Certificate of Formation of Ocean State Television, LLC
                 (formerly known as Offshore Television Company, LLC)(4)
 3.27.2    --    Operating Agreement of Ocean State Television, LLC(4)
 3.27.3    --    Amendment to Operating Agreement of Ocean State Television,
                 LLC(7)
 3.27.4    --    Amendment to Certificate of Formation of Ocean State
                 Television, LLC(7)


                                       II-2




EXHIBIT
  NO.                                    DESCRIPTION
- -------                                  -----------
           
 3.28.1    --    Articles of Incorporation of Pax Hits Publishing, Inc.
                 (formerly known as Pax Tunes, Inc.)(7)
 3.28.2    --    Articles of Amendment to Articles of Incorporation of Pax
                 Hits Publishing, Inc.(7)
 3.28.3    --    Amended and Restated Bylaws of Pax Hits Publishing, Inc.(7)
 3.29.1    --    Articles of Incorporation of Pax Internet, Inc. (formerly
                 known as Excel Marketing Enterprises, Inc.)(6)
 3.29.2    --    Articles of Amendment to Articles of Incorporation of Pax
                 Internet, Inc.(7)
 3.29.3    --    Bylaws of Pax Internet, Inc.(6)
 3.30.1    --    Certificate of Incorporation of Pax Net, Inc.(4)
 3.30.2    --    Bylaws of Pax Net, Inc.(4)
 3.31.1    --    Articles of Incorporation of Pax Net Television Productions,
                 Inc.)(4)
 3.31.2    --    Bylaws of Pax NetTelevision Productions, Inc.(4)
 3.32.1    --    Articles of Incorporation of Paxson Akron License, Inc.(6)
 3.32.2    --    Bylaws of Paxson Akron License, Inc.(6)
 3.33.1    --    Articles of Incorporation of Paxson Albany License, Inc.(3)
 3.33.2    --    Bylaws of Paxson Albany License, Inc.(3)
 3.34.1    --    Articles of Incorporation of Paxson Albuquerque License,
                 Inc.(4)
 3.34.2    --    Bylaws of Paxson Albuquerque License, Inc.(4)
 3.35.1    --    Articles of Incorporation of Paxson Atlanta License, Inc.(6)
 3.35.2    --    Bylaws of Paxson Atlanta License, Inc.(6)
 3.36.1    --    Articles of Incorporation of Paxson Birmingham License,
                 Inc.(3)
 3.36.2    --    Bylaws of Paxson Birmingham License, Inc.(3)
 3.37.1    --    Articles of Incorporation of Paxson Boston License, Inc.(6)
 3.37.2    --    Bylaws of Paxson Boston License, Inc.(6)
 3.38.1    --    Articles of Incorporation of Paxson Boston-68 License,
                 Inc.(7)
 3.38.2    --    Bylaws of Paxson Boston-68 License, Inc.(7)
 3.39.1    --    Articles of Incorporation of Paxson Buffalo License, Inc.(4)
 3.39.2    --    Bylaws of Paxson Buffalo License, Inc.(4)
 3.40.1    --    Articles of Incorporation of Paxson Cedar Rapids License,
                 Inc.(4)
 3.40.2    --    Bylaws of Paxson Cedar Rapids License, Inc.(4)
 3.41.1    --    Articles of Incorporation of Paxson Charleston License,
                 Inc.(4)
 3.41.2    --    Bylaws of Paxson Charleston License, Inc.(4)
 3.42.1    --    Articles of Incorporation of Paxson Chicago License, Inc.(4)
 3.42.2    --    Bylaws of Paxson Chicago License, Inc.(4)
 3.43.1    --    Certificate of Incorporation of Paxson Communications
                 License Company, LLC(4)
 3.43.2    --    Bylaws of Paxson Communications License Company, LLC(4)
 3.44.1    --    Articles of Incorporation of Paxson Communications LPTV,
                 Inc.(3)
 3.44.2    --    Bylaws of Paxson Communications LPTV, Inc.(3)
 3.45.1    --    Articles of Incorporation of Paxson Communications
                 Management Company(6)
 3.45.2    --    Bylaws of Paxson Communications Management Company(6)
 3.46.1    --    Articles of Incorporation of Paxson Communications of
                 Akron-23, Inc.(6)
 3.46.2    --    Bylaws of Paxson Communications of Akron-23, Inc.(6)
 3.47.1    --    Articles of Incorporation of Paxson Communications of
                 Albany-55, Inc.(3)
 3.47.2    --    Bylaws of Paxson Communications of Albany-55, Inc.(3)
 3.48.1    --    Articles of Incorporation of Paxson Communications of
                 Albuquerque-14, Inc.(4)


                                       II-3




EXHIBIT
  NO.                                    DESCRIPTION
- -------                                  -----------
           
 3.48.2    --    Bylaws of Paxson Communications of Albuquerque-14, Inc.(4)
 3.49.1    --    Articles of Incorporation of Paxson Communications of
                 Atlanta 14, Inc.(6)
 3.49.2    --    Bylaws of Paxson Communications of Atlanta-14, Inc.(6)
 3.50.1    --    Articles of Incorporation of Paxson Communications of
                 Birmingham-44, Inc. (3)
 3.50.2    --    Bylaws of Paxson Communications of Birmingham-44, Inc.(3)
 3.51.1    --    Articles of Incorporation of Paxson Communications of
                 Boston-46, Inc.(3)
 3.51.2    --    Bylaws of Paxson Communications of Boston-46, Inc.(3)
 3.52.1    --    Articles of Incorporation of Paxson Communications of
                 Boston-60, Inc.(6)
 3.52.2    --    Bylaws of Paxson Communications of Boston-60, Inc.(6)
 3.53.1    --    Articles of Incorporation of Paxson Communications of
                 Boston-68, Inc.(7)
 3.53.2    --    Bylaws of Paxson Communications of Boston-68, Inc.(7)
 3.54.1    --    Articles of Incorporation of Paxson Communications of
                 Buffalo-51, Inc.(4)
 3.54.2    --    Bylaws of Paxson Communications of Buffalo-51, Inc.(4)
 3.55.1    --    Articles of Incorporation of Paxson Communications of Cedar
                 Rapids-48, Inc.(4)
 3.55.2    --    Bylaws of Paxson Communications of Cedar Rapids-48, Inc.(4)
 3.56.1    --    Articles of Incorporation of Paxson Communications of
                 Charleston-29, Inc.(4)
 3.56.2    --    Bylaws of Paxson Communications of Charleston-29, Inc.(4)
 3.57.1    --    Articles of Incorporation of Paxson Communications of
                 Chicago-38, Inc.(4)
 3.57.2    --    Bylaws of Paxson Communications of Chicago-38, Inc.(4)
 3.58.1    --    Articles of Incorporation of Paxson Communications of
                 Dallas-68, Inc.(6)
 3.58.2    --    Bylaws of Paxson Communications of Dallas-68, Inc.(6)
 3.59.1    --    Articles of Incorporation of Paxson Communications of
                 Davenport-67, Inc.(4)
 3.59.2    --    Bylaws of Paxson Communications of Davenport-67, Inc.(4)
 3.60.1    --    Articles of Incorporation of Paxson Communications of
                 Denver-59, Inc.(6)
 3.60.2    --    Bylaws of Paxson Communications of Denver-59, Inc.(6)
 3.61.1    --    Articles of Incorporation of Paxson Communications of Des
                 Moines-39 Inc.(4)
 3.61.2    --    Bylaws of Paxson Communications of Des Moines-39, Inc.(4)
 3.62.1    --    Articles of Incorporation of Paxson Communications of
                 Detroit-31, Inc.(4)
 3.62.2    --    Bylaws of Paxson Communications of Detroit-31, Inc.(4)
 3.63.1    --    Articles of Incorporation of Paxson Communications of
                 Fayetteville-62, Inc.(4)
 3.63.2    --    Bylaws of Paxson Communications of Fayetteville-62, Inc.(4)
 3.64.1    --    Articles of Incorporation of Paxson Communications of
                 Fresno-61, Inc.(4)
 3.64.2    --    Bylaws of Paxson Communications of Fresno-61, Inc.(4)
 3.65.1    --    Articles of Incorporation of Paxson Communications of
                 Greensboro-16, Inc.(3)
 3.65.2    --    Bylaws of Paxson Communications of Greensboro-16, Inc.(3)
 3.66.1    --    Articles of Incorporation of Paxson Communications of
                 Greenville-38, Inc.(4)
 3.66.2    --    Bylaws of Paxson Communications of Greenville-38, Inc.(4)
 3.67.1    --    Articles of Incorporation of Paxson Communications of
                 Honolulu-66, Inc. (formerly known as Paxson Communications
                 of Hawaii-66, Inc.)(7)
 3.67.2    --    Articles of Amendment to Articles of Incorporation of Paxson
                 Communications of Honolulu-66, Inc.(7)
 3.67.3    --    Bylaws of Paxson Communications of Honolulu-66, Inc.(7)
 3.68.1    --    Articles of Incorporation of Paxson Communications of
                 Houston-49, Inc.(6)
 3.68.2    --    Bylaws of Paxson Communications of Houston-49, Inc.(6)
 3.69.1    --    Articles of Incorporation of Paxson Communications of
                 Jacksonville-21, Inc.(7)


                                       II-4




EXHIBIT
  NO.                                    DESCRIPTION
- -------                                  -----------
           
 3.69.2    --    Bylaws of Paxson Communications of Jacksonville-21, Inc.(7)
 3.70.1    --    Articles of Incorporation of Paxson Communications of
                 Jacksonville-35, Inc.(7)
 3.70.2    --    Bylaws of Paxson Communications of Jacksonville-35, Inc.(7)
 3.71.1    --    Articles of Incorporation of Paxson Communications of Kansas
                 City-50, Inc.(4)
 3.71.2    --    Bylaws of Paxson Communications of Kansas City-50, Inc.(4)
 3.72.1    --    Articles of Incorporation of Paxson Communications of
                 Knoxville-54. Inc.(4)
 3.72.2    --    Bylaws of Paxson Communications of Knoxville-54, Inc.(4)
 3.73.1    --    Articles of Incorporation of Paxson Communications of
                 Lexington-67, Inc.(4)
 3.73.2    --    Bylaws of Paxson Communications of Lexington-67, Inc.(4)
 3.74.1    --    Articles of Incorporation of Paxson Communications of Los
                 Angeles-30, Inc.(6)
 3.74.2    --    Bylaws of Paxson Communications of Los Angeles-30, Inc.(6)
 3.75.1    --    Articles of Incorporation of Paxson Communications of
                 Louisville-21, Inc.(7)
 3.75.2    --    Bylaws of Paxson Communications of Louisville-21, Inc.(7)
 3.76.1    --    Articles of Incorporation of Paxson Communications of
                 Memphis-50, Inc.(4)
 3.76.2    --    Bylaws of Paxson Communications of Memphis-50, Inc.(4)
 3.77.1    --    Articles of Incorporation of Paxson Communications of
                 Miami-35, Inc.(6)
 3.77.2    --    Bylaws of Paxson Communications of Miami-35, Inc.(6)
 3.78.1    --    Articles of Incorporation of Paxson Communications of
                 Minneapolis-41, Inc.(6)
 3.78.2    --    Bylaws of Paxson Communications of Minneapolis-41, Inc.(6)
 3.79.1    --    Articles of Incorporation of Paxson Communications of
                 Mobile-61, Inc.(4)
 3.79.2    --    Bylaws of Paxson Communications of Mobile-61, Inc.(4)
 3.80.1    --    Articles of Incorporation of Paxson Communications of
                 Nashville-28, Inc.(4)
 3.80.2    --    Bylaws of Paxson Communications of Nashville-28, Inc.(4)
 3.81.1    --    Articles of Incorporation of Paxson Communications of New
                 Orleans-49, Inc.(4)
 3.81.2    --    Bylaws of Paxson Communications of New Orleans-49, Inc.(4)
 3.82.1    --    Articles of Incorporation of Paxson Communications of New
                 York-31, Inc.(4)
 3.82.2    --    Bylaws of Paxson Communications of New York-31, Inc.(4)
 3.83.1    --    Articles of Incorporation of Paxson Communications of
                 Norfolk-49, Inc.(4)
 3.83.2    --    Bylaws of Paxson Communications of Norfolk-49, Inc.(4)
 3.84.1    --    Articles of Incorporation of Paxson Communications of
                 Oklahoma City-62, Inc.(3)
 3.84.2    --    Bylaws of Paxson Communications of Oklahoma City-62, Inc.(3)
 3.85.1    --    Articles of Incorporation of Paxson Communications of
                 Orlando-56, Inc.(6)
 3.85.2    --    Bylaws of Paxson Communications of Orlando-56, Inc.(6)
 3.86.1    --    Articles of Incorporation of Paxson Communications of
                 Philadelphia-61, Inc.(6)
 3.86.2    --    Bylaws of Paxson Communications of Philadelphia-61, Inc.(6)
 3.87.1    --    Articles of Incorporation of Paxson Communications of
                 Phoenix-13, Inc.(6)
 3.87.2    --    Bylaws of Paxson Communications of Phoenix-13, Inc.(6)
 3.88.1    --    Articles of Incorporation of Paxson Communications of
                 Phoenix-51, Inc.(3)
 3.88.2    --    Bylaws of Paxson Communications of Phoenix-51, Inc.(3)
 3.89.1    --    Articles of Incorporation of Paxson Communications of
                 Pittsburgh-40, Inc.(4)
 3.89.2    --    Bylaws of Paxson Communications of Pittsburgh-40, Inc.(4)
 3.90.1    --    Articles of Incorporation of Paxson Communications of
                 Portland-22, Inc.(4)
 3.90.2    --    Bylaws of Paxson Communications of Portland-22, Inc.(4)
 3.91.1    --    Articles of Incorporation of Paxson Communications of
                 Portland-23, Inc.(4)


                                       II-5




EXHIBIT
  NO.                                    DESCRIPTION
- -------                                  -----------
           
 3.91.2    --    Bylaws of Paxson Communications of Portland-23, Inc.(4)
 3.92.1    --    Articles of Incorporation of Paxson Communications of
                 Providence-69, Inc.(3)
 3.92.2    --    Bylaws of Paxson Communications of Providence-69, Inc.(3)
 3.93.1    --    Articles of Incorporation of Paxson Communications of
                 Roanoke-38, Inc.(4)
 3.93.2    --    Bylaws of Paxson Communications of Roanoke-38, Inc.(4)
 3.94.1    --    Articles of Incorporation of Paxson Communications of
                 Sacramento-29, Inc.(3)
 3.94.2    --    Bylaws of Paxson Communications of Sacramento-29, Inc.(3)
 3.95.1    --    Articles of Incorporation of Paxson Communications of Salt
                 Lake City-30, Inc.(4)
 3.95.2    --    Bylaws of Paxson Communications of Salt Lake City-30,
                 Inc.(4)
 3.96.1    --    Articles of Incorporation of Paxson Communications of San
                 Antonio-26, Inc.(4)
 3.96.2    --    Bylaws of Paxson Communications of San Antonio-26, Inc.(4)
 3.97.1    --    Articles of Incorporation of Paxson Communications of San
                 Jose-65, Inc.(6)
 3.97.2    --    Bylaws of Paxson Communications of San Jose-65, Inc.(6)
 3.98.1    --    Articles of Incorporation of Paxson Communications of San
                 Juan, Inc.(3)
 3.98.2    --    Bylaws of Paxson Communications of San Juan, Inc.(3)
 3.99.1    --    Articles of Incorporation of Paxson Communications of
                 Scranton-64, Inc.(4)
 3.99.2    --    Bylaws of Paxson Communications of Scranton-64, Inc.(4)
 3.100.1   --    Articles of Incorporation of Paxson Communications of
                 Seattle-33, Inc.(3)
 3.100.2   --    Bylaws of Paxson Communications of Seattle-33, Inc.(3)
 3.101.1   --    Articles of Incorporation of Paxson Communications of
                 Shreveport-21, Inc.(4)
 3.101.2   --    Bylaws of Paxson Communications of Shreveport-21, Inc.(4)
 3.102.1   --    Articles of Incorporation of Paxson Communications of
                 Spokane-34, Inc.(4)
 3.102.2   --    Bylaws of Paxson Communications of Spokane-34, Inc.(4)
 3.103.1   --    Articles of Incorporation of Paxson Communications of St.
                 Croix-15, Inc.(4)
 3.103.2   --    Bylaws of Paxson Communications of St. Croix-15, Inc.(4)
 3.104.1   --    Articles of Incorporation of Paxson Communications of
                 Syracuse-56, Inc.(4)
 3.104.2   --    Bylaws of Paxson Communications of Syracuse-56, Inc.(4)
 3.105.1   --    Articles of Incorporation of Paxson Communications of
                 Tampa-66, Inc.(6)
 3.105.2   --    Bylaws of Paxson Communications of Tampa-66, Inc.(6)
 3.106.1   --    Articles of Incorporation of Paxson Communications of
                 Tucson-46, Inc.(4)
 3.106.2   --    Bylaws of Paxson Communications of Tucson-46, Inc.(4)
 3.107.1   --    Articles of Incorporation of Paxson Communications of
                 Tulsa-44, Inc.(3)
 3.107.2   --    Bylaws of Paxson Communications of Tulsa-44, Inc.(3)
 3.108.1   --    Articles of Incorporation of Paxson Communications of
                 Washington-66, Inc.(4)
 3.108.2   --    Bylaws of Paxson Communications of Washington-66, Inc.(4)
 3.109.1   --    Articles of Incorporation of Paxson Communications of
                 Wausau-46, Inc.(4)
 3.109.2   --    Bylaws of Paxson Communications of Wausau-46, Inc.(4)
 3.110.1   --    Articles of Incorporation of Paxson Communications of West
                 Palm Beach-67, Inc.(4)
 3.110.2   --    Bylaws of Paxson Communications of West Palm Beach-67,
                 Inc.(4)
 3.111.1   --    Articles of Incorporation of Paxson Communications
                 Television, Inc.(6)
 3.111.2   --    Bylaws of Paxson Communications Television, Inc.(6)
 3.112.1   --    Articles of Incorporation of Paxson Dallas License, Inc.(6)
 3.112.2   --    Bylaws of Paxson Dallas License, Inc.(6)
 3.113.1   --    Articles of Incorporation of Paxson Davenport License,
                 Inc.(4)


                                       II-6




EXHIBIT
  NO.                                    DESCRIPTION
- -------                                  -----------
           
 3.113.2   --    Bylaws of Paxson Davenport License, Inc.(4)
 3.114.1   --    Articles of Incorporation of Paxson Denver License, Inc.(3)
 3.114.2   --    Bylaws of Paxson Denver License, Inc.(3)
 3.115.1   --    Articles of Incorporation of Paxson Des Moines License,
                 Inc.(4)
 3.115.2   --    Bylaws of Paxson Des Moines License, Inc.(4)
 3.116.1   --    Articles of Incorporation of Paxson Detroit License, Inc.(4)
 3.116.2   --    Bylaws of Paxson Detroit License, Inc.(4)
 3.117.1   --    Articles of Incorporation of Paxson Development, Inc.(7)
 3.117.2   --    Bylaws of Paxson Development, Inc.(7)
 3.118.1   --    Articles of Incorporation of Paxson Fayetteville License,
                 Inc.(4)
 3.118.2   --    Bylaws of Paxson Fayetteville License, Inc.(4)
 3.119.1   --    Articles of Incorporation of Paxson Fresno License, Inc.(4)
 3.119.2   --    Bylaws of Paxson Fresno License, Inc.(4)
 3.120.1   --    Articles of Incorporation of Paxson Greensboro License,
                 Inc.(3)
 3.120.2   --    Bylaws of Paxson Greensboro License, Inc.(3)
 3.121.1   --    Articles of Incorporation of Paxson Greenville License,
                 Inc.(4)
 3.121.2   --    Bylaws of Paxson Greenville License, Inc.(4)
 3.122.1   --    Articles of Incorporation of Paxson Hawaii License, Inc.(4)
 3.122.2   --    Bylaws of Paxson Hawaii License, Inc.(4)
 3.123.1   --    Articles of Incorporation of Paxson Houston License, Inc.(6)
 3.123.2   --    Bylaws of Paxson Houston License, Inc.(6)
 3.124.1   --    Articles of Incorporation of Paxson Jacksonville License,
                 Inc.(7)
 3.124.2   --    Bylaws of Paxson Jacksonville License, Inc.(7)
 3.125.1   --    Articles of Incorporation Paxson Jax License, Inc.(7)
 3.125.2   --    Bylaws of Paxson Jax License, Inc.(7)
 3.126.1   --    Articles of Incorporation of Paxson Kansas City License,
                 Inc.(4)
 3.126.2   --    Bylaws of Paxson Kansas City License, Inc.(4)
 3.127.1   --    Articles of Incorporation of Paxson Knoxville License,
                 Inc.(4)
 3.127.2   --    Bylaws of Paxson Knoxville License, Inc.(4)
 3.128.1   --    Articles of Incorporation of Paxson Lexington License,
                 Inc.(4)
 3.128.2   --    Bylaws of Paxson Lexington License, Inc.(4)
 3.129.1   --    Articles of Incorporation of Paxson Los Angeles License,
                 Inc.(6)
 3.129.2   --    Bylaws of Paxson Los Angeles License, Inc.(6)
 3.130.1   --    Articles of Incorporation of Paxson Merchandising &
                 Licensing, Inc.(7)
 3.130.2   --    Bylaws of Paxson Merchandising & Licensing, Inc.(7)
 3.131.1   --    Articles of Incorporation of Paxson Miami-35 License,
                 Inc.(4)
 3.131.2   --    Bylaws of Paxson Miami-35 License, Inc.(4)
 3.132.1   --    Articles of Incorporation of Paxson Minneapolis License,
                 Inc.(6)
 3.132.2   --    Bylaws of Paxson Minneapolis License, Inc.(6)
 3.133.1   --    Articles of Incorporation of Paxson Mobile License, Inc.(4)
 3.133.2   --    Bylaws of Paxson Mobile License, Inc.(4)
 3.134.1   --    Articles of Incorporation of Paxson New York License,
                 Inc.(6)
 3.134.2   --    Bylaws of Paxson New York License, Inc.(6)
 3.135.1   --    Articles of Incorporation of Paxson Norfolk License, Inc.(7)


                                       II-7




EXHIBIT
  NO.                                    DESCRIPTION
- -------                                  -----------
           
 3.135.2   --    Bylaws of Paxson Norfolk License, Inc.(7)
 3.136.1   --    Articles of Incorporation of Paxson Oklahoma City License,
                 Inc.(4)
 3.136.2   --    Bylaws of Paxson Oklahoma City License, Inc.(4)
 3.137.1   --    Articles of Incorporation of Paxson Orlando License, Inc.(4)
 3.137.2   --    Bylaws of Paxson Orlando License, Inc.(4)
 3.138.1   --    Articles of Incorporation of Paxson Philadelphia License,
                 Inc.(6)
 3.138.2   --    Bylaws of Paxson Philadelphia License, Inc.(6)
 3.139.1   --    Articles of Incorporation of Paxson Phoenix License, Inc.(6)
 3.139.2   --    Bylaws of Paxson Phoenix License, Inc.(6)
 3.140.1   --    Articles of Incorporation of Paxson Portland License,
                 Inc.(4)
 3.140.2   --    Bylaws of Paxson Portland License, Inc.(4)
 3.141.1   --    Articles of Incorporation of Paxson Productions, Inc.(7)
 3.141.2   --    Bylaws of Paxson Productions, Inc.(7)
 3.142.1   --    Articles of Incorporation of Paxson Roanoke License, Inc.(4)
 3.142.2   --    Bylaws of Paxson Roanoke License, Inc.(4)
 3.143.1   --    Articles of Incorporation of Paxson Sacramento License,
                 Inc.(3)
 3.143.2   --    Bylaws of Paxson Sacramento License, Inc.(3)
 3.144.1   --    Articles of Incorporation of Paxson Salem License, Inc.(4)
 3.144.2   --    Bylaws of Paxson Salem License, Inc.(4)
 3.145.1   --    Articles of Incorporation of Paxson Salt Lake City License,
                 Inc.(4)
 3.145.2   --    Bylaws of Paxson Salt Lake City License, Inc.(4)
 3.146.1   --    Articles of Incorporation of Paxson San Antonio License,
                 Inc.(7)
 3.146.2   --    Bylaws of Paxson San Antonio License, Inc.(7)
 3.147.1   --    Articles of Incorporation of Paxson San Jose License,
                 Inc.(6)
 3.147.2   --    Bylaws of Paxson San Jose License, Inc.(6)
 3.148.1   --    Articles of Incorporation of Paxson Scranton License,
                 Inc.(4)
 3.148.2   --    Bylaws of Paxson Scranton License, Inc.(4)
 3.149.1   --    Articles of Incorporation of Paxson Seattle License, Inc.(3)
 3.149.2   --    Bylaws of Paxson Seattle License, Inc.(3)
 3.150.1   --    Articles of Incorporation of Paxson Shreveport License,
                 Inc.(4)
 3.150.2   --    Bylaws of Paxson Shreveport License, Inc.(4)
 3.151.1   --    Articles of Incorporation of Paxson Spokane License, Inc.(4)
 3.151.2   --    Bylaws of Paxson Spokane License, Inc.(4)
 3.152.1   --    Articles of Incorporation of Paxson Sports of Miami, Inc.(3)
 3.152.2   --    Bylaws of Paxson Sports of Miami, Inc.(3)
 3.153.1   --    Articles of Incorporation of Paxson St. Croix License,
                 Inc.(4)
 3.153.2   --    Bylaws of Paxson St. Croix License, Inc.(4)
 3.154.1   --    Articles of Incorporation of Paxson Syracuse License,
                 Inc.(4)
 3.154.2   --    Bylaws of Paxson Syracuse License, Inc.(4)
 3.155.1   --    Articles of Incorporation of Paxson Tampa-66 License,
                 Inc.(4)
 3.155.2   --    Bylaws of Paxson Tampa-66 License, Inc.(4)
 3.156.1   --    Articles of Incorporation of Paxson Television Productions,
                 Inc.(4)
 3.156.2   --    Bylaws of Paxson Television Productions, Inc.(4)
 3.157.1   --    Articles of Incorporation of Paxson Television, Inc.(7)


                                       II-8




EXHIBIT
  NO.                                    DESCRIPTION
- -------                                  -----------
           
 3.157.2   --    Bylaws of Paxson Television, Inc.(7)
 3.158.1   --    Articles of Incorporation of Paxson Tennessee License,
                 Inc.(4)
 3.158.2   --    Bylaws of Paxson Tennessee License, Inc.(4)
 3.159.1   --    Articles of Incorporation of Paxson Tulsa License, Inc.(4)
 3.159.2   --    Bylaws of Paxson Tulsa License, Inc.(4)
 3.160.1   --    Articles of Incorporation of Paxson Washington License,
                 Inc.(6)
 3.160.2   --    Bylaws of Paxson Washington License, Inc.(6)
 3.161.1   --    Articles of Incorporation of Paxson Wausau License, Inc.(4)
 3.161.2   --    Bylaws of Paxson Wausau License, Inc.(4)
 3.162.1   --    Articles of Incorporation of PCC Direct, Inc.(3)
 3.162.2   --    Bylaws of PCC Direct, Inc.(3)
 3.163.1   --    Articles of Incorporation of RDP Communications License of
                 Indianapolis, Inc.(7)
 3.163.2   --    Bylaws of RDP Communications License of Indianapolis,
                 Inc.(7)
 3.164.1   --    Articles of Incorporation of RDP Communications of
                 Indianapolis, Inc.(7)
 3.164.2   --    Bylaws of RDP Communications of Indianapolis, Inc.(7)
 3.165.1   --    Articles of Incorporation of RDP Communications, Inc.(7)
 3.165.2   --    Bylaws of RDP Communications, Inc.(7)
 3.166.1   --    Certificate of Incorporation of Travel Channel Acquisition
                 Corporation(4)
 3.166.2   --    Bylaws of Travel Channel Acquisition Corporation(4)
 4.1       --    Indenture, dated as of January 14, 2002, among Paxson
                 Communications Corporation, its domestic subsidiaries and
                 The Bank of New York, as trustee(8)
 4.2       --    Registration Rights Agreement, dated January 14, 2002, among
                 Paxson Communications Corporation, its domestic
                 subsidiaries, Salomon Smith Barney Inc., UBS Warburg LLC,
                 Bear, Stearns & Co., Inc. and Credit Suisse First Boston
                 Corporation(8)
 4.3       --    Purchase Agreement, dated January 7, 2002, among Paxson
                 Communications Corporation, its domestic subsidiaries, and
                 Salomon Smith Barney Inc., UBS Warburg LLC, Bear, Stearns &
                 Co. Inc., and Credit Suisse First Boston Corporation(8)
 4.4       --    Form of Note (contained in Exhibit 4.1)
12.1       --    Computation of Ratio of Earnings to Fixed Charges*
21.1       --    List of Subsidiaries(8)
23.1       --    Consent of PricewaterhouseCoopers LLP, independent certified
                 public accountants*
24.1       --    Powers of Attorney (included on signature pages of
                 Registration Statement)
25.1       --    Statement of Eligibility of Trustee, The Bank of New York,
                 on Form T-1*
99.1       --    Form of Letter of Transmittal for the Original Notes*
99.2       --    Form of Notice of Guaranteed Delivery for the Original
                 Notes*


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

(1) Filed with the Company's Annual Report on Form 10-K for the year ended
    December 31, 1994 and incorporated herein by reference.

(2) Filed with the Company's Quarterly Report on Form 10-Q for the quarter ended
    March 31, 2001, and incorporated herein by reference.

(3) Filed with the Company's Registration Statement on Form S-3, as amended,
    filed August 15, 1996, Registration No. 333-10267 and incorporated herein by
    reference.

(4) Filed with the Company's Registration Statement on Form S-4, as amended,
    filed July 23, 1998, Registration No. 333-59641, and incorporated herein by
    reference.

(5) Filed with the Company's Report on Form 8-K, dated September 15, 1999, and
    incorporated herein by reference.

                                       II-9


(6) Filed with the Company's Registration Statement on Form S-4, as amended,
    filed January 23, 1996, Registration No. 33-63765 and incorporated herein by
    reference.

(7) Filed with the Company's Registration Statement on Form S-4, as amended,
    filed October 24, 2001, Registration No. 33-69192 and incorporated herein by
    reference.

(8) Filed with the Company's Annual Report on Form 10-K for the year ended
    December 31, 2001 and incorporated herein by reference.

 *  Filed herewith.

     (b) Financial Statement Schedules

   REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ON FINANCIAL STATEMENT
                                    SCHEDULE

To the Board of Directors and Stockholders
of Paxson Communications Corporation:

Our audits of the consolidated financial statements referred to in our report
dated February 19, 2002, appearing in the Paxson Communications Corporation
Annual Report on Form 10-K for the year ended December 31, 2001, also included
an audit of the accompanying financial statement schedule of Valuation and
Qualifying Accounts. In our opinion, this financial statement schedule presents
fairly, in all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements.

PricewaterhouseCoopers LLP
Miami, Florida
February 19, 2002

                                                                     SCHEDULE II

                       PAXSON COMMUNICATIONS CORPORATION

                       VALUATION AND QUALIFYING ACCOUNTS
                  FOR THE THREE YEARS ENDED DECEMBER 31, 2001
                                 (IN THOUSANDS)



                COLUMN A                   COLUMN B         COLUMN C            COLUMN D       COLUMN E
                --------                  ----------        --------           ----------     ----------
                                                            ADDITIONS
                                                       -------------------
                                                        CHARGED
                                          BALANCE AT      TO                                  BALANCE AT
                                          BEGINNING    COSTS AND                                END OF
                                           OF YEAR     EXPENSES     OTHER      DEDUCTIONS        YEAR
                                          ----------   ---------   -------     ----------     ----------
                                                                               
FOR THE YEAR ENDED DECEMBER 31, 2001:
  Allowance for doubtful accounts.......   $ 4,167      $ 2,119    $    --      $(2,651)(1)    $  3,635
                                           =======      =======    =======      =======        ========
  Deferred tax assets valuation
     allowance..........................   $84,204      $    --    $72,549(2)   $    --        $156,753
                                           =======      =======    =======      =======        ========
  Restructuring reserves................   $ 5,677      $(1,229)   $    --      $(2,349)(3)    $  2,099
                                           =======      =======    =======      =======        ========
FOR THE YEAR ENDED DECEMBER 31, 2000:
  Allowance for doubtful accounts.......   $ 4,255      $ 3,277    $    --      $(3,365)(1)    $  4,167
                                           =======      =======    =======      =======        ========
  Deferred tax assets valuation
     allowance..........................   $27,429      $    --    $56,775(2)   $    --        $ 84,204
                                           =======      =======    =======      =======        ========
  Restructuring reserves................   $    --      $ 5,760    $    --      $   (83)(3)    $  5,677
                                           =======      =======    =======      =======        ========
FOR THE YEAR ENDED DECEMBER 31, 1999:
  Allowance for doubtful accounts.......   $ 3,953      $ 6,164    $    --      $(5,862)(1)    $  4,255
                                           =======      =======    =======      =======        ========
  Deferred tax assets valuation
     allowance..........................   $ 3,071      $    --    $24,358(2)   $    --        $ 27,429
                                           =======      =======    =======      =======        ========


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

(1) Write off of uncollectible receivables.
(2) Valuation allowance for net deferred tax assets due to uncertainty
    surrounding the Company's utilization of future tax benefits.
(3) Cash payments of termination benefits and lease payments.

                                      II-10


ITEM 22.

     The undersigned Registrants hereby undertake:

          (A)(1) To file, during any period in which offers or sales are being
     made, a post-effective amendment to this Registration statement:

             (i) To include any prospectus required by Section 10(a) (3) of the
        Securities Act of 1933, as amended;

             (ii) To reflect in the prospectus any facts or events arising after
        the effective date of the Registration Statement (or the most recent
        post-effective amendment thereof) which, individually or in the
        aggregate, represent a fundamental change in the information set forth
        in this registration statement. Notwithstanding the foregoing, any
        increase or decrease in volume of securities offered (if the total
        dollar value of securities offered would not exceed that which was
        registered) and any deviation from the low or high end of the estimated
        maximum offering range may be reflected in the form of prospectus filed
        with the Commission under Rule 424(b) if, in the aggregate, the changes
        in volume and price represent no more than 20 percent change in the
        maximum aggregate offering price set forth in the "Calculation of
        Registration Fee" table in the effective Registration Statement;

             (iii) To include any material information with respect to the plan
        of distribution not previously disclosed in the Registration Statement
        or any material change to such information in this Registration
        Statement;

          (2) That, for the purpose of determining any liability under the
     Securities Act, each such post-effective amendment shall be deemed to be a
     new registration statement relating to the securities offered therein and
     the offering of such securities at that time shall be deemed to be the
     initial bona fide offering thereof.

          (3) To remove from registration by means of a post-effective amendment
     any of the securities being registered which remain unsold at the
     termination of the offering.

          (B) To respond to requests for information that is incorporated by
     reference into the prospectus under Items 4, 10(b), 11, or 13 of this form,
     within one business day of receipt of such request, and to send the
     incorporated documents by first class mail or other equally prompt means.
     This includes information contained in documents filed after the effective
     date of the registration statement through the date of responding to the
     request.

          (C) To supply by means of a post-effective amendment all information
     concerning a transaction, and the company being acquired involved therein,
     that was not the subject of and included in the Registration Statement when
     it became effective.

     Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, and controlling persons of the
Registrants under the foregoing provisions, or otherwise, the Registrants have
been advised that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in said act and is,
therefore, unenforceable. If a claim for indemnification against such
liabilities (other than the payment by the Registrants of expenses incurred or
paid by a director, officer or controlling person of the Registrants in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrants will, unless in the opinion of their counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by them is
against public policy as expressed in the act and will be governed by the final
adjudication of such issue.

                                      II-11


                                   SIGNATURES

     Under the requirements of the Securities Act of 1933, the undersigned
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of West Palm
Beach, State of Florida, on March 15, 2002.

                                          PAXSON COMMUNICATIONS CORPORATION

                                          By:     /s/ JEFFREY SAGANSKY
                                            ------------------------------------
                                                      Jeffrey Sagansky
                                                         President

                               POWER OF ATTORNEY

     Each of the undersigned officers and directors of PAXSON COMMUNICATIONS
CORPORATION (the "Company"), a Delaware corporation, for himself and not for one
another, does hereby constitute and appoint ANTHONY L. MORRISON and ADAM K.
WEINSTEIN, and each and either of them and his substitutes, a true and lawful
attorney in his name, place and stead, in any and all capacities, to sign his
name to any and all amendments to this registration statement, including
post-effective amendments, and to cause the same to be filed with the Securities
and Exchange Commission, granting unto said attorneys and each of them full
power of substitution and full power and authority to do and perform any act and
thing necessary and proper to be done in the premises, as fully to all intents
and purposes as the undersigned could do if personally present, and each of the
undersigned for himself hereby ratifies and confirms all that said attorneys or
any one of them shall lawfully do or cause to be done by virtue hereof.

     Under the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.



                   SIGNATURES                                    TITLE                       DATE
                   ----------                                    -----                       ----
                                                                                  



              /s/ LOWELL W. PAXSON                  Chairman of the Board, Director     March 15, 2002
- ------------------------------------------------
                Lowell W. Paxson




              /s/ JEFFREY SAGANSKY                     President, Chief Executive       March 15, 2002
- ------------------------------------------------      Officer, Director (Principal
                Jeffrey Sagansky                           Executive Officer)




          /s/ THOMAS E. SEVERSON, JR.                 Senior Vice President, Chief      March 15, 2002
- ------------------------------------------------      Financial Officer (Principal
            Thomas E. Severson, Jr.                        Financial Officer)




              /s/ RONALD L. RUBIN                   Vice President, Chief Accounting    March 15, 2002
- ------------------------------------------------     Officer, Corporate Controller
                Ronald L. Rubin




              /s/ BRUCE L. BURNHAM                              Director                March 15, 2002
- ------------------------------------------------
                Bruce L. Burnham


                                      II-12




                   SIGNATURES                                    TITLE                       DATE
                   ----------                                    -----                       ----

                                                                                  




             /s/ JAMES L. GREENWALD                             Director                March 15, 2002
- ------------------------------------------------
               James L. Greenwald




              /s/ HENRY J. BRANDON                              Director                March 15, 2002
- ------------------------------------------------
                Henry J. Brandon


                                      II-13


                                   SIGNATURES

     Under the requirements of the Securities Act of 1933, as amended, each of
the Additional Registrants listed directly below has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of West Palm Beach, State of Florida, on March 15,
2002.

                            ADDITIONAL REGISTRANTS:

     BUD HITS, INC. (a Florida corporation)
     BUD SONGS, INC. (a Florida corporation)
     CAP COMMUNICATIONS LICENSE OF NEW LONDON, INC. (a Florida corporation)
     CAP COMMUNICATIONS OF NEW LONDON, INC. (a Florida corporation)
     CAP COMMUNICATIONS, INC. (a Florida corporation)
     CHANNEL 66 OF TAMPA, INC. (a Florida corporation)
     CLEARLAKE PRODUCTIONS, INC. (a Florida corporation)
     COCOLA MEDIA CORPORATION OF FLORIDA (a Delaware corporation)
     COCOLA MEDIA CORPORATION OF SAN FRANCISCO, INC. (a California corporation)
     DP MEDIA, INC. (a Florida corporation)
     DP MEDIA LICENSE OF BATTLE CREEK, INC. (a Florida corporation)
     DP MEDIA LICENSE OF BOSTON, INC. (a Florida corporation)
     DP MEDIA LICENSE OF MARTINSBURG, INC. (a Florida corporation)
     DP MEDIA LICENSE OF MILWAUKEE, INC. (a Florida corporation)
     DP MEDIA LICENSE OF RALEIGH DURHAM, INC. (a Florida corporation)
     DP MEDIA OF BATTLE CREEK, INC. (a Florida corporation)
     DP MEDIA OF BOSTON, INC. (a Florida corporation)
     DP MEDIA OF MARTINSBURG, INC. (a Florida corporation)
     DP MEDIA OF MILWAUKEE, INC. (a Florida corporation)
     DP MEDIA OF RALEIGH DURHAM, INC. (a Florida corporation)
     DP MEDIA OF ST. LOUIS, INC. (a Florida corporation)
     FLAGLER PRODUCTIONS, INC. (a Florida corporation)
     HISPANIC BROADCASTING, INC. (a Florida corporation)
     IRON MOUNTAIN PRODUCTIONS, INC. (a Florida corporation)
     OCEAN STATE TELEVISION, LLC (a Delaware limited liability company)
     PAX HITS PUBLISHING, INC. (a Florida corporation)
     PAX INTERNET, INC. (a Florida corporation)
     PAX NET TELEVISION PRODUCTIONS, INC. (a Florida corporation)
     PAX NET, INC. (a Delaware corporation)
     PAXSON AKRON LICENSE, INC. (a Florida corporation)
     PAXSON ALBANY LICENSE, INC. (a Florida corporation)
     PAXSON ALBUQUERQUE LICENSE, INC. (a Florida corporation)
     PAXSON ATLANTA LICENSE, INC. (a Florida corporation)
     PAXSON BIRMINGHAM LICENSE, INC. (a Florida corporation)
     PAXSON BOSTON LICENSE, INC. (a Florida corporation)
     PAXSON BOSTON-68 LICENSE, INC. (a Florida corporation)
     PAXSON BUFFALO LICENSE, INC. (a Florida corporation)
     PAXSON CEDAR RAPIDS LICENSE, INC. (a Florida corporation)
     PAXSON CHARLESTON LICENSE, INC. (a Florida corporation)
     PAXSON CHICAGO LICENSE, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS LICENSE COMPANY, LLC (a Delaware limited liability
     company)
     PAXSON COMMUNICATIONS LPTV, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS MANAGEMENT COMPANY, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF AKRON-23, INC. (a Florida corporation)

                                      II-14


     PAXSON COMMUNICATIONS OF ALBANY-55, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF ALBUQUERQUE-14, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF ATLANTA-14, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF BIRMINGHAM-44, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF BOSTON-46, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF BOSTON-60, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF BOSTON-68, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF BUFFALO-51, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF CEDAR RAPIDS-48, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF CHARLESTON-29, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF CHICAGO-38, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF DALLAS-68, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF DAVENPORT-67, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF DENVER-59, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF DES MOINES-39, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF DETROIT-31, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF FAYETTEVILLE-62, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF FRESNO-61, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF GREENSBORO-16, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF GREENVILLE-38, I NC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF HONOLULU-66, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF HOUSTON-49, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF JACKSONVILLE-21, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF JACKSONVILLE-35, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF KANSAS CITY-50, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF KNOXVILLE-54, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF LEXINGTON-67, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF LOS ANGELES-30, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF LOUISVILLE-21, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF MEMPHIS-50, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF MIAMI-35, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF MINNEAPOLIS-41, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF MOBILE-61, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF NASHVILLE-28, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF NEW ORLEANS-49, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF NEW YORK-31, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF NORFOLK-49, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF OKLAHOMA CITY-62, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF ORLANDO-56, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF PHILADELPHIA-61, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF PHOENIX-13, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF PHOENIX-51, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF PITTSBURGH-40, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF PORTLAND-22, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF PORTLAND-23, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF PROVIDENCE-69, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF ROANOKE-38, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF SACRAMENTO-29, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF SALT LAKE CITY-30, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF SAN ANTONIO-26, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF SAN JOSE-65, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF SAN JUAN, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF SCRANTON-64, INC. (a Florida corporation)
                                      II-15


     PAXSON COMMUNICATIONS OF SEATTLE-33, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF SHREVEPORT-21, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF SPOKANE-34, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF ST. CROIX-15, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF SYRACUSE-56, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF TAMPA-66, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF TUCSON-46, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF TULSA-44, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF WASHINGTON-66, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF WAUSAU-46, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS OF WEST PALM BEACH-67, INC. (a Florida corporation)
     PAXSON COMMUNICATIONS TELEVISION, INC. (a Florida corporation)
     PAXSON DALLAS LICENSE, INC. (a Florida corporation)
     PAXSON DAVENPORT LICENSE, INC. (a Florida corporation)
     PAXSON DENVER LICENSE, INC. (a Florida corporation)
     PAXSON DES MOINES LICENSE, INC. (a Florida corporation)
     PAXSON DETROIT LICENSE, INC. (a Florida corporation)
     PAXSON DEVELOPMENT, INC. (a Florida corporation)
     PAXSON FAYETTEVILLE LICENSE, INC. (a Florida corporation)
     PAXSON FRESNO LICENSE, INC. (a Florida corporation)
     PAXSON GREENSBORO LICENSE, INC. (a Florida corporation)
     PAXSON GREENVILLE LICENSE, INC. (a Florida corporation)
     PAXSON HAWAII LICENSE, INC. (a Florida corporation)
     PAXSON HOUSTON LICENSE, INC. (a Florida corporation)
     PAXSON JACKSONVILLE LICENSE, INC. (a Florida corporation)
     PAXSON JAX LICENSE, INC. (a Florida corporation)
     PAXSON KANSAS CITY LICENSE, INC. (a Florida corporation)
     PAXSON KNOXVILLE LICENSE, INC. (a Florida corporation)
     PAXSON LEXINGTON LICENSE, INC. (a Florida corporation)
     PAXSON LOS ANGELES LICENSE, INC. (a Florida corporation)
     PAXSON MERCHANDISING & LICENSING, INC. (a Florida corporation)
     PAXSON MIAMI-35 LICENSE, INC. (a Florida corporation)
     PAXSON MINNEAPOLIS LICENSE, INC. (a Florida corporation)
     PAXSON MOBILE LICENSE, INC. (a Florida corporation)
     PAXSON NEW YORK LICENSE, INC. (a Florida corporation)
     PAXSON NORFOLK LICENSE, INC. (a Florida corporation)
     PAXSON OKLAHOMA CITY LICENSE, INC. (a Florida corporation)
     PAXSON ORLANDO LICENSE, INC. (a Florida corporation)
     PAXSON PHILADELPHIA LICENSE, INC. (a Florida corporation)
     PAXSON PHOENIX LICENSE, INC. (a Florida corporation)
     PAXSON PORTLAND LICENSE, INC. (a Florida corporation)
     PAXSON PRODUCTIONS, INC. (a Florida corporation)
     PAXSON ROANOKE LICENSE, INC. (a Florida corporation)
     PAXSON SACRAMENTO LICENSE, INC. (a Florida corporation)
     PAXSON SALEM LICENSE, INC. (a Florida corporation)
     PAXSON SALT LAKE CITY LICENSE, INC. (a Florida corporation)
     PAXSON SAN ANTONIO LICENSE, INC. (a Florida corporation)
     PAXSON SAN JOSE LICENSE, INC. (a Florida corporation)
     PAXSON SCRANTON LICENSE, INC. (a Florida corporation)
     PAXSON SEATTLE LICENSE, INC. (a Florida corporation)
     PAXSON SHREVEPORT LICENSE, INC. (a Florida corporation)
     PAXSON SPOKANE LICENSE, INC. (a Florida corporation)
     PAXSON SPORTS OF MIAMI, INC. (a Florida corporation)
                                      II-16


     PAXSON ST. CROIX LICENSE, INC. (a Florida corporation)
     PAXSON SYRACUSE LICENSE, INC. (a Florida corporation)
     PAXSON TAMPA-66 LICENSE, INC. (a Florida corporation)
     PAXSON TELEVISION PRODUCTIONS, INC. (a Florida corporation)
     PAXSON TELEVISION, INC. (a Florida corporation)
     PAXSON TENNESSEE LICENSE, INC. (a Florida corporation)
     PAXSON TULSA LICENSE, INC. (a Florida corporation)
     PAXSON WASHINGTON LICENSE, INC. (a Florida corporation)
     PAXSON WAUSAU LICENSE, INC. (a Florida corporation)
     PCC DIRECT, INC. (a Florida corporation)
     RDP COMMUNICATIONS LICENSE OF INDIANAPOLIS, INC. (a Florida corporation)
     RDP COMMUNICATIONS OF INDIANAPOLIS, INC. (a Florida corporation)
     RDP COMMUNICATIONS, INC. (a Florida corporation)
     TRAVEL CHANNEL ACQUISITION CORPORATION (a Florida corporation)

                                          By:    /s/ ANTHONY L. MORRISON
                                            ------------------------------------
                                          Name: Anthony L. Morrison
                                          Title: Vice President and Assistant
                                             Secretary of each of such
                                                 Additional
                                             Registrants

                                          AMERICA 51, L.P.
                                          (a Delaware limited partnership)

                                          By: Paxson Communications of
                                          Phoenix-51, Inc.,
                                          its General Partner and Limited
                                          Partner

                                          By: Paxson Communications Television,
                                          Inc.,
                                          its Limited Partner

                                          By:    /s/ ANTHONY L. MORRISON
                                            ------------------------------------
                                          Name: Anthony L. Morrison
                                          Title: Vice President and Assistant
                                             Secretary of such General and
                                             Limited Partners of such Additional
                                             Registrant

                               POWER OF ATTORNEY

     Each of the undersigned officers and directors of the Additional
Registrants listed directly above (or, in the case of America 51, L.P., of the
general partner and the limited partner of such Additional Registrant), for
himself and not for one another, does hereby constitute and appoint ANTHONY L.
MORRISON and ADAM K. WEINSTEIN, and each and either of them and his substitutes,
a true and lawful attorney in his name, place and stead, in any and all
capacities, to sign his name to any and all amendments to this registration
statement, including post-effective amendments, and to cause the same to be
filed with the Securities and Exchange Commission, granting unto said attorneys
and each of them full power of substitution and full power and authority to do
and perform any act and thing necessary and proper to be done in the premises,
as fully to all intents and purposes as the undersigned could do if personally
present, and each of the undersigned for himself hereby ratifies and confirms
all that said attorneys or any one of them shall lawfully do or cause to be done
by virtue hereof.

                                      II-17


     Under the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.



                   SIGNATURES                                    TITLE                       DATE
                   ----------                                    -----                       ----
                                                                                  



              /s/ LOWELL W. PAXSON                           Sole Director              March 15, 2002
- ------------------------------------------------
                Lowell W. Paxson




              /s/ JEFFREY SAGANSKY                   President (Principal Executive     March 15, 2002
- ------------------------------------------------                Officer)
                Jeffrey Sagansky




          /s/ THOMAS E. SEVERSON, JR.              Vice President and Chief Financial   March 15, 2002
- ------------------------------------------------      Officer (Principal Financial
            Thomas E. Severson, Jr.                 Officer and Principal Accounting
                                                                Officer)


                                      II-18


                               INDEX TO EXHIBITS



EXHIBIT
  NO.                                   DESCRIPTION
- -------                                 -----------
          
 3.1.1     --   Certificate of Incorporation of the Company(1)
 3.1.2     --   Bylaws of the Company(2)
 3.1.3     --   Certificate of Designations of the Company's 13 1/4%
                Cumulative Junior Exchangeable Preferred Stock(4)
 3.1.4     --   Certificate of Designations of the Company's 9 3/4% Series a
                Convertible Preferred Stock(4)
 3.1.5     --   Certificate of Designations of the Company's 8% Series B
                Convertible Exchangeable Preferred Stock(5)
 3.2.1     --   Certificate of Limited Partnership of America 51, L.P.(7)
 3.2.2     --   Second Amended and Restated Agreement of Limited Partnership
                of America 51, L.P.(7)
 3.3.1     --   Articles of Incorporation of Bud Hits, Inc.(7)
 3.3.2     --   Bylaws of Bud Hits, Inc.(7)
 3.4.1     --   Articles of Incorporation of Bud Songs, Inc.(7)
 3.4.2     --   Bylaws of Bud Songs, Inc.(7)
 3.5.1     --   Articles of Incorporation of CAP Communications, Inc.(7)
 3.5.2     --   Bylaws of CAP Communications, Inc.(7)
 3.6.1     --   Articles of Incorporation of CAP Communications License of
                New London, Inc.(7)
 3.6.2     --   Bylaws of CAP Communications License of New London, Inc.(7)
 3.7.1     --   Articles of Incorporation of CAP Communications of New
                London, Inc.(7)
 3.7.2     --   Bylaws of CAP Communications of New London, Inc.(7)
 3.8.1     --   Articles of Incorporation of Channel 66 of Tampa, Inc.(7)
 3.8.2     --   Bylaws of Channel 66 of Tampa, Inc.(7)
 3.9.1     --   Articles of Incorporation of Clearlake Productions, Inc.(7)
 3.9.2     --   Bylaws of Clearlake Productions, Inc.(7)
 3.10.1    --   Certificate of Incorporation of Cocola Media Corporation of
                Florida(4)
 3.10.2    --   Bylaws of Cocola Media Corporation of Florida(4)
 3.11.1    --   Certificate of Incorporation of Cocola Media Corporation of
                San Francisco, Inc.(4)
 3.11.2    --   Bylaws of Cocola Media Corporation of San Francisco(4)
 3.12.1    --   Amended and Restated Articles of Incorporation of DP Media,
                Inc.(7)
 3.12.2    --   Amended and Restated Bylaws of DP Media, Inc.(7)
 3.13.1    --   Articles of Incorporation of DP Media License of Battle
                Creek, Inc.(7)
 3.13.2    --   Bylaws of DP Media License of Battle Creek, Inc.(7)
 3.14.1    --   Articles of Incorporation of DP Media License of Boston,
                Inc.(7)
 3.14.2    --   Bylaws of DP Media License of Boston, Inc.(7)
 3.15.1    --   Articles of Incorporation of DP Media License of
                Martinsburg, Inc.(7)
 3.15.2    --   Bylaws of DP Media License of Martinsburg, Inc.(7)
 3.16.1    --   Articles of Incorporation of DP Media License of Milwaukee,
                Inc.(7)
 3.16.2    --   Bylaws of DP Media License of Milwaukee, Inc.(7)
 3.17.1    --   Articles of Incorporation of DP Media License of Raleigh
                Durham, Inc.(7)
 3.17.2    --   Bylaws of DP Media License of Raleigh Durham, Inc.(7)
 3.18.1    --   Articles of Incorporation of DP Media Battle Creek, Inc.(7)
 3.18.2    --   Articles of Amendment to Articles of Incorporation of DP
                Media Battle Creek, Inc.(7)
 3.18.3    --   Bylaws of DP Media Battle Creek, Inc.(7)
 3.19.1    --   Articles of Incorporation of DP Media of Boston, Inc.(7)
 3.19.2    --   Bylaws of DP Media of Boston, Inc.(7)





EXHIBIT
  NO.                                   DESCRIPTION
- -------                                 -----------
          
 3.20.1    --   Articles of Incorporation of DP Media of Martinsburg,
                Inc.(7)
 3.20.2    --   Bylaws of DP Media of Martinsburg, Inc.(7)
 3.21.1    --   Articles of Incorporation of DP Media of Milwaukee, Inc.(7)
 3.21.2    --   Bylaws of DP Media of Milwaukee, Inc.(7)
 3.22.1    --   Articles of Incorporation of DP Media of Raleigh Durham,
                Inc.(7)
 3.22.2    --   Articles of Amendment to Articles of Incorporation of DP
                Media of Raleigh Durham, Inc.(7)
 3.22.3    --   Bylaws of DP Media of Raleigh Durham, Inc.(7)
 3.23.1    --   Articles of Incorporation of DP Media of St. Louis, Inc.(7)
 3.23.2    --   Bylaws of DP Media of St. Louis, Inc.(7)
 3.24.1    --   Articles of Incorporation of Flagler Productions, Inc.(7)
 3.24.2    --   Bylaws of Flagler Productions, Inc.(7)
 3.25.1    --   Articles of Incorporation of Hispanic Broadcasting, Inc.(7)
 3.25.2    --   Articles of Amendment to Articles of Incorporation of
                Hispanic Broadcasting, Inc.(7)
 3.25.3    --   Amended and Restated Bylaws of Hispanic Broadcasting,
                Inc.(7)
 3.26.1    --   Articles of Incorporation of Iron Mountain Productions,
                Inc.(7)
 3.26.2    --   Bylaws of Iron Mountain Productions, Inc.(7)
 3.27.1    --   Certificate of Formation of Ocean State Television, LLC
                (formerly known as Offshore Television Company, LLC)(4)
 3.27.2    --   Operating Agreement of Ocean State Television, LLC(4)
 3.27.3    --   Amendment to Operating Agreement of Ocean State Television,
                LLC(7)
 3.27.4    --   Amendment to Certificate of Formation of Ocean State
                Television, LLC(7)
 3.28.1    --   Articles of Incorporation of Pax Hits Publishing, Inc.
                (formerly known as Pax Tunes, Inc.)(7)
 3.28.2    --   Articles of Amendment to Articles of Incorporation of Pax
                Hits Publishing, Inc.(7)
 3.28.3    --   Amended and Restated Bylaws of Pax Hits Publishing, Inc.(7)
 3.29.1    --   Articles of Incorporation of Pax Internet, Inc. (formerly
                known as Excel Marketing Enterprises, Inc.)(6)
 3.29.2    --   Articles of Amendment to Articles of Incorporation of Pax
                Internet, Inc.(7)
 3.29.3    --   Bylaws of Pax Internet, Inc.(6)
 3.30.1    --   Certificate of Incorporation of Pax Net, Inc.(4)
 3.30.2    --   Bylaws of Pax Net, Inc.(4)
 3.31.1    --   Articles of Incorporation of Pax Net Television Productions,
                Inc.)(4)
 3.31.2    --   Bylaws of Pax NetTelevision Productions, Inc.(4)
 3.32.1    --   Articles of Incorporation of Paxson Akron License, Inc.(6)
 3.32.2    --   Bylaws of Paxson Akron License, Inc.(6)
 3.33.1    --   Articles of Incorporation of Paxson Albany License, Inc.(3)
 3.33.2    --   Bylaws of Paxson Albany License, Inc.(3)
 3.34.1    --   Articles of Incorporation of Paxson Albuquerque License,
                Inc.(4)
 3.34.2    --   Bylaws of Paxson Albuquerque License, Inc.(4)
 3.35.1    --   Articles of Incorporation of Paxson Atlanta License, Inc.(6)
 3.35.2    --   Bylaws of Paxson Atlanta License, Inc.(6)
 3.36.1    --   Articles of Incorporation of Paxson Birmingham License,
                Inc.(3)
 3.36.2    --   Bylaws of Paxson Birmingham License, Inc.(3)
 3.37.1    --   Articles of Incorporation of Paxson Boston License, Inc.(6)
 3.37.2    --   Bylaws of Paxson Boston License, Inc.(6)
 3.38.1    --   Articles of Incorporation of Paxson Boston-68 License,
                Inc.(7)
 3.38.2    --   Bylaws of Paxson Boston-68 License, Inc.(7)





EXHIBIT
  NO.                                   DESCRIPTION
- -------                                 -----------
          
 3.39.1    --   Articles of Incorporation of Paxson Buffalo License, Inc.(4)
 3.39.2    --   Bylaws of Paxson Buffalo License, Inc.(4)
 3.40.1    --   Articles of Incorporation of Paxson Cedar Rapids License,
                Inc.(4)
 3.40.2    --   Bylaws of Paxson Cedar Rapids License, Inc.(4)
 3.41.1    --   Articles of Incorporation of Paxson Charleston License,
                Inc.(4)
 3.41.2    --   Bylaws of Paxson Charleston License, Inc.(4)
 3.42.1    --   Articles of Incorporation of Paxson Chicago License, Inc.(4)
 3.42.2    --   Bylaws of Paxson Chicago License, Inc.(4)
 3.43.1    --   Certificate of Incorporation of Paxson Communications
                License Company, LLC(4)
 3.43.2    --   Bylaws of Paxson Communications License Company, LLC(4)
 3.44.1    --   Articles of Incorporation of Paxson Communications LPTV,
                Inc.(3)
 3.44.2    --   Bylaws of Paxson Communications LPTV, Inc.(3)
 3.45.1    --   Articles of Incorporation of Paxson Communications
                Management Company (6)
 3.45.2    --   Bylaws of Paxson Communications Management Company(6)
 3.46.1    --   Articles of Incorporation of Paxson Communications of
                Akron-23, Inc.(6)
 3.46.2    --   Bylaws of Paxson Communications of Akron-23, Inc.(6)
 3.47.1    --   Articles of Incorporation of Paxson Communications of
                Albany-55, Inc.(3)
 3.47.2    --   Bylaws of Paxson Communications of Albany-55, Inc.(3)
 3.48.1    --   Articles of Incorporation of Paxson Communications of
                Albuquerque-14, Inc.(4)
 3.48.2    --   Bylaws of Paxson Communications of Albuquerque-14, Inc.(4)
 3.49.1    --   Articles of Incorporation of Paxson Communications of
                Atlanta 14, Inc.(6)
 3.49.2    --   Bylaws of Paxson Communications of Atlanta-14, Inc.(6)
 3.50.1    --   Articles of Incorporation of Paxson Communications of
                Birmingham-44, Inc.(3)
 3.50.2    --   Bylaws of Paxson Communications of Birmingham-44, Inc.(3)
 3.51.1    --   Articles of Incorporation of Paxson Communications of
                Boston-46, Inc.(3)
 3.51.2    --   Bylaws of Paxson Communications of Boston-46, Inc.(3)
 3.52.1    --   Articles of Incorporation of Paxson Communications of
                Boston-60, Inc.(6)
 3.52.2    --   Bylaws of Paxson Communications of Boston-60, Inc.(6)
 3.53.1    --   Articles of Incorporation of Paxson Communications of
                Boston-68, Inc.(7)
 3.53.2    --   Bylaws of Paxson Communications of Boston-68, Inc.(7)
 3.54.1    --   Articles of Incorporation of Paxson Communications of
                Buffalo-51, Inc.(4)
 3.54.2    --   Bylaws of Paxson Communications of Buffalo-51, Inc.(4)
 3.55.1    --   Articles of Incorporation of Paxson Communications of Cedar
                Rapids-48, Inc.(4)
 3.55.2    --   Bylaws of Paxson Communications of Cedar Rapids-48, Inc.(4)
 3.56.1    --   Articles of Incorporation of Paxson Communications of
                Charleston-29, Inc.(4)
 3.56.2    --   Bylaws of Paxson Communications of Charleston-29, Inc.(4)
 3.57.1    --   Articles of Incorporation of Paxson Communications of
                Chicago-38, Inc.(4)
 3.57.2    --   Bylaws of Paxson Communications of Chicago-38, Inc.(4)
 3.58.1    --   Articles of Incorporation of Paxson Communications of
                Dallas-68, Inc.(6)
 3.58.2    --   Bylaws of Paxson Communications of Dallas-68, Inc.(6)
 3.59.1    --   Articles of Incorporation of Paxson Communications of
                Davenport-67, Inc.(4)
 3.59.2    --   Bylaws of Paxson Communications of Davenport-67, Inc.(4)
 3.60.1    --   Articles of Incorporation of Paxson Communications of
                Denver-59, Inc.(6)
 3.60.2    --   Bylaws of Paxson Communications of Denver-59, Inc.(6)





EXHIBIT
  NO.                                   DESCRIPTION
- -------                                 -----------
          
 3.61.1    --   Articles of Incorporation of Paxson Communications of Des
                Moines-39 Inc.(4)
 3.61.2    --   Bylaws of Paxson Communications of Des Moines-39, Inc.(4)
 3.62.1    --   Articles of Incorporation of Paxson Communications of
                Detroit-31, Inc.(4)
 3.62.2    --   Bylaws of Paxson Communications of Detroit-31, Inc.(4)
 3.63.1    --   Articles of Incorporation of Paxson Communications of
                Fayetteville-62, Inc.(4)
 3.63.2    --   Bylaws of Paxson Communications of Fayetteville-62, Inc.(4)
 3.64.1    --   Articles of Incorporation of Paxson Communications of
                Fresno-61, Inc.(4)
 3.64.2    --   Bylaws of Paxson Communications of Fresno-61, Inc.(4)
 3.65.1    --   Articles of Incorporation of Paxson Communications of
                Greensboro-16, Inc.(3)
 3.65.2    --   Bylaws of Paxson Communications of Greensboro-16, Inc.(3)
 3.66.1    --   Articles of Incorporation of Paxson Communications of
                Greenville-38, Inc.(4)
 3.66.2    --   Bylaws of Paxson Communications of Greenville-38, Inc.(4)
 3.67.1    --   Articles of Incorporation of Paxson Communications of
                Honolulu-66, Inc. (formerly known as Paxson Communications
                of Hawaii-66, Inc.)(7)
 3.67.2    --   Articles of Amendment to Articles of Incorporation of Paxson
                Communications of Honolulu-66, Inc.(7)
 3.67.3    --   Bylaws of Paxson Communications of Honolulu-66, Inc.(7)
 3.68.1    --   Articles of Incorporation of Paxson Communications of
                Houston-49, Inc.(6)
 3.68.2    --   Bylaws of Paxson Communications of Houston-49, Inc.(6)
 3.69.1    --   Articles of Incorporation of Paxson Communications of
                Jacksonville-21, Inc.(7)
 3.69.2    --   Bylaws of Paxson Communications of Jacksonville-21, Inc.(7)
 3.70.1    --   Articles of Incorporation of Paxson Communications of
                Jacksonville-35, Inc.(7)
 3.70.2    --   Bylaws of Paxson Communications of Jacksonville-35, Inc.(7)
 3.71.1    --   Articles of Incorporation of Paxson Communications of Kansas
                City-50, Inc.(4)
 3.71.2    --   Bylaws of Paxson Communications of Kansas City-50, Inc.(4)
 3.72.1    --   Articles of Incorporation of Paxson Communications of
                Knoxville-54. Inc.(4)
 3.72.2    --   Bylaws of Paxson Communications of Knoxville-54, Inc.(4)
 3.73.1    --   Articles of Incorporation of Paxson Communications of
                Lexington-67, Inc.(4)
 3.73.2    --   Bylaws of Paxson Communications of Lexington-67, Inc.(4)
 3.74.1    --   Articles of Incorporation of Paxson Communications of Los
                Angeles-30, Inc.(6)
 3.74.2    --   Bylaws of Paxson Communications of Los Angeles-30, Inc.(6)
 3.75.1    --   Articles of Incorporation of Paxson Communications of
                Louisville-21, Inc.(7)
 3.75.2    --   Bylaws of Paxson Communications of Louisville-21, Inc.(7)
 3.76.1    --   Articles of Incorporation of Paxson Communications of
                Memphis-50, Inc.(4)
 3.76.2    --   Bylaws of Paxson Communications of Memphis-50, Inc.(4)
 3.77.1    --   Articles of Incorporation of Paxson Communications of
                Miami-35, Inc.(6)
 3.77.2    --   Bylaws of Paxson Communications of Miami-35, Inc.(6)
 3.78.1    --   Articles of Incorporation of Paxson Communications of
                Minneapolis-41, Inc.(6)
 3.78.2    --   Bylaws of Paxson Communications of Minneapolis-41, Inc.(6)
 3.79.1    --   Articles of Incorporation of Paxson Communications of
                Mobile-61, Inc.(4)
 3.79.2    --   Bylaws of Paxson Communications of Mobile-61, Inc.(4)
 3.80.1    --   Articles of Incorporation of Paxson Communications of
                Nashville-28, Inc.(4)
 3.80.2    --   Bylaws of Paxson Communications of Nashville-28, Inc.(4)
 3.81.1    --   Articles of Incorporation of Paxson Communications of New
                Orleans-49, Inc.(4)
 3.81.2    --   Bylaws of Paxson Communications of New Orleans-49, Inc.(4)
 3.82.1    --   Articles of Incorporation of Paxson Communications of New
                York-31, Inc.(4)





EXHIBIT
  NO.                                   DESCRIPTION
- -------                                 -----------
          
 3.82.2    --   Bylaws of Paxson Communications of New York-31, Inc.(4)
 3.83.1    --   Articles of Incorporation of Paxson Communications of
                Norfolk-49, Inc.(4)
 3.83.2    --   Bylaws of Paxson Communications of Norfolk-49, Inc.(4)
 3.84.1    --   Articles of Incorporation of Paxson Communications of
                Oklahoma City-62, Inc.(3)
 3.84.2    --   Bylaws of Paxson Communications of Oklahoma City-62, Inc.(3)
 3.85.1    --   Articles of Incorporation of Paxson Communications of
                Orlando-56, Inc.(6)
 3.85.2    --   Bylaws of Paxson Communications of Orlando-56, Inc.(6)
 3.86.1    --   Articles of Incorporation of Paxson Communications of
                Philadelphia-61, Inc.(6)
 3.86.2    --   Bylaws of Paxson Communications of Philadelphia-61, Inc.(6)
 3.87.1    --   Articles of Incorporation of Paxson Communications of
                Phoenix-13, Inc.(6)
 3.87.2    --   Bylaws of Paxson Communications of Phoenix-13, Inc.(6)
 3.88.1    --   Articles of Incorporation of Paxson Communications of
                Phoenix-51, Inc.(3)
 3.88.2    --   Bylaws of Paxson Communications of Phoenix-51, Inc.(3)
 3.89.1    --   Articles of Incorporation of Paxson Communications of
                Pittsburgh-40, Inc.(4)
 3.89.2    --   Bylaws of Paxson Communications of Pittsburgh-40, Inc.(4)
 3.90.1    --   Articles of Incorporation of Paxson Communications of
                Portland-22, Inc.(4)
 3.90.2    --   Bylaws of Paxson Communications of Portland-22, Inc.(4)
 3.91.1    --   Articles of Incorporation of Paxson Communications of
                Portland-23, Inc.(4)
 3.91.2    --   Bylaws of Paxson Communications of Portland-23, Inc.(4)
 3.92.1    --   Articles of Incorporation of Paxson Communications of
                Providence-69, Inc.(3)
 3.92.2    --   Bylaws of Paxson Communications of Providence-69, Inc.(3)
 3.93.1    --   Articles of Incorporation of Paxson Communications of
                Roanoke-38, Inc.(4)
 3.93.2    --   Bylaws of Paxson Communications of Roanoke-38, Inc.(4)
 3.94.1    --   Articles of Incorporation of Paxson Communications of
                Sacramento-29, Inc.(3)
 3.94.2    --   Bylaws of Paxson Communications of Sacramento-29, Inc.(3)
 3.95.1    --   Articles of Incorporation of Paxson Communications of Salt
                Lake City-30, Inc.(4)
 3.95.2    --   Bylaws of Paxson Communications of Salt Lake City-30,
                Inc.(4)
 3.96.1    --   Articles of Incorporation of Paxson Communications of San
                Antonio-26, Inc.(4)
 3.96.2    --   Bylaws of Paxson Communications of San Antonio-26, Inc.(4)
 3.97.1    --   Articles of Incorporation of Paxson Communications of San
                Jose-65, Inc.(6)
 3.97.2    --   Bylaws of Paxson Communications of San Jose-65, Inc.(6)
 3.98.1    --   Articles of Incorporation of Paxson Communications of San
                Juan, Inc.(3)
 3.98.2    --   Bylaws of Paxson Communications of San Juan, Inc.(3)
 3.99.1    --   Articles of Incorporation of Paxson Communications of
                Scranton-64, Inc.(4)
 3.99.2    --   Bylaws of Paxson Communications of Scranton-64, Inc.(4)
 3.100.1   --   Articles of Incorporation of Paxson Communications of
                Seattle-33, Inc.(3)
 3.100.2   --   Bylaws of Paxson Communications of Seattle-33, Inc.(3)
 3.101.1   --   Articles of Incorporation of Paxson Communications of
                Shreveport-21, Inc.(4)
 3.101.2   --   Bylaws of Paxson Communications of Shreveport-21, Inc.(4)
 3.102.1   --   Articles of Incorporation of Paxson Communications of
                Spokane-34, Inc.(4)
 3.102.2   --   Bylaws of Paxson Communications of Spokane-34, Inc.(4)
 3.103.1   --   Articles of Incorporation of Paxson Communications of St.
                Croix-15, Inc.(4)
 3.103.2   --   Bylaws of Paxson Communications of St. Croix-15, Inc.(4)
 3.104.1   --   Articles of Incorporation of Paxson Communications of
                Syracuse-56, Inc.(4)





EXHIBIT
  NO.                                   DESCRIPTION
- -------                                 -----------
          
 3.104.2   --   Bylaws of Paxson Communications of Syracuse-56, Inc.(4)
 3.105.1   --   Articles of Incorporation of Paxson Communications of
                Tampa-66, Inc.(6)
 3.105.2   --   Bylaws of Paxson Communications of Tampa-66, Inc.(6)
 3.106.1   --   Articles of Incorporation of Paxson Communications of
                Tucson-46, Inc.(4)
 3.106.2   --   Bylaws of Paxson Communications of Tucson-46, Inc.(4)
 3.107.1   --   Articles of Incorporation of Paxson Communications of
                Tulsa-44, Inc.(3)
 3.107.2   --   Bylaws of Paxson Communications of Tulsa-44, Inc.(3)
 3.108.1   --   Articles of Incorporation of Paxson Communications of
                Washington-66, Inc.(4)
 3.108.2   --   Bylaws of Paxson Communications of Washington-66, Inc.(4)
 3.109.1   --   Articles of Incorporation of Paxson Communications of
                Wausau-46, Inc.(4)
 3.109.2   --   Bylaws of Paxson Communications of Wausau-46, Inc.(4)
 3.110.1   --   Articles of Incorporation of Paxson Communications of West
                Palm Beach-67, Inc.(4)
 3.110.2   --   Bylaws of Paxson Communications of West Palm Beach-67,
                Inc.(4)
 3.111.1   --   Articles of Incorporation of Paxson Communications
                Television, Inc.(6)
 3.111.2   --   Bylaws of Paxson Communications Television, Inc.(6)
 3.112.1   --   Articles of Incorporation of Paxson Dallas License, Inc.(6)
 3.112.2   --   Bylaws of Paxson Dallas License, Inc.(6)
 3.113.1   --   Articles of Incorporation of Paxson Davenport License,
                Inc.(4)
 3.113.2   --   Bylaws of Paxson Davenport License, Inc.(4)
 3.114.1   --   Articles of Incorporation of Paxson Denver License, Inc.(3)
 3.114.2   --   Bylaws of Paxson Denver License, Inc.(3)
 3.115.1   --   Articles of Incorporation of Paxson Des Moines License,
                Inc.(4)
 3.115.2   --   Bylaws of Paxson Des Moines License, Inc.(4)
 3.116.1   --   Articles of Incorporation of Paxson Detroit License, Inc.(4)
 3.116.2   --   Bylaws of Paxson Detroit License, Inc.(4)
 3.117.1   --   Articles of Incorporation of Paxson Development, Inc.(7)
 3.117.2   --   Bylaws of Paxson Development, Inc.(7)
 3.118.1   --   Articles of Incorporation of Paxson Fayetteville License,
                Inc.(4)
 3.118.2   --   Bylaws of Paxson Fayetteville License, Inc.(4)
 3.119.1   --   Articles of Incorporation of Paxson Fresno License, Inc.(4)
 3.119.2   --   Bylaws of Paxson Fresno License, Inc.(4)
 3.120.1   --   Articles of Incorporation of Paxson Greensboro License,
                Inc.(3)
 3.120.2   --   Bylaws of Paxson Greensboro License, Inc.(3)
 3.121.1   --   Articles of Incorporation of Paxson Greenville License,
                Inc.(4)
 3.121.2   --   Bylaws of Paxson Greenville License, Inc.(4)
 3.122.1   --   Articles of Incorporation of Paxson Hawaii License, Inc.(4)
 3.122.2   --   Bylaws of Paxson Hawaii License, Inc.(4)
 3.123.1   --   Articles of Incorporation of Paxson Houston License, Inc.(6)
 3.123.2   --   Bylaws of Paxson Houston License, Inc.(6)
 3.124.1   --   Articles of Incorporation of Paxson Jacksonville License,
                Inc.(7)
 3.124.2   --   Bylaws of Paxson Jacksonville License, Inc.(7)
 3.125.1   --   Articles of Incorporation Paxson Jax License, Inc.(7
 3.125.2   --   Bylaws of Paxson Jax License, Inc.(7)
 3.126.1   --   Articles of Incorporation of Paxson Kansas City License,
                Inc.(4)





EXHIBIT
  NO.                                   DESCRIPTION
- -------                                 -----------
          
 3.126.2   --   Bylaws of Paxson Kansas City License, Inc.(4)
 3.127.1   --   Articles of Incorporation of Paxson Knoxville License,
                Inc.(4)
 3.127.2   --   Bylaws of Paxson Knoxville License, Inc.(4)
 3.128.1   --   Articles of Incorporation of Paxson Lexington License,
                Inc.(4)
 3.128.2   --   Bylaws of Paxson Lexington License, Inc.(4)
 3.129.1   --   Articles of Incorporation of Paxson Los Angeles License,
                Inc.(6)
 3.129.2   --   Bylaws of Paxson Los Angeles License, Inc.(6)
 3.130.1   --   Articles of Incorporation of Paxson Merchandising &
                Licensing, Inc.(7)
 3.130.2   --   Bylaws of Paxson Merchandising & Licensing, Inc.(7)
 3.131.1   --   Articles of Incorporation of Paxson Miami-35 License,
                Inc.(4)
 3.131.2   --   Bylaws of Paxson Miami-35 License, Inc.(4)
 3.132.1   --   Articles of Incorporation of Paxson Minneapolis License,
                Inc.(6)
 3.132.2   --   Bylaws of Paxson Minneapolis License, Inc.(6)
 3.133.1   --   Articles of Incorporation of Paxson Mobile License, Inc.(4)
 3.133.2   --   Bylaws of Paxson Mobile License, Inc.(4)
 3.134.1   --   Articles of Incorporation of Paxson New York License,
                Inc.(6)
 3.134.2   --   Bylaws of Paxson New York License, Inc.(6)
 3.135.1   --   Articles of Incorporation of Paxson Norfolk License, Inc.(7)
 3.135.2   --   Bylaws of Paxson Norfolk License, Inc.(7)
 3.136.1   --   Articles of Incorporation of Paxson Oklahoma City License,
                Inc.(4)
 3.136.2   --   Bylaws of Paxson Oklahoma City License, Inc.(4)
 3.137.1   --   Articles of Incorporation of Paxson Orlando License, Inc.(4)
 3.137.2   --   Bylaws of Paxson Orlando License, Inc.(4)
 3.138.1   --   Articles of Incorporation of Paxson Philadelphia License,
                Inc.(6)
 3.138.2   --   Bylaws of Paxson Philadelphia License, Inc.(6)
 3.139.1   --   Articles of Incorporation of Paxson Phoenix License, Inc.(6)
 3.139.2   --   Bylaws of Paxson Phoenix License, Inc.(6)
 3.140.1   --   Articles of Incorporation of Paxson Portland License,
                Inc.(4)
 3.140.2   --   Bylaws of Paxson Portland License, Inc.(4)
 3.141.1   --   Articles of Incorporation of Paxson Productions, Inc.(7)
 3.141.2   --   Bylaws of Paxson Productions, Inc.(7)
 3.142.1   --   Articles of Incorporation of Paxson Roanoke License, Inc.(4)
 3.142.2   --   Bylaws of Paxson Roanoke License, Inc.(4)
 3.143.1   --   Articles of Incorporation of Paxson Sacramento License,
                Inc.(3)
 3.143.2   --   Bylaws of Paxson Sacramento License, Inc.(3)
 3.144.1   --   Articles of Incorporation of Paxson Salem License, Inc.(4)
 3.144.2   --   Bylaws of Paxson Salem License, Inc.(4)
 3.145.1   --   Articles of Incorporation of Paxson Salt Lake City License,
                Inc.(4)
 3.145.2   --   Bylaws of Paxson Salt Lake City License, Inc.(4)
 3.146.1   --   Articles of Incorporation of Paxson San Antonio License,
                Inc.(7)
 3.146.2   --   Bylaws of Paxson San Antonio License, Inc.(7)
 3.147.1   --   Articles of Incorporation of Paxson San Jose License,
                Inc.(6)
 3.147.2   --   Bylaws of Paxson San Jose License, Inc.(6)
 3.148.1   --   Articles of Incorporation of Paxson Scranton License,
                Inc.(4)





EXHIBIT
  NO.                                   DESCRIPTION
- -------                                 -----------
          
 3.148.2   --   Bylaws of Paxson Scranton License, Inc.(4)
 3.149.1   --   Articles of Incorporation of Paxson Seattle License, Inc.(3)
 3.149.2   --   Bylaws of Paxson Seattle License, Inc.(3)
 3.150.1   --   Articles of Incorporation of Paxson Shreveport License,
                Inc.(4)
 3.150.2   --   Bylaws of Paxson Shreveport License, Inc.(4)
 3.151.1   --   Articles of Incorporation of Paxson Spokane License, Inc.(4)
 3.151.2   --   Bylaws of Paxson Spokane License, Inc.(4)
 3.152.1   --   Articles of Incorporation of Paxson Sports of Miami, Inc.(3)
 3.152.2   --   Bylaws of Paxson Sports of Miami, Inc.(3)
 3.153.1   --   Articles of Incorporation of Paxson St. Croix License,
                Inc.(4)
 3.153.2   --   Bylaws of Paxson St. Croix License, Inc.(4)
 3.154.1   --   Articles of Incorporation of Paxson Syracuse License,
                Inc.(4)
 3.154.2   --   Bylaws of Paxson Syracuse License, Inc.(4)
 3.155.1   --   Articles of Incorporation of Paxson Tampa-66 License,
                Inc.(4)
 3.155.2   --   Bylaws of Paxson Tampa-66 License, Inc.(4)
 3.156.1   --   Articles of Incorporation of Paxson Television Productions,
                Inc.(4)
 3.156.2   --   Bylaws of Paxson Television Productions, Inc.(4)
 3.157.1   --   Articles of Incorporation of Paxson Television, Inc.(7)
 3.157.2   --   Bylaws of Paxson Television, Inc.(7)
 3.158.1   --   Articles of Incorporation of Paxson Tennessee License,
                Inc.(4)
 3.158.2   --   Bylaws of Paxson Tennessee License, Inc.(4)
 3.159.1   --   Articles of Incorporation of Paxson Tulsa License, Inc.(4)
 3.159.2   --   Bylaws of Paxson Tulsa License, Inc.(4)
 3.160.1   --   Articles of Incorporation of Paxson Washington License,
                Inc.(6)
 3.160.2   --   Bylaws of Paxson Washington License, Inc.(6)
 3.161.1   --   Articles of Incorporation of Paxson Wausau License, Inc.(4)
 3.161.2   --   Bylaws of Paxson Wausau License, Inc.(4)
 3.162.1   --   Articles of Incorporation of PCC Direct, Inc.(3)
 3.162.2   --   Bylaws of PCC Direct, Inc.(3)
 3.163.1   --   Articles of Incorporation of RDP Communications License of
                Indianapolis, Inc.(7)
 3.163.2   --   Bylaws of RDP Communications License of Indianapolis,
                Inc.(7)
 3.164.1   --   Articles of Incorporation of RDP Communications of
                Indianapolis, Inc.(7)
 3.164.2   --   Bylaws of RDP Communications of Indianapolis, Inc.(7)
 3.165.1   --   Articles of Incorporation of RDP Communications, Inc.(7)
 3.165.2   --   Bylaws of RDP Communications, Inc.(7)
 3.166.1   --   Certificate of Incorporation of Travel Channel Acquisition
                Corporation(4)
 3.166.2   --   Bylaws of Travel Channel Acquisition Corporation(4)
 4.1       --   Indenture, dated as of January 14, 2002, among Paxson
                Communications Corporation, its domestic subsidiaries and
                The Bank of New York, as trustee(8)
 4.2       --   Registration Rights Agreement, dated January 14, 2002, among
                Paxson Communications Corporation, its domestic
                subsidiaries, Salomon Smith Barney Inc., UBS Warburg LLC,
                Bear, Stearns & Co., Inc. and Credit Suisse First Boston
                Corporation(8)
 4.3       --   Purchase Agreement, dated January 7, 2002, among Paxson
                Communications Corporation, its domestic subsidiaries, and
                Salomon Smith Barney Inc., UBS Warburg LLC, Bear, Stearns &
                Co. Inc., and Credit Suisse First Boston Corporation(8)
 4.4       --   Form of Note (contained in Exhibit 4.1)





EXHIBIT
  NO.                                   DESCRIPTION
- -------                                 -----------
          
12.1       --   Computation of Ratio of Earnings to Fixed Charges*
21.1       --   List of Subsidiaries(8)
23.1       --   Consent of PricewaterhouseCoopers LLP, independent certified
                public accountants*
24.1       --   Powers of Attorney (included on signature pages of
                Registration Statement)
25.1       --   Statement of Eligibility of Trustee, The Bank of New York,
                on Form T-1*
99.1       --   Form of Letter of Transmittal for the Original Notes*
99.2       --   Form of Notice of Guaranteed Delivery for the Original
                Notes*


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

(1) Filed with the Company's Annual Report on Form 10-K for the year ended
    December 31, 1994 and incorporated herein by reference.

(2) Filed with the Company's Quarterly Report on Form 10-Q for the quarter ended
    March 31, 2001, and incorporated herein by reference.

(3) Filed with the Company's Registration Statement on Form S-3, as amended,
    filed August 15, 1996, Registration No. 333-10267 and incorporated herein by
    reference.

(4) Filed with the Company's Registration Statement on Form S-4, as amended,
    filed July 23, 1998, Registration No. 333-59641, and incorporated herein by
    reference.

(5) Filed with the Company's Report on Form 8-K, dated September 15, 1999, and
    incorporated herein by reference.

(6) Filed with the Company's Registration Statement on Form S-4, as amended,
    filed January 23, 1996, Registration No. 33-63765 and incorporated herein by
    reference.

(7) Filed with the Company's Registration Statement on Form S-4, as amended,
    filed October 24, 2001, Registration No. 33-69192 and incorporated herein by
    reference.

(8) Filed with the Company's Annual Report on Form 10-K for the year ended
    December 31, 2001 and incorporated herein by reference.

 *  Filed herewith.

EX-12.1

                                                                    EXHIBIT 12.1

                        PAXSON COMMUNICATIONS CORPORATION
                CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES

                                 (In thousands)





                                                                          YEAR ENDED DECEMBER 31,
                                                   1997             1998           1999            2000            2001
                                                 ---------       ---------       ---------       ---------       ---------
                                                                                                  
Net (loss) income                                $ 214,689       $ (88,288)      $(160,372)      $(178,525)      $(203,782)
Equity in loss of unconsolidated investment            430          13,273           2,260             539              --
Extraordinary items                                     --              --              --              --           9,903
(Income) loss from discontinued operations        (251,193)         (1,182)             --              --              --
Provision (benefit) for income taxes               (21,879)        (37,389)        (57,257)            120             120
                                                 ---------       ---------       ---------       ---------       ---------
Earnings, as defined                             $ (57,953)      $(113,586)      $(215,369)      $ (177,866)    $ (193,759)
                                                 =========       =========       =========       ==========     ==========

Earnings, as defined                             $ (57,953)      $(113,586)      $(215,369)      $(177,866)      $(193,759)
Fixed charges, as below                             39,212          45,468          54,943          53,385          54,619
                                                 ---------       ---------       ---------       ---------       ---------
Total earnings, as defined                       $ (18,741)      $ (68,118)      $(160,426)      $(124,481)      $(139,140)
                                                 =========       =========       =========       =========       =========

Fixed charges, as defined:
Interest expense                                 $  37,790       $  41,906       $  50,286       $  47,973       $  49,722
Rental interest factor                               1,422           3,562           4,657           5,412           4,897
                                                 ---------       ---------       ---------       ---------       ---------
Total fixed charges, as defined                     39,212          45,468          54,943          53,385          54,619
                                                 ---------       ---------       ---------       ---------       ---------


Ratio of earnings to fixed charges                   (0.48)          (1.50)          (2.92)          (2.33)          (2.55)
                                                 =========       =========       =========       ==========     ==========
Earnings were insufficient to cover
  fixed charges by                               $ (57,953)      $(113,586)      $(215,369)      $(177,866)      $(193,759)
                                                 =========       =========       =========       ==========     ==========

EX-23.1

                                                                    EXHIBIT 23.1


              CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


We hereby consent to the use in this Registration Statement on Form S-4 of
Paxson Communications Corporation of our reports dated February 19, 2002
relating to the financial statements and financial statement schedule of Paxson
Communications Corporation, which appear in such Registration Statement. We
also consent to the reference to us under the heading "Experts" in such
Registration Statement.


PricewaterhouseCoopers LLP

Miami, Florida
March 13, 2002

EX-25.1

                                                                    Exhibit 25.1


================================================================================
                                    FORM T-1

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                            STATEMENT OF ELIGIBILITY
                   UNDER THE TRUST INDENTURE ACT OF 1939 OF A
                    CORPORATION DESIGNATED TO ACT AS TRUSTEE

                      CHECK IF AN APPLICATION TO DETERMINE
                      ELIGIBILITY OF A TRUSTEE PURSUANT TO
                             SECTION 305(b)(2) [ ]



                              THE BANK OF NEW YORK

               (Exact name of trustee as specified in its charter)

New York                                                13-5160382
(State of incorporation                                 (I.R.S. employer
if not a U.S. national bank)                            identification no.)

One Wall Street, New York, N.Y.                         10286
(Address of principal executive offices)                (Zip code)


                        PAXSON COMMUNICATIONS CORPORATION
               (Exact name of obligor as specified in its charter)


Delaware                                                59-3212788
(State or other jurisdiction of                         (I.R.S. employer
incorporation or organization)                          identification no.)

                         TABLE OF ADDITIONAL REGISTRANTS

AMERICA 51, L.P.                                      Delaware      86-0889042
BUD HITS, INC.                                         Florida      65-0912159
BUD SONGS, INC.                                        Florida      65-0897301
CAP COMMUNICATIONS LICENSE OF NEW LONDON, INC.         Florida      65-0882807
CAP COMMUNICATIONS OF NEW LONDON, INC.                 Florida      65-0882805
CAP COMMUNICATIONS, INC.                               Florida      65-0882809
CHANNEL 66 OF TAMPA, INC.                              Florida      59-3227857
CLEARLAKE PRODUCTIONS, INC.                            Florida      65-0863302
COCOLA MEDIA CORPORATION OF FLORIDA                   Delaware      77-0406411
COCOLA MEDIA CORPORATION OF SAN FRANCISCO, INC.      California     77-0448296
DP MEDIA, INC.                                         Florida      59-3227378
DP MEDIA LICENSE OF BATTLE CREEK, INC.                 Florida      65-0769770
DP MEDIA LICENSE OF BOSTON, INC.                       Florida      65-0822057
DP MEDIA LICENSE OF MARTINSBURG, INC.                  Florida      65-0769782
DP MEDIA LICENSE OF MILWAUKEE, INC.                    Florida      65-0817050





DP MEDIA LICENSE OF RALEIGH DURHAM, INC.               Florida      65-0769780
DP MEDIA OF BATTLE CREEK, INC.                         Florida      65-0773604
DP MEDIA OF BOSTON, INC.                               Florida      65-0829541
DP MEDIA OF MARTINSBURG, INC.                          Florida      65-0719860
DP MEDIA OF MILWAUKEE, INC.                            Florida      65-0816378
DP MEDIA OF RALEIGH DURHAM, INC.                       Florida      65-0733737
DP MEDIA OF ST. LOUIS, INC.                            Florida      65-0769772
FLAGLER PRODUCTIONS, INC.                              Florida      65-1118465
HISPANIC BROADCASTING, INC.                            Florida      59-2537913
IRON MOUNTAIN PRODUCTIONS, INC.                        Florida      65-1001631
OCEAN STATE TELEVISION, LLC                           Delaware       06-14832
PAX HITS PUBLISHING, INC                               Florida      65-0897299
PAX INTERNET, INC.                                     Florida      59-2907133
PAX NET TELEVISION PRODUCTIONS, INC.                   Florida      65-0830580
PAX NET, INC.                                         Delaware      65-0789886
PAXSON AKRON LICENSE, INC.                             Florida      65-0611729
PAXSON ALBANY LICENSE, INC.                            Florida      65-0736665
PAXSON ALBUQUERQUE LICENSE, INC.                       Florida      65-0813266
PAXSON ATLANTA LICENSE, INC.                           Florida      59-3291854
PAXSON BIRMINGHAM LICENSE, INC.                        Florida      65-0688716
PAXSON BOSTON LICENSE, INC.                            Florida      59-3283741
PAXSON BOSTON-68 LICENSE, INC.                         Florida      65-0964667
PAXSON BUFFALO LICENSE, INC.                           Florida      65-0744425
PAXSON CEDAR RAPIDS LICENSE, INC.                      Florida      65-0744422
PAXSON CHARLESTON LICENSE, INC.                        Florida      65-0780849
PAXSON CHICAGO LICENSE, INC.                           Florida      59-3498673
PAXSON COMMUNICATIONS LICENSE COMPANY, LLC            Delaware      65-0858700
PAXSON COMMUNICATIONS LPTV, INC.                       Florida      65-0641981
PAXSON COMMUNICATIONS MANAGEMENT COMPANY, INC.         Florida      59-3212233
PAXSON COMMUNICATIONS OF AKRON-23, INC.                Florida      65-0611718
PAXSON COMMUNICATIONS OF ALBANY-55, INC.               Florida      65-0628627
PAXSON COMMUNICATIONS OF ALBUQUERQUE-14, INC.          Florida      65-0766945
PAXSON COMMUNICATIONS OF ATLANTA-14, INC.              Florida      59-3235962
PAXSON COMMUNICATIONS OF BIRMINGHAM-44, INC.           Florida      65-0688713
PAXSON COMMUNICATIONS OF BOSTON-46, INC.               Florida      65-0686132
PAXSON COMMUNICATIONS OF BOSTON-60, INC.               Florida      59-3283737
PAXSON COMMUNICATIONS OF BOSTON-68, INC.               Florida      65-0918840
PAXSON COMMUNICATIONS OF BUFFALO-51, INC.              Florida      65-0744433
PAXSON COMMUNICATIONS OF CEDAR RAPIDS-48, INC          Florida      65-0744431
PAXSON COMMUNICATIONS OF CHARLESTON-29, INC.           Florida      65-0780847
PAXSON COMMUNICATIONS OF CHICAGO-38, INC.              Florida      65-0806274
PAXSON COMMUNICATIONS OF DALLAS-68, INC.               Florida      59-3283742
PAXSON COMMUNICATIONS OF DAVENPORT-67, INC.            Florida      65-0813879
PAXSON COMMUNICATIONS OF DENVER-59, INC.               Florida      65-0603895
PAXSON COMMUNICATIONS OF DES MOINES-39, INC.           Florida      65-0813632
PAXSON COMMUNICATIONS OF DETROIT-31, INC.              Florida      65-0735187
PAXSON COMMUNICATIONS OF FAYETTEVILLE-62, INC          Florida      65-0771647
PAXSON COMMUNICATIONS OF FRESNO-61, INC.               Florida      65-0742713
PAXSON COMMUNICATIONS OF GREENSBORO-16, INC.           Florida      65-0653894
PAXSON COMMUNICATIONS OF GREENVILLE-38, INC.           Florida      65-0813242
PAXSON COMMUNICATIONS OF HONOLULU-66, INC.             Florida      65-0754528
PAXSON COMMUNICATIONS OF HOUSTON-49, INC.              Florida      76-0461679
PAXSON COMMUNICATIONS OF JACKSONVILLE-21, INC.         Florida      65-1004849
COMMUNICATIONS OF JACKSONVILLE-35, INC.                Florida      65-0922580
PAXSON COMMUNICATIONS OF KANSAS CITY-50, INC.          Florida      65-0712686
PAXSON COMMUNICATIONS OF KNOXVILLE-54, INC.            Florida      65-0804455




                                      -2-


PAXSON COMMUNICATIONS OF LEXINGTON-67, INC.            Florida      65-0826029
PAXSON COMMUNICATIONS OF LOS ANGELES-30, INC.          Florida      59-3295991
PAXSON COMMUNICATIONS OF LOUISVILLE-21, INC            Florida      65-0917351
PAXSON COMMUNICATIONS OF MEMPHIS-50, INC.              Florida      65-0804519
PAXSON COMMUNICATIONS OF MIAMI-35, INC.                Florida      65-0471066
PAXSON COMMUNICATIONS OF MINNEAPOLIS-41, INC           Florida      59-3295983
PAXSON COMMUNICATIONS OF MOBILE-61, INC.               Florida      65-0815802
PAXSON COMMUNICATIONS OF NASHVILLE-28, INC.            Florida      65-0744429
PAXSON COMMUNICATIONS OF NEW ORLEANS-49, INC           Florida      65-0804451
PAXSON COMMUNICATIONS OF NEW YORK-31, INC              Florida      65-0752309
PAXSON COMMUNICATIONS OF NORFOLK-49, INC               Florida      65-0814356
PAXSON COMMUNICATIONS OF OKLAHOMA CITY-62, INC.        Florida      65-0682182
PAXSON COMMUNICATIONS OF ORLANDO-56, INC.              Florida      59-3297996
PAXSON COMMUNICATIONS OF PHILADELPHIA-61, INC.         Florida      59-3283731
PAXSON COMMUNICATIONS OF PHOENIX-13, INC.              Florida      65-0635181
PAXSON COMMUNICATIONS OF PHOENIX-51, INC.              Florida      65-0686052
PAXSON COMMUNICATIONS OF PITTSBURGH-40, INC.           Florida      65-0731832
PAXSON COMMUNICATIONS OF PORTLAND-22, INC.             Florida      65-0826031
PAXSON COMMUNICATIONS OF PORTLAND-23, INC.             Florida      65-0806275
PAXSON COMMUNICATIONS OF PROVIDENCE-69, INC.           Florida      65-0643775
PAXSON COMMUNICATIONS OF ROANOKE-38, INC.              Florida      65-0741687
PAXSON COMMUNICATIONS OF SACRAMENTO-29, INC.           Florida      65-0685880
PAXSON COMMUNICATIONS OF SALT LAKE CITY-30, INC.       Florida      65-0717339
PAXSON COMMUNICATIONS OF SAN ANTONIO-26, INC.          Florida      65-0826035
PAXSON COMMUNICATIONS OF SAN JOSE-65, INC.             Florida      59-3283735
PAXSON COMMUNICATIONS OF SAN JUAN, INC.                Florida      58-22195653
PAXSON COMMUNICATIONS OF SCRANTON-64, INC.             Florida      65-0735747
PAXSON COMMUNICATIONS OF SEATTLE-33, INC               Florida      65-0686130
PAXSON COMMUNICATIONS OF SHREVEPORT-21, INC.           Florida      65-0813244
PAXSON COMMUNICATIONS OF SPOKANE-34, INC.              Florida      65-0815799
PAXSON COMMUNICATIONS OF ST. CROIX-15, INC.            Florida      65-0815807
PAXSON COMMUNICATIONS OF SYRACUSE-56, INC.             Florida      65-0795912
PAXSON COMMUNICATIONS OF TAMPA-66, INC.                Florida      59-3227558
PAXSON COMMUNICATIONS OF TUCSON-46, INC.               Florida      65-0744426
PAXSON COMMUNICATIONS OF TULSA-44, INC.                Florida      65-0653898
PAXSON COMMUNICATIONS OF WASHINGTON-66, INC.           Florida      65-0735951
PAXSON COMMUNICATIONS OF WAUSAU-46, INC.               Florida       65-08317
PAXSON COMMUNICATIONS OF WEST PALM BEACH-67, INC.      Florida      65-0823013
PAXSON COMMUNICATIONS TELEVISION, INC.                 Florida      59-3283729
PAXSON DALLAS LICENSE, INC.                            Florida      59-3283743
PAXSON DAVENPORT LICENSE, INC.                         Florida      65-0813875
PAXSON DENVER LICENSE, INC.                            Florida      65-0645191
PAXSON DES MOINES LICENSE, INC.                        Florida      65-0813637
PAXSON DETROIT LICENSE, INC.                           Florida      65-0735190
PAXSON DEVELOPMENT, INC.                               Florida      65-0860488
PAXSON FAYETTEVILLE LICENSE, INC.                      Florida      65-0771656
PAXSON FRESNO LICENSE, INC.                            Florida      65-0742709
PAXSON GREENSBORO LICENSE, INC.                        Florida      65-0653901
PAXSON GREENVILLE LICENSE, INC.                        Florida      65-0813243
PAXSON HAWAII LICENSE, INC.                            Florida      65-0754523
PAXSON HOUSTON LICENSE, INC.                           Florida      76-0461475
PAXSON JACKSONVILLE LICENSE, INC.                      Florida      65-0903781
PAXSON JAX LICENSE, INC.                               Florida      65-1004850
PAXSON KANSAS CITY LICENSE, INC.                       Florida      65-0712711
PAXSON KNOXVILLE LICENSE, INC.                         Florida      65-0829210
PAXSON LEXINGTON LICENSE, INC.                         Florida      65-0826033




                                      -3-


PAXSON LOS ANGELES LICENSE, INC.                       Florida      59-3295992
PAXSON MERCHANDISING & LICENSING, INC.                 Florida      65-0926836
PAXSON MIAMI-35 LICENSE, INC.                          Florida      65-0752329
PAXSON MINNEAPOLIS LICENSE, INC.                       Florida      59-3295988
PAXSON MOBILE LICENSE, INC.                            Florida      65-0815806
PAXSON NEW YORK LICENSE, INC.                          Florida      65-0611721
PAXSON NORFOLK LICENSE, INC.                           Florida      65-1086982
PAXSON OKLAHOMA CITY LICENSE, INC.                     Florida      65-0741346
PAXSON ORLANDO LICENSE, INC.                           Florida      65-0806278
PAXSON PHILADELPHIA LICENSE, INC.                      Florida      59-3283730
PAXSON PHOENIX LICENSE, INC.                           Florida      65-0625873
PAXSON PORTLAND LICENSE, INC.                          Florida      65-0812841
PAXSON PRODUCTIONS, INC.                               Florida      65-0860490
PAXSON ROANOKE LICENSE, INC.                           Florida      65-0741692
PAXSON SACRAMENTO LICENSE, INC.                        Florida      65-0685878
PAXSON SALEM LICENSE, INC                              Florida      65-0826037
PAXSON SALT LAKE CITY LICENSE, INC.                    Florida      65-0748582
PAXSON SAN ANTONIO LICENSE, INC.                       Florida      65-1086981
PAXSON SAN JOSE LICENSE, INC.                          Florida      59-3283733
PAXSON SCRANTON LICENSE, INC.                          Florida      65-0735746
PAXSON SEATTLE LICENSE, INC.                           Florida      65-0686136
PAXSON SHREVEPORT LICENSE, INC.                        Florida      65-0813247
PAXSON SPOKANE LICENSE, INC.                           Florida      65-0815800
PAXSON SPORTS OF MIAMI, INC.                           Florida      59-3227303
PAXSON ST. CROIX LICENSE, INC.                         Florida      65-0815808
PAXSON SYRACUSE LICENSE, INC.                          Florida      65-0795915
PAXSON TAMPA-66 LICENSE, INC.                          Florida      65-0752325
PAXSON TELEVISION PRODUCTIONS, INC.                    Florida      65-0791898
PAXSON TELEVISION, INC.                                Florida      65-0902915
PAXSON TENNESSEE LICENSE, INC.                         Florida      65-0744418
PAXSON TULSA LICENSE, INC.                             Florida      65-0829209
PAXSON WASHINGTON LICENSE, INC.                        Florida      59-3319719
PAXSON WAUSAU LICENSE, INC.                            Florida      65-0834744
PCC DIRECT, INC.                                       Florida      65-0684251
RDP COMMUNICATIONS LICENSE OF INDIANAPOLIS, INC.       Florida      65-0866576
RDP COMMUNICATIONS OF INDIANAPOLIS, INC.               Florida      65-0866575
RDP COMMUNICATIONS, INC.                               Florida      65-0860333
TRAVEL CHANNEL ACQUISITION CORPORATION                 Florida      65-0766049


601 Clearwater Park Road
West Palm Beach, Florida                                33401
(Address of principal executive offices)             (Zip code)


                                   ----------

               12-1/4% Senior Subordinated Discount Notes due 2009
                       (Title of the indenture securities)

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




                                      -4-


1.  GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:

    (a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
        WHICH IT IS SUBJECT.

- --------------------------------------------------------------------------------
                  Name                                        Address
- --------------------------------------------------------------------------------

    Superintendent of Banks of the State of       2 Rector Street, New York,
    New York                                      N.Y. 10006, and Albany,
                                                  N.Y. 12203

    Federal Reserve Bank of New York              33 Liberty Plaza, New York,
                                                  N.Y. 10045

    Federal Deposit Insurance Corporation         Washington, D.C. 20429

    New York Clearing House Association           New York, New York 10005

    (b)  WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.

    Yes.

2.  AFFILIATIONS WITH OBLIGOR.

    IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
    AFFILIATION.

    None.

16. LIST OF EXHIBITS.

    EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
    INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE
    7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R.
    229.10(D).

    1.  A copy of the Organization Certificate of The Bank of New York (formerly
        Irving Trust Company) as now in effect, which contains the authority to
        commence business and a grant of powers to exercise corporate trust
        powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with
        Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed
        with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed
        with Registration Statement No. 33-29637.)

    4.  A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
        filed with Registration Statement No. 33-31019.)

    6.  The consent of the Trustee required by Section 321(b) of the Act.
        (Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.)

    7.  A copy of the latest report of condition of the Trustee published
        pursuant to law or to the requirements of its supervising or examining
        authority.




                                      -5-


                                    SIGNATURE

        Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 11th day of March, 2002.

                                       THE BANK OF NEW YORK



                                       By: /s/ Ming Shiang
                                           -------------------------------------
                                           Name:  Ming Shiang
                                           Title: Vice President










                                      -6-

                                                                       EXHIBIT 7

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

                       Consolidated Report of Condition of

                              THE BANK OF NEW YORK

                    of One Wall Street, New York, N.Y. 10286
                     And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
2001, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.

                                                                  Dollar Amounts
                                                                   In Thousands
                                                                  --------------
ASSETS
Cash and balances due from depository institutions:
   Noninterest-bearing balances and currency and coin...........    $ 3,238,092
   Interest-bearing balances ...................................      5,255,952
Securities:
   Held-to-maturity securities .................................        127,193
   Available-for-sale securities ...............................     12,143,488
Federal funds sold and Securities purchased under
   agreements to resell ........................................        281,677
Loans and lease financing receivables:
   Loans and leases held for sale ..............................            786
   Loans and leases, net of unearned
     income.....................................................     46,206,726
   LESS: Allowance for loan and
     lease losses...............................................        607,115
   Loans and leases, net of unearned
     income and allowance ......................................     45,599,611
Trading Assets .................................................      9,074,924
Premises and fixed assets (including capitalized
   leases) .....................................................        783,165
Other real estate owned ........................................            935
Investments in unconsolidated subsidiaries and
   associated companies ........................................        200,944
Customers' liability to this bank on acceptances
   outstanding .................................................        311,521
Intangible assets
   Goodwill ....................................................      1,546,125
   Other intangible assets .....................................          8,497
Other assets ...................................................      8,761,129
                                                                    -----------
Total assets ...................................................    $87,334,039
                                                                    ===========






LIABILITIES
Deposits:
   In domestic offices .........................................    $28,254,986
   Noninterest-bearing..........................................     10,843,829
   Interest-bearing.............................................     17,411,157
   In foreign offices, Edge and Agreement
     subsidiaries, and IBFs ....................................     31,999,406
   Noninterest-bearing..........................................      1,006,193
   Interest-bearing.............................................     30,993,213
Federal funds purchased and securities sold under
   agreements to repurchase ....................................      6,004,678
Trading liabilities ............................................      2,286,940
Other borrowed money:
   (includes mortgage indebtedness and obligations
   under capitalized leases) ...................................      1,845,865
Bank's liability on acceptances executed and
   outstanding .................................................        440,362
Subordinated notes and debentures ..............................      2,196,000
Other liabilities ..............................................      7,606,565
                                                                    -----------
Total liabilities ..............................................    $80,634,802
                                                                    ===========

EQUITY CAPITAL
Common stock ...................................................      1,135,284
Surplus ........................................................      1,050,729
Retained earnings ..............................................      4,436,230
Accumulated other comprehensive income .........................         76,292
Other equity capital components ................................              0
Total equity capital ...........................................      6,698,535
                                                                      ---------
Total liabilities and equity capital ...........................    $87,334,039
                                                                    ===========







         I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.


                                          Thomas J. Mastro,
                                          Senior Vice President and Comptroller

         We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.

Thomas A. Renyi
Gerald L. Hassell
Alan R. Griffith                          Directors

EX-99.1

                                                                    EXHIBIT 99.1

                             LETTER OF TRANSMITTAL

                            To Tender for Exchange a
               12 1/4% Senior Subordinated Discount Note due 2009
                                (CUSIP NO.     )

                                       of

                       Paxson Communications Corporation
                            (a Delaware corporation)
              Pursuant to the Prospectus dated              , 2002

       THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
           NEW YORK CITY TIME, ON           , 2002, UNLESS EXTENDED.

                                      To:
                             THE BANK OF NEW YORK,
                               AS EXCHANGE AGENT

       By Registered or Certified Mail, by Overnight Courier or By Hand:
                                15 Broad Street
                        Reorganization Unit, 16th Floor
                               New York, NY 10286
                           Attention:

                                 By Facsimile:
                                  (  )
                             Confirm by Telephone:
                                  (  )

     DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE ONE LISTED
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS
LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL
IS COMPLETED.

     The undersigned acknowledges that he or she has received the Prospectus
dated          , 2002 (the "Prospectus") of Paxson Communications Corporation
(the "Company") and this Letter of Transmittal (the "Letter of Transmittal"),
which together constitute the Company's offer to exchange (the "Exchange Offer")
up to $496,263,000 aggregate principal amount at maturity of its 12 1/4% Senior
Subordinated Discount Notes due 2009 that have been registered under the
Securities Act of 1933, as amended (the "Securities Act"), pursuant to a
Registration Statement of which the Prospectus is a part (the "New Notes"), for
up to $496,263,000 aggregate principal amount at maturity of its outstanding
12 1/4% Senior Subordinated Discount Notes due 2009 (the "Original Notes"). The
term "Expiration Date" shall mean 5:00 p.m., New York City time, on           ,
2002, unless the Company, in its sole discretion, extends the Exchange Offer, in
which case the term "Expiration Date" shall mean the latest date and time to
which the Exchange Offer is extended.

     This Letter of Transmittal is to be used by holders of Original Notes
whether (i) certificates representing the Original Notes are to be physically
delivered herewith, (ii) the guaranteed delivery procedures described in the
Prospectus are to be utilized, or (iii) tenders are to be made by book-entry
transfer to the account maintained by the Exchange Agent at The Depository Trust
Company, New York, New York ("DTC" or the "Book-Entry Transfer


Facility"), pursuant to the procedures set forth in the Prospectus. Delivery of
documents to DTC does not constitute delivery to the Exchange Agent.

     Unless the context requires otherwise, the term "Holder" with respect to
the Exchange Offer means any person in whose name Original Notes are registered
or any other person who has obtained a properly completed bond power from the
registered holder or any person whose Original Notes are held of record by the
Book-Entry Transfer Facility who desires to deliver such Original Notes by
book-entry transfer at the Book-Entry Transfer Facility. The undersigned has
completed, executed and delivered this Letter of Transmittal to indicate the
action the undersigned desires to take with respect to the Exchange Offer.
Holders who wish to tender their Original Notes must complete this Letter of
Transmittal in its entirety.

            PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY
                        BEFORE COMPLETING ANY BOX BELOW

                                                                                          
- ----------------------------------------------------------------------------------------------------------------------
                                     DESCRIPTION OF ORIGINAL NOTES BEING TENDERED
- ----------------------------------------------------------------------------------------------------------------------
     NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
                (PLEASE FILL IN, IF BLANK)
- ----------------------------------------------------------------------------------------------------------------------
                                                                                    AGGREGATE
                                                                                    PRINCIPAL
                                                                                    AMOUNT AT           AGGREGATE
                                                                                   MATURITY OF      PRINCIPAL AMOUNT
                                                                                ORIGINAL NOTE(S)    AT MATURITY BEING
                                                               CERTIFICATE       REPRESENTED BY       TENDERED FOR
                                                                NUMBER(S)       CERTIFICATE(S)(1)      EXCHANGE(2)
                                                             ------------------------------------------------------
                                                                                        $                   $
                                                             ------------------------------------------------------

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

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

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

- ----------------------------------------------------------------------------------------------------------------------
  (1) Need not be completed by Holders tendering by book-entry transfer.
  (2) Unless otherwise indicated, any tendering Holder will be deemed to have tendered the full principal amount at
      maturity of the Original Note(s) represented by such Certificate(s).
- ----------------------------------------------------------------------------------------------------------------------



     Holders of Original Notes who wish to tender and whose Original Notes are
not immediately available or who cannot deliver their certificates representing
those Original Notes and all other documents required hereby to the Exchange
Agent prior to the Expiration Date or whose Original Notes cannot be delivered
on a timely basis pursuant to the rules for book-entry transfer may tender
Original Notes according to the guaranteed delivery procedures set forth in the
Prospectus under the caption "The Exchange Offer -- Procedures for Tendering."
See Instruction 1 below.

                                        2


     CHECK HERE IF TENDERED ORIGINAL NOTES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC AND
COMPLETE THE FOLLOWING. [ ]

Name of Tendering Institution:
- --------------------------------------------------------------------------------
Account Number:
- --------------------------------------------------------------------------------
Transaction Code Number:
- --------------------------------------------------------------------------------

     CHECK HERE IF TENDERED ORIGINAL NOTES ARE BEING DELIVERED PURSUANT TO A
NOTICE OF GUARANTEED DELIVERY AND COMPLETE THE FOLLOWING. [ ]

Name of Registered Holder(s):
- --------------------------------------------------------------------------------
Name of Eligible Institution that guaranteed delivery:
- --------------------------------------------------------------
Account Number (if delivered by book-entry transfer):
- -------------------------------------------------------------

     CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE ADDITIONAL COPIES
OF THE PROSPECTUS AND COPIES OF ANY AMENDMENT OR SUPPLEMENT TO THE PROSPECTUS. [
]

Name:
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
Number of Copies Desired:
- --------------------------------------------------------------------------------

                                        3


                              SPECIAL REGISTRATION
                                  INSTRUCTIONS
                         (SEE INSTRUCTIONS 3, 4 AND 5)

  To be completed ONLY if certificates for Original Notes not tendered, or
certificates for New Notes issued in exchange for Original Notes accepted for
exchange, are to be issued in the name of someone other than the undersigned or
if Original Notes tendered by book-entry transfer which are not exchanged and/or
any New Notes are to be returned by credit to an account maintained by DTC other
than the account designated above To be completed ONLY if certificates for new
Original Notes representing the portion of the principal amount at maturity of
Original Notes not tendered, or certificates for New Notes issued in exchange
for Original Notes accepted for exchange, are to be sent to someone other than
the undersigned, or to the undersigned at an address other than that shown
above.

Issue certificate(s) to:

DTC Account Number:

Name:
- ----------------------------------------------
                                     (PLEASE PRINT)

Address:
- --------------------------------------------

             ------------------------------------------------------
                              (INCLUDING ZIP CODE)

             ------------------------------------------------------
                   (IDENTIFICATION OR SOCIAL SECURITY NUMBER)

                                SPECIAL DELIVERY
                                  INSTRUCTIONS
                         (SEE INSTRUCTIONS 4, 5 AND 6)

  To be completed ONLY if certificates for new Original Notes representing the
portion of the principal amount at maturity of Original Notes not tendered, or
certificates for New Notes issued in exchange for Original Notes accepted for
exchange, are to be sent to someone other than the undersigned, or to the
undersigned at an address other than that shown above.

Deliver certificate(s) to:

Name:
- ---------------------------------------------
                                     (PLEASE PRINT)

Address:
- -------------------------------------------

             ------------------------------------------------------
                              (INCLUDING ZIP CODE)

             ------------------------------------------------------
                   (IDENTIFICATION OR SOCIAL SECURITY NUMBER)
                                        4


              PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY

Ladies and Gentlemen:

     Subject to the terms and conditions of the Exchange Offer, the undersigned
hereby tenders to the Company the Original Notes indicated above. Subject to and
effective upon the acceptance for exchange of the Original Notes tendered in
accordance with this Letter of Transmittal, the undersigned exchanges, assigns
and transfers to, or upon the order of, the Company, all right, title and
interest in and to the Original Notes tendered hereby and accepted for exchange
pursuant to the Exchange Offer. The undersigned hereby irrevocably constitutes
and appoints the Exchange Agent its, his or her agent and attorney-in-fact (with
full knowledge that the Exchange Agent also acts as the agent of the Company)
with respect to the tendered Original Notes with full power of substitution to
(i) deliver certificates for such Original Notes to the Company or its agent or
transfer ownership of such Original Notes on the account books maintained by
DTC, together in either such case with all accompanying evidences of transfer
and authenticity to, or upon the order of, the Company upon receipt by the
Exchange Agent, as the undersigned's agent, of the New Notes and (ii) present
such Original Notes for cancellation and transfer on the books of the Company
and receive all benefits and otherwise exercise all rights of beneficial
ownership with respect to such Original Notes, all in accordance with the terms
of the Exchange Offer. The power of attorney granted in this paragraph shall be
deemed to be irrevocable and coupled with an interest.

     THE UNDERSIGNED HEREBY REPRESENTS AND WARRANTS THAT IT, HE OR SHE HAS FULL
POWER AND AUTHORITY TO TENDER, SELL, ASSIGN AND TRANSFER THE ORIGINAL NOTES
TENDERED HEREBY AND THAT THE COMPANY WILL ACQUIRE GOOD AND UNENCUMBERED TITLE
THERETO, FREE AND CLEAR OF ALL LIENS, RESTRICTIONS, CHARGES AND ENCUMBRANCES AND
NOT SUBJECT TO ANY ADVERSE CLAIM, WHEN THE SAME ARE ACQUIRED BY THE COMPANY. THE
UNDERSIGNED WILL, UPON REQUEST, EXECUTE AND DELIVER ANY ADDITIONAL DOCUMENTS
DEEMED BY THE EXCHANGE AGENT OR THE COMPANY TO BE NECESSARY OR DESIRABLE TO
COMPLETE THE ASSIGNMENT, TRANSFER AND EXCHANGE OF THE ORIGINAL NOTES TENDERED
HEREBY.

     The undersigned also acknowledges that the Exchange Offer is being made in
reliance on interpretations by the staff of the Securities and Exchange
Commission (the "Commission") that the New Notes issued in exchange for Original
Notes pursuant to the Exchange Offer may be offered for resale, resold or
otherwise transferred by Holders thereof (other than any Holder that is an
affiliate of the Company within the meaning of Rule 405 of the Securities Act)
without compliance with the registration and prospectus delivery provisions of
the Securities Act, provided that such New Notes are acquired in the ordinary
course of such Holders' business and such Holders have no arrangements with any
person to participate in a distribution of New Notes. If the undersigned is not
a broker-dealer or is a broker-dealer but will not receive New Notes for its own
account in exchange for Original Notes, the undersigned represents that it is
not engaged in, and does not intend to engage in, a distribution of New Notes
and it has no arrangements or understandings with any person to participate in a
distribution of the New Notes. If the undersigned is a broker-dealer that will
receive New Notes for its own account in exchange for Original Notes, the
undersigned represents that the Original Notes to be exchanged for the New Notes
were acquired as a result of market-making activities or other trading
activities and that it will deliver a Prospectus in connection with any resale
of such New Notes; however, by so acknowledging and by delivering a Prospectus,
the undersigned will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act.

     By acceptance of the Exchange Offer, such broker-dealer that receives New
Notes pursuant to the Exchange Offer hereby acknowledges and agrees that, upon
receipt of notice by the Company of the happening of any event which makes any
statement in the Prospectus untrue in any material respect or which requires the
making of any changes in the Prospectus in order to make the statements therein
not misleading (which notice the Company agrees to deliver promptly to such
broker-dealer), such broker-dealer will suspend use of the Prospectus until the
Company has amended or supplemented the Prospectus to correct such misstatement
or omission and has furnished copies of the amended or supplemented Prospectus
to such broker-dealer.

     The undersigned represents that (i) the New Notes acquired pursuant to the
Exchange Offer are being acquired in the ordinary course of such Holder's
business, (ii) such Holder has no arrangement with any other person to
participate in the distribution of such New Notes and (iii) such Holder is not
an "affiliate" of the Company as defined under Rule 405

                                        5


of the Securities Act, or if such Holder is an affiliate, that such Holder will
comply with the registration and prospectus delivery requirements of the
Securities Act to the extent applicable.

     The undersigned understands that, upon acceptance by the Company of the
Original Notes tendered under the Exchange Offer, the undersigned will be deemed
to have accepted the New Notes and will be deemed to have relinquished all
rights with respect to the Original Notes so accepted.

     The undersigned understands that the Company may accept the undersigned's
tender at any time on or after the Expiration Date by delivering oral or written
notice of acceptance to the Exchange Agent. Tenders of Original Notes may be
withdrawn at any time prior to the Expiration Date, unless theretofore accepted
for exchange as provided in the Exchange Offer.

     The undersigned understands that the Company reserves the right, at any
time and from time to time, in its sole discretion (subject to its obligations
under the registration rights agreement referred to in the Prospectus), (i) to
delay accepting any Original Notes or to delay the issuance and exchange of New
Notes for Original Notes, to extend the Exchange Offer, or if any of the
conditions set forth in the Prospectus under the caption "The Exchange Offer --
Conditions to the Exchange Offer" shall not have been satisfied, to terminate
the Exchange Offer, by giving oral or written notice of such delay, extension or
termination to the Exchange Agent or (ii) to amend the terms of the Exchange
Offer in any manner.

     If any tendered Original Notes are not accepted for exchange pursuant to
the Exchange Offer for any reason, certificates for any such unaccepted Original
Notes will be returned, without expense to the tendering Holder thereof, to the
undersigned at the address shown below or at a different address as may be
indicated herein under "Special Delivery Instructions" (or, in the case of
Original Notes tendered by book-entry transfer, such Original Notes will be
credited to the account of such Holder maintained at the Book-Entry Transfer
Facility) as promptly as practicable after the expiration or termination of the
Exchange Offer.

     All authority conferred or aimed to be conferred by this Letter of
Transmittal shall survive the death, incapacity or dissolution of the
undersigned, and every obligation of the undersigned under this Letter of
Transmittal shall be binding upon the undersigned's heirs, personal
representatives, successors and assigns.

     The undersigned understands that tenders of Original Notes pursuant to the
procedures described under the caption "The Exchange Offer -- Procedures for
Tendering" in the Prospectus and in the instructions hereto will constitute a
binding agreement between the undersigned and the Company upon the terms and
subject to the conditions of the Exchange Offer. Any tender of Original Notes
pursuant to this Letter of Transmittal may be withdrawn only in accordance with
the applicable procedures set forth in the Prospectus.

     The New Notes exchanged for the tendered Original Notes will be issued to
the undersigned and certificates representing such notes mailed to its address
indicated in the records of the Company (or credited to the account maintained
at the Book-Entry Transfer Facility above) unless otherwise indicated under the
"Special Registration Instructions" or the "Special Delivery Instructions"
above.

     The undersigned understands that the Company has no obligation pursuant to
the "Special Registration Instructions" and "Special Delivery Instructions" to
transfer any Original Notes from the name of the registered Holder(s) thereof if
the Company does not accept for exchange any of the Original Notes so tendered.

     Holders who wish to tender their Original Notes and (i) whose Original
Notes are not immediately available or (ii) who cannot deliver their
certificates (or complete the procedures for book-entry transfer), this Letter
of Transmittal or any other documents required hereby to the Exchange Agent
prior to the Expiration Date may tender their Original Notes according to the
guaranteed delivery procedures set forth in the Prospectus under the caption
"The Exchange Offer -- Guaranteed Delivery Procedures." See Instruction 1
printed below regarding the completion of this Letter of Transmittal.

                                        6


                        PLEASE SIGN HERE WHETHER OR NOT
              ORIGINAL NOTES ARE BEING PHYSICALLY TENDERED HEREBY

X
- ----------------------------------------------------
- ----------------------------------------------------
                                             Date

X
- ----------------------------------------------------
- ----------------------------------------------------
SIGNATURE(S) OF REGISTERED DATE
HOLDER(S) OR AUTHORIZED
SIGNATORY

Area Code and Telephone Number:
- --------------------------------------------------------------------------------

     The above lines must be signed by the registered Holder(s) as their name(s)
appear(s) on the certificates representing the Original Notes or on a security
position listing at the Book-Entry Transfer Facility as the owner of the
Original Notes or by person(s) authorized to become registered Holder(s), a copy
of which authority must be transmitted with this Letter of Transmittal. If
Original Notes to which this Letter of Transmittal relate are held of record by
two or more joint Holders, then all such Holders must sign this Letter of
Transmittal. If required by Instruction 4 hereto, the signatures on the above
lines must be guaranteed by an Eligible Institution.

     If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, then such person must (i) set forth his or her full
title below and (ii) unless waived by the Company, submit evidence satisfactory
to the Company of such person's authority so to act with this Letter. See
Instruction 4 regarding the completion of this Letter of Transmittal printed
below.

Name(s)
- --------------------------------------------------------------------------------
                                 (PLEASE PRINT)

Capacity (full title)
- --------------------------------------------------------------------------------

Address:
- --------------------------------------------------------------------------------
                               (INCLUDE ZIP CODE)

(Area Code and Telephone No.)
- --------------------------------------------------------------------------------

(Tax Identification or Social Security No(s).)
- ---------------------------------------------------------------------

                      Please Complete Substitute Form W-9

                           GUARANTEE OF SIGNATURE(S)
         (SIGNATURE(S) MUST BE GUARANTEED IF REQUIRED BY INSTRUCTION 4)

Authorized Signature:
- --------------------------------------------------------------------------------

Dated
- --------------------------- , 2002

Name and Title:
- --------------------------------------------------------------------------------
                                 (PLEASE PRINT)

Name of Firm:
- --------------------------------------------------------------------------------

                                        7


                                  INSTRUCTIONS
                    FORMING PART OF THE TERMS AND CONDITIONS
                             OF THE EXCHANGE OFFER

     1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND NOTE CERTIFICATES OR
BOOK-ENTRY CONFIRMATIONS.  Certificates for all physically tendered Original
Notes, or confirmation of a book-entry transfer into the Exchange Agent's
account at the Book-Entry Transfer Facility of Original Notes tendered
electronically, together in each case with a properly completed and duly
executed copy of this Letter of Transmittal and any other documents required by
this Letter of Transmittal or the Prospectus, must be received by the Exchange
Agent at its address set forth herein prior to 5:00 p.m., New York City time, on
the Expiration Date, unless the tendering Holder complies with the guaranteed
delivery procedures described in the following paragraph. The method of delivery
of note certificates, this Letter of Transmittal and all other required
documents to the Exchange Agent is at the election and risk of the Holder and,
except as otherwise provided below, the delivery will be deemed made only when
actually received by the Exchange Agent. Instead of delivery by mail, it is
recommended that the Holder use an overnight or hand delivery service. In all
cases, sufficient time should be allowed to assure timely delivery. No Letter of
Transmittal, certificates representing Original Notes or any other required
documents should be sent to the Company.

     Holders who wish to tender their Original Notes and (i) whose note
certificates are not immediately available, or (ii) who cannot deliver their
note certificates (or complete the procedure for book-entry transfer), this
Letter of Transmittal or any other documents required hereby to the Exchange
Agent prior to the Expiration Date, must tender their Original Notes according
to the guaranteed delivery procedures set forth in the Prospectus. Pursuant to
such procedures: (i) such tender must be made by or through a firm that is a
member of a registered national securities exchange or of the National
Association of Securities Dealers, Inc., a commercial bank or trust company
having an office or correspondent in the United States or an eligible guarantor
institution within the meaning of Rule 17Ad-15 under the Securities Exchange Act
of 1934, as amended (each an "Eligible Institution"); (ii) prior to the
Expiration Date, the Exchange Agent must have received from the Eligible
Institution a properly completed and duly executed Notice of Guaranteed Delivery
(by facsimile transmission, mail, hand delivery or overnight courier), setting
forth the name and address of the Holder, any certificate numbers and the
aggregate principal amount at maturity of Original Notes tendered, stating that
the tender is being made thereby and guaranteeing that, within five (5) New York
Stock Exchange trading days after the Expiration Date, this Letter of
Transmittal (or facsimile hereof) together with certificate(s) representing the
Original Notes (or, with respect to a book-entry transfer, confirmation of a
book-entry transfer of the Original Notes into the Exchange Agent's account at
the Book-Entry Transfer Facility) and any other required documents will be
deposited by the Eligible Institution with the Exchange Agent; and (iii) such
properly completed and executed Letter of Transmittal (or facsimile hereof), as
well as all other documents required by this Letter of Transmittal and the
certificate(s) representing all tendered Original Notes in proper form for
transfer (or, with respect to a book-entry transfer, confirmation of a
book-entry transfer of the Original Notes into the Exchange Agent's Account at
the Book-Entry Transfer Facility), must be received by the Exchange Agent within
five (5) New York Stock Exchange trading days after the Expiration Date, all as
provided in the Prospectus under the caption "The Exchange Offer -- Guaranteed
Delivery Procedures." Any Holder who wishes to tender his, her or its Original
Notes pursuant to the guaranteed delivery procedures described above must ensure
that the Exchange Agent receives the Notice of Guaranteed Delivery from the
Eligible Institution prior to 5:00 p.m., New York City time, on the Expiration
Date. Upon request to the Exchange Agent, a duplicate Notice of Guaranteed
Delivery will be sent to Holders. A Notice of Guaranteed Delivery has been
included with the Prospectus and the Letter of Transmittal for use by Holders
who wish to tender their Original Notes according to the guaranteed delivery
procedures set forth above.

     All questions as to the validity, form, eligibility (including time of
receipt), acceptance of tendered Original Notes, and withdrawal of tendered
Original Notes will be determined by the Company in its sole discretion, which
determination will be final and binding. The Company reserves the absolute right
to reject any and all Original Notes determined by the Company not to be validly
tendered or any Original Notes the acceptance of which would, in the opinion of
counsel for the Company, be unlawful. The Company also reserves the absolute
right to waive any defects, irregularities or conditions of tender to particular
Original Notes. The Company's interpretation of the terms and conditions of the
Exchange Offer (including the instructions in this Letter of Transmittal) will
be final and binding on all parties. Unless waived, any defects or
irregularities in connection with tenders of Original Notes will render such
tenders invalid unless such defects or irregularities are cured within such time
as the Company shall determine. Any Original Notes received by the Exchange

                                        8


Agent that are not properly tendered and as to which the defects or
irregularities have not been cured or waived will be returned by the Exchange
Agent to the tendering Holders, unless otherwise provided in this Letter of
Transmittal, as soon as practicable following the Expiration Date.

     No alternative, conditional or contingent tender will be accepted. All
tendering Holders, by execution of this Letter of Transmittal, waive any rights
to receive any notice of the acceptance of their tender.

     2. TENDER OF HOLDER.  Only a Holder of Original Notes may tender such notes
in the Exchange Offer. Any beneficial owner of Original Notes who is not the
registered Holder and who wishes to tender should arrange with such registered
Holder to execute and deliver this Letter of Transmittal on such owner's behalf
or must, prior to completing and executing this Letter of Transmittal and
delivering his Original Notes, either make appropriate arrangements to register
ownership of the Original Notes in such owner's name or obtain a properly
completed bond power from the registered Holder.

     3. PARTIAL TENDERS; WITHDRAWALS.  (Not applicable to Holders who tender by
book-entry transfer.) If less than all of the principal amount at maturity of an
Original Note evidenced by a certificate is tendered, the tendering Holder
should fill in the principal amount at maturity tendered in the fourth column of
the box entitled "Description of Original Notes Being Tendered" above. All of
the principal amount at maturity of an Original Note represented by any
certificate delivered to the Exchange Agent will be deemed to have been tendered
unless otherwise indicated. If less than all of the principal amount at maturity
of an Original Note evidenced by a certificate is tendered, then a newly issued
certificate for an Original Note in a principal amount at maturity equal to the
untendered portion of the principal amount at maturity of the Original Note
submitted pursuant hereto and a certificate or certificates representing the New
Notes issued in exchange for any Original Notes accepted will be sent to the
Holder at its, his or her registered address, unless a different address is
provided in the appropriate box on this Letter of Transmittal promptly after the
Original Notes are accepted for exchange.

     A tender pursuant to the Exchange Offer may be withdrawn subject to the
procedures set forth in this Letter of Transmittal and the Prospectus at any
time prior to the acceptance thereof on the Expiration Date. To withdraw a
tender of Original Notes in the Exchange Offer, a written or facsimile
transmission notice of withdrawal must be received by the Exchange Agent at its
address set forth herein prior to 5:00 p.m., New York City time, on the
Expiration Date. Any such notice of withdrawal must (i) specify the name of the
person having deposited the Original Notes to be withdrawn (the "Depositor"),
(ii) specify the serial numbers on the particular certificates evidencing the
Original Notes to be withdrawn and the name of the registered Holder thereof (if
certificates have been delivered or otherwise identified to the Exchange Agent)
or the name and number of the account at DTC to be credited with withdrawn
Original Notes (if the Original Notes have been tendered pursuant to the
procedures for book-entry transfer), (iii) be signed by the Holder in the same
manner as the original signature on the Letter of Transmittal by which such
Original Notes were tendered (including any required signature guarantees) or be
accompanied by documents of transfer sufficient to have the Registrar with
respect to the Original Notes register the transfer of such Original Notes into
the name of the person withdrawing the tender, and (iv) specify the name in
which any such Original Notes are to be registered, if different from that of
the Depositor. All questions as to the validity, form and eligibility (including
time of receipt) of such notices will be determined by the Company in its sole
discretion, which determination shall be final and binding on all parties. Any
Original Notes so withdrawn will be deemed not to have been validly tendered for
purposes of the Exchange Offer and no New Notes will be issued with respect
thereto unless the Original Notes so withdrawn are validly retendered. Properly
withdrawn Original Notes may be retendered by following one of the procedures
described in the Prospectus under the caption "The Exchange Offer -- Procedures
for Tendering" at any time prior to the Expiration Date.

     4. SIGNATURES ON THE LETTER OF TRANSMITTAL, BOND POWERS AND ENDORSEMENTS;
GUARANTEE OF SIGNATURES.  If this Letter of Transmittal (or facsimile hereof) is
signed by the registered Holder(s) of the certificate(s) representing Original
Notes tendered hereby, the signature must correspond (i) with the name(s) as
written on the face of the certificate without alteration, enlargement or any
change whatsoever, or (ii) in the case of Original Notes held by book-entry,
with the name as contained on the security position listing at the Book-Entry
Transfer Facility.

     If this Letter of Transmittal (or facsimile hereof) is signed by the
registered Holder of any certificate(s) representing Original Notes tendered and
the New Notes issued in exchange therefor are to be issued (or any Original
Notes are to be reissued to reflect the untendered portion of the principal
amount at maturity of any Original Note submitted pursuant hereto ("Reissued
Original Notes")) to the registered Holder, then such Holder need not and should
not endorse any

                                        9


tendered certificate(s) or provide a separate bond power. In any other case such
Holder must either properly endorse the certificates tendered or transmit a
properly completed separate bond power with this Letter of Transmittal with the
signatures on the endorsement or bond power guaranteed by an Eligible
Institution.

     If this Letter of Transmittal is signed by a person other than the
registered Holder of any Original Notes or if delivery of the certificate(s) for
Original Notes is to be made to a person other than the registered Holder, such
certificate(s) must be endorsed or accompanied by appropriate bond powers, in
either case signed as the name of the registered Holder appears on such
certificates.

     If this Letter of Transmittal (or facsimile hereof) or any certificates for
Original Notes or bond powers are signed by trustees, executors, administrators,
guardians, attorneys-in-fact, or officers of corporations or others acting in a
fiduciary or representative capacity, such persons should so indicate when
signing, and, unless waived by the Company, evidence satisfactory to the Company
of their authority so to act must be submitted with this Letter of Transmittal.

     Except as otherwise provided below, all signatures on this Letter of
Transmittal must be guaranteed by an Eligible Institution. Signatures on this
Letter of Transmittal need not be guaranteed if (a) this Letter of Transmittal
is signed by the registered Holder(s) of the Original Notes tendered herewith in
connection with the Exchange Offer and such Holder(s) have not completed the box
set forth herein entitled "Special Registration Instructions" or "Special
Delivery Instructions," (b) such Original Notes are tendered for the account of
an Eligible Institution, or (c) such Original Notes are tendered for the account
of DTC.

     5. SPECIAL REGISTRATION AND DELIVERY INSTRUCTIONS.  Tendering Holders
should indicate, in the applicable box or boxes, the name and address to which
certificates for New Notes or substitute certificates for Reissued Original
Notes or Original Notes not accepted for exchange are to be issued or sent, or
the account number at the Book-Entry Transfer Facility to which the New Notes
are to be credited, if different from the name and address or account number of
the person signing this Letter of Transmittal. In the case of issuance in a
different name or to a different account number, the taxpayer identification or
social security number of the person named (or to whose account the New Notes
are credited) must also be indicated. Holders tendering Original Notes by
book-entry transfer may request that Original Notes not exchanged be credited to
such Holders' accounts maintained at the Book-Entry Transfer Facility.

     6. TRANSFER TAXES.  The Company will pay all transfer taxes, if any,
applicable to the exchange of Original Notes pursuant to the Exchange Offer. If,
however, certificates representing New Notes or Reissued Original Notes or
Original Notes accepted for exchange are to be delivered to, or are to be issued
in the name or credited to the account of, any person other than the registered
Holder of the Original Notes tendered hereby, or if tendered Original Notes are
registered in the name of any person other than the person signing this Letter
of Transmittal, or if a transfer tax is imposed for any reason other than the
exchange of Original Notes pursuant to the Exchange Offer, then the amount of
any such transfer taxes (whether imposed on the registered Holder or on any
other persons) will be payable by the tendering Holder. If satisfactory evidence
of payment of such taxes or exemption therefrom is not submitted with this
Letter of Transmittal, the amount of such transfer taxes will be billed directly
to such tendering Holder.

     Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the certificates representing Original
Notes listed in this Letter of Transmittal.

     7. WAIVER OF CONDITIONS.  The Company reserves the right, in its sole
discretion, to amend, waive or modify specified conditions in the Exchange Offer
in the case of any Original Notes tendered.

     8. MUTILATED, LOST, STOLEN OR DESTROYED CERTIFICATES.  Any tendering Holder
whose certificates for Original Notes have been mutilated, lost, stolen or
destroyed should contact the Exchange Agent at the address indicated herein for
further instructions. This Letter of Transmittal and any related documents
cannot be processed until the procedures for replacing mutilated, lost, stolen
or destroyed certificates have been followed.

     9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.  Questions and requests
for additional copies of the Prospectus or this Letter of Transmittal may be
directed to the Exchange Agent at the address specified in the Prospectus.
Holders may also contact their broker, dealer, commercial bank, trust company or
other nominee for assistance concerning the Exchange Offer.

                                        10


                           IMPORTANT TAX INFORMATION

     Under current federal income tax law, a Holder whose tendered Original
Notes are accepted for exchange is required to provide the Company (as payor),
through the Exchange Agent, with such Holder's correct taxpayer identification
number ("TIN") on Substitute Form W-9 or otherwise establish a basis for
exemption from backup withholding. If such Holder is an individual, the TIN is
such Holder's social security number. If the Exchange Agent is not provided with
the correct TIN or an adequate basis for exemption, the Holder may be subject to
a $50 penalty imposed by the Internal Revenue Service (the "IRS"). In addition,
delivery of such Holder's New Notes may be subject to backup withholding.

     Certain Holders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. Exempt Holders should indicate their exempt status on the
Substitute Form W-9 enclosed herewith. A foreign individual may qualify as an
exempt recipient by submitting to the Exchange Agent a properly completed IRS
Form W-8 (which the Exchange Agent will provide upon request) signed under
penalty of perjury, attesting to the Holder's exempt status.

     If backup withholding applies, the Company is required to withhold 31% of
any payment made to the Holder or other payee. Backup withholding is not an
additional federal income tax. Rather, the federal income tax liability of
persons subject to backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, a refund may be
obtained from the IRS.

PURPOSE OF SUBSTITUTE FORM W-9

     To prevent backup withholding on payments that are made with respect to
Original Notes exchanged in the Exchange Offer, each Holder is required to
provide the Exchange Agent with either: (i) the Holder's correct TIN by
completing the form below, certifying that the TIN provided on Substitute Form
W-9 is correct (or that such Holder is awaiting a TIN) and that (A) the Holder
has not been notified by the IRS that he or she is subject to backup withholding
as a result of a failure to report all interest or dividends or (B) the IRS has
notified the Holder that he or she is no longer subject to backup withholding,
or (ii) an adequate basis for exemption.

WHAT NUMBER TO GIVE THE EXCHANGE AGENT

     The Holder is required to give the Exchange Agent the TIN (e.g., social
security number or employer identification number) of the record owner of the
Original Notes. If the Original Notes are held in more than one name or are not
held in the name of the actual owner, consult the Substitute Form W-9 for
additional guidance regarding which number should be reported.

                                        11


      PAYER'S NAME:  [                                                  ]

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

                                  Name (if joint names, list first and circle the name of      ----------------------------
  SUBSTITUTE                      the person whose number you enter in Part 1 below.)             Social Security Number
  FORMW-9
                                  Address                                                                   OR
                                  City, State and Zip Code                                     ----------------------------
                                                                                              Employer Identification Number
                                ---------------------------------------------------------------------------------------------
                                  PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT AND
                                  CERTIFY BY SIGNING AND DATING BELOW.
   DEPARTMENT OF THE TREASURY
   INTERNAL REVENUE SERVICE       PART 2 -- CERTIFICATION -- UNDER PENALTIES OF PERJURY, I               PART 3 --
                                  CERTIFY THAT:                                                      AWAITING TIN [ ]
                                  (1) THE NUMBER SHOWN ON THIS FORM IS MY CORRECT TAXPAYER
                                      IDENTIFICATION NUMBER (OR I AM WAITING FOR A NUMBER TO
                                      BE ISSUED TO ME), AND
                                  (2) I AM NOT SUBJECT TO BACKUP WITHHOLDING EITHER BECAUSE
                                      I HAVE NOT BEEN NOTIFIED BY THE INTERNAL REVENUE
                                      SERVICE (THE "IRS") THAT I AM SUBJECT TO BACKUP
                                      WITHHOLDING AS A RESULT OF A FAILURE TO REPORT ALL
                                      INTEREST OR DIVIDENDS, OR THE IRS HAS NOTIFIED ME THAT
                                      I AM NO LONGER SUBJECT TO BACKUP WITHHOLDING.
                                ---------------------------------------------------------------------------------------------



                                                                                     
                                     CERTIFICATION INSTRUCTIONS -- YOU MUST CROSS OUT ITEM (2) IN PART 2 ABOVE IF YOU HAVE
                                     BEEN NOTIFIED BY THE IRS THAT YOU ARE SUBJECT TO BACKUP WITHHOLDING BECAUSE OF
   PAYER'S REQUEST FOR               UNDERREPORTING INTEREST OR DIVIDENDS ON YOUR TAX RETURN. IF, HOWEVER, AFTER BEING
   TAXPAYER IDENTIFICATION           NOTIFIED BY THE IRS THAT YOU WERE SUBJECT TO BACKUP WITHHOLDING, YOU RECEIVED ANOTHER
   NUMBER (TIN)                      NOTIFICATION FROM THE IRS STATING THAT YOU ARE NO LONGER SUBJECT TO BACKUP WITHHOLDING,
                                     DO NOT CROSS OUT ITEM (2).
                                     SIGNATURE__________  DATE __________
- -----------------------------------------------------------------------------------------------------------------------------



NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
      OF 31% OF ANY PAYMENT MADE TO YOU PURSUANT TO THE EXCHANGE OFFER. PLEASE
      REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
      IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.

                                        12


               YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU
                CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9

             CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER

     I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (b)
I intend to mail or deliver such an application in the near future. I understand
that if I do not provide a taxpayer identification number within sixty (60)
days, 31% of all reportable payments made to me thereafter will be withheld
until I provide such a number.

- ---------------------------------------------------------
- ---------------------------------------------------------
                         Signature                 Date

                         (DO NOT WRITE IN SPACE BELOW)



                                              AGGREGATE PRINCIPAL AMOUNT              AGGREGATE PRINCIPAL AMOUNT
                                                    AT MATURITY OF                      AT MATURITY OF ORIGINAL
        CERTIFICATE SURRENDERED                 ORIGINAL NOTES TENDERED                     NOTES ACCEPTED
                                                                          



Delivery Prepared by
- --------------------------------------------------------------------------------

                                        13

EX-99.2

                                                                    EXHIBIT 99.2

                       PAXSON COMMUNICATIONS CORPORATION
                         NOTICE OF GUARANTEED DELIVERY
                    (NOT TO BE USED FOR SIGNATURE GUARANTEE)

     As set forth in the Prospectus of Paxson Communications Corporation (the
"Company") dated           , 2002 (the "Prospectus"), in the section entitled
"The Exchange Offer -- Procedures for Tendering" and in the accompanying Letter
of Transmittal (the "Letter of Transmittal") and Instruction 1 thereto, this
form or one substantially equivalent hereto must be used to accept the exchange
offer referred to in the Prospectus if 12 1/4% Senior Subordinated Discount
Notes due 2009 (the "Original Notes") of the Company are not immediately
available or time will not permit the holder's Original Notes or other required
documents to reach the exchange agent identified in the Prospectus, or time will
not permit the holder to complete the procedures for book-entry transfer, prior
to the expiration date (as defined in the Prospectus) of the exchange offer.
This form may be delivered by hand or sent by overnight courier, facsimile
transmission or registered or certified mail to the exchange agent and must be
received by the exchange agent prior to 5:00 p.m., New York City time on
          , 2002.

                                      To:
                    The Bank of New York, as Exchange Agent

       By Registered or Certified Mail, by Overnight Courier or By Hand:
                                15 Broad Street
                        Reorganization Unit, 16th Floor
                               New York, NY 10286
                           Attention:

                                                       
                By Facsimile:                                         Confirm by Telephone:
                     (  )                                                      (  )



            DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS
        SET FORTH ABOVE OR TRANSMISSION VIA FACSIMILE NUMBER OTHER THAN
           THE ONE LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.


Ladies and Gentlemen:

     The undersigned hereby tender(s) to Paxson Communications Corporation the
principal amount of Original Notes listed below, upon the terms of and subject
to the conditions set forth in the Prospectus and the related Letter of
Transmittal and the instructions thereto (which together constitute the
"Exchange Offer"), receipt of which is hereby acknowledged, pursuant to the
guaranteed delivery procedures set forth in the Prospectus, as follows:



                                          PRINCIPAL AMOUNT
     NOTE CERTIFICATE NOS.             REPRESENTED BY NOTE(S)            PRINCIPAL AMOUNT TENDERED
                                                                
- -----------------------------------------------------------------------------------------------------

                                                  $                                  $
- -----------------------------------------------------------------------------------------------------

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



   The Book-Entry Transfer Facility Account Number
   (if the Original Notes will be tendered by book-entry transfer)

   Account Number                  Principal Amount Tendered

   Name of Record Holder(s)

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

   --------------------------------------------------------------------------
                             (PLEASE PRINT OR TYPE)

   Address:

   Area Code & Tel. No.

   Signature(s)

   Dated:
   ---------------------------------------------------, 2002

        This Notice of Guaranteed Delivery must be signed by the registered
   holder(s) of Original Notes exactly as its (their) name(s) appear(s) on
   such Original Notes or by person(s) authorized to become registered
   holder(s) by endorsements and documents transmitted with this Notice of
   Guaranteed Delivery. If Original Notes to which this Notice of Guaranteed
   Delivery relates are held of record by two or more joint holders, then all
   such holders must sign this Notice of Guaranteed Delivery. If signature is
   by a trustee, executor, administrator, guardian, attorney-in-fact, officer
   of a corporation or other person acting in a fiduciary or representative
   capacity, such person must provide evidence satisfactory to the Company of
   such person's authority to so act, together with the following
   information:

                      Please print name(s) and address(es)

   Name(s):

   Capacity:

   Address(es):

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                                   GUARANTEE
                    (NOT TO BE USED FOR SIGNATURE GUARANTEE)

     The undersigned, a member firm of a registered national securities
exchange, a member of the National Association of Securities Dealers, Inc. or a
commercial bank or trust company having an office in the United States,
guarantees (a) that the above-named person(s) "own(s)" the principal amount of
12 1/4% Senior Subordinated Discount Notes due 2009 of Paxson Communications
Corporation (the "Original Notes") tendered hereby within the meaning of Rule
14e-4 under the Securities Exchange Act of 1934, as amended, (b) that such
tender of Original Notes complies with Rule 14e-4, and (c) to deliver to the
exchange agent the Original Notes tendered hereby or confirmation of book-entry
transfer of such Original Notes into the exchange agent's account at The Bank of
New York, in proper form for transfer, together with the Letter of Transmittal
(or facsimile thereof), properly completed and duly executed, with any required
signature guarantees and any other required documents, within five (5) business
days after the expiration date of the exchange offer.

Name of Firm
- ---------------------------------------------     Authorized Signature
- ------------------------------

Address
- ---------------------------------------------------     Title
- ------------------------------------------------

Zip Code
- --------------------------------------------------     Name:
- ----------------------------------------------
                                                     PLEASE TYPE OR PRINT

Area Code and Tel. No
- ----------------------------------     Dated:
- ---------------------------, 2002

NOTE: DO NOT SEND ORIGINAL NOTES WITH THIS FORM. ORIGINAL NOTES SHOULD BE SENT
      ONLY WITH A LETTER OF TRANSMITTAL.

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