<PAGE>   1
                                                                    EXHIBIT 10.4


                CAPSTAR BROADCASTING CORPORATION PLEDGE AGREEMENT


         PLEDGE AGREEMENT (this "AGREEMENT"), dated as of May 29, 1998, made by
CAPSTAR BROADCASTING CORPORATION, a Delaware corporation (the "PLEDGOR"), to
CHANCELLOR MEDIA CORPORATION OF LOS ANGELES, a Delaware corporation, as
collateral agent (in such capacity, the "PLEDGEE"), for the benefit of (a) on a
senior basis, Chancellor Media Corporation of Los Angeles (the "SENIOR
CREDITOR"), and (b) on a basis junior and fully subordinated to the Senior
Creditor (i) the Banks, the Agent (as hereinafter defined) and the Co-Agents (as
hereinafter defined) from time to time party to the Credit Agreement hereinafter
referred to (such Banks, the Agent and the Co-Agents, the "SUBORDINATED NOTE
CREDITORS"), and (ii) any Bank that enters into an interest rate protection
agreement (including, without limitation, interest rate swaps, caps, floors,
collars and similar agreements, collectively the "INTEREST RATE PROTECTION
AGREEMENTS") guaranteed by the Pledgor, even if such Bank subsequently ceases to
be a Bank under the Credit Agreement for any reason and for so long as any such
Bank participates in the extension of any such Interest Rate Protection
Agreements, and any subsequent assignees (collectively, the "INTEREST RATE
PROTECTION CREDITORS" and, together with the Subordinated Note Creditors, the
"SUBORDINATED CREDITORS"), and, together with the Senior Creditor, the "SECURED
CREDITORS"). All capitalized terms used herein shall have the meanings provided
in Section 16 of this Agreement and, if not so defined herein, capitalized terms
used herein and defined in the Credit Agreement shall be used herein as so
defined.

                              W I T N E S S E T H:

         WHEREAS, the Pledgor is indebted to the Senior Creditor pursuant to a
Capstar Broadcasting Corporation Senior Secured Term Note dated as of May 29,
1998, in the original principal amount of $150,000,000.00, made payable by
Pledgor to Senior Creditor (as used herein, the term "SENIOR NOTE" means the
Note described above in this paragraph, as the same may be amended, modified,
extended, renewed, restated or supplemented from time to time, and including any
agreement extending the maturity of, or restructuring all or any portion of the
Indebtedness under such Note);

         WHEREAS, the Pledgor, Capstar Broadcasting Partners, Inc. ("CAPSTAR
BROADCASTING"), Capstar Radio Broadcasting Partners, Inc. ("CAPSTAR RADIO"), the
various Banks from time to time party thereto, Bankers Trust Company, as a
Co-Arranger and as Administrative Agent (in its capacity as Administrative
Agent, the "AGENT"), NationsBank, N.A., as a Co-Arranger and as Syndication
Agent, and Solomon Brothers Holding Company Inc. and Goldman, Sachs Credit
Partners L.P., as Co-Arrangers and as Documentation Agents (Agent, Syndication
Agent, Co-Arrangers and Documentation Agents are collectively, the "CO-AGENTS")
entered into a Credit Agreement, dated as of May 29, 1998, providing for the
making of Loans and the issuance of, and participation in, Letters of Credit as
contemplated therein (as used herein, the term "CREDIT AGREEMENT" means the
Credit Agreement described above in this paragraph, as the same may be amended,
modified, extended, renewed, restated or supplemented from time to time, and
including any agreement extending the maturity of, or restructuring all or any
portion of the Indebtedness under such agreement or any successor agreements);



                                        1

<PAGE>   2



         WHEREAS, the Pledgor (i) has guaranteed the obligations of Capstar
Radio under the Credit Agreement pursuant to Section 14 thereof (the "CREDIT
AGREEMENT GUARANTY"), and (ii) may at any time and from time to time guaranty
the obligations of Capstar Radio under one or more Interest Rate Protection
Agreements with one or more Interest Rate Protection Creditors (the "INTEREST
RATE PROTECTION GUARANTIES");

         WHEREAS, the obligations of the Pledgor in respect of (a) its
guaranties referred to above and (b) the Senior Note, shall be secured hereunder
as provided herein;

         WHEREAS, it is a condition precedent to each of the above-described
extensions of credit that the Pledgor shall have executed and delivered to the
Pledgee this Agreement;

         WHEREAS, the Pledgor desires to execute and deliver this Agreement to
satisfy the conditions described in the preceding paragraph;

                               A G R E E M E N T:

         NOW, THEREFORE, in consideration of the above-described extensions of
credit made and to be made and other benefits accruing to the Pledgor, the
receipt and sufficiency of which are hereby acknowledged, the Pledgor hereby
makes the following representations and warranties to the Pledgee for the
benefit of the Secured Creditors and hereby covenants and agrees with the
pledgee for the benefit of the Secured Creditors as follows:

         1.       SECURITY FOR OBLIGATIONS. This Agreement is made by the 
Pledgor for (x) the senior benefit of the Senior Creditor, and (y) the benefit,
on a basis junior and fully subordinated to the Senior Creditor, of the
Subordinated Creditors to secure:

                  (a) the full and prompt payment of all obligations and
         indebtedness of the Pledgor to the Senior Creditor under the Senior
         Note due and owing as a result of the prepayment provisions of the
         Senior Note or by acceleration (but specifically excluding any
         obligations and indebtedness due and owing solely as a result of the
         occurrence of the Stated Maturity Date (as defined in the Senior Note))
         and the due performance and compliance by the Pledgor with all of the
         terms, conditions and agreements contained in the Senior Note (all such
         obligations and liabilities described in this clause (a), the "SENIOR
         OBLIGATIONS");

                  (b) the full and prompt payment when due (whether at the
         stated maturity, by acceleration or otherwise) of all obligations and
         indebtedness of the Pledgor to the Subordinated Creditors under the
         Credit Agreement Guaranty and the due performance and compliance by the
         Pledgor with all of the terms, conditions and agreements contained in
         the Credit Agreement Guaranty (all such obligations and liabilities in
         this clause (b), the "CREDIT AGREEMENT OBLIGATIONS");

                  (c) the full and prompt payment when due (whether at the
         stated maturity, by acceleration or otherwise) of all obligations and
         liabilities owing by the Pledgor to the Interest Rate Protection
         Creditors under, or with respect to, any Interest Rate Protection



                                        2

<PAGE>   3



         Guaranty, whether such Interest Rate Protection Guaranty is now in
         existence or hereafter arising, and the due performance and compliance
         by the Pledgor with the terms, conditions and agreements contained
         therein (all such obligations and liabilities described in this clause
         (c), the "INTEREST RATE PROTECTION OBLIGATIONS") and, together with the
         Credit Agreement Obligations, the "SUBORDINATED OBLIGATIONS");

                  (d) any and all sums advanced by the Pledgee in order to
         preserve the Collateral or preserve its security interest in the
         Collateral in a manner not in violation of the terms hereof; and

                  (e) in the event of any proceeding for the collection or
         enforcement of any indebtedness, obligations, or liabilities of the
         Pledgor, Capstar Broadcasting and/or Capstar Radio referred to in
         clauses (a) through (d), after an Event of Default shall have occurred
         and be continuing, the reasonable expenses of retaking, holding,
         preparing for sale or lease, selling or otherwise disposing of or
         realizing on the Collateral, or of any exercise by the Pledgee of its
         rights hereunder, together with reasonable attorneys' fees and court
         costs.

All such obligations, liabilities, sums and expenses set forth in clauses (a)
through (e) of this Section 1 being herein collectively called the
"OBLIGATIONS," it being acknowledged and agreed that the "Obligations" shall
include extensions of credit of the types described above, whether outstanding
on the date of this Agreement or extended from time to time after the date of
this Agreement.

         2.       DEFINITION OF STOCK. As used herein, the term "STOCK" shall 
mean all of the issued and outstanding shares of common stock of Capstar
Broadcasting at any time owned by the Pledgor. The Pledgor represents and
warrants to the Senior Creditors and the Subordinated Creditors that on the date
hereof (a) the Stock consists of the number and type of shares of the stock of
Capstar Broadcasting as described in Annex A hereof; (b) the Stock constitutes
that percentage of the issued and outstanding common stock of Capstar
Broadcasting as is set forth in Annex A hereto; (c) the Pledgor is the holder of
record and sole beneficial owner of the Stock and there exist no options or
preemption rights in respect of any of the Stock; and (d) the Stock constitutes
all of the issued and outstanding shares of common stock of Capstar
Broadcasting.

         3.       PLEDGE OF STOCK, ETC.

                  3.1 PLEDGE. (a) To secure the Obligations and for the purposes
set forth in Section 1, the Pledgor hereby: (i) grants to the Pledgee for the
benefit of (A) the Senior Creditor, a senior security interest in all of the
Collateral, and (B) the Subordinated Creditors, a security interest, junior and
fully subordinated to the security interest granted for the benefit of the
Senior Creditor above, in all of the Collateral; (ii) pledges and deposits as
security with the Pledgee all Stock owned by the Pledgor on the date hereof and
delivers to the Pledgee certificates therefor, accompanied by undated stock
powers duly executed in blank by the Pledgor; and (iii) assigns, transfers,
hypothecates, mortgages, charges and sets over to the Pledgee all of the
Pledgor's right, title and interest in and to the Stock (and in and to the
certificates evidencing the Stock), to be held by the Pledgee, upon the terms
and conditions set forth in this Agreement.



                                        3

<PAGE>   4



                  (b) The security interest granted to the Pledgee for the
benefit of each Subordinated Creditor shall be junior and fully subordinated to
the security interest in the Collateral granted to the Pledgee for the benefit
of the Senior Creditor, it being understood that each Subordinated Creditor
agrees that no distribution or payment arising from the enforcement or other
realization of, and no distribution or payment in any bankruptcy, insolvency,
reorganization or similar proceeding of the Pledgor or any Subsidiary of the
Pledgor made in respect of or in recognition of, the security interest created
hereunder in respect of the Collateral shall be applied to the Obligations of
such Subordinated Creditor, or shall be for the benefit of such Subordinated
Creditor, until such time as all Senior Obligations (including, without
limitation, all interest accruing after the commencement of any such proceeding
at the contractual rate provided in the respective documentation, whether or not
permitted as an allowable claim) shall have been irrevocably paid in full in
cash or cash equivalents. It is further understood and agreed by each Secured
Creditor that the Pledgee shall take all actions to enforce, realize upon and
protect the security interests created hereunder in respect of the Collateral,
and shall assert all claims, and make all filings, in respect of the Collateral
or any portion thereof, under or in respect of any bankruptcy, insolvency,
reorganization or similar proceeding, only if and to the extent directed by the
Required Secured Creditors and no Secured Creditor acting individually or
together shall have the right to take any such action or assert any such claim.

                  3.2 SUBSEQUENTLY ACQUIRED STOCK. (a) If the Pledgor shall
acquire (by purchase, stock split, stock dividend, reclassification or
otherwise) any new, substituted or additional Stock at any time or from time to
time after the date hereof, the Pledgor will promptly thereafter pledge and
deposit such Stock (or certificates representing such Stock) as security with
the Pledgee and deliver to the Pledgee certificates therefor, accompanied by
undated stock powers duly executed in blank by the Pledgor, or such other
instruments of transfer as are acceptable to the Pledgee, and will promptly
thereafter deliver to the Pledgee a certificate executed by the president or any
vice president of the Pledgor describing such Stock and certifying that the same
has been duly pledged with the Pledgee hereunder.

                  (b) If the Pledgor acquires any subscriptions, warrants or any
other rights or options in connection with the Stock, all new stock or other
securities acquired through such subscriptions, warrants, rights or options by
the Pledgor shall be promptly pledged and delivered to the Pledgee, accompanied
by undated stock powers duly executed in blank by the Pledgor, or such other
instruments of transfer as are reasonably acceptable to the Pledgee, and will
promptly thereafter deliver to the Pledgee a certificate executed by the
president or any vice president of the Pledgor describing such Stock and
certifying that the same has been duly pledged with the Pledgor hereunder.

                  3.3 UNCERTIFICATED STOCK. Notwithstanding anything to the
contrary contained in Sections 3.1 and 3.2, if any Stock (whether now owned or
hereafter acquired) are uncertificated securities, the Pledgor shall promptly
notify the Pledgee thereof, and shall promptly take all actions required to
perfect the security interest of the Pledgee under applicable law (including, in
any event, under Sections 8-313 and 8-321 of the New York Uniform Commercial
Code if applicable). The Pledgor further agrees to take such actions as the
Pledgee deems necessary or desirable to effect the foregoing and to permit the
Pledgee to exercise any of its rights and remedies hereunder, and agrees



                                        4

<PAGE>   5



to provide an opinion of counsel reasonably satisfactory to the Pledgee with
respect to any such pledge of uncertificated Stock promptly upon request of the
Pledgee.

                  3.4 DEFINITIONS OF PLEDGED STOCK AND COLLATERAL. All Stock at
any time pledged or required to be pledged hereunder is hereinafter called the
"PLEDGED STOCK"; and the Pledged Stock, together with all proceeds thereof,
including any securities and moneys received and at the time held by the Pledgee
hereunder, are hereinafter called the "COLLATERAL."

         4.       APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The Pledgee 
shall have the right to appoint one or more sub-agents for the purpose of
retaining physical possession of the Pledged Stock which may be held (in the
discretion of the Pledgee) in the name of the Pledgor, endorsed or assigned in
blank or in favor of the Pledgee or any nominee or nominees of the Pledgee or a
subagent appointed by the Pledgee.

         5.       VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until an 
Event of Default shall have occurred and be continuing and the Pledgee, acting
at the direction of the Required Secured Creditors, shall have notified the
Pledgor that the Pledgor may no longer exercise the rights referred to below
(except that no such notice shall be required in the case of a Bankruptcy
Default with respect to the Pledgor), the Pledgor shall be entitled to exercise
all voting rights attaching to any and all Pledged Stock, and to give consents,
waivers or ratifications in respect thereof; provided, that no vote shall be
cast or any consent, waiver or ratification given or any action taken which
would violate or be inconsistent with any of the terms of this Agreement, the
Senior Note or, after the Senior Lien Termination Date, any of the terms of the
Credit Agreement, or which would have the effect of impairing the position or
interests of the Pledgee or the Senior Creditor or, after the Senior Lien
Termination Date, any other Secured Creditor. All such rights of the Pledgor to
vote and to give consents, waiver and ratifications shall cease in case an Event
of Default shall occur and be continuing and, except in the case of a Bankruptcy
Default with respect to the Pledgor, the Pledgee, acting at the direction of the
Required Secured Creditors, shall have notified the Pledgor of such cessation,
and Section 7 shall become applicable.

         6.       DIVIDENDS AND OTHER DISTRIBUTIONS. Unless and until there 
shall have occurred and be continuing (x) a Bankruptcy Default or Notified
Acceleration Event, or (y) any other Event of Default or Acceleration Event, but
in the case of this clause (y) only to the extent the Pledgee (acting at the
direction of the Required Secured Creditors) has so notified the Pledgor, all
dividends and distributions payable in respect of the Pledged Stock shall be
paid to the Pledgor, provided that the Pledgee shall be entitled to receive
directly, and to retain as part of the Collateral:

                  (a)    all other or additional common stock (other than cash 
         or assets) paid or distributed by way of dividend or otherwise, as the
         case may be, in respect of the Pledged Stock;

                  (b)    all other or additional common stock paid or 
         distributed in respect of the Pledged Stock by way of stock-split,
         spin-off, split-up, reclassification, combination of shares or similar
         rearrangement;




                                        5

<PAGE>   6



                  (c)    all other or additional common stock which may be paid 
         in respect of the Collateral by reason of any consolidation, merger,
         exchange of stock, conveyance of assets, liquidation or similar
         corporate reorganization; and

                  (d)    unless the payment or any such cash dividend shall have
         been consented to by the Pledgee (acting at the direction of the
         Required Secured Creditors), any cash dividends or distributions
         declared or paid in violation of the provisions of the Credit
         Agreement.

         Nothing contained in this Section 6 shall limit or restrict in any way
the Pledgee's right to receive proceeds of the Collateral in any form in
accordance with Section 3 of this Agreement. All dividends, distributions or
other payments which are received by the Pledgor contrary to the provisions of
this Section 6 or Section 7 shall be received in trust for the benefit of the
Pledgee, shall be segregated from other property or funds of the Pledgor and
shall be forthwith paid over to the Pledgee as Collateral in the same form as so
received (with any necessary endorsement).

         7.       REMEDIES IN CASE OF SPECIFIED EVENTS. If there shall have 
occurred and be continuing (x) a Bankruptcy Default or Notified Acceleration
Event or (y) any other Event of Default or Acceleration Event, but in the case
of this clause (y) only to the extent the Required Secured Creditors have so
directed, then and in every such case, the Pledgee shall be entitled to exercise
all of the rights, powers and remedies (whether vested in it by this Agreement
or by law) for the protection and enforcement of its rights in respect of the
Collateral, and the Pledgee shall be entitled to exercise all the rights and
remedies of a secured party under the Uniform Commercial Code as in effect in
any applicable jurisdiction and also shall be entitled, without limitation, to
exercise the following rights, which the Pledgor hereby agrees to be
commercially reasonable:

                  (a)    to receive all amounts payable in respect of the 
         Collateral otherwise payable under Section 6 to the Pledgor;

                  (b)    to transfer all or any part of the Collateral into the
         Pledgee's name or the name of its nominee or nominees;

                  (c)    to vote all or any part of the Pledged Stock (whether 
         or not transferred into the name of the Pledgee) and give all consents,
         waivers and ratifications in respect of the Collateral and otherwise
         act with respect thereto as though it were the outright owner thereof
         (the Pledgor hereby irrevocably constituting and appointing the Pledgee
         the irrevocable proxy and true and lawful attorney-in-fact of the
         Pledgor, with full power of substitution to do so; it being agreed and
         understood that the Pledgee is under no circumstances obligated by the
         terms of this Agreement to exercise such rights); and

                  (d)    at any time or from time to time to sell, assign and
         deliver, or grant options to purchase, all or any part of the
         Collateral, or any interest therein, at any public or private sale,
         without demand of performance, advertisement or notice of intention to
         sell or of the time or place of sale of adjournment thereof or to
         redeem or otherwise (all of which are hereby waived by the Pledgor),
         for cash, on credit or for other property, for immediate or future
         delivery without any assumption of credit risk, and for such price or
         prices and on such



                                        6

<PAGE>   7



         terms as the Pledgee in its absolute discretion may determine, provided
         that at least 10 days' notice of the time and place of any such sale
         shall be given to the Pledgor. The Pledgee shall not be obligated to
         make any such sale of Collateral regardless of whether any such notice
         of sale has theretofore been given. The Pledgor hereby waives and
         releases to the fullest extent permitted by law any right or equity of
         redemption with respect to the Collateral, whether before or after sale
         hereunder, and all rights, if any, of marshaling the Collateral and any
         other security for the Obligations or otherwise. At any such sale,
         unless prohibited by applicable law, the Pledgee on behalf of a Class
         (or, to the extent agreed to by the Required Creditors of each such
         Class, two or more Classes acting together) may bid for and purchase
         all or any part of the Collateral so sold free from any such right or
         equity of redemption. Neither the Pledgee nor any Secured Creditor
         shall be liable for failure to collect or realize upon any or all of
         the Collateral or for any delay in so doing nor shall any of them be
         under any obligation to take any action whatsoever with regard thereto.

         8.       REMEDIES, ETC., CUMULATIVE. Each and every right, power and 
remedy of the Pledgee provided for in this Agreement, or now or hereafter
existing at law or in equity or by statute shall be cumulative and concurrent
and shall be in addition to every other such right, power or remedy. The
exercise or beginning of the exercise by the Pledgee or any Secured Creditor of
any one or more of the rights, powers or remedies provided for in this
Agreement, or now or hereafter existing at law or in equity or by statute or
otherwise shall not preclude the simultaneous or later exercise by the Pledgee
or any Secured Creditor of all such other rights, powers or remedies, and no
failure or delay on the part of the Pledgee or any Secured Creditor to exercise
any such right, power or remedy shall operate as a waiver thereof. No notice to
or demand on the Pledgor in any case shall entitle it to any other or further
notice or demand in similar or other circumstances or constitute a waiver of any
of the rights of the Pledgee or any Secured Creditor to any other or further
action in any circumstances without notice or demand.

         9.       APPLICATION OF PROCEEDS. (a) All moneys collected by the 
Pledgee upon any sale or other disposition of the Collateral through
enforcement, realization hereunder or otherwise, together with all other moneys
received by the Pledgee hereunder in respect of any Collateral, shall first be
applied to the payment of all costs and expenses incurred by the Pledgee in
connection with such sale or disposition, the delivery of the Collateral or the
collection of any such moneys (including, without limitation, reasonable
attorneys' fees and expenses) and the balance of such moneys (the "REMAINING
PROCEEDS") shall be applied by the Pledgee as required below.

                  (b)    Before the Senior Lien Termination Date and so long as 
any Senior Obligations remain unpaid, the Remaining Proceeds shall be applied to
satisfy the Senior Obligations.

                  (c)    Either (i) before the Senior Lien Termination Date and
after the payment in full of all Senior Obligations or (ii) after the Senior
Lien Termination Date and, in either case, so long as any Subordinated
Obligations remain unpaid, any Remaining Proceeds not theretofore distributed
pursuant to the foregoing provisions of this Section 9 shall be applied to
satisfy the Subordinated Obligations, with each Subordinated Creditor to receive
an amount equal to its outstanding Subordinated Obligations or, if insufficient
proceeds are available for the payment in



                                        7

<PAGE>   8



full of all outstanding Subordinated Obligations, its Pro Rata Share of the
amount required to be distributed pursuant to this clause.

                  (d)    As used in clause (c) above, "Pro Rata Share" shall 
mean, when calculating a Subordinated Creditor's portion of any distribution or
amount, that amount (expressed as a percentage) equal to a fraction, the
numerator of which is the unpaid amount of its Principal Subordinated
Obligations owing to it (or if there are no unpaid Principal Subordinated
Obligations, the remaining Subordinated Obligations owed it) and the denominator
of which is the outstanding principal amount of all Subordinated Obligations (or
if there are no unpaid Principal of Subordinated Obligations, the remaining
Subordinated Obligations owned to the Subordinated Creditors). If a payment to
any Subordinated Creditor of its Pro Rata Share of any distribution would result
in an overpayment of the Subordinated Obligations of such Subordinated Creditor,
such excess amount shall instead be distributed to the unpaid Subordinated
Obligations of the other Subordinated Creditors, which each Subordinated
Creditor whose Subordinated Obligations have not been paid in full to receive an
amount equal to such excess amount multiplied by a fraction the numerator of
which is the unpaid Subordinated Obligations of such Subordinated Creditor and
the denominator of which is the unpaid Subordinated Obligations of all
Subordinated Creditors.

                  (e)    All payments required to be made to Subordinated Note
Creditors hereunder shall be made to the Agent under the Credit Agreement for
the account of the respective Subordinated Note Creditors. All payments required
to be made to Interest Rate Protection Agreement Creditors hereunder shall be
made to the paying agent under the applicable Interest Rate Protection
Agreement, or in the case of Interest Rate Protection Agreements without a
paying agent, directly to the applicable Interest Rate Protection Agreement
Creditor.

                  (f)    For purposes of applying payments received in 
accordance with this Section 9, the Pledgee shall be entitled to rely (i) upon
the Agent, for a determination (which the Agent agrees to provide upon request
of the Pledgee) of the unpaid Credit Agreement Obligations and, (ii) upon any
Interest Rate Protection Agreement Creditor, for a determination (which each
Interest Rate Protection Agreement Creditor agrees to provide upon request of
the Pledgee) of the unpaid Interest Rate Protection Obligations owed to such
Interest Rate Protection Agreement Creditor. Unless it has actual knowledge
(including by way of written notice from a Secured Creditor) to the contrary,
the Agent, in furnishing information pursuant to the preceding sentence, and the
Pledgee in acting hereunder, shall be entitled to assume that no obligations
other than principal, interest and regularly accruing fees are owing to any
Secured Creditor.

                  (g)    Any Remaining Proceeds not otherwise applicable or 
applied pursuant to this Section 9 shall be paid over the Pledgor pursuant to
the terms of Section 19.

         10.      PURCHASERS OF COLLATERAL. Upon any sale of the Collateral by 
the Pledgee hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise), the receipt of the Pledgee or the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold, and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to the Pledgee or such officer or be answerable in any way for the
misapplication or nonapplication thereof.



                                        8

<PAGE>   9



         11.      INDEMNITY. The Pledgor agrees to indemnify and hold harmless 
the Pledgee and each Secured Creditor and their respective successors, assigns,
employees, agents and servants (individually an "INDEMNITEE," and collectively
the "INDEMNITEES") from and against any and all claims, demands, losses,
judgments and liabilities (including liabilities for penalties) of whatsoever
kind or nature, and to reimburse each Indemnitee for all costs and expenses,
including reasonable attorneys' fees, growing out of or resulting from this
Agreement or the exercise by any Indemnitee of any right or remedy granted to it
hereunder or under the other Financing Documents, provided that the Pledgor
shall not be required to indemnify any Indemnitee in respect of any claims,
demands, losses, judgments, liabilities, costs or expenses arising from the
gross negligence or willful misconduct of such Indemnitee. In no event shall any
Indemnitee be liable, in the absence of gross negligence or willful misconduct
on its part, for any matter or thing in connection with this Agreement other
than to account for moneys actually received by it in accordance with the terms
hereof. If and to the extent that the obligations of the Pledgor under this
Section 11 are unenforceable for any reason, the Pledgor hereby agrees to make
the maximum contribution to the payment and satisfaction of such obligations
which is permissible under applicable law. The Pledgor agrees that upon written
notice by any Indemnitee of the assertion of any liability, obligation, damage,
injury, penalty, claim, demand, action, suit or judgment, the Pledgor shall
assume full responsibility for the defense thereof. Each Indemnitee agrees to
use its best efforts to promptly notify the Pledgor of any such assertion of
which such Indemnitee has knowledge.

         12.      FURTHER ASSURANCES; POWER-OF-ATTORNEY. (a) The Pledgor agrees 
that it will join with the Pledgee in executing and, at its own expense, file
and refile under the Uniform Commercial Code or other applicable law such
financing statements, continuation statements and other documents in such
offices as the Pledgee may reasonably deem necessary or appropriate and wherever
required by law in order to perfect and preserve the Pledgee's security interest
in the Collateral and hereby authorizes the Pledgee to file financing statements
and amendments thereto relative to all or any part of the Collateral without the
signature of the Pledgor where permitted by law, and agrees to do such further
acts and things and to execute and deliver to the Pledgee such additional
conveyances, assignments, agreements and instruments (including, without
limitation, proxies and dividend payment orders) as the Pledgee may reasonably
require or deem advisable to carry into effect the purposes of this Agreement or
to further assure and confirm unto the Pledgee its rights, powers and remedies
hereunder.

                  (b)    The Pledgor hereby appoints the Pledgee the Pledgor's
attorney-in-fact, with full authority in the place and stead of the Pledgor and
in the name of the Pledgor or otherwise, from time to time after the occurrence
and during the continuance of an Event of Default, in the Pledgee's discretion
to take any action and to execute any instrument which the Pledgee may
reasonably deem necessary or advisable to accomplish the purposes of this
Agreement.

         13.      THE PLEDGEE AS COLLATERAL AGENT. The Pledgee will hold in
accordance with this Agreement all items of the Collateral at any time received
under this Agreement. It is expressly understood and agreed that the obligations
of the Pledgee as holder of the Collateral and interests therein and with
respect to the disposition thereof, and otherwise under this Agreement, are only
those expressly set forth in this Agreement. The Pledgee shall act hereunder on
the terms and conditions set forth herein and in Annex B hereto.



                                        9

<PAGE>   10



         14.      TRANSFER BY THE PLEDGOR. Except for sales of Collateral 
permitted (a) after the Senior Lien Termination Date, pursuant to the Credit
Agreement, or (b) at any time with the written consent of the Required Secured
Creditors, the Pledgor will not sell or otherwise dispose of, grant any option
with respect to, or mortgage, pledge or otherwise encumber any of the Collateral
or any interest therein except in accordance with the terms of this Agreement.

         15.      REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGOR. The
Pledgor represents and warrants that (a) it is, or at the time when pledged
hereunder will be, the legal, record and beneficial owner of, and has (or will
have) good and merchantable title to, all the Pledged Stock, subject to no Lien
(except the Lien created by this Agreement); (b) it has full corporate power,
authority and legal right to pledge all the Pledged Stock pursuant to this
Agreement; and (c) all the shares of the Pledged Stock have been duly and
validly issued, are fully paid and non-assessable and are subject to no option
to purchase or similar rights. The Pledgor covenants and agrees that it will
defend the Pledgee's right, title and security interest in and to the Pledged
Stock and the proceeds thereof against the claims and demands of all Persons
whomsoever; and the Pledgor covenants and agrees that it will have like title to
and right to pledge any other property at any time hereafter pledged to the
Pledgee as collateral hereunder and will likewise defend the rights thereto and
security interest therein of the Pledgee and the Secured Creditors.

         16.      DEFINITIONS. The following terms shall have the meanings 
herein specified unless the context otherwise requires. Such definitions shall
be equally applicable to the singular and plural forms of the terms defined.

                  "ACCELERATION EVENT" shall mean the acceleration prior to the
stated final maturity, or the failure to pay at stated final maturity, of
Obligations representing borrowed money or extensions of credit (including,
without limitation, all Letters of Credit Outstanding) pursuant to the Senior
Note, the Credit Agreement, or any Interest Rate Protection Agreement, provided,
that in each case, any such Acceleration Event shall cease to exist upon payment
in full of the Obligations so accelerated or not paid.

                  "AGREEMENT" shall have the meaning provided in the first
paragraph hereof.

                  "BANKRUPTCY DEFAULT" shall mean any Event of Default with
respect to the Pledgor pursuant to Section 10.05 of the Credit Agreement or
under any analogous provision of any of the Financing Documents.

                  "CAPSTAR BROADCASTING" shall have the meaning provided in the
second WHEREAS clause.

                  "CAPSTAR RADIO" shall have the meaning provided in the second
WHEREAS clause.

                  "CLASS" shall mean each class of Secured Creditors, i.e., (a)
the Senior Creditor as holder of the Senior Obligations, (b) the Subordinated
Note Creditors as holders of the Credit Agreement Obligations, and (c) the
Interest Rate Protection Creditors as holders of the Interest Rate Protection
Obligations.



                                       10

<PAGE>   11



                  "COLLATERAL" shall have the meaning provided in Section 3.4.

                  "CREDIT AGREEMENT" shall have the meaning provided in the
second WHEREAS clause.

                  "CREDIT AGREEMENT GUARANTY" shall have the meaning provided in
the third WHEREAS clause.

                  "CREDIT AGREEMENT OBLIGATIONS" shall have the meaning provided
in Section 1(b).

                  "EVENT OF DEFAULT" shall mean (a) before the Senior Lien
Termination Date, each Event of Default under, and as defined in, the Senior
Note, and (b) after the Senior Lien Termination Date, each Event of Default
under, and as defined in, the Credit Agreement.

                  "FINANCING DOCUMENTS" shall mean the Senior Note, the Credit
Agreement, the other Credit Documents (as defined in the Credit Agreement) and
each Interest Rate Protection Agreement.

                  "INTEREST RATE PROTECTION AGREEMENT" shall have the meaning
provided in the first paragraph hereof.

                  "INTEREST RATE PROTECTION AGREEMENT CREDITOR" shall have the
meaning provided in the first paragraph hereof.

                  "INTEREST RATE PROTECTION OBLIGATIONS" shall have the meaning
provided in Section 1(c).

                  "LETTER OF CREDIT OUTSTANDING" shall have the meaning provided
in the Credit Agreement.

                  "LIEN" shall mean any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
preference, priority or other security agreement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, any financing or similar statement or notice filed under
the Uniform Commercial Code, as in effect in any applicable jurisdiction, or any
other similar recording or notice statute, and any lease having substantially
the same effect as any of the foregoing).

                  "NOTIFIED ACCELERATION EVENT" shall mean any Acceleration
Event with respect to which the Required Secured Creditors have given written
notice to the Pledgee that a "Notified Acceleration Event" exists, provided that
such written notice may only be given if such Acceleration Event is continuing
and, provided further that any such Notified Acceleration Event shall cease to
exist once there is no longer any Acceleration Event with respect thereto in
existence.

                  "OBLIGATIONS" shall have the meaning provided in the last
clause of Section 1.




                                       11

<PAGE>   12



                  "PERSON"shall mean any individual, partnership, joint venture,
limited liability company, firm, corporation, association, trust or other
enterprise or any government or political subdivision or any agency, department
or instrumentality thereof.

                  "PLEDGEE" shall have the meaning provided in the first
paragraph hereof; provided that each reference to "Pledgee" contained herein
(including in Annex B attached hereto) shall include any successor thereto.

                  "PLEDGOR" shall have the meaning provided in the first
paragraph hereof.

                  "PRINCIPAL SUBORDINATED OBLIGATIONS" shall mean (a) for each
Subordinated Note Creditor, the sum of (1) the outstanding principal amount of
Loans (as defined in the Credit Agreement) made by it plus (2) its Adjusted RL
Percentage (as defined in the Credit Agreement) of all Letters of Credit
Outstanding, and (b) for each Interest Rate Protection Creditor, the unpaid
amount of any termination or similar fee payable to such creditor pursuant to
its respective Interest Rate Protection Agreement.

                  "REMAINING PROCEEDS" shall have the meaning provided in
Section 9(a).

                  "REQUIRED BANKS" shall have the meaning provided in the Credit
Agreement.

                  "REQUIRED CREDITORS" of any Class shall mean (a) with respect
to the Senior Obligations, the Senior Creditor, (b) with respect to the Credit
Agreement Obligations, the Required Banks, and (c) with respect to the Interest
Rate Protection Obligations, the holders of at least a majority of all
obligations outstanding from time to time under the Interest Rate Protection
Agreements.

                  "REQUIRED SECURED CREDITORS" shall have the meaning provided
in Section 4 of Annex B hereto.

                  "SECURED CREDITORS" shall have the meaning provided in the
first paragraph hereof.

                  "SENIOR CREDITOR" shall have the meaning provided in the first
paragraph hereof.

                  "SENIOR LIEN TERMINATION DATE" shall have the meaning provided
in Section 19(a)(ii).

                  "SENIOR OBLIGATIONS" shall have the meaning provided in
Section 1(b).

                  "SENIOR NOTE" shall have the meaning provided in the first
WHEREAS clause.

                  "SUBORDINATED CREDITORS" shall have the meaning provided in
the first paragraph hereof.




                                       12

<PAGE>   13



                  "SUBORDINATED NOTE CREDITORS" shall have the meaning provided
in the first paragraph hereof.

                  "SUBORDINATED OBLIGATIONS" shall have the meaning provided in
Section 1(c).

         17.      PLEDGOR'S OBLIGATIONS ABSOLUTE, ETC. The obligations of the 
Pledgor under this Agreement shall be absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated or otherwise affected by, any circumstance or
occurrence whatsoever, including, without limitation: (a) any renewal,
extension, amendment or modification of or addition or supplement to or deletion
from any of the Financing Documents or any other instrument or agreement
referred to therein, or any assignment or transfer of any thereof; (b) any
waiver, consent, extension, indulgence or other action or inaction under or in
respect to any such agreement or instrument including, without limitation, this
Agreement; (c) any furnishing of any additional security to the Pledgee or its
assignee or any acceptance thereof or any release of any security by the Pledgee
or its assignee; (d) any limitation on any party's liability or obligations
under any such instrument or agreement or any invalidity or unenforceability, in
whole or in part, of any such instrument or agreement or any term thereof; or
(e) any bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation or other like proceeding relating to the Pledgor or any
subsidiary of the Pledgor, or any action taken with respect to this Agreement by
any trustee or receiver, or by any court, in any such proceeding, whether or not
the Pledgor shall have notice or knowledge of any of the foregoing. The Pledgor
hereby waives any right to require that an action be brought against any other
Person prior to the exercise of the remedies hereunder.

         18.      REGISTRATION, ETC. (a) If there shall have occurred and be
continuing (i) a Bankruptcy Default or Notified Acceleration Event or (ii) any
other Event of Default or Acceleration Event, but in the case of this clause
(ii) only to the extent the Required Secured Creditors have so directed, then in
either such case, upon receipt by the Pledgor from the Pledgee of a written
request or requests that the Pledgor cause any registration, qualification or
compliance under any Federal or state securities law or laws to be effected with
respect to all or any part of the Pledged Stock (it being understood that the
Pledgee shall not under any circumstances be required to make such request), the
Pledgor as soon as practicable and at its expense will use its best efforts to
cause such registration to be effected (and be kept effective) as may be so
requested and as would permit or facilitate the sale and distribution of such
Pledged Stock, including, without limitation, registration under the Securities
Act of 1933, as then in effect (or any similar statute then in effect),
appropriate qualifications under applicable blue sky or other state securities
laws and appropriate compliance with any other governmental requirements,
provided that the Pledgee shall furnish to the Pledgor such information
regarding the Pledgee as the Pledgor may reasonably request in writing and as
shall be required in connection with any such registration, qualification or
compliance. The Pledgor will cause the Pledgee to be kept reasonably advised in
writing as to the progress of each such registration, qualification or
compliance and as to the completion thereof, will furnish to the Pledgee such
number of prospectuses, offering circulars or other documents incident thereto
as the Pledgee from time to time may reasonably request, and will indemnify the
Pledgee and all others participating in the distribution of such Pledged Stock
against all claims, losses, damages and liabilities caused by any untrue
statement (or alleged untrue statement) of a material fact contained therein (or
in any related



                                       13

<PAGE>   14



registration statement, notification or the like) or by any omission (or alleged
omission) to state therein (or in any related registration statement,
notification or the like) a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as the
same may have been caused by an untrue statement or omission based upon
information furnished in writing to the Pledgor by the Pledgee expressly for use
therein.

                  (b)    If at any time when the Pledgee shall determine to
exercise its right to sell all or any part of the Pledged Stock pursuant to
Section 7, and such Pledged Stock or the part thereof to be sold shall not, for
any reason whatsoever, be effectively registered under the Securities Act of
1933, as then in effect, the Pledgee may, in its sole and absolute discretion,
sell such Pledged Stock or part thereof by private sale in such manner and under
such circumstances as Pledgee may deem necessary or advisable in order that such
sale may legally be effected without such registration. Without limiting the
generality of the foregoing, in any such event the Pledgee, in its sole and
absolute discretion (i) may proceed to make such private sale notwithstanding
that a registration statement for the purpose of registering such Pledged Stock
or part thereof shall have been filed under such Securities Act, (ii) may
approach and negotiate with a single possible purchaser to effect such sale, and
(iii) may restrict such sale to a purchaser who will represent and agree that
such purchaser is purchasing for its own account, for investment, and not with a
view to the distribution or sale of such Pledged Stock or part thereof. In the
event of any such sale, the Pledgee shall incur no responsibility or liability
for selling all or any part of the Pledged Stock at a price which the Pledgee,
in its sole and absolute discretion, may in good faith deem reasonable under the
circumstances, notwithstanding the possibility that a substantially higher price
might be realized if the sale were deferred until after registration as
aforesaid.

         19.      TERMINATION; RELEASE. (a) It is expressly acknowledged and 
agreed that the Liens and security interests granted under this Agreement for
the benefit of the Senior Creditor (i) with respect to all or any portion of the
Collateral, may be released in writing at any time by the Senior Creditor
hereunder, and (ii) with respect to all or any portion of the Collateral, shall
be released on the date on which Senior Note has terminated and all Senior
Obligations have been paid in full (the "SENIOR LIEN TERMINATION DATE"). Upon
any release of the type described in the immediately preceding sentence, the
Pledgee shall, at the request and expense of the Pledgor, release the Collateral
being released and execute and deliver to the Pledgor a proper instrument or
instruments acknowledging the release of such Collateral from this Agreement,
and will duly assign, transfer and deliver to the Pledgor (without recourse and
without any representation or warranty) the Collateral being released as
described above.

                  (b)    Following the date on which all Obligations have been 
paid in full and all Financing Documents shall have terminated, this Agreement
shall terminate, and the Pledgee, at the request and expense of the Pledgor,
will execute and deliver to the Pledgor a proper instrument or instruments
acknowledging the satisfaction and termination of this Agreement, and will duly
assign, transfer and deliver to the Pledgor (without recourse and without any
representation or warranty) such of the Collateral as may be in the possession
of the Pledgee and has not theretofore been sold or otherwise applied or
released pursuant to this Agreement, together with any moneys at the time held
by the Pledgee hereunder.




                                       14

<PAGE>   15



         20.      NOTICES, ETC. All notices and other communications hereunder 
shall be in writing and shall be delivered or mailed by first class mail,
postage prepaid, addressed as follows:

                  (a)      if to the Pledgor, at:

                           Capstar Broadcasting Corporation
                           600 Congress Avenue, Suite 1400
                           Dallas, Texas  78705
                           Attention:       Mr. William S. Banowsky
                           Facsimile No.: (512) 404-6850

                  (b)      if to the Pledgee, at:

                           Chancellor Media Corporation of Los Angeles
                           433 East Las Colinas Boulevard, Suite 1130
                           Irving, Texas  75039
                           Attention:       Mr. Jeffrey A. Marcus
                                            Mr. Matthew E. Devine
                           Facsimile No.: (972) 869-3671

                           with a copy to:

                           Latham & Watkins
                           1001 Pennsylvania Ave., N.W.
                           Suite 1300
                           Washington, D.C.  2004
                           Attention:       Mr. Eric L. Bernthal, Esq.
                           Facsimile No.: (202) 637-2201

                  (c)      if to any Subordinated Note Creditor, either (i) to 
the Agent, at the address of the Agent specified in the Credit Agreement or (ii)
at such address as such Subordinated Note Creditor shall have specified in the
Credit Agreement;

                  (d)      if to any Interest Rate Protection Creditor, either 
(i) to the paying agent or other representative for the Interest Rate Protection
Creditors, at such address as such representative may have provided to the
Pledgor and the Pledgee from time to time, or (ii) directly to the Interest Rate
Protection Creditors at such address as the Interest Rate Protection Creditors
shall have specified in writing to the Pledgor and the Pledgee;

         21.      WAIVER; AMENDMENT. None of the terms and conditions of this
Agreement may be changed, waived, modified or varied in any manner whatsoever
unless in writing duly signed by the Pledgor and the Pledgee (with the written
consent of the Required Secured Creditors), provided, however, that no
modifications shall be made to Section 9 of this Agreement without the consent
of each Secured Creditor adversely affected thereby; and provided further, that
any change, waiver, modification or variance affecting the rights and benefits
of a single Class of Secured Creditors (and



                                       15

<PAGE>   16



not Secured Creditors in a like or similar manner) shall require the written
consent of the Required Creditors or such Class of Secured Creditors.

         22.      MISCELLANEOUS. This Agreement shall be binding upon the 
successors and assigns of the Pledgor and shall inure to the benefit of and be
enforceable by the Pledgee and its successors and assigns. This Agreement shall
be construed and enforced in accordance with and governed by the law of the
State of New York. The headings in this Agreement are for purposes of reference
only and shall not limit or define the meaning hereof. This Agreement may be
executed in any number of counterparts, each of which shall be an original, but
all of which shall constitute one instrument. In the event that any provision of
this Agreement shall prove to be invalid or unenforceable, such provision shall
be deemed to be severable from the other provisions of this Agreement which
shall remain binding on all parties hereto.

         23.      WAIVER OF JURY TRIAL.  THE PLEDGOR HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.

         24.      PLEDGEE AS SECURED PARTY. It is hereby agreed by Pledgor that 
the Pledgee may, with the consent of the Required Secured Creditors and at the
request of the Required Secured Creditors of a specific Class or Classes
comprised of Subordinated Creditors, act to foreclose upon the Collateral as a
"secured party" under the Uniform Commercial Code as in effect in any applicable
jurisdiction acting solely upon behalf of such Class or Classes, and in
connection with such foreclosure, to bid on Obligations held by such Class or
Classes. In any event, the Pledgee would not be acting as, and would not
constitute, a "secured party" in respect of the Classes holding superior
obligations to those held by the Class or Classes for which the Pledgee would be
acting, and in such event the Liens and security interests created by this
Agreement would remain in full force and effect with respect to such superior
obligations. It is agreed and acknowledged that the Required Secured Creditors
shall have no obligation to, and shall incur no liability to any Person in
refusing to consent to the Pledgee acting as contemplated by this Section 24.

         25.      SEVERABILITY. If any Section of this Agreement or any part 
thereof shall for any reason be held or adjudged to be invalid, illegal or
unenforceable by any court of competent jurisdiction, such Section or part
thereof so adjudicated invalid, illegal or unenforceable shall be deemed
separate, distinct and independent, and the remainder of this Agreement shall
remain in full force and effect and shall not be affected by such holding or
adjudication.

         26.      FCC COMPLIANCE. Notwithstanding anything contained herein 
which may be construed to the contrary, no action shall be taken by the Pledgee
which may require the consent or approval of the Federal Communications
Commission (the "FCC") unless and until all requirements of the Communications
Act of 1934, as amended (the "COMMUNICATIONS ACT"), requiring the consent or
approval of such action by the FCC have been satisfied. The Pledgor covenants
that, upon the request of the Pledgee, the Pledgor shall cause to be filed such
applications and such other actions as may be requested by the Pledgee to obtain
the consent or approval of the FCC to any action contemplated by this Agreement
and to give effect to the security interest of the Pledgee



                                       16

<PAGE>   17



hereunder, including, without limitation, the execution of an application for
the consent of the FCC to an assignment or transfer involving a change in
ownership or control pursuant to the provisions of the Communications Act. The
Pledgor hereby irrevocably appoints the Pledgee its true and lawful
attorney-in-fact, from time to time after the occurrence and during the
continuance of an Event of Default, in its name and stead, to execute and file
all necessary applications with the FCC. The power of attorney granted hereby is
coupled with an interest and shall be irrevocable.

                 [remainder of page is intentionally left blank]




                                       17

<PAGE>   18



         IN WITNESS WHEREOF, the Pledgor and the Pledgee have caused this
Agreement to be executed by their duly elected officers duly authorized as of
the date first above written.

                                   CAPSTAR BROADCASTING CORPORATION,
                                   as Pledgor


                                   By:
                                      ------------------------------------------
                                   Name:  
                                        ----------------------------------------
                                   Title:
                                         ---------------------------------------


                                   CHANCELLOR MEDIA CORPORATION OF
                                   LOS ANGELES, as Collateral Agent, as Pledgee

                                   By:
                                      ------------------------------------------
                                   Name:  
                                        ----------------------------------------
                                   Title:
                                         ---------------------------------------

                                       18

<PAGE>   19



                                     ANNEX A

<TABLE>
<CAPTION>



No. of Shares           Type             Certificate No.          % of Outstanding Common Stock
-------------           ----             ---------------          -----------------------------
<S>                  <C>                 <C>                      <C>
150,396,341             Class A                16                         53.783631412%
                      Common
127,656,892             Class A                17                         45.651717915%
                      Common
1,578,947               Class A                18                         00.564651393%
                      Common
</TABLE>




                                    Annex A-1

<PAGE>   20



                                     ANNEX B

                                       TO

                            CAPSTAR PLEDGE AGREEMENT


         1.       APPOINTMENT. The Secured Creditors (all capitalized terms used
herein and not otherwise defined shall have the respective meanings provided in
the Pledge Agreement to which this Annex B is attached (the "PLEDGE
AGREEMENT")), by their acceptance of the benefits of the Pledge Agreement,
hereby irrevocably designate Chancellor Media Corporation of Los Angeles as
Pledgee to act as specified herein and in the Pledge Agreement. Each Secured
Creditor hereby irrevocably authorizes, and each holder of any promissory note
which is secured pursuant to the Pledge Agreement (each a "NOTE" and
collectively the "NOTES") by the acceptance of such Note shall be deemed
irrevocably to authorize, the Pledgee to take such action on its behalf under
the provisions of the Pledge Agreement and any other instruments and agreements
referred to herein or therein and to exercise such powers and to perform such
duties hereunder and thereunder as are specifically delegated to or required of
the Pledgee by the terms hereof and thereof and such other powers as are
reasonably incidental thereto. The Pledgee may perform any of its duties
hereunder by or through its agents or employees.

         2.       NATURE OF DUTIES. The Pledgee shall have no duties or
responsibilities except those expressly set forth in the Pledge Agreement.
Neither the Pledgee nor any of its officers, directors, employees, consultants
or agents shall be liable for any action taken or omitted by it as such under
the Pledge Agreement or hereunder or in connection herewith or therewith, unless
caused by its or their gross negligence or willful misconduct. The duties of the
Pledgee shall be mechanical and administrative in nature; the Pledgee shall not
have by reason of the Pledge Agreement or any other Financing Document a
fiduciary relationship in respect of any Secured Creditor; and nothing in the
Pledge Agreement, express or implied, is intended to or shall be so construed as
to impose upon the Pledgee any obligations in respect of the Pledge Agreement
except as expressly set forth herein.

         3.       LACK OF RELIANCE ON THE PLEDGEE. Independently and without 
reliance upon the Pledgee, each Secured Creditor, to the extent it deems
appropriate, has made and shall continue to make (a) its own independent
investigation of the financial condition and affairs of the Pledgor and its
subsidiaries in connection with the making and the continuance of the
Obligations and the taking or not taking of any action in connection therewith,
and (b) its own appraisal of the creditworthiness of the Pledgor and its
subsidiaries, and the Pledgee shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Secured Creditor with any
credit or other information with respect thereto, whether coming into its
possession before the extension of obligations or the purchase of any Notes, or
at any time or times thereafter. The Pledgee shall not be responsible to any
Secured Creditor for any recitals, statements, information, representations or
warranties herein or in any document, certificate or other writing delivered in
connection herewith or for the execution, effectiveness, genuineness, validity,
enforceability, perfection, collectability, priority or sufficiency of the
Pledge Agreement or the financial condition of the Pledgor or any Subsidiary of
the Pledgor or be required to make any inquiry concerning either the performance
or



                                    Annex B-1

<PAGE>   21



observance of any of the terms, provisions or conditions of the Pledge
Agreement, or the financial condition of the Pledgor or any Subsidiary of the
Pledgor, or the existence or possible existence of any Event of Default.

         4.       CERTAIN RIGHTS OF THE PLEDGEE. No Secured Creditor shall have 
the right to cause the Pledgee to take any action with respect to the
Collateral, with only the Required Secured Creditors (as hereinafter defined)
having the right to direct the Pledgee to take any such action. If the Pledgee
shall request instructions from the Required Secured Creditors with respect to
any act or action (including failure to act) in connection with the Pledge
Agreement, the Pledgee shall be entitled to refrain from such act or taking such
action unless and until it shall have received instructions from the Required
Secured Creditors, and to the extent requested, appropriate indemnification in
respect of actions to be taken; and the Pledgee shall not incur liability to any
Person by reason of so refraining. Without limiting the foregoing, no Secured
Creditor shall have any right of action whatsoever against the Pledgee as a
result of the Pledgee acting or refraining from acting hereunder in accordance
with the instructions of the Required Secured Creditor. As used herein, the term
"REQUIRED SECURED CREDITORS" shall mean (a) prior to the Senior Lien Termination
Date, the Senior Creditor, and (b) thereafter, the Required Banks.

         5.       RELIANCE. The Pledgee shall be entitled to rely, and shall be 
fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or facsimile message, cablegram,
radiogram, order or other document or telephone message signed, sent or made by
the proper Person, and, with respect to all legal matters pertaining to the
Pledge Agreement and its duties thereunder, upon advice of counsel selected by
it.

         6.       INDEMNIFICATION.

                  (a) To the extent the Pledgee is not reimbursed and
indemnified by the Pledgor and/or its subsidiaries, the Subordinated Creditors
will reimburse and indemnify the Pledgee, in proportion to their respective
principal amounts or accredited value, as the case may be, of obligations, for
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against the
Pledgee in performing its duties hereunder or under the Pledge Agreement, or in
any way relating to or arising out of the Pledge Agreement except for those
resulting solely from the Pledgee's own gross negligence or willful misconduct.

                  (b) Notwithstanding the foregoing, the obligations of the
Subordinated Creditors with respect to the indemnities referred to above shall
be without recourse to such Subordinated Creditors, with all liabilities for
such indemnity obligations to be satisfied from the proceeds of the foreclosure
on, the other disposition of, or any other realization upon the Collateral.

         7.       HOLDERS. The Pledgee may deem and treat the payee of any Note 
as the owner thereof for all purposes hereof unless and until a written notice
of the assignment, transfer or endorsement thereof, as the case may be, shall
have been filed with the Pledgee. Any request, authority or consent of any
Person who, at the time of making such request or giving such authority or
consent, is the



                                    Annex B-2

<PAGE>   22


holder of any Note shall be conclusive and binding on any subsequent holder,
transferee, assignee or endorsee, as the case may be, of such Note or any
Note(s) issued in exchange therefor.

         8.       RESIGNATION BY THE PLEDGEE.

                  (a) The Pledgee may resign from the performance of all its
functions and duties under the Pledge Agreement at any time by giving 20
Business Days prior written notice (as provided in the Pledge Agreement) to the
Pledgor and the Secured Creditors. Such resignation shall take effect upon the
appointment of a successor Pledgee pursuant to clauses (b), (c) and (d) below.

                  (b) Upon any such notice of resignation, the Required Secured
Creditors shall appoint a successor Pledgee hereunder who shall be a commercial
bank organized under the laws of the United States of America or any State
thereof and having combined capital and surplus of at least $500,000,000.

                  (c) If a successor Pledgee shall not have been so appointed
within said 20 Business Day period, the Pledgor shall then appoint a successor
Pledgee who shall serve as Pledgee hereunder or thereunder until such time, if
any, as the Required Secured Creditors appoint a successor Pledgee as provided
above.

                  (d) If no successor Pledgee is appointed pursuant to clauses
(b)and (c) above within said 20 business Day period the resignation of the
Pledgee shall become effective and the duties of the Pledgee shall be performed
by the Required Secured Creditors.





                                    Annex B-3