S-4

As filed with the Securities and Exchange Commission on October 4, 2002

Registration Number 333-            

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM S-4

REGISTRATION STATEMENT

Under

THE SECURITIES ACT OF 1933

LBI MEDIA, INC.

AND THE GUARANTORS LISTED ON THE NEXT PAGE*

(Exact name of registrant as specified in its charter)

California	4832	95-4668901
(State or Other Jurisdiction of Incorporation or Organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

1845 West Empire Avenue

Burbank, California 91504

(818) 563-5722

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

Lenard D. Liberman

Executive Vice President

LBI Media, Inc.

1845 West Empire Avenue

Burbank, California 91504

(818) 563-5722

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Joseph Kim, Esq.

O’Melveny & Myers LLP

400 South Hope Street

Los Angeles, California 90071-2899

Telephone: (213) 430-6000

Fax: (213) 430-6407

* The companies listed on the next page are also included in this Registration Statement on Form S-4 as co-registrants.

Approximate Date of Commencement of Proposed Sale to the Public:    As soon as practicable after the effective date of this Registration Statement.

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 pursuant to Rule 462(b) under the Securities Act, 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 pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

CALCULATION OF REGISTRATION FEE

Title of each Class of Securities to be Registered	Amount to be Registered	Proposed Maximum Offering Price Per Unit/Share (1)	Proposed Maximum Aggregate Offering Price (1)	Amount of Registration Fee (1)
10 1/8 % Senior Subordinated Notes due 2012	$150,000,000	100.0%	$150,000,000	$13,800
Guarantees of the 10 1/8% Senior Subordinated Notes due 2012 (2)	—	—	—	—

(1) The registration fee has been calculated pursuant to Rule 457(a), Rule 457(f)(2) and Rule 457(n) under the Securities Act of 1933, as amended. The Proposed Maximum Aggregate Offering Price is estimated solely for purpose of calculating the registration fee.

(2) The notes are guaranteed by the guarantors listed on the table of additional registrants. All guarantors are wholly owned subsidiaries of LBI Media, Inc. Pursuant to Rule 457(n) under the Securities Act, no separate fee is payable with respect to the guarantees being registered hereunder. The guarantees are not traded separately.

The co-registrants hereby amend this registration statement on such date or dates as may be necessary to delay its effective date until the co-registrants 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, as amended (the “Securities Act”), or until the registration statement shall become effective on such date as the Securities and Exchange Commission (the “Commission”), acting pursuant to said Section 8(a), may determine.

TABLE OF ADDITIONAL REGISTRANTS*

The following subsidiaries of LBI Media, Inc. have fully and unconditionally guaranteed the 10 ¹/8% Senior Subordinated Notes due 2012 and are additional registrants under this Registration Statement:

Exact Name of Additional Registrants*	Jurisdiction of Incorporation	Primary Standard Industrial Classification No.	I.R.S. Employer Identification No.
Liberman Television, Inc.	California	4833	95-4668919
Liberman Broadcasting, Inc.	California	4832	95-4131156
LBI Radio License Corp.	California	4832	95-4668905
KRCA License Corp.	California	4833	95-4668917
KRCA Television, Inc.	California	4833	95-1457322
Empire Burbank Studios, Inc.	California	3663	33-0834443
KZJL License Corp.	California	4833	95-4827111
Liberman Television of Houston, Inc.	California	4833	95-4827112
Liberman Broadcasting of Houston, Inc.	California	4832	95-4834648
Liberman Broadcasting of Houston License Corp.	California	4832	95-4834646

* The address for each of the additional registrants is 1845 West Empire Avenue, Burbank, California 91504, telephone number (818) 563-5722.

The information in this prospectus is not complete and may be changed. We may not complete the exchange offer and issue these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell securities and it is not soliciting an offer to buy these securities in any state where the offer is not permitted.

Subject to completion, dated             , 2002

PROSPECTUS

LBI Media, Inc.

Offer to Exchange

$150,000,000 Aggregate Principal Amount of 10 ¹/8% Senior Subordinated Notes due 2012

that have been registered under the Securities Act of 1933,

for any and all outstanding

$150,000,000 Aggregate Principal Amount of 10 ¹/8% Senior Subordinated Notes due 2012

We hereby offer, upon the terms and subject to the conditions set forth in this prospectus and the accompanying letter of transmittal (which together constitute the “exchange offer”), to exchange up to $150,000,000 aggregate principal amount of our registered 10 ¹/8% Senior Subordinated Notes, due 2012, which we refer to as the exchange notes, for a like principal amount of our outstanding 10 ¹/8% Senior Subordinated Notes due 2012, which we refer to as the old notes. We refer to the old notes and the exchange notes collectively as the notes. We issued the old notes on July 9, 2002. The terms of the exchange notes are substantially identical to the terms of the old notes in all material respects, except for the elimination of some transfer restrictions, registration rights and liquidated damages provisions relating to the old notes.

We will accept for exchange any and all old notes validly tendered and not withdrawn prior to 5:00 pm., New York City time, on              unless extended. The exchange offer is not conditioned upon any principal amount of the old notes being tendered for exchange pursuant to the exchange offer. The exchange offer is subject to certain other customary conditions. See “The Exchange Offer; Registration Rights—Conditions of the Exchange Offer.” We will not receive any proceeds from the exchange offer.

You should carefully review the Risk Factors beginning on page 13 of this Prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.

The date of this prospectus is     , 2002.

TABLE OF CONTENTS

	Page
FORWARD-LOOKING STATEMENTS	ii
WHERE YOU CAN FIND MORE INFORMATION	ii
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE	iii
MARKET SHARE AND INDUSTRY DATA	iii
PROSPECTUS SUMMARY	1
SUMMARY CONSOLIDATED FINANCIAL AND OTHER DATA	11
RISK FACTORS	13
USE OF PROCEEDS	24
THE EXCHANGE OFFER; REGISTRATION RIGHTS	25
CAPITALIZATION	32
SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OTHER DATA	33
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	35
BUSINESS	45
REGULATION OF TELEVISION AND RADIO BROADCASTING	53
MANAGEMENT	60
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS	62
DESCRIPTION OF OTHER INDEBTEDNESS	63
DESCRIPTION OF THE EXCHANGE NOTES	68
BOOK-ENTRY, DELIVERY AND FORM	110
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS	116
PLAN OF DISTRIBUTION	121
LEGAL MATTERS	123
EXPERTS	123
INDEX TO FINANCIAL STATEMENTS	F-1

Each broker-dealer that receives the exchange notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. The letter of transmittal delivered with this prospectus 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 exchange notes received in exchange for old notes where such old notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. We have agreed that, for a period of 180 days after the Expiration Date (as defined herein), we will make this prospectus available to any broker-dealer for use in connection with any such resale. See “Plan of Distribution.”

We have not authorized any dealer, salesman or other person to give any information or to make any representation other than those contained or incorporated by reference in this prospectus. You must not rely upon any information or representation not contained or incorporated by reference in this prospectus as if we had authorized it. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities other than the exchange securities to which it relates, nor does this prospectus constitute an offer to sell or a solicitation of an offer to buy securities in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction.

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FORWARD-LOOKING STATEMENTS

This prospectus includes both historical and “forward-looking statements” as that term is defined by the federal securities laws. We have based these forward-looking statements on our current expectations and projections about future results. When we use words in this document such as “anticipates,” “intends,” “plans,” “believes,” “estimates,” “expects,” “may,” “will” and similar expressions, we do so to identify forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements. These forward-looking statements are affected by risks, uncertainties and assumptions that we make, including, among other things, the factors that are described in “Risk Factors” and:

• our operations and prospects;

• future cash flows;

• the acquisition and integration of new radio and television stations;

• our funding needs and financing sources;

• general economic conditions;

• our achievement of management’s business plans;

• actions of third parties such as government regulatory agencies, including the Federal Communications Commission, or FCC; and

• various other factors beyond our control.

You should be aware that any forward-looking statement made by us in this prospectus, or elsewhere, speaks only as of the date on which we make it. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. We have no duty to, and do not intend to, update or revise the forward-looking statements in this prospectus after the date of this prospectus. In light of these risks and uncertainties, you should keep in mind that any forward-looking statement made in this prospectus or elsewhere might not occur.

WHERE YOU CAN FIND MORE INFORMATION

This prospectus is part of a registration statement on Form S-4 that we have filed with the Securities and Exchange Commission, or the SEC, under the Securities Act of 1933, or the Securities Act. This prospectus does not contain all of the information set forth in the registration statement. For further information about us and the notes, you should refer to the registration statement. This prospectus summarizes material provisions of contracts and other documents to which we refer you. Since this prospectus may not contain all of the information that you find important, you should review the full text of these documents. We have filed these documents as exhibits to our registration statement.

Upon the effectiveness of the registration statement, we will be subject to the informational reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act. We have agreed that, whether or not required to do so by the rules and regulations of the SEC (and within the time periods that are or would be prescribed thereby), for so long as any of the notes remain outstanding, we will furnish to the holders of the notes and, following the consummation of the exchange offer, file with the SEC (unless the SEC will not accept such a filing) (i) all quarterly and annual financial information that would be required to be contained in a filing with the SEC on Forms 10-Q and 10-K if we were required to file such forms, including a Management’s Discussion and Analysis of Financial Condition and Results of Operations and, with respect to the annual information only, a report thereon by our independent certified public accountants and (ii) all information that would be required to be contained in a filing with the SEC on Form 8-K if we were required to file such reports. In addition, for so long as any of the old notes remain outstanding, we have agreed to make available, upon request, to any prospective purchaser or beneficial owner of the old notes in connection with any sale thereof the information required by Rule 144A(d)(4) under the Securities Act. Information may also be obtained from us at LBI Media, Inc., 1845 West Empire Avenue, Burbank, California 91504, Attention: Lenard Liberman.

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The registration statement (including the exhibits and schedules thereto) and the periodic reports and other information that we file with the SEC may be inspected and copied at the public reference facilities of the SEC, Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain copies of such material from the SEC by mail at prescribed rates. You should direct requests to the SEC’s Public Reference Section, Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. In addition, the SEC maintains a website (http://www.sec.gov) that contains such reports and other information filed by us.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

All documents and reports filed by LBI Media, Inc. pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this prospectus and prior to the termination of the exchange offer to which this prospectus relates shall be deemed to be incorporated by reference herein and to be part hereof from the date of the filing of such documents and reports.

All information contained in a document or report incorporated or deemed to be incorporated by reference is part of this prospectus, unless and until that information is updated and superseded by the information contained in this prospectus or any information filed with the SEC and incorporated later. Any information that we subsequently file with the SEC that is incorporated by reference will automatically update and supersede any previous information that is part of this prospectus.

LBI Media, Inc. will provide a copy of any and all such documents (exclusive of exhibits unless such exhibits are specifically incorporated by reference therein) without charge to each person to whom a copy of this prospectus is delivered, upon written or oral request to us at LBI Media, Inc., 1845 West Empire Avenue, Burbank, California 91504, Attention: Lenard Liberman, telephone (818) 563-5722. To obtain timely delivery of information, we must receive your request no later than five business days before the expiration date of the exchange offer.

MARKET SHARE AND INDUSTRY DATA

Market data and other statistical information used throughout this prospectus are based on independent industry publications, government publications and reports by market research firms or other published independent sources, including the 2000 U.S. Census, Arbitron and Nielsen surveys, Hispanic Business, Inc. and Television Bureau of Advertising (TVB). Some data are also based on our good faith estimates, which are derived from our review of internal surveys, as well as independent sources. Although we believe that these sources are reliable, we have not independently verified the information and cannot guarantee its accuracy and/or completeness.

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PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus and does not contain all of the information that may be important to you. You should read the entire prospectus, including “Risk Factors” and our financial statements and related notes, before making an investment decision. On July 9, 2002, LBI Intermediate Holdings, a wholly-owned subsidiary of LBI Holdings I, Inc., merged with and into LBI Media, Inc., the issuer of the notes. As a result of the merger, LBI Media, Inc. became a direct, wholly-owned subsidiary of LBI Holdings I, Inc. In this prospectus, unless the context indicates otherwise, all references to “our parent” or “LBI Holdings I” refer to LBI Holdings I, Inc., excluding its subsidiaries, all references to “LBI Intermediate” refer to LBI Intermediate Holdings, Inc., excluding its subsidiaries, before the intercompany merger, and all references to “LBI Media,” “we,” “our” and “us” refer to LBI Media, Inc. and its subsidiaries. LBI Media, formerly known as LBI Holdings II, Inc., is incorporated in California.

Our Company

We are the largest privately-held, Spanish-language broadcaster in the United States based on revenues. Our strategy is to own and operate radio and television stations in the nation’s largest and most densely populated Hispanic markets. To this end, we have created radio and television clusters in Los Angeles and Houston, the #1 and #4 Hispanic markets in the United States, respectively, based on television households. We are the only Spanish-language broadcaster currently operating both radio and television assets in these markets. Our Los Angeles cluster consists of four Spanish-language radio stations (three FM and one AM), one time-brokered AM station and a full-power television station. Our Houston cluster, after giving effect to our pending acquisitions, consists of seven Spanish-language radio stations (five FM and two AM), two time-brokered AM stations and a full-power television station. We also own a low-power television station serving San Diego, the fourteenth largest Hispanic market in the United States and an important market along the U.S. and Mexican border. In addition, we operate a television production facility, Empire Burbank Studios, in Burbank, California which we primarily utilize to produce cost-effective programming for our television stations.

We were founded in 1987 by Jose and Lenard Liberman, father and son, who together have over 50 years of operating experience in the broadcasting industry. Jose Liberman is considered an industry pioneer having owned and operated the first Spanish-language FM station in the Los Angeles market in the mid-1970s. Lenard Liberman manages our day-to-day operations and, together with his father, has primary responsibility for our strategic direction. In addition, we have assembled a management team of well-respected industry veterans to direct our sales and programming efforts. Since our founding, we have successfully developed nine Spanish-language, start-up radio and television stations through a combination of reformatting existing stations and implementing strict cost controls and effective sales and marketing initiatives. Generally, our Spanish-language start-up stations have generated positive cash flow within six months of our management team assuming control of the station’s operations.

Our primary focus has been to acquire and develop radio and television properties in U.S. markets with a high concentration of Hispanics. We seek to increase our revenue and cash flow in those markets through focused programming, creative promotion and targeted marketing tailored to the local advertising community. As a result of the successful execution of this strategy, from 1997 through 2001 our net revenues grew from $18.5 million to $59.7 million, a compound annual growth rate, or CAGR, of 34.0%, and our EBITDA grew from $7.3 million to $32.9 million, a CAGR of 45.7%. Additionally, we have been able to sustain industry-leading EBITDA margins in excess of 50% for each of the last four fiscal years through our disciplined operating strategy and use of cost-effective programming.

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Business Strategy

We seek to expand within the growing U.S. Hispanic market by pursuing the following strategy:

Capitalize on our complementary radio and television stations.    By owning both Spanish-language radio and television stations in the markets we serve, we have been able to create substantial cross-selling and cross-promotion opportunities. This allows us to effectively compete for a significant portion of an advertiser’s Hispanic budget since advertisers have historically spent over 80% of their Hispanic budget on radio and television.

• Offer radio and television packages to advertisers.    We are the only Spanish-language broadcaster in the Los Angeles and Houston markets currently offering both radio and television advertising packages. Our strategy is to offer the benefits of one medium to complement the sale of the other. Specifically, we offer our advertisers the opportunity to cross-advertise on radio and television, as well as to cross-merchandise through product integration.

• Cross-promote our radio and television stations.    We utilize a portion of our spot inventory time at both our radio and television stations to run advertisements promoting our other stations and programs. This cross-promotion helps us capitalize on the strong ratings and targeted audience of our stations with no incremental cash outlay. In addition, we utilize our radio and television stations to create complementary programs that attract our radio listeners to our television programs and our television viewers to our radio stations. For example, in Los Angeles and Houston, we produce music variety television shows hosted by our radio station disc jockeys that feature music industry news, interviews and videos of songs played on our popular Que Buena and La Raza radio stations.

Target the local community.    Not all Spanish-speaking people have the same, or even similar, cultural and ethnic backgrounds. As a result, we create radio and television programming specifically tailored to the preferences of the Hispanic population in each of our coverage areas. We believe we are particularly skilled at programming to the tastes and preferences of Hispanics of Mexican heritage that comprise 75% and 73% of the Hispanic populations in Los Angeles and Houston, respectively. We believe our ability to produce locally-targeted programming gives us a distinct advantage over most other Spanish-language broadcasters that develop and distribute their programming on a national or regional basis. As a result, we have generally been able to achieve and maintain strong station ratings in our markets. We are the #2-ranked Spanish-language radio group in both Los Angeles and Houston according to the Arbitron 2002 winter survey.

Develop a diverse local advertiser base.    Consistent with our locally-targeted programming strategy, we have focused our sales strategy around the local advertising community. As a result, local advertising accounted for approximately 88% of our gross revenues in 2001. The advantages of our locally-focused sales strategy include:

• Our cash flows have been relatively more recession resistant because local advertising has historically been less cyclical than national advertising;

• Our cash flows have been generally less vulnerable to ratings fluctuations as a result of our strong relationships with our advertisers; and

• Our large and diverse client base results in no single advertiser accounting for more than 5% of our net revenues.

Offer cost-effective advertising and value-added services to our advertisers.    We believe that we differentiate ourselves from other Spanish-language broadcasters by offering advertisers the greatest value for their advertising dollar. We support advertisers’ media campaigns with creative promotions utilizing our radio

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and television clusters and offer our studio facilities to provide value-added services such as free commercial production. As a result, we have been able to significantly increase our advertiser base.

Utilize cost-effective television programming.    Our television programming consists of internally produced and purchased programming, which, when combined with our brokered airtime, creates an efficient programming line-up for our television stations. Because we own and operate in-house television production facilities, we are able to create programming, such as our popular talk shows Jose Luis Sin Censura and El Show de Maria Laria, at a very low cost. In addition, we realize programming synergies between our radio and television assets by sharing content between the two mediums to create programs that utilize our radio formats and on-air radio personalities. Furthermore, we supplement our internally produced programming with purchased programs, primarily Spanish-language movies, which we obtain from numerous producers in Latin America.

Acquire and develop start-up Spanish-language stations.    We have a proven track record of acquiring and developing radio and television assets and then implementing changes and procedures that have resulted in substantial ratings and net revenues. For example, we acquired our Los Angeles television station KRCA-TV in 1998 and Empire Burbank Studios in 1999 and we grew net revenues at these facilities at a CAGR of 35% from 1998 through 2001. Similarly, we grew net revenues at our radio station, KBUE-FM/KBUA-FM, at a CAGR of 24% from 1997 (the year we first began simulcasting the station) through 2001. This station is now among the top three rated Spanish-language radio stations in Los Angeles according to the Arbitron 2002 winter survey.

Hispanic Market Opportunity

We believe that the Hispanic community represents an attractive market for future growth. As a result, we seek to own media assets in the most densely populated and fastest growing Hispanic markets in the United States. The U.S. Hispanic population is growing at approximately six times the rate of the non-Hispanic U.S. population and, as such, is the fastest growing segment of the U.S. population. According to the U.S. Census Bureau, the Hispanic sector, which is currently 13% of the total U.S. population, will be the largest minority group by the end of 2002 and is projected to reach 43.7 million (or 15% of the total U.S. population) by 2010. People of Mexican origin currently represent 59% of the U.S. Hispanic population, and 75% and 73% of the Hispanic populations in Los Angeles and Houston, respectively. Moreover, 30% of all Spanish-language radio and television advertising is spent in Los Angeles and Houston, which together represent 23% of the total U.S. Hispanic population.

Advertisers have recently begun to direct more advertising dollars towards U.S. Hispanics and, consequently, Spanish-language radio and television advertising has grown at more than twice the rate of total radio and television advertising from 1997 to 2001. Spanish-language advertising rates have been rising faster in recent years when compared to the general media, yet Spanish-language rates are still lower than those for English-language media. As advertisers continue to recognize the buying power of the U.S. Hispanic population, especially in areas where the concentration of Hispanics is very high and where a significant percentage of the retail purchases are made by Hispanic customers, the gap in advertising rates between Spanish-language and English-language media is expected to narrow. As U.S. Hispanic consumer spending continues to grow relative to overall consumer spending, industry analysts expect that advertising expenditures targeted to Hispanics will increase significantly, eventually closing the gap between the current level of advertising targeted at Hispanics and the buying power that the Hispanic population in the U.S. represents. We believe we are well positioned to capitalize on these attractive fundamentals given the concentration of the Hispanic population in certain markets, our position in the Los Angeles and Houston markets and our proven ability to execute our acquisition strategy in new markets.

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Recent Developments

Pending Acquisition of KQQK-FM and KEYH-AM, Houston, Texas.    Pursuant to two asset purchase agreements dated as of April 5, 2002 with El Dorado Communications, Inc. and certain of its affiliates  (“El Dorado”), we have agreed to acquire selected assets of radio stations KQQK-FM and KEYH-AM in the Houston, Texas market for an aggregate purchase price of approximately $30.0 million in cash. We believe that these two stations will strengthen our Houston cluster by offering additional Spanish-language formats in the market at very little incremental operating cost. On May 20, 2002, we began to operate KQQK-FM and KEYH-AM under two time brokerage agreements. Since that date, we have significantly changed the format, revenue stream, customer base and employee base of these stations. Subject to customary closing conditions, we expect to complete these acquisitions during the fourth quarter of 2002.

Pending Acquisition of KIOX-FM and KXGJ-FM, El Campo and Bay City, Texas.    On June 21, 2002, we entered into an agreement to acquire selected assets of KIOX-FM and KXGJ-FM licensed to El Campo and Bay City, Texas, respectively, for an aggregate purchase price of $3.2 million. Subject to customary closing conditions, including receipt of final regulatory approval, we expect to complete the acquisition during the fourth quarter of 2002.

Non-binding Letter of Intent.    We are currently engaged in negotiations to acquire the broadcast assets of three radio stations for a total consideration in excess of $40.0 million. We have entered into a non-binding letter of intent with respect to this acquisition, but do not yet have a definitive agreement signed.

From time to time, we engage in discussions with third parties concerning our possible acquisition of additional radio or television stations or related assets. Any such discussions may or may not lead to our acquisition of additional broadcasting assets.

Recent Results of Our 2001 Houston Acquisitions.    In March 2001, we purchased selected assets of our radio stations KTJM-FM, KJOJ-FM, KQUE-AM, KJOJ-AM and KSEV-AM and our television station KZJL-TV in the Houston, Texas market. In July 2001, we began airing Spanish-language programming on our radio stations KTJM-FM, KJOJ-FM and KQUE-AM and on our television station KZJL-TV. Since that time, these stations have experienced significant growth in ratings and net revenues. In the Arbitron 2002 winter survey, our Houston Spanish-language radio stations captured a combined 4.1 rating, a 78% increase over their combined 2.3 rating in the Arbitron 2001 summer survey. For the six months ended June 30, 2002, our Houston radio and television stations, including our time brokered stations, generated a combined $7.5 million in net revenues.

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The Exchange Offer

Background of the Old Notes	On July 9, 2002, we issued $150,000,000 aggregate principal amount of our 10 1/8% Senior Subordinated Notes due 2012, or the old notes, to Credit Suisse First Boston Corporation, UBS Warburg LLC, Banc of America Securities LLC, CIBC World Markets Corp. and Fleet Securities, Inc., as the initial purchasers, in a transaction exempt from the registration requirements of the Securities Act. The initial purchasers then sold the old notes to qualified institutional buyers in reliance on Rule 144A under the Securities Act and outside the U.S. to persons in reliance on Regulation S under the Securities Act. Because the old notes have been sold in reliance on exemptions from registration, the old notes are subject to transfer restrictions. In connection with the issuance of the old notes, we entered into a registration rights agreement with the initial purchasers in which we agreed to deliver to you this prospectus and to use our best efforts to complete the exchange offer or to file and cause to become effective a registration statement covering the resale of the old notes.
The Exchange Offer	We are offering to issue up to $150,000,000 aggregate principal amount of 10 1/8% Senior Subordinated Notes due 2012, or the exchange notes, in exchange for an identical aggregate principal amount of old notes. Old notes may be exchanged only in $1,000 increments. The terms of the exchange notes are identical in all material respects to the terms of the old notes, except that the exchange notes have been registered under the Securities Act. Because we have registered the exchange notes, the exchange notes will not be subject to transfer restrictions.
Resale of Exchange Notes	We will issue the exchange notes promptly after the expiration of the exchange offer. Based upon interpretations by the staff of the SEC set forth in no-action letters issued to unrelated third parties, we believe that you may offer, sell or otherwise transfer the exchange notes you receive in the exchange offer without compliance with the registration and prospectus delivery provisions of the Securities Act provided that: •      you acquire the exchange notes you receive in the exchange offer in the ordinary course of your business; •      you are not engaging in and do not intend to engage in a distribution of the exchange notes; •      you have no arrangement or understanding with any person to participate in the distribution of the exchange notes issued to you in the exchange offer; and •      you are not an “affiliate” of ours, as that term is defined in Rule 405 under the Securities Act.

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	However, we have not submitted a no-action letter, and there can be no assurance that the SEC would make a similar determination with respect to this exchange offer. If you do not meet the conditions described above, you may incur liability under the Securities Act if you transfer any exchange note without delivering a prospectus meeting the requirements of the Securities Act. We do not assume or indemnify you against that liability.
	Each broker-dealer that is issued exchange notes in the exchange offer for its own account in exchange for old notes acquired by the broker-dealer as a result of market-making or other trading activities must acknowledge that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of the exchange notes issued in the exchange offer. A broker-dealer may use this prospectus for an offer to resell, a resale or other retransfer of the exchange notes issued to it in the exchange offer. See “Plan of Distribution.”
Expiration Date	5:00 p.m., New York City time, on             , 200     (the “Expiration Date”), unless, in our sole discretion, we extend the exchange offer.
Withdrawal Rights	You may withdraw old notes at any time before 5:00 p.m., New York City time, on the Expiration Date. See “The Exchange Offer; Registration Rights—Withdrawal Rights.”
Accrued Interest on the Exchange Notes and the Old Notes	The exchange notes will bear interest from the most recent date to which interest has been paid on the old notes or, if no interest has been paid on the old notes, from July 9, 2002.
Conditions to the Exchange Offer	The exchange offer is subject to certain customary conditions, some of which may be waived by us. See “The Exchange Offer; Registration Rights—Conditions to the Exchange Offer.”
Procedures for Tendering Old Notes	If you wish to accept the exchange offer, you must complete, sign and date the letter of transmittal, or a copy of the letter of transmittal, in accordance with the instructions contained in this prospectus and in the letter of transmittal, and mail or otherwise deliver the letter of transmittal, or the copy, together with the old notes and any other required documentation, to the exchange agent at the address set forth in this prospectus. If you are a person holding the old notes through the Depository Trust Company and wish to accept the exchange offer, you must do so through the Depository Trust Company’s Automated Tender Offer Program, by which you will agree to be bound by the letter of transmittal. By executing or agreeing to be bound by the letter of transmittal, you will be making a number of important representations to us as described under “The Exchange Offer; Registration Rights—Purpose and Effect.”

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	We will accept for exchange any and all old notes that are properly tendered in the exchange offer prior to the Expiration Date. The exchange notes issued in the exchange offer will be delivered promptly following the Expiration Date. See “The Exchange Offer; Registration Rights—Terms of the Exchange Offer.”
SpecialProcedures for Beneficial Owners	If you are the beneficial owner of old notes registered in the name of a broker, dealer, commercial bank, trust company or other nominee and wish to tender in the exchange offer, you should contact the person in whose name your notes are registered and promptly instruct the person to tender on your behalf.
Guaranteed Delivery Procedures	If you wish to tender your old notes and time will not permit your required documents to reach the exchange agent by the Expiration Date, or the procedure for book-entry transfer cannot be completed on time, you may tender your notes according to the guaranteed delivery procedures. For additional information, you should read the discussion under “The Exchange Offer; Registration Rights—Guaranteed Delivery Procedures.”
Acceptance of Old Notes and Delivery of Exchange Notes	Subject to customary conditions, we will accept old notes which are properly tendered in the exchange offer and not withdrawn prior to the Expiration Date. The exchange notes will be delivered as promptly as practicable following the Expiration Date.
Consequences of Failure to Exchange	Old notes that are not tendered, or that are tendered but not accepted, will be subject to their existing transfer restrictions. We will have no further obligation to provide for registration under the Securities Act of such old notes.
Registration Rights Agreement; Effect on Holders	We sold the old notes in a private placement in reliance on Section 4(2) of the Securities Act. The old notes were immediately resold by the initial purchasers in reliance on Rule 144A and Regulation S under the Securities Act. On July 9, 2002, we entered into a registration rights agreement with the initial purchasers of the old notes requiring us to make this exchange offer. The registration rights agreement also requires us to: •      use our best efforts to have the registration statement filed with respect to the exchange offer declared effective by the SEC by July 4, 2003; and •      use our best efforts to consummate the exchange offer on or prior to 30 business days after the date on which the registration statement was declared effective by the SEC.

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	See “The Exchange Offer; Registration Rights—Purpose and Effect.” If we do not do so, liquidated damages will be payable on the old notes.
Certain U.S. Federal Income Tax Consequences	The exchange of old notes for exchange notes by tendering holders will not be a taxable exchange for federal income tax purposes, and such holders will not recognize any taxable gain or loss or any interest income for federal income tax purposes as a result of such exchange. See “Certain United States Federal Income Tax Consequences.”
Exchange Agent	U.S. Bank, N.A. is serving as exchange agent in connection with the exchange offer.
Use of Proceeds	We will not receive any proceeds from the exchange offer.

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The Exchange Notes

Issuer LBI Media, Inc.

Securities Offered $150,000,000 aggregate principal amount of 10 ¹/8% Senior Subordinated Notes due 2012.

Maturity Date July 15, 2012.

Interest The exchange notes will bear interest at the rate of 10 ¹/8% per year, payable semi-annually in arrears, on January 15 and July 15 of each year, commencing on January 15, 2003.

Guarantees Our obligations under the exchange notes will be fully and unconditionally guaranteed on a senior subordinated basis by each of our existing and future domestic restricted subsidiaries.

Ranking The exchange notes and the guarantees are general unsecured senior subordinated obligations. Accordingly, they will rank:

• junior to all of our and our guarantors’ existing and future senior debt, including borrowings under our senior credit facility;

• equally with all of our and our guarantors’ future unsecured senior subordinated obligations that do not expressly provide that they are subordinated to the notes; and

• senior to any of our and our guarantors’ future debt that expressly provides that it is subordinated to the notes.

Assuming we had completed the offering of the old notes and the refinancing of our senior secured credit facility as of June 30, 2002:

• approximately $76.9 million of senior debt, which includes borrowings under our senior credit facility and non-recourse debt issued by one of our wholly-owned subsidiaries, would have been senior to the notes and guarantees; and

• no debt having an equal ranking with, or subordinated to, the notes and the guarantees would have been outstanding.

Optional Redemption On or after July 15, 2007, we may redeem some or all of the notes at any time at the redemption prices listed under “Description of the Exchange Notes—Optional Redemption.”

In addition, on or before July 15, 2005, we may redeem up to 35% of the notes with the proceeds of certain equity offerings at the redemption price listed under “Description of the Exchange Notes—Optional Redemption.” We may make the redemption only if, after the redemption, at least 65% of the aggregate principal amount of notes issued remains outstanding.

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Mandatory Offer to Repurchase If we sell certain assets or experience specific types of changes of control, each holder will have the right to require us to repurchase all or any part of such holder’s notes at the prices listed under “Description of the Exchange Notes—Repurchase at the Option of Holders.”

Certain Covenants The indenture governing the exchange notes will, among other things, limit our ability and the ability of our domestic restricted subsidiaries to:

• incur or guarantee additional indebtedness;

• pay dividends or distributions on, or redeem or repurchase, capital stock;

• make investments;

• issue or sell capital stock of restricted subsidiaries;

• engage in transactions with affiliates;

• incur liens;

• transfer or sell assets; and

• consolidate, merge or transfer all or substantially all of our assets.

These limitations will be subject to a number of important qualifications and exceptions. See “Description of the Exchange Notes—Certain Covenants” for more details.

Use of Proceeds We will not receive any proceeds upon the completion of the exchange offer.

Risk Factors

This investment involves risks. Before you invest in the notes, you should carefully consider the matters set forth under the heading “Risk Factors” and all other information contained in this prospectus.

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SUMMARY CONSOLIDATED FINANCIAL AND OTHER DATA

The following table sets forth summary historical consolidated financial data of LBI Media, Inc. for the fiscal year ended December 31, 2001, for the six months ended June 30, 2002 and June 30, 2001 and for the twelve months ended June 30, 2002. The summary historical consolidated financial data for the fiscal year ended December 31, 2001 were derived from our audited consolidated financial statements included elsewhere in this prospectus. Our summary historical consolidated financial data for the six months ended June 30, 2002 and June 30, 2001 and for the twelve months ended June 30, 2002 were derived from our unaudited consolidated financial statements included elsewhere in this prospectus. This summary financial data should be read in conjunction with, and is qualified in its entirety by reference to, “Selected Historical Consolidated Financial and Other Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our consolidated financial statements and related notes included elsewhere in this prospectus.

	Year Ended December 31, 2001			Six Months Ended June 30,						Twelve Months Ended June 30, 2002
				2001			2002
	(dollars in thousands)
Operating Data:
Net revenues:
Radio	$	31,553		$	14,865		$	18,425		$	35,114
Television		28,104			12,938			15,128			30,294
Total net revenues		59,657			27,803			33,553			65,408
Operating expenses		26,744			11,133			14,991			30,602
Noncash employee compensation		1,398			817			2,453			3,034
Depreciation and amortization		8,673			3,491			1,524			6,706
Operating income		22,842			12,362			14,585			25,066
Interest expense, net		20,972			9,941			9,584			20,616
Income before income taxes and cumulative effect of accounting change		1,870			2,421			5,001			4,450
Income tax expense		81			73			21			28
Income before cumulative effect of accounting change		1,789			2,348			4,980			4,422
Cumulative effect of accounting change		—			—			(8,106	)		(8,106	)
Net income (loss)	$	1,789		$	2,348		$	(3,126	)	$	(3,684	)
Other Data:
EBITDA(1)	$	32,913		$	16,670		$	18,562		$	34,806
Adjusted EBITDA(1)(2)	$	33,261		$	16,729		$	18,971		$	35,503
Adjusted EBITDA margin(3)		55.8	%		60.2	%		56.5	%		54.3	%
Cash interest expense	$	11,877		$	5,403		$	4,352		$	10,825
Ratio of earnings to fixed charges(4)		1.1	x		1.2	x		1.5	x		1.2	x

	As of June 30, 2002
	Actual		As Adjusted(5)
	(in thousands)
Balance Sheet and Other Data:
Cash and cash equivalents	$	2,077	$	2,870
Working capital		382		13,922
Broadcast licenses, net		173,190		173,190
Total assets		246,451		245,636
Total debt(6)		216,695		226,900
Total stockholders’ equity		19,357		10,789
Ratio of net debt to adjusted EBITDA(7)		—		6.3	x

(1) We define EBITDA as operating income plus depreciation and amortization and noncash employee compensation. Although EBITDA is not a measure of performance calculated in accordance with accounting principles generally accepted in the U.S., we believe that it is useful in evaluating our operating performance and in comparing us to other companies in our business who report similar measures. However, you should not consider EBITDA in isolation or as a substitute for net income, cash flows from operating activities and other statements of operations or cash flow data prepared in accordance with accounting principles generally accepted in the United States. Moreover, the way in which we calculate EBITDA may differ from that of companies reporting a similarly-named measure.

(2) Adjusted EBITDA represents EBITDA plus fees and expenses associated with the settlement of certain litigation.

(3) Adjusted EBITDA margin means adjusted EBITDA divided by net revenues.

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(4) For purposes of calculating the ratio of earnings to fixed charges, earnings include income (loss) before income taxes and cumulative effect of accounting change plus fixed charges. Fixed charges consist of interest expense, amortization of deferred financing costs and the interest portion of rent expense.

(5) Gives effect to the offering of old notes, the refinancing of our senior credit facility and the use of proceeds from the offering of old notes and the refinancing.

(6) Total debt does not include the 9% subordinated notes issued by our parent. See “Description of Other Indebtedness—9% Subordinated Notes due 2013.”

(7) Net debt represents total debt less cash and cash equivalents as of June 30, 2002 and adjusted EBITDA represents adjusted EBITDA for the twelve months ending June 30, 2002.

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RISK FACTORS

This investment involves risks. Before you invest in the exchange notes, you should carefully consider the following risk factors and all the other information contained in this prospectus.

Risks Related to the Exchange Notes, the Exchange Offer and Our Indebtedness

If you do not properly tender your old notes, your ability to transfer such old notes will be adversely affected.

We will only issue exchange notes in exchange for old notes that are timely received by the exchange agent, together with all required documents, including a properly completed and signed letter of transmittal. Therefore, you should allow sufficient time to ensure timely delivery of the old notes, and you should carefully follow the instructions on how to tender your old notes. Neither we nor the exchange agent are required to tell you of any defects or irregularities with respect to your tender of the old notes. If you do not tender your old notes or if we do not accept your old notes because you did not tender your old notes properly, then, after we consummate the exchange offer, you may continue to hold old notes that are subject to the existing transfer restrictions. In addition, if you tender your old notes for the purpose of participating in a distribution of the exchange notes, you will be required to comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale of the exchange notes. If you are a broker-dealer that receives exchange notes for your own account in exchange for old notes that you acquired as a result of market-making activities or any other trading activities, you will be required to acknowledge that you will deliver a prospectus in connection with any resale of such exchange notes. After the exchange offer is consummated, if you continue to hold any old notes, you may have difficulty selling them because there will be less old notes outstanding. In addition, if a large amount of old notes are not tendered or are tendered improperly, the limited amount of exchange notes that would be issued and outstanding after we consummate the exchange offer could lower the market price of such exchange notes.

If you do not exchange your old notes, your old notes will continue to be subject to the existing transfer restrictions and you may be unable to sell your old notes.

We did not register the old notes under the Securities Act, nor do we intend to do so following the exchange offer. Old 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 old notes, you will lose your right to have your old notes registered under the federal securities laws. As a result, you will not be able to offer or sell old notes except in reliance on an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws.

Because we anticipate that most holders of old notes will elect to exchange their old notes, we expect that the liquidity of the market for any old notes remaining after the completion of the exchange offer may be substantially limited. Any old notes tendered and exchanged in the exchange offer will reduce the aggregate principal amount of the old notes outstanding. Following the exchange offer, if you did not tender your old notes you generally will not have any further registration rights. Accordingly, the liquidity of the market for any old notes could be adversely affected and you may be unable to sell them.

We have a substantial amount of debt, which could adversely affect our financial condition and prevent us from fulfilling our obligations under the exchange notes.

We currently have a substantial amount of debt. At June 30, 2002, after giving effect to the sale of the old notes, borrowings under our senior credit facility and repayment of prior indebtedness with the net proceeds of the offering of the old notes, we had total indebtedness of approximately $226.9 million (excluding the 9% subordinated notes issued by our parent).

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The data set forth below assume we completed the offering of the old notes and the refinancing of our senior credit facility as of June 30, 2002 and used the proceeds of the offering and refinancing to repay existing indebtedness (dollars in thousands):

Total indebtedness	$	226,900
Stockholders’ equity		10,789
Total capitalization		237,689
Debt to total capitalization		95.5	%

Our substantial indebtedness could have important consequences to you. For example, it could:

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

• limit our ability to borrow additional amounts for working capital, capital expenditures, acquisitions, debt service requirements, execution of our growth strategy or other purposes;

• require us to dedicate a substantial portion of our cash flow from operations to pay principal and interest on our debt, which would reduce availability of our cash flow to fund working capital, capital expenditures, acquisitions and other general corporate purposes;

• limit our flexibility in planning for and reacting to changes in our business and our industry that could make us more vulnerable to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and

• place us at a competitive disadvantage compared to our competitors that have less debt.

For additional information concerning our indebtedness, see “Description of Other Indebtedness.”

To service our indebtedness, we will require a significant amount of cash, and if we are unable to meet our debt obligations through cash flow generated by our operations, we may need to pursue alternative strategies.

Our ability to make payments on indebtedness, including the exchange notes, and to refinance indebtedness when necessary will depend on our financial and operating performance, each of which is subject to prevailing economic conditions and to financial, business, legislative and regulatory factors and other factors beyond our control.

We cannot assure you that our business will generate cash flow from operations, or that future borrowings will be available to us under our senior credit facility or from other sources, in an amount sufficient to enable us to pay our debt or to fund other liquidity needs. The commitment level under our senior credit facility automatically reduces each quarter beginning June 30, 2005 until it is fully amortized at September 30, 2009. In addition, our ability to borrow funds under our senior credit facility depends on our meeting the financial covenants in the agreements governing this facility, including a minimum interest coverage test and a maximum leverage ratio test. If we are unable to pay our debts, we will be required to pursue one or more alternative strategies, such as selling assets, refinancing or restructuring our indebtedness or selling additional debt or equity securities. We cannot assure you that we will be able to refinance any of our debt or sell additional debt or equity securities or our assets on favorable terms, if at all. If we are unable to generate sufficient cash flow, refinance our debt on favorable terms or sell additional debt or equity securities or our assets, it could have a material adverse effect on our financial condition and on our ability to make payments on the exchange notes and the guarantees.

We and our subsidiaries may incur additional debt in the future, which debt could further exacerbate the risks described above.

We and our subsidiaries may incur additional debt in the future. The terms of our senior credit facility and the indenture governing the notes allow us to incur additional debt under certain specified circumstances and do

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not fully prohibit us or our subsidiaries from doing so. Our senior credit facility allows for maximum borrowings of $170.0 million and allows us to increase the facility by an additional $30.0 million, subject to participation by our existing lenders or new lenders acceptable to the administrative agent under the senior credit facility. If new debt is added to our and our current subsidiaries’ current debt levels, the related risks that we and they now face could intensify.

Your right to receive payments on the exchange notes and the guarantees will be junior to all of our and the guarantors’ senior debt.

The exchange notes will be general unsecured obligations, junior in right of payment to all of our and the guarantors’ existing and future senior debt, including obligations under our senior credit facility. The exchange notes and the guarantees are not secured by any of our or the guarantors’ assets, and as such will be subordinated to all of the borrowings under our senior secured credit facility and any secured debt that we or the guarantors have now or may incur in the future to the extent of the value of the assets securing that debt.

In the event that we or a guarantor is declared bankrupt, becomes insolvent or is liquidated or reorganized, any debt that ranks senior to the exchange notes and the guarantees will be entitled to be paid in full from our assets or the assets of the guarantors before any payment may be made with respect to the exchange notes or the affected guarantees. In any of the foregoing events, we may not have sufficient assets to pay amounts due on the exchange notes. As a result, holders of the exchange notes may receive less, proportionally, than the holders of debt senior to the exchange notes and the guarantees. The subordination provisions of the indenture governing the exchange notes will restrict us from making any payment on the exchange notes during the continuance of payment defaults on our senior debt, and payments on the exchange notes may be suspended for a period of up to 179 days if a nonpayment default exists under such senior debt.

In addition, our unrestricted subsidiaries, if any, will not guarantee the exchange notes. In the event of a bankruptcy, liquidation, reorganization or similar proceeding with respect to any of those subsidiaries, the assets of those subsidiaries will be available to us or our guarantor subsidiaries only after all outstanding liabilities and preferred stock of the unrestricted subsidiaries have been paid in full. None of our subsidiaries is currently an unrestricted subsidiary.

Assuming the offering of the old notes and the refinancing of our senior credit facility had been completed as of June 30, 2002, the old notes and the guarantees would have ranked junior to approximately $76.9 million of senior debt. The indenture governing the exchange notes and the terms of our senior credit facility will permit, subject to specified limitations, the incurrence of additional debt, some or all of which may be senior debt. See “Description of the Exchange Notes—Subordination.”

The restrictive covenants in our debt instruments may affect our ability to operate our business successfully.

The indenture governing the exchange notes and the terms of our senior credit facility contain various provisions that limit our ability to, among other things:

• incur or guarantee additional debt and issue preferred stock;

• pay dividends or distributions on, or redeem or repurchase, capital stock;

• make investments and other restricted payments;

• issue or sell capital stock of restricted subsidiaries;

• grant liens;

• transfer or sell assets;

• consolidate, merge or transfer all or substantially all of our assets; and

• enter into transactions with affiliates.

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In addition, our senior credit facility requires that we maintain specific financial ratios. If we fail to comply with the restrictive covenants contained in the indenture and our senior credit facility or maintain the financial ratios required by our senior credit facility, it would be an event of default.

If there were an event of default under our senior credit facility, the exchange notes or any other future indebtedness, the holders of the affected indebtedness could declare all of that indebtedness immediately due and payable, which, in turn, could cause the acceleration of the maturity of all of our other indebtedness. We cannot assure you that we would have sufficient funds available, or that we would have access to sufficient capital from other sources, to repay any accelerated debt. Even if we could obtain additional financing, we cannot assure you that the terms would be favorable to us. In addition, substantially all of our assets will be subject to liens securing our senior credit facility. If amounts outstanding under our senior credit facility were accelerated, our lenders could foreclose on these liens. We cannot assure you that our assets would be sufficient to repay borrowings under our senior credit facility and the amounts due under the notes in full. Any event of default under the senior credit facility, the exchange notes or any other future indebtedness could have a material adverse effect on our business, financial condition and results of operations.

The subsidiary guarantees raise fraudulent transfer issues, which could impair the enforceability of the subsidiary guarantees.

Under U.S. bankruptcy law and comparable provisions of state fraudulent transfer laws, a court could subordinate or void any guarantee if it found that the guarantee was incurred with actual intent to hinder, delay or defraud creditors or the guarantor did not receive fair consideration or reasonably equivalent value for the guarantee and the guarantor was, at the time of the guarantee or after giving effect to the guarantee:

• insolvent or rendered insolvent by reason of issuing the guarantee;

• engaged in a business for which its remaining assets constituted unreasonably small capital; or

• intended to incur, or believed that it would incur, debts beyond its ability to pay at maturity.

We cannot be certain as to the standard that a court would use to determine whether our guarantor subsidiaries were insolvent upon issuance of the guarantees or, regardless of the actual standard applied by the court, that the issuance of the guarantees of the notes would not be voided. If a court voided a guarantee as a result of fraudulent conveyance, or held it unenforceable for any other reason, it is possible that noteholders would cease to have a claim against the applicable guarantor.

We are a holding company and will depend on our subsidiaries to satisfy our obligations under the exchange notes.

As a holding company, our subsidiaries conduct all of our operations and own substantially all of our consolidated assets. Consequently, our principal source of cash to pay our obligations, including our obligations under the exchange notes, is the cash that our subsidiaries generate from their operations. Our subsidiaries’ ability to make payments to us will depend on their operating results and will be subject to applicable laws. We cannot assure you that any payments made to us by our subsidiaries will be adequate to make payments on the exchange notes.

You cannot be sure that an active trading market will develop for the exchange notes.

There is no existing trading market for the exchange notes. Although the initial purchasers of the old notes have informed us that they currently intend to make a market in the exchange notes, the initial purchasers have no obligation to do so and may discontinue their market-making at any time without notice.

The liquidity of any trading market for the exchange notes will depend upon the number of holders of the exchange notes, our performance, the market for similar securities, the interest of securities dealers in making a

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market in the exchange notes and other factors. As a result, you cannot be sure that an active trading market will develop for the exchange notes.

We may be unable to raise the funds necessary to finance the change of control offer required by the indenture.

Upon the occurrence of specific kinds of change of control events, each holder of outstanding exchange notes will have the right to require us to repurchase any or all of their exchange notes at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest. A change of control may result in an event of default under our senior credit facility and may cause the acceleration of our senior credit facility, in which case we will be required to repay the senior credit facility before we will be able to purchase any of the exchange notes. We cannot assure you that we would be able to repay amounts outstanding under the senior credit facility or obtain necessary consents under the facility to purchase the exchange notes. Any requirement to offer to purchase any outstanding exchange notes may result in our having to refinance our outstanding indebtedness, which we may not be able to do. In addition, even if we were able to refinance this indebtedness, the financing might be on terms unfavorable to us. If we fail to repurchase the exchange notes tendered for purchase upon the occurrence of a change of control, the failure will be an event of default under the indenture governing the exchange notes. In addition, the change of control covenant does not cover all corporate reorganizations, mergers or similar transactions and may not provide you with protection in a highly leveraged transaction.

Risks Related To Our Business

The loss of key personnel could disrupt our business and result in a loss of advertising revenues.

Our success depends in large part on the continued efforts, abilities and expertise of our officers and key employees and our ability to hire and retain qualified personnel. The loss of any member of our management team, particularly either of our founders, Jose and Lenard Liberman, could disrupt our operations and hinder or prevent implementation of our business plan, which could have a material and adverse effect on our business, financial condition and results of operations. In addition, if Lenard Liberman ceases to serve as an officer of our company or ceases to have an oversight role with respect to our operations and we are not able to replace him with a person of comparable experience within 180 days following his departure, it will trigger an event of default under our senior credit facility, which could in turn cause a cross-default under the indenture governing the exchange notes.

We are controlled by two stockholders who own 100% of our voting stock.

Jose and Lenard Liberman each own 50% of the outstanding shares of our parent, LBI Holdings I, and serve as the sole directors of LBI Media, our parent and all of our subsidiaries. Accordingly, the Libermans control all aspects of our business and the future direction of our company, including whether to engage in any transaction that would result in a change of control of our company.

If we are unable to compete effectively against other Spanish-language radio and television stations, we may suffer a decrease in advertising revenues.

In the competitive broadcasting industry, the success of our radio and television stations is primarily dependent upon their share of overall advertising revenues within their markets. Our stations compete for audiences and advertising revenue directly with other Spanish-language radio and television stations, and many of the owners of those competing stations have greater resources than we do. Two of our largest competitors, each of whom has greater resources than we do, recently announced an agreement to merge with each other and, upon consummation of the merger, will become our first cross-media competitor in Los Angeles and Houston. Also, as the Hispanic population grows in the U.S., more stations may begin competing with us by converting to a format similar to that of our stations.

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In addition, our stations compete for audiences and advertising revenue with other media, including cable television and to a lesser extent, satellite television, newspapers, magazines, the Internet and outdoor advertising. We anticipate that our radio stations may also compete with satellite-based radio services in the future. Our failure to offer advertisers effective, high quality media outlets could cause them to allocate more of their advertising budgets to our competitors, which could cause a decrease in our net revenues and adversely affect our results of operations and financial condition.

Cancellations or reductions of advertising could adversely affect our results of operations.

We do not generally obtain long-term commitments from our advertisers. As a result, our advertisers may cancel, reduce or postpone orders without penalty. Cancellations, reductions or delays in purchases of advertising could adversely affect our revenue, especially if we are unable to replace such purchases. Our expense levels are based, in part, on expected future revenue and are relatively fixed once set. Therefore, unforeseen decreases in advertising sales could materially adversely impact our operating results.

Our growth depends on successfully executing our acquisition strategy.

As we have done in the past, we intend to continue to supplement our internal growth by acquiring and developing media properties that complement or augment our existing markets. This growth has placed, and may continue to place, significant demands on our management, working capital and financial resources. We may be unable to identify or complete acquisitions for many reasons, including:

• competition among buyers;

• the need for regulatory approvals, including FCC and antitrust approvals;

• the high valuations of media properties; and

• the need to raise additional financing, which may be limited by the terms of our debt instruments, including our senior credit facility and the indenture governing the exchange notes.

If we cannot successfully develop and integrate our recent and future acquisitions, it could decrease our revenue or increase our costs.

To develop and integrate our recent and future acquisitions, we may need to:

• reformat stations to Spanish language and build advertising and listener or viewer support;

• integrate and improve operations and systems and the management of a station or group of stations;

• retain or recruit key personnel to manage acquired assets;

• realize sales efficiencies and cost reduction benefits from acquired assets; and

• operate successfully in markets in which we may have little or no prior experience.

Future acquisitions by us could result in the following consequences:

• issuances of equity securities;

• incurrence of debt and contingent liabilities;

• impairment of goodwill and other intangibles; and

• other acquisition-related expenses.

In addition, there is a risk that the stations we have acquired or may acquire in the future may not increase our cash flow or yield other anticipated benefits. After we have completed an acquisition, our management must be able to assume significantly greater responsibilities, and this in turn may cause them to divert their attention

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from our existing operations. We believe that these challenges are more pronounced when we enter new markets rather than expand further in existing markets. If we are unable to completely integrate into our business the operations of the properties that we have recently acquired or that we may acquire in the future, our revenue could decrease or our costs could increase. Also, in the event that the operations of a new station do not meet our expectations, we may restructure or write-off the value of some portion of the assets of the new station.

If we are unable to convert acquired stations successfully to a Spanish-language format, anticipated revenues from such acquisitions may not be realized.

Our acquisition strategy has often involved the acquisition of English-language stations and converting them to a Spanish-language format. We intend to continue this strategy with some of our future acquisitions. This conversion process may require a heavy initial investment of both financial and management resources. We may incur losses for a period of time after a format change due to the time required to build up ratings and station loyalty. These format conversions may be unsuccessful in any given market, and we may incur substantial costs and losses in implementing this strategy.

If our parent does not qualify as an S corporation or any of its subsidiaries do not qualify as subchapter S subsidiaries, then we may have less cash available to meet our obligations on the exchange notes.

Our parent is currently classified as an S corporation and all of its subsidiaries are classified as qualified Subchapter S subsidiaries for federal income tax purposes. As a result, the profits and losses of our parent and its subsidiaries are taxed directly to our parent’s shareholders. If our parent were to fail to qualify as an S corporation or any of its subsidiaries were to fail to qualify as subchapter S subsidiaries for federal income tax purposes (for example, as a result of any of the debt of the entities being classified as equity), then such entity’s taxable income would be subject to tax at regular corporate rates and would not flow through to the shareholders for reporting on their own tax returns. The loss of an entity’s S corporation status could be applied on a retroactive basis thereby resulting in such entity also owing taxes for past periods. Thus, if our parent or any of its subsidiaries were to lose their S corporation status, we would likely have less cash available to meet our obligations with respect to the exchange notes.

If we are unable to maintain our FCC license for any station, we would have to cease operations at that station.

The success of our television and radio operations depends on acquiring and maintaining broadcast licenses issued by the FCC, which are typically issued for a maximum term of eight years and are subject to renewal. Our FCC licenses are next subject to renewal at various times in 2005 and 2006. Although we may apply to renew our FCC licenses, renewal applications submitted by us may not be approved, and the FCC may impose conditions or qualifications that could restrict our television and radio operations. In addition, third parties may challenge our renewal applications.

If we violate the Communications Act of 1934, as amended (the “Communications Act”), or the rules and regulations of the FCC, the FCC may issue cease and desist orders or admonishments, impose fines, renew a license for less than eight years or revoke our licenses. The FCC has the right to revoke a license before the end of its term for acts committed by the licensee or its officers, directors or stockholders. If the FCC were to issue an order denying a license renewal application or revoking a license, we would be required to cease operating the radio or television station covered by the license, which could have a material adverse effect on our operations.

Our failure to maintain our FCC broadcast licenses could cause a default under our senior credit facility and cause an acceleration of our indebtedness.

Our senior credit facility requires us to maintain all of our material FCC licenses. If the FCC were to revoke any of our material licenses, our lenders could declare all amounts outstanding under the senior credit facility to

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be immediately due and payable, which would cause a cross-default under the indenture governing the exchange notes. If our senior indebtedness is accelerated, we may not have sufficient funds to pay the amounts owed.

We are subject to potentially costly environmental regulation.

Federal, state and local laws and regulations relating to the protection of the environment may require a current or previous owner or operator of real estate to investigate and cleanup hazardous or toxic substances at its properties. The owner or operator may have to pay a governmental entity or third parties for property damage and for investigation and cleanup costs incurred by those parties in connection with the contamination. These laws typically impose cleanup responsibility and liability without regard to whether the owner or operator knew of or caused the presence of the contaminants.

Two of our facilities are located on a site that has been designated as a federal “Superfund site” for cleanup of hazardous substances. We do not believe that we have contributed to the contamination at this site and have not been named as a potentially responsible party at this site. However, we cannot assure you that we will not be named as a potentially responsible party at this site in the future. In the event we were to be named as a potentially responsible party with respect to the contamination at this site and are required to contribute to the cleanup of the site, it could have a material adverse effect on our financial condition and results of operations.

Risks Related to the Television and Radio Industries

Our television and radio stations could be adversely affected by changes in the advertising market or a recession in the U.S. economy or in the economies of the regions in which we operate.

Revenue generated by our television and radio stations depends primarily upon the sale of advertising and is, therefore, subject to various factors that influence the advertising market for the broadcasting industry as a whole, including:

• changes in the financial condition of advertisers, which may reduce their advertising budgets; and

• changes in the tax laws applicable to advertisers.

Furthermore, since we focus on the Hispanic market, shifts in the Hispanic populations and demographics in Southern California and Houston could cause us to lose market share.

We also believe that advertising is largely a discretionary business expense. Advertising expenditures generally tend to decline during an economic recession or downturn. Consequently, our television and radio station revenues are likely to be adversely affected by a recession or downturn in the U.S. economy, such as has been recently experienced, or other events or circumstances that adversely affect advertising activity.

The required conversion to digital television may impose significant costs that might not be balanced by consumer demand, and we may have difficulty meeting certain FCC deadlines.

The FCC has allocated an additional television channel to most television station owners so that each full-service television station can broadcast a digital television (“DTV”) signal on the additional channel while continuing to broadcast an analog signal on the station’s original channel. As part of the transition from analog to DTV, full-service television station owners may be required to stop broadcasting analog signals and relinquish their analog channels to the FCC by 2006 if the market penetration of DTV receivers reaches certain levels by that time. Our cost to construct DTV facilities and broadcast both digital and analog signals for our full-service television stations between 2002 and 2006 will be significant.

The FCC currently requires our full-service television stations to begin broadcasting a DTV signal by November 1, 2002. It is expected that KRCA-TV will meet the November 1, 2002 deadline but we have

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requested that the FCC provide an extension until May 1, 2003 with respect to KZJL-TV. We are unsure what effect, if any, the possible refusal of the FCC to grant such extension may have on our current analog or future digital operations.

Additionally, the FCC recently released rules that allow us to initially satisfy the obligation to begin broadcasting a DTV signal by broadcasting a signal that serves, at least, each full-service television station’s applicable community of license. [In Houston, we anticipate that this new rule will permit us to temporarily install facilities of a lower-power level, which will not require the initial degree of capital investment we had anticipated to meet the requirements of our stations’ DTV authorizations. Our initial cost of converting KZJL-TV to DTV, therefore, will be considerably lower than it would have been if we were required to initially operate at the full signal strength provided for by our DTV authorizations.

We 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. Our final costs to convert our television stations to full-service DTV could be significant, and there may not be sufficient consumer demand for DTV services to recover our investment in DTV facilities.

Changes in the rules and regulations of the FCC could result in increased competition for our broadcast stations that could lead to increased competition in our markets.

Recent and prospective actions by the FCC could cause us to face increased competition in the future. The changes include:

• relaxation of restrictions on the participation by regional telephone operating companies in cable television and other direct-to-home audio and video technologies;

• the establishment of a Class A television service for low-power stations that makes such stations primary stations and gives them protection against full-service stations;

• procedures for licensing low-power FM radio stations that will be designed to serve small localized areas and niche audiences;

• permission for direct broadcast satellite television to provide the programming of traditional over-the-air stations, including local and out-of-market network stations;

• permission for satellite radio companies to provide continuous, nationwide digital radio services; and

• elimination or revision of restrictions on cross-ownership (i.e., ownership of both television and radio stations in combination with newspapers and/or cable television systems in the same market) and caps on the number of stations or market share that a particular company may own or control, locally or nationally.

Because our full-service television stations rely on “must carry” rights to obtain cable carriage, new laws or regulations that eliminate or limit the scope of our cable carriage rights could have a material adverse impact on our television operations.

Pursuant to the “must carry” provisions of the Cable Television Consumer Protection and Competition Act of 1992 (the “1992 Cable Act”), a broadcaster may demand carriage on a specific channel on cable systems within its market. However, the future of those “must carry” rights is uncertain, especially as they relate to the extent of carriage of DTV stations. The current FCC rules relate only to the carriage of analog television signals. It is not certain what, if any, “must carry” rights television stations will have after they make the transition to DTV. New laws or regulations that eliminate or limit the scope of our cable carriage rights could have a material adverse impact on our television operations.

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Under the 1992 Cable Act, each broadcast station is required to elect, every three years, to exercise their “must carry” rights. Each of our full-power 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 DTV broadcasting. We cannot predict what final rules the FCC ultimately will adopt or what effect those rules will have on our business.

The policies of direct broadcast satellite companies may make it more difficult for their customers to receive our local broadcast station signals.

The Satellite Home Viewer Improvement Act of 1999 (“SHVIA”) allows direct broadcast satellite (“DBS”) television companies (such as DirecTV and EchoStar/Dish Network) for the first time to transmit local broadcast television station signals back to their subscribers in local markets. In exchange for this privilege, however, SHVIA requires that in television markets in which a DBS company elects to pick-up and retransmit any local broadcast station signals, the DBS provider must also offer to its subscribers signals from all other qualified local broadcast television stations in that market. This is known as the “carry one/carry all” rule. Our broadcast television stations in markets for which DBS operators have elected to carry local stations have qualified for carriage under this rule, which we expect will increase our viewership in those markets. Two DBS operators and a satellite broadcasting trade association have instituted litigation challenging the constitutionality of SHVIA’s carry one/carry all requirements. In June 2001, a federal district court upheld the constitutionality of the federal law, which decision was upheld on appeal. We cannot predict the final outcome of such litigation challenging the constitutionality of the carry one/carry all rule.

We may have difficulty obtaining regulatory approval for acquisitions in our existing markets and, potentially, new markets.

We have acquired in the past, and may continue to acquire in the future, additional television and radio stations. The agencies responsible for enforcing the federal antitrust laws, the Federal Trade Commission (“FTC”) and the Department of Justice, may investigate certain acquisitions. After the passage of the Telecommunications Act of 1996 (the “Telecommunications Act”), the Department of Justice became more aggressive in reviewing proposed acquisitions of television and radio stations. The Department of Justice has, on several occasions, negotiated settlements, without initiating litigation, with broadcasters seeking to increase their ownership of television and radio stations in specific markets, in which the broadcasters have been required to divest one or more stations in order to complete a transaction. The Department of Justice has, in certain cases, examined television and radio ownership concentrations where a transaction would result in a single entity controlling more than 40% of the advertising revenue in a particular market or where, after the transaction, two companies would control more than 70% of the advertising revenue in a particular market. The Department of Justice has also in certain cases examined whether a combination would result in undue concentration in a particular format or in formats appealing to particular audience demographics.

We cannot predict the outcome of any specific Department of Justice or FTC investigation. Any decision by the Department of Justice or FTC to challenge a proposed acquisition could affect our ability to consummate an acquisition or to consummate it on the proposed terms. There can be no assurance that the FTC or Department of Justice will not seek to bar us from acquiring additional television or radio stations in any market where our existing stations already have a significant market share.

Similarly, the FCC staff has adopted procedures to review proposed broadcasting transactions even if the proposed acquisition otherwise complies with the FCC’s ownership limitations. In particular, the FCC may invite public comment on proposed transactions that the FCC believes, based on its initial analysis, may present

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ownership concentration concerns in a particular local radio market. The FCC has delayed its approval of numerous proposed television or radio station purchases by various parties because of market concentration concerns, and generally will not approve acquisitions when the FTC or Department of Justice has expressed concentration concerns even if the acquisition complies with the FCC’s numerical station limits. Moreover, in recent years the FCC has followed a policy of giving specific public notice of its intention to conduct additional ownership concentration analysis, and soliciting public comment on “the issue of concentration and its effect on competition and diversity,” with respect to certain applications for consent to radio station acquisitions based on advertising revenue shares or other criteria. The FCC has recently expressed its desire to eliminate delays in the staff’s review of transactions that might involve concentration of market share but are otherwise consistent with the radio ownership limits set forth in the Communications Act. It is uncertain at this time what effect this will have on the FCC’s review of future television or radio station sale applications.

Additionally, the FCC has recently solicited public comment on a variety of possible changes in the methodology by which it defines a television or radio “market” and counts stations for purposes of determining compliance with local ownership restrictions. In 2001, the FCC commenced a comprehensive examination of its rules concerning multiple ownership of radio stations in local markets. Specifically, the FCC sought to examine the effect of increased consolidation of radio station ownership and to consider possible changes to its local radio ownership rules in light of such consolidation. We cannot predict the outcome of these rulemakings. If adopted, any such changes could limit our ability to make future acquisitions of radio or television stations. Moreover, the FCC has announced a policy of deferring, until the rulemaking is completed, certain pending and future television or radio sale applications which raise “concerns” about how the FCC counts the number of stations a company may own in a market. This policy may delay future acquisitions for which we must seek FCC approval.

We must respond to the rapid changes in technology, services and standards which characterize our industry in order to remain competitive.

The television and radio broadcasting industry is subject to technological change, evolving industry standards and the emergence of new media technologies. We cannot assure you that we will have the resources to acquire new technologies or to introduce new services that could compete with these new technologies. Several new media technologies are being developed, including the following:

• audio programming by cable television systems, direct broadcast satellite systems, Internet content providers and Internet-based audio radio services;

• satellite digital audio radio service with numerous channels and sound quality equivalent to that of compact discs;

• In-Band On-Channel^™ digital radio, which could provide multi-channel, multi-format digital radio services in the same bandwidth currently occupied by traditional AM and FM radio services;

• low power FM radio, which could result in additional FM radio broadcast outlets that are designed to serve local interests;

• streaming video programming delivered via the Internet;

• video-on-demand programming offered by cable television companies; and

• digital video recorders with hard-drive storage capacity that offer time-shifting of programming and the capability of deleting advertisements when playing back the recorded programs.

We cannot assure you that we will have the resources to acquire new technologies or to introduce new services that could compete with other new technologies. We cannot predict the effect, if any, that competition arising from new technologies or regulatory change may have on the television or radio broadcasting industry or on our company. If we are unable to keep pace with and adapt our television and radio stations to these developments, it could harm our competitive position, financial condition and results of operations.

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USE OF PROCEEDS

The exchange offer satisfies an obligation under the registration rights agreement. We will not receive any cash proceeds from the exchange offer.

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THE EXCHANGE OFFER; REGISTRATION RIGHTS

Purpose and Effect

On July 9, 2002, concurrently with the sale of the old notes, we entered into a registration rights agreement with the initial purchasers of the old notes, which requires us to file a registration statement under the Securities Act with respect to the old notes and, upon the effectiveness of the registration statement, offer to the holders of the old notes the opportunity to exchange their old notes for a like principal amount of exchange notes. The exchange notes will be issued without a restrictive legend and generally may be reoffered and resold without registration under the Securities Act. The registration rights agreement further provides that we must use our best efforts to have the registration statement declared effective by the SEC by July 4, 2003 and must use our best efforts to consummate the exchange offer on or prior to 30 business days after the date on which the registration statement was declared effective by the SEC.

Except as described below, upon the completion of the exchange offer, our obligations with respect to the registration of the old notes and the exchange notes will terminate. A copy of the registration rights agreement has been filed as an exhibit to the registration statement of which this prospectus is a part, and this summary of the material provisions of the registration rights agreement does not purport to be complete and is qualified in its entirety by reference to the complete registration rights agreement. As a result of the timely filing and the effectiveness of the registration statement, we will not have to pay certain liquidated damages on the old notes provided in the registration rights agreement. Following the completion of the exchange offer, holders of old notes not tendered will not have any further registration rights other than as set forth in the paragraphs below, and the old notes will continue to be subject to certain restrictions on transfer. Additionally, the liquidity of the market for the old notes could be adversely affected upon consummation of the exchange offer.

In order to participate in the exchange offer, a holder must represent to us, among other things, that:

• the exchange notes acquired pursuant to the exchange offer are being obtained in the ordinary course of business of the holder;

• the holder is not engaging in and does not intend to engage in a distribution of the exchange notes;

• the holder does not have an arrangement or understanding with any person to participate in the distribution of the exchange notes; and

• the holder is not an “affiliate,” as defined under Rule 405 under the Securities Act, of LBI Media, Inc.

We will be required to file a shelf registration statement covering resales of the old notes if, in some circumstances, the holders of old notes so request.

If obligated to file the shelf registration statement, we will use our best efforts to file the shelf registration statement with the SEC on or prior to 30 days after such filing obligation arises and to cause the shelf registration statement to be declared effective by the SEC on or prior to the later of (a) 360 days after the issuance of the old notes or (b) 90 days after such obligation arises.

If we fail to comply with any of the above provisions or if the exchange offer registration statement or the shelf registration statement fails to become effective, then, as liquidated damages, commencing on the day after the applicable failure date, we will pay liquidated damages in an amount equal to $.05 per week per $1,000 principal amount of the old notes held by a holder.

The amount of liquidated damages will increase by an additional $.05 per week per $1,000 principal amount of notes with respect to each subsequent 90-day period until all such failures have been cured, up to a maximum amount of liquidated damages of $.20 per week per $1,000 principal amount of old notes.

Based on an interpretation by the SEC’s staff set forth in no-action letters issued to third parties unrelated to us, we believe that, with the exceptions set forth below, exchange notes issued in the exchange offer may be

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offered for resale, resold and otherwise transferred by the holder of exchange notes without compliance with the registration and prospectus delivery requirements of the Securities Act, unless the holder:

• is an “affiliate” of LBI Media, Inc. within the meaning of Rule 405 under the Securities Act;

• is a broker-dealer who purchased old notes directly from us for resale under Rule 144A or any other available exemption under the Securities Act;

• acquired the exchange notes other than in the ordinary course of the holder’s business; or

• the holder has an arrangement with any person to engage in the distribution of the exchange notes.

Any holder who tenders in the exchange offer for the purpose of participating in a distribution of the exchange notes cannot rely on this interpretation by the SEC’s staff and must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction. Each broker-dealer that receives exchange notes for its own account in exchange for old notes, where such old notes were acquired by such broker-dealer as a result of market making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. See “Plan of Distribution.” Broker-dealers who acquired old notes directly from us and not as a result of market making activities or other trading activities may not rely on the staff’s interpretations discussed above or participate in the exchange offer, and must comply with the prospectus delivery requirements of the Securities Act in order to sell the old notes.

Following the consummation of the exchange offer, holders of the old notes who were eligible to participate in the exchange offer but who did not tender its old notes will not have any further registration rights and the old notes will continue to be subject to certain restrictions on transfer. Accordingly, the liquidity of the market for the outstanding notes could be adversely affected.

Terms of the Exchange Offer

Upon the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal, we will accept any and all old notes validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on             , 200  , or such date and time to which we extend the offer. We will issue $1,000 in principal amount of exchange notes in exchange for each $1,000 principal amount of outstanding old notes accepted in the exchange offer. Holders may tender some or all of their old notes pursuant to the exchange offer. However, old notes may be tendered only in integral multiples of $1,000 in principal amount.

The exchange notes will evidence the same debt as the old notes and will be issued under the terms of, and entitled to the benefits of, the indenture relating to the old notes.

This prospectus, together with the letter of transmittal, is being sent to the registered holder and to others believed to have beneficial interests in the old notes. 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 promulgated under the Exchange Act.

We will be deemed to have accepted validly tendered old notes when, as and if we have given oral or written notice thereof to U.S. Bank, N.A., the exchange agent. The exchange agent will act as agent for the tendering holders for the purpose of receiving the exchange notes from us. If any tendered old notes are not accepted for exchange because of an invalid tender, the occurrence of certain other events set forth under the heading “—Conditions to the Exchange Offer” or otherwise, certificates for any such unaccepted old notes will be returned, without expense, to the tendering holder of those old notes as promptly as practicable after the Expiration Date unless the exchange offer is extended.

Holders who tender old notes in the exchange offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of old

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notes in the exchange offer. We will pay all charges and expenses, other than certain applicable taxes, applicable to the exchange offer. See “—Fees and Expenses.”

Expiration Date; Extensions; Amendments

The Expiration Date shall be 5:00 p.m., New York City time, on                          , 200   unless we, in our sole discretion, extend the exchange offer, in which case the Expiration Date shall be the latest date and time to which the exchange offer is extended. In order to extend the exchange offer, we will notify the exchange agent and each registered holder of any extension by oral or written notice prior to 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date. We reserve the right, in our sole discretion:

(A)    to delay accepting any old notes, to extend the exchange offer or, if any of the conditions set forth under “—Conditions to Exchange Offer” shall not have been satisfied, to terminate the exchange offer, by giving oral or written notice of that delay, extension or termination to the exchange agent, or

(B)    to amend the terms of the exchange offer in any manner.

In the event that we make a fundamental change to the terms of the exchange offer, we will file a post-effective amendment to the registration statement.

Procedures for Tendering

Only a holder of old notes may tender the old notes in the exchange offer. Except as set forth under “—Book-Entry Transfer,” to tender in the exchange offer a holder must complete, sign and date the letter of transmittal, or a copy of the letter of transmittal, have the signatures on the letter of transmittal guaranteed if required by the letter of transmittal and mail or otherwise deliver the letter of transmittal or copy to the exchange agent prior to the Expiration Date. In addition:

• certificates for the old notes must be received by the exchange agent along with the letter of transmittal prior to the Expiration Date;

• a timely confirmation of a book-entry transfer (a “Book-Entry Confirmation”) of the old notes, if that procedure is available, into the exchange agent’s account at The Depository Trust Company (the “Book-Entry Transfer Facility”) following the procedure for book-entry transfer described below, must be received by the exchange agent prior to the Expiration Date; or

• you must comply with the guaranteed delivery procedures described below.

To be tendered effectively, the letter of transmittal and other required documents must be received by the exchange agent at the address set forth under “—Exchange Agent” prior to the Expiration Date.

Your tender, if not withdrawn prior to 5:00 p.m., New York City time, on the Expiration Date, will constitute an agreement between you and us in accordance with the terms and subject to the conditions set forth herein and in the letter of transmittal.

The method of delivery of old notes and the letter of transmittal and all other required documents to the exchange agent is at your election and risk. Instead of delivery by mail, it is recommended that you 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. No letter of transmittal or old notes should be sent to us. You may request your broker, dealer, commercial bank, trust company or nominee to effect these transactions for you.

Any beneficial owner whose old 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 the registered holder to tender on the beneficial owner’s behalf. If the beneficial owner wishes to tender on its own behalf, the beneficial owner must, prior to completing and executing the letter of transmittal and delivering

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the owner’s old notes, either make appropriate arrangements to register ownership of the old notes in the beneficial owner’s name or obtain a properly completed bond power from the registered holder. The transfer of registered ownership may take considerable time.

Signatures on a letter of transmittal or a notice of withdrawal, as the case may be, must be guaranteed by an “eligible guarantor institution” within the meaning of Rule 17Ad-15 under the Exchange Act unless old notes tendered pursuant thereto are tendered:

(A)    by a registered holder who has not completed the box entitled “Special Registration Instruction” or “Special Delivery Instructions” on the letter of transmittal or

(B)    for the account of an eligible guarantor institution.

If signatures on a letter of transmittal or a notice of withdrawal, as the case may be, are required to be guaranteed, the guarantee must be by any eligible guarantor institution that is a member of or participant in the Securities Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Program or an eligible guarantor institution.

If the letter of transmittal is signed by a person other than the registered holder of any old notes listed in the letter of transmittal, the old notes must be endorsed or accompanied by a properly completed bond power, signed by the registered holder as that registered holder’s name appears on the old notes.

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

All questions as to the validity, form, eligibility, including time of receipt, acceptance, and withdrawal of tendered old 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 old notes not properly tendered or any old notes our acceptance of which would, in the opinion of our counsel, be unlawful. We also reserve the right to waive any defects, irregularities or conditions of tender as to particular old 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, any defects or irregularities in connection with tenders of old notes must be cured within such time as we shall determine. Although we intend to notify holders of defects or irregularities with respect to tenders of old notes, neither we, the exchange agent, nor any other person shall incur any liability for failure to give that notification. Tenders of old notes will not be deemed to have been made until such defects or irregularities have been cured or waived. Any old 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 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, unless the exchange offer is extended.

In addition, we reserve the right in our sole discretion to purchase or make offers for any old notes that remain outstanding after the Expiration Date or, as set forth under “—Conditions to the Exchange Offer,” to terminate the exchange offer and, to the extent permitted by applicable law, purchase old notes in the open market, in privately negotiated transactions, or otherwise. The terms of any such purchases or offers could differ from the terms of the exchange offer.

By tendering, you will be representing to us that, among other things:

• the exchange notes acquired in the exchange offer are being obtained in the ordinary course of business of the person receiving such exchange notes, whether or not such person is the registered holder;

• you are not engaging in and do not intend to engage in a distribution of the exchange notes;

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• you do not have an arrangement or understanding with any person to participate in the distribution of such exchange notes; and

• you are not an “affiliate,” as defined under Rule 405 of the Securities Act, of LBI Media.

In all cases, issuance of exchange notes for old notes that are accepted for exchange in the exchange offer will be made only after timely receipt by the exchange agent of certificates for such old notes or a timely Book-Entry Confirmation of such old notes into the exchange agent’s account at the Book-Entry Transfer Facility, a properly completed and duly executed letter of transmittal or, with respect to The Depository Trust Company and its participants, electronic instructions in which the tendering holder acknowledges its receipt of and agreement to be bound by the letter of transmittal, and all other required documents. If any tendered old notes are not accepted for any reason set forth in the terms and conditions of the exchange offer or if old notes are submitted for a greater principal amount than the holder desires to exchange, such unaccepted or non-exchanged old notes will be returned without expense to the tendering holder or, in the case of old notes tendered by book-entry transfer into the exchange agent’s account at the Book-Entry Transfer Facility according to the book-entry transfer procedures described below, those nonexchanged old notes will be credited to an account maintained with that Book-Entry Transfer Facility, in each case, as promptly as practicable after the expiration or termination of the exchange offer.

Each broker-dealer that receives exchange notes for its own account in exchange for old notes, where those old notes were acquired by such broker-dealer as a result of market making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of those exchange notes. See “Plan of Distribution.”

Book-Entry Transfer

The exchange agent will make a request to establish an account with respect to the old notes at the Book-Entry Transfer Facility for purposes of the exchange offer within two business days after the date of this prospectus, and any financial institution that is a participant in the Book-Entry Transfer Facility’s systems may make book-entry delivery of old notes being tendered by causing the Book-Entry Transfer Facility to transfer such old notes into the exchange agent’s account at the Book-Entry Transfer Facility in accordance with that Book-Entry Transfer Facility’s procedures for transfer. However, although delivery of old notes may be effected through book-entry transfer at the Book-Entry Transfer Facility, the letter of transmittal or copy of the letter of transmittal, with any required signature guarantees and any other required documents, must, in any case other than as set forth in the following paragraph, be transmitted to and received by the exchange agent at the address set forth under “—Exchange Agent” on or prior to the Expiration Date or the guaranteed delivery procedures described below must be complied with.

The Depository Trust Company’s Automated Tender Offer Program (“ATOP”) is the only method of processing exchange offers through The Depository Trust Company. To accept the exchange offer through ATOP, participants in The Depository Trust Company must send electronic instructions to The Depository Trust Company through The Depository Trust Company’s communication system instead of sending a signed, hard copy letter of transmittal. The Depository Trust Company is obligated to communicate those electronic instructions to the exchange agent. To tender old notes through ATOP, the electronic instructions sent to The Depository Trust Company and transmitted by The Depository Trust Company to the exchange agent must contain the character by which the participant acknowledges its receipt of and agrees to be bound by the letter of transmittal.

Guaranteed Delivery Procedures

If a registered holder of the old notes desires to tender old notes and the old notes are not immediately available, or time will not permit that holder’s old notes or other required documents to reach the exchange agent

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prior to 5:00 p.m., New York City time, on the Expiration Date, or the procedure for book-entry transfer cannot be completed on a timely basis, a tender may be effected if:

• the tender is made through an eligible guarantor institution;

• prior to 5:00 p.m., New York City time, on the Expiration Date, the exchange agent receives from that eligible guarantor institution a properly completed and duly executed letter of transmittal or a facsimile of duly executed letter of transmittal and notice of guaranteed delivery, substantially in the form provided by us, by telegram, telex, fax transmission, mail or hand delivery, setting forth the name and address of the holder of old notes and the amount of the old notes tendered and stating that the tender is being made by guaranteed delivery and guaranteeing that within three New York Stock Exchange, Inc. (“NYSE”) trading days after the date of execution of the notice of guaranteed delivery, the certificates for all physically tendered old notes, in proper form for transfer, or a Book-Entry Confirmation, as the case may be, will be deposited by the eligible guarantor institution with the exchange agent; and

• the certificates for all physically tendered old notes, in proper form for transfer, or a Book-Entry Confirmation, as the case may be, are received by the exchange agent within three NYSE trading days after the date of execution of the notice of guaranteed delivery.

Withdrawal Rights

Tenders of old notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration Date.

For a withdrawal of a tender of old notes to be effective, a written or, for The Depository Trust Company participants, electronic ATOP transmission notice of withdrawal, must be received by the exchange agent at its address set forth under “—Exchange Agent” prior to 5:00 p.m., New York City time, on the Expiration Date. Any such notice of withdrawal must:

• specify the name of the person having deposited the old notes to be withdrawn (the “Depositor”);

• identify the old notes to be withdrawn, including the certificate number or numbers and principal amount of such old notes;

• be signed by the holder in the same manner as the original signature on the letter of transmittal by which such old notes were tendered, including any required signature guarantees, or be accompanied by documents of transfer sufficient to have the trustee register the transfer of such old notes into the name of the person withdrawing the tender; and

• specify the name in which any such old notes are to be registered, if different from that of the Depositor.

All questions as to the validity, form, eligibility and time of receipt of such notices will be determined by us, whose determination shall be final and binding on all parties. Any old notes so withdrawn will be deemed not to have been validly tendered for exchange for purposes of the exchange offer. Any old notes which have been tendered for exchange, but which are not exchanged for any reason, will be returned to the holder of those old notes without cost to that holder as soon as practicable after withdrawal, rejection of tender, or termination of the exchange offer. Properly withdrawn old notes may be retendered by following one of the procedures under “—Procedures for Tendering” at any time on or prior to the Expiration Date.

Conditions to the Exchange Offer

Notwithstanding any other provision of the exchange offer, we will not be required to accept for exchange, or to issue exchange notes in exchange for, any old notes and may terminate or amend the exchange offer if at any time before the acceptance of those old notes for exchange or the exchange of the exchange notes for those old notes, we determine that the exchange offer violates applicable law, any applicable interpretation of the staff of the SEC or any order of any governmental agency or court of competent jurisdiction.

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The foregoing conditions are for our sole benefit and may be asserted by us regardless of the circumstances giving rise to any such condition or may be waived by us in whole or in part at any time and from time to time in our sole discretion. The failure by us at any time to exercise any of the foregoing rights shall not be deemed a waiver of any of those rights and each of those rights shall be deemed an ongoing right which may be asserted at any time and from time to time.

In addition, we will not accept for exchange any old notes tendered, and no exchange notes will be issued in exchange for those old notes, if at such time any stop order shall be threatened or in effect with respect to the registration statement of which this prospectus constitutes a part or the qualification of the indenture under the Trust Indenture Act of 1939. In any of those events we are required to use every reasonable effort to obtain the withdrawal of any stop order at the earliest possible time.

Exchange Agent

All executed letters of transmittal should be directed to the exchange agent. U.S. Bank, N.A. has been appointed as exchange agent for the exchange offer. Questions, requests for assistance and requests for additional copies of this prospectus or of the letter of transmittal should be directed to the exchange agent addressed as follows:

By Registered or Certified Mail:	By Hand Delivery or Overnight Courier:	By Facsimile:       (Eligible Institutions Only)
U.S. Bank, N.A. 180 East Fifth Street St. Paul, Minnesota 55101 Attn: Specialized Finance Reference: LBI Media, Inc.	U.S. Bank, N.A. 180 East Fifth Street St. Paul, Minnesota 55101 Attn: Specialized Finance Reference: LBI Media, Inc.	(651) 244-1537 Reference: LBI Media, Inc.
For Information or Confirmation by Telephone: (651) 244-4512

Originals of all documents sent by facsimile should be sent promptly by registered or certified mail, by hand or by overnight delivery service.

Fees And Expenses

We will not make any payments to brokers, dealers or others soliciting acceptances of the exchange offer. The principal solicitation is being made by mail; however, additional solicitations may be made in person or by telephone by our officers and employees. The estimated cash expenses to be incurred in connection with the exchange offer will be paid by us and will include fees and expenses of the exchange agent, accounting, legal, printing and related fees and expenses.

Transfer Taxes

Holders who tender their old notes for exchange will not be obligated to pay any transfer taxes in connection with that tender or exchange, except that holders who instruct us to register exchange notes in the name of, or request that old notes not tendered or not accepted in the exchange offer be returned to, a person other than the registered tendering holder will be responsible for the payment of any applicable transfer tax on those old notes.

Accounting Treatment

The exchange notes will be recorded at the same carrying value as the old notes, as reflected in our accounting records on the date of the exchange. Accordingly, we will recognize no gain or loss for accounting purposes upon the closing of the exchange offer. We will amortize the expenses of the exchange offer over the term of the exchange notes under accounting principles generally accepted in the U.S.

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CAPITALIZATION

The following table sets forth our cash and cash equivalents and capitalization as of June 30, 2002 on an actual basis and as adjusted to give effect to the offering of the old notes, the refinancing of our senior credit facility and the application of the net proceeds from the offering of the old notes and the refinancing on July 9, 2002.

The information in this table should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Selected Historical Consolidated Financial Data” and our audited consolidated financial statements and related notes included elsewhere in this prospectus.

	As of June 30, 2002
	Actual			As Adjusted
	(in thousands)
Cash and cash equivalents	$	2,077		$	2,870
Long-term debt (including current portion):
Senior credit facility(1)	$	162,783		$	74,000
Old notes issued on July 9, 2002		—			150,000
Oaktree subordinated notes		49,151			—
Empire Burbank loan		2,900			2,900
Notes payable to stockholders		1,861			—
Total debt(2)		216,695			226,900
Stockholders’ equity:
Common stock, $0.01 par value, 1,000 shares authorized; 100 shares issued and outstanding		—			—
Additional paid-in capital		22,817			22,817
Retained deficit		(3,444	)		(12,012	)
Accumulated other comprehensive income		(16	)		(16	)
Total stockholders’ equity		19,357			10,789
Total capitalization	$	236,052		$	237,689

(1) We paid the remaining principal balance of $162.8 million and unpaid interest on our old senior credit facility with the proceeds of the offering of the old notes and with borrowings under our senior credit facility. After the completion of the offering of the old notes, the refinancing of our senior credit facility and the use of proceeds therefrom, we borrowed $74.0 million under our new senior credit facility and had approximately $86.0 million of available borrowing capacity remaining. On August 12, 2002, we paid $4.0 million aggregate principal amount on the new senior credit facility, and effective August 16, 2002, we increased the borrowing capacity under our senior credit facility by $10.0 million, which gave us approximately $100.0 million of available borrowing capacity, subject to the restrictions on incurrence of indebtedness in the indenture governing the notes. See “Management’s Discussion and Analysis of Financial Conditions and Results of Operations—Liquidity and Capital Resources.”

(2) Total debt does not include the 9% subordinated notes issued by our parent. See “Description of Other Indebtedness—9% Subordinated Notes due 2013.”

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OTHER DATA

The selected financial data set forth below as of December 31, 2000 and 2001 and for the years ended December 31, 1999, 2000 and 2001 have been derived from our consolidated financial statements included elsewhere in this prospectus, which have been audited by Ernst & Young LLP, independent auditors, as indicated in their report included elsewhere in this prospectus. The selected financial data set forth below as of December 31, 1997, 1998 and 1999 and for the years ended December 31, 1997 and 1998 have been derived from financial statements audited by Ernst & Young LLP, but not included in this prospectus. The financial data for the six months ended June 30, 2001 and June 30, 2002 have been derived from our unaudited consolidated financial statements. The unaudited consolidated financial statements reflect, in the opinion of management, all adjustments necessary for the fair presentation of the financial condition and the results of operations for such periods. Operating results for the six months ended June 30, 2002 are not necessarily indicative of the results that may be expected for the entire year ended December 31, 2002.

The financial data set forth below should be read in conjunction with, and are qualified in their entirety by, reference to “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our consolidated financial statements and related notes included elsewhere in this prospectus.

	Year Ended December 31,											Six Months Ended June 30,
	1997			1998		1999		2000		2001		2001		2002
	(in thousands)											(unaudited)
Consolidated Statement of Operations Data:
Net revenues:
Radio	$	18,493		$	16,538	$	19,420	$	28,636	$	31,553	$	14,865	$	18,425
Television		—			10,603		16,997		21,916		28,104		12,938		15,128
Total net revenues		18,493			27,141		36,417		50,552		59,657		27,803		33,553
Operating expenses		11,208			11,182		17,739		22,550		26,744		11,133		14,991
Noncash employee compensation		—			—		—		1,240		1,398		817		2,453
Depreciation and amortization		1,912			3,980		4,435		4,637		8,673		3,491		1,524
Operating income		5,373			11,979		14,243		22,125		22,842		12,362		14,585
Interest expense, net		10,886			7,673		6,461		6,597		20,972		9,941		9,584
Income before income taxes and cumulative effect of accounting change		(5,513	)		4,306		7,782		15,528		1,870		2,421		5,001
Income tax expense		—			3		6		74		81		73		21
Income before cumulative effect of accounting change		(5,513	)		4,303		7,776		15,454		1,789		2,348		4,980
Cumulative effect of accounting change		—			—		—		—		—		—		(8,106	)
Net income (loss)	$	(5,513	)	$	4,303	$	7,776	$	15,454	$	1,789	$	2,348	$	(3,126	)
Other Data:
EBITDA(1)	$	7,285		$	15,959	$	18,678	$	28,002	$	32,913	$	16,670	$	18,562
Cash interest expense	$	3,893		$	7,037	$	6,209	$	6,162	$	11,877	$	5,403	$	4,352
Capital expenditures	$	1,169		$	2,005	$	4,668	$	4,044	$	13,954	$	8,247	$	1,545
Ratio of earnings to fixed charges (unaudited)(2)		—			1.5x		2.2x		3.3x		1.1x		1.2x		1.5x

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	As of December 31,													As of June 30,
	1997			1998		1999		2000			2001			2002
	(in thousands)													(unaudited)
Balance Sheet Data:
Cash and cash equivalents	$	1,658		$	1,226	$	4,617	$	486		$	1,131		$	2,077
Working capital (deficit)		(6,248	)		3,978		4,545		(7,069	)		(4,355	)		382
Broadcast licenses, net		41,078			95,587		92,990		89,797			181,294			173,190
Total assets		64,570			124,642		134,360		140,245			248,400			246,451
Total debt(3)		55,364			76,664		78,268		76,960			218,768			216,695
Total stockholders’ equity		(1,123	)		46,003		53,582		59,176			22,540			19,357

(1) We define EBITDA as operating income plus depreciation and amortization and noncash employee compensation. Although EBITDA is not a measure of performance calculated in accordance with accounting principles generally accepted in the U.S., we believe that it is useful in evaluating our operating performance and in comparing us to other companies in our business who report similar measures. However, you should not consider EBITDA in isolation or as a substitute for net income, cash flows from operating activities and other statement of operations or cash flow data prepared in accordance with accounting principles generally accepted in the U.S. Moreover, the way in which we calculate EBITDA may differ from that of companies reporting a similarly-named measure.

(2) For purposes of calculating the ratio of earnings to fixed charges, earnings include income (loss) before income taxes and cumulative effect of accounting change plus fixed charges. Fixed charges consist of interest expense, amortization of deferred financing costs and the interest portion of rent expense. Earnings were insufficient to cover fixed charges in the amount of $5.5 million for the year ended December 31, 1997.

(3) Total debt does not include the 9% subordinated notes issued by our parent. See “Description of Other Indebtedness—9% Subordinated Notes due 2013.”

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with “Selected Historical Consolidated Financial and Other Data” and our consolidated financial statements and related notes included elsewhere in this prospectus. The following discussion and analysis discusses the financial condition and results of our operations on a consolidated basis, unless otherwise indicated.

Overview

We own and operate radio and television stations in Southern California and Houston, Texas. Our radio stations consist of three FM and two AM stations serving Los Angeles, California and its surrounding area and, after giving effect to our pending acquisitions, five FM and four AM stations serving Houston, Texas and its surrounding area. Our three television stations consist of full-power stations serving Los Angeles, California and Houston, Texas and a low-power station serving San Diego, California. In addition, we operate a television production facility, Empire Burbank Studios, in Burbank, California.

We operate in two reportable segments, radio and television. We generate revenue from sales of national, regional and local advertising time on our television and radio stations, the sale of time on a contractual basis to brokered or infomercial customers on our radio and television stations, and, to a lesser extent, the leasing of our production facilities to outside entertainment companies. Advertising rates are, in large part, based on each station’s ability to attract audiences in demographic groups targeted by advertisers. We recognize revenues when the commercials are broadcast or the brokered time is made available to the customer. We incur commissions from agencies on local, regional and national advertising and our revenue reflects deductions from gross revenue for commissions to these agencies.

Our primary expenses are employee compensation, including commissions paid to our sales staffs and our national representative firms, marketing, promotion and selling, technical, programming, engineering and general and administrative. Our programming costs for television consist of costs related to the production of original programming content, production of local newscasts, and the acquisition of programming content from other sources.

The performance of broadcasting companies is customarily measured by their ability to generate EBITDA. We define EBITDA as operating income plus depreciation and amortization and noncash employee compensation. Although EBITDA is not a measure of performance calculated in accordance with generally accepted accounting principles, and should be viewed as a supplement to and not a substitute for our results of operations presented on the basis of generally accepted accounting principles, we believe that EBITDA is useful because it is generally recognized by the broadcasting industry as a measure of performance and is used by analysts who report on the performance of broadcast companies. This measure is not necessarily comparable to similarly titled measures used by other companies.

We are organized as a California corporation and are a “qualified S subsidiary” under federal and California state tax laws. As such, we are deemed for tax purposes to be part of our parent, an “S corporation,” and our taxable income is reported by our parent’s shareholders on their respective federal and state income tax returns.

On March 20, 2001, we completed our acquisition of selected assets of our radio stations KTJM-FM, KJOJ-FM, KQUE-AM, KJOJ-AM and KSEV-AM for an aggregate purchase price of $44.0 million. The acquired stations are located in the Houston, Texas market. As a result of these acquisitions, we began broadcasting outside of Southern California for the first time. We began airing Spanish-language programming on three of these stations in July 2001.

On March 20, 2001, we completed our acquisition of selected assets of KZJL-TV, licensed in Houston, Texas, for an aggregate purchase price of $57.0 million. The acquisition marked our first television station in the Houston, Texas market.

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Pursuant to two asset purchase agreements dated as of April 5, 2002 with El Dorado Communications, Inc. and certain of its affiliates (“El Dorado”), we have agreed to acquire selected assets of radio stations KQQK-FM and KEYH-AM in the Houston, Texas market, for an aggregate purchase price of approximately $30.0 million in cash. El Dorado currently owns KQQK-FM and has exercised an option to purchase KEYH-AM. El Dorado has operated KEYH-AM under time brokerage agreements since 1995. If El Dorado has not successfully acquired KEYH-AM from its current owner or other conditions to the KEYH-AM acquisition have not been satisfied prior to our closing of the KQQK-FM acquisition, our purchase price will be decreased from $30.0 million to $23.0 million and we will only purchase the assets of KQQK-FM. However, after the KQQK-FM acquisition, if all of the conditions to the acquisition of KEYH-AM are satisfied, we will purchase KEYH-AM for a purchase price of $7.0 million. On May 20, 2002, we began to operate KQQK-FM and KEYH-AM under two time brokerage agreements, and we have significantly changed the format, customer base, revenue stream and employee base of these stations. Subject to customary closing conditions, we expect to complete these acquisitions during the fourth quarter of 2002.

On June 21, 2002, we entered into an agreement to acquire selected assets of KIOX-FM and KXGJ-FM licensed to El Campo and Bay City, Texas, respectively, for an aggregate purchase price of $3.2 million. Subject to customary closing conditions, including receipt of final regulatory approval, we expect to complete the acquisition during the fourth quarter of 2002.

We are currently engaged in negotiations to acquire the broadcast assets of three radio stations for a total consideration in excess of $40.0 million. We have entered into a non-binding letter of intent with respect to this acquisition, but do not yet have a definitive agreement signed.

From time to time, we engage in discussions with third parties concerning our possible acquisition of additional radio or television stations or related assets. Any such discussions may or may not lead to our acquisition of additional broadcasting assets.

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Results of Operations

Separate financial data for each of our operating segments is provided below. We evaluate the performance of our operating segments based on the following:

	Year Ended December 31,						Six Months Ended June 30,
	1999		2000		2001		2001		2002
	(in thousands)
							(unaudited)
Net revenues:
Radio	$	19,420	$	28,636	$	31,553	$	14,865	$	18,425
Television		16,997		21,916		28,104		12,938		15,128
Total	$	36,417	$	50,552	$	59,657	$	27,803	$	33,553
Total operating expenses before noncash employee compensation and depreciation and amortization:
Radio	$	10,779	$	13,612	$	14,922	$	5,893	$	7,758
Television		6,960		8,938		11,822		5,240		7,233
Total	$	17,739	$	22,550	$	26,744	$	11,133	$	14,991
Noncash employee compensation:
Radio	$	—	$	1,240	$	1,398	$	817	$	2,453
Television		—		—		—		—		—
Total	$	—	$	1,240	$	1,398	$	817	$	2,453
Depreciation and amortization:
Radio	$	2,132	$	1,964	$	3,678	$	1,492	$	674
Television		2,303		2,673		4,995		1,999		850
Total	$	4,435	$	4,637	$	8,673	$	3,491	$	1,524
Operating income:
Radio	$	6,509	$	11,820	$	11,555	$	6,663	$	7,540
Television		7,734		10,305		11,287		5,699		7,045
Total	$	14,243	$	22,125	$	22,842	$	12,362	$	14,585
EBITDA(1):
Radio	$	8,641	$	15,024	$	16,631	$	8,972	$	10,667
Television		10,037		12,978		16,282		7,698		7,895
Total	$	18,678	$	28,002	$	32,913	$	16,670	$	18,562
Identifiable assets:
Radio	$	5,781	$	8,214	$	30,483	$	33,390	$	30,243
Television		12,270		12,668		16,334		9,194		16,595
Total	$	18,051	$	20,882	$	46,817	$	42,584	$	46,838

(1) We define EBITDA as operating income plus depreciation and amortization and noncash employee compensation. Although EBITDA is not a measure of performance calculated in accordance with accounting principles generally accepted in the U.S., we believe that it is useful in evaluating our operating performance and in comparing us to other companies in our business who report similar measures. However, you should not consider EBITDA in isolation or as a substitute for net income, cash flows from operating activities and other statements of operations or cash flow data prepared in accordance with accounting principles generally accepted in the United States. Moreover, the way in which we calculate EBITDA may differ from that of companies reporting a similarly-named measure.

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Six Months Ended June 30, 2002 Compared to Six Months Ended June 30, 2001

Net Revenues.     Net revenues increased to $33.6 million for the six months ended June 30, 2002 from $27.8 million for the six months ended June 30, 2001, an increase of $5.8 million. This increase was primarily attributable to the performance of our Houston radio and television properties, which were acquired on March 20, 2001.

Net revenues for our radio segment increased to $18.4 million for the six months ended June 30, 2002, from $14.9 million for the six months ended June 30, 2001, an increase of $3.5 million. This increase was largely attributable to the revenue contributed by the Houston radio properties, which we acquired in March 2001.

Net revenues for our television segment increased to $15.1 million for the six months ended June 30, 2002, from $12.9 million for the six months ended June 30, 2001, an increase of $2.2 million. This increase was largely attributable to the performance of our television station in Houston, Texas and to an increase in the amount of advertising sold at KRCA-TV. This increase was offset in part by declining revenues from the leasing of our television production facility, Empire Burbank Studios.

Total operating expenses.     Total operating expenses increased to $19.0 million for the six months ended June 30, 2002, from $15.4 million for the six months ended June 30, 2001, an increase of $3.6 million. The increase was primarily a result of (i) a $3.9 million increase in program and technical, promotional and selling, general and administrative expenses primarily related to our Houston radio and television properties acquired in March 2001, (ii) a $1.6 million increase in noncash employee compensation, and (iii) a $0.7 million increase in depreciation expense in connection with our new Houston radio and television properties. The above increase includes a charge of $0.4 million related to the settlement of certain litigation. These increases were offset by a $2.6 million decrease in amortization expense resulting from the adoption of SFAS 142 under which our broadcast licenses are no longer amortized.

Total operating expenses for our radio segment increased to $10.9 million for the six months ended June 30, 2002, from $8.2 million for the six months ended June 30, 2001, an increase of $2.7 million. This increase was primarily a result of (i) a $1.9 million increase in program and technical, promotional and selling, and general and administrative expenses in connection with our Houston radio properties, (ii) a $0.4 million increase in depreciation expense in connection with our Houston radio properties, and (iii) a $1.6 million increase in noncash employee compensation. The above increase was offset in part by a $1.2 million decrease in amortization expense resulting from the adoption of SFAS 142 under which our broadcast licenses are no longer amortized.

Total operating expenses for our television segment increased to $8.1 million for the six months ended June 30, 2002, from $7.2 million for the six months ended June 30, 2001, an increase of $0.9 million. The increase was primarily a result of a $2.0 million increase in program and technical, promotional and selling, general and administrative expenses and a $0.3 million increase in depreciation. The above increase was offset by a $1.4 million decrease in amortization expense resulting from the adoption of SFAS 142 under which our broadcast licenses are no longer amortized.

Interest expense.     Interest expense decreased to $9.7 million for the six months ended June 30, 2002, from $10.3 million for the six months ended June 30, 2001, a decrease of $0.6 million. The decrease in interest expense was attributable primarily to decreased borrowings under our senior credit facility.

Interest and other income.     Interest and other income decreased to $0.1 million for the six months ended June 30, 2002, from $0.3 million for the six months ended June 30, 2001, a decrease of $0.2 million. The decrease was a result of lower interest rates in the first six months of 2002.

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Net income (loss).     We recognized a net loss of $3.1 million for the six months ended June 30, 2002, compared to net income of $2.3 million for the six months ended June 30, 2001, a difference of $5.4 million. The change in net income was the result of increased income from our Houston radio and television operations, which we commenced in March 2001. That increase in income was offset by our adoption of SFAS 142, which resulted in a noncash charge of $8.1 million during the six months ended June 30, 2002.

EBITDA.     EBITDA increased to $18.6 million for the six months ended June 30, 2002, from $16.7 million for the six months ended June 30, 2001, an increase of $1.9 million. The increase was primarily attributable to the performance of our Houston radio and television properties, which were acquired in March 2001.

Year Ended December 31, 2001 Compared to Year Ended December 31, 2000

Net revenues.     Net revenues increased to $59.7 million for the year ended December 31, 2001 from $50.6 million for the year ended December 31, 2000, an increase of $9.1 million. The increase was attributable to the acquisition in March 2001 of our Houston radio and television properties, the continued growth of our customer base, the increased amount of inventory sold and increased rates for that advertising at our existing stations, and higher rental revenues from our studio operations.

Net revenues for our radio segment increased to $31.6 million for the year ended December 31, 2001, from $28.6 million for the year ended December 31, 2000, an increase of $3.0 million. This increase was primarily attributable to net revenues from our Houston radio properties that we acquired in March 2001.

Net revenues for our television segment increased to $28.1 million for the year ended December 31, 2001, from $21.9 million for the year ended December 31, 2000, an increase of $6.2 million. This growth was attributable to increases in the number of advertisers, the amount of inventory sold and the advertising rates at KRCA-TV, as well as net revenues from our Houston television station that we acquired in March 2001.

Total operating expenses.     Total operating expenses increased to $36.8 million for the year ended December 31, 2001, from $28.4 million for the year ended December 31, 2000, an increase of $8.4 million. This increase was largely attributable to increased depreciation and amortization expense of $4.0 million and increased program and technical, promotional and selling, and general and administrative expenses relating to our new Houston properties. The increase includes $0.3 million in legal expenses related to litigation that we settled in the first quarter of 2002.

Total operating expenses for our radio segment increased to $20.0 million for the year ended December 31, 2001, from $16.8 million for the year ended December 31, 2000, an increase of $3.2 million. This increase resulted primarily from (i) a $1.3 million increase in program and technical, promotional and selling, and general and administrative expenses in connection with our Houston radio properties, (ii) a $1.7 million increase in depreciation and amortization expense in connection with our Houston radio properties, and (iii) a $158,000 increase in noncash employee compensation.

Total operating expenses for our television segment increased to $16.8 million for the year ended December 31, 2001, from $11.6 million for the year ended December 31, 2000, an increase of $5.2 million. The increase was primarily a result of a $2.9 million increase in program and technical, promotional and selling, and general and administrative expenses in connection with our Houston television station, KZJL-TV, and to a lesser extent, additional costs associated with an increase in the production of Spanish-language television programming and a $2.3 million increase in depreciation and amortization expense. These increases include $348,000 in legal expenses related to litigation that we settled in the first quarter of 2002.

Interest expense.     Interest expense increased to $21.4 million for the year ended December 31, 2001, from $6.8 million for the year ended December 31, 2000, an increase of $14.6 million. The increase was a result of increased borrowings under our senior credit facility to finance the acquisition of our Houston radio and television properties.

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Interest and other income.     Interest and other income increased to $0.5 million for the year ended December 31, 2001, from $0.2 million for the year ended December 31, 2000, an increase of $0.3 million. The increase resulted from our higher cash balances in 2001.

Net income.     As a result of the above factors, we recognized net income of $1.8 million for the year ended December 31, 2001, compared to net income of $15.5 million for the year ended December 31, 2000, a decrease of $13.7 million.

EBITDA.     EBITDA increased to $32.9 million for the year ended December 31, 2001, from $28.0 million for the year ended December 31, 2000, an increase of $4.9 million. This growth can be attributed to increased revenue from our radio and television stations in Los Angeles and the acquisition of our Houston properties in March 2001.

Year Ended December 31, 2000 Compared to Year Ended December 31, 1999

Net revenues.     Net revenues increased to $50.6 million for the year ended December 31, 2000 from $36.4 million for the year ended December 31, 1999, an increase of $14.2 million. This increase was largely attributable to the continued growth of our radio and television revenues, which resulted from increased inventory sold by us and increased rates for that inventory.

Net revenues for our radio segment increased to $28.6 million for the year ended December 31, 2000, from $19.4 million for the year ended December 31, 1999, an increase of $9.2 million. This increase was attributable to the growth in the sale of advertising on our radio stations and an increase in our advertising rates.

Net revenues for our television segment increased to $21.9 million for the year ended December 31, 2000, from $17.0 million for the year ended December 31, 1999, an increase of $4.9 million. This increase was attributable to increased inventory sales and increased rates for that inventory during our Spanish-language programming, as well as increased rates for our Spanish infomercial inventory.

Total operating expenses.     Total operating expenses increased to $28.4 million for the year ended December 31, 2000, from $22.2 million for the year ended December 31, 1999, an increase of $6.2 million. This increase was primarily attributable to the inclusion of our Empire Burbank Studios for a full year of operations, increased noncash compensation expense, and increased program and technical, promotional and selling, and general and administrative expenses associated with higher revenues.

Total operating expenses for our radio segment increased to $16.8 million for the year ended December 31, 2000, from $12.9 million for the year ended December 31, 1999, an increase of $3.9 million. This increase was primarily a result of a $2.8 million increase in program and technical, promotional and selling, and general and administrative expenses in connection with our increased revenues and our continued enhancements to programming content and a $1.2 million increase in noncash employee compensation. The above increase was offset by slight decreases in amortization expense.

Total operating expenses for our television segment increased to $11.6 million for the year ended December 31, 2000, from $9.3 million for the year ended December 31, 1999, an increase of $2.3 million. This increase was a result of our continued expansion of KRCA-TV’s Spanish-language programming and the expansion of our marketing and promotional staff consistent with revenue growth generated by that station’s operations.

Interest expense.     Interest expense increased to $6.8 million for the year ended December 31, 2000, from $6.6 million for the year ended December 31, 1999, an increase of $200,000. This increase was primarily a result of the full year impact of additional debt incurred in 1999 to finance the acquisition of our Empire Burbank Studios.

Interest and other income.     Interest and other income remained relatively unchanged at $0.2 million for the years ended December 31, 2000 and December 31, 1999.

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Net income.     As a result of the above factors, we recognized net income of $15.5 million for the year ended December 31, 2000, compared to net income of $7.8 million for the year ended December 31, 1999, an increase of $7.7 million. This increase resulted from the growth in net revenues from both our radio and television stations.

EBITDA.     EBITDA increased to $28.0 million for the year ended December 31, 2000, from $18.7 million for the year ended December 31, 1999, an increase of $9.3 million. This increase reflects the growth of our radio and television stations as described above.

Liquidity and Capital Resources

Our primary sources of liquidity are cash provided by operations and available borrowings under our $170.0 million senior credit facility. Amounts available under the senior credit facility will begin decreasing quarterly, commencing in June 30, 2005. The senior credit facility bears interest at floating rates and matures on September 30, 2009. As of June 30, 2002, after giving effect to the offering of the old notes and the refinancing of our senior credit facility, we had approximately $74.0 million outstanding under the senior credit facility and approximately $86.0 million of available committed borrowing capacity. On August 12, 2002, we paid $4.0 million aggregate principal amount on the senior credit facility. On August 16, 2002, the lenders under our senior credit facility agreed to increase our borrowing capacity by $10.0 million to its current $170.0 million level. Giving effect to these changes, we would have had $100.0 million of available committed borrowing capacity under our senior credit facility, subject to the restrictions on incurrence of indebtedness in the indenture governing the notes. We may increase the senior credit facility by an additional $30.0 million, subject to participation by our existing lenders or new lenders acceptable to the administrative agent under the senior credit facility and subject to restrictions in the indenture relating to the exchange notes. See “Description of Other Indebtedness—Senior Credit Facility.”

The senior credit facility contains customary restrictive covenants that, among other things, limit our ability to incur additional indebtedness and liens in connection therewith, pay dividends and make capital expenditures above certain limits. Under the senior credit facility, we must also maintain specified financial ratios, such as a maximum total leverage ratio, a maximum senior leverage ratio, a minimum ratio of EBITDA (as defined in the senior credit agreement) to interest expense and a minimum ratio of EBITDA (as defined in the senior credit agreement) to fixed charges.

In March 2001, our parent issued $30.0 million principal amount of 9% subordinated notes. In connection with the offering of the old notes, we modified certain terms in the subordinated note agreement and other related agreements. As so amended, the 9% subordinated notes are subordinate in right of payment to the senior credit facility and the exchange notes. The 9% subordinated notes will mature on July 9, 2013. Interest is not payable until maturity. In connection with these 9% subordinated notes, our parent also issued warrants to purchase shares of its common stock. See “Description of Other Indebtedness—9% Subordinated Notes due 2013.”

In March 2001, LBI Intermediate issued $40.0 million aggregate principal amount of 21% subordinated notes to a group of investors led by Oaktree Capital Management, LLC. On July 9, 2002, we loaned LBI Intermediate approximately $54.3 million pursuant to an intercompany note, the proceeds of which were used to repay the Oaktree subordinated notes. After repayment of the Oaktree subordinated notes, LBI Intermediate merged with and into us. As a result of the merger, the intercompany note was canceled.

Our wholly owned subsidiary, Empire Burbank Studios, borrowed $3.25 million from City National Bank in July 1999, of which approximately $2.9 million was outstanding as of June 30, 2002. To secure that borrowing on a non-recourse basis, Empire Burbank Studios executed a mortgage on its property in Burbank, California in favor of City National Bank as security for the loan. The loan bears interest at 8.13% per annum. It is payable in monthly principal and interest payments of $32,000 through maturity in August 2014. See “Description of Other Indebtedness—Empire Burbank Loan.”

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Cash and cash equivalents were $2.1 million at June 30, 2002 and $1.1 million at December 31, 2001.

Net cash flow provided by operating activities was $6.3 million and $12.4 million for the six months ended June 30, 2002 and 2001, respectively, and $14.3 million for the fiscal year ended December 31, 2001. The decrease in our net cash flow provided by operating activities was primarily the result of an increase in receivables and television program purchases.

Net cash flow used in investing activities was $2.3 million and $102.9 million for the six months ended June 30, 2002 and 2001, respectively, and $108.7 million for the year ended December 31, 2001. Net cash flow used in investing activities primarily reflects $2,000, $94.7 million and $94.7 million, respectively, in cash used for acquisitions of selected radio and television assets we completed in these periods and capital expenditures of $1.5 million, $8.2 million and $14.0 million, respectively.

Net cash flow used in financing activities was $3.0 million for the six months ended June 30, 2002, and net cash flow provided by financing activities was $100.5 million for the six months ended June 30, 2001 and $95.0 million for the year ended December 31, 2001. Net cash flow provided by financing activities primarily reflects borrowings under our debt agreements and contributions and distributions between us and our parent.

We have certain cash obligations and other commercial commitments, which will impact our short and long term liquidity. At July 9, 2002, after giving effect to the financings and refinancings that took place, such obligations and commitments were the senior credit facility, the 10-1/8% senior subordinated notes and operating leases as follows:

			Payments due by Period from June 30, 2002
Contractual Obligations	Total		Less than 1 year		1-3 years		3-5 years		After 5 years
Long term debt	$	226,900,082	$	147,938	$	522,619	$	426,406	$	225,803,119
Operating leases		4,744,437		597,344		1,295,475		849,621		2,001,997
Total contractual cash obligations	$	231,644,519	$	745,282	$	1,818,094	$	1,276,027	$	227,805,116

The above table excludes the debt of our parent and any deferred compensation amounts we may ultimately pay. See Notes 6 and 7 to our consolidated financial statements included elsewhere in this prospectus.

We have used, and expect to continue to use, a significant portion of our capital resources to consummate acquisitions. Future acquisitions will be funded from amounts available under our senior credit facility, the proceeds of future equity or debt offerings and our internally generated cash flows. We currently anticipate that funds generated from operations and available borrowings under our senior credit facility will be sufficient to meet our anticipated cash requirements for the foreseeable future.

Inflation

We believe that inflation has not had a material impact on our results of operations for each of our fiscal years in the three-year period ended December 31, 2001. However, there can be no assurance that future inflation would not have an adverse impact on our operating results and financial condition.

Seasonality

Seasonal net revenue fluctuations are common in the television and radio broadcasting industry and result primarily from fluctuations in advertising expenditures by local and national advertisers. Our first fiscal quarter generally produces the lowest net broadcast revenue for the year.

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Market Risk

Our exposure to market risk is currently confined to our cash and cash equivalents and changes in interest rates related to borrowings under our senior credit facility. Because of the short-term maturities of our cash and cash equivalents, we do not believe that an increase in market rates would have any significant impact on the realized value of our investments, but it may negatively impact the interest expense associated with our senior credit facility debt. We currently do not hedge interest rate exposure and are not exposed to the impact of foreign currency fluctuations.

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to allowance for doubtful accounts, acquisitions of radio station and television station assets, intangible assets, deferred compensation and commitments and contingencies. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We believe the following accounting policies and the related judgments and estimates affect the preparation of our consolidated financial statements.

Acquisitions of radio station and television assets

Our radio and television station acquisitions have consisted primarily of the FCC licenses to broadcast in a particular market (broadcast license). We generally acquire the existing format and change it upon acquisition. As a result, a substantial portion of the purchase price for the assets of a radio or television station is allocated to the broadcast license. The allocations assigned to acquired broadcast licenses and other assets are subjective by their nature and require our careful consideration and judgment. We believe the allocations represent appropriate estimates of the fair value of the assets acquired.

Allowance for bad debt

We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. A considerable amount of judgment is required in assessing the likelihood of ultimate realization of these receivables including the current creditworthiness of each advertiser. If the financial condition of our advertisers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.

Intangible assets

Under the Financial Accounting Standards Board’s new rules (Statement of Accounting Standard (“SFAS”) No. 141, “Business Combinations”, and SFAS No. 142, “Goodwill and Other Intangible Assets”), we no longer amortize intangible assets deemed to have indefinite lives. Instead, SFAS 142 requires that we review intangible assets with indefinite lives for impairment at least annually. We believe our broadcast licenses have indefinite lives under SFAS 142 and, accordingly, amortization expense is no longer recorded effective January 1, 2002.

Upon adoption of SFAS 142 in the first quarter of 2002, we recorded a non-cash charge of approximately $8.1 million to reduce the carrying value of certain of our broadcast licenses. In calculating the impairment charge, we utilized fair values of our broadcast licenses as determined by third party appraisals.

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Deferred compensation

We and our parent have entered into employment agreements with certain employees. The services required under the employment agreements are rendered to us and our subsidiaries and we pay amounts due under the employment agreements. Accordingly, we reflect amounts due under the employment agreements in our financial statements. In addition to annual compensation and other benefits, these agreements provide the executives with the ability to participate in the increase of the “net value” of our parent over certain base amounts. As part of the calculation of this incentive compensation, we engage third-party appraisers to determine the “net value” of our parent. Our management reviews these reports for reasonableness. Based on the “net value” of our parent as determined in these reports, and based on the percentage of incentive compensation that has vested (as set forth in the employment agreements), we record noncash employee compensation expense (and a corresponding deferred compensation liability).

Commitments and contingencies

We periodically record the estimated impacts of various conditions, situations or circumstances involving uncertain outcomes. These events are called “contingencies,” and our accounting for such events is prescribed by SFAS No. 5, “Accounting for Contingencies.”

The accrual of a contingency involves considerable judgment on the part of our management. We use our internal expertise, and outside experts (such as lawyers), as necessary, to help estimate the probability that a loss has been incurred and the amount (or range) of the loss. We currently do not have any material contingencies that we believe requires accrual or disclosure in our consolidated financial statements.

Recent Accounting Pronouncements

In June 2001, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 141, “Business Combinations,” and SFAS No. 142, “Goodwill and Other Intangible Assets,” effective for fiscal years beginning after December 15, 2001. The adoption of SFAS 141 did not have a material impact on our financial position or results of operations. As described above, under SFAS 142, we no longer amortize intangible assets deemed to have indefinite lives.

In August 2001, the FASB issued SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” SFAS No. 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets. This statement requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. SFAS No. 144 requires companies to separately report discontinued operations and extends that reporting to a component of an entity that either has been disposed of (by sale, abandonment, or in a distribution to owners) or is classified as held for sale. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. We adopted SFAS No. 144 on January 1, 2002. The adoption of the new standard did not have a material impact on our results of operations or financial position.

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BUSINESS

Overview

We are the largest privately-held, Spanish-language broadcaster in the United States based on revenues. Our strategy is to own and operate radio and television stations in the nation’s largest and most densely populated Hispanic markets. To this end, we have created radio and television clusters in Los Angeles and Houston, the #1 and #4 Hispanic markets in the United States, respectively, based on television households. We are the only Spanish-language broadcaster currently operating both radio and television assets in these markets. Our Los Angeles cluster consists of four Spanish-language radio stations (three FM and one AM), one time-brokered AM station and a full-power television station. Our Houston cluster, after giving effect to our pending acquisitions, consists of seven Spanish-language radio stations (five FM and two AM), two time-brokered AM stations and a full-power television station. We also own a low-power television station serving San Diego, the fourteenth largest Hispanic market in the United States and an important market along the U.S. and Mexican border. In addition, we operate a television production facility, Empire Burbank Studios, in Burbank, California which we primarily utilize to produce cost-effective programming for our television stations.

We were founded in 1987 by Jose and Lenard Liberman, father and son, who together have over 50 years of operating experience in the broadcasting industry. Jose Liberman is considered an industry pioneer having owned and operated the first Spanish-language FM station in the Los Angeles market in the mid-1970s. Lenard Liberman manages our day-to-day operations and, together with his father, has primary responsibility for our strategic direction. In addition, we have assembled a management team of well-respected industry veterans to direct our sales and programming efforts. Since our founding, we have successfully developed nine Spanish-language, start-up radio and television stations through a combination of reformatting existing stations and implementing strict cost controls and effective sales and marketing initiatives. Generally, our Spanish-language start-up stations have generated positive cash flow within six months of our management team assuming control of the station’s operations.

Our primary focus has been to acquire and develop radio and television properties in U.S. markets with a high concentration of Hispanics. We seek to increase our revenue and cash flow in those markets through focused programming, creative promotion and targeted marketing tailored to the local advertising community. As a result of the successful execution of this strategy, from 1997 through 2001 our net revenues grew from $18.5 million to $59.7 million, a compound annual growth rate, or CAGR, of 34.0%, and our EBITDA grew from $7.3 million to $32.9 million, a CAGR of 45.7%. Additionally, we have been able to sustain industry-leading EBITDA margins in excess of 50% for each of the last four fiscal years through our disciplined operating strategy and use of cost-effective programming.

Business Strategy

We seek to expand within the growing U.S. Hispanic market by pursuing the following strategy.

Capitalize on our complementary radio and television stations

By owning both Spanish-language radio and television stations in the markets we serve, we have been able to create substantial cross-selling and cross-promotion opportunities. This allows us to effectively compete for a significant portion of an advertiser’s Hispanic budget since advertisers have historically spent over 80% of their Hispanic budget on radio and television.

Offer radio and television packages to advertisers.    We are the only Spanish-language broadcaster in the Los Angeles and Houston markets currently offering both radio and television advertising packages. Our strategy is to offer the benefits of one medium to complement the sale of the other. Specifically, we offer our advertisers the opportunity to cross-advertise on radio and television, as well as to cross-merchandise through product integration.

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Cross-promote our radio and television stations.    We utilize a portion of our spot inventory time at both our radio and television stations to run advertisements promoting our other stations and programs. This cross-promotion helps us capitalize on the strong ratings and targeted audience of our stations with no incremental cash outlay. In addition, we utilize our radio and television stations to create complementary programs that attract our radio listeners to our television programs and our television viewers to our radio stations. For example, in Los Angeles and Houston, we produce music variety television shows hosted by our radio station disc jockeys that feature music industry news, interviews and videos of songs played on our popular Que Buena and La Raza radio stations.

Target the local community

Not all Spanish-speaking people have the same, or even similar, cultural and ethnic backgrounds. As a result, we create radio and television programming specifically tailored to the preferences of the Hispanic population in each of our coverage areas. We believe we are particularly skilled at programming to the tastes and preferences of the Hispanics of Mexican heritage that comprise 75% and 73% of the Hispanic populations in Los Angeles and Houston, respectively. We believe our ability to produce locally-targeted programming gives us a distinct advantage over most other Spanish-language broadcasters that develop and distribute their programming on a national or regional basis. As a result, we have generally been able to achieve and maintain strong station ratings in our markets. We are the #2-ranked Spanish-language radio group in both Los Angeles and Houston according to the Arbitron 2002 winter survey.

Develop a diverse local advertiser base

Consistent with our locally-targeted programming strategy, we have focused our sales strategy around the local advertising community. As a result, local advertising accounted for approximately 88% of our gross revenue in 2001. The advantages of our locally-focused sales strategy include:

• Our cash flows have been relatively more recession resistant because local advertising has historically been less cyclical than national advertising;

• Our cash flows have been generally less vulnerable to ratings fluctuations as a result of our strong relationships with our advertisers; and

• Our large and diverse client base results in no single advertiser accounting for more than 5% of our net revenues.

Offer cost-effective advertising and value-added services to our advertisers

We believe that we differentiate ourselves from other Spanish-language broadcasters by offering advertisers the greatest value for their advertising dollar. We support advertisers’ media campaigns with creative promotions utilizing our radio and television clusters and offer our studio facilities to provide value-added services such as free commercial production. As a result, we have been able to significantly increase our advertiser base.

Utilize cost-effective television programming

Our television programming consists of internally produced and purchased programming, which, when combined with our brokered airtime, creates an efficient programming line-up for our television stations. Because we own and operate in-house television production facilities, we are able to create programming, such as our popular talk shows Jose Luis Sin Censura and El Show de Maria Laria, at a very low cost. In addition, we realize programming synergies between our radio and television assets by sharing content between the two mediums to create programs that utilize our radio formats and on-air radio personalities. Furthermore, we supplement our internally produced programming with purchased programs, primarily Spanish-language movies, which we obtain from numerous producers in Latin America.

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Acquire and develop start-up Spanish-language stations

We have a proven track record of acquiring and developing radio and television assets and then implementing changes and procedures that have resulted in substantial ratings and net revenues. For example, we acquired our Los Angeles television station KRCA-TV in 1998 and Empire Burbank Studios in 1999 and we grew net revenues at these facilities at a CAGR of 35% from 1998 through 2001. Similarly, we grew net revenues at our radio station, KBUE-FM/KBUA-FM, at a CAGR of 24% from 1997 (the year we first began simulcasting the station) through 2001. This station is now among the top three rated Spanish-language radio stations in Los Angeles according to the Arbitron 2002 winter survey.

Hispanic Market Opportunity

We believe that the Hispanic community represents an attractive market for future growth. As a result, we seek to own media assets in the most densely populated and fastest growing Hispanic markets in the United States. The U.S. Hispanic population is growing at approximately six times the rate of the non-Hispanic U.S. population and, as such, is the fastest growing segment of the U.S. population. According to the U.S. Census Bureau, the Hispanic sector, which is currently 13% of the total U.S. population, will be the largest minority group by the end of 2002 and is projected to reach 43.7 million (or 15% of the total U.S. population) by 2010. People of Mexican origin currently represent 59% of the U.S. Hispanic population and 75% and 73% of the Hispanic populations in Los Angeles and Houston, respectively. Moreover, 30% of all Spanish-language radio and television advertising is spent in Los Angeles and Houston, which together represent 23% of the total U.S. Hispanic population.

Advertisers have recently begun to direct more advertising dollars towards U.S. Hispanics and, consequently, Spanish-language radio and television advertising has grown at more than twice the rate of total radio and television advertising from 1997 to 2001. Spanish-language advertising rates have been rising faster in recent years when compared to the general media, yet Spanish-language rates are still lower than those for English-language media. As advertisers continue to recognize the buying power of the U.S. Hispanic population, especially in areas where the concentration of Hispanics is very high and where a significant percentage of the retail purchases are made by Hispanic customers, the gap in advertising rates between Spanish-language and English-language media is expected to narrow. As U.S. Hispanic consumer spending continues to grow relative to overall consumer spending, industry analysts expect that advertising expenditures targeted to Hispanics will increase significantly, eventually closing the gap between the current level of advertising targeted to Hispanics and the buying power that the Hispanic population in the U.S. represents. We believe we are well positioned to capitalize on these attractive fundamentals given the concentration of the Hispanic population in certain markets, our position in the Los Angeles and Houston markets and our proven ability to execute our acquisition strategy in new markets.

Recent Developments

Pending Acquisition of KQQK-FM and KEYH-AM, Houston, Texas.    Pursuant to two asset purchase agreements dated as of April 5, 2002 with El Dorado Communications, Inc. and certain of its affiliates (“El Dorado”), we have agreed to acquire selected assets of radio stations KQQK-FM and KEYH-AM in the Houston, Texas market for an aggregate purchase price of approximately $30.0 million in cash. We believe that these two stations will strengthen our Houston cluster by offering additional Spanish-language formats in the market at very little incremental operating cost. El Dorado currently owns KQQK-FM and has exercised an option to purchase KEYH-AM. El Dorado has operated KEYH-AM under time brokerage agreements since 1995. If El Dorado has not successfully acquired KEYH-AM from its current owner or other conditions to the KEYH-AM acquisition have not been satisfied prior to our closing of the KQQK-FM acquisition, our purchase price will be decreased from $30.0 million to $23.0 million and we will only purchase the assets of KQQK-FM. However, after the KQQK-FM acquisition, if all of the conditions to the acquisition of KEYH-AM are satisfied, we will purchase KEYH-AM for a purchase price of $7.0 million. On May 20, 2002, we began to operate KQQK-FM

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and KEYH-AM under two time brokerage agreements. Since that date, we have significantly changed the format, revenue stream, customer base and employee base of these stations. Subject to customary closing conditions, we expect to complete these acquisitions during the second half of 2002.

Pending Acquisition of KIOX-FM and KXGJ-FM, El Campo and Bay City, Texas.    On June 21, 2002, we entered into an agreement to acquire selected assets of KIOX-FM and KXGJ-FM licensed to El Campo and Bay City, Texas, respectively, for an aggregate purchase price of $3.2 million. Subject to customary closing conditions, including receipt of final regulatory approval, we expect to complete the acquisition during the second half of 2002.

Non-binding Letter of Intent.    We are currently engaged in negotiations to acquire the broadcast assets of three radio stations for a total consideration in excess of $40.0 million. We have entered into a non-binding letter of intent with respect to this acquisition, but do not yet have a definitive agreement signed.

Recent Results of Our 2001 Houston Acquisitions.    In March 2001, we purchased selected assets of our radio stations KTJM-FM, KJOJ-FM, KQUE-AM, KJOJ-AM and KSEV-AM and our television station KZJL-TV in the Houston, Texas market. In July 2001, we began airing Spanish-language programming on our radio stations KTJM-FM, KJOJ-FM and KQUE-AM and our television station KZJL-TV. Since that time, these stations have experienced significant growth in ratings and net revenues. In the Arbitron 2002 winter survey, our Houston Spanish-language radio stations captured a combined 4.1 rating, a 78% increase over their combined 2.3 rating in the Arbitron 2001 summer survey. For the six months ended June 30, 2002, our Houston radio and television stations, including our time brokered stations, generated a combined $7.5 million of net revenues.

Merger with LBI Intermediate.    On July 9, 2002, we loaned LBI Intermediate approximately $54.3 million evidenced by an intercompany note, which amount equaled the aggregate amount of principal and accrued but unpaid interest and the redemption premium and other obligations then outstanding under the Oaktree subordinated notes. LBI Intermediate used the proceeds of our loan to redeem the Oaktree subordinated notes and to pay all other obligations thereunder. After repayment of the Oaktree subordinated notes, LBI Intermediate merged with and into us. The intercompany note issued by LBI Intermediate to us was canceled as a result of the merger.

Our Markets

The following table sets forth certain demographic information about the markets in which our radio and television stations operate.

Market	Total Population	Hispanic Population	% Hispanic Population		% Hispanic Population of Mexican Descent		Hispanic Population Growth (3)
Los Angeles(1)	16,373,645	6,598,488	40	%	75	%	38	%
Houston(2)	4,669,571	1,348,588	29	%	73	%	75	%
San Diego County	2,813,833	750,965	27	%	84	%	47	%
Total U.S. (for comparison)	281,421,906	35,305,818	13	%	59	%	58	%

Source: United States Census 2000

(1) Represents the Los Angeles consolidated metropolitan statistical area.

(2) Represents the Houston consolidated metropolitan statistical area.

(3) Represents growth from 1990 to 2000.

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Our Radio and Television Stations

The following tables set forth certain information about our radio and television stations and their broadcast markets.

Radio Stations

Market/Station(1)	DMA Rank(2)	Hispanic Market Rank(3)	Frequency	Format	Station Audience Share(4)	Rank Among Spanish-language Radio Groups in DMA
Los Angeles	2	1
KBUE-FM/KBUA-FM(5)			105.5/94.3	Norteña	2.7
KHJ-AM			930	Ranchera	1.0
KWIZ-FM			96.7	Sonidero, Cumbia	0.8
KVNR-AM			1480	Time Brokered	—
Total					4.5	2
Houston(6)	11	4
KTJM-FM/KJOJ-FM(7)			98.5/103.3	Norteña	3.1
KQQK-FM(8)			107.9	Spanish Pop	1.0
KQUE-AM			1230	Ranchera	1.0
KEYH-AM(8)			850	Sonidero, Cumbia	0.2
KSEV-AM			700	Time Brokered	1.8
KJOJ-AM			880	Time Brokered	—
Total					7.1	2

(1) Our radio stations are in some instances licensed to communities other than the named principal community for the market.

(2) Represents rank among U.S. designated market areas.

(3) Represents rank among U.S. Hispanic markets by Hispanic television households.

(4) Source: Arbitron 2002 winter survey.

(5) KBUA-FM simulcasts the signal of KBUE-FM in the San Fernando Valley.

(6) We have entered into an agreement to acquire selected assets of KIOX-FM and KXGJ-FM, but we do not currently operate these stations. See “—Recent Developments.”

(7) KJOJ-FM simulcasts the signal of KTJM-FM.

(8) Our acquisition of selected assets of these stations from El Dorado Communications, Inc. and certain of its affiliates is pending. We have been operating these stations under local marketing agreements since May 20, 2002 and have changed the stations’ formats.

Television Stations

Station	Channel	Market	DMA Rank(1)	Hispanic Market Rank(2)	Number of Hispanic TV Households
KRCA-TV	62	Los Angeles	2	1	1,573,400
KZJL-TV	61	Houston	11	4	415,440
KSDX-LP	29	San Diego	26	14	191,820

Source:    Nielsen Media Research, January, 2002

(1) Represents rank among U.S. designated market areas.

(2) Represents rank among U.S. Hispanic markets by Hispanic TV households.

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Programming

Radio.    In programming our Spanish-language radio stations, we target the Spanish-speaking portion of the Hispanic population that is dominant in the local markets in which we operate. We tailor the format of each of our radio stations to reach a specific target demographic in the market in order to maximize our overall listener base without causing direct format competition among our stations. We determine the optimal format for each of our stations based upon extensive local market research. To create brand awareness and loyalty in the local community, we enhance our programming by sending disc jockeys to participate in local promotional activities called “live remotes” that are broadcast from special events or client locations. These types of activities also provide attractive promotional and advertising opportunities for our clients.

The following provides a description of our Spanish-language radio stations:

• KBUE-FM/KBUA-FM (Que Buena) plays contemporary, up-tempo, regional Mexican music that includes Norteña, Banda, Corrido and Ranchera music. The target audience for this station is adult listeners aged 18 to 49.

• KHJ-AM (La Ranchera) plays traditional Ranchera, also known as Mariachi music. The target audience for this station is adult listeners aged 25 to 49.

• KWIZ-FM (Sonido) plays music similar in style to Salsa. The target audience for this station is adult listeners aged 18 to 49.

• KTJM-FM/KJOJ-FM (La Raza) plays contemporary, up-tempo, regional Mexican music, similar to the music played on Que Buena, that includes Norteña, Banda, Corrido and Ranchera music. The target audience for this station is adult listeners aged 18 to 49.

• KQUE-AM (Radio Ranchito) plays traditional and contemporary Norteña and Ranchera music. The target audience for this station is adult listeners aged 25 to 49.

• KQQK-FM (XO) plays contemporary, up-tempo, Spanish pop music. The target audience for this station is adult listeners aged 18 to 49. We currently operate this station under a local marketing agreement.

• KEYH-AM (La Ranchera) plays music similar in style to Salsa. The target audience for this station is adult listeners aged 18 to 49. We currently operate this station under a local marketing agreement.

Three of our radio stations are operated by third parties under time brokered agreements. Our time brokered stations are a source of stable cash flow given that they are typically operated under long-term contracts with annual price escalators and that we do not incur any of the programming costs associated with these stations. We constantly review our mix of Spanish-language and time brokered programming with the objective of optimizing cash flow at every station. Currently, stations KVNR-AM in the Los Angeles market and KJOJ-AM in the Houston market broadcast Vietnamese-language programming. Los Angeles and Houston represent the #1 and #3 largest Vietnamese markets, respectively, in the United States. Station KSEV-AM in Houston broadcasts an English-language talk format.

Television.    We currently air thirteen hours of Spanish-language programming each day on KRCA-TV in Los Angeles and eleven hours on KZJL-TV in Houston. Our daytime programming content consists primarily of internally-produced programs such as our live morning show, single topic talk shows, local news, and music variety shows, as well as purchased programs including Spanish-language movies. We own or have the rights to a library of more than 3,200 hours of Spanish-language movies, children’s shows and other programming content available for broadcast on our television stations.

Similar to our radio programming strategy, we seek to maximize our television group’s profitability by broadcasting Spanish-language programming and selling infomercial and time brokered airtime. As a result, when we are not airing our Spanish-language programming, we sell our airtime to infomercial advertisers and purchasers of block programming time. Our brokered time slots represent attractive cash flow opportunities given that they are typically programmed by third parties under long-term contracts with annual price escalators and that we do not incur any of the associated programming costs. We currently program our station KSDX-LP

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in San Diego primarily through the sale of brokered programming. However, we intend to program our San Diego station with Spanish-language programming from our Los Angeles television station master control facilities beginning in the fourth quarter of 2002. We constantly review our mix of Spanish-language, infomercial and time brokered programming with the objective of optimizing cash flow in every programming period of a station.

Production Facilities

We own Empire Burbank Studios, a fully-equipped television production complex next to our offices in Burbank, California. The studio provides us with all of the physical facilities needed to produce our own Spanish-language television programming without the variable expense of renting the services from an outside vendor. As a result, we are able to produce our programming at a very low cost as compared to our competitors. We currently produce the following highly-rated Spanish-language programs at our Burbank facilities:

• Noticas 62 En Vivo:    our local Los Angeles news anchored by Emmy award winning Jesús Javier that airs on KRCA-TV every weekday from 12:00 PM to 12:30 PM and from 5:00 PM to 6:00 PM;

• Los Angeles En Vivo: a local live talk show for Los Angeles viewers hosted by Penelope Menchaca that airs on KRCA-TV every weekday from 12:30 PM to 1:00 PM;

• El Show de Maria Laria:    a talk show hosted by Emmy award winning Maria Laria that airs on KRCA-TV every weekday from 3:00 PM to 4:00 PM and on KZJL-TV every weekday from 3:00 PM to 4:00 PM;

• Que Buena TV: a music-oriented variety show centered around the music played by our KBUE-FM and KBUA-FM radio stations that airs on KRCA-TV every weekday from 4:00 PM to 5:00 PM; and

• José Luis Sin Censura: a fast-paced talk show hosted by well-known Spanish television personality José Luis Gonzáles that airs on KRCA-TV every weekday from 6:00 PM to 7:00 PM and on KZJL-TV every weekday from 5:00 PM to 6:00 PM.

In addition, we produce La Raza TV, a music-oriented variety show centered around the music played by our KTJM-FM/KJOJ-FM radio station, on location in Houston. The show airs on KZJL-TV every weekday from 4:00 PM to 5:00 PM.

We sell our two locally-produced talk shows, El Show de Maria Laria and José Luis Sin Censura, to independent broadcasters outside of our markets which allows us to recoup a portion of the production costs for these shows. We also lease a portion of our Empire Burbank Studios to third parties which offsets a portion of the cost associated with the facility.

Sales and Advertising

The significant majority of our net revenues are generated from the sale of local and national advertising for broadcast on our radio and television stations. Local sales are made by our sales staffs located in Los Angeles and Houston. National sales are made by our national sales representative, Spanish Media Rep Team, Inc., an affiliate of the shareholders of our parent, in exchange for a commission from us that is based on a percentage of our net revenues from the advertising obtained. Approximately 88% of our gross revenues for the year ended December 31, 2001 were generated from the sale of local advertising and approximately 12% from sales to national advertisers. We believe local advertising represents a more stable revenue source than national advertising because local advertising tends to fluctuate less with trends in the economy.

We believe that advertisers can reach the Hispanic community more cost effectively through radio and television broadcasting than through printed advertisements. Advertising rates charged by radio and television stations are based primarily on:

• A station’s audience share within the demographic groups targeted by the advertisers;

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• The number of radio and television stations in the market competing for the same demographic groups; and

• The supply and demand for radio and television advertising time.

A radio or television station’s listenership or viewership is reflected in ratings surveys that estimate the number of listeners or viewers tuned to the station. Each station’s ratings are used by its advertisers to consider advertising with the radio or television station and are used by us to, among other things, chart audience growth, set advertising rates and adjust programming.

Competition

Radio and television broadcasting are highly competitive businesses. The financial success of each of our radio and television stations depends in large part on our audience ratings, our ability to increase our market share of the available advertising revenue and the economic health of the market. In addition, our advertising revenue depends upon the desire of advertisers to reach our audience demographic.

Our Spanish-language radio stations compete against other Spanish-language radio stations in their markets for audiences and advertising revenue. In Los Angeles, our radio stations compete primarily against Hispanic Broadcasting Corporation, Spanish Broadcasting Systems, Inc. and Entravision Communications Corporation, three of the largest Hispanic group radio station operators in the United States. In Houston, our radio stations compete primarily against Hispanic Broadcasting Corporation.

Our television stations compete against Univision Communications Inc., Telemundo Communications Group, Inc. and TV Azteca S.A. de C.V. for audiences and advertising revenue in both the Los Angeles and Houston markets.

Two of our competitors, Univision Communications, Inc. and Hispanic Broadcasting Corporation, recently announced an agreement to merge. Upon consummation of the merger, the combined company, which will have resources substantially greater than ours, will be our first cross-media competitor in Los Angeles and Houston.

Employees

As of June 30, 2002, we had approximately 325 employees, of which approximately 273 were full-time employees. We had approximately 138 full-time employees in television and approximately 135 full-time employees in radio. None of our employees are represented by labor unions and we have not entered into any collective bargaining agreements. We believe that our relations with our employees are good.

Properties and Facilities

The types of properties required to support our radio and television stations include offices, studios and transmitter and antenna sites. Through our wholly owned subsidiary, we own studio and office space at 1845 West Empire Avenue, Burbank, California 91504. This property is subject to a mortgage in favor of City National Bank, with whom our subsidiary has entered into a loan agreement. See “Description of Other Indebtedness—Empire Burbank Loan.” We also own an office building in Houston, Texas for our operations there. We own a number of our transmitter and antenna sites and lease or license the remainder from third parties. We generally select our tower and antenna sites to provide maximum market coverage. In general, we do not anticipate difficulties in renewing these site leases. No single facility is material to us and we believe our facilities are generally in good condition and suitable for our operations.

Legal Proceedings

From time to time, we are involved in litigation incidental to the conduct of our business, but we are not currently a party to any material lawsuit or proceeding against us.

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REGULATION OF TELEVISION AND RADIO BROADCASTING

General

The FCC regulates television and radio broadcast stations pursuant to the Communications Act. Among other things, the FCC:

• determines the particular frequencies, locations and operating power of stations;

• issues, renews, revokes and modifies station licenses;

• regulates equipment used by stations; and

• adopts and implements regulations and policies that directly or indirectly affect the ownership, changes in ownership, control, operation and employment practices of stations.

A licensee’s failure to observe the requirements of the Communications Act or FCC rules and policies may result in the imposition of various sanctions, including admonishment, fines, the grant of renewal terms of less than eight years, the grant of a license with conditions or, in the case of particularly egregious violations, the denial of a license renewal application, the revocation of an FCC license or the denial of FCC consent to acquire additional broadcast properties.

Congress and the FCC have had under consideration or reconsideration, and may in the future consider and adopt, new laws, regulations and policies regarding a wide variety of matters that could, directly or indirectly, affect the operation, ownership and profitability of our television and radio stations, result in the loss of audience share and advertising revenue for our television and radio broadcast stations or affect our ability to acquire additional television and radio broadcast stations or finance such acquisitions. Such matters may include:

• changes to the license authorization and renewal process;

• proposals to impose spectrum use or other fees on FCC licensees;

• changes to the FCC’s equal employment opportunity regulations and other matters relating to involvement of minorities and women in the broadcasting industry;

• proposals to change rules relating to political broadcasting including proposals to grant free air time to candidates;

• proposals to restrict or prohibit the advertising of beer, wine and other alcoholic beverages;

• technical and frequency allocation matters, including a new Class A television service for existing low-power television stations and a new low-power FM radio broadcast service;

• the implementation of digital audio broadcasting on both satellite and terrestrial bases;

• the implementation of rules governing the transmission of local television signals by direct broadcast satellite services in their local areas, and requiring cable television and direct broadcast satellite to carry local television digital signals;

• changes in broadcast multiple ownership, foreign ownership, cross-ownership and ownership attribution policies; and

• proposals to alter provisions of the tax laws affecting broadcast operations and acquisitions.

We cannot predict what changes, if any, might be adopted, nor can we predict what other matters might be considered in the future, nor can we judge in advance what impact, if any, the implementation of any particular proposal or change might have on our business.

FCC Licenses

Television and radio stations operate pursuant to licenses that are granted by the FCC for a term of eight years, subject to renewal upon application to the FCC. During the periods when renewal applications are

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pending, petitions to deny license renewal applications may be filed by interested parties, including members of the public. The FCC may hold hearings on renewal applications if it is unable to determine that renewal of a license would serve the public interest, convenience and necessity, or if a petition to deny raises a “substantial and material question of fact” as to whether the grant of the renewal applications would be inconsistent with the public interest, convenience and necessity. However, the FCC is prohibited from considering competing applications for a renewal applicant’s frequency, and is required to grant the renewal application if it finds:

• that the station has served the public interest, convenience and necessity;

• that there have been no serious violations by the licensee of the Communications Act or the rules and regulations of the FCC; and

• that there have been no other violations by the licensee of the Communications Act or the rules and regulations of the FCC that, when taken together, would constitute a pattern of abuse.

If as a result of an evidentiary hearing, the FCC determines that the licensee has failed to meet the requirements for renewal and that no mitigating factors justify the imposition of a lesser sanction, the FCC may deny a license renewal application. Historically, FCC licenses have generally been renewed. We have no reason to believe that our licenses will not be renewed in the ordinary course, although there can be no assurance to that effect. The non-renewal of one or more of our stations’ licenses could have a material adverse effect on our business.

Transfer and Assignment of Licenses

The Communications Act requires prior consent 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 an assignment of a television or radio broadcast license or a transfer of control of a broadcast licensee, the FCC considers a number of factors pertaining to the licensee including compliance with various rules limiting common ownership of media properties, the acquiror’s post-acquisition share of the broadcasting advertising market, the “character” of the licensee and those persons holding “attributable” interests therein, the Communications Act’s limitations on foreign ownership and compliance with the FCC rules and regulations.

To obtain the FCC’s prior consent to assign or transfer a broadcast license, appropriate applications must be filed with the FCC. If the application to assign or transfer the license involves a substantial change in ownership or control of the licensee, for example, the transfer or acquisition of more than 50% of the voting equity, the application must be placed on public notice for a period of 30 days during which petitions to deny the application may be filed by interested parties, including members of the public. If an assignment application does not involve new parties, or if a transfer of control application does not involve a “substantial” change in ownership or control, it is a pro forma application, which is not subject to the public notice and 30-day petition to deny procedure. The regular and pro forma applications are nevertheless subject to informal objections that may be filed any time until the FCC acts on the application. If the FCC grants an assignment or transfer application, interested parties have 30 days from public notice of the grant to seek reconsideration of that grant. The FCC has an additional ten days to set aside such grant on its own motion. When ruling on an assignment or transfer application, the FCC is prohibited from considering whether the public interest might be served by an assignment or transfer to any party other than the assignee or transferee specified in the application.

Foreign Ownership Rules

Under the Communications Act, a broadcast license may not be granted to or held by persons who are not U.S. citizens, by any corporation that has more than 20% of its capital stock owned or voted by non-U.S. citizens or entities or their representatives, by foreign governments or their representatives or by non-U.S. corporations. Furthermore, the Communications Act provides that no FCC broadcast license may be granted to or held by any corporation directly or indirectly controlled by any other corporation of which more than 25% of its capital stock is owned of record or voted by non-U.S. citizens or entities or their representatives, or foreign governments or their representatives or by non-U.S. corporations, if the FCC finds the public interest will be served by the refusal

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or revocation of such license. These restrictions apply similarly to partnerships, limited liability companies and other business organizations. Thus, the licenses for our stations could be revoked if more than 25% of our outstanding capital stock is issued to or for the benefit of non-U.S. citizens in excess of these limitations.

Multiple Ownership and Cross-Ownership Rules

The FCC generally applies its other broadcast ownership limits to “attributable” interests held by an individual, corporation or other association or entity. In the case of a corporation holding broadcast licenses, the interests of officers, directors and those who, directly or indirectly, have the right to vote 5% or more of the stock of a licensee corporation are generally deemed attributable interests, as are positions as an officer or director of a corporate parent of a broadcast licensee.

Stock interests held by insurance companies, mutual funds, bank trust departments and certain other passive investors that hold stock for investment purposes only become attributable with the ownership of 20% or more of the voting stock of the corporation holding broadcast licenses. On December 3, 2001, the FCC reinstated the single majority shareholder exemption to these attribution rules, which provides that the interest of minority shareholders in a corporation are not attributable if a single entity holds 50% or more of that corporation’s voting stock.

A time brokerage agreement with another television or radio station in the same market creates an attributable interest in the brokered television or radio station as well for purposes of the FCC’s local television or radio station ownership rules, if the agreement affects more than 15% of the brokered television or radio station’s weekly broadcast hours.

Debt instruments, non-voting stock, options and warrants for voting stock that have not yet been exercised, insulated limited partnership interests where the limited partner is not “materially involved” in the media-related activities of the partnership and minority voting stock interests in corporations where there is a single holder of more than 50% of the outstanding voting stock whose vote is sufficient to affirmatively direct the affairs of the corporation generally do not subject their holders to attribution.

However, the FCC now applies a rule, known as the equity-debt-plus rule, that causes certain creditors or investors to be attributable owners of a station, regardless of whether there is a single majority shareholder or other applicable exception to the FCC’s attribution rules. Under this rule, a major programming supplier (any programming supplier that provides more than 15% of the station’s weekly programming hours) or a same-market media entity will be an attributable owner of a station if the supplier or same-market media entity holds debt or equity, or both, in the station that is greater than 33% of the value of the station’s total debt plus equity. For purposes of the equity-debt-plus rule, equity includes all stock, whether voting or nonvoting, and, equity held by insulated limited partners in limited partnerships. Debt includes all liabilities, whether long-term or short-term. If a party were to purchase notes which, in combination with other of our debt or equity interests, amounts to more than 33% of the value of one or more of our station’s total debt plus equity and such party were a major programming supplier or a same-market media entity, such interest could result in a violation of one of the ownership rules. As a result of such violation, we may be unable to obtain from the FCC one or more authorizations needed to conduct our broadcast business and may be unable to obtain FCC consents for certain future acquisitions unless either we or the investor were to remedy the violation.

Generally, the FCC only permits an owner to have one television station per market. A single owner is permitted to have two stations with overlapping signals so long as they are assigned to different markets. Recent changes to the FCC’s rules regarding ownership now permit an owner to operate two television stations assigned to the same market so long as either:

• the television stations do not have overlapping broadcast signals; or

• there will remain after the transaction eight independently owned, full power noncommercial or commercial operating television stations in the market and one of the two commonly-owned stations is not ranked in the top four based upon audience share.

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The FCC will consider waiving these ownership restrictions in certain cases involving failing or failed stations or stations which are not yet built.

The FCC permits a television station owner to own one radio station in the same market as its television station. In addition, a television station owner is permitted to own additional radio stations, not to exceed the local ownership limits for the market, as follows:

• in markets where 20 media voices will remain, an owner may own an additional five radio stations, or, if the owner only has one television station, an additional six radio stations; and

• in markets where ten media voices will remain, an owner may own an additional three radio stations.

A “media voice” includes each independently-owned and operated full-power television and radio station and each daily newspaper that has a circulation exceeding 5% of the households in the market, plus one voice for all cable television systems operating in the market.

The Communications Act and the FCC impose specific limits on the number of commercial radio stations an entity can own in a single market. The local radio ownership rules are as follows:

• In a radio market with 45 or more commercial radio stations, a party may own, operate or control up to eight commercial radio stations, not more than five of which are in the same service (AM or FM).

• In a radio market with between 30 and 44 (inclusive) commercial radio stations, a party may own, operate or control up to seven commercial radio stations, not more than four of which are in the same service (AM or FM).

• In a radio market with between 15 and 29 (inclusive) commercial radio stations, a party may own, operate or control up to six commercial radio stations, not more than four of which are in the same service (AM or FM).

• In a radio market with 14 or fewer commercial radio stations, a party may own, operate or control up to five commercial radio stations, not more than three of which are in the same service (AM or FM), except that a party may not own, operate, or control more than 50% of the radio stations in such market.

The FCC has for several years reviewed transactions that comply with these numerical ownership limits but that it believes might involve undue concentration in the market for radio advertising. The FCC has notified the public of its intention to review this policy and has adopted an interim policy under which it performs a substantial review of applications that would lead to a post-acquisition market share of 50%, or a 70% share between two competitors. The FCC has also solicited comments from the public on whether it should alter the way in which it defines radio markets for purposes of these rules.

Because of these multiple and cross-ownership rules, if a shareholder, officer or director of LBI Media holds an “attributable” interest in one or more of our stations, such shareholder, officer or director may violate the FCC’s rules if such person or entity also holds or acquires an attributable interest in other television or radio stations or daily newspapers, depending on their number and location. If an attributable shareholder, officer or director of LBI Media violates any of these ownership rules, we may be unable to obtain from the FCC one or more authorizations needed to conduct our broadcast business and may be unable to obtain FCC consents for certain future acquisitions.

Recent court rulings have called into question the validity of the FCC’s current ownership limitations involving local market and nationwide limitations and even the FCC’s authority to impose such limits. In addition, the FCC has announced that it is considering changes to or possible elimination of its ownership limit rules. The judicial review of the current ownership limitations is ongoing. Additionally, the FCC determined on September 12, 2002 to commence a proceeding to review all of its ownership limitations that affect radio and television stations. The existing proceedings are being consolidated into the new proceeding. At this time it is difficult to predict the future of the FCC’s restrictions on how many stations a party may own, operate and/or

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control and what types of media properties a party may commonly own in a market, and the effect that such changes may have upon our future acquisitions and competition we experience from other companies.

Programming and Operation

The Communications Act requires broadcasters to serve the “public interest.” Since 1981, the FCC has gradually relaxed or eliminated many of the more formalized procedures it developed to promote the broadcast of certain types of programming responsive to the needs of a broadcast station’s community of license. Nevertheless, a broadcast licensee continues to be required to present programming in response to community problems, needs and interests and to maintain certain records demonstrating its responsiveness. The FCC will consider complaints from the public about a broadcast station’s programming when it evaluates the licensee’s renewal application, but complaints also may be filed and considered at any time. Stations also must follow various FCC rules that regulate, among other things, political broadcasting, the broadcast of obscene or indecent programming, sponsorship identification, the broadcast of contests and lotteries, certain types of advertising such as for out-of-state lotteries and gambling casinos, and technical operation.

The FCC requires that licensees must not discriminate in hiring practices. In light of a 2001 court ruling that vacated FCC requirements that licensees follow certain specific practices with respect to minority hiring, the FCC has proposed new rules that would require licensees to engage in minority “outreach” efforts, among other things, and to make several new filings to the FCC. Until the FCC has issued final rules, the impact of these proposals remains unclear.

The FCC rules also prohibit a broadcast licensee from simulcasting more than 25% of its programming on another radio station in the same broadcast service (that is, AM/AM or FM/FM). The simulcasting restriction applies if the licensee owns both radio broadcast stations or owns one and programs the other through a local marketing agreement, provided that the contours of the radio stations overlap in a certain manner.

“Must Carry” Rules and SHVIA

FCC regulations implementing the 1992 Cable Act require each full-service television broadcaster to elect, at three year intervals beginning October 1, 1993, to either:

• require carriage of its signal by cable systems in the station’s market, which is referred to as “must carry” rules; or

• negotiate the terms on which such broadcast station would permit transmission of its signal by the cable systems within its market which is referred to as “retransmission consent.”

We have elected “must carry” with respect to each of our full-power stations.

Under the FCC’s rules currently in effect, cable systems are only required to carry one signal from each local broadcast television station. As our systems begin broadcasting digital signals in 2002, the cable systems that carry our stations’ analog signals will not be required to carry such digital signal until we discontinue our analog broadcasting. Also, under current FCC rules, the cable systems will be required to carry only one channel of digital signal from each of our stations, even though we may be capable of broadcasting multiple programs simultaneously within the bandwidth that the FCC has allotted to us for digital broadcasting.

The Satellite Home Viewer Improvement Act of 1999 (“SHVIA”) allows satellite carriers to deliver “distant” broadcast programming to subscribers who are unable to obtain television network programming over the air from local television stations. It also allows satellite carriers to provide subscribers with “local-into-local” programming, but imposes a requirement analogous to the Cable Act’s “must carry” rules: Any satellite company that has chosen to provide local-into-local service must provide subscribers with all of the local broadcast television signals that are assigned to the market and where television licensees ask to be carried on the satellite

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system. We have taken advantage of this law to secure carriage of our full-service stations in those markets where the satellite operators have implemented local-into-local service.

Time Brokerage Agreements

We have entered into a number of time brokerage agreements under which we are given the right to broker time on stations owned by third parties, or agree that other parties may broker time on our stations. By using time brokerage agreements, we can provide programming and other services to a station proposed to be acquired before we receive all applicable FCC and other governmental approvals. As indicated, we have, from time to time, entered into time brokerage agreements giving third parties the right to broker time on stations owned by us.

FCC rules and policies generally permit time brokerage agreements if the station licensee retains ultimate responsibility for and control of the applicable station. We cannot be sure that we will be able to air all of our scheduled programming on a station with which we have time brokerage agreements or that we will receive the anticipated revenue from the sale of advertising for such programming.

Stations may enter into cooperative arrangements known as joint sales agreements. Under the typical joint sales agreement, a station licensee obtains, for a fee, the right to sell substantially all of the commercial advertising on a separately-owned and licensed station in the same market. It also involves the provision by the selling party of certain sales, accounting and services to the station whose advertising is being sold. Unlike a time brokerage agreement, the typical joint sales agreement does not involve programming.

As part of its increased scrutiny of television and radio station acquisitions, the Department of Justice has stated publicly that it believes that time brokerage agreements and joint sales agreements could violate the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, if such agreements take effect prior to the expiration of the waiting period under such Act. Furthermore, the Department of Justice has noted that joint sales agreements may raise antitrust concerns under Section 1 of the Sherman Antitrust Act and has challenged them in certain locations. The Department of Justice also has stated publicly that it has established certain revenue and audience share concentration benchmarks with respect to television and radio station acquisitions, above which a transaction may receive additional antitrust scrutiny. The “Risk Factors—Risks Related to the Television and Radio Industries” section of this prospectus contains a more complete discussion of this issue and the risks to which we are exposed as a result.

Digital Television Services

The FCC has adopted rules for implementing digital television service in the U.S. Implementation of digital television will improve the technical quality of television signals and provide broadcasters the flexibility to offer new services, including high-definition television and data broadcasting.

The FCC has established service rules and adopted a table of allotments for digital television. Under the table, certain eligible broadcasters with a full-service television station are allocated a separate channel for digital television operation. Stations will be permitted to phase in their digital television operations over a period of years after which they will be required to surrender their license to broadcast the analog, or non-digital television signal. KRCA-TV must be on the air with a digital signal by November 1, 2002, and we have requested a six-month extension of the November 1, 2002 deadline with respect to KZJL-TV. We have developed a plan for complying with these requirements. We must return one of our paired channels for each station to the government by 2006, except that this deadline may be extended until digital television receivers reach an 85% market penetration.

Equipment and other costs associated with the transition to digital television, including the necessity of temporary dual-mode operations and the relocation of stations from one channel to another, will impose some near-term financial costs on television stations providing the services. The potential also exists for new sources

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of revenue to be derived from digital television. We cannot predict the overall effect the transition to digital television might have on our business.

Digital Radio Services

The FCC currently is considering standards for evaluating, authorizing and implementing terrestrial digital audio broadcasting technology, including In-Band On-Channel^™ technology for FM radio stations. Digital audio broadcasting’s advantages over traditional analog broadcasting technology include improved sound quality and the ability to offer a greater variety of auxiliary services. In-Band On-Channel^™ technology would permit an FM station to transmit radio programming in both analog and digital formats, or in digital only formats, using the bandwidth that the radio station is currently licensed to use. It is unclear what regulations the FCC will adopt regarding digital audio broadcasting or In-Band On-Channel^™ technology and what effect such regulations would have on our business or the operations of our radio stations.

The FCC has allocated spectrum to a new technology, satellite digital audio radio service, to deliver satellite-based audio programming to a national or regional audience. The nationwide reach of the satellite digital audio radio service could allow niche programming aimed at diverse communities that we are targeting. Two companies that hold licenses for authority to offer multiple channels of digital, satellite-delivered radio could compete with conventional terrestrial radio broadcasting. These competitors have commenced limited operations and both are expected to be offering their services nationwide by the end of 2002.

Radio Frequency Radiation

The FCC has adopted rules limiting human exposure to levels of radio frequency radiation. These rules require applicants for renewal of broadcast licenses or modification of existing licenses to inform the FCC whether the applicant’s broadcast facility would expose people or employees to excessive radio frequency radiation. We believe that all of our stations are in compliance with the FCC’s current rules regarding radio frequency radiation exposure.

Low-Power Radio Broadcast Service

On January 20, 2000, the FCC adopted rules creating a new low-power FM radio service. The low-power FM service consists of two classes of radio stations, with maximum power levels of either 10 watts or 100 watts. The 10 watt stations will reach an area with a radius of between one and two miles and the 100 watt stations will reach an area with a radius of approximately three and one-half miles. Each of these low-power FM stations will be required to avoid interference with other existing FM stations, as currently required of full-powered FM stations.

The low-power FM service will be exclusively non-commercial. It is difficult to predict what impact, if any, the new low-power FM service will have on competition for our stations’ audiences. Because of the legislation passed by Congress in 2000 which protected incumbent radio broadcasters on frequency three channels away and because of certain FCC interference standards, we expect that low-power FM service will cause little or no signal interference with our stations.

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MANAGEMENT

The following sets forth information about our directors, executive officers and key non-executive employees:

Name	Position	Age
Directors and Executive Officers
Jose Liberman	Co-Founder, President and Director	77
Lenard Liberman	Co-Founder, Executive Vice President, Chief Financial Officer, Secretary and Director	40
Key Non-Executive Employees
Eduardo Leon	Vice President—Programming	38
Andrew Mars	Corporate Vice President—Sales	47
Xavier Ortiz	Vice President—National Sales	34

Jose Liberman co-founded Liberman Broadcasting, Inc., which is now a subsidiary of LBI Media, with his son, Lenard, in 1987. Since 1987, he has served as our President and a member of our board of directors. Mr. Liberman started his career in radio broadcasting in 1957 with the purchase of XERZ in Mexico and the establishment of a radio advertising representative firm in Mexico. In 1976, Mr. Liberman acquired KLVE-FM, the first Los Angeles FM station to utilize a Hispanic format. In 1979, he purchased KTNQ-AM and combined it with KLVE to create the first Hispanic AM/FM simulcast in Los Angeles.

Lenard Liberman has served as our Executive Vice President and Secretary and as a member of our board of directors since founding Liberman Broadcasting, Inc. with his father in 1987. In April 2002, he was appointed as our Chief Financial Officer. Mr. Liberman manages all day-to-day operations including acquisitions and financings. He received his juris doctorate degree and masters of business administration degree from Stanford University in 1987.

Eduardo Leon joined us in 1998 as Vice President of Programming. He is responsible for all programming aspects of our radio stations. Prior to joining us, Mr. Leon was the program director from 1996 to 1998 at radio station WLEY-FM in Chicago, which is owned by Spanish Broadcasting Systems, Inc. In 1992, he founded Radio Ideas, a Spanish-language radio consulting company.

Andrew Mars joined Liberman Broadcasting in 1990 as vice president and station manager of KWIZ-FM and has served as our Corporate Vice President of Sales since 1995. Prior thereto, Mr. Mars was director of sales for WODS-FM in Boston. He previously served as a local sales manager at CBS Radio in Los Angeles.

Xavier Ortiz has served as our Vice President of National Sales since 1991. Prior to joining us, Mr. Ortiz was a sales account executive with WADO-AM Radio in New York City, Telemundo at Channel 47 in New York, and Caballero Spanish Media in New York City.

Compensation of Directors

Jose Liberman, our President, and Lenard Liberman, our Executive Vice President, Chief Financial Officer and Secretary, receive no additional compensation for their services as directors. We reimburse our directors for their reasonable expenses incurred in connection with attending board meetings.

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Security Ownership of Management

Jose and Lenard Liberman each own 50% of the outstanding stock (100 shares of common stock each) of our parent, LBI Holdings I, Inc. We are a wholly owned subsidiary of our parent. Jose and Lenard Liberman each work at our offices at 1845 West Empire Avenue, Burbank, California 91504.

Compensation Committee Interlocks and Insider Participation

We do not have a compensation committee. Our board of directors is responsible for determining the compensation of our executive officers.

Executive Compensation

Jose Liberman and Lenard Liberman were paid salaries of $60,000 and $215,500, respectively, during the fiscal year ended December 31, 2001. Neither officer received a bonus or any other reportable compensation in 2001.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Shareholder Notes

In March 2001, Liberman Broadcasting, Inc., our wholly owned subsidiary, issued amended and restated promissory notes to Jose and Lenard Liberman in the principal amount of $3,667,193 and $194,414, respectively. As of June 30, 2002, the outstanding principal balances of these notes were $1,667,193 and $194,414, respectively. These notes were repaid with the proceeds from the refinancing of our senior credit facility and the offering of the old notes on July 9, 2002.

Shareholder Loans

As of June 30, 2002, we had outstanding loans of $146,590 and $275,095 to Jose and Lenard Liberman, respectively, of which $146,590 and $243,095 were originally made in December 2001. During the six months ended June 30, 2002, we loaned an additional $32,000 to Lenard Liberman.

On July 9, 2002, we loaned an additional $1.9 million to Lenard Liberman. This loan matures in 2009 and bears interest at the applicable federal rate.

Stock Purchase Agreement

In January 1998, our parent entered into a stock purchase agreement with Lenard Liberman, Jose Liberman and Jose’s wife. If either Lenard or Jose seek to dispose of his stock, our parent has the right to acquire such stock at the lesser of the offer price or a price agreed upon by the shareholders, subject to adjustment every three years, beginning in 2004. If our parent does not exercise its right to repurchase the stock, the remaining shareholder has the right to purchase such stock at the same price as our parent. If neither our parent nor the remaining shareholder exercises its right to purchase the stock, the shareholder may transfer the stock free and clear of the restrictions set forth in the stock repurchase agreement for a period of 30 days. After the expiration of the 30-day period, the transfer restrictions contained in the stock purchase agreement will be reinstated.

In addition, if Lenard or Jose and his wife die, our parent has the right to repurchase their stock at a price agreed upon by the shareholders, subject to adjustment every three years, beginning in 2004. If our parent does not exercise its repurchase right, the remaining shareholder has the right to purchase such stock at the same price as our parent. If neither our parent nor the remaining shareholder exercises its right to purchase the stock, the stock may be transferred free and clear of the restrictions contained in the stock purchase agreement.

Payments for stock purchased under the stock purchase agreement may be in cash or in the form of a promissory note, which will be payable in five equal annual installments commencing on the first anniversary of the issuance of the note.

Spanish Media Rep Team

Jose and Lenard Liberman own and operate our national sales representative, Spanish Media Rep Team, Inc., or SMRT. SMRT receives a 15% commission from us for any advertising time it sells. We paid approximately $589,000 to SMRT in 2001 for services provided to us and have paid approximately $502,000 to SMRT during the six months ended June 30, 2002.

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DESCRIPTION OF OTHER INDEBTEDNESS

Senior Credit Facility

The description below is a description of the principal terms of the senior secured credit facility and is subject to, and qualified in its entirety by, reference to the definitive documentation.

Our senior credit facility provides for a $170.0 million senior secured reducing revolving credit facility. We have the option to request our lenders to increase the amount of the reducing revolving credit facility by an amount equal to no more than $30.0 million in the aggregate; however, our lenders are not obligated to do so. Letters of credit are also available to us under the credit agreement. Aggregate letters of credit outstanding at any time may not exceed the lesser of $5.0 million or the available revolving commitment amount. The credit facility matures on September 30, 2009.

Interest and Commitment Fee.     The revolving loans bear interest through maturity: (1) if a Base Rate (as defined below) loan, then at the sum of the Base Rate plus the Applicable Margin (as defined below), or (2) if a LIBOR loan, then at the sum of LIBOR plus the Applicable Margin. The Base Rate is the higher of (i) Fleet National Bank’s prime commercial lending rate and (ii) the Federal Funds Effective Rate (as published by the Federal Reserve Bank of New York) plus 0.5%.

The Applicable Margin for Base Rate loans is 1.75% and the Applicable Margin for LIBOR loans is 3.00%, until we deliver our September 30, 2002 financial statements. Thereafter the Applicable Margin will be based on our total leverage ratio (total debt to EBITDA (as defined in the new credit agreement)). For Base Rate loans, the Applicable Margin will range from 0.25% to 1.75% and for LIBOR loans, the Applicable Margin will range from 1.50% to 3.00%. Upon the occurrence of an event of default discussed below, interest accrues at the rate otherwise applicable plus 2.00% so long as an event of default is continuing.

We pay an annual commitment fee on the unused portion of the revolving credit facility based on our utilization rate of the revolver. If we borrow less than 50% of the revolving credit commitment, we must pay an annual commitment fee of 0.500% times the unused portion. If we borrow 50% or more of the total revolving loan commitment, then we must pay an annual commitment fee of 0.375% times the unused portion.

Amortization.     The commitment to lend revolving loans is automatically reduced each quarter beginning June 30, 2005 until it is fully amortized on September 30, 2009.

Mandatory Prepayments.     We are required to prepay borrowings under our senior credit facility with:

• 100% of the net proceeds from non-ordinary course asset sales with aggregate net cash payments in excess of $3.5 million in any fiscal year, which we have not reinvested in assets in the same line of business within 170 days after receipt of the proceeds, subject to a limit of $5.0 million that may be reinvested in real estate after the date of the credit agreement and other limited exceptions; and

• 100% of insurance proceeds in excess of $250,000 per occurrence and $500,000 for all occurrences resulting from damage or destruction of assets that have not been used to replace such damage or destruction or otherwise reinvested in like assets within 180 days after receipt of the proceeds (or committed to be so reinvested within such period with such proceeds actually invested within 360 days).

All mandatory prepayments must be applied to reduce outstanding amounts under the revolving facility and permanently reduce the aggregate commitment amount, with pro rata reductions in scheduled commitment reductions.

Voluntary Prepayments.    We may prepay borrowings under our senior credit facility and reduce commitments at any time at our option subject to a minimum amount of $500,000.

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Securities and Guarantees.     The loans under the senior credit facility are secured by a lien on substantially all of our tangible and intangible property, including accounts receivable, inventory, equipment, intellectual property and real property, and by a pledge of all of the shares of stock, partnership interests and limited liability company interests of our direct and indirect subsidiaries, of which we now own or later acquire more than a 50% interest or of which we now or later control.

Our obligations under the senior credit facility are guaranteed by each of our subsidiaries and the guarantees are secured by substantially all of the assets of our subsidiaries.

Covenants.     Our senior credit facility contains customary covenants for a senior credit facility, including restrictions on our ability and our subsidiaries’ ability to:

•        declare dividends or redeem or repurchase capital stock; •        prepay, redeem or purchase debt; •        incur liens and engage in sale-leaseback transactions; •        make loans and investments; •        incur or guaranty additional indebtedness; •        enter into capital leases; •        sell or discount notes and accounts receivable; •        amend or otherwise alter debt and other material agreements, including the 9% subordinated notes of our parent and Empire Burbank’s loan described below; •        change our name, identity, organizational structure or governing documents; •        issue or transfer capital stock; •        make capital expenditures; •        enter into management agreements or certain restrictive agreements; •        change our fiscal year; •        engage in mergers, acquisitions and asset sales; •        transact with affiliates; and •        alter the business we conduct.

In addition, our parent is prohibited from incurring additional debt with a current cash pay component without the consent of lenders with a majority of the revolving loan commitment.

Notwithstanding the covenant restricting mergers, acquisitions and asset sales, the senior credit facility allows us and our subsidiaries to acquire radio stations KQQK-FM, KEYH-AM, KIOX-FM and KXGJ-FM if certain conditions are met. We and our subsidiaries are also allowed to make acquisitions in similar lines of business provided that (i) no default or event of default exists before or after the acquisition, (ii) the agent receives detailed financial statements showing pro forma compliance with the covenants of this senior credit facility, (iii) the lenders with a majority of the revolving line commitment approve any acquisition greater than $50 million, and (iv) certain other conditions are met.

The senior credit facility also contains financial covenants, including a maximum ratio of total debt (which excludes Empire Burbank’s debt and the 9% subordinated notes) to EBITDA (as defined in the senior credit facility), a maximum ratio of senior debt (total debt minus all debt expressly subordinated to this credit facility, including the notes) to EBITDA, a minimum ratio of EBITDA to cash interest expense, a minimum ratio of EBITDA to fixed charges and a maximum limit on annual capital expenditures.

Events of Default.     Events of default under the senior credit facility include, but are not limited to:

• failure to pay principal when due or interest within three business days after due;

• material breach of any representation or warranty contained in the loan documents;

• covenant defaults;

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• events of bankruptcy;

• cross-defaults to other indebtedness, including defaults in the notes;

• the existence of certain environmental and ERISA claims or liabilities;

• loss or material impairment of material licenses;

• a change of control of our company; and

• the failure to find a qualified replacement for Lenard Liberman within 180 days after he no longer serves as an officer of, or has any oversight role with respect to, our company.

9% Subordinated Notes due 2013

In March 2001, our parent issued $30.0 million aggregate principal amount of 9% subordinated notes to a group of investors led by Alta Communications, Inc. The 9% subordinated notes are not our obligations and do not appear as debt on our balance sheet. However, because our parent is a holding company, it will depend upon funds generated by our subsidiaries to repay the 9% subordinated notes. On July 9, 2002, we modified certain terms in the subordinated note agreement and other agreements governing the 9% subordinated notes. As so amended, the 9% subordinated notes are subordinate in right of payment to our senior credit facility and the notes.

The 9% subordinated notes mature on the earlier of:

• July 9, 2013;

• upon acceleration following the occurrence and continuance of a material event of default;

• a merger, sale or similar transaction involving our parent or substantially all of the subsidiaries of our parent;

• the sale or other disposition of a majority of our parent’s issued and outstanding capital stock or other rights giving a third party a right to elect a majority of our parent’s board of directors; and

• the date on which the warrants are repurchased pursuant to the call option described below.

The subordinated notes initially bear interest at 9% per year and will bear interest at 13% per year beginning September 9, 2009. Interest compounds annually and is payable only upon the maturity of the 9% subordinated notes. However, subject to the terms of subordination agreements with our senior lenders and holders of the notes, interest may be paid in cash on an annual basis if permitted under other debt agreements. Any interest not paid before maturity will be added to the face amount of the 9% subordinated notes. During the occurrence and continuation of an event of default, the applicable interest rate will increase by 4% per year. Any amounts owed after July 9, 2013 will bear interest at an additional 2% above the then applicable default rate and on each six month anniversary of July 9, 2013, the interest rate will increase by an additional 2%, up to a maximum of 21% per year, in all cases compounded annually.

Our parent may prepay the 9% subordinated notes in whole or in part at any time without penalty or premium, subject to the terms of the subordination agreements with our senior lenders and the holders of the notes. If permitted under our other debt agreements, mandatory redemption of the 9% subordinated notes and payment of all accrued and unpaid interest will occur at maturity.

The agreement governing the 9% subordinated notes contains covenants that, among other things, and subject to limited exceptions, prohibit us from engaging in any business other than permitted lines of business, restrict our ability and the ability of our subsidiaries to pay dividends or make other restricted payments and to enter into transactions with affiliates and require our parent to deliver certain financial information. Also, the holders of a majority of the 9% subordinated notes may select a representative to consult with and advise

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management on significant business issues, including proposed annual operating plans, and an observer to attend meetings of our board of directors and the boards of our subsidiaries. Lenard and Jose Liberman have personally undertaken not to engage in permitted lines of business other than through our parent or its subsidiaries. The holders of the 9% subordinated notes have agreed to refrain from taking any action that would terminate the status of our parent as an “S corporation.”

Events of default under the 9% subordinated notes are similar to the events of default under our senior credit facility. If a material event of default has occurred and is continuing, the 9% notes have been accelerated, any applicable consents have been obtained and any waiting periods have expired, then the holders of the 9% notes shall have the right to elect the smallest number of directors necessary to take control of our parent’s board of directors until such obligation to repay the 9% subordinated notes and to repurchase the warrants has been completed.

Warrants Issued in Connection with the 9% Subordinated Notes

In March 2001, in connection with the issuance of the 9% subordinated notes, our parent issued warrants to purchase up to 14.02 shares, or 6.55%, of its common stock. The initial exercise price of the warrants is $.01 per share and, so long as it would not generally result in the termination of S corporation status of our parent nor violate the federal communications laws, the warrants may be exercised at any time on or before the earlier of:

• the later of (a) January 9, 2015 and (b) the date that is six months after payment in full of the 9% subordinated notes; and

• the closing of an underwritten public offering of the common stock of our parent resulting in gross proceeds of more than $25.0 million.

However, the warrants will terminate no earlier than the date on which the warrant holders have the right to exercise their put rights as described below.

A performance-based adjustment may increase or decrease the number of shares issuable upon exercise of the warrants based on the consolidated broadcast cash flow of our parent, which is defined as consolidated EBITDA plus corporate overhead expense (each as defined on the warrant agreement). Upon the maturity date of the 9% subordinated notes, the payment in full of the 9% subordinated notes and the repurchase of the warrants, a change in control of our parent or the exercise of the call or put options described below, the number of shares issuable upon the exercise of the warrant at the time of such event will be decreased by multiplying such number of shares by .9367, if our parent achieves broadcast cash flow for the trailing twelve months in excess of 125% of its budgeted forecasts and in the case of the sale of our parent or exercise of the call or put options, its total fair market value is greater than 13 times broadcast cash flow for the trailing twelve months. The number of shares issuable upon the exercise of the warrants will be increased by multiplying such number of shares by 1.0633, if our parent achieves broadcast cash flow less than 75% of its budgeted plan for the trailing twelve months and in the case of the sale of our parent or exercise of the call or put options, its total fair market value is less than 15 times broadcast cash flow for the trailing twelve months.

Subject to the subordination agreement with our senior lenders and the holders of the notes, the warrant holders generally have the right to require our parent to repurchase the warrants, or if the warrants have been exercised, the common stock issued upon the exercise of the warrants, at any time after the maturity date of the 9% subordinated notes. Our parent must repurchase the warrants at the fair market value of its shares of common stock on the date of the put notice, as calculated under the warrant agreement, less the exercise price of the warrants at that time.

If our parent proposes an acquisition with a valuation of at least $5.0 million in which the lenders of any proposed financing source for such acquisition reasonably requires in good faith that our parent amend the maturity date of the 9% subordinated notes or the expiration date of the warrants and the holders of a majority of the 9% subordinated notes or the warrants do not agree to such an amendment, then our parent will have the right

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to repurchase the warrants. In such case, the purchase price will be the fair market value of its shares of common stock on the date of the call notice, as calculated under the warrant agreement, less the exercise price of the warrants at that time. Our parent may exercise this right if and to the extent that it pays the outstanding amounts under the 9% subordinated notes in full.

The holders of the warrants have co-sale rights, whereby if Jose or Lenard Liberman propose to transfer any of the securities of our parent, then, subject to limited exceptions, the co-sale rights permit them to participate on a pro rata basis in such transfer. Also, if Jose and Lenard Liberman desire to transfer 90% or more of the common stock of our parent owned by them or under certain other specified events, then they have the right to cause all warrant holders to sell their equity interests in such sale or such event on the same or substantially similar terms and conditions. In connection with any transfer of all or any warrants, the warrant holder shall transfer a pro rata portion of the 9% subordinated notes held by such warrant holder.

Empire Burbank Loan

In July 1999, Empire Burbank Studios, Inc., our wholly owned subsidiary, issued an installment note to City National Bank in the aggregate principal amount of $3.25 million. As of June 30, 2002, approximately $2.9 million was outstanding on the installment note. In connection with the note, Empire Burbank Studios executed a mortgage in favor of City National Bank as security for the loan. The mortgage encumbers the property owned by Empire Burbank Studios at 1845 West Empire Avenue, Burbank, California 91504, which we use as our principal office and studio space. The note bears interest at the rate of 8.13% per annum and is payable in monthly principal and interest payments of $32,000 through August 2014.

Pursuant to our senior credit facility, we agreed not to, and to cause Empire Burbank Studios not to, make any optional payment or prepayment under the Empire Burbank loan documents and not to, and to cause Empire Burbank Studios not to, amend, modify or change the Empire Burbank loan documents in a manner that would materially and adversely affect the respective lenders and note holders, as the case may be, without their consent. We also agreed to cause Empire Burbank Studios not to engage in any business other than the ownership of the Burbank office and studio property and the lease, sublease and renting of the same property.

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DESCRIPTION OF THE EXCHANGE NOTES

The old notes were, and the exchange notes will be, issued under the indenture dated July 9, 2002 among us, our subsidiary guarantors and U.S. Bank, N.A., as trustee. The form and terms of the old notes and the exchange notes are identical in all material respect except the exchange notes will have been registered under the Securities Act. See “The Exchange Offer; Registration Rights—Purpose and Effect.” The definitions of certain capitalized terms used in the following summary are set forth below under “—Certain Definitions.” In this description, the word “LBI Media” refers only to LBI Media, Inc. and not to any of its subsidiaries.

The following description is a summary of the material provisions in the indenture. It does not restate the terms of the indenture in their entirety. We urge that you carefully read the indenture and the Trust Indenture Act of 1939 (the “TIA”), because the indenture and the TIA govern your rights as holders of the exchange notes, not this description. A copy of the indenture may be obtained from us.

The registered Holder of a note is treated as the owner of it for all purposes. Only registered Holders have rights under the indenture.

Brief Description of the Notes and the Subsidiary Guarantees

The Notes

The notes:

• are general unsecured obligations of LBI Media;

• are junior in right of payment to all existing and future Senior Debt of LBI Media;

• are pari passu in right of payment with any future senior subordinated Indebtedness of LBI Media; and

• are unconditionally guaranteed on a senior subordinated basis by the Guarantors.

The notes will be issued in fully registered form only, without coupons, in denominations of $1,000 and integral multiples of $1,000.

Any old notes that remain outstanding after the exchange offer, together with the exchange notes issued in connection with the exchange offer, will be treated as a single class of securities under the indenture.

The Subsidiary Guarantees

The notes are guaranteed by all of LBI Media’s Domestic Subsidiaries.

Each guarantee of the notes:

• is a general unsecured obligation of the Guarantor;

• is junior in right of payment to all existing and future Senior Debt of that Guarantor; and

• is pari passu in right of payment with any future senior subordinated Indebtedness of that Guarantor.

Assuming we had completed the offering of the old notes and entered into the Credit Agreement as of June 30, 2002, LBI Media and the Guarantors would have had total Senior Debt of approximately $76.9 million. As indicated above and as discussed in detail below under the caption “—Subordination,” payments on the notes and under the guarantees are subordinated to the payment of Senior Debt. The indenture permits LBI Media and the Guarantors to incur additional Senior Debt.

As of the date of the indenture, all of LBI Media’s subsidiaries are “Restricted Subsidiaries.” However, under the circumstances described below under the subheading “—Certain Covenants—Designation of

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Restricted and Unrestricted Subsidiaries,” LBI Media is permitted to designate certain subsidiaries as “Unrestricted Subsidiaries.” LBI Media’s Unrestricted Subsidiaries will not be subject to many of the restrictive covenants in the indenture. LBI Media’s Unrestricted Subsidiaries will not guarantee the notes.

Principal, Maturity and Interest

The indenture permits LBI Media to issue notes with a maximum aggregate principal amount of $400.0 million of which $150.0 million were issued on July 9, 2002. LBI Media may issue additional notes from time to time after the initial offering. Any offering of additional notes is subject to the covenant described below under the caption “—Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock” and the terms of any other instruments of LBI Media and the Guarantors then in effect, including the Credit Agreement. The old notes, exchange notes and any additional notes subsequently issued under the indenture will be treated as a single class for all purposes under the indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase. LBI Media will issue notes in denominations of $1,000 and integral multiples of $1,000. The notes will mature on July 15, 2012.

Interest on the notes accrues at the rate of 10 ^{1/8% per annum and is payable semi-annually in arrears on January 15 and July 15, commencing on January 15, 2003. LBI Media makes each interest payment to the Holders of record on the immediately preceding January 1 and July 1.}

Interest on the notes accrues from the date of original issuance or, if interest has already been paid, from the date it was most recently paid. Interest is computed on the basis of a 360-day year comprised of twelve 30-day months.

Methods of Receiving Payments on the Notes

If a Holder has given wire transfer instructions to LBI Media, LBI Media will pay all principal, interest and premium and Liquidated Damages, if any, on that Holder’s notes in accordance with those instructions. All other payments on notes will be made at the office or agency of the paying agent and registrar within the City and State of New York unless LBI Media elects to make interest payments by check mailed to the Holders at their address set forth in the register of Holders.

Paying Agent and Registrar for the Notes

The trustee initially acts as paying agent and registrar. LBI Media may change the paying agent or registrar without prior notice to the Holders of the notes, and LBI Media or any of its Subsidiaries may act as paying agent or registrar.

Transfer and Exchange

A Holder may transfer or exchange notes in accordance with the indenture. The registrar and the trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents in connection with a transfer of notes. Holders are required to pay all taxes due on transfer. LBI Media is not required to transfer or exchange any note selected for redemption. Also, LBI Media is not required to transfer or exchange any note for a period of 15 days before a selection of notes to be redeemed.

Subsidiary Guarantees

The notes are and will be guaranteed by each of LBI Media’s current and future Domestic Subsidiaries. These Subsidiary Guarantees are joint and several obligations of the Guarantors. Each Subsidiary Guarantee is subordinated to the prior payment in full of all Senior Debt of that Guarantor, including Senior Debt incurred after the date of the indenture. The obligations of each Guarantor under its Subsidiary Guarantee are limited as necessary to prevent that Subsidiary Guarantee from constituting a fraudulent conveyance under applicable law.

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See “Risk Factors—The subsidiary guarantees raise fraudulent transfer issues, which could impair the enforceability of the subsidiary guarantees.”

A Guarantor may not sell or otherwise dispose of all or substantially all of its assets to, or consolidate with or merge with or into (whether or not such Guarantor is the surviving Person), another Person, other than LBI Media or another Guarantor, unless:

(1) immediately after giving effect to that transaction, no Default or Event of Default exists; and

(2) either:

(a) the Person acquiring the property in any such sale or disposition or the Person formed by or surviving any such consolidation or merger assumes all the obligations of that Guarantor under the indenture, its Subsidiary Guarantee and the registration rights agreement pursuant to a supplemental indenture satisfactory to the trustee; or

(b) the Net Proceeds of such sale or other disposition are applied in accordance with the applicable provisions of the indenture.

The Subsidiary Guarantee of a Guarantor will be released:

(1) in connection with any sale or other disposition of all or substantially all of the assets of that Guarantor (including by way of merger or consolidation) to a Person that is not (either before or after giving effect to such transaction) a Subsidiary of LBI Media, if the sale or other disposition complies with the “Asset Sale” provisions of the indenture;

(2) in connection with any sale of all of the Capital Stock of a Guarantor to a Person that is not (either before or after giving effect to such transaction) a Subsidiary of LBI Media, if the sale complies with the “Asset Sale” provisions of the indenture; or

(3) if LBI Media designates any Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary in accordance with the applicable provisions of the indenture.

See “—Repurchase at the Option of Holders—Asset Sales.”

Subordination

The payment of principal, interest and premium and Liquidated Damages, if any, on the notes is subordinated to the prior payment in full of all Senior Debt of LBI Media, including Senior Debt incurred after the date of the indenture.

The holders of Senior Debt are entitled to receive payment in full of all Obligations due in respect of Senior Debt (including interest after the commencement of any bankruptcy proceeding at the rate specified in the applicable Senior Debt) before the Holders of notes are entitled to receive any payment with respect to the notes (including, without limitation, payments on account of a purchase or redemption of the notes by LBI Media in connection with an Asset Sale Offer or a Change of Control Offer) (except that Holders of notes may receive and retain Permitted Junior Securities and payments made from the trust described under “—Legal Defeasance and Covenant Defeasance”), in the event of any distribution to creditors of LBI Media:

(1) in a liquidation or dissolution of LBI Media;

(2) in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to LBI Media or its property;

(3) in an assignment for the benefit of creditors; or

(4) in any marshaling of LBI Media’s assets and liabilities.

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To the extent any payment of Senior Debt (whether by or on behalf of LBI Media, as proceeds of security or enforcement of any right of setoff or otherwise) is declared to be fraudulent or preferential, set aside or required to be paid to any receiver, trustee in bankruptcy, liquidating trustee, agent or other similar Person under any bankruptcy, insolvency, receivership, fraudulent conveyance or similar law, then, if such payment is recovered by, or paid over to, such receiver, trustee in bankruptcy, liquidating trustee, agent or other similar Person, the Senior Debt or part thereof originally intended to be satisfied shall be deemed to be reinstated and outstanding as if such payment had not occurred.

Neither LBI Media nor any Guarantor may make any payment in respect of the notes (except in Permitted Junior Securities or from the trust described under “—Legal Defeasance and Covenant Defeasance”) if:

(1) a payment default on Designated Senior Debt occurs and is continuing beyond any applicable grace period; or

(2) any other default occurs and is continuing on any series of Designated Senior Debt that permits holders of that series of Designated Senior Debt to accelerate its maturity and the trustee receives a notice of such default (a “Payment Blockage Notice”) from LBI Media or the holders of any Designated Senior Debt.

Payments on the notes may and will be resumed:

(1) in the case of a payment default, upon the date on which such default is cured or waived; and

(2) in the case of a nonpayment default, upon the earlier of (i) the date on which such nonpayment default is cured or waived, (ii) 179 days after the date on which the applicable Payment Blockage Notice is received, or (iii) the date on which the trustee receives notice from or on behalf of the holders of Designated Senior Debt to terminate the applicable Payment Blockage Notice, unless the maturity of any Designated Senior Debt has been accelerated.

No new Payment Blockage Notice may be delivered unless and until 360 days have elapsed since the delivery of the immediately prior Payment Blockage Notice.

No nonpayment default that existed or was continuing on the date of delivery of any Payment Blockage Notice to the trustee will be, or be made, the basis for a subsequent Payment Blockage Notice unless such default has been cured or waived for a period of not less than 90 days.

If the trustee or any Holder of the notes receives a payment in respect of the notes (except in Permitted Junior Securities or from the trust described under “—Legal Defeasance and Covenant Defeasance” so long as, on the date or dates the respective amounts were paid into trust, such payments were made without violating the subordination provisions described herein) when the payment is prohibited by these subordination provisions, the trustee or the Holder, as the case may be, will hold the payment in trust for the benefit of the holders of Senior Debt. Upon the proper written request of the holders of Senior Debt, the trustee or the Holder, as the case may be, will deliver the amounts in trust to the holders of Senior Debt or their proper representative in accordance with the terms set forth in the indenture.

LBI Media must promptly notify holders of Senior Debt if payment of the notes is accelerated because of an Event of Default.

As a result of the subordination provisions described above, in the event of a bankruptcy, liquidation or reorganization of LBI Media, Holders of notes may recover less ratably than creditors of LBI Media who are holders of Senior Debt. See “Risk Factors—Your right to receive payments on the notes and guarantees will be junior to the right of the holders of our and the guarantors’ senior debt.”

No right of any holder of Senior Debt to enforce the subordination of the Indebtedness evidenced by the notes shall be impaired by any act or failure to act by LBI Media or any Holder or by the failure of LBI Media or any Holder to comply with the indenture.

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Without in any way limiting the generality of the foregoing paragraph, the holders of Senior Debt may, at any time from time to time, without the consent of or notice to the trustee, without incurring responsibility to the trustee of the Holders of the notes and without impairing or releasing the subordination provisions of the indenture or the obligations under the indenture of the Holders of the notes to the holders of the Senior Debt, do any one or more of the following: (i) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, the Senior Debt, or otherwise amend or supplement in any manner, Senior Debt, or any instrument evidencing the same or any agreement under which Senior Debt is outstanding; (ii) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing Senior Debt; (iii) release any Person liable in any manner for the payment or collection of Senior Debt; and (iv) exercise or refrain from exercising any rights against LBI Media and any other Person.

Optional Redemption

At any time prior to July 15, 2005, LBI Media may on any one or more occasions redeem up to 35% of the aggregate principal amount of notes issued under the indenture at a redemption price of 110.125% of the principal amount, plus accrued and unpaid interest and Liquidated Damages, if any, thereon to the applicable redemption date, with all or a portion of the net cash proceeds of one or more Public Equity Offerings; provided that:

(1) at least 65% of the aggregate principal amount of notes issued under the indenture remains outstanding immediately after the occurrence of such redemption (excluding notes held by LBI Media and its Affiliates); and

(2) the redemption occurs within 90 days of the date of the closing of such Public Equity Offering.

Except pursuant to the preceding paragraph, the notes are not redeemable at LBI Media’s option prior to July 15, 2007.

On or after July 15, 2007, LBI Media may redeem all or a part of the notes upon not less than 30 nor more than 60 days’ notice, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest and Liquidated Damages, if any, on the notes redeemed, to the applicable redemption date, if redeemed during the twelve-month period beginning on July 15 of the years indicated below:

Year	Percentage
2007	105.063	%
2008	103.375	%
2009	101.688	%
2010 and thereafter	100.000	%

Mandatory Redemption

LBI Media is not required to make mandatory redemption or sinking fund payments with respect to the notes.

Repurchase at the Option of Holders

Change of Control

If a Change of Control occurs, each Holder of notes will have the right to require LBI Media to repurchase all or any part (equal to $1,000 or an integral multiple of $1,000) of that Holder’s notes pursuant to a Change of Control Offer on the terms set forth in the indenture. In the Change of Control Offer, LBI Media will offer a Change of Control Payment in cash equal to 101% of the aggregate principal amount of notes repurchased plus accrued and unpaid interest and Liquidated Damages, if any, on the notes repurchased, to the date of purchase. Within 30 days following any Change of Control, LBI Media will mail a notice to each Holder describing the

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transaction or transactions that constitute the Change of Control and offering to repurchase notes on the Change of Control Payment Date specified in the notice, which date will be no earlier than 30 days and no later than 60 days from the date such notice is mailed, pursuant to the procedures required by the indenture and described in such notice. LBI Media will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the notes as a result of a Change of Control. To the extent that the provisions of any securities laws or regulations conflict with the Change of Control provisions of the indenture, LBI Media will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Change of Control provisions of the indenture by virtue of such conflict.

On the Change of Control Payment Date, LBI Media will, to the extent lawful:

(1) accept for payment all notes or portions of notes properly tendered pursuant to the Change of Control Offer;

(2) deposit with the paying agent an amount equal to the Change of Control Payment in respect of all notes or portions of notes properly tendered; and

(3) deliver or cause to be delivered to the trustee the notes properly accepted together with an officers’ certificate stating the aggregate principal amount of notes or portions of notes being purchased by LBI Media.

The paying agent will promptly mail to each Holder of notes properly tendered the Change of Control Payment for such notes, and the trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new note equal in principal amount to any unpurchased portion of the notes surrendered, if any; provided that each new note will be in a principal amount of $1,000 or an integral multiple of $1,000. If the Change of Control Payment Date is on or after an interest record date and on or before the related interest payment date, accrued and unpaid interest, if any, will be paid to the Holder in whose name a note is registered at the close of business on such record date, and no additional interest will be payable to holders who tender pursuant to the Change of Control Offer. LBI Media’s ability to repurchase the notes pursuant to a Change of Control Offer may be limited by a number of factors, including obtaining funds necessary to finance the repurchase. See “Risk Factors—We may be unable to raise the funds necessary to finance the offer to repurchase the notes required by the indenture upon certain change of control events.”

Prior to complying with any of the provisions of this “Change of Control” covenant, but in any event within 90 days following a Change of Control, LBI Media will either repay all outstanding Senior Debt or obtain the requisite consents, if any, under all agreements governing outstanding Senior Debt to permit the repurchase of notes required by this covenant. LBI Media will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.

The provisions described above that require LBI Media to make a Change of Control Offer following a Change of Control are applicable whether or not any other provisions of the indenture are applicable. Except as described above with respect to a Change of Control, the indenture does not contain provisions that permit the Holders of the notes to require that LBI Media repurchase or redeem the notes in the event of a takeover, recapitalization or similar transaction.

LBI Media will not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the indenture applicable to a Change of Control Offer made by LBI Media and purchases all notes properly tendered and not withdrawn under the Change of Control Offer.

The definition of Change of Control includes a phrase relating to the direct or indirect sale, lease, transfer, conveyance or other disposition of “all or substantially all” of the properties or assets of LBI Media and its

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Subsidiaries taken as a whole. Although there is a limited body of case law interpreting the phrase “substantially all,” there is no precise established definition of the phrase under applicable law. Accordingly, the ability of a Holder of notes to require LBI Media to repurchase its notes as a result of a sale, lease, transfer, conveyance or other disposition of less than all of the assets of LBI Media and its Subsidiaries taken as a whole to another Person or group may be uncertain.

Asset Sales

LBI Media will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:

(1) LBI Media (or the Restricted Subsidiary, as the case may be) receives consideration at the time of the Asset Sale at least equal to the fair market value of the assets or Equity Interests issued or sold or otherwise disposed of;

(2) the fair market value is determined by LBI Media’s Board of Directors and evidenced by a resolution of the Board of Directors set forth in an officers’ certificate delivered to the trustee; and

(3) at least 75% of the consideration received in the Asset Sale by LBI Media or such Restricted Subsidiary is in the form of cash or Cash Equivalents except to the extent LBI Media is undertaking a Permitted Asset Swap. For purposes of this provision and subparagraph (z) below, each of the following will be deemed to be cash:

(a) any liabilities, as shown on LBI Media’s most recent consolidated balance sheet, of LBI Media or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the notes or any Subsidiary Guarantee) that are assumed by the transferee of any such assets pursuant to a customary novation agreement that releases LBI Media or such Restricted Subsidiary from further liability; and

(b) any securities, notes or other obligations received by LBI Media or any such Restricted Subsidiary from such transferee converted by LBI Media or such Restricted Subsidiary within 90 days into cash or Cash Equivalents, to the extent of the cash or Cash Equivalents received in that conversion.

The 75% limitation referred to in clause (3) above will not apply to any Asset Sale in which the cash or Cash Equivalents portion of the consideration received therefrom, determined in accordance with the preceding provision, is equal to or greater than what the after tax proceeds would have been had such Asset Sale complied with the aforementioned 75% limitation.

Notwithstanding the foregoing, LBI Media or any Restricted Subsidiary is permitted to consummate an Asset Sale without complying with the foregoing if:

(x) LBI Media or such Restricted Subsidiary receives consideration at the time of such Asset Sale at least equal to the fair market value of the assets or other property sold, issued or otherwise disposed of;

(y) the fair market value is determined by LBI Media’s Board of Directors and evidenced by a resolution of the Board of Directors set forth in an officers’ certificate delivered to the trustee; and

(z) at least 75% of the consideration for such Asset Sale constitutes a controlling interest in a Permitted Business, assets used or useful in a Permitted Business and/or cash and Cash Equivalents;

provided, however, that any cash or Cash Equivalents (other than any amount deemed cash under clause (3)(a) of the preceding paragraph) received by LBI Media or such Restricted Subsidiary in connection with any Asset Sale permitted to be consummated under this paragraph shall constitute Net Proceeds subject to the provisions of the next paragraph.

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Within 365 days after the receipt of any Net Proceeds from an Asset Sale, LBI Media or such Restricted Subsidiary may apply those Net Proceeds at its option:

(1) to repay Senior Debt and, if the Senior Debt repaid is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto;

(2) to acquire all or substantially all of the assets of, or a majority of the Voting Stock of, a Permitted Business;

(3) to make capital expenditures that are used or useful in a Permitted Business; or

(4) to acquire other assets that are used or useful in a Permitted Business.

Pending the final application of any Net Proceeds, LBI Media may temporarily reduce revolving credit borrowings or otherwise invest the Net Proceeds in any manner that is not prohibited by the indenture.

Any Net Proceeds from Asset Sales that are not applied or invested as provided in the preceding paragraphs will constitute “Excess Proceeds.” When the aggregate amount of Excess Proceeds exceeds $10.0 million, LBI Media will make an Asset Sale Offer to all Holders of notes and all holders of other Indebtedness that is pari passu with the notes containing provisions similar to those set forth in the indenture with respect to offers to purchase or redeem with the proceeds of sales of assets to purchase the maximum principal amount of notes and such other pari passu Indebtedness that may be purchased out of the Excess Proceeds. The offer price in any Asset Sale Offer will be equal to 100% of principal amount plus accrued and unpaid interest and Liquidated Damages, if any, to the date of purchase, and will be payable in cash. If the date of purchase is on or after an interest record date and on or before the related interest payment date, accrued and unpaid interest, if any, will be paid to the Holder in whose name a Note is registered at the close of business on such record date, and no additional interest will be payable to holders who tender pursuant to the Asset Sale Offer. If any Excess Proceeds remain after consummation of an Asset Sale Offer, LBI Media may use those Excess Proceeds for any purpose not otherwise prohibited by the indenture. If the aggregate principal amount of notes and other pari passu Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the trustee will select the notes and such other pari passu Indebtedness to be purchased on a pro rata basis. Upon completion of each Asset Sale Offer, the amount of Excess Proceeds will be reset at zero.

LBI Media will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with each repurchase of notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the Asset Sale provisions of the indenture, LBI Media will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Asset Sale provisions of the indenture by virtue of such conflict.

LBI Media’s Credit Agreement contains prohibitions limiting LBI Media from purchasing any notes, and also provides that certain change of control or asset sale events with respect to LBI Media constitute a default under the Credit Agreement. Any future agreements relating to Senior Debt to which LBI Media becomes a party may contain similar restrictions and provisions. In the event a Change of Control or Asset Sale occurs at a time when LBI Media is prohibited from purchasing notes, LBI Media could seek the consent of its senior lenders to the purchase of notes or could attempt to refinance the borrowings that contain such prohibition. If LBI Media does not obtain such a consent or repay such borrowings, LBI Media will remain prohibited from purchasing notes. In such case, LBI Media’s failure to purchase tendered notes would constitute an Event of Default under the indenture which would, in turn, constitute a default under such Senior Debt. In such circumstances, the subordination provisions in the indenture would likely restrict payments to the Holders of notes.

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Selection and Notice

If less than all of the notes are to be redeemed or purchased in an offer to purchase at any time, the trustee will select notes for redemption or repurchase as follows:

(1) if the notes are listed on any national securities exchange, in compliance with the requirements of the principal national securities exchange on which the notes are listed; or

(2) if the notes are not listed on any national securities exchange, on a pro rata basis, by lot or by such method as the trustee deems fair and appropriate.

No notes of $1,000 or less can be redeemed in part. Notices of redemption will be mailed by first class mail at least 30 but not more than 60 days before the redemption date to each Holder of notes to be redeemed at its registered address, except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of the notes or a satisfaction and discharge of the indenture. Notices of redemption may not be conditional.

If any note is to be redeemed in part only, the notice of redemption that relates to that note will state the portion of the principal amount of that note that is to be redeemed. A new note in principal amount equal to the unredeemed portion of the original note will be issued in the name of the Holder of notes upon cancellation of the original note. Notes called for redemption become due on the date fixed for redemption. On and after the redemption date, interest ceases to accrue on notes or portions of them called for redemption.

Certain Covenants

Restricted Payments

LBI Media will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:

(1) declare or pay any dividend or make any other payment or distribution on account of LBI Media’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving LBI Media or any of its Restricted Subsidiaries) or to the direct or indirect holders of LBI Media’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of LBI Media and other than dividends or distributions payable to LBI Media or a Restricted Subsidiary of LBI Media);

(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation involving LBI Media) any Equity Interests of LBI Media or any direct or indirect parent of LBI Media (other than any such Equity Interests owned by LBI Media or any of its Restricted Subsidiaries);

(3) make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the notes or the Subsidiary Guarantees, except a payment of interest or principal at the Stated Maturity thereof (except for payments into a trust within one year of the Stated Maturity of any such subordinated Indebtedness which payments effect a defeasance or discharge of such Indebtedness); or

(4) make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”),

unless, at the time of and after giving effect to such Restricted Payment:

(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment; and

(2) LBI Media would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have

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been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Leverage Ratio test set forth in the first paragraph of the covenant described below under the caption “—Incurrence of Indebtedness and Issuance of Preferred Stock;” and

(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by LBI Media and its Restricted Subsidiaries after the date of the indenture (excluding Restricted Payments permitted by clauses (2), (3), (4), (5), (7), (8), (9), (10) and, to the extent that any payment made by Parent pursuant to the terms of the Management Incentive Contracts reduces Consolidated Net Income of LBI Media, (11) of the next succeeding paragraph), is less than the sum, without duplication, of:

(a) 50% of the aggregate Consolidated Net Income of LBI Media (or, in the event such Consolidated Net Income shall be a deficit, minus 100% of such deficit) accrued for the period beginning July 1, 2002 and ending on the last day of LBI Media’s most recent calendar month for which financial information is available to LBI Media ending prior to the date of such proposed Restricted Payment, taken as one accounting period, plus

(b) 100% of the aggregate net cash proceeds received by LBI Media since the date of the indenture from the issue or sale of Equity Interests of LBI Media (other than Disqualified Stock) or Disqualified Stock or debt securities of LBI Media that have been converted into such Equity Interests (other than (i) Equity Interests (or Disqualified Stock or convertible debt securities) sold to a Restricted Subsidiary and (ii) Disqualified Stock or convertible debt securities that have been converted into Disqualified Stock), plus

(c) 100% of the net cash proceeds received by LBI Media as bona fide equity capital contributions since the date of the indenture, plus

(d) the aggregate amount returned in cash with respect to Restricted Investments made after the date of the indenture whether through interest payments, principal payments, dividends or other distributions, plus

(e) the net cash proceeds received by LBI Media or any of its Restricted Subsidiaries from the disposition (other than to a Restricted Subsidiary), retirement or redemption of all or any portion of Restricted Investments made after the date of the indenture, plus

(f) 100% of any cash dividends or other cash distributions received by LBI Media or a Wholly Owned Restricted Subsidiary after the date of the indenture from an Unrestricted Subsidiary to the extent that such dividends or distributions were not otherwise included in Consolidated Net Income for such period and to the extent that such dividends or distributions do not represent payments in respect of taxes attributable to the activities of such Unrestricted Subsidiary.

The preceding provisions will not prohibit:

(1) the payment of any dividend within 60 days after the date of declaration of the dividend, if at the date of declaration the dividend payment would have complied with the provisions of the indenture;

(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of LBI Media or any Guarantor or of any Equity Interests of LBI Media in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Restricted Subsidiary of LBI Media) of, Equity Interests of LBI Media (other than Disqualified Stock); provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;

(3) the defeasance, redemption, repurchase or other acquisition of subordinated Indebtedness of LBI Media or any Guarantor with the net cash proceeds from an incurrence of Permitted Refinancing Indebtedness;

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(4) the declaration and payment of any dividend by a Restricted Subsidiary of LBI Media to the holders of such Restricted Subsidiary’s Equity Interests on a pro rata basis;

(5) the declaration and payment of dividends or distributions or the making of loans by LBI Media to Parent in an amount not to exceed the Permitted Shareholder Tax Distributions and the Permitted Holdings Tax Distributions, but only if at the time of any such declaration, dividend, distribution or loan Parent was an S Corporation or a substantially similar pass-through entity for federal income tax purposes and a QSSS Election was in effect for LBI Media;

(6) the declaration and payment of any dividends or distributions or the making of any loans by LBI Media or any of its Restricted Subsidiaries to Parent to be used for, and in an amount equal to, the amount of any dividends or distributions paid or loans made by Parent to, or the repurchase of any Equity Interests of Parent from, the Principals or their Related Parties, provided that the aggregate amount of all such dividends, distributions and loans to Parent do not exceed $1.0 million in any calendar year;

(7) the repurchase of Equity Interests of LBI Media or any of its Restricted Subsidiaries deemed to occur upon the exercise of stock options upon surrender of Equity Interests to pay the exercise price of such options;

(8) the declaration and payment of any dividends or distributions or the making of any loans to Parent in an amount not to exceed $1.0 million in any calendar year to permit Parent to pay its corporate costs and expenses incurred in the ordinary course of business;

(9) the retirement of any shares of Disqualified Stock of LBI Media by conversion into, or by exchange for, shares of Disqualified Stock of LBI Media, or out of the net cash proceeds of the substantially concurrent sale (other than to a Restricted Subsidiary of LBI Media) of other shares of Disqualified Stock of LBI Media; provided that the Disqualified Stock of LBI Media that replaces the retired shares of Disqualified Stock of LBI Media shall not require the direct or indirect payment of the liquidation preference earlier in time than the final stated maturity of the retired shares of Disqualified Stock of LBI Media;

(10) the cancellation or forgiveness of any loan between LBI Media and/or its Affiliates existing on the date of the indenture or any loan permitted by subparagraphs (5), (6) and (8) above and (11) below (it being understood that any forgiveness or cancellation of such loans made in connection with any Permitted Holdings Tax Distribution or Permitted Shareholder Tax Distribution shall not reduce the amount of subsequent Permitted Holdings Tax Distributions or Permitted Shareholder Tax Distributions); and

(11) the declaration and payment of any dividends or distributions or the making of any loans to Parent for payments required to be made pursuant to the terms of the Management Incentive Contracts in an aggregate amount not to exceed $15.0 million.

The declaration and payment of any dividends or distributions or the making of any loans to Parent permitted by (i) subparagraph (5) above shall not be permitted pursuant thereto at any time when Parent is not an S Corporation or substantially similar pass-through entity for federal income tax purposes and (ii) subparagraphs (6) and (11) above shall not be permitted pursuant thereto at any time following any underwritten primary public offering of common stock of LBI Media or Parent.

The amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the assets or securities proposed to be transferred or issued by LBI Media or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined by the Board of Directors whose resolution with respect thereto will be delivered to the trustee. The Board of Directors’ determination must be based upon an opinion or appraisal issued by an accounting, appraisal or investment banking firm of national standing if the fair market value exceeds $10.0 million.

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Incurrence of Indebtedness and Issuance of Preferred Stock

LBI Media will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and LBI Media will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that LBI Media or any Guarantor may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock or preferred stock if LBI Media’s Leverage Ratio at the time of incurrence of such Indebtedness or the issuance of such Disqualified Stock or such preferred stock, as the case may be, after giving pro forma effect to such incurrence or issuance as of such date and to the use of proceeds therefrom, as if the same had occurred at the beginning of the most recently ended four fiscal quarter period of LBI Media for which internal financial statements are available, would have been no greater than 7.0 to 1.

The first paragraph of this covenant will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):

(1) the incurrence by LBI Media or any Restricted Subsidiary of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of LBI Media and its Subsidiaries thereunder) not to exceed $150.0 million less the aggregate amount of all Net Proceeds of Asset Sales and Relocations applied by LBI Media or any of its Restricted Subsidiaries after the date of the indenture to repay any term Indebtedness under a Credit Facility or to repay any revolving credit Indebtedness under a Credit Facility and effect a corresponding commitment reduction thereunder, in each case for both such term Indebtedness and such revolving credit Indebtedness pursuant to the covenant described above under the caption “—Repurchase at the Option of Holders—Asset Sales”;

(2) the incurrence by LBI Media and its Restricted Subsidiaries of the Existing Indebtedness;

(3) the incurrence by LBI Media and the Guarantors of Indebtedness represented by the notes and the related Subsidiary Guarantees to be issued on the date of the indenture and the Exchange Notes and the related Subsidiary Guarantees to be issued pursuant to the registration rights agreement;

(4) the incurrence by LBI Media or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of LBI Media or such Restricted Subsidiary (whether through the direct purchase of assets or through the acquisition of at least a majority of the Voting Stock of any Person owning such assets), in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed $10.0 million at any time outstanding;

(5) the incurrence by LBI Media or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace, Indebtedness (other than intercompany Indebtedness) that was permitted by the indenture to be incurred under the first paragraph of this covenant or any of clauses (2), (3), (4), (5), (8), (9) or (11) of this paragraph;

(6) the incurrence by LBI Media or any of its Restricted Subsidiaries of intercompany Indebtedness between or among LBI Media and any of its Wholly Owned Restricted Subsidiaries; provided, however, that (a) if LBI Media or any Guarantor is the obligor on such Indebtedness, such Indebtedness must be (i) unsecured and (ii) if the obligee is neither LBI Media nor a Guarantor, expressly subordinated to the prior payment in full in cash of all obligations with respect to the notes (in the case of LBI Media) or the related Subsidiary Guarantee (in the case of a Guarantor); and (b) any subsequent

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issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than LBI Media or a Subsidiary of LBI Media and any sale or other transfer of any such Indebtedness to a Person that is not either LBI Media or a Restricted Subsidiary of LBI Media will be deemed, in each case, to constitute an incurrence of such Indebtedness by LBI Media or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);

(7) the incurrence by LBI Media or any of its Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of hedging (x) interest rate risk with respect to Indebtedness of LBI Media or any Restricted Subsidiary permitted to be incurred under the indenture and which shall have a notional amount no greater than the payments due with respect to the Indebtedness being hedged thereby, or (y) currency exchange rate risk in connection with then existing financial obligations or the acquisition of goods or services and not for purposes of speculation;

(8) guarantees provided under the covenant “—Additional Subsidiary Guarantees” and the guarantee by LBI Media or any Restricted Subsidiary of Indebtedness of LBI Media or a Restricted Subsidiary of LBI Media that was permitted to be incurred by another provision of this covenant;

(9) Indebtedness incurred by LBI Media or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including, without limitation, letters of credit in respect to workers’ compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;

(10) Obligations in respect of performance and surety bonds and completion guarantees provided by LBI Media or any of its Restricted Subsidiaries in the ordinary course of business;

(11) Acquisition Debt of LBI Media or any Restricted Subsidiary if (w) such Acquisition Debt is incurred within 365 days after the date on which the related definitive acquisition agreement was entered into by LBI Media or such Restricted Subsidiary, (x) the aggregate principal amount of such Acquisition Debt is no greater than the aggregate principal amount of Acquisition Debt set forth in a notice from LBI Media to the trustee (an “Incurrence Notice”) within 30 days after the date on which the related definitive acquisition agreement was entered into by LBI Media or such Restricted Subsidiary, which notice shall be executed on LBI Media’s behalf by an executive officer of LBI Media in such capacity and shall describe in reasonable detail the acquisition that such Acquisition Debt will be incurred to finance, (y) after giving pro forma effect to the acquisition described in such Incurrence Notice, LBI Media or such Restricted Subsidiary could have incurred such Acquisition Debt under the indenture, including compliance with the first paragraph of this covenant, as of the date upon which LBI Media delivers such Incurrence Notice to the trustee and (z) such Acquisition Debt is utilized solely to finance the acquisition described in such Incurrence Notice and any other pending acquisitions previously described in one or more Incurrence Notices and which satisfy the foregoing provisions (including to repay or refinance indebtedness or other obligations incurred in connection with such acquisition and to pay related fees and expenses); provided, however, that any Incurrence Notice given hereunder may be withdrawn or the amount of Acquisition Debt referred to therein may be reduced at any time prior to the incurrence of such Acquisition Debt;

(12) the incurrence by LBI Media’s Unrestricted Subsidiaries of Non-Recourse Debt, provided, however, that if any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event will be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary of LBI Media that was not permitted by this clause (12);

(13) the incurrence by LBI Media or any Restricted Subsidiary of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds in the ordinary course of business and such Indebtedness is extinguished within five business days after notice thereof;

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(14) Indebtedness in respect of the Shop At Home Relocation Profits to the extent required to be paid to the Shop At Home Sellers pursuant to the Shop At Home Acquisition Documents; and

(15) the incurrence by LBI Media or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (15), not to exceed $10.0 million.

For purposes of determining compliance with this “Incurrence of Indebtedness and Issuance of Preferred Stock” covenant, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (15) above, or is entitled to be incurred pursuant to the first paragraph of this covenant, LBI Media will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this covenant. Indebtedness under the Credit Facility, including Guarantees of such Indebtedness, on the date on which notes are first issued and authenticated under the indenture will be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt.

Accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness will not be deemed to be an incurrence of Indebtedness for purposes of this covenant.

No Senior Subordinated Debt

LBI Media will not incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is subordinate or junior in right of payment to any Senior Debt of LBI Media and senior in any respect in right of payment to the notes. No Guarantor will incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is subordinate or junior in right of payment to the Senior Debt of such Guarantor and senior in any respect in right of payment to such Guarantor’s Subsidiary Guarantee.

Liens

LBI Media will not, and will not permit any of its Subsidiaries to, directly or indirectly, create, incur, assume or suffer to exist any Lien of any kind securing Indebtedness or trade payables on any asset now owned or hereafter acquired, except Permitted Liens.

Dividend and Other Payment Restrictions Affecting Subsidiaries

LBI Media will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary to:

(1) pay dividends or make any other distributions on its Capital Stock to LBI Media or any of its Restricted Subsidiaries, or with respect to any other interest or participation in, or measured by, its profits, or pay any indebtedness owed to LBI Media or any of its Restricted Subsidiaries;

(2) make loans or advances to LBI Media or any of its Restricted Subsidiaries; or

(3) transfer any of its properties or assets to LBI Media or any of its Restricted Subsidiaries.

However, the preceding restrictions will not apply to encumbrances or restrictions existing under or by reason of:

(1) agreements governing Existing Indebtedness and Credit Facilities as in effect on the date of the indenture and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of those agreements; provided that the amendments, modifications, restatements, renewals, increases, supplements, refundings, replacement or refinancings

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are not materially less favorable to the Holders of the notes than those contained in those agreements on the date of the indenture;

(2) agreements governing Senior Debt permitted to be incurred under the indenture; provided, that provisions relating to such encumbrances or restrictions are no more restrictive, taken as a whole, than those provisions contained in the Credit Facility on the date of the indenture;

(3) the indenture, the notes and the Subsidiary Guarantees;

(4) applicable law, rule, regulation or order;

(5) any instrument governing Indebtedness or Capital Stock of a Person acquired by LBI Media or any of its Restricted Subsidiaries as in effect at the time of such acquisition (except to the extent such Indebtedness or Capital Stock was incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired; provided that, in the case of Indebtedness, such Indebtedness was permitted by the terms of the indenture to be incurred;

(6) customary non-assignment provisions in leases and other agreements entered into in the ordinary course of business;

(7) purchase money obligations (including Capital Lease Obligations) for property acquired in the ordinary course of business that impose restrictions on that property of the nature described in clause (3) of the preceding paragraph;

(8) Permitted Refinancing Indebtedness; provided that the restrictions contained in the agreements governing such Permitted Refinancing Indebtedness are no more restrictive, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced;

(9) Liens securing Indebtedness or other obligations otherwise permitted to be incurred under the provisions of the covenant described above under the caption “—Liens” that limit the right of the debtor to dispose of the assets subject to such Liens;

(10) provisions with respect to the disposition or distribution of assets or property in joint venture agreements, asset sale agreements, stock sale agreements and other similar agreements entered into in the ordinary course of business;

(11) restrictions on cash or other deposits or net worth imposed by customers under contracts or net worth provisions contained in leases and other agreements entered into in the ordinary course of business;

(12) provisions contained in the Parent Securities Purchase Documents; provided, however, that any amendment or modification of such provisions after the date of the indenture shall be no more restrictive, taken as a whole, than those provisions contained in the Parent Securities Purchase Documents on the date of the indenture; and

(13) customary restrictions with respect to a Restricted Subsidiary pursuant to an agreement entered into for the sale or disposition of all or substantially all of the Capital Stock or assets of such Restricted Subsidiary pending the closing of such sale or disposition; provided, that such restrictions apply solely to the Capital Stock or assets of the Restricted Subsidiary that is being sold.

Merger, Consolidation or Sale of Assets

LBI Media may not, directly or indirectly: (1) consolidate or merge with or into another Person (whether or not LBI Media is the surviving corporation); or (2) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of LBI Media and its Restricted Subsidiaries taken as a whole, in one or more related transactions, to another Person unless:

(1) either: (a) LBI Media is the surviving corporation; or (b) the Person formed by or surviving any such consolidation or merger (if other than LBI Media) or to which such sale, assignment, transfer,

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conveyance or other disposition has been made is a corporation organized or existing under the laws of the United States, any state of the United States or the District of Columbia;

(2) the Person formed by or surviving any such consolidation or merger (if other than LBI Media) or the Person to which such sale, assignment, transfer, conveyance or other disposition has been made assumes all the obligations of LBI Media under the notes, the indenture and the registration rights agreement pursuant to agreements reasonably satisfactory to the trustee;

(3) immediately after such transaction, no Default or Event of Default exists; and

(4) LBI Media or the Person formed by or surviving any such consolidation or merger (if other than LBI Media), or to which such sale, assignment, transfer, conveyance or other disposition has been made (a) would, on the date of such transaction after giving pro forma effect thereto and any related financing transactions as if the same had occurred at the beginning of the applicable four-quarter period, be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Leverage Ratio test set forth in the first paragraph of the covenant described above under the caption “—Incurrence of Indebtedness and Issuance of Preferred Stock” or (b) would have a lower Leverage Ratio immediately after the transaction, after giving pro forma effect to the transaction as if the transaction had occurred at the beginning of the applicable four quarter period, than LBI Media’s Leverage Ratio immediately prior to the transaction.

In addition, LBI Media may not, directly or indirectly, lease all or substantially all of its properties or assets, in one or more related transactions, to any other Person. This “Merger, Consolidation or Sale of Assets” covenant will not prohibit (i) any sale, assignment, transfer, conveyance or other disposition of assets between or among LBI Media and any of its Wholly Owned Restricted Subsidiaries, (ii) any Restricted Subsidiary from consolidating with, merging into or transferring all or part of its assets to LBI Media or any Restricted Subsidiary, (iii) LBI Media from merging with an Affiliate incorporated solely for the purpose of reincorporating LBI Media in another jurisdiction to realize tax or other benefits, or (iv) Intermediate Holdings from merging with and into LBI Media following the completion of the offering of the old notes on July 9, 2002.

The indenture provides that upon any consolidation, combination or merger or any transfer of all or substantially all of the assets of LBI Media in accordance with the foregoing, in which LBI Media is not the surviving corporation, the surviving Person formed by such consolidation or into which LBI Media is merged or to which such conveyance, lease or transfer is made shall succeed to, and be substituted for, and may exercise every right and power of, LBI Media under the indenture and the notes with the same effect as if such surviving Person had been named as such.

Transactions with Affiliates

LBI Media will not, and will not permit any of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate (each, an “Affiliate Transaction”), unless:

(1) the Affiliate Transaction is on terms that are no less favorable to LBI Media or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by LBI Media or such Restricted Subsidiary with an unrelated Person; and

(2) LBI Media delivers to the trustee:

(a) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $1.0 million, a resolution of the Board of Directors set forth in an officers’ certificate certifying that such Affiliate Transaction complies with this covenant and that such Affiliate Transaction has been approved by a majority of the members of the Board

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of Directors, which approval, if the Board of Directors includes disinterested members at such time, shall include the approval of at least one disinterested member; and

(b) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $5.0 million, an opinion as to the fairness to LBI Media of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm of national standing; provided, that upon the election or appointment of one or more disinterested members to the Board of Directors, an opinion as to fairness required by this paragraph (b) will only be required for Affiliate Transactions involving aggregate consideration in excess of $10.0 million.

The following items will not be deemed to be Affiliate Transactions and, therefore, will not be subject to the provisions of the prior paragraph:

(1) any employment agreement or other compensation arrangement entered into by LBI Media or any of its Restricted Subsidiaries in the ordinary course of business and the payment of compensation and the reimbursement of expenses pursuant thereto;

(2) transactions between or among LBI Media and/or any of its Restricted Subsidiaries;

(3) transactions with a Person that is an Affiliate of LBI Media solely because LBI Media owns an Equity Interest in, or controls, such Person;

(4) payment of reasonable fees and expenses to directors;

(5) indemnification of officers and directors of LBI Media or any Restricted Subsidiary pursuant to reasonable and customary indemnification provisions;

(6) sales of Equity Interests (other than Disqualified Stock) to Affiliates of LBI Media;

(7) Restricted Payments that are permitted by the provisions of the indenture described above under the caption “—Restricted Payments,” and Permitted Investments;

(8) transactions under any contract or agreement of LBI Media or any Restricted Subsidiary in effect on the date of the indenture, in each case, as the same may be amended, modified or replaced from time to time so long as any such amendment, modification or replacement is no less favorable to LBI Media and its Restricted Subsidiaries than the contract or agreement as in effect on the date of the indenture;

(9) services provided to any Unrestricted Subsidiary in the ordinary course of business, which the Board of Directors has determined, pursuant to a resolution thereof, are provided on terms at least as favorable to LBI Media and its Restricted Subsidiaries as those that would have been obtained in a comparable transaction with an unrelated Person;

(10) payments of commissions and fees to, and on-going business dealings with, Spanish Media Rep Team, Inc. in the ordinary course of business;

(11) payments of outstanding principal and interest on the Liberman Subordinated Debt on the date of the indenture; and

(12) any transactions permitted under the covenant entitled “Merger, Consolidation or Sale of Assets,” including the merger of Intermediate Holdings with and into LBI Media.

Additional Subsidiary Guarantees

If LBI Media or any of its Subsidiaries acquires or creates another Domestic Subsidiary after the date of the indenture, excluding all Subsidiaries that have been properly designated as Unrestricted Subsidiaries in accordance with the indenture for so long as they continue to constitute Unrestricted Subsidiaries, then that newly acquired or created Domestic Subsidiary will become a Guarantor and execute a supplemental indenture and deliver an opinion of counsel satisfactory to the trustee within ten Business Days of the date on which it was acquired or created.

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Designation of Restricted and Unrestricted Subsidiaries

The Board of Directors may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if that designation would not cause a Default. If a Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate fair market value of all outstanding Investments owned by LBI Media and its Restricted Subsidiaries in the Subsidiary properly designated will be deemed to be an Investment made as of the time of the designation and will reduce the amount available for Restricted Payments under the first paragraph of the covenant described above under the caption “—Restricted Payments” or Permitted Investments, as determined by LBI Media. That designation will only be permitted if the Investment would be permitted at that time and if the Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. The Board of Directors may redesignate any Unrestricted Subsidiary to be a Restricted Subsidiary if the redesignation would not cause a Default.

Limitation on Issuances and Sales of Equity Interests in Wholly Owned Restricted Subsidiaries

LBI Media will not, and will not permit any of its Subsidiaries to, transfer, convey, sell, lease or otherwise dispose of any Equity Interests in any Wholly Owned Restricted Subsidiary of LBI Media to any Person (other than LBI Media or another Wholly Owned Restricted Subsidiary of LBI Media), unless:

(1) as a result of such transfer, conveyance, sale, lease or other disposition or as a result of such issuance described below, such Restricted Subsidiary no longer constitutes a Subsidiary; and

(2) the cash Net Proceeds from such transfer, conveyance, sale, lease or other disposition are applied in accordance with the covenant described above under the caption “—Repurchase at the Option of Holders—Asset Sales.”

In addition, LBI Media will not permit any Wholly Owned Restricted Subsidiary of LBI Media to issue any of its Equity Interests (other than, if necessary, shares of its Capital Stock constituting directors’ qualifying shares) to any Person other than to LBI Media or a Wholly Owned Restricted Subsidiary of LBI Media unless the terms of clauses (1) and (2) above are satisfied.

Business Activities

Until the consummation of a Public Equity Offering, LBI Media will not, and will not permit any Subsidiary to, engage in any business other than Permitted Businesses, except to such extent as would not be material to LBI Media and its Subsidiaries taken as a whole.

Payments for Consent

LBI Media will not, and will not permit any of its Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration to or for the benefit of any Holder of notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the indenture or the notes unless such consideration is offered to be paid and is paid to all Holders of the notes that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement.

Reports

Whether or not required by the SEC, so long as any notes are outstanding, LBI Media will furnish to the Holders of notes, within the time periods specified in the SEC’s rules and regulations:

(1) all quarterly and annual financial information that would be required to be contained in a filing with the SEC on Forms 10-Q and 10-K if LBI Media were required to file such Forms, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and, with respect to the annual information only, a report on the annual financial statements by LBI Media’s certified independent accountants; and

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(2) all current reports that would be required to be filed with the SEC on Form 8-K if LBI Media were required to file such reports.

If LBI Media has designated any of its Subsidiaries as Unrestricted Subsidiaries, then the quarterly and annual financial information required by the preceding paragraph will include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, and in Management’s Discussion and Analysis of Financial Condition and Results of Operations, of the financial condition and results of operations of LBI Media and its Restricted Subsidiaries separate from the financial condition and results of operations of the Unrestricted Subsidiaries of LBI Media. LBI Media will be deemed to have satisfied such requirements if Parent files and provides reports, documents and information of the types otherwise required by this paragraph and the preceding paragraph within the applicable time periods and LBI Media is not required to file such reports, documents and information separately under the applicable rules and regulations of the SEC (after giving effect to any exemptive relief) because of the filings by Parent.

In addition, following the consummation of the exchange offer contemplated by the registration rights agreement, whether or not required by the SEC, LBI Media will file a copy of all of the information and reports referred to in clauses (1) and (2) above with the SEC for public availability within the time periods specified in the SEC’s rules and regulations (unless the SEC will not accept such a filing) and make such information available to securities analysts and prospective investors upon request. In addition, LBI Media and the Subsidiary Guarantors have agreed that, for so long as any notes remain outstanding, they will furnish to the Holders and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

Events of Default and Remedies

Each of the following is an Event of Default:

(1) default for 30 days in the payment when due of interest on, or Liquidated Damages with respect to, the notes whether or not prohibited by the subordination provisions of the indenture;

(2) default in payment when due of the principal of, or premium, if any, on the notes, whether or not prohibited by the subordination provisions of the indenture;

(3) failure by LBI Media or any of its Restricted Subsidiaries to comply with the provisions described under the captions “—Repurchase at the Option of Holders—Change of Control” or “—Certain Covenants—Merger, Consolidation or Sale of Assets;”

(4) failure by LBI Media or any of its Restricted Subsidiaries for 30 days after notice from the trustee or Holders of at least 25% in aggregate principal amount of the outstanding notes to comply with the provisions described under the captions “—Repurchase at the Option of Holders—Asset Sales,” “—Certain Covenants—Restricted Payments” or “—Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock;”

(5) failure by LBI Media or any of its Subsidiaries for 60 days after notice from the trustee or Holders of at least 25% in aggregate principal amount of the outstanding notes to comply with any of the other agreements in the indenture;

(6) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by LBI Media or any of its Restricted Subsidiaries (or the payment of which is guaranteed by LBI Media or any of its Restricted Subsidiaries) whether such Indebtedness or guarantee now exists, or is created after the date of the indenture, if that default:

(a) is caused by a failure to pay principal of such Indebtedness at the final stated maturity thereof (giving effect to any applicable grace periods and any extensions thereof) (a “Payment Default”); or

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(b) results in the acceleration of such Indebtedness prior to its express maturity,

and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been and continues to be a Payment Default or the maturity of which has been and continues to be so accelerated, aggregates $5.0 million or more;

(7) failure by LBI Media or any of its Restricted Subsidiaries to pay final judgments aggregating in excess of $5.0 million (not covered by insurance), which judgments are not paid, vacated, discharged, bonded or stayed for a period of 60 days;

(8) the incurrence by Parent of Specified Parent Debt (other than the refinancing of any indebtedness under the Existing Parent Notes) if, at the time of such incurrence and after giving pro forma effect to such incurrence as of such date and to the use of proceeds therefrom, as if the same had occurred at the beginning of the most recently ended four fiscal quarter period of Parent for which internal financial statements are available, the Parent Debt Ratio would have exceeded 7.0 to 1 and the failure for 30 days after notice from the trustee or Holders of at least 25% in aggregate principal amount of the outstanding notes to cure such default;

(9) except as permitted by the indenture, any Subsidiary Guarantee of a Significant Subsidiary shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any Guarantor which is a Significant Subsidiary, or any Person acting on behalf of any Guarantor which is a Significant Subsidiary, shall deny or disaffirm its obligations under its Subsidiary Guarantee; provided, however, that an Event of Default will also be deemed to occur with respect to Subsidiary Guarantors that are not Significant Subsidiaries (“Insignificant Subsidiaries”) if the Subsidiary Guarantees of such Insignificant Subsidiaries are held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or such Insignificant Subsidiaries deny or disaffirm their obligations under their Subsidiary Guarantees (other than in accordance with the terms of such Subsidiary Guarantee), if when aggregated and taken as a whole the Insignificant Subsidiaries subject to this clause (9) would meet the definition of a Significant Subsidiary; and

(10) certain events of bankruptcy or insolvency described in the indenture with respect to LBI Media or any of its Significant Subsidiaries.

In the event of a declaration of acceleration of the notes because an Event of Default has occurred and is continuing as a result of the acceleration of any Indebtedness described in clause (6) of the preceding paragraph, the declaration of acceleration of the notes shall be automatically annulled if the holders of any Indebtedness described in clause (6) of the preceding paragraph have rescinded the declaration of acceleration in respect of the Indebtedness within 30 days of the date of the declaration and if;

(1) the annulment of the acceleration of the notes would not conflict with any judgment or decree of a court of competent jurisdiction; and

(2) all existing Events of Default, except nonpayment of principal or interest on the notes that became due solely because of the acceleration of the notes, have been cured or waived.

In the case of an Event of Default arising from certain events of bankruptcy or insolvency, with respect to LBI Media, any Restricted Subsidiary that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary, all outstanding notes will become due and payable immediately without further action or notice. If any other Event of Default occurs and is continuing, the trustee or the Holders of at least 25% in principal amount of the then outstanding notes may declare all the notes to be due and payable immediately.

Holders of the notes may not enforce the indenture or the notes except as provided in the indenture. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding notes may direct the trustee in its exercise of any trust or power. The trustee may withhold from Holders of the notes notice of any continuing Default or Event of Default if it determines that withholding notice is in their interest, except a Default or Event of Default relating to the payment of principal or interest or Liquidated Damages.

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The Holders of a majority in aggregate principal amount of the notes then outstanding by notice to the trustee may on behalf of the Holders of all of the notes waive any existing Default or Event of Default and its consequences under the indenture except a continuing Default or Event of Default in the payment of interest or Liquidated Damages on, or the principal of, the notes. The Holders of a majority in aggregate principal amount of the then outstanding notes by written notice to the trustee may on behalf of all of the Holders rescind an acceleration and its consequences if the rescission would not conflict with a judgment or decree and if all existing Events of Default (except nonpayment of principal, interest or premium that has become due solely because of the acceleration) have been cured or waived.

In the case of any Event of Default occurring by reason of any willful action or inaction taken or not taken by or on behalf of LBI Media with the intention of avoiding payment of the premium that LBI Media would have had to pay if LBI Media then had elected to redeem the notes pursuant to the optional redemption provisions of the indenture, an equivalent premium will also become and be immediately due and payable to the extent permitted by law upon the acceleration of the notes. If an Event of Default occurs prior to July 15, 2007, by reason of any willful action (or inaction) taken (or not taken) by or on behalf of LBI Media with the intention of avoiding the prohibition on redemption of the notes prior to July 15, 2007, then the premium specified in the indenture will also become immediately due and payable to the extent permitted by law upon the acceleration of the notes.

LBI Media is required to deliver to the trustee annually a statement regarding compliance with the indenture. Upon becoming aware of any Default or Event of Default, LBI Media is required to deliver to the trustee a statement specifying such Default or Event of Default.

No Personal Liability of Directors, Officers, Employees and Stockholders

No director, officer, employee, incorporator or stockholder of LBI Media or any Guarantor, as such, will have any liability for any obligations of LBI Media or the Guarantors under the notes, the indenture, the Subsidiary Guarantees, the registration rights agreement or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of notes by accepting a note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the notes. The waiver may not be effective to waive liabilities under the federal securities laws.

Legal Defeasance and Covenant Defeasance

LBI Media may, at its option and at any time, elect to have all of its obligations discharged with respect to the outstanding notes and all obligations of the Guarantors discharged with respect to their Subsidiary Guarantees (“Legal Defeasance”) except for:

(1) the rights of Holders of outstanding notes to receive payments in respect of the principal of, or interest or premium and Liquidated Damages, if any, on such notes when such payments are due from the trust referred to below;

(2) LBI Media’s obligations with respect to the notes concerning issuing temporary notes, registration of notes, mutilated, destroyed, lost or stolen notes and the maintenance of an office or agency for payment and money for security payments held in trust;

(3) the rights, powers, trusts, duties and immunities of the trustee, and LBI Media’s and the Guarantor’s obligations in connection therewith; and

(4) the Legal Defeasance provisions of the indenture.

In addition, LBI Media may, at its option and at any time, elect to have the obligations of LBI Media and the Guarantors released with respect to certain covenants that are described in the indenture (“Covenant Defeasance”) and thereafter any omission to comply with those covenants will not constitute a Default or Event of Default with respect to the notes. In the event Covenant Defeasance occurs, certain events (not including non-payment, bankruptcy, receivership, rehabilitation and insolvency events) described under “—Events of Default and Remedies” will no longer constitute an Event of Default with respect to the notes.

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In order to exercise either Legal Defeasance or Covenant Defeasance:

(1) LBI Media must irrevocably deposit with the trustee, in trust, for the benefit of the Holders of the notes, cash in U.S. dollars, non-callable Government Securities, or a combination of cash in U.S. dollars and non-callable Government Securities, in amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, or interest and premium and Liquidated Damages, if any, on the outstanding notes on the stated maturity or on the applicable redemption date, as the case may be, and LBI Media must specify whether the notes are being defeased to maturity or to a particular redemption date;

(2) in the case of Legal Defeasance, LBI Media has delivered to the trustee an opinion of counsel reasonably acceptable to the trustee confirming that (a) LBI Media has received from, or there has been published by, the Internal Revenue Service a ruling or (b) since the date of the indenture, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such opinion of counsel will confirm that, the Holders of the outstanding notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal 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 Legal Defeasance had not occurred;

(3) in the case of Covenant Defeasance, LBI Media has delivered to the trustee an opinion of counsel reasonably acceptable to the trustee confirming that the Holders of the outstanding 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;

(4) no Default or Event of Default has occurred and is continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit);

(5) such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under any material agreement or instrument (other than the indenture) to which LBI Media or any of its Restricted Subsidiaries is a party or by which LBI Media or any of its Restricted Subsidiaries is bound;

(6) LBI Media must deliver to the trustee an officers’ certificate stating that the deposit was not made by LBI Media with the intent of preferring the Holders of notes over the other creditors of LBI Media with the intent of defeating, hindering, delaying or defrauding creditors of LBI Media or others; and

(7) LBI Media must deliver to the trustee an officers’ certificate and an opinion of counsel, each stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance have been complied with.

Amendment, Supplement and Waiver

Except as provided in the next three succeeding paragraphs, the indenture or the notes may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the notes then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, notes), and any existing default or compliance with any provision of the indenture or the notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding notes (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, notes).

Without the consent of each Holder affected, an amendment or waiver may not (with respect to any notes held by a non-consenting Holder):

(1) reduce the principal amount of notes whose Holders must consent to an amendment, supplement or waiver;

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(2) reduce the principal of or change the fixed maturity of any note or alter the provisions with respect to the redemption of the notes (other than provisions relating to the covenants described above under the caption “—Repurchase at the Option of Holders”);

(3) reduce the rate of or change the time for payment of interest on any note, including default interest;

(4) waive a Default or Event of Default in the payment of principal of, or interest or premium, or Liquidated Damages, if any, on the notes (except a rescission of acceleration of the notes by the Holders of at least a majority in aggregate principal amount of the notes and a waiver of the payment default that resulted from such acceleration);

(5) make any note payable in money other than that stated in the notes;

(6) make any change in the provisions of the indenture relating to waivers of past Defaults or the rights of Holders of notes to receive payments of principal of, or interest or premium or Liquidated Damages, if any, on the notes;

(7) waive a redemption payment with respect to any note (other than a payment required by one of the covenants described above under the caption “—Repurchase at the Option of Holders”); or

(8) make any change in the preceding amendment and waiver provisions.

In addition, (x) any amendment to, or waiver of, the provisions of the indenture relating to subordination that adversely affects the rights of the Holders of the notes or (y) any release of any Guarantor from any of its obligations under its Subsidiary Guarantee, except in accordance with the terms of the indenture, will require the consent of the Holders of at least 75% in aggregate principal amount of notes then outstanding.

Notwithstanding the preceding, without the consent of any Holder of notes, LBI Media, the Guarantors and the trustee may amend or supplement the indenture or the notes:

(1) to cure any ambiguity, defect or inconsistency;

(2) to provide for uncertificated notes in addition to or in place of certificated notes;

(3) to provide for the assumption of LBI Media’s obligations to Holders of notes in the case of a merger or consolidation or sale of all or substantially all of LBI Media’s assets;

(4) to make any change that would provide any additional rights or benefits to the Holders of notes or that does not adversely affect the legal rights under the indenture of any such Holder;

(5) to comply with requirements of the SEC in order to effect or maintain the qualification of the indenture under the Trust Indenture Act;

(6) to provide for the issuance of additional notes in accordance with the limitations set forth in the indenture as of its date; or

(7) to allow any Guarantor to execute a supplemental indenture and/or a Guarantee with respect to the notes.

However, no amendment may be made to the subordination provisions of the indenture that adversely affects the rights of any holder of Senior Debt then outstanding unless the holders of such Senior Debt (or any group or representative thereof authorized to give a consent) consent to such change.

The consent of the Holders of notes is not necessary under the indenture to approve the particular form of any proposed amendment. It is sufficient if such consent approves the substance of the proposed amendment. After any amendment under the indenture becomes effective, LBI Media is required to mail to the Holders a notice briefly describing such amendment. However, the failure to give such notice to all the Holders, or any defect therein, will not impair or affect the validity of the amendment.

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Satisfaction and Discharge

The indenture will be discharged and will cease to be of further effect as to all notes issued thereunder, when:

(1) either:

(a) all notes that have been authenticated, except lost, stolen or destroyed notes that have been replaced or paid and notes for whose payment money has been deposited in trust and thereafter repaid to LBI Media, have been delivered to the trustee for cancellation; or

(b) all notes that have not been delivered to the trustee for cancellation have become due and payable by reason of the mailing of a notice of redemption or otherwise or will become due and payable within one year and LBI Media or any Guarantor has irrevocably deposited or caused to be deposited with the trustee as trust funds in trust solely for the benefit of the Holders, cash in U.S. dollars, non-callable Government Securities, or a combination of cash in U.S. dollars and non-callable Government Securities, in amounts as will be sufficient without consideration of any reinvestment of interest, to pay and discharge the entire indebtedness on the notes not delivered to the trustee for cancellation for principal, premium and Liquidated Damages, if any, and accrued interest to the date of maturity or redemption;

(2) no Default or Event of Default has occurred and is continuing on the date of the deposit or will occur as a result of the deposit and the deposit will not result in a breach or violation of, or constitute a default under, any other instrument to which LBI Media or any Guarantor is a party or by which LBI Media or any Guarantor is bound;

(3) LBI Media or any Guarantor has paid or caused to be paid all sums payable by it under the indenture; and

(4) LBI Media has delivered irrevocable instructions to the trustee under the indenture to apply the deposited money toward the payment of the notes at maturity or the redemption date, as the case may be.

In addition, LBI Media must deliver an officers’ certificate and an opinion of counsel to the trustee stating that all conditions precedent to satisfaction and discharge have been satisfied.

Concerning the Trustee

If the trustee becomes a creditor of LBI Media or any Guarantor, the indenture limits its right to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The trustee will be permitted to engage in other transactions; however, if it acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the SEC for permission to continue or resign.

The Holders of a majority in principal amount of the then outstanding notes will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the trustee, subject to certain exceptions. The indenture provides that in case an Event of Default occurs and is continuing, the trustee will be required, in the exercise of its power, to use the degree of care of a prudent man in the conduct of his own affairs. Subject to such provisions, the trustee will be under no obligation to exercise any of its rights or powers under the indenture at the request of any Holder of notes, unless such Holder has offered to the trustee security and indemnity satisfactory to it against any loss, liability or expense.

Additional Information

Anyone who receives this prospectus may obtain a copy of the indenture and registration rights agreement without charge by writing to LBI Media, Inc., 1845 West Empire Avenue, Burbank, California, 91504, Attention: Lenard Liberman.

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Certain Definitions

Set forth below are certain defined terms used in the indenture. Reference is made to the indenture for a full disclosure of all such terms, as well as any other capitalized terms used herein for which no definition is provided.

“Acquired Debt” means, with respect to any specified Person:

(1) Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Subsidiary of such specified Person, whether or not such Indebtedness is incurred in connection with, or in contemplation of, such other Person merging with or into, or becoming a Subsidiary of, such specified Person; and

(2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.

“Acquisition Debt” means Indebtedness, the proceeds of which are utilized solely to acquire all or a portion of the assets or a majority of the Voting Stock of an existing radio or television broadcasting business or station or any other business engaged in a Permitted Business.

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control,” as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise. For purposes of this definition, the terms “controlling,” “controlled by” and “under common control with” have correlative meanings.

“Asset Sale” means:

(1) the sale, lease, conveyance or other disposition of any assets or rights, other than in the ordinary course of business; provided that the sale, conveyance or other disposition of all or substantially all of the assets (which term shall include Media Licenses) owned by LBI Media and its Subsidiaries taken as a whole will be governed by the provisions of the indenture described above under the caption “—Repurchase at the Option of Holders—Change of Control” and/or the provisions described above under the caption “—Certain Covenants—Merger, Consolidation or Sale of Assets” and not by the provisions of the Asset Sale covenant; and

(2) the issuance of Equity Interests by any Restricted Subsidiary or the sale of Equity Interests in any Restricted Subsidiary.

Notwithstanding the preceding, none of the following items will be deemed to be an Asset Sale:

(1) any single transaction or series of related transactions that involves assets or rights having a fair market value of less than $2.0 million;

(2) a transfer of assets or rights between or among LBI Media and its Wholly Owned Restricted Subsidiaries;

(3) an issuance of Equity Interests by a Subsidiary of LBI Media to LBI Media or to another Subsidiary of LBI Media;

(4) the sale or lease of equipment, inventory, accounts receivable or other assets or rights in the ordinary course of business;

(5) the disposition of equipment no longer used or useful in the business of LBI Media or any of its Restricted Subsidiaries;

(6) the sale and leaseback of any assets within 90 days of the acquisition thereof;

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(7) a Relocation; provided, however, that any Net Proceeds received by LBI Media or any of its Restricted Subsidiaries in exchange therefore shall be subject to the restrictions set forth in the Asset Sale covenant;

(8) the sale or other disposition of Cash Equivalents;

(9) a Restricted Payment that is permitted by the covenant described above under the caption “—Certain Covenants—Restricted Payments,” or a Permitted Investment;

(10) the sale of the Hollywood Office Property;

(11) foreclosures on assets;

(12) Permitted Liens;

(13) the grant of any license of patents, trademarks, registrations therefor and other similar intellectual property in the ordinary course of business; and

(14) the cancellation or forgiveness of any loan made by LBI Media or any of its Restricted Subsidiaries (i) permitted by clause (10) of the second paragraph under the caption “—Certain Covenants—Restricted Payments” or (ii) permitted by clauses (8), (9), (10) or (14) of the definition of “Permitted Investments.”

“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person” will be deemed to have beneficial ownership of all securities that such “person” has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition. The terms “Beneficially Owns” and “Beneficially Owned” have a corresponding meaning.

“Board of Directors” means:

(1) with respect to a corporation, the board of directors of the corporation;

(2) with respect to a partnership, the general partner of which is a corporation, the board of directors of the general partner of the partnership; and

(3) with respect to any other Person, the board or committee of such Person serving a similar function.

“California Taxable Income” means the taxable income of Parent for any taxable year computed pursuant to Section 23802 (or any successor provision) of the California Revenue and Tax Code but calculated as if the taxable year of Parent ended on the date with respect to which such taxable income calculation is made, reduced, but not below zero, by the amount of any Suspended Losses which are treated as incurred by Parent in, and allowed as deductions on the tax returns of Parent’s stockholders for, such taxable year.

“Capital Lease Obligation” means, at the time any determination is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a balance sheet in accordance with GAAP.

“Capital Stock” means:

(1) in the case of a corporation, corporate stock;

(2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

(3) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and

(4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

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“Cash Equivalents” means:

(1) United States dollars;

(2) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality of the United States government having maturities of not more than one year from the date of acquisition;

(3) certificates of deposit and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers’ acceptances with maturities not exceeding one year and overnight bank deposits, in each case, with any lender party to the Credit Facility or with any domestic commercial bank having capital and surplus in excess of $500.0 million and a Thomson Bank Watch Rating of “B” or better;

(4) repurchase obligations with a term of not more than 30 days for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above;

(5) commercial paper having one of the two highest ratings obtainable from Moody’s Investors Service, Inc. or Standard & Poor’s Rating Services and in each case maturing within one year after the date of acquisition; and

(6) money market funds at least 95% of the assets of which constitute Cash Equivalents of the kinds described in clauses (1) through (5) of this definition.

“Change of Control” means the occurrence of any of the following:

(1) the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets (which term shall include Media Licenses) of LBI Media and its Restricted Subsidiaries taken as a whole to any “person” (as that term is used in Section 13(d)(3) of the Exchange Act) other than a Principal or a Related Party of a Principal;

(2) the adoption of a plan relating to the liquidation or dissolution of LBI Media; or

(3) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any “person” (as defined above), other than the Principals and their Related Parties, becomes the Beneficial Owner, directly or indirectly, of more than 50% of the Voting Stock of LBI Media, measured by voting power rather than number of shares.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Consolidated Cash Flow” means, with respect to any specified Person for any period, the Consolidated Net Income of such Person for such period plus:

(1) an amount equal to any extraordinary loss plus any net loss (together with any related provision for taxes) realized by such Person or any of the Restricted Subsidiaries in connection with (a) an Asset Sale (including any sale and leaseback transaction), or (b) the disposition of any securities by such Person or any of the Restricted Subsidiaries or the extinguishment of any Indebtedness of such Person or any of the Restricted Subsidiaries, to the extent such losses were deducted in computing such Consolidated Net Income; plus

(2) provision for taxes based on income or profits of such Person and the Restricted Subsidiaries for such period (and to the extent not included in the foregoing, Permitted Shareholder Tax Distributions and Permitted Holdings Tax Distributions), to the extent that such provision for taxes, Permitted Shareholder Tax Distributions or Permitted Holdings Tax Distributions were deducted in computing such Consolidated Net Income; plus

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(3) consolidated interest expense of such Person and the Restricted Subsidiaries for such period, whether paid or accrued and whether or not capitalized (including, without limitation, amortization of debt issuance costs and original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, imputed interest with respect to obligations with respect to any sale and leaseback transaction, fees, including but not limited to agency fees, letter of credit fees, commitment fees, commissions, discounts and other fees and charges incurred in respect of Indebtedness and net of the effect of all payments made or received pursuant to Hedging Obligations), to the extent that any such expense was deducted in computing such Consolidated Net Income; plus

(4) depreciation, amortization (including non-cash employee and officer equity compensation expenses, amortization of goodwill and other intangibles, amortization of programming costs (net of program payments made or to be made), barter expenses and impairment charges under SFAS 142 for broadcast licenses, goodwill or other indefinite lived intangible assets, but excluding amortization of prepaid cash expenses that were paid in a prior period) and other non-cash expenses (excluding any such non-cash expense to the extent that it represents amortization of a prepaid cash expense that was paid in a prior period) of such Person and its Restricted Subsidiaries for such period, to the extent that such depreciation, amortization, impairment charges and other non-cash expenses were deducted in computing such Consolidated Net Income; plus

(5) any extraordinary or non-recurring expenses and charges of such Person and the Restricted Subsidiaries for such period, including, without limitation, transaction costs in respect of acquisitions, to the extent that such expenses and charges were deducted in computing such Consolidated Net Income; minus

(6) non-cash items increasing such Consolidated Net Income for such period, other than the accrual of revenue in the ordinary course of business; minus

(7) cash payments related to non-cash charges that increased Consolidated Cash Flow in any prior period; minus

(8) barter revenues,

in each case, on a consolidated basis and determined in accordance with GAAP.

Notwithstanding the foregoing, the provision for taxes based on the income or profits of, and the depreciation and amortization and other non-cash expenses of, a Subsidiary of LBI Media will be added to Consolidated Net Income to compute Consolidated Cash Flow of LBI Media only to the extent that a corresponding amount would be permitted at the date of determination to be dividended, distributed or loaned to LBI Media by such Subsidiary without prior governmental approval (that has not been obtained), and without direct or indirect restriction pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to that Subsidiary or its stockholders.

“Consolidated Net Income” means, with respect to any specified Person for any period, the aggregate of the Net Income of such Person and its Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP; provided that:

(1) the Net Income (but not loss) of any Unrestricted Subsidiary will be excluded, whether or not distributed to the specified Person or a Restricted Subsidiary of the Person;

(2) the Net Income of any Restricted Subsidiary will be excluded to the extent that the declaration or payment of dividends or similar distributions or loans by that Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders;

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(3) the Net Income of any Person acquired in a pooling of interests transaction for any period prior to the date of such acquisition will be excluded; and

(4) the cumulative effect of a change in accounting principles will be excluded.

“Credit Agreement” means that certain Amended and Restated Credit Agreement, dated as of July 9, 2002, by and among LBI Media, the guarantors party thereto, Fleet National Bank, as administrative agent, and the lenders party thereto, including any related notes, guarantees, collateral documents, instruments and agreements executed in connection therewith, and in each case as amended (including any amendment and restatement thereof), modified, renewed, refunded, replaced or refinanced from time to time, including any agreement extending the maturity of, consolidating or otherwise restructuring (including adding subsidiaries of LBI Media as additional guarantors thereunder) all or any portion of the Indebtedness under such agreement or any successor or replacement agreement and whether by the same or any other agent, lender or group and whether or not increasing the amount of Indebtedness that may be incurred thereunder.

“Credit Facility” or “Credit Facilities” means, one or more debt facilities (including, without limitation, the Credit Agreement) or commercial paper facilities, in each case with banks or other institutional lenders providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or letters of credit, in each case, as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time, including any agreement extending the maturity of, consolidating or otherwise restructuring (including adding subsidiaries of LBI Media as additional guarantors thereunder) all or any portion of the Indebtedness under such agreement or any successor or replacement agreement and whether by the same or any other agent, lender or group and whether or not increasing the amount of Indebtedness that may be incurred thereunder.

“Default” means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.

“Designated Senior Debt” means:

(1) any Indebtedness outstanding under the Credit Agreement; and

(2) any other Senior Debt permitted under the indenture the principal amount of which is $25.0 million or more (including amounts available under a committed facility) and that has been designated by LBI Media as “Designated Senior Debt.”

“Disqualified Stock” means 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 each case at the option of the holder of the Capital Stock), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder of the Capital Stock, in whole or in part, on or prior to the date that is 91 days after the date on which the notes mature. Notwithstanding the preceding sentence, any Capital Stock that would constitute Disqualified Stock solely because the holders of the Capital Stock have the right to require LBI Media to repurchase such Capital Stock upon the occurrence of a Change of Control or an Asset Sale will not constitute Disqualified Stock if the terms of such Capital Stock provide that LBI Media may not repurchase or redeem any such Capital Stock pursuant to such provisions unless such repurchase or redemption complies with the covenant described above under the caption “—Certain Covenants—Restricted Payments.”

“Dividend Limitation” means, with respect to Parent, the sum of (1) the product of the Maximum Effective California Rate times California Taxable Income except that the product of this clause (1) shall be zero in the event Parent does not qualify (or subsequently elects not) to be treated as an S Corporation for California income tax purposes, or LBI Media does not qualify (or subsequently elects not) to be treated as a qualified subchapter S subsidiary; plus (2) the product of the Maximum Federal Rate and Federal Taxable Income.

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“Domestic Subsidiary” means any Restricted Subsidiary of LBI Media that was formed under the laws of the United States or any state of the United States or the District of Columbia or that guarantees or otherwise provides direct credit support for any Indebtedness of LBI Media.

“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Existing Indebtedness” means Indebtedness of LBI Media and its Restricted Subsidiaries (other than Indebtedness under the Credit Agreement) in existence on the date of the indenture.

“Existing Parent Notes” means the $30.0 million original aggregate principal amount of Junior Subordinated Notes of Parent, plus accrued and unpaid interest thereon, issued and outstanding under the Parent Securities Purchase Documents and any other notes issued thereunder in accordance with the terms thereof as such terms exist on the date of the indenture, as any of the foregoing may be amended or modified from time to time after the date of the indenture in a manner that is not materially adverse to the Holders.

“Existing Parent Warrants” means the warrants for the purchase of shares of common stock of Parent issued on March 20, 2001, as amended on the date of the indenture pursuant to the Parent Securities Purchase Documents and any other warrants issued thereunder in accordance with the terms thereof as such terms exist on the date of the indenture, as any of the foregoing may be amended or modified from time to time after the date of the indenture in a manner that is not materially adverse to the Holders.

“Federal Taxable Income” means the taxable income of Parent for any taxable year computed pursuant to Section 1363(b) (or any successor provision) of the Code but calculated as if the taxable year of Parent ended on the date with respect to which such taxable income calculation is made, reduced, but not below zero, by the amount of any Suspended Losses which are treated as incurred by Parent in, and allowed as deductions on the tax returns of Parent’s stockholders for, such taxable year.

“FCC” means the Federal Communications Commission or any successor thereto.

“GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect on the date of the indenture.

“Governmental Authority” means any nation or government, any federal, state or other political subdivision thereof and any federal, state or local entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

“Guarantee” means a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness.

“Guarantors” means each of:

(1) LBI Media’s Restricted Subsidiaries on the date of the indenture; and

(2) any other subsidiary of LBI Media that executes a Subsidiary Guarantee in accordance with the provisions of the indenture;

and their respective successors and assigns.

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“Hedging Obligations” means, with respect to any specified Person, the obligations of such Person under:

(1) interest rate swap agreements, interest rate cap agreements and interest rate collar agreements; and

(2) other agreements or arrangements designed to protect such Person against fluctuations in currency exchange rates or interest rates.

“Hollywood Office Property” means those certain properties located at 5724 Hollywood Blvd. and  5718 Hollywood Blvd., Los Angeles, Los Angeles County, California.

“Indebtedness” means, with respect to any specified Person, any indebtedness of such Person, whether or not contingent:

(1) in respect of borrowed money;

(2) evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof);

(3) in respect of banker’s acceptances;

(4) representing Capital Lease Obligations;

(5) representing the balance deferred and unpaid of the purchase price of any property, except any such balance that constitutes an accrued expense or trade payable; or

(6) representing any Hedging Obligations (the amount of any such obligations to be equal at any time to the termination value of such agreement or arrangement giving rise to such obligation that would be payable by such Person at such time),

if and to the extent any of the preceding items (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP. In addition, the term “Indebtedness” includes all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person) and, to the extent not otherwise included, the Guarantee by the specified Person of any indebtedness of any other Person; provided that Indebtedness shall not include the pledge of the Capital Stock of an Unrestricted Subsidiary securing Non-Recourse Debt of that Unrestricted Subsidiary. Notwithstanding anything in this definition to the contrary, any obligations of LBI Media or any of its Restricted Subsidiaries to pay Shop At Home Relocation Profits (including any Relocation Tax Benefits (as defined in the Shop At Home Acquisition Documents)) to the Shop At Home Sellers under the Shop At Home Acquisition Documents shall not be Indebtedness until such time as such obligations are (i) due and payable (unless being contested in good faith) or (ii) represented by a separate instrument.

The amount of any Indebtedness outstanding as of any date will be:

(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount; and

(2) the principal amount of the Indebtedness, together with any interest on the Indebtedness that is more than 30 days past due, in the case of any other Indebtedness.

“Intermediate Holdings” means LBI Intermediate Holdings, Inc., a California corporation and wholly owned subsidiary of Parent that merged with and into LBI Media on July 9, 2002.

“Investments” means, with respect to any Person, all direct or indirect investments by such Person in other Persons (including Affiliates) in the forms of loans (including Guarantees or other obligations), advances or capital contributions (excluding commission, travel and similar advances to officers and employees made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet

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prepared in accordance with GAAP. If LBI Media or any Subsidiary of LBI Media sells or otherwise disposes of any Equity Interests of any direct or indirect Subsidiary of LBI Media such that, after giving effect to any such sale or disposition, such Person is no longer a Subsidiary of LBI Media, LBI Media will be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value of LBI Media’s Investments in such Subsidiary that were not sold or disposed of in an amount determined as provided in the final paragraph of the covenant described above under the caption “—Certain Covenants—Restricted Payments.” The acquisition by LBI Media or any Subsidiary of LBI Media of a Person that holds an Investment in a third Person will be deemed to be an Investment by LBI Media or such Subsidiary in such third Person in an amount equal to the fair market value of the Investments held by the acquired Person in such third Person in an amount determined as provided in the final paragraph of the covenant described above under the caption “—Certain Covenants—Restricted Payments.”

“Leverage Ratio” means the ratio of (i) the sum of (A) the aggregate outstanding amount of Indebtedness of each of LBI Media and the Restricted Subsidiaries as of the last day of the most recently ended fiscal quarter for which financial statements are internally available as of the date of calculation on a combined consolidated basis in accordance with GAAP, plus (B) the aggregate liquidation preference of all outstanding Disqualified Stock of LBI Media and preferred stock of the Restricted Subsidiaries (except preferred stock issued to LBI Media or a Restricted Subsidiary) as of the last day of such fiscal quarter (in each case, subject to the terms described in the next paragraph) to (ii) the aggregate Consolidated Cash Flow of LBI Media for the last four full fiscal quarters for which financial statements are internally available ending on or prior to the date of determination (the “Reference Period”).

For purposes of this definition, the aggregate outstanding principal amount of Indebtedness of LBI Media and the Restricted Subsidiaries and the aggregate liquidation preference of all outstanding preferred stock of the Restricted Subsidiaries for which such calculation is made shall be determined on a pro forma basis as if the Indebtedness and preferred stock giving rise to the need to perform such calculation had been incurred and issued and the proceeds therefrom had been applied, and all other transactions in respect of which such Indebtedness is being incurred or preferred stock is being issued had occurred, on the first day of such Reference Period. In addition to the foregoing, for purposes of this definition, the Leverage Ratio shall be calculated on a pro forma basis after giving effect to (i) the incurrence of the Indebtedness of such Person and the Restricted Subsidiaries and the issuance of the preferred stock of such Subsidiaries (and the application of the proceeds therefrom) giving rise to the need to make such calculation and any incurrence (and the application of the proceeds therefrom) or repayment of other Indebtedness or preferred stock, at any time subsequent to the beginning of the Reference Period and on or prior to the date of determination (including any such incurrence or issuance which is the subject of an Incurrence Notice delivered to the trustee during such period pursuant to clause (11) of the definition of Permitted Debt; provided, however, that Indebtedness shall not include any Acquisition Debt that has been the subject of an Incurrence Notice under clause (11) of the definition of Permitted Debt at any time after such Incurrence Notice has been withdrawn or after the passage of 365 days following the giving of such Incurrence Notice if and to the extent such Acquisition Debt has not then been incurred), as if such incurrence or issuance (and the application of the proceeds thereof), or the repayment, as the case may be, occurred on the first day of the Reference Period (except that, in making such computation, the amount of Indebtedness under any revolving credit facility shall be computed based upon the average balance of such Indebtedness at the end of each month during such period) and (ii) any acquisition at any time on or subsequent to the first day of the Reference Period and on or prior to the date of determination (including any such incurrence or issuance which is the subject of an Incurrence Notice delivered to the trustee during such period pursuant to clause (11) of the definition of Permitted Debt subject to the proviso in clause (i) above), as if such acquisition (including the incurrence, assumption or liability for any such Indebtedness and the issuance of such preferred stock and also including any Consolidated Cash Flow associated with such acquisition) occurred on the first day of the Reference Period giving pro forma effect to any non-recurring expenses, non-recurring costs and cost reductions within the first year after such acquisition LBI Media reasonably anticipates in good faith if LBI Media delivers to the trustee an officer’s certificate executed by an executive officer of LBI Media certifying to and describing and quantifying with reasonable specificity such non-recurring expenses, non-recurring costs and cost reductions. Furthermore, in calculating consolidated interest expense for purposes of the calculation of Consolidated Cash

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

“Liberman Subordinated Debt” means, collectively, the amended and restated promissory notes dated March 20, 2001, executed by Liberman Broadcasting, Inc. in favor of Jose Liberman and Lenard Liberman in original aggregate principal amounts of $3,667,193 and $194,414, respectively, as in effect on the date of the indenture.

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.

“Liquidated Damages” means the liquidated damages to be paid by LBI Media and the Guarantors in the event of a default under the registration rights agreement.

“LMA” means a local marketing arrangement, joint sales agreement, time brokerage agreement, shared service agreement, management agreement or similar arrangement pursuant to which a Person, subject to customary preemption rights and other limitations (i) obtains the right to sell a portion of the advertising inventory of a radio or television station of which a third party is the licensee, (ii) obtains the right to exhibit programming and sell advertising time during a portion of the air time of a radio or television station or (iii) manages a portion of the operations of a radio or television station.

“Management Incentive Contracts” means employment agreements between Parent and employees providing for payments in the event that the net value of Parent exceeds certain thresholds.

“Maximum Effective California Rate” means the product of: (1) the maximum California personal income tax rate imposed on individuals pursuant to Section 17041(a) and (c) (or any successor provisions) of the California Revenue and Tax Code times (2) the difference between one and the Maximum Federal Rate expressed as a decimal.

“Maximum Federal Rate” means the maximum Federal income tax rate imposed on individuals pursuant to Section 1(a)-(d) (or any successor provisions) of the Code, as adjusted pursuant to Section 15 (or any successor provision) of the Code, if applicable.

“Media Licenses” means any license, permit, certificate, ordinance, approval or other authorization, or any renewal or extension thereof, from the FCC that is necessary for the broadcast or other operations of LBI Media and its Subsidiaries.

“Net Income” means, with respect to any specified Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of preferred stock dividends, excluding, however:

(1) any gain (but not loss), together with any related provision for taxes on such gain (but not loss), realized in connection with: (a) any Asset Sale; or (b) the disposition of any securities by such Person or any of its Restricted Subsidiaries or the extinguishment of any Indebtedness of such Person or any of its Restricted Subsidiaries; and

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(2) any extraordinary gain (but not loss), together with any related provision for taxes on such extraordinary gain (but not loss).

“Net Proceeds” means the aggregate cash proceeds received by LBI Media or any of its Restricted Subsidiaries in respect of any Asset Sale or a Relocation (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of (i) the costs directly related to such Asset Sale, including, without limitation, legal, accounting and investment banking fees, and sales commissions, and any relocation expenses incurred as a result of the Asset Sale, (ii) taxes paid or estimated to be payable as a result of the Asset Sale (and to the extent not included in the foregoing, that portion of any Permitted Holdings Tax Distributions and Permitted Shareholder Tax Distributions attributable thereto), in each case, after taking into account any available tax credits or deductions and any tax sharing arrangements (iii) amounts required to be applied to the repayment of Indebtedness, (iv) any reserve for adjustment in respect of the sale price of such asset or assets established in accordance with GAAP, and (v) in addition to but without duplicating any amounts required to be deducted from Net Proceeds under clauses (i) through (iv) above, Net Proceeds in connection with any Relocation shall be net of (a) all reasonable costs (as determined by LBI Media in its reasonable discretion) directly related to such Relocation including, without limitation, (1) transaction expenses (including professional advisor’s or broker’s fees and costs and financing and related fees, commissions and expenses, including lender waiver fees), (2) engineering, construction, equipment and moving costs, (3) marketing costs, (4) the estimated aggregate amount of all obligations of LBI Media or any of its Restricted Subsidiaries after such Relocation under leases with respect to which it is the lessee immediately prior to such Relocation, (5) any penalties or liabilities incurred (or estimated to be incurred) by LBI Media or any of its Restricted Subsidiaries under contracts which cannot be terminated by LBI Media or any of its Restricted Subsidiaries prior to such Relocation but which cannot be performed or are no longer necessary (in the sole but reasonable discretion of LBI Media) by LBI Media or any of its Restricted Subsidiaries following such Relocation, (6) costs incurred in seeking governmental consents and permits required as part of such Relocation and (7) costs incurred in seeking FCC consent to move such replaced station’s digital operations to the site of such replacement station’s analog operations (including all expenses of a type set forth in other clauses of this definition) and (b) Shop At Home Relocation Profits, including any Relocation Tax Benefits (as defined in the Shop At Home Acquisition Documents), that are paid or payable to the Shop At Home Sellers pursuant to the terms of the Shop At Home Acquisition Documents (it being understood that any estimated amounts under this clause (v) shall be based on good faith estimates of LBI Media on the date of the consummation of any Relocation which were reasonable when made but such estimates shall be subject to adjustment within 90 days thereafter).

“Non-Recourse Debt” means Indebtedness:

(1) as to which neither LBI Media, the Guarantors, nor any of the Restricted Subsidiaries (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness), (b) is directly liable as a guarantor or otherwise, or (c) constitutes the lender; and

(2) no default with respect to which (including any rights that the holders of the Indebtedness may have to take enforcement action against an Unrestricted Subsidiary) would permit upon notice, lapse of time or both any holder of any other Indebtedness (other than the notes) of LBI Media, the Guarantors, or any of the Restricted Subsidiaries to declare a default on such other Indebtedness or cause the payment of the Indebtedness to be accelerated or payable prior to its stated maturity.

“Oaktree Notes” means the 21% senior subordinated notes of Intermediate Holdings, which were repaid on July 9, 2002.

“Oaktree Notes Repayment” means the repayment in full on the date of the indenture of all principal, interest and premium and other obligations in respect of the Oaktree Notes.

“Obligations” means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable (including post-petition interest) under the documentation governing any Indebtedness.

“Parent” means LBI Holdings I, Inc., a California corporation or any successor.

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“Parent Debt Ratio” means the ratio of (i) the sum of (A) the aggregate outstanding amount of Indebtedness of each of LBI Media and the Restricted Subsidiaries as of the last day of the most recently ended fiscal quarter for which financial statements are internally available as of the date of calculation on a combined consolidated basis in accordance with GAAP plus (B) Specified Parent Debt as of the last day of the most recently ended fiscal quarter for which financial statements are internally available as of the date of calculation plus (C) the aggregate liquidation preference of all outstanding Disqualified Stock of LBI Media and preferred stock of the Restricted Subsidiaries (except preferred stock issued to LBI Media or a Restricted Subsidiary) as of the last day of such fiscal quarter (in each case, subject to the terms described in the next paragraph) to (ii) the aggregate Consolidated Cash Flow of Parent (and, for purposes of this definition, references in the definition of “Consolidated Cash Flow” to Restricted Subsidiaries shall include LBI Media) for the last four full fiscal quarters for which financial statements are internally available ending on or prior to the date of determination (the “Parent Reference Period”).

For purposes of this definition, the aggregate outstanding principal amount of Specified Parent Debt and Indebtedness of LBI Media and the Restricted Subsidiaries and the aggregate liquidation preference of all outstanding preferred stock of the Restricted Subsidiaries for which such calculation is made shall be determined on a pro forma basis as if the Specified Parent Debt and Indebtedness and preferred stock giving rise to the need to perform such calculation had been incurred and issued and the proceeds therefrom had been applied, and all other transactions in respect of which such Specified Parent Debt or Indebtedness is being incurred or preferred stock is being issued had occurred, on the first day of such Parent Reference Period. In addition to the foregoing, for purposes of this definition, the Parent Debt Ratio shall be calculated on a pro forma basis after giving effect to (i) the incurrence of the Specified Parent Debt and the Indebtedness of LBI Media and the Restricted Subsidiaries and the issuance of the preferred stock of such Restricted Subsidiaries (and the application of the proceeds therefrom) giving rise to the need to make such calculation and any incurrence (and the application of the proceeds therefrom) or repayment of other Specified Parent Debt or Indebtedness or preferred stock, at any time subsequent to the beginning of the Parent Reference Period and on or prior to the date of determination (including any such incurrence or issuance which is the subject of an Incurrence Notice delivered to the trustee during such period pursuant to clause (11) of the definition of Permitted Debt; provided, however, that Indebtedness shall not include any Acquisition Debt that has been the subject of an Incurrence Notice under clause (11) of the definition of Permitted Debt at any time after such Incurrence Notice has been withdrawn or after the passage of 365 days following the giving of such Incurrence Notice if and to the extent such Acquisition Debt has not then been incurred), as if such incurrence or issuance (and the application of the proceeds thereof), or the repayment, as the case may be, occurred on the first day of the Parent Reference Period (except that, in making such computation, the amount of Indebtedness under any revolving credit facility shall be computed based upon the average balance of such Indebtedness at the end of each month during such period) and (ii) any acquisition at any time on or subsequent to the first day of the Parent Reference Period and on or prior to the date of determination (including any such incurrence or issuance which is the subject of an Incurrence Notice delivered to the trustee during such period pursuant to clause (11) of the definition of Permitted Debt subject to the proviso in clause (i) above), as if such acquisition (including the incurrence, assumption or liability for any such Specified Parent Debt or Indebtedness and the issuance of such preferred stock and also including any Consolidated Cash Flow associated with such acquisition) occurred on the first day of the Parent Reference Period, giving pro forma effect to any non-recurring expenses, non-recurring costs and cost reductions within the first year after such acquisition LBI Media reasonably anticipates in good faith if LBI Media delivers to the trustee an officer’s certificate executed by an executive officer of LBI Media certifying to and describing and quantifying with reasonable specificity such non-recurring expenses, non-recurring costs and cost reductions. Furthermore, in calculating consolidated interest expense for purposes of the calculation of Consolidated Cash Flow, (a) interest on Specified Parent Debt and Indebtedness determined on a fluctuating basis as of the date of determination (including Indebtedness actually incurred on the date of the transaction giving rise to the need to calculate the Parent Debt Ratio) and which will continue to be so determined thereafter shall be deemed to have accrued at a fixed rate per annum equal to the rate of interest on such Indebtedness as in effect on the date of determination and (b) notwithstanding (a) above, interest determined on a fluctuating basis, to the extent such interest is covered by Hedging Obligations, shall be deemed to accrue at the rate per annum resulting after giving effect to the operation of such agreements.

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“Parent Securities Purchase Documents” means the Securities Purchase Agreement dated as of March 20, 2001, as amended on July 9, 2002, governing the Existing Parent Notes, the Warrant Agreement dated as of March 20, 2001, as amended on July 9, 2002, governing the Existing Parent Warrants and documents related to any of the foregoing, in each case as amended or modified from time to time after the date of the indenture in a manner that is not materially adverse to the Holders.

“Permitted Asset Swap” means, with respect to any Person, the substantially concurrent exchange of assets of such Person (including Equity Interests of a Restricted Subsidiary) for assets of another Person, which assets are useful in a Permitted Business.

“Permitted Business” means any business of the type engaged in by LBI Media or its Restricted Subsidiaries as of the date of the indenture or any business reasonably related, ancillary or complementary thereto.

“Permitted Dividend Amount” means, for any taxable period, the amount (determined by a Tax Accountant) by which the Dividend Limitation for the taxable year exceeds the aggregate Permitted Shareholder Tax Distributions paid by LBI Media for such year pursuant to the covenant entitled “Restricted Payments,” including distributions paid or loans made by LBI Media within 105 days after the end of the taxable year for which a distribution is paid or loan is made; provided, that:

(1) if, at the end of any taxable year of LBI Media, the Dividend Limitation for such year exceeds the aggregate Permitted Shareholder Tax Distributions paid by LBI Media for such year pursuant to the covenant entitled “Restricted Payments,” such excess shall be ignored for purposes of computing the Permitted Dividend Amount for any subsequent period;

(2) if, at the end of any taxable year of LBI Media, the aggregate Permitted Shareholder Tax Distributions paid by LBI Media for such year pursuant to the covenant entitled “Restricted Payments” exceed the Dividend Limitation, the Permitted Dividend Amount shall be zero and such excess shall be included and credited in the calculation of the aggregate Permitted Shareholder Tax Distributions paid by LBI Media for the following taxable year(s); and

(3) if Parent’s S Corporation election made pursuant to Code Section 1362 (or any successor provision) shall be determined to be invalid, or is revoked or terminated, or the QSSS Election shall cease to be in effect for LBI Media, the Permitted Dividend Amount for LBI Media shall be zero from and after the date of such invalidity, revocation or termination.

“Permitted Holdings Tax Distributions” means cash distributions or loans (to be computed by the Tax Accountant) from LBI Media to Parent in respect of any taxable year equal to the sum of estimated and final state income taxes paid or payable by Parent which are attributable to the taxable income of LBI Media for such taxable year calculated as though LBI Media were an S Corporation. If in any year Parent is required to pay additional taxes with respect to a prior year’s tax return which are attributable to the taxable income of LBI Media calculated as though LBI Media were an S Corporation (whether because of an audit by a taxing authority, an amended return the filing of which is required in the reasonable judgment of Parent or otherwise), the amount of Permitted Holdings Tax Distributions which may be paid or loaned in such year shall be increased by the amount of such additional taxes.

“Permitted Investments” means:

(1) any Investment in LBI Media or in a Restricted Subsidiary;

(2) any Investment in Cash Equivalents;

(3) any Investment by LBI Media or any Restricted Subsidiary in a Person, if as a result of such Investment:

(a) such Person becomes a Restricted Subsidiary of LBI Media; or

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(b) such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, LBI Media or a Restricted Subsidiary of LBI Media;

(4) any Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with the covenant described above under the caption  “—Repurchase at the Option of Holders—Asset Sales”;

(5) any acquisition of assets (including Investments in Unrestricted Subsidiaries) solely in exchange for the issuance of Equity Interests (other than Disqualified Stock) of LBI Media or Parent;

(6) any Investments received in compromise of obligations of trade creditors or customers that were incurred in the ordinary course of business, including pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any trade creditor or customer;

(7) Hedging Obligations;

(8) loans and advances to employees of LBI Media and its Restricted Subsidiaries and loans to Affiliates of LBI Media and other Persons not in excess of $5.0 million in aggregate principal amount at any time outstanding and the cancellation or forgiveness thereof; provided, however, that no such cancellation or forgiveness shall increase the aggregate amount of loans or advances otherwise permitted hereunder;

(9) the loan by LBI Media to Intermediate Holdings for the Oaktree Notes Repayment and the cancellation or forgiveness thereof and any intercompany loan made by Intermediate Holdings to Parent prior to the date of the indenture (the ownership of which is transferred from Intermediate Holdings to LBI Media by operation of law in connection with the merger of Intermediate Holdings with and into LBI Media) and the cancellation or forgiveness thereof;

(10) the receipt by LBI Media of notes from one or more employees of LBI Media or any Restricted Subsidiary of LBI Media in connection with such employees’ acquisition of shares of Parent’s common stock and any cancellation or forgiveness thereof, so long as no cash is advanced by LBI Media or any Restricted Subsidiary of LBI Media to such officers or employees or Parent in connection with the acquisition of any such obligations or the cancellation or forgiveness thereof;

(11) escrow deposits made pursuant to Investments permitted hereunder or acquisitions;

(12) Investments made in connection with, or accepted as consideration in, a Relocation;

(13) Investments relating to LMAs entered into in connection with independently owned broadcast properties, not to exceed an aggregate of $10.0 million;

(14) the loan to Lenard Liberman on the date of the indenture and any cancellation or forgiveness thereof; and

(15) other Investments in any Person having an aggregate fair market value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (15) that are at the time outstanding not to exceed $5.0 million.

“Permitted Junior Securities” means:

(1) Equity Interests in LBI Media or, subject to the terms of the Credit Agreement, any Guarantor; or

(2) debt securities that are subordinated to all Senior Debt and any debt securities 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.

“Permitted Liens” means:

(1) Liens of LBI Media and any Guarantor securing Indebtedness and other Obligations under Credit Facilities or securing other Senior Debt permitted by the terms of the indenture to be incurred;

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(2) Liens in favor of LBI Media or any Restricted Subsidiary;

(3) Liens on property of a Person existing at the time such Person is merged with or into or consolidated with LBI Media or any Restricted Subsidiary; provided that such Liens were in existence prior to the contemplation of such merger or consolidation and do not extend to any assets other than those of the Person merged into or consolidated with LBI Media or the Restricted Subsidiary;

(4) Liens on property existing at the time of acquisition of the property by LBI Media or any Restricted Subsidiary; provided that such Liens were in existence prior to the contemplation of such acquisition;

(5) Liens to secure the performance of statutory obligations, surety or appeal bonds, performance bonds or other obligations of a like nature incurred in the ordinary course of business;

(6) Liens to secure Indebtedness (including Capital Lease Obligations) permitted by clause (4) of the second paragraph of the covenant entitled “—Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock” covering only the assets acquired with such Indebtedness;

(7) Liens existing on the date of the indenture;

(8) Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded; provided that any reserve or other appropriate provision as is required in conformity with GAAP has been made therefor;

(9) Liens on assets of Unrestricted Subsidiaries that secure Non-Recourse Debt of Unrestricted Subsidiaries;

(10) Liens to secure Indebtedness that is pari passu in right of payment with the notes; provided that the notes are equally and ratably secured thereby;

(11) Liens securing Permitted Refinancing Indebtedness where the Liens securing indebtedness being refinanced were permitted under the indenture;

(12) easements, rights-of-way, zoning and similar restrictions and other similar encumbrances or title defects incurred or imposed, as applicable, in the ordinary course of business and consistent with industry practices;

(13) any interest or title of a lessor under any Capital Lease Obligation;

(14) Liens securing reimbursement obligations with respect to letters of credit which encumber documents and other property relating to letters of credit and products and proceeds thereof;

(15) Liens encumbering deposits made to secure statutory, regulatory, contractual or warranty obligations, including rights of offset and set-off;

(16) Liens securing Hedging Obligations permitted under the indenture;

(17) leases or subleases granted to others;

(18) Liens under licensing agreements;

(19) Liens arising from filing Uniform Commercial Code financing statements regarding leases;

(20) judgment Liens not giving rise to an Event of Default;

(21) Liens encumbering property of LBI Media or a Restricted Subsidiary consisting of carriers, warehousemen, mechanics, materialmen, repairmen and landlords, and other Liens arising by operation of law and incurred in the ordinary course of business for sums that are not overdue or that are being contested in good faith by appropriate proceedings and (if so contested) for which appropriate reserves with respect thereto have been established and maintained on the books of LBI Media or a Restricted Subsidiary in accordance with GAAP;

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(22) Liens encumbering property of LBI Media or a Restricted Subsidiary incurred in the ordinary course of business in connection with workers’ compensation, unemployment insurance, or other forms of governmental insurance or benefits, or to secure performance of bids, tenders, statutory obligations, leases, and contracts (other than for Indebtedness for borrowed money) entered into in the ordinary course of business of LBI Media or a Restricted Subsidiary; and

(23) bankers’ liens in the nature of rights of setoff arising in the ordinary course of business of LBI Media or any of its Restricted Subsidiaries.

“Permitted Refinancing Indebtedness” means any Indebtedness of LBI Media or any of its Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund other Indebtedness of LBI Media or any of its Restricted Subsidiaries (other than intercompany Indebtedness); provided that:

(1) the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness extended, refinanced, renewed, replaced, defeased or refunded (plus all accrued interest on the Indebtedness and the amount of all expenses and premiums incurred in connection therewith);

(2) such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded;

(3) if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is subordinated in right of payment to the notes, such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and is subordinated in right of payment to, the notes on terms at least as favorable to the Holders of notes as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; and

(4) such Indebtedness is incurred either by LBI Media or by the Restricted Subsidiary who is the obligor on the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded.

“Permitted Shareholder Tax Distributions” means cash distributions or loans in amounts computed by a Tax Accountant and made by LBI Media to Parent or the shareholders of Parent to permit the shareholders of Parent to pay their estimated and final federal and state income tax liabilities attributable to the income of LBI Media calculated as though LBI Media were an S Corporation. Permitted Shareholder Tax Distributions may not be made more frequently than quarterly with respect to each period for which an installment of estimated tax would be required to be paid by the shareholders of Parent; provided, however, that the amount of such distributions or loans shall not exceed the Permitted Dividend Amount. For purposes of computing the amount of aggregate Permitted Shareholder Tax Distributions for any taxable year, amounts paid in such taxable year by LBI Media to the State of California on behalf of nonresident shareholders as estimated taxes or as withholding taxes pursuant to the California Revenue and Taxation Code shall be treated as Permitted Shareholder Tax Distributions. If nonresident shareholders recontribute to LBI Media any such amounts paid on their behalf, however, the amounts contributed shall be subtracted from the amount of aggregate Permitted Shareholder Tax Distributions for the taxable year in which the contributions are made. If, in any year Parent’s shareholders are required to pay additional taxes with respect to a prior year’s tax return which are attributable to the taxable income of LBI Media calculated as through LBI Media were an S Corporation (whether because of an audit by a taxing authority, an amended return the filing of which is required in the reasonable judgment of Parent, or otherwise), the amount of Permitted Shareholder Tax Distributions which may be paid in such year shall be increased by the amount of such additional taxes as determined by a Tax Accountant.

“Person” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company or government or other entity.

“Principals” means Jose Liberman and Lenard Liberman.

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“Public Equity Offering” means an underwritten primary public offering of common stock of LBI Media or Parent; provided, however, that in the event of a Public Equity Offering by Parent, all or a portion of the net proceeds therefrom are contributed to LBI Media.

“QSSS Election” means the election to treat any Person as a qualified Subchapter S subsidiary pursuant to Code Section 1361(b)(3).

“Related Party” means:

(1) any family member, spouse, heir, devisee, executor or similar legal representative of any Principal; or

(2) any trust, corporation, partnership or other entity, the beneficiaries, stockholders, partners, owners or Persons beneficially holding an 80% or more controlling interest of which consist of any one or more Principals and/or such other Persons referred to in the immediately preceding clause (1).

“Relocation” means with respect to any television broadcast station, (a) any transaction in which a 700 MHz Holder (or any other Person) offers consideration (which consideration consists of a different frequency or frequencies and/or cash or non-cash consideration) to LBI Media or any Guarantor for the cessation of broadcasting on any of the analogue and/or digital frequencies of such broadcast station in order to accommodate the spectrum needs of such 700 MHz Holder, including the prevention of interference with such 700 MHz Holder’s operations, and LBI Media or any Guarantor is not ordered or directly or indirectly required by the FCC or any other Governmental Authority to enter into such transaction, or (b) any transaction in which the FCC or any other Governmental Authority orders or otherwise directly or indirectly requires LBI Media or any Guarantor to cease broadcasting on any of its existing analogue and/or digital frequencies in order to accommodate the spectrum needs of any 700 MHz Holder, including the prevention of interference with such 700 MHz Holder’s operations, with or without any consideration; it being understood that without limiting the generality of the foregoing, the term “Relocation” shall include any Relocation as defined in the Shop At Home Acquisition Documents as in effect on March 20, 2001.

“Restricted Investment” means an Investment other than a Permitted Investment.

“Restricted Subsidiary” means any Subsidiary of LBI Media that is not an Unrestricted Subsidiary.

“S Corporation” means a small business corporation within the meaning of Code Section 1361 (or any successor provision) for which an election is in effect under Code Section 1362(a) (or any successor provision).

“Senior Debt” means:

(1) the Indebtedness of LBI Media or any Restricted Subsidiary outstanding under Credit Facilities and all Hedging Obligations with respect thereto;

(2) any other Indebtedness of LBI Media or any Guarantor permitted to be incurred under the terms of the indenture, unless the instrument under which such Indebtedness is incurred expressly provides that it is on a parity with or subordinated in right of payment to the notes or any Subsidiary Guarantee; and

(3) all Obligations with respect to the items listed in the preceding clauses (1) and (2).

Notwithstanding anything to the contrary in the preceding, Senior Debt will not include:

(1) any liability for federal, state, local or other taxes owed or owing by LBI Media or any Restricted Subsidiary;

(2) any intercompany Indebtedness of LBI Media or any of its Restricted Subsidiaries to LBI Media or any of its Affiliates;

(3) any trade payables; or

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(4) the portion of any Indebtedness that is incurred in violation of the indenture; provided that such Indebtedness shall be deemed not to have been incurred in violation of the indenture for purposes of this clause (4) if such Indebtedness consists of Indebtedness under any Credit Facility and holders of such Indebtedness or their agent or representative (i) had no actual knowledge at the time of the incurrence that the incurrence of such Indebtedness violated the indenture and (ii) shall have received an officers’ certificate to the effect that the incurrence of such Indebtedness does not violate the provisions of the indenture (but nothing in this clause (4) shall preclude the existence of any Default or Event of Default in the event that the Indebtedness is in fact incurred in violation of the indenture).

“700 MHz Holder” means a holder of a 700 MHz license or construction permit.

“Shop At Home Acquisition Documents” means that certain Asset Purchase Agreement dated as of November 10, 2000, among LBI Media, Liberman Television of Houston, Inc., KZJL License Corp. and the Shop At Home Sellers, as amended, in respect of the acquisition by Liberman Television of Houston, Inc. and KZJL License Corp. of the Broadcast Station KZJL-TV in Houston, Texas.

“Shop At Home Relocation” means a Relocation that constitutes a Voluntary Relocation or specified Involuntary Relocation as defined in the Shop At Home Acquisition Documents.

“Shop At Home Relocation Profits” means Relocation Profits (as defined in the Shop At Home Acquisition Documents) received by LBI Media pursuant to a Shop At Home Relocation which entitles Shop At Home Sellers to a portion of such Relocation Profit.

“Shop At Home Sellers” means Shop At Home, Inc., SAH-Houston Corporation, SAH-Houston License Corp. and SAH License, Inc.

“Significant Subsidiary” means any Subsidiary that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the date hereof.

“Specified Parent Debt” means indebtedness of Parent other than (i) indebtedness under the Existing Parent Notes, (ii) indebtedness under any note issued by Parent to satisfy its obligations under the Management Incentive Contracts, (iii) any indebtedness owing to LBI Media or any of its Restricted Subsidiaries and (iv) indebtedness of any Subsidiary of Parent.

“Stated Maturity” means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which the payment of interest or principal was scheduled to be paid in the original documentation governing such Indebtedness, and will not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.

“Subsidiary” means, with respect to any specified Person:

(1) any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees of the corporation, association or other business entity is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and

(2) any partnership (a) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are that Person or one or more Subsidiaries of that Person (or any combination thereof).

“Suspended Losses” means the aggregate amount of losses and deductions of Parent which have been taken into account by the shareholders of Parent and disallowed under Code Section 1366(d) (or any successor provision) in a prior taxable year.

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“Tax Accountant” means any one of the five largest nationally recognized independent accounting firms, or any other independent accounting firm jointly approved by the trustee and LBI Media.

“Unrestricted Subsidiary” means any Subsidiary of LBI Media that is designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a resolution of the Board of Directors, but only to the extent that such Subsidiary:

(1) has no Indebtedness other than Non-Recourse Debt;

(2) is not party to any agreement, contract, arrangement or understanding with LBI Media or any Restricted Subsidiary of LBI Media unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to LBI Media or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of LBI Media;

(3) is a Person with respect to which neither LBI Media nor any of its Restricted Subsidiaries has any direct or indirect obligation (a) to subscribe for additional Equity Interests or (b) to maintain or preserve such Person’s financial condition or to cause such Person to achieve any specified levels of operating results; and

(4) has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of LBI Media or any of its Restricted Subsidiaries.

Any designation of a Subsidiary of LBI Media as an Unrestricted Subsidiary will be evidenced to the trustee by filing with the trustee a certified copy of the resolution of the Board of Directors giving effect to such designation and an officers’ certificate certifying that such designation complied with the preceding conditions and was permitted by the covenant described above under the caption “—Certain Covenants—Restricted Payments.” If, at any time, any Unrestricted Subsidiary would fail to meet the preceding requirements as an Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for purposes of the indenture and any Indebtedness of such Subsidiary will be deemed to be incurred by a Restricted Subsidiary of LBI Media as of such date and, if such Indebtedness is not permitted to be incurred as of such date under the covenant described under the caption “—Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock,” LBI Media will be in default of such covenant. The Board of Directors of LBI Media may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such designation will be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of LBI Media of any outstanding Indebtedness of such Unrestricted Subsidiary and such designation will only be permitted if (1) such Indebtedness is permitted under the covenant described under the caption “—Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock,” calculated on a pro forma basis as if such designation had occurred at the beginning of the four-quarter reference period; and (2) no Default or Event of Default would be in existence following such designation.

“Voting Stock” of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

“Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing:

(1) the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect of the Indebtedness, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by

(2) the then outstanding principal amount of such Indebtedness.

“Wholly Owned Restricted Subsidiary” of any specified Person means a Restricted Subsidiary of such Person all of the outstanding Capital Stock or other ownership interests of which (other than directors’ qualifying shares) will at the time be owned by such Person or by one or more Wholly Owned Restricted Subsidiaries of such Person.

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BOOK-ENTRY, DELIVERY AND FORM

You can find the definitions of certain terms used in this section under the section “Description of the Exchange Notes—Certain Definitions.” In this description, “LBI Media” refers only to LBI Media, Inc. and its successors and not to any of its subsidiaries.

The old notes were offered and sold to qualified institutional buyers in reliance on Rule 144A (“Rule 144A Notes”). The old notes also were offered and sold in offshore transactions in reliance on Regulation S (“Regulation S Notes”). Except as set forth below, notes were and will be issued in registered, global form in minimum denominations of $1,000 and integral multiples of $1,000 in excess of $1,000.

Rule 144A Notes initially were represented by one or more notes in registered, global form without interest coupons (collectively, the “Rule 144A Global Notes”). Regulation S Notes initially were represented by one or more temporary global notes in registered, global form without interest coupons (collectively, the “Regulation S Temporary Global Notes”). The Rule 144A Global Notes and the Regulation S Temporary Global Notes were deposited upon issuance with the trustee as custodian for The Depository Trust Company (“DTC”), in New York, New York, and registered in the name of DTC or its nominee, in each case for credit to an account of a direct or indirect participant in DTC as described below. Through and including the 40th day after the later of the commencement of the offering to the initial purchasers of the old notes (such period through and including such 40th day, the “Restricted Period”), beneficial interests in the Regulation S Temporary Global Notes may be held only through the Euroclear System (“Euroclear”) and Clearstream Banking, S.A. (“Clearstream”) (as indirect participants in DTC), unless transferred to a person that takes delivery through a Rule 144A Global Note in accordance with the certification requirements described below. Within a reasonable time period after the expiration of the Restricted Period, the Regulation S Temporary Global Notes will be exchanged for one or more permanent notes in registered, global form without interest coupons (collectively, the “Regulation S Permanent Global Notes” and, together with the Regulation S Temporary Global Notes, the “Regulation S Global Notes” (the Regulation S Global Notes and Rule 144A Global Notes, collectively being the “Global Notes”)) upon delivery to DTC of certification of compliance with the transfer restrictions applicable to the notes and pursuant to Regulation S as provided in the indenture. Beneficial interests in the Rule 144A Global Notes may not be exchanged for beneficial interests in the Regulation S Global Notes at any time except in the limited circumstances described below. See “—Exchanges between Regulation S Notes and Rule 144A Notes.”

Except as set forth below, the Global Notes may be transferred, in whole and not in part, only to another nominee of DTC or to a successor of DTC or its nominee. Beneficial interests in the Global Notes may not be exchanged for notes in certificated form except in the limited circumstances described below. See “—Exchange of Global Notes for Certificated Notes.” Except in the limited circumstances described below, owners of beneficial interests in the Global Notes are not and will not be entitled to receive physical delivery of notes in certificated form.

Rule 144A Notes (including beneficial interests in the Rule 144A Global Notes) are subject to certain restrictions on transfer and bear a restrictive legend relating to transfer restrictions. Regulation S Notes also bear a restrictive legend relating to transfer restrictions. In addition, transfers of beneficial interests in the Global Notes are subject to the applicable rules and procedures of DTC and its direct or indirect participants (including, if applicable, those of Euroclear and Clearstream), which may change from time to time.

Depository Procedures

The following description of the operations and procedures of DTC, Euroclear and Clearstream are provided solely as a matter of convenience. These operations and procedures are solely within the control of the respective settlement systems and are subject to changes by them. LBI Media takes no responsibility for these operations and procedures and urges investors to contact the system or their participants directly to discuss these matters.

DTC has advised LBI Media that DTC is a limited-purpose trust company created to hold securities for its participating organizations (collectively, the “Participants”) and to facilitate the clearance and settlement of

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transactions in those securities between Participants through electronic book-entry changes in accounts of its Participants. The Participants include securities brokers and dealers (including the Initial Purchasers), banks, trust companies, clearing corporations and certain other organizations. Access to DTC’s system is also available to other entities such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Participant, either directly or indirectly (collectively, the “Indirect Participants”). Persons who are not Participants may beneficially own securities held by or on behalf of DTC only through the Participants or the Indirect Participants. The ownership interests in, and transfers of ownership interests in, each security held by or on behalf of DTC are recorded on the records of the Participants and Indirect Participants.

DTC has also advised LBI Media that, pursuant to procedures established by it:

(1) upon deposit of the Global Notes, DTC will credit the accounts of Participants designated by the Initial Purchasers with portions of the principal amount of the Global Notes; and

(2) ownership of these interests in the Global Notes will be shown on, and the transfer of ownership of these interests will be effected only through, records maintained by DTC (with respect to the Participants) or by the Participants and the Indirect Participants (with respect to other owners of beneficial interest in the Global Notes).

Investors in the Rule 144A Global Notes who are Participants in DTC’s system may hold their interests therein directly through DTC. Investors in the Rule 144A Global Notes who are not Participants may hold their interests therein indirectly through organizations (including Euroclear and Clearstream) which are Participants in such system. Investors in the Regulation S Global Notes must initially hold their interests therein through Euroclear or Clearstream, if they are participants in such systems, or indirectly through organizations that are participants in such systems. After the expiration of the Restricted Period (but not earlier), investors may also hold interests in the Regulation S Global Notes through Participants in the DTC system other than Euroclear and Clearstream. Euroclear and Clearstream will hold interests in the Regulation S Global Notes on behalf of their participants through customers’ securities accounts in their respective names on the books of their respective depositories, which are Euroclear Bank S.A./N.V., as operator of Euroclear, and Citibank, N.A., as operator of Clearstream. All interests in a Global Note, including those held through Euroclear or Clearstream, may be subject to the procedures and requirements of DTC. Those interests held through Euroclear or Clearstream may also be subject to the procedures and requirements of such systems. The laws of some states require that certain Persons take physical delivery in definitive form of securities that they own. Consequently, the ability to transfer beneficial interests in a Global Note to such Persons will be limited to that extent. Because DTC can act only on behalf of Participants, which in turn act on behalf of Indirect Participants, the ability of a Person having beneficial interests in a Global Note to pledge such interests to Persons that do not participate in the DTC system, or otherwise take actions in respect of such interests, may be affected by the lack of a physical certificate evidencing such interests.

Except as described below, owners of interests in the Global Notes do not and will not have notes registered in their names, do not and will not receive physical delivery of notes in certificated form and are not and will not be considered the registered owners or “Holders” thereof under the indenture for any purpose.

Payments in respect of the principal of, and interest and premium and Liquidated Damages, if any, on a Global Note registered in the name of DTC or its nominee will be payable to DTC in its capacity as the registered Holder under the indenture. Under the terms of the indenture, LBI Media and the trustee will treat the Persons in whose names the notes, including the Global Notes, are registered as the owners of the notes for the purpose of receiving payments and for all other purposes. Consequently, neither LBI Media, the trustee nor any agent of LBI Media or the trustee has or will have any responsibility or liability for:

(1) any aspect of DTC’s records or any Participant’s or Indirect Participant’s records relating to or payments made on account of beneficial ownership interest in the Global Notes or for maintaining, supervising or reviewing any of DTC’s records or any Participant’s or Indirect Participant’s records relating to the beneficial ownership interests in the Global Notes; or

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(2) any other matter relating to the actions and practices of DTC or any of its Participants or Indirect Participants.

DTC has advised LBI Media that its current practice, upon receipt of any payment in respect of securities such as the notes (including principal and interest), is to credit the accounts of the relevant Participants with the payment on the payment date unless DTC has reason to believe it will not receive payment on such payment date. Each relevant Participant is credited with an amount proportionate to its beneficial ownership of an interest in the principal amount of the relevant security as shown on the records of DTC. Payments by the Participants and the Indirect Participants to the beneficial owners of notes will be governed by standing instructions and customary practices and will be the responsibility of the Participants or the Indirect Participants and will not be the responsibility of DTC, the trustee or LBI Media. Neither LBI Media nor the trustee will be liable for any delay by DTC or any of its Participants in identifying the beneficial owners of the notes, and LBI Media and the trustee may conclusively rely on and will be protected in relying on instructions from DTC or its nominee for all purposes.

Transfers between Participants in DTC will be effected in accordance with DTC’s procedures, and will be settled in same-day funds, and transfers between participants in Euroclear and Clearstream will be effected in accordance with their respective rules and operating procedures.

Subject to compliance with the transfer restrictions applicable to the notes described herein, cross-market transfers between the Participants in DTC, on the one hand, and Euroclear or Clearstream participants, on the other hand, will be effected through DTC in accordance with DTC’s rules on behalf of Euroclear or Clearstream, as the case may be, by its respective depositary; however, such cross-market transactions will require delivery of instructions to Euroclear or Clearstream, as the case may be, by the counterparty in such system in accordance with the rules and procedures and within the established deadlines (Brussels time) of such system. Euroclear or Clearstream, as the case may be, will, if the transaction meets its settlement requirements, deliver instructions to its respective depositary to take action to effect final settlement on its behalf by delivering or receiving interests in the relevant Global Note in DTC, and making or receiving payment in accordance with normal procedures for same-day funds settlement applicable to DTC. Euroclear participants and Clearstream participants may not deliver instructions directly to the depositories for Euroclear or Clearstream.

DTC has advised LBI Media that it will take any action permitted to be taken by a Holder of notes only at the direction of one or more Participants to whose account DTC has credited the interests in the Global Notes and only in respect of such portion of the aggregate principal amount of the notes as to which such Participant or Participants has or have given such direction. However, if there is an Event of Default under the notes, DTC reserves the right to exchange the Global Notes for legended notes in certificated form, and to distribute such notes to its Participants.

Although DTC, Euroclear and Clearstream have agreed to the foregoing procedures to facilitate transfers of interests in the Rule 144A Global Notes and the Regulation S Global Notes among participants in DTC, Euroclear and Clearstream, they are under no obligation to perform or to continue to perform such procedures, and may discontinue such procedures at any time. Neither LBI Media nor the trustee nor any of their respective agents will have any responsibility for the performance by DTC, Euroclear or Clearstream or their respective participants or indirect participants of their respective obligations under the rules and procedures governing their operations.

Exchange of Global Notes for Certificated Notes

A Global Note is exchangeable for definitive notes in registered certificated form (“Certificated Notes”) if:

(1) DTC (a) notifies LBI Media that it is unwilling or unable to continue as depositary for the Global Notes or (b) has ceased to be a clearing agency registered under the Exchange Act and, in either case, LBI Media fails to appoint a successor depositary;

(2) in the case of a Global Note held for an account of Euroclear or Clearstream, Euroclear or Clearstream, as the case may be, (A) is closed for business for a continuous period of 14 days (other than by reason

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of statutory or other holidays), or (B) announces an intention permanently to cease business or does in fact do so;

(3) LBI Media, at its option, notifies the trustee in writing that it elects to cause the issuance of the Certificated Notes; or

(4) there has occurred and is continuing a Default or Event of Default with respect to the notes.

In addition, beneficial interests in a Global Note may be exchanged for Certificated Notes upon prior written notice given to the trustee by or on behalf of DTC in accordance with the indenture. Further, in no event will Regulation S Temporary Global Notes be exchanged for Certificated Notes prior to the expiration of the Restricted Period and receipt by the registrar of any certificates required pursuant to Regulation S. In all cases, Certificated Notes delivered in exchange for any Global Note or beneficial interests in Global Notes will be registered in the names, and issued in any approved denominations, requested by or on behalf of the depositary (in accordance with its customary procedures) and will bear the applicable restrictive legend relating to transfer restrictions unless that legend is not required by applicable law.

Exchange of Certificated Notes for Global Notes

Certificated Notes may not be exchanged for beneficial interests in any Global Note unless the transferor first delivers to the trustee a written certificate (in the form provided in the indenture) to the effect that such transfer will comply with the appropriate transfer restrictions applicable to such notes.

Exchanges Between Regulation S Notes and Rule 144A Notes

Prior to the expiration of the Restricted Period, beneficial interests in the Regulation S Global Note may be exchanged for beneficial interests in the Rule 144A Global Note only if:

(1) such exchange occurs in connection with a transfer of the notes pursuant to Rule 144A; and

(2) the transferor first delivers to the trustee a written certificate (in the form provided in the indenture) to the effect that the notes are being transferred to a Person:

(a) who the transferor reasonably believes to be a qualified institutional buyer within the meaning of Rule 144A;

(b) purchasing for its own account or the account of a qualified institutional buyer in a transaction meeting the requirements of Rule 144A; and

(c) in accordance with all applicable securities laws of the states of the United States and other jurisdictions.

Beneficial interest in a Rule 144A Global Note may be transferred to a Person who takes delivery in the form of an interest in the Regulation S Global Note, whether before or after the expiration of the Restricted Period, only if the transferor first delivers to the trustee a written certificate (in the form provided in the indenture) to the effect that such transfer is being made in accordance with Rule 903 or 904 of Regulation S or Rule 144 (if available) and that, if such transfer occurs prior to the expiration of the Restricted Period, the interest transferred will be held immediately thereafter through Euroclear or Clearstream.

Transfers involving exchanges of beneficial interests between the Regulation S Global Notes and the Rule 144A Global Notes will be effected in DTC by means of an instruction originated by the trustee through the DTC Deposit/Withdraw at Custodian system. Accordingly, in connection with any such transfer, appropriate adjustments will be made to reflect a decrease in the principal amount of the Regulation S Global Note and a corresponding increase in the principal amount of the Rule 144A Global Note or vice versa, as applicable. Any beneficial interest in one of the Global Notes that is transferred to a Person who takes delivery in the form of an interest in the other Global Note will, upon transfer, cease to be an interest in such Global Note and will become

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an interest in the other Global Note and, accordingly, will thereafter be subject to all transfer restrictions and other procedures applicable to beneficial interest in such other Global Note for so long as it remains such an interest. The policies and practices of DTC may prohibit transfers of beneficial interests in the Regulation S Global Note prior to the expiration of the Restricted Period.

Payments; Certifications by Holders of the Regulation S Temporary Global Notes

A holder of a beneficial interest in the Regulation S Temporary Global Notes must provide Euroclear or Clearstream, as the case may be, with a certificate in the form required by the indenture certifying that the beneficial owner of the interest in the Regulation S Temporary Global Notes is either not a U.S. Person (as defined below) or has purchased such interest in a transaction that is exempt from the registration requirements under the Securities Act (the “Regulation S Certificate”), and Euroclear or Clearstream, as the case may be, must provide to the trustee a certificate in the form required by the Indenture, prior to any exchange of such beneficial interest for a beneficial interest in the Regulation S Permanent Global Notes.

“U.S. Person” means:

(1) any individual resident in the United States;

(2) any partnership or corporation organized or incorporated under the laws of the United States;

(3) any estate of which an executor or administrator is a United States Person (other than an estate governed by foreign law and of which at least one executor or administrator is a non-U.S. Person who has sole or shared investment discretion with respect to its assets);

(4) any trust of which any trustee is a United States Person (other than a trust of which at least one trustee is a non-U.S. Person who has sole or shared investment discretion with respect to its assets and no beneficiary of the trust (and no settler if the trust is revocable) is a United States Person;

(5) any agency or branch of a foreign entity located in the United States;

(6) any non-discretionary or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a United States Person;

(7) any discretionary or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated or (if an individual) resident in the United States (other than such an account held for the benefit or account of a non-U.S. Person); and

(8) any partnership or corporation organized or incorporated under the laws of a foreign jurisdiction and formed by a United States Person principally for the purpose of investing in securities and not registered under the Securities Act (unless it is organized or incorporated, and owned, by accredited investors within the meaning of Rule 501(a) under the Securities Act who are not natural persons, estates or trusts) provided, however, that the term “U.S. Person” will not include:

(a) a branch or agency of a U.S. Person that is located and operating outside the United States for valid business purposes as a locally regulated branch or agency engaged in the banking or insurance business;

(b) any employee benefit plan established and administered in accordance with the law, customary practices and documentation of a foreign country; and

(c) the international organizations set forth in Section 902(o)(7) of Regulation S under the Securities Act and any other similar international organizations, and their agencies, affiliates and pension plans.

Same Day Settlement and Payment

LBI Media will make payments in respect of the notes represented by the Global Notes (including principal, premium, if any, interest and Liquidated Damages, if any) by wire transfer of immediately available funds to the

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accounts specified by the Global Note Holder. LBI Media will make all payments of principal, interest and premium and Liquidated Damages, if any, with respect to Certificated Notes by wire transfer of immediately available funds to the accounts specified by the Holders of the Certificated Notes or, if no such account is specified, by mailing a check to each such Holder’s registered address. The notes represented by the Global Notes are expected to be eligible to trade in the PORTAL market and to trade in DTC’s Same-Day Funds Settlement System, and any permitted secondary market trading activity in such notes will, therefore, be required by DTC to be settled in immediately available funds. LBI Media expects that secondary trading in any Certificated Notes will also be settled in immediately available funds.

Because of time zone differences, the securities account of a Euroclear or Clearstream participant purchasing an interest in a Global Note from a Participant in DTC will be credited, and any such crediting will be reported to the relevant Euroclear or Clearstream participant, during the securities settlement processing day (which must be a business day for Euroclear and Clearstream) immediately following the settlement date of DTC. DTC has advised LBI Media that cash received in Euroclear or Clearstream as a result of sales of interests in a Global Note by or through a Euroclear or Clearstream participant to a Participant in DTC will be received with value on the settlement date of DTC but will be available in the relevant Euroclear or Clearstream cash account only as of the business day for Euroclear or Clearstream following DTC’s settlement date.

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CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS

The following is a summary of material U.S. federal income tax consequences of the acquisition, ownership and disposition of the notes, but does not purport to be a complete analysis of all the potential tax considerations. This summary is limited to the tax consequences of those persons who are original beneficial owners of the notes, who purchase notes at their original issue price and who hold such notes as capital assets within the meaning of Section 1221 of the Code (“Holders”). This summary 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 particular investment circumstances or status, nor does it address specific tax consequences that may be relevant to particular persons (including, for example, financial institutions, broker-dealers, insurance companies, tax-exempt organizations and U.S. persons that have a functional currency other than the U.S. Dollar or persons in special situations, such as those who have elected to mark securities to market, or those who hold notes as part of a straddle, hedge, conversion transaction or other integrated investment). In addition, this summary does not address U.S. federal alternative minimum tax consequences or consequences under the tax laws of any state, local or foreign jurisdiction. This summary is based on upon the Internal Revenue Code of 1986, as amended (the “Code”), the Treasury Department regulations promulgated or proposed thereunder and administrative and judicial interpretations thereof, all as of the date hereof and all of which are subject to change, possibly on a retroactive basis. We have not sought any ruling from the Internal Revenue Service (the “IRS”) with respect to the statements made and the conclusions reached in this summary, and we cannot assure you that the IRS will agree with such statements and conclusions.

THIS SUMMARY IS FOR GENERAL INFORMATION ONLY. PROSPECTIVE PURCHASERS OF THE NOTES ARE URGED TO CONSULT THEIR TAX ADVISORS CONCERNING THE U.S. FEDERAL INCOME AND OTHER TAX CONSEQUENCES TO THEM OF ACQUIRING, OWNING AND DISPOSING OF THE NOTES, AS WELL AS THE APPLICATION OF STATE, LOCAL AND FOREIGN INCOME AND OTHER TAX LAWS.

As used herein, the term “U.S. Holder” means a Holder that is: (i) a citizen or individual resident of the U.S.; (ii) a corporation or other entity taxable as a corporation created or organized under the laws of the U.S. or any state thereof or in the District of Columbia; (iii) an estate, the income of which is subject to U.S. federal income tax regardless of the source; or (iv) a trust, if a court within the U.S. is able to exercise primary supervision over the trust’s administration and one or more U.S. persons have the authority to control all its substantial decisions or if a valid election to be treated as a U.S. person is in effect with respect to such trust.

A “Non-U.S. Holder” is a Holder that is not a U.S. Holder.

An entity that is characterized as a partnership for U.S. federal tax purposes is not subject to U.S. income tax on income or gains derived from the notes. However, a partner, member, shareholder or other equity owner of such an entity may be subject to U.S. federal income tax on such income or gains under rules for U.S. Holders or Non-U.S. Holders depending upon, among other things, whether: (i) such equity owner is a U.S. person or a non-U.S. person for U.S. federal tax purposes; and (ii) such entity is or is not engaged in a U.S. trade or business to which income or gains from the notes is effectively connected.

U.S. Federal Income Taxation of LBI Holdings I and Its Subsidiaries

Our parent, LBI Holdings, Inc., is currently classified as an S corporation, and all of its subsidiaries are classified as qualified Subchapter S subsidiaries for federal income tax purposes. As a result, the profits and losses of our parent and its subsidiaries are taxed directly to our parent’s shareholders. If our parent were to fail to qualify as an S corporation or any of its subsidiaries were to fail to qualify as subchapter S subsidiaries for federal income tax purposes (for example, as a result of any of the debt of the entities being classified as equity), then such entity’s taxable income would be subject to tax at regular corporate rates and would not flow through to the shareholders for reporting on their own tax returns. The loss of an entity’s S corporation status could be applied on a retroactive basis thereby resulting in such entity also owing taxes for past periods. Thus, if our

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parent or any of its subsidiaries were to lose their S corporation status, we would likely have less cash available to meet our obligations with respect to the notes.

U.S. Federal Income Taxation of U.S. Holders

Taxation of Interest Income

Payments of stated interest on a note generally will be taxable to a U.S. Holder as ordinary interest income at the time such interest is received or accrued, depending on the U.S. Holder’s method of tax accounting, so long as such interest represents “qualified stated interest” within the meaning of Treasury regulations promulgated under the Code. For this purpose, qualified stated interest means stated interest that is unconditionally payable in cash at least annually, at a single fixed rate or a qualifying variable rate, that appropriately takes into account the length intervals between interest payment dates. Under the Treasury regulations, stated interest on the notes is unconditionally payable only if reasonable legal remedies exist to compel timely payment, or the notes otherwise provide terms and conditions that make the likelihood of late payment (other than a late payment that occurs within a reasonable grace period) or nonpayment a remote contingency.

In the absence of further guidance from the IRS regarding the circumstances under which interest will be treated as unconditionally payable, the Issuer intends to take the position that stated interest on the notes is qualified stated interest. However, there can be no assurance that the IRS will not take a contrary position. If the IRS were to successfully argue that the stated interest on the notes is not qualified stated interest (because, for example, the interest is subject to blockage), the stated interest on the notes would be treated as “original issue discount” (“OID”) that U.S. Holders must accrue in gross income on a constant yield basis, regardless of the U.S. Holder’s method of tax accounting.

Treatment of Payments upon Registration Default

A registration default with respect to the notes will cause additional amounts to accrue on the notes in the manner described under “The Exchange Offer; Registration Rights.” We believe that the likelihood of the payment of Liquidated Damages as a result of a registration default is remote. Accordingly, we do not intend to treat the possibility of such a change as affecting the yield to maturity of any note. Thus, such additional amounts will be includable in the income of a U.S. Holder at the time it accrues or is received, in accordance with such Holder’s method of accounting for U.S. tax purposes. Our determination that there is a remote likelihood of paying additional amounts on the notes is binding on each U.S. Holder unless the Holder explicitly discloses that its determination is different from our determination. Our determination is not, however, binding on the IRS. Accordingly, it is possible that the IRS may take a different position which if sustained could affect the timing of the U.S. Holder’s income with respect to such additional amounts. Similarly, we intend to take the position that the occurrence of an event requiring us to repurchase the notes at the election of a Holder (see “Description of the Exchange Notes—Repurchase at Option of Holders”) is remote, and likewise do not intend to treat the possibility of such occurrence as affecting the timing or amount of interest on any note.

Disposition of Notes

Upon the sale, exchange, redemption or other disposition of a note, a U.S. Holder generally will recognize taxable gain or loss equal to the difference between: (i) the sum of cash plus the fair market value of all other property received on such disposition (except to the extent such cash or property is attributable to accrued but unpaid interest, which is treated as interest as described above); and (ii) such Holder’s adjusted tax basis in the note. A U.S. Holder’s adjusted tax basis in a note generally will equal the cost of the note to such Holder, less any principal payments received by such Holder.

Gain or loss recognized on the disposition of a note generally will be capital gain or loss, and will be long-term capital gain or loss if, at the time of such disposition, the U.S. Holder’s holding period for the note is more than 12 months. The deductibility of capital losses by U.S. Holders is subject to limitations.

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Exchange Offer

The exchange of old notes for exchange notes in the Exchange Offer will not constitute a taxable event for U.S. Holders. Consequently, a U.S. Holder will not recognize gain upon receipt of an exchange note in exchange for old notes in the Exchange Offer, the U.S. Holder’s basis in the exchange note received in the Exchange Offer will be the same as its basis in the corresponding old note immediately before the exchange and the U.S. Holder’s holding period in the exchange note will include its holding period in the original old note.

U.S. Federal Income Taxation of Non-U.S. Holders

Payments of Interest

Subject to the discussion of backup withholding below, payments of interest (including of additional amounts payable upon our registration default) on the notes by us or any of our agents to a Non-U.S. Holder generally will not (under the so-called “portfolio interest exemption”) be subject to U.S. federal withholding tax, provided that:

(1) the Non-U.S. Holder does not, directly or indirectly, actually or constructively own 10% or more of the total combined voting power of all classes of our stock entitled to vote;

(2) the Non-U.S. Holder is not a controlled foreign corporation for U.S. federal income tax purposes that is related to us (directly or indirectly) through stock ownership;

(3) the Non-U.S. Holder is not a bank receiving interest on an extension of credit pursuant to a loan agreement entered into in the ordinary course of its trade or business; and

(4) certain certification requirements are met. Very generally, these certification requirements will be met if the beneficial owner of the note certifies on IRS Form W-8BEN or a substantially similar form that it is not a U.S. person and provides its name and address, and either (A) the beneficial owner files such form with the withholding agent, or (B) in the case of a note held through a entity treated as a foreign partnership for U.S. federal tax purposes or held through an intermediary, the beneficial owner and such entity or intermediary (as the case may be) satisfy certain certification requirements set forth in the Treasury Regulations (the “Portfolio Interest Exemption”).

If a Non-U.S. Holder cannot satisfy the requirements of the Portfolio Interest Exemption (as summarized above), payments of interest made to such Non-U.S. Holder will be subject to a 30% withholding tax unless the beneficial owner of the note provides us or our agent, as the case may be, with a properly executed IRS Form W-8BEN (or successor form) claiming an exemption from or a reduction in withholding under the benefit of a tax treaty or IRS Form W-8ECI (or successor form) stating that interest paid on the note is not subject to withholding tax because it is U.S. trade or business income to the beneficial owner.

The certification requirement described above also may require a Non-U.S. Holder that provides an IRS form, or that claims the benefit of an income tax treaty, to provide its U.S. taxpayer identification number. The applicable regulations generally also require, in the case of a note held by a foreign partnership, that:

(1) the certification described above be provided by the partners and

(2) the partnership provide certain information, including a U.S. taxpayer identification number.

Further, a look-through rule will apply in the case of tiered partnerships.

You should consult your tax advisor about the specific methods for satisfying these requirements. A claim for exemption will not be valid if the person receiving the applicable form has actual knowledge that the statements on the form are false.

If interest on the note is effectively connected with a U.S. trade or business of the beneficial owner, the Non-U.S. Holder, although exempt from the withholding tax described above, will nonetheless be subject to U.S.

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federal income tax on such interest on a net income basis in the same manner as if it were a U.S. Holder. In addition, if such Holder is a foreign corporation, it may be subject to a branch profits tax equal to 30% of its effectively connected earnings and profits for the taxable year, subject to adjustments. For this purpose, interest on a note will be included in such foreign corporation’s earnings and profits.

Disposition of Notes

No withholding of U.S. federal income tax will be required with respect to any gain or income realized by a Non-U.S. Holder upon the sale, exchange or disposition of a note.

A Non-U.S. Holder will not be subject to U.S. federal income tax on gain realized on the sale, exchange or other disposition of a note unless: (i) the Non-U.S. Holder is an individual who is present in the U.S. for a period or periods aggregating 183 or more days in the taxable year of the disposition and certain other conditions are met; (ii) the Non-U.S. Holder is subject to tax pursuant to the provisions of U.S. tax law applicable to certain U.S. expatriates; or (iii) such gain or income is effectively connected with a U.S. trade or business.

Exchange Offer

The exchange of old notes for exchange notes in the Exchange Offer will not constitute a taxable event for a Non-U.S. Holder.

Information Reporting and Backup Withholding

U.S. Holders

For each calendar year in which the notes are outstanding, we are required to provide the IRS with certain information, including the beneficial owner’s name, address and taxpayer identification number, the aggregate amount of interest paid to that beneficial owner during the calendar year and the amount of tax withheld, if any. This obligation, however, does not apply with respect to payments to certain U.S. Holders, including corporations and tax-exempt organizations.

In the event that a U.S. Holder subject to the reporting requirements described above fails to supply its correct taxpayer identification number in the manner required by applicable law or underreports its tax liability, we, our agents or paying agents or a broker may be required to “backup” withhold a tax upon each payment of interest and principal (and premium or Liquidated Damages, if any) on the notes. This backup withholding is not an additional tax and may be credited against the U.S. Holder’s U.S. federal income tax liability, provided that the required information is furnished to the IRS.

Non-U.S. Holders

Under current Treasury Regulations, U.S. information reporting requirements and backup withholding tax will not apply to payments on a note to a Non-U.S. Holder if the statement described in “U.S. Federal Income Taxation of Non-U.S. Holders—Payments of Interest” is duly provided by such holder or the holder otherwise establishes an exemption, provided that the payor does not have actual knowledge or reason to know that the holder is a U.S. person or that the conditions of any claimed exemption are not satisfied.

Generally, information reporting requirements and backup withholding tax will not apply to any payment of the proceeds of the sale of a note effected outside the U.S. by a foreign office of a “broker” (as defined in applicable Treasury Regulations), unless the broker is: (i) a U.S. person; (ii) a foreign person that derives 50% or more of its gross income for certain periods from activities that are effectively connected with the conduct of a trade or business in the U.S.; (iii) a controlled foreign corporation for U.S. federal income tax purposes; or (iv) a foreign partnership more than 50% of the capital or profits of which is owned by one or more U.S. persons or

119

which engages in a U.S. trade or business. Payment of the proceeds of any such sale effected outside the U.S. by a foreign office of any broker that is described in (i), (ii), (iii), or (iv) of the preceding sentence may be subject to information-reporting requirements (but not backup withholding requirements unless there is actual knowledge to the contrary) unless such broker has documentary evidence in its records that the beneficial owner is a Non-U.S. Holder and certain other conditions are met, or the beneficial owner otherwise establishes an exemption. Payment of the proceeds of any such sale to or through the U.S. office of a broker is subject to information reporting and backup withholding requirements, unless the beneficial owner of the note provides the statement described in “U.S. Federal Income Taxation of Non-U.S. Holders—Payments of Interest” or otherwise establishes an exemption.

120

PLAN OF DISTRIBUTION

Each broker-dealer that receives exchange notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of the exchange 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 exchange notes received in the exchange offer, where the exchange notes were acquired as a result of market-making activities or other trading activities. We have agreed that, for a period of 180 days after the expiration of the exchange offer, we will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale. In addition, until such date, all dealers effecting transactions in the exchange notes may be required to deliver a prospectus. We reserve the right in our sole discretion to purchase or make offers for, or to offer exchange notes for, any old notes that remain outstanding after the expiration of the exchange offer pursuant to this prospectus or otherwise and, to the extent permitted by applicable law, purchase old notes in the open market, in privately negotiated transactions or otherwise.

We will not receive any proceeds from any sale of exchange notes by broker-dealers. Exchange notes received by broker-dealers in the exchange offer for their own account 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 exchange notes or a combination of those methods of resale, at market prices prevailing at the time of resale, at prices related to the prevailing market prices or negotiated prices. Any resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any broker-dealer and/or the purchasers of any of the exchange notes. Any broker-dealer that resells exchange notes that were received by it in the exchange offer for its own account and any broker or dealer that participates in a distribution of the exchange notes may be deemed to be an “underwriter” within the meaning of the Securities Act and any profit on such a resale of the exchange notes and any commissions or concessions received by those persons 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 meeting the requirements of the Securities Act, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

For a period of 180 days 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 these documents in the letter of transmittal. We have agreed to pay certain expenses incident to our performance of or compliance with the registration rights agreement, other than commissions or concessions of any brokers or dealers, and will indemnify holders of the old notes against certain liabilities, including liabilities under the Securities Act.

121

NOTICE TO CANADIAN INVESTORS

Offering Restricted to Ontario

Resale Restrictions

The distribution of the exchange notes in Canada is being made only on a private placement basis exempt from the requirement that we prepare and file a prospectus with the securities regulatory authorities in each province where trades of the exchange notes are made. Accordingly, any resale of the exchange notes in Canada must be made under applicable securities laws which will vary depending on the relevant jurisdictions, and which may require resales to be made under available statutory exemptions or under a discretionary exemption granted by the applicable Canadian securities regulatory authority. Purchasers of the exchange notes are advised to seek legal advice prior to any resale of the exchange notes in Canada.

Representation of Purchasers

By exchanging old notes in Canada the holder is representing to us that: (1) such holder is entitled under applicable provincial securities laws to exchange such notes without the benefit of a prospectus qualified under such securities laws; (2) where required by law, that the holder is exchanging as principal and not as agent; and (3) the holder has reviewed the text above under Resale Restrictions.

Rights of Action—Ontario Purchasers Only

The securities being offered are those of a foreign issuer and Ontario purchasers will not receive the statutory right of action prescribed by Ontario securities law. As a result, Ontario purchasers must rely on other remedies that may be available, including common law rights of action for damages or rescission or rights of action under the civil liability provisions of the U.S. federal securities laws.

Enforcement of Legal Rights

All of our directors and officers as well as any experts named herein may be located outside of Canada and, as a result, it may not be possible for Canadian holders to effect service of process within Canada upon us or those directors, officers or experts. All or a substantial portion of our assets and the assets of those directors, officers and experts may be located outside of Canada and, as a result, it may not be possible to satisfy a judgment against us or those persons in Canada or to enforce a judgment obtained in Canadian courts against us or those persons outside of Canada.

Taxation and Eligibility for Investment

Canadian holders of exchange notes should consult their own legal and tax advisors with respect to the tax consequences of an investment in the exchange notes in their particular circumstances and about the eligibility of the investment by the holder under relevant Canadian legislation.

122

LEGAL MATTERS

The validity of the exchange notes will be passed upon for us by O’Melveny & Myers LLP, Los Angeles, California.

EXPERTS

The consolidated financial statements of LBI Media Inc. at December 31, 2001 and 2000, and for each of the three years in the period ended December 31, 2001, appearing in this Prospectus and Registration Statement have been audited by Ernst & Young LLP, independent auditors, as set forth in their report thereon appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

123

INDEX TO FINANCIAL STATEMENTS

	Page
Report of Independent Auditors	F-2
Consolidated Balance Sheets as of December 31, 2000 and 2001 and June 30, 2002 (unaudited)	F-3
Consolidated Statements of Operations for the Years Ended December 31, 1999, 2000 and 2001 and the Six Months Ended June 30, 2001 and 2002 (unaudited)	F-4
Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 1999, 2000 and 2001 and the Six Months Ended June 30, 2002 (unaudited)	F-5
Consolidated Statement of Cash Flows for the Years Ended December 31, 1999, 2000 and 2001 and the Six Months Ended June 30, 2002 (unaudited)	F-6
Notes to Consolidated Financial Statements	F-7

F-1

REPORT OF INDEPENDENT AUDITORS

Board of Directors

LBI Media, Inc.

We have audited the accompanying consolidated balance sheets of LBI Media, Inc. as of December 31, 2000 and 2001, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2001. 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 in accordance with auditing standards generally accepted in the United States. Those standards 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. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of LBI Media, Inc. at December 31, 2000 and 2001, and the consolidated results of its operations and its 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.

Los Angeles, California

April 23, 2002

F-2

LBI MEDIA, INC.

CONSOLIDATED BALANCE SHEETS

	December 31,						June 30, 2002
	2000			2001
							(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	485,555		$	1,131,349		$	2,076,638
Short-term investments		220,356			332,810			112,380
Accounts receivable (less allowance for doubtful accounts of $211,536 in 2000, $161,030 in 2001 and $166,965 in 2002)		5,416,162			7,147,148			9,962,740
Current portion of program rights, net		827,336			895,165			1,072,392
Amounts due from related parties		752,639			1,208,818			1,457,181
Prepaid expenses and other current assets		524,647			1,304,395			1,163,762
Total current assets		8,226,695			12,019,685			15,845,093
Property and equipment, net		20,881,564			46,817,209			46,838,160
Program rights, excluding current portion		2,041,699			1,659,560			2,502,038
Deferred financing costs, net		1,870,008			6,609,083			7,074,521
Broadcast licenses, net		89,796,784			181,293,995			173,190,223
Acquisition costs		704,606			—			843,605
Escrow funds		8,500,000			—			157,500
Easement (less accumulated amortization of $4,597,230 in 2000)		8,224,034			—			—
Total assets	$	140,245,390		$	248,399,532		$	246,451,140
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable and accrued expenses	$	2,022,107		$	1,873,783		$	2,580,677
Accrued interest		691,364			2,347,376			1,044
Program rights payable		56,187			—			—
Notes payable to related parties		3,163,836			1,861,607			1,861,607
Current portion of long-term debt		9,362,221			10,292,061			11,019,692
Total current liabilities		15,295,715			16,374,827			15,463,020
Long-term debt, net of current portion		64,433,835			206,614,156			203,814,124
Accrued interest, net of current portion					—			2,450,787
Deferred compensation		1,240,000			2,638,000			5,091,000
Deferred state income taxes		100,000			232,716			243,116
Other liabilities		—			—			31,698
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.01 par value:
Authorized shares—1,000
Issued and outstanding shares—100		1			1			1
Additional paid-in capital		45,049,999			22,817,434			22,817,434
Retained earnings (deficit)		14,197,520			(318,396	)		(3,444,000	)
Accumulated other comprehensive income (loss)		(71,680	)		40,794			(16,040	)
Total stockholders’ equity		59,175,840			22,539,833			19,357,395
Total liabilities and stockholders’ equity	$	140,245,390		$	248,399,532		$	246,451,140

See accompanying notes.

F-3

LBI MEDIA, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

	Year Ended December 31,									Six Months Ended June 30,
	1999			2000			2001			2001			2002
										(unaudited)
Revenues	$	39,923,496		$	56,128,789		$	66,530,464		$	30,927,941		$	37,674,043
Less agency commissions		3,505,797			5,576,650			6,873,360			3,124,868			4,120,441
Net revenues		36,417,699			50,552,139			59,657,104			27,803,073			33,553,602
Operating expenses:
Program and technical		5,548,927			6,387,961			8,623,718			3,547,637			4,654,415
Promotional		1,572,235			2,476,827			2,526,973			745,491			854,350
Selling, general and administrative		10,618,185			13,685,002			15,592,732			6,839,781			9,482,307
Noncash employee compensation		—			1,240,000			1,398,000			817,000			2,453,000
Depreciation		1,386,402			1,674,515			2,347,165			873,946			1,524,314
Amortization		3,048,491			2,962,799			6,326,025			2,617,024			—
Total operating expenses		22,174,240			28,427,104			36,814,613			15,440,879			18,968,386
Operating income		14,243,459			22,125,035			22,842,491			12,362,194			14,585,216
Interest expense		(6,631,681	)		(6,837,540	)		(21,446,072	)		(10,258,293	)		(9,668,712	)
Interest and other income		170,728			240,238			473,634			317,350			84,692
Income before income taxes and cumulative effect of accounting change		7,782,506			15,527,733			1,870,053			2,421,251			5,001,196
Provision for income taxes		6,400			74,274			80,583			73,106			20,800
Income before cumulative effect of accounting change		7,776,106			15,453,459			1,789,470			2,348,145			4,980,396
Cumulative effect of accounting change		—			—			—			—			(8,106,000	)
Net income (loss)	$	7,776,106		$	15,453,459		$	1,789,470		$	2,348,145		$	(3,125,604	)

See accompanying notes.

F-4

LBI MEDIA, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

	Common Stock
	Number of Shares	Amount		Additional Paid-in Capital			Retained Earnings (Deficit)			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity
Balances at December 31, 1998	100	$	1	$	45,049,999		$	940,888		$	11,950		$	46,002,838
Net income	—		—		—			7,776,106			—			7,776,106
Unrealized gain on investment in marketable securities	—		—		—			—			66,865			66,865
Comprehensive income														7,842,971
Distributions to Parent	—		—		—			(263,710	)		—			(263,710	)
Balances at December 31, 1999	100		1		45,049,999			8,453,284			78,815			53,582,099
Net income	—		—		—			15,453,459			—			15,453,459
Unrealized loss on investment in marketable securities	—		—		—			—			(150,495	)		(150,495	)
Comprehensive income														15,302,964
Distributions to Parent	—		—		—			(9,709,223	)		—			(9,709,223	)
Balances at December 31, 2000	100		1		45,049,999			14,197,520			(71,680	)		59,175,840
Net income	—		—		—			1,789,470			—			1,789,470
Unrealized gain on investment in marketable securities	—		—		—			—			112,474			112,474
Comprehensive income														1,901,944
Contribution by Parent	—		—		30,000,000			—			—			30,000,000
Distributions to Parent	—		—		(52,232,565	)		(16,305,386	)		—			(68,537,951	)
Balances at December 31, 2001	100		1		22,817,434			(318,396	)		40,794			22,539,833
Net loss (unaudited)	—		—		—			(3,125,604	)		—			(3,125,604	)
Unrealized loss on investment in marketable securities (unaudited)	—		—		—			—			(3,858	)		(3,858	)
Adjustment to unrealized gain due to sale of investment in marketable securities (unaudited)	—		—		—			—			(52,976	)		(52,976	)
Comprehensive loss (unaudited)	—		—		—			—			—			(3,182,438	)
Balances at June 30, 2002 (unaudited)	100	$	1	$	22,817,434		$	(3,444,000	)	$	(16,040	)	$	19,357,395

See accompanying notes.

F-5

LBI MEDIA, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year Ended December 31,									Six Months Ended June 30,
	1999			2000			2001			2001			2002
										(unaudited)
Operating activities
Net income (loss)	$	7,776,106		$	15,453,459		$	1,789,470		$	2,348,145		$	(3,125,604	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Loss on sale of fixed assets		6,262			—			—			—			—
Cumulative effect of accounting change		—			—			—			—			8,106,000
Depreciation and amortization		4,434,893			4,637,314			8,673,190			3,490,970			1,524,314
Amortization of deferred financing costs		304,038			304,038			3,550,729			3,139,663			498,632
Noncash employee compensation		—			1,240,000			1,398,000			817,000			2,453,000
Gain on sale of investments		—			—			—			—			(52,976	)
Provision for bad debts		179,443			96,000			170,221			42,982			90,014
Changes in operating assets and liabilities:
Accounts receivable		(366,322	)		(2,141,818	)		(1,901,207	)		(342,233	)		(2,905,606	)
Program rights		(769,487	)		(101,969	)		314,310			124,899			(1,019,705	)
Amounts due from related parties		(703,753	)		487,114			(456,179	)		231,466			(248,363	)
Prepaid expenses and other current assets		347,733			59,634			(779,748	)		(454,833	)		140,633
Accounts payable and accrued expenses		657,970			507,432			(148,324	)		561,099			706,894
Accrued interest		(6,154	)		60,921			1,656,012			2,381,010			104,455
Program rights payable		(117,058	)		(208,938	)		(56,187	)		(56,187	)		—
Deferred state income tax payable		—			—			132,716			126,997			10,400
Other liabilities		—			—			—			—			31,698
Net cash provided by operating activities		11,743,671			20,393,187			14,343,003			12,410,978			6,313,786
Investing activities
Purchase of property and equipment		(4,668,343	)		(4,044,226	)		(13,953,528	)		(8,247,83	)		(1,545,265	)
Acquisition costs		—			(704,606	)		—			—			(843,605	)
Purchase of investments		—			(258,160	)		—			—			—
Acquisition of television and radio station property and equipment		(5,024,622	)		—			(6,212,072	)		(6,212,072	)		—
Acquisition of broadcast licenses		—			—			(88,511,786	)		(88,459,328	)		(2,228	)
Amounts deposited in escrow for the acquisition of broadcast licenses		—			(8,500,000	)		—			—			(157,500	)
Proceeds from sale of investments		—			—			—			—			216,592
Net cash used in investing activities		(9,692,965	)		(13,506,992	)		(108,677,386	)		(102,918,583	)		(2,332,006	)
Financing activities
Proceeds from issuance of long-term debt, net of financing costs		7,250,000			4,500,000			216,845,858			211,760,672			3,752,978
Payment on notes payable to related parties		—			—			(2,000,000	)		(2,000,000	)		—
Payments on long-term debt		(5,646,002	)		(5,807,942	)		(81,327,730	)		(70,762,884	)		(6,789,469	)
Distribution to Parent		(263,710	)		(9,709,223	)		(68,537,951	)		(68,537,951	)		—
Contributions from Parent		—			—			30,000,000			30,000,000			—
Net cash provided by (used in) financing activities		1,340,288			(11,017,165	)		94,980,177			100,459,837			(3,036,491	)
Net increase (decrease) in cash and cash equivalents		3,390,994			(4,130,970	)		645,794			9,952,232			945,289
Cash and cash equivalents at beginning of period		1,225,531			4,616,525			485,555			485,555			1,131,349
Cash and cash equivalents at end of period	$	4,616,525		$	485,555		$	1,131,349		$	10,437,787		$	2,076,638
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest	$	6,208,769		$	6,162,045		$	11,876,768		$	5,403,282		$	4,351,688
Income taxes	$	10,400		$	10,400		$	10,400		$	14,400		$	10,400

See accompanying notes.

F-6

LBI MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2001

(Information Pertaining to the Six Months Ended June 30, 2001 and 2002 is Unaudited)

1.    Summary of Significant Accounting Policies

Description of Business and Basis of Presentation

LBI Media, Inc. is incorporated in California as LBI Holdings II and is a wholly owned subsidiary of LBI Intermediate Holdings, Inc., which is a wholly-owned subsidiary of LBI Holdings I (Parent). LBI Intermediate Holdings, Inc. and LBI Holdings II are holding companies with substantially no assets, operations or cash flows other than their investment in their subsidiaries. Before the issuance of Senior Subordinated Notes due 2012 (see Note 6), LBI Holdings II changed its name to LBI Media, Inc. and after the issuance of the senior subordinated notes, LBI Intermediate Holdings, Inc. merged into LBI Media, Inc. The accompanying consolidated financial statements were prepared as if the merger had already occurred.

LBI Media, Inc. and its wholly owned subsidiaries (collectively referred to as the Company) own and operate radio and television stations located in California and Texas. In addition, the Company owns a television studio facility that is used to produce programming for Company-owned television stations, and is also rented to independent third parties. The Company sells commercial airtime on its radio and television stations to national and local advertisers.

The Company’s radio stations include KHJ-AM, located in Los Angeles, California, KWIZ-FM and KVNR-AM in Santa Ana, California, KBUE-FM in Long Beach, California, KBUA-FM in San Fernando, California, KQUE-AM in Houston, Texas, KSEV-AM in Tomball, Texas, KJOJ-AM in Conroe, Texas, KJOJ-FM in Freeport, Texas, and KTJM-FM in Port Arthur, Texas.

The Company’s television stations are KRCA-TV located in Burbank, California, KSDX-LP in San Diego, California, and KZJL-TV in Houston, Texas.

The Company’s television studio facility is Empire Burbank Studios, Inc. (Empire) in Burbank, California.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company as if the merger discussed above had already occurred. All significant intercompany accounts and transactions have been eliminated. The accounts of the Parent are not included in the accompanying consolidated financial statements.

Interim Financial Data

The unaudited consolidated financial statements of the Company for the six months ended June 30, 2001 and 2002 have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, include all adjustments (consisting only of normal recurring adjustments) necessary to state fairly the financial information set forth therein, in accordance with accounting principles generally accepted in the United States.

The result of operations for the six months ended June 30, 2002 are not necessarily indicative of the results to be expected for the full fiscal year.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments purchased with an original maturity of three months or less and investments in money market accounts to be cash equivalents.

F-7

LBI MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Fair Value of Financial Instruments

The carrying value of the Company’s financial instruments included in current assets and current liabilities (such as cash and equivalents, accounts receivable, accounts payable and accrued expenses, and other similar items) approximate fair value due to the short-term nature of such instruments. The majority of the Company’s long-term debt has variable interest rates and, accordingly, the carrying value is a reasonable estimate of its fair value.

Short-Term Investments

The Company holds investments in marketable equity securities which have been classified by management as available for sale. Securities classified as available for sale are carried at fair value, which is based on quoted market prices. Unrealized holding gains and losses are excluded from net (loss) income and are recorded as accumulated other comprehensive income or loss.

Program Rights

Program rights are stated at the lower of unamortized cost or estimated net realizable value. Program rights, together with the related liabilities, are recorded when the license period begins and the program becomes available for broadcast. Program rights are amortized using the straight-line method over the license term. Program rights expected to be amortized in the succeeding year and program rights payable due within one year are classified as current assets and current liabilities, respectively.

Property and Equipment

Property and equipment are recorded at cost less accumulated depreciation. Depreciation is computed using the straight-line method over estimated useful lives as follows:

Buildings and building improvements	20 years
Antennae, towers and transmitting equipment	12 years
Studio and production equipment	10 years
Record and tape libraries	10 years
Computer equipment and software	3 years
Office furnishings and equipment	5 years
Automobiles	5 years

The carrying value of property and equipment is evaluated periodically in relation to the operating performance and anticipated future cash flows of the underlying radio and television stations for indicators of impairment. When indicators of impairment are present and the undiscounted cash flows estimated to be generated from these assets are less than the carrying value of these assets, an adjustment to reduce the carrying value to the fair market value of the assets is recorded, if necessary. No adjustments to the carrying amounts of property and equipment have been made during 1999, 2000 and 2001.

Broadcast Licenses

Broadcast licenses acquired in conjunction with the acquisition of various radio and television stations were amortized over estimated useful lives ranging from 20 to 40 years, using the straight-line method through December 31, 2001. Beginning January 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets” (SFAS 142). Under SFAS 142, which was issued by

F-8

LBI MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

the Financial Accounting Standards Board (FASB) in June 2001, companies are required to stop amortizing all goodwill and other intangible assets with indefinite lives (such as broadcast licenses). Instead, SFAS 142 requires that goodwill and intangible assets with indefinite lives be reviewed for impairment upon adoption of SFAS 142 and annually thereafter. Other intangible assets will continue to be amortized over their estimated useful lives.

Upon adoption of SFAS 142 in the first quarter of 2002, the Company recorded a noncash charge of approximately $8.1 million to reduce the carrying value of certain of its broadcast licenses. Such charge is reflected as a cumulative effect of an accounting change in the accompanying consolidated statements of operations. In calculating the impairment charge, the fair value of the Company’s broadcast licenses was determined by independent third party appraisals.

A reconciliation of reported net income (loss) to net income (loss) adjusted to reflect the impact of the discontinuance of amortization of broadcast licenses for the years ended December 31, 1999, 2000, and 2001, and the six months ended June 30, 2001 and 2002 is as follows:

	Year Ended December 31,						Six Months Ended June 30,
	1999		2000		2001		2001		2002
Reported net income (loss)	$	7,776,106	$	15,453,459	$	1,789,470	$	2,348,145	$	(3,125,604	)
Add back: Broadcast license amortization		2,616,491		2,530,799		6,218,025		2,509,024		—
Adjusted net income (loss)	$	10,392,597	$	17,984,258	$	8,007,495	$	4,857,169	$	(3,125,604	)

The carrying value of broadcast licenses is evaluated periodically in relation to the operating performance and anticipated future cash flows of the underlying radio and television stations for indicators of impairment. If indicators of impairment were identified and the undiscounted cash flows estimated to be generated from these assets were less than the carrying value, an adjustment to reduce the carrying value to the fair market value of the assets would be recorded, if necessary. No adjustments to the carrying amounts of broadcast licenses for impairment were made during 1999, 2000 and 2001.

Accumulated amortization of broadcast licenses totaled $11,477,000 and $17,696,000 at December 31, 2000 and 2001, respectively.

Barter Transactions

Included in the consolidated statements of operations are nonmonetary transactions arising from the trading of advertising time for merchandise and services. Barter revenue and expense are recorded at the fair market value of the goods or services received when the advertisement is broadcast. Barter revenue and expense totaled $735,000, $1,061,000 and $773,000 for the years ended December 31, 1999, 2000 and 2001, respectively.

Deferred Financing Costs

Financing costs are amortized using the straight-line method over the terms of the related credit facilities. Amortization of such costs is included in interest expense in the accompanying consolidated statements of operations.

In connection with the refinancing of the Company’s credit facilities on March 20, 2001 (see Note 6), the Company wrote off to interest expense unamortized deferred financing costs of approximately $1,869,000.

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LBI MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Revenue Recognition

Broadcasting revenues from local and national commercial advertising are recognized when the advertisements are broadcast. Revenues from renting airtime are recognized when such time is made available to the customer.

Revenue from the rental of studio facilities is recognized as such facilities are utilized.

Income Taxes

The Company is a “qualified S subsidiary” for federal and California income tax purposes. As such, the Company is deemed to be part of its Parent, an “S Corporation,” for tax purposes, and the taxable income of the Company is required to be reported by the stockholders of the Parent on their respective federal and state income tax returns. California assesses a 1.5% tax on all “S Corporations” subject to certain minimum taxes. Deferred taxes provided by the Company relate to the 1.5% tax on certain temporary differences primarily related to depreciation, amortization, and gain deferral on prior sales.

Advertising Costs

Advertising costs are expensed as incurred. The accompanying consolidated statements of operations include advertising costs (included in promotional expenses) of approximately $786,000, $1,399,000 and $1,296,000 for the years ended December 31, 1999, 2000 and 2001, respectively, and approximately $397,000 and $351,000 for the six months ended June 30, 2001 and 2002, respectively.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Concentration of Credit Risk

The Company sells broadcast time to a diverse customer base including advertising agencies and other direct customers. The Company performs credit evaluations of its customers and generally does not require collateral. The Company maintains allowances for potential losses and such losses have been within management’s expectations.

Comprehensive Income (Loss)

For the years ended December 31, 1999, 2000 and 2001, comprehensive income (loss) amounted to $7,842,971, $15,302,964, and $1,901,944, respectively. For the six months ended June 30, 2001 and 2002, comprehensive income (loss) amounted to $2,462,089 and $(3,182,438) respectively.

Recent Accounting Pronouncements

In June 2001, the FASB issued SFAS No. 141, “Business Combinations” (SFAS 141). SFAS 141 requires the purchase method of accounting for business combinations initiated after June 30, 2001 and eliminates the pooling-of-interests method. The adoption of SFAS 141 did not have a material impact on the Company’s financial position or results of operations.

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LBI MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

In August 2001, the FASB issued SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (SFAS No. 144). SFAS No. 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets. This statement requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. SFAS No. 144 requires companies to separately report discontinued operations and extends that reporting to a component of an entity that either has been disposed of (by sale, abandonment, or in a distribution to owners) or is classified as held for sale. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. The Company adopted SFAS No. 144 on January 1, 2002. The adoption of the new standard did not have a material impact on the results of operations or financial position of the Company.

2.    Acquisitions

In March 2001, the Company acquired selected assets of five radio stations and one television station for an aggregate purchase price of $103,928,464, including acquisition costs of $2,928,464. The Company changed the format, customer base, and employee base of the acquired stations, and allocated the purchase price as follows:

Broadcast licenses	$	97,716,392
Property and equipment		6,212,072
	$	103,928,464

No stations were purchased during the year ended December 31, 2000, and no material acquisitions occurred during the year ended December 31, 1999. At December 31, 2000, the Company had placed into escrow or incurred $9,204,606 related to the above acquisitions.

3.    Property and Equipment

Property and equipment consist of the following:

	December 31,						June 30, 2002
	2000			2001
							(Unaudited)
Land	$	1,773,014		$	14,241,494		$	14,241,494
Building and building improvements		12,193,914			15,682,344			16,013,774
Antennae, towers and transmitting equipment		5,263,322			10,588,453			13,517,932
Studio and production equipment		3,655,362			6,265,205			6,748,242
Record and tape libraries		131,782			100,560			141,099
Computer equipment and software		755,436			840,494			975,288
Office furnishings and equipment		1,015,368			929,068			951,369
Automobiles		280,776			117,672			333,234
Construction in progress		1,621,862			5,106,654			2,494,777
		26,690,836			53,871,944			55,417,209
Less accumulated depreciation and amortization		(5,809,272	)		(7,054,735	)		(8,579,049	)
	$	20,881,564		$	46,817,209		$	46,838,160

At December 31, 2000, construction in progress related to development and construction of building improvements. At December 31, 2001, construction in progress related to the development of a transmitter site and construction of building improvements. At June 30, 2002, construction in progress related to the development and construction of building improvements.

F-11

LBI MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

4.    Easement Property

As part of the agreement to purchase the assets of KHJ in 1990, the Company acquired an option to purchase certain easement property. The option gave the Company the right to purchase the property during certain option periods for a period of up to 30 years, at a rate varying from 60% to 75% of the appreciation of the property over the original agreed-upon fair market value of the property. The easement option was being amortized on a straight-line basis over the option period. Amortization of the easement option totaled approximately $432,000, $432,000 and $108,000 during 1999, 2000 and 2001, respectively.

On March 20, 2001, the Company exercised its easement option by tendering the option and paying an additional $2,983,000. The unamortized value of the easement and the additional amount paid by the Company is included in property and equipment (land) in the accompanying consolidated financial statements as of December 31, 2001.

5.    Notes Payable to Related Parties

Notes payable to related parties, totaling approximately $3,164,000, $1,862,000 and $1,862,000 at December 31, 2000 and 2001 and June 30, 2002, respectively, bear interest at the applicable federal rate (5.89% and 4.99% at December 31, 2000 and 2001, respectively, and 5.62% at June 30, 2002) and are payable on demand. The notes are subordinate to the New Revolver, New Term Loans, and New Senior Notes.

6.    Long-Term Debt

Long-term debt consists of the following (excluding the debt of the Company’s Parent—see discussion below):

	December 31,						June 30, 2002
	2000			2001
							(Unaudited)
Revolver	$	50,000,000		$	—		$	—
New Revolver		—			4,500,000			—
Term Loans		20,700,000			—			—
New Term Loans		—			165,000,000			162,783,334
New Senior Notes		—			44,437,891			49,150,400
Empire Note		3,096,056			2,968,326			2,900,082
		73,796,056			216,906,217			214,833,816
Less current portion		(9,362,221	)		(10,292,061	)		(11,019,692	)
	$	64,433,835		$	206,614,156		$	203,814,124

On January 6, 1998, the Company entered into a credit agreement providing for a $62.5 million reducing revolver (Revolver) and a $22.5 million term loan (Term Loan). The Revolver and Term Loan were secured by the assets of certain subsidiaries of the Company.

The Revolver originally matured on March 31, 2005, and, commencing in March 1999, the total Revolver commitment reduced in quarterly installments. The Term Loan was payable in equal installments of $225,000 each quarter, commencing March 31, 1999, with all unpaid amounts originally due on September 30, 2005.

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LBI MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Borrowings under the Revolver and Term Loan bore interest at either (i) the bank’s reference rate (as defined) (BRR) or (ii) the LIBOR rate, in each case plus the applicable margin stipulated in the agreement ranging from .25% to 3.625% based on certain leverage ratios, as defined.

As discussed below, the Revolver and Term Loan were paid in full on March 20, 2001.

In July 1999, the Company issued an installment note payable to a bank for $3,250,000 (Empire Note) which bears interest at the rate of 8.13% per annum. The Empire Note is payable in monthly principal and interest payments of $31,530 through August 2014. The borrowings under the Empire Note are secured by substantially all of the Empire assets.

In March 2001, the Company repaid the Revolver and Term Loan in connection with new credit facilities obtained in connection with certain acquisitions as described in Note 2.

On March 20, 2001, the Company entered into a credit agreement providing for a reducing revolver (New Revolver) which would allow the Company to borrow up to $25 million and an aggregate of $165 million in term loans (New Term Loans). The New Revolver matures on December 31, 2007, and is collateralized by substantially all the Company’s assets. Commencing on June 30, 2002, the New Revolver commitment reduces in quarterly installments. The New Term Loans amortize in specified installments, payable each fiscal quarter, commencing June 30, 2002, with all unpaid amounts due on June 30, 2008. Borrowings under the New Revolver and New Term Loans bear interest, based on the election of the Company, at either the base rate (as defined) or the LIBOR rate, in each case plus the applicable margin stipulated in the agreement ranging from .50% to 4.00% based on certain leverage ratios, as defined in the agreement.

On March 20, 2001, LBI Intermediate Holdings, Inc. issued $40 million in senior notes with a maturity date of March 20, 2009 (New Senior Notes). Interest on the New Senior Notes accrues at either the rate of 20% per annum (if paid in cash on or prior to March 20, 2006), or 21% per annum (if not paid in cash on or prior to March 20, 2006), and is payable semiannually in arrears on March 31 and September 30 of each year. At the Company’s option, payment of interest may be made through the issuance of secondary notes. However, one-half of the interest due on each of March 31, 2005, and September 30, 2006, must be paid in cash. Interest payments made after September 30, 2006, shall be made at least one-half in cash, with the remaining one-half payable in cash to the extent the Company has excess cash flow as defined in the agreement.

The New Revolver, New Term Loans, and New Senior Notes contain certain financial and nonfinancial covenants including restrictions on the Company’s ability to pay dividends. At December 31, 2001, the Company was in compliance with all such covenants.

As of December 31, 2001, the Company’s long-term debt had scheduled repayments for each of the next five years as follows:

2002	$	10,292,061
2003		13,054,093
2004		16,191,515
2005		18,081,247
2006		21,846,598

The above table does not include scheduled repayments relating to debt of the Company’s Parent. Pursuant to SEC guidelines, such debt is not reflected in the Company’s financial statements as (a) the Company will not

F-13

LBI MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

assume the debt of the Parent, either presently or in a planned transaction in the future; (b) the proceeds from the offering of $150 million of Senior Subordinated Notes due 2012 (see below) were not used to retire all or a part of the Parent’s debt; and (c) the Company does not guarantee or pledge its assets as collateral for the Parent’s debt. The Company’s Parent has no assets, operations or cash flows other than its investment in the Company. Accordingly, funding from the Company will be required for the Parent to repay its debt. The Parent’s debt, which is subordinate in right of payment to the New Revolver, New Term Loans and New Senior Notes, is described below.

On March 20, 2001, the Parent entered into an agreement whereby, in exchange for $30 million, it issued junior subordinated notes (Parent Subordinated Notes) and warrants to the holders of the Parent Subordinated Notes to initially acquire 14.02 shares (approximately 6.55%) of the Parent’s common stock at an initial exercise price of $.01 per share. In connection with the matters discussed in Note 12 below, the Parent amended the terms of the Parent Subordinated Notes and the related warrants in July 2002. The following information gives effect to such amendment. The Parent Subordinated Notes initially bear interest at 9% per year and will bear interest at 13% per year beginning September 9, 2009. The Parent Subordinated Notes will mature on the earliest of (i) July 9, 2013, (ii) their acceleration following the occurrence and continuance of a material event of default (as defined in the agreement), (iii) a merger, sale or similar transaction involving the Parent or substantially all of the subsidiaries of the Parent, (iv) a sale or other disposition of a majority of the Parent’s issued and outstanding capital stock or other rights giving a third party a right to elect a majority of the Parent’s board of directors, and (v) the date on which the warrants issued in connection with the Parent Subordinated Notes are repurchased pursuant to the call options applicable to such warrants.

The warrants will expire on the earlier of (i) the later of (a) January 9, 2015, and (b) the date which is six months from the payment in full of all outstanding principal and interest on the Parent Subordinated Notes or (ii) the closing of an underwritten public equity offering in which the Parent raises at least $25 million (subject to extension in certain circumstances).

A performance-based adjustment may increase or decrease the number of shares issued upon exercise of the warrants based on the Parent’s future consolidated broadcast cash flow (as defined). Upon the maturity date of the Parent Subordinated Notes, the payment in full of the Parent Subordinated Notes and the repurchase of the warrants, a change in control of the Parent or the exercise of the call or put options described below, the number of shares issuable upon the exercise of the warrants at the time of such event will be decreased by multiplying such number of shares by .9367, if the Parent achieves consolidated broadcast cash flow for the trailing 12 months in excess of 125% of its budgeted forecasts and in the case of the sale of the Parent, its total fair market value is greater than 13 times consolidated broadcast cash flow for the trailing 12 months. The number of shares issuable upon the exercise of the warrants will be increased by multiplying such number of shares by 1.0633, if the Parent achieves consolidated broadcast cash flow less than 75% of its budgeted plan for the trailing 12 months and in the case of the sale of the Parent, its total fair market value is less than 15 times consolidated broadcast cash flow for the trailing 12 months.

The warrants contain a put right and a call right as follows:

Put Right:    The warrant holders have a “put right,” which entitles them at any time on or after the maturity date of the Parent Subordinated Notes to require the Parent to repurchase the warrants, or if the warrants have been exercised, the stock issued pursuant to the warrants, at the fair market value of the stock/warrants (the fair market value is subject to certain adjustments).

Call Right:    If the Parent proposes an acquisition with a valuation of at least $5 million in connection with which any proposed financing source reasonably requires in good faith, as a condition of financing and/or

F-14

LBI MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

permitting the acquisition, an amendment to the maturity date of the notes and a majority of the holders of the Parent Subordinated Notes do not agree to such amendment, the Parent has the right to purchase the warrants (or related stock, if the warrants have been issued) at fair market value, in connection with its payment in full of the aggregate of principal and interest outstanding under the Parent Subordinated Notes.

Based on the relative fair values at the date of issuance, which were determined by an independent valuation, the Parent allocated $13.6 million to the Parent Subordinated Notes and $16.4 million to the warrants. The Parent Subordinated Notes will be accreted through July 9, 2013, up to their $30 million redemption value; such accretion (approximately $2,556,000 for the year ended December 31, 2001 and $1,640,000 for the six months ended June 30, 2002) is recorded as additional interest expense by the Parent. In the financial statements of the Parent, the warrants will be stated at fair value each reporting period, with subsequent changes in fair value being recorded as deferred financing costs and amortized to interest expense over the remaining life of the Parent Subordinated Notes.

As more fully described in Note 12, the Company entered into a new credit agreement and issued $150 million of Senior Subordinated Notes due 2012 and in connection therewith repaid the New Revolver and New Term Loans and redeemed the New Senior Notes.

7.    Commitments and Contingencies

Leases

The Company leases the land and/or tower space for certain stations under noncancelable operating leases that expire at various times through 2054, with some having renewal options, generally for one to five years. Rental expenses under these agreements totaled approximately $302,000, $151,000 and $559,000 during the years ended December 31, 1999, 2000 and 2001, respectively, and approximately $407,000 and $406,000 during the six months ended June 30, 2001 and 2002, respectively.

Future minimum lease payments by year and in the aggregate, under noncancelable operating leases, consist of the following at December 31, 2001:

2002	$	591,049
2003		564,752
2004		414,994
2005		425,219
2006		432,767
Thereafter		2,600,083
	$	5,028,864

Deferred Compensation

The Company’s Parent has entered into employment agreements with certain employees. The services required under the employment agreements are rendered to the Company, and payment of amounts due under the employment agreements is made by the Company. Accordingly, the Company has reflected amounts due under the employment agreements in its financial statements. In addition to annual compensation and other benefits,

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LBI MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

these agreements provide the employees with the ability to participate in the increase of the “net value” (as defined) of the Parent over certain base amounts (Incentive Compensation). There are two components of Incentive Compensation: (i) a component that vests in varying amounts over time; and (ii) a component that vests upon the attainment of certain performance measures. The time vesting component is accounted for over the vesting periods specified in the employment agreements. Performance based amounts are accounted for at the time the performance measures are attained.

The employment agreements contain provisions which allow for limited accelerated vesting in the event of a change in control of the Parent (as defined). Unless there is a change in control of the Parent (as defined), the “net value” (as defined) of the Parent is to be determined on December 31, 2005 or December 31, 2006 (depending upon the particular employment agreement). Any Incentive Compensation amounts due are required to be paid within thirty days after the date the “net value” of the Parent is determined.

At December 31, 2000 and 2001 and June 30, 2002, based upon independent third party appraisals obtained by the Parent, the “net value” of the Parent exceeded the base amounts, and the employees had vested in approximately $1,240,000, $2,638,000 and $5,091,000, respectively, of Incentive Compensation. Such amounts are shown as deferred compensation in the accompanying consolidated balance sheets; the related expense is shown as noncash employee compensation in the accompanying consolidated statements of income. Based on the services provided by such employees, the Incentive Compensation could be categorized as related to the following:

	Year Ended December 31,				Six Months Ended June 30,
	2000		2001		2001		2002
Program and technical	$	94,000	$	216,000	$	139,000	$	471,000
Selling, general and administrative		1,146,000		1,182,000		678,000		1,982,000
	$	1,240,000	$	1,398,000	$	817,000	$	2,453,000

At December 31, 2001, neither the Company nor Parent had funded any portion of the deferred compensation liability.

Litigation

The Company is subject to pending litigation arising in the normal course of its business. While it is not possible to predict the results of such litigation, management does not believe the ultimate outcome of these matters will have a materially adverse effect on the Company’s financial position or results of operations.

8.    Parent Stock Repurchase Agreement

In January 1998, the Parent and its stockholders entered into a stock repurchase agreement whereby in the event any stockholder of the Parent dies or seeks to dispose of their stock, the Parent and remaining stockholders of the Parent will have the right to acquire such stock. The purchase price of the stock shall be the lesser of the offer price or a price agreed upon by the stockholders of the Parent as of January 1998 (subject to adjustment every three years). The payment for such a purchase can be cash or in the form of a nonnegotiable promissory note, which can only be paid off in the event the Parent has satisfied its existing senior debt obligations.

F-16

LBI MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

9.    Related Party Transactions

The Company’s national sales representative is an entity owned by the stockholders of the Parent. The Company was charged approximately $458,000, $1,078,000 and $589,000 from this entity during the years ended December 31, 1999, 2000 and 2001, respectively, and approximately $431,000 and $545,000 during the six months ended June 30, 2001 and 2002, respectively. Such amounts, which the Company believes represent market rates, are included in selling expenses in the accompanying consolidated statements of operations.

The Company had approximately $188,000, $508,000 and $565,000 due from stockholders of its Parent and from affiliated companies at December 31, 2000 and 2001 and June 30, 2002, respectively. Additionally, at the direction of the stockholders of its Parent the Company has made advances to certain organizations and individuals totaling approximately $565,000, $701,000 and $892,000 at December 31, 2000 and 2001 and June 30, 2002, respectively. Such advances are included in amounts due from related parties in the accompanying consolidated balance sheets.

10.    Defined Contribution Plan

In 1999, the Company established a 401(k) defined contribution plan (the Plan), which covers all eligible employees (as defined in the Plan). Participants are allowed to make nonforfeitable contributions up to 15% of their annual salary, including commissions, up to the maximum IRS allowable amount. The Company is allowed to contribute a discretionary amount to the Plan. For the years ended December 31, 1999, 2000 and 2001, the Company made no discretionary contributions to the Plan.

11.    Segment Data

SFAS No. 131, “Disclosures About Segments of an Enterprise and Related Information,” requires companies to provide certain information about their operating segments. The Company has two reportable segments—radio operations and television operations.

Management uses operating income before depreciation, amortization and deferred compensation as its measure of profitability for purposes of assessing performance and allocating resources.

F-17

LBI MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

	Year Ended December 31,									Six Months Ended June 30,
	1999			2000			2001			2001			2002
										(Unaudited)
Net revenues:
Radio operations	$	19,420,288		$	28,636,489		$	31,553,517		$	14,865,049		$	18,425,391
Television operations		16,997,411			21,915,650			28,103,587			12,938,024			15,128,211
Consolidated net revenues	$	36,417,699		$	50,552,139		$	59,657,104		$	27,803,073		$	33,553,602
Operating expenses, excluding depreciation, amortization and deferred compensation:
Radio operations	$	10,779,359		$	13,611,424		$	14,921,503		$	5,892,705		$	7,757,710
Television operations		6,959,988			8,938,366			11,821,920			5,240,204			7,233,362
Consolidated operating expenses, excluding depreciation, amortization and deferred compensation	$	17,739,347		$	22,549,790		$	26,743,423		$	11,132,909		$	14,991,072
Operating income before depreciation, amortization and deferred compensation:
Radio operations	$	8,640,929		$	15,025,065		$	16,632,014		$	8,972,344		$	10,667,681
Television operations		10,037,423			12,977,284			16,281,667			7,697,820			7,894,849
Consolidated operating income before depreciation, amortization and deferred compensation	$	18,678,352		$	28,002,349		$	32,913,681		$	16,670,164		$	18,562,530
Depreciation expense:
Radio operations	$	507,132		$	534,049		$	875,595		$	278,650		$	674,344
Television operations		879,270			1,140,466			1,471,570			595,296			849,970
Consolidated depreciation expense	$	1,386,402		$	1,674,515		$	2,347,165		$	873,946		$	1,524,314
Amortization expense:
Radio operations	$	1,624,549		$	1,430,582		$	2,802,384		$	1,213,469		$	—
Television operations		1,423,942			1,532,217			3,523,641			1,403,555			—
Consolidated amortization expense	$	3,048,491		$	2,962,799		$	6,326,025		$	2,617,024		$	—
Deferred compensation:
Radio operations	$	—		$	1,240,000		$	1,398,000		$	817,000		$	2,453,000
Consolidated deferred compensation	$	—		$	1,240,000		$	1,398,000		$	817,000		$	2,453,000
Operating income:
Radio operations	$	6,509,248		$	11,820,434		$	11,556,035		$	6,663,225		$	7,540,337
Television operations		7,734,211			10,304,601			11,286,456			5,698,969			7,044,879
Consolidated operating income	$	14,243,459		$	22,125,035		$	22,842,491		$	12,362,194		$	14,585,216
Total identifiable assets:
Radio operations	$	5,780,873		$	8,214,042		$	30,483,507		$	33,389,774		$	30,243,176
Television operations		12,269,984			12,667,522			16,333,702			9,194,289			16,594,984
Total consolidated identifiable assets	$	18,050,857		$	20,881,564		$	46,817,209		$	42,584,063		$	46,838,160
Reconciliation of operating income before depreciation, amortization, and deferred compensation to income before income taxes and cumulative effective of accounting change:
Operating income before depreciation, amortization, and deferred compensation	$	18,678,352		$	28,002,349		$	32,913,681		$	16,670,164		$	18,562,530
Depreciation		(1,386,402	)		(1,674,515	)		(2,347,165	)		(873,946	)		(1,524,314	)
Amortization		(3,048,491	)		(2,962,799	)		(6,326,025	)		(2,617,024	)		—
Deferred compensation		—			(1,240,000	)		(1,398,000	)		(817,000	)		(2,453,000	)
Interest expense		(6,631,681	)		(6,837,540	)		(21,446,072	)		(10,258,293	)		(9,668,712	)
Interest and other income		170,728			240,238			473,634			317,350			84,692
Income before income taxes and cumulative effect of accounting change	$	7,782,506		$	15,527,733		$	1,870,053		$	2,421,251		$	5,001,196

F-18

LBI MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

12.     Events (Unaudited) Subsequent to the Date of the Independent Auditor’s Report

On July 9, 2002, the Company issued $150 million of Senior Subordinated Notes due 2012 (Senior Subordinated Notes), entered into a new $160 million senior revolving credit facility (the “2002 Revolver”), repaid the New Revolver and the New Term Loans and loaned approximately $54.3 million to LBI Intermediate Holdings, Inc. pursuant to an intercompany note. The proceeds of the intercompany note were used to repay the New Senior Notes. After such repayment, the Company merged with and into LBI Intermediate Holdings, Inc., at which time the intercompany note was canceled.

The Senior Subordinated Notes bear interest at the rate of 10 1/8% per annum, and interest payments are to be made on a semi-annual basis each January 15 and July 15. All of the Company’s subsidiaries provided full and unconditional, joint and several guarantees of the Senior Subordinated Notes. The indenture governing the Senior Subordinated Notes contains certain restrictive covenants that, among other things, limit the Company’s ability to incur additional indebtedness or to pay dividends.

Amounts available under the 2002 Revolver will begin decreasing quarterly, commencing in June 30, 2005. The 2002 Revolver bears interest at floating rates and matures on September 30, 2009. The Company may increase its borrowing capacity under the 2002 Revolver by an additional $40.0 million ($30.0 million after the increase in the Company borrowing capacity described below), subject to participation by its existing lenders or new lenders acceptable to the administrative agent under the 2002 Revolver and subject to restrictions in the indenture relating to its Senior Subordinated Notes. On August 16, 2002, the Company’s borrowing capacity under the 2002 Revolver was increased by $10 million to $170 million.

The 2002 Revolver contains customary restrictive covenants that, among other things, limit the Company’s ability to incur additional indebtedness and liens in connection therewith, pay dividends and make capital expenditures above certain limits. Under the 2002 Revolver, the Company must also maintain specified financial ratios, such as a maximum total leverage ratio, a maximum senior leverage ratio, a minimum ratio of EBITDA (as defined in the senior credit agreement) to interest expense and a minimum ratio of EBITDA (as defined in the senior credit agreement) to fixed charges.

In connection with the above refinancings, the Company expensed approximately $6,086,000 of previously deferred financing costs relating to the New Revolver, the New Term Loans and the New Senior Notes in July 2002.

Also in connection with the above refinancings, the terms of the Parent Subordinated Notes and the related warrants were amended to, among other things, extend the maturity date of such notes and the expiration date of such warrants.

In addition, the Company loaned $1.9 million to a stockholder of the Parent. The loan matures in 2009 and bears interest at the applicable federal rate.

F-19

PART II: INFORMATION NOT REQUIRED IN THE PROSPECTUS

Item 20. Indemnification of Directors and Officers

Registrants Incorporated Under California Law

All of the Registrants are incorporated under the laws of the State of California.

Section 317 of the General Corporation Law of California provides that a corporation has the power to indemnify any person who was or is a party or is threatened to be made a party to any proceeding, other than in an action by or in the right of the corporation to obtain a favorable judgment for itself, by reason of the fact that such person is or was an agent of the corporation, against expenses actually and reasonably incurred in connection with the proceeding, if the person acted in good faith and in a manner the person reasonably believed to be in the best interests of the corporation and, in the case of criminal proceedings, had no reasonable cause to believe that the conduct was unlawful. In the case of suits by or on behalf of a corporation to obtain a judgment in its favor, a corporation has the power to indemnify any person who was or is a party or is threatened to be made a party to such proceeding by reason of the fact that the person is or was the corporation’s agent, against expenses actually and reasonably incurred, if the person acted in good faith in a manner the person believed to be in the best interests of the corporation and its shareholders, except that no such indemnification may be made for claims as to which the person shall have been adjudged to be liable to the corporation in the performance of that person’s duty to the corporation, unless and then only to the extent a court determines otherwise.

Section 204 of the General Corporation Law of California provides that a corporation may in its articles of incorporation provide for the indemnification by the corporation of directors and officers while acting in their capacities as such but not involving a breach of duty to the corporation and its shareholders. Such a provision in the articles of incorporation is construed to be a provision for indemnification under both Sections 204 and 317 of the General Corporation Law of California.

The articles of incorporation of each Registrant provide that such Registrant shall indemnify its directors and officers to the fullest extent permitted by applicable law.

Item 21. Exhibits and Financial Statement Schedules

The following exhibits are attached hereto:

Exhibit Number	Exhibit Description
3.1	Articles of Incorporation of LBI Media, Inc., including amendments thereto
3.2	Certificate of Ownership of LBI Intermediate Holdings, Inc., dated July 9, 2002
3.3	Bylaws of LBI Media, Inc.
3.4	Articles of Incorporation of Liberman Television of Houston, Inc., including amendments thereto
3.5	Bylaws of Liberman Television of Houston, Inc.
3.6	Articles of Incorporation of KZJL License Corp., including amendments thereto
3.7	Bylaws of KZJL License Corp.
3.8	Articles of Incorporation of Liberman Television, Inc.
3.9	Bylaws of Liberman Television, Inc.
3.10	Articles of Incorporation of KRCA Television, Inc., including amendments thereto

II-1

Exhibit Number	Exhibit Description
3.11	Bylaws of KRCA Television, Inc.
3.12	Articles of Incorporation of KRCA License Corp., including amendments thereto
3.13	Bylaws of KRCA License Corp.
3.14	Articles of Incorporation of Liberman Broadcasting, Inc., including amendments thereto
3.15	Bylaws of Liberman Broadcasting, Inc.
3.16	Articles of Incorporation LBI Radio License Corp., including amendments thereto
3.17	Bylaws of LBI Radio License Corp.
3.18	Articles of Incorporation of Liberman Broadcasting of Houston, Inc., including amendments thereto
3.19	Bylaws of Liberman Broadcasting of Houston, Inc.
3.20	Articles of Incorporation of Liberman Broadcasting of Houston License Corp., including amendments thereto
3.21	Bylaws of Liberman Broadcasting of Houston License Corp.
3.22	Articles of Incorporation of Empire Burbank Studios, Inc., including amendments thereto
3.23	Bylaws of Empire Burbank Studios, Inc.
4.1	Indenture dated as of July 9, 2002, among LBI Media, Inc., the Subsidiary Guarantors listed therein and U.S. Bank, N.A., as Trustee
4.2	Form of Old Note (included as Exhibit A-1 to Exhibit 4.1)
4.3	Form of Exchange Note (included as Exhibit A-1 to Exhibit 4.1)
4.4	Registration Rights Agreement dated July 9, 2002, among LBI Media, Inc., the Subsidiary Guarantors and the Initial Purchasers
4.5	Form of Certificate of Exchange of 10 1/8% Senior Subordinated Notes due 2012 (included as Exhibit C in Exhibit 4.1)
5.1	Opinion of O’Melveny & Myers, LLP regarding the validity of the 10 1/8% Senior Subordinated Notes offered hereby(1)
8.1	Opinion of O’Melveny & Myers, LLP regarding federal income tax considerations(1)
10.1	Credit Agreement dated July 9, 2002, by and among LBI Media, Inc., Fleet National Bank, as administrative agent, General Electric Capital Corporation and SunTrust Bank, as co-syndication agents, and CIT Lending Services Corporation and SunTrust Bank as co-documentation agents and the lenders from time to time party thereto
10.2	FM Asset Purchase Agreement dated as of April 5, 2002, among El Dorado Communications, Inc., El Dorado 108, Inc., KXTJ License, Inc., LBI Media, Inc., Liberman Broadcasting of Houston, Inc. and Liberman Broadcasting of Houston License Corp. relating to the acquisition of KQQK
10.3	AM Asset Purchase Agreement dated as of April 5, 2002, among El Dorado Communications, Inc., El Dorado 108, Inc., KXTJ License, Inc., LBI Media, Inc., Liberman Broadcasting of Houston, Inc. and Liberman Broadcasting of Houston License Corp. relating to the acquisition of KEYH
10.4	Asset Purchase Agreement dated June 21, 2002, among Guajillo Investments, LLC, LBI Media, Inc. Liberman Broadcasting of Houston, Inc., and Liberman Broadcasting of Houston License Corp. relating to the acquisition of KIOX-FM and KXGJ
10.5	Promissory Note dated July 9, 2002 issued by Lenard Liberman in favor of LBI Media, Inc.
10.6	Note Secured by Deed of Trust, dated July 15, 1999, by Empire Burbank Studios, Inc., a California corporation, in favor of City National Bank

II-2

Exhibit Number	Exhibit Description
10.7	Securities Purchase Agreement dated March 20, 2001, by and between LBI Holdings I, Inc. and the purchasers named therein, as amended
10.8	First Amendment to Securities Purchase Agreement, Warrant Agreement, and Subordination and Intercreditor Agreements dated as of July 9, 2002, by and among LBI Holdings I, Inc., the purchasers listed on the signature page thereof, Fleet National Bank, and Oaktree Capital Management, LLC
10.9	Warrant Agreement dated March 20, 2001, by and between LBI Holdings I, Inc. and the purchasers named therein, as amended
10.10	Subordination and Intercreditor Agreement dated March 20, 2001, by and between LBI Holdings I, Inc., the subordinated creditors listed therein and Fleet National Bank, as administrative agent, as amended
10.11	Stock Purchase Agreement, dated January 6, 1998, by and among Jose Liberman, Esther Liberman, Lenard D. Liberman And LBI Holdings I, Inc.
10.12	Promissory Note dated December 20, 2001 issued by Lenard D. Liberman in favor of LBI Media, Inc.
10.13	Promissory Note dated December 20, 2001 by Jose Liberman in favor of LBI Media, Inc.
10.14	Promissory Note dated June 14, 2002 issued by Lenard D. Liberman in favor of LBI Media, Inc.(1)
12.1	Statement regarding Computation of Ratios of Earnings to Fixed Charges.
21.1	Subsidiaries of LBI Media, Inc.
23.1	Consent of O’Melveny & Myers, LLP (included in Exhibits 5.1 and 8.1)(1)
23.2	Consent of Ernst & Young LLP
24.1	Power of Attorney (included on the Signature Page to this Registration Statement).
25.1	Statement of Eligibility and Qualification under the Trust Indenture Act of 1939, as amended, of U.S. Bank, N.A., as trustee
99.1	Form of Letter of Transmittal
99.2	Form of Notice of Guaranteed Delivery

(1) To be filed by amendment

II-3

Item 22. Undertakings

The undersigned registrant hereby undertakes:

(1) That, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities a that time shall be deemed to be the initial bona fide offering thereof;

(2) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant 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 registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue;

(3) To respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 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 subsequent to the effective date of the registration statement through the date of responding to the request; and

(4) 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.

II-4

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Burbank, State of California, on October 4, 2002.

LBI MEDIA, INC.
By:	/s/    LENARD D. LIBERMAN
Name: Title:	Lenard D. Liberman Executive Vice President

LIBERMAN TELEVISION OF HOUSTON, INC., KZJL LICENSE CORP., LIBERMAN TELEVISION, INC., KRCA TELEVISION, INC., KRCA LICENSE CORP., LIBERMAN BROADCASTING, INC., LBI RADIO LICENSE CORP., LIBERMAN BROADCASTING OF HOUSTON, INC., LIBERMAN BROADCASTING OF HOUSTON     LICENSE CORP. AND EMPIRE BURBANK STUDIOS, INC.
By:	/s/    LENARD D. LIBERMAN
Name: Title:	Lenard D. Liberman Executive Vice President of each of the entities listed above

II-5

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Jose Liberman and Lenard D. Liberman, and each of them, his true and lawful attorneys-in-fact and agents, each with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments, to this Registration Statement, and any registration statement relating to the offering covered by this Registration Statement and filed pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents or their substitute or substitutes may lawfully so or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities and on the date indicated.

Signature	Title	Date
/s/    JOSE LIBERMAN         Jose Liberman	President and Director of all Registrants (chief executive officer)	October 4, 2002
/s/    LENARD D. LIBERMAN         Lenard D. Liberman	Executive Vice President and Director of all Registrants (chief financial and accounting officer)	October 4, 2002

II-6

EXHIBIT INDEX

Exhibit Number	Exhibit Description
3.1	Articles of Incorporation of LBI Media, Inc., including amendments thereto
3.2	Certificate of Ownership of LBI Intermediate Holdings, Inc., dated July 9, 2002
3.3	Bylaws of LBI Media, Inc.
3.4	Articles of Incorporation of Liberman Television of Houston, Inc., including amendments thereto
3.5	Bylaws of Liberman Television of Houston, Inc.
3.6	Articles of Incorporation of KZJL License Corp., including amendments thereto
3.7	Bylaws of KZJL License Corp.
3.8	Articles of Incorporation of Liberman Television, Inc.
3.9	Bylaws of Liberman Television, Inc.
3.10	Articles of Incorporation of KRCA Television, Inc., including amendments thereto
3.11	Bylaws of KRCA Television, Inc.
3.12	Articles of Incorporation of KRCA License Corp., including amendments thereto
3.13	Bylaws of KRCA License Corp.
3.14	Articles of Incorporation of Liberman Broadcasting, Inc., including amendments thereto
3.15	Bylaws of Liberman Broadcasting, Inc.
3.16	Articles of Incorporation LBI Radio License Corp., including amendments thereto
3.17	Bylaws of LBI Radio License Corp.
3.18	Articles of Incorporation of Liberman Broadcasting of Houston, Inc., including amendments thereto
3.19	Bylaws of Liberman Broadcasting of Houston, Inc.
3.20	Articles of Incorporation of Liberman Broadcasting of Houston License Corp., including amendments thereto
3.21	Bylaws of Liberman Broadcasting of Houston License Corp.
3.22	Articles of Incorporation of Empire Burbank Studios, Inc., including amendments thereto
3.23	Bylaws of Empire Burbank Studios, Inc.
4.1	Indenture dated as of July 9, 2002, among LBI Media, Inc., the Subsidiary Guarantors listed therein and U.S. Bank, N.A., as Trustee
4.2	Form of Old Note (included as Exhibit A-1 to Exhibit 4.1)
4.3	Form of Exchange Note (included as Exhibit A-1 to Exhibit 4.1)
4.4	Registration Rights Agreement dated July 9, 2002, among LBI Media, Inc., the Subsidiary Guarantors and the Initial Purchasers
4.5	Form of Certificate of Exchange of 10 1/8% Senior Subordinated Notes due 2012 (included as Exhibit C in Exhibit 4.1)
5.1	Opinion of O’Melveny & Myers, LLP regarding the validity of the 10 1/8% Senior Subordinated Notes offered hereby(1)
8.1	Opinion of O’Melveny & Myers, LLP regarding federal income tax considerations(1)
10.1	Credit Agreement dated July 9, 2002, by and among LBI Media, Inc., Fleet National Bank, as administrative agent, General Electric Capital Corporation and SunTrust Bank, as co-syndication agents, and CIT Lending Services Corporation and SunTrust Bank as co-documentation agents and the lenders from time to time party thereto

Exhibit Number	Exhibit Description
10.2	FM Asset Purchase Agreement dated as of April 5, 2002, among El Dorado Communications, Inc., El Dorado 108, Inc., KXTJ License, Inc., LBI Media, Inc., Liberman Broadcasting of Houston, Inc. and Liberman Broadcasting of Houston License Corp. relating to the acquisition of KQQK
10.3	AM Asset Purchase Agreement dated as of April 5, 2002, among El Dorado Communications, Inc., El Dorado 108, Inc., KXTJ License, Inc., LBI Media, Inc., Liberman Broadcasting of Houston, Inc. and Liberman Broadcasting of Houston License Corp. relating to the acquisition of KEYH
10.4	Asset Purchase Agreement dated June 21, 2002, among Guajillo Investments, LLC, LBI Media, Inc. Liberman Broadcasting of Houston, Inc., and Liberman Broadcasting of Houston License Corp. relating to the acquisition of KIOX-FM and KXGJ
10.5	Promissory Note dated July 9, 2002 issued by Lenard Liberman in favor of LBI Media, Inc.
10.6	Note Secured by Deed of Trust, dated July 15, 1999, by Empire Burbank Studios, Inc., a California corporation, in favor of City National Bank
10.7	Securities Purchase Agreement dated March 20, 2001, by and between LBI Holdings I, Inc. and the purchasers named therein, as amended
10.8	First Amendment to Securities Purchase Agreement, Warrant Agreement, and Subordination and Intercreditor Agreements dated as of July 9, 2002, by and among LBI Holdings I, Inc., the purchasers listed on the signature page thereof, Fleet National Bank, and Oaktree Capital Management, LLC
10.9	Warrant Agreement dated March 20, 2001, by and between LBI Holdings I, Inc. and the purchasers named therein, as amended
10.10	Subordination and Intercreditor Agreement dated March 20, 2001, by and between LBI Holdings I, Inc., the subordinated creditors listed therein and Fleet National Bank, as administrative agent, as amended
10.11	Stock Purchase Agreement, dated January 6, 1998, by and among Jose Liberman, Esther Liberman, Lenard D. Liberman And LBI Holdings I, Inc.
10.12	Promissory Note dated December 20, 2001 issued by Lenard D. Liberman in favor of LBI Media, Inc.
10.13	Promissory Note dated December 20, 2001 issued by Jose Liberman in favor of LBI Media, Inc.
10.14	Promissory Note dated June 14, 2002 issued by Lenard D. Liberman in favor of LBI Media, Inc.(1)
12.1	Statement regarding Computation of Ratios of Earnings to Fixed Charges
21.1	Subsidiaries of LBI Media, Inc.
23.1	Consent of O’Melveny & Myers, LLP (included in Exhibits 5.1 and 8.1)(1)
23.2	Consent of Ernst & Young LLP
24.1	Power of Attorney (included on the Signature Page to this Registration Statement).
25.1	Statement of Eligibility and Qualification under the Trust Indenture Act of 1939, as amended, of U.S. Bank, N.A., as trustee
99.1	Form of Letter of Transmittal
99.2	Form of Notice of Guaranteed Delivery

(1) To be filed by amendment

EX-3.1

                                                                     Exhibit 3.1

                            ARTICLES OF INCORPORATION

                                       OF

                              LBI HOLDINGS II, INC.

                                      Name

                      One: The name of the corporation is:

                              LBI Holdings II, Inc.

                                     Purpose

     Two: The purpose of the corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of California other than the banking business, the trust company business or
the practice of a profession permitted to be incorporated by the California
Corporations Code.

                                Agent for Service

     Three: The name and address of the corporation's initial agent for service
of process are:

                               Lenard D. Liberman

                            5724 Hollywood Boulevard

                           Hollywood, California 90028

                                Authorized Shares

     Four: The total number of shares of all classes of stock which the
corporation shall have the authority to issue is one thousand (1,000) shares of
Common Stock, par value $.01 per share.

                      Limitation on Liability of Directors
                        and Authority to Indemnify Agents

     Five: The liability of directors of the corporation for monetary damages
shall be eliminated to the fullest extent permissible under California law.

     The corporation is authorized to provide indemnification of agents (as
defined in Section 317 of the California Corporations Code) for breach of duty
to the corporation and its shareholders through bylaw provisions, agreements
with agents, vote of shareholders or disinterested directors, or otherwise, in
excess of the indemnification otherwise permitted by Section 317 of the
California Corporations Code, subject only to the applicable limits set forth in
Section 204 of the California Corporations Code.



     The undersigned declares that the undersigned has executed these Articles
of Incorporation and that this instrument is the act and deed of the
undersigned.

DATED:  November 13, 1997         /s/ Regina Braman
                                ----------------------------
                                  Regina Braman

                                       2



                            CERTIFICATE OF AMENDMENT
                                       OF
                            ARTICLES OF INCORPORATION
                                       OF
                             LBI HOLDINGS II, INC.,
                            a California corporation

          Jose Liberman and Lenard D. Liberman certify that:

          1. They are the duly elected and acting President and Secretary,
respectively, of LBI Holdings II, Inc., a California corporation (this
"Corporation").

          2. Article 1 of the Articles of Incorporation of this Corporation
shall be amended in its entirety to read as follows:

             "1.       The name of this corporation is LBI Media, Inc."

          3. The foregoing amendment has been approved by the Board of Directors
of this Corporation.

          4. The foregoing amendment was approved by the required vote of the
shareholders of this Corporation in accordance with Section 902 of the
California General Corporation Law. The total number of outstanding shares of
this Corporation is 100. The number of shares voting in favor of the amendment
equaled 100% of the outstanding shares.

          We further declare under penalty of perjury under the laws of the
State of California that the matters set out in this Certificate of Amendment
are true and correct of our own knowledge.

          IN WITNESS WHEREOF, the undersigned have executed this Certificate on
July 2, 2002.

                                      /s/ Jose Liberman
                                      -----------------------------
                                      Jose Liberman, President

                                      /s/ Lenard D. Liberman
                                      -----------------------------
                                      Lenard D. Liberman, Secretary

EX-3.2

                                                                     Exhibit 3.2

                            CERTIFICATE OF OWNERSHIP
                                       OF
                         LBI INTERMEDIATE HOLDINGS, INC.

               Jose Liberman and Lenard D. Liberman certify that:

                  1. They are the duly elected and acting President and
         Secretary, respectively, of LBI Intermediate Holdings, Inc., a
         California corporation (this "Corporation").

                  2. This Corporation owns 100% of the outstanding shares of LBI
         Media, Inc., a California corporation (the "Subsidiary").

                  3. The Board of Directors of this Corporation has duly adopted
         the following resolutions:

                     "RESOLVED, that this Corporation be merged with and into
               the Subsidiary with the Subsidiary as the surviving corporation,
               effective upon the filing of a Certificate of Ownership with the
               California Secretary of State, and that the Subsidiary shall
               assume all of this Corporation's liabilities pursuant to Section
               1110 of the California Corporations Code (the "Merger").

                     RESOLVED FURTHER, that upon the effectiveness of the
               Merger, all shares of the Subsidiary outstanding immediately
               prior to the merger shall thereupon be canceled.

                     RESOLVED FURTHER, that upon the effectiveness of the
               Merger, each outstanding share of common stock of this
               Corporation shall be converted into one share of common stock of
               the Subsidiary.

                     RESOLVED FURTHER, that the officers of this Corporation be,
               and each of them hereby is, authorized, in the name and on behalf
               of this Corporation, to prepare or cause to be prepared and to
               execute, verify and file or cause to be filed with the Secretary
               of State of the State of California a Certificate of Ownership
               effecting the Merger.

                     RESOLVED FURTHER, that the officers of this Corporation be,
               and each of them hereby is, authorized and empowered to take any
               and all such further actions, to execute and deliver all such
               further instruments, documents, certificates and undertakings in
               the name and on behalf of this Corporation, and to pay fees,
               expenses and costs as are necessary, advisable or appropriate in
               order to carry out the intent and accomplish the purpose of the
               foregoing resolutions."



                  4. The Board of Directors of the Subsidiary has duly adopted
         the following recital and resolution:

                     "WHEREAS, it is proposed that LBI Intermediate Holdings,
               Inc. (the "Parent") be merged with and into this Corporation and
               this Board of Directors has reviewed the resolutions of the Board
               of Directors of Parent electing to effect the Merger.

                     RESOLVED, that the Board of Directors of this Corporation
               hereby approves the Merger of the Parent with and into this
               Corporation."

                  5. The principal terms of the resolutions of the Board of
         Directors of this Corporation electing to effect the Merger are not
         required to be approved by the outstanding shares of any class of stock
         of this Corporation.

                  6. This Certificate of Ownership shall become effective upon
         filing with the California Secretary of State.

               The undersigned each further declares under penalty of perjury
that the matters set out in this Certificate of Ownership are true and correct
of their own knowledge.

                       [Signatures on the Following Page]

                                       2



     IN WITNESS WHEREOF, the undersigned have executed this Certificate of
Ownership on July 9, 2002.


                                       /s/ Jose Liberman
                                    -----------------------------
                                    Jose Liberman, President


                                       /s/ Lenard D. Liberman
                                    -----------------------------
                                    Lenard D. Liberman, Secretary

                                       3

EX-3.3

                                                                     Exhibit 3.3

                                     BYLAWS

                                       of

                             LBI HOLDINGS II, INC.,
                            a California corporation



                                      INDEX
                                      -----


                                                                            Page
                                                                            ----
                                                                         
ARTICLE I. Offices ........................................................    1
           -------
     Section 1.  PRINCIPAL EXECUTIVE OFFICE ...............................    1
     Section 2.  OTHER OFFICES ............................................    1
ARTICLE II. Shareholders ..................................................    1
            ------------
     Section 1.  PLACE OF MEETINGS ........................................    1
     Section 2.  ANNUAL MEETINGS ..........................................    1
     Section 3.  SPECIAL MEETINGS .........................................    1
     Section 4.  NOTICE OF ANNUAL OR SPECIAL MEETINGS .....................    2
     Section 5.  QUORUM ...................................................    2
     Section 6.  ADJOURNED MEETINGS AND NOTICE THEREOF ....................    2
     Section 7.  VOTING ...................................................    3
     Section 8.  RECORD DATE ..............................................    4
     Section 9.  CONSENT OF ABSENTEES .....................................    5
     Section 10. ACTION WITHOUT MEETING ...................................    5
     Section 11. PROXIES ..................................................    6
     Section 12. INSPECTORS OF ELECTION ...................................    6
     Section 13. CONDUCT OF MEETING .......................................    6
ARTICLE III. Directors ....................................................    6
             ---------
     Section 1.  POWERS ...................................................    7
     Section 2.  NUMBER OF DIRECTORS ......................................    7
     Section 3.  ELECTION AND TERM OF OFFICE ..............................    7
     Section 4.  VACANCIES ................................................    7
     Section 5.  PLACE OF MEETING .........................................    8
     Section 6.  REGULAR MEETINGS .........................................    8
     Section 7.  SPECIAL MEETINGS .........................................    8
     Section 8.  QUORUM ...................................................    9
     Section 9.  PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE ........    9
     Section 10. WAIVER OF NOTICE .........................................    9
     Section 11. ADJOURNMENT ..............................................    9
     Section 12. FEES AND COMPENSATION ....................................    9
     Section 13. ACTION WITHOUT MEETING ...................................   10
     Section 14. RIGHTS OF INSPECTION .....................................   10
     Section 15. COMMITTEES ...............................................   10
ARTICLE IV. Officers ......................................................   11
            --------
     Section 1.  OFFICERS .................................................   11
     Section 2.  ELECTION .................................................   11
     Section 3.  SUBORDINATE OFFICERS .....................................   11
     Section 4.  REMOVAL AND RESIGNATION ..................................   11
     Section 5.  VACANCIES ................................................   11
     Section 6.  CHAIRMAN OF THE BOARD ....................................   11
     Section 7.  PRESIDENT ................................................   11
     Section 8.  VICE PRESIDENTS ..........................................   12


                                        i



                                                                           
     Section 9.  SECRETARY ................................................   12
     Section 10. CHIEF FINANCIAL OFFICER ..................................   12
ARTICLE V. Other Provisions ...............................................   13
           ----------------
     Section 1.  INSPECTION OF CORPORATE RECORDS ..........................   13
     Section 2.  INSPECTION OF BYLAWS .....................................   13
     Section 3.  ENDORSEMENT OF DOCUMENTS; CONTRACTS ......................   14
     Section 4.  CERTIFICATES OF STOCK ....................................   14
     Section 5.  REPRESENTATION OF SHARES OF OTHER CORPORATIONS ...........   14
     Section 6.  STOCK PURCHASE PLANS .....................................   15
     Section 7.  CONSTRUCTION AND DEFINITIONS .............................   15
     Section 8.  AMENDMENTS ...............................................   15
     Section 9.  ANNUAL REPORT TO SHAREHOLDERS ............................   15
ARTICLE VI. Indemnification ...............................................   15
            ---------------
     Section 1.  INDEMNIFICATION OF DIRECTORS AND OFFICERS ................   16
     Section 2.  INDEMNIFICATION OF AGENTS ................................   17
     Section 3.  RIGHT OF DIRECTORS AND OFFICERS TO BRING SUIT ............   17
     Section 4.  SUCCESSFUL DEFENSE .......................................   17
     Section 5.  NON-EXCLUSIVITY OF RIGHTS ................................   18
     Section 6.  INSURANCE ................................................   18
     Section 7.  EXPENSES AS A WITNESS ....................................   18
     Section 8.  INDEMNITY AGREEMENTS .....................................   18



                                       ii



                                     BYLAWS

                           for the regulation, except
                       as otherwise provided by statute or
                         its Articles of Incorporation,

                                       of

                             LBI HOLDINGS II, INC.,
                            a California corporation


                               ARTICLE I. Offices.

     Section 1. PRINCIPAL EXECUTIVE OFFICE. The corporation's principal
executive office shall be fixed and located at such place as the Board of
Directors (herein called the "Board") shall determine. The Board is granted full
power and authority to change said principal executive office from one location
to another.

     Section 2. OTHER OFFICES. Branch or subordinate offices may be established
at any time by the Board at any place or places.

                            ARTICLE II. Shareholders.

     Section 1. PLACE OF MEETINGS. Meetings of shareholders shall be held either
at the principal executive office of the corporation or at any other place
within or without the State of California which may be designated either by the
Board or by the written consent of all persons entitled to vote thereat, given
either before or after the meeting and filed with the Secretary.

     Section 2. ANNUAL MEETINGS. The annual meetings of shareholders shall be
held on such date and at such time as may be fixed by the Board.

     Section 3. SPECIAL MEETINGS. Special meetings of the shareholders may be
called at any time by the Board, the Chairman of the Board, the President, or by
the holders of shares entitled to cast not less than ten percent of the votes at
such meeting. Upon request in writing to the Chairman of the Board, the
President, any Vice President or the Secretary by any person (other than the
Board) entitled to call a special meeting of shareholders, the officer forthwith
shall cause notice to be given to the shareholders entitled to vote that a
meeting will be held at a time requested by the person or persons calling the
meeting, not less than thirty-five nor more than sixty days after the receipt of
the request. If the notice is not given within twenty days after receipt of the
request, the persons entitled to call the meeting may give the notice.

     Section 4. NOTICE OF ANNUAL OR SPECIAL MEETINGS. Written notice of each
annual or special meeting of shareholders shall be given not less than ten nor
more than sixty days before the date of the meeting to each shareholder entitled
to vote thereat. Such notice shall state the place, date and hour of the meeting
and (i) in the case of a special meeting,



the general nature of the business to be transacted, and no other business may
be transacted, or (ii) in the case of the annual meeting, those matters which
the Board, at the time of the mailing of the notice, intends to present for
action by the shareholders, but, subject to the provisions of applicable law,
any proper matter may be presented at the meeting for such action. The notice of
any meeting at which directors are to be elected shall include the names of
nominees intended at the time of the notice to be presented by management for
election.

     Notice of a shareholders' meeting shall be given either personally or by
mail or by other means of written communication, addressed to the shareholder at
the address of such shareholder appearing on the books of the corporation or
given by the shareholder to the corporation for the purpose of notice, or, if no
such address appears or is given, at the place where the principal executive
office of the corporation is located or by publication at least once in a
newspaper of general circulation in the county in which the principal executive
office is located. Notice by mail shall be deemed to have been given at the time
a written notice is deposited in the United States mails, postage prepaid. Any
other written notice shall be deemed to have been given at the time it is
personally delivered to the recipient or is delivered to a common carrier for
transmission, or actually transmitted by the person giving the notice by
electronic means, to the recipient.

     Section 5. QUORUM. A majority of the shares entitled to vote, represented
in person or by proxy, shall constitute a quorum at any meeting of shareholders.
If a quorum is present, the affirmative vote of a majority of the shares
represented and voting at the meeting (which shares voting affirmatively also
constitute at least a majority of the required quorum) shall be the act of the
shareholders, unless the vote of a greater number or voting by classes is
required by law or by the Articles, except as provided in the following
sentence. The shareholders present at a duly called or held meeting at which a
quorum is present may continue to do business until adjournment, notwithstanding
the withdrawal of enough shareholders to leave less than a quorum, if any action
taken (other than adjournment) is approved by at least a majority of the shares
required to constitute a quorum.

     Section 6. ADJOURNED MEETINGS AND NOTICE THEREOF. Any Shareholders'
meeting, whether or not a quorum is present, may be adjourned from time to time
by the vote of a majority of the shares represented either in person or by
proxy, but in the absence of a quorum (except as provided in Section 5 of this
Article) no other business may be transacted at such meeting.

     It shall not be necessary to give any notice of the time and place of the
adjourned meeting or of the business to be transacted thereat, other than by
announcement at the meeting at which such adjournment is taken; provided,
however, when any shareholders' meeting is adjourned for more than 45 days or,
if after adjournment a new record date is fixed for the adjourned meeting,
notice of the adjourned meeting shall be given as in the case of an original
meeting.

     Section 7. VOTING. The shareholders entitled to notice of any meeting or to
vote at any such meeting shall be only persons in whose name shares stand on the
stock records of the corporation on the record date determined in accordance
with Section 8 of this Article.

                                       2



     Subject to the following sentence and to the provisions of Section 708 of
the California General Corporation Law, every shareholder entitled to vote at
any election of directors may cumulate such shareholder's votes and give one
candidate a number of votes equal to the number of directors to be elected
multiplied by the number of votes to which the shareholder's shares are
entitled, or distribute the shareholder's votes on the same principle among as
many candidates as the shareholder thinks fit. No shareholder shall be entitled
to cumulate votes for any candidate or candidates pursuant to the preceding
sentence unless such candidate or candidates' names have been placed in
nomination prior to the voting and the shareholder has given notice at the
meeting prior to the voting of the shareholder's intention to cumulate the
shareholder's votes. If any one shareholder has given such notice, all
shareholders may cumulate their votes for candidates in nomination.

     Elections need not be by ballot, provided, however, that all elections for
directors must be by ballot upon demand made by a shareholder at the meeting and
before the voting begins.

     In any election of directors, the candidates receiving the highest number
of votes of the shares entitled to be voted for them up to the number of
directors to be elected by such shares are elected.

     Voting shall in all cases be subject to the provisions of Chapter 7 of the
California General Corporation Law, and to the following provisions:

     (a) Subject to clause (g), shares held by an administrator, executor,
guardian, conservator or custodian may be voted by such holder either in person
or by proxy, without a transfer of such shares into the holder's name; and
shares standing in the name of a trustee may be voted by the trustee, either in
person or by proxy, but no trustee shall be entitled to vote shares held by such
trustee without a transfer of such shares into the trustee's name.

     (b) Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into the receiver's name if authority
to do so is contained in the order of the court by which such receiver was
appointed.

     (c) Subject to the provisions of Section 705 of the California General
Corporation Law and except where otherwise agreed in writing between the
parties, a shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.

     (d) Shares standing in the name of a minor may be voted and the corporation
may treat all rights incident thereto as exercisable by the minor, in person or
by proxy, whether or not the corporation has notice, actual or constructive, of
the nonage, unless a guardian of the minor's property has been appointed and
written notice of such appointment given to the corporation.

     (e) Shares standing in the name of another corporation, domestic or
foreign, may be voted by such officer, agent or proxyholder as the bylaws of
such other corporation may

                                       3



prescribe or, in the absence of such provision, as the Board of Directors of
such other corporation may determine or, in the absence of such determination,
by the chairman of the board, president or any vice president of such other
corporation, or by any other person authorized to do so by the chairman of the
board, president or any vice president of such other corporation. Shares which
are purported to be voted or any proxy purported to be executed in the name of a
corporation (whether or not any title of the person signing is indicated) shall
be presumed to be voted or the proxy executed in accordance with the provisions
of this clause, unless the contrary is shown.

     (f)   Shares of the corporation owned by any subsidiary shall not be
entitled to vote on any matter.

     (g)   Shares held by the corporation in a fiduciary capacity, and shares of
the issuing corporation held in a fiduciary capacity by any subsidiary, shall
not be entitled to vote on any matter, except to the extent that the settlor or
beneficial owner possesses and exercises a right to vote or to give the
corporation binding instructions as to how to vote such shares.

     (h)   If shares stand of record in the names of two or more persons,
whether fiduciaries, members of a partnership, joint tenants, tenants in common,
husband and wife as community property, tenants by the entirety, voting
trustees, persons entitled to vote under a shareholder voting agreement or
otherwise, or if two or more persons (including proxyholders) have the same
fiduciary relationship respecting the same shares, unless the secretary of the
corporation is given written notice to the contrary and is furnished with a copy
of the instrument or order appointing them or creating the relationship wherein
it is so provided, their acts with respect to voting shall have the following
effect:

     (i)   If only one votes, such act binds all;

     (ii)  If more than one vote, the act of the majority so voting binds all;

     (iii) If more than one vote, but the vote is evenly split on any
           particular matter, each faction may vote the securities in question
           proportionately.

If the instrument so filed or the registration of the shares shows that any such
tenancy is held in unequal interests, a majority or even split for the purpose
of this section shall be a majority or even split in interest.

     Section 8. RECORD DATE. The Board may fix, in advance, a record date for
the determination of the shareholders entitled to notice of any meeting or to
vote or entitled to receive payment of any dividend or other distribution, or
any allotment of rights, or to exercise rights in respect of any other lawful
action. The record date so fixed shall be not more than 60 days nor less than 10
days prior to the date of the meeting nor more than 60 days prior to any other
action. When a record date is so fixed, only shareholders of record on that date
are entitled to notice of and to vote at the meeting or to receive the dividend,
distribution, or allotment of rights, or to exercise the rights, as the case may
be, notwithstanding any transfer of shares on the books of the corporation after
the record date. A determination of shareholders of record entitled to notice of
or to vote at a meeting of shareholders shall apply to any adjournment of the
meeting

                                        4



unless the Board fixes a new record date for the adjourned meeting. The Board
shall fix a new record date if the meeting is adjourned for more than forty-five
days.

     If no record date is fixed by the Board, the record date for determining
shareholders entitled to notice of or to vote at a meeting of shareholders shall
be at the close of business on the business day next preceding the day on which
notice is given or, if notice is waived, at the close of business on the
business day next preceding the day on which the meeting is held. The record
date for determining shareholders for any purpose other than set forth in this
Section 8 or Section 10 of this Article shall be at the close of business on the
day on which the Board adopts the resolution relating thereto, or the sixtieth
day prior to the date of such other action, whichever is later.

     Section 9. CONSENT OF ABSENTEES. The transactions of any meeting of
shareholders, however called and noticed, and wherever held, are as valid as
though had at a meeting duly held after regular call and notice, if a quorum is
present either in person or by proxy, and if, either before or after the
meeting, each of the persons entitled to vote, not present in person or by
proxy, signs a written waiver of notice, or a consent to the holding of the
meeting or an approval of the minutes thereof. All such waivers, consents or
approvals shall be filed with the corporate records or made a part of the
minutes of the meeting. Attendance of a person at a meeting shall constitute a
waiver of notice of and presence at such meeting, except when the person
objects, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened and except that
attendance at a meeting is not a waiver of any right to object to the
consideration of matters required by the California General Corporation Law to
be included in the notice but not so included, if such objection is expressly
made at the meeting. Neither the business to be transacted at nor the purpose of
any regular or special meeting of shareholders need be specified in any written
waiver of notice, consent to the holding of the meeting or approval of the
minutes thereof, except as provided in Section 601(f) of the California General
Corporation Law.

     Section 10. ACTION WITHOUT MEETING. Subject to Section 603 of the
California General Corporation Law, any action which, under any provision of the
California General Corporation Law, may be taken at any annual or special
meeting of shareholders, may be taken without a meeting and without prior notice
if a consent in writing, setting forth the action so taken, shall be signed by
the holders of outstanding shares having not less than the minimum number of
votes that would be necessary to authorize or take such action at a meeting at
which all shares entitled to vote thereon were present and voted. Unless a
record date for voting purposes be fixed as provided in Section 8 of this
Article, the record date for determining shareholders entitled to give consent
pursuant to this Section 10, when no prior action by the Board has been taken,
shall be the day on which the first written consent is given.

     Section 11. PROXIES. Every person entitled to vote shares has the right to
do so either in person or by one or more persons authorized by a written proxy
executed by such shareholder and filed with the Secretary. Any proxy duly
executed is not revoked and continues in full force and effect until revoked by
the person executing it prior to the vote pursuant thereto. Such revocation may
be effected either, (i) by a writing delivered to the Secretary of the
Corporation stating that the proxy is revoked, (ii) by a subsequent proxy
executed by the person executing the prior proxy and presented to the meeting,
or (iii) by attendance at the meeting and

                                       5



voting in person by the person executing the proxy; provided, however, that no
proxy shall be valid after the expiration of eleven months from the date of its
execution unless otherwise provided in the proxy.

     Section 12. INSPECTORS OF ELECTION. In advance of any meeting of
shareholders, the Board may appoint inspectors of election to act at such
meeting and any adjournment thereof. If inspectors of election be not so
appointed, or if any persons so appointed fail to appear or refuse to act, the
chairman of any such meeting may, and on the request of any shareholder or
shareholder's proxy shall, make such appointment at the meeting. The number of
inspectors shall be either one or three. If appointed at a meeting on the
request of one or more shareholders or proxies, the majority of shares present
shall determine whether one or three inspectors are to be appointed.

     The duties of such inspectors shall be as prescribed by Section 707(b) of
the California General Corporation Law and shall include: determining the number
of shares outstanding and the voting power of each; determining the shares
represented at the meeting; determining the existence of a quorum; determining
the authenticity, validity and effect of proxies; receiving votes, ballots or
consents; hearing and determining all challenges and questions in any way
arising in connection with the right to vote; counting and tabulating all votes
or consents; determining when the polls shall close; determining the result; and
doing such acts as may be proper to conduct the election or vote with fairness
to all shareholders. If there are three inspectors of election, the decision,
act or certificate of a majority is effective in all respects as the decision,
act or certificate of all.

     Section 13. CONDUCT OF MEETING. The President shall preside as chairman at
all meetings of the shareholders. The chairman shall conduct each such meeting
in a businesslike and fair manner, but shall not be obligated to follow any
technical, formal or parliamentary rules or principles of procedure. The
chairman's rulings on procedural matters shall be conclusive and binding on all
shareholders, unless at the time of a ruling a request for a vote is made to the
shareholders holding shares entitled to vote and which are represented in person
or by proxy at the meeting, in which case the decision of a majority of such
shares shall be conclusive and binding on all shareholders. Without limiting the
generality of the foregoing, the chairman shall have all of the powers usually
vested in the chairman of a meeting of shareholders.

                             ARTICLE III. Directors.

     Section 1. POWERS. Subject to limitations of the Articles, of these Bylaws
and of the California General Corporation Law relating to action required to be
approved by the shareholders or by the outstanding shares, the business and
affairs of the corporation shall be managed and all corporate powers shall be
exercised by or under the direction of the Board. The Board may delegate the
management of the day-to-day operation of the business of the corporation to a
management company or other person provided that the business and affairs of the
corporation shall be managed and all corporate powers shall be exercised under
the ultimate direction of the Board. Without prejudice to such general powers,
but subject to the same limitations, it is hereby expressly declared that the
Board shall have the following powers in addition to the other powers enumerated
in these Bylaws:

                                       6



     (a) To select and remove all the other officers, agents and employees of
the corporation, prescribe the powers and duties for them as may not be
inconsistent with law, the Articles or these Bylaws, fix their compensation and
require from them security for faithful service.

     (b) To conduct, manage and control the affairs and business of the
corporation and to make such rules and regulations therefor not inconsistent
with law, the Articles or these Bylaws, as they may deem best.

     (c) To adopt, make and use a corporate seal, and to prescribe the forms of
certificates of stock, and to alter the form of such seal and of such
certificates from time to time as they may deem best.

     (d) To authorize the issuance of shares of stock of the corporation from
time to time, upon such terms and for such consideration as may be lawful.

     (e) To borrow money and incur indebtedness for the purposes of the
corporation, and to cause to be executed and delivered therefor, in the
corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages,
pledges, hypothecations or other evidences of debt and securities therefor.

     Section 2. NUMBER OF DIRECTORS. The authorized number of directors shall be
two until changed by amendment of the Articles or by a Bylaw duly adopted by the
shareholders amending this Section 2.

     Section 3. ELECTION AND TERM OF OFFICE. The directors shall be elected at
each annual meeting of the shareholders, but if any such annual meeting is not
held or the directors are not elected thereat, the directors may be elected at
any special meeting of shareholders held for that purpose. Each director shall
hold office until the next annual meeting and until a successor has been elected
and qualified.

     Section 4. VACANCIES. Any director may resign effective upon giving written
notice to the Chairman of the Board, the President, the Secretary or the Board,
unless the notice specifies a later time for the effectiveness of such
resignation. If the resignation is effective at a future time, a successor may
be elected to take office when the resignation becomes effective.

     Vacancies in the Board, except those existing as a result of a removal of a
director, may be filled by a majority of the remaining directors, though less
than a quorum, or by a sole remaining director, and each director so elected
shall hold office until the next annual meeting and until such director's
successor has been elected and qualified.

     A vacancy or vacancies in the Board shall be deemed to exist in case of the
death, resignation or removal of any director, or if the authorized number of
directors be increased, or if the shareholders fail, at any annual or special
meeting of shareholders at which any director or directors are elected, to elect
the full authorized number of directors to be voted for at that meeting.

                                       7



     The Board may declare vacant the office of a director who has been declared
of unsound mind by an order of court or convicted of a felony.

     The shareholders may elect a director or directors at any time to fill any
vacancy or vacancies not filled by the directors. Any such election by written
consent other than to fill a vacancy created by removal requires the consent of
a majority of the outstanding shares entitled to vote. Any such election by
written consent to fill a vacancy created by removal requires unanimous consent.

     No reduction of the authorized number of directors shall have the effect of
removing any director prior to the expiration of the director's term of office.

     Section 5. PLACE OF MEETING. Regular or special meetings of the Board shall
be held at any place within or without the State of California which has been
designated from time to time by the Board. In the absence of such designation,
regular meetings shall be held at the principal executive office of the
corporation.

     Section 6. REGULAR MEETINGS. Immediately following each annual meeting of
shareholders the Board shall hold a regular meeting for the purpose of
organization, election of officers and the transaction of other business.

     Other regular meetings of the Board shall be held without call on such
dates and at such times as may be fixed by the Board. Call and notice of all
regular meetings of the Board are hereby dispensed with.

     Section 7. SPECIAL MEETINGS. Special meetings of the Board for any purpose
or purposes may be called at any time by the Chairman of the Board, the
President, any Vice President, the Secretary or by any two directors.

     Special meetings of the Board shall be held upon four days' written notice
or forty-eight hours' notice given personally or by telephone, telegraph, telex
or other similar means of communication. Any such notice shall be addressed or
delivered to each director at such director's address as it is shown upon the
records of the corporation or as may have been given to the corporation by the
director for purposes of notice or, if such address is not shown on such records
or is not readily ascertainable, at the place in which the meetings of the
directors are regularly held.

     Notice by mail shall be deemed to have been given at the time a written
notice is deposited in the United States mails, postage prepaid. Any other
written notice shall be deemed to have been given at the time it is personally
delivered to the recipient or is delivered to a common carrier for transmission,
or actually transmitted by the person giving the notice by electronic means, to
the recipient. Oral notice shall be deemed to have been given at the time it is
communicated, in person or by telephone or wireless, to the recipient or to a
person at the office of the recipient who the person giving the notice has
reason to believe will promptly communicate it to the recipient.

     Section 8. QUORUM. A majority of the authorized number of directors
constitutes a quorum of the board for the transaction of business, except to
adjourn as provided

                                       8



in Section 11 of this Article. Every act or decision done or made by a majority
of the directors present at a meeting duly held at which a quorum is present
shall be regarded as the act of the Board, unless a greater number be required
by law or by the Articles. A meeting at which a quorum is initially present may
continue to transact business notwithstanding the withdrawal of directors, if
any action taken is approved by at least a majority of the required quorum for
such meeting.

     Section 9. PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE. Members of
the Board may participate in a meeting through use of conference telephone or
similar communications equipment, so long as all members participating in such
meeting can hear one another.

     Section 10. WAIVER OF NOTICE. Notice of a meeting need not be given to any
director who signs a waiver of notice or a consent to holding the meeting or an
approval of the minutes thereof, whether before or after the meeting, or who
attends the meeting without protesting, prior thereto or at its commencement,
the lack of notice to such director. All such waivers, consents and approvals
shall be filed with the corporate records or made a part of the minutes of the
meeting.

     Section 11. ADJOURNMENT. A majority of the directors present, whether or
not a quorum is present, may adjourn any directors' meeting to another time and
place. Notice of the time and place of holding an adjourned meeting need not be
given to absent directors if the time and place be fixed at the meeting
adjourned, except as provided in the next sentence. If the meeting is adjourned
for more than 24 hours, notice of any adjournment to another time or place shall
be given prior to the time of the adjourned meeting to the directors who were
not present at the time of the adjournment.

     Section 12. FEES AND COMPENSATION. Directors and members of committees may
receive such compensation, if any, for their services, and such reimbursement
for expenses, as may be fixed or determined by the Board.

     Section 13. ACTION WITHOUT MEETING. Any action required or permitted to be
taken by the Board may be taken without a meeting if all members of the Board
shall individually or collectively consent in writing to such action. Such
consent or consents shall have the same effect as a unanimous vote of the Board
and shall be filed with the minutes of the proceedings of the Board.

     Section 14. RIGHTS OF INSPECTION. Every director shall have the absolute
right at any reasonable time to inspect and copy all books, records and
documents of every kind and to inspect the physical properties of the
corporation and also of its subsidiary corporations, domestic or foreign. Such
inspection by a director may be made in person or by agent or attorney and
includes the right to copy and obtain extracts.

     Section 15. COMMITTEES. The Board may appoint one or more committees, each
consisting of two or more directors, and delegate to such committees any of the
authority of the Board except with respect to:

                                       9



         (a) The approval of any action for which the General Corporation Law
         also requires shareholders' approval or approval of the outstanding
         shares;

         (b) The filling of vacancies in the Board or on any committee;

         (c) The fixing of compensation of the directors for serving on the
         Board or on any committee;

         (d) The amendment or repeal of bylaws or the adoption of new bylaws;

         (e) The amendment or repeal of any resolution of the Board which by its
         express term is not so amendable or repealable;

         (f) A distribution to the shareholders of the corporation except at a
         rate or in a periodic amount or within a price range determined by the
         Board; or

         (g) The appointment of other committees of the Board or the members
         thereof.

         Any such committee must be designated, and the members or alternate
members thereof appointed, by resolution adopted by a majority of the authorized
number of directors and any such committee may be designated an Executive
Committee or by such other name as the Board shall specify. Alternate members of
a committee may replace any absent member at any meeting of the committee. The
Board shall have the power to prescribe the manner in which proceedings of any
such committee shall be conducted. In the absence of any such prescription, such
committee shall have the power to prescribe the manner in which its proceedings
shall be conducted. Unless the Board or such committee shall otherwise provide,
the regular and special meetings and other actions of any such committee shall
be governed by the provisions of this Article applicable to meetings and actions
of the Board. Minutes shall be kept of each meeting of each committee.

                              ARTICLE IV. Officers.

         Section 1. OFFICERS. The officers of the corporation shall be a
President, a Secretary and a Chief Financial Officer. The corporation may also
have, at the discretion of the Board, a Chairman of the Board, one or more Vice
Presidents, one or more Assistant Secretaries, one or more Assistant Financial
Officers, and such other officers as may be elected or appointed in accordance
with the provisions of Section 3 of this Article.

         Section 2. ELECTION. The officers of the corporation, except such
officers as may be elected or appointed in accordance with the provisions of
Section 3 or Section 5 of this Article, shall be chosen annually by, and shall
serve at the pleasure of, the Board, and shall hold their respective offices
until their resignation, removal, or other disqualification from service, or
until their respective successors shall be elected.

         Section 3. SUBORDINATE OFFICERS. The Board may elect, and may empower
the President to appoint, such other officers as the business of the corporation
may

                                       10



require, each of whom shall hold office for such period, have such authority and
perform such duties as are provided in these Bylaws or as the Board may from
time to time determine.

         Section 4. REMOVAL AND RESIGNATION. Any officer may be removed, either
with or without cause, by the Board at any time or, except in the case of an
officer chosen by the Board, by any officer upon whom such power of removal may
be conferred by the Board. Any such removal shall be without prejudice to the
rights, if any, of the officer under any contract of employment of the officer.

         Any officer may resign at any time by giving written notice to the
corporation, but without prejudice to the rights, if any, of the corporation
under any contract to which the officer is a party. Any such resignation shall
take effect at the date of the receipt of such notice or at any later time
specified therein and, unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective.

         Section 5. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filled in the
manner prescribed in these Bylaws for regular election or appointment to such
office.

         Section 6. CHAIRMAN OF THE BOARD. The Chairman of the Board, if there
shall be such an officer, shall, if present, preside at all meetings of the
Board and exercise and perform such other powers and duties as may be from time
to time assigned by the Board.

         Section 7. PRESIDENT. Subject to such power, if any, as may be given by
the Board to the Chairman of the Board, if there be such an officer, the
President is the general manager and chief executive officer of the corporation
and has, subject to the control of the Board, general supervision, direction and
control of the business and officers of the corporation. The President shall
preside at all meetings of the shareholders and, in the absence of the Chairman
of the Board, or if there be none, at all meetings of the Board. The President
has the general powers and duties of management usually vested in the office of
president and general manager of a corporation and such other powers and duties
as may be prescribed by the Board.

         Section 8. VICE PRESIDENTS. In the absence or disability of the
President, the Vice Presidents in order of their rank as fixed by the Board or,
if not ranked, the Vice President designated by the Board, shall perform all the
duties of the President and, when so acting, shall have all the powers of, and
be subject to all the restrictions upon, the President. The Vice Presidents
shall have such other powers and perform such other duties as from time to time
may be prescribed for them respectively by the Board.

         Section 9. SECRETARY. The Secretary shall keep or cause to be kept, at
the principal executive office and such other place as the Board may order, a
book of minutes of all meetings of shareholders, the Board and its committees,
with the time and place of holding, whether regular or special, and if special,
how authorized, the notice thereof given, the names of those present at Board
and committee meetings, the number of shares present or represented at
shareholders' meetings, and the proceedings thereof. The Secretary shall keep,
or cause to be kept, a copy of the Bylaws of the corporation at the principal
executive office or business office in accordance with Section 213 of the
California General Corporation Law.

                                       11



         The Secretary shall keep, or cause to be kept, at the principal
executive office or at the office of the corporation's transfer agent or
registrar, if one be appointed, a share register, or a duplicate share register,
showing the names of the shareholders and their addresses, the number and
classes of shares held by each, the number and date of certificates issued for
the same, and the number and date of cancellation of every certificate
surrendered for cancellation.

         The Secretary shall give, or cause to be given, notice of all meetings
of the shareholders and of the Board and any committees thereof required by
these Bylaws or by law to be given, shall keep the seal of the corporation in
safe custody, and shall have such other powers and perform such other duties as
may be prescribed by the Board.

         Section 10. CHIEF FINANCIAL OFFICER. The Chief Financial Officer is the
chief financial officer of the corporation and shall keep and maintain, or cause
to be kept and maintained, adequate and correct accounts of the properties and
business transactions of the corporation, and shall send or cause to be sent to
the shareholders of the corporation such financial statements and reports as are
by law or these Bylaws required to be sent to them. The books of account shall
at all times be open to inspection by any director.

         The Chief Financial Officer shall deposit all moneys and other
valuables in the name and to the credit of the corporation with such
depositaries as may be designated by the Board. The Chief Financial Officer
shall disburse the funds of the corporation as may be ordered by the Board,
shall render to the President and the directors, whenever they request it, an
account of all transactions as Chief Financial Officer and of the financial
condition of the corporation, and shall have such other powers and perform such
other duties as may be prescribed by the Board.

                          ARTICLE V. Other Provisions.

         Section 1. INSPECTION OF CORPORATE RECORDS.

         (a) A shareholder or shareholders holding at least five percent in the
aggregate of the outstanding voting shares of the corporation or who hold at
least one percent of such voting shares and have filed a Schedule l4B with the
United States Securities and Exchange Commission relating to the election of
directors of the corporation shall have an absolute right to do either or both
of the following:

         (i)  Inspect and copy the record of shareholders' names and addresses
         and shareholdings during usual business hours upon five business days'
         prior written demand upon the corporation; or

         (ii) Obtain from the transfer agent, if any, for the corporation, upon
         five business days' prior written demand and upon the tender of its
         usual charges for such a list (the amount of which charges shall be
         stated to the shareholder by the transfer agent upon request), a list
         of the shareholders' names and addresses who are entitled to vote for
         the election of directors and their shareholdings, as of the most
         recent record date for which it has been compiled or as of a date
         specified by the shareholder subsequent to the date of demand.

                                       12



         (b) The record of shareholders shall also be open to inspection and
copying by any shareholder or holder of a voting trust certificate at any time
during usual business hours upon written demand on the corporation, for a
purpose reasonably related to such holder's interest as a shareholder or holder
of a voting trust certificate.

         (c) The accounting books and records and minutes of proceedings of the
shareholders and the Board and committees of the Board shall be open to
inspection upon written demand on the corporation of any shareholder or holder
of a voting trust certificate at any reasonable time during usual business
hours, for a purpose reasonably related to such holder's interests as a
shareholder or as a holder of such voting trust certificate.

         (d) Any inspection and copying under this Article may be made in person
or by agent or attorney.

         Section 2. INSPECTION OF BYLAWS. The corporation shall keep in its
principal executive office in the State of California, or if its principal
executive office is not in such State at its principal business office in such
State, the original or a copy of these Bylaws as amended to date, which shall be
open to inspection by shareholders at all reasonable times during office hours.
If the principal executive office of the corporation is located outside the
State of California and the corporation has no principal business office in such
state, it shall upon the written request of any shareholder furnish to such
shareholder a copy of these Bylaws as amended to date.

         Section 3. ENDORSEMENT OF DOCUMENTS; CONTRACTS. Subject to the
provisions of applicable law, any note, mortgage, evidence of indebtedness,
contract, share certificate, conveyance or other instrument in writing and any
assignment or endorsements thereof executed or entered into between the
corporation and any other person, when signed by the Chairman of the Board, the
President or any Vice President and the Secretary, any Assistant Secretary, the
Chief Financial Officer or any Assistant Chief Financial Officer of the
corporation shall be valid and binding on the corporation in the absence of
actual knowledge on the part of the other person that the signing officers had
no authority to execute the same. Any such instruments may be signed by any
other person or persons and in such manner as from time to time shall be
determined by the Board, and, unless so authorized by the Board, no officer,
agent or employee shall have any power or authority to bind the corporation by
any contract or engagement or to pledge its credit or to render it liable for
any purpose or amount.

         Section 4. CERTIFICATES OF STOCK. Every holder of shares of the
corporation shall be entitled to have a certificate signed in the name of the
corporation by the Chairman of the Board, the President or a Vice President and
by the Chief Financial Officer or an Assistant Chief Financial Officer or the
Secretary or an Assistant Secretary, certifying the number of shares and the
class or series of shares owned by the shareholder. Any or all of the signatures
on the certificate may be facsimile. If any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the corporation with the same effect
as if such person were an officer, transfer agent or registrar at the date of
issue.

                                       13



         Certificates for shares may be issued prior to full payment under such
restrictions and for such purposes as the Board may provide; provided, however,
that on any certificate issued to represent any partly paid shares, the total
amount of the consideration to be paid therefor and the amount paid thereon
shall be stated.

         Except as provided in this Section, no new certificate for shares shall
be issued in lieu of an old one unless the latter is surrendered and cancelled
at the same time. The Board may, however, if any certificate for shares is
alleged to have been lost, stolen or destroyed, authorize the issuance of a new
certificate in lieu thereof, and the corporation may require that the
corporation be given a bond or other adequate security sufficient to indemnify
it against any claim that may be made against it (including expense or
liability) on account of the alleged loss, theft or destruction of such
certificate or the issuance of such new certificate.

         Section 5. REPRESENTATION OF SHARES OF OTHER CORPORATIONS. The
President or any other officer or officers authorized by the Board or the
President are each authorized to vote, represent and exercise on behalf of the
corporation all rights incident to any and all shares of any other corporation
or corporations standing in the name of the corporation. The authority herein
granted may be exercised either by any such officer in person or by any other
person authorized so to do by proxy or power of attorney duly executed by said
officer.

         Section 6. STOCK PURCHASE PLANS. The corporation may adopt and carry
out a stock purchase plan or agreement or stock option plan or agreement
providing for the issue and sale for such consideration as may be fixed of its
unissued shares, or of issued shares acquired or to be acquired, to one or more
of the employees or directors of the corporation or of a subsidiary or to a
trustee on their behalf and for the payment for such shares in installments or
at one time, and may provide for aiding any such persons in paying for such
shares by compensation for services rendered, promissory notes or otherwise.

         Any such stock purchase plan or agreement or stock option plan or
agreement may include, among other features, the fixing of eligibility for
participation therein, the class and price of shares to be issued or sold under
the plan or agreement, the number of shares which may be subscribed for, the
method of payment therefor, the reservation of title until full payment
therefor, the effect of the termination of employment, an option or obligation
on the part of the corporation to repurchase the shares upon termination of
employment, restrictions upon transfer of the shares, the time limits of and
termination of the plan, and any other matters, not in violation of applicable
law, and may be included in the plan as approved or authorized by the Board or
any committee of the Board.

         Section 7. CONSTRUCTION AND DEFINITIONS. Unless the context otherwise
requires, the general provisions, rules of construction and definitions
contained in the General Provisions of the California Corporations Code and in
the California General Corporation Law shall govern the construction of these
Bylaws.

         Section 8. AMENDMENTS. These Bylaws may be amended or repealed either
by approval of the outstanding shares (as defined in Section 152 of the
California General Corporation Law) or by the approval of the Board; provided,
however, that after the issuance of

                                       14



shares, a bylaw specifying or changing a fixed number of directors or the
maximum or minimum number or changing from a fixed to a variable number of
directors or vice versa may only be adopted by approval of the outstanding
shares, and a bylaw reducing the fixed number or the minimum number of directors
to a number less than five shall be subject to the provisions of Section 212(a)
of the California General Corporation Law.

         Section 9. ANNUAL REPORT TO SHAREHOLDERS. The annual report to
shareholders referred to in Section 1501 of the California General Corporation
Law is expressly waived, but nothing herein shall be interpreted as prohibiting
the Board from issuing annual or other periodic reports to shareholders.

                          ARTICLE VI. Indemnification.

         Section 1. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Each person who
was or is a party or is threatened to be made a party to or is involved in any
threatened, pending or completed action, suit or proceeding, whether brought in
the name of the corporation or otherwise and whether of a civil, criminal,
administrative or investigative nature (hereinafter a "proceeding"), by reason
of the fact that he or she, or a person of whom he or she is the legal
representative, is or was a director or officer of the corporation or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is an alleged action or inaction in an official
capacity or in any other capacity while serving as a director or officer, shall,
subject to the terms of any agreement between the corporation and such person,
be indemnified and held harmless by the corporation to the fullest extent
permissible under California law and the corporation's Articles of
Incorporation, against all costs, charges, expenses, liabilities and losses
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement) reasonably incurred or suffered by
such person in connection therewith, and such indemnification shall continue as
to a person who has ceased to be a director or officer and shall inure to the
benefit of his or her heirs, executors and administrators; provided, however,
that the corporation shall indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such person only if
such proceeding (or part thereof) was authorized by the Board of Directors of
the corporation and provided, further, that no such person shall be indemnified
(i) except to the extent that the aggregate of losses to be indemnified exceeds
the amount of such losses for which the director or officer is paid pursuant to
any directors and officers liability insurance policy maintained by the
corporation; (ii) on account of any suit in which judgment is rendered against
such person for an accounting of profits made from the purchase or sale by such
person of securities of the corporation pursuant to the provisions of Section
16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar
provisions of any federal, state or local statutory law; (iii) for expenses,
judgments, funds, penalties or ERISA excise taxes resulting from such person's
conduct which is finally adjudged to have been willful misconduct, knowingly
fraudulent or deliberately dishonest; (iv) if a court of competent jurisdiction
finally determines that any indemnification hereunder is unlawful; (v) for acts
or omissions involving intentional misconduct or knowing and culpable violation
of law; (vi) for acts or omissions that the director or officer believes to be
contrary to the best interests of the corporation or its shareholders or that
involve the absence of good faith on the part of the director or officer; (vii)
for any transaction

                                       15



from which the director or officer derived an improper personal benefit; (viii)
for acts or omissions that show a reckless disregard for the director's or
officer's duty to the corporation or its shareholders in circumstances in which
the director or officer was aware, or should have been aware, in the ordinary
course of performing his duties, of a risk of serious injury to the corporation
or its shareholders; (ix) for acts or omissions that constitute an unexcused
pattern of inattention that amounts to an abdication of the director's or
officer's duties to the corporation or its shareholders; (x) for costs, charges,
expenses, liabilities and losses arising under Section 310 or 316 of the General
Corporation Law of California (the "Law"); and (xi) as to circumstances in which
indemnity is expressly prohibited by Section 317 of the Law. The right to
indemnification conferred in this Article shall be a contract right and shall
include the right to be paid by the corporation expenses incurred in defending
any proceeding in advance of its final disposition; provided, however, that if
the Law requires the payment of such expenses incurred by a director or officer
in his or her capacity as a director or officer (and not in any other capacity
in which service was or is rendered by such person while a director or officer,
including, without limitation, service to an employee benefit plan) in advance
of the final disposition of a proceeding, shall be made only upon delivery to
the corporation of an undertaking, by or on behalf of such director or officer,
to repay all amounts to the corporation unless it shall be determined ultimately
that such person is not entitled to be indemnified. No indemnity shall be
provided under this provision for any liability arising out of any act or
omission committed or occurring prior to the date an amendment containing this
provision is filed with the Secretary of State of California.

         Section 2. INDEMNIFICATION OF AGENTS. A person who was or is a party or
is threatened to be made a party to or is involved in any proceeding by reason
of the fact that he or she is or was an employee or agent of the corporation or
is or was serving at the request of the corporation as an employee or agent of
another enterprise, including service with respect to employee benefit plans,
whether the basis of such action is an alleged action or inaction in an official
capacity or in any other capacity while serving as an employee or agent, may,
subject to the terms of any agreement between the corporation and such person,
be indemnified and held harmless by the corporation to the fullest extent
permitted by California law and the corporation's Articles of Incorporation,
against all costs, charges, expenses, liabilities and losses (including
attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts
paid or to be paid in settlement) reasonably incurred or suffered by such person
in connection therewith. The immediately preceding sentence is not intended to
be and shall not be considered to confer a contract right on any employee or
agent of the corporation.

         Section 3. RIGHT OF DIRECTORS AND OFFICERS TO BRING SUIT. If a claim
under Section 1 of this Article is not paid in full by the corporation within 30
days after a written claim has been received by the corporation, the claimant
may at any time thereafter bring suit against the corporation to recover the
unpaid amount of the claim and, if successful in whole or in part, the claimant
shall also be entitled to be paid the expense of prosecuting such claim. It
shall be a defense to any such action (other than an action brought to enforce a
claim for expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any is required, has been
tendered to the corporation) that the claimant has failed to meet a standard of
conduct, if any, required to make it permissible under California law for the
corporation to indemnify the claimant for the amount claimed. Neither the
failure of the corporation (including its Board of Directors, independent legal
counsel or its shareholders)

                                       16



to have made a determination prior to the commencement of such action and
indemnification of the claimant is permissible in the circumstances because he
or she has met such standard of conduct, nor an actual determination by the
corporation (including its Board of Directors, independent legal counsel or its
shareholders) that the claimant has not met such standard of conduct, shall be a
defense to the action or create a presumption that the claimant has failed to
meet such standard of conduct.

         Section 4. SUCCESSFUL DEFENSE. Notwithstanding any other provision of
this Article, to the extent that a director or officer has been successful on
the merits or otherwise (including the dismissal of an action without prejudice
or the settlement of a proceeding without admission of liability) in defense of
any proceeding referred to in Section 1 or, in defense of any claim, issue or
matter therein, he shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection therewith.

         Section 5. NON-EXCLUSIVITY OF RIGHTS. The right to indemnification
provided by this Article shall not be exclusive of any other right which any
person may have or hereafter acquire under any statute, bylaw, agreement, vote
of shareholders or disinterested directors or otherwise.

         Section 6. INSURANCE. The corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
corporation or another corporation, partnership, joint venture, trust or other
enterprise against any such expense, liability or loss, whether or not the
corporation would have the power to indemnify such person against such expense,
liability or loss under California law.

         Section 7. EXPENSES AS A WITNESS. To the extent that any director,
officer, employee or agent of the corporation is by reason of such position, or
a position with another entity at the request of the corporation, a witness in
any action, suit or proceeding, he may be indemnified against all costs and
expenses actually and reasonably incurred by him or her or on his or her behalf
in connection therewith.

         Section 8. INDEMNITY AGREEMENTS. The corporation may enter into
agreements with any director, officer, employee or agent of the corporation
providing for indemnification to the fullest extent permissible under California
law and the corporation's Articles of Incorporation.

                                       17

EX-3.4

                                                                     Exhibit 3.4

                            ARTICLES OF INCORPORATION

                                       OF

                      LIBERMAN TELEVISION OF HOUSTON, INC.

                                      Name

         One: The name of the corporation is Liberman Television of Houston,
Inc.

                                     Purpose

         Two: The purpose of the corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of California other than the banking business, the trust company business or
the practice of a profession permitted to be incorporated by the California
Corporations Code.

                                Agent for Service

         Three: The name and address of the corporation's initial agent for
service of process are:

                                 Lenard Liberman
                            5724 Hollywood Boulevard
                           Hollywood, California 90028

                                Authorized Shares

         Four: The total number of shares of all classes of stock which the
corporation shall have the authority to issue is one thousand (1,000) shares of
Common Stock, par value $.01 per share.

                      Limitation on Liability of Directors
                      and Authority to Indemnify Agents

         Five: The liability of directors of the corporation for monetary
damages shall be eliminated to the fullest extent permissible under California
law.

         The corporation is authorized to provide indemnification of agents (as
defined in Section 317 of the California Corporations Code) for breach of duty
to the corporation and its shareholders through bylaw provisions, agreements
with agents, vote of shareholders or disinterested directors, or otherwise, in
excess of the indemnification otherwise permitted by Section 317 of the
California Corporations Code, subject only to the applicable limits set forth in
Section 204 of the California Corporations Code.



         The undersigned declares that the undersigned has executed these
Articles of Incorporation and that this instrument is the act and deed of the
undersigned.

DATED:  October 16, 2000


                                                  /s/ Regina Braman
                                               -----------------------
                                               Regina Braman

                                       2

EX-3.5

                                                                     Exhibit 3.5

                                     BYLAWS

                                       of

                      LIBERMAN TELEVISION OF HOUSTON, INC.
                            a California corporation



                                      INDEX



                                                                            Page
                                                                            ----
                                                                         
ARTICLE I - Offices.

     Section 1.   PRINCIPAL EXECUTIVE OFFICE ..............................    1
     Section 2.   OTHER OFFICES ...........................................    1

ARTICLE II - Shareholders.

     Section 1.   PLACE OF MEETINGS .......................................    1
     Section 2.   ANNUAL MEETINGS .........................................    1
     Section 3.   SPECIAL MEETINGS ........................................    1
     Section 4.   NOTICE OF ANNUAL OR SPECIAL MEETINGS ....................    1
     Section 5.   QUORUM ..................................................    2
     Section 6.   ADJOURNED MEETINGS AND NOTICE THEREOF ...................    2
     Section 7.   VOTING ..................................................    2
     Section 8.   RECORD DATE .............................................    4
     Section 9.   CONSENT OF ABSENTEES ....................................    5
     Section 10.  ACTION WITHOUT MEETING ..................................    5
     Section 11.  PROXIES .................................................    5
     Section 12.  INSPECTORS OF ELECTION ..................................    6
     Section 13.  CONDUCT OF MEETING ......................................    6

ARTICLE III - Directors.

     Section 1.   POWERS ..................................................    6
     Section 2.   NUMBER OF DIRECTORS .....................................    7
     Section 3.   ELECTION AND TERM OF OFFICE .............................    7
     Section 4.   VACANCIES ...............................................    7
     Section 5.   PLACE OF MEETING ........................................    8
     Section 6.   REGULAR MEETINGS ........................................    8
     Section 7.   SPECIAL MEETINGS ........................................    8
     Section 8.   QUORUM ..................................................    8
     Section 9.   PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE .......    9
     Section 10.  WAIVER OF NOTICE ........................................    9
     Section 11.  ADJOURNMENT .............................................    9
     Section 12.  FEES AND COMPENSATION ...................................    9
     Section 13.  ACTION WITHOUT MEETING ..................................    9
     Section 14.  RIGHTS OF INSPECTION ....................................    9
     Section 15.  COMMITTEES ..............................................    9

ARTICLE IV - Officers.

     Section 1.   OFFICERS ................................................   10
     Section 2.   ELECTION ................................................   10
     Section 3.   SUBORDINATE OFFICERS ....................................   10


                                       i



                                                                           
     Section 4.   REMOVAL AND RESIGNATION ..................................  11
     Section 5.   VACANCIES ................................................  11
     Section 6.   CHAIRMAN OF THE BOARD ....................................  11
     Section 7.   PRESIDENT ................................................  11
     Section 8.   VICE PRESIDENTS ..........................................  11
     Section 9.   SECRETARY ................................................  11
     Section 10.  CHIEF FINANCIAL OFFICER ..................................  12

ARTICLE V - Other Provisions.

     Section 1.   INSPECTION OF CORPORATE RECORDS ..........................  12
     Section 2.   INSPECTION OF BYLAWS .....................................  13
     Section 3.   ENDORSEMENT OF DOCUMENTS; CONTRACTS ......................  13
     Section 4.   CERTIFICATES OF STOCK ....................................  13
     Section 5.   REPRESENTATION OF SHARES OF OTHER CORPORATIONS ...........  14
     Section 6.   STOCK PURCHASE PLANS .....................................  14
     Section 7.   CONSTRUCTION AND DEFINITIONS .............................  14
     Section 8.   AMENDMENTS ...............................................  14
     Section 9.   ANNUAL REPORT TO SHAREHOLDERS ............................  15

ARTICLE VI - Indemnification.

     Section 1.   INDEMNIFICATION OF DIRECTORS AND OFFICERS ................  15
     Section 2.   INDEMNIFICATION OF AGENTS ................................  16
     Section 3.   RIGHT OF DIRECTORS AND OFFICERS TO BRING SUIT ............  16
     Section 4.   SUCCESSFUL DEFENSE .......................................  17
     Section 5.   NON-EXCLUSIVITY OF RIGHTS ................................  17
     Section 6.   INSURANCE ................................................  17
     Section 7.   EXPENSES AS A WITNESS ....................................  17
     Section 8.   INDEMNITY AGREEMENTS .....................................  17



                                       ii



                                     BYLAWS

                           for the regulation, except
                       as otherwise provided by statute or
                         its Articles of Incorporation,

                                       of

                      LIBERMAN TELEVISION OF HOUSTON, INC.
                            a California corporation

                              ARTICLE I. Offices.

         Section 1. PRINCIPAL EXECUTIVE OFFICE. The corporation's principal
executive office shall be fixed and located at such place as the Board of
Directors (herein called the "Board") shall determine. The Board is granted full
power and authority to change said principal executive office from one location
to another.

         Section 2. OTHER OFFICES. Branch or subordinate offices may be
established at any time by the Board at any place or places.

                           ARTICLE II. Shareholders.

         Section 1. PLACE OF MEETINGS. Meetings of shareholders shall be held
either at the principal executive office of the corporation or at any other
place within or without the State of California which may be designated either
by the Board or by the written consent of all persons entitled to vote thereat,
given either before or after the meeting and filed with the Secretary.

         Section 2. ANNUAL MEETINGS. The annual meetings of shareholders shall
be held on such date and at such time as may be fixed by the Board.

         Section 3. SPECIAL MEETINGS. Special meetings of the shareholders may
be called at any time by the Board, the Chairman of the Board, the President, or
by the holders of shares entitled to cast not less than ten percent of the votes
at such meeting. Upon request in writing to the Chairman of the Board, the
President, any Vice President or the Secretary by any person (other than the
Board) entitled to call a special meeting of shareholders, the officer forthwith
shall cause notice to be given to the shareholders entitled to vote that a
meeting will be held at a time requested by the person or persons calling the
meeting, not less than thirty-five nor more than sixty days after the receipt of
the request. If the notice is not given within twenty days after receipt of the
request, the persons entitled to call the meeting may give the notice.

         Section 4. NOTICE OF ANNUAL OR SPECIAL MEETINGS. Written notice of each
annual or special meeting of shareholders shall be given not less than ten nor
more than sixty days before the date of the meeting to each shareholder entitled
to vote thereat. Such notice shall state the place, date and hour of the meeting
and (i) in the case of a special meeting,



the general nature of the business to be transacted, and no other business may
be transacted, or (ii) in the case of the annual meeting, those matters which
the Board, at the time of the mailing of the notice, intends to present for
action by the shareholders, but, subject to the provisions of applicable law,
any proper matter may be presented at the meeting for such action. The notice of
any meeting at which directors are to be elected shall include the names of
nominees intended at the time of the notice to be presented by management for
election.

         Notice of a shareholders' meeting shall be given either personally or
by mail or by other means of written communication, addressed to the shareholder
at the address of such shareholder appearing on the books of the corporation or
given by the shareholder to the corporation for the purpose of notice, or, if no
such address appears or is given, at the place where the principal executive
office of the corporation is located or by publication at least once in a
newspaper of general circulation in the county in which the principal executive
office is located. Notice by mail shall be deemed to have been given at the time
a written notice is deposited in the United States mails, postage prepaid. Any
other written notice shall be deemed to have been given at the time it is
personally delivered to the recipient or is delivered to a common carrier for
transmission, or actually transmitted by the person giving the notice by
electronic means, to the recipient.

         Section 5. QUORUM. A majority of the shares entitled to vote,
represented in person or by proxy, shall constitute a quorum at any meeting of
shareholders. If a quorum is present, the affirmative vote of a majority of the
shares represented and voting at the meeting (which shares voting affirmatively
also constitute at least a majority of the required quorum) shall be the act of
the shareholders, unless the vote of a greater number or voting by classes is
required by law or by the Articles, except as provided in the following
sentence. The shareholders present at a duly called or held meeting at which a
quorum is present may continue to do business until adjournment, notwithstanding
the withdrawal of enough shareholders to leave less than a quorum, if any action
taken (other than adjournment) is approved by at least a majority of the shares
required to constitute a quorum.

         Section 6. ADJOURNED MEETINGS AND NOTICE THEREOF. Any Shareholders'
meeting, whether or not a quorum is present, may be adjourned from time to time
by the vote of a majority of the shares represented either in person or by
proxy, but in the absence of a quorum (except as provided in Section 5 of this
Article) no other business may be transacted at such meeting.

         It shall not be necessary to give any notice of the time and place of
the adjourned meeting or of the business to be transacted thereat, other than by
announcement at the meeting at which such adjournment is taken; provided,
however, when any shareholders' meeting is adjourned for more than 45 days or,
if after adjournment a new record date is fixed for the adjourned meeting,
notice of the adjourned meeting shall be given as in the case of an original
meeting.

         Section 7. VOTING. The shareholders entitled to notice of any meeting
or to vote at any such meeting shall be only persons in whose name shares stand
on the stock records of the corporation on the record date determined in
accordance with Section 8 of this Article.

                                        2



         Subject to the following sentence and to the provisions of Section 708
of the California General Corporation Law, every shareholder entitled to vote at
any election of directors may cumulate such shareholder's votes and give one
candidate a number of votes equal to the number of directors to be elected
multiplied by the number of votes to which the shareholder's shares are
entitled, or distribute the shareholder's votes on the same principle among as
many candidates as the shareholder thinks fit. No shareholder shall be entitled
to cumulate votes for any candidate or candidates pursuant to the preceding
sentence unless such candidate or candidates' names have been placed in
nomination prior to the voting and the shareholder has given notice at the
meeting prior to the voting of the shareholder's intention to cumulate the
shareholder's votes. If any one shareholder has given such notice, all
shareholders may cumulate their votes for candidates in nomination.

         Elections need not be by ballot, provided, however, that all elections
for directors must be by ballot upon demand made by a shareholder at the meeting
and before the voting begins.

         In any election of directors, the candidates receiving the highest
number of votes of the shares entitled to be voted for them up to the number of
directors to be elected by such shares are elected.

         Voting shall in all cases be subject to the provisions of Chapter 7 of
the California General Corporation Law, and to the following provisions:

         (a) Subject to clause (g), shares held by an administrator, executor,
guardian, conservator or custodian may be voted by such holder either in person
or by proxy, without a transfer of such shares into the holder's name; and
shares standing in the name of a trustee may be voted by the trustee, either in
person or by proxy, but no trustee shall be entitled to vote shares held by such
trustee without a transfer of such shares into the trustee's name.

         (b) Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into the receiver's name if authority
to do so is contained in the order of the court by which such receiver was
appointed.

         (c) Subject to the provisions of Section 705 of the California General
Corporation Law and except where otherwise agreed in writing between the
parties, a shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.

         (d) Shares standing in the name of a minor may be voted and the
corporation may treat all rights incident thereto as exercisable by the minor,
in person or by proxy, whether or not the corporation has notice, actual or
constructive, of the nonage, unless a guardian of the minor's property has been
appointed and written notice of such appointment given to the corporation.

         (e) Shares standing in the name of another corporation, domestic or
foreign, may be voted by such officer, agent or proxyholder as the bylaws of
such other corporation may

                                        3



prescribe or, in the absence of such provision, as the Board of Directors of
such other corporation may determine or, in the absence of such determination,
by the chairman of the board, president or any vice president of such other
corporation, or by any other person authorized to do so by the chairman of the
board, president or any vice president of such other corporation. Shares which
are purported to be voted or any proxy purported to be executed in the name of a
corporation (whether or not any title of the person signing is indicated) shall
be presumed to be voted or the proxy executed in accordance with the provisions
of this clause, unless the contrary is shown.

         (f) Shares of the corporation owned by any subsidiary shall not be
entitled to vote on any matter.

         (g) Shares held by the corporation in a fiduciary capacity, and shares
of the issuing corporation held in a fiduciary capacity by any subsidiary, shall
not be entitled to vote on any matter, except to the extent that the settlor or
beneficial owner possesses and exercises a right to vote or to give the
corporation binding instructions as to how to vote such shares.

         (h) If shares stand of record in the names of two or more persons,
whether fiduciaries, members of a partnership, joint tenants, tenants in common,
husband and wife as community property, tenants by the entirety, voting
trustees, persons entitled to vote under a shareholder voting agreement or
otherwise, or if two or more persons (including proxyholders) have the same
fiduciary relationship respecting the same shares, unless the secretary of the
corporation is given written notice to the contrary and is furnished with a copy
of the instrument or order appointing them or creating the relationship wherein
it is so provided, their acts with respect to voting shall have the following
effect:

             (i)    If only one votes, such act binds all;

             (ii)   If more than one vote, the act of the majority so voting
                    binds all;

             (iii)  If more than one vote, but the vote is evenly split on any
     particular matter, each faction may vote the securities in question
     proportionately.

If the instrument so filed or the registration of the shares shows that any such
tenancy is held in unequal interests, a majority or even split for the purpose
of this section shall be a majority or even split in interest.

         Section 8. RECORD DATE. The Board may fix, in advance, a record date
for the determination of the shareholders entitled to notice of any meeting or
to vote or entitled to receive payment of any dividend or other distribution, or
any allotment of rights, or to exercise rights in respect of any other lawful
action. The record date so fixed shall be not more than 60 days nor less than 10
days prior to the date of the meeting nor more than 60 days prior to any other
action. When a record date is so fixed, only shareholders of record on that date
are entitled to notice of and to vote at the meeting or to receive the dividend,
distribution, or allotment of rights, or to exercise the rights, as the case may
be, notwithstanding any transfer of shares on the books of the corporation after
the record date. A determination of shareholders of record entitled to notice of
or to vote at a meeting of shareholders shall apply to any adjournment of the
meeting unless the Board fixes a new record date for the adjourned meeting. The
Board shall fix a new record date if the meeting is adjourned for more than
forty-five days.

                                        4



         If no record date is fixed by the Board, the record date for
determining shareholders entitled to notice of or to vote at a meeting of
shareholders shall be at the close of business on the business day next
preceding the day on which notice is given or, if notice is waived, at the close
of business on the business day next preceding the day on which the meeting is
held. The record date for determining shareholders for any purpose other than
set forth in this Section 8 or Section 10 of this Article shall be at the close
of business on the day on which the Board adopts the resolution relating
thereto, or the sixtieth day prior to the date of such other action, whichever
is later.

         Section 9. CONSENT OF ABSENTEES. The transactions of any meeting of
shareholders, however called and noticed, and wherever held, are as valid as
though had at a meeting duly held after regular call and notice, if a quorum is
present either in person or by proxy, and if, either before or after the
meeting, each of the persons entitled to vote, not present in person or by
proxy, signs a written waiver of notice, or a consent to the holding of the
meeting or an approval of the minutes thereof. All such waivers, consents or
approvals shall be filed with the corporate records or made a part of the
minutes of the meeting. Attendance of a person at a meeting shall constitute a
waiver of notice of and presence at such meeting, except when the person
objects, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened and except that
attendance at a meeting is not a waiver of any right to object to the
consideration of matters required by the California General Corporation Law to
be included in the notice but not so included, if such objection is expressly
made at the meeting. Neither the business to be transacted at nor the purpose of
any regular or special meeting of shareholders need be specified in any written
waiver of notice, consent to the holding of the meeting or approval of the
minutes thereof, except as provided in Section 601(f) of the California General
Corporation Law.

         Section 10. ACTION WITHOUT MEETING. Subject to Section 603 of the
California General Corporation Law, any action which, under any provision of the
California General Corporation Law, may be taken at any annual or special
meeting of shareholders, may be taken without a meeting and without prior notice
if a consent in writing, setting forth the action so taken, shall be signed by
the holders of outstanding shares having not less than the minimum number of
votes that would be necessary to authorize or take such action at a meeting at
which all shares entitled to vote thereon were present and voted. Unless a
record date for voting purposes be fixed as provided in Section 8 of this
Article, the record date for determining shareholders entitled to give consent
pursuant to this Section 10, when no prior action by the Board has been taken,
shall be the day on which the first written consent is given.

         Section 11. PROXIES. Every person entitled to vote shares has the right
to do so either in person or by one or more persons authorized by a written
proxy executed by such shareholder and filed with the Secretary. Any proxy duly
executed is not revoked and continues in full force and effect until revoked by
the person executing it prior to the vote pursuant thereto. Such revocation may
be effected either, (i) by a writing delivered to the Secretary of the
Corporation stating that the proxy is revoked, (ii) by a subsequent proxy
executed by the person executing the prior proxy and presented to the meeting,
or (iii) by attendance at the meeting and voting in person by the person
executing the proxy; provided, however, that no proxy shall be valid after the
expiration of eleven months from the date of its execution unless otherwise
provided in the proxy.

                                        5



         Section 12. INSPECTORS OF ELECTION. In advance of any meeting of
shareholders, the Board may appoint inspectors of election to act at such
meeting and any adjournment thereof. If inspectors of election be not so
appointed, or if any persons so appointed fail to appear or refuse to act, the
chairman of any such meeting may, and on the request of any shareholder or
shareholder's proxy shall, make such appointment at the meeting. The number of
inspectors shall be either one or three. If appointed at a meeting on the
request of one or more shareholders or proxies, the majority of shares present
shall determine whether one or three inspectors are to be appointed.

         The duties of such inspectors shall be as prescribed by Section 707(b)
of the California General Corporation Law and shall include: determining the
number of shares outstanding and the voting power of each; determining the
shares represented at the meeting; determining the existence of a quorum;
determining the authenticity, validity and effect of proxies; receiving votes,
ballots or consents; hearing and determining all challenges and questions in any
way arising in connection with the right to vote; counting and tabulating all
votes or consents; determining when the polls shall close; determining the
result; and doing such acts as may be proper to conduct the election or vote
with fairness to all shareholders. If there are three inspectors of election,
the decision, act or certificate of a majority is effective in all respects as
the decision, act or certificate of all.

         Section 13. CONDUCT OF MEETING. The President shall preside as chairman
at all meetings of the shareholders. The chairman shall conduct each such
meeting in a businesslike and fair manner, but shall not be obligated to follow
any technical, formal or parliamentary rules or principles of procedure. The
chairman's rulings on procedural matters shall be conclusive and binding on all
shareholders, unless at the time of a ruling a request for a vote is made to the
shareholders holding shares entitled to vote and which are represented in person
or by proxy at the meeting, in which case the decision of a majority of such
shares shall be conclusive and binding on all shareholders. Without limiting the
generality of the foregoing, the chairman shall have all of the powers usually
vested in the chairman of a meeting of shareholders.

                            ARTICLE III. Directors.

         Section 1. POWERS. Subject to limitations of the Articles, of these
Bylaws and of the California General Corporation Law relating to action required
to be approved by the shareholders or by the outstanding shares, the business
and affairs of the corporation shall be managed and all corporate powers shall
be exercised by or under the direction of the Board. The Board may delegate the
management of the day-to-day operation of the business of the corporation to a
management company or other person provided that the business and affairs of the
corporation shall be managed and all corporate powers shall be exercised under
the ultimate direction of the Board. Without prejudice to such general powers,
but subject to the same limitations, it is hereby expressly declared that the
Board shall have the following powers in addition to the other powers enumerated
in these Bylaws:

         (a) To select and remove all the other officers, agents and employees
of the corporation, prescribe the powers and duties for them as may not be
inconsistent with law, the

                                        6



Articles or these Bylaws, fix their compensation and require from them security
for faithful service.

         (b) To conduct, manage and control the affairs and business of the
corporation and to make such rules and regulations therefor not inconsistent
with law, the Articles or these Bylaws, as they may deem best.

         (c) To adopt, make and use a corporate seal, and to prescribe the forms
of certificates of stock, and to alter the form of such seal and of such
certificates from time to time as they may deem best.

         (d) To authorize the issuance of shares of stock of the corporation
from time to time, upon such terms and for such consideration as may be lawful.

         (e) To borrow money and incur indebtedness for the purposes of the
corporation, and to cause to be executed and delivered therefor, in the
corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages,
pledges, hypothecations or other evidences of debt and securities therefor.

         Section 2. NUMBER OF DIRECTORS. The Board shall consist of one or more
members. The exact number shall be determined from time to time by resolution of
the Board. Directors shall be elected at the annual meeting of shareholders and
each director shall serve until such person's successor is elected and qualified
or until such person's death, retirement, resignation or removal.

         Section 3. ELECTION AND TERM OF OFFICE. The directors shall be elected
at each annual meeting of the shareholders, but if any such annual meeting is
not held or the directors are not elected thereat, the directors may be elected
at any special meeting of shareholders held for that purpose. Each director
shall hold office until the next annual meeting and until a successor has been
elected and qualified.

         Section 4. VACANCIES. Any director may resign effective upon giving
written notice to the Chairman of the Board, the President, the Secretary or the
Board, unless the notice specifies a later time for the effectiveness of such
resignation. If the resignation is effective at a future time, a successor may
be elected to take office when the resignation becomes effective.

         Vacancies in the Board, except those existing as a result of a removal
of a director, may be filled by a majority of the remaining directors, though
less than a quorum, or by a sole remaining director, and each director so
elected shall hold office until the next annual meeting and until such
director's successor has been elected and qualified.

         A vacancy or vacancies in the Board shall be deemed to exist in case of
the death, resignation or removal of any director, or if the authorized number
of directors be increased, or if the shareholders fail, at any annual or special
meeting of shareholders at which any director or directors are elected, to elect
the full authorized number of directors to be voted for at that meeting.

                                        7



         The Board may declare vacant the office of a director who has been
declared of unsound mind by an order of court or convicted of a felony.

         The shareholders may elect a director or directors at any time to fill
any vacancy or vacancies not filled by the directors. Any such election by
written consent other than to fill a vacancy created by removal requires the
consent of a majority of the outstanding shares entitled to vote. Any such
election by written consent to fill a vacancy created by removal requires
unanimous consent.

         No reduction of the authorized number of directors shall have the
effect of removing any director prior to the expiration of the director's term
of office.

         Section 5. PLACE OF MEETING. Regular or special meetings of the Board
shall be held at any place within or without the State of California which has
been designated from time to time by the Board. In the absence of such
designation, regular meetings shall be held at the principal executive office of
the corporation.

         Section 6. REGULAR MEETINGS. Immediately following each annual meeting
of shareholders the Board shall hold a regular meeting for the purpose of
organization, election of officers and the transaction of other business.

         Other regular meetings of the Board shall be held without call on such
dates and at such times as may be fixed by the Board. Call and notice of all
regular meetings of the Board are hereby dispensed with.

         Section 7. SPECIAL MEETINGS. Special meetings of the Board for any
purpose or purposes may be called at any time by the Chairman of the Board, the
President, any Vice President, the Secretary or by any two directors.

         Special meetings of the Board shall be held upon four days' written
notice or forty-eight hours' notice given personally or by telephone, telegraph,
telex or other similar means of communication. Any such notice shall be
addressed or delivered to each director at such director's address as it is
shown upon the records of the corporation or as may have been given to the
corporation by the director for purposes of notice or, if such address is not
shown on such records or is not readily ascertainable, at the place in which the
meetings of the directors are regularly held.

         Notice by mail shall be deemed to have been given at the time a written
notice is deposited in the United States mails, postage prepaid. Any other
written notice shall be deemed to have been given at the time it is personally
delivered to the recipient or is delivered to a common carrier for transmission,
or actually transmitted by the person giving the notice by electronic means, to
the recipient. Oral notice shall be deemed to have been given at the time it is
communicated, in person or by telephone or wireless, to the recipient or to a
person at the office of the recipient who the person giving the notice has
reason to believe will promptly communicate it to the recipient.

         Section 8. QUORUM. A majority of the authorized number of directors
constitutes a quorum of the board for the transaction of business, except to
adjourn as provided

                                        8



in Section 11 of this Article. Every act or decision done or made by a majority
of the directors present at a meeting duly held at which a quorum is present
shall be regarded as the act of the Board, unless a greater number be required
by law or by the Articles. A meeting at which a quorum is initially present may
continue to transact business notwithstanding the withdrawal of directors, if
any action taken is approved by at least a majority of the required quorum for
such meeting.

         Section 9.  PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE. Members
of the Board may participate in a meeting through use of conference telephone or
similar communications equipment, so long as all members participating in such
meeting can hear one another.

         Section 10. WAIVER OF NOTICE. Notice of a meeting need not be given to
any director who signs a waiver of notice or a consent to holding the meeting or
an approval of the minutes thereof, whether before or after the meeting, or who
attends the meeting without protesting, prior thereto or at its commencement,
the lack of notice to such director. All such waivers, consents and approvals
shall be filed with the corporate records or made a part of the minutes of the
meeting.

         Section 11. ADJOURNMENT. A majority of the directors present, whether
or not a quorum is present, may adjourn any directors' meeting to another time
and place. Notice of the time and place of holding an adjourned meeting need not
be given to absent directors if the time and place be fixed at the meeting
adjourned, except as provided in the next sentence. If the meeting is adjourned
for more than 24 hours, notice of any adjournment to another time or place shall
be given prior to the time of the adjourned meeting to the directors who were
not present at the time of the adjournment.

         Section 12. FEES AND COMPENSATION. Directors and members of committees
may receive such compensation, if any, for their services, and such
reimbursement for expenses, as may be fixed or determined by the Board. Section
13. ACTION WITHOUT MEETING. Any action required or permitted to be taken by the
Board may be taken without a meeting if all members of the Board shall
individually or collectively consent in writing to such action. Such consent or
consents shall have the same effect as a unanimous vote of the Board and shall
be filed with the minutes of the proceedings of the Board.

         Section 14. RIGHTS OF INSPECTION. Every director shall have the
absolute right at any reasonable time to inspect and copy all books, records and
documents of every kind and to inspect the physical properties of the
corporation and also of its subsidiary corporations, domestic or foreign. Such
inspection by a director may be made in person or by agent or attorney and
includes the right to copy and obtain extracts.

         Section 15. COMMITTEES. The Board may appoint one or more committees,
each consisting of two or more directors, and delegate to such committees any of
the authority of the Board except with respect to:

                                        9



         (a) The approval of any action for which the General Corporation Law
also requires shareholders' approval or approval of the outstanding shares;

         (b) The filling of vacancies in the Board or on any committee;

         (c) The fixing of compensation of the directors for serving on the
Board or on any committee;

         (d) The amendment or repeal of bylaws or the adoption of new bylaws;

         (e) The amendment or repeal of any resolution of the Board which by its
express term is not so amendable or repealable;

         (f) A distribution to the shareholders of the corporation except at a
rate or in a periodic amount or within a price range determined by the Board; or

         (g) The appointment of other committees of the Board or the members
thereof.

         Any such committee must be designated, and the members or alternate
members thereof appointed, by resolution adopted by a majority of the authorized
number of directors and any such committee may be designated an Executive
Committee or by such other name as the Board shall specify. Alternate members of
a committee may replace any absent member at any meeting of the committee. The
Board shall have the power to prescribe the manner in which proceedings of any
such committee shall be conducted. In the absence of any such prescription, such
committee shall have the power to prescribe the manner in which its proceedings
shall be conducted. Unless the Board or such committee shall otherwise provide,
the regular and special meetings and other actions of any such committee shall
be governed by the provisions of this Article applicable to meetings and actions
of the Board. Minutes shall be kept of each meeting of each committee.

                             ARTICLE IV. Officers.

         Section 1. OFFICERS. The officers of the corporation shall be a
President, a Secretary and a Chief Financial Officer. The corporation may also
have, at the discretion of the Board, a Chairman of the Board, one or more Vice
Presidents, one or more Assistant Secretaries, one or more Assistant Financial
Officers, and such other officers as may be elected or appointed in accordance
with the provisions of Section 3 of this Article.

         Section 2. ELECTION. The officers of the corporation, except such
officers as may be elected or appointed in accordance with the provisions of
Section 3 or Section 5 of this Article, shall be chosen annually by, and shall
serve at the pleasure of, the Board, and shall hold their respective offices
until their resignation, removal, or other disqualification from service, or
until their respective successors shall be elected.

         Section 3. SUBORDINATE OFFICERS. The Board may elect, and may empower
the President to appoint, such other officers as the business of the corporation
may

                                       10



require, each of whom shall hold office for such period, have such authority and
perform such duties as are provided in these Bylaws or as the Board may from
time to time determine.

         Section 4. REMOVAL AND RESIGNATION. Any officer may be removed, either
with or without cause, by the Board at any time or, except in the case of an
officer chosen by the Board, by any officer upon whom such power of removal may
be conferred by the Board. Any such removal shall be without prejudice to the
rights, if any, of the officer under any contract of employment of the officer.

         Any officer may resign at any time by giving written notice to the
corporation, but without prejudice to the rights, if any, of the corporation
under any contract to which the officer is a party. Any such resignation shall
take effect at the date of the receipt of such notice or at any later time
specified therein and, unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective.

         Section 5. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filled in the
manner prescribed in these Bylaws for regular election or appointment to such
office.

         Section 6. CHAIRMAN OF THE BOARD. The Chairman of the Board, if there
shall be such an officer, shall, if present, preside at all meetings of the
Board and exercise and perform such other powers and duties as may be from time
to time assigned by the Board.

         Section 7. PRESIDENT. Subject to such power, if any, as may be given by
the Board to the Chairman of the Board, if there be such an officer, the
President is the general manager and chief executive officer of the corporation
and has, subject to the control of the Board, general supervision, direction and
control of the business and officers of the corporation. The President shall
preside at all meetings of the shareholders and, in the absence of the Chairman
of the Board, or if there be none, at all meetings of the Board. The President
has the general powers and duties of management usually vested in the office of
president and general manager of a corporation and such other powers and duties
as may be prescribed by the Board.

         Section 8. VICE PRESIDENTS. In the absence or disability of the
President, the Vice Presidents in order of their rank as fixed by the Board or,
if not ranked, the Vice President designated by the Board, shall perform all the
duties of the President and, when so acting, shall have all the powers of, and
be subject to all the restrictions upon, the President. The Vice Presidents
shall have such other powers and perform such other duties as from time to time
may be prescribed for them respectively by the Board.

         Section 9. SECRETARY. The Secretary shall keep or cause to be kept, at
the principal executive office and such other place as the Board may order, a
book of minutes of all meetings of shareholders, the Board and its committees,
with the time and place of holding, whether regular or special, and if special,
how authorized, the notice thereof given, the names of those present at Board
and committee meetings, the number of shares present or represented at
shareholders' meetings, and the proceedings thereof. The Secretary shall keep,
or cause to be kept, a copy of the Bylaws of the corporation at the principal
executive office or business office in accordance with Section 213 of the
California General Corporation Law.

                                       11



         The Secretary shall keep, or cause to be kept, at the principal
executive office or at the office of the corporation's transfer agent or
registrar, if one be appointed, a share register, or a duplicate share register,
showing the names of the shareholders and their addresses, the number and
classes of shares held by each, the number and date of certificates issued for
the same, and the number and date of cancellation of every certificate
surrendered for cancellation.

         The Secretary shall give, or cause to be given, notice of all meetings
of the shareholders and of the Board and any committees thereof required by
these Bylaws or by law to be given, shall keep the seal of the corporation in
safe custody, and shall have such other powers and perform such other duties as
may be prescribed by the Board.

         Section 10. CHIEF FINANCIAL OFFICER. The Chief Financial Officer is the
chief financial officer of the corporation and shall keep and maintain, or cause
to be kept and maintained, adequate and correct accounts of the properties and
business transactions of the corporation, and shall send or cause to be sent to
the shareholders of the corporation such financial statements and reports as are
by law or these Bylaws required to be sent to them. The books of account shall
at all times be open to inspection by any director.

         The Chief Financial Officer shall deposit all moneys and other
valuables in the name and to the credit of the corporation with such
depositaries as may be designated by the Board. The Chief Financial Officer
shall disburse the funds of the corporation as may be ordered by the Board,
shall render to the President and the directors, whenever they request it, an
account of all transactions as Chief Financial Officer and of the financial
condition of the corporation, and shall have such other powers and perform such
other duties as may be prescribed by the Board.

                          ARTICLE V. Other Provisions.

         Section 1. INSPECTION OF CORPORATE RECORDS.

         (a) A shareholder or shareholders holding at least five percent in the
aggregate of the outstanding voting shares of the corporation or who hold at
least one percent of such voting shares and have filed a Schedule l4B with the
United States Securities and Exchange Commission relating to the election of
directors of the corporation shall have an absolute right to do either or both
of the following:

             (i)  Inspect and copy the record of shareholders' names and
     addresses and shareholdings during usual business hours upon five business
     days' prior written demand upon the corporation; or

             (ii) Obtain from the transfer agent, if any, for the corporation,
     upon five business days' prior written demand and upon the tender of its
     usual charges for such a list (the amount of which charges shall be stated
     to the shareholder by the transfer agent upon request), a list of the
     shareholders' names and addresses who are entitled to vote for the election
     of directors and their shareholdings, as of the most recent record date for
     which it has been compiled or as of a date specified by the shareholder
     subsequent to the date of demand.

                                       12



         (b) The record of shareholders shall also be open to inspection and
copying by any shareholder or holder of a voting trust certificate at any time
during usual business hours upon written demand on the corporation, for a
purpose reasonably related to such holder's interest as a shareholder or holder
of a voting trust certificate.

         (c) The accounting books and records and minutes of proceedings of the
shareholders and the Board and committees of the Board shall be open to
inspection upon written demand on the corporation of any shareholder or holder
of a voting trust certificate at any reasonable time during usual business
hours, for a purpose reasonably related to such holder's interests as a
shareholder or as a holder of such voting trust certificate.

         (d) Any inspection and copying under this Article may be made in person
or by agent or attorney.

         Section 2. INSPECTION OF BYLAWS. The corporation shall keep in its
principal executive office in the State of California, or if its principal
executive office is not in such State at its principal business office in such
State, the original or a copy of these Bylaws as amended to date, which shall be
open to inspection by shareholders at all reasonable times during office hours.
If the principal executive office of the corporation is located outside the
State of California and the corporation has no principal business office in such
state, it shall upon the written request of any shareholder furnish to such
shareholder a copy of these Bylaws as amended to date.

         Section 3. ENDORSEMENT OF DOCUMENTS; CONTRACTS. Subject to the
provisions of applicable law, any note, mortgage, evidence of indebtedness,
contract, share certificate, conveyance or other instrument in writing and any
assignment or endorsements thereof executed or entered into between the
corporation and any other person, when signed by the Chairman of the Board, the
President or any Vice President and the Secretary, any Assistant Secretary, the
Chief Financial Officer or any Assistant Chief Financial Officer of the
corporation shall be valid and binding on the corporation in the absence of
actual knowledge on the part of the other person that the signing officers had
no authority to execute the same. Any such instruments may be signed by any
other person or persons and in such manner as from time to time shall be
determined by the Board, and, unless so authorized by the Board, no officer,
agent or employee shall have any power or authority to bind the corporation by
any contract or engagement or to pledge its credit or to render it liable for
any purpose or amount.

         Section 4. CERTIFICATES OF STOCK. Every holder of shares of the
corporation shall be entitled to have a certificate signed in the name of the
corporation by the Chairman of the Board, the President or a Vice President and
by the Chief Financial Officer or an Assistant Chief Financial Officer or the
Secretary or an Assistant Secretary, certifying the number of shares and the
class or series of shares owned by the shareholder. Any or all of the signatures
on the certificate may be facsimile. If any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the corporation with the same effect
as if such person were an officer, transfer agent or registrar at the date of
issue.

                                       13



         Certificates for shares may be issued prior to full payment under such
restrictions and for such purposes as the Board may provide; provided, however,
that on any certificate issued to represent any partly paid shares, the total
amount of the consideration to be paid therefor and the amount paid thereon
shall be stated.

         Except as provided in this Section, no new certificate for shares shall
be issued in lieu of an old one unless the latter is surrendered and cancelled
at the same time. The Board may, however, if any certificate for shares is
alleged to have been lost, stolen or destroyed, authorize the issuance of a new
certificate in lieu thereof, and the corporation may require that the
corporation be given a bond or other adequate security sufficient to indemnify
it against any claim that may be made against it (including expense or
liability) on account of the alleged loss, theft or destruction of such
certificate or the issuance of such new certificate.

         Section 5. REPRESENTATION OF SHARES OF OTHER CORPORATIONS. The
President or any other officer or officers authorized by the Board or the
President are each authorized to vote, represent and exercise on behalf of the
corporation all rights incident to any and all shares of any other corporation
or corporations standing in the name of the corporation. The authority herein
granted may be exercised either by any such officer in person or by any other
person authorized so to do by proxy or power of attorney duly executed by said
officer.

         Section 6. STOCK PURCHASE PLANS. The corporation may adopt and carry
out a stock purchase plan or agreement or stock option plan or agreement
providing for the issue and sale for such consideration as may be fixed of its
unissued shares, or of issued shares acquired or to be acquired, to one or more
of the employees or directors of the corporation or of a subsidiary or to a
trustee on their behalf and for the payment for such shares in installments or
at one time, and may provide for aiding any such persons in paying for such
shares by compensation for services rendered, promissory notes or otherwise.

         Any such stock purchase plan or agreement or stock option plan or
agreement may include, among other features, the fixing of eligibility for
participation therein, the class and price of shares to be issued or sold under
the plan or agreement, the number of shares which may be subscribed for, the
method of payment therefor, the reservation of title until full payment
therefor, the effect of the termination of employment, an option or obligation
on the part of the corporation to repurchase the shares upon termination of
employment, restrictions upon transfer of the shares, the time limits of and
termination of the plan, and any other matters, not in violation of applicable
law, and may be included in the plan as approved or authorized by the Board or
any committee of the Board.

         Section 7. CONSTRUCTION AND DEFINITIONS. Unless the context otherwise
requires, the general provisions, rules of construction and definitions
contained in the General Provisions of the California Corporations Code and in
the California General Corporation Law shall govern the construction of these
Bylaws.

         Section 8. AMENDMENTS. These Bylaws may be amended or repealed either
by approval of the outstanding shares (as defined in Section 152 of the
California General Corporation Law) or by the approval of the Board; provided,
however, that after the issuance of

                                       14



shares, a bylaw specifying or changing a fixed number of directors or the
maximum or minimum number or changing from a fixed to a variable number of
directors or vice versa may only be adopted by approval of the outstanding
shares, and a bylaw reducing the fixed number or the minimum number of directors
to a number less than five shall be subject to the provisions of Section 212(a)
of the California General Corporation Law.

         Section 9. ANNUAL REPORT TO SHAREHOLDERS. The annual report to
shareholders referred to in Section 1501 of the California General Corporation
Law is expressly waived, but nothing herein shall be interpreted as prohibiting
the Board from issuing annual or other periodic reports to shareholders.

                          ARTICLE VI. Indemnification.

         Section 1. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Each person who
was or is a party or is threatened to be made a party to or is involved in any
threatened, pending or completed action, suit or proceeding, whether brought in
the name of the corporation or otherwise and whether of a civil, criminal,
administrative or investigative nature (hereinafter a "proceeding"), by reason
of the fact that he or she, or a person of whom he or she is the legal
representative, is or was a director or officer of the corporation or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is an alleged action or inaction in an official
capacity or in any other capacity while serving as a director or officer, shall,
subject to the terms of any agreement between the corporation and such person,
be indemnified and held harmless by the corporation to the fullest extent
permissible under California law and the corporation's Articles of
Incorporation, against all costs, charges, expenses, liabilities and losses
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement) reasonably incurred or suffered by
such person in connection therewith, and such indemnification shall continue as
to a person who has ceased to be a director or officer and shall inure to the
benefit of his or her heirs, executors and administrators; provided, however,
that the corporation shall indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such person only if
such proceeding (or part thereof) was authorized by the Board of Directors of
the corporation and provided, further, that no such person shall be indemnified
(i) except to the extent that the aggregate of losses to be indemnified exceeds
the amount of such losses for which the director or officer is paid pursuant to
any directors and officers liability insurance policy maintained by the
corporation; (ii) on account of any suit in which judgment is rendered against
such person for an accounting of profits made from the purchase or sale by such
person of securities of the corporation pursuant to the provisions of Section
16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar
provisions of any federal, state or local statutory law; (iii) for expenses,
judgments, funds, penalties or ERISA excise taxes resulting from such person's
conduct which is finally adjudged to have been willful misconduct, knowingly
fraudulent or deliberately dishonest; (iv) if a court of competent jurisdiction
finally determines that any indemnification hereunder is unlawful; (v) for acts
or omissions involving intentional misconduct or knowing and culpable violation
of law; (vi) for acts or omissions that the director or officer believes to be
contrary to the best interests of the corporation or its shareholders or that
involve the absence of good faith on the part of the director or officer; (vii)
for any transaction

                                       15



from which the director or officer derived an improper personal benefit; (viii)
for acts or omissions that show a reckless disregard for the director's or
officer's duty to the corporation or its shareholders in circumstances in which
the director or officer was aware, or should have been aware, in the ordinary
course of performing his duties, of a risk of serious injury to the corporation
or its shareholders; (ix) for acts or omissions that constitute an unexcused
pattern of inattention that amounts to an abdication of the director's or
officer's duties to the corporation or its shareholders; (x) for costs, charges,
expenses, liabilities and losses arising under Section 310 or 316 of the General
Corporation Law of California (the "Law"); and (xi) as to circumstances in which
indemnity is expressly prohibited by Section 317 of the Law. The right to
indemnification conferred in this Article shall be a contract right and shall
include the right to be paid by the corporation expenses incurred in defending
any proceeding in advance of its final disposition; provided, however, that if
the Law requires the payment of such expenses incurred by a director or officer
in his or her capacity as a director or officer (and not in any other capacity
in which service was or is rendered by such person while a director or officer,
including, without limitation, service to an employee benefit plan) in advance
of the final disposition of a proceeding, shall be made only upon delivery to
the corporation of an undertaking, by or on behalf of such director or officer,
to repay all amounts to the corporation unless it shall be determined ultimately
that such person is not entitled to be indemnified. No indemnity shall be
provided under this provision for any liability arising out of any act or
omission committed or occurring prior to the date an amendment containing this
provision is filed with the Secretary of State of California.

         Section 2. INDEMNIFICATION OF AGENTS. A person who was or is a party or
is threatened to be made a party to or is involved in any proceeding by reason
of the fact that he or she is or was an employee or agent of the corporation or
is or was serving at the request of the corporation as an employee or agent of
another enterprise, including service with respect to employee benefit plans,
whether the basis of such action is an alleged action or inaction in an official
capacity or in any other capacity while serving as an employee or agent, may,
subject to the terms of any agreement between the corporation and such person,
be indemnified and held harmless by the corporation to the fullest extent
permitted by California law and the corporation's Articles of Incorporation,
against all costs, charges, expenses, liabilities and losses (including
attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts
paid or to be paid in settlement) reasonably incurred or suffered by such person
in connection therewith. The immediately preceding sentence is not intended to
be and shall not be considered to confer a contract right on any employee or
agent of the corporation.

         Section 3. RIGHT OF DIRECTORS AND OFFICERS TO BRING SUIT. If a claim
under Section 1 of this Article is not paid in full by the corporation within 30
days after a written claim has been received by the corporation, the claimant
may at any time thereafter bring suit against the corporation to recover the
unpaid amount of the claim and, if successful in whole or in part, the claimant
shall also be entitled to be paid the expense of prosecuting such claim. It
shall be a defense to any such action (other than an action brought to enforce a
claim for expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any is required, has been
tendered to the corporation) that the claimant has failed to meet a standard of
conduct, if any, required to make it permissible under California law for the
corporation to indemnify the claimant for the amount claimed. Neither the
failure of the corporation (including its Board of Directors, independent

                                       16



legal counsel or its shareholders) to have made a determination prior to the
commencement of such action and indemnification of the claimant is permissible
in the circumstances because he or she has met such standard of conduct, nor an
actual determination by the corporation (including its Board of Directors,
independent legal counsel or its shareholders) that the claimant has not met
such standard of conduct, shall be a defense to the action or create a
presumption that the claimant has failed to meet such standard of conduct.

         Section 4. SUCCESSFUL DEFENSE. Notwithstanding any other provision of
this Article, to the extent that a director or officer has been successful on
the merits or otherwise (including the dismissal of an action without prejudice
or the settlement of a proceeding without admission of liability) in defense of
any proceeding referred to in Section 1 or, in defense of any claim, issue or
matter therein, he shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection therewith.

         Section 5. NON-EXCLUSIVITY OF RIGHTS. The right to indemnification
provided by this Article shall not be exclusive of any other right which any
person may have or hereafter acquire under any statute, bylaw, agreement, vote
of shareholders or disinterested directors or otherwise.

         Section 6. INSURANCE. The corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
corporation or another corporation, partnership, joint venture, trust or other
enterprise against any such expense, liability or loss, whether or not the
corporation would have the power to indemnify such person against such expense,
liability or loss under California law.

         Section 7. EXPENSES AS A WITNESS. To the extent that any director,
officer, employee or agent of the corporation is by reason of such position, or
a position with another entity at the request of the corporation, a witness in
any action, suit or proceeding, he may be indemnified against all costs and
expenses actually and reasonably incurred by him or her or on his or her behalf
in connection therewith.

         Section 8. INDEMNITY AGREEMENTS. The corporation may enter into
agreements with any director, officer, employee or agent of the corporation
providing for indemnification to the fullest extent permissible under California
law and the corporation's Articles of Incorporation.

                                       17

EX-3.6

                                                                     Exhibit 3.6

                            ARTICLES OF INCORPORATION

                                       OF

                               KZJL LICENSE CORP.

                                      Name

           One: The name of the corporation is KZJL License Corp.

                                     Purpose

           Two: The purpose of the corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of California other than the banking business, the trust company business or
the practice of a profession permitted to be incorporated by the California
Corporations Code.

                                Agent for Service

           Three: The name and address of the corporation's initial agent for
service of process are:

                                 Lenard Liberman
                            5724 Hollywood Boulevard
                           Hollywood, California 90028

                                Authorized Shares

           Four: The total number of shares of all classes of stock which the
corporation shall have the authority to issue is one thousand (1,000) shares of
Common Stock, par value $.01 per share.

                      Limitation on Liability of Directors
                        and Authority to Indemnify Agents

           Five: The liability of directors of the corporation for monetary
damages shall be eliminated to the fullest extent permissible under California
law.

           The corporation is authorized to provide indemnification of agents
(as defined in Section 317 of the California Corporations Code) for breach of
duty to the corporation and its shareholders through bylaw provisions,
agreements with agents, vote of shareholders or disinterested directors, or
otherwise, in excess of the indemnification otherwise permitted by Section 317
of the California Corporations Code, subject only to the applicable limits set
forth in Section 204 of the California Corporations Code.



           The undersigned declares that the undersigned has executed these
Articles of Incorporation and that this instrument is the act and deed of the
undersigned.


DATED:  October 16, 2000



                                                     /s/ Regina Braman
                                                  ------------------------------
                                                  Regina Braman

                                       2

EX-3.7

                                                                     Exhibit 3.7

                                     BYLAWS

                                       of


                               KZJL LICENSE CORP.,
                            a California corporation



                                      INDEX



                                                                                  Page
                                                                                  ----
                                                                               
ARTICLE I - Offices.

     Section 1.    PRINCIPAL EXECUTIVE OFFICE ................................      1
     Section 2.    OTHER OFFICES .............................................      1

ARTICLE II - Shareholders.

     Section 1.    PLACE OF MEETINGS .........................................      1
     Section 2.    ANNUAL MEETINGS ...........................................      1
     Section 3.    SPECIAL MEETINGS ..........................................      1
     Section 4.    NOTICE OF ANNUAL OR SPECIAL MEETINGS ......................      1
     Section 5.    QUORUM ....................................................      2
     Section 6.    ADJOURNED MEETINGS AND NOTICE THEREOF .....................      2
     Section 7.    VOTING ....................................................      2
     Section 8.    RECORD DATE ...............................................      4
     Section 9.    CONSENT OF ABSENTEES ......................................      5
     Section 10.   ACTION WITHOUT MEETING ....................................      5
     Section 11.   PROXIES ...................................................      5
     Section 12.   INSPECTORS OF ELECTION ....................................      6
     Section 13.   CONDUCT OF MEETING ........................................      6

ARTICLE III - Directors.

     Section 1.    POWERS ....................................................      6
     Section 2.    NUMBER OF DIRECTORS .......................................      7
     Section 3.    ELECTION AND TERM OF OFFICE ...............................      7
     Section 4.    VACANCIES .................................................      7
     Section 5.    PLACE OF MEETING ..........................................      8
     Section 6.    REGULAR MEETINGS ..........................................      8
     Section 7.    SPECIAL MEETINGS ..........................................      8
     Section 8.    QUORUM ....................................................      8
     Section 9.    PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE .........      9
     Section 10.   WAIVER OF NOTICE ..........................................      9
     Section 11.   ADJOURNMENT ...............................................      9
     Section 12.   FEES AND COMPENSATION .....................................      9
     Section 13.   ACTION WITHOUT MEETING ....................................      9
     Section 14.   RIGHTS OF INSPECTION ......................................      9
     Section 15.   COMMITTEES ................................................      9

ARTICLE IV - Officers.

     Section 1.    OFFICERS ..................................................     10
     Section 2.    ELECTION ..................................................     10
     Section 3.    SUBORDINATE OFFICERS ......................................     10


                                        i



                                                                               
     Section 4.    REMOVAL AND RESIGNATION ...................................     11
     Section 5.    VACANCIES .................................................     11
     Section 6.    CHAIRMAN OF THE BOARD .....................................     11
     Section 7.    PRESIDENT .................................................     11
     Section 8.    VICE PRESIDENTS ...........................................     11
     Section 9.    SECRETARY .................................................     11
     Section 10.   CHIEF FINANCIAL OFFICER ...................................     12

ARTICLE V - Other Provisions.

     Section 1.    INSPECTION OF CORPORATE RECORDS ...........................     12
     Section 2.    INSPECTION OF BYLAWS ......................................     13
     Section 3.    ENDORSEMENT OF DOCUMENTS; CONTRACTS .......................     13
     Section 4.    CERTIFICATES OF STOCK .....................................     13
     Section 5.    REPRESENTATION OF SHARES OF OTHER CORPORATIONS ............     14
     Section 6.    STOCK PURCHASE PLANS ......................................     14
     Section 7.    CONSTRUCTION AND DEFINITIONS ..............................     14
     Section 8.    AMENDMENTS ................................................     14
     Section 9.    ANNUAL REPORT TO SHAREHOLDERS .............................     15

ARTICLE VI - Indemnification.

     Section 1.    INDEMNIFICATION OF DIRECTORS AND OFFICERS .................     15
     Section 2.    INDEMNIFICATION OF AGENTS .................................     16
     Section 3.    RIGHT OF DIRECTORS AND OFFICERS TO BRING SUIT .............     16
     Section 4.    SUCCESSFUL DEFENSE ........................................     17
     Section 5.    NON-EXCLUSIVITY OF RIGHTS .................................     17
     Section 6.    INSURANCE .................................................     17
     Section 7.    EXPENSES AS A WITNESS .....................................     17
     Section 8.    INDEMNITY AGREEMENTS ......................................     17



                                       ii



                                     BYLAWS

                           for the regulation, except
                       as otherwise provided by statute or
                         its Articles of Incorporation,

                                       of

                               KZJL LICENSE CORP.,
                            a California corporation



                               ARTICLE I. Offices.

          Section 1. PRINCIPAL EXECUTIVE OFFICE. The corporation's principal
executive office shall be fixed and located at such place as the Board of
Directors (herein called the "Board") shall determine. The Board is granted full
power and authority to change said principal executive office from one location
to another.

          Section 2. OTHER OFFICES. Branch or subordinate offices may be
established at any time by the Board at any place or places.

                           ARTICLE II. Shareholders.

          Section 1. PLACE OF MEETINGS. Meetings of shareholders shall be held
either at the principal executive office of the corporation or at any other
place within or without the State of California which may be designated either
by the Board or by the written consent of all persons entitled to vote thereat,
given either before or after the meeting and filed with the Secretary.

          Section 2. ANNUAL MEETINGS. The annual meetings of shareholders shall
be held on such date and at such time as may be fixed by the Board.

          Section 3. SPECIAL MEETINGS. Special meetings of the shareholders may
be called at any time by the Board, the Chairman of the Board, the President, or
by the holders of shares entitled to cast not less than ten percent of the votes
at such meeting. Upon request in writing to the Chairman of the Board, the
President, any Vice President or the Secretary by any person (other than the
Board) entitled to call a special meeting of shareholders, the officer forthwith
shall cause notice to be given to the shareholders entitled to vote that a
meeting will be held at a time requested by the person or persons calling the
meeting, not less than thirty-five nor more than sixty days after the receipt of
the request. If the notice is not given within twenty days after receipt of the
request, the persons entitled to call the meeting may give the notice.

          Section 4. NOTICE OF ANNUAL OR SPECIAL MEETINGS. Written notice of
each annual or special meeting of shareholders shall be given not less than ten
nor more than sixty days before the date of the meeting to each shareholder
entitled to vote thereat. Such notice shall state the place, date and hour of
the meeting and (i) in the case of a special meeting,



the general nature of the business to be transacted, and no other business may
be transacted, or (ii) in the case of the annual meeting, those matters which
the Board, at the time of the mailing of the notice, intends to present for
action by the shareholders, but, subject to the provisions of applicable law,
any proper matter may be presented at the meeting for such action. The notice of
any meeting at which directors are to be elected shall include the names of
nominees intended at the time of the notice to be presented by management for
election.

          Notice of a shareholders' meeting shall be given either personally or
by mail or by other means of written communication, addressed to the shareholder
at the address of such shareholder appearing on the books of the corporation or
given by the shareholder to the corporation for the purpose of notice, or, if no
such address appears or is given, at the place where the principal executive
office of the corporation is located or by publication at least once in a
newspaper of general circulation in the county in which the principal executive
office is located. Notice by mail shall be deemed to have been given at the time
a written notice is deposited in the United States mails, postage prepaid. Any
other written notice shall be deemed to have been given at the time it is
personally delivered to the recipient or is delivered to a common carrier for
transmission, or actually transmitted by the person giving the notice by
electronic means, to the recipient.

          Section 5. QUORUM. A majority of the shares entitled to vote,
represented in person or by proxy, shall constitute a quorum at any meeting of
shareholders. If a quorum is present, the affirmative vote of a majority of the
shares represented and voting at the meeting (which shares voting affirmatively
also constitute at least a majority of the required quorum) shall be the act of
the shareholders, unless the vote of a greater number or voting by classes is
required by law or by the Articles, except as provided in the following
sentence. The shareholders present at a duly called or held meeting at which a
quorum is present may continue to do business until adjournment, notwithstanding
the withdrawal of enough shareholders to leave less than a quorum, if any action
taken (other than adjournment) is approved by at least a majority of the shares
required to constitute a quorum.

          Section 6. ADJOURNED MEETINGS AND NOTICE THEREOF. Any Shareholders'
meeting, whether or not a quorum is present, may be adjourned from time to time
by the vote of a majority of the shares represented either in person or by
proxy, but in the absence of a quorum (except as provided in Section 5 of this
Article) no other business may be transacted at such meeting.

          It shall not be necessary to give any notice of the time and place of
the adjourned meeting or of the business to be transacted thereat, other than by
announcement at the meeting at which such adjournment is taken; provided,
however, when any shareholders' meeting is adjourned for more than 45 days or,
if after adjournment a new record date is fixed for the adjourned meeting,
notice of the adjourned meeting shall be given as in the case of an original
meeting.

          Section 7. VOTING. The shareholders entitled to notice of any meeting
or to vote at any such meeting shall be only persons in whose name shares stand
on the stock records of the corporation on the record date determined in
accordance with Section 8 of this Article.

                                        2



          Subject to the following sentence and to the provisions of Section 708
of the California General Corporation Law, every shareholder entitled to vote at
any election of directors may cumulate such shareholder's votes and give one
candidate a number of votes equal to the number of directors to be elected
multiplied by the number of votes to which the shareholder's shares are
entitled, or distribute the shareholder's votes on the same principle among as
many candidates as the shareholder thinks fit. No shareholder shall be entitled
to cumulate votes for any candidate or candidates pursuant to the preceding
sentence unless such candidate or candidates' names have been placed in
nomination prior to the voting and the shareholder has given notice at the
meeting prior to the voting of the shareholder's intention to cumulate the
shareholder's votes. If any one shareholder has given such notice, all
shareholders may cumulate their votes for candidates in nomination.

          Elections need not be by ballot, provided, however, that all elections
for directors must be by ballot upon demand made by a shareholder at the meeting
and before the voting begins.

          In any election of directors, the candidates receiving the highest
number of votes of the shares entitled to be voted for them up to the number of
directors to be elected by such shares are elected.

          Voting shall in all cases be subject to the provisions of Chapter 7 of
the California General Corporation Law, and to the following provisions:

          (a)  Subject to clause (g), shares held by an administrator, executor,
guardian, conservator or custodian may be voted by such holder either in person
or by proxy, without a transfer of such shares into the holder's name; and
shares standing in the name of a trustee may be voted by the trustee, either in
person or by proxy, but no trustee shall be entitled to vote shares held by such
trustee without a transfer of such shares into the trustee's name.

          (b)  Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into the receiver's name if authority
to do so is contained in the order of the court by which such receiver was
appointed.

          (c)  Subject to the provisions of Section 705 of the California
General Corporation Law and except where otherwise agreed in writing between the
parties, a shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.

          (d)  Shares standing in the name of a minor may be voted and the
corporation may treat all rights incident thereto as exercisable by the minor,
in person or by proxy, whether or not the corporation has notice, actual or
constructive, of the nonage, unless a guardian of the minor's property has been
appointed and written notice of such appointment given to the corporation.

          (e)  Shares standing in the name of another corporation, domestic or
foreign, may be voted by such officer, agent or proxyholder as the bylaws of
such other corporation may

                                        3



prescribe or, in the absence of such provision, as the Board of Directors of
such other corporation may determine or, in the absence of such determination,
by the chairman of the board, president or any vice president of such other
corporation, or by any other person authorized to do so by the chairman of the
board, president or any vice president of such other corporation. Shares which
are purported to be voted or any proxy purported to be executed in the name of a
corporation (whether or not any title of the person signing is indicated) shall
be presumed to be voted or the proxy executed in accordance with the provisions
of this clause, unless the contrary is shown.

          (f)  Shares of the corporation owned by any subsidiary shall not be
entitled to vote on any matter.

          (g)  Shares held by the corporation in a fiduciary capacity, and
shares of the issuing corporation held in a fiduciary capacity by any
subsidiary, shall not be entitled to vote on any matter, except to the extent
that the settlor or beneficial owner possesses and exercises a right to vote or
to give the corporation binding instructions as to how to vote such shares.

          (h)  If shares stand of record in the names of two or more persons,
whether fiduciaries, members of a partnership, joint tenants, tenants in common,
husband and wife as community property, tenants by the entirety, voting
trustees, persons entitled to vote under a shareholder voting agreement or
otherwise, or if two or more persons (including proxyholders) have the same
fiduciary relationship respecting the same shares, unless the secretary of the
corporation is given written notice to the contrary and is furnished with a copy
of the instrument or order appointing them or creating the relationship wherein
it is so provided, their acts with respect to voting shall have the following
effect:

               (i)   If only one votes, such act binds all;

               (ii)  If more than one vote, the act of the majority so voting
     binds all;

               (iii) If more than one vote, but the vote is evenly split on any
     particular matter, each faction may vote the securities in question
     proportionately.

If the instrument so filed or the registration of the shares shows that any such
tenancy is held in unequal interests, a majority or even split for the purpose
of this section shall be a majority or even split in interest.

          Section 8. RECORD DATE. The Board may fix, in advance, a record date
for the determination of the shareholders entitled to notice of any meeting or
to vote or entitled to receive payment of any dividend or other distribution, or
any allotment of rights, or to exercise rights in respect of any other lawful
action. The record date so fixed shall be not more than 60 days nor less than 10
days prior to the date of the meeting nor more than 60 days prior to any other
action. When a record date is so fixed, only shareholders of record on that date
are entitled to notice of and to vote at the meeting or to receive the dividend,
distribution, or allotment of rights, or to exercise the rights, as the case may
be, notwithstanding any transfer of shares on the books of the corporation after
the record date. A determination of shareholders of record entitled to notice of
or to vote at a meeting of shareholders shall apply to any adjournment of the
meeting unless the Board fixes a new record date for the adjourned meeting. The
Board shall fix a new record date if the meeting is adjourned for more than
forty-five days.

                                        4



          If no record date is fixed by the Board, the record date for
determining shareholders entitled to notice of or to vote at a meeting of
shareholders shall be at the close of business on the business day next
preceding the day on which notice is given or, if notice is waived, at the close
of business on the business day next preceding the day on which the meeting is
held. The record date for determining shareholders for any purpose other than
set forth in this Section 8 or Section 10 of this Article shall be at the close
of business on the day on which the Board adopts the resolution relating
thereto, or the sixtieth day prior to the date of such other action, whichever
is later.

          Section 9.  CONSENT OF ABSENTEES. The transactions of any meeting of
shareholders, however called and noticed, and wherever held, are as valid as
though had at a meeting duly held after regular call and notice, if a quorum is
present either in person or by proxy, and if, either before or after the
meeting, each of the persons entitled to vote, not present in person or by
proxy, signs a written waiver of notice, or a consent to the holding of the
meeting or an approval of the minutes thereof. All such waivers, consents or
approvals shall be filed with the corporate records or made a part of the
minutes of the meeting. Attendance of a person at a meeting shall constitute a
waiver of notice of and presence at such meeting, except when the person
objects, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened and except that
attendance at a meeting is not a waiver of any right to object to the
consideration of matters required by the California General Corporation Law to
be included in the notice but not so included, if such objection is expressly
made at the meeting. Neither the business to be transacted at nor the purpose of
any regular or special meeting of shareholders need be specified in any written
waiver of notice, consent to the holding of the meeting or approval of the
minutes thereof, except as provided in Section 601(f) of the California General
Corporation Law.

          Section 10. ACTION WITHOUT MEETING. Subject to Section 603 of the
California General Corporation Law, any action which, under any provision of the
California General Corporation Law, may be taken at any annual or special
meeting of shareholders, may be taken without a meeting and without prior notice
if a consent in writing, setting forth the action so taken, shall be signed by
the holders of outstanding shares having not less than the minimum number of
votes that would be necessary to authorize or take such action at a meeting at
which all shares entitled to vote thereon were present and voted. Unless a
record date for voting purposes be fixed as provided in Section 8 of this
Article, the record date for determining shareholders entitled to give consent
pursuant to this Section 10, when no prior action by the Board has been taken,
shall be the day on which the first written consent is given.

          Section 11. PROXIES. Every person entitled to vote shares has the
right to do so either in person or by one or more persons authorized by a
written proxy executed by such shareholder and filed with the Secretary. Any
proxy duly executed is not revoked and continues in full force and effect until
revoked by the person executing it prior to the vote pursuant thereto. Such
revocation may be effected either, (i) by a writing delivered to the Secretary
of the Corporation stating that the proxy is revoked, (ii) by a subsequent proxy
executed by the person executing the prior proxy and presented to the meeting,
or (iii) by attendance at the meeting and voting in person by the person
executing the proxy; provided, however, that no proxy shall be valid after the
expiration of eleven months from the date of its execution unless otherwise
provided in the proxy.

                                        5



          Section 12. INSPECTORS OF ELECTION. In advance of any meeting of
shareholders, the Board may appoint inspectors of election to act at such
meeting and any adjournment thereof. If inspectors of election be not so
appointed, or if any persons so appointed fail to appear or refuse to act, the
chairman of any such meeting may, and on the request of any shareholder or
shareholder's proxy shall, make such appointment at the meeting. The number of
inspectors shall be either one or three. If appointed at a meeting on the
request of one or more shareholders or proxies, the majority of shares present
shall determine whether one or three inspectors are to be appointed.

          The duties of such inspectors shall be as prescribed by Section 707(b)
of the California General Corporation Law and shall include: determining the
number of shares outstanding and the voting power of each; determining the
shares represented at the meeting; determining the existence of a quorum;
determining the authenticity, validity and effect of proxies; receiving votes,
ballots or consents; hearing and determining all challenges and questions in any
way arising in connection with the right to vote; counting and tabulating all
votes or consents; determining when the polls shall close; determining the
result; and doing such acts as may be proper to conduct the election or vote
with fairness to all shareholders. If there are three inspectors of election,
the decision, act or certificate of a majority is effective in all respects as
the decision, act or certificate of all.

          Section 13. CONDUCT OF MEETING. The President shall preside as
chairman at all meetings of the shareholders. The chairman shall conduct each
such meeting in a businesslike and fair manner, but shall not be obligated to
follow any technical, formal or parliamentary rules or principles of procedure.
The chairman's rulings on procedural matters shall be conclusive and binding on
all shareholders, unless at the time of a ruling a request for a vote is made to
the shareholders holding shares entitled to vote and which are represented in
person or by proxy at the meeting, in which case the decision of a majority of
such shares shall be conclusive and binding on all shareholders. Without
limiting the generality of the foregoing, the chairman shall have all of the
powers usually vested in the chairman of a meeting of shareholders.

                            ARTICLE III. Directors.

          Section 1.  POWERS. Subject to limitations of the Articles, of these
Bylaws and of the California General Corporation Law relating to action required
to be approved by the shareholders or by the outstanding shares, the business
and affairs of the corporation shall be managed and all corporate powers shall
be exercised by or under the direction of the Board. The Board may delegate the
management of the day-to-day operation of the business of the corporation to a
management company or other person provided that the business and affairs of the
corporation shall be managed and all corporate powers shall be exercised under
the ultimate direction of the Board. Without prejudice to such general powers,
but subject to the same limitations, it is hereby expressly declared that the
Board shall have the following powers in addition to the other powers enumerated
in these Bylaws:

          (a)  To select and remove all the other officers, agents and employees
of the corporation, prescribe the powers and duties for them as may not be
inconsistent with law, the

                                        6



Articles or these Bylaws, fix their compensation and require from them security
for faithful service.

          (b)  To conduct, manage and control the affairs and business of the
corporation and to make such rules and regulations therefor not inconsistent
with law, the Articles or these Bylaws, as they may deem best.

          (c)  To adopt, make and use a corporate seal, and to prescribe the
forms of certificates of stock, and to alter the form of such seal and of such
certificates from time to time as they may deem best.

          (d)  To authorize the issuance of shares of stock of the corporation
from time to time, upon such terms and for such consideration as may be lawful.

          (e)  To borrow money and incur indebtedness for the purposes of the
corporation, and to cause to be executed and delivered therefor, in the
corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages,
pledges, hypothecations or other evidences of debt and securities therefor.

          Section 2. NUMBER OF DIRECTORS. The Board shall consist of one or more
members. The exact number shall be determined from time to time by resolution of
the Board. Directors shall be elected at the annual meeting of shareholders and
each director shall serve until such person's successor is elected and qualified
or until such person's death, retirement, resignation or removal.

          Section 3. ELECTION AND TERM OF OFFICE. The directors shall be elected
at each annual meeting of the shareholders, but if any such annual meeting is
not held or the directors are not elected thereat, the directors may be elected
at any special meeting of shareholders held for that purpose. Each director
shall hold office until the next annual meeting and until a successor has been
elected and qualified.

          Section 4. VACANCIES. Any director may resign effective upon giving
written notice to the Chairman of the Board, the President, the Secretary or the
Board, unless the notice specifies a later time for the effectiveness of such
resignation. If the resignation is effective at a future time, a successor may
be elected to take office when the resignation becomes effective.

          Vacancies in the Board, except those existing as a result of a removal
of a director, may be filled by a majority of the remaining directors, though
less than a quorum, or by a sole remaining director, and each director so
elected shall hold office until the next annual meeting and until such
director's successor has been elected and qualified.

          A vacancy or vacancies in the Board shall be deemed to exist in case
of the death, resignation or removal of any director, or if the authorized
number of directors be increased, or if the shareholders fail, at any annual or
special meeting of shareholders at which any director or directors are elected,
to elect the full authorized number of directors to be voted for at that
meeting.

                                        7



          The Board may declare vacant the office of a director who has been
declared of unsound mind by an order of court or convicted of a felony.

          The shareholders may elect a director or directors at any time to fill
any vacancy or vacancies not filled by the directors. Any such election by
written consent other than to fill a vacancy created by removal requires the
consent of a majority of the outstanding shares entitled to vote. Any such
election by written consent to fill a vacancy created by removal requires
unanimous consent.

          No reduction of the authorized number of directors shall have the
effect of removing any director prior to the expiration of the director's term
of office.

          Section 5. PLACE OF MEETING. Regular or special meetings of the Board
shall be held at any place within or without the State of California which has
been designated from time to time by the Board. In the absence of such
designation, regular meetings shall be held at the principal executive office of
the corporation.

          Section 6. REGULAR MEETINGS. Immediately following each annual meeting
of shareholders the Board shall hold a regular meeting for the purpose of
organization, election of officers and the transaction of other business.

          Other regular meetings of the Board shall be held without call on such
dates and at such times as may be fixed by the Board. Call and notice of all
regular meetings of the Board are hereby dispensed with.

          Section 7. SPECIAL MEETINGS. Special meetings of the Board for any
purpose or purposes may be called at any time by the Chairman of the Board, the
President, any Vice President, the Secretary or by any two directors.

          Special meetings of the Board shall be held upon four days' written
notice or forty-eight hours' notice given personally or by telephone, telegraph,
telex or other similar means of communication. Any such notice shall be
addressed or delivered to each director at such director's address as it is
shown upon the records of the corporation or as may have been given to the
corporation by the director for purposes of notice or, if such address is not
shown on such records or is not readily ascertainable, at the place in which the
meetings of the directors are regularly held.

          Notice by mail shall be deemed to have been given at the time a
written notice is deposited in the United States mails, postage prepaid. Any
other written notice shall be deemed to have been given at the time it is
personally delivered to the recipient or is delivered to a common carrier for
transmission, or actually transmitted by the person giving the notice by
electronic means, to the recipient. Oral notice shall be deemed to have been
given at the time it is communicated, in person or by telephone or wireless, to
the recipient or to a person at the office of the recipient who the person
giving the notice has reason to believe will promptly communicate it to the
recipient.

          Section 8. QUORUM. A majority of the authorized number of directors
constitutes a quorum of the board for the transaction of business, except to
adjourn as provided

                                        8



in Section 11 of this Article. Every act or decision done or made by a majority
of the directors present at a meeting duly held at which a quorum is present
shall be regarded as the act of the Board, unless a greater number be required
by law or by the Articles. A meeting at which a quorum is initially present may
continue to transact business notwithstanding the withdrawal of directors, if
any action taken is approved by at least a majority of the required quorum for
such meeting.

          Section 9.  PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE. Members
of the Board may participate in a meeting through use of conference telephone or
similar communications equipment, so long as all members participating in such
meeting can hear one another.

          Section 10. WAIVER OF NOTICE. Notice of a meeting need not be given to
any director who signs a waiver of notice or a consent to holding the meeting or
an approval of the minutes thereof, whether before or after the meeting, or who
attends the meeting without protesting, prior thereto or at its commencement,
the lack of notice to such director. All such waivers, consents and approvals
shall be filed with the corporate records or made a part of the minutes of the
meeting.

          Section 11. ADJOURNMENT. A majority of the directors present, whether
or not a quorum is present, may adjourn any directors' meeting to another time
and place. Notice of the time and place of holding an adjourned meeting need not
be given to absent directors if the time and place be fixed at the meeting
adjourned, except as provided in the next sentence. If the meeting is adjourned
for more than 24 hours, notice of any adjournment to another time or place shall
be given prior to the time of the adjourned meeting to the directors who were
not present at the time of the adjournment.

          Section 12. FEES AND COMPENSATION. Directors and members of committees
may receive such compensation, if any, for their services, and such
reimbursement for expenses, as may be fixed or determined by the Board.

          Section 13. ACTION WITHOUT MEETING. Any action required or permitted
to be taken by the Board may be taken without a meeting if all members of the
Board shall individually or collectively consent in writing to such action. Such
consent or consents shall have the same effect as a unanimous vote of the Board
and shall be filed with the minutes of the proceedings of the Board.

          Section 14. RIGHTS OF INSPECTION. Every director shall have the
absolute right at any reasonable time to inspect and copy all books, records and
documents of every kind and to inspect the physical properties of the
corporation and also of its subsidiary corporations, domestic or foreign. Such
inspection by a director may be made in person or by agent or attorney and
includes the right to copy and obtain extracts.

          Section 15. COMMITTEES. The Board may appoint one or more committees,
each consisting of two or more directors, and delegate to such committees any of
the authority of the Board except with respect to:

                                        9



          (a)  The approval of any action for which the General Corporation Law
also requires shareholders' approval or approval of the outstanding shares;

          (b)  The filling of vacancies in the Board or on any committee;

          (c)  The fixing of compensation of the directors for serving on the
Board or on any committee;

          (d)  The amendment or repeal of bylaws or the adoption of new bylaws;

          (e)  The amendment or repeal of any resolution of the Board which by
its express term is not so amendable or repealable;

          (f)  A distribution to the shareholders of the corporation except at a
rate or in a periodic amount or within a price range determined by the Board; or

          (g)  The appointment of other committees of the Board or the members
thereof.

          Any such committee must be designated, and the members or alternate
members thereof appointed, by resolution adopted by a majority of the authorized
number of directors and any such committee may be designated an Executive
Committee or by such other name as the Board shall specify. Alternate members of
a committee may replace any absent member at any meeting of the committee. The
Board shall have the power to prescribe the manner in which proceedings of any
such committee shall be conducted. In the absence of any such prescription, such
committee shall have the power to prescribe the manner in which its proceedings
shall be conducted. Unless the Board or such committee shall otherwise provide,
the regular and special meetings and other actions of any such committee shall
be governed by the provisions of this Article applicable to meetings and actions
of the Board. Minutes shall be kept of each meeting of each committee.

                             ARTICLE IV. Officers.

          Section 1. OFFICERS. The officers of the corporation shall be a
President, a Secretary and a Chief Financial Officer. The corporation may also
have, at the discretion of the Board, a Chairman of the Board, one or more Vice
Presidents, one or more Assistant Secretaries, one or more Assistant Financial
Officers, and such other officers as may be elected or appointed in accordance
with the provisions of Section 3 of this Article.

          Section 2. ELECTION. The officers of the corporation, except such
officers as may be elected or appointed in accordance with the provisions of
Section 3 or Section 5 of this Article, shall be chosen annually by, and shall
serve at the pleasure of, the Board, and shall hold their respective offices
until their resignation, removal, or other disqualification from service, or
until their respective successors shall be elected.

          Section 3. SUBORDINATE OFFICERS. The Board may elect, and may empower
the President to appoint, such other officers as the business of the corporation
may

                                       10



require, each of whom shall hold office for such period, have such authority and
perform such duties as are provided in these Bylaws or as the Board may from
time to time determine.

          Section 4. REMOVAL AND RESIGNATION. Any officer may be removed, either
with or without cause, by the Board at any time or, except in the case of an
officer chosen by the Board, by any officer upon whom such power of removal may
be conferred by the Board. Any such removal shall be without prejudice to the
rights, if any, of the officer under any contract of employment of the officer.

          Any officer may resign at any time by giving written notice to the
corporation, but without prejudice to the rights, if any, of the corporation
under any contract to which the officer is a party. Any such resignation shall
take effect at the date of the receipt of such notice or at any later time
specified therein and, unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective.

          Section 5. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filled in the
manner prescribed in these Bylaws for regular election or appointment to such
office.

          Section 6. CHAIRMAN OF THE BOARD. The Chairman of the Board, if there
shall be such an officer, shall, if present, preside at all meetings of the
Board and exercise and perform such other powers and duties as may be from time
to time assigned by the Board.

          Section 7. PRESIDENT. Subject to such power, if any, as may be given
by the Board to the Chairman of the Board, if there be such an officer, the
President is the general manager and chief executive officer of the corporation
and has, subject to the control of the Board, general supervision, direction and
control of the business and officers of the corporation. The President shall
preside at all meetings of the shareholders and, in the absence of the Chairman
of the Board, or if there be none, at all meetings of the Board. The President
has the general powers and duties of management usually vested in the office of
president and general manager of a corporation and such other powers and duties
as may be prescribed by the Board.

          Section 8. VICE PRESIDENTS. In the absence or disability of the
President, the Vice Presidents in order of their rank as fixed by the Board or,
if not ranked, the Vice President designated by the Board, shall perform all the
duties of the President and, when so acting, shall have all the powers of, and
be subject to all the restrictions upon, the President. The Vice Presidents
shall have such other powers and perform such other duties as from time to time
may be prescribed for them respectively by the Board.

          Section 9. SECRETARY. The Secretary shall keep or cause to be kept, at
the principal executive office and such other place as the Board may order, a
book of minutes of all meetings of shareholders, the Board and its committees,
with the time and place of holding, whether regular or special, and if special,
how authorized, the notice thereof given, the names of those present at Board
and committee meetings, the number of shares present or represented at
shareholders' meetings, and the proceedings thereof. The Secretary shall keep,
or cause to be kept, a copy of the Bylaws of the corporation at the principal
executive office or business office in accordance with Section 213 of the
California General Corporation Law.

                                       11



          The Secretary shall keep, or cause to be kept, at the principal
executive office or at the office of the corporation's transfer agent or
registrar, if one be appointed, a share register, or a duplicate share register,
showing the names of the shareholders and their addresses, the number and
classes of shares held by each, the number and date of certificates issued for
the same, and the number and date of cancellation of every certificate
surrendered for cancellation.

          The Secretary shall give, or cause to be given, notice of all meetings
of the shareholders and of the Board and any committees thereof required by
these Bylaws or by law to be given, shall keep the seal of the corporation in
safe custody, and shall have such other powers and perform such other duties as
may be prescribed by the Board.

          Section 10. CHIEF FINANCIAL OFFICER. The Chief Financial Officer is
the chief financial officer of the corporation and shall keep and maintain, or
cause to be kept and maintained, adequate and correct accounts of the properties
and business transactions of the corporation, and shall send or cause to be sent
to the shareholders of the corporation such financial statements and reports as
are by law or these Bylaws required to be sent to them. The books of account
shall at all times be open to inspection by any director.

          The Chief Financial Officer shall deposit all moneys and other
valuables in the name and to the credit of the corporation with such
depositaries as may be designated by the Board. The Chief Financial Officer
shall disburse the funds of the corporation as may be ordered by the Board,
shall render to the President and the directors, whenever they request it, an
account of all transactions as Chief Financial Officer and of the financial
condition of the corporation, and shall have such other powers and perform such
other duties as may be prescribed by the Board.

                          ARTICLE V. Other Provisions.

          Section 1. INSPECTION OF CORPORATE RECORDS.

          (a)  A shareholder or shareholders holding at least five percent in
the aggregate of the outstanding voting shares of the corporation or who hold at
least one percent of such voting shares and have filed a Schedule l4B with the
United States Securities and Exchange Commission relating to the election of
directors of the corporation shall have an absolute right to do either or both
of the following:

               (i)  Inspect and copy the record of shareholders' names and
     addresses and shareholdings during usual business hours upon five business
     days' prior written demand upon the corporation; or

               (ii) Obtain from the transfer agent, if any, for the corporation,
     upon five business days' prior written demand and upon the tender of its
     usual charges for such a list (the amount of which charges shall be stated
     to the shareholder by the transfer agent upon request), a list of the
     shareholders' names and addresses who are entitled to vote for the election
     of directors and their shareholdings, as of the most recent record date for
     which it has been compiled or as of a date specified by the shareholder
     subsequent to the date of demand.

                                       12



          (b)  The record of shareholders shall also be open to inspection and
copying by any shareholder or holder of a voting trust certificate at any time
during usual business hours upon written demand on the corporation, for a
purpose reasonably related to such holder's interest as a shareholder or holder
of a voting trust certificate.

          (c)  The accounting books and records and minutes of proceedings of
the shareholders and the Board and committees of the Board shall be open to
inspection upon written demand on the corporation of any shareholder or holder
of a voting trust certificate at any reasonable time during usual business
hours, for a purpose reasonably related to such holder's interests as a
shareholder or as a holder of such voting trust certificate.

          (d)  Any inspection and copying under this Article may be made in
person or by agent or attorney.

          Section 2. INSPECTION OF BYLAWS. The corporation shall keep in its
principal executive office in the State of California, or if its principal
executive office is not in such State at its principal business office in such
State, the original or a copy of these Bylaws as amended to date, which shall be
open to inspection by shareholders at all reasonable times during office hours.
If the principal executive office of the corporation is located outside the
State of California and the corporation has no principal business office in such
state, it shall upon the written request of any shareholder furnish to such
shareholder a copy of these Bylaws as amended to date.

          Section 3. ENDORSEMENT OF DOCUMENTS; CONTRACTS. Subject to the
provisions of applicable law, any note, mortgage, evidence of indebtedness,
contract, share certificate, conveyance or other instrument in writing and any
assignment or endorsements thereof executed or entered into between the
corporation and any other person, when signed by the Chairman of the Board, the
President or any Vice President and the Secretary, any Assistant Secretary, the
Chief Financial Officer or any Assistant Chief Financial Officer of the
corporation shall be valid and binding on the corporation in the absence of
actual knowledge on the part of the other person that the signing officers had
no authority to execute the same. Any such instruments may be signed by any
other person or persons and in such manner as from time to time shall be
determined by the Board, and, unless so authorized by the Board, no officer,
agent or employee shall have any power or authority to bind the corporation by
any contract or engagement or to pledge its credit or to render it liable for
any purpose or amount.

          Section 4. CERTIFICATES OF STOCK. Every holder of shares of the
corporation shall be entitled to have a certificate signed in the name of the
corporation by the Chairman of the Board, the President or a Vice President and
by the Chief Financial Officer or an Assistant Chief Financial Officer or the
Secretary or an Assistant Secretary, certifying the number of shares and the
class or series of shares owned by the shareholder. Any or all of the signatures
on the certificate may be facsimile. If any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the corporation with the same effect
as if such person were an officer, transfer agent or registrar at the date of
issue.

                                       13



          Certificates for shares may be issued prior to full payment under such
restrictions and for such purposes as the Board may provide; provided, however,
that on any certificate issued to represent any partly paid shares, the total
amount of the consideration to be paid therefor and the amount paid thereon
shall be stated.

          Except as provided in this Section, no new certificate for shares
shall be issued in lieu of an old one unless the latter is surrendered and
cancelled at the same time. The Board may, however, if any certificate for
shares is alleged to have been lost, stolen or destroyed, authorize the issuance
of a new certificate in lieu thereof, and the corporation may require that the
corporation be given a bond or other adequate security sufficient to indemnify
it against any claim that may be made against it (including expense or
liability) on account of the alleged loss, theft or destruction of such
certificate or the issuance of such new certificate.

          Section 5. REPRESENTATION OF SHARES OF OTHER CORPORATIONS. The
President or any other officer or officers authorized by the Board or the
President are each authorized to vote, represent and exercise on behalf of the
corporation all rights incident to any and all shares of any other corporation
or corporations standing in the name of the corporation. The authority herein
granted may be exercised either by any such officer in person or by any other
person authorized so to do by proxy or power of attorney duly executed by said
officer.

          Section 6. STOCK PURCHASE PLANS. The corporation may adopt and carry
out a stock purchase plan or agreement or stock option plan or agreement
providing for the issue and sale for such consideration as may be fixed of its
unissued shares, or of issued shares acquired or to be acquired, to one or more
of the employees or directors of the corporation or of a subsidiary or to a
trustee on their behalf and for the payment for such shares in installments or
at one time, and may provide for aiding any such persons in paying for such
shares by compensation for services rendered, promissory notes or otherwise.

          Any such stock purchase plan or agreement or stock option plan or
agreement may include, among other features, the fixing of eligibility for
participation therein, the class and price of shares to be issued or sold under
the plan or agreement, the number of shares which may be subscribed for, the
method of payment therefor, the reservation of title until full payment
therefor, the effect of the termination of employment, an option or obligation
on the part of the corporation to repurchase the shares upon termination of
employment, restrictions upon transfer of the shares, the time limits of and
termination of the plan, and any other matters, not in violation of applicable
law, and may be included in the plan as approved or authorized by the Board or
any committee of the Board.

          Section 7. CONSTRUCTION AND DEFINITIONS. Unless the context otherwise
requires, the general provisions, rules of construction and definitions
contained in the General Provisions of the California Corporations Code and in
the California General Corporation Law shall govern the construction of these
Bylaws.

          Section 8. AMENDMENTS. These Bylaws may be amended or repealed either
by approval of the outstanding shares (as defined in Section 152 of the
California General Corporation Law) or by the approval of the Board; provided,
however, that after the issuance of

                                       14



shares, a bylaw specifying or changing a fixed number of directors or the
maximum or minimum number or changing from a fixed to a variable number of
directors or vice versa may only be adopted by approval of the outstanding
shares, and a bylaw reducing the fixed number or the minimum number of directors
to a number less than five shall be subject to the provisions of Section 212(a)
of the California General Corporation Law.

          Section 9. ANNUAL REPORT TO SHAREHOLDERS. The annual report to
shareholders referred to in Section 1501 of the California General Corporation
Law is expressly waived, but nothing herein shall be interpreted as prohibiting
the Board from issuing annual or other periodic reports to shareholders.

                          ARTICLE VI. Indemnification.

          Section 1. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Each person who
was or is a party or is threatened to be made a party to or is involved in any
threatened, pending or completed action, suit or proceeding, whether brought in
the name of the corporation or otherwise and whether of a civil, criminal,
administrative or investigative nature (hereinafter a "proceeding"), by reason
of the fact that he or she, or a person of whom he or she is the legal
representative, is or was a director or officer of the corporation or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is an alleged action or inaction in an official
capacity or in any other capacity while serving as a director or officer, shall,
subject to the terms of any agreement between the corporation and such person,
be indemnified and held harmless by the corporation to the fullest extent
permissible under California law and the corporation's Articles of
Incorporation, against all costs, charges, expenses, liabilities and losses
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement) reasonably incurred or suffered by
such person in connection therewith, and such indemnification shall continue as
to a person who has ceased to be a director or officer and shall inure to the
benefit of his or her heirs, executors and administrators; provided, however,
that the corporation shall indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such person only if
such proceeding (or part thereof) was authorized by the Board of Directors of
the corporation and provided, further, that no such person shall be indemnified
(i) except to the extent that the aggregate of losses to be indemnified exceeds
the amount of such losses for which the director or officer is paid pursuant to
any directors and officers liability insurance policy maintained by the
corporation; (ii) on account of any suit in which judgment is rendered against
such person for an accounting of profits made from the purchase or sale by such
person of securities of the corporation pursuant to the provisions of Section
16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar
provisions of any federal, state or local statutory law; (iii) for expenses,
judgments, funds, penalties or ERISA excise taxes resulting from such person's
conduct which is finally adjudged to have been willful misconduct, knowingly
fraudulent or deliberately dishonest; (iv) if a court of competent jurisdiction
finally determines that any indemnification hereunder is unlawful; (v) for acts
or omissions involving intentional misconduct or knowing and culpable violation
of law; (vi) for acts or omissions that the director or officer believes to be
contrary to the best interests of the corporation or its shareholders or that
involve the absence of good faith on the part of the director or officer; (vii)
for any transaction

                                       15



from which the director or officer derived an improper personal benefit; (viii)
for acts or omissions that show a reckless disregard for the director's or
officer's duty to the corporation or its shareholders in circumstances in which
the director or officer was aware, or should have been aware, in the ordinary
course of performing his duties, of a risk of serious injury to the corporation
or its shareholders; (ix) for acts or omissions that constitute an unexcused
pattern of inattention that amounts to an abdication of the director's or
officer's duties to the corporation or its shareholders; (x) for costs, charges,
expenses, liabilities and losses arising under Section 310 or 316 of the General
Corporation Law of California (the "Law"); and (xi) as to circumstances in which
indemnity is expressly prohibited by Section 317 of the Law. The right to
indemnification conferred in this Article shall be a contract right and shall
include the right to be paid by the corporation expenses incurred in defending
any proceeding in advance of its final disposition; provided, however, that if
the Law requires the payment of such expenses incurred by a director or officer
in his or her capacity as a director or officer (and not in any other capacity
in which service was or is rendered by such person while a director or officer,
including, without limitation, service to an employee benefit plan) in advance
of the final disposition of a proceeding, shall be made only upon delivery to
the corporation of an undertaking, by or on behalf of such director or officer,
to repay all amounts to the corporation unless it shall be determined ultimately
that such person is not entitled to be indemnified. No indemnity shall be
provided under this provision for any liability arising out of any act or
omission committed or occurring prior to the date an amendment containing this
provision is filed with the Secretary of State of California.

          Section 2. INDEMNIFICATION OF AGENTS. A person who was or is a party
or is threatened to be made a party to or is involved in any proceeding by
reason of the fact that he or she is or was an employee or agent of the
corporation or is or was serving at the request of the corporation as an
employee or agent of another enterprise, including service with respect to
employee benefit plans, whether the basis of such action is an alleged action or
inaction in an official capacity or in any other capacity while serving as an
employee or agent, may, subject to the terms of any agreement between the
corporation and such person, be indemnified and held harmless by the corporation
to the fullest extent permitted by California law and the corporation's Articles
of Incorporation, against all costs, charges, expenses, liabilities and losses
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement) reasonably incurred or suffered by
such person in connection therewith. The immediately preceding sentence is not
intended to be and shall not be considered to confer a contract right on any
employee or agent of the corporation.

          Section 3. RIGHT OF DIRECTORS AND OFFICERS TO BRING SUIT. If a claim
under Section 1 of this Article is not paid in full by the corporation within 30
days after a written claim has been received by the corporation, the claimant
may at any time thereafter bring suit against the corporation to recover the
unpaid amount of the claim and, if successful in whole or in part, the claimant
shall also be entitled to be paid the expense of prosecuting such claim. It
shall be a defense to any such action (other than an action brought to enforce a
claim for expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any is required, has been
tendered to the corporation) that the claimant has failed to meet a standard of
conduct, if any, required to make it permissible under California law for the
corporation to indemnify the claimant for the amount claimed. Neither the
failure of the corporation (including its Board of Directors, independent

                                       16



legal counsel or its shareholders) to have made a determination prior to the
commencement of such action and indemnification of the claimant is permissible
in the circumstances because he or she has met such standard of conduct, nor an
actual determination by the corporation (including its Board of Directors,
independent legal counsel or its shareholders) that the claimant has not met
such standard of conduct, shall be a defense to the action or create a
presumption that the claimant has failed to meet such standard of conduct.

          Section 4. SUCCESSFUL DEFENSE. Notwithstanding any other provision of
this Article, to the extent that a director or officer has been successful on
the merits or otherwise (including the dismissal of an action without prejudice
or the settlement of a proceeding without admission of liability) in defense of
any proceeding referred to in Section 1 or, in defense of any claim, issue or
matter therein, he shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection therewith.

          Section 5. NON-EXCLUSIVITY OF RIGHTS. The right to indemnification
provided by this Article shall not be exclusive of any other right which any
person may have or hereafter acquire under any statute, bylaw, agreement, vote
of shareholders or disinterested directors or otherwise.

          Section 6. INSURANCE. The corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
corporation or another corporation, partnership, joint venture, trust or other
enterprise against any such expense, liability or loss, whether or not the
corporation would have the power to indemnify such person against such expense,
liability or loss under California law.

          Section 7. EXPENSES AS A WITNESS. To the extent that any director,
officer, employee or agent of the corporation is by reason of such position, or
a position with another entity at the request of the corporation, a witness in
any action, suit or proceeding, he may be indemnified against all costs and
expenses actually and reasonably incurred by him or her or on his or her behalf
in connection therewith.

          Section 8. INDEMNITY AGREEMENTS. The corporation may enter into
agreements with any director, officer, employee or agent of the corporation
providing for indemnification to the fullest extent permissible under California
law and the corporation's Articles of Incorporation.

                                       17

EX-3.8

                                                                     Exhibit 3.8

                            ARTICLES OF INCORPORATION

                                       OF

                            LIBERMAN TELEVISION, INC.

                                      Name

           One: The name of the corporation is:

                            Liberman Television, Inc.


                                     Purpose

           Two: The purpose of the corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of California other than the banking business, the trust company business or
the practice of a profession permitted to be incorporated by the California
Corporations Code.

                                Agent for Service

           Three: The name and address of the corporation's initial agent for
service of process are:

                                Lenard D. Liberman
                                1813 Victory Place
                                Burbank, California 91504

                                Authorized Shares

           Four: The total number of shares of all classes of stock which the
corporation shall have the authority to issue is one thousand (1,000) shares of
Common Stock, par value $.01 per share.

                      Limitation on Liability of Directors
                        and Authority to Indemnify Agents

           Five: The liability of directors of the corporation for monetary
damages shall be eliminated to the fullest extent permissible under California
law.

           The corporation is authorized to provide indemnification of agents
(as defined in Section 317 of the California Corporations Code) for breach of
duty to the corporation and its shareholders through bylaw provisions,
agreements with agents, vote of shareholders or disinterested directors, or
otherwise, in excess of the indemnification otherwise permitted by Section 317
of the California Corporations Code, subject only to the applicable limits set
forth in Section 204 of the California Corporations Code.



           The undersigned declares that the undersigned has executed these
Articles of Incorporation and that this instrument is the act and deed of the
undersigned.



DATED:  November 13, 1997                              /s/  Regina Braman
                                                       -------------------------
                                                       Regina Braman

                                       2

EX-3.9

                                                                     Exhibit 3.9

                                     BYLAWS

                                       of


                           LIBERMAN TELEVISION, INC.,
                            a California corporation




                                      INDEX



                                                                                       Page
                                                                                       ----
                                                                                    
ARTICLE I.  Offices ...............................................................       1
            -------
     Section 1.  PRINCIPAL EXECUTIVE OFFICE .......................................       1
     Section 2.  OTHER OFFICES ....................................................       1
ARTICLE II.  Shareholders .........................................................       1
             ------------
     Section 1.  PLACE OF MEETINGS ................................................       1
     Section 2.  ANNUAL MEETINGS ..................................................       1
     Section 3.  SPECIAL MEETINGS .................................................       1
     Section 4.  NOTICE OF ANNUAL OR SPECIAL MEETINGS .............................       2
     Section 5.  QUORUM ...........................................................       2
     Section 6.  ADJOURNED MEETINGS AND NOTICE THEREOF ............................       2
     Section 7.  VOTING ...........................................................       3
     Section 8.  RECORD DATE ......................................................       4
     Section 9.  CONSENT OF ABSENTEES .............................................       5
     Section 10. ACTION WITHOUT MEETING ...........................................       5
     Section 11. PROXIES ..........................................................       6
     Section 12. INSPECTORS OF ELECTION ...........................................       6
     Section 13. CONDUCT OF MEETING ...............................................       6
ARTICLE III.  Directors ...........................................................       6
              ---------
     Section 1.  POWERS ...........................................................       7
     Section 2.  NUMBER OF DIRECTORS ..............................................       7
     Section 3.  ELECTION AND TERM OF OFFICE ......................................       7
     Section 4.  VACANCIES ........................................................       7
     Section 5.  PLACE OF MEETING .................................................       8
     Section 6.  REGULAR MEETINGS .................................................       8
     Section 7.  SPECIAL MEETINGS .................................................       8
     Section 8.  QUORUM ...........................................................       9
     Section 9.  PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE ................       9
     Section 10. WAIVER OF NOTICE .................................................       9
     Section 11. ADJOURNMENT ......................................................       9
     Section 12. FEES AND COMPENSATION ............................................       9
     Section 13. ACTION WITHOUT MEETING ...........................................      10
     Section 14. RIGHTS OF INSPECTION .............................................      10
     Section 15. COMMITTEES .......................................................      10
ARTICLE IV.  Officers .............................................................      11
             --------
     Section 1.  OFFICERS .........................................................      11
     Section 2.  ELECTION .........................................................      11
     Section 3.  SUBORDINATE OFFICERS .............................................      11
     Section 4.  REMOVAL AND RESIGNATION ..........................................      11
     Section 5.  VACANCIES ........................................................      11
     Section 6.  CHAIRMAN OF THE BOARD ............................................      11
     Section 7.  PRESIDENT ........................................................      11
     Section 8.  VICE PRESIDENTS ..................................................      12


                                        i



                                                                                    
     Section 9.  SECRETARY ........................................................      12
     Section 10. CHIEF FINANCIAL OFFICER ..........................................      12
ARTICLE V.  Other Provisions ......................................................      13
            ----------------
     Section 1.  INSPECTION OF CORPORATE RECORDS ..................................      13
     Section 2.  INSPECTION OF BYLAWS .............................................      13
     Section 3.  ENDORSEMENT OF DOCUMENTS; CONTRACTS                                     14
     Section 4.  CERTIFICATES OF STOCK ............................................      14
     Section 5.  REPRESENTATION OF SHARES OF OTHER CORPORATIONS ...................      14
     Section 6.  STOCK PURCHASE PLANS .............................................      15
     Section 7.  CONSTRUCTION AND DEFINITIONS .....................................      15
     Section 8.  AMENDMENTS .......................................................      15
     Section 9.  ANNUAL REPORT TO SHAREHOLDERS ....................................      15
ARTICLE VI.  Indemnification ......................................................      15
             ---------------
     Section 1.  INDEMNIFICATION OF DIRECTORS AND OFFICERS ........................      16
     Section 2.  INDEMNIFICATION OF AGENTS ........................................      17
     Section 3.  RIGHT OF DIRECTORS AND OFFICERS TO BRING SUIT ....................      17
     Section 4.  SUCCESSFUL DEFENSE ...............................................      17
     Section 5.  NON-EXCLUSIVITY OF RIGHTS ........................................      18
     Section 6.  INSURANCE ........................................................      18
     Section 7.  EXPENSES AS A WITNESS ............................................      18
     Section 8.  INDEMNITY AGREEMENTS .............................................      18



                                       ii



                                     BYLAWS

                           for the regulation, except
                       as otherwise provided by statute or
                         its Articles of Incorporation,

                                       of

                           LIBERMAN TELEVISION, INC.,
                            a California corporation


                               ARTICLE I. Offices.

          Section 1. PRINCIPAL EXECUTIVE OFFICE. The corporation's principal
executive office shall be fixed and located at such place as the Board of
Directors (herein called the "Board") shall determine. The Board is granted full
power and authority to change said principal executive office from one location
to another.

          Section 2. OTHER OFFICES. Branch or subordinate offices may be
established at any time by the Board at any place or places.

                            ARTICLE II. Shareholders.

          Section 1. PLACE OF MEETINGS. Meetings of shareholders shall be held
either at the principal executive office of the corporation or at any other
place within or without the State of California which may be designated either
by the Board or by the written consent of all persons entitled to vote thereat,
given either before or after the meeting and filed with the Secretary.

          Section 2. ANNUAL MEETINGS. The annual meetings of shareholders shall
be held on such date and at such time as may be fixed by the Board.

          Section 3. SPECIAL MEETINGS. Special meetings of the shareholders may
be called at any time by the Board, the Chairman of the Board, the President, or
by the holders of shares entitled to cast not less than ten percent of the votes
at such meeting. Upon request in writing to the Chairman of the Board, the
President, any Vice President or the Secretary by any person (other than the
Board) entitled to call a special meeting of shareholders, the officer forthwith
shall cause notice to be given to the shareholders entitled to vote that a
meeting will be held at a time requested by the person or persons calling the
meeting, not less than thirty-five nor more than sixty days after the receipt of
the request. If the notice is not given within twenty days after receipt of the
request, the persons entitled to call the meeting may give the notice.

          Section 4. NOTICE OF ANNUAL OR SPECIAL MEETINGS. Written notice of
each annual or special meeting of shareholders shall be given not less than ten
nor more than sixty days before the date of the meeting to each shareholder
entitled to vote thereat. Such notice shall state the place, date and hour of
the meeting and (i) in the case of a special meeting,



the general nature of the business to be transacted, and no other business may
be transacted, or (ii) in the case of the annual meeting, those matters which
the Board, at the time of the mailing of the notice, intends to present for
action by the shareholders, but, subject to the provisions of applicable law,
any proper matter may be presented at the meeting for such action. The notice of
any meeting at which directors are to be elected shall include the names of
nominees intended at the time of the notice to be presented by management for
election.

          Notice of a shareholders' meeting shall be given either personally or
by mail or by other means of written communication, addressed to the shareholder
at the address of such shareholder appearing on the books of the corporation or
given by the shareholder to the corporation for the purpose of notice, or, if no
such address appears or is given, at the place where the principal executive
office of the corporation is located or by publication at least once in a
newspaper of general circulation in the county in which the principal executive
office is located. Notice by mail shall be deemed to have been given at the time
a written notice is deposited in the United States mails, postage prepaid. Any
other written notice shall be deemed to have been given at the time it is
personally delivered to the recipient or is delivered to a common carrier for
transmission, or actually transmitted by the person giving the notice by
electronic means, to the recipient.

          Section 5. QUORUM. A majority of the shares entitled to vote,
represented in person or by proxy, shall constitute a quorum at any meeting of
shareholders. If a quorum is present, the affirmative vote of a majority of the
shares represented and voting at the meeting (which shares voting affirmatively
also constitute at least a majority of the required quorum) shall be the act of
the shareholders, unless the vote of a greater number or voting by classes is
required by law or by the Articles, except as provided in the following
sentence. The shareholders present at a duly called or held meeting at which a
quorum is present may continue to do business until adjournment, notwithstanding
the withdrawal of enough shareholders to leave less than a quorum, if any action
taken (other than adjournment) is approved by at least a majority of the shares
required to constitute a quorum.

          Section 6. ADJOURNED MEETINGS AND NOTICE THEREOF. Any Shareholders'
meeting, whether or not a quorum is present, may be adjourned from time to time
by the vote of a majority of the shares represented either in person or by
proxy, but in the absence of a quorum (except as provided in Section 5 of this
Article) no other business may be transacted at such meeting.

          It shall not be necessary to give any notice of the time and place of
the adjourned meeting or of the business to be transacted thereat, other than by
announcement at the meeting at which such adjournment is taken; provided,
however, when any shareholders' meeting is adjourned for more than 45 days or,
if after adjournment a new record date is fixed for the adjourned meeting,
notice of the adjourned meeting shall be given as in the case of an original
meeting.

          Section 7. VOTING. The shareholders entitled to notice of any meeting
or to vote at any such meeting shall be only persons in whose name shares stand
on the stock records of the corporation on the record date determined in
accordance with Section 8 of this Article.

                                        2



          Subject to the following sentence and to the provisions of Section 708
of the California General Corporation Law, every shareholder entitled to vote at
any election of directors may cumulate such shareholder's votes and give one
candidate a number of votes equal to the number of directors to be elected
multiplied by the number of votes to which the shareholder's shares are
entitled, or distribute the shareholder's votes on the same principle among as
many candidates as the shareholder thinks fit. No shareholder shall be entitled
to cumulate votes for any candidate or candidates pursuant to the preceding
sentence unless such candidate or candidates' names have been placed in
nomination prior to the voting and the shareholder has given notice at the
meeting prior to the voting of the shareholder's intention to cumulate the
shareholder's votes. If any one shareholder has given such notice, all
shareholders may cumulate their votes for candidates in nomination.

          Elections need not be by ballot, provided, however, that all elections
for directors must be by ballot upon demand made by a shareholder at the meeting
and before the voting begins.

          In any election of directors, the candidates receiving the highest
number of votes of the shares entitled to be voted for them up to the number of
directors to be elected by such shares are elected.

          Voting shall in all cases be subject to the provisions of Chapter 7 of
the California General Corporation Law, and to the following provisions:

          (a)  Subject to clause (g), shares held by an administrator, executor,
guardian, conservator or custodian may be voted by such holder either in person
or by proxy, without a transfer of such shares into the holder's name; and
shares standing in the name of a trustee may be voted by the trustee, either in
person or by proxy, but no trustee shall be entitled to vote shares held by such
trustee without a transfer of such shares into the trustee's name.

          (b)  Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into the receiver's name if authority
to do so is contained in the order of the court by which such receiver was
appointed.

          (c)  Subject to the provisions of Section 705 of the California
General Corporation Law and except where otherwise agreed in writing between the
parties, a shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.

          (d)  Shares standing in the name of a minor may be voted and the
corporation may treat all rights incident thereto as exercisable by the minor,
in person or by proxy, whether or not the corporation has notice, actual or
constructive, of the nonage, unless a guardian of the minor's property has been
appointed and written notice of such appointment given to the corporation.

          (e)  Shares standing in the name of another corporation, domestic or
foreign, may be voted by such officer, agent or proxyholder as the bylaws of
such other corporation may

                                        3



prescribe or, in the absence of such provision, as the Board of Directors of
such other corporation may determine or, in the absence of such determination,
by the chairman of the board, president or any vice president of such other
corporation, or by any other person authorized to do so by the chairman of the
board, president or any vice president of such other corporation. Shares which
are purported to be voted or any proxy purported to be executed in the name of a
corporation (whether or not any title of the person signing is indicated) shall
be presumed to be voted or the proxy executed in accordance with the provisions
of this clause, unless the contrary is shown.

          (f)   Shares of the corporation owned by any subsidiary shall not be
entitled to vote on any matter.

          (g)   Shares held by the corporation in a fiduciary capacity, and
shares of the issuing corporation held in a fiduciary capacity by any
subsidiary, shall not be entitled to vote on any matter, except to the extent
that the settlor or beneficial owner possesses and exercises a right to vote or
to give the corporation binding instructions as to how to vote such shares.

          (h)   If shares stand of record in the names of two or more persons,
whether fiduciaries, members of a partnership, joint tenants, tenants in common,
husband and wife as community property, tenants by the entirety, voting
trustees, persons entitled to vote under a shareholder voting agreement or
otherwise, or if two or more persons (including proxyholders) have the same
fiduciary relationship respecting the same shares, unless the secretary of the
corporation is given written notice to the contrary and is furnished with a copy
of the instrument or order appointing them or creating the relationship wherein
it is so provided, their acts with respect to voting shall have the following
effect:

          (i)   If only one votes, such act binds all;

          (ii)  If more than one vote, the act of the majority so voting binds
          all;

          (iii) If more than one vote, but the vote is evenly split on
          any particular matter, each faction may vote the securities in
          question proportionately.

If the instrument so filed or the registration of the shares shows that any such
tenancy is held in unequal interests, a majority or even split for the purpose
of this section shall be a majority or even split in interest.

          Section 8. RECORD DATE. The Board may fix, in advance, a record date
for the determination of the shareholders entitled to notice of any meeting or
to vote or entitled to receive payment of any dividend or other distribution, or
any allotment of rights, or to exercise rights in respect of any other lawful
action. The record date so fixed shall be not more than 60 days nor less than 10
days prior to the date of the meeting nor more than 60 days prior to any other
action. When a record date is so fixed, only shareholders of record on that date
are entitled to notice of and to vote at the meeting or to receive the dividend,
distribution, or allotment of rights, or to exercise the rights, as the case may
be, notwithstanding any transfer of shares on the books of the corporation after
the record date. A determination of shareholders of record entitled to notice of
or to vote at a meeting of shareholders shall apply to any adjournment of the
meeting

                                        4



unless the Board fixes a new record date for the adjourned meeting. The Board
shall fix a new record date if the meeting is adjourned for more than forty-five
days.

          If no record date is fixed by the Board, the record date for
determining shareholders entitled to notice of or to vote at a meeting of
shareholders shall be at the close of business on the business day next
preceding the day on which notice is given or, if notice is waived, at the close
of business on the business day next preceding the day on which the meeting is
held. The record date for determining shareholders for any purpose other than
set forth in this Section 8 or Section 10 of this Article shall be at the close
of business on the day on which the Board adopts the resolution relating
thereto, or the sixtieth day prior to the date of such other action, whichever
is later.

          Section 9.  CONSENT OF ABSENTEES. The transactions of any meeting of
shareholders, however called and noticed, and wherever held, are as valid as
though had at a meeting duly held after regular call and notice, if a quorum is
present either in person or by proxy, and if, either before or after the
meeting, each of the persons entitled to vote, not present in person or by
proxy, signs a written waiver of notice, or a consent to the holding of the
meeting or an approval of the minutes thereof. All such waivers, consents or
approvals shall be filed with the corporate records or made a part of the
minutes of the meeting. Attendance of a person at a meeting shall constitute a
waiver of notice of and presence at such meeting, except when the person
objects, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened and except that
attendance at a meeting is not a waiver of any right to object to the
consideration of matters required by the California General Corporation Law to
be included in the notice but not so included, if such objection is expressly
made at the meeting. Neither the business to be transacted at nor the purpose of
any regular or special meeting of shareholders need be specified in any written
waiver of notice, consent to the holding of the meeting or approval of the
minutes thereof, except as provided in Section 601(f) of the California General
Corporation Law.

          Section 10. ACTION WITHOUT MEETING. Subject to Section 603 of the
California General Corporation Law, any action which, under any provision of the
California General Corporation Law, may be taken at any annual or special
meeting of shareholders, may be taken without a meeting and without prior notice
if a consent in writing, setting forth the action so taken, shall be signed by
the holders of outstanding shares having not less than the minimum number of
votes that would be necessary to authorize or take such action at a meeting at
which all shares entitled to vote thereon were present and voted. Unless a
record date for voting purposes be fixed as provided in Section 8 of this
Article, the record date for determining shareholders entitled to give consent
pursuant to this Section 10, when no prior action by the Board has been taken,
shall be the day on which the first written consent is given.

          Section 11. PROXIES. Every person entitled to vote shares has the
right to do so either in person or by one or more persons authorized by a
written proxy executed by such shareholder and filed with the Secretary. Any
proxy duly executed is not revoked and continues in full force and effect until
revoked by the person executing it prior to the vote pursuant thereto. Such
revocation may be effected either, (i) by a writing delivered to the Secretary
of the Corporation stating that the proxy is revoked, (ii) by a subsequent proxy
executed by the person executing the prior proxy and presented to the meeting,
or (iii) by attendance at the meeting and

                                        5



voting in person by the person executing the proxy; provided, however, that no
proxy shall be valid after the expiration of eleven months from the date of its
execution unless otherwise provided in the proxy.

          Section 12. INSPECTORS OF ELECTION. In advance of any meeting of
shareholders, the Board may appoint inspectors of election to act at such
meeting and any adjournment thereof. If inspectors of election be not so
appointed, or if any persons so appointed fail to appear or refuse to act, the
chairman of any such meeting may, and on the request of any shareholder or
shareholder's proxy shall, make such appointment at the meeting. The number of
inspectors shall be either one or three. If appointed at a meeting on the
request of one or more shareholders or proxies, the majority of shares present
shall determine whether one or three inspectors are to be appointed.

          The duties of such inspectors shall be as prescribed by Section 707(b)
of the California General Corporation Law and shall include: determining the
number of shares outstanding and the voting power of each; determining the
shares represented at the meeting; determining the existence of a quorum;
determining the authenticity, validity and effect of proxies; receiving votes,
ballots or consents; hearing and determining all challenges and questions in any
way arising in connection with the right to vote; counting and tabulating all
votes or consents; determining when the polls shall close; determining the
result; and doing such acts as may be proper to conduct the election or vote
with fairness to all shareholders. If there are three inspectors of election,
the decision, act or certificate of a majority is effective in all respects as
the decision, act or certificate of all.

          Section 13. CONDUCT OF MEETING. The President shall preside as
chairman at all meetings of the shareholders. The chairman shall conduct each
such meeting in a businesslike and fair manner, but shall not be obligated to
follow any technical, formal or parliamentary rules or principles of procedure.
The chairman's rulings on procedural matters shall be conclusive and binding on
all shareholders, unless at the time of a ruling a request for a vote is made to
the shareholders holding shares entitled to vote and which are represented in
person or by proxy at the meeting, in which case the decision of a majority of
such shares shall be conclusive and binding on all shareholders. Without
limiting the generality of the foregoing, the chairman shall have all of the
powers usually vested in the chairman of a meeting of shareholders.

                             ARTICLE III. Directors.

          Section 1.  POWERS. Subject to limitations of the Articles, of these
Bylaws and of the California General Corporation Law relating to action required
to be approved by the shareholders or by the outstanding shares, the business
and affairs of the corporation shall be managed and all corporate powers shall
be exercised by or under the direction of the Board. The Board may delegate the
management of the day-to-day operation of the business of the corporation to a
management company or other person provided that the business and affairs of the
corporation shall be managed and all corporate powers shall be exercised under
the ultimate direction of the Board. Without prejudice to such general powers,
but subject to the same limitations, it is hereby expressly declared that the
Board shall have the following powers in addition to the other powers enumerated
in these Bylaws:

                                        6



          (a)  To select and remove all the other officers, agents and employees
of the corporation, prescribe the powers and duties for them as may not be
inconsistent with law, the Articles or these Bylaws, fix their compensation and
require from them security for faithful service.

          (b)  To conduct, manage and control the affairs and business of the
corporation and to make such rules and regulations therefor not inconsistent
with law, the Articles or these Bylaws, as they may deem best.

          (c)  To adopt, make and use a corporate seal, and to prescribe the
forms of certificates of stock, and to alter the form of such seal and of such
certificates from time to time as they may deem best.

          (d)  To authorize the issuance of shares of stock of the corporation
from time to time, upon such terms and for such consideration as may be lawful.

          (e)  To borrow money and incur indebtedness for the purposes of the
corporation, and to cause to be executed and delivered therefor, in the
corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages,
pledges, hypothecations or other evidences of debt and securities therefor.

          Section 2. NUMBER OF DIRECTORS. The authorized number of directors
shall be two until changed by amendment of the Articles or by a Bylaw duly
adopted by the shareholders amending this Section 2.

          Section 3. ELECTION AND TERM OF OFFICE. The directors shall be elected
at each annual meeting of the shareholders, but if any such annual meeting is
not held or the directors are not elected thereat, the directors may be elected
at any special meeting of shareholders held for that purpose. Each director
shall hold office until the next annual meeting and until a successor has been
elected and qualified.

          Section 4. VACANCIES. Any director may resign effective upon giving
written notice to the Chairman of the Board, the President, the Secretary or the
Board, unless the notice specifies a later time for the effectiveness of such
resignation. If the resignation is effective at a future time, a successor may
be elected to take office when the resignation becomes effective.

          Vacancies in the Board, except those existing as a result of a removal
of a director, may be filled by a majority of the remaining directors, though
less than a quorum, or by a sole remaining director, and each director so
elected shall hold office until the next annual meeting and until such
director's successor has been elected and qualified.

          A vacancy or vacancies in the Board shall be deemed to exist in case
of the death, resignation or removal of any director, or if the authorized
number of directors be increased, or if the shareholders fail, at any annual or
special meeting of shareholders at which any director or directors are elected,
to elect the full authorized number of directors to be voted for at that
meeting.

                                        7



          The Board may declare vacant the office of a director who has been
declared of unsound mind by an order of court or convicted of a felony.

          The shareholders may elect a director or directors at any time to fill
any vacancy or vacancies not filled by the directors. Any such election by
written consent other than to fill a vacancy created by removal requires the
consent of a majority of the outstanding shares entitled to vote. Any such
election by written consent to fill a vacancy created by removal requires
unanimous consent.

          No reduction of the authorized number of directors shall have the
effect of removing any director prior to the expiration of the director's term
of office.

          Section 5. PLACE OF MEETING. Regular or special meetings of the Board
shall be held at any place within or without the State of California which has
been designated from time to time by the Board. In the absence of such
designation, regular meetings shall be held at the principal executive office of
the corporation.

          Section 6. REGULAR MEETINGS. Immediately following each annual meeting
of shareholders the Board shall hold a regular meeting for the purpose of
organization, election of officers and the transaction of other business.

          Other regular meetings of the Board shall be held without call on such
dates and at such times as may be fixed by the Board. Call and notice of all
regular meetings of the Board are hereby dispensed with.

          Section 7. SPECIAL MEETINGS. Special meetings of the Board for any
purpose or purposes may be called at any time by the Chairman of the Board, the
President, any Vice President, the Secretary or by any two directors.

          Special meetings of the Board shall be held upon four days' written
notice or forty-eight hours' notice given personally or by telephone, telegraph,
telex or other similar means of communication. Any such notice shall be
addressed or delivered to each director at such director's address as it is
shown upon the records of the corporation or as may have been given to the
corporation by the director for purposes of notice or, if such address is not
shown on such records or is not readily ascertainable, at the place in which the
meetings of the directors are regularly held.

          Notice by mail shall be deemed to have been given at the time a
written notice is deposited in the United States mails, postage prepaid. Any
other written notice shall be deemed to have been given at the time it is
personally delivered to the recipient or is delivered to a common carrier for
transmission, or actually transmitted by the person giving the notice by
electronic means, to the recipient. Oral notice shall be deemed to have been
given at the time it is communicated, in person or by telephone or wireless, to
the recipient or to a person at the office of the recipient who the person
giving the notice has reason to believe will promptly communicate it to the
recipient.

          Section 8. QUORUM. A majority of the authorized number of directors
constitutes a quorum of the board for the transaction of business, except to
adjourn as provided

                                        8



in Section 11 of this Article. Every act or decision done or made by a majority
of the directors present at a meeting duly held at which a quorum is present
shall be regarded as the act of the Board, unless a greater number be required
by law or by the Articles. A meeting at which a quorum is initially present may
continue to transact business notwithstanding the withdrawal of directors, if
any action taken is approved by at least a majority of the required quorum for
such meeting.

          Section 9.  PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE. Members
of the Board may participate in a meeting through use of conference telephone or
similar communications equipment, so long as all members participating in such
meeting can hear one another.

          Section 10. WAIVER OF NOTICE. Notice of a meeting need not be given to
any director who signs a waiver of notice or a consent to holding the meeting or
an approval of the minutes thereof, whether before or after the meeting, or who
attends the meeting without protesting, prior thereto or at its commencement,
the lack of notice to such director. All such waivers, consents and approvals
shall be filed with the corporate records or made a part of the minutes of the
meeting.

          Section 11. ADJOURNMENT. A majority of the directors present, whether
or not a quorum is present, may adjourn any directors' meeting to another time
and place. Notice of the time and place of holding an adjourned meeting need not
be given to absent directors if the time and place be fixed at the meeting
adjourned, except as provided in the next sentence. If the meeting is adjourned
for more than 24 hours, notice of any adjournment to another time or place shall
be given prior to the time of the adjourned meeting to the directors who were
not present at the time of the adjournment.

          Section 12. FEES AND COMPENSATION. Directors and members of committees
may receive such compensation, if any, for their services, and such
reimbursement for expenses, as may be fixed or determined by the Board.

          Section 13. ACTION WITHOUT MEETING. Any action required or permitted
to be taken by the Board may be taken without a meeting if all members of the
Board shall individually or collectively consent in writing to such action. Such
consent or consents shall have the same effect as a unanimous vote of the Board
and shall be filed with the minutes of the proceedings of the Board.

          Section 14. RIGHTS OF INSPECTION. Every director shall have the
absolute right at any reasonable time to inspect and copy all books, records and
documents of every kind and to inspect the physical properties of the
corporation and also of its subsidiary corporations, domestic or foreign. Such
inspection by a director may be made in person or by agent or attorney and
includes the right to copy and obtain extracts.

          Section 15. COMMITTEES. The Board may appoint one or more committees,
each consisting of two or more directors, and delegate to such committees any of
the authority of the Board except with respect to:

                                        9



          (a)  The approval of any action for which the General Corporation Law
          also requires shareholders' approval or approval of the outstanding
          shares;

          (b)  The filling of vacancies in the Board or on any committee;

          (c)  The fixing of compensation of the directors for serving on the
          Board or on any committee;

          (d)  The amendment or repeal of bylaws or the adoption of new bylaws;

          (e)  The amendment or repeal of any resolution of the Board which by
          its express term is not so amendable or repealable;

          (f)  A distribution to t he shareholders of the corporation except at
          a rate or in a periodic amount or within a price range determined by
          the Board; or

          (g)  The appointment of other committees of the Board or the members
          thereof.

          Any such committee must be designated, and the members or alternate
members thereof appointed, by resolution adopted by a majority of the authorized
number of directors and any such committee may be designated an Executive
Committee or by such other name as the Board shall specify. Alternate members of
a committee may replace any absent member at any meeting of the committee. The
Board shall have the power to prescribe the manner in which proceedings of any
such committee shall be conducted. In the absence of any such prescription, such
committee shall have the power to prescribe the manner in which its proceedings
shall be conducted. Unless the Board or such committee shall otherwise provide,
the regular and special meetings and other actions of any such committee shall
be governed by the provisions of this Article applicable to meetings and actions
of the Board. Minutes shall be kept of each meeting of each committee.

                              ARTICLE IV. Officers.

          Section 1. OFFICERS. The officers of the corporation shall be a
President, a Secretary and a Chief Financial Officer. The corporation may also
have, at the discretion of the Board, a Chairman of the Board, one or more Vice
Presidents, one or more Assistant Secretaries, one or more Assistant Financial
Officers, and such other officers as may be elected or appointed in accordance
with the provisions of Section 3 of this Article.

          Section 2. ELECTION. The officers of the corporation, except such
officers as may be elected or appointed in accordance with the provisions of
Section 3 or Section 5 of this Article, shall be chosen annually by, and shall
serve at the pleasure of, the Board, and shall hold their respective offices
until their resignation, removal, or other disqualification from service, or
until their respective successors shall be elected.

          Section 3. SUBORDINATE OFFICERS. The Board may elect, and may empower
the President to appoint, such other officers as the business of the corporation
may

                                       10



require, each of whom shall hold office for such period, have such authority and
perform such duties as are provided in these Bylaws or as the Board may from
time to time determine.

          Section 4. REMOVAL AND RESIGNATION. Any officer may be removed, either
with or without cause, by the Board at any time or, except in the case of an
officer chosen by the Board, by any officer upon whom such power of removal may
be conferred by the Board. Any such removal shall be without prejudice to the
rights, if any, of the officer under any contract of employment of the officer.

          Any officer may resign at any time by giving written notice to the
corporation, but without prejudice to the rights, if any, of the corporation
under any contract to which the officer is a party. Any such resignation shall
take effect at the date of the receipt of such notice or at any later time
specified therein and, unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective.

          Section 5. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filled in the
manner prescribed in these Bylaws for regular election or appointment to such
office.

          Section 6. CHAIRMAN OF THE BOARD. The Chairman of the Board, if there
shall be such an officer, shall, if present, preside at all meetings of the
Board and exercise and perform such other powers and duties as may be from time
to time assigned by the Board.

          Section 7. PRESIDENT. Subject to such power, if any, as may be given
by the Board to the Chairman of the Board, if there be such an officer, the
President is the general manager and chief executive officer of the corporation
and has, subject to the control of the Board, general supervision, direction and
control of the business and officers of the corporation. The President shall
preside at all meetings of the shareholders and, in the absence of the Chairman
of the Board, or if there be none, at all meetings of the Board. The President
has the general powers and duties of management usually vested in the office of
president and general manager of a corporation and such other powers and duties
as may be prescribed by the Board.

          Section 8. VICE PRESIDENTS. In the absence or disability of the
President, the Vice Presidents in order of their rank as fixed by the Board or,
if not ranked, the Vice President designated by the Board, shall perform all the
duties of the President and, when so acting, shall have all the powers of, and
be subject to all the restrictions upon, the President. The Vice Presidents
shall have such other powers and perform such other duties as from time to time
may be prescribed for them respectively by the Board.

          Section 9. SECRETARY. The Secretary shall keep or cause to be kept, at
the principal executive office and such other place as the Board may order, a
book of minutes of all meetings of shareholders, the Board and its committees,
with the time and place of holding, whether regular or special, and if special,
how authorized, the notice thereof given, the names of those present at Board
and committee meetings, the number of shares present or represented at
shareholders' meetings, and the proceedings thereof. The Secretary shall keep,
or cause to be kept, a copy of the Bylaws of the corporation at the principal
executive office or business office in accordance with Section 213 of the
California General Corporation Law.

                                       11



          The Secretary shall keep, or cause to be kept, at the principal
executive office or at the office of the corporation's transfer agent or
registrar, if one be appointed, a share register, or a duplicate share register,
showing the names of the shareholders and their addresses, the number and
classes of shares held by each, the number and date of certificates issued for
the same, and the number and date of cancellation of every certificate
surrendered for cancellation.

          The Secretary shall give, or cause to be given, notice of all meetings
of the shareholders and of the Board and any committees thereof required by
these Bylaws or by law to be given, shall keep the seal of the corporation in
safe custody, and shall have such other powers and perform such other duties as
may be prescribed by the Board.

          Section 10. CHIEF FINANCIAL OFFICER. The Chief Financial Officer is
the chief financial officer of the corporation and shall keep and maintain, or
cause to be kept and maintained, adequate and correct accounts of the properties
and business transactions of the corporation, and shall send or cause to be sent
to the shareholders of the corporation such financial statements and reports as
are by law or these Bylaws required to be sent to them. The books of account
shall at all times be open to inspection by any director.

          The Chief Financial Officer shall deposit all moneys and other
valuables in the name and to the credit of the corporation with such
depositaries as may be designated by the Board. The Chief Financial Officer
shall disburse the funds of the corporation as may be ordered by the Board,
shall render to the President and the directors, whenever they request it, an
account of all transactions as Chief Financial Officer and of the financial
condition of the corporation, and shall have such other powers and perform such
other duties as may be prescribed by the Board.

                          ARTICLE V. Other Provisions.

          Section 1. INSPECTION OF CORPORATE RECORDS.

          (a)  A shareholder or shareholders holding at least five percent in
the aggregate of the outstanding voting shares of the corporation or who hold at
least one percent of such voting shares and have filed a Schedule l4B with the
United States Securities and Exchange Commission relating to the election of
directors of the corporation shall have an absolute right to do either or both
of the following:

          (i)  Inspect and copy the record of shareholders' names and addresses
          and shareholdings during usual business hours upon five business days'
          prior written demand upon the corporation; or

          (ii) Obtain from the transfer agent, if any, for the corporation, upon
          five business days' prior written demand and upon the tender of its
          usual charges for such a list (the amount of which charges shall be
          stated to the shareholder by the transfer agent upon request), a list
          of the shareholders' names and addresses who are entitled to vote for
          the election of directors and their shareholdings, as of the most
          recent record date for which it has been compiled or as of a date
          specified by the shareholder subsequent to the date of demand.

                                       12



          (b)  The record of shareholders shall also be open to inspection and
copying by any shareholder or holder of a voting trust certificate at any time
during usual business hours upon written demand on the corporation, for a
purpose reasonably related to such holder's interest as a shareholder or holder
of a voting trust certificate.

          (c)  The accounting books and records and minutes of proceedings of
the shareholders and the Board and committees of the Board shall be open to
inspection upon written demand on the corporation of any shareholder or holder
of a voting trust certificate at any reasonable time during usual business
hours, for a purpose reasonably related to such holder's interests as a
shareholder or as a holder of such voting trust certificate.

          (d)  Any inspection and copying under this Article may be made in
person or by agent or attorney. Section 2. INSPECTION OF BYLAWS. The corporation
shall keep in its principal executive office in the State of California, or if
its principal executive office is not in such State at its principal business
office in such State, the original or a copy of these Bylaws as amended to date,
which shall be open to inspection by shareholders at all reasonable times during
office hours. If the principal executive office of the corporation is located
outside the State of California and the corporation has no principal business
office in such state, it shall upon the written request of any shareholder
furnish to such shareholder a copy of these Bylaws as amended to date.

          Section 3. ENDORSEMENT OF DOCUMENTS; CONTRACTS. Subject to the
provisions of applicable law, any note, mortgage, evidence of indebtedness,
contract, share certificate, conveyance or other instrument in writing and any
assignment or endorsements thereof executed or entered into between the
corporation and any other person, when signed by the Chairman of the Board, the
President or any Vice President and the Secretary, any Assistant Secretary, the
Chief Financial Officer or any Assistant Chief Financial Officer of the
corporation shall be valid and binding on the corporation in the absence of
actual knowledge on the part of the other person that the signing officers had
no authority to execute the same. Any such instruments may be signed by any
other person or persons and in such manner as from time to time shall be
determined by the Board, and, unless so authorized by the Board, no officer,
agent or employee shall have any power or authority to bind the corporation by
any contract or engagement or to pledge its credit or to render it liable for
any purpose or amount.

          Section 4. CERTIFICATES OF STOCK. Every holder of shares of the
corporation shall be entitled to have a certificate signed in the name of the
corporation by the Chairman of the Board, the President or a Vice President and
by the Chief Financial Officer or an Assistant Chief Financial Officer or the
Secretary or an Assistant Secretary, certifying the number of shares and the
class or series of shares owned by the shareholder. Any or all of the signatures
on the certificate may be facsimile. If any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the corporation with the same effect
as if such person were an officer, transfer agent or registrar at the date of
issue.

                                       13



          Certificates for shares may be issued prior to full payment under such
restrictions and for such purposes as the Board may provide; provided, however,
that on any certificate issued to represent any partly paid shares, the total
amount of the consideration to be paid therefor and the amount paid thereon
shall be stated.

          Except as provided in this Section, no new certificate for shares
shall be issued in lieu of an old one unless the latter is surrendered and
cancelled at the same time. The Board may, however, if any certificate for
shares is alleged to have been lost, stolen or destroyed, authorize the issuance
of a new certificate in lieu thereof, and the corporation may require that the
corporation be given a bond or other adequate security sufficient to indemnify
it against any claim that may be made against it (including expense or
liability) on account of the alleged loss, theft or destruction of such
certificate or the issuance of such new certificate.

          Section 5. REPRESENTATION OF SHARES OF OTHER CORPORATIONS. The
President or any other officer or officers authorized by the Board or the
President are each authorized to vote, represent and exercise on behalf of the
corporation all rights incident to any and all shares of any other corporation
or corporations standing in the name of the corporation. The authority herein
granted may be exercised either by any such officer in person or by any other
person authorized so to do by proxy or power of attorney duly executed by said
officer.

          Section 6. STOCK PURCHASE PLANS. The corporation may adopt and carry
out a stock purchase plan or agreement or stock option plan or agreement
providing for the issue and sale for such consideration as may be fixed of its
unissued shares, or of issued shares acquired or to be acquired, to one or more
of the employees or directors of the corporation or of a subsidiary or to a
trustee on their behalf and for the payment for such shares in installments or
at one time, and may provide for aiding any such persons in paying for such
shares by compensation for services rendered, promissory notes or otherwise.

          Any such stock purchase plan or agreement or stock option plan or
agreement may include, among other features, the fixing of eligibility for
participation therein, the class and price of shares to be issued or sold under
the plan or agreement, the number of shares which may be subscribed for, the
method of payment therefor, the reservation of title until full payment
therefor, the effect of the termination of employment, an option or obligation
on the part of the corporation to repurchase the shares upon termination of
employment, restrictions upon transfer of the shares, the time limits of and
termination of the plan, and any other matters, not in violation of applicable
law, and may be included in the plan as approved or authorized by the Board or
any committee of the Board.

          Section 7. CONSTRUCTION AND DEFINITIONS. Unless the context otherwise
requires, the general provisions, rules of construction and definitions
contained in the General Provisions of the California Corporations Code and in
the California General Corporation Law shall govern the construction of these
Bylaws.

          Section 8. AMENDMENTS. These Bylaws may be amended or repealed either
by approval of the outstanding shares (as defined in Section 152 of the
California General Corporation Law) or by the approval of the Board; provided,
however, that after the issuance of

                                       14



shares, a bylaw specifying or changing a fixed number of directors or the
maximum or minimum number or changing from a fixed to a variable number of
directors or vice versa may only be adopted by approval of the outstanding
shares, and a bylaw reducing the fixed number or the minimum number of directors
to a number less than five shall be subject to the provisions of Section 212(a)
of the California General Corporation Law.

          Section 9. ANNUAL REPORT TO SHAREHOLDERS. The annual report to
shareholders referred to in Section 1501 of the California General Corporation
Law is expressly waived, but nothing herein shall be interpreted as prohibiting
the Board from issuing annual or other periodic reports to shareholders.

                          ARTICLE VI. Indemnification.

          Section 1. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Each person who
was or is a party or is threatened to be made a party to or is involved in any
threatened, pending or completed action, suit or proceeding, whether brought in
the name of the corporation or otherwise and whether of a civil, criminal,
administrative or investigative nature (hereinafter a "proceeding"), by reason
of the fact that he or she, or a person of whom he or she is the legal
representative, is or was a director or officer of the corporation or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is an alleged action or inaction in an official
capacity or in any other capacity while serving as a director or officer, shall,
subject to the terms of any agreement between the corporation and such person,
be indemnified and held harmless by the corporation to the fullest extent
permissible under California law and the corporation's Articles of
Incorporation, against all costs, charges, expenses, liabilities and losses
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement) reasonably incurred or suffered by
such person in connection therewith, and such indemnification shall continue as
to a person who has ceased to be a director or officer and shall inure to the
benefit of his or her heirs, executors and administrators; provided, however,
that the corporation shall indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such person only if
such proceeding (or part thereof) was authorized by the Board of Directors of
the corporation and provided, further, that no such person shall be indemnified
(i) except to the extent that the aggregate of losses to be indemnified exceeds
the amount of such losses for which the director or officer is paid pursuant to
any directors and officers liability insurance policy maintained by the
corporation; (ii) on account of any suit in which judgment is rendered against
such person for an accounting of profits made from the purchase or sale by such
person of securities of the corporation pursuant to the provisions of Section
16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar
provisions of any federal, state or local statutory law; (iii) for expenses,
judgments, funds, penalties or ERISA excise taxes resulting from such person's
conduct which is finally adjudged to have been willful misconduct, knowingly
fraudulent or deliberately dishonest; (iv) if a court of competent jurisdiction
finally determines that any indemnification hereunder is unlawful; (v) for acts
or omissions involving intentional misconduct or knowing and culpable violation
of law; (vi) for acts or omissions that the director or officer believes to be
contrary to the best interests of the corporation or its shareholders or that
involve the absence of good faith on the part of the director or officer; (vii)
for any transaction

                                       15



from which the director or officer derived an improper personal benefit; (viii)
for acts or omissions that show a reckless disregard for the director's or
officer's duty to the corporation or its shareholders in circumstances in which
the director or officer was aware, or should have been aware, in the ordinary
course of performing his duties, of a risk of serious injury to the corporation
or its shareholders; (ix) for acts or omissions that constitute an unexcused
pattern of inattention that amounts to an abdication of the director's or
officer's duties to the corporation or its shareholders; (x) for costs, charges,
expenses, liabilities and losses arising under Section 310 or 316 of the General
Corporation Law of California (the "Law"); and (xi) as to circumstances in which
indemnity is expressly prohibited by Section 317 of the Law. The right to
indemnification conferred in this Article shall be a contract right and shall
include the right to be paid by the corporation expenses incurred in defending
any proceeding in advance of its final disposition; provided, however, that if
the Law requires the payment of such expenses incurred by a director or officer
in his or her capacity as a director or officer (and not in any other capacity
in which service was or is rendered by such person while a director or officer,
including, without limitation, service to an employee benefit plan) in advance
of the final disposition of a proceeding, shall be made only upon delivery to
the corporation of an undertaking, by or on behalf of such director or officer,
to repay all amounts to the corporation unless it shall be determined ultimately
that such person is not entitled to be indemnified. No indemnity shall be
provided under this provision for any liability arising out of any act or
omission committed or occurring prior to the date an amendment containing this
provision is filed with the Secretary of State of California.

          Section 2. INDEMNIFICATION OF AGENTS. A person who was or is a party
or is threatened to be made a party to or is involved in any proceeding by
reason of the fact that he or she is or was an employee or agent of the
corporation or is or was serving at the request of the corporation as an
employee or agent of another enterprise, including service with respect to
employee benefit plans, whether the basis of such action is an alleged action or
inaction in an official capacity or in any other capacity while serving as an
employee or agent, may, subject to the terms of any agreement between the
corporation and such person, be indemnified and held harmless by the corporation
to the fullest extent permitted by California law and the corporation's Articles
of Incorporation, against all costs, charges, expenses, liabilities and losses
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement) reasonably incurred or suffered by
such person in connection therewith. The immediately preceding sentence is not
intended to be and shall not be considered to confer a contract right on any
employee or agent of the corporation.

          Section 3. RIGHT OF DIRECTORS AND OFFICERS TO BRING SUIT. If a claim
under Section 1 of this Article is not paid in full by the corporation within 30
days after a written claim has been received by the corporation, the claimant
may at any time thereafter bring suit against the corporation to recover the
unpaid amount of the claim and, if successful in whole or in part, the claimant
shall also be entitled to be paid the expense of prosecuting such claim. It
shall be a defense to any such action (other than an action brought to enforce a
claim for expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any is required, has been
tendered to the corporation) that the claimant has failed to meet a standard of
conduct, if any, required to make it permissible under California law for the
corporation to indemnify the claimant for the amount claimed. Neither the
failure of the corporation (including its Board of Directors, independent legal
counsel or its shareholders)

                                       16



to have made a determination prior to the commencement of such action and
indemnification of the claimant is permissible in the circumstances because he
or she has met such standard of conduct, nor an actual determination by the
corporation (including its Board of Directors, independent legal counsel or its
shareholders) that the claimant has not met such standard of conduct, shall be a
defense to the action or create a presumption that the claimant has failed to
meet such standard of conduct.

          Section 4. SUCCESSFUL DEFENSE. Notwithstanding any other provision of
this Article, to the extent that a director or officer has been successful on
the merits or otherwise (including the dismissal of an action without prejudice
or the settlement of a proceeding without admission of liability) in defense of
any proceeding referred to in Section 1 or, in defense of any claim, issue or
matter therein, he shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection therewith.

          Section 5. NON-EXCLUSIVITY OF RIGHTS. The right to indemnification
provided by this Article shall not be exclusive of any other right which any
person may have or hereafter acquire under any statute, bylaw, agreement, vote
of shareholders or disinterested directors or otherwise.

          Section 6. INSURANCE. The corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
corporation or another corporation, partnership, joint venture, trust or other
enterprise against any such expense, liability or loss, whether or not the
corporation would have the power to indemnify such person against such expense,
liability or loss under California law.

          Section 7. EXPENSES AS A WITNESS. To the extent that any director,
officer, employee or agent of the corporation is by reason of such position, or
a position with another entity at the request of the corporation, a witness in
any action, suit or proceeding, he may be indemnified against all costs and
expenses actually and reasonably incurred by him or her or on his or her behalf
in connection therewith.

          Section 8. INDEMNITY AGREEMENTS. The corporation may enter into
agreements with any director, officer, employee or agent of the corporation
providing for indemnification to the fullest extent permissible under California
law and the corporation's Articles of Incorporation.

                                       17

EX-3.10

                                                                    Exhibit 3.10

                    CERTIFICATE OF AMENDMENT AND RESTATEMENT
                                       OF
                            ARTICLES OF INCORPORATION
                                       OF
                          FOUCE AMUSEMENT ENTERPRISES,
                            a California corporation


          Frank L. Fouce and Betty L. Fouce certify that:

          1.   They are the duly elected and acting President and Secretary,
respectively, of Fouce Amusement Enterprises, a California corporation.

          2.   The Articles of Incorporation of the Corporation are amended and
restated to read in their entirety as follows:

               One:   The name of the Corporation is Fouce Amusement
          Enterprises.

               Two:   The Corporation elects to be governed by all of the
          provisions of the General Corporation Law (as added to the California
          Corporations Code effective January 1, 1977, and as subsequently
          amended) not otherwise applicable to the Corporation under Chapter 23
          of the General Corporation Law.

               Three: The purpose of the Corporation is to engage in any lawful
          act or activity for which a corporation may be organized under the
          General Corporation law of California other than the banking business,
          the trust company business or the practice of a profession permitted
          to be incorporated by the California Corporations Code.

               Four:  The total number of shares of all classes of stock which
          the Corporation shall have the authority to issue is TWO THOUSAND
          (2,000) shares of Common Stock, without par value.

               Five:  The liability of the directors of the Corporation for
          monetary damages shall be eliminated to the fullest extent permissible
          under California law.

          The Corporation is authorized to provide indemnification of agents (as
          defined in Section 317 of the California Corporations Code) through
          bylaw provisions, agreements with agents, vote of shareholders or
          disinterested directors or otherwise, in excess of the indemnification
          otherwise permitted by Section 317 of the California Corporations
          Code, subject only to the applicable limits set forth in



          Section 204 of the California Corporations Code with respect to
          actions for breach of duty to the Corporation and its shareholders.
          Any repeal or modification of the foregoing provisions of this Section
          Five by the shareholder(s) of the Corporation shall not adversely
          affect any right of indemnification or limitation of liability of a
          director or officer of the Corporation relating to acts or omissions
          occurring prior to such repeal or modification.

          3.   The foregoing Restated and Amended Articles of Incorporation have
been duly approved by the Board of Directors of the Corporation.

          4.   The foregoing Article Amendments were approved by the required
vote of the shareholders of the Corporation in accordance with Section 902 of
the California General Corporation Law. The total number of outstanding shares
of the Corporation is 200. The number of shares voting in favor of the amendment
equaled 100% of the outstanding shares.

          IN WITNESS WHEREOF, the undersigned executed this Certificate on
December 22, 1997.

                                   /s/ Frank L. Fouce
                                  -------------------------------
                                  Frank L. Fouce, President

                                   /s/ Betty L. Fouce
                                  -------------------------------
                                  Betty L. Fouce, Secretary

          The undersigned, Frank L. Fouce and Betty L. Fouce, the President and
Secretary, respectively, of Fouce Amusement Enterprises, a California
corporation, each declares under penalty of perjury that the matters set out in
the foregoing Certificate of Amendment and Restatement are true of his own
knowledge.

          Executed at Las Vegas, Nevada on December 22, 1997.

                                   /s/ Frank L. Fouce
                                  -------------------------------
                                  Frank L. Fouce, President

                                   /s/ Betty L. Fouce
                                  -------------------------------
                                  Betty L. Fouce, Secretary
                                                                         [STAMP]

                                       -2-



                            CERTIFICATE OF AMENDMENT
                                       OF
                            ARTICLES OF INCORPORATION
                                       OF
                          FOUCE AMUSEMENT ENTERPRISES,
                            a California corporation


          Jose Liberman and Lenard D. Liberman certify that:

          1.   They are the duly elected and acting President and Secretary,
respectively, of Fouce Amusement Enterprises, a California corporation.

          2.   Article One of the Articles of Incorporation of the corporation
shall be amended in its entirety to read as follows:

               "One: The name of the corporation is KRCA Television, Inc."

          3.   The foregoing amendment has been approved by the Board of
Directors of the corporation.

          4.   The foregoing amendment was approved by the required vote of the
shareholders of the corporation in accordance with Section 902 of the California
General Corporation Law. The total number of outstanding shares of the
corporation is 200. The number of shares voting in favor of the amendment
equaled 100% of the outstanding shares.

          The undersigned each further declares under penalty of perjury that
the matters set out in the foregoing Certificate of Amendment are true of his
own knowledge.

          IN WITNESS WHEREOF, the undersigned executed this Certificate on
January 6, 1998.

                               /s/ Jose Liberman
                              -------------------------------------------------
                              Jose Liberman, President

                               /s/ Lenard D. Liberman
                              -------------------------------------------------
                              Lenard D. Liberman, Secretary

EX-3.11

                                                                    Exhibit 3.11

                           AMENDED AND RESTATED BYLAWS

                                       OF

                             KRCA TELEVISION, INC.,
                            a California corporation



                                      INDEX



                                                                               Page
                                                                               ----
                                                                            
ARTICLE I - Offices.

     Section 1.   PRINCIPAL EXECUTIVE OFFICE ...............................      1
     Section 2.   OTHER OFFICES ............................................      1

ARTICLE II - Shareholders.

     Section 1.   PLACE OF MEETINGS ........................................      1
     Section 2.   ANNUAL MEETINGS ..........................................      1
     Section 3.   SPECIAL MEETINGS .........................................      1
     Section 4.   NOTICE OF ANNUAL OR SPECIAL MEETINGS .....................      1
     Section 5.   QUORUM ...................................................      2
     Section 6.   ADJOURNED MEETINGS AND NOTICE THEREOF ....................      2
     Section 7.   VOTING ...................................................      2
     Section 8.   RECORD DATE ..............................................      4
     Section 9.   CONSENT OF ABSENTEES .....................................      5
     Section 10.  ACTION WITHOUT MEETING ...................................      5
     Section 11.  PROXIES ..................................................      5
     Section 12.  INSPECTORS OF ELECTION ...................................      6
     Section 13.  CONDUCT OF MEETING .......................................      6

ARTICLE III - Directors.

     Section 1.   POWERS ...................................................      6
     Section 2.   NUMBER OF DIRECTORS ......................................      7
     Section 3.   ELECTION AND TERM OF OFFICE ..............................      7
     Section 4.   VACANCIES ................................................      7
     Section 5.   PLACE OF MEETING .........................................      8
     Section 6.   REGULAR MEETINGS .........................................      8
     Section 7.   SPECIAL MEETINGS .........................................      8
     Section 8.   QUORUM ...................................................      8
     Section 9.   PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE ........      9
     Section 10.  WAIVER OF NOTICE .........................................      9
     Section 11.  ADJOURNMENT ..............................................      9
     Section 12.  FEES AND COMPENSATION ....................................      9
     Section 13.  ACTION WITHOUT MEETING ...................................      9
     Section 14.  RIGHTS OF INSPECTION .....................................      9
     Section 15.  COMMITTEES ...............................................      9

ARTICLE IV - Officers.

     Section 1.   OFFICERS .................................................     10
     Section 2.   ELECTION .................................................     10
     Section 3.   SUBORDINATE OFFICERS .....................................     10


                                        i



                                                                            
     Section 4.   REMOVAL AND RESIGNATION ..................................     11
     Section 5.   VACANCIES ................................................     11
     Section 6.   CHAIRMAN OF THE BOARD ....................................     11
     Section 7.   PRESIDENT ................................................     11
     Section 8.   VICE PRESIDENTS ..........................................     11
     Section 9.   SECRETARY ................................................     11
     Section 10.  CHIEF FINANCIAL OFFICER ..................................     12

ARTICLE V - Other Provisions.

     Section 1.   INSPECTION OF CORPORATE RECORDS ..........................     12
     Section 2.   INSPECTION OF BYLAWS .....................................     13
     Section 3.   ENDORSEMENT OF DOCUMENTS; CONTRACTS ......................     13
     Section 4.   CERTIFICATES OF STOCK ....................................     13
     Section 5.   REPRESENTATION OF SHARES OF OTHER CORPORATIONS ...........     14
     Section 6.   STOCK PURCHASE PLANS .....................................     14
     Section 7.   CONSTRUCTION AND DEFINITIONS .............................     14
     Section 8.   AMENDMENTS ...............................................     14
     Section 9.   ANNUAL REPORT TO SHAREHOLDERS ............................     15

ARTICLE VI - Indemnification.

     Section 1.   INDEMNIFICATION OF DIRECTORS AND OFFICERS ................     15
     Section 2.   INDEMNIFICATION OF AGENTS ................................     16
     Section 3.   RIGHT OF DIRECTORS AND OFFICERS TO BRING SUIT ............     16
     Section 4.   SUCCESSFUL DEFENSE .......................................     17
     Section 5.   NON-EXCLUSIVITY OF RIGHTS ................................     17
     Section 6.   INSURANCE ................................................     17
     Section 7.   EXPENSES AS A WITNESS ....................................     17
     Section 8.   INDEMNITY AGREEMENTS .....................................     17



                                       ii



                           AMENDED AND RESTATED BYLAWS

                           for the regulation, except
                       as otherwise provided by statute or
                         its Articles of Incorporation,

                                       of

                             KRCA TELEVISION, INC.,
                            a California corporation


                              ARTICLE I. Offices.

          Section 1. PRINCIPAL EXECUTIVE OFFICE. The corporation's principal
executive office shall be fixed and located at such place as the Board of
Directors (herein called the "Board") shall determine. The Board is granted full
power and authority to change said principal executive office from one location
to another.

          Section 2. OTHER OFFICES. Branch or subordinate offices may be
established at any time by the Board at any place or places.

                           ARTICLE II. Shareholders.

          Section 1. PLACE OF MEETINGS. Meetings of shareholders shall be held
either at the principal executive office of the corporation or at any other
place within or without the State of California which may be designated either
by the Board or by the written consent of all persons entitled to vote thereat,
given either before or after the meeting and filed with the Secretary.

          Section 2. ANNUAL MEETINGS. The annual meetings of shareholders shall
be held on such date and at such time as may be fixed by the Board.

          Section 3. SPECIAL MEETINGS. Special meetings of the shareholders may
be called at any time by the Board, the Chairman of the Board, the President, or
by the holders of shares entitled to cast not less than ten percent of the votes
at such meeting. Upon request in writing to the Chairman of the Board, the
President, any Vice President or the Secretary by any person (other than the
Board) entitled to call a special meeting of shareholders, the officer forthwith
shall cause notice to be given to the shareholders entitled to vote that a
meeting will be held at a time requested by the person or persons calling the
meeting, not less than thirty-five nor more than sixty days after the receipt of
the request. If the notice is not given within twenty days after receipt of the
request, the persons entitled to call the meeting may give the notice.

          Section 4. NOTICE OF ANNUAL OR SPECIAL MEETINGS. Written notice of
each annual or special meeting of shareholders shall be given not less than ten
nor more than sixty days before the date of the meeting to each shareholder
entitled to vote thereat. Such notice shall state the place, date and hour of
the meeting and (i) in the case of a special meeting,



the general nature of the business to be transacted, and no other business may
be transacted, or (ii) in the case of the annual meeting, those matters which
the Board, at the time of the mailing of the notice, intends to present for
action by the shareholders, but, subject to the provisions of applicable law,
any proper matter may be presented at the meeting for such action. The notice of
any meeting at which directors are to be elected shall include the names of
nominees intended at the time of the notice to be presented by management for
election.

          Notice of a shareholders' meeting shall be given either personally or
by mail or by other means of written communication, addressed to the shareholder
at the address of such shareholder appearing on the books of the corporation or
given by the shareholder to the corporation for the purpose of notice, or, if no
such address appears or is given, at the place where the principal executive
office of the corporation is located or by publication at least once in a
newspaper of general circulation in the county in which the principal executive
office is located. Notice by mail shall be deemed to have been given at the time
a written notice is deposited in the United States mails, postage prepaid. Any
other written notice shall be deemed to have been given at the time it is
personally delivered to the recipient or is delivered to a common carrier for
transmission, or actually transmitted by the person giving the notice by
electronic means, to the recipient.

          Section 5. QUORUM. A majority of the shares entitled to vote,
represented in person or by proxy, shall constitute a quorum at any meeting of
shareholders. If a quorum is present, the affirmative vote of a majority of the
shares represented and voting at the meeting (which shares voting affirmatively
also constitute at least a majority of the required quorum) shall be the act of
the shareholders, unless the vote of a greater number or voting by classes is
required by law or by the Articles, except as provided in the following
sentence. The shareholders present at a duly called or held meeting at which a
quorum is present may continue to do business until adjournment, notwithstanding
the withdrawal of enough shareholders to leave less than a quorum, if any action
taken (other than adjournment) is approved by at least a majority of the shares
required to constitute a quorum.

          Section 6. ADJOURNED MEETINGS AND NOTICE THEREOF. Any Shareholders'
meeting, whether or not a quorum is present, may be adjourned from time to time
by the vote of a majority of the shares represented either in person or by
proxy, but in the absence of a quorum (except as provided in Section 5 of this
Article) no other business may be transacted at such meeting.

          It shall not be necessary to give any notice of the time and place of
the adjourned meeting or of the business to be transacted thereat, other than by
announcement at the meeting at which such adjournment is taken; provided,
however, when any shareholders' meeting is adjourned for more than 45 days or,
if after adjournment a new record date is fixed for the adjourned meeting,
notice of the adjourned meeting shall be given as in the case of an original
meeting.

          Section 7. VOTING. The shareholders entitled to notice of any meeting
or to vote at any such meeting shall be only persons in whose name shares stand
on the stock records of the corporation on the record date determined in
accordance with Section 8 of this Article.

                                        2



          Subject to the following sentence and to the provisions of Section 708
of the California General Corporation Law, every shareholder entitled to vote at
any election of directors may cumulate such shareholder's votes and give one
candidate a number of votes equal to the number of directors to be elected
multiplied by the number of votes to which the shareholder's shares are
entitled, or distribute the shareholder's votes on the same principle among as
many candidates as the shareholder thinks fit. No shareholder shall be entitled
to cumulate votes for any candidate or candidates pursuant to the preceding
sentence unless such candidate or candidates' names have been placed in
nomination prior to the voting and the shareholder has given notice at the
meeting prior to the voting of the shareholder's intention to cumulate the
shareholder's votes. If any one shareholder has given such notice, all
shareholders may cumulate their votes for candidates in nomination.

          Elections need not be by ballot, provided, however, that all elections
for directors must be by ballot upon demand made by a shareholder at the meeting
and before the voting begins.

          In any election of directors, the candidates receiving the highest
number of votes of the shares entitled to be voted for them up to the number of
directors to be elected by such shares are elected.

          Voting shall in all cases be subject to the provisions of Chapter 7 of
the California General Corporation Law, and to the following provisions:

          (a)  Subject to clause (g), shares held by an administrator, executor,
guardian, conservator or custodian may be voted by such holder either in person
or by proxy, without a transfer of such shares into the holder's name; and
shares standing in the name of a trustee may be voted by the trustee, either in
person or by proxy, but no trustee shall be entitled to vote shares held by such
trustee without a transfer of such shares into the trustee's name.

          (b)  Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into the receiver's name if authority
to do so is contained in the order of the court by which such receiver was
appointed.

          (c)  Subject to the provisions of Section 705 of the California
General Corporation Law and except where otherwise agreed in writing between the
parties, a shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.

          (d)  Shares standing in the name of a minor may be voted and the
corporation may treat all rights incident thereto as exercisable by the minor,
in person or by proxy, whether or not the corporation has notice, actual or
constructive, of the nonage, unless a guardian of the minor's property has been
appointed and written notice of such appointment given to the corporation.

          (e)  Shares standing in the name of another corporation, domestic or
foreign, may be voted by such officer, agent or proxyholder as the bylaws of
such other corporation may

                                        3



prescribe or, in the absence of such provision, as the Board of Directors of
such other corporation may determine or, in the absence of such determination,
by the chairman of the board, president or any vice president of such other
corporation, or by any other person authorized to do so by the chairman of the
board, president or any vice president of such other corporation. Shares which
are purported to be voted or any proxy purported to be executed in the name of a
corporation (whether or not any title of the person signing is indicated) shall
be presumed to be voted or the proxy executed in accordance with the provisions
of this clause, unless the contrary is shown.

          (f)  Shares of the corporation owned by any subsidiary shall not be
entitled to vote on any matter.

          (g)  Shares held by the corporation in a fiduciary capacity, and
shares of the issuing corporation held in a fiduciary capacity by any
subsidiary, shall not be entitled to vote on any matter, except to the extent
that the settlor or beneficial owner possesses and exercises a right to vote or
to give the corporation binding instructions as to how to vote such shares.

          (h)  If shares stand of record in the names of two or more persons,
whether fiduciaries, members of a partnership, joint tenants, tenants in common,
husband and wife as community property, tenants by the entirety, voting
trustees, persons entitled to vote under a shareholder voting agreement or
otherwise, or if two or more persons (including proxyholders) have the same
fiduciary relationship respecting the same shares, unless the secretary of the
corporation is given written notice to the contrary and is furnished with a copy
of the instrument or order appointing them or creating the relationship wherein
it is so provided, their acts with respect to voting shall have the following
effect:

               (i)   If only one votes, such act binds all;

               (ii)  If more than one vote, the act of the majority so voting
     binds all;

               (iii) If more than one vote, but the vote is evenly split on any
     particular matter, each faction may vote the securities in question
     proportionately.

If the instrument so filed or the registration of the shares shows that any such
tenancy is held in unequal interests, a majority or even split for the purpose
of this section shall be a majority or even split in interest.

          Section 8. RECORD DATE. The Board may fix, in advance, a record date
for the determination of the shareholders entitled to notice of any meeting or
to vote or entitled to receive payment of any dividend or other distribution, or
any allotment of rights, or to exercise rights in respect of any other lawful
action. The record date so fixed shall be not more than 60 days nor less than 10
days prior to the date of the meeting nor more than 60 days prior to any other
action. When a record date is so fixed, only shareholders of record on that date
are entitled to notice of and to vote at the meeting or to receive the dividend,
distribution, or allotment of rights, or to exercise the rights, as the case may
be, notwithstanding any transfer of shares on the books of the corporation after
the record date. A determination of shareholders of record entitled to notice of
or to vote at a meeting of shareholders shall apply to any adjournment of the
meeting unless the Board fixes a new record date for the adjourned meeting. The
Board shall fix a new record date if the meeting is adjourned for more than
forty-five days.

                                        4



          If no record date is fixed by the Board, the record date for
determining shareholders entitled to notice of or to vote at a meeting of
shareholders shall be at the close of business on the business day next
preceding the day on which notice is given or, if notice is waived, at the close
of business on the business day next preceding the day on which the meeting is
held. The record date for determining shareholders for any purpose other than
set forth in this Section 8 or Section 10 of this Article shall be at the close
of business on the day on which the Board adopts the resolution relating
thereto, or the sixtieth day prior to the date of such other action, whichever
is later.

          Section 9.  CONSENT OF ABSENTEES. The transactions of any meeting of
shareholders, however called and noticed, and wherever held, are as valid as
though had at a meeting duly held after regular call and notice, if a quorum is
present either in person or by proxy, and if, either before or after the
meeting, each of the persons entitled to vote, not present in person or by
proxy, signs a written waiver of notice, or a consent to the holding of the
meeting or an approval of the minutes thereof. All such waivers, consents or
approvals shall be filed with the corporate records or made a part of the
minutes of the meeting. Attendance of a person at a meeting shall constitute a
waiver of notice of and presence at such meeting, except when the person
objects, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened and except that
attendance at a meeting is not a waiver of any right to object to the
consideration of matters required by the California General Corporation Law to
be included in the notice but not so included, if such objection is expressly
made at the meeting. Neither the business to be transacted at nor the purpose of
any regular or special meeting of shareholders need be specified in any written
waiver of notice, consent to the holding of the meeting or approval of the
minutes thereof, except as provided in Section 601(f) of the California General
Corporation Law.

          Section 10. ACTION WITHOUT MEETING. Subject to Section 603 of the
California General Corporation Law, any action which, under any provision of the
California General Corporation Law, may be taken at any annual or special
meeting of shareholders, may be taken without a meeting and without prior notice
if a consent in writing, setting forth the action so taken, shall be signed by
the holders of outstanding shares having not less than the minimum number of
votes that would be necessary to authorize or take such action at a meeting at
which all shares entitled to vote thereon were present and voted. Unless a
record date for voting purposes be fixed as provided in Section 8 of this
Article, the record date for determining shareholders entitled to give consent
pursuant to this Section 10, when no prior action by the Board has been taken,
shall be the day on which the first written consent is given.

          Section 11. PROXIES. Every person entitled to vote shares has the
right to do so either in person or by one or more persons authorized by a
written proxy executed by such shareholder and filed with the Secretary. Any
proxy duly executed is not revoked and continues in full force and effect until
revoked by the person executing it prior to the vote pursuant thereto. Such
revocation may be effected either, (i) by a writing delivered to the Secretary
of the Corporation stating that the proxy is revoked, (ii) by a subsequent proxy
executed by the person executing the prior proxy and presented to the meeting,
or (iii) by attendance at the meeting and voting in person by the person
executing the proxy; provided, however, that no proxy shall be valid after the
expiration of eleven months from the date of its execution unless otherwise
provided in the proxy.

                                        5



          Section 12. INSPECTORS OF ELECTION. In advance of any meeting of
shareholders, the Board may appoint inspectors of election to act at such
meeting and any adjournment thereof. If inspectors of election be not so
appointed, or if any persons so appointed fail to appear or refuse to act, the
chairman of any such meeting may, and on the request of any shareholder or
shareholder's proxy shall, make such appointment at the meeting. The number of
inspectors shall be either one or three. If appointed at a meeting on the
request of one or more shareholders or proxies, the majority of shares present
shall determine whether one or three inspectors are to be appointed.

          The duties of such inspectors shall be as prescribed by Section 707(b)
of the California General Corporation Law and shall include: determining the
number of shares outstanding and the voting power of each; determining the
shares represented at the meeting; determining the existence of a quorum;
determining the authenticity, validity and effect of proxies; receiving votes,
ballots or consents; hearing and determining all challenges and questions in any
way arising in connection with the right to vote; counting and tabulating all
votes or consents; determining when the polls shall close; determining the
result; and doing such acts as may be proper to conduct the election or vote
with fairness to all shareholders. If there are three inspectors of election,
the decision, act or certificate of a majority is effective in all respects as
the decision, act or certificate of all.

          Section 13. CONDUCT OF MEETING. The President shall preside as
chairman at all meetings of the shareholders. The chairman shall conduct each
such meeting in a businesslike and fair manner, but shall not be obligated to
follow any technical, formal or parliamentary rules or principles of procedure.
The chairman's rulings on procedural matters shall be conclusive and binding on
all shareholders, unless at the time of a ruling a request for a vote is made to
the shareholders holding shares entitled to vote and which are represented in
person or by proxy at the meeting, in which case the decision of a majority of
such shares shall be conclusive and binding on all shareholders. Without
limiting the generality of the foregoing, the chairman shall have all of the
powers usually vested in the chairman of a meeting of shareholders.

                            ARTICLE III. Directors.

          Section 1.  POWERS. Subject to limitations of the Articles, of these
Bylaws and of the California General Corporation Law relating to action required
to be approved by the shareholders or by the outstanding shares, the business
and affairs of the corporation shall be managed and all corporate powers shall
be exercised by or under the direction of the Board. The Board may delegate the
management of the day-to-day operation of the business of the corporation to a
management company or other person provided that the business and affairs of the
corporation shall be managed and all corporate powers shall be exercised under
the ultimate direction of the Board. Without prejudice to such general powers,
but subject to the same limitations, it is hereby expressly declared that the
Board shall have the following powers in addition to the other powers enumerated
in these Bylaws:

          (a)  To select and remove all the other officers, agents and employees
of the corporation, prescribe the powers and duties for them as may not be
inconsistent with law, the

                                        6



Articles or these Bylaws, fix their compensation and require from them security
for faithful service.

          (b)  To conduct, manage and control the affairs and business of the
corporation and to make such rules and regulations therefor not inconsistent
with law, the Articles or these Bylaws, as they may deem best.

          (c)  To adopt, make and use a corporate seal, and to prescribe the
forms of certificates of stock, and to alter the form of such seal and of such
certificates from time to time as they may deem best.

          (d)  To authorize the issuance of shares of stock of the corporation
from time to time, upon such terms and for such consideration as may be lawful.

          (e)  To borrow money and incur indebtedness for the purposes of the
corporation, and to cause to be executed and delivered therefor, in the
corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages,
pledges, hypothecations or other evidences of debt and securities therefor.

          Section 2. NUMBER OF DIRECTORS. The authorized number of directors
shall be two (2) until changed by amendment of the Articles or by a Bylaw duly
adopted by the shareholders amending this Section 2.

          Section 3. ELECTION AND TERM OF OFFICE. The directors shall be elected
at each annual meeting of the shareholders, but if any such annual meeting is
not held or the directors are not elected thereat, the directors may be elected
at any special meeting of shareholders held for that purpose. Each director
shall hold office until the next annual meeting and until a successor has been
elected and qualified.

          Section 4. VACANCIES. Any director may resign effective upon giving
written notice to the Chairman of the Board, the President, the Secretary or the
Board, unless the notice specifies a later time for the effectiveness of such
resignation. If the resignation is effective at a future time, a successor may
be elected to take office when the resignation becomes effective.

          Vacancies in the Board, except those existing as a result of a removal
of a director, may be filled by a majority of the remaining directors, though
less than a quorum, or by a sole remaining director, and each director so
elected shall hold office until the next annual meeting and until such
director's successor has been elected and qualified.

          A vacancy or vacancies in the Board shall be deemed to exist in case
of the death, resignation or removal of any director, or if the authorized
number of directors be increased, or if the shareholders fail, at any annual or
special meeting of shareholders at which any director or directors are elected,
to elect the full authorized number of directors to be voted for at that
meeting.

          The Board may declare vacant the office of a director who has been
declared of unsound mind by an order of court or convicted of a felony.

                                        7



          The shareholders may elect a director or directors at any time to fill
any vacancy or vacancies not filled by the directors. Any such election by
written consent other than to fill a vacancy created by removal requires the
consent of a majority of the outstanding shares entitled to vote. Any such
election by written consent to fill a vacancy created by removal requires
unanimous consent.

          No reduction of the authorized number of directors shall have the
effect of removing any director prior to the expiration of the director's term
of office.

          Section 5. PLACE OF MEETING. Regular or special meetings of the Board
shall be held at any place within or without the State of California which has
been designated from time to time by the Board. In the absence of such
designation, regular meetings shall be held at the principal executive office of
the corporation.

          Section 6. REGULAR MEETINGS. Immediately following each annual meeting
of shareholders the Board shall hold a regular meeting for the purpose of
organization, election of officers and the transaction of other business.

          Other regular meetings of the Board shall be held without call on such
dates and at such times as may be fixed by the Board. Call and notice of all
regular meetings of the Board are hereby dispensed with.

          Section 7. SPECIAL MEETINGS. Special meetings of the Board for any
purpose or purposes may be called at any time by the Chairman of the Board, the
President, any Vice President, the Secretary or by any two directors.

          Special meetings of the Board shall be held upon four days' written
notice or forty-eight hours' notice given personally or by telephone, telegraph,
telex or other similar means of communication. Any such notice shall be
addressed or delivered to each director at such director's address as it is
shown upon the records of the corporation or as may have been given to the
corporation by the director for purposes of notice or, if such address is not
shown on such records or is not readily ascertainable, at the place in which the
meetings of the directors are regularly held.

          Notice by mail shall be deemed to have been given at the time a
written notice is deposited in the United States mails, postage prepaid. Any
other written notice shall be deemed to have been given at the time it is
personally delivered to the recipient or is delivered to a common carrier for
transmission, or actually transmitted by the person giving the notice by
electronic means, to the recipient. Oral notice shall be deemed to have been
given at the time it is communicated, in person or by telephone or wireless, to
the recipient or to a person at the office of the recipient who the person
giving the notice has reason to believe will promptly communicate it to the
recipient.

          Section 8. QUORUM. A majority of the authorized number of directors
constitutes a quorum of the board for the transaction of business, except to
adjourn as provided in Section 11 of this Article. Every act or decision done or
made by a majority of the directors present at a meeting duly held at which a
quorum is present shall be regarded as the act of the Board, unless a greater
number be required by law or by the Articles. A meeting at which a

                                        8



quorum is initially present may continue to transact business notwithstanding
the withdrawal of directors, if any action taken is approved by at least a
majority of the required quorum for such meeting.

          Section 9.  PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE. Members
of the Board may participate in a meeting through use of conference telephone or
similar communications equipment, so long as all members participating in such
meeting can hear one another.

          Section 10. WAIVER OF NOTICE. Notice of a meeting need not be given to
any director who signs a waiver of notice or a consent to holding the meeting or
an approval of the minutes thereof, whether before or after the meeting, or who
attends the meeting without protesting, prior thereto or at its commencement,
the lack of notice to such director. All such waivers, consents and approvals
shall be filed with the corporate records or made a part of the minutes of the
meeting.

          Section 11. ADJOURNMENT. A majority of the directors present, whether
or not a quorum is present, may adjourn any directors' meeting to another time
and place. Notice of the time and place of holding an adjourned meeting need not
be given to absent directors if the time and place be fixed at the meeting
adjourned, except as provided in the next sentence. If the meeting is adjourned
for more than 24 hours, notice of any adjournment to another time or place shall
be given prior to the time of the adjourned meeting to the directors who were
not present at the time of the adjournment.

          Section 12. FEES AND COMPENSATION. Directors and members of committees
may receive such compensation, if any, for their services, and such
reimbursement for expenses, as may be fixed or determined by the Board.

          Section 13. ACTION WITHOUT MEETING. Any action required or permitted
to be taken by the Board may be taken without a meeting if all members of the
Board shall individually or collectively consent in writing to such action. Such
consent or consents shall have the same effect as a unanimous vote of the Board
and shall be filed with the minutes of the proceedings of the Board.

          Section 14. RIGHTS OF INSPECTION. Every director shall have the
absolute right at any reasonable time to inspect and copy all books, records and
documents of every kind and to inspect the physical properties of the
corporation and also of its subsidiary corporations, domestic or foreign. Such
inspection by a director may be made in person or by agent or attorney and
includes the right to copy and obtain extracts.

          Section 15. COMMITTEES. The Board may appoint one or more committees,
each consisting of two or more directors, and delegate to such committees any of
the authority of the Board except with respect to:

          (a)  The approval of any action for which the General Corporation Law
also requires shareholders' approval or approval of the outstanding shares;

          (b)  The filling of vacancies in the Board or on any committee;

                                        9



          (c)  The fixing of compensation of the directors for serving on the
Board or on any committee;

          (d)  The amendment or repeal of bylaws or the adoption of new bylaws;

          (e)  The amendment or repeal of any resolution of the Board which by
its express term is not so amendable or repealable;

          (f)  A distribution to the shareholders of the corporation except at a
rate or in a periodic amount or within a price range determined by the Board; or

          (g)  The appointment of other committees of the Board or the members
thereof.

          Any such committee must be designated, and the members or alternate
members thereof appointed, by resolution adopted by a majority of the authorized
number of directors and any such committee may be designated an Executive
Committee or by such other name as the Board shall specify. Alternate members of
a committee may replace any absent member at any meeting of the committee. The
Board shall have the power to prescribe the manner in which proceedings of any
such committee shall be conducted. In the absence of any such prescription, such
committee shall have the power to prescribe the manner in which its proceedings
shall be conducted. Unless the Board or such committee shall otherwise provide,
the regular and special meetings and other actions of any such committee shall
be governed by the provisions of this Article applicable to meetings and actions
of the Board. Minutes shall be kept of each meeting of each committee.

                             ARTICLE IV. Officers.

          Section 1. OFFICERS. The officers of the corporation shall be a
President, a Secretary and a Chief Financial Officer. The corporation may also
have, at the discretion of the Board, a Chairman of the Board, one or more Vice
Presidents, one or more Assistant Secretaries, one or more Assistant Financial
Officers, and such other officers as may be elected or appointed in accordance
with the provisions of Section 3 of this Article.

          Section 2. ELECTION. The officers of the corporation, except such
officers as may be elected or appointed in accordance with the provisions of
Section 3 or Section 5 of this Article, shall be chosen annually by, and shall
serve at the pleasure of, the Board, and shall hold their respective offices
until their resignation, removal, or other disqualification from service, or
until their respective successors shall be elected.

          Section 3. SUBORDINATE OFFICERS. The Board may elect, and may empower
the President to appoint, such other officers as the business of the corporation
may require, each of whom shall hold office for such period, have such authority
and perform such duties as are provided in these Bylaws or as the Board may from
time to time determine.

          Section 4. REMOVAL AND RESIGNATION. Any officer may be removed, either
with or without cause, by the Board at any time or, except in the case of an
officer chosen by the Board, by any officer upon whom such power of removal may
be conferred by the Board.

                                       10



Any such removal shall be without prejudice to the rights, if any, of the
officer under any contract of employment of the officer.

          Any officer may resign at any time by giving written notice to the
corporation, but without prejudice to the rights, if any, of the corporation
under any contract to which the officer is a party. Any such resignation shall
take effect at the date of the receipt of such notice or at any later time
specified therein and, unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective.

          Section 5. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filled in the
manner prescribed in these Bylaws for regular election or appointment to such
office.

          Section 6. CHAIRMAN OF THE BOARD. The Chairman of the Board, if there
shall be such an officer, shall, if present, preside at all meetings of the
Board and exercise and perform such other powers and duties as may be from time
to time assigned by the Board.

          Section 7. PRESIDENT. Subject to such power, if any, as may be given
by the Board to the Chairman of the Board, if there be such an officer, the
President is the general manager and chief executive officer of the corporation
and has, subject to the control of the Board, general supervision, direction and
control of the business and officers of the corporation. The President shall
preside at all meetings of the shareholders and, in the absence of the Chairman
of the Board, or if there be none, at all meetings of the Board. The President
has the general powers and duties of management usually vested in the office of
president and general manager of a corporation and such other powers and duties
as may be prescribed by the Board.

          Section 8. VICE PRESIDENTS. In the absence or disability of the
President, the Vice Presidents in order of their rank as fixed by the Board or,
if not ranked, the Vice President designated by the Board, shall perform all the
duties of the President and, when so acting, shall have all the powers of, and
be subject to all the restrictions upon, the President. The Vice Presidents
shall have such other powers and perform such other duties as from time to time
may be prescribed for them respectively by the Board.

          Section 9. SECRETARY. The Secretary shall keep or cause to be kept, at
the principal executive office and such other place as the Board may order, a
book of minutes of all meetings of shareholders, the Board and its committees,
with the time and place of holding, whether regular or special, and if special,
how authorized, the notice thereof given, the names of those present at Board
and committee meetings, the number of shares present or represented at
shareholders' meetings, and the proceedings thereof. The Secretary shall keep,
or cause to be kept, a copy of the Bylaws of the corporation at the principal
executive office or business office in accordance with Section 213 of the
California General Corporation Law.

          The Secretary shall keep, or cause to be kept, at the principal
executive office or at the office of the corporation's transfer agent or
registrar, if one be appointed, a share register, or a duplicate share register,
showing the names of the shareholders and their addresses, the number and
classes of shares held by each, the number and date of certificates issued for
the same, and the number and date of cancellation of every certificate
surrendered for cancellation.

                                       11



          The Secretary shall give, or cause to be given, notice of all meetings
of the shareholders and of the Board and any committees thereof required by
these Bylaws or by law to be given, shall keep the seal of the corporation in
safe custody, and shall have such other powers and perform such other duties as
may be prescribed by the Board.

          Section 10. CHIEF FINANCIAL OFFICER. The Chief Financial Officer is
the chief financial officer of the corporation and shall keep and maintain, or
cause to be kept and maintained, adequate and correct accounts of the properties
and business transactions of the corporation, and shall send or cause to be sent
to the shareholders of the corporation such financial statements and reports as
are by law or these Bylaws required to be sent to them. The books of account
shall at all times be open to inspection by any director.

          The Chief Financial Officer shall deposit all moneys and other
valuables in the name and to the credit of the corporation with such
depositaries as may be designated by the Board. The Chief Financial Officer
shall disburse the funds of the corporation as may be ordered by the Board,
shall render to the President and the directors, whenever they request it, an
account of all transactions as Chief Financial Officer and of the financial
condition of the corporation, and shall have such other powers and perform such
other duties as may be prescribed by the Board.

                          ARTICLE V. Other Provisions.

          Section 1.  INSPECTION OF CORPORATE RECORDS.

          (a)  A shareholder or shareholders holding at least five percent in
the aggregate of the outstanding voting shares of the corporation or who hold at
least one percent of such voting shares and have filed a Schedule l4B with the
United States Securities and Exchange Commission relating to the election of
directors of the corporation shall have an absolute right to do either or both
of the following:

               (i)  Inspect and copy the record of shareholders' names and
     addresses and shareholdings during usual business hours upon five business
     days' prior written demand upon the corporation; or

               (ii) Obtain from the transfer agent, if any, for the corporation,
     upon five business days' prior written demand and upon the tender of its
     usual charges for such a list (the amount of which charges shall be stated
     to the shareholder by the transfer agent upon request), a list of the
     shareholders' names and addresses who are entitled to vote for the election
     of directors and their shareholdings, as of the most recent record date for
     which it has been compiled or as of a date specified by the shareholder
     subsequent to the date of demand.

          (b)  The record of shareholders shall also be open to inspection and
copying by any shareholder or holder of a voting trust certificate at any time
during usual business hours upon written demand on the corporation, for a
purpose reasonably related to such holder's interest as a shareholder or holder
of a voting trust certificate.

                                       12



          (c)  The accounting books and records and minutes of proceedings of
the shareholders and the Board and committees of the Board shall be open to
inspection upon written demand on the corporation of any shareholder or holder
of a voting trust certificate at any reasonable time during usual business
hours, for a purpose reasonably related to such holder's interests as a
shareholder or as a holder of such voting trust certificate.

          (d)  Any inspection and copying under this Article may be made in
person or by agent or attorney.

          Section 2. INSPECTION OF BYLAWS. The corporation shall keep in its
principal executive office in the State of California, or if its principal
executive office is not in such State at its principal business office in such
State, the original or a copy of these Bylaws as amended to date, which shall be
open to inspection by shareholders at all reasonable times during office hours.
If the principal executive office of the corporation is located outside the
State of California and the corporation has no principal business office in such
state, it shall upon the written request of any shareholder furnish to such
shareholder a copy of these Bylaws as amended to date.

          Section 3. ENDORSEMENT OF DOCUMENTS; CONTRACTS. Subject to the
provisions of applicable law, any note, mortgage, evidence of indebtedness,
contract, share certificate, conveyance or other instrument in writing and any
assignment or endorsements thereof executed or entered into between the
corporation and any other person, when signed by the Chairman of the Board, the
President or any Vice President and the Secretary, any Assistant Secretary, the
Chief Financial Officer or any Assistant Chief Financial Officer of the
corporation shall be valid and binding on the corporation in the absence of
actual knowledge on the part of the other person that the signing officers had
no authority to execute the same. Any such instruments may be signed by any
other person or persons and in such manner as from time to time shall be
determined by the Board, and, unless so authorized by the Board, no officer,
agent or employee shall have any power or authority to bind the corporation by
any contract or engagement or to pledge its credit or to render it liable for
any purpose or amount.

          Section 4. CERTIFICATES OF STOCK. Every holder of shares of the
corporation shall be entitled to have a certificate signed in the name of the
corporation by the Chairman of the Board, the President or a Vice President and
by the Chief Financial Officer or an Assistant Chief Financial Officer or the
Secretary or an Assistant Secretary, certifying the number of shares and the
class or series of shares owned by the shareholder. Any or all of the signatures
on the certificate may be facsimile. If any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the corporation with the same effect
as if such person were an officer, transfer agent or registrar at the date of
issue.

          Certificates for shares may be issued prior to full payment under such
restrictions and for such purposes as the Board may provide; provided, however,
that on any certificate issued to represent any partly paid shares, the total
amount of the consideration to be paid therefor and the amount paid thereon
shall be stated.

                                       13



          Except as provided in this Section, no new certificate for shares
shall be issued in lieu of an old one unless the latter is surrendered and
cancelled at the same time. The Board may, however, if any certificate for
shares is alleged to have been lost, stolen or destroyed, authorize the issuance
of a new certificate in lieu thereof, and the corporation may require that the
corporation be given a bond or other adequate security sufficient to indemnify
it against any claim that may be made against it (including expense or
liability) on account of the alleged loss, theft or destruction of such
certificate or the issuance of such new certificate.

          Section 5. REPRESENTATION OF SHARES OF OTHER CORPORATIONS. The
President or any other officer or officers authorized by the Board or the
President are each authorized to vote, represent and exercise on behalf of the
corporation all rights incident to any and all shares of any other corporation
or corporations standing in the name of the corporation. The authority herein
granted may be exercised either by any such officer in person or by any other
person authorized so to do by proxy or power of attorney duly executed by said
officer.

          Section 6. STOCK PURCHASE PLANS. The corporation may adopt and carry
out a stock purchase plan or agreement or stock option plan or agreement
providing for the issue and sale for such consideration as may be fixed of its
unissued shares, or of issued shares acquired or to be acquired, to one or more
of the employees or directors of the corporation or of a subsidiary or to a
trustee on their behalf and for the payment for such shares in installments or
at one time, and may provide for aiding any such persons in paying for such
shares by compensation for services rendered, promissory notes or otherwise.

          Any such stock purchase plan or agreement or stock option plan or
agreement may include, among other features, the fixing of eligibility for
participation therein, the class and price of shares to be issued or sold under
the plan or agreement, the number of shares which may be subscribed for, the
method of payment therefor, the reservation of title until full payment
therefor, the effect of the termination of employment, an option or obligation
on the part of the corporation to repurchase the shares upon termination of
employment, restrictions upon transfer of the shares, the time limits of and
termination of the plan, and any other matters, not in violation of applicable
law, and may be included in the plan as approved or authorized by the Board or
any committee of the Board.

          Section 7. CONSTRUCTION AND DEFINITIONS. Unless the context otherwise
requires, the general provisions, rules of construction and definitions
contained in the General Provisions of the California Corporations Code and in
the California General Corporation Law shall govern the construction of these
Bylaws.

          Section 8. AMENDMENTS. These Bylaws may be amended or repealed either
by approval of the outstanding shares (as defined in Section 152 of the
California General Corporation Law) or by the approval of the Board; provided,
however, that after the issuance of shares, a bylaw specifying or changing a
fixed number of directors or the maximum or minimum number or changing from a
fixed to a variable number of directors or vice versa may only be adopted by
approval of the outstanding shares, and a bylaw reducing the fixed number or the
minimum number of directors to a number less than five shall be subject to the
provisions of Section 212(a) of the California General Corporation Law.

                                       14



          Section 9. ANNUAL REPORT TO SHAREHOLDERS. The annual report to
shareholders referred to in Section 1501 of the California General Corporation
Law is expressly waived, but nothing herein shall be interpreted as prohibiting
the Board from issuing annual or other periodic reports to shareholders.

                          ARTICLE VI. Indemnification.

          Section 1. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Each person who
was or is a party or is threatened to be made a party to or is involved in any
threatened, pending or completed action, suit or proceeding, whether brought in
the name of the corporation or otherwise and whether of a civil, criminal,
administrative or investigative nature (hereinafter a "proceeding"), by reason
of the fact that he or she, or a person of whom he or she is the legal
representative, is or was a director or officer of the corporation or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is an alleged action or inaction in an official
capacity or in any other capacity while serving as a director or officer, shall,
subject to the terms of any agreement between the corporation and such person,
be indemnified and held harmless by the corporation to the fullest extent
permissible under California law and the corporation's Articles of
Incorporation, against all costs, charges, expenses, liabilities and losses
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement) reasonably incurred or suffered by
such person in connection therewith, and such indemnification shall continue as
to a person who has ceased to be a director or officer and shall inure to the
benefit of his or her heirs, executors and administrators; provided, however,
that the corporation shall indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such person only if
such proceeding (or part thereof) was authorized by the Board of Directors of
the corporation and provided, further, that no such person shall be indemnified
(i) except to the extent that the aggregate of losses to be indemnified exceeds
the amount of such losses for which the director or officer is paid pursuant to
any directors and officers liability insurance policy maintained by the
corporation; (ii) on account of any suit in which judgment is rendered against
such person for an accounting of profits made from the purchase or sale by such
person of securities of the corporation pursuant to the provisions of Section
16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar
provisions of any federal, state or local statutory law; (iii) for expenses,
judgments, funds, penalties or ERISA excise taxes resulting from such person's
conduct which is finally adjudged to have been willful misconduct, knowingly
fraudulent or deliberately dishonest; (iv) if a court of competent jurisdiction
finally determines that any indemnification hereunder is unlawful; (v) for acts
or omissions involving intentional misconduct or knowing and culpable violation
of law; (vi) for acts or omissions that the director or officer believes to be
contrary to the best interests of the corporation or its shareholders or that
involve the absence of good faith on the part of the director or officer; (vii)
for any transaction from which the director or officer derived an improper
personal benefit; (viii) for acts or omissions that show a reckless disregard
for the director's or officer's duty to the corporation or its shareholders in
circumstances in which the director or officer was aware, or should have been
aware, in the ordinary course of performing his duties, of a risk of serious
injury to the corporation or its shareholders; (ix) for acts or omissions that
constitute an unexcused pattern of inattention that amounts to an abdication of
the director's or officer's duties to the corporation or

                                       15



its shareholders; (x) for costs, charges, expenses, liabilities and losses
arising under Section 310 or 316 of the General Corporation Law of California
(the "Law"); and (xi) as to circumstances in which indemnity is expressly
prohibited by Section 317 of the Law. The right to indemnification conferred in
this Article shall be a contract right and shall include the right to be paid by
the corporation expenses incurred in defending any proceeding in advance of its
final disposition; provided, however, that if the Law requires the payment of
such expenses incurred by a director or officer in his or her capacity as a
director or officer (and not in any other capacity in which service was or is
rendered by such person while a director or officer, including, without
limitation, service to an employee benefit plan) in advance of the final
disposition of a proceeding, shall be made only upon delivery to the corporation
of an undertaking, by or on behalf of such director or officer, to repay all
amounts to the corporation unless it shall be determined ultimately that such
person is not entitled to be indemnified. No indemnity shall be provided under
this provision for any liability arising out of any act or omission committed or
occurring prior to the date an amendment containing this provision is filed with
the Secretary of State of California.

          Section 2. INDEMNIFICATION OF AGENTS. A person who was or is a party
or is threatened to be made a party to or is involved in any proceeding by
reason of the fact that he or she is or was an employee or agent of the
corporation or is or was serving at the request of the corporation as an
employee or agent of another enterprise, including service with respect to
employee benefit plans, whether the basis of such action is an alleged action or
inaction in an official capacity or in any other capacity while serving as an
employee or agent, may, subject to the terms of any agreement between the
corporation and such person, be indemnified and held harmless by the corporation
to the fullest extent permitted by California law and the corporation's Articles
of Incorporation, against all costs, charges, expenses, liabilities and losses
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement) reasonably incurred or suffered by
such person in connection therewith. The immediately preceding sentence is not
intended to be and shall not be considered to confer a contract right on any
employee or agent of the corporation.

          Section 3. RIGHT OF DIRECTORS AND OFFICERS TO BRING SUIT. If a claim
under Section 1 of this Article is not paid in full by the corporation within 30
days after a written claim has been received by the corporation, the claimant
may at any time thereafter bring suit against the corporation to recover the
unpaid amount of the claim and, if successful in whole or in part, the claimant
shall also be entitled to be paid the expense of prosecuting such claim. It
shall be a defense to any such action (other than an action brought to enforce a
claim for expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any is required, has been
tendered to the corporation) that the claimant has failed to meet a standard of
conduct, if any, required to make it permissible under California law for the
corporation to indemnify the claimant for the amount claimed. Neither the
failure of the corporation (including its Board of Directors, independent legal
counsel or its shareholders) to have made a determination prior to the
commencement of such action and indemnification of the claimant is permissible
in the circumstances because he or she has met such standard of conduct, nor an
actual determination by the corporation (including its Board of Directors,
independent legal counsel or its shareholders) that the claimant has not met
such standard of conduct, shall be a defense to the action or create a
presumption that the claimant has failed to meet such standard of conduct.

                                       16



          Section 4. SUCCESSFUL DEFENSE. Notwithstanding any other provision of
this Article, to the extent that a director or officer has been successful on
the merits or otherwise (including the dismissal of an action without prejudice
or the settlement of a proceeding without admission of liability) in defense of
any proceeding referred to in Section 1 or, in defense of any claim, issue or
matter therein, he shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection therewith.

          Section 5. NON-EXCLUSIVITY OF RIGHTS. The right to indemnification
provided by this Article shall not be exclusive of any other right which any
person may have or hereafter acquire under any statute, bylaw, agreement, vote
of shareholders or disinterested directors or otherwise.

          Section 6. INSURANCE. The corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
corporation or another corporation, partnership, joint venture, trust or other
enterprise against any such expense, liability or loss, whether or not the
corporation would have the power to indemnify such person against such expense,
liability or loss under California law.

          Section 7. EXPENSES AS A WITNESS. To the extent that any director,
officer, employee or agent of the corporation is by reason of such position, or
a position with another entity at the request of the corporation, a witness in
any action, suit or proceeding, he may be indemnified against all costs and
expenses actually and reasonably incurred by him or her or on his or her behalf
in connection therewith.

          Section 8. INDEMNITY AGREEMENTS. The corporation may enter into
agreements with any director, officer, employee or agent of the corporation
providing for indemnification to the fullest extent permissible under California
law and the corporation's Articles of Incorporation.

                                       17

EX-3.12

                                                                    Exhibit 3.12

                            ARTICLES OF INCORPORATION

                                       OF

                               KRCA LICENSE CORP.

                               Name

           One: The name of the corporation is:

                 KRCA License Corp.


                               Purpose

           Two: The purpose of the corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of California other than the banking business, the trust company business or
the practice of a profession permitted to be incorporated by the California
Corporations Code.

                               Agent for Service

           Three: The name and address of the corporation's initial agent for
service of process are:

                               Lenard D. Liberman
                               5724 Hollywood Boulevard
                               Hollywood, California 90028

                               Authorized Shares

           Four: The total number of shares of all classes of stock which the
corporation shall have the authority to issue is one thousand (1,000) shares of
Common Stock, par value $.01 per share.

                               Limitation on Liability of Directors
                                and Authority to Indemnify Agents

           Five: The liability of directors of the corporation for monetary
damages shall be eliminated to the fullest extent permissible under California
law.

           The corporation is authorized to provide indemnification of agents
(as defined in Section 317 of the California Corporations Code) for breach of
duty to the corporation and its shareholders through bylaw provisions,
agreements with agents, vote of shareholders or disinterested directors, or
otherwise, in excess of the indemnification otherwise permitted by Section 317
of the California Corporations Code, subject only to the applicable limits set
forth in Section 204 of the California Corporations Code.



           The undersigned declares that the undersigned has executed these
Articles of Incorporation and that this instrument is the act and deed of the
undersigned.



DATED:  November 13, 1997                                   /s/ Regina Braman
                                                       -------------------------
                                                       Regina Braman

                                       2

EX-3.13

                                                                    Exhibit 3.13


                                     BYLAWS

                                       of

                               KRCA LICENSE CORP.,
                            a California corporation



                                      INDEX



                                                                            Page
                                                                            ----
                                                                         
ARTICLE I.   Offices ....................................................      1
     Section 1.   PRINCIPAL EXECUTIVE OFFICE ............................      1
     Section 2.   OTHER OFFICES .........................................      1
ARTICLE II.  Shareholders ...............................................      1
     Section 1.   PLACE OF MEETINGS .....................................      1
     Section 2.   ANNUAL MEETINGS .......................................      1
     Section 3.   SPECIAL MEETINGS ......................................      1
     Section 4.   NOTICE OF ANNUAL OR SPECIAL MEETINGS ..................      2
     Section 5.   QUORUM ................................................      2
     Section 6.   ADJOURNED MEETINGS AND NOTICE THEREOF .................      2
     Section 7.   VOTING ................................................      3
     Section 8.   RECORD DATE ...........................................      4
     Section 9.   CONSENT OF ABSENTEES ..................................      5
     Section 10.  ACTION WITHOUT MEETING ................................      5
     Section 11.  PROXIES ...............................................      6
     Section 12.  INSPECTORS OF ELECTION ................................      6
     Section 13.  CONDUCT OF MEETING ....................................      6
ARTICLE III. Directors ..................................................      6
     Section 1.   POWERS ................................................      7
     Section 2.   NUMBER OF DIRECTORS ...................................      7
     Section 3.   ELECTION AND TERM OF OFFICE ...........................      7
     Section 4.   VACANCIES .............................................      7
     Section 5.   PLACE OF MEETING ......................................      8
     Section 6.   REGULAR MEETINGS ......................................      8
     Section 7.   SPECIAL MEETINGS ......................................      8
     Section 8.   QUORUM ................................................      9
     Section 9.   PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE .....      9
     Section 10.  WAIVER OF NOTICE ......................................      9
     Section 11.  ADJOURNMENT ...........................................      9
     Section 12.  FEES AND COMPENSATION .................................      9
     Section 13.  ACTION WITHOUT MEETING ................................     10
     Section 14.  RIGHTS OF INSPECTION ..................................     10
     Section 15.  COMMITTEES ............................................     10
ARTICLE IV.  Officers ...................................................     11
     Section 1.   OFFICERS ..............................................     11
     Section 2.   ELECTION ..............................................     11
     Section 3.   SUBORDINATE OFFICERS ..................................     11
     Section 4.   REMOVAL AND RESIGNATION ...............................     11
     Section 5.   VACANCIES .............................................     11
     Section 6.   CHAIRMAN OF THE BOARD .................................     11
     Section 7.   PRESIDENT .............................................     11
     Section 8.   VICE PRESIDENTS .......................................     12


                                        i




                                                                          
     Section 9.   SECRETARY .............................................     12
     Section 10.  CHIEF FINANCIAL OFFICER ...............................     12
ARTICLE V.   Other Provisions ...........................................     13
     Section 1.   INSPECTION OF CORPORATE RECORDS .......................     13
     Section 2.   INSPECTION OF BYLAWS ..................................     13
     Section 3.   ENDORSEMENT OF DOCUMENTS; CONTRACTS ...................     14
     Section 4.   CERTIFICATES OF STOCK .................................     14
     Section 5.   REPRESENTATION OF SHARES OF OTHER CORPORATIONS ........     14
     Section 6.   STOCK PURCHASE PLANS ..................................     15
     Section 7.   CONSTRUCTION AND DEFINITIONS ..........................     15
     Section 8.   AMENDMENTS ............................................     15
     Section 9.   ANNUAL REPORT TO SHAREHOLDERS .........................     15
ARTICLE VI.  Indemnification ............................................     15
     Section 1.   INDEMNIFICATION OF DIRECTORS AND OFFICERS .............     16
     Section 2.   INDEMNIFICATION OF AGENTS .............................     17
     Section 3.   RIGHT OF DIRECTORS AND OFFICERS TO BRING SUIT .........     17
     Section 4.   SUCCESSFUL DEFENSE ....................................     17
     Section 5.   NON-EXCLUSIVITY OF RIGHTS .............................     18
     Section 6.   INSURANCE .............................................     18
     Section 7.   EXPENSES AS A WITNESS .................................     18
     Section 8.   INDEMNITY AGREEMENTS ..................................     18



                                       ii



                                     BYLAWS

                           for the regulation, except
                       as otherwise provided by statute or
                         its Articles of Incorporation,

                                       of

                               KRCA LICENSE CORP.,
                            a California corporation

                               ARTICLE I. Offices.

          Section 1. PRINCIPAL EXECUTIVE OFFICE. The corporation's principal
executive office shall be fixed and located at such place as the Board of
Directors (herein called the "Board") shall determine. The Board is granted full
power and authority to change said principal executive office from one location
to another.

          Section 2. OTHER OFFICES. Branch or subordinate offices may be
established at any time by the Board at any place or places.

                            ARTICLE II. Shareholders.

          Section 1. PLACE OF MEETINGS. Meetings of shareholders shall be held
either at the principal executive office of the corporation or at any other
place within or without the State of California which may be designated either
by the Board or by the written consent of all persons entitled to vote thereat,
given either before or after the meeting and filed with the Secretary.

          Section 2. ANNUAL MEETINGS. The annual meetings of shareholders shall
be held on such date and at such time as may be fixed by the Board.

          Section 3. SPECIAL MEETINGS. Special meetings of the shareholders may
be called at any time by the Board, the Chairman of the Board, the President, or
by the holders of shares entitled to cast not less than ten percent of the votes
at such meeting. Upon request in writing to the Chairman of the Board, the
President, any Vice President or the Secretary by any person (other than the
Board) entitled to call a special meeting of shareholders, the officer forthwith
shall cause notice to be given to the shareholders entitled to vote that a
meeting will be held at a time requested by the person or persons calling the
meeting, not less than thirty-five nor more than sixty days after the receipt of
the request. If the notice is not given within twenty days after receipt of the
request, the persons entitled to call the meeting may give the notice.

          Section 4. NOTICE OF ANNUAL OR SPECIAL MEETINGS. Written notice of
each annual or special meeting of shareholders shall be given not less than ten
nor more than sixty days before the date of the meeting to each shareholder
entitled to vote thereat. Such notice shall state the place, date and hour of
the meeting and (i) in the case of a special meeting,



the general nature of the business to be transacted, and no other business may
be transacted, or (ii) in the case of the annual meeting, those matters which
the Board, at the time of the mailing of the notice, intends to present for
action by the shareholders, but, subject to the provisions of applicable law,
any proper matter may be presented at the meeting for such action. The notice of
any meeting at which directors are to be elected shall include the names of
nominees intended at the time of the notice to be presented by management for
election.

          Notice of a shareholders' meeting shall be given either personally or
by mail or by other means of written communication, addressed to the shareholder
at the address of such shareholder appearing on the books of the corporation or
given by the shareholder to the corporation for the purpose of notice, or, if no
such address appears or is given, at the place where the principal executive
office of the corporation is located or by publication at least once in a
newspaper of general circulation in the county in which the principal executive
office is located. Notice by mail shall be deemed to have been given at the time
a written notice is deposited in the United States mails, postage prepaid. Any
other written notice shall be deemed to have been given at the time it is
personally delivered to the recipient or is delivered to a common carrier for
transmission, or actually transmitted by the person giving the notice by
electronic means, to the recipient.

          Section 5. QUORUM. A majority of the shares entitled to vote,
represented in person or by proxy, shall constitute a quorum at any meeting of
shareholders. If a quorum is present, the affirmative vote of a majority of the
shares represented and voting at the meeting (which shares voting affirmatively
also constitute at least a majority of the required quorum) shall be the act of
the shareholders, unless the vote of a greater number or voting by classes is
required by law or by the Articles, except as provided in the following
sentence. The shareholders present at a duly called or held meeting at which a
quorum is present may continue to do business until adjournment, notwithstanding
the withdrawal of enough shareholders to leave less than a quorum, if any action
taken (other than adjournment) is approved by at least a majority of the shares
required to constitute a quorum.

          Section 6. ADJOURNED MEETINGS AND NOTICE THEREOF. Any Shareholders'
meeting, whether or not a quorum is present, may be adjourned from time to time
by the vote of a majority of the shares represented either in person or by
proxy, but in the absence of a quorum (except as provided in Section 5 of this
Article) no other business may be transacted at such meeting.

          It shall not be necessary to give any notice of the time and place of
the adjourned meeting or of the business to be transacted thereat, other than by
announcement at the meeting at which such adjournment is taken; provided,
however, when any shareholders' meeting is adjourned for more than 45 days or,
if after adjournment a new record date is fixed for the adjourned meeting,
notice of the adjourned meeting shall be given as in the case of an original
meeting.

          Section 7. VOTING. The shareholders entitled to notice of any meeting
or to vote at any such meeting shall be only persons in whose name shares stand
on the stock records of the corporation on the record date determined in
accordance with Section 8 of this Article.

                                       2



          Subject to the following sentence and to the provisions of Section 708
of the California General Corporation Law, every shareholder entitled to vote at
any election of directors may cumulate such shareholder's votes and give one
candidate a number of votes equal to the number of directors to be elected
multiplied by the number of votes to which the shareholder's shares are
entitled, or distribute the shareholder's votes on the same principle among as
many candidates as the shareholder thinks fit. No shareholder shall be entitled
to cumulate votes for any candidate or candidates pursuant to the preceding
sentence unless such candidate or candidates' names have been placed in
nomination prior to the voting and the shareholder has given notice at the
meeting prior to the voting of the shareholder's intention to cumulate the
shareholder's votes. If any one shareholder has given such notice, all
shareholders may cumulate their votes for candidates in nomination.

          Elections need not be by ballot, provided, however, that all elections
for directors must be by ballot upon demand made by a shareholder at the meeting
and before the voting begins.

          In any election of directors, the candidates receiving the highest
number of votes of the shares entitled to be voted for them up to the number of
directors to be elected by such shares are elected.

          Voting shall in all cases be subject to the provisions of Chapter 7 of
the California General Corporation Law, and to the following provisions:

          (a) Subject to clause (g), shares held by an administrator, executor,
guardian, conservator or custodian may be voted by such holder either in person
or by proxy, without a transfer of such shares into the holder's name; and
shares standing in the name of a trustee may be voted by the trustee, either in
person or by proxy, but no trustee shall be entitled to vote shares held by such
trustee without a transfer of such shares into the trustee's name.

          (b) Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into the receiver's name if authority
to do so is contained in the order of the court by which such receiver was
appointed.

          (c) Subject to the provisions of Section 705 of the California General
Corporation Law and except where otherwise agreed in writing between the
parties, a shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.

          (d) Shares standing in the name of a minor may be voted and the
corporation may treat all rights incident thereto as exercisable by the minor,
in person or by proxy, whether or not the corporation has notice, actual or
constructive, of the nonage, unless a guardian of the minor's property has been
appointed and written notice of such appointment given to the corporation.

          (e) Shares standing in the name of another corporation, domestic or
foreign, may be voted by such officer, agent or proxyholder as the bylaws of
such other corporation may

                                       3



prescribe or, in the absence of such provision, as the Board of Directors of
such other corporation may determine or, in the absence of such determination,
by the chairman of the board, president or any vice president of such other
corporation, or by any other person authorized to do so by the chairman of the
board, president or any vice president of such other corporation. Shares which
are purported to be voted or any proxy purported to be executed in the name of a
corporation (whether or not any title of the person signing is indicated) shall
be presumed to be voted or the proxy executed in accordance with the provisions
of this clause, unless the contrary is shown.

          (f) Shares of the corporation owned by any subsidiary shall not be
entitled to vote on any matter.

          (g) Shares held by the corporation in a fiduciary capacity, and shares
of the issuing corporation held in a fiduciary capacity by any subsidiary, shall
not be entitled to vote on any matter, except to the extent that the settlor or
beneficial owner possesses and exercises a right to vote or to give the
corporation binding instructions as to how to vote such shares.

          (h) If shares stand of record in the names of two or more persons,
whether fiduciaries, members of a partnership, joint tenants, tenants in common,
husband and wife as community property, tenants by the entirety, voting
trustees, persons entitled to vote under a shareholder voting agreement or
otherwise, or if two or more persons (including proxyholders) have the same
fiduciary relationship respecting the same shares, unless the secretary of the
corporation is given written notice to the contrary and is furnished with a copy
of the instrument or order appointing them or creating the relationship wherein
it is so provided, their acts with respect to voting shall have the following
effect:

          (i)   If only one votes, such act binds all;

          (ii)  If more than one vote, the act of the majority so voting binds
          all;

          (iii) If more than one vote, but the vote is evenly split on any
          particular matter, each faction may vote the securities in question
          proportionately.

If the instrument so filed or the registration of the shares shows that any such
tenancy is held in unequal interests, a majority or even split for the purpose
of this section shall be a majority or even split in interest.

          Section 8. RECORD DATE. The Board may fix, in advance, a record date
for the determination of the shareholders entitled to notice of any meeting or
to vote or entitled to receive payment of any dividend or other distribution, or
any allotment of rights, or to exercise rights in respect of any other lawful
action. The record date so fixed shall be not more than 60 days nor less than 10
days prior to the date of the meeting nor more than 60 days prior to any other
action. When a record date is so fixed, only shareholders of record on that date
are entitled to notice of and to vote at the meeting or to receive the dividend,
distribution, or allotment of rights, or to exercise the rights, as the case may
be, notwithstanding any transfer of shares on the books of the corporation after
the record date. A determination of shareholders of record entitled to notice of
or to vote at a meeting of shareholders shall apply to any adjournment of the
meeting

                                       4



unless the Board fixes a new record date for the adjourned meeting. The Board
shall fix a new record date if the meeting is adjourned for more than forty-five
days.

          If no record date is fixed by the Board, the record date for
determining shareholders entitled to notice of or to vote at a meeting of
shareholders shall be at the close of business on the business day next
preceding the day on which notice is given or, if notice is waived, at the close
of business on the business day next preceding the day on which the meeting is
held. The record date for determining shareholders for any purpose other than
set forth in this Section 8 or Section 10 of this Article shall be at the close
of business on the day on which the Board adopts the resolution relating
thereto, or the sixtieth day prior to the date of such other action, whichever
is later.

          Section 9.  CONSENT OF ABSENTEES. The transactions of any meeting of
shareholders, however called and noticed, and wherever held, are as valid as
though had at a meeting duly held after regular call and notice, if a quorum is
present either in person or by proxy, and if, either before or after the
meeting, each of the persons entitled to vote, not present in person or by
proxy, signs a written waiver of notice, or a consent to the holding of the
meeting or an approval of the minutes thereof. All such waivers, consents or
approvals shall be filed with the corporate records or made a part of the
minutes of the meeting. Attendance of a person at a meeting shall constitute a
waiver of notice of and presence at such meeting, except when the person
objects, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened and except that
attendance at a meeting is not a waiver of any right to object to the
consideration of matters required by the California General Corporation Law to
be included in the notice but not so included, if such objection is expressly
made at the meeting. Neither the business to be transacted at nor the purpose of
any regular or special meeting of shareholders need be specified in any written
waiver of notice, consent to the holding of the meeting or approval of the
minutes thereof, except as provided in Section 601(f) of the California General
Corporation Law.

          Section 10. ACTION WITHOUT MEETING. Subject to Section 603 of the
California General Corporation Law, any action which, under any provision of the
California General Corporation Law, may be taken at any annual or special
meeting of shareholders, may be taken without a meeting and without prior notice
if a consent in writing, setting forth the action so taken, shall be signed by
the holders of outstanding shares having not less than the minimum number of
votes that would be necessary to authorize or take such action at a meeting at
which all shares entitled to vote thereon were present and voted. Unless a
record date for voting purposes be fixed as provided in Section 8 of this
Article, the record date for determining shareholders entitled to give consent
pursuant to this Section 10, when no prior action by the Board has been taken,
shall be the day on which the first written consent is given.

          Section 11. PROXIES. Every person entitled to vote shares has the
right to do so either in person or by one or more persons authorized by a
written proxy executed by such shareholder and filed with the Secretary. Any
proxy duly executed is not revoked and continues in full force and effect until
revoked by the person executing it prior to the vote pursuant thereto. Such
revocation may be effected either, (i) by a writing delivered to the Secretary
of the Corporation stating that the proxy is revoked, (ii) by a subsequent proxy
executed by the person executing the prior proxy and presented to the meeting,
or (iii) by attendance at the meeting and

                                       5



voting in person by the person executing the proxy; provided, however, that no
proxy shall be valid after the expiration of eleven months from the date of its
execution unless otherwise provided in the proxy.

          Section 12. INSPECTORS OF ELECTION. In advance of any meeting of
shareholders, the Board may appoint inspectors of election to act at such
meeting and any adjournment thereof. If inspectors of election be not so
appointed, or if any persons so appointed fail to appear or refuse to act, the
chairman of any such meeting may, and on the request of any shareholder or
shareholder's proxy shall, make such appointment at the meeting. The number of
inspectors shall be either one or three. If appointed at a meeting on the
request of one or more shareholders or proxies, the majority of shares present
shall determine whether one or three inspectors are to be appointed.

          The duties of such inspectors shall be as prescribed by Section 707(b)
of the California General Corporation Law and shall include: determining the
number of shares outstanding and the voting power of each; determining the
shares represented at the meeting; determining the existence of a quorum;
determining the authenticity, validity and effect of proxies; receiving votes,
ballots or consents; hearing and determining all challenges and questions in any
way arising in connection with the right to vote; counting and tabulating all
votes or consents; determining when the polls shall close; determining the
result; and doing such acts as may be proper to conduct the election or vote
with fairness to all shareholders. If there are three inspectors of election,
the decision, act or certificate of a majority is effective in all respects as
the decision, act or certificate of all.

          Section 13. CONDUCT OF MEETING. The President shall preside as
chairman at all meetings of the shareholders. The chairman shall conduct each
such meeting in a businesslike and fair manner, but shall not be obligated to
follow any technical, formal or parliamentary rules or principles of procedure.
The chairman's rulings on procedural matters shall be conclusive and binding on
all shareholders, unless at the time of a ruling a request for a vote is made to
the shareholders holding shares entitled to vote and which are represented in
person or by proxy at the meeting, in which case the decision of a majority of
such shares shall be conclusive and binding on all shareholders. Without
limiting the generality of the foregoing, the chairman shall have all of the
powers usually vested in the chairman of a meeting of shareholders.

                             ARTICLE III. Directors.

          Section 1. POWERS. Subject to limitations of the Articles, of these
Bylaws and of the California General Corporation Law relating to action required
to be approved by the shareholders or by the outstanding shares, the business
and affairs of the corporation shall be managed and all corporate powers shall
be exercised by or under the direction of the Board. The Board may delegate the
management of the day-to-day operation of the business of the corporation to a
management company or other person provided that the business and affairs of the
corporation shall be managed and all corporate powers shall be exercised under
the ultimate direction of the Board. Without prejudice to such general powers,
but subject to the same limitations, it is hereby expressly declared that the
Board shall have the following powers in addition to the other powers enumerated
in these Bylaws:

                                       6



          (a) To select and remove all the other officers, agents and employees
of the corporation, prescribe the powers and duties for them as may not be
inconsistent with law, the Articles or these Bylaws, fix their compensation and
require from them security for faithful service.

          (b) To conduct, manage and control the affairs and business of the
corporation and to make such rules and regulations therefor not inconsistent
with law, the Articles or these Bylaws, as they may deem best.

          (c) To adopt, make and use a corporate seal, and to prescribe the
forms of certificates of stock, and to alter the form of such seal and of such
certificates from time to time as they may deem best.

          (d) To authorize the issuance of shares of stock of the corporation
from time to time, upon such terms and for such consideration as may be lawful.

          (e) To borrow money and incur indebtedness for the purposes of the
corporation, and to cause to be executed and delivered therefor, in the
corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages,
pledges, hypothecations or other evidences of debt and securities therefor.

          Section 2. NUMBER OF DIRECTORS. The authorized number of directors
shall be two until changed by amendment of the Articles or by a Bylaw duly
adopted by the shareholders amending this Section 2.

          Section 3. ELECTION AND TERM OF OFFICE. The directors shall be elected
at each annual meeting of the shareholders, but if any such annual meeting is
not held or the directors are not elected thereat, the directors may be elected
at any special meeting of shareholders held for that purpose. Each director
shall hold office until the next annual meeting and until a successor has been
elected and qualified.

          Section 4. VACANCIES. Any director may resign effective upon giving
written notice to the Chairman of the Board, the President, the Secretary or the
Board, unless the notice specifies a later time for the effectiveness of such
resignation. If the resignation is effective at a future time, a successor may
be elected to take office when the resignation becomes effective.

          Vacancies in the Board, except those existing as a result of a removal
of a director, may be filled by a majority of the remaining directors, though
less than a quorum, or by a sole remaining director, and each director so
elected shall hold office until the next annual meeting and until such
director's successor has been elected and qualified.

          A vacancy or vacancies in the Board shall be deemed to exist in case
of the death, resignation or removal of any director, or if the authorized
number of directors be increased, or if the shareholders fail, at any annual or
special meeting of shareholders at which any director or directors are elected,
to elect the full authorized number of directors to be voted for at that
meeting.

                                       7



          The Board may declare vacant the office of a director who has been
declared of unsound mind by an order of court or convicted of a felony.

          The shareholders may elect a director or directors at any time to fill
any vacancy or vacancies not filled by the directors. Any such election by
written consent other than to fill a vacancy created by removal requires the
consent of a majority of the outstanding shares entitled to vote. Any such
election by written consent to fill a vacancy created by removal requires
unanimous consent.

          No reduction of the authorized number of directors shall have the
effect of removing any director prior to the expiration of the director's term
of office.

          Section 5. PLACE OF MEETING. Regular or special meetings of the Board
shall be held at any place within or without the State of California which has
been designated from time to time by the Board. In the absence of such
designation, regular meetings shall be held at the principal executive office of
the corporation.

          Section 6. REGULAR MEETINGS. Immediately following each annual meeting
of shareholders the Board shall hold a regular meeting for the purpose of
organization, election of officers and the transaction of other business.

          Other regular meetings of the Board shall be held without call on such
dates and at such times as may be fixed by the Board. Call and notice of all
regular meetings of the Board are hereby dispensed with.

          Section 7. SPECIAL MEETINGS. Special meetings of the Board for any
purpose or purposes may be called at any time by the Chairman of the Board, the
President, any Vice President, the Secretary or by any two directors.

          Special meetings of the Board shall be held upon four days' written
notice or forty-eight hours' notice given personally or by telephone, telegraph,
telex or other similar means of communication. Any such notice shall be
addressed or delivered to each director at such director's address as it is
shown upon the records of the corporation or as may have been given to the
corporation by the director for purposes of notice or, if such address is not
shown on such records or is not readily ascertainable, at the place in which the
meetings of the directors are regularly held.

          Notice by mail shall be deemed to have been given at the time a
written notice is deposited in the United States mails, postage prepaid. Any
other written notice shall be deemed to have been given at the time it is
personally delivered to the recipient or is delivered to a common carrier for
transmission, or actually transmitted by the person giving the notice by
electronic means, to the recipient. Oral notice shall be deemed to have been
given at the time it is communicated, in person or by telephone or wireless, to
the recipient or to a person at the office of the recipient who the person
giving the notice has reason to believe will promptly communicate it to the
recipient.

          Section 8. QUORUM. A majority of the authorized number of directors
constitutes a quorum of the board for the transaction of business, except to
adjourn as provided

                                       8



in Section 11 of this Article. Every act or decision done or made by a majority
of the directors present at a meeting duly held at which a quorum is present
shall be regarded as the act of the Board, unless a greater number be required
by law or by the Articles. A meeting at which a quorum is initially present may
continue to transact business notwithstanding the withdrawal of directors, if
any action taken is approved by at least a majority of the required quorum for
such meeting.

          Section 9.  PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE. Members
of the Board may participate in a meeting through use of conference telephone or
similar communications equipment, so long as all members participating in such
meeting can hear one another.

          Section 10. WAIVER OF NOTICE. Notice of a meeting need not be given to
any director who signs a waiver of notice or a consent to holding the meeting or
an approval of the minutes thereof, whether before or after the meeting, or who
attends the meeting without protesting, prior thereto or at its commencement,
the lack of notice to such director. All such waivers, consents and approvals
shall be filed with the corporate records or made a part of the minutes of the
meeting.

          Section 11. ADJOURNMENT. A majority of the directors present, whether
or not a quorum is present, may adjourn any directors' meeting to another time
and place. Notice of the time and place of holding an adjourned meeting need not
be given to absent directors if the time and place be fixed at the meeting
adjourned, except as provided in the next sentence. If the meeting is adjourned
for more than 24 hours, notice of any adjournment to another time or place shall
be given prior to the time of the adjourned meeting to the directors who were
not present at the time of the adjournment.

          Section 12. FEES AND COMPENSATION. Directors and members of committees
may receive such compensation, if any, for their services, and such
reimbursement for expenses, as may be fixed or determined by the Board.

          Section 13. ACTION WITHOUT MEETING. Any action required or permitted
to be taken by the Board may be taken without a meeting if all members of the
Board shall individually or collectively consent in writing to such action. Such
consent or consents shall have the same effect as a unanimous vote of the Board
and shall be filed with the minutes of the proceedings of the Board.

          Section 14. RIGHTS OF INSPECTION. Every director shall have the
absolute right at any reasonable time to inspect and copy all books, records and
documents of every kind and to inspect the physical properties of the
corporation and also of its subsidiary corporations, domestic or foreign. Such
inspection by a director may be made in person or by agent or attorney and
includes the right to copy and obtain extracts.

          Section 15. COMMITTEES. The Board may appoint one or more committees,
each consisting of two or more directors, and delegate to such committees any of
the authority of the Board except with respect to:

                                       9



          (a) The approval of any action for which the General Corporation Law
          also requires shareholders' approval or approval of the outstanding
          shares;

          (b) The filling of vacancies in the Board or on any committee;

          (c) The fixing of compensation of the directors for serving on the
          Board or on any committee;

          (d) The amendment or repeal of bylaws or the adoption of new bylaws;

          (e) The amendment or repeal of any resolution of the Board which by
          its express term is not so amendable or repealable;

          (f) A distribution to the shareholders of the corporation except at a
          rate or in a periodic amount or within a price range determined by the
          Board; or

          (g) The appointment of other committees of the Board or the members
          thereof.

          Any such committee must be designated, and the members or alternate
members thereof appointed, by resolution adopted by a majority of the authorized
number of directors and any such committee may be designated an Executive
Committee or by such other name as the Board shall specify. Alternate members of
a committee may replace any absent member at any meeting of the committee. The
Board shall have the power to prescribe the manner in which proceedings of any
such committee shall be conducted. In the absence of any such prescription, such
committee shall have the power to prescribe the manner in which its proceedings
shall be conducted. Unless the Board or such committee shall otherwise provide,
the regular and special meetings and other actions of any such committee shall
be governed by the provisions of this Article applicable to meetings and actions
of the Board. Minutes shall be kept of each meeting of each committee.

                              ARTICLE IV. Officers.

          Section 1. OFFICERS. The officers of the corporation shall be a
President, a Secretary and a Chief Financial Officer. The corporation may also
have, at the discretion of the Board, a Chairman of the Board, one or more Vice
Presidents, one or more Assistant Secretaries, one or more Assistant Financial
Officers, and such other officers as may be elected or appointed in accordance
with the provisions of Section 3 of this Article.

          Section 2. ELECTION. The officers of the corporation, except such
officers as may be elected or appointed in accordance with the provisions of
Section 3 or Section 5 of this Article, shall be chosen annually by, and shall
serve at the pleasure of, the Board, and shall hold their respective offices
until their resignation, removal, or other disqualification from service, or
until their respective successors shall be elected.

          Section 3. SUBORDINATE OFFICERS. The Board may elect, and may empower
the President to appoint, such other officers as the business of the corporation
may

                                       10



require, each of whom shall hold office for such period, have such authority and
perform such duties as are provided in these Bylaws or as the Board may from
time to time determine.

          Section 4. REMOVAL AND RESIGNATION. Any officer may be removed, either
with or without cause, by the Board at any time or, except in the case of an
officer chosen by the Board, by any officer upon whom such power of removal may
be conferred by the Board. Any such removal shall be without prejudice to the
rights, if any, of the officer under any contract of employment of the officer.

          Any officer may resign at any time by giving written notice to the
corporation, but without prejudice to the rights, if any, of the corporation
under any contract to which the officer is a party. Any such resignation shall
take effect at the date of the receipt of such notice or at any later time
specified therein and, unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective.

          Section 5. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filled in the
manner prescribed in these Bylaws for regular election or appointment to such
office.

          Section 6. CHAIRMAN OF THE BOARD. The Chairman of the Board, if there
shall be such an officer, shall, if present, preside at all meetings of the
Board and exercise and perform such other powers and duties as may be from time
to time assigned by the Board.

          Section 7. PRESIDENT. Subject to such power, if any, as may be given
by the Board to the Chairman of the Board, if there be such an officer, the
President is the general manager and chief executive officer of the corporation
and has, subject to the control of the Board, general supervision, direction and
control of the business and officers of the corporation. The President shall
preside at all meetings of the shareholders and, in the absence of the Chairman
of the Board, or if there be none, at all meetings of the Board. The President
has the general powers and duties of management usually vested in the office of
president and general manager of a corporation and such other powers and duties
as may be prescribed by the Board.

          Section 8. VICE PRESIDENTS. In the absence or disability of the
President, the Vice Presidents in order of their rank as fixed by the Board or,
if not ranked, the Vice President designated by the Board, shall perform all the
duties of the President and, when so acting, shall have all the powers of, and
be subject to all the restrictions upon, the President. The Vice Presidents
shall have such other powers and perform such other duties as from time to time
may be prescribed for them respectively by the Board.

          Section 9. SECRETARY. The Secretary shall keep or cause to be kept, at
the principal executive office and such other place as the Board may order, a
book of minutes of all meetings of shareholders, the Board and its committees,
with the time and place of holding, whether regular or special, and if special,
how authorized, the notice thereof given, the names of those present at Board
and committee meetings, the number of shares present or represented at
shareholders' meetings, and the proceedings thereof. The Secretary shall keep,
or cause to be kept, a copy of the Bylaws of the corporation at the principal
executive office or business office in accordance with Section 213 of the
California General Corporation Law.

                                       11



          The Secretary shall keep, or cause to be kept, at the principal
executive office or at the office of the corporation's transfer agent or
registrar, if one be appointed, a share register, or a duplicate share register,
showing the names of the shareholders and their addresses, the number and
classes of shares held by each, the number and date of certificates issued for
the same, and the number and date of cancellation of every certificate
surrendered for cancellation.

          The Secretary shall give, or cause to be given, notice of all meetings
of the shareholders and of the Board and any committees thereof required by
these Bylaws or by law to be given, shall keep the seal of the corporation in
safe custody, and shall have such other powers and perform such other duties as
may be prescribed by the Board.

          Section 10. CHIEF FINANCIAL OFFICER. The Chief Financial Officer is
the chief financial officer of the corporation and shall keep and maintain, or
cause to be kept and maintained, adequate and correct accounts of the properties
and business transactions of the corporation, and shall send or cause to be sent
to the shareholders of the corporation such financial statements and reports as
are by law or these Bylaws required to be sent to them. The books of account
shall at all times be open to inspection by any director.

          The Chief Financial Officer shall deposit all moneys and other
valuables in the name and to the credit of the corporation with such
depositaries as may be designated by the Board. The Chief Financial Officer
shall disburse the funds of the corporation as may be ordered by the Board,
shall render to the President and the directors, whenever they request it, an
account of all transactions as Chief Financial Officer and of the financial
condition of the corporation, and shall have such other powers and perform such
other duties as may be prescribed by the Board.

                          ARTICLE V. Other Provisions.

          Section 1. INSPECTION OF CORPORATE RECORDS.

          (a) A shareholder or shareholders holding at least five percent in the
aggregate of the outstanding voting shares of the corporation or who hold at
least one percent of such voting shares and have filed a Schedule l4B with the
United States Securities and Exchange Commission relating to the election of
directors of the corporation shall have an absolute right to do either or both
of the following:

          (i)  Inspect and copy the record of shareholders' names and addresses
          and shareholdings during usual business hours upon five business days'
          prior written demand upon the corporation; or

          (ii) Obtain from the transfer agent, if any, for the corporation, upon
          five business days' prior written demand and upon the tender of its
          usual charges for such a list (the amount of which charges shall be
          stated to the shareholder by the transfer agent upon request), a list
          of the shareholders' names and addresses who are entitled to vote for
          the election of directors and their shareholdings, as of the most
          recent record date for which it has been compiled or as of a date
          specified by the shareholder subsequent to the date of demand.

                                       12



          (b) The record of shareholders shall also be open to inspection and
copying by any shareholder or holder of a voting trust certificate at any time
during usual business hours upon written demand on the corporation, for a
purpose reasonably related to such holder's interest as a shareholder or holder
of a voting trust certificate.

          (c) The accounting books and records and minutes of proceedings of the
shareholders and the Board and committees of the Board shall be open to
inspection upon written demand on the corporation of any shareholder or holder
of a voting trust certificate at any reasonable time during usual business
hours, for a purpose reasonably related to such holder's interests as a
shareholder or as a holder of such voting trust certificate.

          (d) Any inspection and copying under this Article may be made in
person or by agent or attorney.

          Section 2. INSPECTION OF BYLAWS. The corporation shall keep in its
principal executive office in the State of California, or if its principal
executive office is not in such State at its principal business office in such
State, the original or a copy of these Bylaws as amended to date, which shall be
open to inspection by shareholders at all reasonable times during office hours.
If the principal executive office of the corporation is located outside the
State of California and the corporation has no principal business office in such
state, it shall upon the written request of any shareholder furnish to such
shareholder a copy of these Bylaws as amended to date.

          Section 3. ENDORSEMENT OF DOCUMENTS; CONTRACTS. Subject to the
provisions of applicable law, any note, mortgage, evidence of indebtedness,
contract, share certificate, conveyance or other instrument in writing and any
assignment or endorsements thereof executed or entered into between the
corporation and any other person, when signed by the Chairman of the Board, the
President or any Vice President and the Secretary, any Assistant Secretary, the
Chief Financial Officer or any Assistant Chief Financial Officer of the
corporation shall be valid and binding on the corporation in the absence of
actual knowledge on the part of the other person that the signing officers had
no authority to execute the same. Any such instruments may be signed by any
other person or persons and in such manner as from time to time shall be
determined by the Board, and, unless so authorized by the Board, no officer,
agent or employee shall have any power or authority to bind the corporation by
any contract or engagement or to pledge its credit or to render it liable for
any purpose or amount.

          Section 4. CERTIFICATES OF STOCK. Every holder of shares of the
corporation shall be entitled to have a certificate signed in the name of the
corporation by the Chairman of the Board, the President or a Vice President and
by the Chief Financial Officer or an Assistant Chief Financial Officer or the
Secretary or an Assistant Secretary, certifying the number of shares and the
class or series of shares owned by the shareholder. Any or all of the signatures
on the certificate may be facsimile. If any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the corporation with the same effect
as if such person were an officer, transfer agent or registrar at the date of
issue.

                                       13



          Certificates for shares may be issued prior to full payment under such
restrictions and for such purposes as the Board may provide; provided, however,
that on any certificate issued to represent any partly paid shares, the total
amount of the consideration to be paid therefor and the amount paid thereon
shall be stated.

          Except as provided in this Section, no new certificate for shares
shall be issued in lieu of an old one unless the latter is surrendered and
cancelled at the same time. The Board may, however, if any certificate for
shares is alleged to have been lost, stolen or destroyed, authorize the issuance
of a new certificate in lieu thereof, and the corporation may require that the
corporation be given a bond or other adequate security sufficient to indemnify
it against any claim that may be made against it (including expense or
liability) on account of the alleged loss, theft or destruction of such
certificate or the issuance of such new certificate.

          Section 5. REPRESENTATION OF SHARES OF OTHER CORPORATIONS. The
President or any other officer or officers authorized by the Board or the
President are each authorized to vote, represent and exercise on behalf of the
corporation all rights incident to any and all shares of any other corporation
or corporations standing in the name of the corporation. The authority herein
granted may be exercised either by any such officer in person or by any other
person authorized so to do by proxy or power of attorney duly executed by said
officer.

          Section 6. STOCK PURCHASE PLANS. The corporation may adopt and carry
out a stock purchase plan or agreement or stock option plan or agreement
providing for the issue and sale for such consideration as may be fixed of its
unissued shares, or of issued shares acquired or to be acquired, to one or more
of the employees or directors of the corporation or of a subsidiary or to a
trustee on their behalf and for the payment for such shares in installments or
at one time, and may provide for aiding any such persons in paying for such
shares by compensation for services rendered, promissory notes or otherwise.

          Any such stock purchase plan or agreement or stock option plan or
agreement may include, among other features, the fixing of eligibility for
participation therein, the class and price of shares to be issued or sold under
the plan or agreement, the number of shares which may be subscribed for, the
method of payment therefor, the reservation of title until full payment
therefor, the effect of the termination of employment, an option or obligation
on the part of the corporation to repurchase the shares upon termination of
employment, restrictions upon transfer of the shares, the time limits of and
termination of the plan, and any other matters, not in violation of applicable
law, and may be included in the plan as approved or authorized by the Board or
any committee of the Board.

          Section 7. CONSTRUCTION AND DEFINITIONS. Unless the context otherwise
requires, the general provisions, rules of construction and definitions
contained in the General Provisions of the California Corporations Code and in
the California General Corporation Law shall govern the construction of these
Bylaws.

          Section 8. AMENDMENTS. These Bylaws may be amended or repealed either
by approval of the outstanding shares (as defined in Section 152 of the
California General Corporation Law) or by the approval of the Board; provided,
however, that after the issuance of

                                       14



shares, a bylaw specifying or changing a fixed number of directors or the
maximum or minimum number or changing from a fixed to a variable number of
directors or vice versa may only be adopted by approval of the outstanding
shares, and a bylaw reducing the fixed number or the minimum number of directors
to a number less than five shall be subject to the provisions of Section 212(a)
of the California General Corporation Law.

          Section 9. ANNUAL REPORT TO SHAREHOLDERS. The annual report to
shareholders referred to in Section 1501 of the California General Corporation
Law is expressly waived, but nothing herein shall be interpreted as prohibiting
the Board from issuing annual or other periodic reports to shareholders.

                          ARTICLE VI. Indemnification.

          Section 1. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Each person who
was or is a party or is threatened to be made a party to or is involved in any
threatened, pending or completed action, suit or proceeding, whether brought in
the name of the corporation or otherwise and whether of a civil, criminal,
administrative or investigative nature (hereinafter a "proceeding"), by reason
of the fact that he or she, or a person of whom he or she is the legal
representative, is or was a director or officer of the corporation or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is an alleged action or inaction in an official
capacity or in any other capacity while serving as a director or officer, shall,
subject to the terms of any agreement between the corporation and such person,
be indemnified and held harmless by the corporation to the fullest extent
permissible under California law and the corporation's Articles of
Incorporation, against all costs, charges, expenses, liabilities and losses
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement) reasonably incurred or suffered by
such person in connection therewith, and such indemnification shall continue as
to a person who has ceased to be a director or officer and shall inure to the
benefit of his or her heirs, executors and administrators; provided, however,
that the corporation shall indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such person only if
such proceeding (or part thereof) was authorized by the Board of Directors of
the corporation and provided, further, that no such person shall be indemnified
(i) except to the extent that the aggregate of losses to be indemnified exceeds
the amount of such losses for which the director or officer is paid pursuant to
any directors and officers liability insurance policy maintained by the
corporation; (ii) on account of any suit in which judgment is rendered against
such person for an accounting of profits made from the purchase or sale by such
person of securities of the corporation pursuant to the provisions of Section
16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar
provisions of any federal, state or local statutory law; (iii) for expenses,
judgments, funds, penalties or ERISA excise taxes resulting from such person's
conduct which is finally adjudged to have been willful misconduct, knowingly
fraudulent or deliberately dishonest; (iv) if a court of competent jurisdiction
finally determines that any indemnification hereunder is unlawful; (v) for acts
or omissions involving intentional misconduct or knowing and culpable violation
of law; (vi) for acts or omissions that the director or officer believes to be
contrary to the best interests of the corporation or its shareholders or that
involve the absence of good faith on the part of the director or officer; (vii)
for any transaction

                                       15



from which the director or officer derived an improper personal benefit; (viii)
for acts or omissions that show a reckless disregard for the director's or
officer's duty to the corporation or its shareholders in circumstances in which
the director or officer was aware, or should have been aware, in the ordinary
course of performing his duties, of a risk of serious injury to the corporation
or its shareholders; (ix) for acts or omissions that constitute an unexcused
pattern of inattention that amounts to an abdication of the director's or
officer's duties to the corporation or its shareholders; (x) for costs, charges,
expenses, liabilities and losses arising under Section 310 or 316 of the General
Corporation Law of California (the "Law"); and (xi) as to circumstances in which
indemnity is expressly prohibited by Section 317 of the Law. The right to
indemnification conferred in this Article shall be a contract right and shall
include the right to be paid by the corporation expenses incurred in defending
any proceeding in advance of its final disposition; provided, however, that if
the Law requires the payment of such expenses incurred by a director or officer
in his or her capacity as a director or officer (and not in any other capacity
in which service was or is rendered by such person while a director or officer,
including, without limitation, service to an employee benefit plan) in advance
of the final disposition of a proceeding, shall be made only upon delivery to
the corporation of an undertaking, by or on behalf of such director or officer,
to repay all amounts to the corporation unless it shall be determined ultimately
that such person is not entitled to be indemnified. No indemnity shall be
provided under this provision for any liability arising out of any act or
omission committed or occurring prior to the date an amendment containing this
provision is filed with the Secretary of State of California.

          Section 2. INDEMNIFICATION OF AGENTS. A person who was or is a party
or is threatened to be made a party to or is involved in any proceeding by
reason of the fact that he or she is or was an employee or agent of the
corporation or is or was serving at the request of the corporation as an
employee or agent of another enterprise, including service with respect to
employee benefit plans, whether the basis of such action is an alleged action or
inaction in an official capacity or in any other capacity while serving as an
employee or agent, may, subject to the terms of any agreement between the
corporation and such person, be indemnified and held harmless by the corporation
to the fullest extent permitted by California law and the corporation's Articles
of Incorporation, against all costs, charges, expenses, liabilities and losses
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement) reasonably incurred or suffered by
such person in connection therewith. The immediately preceding sentence is not
intended to be and shall not be considered to confer a contract right on any
employee or agent of the corporation.

          Section 3. RIGHT OF DIRECTORS AND OFFICERS TO BRING SUIT. If a claim
under Section 1 of this Article is not paid in full by the corporation within 30
days after a written claim has been received by the corporation, the claimant
may at any time thereafter bring suit against the corporation to recover the
unpaid amount of the claim and, if successful in whole or in part, the claimant
shall also be entitled to be paid the expense of prosecuting such claim. It
shall be a defense to any such action (other than an action brought to enforce a
claim for expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any is required, has been
tendered to the corporation) that the claimant has failed to meet a standard of
conduct, if any, required to make it permissible under California law for the
corporation to indemnify the claimant for the amount claimed. Neither the
failure of the corporation (including its Board of Directors, independent legal
counsel or its shareholders)

                                       16



to have made a determination prior to the commencement of such action and
indemnification of the claimant is permissible in the circumstances because he
or she has met such standard of conduct, nor an actual determination by the
corporation (including its Board of Directors, independent legal counsel or its
shareholders) that the claimant has not met such standard of conduct, shall be a
defense to the action or create a presumption that the claimant has failed to
meet such standard of conduct.

          Section 4. SUCCESSFUL DEFENSE. Notwithstanding any other provision of
this Article, to the extent that a director or officer has been successful on
the merits or otherwise (including the dismissal of an action without prejudice
or the settlement of a proceeding without admission of liability) in defense of
any proceeding referred to in Section 1 or, in defense of any claim, issue or
matter therein, he shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection therewith.

          Section 5. NON-EXCLUSIVITY OF RIGHTS. The right to indemnification
provided by this Article shall not be exclusive of any other right which any
person may have or hereafter acquire under any statute, bylaw, agreement, vote
of shareholders or disinterested directors or otherwise.

          Section 6. INSURANCE. The corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
corporation or another corporation, partnership, joint venture, trust or other
enterprise against any such expense, liability or loss, whether or not the
corporation would have the power to indemnify such person against such expense,
liability or loss under California law.

          Section 7. EXPENSES AS A WITNESS. To the extent that any director,
officer, employee or agent of the corporation is by reason of such position, or
a position with another entity at the request of the corporation, a witness in
any action, suit or proceeding, he may be indemnified against all costs and
expenses actually and reasonably incurred by him or her or on his or her behalf
in connection therewith.

          Section 8. INDEMNITY AGREEMENTS. The corporation may enter into
agreements with any director, officer, employee or agent of the corporation
providing for indemnification to the fullest extent permissible under California
law and the corporation's Articles of Incorporation.

                                       17

EX-3.14

                                                                     Exhbit 3.14


                           ARTICLES OF INCORPORATION
                                       OF
                           LIBERMAN BROADCASTING, INC.

                                      Name

                      One: The name of the corporation is:

                           Liberman Broadcasting, Inc.

                                     Purpose

          Two:  The purpose of the corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of California other than the banking business, the trust company business or
the practice of a profession permitted to be incorporated by the California
Corporations Code.

                               Agent for Service

          Three: The name and address of the corporation's initial agent for
service of process is:

                                  Jose Liberman
                              12547 Huston Street
                           North Hollywood, CA 91607

                               Authorized Shares

          Four:  The total number of shares of Common Stock which the
corporation is authorized to issue is one thousand (1,000).

                                                  /s/ Linda M. Oprian
                                                 -------------------------------
                                                        Linda M. Oprian

          The undersigned declares that the undersigned has executed these
Articles of Incorporation and that this instrument is the act and deed of the
undersigned.


                                                  /s/ Linda M. Oprian
                                                 -------------------------------
                                                        Linda M. Oprian






                            CERTIFICATE OF AMENDMENT
                          OF ARTICLES OF INCORPORATION
                                       OF
                          LIBERMAN BROADCASTING, INC.,
                            a California corporation

          The undersigned, Jose Liberman and Lenard D. Libennan, certify:

     1.   They are the President and Secretary, respectively, of Liberman
Broadcasting, Inc., a California corporation (the "Corporation").

     2.   The Articles of Incorporation of the Corporation are amended to add
the following Article V, which reads in its entirety as follows:

               "Five: The corporation is a close corporation. All of the issued
     shares of capital stock of all classes of the corporation shall be held of
     record by not more than thirty-five (35) persons."

     4.   The foregoing amendment of the Articles of Incorporation has been duly
approved by the Board of Directors of the Corporation.

     5.   The foregoing amendment of the Articles of Incorporation has been duly
approved by the required vote of Shareholders in accordance with Section 902 of
the General Corporation Law of the State of California. The total number of
outstanding shares of the Corporation is 50. The number of shares voting in
favor of the amendment was 100% and egualled or exceeded the vote required. The
percentage vote required was more than 50%.

          The undersigned further declare under penalty of perjury under the
laws of the State of California that the matters set forth in this Certificate
are true and correct of their own knowledge.

Dated: March 20, 1990


                                                  /s/ Jose Liberman
                                                  -----------------------------
                                                  Jose Liberman, President


                                                  /s/ Lenard D. Liberman
                                                  -----------------------------
                                                  Lenard D. Liberman, Secretary





                            CERTIFICATE OF AMENDMENT
                                       OF
                            ARTICLES OF INCORPORATION
                                       OF
                          LIBERMAN BROADCASTING, INC.,
                            a California corporation

          Jose Liberman and Lenard Liberman certify that:

          1. They are the duly elected and acting President and Secretary,
respectively, of Liberman Broadcasting, Inc., a California corporation.

          2. The Articles of Incorporation of the corporation are amended to add
the following Article VI, which reads in its entirety as follows:

             "Six: The voting power and management of the corporation shall be
          subject to a Voting Agreement and Irrevocable Proxy (the "Agreement"),
          dated as of February 15, 1995, by and among Jose Liberman, Lenard
          Liberman and Alta Subordinated Debt Partners III, L.P., a
          Massachusetts limited partnership, a copy of which is on file with the
          Secretary of the corporation."

          3. The Articles of Incorporation of the corporation are amended to add
the following Article VII, which reads in its entirety as follows:

             "Seven: The management of the business and conduct of the affairs
          of the corporation shall be subject to the provisions of the
          Agreement, including the requirement that the corporation voluntarily
          wind up and dissolve upon the occurrence of a Mandatory Sale Event (as
          defined in the Agreement)."

          4. The foregoing amendment has been approved by the Board of Directors
of the corporation.

          5. The foregoing amendment was approved by the required vote of the
shareholders of the corporation in accordance with Section 902 of the California
General Corporation Law. The total number of outstanding shares of the
corporation is 50. The number of shares voting in favor of the amendment equaled
100% of the outstanding shares.

          IN WITNESS WHEREOF, the undersigned have executed this Certificate on
February 15, 1995.

                                                 /s/  Jose Liberman
                                                 -------------------------------
                                                 Jose Liberman, President


                                                 /s/ Lenard Liberman
                                                 -------------------------------



                                                 Lenard Liberman, Secretary

          The undersigned, Jose Liberman and Lenard Liberman, the President and
Secretary, respectively, of Liberman Broadcasting, Inc., a California
corporation, each declares under penalty of perjury that the matters set out in
the foregoing Certificate of Amendment are true of their own knowledge.

          Executed at Los Angeles, California on February 15, 1995.



                                                 /s/  Jose Liberman
                                                 -------------------------------
                                                 Jose Liberman, President


                                                 /s/ Lenard Liberman
                                                 -------------------------------
                                                 Lenard Liberman, Secretary

                                       2



                       ACTION BY UNANIMOUS WRITTEN CONSENT
                                       OF
                                    DIRECTORS
                                       OF
                          LIBERMAN BROADCASTING, INC.,
                            a California corporation

          The undersigned, constituting all of the directors of Liberman
Broadcasting, Inc., a California corporation (this "Corporation"), acting
pursuant to the authority of Section 307(b) of the California General
Corporation Law, hereby adopt the following recitals and resolutions, effective
as of February 15, 1995:

ELECTION OF NEW DIRECTOR

          WHEREAS, the shareholders of this Corporation recently amended the
Bylaws of this Corporation to increase the current number of directors of this
Corporation from two to three and one vacancy currently exists on the Board of
Directors; and

          WHEREAS, it has been proposed that a designee of Burr, Egan, Deleage &
Co. be elected as a director of this Corporation to fill the vacancy created to
serve until the next annual meeting of shareholders and until his successor has
been duly elected and qualified;

          NOW, THEREFORE, BE IT RESOLVED, that upon receipt of written notice
from Burr, Egan, Deleage & Co. identifying its designee and immediately
following such designee's qualification with, or approval by, the Federal
Communications Commission, such designee shall be elected as a director of this
Corporation to serve until the next annual meeting of shareholders and until his
successor is duly elected and qualified.

AMENDMENT TO ARTICLES OF INCORPORATION

          WHEREAS, it is deemed to be desirable and in the best interests of
this Corporation and its shareholders that the Articles of Incorporation of this
Corporation be amended as set forth below; and

          WHEREAS, the shareholders of this Corporation are required to approve
the proposed amendment to the Articles of Incorporation;

          NOW, THEREFORE, BE IT RESOLVED, that subject to approval by this
Corporation's shareholders, the following amendment of the Articles of
Incorporation of this Corporation is hereby adopted and approved:

                                       3



          The Articles of Incorporation of this Corporation are amended to add
          the following Article VI, which reads in its entirety as follows:

               "Six: The voting power and management of the corporation shall be
          subject to a Voting Agreement and Irrevocable Proxy (the "Agreement"),
          dated as of February 15, 1995, by and among Jose Liberman, Lenard D.
          Liberman and Alta Subordinated Debt Partners III, L.P., a
          Massachusetts limited partnership, a copy of which is on file with the
          Secretary of the corporation."

          The Articles of Incorporation of this Corporation are amended to add
          the following Article VII, which reads in its entirety as follows:

               "Seven: The management of the business and conduct of the affairs
          of the corporation shall be subject to the provisions of the
          Agreement, including the requirement that the corporation voluntarily
          wind up and dissolve upon the occurrence of a Mandatory Sale Event (as
          defined in the Agreement)."

          RESOLVED FURTHER, that the foregoing amendment to the Articles of
Incorporation of this Corporation shall be submitted to the shareholders of this
Corporation for such shareholders' consideration.

          RESOLVED FURTHER, that subject to the approval of the foregoing
amendment by the shareholders of this Corporation, the officers of this
Corporation be, and each of them hereby is, authorized in the name and on behalf
of this Corporation to prepare or cause to be prepared and to execute, verify
and file or cause to be filed with the California Secretary of State, a
Certificate of Amendment of the Articles of Incorporation of this Corporation
relating to the foregoing amendment.

          RESOLVED FURTHER, that each of the officers of this Corporation is
authorized to take such further actions and to execute and deliver such further
documents as shall be necessary to effect the foregoing amendment, the necessity
thereof to be conclusively evidenced by the taking of such further actions or
the execution and delivery of such further documents.


                                                 /s/ Jose Liberman
                                                 -------------------------------
                                                 Jose Liberman


                                                 /s/ Lenard D. Liberman
                                                 -------------------------------
                                                 Lenard D. Liberman

                                       4



                     ACTION BY UNANIMOUS WRITTEN CONSENT OF
                               THE SHAREHOLDERS OF
                          LIBERMAN BROADCASTING, INC.,
                            a California corporation

          The undersigned, being the shareholders of Liberman Broadcasting,
Inc., a California corporation (this "Corporation"), acting pursuant to the
authority of Section 603 of the California General Corporation Law, hereby adopt
the following recitals and resolution, effective as of February 15, 1995:

AMENDMENT TO ARTICLES OF INCORPORATION

          WHEREAS, it is deemed to be desirable and in the best interests of
this Corporation that the Articles of Incorporation of this Corporation be
amended as set forth below; and

          WHEREAS, the Board of Directors of this Corporation has adopted and
approved the proposed amendment subject to approval by the undersigned
shareholders of this Corporation;

          NOW, THEREFORE, BE IT RESOLVED, that the following amendment of the
Articles of Incorporation of this Corporation is hereby adopted and approved:

          The Articles of Incorporation of this Corporation are amended to add
          the following Article VI, which reads in its entirety as follows:

               "Six: The voting power and management of the corporation shall be
          subject to a Voting Agreement and Irrevocable Proxy (the "Agreement"),
          dated as of February 15, 1995, by and among Jose Liberman, Lenard
          Liberman and Alta Subordinated Debt Partners III, L.P., a
          Massachusetts limited partnership, a copy of which is on file with the
          Secretary of the corporation."

          The Articles of Incorporation of this Corporation are amended to add
          the following Article VII, which reads in its entirety as follows:

               "Seven: The management of the business and conduct of the affairs
          of the corporation shall be subject to the provisions of the
          Agreement, including the requirement that the corporation voluntarily
          wind up and dissolve upon the occurrence of a Mandatory Sale Event (as
          defined in the Agreement)."

AMENDMENT TO BYLAWS

                                       5



          WHEREAS, it is deemed to be desirable and in the best interest of this
Corporation to amend the Bylaws of this Corporation to increase the current
number of directors of this Corporation from two to three;

          NOW, THEREFORE, BE IT RESOLVED, that Section 2 of Article III of the
Bylaws is amended to read in full as follows:

          "Section 2. NUMBER OF DIRECTORS. The authorized number of directors
          shall be three until changed by amendment to the Articles of
          Incorporation or by a Bylaw duly adopted by the shareholders."

                                                 /s/  Jose Liberman
                                                 -------------------------------
                                                 Jose Liberman


                                                 /s/ Lenard Liberman
                                                 -------------------------------
                                                 Lenard Liberman

                                       6



                            CERTIFICATE OF SECRETARY
                                       OF
                          LIBERMAN BROADCASTING, INC.,
                            a California corporation

          I, Lenard D. Liberman, Secretary of Liberman Broadcasting, Inc., a
California corporation (this "Corporation"), hereby certify that attached hereto
as Exhibit A is a true, correct and complete copy of the amendment to Article
III, Section 2 of the Bylaws of this Corporation as duly adopted by Action by
Unanimous Written Consent of the Shareholders of this Corporation on February
15, 1995.

          IN WITNESS WHEREOF, the undersigned has executed this Certificate as
of February 15, 1995.

                                                 /s/ Lenard D. Liberman
                                                 -------------------------------
                                                 Lenard D. Liberman
                                                 Secretary

                                       7



                                    EXHIBIT A

                     Amendment to Article III, Section 2 of
                    the Bylaws of Liberman Broadcasting, Inc.
                            a California corporation

          Section 2. NUMBER OF DIRECTORS. The authorized number of directors
shall be three until changed by amendment to the Articles of Incorporation or by
a Bylaw duly adopted by the shareholders.

                                       8




                            CERTIFICATE OF AMENDMENT
                                       OF
                            ARTICLES OF INCORPORATION
                                       OF
                          LIBERMAN BROADCASTING, INC.,
                            a California corporation

          Jose Liberman and Lenard D. Liberman certify that:

          1. They are the duly elected and acting President and Secretary,
respectively, of Liberman Broadcasting, Inc., a California corporation.

          2. The Articles of Incorporation of the corporation are amended to add
the following Article VIII, which reads in its entirety as follows:

          "Eight: The liability of directors of the corporation for monetary
damages shall be eliminated to the fullest extent permissible under California
law.

          The corporation is authorized to provide indemnification of agents (as
defined in Section 317 of the California Corporations Code) for breach of duty
to the corporation and its shareholders through bylaw provisions, agreements
with agents, vote of shareholders or disinterested directors, or otherwise, in
excess of the indemnification otherwise permitted by Section 317 of the
California Corporations Code, subject only to the applicable limits set forth in
Section 204 of the California Corporations Code."

          3. The foregoing amendment has been approved by the Board of Directors
of the corporation.

          4. The foregoing amendment was approved by the required vote of the
shareholders of the corporation in accordance with Section 902 of the California
General Corporation Law. The total number of outstanding shares of this
Corporation is 50. The number of shares voting in favor of the amendment equaled
100% of the outstanding shares.

          We further declare under penalty of perjury under the laws of the
State of California that the matters set out in this Certificate of Amendment
are true and correct of our own knowledge.



          IN WITNESS WHEREOF, the undersigned have executed this Certificate on
January 31, 2002.

                                    /s/ Jose Liberman
                                    -----------------------------
                                    Jose Liberman, President


                                    /s/ Lenard D. Liberman
                                    -----------------------------
                                    Lenard D. Liberman, Secretary

                                       2



                       ACTION BY UNANIMOUS WRITTEN CONSENT
                                       OF
                                    DIRECTORS
                                       OF
                          LIBERMAN BROADCASTING, INC.,
                            a California corporation

          The undersigned, constituting all of the directors of Liberman
Broadcasting, Inc., a California corporation (this "Corporation"), acting
pursuant to the authority of Section 307(b) of the California General
Corporation Law, hereby adopt the following recitals and resolutions, effective
as of January 31, 2002:

AMENDMENT TO ARTICLES OF INCORPORATION

          WHEREAS, it is deemed to be desirable and in the best interests of
this Corporation and its sole shareholder that the Articles of Incorporation of
this Corporation be amended as set forth below; and

          WHEREAS, the sole shareholder of this Corporation is required to
approve the proposed amendment to the Articles of Incorporation;

          NOW, THEREFORE, BE IT RESOLVED, that subject to approval by this
Corporation's sole shareholder, the following amendment of the Articles of
Incorporation of this Corporation is hereby adopted and approved:

          The Articles of Incorporation of this Corporation shall be amended to
add the following Article VIII, which reads in its entirety as follows:

          "Eight: The liability of directors of the corporation for monetary
damages shall be eliminated to the fullest extent permissible under California
law.

          The corporation is authorized to provide indemnification of agents (as
defined in Section 317 of the California Corporations Code) for breach of duty
to the corporation and its shareholders through bylaw provisions, agreements
with agents, vote of shareholders or disinterested directors, or otherwise, in
excess of the indemnification otherwise permitted by Section 317 of the
California



Corporations Code, subject only to the applicable limits set forth in Section
204 of the California Corporations Code."

          RESOLVED FURTHER, that the foregoing amendment to the Articles of
Incorporation of this Corporation shall be submitted to the sole shareholder of
this Corporation for such shareholder's consideration.

          RESOLVED FURTHER, that subject to the approval of the foregoing
amendment by the sole shareholder of this Corporation, the officers of this
Corporation be, and each of them hereby is, authorized in the name and on behalf
of this Corporation to prepare or cause to be prepared and to execute, verify
and file or cause to be filed with the California Secretary of State, a
Certificate of Amendment of the Articles of Incorporation of this Corporation
relating to the foregoing amendment.

          RESOLVED FURTHER, that each of the officers of this Corporation is
authorized to take such further actions and to execute and deliver such further
documents as shall be necessary to effect the foregoing amendment, the necessity
thereof to be conclusively evidenced by the taking of such further actions or
the execution and delivery of such further documents.

AMENDED AND RESTATED BYLAWS

          WHEREAS, this Board of Directors deems it to be in the best interests
of this Corporation to amend and restate the Bylaws of this Corporation in their
entirety as set forth on Exhibit A attached hereto and incorporated herein by
this reference (the "Amended and Restated Bylaws");

          NOW, THEREFORE, BE IT RESOLVED, that the Bylaws of this Corporation
be, and hereby are, amended and restated in their entirety to read in full as
set forth on Exhibit A attached hereto and incorporated herein by this
reference.

          RESOLVED FURTHER, that the Secretary of this Corporation is authorized
and directed to execute a certificate of the adoption of said Amended and
Restated Bylaws and to enter said amendment as so certified in the minute book
of this Corporation.

                  [Remainder of Page Intentionally Left Blank]

                                       2



          IN WITNESS WHEREOF, the undersigned have executed this Action by
Unanimous Written Consent of Directors as of the above date, thereby agreeing
that the foregoing recitals and resolutions shall be of the same force and
effect as if regularly adopted at a meeting of the Board of Directors of this
Corporation held upon due notice.

          This Action by Unanimous Written Consent of the Board of Directors of
this Corporation may be executed in counterparts, each of which shall be deemed
an original, but all of which taken together shall constitute but one and the
same Action by Unanimous Written Consent.


                                        /s/ Jose Liberman
                                    -----------------------------
                                    JOSE LIBERMAN


                                        /s/ Lenard D. Liberman
                                    -----------------------------
                                    LENARD D. LIBERMAN

                                       3



                            ACTION BY WRITTEN CONSENT
                                       OF
                              THE SOLE SHAREHOLDER
                                       OF
                          LIBERMAN BROADCASTING, INC.,
                            a California corporation

          The undersigned, being the sole shareholder of Liberman Broadcasting,
Inc., a California corporation (this "Corporation"), acting pursuant to the
authority of Section 603 of the California General Corporation Law, hereby
adopts the following recitals and resolution, effective as of January 31, 2002:

AMENDMENT TO ARTICLES OF INCORPORATION

          WHEREAS, it is deemed to be desirable and in the best interests of
this Corporation that the Articles of Incorporation of this Corporation be
amended as set forth below; and

          WHEREAS, the Board of Directors of this Corporation has adopted and
approved the proposed amendment subject to approval by the sole shareholder of
this Corporation;

          NOW, THEREFORE, BE IT RESOLVED, that the following amendment of the
Articles of Incorporation of this Corporation is hereby adopted and approved:

          The Articles of Incorporation of this Corporation shall be amended to
add the following Article VIII, which reads in its entirety as follows:

          "Eight: The liability of directors of the corporation for monetary
damages shall be eliminated to the fullest extent permissible under California
law.

          The corporation is authorized to provide indemnification of agents (as
defined in Section 317 of the California Corporations Code) for breach of duty
to the corporation and its shareholders through bylaw provisions, agreements
with agents, vote of shareholders or disinterested directors, or otherwise, in
excess of the indemnification otherwise permitted by Section 317 of the
California Corporations Code, subject only to the applicable limits set forth in
Section 204 of the California Corporations Code."

                                       1



AMENDED AND RESTATED BYLAWS

          WHEREAS, the sole shareholder of this Corporation deems it to be in
the best interests of this Corporation to amend and restate the Bylaws of this
Corporation in their entirety as set forth on Exhibit A attached hereto and
incorporated herein by this reference (the "Amended and Restated Bylaws");

          NOW, THEREFORE, BE IT RESOLVED, that the Amended and Restated Bylaws
of this Corporation be, and hereby are, approved.

                  [Remainder of Page Intentionally Left Blank]

                                      2



          IN WITNESS WHEREOF, the undersigned has executed this Action by
Written Consent of the Sole Shareholder as of the above date, thereby agreeing
that the foregoing recitals and resolutions shall be of the same force and
effect as if regularly adopted at a meeting of the Shareholders of this
Corporation held upon due notice.

                                 LBI HOLDINGS II, INC.,
                                 a California corporation
                                 50 Shares Common Stock

                                 By:     /s/ Lenard D. Liberman
                                         -------------------------------------
                                         Lenard D. Liberman
                                         Executive Vice President and Secretary

                                      3

EX-3.15

                                                                    Exhibit 3.15

                           AMENDED AND RESTATED BYLAWS

                                       OF

                          LIBERMAN BROADCASTING, INC.,
                            a California corporation



                                      INDEX



                                                                            Page
                                                                            ----
                                                                         
ARTICLE I - Offices.

     Section 1.  PRINCIPAL EXECUTIVE OFFICE ..............................     1
     Section 2.  OTHER OFFICES ...........................................     1

ARTICLE II - Shareholders.

     Section 1.  PLACE OF MEETINGS .......................................     1
     Section 2.  ANNUAL MEETINGS .........................................     1
     Section 3.  SPECIAL MEETINGS ........................................     1
     Section 4.  NOTICE OF ANNUAL OR SPECIAL MEETINGS ....................     1
     Section 5.  QUORUM ..................................................     2
     Section 6.  ADJOURNED MEETINGS AND NOTICE THEREOF ...................     2
     Section 7.  VOTING ..................................................     2
     Section 8.  RECORD DATE .............................................     4
     Section 9.  CONSENT OF ABSENTEES ....................................     5
     Section 10. ACTION WITHOUT MEETING ..................................     5
     Section 11. PROXIES .................................................     5
     Section 12. INSPECTORS OF ELECTION ..................................     6
     Section 13. CONDUCT OF MEETING ......................................     6

ARTICLE III - Directors.

     Section 1.  POWERS ..................................................     6
     Section 2.  NUMBER OF DIRECTORS .....................................     7
     Section 3.  ELECTION AND TERM OF OFFICE .............................     7
     Section 4.  VACANCIES ...............................................     7
     Section 5.  PLACE OF MEETING ........................................     8
     Section 6.  REGULAR MEETINGS ........................................     8
     Section 7.  SPECIAL MEETINGS ........................................     8
     Section 8.  QUORUM ..................................................     8
     Section 9.  PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE .......     9
     Section 10. WAIVER OF NOTICE ........................................     9
     Section 11. ADJOURNMENT .............................................     9
     Section 12. FEES AND COMPENSATION ...................................     9
     Section 13. ACTION WITHOUT MEETING ..................................     9
     Section 14. RIGHTS OF INSPECTION ....................................     9
     Section 15. COMMITTEES ..............................................     9

ARTICLE IV - Officers.

     Section 1.  OFFICERS ................................................    10
     Section 2.  ELECTION ................................................    10
     Section 3.  SUBORDINATE OFFICERS ....................................    10


                                       i



                                                                          
     Section 4.  REMOVAL AND RESIGNATION .................................    11
     Section 5.  VACANCIES ...............................................    11
     Section 6.  CHAIRMAN OF THE BOARD ...................................    11
     Section 7.  PRESIDENT ...............................................    11
     Section 8.  VICE PRESIDENTS .........................................    11
     Section 9.  SECRETARY ...............................................    11
     Section 10. CHIEF FINANCIAL OFFICER .................................    12

ARTICLE V - Other Provisions.

     Section 1.  INSPECTION OF CORPORATE RECORDS .........................    12
     Section 2.  INSPECTION OF BYLAWS ....................................    13
     Section 3.  ENDORSEMENT OF DOCUMENTS; CONTRACTS .....................    13
     Section 4.  CERTIFICATES OF STOCK ...................................    13
     Section 5.  REPRESENTATION OF SHARES OF OTHER CORPORATIONS ..........    14
     Section 6.  STOCK PURCHASE PLANS ....................................    14
     Section 7.  CONSTRUCTION AND DEFINITIONS ............................    14
     Section 8.  AMENDMENTS ..............................................    14
     Section 9.  ANNUAL REPORT TO SHAREHOLDERS ...........................    15

ARTICLE VI - Indemnification.

     Section 1.  INDEMNIFICATION OF DIRECTORS AND OFFICERS ...............    15
     Section 2.  INDEMNIFICATION OF AGENTS ...............................    16
     Section 3.  RIGHT OF DIRECTORS AND OFFICERS TO BRING SUIT ...........    16
     Section 4.  SUCCESSFUL DEFENSE ......................................    17
     Section 5.  NON-EXCLUSIVITY OF RIGHTS ...............................    17
     Section 6.  INSURANCE ...............................................    17
     Section 7.  EXPENSES AS A WITNESS ...................................    17
     Section 8.  INDEMNITY AGREEMENTS ....................................    17



                                       ii



                           AMENDED AND RESTATED BYLAWS

                           for the regulation, except
                       as otherwise provided by statute or
                         its Articles of Incorporation,

                                       of

                          LIBERMAN BROADCASTING, INC.,
                            a California corporation

                              ARTICLE I. Offices.

          Section 1. PRINCIPAL EXECUTIVE OFFICE. The corporation's principal
executive office shall be fixed and located at such place as the Board of
Directors (herein called the "Board") shall determine. The Board is granted full
power and authority to change said principal executive office from one location
to another.

          Section 2. OTHER OFFICES. Branch or subordinate offices may be
established at any time by the Board at any place or places.

                           ARTICLE II. Shareholders.

          Section 1. PLACE OF MEETINGS. Meetings of shareholders shall be held
either at the principal executive office of the corporation or at any other
place within or without the State of California which may be designated either
by the Board or by the written consent of all persons entitled to vote thereat,
given either before or after the meeting and filed with the Secretary.

          Section 2. ANNUAL MEETINGS. The annual meetings of shareholders shall
be held on such date and at such time as may be fixed by the Board.

          Section 3. SPECIAL MEETINGS. Special meetings of the shareholders may
be called at any time by the Board, the Chairman of the Board, the President, or
by the holders of shares entitled to cast not less than ten percent of the votes
at such meeting. Upon request in writing to the Chairman of the Board, the
President, any Vice President or the Secretary by any person (other than the
Board) entitled to call a special meeting of shareholders, the officer forthwith
shall cause notice to be given to the shareholders entitled to vote that a
meeting will be held at a time requested by the person or persons calling the
meeting, not less than thirty-five nor more than sixty days after the receipt of
the request. If the notice is not given within twenty days after receipt of the
request, the persons entitled to call the meeting may give the notice.

          Section 4. NOTICE OF ANNUAL OR SPECIAL MEETINGS. Written notice of
each annual or special meeting of shareholders shall be given not less than ten
nor more than sixty days before the date of the meeting to each shareholder
entitled to vote thereat. Such notice shall state the place, date and hour of
the meeting and (i) in the case of a special meeting,



the general nature of the business to be transacted, and no other business may
be transacted, or (ii) in the case of the annual meeting, those matters which
the Board, at the time of the mailing of the notice, intends to present for
action by the shareholders, but, subject to the provisions of applicable law,
any proper matter may be presented at the meeting for such action. The notice of
any meeting at which directors are to be elected shall include the names of
nominees intended at the time of the notice to be presented by management for
election.

          Notice of a shareholders' meeting shall be given either personally or
by mail or by other means of written communication, addressed to the shareholder
at the address of such shareholder appearing on the books of the corporation or
given by the shareholder to the corporation for the purpose of notice, or, if no
such address appears or is given, at the place where the principal executive
office of the corporation is located or by publication at least once in a
newspaper of general circulation in the county in which the principal executive
office is located. Notice by mail shall be deemed to have been given at the time
a written notice is deposited in the United States mails, postage prepaid. Any
other written notice shall be deemed to have been given at the time it is
personally delivered to the recipient or is delivered to a common carrier for
transmission, or actually transmitted by the person giving the notice by
electronic means, to the recipient.

          Section 5. QUORUM. A majority of the shares entitled to vote,
represented in person or by proxy, shall constitute a quorum at any meeting of
shareholders. If a quorum is present, the affirmative vote of a majority of the
shares represented and voting at the meeting (which shares voting affirmatively
also constitute at least a majority of the required quorum) shall be the act of
the shareholders, unless the vote of a greater number or voting by classes is
required by law or by the Articles, except as provided in the following
sentence. The shareholders present at a duly called or held meeting at which a
quorum is present may continue to do business until adjournment, notwithstanding
the withdrawal of enough shareholders to leave less than a quorum, if any action
taken (other than adjournment) is approved by at least a majority of the shares
required to constitute a quorum.

          Section 6. ADJOURNED MEETINGS AND NOTICE THEREOF. Any Shareholders'
meeting, whether or not a quorum is present, may be adjourned from time to time
by the vote of a majority of the shares represented either in person or by
proxy, but in the absence of a quorum (except as provided in Section 5 of this
Article) no other business may be transacted at such meeting.

          It shall not be necessary to give any notice of the time and place of
the adjourned meeting or of the business to be transacted thereat, other than by
announcement at the meeting at which such adjournment is taken; provided,
however, when any shareholders' meeting is adjourned for more than 45 days or,
if after adjournment a new record date is fixed for the adjourned meeting,
notice of the adjourned meeting shall be given as in the case of an original
meeting.

          Section 7. VOTING. The shareholders entitled to notice of any meeting
or to vote at any such meeting shall be only persons in whose name shares stand
on the stock records of the corporation on the record date determined in
accordance with Section 8 of this Article.

                                       2



          Subject to the following sentence and to the provisions of Section 708
of the California General Corporation Law, every shareholder entitled to vote at
any election of directors may cumulate such shareholder's votes and give one
candidate a number of votes equal to the number of directors to be elected
multiplied by the number of votes to which the shareholder's shares are
entitled, or distribute the shareholder's votes on the same principle among as
many candidates as the shareholder thinks fit. No shareholder shall be entitled
to cumulate votes for any candidate or candidates pursuant to the preceding
sentence unless such candidate or candidates' names have been placed in
nomination prior to the voting and the shareholder has given notice at the
meeting prior to the voting of the shareholder's intention to cumulate the
shareholder's votes. If any one shareholder has given such notice, all
shareholders may cumulate their votes for candidates in nomination.

          Elections need not be by ballot, provided, however, that all elections
for directors must be by ballot upon demand made by a shareholder at the meeting
and before the voting begins.

          In any election of directors, the candidates receiving the highest
number of votes of the shares entitled to be voted for them up to the number of
directors to be elected by such shares are elected.

          Voting shall in all cases be subject to the provisions of Chapter 7 of
the California General Corporation Law, and to the following provisions:

          (a) Subject to clause (g), shares held by an administrator, executor,
guardian, conservator or custodian may be voted by such holder either in person
or by proxy, without a transfer of such shares into the holder's name; and
shares standing in the name of a trustee may be voted by the trustee, either in
person or by proxy, but no trustee shall be entitled to vote shares held by such
trustee without a transfer of such shares into the trustee's name.

          (b) Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into the receiver's name if authority
to do so is contained in the order of the court by which such receiver was
appointed.

          (c) Subject to the provisions of Section 705 of the California General
Corporation Law and except where otherwise agreed in writing between the
parties, a shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.

          (d) Shares standing in the name of a minor may be voted and the
corporation may treat all rights incident thereto as exercisable by the minor,
in person or by proxy, whether or not the corporation has notice, actual or
constructive, of the nonage, unless a guardian of the minor's property has been
appointed and written notice of such appointment given to the corporation.

          (e) Shares standing in the name of another corporation, domestic or
foreign, may be voted by such officer, agent or proxyholder as the bylaws of
such other corporation may

                                       3



prescribe or, in the absence of such provision, as the Board of Directors of
such other corporation may determine or, in the absence of such determination,
by the chairman of the board, president or any vice president of such other
corporation, or by any other person authorized to do so by the chairman of the
board, president or any vice president of such other corporation. Shares which
are purported to be voted or any proxy purported to be executed in the name of a
corporation (whether or not any title of the person signing is indicated) shall
be presumed to be voted or the proxy executed in accordance with the provisions
of this clause, unless the contrary is shown.

          (f) Shares of the corporation owned by any subsidiary shall not be
entitled to vote on any matter.

          (g) Shares held by the corporation in a fiduciary capacity, and shares
of the issuing corporation held in a fiduciary capacity by any subsidiary, shall
not be entitled to vote on any matter, except to the extent that the settlor or
beneficial owner possesses and exercises a right to vote or to give the
corporation binding instructions as to how to vote such shares.

          (h) If shares stand of record in the names of two or more persons,
whether fiduciaries, members of a partnership, joint tenants, tenants in common,
husband and wife as community property, tenants by the entirety, voting
trustees, persons entitled to vote under a shareholder voting agreement or
otherwise, or if two or more persons (including proxyholders) have the same
fiduciary relationship respecting the same shares, unless the secretary of the
corporation is given written notice to the contrary and is furnished with a copy
of the instrument or order appointing them or creating the relationship wherein
it is so provided, their acts with respect to voting shall have the following
effect:

              (i)   If only one votes, such act binds all;

              (ii)  If more than one vote, the act of the majority so voting
     binds all;

              (iii) If more than one vote, but the vote is evenly split on any
     particular matter, each faction may vote the securities in question
     proportionately.

If the instrument so filed or the registration of the shares shows that any such
tenancy is held in unequal interests, a majority or even split for the purpose
of this section shall be a majority or even split in interest.

          Section 8. RECORD DATE. The Board may fix, in advance, a record date
for the determination of the shareholders entitled to notice of any meeting or
to vote or entitled to receive payment of any dividend or other distribution, or
any allotment of rights, or to exercise rights in respect of any other lawful
action. The record date so fixed shall be not more than 60 days nor less than 10
days prior to the date of the meeting nor more than 60 days prior to any other
action. When a record date is so fixed, only shareholders of record on that date
are entitled to notice of and to vote at the meeting or to receive the dividend,
distribution, or allotment of rights, or to exercise the rights, as the case may
be, notwithstanding any transfer of shares on the books of the corporation after
the record date. A determination of shareholders of record entitled to notice of
or to vote at a meeting of shareholders shall apply to any adjournment of the
meeting unless the Board fixes a new record date for the adjourned meeting. The
Board shall fix a new record date if the meeting is adjourned for more than
forty-five days.

                                       4



          If no record date is fixed by the Board, the record date for
determining shareholders entitled to notice of or to vote at a meeting of
shareholders shall be at the close of business on the business day next
preceding the day on which notice is given or, if notice is waived, at the close
of business on the business day next preceding the day on which the meeting is
held. The record date for determining shareholders for any purpose other than
set forth in this Section 8 or Section 10 of this Article shall be at the close
of business on the day on which the Board adopts the resolution relating
thereto, or the sixtieth day prior to the date of such other action, whichever
is later.

          Section 9.  CONSENT OF ABSENTEES. The transactions of any meeting of
shareholders, however called and noticed, and wherever held, are as valid as
though had at a meeting duly held after regular call and notice, if a quorum is
present either in person or by proxy, and if, either before or after the
meeting, each of the persons entitled to vote, not present in person or by
proxy, signs a written waiver of notice, or a consent to the holding of the
meeting or an approval of the minutes thereof. All such waivers, consents or
approvals shall be filed with the corporate records or made a part of the
minutes of the meeting. Attendance of a person at a meeting shall constitute a
waiver of notice of and presence at such meeting, except when the person
objects, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened and except that
attendance at a meeting is not a waiver of any right to object to the
consideration of matters required by the California General Corporation Law to
be included in the notice but not so included, if such objection is expressly
made at the meeting. Neither the business to be transacted at nor the purpose of
any regular or special meeting of shareholders need be specified in any written
waiver of notice, consent to the holding of the meeting or approval of the
minutes thereof, except as provided in Section 601(f) of the California General
Corporation Law.

          Section 10. ACTION WITHOUT MEETING. Subject to Section 603 of the
California General Corporation Law, any action which, under any provision of the
California General Corporation Law, may be taken at any annual or special
meeting of shareholders, may be taken without a meeting and without prior notice
if a consent in writing, setting forth the action so taken, shall be signed by
the holders of outstanding shares having not less than the minimum number of
votes that would be necessary to authorize or take such action at a meeting at
which all shares entitled to vote thereon were present and voted. Unless a
record date for voting purposes be fixed as provided in Section 8 of this
Article, the record date for determining shareholders entitled to give consent
pursuant to this Section 10, when no prior action by the Board has been taken,
shall be the day on which the first written consent is given.

          Section 11. PROXIES. Every person entitled to vote shares has the
right to do so either in person or by one or more persons authorized by a
written proxy executed by such shareholder and filed with the Secretary. Any
proxy duly executed is not revoked and continues in full force and effect until
revoked by the person executing it prior to the vote pursuant thereto. Such
revocation may be effected either, (i) by a writing delivered to the Secretary
of the Corporation stating that the proxy is revoked, (ii) by a subsequent proxy
executed by the person executing the prior proxy and presented to the meeting,
or (iii) by attendance at the meeting and voting in person by the person
executing the proxy; provided, however, that no proxy shall be valid after the
expiration of eleven months from the date of its execution unless otherwise
provided in the proxy.

                                       5



          Section 12. INSPECTORS OF ELECTION. In advance of any meeting of
shareholders, the Board may appoint inspectors of election to act at such
meeting and any adjournment thereof. If inspectors of election be not so
appointed, or if any persons so appointed fail to appear or refuse to act, the
chairman of any such meeting may, and on the request of any shareholder or
shareholder's proxy shall, make such appointment at the meeting. The number of
inspectors shall be either one or three. If appointed at a meeting on the
request of one or more shareholders or proxies, the majority of shares present
shall determine whether one or three inspectors are to be appointed.

          The duties of such inspectors shall be as prescribed by Section 707(b)
of the California General Corporation Law and shall include: determining the
number of shares outstanding and the voting power of each; determining the
shares represented at the meeting; determining the existence of a quorum;
determining the authenticity, validity and effect of proxies; receiving votes,
ballots or consents; hearing and determining all challenges and questions in any
way arising in connection with the right to vote; counting and tabulating all
votes or consents; determining when the polls shall close; determining the
result; and doing such acts as may be proper to conduct the election or vote
with fairness to all shareholders. If there are three inspectors of election,
the decision, act or certificate of a majority is effective in all respects as
the decision, act or certificate of all.

          Section 13. CONDUCT OF MEETING. The President shall preside as
chairman at all meetings of the shareholders. The chairman shall conduct each
such meeting in a businesslike and fair manner, but shall not be obligated to
follow any technical, formal or parliamentary rules or principles of procedure.
The chairman's rulings on procedural matters shall be conclusive and binding on
all shareholders, unless at the time of a ruling a request for a vote is made to
the shareholders holding shares entitled to vote and which are represented in
person or by proxy at the meeting, in which case the decision of a majority of
such shares shall be conclusive and binding on all shareholders. Without
limiting the generality of the foregoing, the chairman shall have all of the
powers usually vested in the chairman of a meeting of shareholders.

                            ARTICLE III. Directors.

          Section 1. POWERS. Subject to limitations of the Articles, of these
Bylaws and of the California General Corporation Law relating to action required
to be approved by the shareholders or by the outstanding shares, the business
and affairs of the corporation shall be managed and all corporate powers shall
be exercised by or under the direction of the Board. The Board may delegate the
management of the day-to-day operation of the business of the corporation to a
management company or other person provided that the business and affairs of the
corporation shall be managed and all corporate powers shall be exercised under
the ultimate direction of the Board. Without prejudice to such general powers,
but subject to the same limitations, it is hereby expressly declared that the
Board shall have the following powers in addition to the other powers enumerated
in these Bylaws:

          (a) To select and remove all the other officers, agents and employees
of the corporation, prescribe the powers and duties for them as may not be
inconsistent with law, the

                                       6



Articles or these Bylaws, fix their compensation and require from them security
for faithful service.

          (b) To conduct, manage and control the affairs and business of the
corporation and to make such rules and regulations therefor not inconsistent
with law, the Articles or these Bylaws, as they may deem best.

          (c) To adopt, make and use a corporate seal, and to prescribe the
forms of certificates of stock, and to alter the form of such seal and of such
certificates from time to time as they may deem best.

          (d) To authorize the issuance of shares of stock of the corporation
from time to time, upon such terms and for such consideration as may be lawful.

          (e) To borrow money and incur indebtedness for the purposes of the
corporation, and to cause to be executed and delivered therefor, in the
corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages,
pledges, hypothecations or other evidences of debt and securities therefor.

          Section 2. NUMBER OF DIRECTORS. The authorized number of directors
shall be two (2) until changed by amendment of the Articles or by a Bylaw duly
adopted by the shareholders amending this Section 2.

          Section 3. ELECTION AND TERM OF OFFICE. The directors shall be elected
at each annual meeting of the shareholders, but if any such annual meeting is
not held or the directors are not elected thereat, the directors may be elected
at any special meeting of shareholders held for that purpose. Each director
shall hold office until the next annual meeting and until a successor has been
elected and qualified.

          Section 4. VACANCIES. Any director may resign effective upon giving
written notice to the Chairman of the Board, the President, the Secretary or the
Board, unless the notice specifies a later time for the effectiveness of such
resignation. If the resignation is effective at a future time, a successor may
be elected to take office when the resignation becomes effective.

          Vacancies in the Board, except those existing as a result of a removal
of a director, may be filled by a majority of the remaining directors, though
less than a quorum, or by a sole remaining director, and each director so
elected shall hold office until the next annual meeting and until such
director's successor has been elected and qualified.

          A vacancy or vacancies in the Board shall be deemed to exist in case
of the death, resignation or removal of any director, or if the authorized
number of directors be increased, or if the shareholders fail, at any annual or
special meeting of shareholders at which any director or directors are elected,
to elect the full authorized number of directors to be voted for at that
meeting.

          The Board may declare vacant the office of a director who has been
declared of unsound mind by an order of court or convicted of a felony.

                                       7



          The shareholders may elect a director or directors at any time to fill
any vacancy or vacancies not filled by the directors. Any such election by
written consent other than to fill a vacancy created by removal requires the
consent of a majority of the outstanding shares entitled to vote. Any such
election by written consent to fill a vacancy created by removal requires
unanimous consent.

          No reduction of the authorized number of directors shall have the
effect of removing any director prior to the expiration of the director's term
of office.

          Section 5. PLACE OF MEETING. Regular or special meetings of the Board
shall be held at any place within or without the State of California which has
been designated from time to time by the Board. In the absence of such
designation, regular meetings shall be held at the principal executive office of
the corporation.

          Section 6. REGULAR MEETINGS. Immediately following each annual meeting
of shareholders the Board shall hold a regular meeting for the purpose of
organization, election of officers and the transaction of other business.

          Other regular meetings of the Board shall be held without call on such
dates and at such times as may be fixed by the Board. Call and notice of all
regular meetings of the Board are hereby dispensed with.

          Section 7. SPECIAL MEETINGS. Special meetings of the Board for any
purpose or purposes may be called at any time by the Chairman of the Board, the
President, any Vice President, the Secretary or by any two directors.

          Special meetings of the Board shall be held upon four days' written
notice or forty-eight hours' notice given personally or by telephone, telegraph,
telex or other similar means of communication. Any such notice shall be
addressed or delivered to each director at such director's address as it is
shown upon the records of the corporation or as may have been given to the
corporation by the director for purposes of notice or, if such address is not
shown on such records or is not readily ascertainable, at the place in which the
meetings of the directors are regularly held.

          Notice by mail shall be deemed to have been given at the time a
written notice is deposited in the United States mails, postage prepaid. Any
other written notice shall be deemed to have been given at the time it is
personally delivered to the recipient or is delivered to a common carrier for
transmission, or actually transmitted by the person giving the notice by
electronic means, to the recipient. Oral notice shall be deemed to have been
given at the time it is communicated, in person or by telephone or wireless, to
the recipient or to a person at the office of the recipient who the person
giving the notice has reason to believe will promptly communicate it to the
recipient.

          Section 8. QUORUM. A majority of the authorized number of directors
constitutes a quorum of the board for the transaction of business, except to
adjourn as provided in Section 11 of this Article. Every act or decision done or
made by a majority of the directors present at a meeting duly held at which a
quorum is present shall be regarded as the act of the Board, unless a greater
number be required by law or by the Articles. A meeting at which a

                                       8



quorum is initially present may continue to transact business notwithstanding
the withdrawal of directors, if any action taken is approved by at least a
majority of the required quorum for such meeting.

          Section 9.  PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE. Members
of the Board may participate in a meeting through use of conference telephone or
similar communications equipment, so long as all members participating in such
meeting can hear one another.

          Section 10. WAIVER OF NOTICE. Notice of a meeting need not be given to
any director who signs a waiver of notice or a consent to holding the meeting or
an approval of the minutes thereof, whether before or after the meeting, or who
attends the meeting without protesting, prior thereto or at its commencement,
the lack of notice to such director. All such waivers, consents and approvals
shall be filed with the corporate records or made a part of the minutes of the
meeting.

          Section 11. ADJOURNMENT. A majority of the directors present, whether
or not a quorum is present, may adjourn any directors' meeting to another time
and place. Notice of the time and place of holding an adjourned meeting need not
be given to absent directors if the time and place be fixed at the meeting
adjourned, except as provided in the next sentence. If the meeting is adjourned
for more than 24 hours, notice of any adjournment to another time or place shall
be given prior to the time of the adjourned meeting to the directors who were
not present at the time of the adjournment.

          Section 12. FEES AND COMPENSATION. Directors and members of committees
may receive such compensation, if any, for their services, and such
reimbursement for expenses, as may be fixed or determined by the Board.

          Section 13. ACTION WITHOUT MEETING. Any action required or permitted
to be taken by the Board may be taken without a meeting if all members of the
Board shall individually or collectively consent in writing to such action. Such
consent or consents shall have the same effect as a unanimous vote of the Board
and shall be filed with the minutes of the proceedings of the Board.

          Section 14. RIGHTS OF INSPECTION. Every director shall have the
absolute right at any reasonable time to inspect and copy all books, records and
documents of every kind and to inspect the physical properties of the
corporation and also of its subsidiary corporations, domestic or foreign. Such
inspection by a director may be made in person or by agent or attorney and
includes the right to copy and obtain extracts.

          Section 15. COMMITTEES. The Board may appoint one or more committees,
each consisting of two or more directors, and delegate to such committees any of
the authority of the Board except with respect to:

          (a) The approval of any action for which the General Corporation Law
also requires shareholders' approval or approval of the outstanding shares;

          (b) The filling of vacancies in the Board or on any committee;

                                       9



          (c) The fixing of compensation of the directors for serving on the
Board or on any committee;

          (d) The amendment or repeal of bylaws or the adoption of new bylaws;

          (e) The amendment or repeal of any resolution of the Board which by
its express term is not so amendable or repealable;

          (f) A distribution to the shareholders of the corporation except at a
rate or in a periodic amount or within a price range determined by the Board; or

          (g) The appointment of other committees of the Board or the members
thereof.

          Any such committee must be designated, and the members or alternate
members thereof appointed, by resolution adopted by a majority of the authorized
number of directors and any such committee may be designated an Executive
Committee or by such other name as the Board shall specify. Alternate members of
a committee may replace any absent member at any meeting of the committee. The
Board shall have the power to prescribe the manner in which proceedings of any
such committee shall be conducted. In the absence of any such prescription, such
committee shall have the power to prescribe the manner in which its proceedings
shall be conducted. Unless the Board or such committee shall otherwise provide,
the regular and special meetings and other actions of any such committee shall
be governed by the provisions of this Article applicable to meetings and actions
of the Board. Minutes shall be kept of each meeting of each committee.

                             ARTICLE IV. Officers.

          Section 1. OFFICERS. The officers of the corporation shall be a
President, a Secretary and a Chief Financial Officer. The corporation may also
have, at the discretion of the Board, a Chairman of the Board, one or more Vice
Presidents, one or more Assistant Secretaries, one or more Assistant Financial
Officers, and such other officers as may be elected or appointed in accordance
with the provisions of Section 3 of this Article.

          Section 2. ELECTION. The officers of the corporation, except such
officers as may be elected or appointed in accordance with the provisions of
Section 3 or Section 5 of this Article, shall be chosen annually by, and shall
serve at the pleasure of, the Board, and shall hold their respective offices
until their resignation, removal, or other disqualification from service, or
until their respective successors shall be elected.

          Section 3. SUBORDINATE OFFICERS. The Board may elect, and may empower
the President to appoint, such other officers as the business of the corporation
may require, each of whom shall hold office for such period, have such authority
and perform such duties as are provided in these Bylaws or as the Board may from
time to time determine.

          Section 4. REMOVAL AND RESIGNATION. Any officer may be removed, either
with or without cause, by the Board at any time or, except in the case of an
officer chosen by the Board, by any officer upon whom such power of removal may
be conferred by the Board.

                                       10



Any such removal shall be without prejudice to the rights, if any, of the
officer under any contract of employment of the officer.

          Any officer may resign at any time by giving written notice to the
corporation, but without prejudice to the rights, if any, of the corporation
under any contract to which the officer is a party. Any such resignation shall
take effect at the date of the receipt of such notice or at any later time
specified therein and, unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective.

          Section 5. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filled in the
manner prescribed in these Bylaws for regular election or appointment to such
office.

          Section 6. CHAIRMAN OF THE BOARD. The Chairman of the Board, if there
shall be such an officer, shall, if present, preside at all meetings of the
Board and exercise and perform such other powers and duties as may be from time
to time assigned by the Board.

          Section 7. PRESIDENT. Subject to such power, if any, as may be given
by the Board to the Chairman of the Board, if there be such an officer, the
President is the general manager and chief executive officer of the corporation
and has, subject to the control of the Board, general supervision, direction and
control of the business and officers of the corporation. The President shall
preside at all meetings of the shareholders and, in the absence of the Chairman
of the Board, or if there be none, at all meetings of the Board. The President
has the general powers and duties of management usually vested in the office of
president and general manager of a corporation and such other powers and duties
as may be prescribed by the Board.

          Section 8. VICE PRESIDENTS. In the absence or disability of the
President, the Vice Presidents in order of their rank as fixed by the Board or,
if not ranked, the Vice President designated by the Board, shall perform all the
duties of the President and, when so acting, shall have all the powers of, and
be subject to all the restrictions upon, the President. The Vice Presidents
shall have such other powers and perform such other duties as from time to time
may be prescribed for them respectively by the Board.

          Section 9. SECRETARY. The Secretary shall keep or cause to be kept, at
the principal executive office and such other place as the Board may order, a
book of minutes of all meetings of shareholders, the Board and its committees,
with the time and place of holding, whether regular or special, and if special,
how authorized, the notice thereof given, the names of those present at Board
and committee meetings, the number of shares present or represented at
shareholders' meetings, and the proceedings thereof. The Secretary shall keep,
or cause to be kept, a copy of the Bylaws of the corporation at the principal
executive office or business office in accordance with Section 213 of the
California General Corporation Law.

          The Secretary shall keep, or cause to be kept, at the principal
executive office or at the office of the corporation's transfer agent or
registrar, if one be appointed, a share register, or a duplicate share register,
showing the names of the shareholders and their addresses, the number and
classes of shares held by each, the number and date of certificates issued for
the same, and the number and date of cancellation of every certificate
surrendered for cancellation.

                                       11



          The Secretary shall give, or cause to be given, notice of all meetings
of the shareholders and of the Board and any committees thereof required by
these Bylaws or by law to be given, shall keep the seal of the corporation in
safe custody, and shall have such other powers and perform such other duties as
may be prescribed by the Board.

          Section 10. CHIEF FINANCIAL OFFICER. The Chief Financial Officer is
the chief financial officer of the corporation and shall keep and maintain, or
cause to be kept and maintained, adequate and correct accounts of the properties
and business transactions of the corporation, and shall send or cause to be sent
to the shareholders of the corporation such financial statements and reports as
are by law or these Bylaws required to be sent to them. The books of account
shall at all times be open to inspection by any director.

          The Chief Financial Officer shall deposit all moneys and other
valuables in the name and to the credit of the corporation with such
depositaries as may be designated by the Board. The Chief Financial Officer
shall disburse the funds of the corporation as may be ordered by the Board,
shall render to the President and the directors, whenever they request it, an
account of all transactions as Chief Financial Officer and of the financial
condition of the corporation, and shall have such other powers and perform such
other duties as may be prescribed by the Board.

                          ARTICLE V. Other Provisions.

          Section 1. INSPECTION OF CORPORATE RECORDS.

          (a) A shareholder or shareholders holding at least five percent in the
aggregate of the outstanding voting shares of the corporation or who hold at
least one percent of such voting shares and have filed a Schedule l4B with the
United States Securities and Exchange Commission relating to the election of
directors of the corporation shall have an absolute right to do either or both
of the following:

              (i)   Inspect and copy the record of shareholders' names and
     addresses and shareholdings during usual business hours upon five business
     days' prior written demand upon the corporation; or

              (ii)  Obtain from the transfer agent, if any, for the corporation,
     upon five business days' prior written demand and upon the tender of its
     usual charges for such a list (the amount of which charges shall be stated
     to the shareholder by the transfer agent upon request), a list of the
     shareholders' names and addresses who are entitled to vote for the election
     of directors and their shareholdings, as of the most recent record date for
     which it has been compiled or as of a date specified by the shareholder
     subsequent to the date of demand.

          (b) The record of shareholders shall also be open to inspection and
copying by any shareholder or holder of a voting trust certificate at any time
during usual business hours upon written demand on the corporation, for a
purpose reasonably related to such holder's interest as a shareholder or holder
of a voting trust certificate.

                                       12



          (c) The accounting books and records and minutes of proceedings of the
shareholders and the Board and committees of the Board shall be open to
inspection upon written demand on the corporation of any shareholder or holder
of a voting trust certificate at any reasonable time during usual business
hours, for a purpose reasonably related to such holder's interests as a
shareholder or as a holder of such voting trust certificate.

          (d) Any inspection and copying under this Article may be made in
person or by agent or attorney.

          Section 2. INSPECTION OF BYLAWS. The corporation shall keep in its
principal executive office in the State of California, or if its principal
executive office is not in such State at its principal business office in such
State, the original or a copy of these Bylaws as amended to date, which shall be
open to inspection by shareholders at all reasonable times during office hours.
If the principal executive office of the corporation is located outside the
State of California and the corporation has no principal business office in such
state, it shall upon the written request of any shareholder furnish to such
shareholder a copy of these Bylaws as amended to date.

          Section 3. ENDORSEMENT OF DOCUMENTS; CONTRACTS. Subject to the
provisions of applicable law, any note, mortgage, evidence of indebtedness,
contract, share certificate, conveyance or other instrument in writing and any
assignment or endorsements thereof executed or entered into between the
corporation and any other person, when signed by the Chairman of the Board, the
President or any Vice President and the Secretary, any Assistant Secretary, the
Chief Financial Officer or any Assistant Chief Financial Officer of the
corporation shall be valid and binding on the corporation in the absence of
actual knowledge on the part of the other person that the signing officers had
no authority to execute the same. Any such instruments may be signed by any
other person or persons and in such manner as from time to time shall be
determined by the Board, and, unless so authorized by the Board, no officer,
agent or employee shall have any power or authority to bind the corporation by
any contract or engagement or to pledge its credit or to render it liable for
any purpose or amount.

          Section 4. CERTIFICATES OF STOCK. Every holder of shares of the
corporation shall be entitled to have a certificate signed in the name of the
corporation by the Chairman of the Board, the President or a Vice President and
by the Chief Financial Officer or an Assistant Chief Financial Officer or the
Secretary or an Assistant Secretary, certifying the number of shares and the
class or series of shares owned by the shareholder. Any or all of the signatures
on the certificate may be facsimile. If any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the corporation with the same effect
as if such person were an officer, transfer agent or registrar at the date of
issue.

          Certificates for shares may be issued prior to full payment under such
restrictions and for such purposes as the Board may provide; provided, however,
that on any certificate issued to represent any partly paid shares, the total
amount of the consideration to be paid therefor and the amount paid thereon
shall be stated.

                                       13



          Except as provided in this Section, no new certificate for shares
shall be issued in lieu of an old one unless the latter is surrendered and
cancelled at the same time. The Board may, however, if any certificate for
shares is alleged to have been lost, stolen or destroyed, authorize the issuance
of a new certificate in lieu thereof, and the corporation may require that the
corporation be given a bond or other adequate security sufficient to indemnify
it against any claim that may be made against it (including expense or
liability) on account of the alleged loss, theft or destruction of such
certificate or the issuance of such new certificate.

          Section 5. REPRESENTATION OF SHARES OF OTHER CORPORATIONS. The
President or any other officer or officers authorized by the Board or the
President are each authorized to vote, represent and exercise on behalf of the
corporation all rights incident to any and all shares of any other corporation
or corporations standing in the name of the corporation. The authority herein
granted may be exercised either by any such officer in person or by any other
person authorized so to do by proxy or power of attorney duly executed by said
officer.

          Section 6. STOCK PURCHASE PLANS. The corporation may adopt and carry
out a stock purchase plan or agreement or stock option plan or agreement
providing for the issue and sale for such consideration as may be fixed of its
unissued shares, or of issued shares acquired or to be acquired, to one or more
of the employees or directors of the corporation or of a subsidiary or to a
trustee on their behalf and for the payment for such shares in installments or
at one time, and may provide for aiding any such persons in paying for such
shares by compensation for services rendered, promissory notes or otherwise.

          Any such stock purchase plan or agreement or stock option plan or
agreement may include, among other features, the fixing of eligibility for
participation therein, the class and price of shares to be issued or sold under
the plan or agreement, the number of shares which may be subscribed for, the
method of payment therefor, the reservation of title until full payment
therefor, the effect of the termination of employment, an option or obligation
on the part of the corporation to repurchase the shares upon termination of
employment, restrictions upon transfer of the shares, the time limits of and
termination of the plan, and any other matters, not in violation of applicable
law, and may be included in the plan as approved or authorized by the Board or
any committee of the Board.

          Section 7. CONSTRUCTION AND DEFINITIONS. Unless the context otherwise
requires, the general provisions, rules of construction and definitions
contained in the General Provisions of the California Corporations Code and in
the California General Corporation Law shall govern the construction of these
Bylaws.

          Section 8. AMENDMENTS. These Bylaws may be amended or repealed either
by approval of the outstanding shares (as defined in Section 152 of the
California General Corporation Law) or by the approval of the Board; provided,
however, that after the issuance of shares, a bylaw specifying or changing a
fixed number of directors or the maximum or minimum number or changing from a
fixed to a variable number of directors or vice versa may only be adopted by
approval of the outstanding shares, and a bylaw reducing the fixed number or the
minimum number of directors to a number less than five shall be subject to the
provisions of Section 212(a) of the California General Corporation Law.

                                       14



          Section 9. ANNUAL REPORT TO SHAREHOLDERS. The annual report to
shareholders referred to in Section 1501 of the California General Corporation
Law is expressly waived, but nothing herein shall be interpreted as prohibiting
the Board from issuing annual or other periodic reports to shareholders.

                          ARTICLE VI. Indemnification.

          Section 1. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Each person who
was or is a party or is threatened to be made a party to or is involved in any
threatened, pending or completed action, suit or proceeding, whether brought in
the name of the corporation or otherwise and whether of a civil, criminal,
administrative or investigative nature (hereinafter a "proceeding"), by reason
of the fact that he or she, or a person of whom he or she is the legal
representative, is or was a director or officer of the corporation or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is an alleged action or inaction in an official
capacity or in any other capacity while serving as a director or officer, shall,
subject to the terms of any agreement between the corporation and such person,
be indemnified and held harmless by the corporation to the fullest extent
permissible under California law and the corporation's Articles of
Incorporation, against all costs, charges, expenses, liabilities and losses
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement) reasonably incurred or suffered by
such person in connection therewith, and such indemnification shall continue as
to a person who has ceased to be a director or officer and shall inure to the
benefit of his or her heirs, executors and administrators; provided, however,
that the corporation shall indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such person only if
such proceeding (or part thereof) was authorized by the Board of Directors of
the corporation and provided, further, that no such person shall be indemnified
(i) except to the extent that the aggregate of losses to be indemnified exceeds
the amount of such losses for which the director or officer is paid pursuant to
any directors and officers liability insurance policy maintained by the
corporation; (ii) on account of any suit in which judgment is rendered against
such person for an accounting of profits made from the purchase or sale by such
person of securities of the corporation pursuant to the provisions of Section
16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar
provisions of any federal, state or local statutory law; (iii) for expenses,
judgments, funds, penalties or ERISA excise taxes resulting from such person's
conduct which is finally adjudged to have been willful misconduct, knowingly
fraudulent or deliberately dishonest; (iv) if a court of competent jurisdiction
finally determines that any indemnification hereunder is unlawful; (v) for acts
or omissions involving intentional misconduct or knowing and culpable violation
of law; (vi) for acts or omissions that the director or officer believes to be
contrary to the best interests of the corporation or its shareholders or that
involve the absence of good faith on the part of the director or officer; (vii)
for any transaction from which the director or officer derived an improper
personal benefit; (viii) for acts or omissions that show a reckless disregard
for the director's or officer's duty to the corporation or its shareholders in
circumstances in which the director or officer was aware, or should have been
aware, in the ordinary course of performing his duties, of a risk of serious
injury to the corporation or its shareholders; (ix) for acts or omissions that
constitute an unexcused pattern of inattention that amounts to an abdication of
the director's or officer's duties to the corporation or

                                       15



its shareholders; (x) for costs, charges, expenses, liabilities and losses
arising under Section 310 or 316 of the General Corporation Law of California
(the "Law"); and (xi) as to circumstances in which indemnity is expressly
prohibited by Section 317 of the Law. The right to indemnification conferred in
this Article shall be a contract right and shall include the right to be paid by
the corporation expenses incurred in defending any proceeding in advance of its
final disposition; provided, however, that if the Law requires the payment of
such expenses incurred by a director or officer in his or her capacity as a
director or officer (and not in any other capacity in which service was or is
rendered by such person while a director or officer, including, without
limitation, service to an employee benefit plan) in advance of the final
disposition of a proceeding, shall be made only upon delivery to the corporation
of an undertaking, by or on behalf of such director or officer, to repay all
amounts to the corporation unless it shall be determined ultimately that such
person is not entitled to be indemnified. No indemnity shall be provided under
this provision for any liability arising out of any act or omission committed or
occurring prior to the date an amendment containing this provision is filed with
the Secretary of State of California.

          Section 2. INDEMNIFICATION OF AGENTS. A person who was or is a party
or is threatened to be made a party to or is involved in any proceeding by
reason of the fact that he or she is or was an employee or agent of the
corporation or is or was serving at the request of the corporation as an
employee or agent of another enterprise, including service with respect to
employee benefit plans, whether the basis of such action is an alleged action or
inaction in an official capacity or in any other capacity while serving as an
employee or agent, may, subject to the terms of any agreement between the
corporation and such person, be indemnified and held harmless by the corporation
to the fullest extent permitted by California law and the corporation's Articles
of Incorporation, against all costs, charges, expenses, liabilities and losses
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement) reasonably incurred or suffered by
such person in connection therewith. The immediately preceding sentence is not
intended to be and shall not be considered to confer a contract right on any
employee or agent of the corporation.

          Section 3. RIGHT OF DIRECTORS AND OFFICERS TO BRING SUIT. If a claim
under Section 1 of this Article is not paid in full by the corporation within 30
days after a written claim has been received by the corporation, the claimant
may at any time thereafter bring suit against the corporation to recover the
unpaid amount of the claim and, if successful in whole or in part, the claimant
shall also be entitled to be paid the expense of prosecuting such claim. It
shall be a defense to any such action (other than an action brought to enforce a
claim for expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any is required, has been
tendered to the corporation) that the claimant has failed to meet a standard of
conduct, if any, required to make it permissible under California law for the
corporation to indemnify the claimant for the amount claimed. Neither the
failure of the corporation (including its Board of Directors, independent legal
counsel or its shareholders) to have made a determination prior to the
commencement of such action and indemnification of the claimant is permissible
in the circumstances because he or she has met such standard of conduct, nor an
actual determination by the corporation (including its Board of Directors,
independent legal counsel or its shareholders) that the claimant has not met
such standard of conduct, shall be a defense to the action or create a
presumption that the claimant has failed to meet such standard of conduct.

                                       16



          Section 4. SUCCESSFUL DEFENSE. Notwithstanding any other provision of
this Article, to the extent that a director or officer has been successful on
the merits or otherwise (including the dismissal of an action without prejudice
or the settlement of a proceeding without admission of liability) in defense of
any proceeding referred to in Section 1 or, in defense of any claim, issue or
matter therein, he shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection therewith.

          Section 5. NON-EXCLUSIVITY OF RIGHTS. The right to indemnification
provided by this Article shall not be exclusive of any other right which any
person may have or hereafter acquire under any statute, bylaw, agreement, vote
of shareholders or disinterested directors or otherwise.

          Section 6. INSURANCE. The corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
corporation or another corporation, partnership, joint venture, trust or other
enterprise against any such expense, liability or loss, whether or not the
corporation would have the power to indemnify such person against such expense,
liability or loss under California law.

          Section 7. EXPENSES AS A WITNESS. To the extent that any director,
officer, employee or agent of the corporation is by reason of such position, or
a position with another entity at the request of the corporation, a witness in
any action, suit or proceeding, he may be indemnified against all costs and
expenses actually and reasonably incurred by him or her or on his or her behalf
in connection therewith.

          Section 8. INDEMNITY AGREEMENTS. The corporation may enter into
agreements with any director, officer, employee or agent of the corporation
providing for indemnification to the fullest extent permissible under California
law and the corporation's Articles of Incorporation.

                                       17

EX-3.16

                                                                    Exhibit 3.16


                           ARTICLES OF INCORPORATION

                                       OF

                            LBI RADIO LICENSE CORP.

                                      Name

          One: The name of the corporation is:

               LBI Radio License Corp.


                                     Purpose

          Two: The purpose of the corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of California other than the banking business, the trust company business or
the practice of a profession permitted to be incorporated by the California
Corporations Code.

                                Agent for Service

          Three: The name and address of the corporation's initial agent for
service of process are:

                           Lenard D. Liberman
                           5724 Hollywood Boulevard
                           Hollywood, California 90028

                                Authorized Shares

          Four: The total number of shares of all classes of stock which the
corporation shall have the authority to issue is one thousand (1,000) shares of
Common Stock, par value $.01 per share.

                      Limitation on Liability of Directors
                        and Authority to Indemnify Agents

          Five: The liability of directors of the corporation for monetary
damages shall be eliminated to the fullest extent permissible under California
law.

          The corporation is authorized to provide indemnification of agents (as
defined in Section 317 of the California Corporations Code) for breach of duty
to the corporation and its shareholders through bylaw provisions, agreements
with agents, vote of shareholders or disinterested directors, or otherwise, in
excess of the indemnification otherwise permitted by Section 317 of the
California Corporations Code, subject only to the applicable limits set forth in
Section 204 of the California Corporations Code.



          The undersigned declares that the undersigned has executed these
Articles of Incorporation and that this instrument is the act and deed of the
undersigned.


DATED: November 13, 1997                               /s/ Regina Braman
                                                 -------------------------------
                                                 Regina Braman

                                       2

EX-3.17

                                                                    Exhibit 3.17

                                     BYLAWS

                                       of

                            LBI RADIO LICENSE CORP.,
                            a California corporation



                                      INDEX



                                                                            Page
                                                                            ----
                                                                         
ARTICLE I.   Offices .....................................................     1
             -------
     Section 1.  PRINCIPAL EXECUTIVE OFFICE ..............................     1
     Section 2.  OTHER OFFICES ...........................................     1
ARTICLE II.  Shareholders ................................................     1
             ------------
     Section 1.  PLACE OF MEETINGS .......................................     1
     Section 2.  ANNUAL MEETINGS .........................................     1
     Section 3.  SPECIAL MEETINGS ........................................     1
     Section 4.  NOTICE OF ANNUAL OR SPECIAL MEETINGS ....................     2
     Section 5.  QUORUM ..................................................     2
     Section 6.  ADJOURNED MEETINGS AND NOTICE THEREOF ...................     2
     Section 7.  VOTING ..................................................     3
     Section 8.  RECORD DATE .............................................     4
     Section 9.  CONSENT OF ABSENTEES ....................................     5
     Section 10. ACTION WITHOUT MEETING ..................................     5
     Section 11. PROXIES .................................................     6
     Section 12. INSPECTORS OF ELECTION ..................................     6
     Section 13. CONDUCT OF MEETING ......................................     6
ARTICLE III. Directors ...................................................     6
             ---------
     Section 1.  POWERS ..................................................     7
     Section 2.  NUMBER OF DIRECTORS .....................................     7
     Section 3.  ELECTION AND TERM OF OFFICE .............................     7
     Section 4.  VACANCIES ...............................................     7
     Section 5.  PLACE OF MEETING ........................................     8
     Section 6.  REGULAR MEETINGS ........................................     8
     Section 7.  SPECIAL MEETINGS ........................................     8
     Section 8.  QUORUM ..................................................     9
     Section 9.  PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE .......     9
     Section 10. WAIVER OF NOTICE ........................................     9
     Section 11. ADJOURNMENT .............................................     9
     Section 12. FEES AND COMPENSATION ...................................     9
     Section 13. ACTION WITHOUT MEETING ..................................    10
     Section 14. RIGHTS OF INSPECTION ....................................    10
     Section 15. COMMITTEES ..............................................    10
ARTICLE IV.  Officers ....................................................    11
             --------
     Section 1.  OFFICERS ................................................    11
     Section 2.  ELECTION ................................................    11
     Section 3.  SUBORDINATE OFFICERS ....................................    11
     Section 4.  REMOVAL AND RESIGNATION .................................    11
     Section 5.  VACANCIES ...............................................    11
     Section 6.  CHAIRMAN OF THE BOARD ...................................    11
     Section 7.  PRESIDENT ...............................................    11
     Section 8.  VICE PRESIDENTS .........................................    12


                                       i




                                                                           
     Section 9.  SECRETARY ...............................................    12
     Section 10. CHIEF FINANCIAL OFFICER .................................    12
ARTICLE V.  Other Provisions .............................................    13
            ----------------
     Section 1.  INSPECTION OF CORPORATE RECORDS .........................    13
     Section 2.  INSPECTION OF BYLAWS ....................................    13
     Section 3.  ENDORSEMENT OF DOCUMENTS; CONTRACTS .....................    14
     Section 4.  CERTIFICATES OF STOCK ...................................    14
     Section 5.  REPRESENTATION OF SHARES OF OTHER CORPORATIONS ..........    14
     Section 6.  STOCK PURCHASE PLANS ....................................    15
     Section 7.  CONSTRUCTION AND DEFINITIONS ............................    15
     Section 8.  AMENDMENTS ..............................................    15
     Section 9.  ANNUAL REPORT TO SHAREHOLDERS ...........................    15
ARTICLE VI.  Indemnification .............................................    15
             ---------------
     Section 1.  INDEMNIFICATION OF DIRECTORS AND OFFICERS ...............    16
     Section 2.  INDEMNIFICATION OF AGENTS ...............................    17
     Section 3.  RIGHT OF DIRECTORS AND OFFICERS TO BRING SUIT ...........    17
     Section 4.  SUCCESSFUL DEFENSE ......................................    17
     Section 5.  NON-EXCLUSIVITY OF RIGHTS ...............................    18
     Section 6.  INSURANCE ...............................................    18
     Section 7.  EXPENSES AS A WITNESS ...................................    18
     Section 8.  INDEMNITY AGREEMENTS ....................................    18



                                       ii



                                     BYLAWS

                           for the regulation, except
                       as otherwise provided by statute or
                         its Articles of Incorporation,

                                       of

                            LBI RADIO LICENSE CORP.,
                            a California corporation

                               ARTICLE I. Offices.


           Section 1. PRINCIPAL EXECUTIVE OFFICE. The corporation's principal
executive office shall be fixed and located at such place as the Board of
Directors (herein called the "Board") shall determine. The Board is granted full
power and authority to change said principal executive office from one location
to another.

           Section 2. OTHER OFFICES. Branch or subordinate offices may be
established at any time by the Board at any place or places.

                            ARTICLE II. Shareholders.

           Section 1. PLACE OF MEETINGS. Meetings of shareholders shall be held
either at the principal executive office of the corporation or at any other
place within or without the State of California which may be designated either
by the Board or by the written consent of all persons entitled to vote thereat,
given either before or after the meeting and filed with the Secretary.

           Section 2. ANNUAL MEETINGS. The annual meetings of shareholders shall
be held on such date and at such time as may be fixed by the Board.

           Section 3. SPECIAL MEETINGS. Special meetings of the shareholders may
be called at any time by the Board, the Chairman of the Board, the President, or
by the holders of shares entitled to cast not less than ten percent of the votes
at such meeting. Upon request in writing to the Chairman of the Board, the
President, any Vice President or the Secretary by any person (other than the
Board) entitled to call a special meeting of shareholders, the officer forthwith
shall cause notice to be given to the shareholders entitled to vote that a
meeting will be held at a time requested by the person or persons calling the
meeting, not less than thirty-five nor more than sixty days after the receipt of
the request. If the notice is not given within twenty days after receipt of the
request, the persons entitled to call the meeting may give the notice.

           Section 4. NOTICE OF ANNUAL OR SPECIAL MEETINGS. Written notice of
each annual or special meeting of shareholders shall be given not less than ten
nor more than sixty days before the date of the meeting to each shareholder
entitled to vote thereat. Such notice shall state the place, date and hour of
the meeting and (i) in the case of a special meeting,



the general nature of the business to be transacted, and no other business may
be transacted, or (ii) in the case of the annual meeting, those matters which
the Board, at the time of the mailing of the notice, intends to present for
action by the shareholders, but, subject to the provisions of applicable law,
any proper matter may be presented at the meeting for such action. The notice of
any meeting at which directors are to be elected shall include the names of
nominees intended at the time of the notice to be presented by management for
election.

           Notice of a shareholders' meeting shall be given either personally or
by mail or by other means of written communication, addressed to the shareholder
at the address of such shareholder appearing on the books of the corporation or
given by the shareholder to the corporation for the purpose of notice, or, if no
such address appears or is given, at the place where the principal executive
office of the corporation is located or by publication at least once in a
newspaper of general circulation in the county in which the principal executive
office is located. Notice by mail shall be deemed to have been given at the time
a written notice is deposited in the United States mails, postage prepaid. Any
other written notice shall be deemed to have been given at the time it is
personally delivered to the recipient or is delivered to a common carrier for
transmission, or actually transmitted by the person giving the notice by
electronic means, to the recipient.

           Section 5. QUORUM. A majority of the shares entitled to vote,
represented in person or by proxy, shall constitute a quorum at any meeting of
shareholders. If a quorum is present, the affirmative vote of a majority of the
shares represented and voting at the meeting (which shares voting affirmatively
also constitute at least a majority of the required quorum) shall be the act of
the shareholders, unless the vote of a greater number or voting by classes is
required by law or by the Articles, except as provided in the following
sentence. The shareholders present at a duly called or held meeting at which a
quorum is present may continue to do business until adjournment, notwithstanding
the withdrawal of enough shareholders to leave less than a quorum, if any action
taken (other than adjournment) is approved by at least a majority of the shares
required to constitute a quorum.

           Section 6. ADJOURNED MEETINGS AND NOTICE THEREOF. Any Shareholders'
meeting, whether or not a quorum is present, may be adjourned from time to time
by the vote of a majority of the shares represented either in person or by
proxy, but in the absence of a quorum (except as provided in Section 5 of this
Article) no other business may be transacted at such meeting.

           It shall not be necessary to give any notice of the time and place of
the adjourned meeting or of the business to be transacted thereat, other than by
announcement at the meeting at which such adjournment is taken; provided,
however, when any shareholders' meeting is adjourned for more than 45 days or,
if after adjournment a new record date is fixed for the adjourned meeting,
notice of the adjourned meeting shall be given as in the case of an original
meeting.

           Section 7. VOTING. The shareholders entitled to notice of any meeting
or to vote at any such meeting shall be only persons in whose name shares stand
on the stock records of the corporation on the record date determined in
accordance with Section 8 of this Article.

                                       2



           Subject to the following sentence and to the provisions of Section
708 of the California General Corporation Law, every shareholder entitled to
vote at any election of directors may cumulate such shareholder's votes and give
one candidate a number of votes equal to the number of directors to be elected
multiplied by the number of votes to which the shareholder's shares are
entitled, or distribute the shareholder's votes on the same principle among as
many candidates as the shareholder thinks fit. No shareholder shall be entitled
to cumulate votes for any candidate or candidates pursuant to the preceding
sentence unless such candidate or candidates' names have been placed in
nomination prior to the voting and the shareholder has given notice at the
meeting prior to the voting of the shareholder's intention to cumulate the
shareholder's votes. If any one shareholder has given such notice, all
shareholders may cumulate their votes for candidates in nomination.

           Elections need not be by ballot, provided, however, that all
elections for directors must be by ballot upon demand made by a shareholder at
the meeting and before the voting begins.

           In any election of directors, the candidates receiving the highest
number of votes of the shares entitled to be voted for them up to the number of
directors to be elected by such shares are elected.

           Voting shall in all cases be subject to the provisions of Chapter 7
of the California General Corporation Law, and to the following provisions:

           (a) Subject to clause (g), shares held by an administrator, executor,
guardian, conservator or custodian may be voted by such holder either in person
or by proxy, without a transfer of such shares into the holder's name; and
shares standing in the name of a trustee may be voted by the trustee, either in
person or by proxy, but no trustee shall be entitled to vote shares held by such
trustee without a transfer of such shares into the trustee's name.

           (b) Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into the receiver's name if authority
to do so is contained in the order of the court by which such receiver was
appointed.

           (c) Subject to the provisions of Section 705 of the California
General Corporation Law and except where otherwise agreed in writing between the
parties, a shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.

           (d) Shares standing in the name of a minor may be voted and the
corporation may treat all rights incident thereto as exercisable by the minor,
in person or by proxy, whether or not the corporation has notice, actual or
constructive, of the nonage, unless a guardian of the minor's property has been
appointed and written notice of such appointment given to the corporation.

           (e) Shares standing in the name of another corporation, domestic or
foreign, may be voted by such officer, agent or proxyholder as the bylaws of
such other corporation may

                                       3



prescribe or, in the absence of such provision, as the Board of Directors of
such other corporation may determine or, in the absence of such determination,
by the chairman of the board, president or any vice president of such other
corporation, or by any other person authorized to do so by the chairman of the
board, president or any vice president of such other corporation. Shares which
are purported to be voted or any proxy purported to be executed in the name of a
corporation (whether or not any title of the person signing is indicated) shall
be presumed to be voted or the proxy executed in accordance with the provisions
of this clause, unless the contrary is shown.

           (f)   Shares of the corporation owned by any subsidiary shall not be
entitled to vote on any matter.

           (g)   Shares held by the corporation in a fiduciary capacity, and
shares of the issuing corporation held in a fiduciary capacity by any
subsidiary, shall not be entitled to vote on any matter, except to the extent
that the settlor or beneficial owner possesses and exercises a right to vote or
to give the corporation binding instructions as to how to vote such shares.

           (h)   If shares stand of record in the names of two or more persons,
whether fiduciaries, members of a partnership, joint tenants, tenants in common,
husband and wife as community property, tenants by the entirety, voting
trustees, persons entitled to vote under a shareholder voting agreement or
otherwise, or if two or more persons (including proxyholders) have the same
fiduciary relationship respecting the same shares, unless the secretary of the
corporation is given written notice to the contrary and is furnished with a copy
of the instrument or order appointing them or creating the relationship wherein
it is so provided, their acts with respect to voting shall have the following
effect:

           (i)   If only one votes, such act binds all;

           (ii)  If more than one vote, the act of the majority so voting binds
           all;

           (iii) If more than one vote, but the vote is evenly split on any
           particular matter, each faction may vote the securities in question
           proportionately.

If the instrument so filed or the registration of the shares shows that any such
tenancy is held in unequal interests, a majority or even split for the purpose
of this section shall be a majority or even split in interest.

           Section 8. RECORD DATE. The Board may fix, in advance, a record date
for the determination of the shareholders entitled to notice of any meeting or
to vote or entitled to receive payment of any dividend or other distribution, or
any allotment of rights, or to exercise rights in respect of any other lawful
action. The record date so fixed shall be not more than 60 days nor less than 10
days prior to the date of the meeting nor more than 60 days prior to any other
action. When a record date is so fixed, only shareholders of record on that date
are entitled to notice of and to vote at the meeting or to receive the dividend,
distribution, or allotment of rights, or to exercise the rights, as the case may
be, notwithstanding any transfer of shares on the books of the corporation after
the record date. A determination of shareholders of record entitled to notice of
or to vote at a meeting of shareholders shall apply to any adjournment of the
meeting

                                       4



unless the Board fixes a new record date for the adjourned meeting. The Board
shall fix a new record date if the meeting is adjourned for more than forty-five
days.

           If no record date is fixed by the Board, the record date for
determining shareholders entitled to notice of or to vote at a meeting of
shareholders shall be at the close of business on the business day next
preceding the day on which notice is given or, if notice is waived, at the close
of business on the business day next preceding the day on which the meeting is
held. The record date for determining shareholders for any purpose other than
set forth in this Section 8 or Section 10 of this Article shall be at the close
of business on the day on which the Board adopts the resolution relating
thereto, or the sixtieth day prior to the date of such other action, whichever
is later.

           Section 9.  CONSENT OF ABSENTEES. The transactions of any meeting of
shareholders, however called and noticed, and wherever held, are as valid as
though had at a meeting duly held after regular call and notice, if a quorum is
present either in person or by proxy, and if, either before or after the
meeting, each of the persons entitled to vote, not present in person or by
proxy, signs a written waiver of notice, or a consent to the holding of the
meeting or an approval of the minutes thereof. All such waivers, consents or
approvals shall be filed with the corporate records or made a part of the
minutes of the meeting. Attendance of a person at a meeting shall constitute a
waiver of notice of and presence at such meeting, except when the person
objects, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened and except that
attendance at a meeting is not a waiver of any right to object to the
consideration of matters required by the California General Corporation Law to
be included in the notice but not so included, if such objection is expressly
made at the meeting. Neither the business to be transacted at nor the purpose of
any regular or special meeting of shareholders need be specified in any written
waiver of notice, consent to the holding of the meeting or approval of the
minutes thereof, except as provided in Section 601(f) of the California General
Corporation Law.

           Section 10. ACTION WITHOUT MEETING. Subject to Section 603 of the
California General Corporation Law, any action which, under any provision of the
California General Corporation Law, may be taken at any annual or special
meeting of shareholders, may be taken without a meeting and without prior notice
if a consent in writing, setting forth the action so taken, shall be signed by
the holders of outstanding shares having not less than the minimum number of
votes that would be necessary to authorize or take such action at a meeting at
which all shares entitled to vote thereon were present and voted. Unless a
record date for voting purposes be fixed as provided in Section 8 of this
Article, the record date for determining shareholders entitled to give consent
pursuant to this Section 10, when no prior action by the Board has been taken,
shall be the day on which the first written consent is given.

           Section 11. PROXIES. Every person entitled to vote shares has the
right to do so either in person or by one or more persons authorized by a
written proxy executed by such shareholder and filed with the Secretary. Any
proxy duly executed is not revoked and continues in full force and effect until
revoked by the person executing it prior to the vote pursuant thereto. Such
revocation may be effected either, (i) by a writing delivered to the Secretary
of the Corporation stating that the proxy is revoked, (ii) by a subsequent proxy
executed by the person executing the prior proxy and presented to the meeting,
or (iii) by attendance at the meeting and

                                       5



voting in person by the person executing the proxy; provided, however, that no
proxy shall be valid after the expiration of eleven months from the date of its
execution unless otherwise provided in the proxy.

           Section 12. INSPECTORS OF ELECTION. In advance of any meeting of
shareholders, the Board may appoint inspectors of election to act at such
meeting and any adjournment thereof. If inspectors of election be not so
appointed, or if any persons so appointed fail to appear or refuse to act, the
chairman of any such meeting may, and on the request of any shareholder or
shareholder's proxy shall, make such appointment at the meeting. The number of
inspectors shall be either one or three. If appointed at a meeting on the
request of one or more shareholders or proxies, the majority of shares present
shall determine whether one or three inspectors are to be appointed.

           The duties of such inspectors shall be as prescribed by Section
707(b) of the California General Corporation Law and shall include: determining
the number of shares outstanding and the voting power of each; determining the
shares represented at the meeting; determining the existence of a quorum;
determining the authenticity, validity and effect of proxies; receiving votes,
ballots or consents; hearing and determining all challenges and questions in any
way arising in connection with the right to vote; counting and tabulating all
votes or consents; determining when the polls shall close; determining the
result; and doing such acts as may be proper to conduct the election or vote
with fairness to all shareholders. If there are three inspectors of election,
the decision, act or certificate of a majority is effective in all respects as
the decision, act or certificate of all.

           Section 13. CONDUCT OF MEETING. The President shall preside as
chairman at all meetings of the shareholders. The chairman shall conduct each
such meeting in a businesslike and fair manner, but shall not be obligated to
follow any technical, formal or parliamentary rules or principles of procedure.
The chairman's rulings on procedural matters shall be conclusive and binding on
all shareholders, unless at the time of a ruling a request for a vote is made to
the shareholders holding shares entitled to vote and which are represented in
person or by proxy at the meeting, in which case the decision of a majority of
such shares shall be conclusive and binding on all shareholders. Without
limiting the generality of the foregoing, the chairman shall have all of the
powers usually vested in the chairman of a meeting of shareholders.

                             ARTICLE III. Directors.

           Section 1.  POWERS. Subject to limitations of the Articles, of these
Bylaws and of the California General Corporation Law relating to action required
to be approved by the shareholders or by the outstanding shares, the business
and affairs of the corporation shall be managed and all corporate powers shall
be exercised by or under the direction of the Board. The Board may delegate the
management of the day-to-day operation of the business of the corporation to a
management company or other person provided that the business and affairs of the
corporation shall be managed and all corporate powers shall be exercised under
the ultimate direction of the Board. Without prejudice to such general powers,
but subject to the same limitations, it is hereby expressly declared that the
Board shall have the following powers in addition to the other powers enumerated
in these Bylaws:

                                       6



           (a) To select and remove all the other officers, agents and employees
of the corporation, prescribe the powers and duties for them as may not be
inconsistent with law, the Articles or these Bylaws, fix their compensation and
require from them security for faithful service.

           (b) To conduct, manage and control the affairs and business of the
corporation and to make such rules and regulations therefor not inconsistent
with law, the Articles or these Bylaws, as they may deem best.

           (c) To adopt, make and use a corporate seal, and to prescribe the
forms of certificates of stock, and to alter the form of such seal and of such
certificates from time to time as they may deem best.

           (d) To authorize the issuance of shares of stock of the corporation
from time to time, upon such terms and for such consideration as may be lawful.

           (e) To borrow money and incur indebtedness for the purposes of the
corporation, and to cause to be executed and delivered therefor, in the
corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages,
pledges, hypothecations or other evidences of debt and securities therefor.

           Section 2. NUMBER OF DIRECTORS. The authorized number of directors
shall be two until changed by amendment of the Articles or by a Bylaw duly
adopted by the shareholders amending this Section 2.

           Section 3. ELECTION AND TERM OF OFFICE. The directors shall be
elected at each annual meeting of the shareholders, but if any such annual
meeting is not held or the directors are not elected thereat, the directors may
be elected at any special meeting of shareholders held for that purpose. Each
director shall hold office until the next annual meeting and until a successor
has been elected and qualified.

           Section 4. VACANCIES. Any director may resign effective upon giving
written notice to the Chairman of the Board, the President, the Secretary or the
Board, unless the notice specifies a later time for the effectiveness of such
resignation. If the resignation is effective at a future time, a successor may
be elected to take office when the resignation becomes effective.

           Vacancies in the Board, except those existing as a result of a
removal of a director, may be filled by a majority of the remaining directors,
though less than a quorum, or by a sole remaining director, and each director so
elected shall hold office until the next annual meeting and until such
director's successor has been elected and qualified.

           A vacancy or vacancies in the Board shall be deemed to exist in case
of the death, resignation or removal of any director, or if the authorized
number of directors be increased, or if the shareholders fail, at any annual or
special meeting of shareholders at which any director or directors are elected,
to elect the full authorized number of directors to be voted for at that
meeting.

                                       7



           The Board may declare vacant the office of a director who has been
declared of unsound mind by an order of court or convicted of a felony.

           The shareholders may elect a director or directors at any time to
fill any vacancy or vacancies not filled by the directors. Any such election by
written consent other than to fill a vacancy created by removal requires the
consent of a majority of the outstanding shares entitled to vote. Any such
election by written consent to fill a vacancy created by removal requires
unanimous consent.

           No reduction of the authorized number of directors shall have the
effect of removing any director prior to the expiration of the director's term
of office.

           Section 5. PLACE OF MEETING. Regular or special meetings of the Board
shall be held at any place within or without the State of California which has
been designated from time to time by the Board. In the absence of such
designation, regular meetings shall be held at the principal executive office of
the corporation.

           Section 6. REGULAR MEETINGS. Immediately following each annual
meeting of shareholders the Board shall hold a regular meeting for the purpose
of organization, election of officers and the transaction of other business.

           Other regular meetings of the Board shall be held without call on
such dates and at such times as may be fixed by the Board. Call and notice of
all regular meetings of the Board are hereby dispensed with.

           Section 7. SPECIAL MEETINGS. Special meetings of the Board for any
purpose or purposes may be called at any time by the Chairman of the Board, the
President, any Vice President, the Secretary or by any two directors.

           Special meetings of the Board shall be held upon four days' written
notice or forty-eight hours' notice given personally or by telephone, telegraph,
telex or other similar means of communication. Any such notice shall be
addressed or delivered to each director at such director's address as it is
shown upon the records of the corporation or as may have been given to the
corporation by the director for purposes of notice or, if such address is not
shown on such records or is not readily ascertainable, at the place in which the
meetings of the directors are regularly held.

           Notice by mail shall be deemed to have been given at the time a
written notice is deposited in the United States mails, postage prepaid. Any
other written notice shall be deemed to have been given at the time it is
personally delivered to the recipient or is delivered to a common carrier for
transmission, or actually transmitted by the person giving the notice by
electronic means, to the recipient. Oral notice shall be deemed to have been
given at the time it is communicated, in person or by telephone or wireless, to
the recipient or to a person at the office of the recipient who the person
giving the notice has reason to believe will promptly communicate it to the
recipient.

           Section 8. QUORUM. A majority of the authorized number of directors
constitutes a quorum of the board for the transaction of business, except to
adjourn as provided

                                       8



in Section 11 of this Article. Every act or decision done or made by a majority
of the directors present at a meeting duly held at which a quorum is present
shall be regarded as the act of the Board, unless a greater number be required
by law or by the Articles. A meeting at which a quorum is initially present may
continue to transact business notwithstanding the withdrawal of directors, if
any action taken is approved by at least a majority of the required quorum for
such meeting.

           Section 9.  PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE.
Members of the Board may participate in a meeting through use of conference
telephone or similar communications equipment, so long as all members
participating in such meeting can hear one another.

           Section 10. WAIVER OF NOTICE. Notice of a meeting need not be given
to any director who signs a waiver of notice or a consent to holding the meeting
or an approval of the minutes thereof, whether before or after the meeting, or
who attends the meeting without protesting, prior thereto or at its
commencement, the lack of notice to such director. All such waivers, consents
and approvals shall be filed with the corporate records or made a part of the
minutes of the meeting.

           Section 11. ADJOURNMENT. A majority of the directors present, whether
or not a quorum is present, may adjourn any directors' meeting to another time
and place. Notice of the time and place of holding an adjourned meeting need not
be given to absent directors if the time and place be fixed at the meeting
adjourned, except as provided in the next sentence. If the meeting is adjourned
for more than 24 hours, notice of any adjournment to another time or place shall
be given prior to the time of the adjourned meeting to the directors who were
not present at the time of the adjournment.

           Section 12. FEES AND COMPENSATION. Directors and members of
committees may receive such compensation, if any, for their services, and such
reimbursement for expenses, as may be fixed or determined by the Board.

           Section 13. ACTION WITHOUT MEETING. Any action required or permitted
to be taken by the Board may be taken without a meeting if all members of the
Board shall individually or collectively consent in writing to such action. Such
consent or consents shall have the same effect as a unanimous vote of the Board
and shall be filed with the minutes of the proceedings of the Board.

           Section 14. RIGHTS OF INSPECTION. Every director shall have the
absolute right at any reasonable time to inspect and copy all books, records and
documents of every kind and to inspect the physical properties of the
corporation and also of its subsidiary corporations, domestic or foreign. Such
inspection by a director may be made in person or by agent or attorney and
includes the right to copy and obtain extracts.

           Section 15. COMMITTEES. The Board may appoint one or more committees,
each consisting of two or more directors, and delegate to such committees any of
the authority of the Board except with respect to:

                                       9



           (a) The approval of any action for which the General Corporation Law
           also requires shareholders' approval or approval of the outstanding
           shares;

           (b) The filling of vacancies in the Board or on any committee;

           (c) The fixing of compensation of the directors for serving on the
           Board or on any committee;

           (d) The amendment or repeal of bylaws or the adoption of new bylaws;

           (e) The amendment or repeal of any resolution of the Board which by
           its express term is not so amendable or repealable;

           (f) A distribution to the shareholders of the corporation except at a
           rate or in a periodic amount or within a price range determined by
           the Board; or

           (g) The appointment of other committees of the Board or the members
           thereof.

           Any such committee must be designated, and the members or alternate
members thereof appointed, by resolution adopted by a majority of the authorized
number of directors and any such committee may be designated an Executive
Committee or by such other name as the Board shall specify. Alternate members of
a committee may replace any absent member at any meeting of the committee. The
Board shall have the power to prescribe the manner in which proceedings of any
such committee shall be conducted. In the absence of any such prescription, such
committee shall have the power to prescribe the manner in which its proceedings
shall be conducted. Unless the Board or such committee shall otherwise provide,
the regular and special meetings and other actions of any such committee shall
be governed by the provisions of this Article applicable to meetings and actions
of the Board. Minutes shall be kept of each meeting of each committee.

                             ARTICLE IV. Officers.

           Section 1. OFFICERS. The officers of the corporation shall be a
President, a Secretary and a Chief Financial Officer. The corporation may also
have, at the discretion of the Board, a Chairman of the Board, one or more Vice
Presidents, one or more Assistant Secretaries, one or more Assistant Financial
Officers, and such other officers as may be elected or appointed in accordance
with the provisions of Section 3 of this Article.

           Section 2. ELECTION. The officers of the corporation, except such
officers as may be elected or appointed in accordance with the provisions of
Section 3 or Section 5 of this Article, shall be chosen annually by, and shall
serve at the pleasure of, the Board, and shall hold their respective offices
until their resignation, removal, or other disqualification from service, or
until their respective successors shall be elected.

           Section 3. SUBORDINATE OFFICERS. The Board may elect, and may empower
the President to appoint, such other officers as the business of the corporation
may

                                       10



require, each of whom shall hold office for such period, have such authority and
perform such duties as are provided in these Bylaws or as the Board may from
time to time determine.

           Section 4. REMOVAL AND RESIGNATION. Any officer may be removed,
either with or without cause, by the Board at any time or, except in the case of
an officer chosen by the Board, by any officer upon whom such power of removal
may be conferred by the Board. Any such removal shall be without prejudice to
the rights, if any, of the officer under any contract of employment of the
officer.

           Any officer may resign at any time by giving written notice to the
corporation, but without prejudice to the rights, if any, of the corporation
under any contract to which the officer is a party. Any such resignation shall
take effect at the date of the receipt of such notice or at any later time
specified therein and, unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective.

           Section 5. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filled in the
manner prescribed in these Bylaws for regular election or appointment to such
office.

           Section 6. CHAIRMAN OF THE BOARD. The Chairman of the Board, if there
shall be such an officer, shall, if present, preside at all meetings of the
Board and exercise and perform such other powers and duties as may be from time
to time assigned by the Board.

           Section 7. PRESIDENT. Subject to such power, if any, as may be given
by the Board to the Chairman of the Board, if there be such an officer, the
President is the general manager and chief executive officer of the corporation
and has, subject to the control of the Board, general supervision, direction and
control of the business and officers of the corporation. The President shall
preside at all meetings of the shareholders and, in the absence of the Chairman
of the Board, or if there be none, at all meetings of the Board. The President
has the general powers and duties of management usually vested in the office of
president and general manager of a corporation and such other powers and duties
as may be prescribed by the Board.

           Section 8. VICE PRESIDENTS. In the absence or disability of the
President, the Vice Presidents in order of their rank as fixed by the Board or,
if not ranked, the Vice President designated by the Board, shall perform all the
duties of the President and, when so acting, shall have all the powers of, and
be subject to all the restrictions upon, the President. The Vice Presidents
shall have such other powers and perform such other duties as from time to time
may be prescribed for them respectively by the Board.

           Section 9. SECRETARY. The Secretary shall keep or cause to be kept,
at the principal executive office and such other place as the Board may order, a
book of minutes of all meetings of shareholders, the Board and its committees,
with the time and place of holding, whether regular or special, and if special,
how authorized, the notice thereof given, the names of those present at Board
and committee meetings, the number of shares present or represented at
shareholders' meetings, and the proceedings thereof. The Secretary shall keep,
or cause to be kept, a copy of the Bylaws of the corporation at the principal
executive office or business office in accordance with Section 213 of the
California General Corporation Law.

                                       11



           The Secretary shall keep, or cause to be kept, at the principal
executive office or at the office of the corporation's transfer agent or
registrar, if one be appointed, a share register, or a duplicate share register,
showing the names of the shareholders and their addresses, the number and
classes of shares held by each, the number and date of certificates issued for
the same, and the number and date of cancellation of every certificate
surrendered for cancellation.

           The Secretary shall give, or cause to be given, notice of all
meetings of the shareholders and of the Board and any committees thereof
required by these Bylaws or by law to be given, shall keep the seal of the
corporation in safe custody, and shall have such other powers and perform such
other duties as may be prescribed by the Board.

           Section 10. CHIEF FINANCIAL OFFICER. The Chief Financial Officer is
the chief financial officer of the corporation and shall keep and maintain, or
cause to be kept and maintained, adequate and correct accounts of the properties
and business transactions of the corporation, and shall send or cause to be sent
to the shareholders of the corporation such financial statements and reports as
are by law or these Bylaws required to be sent to them. The books of account
shall at all times be open to inspection by any director.

           The Chief Financial Officer shall deposit all moneys and other
valuables in the name and to the credit of the corporation with such
depositaries as may be designated by the Board. The Chief Financial Officer
shall disburse the funds of the corporation as may be ordered by the Board,
shall render to the President and the directors, whenever they request it, an
account of all transactions as Chief Financial Officer and of the financial
condition of the corporation, and shall have such other powers and perform such
other duties as may be prescribed by the Board.

                          ARTICLE V. Other Provisions.

           Section 1.  INSPECTION OF CORPORATE RECORDS.

           (a)  A shareholder or shareholders holding at least five percent in
the aggregate of the outstanding voting shares of the corporation or who hold at
least one percent of such voting shares and have filed a Schedule l4B with the
United States Securities and Exchange Commission relating to the election of
directors of the corporation shall have an absolute right to do either or both
of the following:

           (i)  Inspect and copy the record of shareholders' names and addresses
           and shareholdings during usual business hours upon five business
           days' prior written demand upon the corporation; or

           (ii) Obtain from the transfer agent, if any, for the corporation,
           upon five business days' prior written demand and upon the tender of
           its usual charges for such a list (the amount of which charges shall
           be stated to the shareholder by the transfer agent upon request), a
           list of the shareholders' names and addresses who are entitled to
           vote for the election of directors and their shareholdings, as of the
           most recent record date for which it has been compiled or as of a
           date specified by the shareholder subsequent to the date of demand.

                                       12



           (b) The record of shareholders shall also be open to inspection and
copying by any shareholder or holder of a voting trust certificate at any time
during usual business hours upon written demand on the corporation, for a
purpose reasonably related to such holder's interest as a shareholder or holder
of a voting trust certificate.

           (c) The accounting books and records and minutes of proceedings of
the shareholders and the Board and committees of the Board shall be open to
inspection upon written demand on the corporation of any shareholder or holder
of a voting trust certificate at any reasonable time during usual business
hours, for a purpose reasonably related to such holder's interests as a
shareholder or as a holder of such voting trust certificate.

           (d) Any inspection and copying under this Article may be made in
person or by agent or attorney.

           Section 2. INSPECTION OF BYLAWS. The corporation shall keep in its
principal executive office in the State of California, or if its principal
executive office is not in such State at its principal business office in such
State, the original or a copy of these Bylaws as amended to date, which shall be
open to inspection by shareholders at all reasonable times during office hours.
If the principal executive office of the corporation is located outside the
State of California and the corporation has no principal business office in such
state, it shall upon the written request of any shareholder furnish to such
shareholder a copy of these Bylaws as amended to date.

           Section 3. ENDORSEMENT OF DOCUMENTS; CONTRACTS. Subject to the
provisions of applicable law, any note, mortgage, evidence of indebtedness,
contract, share certificate, conveyance or other instrument in writing and any
assignment or endorsements thereof executed or entered into between the
corporation and any other person, when signed by the Chairman of the Board, the
President or any Vice President and the Secretary, any Assistant Secretary, the
Chief Financial Officer or any Assistant Chief Financial Officer of the
corporation shall be valid and binding on the corporation in the absence of
actual knowledge on the part of the other person that the signing officers had
no authority to execute the same. Any such instruments may be signed by any
other person or persons and in such manner as from time to time shall be
determined by the Board, and, unless so authorized by the Board, no officer,
agent or employee shall have any power or authority to bind the corporation by
any contract or engagement or to pledge its credit or to render it liable for
any purpose or amount.

           Section 4. CERTIFICATES OF STOCK. Every holder of shares of the
corporation shall be entitled to have a certificate signed in the name of the
corporation by the Chairman of the Board, the President or a Vice President and
by the Chief Financial Officer or an Assistant Chief Financial Officer or the
Secretary or an Assistant Secretary, certifying the number of shares and the
class or series of shares owned by the shareholder. Any or all of the signatures
on the certificate may be facsimile. If any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the corporation with the same effect
as if such person were an officer, transfer agent or registrar at the date of
issue.

                                       13



           Certificates for shares may be issued prior to full payment under
such restrictions and for such purposes as the Board may provide; provided,
however, that on any certificate issued to represent any partly paid shares, the
total amount of the consideration to be paid therefor and the amount paid
thereon shall be stated.

           Except as provided in this Section, no new certificate for shares
shall be issued in lieu of an old one unless the latter is surrendered and
cancelled at the same time. The Board may, however, if any certificate for
shares is alleged to have been lost, stolen or destroyed, authorize the issuance
of a new certificate in lieu thereof, and the corporation may require that the
corporation be given a bond or other adequate security sufficient to indemnify
it against any claim that may be made against it (including expense or
liability) on account of the alleged loss, theft or destruction of such
certificate or the issuance of such new certificate.

           Section 5. REPRESENTATION OF SHARES OF OTHER CORPORATIONS. The
President or any other officer or officers authorized by the Board or the
President are each authorized to vote, represent and exercise on behalf of the
corporation all rights incident to any and all shares of any other corporation
or corporations standing in the name of the corporation. The authority herein
granted may be exercised either by any such officer in person or by any other
person authorized so to do by proxy or power of attorney duly executed by said
officer.

           Section 6. STOCK PURCHASE PLANS. The corporation may adopt and carry
out a stock purchase plan or agreement or stock option plan or agreement
providing for the issue and sale for such consideration as may be fixed of its
unissued shares, or of issued shares acquired or to be acquired, to one or more
of the employees or directors of the corporation or of a subsidiary or to a
trustee on their behalf and for the payment for such shares in installments or
at one time, and may provide for aiding any such persons in paying for such
shares by compensation for services rendered, promissory notes or otherwise.

           Any such stock purchase plan or agreement or stock option plan or
agreement may include, among other features, the fixing of eligibility for
participation therein, the class and price of shares to be issued or sold under
the plan or agreement, the number of shares which may be subscribed for, the
method of payment therefor, the reservation of title until full payment
therefor, the effect of the termination of employment, an option or obligation
on the part of the corporation to repurchase the shares upon termination of
employment, restrictions upon transfer of the shares, the time limits of and
termination of the plan, and any other matters, not in violation of applicable
law, and may be included in the plan as approved or authorized by the Board or
any committee of the Board.

           Section 7. CONSTRUCTION AND DEFINITIONS. Unless the context otherwise
requires, the general provisions, rules of construction and definitions
contained in the General Provisions of the California Corporations Code and in
the California General Corporation Law shall govern the construction of these
Bylaws.

           Section 8. AMENDMENTS. These Bylaws may be amended or repealed either
by approval of the outstanding shares (as defined in Section 152 of the
California General Corporation Law) or by the approval of the Board; provided,
however, that after the issuance of

                                       14



shares, a bylaw specifying or changing a fixed number of directors or the
maximum or minimum number or changing from a fixed to a variable number of
directors or vice versa may only be adopted by approval of the outstanding
shares, and a bylaw reducing the fixed number or the minimum number of directors
to a number less than five shall be subject to the provisions of Section 212(a)
of the California General Corporation Law.

           Section 9. ANNUAL REPORT TO SHAREHOLDERS. The annual report to
shareholders referred to in Section 1501 of the California General Corporation
Law is expressly waived, but nothing herein shall be interpreted as prohibiting
the Board from issuing annual or other periodic reports to shareholders.

                          ARTICLE VI. Indemnification.

           Section 1. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Each person who
was or is a party or is threatened to be made a party to or is involved in any
threatened, pending or completed action, suit or proceeding, whether brought in
the name of the corporation or otherwise and whether of a civil, criminal,
administrative or investigative nature (hereinafter a "proceeding"), by reason
of the fact that he or she, or a person of whom he or she is the legal
representative, is or was a director or officer of the corporation or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is an alleged action or inaction in an official
capacity or in any other capacity while serving as a director or officer, shall,
subject to the terms of any agreement between the corporation and such person,
be indemnified and held harmless by the corporation to the fullest extent
permissible under California law and the corporation's Articles of
Incorporation, against all costs, charges, expenses, liabilities and losses
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement) reasonably incurred or suffered by
such person in connection therewith, and such indemnification shall continue as
to a person who has ceased to be a director or officer and shall inure to the
benefit of his or her heirs, executors and administrators; provided, however,
that the corporation shall indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such person only if
such proceeding (or part thereof) was authorized by the Board of Directors of
the corporation and provided, further, that no such person shall be indemnified
(i) except to the extent that the aggregate of losses to be indemnified exceeds
the amount of such losses for which the director or officer is paid pursuant to
any directors and officers liability insurance policy maintained by the
corporation; (ii) on account of any suit in which judgment is rendered against
such person for an accounting of profits made from the purchase or sale by such
person of securities of the corporation pursuant to the provisions of Section
16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar
provisions of any federal, state or local statutory law; (iii) for expenses,
judgments, funds, penalties or ERISA excise taxes resulting from such person's
conduct which is finally adjudged to have been willful misconduct, knowingly
fraudulent or deliberately dishonest; (iv) if a court of competent jurisdiction
finally determines that any indemnification hereunder is unlawful; (v) for acts
or omissions involving intentional misconduct or knowing and culpable violation
of law; (vi) for acts or omissions that the director or officer believes to be
contrary to the best interests of the corporation or its shareholders or that
involve the absence of good faith on the part of the director or officer; (vii)
for any transaction

                                       15



from which the director or officer derived an improper personal benefit; (viii)
for acts or omissions that show a reckless disregard for the director's or
officer's duty to the corporation or its shareholders in circumstances in which
the director or officer was aware, or should have been aware, in the ordinary
course of performing his duties, of a risk of serious injury to the corporation
or its shareholders; (ix) for acts or omissions that constitute an unexcused
pattern of inattention that amounts to an abdication of the director's or
officer's duties to the corporation or its shareholders; (x) for costs, charges,
expenses, liabilities and losses arising under Section 310 or 316 of the General
Corporation Law of California (the "Law"); and (xi) as to circumstances in which
indemnity is expressly prohibited by Section 317 of the Law. The right to
indemnification conferred in this Article shall be a contract right and shall
include the right to be paid by the corporation expenses incurred in defending
any proceeding in advance of its final disposition; provided, however, that if
the Law requires the payment of such expenses incurred by a director or officer
in his or her capacity as a director or officer (and not in any other capacity
in which service was or is rendered by such person while a director or officer,
including, without limitation, service to an employee benefit plan) in advance
of the final disposition of a proceeding, shall be made only upon delivery to
the corporation of an undertaking, by or on behalf of such director or officer,
to repay all amounts to the corporation unless it shall be determined ultimately
that such person is not entitled to be indemnified. No indemnity shall be
provided under this provision for any liability arising out of any act or
omission committed or occurring prior to the date an amendment containing this
provision is filed with the Secretary of State of California.

           Section 2. INDEMNIFICATION OF AGENTS. A person who was or is a party
or is threatened to be made a party to or is involved in any proceeding by
reason of the fact that he or she is or was an employee or agent of the
corporation or is or was serving at the request of the corporation as an
employee or agent of another enterprise, including service with respect to
employee benefit plans, whether the basis of such action is an alleged action or
inaction in an official capacity or in any other capacity while serving as an
employee or agent, may, subject to the terms of any agreement between the
corporation and such person, be indemnified and held harmless by the corporation
to the fullest extent permitted by California law and the corporation's Articles
of Incorporation, against all costs, charges, expenses, liabilities and losses
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement) reasonably incurred or suffered by
such person in connection therewith. The immediately preceding sentence is not
intended to be and shall not be considered to confer a contract right on any
employee or agent of the corporation.

           Section 3. RIGHT OF DIRECTORS AND OFFICERS TO BRING SUIT. If a claim
under Section 1 of this Article is not paid in full by the corporation within 30
days after a written claim has been received by the corporation, the claimant
may at any time thereafter bring suit against the corporation to recover the
unpaid amount of the claim and, if successful in whole or in part, the claimant
shall also be entitled to be paid the expense of prosecuting such claim. It
shall be a defense to any such action (other than an action brought to enforce a
claim for expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any is required, has been
tendered to the corporation) that the claimant has failed to meet a standard of
conduct, if any, required to make it permissible under California law for the
corporation to indemnify the claimant for the amount claimed. Neither the
failure of the corporation (including its Board of Directors, independent legal
counsel or its shareholders)

                                       16



to have made a determination prior to the commencement of such action and
indemnification of the claimant is permissible in the circumstances because he
or she has met such standard of conduct, nor an actual determination by the
corporation (including its Board of Directors, independent legal counsel or its
shareholders) that the claimant has not met such standard of conduct, shall be a
defense to the action or create a presumption that the claimant has failed to
meet such standard of conduct.

           Section 4. SUCCESSFUL DEFENSE. Notwithstanding any other provision of
this Article, to the extent that a director or officer has been successful on
the merits or otherwise (including the dismissal of an action without prejudice
or the settlement of a proceeding without admission of liability) in defense of
any proceeding referred to in Section 1 or, in defense of any claim, issue or
matter therein, he shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection therewith.

           Section 5. NON-EXCLUSIVITY OF RIGHTS. The right to indemnification
provided by this Article shall not be exclusive of any other right which any
person may have or hereafter acquire under any statute, bylaw, agreement, vote
of shareholders or disinterested directors or otherwise.

           Section 6. INSURANCE. The corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
corporation or another corporation, partnership, joint venture, trust or other
enterprise against any such expense, liability or loss, whether or not the
corporation would have the power to indemnify such person against such expense,
liability or loss under California law.

           Section 7. EXPENSES AS A WITNESS. To the extent that any director,
officer, employee or agent of the corporation is by reason of such position, or
a position with another entity at the request of the corporation, a witness in
any action, suit or proceeding, he may be indemnified against all costs and
expenses actually and reasonably incurred by him or her or on his or her behalf
in connection therewith.

           Section 8. INDEMNITY AGREEMENTS. The corporation may enter into
agreements with any director, officer, employee or agent of the corporation
providing for indemnification to the fullest extent permissible under California
law and the corporation's Articles of Incorporation.

                                       17

EX-3.18

                                                                    Exhibit 3.18

                            ARTICLES OF INCORPORATION

                                       OF

                     LIBERMAN BROADCASTING OF HOUSTON, INC.

                                      Name

           One: The name of the corporation is Liberman Broadcasting of Houston,
Inc.

                                     Purpose

           Two: The purpose of the corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of California other than the banking business, the trust company business or
the practice of a profession permitted to be incorporated by the California
Corporations Code.

                                Agent for Service

           Three: The name and address of the corporation's initial agent for
service of process are:

                                 Lenard Liberman
                            5724 Hollywood Boulevar
                           Hollywood, California 90028

                                Authorized Shares

           Four: The total number of shares of all classes of stock which the
corporation shall have the authority to issue is one thousand (1,000) shares of
Common Stock, par value $.01 per share.

                      Limitation on Liability of Directors
                        and Authority to Indemnify Agents

           Five: The liability of directors of the corporation for monetary
damages shall be eliminated to the fullest extent permissible under California
law.

           The corporation is authorized to provide indemnification of agents
(as defined in Section 317 of the California Corporations Code) for breach of
duty to the corporation and its shareholders through bylaw provisions,
agreements with agents, vote of shareholders or disinterested directors, or
otherwise, in excess of the indemnification otherwise permitted by Section 317
of the California Corporations Code, subject only to the applicable limits set
forth in Section 204 of the California Corporations Code.



           The undersigned declares that the undersigned has executed these
Articles of Incorporation and that this instrument is the act and deed of the
undersigned.

DATED:  December 1, 2000



                                        /s/ Donald Rolfe
                                        ---------------------------------------
                                            Donald Rolfe

                                       2

EX-3.19

                                                                    Exhibit 3.19


                                     BYLAWS

                                       of

                     LIBERMAN BROADCASTING OF HOUSTON, INC.,
                            a California corporation




                                      INDEX



                                                                                                           Page
                                                                                                           ----
                                                                                                        
ARTICLE I - Offices.

         Section 1.   PRINCIPAL EXECUTIVE OFFICE .........................................................  1
         Section 2.   OTHER OFFICES ......................................................................  1

ARTICLE II - Shareholders.

         Section 1.   PLACE OF MEETINGS ..................................................................  1
         Section 2.   ANNUAL MEETINGS ....................................................................  1
         Section 3.   SPECIAL MEETINGS ...................................................................  1
         Section 4.   NOTICE OF ANNUAL OR SPECIAL MEETINGS ...............................................  1
         Section 5.   QUORUM .............................................................................  2
         Section 6.   ADJOURNED MEETINGS AND NOTICE THEREOF ..............................................  2
         Section 7.   VOTING .............................................................................  2
         Section 8.   RECORD DATE ........................................................................  4
         Section 9.   CONSENT OF ABSENTEES ...............................................................  5
         Section 10.  ACTION WITHOUT MEETING .............................................................  5
         Section 11.  PROXIES ............................................................................  5
         Section 12.  INSPECTORS OF ELECTION .............................................................  6
         Section 13.  CONDUCT OF MEETING .................................................................  6

ARTICLE III - Directors.

         Section 1.   POWERS .............................................................................  6
         Section 2.   NUMBER OF DIRECTORS ................................................................  7
         Section 3.   ELECTION AND TERM OF OFFICE ........................................................  7
         Section 4.   VACANCIES ..........................................................................  7
         Section 5.   PLACE OF MEETING ...................................................................  8
         Section 6.   REGULAR MEETINGS ...................................................................  8
         Section 7.   SPECIAL MEETINGS ...................................................................  8
         Section 8.   QUORUM .............................................................................  8
         Section 9.   PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE ..................................  9
         Section 10.  WAIVER OF NOTICE ...................................................................  9
         Section 11.  ADJOURNMENT ........................................................................  9
         Section 12.  FEES AND COMPENSATION ..............................................................  9
         Section 13.  ACTION WITHOUT MEETING .............................................................  9
         Section 14.  RIGHTS OF INSPECTION ...............................................................  9
         Section 15.  COMMITTEES .........................................................................  9

ARTICLE IV - Officers.

         Section 1.   OFFICERS ........................................................................... 10
         Section 2.   ELECTION ........................................................................... 10
         Section 3.   SUBORDINATE OFFICERS ............................................................... 10


                                       i



                                                                                                        
         Section 4.   REMOVAL AND RESIGNATION ............................................................ 11
         Section 5.   VACANCIES .......................................................................... 11
         Section 6.   CHAIRMAN OF THE BOARD .............................................................. 11
         Section 7.   PRESIDENT .......................................................................... 11
         Section 8.   VICE PRESIDENTS .................................................................... 11
         Section 9.   SECRETARY .......................................................................... 11
         Section 10.  CHIEF FINANCIAL OFFICER ............................................................ 12

ARTICLE V - Other Provisions.

         Section 1.   INSPECTION OF CORPORATE RECORDS .................................................... 12
         Section 2.   INSPECTION OF BYLAWS ............................................................... 13
         Section 3.   ENDORSEMENT OF DOCUMENTS; CONTRACTS ................................................ 13
         Section 4.   CERTIFICATES OF STOCK .............................................................. 13
         Section 5.   REPRESENTATION OF SHARES OF OTHER CORPORATIONS ..................................... 14
         Section 6.   STOCK PURCHASE PLANS ............................................................... 14
         Section 7.   CONSTRUCTION AND DEFINITIONS ....................................................... 14
         Section 8.   AMENDMENTS ......................................................................... 14
         Section 9.   ANNUAL REPORT TO SHAREHOLDERS ...................................................... 15

ARTICLE VI - Indemnification.

         Section 1.   INDEMNIFICATION OF DIRECTORS AND OFFICERS .......................................... 15
         Section 2.   INDEMNIFICATION OF AGENTS .......................................................... 16
         Section 3.   RIGHT OF DIRECTORS AND OFFICERS TO BRING SUIT ...................................... 16
         Section 4.   SUCCESSFUL DEFENSE ................................................................. 17
         Section 5.   NON-EXCLUSIVITY OF RIGHTS .......................................................... 17
         Section 6.   INSURANCE .......................................................................... 17
         Section 7.   EXPENSES AS A WITNESS .............................................................. 17
         Section 8.   INDEMNITY AGREEMENTS ............................................................... 17



                                       ii





                                     BYLAWS

                           for the regulation, except
                       as otherwise provided by statute or
                         its Articles of Incorporation,

                                       of

                     LIBERMAN BROADCASTING OF HOUSTON, INC.,
                            a California corporation



                               ARTICLE I. Offices.

           Section 1. PRINCIPAL EXECUTIVE OFFICE. The corporation's principal
executive office shall be fixed and located at such place as the Board of
Directors (herein called the "Board") shall determine. The Board is granted full
power and authority to change said principal executive office from one location
to another.

           Section 2. OTHER OFFICES. Branch or subordinate offices may be
established at any time by the Board at any place or places.

                            ARTICLE II. Shareholders.

           Section 1. PLACE OF MEETINGS. Meetings of shareholders shall be held
either at the principal executive office of the corporation or at any other
place within or without the State of California which may be designated either
by the Board or by the written consent of all persons entitled to vote thereat,
given either before or after the meeting and filed with the Secretary.

           Section 2. ANNUAL MEETINGS. The annual meetings of shareholders shall
be held on such date and at such time as may be fixed by the Board.

           Section 3. SPECIAL MEETINGS. Special meetings of the shareholders may
be called at any time by the Board, the Chairman of the Board, the President, or
by the holders of shares entitled to cast not less than ten percent of the votes
at such meeting. Upon request in writing to the Chairman of the Board, the
President, any Vice President or the Secretary by any person (other than the
Board) entitled to call a special meeting of shareholders, the officer forthwith
shall cause notice to be given to the shareholders entitled to vote that a
meeting will be held at a time requested by the person or persons calling the
meeting, not less than thirty-five nor more than sixty days after the receipt of
the request. If the notice is not given within twenty days after receipt of the
request, the persons entitled to call the meeting may give the notice.

           Section 4. NOTICE OF ANNUAL OR SPECIAL MEETINGS. Written notice of
each annual or special meeting of shareholders shall be given not less than ten
nor more than sixty days before the date of the meeting to each shareholder
entitled to vote thereat. Such notice shall state the place, date and hour of
the meeting and (i) in the case of a special meeting,



the general nature of the business to be transacted, and no other business may
be transacted, or (ii) in the case of the annual meeting, those matters which
the Board, at the time of the mailing of the notice, intends to present for
action by the shareholders, but, subject to the provisions of applicable law,
any proper matter may be presented at the meeting for such action. The notice of
any meeting at which directors are to be elected shall include the names of
nominees intended at the time of the notice to be presented by management for
election.

           Notice of a shareholders' meeting shall be given either personally or
by mail or by other means of written communication, addressed to the shareholder
at the address of such shareholder appearing on the books of the corporation or
given by the shareholder to the corporation for the purpose of notice, or, if no
such address appears or is given, at the place where the principal executive
office of the corporation is located or by publication at least once in a
newspaper of general circulation in the county in which the principal executive
office is located. Notice by mail shall be deemed to have been given at the time
a written notice is deposited in the United States mails, postage prepaid. Any
other written notice shall be deemed to have been given at the time it is
personally delivered to the recipient or is delivered to a common carrier for
transmission, or actually transmitted by the person giving the notice by
electronic means, to the recipient.

           Section 5. QUORUM. A majority of the shares entitled to vote,
represented in person or by proxy, shall constitute a quorum at any meeting of
shareholders. If a quorum is present, the affirmative vote of a majority of the
shares represented and voting at the meeting (which shares voting affirmatively
also constitute at least a majority of the required quorum) shall be the act of
the shareholders, unless the vote of a greater number or voting by classes is
required by law or by the Articles, except as provided in the following
sentence. The shareholders present at a duly called or held meeting at which a
quorum is present may continue to do business until adjournment, notwithstanding
the withdrawal of enough shareholders to leave less than a quorum, if any action
taken (other than adjournment) is approved by at least a majority of the shares
required to constitute a quorum.

           Section 6. ADJOURNED MEETINGS AND NOTICE THEREOF. Any Shareholders'
meeting, whether or not a quorum is present, may be adjourned from time to time
by the vote of a majority of the shares represented either in person or by
proxy, but in the absence of a quorum (except as provided in Section 5 of this
Article) no other business may be transacted at such meeting.

           It shall not be necessary to give any notice of the time and place of
the adjourned meeting or of the business to be transacted thereat, other than by
announcement at the meeting at which such adjournment is taken; provided,
however, when any shareholders' meeting is adjourned for more than 45 days or,
if after adjournment a new record date is fixed for the adjourned meeting,
notice of the adjourned meeting shall be given as in the case of an original
meeting.

           Section 7. VOTING. The shareholders entitled to notice of any meeting
or to vote at any such meeting shall be only persons in whose name shares stand
on the stock records of the corporation on the record date determined in
accordance with Section 8 of this Article.

                                       2



           Subject to the following sentence and to the provisions of Section
708 of the California General Corporation Law, every shareholder entitled to
vote at any election of directors may cumulate such shareholder's votes and give
one candidate a number of votes equal to the number of directors to be elected
multiplied by the number of votes to which the shareholder's shares are
entitled, or distribute the shareholder's votes on the same principle among as
many candidates as the shareholder thinks fit. No shareholder shall be entitled
to cumulate votes for any candidate or candidates pursuant to the preceding
sentence unless such candidate or candidates' names have been placed in
nomination prior to the voting and the shareholder has given notice at the
meeting prior to the voting of the shareholder's intention to cumulate the
shareholder's votes. If any one shareholder has given such notice, all
shareholders may cumulate their votes for candidates in nomination.

           Elections need not be by ballot, provided, however, that all
elections for directors must be by ballot upon demand made by a shareholder at
the meeting and before the voting begins.

           In any election of directors, the candidates receiving the highest
number of votes of the shares entitled to be voted for them up to the number of
directors to be elected by such shares are elected.

           Voting shall in all cases be subject to the provisions of Chapter 7
of the California General Corporation Law, and to the following provisions:

           (a) Subject to clause (g), shares held by an administrator, executor,
guardian, conservator or custodian may be voted by such holder either in person
or by proxy, without a transfer of such shares into the holder's name; and
shares standing in the name of a trustee may be voted by the trustee, either in
person or by proxy, but no trustee shall be entitled to vote shares held by such
trustee without a transfer of such shares into the trustee's name.

           (b) Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into the receiver's name if authority
to do so is contained in the order of the court by which such receiver was
appointed.

           (c) Subject to the provisions of Section 705 of the California
General Corporation Law and except where otherwise agreed in writing between the
parties, a shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.

           (d) Shares standing in the name of a minor may be voted and the
corporation may treat all rights incident thereto as exercisable by the minor,
in person or by proxy, whether or not the corporation has notice, actual or
constructive, of the nonage, unless a guardian of the minor's property has been
appointed and written notice of such appointment given to the corporation.

           (e) Shares standing in the name of another corporation, domestic or
foreign, may be voted by such officer, agent or proxyholder as the bylaws of
such other corporation may

                                       3



prescribe or, in the absence of such provision, as the Board of Directors of
such other corporation may determine or, in the absence of such determination,
by the chairman of the board, president or any vice president of such other
corporation, or by any other person authorized to do so by the chairman of the
board, president or any vice president of such other corporation. Shares which
are purported to be voted or any proxy purported to be executed in the name of a
corporation (whether or not any title of the person signing is indicated) shall
be presumed to be voted or the proxy executed in accordance with the provisions
of this clause, unless the contrary is shown.

           (f) Shares of the corporation owned by any subsidiary shall not be
entitled to vote on any matter.

           (g) Shares held by the corporation in a fiduciary capacity, and
shares of the issuing corporation held in a fiduciary capacity by any
subsidiary, shall not be entitled to vote on any matter, except to the extent
that the settlor or beneficial owner possesses and exercises a right to vote or
to give the corporation binding instructions as to how to vote such shares.

           (h) If shares stand of record in the names of two or more persons,
whether fiduciaries, members of a partnership, joint tenants, tenants in common,
husband and wife as community property, tenants by the entirety, voting
trustees, persons entitled to vote under a shareholder voting agreement or
otherwise, or if two or more persons (including proxyholders) have the same
fiduciary relationship respecting the same shares, unless the secretary of the
corporation is given written notice to the contrary and is furnished with a copy
of the instrument or order appointing them or creating the relationship wherein
it is so provided, their acts with respect to voting shall have the following
effect:

               (i)   If only one votes, such act binds all;

               (ii)  If more than one vote, the act of the majority so voting
     binds all;

               (iii) If more than one vote, but the vote is evenly split on any
       particular matter, each faction may vote the securities in question
       proportionately.

If the instrument so filed or the registration of the shares shows that any such
tenancy is held in unequal interests, a majority or even split for the purpose
of this section shall be a majority or even split in interest.

           Section 8. RECORD DATE. The Board may fix, in advance, a record date
for the determination of the shareholders entitled to notice of any meeting or
to vote or entitled to receive payment of any dividend or other distribution, or
any allotment of rights, or to exercise rights in respect of any other lawful
action. The record date so fixed shall be not more than 60 days nor less than 10
days prior to the date of the meeting nor more than 60 days prior to any other
action. When a record date is so fixed, only shareholders of record on that date
are entitled to notice of and to vote at the meeting or to receive the dividend,
distribution, or allotment of rights, or to exercise the rights, as the case may
be, notwithstanding any transfer of shares on the books of the corporation after
the record date. A determination of shareholders of record entitled to notice of
or to vote at a meeting of shareholders shall apply to any adjournment of the
meeting unless the Board fixes a new record date for the adjourned meeting. The
Board shall fix a new record date if the meeting is adjourned for more than
forty-five days.

                                       4



           If no record date is fixed by the Board, the record date for
determining shareholders entitled to notice of or to vote at a meeting of
shareholders shall be at the close of business on the business day next
preceding the day on which notice is given or, if notice is waived, at the close
of business on the business day next preceding the day on which the meeting is
held. The record date for determining shareholders for any purpose other than
set forth in this Section 8 or Section 10 of this Article shall be at the close
of business on the day on which the Board adopts the resolution relating
thereto, or the sixtieth day prior to0the date of such other action, whichever
is later.

           Section 9.  CONSENT OF ABSENTEES. The transactions of any meeting of
shareholders, however called and noticed, and wherever held, are as valid as
though had at a meeting duly held after regular call and notice, if a quorum is
present either in person or by proxy, and if, either before or after the
meeting, each of the persons entitled to vote, not present in person or by
proxy, signs a written waiver of notice, or a consent to the holding of the
meeting or an approval of the minutes thereof. All such waivers, consents or
approvals shall be filed with the corporate records or made a part of the
minutes of the meeting. Attendance of a person at a meeting shall constitute a
waiver of notice of and presence at such meeting, except when the person
objects, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened and except that
attendance at a meeting is not a waiver of any right to object to the
consideration of matters required by the California General Corporation Law to
be included in the notice but not so included, if such objection is expressly
made at the meeting. Neither the business to be transacted at nor the purpose of
any regular or special meeting of shareholders need be specified in any written
waiver of notice, consent to the holding of the meeting or approval of the
minutes thereof, except as provided in Section 601(f) of the California General
Corporation Law.

           Section 10. ACTION WITHOUT MEETING. Subject to Section 603 of the
California General Corporation Law, any action which, under any provision of the
California General Corporation Law, may be taken at any annual or special
meeting of shareholders, may be taken without a meeting and without prior notice
if a consent in writing, setting forth the action so taken, shall be signed by
the holders of outstanding shares having not less than the minimum number of
votes that would be necessary to authorize or take such action at a meeting at
which all shares entitled to vote thereon were present and voted. Unless a
record date for voting purposes be fixed as provided in Section 8 of this
Article, the record date for determining shareholders entitled to give consent
pursuant to this Section 10, when no prior action by the Board has been taken,
shall be the day on which the first written consent is given.

           Section 11. PROXIES. Every person entitled to vote shares has the
right to do so either in person or by one or more persons authorized by a
written proxy executed by such shareholder and filed with the Secretary. Any
proxy duly executed is not revoked and continues in full force and effect until
revoked by the person executing it prior to the vote pursuant thereto. Such
revocation may be effected either, (i) by a writing delivered to the Secretary
of the Corporation stating that the proxy is revoked, (ii) by a subsequent proxy
executed by the person executing the prior proxy and presented to the meeting,
or (iii) by attendance at the meeting and voting in person by the person
executing the proxy; provided, however, that no proxy shall be valid after the
expiration of eleven months from the date of its execution unless otherwise
provided in the proxy.

                                       5



           Section 12. INSPECTORS OF ELECTION. In advance of any meeting of
shareholders, the Board may appoint inspectors of election to act at such
meeting and any adjournment thereof. If inspectors of election be not so
appointed, or if any persons so appointed fail to appear or refuse to act, the
chairman of any such meeting may, and on the request of any shareholder or
shareholder's proxy shall, make such appointment at the meeting. The number of
inspectors shall be either one or three. If appointed at a meeting on the
request of one or more shareholders or proxies, the majority of shares present
shall determine whether one or three inspectors are to be appointed.

           The duties of such inspectors shall be as prescribed by Section
707(b) of the California General Corporation Law and shall include: determining
the number of shares outstanding and the voting power of each; determining the
shares represented at the meeting; determining the existence of a quorum;
determining the authenticity, validity and effect of proxies; receiving votes,
ballots or consents; hearing and determining all challenges and questions in any
way arising in connection with the right to vote; counting and tabulating all
votes or consents; determining when the polls shall close; determining the
result; and doing such acts as may be proper to conduct the election or vote
with fairness to all shareholders. If there are three inspectors of election,
the decision, act or certificate of a majority is effective in all respects as
the decision, act or certificate of all.

           Section 13. CONDUCT OF MEETING. The President shall preside as
chairman at all meetings of the shareholders. The chairman shall conduct each
such meeting in a businesslike and fair manner, but shall not be obligated to
follow any technical, formal or parliamentary rules or principles of procedure.
The chairman's rulings on procedural matters shall be conclusive and binding on
all shareholders, unless at the time of a ruling a request for a vote is made to
the shareholders holding shares entitled to vote and which are represented in
person or by proxy at the meeting, in which case the decision of a majority of
such shares shall be conclusive and binding on all shareholders. Without
limiting the generality of the foregoing, the chairman shall have all of the
powers usually vested in the chairman of a meeting of shareholders.

                            ARTICLE III. Directors.

           Section 1.  POWERS. Subject to limitations of the Articles, of these
Bylaws and of the California General Corporation Law relating to action required
to be approved by the shareholders or by the outstanding shares, the business
and affairs of the corporation shall be managed and all corporate powers shall
be exercised by or under the direction of the Board. The Board may delegate the
management of the day-to-day operation of the business of the corporation to a
management company or other person provided that the business and affairs of the
corporation shall be managed and all corporate powers shall be exercised under
the ultimate direction of the Board. Without prejudice to such general powers,
but subject to the same limitations, it is hereby expressly declared that the
Board shall have the following powers in addition to the other powers enumerated
in these Bylaws:

           (a) To select and remove all the other officers, agents and employees
of the corporation, prescribe the powers and duties for them as may not be
inconsistent with law, the

                                       6



Articles or these Bylaws, fix their compensation and require from them security
for faithful service.

           (b) To conduct, manage and control the affairs and business of the
corporation and to make such rules and regulations therefor not inconsistent
with law, the Articles or these Bylaws, as they may deem best.

           (c) To adopt, make and use a corporate seal, and to prescribe the
forms of certificates of stock, and to alter the form of such seal and of such
certificates from time to time as they may deem best.

           (d) To authorize the issuance of shares of stock of the corporation
from time to time, upon such terms and for such consideration as may be lawful.

           (e) To borrow money and incur indebtedness for the purposes of the
corporation, and to cause to be executed and delivered therefor, in the
corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages,
pledges, hypothecations or other evidences of debt and securities therefor.

           Section 2. NUMBER OF DIRECTORS. The Board shall consist of one or
more members. The exact number shall be determined from time to time by
resolution of the Board. Directors shall be elected at the annual meeting of
shareholders and each director shall serve until such person's successor is
elected and qualified or until such person's death, retirement, resignation or
removal.

           Section 3. ELECTION AND TERM OF OFFICE. The directors shall be
elected at each annual meeting of the shareholders, but if any such annual
meeting is not held or the directors are not elected thereat, the directors may
be elected at any special meeting of shareholders held for that purpose. Each
director shall hold office until the next annual meeting and until a successor
has been elected and qualified.

           Section 4. VACANCIES. Any director may resign effective upon giving
written notice to the Chairman of the Board, the President, the Secretary or the
Board, unless the notice specifies a later time for the effectiveness of such
resignation. If the resignation is effective at a future time, a successor may
be elected to take office when the resignation becomes effective.

           Vacancies in the Board, except those existing as a result of a
removal of a director, may be filled by a majority of the remaining directors,
though less than a quorum, or by a sole remaining director, and each director so
elected shall hold office until the next annual meeting and until such
director's successor has been elected and qualified.

           A vacancy or vacancies in the Board shall be deemed to exist in case
of the death, resignation or removal of any director, or if the authorized
number of directors be increased, or if the shareholders fail, at any annual or
special meeting of shareholders at which any director or directors are elected,
to elect the full authorized number of directors to be voted for at that
meeting.

                                       7



           The Board may declare vacant the office of a director who has been
declared of unsound mind by an order of court or convicted of a felony.

           The shareholders may elect a director or directors at any time to
fill any vacancy or vacancies not filled by the directors. Any such election by
written consent other than to fill a vacancy created by removal requires the
consent of a majority of the outstanding shares entitled to vote. Any such
election by written consent to fill a vacancy created by removal requires
unanimous consent.

           No reduction of the authorized number of directors shall have the
effect of removing any director prior to the expiration of the director's term
of office.

           Section 5. PLACE OF MEETING. Regular or special meetings of the Board
shall be held at any place within or without the State of California which has
been designated from time to time by the Board. In the absence of such
designation, regular meetings shall be held at the principal executive office of
the corporation.

           Section 6. REGULAR MEETINGS. Immediately following each annual
meeting of shareholders the Board shall hold a regular meeting for the purpose
of organization, election of officers and the transaction of other business.

           Other regular meetings of the Board shall be held without call on
such dates and at such times as may be fixed by the Board. Call and notice of
all regular meetings of the Board are hereby dispensed with.

           Section 7. SPECIAL MEETINGS. Special meetings of the Board for any
purpose or purposes may be called at any time by the Chairman of the Board, the
President, any Vice President, the Secretary or by any two directors.

           Special meetings of the Board shall be held upon four days' written
notice or forty-eight hours' notice given personally or by telephone, telegraph,
telex or other similar means of communication. Any such notice shall be
addressed or delivered to each director at such director's address as it is
shown upon the records of the corporation or as may have been given to the
corporation by the director for purposes of notice or, if such address is not
shown on such records or is not readily ascertainable, at the place in which the
meetings of the directors are regularly held.

           Notice by mail shall be deemed to have been given at the time a
written notice is deposited in the United States mails, postage prepaid. Any
other written notice shall be deemed to have been given at the time it is
personally delivered to the recipient or is delivered to a common carrier for
transmission, or actually transmitted by the person giving the notice by
electronic means, to the recipient. Oral notice shall be deemed to have been
given at the time it is communicated, in person or by telephone or wireless, to
the recipient or to a person at the office of the recipient who the person
giving the notice has reason to believe will promptly communicate it to the
recipient.

           Section 8. QUORUM. A majority of the authorized number of directors
constitutes a quorum of the board for the transaction of business, except to
adjourn as provided

                                       8




in Section 11 of this Article. Every act or decision done or made by a majority
of the directors present at a meeting duly held at which a quorum is present
shall be regarded as the act of the Board, unless a greater number be required
by law or by the Articles. A meeting at which a quorum is initially present may
continue to transact business notwithstanding the withdrawal of directors, if
any action taken is approved by at least a majority of the required quorum for
such meeting.

           Section 9.  PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE.
Members of the Board may participate in a meeting through use of conference
telephone or similar communications equipment, so long as all members
participating in such meeting can hear one another.

           Section 10. WAIVER OF NOTICE. Notice of a meeting need not be given
to any director who signs a waiver of notice or a consent to holding the meeting
or an approval of the minutes thereof, whether before or after the meeting, or
who attends the meeting without protesting, prior thereto or at its
commencement, the lack of notice to such director. All such waivers, consents
and approvals shall be filed with the corporate records or made a part of the
minutes of the meeting.

           Section 11. ADJOURNMENT. A majority of the directors present, whether
or not a quorum is present, may adjourn any directors' meeting to another time
and place. Notice of the time and place of holding an adjourned meeting need not
be given to absent directors if the time and place be fixed at the meeting
adjourned, except as provided in the next sentence. If the meeting is adjourned
for more than 24 hours, notice of any adjournment to another time or place shall
be given prior to the time of the adjourned meeting to the directors who were
not present at the time of the adjournment.

           Section 12. FEES AND COMPENSATION. Directors and members of
committees may receive such compensation, if any, for their services, and such
reimbursement for expenses, as may be fixed or determined by the Board.

           Section 13. ACTION WITHOUT MEETING. Any action required or permitted
to be taken by the Board may be taken without a meeting if all members of the
Board shall individually or collectively consent in writing to such action. Such
consent or consents shall have the same effect as a unanimous vote of the Board
and shall be filed with the minutes of the proceedings of the Board.

           Section 14. RIGHTS OF INSPECTION. Every director shall have the
absolute right at any reasonable time to inspect and copy all books, records and
documents of every kind and to inspect the physical properties of the
corporation and also of its subsidiary corporations, domestic or foreign. Such
inspection by a director may be made in person or by agent or attorney and
includes the right to copy and obtain extracts.

           Section 15. COMMITTEES. The Board may appoint one or more committees,
each consisting of two or more directors, and delegate to such committees any of
the authority of the Board except with respect to:

                                       9



           (a) The approval of any action for which the General Corporation Law
also requires shareholders' approval or approval of the outstanding shares;

           (b) The filling of vacancies in the Board or on any committee;

           (c) The fixing of compensation of the directors for serving on the
Board or on any committee;

           (d) The amendment or repeal of bylaws or the adoption of new bylaws;

           (e) The amendment or repeal of any resolution of the Board which by
its express term is not so amendable or repealable;

           (f) A distribution to the shareholders of the corporation except at a
rate or in a periodic amount or within a price range determined by the Board; or

           (g) The appointment of other committees of the Board or the members
thereof.

           Any such committee must be designated, and the members or alternate
members thereof appointed, by resolution adopted by a majority of the authorized
number of directors and any such committee may be designated an Executive
Committee or by such other name as the Board shall specify. Alternate members of
a committee may replace any absent member at any meeting of the committee. The
Board shall have the power to prescribe the manner in which proceedings of any
such committee shall be conducted. In the absence of any such prescription, such
committee shall have the power to prescribe the manner in which its proceedings
shall be conducted. Unless the Board or such committee shall otherwise provide,
the regular and special meetings and other actions of any such committee shall
be governed by the provisions of this Article applicable to meetings and actions
of the Board. Minutes shall be kept of each meeting of each committee.

                              ARTICLE IV. Officers.

           Section 1. OFFICERS. The officers of the corporation shall be a
President, a Secretary and a Chief Financial Officer. The corporation may also
have, at the discretion of the Board, a Chairman of the Board, one or more Vice
Presidents, one or more Assistant Secretaries, one or more Assistant Financial
Officers, and such other officers as may be elected or appointed in accordance
with the provisions of Section 3 of this Article.

           Section 2. ELECTION. The officers of the corporation, except such
officers as may be elected or appointed in accordance with the provisions of
Section 3 or Section 5 of this Article, shall be chosen annually by, and shall
serve at the pleasure of, the Board, and shall hold their respective offices
until their resignation, removal, or other disqualification from service, or
until their respective successors shall be elected.

           Section 3. SUBORDINATE OFFICERS. The Board may elect, and may empower
the President to appoint, such other officers as the business of the corporation
may

                                       10



require, each of whom shall hold office for such period, have such authority and
perform such duties as are provided in these Bylaws or as the Board may from
time to time determine.

           Section 4. REMOVAL AND RESIGNATION. Any officer may be removed,
either with or without cause, by the Board at any time or, except in the case of
an officer chosen by the Board, by any officer upon whom such power of removal
may be conferred by the Board. Any such removal shall be without prejudice to
the rights, if any, of the officer under any contract of employment of the
officer.

           Any officer may resign at any time by giving written notice to the
corporation, but without prejudice to the rights, if any, of the corporation
under any contract to which the officer is a party. Any such resignation shall
take effect at the date of the receipt of such notice or at any later time
specified therein and, unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective.

           Section 5. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filled in the
manner prescribed in these Bylaws for regular election or appointment to such
office.

           Section 6. CHAIRMAN OF THE BOARD. The Chairman of the Board, if there
shall be such an officer, shall, if present, preside at all meetings of the
Board and exercise and perform such other powers and duties as may be from time
to time assigned by the Board.

           Section 7. PRESIDENT. Subject to such power, if any, as may be given
by the Board to the Chairman of the Board, if there be such an officer, the
President is the general manager and chief executive officer of the corporation
and has, subject to the control of the Board, general supervision, direction and
control of the business and officers of the corporation. The President shall
preside at all meetings of the shareholders and, in the absence of the Chairman
of the Board, or if there be none, at all meetings of the Board. The President
has the general powers and duties of management usually vested in the office of
president and general manager of a corporation and such other powers and duties
as may be prescribed by the Board.

           Section 8. VICE PRESIDENTS. In the absence or disability of the
President, the Vice Presidents in order of their rank as fixed by the Board or,
if not ranked, the Vice President designated by the Board, shall perform all the
duties of the President and, when so acting, shall have all the powers of, and
be subject to all the restrictions upon, the President. The Vice Presidents
shall have such other powers and perform such other duties as from time to time
may be prescribed for them respectively by the Board.

           Section 9. SECRETARY. The Secretary shall keep or cause to be kept,
at the principal executive office and such other place as the Board may order, a
book of minutes of all meetings of shareholders, the Board and its committees,
with the time and place of holding, whether regular or special, and if special,
how authorized, the notice thereof given, the names of those present at Board
and committee meetings, the number of shares present or represented at
shareholders' meetings, and the proceedings thereof. The Secretary shall keep,
or cause to be kept, a copy of the Bylaws of the corporation at the principal
executive office or business office in accordance with Section 213 of the
California General Corporation Law.

                                       11



           The Secretary shall keep, or cause to be kept, at the principal
executive office or at the office of the corporation's transfer agent or
registrar, if one be appointed, a share register, or a duplicate share register,
showing the names of the shareholders and their addresses, the number and
classes of shares held by each, the number and date of certificates issued for
the same, and the number and date of cancellation of every certificate
surrendered for cancellation.

           The Secretary shall give, or cause to be given, notice of all
meetings of the shareholders and of the Board and any committees thereof
required by these Bylaws or by law to be given, shall keep the seal of the
corporation in safe custody, and shall have such other powers and perform such
other duties as may be prescribed by the Board.

           Section 10. CHIEF FINANCIAL OFFICER. The Chief Financial Officer is
the chief financial officer of the corporation and shall keep and maintain, or
cause to be kept and maintained, adequate and correct accounts of the properties
and business transactions of the corporation, and shall send or cause to be sent
to the shareholders of the corporation such financial statements and reports as
are by law or these Bylaws required to be sent to them. The books of account
shall at all times be open to inspection by any director.

           The Chief Financial Officer shall deposit all moneys and other
valuables in the name and to the credit of the corporation with such
depositaries as may be designated by the Board. The Chief Financial Officer
shall disburse the funds of the corporation as may be ordered by the Board,
shall render to the President and the directors, whenever they request it, an
account of all transactions as Chief Financial Officer and of the financial
condition of the corporation, and shall have such other powers and perform such
other duties as may be prescribed by the Board.

                          ARTICLE V. Other Provisions.

                  Section 1. INSPECTION OF CORPORATE RECORDS.

           (a) A shareholder or shareholders holding at least five percent in
the aggregate of the outstanding voting shares of the corporation or who hold at
least one percent of such voting shares and have filed a Schedule l4B with the
United States Securities and Exchange Commission relating to the election of
directors of the corporation shall have an absolute right to do either or both
of the following:

               (i)  Inspect and copy the record of shareholders' names and
     addresses and shareholdings during usual business hours upon five business
     days' prior written demand upon the corporation; or

               (ii) Obtain from the transfer agent, if any, for the corporation,
     upon five business days' prior written demand and upon the tender of its
     usual charges for such a list (the amount of which charges shall be stated
     to the shareholder by the transfer agent upon request), a list of the
     shareholders' names and addresses who are entitled to vote for the election
     of directors and their shareholdings, as of the most recent record date for
     which it has been compiled or as of a date specified by the shareholder
     subsequent to the date of demand.

                                       12



           (b) The record of shareholders shall also be open to inspection and
copying by any shareholder or holder of a voting trust certificate at any time
during usual business hours upon written demand on the corporation, for a
purpose reasonably related to such holder's interest as a shareholder or holder
of a voting trust certificate.

           (c) The accounting books and records and minutes of proceedings of
the shareholders and the Board and committees of the Board shall be open to
inspection upon written demand on the corporation of any shareholder or holder
of a voting trust certificate at any reasonable time during usual business
hours, for a purpose reasonably related to such holder's interests as a
shareholder or as a holder of such voting trust certificate.

           (d) Any inspection and copying under this Article may be made in
person or by agent or attorney.

           Section 2. INSPECTION OF BYLAWS. The corporation shall keep in its
principal executive office in the State of California, or if its principal
executive office is not in such State at its principal business office in such
State, the original or a copy of these Bylaws as amended to date, which shall be
open to inspection by shareholders at all reasonable times during office hours.
If the principal executive office of the corporation is located outside the
State of California and the corporation has no principal business office in such
state, it shall upon the written request of any shareholder furnish to such
shareholder a copy of these Bylaws as amended to date.

           Section 3. ENDORSEMENT OF DOCUMENTS; CONTRACTS. Subject to the
provisions of applicable law, any note, mortgage, evidence of indebtedness,
contract, share certificate, conveyance or other instrument in writing and any
assignment or endorsements thereof executed or entered into between the
corporation and any other person, when signed by the Chairman of the Board, the
President or any Vice President and the Secretary, any Assistant Secretary, the
Chief Financial Officer or any Assistant Chief Financial Officer of the
corporation shall be valid and binding on the corporation in the absence of
actual knowledge on the part of the other person that the signing officers had
no authority to execute the same. Any such instruments may be signed by any
other person or persons and in such manner as from time to time shall be
determined by the Board, and, unless so authorized by the Board, no officer,
agent or employee shall have any power or authority to bind the corporation by
any contract or engagement or to pledge its credit or to render it liable for
any purpose or amount.

           Section 4. CERTIFICATES OF STOCK. Every holder of shares of the
corporation shall be entitled to have a certificate signed in the name of the
corporation by the Chairman of the Board, the President or a Vice President and
by the Chief Financial Officer or an Assistant Chief Financial Officer or the
Secretary or an Assistant Secretary, certifying the number of shares and the
class or series of shares owned by the shareholder. Any or all of the signatures
on the certificate may be facsimile. If any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the corporation with the same effect
as if such person were an officer, transfer agent or registrar at the date of
issue.

                                       13



           Certificates for shares may be issued prior to full payment under
such restrictions and for such purposes as the Board may provide; provided,
however, that on any certificate issued to represent any partly paid shares, the
total amount of the consideration to be paid therefor and the amount paid
thereon shall be stated.

           Except as provided in this Section, no new certificate for shares
shall be issued in lieu of an old one unless the latter is surrendered and
cancelled at the same time. The Board may, however, if any certificate for
shares is alleged to have been lost, stolen or destroyed, authorize the issuance
of a new certificate in lieu thereof, and the corporation may require that the
corporation be given a bond or other adequate security sufficient to indemnify
it against any claim that may be made against it (including expense or
liability) on account of the alleged loss, theft or destruction of such
certificate or the issuance of such new certificate.

           Section 5. REPRESENTATION OF SHARES OF OTHER CORPORATIONS. The
President or any other officer or officers authorized by the Board or the
President are each authorized to vote, represent and exercise on behalf of the
corporation all rights incident to any and all shares of any other corporation
or corporations standing in the name of the corporation. The authority herein
granted may be exercised either by any such officer in person or by any other
person authorized so to do by proxy or power of attorney duly executed by said
officer.

           Section 6. STOCK PURCHASE PLANS. The corporation may adopt and carry
out a stock purchase plan or agreement or stock option plan or agreement
providing for the issue and sale for such consideration as may be fixed of its
unissued shares, or of issued shares acquired or to be acquired, to one or more
of the employees or directors of the corporation or of a subsidiary or to a
trustee on their behalf and for the payment for such shares in installments or
at one time, and may provide for aiding any such persons in paying for such
shares by compensation for services rendered, promissory notes or otherwise.

           Any such stock purchase plan or agreement or stock option plan or
agreement may include, among other features, the fixing of eligibility for
participation therein, the class and price of shares to be issued or sold under
the plan or agreement, the number of shares which may be subscribed for, the
method of payment therefor, the reservation of title until full payment
therefor, the effect of the termination of employment, an option or obligation
on the part of the corporation to repurchase the shares upon termination of
employment, restrictions upon transfer of the shares, the time limits of and
termination of the plan, and any other matters, not in violation of applicable
law, and may be included in the plan as approved or authorized by the Board or
any committee of the Board.

           Section 7. CONSTRUCTION AND DEFINITIONS. Unless the context otherwise
requires, the general provisions, rules of construction and definitions
contained in the General Provisions of the California Corporations Code and in
the California General Corporation Law shall govern the construction of these
Bylaws.

           Section 8. AMENDMENTS. These Bylaws may be amended or repealed either
by approval of the outstanding shares (as defined in Section 152 of the
California General Corporation Law) or by the approval of the Board; provided,
however, that after the issuance of

                                       14



shares, a bylaw specifying or changing a fixed number of directors or the
maximum or minimum number or changing from a fixed to a variable number of
directors or vice versa may only be adopted by approval of the outstanding
shares, and a bylaw reducing the fixed number or the minimum number of directors
to a number less than five shall be subject to the provisions of Section 212(a)
of the California General Corporation Law.

           Section 9. ANNUAL REPORT TO SHAREHOLDERS. The annual report to
shareholders referred to in Section 1501 of the California General Corporation
Law is expressly waived, but nothing herein shall be interpreted as prohibiting
the Board from issuing annual or other periodic reports to shareholders.

                          ARTICLE VI. Indemnification.

           Section 1. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Each person who
was or is a party or is threatened to be made a party to or is involved in any
threatened, pending or completed action, suit or proceeding, whether brought in
the name of the corporation or otherwise and whether of a civil, criminal,
administrative or investigative nature (hereinafter a "proceeding"), by reason
of the fact that he or she, or a person of whom he or she is the legal
representative, is or was a director or officer of the corporation or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is an alleged action or inaction in an official
capacity or in any other capacity while serving as a director or officer, shall,
subject to the terms of any agreement between the corporation and such person,
be indemnified and held harmless by the corporation to the fullest extent
permissible under California law and the corporation's Articles of
Incorporation, against all costs, charges, expenses, liabilities and losses
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement) reasonably incurred or suffered by
such person in connection therewith, and such indemnification shall continue as
to a person who has ceased to be a director or officer and shall inure to the
benefit of his or her heirs, executors and administrators; provided, however,
that the corporation shall indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such person only if
such proceeding (or part thereof) was authorized by the Board of Directors of
the corporation and provided, further, that no such person shall be indemnified
(i) except to the extent that the aggregate of losses to be indemnified exceeds
the amount of such losses for which the director or officer is paid pursuant to
any directors and officers liability insurance policy maintained by the
corporation; (ii) on account of any suit in which judgment is rendered against
such person for an accounting of profits made from the purchase or sale by such
person of securities of the corporation pursuant to the provisions of Section
16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar
provisions of any federal, state or local statutory law; (iii) for expenses,
judgments, funds, penalties or ERISA excise taxes resulting from such person's
conduct which is finally adjudged to have been willful misconduct, knowingly
fraudulent or deliberately dishonest; (iv) if a court of competent jurisdiction
finally determines that any indemnification hereunder is unlawful; (v) for acts
or omissions involving intentional misconduct or knowing and culpable violation
of law; (vi) for acts or omissions that the director or officer believes to be
contrary to the best interests of the corporation or its shareholders or that
involve the absence of good faith on the part of the director or officer; (vii)
for any transaction

                                       15



from which the director or officer derived an improper personal benefit; (viii)
for acts or omissions that show a reckless disregard for the director's or
officer's duty to the corporation or its shareholders in circumstances in which
the director or officer was aware, or should have been aware, in the ordinary
course of performing his duties, of a risk of serious injury to the corporation
or its shareholders; (ix) for acts or omissions that constitute an unexcused
pattern of inattention that amounts to an abdication of the director's or
officer's duties to the corporation or its shareholders; (x) for costs, charges,
expenses, liabilities and losses arising under Section 310 or 316 of the General
Corporation Law of California (the "Law"); and (xi) as to circumstances in which
indemnity is expressly prohibited by Section 317 of the Law. The right to
indemnification conferred in this Article shall be a contract right and shall
include the right to be paid by the corporation expenses incurred in defending
any proceeding in advance of its final disposition; provided, however, that if
the Law requires the payment of such expenses incurred by a director or officer
in his or her capacity as a director or officer (and not in any other capacity
in which service was or is rendered by such person while a director or officer,
including, without limitation, service to an employee benefit plan) in advance
of the final disposition of a proceeding, shall be made only upon delivery to
the corporation of an undertaking, by or on behalf of such director or officer,
to repay all amounts to the corporation unless it shall be determined ultimately
that such person is not entitled to be indemnified. No indemnity shall be
provided under this provision for any liability arising out of any act or
omission committed or occurring prior to the date an amendment containing this
provision is filed with the Secretary of State of California.

           Section 2. INDEMNIFICATION OF AGENTS. A person who was or is a party
or is threatened to be made a party to or is involved in any proceeding by
reason of the fact that he or she is or was an employee or agent of the
corporation or is or was serving at the request of the corporation as an
employee or agent of another enterprise, including service with respect to
employee benefit plans, whether the basis of such action is an alleged action or
inaction in an official capacity or in any other capacity while serving as an
employee or agent, may, subject to the terms of any agreement between the
corporation and such person, be indemnified and held harmless by the corporation
to the fullest extent permitted by California law and the corporation's Articles
of Incorporation, against all costs, charges, expenses, liabilities and losses
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement) reasonably incurred or suffered by
such person in connection therewith. The immediately preceding sentence is not
intended to be and shall not be considered to confer a contract right on any
employee or agent of the corporation.

           Section 3. RIGHT OF DIRECTORS AND OFFICERS TO BRING SUIT. If a claim
under Section 1 of this Article is not paid in full by the corporation within 30
days after a written claim has been received by the corporation, the claimant
may at any time thereafter bring suit against the corporation to recover the
unpaid amount of the claim and, if successful in whole or in part, the claimant
shall also be entitled to be paid the expense of prosecuting such claim. It
shall be a defense to any such action (other than an action brought to enforce a
claim for expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any is required, has been
tendered to the corporation) that the claimant has failed to meet a standard of
conduct, if any, required to make it permissible under California law for the
corporation to indemnify the claimant for the amount claimed. Neither the
failure of the corporation (including its Board of Directors, independent

                                       16



legal counsel or its shareholders) to have made a determination prior to the
commencement of such action and indemnification of the claimant is permissible
in the circumstances because he or she has met such standard of conduct, nor an
actual determination by the corporation (including its Board of Directors,
independent legal counsel or its shareholders) that the claimant has not met
such standard of conduct, shall be a defense to the action or create a
presumption that the claimant has failed to meet such standard of conduct.

           Section 4. SUCCESSFUL DEFENSE. Notwithstanding any other provision of
this Article, to the extent that a director or officer has been successful on
the merits or otherwise (including the dismissal of an action without prejudice
or the settlement of a proceeding without admission of liability) in defense of
any proceeding referred to in Section 1 or, in defense of any claim, issue or
matter therein, he shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection therewith.

           Section 5. NON-EXCLUSIVITY OF RIGHTS. The right to indemnification
provided by this Article shall not be exclusive of any other right which any
person may have or hereafter acquire under any statute, bylaw, agreement, vote
of shareholders or disinterested directors or otherwise.

           Section 6. INSURANCE. The corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
corporation or another corporation, partnership, joint venture, trust or other
enterprise against any such expense, liability or loss, whether or not the
corporation would have the power to indemnify such person against such expense,
liability or loss under California law.

           Section 7. EXPENSES AS A WITNESS. To the extent that any director,
officer, employee or agent of the corporation is by reason of such position, or
a position with another entity at the request of the corporation, a witness in
any action, suit or proceeding, he may be indemnified against all costs and
expenses actually and reasonably incurred by him or her or on his or her behalf
in connection therewith.

           Section 8. INDEMNITY AGREEMENTS. The corporation may enter into
agreements with any director, officer, employee or agent of the corporation
providing for indemnification to the fullest extent permissible under California
law and the corporation's Articles of Incorporation.

                                       17

EX-3.20

                                                                    Exhibit 3.20

                            ARTICLES OF INCORPORATION

                                       OF

                 LIBERMAN BROADCASTING OF HOUSTON LICENSE CORP.

                                      Name

       One: The name of the corporation is Liberman Broadcasting of Houston
License Corp.

                                     Purpose

       Two: The purpose of the corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of California other than the banking business, the trust company business or
the practice of a profession permitted to be incorporated by the California
Corporations Code.

                                Agent for Service

       Three: The name and address of the corporation's initial agent for
service of process are:

                                 Lenard Liberman
                            5724 Hollywood Boulevard
                           Hollywood, California 90028

                                Authorized Shares

       Four: The total number of shares of all classes of stock which the
corporation shall have the authority to issue is one thousand (1,000) shares of
Common Stock, par value $.01 per share.

                      Limitation on Liability of Directors
                        and Authority to Indemnify Agents

       Five: The liability of directors of the corporation for monetary damages
shall be eliminated to the fullest extent permissible under California law.

       The corporation is authorized to provide indemnification of agents (as
defined in Section 317 of the California Corporations Code) for breach of duty
to the corporation and its shareholders through bylaw provisions, agreements
with agents, vote of shareholders or disinterested directors, or otherwise, in
excess of the indemnification otherwise permitted by Section 317 of the
California Corporations Code, subject only to the applicable limits set forth in
Section 204 of the California Corporations Code.



       The undersigned declares that the undersigned has executed these Articles
of Incorporation and that this instrument is the act and deed of the
undersigned.

DATED: December 1, 2000


                                                         /s/ Donald Rolfe
                                                     ---------------------------
                                                     Donald Rolfe

                                        2

EX-3.21

                                                                    Exhibit 3.21

                                     BYLAWS

                                       of

                 LIBERMAN BROADCASTING OF HOUSTON LICENSE CORP.,
                            a California corporation



                                      INDEX



                                                                               Page
                                                                               ----
                                                                            
ARTICLE I - Offices.

     Section 1.    PRINCIPAL EXECUTIVE OFFICE ..............................      1
     Section 2.    OTHER OFFICES ...........................................      1

ARTICLE II - Shareholders.

     Section 1.    PLACE OF MEETINGS .......................................      1
     Section 2.    ANNUAL MEETINGS .........................................      1
     Section 3.    SPECIAL MEETINGS ........................................      1
     Section 4.    NOTICE OF ANNUAL OR SPECIAL MEETINGS ....................      1
     Section 5.    QUORUM ..................................................      2
     Section 6.    ADJOURNED MEETINGS AND NOTICE THEREOF ...................      2
     Section 7.    VOTING ..................................................      2
     Section 8.    RECORD DATE .............................................      4
     Section 9.    CONSENT OF ABSENTEES ....................................      5
     Section 10.   ACTION WITHOUT MEETING ..................................      5
     Section 11.   PROXIES .................................................      5
     Section 12.   INSPECTORS OF ELECTION ..................................      6
     Section 13.   CONDUCT OF MEETING ......................................      6

ARTICLE III - Directors.

     Section 1.    POWERS ..................................................      6
     Section 2.    NUMBER OF DIRECTORS .....................................      7
     Section 3.    ELECTION AND TERM OF OFFICE .............................      7
     Section 4.    VACANCIES ...............................................      7
     Section 5.    PLACE OF MEETING ........................................      8
     Section 6.    REGULAR MEETINGS ........................................      8
     Section 7.    SPECIAL MEETINGS ........................................      8
     Section 8.    QUORUM ..................................................      8
     Section 9.    PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE .......      9
     Section 10.   WAIVER OF NOTICE ........................................      9
     Section 11.   ADJOURNMENT .............................................      9
     Section 12.   FEES AND COMPENSATION ...................................      9
     Section 13.   ACTION WITHOUT MEETING ..................................      9
     Section 14.   RIGHTS OF INSPECTION ....................................      9
     Section 15.   COMMITTEES ..............................................      9

ARTICLE IV - Officers.

     Section 1.    OFFICERS ................................................     10
     Section 2.    ELECTION ................................................     10
     Section 3.    SUBORDINATE OFFICERS ....................................     10


                                        i



                                                                             
     Section 4.    REMOVAL AND RESIGNATION .................................     11
     Section 5.    VACANCIES ...............................................     11
     Section 6.    CHAIRMAN OF THE BOARD ...................................     11
     Section 7.    PRESIDENT ...............................................     11
     Section 8.    VICE PRESIDENTS .........................................     11
     Section 9.    SECRETARY ...............................................     11
     Section 10.   CHIEF FINANCIAL OFFICER .................................     12

ARTICLE V - Other Provisions.

     Section 1.    INSPECTION OF CORPORATE RECORDS .........................     12
     Section 2.    INSPECTION OF BYLAWS ....................................     13
     Section 3.    ENDORSEMENT OF DOCUMENTS; CONTRACTS .....................     13
     Section 4.    CERTIFICATES OF STOCK ...................................     13
     Section 5.    REPRESENTATION OF SHARES OF OTHER CORPORATIONS ..........     14
     Section 6.    STOCK PURCHASE PLANS ....................................     14
     Section 7.    CONSTRUCTION AND DEFINITIONS ............................     14
     Section 8.    AMENDMENTS ..............................................     14
     Section 9.    ANNUAL REPORT TO SHAREHOLDERS ...........................     15

ARTICLE VI - Indemnification.

     Section 1.    INDEMNIFICATION OF DIRECTORS AND OFFICERS ...............     15
     Section 2.    INDEMNIFICATION OF AGENTS ...............................     16
     Section 3.    RIGHT OF DIRECTORS AND OFFICERS TO BRING SUIT ...........     16
     Section 4.    SUCCESSFUL DEFENSE ......................................     17
     Section 5.    NON-EXCLUSIVITY OF RIGHTS ...............................     17
     Section 6.    INSURANCE ...............................................     17
     Section 7.    EXPENSES AS A WITNESS ...................................     17
     Section 8.    INDEMNITY AGREEMENTS ....................................     17



                                       ii



                                     BYLAWS

                           for the regulation, except
                       as otherwise provided by statute or
                         its Articles of Incorporation,

                                       of

                 LIBERMAN BROADCASTING OF HOUSTON LICENSE CORP.,
                            a California corporation

                              ARTICLE I. Offices.

         Section 1. PRINCIPAL EXECUTIVE OFFICE. The corporation's principal
executive office shall be fixed and located at such place as the Board of
Directors (herein called the "Board") shall determine. The Board is granted full
power and authority to change said principal executive office from one location
to another.

         Section 2. OTHER OFFICES. Branch or subordinate offices may be
established at any time by the Board at any place or places.

                           ARTICLE II. Shareholders.

         Section 1. PLACE OF MEETINGS. Meetings of shareholders shall be held
either at the principal executive office of the corporation or at any other
place within or without the State of California which may be designated either
by the Board or by the written consent of all persons entitled to vote thereat,
given either before or after the meeting and filed with the Secretary.

         Section 2. ANNUAL MEETINGS. The annual meetings of shareholders shall
be held on such date and at such time as may be fixed by the Board.

         Section 3. SPECIAL MEETINGS. Special meetings of the shareholders may
be called at any time by the Board, the Chairman of the Board, the President, or
by the holders of shares entitled to cast not less than ten percent of the votes
at such meeting. Upon request in writing to the Chairman of the Board, the
President, any Vice President or the Secretary by any person (other than the
Board) entitled to call a special meeting of shareholders, the officer forthwith
shall cause notice to be given to the shareholders entitled to vote that a
meeting will be held at a time requested by the person or persons calling the
meeting, not less than thirty-five nor more than sixty days after the receipt of
the request. If the notice is not given within twenty days after receipt of the
request, the persons entitled to call the meeting may give the notice.

         Section 4. NOTICE OF ANNUAL OR SPECIAL MEETINGS. Written notice of each
annual or special meeting of shareholders shall be given not less than ten nor
more than sixty days before the date of the meeting to each shareholder entitled
to vote thereat. Such notice shall state the place, date and hour of the meeting
and (i) in the case of a special meeting,



the general nature of the business to be transacted, and no other business may
be transacted, or (ii) in the case of the annual meeting, those matters which
the Board, at the time of the mailing of the notice, intends to present for
action by the shareholders, but, subject to the provisions of applicable law,
any proper matter may be presented at the meeting for such action. The notice of
any meeting at which directors are to be elected shall include the names of
nominees intended at the time of the notice to be presented by management for
election.

         Notice of a shareholders' meeting shall be given either personally or
by mail or by other means of written communication, addressed to the shareholder
at the address of such shareholder appearing on the books of the corporation or
given by the shareholder to the corporation for the purpose of notice, or, if no
such address appears or is given, at the place where the principal executive
office of the corporation is located or by publication at least once in a
newspaper of general circulation in the county in which the principal executive
office is located. Notice by mail shall be deemed to have been given at the time
a written notice is deposited in the United States mails, postage prepaid. Any
other written notice shall be deemed to have been given at the time it is
personally delivered to the recipient or is delivered to a common carrier for
transmission, or actually transmitted by the person giving the notice by
electronic means, to the recipient.

         Section 5. QUORUM. A majority of the shares entitled to vote,
represented in person or by proxy, shall constitute a quorum at any meeting of
shareholders. If a quorum is present, the affirmative vote of a majority of the
shares represented and voting at the meeting (which shares voting affirmatively
also constitute at least a majority of the required quorum) shall be the act of
the shareholders, unless the vote of a greater number or voting by classes is
required by law or by the Articles, except as provided in the following
sentence. The shareholders present at a duly called or held meeting at which a
quorum is present may continue to do business until adjournment, notwithstanding
the withdrawal of enough shareholders to leave less than a quorum, if any action
taken (other than adjournment) is approved by at least a majority of the shares
required to constitute a quorum.

         Section 6. ADJOURNED MEETINGS AND NOTICE THEREOF. Any Shareholders'
meeting, whether or not a quorum is present, may be adjourned from time to time
by the vote of a majority of the shares represented either in person or by
proxy, but in the absence of a quorum (except as provided in Section 5 of this
Article) no other business may be transacted at such meeting.

         It shall not be necessary to give any notice of the time and place of
the adjourned meeting or of the business to be transacted thereat, other than by
announcement at the meeting at which such adjournment is taken; provided,
however, when any shareholders' meeting is adjourned for more than 45 days or,
if after adjournment a new record date is fixed for the adjourned meeting,
notice of the adjourned meeting shall be given as in the case of an original
meeting.

         Section 7. VOTING. The shareholders entitled to notice of any meeting
or to vote at any such meeting shall be only persons in whose name shares stand
on the stock records of the corporation on the record date determined in
accordance with Section 8 of this Article.

                                        2



         Subject to the following sentence and to the provisions of Section 708
of the California General Corporation Law, every shareholder entitled to vote at
any election of directors may cumulate such shareholder's votes and give one
candidate a number of votes equal to the number of directors to be elected
multiplied by the number of votes to which the shareholder's shares are
entitled, or distribute the shareholder's votes on the same principle among as
many candidates as the shareholder thinks fit. No shareholder shall be entitled
to cumulate votes for any candidate or candidates pursuant to the preceding
sentence unless such candidate or candidates' names have been placed in
nomination prior to the voting and the shareholder has given notice at the
meeting prior to the voting of the shareholder's intention to cumulate the
shareholder's votes. If any one shareholder has given such notice, all
shareholders may cumulate their votes for candidates in nomination.

         Elections need not be by ballot, provided, however, that all elections
for directors must be by ballot upon demand made by a shareholder at the meeting
and before the voting begins.

         In any election of directors, the candidates receiving the highest
number of votes of the shares entitled to be voted for them up to the number of
directors to be elected by such shares are elected.

         Voting shall in all cases be subject to the provisions of Chapter 7 of
the California General Corporation Law, and to the following provisions:

         (a) Subject to clause (g), shares held by an administrator, executor,
guardian, conservator or custodian may be voted by such holder either in person
or by proxy, without a transfer of such shares into the holder's name; and
shares standing in the name of a trustee may be voted by the trustee, either in
person or by proxy, but no trustee shall be entitled to vote shares held by such
trustee without a transfer of such shares into the trustee's name.

         (b) Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into the receiver's name if authority
to do so is contained in the order of the court by which such receiver was
appointed.

         (c) Subject to the provisions of Section 705 of the California General
Corporation Law and except where otherwise agreed in writing between the
parties, a shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.

         (d) Shares standing in the name of a minor may be voted and the
corporation may treat all rights incident thereto as exercisable by the minor,
in person or by proxy, whether or not the corporation has notice, actual or
constructive, of the nonage, unless a guardian of the minor's property has been
appointed and written notice of such appointment given to the corporation.

         (e) Shares standing in the name of another corporation, domestic or
foreign, may be voted by such officer, agent or proxyholder as the bylaws of
such other corporation may

                                        3



prescribe or, in the absence of such provision, as the Board of Directors of
such other corporation may determine or, in the absence of such determination,
by the chairman of the board, president or any vice president of such other
corporation, or by any other person authorized to do so by the chairman of the
board, president or any vice president of such other corporation. Shares which
are purported to be voted or any proxy purported to be executed in the name of a
corporation (whether or not any title of the person signing is indicated) shall
be presumed to be voted or the proxy executed in accordance with the provisions
of this clause, unless the contrary is shown.

         (f) Shares of the corporation owned by any subsidiary shall not be
entitled to vote on any matter.

         (g) Shares held by the corporation in a fiduciary capacity, and shares
of the issuing corporation held in a fiduciary capacity by any subsidiary, shall
not be entitled to vote on any matter, except to the extent that the settlor or
beneficial owner possesses and exercises a right to vote or to give the
corporation binding instructions as to how to vote such shares.

         (h) If shares stand of record in the names of two or more persons,
whether fiduciaries, members of a partnership, joint tenants, tenants in common,
husband and wife as community property, tenants by the entirety, voting
trustees, persons entitled to vote under a shareholder voting agreement or
otherwise, or if two or more persons (including proxyholders) have the same
fiduciary relationship respecting the same shares, unless the secretary of the
corporation is given written notice to the contrary and is furnished with a copy
of the instrument or order appointing them or creating the relationship wherein
it is so provided, their acts with respect to voting shall have the following
effect:

             (i)    If only one votes, such act binds all;

             (ii)   If more than one vote, the act of the majority so voting
    binds all;

             (iii)  If more than one vote, but the vote is evenly split on any
    particular matter, each faction may vote the securities in question
    proportionately.

If the instrument so filed or the registration of the shares shows that any such
tenancy is held in unequal interests, a majority or even split for the purpose
of this section shall be a majority or even split in interest.

         Section 8. RECORD DATE. The Board may fix, in advance, a record date
for the determination of the shareholders entitled to notice of any meeting or
to vote or entitled to receive payment of any dividend or other distribution, or
any allotment of rights, or to exercise rights in respect of any other lawful
action. The record date so fixed shall be not more than 60 days nor less than 10
days prior to the date of the meeting nor more than 60 days prior to any other
action. When a record date is so fixed, only shareholders of record on that date
are entitled to notice of and to vote at the meeting or to receive the dividend,
distribution, or allotment of rights, or to exercise the rights, as the case may
be, notwithstanding any transfer of shares on the books of the corporation after
the record date. A determination of shareholders of record entitled to notice of
or to vote at a meeting of shareholders shall apply to any adjournment of the
meeting unless the Board fixes a new record date for the adjourned meeting. The
Board shall fix a new record date if the meeting is adjourned for more than
forty-five days.

                                        4



         If no record date is fixed by the Board, the record date for
determining shareholders entitled to notice of or to vote at a meeting of
shareholders shall be at the close of business on the business day next
preceding the day on which notice is given or, if notice is waived, at the close
of business on the business day next preceding the day on which the meeting is
held. The record date for determining shareholders for any purpose other than
set forth in this Section 8 or Section 10 of this Article shall be at the close
of business on the day on which the Board adopts the resolution relating
thereto, or the sixtieth day prior to the date of such other action, whichever
is later.

         Section 9. CONSENT OF ABSENTEES. The transactions of any meeting of
shareholders, however called and noticed, and wherever held, are as valid as
though had at a meeting duly held after regular call and notice, if a quorum is
present either in person or by proxy, and if, either before or after the
meeting, each of the persons entitled to vote, not present in person or by
proxy, signs a written waiver of notice, or a consent to the holding of the
meeting or an approval of the minutes thereof. All such waivers, consents or
approvals shall be filed with the corporate records or made a part of the
minutes of the meeting. Attendance of a person at a meeting shall constitute a
waiver of notice of and presence at such meeting, except when the person
objects, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened and except that
attendance at a meeting is not a waiver of any right to object to the
consideration of matters required by the California General Corporation Law to
be included in the notice but not so included, if such objection is expressly
made at the meeting. Neither the business to be transacted at nor the purpose of
any regular or special meeting of shareholders need be specified in any written
waiver of notice, consent to the holding of the meeting or approval of the
minutes thereof, except as provided in Section 601(f) of the California General
Corporation Law.

         Section 10. ACTION WITHOUT MEETING. Subject to Section 603 of the
California General Corporation Law, any action which, under any provision of the
California General Corporation Law, may be taken at any annual or special
meeting of shareholders, may be taken without a meeting and without prior notice
if a consent in writing, setting forth the action so taken, shall be signed by
the holders of outstanding shares having not less than the minimum number of
votes that would be necessary to authorize or take such action at a meeting at
which all shares entitled to vote thereon were present and voted. Unless a
record date for voting purposes be fixed as provided in Section 8 of this
Article, the record date for determining shareholders entitled to give consent
pursuant to this Section 10, when no prior action by the Board has been taken,
shall be the day on which the first written consent is given.

         Section 11. PROXIES. Every person entitled to vote shares has the right
to do so either in person or by one or more persons authorized by a written
proxy executed by such shareholder and filed with the Secretary. Any proxy duly
executed is not revoked and continues in full force and effect until revoked by
the person executing it prior to the vote pursuant thereto. Such revocation may
be effected either, (i) by a writing delivered to the Secretary of the
Corporation stating that the proxy is revoked, (ii) by a subsequent proxy
executed by the person executing the prior proxy and presented to the meeting,
or (iii) by attendance at the meeting and voting in person by the person
executing the proxy; provided, however, that no proxy shall be valid after the
expiration of eleven months from the date of its execution unless otherwise
provided in the proxy.

                                        5



         Section 12. INSPECTORS OF ELECTION. In advance of any meeting of
shareholders, the Board may appoint inspectors of election to act at such
meeting and any adjournment thereof. If inspectors of election be not so
appointed, or if any persons so appointed fail to appear or refuse to act, the
chairman of any such meeting may, and on the request of any shareholder or
shareholder's proxy shall, make such appointment at the meeting. The number of
inspectors shall be either one or three. If appointed at a meeting on the
request of one or more shareholders or proxies, the majority of shares present
shall determine whether one or three inspectors are to be appointed.

         The duties of such inspectors shall be as prescribed by Section 707(b)
of the California General Corporation Law and shall include: determining the
number of shares outstanding and the voting power of each; determining the
shares represented at the meeting; determining the existence of a quorum;
determining the authenticity, validity and effect of proxies; receiving votes,
ballots or consents; hearing and determining all challenges and questions in any
way arising in connection with the right to vote; counting and tabulating all
votes or consents; determining when the polls shall close; determining the
result; and doing such acts as may be proper to conduct the election or vote
with fairness to all shareholders. If there are three inspectors of election,
the decision, act or certificate of a majority is effective in all respects as
the decision, act or certificate of all.

         Section 13. CONDUCT OF MEETING. The President shall preside as chairman
at all meetings of the shareholders. The chairman shall conduct each such
meeting in a businesslike and fair manner, but shall not be obligated to follow
any technical, formal or parliamentary rules or principles of procedure. The
chairman's rulings on procedural matters shall be conclusive and binding on all
shareholders, unless at the time of a ruling a request for a vote is made to the
shareholders holding shares entitled to vote and which are represented in person
or by proxy at the meeting, in which case the decision of a majority of such
shares shall be conclusive and binding on all shareholders. Without limiting the
generality of the foregoing, the chairman shall have all of the powers usually
vested in the chairman of a meeting of shareholders.

                            ARTICLE III. Directors.

         Section 1. POWERS. Subject to limitations of the Articles, of these
Bylaws and of the California General Corporation Law relating to action required
to be approved by the shareholders or by the outstanding shares, the business
and affairs of the corporation shall be managed and all corporate powers shall
be exercised by or under the direction of the Board. The Board may delegate the
management of the day-to-day operation of the business of the corporation to a
management company or other person provided that the business and affairs of the
corporation shall be managed and all corporate powers shall be exercised under
the ultimate direction of the Board. Without prejudice to such general powers,
but subject to the same limitations, it is hereby expressly declared that the
Board shall have the following powers in addition to the other powers enumerated
in these Bylaws:

         (a) To select and remove all the other officers, agents and employees
of the corporation, prescribe the powers and duties for them as may not be
inconsistent with law, the

                                        6



Articles or these Bylaws, fix their compensation and require from them security
for faithful service.

         (b) To conduct, manage and control the affairs and business of the
corporation and to make such rules and regulations therefor not inconsistent
with law, the Articles or these Bylaws, as they may deem best.

         (c) To adopt, make and use a corporate seal, and to prescribe the forms
of certificates of stock, and to alter the form of such seal and of such
certificates from time to time as they may deem best.

         (d) To authorize the issuance of shares of stock of the corporation
from time to time, upon such terms and for such consideration as may be lawful.

         (e) To borrow money and incur indebtedness for the purposes of the
corporation, and to cause to be executed and delivered therefor, in the
corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages,
pledges, hypothecations or other evidences of debt and securities therefor.

         Section 2. NUMBER OF DIRECTORS. The Board shall consist of one or more
members. The exact number shall be determined from time to time by resolution of
the Board. Directors shall be elected at the annual meeting of shareholders and
each director shall serve until such person's successor is elected and qualified
or until such person's death, retirement, resignation or removal.

         Section 3. ELECTION AND TERM OF OFFICE. The directors shall be elected
at each annual meeting of the shareholders, but if any such annual meeting is
not held or the directors are not elected thereat, the directors may be elected
at any special meeting of shareholders held for that purpose. Each director
shall hold office until the next annual meeting and until a successor has been
elected and qualified.

         Section 4. VACANCIES. Any director may resign effective upon giving
written notice to the Chairman of the Board, the President, the Secretary or the
Board, unless the notice specifies a later time for the effectiveness of such
resignation. If the resignation is effective at a future time, a successor may
be elected to take office when the resignation becomes effective.

         Vacancies in the Board, except those existing as a result of a removal
of a director, may be filled by a majority of the remaining directors, though
less than a quorum, or by a sole remaining director, and each director so
elected shall hold office until the next annual meeting and until such
director's successor has been elected and qualified.

         A vacancy or vacancies in the Board shall be deemed to exist in case of
the death, resignation or removal of any director, or if the authorized number
of directors be increased, or if the shareholders fail, at any annual or special
meeting of shareholders at which any director or directors are elected, to elect
the full authorized number of directors to be voted for at that meeting.

                                        7



         The Board may declare vacant the office of a director who has been
declared of unsound mind by an order of court or convicted of a felony.

         The shareholders may elect a director or directors at any time to fill
any vacancy or vacancies not filled by the directors. Any such election by
written consent other than to fill a vacancy created by removal requires the
consent of a majority of the outstanding shares entitled to vote. Any such
election by written consent to fill a vacancy created by removal requires
unanimous consent.

         No reduction of the authorized number of directors shall have the
effect of removing any director prior to the expiration of the director's term
of office.

         Section 5. PLACE OF MEETING. Regular or special meetings of the Board
shall be held at any place within or without the State of California which has
been designated from time to time by the Board. In the absence of such
designation, regular meetings shall be held at the principal executive office of
the corporation.

         Section 6. REGULAR MEETINGS. Immediately following each annual meeting
of shareholders the Board shall hold a regular meeting for the purpose of
organization, election of officers and the transaction of other business.

         Other regular meetings of the Board shall be held without call on such
dates and at such times as may be fixed by the Board. Call and notice of all
regular meetings of the Board are hereby dispensed with.

         Section 7. SPECIAL MEETINGS. Special meetings of the Board for any
purpose or purposes may be called at any time by the Chairman of the Board, the
President, any Vice President, the Secretary or by any two directors.

         Special meetings of the Board shall be held upon four days' written
notice or forty-eight hours' notice given personally or by telephone, telegraph,
telex or other similar means of communication. Any such notice shall be
addressed or delivered to each director at such director's address as it is
shown upon the records of the corporation or as may have been given to the
corporation by the director for purposes of notice or, if such address is not
shown on such records or is not readily ascertainable, at the place in which the
meetings of the directors are regularly held.

         Notice by mail shall be deemed to have been given at the time a written
notice is deposited in the United States mails, postage prepaid. Any other
written notice shall be deemed to have been given at the time it is personally
delivered to the recipient or is delivered to a common carrier for transmission,
or actually transmitted by the person giving the notice by electronic means, to
the recipient. Oral notice shall be deemed to have been given at the time it is
communicated, in person or by telephone or wireless, to the recipient or to a
person at the office of the recipient who the person giving the notice has
reason to believe will promptly communicate it to the recipient.

         Section 8. QUORUM. A majority of the authorized number of directors
constitutes a quorum of the board for the transaction of business, except to
adjourn as provided

                                        8



in Section 11 of this Article. Every act or decision done or made by a majority
of the directors present at a meeting duly held at which a quorum is present
shall be regarded as the act of the Board, unless a greater number be required
by law or by the Articles. A meeting at which a quorum is initially present may
continue to transact business notwithstanding the withdrawal of directors, if
any action taken is approved by at least a majority of the required quorum for
such meeting.

         Section 9. PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE. Members
of the Board may participate in a meeting through use of conference telephone or
similar communications equipment, so long as all members participating in such
meeting can hear one another.

         Section 10. WAIVER OF NOTICE. Notice of a meeting need not be given to
any director who signs a waiver of notice or a consent to holding the meeting or
an approval of the minutes thereof, whether before or after the meeting, or who
attends the meeting without protesting, prior thereto or at its commencement,
the lack of notice to such director. All such waivers, consents and approvals
shall be filed with the corporate records or made a part of the minutes of the
meeting.

         Section 11. ADJOURNMENT. A majority of the directors present, whether
or not a quorum is present, may adjourn any directors' meeting to another time
and place. Notice of the time and place of holding an adjourned meeting need not
be given to absent directors if the time and place be fixed at the meeting
adjourned, except as provided in the next sentence. If the meeting is adjourned
for more than 24 hours, notice of any adjournment to another time or place shall
be given prior to the time of the adjourned meeting to the directors who were
not present at the time of the adjournment.

         Section 12. FEES AND COMPENSATION. and members of committees may
receive such compensation, if any, for their services, and such reimbursement
for expenses, as may be fixed or determined by the Board.

         Section 13. ACTION WITHOUT MEETING. Any action required or permitted to
be taken by the Board may be taken without a meeting if all members of the Board
shall individually or collectively consent in writing to such action. Such
consent or consents shall have the same effect as a unanimous vote of the Board
and shall be filed with the minutes of the proceedings of the Board.

         Section 14. RIGHTS OF INSPECTION. Every director shall have the
absolute right at any reasonable time to inspect and copy all books, records and
documents of every kind and to inspect the physical properties of the
corporation and also of its subsidiary corporations, domestic or foreign. Such
inspection by a director may be made in person or by agent or attorney and
includes the right to copy and obtain extracts.

         Section 15. COMMITTEES. The Board may appoint one or more committees,
each consisting of two or more directors, and delegate to such committees any of
the authority of the Board except with respect to:

                                        9



         (a) The approval of any action for which the General Corporation Law
also requires shareholders' approval or approval of the outstanding shares;

         (b) The filling of vacancies in the Board or on any committee;

         (c) The fixing of compensation of the directors for serving on the
Board or on any committee;

         (d) The amendment or repeal of bylaws or the adoption of new bylaws;

         (e) The amendment or repeal of any resolution of the Board which by its
express term is not so amendable or repealable;

         (f) A distribution to the shareholders of the corporation except at a
rate or in a periodic amount or within a price range determined by the Board; or

         (g) The appointment of other committees of the Board or the members
thereof.

         Any such committee must be designated, and the members or alternate
members thereof appointed, by resolution adopted by a majority of the authorized
number of directors and any such committee may be designated an Executive
Committee or by such other name as the Board shall specify. Alternate members of
a committee may replace any absent member at any meeting of the committee. The
Board shall have the power to prescribe the manner in which proceedings of any
such committee shall be conducted. In the absence of any such prescription, such
committee shall have the power to prescribe the manner in which its proceedings
shall be conducted. Unless the Board or such committee shall otherwise provide,
the regular and special meetings and other actions of any such committee shall
be governed by the provisions of this Article applicable to meetings and actions
of the Board. Minutes shall be kept of each meeting of each committee.

                             ARTICLE IV. Officers.

         Section 1. OFFICERS. The officers of the corporation shall be a
President, a Secretary and a Chief Financial Officer. The corporation may also
have, at the discretion of the Board, a Chairman of the Board, one or more Vice
Presidents, one or more Assistant Secretaries, one or more Assistant Financial
Officers, and such other officers as may be elected or appointed in accordance
with the provisions of Section 3 of this Article.

         Section 2. ELECTION. The officers of the corporation, except such
officers as may be elected or appointed in accordance with the provisions of
Section 3 or Section 5 of this Article, shall be chosen annually by, and shall
serve at the pleasure of, the Board, and shall hold their respective offices
until their resignation, removal, or other disqualification from service, or
until their respective successors shall be elected.

         Section 3. SUBORDINATE OFFICERS. The Board may elect, and may empower
the President to appoint, such other officers as the business of the corporation
may

                                       10



require, each of whom shall hold office for such period, have such authority and
perform such duties as are provided in these Bylaws or as the Board may from
time to time determine.

         Section 4. REMOVAL AND RESIGNATION. Any officer may be removed, either
with or without cause, by the Board at any time or, except in the case of an
officer chosen by the Board, by any officer upon whom such power of removal may
be conferred by the Board. Any such removal shall be without prejudice to the
rights, if any, of the officer under any contract of employment of the officer.

         Any officer may resign at any time by giving written notice to the
corporation, but without prejudice to the rights, if any, of the corporation
under any contract to which the officer is a party. Any such resignation shall
take effect at the date of the receipt of such notice or at any later time
specified therein and, unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective.

         Section 5. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filled in the
manner prescribed in these Bylaws for regular election or appointment to such
office.

         Section 6. CHAIRMAN OF THE BOARD. The Chairman of the Board, if there
shall be such an officer, shall, if present, preside at all meetings of the
Board and exercise and perform such other powers and duties as may be from time
to time assigned by the Board.

         Section 7. PRESIDENT. Subject to such power, if any, as may be given by
the Board to the Chairman of the Board, if there be such an officer, the
President is the general manager and chief executive officer of the corporation
and has, subject to the control of the Board, general supervision, direction and
control of the business and officers of the corporation. The President shall
preside at all meetings of the shareholders and, in the absence of the Chairman
of the Board, or if there be none, at all meetings of the Board. The President
has the general powers and duties of management usually vested in the office of
president and general manager of a corporation and such other powers and duties
as may be prescribed by the Board.

         Section 8. VICE PRESIDENTS. In the absence or disability of the
President, the Vice Presidents in order of their rank as fixed by the Board or,
if not ranked, the Vice President designated by the Board, shall perform all the
duties of the President and, when so acting, shall have all the powers of, and
be subject to all the restrictions upon, the President. The Vice Presidents
shall have such other powers and perform such other duties as from time to time
may be prescribed for them respectively by the Board.

         Section 9. SECRETARY. The Secretary shall keep or cause to be kept, at
the principal executive office and such other place as the Board may order, a
book of minutes of all meetings of shareholders, the Board and its committees,
with the time and place of holding, whether regular or special, and if special,
how authorized, the notice thereof given, the names of those present at Board
and committee meetings, the number of shares present or represented at
shareholders' meetings, and the proceedings thereof. The Secretary shall keep,
or cause to be kept, a copy of the Bylaws of the corporation at the principal
executive office or business office in accordance with Section 213 of the
California General Corporation Law.

                                       11



         The Secretary shall keep, or cause to be kept, at the principal
executive office or at the office of the corporation's transfer agent or
registrar, if one be appointed, a share register, or a duplicate share register,
showing the names of the shareholders and their addresses, the number and
classes of shares held by each, the number and date of certificates issued for
the same, and the number and date of cancellation of every certificate
surrendered for cancellation.

         The Secretary shall give, or cause to be given, notice of all meetings
of the shareholders and of the Board and any committees thereof required by
these Bylaws or by law to be given, shall keep the seal of the corporation in
safe custody, and shall have such other powers and perform such other duties as
may be prescribed by the Board.

         Section 10. CHIEF FINANCIAL OFFICER. The Chief Financial Officer is the
chief financial officer of the corporation and shall keep and maintain, or cause
to be kept and maintained, adequate and correct accounts of the properties and
business transactions of the corporation, and shall send or cause to be sent to
the shareholders of the corporation such financial statements and reports as are
by law or these Bylaws required to be sent to them. The books of account shall
at all times be open to inspection by any director.

         The Chief Financial Officer shall deposit all moneys and other
valuables in the name and to the credit of the corporation with such
depositaries as may be designated by the Board. The Chief Financial Officer
shall disburse the funds of the corporation as may be ordered by the Board,
shall render to the President and the directors, whenever they request it, an
account of all transactions as Chief Financial Officer and of the financial
condition of the corporation, and shall have such other powers and perform such
other duties as may be prescribed by the Board.

                          ARTICLE V. Other Provisions.

         Section 1. INSPECTION OF CORPORATE RECORDS.

         (a) A shareholder or shareholders holding at least five percent in the
aggregate of the outstanding voting shares of the corporation or who hold at
least one percent of such voting shares and have filed a Schedule l4B with the
United States Securities and Exchange Commission relating to the election of
directors of the corporation shall have an absolute right to do either or both
of the following:

             (i)  Inspect and copy the record of shareholders' names and
    addresses and shareholdings during usual business hours upon five business
    days' prior written demand upon the corporation; or

             (ii) Obtain from the transfer agent, if any, for the corporation,
    upon five business days' prior written demand and upon the tender of its
    usual charges for such a list (the amount of which charges shall be stated
    to the shareholder by the transfer agent upon request), a list of the
    shareholders' names and addresses who are entitled to vote for the election
    of directors and their shareholdings, as of the most recent record date for
    which it has been compiled or as of a date specified by the shareholder
    subsequent to the date of demand.

                                       12



         (b) The record of shareholders shall also be open to inspection and
copying by any shareholder or holder of a voting trust certificate at any time
during usual business hours upon written demand on the corporation, for a
purpose reasonably related to such holder's interest as a shareholder or holder
of a voting trust certificate.

         (c) The accounting books and records and minutes of proceedings of the
shareholders and the Board and committees of the Board shall be open to
inspection upon written demand on the corporation of any shareholder or holder
of a voting trust certificate at any reasonable time during usual business
hours, for a purpose reasonably related to such holder's interests as a
shareholder or as a holder of such voting trust certificate.

         (d) Any inspection and copying under this Article may be made in person
or by agent or attorney.

         Section 2. INSPECTION OF BYLAWS. The corporation shall keep in its
principal executive office in the State of California, or if its principal
executive office is not in such State at its principal business office in such
State, the original or a copy of these Bylaws as amended to date, which shall be
open to inspection by shareholders at all reasonable times during office hours.
If the principal executive office of the corporation is located outside the
State of California and the corporation has no principal business office in such
state, it shall upon the written request of any shareholder furnish to such
shareholder a copy of these Bylaws as amended to date.

         Section 3. ENDORSEMENT OF DOCUMENTS; CONTRACTS. Subject to the
provisions of applicable law, any note, mortgage, evidence of indebtedness,
contract, share certificate, conveyance or other instrument in writing and any
assignment or endorsements thereof executed or entered into between the
corporation and any other person, when signed by the Chairman of the Board, the
President or any Vice President and the Secretary, any Assistant Secretary, the
Chief Financial Officer or any Assistant Chief Financial Officer of the
corporation shall be valid and binding on the corporation in the absence of
actual knowledge on the part of the other person that the signing officers had
no authority to execute the same. Any such instruments may be signed by any
other person or persons and in such manner as from time to time shall be
determined by the Board, and, unless so authorized by the Board, no officer,
agent or employee shall have any power or authority to bind the corporation by
any contract or engagement or to pledge its credit or to render it liable for
any purpose or amount.

         Section 4. CERTIFICATES OF STOCK. Every holder of shares of the
corporation shall be entitled to have a certificate signed in the name of the
corporation by the Chairman of the Board, the President or a Vice President and
by the Chief Financial Officer or an Assistant Chief Financial Officer or the
Secretary or an Assistant Secretary, certifying the number of shares and the
class or series of shares owned by the shareholder. Any or all of the signatures
on the certificate may be facsimile. If any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the corporation with the same effect
as if such person were an officer, transfer agent or registrar at the date of
issue.

                                       13



         Certificates for shares may be issued prior to full payment under such
restrictions and for such purposes as the Board may provide; provided, however,
that on any certificate issued to represent any partly paid shares, the total
amount of the consideration to be paid therefor and the amount paid thereon
shall be stated.

         Except as provided in this Section, no new certificate for shares shall
be issued in lieu of an old one unless the latter is surrendered and cancelled
at the same time. The Board may, however, if any certificate for shares is
alleged to have been lost, stolen or destroyed, authorize the issuance of a new
certificate in lieu thereof, and the corporation may require that the
corporation be given a bond or other adequate security sufficient to indemnify
it against any claim that may be made against it (including expense or
liability) on account of the alleged loss, theft or destruction of such
certificate or the issuance of such new certificate.

         Section 5. REPRESENTATION OF SHARES OF OTHER CORPORATIONS. The
President or any other officer or officers authorized by the Board or the
President are each authorized to vote, represent and exercise on behalf of the
corporation all rights incident to any and all shares of any other corporation
or corporations standing in the name of the corporation. The authority herein
granted may be exercised either by any such officer in person or by any other
person authorized so to do by proxy or power of attorney duly executed by said
officer.

         Section 6. STOCK PURCHASE PLANS. The corporation may adopt and carry
out a stock purchase plan or agreement or stock option plan or agreement
providing for the issue and sale for such consideration as may be fixed of its
unissued shares, or of issued shares acquired or to be acquired, to one or more
of the employees or directors of the corporation or of a subsidiary or to a
trustee on their behalf and for the payment for such shares in installments or
at one time, and may provide for aiding any such persons in paying for such
shares by compensation for services rendered, promissory notes or otherwise.

         Any such stock purchase plan or agreement or stock option plan or
agreement may include, among other features, the fixing of eligibility for
participation therein, the class and price of shares to be issued or sold under
the plan or agreement, the number of shares which may be subscribed for, the
method of payment therefor, the reservation of title until full payment
therefor, the effect of the termination of employment, an option or obligation
on the part of the corporation to repurchase the shares upon termination of
employment, restrictions upon transfer of the shares, the time limits of and
termination of the plan, and any other matters, not in violation of applicable
law, and may be included in the plan as approved or authorized by the Board or
any committee of the Board.

         Section 7. CONSTRUCTION AND DEFINITIONS. Unless the context otherwise
requires, the general provisions, rules of construction and definitions
contained in the General Provisions of the California Corporations Code and in
the California General Corporation Law shall govern the construction of these
Bylaws.

         Section 8. AMENDMENTS. These Bylaws may be amended or repealed either
by approval of the outstanding shares (as defined in Section 152 of the
California General Corporation Law) or by the approval of the Board; provided,
however, that after the issuance of

                                       14



shares, a bylaw specifying or changing a fixed number of directors or the
maximum or minimum number or changing from a fixed to a variable number of
directors or vice versa may only be adopted by approval of the outstanding
shares, and a bylaw reducing the fixed number or the minimum number of directors
to a number less than five shall be subject to the provisions of Section 212(a)
of the California General Corporation Law.

         Section 9. ANNUAL REPORT TO SHAREHOLDERS. The annual report to
shareholders referred to in Section 1501 of the California General Corporation
Law is expressly waived, but nothing herein shall be interpreted as prohibiting
the Board from issuing annual or other periodic reports to shareholders.

                          ARTICLE VI. Indemnification.

         Section 1. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Each person who
was or is a party or is threatened to be made a party to or is involved in any
threatened, pending or completed action, suit or proceeding, whether brought in
the name of the corporation or otherwise and whether of a civil, criminal,
administrative or investigative nature (hereinafter a "proceeding"), by reason
of the fact that he or she, or a person of whom he or she is the legal
representative, is or was a director or officer of the corporation or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is an alleged action or inaction in an official
capacity or in any other capacity while serving as a director or officer, shall,
subject to the terms of any agreement between the corporation and such person,
be indemnified and held harmless by the corporation to the fullest extent
permissible under California law and the corporation's Articles of
Incorporation, against all costs, charges, expenses, liabilities and losses
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement) reasonably incurred or suffered by
such person in connection therewith, and such indemnification shall continue as
to a person who has ceased to be a director or officer and shall inure to the
benefit of his or her heirs, executors and administrators; provided, however,
that the corporation shall indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such person only if
such proceeding (or part thereof) was authorized by the Board of Directors of
the corporation and provided, further, that no such person shall be indemnified
(i) except to the extent that the aggregate of losses to be indemnified exceeds
the amount of such losses for which the director or officer is paid pursuant to
any directors and officers liability insurance policy maintained by the
corporation; (ii) on account of any suit in which judgment is rendered against
such person for an accounting of profits made from the purchase or sale by such
person of securities of the corporation pursuant to the provisions of Section
16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar
provisions of any federal, state or local statutory law; (iii) for expenses,
judgments, funds, penalties or ERISA excise taxes resulting from such person's
conduct which is finally adjudged to have been willful misconduct, knowingly
fraudulent or deliberately dishonest; (iv) if a court of competent jurisdiction
finally determines that any indemnification hereunder is unlawful; (v) for acts
or omissions involving intentional misconduct or knowing and culpable violation
of law; (vi) for acts or omissions that the director or officer believes to be
contrary to the best interests of the corporation or its shareholders or that
involve the absence of good faith on the part of the director or officer; (vii)
for any transaction

                                       15



from which the director or officer derived an improper personal benefit; (viii)
for acts or omissions that show a reckless disregard for the director's or
officer's duty to the corporation or its shareholders in circumstances in which
the director or officer was aware, or should have been aware, in the ordinary
course of performing his duties, of a risk of serious injury to the corporation
or its shareholders; (ix) for acts or omissions that constitute an unexcused
pattern of inattention that amounts to an abdication of the director's or
officer's duties to the corporation or its shareholders; (x) for costs, charges,
expenses, liabilities and losses arising under Section 310 or 316 of the General
Corporation Law of California (the "Law"); and (xi) as to circumstances in which
indemnity is expressly prohibited by Section 317 of the Law. The right to
indemnification conferred in this Article shall be a contract right and shall
include the right to be paid by the corporation expenses incurred in defending
any proceeding in advance of its final disposition; provided, however, that if
the Law requires the payment of such expenses incurred by a director or officer
in his or her capacity as a director or officer (and not in any other capacity
in which service was or is rendered by such person while a director or officer,
including, without limitation, service to an employee benefit plan) in advance
of the final disposition of a proceeding, shall be made only upon delivery to
the corporation of an undertaking, by or on behalf of such director or officer,
to repay all amounts to the corporation unless it shall be determined ultimately
that such person is not entitled to be indemnified. No indemnity shall be
provided under this provision for any liability arising out of any act or
omission committed or occurring prior to the date an amendment containing this
provision is filed with the Secretary of State of California.

         Section 2. INDEMNIFICATION OF AGENTS. A person who was or is a party or
is threatened to be made a party to or is involved in any proceeding by reason
of the fact that he or she is or was an employee or agent of the corporation or
is or was serving at the request of the corporation as an employee or agent of
another enterprise, including service with respect to employee benefit plans,
whether the basis of such action is an alleged action or inaction in an official
capacity or in any other capacity while serving as an employee or agent, may,
subject to the terms of any agreement between the corporation and such person,
be indemnified and held harmless by the corporation to the fullest extent
permitted by California law and the corporation's Articles of Incorporation,
against all costs, charges, expenses, liabilities and losses (including
attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts
paid or to be paid in settlement) reasonably incurred or suffered by such person
in connection therewith. The immediately preceding sentence is not intended to
be and shall not be considered to confer a contract right on any employee or
agent of the corporation.

         Section 3. RIGHT OF DIRECTORS AND OFFICERS TO BRING SUIT. If a claim
under Section 1 of this Article is not paid in full by the corporation within 30
days after a written claim has been received by the corporation, the claimant
may at any time thereafter bring suit against the corporation to recover the
unpaid amount of the claim and, if successful in whole or in part, the claimant
shall also be entitled to be paid the expense of prosecuting such claim. It
shall be a defense to any such action (other than an action brought to enforce a
claim for expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any is required, has been
tendered to the corporation) that the claimant has failed to meet a standard of
conduct, if any, required to make it permissible under California law for the
corporation to indemnify the claimant for the amount claimed. Neither the
failure of the corporation (including its Board of Directors, independent

                                       16



legal counsel or its shareholders) to have made a determination prior to the
commencement of such action and indemnification of the claimant is permissible
in the circumstances because he or she has met such standard of conduct, nor an
actual determination by the corporation (including its Board of Directors,
independent legal counsel or its shareholders) that the claimant has not met
such standard of conduct, shall be a defense to the action or create a
presumption that the claimant has failed to meet such standard of conduct.

         Section 4. SUCCESSFUL DEFENSE. Notwithstanding any other provision of
this Article, to the extent that a director or officer has been successful on
the merits or otherwise (including the dismissal of an action without prejudice
or the settlement of a proceeding without admission of liability) in defense of
any proceeding referred to in Section 1 or, in defense of any claim, issue or
matter therein, he shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection therewith.

         Section 5. NON-EXCLUSIVITY OF RIGHTS. The right to indemnification
provided by this Article shall not be exclusive of any other right which any
person may have or hereafter acquire under any statute, bylaw, agreement, vote
of shareholders or disinterested directors or otherwise.

         Section 6. INSURANCE. The corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
corporation or another corporation, partnership, joint venture, trust or other
enterprise against any such expense, liability or loss, whether or not the
corporation would have the power to indemnify such person against such expense,
liability or loss under California law.

         Section 7. EXPENSES AS A WITNESS. To the extent that any director,
officer, employee or agent of the corporation is by reason of such position, or
a position with another entity at the request of the corporation, a witness in
any action, suit or proceeding, he may be indemnified against all costs and
expenses actually and reasonably incurred by him or her or on his or her behalf
in connection therewith.

         Section 8. INDEMNITY AGREEMENTS. The corporation may enter into
agreements with any director, officer, employee or agent of the corporation
providing for indemnification to the fullest extent permissible under California
law and the corporation's Articles of Incorporation.

                                       17

EX-3.22

                                                                    Exhibit 3.22

                            ARTICLES OF INCORPORATION

                                       OF

                              KVVV TELEVISION, INC.

                                      Name

            One: The name of the corporation is KVVV Television, Inc.

                                     Purpose

            Two: The purpose of the corporation is to engage in any lawful act
or activity for which a corporation may be organized under the General
Corporation Law of California other than the banking business, the trust company
business or the practice of a profession permitted to be incorporated by the
California Corporations Code.

                                Agent for Service

            Three: The name and address of the corporation's initial agent for
service of process are:

                               Lenard D. Liberman
                            5724 Hollywood Boulevard
                           Hollywood, California 90028

                                Authorized Shares

            Four: The total number of shares of all classes of stock which the
corporation shall have the authority to issue is one thousand (1,000) shares of
Common Stock, par value $.01 per share.

                      Limitation on Liability of Directors
                        and Authority to Indemnify Agents

            Five: The liability of directors of the corporation for monetary
damages shall be eliminated to the fullest extent permissible under California
law.

            The corporation is authorized to provide indemnification of agents
(as defined in Section 317 of the California Corporations Code) for breach of
duty to the corporation and its shareholders through bylaw provisions,
agreements with agents, vote of shareholders or disinterested directors, or
otherwise, in excess of the indemnification otherwise permitted by Section 317
of the California Corporations Code, subject only to the applicable limits set
forth in Section 204 of the California Corporations Code.



            The undersigned declares that the undersigned has executed these
Articles of Incorporation and that this instrument is the act and deed of the
undersigned.

DATED: August 31, 1998                                    /s/ Regina Braman
                                                       ------------------------
                                                       Regina Braman

                                       2



                            CERTIFICATE OF AMENDMENT
                                       OF
                            ARTICLES OF INCORPORATION
                                       OF
                             KVVV TELEVISION, INC.,
                            a California corporation

         The undersigned hereby certifies that:

         1. She is the sole Incorporator of KVVV Television, Inc., a California
            corporation.

         2. Article One of the Articles of Incorporation of this corporation is
            amended to read as follows:

               "One: The name of the corporation is Island Studios, Inc."

         3. No directors were named in the original Articles of Incorporation
            and none have been elected.

         4. No shares have been issued.

         The undersigned further declares under penalty of perjury under the
laws of the State of California that the matters set forth in this Certificate
of Amendment are true of her own knowledge.


Dated: December 23, 1998



                                                 /s/ Regina Braman
                                                 -------------------------------
                                                 Regina Braman
                                                 Incorporator



                            CERTIFICATE OF AMENDMENT
                                       OF
                            ARTICLES OF INCORPORATION
                                       OF
                              ISLAND STUDIOS, INC.,
                            a California corporation

        Jose Liberman and Lenard D. Liberman certify that:

        1.   They are the duly elected and acting President and Secretary,
respectively, of Island Studios, Inc., a California corporation.

        2.   Article One of the Articles of Incorporation of the corporation
shall be amended in its entirety to read as follows:

             "One: The name of the corporation is Empire Burbank Studios, Inc."

        3.   The foregoing amendment has been approved by the Board of Directors
of the corporation.

        4.   The foregoing amendment was approved by the required vote of the
shareholders of the corporation in accordance with Section 902 of the California
General Corporation Law. The total number of outstanding shares of the
corporation is 100. The number of shares voting in favor of the amendment
equaled 100% of the outstanding shares.

        IN WITNESS WHEREOF, the undersigned executed this Certificate on March
10, 1999.


                                              /s/ Jose Liberman
                                           ---------------------------------
                                           Jose Liberman
                                           President


                                              /s/ Lenard D. Liberman
                                           ----------------------------------
                                           Lenard D. Liberman
                                           Secretary



        The undersigned, Jose Liberman and Lenard D. Liberman, the President and
Secretary, respectively, of Island Studios, Inc., a California corporation, each
declares under penalty of perjury that the matters set out in the foregoing
Certificate of Amendment are true of his own knowledge.

        Executed at Hollywood, California on March 10, 1999.



                                              /s/ Jose Liberman
                                           ---------------------------------
                                           Jose Liberman
                                           President


                                              /s/ Lenard D. Liberman
                                           ----------------------------------
                                           Lenard D. Liberman
                                           Secretary

EX-3.23

                                                                    Exhibit 3.23

                                     BYLAWS

                                       of

                              ISLAND STUDIOS, INC.,
                            a California corporation



                                      INDEX



                                                                                      Page
                                                                                      ----
                                                                                   
ARTICLE I - Offices.

         Section 1.    PRINCIPAL EXECUTIVE OFFICE ..............................       1
         Section 2.    OTHER OFFICES ...........................................       1

ARTICLE II - Shareholders.

         Section 1.    PLACE OF MEETINGS .......................................       1
         Section 2.    ANNUAL MEETINGS .........................................       1
         Section 3.    SPECIAL MEETINGS ........................................       1
         Section 4.    NOTICE OF ANNUAL OR SPECIAL MEETINGS ....................       1
         Section 5.    QUORUM ..................................................       2
         Section 6.    ADJOURNED MEETINGS AND NOTICE THEREOF ...................       2
         Section 7.    VOTING ..................................................       2
         Section 8.    RECORD DATE .............................................       4
         Section 9.    CONSENT OF ABSENTEES ....................................       5
         Section 10.   ACTION WITHOUT MEETING ..................................       5
         Section 11.   PROXIES .................................................       5
         Section 12.   INSPECTORS OF ELECTION ..................................       6
         Section 13.   CONDUCT OF MEETING ......................................       6

ARTICLE III - Directors.

         Section 1.    POWERS ..................................................       6
         Section 2.    NUMBER OF DIRECTORS .....................................       7
         Section 3.    ELECTION AND TERM OF OFFICE .............................       7
         Section 4.    VACANCIES ...............................................       7
         Section 5.    PLACE OF MEETING ........................................       8
         Section 6.    REGULAR MEETINGS ........................................       8
         Section 7.    SPECIAL MEETINGS ........................................       8
         Section 8.    QUORUM ..................................................       8
         Section 9.    PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE .......       9
         Section 10.   WAIVER OF NOTICE ........................................       9
         Section 11.   ADJOURNMENT .............................................       9
         Section 12.   FEES AND COMPENSATION ...................................       9
         Section 13.   ACTION WITHOUT MEETING ..................................       9
         Section 14.   RIGHTS OF INSPECTION ....................................       9
         Section 15.   COMMITTEES ..............................................       9

ARTICLE IV - Officers.

         Section 1.    OFFICERS ................................................      10
         Section 2.    ELECTION ................................................      10
         Section 3.    SUBORDINATE OFFICERS ....................................      10


                                       i



                                                                                   
         Section 4.    REMOVAL AND RESIGNATION .................................      10
         Section 5.    VACANCIES ...............................................      11
         Section 6.    CHAIRMAN OF THE BOARD ...................................      11
         Section 7.    PRESIDENT ...............................................      11
         Section 8.    VICE PRESIDENTS .........................................      11
         Section 9.    SECRETARY ...............................................      11
         Section 10.   CHIEF FINANCIAL OFFICER                                        12

ARTICLE V - Other Provisions.

         Section 1.    INSPECTION OF CORPORATE RECORDS .........................      12
         Section 2.    INSPECTION OF BYLAWS ....................................      13
         Section 3.    ENDORSEMENT OF DOCUMENTS; CONTRACTS .....................      13
         Section 4.    CERTIFICATES OF STOCK ...................................      13
         Section 5.    REPRESENTATION OF SHARES OF OTHER CORPORATIONS ..........      14
         Section 6.    STOCK PURCHASE PLANS ....................................      14
         Section 7.    CONSTRUCTION AND DEFINITIONS ............................      14
         Section 8.    AMENDMENTS ..............................................      14
         Section 9.    ANNUAL REPORT TO SHAREHOLDERS ...........................      15

ARTICLE VI - Indemnification.

         Section 1.    INDEMNIFICATION OF DIRECTORS AND OFFICERS ...............      15
         Section 2.    INDEMNIFICATION OF AGENTS ...............................      16
         Section 3.    RIGHT OF DIRECTORS AND OFFICERS TO BRING SUIT ...........      16
         Section 4.    SUCCESSFUL DEFENSE ......................................      17
         Section 5.    NON-EXCLUSIVITY OF RIGHTS ...............................      17
         Section 6.    INSURANCE ...............................................      17
         Section 7.    EXPENSES AS A WITNESS ...................................      17
         Section 8.    INDEMNITY AGREEMENTS ....................................      17



                                       ii



                                     BYLAWS

                           for the regulation, except
                       as otherwise provided by statute or
                         its Articles of Incorporation,

                                       of

                              ISLAND STUDIOS, INC.,
                            a California corporation

                              ARTICLE I. Offices.

           Section 1.  PRINCIPAL EXECUTIVE OFFICE. The corporation's principal
executive office shall be fixed and located at such place as the Board of
Directors (herein called the "Board") shall determine. The Board is granted full
power and authority to change said principal executive office from one location
to another.

           Section 2.  OTHER OFFICES. Branch or subordinate offices may be
established at any time by the Board at any place or places.

                           ARTICLE II. Shareholders.

           Section 1.  PLACE OF MEETINGS. Meetings of shareholders shall be held
either at the principal executive office of the corporation or at any other
place within or without the State of California which may be designated either
by the Board or by the written consent of all persons entitled to vote thereat,
given either before or after the meeting and filed with the Secretary.

           Section 2.  ANNUAL MEETINGS. The annual meetings of shareholders
shall be held on such date and at such time as may be fixed by the Board.

           Section 3.  SPECIAL MEETINGS. Special meetings of the shareholders
may be called at any time by the Board, the Chairman of the Board, the
President, or by the holders of shares entitled to cast not less than ten
percent of the votes at such meeting. Upon request in writing to the Chairman of
the Board, the President, any Vice President or the Secretary by any person
(other than the Board) entitled to call a special meeting of shareholders, the
officer forthwith shall cause notice to be given to the shareholders entitled to
vote that a meeting will be held at a time requested by the person or persons
calling the meeting, not less than thirty-five nor more than sixty days after
the receipt of the request. If the notice is not given within twenty days after
receipt of the request, the persons entitled to call the meeting may give the
notice.

           Section 4.  NOTICE OF ANNUAL OR SPECIAL MEETINGS. Written notice of
each annual or special meeting of shareholders shall be given not less than ten
nor more than sixty days before the date of the meeting to each shareholder
entitled to vote thereat. Such notice shall state the place, date and hour of
the meeting and (i) in the case of a special meeting,



the general nature of the business to be transacted, and no other business may
be transacted, or (ii) in the case of the annual meeting, those matters which
the Board, at the time of the mailing of the notice, intends to present for
action by the shareholders, but, subject to the provisions of applicable law,
any proper matter may be presented at the meeting for such action. The notice of
any meeting at which directors are to be elected shall include the names of
nominees intended at the time of the notice to be presented by management for
election.

           Notice of a shareholders' meeting shall be given either personally or
by mail or by other means of written communication, addressed to the shareholder
at the address of such shareholder appearing on the books of the corporation or
given by the shareholder to the corporation for the purpose of notice, or, if no
such address appears or is given, at the place where the principal executive
office of the corporation is located or by publication at least once in a
newspaper of general circulation in the county in which the principal executive
office is located. Notice by mail shall be deemed to have been given at the time
a written notice is deposited in the United States mails, postage prepaid. Any
other written notice shall be deemed to have been given at the time it is
personally delivered to the recipient or is delivered to a common carrier for
transmission, or actually transmitted by the person giving the notice by
electronic means, to the recipient.

           Section 5.  QUORUM. A majority of the shares entitled to vote,
represented in person or by proxy, shall constitute a quorum at any meeting of
shareholders. If a quorum is present, the affirmative vote of a majority of the
shares represented and voting at the meeting (which shares voting affirmatively
also constitute at least a majority of the required quorum) shall be the act of
the shareholders, unless the vote of a greater number or voting by classes is
required by law or by the Articles, except as provided in the following
sentence. The shareholders present at a duly called or held meeting at which a
quorum is present may continue to do business until adjournment, notwithstanding
the withdrawal of enough shareholders to leave less than a quorum, if any action
taken (other than adjournment) is approved by at least a majority of the shares
required to constitute a quorum.

           Section 6.  ADJOURNED MEETINGS AND NOTICE THEREOF. Any Shareholders'
meeting, whether or not a quorum is present, may be adjourned from time to time
by the vote of a majority of the shares represented either in person or by
proxy, but in the absence of a quorum (except as provided in Section 5 of this
Article) no other business may be transacted at such meeting.

           It shall not be necessary to give any notice of the time and place of
the adjourned meeting or of the business to be transacted thereat, other than by
announcement at the meeting at which such adjournment is taken; provided,
however, when any shareholders' meeting is adjourned for more than 45 days or,
if after adjournment a new record date is fixed for the adjourned meeting,
notice of the adjourned meeting shall be given as in the case of an original
meeting.

           Section 7.  VOTING. The shareholders entitled to notice of any
meeting or to vote at any such meeting shall be only persons in whose name
shares stand on the stock records of the corporation on the record date
determined in accordance with Section 8 of this Article.

                                       2



           Subject to the following sentence and to the provisions of Section
708 of the California General Corporation Law, every shareholder entitled to
vote at any election of directors may cumulate such shareholder's votes and give
one candidate a number of votes equal to the number of directors to be elected
multiplied by the number of votes to which the shareholder's shares are
entitled, or distribute the shareholder's votes on the same principle among as
many candidates as the shareholder thinks fit. No shareholder shall be entitled
to cumulate votes for any candidate or candidates pursuant to the preceding
sentence unless such candidate or candidates' names have been placed in
nomination prior to the voting and the shareholder has given notice at the
meeting prior to the voting of the shareholder's intention to cumulate the
shareholder's votes. If any one shareholder has given such notice, all
shareholders may cumulate their votes for candidates in nomination.

           Elections need not be by ballot, provided, however, that all
elections for directors must be by ballot upon demand made by a shareholder at
the meeting and before the voting begins.

           In any election of directors, the candidates receiving the highest
number of votes of the shares entitled to be voted for them up to the number of
directors to be elected by such shares are elected.

           Voting shall in all cases be subject to the provisions of Chapter 7
of the California General Corporation Law, and to the following provisions:

           (a)   Subject to clause (g), shares held by an administrator,
executor, guardian, conservator or custodian may be voted by such holder either
in person or by proxy, without a transfer of such shares into the holder's name;
and shares standing in the name of a trustee may be voted by the trustee, either
in person or by proxy, but no trustee shall be entitled to vote shares held by
such trustee without a transfer of such shares into the trustee's name.

           (b)   Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into the receiver's name if authority
to do so is contained in the order of the court by which such receiver was
appointed.

           (c)   Subject to the provisions of Section 705 of the California
General Corporation Law and except where otherwise agreed in writing between the
parties, a shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.

           (d)   Shares standing in the name of a minor may be voted and the
corporation may treat all rights incident thereto as exercisable by the minor,
in person or by proxy, whether or not the corporation has notice, actual or
constructive, of the nonage, unless a guardian of the minor's property has been
appointed and written notice of such appointment given to the corporation.

           (e)   Shares standing in the name of another corporation, domestic or
foreign, may be voted by such officer, agent or proxyholder as the bylaws of
such other corporation may

                                       3



prescribe or, in the absence of such provision, as the Board of Directors of
such other corporation may determine or, in the absence of such determination,
by the chairman of the board, president or any vice president of such other
corporation, or by any other person authorized to do so by the chairman of the
board, president or any vice president of such other corporation. Shares which
are purported to be voted or any proxy purported to be executed in the name of a
corporation (whether or not any title of the person signing is indicated) shall
be presumed to be voted or the proxy executed in accordance with the provisions
of this clause, unless the contrary is shown.

           (f)   Shares of the corporation owned by any subsidiary shall not be
entitled to vote on any matter.

           (g)   Shares held by the corporation in a fiduciary capacity, and
shares of the issuing corporation held in a fiduciary capacity by any
subsidiary, shall not be entitled to vote on any matter, except to the extent
that the settlor or beneficial owner possesses and exercises a right to vote or
to give the corporation binding instructions as to how to vote such shares.

           (h)   If shares stand of record in the names of two or more persons,
whether fiduciaries, members of a partnership, joint tenants, tenants in common,
husband and wife as community property, tenants by the entirety, voting
trustees, persons entitled to vote under a shareholder voting agreement or
otherwise, or if two or more persons (including proxyholders) have the same
fiduciary relationship respecting the same shares, unless the secretary of the
corporation is given written notice to the contrary and is furnished with a copy
of the instrument or order appointing them or creating the relationship wherein
it is so provided, their acts with respect to voting shall have the following
effect:

                 (i)   If only one votes, such act binds all;

                 (ii)  If more than one vote, the act of the majority so voting
         binds all;

                 (iii) If more than one vote, but the vote is evenly split on
         any particular matter, each faction may vote the securities in question
         proportionately.

If the instrument so filed or the registration of the shares shows that any such
tenancy is held in unequal interests, a majority or even split for the purpose
of this section shall be a majority or even split in interest.

           Section 8.  RECORD DATE. The Board may fix, in advance, a record date
for the determination of the shareholders entitled to notice of any meeting or
to vote or entitled to receive payment of any dividend or other distribution, or
any allotment of rights, or to exercise rights in respect of any other lawful
action. The record date so fixed shall be not more than 60 days nor less than 10
days prior to the date of the meeting nor more than 60 days prior to any other
action. When a record date is so fixed, only shareholders of record on that date
are entitled to notice of and to vote at the meeting or to receive the dividend,
distribution, or allotment of rights, or to exercise the rights, as the case may
be, notwithstanding any transfer of shares on the books of the corporation after
the record date. A determination of shareholders of record entitled to notice of
or to vote at a meeting of shareholders shall apply to any adjournment of the
meeting unless the Board fixes a new record date for the adjourned meeting. The
Board shall fix a new record date if the meeting is adjourned for more than
forty-five days.

                                       4



           If no record date is fixed by the Board, the record date for
determining shareholders entitled to notice of or to vote at a meeting of
shareholders shall be at the close of business on the business day next
preceding the day on which notice is given or, if notice is waived, at the close
of business on the business day next preceding the day on which the meeting is
held. The record date for determining shareholders for any purpose other than
set forth in this Section 8 or Section 10 of this Article shall be at the close
of business on the day on which the Board adopts the resolution relating
thereto, or the sixtieth day prior to the date of such other action, whichever
is later.

           Section 9.  CONSENT OF ABSENTEES. The transactions of any meeting of
shareholders, however called and noticed, and wherever held, are as valid as
though had at a meeting duly held after regular call and notice, if a quorum is
present either in person or by proxy, and if, either before or after the
meeting, each of the persons entitled to vote, not present in person or by
proxy, signs a written waiver of notice, or a consent to the holding of the
meeting or an approval of the minutes thereof. All such waivers, consents or
approvals shall be filed with the corporate records or made a part of the
minutes of the meeting. Attendance of a person at a meeting shall constitute a
waiver of notice of and presence at such meeting, except when the person
objects, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened and except that
attendance at a meeting is not a waiver of any right to object to the
consideration of matters required by the California General Corporation Law to
be included in the notice but not so included, if such objection is expressly
made at the meeting. Neither the business to be transacted at nor the purpose of
any regular or special meeting of shareholders need be specified in any written
waiver of notice, consent to the holding of the meeting or approval of the
minutes thereof, except as provided in Section 601(f) of the California General
Corporation Law.

           Section 10. ACTION WITHOUT MEETING. Subject to Section 603 of the
California General Corporation Law, any action which, under any provision of the
California General Corporation Law, may be taken at any annual or special
meeting of shareholders, may be taken without a meeting and without prior notice
if a consent in writing, setting forth the action so taken, shall be signed by
the holders of outstanding shares having not less than the minimum number of
votes that would be necessary to authorize or take such action at a meeting at
which all shares entitled to vote thereon were present and voted. Unless a
record date for voting purposes be fixed as provided in Section 8 of this
Article, the record date for determining shareholders entitled to give consent
pursuant to this Section 10, when no prior action by the Board has been taken,
shall be the day on which the first written consent is given.

           Section 11. PROXIES. Every person entitled to vote shares has the
right to do so either in person or by one or more persons authorized by a
written proxy executed by such shareholder and filed with the Secretary. Any
proxy duly executed is not revoked and continues in full force and effect until
revoked by the person executing it prior to the vote pursuant thereto. Such
revocation may be effected either, (i) by a writing delivered to the Secretary
of the Corporation stating that the proxy is revoked, (ii) by a subsequent proxy
executed by the person executing the prior proxy and presented to the meeting,
or (iii) by attendance at the meeting and voting in person by the person
executing the proxy; provided, however, that no proxy shall be valid after the
expiration of eleven months from the date of its execution unless otherwise
provided in the proxy.

                                        5



           Section 12. INSPECTORS OF ELECTION. In advance of any meeting of
shareholders, the Board may appoint inspectors of election to act at such
meeting and any adjournment thereof. If inspectors of election be not so
appointed, or if any persons so appointed fail to appear or refuse to act, the
chairman of any such meeting may, and on the request of any shareholder or
shareholder's proxy shall, make such appointment at the meeting. The number of
inspectors shall be either one or three. If appointed at a meeting on the
request of one or more shareholders or proxies, the majority of shares present
shall determine whether one or three inspectors are to be appointed.

           The duties of such inspectors shall be as prescribed by Section
707(b) of the California General Corporation Law and shall include: determining
the number of shares outstanding and the voting power of each; determining the
shares represented at the meeting; determining the existence of a quorum;
determining the authenticity, validity and effect of proxies; receiving votes,
ballots or consents; hearing and determining all challenges and questions in any
way arising in connection with the right to vote; counting and tabulating all
votes or consents; determining when the polls shall close; determining the
result; and doing such acts as may be proper to conduct the election or vote
with fairness to all shareholders. If there are three inspectors of election,
the decision, act or certificate of a majority is effective in all respects as
the decision, act or certificate of all.

           Section 13. CONDUCT OF MEETING. The President shall preside as
chairman at all meetings of the shareholders. The chairman shall conduct each
such meeting in a businesslike and fair manner, but shall not be obligated to
follow any technical, formal or parliamentary rules or principles of procedure.
The chairman's rulings on procedural matters shall be conclusive and binding on
all shareholders, unless at the time of a ruling a request for a vote is made to
the shareholders holding shares entitled to vote and which are represented in
person or by proxy at the meeting, in which case the decision of a majority of
such shares shall be conclusive and binding on all shareholders. Without
limiting the generality of the foregoing, the chairman shall have all of the
powers usually vested in the chairman of a meeting of shareholders.

                            ARTICLE III. Directors.

           Section 1. POWERS. Subject to limitations of the Articles, of these
Bylaws and of the California General Corporation Law relating to action required
to be approved by the shareholders or by the outstanding shares, the business
and affairs of the corporation shall be managed and all corporate powers shall
be exercised by or under the direction of the Board. The Board may delegate the
management of the day-to-day operation of the business of the corporation to a
management company or other person provided that the business and affairs of the
corporation shall be managed and all corporate powers shall be exercised under
the ultimate direction of the Board. Without prejudice to such general powers,
but subject to the same limitations, it is hereby expressly declared that the
Board shall have the following powers in addition to the other powers enumerated
in these Bylaws:

           (a)   To select and remove all the other officers, agents and
employees of the corporation, prescribe the powers and duties for them as may
not be inconsistent with law, the

                                        6



Articles or these Bylaws, fix their compensation and require from them security
for faithful service.

           (b)   To conduct, manage and control the affairs and business of the
corporation and to make such rules and regulations therefor not inconsistent
with law, the Articles or these Bylaws, as they may deem best.

           (c)   To adopt, make and use a corporate seal, and to prescribe the
forms of certificates of stock, and to alter the form of such seal and of such
certificates from time to time as they may deem best.

           (d)   To authorize the issuance of shares of stock of the corporation
from time to time, upon such terms and for such consideration as may be lawful.

           (e)   To borrow money and incur indebtedness for the purposes of the
corporation, and to cause to be executed and delivered therefor, in the
corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages,
pledges, hypothecations or other evidences of debt and securities therefor.

           Section 2.  NUMBER OF DIRECTORS. The authorized number of directors
shall be one (1) until changed by amendment of the Articles or by a Bylaw duly
adopted by the shareholders amending this Section 2.

           Section 3.  ELECTION AND TERM OF OFFICE. The directors shall be
elected at each annual meeting of the shareholders, but if any such annual
meeting is not held or the directors are not elected thereat, the directors may
be elected at any special meeting of shareholders held for that purpose. Each
director shall hold office until the next annual meeting and until a successor
has been elected and qualified.

           Section 4.  VACANCIES. Any director may resign effective upon giving
written notice to the Chairman of the Board, the President, the Secretary or the
Board, unless the notice specifies a later time for the effectiveness of such
resignation. If the resignation is effective at a future time, a successor may
be elected to take office when the resignation becomes effective.

           Vacancies in the Board, except those existing as a result of a
removal of a director, may be filled by a majority of the remaining directors,
though less than a quorum, or by a sole remaining director, and each director so
elected shall hold office until the next annual meeting and until such
director's successor has been elected and qualified.

           A vacancy or vacancies in the Board shall be deemed to exist in case
of the death, resignation or removal of any director, or if the authorized
number of directors be increased, or if the shareholders fail, at any annual or
special meeting of shareholders at which any director or directors are elected,
to elect the full authorized number of directors to be voted for at that
meeting.

           The Board may declare vacant the office of a director who has been
declared of unsound mind by an order of court or convicted of a felony.

                                        7



           The shareholders may elect a director or directors at any time to
fill any vacancy or vacancies not filled by the directors. Any such election by
written consent other than to fill a vacancy created by removal requires the
consent of a majority of the outstanding shares entitled to vote. Any such
election by written consent to fill a vacancy created by removal requires
unanimous consent.

           No reduction of the authorized number of directors shall have the
effect of removing any director prior to the expiration of the director's term
of office.

           Section 5.  PLACE OF MEETING. Regular or special meetings of the
Board shall be held at any place within or without the State of California which
has been designated from time to time by the Board. In the absence of such
designation, regular meetings shall be held at the principal executive office of
the corporation.

           Section 6.  REGULAR MEETINGS. Immediately following each annual
meeting of shareholders the Board shall hold a regular meeting for the purpose
of organization, election of officers and the transaction of other business.

           Other regular meetings of the Board shall be held without call on
such dates and at such times as may be fixed by the Board. Call and notice of
all regular meetings of the Board are hereby dispensed with.

           Section 7.  SPECIAL MEETINGS. Special meetings of the Board for any
purpose or purposes may be called at any time by the Chairman of the Board, the
President, any Vice President, the Secretary or by any two directors.

           Special meetings of the Board shall be held upon four days' written
notice or forty-eight hours' notice given personally or by telephone, telegraph,
telex or other similar means of communication. Any such notice shall be
addressed or delivered to each director at such director's address as it is
shown upon the records of the corporation or as may have been given to the
corporation by the director for purposes of notice or, if such address is not
shown on such records or is not readily ascertainable, at the place in which the
meetings of the directors are regularly held.

           Notice by mail shall be deemed to have been given at the time a
written notice is deposited in the United States mails, postage prepaid. Any
other written notice shall be deemed to have been given at the time it is
personally delivered to the recipient or is delivered to a common carrier for
transmission, or actually transmitted by the person giving the notice by
electronic means, to the recipient. Oral notice shall be deemed to have been
given at the time it is communicated, in person or by telephone or wireless, to
the recipient or to a person at the office of the recipient who the person
giving the notice has reason to believe will promptly communicate it to the
recipient.

           Section 8.  QUORUM. A majority of the authorized number of directors
constitutes a quorum of the board for the transaction of business, except to
adjourn as provided in Section 11 of this Article. Every act or decision done or
made by a majority of the directors present at a meeting duly held at which a
quorum is present shall be regarded as the act of the Board, unless a greater
number be required by law or by the Articles. A meeting at which a

                                        8



quorum is initially present may continue to transact business notwithstanding
the withdrawal of directors, if any action taken is approved by at least a
majority of the required quorum for such meeting.

           Section 9.  PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE.
Members of the Board may participate in a meeting through use of conference
telephone or similar communications equipment, so long as all members
participating in such meeting can hear one another.

           Section 10. WAIVER OF NOTICE. Notice of a meeting need not be given
to any director who signs a waiver of notice or a consent to holding the meeting
or an approval of the minutes thereof, whether before or after the meeting, or
who attends the meeting without protesting, prior thereto or at its
commencement, the lack of notice to such director. All such waivers, consents
and approvals shall be filed with the corporate records or made a part of the
minutes of the meeting.

           Section 11. ADJOURNMENT. A majority of the directors present, whether
or not a quorum is present, may adjourn any directors' meeting to another time
and place. Notice of the time and place of holding an adjourned meeting need not
be given to absent directors if the time and place be fixed at the meeting
adjourned, except as provided in the next sentence. If the meeting is adjourned
for more than 24 hours, notice of any adjournment to another time or place shall
be given prior to the time of the adjourned meeting to the directors who were
not present at the time of the adjournment.

           Section 12. FEES AND COMPENSATION. Directors and members of
committees may receive such compensation, if any, for their services, and such
reimbursement for expenses, as may be fixed or determined by the Board.

           Section 13. ACTION WITHOUT MEETING. Any action required or permitted
to be taken by the Board may be taken without a meeting if all members of the
Board shall individually or collectively consent in writing to such action. Such
consent or consents shall have the same effect as a unanimous vote of the Board
and shall be filed with the minutes of the proceedings of the Board.

           Section 14. RIGHTS OF INSPECTION. Every director shall have the
absolute right at any reasonable time to inspect and copy all books, records and
documents of every kind and to inspect the physical properties of the
corporation and also of its subsidiary corporations, domestic or foreign. Such
inspection by a director may be made in person or by agent or attorney and
includes the right to copy and obtain extracts.

           Section 15. COMMITTEES. The Board may appoint one or more committees,
each consisting of two or more directors, and delegate to such committees any of
the authority of the Board except with respect to:

           (a)   The approval of any action for which the General Corporation
Law also requires shareholders' approval or approval of the outstanding shares;

           (b)   The filling of vacancies in the Board or on any committee;

                                        9



           (c)   The fixing of compensation of the directors for serving on the
Board or on any committee;

           (d)   The amendment or repeal of bylaws or the adoption of new by
laws;

           (e)   The amendment or repeal of any resolution of the Board which by
its express term is not so amendable or repealable;

           (f)   A distribution to the shareholders of the corporation except at
a rate or in a periodic amount or within a price range determined by the Board;
or

           (g)   The appointment of other committees of the Board or the members
thereof.

           Any such committee must be designated, and the members or alternate
members thereof appointed, by resolution adopted by a majority of the authorized
number of directors and any such committee may be designated an Executive
Committee or by such other name as the Board shall specify. Alternate members of
a committee may replace any absent member at any meeting of the committee. The
Board shall have the power to prescribe the manner in which proceedings of any
such committee shall be conducted. In the absence of any such prescription, such
committee shall have the power to prescribe the manner in which its proceedings
shall be conducted. Unless the Board or such committee shall otherwise provide,
the regular and special meetings and other actions of any such committee shall
be governed by the provisions of this Article applicable to meetings and actions
of the Board. Minutes shall be kept of each meeting of each committee.

                             ARTICLE IV. Officers.

           Section 1.  OFFICERS. The officers of the corporation shall be a
President, a Secretary and a Chief Financial Officer. The corporation may also
have, at the discretion of the Board, a Chairman of the Board, one or more Vice
Presidents, one or more Assistant Secretaries, one or more Assistant Financial
Officers, and such other officers as may be elected or appointed in accordance
with the provisions of Section 3 of this Article.

           Section 2.  ELECTION. The officers of the corporation, except such
officers as may be elected or appointed in accordance with the provisions of
Section 3 or Section 5 of this Article, shall be chosen annually by, and shall
serve at the pleasure of, the Board, and shall hold their respective offices
until their resignation, removal, or other disqualification from service, or
until their respective successors shall be elected.

           Section 3.  SUBORDINATE OFFICERS. The Board may elect, and may
empower the President to appoint, such other officers as the business of the
corporation may require, each of whom shall hold office for such period, have
such authority and perform such duties as are provided in these Bylaws or as the
Board may from time to time determine.

           Section 4.  REMOVAL AND RESIGNATION. Any officer may be removed,
either with or without cause, by the Board at any time or, except in the case of
an officer chosen by the Board, by any officer upon whom such power of removal
may be conferred by the Board.

                                       10



Any such removal shall be without prejudice to the rights, if any, of the
officer under any contract of employment of the officer.

           Any officer may resign at any time by giving written notice to the
corporation, but without prejudice to the rights, if any, of the corporation
under any contract to which the officer is a party. Any such resignation shall
take effect at the date of the receipt of such notice or at any later time
specified therein and, unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective.

           Section 5.  VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filled in the
manner prescribed in these Bylaws for regular election or appointment to such
office.

           Section 6.  CHAIRMAN OF THE BOARD. The Chairman of the Board, if
there shall be such an officer, shall, if present, preside at all meetings of
the Board and exercise and perform such other powers and duties as may be from
time to time assigned by the Board.

           Section 7.  PRESIDENT. Subject to such power, if any, as may be given
by the Board to the Chairman of the Board, if there be such an officer, the
President is the general manager and chief executive officer of the corporation
and has, subject to the control of the Board, general supervision, direction and
control of the business and officers of the corporation. The President shall
preside at all meetings of the shareholders and, in the absence of the Chairman
of the Board, or if there be none, at all meetings of the Board. The President
has the general powers and duties of management usually vested in the office of
president and general manager of a corporation and such other powers and duties
as may be prescribed by the Board.

           Section 8.  VICE PRESIDENTS. In the absence or disability of the
President, the Vice Presidents in order of their rank as fixed by the Board or,
if not ranked, the Vice President designated by the Board, shall perform all the
duties of the President and, when so acting, shall have all the powers of, and
be subject to all the restrictions upon, the President. The Vice Presidents
shall have such other powers and perform such other duties as from time to time
may be prescribed for them respectively by the Board.

           Section 9.  SECRETARY. The Secretary shall keep or cause to be kept,
at the principal executive office and such other place as the Board may order, a
book of minutes of all meetings of shareholders, the Board and its committees,
with the time and place of holding, whether regular or special, and if special,
how authorized, the notice thereof given, the names of those present at Board
and committee meetings, the number of shares present or represented at
shareholders' meetings, and the proceedings thereof. The Secretary shall keep,
or cause to be kept, a copy of the Bylaws of the corporation at the principal
executive office or business office in accordance with Section 213 of the
California General Corporation Law.

           The Secretary shall keep, or cause to be kept, at the principal
executive office or at the office of the corporation's transfer agent or
registrar, if one be appointed, a share register, or a duplicate share register,
showing the names of the shareholders and their addresses, the number and
classes of shares held by each, the number and date of certificates issued for
the same, and the number and date of cancellation of every certificate
surrendered for cancellation.

                                       11



           The Secretary shall give, or cause to be given, notice of all
meetings of the shareholders and of the Board and any committees thereof
required by these Bylaws or by law to be given, shall keep the seal of the
corporation in safe custody, and shall have such other powers and perform such
other duties as may be prescribed by the Board.

           Section 10. CHIEF FINANCIAL OFFICER. The Chief Financial Officer is
the chief financial officer of the corporation and shall keep and maintain, or
cause to be kept and maintained, adequate and correct accounts of the properties
and business transactions of the corporation, and shall send or cause to be sent
to the shareholders of the corporation such financial statements and reports as
are by law or these Bylaws required to be sent to them. The books of account
shall at all times be open to inspection by any director.

           The Chief Financial Officer shall deposit all moneys and other
valuables in the name and to the credit of the corporation with such
depositaries as may be designated by the Board. The Chief Financial Officer
shall disburse the funds of the corporation as may be ordered by the Board,
shall render to the President and the directors, whenever they request it, an
account of all transactions as Chief Financial Officer and of the financial
condition of the corporation, and shall have such other powers and perform such
other duties as may be prescribed by the Board.

                          ARTICLE V. Other Provisions.

           Section 1.  INSPECTION OF CORPORATE RECORDS.

           (a)   A shareholder or shareholders holding at least five percent in
the aggregate of the outstanding voting shares of the corporation or who hold at
least one percent of such voting shares and have filed a Schedule l4B with the
United States Securities and Exchange Commission relating to the election of
directors of the corporation shall have an absolute right to do either or both
of the following:

                 (i)   Inspect and copy the record of shareholders' names and
         addresses and shareholdings during usual business hours upon five
         business days' prior written demand upon the corporation; or

                 (ii)  Obtain from the transfer agent, if any, for the
         corporation, upon five business days' prior written demand and upon the
         tender of its usual charges for such a list (the amount of which
         charges shall be stated to the shareholder by the transfer agent upon
         request), a list of the shareholders' names and addresses who are
         entitled to vote for the election of directors and their shareholdings,
         as of the most recent record date for which it has been compiled or as
         of a date specified by the shareholder subsequent to the date of
         demand.

           (b)   The record of shareholders shall also be open to inspection and
copying by any shareholder or holder of a voting trust certificate at any time
during usual business hours upon written demand on the corporation, for a
purpose reasonably related to such holder's interest as a shareholder or holder
of a voting trust certificate.

                                       12



           (c)   The accounting books and records and minutes of proceedings of
the shareholders and the Board and committees of the Board shall be open to
inspection upon written demand on the corporation of any shareholder or holder
of a voting trust certificate at any reasonable time during usual business
hours, for a purpose reasonably related to such holder's interests as a
shareholder or as a holder of such voting trust certificate.

           (d)   Any inspection and copying under this Article may be made in
person or by agent or attorney.

           Section 2.  INSPECTION OF BYLAWS. The corporation shall keep in its
principal executive office in the State of California, or if its principal
executive office is not in such State at its principal business office in such
State, the original or a copy of these Bylaws as amended to date, which shall be
open to inspection by shareholders at all reasonable times during office hours.
If the principal executive office of the corporation is located outside the
State of California and the corporation has no principal business office in such
state, it shall upon the written request of any shareholder furnish to such
shareholder a copy of these Bylaws as amended to date.

           Section 3.  ENDORSEMENT OF DOCUMENTS; CONTRACTS. Subject to the
provisions of applicable law, any note, mortgage, evidence of indebtedness,
contract, share certificate, conveyance or other instrument in writing and any
assignment or endorsements thereof executed or entered into between the
corporation and any other person, when signed by the Chairman of the Board, the
President or any Vice President and the Secretary, any Assistant Secretary, the
Chief Financial Officer or any Assistant Chief Financial Officer of the
corporation shall be valid and binding on the corporation in the absence of
actual knowledge on the part of the other person that the signing officers had
no authority to execute the same. Any such instruments may be signed by any
other person or persons and in such manner as from time to time shall be
determined by the Board, and, unless so authorized by the Board, no officer,
agent or employee shall have any power or authority to bind the corporation by
any contract or engagement or to pledge its credit or to render it liable for
any purpose or amount.

           Section 4.  CERTIFICATES OF STOCK. Every holder of shares of the
corporation shall be entitled to have a certificate signed in the name of the
corporation by the Chairman of the Board, the President or a Vice President and
by the Chief Financial Officer or an Assistant Chief Financial Officer or the
Secretary or an Assistant Secretary, certifying the number of shares and the
class or series of shares owned by the shareholder. Any or all of the signatures
on the certificate may be facsimile. If any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the corporation with the same effect
as if such person were an officer, transfer agent or registrar at the date of
issue.

           Certificates for shares may be issued prior to full payment under
such restrictions and for such purposes as the Board may provide; provided,
however, that on any certificate issued to represent any partly paid shares, the
total amount of the consideration to be paid therefor and the amount paid
thereon shall be stated.

                                       13



           Except as provided in this Section, no new certificate for shares
shall be issued in lieu of an old one unless the latter is surrendered and
cancelled at the same time. The Board may, however, if any certificate for
shares is alleged to have been lost, stolen or destroyed, authorize the issuance
of a new certificate in lieu thereof, and the corporation may require that the
corporation be given a bond or other adequate security sufficient to indemnify
it against any claim that may be made against it (including expense or
liability) on account of the alleged loss, theft or destruction of such
certificate or the issuance of such new certificate.

           Section 5.  REPRESENTATION OF SHARES OF OTHER CORPORATIONS. The
President or any other officer or officers authorized by the Board or the
President are each authorized to vote, represent and exercise on behalf of the
corporation all rights incident to any and all shares of any other corporation
or corporations standing in the name of the corporation. The authority herein
granted may be exercised either by any such officer in person or by any other
person authorized so to do by proxy or power of attorney duly executed by said
officer.

           Section 6.  STOCK PURCHASE PLANS. The corporation may adopt and carry
out a stock purchase plan or agreement or stock option plan or agreement
providing for the issue and sale for such consideration as may be fixed of its
unissued shares, or of issued shares acquired or to be acquired, to one or more
of the employees or directors of the corporation or of a subsidiary or to a
trustee on their behalf and for the payment for such shares in installments or
at one time, and may provide for aiding any such persons in paying for such
shares by compensation for services rendered, promissory notes or otherwise.

           Any such stock purchase plan or agreement or stock option plan or
agreement may include, among other features, the fixing of eligibility for
participation therein, the class and price of shares to be issued or sold under
the plan or agreement, the number of shares which may be subscribed for, the
method of payment therefor, the reservation of title until full payment
therefor, the effect of the termination of employment, an option or obligation
on the part of the corporation to repurchase the shares upon termination of
employment, restrictions upon transfer of the shares, the time limits of and
termination of the plan, and any other matters, not in violation of applicable
law, and may be included in the plan as approved or authorized by the Board or
any committee of the Board.

           Section 7.  CONSTRUCTION AND DEFINITIONS. Unless the context
otherwise requires, the general provisions, rules of construction and
definitions contained in the General Provisions of the California Corporations
Code and in the California General Corporation Law shall govern the construction
of these Bylaws.

           Section 8.  AMENDMENTS. These Bylaws may be amended or repealed
either by approval of the outstanding shares (as defined in Section 152 of the
California General Corporation Law) or by the approval of the Board; provided,
however, that after the issuance of shares, a bylaw specifying or changing a
fixed number of directors or the maximum or minimum number or changing from a
fixed to a variable number of directors or vice versa may only be adopted by
approval of the outstanding shares, and a bylaw reducing the fixed number or the
minimum number of directors to a number less than five shall be subject to the
provisions of Section 212(a) of the California General Corporation Law.

                                       14



           Section 9.  ANNUAL REPORT TO SHAREHOLDERS. The annual report to
shareholders referred to in Section 1501 of the California General Corporation
Law is expressly waived, but nothing herein shall be interpreted as prohibiting
the Board from issuing annual or other periodic reports to shareholders.

                          ARTICLE VI. Indemnification.

           Section 1.  INDEMNIFICATION OF DIRECTORS AND OFFICERS. Each person
who was or is a party or is threatened to be made a party to or is involved in
any threatened, pending or completed action, suit or proceeding, whether brought
in the name of the corporation or otherwise and whether of a civil, criminal,
administrative or investigative nature (hereinafter a "proceeding"), by reason
of the fact that he or she, or a person of whom he or she is the legal
representative, is or was a director or officer of the corporation or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is an alleged action or inaction in an official
capacity or in any other capacity while serving as a director or officer, shall,
subject to the terms of any agreement between the corporation and such person,
be indemnified and held harmless by the corporation to the fullest extent
permissible under California law and the corporation's Articles of
Incorporation, against all costs, charges, expenses, liabilities and losses
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement) reasonably incurred or suffered by
such person in connection therewith, and such indemnification shall continue as
to a person who has ceased to be a director or officer and shall inure to the
benefit of his or her heirs, executors and administrators; provided, however,
that the corporation shall indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such person only if
such proceeding (or part thereof) was authorized by the Board of Directors of
the corporation and provided, further, that no such person shall be indemnified
(i) except to the extent that the aggregate of losses to be indemnified exceeds
the amount of such losses for which the director or officer is paid pursuant to
any directors and officers liability insurance policy maintained by the
corporation; (ii) on account of any suit in which judgment is rendered against
such person for an accounting of profits made from the purchase or sale by such
person of securities of the corporation pursuant to the provisions of Section
16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar
provisions of any federal, state or local statutory law; (iii) for expenses,
judgments, funds, penalties or ERISA excise taxes resulting from such person's
conduct which is finally adjudged to have been willful misconduct, knowingly
fraudulent or deliberately dishonest; (iv) if a court of competent jurisdiction
finally determines that any indemnification hereunder is unlawful; (v) for acts
or omissions involving intentional misconduct or knowing and culpable violation
of law; (vi) for acts or omissions that the director or officer believes to be
contrary to the best interests of the corporation or its shareholders or that
involve the absence of good faith on the part of the director or officer; (vii)
for any transaction from which the director or officer derived an improper
personal benefit; (viii) for acts or omissions that show a reckless disregard
for the director's or officer's duty to the corporation or its shareholders in
circumstances in which the director or officer was aware, or should have been
aware, in the ordinary course of performing his duties, of a risk of serious
injury to the corporation or its shareholders; (ix) for acts or omissions that
constitute an unexcused pattern of inattention that amounts to an abdication of
the director's or officer's duties to the corporation or

                                       15



its shareholders; (x) for costs, charges, expenses, liabilities and losses
arising under Section 310 or 316 of the General Corporation Law of California
(the "Law"); and (xi) as to circumstances in which indemnity is expressly
prohibited by Section 317 of the Law. The right to indemnification conferred in
this Article shall be a contract right and shall include the right to be paid by
the corporation expenses incurred in defending any proceeding in advance of its
final disposition; provided, however, that if the Law requires the payment of
such expenses incurred by a director or officer in his or her capacity as a
director or officer (and not in any other capacity in which service was or is
rendered by such person while a director or officer, including, without
limitation, service to an employee benefit plan) in advance of the final
disposition of a proceeding, shall be made only upon delivery to the corporation
of an undertaking, by or on behalf of such director or officer, to repay all
amounts to the corporation unless it shall be determined ultimately that such
person is not entitled to be indemnified. No indemnity shall be provided under
this provision for any liability arising out of any act or omission committed or
occurring prior to the date an amendment containing this provision is filed with
the Secretary of State of California.

           Section 2.  INDEMNIFICATION OF AGENTS. A person who was or is a party
or is threatened to be made a party to or is involved in any proceeding by
reason of the fact that he or she is or was an employee or agent of the
corporation or is or was serving at the request of the corporation as an
employee or agent of another enterprise, including service with respect to
employee benefit plans, whether the basis of such action is an alleged action or
inaction in an official capacity or in any other capacity while serving as an
employee or agent, may, subject to the terms of any agreement between the
corporation and such person, be indemnified and held harmless by the corporation
to the fullest extent permitted by California law and the corporation's Articles
of Incorporation, against all costs, charges, expenses, liabilities and losses
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement) reasonably incurred or suffered by
such person in connection therewith. The immediately preceding sentence is not
intended to be and shall not be considered to confer a contract right on any
employee or agent of the corporation.

           Section 3.  RIGHT OF DIRECTORS AND OFFICERS TO BRING SUIT. If a claim
under Section 1 of this Article is not paid in full by the corporation within 30
days after a written claim has been received by the corporation, the claimant
may at any time thereafter bring suit against the corporation to recover the
unpaid amount of the claim and, if successful in whole or in part, the claimant
shall also be entitled to be paid the expense of prosecuting such claim. It
shall be a defense to any such action (other than an action brought to enforce a
claim for expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any is required, has been
tendered to the corporation) that the claimant has failed to meet a standard of
conduct, if any, required to make it permissible under California law for the
corporation to indemnify the claimant for the amount claimed. Neither the
failure of the corporation (including its Board of Directors, independent legal
counsel or its shareholders) to have made a determination prior to the
commencement of such action and indemnification of the claimant is permissible
in the circumstances because he or she has met such standard of conduct, nor an
actual determination by the corporation (including its Board of Directors,
independent legal counsel or its shareholders) that the claimant has not met
such standard of conduct, shall be a defense to the action or create a
presumption that the claimant has failed to meet such standard of conduct.

                                       16



           Section 4.  SUCCESSFUL DEFENSE. Notwithstanding any other provision
of this Article, to the extent that a director or officer has been successful on
the merits or otherwise (including the dismissal of an action without prejudice
or the settlement of a proceeding without admission of liability) in defense of
any proceeding referred to in Section 1 or, in defense of any claim, issue or
matter therein, he shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection therewith.

           Section 5.  NON-EXCLUSIVITY OF RIGHTS. The right to indemnification
provided by this Article shall not be exclusive of any other right which any
person may have or hereafter acquire under any statute, bylaw, agreement, vote
of shareholders or disinterested directors or otherwise.

           Section 6.  INSURANCE. The corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
corporation or another corporation, partnership, joint venture, trust or other
enterprise against any such expense, liability or loss, whether or not the
corporation would have the power to indemnify such person against such expense,
liability or loss under California law.

           Section 7.  EXPENSES AS A WITNESS. To the extent that any director,
officer, employee or agent of the corporation is by reason of such position, or
a position with another entity at the request of the corporation, a witness in
any action, suit or proceeding, he may be indemnified against all costs and
expenses actually and reasonably incurred by him or her or on his or her behalf
in connection therewith.

           Section 8.  INDEMNITY AGREEMENTS. The corporation may enter into
agreements with any director, officer, employee or agent of the corporation
providing for indemnification to the fullest extent permissible under California
law and the corporation's Articles of Incorporation.

                                       17

EX-4.1

                                                                     Exhibit 4.1

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


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

                                 LBI MEDIA, INC.

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

                                    INDENTURE

                            Dated as of July 9, 2002

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

                                 U.S. Bank, N.A.

                                     Trustee

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


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



                             CROSS-REFERENCE TABLE*

        Trust Indenture
        Act Section                                            Indenture Section
        310(a)(1) ...........................................          7.10
           (a)(2) ...........................................          7.10
           (a)(3) ...........................................          N.A.
           (a)(4) ...........................................          N.A.
           (a)(5) ...........................................          7.10
           (b) ..............................................          7.10
           (c) ..............................................          N.A.
        311(a) ..............................................          7.11
           (b) ..............................................          7.11
           (c) ..............................................          N.A.
        312(a) ..............................................          2.05
           (b) ..............................................         13.03
           (c) ..............................................         13.03
        313(a) ..............................................          7.06
           (b)(1) ...........................................          N.A.
           (b)(2) ...........................................       7.06; 7.07
           (c) ..............................................       7.06;13.02
           (d) ..............................................          7.06
        314(a) ..............................................      4.03; 13.02
           (b) ..............................................          N.A.
           (c)(1) ...........................................          N.A.
           (c)(2) ...........................................          N.A.
           (c)(3) ...........................................          N.A.
           (e) ..............................................         13.05
           (f) ..............................................          N.A.
        315(a) ..............................................          N.A.
           (b) ..............................................          N.A.
           (c) ..............................................          N.A.
           (d) ..............................................          N.A.
           (e) ..............................................          N.A.
        316(a) (last sentence) ..............................          N.A.
           (a)(1)(A) ........................................          N.A.
           (a)(1)(B) ........................................          N.A.
           (a)(2) ...........................................          N.A.
           (b) ..............................................          N.A.
           (c) ..............................................          N.A.
        317(a)(1) ...........................................          N.A.
           (a)(2) ...........................................          N.A.
           (b) ..............................................          N.A.
        318(a) ..............................................          N.A.
           (b) ..............................................          N.A.
           (c) ..............................................         13.01

N.A. means not applicable.

*This Cross Reference Table is not part of the Indenture.



                                TABLE OF CONTENTS



                                                                                       Page
                                                                                       ----
                                                                                    
                                   ARTICLE 1.
                         DEFINITIONS AND INCORPORATION
                                  BY REFERENCE

Section 1.01.     Definitions ......................................................     1
Section 1.02.     Other Definitions ................................................    26
Section 1.03.     Incorporation by Reference of Trust Indenture Act ................    26
Section 1.04.     Rules of Construction                                                 26

                                  ARTICLE 2.
                                  THE NOTES

Section 2.01.     Form and Dating ..................................................    27
Section 2.02.     Execution and Authentication .....................................    28
Section 2.03.     Registrar and Paying Agent .......................................    28
Section 2.04.     Paying Agent to Hold Money in Trust ..............................    29
Section 2.05.     Holder Lists .....................................................    29
Section 2.06.     Transfer and Exchange ............................................    29
Section 2.07.     Replacement Notes ................................................    41
Section 2.08.     Outstanding Notes ................................................    41
Section 2.09.     Treasury Notes ...................................................    41
Section 2.10.     Temporary Notes ..................................................    42
Section 2.11.     Cancellation .....................................................    42
Section 2.12.     Defaulted Interest ...............................................    42

                                   ARTICLE 3.
                           REDEMPTION AND PREPAYMENT

Section 3.01.     Notices to Trustee ...............................................    42
Section 3.02.     Selection of Notes to Be Redeemed or Purchased ...................    42
Section 3.03.     Notice of Redemption .............................................    43
Section 3.04.     Effect of Notice of Redemption ...................................    44
Section 3.05.     Deposit of Redemption or Purchase Price ..........................    44
Section 3.06.     Notes Redeemed or Purchased in Part ..............................    44
Section 3.07.     Optional Redemption ..............................................    44
Section 3.08.     Mandatory Redemption .............................................    45
Section 3.09.     Offer to Purchase by Application of Excess Proceeds ..............    45

                                   ARTICLE 4.
                                   COVENANTS

Section 4.01.     Payment of Notes .................................................    47
Section 4.02.     Maintenance of Office or Agency ..................................    47
Section 4.03.     Reports ..........................................................    47
Section 4.04.     Compliance Certificate ...........................................    48
Section 4.05.     Taxes ............................................................    49
Section 4.06.     Stay, Extension and Usury Laws ...................................    49
Section 4.07.     Restricted Payments ..............................................    49
Section 4.08.     Dividend and Other Payment Restrictions Affecting Subsidiaries ...    52
Section 4.09.     Incurrence of Indebtedness and Issuance of Preferred Stock .......    54
Section 4.10.     Asset Sales ......................................................    57


                                       i



                                                                                     
Section 4.11.     Transactions with Affiliates .....................................    59
Section 4.12.     Liens ............................................................    60
Section 4.13.     Corporate Existence ..............................................    60
Section 4.14.     Business Activities ..............................................    60
Section 4.15.     Offer to Repurchase Upon Change of Control .......................    60
Section 4.16.     No Senior Subordinated Debt ......................................    62
Section 4.17.     Additional Subsidiary Guarantees .................................    62
Section 4.18.     Limitation on Issuances of Equity Interests in Wholly Owned
                  Restricted Subsidiaries ..........................................    62
Section 4.19.     Payments for Consent .............................................    63
Section 4.20.     Designation of Restricted and Unrestricted Subsidiaries ..........    63

                                   ARTICLE 5.
                                   SUCCESSORS

Section 5.01.     Merger, Consolidation, or Sale of Assets .........................    63
Section 5.02.     Successor Corporation Substituted ................................    64

                                   ARTICLE 6.
                             DEFAULTS AND REMEDIES

Section 6.01.     Events of Default ................................................    64
Section 6.02.     Acceleration .....................................................    66
Section 6.03.     Other Remedies ...................................................    67
Section 6.04.     Waiver of Past Defaults ..........................................    67
Section 6.05.     Control by Majority ..............................................    68
Section 6.06.     Limitation on Suits ..............................................    68
Section 6.07.     Rights of Holders of Notes to Receive Payment ....................    68
Section 6.08.     Collection Suit by Trustee .......................................    68
Section 6.09.     Trustee May File Proofs of Claim .................................    69
Section 6.10.     Priorities .......................................................    69
Section 6.11.     Undertaking for Costs ............................................    69

                                   ARTICLE 7.
                                    TRUSTEE

Section 7.01.     Duties of Trustee ................................................    70
Section 7.02.     Rights of Trustee ................................................    71
Section 7.03.     Individual Rights of Trustee .....................................    71
Section 7.04.     Trustee's Disclaimer .............................................    71
Section 7.05.     Notice of Defaults ...............................................    72
Section 7.06.     Reports by Trustee to Holders of the Notes .......................    72
Section 7.07.     Compensation and Indemnity .......................................    72
Section 7.08.     Replacement of Trustee ...........................................    73
Section 7.09.     Successor Trustee by Merger, etc .................................    74
Section 7.10.     Eligibility; Disqualification ....................................    74
Section 7.11.     Preferential Collection of Claims Against Company ................    74

                                   ARTICLE 8.
                    LEGAL DEFEASANCE AND COVENANT DEFEASANCE

Section 8.01.     Option to Effect Legal Defeasance or Covenant Defeasance .........    75
Section 8.02.     Legal Defeasance and Discharge ...................................    75
Section 8.03.     Covenant Defeasance ..............................................    75
Section 8.04.     Conditions to Legal or Covenant Defeasance .......................    76



                                       ii



                                                                                     
Section 8.05.     Deposited Money and Government Securities to be Held in Trust;
                  Other Miscellaneous Provisions ...................................    77
Section 8.06.     Repayment to Company .............................................    77
Section 8.07.     Reinstatement ....................................................    77

                                   ARTICLE 9.
                        AMENDMENT, SUPPLEMENT AND WAIVER

Section 9.01.     Without Consent of Holders of Notes ..............................    78
Section 9.02.     With Consent of Holders of Notes .................................    78
Section 9.03.     Compliance with Trust Indenture Act ..............................    80
Section 9.04.     Revocation and Effect of Consents ................................    80
Section 9.05.     Notation on or Exchange of Notes .................................    80
Section 9.06.     Trustee to Sign Amendments, etc ..................................    80

                                  ARTICLE 10.
                                 SUBORDINATION

Section 10.01.    Agreement to Subordinate .........................................    81
Section 10.02.    Liquidation; Dissolution; Bankruptcy .............................    81
Section 10.03.    Default on Designated Senior Debt ................................    81
Section 10.04.    Acceleration of Notes ............................................    82
Section 10.05.    When Distribution Must Be Paid Over ..............................    82
Section 10.06.    Notice by Company ................................................    83
Section 10.07.    Subrogation ......................................................    83
Section 10.08.    Relative Rights ..................................................    83
Section 10.09.    Subordination May Not Be Impaired by Company .....................    84
Section 10.10.    Distribution or Notice to Representative .........................    84
Section 10.11.    Rights of Trustee and Paying Agent ...............................    84
Section 10.12.    Authorization to Effect Subordination ............................    84
Section 10.13.    Amendments .......................................................    85

                                  ARTICLE 11.
                             SUBSIDIARY GUARANTEES

Section 11.01.    Guarantee ........................................................    85
Section 11.02.    Subordination of Subsidiary Guarantee ............................    86
Section 11.03.    Limitation on Guarantor Liability ................................    86
Section 11.04.    Execution and Delivery of Subsidiary Guarantee ...................    86
Section 11.05.    Guarantors May Consolidate, etc., on Certain Terms ...............    87
Section 11.06.    Releases Following Sale of Assets ................................    87

                                  ARTICLE 12.
                           SATISFACTION AND DISCHARGE

Section 12.01.    Satisfaction and Discharge .......................................    88
Section 12.02.    Application of Trust Money .......................................    89

                                  ARTICLE 13.
                                 MISCELLANEOUS

Section 13.01.    Trust Indenture Act Controls .....................................    89
Section 13.02.    Notices ..........................................................    89
Section 13.03.    Communication by Holders of Notes with Other Holders of Notes ....    90
Section 13.04.    Certificate and Opinion as to Conditions Precedent ...............    90
Section 13.05.    Statements Required in Certificate or Opinion ....................    91



                                      iii



                                                                                     
Section 13.06.    Rules by Trustee and Agents ......................................    91
Section 13.07.    No Personal Liability of Directors, Officers, Employees and
                  Stockholders .....................................................    91
Section 13.08.    Governing Law ....................................................    91
Section 13.09.    No Adverse Interpretation of Other Agreements ....................    91
Section 13.10.    Successors .......................................................    92
Section 13.11.    Severability .....................................................    92
Section 13.12.    Counterpart Originals ............................................    92
Section 13.13.    Table of Contents, Headings, etc .................................    92

                                    EXHIBITS

Exhibit A-1       FORM OF NOTE
Exhibit A-2       FORM OF REGULATION S TEMPORARY GLOBAL NOTE
Exhibit B         FORM OF CERTIFICATE OF TRANSFER
Exhibit C         FORM OF CERTIFICATE OF EXCHANGE
Exhibit D         FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED
                  INVESTOR
Exhibit E         FORM OF SUBSIDIARY GUARANTEE
Exhibit F         FORM OF SUPPLEMENTAL INDENTURE


                                    SCHEDULES

Schedule I        SCHEDULE OF GUARANTORS



                                       iv



         INDENTURE dated as of July 9, 2002 among LBI Media, Inc., a California
corporation (the "Company"), the Guarantors listed on Schedule I hereto (the
"Guarantors") and U.S. Bank, N.A., a national banking association, as trustee
(the "Trustee").

         The Company, the Guarantors and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders (as
defined below) of the 10?% Senior Subordinated Notes due 2012 (the "Notes"):

                                   ARTICLE 1.
                          DEFINITIONS AND INCORPORATION
                                  BY REFERENCE

Section 1.01.     Definitions.

         "144A Global Note" means a Global Note substantially in the form of
Exhibit A-1 hereto bearing the Global Note Legend and the Private Placement
Legend and deposited with or on behalf of, and registered in the name of, the
Depositary or its nominee that will be issued in a denomination equal to the
outstanding principal amount of the Notes sold in reliance on Rule 144A.

         "Acquired Debt" means, with respect to any specified Person: (1)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, whether or
not such Indebtedness is incurred in connection with, or in contemplation of,
such other Person merging with or into, or becoming a Subsidiary of, such
specified Person; and (2) Indebtedness secured by a Lien encumbering any asset
acquired by such specified Person.

         "Acquisition Debt" means Indebtedness, the proceeds of which are
utilized solely to acquire all or a portion of the assets or a majority of the
Voting Stock of an existing radio or television broadcasting business or station
or any other business engaged in a Permitted Business.

         "Additional Notes" means up to $250.0 million aggregate principal
amount of Notes (other than the Initial Notes) issued under this Indenture in
accordance with Sections 2.02 and 4.09 hereof, as part of the same series as the
Initial Notes.

         "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise. For purposes of this definition, the terms
"controlling," "controlled by" and "under common control with" have correlative
meanings.

         "Agent" means any Registrar, co-registrar, Paying Agent or additional
paying agent.

         "Applicable Procedures" means, with respect to any transfer or exchange
of or for beneficial interests in any Global Note, the rules and procedures of
the Depositary, Euroclear and Clearstream that apply to such transfer or
exchange.

         "Asset Sale" means:

               (1)    the sale, lease, conveyance or other disposition of any
         assets or rights, other than in the ordinary course of business;
         provided that the sale, conveyance or other disposition of all or
         substantially all of the assets (which term shall include Media
         Licenses) owned by the Company

                                       1



         and its Subsidiaries taken as a whole will be governed by the
         provisions of this Indenture described in Sections 4.15 and/or 5.01 and
         not by the provisions of Section 4.10; and

               (2)    the issuance of Equity Interests by any Restricted
         Subsidiary or the sale of Equity Interests in any Restricted
         Subsidiary.

         Notwithstanding the preceding, none of the following items will be
         deemed to be an Asset Sale:

               (1)    any single transaction or series of related transactions
         that involves assets or rights having a fair market value of less than
         $2.0 million;

               (2)    a transfer of assets or rights between or among the
         Company and its Wholly Owned Restricted Subsidiaries;

               (3)    an issuance of Equity Interests by a Subsidiary of the
         Company to the Company or to another Subsidiary of the Company;

               (4)    the sale or lease of equipment, inventory, accounts
         receivable or other assets or rights in the ordinary course of
         business;

               (5)    the disposition of equipment no longer used or useful in
         the business of the Company or any of its Restricted Subsidiaries;

               (6)    the sale and leaseback of any assets within 90 days of the
         acquisition thereof;

               (7)    a Relocation; provided, however, that any Net Proceeds
         received by the Company or any of its Restricted Subsidiaries in
         exchange therefor will be subject to the restrictions set forth in
         Section 4.10;

               (8)    the sale or other disposition of Cash Equivalents;

               (9)    a Restricted Payment that is permitted by Section 4.07,
         or a Permitted Investment;

               (10)   the sale of the Hollywood Office Property;

               (11)   foreclosures on assets;

               (12)   Permitted Liens;

               (13)   the grant of any license of patents, trademarks,
         registrations therefor and other similar intellectual property in the
         ordinary course of business; and

               (14)   the cancellation or forgiveness of any loan made by the
         Company or any of its Restricted Subsidiaries (i) permitted by clause
         (10) of Section 4.07(b) or (ii) permitted by clauses (8), (9), (10) or
         (14) of the definition of "Permitted Investments."

         "Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.

         "Beneficial Owner" has the meaning assigned to such term in Rule 13d-3
and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that

                                       2



term is used in Section 13(d)(3) of the Exchange Act), such "person" will be
deemed to have beneficial ownership of all securities that such "person" has the
right to acquire by conversion or exercise of other securities, whether such
right is currently exercisable or is exercisable only upon the occurrence of a
subsequent condition. The terms "Beneficially Owns" and "Beneficially Owned"
have a corresponding meaning.

         "Board of Directors" means:

               (1)    with respect to a corporation, the board of directors of
         the corporation;

               (2)    with respect to a partnership, the general partner of
         which is a corporation, the board of directors of the general partner
         of the partnership; and

               (3)    with respect to any other Person, the board or committee
         of such Person serving a similar function.

         "Broker-Dealer" has the meaning set forth in the Registration Rights
Agreement.

         "Business Day" means any day other than a Legal Holiday.

         "California Taxable Income" means the taxable income of Parent for any
taxable year computed pursuant to Section 23802 (or any successor provision) of
the California Revenue and Tax Code but calculated as if the taxable year of
Parent ended on the date with respect to which such taxable income calculation
is made, reduced, but not below zero, by the amount of any Suspended Losses
which are treated as incurred by Parent in, and allowed as deductions on the tax
returns of Parent's stockholders for, such taxable year.

         "Capital Lease Obligation" means, at the time any determination is to
be made, the amount of the liability in respect of a capital lease that would at
that time be required to be capitalized on a balance sheet in accordance with
GAAP.

         "Capital Stock" means:

               (1)    in the case of a corporation, corporate stock;

               (2)    in the case of an association or business entity, any and
         all shares, interests, participations, rights or other equivalents
         (however designated) of corporate stock;

               (3)    in the case of a partnership or limited liability company,
         partnership or membership interests (whether general or limited); and

               (4)    any other interest or participation that confers on a
         Person the right to receive a share of the profits and losses of, or
         distributions of assets of, the issuing Person.

         "Cash Equivalents" means:

               (1)    United States dollars;

               (2)   securities issued or directly and fully guaranteed or
         insured by the United States government or any agency or
         instrumentality of the United States government having maturities of
         not more than one year from the date of acquisition;

                                       3



               (3)    certificates of deposit and eurodollar time deposits with
         maturities of one year or less from the date of acquisition, bankers'
         acceptances with maturities not exceeding one year and overnight bank
         deposits, in each case, with any lender party to the Credit Facility or
         with any domestic commercial bank having capital and surplus in excess
         of $500.0 million and a Thomson Bank Watch Rating of "B" or better;

               (4)    repurchase obligations with a term of not more than 30
         days for underlying securities of the types described in clauses (2)
         and (3) above entered into with any financial institution meeting the
         qualifications specified in clause (3) above;

               (5)    commercial paper having one of the two highest ratings
         obtainable from Moody's Investors Service, Inc. or Standard & Poor's
         Rating Services and in each case maturing within one year after the
         date of acquisition; and

               (6)    money market funds at least 95% of the assets of which
         constitute Cash Equivalents of the kinds described in clauses (1)
         through (5) of this definition.

         "Change of Control" means the occurrence of any of the following:

               (1)    the direct or indirect sale, transfer, conveyance or other
         disposition (other than by way of merger or consolidation), in one or a
         series of related transactions, of all or substantially all of the
         properties or assets (which term shall include Media Licenses) of the
         Company and its Restricted Subsidiaries taken as a whole to any
         "person" (as that term is used in Section 13(d)(3) of the Exchange Act)
         other than a Principal or a Related Party of a Principal;

               (2)    the adoption of a plan relating to the liquidation or
         dissolution of the Company; or

               (3)    the consummation of any transaction (including, without
         limitation, any merger or consolidation) the result of which is that
         any "person" (as defined above), other than the Principals and their
         Related Parties, becomes the Beneficial Owner, directly or indirectly,
         of more than 50% of the Voting Stock of the Company, measured by voting
         power rather than number of shares.

         "Clearstream" means Clearstream Banking, S.A.

         "Code" means the Internal Revenue Code of 1986, as amended.

         "Company" means LBI Media, Inc. (formerly known as LBI Holdings II,
Inc.), and any and all successors thereto.

         "Consolidated Cash Flow" means, with respect to any specified Person
for any period, the Consolidated Net Income of such Person for such period plus:

               (1)    an amount equal to any extraordinary loss plus any net
         loss (together with any related provision for taxes) realized by such
         Person or any of the Restricted Subsidiaries in connection with (a) an
         Asset Sale (including any sale and leaseback transaction), or (b) the
         disposition of any securities by such Person or any of the Restricted
         Subsidiaries or the extinguishment of any Indebtedness of such Person
         or any of the Restricted Subsidiaries, to the extent such losses were
         deducted in computing such Consolidated Net Income; plus

                                       4



               (2)    provision for taxes based on income or profits of such
         Person and the Restricted Subsidiaries for such period (and to the
         extent not included in the foregoing, Permitted Shareholder Tax
         Distributions and Permitted Holdings Tax Distributions), to the extent
         that such provision for taxes, Permitted Shareholder Tax Distributions
         or Permitted Holdings Tax Distributions were deducted in computing such
         Consolidated Net Income; plus

                (3)   consolidated interest expense of such Person and its
         Restricted Subsidiaries for such period, whether paid or accrued and
         whether or not capitalized (including, without limitation, amortization
         of debt issuance costs and original issue discount, non-cash interest
         payments, the interest component of any deferred payment obligations,
         the interest component of all payments associated with Capital Lease
         Obligations, imputed interest with respect to obligations with respect
         to any sale and leaseback transaction, fees, including but not limited
         to agency fees, letter of credit fees, commitment fees, commissions,
         discounts and other fees and charges incurred in respect of
         Indebtedness and net of the effect of all payments made or received
         pursuant to Hedging Obligations), to the extent that any such expense
         was deducted in computing such Consolidated Net Income; plus

               (4)    depreciation, amortization (including non-cash employee
         and officer equity compensation expenses, amortization of goodwill and
         other intangibles, amortization of programming costs (net of program
         payments made or to be made), barter expenses and impairment charges
         under SFAS 142 for broadcast licenses, goodwill or other indefinite
         lived intangible assets, but excluding amortization of prepaid cash
         expenses that were paid in a prior period) and other non-cash expenses
         (excluding any such non-cash expense to the extent that it represents
         amortization of a prepaid cash expense that was paid in a prior period)
         of such Person and its Restricted Subsidiaries for such period, to the
         extent that such depreciation, amortization, impairment charges and
         other non-cash expenses were deducted in computing such Consolidated
         Net Income; plus

               (5)    any extraordinary or non-recurring expenses and charges of
         such Person and the Restricted Subsidiaries for such period, including,
         without limitation, transaction costs in respect of acquisitions, to
         the extent that such expenses and charges were deducted in computing
         such Consolidated Net Income; minus

               (6)    non-cash items increasing such Consolidated Net Income for
         such period, other than the accrual of revenue in the ordinary course
         of business; minus

               (7)    cash payments related to non-cash charges that increased
         Consolidated Cash Flow in any prior period; minus

               (8)    barter revenues,

in each case, on a consolidated basis and determined in accordance with GAAP.

         Notwithstanding the foregoing, the provision for taxes based on the
income or profits of, and the depreciation and amortization and other non-cash
expenses of, a Subsidiary of the Company will be added to Consolidated Net
Income to compute Consolidated Cash Flow of the Company only to the extent that
a corresponding amount would be permitted at the date of determination to be
dividended, distributed or loaned to the Company by such Subsidiary without
prior governmental approval (that has not been obtained), and without direct or
indirect restriction pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to that Subsidiary or its stockholders.

                                       5



         "Consolidated Net Income" means, with respect to any specified Person
for any period, the aggregate of the Net Income of such Person and its
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that:

               (1)    the Net Income (but not loss) of any Unrestricted
         Subsidiary will be excluded, whether or not distributed to the
         specified Person or a Restricted Subsidiary of the Person;

               (2)    the Net Income of any Restricted Subsidiary will be
         excluded to the extent that the declaration or payment of dividends or
         similar distributions or loans by that Subsidiary of that Net Income is
         not at the date of determination permitted without any prior
         governmental approval (that has not been obtained) or, directly or
         indirectly, by operation of the terms of its charter or any agreement,
         instrument, judgment, decree, order, statute, rule or governmental
         regulation applicable to that Restricted Subsidiary or its
         stockholders;

               (3)    the Net Income of any Person acquired in a pooling of
         interests transaction for any period prior to the date of such
         acquisition will be excluded; and

               (4)    the cumulative effect of a change in accounting principles
         will be excluded.

         "Corporate Trust Office of the Trustee" will be at the address of the
Trustee specified in Section 13.02 hereof or such other address as to which the
Trustee may give notice to the Company.

         "Credit Agreement" means that certain Amended and Restated Credit
Agreement, dated as of July 9, 2002, by and among the Company, the guarantors
party thereto, Fleet National Bank, as administrative agent, and the lenders
party thereto, including any related notes, guarantees, collateral documents,
instruments and agreements executed in connection therewith, and in each case as
amended (including any amendment and restatement thereof), modified, renewed,
refunded, replaced or refinanced from time to time, including any agreement
extending the maturity of, consolidating or otherwise restructuring (including
adding subsidiaries of the Company as additional guarantors thereunder) all or
any portion of the Indebtedness under such agreement or any successor or
replacement agreement and whether by the same or any other agent, lender or
group and whether or not increasing the amount of Indebtedness that may be
incurred thereunder.

         "Credit Facility" or "Credit Facilities" means, one or more debt
facilities (including, without limitation, the Credit Agreement) or commercial
paper facilities, in each case with banks or other institutional lenders
providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables) or letters
of credit, in each case, as amended, restated, modified, renewed, refunded,
replaced or refinanced in whole or in part from time to time, including any
agreement extending the maturity of, consolidating or otherwise restructuring
(including adding subsidiaries of the Company as additional guarantors
thereunder) all or any portion of the Indebtedness under such agreement or any
successor or replacement agreement and whether by the same or any other agent,
lender or group and whether or not increasing the amount of Indebtedness that
may be incurred thereunder.

         "Custodian" means the Trustee, as custodian with respect to the Notes
in global form, or any successor entity thereto.

         "Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.

                                       6



         "Definitive Note" means a certificated Note registered in the name of
the Holder thereof and issued in accordance with Section 2.06 hereof,
substantially in the form of Exhibit A-1 hereto except that such Note shall not
bear the Global Note Legend and shall not have the "Schedule of Exchanges of
Interests in the Global Note" attached thereto.

         "Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof as
the Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.

         "Designated Senior Debt" means:

               (1)    any Indebtedness outstanding under the Credit Agreement;
         and

               (2)    any other Senior Debt permitted under this Indenture the
         principal amount of which is $25.0 million or more (including amounts
         available under a committed facility) and that has been designated by
         the Company as "Designated Senior Debt."

         "Disqualified Stock" means 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 each case at the option of the holder of the Capital Stock), or
upon the happening of any event, matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or redeemable at the option of the
holder of the Capital Stock, in whole or in part, on or prior to the date that
is 91 days after the date on which the Notes mature. Notwithstanding the
preceding sentence, any Capital Stock that would constitute Disqualified Stock
solely because the holders of the Capital Stock have the right to require the
Company to repurchase such Capital Stock upon the occurrence of a change of
control or an asset sale shall not constitute Disqualified Stock if the terms of
such Capital Stock provide that the Company may not repurchase or redeem any
such Capital Stock pursuant to such provisions unless such repurchase or
redemption complies with the provisions of Section 4.07.

         "Dividend Limitation" means, with respect to Parent, the sum of (1) the
product of the Maximum Effective California Rate times California Taxable Income
except that the product of this clause (1) shall be zero in the event Parent
does not qualify (or subsequently elects not) to be treated as an S Corporation
for California income tax purposes, or the Company does not qualify (or
subsequently elects not) to be treated as a qualified subchapter S subsidiary;
plus (2) the product of the Maximum Federal Rate and Federal Taxable Income.

         "Domestic Subsidiary" means any Restricted Subsidiary of the Company
that was formed under the laws of the United States or any state of the United
States or the District of Columbia or that guarantees or otherwise provides
direct credit support for any Indebtedness of the Company.

         "Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).

         "Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear system.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended.

         "Exchange Notes" means the Notes issued in the Exchange Offer pursuant
to Section 2.06(f) hereof.

                                       7



         "Exchange Offer" has the meaning set forth in the Registration Rights
Agreement.

         "Exchange Offer Registration Statement" has the meaning set forth in
the Registration Rights Agreement.

         "Existing Indebtedness" means Indebtedness of the Company and its
Restricted Subsidiaries (other than Indebtedness under the Credit Agreement) in
existence on the date of this Indenture.

         "Existing Parent Notes" means the $30.0 million original aggregate
principal amount of Junior Subordinated Notes of Parent, plus accrued and unpaid
interest thereon, issued and outstanding under the Parent Securities Purchase
Documents and any other notes issued thereunder in accordance with the terms
thereof as such terms exist on the date of this Indenture, as any of the
foregoing may be amended or modified from time to time after the date of this
Indenture in a manner that is not materially adverse to the Holders.

         "Existing Parent Warrants" means the warrants for the purchase of
shares of common stock of Parent issued on March 20, 2001, as amended on the
date of this Indenture pursuant to the Parent Securities Purchase Documents and
any other warrants issued thereunder in accordance with the terms thereof as
such terms exist on the date of this Indenture, as any of the foregoing may be
amended or modified from time to time after the date of this Indenture in a
manner that is not materially adverse to the Holders.

         "Federal Taxable Income" means the taxable income of Parent for any
taxable year computed pursuant to Section 1363(b) (or any successor provision)
of the Code but calculated as if the taxable year of Parent ended on the date
with respect to which such taxable income calculation is made, reduced, but not
below zero, by the amount of any Suspended Losses which are treated as incurred
by Parent in, and allowed as deductions on the tax returns of Parent's
stockholders for, such taxable year.

         "FCC" means the Federal Communications Commission or any successor
thereto.

         "GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the date of this Indenture.

         "Global Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, substantially in the
form of Exhibit A hereto issued in accordance with Section 2.01, 2.06(b)(iii),
2.06(b)(iv), 2.06(d)(ii) or 2.06(f) hereof.

         "Global Note Legend" means the legend set forth in Section 2.06(g)(ii),
which is required to be placed on all Global Notes issued under this Indenture.

         "Governmental Authority" means any nation or government, any federal,
state or other political subdivision thereof and any federal, state or local
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.

         "Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America, and the payment for which the
United States pledges its full faith and credit.

                                       8



         "Guarantee" means a guarantee, other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.

         "Guarantors" means each of:

               (1)    the Company's Restricted Subsidiaries on the date of this
         Indenture; and

               (2)    any other subsidiary of the Company that executes a
         Subsidiary Guarantee in accordance with the provisions of this
         Indenture;

and their respective successors and assigns.

         "Hedging Obligations" means, with respect to any specified Person, the
obligations of such Person under:

               (1)    interest rate swap agreements, interest rate cap
         agreements and interest rate collar agreements; and

               (2)    other agreements or arrangements designed to protect such
         Person against fluctuations in currency exchange rates or interest
         rates.

         "Holder" means a Person in whose name a Note is registered.

         "Hollywood Office Property" means those certain properties located at
5724 Hollywood Blvd. and 5718 Hollywood Blvd., Los Angeles, Los Angeles County,
California.

         "IAI Global Note" means a Global Note substantially in the form of
Exhibit A-1 hereto bearing the Global Note Legend and the Private Placement
Legend and deposited with or on behalf of and registered in the name of the
Depositary or its nominee that will be issued in a denomination equal to the
outstanding principal amount of the Notes sold to Institutional Accredited
Investors.

         "Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent:

               (1)    in respect of borrowed money;

               (2)    evidenced by bonds, notes, debentures or similar
         instruments or letters of credit (or reimbursement agreements in
         respect thereof);

               (3)    in respect of banker's acceptances;

               (4)    representing Capital Lease Obligations;

               (5)    representing the balance deferred and unpaid of the
         purchase price of any property, except any such balance that
         constitutes an accrued expense or trade payable; or

               (6)    representing any Hedging Obligations (the amount of any
         such obligations to be equal at any time to the termination value of
         such agreement or arrangement giving rise to such obligation that would
         be payable by such Person at such time),

                                       9



if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the Guarantee
by the specified Person of any indebtedness of any other Person; provided that
Indebtedness shall not include the pledge of the Capital Stock of an
Unrestricted Subsidiary securing Non-Recourse Debt of that Unrestricted
Subsidiary. Notwithstanding anything in this definition to the contrary, any
obligations of the Company or any of its Restricted Subsidiaries to pay Shop At
Home Relocation Profits (including any Relocation Tax Benefits (as defined in
the Shop At Home Acquisition Documents)) to the Shop At Home Sellers under the
Shop At Home Acquisition Documents shall not be Indebtedness until such time as
such obligations are (i) due and payable (unless being contested in good faith)
or (ii) represented by a separate instrument.

         The amount of any Indebtedness outstanding as of any date will be:

               (1)    the accreted value of the Indebtedness, in the case of any
         Indebtedness issued with original issue discount; and

               (2)    the principal amount of the Indebtedness, together with
         any interest on the Indebtedness that is more than 30 days past due, in
         the case of any other Indebtedness.

         "Indenture" means this Indenture, as amended or supplemented from time
to time.

         "Indirect Participant" means a Person who holds a beneficial interest
in a Global Note through a Participant.

         "Initial Notes" means the first $150.0 million aggregate principal
amount of Notes issued under this Indenture on the date hereof.

         "Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who are not also QIBs.

         "Intermediate Holdings" means LBI Intermediate Holdings, Inc., a
California corporation and wholly owned subsidiary of Parent to be merged with
and into the Company.

         "Investments" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including Guarantees or other obligations), advances or capital
contributions (excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If the Company
or any Subsidiary of the Company sells or otherwise disposes of any Equity
Interests of any direct or indirect Subsidiary of the Company such that, after
giving effect to any such sale or disposition, such Person is no longer a
Subsidiary of the Company, the Company will be deemed to have made an Investment
on the date of any such sale or disposition equal to the fair market value of
the Company's Investments in such Subsidiary that were not sold or disposed of
in an amount determined as provided in the final paragraph of Section 4.07. The
acquisition by the Company or any Subsidiary of the Company of a Person that
holds an Investment in a third Person will be deemed to be an Investment by the
Company or such Subsidiary in such third Person in an amount equal to the fair
market value of the Investments held by the acquired Person in such third Person
in an amount determined as provided in the final paragraph of Section 4.07.

                                       10



         "Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue on
such payment for the intervening period.

         "Letter of Transmittal" means the letter of transmittal to be prepared
by the Company and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.

         "Leverage Ratio" means the ratio of (i) the sum of (A) the aggregate
outstanding amount of Indebtedness of each of the Company and the Restricted
Subsidiaries as of the last day of the most recently ended fiscal quarter for
which financial statements are internally available as of the date of
calculation on a combined consolidated basis in accordance with GAAP, plus (B)
the aggregate liquidation preference of all outstanding Disqualified Stock of
the Company and preferred stock of the Restricted Subsidiaries (except preferred
stock issued to the Company or a Restricted Subsidiary) as of the last day of
such fiscal quarter (in each case, subject to the terms described in the next
paragraph) to (ii) the aggregate Consolidated Cash Flow of the Company for the
last four full fiscal quarters for which financial statements are internally
available ending on or prior to the date of determination (the "Reference
Period").

         For purposes of this definition, the aggregate outstanding principal
amount of Indebtedness of the Company and the Restricted Subsidiaries and the
aggregate liquidation preference of all outstanding preferred stock of the
Restricted Subsidiaries for which such calculation is made shall be determined
on a pro forma basis as if the Indebtedness and preferred stock giving rise to
the need to perform such calculation had been incurred and issued and the
proceeds therefrom had been applied, and all other transactions in respect of
which such Indebtedness is being incurred or preferred stock is being issued had
occurred, on the first day of such Reference Period. In addition to the
foregoing, for purposes of this definition, the Leverage Ratio shall be
calculated on a pro forma basis after giving effect to (i) the incurrence of the
Indebtedness of such Person and the Restricted Subsidiaries and the issuance of
the preferred stock of such Subsidiaries (and the application of the proceeds
therefrom) giving rise to the need to make such calculation and any incurrence
(and the application of the proceeds therefrom) or repayment of other
Indebtedness or preferred stock, at any time subsequent to the beginning of the
Reference Period and on or prior to the date of determination (including any
such incurrence or issuance which is the subject of an Incurrence Notice
delivered to the Trustee during such period pursuant to clause (xi) of the
definition of Permitted Debt; provided, however, that Indebtedness shall not
include any Acquisition Debt that has been the subject of an Incurrence Notice
under clause (xi) of the definition of Permitted Debt at any time after such
Incurrence Notice has been withdrawn or after the passage of 365 days following
the giving of such Incurrence Notice if and to the extent such Acquisition Debt
has not then been incurred), as if such incurrence or issuance (and the
application of the proceeds thereof), or the repayment, as the case may be,
occurred on the first day of the Reference Period (except that, in making such
computation, the amount of Indebtedness under any revolving credit facility
shall be computed based upon the average balance of such Indebtedness at the end
of each month during such period) and (ii) any acquisition at any time on or
subsequent to the first day of the Reference Period and on or prior to the date
of determination (including any such incurrence or issuance which is the subject
of an Incurrence Notice delivered to the Trustee during such period pursuant to
clause (xi) of the definition of Permitted Debt subject to the proviso in clause
(i) above), as if such acquisition (including the incurrence, assumption or
liability for any such Indebtedness and the issuance of such preferred stock and
also including any Consolidated Cash Flow associated with such acquisition)
occurred on the first day of the Reference Period giving pro forma effect to any
non-recurring expenses, non-recurring costs and cost reductions within the first
year after such acquisition the Company reasonably anticipates in good faith if
the Company delivers to the Trustee an officer's certificate executed by an
executive officer of the Company certifying to and describing and

                                       11



quantifying with reasonable specificity such non-recurring expenses,
non-recurring costs and cost reductions. Furthermore, in calculating
consolidated interest expense for purposes of the calculation of Consolidated
Cash Flow, (a) interest on Indebtedness determined on a fluctuating basis as of
the date of determination (including Indebtedness actually incurred on the date
of the transaction giving rise to the need to calculate the Leverage Ratio) and
which will continue to be so determined thereafter shall be deemed to have
accrued at a fixed rate per annum equal to the rate of interest on such
Indebtedness as in effect on the date of determination and (b) notwithstanding
(a) above, interest determined on a fluctuating basis, to the extent such
interest is covered by Hedging Obligations, shall be deemed to accrue at the
rate per annum resulting after giving effect to the operation of such
agreements.

         "Liberman Subordinated Debt" means, collectively, the amended and
restated promissory notes dated March 20, 2001, executed by Liberman
Broadcasting, Inc. in favor of Jose Liberman and Lenard Liberman in original
aggregate principal amounts of $3,667,193 and $194,414, respectively, as in
effect on the date of this Indenture.

         "Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.

         "Liquidated Damages" means the liquidated damages to be paid by the
Company and the Guarantors in the event of a Registration Default (as defined in
the Registration Rights Agreement).

         "LMA" means a local marketing arrangement, joint sales agreement, time
brokerage agreement, shared service agreement, management agreement or similar
arrangement pursuant to which a Person, subject to customary preemption rights
and other limitations, (i) obtains the right to sell a portion of the
advertising inventory of a radio or television station of which a third party is
the licensee, (ii) obtains the right to exhibit programming and sell advertising
time during a portion of the air time of a radio or television station or (iii)
manages a portion of the operations of a radio or television station.

         "Management Incentive Contracts" means employment agreements between
Parent and employees providing for payments in the event that the net value of
Parent exceeds certain thresholds.

         "Maximum Effective California Rate" means the product of: (1) the
maximum California personal income tax rate imposed on individuals pursuant to
Section 17041(a) and (c) (or any successor provisions) of the California Revenue
and Tax Code times (2) the difference between one and the Maximum Federal Rate
expressed as a decimal.

         "Maximum Federal Rate" means the maximum Federal income tax rate
imposed on individuals pursuant to Section 1(a)-(d) (or any successor
provisions) of the Code, as adjusted pursuant to Section 15 (or any successor
provision) of the Code, if applicable.

         "Media Licenses" means any license, permit, certificate, ordinance,
approval or other authorization, or any renewal or extension thereof, from the
FCC that is necessary for the broadcast or other operations of the Company and
its Subsidiaries.

         "Net Income" means, with respect to any specified Person, the net
income (loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however: (1) any
gain (but not loss), together with any related provision for taxes on such gain

                                       12



(but not loss), realized in connection with: (a) any Asset Sale; or (b) the
disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries; and (2) any extraordinary gain (but not loss),
together with any related provision for taxes on such extraordinary gain (but
not loss).

         "Net Proceeds" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale or a
Relocation (including, without limitation, any cash received upon the sale or
other disposition of any non-cash consideration received in any Asset Sale), net
of (i) the costs directly related to such Asset Sale, including, without
limitation, legal, accounting and investment banking fees, and sales
commissions, and any relocation expenses incurred as a result of the Asset Sale,
(ii) taxes paid or estimated to be payable as a result of the Asset Sale (and to
the extent not included in the foregoing, that portion of any Permitted Holdings
Tax Distributions and Permitted Shareholder Tax Distributions attributable
thereto), in each case, after taking into account any available tax credits or
deductions and any tax sharing arrangements, (iii) amounts required to be
applied to the repayment of Indebtedness, (iv) any reserve for adjustment in
respect of the sale price of such asset or assets established in accordance with
GAAP, and (v) in addition to but without duplicating any amounts required to be
deducted from Net Proceeds under clauses (i) through (iv) above, Net Proceeds in
connection with any Relocation shall be net of (a) all reasonable costs (as
determined by the Company in its reasonable discretion) directly related to such
Relocation including, without limitation, (1) transaction expenses (including
professional advisor's or broker's fees and costs and financing and related
fees, commissions and expenses, including lender waiver fees), (2) engineering,
construction, equipment and moving costs, (3) marketing costs, (4) the estimated
aggregate amount of all obligations of the Company or any of its Restricted
Subsidiaries after such Relocation under leases with respect to which it is the
lessee immediately prior to such Relocation, (5) any penalties or liabilities
incurred (or estimated to be incurred) by the Company or any of its Restricted
Subsidiaries under contracts which cannot be terminated by the Company or any of
its Restricted Subsidiaries prior to such Relocation but which cannot be
performed or are no longer necessary (in the sole but reasonable discretion of
the Company) by the Company or any of its Restricted Subsidiaries following such
Relocation, (6) costs incurred in seeking governmental consents and permits
required as part of such Relocation and (7) costs incurred in seeking FCC
consent to move such replaced station's digital operations to the site of such
replacement station's analog operations (including all expenses of a type set
forth in other clauses of this definition) and (b) Shop At Home Relocation
Profits, including any Relocation Tax Benefits (as defined in the Shop At Home
Acquisition Documents), that are paid or payable to the Shop At Home Sellers
pursuant to the terms of the Shop At Home Acquisition Documents (it being
understood that any estimated amounts under this clause (v) shall be based on
good faith estimates of the Company on the date of the consummation of any
Relocation which were reasonable when made but such estimates shall be subject
to adjustment within 90 days thereafter).

         "Non-Recourse Debt" means Indebtedness:

               (1)    as to which neither the Company, the Guarantors, nor any
         of the Restricted Subsidiaries (a) provides credit support of any kind
         (including any undertaking, agreement or instrument that would
         constitute Indebtedness), (b) is directly liable as a guarantor or
         otherwise, or (c) constitutes the lender; and

               (2)    no default with respect to which (including any rights
         that the holders of the Indebtedness may have to take enforcement
         action against an Unrestricted Subsidiary) would permit upon notice,
         lapse of time or both any holder of any other Indebtedness (other than
         the Notes) of the Company, the Guarantors, or any of the Restricted
         Subsidiaries to declare a default on such other Indebtedness or cause
         the payment of the Indebtedness to be accelerated or payable prior to
         its stated maturity.

                                       13



         "Non-U.S. Person" means a Person who is not a U.S. Person.

         "Notes" has the meaning assigned to it in the preamble to this
Indenture. The Initial Notes, the Additional Notes and the Exchange Notes shall
be treated as a single class for all purposes under this Indenture.

         "Oaktree Notes" means the 21% senior subordinated notes of Intermediate
Holdings.

         "Oaktree Notes Repayment" means the repayment in full on the date of
this Indenture of all principal, interest and premium and other obligations in
respect of the Oaktree Notes as described under the heading "Use of Proceeds" in
the Company's offering circular dated June 28, 2002 relating to the Notes.

         "Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable
(including post-petition interest) under the documentation governing any
Indebtedness.

         "Offering" means the offering of the Notes by the Company.

         "Officer" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary or any Vice President or Executive Vice President of such Person.

         "Officers' Certificate" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 13.05 hereof.

         "Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
13.05 hereof. Such counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.

         "Parent" means LBI Holdings I, Inc., a California corporation, or any
successor.

         "Parent Debt Ratio" means the ratio of (i) the sum of (A) the aggregate
outstanding amount of Indebtedness of each of the Company and the Restricted
Subsidiaries as of the last day of the most recently ended fiscal quarter for
which financial statements are internally available as of the date of
calculation on a combined consolidated basis in accordance with GAAP plus (B)
Specified Parent Debt as of the last day of the most recently ended fiscal
quarter for which financial statements are internally available as of the date
of calculation plus (C) the aggregate liquidation preference of all outstanding
Disqualified Stock of the Company and preferred stock of the Restricted
Subsidiaries (except preferred stock issued to the Company or a Restricted
Subsidiary) as of the last day of such fiscal quarter (in each case, subject to
the terms described in the next paragraph) to (ii) the aggregate Consolidated
Cash Flow of Parent (and, for purposes of this definition, references in the
definition of "Consolidated Cash Flow" to Restricted Subsidiaries shall include
the Company) for the last four full fiscal quarters for which financial
statements are internally available ending on or prior to the date of
determination (the "Parent Reference Period").

         For purposes of this definition, the aggregate outstanding principal
amount of Specified Parent Debt and Indebtedness of the Company and the
Restricted Subsidiaries and the aggregate liquidation

                                       14



preference of all outstanding preferred stock of the Restricted Subsidiaries for
which such calculation is made shall be determined on a pro forma basis as if
the Specified Parent Debt and Indebtedness and preferred stock giving rise to
the need to perform such calculation had been incurred and issued and the
proceeds therefrom had been applied, and all other transactions in respect of
which such Specified Parent Debt or Indebtedness is being incurred or preferred
stock is being issued had occurred, on the first day of such Parent Reference
Period. In addition to the foregoing, for purposes of this definition, the
Parent Debt Ratio shall be calculated on a pro forma basis after giving effect
to (i) the incurrence of the Specified Parent Debt and the Indebtedness of the
Company and the Restricted Subsidiaries and the issuance of the preferred stock
of such Restricted Subsidiaries (and the application of the proceeds therefrom)
giving rise to the need to make such calculation and any incurrence (and the
application of the proceeds therefrom) or repayment of other Specified Parent
Debt or Indebtedness or preferred stock, at any time subsequent to the beginning
of the Parent Reference Period and on or prior to the date of determination
(including any such incurrence or issuance which is the subject of an Incurrence
Notice delivered to the Trustee during such period pursuant to clause (xi) of
the definition of Permitted Debt; provided, however, that Indebtedness shall not
include any Acquisition Debt that has been the subject of an Incurrence Notice
under clause (xi) of the definition of Permitted Debt at any time after such
Incurrence Notice has been withdrawn or after the passage of 365 days following
the giving of such Incurrence Notice if and to the extent such Acquisition Debt
has not then been incurred), as if such incurrence or issuance (and the
application of the proceeds thereof), or the repayment, as the case may be,
occurred on the first day of the Parent Reference Period (except that, in making
such computation, the amount of Indebtedness under any revolving credit facility
shall be computed based upon the average balance of such Indebtedness at the end
of each month during such period) and (ii) any acquisition at any time on or
subsequent to the first day of the Parent Reference Period and on or prior to
the date of determination (including any such incurrence or issuance which is
the subject of an Incurrence Notice delivered to the Trustee during such period
pursuant to clause (xi) of the definition of Permitted Debt subject to the
proviso in clause (i) above), as if such acquisition (including the incurrence,
assumption or liability for any such Specified Parent Debt or Indebtedness and
the issuance of such preferred stock and also including any Consolidated Cash
Flow associated with such acquisition) occurred on the first day of the Parent
Reference Period giving pro forma effect to any non-recurring expenses,
non-recurring costs and cost reductions within the first year after such
acquisition the Company reasonably anticipates in good faith if the Company
delivers to the Trustee an officer's certificate executed by an executive
officer of the Company certifying to and describing and quantifying with
reasonable specificity such non-recurring expenses, non-recurring costs and cost
reductions. Furthermore, in calculating consolidated interest expense for
purposes of the calculation of Consolidated Cash Flow, (a) interest on Specified
Parent Debt and Indebtedness determined on a fluctuating basis as of the date of
determination (including Indebtedness actually incurred on the date of the
transaction giving rise to the need to calculate the Parent Debt Ratio) and
which will continue to be so determined thereafter shall be deemed to have
accrued at a fixed rate per annum equal to the rate of interest on such
Indebtedness as in effect on the date of determination and (b) notwithstanding
(a) above, interest determined on a fluctuating basis, to the extent such
interest is covered by Hedging Obligations, shall be deemed to accrue at the
rate per annum resulting after giving effect to the operation of such
agreements.

         "Parent Securities Purchase Documents" means the Securities Purchase
Agreement dated as of March 20, 2001, as amended on July 9, 2002, governing the
Existing Parent Notes, the Warrant Agreement dated as of March 20, 2001, as
amended on July 9, 2002, governing the Existing Parent Warrants and documents
related to any of the foregoing, in each case, as amended or modified from time
to time after the date of this Indenture in a manner that is not materially
adverse to the Holders.

         "Participant" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to DTC, shall include Euroclear and
Clearstream).

                                       15



         "Permitted Asset Swap" means, with respect to any Person, the
substantially concurrent exchange of assets of such Person (including Equity
Interests of a Restricted Subsidiary) for assets of another Person, which assets
are useful in a Permitted Business.

         "Permitted Business" means any business of the type engaged in by the
Company or its Restricted Subsidiaries as of the date of this Indenture or any
business reasonably related, ancillary or complementary thereto.

         "Permitted Dividend Amount" means, for any taxable period, the amount
(determined by a Tax Accountant) by which the Dividend Limitation for the
taxable year exceeds the aggregate Permitted Shareholder Tax Distributions paid
by the Company for such year pursuant to Section 4.07, including distributions
paid or loans made by the Company within 105 days after the end of the taxable
year for which a distribution is paid or loan is made; provided, that:

               (1)    if, at the end of any taxable year of the Company, the
         Dividend Limitation for such year exceeds the aggregate Permitted
         Shareholder Tax Distributions paid by the Company for such year
         pursuant to Section 4.07, such excess shall be ignored for purposes of
         computing the Permitted Dividend Amount for any subsequent period;

               (2)    if, at the end of any taxable year of the Company, the
         aggregate Permitted Shareholder Tax Distributions paid by the Company
         for such year pursuant to Section 4.07 exceed the Dividend Limitation,
         the Permitted Dividend Amount shall be zero and such excess shall be
         included and credited in the calculation of the aggregate Permitted
         Shareholder Tax Distributions paid by the Company for the following
         taxable year(s); and

               (3)    if Parent's S Corporation election made pursuant to Code
         Section 1362 (or any successor provision) shall be determined to be
         invalid, or is revoked or terminated, or the QSSS Election shall cease
         to be in effect for the Company, the Permitted Dividend Amount for the
         Company shall be zero from and after the date of such invalidity,
         revocation or termination.

         "Permitted Holdings Tax Distributions" means cash distributions or
loans (to be computed by the Tax Accountant) from the Company to Parent in
respect of any taxable year equal to the sum of estimated and final state income
taxes paid or payable by Parent which are attributable to the taxable income of
the Company for such taxable year calculated as though the Company were an S
Corporation. If in any year Parent is required to pay additional taxes with
respect to a prior year's tax return which are attributable to the taxable
income of the Company calculated as though the Company were an S Corporation
(whether because of an audit by a taxing authority, an amended return the filing
of which is required in the reasonable judgment of Parent or otherwise), the
amount of Permitted Holdings Tax Distributions which may be paid or loaned in
such year shall be increased by the amount of such additional taxes.

         "Permitted Investments" means:

               (1)    any Investment in the Company or in a Restricted
         Subsidiary;

               (2)    any Investment in Cash Equivalents;

               (3)    any Investment by the Company or any Restricted Subsidiary
         in a Person, if as a result of such Investment:

                           (a)   such Person becomes a Restricted Subsidiary of
                      the Company; or

                                       16



                           (b)   such Person is merged, consolidated or
                      amalgamated with or into, or transfers or conveys
                      substantially all of its assets to, or is liquidated into,
                      the Company or a Restricted Subsidiary of the Company;

               (4)    any Investment made as a result of the receipt of non-cash
         consideration from an Asset Sale that was made pursuant to and in
         compliance with Section 4.10;

               (5)    any acquisition of assets (including Investments in
         Unrestricted Subsidiaries) solely in exchange for the issuance of
         Equity Interests (other than Disqualified Stock) of the Company or
         Parent;

               (6)    any Investments received in compromise of obligations of
         trade creditors or customers that were incurred in the ordinary course
         of business, including pursuant to any plan of reorganization or
         similar arrangement upon the bankruptcy or insolvency of any trade
         creditor or customer;

               (7)    Hedging Obligations;

               (8)    loans and advances to employees of the Company and its
         Restricted Subsidiaries and loans to Affiliates of the Company and
         other Persons not in excess of $5.0 million in aggregate principal
         amount at any time outstanding and the cancellation or forgiveness
         thereof; provided, however, that no such cancellation or forgiveness
         shall increase the aggregate amount of loans or advances otherwise
         permitted under this clause (8);

               (9)    the loan by the Company to Intermediate Holdings for the
         Oaktree Notes Repayment and the cancellation or forgiveness thereof and
         any intercompany loan made by Intermediate Holdings to Parent prior to
         the date of this Indenture (the ownership of which is transferred from
         Intermediate Holdings to the Company by operation of law in connection
         with the merger of Intermediate Holdings with and into the Company) and
         the cancellation or forgiveness thereof;

               (10)   the receipt by the Company of notes from one or more
         employees of the Company or any Restricted Subsidiary of the Company in
         connection with such employees' acquisition of shares of Parent's
         common stock and any cancellation or forgiveness thereof, so long as no
         cash is advanced by the Company or any Restricted Subsidiary of the
         Company to such officers or employees or Parent in connection with the
         acquisition of any such obligations or the cancellation or forgiveness
         thereof;

               (11)   escrow deposits made pursuant to Investments permitted
         hereunder or acquisitions;

               (12)   Investments made in connection with, or accepted as
         consideration in a Relocation;

               (13)   Investments relating to LMAs entered into in connection
         with independently owned broadcast properties, not to exceed an
         aggregate of $10.0 million;

               (14)   the loan to Lenard Liberman on the date of this Indenture
         as described under the heading "Use of Proceeds" in the Company's
         offering circular dated June 28, 2002 relating to the Notes and any
         cancellation or forgiveness thereof; and

                                       17



               (15)   other Investments in any Person having an aggregate fair
         market value (measured on the date each such Investment was made and
         without giving effect to subsequent changes in value), when taken
         together with all other Investments made pursuant to this clause (15)
         that are at the time outstanding not to exceed $5.0 million.

         "Permitted Junior Securities" means:

               (1)    Equity Interests in the Company or, subject to the terms
         of the Credit Agreement, any Guarantor; or

               (2)    debt securities that are subordinated to all Senior Debt
         and any debt securities 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 this Indenture.

         "Permitted Liens" means:

               (1)    Liens of the Company and any Guarantor securing
         Indebtedness and other Obligations under Credit Facilities or securing
         other Senior Debt permitted by the terms of this Indenture to be
         incurred;

               (2)    Liens in favor of the Company or any Restricted
         Subsidiary;

               (3)    Liens on property of a Person existing at the time such
         Person is merged with or into or consolidated with the Company or any
         Restricted Subsidiary; provided that such Liens were in existence prior
         to the contemplation of such merger or consolidation and do not extend
         to any assets other than those of the Person merged into or
         consolidated with the Company or the Restricted Subsidiary;

               (4)    Liens on property existing at the time of acquisition of
         the property by the Company or any Restricted Subsidiary; provided that
         such Liens were in existence prior to the contemplation of such
         acquisition;

               (5)    Liens to secure the performance of statutory obligations,
         surety or appeal bonds, performance bonds or other obligations of a
         like nature incurred in the ordinary course of business;

               (6)    Liens to secure Indebtedness (including Capital Lease
         Obligations) permitted by clause (iv) of the second paragraph of
         Section 4.09 covering only the assets acquired with such Indebtedness;

               (7)    Liens existing on the date of this Indenture;

               (8)    Liens for taxes, assessments or governmental charges or
         claims that are not yet delinquent or that are being contested in good
         faith by appropriate proceedings promptly instituted and diligently
         concluded; provided that any reserve or other appropriate provision as
         is required in conformity with GAAP has been made therefor;

               (9)    Liens on assets of Unrestricted Subsidiaries that secure
         Non-Recourse Debt of Unrestricted Subsidiaries;

                                       18



               (10)   Liens to secure Indebtedness that is pari passu in right
         of payment with the Notes; provided that the Notes are equally and
         ratably secured thereby;

               (11)   Liens securing Permitted Refinancing Indebtedness where
         the Liens securing indebtedness being refinanced were permitted under
         this Indenture;

               (12)   easements, rights-of-way, zoning and similar restrictions
         and other similar encumbrances or title defects incurred or imposed, as
         applicable, in the ordinary course of business and consistent with
         industry practices;

               (13)   any interest or title of a lessor under any Capital Lease
         Obligation;

               (14)   Liens securing reimbursement obligations with respect to
         letters of credit which encumber documents and other property relating
         to letters of credit and products and proceeds thereof;

               (15)   Liens encumbering deposits made to secure statutory,
         regulatory, contractual or warranty obligations, including rights of
         offset and set-off;

               (16)   Liens securing Hedging Obligations permitted under this
         Indenture;

               (17)   leases or subleases granted to others;

               (18)   Liens under licensing agreements;

               (19)   Liens arising from filing Uniform Commercial Code
         financing statements regarding leases;

               (20)   judgment Liens not giving rise to an Event of Default;

               (21)   Liens encumbering property of the Company or a Restricted
         Subsidiary consisting of carriers, warehousemen, mechanics,
         materialmen, repairmen and landlords, and other Liens arising by
         operation of law and incurred in the ordinary course of business for
         sums that are not overdue or that are being contested in good faith by
         appropriate proceedings and (if so contested) for which appropriate
         reserves with respect thereto have been established and maintained on
         the books of the Company or a Restricted Subsidiary in accordance with
         GAAP;

               (22)   Liens encumbering property of the Company or a Restricted
         Subsidiary incurred in the ordinary course of business in connection
         with workers' compensation, unemployment insurance, or other forms of
         governmental insurance or benefits, or to secure performance of bids,
         tenders, statutory obligations, leases, and contracts (other than for
         Indebtedness for borrowed money) entered into in the ordinary course of
         business of the Company or a Restricted Subsidiary; and

               (23)   bankers' liens in the nature of rights of setoff arising
         in the ordinary course of business of the Company or any of its
         Restricted Subsidiaries.

         "Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); provided that:

                                       19



               (1)    the principal amount (or accreted value, if applicable) of
         such Permitted Refinancing Indebtedness does not exceed the principal
         amount (or accreted value, if applicable) of the Indebtedness extended,
         refinanced, renewed, replaced, defeased or refunded (plus all accrued
         interest on the Indebtedness and the amount of all expenses and
         premiums incurred in connection therewith);

               (2)    such Permitted Refinancing Indebtedness has a final
         maturity date later than the final maturity date of, and has a Weighted
         Average Life to Maturity equal to or greater than the Weighted Average
         Life to Maturity of, the Indebtedness being extended, refinanced,
         renewed, replaced, defeased or refunded;

               (3)    if the Indebtedness being extended, refinanced, renewed,
         replaced, defeased or refunded is subordinated in right of payment to
         the Notes, such Permitted Refinancing Indebtedness has a final maturity
         date later than the final maturity date of, and is subordinated in
         right of payment to, the Notes on terms at least as favorable to the
         Holders of Notes as those contained in the documentation governing the
         Indebtedness being extended, refinanced, renewed, replaced, defeased or
         refunded; and

               (4)    such Indebtedness is incurred either by the Company or by
         the Restricted Subsidiary who is the obligor on the Indebtedness being
         extended, refinanced, renewed, replaced, defeased or refunded.

         "Permitted Shareholder Tax Distributions" means cash distributions or
loans in amounts computed by a Tax Accountant and made by the Company to Parent
or the shareholders of Parent to permit the shareholders of Parent to pay their
estimated and final federal and state income tax liabilities attributable to the
income of the Company calculated as though the Company were an S Corporation.
Permitted Shareholder Tax Distributions may not be made more frequently than
quarterly with respect to each period for which an installment of estimated tax
would be required to be paid by the shareholders of Parent; provided, however,
that the amount of such distributions or loans shall not exceed the Permitted
Dividend Amount. For purposes of computing the amount of aggregate Permitted
Shareholder Tax Distributions for any taxable year, amounts paid in such taxable
year by the Company to the State of California on behalf of nonresident
shareholders as estimated taxes or as withholding taxes pursuant to the
California Revenue and Taxation Code shall be treated as Permitted Shareholder
Tax Distributions. If nonresident shareholders recontribute to the Company any
such amounts paid on their behalf, however, the amounts contributed shall be
subtracted from the amount of aggregate Permitted Shareholder Tax Distributions
for the taxable year in which the contributions are made. If, in any year
Parent's shareholders are required to pay additional taxes with respect to a
prior year's tax return which are attributable to the taxable income of the
Company calculated as through the Company were an S Corporation (whether because
of an audit by a taxing authority, an amended return the filing of which is
required in the reasonable judgment of Parent, or otherwise), the amount of
Permitted Shareholder Tax Distributions which may be paid in such year shall be
increased by the amount of such additional taxes as determined by a Tax
Accountant.

         "Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.

         "Principals" means Jose Liberman and Lenard Liberman.

         "Private Placement Legend" means the legend set forth in Section
2.06(g)(i) to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.

                                       20



         "Public Equity Offering" means an underwritten primary public offering
of common stock of the Company or Parent; provided, however, that in the event
of a Public Equity Offering by Parent, all or a portion of the net proceeds
therefrom are contributed to the Company.

         "QIB" means a "qualified institutional buyer" as defined in Rule 144A.

         "QSSS Election" means the election to treat any Person as a qualified
Subchapter S subsidiary pursuant to Code Section 1361(b)(3) (or any successor
provision).

         "Registration Rights Agreement" means the Registration Rights
Agreement, dated as of July 9, 2002, by and among the Company and the other
parties named on the signature pages thereof, as such agreement may be amended,
modified or supplemented from time to time, and, with respect to any Additional
Notes, one or more registration rights agreements between the Company and the
other parties thereto, as such agreement(s) may be amended, modified or
supplemented from time to time, relating to rights given by the Company to the
purchasers of Additional Notes to register such Additional Notes under the
Securities Act.

         "Regulation S" means Regulation S promulgated under the Securities Act.

         "Regulation S Global Note" means a Regulation S Temporary Global Note
or Regulation S Permanent Global Note, as appropriate.

         "Regulation S Permanent Global Note" means a permanent Global Note in
the form of Exhibit A-1 hereto bearing the Global Note Legend and the Private
Placement Legend and deposited with or on behalf of and registered in the name
of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount of the Regulation S Temporary Global Note upon
expiration of the Restricted Period.

         "Regulation S Temporary Global Note" means a temporary Global Note in
the form of Exhibit A-2 hereto bearing the Private Placement Legend and
deposited with or on behalf of and registered in the name of the Depositary or
its nominee, issued in a denomination equal to the outstanding principal amount
of the Notes initially sold in reliance on Rule 903 of Regulation S.

         "Related Party" means:

               (1)    any family member, spouse, heir, devisee, executor or
         similar legal representative of any Principal; or

               (2)    any trust, corporation, partnership or other entity, the
         beneficiaries, stockholders, partners, owners or Persons beneficially
         holding an 80% or more controlling interest of which consist of any one
         or more Principals and/or such other Persons referred to in the
         immediately preceding clause (1).

         "Relocation" means with respect to any television broadcast station,
(a) any transaction in which a 700 MHz Holder (or any other Person) offers
consideration (which consideration consists of a different frequency or
frequencies and/or cash or non-cash consideration) to the Company or any
Guarantor for the cessation of broadcasting on any of the analogue and/or
digital frequencies of such broadcast station in order to accommodate the
spectrum needs of such 700 MHz Holder, including the prevention of interference
with such 700 MHz Holder's operations, and the Company or any Guarantor is not
ordered or directly or indirectly required by the FCC or any other Governmental
Authority to enter into such transaction, or (b) any transaction in which the
FCC or any other Governmental Authority orders or

                                       21



otherwise directly or indirectly requires the Company or any Guarantor to cease
broadcasting on any of its existing analogue and/or digital frequencies in order
to accommodate the spectrum needs of any 700 MHz Holder, including the
prevention of interference with such 700 MHz Holder's operations, with or
without any consideration; it being understood that without limiting the
generality of the foregoing, the term "Relocation" will include any Relocation
as defined in the Shop At Home Acquisition Documents as in effect on March 20,
2001.

         "Representative" means, as the case may be, a trustee, agent or
representative appointed for the holders of any Senior Debt under an agreement
to which such Senior Debt was issued.

         "Restricted Definitive Note" means a Definitive Note bearing the
Private Placement Legend.

         "Restricted Global Note" means a Global Note bearing the Private
Placement Legend.

         "Restricted Investment" means an Investment other than a Permitted
Investment.

         "Restricted Period" means the 40-day restricted period as defined in
Regulation S.

         "Restricted Subsidiary" means any Subsidiary of the Company that is not
an Unrestricted Subsidiary.

         "Rule 144" means Rule 144 promulgated under the Securities Act.

         "Rule 144A" means Rule 144A promulgated under the Securities Act.

         "Rule 903" means Rule 903 promulgated under the Securities Act.

         "Rule 904" means Rule 904 promulgated the Securities Act.

         "S Corporation" means a small business corporation within the meaning
of Code Section 1361 (or any successor provision) for which an election is in
effect under Code Section 1362(a) (or any successor provision).

         "SEC" means the Securities and Exchange Commission.

         "Securities Act" means the Securities Act of 1933, as amended.

         "Senior Debt" means:

               (1)    the Indebtedness of the Company or any Restricted
         Subsidiary outstanding under Credit Facilities and all Hedging
         Obligations with respect thereto;

               (2)    any other Indebtedness of the Company or any Guarantor
         permitted to be incurred under the terms of this Indenture, unless the
         instrument under which such Indebtedness is incurred expressly provides
         that it is on a parity with or subordinated in right of payment to the
         Notes or any Subsidiary Guarantee; and

               (3)    all Obligations with respect to the items listed in the
         preceding clauses (1) and (2).

               Notwithstanding anything to the contrary in the preceding,
Senior Debt will not include:

                                       22



               (1)    any liability for federal, state, local or other taxes
         owed or owing by the Company or any Restricted Subsidiary;

               (2)    any intercompany Indebtedness of the Company or any of its
         Restricted Subsidiaries to the Company or any of its Affiliates;

               (3)    any trade payables; or

               (4)    the portion of any Indebtedness that is incurred in
         violation of this Indenture; provided that such Indebtedness shall be
         deemed not to have been incurred in violation of this Indenture for
         purposes of this clause (4) if such Indebtedness consists of
         Indebtedness under any Credit Facility and holders of such Indebtedness
         or their agent or representative (i) had no actual knowledge at the
         time of the incurrence that the incurrence of such Indebtedness
         violated this Indenture and (ii) shall have received an Officers'
         Certificate to the effect that the incurrence of such Indebtedness does
         not violate the provisions of this Indenture (but nothing in this
         clause (4) shall preclude the existence of any Default or Event of
         Default in the event that the Indebtedness is in fact incurred in
         violation of this Indenture).

         "700 MHz Holder" means a holder of a 700 MHz license or construction
permit.

         "Shelf Registration Statement" means the Shelf Registration Statement
as defined in the Registration Rights Agreement.

         "Shop At Home Acquisition Documents" means that certain Asset Purchase
Agreement dated as of November 10, 2000, among the Company, Liberman Television
of Houston, Inc., KZJL License Corp. and the Shop At Home Sellers, as amended,
in respect of the acquisition by Liberman Television of Houston, Inc. and KZJL
License Corp. of the Broadcast Station KZJL-TV in Houston, Texas.

         "Shop At Home Relocation" means a Relocation that constitutes a
Voluntary Relocation or specified Involuntary Relocation as defined in the Shop
At Home Acquisition Documents.

         "Shop At Home Relocation Profits" means Relocation Profits (as defined
in the Shop At Home Acquisition Documents) received by the Company pursuant to a
Shop At Home Relocation which entitles Shop At Home Sellers to a portion of such
Relocation Profit.

         "Shop At Home Sellers" means Shop At Home, Inc., SAH-Houston
Corporation, SAH-Houston License Corp. and SAH License, Inc.

         "Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.

         "Specified Parent Debt" means indebtedness of Parent other than (i)
indebtedness under the Existing Parent Notes, (ii) indebtedness under any note
issued by Parent to satisfy its obligations under the Management Incentive
Contracts, (iii) any indebtedness owing to the Company or any of its Restricted
Subsidiaries and (iv) indebtedness of any Subsidiary of Parent.

         "Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which the payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to

                                       23



repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.

         "Subsidiary" means, with respect to any specified Person:

               (1)    any corporation, association or other business entity of
         which more than 50% of the total voting power of shares of Capital
         Stock entitled (without regard to the occurrence of any contingency) to
         vote in the election of directors, managers or trustees of the
         corporation, association or other business entity is at the time owned
         or controlled, directly or indirectly, by that Person or one or more of
         the other Subsidiaries of that Person (or a combination thereof); and

               (2)    any partnership (a) the sole general partner or the
         managing general partner of which is such Person or a Subsidiary of
         such Person or (b) the only general partners of which are that Person
         or one or more Subsidiaries of that Person (or any combination
         thereof).

         "Subsidiary Guarantee" means the Guarantee by each Guarantor of the
Company's payment obligations under this Indenture and on the Notes, executed
pursuant to the provisions of this Indenture.

         "Suspended Losses" means the aggregate amount of losses and deductions
of Parent which have been taken into account by the shareholders of Parent and
disallowed under Code Section 1366(d) (or any successor provision) in a prior
taxable year.

         "Tax Accountant" means any one of the five largest nationally
recognized independent accounting firms, or any other independent accounting
firm jointly approved by the Trustee and the Company.

         "TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S)
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.

         "Trust Officer," when used with respect to the Trustee, means any
officer within the corporate trust administration group of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any such officers and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of his knowledge of and familiarity with
the particular subject.

         "Trustee" means the party named as such in the preamble to this
Indenture until a successor replaces it in accordance with the applicable
provisions of this Indenture and thereafter means the successor serving
hereunder.

         "Unrestricted Global Note" means a permanent Global Note substantially
in the form of Exhibit A-1 attached hereto that bears the Global Note Legend and
that has the "Schedule of Exchanges of Interests in the Global Note" attached
thereto, and that is deposited with or on behalf of and registered in the name
of the Depositary, representing a series of Notes that do not bear the Private
Placement Legend.

         "Unrestricted Definitive Note" means one or more Definitive Notes that
do not bear and are not required to bear the Private Placement Legend.

         "Unrestricted Subsidiary" means any Subsidiary of the Company that is
designated by the Board of Directors of the Company as an Unrestricted
Subsidiary pursuant to a resolution of the Board of Directors, but only to the
extent that such Subsidiary:

                                       24



               (1)    has no Indebtedness other than Non-Recourse Debt;

               (2)    is not party to any agreement, contract, arrangement or
         understanding with the Company or any Restricted Subsidiary of the
         Company unless the terms of any such agreement, contract, arrangement
         or understanding are no less favorable to the Company or such
         Restricted Subsidiary than those that might be obtained at the time
         from Persons who are not Affiliates of the Company;

               (3)    is a Person with respect to which neither the Company nor
         any of its Restricted Subsidiaries has any direct or indirect
         obligation (a) to subscribe for additional Equity Interests or (b) to
         maintain or preserve such Person's financial condition or to cause such
         Person to achieve any specified levels of operating results; and

               (4)    has not guaranteed or otherwise directly or indirectly
         provided credit support for any Indebtedness of the Company or any of
         its Restricted Subsidiaries.

         Any designation of a Subsidiary of the Company as an Unrestricted
Subsidiary will be evidenced to the Trustee by filing with the Trustee a
certified copy of the resolution of the Board of Directors of the Company giving
effect to such designation and an Officers' Certificate certifying that such
designation complied with the preceding conditions and was permitted by the
terms of Section 4.07 hereof. If, at any time, any Unrestricted Subsidiary would
fail to meet the preceding requirements as an Unrestricted Subsidiary, it will
thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture
and any Indebtedness of such Subsidiary will be deemed to be incurred by a
Restricted Subsidiary of the Company as of such date and, if such Indebtedness
is not permitted to be incurred as of such date pursuant to Section 4.09, the
Company will be in default under such section. The Board of Directors of the
Company may at any time designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided that such designation will be deemed to be an incurrence of
Indebtedness by a Restricted Subsidiary of the Company of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation will only be
permitted if (1) such Indebtedness is permitted pursuant to Section 4.09,
calculated on a pro forma basis as if such designation had occurred at the
beginning of the four-quarter reference period; and (2) no Default or Event of
Default would be in existence following such designation.

         "U.S. Person" means a U.S. person as defined in Rule 902(o) under the
Securities Act.

         "Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.

         "Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:

               (1)    the sum of the products obtained by multiplying (a) the
         amount of each then remaining installment, sinking fund, serial
         maturity or other required payments of principal, including payment at
         final maturity, in respect of the Indebtedness, by (b) the number of
         years (calculated to the nearest one-twelfth) that will elapse between
         such date and the making of such payment; by

               (2)    the then outstanding principal amount of such
         Indebtedness.

         "Wholly Owned Restricted Subsidiary" of any specified Person means a
Restricted Subsidiary of such Person all of the outstanding Capital Stock or
other ownership interests of which (other than

                                       25



directors' qualifying shares) will at the time be owned by such Person or by one
or more Wholly Owned Restricted Subsidiaries of such Person.

Section 1.02.    Other Definitions.

                                                                      Defined in
        Term                                                            Section
        ----                                                            -------
        "Affiliate Transaction" ....................................     4.11
        "Asset Sale Offer" .........................................     3.09
        "Authentication Order" .....................................     2.02
        "Change of Control Offer" ..................................     4.15
        "Change of Control Payment" ................................     4.15
        "Change of Control Payment Date" ...........................     4.15
        "Covenant Defeasance" ......................................     8.03
        "DTC" ......................................................     2.03
        "Event of Default" .........................................     6.01
        "Excess Proceeds" ..........................................     4.10
        "incur" ....................................................     4.09
        "Incurrence Notice" ........................................     4.09
        "Insignificant Subsidiaries" ...............................     6.01
        "Legal Defeasance" .........................................     8.02
        "Offer Amount" .............................................     3.09
        "Offer Period" .............................................     3.09
        "Paying Agent" .............................................     2.03
        "Payment Blockage Notice" ..................................     10.03
        "Payment Default" ..........................................     6.01
        "Permitted Debt" ...........................................     4.09
        "Purchase Date" ............................................     3.09
        "Registrar" ................................................     2.03
        "Restricted Payments" ......................................     4.07

Section 1.03.    Incorporation by Reference of Trust Indenture Act.

         Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.

         The following TIA term used in this Indenture has the following
meaning:

         "obligor" on the Notes and the Subsidiary Guarantees means the Company
and the Guarantors, respectively, and any successor obligor upon the Notes and
the Subsidiary Guarantees, respectively.

         All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.

Section 1.04.    Rules of Construction.

         Unless the context otherwise requires:

         (a)     a term has the meaning assigned to it;

                                       26



         (b)     an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;

         (c)     "or" is not exclusive;

         (d)     words in the singular include the plural, and in the plural
include the singular;

         (e)     "will" shall be interpreted to express a command;

         (f)     provisions apply to successive events and transactions; and

         (g)     references to sections of or rules under the Securities Act
will be deemed to include substitute, replacement of successor sections or rules
adopted by the SEC from time to time.

                                   ARTICLE 2.
                                    THE NOTES

Section 2.01.    Form and Dating.

         (a)     General. The Notes and the Trustee's certificate of
authentication will be substantially in the form of Exhibit A hereto. The Notes
may have notations, legends or endorsements required by law, stock exchange rule
or usage. Each Note will be dated the date of its authentication. The Notes
shall be in denominations of $1,000 and integral multiples thereof.

         The terms and provisions contained in the Notes will constitute, and
are hereby expressly made, a part of this Indenture; and the Company, the
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby. However,
to the extent any provision of any Note conflicts with the express provisions of
this Indenture, the provisions of this Indenture shall govern and be
controlling.

         (b)     Global Notes. Notes issued in global form will be substantially
in the form of Exhibit A-1 or A-2 attached hereto (including the Global Note
Legend thereon and the "Schedule of Exchanges of Interests in the Global Note"
attached thereto). Notes issued in definitive form will be substantially in the
form of Exhibit A-1 attached hereto (but without the Global Note Legend thereon
and without the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Each Global Note will represent such of the outstanding Notes as will
be specified therein and each shall provide that it represents the aggregate
principal amount of outstanding Notes from time to time endorsed thereon and
that the aggregate principal amount of outstanding Notes represented thereby may
from time to time be reduced or increased, as appropriate, to reflect exchanges
and redemptions. Any endorsement of a Global Note to reflect the amount of any
increase or decrease in the aggregate principal amount of outstanding Notes
represented thereby will be made by the Trustee or the Custodian, at the
direction of the Trustee, in accordance with instructions given by the Holder
thereof as required by Section 2.06 hereof.

         (c)     Temporary Global Notes. Notes offered and sold in reliance on
Regulation S will be issued initially in the form of the Regulation S Temporary
Global Note, which will be deposited on behalf of the purchasers of the Notes
represented thereby with the Trustee, at its New York office, as custodian for
the Depositary, and registered in the name of the Depositary or the nominee of
the Depositary for the accounts of designated agents holding on behalf of
Euroclear or Clearstream, duly executed by the Company and authenticated by the
Trustee as hereinafter provided. The Restricted Period will be terminated upon
the receipt by the Trustee of:

                                       27



                (i)     a written certificate from the Depositary, together with
         copies of certificates from Euroclear and Clearstream certifying that
         they have received certification of non-United States beneficial
         ownership of 100% of the aggregate principal amount of the Regulation S
         Temporary Global Note (except to the extent of any beneficial owners
         thereof who acquired an interest therein during the Restricted Period
         pursuant to another exemption from registration under the Securities
         Act and who will take delivery of a beneficial ownership interest in a
         144A Global Note or an IAI Global Note bearing a Private Placement
         Legend, all as contemplated by Section 2.06(a)(ii) hereof); and

                (ii)    an Officers' Certificate from the Company.

         Following the termination of the Restricted Period, beneficial
interests in the Regulation S Temporary Global Note will be exchanged for
beneficial interests in Regulation S Permanent Global Notes pursuant to the
Applicable Procedures. Simultaneously with the authentication of Regulation S
Permanent Global Notes, the Trustee will cancel the Regulation S Temporary
Global Note. The aggregate principal amount of the Regulation S Temporary Global
Note and the Regulation S Permanent Global Notes may from time to time be
increased or decreased by adjustments made on the records of the Trustee and the
Depositary or its nominee, as the case may be, in connection with transfers of
interest as hereinafter provided.

         (d)    Euroclear and Clearstream Procedures Applicable. The provisions
of the "Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of
Clearstream" and "Customer Handbook" of Clearstream will be applicable to
transfers of beneficial interests in the Regulation S Temporary Global Note and
the Regulation S Permanent Global Notes that are held by Participants through
Euroclear or Clearstream.

Section 2.02.   Execution and Authentication.

         One Officer will sign the Notes for the Company by manual or facsimile
signature.

         If an Officer whose signature is on a Note no longer holds that office
at the time a Note is authenticated, the Note will nevertheless be valid.

         A Note will not be valid until authenticated by the manual signature of
the Trustee. The signature will be conclusive evidence that the Note has been
authenticated under this Indenture.

         The Trustee will, upon a written order of the Company signed by an
Officer (an "Authentication Order"), authenticate Notes for original issue up to
the aggregate principal amount stated in paragraph 4 of the Initial Notes plus
the aggregate principal amount stated in paragraph 4 of any Additional Notes
permitted to be issued under this Indenture. The aggregate principal amount of
Notes outstanding at any time may not exceed such amount except as provided in
Section 2.07 hereof.

         The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Company.

Section 2.03.   Registrar and Paying Agent.

         The Company will maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment

                                       28



("Paying Agent"). The Registrar will keep a register of the Notes and of their
transfer and exchange. The Company may appoint one or more co-registrars and one
or more additional paying agents. The term "Registrar" includes any co-registrar
and the term "Paying Agent" includes any additional paying agent. The Company
may change any Paying Agent or Registrar without notice to any Holder. The
Company will notify the Trustee in writing of the name and address of any Agent
not a party to this Indenture. If the Company fails to appoint or maintain
another entity as Registrar or Paying Agent, the Trustee shall act as such. The
Company or any of its Subsidiaries may act as Paying Agent or Registrar.

         The Company initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Notes.

         The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Custodian with respect to the Global Notes.

Section 2.04.   Paying Agent to Hold Money in Trust.

         The Company will require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or Liquidated Damages, if any, or interest on the Notes, and
will notify the Trustee of any default by the Company in making any such
payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) will have no further liability for the money. If the Company or a
Subsidiary acts as Paying Agent, it will segregate and hold in a separate trust
fund for the benefit of the Holders all money held by it as Paying Agent. Upon
any bankruptcy or reorganization proceedings relating to the Company, the
Trustee will serve as Paying Agent for the Notes.

Section 2.05.   Holder Lists.

         The Trustee will preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA (S) 312(a). If the Trustee is
not the Registrar, the Company will furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Company shall otherwise comply with TIA (S) 312(a).

Section 2.06.   Transfer and Exchange.

         (a)    Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged by
the Company for Definitive Notes if:

                (i)    the Company delivers to the Trustee notice from the
         Depositary that it is unwilling or unable to continue to act as
         Depositary or that it is no longer a clearing agency registered under
         the Exchange Act and, in either case, a successor Depositary is not
         appointed by the Company within 120 days after the date of such notice
         from the Depositary; or

                                       29



                (ii)    the Company in its sole discretion determines that the
         Global Notes (in whole but not in part) should be exchanged for
         Definitive Notes and delivers a written notice to such effect to the
         Trustee; provided that in no event shall the Regulation S Temporary
         Global Note be exchanged by the Company for Definitive Notes prior to
         (x) the expiration of the Restricted Period and (y) the receipt by the
         Registrar of any certificates required pursuant to Rule
         903(b)(3)(ii)(B) under the Securities Act.

         Upon the occurrence of either of the preceding events in (i) or (ii)
above, Definitive Notes shall be issued in such names as the Depositary shall
instruct the Trustee. Global Notes also may be exchanged or replaced, in whole
or in part, as provided in Sections 2.07 and 2.10 hereof. Every Note
authenticated and delivered in exchange for, or in lieu of, a Global Note or any
portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof,
shall be authenticated and delivered in the form of, and shall be, a Global
Note. A Global Note may not be exchanged for another Note other than as provided
in this Section 2.06(a), however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof.

         (b)    Transfer and Exchange of Beneficial Interests in the Global
Notes. The transfer and exchange of beneficial interests in the Global Notes
will be effected through the Depositary, in accordance with the provisions of
this Indenture and the Applicable Procedures. Beneficial interests in the
Restricted Global Notes will be subject to restrictions on transfer comparable
to those set forth herein to the extent required by the Securities Act.
Transfers of beneficial interests in the Global Notes also will require
compliance with either subparagraph (i) or (ii) below, as applicable, as well as
one or more of the other following subparagraphs, as applicable:

                (i)     Transfer of Beneficial Interests in the Same Global
         Note. Beneficial interests in any Restricted Global Note may be
         transferred to Persons who take delivery thereof in the form of a
         beneficial interest in the same Restricted Global Note in accordance
         with the transfer restrictions set forth in the Private Placement
         Legend; provided, however, that prior to the expiration of the
         Restricted Period, transfers of beneficial interests in the Regulation
         S Temporary Global Note may not be made to a U.S. Person or for the
         account or benefit of a U.S. Person (other than an Initial Purchaser).
         Beneficial interests in any Unrestricted Global Note may be transferred
         to Persons who take delivery thereof in the form of a beneficial
         interest in an Unrestricted Global Note. No written orders or
         instructions shall be required to be delivered to the Registrar to
         effect the transfers described in this Section 2.06(b)(i).

                (ii)    All Other Transfers and Exchanges of Beneficial
         Interests in Global Notes. In connection with all transfers and
         exchanges of beneficial interests that are not subject to Section
         2.06(b)(i) above, the transferor of such beneficial interest must
         deliver to the Registrar either (A) (1) a written order from a
         Participant or an Indirect Participant given to the Depositary in
         accordance with the Applicable Procedures directing the Depositary to
         credit or cause to be credited a beneficial interest in another Global
         Note in an amount equal to the beneficial interest to be transferred or
         exchanged and (2) instructions given in accordance with the Applicable
         Procedures containing information regarding the Participant account to
         be credited with such increase or (B) (1) a written order from a
         Participant or an Indirect Participant given to the Depositary in
         accordance with the Applicable Procedures directing the Depositary to
         cause to be issued a Definitive Note in an amount equal to the
         beneficial interest to be transferred or exchanged and (2) instructions
         given by the Depositary to the Registrar containing information
         regarding the Person in whose name such Definitive Note shall be
         registered to effect the transfer or exchange referred to in (1) above;
         provided that in no event shall Definitive Notes be issued upon the
         transfer or exchange of beneficial interests in the Regulation S
         Temporary Global Note prior to (x) the expiration of the Restricted
         Period and (y) the receipt by the Registrar of any

                                       30



         certificates required pursuant to Rule 903 under the Securities Act.
         Upon consummation of an Exchange Offer by the Company in accordance
         with Section 2.06(f) hereof, the requirements of this Section
         2.06(b)(ii) shall be deemed to have been satisfied upon receipt by the
         Registrar of the instructions contained in the Letter of Transmittal
         delivered by the Holder of such beneficial interests in the Restricted
         Global Notes. Upon satisfaction of all of the requirements for transfer
         or exchange of beneficial interests in Global Notes contained in this
         Indenture and the Notes or otherwise applicable under the Securities
         Act, the Trustee shall adjust the principal amount of the relevant
         Global Note(s) pursuant to Section 2.06(h) hereof.

                (iii)   Transfer of Beneficial Interests to Another Restricted
         Global Note. A beneficial interest in any Restricted Global Note may be
         transferred to a Person who takes delivery thereof in the form of a
         beneficial interest in another Restricted Global Note if the transfer
         complies with the requirements of Section 2.06(b)(ii) above and the
         Registrar receives the following:

                        (A)   if the transferee will take delivery in the form
                of a beneficial interest in the 144A Global Note, then the
                transferor must deliver a certificate in the form of Exhibit B
                hereto, including the certifications in item (1) thereof;

                        (B)   if the transferee will take delivery in the form
                of a beneficial interest in the Regulation S Temporary Global
                Note or the Regulation S Permanent Global Note, then the
                transferor must deliver a certificate in the form of Exhibit B
                hereto, including the certifications in item (2) thereof; and

                        (C)   if the transferee will take delivery in the form
                of a beneficial interest in the IAI Global Note, then the
                transferor must deliver a certificate in the form of Exhibit B
                hereto, including the certifications, certificates and Opinion
                of Counsel required by item (3) thereof, if applicable.

                (iv)    Transfer and Exchange of Beneficial Interests in a
         Restricted Global Note for Beneficial Interests in the Unrestricted
         Global Note. A beneficial interest in any Restricted Global Note may be
         exchanged by any holder thereof for a beneficial interest in an
         Unrestricted Global Note or transferred to a Person who takes delivery
         thereof in the form of a beneficial interest in an Unrestricted Global
         Note if the exchange or transfer complies with the requirements of
         Section 2.06(b)(ii) above and:

                        (A)   such exchange or transfer is effected pursuant to
                the Exchange Offer in accordance with the Registration Rights
                Agreement and the holder of the beneficial interest to be
                transferred, in the case of an exchange, or the transferee, in
                the case of a transfer, certifies in the applicable Letter of
                Transmittal that it is not (1) a Broker-Dealer, (2) a Person
                participating in the distribution of the Exchange Notes or (3)
                a Person who is an affiliate (as defined in Rule 144) of the
                Company;

                        (B)   such transfer is effected pursuant to the Shelf
                Registration Statement in accordance with the Registration
                Rights Agreement;

                        (C)   such transfer is effected by a Broker-Dealer
                pursuant to the Exchange Offer Registration Statement in
                accordance with the Registration Rights Agreement; or

                        (D)   the Registrar receives the following:

                                       31



                            (1)    if the holder of such beneficial interest in
                        a Restricted Global Note proposes to exchange such
                        beneficial interest for a beneficial interest in an
                        Unrestricted Global Note, a certificate from such holder
                        in the form of Exhibit C hereto, including the
                        certifications in item (1)(a) thereof; or

                            (2)    if the holder of such beneficial interest in
                        a Restricted Global Note proposes to transfer such
                        beneficial interest to a Person who shall take delivery
                        thereof in the form of a beneficial interest in an
                        Unrestricted Global Note, a certificate from such holder
                        in the form of Exhibit B hereto, including the
                        certifications in item (4) thereof;

                and, in each such case set forth in this subparagraph (D), if
                the Registrar so requests or if the Applicable Procedures so
                require, an Opinion of Counsel in form reasonably acceptable to
                the Registrar to the effect that such exchange or transfer is
                in compliance with the Securities Act and that the restrictions
                on transfer contained herein and in the Private Placement
                Legend are no longer required in order to maintain compliance
                with the Securities Act.

         If any such transfer is effected pursuant to subparagraph (B) or (D)
above at a time when an Unrestricted Global Note has not yet been issued, the
Company shall issue and, upon receipt of an Authentication Order in accordance
with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred pursuant to
subparagraph (B) or (D) above.

         Beneficial interests in an Unrestricted Global Note cannot be exchanged
for, or transferred to Persons who take delivery thereof in the form of, a
beneficial interest in a Restricted Global Note.

         (c)    Transfer or Exchange of Beneficial Interests for Definitive
 Notes.

                (i)     Beneficial Interests in Restricted Global Notes to

         Restricted Definitive Notes. If any holder of a beneficial interest in
         a Restricted Global Note proposes to exchange such beneficial interest
         for a Restricted Definitive Note or to transfer such beneficial
         interest to a Person who takes delivery thereof in the form of a
         Restricted Definitive Note, then, upon receipt by the Registrar of the
         following documentation:

                        (A)   if the holder of such beneficial interest in a
                Restricted Global Note proposes to exchange such beneficial
                interest for a Restricted Definitive Note, a certificate from
                such holder in the form of Exhibit C hereto, including the
                certifications in item (2)(a) thereof;

                        (B)   if such beneficial interest is being transferred
                to a QIB in accordance with Rule 144A, a certificate to the
                effect set forth in Exhibit B hereto, including the
                certifications in item (1) thereof;

                        (C)   if such beneficial interest is being transferred
                to a Non-U.S. Person in an offshore transaction in accordance
                with Rule 903 or Rule 904, a certificate to the effect set forth
                in Exhibit B hereto, including the certifications in item (2)
                thereof;

                        (D)   if such beneficial interest is being transferred
                pursuant to an exemption from the registration requirements of
                the Securities Act in accordance with Rule 144, a

                                       32



                certificate to the effect set forth in Exhibit B hereto,
                including the certifications in item (3)(a) thereof;

                        (E)   if such beneficial interest is being transferred
                to an Institutional Accredited Investor in reliance on an
                exemption from the registration requirements of the Securities
                Act other than those listed in subparagraphs (B) through (D)
                above, a certificate to the effect set forth in Exhibit B
                hereto, including the certifications, certificates and Opinion
                of Counsel required by item (3) thereof, if applicable;

                        (F)   if such beneficial interest is being transferred
                to the Company or any of its Subsidiaries, a certificate to the
                effect set forth in Exhibit B hereto, including the
                certifications in item (3)(b) thereof; or

                        (G)   if such beneficial interest is being transferred
                pursuant to an effective registration statement under the
                Securities Act, a certificate to the effect set forth in Exhibit
                B hereto, including the certifications in item (3)(c) thereof,

         the Trustee shall cause the aggregate principal amount of the
         applicable Global Note to be reduced accordingly pursuant to Section
         2.06(h) hereof, and the Company shall execute and the Trustee shall
         authenticate and deliver to the Person designated in the instructions a
         Definitive Note in the appropriate principal amount. Any Definitive
         Note issued in exchange for a beneficial interest in a Restricted
         Global Note pursuant to this Section 2.06(c) shall be registered in
         such name or names and in such authorized denomination or denominations
         as the holder of such beneficial interest shall instruct the Registrar
         through instructions from the Depositary and the Participant or
         Indirect Participant. The Trustee shall deliver such Definitive Notes
         to the Persons in whose names such Notes are so registered. Any
         Definitive Note issued in exchange for a beneficial interest in a
         Restricted Global Note pursuant to this Section 2.06(c)(i) shall bear
         the Private Placement Legend and shall be subject to all restrictions
         on transfer contained therein.

                (ii)    Beneficial Interests in Regulation S Temporary Global
         Note to Definitive Notes. Notwithstanding Sections 2.06(c)(i)(A) and
         (C) hereof, a beneficial interest in the Regulation S Temporary Global
         Note may not be exchanged for a Definitive Note or transferred to a
         Person who takes delivery thereof in the form of a Definitive Note
         prior to (x) the expiration of the Restricted Period and (y) the
         receipt by the Registrar of any certificates required pursuant to Rule
         903(b)(3)(ii)(B) under the Securities Act, except in the case of a
         transfer pursuant to an exemption from the registration requirements of
         the Securities Act other than Rule 903 or Rule 904.

                (iii)   Beneficial Interests in Restricted Global Notes to
         Unrestricted Definitive Notes. A holder of a beneficial interest in a
         Restricted Global Note may exchange such beneficial interest for an
         Unrestricted Definitive Note or may transfer such beneficial interest
         to a Person who takes delivery thereof in the form of an Unrestricted
         Definitive Note only if:

                        (A)   such exchange or transfer is effected pursuant to
                the Exchange Offer in accordance with the Registration Rights
                Agreement and the holder of such beneficial interest, in the
                case of an exchange, or the transferee, in the case of a
                transfer, certifies in the applicable Letter of Transmittal that
                it is not (1) a Broker-Dealer, (2) a Person participating in the
                distribution of the Exchange Notes or (3) a Person who is an
                affiliate (as defined in Rule 144) of the Company;

                                       33



                        (B)   such transfer is effected pursuant to the Shelf
                Registration Statement in accordance with the Registration
                Rights Agreement;

                        (C)   such transfer is effected by a Broker-Dealer
                pursuant to the Exchange Offer Registration Statement in
                accordance with the Registration Rights Agreement; or

                        (D)   the Registrar receives the following:

                              (1)    if the holder of such beneficial interest
                        in a Restricted Global Note proposes to exchange such
                        beneficial interest for a Definitive Note that does not
                        bear the Private Placement Legend, a certificate from
                        such holder in the form of Exhibit C hereto, including
                        the certifications in item (1)(b) thereof; or

                              (2)    if the holder of such beneficial interest
                        in a Restricted Global Note proposes to transfer such
                        beneficial interest to a Person who shall take delivery
                        thereof in the form of a Definitive Note that does not
                        bear the Private Placement Legend, a certificate from
                        such holder in the form of Exhibit B hereto, including
                        the certifications in item (4) thereof;

                and, in each such case set forth in this subparagraph (D), if
                the Registrar so requests or if the Applicable Procedures so
                require, an Opinion of Counsel in form reasonably acceptable to
                the Registrar to the effect that such exchange or transfer is in
                compliance with the Securities Act and that the restrictions on
                transfer contained herein and in the Private Placement Legend
                are no longer required in order to maintain compliance with the
                Securities Act.

                (iv)    Beneficial Interests in Unrestricted Global Notes to
         Unrestricted Definitive Notes. If any holder of a beneficial interest
         in an Unrestricted Global Note proposes to exchange such beneficial
         interest for a Definitive Note or to transfer such beneficial interest
         to a Person who takes delivery thereof in the form of a Definitive
         Note, then, upon satisfaction of the conditions set forth in Section
         2.06(b)(ii) hereof, the Trustee will cause the aggregate principal
         amount of the applicable Global Note to be reduced accordingly pursuant
         to Section 2.06(h) hereof, and the Company will execute and the Trustee
         will authenticate and deliver to the Person designated in the
         instructions a Definitive Note in the appropriate principal amount. Any
         Definitive Note issued in exchange for a beneficial interest pursuant
         to this Section 2.06(c)(iii) will be registered in such name or names
         and in such authorized denomination or denominations as the holder of
         such beneficial interest instructs the Registrar through instructions
         to the Registrar from or through the Depositary and the Participant or
         Indirect Participant. The Trustee will deliver such Definitive Notes to
         the Persons in whose names such Notes are so registered. Any Definitive
         Note issued in exchange for a beneficial interest pursuant to this
         Section 2.06(c)(iii) will not bear the Private Placement Legend.

         (d)    Transfer and Exchange of Definitive Notes for Beneficial
         Interests.

                (i)     Restricted Definitive Notes to Beneficial Interests in
         Restricted Global Notes. If any Holder of a Restricted Definitive Note
         proposes to exchange such Note for a beneficial interest in a
         Restricted Global Note or to transfer such Restricted Definitive Note
         to a Person who takes delivery thereof in the form of a beneficial
         interest in a Restricted Global Note, then, upon receipt by the
         Registrar of the following documentation:

                                       34



                        (A)   if the Holder of such Restricted Definitive Note
                proposes to exchange such Note for a beneficial interest in a
                Restricted Global Note, a certificate from such Holder in the
                form of Exhibit C hereto, including the certifications in item
                (2)(b) thereof;

                        (B)   if such Restricted Definitive Note is being
                transferred to a QIB in accordance with Rule 144A, a certificate
                to the effect set forth in Exhibit B hereto, including the
                certifications in item (1) thereof;

                        (C)   if such Restricted Definitive Note is being
                transferred to a Non-U.S. Person in an offshore transaction in
                accordance with Rule 903 or Rule 904, a certificate to the
                effect set forth in Exhibit B hereto, including the
                certifications in item (2) thereof;

                        (D)   if such Restricted Definitive Note is being
                transferred pursuant to an exemption from the registration
                requirements of the Securities Act in accordance with Rule 144,
                a certificate to the effect set forth in Exhibit B hereto,
                including the certifications in item (3)(a) thereof;

                        (E)   if such Restricted Definitive Note is being
                transferred to an Institutional Accredited Investor in reliance
                on an exemption from the registration requirements of the
                Securities Act other than those listed in subparagraphs (B)
                through (D) above, a certificate to the effect set forth in
                Exhibit B hereto, including the certifications, certificates and
                Opinion of Counsel required by item (3) thereof, if applicable;

                        (F)   if such Restricted Definitive Note is being
                transferred to the Company or any of its Subsidiaries, a
                certificate to the effect set forth in Exhibit B hereto,
                including the certifications in item (3)(b) thereof; or

                        (G)   if such Restricted Definitive Note is being
                transferred pursuant to an effective registration statement
                under the Securities Act, a certificate to the effect set forth
                in Exhibit B hereto, including the certifications in item (3)(c)
                thereof,

         the Trustee shall cancel such Restricted Definitive Note, increase or
         cause to be increased the aggregate principal amount of, in the case of
         clause (A) above, the appropriate Restricted Global Note, in the case
         of clause (B) above, the 144A Global Note, in the case of clause (C)
         above, the Regulation S Global Note, and in all other cases, the IAI
         Global Note.

                (ii)    Restricted Definitive Notes to Beneficial Interests in
         Unrestricted Global Notes. A Holder of a Restricted Definitive Note may
         exchange such Note for a beneficial interest in an Unrestricted Global
         Note or transfer such Restricted Definitive Note to a Person who takes
         delivery thereof in the form of a beneficial interest in an
         Unrestricted Global Note only if:

                        (A)   such exchange or transfer is effected pursuant to
                the Exchange Offer in accordance with the Registration Rights
                Agreement and the Holder, in the case of an exchange, or the
                transferee, in the case of a transfer, certifies in the
                applicable Letter of Transmittal that it is not (1) a
                Broker-Dealer, (2) a Person participating in the distribution of
                the Exchange Notes or (3) a Person who is an affiliate (as
                defined in Rule 144) of the Company;

                        (B)   such transfer is effected pursuant to the Shelf
                Registration Statement in accordance with the Registration
                Rights Agreement;

                                       35



                        (C)   such transfer is effected by a Broker-Dealer
                pursuant to the Exchange Offer Registration Statement in
                accordance with the Registration Rights Agreement; or

                        (D)   the Registrar receives the following:

                              (1) if the Holder of such Definitive Note proposes
                        to exchange such Note for a beneficial interest in the
                        Unrestricted Global Note, a certificate from such Holder
                        in the form of Exhibit C hereto, including the
                        certifications in item (1)(c) thereof; or

                              (2) if the Holder of such Definitive Note proposes
                        to transfer such Note to a Person who shall take
                        delivery thereof in the form of a beneficial interest in
                        the Unrestricted Global Note, a certificate from such
                        Holder in the form of Exhibit B hereto, including the
                        certifications in item (4) thereof;

                and, in each such case set forth in this subparagraph (D), if
                the Registrar so requests or if the Applicable Procedures so
                require, an Opinion of Counsel in form reasonably acceptable to
                the Registrar to the effect that such exchange or transfer is in
                compliance with the Securities Act and that the restrictions on
                transfer contained herein and in the Private Placement Legend
                are no longer required in order to maintain compliance with the
                Securities Act.

                Upon satisfaction of the conditions of any of thesubparagraphs
         in this Section 2.06(d)(ii), the Trustee will cancel the Definitive
         Notes so transferred or exchanged and increase or cause to be increased
         the aggregate principal amount of the applicable Unrestricted Global
         Note.

                (iii)   Unrestricted Definitive Notes to Beneficial Interests in
         Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note
         may exchange such Note for a beneficial interest in an Unrestricted
         Global Note or transfer such Definitive Note to a Person who takes
         delivery thereof in the form of a beneficial interest in an
         Unrestricted Global Note at any time. Upon receipt of a request for
         such an exchange or transfer, the Trustee will cancel the applicable
         Unrestricted Definitive Note and increase or cause to be increased the
         aggregate principal amount of one of the Unrestricted Global Notes.

                If any such exchange or transfer from a Definitive Note to a
         beneficial interest is effected pursuant to subparagraphs (ii)(B),
         (ii)(D) or (iii) above at a time when an Unrestricted Global Note has
         not yet been issued, the Company will issue and, upon receipt of an
         Authentication Order in accordance with Section 2.02 hereof, the
         Trustee will authenticate one or more Unrestricted Global Notes in an
         aggregate principal amount equal to the principal amount of Definitive
         Notes so transferred.

                (e)     Transfer and Exchange of Definitive Notes for Definitive
Notes. Upon request by a Holder of Definitive Notes and such Holder's compliance
with the provisions of this Section 2.06(e), the Registrar will register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder will present or surrender to the Registrar
the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
will provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).

                                       36



                (i)     Restricted Definitive Notes to Restricted Definitive
         Notes. Any Restricted Definitive Note may be transferred to and
         registered in the name of Persons who take delivery thereof in the form
         of a Restricted Definitive Note if the Registrar receives the
         following:

                        (A)   if the transfer will be made pursuant to Rule 144A
                then the transferor must deliver a certificate in the form of
                Exhibit B hereto, including the certifications in item (1)
                thereof;

                        (B)   if the transfer will be made pursuant to Rule 903
                or Rule 904, then the transferor must deliver a certificate in
                the form of Exhibit B hereto, including the certifications in
                item (2) thereof; and

                        (C)   if the transfer will be made pursuant to any other
                exemption from the registration requirements of the Securities
                Act, then the transferor must deliver a certificate in the form
                of Exhibit B hereto, including the certifications, certificates
                and Opinion of Counsel required by item (3) thereof, if
                applicable.

                (ii)    Restricted Definitive Notes to Unrestricted Definitive
         Notes. Any Restricted Definitive Note may be exchanged by the Holder
         thereof for an Unrestricted Definitive Note or transferred to a Person
         or Persons who take delivery thereof in the form of an Unrestricted
         Definitive Note if:

                        (A)   such exchange or transfer is effected pursuant to
                the Exchange Offer in accordance with the Registration Rights
                Agreement, and the Holder, in the case of an exchange, or the
                transferee, in the case of a transfer, certifies in the
                applicable Letter of Transmittal that it is not (1) a
                broker-dealer, (2) a Person participating in the distribution of
                the Exchange Notes or (3) a Person who is an affiliate (as
                defined in Rule 144) of the Company;

                        (B)   any such transfer is effected pursuant to the
                Shelf Registration Statement in accordance with the Registration
                Rights Agreement;

                        (C)   any such transfer is effected by a Broker-Dealer
                pursuant to the Exchange Offer Registration Statement in
                accordance with the Registration Rights Agreement; or

                        (D)   the Registrar receives the following:

                              (1) if the Holder of such Restricted Definitive
                        Notes proposes to exchange such Notes for an
                        Unrestricted Definitive Note, a certificate from such
                        Holder in the form of Exhibit C hereto, including the
                        certifications in item (1)(d) thereof; or

                              (2) if the Holder of such Restricted Definitive
                        Notes proposes to transfer such Notes to a Person who
                        shall take delivery thereof in the form of an
                        Unrestricted Definitive Note, a certificate from such
                        Holder in the form of Exhibit B hereto, including the
                        certifications in item (4) thereof;

                and, in each such case set forth in this subparagraph (D), if
                the Registrar so requests, an Opinion of Counsel in form
                reasonably acceptable to the Company to the effect that such
                exchange or transfer is in compliance with the Securities Act
                and that the restrictions on

                                       37



                transfer contained herein and in the Private Placement Legend
                are no longer required in order to maintain compliance with the
                Securities Act.

                (iii)   Unrestricted Definitive Notes to Unrestricted Definitive
         Notes. A Holder of Unrestricted Definitive Notes may transfer such
         Notes to a Person who takes delivery thereof in the form of an
         Unrestricted Definitive Note. Upon receipt of a request to register
         such a transfer, the Registrar shall register the Unrestricted
         Definitive Notes pursuant to the instructions from the Holder thereof.

         (f)    Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company will issue and,
upon receipt of an Authentication Order in accordance with Section 2.02, the
Trustee will authenticate (i) one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered into the Exchange Offer by
Persons that certify in the applicable Letters of Transmittal that (x) they are
not Broker-Dealers, (y) they are not participating in a distribution of the
Exchange Notes and (z) they are not affiliates (as defined in Rule 144) of the
Company and (ii) Unrestricted Definitive Notes in an aggregate principal amount
equal to the principal amount of the Restricted Definitive Notes accepted for
exchange in the Exchange Offer. Concurrently with the issuance of such Notes,
the Trustee will cause the aggregate principal amount of the applicable
Restricted Global Notes to be reduced accordingly, and the Company will execute
and the Trustee will authenticate and deliver to the Persons designated by the
Holders of Definitive Notes so accepted Definitive Notes in the appropriate
principal amount.

         (g)    Legends. The following legends will appear on the face of all
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.

                (i)     Private Placement Legend.

                        (A)   Except as permitted by subparagraph (B) below,
                each Global Note and each Definitive Note (and all Notes issued
                in exchange therefor or substitution thereof) shall bear the
                legend in substantially the following form:

"THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT
FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, RESOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS NOTE IS NOTIFIED THAT THE SELLER OF THIS NOTE
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS NOTE
MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) INSIDE THE
UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED
STATES IN A TRANSACTION COMPLYING WITH THE PROVISIONS OF RULE 904 UNDER THE
SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 (IF AVAILABLE), (IV) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES

                                       38



ACT, OR (V) TO THE ISSUER, ITS SUBSIDIARIES OR ITS DIRECT OR INDIRECT PARENT, IN
EACH OF CASES (I) THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE."

                        (B)   Notwithstanding the foregoing, any Global Note or
                Definitive Note issued pursuant to subparagraphs (b)(iv),
                (c)(iii), (c)(iv), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f)
                to this Section 2.06 (and all Notes issued in exchange therefor
                or substitution thereof) will not bear the Private Placement
                Legend.

                (ii)    Global Note Legend. Each Global Note will bear a legend
         in substantially the following form:

"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO
A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."

                (iii)   Regulation S Temporary Global Note Legend. The
         Regulation S Temporary Global Note will bear a legend in substantially
         the following form:

"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE PAYMENT OF INTEREST HEREON."

                                       39



         (h)    Cancellation and/or Adjustment of Global Notes. At such time as
all beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note will be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for or transferred to a Person who will take delivery thereof in
the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note will be
reduced accordingly and an endorsement will be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note will be increased accordingly and
an endorsement will be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.

         (i)    General Provisions Relating to Transfers and Exchanges.

                (i)     To permit registrations of transfers and exchanges, the
         Company will execute and the Trustee will authenticate Global Notes and
         Definitive Notes upon receipt of an Authentication Order in accordance
         with Section 2.02 or at the Registrar's request.

                (ii)    No service charge will be made to a Holder of a Global
         Note or to a Holder of a Definitive Note for any registration of
         transfer or exchange, but the Company may require payment of a sum
         sufficient to cover any transfer tax or similar governmental charge
         payable in connection therewith (other than any such transfer taxes or
         similar governmental charge payable upon exchange or transfer pursuant
         to Sections 2.10, 3.06, 3.09, 4.10, 4.15 and 9.05 hereof).

                (iii)   The Registrar will not be required to register the
         transfer of or exchange any Note selected for redemption in whole or in
         part, except the unredeemed portion of any Note being redeemed in part.

                (iv)    All Global Notes and Definitive Notes issued upon any
         registration of transfer or exchange of Global Notes or Definitive
         Notes will be the valid obligations of the Company, evidencing the same
         debt, and entitled to the same benefits under this Indenture, as the
         Global Notes or Definitive Notes surrendered upon such registration of
         transfer or exchange.

                (v)     The Company will not be required (A) to issue, to
         register the transfer of or to exchange any Notes during a period
         beginning at the opening of business 15 days before the day of any
         selection of Notes for redemption under Section 3.02 hereof and ending
         at the close of business on the day of selection, (B) to register the
         transfer of or to exchange any Note so selected for redemption in whole
         or in part, except the unredeemed portion of any Note being redeemed in
         part or (C) to register the transfer of or to exchange a Note between a
         record date and the next succeeding interest payment date.

                (vi)    Prior to due presentment for the registration of a
         transfer of any Note, the Trustee, any Agent and the Company may deem
         and treat the Person in whose name any Note is registered as the
         absolute owner of such Note for the purpose of receiving payment of
         principal of and interest on such Notes and for all other purposes, and
         none of the Trustee, any Agent or the Company shall be affected by
         notice to the contrary.

                (vii)   The Trustee will authenticate Global Notes and
         Definitive Notes in accordance with the provisions of Section 2.02
         hereof.

                                       40



                (viii)  All certifications, certificates and Opinions of Counsel
         required to be submitted to the Registrar pursuant to this Section 2.06
         to effect a registration of transfer or exchange may be submitted by
         facsimile.

Section 2.07.   Replacement Notes.

         If any mutilated Note is surrendered to the Trustee or the Company and
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, the Company will issue and the Trustee, upon receipt of an
Authentication Order, will authenticate a replacement Note if the Trustee's
requirements are met. If required by the Trustee or the Company, an indemnity
bond must be supplied by the Holder that is sufficient in the judgment of the
Trustee and the Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is
replaced. The Company or, if applicable, the Trustee may charge the Holder of
any lost or mutilated Note for its expenses in replacing a Note. In the event
any such Note shall have matured, instead of issuing a replacement Note as
provided above, the Trustee may pay the same upon receipt by the Company and the
Trustee of indemnity satisfactory to each of them.

         Every replacement Note is an additional obligation of the Company and
will be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.

Section 2.08.   Outstanding Notes.

         The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those canceled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding. Except as set forth in Section 2.09 hereof, a Note
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note; however, Notes held by the Company or a Subsidiary of
the Company shall not be deemed to be outstanding for purposes of Section
3.07(a)(i) hereof.

         If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a protected purchaser.

         If the principal amount of any Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.

         If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes will be deemed to be no longer outstanding and will cease to accrue
interest.

Section 2.09.   Treasury Notes.

         In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company, will be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee will be protected in relying on any such direction, waiver or consent,
only Notes that the Trustee knows are so owned will be so disregarded.

                                       41



Section 2.10.   Temporary Notes.

         Until certificates representing Notes are ready for delivery, the
Company may prepare and the Trustee, upon receipt of an Authentication Order,
will authenticate temporary Notes. Temporary Notes will be substantially in the
form of certificated Notes but may have variations that the Company considers
appropriate for temporary Notes and as will be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company will prepare and the Trustee
will authenticate definitive Notes in exchange for temporary Notes.

         Holders of temporary Notes will be entitled to all of the benefits of
this Indenture.

Section 2.11.   Cancellation.

         The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent will forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else will cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and will destroy
canceled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all canceled Notes will be delivered
to the Company. The Company may not issue new Notes to replace Notes that it has
paid or that have been delivered to the Trustee for cancellation.

Section 2.12.   Defaulted Interest.

         If the Company defaults in a payment of interest on the Notes, the
Company will pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Notes and in Section 4.01 hereof. The Company will notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each Note and
the date of the proposed payment. The Company will fix or cause to be fixed each
such special record date and payment date, provided that no such special record
date will be less than 10 days prior to the related payment date for such
defaulted interest. At least 15 days before the special record date, the Company
(or, upon the written request of the Company, the Trustee in the name and at the
expense of the Company) will mail or cause to be mailed to Holders a notice that
states the special record date, the related payment date and the amount of such
interest to be paid.

                                   ARTICLE 3.
                            REDEMPTION AND PREPAYMENT

Section 3.01.   Notices to Trustee.

         If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it will furnish to the Trustee, at
least 35 days, but not more than 60 days before a redemption date, an Officers'
Certificate setting forth (i) the clause of this Indenture pursuant to which the
redemption shall occur, (ii) the redemption date, (iii) the principal amount of
Notes to be redeemed and (iv) the redemption price.

Section 3.02.   Selection of Notes to Be Redeemed or Purchased.

         If less than all of the Notes are to be redeemed or purchased in an
offer to purchase at any time, the Trustee will select Notes for redemption or
repurchase as follows:

                                       42



         (a)    if the Notes are listed on any national securities exchange, in
compliance with the requirements of the principal national securities exchange
on which the Notes are listed; or

         (b)    if the Notes are not listed on any national securities exchange,
on a pro rata basis, by lot or by such method as the Trustee deems fair and
appropriate.

In the event of partial redemption or purchase by lot, the particular Notes to
be redeemed or purchased will be selected, unless otherwise provided herein, not
less than 30 nor more than 60 days prior to the redemption or purchase date by
the Trustee from the outstanding Notes not previously called for redemption or
purchase.

         The Trustee will promptly notify the Company in writing of the Notes
selected for redemption or purchase and, in the case of any Note selected for
partial redemption or purchase, the principal amount thereof to be redeemed or
repurchased. Notes and portions of Notes selected will be in amounts of $1,000
or whole multiples of $1,000; except that if all of the Notes of a Holder are to
be redeemed, the entire outstanding amount of Notes held by such Holder, even if
not a multiple of $1,000, shall be redeemed or purchased. Except as provided in
the preceding sentence, provisions of this Indenture that apply to Notes called
for redemption or purchase also apply to portions of Notes called for redemption
or purchase.

Section 3.03.   Notice of Redemption.

         Subject to the provisions of Section 3.09 hereof, at least 30 days but
not more than 60 days before a redemption date, the Company will mail or cause
to be mailed, by first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address, except that redemption
notices may be mailed more than 60 days prior to a redemption date if the notice
is issued in connection with a defeasance of the Notes or a satisfaction and
discharge of this Indenture pursuant to Article 8 of this Indenture.

         The notice will identify the Notes to be redeemed and will state:

         (a)    the redemption date;

         (b)    the redemption price;

         (c)    if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption date
upon surrender of such Note, a new Note or Notes in principal amount equal to
the unredeemed portion will be issued upon cancellation of the original Note;

         (d)    the name and address of the Paying Agent;

         (e)    that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;

         (f)    that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and after
the redemption date;

         (g)    the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and

         (h)    that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the Notes.

                                       43



         At the Company's request, the Trustee will give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company has delivered to the Trustee, at least 45 days prior to the redemption
date, an Officers' Certificate requesting that the Trustee give such notice and
setting forth the information to be stated in such notice as provided in the
preceding paragraph.

Section 3.04.   Effect of Notice of Redemption.

         Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. A notice of redemption may not be
conditional.

Section 3.05.   Deposit of Redemption or Purchase Price.

         One Business Day prior to the redemption or purchase date, the Company
will deposit with the Trustee or with the Paying Agent money sufficient to pay
the redemption or purchase price of and accrued interest and Liquidated Damages,
if any, on all Notes to be redeemed or purchased on that date. The Trustee or
the Paying Agent will promptly return to the Company any money deposited with
the Trustee or the Paying Agent by the Company in excess of the amounts
necessary to pay the redemption or purchase price of, and accrued interest and
Liquidated Damages, if any, on, all Notes to be redeemed or purchased.

         If the Company complies with the provisions of the preceding paragraph,
on and after the redemption or purchase date, interest will cease to accrue on
the Notes or the portions of Notes called for redemption or purchase. If a Note
is redeemed or purchased on or after an interest record date but on or prior to
the related interest payment date, then any accrued and unpaid interest shall be
paid to the Person in whose name such Note was registered at the close of
business on such record date. If any Note called for redemption or purchase is
not so paid upon surrender for redemption because of the failure of the Company
to comply with the preceding paragraph, interest shall be paid on the unpaid
principal, from the redemption or purchase date until such principal is paid,
and to the extent lawful on any interest not paid on such unpaid principal, in
each case at the rate provided in the Notes and in Section 4.01 hereof.

Section 3.06.   Notes Redeemed or Purchased in Part.

         Upon surrender of a Note that is redeemed or purchased in part, the
Company will issue and, upon receipt of an Authentication Order, the Trustee
will authenticate for the Holder at the expense of the Company a new Note equal
in principal amount to the unredeemed or unpurchased portion of the Note
surrendered.

Section 3.07.   Optional Redemption.

         (a)    At any time prior to July 15, 2005, the Company may on any one
or more occasions redeem up to 35% of the aggregate principal amount of Notes
issued under this Indenture at a redemption price of 110.125% of the principal
amount thereof, plus accrued and unpaid interest and Liquidated Damages, if any,
thereon to the applicable redemption date, with all or a portion of the net cash
proceeds of one or more Public Equity Offerings; provided that:

                (i)     at least 65% of the aggregate principal amount of Notes
         issued under this Indenture remains outstanding immediately after the
         occurrence of such redemption (excluding Notes held by the Company and
         its Affiliates); and

                                       44



                (ii)    the redemption occurs within 90 days of the date of the
         closing of such Public Equity Offering.

         (b)    Except pursuant to the preceding paragraph, the Notes will not
be redeemable at the Company's option prior to July 15, 2007.

         (c)    On or after July 15, 2007, the Company may redeem all or a part
of the Notes upon not less than 30 nor more than 60 days' notice, at the
redemption prices (expressed as percentages of principal amount) set forth below
plus accrued and unpaid interest and Liquidated Damages, if any, on the Notes
redeemed, to the applicable redemption date, if redeemed during the twelve-month
period beginning on July 15 of the years indicated below:

                  Year                                       Percentage

                  2007 ....................................    105.063%
                  2008 ....................................    103.375%
                  2009 ....................................    101.688%
                  2010 and thereafter .....................    100.000%

         (d)    Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Section 3.01 through 3.06 hereof.

Section 3.08.   Mandatory Redemption.

         The Company is not required to make mandatory redemption payments with
respect to the Notes.

Section 3.09.   Offer to Purchase by Application of Excess Proceeds.

         In the event that, pursuant to Section 4.10 hereof, the Company is
required to commence an offer to all Holders to purchase Notes (an "Asset Sale
Offer"), it will follow the procedures specified below.

         The Asset Sale Offer shall be made to all Holders and all holders of
other Indebtedness that is pari passu with the Notes containing provisions
similar to those set forth in this Indenture with respect to offers to purchase
or redeem with the proceeds of sales of assets. The Asset Sale Offer will remain
open for a period of at least 20 Business Days following its commencement and
not more than 30 Business Days, except to the extent that a longer period is
required by applicable law (the "Offer Period"). No later than five Business
Days after the termination of the Offer Period (the "Purchase Date"), the
Company will apply all Excess Proceeds (the "Offer Amount") to the purchase of
Notes and such other pari passu indebtedness (on a pro rata basis, if
applicable) or, if less than the Offer Amount has been tendered, all Notes and
other Indebtedness tendered in response to the Asset Sale Offer. Payment for any
Notes so purchased will be made in the same manner as interest payments are
made.

         If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest, and
Liquidated Damages, if any, will be paid to the Person in whose name a Note is
registered at the close of business on such record date, and no additional
interest will be payable to Holders who tender Notes pursuant to the Asset Sale
Offer.

         Upon the commencement of an Asset Sale Offer, the Company will send, by
first class mail, a notice to the Trustee and each of the Holders, with a copy
to the Trustee. The notice will contain all instructions and materials necessary
to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The
notice, which will govern the terms of the Asset Sale Offer, will state:

                                       45



         (a)    that the Asset Sale Offer is being made pursuant to this Section
3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer will
remain open;

         (b)    the Offer Amount, the purchase price and the Purchase Date;

         (c)    that any Note not tendered or accepted for payment will continue
to accrue interest;

         (d)    that, unless the Company defaults in making such payment, any
Note accepted for payment pursuant to the Asset Sale Offer will cease to accrue
interest after the Purchase Date;

         (e)    that Holders electing to have a Note purchased pursuant to an
Asset Sale Offer may elect to have Notes purchased in integral multiples of
$1,000 only;

         (f)    that Holders electing to have a Note purchased pursuant to any
Asset Sale Offer will be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Note completed, or
transfer by book-entry transfer, to the Company, a depositary, if appointed by
the Company, or a Paying Agent at the address specified in the notice at least
three days before the Purchase Date;

         (g)    that Holders will be entitled to withdraw their election if the
Company, the depositary or the Paying Agent, as the case may be, receives, not
later than the expiration of the Offer Period, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Note the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Note purchased;

         (h)    that, if the aggregate principal amount of Notes and other pari
passu Indebtedness, as the case may be, surrendered by Holders or holders of
such pari passu Indebtedness exceeds the Offer Amount, the Company will select
the Notes and other pari passu Indebtedness to be purchased on a pro rata basis
based on the principal amount of Notes and such other pari passu Indebtedness
surrendered (with such adjustments as may be deemed appropriate by the Company
so that only Notes in denominations of $1,000, or integral multiples thereof,
will be purchased); and

         (i)    that Holders whose Notes were purchased only in part will be
issued new Notes equal in principal amount to the unpurchased portion of the
Notes surrendered (or transferred by book-entry transfer).

         On or before the Purchase Date, the Company will, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Notes and any pari passu Indebtedness or portions thereof tendered
pursuant to the Asset Sale Offer, or if less than the Offer Amount has been
tendered, all Notes and other pari passu Indebtedness tendered, and will deliver
to the Trustee an Officers' Certificate stating that such Notes and pari passu
Indebtedness or portions thereof were accepted for payment by the Company in
accordance with the terms of this Section 3.09. The Company, the Depositary or
the Paying Agent, as the case may be, will promptly (but in any case not later
than five days after the Purchase Date) mail or deliver to each tendering Holder
an amount equal to the purchase price of the Notes tendered by such Holder and
accepted by the Company for purchase, and the Company will promptly issue a new
Note, and the Trustee, upon written request from the Company will authenticate
and mail or deliver such new Note to such Holder, in a principal amount equal to
any unpurchased portion of the Note surrendered. Any Note not so accepted shall
be promptly mailed or delivered by the Company to the Holder thereof. The
Company will publicly announce the results of the Asset Sale Offer on the
Purchase Date.

                                       46



         Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.

                                   ARTICLE 4.
                                    COVENANTS

Section 4.01.   Payment of Notes.

         The Company will pay or cause to be paid the principal of, premium, if
any, and interest and Liquidated Damages, if any, on the Notes on the dates and
in the manner provided in the Notes. Principal, premium, if any, and interest
and Liquidated Damages, if any, will be considered paid on the date due if the
Paying Agent, if other than the Company or a Subsidiary thereof, holds as of
12:00 p.m. Eastern Time on the due date money deposited by the Company in
immediately available funds and designated for and sufficient to pay all
principal, premium, if any, and interest then due. The Company will pay all
Liquidated Damages, if any, in the same manner on the dates and in the amounts
set forth in the Registration Rights Agreement.

         The Company will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; it will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace period) at the same
rate to the extent lawful.

Section 4.02.   Maintenance of Office or Agency.

         The Company will maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
will fail to maintain any such required office or agency or will fail to furnish
the Trustee with the address thereof, such presentations, surrenders, notices
and demands may be made or served at the Corporate Trust Office of the Trustee.

         The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission will in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Company will give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.

         The Company hereby designates the Corporate Trust Office of the Trustee
as one such office or agency of the Company in accordance with Section 2.03.

Section 4.03.   Reports

         (a)    Whether or not required by the SEC, so long as any Notes are
outstanding, the Company will furnish to the Holders of Notes, within the time
periods specified in the SEC's rules and regulations:

                (i)     all quarterly and annual financial information that
         would be required to be contained in a filing with the SEC on Forms
         10-Q and 10-K if the Company were required to file

                                       47



         such forms, including a "Management's Discussion and Analysis of
         Financial Condition and Results of Operations" and, with respect to the
         annual information only, a report on the annual financial statements by
         the Company's certified independent accountants; and

                (ii)    all current reports that would be required to be filed
         with the SEC on Form 8-K if the Company were required to file such
         reports.

         If the Company has designated any of its Subsidiaries as Unrestricted
Subsidiaries, then the quarterly and annual financial information required by
the preceding sentence will include a reasonably detailed presentation, either
on the face of the financial statements or in the footnotes thereto, and in
Management's Discussion and Analysis of Financial Condition and Results of
Operations, of the financial condition and results of operations of the Company
and its Restricted Subsidiaries separate from the financial condition and
results of operations of the Unrestricted Subsidiaries of the Company. The
Company will be deemed to have satisfied such requirements if Parent files and
provides reports, documents and information of the types otherwise required by
this paragraph and the preceding paragraph within the applicable time periods
and the Company is not required to file such reports, documents and information
separately under the applicable rules and regulations of the SEC (after giving
effect to any exemptive relief) because of the filings by Parent. In addition,
following consummation of the Exchange Offer, whether or not required by the
SEC, the Company will file a copy of all of the information and reports referred
to in clauses (i) and (ii) above with the SEC for public availability within the
time periods specified in the SEC's rules and regulations (unless the SEC will
not accept such a filing) and make such information available to securities
analysts and prospective investors upon request. The Company shall at all times
comply with TIA (S) 314(a).

         (b)    For so long as any Notes remain outstanding, the Company and the
Guarantors will furnish to the Holders and to securities analysts and
prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.

Section 4.04.   Compliance Certificate.

         (a)    The Company and each Guarantor (to the extent that such
Guarantor is so required under the TIA) shall deliver to the Trustee, within 90
days after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries and, to the extent
applicable, Parent, during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Company has kept, observed, performed and fulfilled its obligations under this
Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge the Company has kept,
observed, performed and fulfilled each and every covenant contained in this
Indenture and that there is no default in the performance or observance of any
of the terms, provisions and conditions of this Indenture (or, if a Default or
Event of Default will have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge and what action the Company is
taking or proposes to take with respect thereto) and that to the best of his or
her knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto.

         (b)    So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any such

                                       48



violation has occurred, specifying the nature and period of existence thereof,
it being understood that such accountants shall not be liable directly or
indirectly to any Person for any failure to obtain knowledge of any such
violation.

         (c)    The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.

Section 4.05.   Taxes.

         The Company will pay, and will cause each of its Restricted
Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and
governmental levies except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holders of the Notes.

Section 4.06.   Stay, Extension and Usury Laws.

         The Company and each of the Guarantors covenants (to the extent that it
may lawfully do so) that it will not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company and
each of the Guarantors (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law has been enacted.

Section 4.07.   Restricted Payments.

         (a)    The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly:

                (i)    declare or pay any dividend or make any other payment or
         distribution on account of the Company's or any of its Restricted
         Subsidiaries' Equity Interests (including, without limitation, any
         payment in connection with any merger or consolidation involving the
         Company or any of its Restricted Subsidiaries) or to the direct or
         indirect holders of the Company's or any of its Restricted
         Subsidiaries' Equity Interests in their capacity as such (other than
         dividends or distributions payable in Equity Interests (other than
         Disqualified Stock) of the Company and other than dividends or
         distributions payable to the Company or a Restricted Subsidiary of the
         Company);

                (ii)   purchase, redeem or otherwise acquire or retire for value
         (including, without limitation, in connection with any merger or
         consolidation involving the Company) any Equity Interests of the
         Company or any direct or indirect parent of the Company (other than any
         such Equity Interests owned by the Company or any of its Restricted
         Subsidiaries);

                (iii)  make any payment on or with respect to, or purchase,
         redeem, defease or otherwise acquire or retire for value any
         Indebtedness that is subordinated to the Notes or the Subsidiary
         Guarantees, except a payment of interest or principal at the Stated
         Maturity thereof (except for payments into a trust within one year of
         the Stated Maturity of any such subordinated Indebtedness which
         payments effect a defeasance or discharge of such Indebtedness); or

                                       49



                (iv)    make any Restricted Investment (all such payments and
         other actions set forth in these clauses (i) through (iv) above being
         collectively referred to as "Restricted Payments"),

         unless, at the time of and after giving effect to such Restricted
         Payment:

                        (a)   no Default or Event of Default has occurred and is
                continuing or would occur as a consequence of such Restricted
                Payment; and

                        (b)   the Company would, at the time of such Restricted
                Payment and after giving pro forma effect thereto as if such
                Restricted Payment had been made at the beginning of the
                applicable four-quarter period, have been permitted to incur at
                least $1.00 of additional Indebtedness pursuant to the Leverage
                Ratio test set forth in the first paragraph of Section 4.09; and

                        (c)   such Restricted Payment, together with the
                aggregate amount of all other Restricted Payments made by the
                Company and its Restricted Subsidiaries after the date of this
                Indenture (excluding Restricted Payments permitted by clauses
                (2), (3), (4), (5), (7), (8), (9), (10) and, to the extent that
                any payment made by Parent pursuant to the terms of the
                Management Incentive Contracts reduces Consolidated Net Income
                of the Company, (11) of Section 4.07(b)), is less than the sum,
                without duplication, of:

                        (i)   50% of the aggregate Consolidated Net Income of
                        the Company (or, in the event such Consolidated Net
                        Income shall be a deficit, minus 100% of such deficit)
                        accrued for the period beginning July 1, 2002 and ending
                        on the last day of the Company's most recent calendar
                        month for which financial information is available to
                        the Company ending prior to the date of such proposed
                        Restricted Payment, taken as one accounting period, plus

                        (ii)  100% of the aggregate net cash proceeds received
                        by the Company since the date of this Indenture from the
                        issue or sale of Equity Interests of the Company (other
                        than Disqualified Stock) or Disqualified Stock or debt
                        securities of the Company that have been converted into
                        such Equity Interests (other than (x) Equity Interests
                        (or Disqualified Stock or convertible debt securities)
                        sold to a Restricted Subsidiary and (y) Disqualified
                        Stock or convertible debt securities that have been
                        converted into Disqualified Stock), plus

                        (iii) 100% of the net cash proceeds received by the
                        Company as bona fide equity capital contributions since
                        the date of this Indenture, plus

                        (iv)  the aggregate amount returned in cash with respect
                        to Restricted Investments made after the date of this
                        Indenture whether through interest payments, principal
                        payments, dividends or other distributions, plus

                        (v)   the net cash proceeds received by the Company or
                        any of its Restricted Subsidiaries from the disposition
                        (other than to a Restricted Subsidiary), retirement or
                        redemption of all or any portion of Restricted
                        Investments made after the date of this Indenture, plus

                        (vi)  100% of any cash dividends or other cash
                        distributions received by the Company or a Wholly Owned
                        Restricted Subsidiary after the date of this Indenture
                        from an Unrestricted Subsidiary to the extent that such
                        dividends or

                                       50



                        distributions were not otherwise included in
                        Consolidated Net Income for such period and to the
                        extent that such dividends or distributions do not
                        represent payments in respect of taxes attributable to
                        the activities of such Unrestricted Subsidiary.

(b)      The provisions of Section 4.07(a) will not prohibit:

                        (1)   the payment of any dividend within 60 days after
                        the date of declaration of the dividend, if at the date
                        of declaration the dividend payment would have complied
                        with the provisions of this Indenture;

                        (2)   the redemption, repurchase, retirement, defeasance
                        or other acquisition of any subordinated Indebtedness of
                        the Company or any Guarantor or of any Equity Interests
                        of the Company in exchange for, or out of the net cash
                        proceeds of the substantially concurrent sale (other
                        than to a Restricted Subsidiary of the Company) of,
                        Equity Interests of the Company (other than Disqualified
                        Stock); provided that the amount of any such net cash
                        proceeds that are utilized for any such redemption,
                        repurchase, retirement, defeasance or other acquisition
                        shall be excluded from clause (c)(ii) of the preceding
                        paragraph;

                        (3)   the defeasance, redemption, repurchase or other
                        acquisition of subordinated Indebtedness of the Company
                        or any Guarantor with the net cash proceeds from an
                        incurrence of Permitted Refinancing Indebtedness;

                        (4)   the declaration and payment of any dividend by a
                        Restricted Subsidiary of the Company to the holders of
                        such Restricted Subsidiary's Equity Interests on a pro
                        rata basis;

                        (5)   the declaration and payment of dividends or
                        distributions or the making of loans by the Company to
                        Parent in an amount not to exceed the Permitted
                        Shareholder Tax Distributions and the Permitted Holdings
                        Tax Distributions, but only if at the time of any such
                        declaration, dividend, distribution or loan Parent was
                        an S Corporation or a substantially similar pass-through
                        entity for federal income tax purposes and a QSSS
                        Election was in effect for the Company;

                        (6)   the declaration and payment of any dividends or
                        distributions or the making of any loans by the Company
                        or any of its Restricted Subsidiaries to Parent to be
                        used for, and in an amount equal to, the amount of any
                        dividends or distributions paid or loans made by Parent
                        to, or the repurchase of any Equity Interests of Parent
                        from, the Principals or their Related Parties, provided
                        that the aggregate amount of all such dividends,
                        distributions and loans to Parent do not exceed $1.0
                        million in any calendar year;

                        (7)   the repurchase of Equity Interests of the Company
                        or any of its Restricted Subsidiaries deemed to occur
                        upon the exercise of stock options upon surrender of
                        Equity Interests to pay the exercise price of such
                        options;

                        (8)   the declaration and payment of any dividends or
                        distributions or the making of any loans to Parent in an
                        amount not to exceed $1.0 million in any calendar year
                        to permit Parent to pay its corporate costs and expenses
                        incurred in the ordinary course of business;

                                       51



                        (9)   the retirement of any shares of Disqualified Stock
                        of the Company by conversion into, or by exchange for,
                        shares of Disqualified Stock of the Company, or out of
                        the net cash proceeds of the substantially concurrent
                        sale (other than to a Restricted Subsidiary of the
                        Company) of other shares of Disqualified Stock of the
                        Company; provided that the Disqualified Stock of the
                        Company that replaces the retired shares of Disqualified
                        Stock of the Company shall not require the direct or
                        indirect payment of the liquidation preference earlier
                        in time than the final stated maturity of the retired
                        shares of Disqualified Stock of the Company;

                        (10)  the cancellation or forgiveness of any loan
                        between the Company and/or its Affiliates existing on
                        the date of this Indenture or any loan permitted by
                        subparagraphs (5), (6) and (8) above and (11) below (it
                        being understood that any forgiveness or cancellation of
                        such loans made in connection with any Permitted
                        Holdings Tax Distribution or Permitted Shareholder Tax
                        Distribution shall not reduce the amount of subsequent
                        Permitted Holdings Tax Distributions or Permitted
                        Shareholder Tax Distributions); and

                        (11)  the declaration and payment of any dividends or
                        distributions or the making of any loans to Parent for
                        payments required to be made pursuant to the terms of
                        the Management Incentive Contracts in an aggregate
                        amount not to exceed $15.0 million.

         The declaration and payment of any dividends or distributions or the
making of any loans to Parent permitted by (i) subparagraph (5) above shall not
be permitted pursuant thereto at any time when Parent is not an S Corporation or
substantially similar pass-through entity for federal income tax purposes and
(ii) subparagraphs (6) and (11) above shall not be permitted pursuant thereto at
any time following any underwritten primary public offering of common stock of
the Company or Parent.

         The amount of all Restricted Payments (other than cash) will be the
fair market value on the date of the Restricted Payment of the assets or
securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any assets or securities that are required to be valued
by this Section 4.07 will be determined by the Board of Directors whose
resolution with respect thereto shall be delivered to the Trustee. The Board of
Directors' determination must be based upon an opinion or appraisal issued by an
accounting, appraisal or investment banking firm of national standing if the
fair market value exceeds $10.0 million.

Section 4.08.   Dividend and Other Payment Restrictions Affecting Subsidiaries.

         The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:

         (a)    pay dividends or make any other distributions on its Capital
Stock to the Company or any of its Restricted Subsidiaries, or with respect to
any other interest or participation in, or measured by, its profits, or pay any
indebtedness owed to the Company or any of its Restricted Subsidiaries;

         (b)    make loans or advances to the Company or any of its Restricted
Subsidiaries; or

         (c)    transfer any of its properties or assets to the Company or any
of its Restricted Subsidiaries.

                                       52



         However, the preceding restrictions will not apply to encumbrances or
restrictions existing under or by reason of:

                (i)     agreements governing Existing Indebtedness and Credit
         Facilities as in effect on the date of this Indenture and any
         amendments, modifications, restatements, renewals, increases,
         supplements, refundings, replacements or refinancings of those
         agreements; provided that the amendments, modifications, restatements,
         renewals, increases, supplements, refundings, replacement or
         refinancings are not materially less favorable to the Holders than
         those contained in those agreements on the date of this Indenture;

                (ii)    agreements governing Senior Debt permitted to be
         incurred under this Indenture; provided, that provisions relating to
         such encumbrances or restrictions are no more restrictive, taken as a
         whole, than those provisions contained in the Credit Agreement on the
         date of this Indenture;

                (iii)   this Indenture, the Notes and the Subsidiary Guarantees;

                (iv)    applicable law, rule, regulation or order;

                (v)     any instrument governing Indebtedness or Capital Stock
         of a Person acquired by the Company or any of its Restricted
         Subsidiaries as in effect at the time of such acquisition (except to
         the extent such Indebtedness or Capital Stock was incurred in
         connection with or in contemplation of such acquisition), which
         encumbrance or restriction is not applicable to any Person, or the
         properties or assets of any Person, other than the Person, or the
         property or assets of the Person, so acquired; provided that, in the
         case of Indebtedness, such Indebtedness was permitted by the terms of
         this Indenture to be incurred;

                (vi)    customary non-assignment provisions in leases and other
         agreements entered into in the ordinary course of business;

                (vii)   purchase money obligations (including Capital Lease
         Obligations) for property acquired in the ordinary course of business
         that impose restrictions on that property of the nature described in
         clause (c) of the preceding paragraph;

                (viii)  Permitted Refinancing Indebtedness; provided that the
         restrictions contained in the agreements governing such Permitted
         Refinancing Indebtedness are no more restrictive, taken as a whole,
         than those contained in the agreements governing the Indebtedness being
         refinanced;

                (ix)    Liens securing Indebtedness or other obligations
         otherwise permitted to be incurred under the provisions of Section 4.12
         that limit the right of the debtor to dispose of the assets subject to
         such Liens;

                (x)     provisions with respect to the disposition or
         distribution of assets or property in joint venture agreements, asset
         sale agreements, stock sale agreements and other similar agreements
         entered into in the ordinary course of business;

                (xi)    restrictions on cash or other deposits or net worth
         imposed by customers under contracts or net worth provisions contained
         in leases and other agreements entered into in the ordinary course of
         business;

                                       53



                (xii)   provisions contained in the Parent Securities Purchase
         Documents; provided, however, that any amendment or modification of
         such provisions after the date of this Indenture shall be no more
         restrictive, taken as a whole, than those provisions contained in the
         Parent Securities Purchase Documents on the date of this Indenture; and

                (xiii)  customary restrictions with respect to a Restricted
         Subsidiary pursuant to an agreement entered into for the sale or
         disposition of all or substantially all of the Capital Stock or assets
         of such Restricted Subsidiary pending the closing of such sale or
         disposition; provided, that such restrictions apply solely to the
         Capital Stock or assets of the Restricted Subsidiary that is being
         sold.

Section 4.09.   Incurrence of Indebtedness and Issuance of Preferred Stock.

         The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt), and the Company will not issue any Disqualified Stock and will not permit
any of its Restricted Subsidiaries to issue any shares of preferred stock;
provided, however, that the Company or any Guarantor may incur Indebtedness
(including Acquired Debt) or issue Disqualified Stock or preferred stock if the
Company's Leverage Ratio at the time of incurrence of such Indebtedness or the
issuance of such Disqualified Stock or such preferred stock, as the case may be,
after giving pro forma effect to such incurrence or issuance as of such date and
to the use of proceeds therefrom, as if the same had occurred at the beginning
of the most recently ended four fiscal quarter period of the Company for which
internal financial statements are available, would have been no greater than 7.0
to 1.

         The provisions of the first paragraph of this Section 4.09 will not
prohibit the incurrence of any of the following items of Indebtedness
(collectively, "Permitted Debt"):

                (i)     the incurrence by the Company or any Restricted
         Subsidiary of Indebtedness and letters of credit under Credit
         Facilities in an aggregate principal amount at any one time outstanding
         under this clause (i) (with letters of credit being deemed to have a
         principal amount equal to the maximum potential liability of the
         Company and its Subsidiaries thereunder) not to exceed $150.0 million
         less the aggregate amount of all Net Proceeds of Asset Sales and
         Relocations applied by the Company or any of its Restricted
         Subsidiaries after the date of this Indenture to repay any term
         Indebtedness under a Credit Facility or to repay any revolving credit
         Indebtedness under a Credit Facility and effect a corresponding
         commitment reduction thereunder, in each case for both such term
         Indebtedness and such revolving credit Indebtedness pursuant to Section
         4.10;

                (ii)    the incurrence by the Company and its Restricted
         Subsidiaries of the Existing Indebtedness;

                (iii)   the incurrence by the Company and the Guarantors of
         Indebtedness represented by the Notes and the related Subsidiary
         Guarantees to be issued on the date of this Indenture and the Exchange
         Notes and the related Subsidiary Guarantees to be issued pursuant to
         the Registration Rights Agreement;

                (iv)    the incurrence by the Company or any of its Restricted
         Subsidiaries of Indebtedness represented by Capital Lease Obligations,
         mortgage financings or purchase money obligations, in each case,
         incurred for the purpose of financing all or any part of the purchase
         price or cost of construction or improvement of property, plant or
         equipment used in the business

                                       54



         of the Company or such Restricted Subsidiary (whether through the
         direct purchase of assets or through the acquisition of at least a
         majority of the Voting Stock of any Person owning such assets), in an
         aggregate principal amount, including all Permitted Refinancing
         Indebtedness incurred to refund, refinance or replace any Indebtedness
         incurred pursuant to this clause (iv), not to exceed $10.0 million at
         any time outstanding;

                (v)     the incurrence by the Company or any of its Restricted
         Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or
         the net proceeds of which are used to refund, refinance or replace,
         Indebtedness (other than intercompany Indebtedness) that was permitted
         by this Indenture to be incurred under the first paragraph of this
         Section 4.09 or any of clauses (ii), (iii), (iv), (v), (viii), (ix) or
         (xi) of this paragraph;

                (vi)    the incurrence by the Company or any of its Restricted
         Subsidiaries of intercompany Indebtedness between or among the Company
         and any of its Wholly Owned Restricted Subsidiaries; provided, however,
         that (a) if the Company or any Guarantor is the obligor on such
         Indebtedness, such Indebtedness must be (i) unsecured and (ii) if the
         obligee is neither the Company nor a Guarantor, expressly subordinated
         to the prior payment in full in cash of all obligations with respect to
         the Notes (in the case of the Company) or the related Subsidiary
         Guarantee (in the case of a Guarantor); and (b) any subsequent issuance
         or transfer of Equity Interests that results in any such Indebtedness
         being held by a Person other than the Company or a Subsidiary of the
         Company and any sale or other transfer of any such Indebtedness to a
         Person that is not either the Company or a Restricted Subsidiary of the
         Company will be deemed, in each case, to constitute an incurrence of
         such Indebtedness by the Company or such Restricted Subsidiary, as the
         case may be, that was not permitted by this clause (vi);

                (vii)   the incurrence by the Company or any of its Restricted
         Subsidiaries of Hedging Obligations that are incurred for the purpose
         of hedging (x) interest rate risk with respect to Indebtedness of the
         Company or any Restricted Subsidiary permitted to be incurred under
         this Indenture and which shall have a notional amount no greater than
         the payments due with respect to the Indebtedness being hedged thereby,
         or (y) currency exchange rate risk in connection with then existing
         financial obligations or the acquisition of goods or services and not
         for purposes of speculation;

                (viii)  guarantees provided pursuant to Section 4.17 and the
         guarantee by the Company or any Restricted Subsidiary of Indebtedness
         of the Company or a Restricted Subsidiary of the Company that was
         permitted to be incurred by another provision of this Section 4.09;

                (ix)    Indebtedness incurred by the Company or any of its
         Restricted Subsidiaries constituting reimbursement obligations with
         respect to letters of credit issued in the ordinary course of business,
         including, without limitation, letters of credit in respect to workers'
         compensation claims or self-insurance, or other Indebtedness with
         respect to reimbursement type obligations regarding workers'
         compensation claims; provided, however, that upon the drawing of such
         letters of credit or the incurrence of such Indebtedness, such
         obligations are reimbursed within 30 days following such drawing or
         incurrence;

                (x)     Obligations in respect of performance and surety bonds
         and completion guarantees provided by the Company or any of its
         Restricted Subsidiaries in the ordinary course of business;

                (xi)    Acquisition Debt of the Company or any Restricted
         Subsidiary if (w) such Acquisition Debt is incurred within 365 days
         after the date on which the related definitive

                                       55



         acquisition agreement was entered into by the Company or such
         Restricted Subsidiary, (x) the aggregate principal amount of such
         Acquisition Debt is no greater than the aggregate principal amount of
         Acquisition Debt set forth in a notice from the Company to the Trustee
         (an "Incurrence Notice") within 30 days after the date on which the
         related definitive acquisition agreement was entered into by the
         Company or such Restricted Subsidiary, which notice shall be executed
         on the Company's behalf by an executive officer of the Company in such
         capacity and shall describe in reasonable detail the acquisition that
         such Acquisition Debt will be incurred to finance, (y) after giving pro
         forma effect to the acquisition described in such Incurrence Notice,
         the Company or such Restricted Subsidiary could have incurred such
         Acquisition Debt under this Indenture, including compliance with the
         first paragraph of this Section 4.09, as of the date upon which the
         Company delivers such Incurrence Notice to the Trustee and (z) such
         Acquisition Debt is utilized solely to finance the acquisition
         described in such Incurrence Notice and any other pending acquisitions
         previously described in one or more Incurrence Notices and which
         satisfy the foregoing provisions (including to repay or refinance
         indebtedness or other obligations incurred in connection with such
         acquisition and to pay related fees and expenses); provided, however,
         that any Incurrence Notice given hereunder may be withdrawn or the
         amount of Acquisition Debt referred to therein may be reduced at any
         time prior to the incurrence of such Acquisition Debt;

                (xii)   the incurrence by the Company's Unrestricted
         Subsidiaries of Non-Recourse Debt, provided, however, that if any such
         Indebtedness ceases to be Non-Recourse Debt of an Unrestricted
         Subsidiary, such event will be deemed to constitute an incurrence of
         Indebtedness by a Restricted Subsidiary of the Company that was not
         permitted by this clause (xii);

                (xiii)  the incurrence by the Company or any Restricted
         Subsidiary of Indebtedness arising from the honoring by a bank or other
         financial institution of a check, draft or similar instrument
         inadvertently drawn against insufficient funds in the ordinary course
         of business and such Indebtedness is extinguished within five business
         days after notice thereof;

                (xiv)   Indebtedness in respect of the Shop At Home Relocation
         Profits to the extent required to be paid to the Shop At Home Sellers
         pursuant to the Shop At Home Acquisition Documents; and

                (xv)    the incurrence by the Company or any of its Restricted
         Subsidiaries of additional Indebtedness in an aggregate principal
         amount (or accreted value, as applicable) at any time outstanding,
         including all Permitted Refinancing Indebtedness incurred to refund,
         refinance or replace any Indebtedness incurred pursuant to this clause
         (xv), not to exceed $10.0 million.

         For purposes of determining compliance with this Section 4.09, in the
event that an item of proposed Indebtedness meets the criteria of more than one
of the categories of Permitted Debt described in clauses (i) through (xv) above,
or is entitled to be incurred pursuant to the first paragraph of this Section
4.09, the Company will be permitted to classify such item of Indebtedness on the
date of its incurrence, or later reclassify all or a portion of such item of
Indebtedness, in any manner that complies with this Section 4.09. Indebtedness
under the Credit Agreement, including Guarantees of such Indebtedness, on the
date on which Notes are first issued and authenticated under this Indenture will
be deemed to have been incurred on such date in reliance on the exception
provided by clause (i) of the definition of Permitted Debt.

         Accrual of interest, the accretion of accreted value and the payment of
interest in the form of additional Indebtedness will not be deemed to be an
incurrence of Indebtedness for purposes of this Section 4.09.

                                       56



Section 4.10.   Asset Sales

         (a)    The Company will not, and will not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless:

                (i)     the Company (or the Restricted Subsidiary, as the case
         may be) receives consideration at the time of the Asset Sale at least
         equal to the fair market value of the assets or Equity Interests issued
         or sold or otherwise disposed of;

                (ii)    the fair market value is determined by the Company's
         Board of Directors and evidenced by a resolution of the Board of
         Directors set forth in an Officers' Certificate delivered to the
         Trustee; and

                (iii)   at least 75% of the consideration received in the Asset
         Sale by the Company or such Restricted Subsidiary is in the form of
         cash or Cash Equivalents except to the extent the Company is
         undertaking a Permitted Asset Swap. For purposes of this provision and
         subparagraph (z) below, each of the following shall be deemed to be
         cash:

                        (A)   any liabilities, as shown on the Company's most
                recent consolidated balance sheet, of the Company or any
                Restricted Subsidiary (other than contingent liabilities and
                liabilities that are by their terms subordinated to the Notes or
                any Subsidiary Guarantee) that are assumed by the transferee of
                any such assets pursuant to a customary novation agreement that
                releases the Company or such Restricted Subsidiary from further
                liability; and

                        (B)   any securities, notes or other obligations
                received by the Company or any such Restricted Subsidiary from
                such transferee converted by the Company or such Restricted
                Subsidiary within 90 days into cash or Cash Equivalents, to the
                extent of the cash or Cash Equivalents received in that
                conversion.

         The 75% limitation referred to in clause (iii) above will not apply to
any Asset Sale in which the cash or Cash Equivalents portion of the
consideration received therefrom, determined in accordance with the preceding
provision, is equal to or greater than what the after tax proceeds would have
been had such Asset Sale complied with the aforementioned 75% limitation.

         Notwithstanding the foregoing, the Company or any Restricted Subsidiary
will be permitted to consummate an Asset Sale without complying with the
foregoing if:

                (x)     the Company or such Restricted Subsidiary receives
         consideration at the time of such Asset Sale at least equal to the fair
         market value of the assets or other property sold, issued or otherwise
         disposed of;

                (y)     the fair market value is determined by the Company's
         Board of Directors and evidenced by a resolution of the Board of
         Directors set forth in an Officers' Certificate delivered to the
         Trustee; and

                (z)     at least 75% of the consideration for such Asset Sale
         constitutes a controlling interest in a Permitted Business, assets used
         or useful in a Permitted Business and/or cash and Cash Equivalents;

                                       57



provided, however, that any cash or Cash Equivalents (other than any amount
deemed cash under clause (iii)(A) of the preceding paragraph) received by the
Company or such Restricted Subsidiary in connection with any Asset Sale
permitted to be consummated under this paragraph shall constitute Net Proceeds
subject to the provisions of the next paragraph.

         (b)    Within 365 days after the receipt of any Net Proceeds from an
Asset Sale, the Company or such Restricted Subsidiary may apply those Net
Proceeds at its option:

                (i)     to repay Senior Debt and, if the Senior Debt repaid is
         revolving credit Indebtedness, to correspondingly reduce commitments
         with respect thereto;

                (ii)    to acquire all or substantially all of the assets of, or
         a majority of the Voting Stock of, a Permitted Business;

                (iii)   to make capital expenditures that are used or useful in
         a Permitted Business; or

                (iv)    to acquire other assets that are used or useful in a
         Permitted Business.

         Pending the final application of any Net Proceeds, the Company may
temporarily reduce revolving credit borrowings or otherwise invest the Net
Proceeds in any manner that is not prohibited by this Indenture.

         Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the preceding paragraphs will constitute "Excess Proceeds." When the
aggregate amount of Excess Proceeds exceeds $10.0 million, the Company will make
an Asset Sale Offer to all Holders of Notes and all holders of other
Indebtedness that is pari passu with the Notes containing provisions similar to
those set forth in this Indenture with respect to offers to purchase or redeem
with the proceeds of sales of assets in accordance with Section 3.09 hereof to
purchase the maximum principal amount of Notes and such other pari passu
Indebtedness that may be purchased out of the Excess Proceeds. The offer price
in any Asset Sale Offer will be equal to 100% of principal amount plus accrued
and unpaid interest and Liquidated Damages, if any, to the date of purchase, and
will be payable in cash. If the date of purchase is on or after an interest
record date and on or before the related interest payment date, accrued and
unpaid interest, if any, will be paid to the Holder in whose name a Note is
registered at the close of business on such record date, and no additional
interest will be payable to holders who tender pursuant to the Asset Sale Offer.
If any Excess Proceeds remain after consummation of an Asset Sale Offer, the
Company may use those Excess Proceeds for any purpose not otherwise prohibited
by this Indenture. If the aggregate principal amount of Notes and other pari
passu Indebtedness tendered into such Asset Sale Offer exceeds the amount of
Excess Proceeds, the Trustee shall select the Notes and such other pari passu
Indebtedness to be purchased on a pro rata basis. Upon completion of each Asset
Sale Offer, the amount of Excess Proceeds shall be reset at zero.

         (c)    The Company will comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent those laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the Asset Sale
provisions of this Indenture, the Company will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations under the Asset Sale provisions of this Indenture by virtue of such
conflict.

                                       58



Section 4.11.   Transactions with Affiliates.

         The Company will not, and will not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate (each, an "Affiliate Transaction"), unless:

         (a)    the Affiliate Transaction is on terms that are no less favorable
to the Company or the relevant Restricted Subsidiary than those that would have
been obtained in a comparable transaction by the Company or such Restricted
Subsidiary with an unrelated Person; and

         (b)    the Company delivers to the Trustee:

                (i)     with respect to any Affiliate Transaction or series of
         related Affiliate Transactions involving aggregate consideration in
         excess of $1.0 million, a resolution of the Board of Directors set
         forth in an Officers' Certificate certifying that such Affiliate
         Transaction complies with this Section 4.11 and that such Affiliate
         Transaction has been approved by a majority of the members of the Board
         of Directors, which approval, if the Board of Directors includes
         disinterested members at such time, shall include the approval of at
         least one disinterested member; and

                (ii)    with respect to any Affiliate Transaction or series of
         related Affiliate Transactions involving aggregate consideration in
         excess of $5.0 million, an opinion as to the fairness to the Company of
         such Affiliate Transaction from a financial point of view issued by an
         accounting, appraisal or investment banking firm of national standing;
         provided, that upon the election or appointment of one or more
         disinterested members to the Board of Directors, an opinion as to
         fairness required by this paragraph (b)(ii) will only be required for
         Affiliate Transactions involving aggregate consideration in excess of
         $10.0 million.

         The following items will not be deemed to be Affiliate Transactions
and, therefore, will not be subject to the provisions of the prior paragraph:

         (a)    any employment agreement or other compensation arrangement
entered into by the Company or any of its Restricted Subsidiaries in the
ordinary course of business and the payment of compensation and the
reimbursement of expenses pursuant thereto;

         (b)    transactions between or among the Company and/or any of its
Restricted Subsidiaries;

         (c)    transactions with a Person that is an Affiliate of the Company
solely because the Company owns an Equity Interest in, or controls, such Person;

         (d)    payment of reasonable fees and expenses to directors;

         (e)    indemnification of officers and directors of the Company or any
Restricted Subsidiary pursuant to reasonable and customary indemnification
provisions;

         (f)    sales of Equity Interests (other than Disqualified Stock) to
Affiliates of the Company;

         (g)    Restricted Payments that are permitted by the provisions of
Section 4.07, and Permitted Investments;

                                       59



         (h)    transactions under any contract or agreement of the Company or
any Restricted Subsidiary in effect on the date of this Indenture, in each case,
as the same may be amended, modified or replaced from time to time so long as
any such amendment, modification or replacement is no less favorable to the
Company and its Restricted Subsidiaries than the contract or agreement as in
effect on the date of this Indenture;

         (i)    services provided to any Unrestricted Subsidiary in the ordinary
course of business, which the Board of Directors has determined, pursuant to a
resolution thereof, are provided on terms at least as favorable to the Company
and its Restricted Subsidiaries as those that would have been obtained in a
comparable transaction with an unrelated Person;

         (j)    payments of commissions and fees to, and on-going business
dealings with, Spanish Media Rep Team, Inc. in the ordinary course of business;

         (k)    payments of outstanding principal and interest on the Liberman
Subordinated Debt on the date of this Indenture as described under the heading
"Use of Proceeds" in the Company's offering circular dated June 28, 2002; and

         (l)    any transactions permitted under Section 5.01, including the
merger of Intermediate Holdings with and into the Company.

Section 4.12.   Liens.

         The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or suffer to exist any Lien of any
kind securing Indebtedness or trade payables on any asset now owned or hereafter
acquired, except Permitted Liens.

Section 4.13.   Corporate Existence.

         Subject to Article 5 hereof, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect: (i) its
corporate existence, and the corporate, partnership or other existence of each
of its Restricted Subsidiaries, in accordance with the respective organizational
documents (as the same may be amended from time to time) of the Company or any
such Restricted Subsidiary; and (ii) the rights (charter and statutory),
licenses and franchises of the Company and its Restricted Subsidiaries;
provided, however, that the Company shall not be required to preserve any such
right, license or franchise, or the corporate, partnership or other existence of
any of its Restricted Subsidiaries, if the Board of Directors shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Company and its Subsidiaries, taken as a whole, and that the
loss thereof is not adverse in any material respect to the Holders of the Notes.

Section 4.14.   Business Activities

         Until the consummation of a Public Equity Offering, the Company will
not, and will not permit any Subsidiary to, engage in any business other than
Permitted Businesses, except to such extent as would not be material to the
Company and its Subsidiaries taken as a whole.

Section 4.15.   Offer to Repurchase Upon Change of Control.

         (a)    Upon the occurrence of a Change of Control, the Company will
make an offer (a "Change of Control Offer") to each Holder to repurchase all or
any part (equal to $1,000 or an integral multiple thereof) of each Holder's
Notes at a purchase price equal to 101% of the aggregate principal

                                       60



amount thereof plus accrued and unpaid interest and Liquidated Damages thereon,
if any, to the date of purchase (the "Change of Control Payment"). Within 30
business days following any Change of Control, the Company will mail a notice to
each Holder describing the transaction or transactions that constitute the
Change of Control and stating:

                (i)    that the Change of Control Offer is being made pursuant
         to this Section 4.15 and that all Notes tendered will be accepted for
         payment;

                (ii)   the purchase price and the purchase date, which shall be
         no earlier than 30 days and no later than 60 days from the date such
         notice is mailed (the "Change of Control Payment Date");

                (iii)  that any Note not tendered will continue to accrue
         interest;

                (iv)   that, unless the Company defaults in the payment of the
         Change of Control Payment, all Notes accepted for payment pursuant to
         the Change of Control Offer will cease to accrue interest after the
         Change of Control Payment Date;

                (v)    that Holders electing to have any Notes purchased
         pursuant to a Change of Control Offer will be required to surrender the
         Notes, with the form entitled "Option of Holder to Elect Purchase" on
         the reverse of the Notes completed, to the Paying Agent at the address
         specified in the notice prior to the close of business on the third
         Business Day preceding the Change of Control Payment Date;

                (vi)   that Holders will be entitled to withdraw their election
         if the Paying Agent receives, not later than the close of business on
         the second Business Day preceding the Change of Control Payment Date, a
         telegram, telex, facsimile transmission or letter setting forth the
         name of the Holder, the principal amount of Notes delivered for
         purchase, and a statement that such Holder is withdrawing his election
         to have the Notes purchased; and

                (vii)  that Holders whose Notes are being purchased only in part
         will be issued new Notes equal in principal amount to the unpurchased
         portion of the Notes surrendered, which unpurchased portion must be
         equal to $1,000 in principal amount or an integral multiple thereof.

         The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Notes in connection with a Change of Control. To the extent that
the provisions of any securities laws or regulations conflict with the
provisions of Sections 3.09 or 4.15 of this Indenture, the Company will comply
with the applicable securities laws and regulations and will not be deemed to
have breached its obligations under Section 3.09 or this Section 4.15 by virtue
of such conflict.

         (b)    On the Change of Control Payment Date, the Company will, to the
extent lawful:

                (i)    accept for payment all Notes or portions thereof properly
         tendered pursuant to the Change of Control Offer;

                (ii)   deposit with the Paying Agent an amount equal to the
         Change of Control Payment in respect of all Notes or portions thereof
         properly tendered; and

                                       61



                (iii)  deliver or cause to be delivered to the Trustee the Notes
         properly accepted together with an Officers' Certificate stating the
         aggregate principal amount of Notes or portions thereof being purchased
         by the Company.

         The Paying Agent will promptly mail to each Holder of Notes properly
tendered the Change of Control Payment for such Notes, and the Trustee will
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; provided that each new Note will be in a
principal amount of $1,000 or an integral multiple thereof. If the Change of
Control Payment Date is on or after an interest record date and on or before the
related interest payment date, accrued and unpaid interest, if any, will be paid
to the Holder in whose name a Note is registered at the close of business on
such record date, and no additional interest will be payable to Holders who
tender pursuant to the Change of Control Offer.

         (c)    Prior to complying with any of the provisions of this Section
4.15, but in any event within 90 days following a Change of Control, the Company
will either repay all outstanding Senior Debt or obtain the requisite consents,
if any, under all the agreements governing outstanding Senior Debt to permit the
repurchase of the Notes required by this Section 4.15. The Company will publicly
announce the results of the Change of Control Offer on or as soon as practicable
after the Change of Control Payment Date.

         (d)    Notwithstanding anything to the contrary in this Section 4.15,
the Company will not be required to make a Change of Control Offer upon a Change
of Control if a third party makes the Change of Control Offer in the manner, at
the times and otherwise in compliance with the requirements set forth in this
Section 4.15 and Section 3.09 hereof and all other provisions of this Indenture
applicable to a Change of Control Offer made by the Company and purchases all
Notes properly tendered and not withdrawn under the Change of Control Offer.

Section 4.16.   No Senior Subordinated Debt

         The Company will not incur, create, issue, assume, guarantee or
otherwise become liable for any Indebtedness that is subordinate or junior in
right of payment to any Senior Debt of the Company and senior in any respect in
right of payment to the Notes. No Guarantor will incur, create, issue, assume,
guarantee or otherwise become liable for any Indebtedness that is subordinate or
junior in right of payment to the Senior Debt of such Guarantor and senior in
any respect in right of payment to such Guarantor's Subsidiary Guarantee.

Section 4.17.   Additional Subsidiary Guarantees.

         If the Company or any of its Subsidiaries acquires or creates another
Domestic Subsidiary after the date of this Indenture, excluding all Subsidiaries
that have been properly designated as Unrestricted Subsidiaries in accordance
with this Indenture for so long as they continue to constitute Unrestricted
Subsidiaries, then that newly acquired or created Domestic Subsidiary will
become a Guarantor and execute a supplemental indenture and deliver an opinion
of counsel satisfactory to the Trustee within ten Business Days of the date on
which it was acquired or created.

Section 4.18.   Limitation on Issuances of Equity Interests in Wholly Owned
Restricted Subsidiaries.

         The Company will not, and will not permit any of its Subsidiaries to,
transfer, convey, sell, lease or otherwise dispose of any Equity Interests in
any Wholly Owned Restricted Subsidiary of the Company to any Person (other than
the Company or another Wholly Owned Restricted Subsidiary of the Company),
unless:

                                       62



                (i)    as a result of such transfer, conveyance, sale, lease or
         other disposition or as a result of such issuance described below, such
         Restricted Subsidiary no longer constitutes a Subsidiary; and

                (ii)   the cash Net Proceeds from such transfer, conveyance,
         sale, lease or other disposition are applied in accordance with Section
         4.10 hereof.

         In addition, the Company will not permit any Wholly Owned Restricted
Subsidiary of the Company to issue any of its Equity Interests (other than, if
necessary, shares of its Capital Stock constituting directors' qualifying
shares) to any Person other than to the Company or a Wholly Owned Restricted
Subsidiary of the Company unless the terms of clauses (i) and (ii) above are
satisfied.

Section 4.19.   Payments for Consent.

         The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, pay or cause to be paid any consideration to or for the
benefit of any Holder of Notes for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of this Indenture or the Notes
unless such consideration is offered to be paid and is paid to all Holders of
the Notes that consent, waive or agree to amend in the time frame set forth in
the solicitation documents relating to such consent, waiver or agreement.

Section 4.20.   Designation of Restricted and Unrestricted Subsidiaries

         The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if that designation would not cause a Default. If a
Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate
fair market value of all outstanding Investments owned by the Company and its
Restricted Subsidiaries in the Subsidiary properly designated will be deemed to
be an Investment made as of the time of the designation and will reduce the
amount available for Restricted Payments under Section 4.07(a) or Permitted
Investments, as determined by the Company. That designation will only be
permitted if the Investment would be permitted at that time and if the
Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary. The Board of Directors may redesignate any Unrestricted Subsidiary
to be a Restricted Subsidiary if the redesignation would not cause a Default.

                                   ARTICLE 5.
                                   SUCCESSORS

Section 5.01.   Merger, Consolidation, or Sale of Assets.

         The Company will not, directly or indirectly: (1) consolidate or merge
with or into another Person (whether or not the Company is the surviving
corporation); or (2) sell, assign, transfer, convey or otherwise dispose of all
or substantially all of the properties or assets of the Company and its
Restricted Subsidiaries taken as a whole, in one or more related transactions,
to another Person unless:

                (i)    either: (a) the Company is the surviving corporation; or
         (b) the Person formed by or surviving any such consolidation or merger
         (if other than the Company) or to which such sale, assignment,
         transfer, conveyance or other disposition has been made is a
         corporation organized or existing under the laws of the United States,
         any state of the United States or the District of Columbia;

                (ii)   the Person formed by or surviving any such consolidation
         or merger (if other than the Company) or the Person to which such sale,
         assignment, transfer, conveyance or other

                                       63



         disposition shall have been made assumes all the obligations of the
         Company under the Notes, this Indenture and the Registration Rights
         Agreement pursuant to agreements reasonably satisfactory to the
         Trustee;

                (iii)  immediately after such transaction, no Default or Event
         of Default exists; and

                (iv)   the Company or the Person formed by or surviving any such
         consolidation or merger (if other than the Company), or to which such
         sale, assignment, transfer, conveyance or other disposition has been
         made (a) would, on the date of such transaction after giving pro forma
         effect thereto and any related financing transactions as if the same
         had occurred at the beginning of the applicable four-quarter period, be
         permitted to incur at least $1.00 of additional Indebtedness pursuant
         to the Leverage Ratio test set forth in the first paragraph of Section
         4.09 or (b) would have a lower Leverage Ratio immediately after the
         transaction, after giving pro forma effect to the transaction as if the
         transaction had occurred at the beginning of the applicable four
         quarter period, than the Company's Leverage Ratio immediately prior to
         the transaction.

         In addition, the Company may not, directly or indirectly, lease all or
substantially all of its properties or assets, in one or more related
transactions, to any other Person. This Section 5.01 will not prohibit (i) any
sale, assignment, transfer, conveyance or other disposition of assets between or
among the Company and any of its Wholly Owned Restricted Subsidiaries, (ii) any
Restricted Subsidiary from consolidating with, merging into or transferring all
or part of its assets to the Company or any Restricted Subsidiary, (iii) the
Company from merging with an Affiliate incorporated solely for the purpose of
reincorporating the Company in another jurisdiction to realize tax or other
benefits, or (iv) Intermediate Holdings from merging with and into the Company
following the date of this Indenture.

Section 5.02.   Successor Corporation Substituted.

         Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in a transaction that is subject to, and that complies with
Section 5.01 hereof, the successor corporation formed by such consolidation or
into or with which the Company is merged or to which such sale, assignment,
transfer, lease, conveyance or other disposition is made shall succeed to, and
be substituted for (so that from and after the date of such consolidation,
merger, sale, lease, conveyance or other disposition, the provisions of this
Indenture referring to the "Company" shall refer instead to the successor
corporation and not to the Company), and may exercise every right and power of
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein; provided, however, that the
predecessor Company shall not be relieved from the obligation to pay the
principal of and interest on the Notes except in the case of a sale, assignment,
transfer, conveyance or other disposition of all of the Company's assets in a
transaction that is subject to, and that complies with the provisions of,
Section 5.01 hereof.

                                   ARTICLE 6.
                              DEFAULTS AND REMEDIES

Section 6.01.   Events of Default.

         An "Event of Default" occurs if:

         (a)    the Company defaults in the payment when due of interest on, or
Liquidated Damages with respect to, the Notes, whether or not prohibited by the
subordination provisions of this Indenture, and such default continues for a
period of 30 days;

                                       64



         (b)    the Company defaults in the payment when due of principal of, or
premium, if any, on the Notes, whether or not prohibited by the subordination
provisions of this Indenture, when the same becomes due and payable at maturity,
upon redemption (including in connection with an offer to purchase) or
otherwise;

         (c)    the Company or any of its Restricted Subsidiaries fails to
comply with the provisions of Section 4.15 or 5.01 hereof;

         (d)    the Company or any of its Restricted Subsidiaries fails to
comply with the provisions of Section 4.07, 4.09 or 4.10 hereof for 30 days
after notice to the Company by the Trustee or the Holders of at least 25% in
aggregate principal amount of the Notes then outstanding;

         (e)    the Company or any of its Subsidiaries fails to observe or
perform any other covenant, representation, warranty or other agreement in this
Indenture or the Notes for 60 days after notice to the Company by the Trustee or
the Holders of at least 25% in aggregate principal amount of the Notes then
outstanding;

         (f)    a default occurs under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or evidenced
any Indebtedness for money borrowed by the Company or any of the Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any of the
Restricted Subsidiaries), whether such Indebtedness or Guarantee now exists, or
is created after the date hereof, if that default:

                (i)    is caused by a failure to pay principal of such
                Indebtedness at the final stated maturity thereof (giving effect
         to any applicable grace periods and any extensions thereof) (a "Payment
         Default"); or

                (ii)   results in the acceleration of such Indebtedness prior to
         its express maturity

         and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness under which
there has been and continues to be a Payment Default or the maturity of which
has been and continues to be so accelerated, aggregates $5.0 million or more;

         (g)    the Company or any of its Restricted Subsidiaries fails to pay
final judgments aggregating in excess of $5.0 million (not covered by
insurance), which judgments are not paid, vacated, discharged, bonded or stayed
for a period of 60 days;

         (h)    the incurrence by Parent of Specified Parent Debt (other than
the refinancing of any indebtedness under the Existing Parent Notes) if, at the
time of any such incurrence and after giving pro forma effect to such incurrence
as of such date and to the use of proceeds therefrom, as if the same had
occurred at the beginning of the most recently ended four fiscal quarter period
of Parent for which internal financial statements are available, the Parent Debt
Ratio would have exceeded 7.0 to 1 and the failure for 30 days after notice from
the Trustee or Holders of at least 25% in aggregate principal amount of the
outstanding Notes to cure such default;

         (i)    except as permitted by this Indenture, any Subsidiary Guarantee
of a Significant Subsidiary is held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason to be in full force and
effect or any Guarantor which is a Significant Subsidiary, or any Person acting
on behalf of any Guarantor which is a Significant Subsidiary, shall deny or
disaffirm its obligations under its Subsidiary Guarantee; provided, however,
that an Event of Default will also be deemed to occur with respect to Subsidiary
Guarantors that are not Significant Subsidiaries ("Insignificant Subsidiaries")
if the

                                       65



Subsidiary Guarantees of such Insignificant Subsidiaries are held in any
judicial proceeding to be unenforceable or invalid or shall cease for any reason
to be in full force and effect or such Insignificant Subsidiaries deny or
disaffirm their obligations under their Subsidiary Guarantees (other than in
accordance with the terms of such Subsidiary Guarantee), if when aggregated and
taken as a whole the Insignificant Subsidiaries subject to this clause (i) would
meet the definition of a Significant Subsidiary;

         (j)    the Company or any of its Significant Subsidiaries or any group
of Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary, pursuant to or within the meaning of Bankruptcy Law:

                (i)    commences a voluntary case,

                (ii)   consents to the entry of an order for relief against it
         in an involuntary case,

                (iii)  consents to the appointment of a custodian of it or for
         all or substantially all of its property,

                (iv)   makes a general assignment for the benefit of its
         creditors,

                (v)    generally is not paying its debts as they become due; or

         (k)    a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:

                (i)    is for relief against the Company or any of its
         Significant Subsidiaries or any group of Subsidiaries that, taken as a
         whole, would constitute a Significant Subsidiary in an involuntary
         case;

                (ii)   appoints a custodian of the Company or any of its
         Significant Subsidiaries or any group of Subsidiaries that, taken as a
         whole, would constitute a Significant Subsidiary or for all or
         substantially all of the property of the Company or any of its
         Significant Subsidiaries or any group of Subsidiaries that, taken as a
         whole, would constitute a Significant Subsidiary; or

                (iii)  orders the liquidation of the Company or any of its
         Significant Subsidiaries or any group of Subsidiaries that, taken as a
         whole, would constitute a Significant Subsidiary;

and the order or decree remains unstayed and in effect for 60 consecutive days.

Section 6.02.   Acceleration.

         If any Event of Default (other than an Event of Default specified in
clause (j) or (k) of Section 6.01 hereof with respect to the Company, any
Significant Subsidiary or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary) occurs and is continuing, the Trustee
or the Holders of at least 25% in principal amount of the then outstanding Notes
may declare all the Notes to be due and payable immediately. Upon any such
declaration, the Notes shall become due and payable immediately. Notwithstanding
the foregoing, if an Event of Default specified in clause (j) or (k) of Section
6.01 hereof occurs with respect to the Company, any Restricted Subsidiary that
is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken
together, would constitute a Significant Subsidiary, all outstanding Notes shall
be due and payable immediately without further action or notice. The Holders of
a majority in aggregate principal amount of the then outstanding Notes by
written notice to the Trustee may on behalf of all of the Holders rescind an
acceleration and its consequences if the

                                       66



rescission would not conflict with any judgment or decree and if all existing
Events of Default (except nonpayment of principal, interest or premium that has
become due solely because of the acceleration) have been cured or waived.

         In the event of a declaration of acceleration of the Notes because an
Event of Default has occurred and is continuing as a result of the acceleration
of any Indebtedness described in clause (f) of Section 6.01, the declaration of
acceleration of the Notes shall be automatically annulled if the holders of any
Indebtedness described in clause (f) of Section 6.01 have rescinded the
declaration of acceleration in respect of the Indebtedness within 30 days of the
date of the declaration and if: (i) the annulment of the acceleration of Notes
would not conflict with any judgment or decree of a court of competent
jurisdiction; and (ii) all existing Events of Default, except nonpayment of
principal or interest on the Notes that became due solely because of the
acceleration of the Notes, have been cured or waived.

         If an Event of Default occurs on or after July 15, 2007 by reason of
any willful action (or inaction) taken (or not taken) by or on behalf of the
Company with the intention of avoiding payment of the premium that the Company
would have had to pay if the Company then had elected to redeem the Notes
pursuant to Section 3.07 hereof, then, upon acceleration of the Notes, an
equivalent premium shall also become and be immediately due and payable, to the
extent permitted by law, anything in this Indenture or in the Notes to the
contrary notwithstanding. If an Event of Default occurs prior to July 15, 2007
by reason of any willful action (or inaction) taken (or not taken) by or on
behalf of the Company with the intention of avoiding the prohibition on
redemption of the Notes prior to such date, then, upon acceleration of the
Notes, an additional premium shall also become and be immediately due and
payable in an amount, for each of the years beginning on July 15 of the years
set forth below, as set forth below (expressed as a percentage of the principal
amount of the Notes on the date of payment that would otherwise be due but for
the provisions of this sentence):

        Year                                                   Percentage
        ----                                                   ----------
        2003 ...............................................     111.813%
        2004 ...............................................     110.125%
        2005 ...............................................     108.438%
        2006 and thereafter ................................     106.750%

Section 6.03.   Other Remedies.

         If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal, premium, and
Liquidated Damages, if any, and interest on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.

         The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.

Section 6.04.   Waiver of Past Defaults.

         Holders of not less than a majority in aggregate principal amount of
the then outstanding Notes by notice to the Trustee may on behalf of the Holders
of all of the Notes waive any existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of interest or Liquidated Damages on, or the principal of, the Notes
(including in connection

                                       67



with an offer to purchase); provided, however, that the Holders of a majority in
aggregate principal amount of the then outstanding Notes by written notice to
the Trustee may on behalf of all of the Holders rescind an acceleration and its
consequences, including any related payment default that resulted from such
acceleration, if the rescission would not conflict with a judgment or decree and
if all existing Events of Default (except nonpayment of principal, interest or
premium that has become due solely because of the acceleration) have been cured
or waived. Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.

Section 6.05.   Control by Majority.

         Holders of a majority in principal amount of the then outstanding Notes
may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Notes or that may involve the
Trustee in personal liability.

Section 6.06.   Limitation on Suits.

         A Holder of a Note may pursue a remedy with respect to this Indenture
or the Notes only if:

         (a)    such Holder gives to the Trustee written notice of a continuing
Event of Default;

         (b)    the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the remedy;

         (c)    such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee against
any loss, liability or expense;

         (d)    the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the provision of
indemnity; and

         (e)    during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request.

         A Holder of a Note may not use this Indenture to prejudice the rights
of another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.

Section 6.07.   Rights of Holders of Notes to Receive Payment.

         Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium and Liquidated
Damages, if any, and interest on the Note, on or after the respective due dates
expressed in the Note (including in connection with an offer to purchase), or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.

Section 6.08.   Collection Suit by Trustee.

         If an Event of Default specified in Section 6.01(a) or (b) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Company for

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the whole amount of principal of, premium and Liquidated Damages, if any, and
interest remaining unpaid on the Notes and interest on overdue principal and, to
the extent lawful, interest and such further amount as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.

Section 6.09.   Trustee May File Proofs of Claim.

         The Trustee is authorized to file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.

Section 6.10.   Priorities.

         If the Trustee collects any money pursuant to this Article 6, it shall
pay out the money in the following order:

                First:  to the Trustee, its agents and attorneys for amounts due
         under Section 7.07 hereof, including payment of all compensation,
         expense and liabilities incurred, and all advances made, by the Trustee
         and the costs and expenses of collection;

                Second: to Holders of Notes for amounts due and unpaid on the
         Notes for principal, premium and Liquidated Damages, if any, and
         interest, ratably, without preference or priority of any kind,
         according to the amounts due and payable on the Notes for principal,
         premium and Liquidated Damages, if any and interest, respectively; and

                Third:  to the Company or to such party as a court of competent
         jurisdiction shall direct.

         The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.

Section 6.11.   Undertaking for Costs.

         In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the

                                       69



filing by any party litigant in the suit of an undertaking to pay the costs of
the suit, and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a
Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more
than 10% in principal amount of the then outstanding Notes.

                                    ARTICLE 7.
                                     TRUSTEE

Section 7.01.   Duties of Trustee.

         (a)    If an Event of Default has occurred and is continuing, the
Trustee will exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.

         (b)    Except during the continuance of an Event of Default:

                (i)    the duties of the Trustee will be determined solely by
         the express provisions of this Indenture and the Trustee need perform
         only those duties that are specifically set forth in this Indenture and
         no others, and no implied covenants or obligations shall be read into
         this Indenture against the Trustee; and

                (ii)   in the absence of bad faith on its part, the Trustee may
         conclusively rely, as to the truth of the statements and the
         correctness of the opinions expressed therein, upon certificates or
         opinions furnished to the Trustee and conforming to the requirements of
         this Indenture. However, the Trustee will examine the certificates and
         opinions to determine whether or not they conform to the requirements
         of this Indenture.

         (c)    The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:

                (i)    this paragraph does not limit the effect of paragraph (b)
         of this Section;

                (ii)   the Trustee will not be liable for any error of judgment
         made in good faith by a Trust Officer, unless it is proved that the
         Trustee was negligent in ascertaining the pertinent facts; and

                (iii)  the Trustee will not be liable with respect to any action
         it takes or omits to take in good faith in accordance with a direction
         received by it pursuant to Section 6.05 hereof.

         (d)    Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), and (c) of this Section.

         (e)    No provision of this Indenture will require the Trustee to
expend or risk its own funds or incur any liability. The Trustee will be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders, unless such Holder has offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.

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         (f)    The Trustee will not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.

Section 7.02.   Rights of Trustee.

         (a)    The Trustee may conclusively rely upon any document believed by
it to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.

         (b)    Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both. The Trustee will not
be liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel will be
full and complete authorization and protection from liability in respect of any
action taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.

         (c)    The Trustee may act through its attorneys and agents and will
not be responsible for the misconduct or negligence of any agent appointed with
due care.

         (d)    The Trustee will not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.

         (e)    Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company will be sufficient if
signed by an Officer of the Company.

         (f)    The Trustee will be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.

Section 7.03.   Individual Rights of Trustee.

         The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the SEC for
permission to continue as trustee or resign. Any Agent may do the same with like
rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.

Section 7.04.   Trustee's Disclaimer.

         The Trustee will not be responsible for and makes no representation as
to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it will not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it will not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.

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Section 7.05.   Notice of Defaults.

         If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee will mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, premium, or
Liquidated Damages, if any, or interest on any Note, the Trustee may withhold
the notice if and so long as a committee of its Trust Officers in good faith
determines that withholding the notice is in the interests of the Holders of the
Notes.

         The Trustee shall not be required to take notice or be deemed to have
notice of any Default hereunder, except for Defaults arising from failure to
make any required payments to the Trustee or Defaults of which the Trustee has
actual knowledge, unless the Trustee is specifically notified in writing of such
Default by the Company or the Holders of twenty-five percent (25%) in aggregate
principal amount of the Notes then outstanding, and all such notices or other
instruments required to be delivered to the Trustee must be delivered to the
Corporate Trust Office of the Trustee.

Section 7.06.   Reports by Trustee to Holders of the Notes.

         (a)    Within 60 days after each June 15 beginning with the June 15
following the date of this Indenture, and for so long as Notes remain
outstanding, the Trustee will mail to the Holders of the Notes a brief report
dated as of such reporting date that complies with TIA (S) 313(a) (but if no
event described in TIA (S) 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
will comply with TIA (S) 313(b)(2). The Trustee will also transmit by mail all
reports as required by TIA (S) 313(c).

         (b)    A copy of each report at the time of its mailing to the Holders
of Notes will be mailed by the Trustee to the Company and filed by the Trustee
with the SEC and each stock exchange on which the Notes are listed in accordance
with TIA (S) 313(d). The Company will promptly notify the Trustee when the Notes
are listed on any stock exchange.

Section 7.07.   Compensation and Indemnity.

         (a)    The Company will pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation will not be limited by any law on compensation of a
trustee of an express trust. The Company will reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses will
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.

         (b)    The Company will indemnify the Trustee against any and all
losses, liabilities or expenses incurred by it arising out of or in connection
with the acceptance or administration of its duties under this Indenture,
including the costs and expenses of enforcing this Indenture against the Company
and the Guarantors (including this Section 7.07) and defending itself against
any claim (whether asserted by the Company, the Guarantors or any Holder or any
other Person) or liability in connection with the exercise or performance of any
of its powers or duties hereunder, except to the extent any such loss, liability
or expense may be attributable to its negligence or bad faith. The Trustee will
notify the Company promptly of any claim for which it may seek indemnity. Such
notice shall include a copy of any complaint that may have been filed with
respect to that claim or any demand letter or other notification the Trustee has
received which the Trustee believes will give rise to a claim for which it may
seek indemnification. Failure by the Trustee to so notify the Company will not
relieve the Company or any of the Guarantors of their obligations hereunder,
except to the extent that such failure prejudices the

                                       72



availability of defenses or counterclaims or otherwise adversely impacts the
ability of the Company or any Guarantor to conduct the defense of such action.
The Company or such Guarantor will defend the claim and shall have the right to
make all decisions with respect to conduct of any litigation or other
proceedings with respect to that claim, including but not limited to determining
the defenses or counterclaims to pursue and the right to settle any such claim.
The Trustee shall cooperate with the Company or any Guarantor in the Company's
or such Guarantor's conduct of such defense. The Trustee may retain separate
counsel to represent it in connection with that defense at the Trustee's own
expense; provided that, if the Trustee can demonstrate that a conflict of
interest exists between the Company or the applicable Guarantor and the Trustee
which makes it impossible for the Company or such Guarantor to defend the
Trustee in such matter or the Company refuses to conduct a defense, the Company
shall pay the Trustee's reasonable legal expenses in conducting that defense.
Neither the Company nor any Guarantor need pay for any settlement made without
the Company's consent, which consent will not be unreasonably withheld.

         (c)    The obligations of the Company and the Guarantors under this
Section 7.07 will survive the satisfaction and discharge of this Indenture.

         (d)    To secure the Company's payment obligations in this Section
7.07, the Trustee will have a Lien prior to the Notes on all money or property
held or collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien will survive the satisfaction and
discharge of this Indenture.

         (e)    When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(j) or (k) hereof occurs, the expenses
and the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration under
any Bankruptcy Law.

         (f)    The Trustee will comply with the provisions of TIA (S) 313(b)(2)
to the extent applicable.

Section 7.08.   Replacement of Trustee.

         A resignation or removal of the Trustee and appointment of a successor
Trustee will become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.08.

         The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of a majority
in principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Company in writing. The Company may remove the
Trustee if:

         (a)    the Trustee fails to comply with Section 7.10 hereof;

         (b)    the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy Law;

         (c)    a custodian or public officer takes charge of the Trustee or its
property; or

         (d)    the Trustee becomes incapable of acting.

         If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company will promptly appoint a successor
Trustee. Within one year after the successor Trustee

                                       73



takes office, the Holders of a majority in principal amount of the then
outstanding Notes may appoint a successor Trustee to replace the successor
Trustee appointed by the Company.

         If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of at least 10% in principal amount of the then outstanding Notes
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.

         If the Trustee, after written request by any Holder who has been a
Holder for at least six months, fails to comply with Section 7.10, such Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.

         A successor Trustee will deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee will become effective, and the
successor Trustee will have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee will mail a notice of its succession
to Holders. The retiring Trustee will promptly transfer all property held by it
as Trustee to the successor Trustee; provided all sums owing to the Trustee
hereunder have been paid and subject to the Lien provided for in Section 7.07
hereof. Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 hereof will continue for the
benefit of the retiring Trustee.

Section 7.09.   Successor Trustee by Merger, etc.

         If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act will be the successor Trustee.

Section 7.10.   Eligibility; Disqualification.

         There will at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $100 million
as set forth in its most recent published annual report of condition.

         This Indenture will always have a Trustee who satisfies the
requirements of TIA (S) 310(a)(1), (2) and (5). The Trustee is subject to TIA
(S) 310(b).

Section 7.11.   Preferential Collection of Claims Against Company.

         The Trustee is subject to TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated therein.

                                       74



                                   ARTICLE 8.
                    LEGAL DEFEASANCE AND COVENANT DEFEASANCE

Section 8.01.   Option to Effect Legal Defeasance or Covenant Defeasance.

         The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.

Section 8.02.   Legal Defeasance and Discharge.

         Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company and each of the Guarantors will,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
be deemed to have been discharged from their obligations with respect to all
outstanding Notes (including the Subsidiary Guarantees) on the date the
conditions set forth below are satisfied (hereinafter, "Legal Defeasance"). For
this purpose, Legal Defeasance means that the Company and the Guarantors will be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes (including the Subsidiary Guarantees), which will thereafter
be deemed to be "outstanding" only for the purposes of Section 8.05 hereof and
the other Sections of this Indenture referred to in (a) and (b) below, and to
have satisfied all their other obligations under such Notes, the Subsidiary
Guarantees and this Indenture (and the Trustee, on demand of and at the expense
of the Company, shall execute proper instruments acknowledging the same), except
for the following provisions which will survive until otherwise terminated or
discharged hereunder:

         (a)    the rights of Holders of outstanding Notes to receive payments
in respect of the principal of, or interest or premium and Liquidated Damages,
if any, on such Notes when such payments are due from the trust referred to
below;

         (b)    the Company's obligations with respect to the Notes concerning
issuing temporary Notes, registration of Notes, mutilated, destroyed, lost or
stolen Notes and the maintenance of an office or agency for payment and money
for security payments held in trust;

         (c)    the rights, powers, trusts, duties and immunities of the
Trustee, and the Company's and the Guarantor's obligations in connection
therewith; and

         (d)    this Article 8.

Section 8.03.   Covenant Defeasance.

         Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company and the Guarantors will, subject to
the satisfaction of the conditions set forth in Section 8.04 hereof, be released
from their obligations under the covenants contained in Sections 4.03, 4.04,
4.05, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17, 4.18,
4.19 and 4.20 hereof and clause (iv) of Section 5.01 hereof with respect to the
outstanding Notes on and after the date the conditions set forth in Section 8.04
are satisfied (hereinafter, "Covenant Defeasance"), and the Notes will
thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but will continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Notes will not be deemed outstanding for accounting purposes). For this purpose,
Covenant Defeasance means that, with respect to the outstanding Notes and
Subsidiary Guarantees, the Company and the Guarantors may omit to comply with
and will have no liability in respect of any term, condition or

                                       75



limitation set forth in any such covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such covenant or by reason of
any reference in any such covenant to any other provision herein or in any other
document and such omission to comply will not constitute a Default or an Event
of Default under Section 6.01 hereof, but, except as specified above, the
remainder of this Indenture and such Notes and Subsidiary Guarantees will be
unaffected thereby. In addition, upon the Company's exercise under Section 8.01
hereof of the option applicable to this Section 8.03, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, Sections
6.01(c) through 6.01(i) hereof will not constitute Events of Default.

Section 8.04.   Conditions to Legal or Covenant Defeasance.

         In order to exercise either Legal Defeasance or Covenant Defeasance:

         (a)    the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, cash in United States dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent public
accountants, to pay the principal of, interest, premium and Liquidated Damages,
if any, on the outstanding Notes on the stated maturity thereof or on the
applicable redemption date, as the case may be, and the Company must specify
whether the Notes are being defeased to maturity or to a particular redemption
date;

         (b)    in the case of an election under Section 8.02 hereof, the
Company has delivered to the Trustee an Opinion of Counsel confirming that (A)
the Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (B) since the date hereof, there has been a change
in the applicable federal income tax law, in either case to the effect that, and
based thereon such Opinion of Counsel shall confirm that, the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Legal 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 Legal Defeasance had not occurred;

         (c)    in the case of an election under Section 8.03 hereof, the
Company must deliver to the Trustee an Opinion of Counsel confirming that the
Holders of the outstanding 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;

         (d)    no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of Default
resulting from the borrowing of funds to be applied to such deposit);

         (e)    such Legal Defeasance or Covenant Defeasance will not result in
a breach or violation of, or constitute a default under, any material agreement
or instrument (other than this Indenture) to which the Company or any of its
Restricted Subsidiaries is a party or by which the Company or any of its
Restricted Subsidiaries is bound;

         (f)    the Company must deliver to the Trustee an Officers' Certificate
stating that the deposit was not made by the Company with the intent of
preferring the Holders over the other creditors of the Company or with the
intent of defeating, hindering, delaying or defrauding creditors of the Company
or others; and

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         (g)    the Company must deliver to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent relating
to the Legal Defeasance or the Covenant Defeasance have been complied with.

Section 8.05.   Deposited Money and Government Securities to be Held in Trust;
                Other Miscellaneous Provisions.

         Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
will be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, and interest, but
such money need not be segregated from other funds except to the extent required
by law.

         The Company will pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.

         Anything in this Article Eight to the contrary notwithstanding, the
Trustee will deliver or pay to the Company from time to time upon the request of
the Company any money or non-callable Government Securities held by it as
provided in Section 8.04 hereof which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee (which may be the opinion delivered under
Section 8.04(a) hereof), are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.

Section 8.06.   Repayment to Company.

         Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium, or
Liquidated Damages, if any, or interest on any Note and remaining unclaimed for
two years after such principal, and premium, or Liquidated Damages, if any, or
interest has become due and payable shall be paid to the Company on its request
or (if then held by the Company) will be discharged from such trust; and the
Holder of such Note will thereafter look only to the Company for payment
thereof, and all liability of the Trustee or such Paying Agent with respect to
such trust money, and all liability of the Company as trustee thereof, will
thereupon cease.

Section 8.07.   Reinstatement.

         If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's and the Guarantors' obligations under this
Indenture and the Notes and the Subsidiary Guarantees will be revived and
reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03
hereof until such time as the Trustee or Paying Agent is permitted to apply all
such money in accordance with Section 8.02 or 8.03 hereof, as the case may be;
provided, however, that, if the Company makes any payment of principal of,
premium, or Liquidated Damages, if any, or interest on any Note following the
reinstatement of its obligations, the Company will

                                       77



be subrogated to the rights of the Holders of such Notes to receive such payment
from the money held by the Trustee or Paying Agent.

                                   ARTICLE 9.
                        AMENDMENT, SUPPLEMENT AND WAIVER

Section 9.01.   Without Consent of Holders of Notes.

         Notwithstanding Section 9.02 of this Indenture, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture or the Notes
(including, without limitation, the Subsidiary Guarantees) without the consent
of any Holder of a Note:

         (a)    to cure any ambiguity, defect or inconsistency;

         (b)    to provide for uncertificated Notes in addition to or in place
of certificated Notes;

         (c)    to provide for the assumption of the Company's obligations to
the Holders of the Notes by a successor to the Company pursuant to Article 5
hereof;

         (d)    to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the legal
rights hereunder of any such Holder;

         (e)    to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;

         (f)    to provide for the issuance of Additional Notes in accordance
with the limitations set forth in this Indenture as of the date hereof; or

         (g)    to allow any Guarantor to execute a supplemental indenture and/
or a Subsidiary Guarantee with respect to the Notes.

         However, no amendment may be made to the provisions of Article 10 of
this Indenture that adversely affects the rights of any holder of Senior Debt
then outstanding unless the holders of such Senior Debt (or any group or
representative thereof authorized to give a consent) consent to such change.

         Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee will join with the Company and the Guarantors in the
execution of any amended or supplemental Indenture authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee will not be
obligated to enter into such amended or supplemental Indenture that affects its
own rights, duties or immunities under this Indenture or otherwise.

Section 9.02.   With Consent of Holders of Notes.

         Except as provided below in this Section 9.02, the Company and the
Trustee may amend or supplement this Indenture (including, without limitation,
Section 3.09, 4.10 and 4.15 hereof) and the Notes (including the Subsidiary
Guarantees) with the consent of the Holders of at least a majority in principal
amount of the Notes then outstanding voting as a single class (including,
without limitation, consents obtained in connection with a tender offer or
exchange offer for, or purchase of, the Notes), and, subject to Sections 6.04
and 6.07 hereof, any existing Default or Event of Default (other than a Default
or

                                       78



Event of Default in the payment of the principal of, premium, or Liquidated
Damages, if any, or interest on the Notes, except a payment default resulting
from an acceleration that has been rescinded) or compliance with any provision
of this Indenture, the Subsidiary Guarantees or the Notes may be waived with the
consent of the Holders of a majority in principal amount of the then outstanding
Notes voting as a single class (including consents obtained in connection with a
tender offer or exchange offer for, or purchase of, the Notes). Without the
consent of at least 75% in principal amount of the Notes then outstanding
(including consents obtained in connection with a tender offer or exchange offer
for, or purchase of, such Notes), no waiver or amendment to this Indenture may
make any change relating to (1) the provisions of Article 10 hereof that
adversely affect the rights of any Holder of Notes or (2) release of any
Guarantor from any of its obligations under its Subsidiary Guarantee or this
Indenture, except in accordance with the terms of this Indenture. Section 2.08
hereof shall determine which Notes are considered to be "outstanding" for
purposes of this Section 9.02.

         Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.02 hereof, the Trustee will
join with the Company in the execution of such amended or supplemental Indenture
unless such amended or supplemental Indenture directly affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise, in which case
the Trustee may in its discretion, but will not be obligated to, enter into such
amended or supplemental Indenture.

         It is not necessary for the consent of the Holders of Notes under this
Section 9.02 to approve the particular form of any proposed amendment or waiver,
but it is sufficient if such consent approves the substance thereof.

         After an amendment, supplement or waiver under this Section becomes
effective, the Company will mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, will not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a
majority in aggregate principal amount of the Notes then outstanding voting as a
single class may waive compliance in a particular instance by the Company with
any provision of this Indenture or the Notes. However, without the consent of
each Holder affected, an amendment or waiver under this Section 9.02 may not
(with respect to any Notes held by a non-consenting Holder):

         (a)    reduce the principal amount of Notes whose Holders must consent
to an amendment, supplement or waiver;

         (b)    reduce the principal of or change the fixed maturity of any Note
or alter or waive any of the provisions with respect to the redemption of the
Notes except as provided above with respect to Sections 3.09, 4.10 and 4.15
hereof;

         (c)    reduce the rate of or change the time for payment of interest,
including default interest, on any Note;

         (d)    waive a Default or Event of Default in the payment of principal
of, or interest or premium, or Liquidated Damages, if any, on the Notes (except
a rescission of acceleration of the Notes by the Holders of at least a majority
in aggregate principal amount of the then outstanding Notes and a waiver of the
payment default that resulted from such acceleration);

                                       79



         (e)    make any Note payable in money other than that stated in the
Notes;

         (f)    make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive payments
of, principal of or interest or premium or Liquidated Damages, if any, on the
Notes;

         (g)    waive a redemption payment with respect to any Note except as
provided above with respect to Sections 3.09, 4.10 and 4.15 hereof; or

         (h)    make any change in Section 6.04 or 6.07 hereof or in the
foregoing amendment and waiver provisions.

Section 9.03.   Compliance with Trust Indenture Act.

         Every amendment or supplement to this Indenture or the Notes will be
set forth in a amended or supplemental Indenture that complies with the TIA as
then in effect.

Section 9.04.   Revocation and Effect of Consents.

         Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.

Section 9.05.   Notation on or Exchange of Notes.

         The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.

         Failure to make the appropriate notation or issue a new Note will not
affect the validity and effect of such amendment, supplement or waiver.

Section 9.06.   Trustee to Sign Amendments, etc.

         The Trustee will sign any amended or supplemental indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Company
may not sign an amendment or supplemental indenture until the Board of Directors
approves it. In executing any amended or supplemental indenture, the Trustee
will be entitled to receive and (subject to Section 7.01 hereof) will be fully
protected in relying upon, in addition to the documents required by Section
13.04 hereof, an Officers' Certificate and an Opinion of Counsel stating that
the execution of such amended or supplemental indenture is authorized or
permitted by this Indenture.

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                                  ARTICLE 10.
                                 SUBORDINATION

Section 10.01. Agreement to Subordinate.

         The Company agrees, and each Holder by accepting a Note agrees, that
the Indebtedness evidenced by the Notes and any Liquidated Damages is
subordinated in right of payment, to the extent and in the manner provided in
this Article 10, to the prior payment in full of all Senior Debt (whether
outstanding on the date hereof or hereafter created, incurred, assumed or
guaranteed), and that the subordination is for the benefit of the holders of
Senior Debt.

Section 10.02. Liquidation; Dissolution; Bankruptcy.

         Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property, in
an assignment for the benefit of creditors or in any marshaling of the Company's
assets and liabilities:

               (i)    holders of Senior Debt will be entitled to receive payment
         in full of all Obligations due in respect of such Senior Debt
         (including interest after the commencement of any bankruptcy proceeding
         at the rate specified in the applicable Senior Debt) before Holders of
         the Notes will be entitled to receive any payment with respect to the
         Notes, on account of any purchase or redemption or other acquisition on
         any Note in connection with an Asset Sale Offer or a Change of Control
         Offer or on account of the payment of any Liquidated Damages (except
         that Holders may receive and retain (A) Permitted Junior Securities and
         (B) payments made from any defeasance trust created pursuant to Section
         8.01 hereof); and

               (ii)   until all Obligations with respect to Senior Debt (as
         provided in clause (i) above) are paid in full, any distribution or
         payment of Liquidated Damages to which Holders would be entitled but
         for this Article 10 will be made to holders of Senior Debt (except that
         Holders of Notes may receive and retain (A) Permitted Junior Securities
         and (B) payments made from any defeasance trust created pursuant to
         Section 8.01 hereof), as their interests may appear.

         To the extent any payment of Senior Debt (whether by or on behalf of
the Company, as proceeds of security or enforcement of any right of setoff or
otherwise) is declared to be fraudulent or preferential, set aside or required
to be paid to any receiver, trustee in bankruptcy, liquidating trustee, agent or
other similar Person under any bankruptcy, insolvency, receivership, fraudulent
conveyance or similar law, then, if such payment is recovered by, or paid over
to, such receiver, trustee in bankruptcy, liquidating trustee, agent or other
similar Person, the Senior Debt or part thereof originally intended to be
satisfied will be deemed to be reinstated and outstanding as if such payment had
not occurred.

Section 10.03. Default on Designated Senior Debt.

         (a)   Neither the Company nor any Guarantor may make any payment or
distribution to the Trustee or any Holder in respect of Obligations with respect
to the Notes including, without limitation, on account of any Liquidated Damages
and may not acquire from the Trustee or any Holder any Notes for cash or
property (other than (A) Permitted Junior Securities and (B) payments made from
any defeasance trust created pursuant to Section 8.01 hereof) until all
principal and other Obligations with respect to the Senior Debt have been paid
in full if:

                                       81



               (i)    a default in the payment of any principal or other
         Obligations with respect to Designated Senior Debt occurs and is
         continuing beyond any applicable grace period in the agreement,
         indenture or other document governing such Designated Senior Debt; or

               (ii)   any other default occurs and is continuing on any series
         of Designated Senior Debt that then permits holders of that series of
         Designated Senior Debt to accelerate its maturity and the Trustee
         receives a notice of the default (a "Payment Blockage Notice") from the
         Company or the holders of any Designated Senior Debt. If the Trustee
         receives any such Payment Blockage Notice, no subsequent Payment
         Blockage Notice will be effective for purposes of this Section unless
         and until at least 360 days have elapsed since the delivery of the
         immediately prior Payment Blockage Notice. No nonpayment default that
         existed or was continuing on the date of delivery of any Payment
         Blockage Notice to the Trustee will be, or be made, the basis for a
         subsequent Payment Blockage Notice unless such default has been cured
         or waived for a period of not less than 90 days.

         (b)   The Company may and will resume payments on and distributions in
respect of the Notes and may acquire them upon the earlier of:

               (i)    in the case of a payment default, upon the date on which
         such default is cured or waived, or

               (ii)   in the case of a nonpayment default, upon the earlier of:

                      (A)   the date on which such nonpayment default is cured
               or waived,

                      (B)   179 days after the date on which the applicable
               Payment Blockage Notice is received, or

                      (C)   the date on which the Trustee receives notice from
               or on  behalf  of  the  holders  of  Designated  Senior  Debt  to
               terminate the  applicable  Payment  Blockage  Notice,  unless the
               maturity of any Designated Senior Debt has been accelerated,

if this Article 10 otherwise permits the payment, distribution or acquisition at
the time of such payment or acquisition.

Section 10.04. Acceleration of Notes.

         If payment of the Notes is accelerated because of an Event of Default,
the Company will promptly notify holders of Senior Debt of the acceleration.

Section 10.05. When Distribution Must Be Paid Over.

         In the event that the Trustee or any Holder receives any payment of any
Obligations with respect to the Notes or on account of any Liquidated Damages
(except (A) in Permitted Junior Securities or (B) from payments and other
distributions made from any defeasance trust created pursuant to Section 8.01
hereof so long as, on the date or dates the respective amounts were paid into
trust, such payments were made without violating any of the provisions of this
Article 10) at a time such payment is prohibited by Section 10.03 hereof, such
payment will be held by the Trustee or such Holder, in trust for the benefit of,
and will be paid forthwith over and delivered, upon written request, to, the
holders of Senior Debt as their interests may appear or their Representative
under the agreement, indenture or other document (if any) pursuant to which
Senior Debt may have been issued, as their respective interests may appear, for

                                       82



application to the payment of all Obligations with respect to Senior Debt
remaining unpaid to the extent necessary to pay such Obligations in full in
accordance with their terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Debt.

         With respect to the holders of Senior Debt, the Trustee undertakes to
perform only such obligations on the part of the Trustee as are specifically set
forth in this Article 10, and no implied covenants or obligations with respect
to the holders of Senior Debt will be read into this Indenture against the
Trustee. The Trustee will not be deemed to owe any fiduciary duty to the holders
of Senior Debt, and will not be liable to any such holders if the Trustee in
good faith shall pay over or distribute to or on behalf of Holders or the
Company money or assets to which any holders of Senior Debt are then entitled by
virtue of this Article 10, except if such payment is made as a result of the
willful misconduct or gross negligence of the Trustee.

Section 10.06. Notice by Company.

         The Company will promptly notify the Trustee and the Paying Agent of
any facts known to the Company that would cause a payment of any Obligations
with respect to the Notes to violate this Article 10, but failure to give such
notice will not affect the subordination of the Notes to the Senior Debt as
provided in this Article 10.

Section 10.07. Subrogation.

         After all Senior Debt is paid in full and until the Notes are paid in
full, Holders of Notes will be subrogated (equally and ratably with all other
Indebtedness pari passu with the Notes) to the rights of holders of Senior Debt
to receive distributions applicable to Senior Debt to the extent that
distributions otherwise payable to the Holders of Notes have been applied to the
payment of Senior Debt. A distribution made under this Article 10 to holders of
Senior Debt that otherwise would have been made to Holders of Notes is not, as
between the Company and Holders, a payment by the Company on the Notes.

Section 10.08. Relative Rights.

         This Article 10 defines the relative rights of Holders of Notes and
holders of Senior Debt. Nothing in this Indenture will:

               (i)   impair, as between the Company and Holders of Notes, the
         obligation of the Company, which is absolute and unconditional, to pay
         principal of and interest on the Notes in accordance with their terms;

               (ii)  affect the relative rights of Holders of Notes and
         creditors of the Company other than their rights in relation to holders
         of Senior Debt; or

               (iii) prevent the Trustee or any Holder of Notes from
         exercising its available remedies upon a Default or Event of Default,
         subject to the rights of holders and owners of Senior Debt to receive
         distributions and payments otherwise payable to Holders of Notes.

         If the Company fails because of this Article 10 to pay principal of or
interest on a Note on the due date, the failure is still a Default or Event of
Default.

                                       83



Section 10.09. Subordination May Not Be Impaired by Company.

         No right of any holder of Senior Debt to enforce the subordination of
the Indebtedness evidenced by the Notes will be impaired by any act or failure
to act by the Company or any Holder or by the failure of the Company or any
Holder to comply with this Indenture.

         Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Debt may, at any time from time to time, without the
consent of or notice to the Trustee, without incurring responsibility to the
Trustee or the Holders of the Notes and without impairing or releasing the
provisions of this Article 10 or the obligations under this Indenture of the
Holders of the Notes to the holders of the Senior Debt, do any one or more of
the following: (i) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, the Senior Debt, or otherwise amend or
supplement in any manner, Senior Debt, or any instrument evidencing the same or
any agreement under which Senior Debt is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing Senior Debt; (iii) release any Person liable in any manner for the
payment or collection of Senior Debt; and (iv) exercise or refrain from
exercising any rights against the Company and any other Person.

Section 10.10. Distribution or Notice to Representative.

         Whenever a distribution is to be made or a notice given to holders of
Senior Debt, the distribution may be made and the notice given to their
Representative.

         Upon any payment or distribution of assets of the Company referred to
in this Article 10, the Trustee and the Holders of Notes will be entitled to
rely upon any order or decree made by any court of competent jurisdiction or
upon any certificate of such Representative or of the liquidating trustee or
agent or other Person making any distribution to the Trustee or to the Holders
of Notes for the purpose of ascertaining the Persons entitled to participate in
such distribution, the holders of the Senior Debt and other Indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article 10.

Section 10.11. Rights of Trustee and Paying Agent.

         Notwithstanding the provisions of this Article 10 or any other
provision of this Indenture, the Trustee will not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee has received at its Corporate
Trust Office at least five Business Days prior to the date of such payment
written notice of facts that would cause the payment of any Obligations with
respect to the Notes to violate this Article 10. Only the Company or a
Representative may give the notice. Nothing in this Article 10 will impair the
claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof.

         The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights it would have if it were not Trustee. Any Agent may do
the same with like rights.

Section 10.12. Authorization to Effect Subordination.

         Each Holder of Notes, by the Holder's acceptance thereof, authorizes
and directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 10, and appoints the Trustee to act as such Holder's attorney-in-fact
for any and all such purposes. If the Trustee does not file a proper proof of
claim or proof of debt in

                                       84



the form required in any proceeding referred to in Section 6.09 hereof at least
30 days before the expiration of the time to file such claim, the
Representatives are hereby authorized to file an appropriate claim for and on
behalf of the Holders of the Notes.

Section 10.13. Amendments.

         The provisions of this Article 10 will not be amended or modified
without the written consent of the holders of all Senior Debt.

                                  ARTICLE 11.
                              SUBSIDIARY GUARANTEES

Section 11.01. Guarantee.

         Subject to this Article 11, each of the Guarantors hereby, jointly and
severally, unconditionally guarantees to each Holder of a Note authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of this Indenture, the Notes or
the obligations of the Company hereunder or thereunder, that: (a) the principal
of, premium and Liquidated Damages, if any, and interest on the Notes will be
promptly paid in full when due, whether at maturity, by acceleration, redemption
or otherwise, and interest on the overdue principal of and interest on the
Notes, if any, if lawful, and all other obligations of the Company to the
Holders or the Trustee hereunder or thereunder will be promptly paid in full or
performed, all in accordance with the terms hereof and thereof; and (b) in case
of any extension of time of payment or renewal of any Notes or any of such other
obligations, that same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at Stated
Maturity, by acceleration or otherwise. Failing payment when due of any amount
so guaranteed or any performance so guaranteed for whatever reason, the
Guarantors will be jointly and severally obligated to pay the same immediately.
Each Guarantor agrees that this is a Guarantee of payment and not a Guarantee of
collection.

         The Guarantors hereby agree that their obligations hereunder are
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor. Each Guarantor hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenant that this Subsidiary Guarantee will not be discharged except by
complete performance of the obligations contained in the Notes and this
Indenture.

         If any Holder or the Trustee is required by any court or otherwise to
return to the Company, the Guarantors or any custodian, trustee, liquidator or
other similar official acting in relation to either the Company or the
Guarantors, any amount paid by either to the Trustee or such Holder, this
Subsidiary Guarantee, to the extent theretofore discharged, will be reinstated
in full force and effect.

         Each Guarantor agrees that it will not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each
Guarantor further agrees that, as between the Guarantors, on the one hand, and
the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 hereof
for the purposes of this Subsidiary Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
obligations

                                       85



guaranteed hereby, and (y) in the event of any declaration of acceleration of
such obligations as provided in Article 6 hereof, such obligations (whether or
not due and payable) will forthwith become due and payable by the Guarantors for
the purpose of this Subsidiary Guarantee. The Guarantors will have the right to
seek contribution from any non-paying Guarantor so long as the exercise of such
right does not impair the rights of the Holders under the Guarantee.

Section 11.02. Subordination of Subsidiary Guarantee.

         Notwithstanding any provision in this Article 11 to the contrary, the
Obligations of each Guarantor under its Subsidiary Guarantee pursuant to this
Article 11 will be junior and subordinated to the Senior Debt of such Guarantor
on the same basis as the Notes are junior and subordinated to Senior Debt of the
Company. For the purposes of the foregoing sentence, the Trustee and the Holders
will have the right to receive and/or retain payments by any of the Guarantors
only at such times as they may receive and/or retain payments in respect of the
Notes pursuant to this Indenture, including Article 10 hereof.

Section 11.03. Limitation on Guarantor Liability.

         Each Guarantor, and by its acceptance of Notes, each Holder, hereby
confirms that it is the intention of all such parties that the Subsidiary
Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance
for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar federal or state law to the
extent applicable to any Subsidiary Guarantee. To effectuate the foregoing
intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree
that the obligations of such Guarantor will, after giving effect to such maximum
amount and all other contingent and fixed liabilities of such Guarantor that are
relevant under such laws, and after giving effect to any collections from,
rights to receive contribution from or payments made by or on behalf of any
other Guarantor in respect of the obligations of such other Guarantor under this
Article 11, result in the obligations of such Guarantor under its Subsidiary
Guarantee not constituting a fraudulent transfer or conveyance.

Section 11.04. Execution and Delivery of Subsidiary Guarantee.

         To evidence its Subsidiary Guarantee set forth in Section 11.01, each
Guarantor hereby agrees that a notation of such Subsidiary Guarantee
substantially in the form included in Exhibit E will be endorsed by an Officer
of such Guarantor on each Note authenticated and delivered by the Trustee and
that this Indenture will be executed on behalf of such Guarantor by one of its
Officers.

         Each Guarantor hereby agrees that its Subsidiary Guarantee set forth in
Section 11.01 will remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Subsidiary Guarantee.

         If an Officer whose signature is on this Indenture or on the Subsidiary
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Subsidiary Guarantee is endorsed, the Subsidiary Guarantee will
be valid nevertheless.

         The delivery of any Note by the Trustee, after the authentication
thereof hereunder, will constitute due delivery of the Subsidiary Guarantee set
forth in this Indenture on behalf of the Guarantors.

         In the event that the Company creates or acquires any new Domestic
Subsidiary after the date of this Indenture, if required by Section 4.17 hereof,
the Company will cause such Domestic Subsidiary to comply with the provisions of
Section 4.17 hereof and this Article 11, to the extent applicable.

                                       86



Section 11.05. Guarantors May Consolidate, etc., on Certain Terms.

         Except as otherwise provided in Section 11.06, no Guarantor may sell or
otherwise dispose of all or substantially all of its assets to, or consolidate
with or merge with or into (whether or not such Guarantor is the surviving
Person), another Person, other than the Company or another Guarantor, unless:

         (a)   immediately after giving effect to such transaction, no Default
or Event of Default exists; and

         (b)   either:

               (i)   subject to Section 11.06 hereof, the Person acquiring the
         property in any such sale or disposition or the Person formed by or
         surviving any such consolidation or merger assumes all the obligations
         of that Guarantor under this Indenture, its Subsidiary Guarantee and
         the Registration Rights Agreement pursuant to a supplemental indenture
         satisfactory to the Trustee; or

               (ii)  the Net Proceeds of such sale or other disposition are
         applied in accordance with the applicable provisions of this Indenture.

         In case of any such consolidation, merger, sale or conveyance and upon
the assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the
Subsidiary Guarantee endorsed upon the Notes and the due and punctual
performance of all of the covenants and conditions of this Indenture to be
performed by the Guarantor, such successor Person will succeed to and be
substituted for the Guarantor with the same effect as if it had been named
herein as a Guarantor. Such successor Person thereupon may cause to be signed
any or all of the Subsidiary Guarantees to be endorsed upon all of the Notes
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee. All the Subsidiary Guarantees so issued will in
all respects have the same legal rank and benefit under this Indenture as the
Subsidiary Guarantees theretofore and thereafter issued in accordance with the
terms of this Indenture as though all of such Subsidiary Guarantees had been
issued at the date of the execution hereof.

         Except as set forth in Articles 4 and 5 hereof, and notwithstanding
clauses (a) and (b) above, nothing contained in this Indenture or in any of the
Notes will prevent any consolidation or merger of a Guarantor with or into the
Company or another Guarantor, or will prevent any sale or conveyance of the
property of a Guarantor as an entirety or substantially as an entirety to the
Company or another Guarantor.

Section 11.06. Releases Following Sale of Assets.

         In the event (a) of a sale or other disposition of all or substantially
all of the assets of any Guarantor (including by way of merger or consolidation)
or a sale or other disposition of all of the Capital Stock of any Guarantor, in
each case to a Person that is not (either before or after giving effect to such
transaction) a Subsidiary of the Company, provided that the Net Proceeds of such
sale or other disposition are applied in accordance with the applicable
provisions of this Indenture, including without limitation Section 4.10 hereof,
or (b) the Company designates any Restricted Subsidiary that is a Guarantor as
an Unrestricted Subsidiary in accordance with the applicable provisions of this
Indenture, including without limitation, Section 4.20 hereof, then such
Guarantor will be released and relieved of any obligations under its Subsidiary
Guarantee. Upon delivery by the Company to the Trustee of an Officers'
Certificate and an Opinion of Counsel to the effect that such sale or other
disposition was made by the Company in accordance with the provisions of this
Indenture, including without limitation Section 4.10 hereof, the

                                       87



         Trustee will execute any documents reasonably required in order to
evidence the release of any Guarantor from its obligations under its Subsidiary
Guarantee.

         Any Guarantor not released from its obligations under its Subsidiary
Guarantee will remain liable for the full amount of principal of and interest on
the Notes and for the other obligations of any Guarantor under this Indenture as
provided in this Article 11.

                                  ARTICLE 12.
                           satisfaction and discharge

Section 12.01. Satisfaction and Discharge.

         This Indenture will be discharged and will cease to be of further
effect as to all Notes issued hereunder, when:

         (a)   either:

               (i)   all Notes that have been authenticated (except lost, stolen
         or destroyed Notes that have been replaced or paid and Notes for whose
         payment money has theretofore been deposited in trust and thereafter
         repaid to the Company) have been delivered to the Trustee for
         cancellation; or

               (ii)  all Notes that have not been delivered to the Trustee for
         cancellation have become due and payable by reason of the mailing of a
         notice of redemption or otherwise or will become due and payable within
         one year and the Company or any Guarantor has irrevocably deposited or
         caused to be deposited with the Trustee as trust funds in trust solely
         for the benefit of the Holders, cash in U.S. dollars, non-callable
         Government Securities, or a combination thereof, in such amounts as
         will be sufficient without consideration of any reinvestment of
         interest, to pay and discharge the entire indebtedness on the Notes not
         delivered to the Trustee for cancellation for principal, premium and
         Liquidated Damages, if any, and accrued interest to the date of
         maturity or redemption;

         (b)   no Default or Event of Default has occurred and is continuing on
the date of such deposit or will occur as a result of such deposit and such
deposit will not result in a breach or violation of, or constitute a default
under, any other instrument to which the Company or any Guarantor is a party or
by which the Company or any Guarantor is bound;

         (c)   the Company or any Guarantor has paid or caused to be paid all
sums payable by it under this Indenture; and

         (d)   the Company has delivered irrevocable instructions to the Trustee
under this Indenture to apply the deposited money toward the payment of the
Notes at maturity or the redemption date, as the case may be.

In addition, the Company must deliver an Officers' Certificate and an Opinion of
Counsel to the Trustee stating that all conditions precedent to satisfaction and
discharge have been satisfied.

         Notwithstanding the satisfaction and discharge of this Indenture, if
money has been deposited with the Trustee pursuant to subclause (ii) of clause
(a) of this Section, the provisions of Section 12.02 and Section 8.06 will
survive.

                                       88



Section 12.02. Application of Trust Money.

         Subject to the provisions of Section 8.06, all money deposited with the
Trustee pursuant to Section 12.01 shall be held in trust and applied by it, in
accordance with the provisions of the Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Persons entitled thereto,
of the principal (and premium, if any) and interest for whose payment such money
has been deposited with the Trustee; but such money need not be segregated from
other funds except to the extent required by law.

         If the Trustee or Paying Agent is unable to apply any money or
Government Securities in accordance with Section 12.01 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's and any Guarantor's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 12.01; provided that if the Company has made any payment of principal
of, premium, if any, or interest on any Notes because of the reinstatement of
its obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money or Government Securities held
by the Trustee or Paying Agent.

                                  ARTICLE 13.
                                 MISCELLANEOUS

Section 13.01. Trust Indenture Act Controls.

         If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA (S)318(c), the imposed duties will control.

Section 13.02. Notices.

         Any notice or communication by the Company, any Guarantor or the
Trustee to the others is duly given if in writing and delivered in Person or
mailed by first class mail (registered or certified, return receipt requested),
telex, telecopier or overnight air courier guaranteeing next day delivery, to
the others' address:

         If to the Company and/or any Guarantor:

         LBI Media, Inc.
         1845 West Empire Avenue
         Burbank, CA 91504
         Telecopier No.: (818) 729-5678
         Attention: Lenard D. Liberman

         With a copy to:

         O'Melveny & Myers LLP
         400 South Hope Street
         Los Angeles, CA 90071
         Telecopier No.:  (213) 430-6000
         Attention:  Joseph K. Kim

                                       89



         If to the Trustee:

         U.S. Bank, N.A.
         1420 Fifth Avenue, 7/th/ Floor
         Seattle, WA  98101
         Telecopier No.:  (206) 344-4630
         Attention:  Corporate Trust Services

         The Company, any Guarantor or the Trustee, by notice to the others may
designate additional or different addresses for subsequent notices or
communications.

         All notices and communications (other than those sent to Holders) will
be deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery.

         Any notice or communication to a Holder will be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication will also be so mailed to any
Person described in TIA (S) 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Holder or any defect in it will not
affect its sufficiency with respect to other Holders.

         If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.

         If the Company mails a notice or communication to Holders, it will mail
a copy to the Trustee and each Agent at the same time.

Section 13.03. Communication by Holders of Notes with Other Holders of Notes.

         Holders may communicate pursuant to TIA (S) 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA (S)
312(c).

Section 13.04. Certificate and Opinion as to Conditions Precedent.

         Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:

         (a)   an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which will include the statements set forth in
Section 13.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and

         (b)   an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been satisfied.

                                       90



Section 13.05. Statements Required in Certificate or Opinion.

         Each certificate or Opinion of Counsel with respect to compliance with
a condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA (S) 314(a)(4)) will comply with the provisions of TIA
(S) 314(e) and will include:

         (a)   a statement that the Person making such certificate or rendering
such opinion has read such covenant or condition;

         (b)   a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;

         (c)   a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has been
satisfied; and

         (d)   a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.

Section 13.06. Rules by Trustee and Agents.

         The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.

Section 13.07. No Personal Liability of Directors, Officers, Employees and
               Stockholders.

         No director, officer, employee, incorporator or stockholder of the
Company or any Guarantor, as such, will have any liability for any obligations
of the Company or the Guarantors under the Notes, the Subsidiary Guarantees,
this Indenture, the Registration Rights Agreement or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for issuance of the Notes. The waiver may not be
effective to waive liabilities under the federal securities laws.

Section 13.08. Governing Law.

         THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES WITHOUT GIVING
EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

Section 13.09. No Adverse Interpretation of Other Agreements.

         This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.

                                       91



Section 13.10. Successors.

         All agreements of the Company in this Indenture and the Notes will bind
its successors. All agreements of the Trustee in this Indenture will bind its
successors. All agreements of each Guarantor in this Indenture will bind its
successors, except as otherwise provided in Section 11.06.

Section 13.11. Severability.

         In case any provision in this Indenture or in the Notes is be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions will not in any way be affected or impaired thereby.

Section 13.12. Counterpart Originals.

         The parties may sign any number of copies of this Indenture. Each
signed copy will be an original, but all of them together represent the same
agreement.

Section 13.13. Table of Contents, Headings, etc.

         The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and will in no
way modify or restrict any of the terms or provisions hereof.

                         [Signatures on following page]

                                       92



                                   SIGNATURES

Dated as of July 9, 2002


                                        LBI MEDIA, INC.

                                        By: /s/ Lenard D. Liberman
                                           ----------------------------------
                                           Name:  Lenard D. Liberman
                                           Title: Executive Vice President

                                        GUARANTORS:

                                        LIBERMAN TELEVISION OF HOUSTON, INC.
                                        KZJL LICENSE CORP.
                                        LIBERMAN TELEVISION, INC.
                                        KRCA TELEVISION, INC.
                                        KRCA LICENSE CORP.
                                        LIBERMAN BROADCASTING, INC.
                                        LBI RADIO LICENSE CORP.
                                        LIBERMAN BROADCASTING OF HOUSTON, INC.
                                        LIBERMAN BROADCASTING OF HOUSTON
                                            LICENSE CORP.
                                        EMPIRE BURBANK STUDIOS, INC.


                                        By: /s/ Lenard D. Liberman
                                           ----------------------------------
                                           Name:  Lenard D. Liberman
                                           Title: As Executive Vice President
                                                  of each of the entities listed
                                                  above

                                        U.S. BANK, N.A.

                                        By: /s/ R.B. Colwell Jr.
                                           ----------------------------------
                                           Name:  R.B. Colwell Jr.
                                           Title: Vice President

                                      S-1



                                                                     EXHIBIT A-1


                                 [Face of Note]

                                                            CUSIP/CINS 501786AA5

                   10 1/8% Senior Subordinated Notes due 2012

No. ___                                                           $____________

                                 LBI MEDIA, INC.

promise to pay to _____________________________________________________________

or registered assigns,

the principal sum of __________________________________________________________

Dollars on July 15, 2012.

Interest Payment Dates:  January 15 and July 15

Record Dates:  January 1 and July 1

Dated:  July 9, 2002

                                                     LBI MEDIA, INC.

                                                     By: _________________
                                                         Name:
                                                         Title:


This is one of the Notes referred to
in the within-mentioned Indenture:

U.S. BANK, N.A.
  as Trustee

By: _____________________________
        Authorized Signatory

                                      A-1-1



                                 [Back of Note]
                   10 1/8% Senior Subordinated Notes due 2012

[Insert the Global Note Legend, if applicable pursuant to the provisions of the
Indenture]

[Insert the Private Placement Legend, if applicable pursuant to the provisions
of the Indenture]

         Capitalized terms used herein have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.

         1. Interest. LBI Media, Inc., a California corporation (the "Company"),
promises to pay interest on the principal amount of this Note at 10 1/8 % per
annum from July 9, 2002 until maturity and will pay the Liquidated Damages, if
any, payable pursuant to Section 5 of the Registration Rights Agreement referred
to below. The Company will pay interest and Liquidated Damages, if any,
semi-annually in arrears on January 15 and July 15 of each year, or if any such
day is not a Business Day, on the next succeeding Business Day (each an
"Interest Payment Date"). Interest on the Notes will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from the
date of issuance; provided that if there is no existing Default in the payment
of interest, and if this Note is authenticated between a record date referred to
on the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; provided, further, that
the first Interest Payment Date shall be January 15, 2003. The Company will pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on
demand at a rate that is 1% per annum in excess of the rate then in effect; it
will pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Liquidated Damages
(without regard to any applicable grace periods) from time to time on demand at
the same rate to the extent lawful. Interest will be computed on the basis of a
360-day year of twelve 30-day months.

         2. Method of Payment. The Company will pay interest on the Notes
(except defaulted interest) and Liquidated Damages, if any, to the Persons who
are registered Holders of Notes at the close of business on the January 1 or
July 1 next preceding the Interest Payment Date, even if such Notes are canceled
after such record date and on or before such Interest Payment Date, except as
provided in Section 2.12 of the Indenture with respect to defaulted interest.
The Notes will be payable as to principal, premium and Liquidated Damages, if
any, and interest at the office or agency of the Company maintained for such
purpose within or without the City and State of New York, or, at the option of
the Company, payment of interest and Liquidated Damages, if any, may be made by
check mailed on the Interest Payment Date to the Holders at their addresses set
forth in the register of Holders, provided that payment by wire transfer of
immediately available funds will be required with respect to principal of and
interest, premium and Liquidated Damages, if any, on, all Global Notes and all
other Notes the Holders of which will have provided wire transfer instructions
to the Company or the Paying Agent. Such payment will be in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.

         3. Paying Agent and Registrar. Initially, U.S. Bank, N.A., a national
banking association, the Trustee under the Indenture, will act as Paying Agent
and Registrar. The Company may change any Paying Agent or Registrar without
notice to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.

         4. Indenture. The Company issued the Notes under an Indenture dated as
of July 9, 2002 (the "Indenture") among the Company, the guarantors party
thereto (the "Guarantors") and the Trustee. The

                                     A-1-2



terms of the Notes include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939, as amended (15
U.S. Code (S)(S) 77aaa-77bbbb). The Notes are subject to all such terms, and
Holders are referred to the Indenture and such Act for a statement of such
terms. To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall govern and be
controlling. The Notes are unsecured obligations of the Company limited to
$150.0 million in aggregate principal amount.

         5. Optional Redemption.

         (a)   Except as set forth in subparagraph (b) of this Paragraph 5, the
Company will not have the option to redeem the Notes prior to July 15, 2007.
Thereafter, the Company will have the option to redeem the Notes, in whole or in
part, upon not less than 30 nor more than 60 days' notice, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest and Liquidated Damages, if any, on the Notes to be
redeemed, to the applicable redemption date, if redeemed during the twelve-month
period beginning on July 15 of the years indicated below:

        Year                                                     Percentage
        ----                                                     ----------
        2007 .................................................     105.063%
        2008 .................................................     103.375%
        2009 .................................................     101.688%
        2010 and thereafter ..................................     100.000%

         (b)   Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, at any time prior to July 15, 2005, the Company may on one or more
occasions redeem Notes with all or a portion of the net cash proceeds of one or
more Public Equity Offerings at a redemption price equal to 110.125% of the
principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the applicable redemption date; provided that at
least 65% of the aggregate principal amount of the Notes issued under the
Indenture remains outstanding immediately after the occurrence of such
redemption (excluding Notes held by the Company and its Affiliates) and that
such redemption occurs within 90 days of the date of the closing of such Public
Equity Offering.

         6. Mandatory Redemption.

         The Company will not be required to make mandatory redemption payments
with respect to the Notes.

         7. Repurchase at Option Holder.

         (a)   If there is a Change of Control, the Company will be required to
make an offer (a "Change of Control Offer") to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of each Holder's Notes at a purchase
price equal to 101% of the aggregate principal amount thereof plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the date of purchase
(the "Change of Control Payment"). Within 30 days following any Change of
Control, the Company will mail a notice to each Holder setting forth the
procedures governing the Change of Control Offer as required by the Indenture.

         (b)   If the Company or a Subsidiary consummates any Asset Sales,
within ten Business Days of each date on which the aggregate amount of Excess
Proceeds exceeds $10.0 million, the Company will commence an offer to all
Holders of Notes and all holders of other Indebtedness that is pari passu with
the Notes containing provisions similar to those set forth in the Indenture with
respect to offers to

                                     A-1-3



purchase or redeem with the proceeds of sales of assets (as "Asset Sale Offer")
pursuant to Section 3.09 of the Indenture to purchase the maximum principal
amount of Notes (including any Additional Notes) that may be purchased out of
the Excess Proceeds at an offer price in cash in an amount equal to 100% of the
principal amount thereof plus accrued and unpaid interest and Liquidated Damages
thereon, if any, to the date fixed for the closing of such offer, in accordance
with the procedures set forth in the Indenture. To the extent that the aggregate
amount of Notes (including any Additional Notes) and other pari passu
Indebtedness tendered pursuant to an Asset Sale Offer is less than the Excess
Proceeds, the Company (or such Subsidiary) may use such deficiency for any
purpose not otherwise prohibited by the Indenture. If the aggregate principal
amount of Notes and other pari passu Indebtedness surrendered by Holders thereof
exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and
other pari passu Indebtedness to be purchased on a pro rata basis. Holders of
Notes that are the subject of an offer to purchase will receive an Asset Sale
Offer from the Company prior to any related purchase date and may elect to have
such Notes purchased by completing the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Notes.

         8. Notice of Redemption. Notice of redemption will be mailed at least
30 days but not more than 60 days before the redemption date to each Holder
whose Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest ceases to accrue on Notes or portions thereof
called for redemption.

         9. Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, the Company
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.

         10. Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.

         11. Amendment, Supplement and Waiver. Subject to certain exceptions,
the Indenture, the Subsidiary Guarantees or the Notes may be amended or
supplemented with the consent of the Holders of at least a majority in principal
amount of the then outstanding Notes and Additional Notes, if any, voting as a
single class, and any existing default or compliance with any provision of the
Indenture, the Subsidiary Guarantees or the Notes may be waived with the consent
of the Holders of a majority in principal amount of the then outstanding Notes
and Additional Notes, if any, voting as a single class. Without the consent of
any Holder of a Note, the Indenture, the Subsidiary Guarantees or the Notes may
be amended or supplemented to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Notes in addition to or in place of certificated
Notes, to provide for the assumption of the Company's or Guarantor's obligations
to Holders of the Notes in case of a merger or consolidation, to make any change
that would provide any additional rights or benefits to the Holders of the Notes
or that does not adversely affect the legal rights under the Indenture of any
such Holder, to comply with the requirements of the SEC in order to effect or
maintain the qualification of the Indenture under the Trust Indenture Act, to
provide for the Issuance of Additional Notes in accordance with the limitations
set forth in the Indenture, or to allow any Guarantor to execute a supplemental
indenture to the Indenture and/or a Subsidiary Guarantee with respect to the
Notes.

                                     A-1-4



         (C)   Defaults and Remedies. Events of Default include: (i) default for
30 days in the payment when due of interest or Liquidated Damages on the Notes;
(ii) default in payment when due of principal of or premium, if any, on the
Notes when the same becomes due and payable at maturity, upon redemption
(including in connection with an offer to purchase) or otherwise, (iii) failure
by the Company or any of its Restricted Subsidiaries to comply with Section 4.15
or 5.01 of the Indenture; (iv) failure by the Company or any of its Restricted
Subsidiaries for 30 days after notice to the Company by the Trustee or the
Holders of at least 25% in principal amount of the Notes then outstanding to
comply with Section 4.07, 4.09 or 4.10 of the Indenture; (v) failure by the
Company or any of its Subsidiaries for 60 days after notice to the Company by
the Trustee or the Holders of at least 25% in principal amount of the Notes then
outstanding to observe or perform any other covenant, representation, warranty
or other agreement in the Indenture or the Notes; (vi) default under certain
other agreements relating to Indebtedness of the Company which default is caused
by a failure to pay principal of such Indebtedness at the final stated maturity
thereof (giving effect to any applicable grace periods and any extensions
thereof) or results in the acceleration of such Indebtedness prior to its
express maturity; (vii) certain final judgments for the payment of money that
remain undischarged, unpaid, unrestricted, unbonded or unstayed for a period of
60 days; (viii) certain events of bankruptcy or insolvency with respect to the
Company or any of its Significant Subsidiaries; (ix) the incurrence by Parent of
Specified Parent Debt (other than the refinancing of any indebtedness under the
Existing Parent Notes) if, at the time of any such incurrence and after giving
pro forma effect to such incurrence as of such date and to the use of proceeds
therefrom, as if the same had occurred at the beginning of the most recently
ended four fiscal quarter period of Parent for which internal financial
statements are available, the Parent Debt Ratio would have exceeded 7.0 to 1 and
the failure for 30 days after notice from the Trustee or Holders of at least 25%
in aggregate principal amount of the outstanding Notes to cure such default; and
(x) except as permitted by the Indenture, any Subsidiary Guarantee of a
Significant Subsidiary shall be held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason to be in full force and
effect or any Guarantor which is a Significant Subsidiary or any Person acting
on its behalf shall deny or disaffirm its obligations under its Subsidiary
Guarantee, provided, however, that an Event of Default will also be deemed to
occur with respect to Subsidiary Guarantors that are not Significant
Subsidiaries if the Subsidiary Guarantees of such Insignificant Subsidiaries are
held in any judicial proceeding to be unenforceable or invalid or shall cease
for any reason to be in full force and effect or such Insignificant Subsidiaries
deny or disaffirm their obligations under their Subsidiary Guarantees (other
than in accordance with the terms of such Subsidiary Guarantee), if when
aggregated and taken as a whole such Insignificant Subsidiaries would meet the
definition of a Significant Subsidiary. If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may declare all the Notes to be due and payable.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, all outstanding Notes will become
due and payable without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event
of Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest. The Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all of
the Notes waive any existing Default or Event of Default and its consequences
under the Indenture except a continuing Default or Event of Default in the
payment of interest on, or the principal of, the Notes. The Company is required
to deliver to the Trustee annually a statement regarding compliance with the
Indenture, and the Company is required upon becoming aware of any Default or
Event of Default, to deliver to the Trustee a statement specifying such Default
or Event of Default.

                                     A-1-5



         12. Subordination. Payment of principal, interest and premium and
Liquidated Damages, if any, on the Notes is subordinated to the prior payment of
Senior Debt on the terms provided in the Indenture.

         13. Trustee Dealings with Company. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.

         14. No Recourse Against Others. A director, officer, employee,
incorporator or stockholder, of the Company or any of the Guarantors, as such,
will not have any liability for any obligations of the Company or such Guarantor
under the Notes, the Subsidiary Guarantees or the Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of the Notes.

         15. Authentication. This Note will not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.

         16. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).

         17. Additional Rights of Holders of Restricted Global Notes and
Restricted Definitive Notes. In addition to the rights provided to Holders of
Notes under the Indenture, Holders of Restricted Global Notes and Restricted
Definitive Notes will have all the rights set forth in the Registration Rights
Agreement dated as of July 9, 2002, among the Company, the Guarantors and the
other parties named on the signature pages thereof or, in the case of Additional
Notes, Holders of Restricted Global Notes and Restricted Definitive Notes will
have the rights set forth in one or more registration rights agreements, if any,
between the Company and the other parties thereto, relating to rights given by
the Company to the purchasers of any Additional Notes (collectively, the
"Registration Rights Agreement").

         18. Cusip Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.

         19. Governing Law. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL
GOVERN AND BE USED TO CONSTRUE THE NOTES WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

                                     A-1-6



         The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:

LBI Media, Inc.
1845 West Empire Avenue
Burbank, CA  91504
Attention:  Lenard D. Liberman

                                     A-1-7



                                 Assignment Form

         To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to: __________________________________
                                                (Insert assignee's legal name)

________________________________________________________________________________
                  (Insert assignee's soc. sec. or tax I.D. no.)

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________
              (Print or type assignee's name, address and zip code)

and irrevocably appoint_________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.

Date:  _______________

                                    Your Signature: ____________________________
                                        (Sign exactly as your name appears on
                                        the face of this Note)

Signature Guarantee*:  _________________________

* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).

                                     A-1-8



                       OPTION OF HOLDER TO ELECT PURCHASE

         If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate box
below:

                           .Section 4.10     .Section 4.15

         If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased:

                                  $____________

Date:  _______________

                                Your Signature:_________________________________
                                              (Sign exactly as your name appears
                                               on the face of this Note)

                                Tax Identification No.:_________________________


Signature Guarantee*: _________________________

* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).

                                     A-1-9



             SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*


         The following exchanges of a part of this Global Note for an interest
in another Global Note or for a Definitive Note, or exchanges of a part of
another Global Note or Definitive Note for an interest in this Global Note, have
been made:



                                                                        Principal Amount
                                                                      of this Global Note       Signature of
                       Amount of decrease    Amount of increase in       following such      authorized officer
                       in Principal Amount      Principal Amount          decrease (or       of Trustee or Note
Date of Exchange       of this Global Note    of this Global Note           increase)             Custodian
- ----------------       -------------------    -------------------           ---------             ---------
                                                                                  











* This schedule should be included only if the Note is issued in global form.

                                     A-1-10



                                                                     EXHIBIT A-2


                  [Face of Regulation S Temporary Global Note]


                                                            CUSIP/CINS U51390AA7


                   10 1/8% Senior Subordinated Notes due 2012

No. ___                                                              $__________

                                 LBI MEDIA, INC.

promise to pay to ______________________________________________________________

or registered assigns,

the principal sum of ___________________________________________________________

Dollars on July 15, 2012.

Interest Payment Dates:  January 15 and July 15

Record Dates:  January 1 and July 1

Dated:  July 9, 2002

                                                  LBI MEDIA, INC.

                                                  By: ____________________
                                                      Name:
                                                      Title:


This is one of the Notes referred
to in the within-mentioned Indenture:

U.S. BANK, N.A.,
  as Trustee

By:__________________________
     Authorized Signatory

                                      A-2-1



                  [Back of Regulation S Temporary Global Note]
                     10 1/8% Senior Subordinated Notes due 2012

THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE PAYMENT OF INTEREST HEREON.

THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO
A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT
FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, RESOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS NOTE IS NOTIFIED THAT THE SELLER OF THIS NOTE
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS NOTE
MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) INSIDE THE
UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II)

                                     A-2-2



OUTSIDE THE UNITED STATES IN A TRANSACTION COMPLYING WITH THE PROVISIONS OF RULE
904 UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT PROVIDED BY RULE 144 (IF AVAILABLE), (IV) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR (V) TO THE
ISSUER, ITS SUBSIDIARIES OR ITS DIRECT OR INDIRECT PARENT, IN EACH OF CASES (I)
THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE.

         Capitalized terms used herein will have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.

         1. Interest. LBI Media, Inc., a California corporation (the "Company"),
promises to pay interest on the principal amount of this Note at 10?% per annum
from July 9, 2002 until maturity and will pay the Liquidated Damages, if any,
payable pursuant to Section 5 of the Registration Rights Agreement referred to
below. The Company will pay interest and Liquidated Damages, if any,
semi-annually in arrears on January 15 and July 15 of each year, or if any such
day is not a Business Day, on the next succeeding Business Day (each an
"Interest Payment Date"). Interest on the Notes will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from the
date of issuance; provided that if there is no existing Default in the payment
of interest, and if this Note is authenticated between a record date referred to
on the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; provided, further, that
the first Interest Payment Date shall be January 15, 2003. The Company will pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on
demand at a rate that is 1% per annum in excess of the rate then in effect; it
will pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Liquidated Damages
(without regard to any applicable grace periods) from time to time on demand at
the same rate to the extent lawful. Interest will be computed on the basis of a
360-day year of twelve 30-day months.

         Until this Regulation S Temporary Global Note is exchanged for one or
more Regulation S Permanent Global Notes, the Holder hereof shall not be
entitled to receive payments of interest hereon; until so exchanged in full,
this Regulation S Temporary Global Note shall in all other respects be entitled
to the same benefits as other Notes under the Indenture.

         2. Method of Payment. The Company will pay interest on the Notes
(except defaulted interest) and Liquidated Damages, if any, to the Persons who
are registered Holders of Notes at the close of business on the January 1 or
July 1 next preceding the Interest Payment Date, even if such Notes are canceled
after such record date and on or before such Interest Payment Date, except as
provided in Section 2.12 of the Indenture with respect to defaulted interest.
The Notes will be payable as to principal, premium and Liquidated Damages, if
any, and interest at the office or agency of the Company maintained for such
purpose within or without the City and State of New York, or, at the option of
the Company, payment of interest and Liquidated Damages, if any, may be made by
check mailed on the Interest Payment Date to the Holders at their addresses set
forth in the register of Holders, provided that payment by wire transfer of
immediately available funds will be required with respect to principal of and
interest, premium and Liquidated Damages, if any, on, all Global Notes and all
other Notes the Holders of which will have provided wire transfer instructions
to the Company or the Paying Agent. Such payment will be in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.

                                     A-2-3



         3. Paying Agent and Registrar. Initially, U.S. Bank, N.A., a national
banking association, the Trustee under the Indenture, will act as Paying Agent
and Registrar. The Company may change any Paying Agent or Registrar without
notice to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.

         4. Indenture. The Company issued the Notes under an Indenture dated as
of July 9, 2002 (the "Indenture") among the Company, the guarantors party
thereto (the "Guarantors") and the Trustee. The terms of the Notes include those
stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939, as amended (15 U.S. Code ss.ss. 77aaa-77bbbb). The
Notes are subject to all such terms, and Holders are referred to the Indenture
and such Act for a statement of such terms. To the extent any provision of this
Note conflicts with the express provisions of the Indenture, the provisions of
the Indenture shall govern and be controlling. The Notes are unsecured
obligations of the Company limited to $150.0 million in aggregate principal
amount.

         5. Optional Redemption.

         (a)   Except as set forth in subparagraph (b) of this Paragraph 5, the
Company will not have the option to redeem the Notes prior to July 15, 2007.
Thereafter, the Company will have the option to redeem the Notes, in whole or in
part, upon not less than 30 nor more than 60 days' notice, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest and Liquidated Damages, if any, on the Notes to be
redeemed, to the applicable redemption date, if redeemed during the twelve-month
period beginning on July 15 of the years indicated below:

        Year                                                         Percentage
        ----                                                         ----------
        2007 ...................................................       105.063%
        2008 ...................................................       103.375%
        2009 ...................................................       101.688%
        2010 and thereafter ....................................       100.000%

         (b)   Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, at any time prior to July 15, 2005, the Company may on one or more
occasions redeem Notes with all or a portion of the net cash proceeds of one or
more Public Equity Offerings at a redemption price equal to 110.125% of the
principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the applicable redemption date; provided that at
least 65% of the aggregate principal amount of the Notes issued under the
Indenture remains outstanding immediately after the occurrence of such
redemption (excluding Notes held by the Company and its Affiliates) and that
such redemption occurs within 90 days of the date of the closing of such Public
Equity Offering.

         6. Mandatory Redemption.

         The Company will not be required to make mandatory redemption payments
with respect to the Notes.

         7. Repurchase At Option of Holder.

         (a)   If there is a Change of Control, the Company will be required to
make an offer (a "Change of Control Offer") to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of each Holder's Notes at a purchase
price equal to 101% of the aggregate principal amount thereof plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the date of purchase
(the "Change of Control Payment"). Within 30 days following any Change of
Control, the Company will mail a notice to

                                     A-2-4



each Holder setting forth the procedures governing the Change of Control Offer
as required by the Indenture.

         (b) If the Company or a Subsidiary consummates any Asset Sales, within
ten Business Days of each date on which the aggregate amount of Excess Proceeds
exceeds $10.0 million, the Company will commence an offer to all Holders of
Notes and all holders of other Indebtedness that is pari passu with the Notes
containing provisions similar to those set forth in the Indenture with respect
to offers to purchase or redeem with the proceeds of sales of assets (as "Asset
Sale Offer") pursuant to Section 3.09 of the Indenture to purchase the maximum
principal amount of Notes (including any Additional Notes) that may be purchased
out of the Excess Proceeds at an offer price in cash in an amount equal to 100%
of the principal amount thereof plus accrued and unpaid interest and Liquidated
Damages thereon, if any, to the date fixed for the closing of such offer, in
accordance with the procedures set forth in the Indenture. To the extent that
the aggregate amount of Notes (including any Additional Notes) and other pari
passu Indebtedness tendered pursuant to an Asset Sale Offer is less than the
Excess Proceeds, the Company (or such Subsidiary) may use such deficiency for
any purpose not otherwise prohibited by the Indenture. If the aggregate
principal amount of Notes and other pari passu Indebtedness surrendered by
Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select
the Notes and other pari passu Indebtedness to be purchased on a pro rata basis.
Holders of Notes that are the subject of an offer to purchase will receive an
Asset Sale Offer from the Company prior to any related purchase date and may
elect to have such Notes purchased by completing the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Notes.

         8. Notice of Redemption. Notice of redemption will be mailed at least
30 days but not more than 60 days before the redemption date to each Holder
whose Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest ceases to accrue on Notes or portions thereof
called for redemption.

         9. Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, the Company
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.

         This Regulation S Temporary Global Note is exchangeable in whole or in
part for one or more Global Notes only (i) on or after the termination of the
40-day restricted period (as defined in Regulation S) and (ii) upon presentation
of certificates (accompanied by an Opinion of Counsel, if applicable) required
by Article 2 of the Indenture. Upon exchange of this Regulation S Temporary
Global Note for one or more Global Notes, the Trustee shall cancel this
Regulation S Temporary Global Note.

         10. Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.

         11. Amendment, Supplement and Waiver. Subject to certain exceptions,
the Indenture, the Subsidiary Guarantees or the Notes may be amended or
supplemented with the consent of the Holders of at least a majority in principal
amount of the then outstanding Notes and Additional Notes, if any, voting as a
single class, and any existing default or compliance with any provision of the
Indenture, the

                                     A-2-5



Subsidiary Guarantees or the Notes may be waived with the consent of the Holders
of a majority in principal amount of the then outstanding Notes and Additional
Notes, if any, voting as a single class. Without the consent of any Holder of a
Note, the Indenture, the Subsidiary Guarantees or the Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's or Guarantor's obligations to
Holders of the Notes in case of a merger or consolidation, to make any change
that would provide any additional rights or benefits to the Holders of the Notes
or that does not adversely affect the legal rights under the Indenture of any
such Holder, to comply with the requirements of the SEC in order to effect or
maintain the qualification of the Indenture under the Trust Indenture Act, to
provide for the Issuance of Additional Notes in accordance with the limitations
set forth in the Indenture, or to allow any Guarantor to execute a supplemental
indenture to the Indenture and/or a Subsidiary Guarantee with respect to the
Notes.

         (c)   Defaults and Remedies. Events of Default include: (i) default for
30 days in the payment when due of interest or Liquidated Damages on the Notes;
(ii) default in payment when due of principal of or premium, if any, on the
Notes when the same becomes due and payable at maturity, upon redemption
(including in connection with an offer to purchase) or otherwise, (iii) failure
by the Company or any of its Restricted Subsidiaries to comply with Section 4.15
or 5.01 of the Indenture; (iv) failure by the Company or any of its Restricted
Subsidiaries for 30 days after notice to the Company by the Trustee or the
Holders of at least 25% in principal amount of the Notes then outstanding to
comply with Section 4.07, 4.09 or 4.10 of the Indenture; (v) failure by the
Company or any of its Subsidiaries for 60 days after notice to the Company by
the Trustee or the Holders of at least 25% in principal amount of the Notes then
outstanding to observe or perform any other covenant, representation, warranty
or other agreement in the Indenture or the Notes; (vi) default under certain
other agreements relating to Indebtedness of the Company which default is caused
by a failure to pay principal of such Indebtedness at the final stated maturity
thereof (giving effect to any applicable grace periods and any extensions
thereof) or results in the acceleration of such Indebtedness prior to its
express maturity; (vii) certain final judgments for the payment of money that
remain undischarged, unpaid, unrestricted, unbonded or unstayed for a period of
60 days; (viii) certain events of bankruptcy or insolvency with respect to the
Company or any of its Significant Subsidiaries; (ix) the incurrence by Parent of
Specified Parent Debt (other than the refinancing of any indebtedness under the
Existing Parent Notes) if, at the time of any such incurrence and after giving
pro forma effect to such incurrence as of such date and to the use of proceeds
therefrom, as if the same had occurred at the beginning of the most recently
ended four fiscal quarter period of Parent for which internal financial
statements are available, the Parent Debt Ratio would have exceeded 7.0 to 1 and
the failure for 30 days after notice from the Trustee or Holders of at least 25%
in aggregate principal amount of the outstanding Notes to cure such default; and
(x) except as permitted by the Indenture, any Subsidiary Guarantee of a
Significant Subsidiary shall be held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason to be in full force and
effect or any Guarantor which is a Significant Subsidiary or any Person acting
on its behalf shall deny or disaffirm its obligations under its Subsidiary
Guarantee, provided, however, that an Event of Default will also be deemed to
occur with respect to Subsidiary Guarantors that are not Significant
Subsidiaries if the Subsidiary Guarantees of such Insignificant Subsidiaries are
held in any judicial proceeding to be unenforceable or invalid or shall cease
for any reason to be in full force and effect or such Insignificant Subsidiaries
deny or disaffirm their obligations under their Subsidiary Guarantees (other
than in accordance with the terms of such Subsidiary Guarantee), if when
aggregated and taken as a whole such Insignificant Subsidiaries would meet the
definition of a Significant Subsidiary. If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may declare all the Notes to be due and payable.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, all outstanding Notes will become
due and payable without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes

                                     A-2-6



may direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of the Notes notice of any continuing Default or Event of
Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest. The Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all of
the Notes waive any existing Default or Event of Default and its consequences
under the Indenture except a continuing Default or Event of Default in the
payment of interest on, or the principal of, the Notes. The Company is required
to deliver to the Trustee annually a statement regarding compliance with the
Indenture, and the Company is required upon becoming aware of any Default or
Event of Default, to deliver to the Trustee a statement specifying such Default
or Event of Default.

         12. Subordination. Payment of principal, interest and premium and
Liquidated Damages, if any, on the Notes is subordinated to the prior payment of
Senior Debt on the terms provided in the Indenture.

         13. Trustee Dealings with Company. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.

         14. No Recourse Against Others. A director, officer, employee,
incorporator or stockholder, of the Company or any of the Guarantors, as such,
will not have any liability for any obligations of the Company or such Guarantor
under the Notes, the Subsidiary Guarantees or the Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of the Notes.

         15. Authentication. This Note will not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.

         16. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).

         17. Additional Rights of Holders of Restricted Global Notes and
Restricted Definitive Notes. In addition to the rights provided to Holders of
Notes under the Indenture, Holders of Restricted Global Notes and Restricted
Definitive Notes will have all the rights set forth in the Registration Rights
Agreement dated as of July 9, 2002, among the Company, the Guarantors and the
other parties named on the signature pages thereof or, in the case of Additional
Notes, Holders of Restricted Global Notes and Restricted Definitive Notes will
have the rights set forth in one or more registration rights agreements, if any,
between the Company and the other parties thereto, relating to rights given by
the Company to the purchasers of any Additional Notes (collectively, the
"Registration Rights Agreement").

         18. Cusip Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.

                                     A-2-7



         19. Governing Law. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL
GOVERN AND BE USED TO CONSTRUE THE NOTES WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

         The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:

LBI Media, Inc.
1845 West Empire Avenue
Burbank, CA  91504
Attention:  Lenard D. Liberman

                                     A-2-8



                                 Assignment Form

         To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to:___________________________________
                                               (Insert assignee's legal name)

________________________________________________________________________________
                  (Insert assignee's soc. sec. or tax I.D. no.)

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________
              (Print or type assignee's name, address and zip code)

and irrevocably appoint ________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.

Date:  _______________

                                      Your Signature: __________________________
                                               (Sign exactly as your name
                                               appears on the face of this Note)

Signature Guarantee*: _________________________

* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).

                                     A-2-9



                       Option of Holder to Elect Purchase

         If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate box
below:

                      .Section 4.10     .Section 4.15

         If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased:

                                 $_____________

Date:  _______________

                                    Your Signature: ___________________________
                                              (Sign exactly as your name appears
                                               on the face of this Note)

                                    Tax Identification No.:_____________________

Signature Guarantee*:  _________________________

*   Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).

                                     A-2-10



           SCHEDULE OF EXCHANGES OF REGULATION S TEMPORARY GLOBAL NOTE

         The following exchanges of a part of this Regulation S Temporary Global
Note for an interest in another Global Note, or of other Restricted Global Notes
for an interest in this Regulation S Temporary Global Note, have been made:



                                                                       Principal Amount
                                                                      of this Global Note       Signature of
                       Amount of decrease    Amount of increase in      following such       authorized officer
                       in Principal Amount      Principal Amount         decrease (or        of Trustee or Note
Date of Exchange       of this Global Note    of this Global Note          increase)              Custodian
- ----------------       -------------------    -------------------          ---------              ---------
                                                                                 



                                     A-2-11



                                                                       EXHIBIT B

                         FORM OF CERTIFICATE OF TRANSFER

LBI Media, Inc.
1845 West Empire Avenue
Burbank, CA  91504

U.S. Bank, N.A.
1420 Fifth Avenue, 7/th/ Floor
Seattle, WA  98101

         Re:  10 1/8 Senior Subordinated Notes due 2012

         Reference is hereby made to the Indenture, dated as of July 9, 2002
(the "Indenture"), between LBI Media, Inc., a California corporation, as issuer
(the "Company"), the Guarantors party thereto, and U.S. Bank, N.A., a national
banking association, as Trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.

         ___________________, (the "Transferor") owns and proposes to transfer
the Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to ___________________________ (the "Transferee"), as further specified in Annex
A hereto. In connection with the Transfer, the Transferor hereby certifies that:

                             [CHECK ALL THAT APPLY]

         1. [_] Check if Transferee will take delivery of a beneficial interest
in the 144A Global Note or a Definitive Note Pursuant to Rule 144A. The Transfer
is being effected pursuant to and in accordance with Rule 144A under the
Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, the
Transferor hereby further certifies that the beneficial interest or Definitive
Note is being transferred to a Person that the Transferor reasonably believed
and believes is purchasing the beneficial interest or Definitive Note for its
own account, or for one or more accounts with respect to which such Person
exercises sole investment discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A in a transaction
meeting the requirements of Rule 144A and such Transfer is in compliance with
any applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the 144A Global Note and/or the Definitive Note and in the
Indenture and the Securities Act.

         2. [_] Check if Transferee will take delivery of a beneficial interest
in the Temporary Regulation S Global Note, the Regulation S Global Note or a
Definitive Note pursuant to Regulation S. The Transfer is being effected
pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act
and, accordingly, the Transferor hereby further certifies that (i) the Transfer
is not being made to a person in the United States and (x) at the time the buy
order was originated, the Transferee was outside the United States or such
Transferor and any Person acting on its behalf reasonably believed and believes
that the Transferee was outside the United States or (y) the transaction was
executed in, on or through the facilities of a designated offshore securities
market and neither such Transferor nor any Person acting on its behalf knows
that the transaction was prearranged with a buyer in the United States, (ii) no
directed selling efforts have been made in contravention of the requirements of
Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act, (iii) the
transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act and (iv) if the proposed transfer is being
made prior to the expiration of the Restricted Period, the transfer is not being
made to a

                                       B-1



U.S. Person or for the account or benefit of a U.S. Person (other than an
Initial Purchaser). Upon consummation of the proposed transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will be subject to the restrictions on Transfer enumerated in
the Private Placement Legend printed on the Regulation S Global Note, the
Temporary Regulation S Global Note and/or the Definitive Note and in the
Indenture and the Securities Act.

         3. [_] Check and complete if Transferee will take delivery of a
beneficial interest in the IAI Global Note or a Definitive Note pursuant to any
provision of the Securities Act other than Rule 144A or Regulation S. The
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Notes and Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act and
any applicable blue sky securities laws of any state of the United States, and
accordingly the Transferor hereby further certifies that (check one):

                (a)  [_]  such Transfer is being effected pursuant to and in
         accordance with Rule 144 under the Securities Act;

                                       or

                (b)  [_]  such Transfer is being effected to the Company or a
         subsidiary thereof;

                                       or

                (c)  [_]  such Transfer is being effected pursuant to an
         effective registration statement under the Securities Act and in
         compliance with the prospectus delivery requirements of the Securities
         Act;

                                       or

                (d)  [_]  such Transfer is being effected to an Institutional
         Accredited Investor and pursuant to an exemption from the registration
         requirements of the Securities Act other than Rule 144A, Rule 144 or
         Rule 904, and the Transferor hereby further certifies that it has not
         engaged in any general solicitation within the meaning of Regulation D
         under the Securities Act and the Transfer complies with the transfer
         restrictions applicable to beneficial interests in a Restricted Global
         Note or Restricted Definitive Notes and the requirements of the
         exemption claimed, which certification is supported by (1) a
         certificate executed by the Transferee in the form of Exhibit D to the
         Indenture and (2) if such Transfer is in respect of a principal amount
         of Notes at the time of transfer of less than $250,000, an Opinion of
         Counsel provided by the Transferor or the Transferee (a copy of which
         the Transferor has attached to this certification), to the effect that
         such Transfer is in compliance with the Securities Act. Upon
         consummation of the proposed transfer in accordance with the terms of
         the Indenture, the transferred beneficial interest or Definitive Note
         will be subject to the restrictions on transfer enumerated in the
         Private Placement Legend printed on the IAI Global Note and/or the
         Definitive Notes and in the Indenture and the Securities Act.

         4. [_]  Check if Transferee will take delivery of a beneficial interest
in an Unrestricted Global Note or of an Unrestricted Definitive Note.

         (a) [_] Check if Transfer is pursuant to Rule 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement

                                      B-2



Legend are not required in order to maintain compliance with the Securities Act.
Upon consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will no longer
be subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the Restricted Global Notes, on Restricted Definitive Notes
and in the Indenture.

         (b) [_] Check if Transfer is Pursuant to Regulation S. (i) The Transfer
is being effected pursuant to and in accordance with Rule 903 or Rule 904 under
the Securities Act and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any state of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will no longer be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes, on Restricted Definitive Notes and in the Indenture.

         (c) [_] Check if Transfer is Pursuant to Other Exemption. (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act other than Rule 144, Rule
903 or Rule 904 and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.

         This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.

                                            ___________________________________
                                                 [Insert Name of Transferor]


                                            By:________________________________
                                              Name:
                                              Title:

         Dated:  _______________________

                                      B-3



                       ANNEX A TO CERTIFICATE OF TRANSFER

         1.   The Transferor owns and proposes to transfer the following:

                          [CHECK ONE OF (a) OR (b)]

(a)             [_]  a beneficial interest in the:

                        (i)     [_]  144A Global Note (CUSIP _________), or

                        (ii)    [_]  Regulation S Global Note (CUSIP _________),
                                     or

                        (iii)   [_]  IAI Global Note (CUSIP _________); or

                    (b) [_]   a Restricted Definitive Note.

         2.   After the Transfer the Transferee will hold:

                                   [CHECK ONE]

                    (a) [_]  a beneficial interest in the:

                        (i)     [_]  144A Global Note (CUSIP _________), or

                        (ii)    [_]  Regulation S Global Note (CUSIP _________),
                                     or

                        (iii)   [_[  IAI Global Note (CUSIP _________); or

                        (iv)    [_]  Unrestricted Global Note (CUSIP _________);
                                     or

                    (b) [_]  a Restricted Definitive Note; or

                    (c) [_]  an Unrestricted Definitive Note,

                    in accordance with the terms of the Indenture.

                                      B-4



                                                                       EXHIBIT C

                         FORM OF CERTIFICATE OF EXCHANGE

LBI Media, Inc.
1845 West Empire Avenue
Burbank, CA  91504

U.S. Bank, N.A.
1420 Fifth Avenue, 7/th/ Floor
Seattle, WA  98101

         Re:  10 1/8% Senior Subordinated Notes due 2012

                                     (CUSIP)

         Reference is hereby made to the Indenture, dated as of July 9, 2002
(the "Indenture"), between LBI Media, Inc., a California corporation, as issuer
(the "Company"), the Guarantors party thereto, and U.S. Bank, N.A., a national
banking association, as Trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.

         __________________________, (the "Owner") owns and proposes to exchange
the Note[s] or interest in such Note[s] specified herein, in the principal
amount of $____________ in such Note[s] or interests (the "Exchange"). In
connection with the Exchange, the Owner hereby certifies that:

         1.   Exchange of Restricted Definitive Notes or Beneficial Interests in
a Restricted Global Note for Unrestricted Definitive Notes or Beneficial
Interests in an Unrestricted Global Note

         (a)  [_] Check if Exchange is from beneficial interest in a Restricted
Global Note to beneficial interest in an Unrestricted Global Note. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with the Securities Act of 1933, as
amended (the "Securities Act"), (iii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the beneficial interest in
an Unrestricted Global Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.

         (b)  [_] Check if Exchange is from beneficial interest in a Restricted
Global Note to Unrestricted Definitive Note. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.

         (c)  [_]   Check if Exchange is from Restricted Definitive Note to
beneficial interest in an Unrestricted Global Note. In connection with the
Owner's Exchange of a Restricted Definitive Note for

                                       C-1



a beneficial interest in an Unrestricted Global Note, the Owner hereby certifies
(i) the beneficial interest is being acquired for the Owner's own account
without transfer, (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to Restricted Definitive Notes and pursuant to
and in accordance with the Securities Act, (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the beneficial
interest is being acquired in compliance with any applicable blue sky securities
laws of any state of the United States.

         (d)  [_] Check if Exchange is from Restricted Definitive Note to
Unrestricted Definitive Note. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.

         2.   Exchange of Restricted Definitive Notes or Beneficial Interests in
Restricted Global Notes for Restricted Definitive Notes or Beneficial Interests
in Restricted Global Notes

         (a)  [_] Check if Exchange is from beneficial interest in a Restricted
Global Note to Restricted Definitive Note. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.

         (b)  [_] Check if Exchange is from Restricted Definitive Note to
beneficial interest in a Restricted Global Note. In connection with the Exchange
of the Owner's Restricted Definitive Note for a beneficial interest in the
[CHECK ONE] [_] 144A Global Note, [_] Regulation S Global Note, [_] IAI Global
Note with an equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer and (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Global Notes and pursuant to
and in accordance with the Securities Act, and in compliance with any applicable
blue sky securities laws of any state of the United States. Upon consummation of
the proposed Exchange in accordance with the terms of the Indenture, the
beneficial interest issued will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the relevant Restricted
Global Note and in the Indenture and the Securities Act.

                                      C-2



         This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.

                                             ___________________________________
                                                 [Insert Name of Transferor]


                                            By:________________________
                                               Name:
                                               Title:

Dated:  ______________________

                                      C-3



                                                                       EXHIBIT D

                            FORM OF CERTIFICATE FROM
                   ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR

LBI Media, Inc.
1845 West Empire Avenue
Burbank, CA 91504

U.S. Bank, N.A.
1420 Fifth Avenue, 7/th/ Floor
Seattle, WA  8101

         Re:  10 1/8% Senior Subordinated Notes due 2012

         Reference is hereby made to the Indenture, dated as of July 9, 2002
(the "Indenture"), between LBI Media, Inc., a California corporation, as issuer
(the "Company"), the Guarantors party thereto, and U.S. Bank, N.A., a national
banking association, as Trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.

         In connection with our proposed purchase of $____________ aggregate
principal amount of:

         (a)  [_]       a beneficial interest in a Global Note, or

         (b)  [_]       a Definitive Note,

         we confirm that:

         1.   We understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the Securities Act of
1933, as amended (the "Securities Act").

         2.   We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest therein
may not be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell the Notes or any interest therein,
we will do so only (A) to the Company or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) to an institutional "accredited investor" (as
defined below) that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter and, if such transfer is in respect of
a principal amount of Notes, at the time of transfer of less than $250,000, an
Opinion of Counsel in form reasonably acceptable to the Company to the effect
that such transfer is in compliance with the Securities Act, (D) outside the
United States in accordance with Rule 904 of Regulation S under the Securities
Act, (E) pursuant to the provisions of Rule 144(k) under the Securities Act or
(F) pursuant to an effective registration statement under the Securities Act,
and we further agree to provide to any person purchasing the Definitive Note or
beneficial interest in a Global Note from us in a transaction meeting the
requirements of clauses (A) through (E) of this paragraph a notice advising such
purchaser that resales thereof are restricted as stated herein.

                                       C-1



         3.   We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect.

         4.   We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.

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

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

                                       _________________________________________
                                          [Insert Name of Accredited Investor]


                                       By:______________________________________
                                         Name:
                                         Title:

Dated:  _______________________

                                      D-2



                                                                       EXHIBIT E

                         [FORM OF NOTATION OF GUARANTEE]

         For value received, each Guarantor (which term includes any successor
Person under the Indenture) has, jointly and severally, unconditionally
guaranteed, to the extent set forth in the Indenture and subject to the
provisions in the Indenture dated as of July 9, 2002 (the "Indenture") among LBI
Media, Inc., the Guarantors listed on Schedule I thereto and U.S. Bank, N.A., a
national banking association, as Trustee (the "Trustee"), (a) the due and
punctual payment of the principal of, premium, if any, and interest on the Notes
(as defined in the Indenture), whether at maturity, by acceleration, redemption
or otherwise, the due and punctual payment of interest on overdue principal and
premium, and, to the extent permitted by law, interest, and the due and punctual
performance of all other obligations of the Company to the Holders or the
Trustee all in accordance with the terms of the Indenture and (b) in case of any
extension of time of payment or renewal of any Notes or any of such other
obligations, that the same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at Stated
Maturity, by acceleration or otherwise. The obligations of the Guarantors to the
Holders of Notes and to the Trustee pursuant to the Subsidiary Guarantee and the
Indenture are expressly set forth in Article 11 of the Indenture and reference
is hereby made to the Indenture for the precise terms of the Subsidiary
Guarantee. Each Holder of a Note, by accepting the same, (a) agrees to and shall
be bound by such provisions, (b) authorizes and directs the Trustee, on behalf
of such Holder, to take such action as may be necessary or appropriate to
effectuate the subordination as provided in the Indenture and (c) appoints the
Trustee attorney-in-fact of such Holder for such purpose; provided, however,
that the Indebtedness evidenced by this Subsidiary Guarantee shall cease to be
so subordinated and subject in right of payment upon any defeasance of this Note
in accordance with the provisions of the Indenture.

GUARANTORS:

LIBERMAN TELEVISION OF HOUSTON, INC.
KZJL LICENSE CORP.
LIBERMAN TELEVISION, INC.
KRCA TELEVISION, INC.
KRCA LICENSE CORP.
LIBERMAN BROADCASTING, INC.
LBI RADIO LICENSE CORP.
LIBERMAN BROADCASTING OF HOUSTON, INC.
LIBERMAN BROADCASTING OF HOUSTON LICENSE CORP.
EMPIRE BURBANK STUDIOS, INC.

By:______________________
   Name:
   Title:

                                       E-1



                                                                       EXHIBIT F

                         FORM OF SUPPLEMENTAL INDENTURE
                    TO BE DELIVERED BY SUBSEQUENT GUARANTORS

         SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
_____________, 20___ among __________________ (the "Guaranteeing Subsidiary"), a
subsidiary of LBI Media, Inc. (or its permitted successor), a California
corporation (the "Company"), the Company, the other Guarantors (as defined in
the Indenture referred to herein) and U.S. Bank, N.A., a national banking
association, as trustee under the Indenture referred to below (the "Trustee").

                               W I T N E S S E T H

         WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of July 9, 2002 providing for
the issuance of an aggregate principal amount of up to $150.0 million of 10?%
Senior Subordinated Notes due 2012 (the "Notes");

         WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally
guarantee all of the Company's Obligations under the Notes and the Indenture on
the terms and conditions set forth herein (the "Subsidiary Guarantee"); and

         WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.

         NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:

         1.    Capitalized Terms. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.

         2.    Agreement to Guarantee.  The Guaranteeing Subsidiary hereby
agrees as follows:

              (a)   Along with all Guarantors named in the Indenture, to jointly
                    and severally Guarantee to each Holder of a Note
                    authenticated and delivered by the Trustee and to the
                    Trustee and its successors and assigns, the Notes or the
                    obligations of the Company hereunder or thereunder, that:

                    (i)   the principal of and interest, and premium, if any, on
              the Notes will be promptly paid in full when due, whether at
              maturity, by acceleration, redemption or otherwise, and interest
              on the overdue principal of and interest on the Notes, if any, if
              lawful, and all other obligations of the Company to the Holders or
              the Trustee hereunder or thereunder will be promptly paid in full
              or performed, all in accordance with the terms hereof and thereof;
              and

                    (ii)  in case of any extension of time of payment or
              renewal of any Notes or any of such other obligations, that same
              will be promptly paid in full when due or performed in accordance
              with the terms of the extension or renewal, whether at Stated
              Maturity, by acceleration or otherwise. Failing payment when due
              of any amount so

                                       F-1



              guaranteed or any performance so guaranteed for whatever reason,
              the Guarantors shall be jointly and severally obligated to pay the
              same immediately.

              (b)   The obligations hereunder shall be unconditional,
                    irrespective of the validity, regularity or enforceability
                    of the Notes or the Indenture, the absence of any action to
                    enforce the same, any waiver or consent by any Holder of the
                    Notes with respect to any provisions hereof or thereof, the
                    recovery of any judgment against the Company, any action to
                    enforce the same or any other circumstance which might
                    otherwise constitute a legal or equitable discharge or
                    defense of a guarantor.

              (c)   The following is hereby waived: diligence presentment,
                    demand of payment, filing of claims with a court in the
                    event of insolvency or bankruptcy of the Company, any right
                    to require a proceeding first against the Company, protest,
                    notice and all demands whatsoever.

              (d)   This Subsidiary Guarantee shall not be discharged except by
                    complete performance of the obligations contained in the
                    Notes and the Indenture, and the Guaranteeing Subsidiary
                    accepts all obligations of a Guarantor under the Indenture.

              (e)   If any Holder or the Trustee is required by any court or
                    otherwise to return to the Company, the Guarantors, or any
                    Custodian, Trustee, liquidator or other similar official
                    acting in relation to either the Company or the Guarantors,
                    any amount paid by either to the Trustee or such Holder,
                    this Subsidiary Guarantee, to the extent theretofore
                    discharged, shall be reinstated in full force and effect.

              (f)   The Guaranteeing Subsidiary shall not be entitled to any
                    right of subrogation in relation to the Holders in respect
                    of any obligations guaranteed hereby until payment in full
                    of all obligations guaranteed hereby.

              (g)   As between the Guarantors, on the one hand, and the Holders
                    and the Trustee, on the other hand, (x) the maturity of the
                    obligations guaranteed hereby may be accelerated as provided
                    in Article 6 of the Indenture for the purposes of this
                    Subsidiary Guarantee, notwithstanding any stay, injunction
                    or other prohibition preventing such acceleration in respect
                    of the obligations guaranteed hereby, and (y) in the event
                    of any declaration of acceleration of such obligations as
                    provided in Article 6 of the Indenture, such obligations
                    (whether or not due and payable) shall forthwith become due
                    and payable by the Guarantors for the purpose of this
                    Subsidiary Guarantee.

              (h)   The Guarantors shall have the right to seek contribution
                    from any non-paying Guarantor so long as the exercise of
                    such right does not impair the rights of the Holders under
                    the Guarantee.

              (i)   Pursuant to Section 11.03 of the Indenture, after giving
                    effect to any maximum amount and any other contingent and
                    fixed liabilities that are relevant under any applicable
                    Bankruptcy or fraudulent conveyance laws, and after giving
                    effect to any collections from, rights to receive
                    contribution from or payments made by or on behalf of any
                    other Guarantor in respect of the obligations of such other
                    Guarantor under Article 11 of the Indenture, this new
                    Subsidiary Guarantee shall

                                      F-2



                    be limited to the maximum amount permissible such that the
                    obligations of such Guarantor under this Subsidiary
                    Guarantee will not constitute a fraudulent transfer or
                    conveyance.

         3.   Execution and Delivery. Each Guaranteeing Subsidiary agrees to
execute the Subsidiary Guarantee as provided by Section 11.04 of the Indenture
and Exhibit E thereto and to recognize that the Subsidiary Guarantees shall
remain in full force and effect notwithstanding any failure to endorse on each
Note a notation of such Subsidiary Guarantee.

         4.   Guaranteeing Subsidiary May Consolidate, Etc. On Certain Terms.

              (a)   Except as otherwise provided in Section 11.06 of the
                    Indenture, the Guaranteeing Subsidiary may not sell or
                    otherwise dispose of all or substantially all of its assets
                    to, or consolidate with or merge with or into (whether or
                    not such Guarantor is the surviving Person), another Person,
                    other than the Company or another Guarantor, unless:

                    (i)   immediately after giving effect to such transaction,
              no Default or Event of Default exists; and

                    (ii)  either:

                          (1)   subject to Section 11.06 hereof, the Person
                    acquiring the property in any such sale or disposition or
                    the Person formed by or surviving any such consolidation or
                    merger assumes all the obligations of that Guarantor under
                    this Indenture, its Subsidiary Guarantee and the
                    Registration Rights Agreement pursuant to a supplemental
                    indenture satisfactory to the Trustee; or

                          (2)   the Net Proceeds of such sale or other
                    disposition are applied in accordance with the applicable
                    provisions of this Indenture.

              (b)   In case of any such consolidation, merger, sale or
                    conveyance and upon the assumption by the successor Person,
                    by supplemental indenture, executed and delivered to the
                    Trustee and satisfactory in form to the Trustee, of the
                    Subsidiary Guarantee endorsed upon the Notes and the due and
                    punctual performance of all of the covenants and conditions
                    of the Indenture to be performed by the Guarantor, such
                    successor Person shall succeed to and be substituted for the
                    Guarantor with the same effect as if it had been named
                    herein as a Guarantor. Such successor Person thereupon may
                    cause to be signed any or all of the Subsidiary Guarantees
                    to be endorsed upon all of the Notes issuable hereunder
                    which theretofore shall not have been signed by the Company
                    and delivered to the Trustee. All the Subsidiary Guarantees
                    so issued shall in all respects have the same legal rank and
                    benefit under the Indenture as the Subsidiary Guarantees
                    theretofore and thereafter issued in accordance with the
                    terms of the Indenture as though all of such Subsidiary
                    Guarantees had been issued at the date of the execution
                    hereof.

              (c)   Except as set forth in Articles 4 and 5 and Section 11.06 of
                    Article 11 of the Indenture, and notwithstanding clauses (a)
                    and (b) above, nothing contained in the Indenture or in any
                    of the Notes shall prevent any consolidation or merger of a
                    Guarantor with or into the Company or another Guarantor, or
                    shall prevent any

                                      F-3



                    sale or conveyance of the property of a Guarantor as an
                    entirety or substantially as an entirety to the Company or
                    another Guarantor.

         5.   Releases.

              (a)   In the event (i) of a sale or other disposition of all of
                    the assets of any Guarantor (including by way of merger or
                    consolidation) or a sale or other disposition of all to the
                    capital stock of any Guarantor, in each case to a Person
                    that is not (either before or after giving effect to such
                    transaction) a Subsidiary of the Company; provided that the
                    Net Proceeds of such sale or other disposition are applied
                    in accordance with the applicable provisions of the
                    Indenture, including, without limitation, Section 4.10
                    thereof, or (ii) the Company designates any Restricted
                    Subsidiary that is Guarantor as an Unrestricted Subsidiary
                    in accordance with the applicable provisions of the
                    Indenture, including, without limitation, Section 4.20
                    thereof, then such Guarantor (in the event of a sale or
                    other disposition, by way of merger, consolidation or
                    otherwise, of all of the capital stock of such Guarantor) or
                    the corporation acquiring the property (in the event of a
                    sale or other disposition of all or substantially all of the
                    assets of such Guarantor) will be released and relieved of
                    any obligations under its Subsidiary Guarantee; provided
                    that the Net Proceeds of such sale or other disposition are
                    applied in accordance with the applicable provisions of the
                    Indenture, including without limitation Section 4.10 of the
                    Indenture. Upon delivery by the Company to the Trustee of an
                    Officers' Certificate and an Opinion of Counsel to the
                    effect that such sale or other disposition was made by the
                    Company in accordance with the provisions of the Indenture,
                    including without limitation Section 4.10 of the Indenture,
                    the Trustee shall execute any documents reasonably required
                    in order to evidence the release of any Guarantor from its
                    obligations under its Subsidiary Guarantee.

              (b)   Any Guarantor not released from its obligations under its
                    Subsidiary Guarantee shall remain liable for the full amount
                    of principal of and interest on the Notes and for the other
                    obligations of any Guarantor under the Indenture as provided
                    in Article 10 of the Indenture.

         6.   No Recourse Against Others. No past, present or future director,
officer, employee, incorporator, stockholder or agent of the Guaranteeing
Subsidiary, as such, shall have any liability for any obligations of the Company
or any Guaranteeing Subsidiary under the Notes, any Subsidiary Guarantees, the
Indenture or this Supplemental Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder of the
Notes by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Notes. Such waiver may
not be effective to waive liabilities under the federal securities laws and it
is the view of the SEC that such a waiver is against public policy.

         7.   Governing Law. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL
GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE WITHOUT GIVING EFFECT
TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION
OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

         9.   Counterparts. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.

                                      F-4



         10.  Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.

         11.  The Trustee. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing Subsidiary and the Company.

                                      F-5



         IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.

         Dated:  _______________, ____

                                  [Guaranteeing Subsidiary]

                                  By:  _______________________________
                                  Name:
                                  Title:

                                  LBI MEDIA, INC.

                                  By:  _______________________________
                                  Name:
                                  Title:


GUARANTORS:

                                  LIBERMAN TELEVISION OF HOUSTON, INC.
                                  KZJL LICENSE CORP.
                                  LIBERMAN TELEVISION, INC.
                                  KRCA TELEVISION, INC.
                                  KRCA LICENSE CORP.
                                  LIBERMAN BROADCASTING, INC.
                                  LBI RADIO LICENSE CORP.
                                  LIBERMAN BROADCASTING OF HOUSTON, INC.
                                  LIBERMAN BROADCASTING OF HOUSTON LICENSE CORP.
                                  EMPIRE BURBANK STUDIOS, INC.

                                  By: _______________________________
                                  Name:
                                  Title:

                                  U.S. BANK, N.A.
                                    as Trustee

                                    By: _______________________________
                                        Authorized Signatory

                                      F-6



                                   Schedule I

                             SCHEDULE OF GUARANTORS

         The following schedule lists each Guarantor under the Indenture as of
the Closing Date:

GUARANTORS:

LIBERMAN TELEVISION OF HOUSTON, INC.
KZJL LICENSE CORP.
LIBERMAN TELEVISION, INC.
KRCA TELEVISION, INC.
KRCA LICENSE CORP.
LIBERMAN BROADCASTING, INC.
LBI RADIO LICENSE CORP.
LIBERMAN BROADCASTING OF HOUSTON, INC.
LIBERMAN BROADCASTING OF HOUSTON LICENSE CORP.
EMPIRE BURBANK STUDIOS, INC.

                                      F-7

EX-4.4

                                                                     Exhibit 4.4

                                  $150,000,000

                                 LBI MEDIA, INC.

                   10 1/8% Senior Subordinated Notes due 2012

                          REGISTRATION RIGHTS AGREEMENT

                                                                    July 9, 2002

Credit Suisse First Boston Corporation
UBS Warburg LLC
Banc of America Securities LLC
CIBC World Markets Corp.
Fleet Securities, Inc.
c/o Credit Suisse First Boston Corporation
    Eleven Madison Avenue
    New York, New York 10010-3629

Dear Sirs:

       LBI Media, Inc., a California corporation (formerly known as LBI Holdings
II, Inc.) (the "Issuer"), proposes to issue and sell to Credit Suisse First
Boston Corporation, UBS Warburg LLC, Banc of America Securities LLC, CIBC World
Markets Corp. and Fleet Securities, Inc. (collectively, the "Initial
Purchasers"), upon the terms set forth in a purchase agreement dated June 28,
2002 (the "Purchase Agreement"), $150,000,000 aggregate principal amount of its
10 1/8% Senior Subordinated Notes due 2012 (the "Initial Securities") to be
guaranteed (the "Guarantees" and, together with the Initial Securities, the
"Offered Securities") by Liberman Television of Houston, Inc., a California
corporation, KZJL License Corp., a California corporation, Liberman Television,
Inc., a California corporation, KRCA Television, Inc., a California corporation,
KRCA License Corp., a California corporation, Liberman Broadcasting, Inc., a
California corporation, LBI Radio License Corp., a California corporation,
Liberman Broadcasting of Houston, Inc., a California corporation, Liberman
Broadcasting of Houston License Corp., a California corporation and Empire
Burbank Studios, Inc., a California corporation (each, a "Guarantor" and
together, the "Guarantors"). The Guarantors and the Issuer are collectively
referred to herein as the "Company". The Offered Securities will be issued
pursuant to an Indenture, dated as of July 9, 2002 (the "Indenture"), among the
Company, the Guarantors named therein and U.S. Bank, N.A., a national banking
association, as trustee (the "Trustee"). As an inducement to the Initial
Purchasers to enter into the Purchase Agreement, the Company agrees with the
Initial Purchasers, for the benefit of the Initial Purchasers and the holders of
the Securities (as defined below) (collectively the "Holders"), as follows:

       1. Registered Exchange Offer. Unless not permitted by applicable law
(after the Company has complied with the ultimate paragraph of this Section 1),
the Company shall prepare and, on or prior to 90 days (such 90th day being a
"Filing Deadline") after the date on which the Initial Purchasers purchase the
Offered Securities pursuant to the Purchase Agreement (the "Closing Date"), file
with the Securities and Exchange Commission (the "Commission") a registration
statement (the "Exchange Offer Registration Statement") on an appropriate form
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to a proposed offer (the "Exchange Offer") to the Holders of Transfer
Restricted Securities (as defined in Section 6 hereof), who are not prohibited
by any law or policy of the Commission from participating in the Exchange Offer,
to issue and deliver to such Holders, in exchange for the Offered Securities
(except that the Exchange Securities will not contain terms with respect to
transfer restrictions or Liquidated Damages upon a Registration Default (as each
term is defined in Section 6(a)) a



like aggregate principal amount of debt securities of the Company, and
Guarantees of the Guarantors, issued under the Indenture, identical in all
material respects to the Offered Securities and registered under the Securities
Act (the "Exchange Securities"). The Company shall (i) use its best efforts to
have such Exchange Offer Registration Statement declared effective by the
Commission under the Securities Act on or prior to 360 days after the Closing
Date and (ii) unless the Exchange Offer would not be permitted by applicable law
or Commission policy, the Company will, following the declaration of the
effectiveness of the Exchange Offer Registration Statement (a) commence the
Exchange Offer and (b) use its best efforts to issue, on or prior to 30 Business
Days after the date on which the Exchange Offer Registration Statement was
declared effective by the Commission (the "Consummation Deadline"), Exchange
Securities, in exchange for all Offered Securities tendered prior thereto in the
Exchange Offer. "Business Day" shall mean any day other than a Saturday, Sunday,
or a day on which banking institutions in New York, New York are required by
law, regulation or executive order to remain closed.

       Following the declaration of the effectiveness of the Exchange Offer
Registration Statement, the Company shall promptly commence the Exchange Offer,
it being the objective of such Exchange Offer to enable each Holder of Transfer
Restricted Securities electing to exchange the Offered Securities for Exchange
Securities (assuming that such Holder is not an affiliate of the Company within
the meaning of the Securities Act, acquires the Exchange Securities in the
ordinary course of such Holder's business and has no arrangements with any
person to participate in the distribution of the Exchange Securities and is not
prohibited by any law or policy of the Commission from participating in the
Exchange Offer) to trade such Exchange Securities from and after their receipt
without any limitations or restrictions under the Securities Act and without
material restrictions under the securities laws of the several states of the
United States.

       The Company acknowledges that, pursuant to current interpretations by the
Commission's staff of Section 5 of the Securities Act, in the absence of an
applicable exemption therefrom, (i) each Holder which is a broker-dealer
electing to exchange Offered Securities, acquired for its own account as a
result of market making activities or other trading activities, for Exchange
Securities (an "Exchanging Dealer"), is required to deliver a prospectus
containing the information set forth in (a) Annex A hereto on the cover, (b)
Annex B hereto in the "Exchange Offer Procedures" section and the "Purpose of
the Exchange Offer" section, and (c) Annex C hereto in the "Plan of
Distribution" section of such prospectus in connection with a sale of any such
Exchange Securities received by such Exchanging Dealer pursuant to the Exchange
Offer and (ii) an Initial Purchaser that elects to sell Securities (as defined
below) acquired in exchange for Offered Securities constituting any portion of
an unsold allotment, is required to deliver a prospectus containing the
information required by Items 507 or 508 of Regulation S-K under the Securities
Act, as applicable, in connection with such sale.

       The Company shall use its best efforts to keep the Exchange Offer
Registration Statement effective and to amend and supplement the prospectus
contained therein, in order to permit such prospectus to be lawfully delivered
by all persons subject to the prospectus delivery requirements of the Securities
Act for such period of time as such persons must comply with such requirements
in order to resell the Exchange Securities; provided, however, that (i) in the
case where such prospectus and any amendment or supplement thereto must be
delivered by an Exchanging Dealer or an Initial Purchaser, such period shall be
the lesser of 180 days and the date on which all Exchanging Dealers and the
Initial Purchasers have sold all Exchange Securities held by them (unless such
period is extended pursuant to Section 3(j) below) and (ii) the Company shall
make such prospectus and any amendment or supplement thereto available to any
broker-dealer for use in connection with any resale of any Exchange Securities
for a period of not less than 180 days after the consummation of the Exchange
Offer.

       If, upon consummation of the Exchange Offer, any Initial Purchaser holds
Offered Securities acquired by it as part of its initial distribution, the
Company, simultaneously with the delivery of the Exchange Securities pursuant to
the Exchange Offer, shall issue and deliver to such Initial Purchaser upon the
written request of such Initial Purchaser, in exchange (the "Private Exchange")
for the Offered Securities held by such Initial Purchaser, a like principal
amount of debt securities of the Company, and

                                       2



Guarantees of the Guarantors, issued under the Indenture and identical in all
material respects to the Offered Securities (the "Private Exchange Securities")
(except that the Private Exchange Securities may be subject to restrictions on
transfer and bear a legend to such effect.). The Offered Securities, the
Exchange Securities and the Private Exchange Securities are herein collectively
called the "Securities."

       In connection with the Exchange Offer, the Company shall:

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

              (b) keep the Exchange Offer open for not less than 30 days (or
       longer, if required by applicable law) after the date notice thereof is
       mailed to the Holders;

              (c) utilize the services of a depositary for the Exchange Offer
       with an address in the Borough of Manhattan, The City of New York, which
       may be the Trustee or an affiliate of the Trustee;

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

              (e) otherwise comply with all applicable laws.

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

              (x) accept for exchange all the Securities validly tendered and
       not withdrawn pursuant to the Exchange Offer and the Private Exchange;

              (y) deliver to the Trustee for cancellation all of the Offered
       Securities so accepted for exchange; and

              (z) cause the Trustee to authenticate and deliver promptly to each
       Holder of the Offered Securities, Exchange Securities or Private Exchange
       Securities, as the case may be, equal in principal amount to the Offered
       Securities of such Holder so accepted for exchange.

       The Indenture will provide that the Exchange Securities will not be
subject to the transfer restrictions set forth in the Indenture and that all the
Securities will vote and consent together on all matters as one class and that
none of the Securities will have the right to vote or consent as a class
separate from one another on any matter.

       Interest on each Exchange Security and Private Exchange Security issued
pursuant to the Exchange Offer and in the Private Exchange will accrue from the
last interest payment date on which interest was paid on the Offered Securities
surrendered in exchange therefor or, if no interest has been paid on the Offered
Securities, from the date of original issue of the Offered Securities.

       Each Holder participating in the Exchange Offer shall be required to
represent to the Company that at the time of the consummation of the Exchange
Offer (i) any Exchange Securities received by such Holder will be acquired in
the ordinary course of business, (ii) such Holder will have no arrangements or
understanding with any person to participate in the distribution of the
Securities or the Exchange Securities within the meaning of the Securities Act,
(iii) such Holder is not an "affiliate," as defined in Rule 405 of the
Securities Act, of the Company or if it is an affiliate, such Holder will comply
with the registration and prospectus delivery requirements of the Securities Act
to the extent applicable, (iv) if such Holder is not a

                                       3



broker-dealer, that it is not engaged in, and does not intend to engage in, the
distribution of the Exchange Securities, (v) if such Holder is a broker-dealer,
that it will receive Exchange Securities for its own account in exchange for
Offered Securities that were acquired as a result of market-making activities or
other trading activities and that it will be required to acknowledge that it
will deliver a prospectus in connection with any resale of such Exchange
Securities and (vi) such Holder has full power and authority to transfer the
Offered Securities in exchange for the Exchange Securities.

       Notwithstanding any other provisions hereof, the Company will ensure that
(i) any Exchange Offer Registration Statement and any amendment thereto and any
prospectus forming part thereof and any supplement thereto complies in all
material respects with the Securities Act and the rules and regulations
thereunder, (ii) any Exchange Offer Registration Statement and any amendment
thereto does not, when it becomes effective, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (iii) any prospectus
forming part of any Exchange Offer Registration Statement, and any supplement to
such prospectus, does not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.

       If following the date hereof there has been announced a change in
Commission policy with respect to exchange offers that in the reasonable opinion
of counsel to the Company raises a substantial question as to whether the
Exchange Offer is permitted by applicable federal law, the Company will seek a
no-action letter or other favorable decision from the Commission allowing the
Company to consummate the Exchange Offer. The Company will pursue the issuance
of such a decision to the Commission staff level. In connection with the
foregoing, the Company will take all such other actions as may be requested by
the Commission or otherwise required in connection with the issuance of such
decision, including without limitation (i) participating in telephonic
conferences with the Commission, (ii) delivering to the Commission staff an
analysis prepared by counsel to the Company setting forth the legal bases, if
any, upon which such counsel has concluded that the Exchange Offer should be
permitted and (iii) diligently pursuing a resolution (which need not be
favorable) by the Commission staff.

       2. Shelf Registration. If, (i) any changes in law or the applicable
interpretations of the Staff of the Commission do not permit the Company to
effect the Exchange Offer, or (ii) any holder of Transferred Restricted
Securities notifies the Issuer prior to the 20/th/ day following consummation of
the Exchange Offer that: (a) it is prohibited by law or Commission policy from
participating in the Exchange Offer; or (b) that it may not resell the Exchange
Securities acquired by it in the Exchange Offer to the public without delivering
a prospectus and the prospectus contained in the Exchange Offer Registration
Statement is not appropriate or available for resales; or (c) that it is a
broker-dealer and owns Securities acquired directly from the Company or an
affiliate of the Company, the Company shall take the following actions:

              (a) The Company will file a registration statement (the "Shelf
       Registration Statement" and, together with the Exchange Offer
       Registration Statement, the "Registration Statement") with the Commission
       and use its best efforts to (i) cause such filing to be made on or prior
       to 30 days after such filing obligation arises and (ii) cause the Shelf
       Registration Statement to be declared effective by the later of (x) 360
       days after the Closing Date or (y) 90 days after such obligation arises.
       The Shelf Registration Statement shall be filed on an appropriate form
       under the Securities Act relating to the offer and sale of the Transfer
       Restricted Securities by the Holders thereof from time to time in
       accordance with the methods of distribution set forth in the Shelf
       Registration Statement and Rule 415 under the Securities Act
       (hereinafter, the "Shelf Registration"); provided, however, that no
       Holder (other than an Initial Purchaser) shall be entitled to have the
       Securities held by it covered by such Shelf Registration Statement unless
       such Holder agrees in writing to be bound by all the provisions of this
       Agreement applicable to such Holder.

                                        4



              (b) The Company shall use its best efforts to keep the Shelf
       Registration Statement continuously effective in order to permit the
       prospectus included therein to be lawfully delivered by the Holders of
       the relevant Securities, for a period of two years (or for such longer
       period if extended pursuant to Section 3(j) below) from the date of its
       effectiveness or such shorter period that will terminate when all the
       Securities covered by the Shelf Registration Statement (i) have been sold
       pursuant thereto or (ii) are no longer restricted securities (as defined
       in Rule 144 under the Securities Act, or any successor rule thereof). The
       Company shall be deemed not to have used its best efforts to keep the
       Shelf Registration Statement effective during the requisite period if it
       voluntarily takes any action that would result in Holders of Securities
       covered thereby not being able to offer and sell such Securities during
       that period, unless such action is required by applicable law.

              (c) Notwithstanding any other provisions of this Agreement to the
       contrary, the Company shall cause the Shelf Registration Statement and
       the related prospectus and any amendment or supplement thereto, as of the
       effective date of the Shelf Registration Statement, amendment or
       supplement, (i) to comply in all material respects with the applicable
       requirements of the Securities Act and the rules and regulations of the
       Commission and (ii) not to contain any untrue statement of a material
       fact or omit to state a material fact required to be stated therein or
       necessary in order to make the statements therein, in light of the
       circumstances under which they were made, not misleading.

       3. Registration Procedures. In connection with any Shelf Registration
contemplated by Section 2 hereof and, to the extent applicable, any Exchange
Offer contemplated by Section 1 hereof, the following provisions shall apply:


              (a) The Company shall (i) furnish to each Initial Purchaser, prior
       to the filing thereof with the Commission, a copy of the Registration
       Statement and each amendment thereof and each supplement, if any, to the
       prospectus included therein and, in the event that an Initial Purchaser
       (with respect to any portion of an unsold allotment from the original
       offering) is participating in the Exchange Offer or the Shelf
       Registration Statement, the Company shall use its best efforts to reflect
       in each such document, when so filed with the Commission, such comments
       as such Initial Purchaser reasonably may propose; (ii) include the
       information set forth in Annex A hereto on the cover, in Annex B hereto
       in the "Exchange Offer Procedures" section and the "Purpose of the
       Exchange Offer" section and in Annex C hereto in the "Plan of
       Distribution" section of the prospectus forming a part of the Exchange
       Offer Registration Statement and include the information set forth in
       Annex D hereto in the Letter of Transmittal delivered pursuant to the
       Exchange Offer; (iii) if requested by an Initial Purchaser, include the
       information required by Items 507 or 508 of Regulation S-K under the
       Securities Act, as applicable, in the prospectus forming a part of the
       Exchange Offer Registration Statement; (iv) include within the prospectus
       contained in the Exchange Offer Registration Statement a section entitled
       "Plan of Distribution," reasonably acceptable to the Initial Purchasers,
       which shall contain a summary statement of the positions taken or
       policies made by the staff of the Commission with respect to the
       potential "underwriter" status of any broker-dealer that is the
       beneficial owner (as defined in Rule 13d-3 under the Securities Exchange
       Act of 1934, as amended (the "Exchange Act")) of Exchange Securities
       received by such broker-dealer in the Exchange Offer (a "Participating
       Broker-Dealer"), whether such positions or policies have been publicly
       disseminated by the staff of the Commission or such positions or
       policies, in the reasonable judgment of the Initial Purchasers based upon
       advice of counsel (which may be in-house counsel), represent the
       prevailing views of the staff of the Commission; and (v) in the case of a
       Shelf Registration Statement, include the names of the Holders who
       propose to sell Securities pursuant to the Shelf Registration Statement
       as selling securityholders.

                                        5



              (b) The Company shall notify the Initial Purchasers, the Holders
       of the Securities and any Participating Broker-Dealer from whom the
       Company has received prior written notice that it will be a Participating
       Broker-Dealer in the Exchange Offer and, if requested by any such Person,
       confirm such notice in writing (which notice pursuant to clauses (ii)-(v)
       hereof shall be accompanied by an instruction to suspend the use of the
       prospectus until the requisite changes have been made):


                     (i)   when the Registration Statement or any amendment
              thereto has been filed with the Commission and when the
              Registration Statement or any post-effective amendment thereto has
              become effective;

                     (ii)  of any request by the Commission for amendments or
              supplements to the Registration Statement or the prospectus
              included therein or for additional information;

                     (iii) of the issuance by the Commission of any stop order
              suspending the effectiveness of the Registration Statement or the
              initiation of any proceedings for that purpose;

                     (iv)  of the receipt by the Company or its legal counsel of
              any notification with respect to the suspension of the
              qualification of the Securities for sale in any jurisdiction or
              the initiation or threatening of any proceeding for such purpose;
              and

                     (v)   of the happening of any event that requires the
              Company to make changes in the Registration Statement or the
              prospectus in order that the Registration Statement or the
              prospectus does not contain an untrue statement of a material fact
              nor omit to state a material fact required to be stated therein or
              necessary to make the statements therein (in the case of the
              prospectus, in light of the circumstances under which they were
              made) not misleading.

              (c) The Company shall make every reasonable effort to obtain the
       withdrawal at the earliest possible time, of any order suspending the
       effectiveness of the Registration Statement.

              (d) The Company shall furnish to each Holder of Securities
       included within the coverage of the Shelf Registration, without charge,
       at least one copy of the Shelf Registration Statement and any
       post-effective amendment thereto, including financial statements and
       schedules, and, if the Holder so requests in writing, all exhibits
       thereto (including those, if any, incorporated by reference).

              (e) The Company shall deliver to each Exchanging Dealer and each
       Initial Purchaser, and to any other Holder who so requests, without
       charge, at least one copy of the Exchange Offer Registration Statement
       and any post-effective amendment thereto, including financial statements
       and schedules, and, if any Initial Purchaser or any such Holder requests,
       all exhibits thereto (including those incorporated by reference).

              (f) The Company shall, during the Shelf Registration Period,
       deliver to each Holder of Securities included within the coverage of the
       Shelf Registration, without charge, as many copies of the prospectus
       (including each preliminary prospectus) included in the Shelf
       Registration Statement and any amendment or supplement thereto as such
       person may reasonably request. The Company consents, subject to the
       provisions of this Agreement, to the use of the prospectus or any
       amendment or supplement thereto by each of the selling Holders of the
       Securities in connection with the offering and sale of the Securities
       covered by the prospectus, or any amendment or supplement thereto,
       included in the Shelf Registration Statement.

                                       6



              (g) The Company shall deliver to each Initial Purchaser, any
       Exchanging Dealer, any Participating Broker-Dealer and such other persons
       required to deliver a prospectus following the Exchange Offer, without
       charge, as many copies of the final prospectus included in the Exchange
       Offer Registration Statement and any amendment or supplement thereto as
       such persons may reasonably request. The Company consents, subject to the
       provisions of this Agreement, to the use of the prospectus or any
       amendment or supplement thereto by any Initial Purchaser, if necessary,
       any Participating Broker-Dealer and such other persons required to
       deliver a prospectus following the Exchange Offer in connection with the
       offering and sale of the Exchange Securities covered by the prospectus,
       or any amendment or supplement thereto, included in such Exchange Offer
       Registration Statement.

              (h) Prior to any public offering of the Securities pursuant to any
       Registration Statement, the Company shall register or qualify or
       cooperate with the Holders of the Securities included therein and their
       respective counsel in connection with the registration or qualification
       of the Securities for offer and sale under the securities or "blue sky"
       laws of such states of the United States as any Holder of the Securities
       reasonably requests in writing and do any and all other acts or things
       necessary or advisable to enable the offer and sale in such jurisdictions
       of the Securities covered by such Registration Statement; provided,
       however, that the Company shall not be required to (i) qualify generally
       to do business in any jurisdiction where it is not then so qualified,
       (ii) take any action which would subject it to general service of process
       or to taxation in any jurisdiction where it is not then so subject or
       (iii) subject itself to taxation in excess of a nominal dollar amount in
       any such jurisdiction where it is not then so subject.

              (i) The Company shall cooperate with the Holders of the Securities
       to facilitate the timely preparation and delivery of certificates
       representing the Securities to be sold pursuant to any Registration
       Statement free of any restrictive legends and in such denominations and
       registered in such names as the Holders may request a reasonable period
       of time prior to sales of the Securities pursuant to such Registration
       Statement.

              (j) Upon the occurrence of any event contemplated by paragraphs
       (ii) through (v) of Section 3(b) above during the period for which the
       Company is required to maintain an effective Registration Statement, the
       Company shall promptly prepare and file a post-effective amendment to the
       Registration Statement or a supplement to the related prospectus and any
       other required document so that, as thereafter delivered to Holders of
       the Securities or purchasers of Securities, the prospectus will not
       contain an untrue statement of a material fact or omit to state any
       material fact required to be stated therein or necessary to make the
       statements therein, in light of the circumstances under which they were
       made, not misleading. If the Company notifies the Initial Purchasers, the
       Holders of the Securities and any known Participating Broker-Dealer in
       accordance with paragraphs (ii) through (v) of Section 3(b) above to
       suspend the use of the prospectus until the requisite changes to the
       prospectus have been made, then the Initial Purchasers, the Holders of
       the Securities and any such Participating Broker-Dealers shall suspend
       use of such prospectus, and the period of effectiveness of the Shelf
       Registration Statement provided for in Section 2(b) above and the
       Exchange Offer Registration Statement provided for in Section 1 above
       shall each be extended by the number of days from and including the date
       of the giving of such notice to and including the date when the Initial
       Purchasers, the Holders of the Securities and any known Participating
       Broker-Dealer shall have received such amended or supplemented prospectus
       pursuant to this Section 3(j).

              (k) Not later than the effective date of the applicable
       Registration Statement, the Company will provide a CUSIP number for the
       Initial Securities, the Exchange Securities or the Private Exchange
       Securities, as the case may be, and provide the applicable trustee with
       printed certificates for the Offered Securities, the Exchange Securities
       or the Private Exchange Securities, as the case may be, in a form
       eligible for deposit with The Depository Trust Company.

                                      7



              (l) The Company will comply with all rules and regulations of the
       Commission to the extent and so long as they are applicable to the
       Exchange Offer or the Shelf Registration and will make generally
       available to its security holders (or otherwise provide in accordance
       with Section 11(a) of the Securities Act) an earnings statement
       satisfying the provisions of Section 11(a) of the Securities Act, no
       later than 45 days after the end of a 12-month period (or 90 days, if
       such period is a fiscal year) beginning with the first month of the
       Company's first fiscal quarter commencing after the effective date of the
       Registration Statement, which statement shall cover such 12-month period.

              (m) The Company shall cause the Indenture to be qualified under
       the Trust Indenture Act of 1939, as amended, in a timely manner and
       containing such changes, if any, as shall be necessary for such
       qualification. In the event that such qualification would require the
       appointment of a new trustee under the Indenture, the Company shall
       appoint a new trustee thereunder pursuant to the applicable provisions of
       the Indenture.

              (n) The Company may require each Holder of Securities to be sold
       pursuant to the Shelf Registration Statement to furnish to the Company
       such information regarding the Holder and the distribution of the
       Securities as the Company may from time to time reasonably require for
       inclusion in the Shelf Registration Statement, and the Company may
       exclude from such registration the Securities of any Holder that
       unreasonably fails to furnish such information within a reasonable time
       after receiving such request.

              (o) The Company shall enter into such customary agreements
       (including, if requested, an underwriting agreement in customary form)
       and take all such other action, if any, as any Holder of the Securities
       shall reasonably request in order to facilitate the disposition of the
       Securities pursuant to any Shelf Registration.

              (p) In the case of any Shelf Registration, the Company shall (i)
       make reasonably available for inspection by the Holders of the
       Securities, any underwriter participating in any disposition pursuant to
       the Shelf Registration Statement and any attorney, accountant or other
       agent retained by the Holders of the Securities or any such underwriter
       all relevant financial and other records, pertinent corporate documents
       and properties of the Company and (ii) cause the Company's officers,
       directors, employees, accountants and auditors to supply all relevant
       information reasonably requested by the Holders of the Securities or any
       such underwriter, attorney, accountant or agent in connection with the
       Shelf Registration Statement, in each case, as shall be reasonably
       necessary to enable such persons, to conduct a reasonable investigation
       within the meaning of Section 11 of the Securities Act; provided,
       however, that the foregoing inspection and information gathering shall be
       coordinated on behalf of the Initial Purchasers by you and on behalf of
       the other parties, by one counsel designated by and on behalf of such
       other parties as described in Section 4 hereof.

              (q) In the case of any Shelf Registration, the Company, if
       requested by any Holder of Securities covered thereby, shall cause (i)
       its counsel to deliver an opinion and updates thereof relating to the
       Securities in customary form addressed to such Holders and the managing
       underwriters, if any, thereof and dated, in the case of the initial
       opinion, the effective date of such Shelf Registration Statement (it
       being agreed that the matters to be covered by such opinion shall
       include, without limitation, the due incorporation and good standing of
       the Issuer and its subsidiaries; the qualification of the Issuer and its
       subsidiaries to transact business as foreign corporations; the due
       authorization, execution and delivery of the relevant agreement of the
       type referred to in Section 3(o) hereof; the due authorization,
       execution, authentication and issuance, and the validity and
       enforceability, of the applicable Securities; the absence of material
       legal or governmental proceedings involving the Issuer and its
       subsidiaries; the absence of governmental

                                       8



       approvals required to be obtained in connection with the Shelf
       Registration Statement, the offering and sale of the applicable
       Securities, or any agreement of the type referred to in Section 3(o)
       hereof; the compliance as to form of such Shelf Registration Statement
       and of the Indenture with the requirements of the Securities Act and the
       Trust Indenture Act, respectively; and, as of the date of the opinion and
       as of the effective date of the Shelf Registration Statement or most
       recent post-effective amendment thereto, as the case may be, the absence
       from such Shelf Registration Statement and the prospectus included
       therein, as then amended or supplemented, and from any documents
       incorporated by reference therein of an untrue statement of a material
       fact or the omission to state therein a material fact required to be
       stated therein or necessary to make the statements therein not misleading
       (in the case of any such documents, in the light of the circumstances
       existing at the time that such documents were filed with the Commission
       under the Exchange Act); (ii) its officers to execute and deliver all
       customary documents and certificates and updates thereof requested by any
       underwriters of the applicable Securities and (iii) its independent
       public accountants to provide to the selling Holders of the applicable
       Securities and any underwriter therefor a comfort letter in customary
       form and covering matters of the type customarily covered in comfort
       letters in connection with primary underwritten offerings, subject to
       receipt of appropriate documentation as contemplated, and only if
       permitted, by Statement of Auditing Standards No. 72.

              (r) In the case of the Exchange Offer, if requested by any Initial
       Purchaser or any known Participating Broker-Dealer, the Company shall
       cause (i) its counsel to deliver to such Initial Purchaser or such
       Participating Broker-Dealer a signed opinion in the form set forth in
       Section 6(c) of the Purchase Agreement with such changes as are customary
       in connection with the preparation of a Registration Statement and (ii)
       its independent public accountants to deliver to such Initial Purchaser
       or such Participating Broker-Dealer a comfort letter, in customary form,
       meeting the requirements as to the substance thereof as set forth in
       Section 6(a) and (f) of the Purchase Agreement, with appropriate date
       changes.

              (s) If an Exchange Offer or a Private Exchange is to be
       consummated, upon delivery of the Offered Securities by Holders to the
       Company (or to such other Person as directed by the Company) in exchange
       for the Exchange Securities or the Private Exchange Securities, as the
       case may be, the Company shall mark, or caused to be marked, on the
       Offered Securities so exchanged that such Offered Securities are being
       canceled in exchange for the Exchange Securities or the Private Exchange
       Securities, as the case may be; in no event shall the Offered Securities
       be marked as paid or otherwise satisfied.

              (t) The Company will use its best efforts to (a) if the Offered
       Securities have been rated prior to the initial sale of such Offered
       Securities, confirm such ratings will apply to the Securities covered by
       a Registration Statement, or (b) if the Offered Securities were not
       previously rated, cause the Securities covered by a Registration
       Statement to be rated with the appropriate rating agencies, if so
       requested by Holders of a majority in aggregate principal amount of
       Securities covered by such Registration Statement, or by the managing
       underwriters, if any.

              (u) In the event that any broker-dealer registered under the
       Exchange Act shall underwrite any Securities or participate as a member
       of an underwriting syndicate or selling group or "assist in the
       distribution" (within the meaning of the Conduct Rules (the "Rules") of
       the National Association of Securities Dealers, Inc. ("NASD")) thereof,
       whether as a Holder of such Securities or as an underwriter, a placement
       or sales agent or a broker or dealer in respect thereof, or otherwise,
       the Company will assist such broker-dealer in complying with the
       requirements of such Rules, including, without limitation, by (i) if such
       Rules, including Rule 2720, shall so require, engaging a "qualified
       independent underwriter" (as defined in Rule 2720) to participate in the
       preparation of the Registration Statement relating to such Securities, to
       exercise usual standards of due diligence in respect thereto and, if any
       portion of the offering contemplated by

                                       9



       such Registration Statement is an underwritten offering or is made
       through a placement or sales agent, to recommend the yield of such
       Securities, (ii) indemnifying any such qualified independent underwriter
       to the extent of the indemnification of underwriters provided in Section
       5 hereof and (iii) providing such information to such broker-dealer as
       may be required in order for such broker-dealer to comply with the
       requirements of the Rules.

              (v) The Company shall use its best efforts to take all other steps
       necessary to effect the registration of the Securities covered by a
       Registration Statement contemplated hereby.

       4. Registration Expenses. (a) All expenses incident to the Company's
performance of and compliance with this Agreement will be borne by the Company,
regardless of whether a Registration Statement is ever filed or becomes
effective, including without limitation;

              (i)   all registration and filing fees and expenses;

              (ii)  all fees and expenses of compliance with federal securities
       and state "blue sky" or securities laws;

              (iii) all expenses of printing (including printing certificates
       for the Securities to be issued in the Exchange Offer and the Private
       Exchange and printing of prospectuses), messenger and delivery services
       and telephone;

              (iv)  all fees and disbursements of counsel for the Company;

              (v)   all application and filing fees in connection with listing
       the Exchange Securities on a national securities exchange or automated
       quotation system pursuant to the requirements hereof; and

              (vi)  all fees and disbursements of independent certified public
       accountants of the Company (including the expenses of any special audit
       and comfort letters required by or incident to such performance).

The Company will bear its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expenses of any annual audit and the fees and expenses
of any person, including special experts, retained by the Company.

       (b) In connection with any Registration Statement required by this
Agreement, the Company will reimburse the Initial Purchasers and the Holders of
Transfer Restricted Securities who are tendering Offered Securities in the
Exchange Offer and/or selling or reselling Securities pursuant to the "Plan of
Distribution" contained in the Exchange Offer Registration Statement or the
Shelf Registration Statement, as applicable, for the reasonable fees and
disbursements of not more than one counsel, who shall be Latham & Watkins unless
another firm shall be chosen by the Holders of a majority in principal amount of
the Transfer Restricted Securities for whose benefit such Registration Statement
is being prepared.

       5. Indemnification. (a) The Company agrees to indemnify and hold harmless
each Holder of the Securities, any Participating Broker-Dealer and each person,
if any, who controls such Holder or such Participating Broker-Dealer within the
meaning of the Securities Act or the Exchange Act (each Holder, any
Participating Broker-Dealer and such controlling persons are referred to
collectively as the "Indemnified Parties") from and against any losses, claims,
damages or liabilities, joint or several, or any actions in respect thereof
(including, but not limited to, any losses, claims, damages, liabilities or
actions relating to purchases and sales of the Securities) to which each
Indemnified Party may become subject under the Securities Act, the Exchange Act
or otherwise, insofar as such losses, claims, damages, liabilities or actions
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact

                                       10



contained in a Registration Statement or prospectus or in any amendment or
supplement thereto or in any preliminary prospectus relating to a Shelf
Registration, or arise out of, or are based upon, the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and shall reimburse, as
incurred, the Indemnified Parties for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action in respect thereof; provided, however, that
(i) the Company shall not be liable in any such case to the extent that such
loss, claim, damage, liability or action arises out of or is based upon any
untrue statement or alleged untrue statement or omission or alleged omission
made in a Registration Statement or prospectus or in any amendment or supplement
thereto or in any preliminary prospectus relating to a Shelf Registration in
reliance upon and in conformity with written information pertaining to such
Holder and furnished to the Company by or on behalf of such Holder specifically
for inclusion therein and (ii) with respect to any untrue statement or omission
or alleged untrue statement or omission made in any preliminary prospectus
relating to a Shelf Registration Statement, the indemnity agreement contained in
this subsection (a) shall not inure to the benefit of any Holder or
Participating Broker-Dealer from whom the person asserting any such losses,
claims, damages or liabilities purchased the Securities concerned, to the extent
that a prospectus relating to such Securities was required to be delivered by
such Holder or Participating Broker-Dealer under the Securities Act in
connection with such purchase and any such loss, claim, damage or liability of
such Holder or Participating Broker-Dealer results from the fact that there was
not sent or given to such person, at or prior to the written confirmation of the
sale of such Securities to such person, a copy of the final prospectus if the
Company had previously furnished copies thereof to such Holder or Participating
Broker-Dealer; provided further, that this indemnity agreement will be in
addition to any liability which the Company may otherwise have to such
Indemnified Party. The Company shall also indemnify underwriters, their officers
and directors and each person who controls such underwriters within the meaning
of the Securities Act or the Exchange Act to the same extent as provided above
with respect to the indemnification of the Holders of the Securities if
requested by such Holders.

       (b) Each Holder of the Securities, severally and not jointly, will
indemnify and hold harmless the Company and each person, if any, who controls
the Company within the meaning of the Securities Act or the Exchange Act from
and against any losses, claims, damages or liabilities or any actions in respect
thereof, to which the Company or any such controlling person may become subject
under the Securities Act, the Exchange Act or otherwise, insofar as such losses,
claims, damages, liabilities or actions arise out of or are based upon (i) any
untrue statement or alleged untrue statement of a material fact contained in a
Registration Statement or prospectus or in any amendment or supplement thereto
or in any preliminary prospectus relating to a Shelf Registration, or (ii) arise
out of or are based upon the omission or alleged omission to state therein a
material fact necessary to make the statements therein not misleading, but in
each case only to the extent that the untrue statement or omission or alleged
untrue statement or omission was made in reliance upon and in conformity with
written information pertaining to such Holder and furnished to the Company by or
on behalf of such Holder specifically for inclusion therein; and, subject to the
limitation set forth immediately preceding this clause, shall reimburse, as
incurred, the Company for any legal or other expenses reasonably incurred by the
Company or any such controlling person in connection with investigating or
defending any loss, claim, damage, liability or action in respect thereof. This
indemnity agreement will be in addition to any liability which such Holder may
otherwise have to the Company or any of its controlling persons.

       (c) Promptly after receipt by an indemnified party under this Section 5
of notice of the commencement of any action or proceeding (including a
governmental investigation), such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under this Section 5,
notify the indemnifying party of the commencement thereof; but the omission so
to notify the indemnifying party will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above. In case any
such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with

                                       11



any other indemnifying party similarly notified, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, which consent shall not be
unreasonably withheld, be counsel to the indemnifying party), and after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof the indemnifying party will not be liable to such
indemnified party under this Section 5 for any legal or other expenses, other
than reasonable costs of investigation, subsequently incurred by such
indemnified party in connection with the defense thereof. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any claims
that are the subject matter of such action, and does not include a statement as
to or an admission of fault, culpability or a failure to act by or on behalf of
any indemnified party

         (d) If the indemnification provided for in this Section 5 is
unavailable or insufficient to hold harmless an indemnified party under
subsections (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to in
subsection (a) or (b) above (i) in such proportion as is appropriate to reflect
the relative benefits received by the indemnifying party or parties on the one
hand and the indemnified party on the other from the exchange of the Securities,
pursuant to the Exchange Offer, or (ii) if the allocation provided by the
foregoing clause (i) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the indemnifying party or parties on
the one hand and the indemnified party on the other in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof) as well as any other relevant
equitable considerations. The relative fault of the parties shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company on the one hand or
such Holder or such other indemnified party, as the case may be, on the other,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid by
an indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim which is
the subject of this subsection (d). Notwithstanding any other provision of this
Section 5, the Holders of the Securities shall not be required to contribute any
amount in excess of the amount by which the net proceeds received by such
Holders from the sale of the Securities pursuant to a Registration Statement
exceeds the amount of damages which such Holders have otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For purposes
of this Section 5(d), each person, if any, who controls such indemnified party
within the meaning of the Securities Act or the Exchange Act shall have the same
rights to contribution as such indemnified party and each person, if any, who
controls the Company within the meaning of the Securities Act or the Exchange
Act shall have the same rights to contribution as the Company.

       (e) The agreements contained in this Section 5 shall survive the sale of
the Securities pursuant to a Registration Statement and shall remain in full
force and effect, regardless of any termination or cancellation of this
Agreement or any investigation made by or on behalf of any indemnified party.

       6. Liquidated Damages Under Certain Circumstances. (a) Liquidated damages
(the "Liquidated Damages") with respect to the Securities shall be assessed as
follows if any of the following events occur (each such event in clauses (i)
through (iv) below being herein called a "Registration Default"):

                                       12



       (i)   any Registration Statement required by this Agreement is not filed
             with the Commission on or prior to the date specified for filing;

       (ii)  any Registration Statement required by this Agreement is not
             declared effective by the Commission on or prior to the date
             specified for such effectiveness;

       (iii) the Exchange Offer has not been consummated on or prior to the
             Consummation Deadline; or

       (iv)  any Registration Statement required by this Agreement has been
             declared effective by the Commission but (A) such Registration
             Statement thereafter ceases to be effective or (B) such
             Registration Statement or the related prospectus ceases to be
             usable in connection with resales of Transfer Restricted
             Securities during the periods specified herein.

Each of the foregoing will constitute a Registration Default whatever the reason
for any such event and whether it is voluntary or involuntary or is beyond the
control of the Company or pursuant to operation of law or as a result of any
action or inaction by the Commission.

       The Company shall pay Liquidated Damages to each Holder in the event of a
Registration Default. Liquidated Damages shall accrue on the Securities from and
including the date on which any such Registration Default shall occur to, but
excluding, the date on which all such Registration Defaults have been cured, in
an amount equal to $.05 per week per $1,000 principal amount of Initial
Securities for the first 90-day period immediately following the occurrence of
such Registration Default and shall increase by an additional $.05 per week per
$1,000 principal amount of Initial Securities with respect to each subsequent
90-day period until all Registration Defaults have been cured, up to a maximum
amount of $.20 per week per $1,000 principal amount of Initial Securities.

       Notwithstanding the foregoing (1) the amount of Liquidated Damages
payable shall not increase because more than one Registration Default has
occurred and is pending and (2) a Holder of Offered Securities or Exchange
Securities who is not entitled to the benefits of a shelf Registration Statement
shall not be entitled to Liquidated Damages with respect to a Registration
Default that pertains to such Shelf Registration Statement.

       (b) A Registration Default referred to in Section 6(a)(iv) hereof shall
be deemed not to have occurred and be continuing in relation to a Shelf
Registration Statement or the related prospectus if (i) such Registration
Default has occurred solely as a result of (x) the filing of a post-effective
amendment to such Shelf Registration Statement to incorporate annual audited
financial information with respect to the Company where such post-effective
amendment is not yet effective and needs to be declared effective to permit
Holders to use the related prospectus or (y) other material events, with respect
to the Company that would need to be described in such Shelf Registration
Statement or the related prospectus and (ii) in the case of clause (y), the
Company is proceeding promptly and in good faith to amend or supplement such
Shelf Registration Statement and related prospectus to describe such events;
provided, however, that in any case if such Registration Default occurs for a
continuous period in excess of 30 days, Liquidated Damages shall be payable in
accordance with the above paragraph from the day such Registration Default
occurs until such Registration Default is cured.

       (c) Any amounts of Liquidated Damages due pursuant to Section 6(a) will
be payable in cash on the regular interest payment dates with respect to the
Securities.

       (d) "Transfer Restricted Securities" means each Security until (i) the
date on which such Security has been exchanged by a person other than a
broker-dealer for a freely transferable Exchange Security in the Exchange Offer,
(ii) following the exchange by a broker-dealer in the Exchange Offer of an

                                       13



Initial Security for an Exchange Note, the date on which such Exchange Note is
sold to a purchaser who receives from such broker-dealer on or prior to the date
of such sale a copy of the prospectus contained in the Exchange Offer
Registration Statement, (iii) the date on which such Security has been
effectively registered under the Securities Act and disposed of in accordance
with the Shelf Registration Statement or (iv) the date on which such Security is
distributed to the public pursuant to Rule 144 under the Securities Act or is
saleable pursuant to Rule 144(k) under the Securities Act.

       7. Rules 144 and 144A. The Company shall use its best efforts, upon the
request of any Holder of Securities, to make publicly available any information
so long as necessary to permit sales of their securities pursuant to Rules 144
and 144A. The Company covenants that it will take such further action as any
Holder of Securities may reasonably request, all to the extent required from
time to time to enable such Holder to sell Securities without registration under
the Securities Act within the limitation of the exemptions provided by Rules 144
and 144A (including the requirements of Rule 144A(d)(4)). The Company will
provide a copy of this Agreement to prospective purchasers of Offered Securities
identified to the Company by the Initial Purchasers upon request. Upon the
request of any Holder of Offered Securities, the Company shall deliver to such
Holder a written statement as to whether it has complied with such requirements.
Notwithstanding the foregoing, nothing in this Section 7 shall be deemed to
require the Company to register any of its securities pursuant to the Exchange
Act.

       8. Underwritten Registrations. If any of the Transfer Restricted
Securities covered by any Shelf Registration are to be sold in an underwritten
offering, the investment banker or investment bankers and manager or managers
that will administer the offering will be selected by the Holders of a majority
in aggregate principal amount of such Transfer Restricted Securities to be
included in such offering.

       No person may participate in any underwritten registration hereunder
unless such person (i) agrees to sell such person's Transfer Restricted
Securities on the basis reasonably provided in any underwriting arrangements
approved by the persons entitled hereunder to approve such arrangements and (ii)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.

       9. Miscellaneous.

       (a) Remedies. The Company acknowledges and agrees that any failure by the
Company to comply with its obligations under Section 1 and 2 hereof may result
in material irreparable injury to the Initial Purchasers or the Holders for
which there is no adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the event of any such
failure, the Initial Purchasers or any Holder may obtain such relief as may be
required to specifically enforce the Company's obligations under Sections 1 and
2 hereof. The Company further agrees to waive the defense in any action for
specific performance that a remedy at law would be adequate.

       (b) No Inconsistent Agreements. The Company will not on or after the date
of this Agreement enter into any agreement with respect to its securities that
is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of the Company's securities under any
agreement in effect on the date hereof.

       (c) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, except by the Company and the written
consent of the Holders of a majority in principal amount of the Securities
affected by such amendment, modification, supplement, waiver or consents.

                                       14



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

               (1) if to a Holder of the Securities, at the most current address
given by such Holder to the Company.

               (2) if to the Initial Purchasers;

                        Credit Suisse First Boston Corporation
                        Eleven Madison Avenue
                        New York, NY 10010-3629
                        Fax No.: (212) 325-8278
                        Attention: Transactions Advisory Group

       with a copy to:

                        Latham & Watkins
                        633 West Fifth Street, Suite 4000
                        Los Angeles, CA 90071
                        Fax No: (213) 891-8763
                        Attention: Cynthia A. Rotell, Esq.

               (3)      if to the Company, at its address as follows:

                        LBI Media, Inc.
                        1845 West Empire Avenue
                        Burbank, CA 91504
                        Fax No: (818) 563-5722
                        Attention: Lenard Liberman

       with a copy to:

                        O'Melveny & Myers, LLP
                        400 South Hope Street
                        Los Angeles, CA 90071
                        Fax No: (213) 430-6407
                        Attention: John D. Hardy, Jr., Esq.

       All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; three business
days after being deposited in the mail, postage prepaid, if mailed; when receipt
is acknowledged by recipient's facsimile machine operator, if sent by facsimile
transmission; and on the day delivered, if sent by overnight air courier
guaranteeing next day delivery.

       (e) Third Party Beneficiaries. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company, on the one
hand, and the Initial Purchasers, on the other hand, and shall have the right to
enforce such agreements directly to the extent they may deem such enforcement
necessary or advisable to protect their rights or the rights of Holders
hereunder.

       (f) Successors and Assigns. This Agreement shall be binding upon the
Company and its successors and assigns. The Agreement shall not inure to the
benefit of, or be binding upon, a successor or assign of a Holder unless and to
the extent such successor or assign holds Securities.

                                       15



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

       (h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

       (i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS.

       (j) Severability. If any one or more of the provisions contained herein,
or the application thereof in any circumstance, is held invalid, illegal or
unenforceable, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions contained herein shall
not be affected or impaired thereby.

         (k) Securities Held by the Company. Whenever the consent or approval of
Holders of a specified percentage of principal amount of Securities is required
hereunder, Securities held by the Company or its affiliates (other than
subsequent Holders of Securities if such subsequent Holders are deemed to be
affiliates solely by reason of their holdings of such Securities) shall not be
counted in determining whether such consent or approval was given by the Holders
of such required percentage.

                            [Signature Page Follows]

                                       16



       If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Issuer a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the several Initial Purchasers, the Issuer and the Guarantors in
accordance with its terms.

                                 Very truly yours,

                                 LBI Media, Inc.


                                 By: /s/ Lenard Liberman
                                    -------------------------------------------
                                 Name:  Lenard Liberman
                                 Title: Executive Vice President

                                 Guarantors:

                                 LIBERMAN TELEVISION OF HOUSTON, INC.
                                 KZJL LICENSE CORP.
                                 LIBERMAN TELEVISION, INC.
                                 KRCA TELEVISION, INC.
                                 KRCA LICENSE CORP.
                                 LIBERMAN BROADCASTING, INC.
                                 LBI RADIO LICENSE CORP.
                                 LIBERMAN BROADCASTING OF HOUSTON, INC.
                                 LIBERMAN BROADCASTING OF HOUSTON LICENSE CORP.
                                 EMPIRE BURBANK STUDIOS, INC.


                                 By: /s/ Lenard Liberman
                                     ------------------------------------------
                                 Name:  Lenard Liberman
                                 Title: Executive Vice President of each of the
                                        entities listed above

                                      S-1



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

CREDIT SUISSE FIRST BOSTON CORPORATION

By:  /s/ Kent Savagian
   -----------------------------------
    Name:  Kent Savagian
    Title: Director

Acting on behalf of itself and as the Representative
of the several Initial Purchasers

                                      S-2



                                                                         ANNEX A

       Each broker-dealer that receives Exchange Securities for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Securities. 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 Exchange Securities received in exchange for Offered Securities
where such Offered Securities were acquired by such broker-dealer as a result of
market-making activities or other trading activities. The Company has agreed
that, for a period of 180 days after the Expiration Date (as defined herein), it
will make this Prospectus available to any broker-dealer for use in connection
with any such resale. See "Plan of Distribution."



                                                                         ANNEX B

       Each broker-dealer that receives Exchange Securities for its own account
in exchange for Offered Securities, where such Offered Securities were acquired
by such broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Securities. See "Plan of Distribution."



                                                                         ANNEX C

                              PLAN OF DISTRIBUTION

       Each broker-dealer that receives Exchange Securities for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Securities. 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 Exchange Securities received in
exchange for Initial Securities where such Offered Securities were acquired as a
result of market-making activities or other trading activities. The Company has
agreed that, for a period of 180 days after the Expiration Date, it will make
this prospectus, as amended or supplemented, available to any broker-dealer for
use in connection with any such resale. In addition, until __________, 200_, all
dealers effecting transactions in the Exchange Securities may be required to
deliver a prospectus.(1)

       The Company will not receive any proceeds from any sale of Exchange
Securities by broker-dealers. Exchange Securities received by broker-dealers for
their own account pursuant to 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 Exchange Securities or a
combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer or the purchasers of any such Exchange
Securities. Any broker-dealer that resells Exchange Securities that were
received by it for its own account pursuant to the Exchange Offer and any broker
or dealer that participates in a distribution of such Exchange Securities may be
deemed to be an "underwriter" within the meaning of the Securities Act and any
profit on any such resale of Exchange Securities and any commission or
concessions received by any such persons 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
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.

       For a period of 180 days after the Expiration Date the Company 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. The Company has agreed to pay all expenses
incident to the Exchange Offer (including the expenses of one counsel for the
Holders of the Securities) other than commissions or concessions of any brokers
or dealers and will indemnify the Holders of the Securities (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.

__________
/(1)/ In addition, the legend required by Item 502(e) of Regulation S-K will
appear on the back cover page of the Exchange Offer prospectus.



                                                                         ANNEX D

[_] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.

           Name:     __________________________________
           Address:  __________________________________



If the undersigned is not a broker-dealer, the undersigned represents that it is
not engaged in, and does not intend to engage in, a distribution of Exchange
Securities. If the undersigned is a broker-dealer that will receive Exchange
Securities for its own account in exchange for Offered Securities that were
acquired as a result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus in connection with any resale of
such Exchange Securities; 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.

EX-10.1

                                                                    Exhibit 10.1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

                              AMENDED AND RESTATED

                                CREDIT AGREEMENT

                                   dated as of

                                  July 9, 2002

                                      among

                                LBI MEDIA, INC.,

                          THE GUARANTORS PARTY HERETO,

                            THE LENDERS PARTY HERETO,

                              FLEET NATIONAL BANK,

                            as Administrative Agent,

                             FLEET SECURITIES, INC.,

                              as Sole Lead Arranger

                      GENERAL ELECTRIC CAPITAL CORPORATION

                                       and

                                U.S. BANK, N.A.,

                           as Co- Syndication Agents,

                                       and

                        CIT LENDING SERVICES CORPORATION

                                       and

                                 SUNTRUST BANK,

                           as Co-Documentation Agents

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



                               TABLE OF CONTENTS



                                                                                      Page
                                                                                      
Article 1       Definitions ..........................................................   1
         1.1    Defined Terms ........................................................   1
         1.2    Classification of Loans and Borrowings ...............................  37
         1.3    Terms Generally ......................................................  37
         1.4    Accounting Terms; GAAP ...............................................  38

Article 2       The Credits ..........................................................  39

         2.1    Revolving Credit Commitments .........................................  39
         2.2    Loans and Borrowings .................................................  41
         2.3    Requests for Borrowings ..............................................  41
         2.4    Letters of Credit ....................................................  43
         2.5    Funding of Borrowings ................................................  47
         2.6    Interest Elections ...................................................  48
         2.7    Termination and Reduction of Commitments .............................  49
         2.8    Mitigation Obligations; Replacement of Lenders .......................  51
         2.9    Repayment of Loans; Evidence of Debt .................................  52
         2.10   Prepayment of Loans ..................................................  53
         2.11   Fees .................................................................  56
         2.12   Interest .............................................................  58
         2.13   Alternate Rate of Interest ...........................................  59
         2.14   Increased Costs ......................................................  59
         2.15   Break Funding Payments ...............................................  60
         2.16   Taxes ................................................................  61
         2.17   Payments Generally: Pro Rata Treatment; Sharing of Set-Offs ..........  62

Article 3       Guarantee by Guarantors ..............................................  64

         3.1    The Guarantee ........................................................  64
         3.2    Obligations Unconditional ............................................  65
         3.3    Reinstatement ........................................................  65
         3.4    Subrogation ..........................................................  66
         3.5    Remedies .............................................................  66


                                      -i-



                               TABLE OF CONTENTS

                                  (continued)



                                                                             Page
                                                                            
         3.6    Continuing Guarantee ........................................  66
         3.7    Rights of Contribution ......................................  66
         3.8    General Limitation on Guarantee Obligations .................  67
         3.9    Waivers .....................................................  67

Article 4       Representations and Warranties ..............................  68

         4.1    Organization; Powers ........................................  68
         4.2    Authorization; Enforceability ...............................  68
         4.3    Governmental Approvals; No Conflicts ........................  68
         4.4    Financial Condition; No Material Adverse Change .............  69
         4.5    Properties ..................................................  70
         4.6    Litigation and Environmental Matters ........................  71
         4.7    Compliance with Laws and Agreements .........................  71
         4.8    Investment and Holding Company Status .......................  71
         4.9    Taxes .......................................................  71
         4.10   ERISA .......................................................  72
         4.11   Disclosure ..................................................  72
         4.12   Ownership and Capitalization ................................  72
         4.13   Subsidiaries ................................................  72
         4.14   Material Indebtedness, Liens and Agreements .................  73
         4.15   Permits and Licenses ........................................  74
         4.16   Federal Reserve Regulations .................................  74
         4.17   Burdensome Restrictions .....................................  75
         4.18   Force Majeure ...............................................  75
         4.19   Labor and Employment Matters. ...............................  75
         4.20   Subchapter S Election and QSSS Election .....................  76
         4.21   Senior Indebtedness .........................................  76

Article 5       Conditions ..................................................  76

         5.1    Effective Time ..............................................  76
         5.2    Each Extension of Credit ....................................  83


                                      -ii-



                               TABLE OF CONTENTS

                                  (continued)




                                                                                            Page
                                                                                           
         5.3    Consummation of Acquisitions ..............................................   84

Article 6       Affirmative Covenants .....................................................   85

         6.1    Financial Statements and Other Information ................................   85
         6.2    Notices of Material Events ................................................   87
         6.3    Existence; Conduct of Business ............................................   88
         6.4    Payment of Obligations ....................................................   88
         6.5    Maintenance of Properties; Insurance ......................................   88
         6.6    Books and Records; Inspection Rights ......................................   89
         6.7    Fiscal Year ...............................................................   89
         6.8    Compliance with Laws, Maintenance of FCC Licenses .........................   89
         6.9    Use of Proceeds ...........................................................   89
         6.10   Certain Obligations Respecting Guarantors and Collateral Security .........   90
         6.11   ERISA .....................................................................   91
         6.12   Environmental Matters; Reporting ..........................................   91
         6.13   Conforming Leasehold Interests; Matters Relating to Real Property
                Collateral ................................................................   92
         6.14   Hedging Agreements ........................................................   94
         6.15   Post-Closing Obligations ..................................................   94

Article 7       Negative Covenants ........................................................   95

         7.1    Indebtedness ..............................................................   95
         7.2    Liens .....................................................................   96
         7.3    Contingent Liabilities ....................................................   98
         7.4    Fundamental Changes; Asset Sales ..........................................   98
         7.5    Investments; Hedging Agreements ...........................................  103
         7.6    Restricted Junior Payments ................................................  106
         7.7    Transactions with Affiliates ..............................................  107
         7.8    Restrictive Agreements ....................................................  107
         7.9    Sale-Leaseback Transactions ...............................................  108
         7.10   Certain Financial Covenants ...............................................  108


                                     -iii-



                               TABLE OF CONTENTS

                                  (continued)




                                                                                        Page
                                                                                      
         7.11   Lines of Business; Restrictions on the Borrower .......................  109
         7.12   Subordinated Indebtedness .............................................  110
         7.13   Modifications of Certain Documents ....................................  110
         7.14   Empire Burbank ........................................................  110
         7.15   Holding Company Restrictions ..........................................  111
         7.16   License Subsidiaries ..................................................  112

Article 8       Events of Default .....................................................  113

         8.1    Events of Default .....................................................  113

Article 9       The Administrative Agent ..............................................  117

         9.1    Appointment and Authorization .........................................  117
         9.2    Administrative Agent's Rights as Lender ...............................  117
         9.3    Duties As Expressly Stated ............................................  117
         9.4    Reliance By Administrative Agent ......................................  118
         9.5    Action Through Sub-Agents .............................................  119
         9.6    Resignation of Administrative Agent and Appointment of Successor
                Administrative Agent ..................................................  119
         9.7    Lenders' Independent Decisions ........................................  119
         9.8    Indemnification .......................................................  120
         9.9    Consents Under Other Loan Documents ...................................  120
         9.10   The Agents ............................................................  120

Article 10      Miscellaneous .........................................................  120

         10.1   Notices ...............................................................  120
         10.2   Waivers; Amendments ...................................................  121
         10.3   Expenses; Indemnity; Damage Waiver ....................................  123
         10.4   Successors and Assigns ................................................  124
         10.5   Survival ..............................................................  128
         10.6   Counterparts; Integration; References to Agreement; Effectiveness .....  128
         10.7   Severability ..........................................................  128
         10.8   Right of Setoff .......................................................  128


                                      -iv-



                                TABLE OF CONTENTS

                                   (continued)



                                                                                     Page
                                                                                   
         10.9   Governing Law; Jurisdiction; Consent to Service of Process .........  129
         10.10  WAIVER OF JURY TRIAL ...............................................  129
         10.11  Headings ...........................................................  130
         10.12  Release of Collateral and Guarantees ...............................  130
         10.13  Confidentiality ....................................................  130
         10.14  Continued Effectiveness; No Novation ...............................  131


                                      -v-



                              SCHEDULES & EXHIBITS

Schedule 2.1     List of Lenders and Revolving Credit Commitments
Schedule 4.3     Governmental Approval
Schedule 4.4     Financial Condition; No Material Adverse Change
Schedule 4.5     Properties
Schedule 4.6     Litigation and Environmental Matters
Schedule 4.7     Compliance with Laws and Agreements
Schedule 4.9     Taxes
Schedule 4.11    Management Structure
Schedule 4.12    Organization; Capitalization; Subsidiaries
Schedule 4.13    Subsidiaries
Schedule 4.14    Material Indebtedness, Liens and Agreements
Schedule 4.15    FCC Licenses
Schedule 4.19    Labor and Employment Matters
Schedule 7.2(b)  Permitted Liens
Schedule 7.7     Transactions with Affiliates
Schedule 7.8     Restrictive Agreements

Exhibit A        Form of Revolving Credit Note
Exhibit B        Form of Amended and Restated Security Agreement/
                 Schedule I - Perfection Certificate
Exhibit C        Form of Confirmation of Pledge Agreement
Exhibit D-1      Form of Borrowing Request
Exhibit D-2      Form of Interest Election Request
Exhibit E        Form of Lender Joinder Agreement
Exhibit F        Form of Confirmation of Hazardous Materials Indemnity Agreement
Exhibit G        Forms of Solvency Certificate
Exhibit H        Form of Mortgage and Security Agreement
Exhibit I        Form of Leasehold Mortgage
Exhibit J-1      Form of Landlord Waiver and Consent
Exhibit J-2      Form of Licensor Consent
Exhibit K-1      Form of Opinion of O'Melveny & Myers LLP
Exhibit K-2      Form of Opinion of Gilchrist & Rutter
Exhibit K-3      Form of Opinion of Strasburger & Price
Exhibit L        Form of Opinion of FCC Counsel
Exhibit M        Form of Assignment and Acceptance
Exhibit N        Form of Compliance Certificate
Exhibit O        Form of Confirmation of Subordination Agreements
Exhibit P        Form of Control Agreement
Exhibit Q        Form of Existing Mortgage Amendment

                                      -vi-



                      AMENDED AND RESTATED CREDIT AGREEMENT

         AMENDED AND RESTATED CREDIT AGREEMENT dated as of July 9, 2002 (this
"Agreement"), among LBI MEDIA, INC. (formerly known as LBI Holdings, Inc.), THE
GUARANTORS PARTY HERETO, THE LENDERS PARTY HERETO, FLEET NATIONAL BANK, as
Administrative Agent, FLEET SECURITIES, INC., as Sole Lead Arranger, GENERAL
ELECTRIC CAPITAL CORPORATION and U.S. BANK, N.A., as Co-Syndication Agents, and
CIT LENDING SERVICES CORPORATION and SUNTRUST BANK, as Co-Documentation Agents.
This Agreement amends, restates and supersedes, in its entirety, the Credit
Agreement dated as of March 20, 2001 among the Borrower, the guarantors party
thereto, the lenders party thereto, the Administrative Agent, and Union Bank of
California, N.A., as Syndication Agent, and CIT Lending Services Corporation and
General Electric Capital Corporation, as Co-Documentation Agents (as amended
from time to time prior to the date hereof, the "Existing Credit Agreement").

         The parties hereto agree as follows:

                                    ARTICLE 1

                                   Definitions

         1.1 Defined Terms. As used in this Agreement, the following terms have
the meanings specified below:

         "Acquisition" means any transaction, or any series of related
transactions, consummated after the date hereof, by which (i) any Credit Party
acquires the business of, or all or substantially all of the assets of, any firm
or corporation which is not a Credit Party, or any division or station of such
firm or corporation, located in a specific geographic area or areas, whether
through purchase of assets, purchase of stock, merger or otherwise or (ii) any
Person that was not theretofore a Subsidiary of a Credit Party becomes a
Subsidiary of a Credit Party. Notwithstanding anything herein to the contrary,
no Relocation shall be deemed to be an Acquisition.

         "Acquisition Date" means, with respect to each of the El Dorado
Acquisitions, the date of the consummation of such Acquisition.

         "Additional Mortgage" has the meaning assigned to such term in Section
6.13(b)(i).

         "Additional Mortgage Policies" has the meaning assigned to such term in
Section 6.13(b)(vi).

         "Additional Mortgaged Property" has the meaning assigned to such term
in Section 6.13(b).

         "Adjusted Base Rate" means, for any day, a rate per annum equal to the
greater of (a) the Prime Rate in effect on such day, and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. Any change in the Adjusted
Base Rate due to a change in the Prime Rate or the



Federal Funds Effective Rate shall be effective from and including the effective
date of such change in the Prime Rate or the Federal Funds Effective Rate,
respectively.

         "Adjusted LIBO Rate" means, with respect to any LIBOR Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.

         "Administrative Agent" means Fleet National Bank in its capacity as
administrative agent for the Lenders hereunder and any successors appointed
pursuant to Section 9.6.

         "Administrative Questionnaire" means an Administrative Questionnaire in
a form supplied by the Administrative Agent.

         "Affiliate" means, with respect to a specified Person, another Person
that Controls or is Controlled by or is under common Control with the Person
specified. Notwithstanding the foregoing, (a) no individual shall be an
Affiliate solely by reason of his or her being a director, officer or employee
of any Credit Party and (b) none of the Credit Parties shall be Affiliates of
each other.

         "Agents" means the Administrative Agent, the Co-Syndication Agents and
the Co-Documentation Agents.


         "Alta" means Alta Communications VIII, L.P., Alta-Comm VIII S by S,
LLC, Alta Communications VIII-B, L.P., Alta VIII Associates, LLC, California
State Teachers' Retirement System, UnionBanCalequities, Inc. and BancBoston
Investments Inc., and their respective successors and assigns.

         "Alta Subordination Agreement" means the Subordination and
Intercreditor Agreement dated as of the Original Closing Date among Alta and the
Administrative Agent, as amended by the Holdings Amendment and confirmed by the
Confirmation of Subordination Agreements, as such agreement may hereafter be
further amended, supplemented or otherwise modified from time to time.

         "Applicable Margin" means, for any Type of Loans (i) for the Initial
Payment Period (as defined below):

                         Applicable Margin (% per annum)
                         -------------------------------

       Loans                     Base Rate Loans                LIBOR Loans
       -----                     ---------------                -----------

Revolving Credit Loans                1.750%                       3.000%
        and

                                       2



          (ii) for any Payment Period (as defined below) other than the Initial
     Payment Period, the respective rates indicated below for Loans of such Type
     opposite the applicable Total Leverage Ratio indicated below (or as
     provided in the final paragraph of this definition, for part of a Payment
     Period):

                         Applicable Margin (% per annum)
                         -------------------------------

                                              Revolving Credit Loans

                  Total Leverage Ratio         Base Rate       LIBOR
                  --------------------         ---------       -----
                                                 Loans         Loans
                                                 -----         -----
          Greater than or equal to 7.00 to 1     1.750%        3.000%

            Less than 7.00 to 1 and greater      1.500%        2.750%
               than or equal to 6.50 to 1
            Less than 6.50 to 1 and greater      1.250%        2.500%
               than or equal to 6.00 to 1
            Less than 6.00 to 1 and greater      1.000%        2.250%
               than or equal to 5.50 to 1
            Less than 5.50 to 1 and greater      0.750%        2.000%
               than or equal to 5.00 to 1
            Less than 5.00 to 1 and greater      0.500%        1.750%
               than or equal to 4.50 to 1
                   Less than 4.50 to 1           0.250%        1.500%

         For purposes hereof, a "Payment Period" means (i) initially, the period
commencing on the Closing Date to and including the third Business Day after the
date of delivery of the quarterly financial statements required by Section
6.1(b) for the fiscal quarter of the Borrower ended September 30, 2002 (the
"Initial Payment Period") and (ii) thereafter, the period commencing on the day
immediately succeeding the last day of the prior Payment Period to but not
including the third Business Day after the earlier of (x) the due date of the
next Compliance Certificate required to be delivered by the Borrower to the
Administrative Agent pursuant to Section 6.1(c) concurrently with the delivery
by the Borrower of the annual or any of the four quarterly financial statements
required by Sections 6.1(a) or 6.1(b), respectively, or (y) the date of the
actual receipt by the Administrative Agent of such Compliance Certificate.
Subject to and in accordance with the final paragraph of this definition, the
Applicable Margin shall be effective for each Payment Period (or in the
circumstances described in the final paragraph of this definition, such portion
of a Payment Period) whether or not such Payment Period coincides with an
Interest Period for LIBOR Borrowing.

         The Total Leverage Ratio for any Payment Period except the Initial
Payment Period shall be determined on the basis of the Compliance Certificate
required to be delivered to the Administrative Agent pursuant to Section 6.1(c)
concurrently with the delivery by the Borrower of the annual or quarterly
financial statements required by Sections 6.1(a) or 6.1(b), respectively,

                                       3



setting forth, among other things, a calculation of the Total Leverage Ratio as
at the last day of the fiscal quarter immediately preceding such Payment Period
(i.e. the Total Leverage Ratio set forth in the Compliance Certificate delivered
pursuant to Section 6.1(c) that is delivered together with the financial
statements for the fiscal quarter ended September 30, 2002 shall be used to
determine the Applicable Margin with respect to the first Payment Period that
follows the Initial Payment Period, the Total Leverage Ratio set forth in the
Compliance Certificate that is delivered together with the financial statements
for the fiscal quarter ended December 31, 2002 shall be used to determine the
Applicable Margin with respect to the second Payment Period that follows the
Initial Payment Period, and so forth); provided that upon delivery by the
Borrower of the Compliance Certificate concurrently with the delivery of the
annual financial statements required by Section 6.1(a), the Applicable Margin
shall be adjusted retroactively, as of the first day of the then current Payment
Period, based on the calculation of the Total Leverage Ratio pursuant to such
certificate and financial statements to the extent that the Total Leverage Ratio
so calculated differs from the Total Leverage Ratio calculated based on the
Compliance Certificate delivered concurrently with the quarterly financial
statements for the fourth fiscal quarter of the preceding fiscal year required
by Section 6.1(b). In the event of a retroactive adjustment in the determination
of the Applicable Margin in favor of the Borrower, the amount of interest
thereby refundable to the Borrower shall be applied on the date of such
retroactive adjustment, to prepay interest payable on the Loans on a pro rata
basis, thus permitting the Borrower to deduct such amount from their next
interest payment. If the retroactive adjustment is in favor of the Lenders, the
amount of interest due to the Lenders shall be paid in full to the
Administrative Agent within five (5) days after written notice of such
adjustment is provided to the Borrower. Notwithstanding the foregoing, the
Borrower shall include a request for any downward adjustment of the Applicable
Margin with, or as part of, the Compliance Certificate concurrently with the
delivery by the Borrower of the annual financial statements required by Section
6.1(a) and, in any event, the Administrative Agent and the Lenders shall not be
required to make any downward adjustment until a request of the Borrower shall
have been received and unless such request is received within three months after
the date of delivery of such Compliance Certificate.

         "Applicable Percentage" means (a) with respect to any Revolving Credit
Lender for purposes of the definition of LC Exposure and of Section 2.4, the
percentage of the total Revolving Credit Commitments represented by such
Lender's Revolving Credit Commitment, and (b) with respect to any Lender in
respect of any indemnity claim under Section 10.3 arising out of an action or
omission of the Administrative Agent under this Agreement, the percentage of the
total Commitments or, in the event the Commitments are terminated, Loans
hereunder represented by the aggregate amount of such Lender's Commitment or, in
the event the Commitments are terminated, Loans hereunder.

         "Applicable Recipient" has the meaning set forth in Section 2.17.

         "Approved Fund" means, with respect to any Lender that is a fund that
invests in commercial loans, any other fund that invests in commercial loans and
is managed or advised by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.

                                       4



         "Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 10.4), and accepted by the Administrative Agent, in the form
of Exhibit M.

         "Base Rate" when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Adjusted Base Rate.

         "Basic Documents" means the Loan Documents, the Holdings Amendment, the
Oaktree Redemption Agreement, the Intermediate Holdings Intercompany Note, the
Senior Subordinated Note Indenture, the Senior Subordinated Notes and the
documents relating thereto, the El Dorado Acquisitions Documents and the
Guajillo Acquisitions Documents.

         "Bering Property" means the 3-story office building comprising
approximately 29,000 square feet, together with the parking lot and other real
property with respect thereto, commonly known as 3000 Bering Drive, Houston,
Texas.

         "Board" means the Board of Governors of the Federal Reserve System of
the United States of America.

         "Borrower" means LBI Media, Inc. (formerly known as LBI Holdings II,
Inc.), a California corporation.

         "Borrower's knowledge" or any "Credit Party's knowledge" or any similar
phrase or words when used in connection with a statement, representation or
warranty means to the actual knowledge of Jose or Lenard Liberman, the Chief
Financial Officer of the Borrower or such Credit Party, as applicable, or any
responsible executive officer (as defined in Rule 3b-7 promulgated under the
Securities Exchange Act of 1934, as amended), of the Borrower or such Credit
Party, as applicable, after reasonable good faith inquiry made to ascertain the
accuracy of the statement, representation or warranty.

         "Borrowing" means Loans of the same Type, made, converted or continued
on the same date and, in the case of LIBOR Loans, as to which a single Interest
Period is in effect.

         "Borrowing Request" means a request for a Borrowing satisfying the
requirements of Section 2.3 and substantially in the form of Exhibit D-1 annexed
hereto.

         "Broadcast Stations" has the meaning assigned to such term in Section
4.15(b).

         "Burbank Office Property" means that certain real property located at
1845 Empire Avenue, Burbank,California 91504.

         "Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banks in Boston, Massachusetts, Los Angeles, California
or New York City are authorized or required by law to remain closed; provided
that, when used in connection with a LIBOR Loan, the term "Business Day" shall
also exclude any day on which banks are not open for dealings in U.S. dollar
deposits in the London interbank market.

                                       5



         "California Taxable Income" shall mean the taxable income of Holdings I
for any taxable year computed pursuant to Section 23802 (or any successor
provisions) of the California Revenue and Tax Code but calculated as if the
taxable year of Holdings I ended on the date with respect to which such taxable
income calculation is made, reduced, but not below zero, by the amount of any
Suspended Losses which are treated as incurred by Holdings I in, and allowed as
deductions on the tax returns of the Holdings I's stockholders for, such taxable
year.

         "Capital Expenditures" means, for any period, the sum for the Credit
Parties (determined on a consolidated basis without duplication in accordance
with GAAP) of the aggregate amount of expenditures (including the aggregate
amount of Capital Lease Obligations incurred during such period) made to acquire
or construct fixed assets, plant and equipment (including renewals, improvements
and replacements, but excluding expenditures for repairs that do not extend the
useful life of the asset) during such period computed in accordance with GAAP;
provided that such term shall not include (i) any such expenditures in
connection with any replacement or repair of Property affected by a Casualty
Event, (ii) any such expenditures in connection with a Relocation with the
exception of cash expenditures not subject to the reimbursement obligations of a
Person other than a Credit Party, (iii) for each broadcast station received in
any Voluntary Relocation, up to $4,000,000 in such expenditures but only to the
extent paid from the cash proceeds received in such Voluntary Relocation which
are used to upgrade or improve such broadcast station, (iv) for each broadcast
station received in any Involuntary Relocation, any such expenditures paid from
the cash proceeds received in such Involuntary Relocation which are used to
upgrade or improve such broadcast station or (v) the purchase price, any
broker's fees payable and any transaction costs incurred in connection with the
Clear Channel Acquisition, the Shop At Home Acquisition, the El Dorado
Acquisitions, the Guajillo Acquisitions or any other Acquisition permitted
hereunder.

         "Capital Lease Obligations" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP. Notwithstanding anything herein to the contrary, any obligations
under the Empire Burbank Lease shall not be Capital Lease Obligations.

         "Cash Equivalents" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government, (b) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one year
after such date; (ii) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof, in each case maturing within one year after such
date and having, at the time of the acquisition thereof, the highest rating
obtainable from either Standard & Poor's ("S&P") or Moody's Investors Service,
Inc. ("Moody's"); (iii) commercial paper maturing no more than one year from the
date of creation thereof and having, at the time of the acquisition thereof, a
rating of at least A-1 from S&P or at least P-1 from Moody's; (iv) certificates
of deposit or bankers' acceptances maturing within one year after such date and
issued or accepted by any Lender or by any commercial bank organized under the
laws of the United States of America or any state thereof or the District of

                                       6



Columbia that (1) is at least "adequately capitalized" (as defined in the
regulations of its primary Federal banking regulator) and (2) has Tier 1 capital
(as defined in such regulations) of not less than $100,000,000; and (v) shares
of any money market mutual fund that (1) has at least 95% of its assets invested
continuously in the types of investments referred to in clauses (i) and (ii)
above, (2) has net assets of not less than $500,000,000, and (3) has the highest
rating obtainable from either S&P or Moody's, or (c) other cash equivalent
investments agreed to from time to time between the Borrower and the
Administrative Agent.

         "Casualty Event" means, with respect to any Property of any Person, any
loss of or damage to, or any condemnation or other taking of, such Property for
which such Person or any of its Subsidiaries receives insurance proceeds, or
proceeds of a condemnation award or other compensation; provided that an
Involuntary Relocation shall not be a Casualty Event.

         "Change in Control" means (a) prior to the Intercompany Merger,
Intermediate Holdings shall cease to own, directly or indirectly, 100% of the
Borrower's outstanding capital stock and Total Voting Power, (b) prior to the
Intercompany Merger, Holdings I shall cease to own, directly or indirectly, 100%
of Intermediate Holdings' outstanding capital stock and Total Voting Power, (c)
after the Intercompany Merger, Holdings I shall cease to own, directly or
indirectly, 100% of the Borrower's outstanding capital stock and Total Voting
Power, (d) Jose and Lenard Liberman (together with their spouses, lineal
descendants or heirs and devisees and any trusts controlled by them) shall cease
to collectively own, directly or indirectly, more than 50% of (i) the economic
interests in the outstanding equity securities of Holdings I or (ii) the Total
Voting Power of Holdings I, (e) the Borrower no longer owns and controls,
directly or indirectly, 100% of the capital stock of each of Liberman
Broadcasting, Inc., Liberman Television Inc., Liberman Television of Houston,
Inc., Liberman Broadcasting of Houston, Inc., and any License Subsidiary, unless
one hundred percent (100%) or any portion of such entity's capital stock is
transferred in accordance with the terms and conditions of this Agreement, (f)
any Holding Company or the Borrower sells, leases, conveys, transfers, exchanges
or otherwise disposes of, in a single transaction or through a series of related
transactions, all of the FCC Licenses owned by such Holding Company, the
Borrower and the other Credit Parties to any Person other than any of the Credit
Parties or (g) the occurrence of any "Change of Control" as defined in any
Holdings Securities Purchase Documents or in the Senior Subordinated Note
Indenture.

         "Change in Law" means (a) the adoption of any law, rule or regulation
after the Closing Date, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
Closing Date or (c) compliance by any Lender or the Issuing Lender (or, for
purposes of Section 2.14(b), by any lending office of such Lender or by such
Lender's or the Issuing Lender's holding company, if any) with any request,
guideline, order, decree or directive (whether or not having the force of law)
of any Governmental Authority or the National Association of Insurance
Commissioners made or issued after the Closing Date.

         "Clear Channel Acquisition" means the acquisition by Liberman
Broadcasting of Houston, Inc. and Liberman Broadcasting of Houston License Corp.
from the Clear Channel Sellers of five (5) radio broadcast stations: KQUE-AM
located in Houston, Texas, KSEV-AM located in Tomball, Texas, KTJM-FM located in
Port Arthur, Texas, KJOJ-AM located in

                                       7



Conroe, Texas and KJOJ-FM located in Freeport, Texas for cash consideration not
in excess of $44,000,000.

         "Clear Channel Acquisition Documents" means the Asset Purchase
Agreement dated December 8, 2000 as amended by the First Amendment to Asset
Purchase Agreement dated as of March 13, 2001 and all related instruments,
agreements and other documents entered into by any Credit Party and any Clear
Channel Seller in connection therewith, in each case, as amended, supplemented
or modified in accordance with the restrictions of Section 7.13.

         "Clear Channel Sellers" means Capstar Radio Operating Company, Capstar
TX Limited Partnership, Clear Channel Broadcasting, Inc. and Clear Channel
Broadcasting Licenses, Inc.

         "Closing Date" means the date during which the Effective Time shall
occur.

         "Code" means the Internal Revenue Code of 1986, as amended from time to
time.

         "Collateral" means, collectively, all of the Property (including
capital stock and other equity interests) in which Liens are purported to be
granted pursuant to the Collateral Documents as security for all obligations of
the Credit Parties hereunder.

         "Collateral Documents" means the Security Agreement, the Pledge
Agreement, Alta Subordination Agreement, the Mortgages, the Existing Mortgage
Amendments, the Investor Subordination Agreement, the Liberman Subordination
Agreements, the Control Agreements and all other agreements, instruments or
documents delivered by any Credit Party or any shareholder of a Credit Party
pursuant to this Agreement or any of the other Loan Documents in order to grant
to the Administrative Agent, on behalf of the Lenders, a Lien on any real,
personal or mixed property of that Credit Party as security for any of the
obligations of the Credit Parties hereunder.

         "Commitments" means the Revolving Credit Commitments.

         "Commitment Fee Rate" has the meaning specified in Section 2.11.

         "Commitment Utilization Percentage" means, for any day, the ratio of
(a) the sum of (i) the principal amount of the Loans outstanding on such day
plus (ii) the face amount of Letters of Credit outstanding on such day to (b)
the aggregate amount of Revolving Credit Commitments for such day, expressed as
a percentage.

         "Communications Act" means the Communications Act of 1934, as amended.

         "Compliance Certificate" means a certificate duly executed by a
Financial Officer of the Borrower (required to be delivered pursuant to Section
6.1(c), 7.4(d)(ii), 7.5(a)(x)(2) or 7.6(c)), in substantially the form of
Exhibit N hereto, (i) certifying as to whether a Default has occurred and, if a
Default has occurred, specifying the details thereof and any action taken or
proposed to be taken with respect thereto, (ii) setting forth reasonably
detailed calculations demonstrating compliance with Section 7.10 (including, in
each case if applicable, a statement of the Total Leverage Ratio for purposes of
the definition of Applicable Margin and, for any Compliance Certificate
delivered with the financial statements required by Section 6.1(a), a request by
the

                                       8



Borrower for a retroactive adjustment to the Applicable Margin), and, if such
certificate is accompanying the annual financial statements required to be
delivered pursuant to Section 6.1(a), commencing with the delivery of the annual
financial statements for the fiscal year ending December 31, 2002, setting forth
a detailed calculation reasonably satisfactory to the Administrative Agent of
the amount of Excess Cash Flow for the Credit Parties' most recently completed
fiscal year for the purpose of Sections 7.5 and 7.6 and (iii) stating whether
there has occurred since the date of the audited financial statements referred
to in Section 4.4 any change in GAAP or in the application thereof which has or
could have an effect on the financial statements accompanying such certificate
and, if any such change has occurred, specifying the effect of such change on
the financial statements accompanying such certificate.

         "Confirmation of Hazardous Materials Indemnity Agreement" means the
Confirmation of Hazardous Materials Indemnity Agreement dated as of the date
hereof among the Administrative Agent and the Credit Parties, substantially in
the form of Exhibit F.

         "Confirmation of Pledge Agreement" means the Confirmation of Pledge
Agreement dated as of the date hereof among the Administrative Agent and the
Credit Parties, substantially in the form of Exhibit C.

         "Confirmation of Subordination Agreements" means the Confirmation of
Subordination Agreements dated as of the date hereof among Alta and the
Administrative Agent, substantially in the form of Exhibit O.

         "Conforming Leasehold Interest" means any leasehold interest as to
which the lessor has agreed in writing for the benefit of the Administrative
Agent (which writing has been delivered to the Administrative Agent), whether
under terms of the applicable lease or under the terms of a Landlord Waiver and
Consent, to the matters described in the "Landlord Waiver and Consent" attached
hereto as Exhibit J, which interest, if a subleasehold interest or
sub-subleasehold interest, is not subject to any contrary restrictions contained
in a superior lease or sublease.

         "Control" means the possession, directly or indirectly, through one or
more intermediaries, of the power to direct or cause the direction of the
management or policies of a Person, whether through the ability to exercise
voting power, by contract or otherwise. "Controlling" and "Controlled" have
meanings correlative thereto.

         "Control Agreement" means, with respect to any bank account of any
Credit Party except a bank account maintained with the Administrative Agent, a
Control Agreement, substantially in the form of Exhibit P, or such other form
that is satisfactory to the Administrative Agent in its reasonable discretion,
executed and delivered by such Credit Party, the depository institution at which
such account is maintained and the Administrative Agent at the Original Closing
Date or from time to time thereafter, as any such agreement may be amended,
supplemented or otherwise modified from time to time.

         "Credit Parties" means the Borrower and the Guarantors (except that
Empire Burbank will be a Guarantor but will not be deemed a Credit Party
hereunder).

         "Debt Service" means, for any period, the sum, for the Credit Parties
(determined on a consolidated basis without duplication in accordance with GAAP,
including without duplication

                                       9



of previous payments), of the following: (a) all regularly scheduled cash
principal payments, as such amounts may be adjusted from time to time by reason
of any prepayments, of any Total Debt (including principal payments, if any,
resulting from the Revolving Credit Commitment reductions under Section 2.7(b)
and the principal component of any payments in respect of Capital Lease
Obligations, but excluding any prepayments of the Loans) made during such period
plus (b) all Interest Expense for such period.

         "Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.

         "Disclosed Matters" means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 4.6.

         "Disposition" means any sale, sale-leaseback, assignment, conveyance,
exchange, long-term lease accorded sales treatment under GAAP, transfer or other
disposition (including by means of a merger, consolidation, amalgamation, joint
venture or other substantive combination) of any assets, business or property
(whether now owned or hereafter acquired) by any Credit Party to any Person
other than a Credit Party, including any Relocation but excluding (a) the
granting of Liens permitted hereunder and (b) any sale, assignment, transfer or
other disposition of (i) any property sold or disposed of in the ordinary course
of business and on ordinary business terms, (ii) any property no longer used or
useful in the business of the Credit Parties and (iii) any Collateral under and
as defined in the Collateral Documents pursuant to an exercise of remedies by
the Administrative Agent thereunder, (c) leasing of any property in the ordinary
course of business, (d) the sale or other disposition of any Excluded Asset, (e)
the sale of marketable securities, including "margin stock" within the meaning
of Regulation U, liquid investments and other financial instruments in
connection with the ordinary course cash management of the Credit Parties, (f)
forgiveness or cancellation by any Credit Party of any loan by such Credit Party
to any of its Affiliates and (g) other sale, assignment, transfer or other
disposition in the ordinary course of business.

         "Disposition Investment" means, with respect to any Disposition, any
promissory notes or other evidences of Indebtedness or Investments received by
any Credit Party in connection with such Disposition.

         "Dividend Limitation" shall mean, with respect to Holdings I, the sum
of: (i) the product of the Maximum Effective California Rate times Holdings I's
California Taxable Income except that the product in this clause (i) shall be
zero (0) in the event Holdings I does not qualify (or subsequently elects not)
to be treated as an S Corporation for California income tax purposes, or
Intermediate Holdings or the Borrower does not qualify (or subsequently elects
not) to be treated as a qualified subchapter S subsidiary; plus, (ii) the
product of the Maximum Federal Rate and Holdings I's Federal Taxable Income.

         "Documentation Agents" means CIT Lending Services Corporation and
SunTrust Bank, in their capacities as co-documentation agents hereunder.

         "EBITDA" means, for any period of four consecutive fiscal quarters, Net
Income of the Credit Parties during such period, plus (to the extent deducted in
computing Net Income) (a) the

                                       10



sum of (i) Interest Expense during such period and any interest expense accrued
during such period pursuant to the Oaktree Note Purchase Documents or the
Holdings Securities Purchase Documents, (ii) depreciation and amortization
expense during such period (including without limitation charges under SFAS 142
for broadcast licenses, goodwill or other indefinite lived intangible assets),
(iii) the aggregate amount paid, required to be paid or accrued (without
duplication) in respect of income, franchise, real estate and other like taxes
during such period, (iv) extraordinary losses during such period, (v) other non
cash charges during such period, (vi) (x) Relocation costs, expenses and other
amounts set forth in clauses (ii)(A) and (B), and subclauses (a)(i), (a)(v),
(a)(vi) and (a)(vii) and (b) of clause (ii)(C) of the definition of Net Cash
Payments and (y) Transaction Costs, in each case, incurred or paid during such
period, (vii) for the period commencing on May 20, 2002 and ending on the date
of the closing of the El Dorado Acquisitions, payments required to be made by
any of the Credit Parties to the El Dorado Sellers pursuant to the local
marketing agreements in respect of the stations not in excess of $150,000 for
any calendar month and for a period of not more than twelve (12) calendar
months, (viii) Extraordinary Expenses for such period, (ix) Permitted
Shareholder Tax Distributions and Permitted Holdings Tax Distributions during
such period, (x) any non-compete payments made in cash during such period to
sellers in connection with any Permitted Acquisition in an aggregate amount not
to exceed 20% of the aggregate consideration paid or payable by the Credit
Parties in connection with such Permitted Acquisition, (xi) the aggregate amount
of any payments made in cash during such period with respect to any portion of
the "Incentive Bonus" which may become payable pursuant to the employment
agreements of Andrew Mars dated November 15, 1998, Xavier Ortiz dated September
1, 1999, and Eduardo Leon dated December 1, 1999 (including the aggregate amount
of any payments made in cash during such period with respect to any notes issued
with respect thereto) and (xii) forgiveness or cancellation of the loan to
Lenard Liberman described in Item 5 of Schedule 7.5 annexed hereto minus (to the
extent not deducted in computing Net Income) (b) the sum of (i) extraordinary
gains during such period, (ii) cash Program Obligations Payments actually made
during such period (or, with respect to Program Obligations Payments for which
the proviso in the definition thereof is applicable, Program Obligations
Payments amortized during such period) and (iii) any cash interest paid during
such period in respect of the Liberman Subordinated Debt (excluding interest on
the Liberman Subordinated Debt to the extent paid on the Closing Date); provided
that (1) for purposes of determining EBITDA for any period during which a
Disposition (other than any Relocation) is consummated, EBITDA shall be adjusted
in a manner reasonably satisfactory to the Administrative Agent to give effect
to the consummation of the Disposition (other than any Relocation) on a
pro-forma basis, as if the Disposition (other than any Relocation) occurred on
the first day of such period; (2) for the purposes of determining EBITDA for any
period during which a Permitted Acquisition is consummated, EBITDA shall be
adjusted in a manner reasonably satisfactory to the Administrative Agent (a) to
give effect to the consummation of such Acquisition on a pro-forma basis, as if
such Acquisition occurred on the first day of such period and (b) to reflect
certain expense deductions in connection with such Acquisition reasonably
acceptable to the Administrative Agent, and (3) for purposes of determining
EBITDA for the four fiscal quarter periods ending on September 30, 2002,
December 31, 2002 and March 31, 2003, the EBITDA attributable to the stations
and other assets acquired in connection with the El Dorado Acquisitions and the
Guajillo Acquisitions (or, in the case of KQQK-FM and KEYH-AM, prior to the
consummation of the El Dorado Acquisitions, the EBITDA attributable to such
stations under applicable local marketing agreements) to the extent any such
stations or

                                       11



assets are converted to or maintained as a Spanish language format, shall be
calculated as follows: for the four fiscal quarter periods ending on September
30, 2002, December 31, 2002 and March 31, 2003, the EBITDA attributable to such
stations and other assets shall be based on the EBITDA attributable to such
stations and other assets for the one fiscal quarter ended September 30, 2002
times 4 (if such EBITDA is greater than zero) or times 1 (if such EBITDA is less
than zero), for the two fiscal quarters ended December 31, 2002 times 2 (if such
EBITDA is greater than zero) or times 1 (if such EBITDA is less than zero), and
for the three fiscal quarters ended March 31, 2003 times 1 and 1/3 (if such
EBITDA is greater than zero) or times 1 (if such EBITDA is less than zero),
respectively (it being understood that to the extent any such stations or assets
are not so converted to or maintained as Spanish language format, EBITDA
therefor shall include the actual EBITDA for the applicable four fiscal quarters
attributable to such stations or assets (regardless of whether any portion of
such period occurred prior to the time of the El Dorado Acquisitions or the
Guajillo Acquisitions, as the case may be)). Notwithstanding the foregoing, to
the extent deducted in computing Net Income during the periods set forth below
and actually paid in cash by the Credit Parties, the following expenses incurred
by the Credit Parties in respect of settlement costs and attorneys' fees and
expenses in connection with the wrongful termination claim against the Credit
Parties by a former employee may be added to EBITDA: (a) for any time prior to
December 31, 2001, attorneys' fees and expenses not in excess of $396,280.20,
and (b) for the fiscal quarter ending on March 31, 2002, attorneys' fees and
expenses not in excess of $249,868.07 and settlement costs not in excess of
$200,000.

         "Effective Time" means the time when the conditions specified in
Section 5.1 are satisfied (or waived in accordance with Section 10.2).

         "Effective Time Mortgage" has the meaning assigned to such term in
Section 5.1(f)(i).

         "Effective Time Mortgage Policy" has the meaning assigned to such term
in Section 5.1(f)(vii).

         "Effective Time Mortgaged Property" has the meaning assigned to such
term in Section 5.1(f)(i).

         "El Dorado Acquisitions" means the proposed acquisitions by Liberman
Broadcasting of Houston, Inc. and Liberman Broadcasting of Houston License Corp.
from the El Dorado Sellers of the assets of one or both of two (2) radio
broadcast stations located in Houston, Texas: KQQK-FM for cash consideration not
in excess of $23,000,001 and KEYH-AM for cash consideration not in excess of
$7,000,000; provided that KEYH-AM shall not be acquired unless KQQK-FM is also
acquired.

         "El Dorado Acquisitions Documents" means (a) the AM Asset Purchase
Agreement dated April 5, 2002, and (b) the FM Asset Purchase Agreement dated
April 5, 2002, and all related instruments, agreements and other documents
entered into by any Credit Party and any El Dorado Seller in connection with
each such asset purchase agreement, in each case, as amended, supplemented or
modified in accordance with the restrictions of Section 7.13.

         "El Dorado Sellers" means El Dorado Communications, Inc. El Dorado 108,
Inc. and KXTJ License, Inc.

                                       12



         "Eligible Assignee" means (a) any Lender, any Affiliate of any Lender
and any Approved Fund of any Lender; and (b) (i) any commercial bank organized
under the laws of the United States or any state thereof; (ii) any savings and
loan association or savings bank organized under the laws of the United States
or any state thereof; (iii) any commercial bank organized under the laws of any
other country or a political subdivision thereof; provided that (1) such bank is
acting through a branch or agency located in the United States or (2) such bank
is organized under the laws of a country that is a member of the Organization
for Economic Cooperation and Development or a political subdivision of such
country; and (iv) any other entity that is an "accredited investor" (as defined
in Regulation D under the Securities Act of 1933, as amended) that extends
credit or buys loans as one of its businesses including insurance companies,
mutual funds, financing companies and lease financing companies; provided that
no Credit Party or any Affiliate of any Credit Party shall be an Eligible
Assignee.

         "Empire Burbank" means Empire Burbank Studios, Inc, a California
corporation and a Wholly-Owned Subsidiary of the Borrower.

         "Empire Burbank Lease" means that certain Lease dated as of July 15,
1999 between Empire Burbank, as lessor, and LBI, as lessee, relating to
occupancy of the Burbank Office Property, as such lease may be amended or
modified in accordance with Section 7.14.

         "Empire Burbank Loan" means a loan in the original principal amount of
$3,250,000 made by City National Bank to Empire Burbank pursuant to the Empire
Burbank Loan Documents and any Permitted Refinancing.

         "Empire Burbank Loan Documents" means the Empire Burbank Mortgage and
the other documents evidencing the Empire Burbank Loan and described on Schedule
4.14, or any replacement documents evidencing a Permitted Refinancing, as such
documents or replacement documents may be amended or modified in accordance with
Section 7.14.

         "Empire Burbank Mortgage" means that certain deed of trust encumbering
the Burbank Office Property, executed by Empire Burbank in favor of City
National Bank securing the Empire Burbank Loan, or any replacement deed of trust
evidencing a Permitted Refinancing, as such deed of trust or replacement deed of
trust may be amended or modified in accordance with Section 7.14.

         "Empire Burbank Sublease" means that certain Sublease Agreement between
LBI, as lessor, and Empire Burbank, as lessee, relating to occupancy of certain
portions of the Burbank Office Property by Empire Burbank, as such lease may be
amended or modified from time to time.

         "Environmental Laws" means all applicable laws, rules, regulations,
codes, ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.

         "Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of any

                                       13



Credit Party directly or indirectly resulting from or based upon (a) violation
of any Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) exposure to any
Hazardous Materials, (d) the release or threatened release of any Hazardous
Materials into the environment or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.

         "Equity Rights" means, with respect to any Person, any subscriptions,
options, warrants, commitments, preemptive rights or agreements of any kind
(including any stockholders' or voting trust agreements) for the issuance or
sale of, or securities convertible into, any additional shares of capital stock
of any class, or partnership or other ownership interests of any type in, such
Person.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.

         "ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
within the meaning of Section 414(b), (c), (m) or (o) of the Code.
Notwithstanding the foregoing, for purposes of any liability related to a
Multiemployer Plan under Title IV of ERISA, the term "ERISA Affiliate" means any
trade or business that together with the Borrower is treated as a single
employer within the meaning of Section 4001(b) of ERISA.

         "ERISA Event" means (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to any Pension
Plan, (b) the existence with respect to any Pension Plan of an "accumulated
funding deficiency" (as defined in Section 412 of the Code or Section 302 of
ERISA), whether or not waived, (c) the filing pursuant to Section 412(d) of the
Code or Section 303(d) of ERISA of an application for a waiver of the minimum
funding standard with respect to any Pension Plan, (d) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA
with respect to the termination of any Pension Plan, (e) the receipt by the
Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any
notice relating to an intention to terminate any Pension Plan or Pension Plans
or to appoint a trustee to administer any Pension Plan or (f) the receipt by the
Borrower or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA.

         "Event of Default" has the meaning assigned to such term in Section
8.1.

         "Excess Cash Flow" means, for each fiscal year, (a) EBITDA for such
period minus (b) (to the extent not deducted in computing EBITDA) the sum of (i)
the aggregate amount of all Capital Expenditures made during such period to the
extent paid in cash during such period (excluding payment of Capital Lease
Obligations to the extent included in Debt Service for such period and all
Capital Expenditures made by the reinvestment of Net Cash Payments made in
accordance with Section 2.10(b)), (ii) Debt Service for such period, (iii) the
aggregate amount paid in cash or withheld (and not deducted in the calculation
of Excess Cash Flow in any prior

                                       14



fiscal year) by the Credit Parties in respect of income, real estate, franchise,
and other like taxes for such period, (iv) Transaction Costs incurred during
such period, (v) Extraordinary Expenses incurred during such period, (vi) the
Net Cash Payments of Dispositions made during such period to the extent such
proceeds (A) are included in EBITDA and (B) have been used to prepay the Loans
or are reinvested, in each case, pursuant to Section 2.10(b), (vii) loans or
Restricted Junior Payments made during such period as permitted by Sections
7.5(a)(x)(1) or 7.6(a), as applicable, and (viii) except to the extent
reimbursed, Relocation costs, expenses and other amounts set forth in clauses
(ii)(A) and (B), and subclauses (a)(i), (a)(v), (a)(vi), (a)(vii) and (b) of
clause (ii)(C) of the definition of Net Cash Payments incurred or paid during
such period plus (c) the amount of any payment or prepayment during such period
of loans made pursuant to Section 7.5(a)(x)(1).

         "Excluded Assets" means, at any time no Event of Default pursuant to
Section 8.1(a) or as a result of a failure by the Credit Parties to comply with
any provision of Section 7.10 has occurred and is continuing, the Hollywood
Office Property.

         "Excluded Taxes" means, with respect to the Administrative Agent, any
Lender, the Issuing Lender or any other recipient of any payment to be made by
or on account of any obligation of the Borrower hereunder, (a) income, net worth
or franchise taxes imposed on (or measured by) its net income or net worth by
the United States of America, or by a jurisdiction under the laws of which such
recipient is organized or in which its principal office is located or, in the
case of any Lender, in which its applicable lending office is located or in
which it is taxable solely on account of some connection other than the
execution, delivery or performance of this Agreement or the receipt of income
hereunder, (b) any branch profits taxes imposed by the United States of America
or any similar tax imposed by any other jurisdiction in which the Borrower is
located and (c) in the case of a Foreign Lender (other than an assignee pursuant
to a request by the Borrower under Section 2.8(b)), any withholding tax that is
imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party to this Agreement or is attributable to such Foreign
Lender's failure or inability to comply with Section 2.16(e), except to the
extent that such Foreign Lender's assignor (if any) was entitled, at the time of
assignment, to receive additional amounts from the Borrower pursuant to Section
2.16(a).

         "Existing Credit Agreement" has the meaning assigned to such term in
the preamble hereof.

         "Existing Debt" means Indebtedness described in (a) Schedule 4.14 and
denoted "to be repaid on the Closing Date" and (b) Schedule 4.14 and denoted "to
remain outstanding after the Closing Date".

         "Existing Mortgage Amendment" means, with respect to any Existing
Mortgaged Property, an amendment to the Mortgage for such property,
substantially in the form of Exhibit Q or in such other form as may be approved
by the Administrative Agent in its sole and reasonable discretion.

         "Existing Mortgaged Property" has the meaning assigned to such term in
Section 5.1(f)(ii).

                                       15



         "Existing Title Policy Endorsement" has the meaning assigned to such
term in Section 5.1(f)(ix).

         "Extraordinary Expenses" means those certain non-recurring,
extraordinary fees and expenses incurred by Holdings I or the Borrower or any of
its Subsidiaries in connection with proposed radio or television acquisitions
not to exceed $250,000, individually, or $500,000 in the aggregate.

         "FCC" means the Federal Communications Commission or any governmental
authority succeeding to any of its functions.

         "FCC Licenses" means all radio, broadcast and or other licenses,
permits, certificates of compliance, franchises, approvals or authorizations
granted or issued by the FCC to any Credit Party. Each reference to "Material
FCC Licenses" shall be deemed to include the main station FCC License for each
broadcast station but shall be deemed not to include any auxiliary services
licenses held by any Credit Party in connection with such broadcast station.

         "FCC Regulations" means the Communications Act, and all regulations and
written policies promulgated from time to time by the FCC under or in connection
with or pertaining to the Communications Act.

         "Federal Funds Effective Rate" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.

         "Federal Taxable Income" shall mean the taxable income of Holdings I
for any taxable year computed pursuant to Section 1363(b) (or any successor
provision) of the Code but calculated as if the taxable year of Holdings I ended
on the date with respect to which such taxable income calculation is made,
reduced, but not below zero, by the amount of any Suspended Losses treated as
incurred by Holdings I in, and allowed as deductions on the tax returns of
Holdings I's stockholders for, such taxable year.

         "Financial Officer" means the executive vice president, chief financial
officer, principal accounting officer, treasurer or controller of the Borrower.

         "First Priority" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that such Lien is
the most senior Lien (other than Liens permitted pursuant to Section 7.2) to
which such Collateral is subject.

         "Fixed Charge Ratio" means, as at any date, the ratio of (a) the sum of
(i) EBITDA for the period of four consecutive fiscal quarters ending on or most
recently ended prior to such date plus (ii) cash and Cash Equivalents held by
the Credit Parties on such date in excess of $2,000,000, to (b) the sum for the
Credit Parties (determined on a consolidated basis without

                                       16



duplication in accordance with GAAP), of (i) all amounts included in Debt
Service for such period; provided that for purposes of determining the Debt
Service as of the end of (A) the fiscal quarter ending September 30, 2002, Debt
Service shall be computed on an annualized basis by multiplying the actual Debt
Service for the quarter ending September 30, 2002 by four; (B) the fiscal
quarter ending December 31, 2002, Debt Service shall be computed on an
annualized basis by multiplying the actual Debt Service for the two quarters
ending December 31, 2002 by two; and (C) the fiscal quarter ending March 31,
2003, Debt Service shall be computed on an annualized basis by multiplying the
actual Debt Service for the three quarters ending March 31, 2003 by one and
one-third, (ii) the aggregate amount of all Capital Expenditures made during
such period to the extent paid in cash during such period (excluding payment of
Capital Lease Obligations to the extent included in Debt Service for such period
and expenditures not in excess of $2,000,000 for the acquisition of the Bering
Property), (iii) the aggregate amount paid, or required to be paid (without
duplication), in cash by the Credit Parties in respect of income, franchise,
real estate and other like taxes for such period, (iv) Permitted Shareholder Tax
Distributions and Permitted Holdings Tax Distributions made during such period,
(v) the aggregate amount of any payments made in cash during such period with
respect to any portion of the "Incentive Bonus" which may become payable
pursuant to the employment agreements of Andrew Mars dated November 15, 1998,
Xavier Ortiz dated September 1, 1999, and Eduardo Leon dated December 1, 1999
(including the aggregate amount of any payments made in cash during such period
with respect to any notes issued with respect thereto), and (vi) the amount of
non-compete payments made in cash during such period to sellers in connection
with Permitted Acquisitions in an aggregate amount not to exceed 20% of the
aggregate consideration paid or payable by the Credit Parties in connection with
such Acquisitions, to the extent such non-compete payments are added back in the
calculation of EBITDA for such period.

         "Fleet" means Fleet National Bank, a national bank.

         "Flood Hazard Property" means a Mortgaged Property located in an area
designated by the Federal Emergency Management Agency as having special flood or
mud slide hazards.

         "Foreign Lender" means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.

         "GAAP" means generally accepted accounting principles in the United
States of America.

         "Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government and the National Association of Insurance Commissioners.

         "Guajillo Acquisitions" means the acquisitions by Liberman Broadcasting
of Houston, Inc. and Liberman Broadcasting of Houston License Corp. from the
Guajillo Sellers of the assets

                                       17



of two (2) radio stations: KIOX-FM and KXGJ-FM located in Texas for aggregate
cash consideration not in excess of $3,150,000.

         "Guajillo Acquisitions Documents" means the Asset Purchase Agreement,
dated as of June 21, 2002, among the Borrower, Liberman Broadcasting of Houston,
Inc., Liberman Broadcasting of Houston License Corp. and the Guajillo Sellers,
and all related instruments, agreements and other documents entered into by any
Credit Party and any Guajillo Seller in connection therewith, in each case, as
amended, supplemented or modified in accordance with the restrictions of Section
7.13.

         "Guajillo Sellers" means Guajillo Investments, LLC, a Louisiana limited
liability company.

         "Guarantee" means a guarantee, an endorsement, a contingent agreement
to purchase or to furnish funds for the payment or maintenance of, or otherwise
to be or become contingently liable under or with respect to, the Indebtedness,
other obligations, net worth, working capital or earnings of any Person, or a
guarantee of the payment of dividends or other distributions upon the stock or
equity interests of any Person, or an agreement to purchase, sell or lease (as
lessee or lessor) property, products, materials, supplies or services primarily
for the purpose of enabling a debtor to make payment of such debtor's
obligations or an agreement to assure a creditor against loss, and including
causing a bank or other financial institution to issue a letter of credit or
other similar instrument for the benefit of another Person, but excluding
endorsements for collection or deposit in the ordinary course of business. The
amount of any Guarantee shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to perform
thereunder). The terms "Guarantee" and "Guaranteed" used as a verb shall have a
correlative meaning.

         "Guaranteed Obligations" has the meaning assigned to such term in
Section 3.1.

         "Guarantors" means all Subsidiaries of the Borrower.

         "Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature in each case regulated or
subject to regulation pursuant to any Environmental Law.

         "Hedging Agreement" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.

         "Holding Company" means each of (i) Holdings I, (ii) prior to the
Intercompany Merger, Intermediate Holdings and (iii) any holding company formed
after the Closing Date which owns all the equity interests of the Borrower and
whose sole equity holder is Holdings I.

         "Holding Company Debt" means any Indebtedness of Holdings I in respect
of the Holdings Securities Purchase Documents.

                                       18



         "Holdings Amendment" means the First Amendment to Securities Purchase
Agreement, Warrant Agreement and Subordination and Intercreditor Agreements
dated as of the date hereof among Holdings I, Oaktree, Alta and the
Administrative Agent pursuant to which Alta shall have agreed, among other
things, to extend the maturity date of the Holding Company Debt described
thereby to July 9, 2013.

         "Holdings I" means LBI Holdings I, Inc., a California corporation and
the sole shareholder of Intermediate Holdings prior to the Intercompany Merger
and the sole shareholder of the Borrower or another Holding Company after the
Intercompany Merger.

         "Holdings Securities Purchase Documents" means the (a) Securities
Purchase Agreement dated as of March 20, 2001 among the purchasers named therein
and Holdings I pursuant to which Alta purchased the junior subordinated notes of
Holdings I in a principal amount of $30,000,000, (b) any notes issued in
connection with such agreement on the Original Closing Date, (c) any additional
notes issued in respect of capitalized interest in respect of such agreement,
(d) the Warrant Agreement dated as of March 20, 2001 between Holdings I and
Alta, (e) any notes or warrants issued by Holdings I to Alta pursuant to the
Holdings Amendment on the Closing Date in exchange for the notes described in
clauses (b) and (c) above and the warrants described in clause (d) above and (f)
all related instruments, agreements and other documents entered into by Holdings
I and Alta in connection therewith, in each case, as amended by the Holdings
Amendment and as further amended, supplemented or modified in accordance with
the restrictions of Section 7.15.

         "Hollywood Office Property" means that certain property located at 5724
Hollywood Blvd. and 5718 Hollywood Blvd., Los Angeles, Los Angeles County,
California.

         "Indebtedness" means, for any Person, without duplication: (a)
obligations created, issued or incurred by such Person for borrowed money
(whether by loan, advance, the issuance and sale of debt securities or the sale
of Property to another Person subject to an understanding or agreement,
contingent or otherwise, to repurchase such Property from such Person); (b)
obligations of such Person to pay the deferred purchase or acquisition price of
Property or services, other than trade accounts payable (other than for borrowed
money) arising, and accrued expenses incurred, in the ordinary course of
business so long as such trade accounts are payable within 180 days after the
date of the respective goods are delivered or the respective services are
rendered or otherwise are payable in accordance with customary practices; (c)
Capital Lease Obligations of such Person; (d) obligations of such Person in
respect of letters of credit or similar instruments issued or accepted by banks
and other financial institutions for the account of such Person; (e)
Indebtedness of others secured by a Lien on the Property of such Person, whether
or not the respective indebtedness so secured has been assumed by such Person;
and (f) Indebtedness of others Guaranteed by such Person. The Indebtedness of
any Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such Person
is liable therefor as a result of such Person's ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor. Notwithstanding
anything herein to the contrary, (x) the obligations of any Credit Party to pay
Relocation Profits (including any Relocation Tax Benefits (as defined in the
Shop At Home Acquisition Documents)) to the Shop At Home Sellers under the Shop
At Home Acquisition Documents shall not be Indebtedness

                                       19



until such time as such obligations are overdue and payable and not being
contested in good faith or represented by a separate instrument, (y) any
obligations under the Empire Burbank Lease shall not be Indebtedness and (z) any
obligations with respect to non-compete payments in connection with any
Permitted Acquisition shall not constitute Indebtedness so long as (i) the
aggregate amount of all non-compete payments with respect to such Permitted
Acquisition do not exceed 20% of the aggregate consideration paid or payable in
connection with such Permitted Acquisition and (ii) such non-compete payments do
not have an interest or similar component.

         "Indemnified Taxes" means all Taxes other than (a) Excluded Taxes and
Other Taxes and (b) amounts constituting penalties or interest imposed with
respect to Excluded Taxes or Other Taxes.

         "Intercompany Merger" means the merger of Intermediate Holdings with
and into the Borrower in accordance with the provisions of Section 7.4(g).

         "Interest Coverage Ratio" means as at any date, the ratio of (a) EBITDA
for the period of four consecutive quarters ending on or most recently ended
prior to such date, to (b) Interest Expense for such period.

         "Interest Election Request" means a request by the Borrower to convert
or continue a Borrowing in accordance with Section 2.6 substantially in the form
of Exhibit D-2 annexed hereto.

         "Interest Expense" means, for any period, the sum, for the Credit
Parties (determined on a consolidated basis without duplication in accordance
with GAAP), of the following: (a) interest in respect of Total Debt accrued
during such period (whether or not actually paid during such period) plus (b)
the net amounts payable (or minus the net amounts receivable) under Hedging
Agreements accrued during such period (whether or not actually paid or received
during such period), with fees and costs attributable to such period being
calculated assuming such fees and costs are amortized equally over the term of
such Hedging Agreement, but excluding (i) reimbursement of legal fees and other
similar transaction costs of the Transactions and (ii) any non-cash amortization
of fees and expenses of the Transactions plus (c) all letter of credit fees and
expenses incurred after the Effective Time plus (d) any payments in respect of
liquidated damages paid in cash during such period pursuant to any registration
rights agreement entered into in connection with any Indebtedness; provided that
interest in respect of Indebtedness which is not paid in cash but which is
instead "paid-in-kind" through the issuance of additional notes or other
instruments shall not be included in "Interest Expense"; provided further that
for purposes of determining the Interest Expense as of the end of (a) the fiscal
quarter ending September 30, 2002, Interest Expense shall be computed on an
annualized basis by multiplying the actual Interest Expense for the quarter
ending September 30, 2002 by four; (b) the fiscal quarter ending December 31,
2002, Interest Expense shall be computed on an annualized basis by multiplying
the actual Interest Expense for the two quarters ending December 31, 2002 by
two; and (c) the fiscal quarter ending March 31, 2003, Interest Expense shall be
computed on an annualized basis by multiplying the actual Interest Expense for
the three quarters ending March 31, 2003 by one and one-third.

                                       20



         "Interest Payment Date" means (a) with respect to any Base Rate Loan,
each Quarterly Date and (b) with respect to any LIBOR Loan, the last Business
Day of the Interest Period applicable to the Borrowing of which such Loan is a
part and, in the case of a LIBOR Borrowing with an Interest Period of more than
three months' duration, each Business Day prior to the last day of such Interest
Period that would have been the last day of the Interest Period for such LIBOR
Loan had successive three month Interest Periods been applicable to such LIBOR
Loan.

         "Interest Period" means with respect to any LIBOR Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
(or, with the consent of the Administrative Agent and provided such periods are
available from all Lenders, nine or twelve months) thereafter, as the Borrower
may elect; provided, that (i) if any Interest Period would end on a day other
than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless such next succeeding Business Day would fall in
the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day and (ii) any Interest Period that commences on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period. For purposes hereof, the date of a Borrowing initially shall be
the date on which such Borrowing is made and thereafter shall be the effective
date of the most recent conversion or continuation of such Borrowing.
Notwithstanding the foregoing,

                    (x) if any Interest Period for any Revolving Credit
               Borrowing would otherwise end after the Revolving Credit Maturity
               Date, such Interest Period shall end on the Revolving Credit
               Maturity Date,

                    (y) no Interest Period for the Revolving Credit Loans may
               commence before and end after any Revolving Credit Commitment
               Reduction Date unless, after giving effect thereto, the aggregate
               principal amount of the Revolving Credit Loans having Interest
               Periods that end after such Revolving Credit Commitment Reduction
               Date shall be equal to or less than the aggregate principal
               amount of the Revolving Credit Commitments after giving effect to
               the scheduled reduction thereto on such Revolving Credit
               Commitment Reduction Date, and

                    (z) notwithstanding the foregoing clauses (x) and (y), no
               Interest Period shall have a duration of less than one month and,
               if the Interest Period for any LIBOR Loan would otherwise be a
               shorter period, such Loan shall not be available hereunder as a
               LIBOR Loan for such period.

         "Intermediate Holdings" means LBI Intermediate Holdings, Inc, a
California corporation, which is, prior to the Intercompany Merger, the sole
shareholder of the Borrower and a Wholly-Owned Subsidiary of Holdings I.

         "Intermediate Holdings Intercompany Note" means the Promissory Note
dated of even date herewith made by Intermediate Holdings to the order of the
Borrower in the original principal amount of $54,282,851.82.

                                       21



         "Investment" means, for any Person: (a) the acquisition (whether for
cash, Property, services or securities or otherwise) of capital stock, bonds,
notes, debentures, partnership or other ownership interests or other securities
of any other Person or any agreement to make any such acquisition (including any
"short sale" or any sale of any securities at a time when such securities are
not owned by the Person entering into such short sale) or (b) the making of any
deposit with, or advance, loan or other extension of credit to, any other Person
(including the purchase of Property from another Person subject to an
understanding or agreement, contingent or otherwise, to resell such Property to
such Person, but excluding any such advance, loan or extension of credit having
a term not exceeding 180 days representing the purchase price of goods or
services sold by such Person in the ordinary course of business or otherwise are
payable in accordance with customary practices). Notwithstanding the foregoing,
Capital Expenditures, Acquisitions and Relocations (other than promissory notes
or debt or equity securities acquired in connection with any Relocation) shall
not be deemed "Investments" for purposes hereof.

         "Investor Subordination Agreement" means the Investor Subordination
Agreement dated as of the Original Closing Date between Alta and the
Administrative Agent as amended by the Holdings Amendment and as confirmed by
the Confirmation to Subordination Agreements and as such agreement may hereafter
be further amended, supplemented or otherwise modified from time to time.

         "Involuntary Relocation" means with respect to any television Broadcast
Station, any Relocation described in clause (2) of the definition of the term
Relocation. Without limiting the generality of the foregoing, the term
Involuntary Relocation shall include any "Specified Involuntary Relocation" as
defined in the Shop At Home Acquisition Documents as in effect on March 20,
2001.

         "IP Collateral" means, collectively, any Collateral which is
intellectual property of a Credit Party.

         "Issuing Lender" means Fleet National Bank, in its capacity as an
issuer of Letters of Credit hereunder.

         "LBI" means Liberman Broadcasting, Inc., a California corporation.

         "Landlord Waiver and Consent" means, with respect to any Leasehold
Property, a letter, certificate or other instrument in writing from the lessor
under the related lease, in substantially the form of Exhibit J-1 or in such
other form reasonably approved by the Administrative Agent.

         "LC Disbursement" means a payment made by the Issuing Lender pursuant
to a Letter of Credit.

         "LC Exposure" means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time plus (b) the aggregate
amount of all LC Disbursements that have not yet been reimbursed by or on behalf
of the Borrower at such time. The LC Exposure of any Revolving Credit Lender at
any time shall be its Applicable Percentage of the total LC Exposure at such
time.

                                       22



         "Leasehold Property" means any leasehold interest of any Credit Party
as lessee under any lease of real property, other than any such leasehold
interest not material to the business and operations of the Credit Parties as
reasonably designated from time to time by Administrative Agent, as not being
required to be included in the Collateral.

         "Lender Joinder Agreement" means the Lender Joinder Agreement attached
hereto as Exhibit E pursuant to which a New Lender shall become a party to this
Agreement.

         "Lenders" means the Persons listed on Schedule 2.1 (including the
Issuing Lender) and any other Person that shall have become a party hereto
pursuant to (a) an Assignment and Acceptance, other than any such Person that
ceases to be a party hereto pursuant to an Assignment and Acceptance or (b) a
Lender Joinder Agreement.

         "Letter of Credit" means any letter of credit issued on a standby basis
or in support of trade obligations of any Credit Party pursuant to this
Agreement.

         "Liberman Subordinated Debt" means, collectively (A) Indebtedness of
LBI to (i) Lenard Liberman pursuant to the Third Amended and Restated Demand
Promissory Note dated March 20, 2001 in the aggregate principal amount on the
Original Closing Date of $194,414 and (ii) Jose Liberman pursuant to that Third
Amended and Restated Demand Promissory Note dated March 20, 2001 in the
aggregate principal amount on the Original Closing Date of $3,667,193, in each
case, prior to the payments made on or after the Original Closing Date, as the
same may be amended, supplement or otherwise modified in accordance with the
restrictions of Section 7.13 and (B) the Indebtedness incurred pursuant to
Section 7.1(f).

         "Liberman Subordination Agreements" means (a) those certain Liberman
Subordination Agreements dated as of the Original Closing Date among the
Borrower, the Administrative Agent and each of Jose and Lenard Liberman, and
such agreements shall be deemed to be terminated upon the payment in full on the
Closing Date of the obligations described in clauses (i) and (ii) of the
definition of Liberman Subordinated Debt; provided that such agreements and the
obligations of such subordinated creditors shall be reinstated and revived with
respect to any such amounts which are required to be restored or returned in
connection with any Reorganization (as defined therein), and (b) the
subordination agreements, if any, entered into pursuant to Section 7.1(f), as
such agreements may be amended or modified in accordance with the terms hereof.

         "LIBOR" when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Adjusted LIBO Rate.

         "LIBO Rate" means, with respect to any LIBOR Borrowing for any Interest
Period, the rate appearing on Page 3750 of the Telerate Service (or on any
successor or substitute page of such Service, or any successor to or substitute
for such Service, providing rate quotations comparable to those currently
provided on such page of such Service, as determined by the Administrative Agent
from time to time for purposes of providing quotations of interest rates
applicable to U.S. dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate

                                       23



for U.S. dollar deposits with a maturity comparable to such Interest Period. In
the event that such rate is not available at such time for any reason, then the
"LIBO Rate" with respect to such LIBOR Borrowing for such Interest Period shall
be the rate at which U.S. dollar deposits of $5,000,000, and for a maturity
comparable to such Interest Period, are offered by four major banks in the
London interbank market as selected by the Administrative Agent in immediately
available funds in the London interbank market at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period.

         "License Subsidiary" means any Wholly-Owned Subsidiary of the Borrower
(or of a Subsidiary of the Borrower) formed solely for the purpose of holding
FCC Licenses.

         "Licensor Consent" means, with respect to any Material Property
License, a letter, certificate or other instrument in writing from the lessor
under the related lease, in substantially the form of Exhibit J-2 or in such
other form reasonably approved by the Administrative Agent.

         "Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (other
than an operating lease) (or any financing lease having substantially the same
economic effect as any of the foregoing) relating to such asset and (c) in the
case of securities, any purchase option, call or similar right of a third party
with respect to such securities.

         "Loan Documents" means this Agreement, any promissory notes evidencing
Loans hereunder, the Collateral Documents and any other instruments or documents
delivered or to be delivered from time to time pursuant to this Agreement, as
the same may be supplemented and amended from time to time in accordance with
their respective terms.

         "Loans" means the Revolving Credit Loans.

         "Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations or financial condition of the Credit Parties taken
as a whole, (b) the ability of any Credit Party to perform any of its respective
material obligations under this Agreement or the other Loan Documents or (c) the
material rights of or material benefits available to the Lenders under this
Agreement and the other Loan Documents.

         "Material Indebtedness" means (a) the Senior Subordinated Notes and
(b)(i) Indebtedness (other than the Loans or Letters of Credit or the Empire
Burbank Loan), or (ii) obligations in respect of one or more Hedging Agreements,
of any one or more of the Credit Parties in each case of clause (i) and clause
(ii) in an aggregate principal amount exceeding $3,000,000. For purposes of
determining Material Indebtedness, the "principal amount" of the obligations of
any Person in respect of any Hedging Agreement at any time shall be the maximum
aggregate amount (giving effect to any netting agreements) that such Person
would be required to pay if such Hedging Agreement were terminated at such time.

         "Material Leasehold Property" means a Leasehold Property reasonably
determined by the Administrative Agent in good faith consultation with the
Borrower to be of material value as Collateral or of material importance to the
operations of the Credit Parties, taken as a whole.

                                       24



         "Material Property License" means a license to use real or mixed
property (excluding FCC Licenses) reasonably determined by the Administrative
Agent in good faith consultation with the Borrower to be of material value as
Collateral or of material importance to the operations of the Credit Parties,
taken as a whole.

         "Maximum Effective California Rate" shall mean the product of: (i) the
maximum California personal income tax rate imposed on individuals pursuant to
Section 17041(a) and (c) (or any successor provisions) of the California Revenue
and Tax Code; times (ii) the difference between one (1) and the Maximum Federal
Rate expressed as a decimal.

         "Maximum Federal Rate" shall mean the maximum Federal income tax rate
imposed on individuals pursuant to Section 1(a)-(d) (or any successor
provisions) of the Code, as adjusted pursuant to Section 15 (or any successor
provision) of the Code, if applicable.

         "Mortgage" means (i) a security instrument (whether designated as a
deed of trust or a mortgage, leasehold mortgage, assignment of leases and rents
or by any similar title) executed and delivered by any Credit Party in
substantially the form of Exhibits H and I or in such other form as may be
approved by the Administrative Agent in its sole and reasonable discretion, in
each case with such changes thereto as may be recommended by Administrative
Agent's local counsel based on local laws or customary local practices, (ii) or
at Administrative Agent's option, in the case of an Additional Mortgaged
Property, an amendment to an existing Mortgage, in form satisfactory to
Administrative Agent, adding such Additional Mortgaged Property to the Real
Property Assets encumbered by such existing Mortgage, in either case as such
security instrument or amendment may be amended, supplemented or otherwise
modified from time to time. "Mortgages" means all such instruments, including
the Effective Time Mortgage and any Additional Mortgages, collectively.

         "Mortgaged Property" means the Existing Mortgaged Property, Effective
Time Mortgaged Property or an Additional Mortgaged Property.

         "Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.

         "Net Cash Payments" means,

                (i)   with respect to any Casualty Event, the aggregate amount
         of cash proceeds of insurance, cash condemnation awards and other cash
         compensation received by the Credit Parties in respect of such Casualty
         Event net of (A) legal, title, transfer and recording tax expenses,
         commissions, and fees and expenses directly related to such casualty
         event (including legal, accounting, brokerage, outside consultant and
         advisor, advertising and closing costs) incurred by the Credit Parties
         in connection therewith and (B) contractually required repayments of
         Indebtedness to the extent secured by a Lien on such property, (C) any
         Federal, state and local income, transfer or other taxes paid or
         estimated to be payable by Holdings I, Intermediate Holdings or any of
         the Credit Parties in respect of such Casualty Event and (D) any
         Permitted Shareholder Tax Distributions and Permitted Holdings Tax
         Distributions relating to taxes paid or estimated to be payable as a
         result of such Casualty Event; and

                                       25



                  (ii)  with respect to any Disposition, the aggregate amount of
         all cash payments received by any of the Credit Parties in connection
         with such Disposition directly or indirectly, whether at the time of
         such Disposition or after such Disposition under deferred payment
         arrangements or Investments entered into or received in connection with
         such Disposition (including Disposition Investments); provided that

                        (A) Net Cash Payments shall be net of (I) the amount of
                  any legal, title, transfer and recording tax expenses,
                  commissions and other fees and expenses (including legal,
                  accounting, brokerage, outside consultant and advisor,
                  advertising and closing costs) paid or payable by Holdings I,
                  Intermediate Holdings or any of the Credit Parties in
                  connection with such Disposition and (II) any Federal, state
                  and local income, transfer or other taxes paid or reasonably
                  estimated to be payable by any of the Credit Parties as a
                  result of such Disposition, but only to the extent that such
                  estimated taxes are in fact paid to the relevant Federal,
                  state or local governmental authority within twelve months
                  after the end of the calendar year in which the date of such
                  Disposition occurs and (III) to the extent not included in the
                  foregoing, any Permitted Holdings Tax Distributions and
                  Permitted Shareholder Tax Distributions related to taxes paid
                  or estimated to be payable as a result of such Disposition;
                  and

                        (B) Net Cash Payments shall be net of any repayments by
                  any of the Credit Parties of Indebtedness to the extent that
                  (I) such Indebtedness is secured by a Lien on the property
                  that is the subject of such Disposition and (II) the
                  transferee of (or holder of a Lien on) such property requires
                  that such Indebtedness be repaid as a condition to the
                  purchase of such property.

                        (C) In addition to but without duplicating any amounts
                  required to be deducted from Net Cash Payments under clauses
                  (A) and (B) above, Net Cash Payments in connection with any
                  Disposition involving a Relocation shall be net of (a) all
                  reasonable costs (as determined by Borrower (or its successor
                  or assign) in its reasonable discretion) directly related to
                  such Relocation including, without limitation, (i) transaction
                  expenses (including professional advisor's or broker's fees
                  and costs and financing and related fees, commissions and
                  expenses, including lender waiver fees), (ii) engineering,
                  construction, equipment and moving costs, (iii) marketing
                  costs, (iv) the estimated aggregate amount of all obligations
                  of any Credit Party (or its successor or its assign) after
                  such Relocation under leases with respect to which it is the
                  lessee immediately prior to such Relocation, (v) any penalties
                  or liabilities incurred (or estimated to be incurred) by any
                  Credit Party (or its success or assign) under contracts which
                  cannot be terminated by such Credit Party (or its successor or
                  assign) prior to such Relocation but which cannot be performed
                  or are no longer necessary (in the sole but reasonable
                  discretion of the Borrower (or its successor or assign)) by
                  any Credit Party (or its successor or assign) following such
                  Relocation, (vi) costs incurred in seeking governmental
                  consents and permits required as part of such Relocation and
                  (vii) costs incurred in seeking FCC consent to move such
                  replaced station's digital operations to the site of such
                  replacement station's analog operations (including all
                  expenses of a type set forth in other clauses of this

                                       26



                  definition) and (b) any Relocation Profits (as defined in the
                  Shop At Home Acquisition Documents), including any Relocation
                  Tax Benefits (as defined in the Shop At Home Acquisition
                  Documents), that are paid or payable to the Shop At Home
                  Sellers or their assignees pursuant to the terms of the Shop
                  At Home Acquisition Documents. Any estimated amounts under
                  this clause (C) shall be based on good faith estimates of the
                  Borrower on the date of the consummation of any Relocation
                  which were reasonable when made but such estimates shall be
                  subject to adjustment within 90 days thereafter;

         "Net Income" means net income of the Credit Parties on a consolidated
basis determined in accordance with GAAP.

         "New Lender" has the meaning assigned to such term in Section
2.1(b)(ii).

         "Oaktree" means Oaktree Capital Management, LLC or its successors and
assigns, in its capacity as agent under the Oaktree Note Purchase Documents.

         "Oaktree Note Purchase Documents" means (a) the Note Purchase Agreement
dated as of March 20, 2001 among Oaktree, the purchasers party thereto and
Intermediate Holdings pursuant to which Oaktree and such purchasers purchased
the senior notes of Intermediate Holdings in a principal amount of $40,000,000,
(b) any notes issued in connection with such agreement, (c) any additional notes
issued in respect of capitalized interest in respect of such agreement and (d)
all related instruments, agreements and other documents entered into by
Intermediate Holdings, Oaktree and such purchasers in connection therewith, in
each case, as amended by the Holdings Amendment and as further amended,
supplemented or modified in accordance with the restrictions of Section 7.15.

         "Oaktree Redemption Agreement" means the Agreement Relating to Note
Purchase Agreement dated as of June 28, 2002, among Oaktree, the purchasers
party to the Oaktree Note Purchase Documents and Intermediate Holdings.

         "Original Closing Date" means March 20, 2001.

         "Other Taxes" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement and the other Loan Documents,
provided that there shall be excluded from "Other Taxes" all Excluded Taxes.

         "Participant" has the meaning assigned to such term in Section 10.4(f).

         "Pension Plan" means any Plan that is a defined benefit pension plan
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.

         "Permitted Acquisition" has the meaning set forth in Section 7.4.

                                       27



         "Permitted Dividend Amount" shall mean, for any taxable period, the
amount by which the Dividend Limitation for the taxable year exceeds the
aggregate Permitted Shareholder Tax Distributions paid by the Borrower for such
year pursuant to Section 7.5(a)(x)(1) or 7.6(a) hereof, including distributions
paid or loans made by the Borrower within 105 days after the end of the taxable
year for which a distribution is paid or loan is made; provided, that:

         (a) if, at the end of any taxable year of the Borrower, the Dividend
Limitation for such year exceeds the aggregate Permitted Shareholder Tax
Distributions paid by the Borrower for such year pursuant to Section
7.5(a)(x)(1) or 7.6(a) hereof, such excess shall be ignored for purposes of
computing the Permitted Dividend Amount for any subsequent period;

         (b) if, at the end of any taxable year of the Borrower, the aggregate
Permitted Shareholder Tax Distributions paid by the Borrower for such year
pursuant to Section 7.5(a)(x)(1) or Section 7.6(a) hereof exceed the Dividend
Limitation, the Permitted Dividend Amount shall be zero (0) and such excess
shall be included in the calculation of the aggregate Permitted Shareholder Tax
Distributions paid by the Borrower for the following taxable year(s); and

         (c) if Holdings I's S Corporation election made pursuant to Code
Section 1362 (or any successor provision) shall be determined to be invalid, or
is revoked or terminated, or the QSSS Election shall cease to be in effect for
the Borrower, the Permitted Dividend Amount for the Borrower shall be zero (0)
from and after the date of such invalidity, revocation, or termination.

         "Permitted Holdings Tax Distributions" means cash distributions or
loans from the Borrower to Intermediate Holdings or, after the Intercompany
Merger, Holdings I, in respect of any taxable year equal to the sum of estimated
and final state income taxes paid or payable by Holdings I or Intermediate
Holdings which are attributable to the taxable income of the Borrower for such
taxable year calculated as though the Borrower were an S Corporation.
Notwithstanding any other provision of the Agreement to the contrary, if, in any
year Holdings I or Intermediate Holdings is required to pay additional taxes
with respect to a prior year's tax return which are attributable to the taxable
income of the Borrower calculated as though the Borrower were an S Corporation
(whether because of an audit by a taxing authority, an amended return the filing
of which is required in the reasonable judgment of Holdings I, Intermediate
Holdings or otherwise), the amount of Permitted Holdings Tax Distributions which
may be paid or loaned in such year shall be increased by the amount of such
additional taxes.

         "Permitted Investments" means:

         (a) direct obligations of, or obligations the principal of and interest
on which are unconditionally guaranteed by, the United States of America (or by
any agency thereof to the extent such obligations are backed by the full faith
and credit of the United States of America), in each case maturing within one
year from the date of acquisition thereof;

         (b) investments in commercial paper maturing within 270 days from the
date of acquisition thereof and having, at such date of acquisition, the highest
credit rating obtainable from Standard and Poor's Ratings Service or from
Moody's Investors Service, Inc.;

                                       28



         (c) investments in certificates of deposit, banker's acceptances and
time deposits maturing within 180 days from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts issued
or offered by, any domestic office of any commercial bank organized under the
laws of the United States of America or any State thereof which has a combined
capital and surplus and undivided profits of not less than $250,000,000;

         (d) fully collateralized repurchase agreements with a term of not more
than 30 days for securities described in clause (a) above and entered into with
a financial institution satisfying the criteria described in clause (c) above;

         (e) investments in money market mutual funds that are rated AAA by
Standard & Poor's Rating Service; and

         (f) Cash Equivalents.

         "Permitted Liens" has the meaning set forth in Section 7.2.

         "Permitted Lines of Business" means the television and radio broadcast
business, television and radio program production, rental of television, radio
and related facilities and properties, outdoor advertising, the leasing or
licensing of property or tower space, and general business services related to
any of the foregoing and any business incident thereto.

         "Permitted Refinancing" means a refinancing of the Empire Burbank Loan
(other than with the Loans); provided that (i) the terms of the Empire Burbank
Loan Documents evidencing such refinancing shall be substantially similar to the
terms of the Empire Burbank Loan Documents existing March 20, 2001, with such
changes as do not materially adversely affect the Administrative Agent or the
Lenders (it being understood that no change to those provisions of the Empire
Burbank Loan Documents referred to in Section 7.14(a)(ii) shall be permitted
without the prior written consent of the Administrative Agent), (ii) no
additional property shall be encumbered by the Empire Burbank Mortgage executed
in connection with such refinancing and (iii) prior to consummation of such
refinancing, the Borrower shall deliver to the Administrative Agent copies of
all loan documents relating thereto, certified by the Borrower to be true and
correct copies thereof and to be all loan documents executed in connection with
such refinancing.

         "Permitted Shareholder Tax Distributions" means cash distributions made
by the Borrower to Intermediate Holdings, Holdings I or the shareholders of
Holdings I to permit the shareholders of Holdings I to pay their estimated and
final federal and state income tax liabilities attributable to the income of the
Borrower calculated as though the Borrower were an S Corporation. Permitted
Shareholder Tax Distributions may be made not more frequently than quarterly
with respect to each period for which an installment of estimated tax would be
required to be paid by the shareholders of Holdings I, provided, however, that
the amount of such distributions or loans shall not exceed the Permitted
Dividend Amount. For purposes of computing the amount of aggregate Permitted
Shareholder Tax Distributions paid by the Borrower for any taxable year, amounts
paid in such taxable year by the Borrower to the State of California on behalf
of nonresident shareholders as estimated taxes or as withholding taxes pursuant
to the California Revenue and Taxation Code shall be treated as Permitted
Shareholder

                                       29



Tax Distributions paid by the Borrower. If nonresident shareholders recontribute
to the Borrower any such amounts paid on their behalf, however, the amounts
contributed shall be subtracted from the amount of aggregate Permitted
Shareholder Tax Distributions paid by the Borrower for the taxable year in which
the contributions are made. Notwithstanding any other provisions of this
Agreement to the contrary, if in any year Holdings I's shareholders are required
to pay additional taxes with respect to a prior year's tax return which are
attributable to the taxable income of the Borrower calculated as though the
Borrower were an S Corporation (whether because of an audit by a taxing
authority, an amended return the filing of which is required in the reasonable
judgment of Holdings I, or otherwise), the amount of Permitted Shareholder Tax
Distributions which may be paid in such year shall be increased by the amount of
such additional taxes as determined by a Tax Accountant.

         "Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.

         "Plan" means any employee benefit plan within the meaning of Section
3(3) of ERISA in which the Borrower or any ERISA Affiliate is an "employer" as
defined in Section 3(5) of ERISA including but not limited to any Pension Plan
or Multiemployer Plan.

         "Pledge Agreement" means the Pledge Agreement executed and delivered by
each of the Credit Parties on the Original Closing Date as confirmed and amended
by the Confirmation of Pledge Agreement dated as of the Closing Date, as such
agreement may be further amended, supplemented or otherwise modified from time
to time, including the addition of new Credit Parties in accordance with Section
6.10.

         "Post-Default Rate" means, for Base Rate Loans, a rate per annum equal
to the Adjusted Base Rate plus the Applicable Margin plus 2%, and, for LIBOR
Loans, a rate per annum equal to the Adjusted LIBO Rate plus the Applicable
Margin plus 2%.

         "Prime Rate" means the rate of interest per annum publicly announced
from time to time by Fleet National Bank, as its prime rate in effect at its
principal office in Boston, Massachusetts; each change in the Prime Rate shall
be effective from and including the date such change is publicly announced as
being effective.

         "Program Obligations" means all obligations, whether fixed or
contingent, of the Credit Parties in respect of the purchase, use, license or
acquisition of programs, programming materials, films and similar assets used in
connection with the television broadcast business and operations of the Credit
Parties.

         "Program Obligations Payments" means, for any period, the sum
(determined on a consolidated basis and without duplication) of all payments by
the Credit Parties made or scheduled to be made during such period in respect of
Program Obligations; provided that, with respect to any contract for Program
Obligations which requires that the consideration therefor be paid by a Credit
Party in one lump-sum payment, or in unequal payments over the term of such
contract, such payment (or payments) shall be amortized over the period during
which such programming is available under such contract.

                                       30



         "Property" means any interest of any kind in property or assets,
whether real, personal or mixed, and whether tangible or intangible.

         "Proprietary Rights" has the meaning assigned to such term in Section
4.5(b).

         "PTO" means the United States Patent and Trademark Office or any
successor or substitute office in which filings are necessary or, in the
reasonable opinion of the Administrative Agent, desirable in order to create or
perfect Liens on any IP Collateral.

         "Quarterly Dates" means the last day of each fiscal quarter of the
Credit Parties, the first of which shall be September 30, 2002.

         "QSSS Election" means the election to treat any Person as a qualified
Subchapter S subsidiary pursuant to Code Section 1361(b)(3) (or any successor
provision).

         "Real Estate Acquisition Expenditures" means, for any period, the sum
for the Credit Parties (determined on a consolidated basis, without duplication,
in accordance with GAAP) of the aggregate amount of Capital Expenditures made to
acquire any fee interest in real property excluding any real property received
or acquired in any Acquisition or Relocation.

         "Real Property Asset" means, at any time of determination, any fee
ownership or leasehold interest then owned by any Credit Party in any real
property.

         "Recorded Leasehold Interest" means a Leasehold Property with respect
to which a Recorded Document (as hereinafter defined) has been recorded in all
places necessary or desirable, in the Administrative Agent's reasonable
judgment, to give constructive notice of such Leasehold Property to third-party
purchasers and encumbrancers of the affected real property. For purposes of this
definition, the term "Recorded Document" means, with respect to any Leasehold
Property, (a) the lease evidencing such Leasehold Property or a memorandum
thereof, executed and acknowledged by the owner of the affected real property,
as lessor, or (b) if such Leasehold Property was acquired or subleased from the
holder of a Recorded Leasehold Interest, the applicable assignment or sublease
document, executed and acknowledged by such holder, in each case in form
sufficient to give such constructive notice upon recordation and otherwise in
form reasonably satisfactory to the Administrative Agent.

         "Register" has the meaning assigned to such term in Section 10.4.

         "Registered Rights" has the meaning assigned to such term in Section
4.5(b).

         "Reimbursement Obligation" has the meaning assigned to such term in
Section 2.4(e).

         "Reinvestment Date" has the meaning specified in Section 2.10(b).

         "Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.

                                       31



         "Relocation" means with respect to any television Broadcast Station,
(1) any transaction in which a 700 MHz Holder (or any other Person) offers
consideration (which consideration consists of a different frequency or
frequencies and/or other cash or non-cash consideration) to any Credit Party for
the cessation of broadcasting on any of the existing analogue and/or digital
frequencies of such Broadcast Station in order to accommodate the spectrum needs
of such 700 MHz Holder, including the prevention of interference with such 700
MHz Holder's operations, and such Credit Party is not ordered or directly or
indirectly required by the FCC or any other Governmental Authority to enter into
such transaction, or (2) any transaction in which FCC or any other Governmental
Authority orders or otherwise directly or indirectly requires any Credit Party
to cease broadcasting on any of its existing analogue and/or digital frequencies
in order to accommodate the spectrum needs of any 700 MHz Holder, including the
prevention of interference with such 700 MHz Holder's operations, with or
without any consideration. Without limiting the generality of the foregoing, the
term Relocation shall include any "Relocation" as defined in the Shop At Home
Acquisition Documents as in effect on March 20, 2001. As used herein, "700 MHz
Holder" means a holder of a 700 MHz license or construction permit.

         "Relocation Profits" has the meaning given such term in the Shop At
Home Acquisition Documents.

         "Required Lenders" means Lenders having Loans, LC Exposure and unused
Commitments representing in excess of 50% of the sum of the total Loans, LC
Exposure and unused Commitments.

         "Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of, or other equity interests in, any Credit Party now or hereafter outstanding,
except a dividend payable solely in shares of stock or interests of the same
class, (ii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any shares of
any class of stock of, or other equity interests in, any Credit Party now or
hereafter outstanding, (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock of, or other equity interests in, any Credit Party
now or hereafter outstanding, (iv) any payment or prepayment of principal of,
premium, if any, or interest on, or redemption purchase, retirement, defeasance
(including economic or legal defeasance), sinking fund or similar payment or
liquidated damages with respect to, any Subordinated Indebtedness, Holding
Company Debt or other Indebtedness of any Holding Company (other than any
intercompany loans from any of the Credit Parties), (v) any payment made to Alta
Communications or any Affiliates of any Credit Party in respect of management,
consulting or other similar services provided to any Credit Party, and (vi) any
portion of "Incentive Bonus" which may become payable pursuant to the employment
agreement with Eduardo Leon referred to in Section 5.1(i). Notwithstanding the
foregoing, the following shall not be deemed to be Restricted Junior Payments:
(a) any payment to any director, officer or employee of any Credit Party
consisting of salary, other compensation (except to the extent described in
clause (vi) above) or reimbursement of expenses and (b) any payments made in
respect of the transactions permitted pursuant to Section 7.7. The cancellation
or forgiveness of any loan made by any Credit Party with no cash payment by a
Credit Party at the time of such

                                       32



forgiveness or cancellation to any of its Affiliates shall not be deemed to be a
Restricted Junior Payment.

         "Revolving Credit Availability Period" means the period from and
including the Effective Time to but excluding the earlier of (a) the Revolving
Credit Maturity Date and (b) the date of termination of the Revolving Credit
Commitments.

         "Revolving Credit Commitment" means, with respect to each Lender, the
commitment of such Lender to make Revolving Credit Loans and to acquire
participations in Letters of Credit hereunder, as such commitment may be (a)
reduced from time to time pursuant to Sections 2.7 and 2.10, (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 10.4 or (c) adjusted from time to time pursuant to Section
2.1(b). The initial maximum amount of each Lender's Revolving Credit Commitment
is set forth on Schedule 2.1, or in the Assignment and Acceptance pursuant to
which such Lender shall have assumed its Revolving Credit Commitment, as
applicable. The aggregate original amount of the Revolving Credit Commitments is
equal to $160,000,000.00.

         "Revolving Credit Commitment Increase" has the meaning assigned to such
term in Section 2.1(b)(i).

         "Revolving Credit Commitment Increase Date" has the meaning assigned to
such term in Section 2.1(b)(iii).

         "Revolving Credit Commitment Reduction Date" has the meaning assigned
to such term in Section 2.7(b). "Revolving Credit Conversion Date" means June
30, 2005.

         "Revolving Credit Exposure" means, with respect to any Revolving Credit
Lender at any time, the sum of the outstanding principal amount of such Lender's
Revolving Credit Loans and its LC Exposure at such time.

         "Revolving Credit Lender" means (a) initially, a Lender that has a
Revolving Credit Commitment set forth opposite its name on Schedule 2.1 and (b)
thereafter, the Lenders from time to time holding Revolving Credit Loans and
Revolving Credit Commitments, after (i) giving effect to any assignments thereof
permitted by Section 10.4 or (ii) becoming a New Lender in accordance with
Section 2.1(b).

         "Revolving Credit Loan" means a Loan made pursuant to Section 2.1(a)
that utilizes the Revolving Credit Commitment.

         "Revolving Credit Maturity Date" means September 30, 2009.

         "Revolving Credit Maximum Amount"  means $200,000,000.00.

         "Revolving Credit Notes" means the amended and restated promissory
notes, substantially in the form of Exhibit A, issued by the Borrower in favor
of the Revolving Credit Lenders.

                                       33




         "S Corporation" means a small business corporation within the meaning
of Code Section 1361 (or any successor provision) for which an election is in
effect under Code Section 1362(a) (or any successor provision).

         "Security Agreement" means the Amended and Restated Security Agreement,
substantially in the form of Exhibit B, executed and delivered by each of the
Credit Parties on the Closing Date and thereafter in accordance with Section
6.10, as such agreement may be amended, supplemented or otherwise modified from
time to time.

         "Senior Debt" means the Total Debt, excluding (i) any Subordinated
Indebtedness and (ii) obligations of Credit Parties to pay any liquidated
damages under any registration rights agreement entered into in connection with
Indebtedness to the extent such liquidated damages remain unpaid after the
applicable due date under such registration rights agreement.

         "Senior Leverage Ratio" means, as at any date of determination thereof,
the ratio of (a) Senior Debt to (b) EBITDA for the period of four consecutive
fiscal quarters ending on or most recently ended prior to such date.

         "Senior Subordinated Notes" means the Borrower's 10 1/8% Senior
Subordinated Notes due 2012, including any Additional Notes and Exchange Notes
(as each such term is defined in the Senior Subordinated Note Indenture), in
each case as issued pursuant to the Senior Subordinated Note Indenture in an
aggregate principal amount not in excess of $200,000,000, as amended,
supplemented or otherwise modified in accordance with the restrictions of
Section 7.13.

         "Senior Subordinated Note Indenture" means the Indenture dated as of
the date hereof, among the Borrower, the Guarantors and U.S. Bank, N.A., as
trustee, as amended, supplemented or otherwise modified in accordance with the
restrictions of Section 7.13.

         "Shop at Home Acquisition" means the acquisition by Liberman Television
of Houston, Inc. and KZJL License Corp. from the Shop at Home Sellers of the
Broadcast Station KZJL-TV in Houston, Texas for cash consideration of
$57,000,000.

         "Shop At Home Acquisition Documents" means the Asset Purchase
Agreement, dated November 10, 2000, among the Borrower, Liberman Television of
Houston, Inc. and KZJL License Corp. and the Shop At Home Sellers, as amended by
First Amendment to Asset Purchase Agreement dated as of December 22, 2000, the
Second Amendment to Asset Purchase Agreement dated as of February 27, 2001 and
the Third Amendment to Asset Purchase Agreement dated as of March 15, 2001 and
all related instruments, agreements and other documents entered into by any
Credit Party and any Shop At Home Seller in connection therewith, in each case,
as amended, supplemented or modified in accordance with the restrictions of
Section 7.13.

         "Shop At Home Sellers" means Shop At Home, Inc., SAH - Houston
Corporation, SAH-Houston License Corp. and SAH License, Inc.

         "Sole Lead Arranger" means Fleet Securities, Inc., in its capacity as
sole lead arranger hereunder.

                                       34




         "Special Counsel" means Palmer & Dodge LLP, in its capacity as special
counsel to Fleet National Bank, as Administrative Agent, and to Fleet
Securities, Inc., as Sole Lead Arranger.

         "Statutory Reserve Rate" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as "Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D. LIBOR
Loans shall be deemed to constitute eurocurrency funding and to be subject to
such reserve requirements without benefit of or credit for proration, exemptions
or offsets that may be available from time to time to any Lender under such
Regulation D or any comparable regulation. The Statutory Reserve Rate shall be
adjusted automatically on and as of the effective date of any change in any
reserve percentage.

         "Subordinated Indebtedness" means (a) the Senior Subordinated Notes,
(b) the Liberman Subordinated Debt and (c) any Indebtedness of any Credit Party,
incurred after the Effective Time with the prior written consent of the Required
Lenders, which matures in its entirety later than the Loans and by its terms (or
by the terms of the instrument under which it is outstanding and to which
appropriate reference is made in the instrument evidencing such Subordinated
Indebtedness) is made subordinate and junior in right of payment to the Loans
and to all of the Borrower's other obligations to the Lenders hereunder by
provisions satisfactory in form and substance to the Required Lenders.

         "Subsidiary" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the ordinary voting power or, in the case of a partnership, more
than 50% of the general partnership interests are, as of such date, owned,
controlled or held, or (b) that is, as of such date, otherwise Controlled, by
the parent or one or more subsidiaries of the parent or by the parent and one or
more subsidiaries of the parent. References herein to "Subsidiaries" shall,
unless the context requires otherwise, be deemed to be references to
Subsidiaries of the Borrower.

         "Suspended Losses" means the aggregate amount of losses and deductions
of Holdings I which have been taken into account by the shareholders of Holdings
I and disallowed under Code section 1366(d) (or successor provisions) in a prior
taxable year.

         "Syndication Agents" means General Electric Capital Corporation and
U.S. Bank, N.A., in their capacity as co-syndication agents for the Lenders
hereunder.

         "Tax Accountant" means any one of the five largest nationally
recognized independent accounting firms, or any other independent accounting
firm jointly approved by the Administrative Agent and the Borrower.

                                       35



         "Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.

         "Title Company" means one or more other title insurance companies
reasonably satisfactory to the Administrative Agent.

         "Total Debt" means, as of any date of determination thereof, the
Indebtedness of the Credit Parties (determined on a consolidated basis without
duplication in accordance with GAAP) plus obligations of Credit Parties to pay
any liquidated damages under any registration rights agreement entered into in
connection with any Indebtedness to the extent such liquidated damages remain
unpaid after the applicable due date under such registration rights agreement,
excluding (a) intercompany loans among the Credit Parties, (b) Indebtedness
under the Oaktree Note Purchase Documents to the extent such Indebtedness is
being repaid on the Closing Date and Indebtedness under the Holdings Securities
Purchase Documents, (c) the Liberman Subordinated Debt and (d) the Empire
Burbank Loan.

         "Total Leverage Ratio" means, as of any date of determination thereof,
the ratio of (a) the Total Debt to (b) EBITDA for the period of four consecutive
fiscal quarters ending on or most recently ended prior to such date.

         "Total Voting Power" means, with respect to any Person, the total
number of votes which holders of securities or other ownership interests having
the ordinary power to vote, in the absence of contingencies but after giving
effect to the exercise and/or conversion of all outstanding options, warrants,
and other securities which by their terms are convertible into voting
securities, are entitled to cast in the election of directors, general partners
or managers of such Person.

         "Transaction Costs" means, for any period, nonrecurring out-of-pocket
costs, fees and expenses (including attorneys' fees) which are incurred by
Holdings I and its Subsidiaries in connection with (a) the negotiation,
preparation and consummation of the transactions contemplated under this
Agreement and the Basic Documents and the Basic Documents (as defined in the
Existing Credit Agreement), including obtaining all regulatory approvals,
consents, filings or other matters required in connection with the transactions
described therein, including, any filing, registration or recording fees and
charges and including costs, fees and expenses incurred after the Original
Closing Date or the Closing Date, as applicable, (b) financing agreements and
proposed financing agreements related to this Agreement and the Basic Documents
and the Basic Documents (as defined in the Existing Credit Agreement) (including
without limitation all fees and expenses paid to Agents and their respective
counsel and like amounts paid in respect of obligations described in clause (a)
of the definition of Existing Debt and refinancing thereof) and (c) the
negotiation and consummation of the transactions contemplated under the El
Dorado Acquisitions Documents, the Guajillo Acquisitions Documents and all
financing agreements and proposed financing agreements related thereto including
any due diligence, engineering, consulting, environmental, travel and
accommodation, appraisal or other similar costs and expenses. The term
"Transaction Costs" shall include the initial and the routine periodic rating
agency fees related to the issuance of the Senior Subordinated Notes and the
maintenance of the rating(s) thereon but excluding any rating

                                       36



agency fees related to subsequent transactions unrelated to the Senior
Subordinated Notes and excluding any rating agency fees payable in connection
with an Acquisition.

         "Transactions" means with respect to the Borrower and each other Credit
Party, the execution, delivery and performance by the Borrower or such other
Credit Party of the Loan Documents (and the refinancing of the Existing Credit
Agreement), the Senior Subordinated Note Indenture and the documents related
thereto, the El Dorado Acquisitions Documents, the Guajillo Acquisitions
Documents, and the Holdings Amendment, the Oaktree Redemption Agreement (and the
repayment by Intermediate Holdings of the amounts outstanding under the Oaktree
Note Purchase Documents) to which the Borrower or such other Credit Party or
Holding Company is a party, the borrowing of Loans and the use of the proceeds
thereof, the issuance of Letters of Credit hereunder, and all transactions
contemplated by the foregoing documents.

         "Type" when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Adjusted
Base Rate.

         "UCC" means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.

         "U.S. Dollars" or "$" refers to lawful money of the United States of
          ------------      -
America.

         "Voluntary Relocation" means with respect to any television Broadcast
Station, any Relocation described in clause (1) of the definition of the term
Relocation. Without limiting the generality of the foregoing, the term Voluntary
Relocation shall include any "Voluntary Relocation" as defined in the Shop At
Home Acquisition Documents as in effect on March 20, 2001.

         "Wholly Owned Subsidiary" means, with respect to any Person at any
date, any corporation, limited liability company, partnership, association or
other entity of which securities or other ownership interests representing 100%
of the equity or ordinary voting power (other than directors' qualifying shares)
or, in the case of a partnership, 100% of the general partnership interests are,
as of such date, directly or indirectly owned, controlled or held by such Person
or one or more Wholly Owned Subsidiaries of such Person or by such Person and
one or more Wholly Owned Subsidiaries of such Person.

         "Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.

         1.2 Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Type (e.g., a "Base Rate
Loan" or a "LIBOR Loan"). In similar fashion, Borrowings may be classified and
referred to by Type.

         1.3 Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation".

                                       37



The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights. References in Articles 6 and 7 in respect of the affirmative
and negative covenants to be performed by the Credit Parties shall be
interpreted to mean, with respect to Article 6, that the Borrower will, and will
cause each of the other Credit Parties to, comply with such covenant, and, with
respect to Article 7, that the Borrower will not, and will not permit any of the
other Credit Parties to, violate such covenant.

         1.4 Accounting Terms; GAAP. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if the
Borrower notifies the Administrative Agent that the Borrower requests an
amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), the Administrative Agent and the Borrower shall negotiate in
good faith to amend any such provision to preserve the original intent thereof
in light of such change in GAAP (subject to the approval of the Required
Lenders); provided, further, however, regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance
herewith.

                                       38



                                    ARTICLE 2

                                   The Credits

     2.1 Revolving Credit Commitments.

         (a) Revolving Credit Loans. Subject to the terms and conditions set
forth herein, each Revolving Credit Lender agrees to make Revolving Credit Loans
to the Borrower from time to time during the Revolving Credit Availability
Period in an aggregate principal amount that will not result in such Lender's
Revolving Credit Loans exceeding such Lender's maximum Revolving Credit
Commitment; provided that the total Revolving Credit Exposure (after giving
effect to any requested Revolving Credit Borrowing) shall not at any time exceed
the total Revolving Credit Commitments. Within the foregoing limits and subject
to the terms and conditions set forth herein, the Borrower may borrow, prepay
and reborrow Revolving Credit Loans.

         (b) Revolving Credit Commitment Increases.

             (i)  In the event that the aggregate amount of the Revolving Credit
     Commitments as of the Closing Date is less than the Revolving Credit
     Maximum Amount, the Borrower shall have the right, at any time and from
     time to time prior to the Revolving Credit Conversion Date, by delivering
     written notice to the Administrative Agent, to request that the Revolving
     Credit Commitments be increased by an amount (an "Revolving Credit
     Commitment Increase") up to but not exceeding the difference between (x)
     the Revolving Credit Maximum Amount and (y) the aggregate amount of the
     Revolving Credit Commitments as of the date of such request for an
     Revolving Credit Commitment Increase.

             (ii) Upon receipt of a written request from the Borrower, the
     Administrative Agent and the Sole Lead Arranger shall attempt to arrange
     and syndicate such Revolving Credit Commitment Increase, by contacting one
     or more new lenders (the "New Lenders") or one or more existing Lenders to
     determine whether such New Lenders desire to enter into Revolving Credit
     Commitments, and/or whether any such existing Lender, in its sole
     discretion, desires to increase the aggregate amount of its Revolving
     Credit Commitments. Each such Revolving Credit Commitment Increase shall be
     arranged and syndicated by the Administrative Agent and the Sole Lead
     Arranger, and any New Lenders shall be selected by the Administrative Agent
     and the Sole Lead Arranger in consultation with the Borrower. The
     Administrative Agent's and the Sole Lead Arranger's agreements to arrange
     and syndicate any such Revolving Credit Commitment Increase shall not be
     deemed to constitute a commitment, or an offer, to provide, such Revolving
     Credit Commitment Increase or a representation, direct or implied, that
     such arrangement and syndication will be successful. The Borrower shall pay
     to the Administrative Agent and the Sole Lead Arranger such fees and
     expenses in connection with arranging and syndicating each such Revolving
     Credit Commitment Increase, as may be agreed by the Borrower, the
     Administrative Agent and the Sole Lead Arranger, to achieve a successful
     syndication of such Revolving Credit Commitment Increase, and no portion of
     such fees shall be allocable to any persons other than the

                                       39



     Administrative Agent, the Sole Lead Arranger, a Lender increasing the
     aggregate amount of its Revolving Credit Commitments or the New Lenders,
     unless otherwise agreed by the Administrative Agent and the Sole Lead
     Arranger. The Administrative Agent and the Sole Lead Arranger shall have no
     liability to the Borrower or the Lenders if the Administrative Agent and
     the Sole Lead Arranger are unable to successfully arrange and syndicate any
     requested Revolving Credit Commitment Increase. The Borrower may request
     Revolving Credit Commitment Increases on any number of occasions, subject
     to the conditions and provisions set forth herein. No Lender shall have any
     obligation to increase its Revolving Credit Commitment.

          (iii) If the Administrative Agent and the Sole Lead Arranger are able
     to successfully arrange and syndicate any requested Revolving Credit
     Commitment Increase, such Revolving Credit Commitment Increase shall become
     effective on the date specified by the Administrative Agent (each such date
     being referred to a "Revolving Credit Commitment Increase Date") provided
     that (x) no Default shall exist on the Revolving Credit Commitment Increase
     Date both before and after giving effect to such proposed Revolving Credit
     Commitment Increase; (y) the Borrower shall have paid all fees and expenses
     in connection with the arrangement and syndication of such Revolving Credit
     Commitment Increase; and (z) the Borrower shall have delivered or caused to
     be delivered to the Administrative Agent any certificates or other
     documents reasonably requested by the Administrative Agent in connection
     with such Revolving Credit Commitment Increase including amendments to
     Mortgages and endorsements to title insurance policies or new title
     insurance policies (if and to the extent it is determined that new title
     policies are necessary to insure the lien of the Mortgages with respect to
     the Revolving Credit Commitment Increase). In the event the Administrative
     Agent and the Sole Lead Arranger shall be unable to successfully arrange
     and syndicate any requested Revolving Credit Commitment Increase within
     thirty days of the date of any written request by the Borrower for such
     Revolving Credit Commitment Increase, such request by the Borrower shall be
     deemed to have expired and the Administrative Agent and the Sole Lead
     Arranger shall have no further obligation to continue such arrangement and
     syndication efforts; provided that the expiration of such thirty-day period
     shall not limit the Borrower's right to make one or more additional
     requests for an Revolving Credit Commitment Increase.

          (iv)  On each Revolving Credit Commitment Increase Date, subject to
     the satisfaction of the foregoing terms and conditions, and subject to the
     limitations set forth in clause (v) of this Section 2.1(b): (w) each New
     Lender shall enter into one or more Lender Joinder Agreements or other
     documents in form and substance reasonably satisfactory to the
     Administrative Agent, and upon execution of such Lender Joinder Agreements
     or other documents, such New Lender shall be deemed to be a "Lender" under
     this Agreement and the other Loan Documents; (x) the Revolving Credit
     Commitments shall be adjusted to take into account the Revolving Credit
     Commitments of the New Lenders and the increases, if any, of the Revolving
     Credit Commitments of the existing Lenders, and (y) each existing Lender
     who is increasing their Revolving Credit Commitments shall have returned to
     the Administrative Agent for cancellation its Revolving Credit Note, and
     the Borrower shall have executed and delivered to the Administrative Agent
     for the benefit of each New Lender and each existing Lender who

                                       40



          is increasing its Revolving Credit Commitments a new Revolving Credit
          Note, in each case, in the aggregate principal amount of such Lender's
          Revolving Credit Commitment after giving effect to the Revolving
          Credit Commitment Increase. Each of the Lenders hereby authorizes the
          Administrative Agent to revise Schedule 2.1 on each Revolving Credit
          Commitment Increase Date to reflect such increase without an amendment
          to this Agreement.

                  (v) Notwithstanding anything to the contrary set forth in this
          Section 2.1(b), in no event shall any Revolving Credit Commitment
          Increase result in (1) any increase or decrease in the amount of any
          Lender's Revolving Credit Commitment without such Lender's prior
          written consent, or (2) the aggregate amount of the Revolving Credit
          Commitments exceeding the Revolving Credit Maximum Amount.

          2.2 Loans and Borrowings.

              (a) Each Loan shall be made as part of a Borrowing consisting of
Loans made by the Lenders ratably in accordance with their respective
Commitments. The failure of any Lender to make any Loan required to be made by
it shall not relieve any other Lender of its obligations hereunder; provided
that the Commitments of the Lenders are several and no Lender shall be
responsible for any other Lender's failure to make Loans as required.

              (b) Subject to Section 2.13, each Borrowing shall be comprised
entirely of Base Rate Loans or LIBOR Loans as the Borrower may request in
accordance herewith. Each Lender at its option may make any LIBOR Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
Loan; provided that any exercise of such option shall not affect the obligation
of the Borrower to repay such Loan in accordance with the terms of this
Agreement.

              (c) At the commencement of each Interest Period for a LIBOR
Borrowing, such Borrowing shall be in an aggregate amount at least equal to
$500,000 or any greater multiple of $100,000. At the time that each Base Rate
Borrowing is made, such Borrowing shall be in an aggregate amount that is at
least equal to $100,000 or any greater multiple of $100,000; provided that (i) a
Base Rate Borrowing of Revolving Credit Loans may be in an aggregate amount that
is equal to the entire unused balance of the total Revolving Credit Commitments,
and (ii) a Base Rate Borrowing of Revolving Credit Loans may be in an amount
that is required to finance the reimbursement of an LC Disbursement as
contemplated by Section 2.4(e). Borrowings of more than one Type may be
outstanding at the same time; provided that there shall not at any time be more
than a total of ten LIBOR Borrowings outstanding.

          2.3 Requests for Borrowings.

              (a) To request a Borrowing, the Borrower shall notify the
Administrative Agent of such request by telephone (i) in the case of a LIBOR
Borrowing, not later than 1:00 p.m., Boston, Massachusetts time, three Business
Days before the date of the proposed Borrowing; provided that LIBOR Borrowings
shall not be available on the Closing Date unless otherwise consented to by the
Administrative Agent in writing, or (ii) in the case of a Base Rate Borrowing
not later than 1:00 p.m., Boston, Massachusetts time, one Business Day before
the

                                       41



date of the proposed Borrowing; provided that any such notice of a Base Rate
Borrowing to finance the reimbursement of an LC Disbursement as contemplated by
Section 2.4(e) may be given not later than 1:00 p.m., Boston, Massachusetts
time, on the date of the proposed Borrowing. Each such telephonic Borrowing
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Borrowing Request in a form
approved by the Administrative Agent and signed by the Borrower.

         (b) Each such telephonic and written Borrowing Request shall specify
the following information in compliance with Section 2.2:

             (i)   the aggregate amount of such Borrowing;

             (ii)  the effective date of such Borrowing, which shall be a
     Business Day;

             (iii) whether such Borrowing is to be a Base Rate Borrowing or a
     LIBOR Borrowing;

             (iv)  in the case of a LIBOR Borrowing, the initial Interest Period
     to be applicable thereto, which shall be a period contemplated by the
     definition of the term "Interest Period";

             (v)   the location and number of the Borrower's account to which
     funds are to be disbursed, which shall comply with the requirements of
     Section 2.5;

             (vi)  a detailed calculation of the Senior Leverage Ratio and,
     commencing on the first anniversary of the Closing Date, the Total Leverage
     Ratio, in each case based on the Senior Debt or the Total Debt (in each
     case, after giving effect to such Borrowing), as applicable, and EBITDA of
     the Credit Parties for the period of four consecutive fiscal quarters
     reported in the Compliance Certificate most recently delivered to the
     Administrative Agent demonstrating (A) that the Senior Leverage Ratio
     (after giving effect to such Borrowing) shall not exceed (1) for the period
     from the Closing Date to the date of delivery of the first Compliance
     Certificate required to be delivered pursuant to Section 6.1(c), the
     maximum Senior Leverage Ratio permitted on the Closing Date pursuant to
     Section 5.1(m)(ii) and (2) thereafter, the maximum Senior Leverage Ratio
     permitted under Section 7.10(b) for the fiscal quarter most recently ended
     and (B) that the Total Leverage Ratio (after giving effect to such
     Borrowing) shall not exceed the maximum Total Leverage Ratio permitted
     under Section 7.10(a) for the fiscal quarter most recently ended; provided
     that for purposes of calculating such ratios (x) prior to the delivery of
     the first Compliance Certificate required to be delivered hereunder, the
     Credit Parties shall use EBITDA reported in the last Compliance Certificate
     provided under the Existing Credit Agreement; provided that if the Borrower
     delivers a Compliance Certificate for the four-fiscal quarter period ended
     June 30, 2002 giving pro forma effect to the consummation of the El Dorado
     Acquisitions and the Guajillo Acquisitions as if such Acquisitions had
     occurred at the beginning of the applicable period and after reflecting
     certain expense deductions in connection with such Acquisitions reasonably
     acceptable to the Administrative Agent, then the Credit Parties shall use
     EBITDA as

                                       42



     reported in such Compliance Certificate and (y) for Loans being requested
     in connection with an Acquisition such ratios shall be calculated giving
     pro forma effect to the Acquisition as if such Acquisition has occurred at
     the beginning of the applicable period and after reflecting certain expense
     deductions in connection with such Acquisition reasonably acceptable to the
     Administrative Agent; and

              (vii) at any time when the outstanding Loans exceed $150,000,000
     minus the aggregate amount of all "Net Proceeds" of "Asset Sales" and
     "Relocations" applied by the Borrower or any of its "Restricted
     Subsidiaries" after the Closing Date to repay any term "Indebtedness" under
     any "Credit Facility" or to repay any revolving credit "Indebtedness" under
     any "Credit Facility" and effect a corresponding commitment reduction under
     a "Credit Facility" pursuant to Section 4.10 of the Senior Subordinated
     Note Indenture (all of the foregoing terms in quotation marks are used as
     defined in the Senior Subordinated Note Indenture), (A) a certification
     that the Loans, after giving effect to such Borrowing Request, are not
     incurred in violation of the Senior Subordinated Note Indenture, including
     a detailed calculation of the Leverage Ratio (as defined in the Senior
     Subordinated Note Indenture) demonstrating that such Leverage Ratio does
     not exceed 7.0 to 1 after giving effect to the Borrowing Request and (B)
     the Borrowing Request therefor must be in writing (and no telephonic
     Borrowing Requests shall be permitted).

         (c)  If no election as to the Type of Borrowing is specified, then the
requested Borrowing shall be a Base Rate Borrowing. If no Interest Period is
specified with respect to any requested LIBOR Borrowing, then the Borrower shall
be deemed to have selected an Interest Period of one month's duration. Promptly
following receipt of a Borrowing Request in accordance with this Section 2.3,
the Administrative Agent shall advise each Lender of the details thereof and of
the amount of such Lender's Loan to be made as part of the requested Borrowing.

     2.4 Letters of Credit.

         (a)  General. Subject to the terms and conditions set forth herein, in
addition to the Revolving Credit Loans provided for in Section 2.1(a), the
Borrower may request the issuance of Letters of Credit for its own account by an
Issuing Lender, in a form reasonably acceptable to such Issuing Lender, at any
time and from time to time during the Revolving Credit Availability Period. In
addition to such form, at the time of such request, the Borrower shall also
deliver to the Administrative Agent the information required to be delivered
pursuant to Section 2.3(b)(vi) (assuming, for the calculation of the Senior
Leverage Ratio and the Total Leverage Ratio, the issuance of the requested
Letter of Credit) and, if applicable, Section 2.3(b)(vii). Letters of Credit
issued hereunder shall constitute utilization of the Revolving Credit
Commitments. In the event of any inconsistency between the terms and conditions
of this Agreement and the terms and conditions of any form of letter of credit
application or other agreement submitted by the Borrower to, or entered into by
the Borrower with, an Issuing Lender relating to any Letter of Credit, the terms
and conditions of this Agreement shall control.

         (b)  Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an

                                       43



outstanding Letter of Credit), the Borrower shall hand deliver or send by
telephonic facsimile (fax) (or transmit by electronic communication, if
arrangements for doing so have been approved by such Issuing Lender) to an
Issuing Lender and the Administrative Agent (two Business Days before the date
of the requested date of issuance, amendment, renewal or extension) a notice
requesting the issuance of a Letter of Credit, or identifying the Letter of
Credit to be amended, renewed or extended, the date of issuance, amendment,
renewal or extension, the date on which such Letter of Credit is to expire
(which shall comply with paragraph (c) of this Section 2.4), the amount of such
Letter of Credit, the name and address of the beneficiary thereof, whether such
Letter of Credit is a documentary or trade Letter of Credit or a standby Letter
of Credit, and such other information as shall be necessary to prepare, amend,
renew or extend such Letter of Credit. If requested by such Issuing Lender, the
Borrower also shall submit a letter of credit application on such Issuing
Lender's standard form in connection with any request for a Letter of Credit. A
Letter of Credit shall be issued, amended, renewed or extended only if (and upon
issuance, amendment, renewal or extension of each Letter of Credit the Borrower
shall be deemed to represent and warrant that), after giving effect to such
issuance, amendment, renewal or extension (i) the aggregate LC Exposure of the
Issuing Lender (determined for these purposes without giving effect to the
participations therein of the Revolving Credit Lenders pursuant to paragraph (d)
of this Section 2.4) shall not exceed $5,000,000 and (ii) the total Revolving
Credit Exposure shall not exceed the total Revolving Credit Commitments. If the
Issuing Lender is not the Administrative Agent, the Issuing Lender shall notify
the Administrative Agent promptly in writing of the issuance, amendment, renewal
or extension of any Letter of Credit, with a summary of the pertinent terms
thereof and shall provide the Administrative Agent with a copy of such Letter of
Credit and related application and any other documentation related thereto.

         (c) Expiration Date. Each Letter of Credit shall expire (without giving
effect to any extension thereof by reason of an interruption of business) at or
prior to the close of business on the earlier of (i) the date 365 days, in the
case of standby Letters of Credit, or 180 days, in the case of documentary or
trade Letters of Credit, after the date of the issuance of such Letter of Credit
(or, in the case of any renewal or extension thereof, 365 days or 180 days, as
applicable, after such renewal or extension) provided that any such Letter of
Credit may provide for automatic extensions thereof to a date not later than 365
days, in the case of standby Letters of Credit, or 180 days, in the case of
documentary or trade Letters of Credit, beyond its current expiration date, and
(ii) the date that is five Business Days prior to the Revolving Credit Maturity
Date. No Letter of Credit may be extended beyond the date that is five Business
Days prior to the Revolving Credit Maturity Date.

         (d) Participations. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) by an Issuing
Lender, and without any further action on the part of such Issuing Lender, such
Issuing Lender hereby grants to each Revolving Credit Lender, and each Revolving
Lender hereby acquires from such Issuing Lender, a participation in such Letter
of Credit equal to such Revolving Credit Lender's Applicable Percentage of the
aggregate amount available to be drawn under such Letter of Credit. In
consideration and in furtherance of the foregoing, each Revolving Credit Lender
hereby absolutely and unconditionally agrees to pay to the Administrative Agent,
for the account of such Issuing Lender, such Revolving Credit Lender's
Applicable Percentage of each LC Disbursement made by such Issuing Lender and
not reimbursed by the Borrower on the date due as provided in paragraph (e) of
this Section 2.4, or of any reimbursement payment required to be

                                       44



refunded to the Borrower for any reason. Each Revolving Credit Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this paragraph in respect of Letters of Credit is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including any
amendment, renewal or extension of any Letter of Credit or the occurrence and
continuance of a Default or reduction or termination of the Commitments, and
that each such payment to the Administrative Agent, for the account of such
Issuing Lender shall be made without any offset, abatement, withholding or
reduction whatsoever.

               (e) Reimbursement. If an Issuing Lender shall make any LC
Disbursement in respect of a Letter of Credit, the Borrower shall reimburse
(each a "Reimbursement Obligation") such Issuing Lender in respect of such LC
Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 1:00 p.m., Boston, Massachusetts time, on (i) the
Business Day that the Borrower receives notice of such LC Disbursement, if such
notice is received prior to 11:00 a.m., Boston, Massachusetts time; or (ii) the
Business Day immediately following the day that the Borrower receives such
notice, if such notice is not received prior to such time, provided that the
Borrower may, subject to the conditions to borrowing set forth herein, request
in accordance with Section 2.3 that such payment be financed with a Revolving
Credit Base Rate Borrowing in an equivalent amount and, to the extent so
financed, the Borrower's obligation to make such payment shall be discharged and
replaced by the resulting Revolving Credit Base Rate Borrowing.

         If the Borrower fails to make such payment when due, the Administrative
Agent shall notify each Revolving Credit Lender of the applicable LC
Disbursement, the payment then due from the Borrower in respect thereof and such
Revolving Credit Lender's Applicable Percentage thereof. Promptly following
receipt of such notice, each Revolving Credit Lender shall pay to the
Administrative Agent its Applicable Percentage of the payment then due from the
Borrower, in the same manner as provided in Section 2.5 with respect to
Revolving Credit Loans made by such Lender (and Section 2.5 shall apply to the
payment obligations of the Revolving Credit Lenders, treating each such payment
as a Loan for this purpose), and the Administrative Agent shall promptly pay to
the applicable Issuing Lender the amounts so received by it from the Revolving
Credit Lenders. Promptly following receipt by the Administrative Agent of any
payment from the Borrower pursuant to this paragraph, the Administrative Agent
shall distribute such payment to the applicable Issuing Lender or, to the extent
that the Revolving Credit Lenders have made payments pursuant to this paragraph
to reimburse such Issuing Lender, then to such Lenders and such Issuing Lender
as their interests may appear. Any payment made by a Revolving Credit Lender
pursuant to this paragraph to reimburse an Issuing Lender for any LC
Disbursement shall not constitute a Loan and shall not relieve the Borrower of
its obligation to reimburse such LC Disbursement.

                                       45



           (f) Obligations Absolute.

               (i)  The Borrower's obligation to reimburse LC Disbursements as
     provided in paragraph (e) of this Section 2.4 shall be absolute,
     unconditional and irrevocable, and shall be performed strictly in
     accordance with the terms of this Agreement under any and all circumstances
     whatsoever and irrespective of (A) any lack of validity or enforceability
     of any Letter of Credit, or any term or provision therein, (B) any draft or
     other document presented under a Letter of Credit proving to be forged,
     fraudulent or invalid in any respect or any statement therein being untrue
     or inaccurate in any respect, (C) payment by the Issuing Lender under a
     Letter of Credit against presentation of a draft or other document that
     does not comply strictly with the terms of such Letter of Credit and (D)
     any other event or circumstance whatsoever, whether or not similar to any
     of the foregoing, that might, but for the provisions of this Section 2.4,
     constitute a legal or equitable discharge of the Borrower's obligations
     hereunder.

               (ii) Neither the Administrative Agent, any Lender nor Issuing
     Lender, nor any of their Related Parties, shall have any liability or
     responsibility by reason of or in connection with the issuance or transfer
     of any Letter of Credit by the Issuing Lender or any payment or failure to
     make any payment thereunder (irrespective of any of the circumstances
     referred to in clause (f)(i) above), or any error, omission, interruption,
     loss or delay in transmission or delivery of any draft, notice or other
     communication under or relating to any Letter of Credit (including any
     document required to make a drawing thereunder), any error in
     interpretation of technical terms or any consequence arising from causes
     beyond the control of the Issuing Lender; provided that nothing in this
     Section 2.4 shall be construed to excuse the Issuing Lender from liability
     to the Borrower to the extent of any direct damages (as opposed to
     consequential damages, claims in respect of which are hereby waived by the
     Borrower to the extent permitted by applicable law) suffered by the
     Borrower that are caused by the Issuing Lender's gross negligence or
     willful misconduct when determining whether drafts and other documents
     presented under a Letter of Credit comply with the terms thereof. Subject
     in all respects to the foregoing, the parties hereto expressly agree that:

                    (A) the Issuing Lender may accept documents that appear on
               their face to be in substantial compliance with the terms of a
               Letter of Credit without responsibility for further
               investigation, regardless of any notice or information to the
               contrary, and may make payment upon presentation of documents
               that appear on their face to be in substantial compliance with
               the terms of such Letter of Credit;

                    (B) the Issuing Lender shall have the right, in its sole
               discretion, to decline to accept such documents and to decline to
               make such payment if such documents are not in strict compliance
               with the terms of such Letter of Credit; and

                    (C) this clause (f)(ii) shall establish the standard of care
               to be exercised by the Issuing Lender when determining whether
               drafts and other documents presented under a Letter of Credit
               comply with the terms thereof (and

                                       46



         the parties hereto hereby waive, to the extent permitted by applicable
         law, any standard of care inconsistent with the foregoing).

         (g) Disbursement Procedures. The Issuing Lender shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under any Letter of Credit. The Issuing Lender shall promptly
notify the Administrative Agent and the Borrower by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Lender has made or
will make an LC Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve the Borrower of its obligation to
reimburse the Issuing Lender and the Revolving Credit Lenders with respect to
any such LC Disbursement.

         (h) Interim Interest. If the Issuing Lender shall make any LC
Disbursement in respect of any Letter of Credit, then, unless the Borrower shall
reimburse such LC Disbursement in full on the date such LC Disbursement is made,
the unpaid amount thereof shall bear interest, for each day from and including
the date such LC Disbursement is made to but excluding the date that the
Borrower reimburses such LC Disbursement, at the rate per annum then applicable
to Revolving Credit Base Rate Loans; provided that, if the Borrower fails to
reimburse such LC Disbursement when due pursuant to paragraph (e) of this
Section 2.4, then interest calculated in accordance with Section 2.12(c) shall
accrue on the unpaid amount thereof. Interest accrued pursuant to this paragraph
shall be for the account of the Issuing Lender, except that interest accrued on
and after the date of payment by any Revolving Credit Lender pursuant to
paragraph (e) of this Section 2.4 to reimburse the Issuing Lender shall be for
the account of such Lender to the extent of such payment.

         (i) Cash Collateralization. If either (i) an Event of Default shall
occur and be continuing and the Borrower receives notice from the Administrative
Agent or the Required Lenders demanding the deposit of cash collateral pursuant
to this paragraph, or (ii) the Borrower shall be required to provide cover for
LC Exposure pursuant to Section 2.9(a) or 2.10(b), the Borrower shall
immediately deposit with the Issuing Lender an amount in cash equal to, in the
case of an Event of Default, the LC Exposure as of such date plus any accrued
and unpaid interest thereon and, in the case of cover pursuant to Section 2.9(a)
or 2.10(b), the amount required under Section 2.9(a) or 2.10(b), as the case may
be; provided that the obligation to deposit such cash collateral shall become
effective immediately, and such deposit shall become immediately due and
payable, without demand or other notice of any kind, upon the occurrence of any
Event of Default described in clause (g) or (h) of Section 8.1. Such deposit
shall be held by the Administrative Agent as collateral in the first instance
for the LC Exposure under this Agreement and thereafter for the payment of any
other obligations of the Credit Parties hereunder.

     2.5 Funding of Borrowings.

         (a) Each Lender shall make each Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds by 12:00
noon, Boston, Massachusetts time to the account of the Administrative Agent most
recently designated by it for such purpose by notice to the Lenders. The
Administrative Agent will make such Loans available to the Borrower by promptly
crediting the amounts so received, in like funds, to an account of the Borrower
maintained with the Administrative Agent in Boston, Massachusetts and

                                       47



designated by the Borrower in the applicable Borrowing Request; provided that
Revolving Credit Base Rate Loans made to finance the reimbursement of an LC
Disbursement under any Letter of Credit as provided in Section 2.4(e) shall be
remitted by the Administrative Agent to the Issuing Lender.

         (b) Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
2.5 and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender (and if the applicable Lender fails to pay immediately upon
demand, the Borrower) agrees to pay to the Administrative Agent forthwith on
demand such corresponding amount with interest thereon, for each day from and
including the date such amount is made available to the Borrower to but
excluding the date of payment to the Administrative Agent, at the Federal Funds
Effective Rate. If such Lender pays such amount to the Administrative Agent,
then such amount shall constitute such Lender's Loan included in such Borrowing.
Nothing in this Section 2.5 shall be deemed to relieve any Lender from its
obligation to fulfill its Commitments to the extent required by this Agreement
or to prejudice any rights that the Borrower may have against any Lender as a
result of any default by such Lender hereunder.

     2.6 Interest Elections.

         (a) Each Borrowing initially shall be of the Type specified in the
applicable Borrowing Request and, in the case of a LIBOR Borrowing, shall have
an initial Interest Period as specified in such Borrowing Request. Thereafter,
the Borrower may elect to convert such Borrowing to a different Type or to
continue such Borrowing and, in the case of a LIBOR Borrowing, may elect
Interest Periods therefor, all as provided in this Section 2.6. The Borrower may
elect different options for continuations and conversions with respect to
different portions of the affected Borrowing, in which case each such portion
shall be allocated ratably among the Lenders holding the Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing.

         (b) To make an election pursuant to this Section 2.6, the Borrower
shall notify the Administrative Agent of such election by telephone by the time
that a Borrowing Request would be required under Section 2.3(a) if the Borrower
were requesting a Borrowing of the Type resulting from such election to be made
on the effective date of such election. Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Interest Election Request
signed by the Borrower.

         (c) Each telephonic and written Interest Election Request shall specify
the following information in compliance with Section 2.2:

             (i) the Borrowing to which such Interest Election Request applies
     and, if different options for continuations or conversions are being
     elected with respect to

                                       48



     different portions thereof, the portions thereof to be allocated to each
     resulting Borrowing (in which case the information to be specified pursuant
     to clauses (iii) and (iv) below shall be specified for each resulting
     Borrowing);

              (ii)  the effective date of the election made pursuant to such
     Interest Election Request, which shall be a Business Day;

              (iii) whether the resulting Borrowing is to be a Base Rate
     Borrowing or a LIBOR Borrowing; and

              (iv)  if the resulting Borrowing is a LIBOR Borrowing, the
     Interest Period to be applicable thereto after giving effect to such
     election, which shall be a period contemplated by the definition of the
     term "Interest Period".

If any such Interest Election Request requests a LIBOR Borrowing but does not
specify an Interest Period, then the Borrower shall be deemed to have selected
an Interest Period of one month's duration.

          (d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each affected Lender of the details thereof
and of such Lender's portion of each resulting Borrowing.

          (e) If the Borrower fails to deliver a timely Interest Election
Request with respect to a LIBOR Borrowing prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided
herein, at the end of such Interest Period such Borrowing shall be converted to
a Base Rate Borrowing. Notwithstanding any contrary provision hereof, if an
Event of Default has occurred and is continuing and the Administrative Agent, at
the request of the Required Lenders, so notifies the Borrower, then, so long as
an Event of Default is continuing (i) no outstanding Borrowing may be converted
to or continued as a LIBOR Borrowing and (ii) unless repaid, each LIBOR
Borrowing shall be converted to a Base Rate Borrowing at the end of the Interest
Period applicable thereto.

          (f) The Borrower shall not be obligated to deliver a Borrowing Request
in connection with any election to convert any Borrowing to a different Type or
to continue any Borrowing or, in the case of a LIBOR Borrowing, any election of
an Interest Period therefor pursuant this Section 2.6.

     2.7  Termination and Reduction of Commitments.

          (a) Unless previously terminated in accordance with the terms hereof,
the Revolving Credit Commitments shall terminate at the close of business on the
Revolving Credit Maturity Date.

          (b) The aggregate amount of the Revolving Credit Commitments shall be
automatically reduced at the close of business on each Revolving Credit
Commitment Reduction Date set forth in column (A) below, each a "Revolving
Credit Commitment Reduction Date", by the amount set forth in column (B) below,
in each case, opposite such Revolving Credit Commitment Reduction Date:

                                       49



                           (A)                           (B)
                     Revolving Credit                 Amount of
                Commitment Reduction Date       Commitment Reduction

           June 30, and September 30, 2005         $ 5,333,333.33

           December 31, 2005                       $ 5,333,333.34

           March 31, June 30, September 30,
           and December 31, 2006                   $ 4,000,000.00

           March 31, June 30, September 30,
           and December 31, 2007                   $ 8,000,000.00

           March 31, June 30, September 30,
           and December 31, 2008                   $ 8,000,000.00

           March 31, and June 30, 2009             $21,333,333.33

           September 30, 2009                      $21,333,333.34


; provided that, for each Revolving Credit Commitment Reduction Date, the amount
of the reduction to the Revolving Credit Commitments on such date shall be
increased by an amount equal to the product of (x) the aggregate Revolving
Credit Commitment Increases as of the Revolving Credit Conversion Date, if any,
times (y) a fraction, the numerator of which is the amount of the reduction to
the Revolving Credit Commitments on such date as set forth in column (B) above
and the denominator of which is the aggregate original amount of the Revolving
Credit Commitments. The amount of any optional reductions of Revolving Credit
Commitments under Section 2.7(c) shall be applied to reduce all remaining
Revolving Credit Commitment reductions under this Section 2.7(b) in the order of
such scheduled reductions.

           (c) The Borrower may at any time or from time to time reduce, the
Commitments; provided that (i) each reduction of the Commitments shall be in an
amount that is at least equal to $500,000 or any greater multiple of $100,000,
and (ii) the Borrower shall not terminate or reduce the Revolving Credit
Commitments if, after giving effect to any concurrent repayment in accordance
with Section 2.9 or prepayment in accordance with Section 2.10 of the Loans, the
total Revolving Credit Exposure would exceed the total Revolving Credit
Commitments.

           (d) The Borrower shall notify the Administrative Agent of any
election to terminate or reduce Commitments under paragraph (c) of this Section
2.7 at least three Business Days prior to the effective date of such termination
or reduction, specifying such election and the effective date thereof. Promptly
following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each notice delivered by the Borrower pursuant
to this Section 2.7 shall be irrevocable; provided that a notice of termination
of Revolving Credit

                                       50



Commitments delivered by the Borrower may state that such notice is conditioned
upon the effectiveness of other credit facilities, in which case such notice may
be revoked by the Borrower (by notice to the Administrative Agent on or prior to
the specified effective date) if such condition is not satisfied. Any
termination or reduction of Revolving Credit Commitments shall be permanent.
Each reduction of Revolving Credit Commitments shall be made ratably among the
Revolving Credit Lenders in accordance with their respective Revolving Credit
Commitments.

     2.8 Mitigation Obligations; Replacement of Lenders.

         (a) If any Lender or the Issuing Lender requests compensation under
Section 2.14, or if the Borrower is required to pay any additional amount to any
Lender or the Issuing Lender or any Governmental Authority for the account of
any Lender or the Issuing Lender pursuant to Section 2.16, then such Lender or
the Issuing Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Loans or Letters of Credit hereunder, or to
assign its rights and obligations hereunder to another of its offices, branches
or Affiliates, if, in the judgment of such Lender or the Issuing Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 2.14 or 2.16, as the case may be, in the future and (ii) would not
subject such Lender or the Issuing Lender to any material unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender or the Issuing
Lender. The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender or the Issuing Lender in connection with any such
designation or assignment.

         (b) If any Lender requests compensation under Section 2.14, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.16,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 10.4), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the Borrower
shall have received the prior written consent of the Administrative Agent (and,
if a Revolving Credit Commitment is being assigned, the Issuing Lender), which
consents shall not unreasonably be withheld or delayed, (ii) such Lender shall
have received payment of an amount equal to the outstanding principal of its
Loans (and participations in LC Disbursements), accrued interest thereon,
accrued fees and all other amounts payable to it hereunder, from the assignee
(to the extent of such outstanding principal and accrued interest and fees) or
the Borrower (in the case of all other amounts) and (iii) in the case of any
such assignment resulting from a claim for compensation under Section 2.14 or
payments required to be made pursuant to Section 2.16, such assignment will
result in a reduction in such compensation or payments. A Lender shall not be
required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the
Borrower to require such assignment and delegation cease to apply.

         (c) If a Lender (a "Non-Consenting Lender") refuses to consent to an
amendment, modification or waiver of this Agreement that, pursuant to Section
10.2, requires

                                       51



consent of 100% of the Lenders (any such Lender, a "Subject Lender"), so long as
(i) no Event of Default shall have occurred and be continuing and the Borrower
has obtained a written commitment from another Lender or an Eligible Assignee to
purchase at par (plus accrued interest, fees and other amounts payable to the
Subject Lender hereunder) the Subject Lender's Loans and assume the Subject
Lender's Commitments and all other obligations of the Subject Lender hereunder,
(ii) such Lender is not an Issuing Lender with respect to any Letters of Credit
outstanding (unless all such Letters of Credit are terminated or arrangements
satisfactory to such Issuing Lender (such as a "back-to-back" letter of credit)
are made), (iii) at such time there is no more than one Non-Consenting Lender
and (iv) if applicable, the Subject Lender is unwilling to withdraw its refusal
to consent within 2 Business Days after receipt by the Subject Lender and
Administrative Agent of a written request to do so from the Borrower, the
Borrower may require the Subject Lender to assign all of its Loans and
Commitments to such other Lender, Lenders, Eligible Assignee or Eligible
Assignees pursuant to the provisions of Section 10.4, provided that, prior to or
concurrently with such replacement, (1) the Borrower has paid to the Subject
Lender all amounts required to be paid to such Lender under this Agreement
through the effective date of the assignment, (2) the processing fee required to
be paid by Section 10.4(b)(iv) shall have been paid by the Borrower or the
Assignee to Administrative Agent, (3) all of the requirements for such
assignment contained in Section 10.4, including the consent of Administrative
Agent (if required) and the receipt by Administrative Agent of an executed
Assignment and Acceptance Agreement (which each Subject Lender shall be
obligated to provide with respect to its interest in the Loans in connection
with the Borrower's exercise of its rights under this subsection) and other
supporting documents, have been fulfilled and (4) each assignee shall consent,
at the time of such assignment, to each matter in respect of which such Subject
Lender was a Non-Consenting Lender. Notwithstanding the foregoing no Subject
Lender shall be obligated to assign its Loans unless such Subject Lender
receives payment of the purchase price and all other amounts described in clause
(i) above as a condition to such assignment.

     2.9 Repayment of Loans; Evidence of Debt.

         (a) The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each Revolving Credit Lender the then
unpaid principal amount of such Lender's Revolving Credit Loans on the Revolving
Credit Maturity Date. In addition, if following any reduction in the Revolving
Credit Commitments or at any other time the aggregate principal amount of the
Revolving Credit Exposure shall exceed the aggregate Revolving Credit
Commitments, the Borrower shall first, repay Revolving Credit Loans, and second,
provide cover for LC Exposure as specified in Section 2.4(i) in an aggregate
amount equal to such excess.

         (b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.

         (c) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) the amount of any sum received

                                       52



by the Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof.

          (d) The entries made in the accounts maintained pursuant to paragraph
(b) or (c) of this Section 2.9 shall be prima facie evidence of the existence
and amounts of the obligations recorded therein absent manifest error; provided
that the failure of any Lender or the Administrative Agent to maintain such
accounts or any error therein shall not in any manner affect the obligation of
the Borrower to repay the Loans in accordance with the terms of this Agreement.

          (e) Prior to the Closing Date or if any Lender enters into a
Commitment after the Closing Date on the date of such Commitment, the Borrower
shall prepare, execute and deliver to each Revolving Credit Lender, a Revolving
Credit Note in the principal amount of such Lender's Revolving Credit
Commitment. Thereafter, the Loans of each Lender evidenced by each such
promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 10.4) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns)
unless, in connection with an assignment of all or any portion of a promissory
note and interest thereon, the assignee informs the Administrative Agent in
writing that it does not wish that its Loans be evidenced by promissory notes.

     2.10 Prepayment of Loans.

          (a) Optional Prepayments. The Borrower shall have the right at any
time and from time to time to prepay any Borrowing in whole or in part, without
premium or penalty (other than LIBOR Loan breakage costs as provided in Section
2.15), subject to prior notice in accordance with paragraph (d) of this Section
2.10 and provided that each such prepayment shall be in an amount that is at
least equal to $500,000 or any greater multiple of $100,000. Each prepayment of
Loans shall be applied in accordance with paragraph (c) of this Section 2.10.

          (b) Mandatory Prepayments. The Borrower shall make prepayments of the
Loans hereunder (and reduce the Commitments hereunder to the extent provided
below in clauses (i) and (ii)) as follows:


              (i) Sale of Assets. Without limiting the obligation of the
     Borrower to obtain the consent of the Required Lenders to any Disposition
     not otherwise permitted hereunder, the Borrower agrees, on or prior to the
     occurrence of any Disposition or series of Dispositions by any Credit Party
     with aggregate Net Cash Payments in excess of $3,500,000 in any fiscal
     year, to deliver to the Administrative Agent a statement certified by a
     Financial Officer of the Borrower, in form and detail reasonably
     satisfactory to the Administrative Agent, of the estimated amount of the
     Net Cash Payments of such Disposition that will (on the date of such
     Disposition) be received by any Credit Party in cash, indicating on such
     certificate, whether the Borrower intends to reinvest such Net Cash
     Payments or will be prepaying the Loans, as hereinafter provided, and the
     Borrower will be obligated to either (A) reinvest such Net Cash Payments
     within 170 days after receipt into assets used in a Permitted Line of
     Business pursuant to one or more Capital Expenditures permitted hereunder
     or Acquisitions permitted hereunder; provided that no

                                       53



          reinvestment of Net Cash Payments shall be permitted under this clause
          (A): (x) for the acquisition of fee interests in real property
          (excluding any real property received or acquired in any Acquisition
          or Relocation) in excess of $5,000,000 made in the aggregate after the
          Closing Date or (y) if and to the extent that such Net Cash Payments
          would be required to be used to repay any Subordinated Indebtedness or
          Holding Company Debt or purchase or repurchase any notes issued
          thereunder or (B) prepay the Loans hereunder (and provide cover for LC
          Exposure as specified in Section 2.4(i)), and the Commitments
          hereunder shall be subject to automatic reduction, as follows:

                    (x) within one Business Day after the date of such
                    Disposition, or on the date (the "Reinvestment Date") which
                    is 170 days after such date if the Borrower had indicated on
                    the certificate delivered as hereinabove required that it
                    intended to reinvest the Net Cash Payments of such
                    Disposition, in an aggregate amount equal to 100% of such
                    estimated or non-reinvested (as applicable) amount of such
                    Net Cash Payments, to the extent received (and not
                    reinvested as provided above) by any Credit Party in cash on
                    the date of such Disposition or, if applicable, the
                    Reinvestment Date; and

                    (y) thereafter, quarterly, on the date of the delivery by
                    the Borrower to the Administrative Agent pursuant to Section
                    6.1 of the financial statements for any quarterly fiscal
                    period or fiscal year, to the extent any Credit Party shall
                    receive Net Cash Payments during the quarterly fiscal period
                    ending on the date of such financial statements in cash
                    under deferred payment arrangements or Disposition
                    Investments entered into or received in connection with any
                    Disposition, an amount equal to (A) 100% of the aggregate
                    amount of such Net Cash Payments minus (B) any transaction
                    expenses associated with Dispositions and not previously
                    deducted in the determination of Net Cash Payments plus (or
                    minus, as the case may be) (C) any other adjustment received
                    or paid by any Credit Party pursuant to the respective
                    agreements giving rise to Dispositions and not previously
                    taken into account in the determination of the Net Cash
                    Payments.

                    (ii) Proceeds of Casualty Events. Upon the date 180 days
          following the receipt by any Credit Party of the proceeds of
          insurance, condemnation awards or other compensation in respect of any
          Casualty Event affecting any property of any Credit Party (or upon
          such earlier date as such Credit Party, as the case may be, shall have
          determined not to repair or replace the property affected by such
          Casualty Event), to the extent of Net Cash Payments in excess of
          $250,000 per occurrence and $500,000 for all occurrences after the
          Closing Date (except that such exclusions shall not apply after the
          occurrence and during the continuation of an Event of Default) the
          Borrower shall prepay the Loans (and provide cover for LC Exposure as
          specified in Section 2.4(i)), and, if applicable, the Commitments
          shall be subject to automatic reduction, in an aggregate amount, if
          any, equal to 100% of the Net Cash Payments from such Casualty Event
          not theretofore applied or committed to be applied to the repair or
          replacement of such property (it being understood that if Net Cash
          Payments committed to be applied are not

                                       54



          in fact applied within 360 days after receipt thereof, then such Net
          Cash Payments shall be applied to the prepayment of Loans, cover for
          LC Exposure and, reduction of Commitments as provided in this clause
          (ii) at the expiration of such 360-day period), such prepayment and
          reduction to be effected in each case in the manner and to the extent
          specified in paragraph (c) of this Section 2.10.

                    (iii) On the date of the incurrence by the Borrower of any
          Indebtedness under the proviso to Section 7.1(k), the Borrower shall
          deliver to the Administrative Agent a statement certified by a
          financial officer of the Borrower, in form and detail reasonably
          satisfactory to the Administrative Agent, of the estimated amount of
          the net cash proceeds (net of all legal, underwriting and other fees,
          costs and expenses incurred in connection with the incurrence of such
          Indebtedness) from such incurrence of such Indebtedness that will (on
          the date of such incurrence of Indebtedness) be received by the
          Borrower and the Borrower will, prepay the Loans hereunder (and
          provide cover for LC Exposure as specified in Section 2.4(i)), with no
          reduction of the Commitments hereunder, on the date of such incurrence
          of Indebtedness, in an aggregate amount equal to the lesser of (A)
          100% of the net cash proceeds (net of all legal, underwriting and
          other fees, costs and expenses incurred in connection with the
          incurrence of such Indebtedness) from such incurrence of Indebtedness
          received by the Borrower and (B) the sum of the aggregate amount of
          Loans outstanding plus LC Exposure then in effect, and such prepayment
          (other than the amount provided to cover LC Exposure) shall be shared
          and applied ratably among the Revolving Credit Lenders in proportion
          to their respective Revolving Credit Commitments (with no reduction to
          the Revolving Credit Commitments).

               Notwithstanding anything herein to the contrary, (i) in the event
          any radio or television station owned by any Credit Party is sold, as
          permitted by paragraph (f) of Section 7.4, during the continuance of
          any Event of Default, all Net Cash Payments shall be applied in the
          manner specified in paragraph (c) of this Section 2.10, and (ii) in
          the event that any of the Credit Parties shall have consummated (I)
          any "Asset Sale" (as defined in the Senior Subordinated Note
          Indenture) or (II) any "Sale of the Company" (as defined in the
          Holdings Securities Purchase Documents) that, in either case, would
          not be deemed a Disposition requiring a prepayment under this Section
          2.10(b), in any such case, the Credit Parties shall nonetheless prepay
          the Loans to the extent that the Senior Subordinated Note Indenture or
          the Holdings Securities Purchase Documents would require any
          prepayment or redemption of the Senior Subordinated Notes or any
          Holding Company Debt or warrants issued by any Holding Company
          pursuant to the Holdings Securities Purchase Documents, respectively.
          Prepayments of Loans (and cover for LC Exposure) and reductions of
          Commitments shall be effected in each case in the manner and to the
          extent specified in paragraph (c) of this Section 2.10.

               (c)  Application. The Borrower shall have the right at any time
to cause voluntary prepayments pursuant to subsection (a) of this Section to be
applied to prepay the Revolving Credit Loans, and such prepayment shall be
applied ratably among the Revolving Credit Lenders in proportion to their
respective Revolving Credit Commitments (with no reduction to the Revolving
Credit Commitments). Subject to the preceding sentence and subject to the
prepayment made pursuant to the subsection (b)(iii) of this Section being
applied in

                                       55



accordance with such subsection (b)(iii) (with no reduction to the Revolving
Credit Commitments), in the event of any optional prepayment of Borrowings
pursuant to subsection (a) of this Section, or any mandatory prepayment of Loans
pursuant to subsection (b) of this Section, the proceeds shall be applied as
follows:

               (i)  first, to the extent that Revolving Credit Exposure shall at
     such time exceed the total Revolving Credit Commitments, such prepayment
     shall be applied to the repayment of Revolving Credit Loans to be shared
     and applied ratably among the Revolving Credit Lenders in proportion to
     their respective Revolving Credit Commitments (with no reduction to the
     Revolving Credit Commitments); and

               (ii) second, (A) the amount of any optional prepayment shall be
     applied to the repayment of Revolving Credit Loans, and (B) the amount of
     any mandatory prepayment shall be applied first, to the repayment of
     Revolving Credit Loans and, second, to provide cover for LC Exposure, and,
     in the case of clause (B), to the simultaneous permanent reduction of the
     Revolving Credit Commitments, in each case to be shared and applied ratably
     among the Revolving Credit Lenders in proportion to their respective
     Revolving Credit Commitments. Each such reduction of the Revolving Credit
     Commitments shall be applied to reduce all remaining scheduled Revolving
     Credit Commitment reductions under Section 2.7(b) pro rata based upon the
     respective amounts of such scheduled reductions. Optional prepayments
     pursuant to the first sentence of this clause (c) shall not reduce the
     remaining scheduled Revolving Credit Commitment reductions.

           (d) Notification of Prepayments. The Borrower shall notify the
Administrative Agent by telephone (confirmed by telecopy) of any prepayment
under Sections 2.10(a) or 2.10(b) not later than 1:00 p.m., Boston,
Massachusetts time, three Business Days before the date of prepayment, except
that prepayments of Base Rate Loans pursuant to Section 2.10(a) may be made upon
one Business Day's notice. Each such notice shall be irrevocable and shall
specify the prepayment date and the principal amount of each Borrowing or
portion thereof to be prepaid; provided that, if a notice of prepayment is given
in connection with a conditional notice of termination of Revolving Credit
Commitments as contemplated by Section 2.7(d), then such notice of prepayment
may be revoked if such notice of termination is revoked in accordance with
Section 2.7. Promptly following receipt of any such notice relating to a
Borrowing, the Administrative Agent shall advise the Lenders of the contents
thereof. Each partial prepayment of any Borrowing under paragraph (a) of this
Section 2.10 shall be in an amount that would be permitted in the case of an
advance of a Borrowing of the same Type as provided in Section 2.2.

           (e) Prepayments Accompanied by Interest. Prepayments shall be
accompanied by accrued interest to the extent required by Section 2.12.

     2.11  Fees.

           (a) The Borrower agrees to pay to the Administrative Agent for the
account of each Lender a commitment fee, which shall accrue at a rate per annum
equal to the percentage set forth below opposite the Commitment Utilization
Percentage with respect to each day (the "Commitment Fee Rate") of the daily
unused amount of the respective Revolving Credit

                                       56



Commitment of such Lender during the period from and including the date on which
the Effective Time shall occur to but excluding the date on which such Revolving
Credit Commitment terminates:

       Commitment Utilization Percentage             Commitment Fee Rate
       ---------------------------------             -------------------
           Less than 50%                                    0.500%

           Greater than or equal to 50%                     0.375%

The Commitment Fee Rate shall be calculated on each Quarterly Date for each day
occurring during the fiscal quarter then ending.

          (b) Accrued commitment fees shall be payable in arrears on each
Quarterly Date and on the date such Commitments terminate, commencing on the
first such date to occur after the Closing Date. All commitment fees shall be
computed on the basis of a year of 365 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day).

          (c) The Borrower agrees to pay with respect to Letters of Credit
outstanding hereunder the following fees:

              (i)  to the Administrative Agent for the account of each Revolving
     Credit Lender a participation fee with respect to its participations in
     Letters of Credit, which shall accrue at a rate per annum equal to the
     Applicable Margin then used in determining interest on Revolving Credit
     LIBOR Loans on the average daily amount of such Lender's LC Exposure
     (excluding any portion thereof attributable to unreimbursed LC
     Disbursements) during the period from and including the Closing Date to but
     excluding the later of the date on which such Lender's Revolving Credit
     Commitment terminates and the date on which there shall no longer be any
     Letters of Credit outstanding hereunder, and

              (ii) to the Issuing Lender (x) a fronting fee for its own account,
     equal to 0.25% per annum on the face amount of each Letter of Credit,
     payable in arrears on each Quarterly Date, and (y) the Issuing Lender's
     standard fees with respect to the issuance, amendment, renewal or extension
     of any Letter of Credit or processing of drawings thereunder.

Accrued participation fees shall be payable in arrears on each Quarterly Date
and on the date the Revolving Credit Commitments terminate, commencing on the
first such date to occur after the date hereof, provided that any such fees
accruing after the date on which the Revolving Credit Commitments terminate
shall be payable on demand. All participation fees and fronting fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day).

                                       57



          (d) The Borrower agrees to pay to the Administrative Agent, for its
own account, fees payable in the amounts and at the times separately agreed in
writing between the Borrower and the Administrative Agent.

          (e) All fees payable hereunder shall be paid on the dates due, in
immediately available funds. Fees paid shall not be refundable under any
circumstances, absent manifest error in the determination thereof.

     2.12 Interest.

          (a) The Loans comprising each Base Rate Borrowing shall bear interest
at a rate per annum equal to the Adjusted Base Rate plus the Applicable Margin.

          (b) The Loans comprising each LIBOR Borrowing shall bear interest at a
rate per annum equal to the Adjusted LIBO Rate for the Interest Period in effect
for such Borrowing plus the Applicable Margin.

          (c) Notwithstanding the foregoing, (i) all amounts which are not paid
when due shall bear interest until paid in full at the Post-Default Rate and
(ii) during the period when any Event of Default shall have occurred and be
continuing, immediately upon the delivery of written notice from the
Administrative Agent to the Borrower at the request of the Required Lenders the
principal of all Loans hereunder shall bear interest, after as well as before
judgment, at the Post-Default Rate.

          (d) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan; provided that (i) interest accrued at the
Post-Default Rate shall be payable on demand, (ii) in the event of any repayment
or prepayment of any LIBOR Loan, accrued interest on the principal amount repaid
or prepaid shall be payable on the date of such repayment or prepayment, (iii)
in the event of any conversion of any LIBOR Loan prior to the end of the current
Interest Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion and (iv) all accrued interest on Revolving
Credit Loans shall be payable upon expiration of the Revolving Credit
Commitments.

          (e) All interest hereunder shall be computed on the basis of a year of
360 days, except that interest computed by reference to the Adjusted Base Rate
at times when the Adjusted Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). The applicable Adjusted Base Rate,
Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent,
and such determination shall be conclusive absent manifest error.

          (f) Notwithstanding anything to the contrary set forth herein, the
aggregate interest, fees and other amounts required to be paid by the Borrower
to the Lenders or any Lender hereunder are hereby expressly limited so that in
no contingency or event whatsoever whether by reason of acceleration of maturity
of the Indebtedness evidenced hereby or otherwise, shall the amount paid or
agreed to be paid to the Lenders or any Lender for the use or the forbearance of
the Indebtedness evidenced hereby exceed the maximum permissible under
applicable law. If under or from any circumstances whatsoever, fulfillment of
any provision

                                       58



hereof or of any of the other Loan Documents at the time of performance of such
provision shall be due, shall involve transcending the limit of such validity
prescribed by applicable law then the obligation to be fulfilled shall
automatically be reduced to the limits of such validity and if under or from
circumstances whatsoever the Lenders or any Lender should ever receive as
interest any amount which would exceed the highest lawful rate, the amount of
such interest that is excessive shall be applied to the reduction of the
principal balance of the Indebtedness evidenced hereby and not to the payment of
interest. This provision shall control every other provision of this Agreement
and all provisions of every other Loan Document.

     2.13 Alternate Rate of Interest. If prior to the commencement of any
Interest Period for a LIBOR Borrowing:

          (a) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable,
for such Interest Period; or

          (b) the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period
will not adequately and fairly reflect the cost to such Lenders of making or
maintaining their Loans included in such Borrowing for such Interest Period;

then the Administrative Agent shall give notice thereof to the Borrower and the
affected Lenders by telephone or telecopy as promptly as practicable thereafter
and, until the Administrative Agent notifies the Borrower and such Lenders that
the circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any such Borrowing to, or
continuation of any such Borrowing as, a LIBOR Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a LIBOR Borrowing, such Borrowing
shall be made as a Base Rate Borrowing.

     2.14 Increased Costs.

          (a) If any Change in Law shall:

              (i)  impose, modify or deem applicable any reserve, special
     deposit or similar requirement against assets of, deposits with or for the
     account of, or credit extended by, any Lender (except any such reserve
     requirement reflected in the Adjusted LIBO Rate) or the Issuing Lender; or

              (ii) impose on any Lender or the Issuing Lender or the London
     interbank market any other condition affecting this Agreement or LIBOR
     Loans made by such Lender or any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any LIBOR Loan (or of maintaining its obligation
to make any such Loan) or to increase the cost to such Lender or the Issuing
Lender of participating in, issuing or maintaining any Letter of Credit or to
reduce the amount of any sum received or receivable by such Lender or the
Issuing Lender hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or the Issuing Lender, as the case may be, such
additional amount or amounts

                                       59



as will compensate such Lender or the Issuing Lender, as the case may be, for
such additional costs incurred or reduction suffered.

          (b) If any Lender or the Issuing Lender reasonably determines that any
Change in Law regarding capital requirements has or would have the effect of
reducing the rate of return on such Lender's or the Issuing Lender's capital or
on the capital of such Lender's or the Issuing Lender's holding company, if any,
as a consequence of this Agreement or the Loans made by, or participations in
Letters of Credit held by, such Lender, or the Letters of Credit issued the
Issuing Lender, to a level below that which such Lender or the Issuing Lender or
such Lender's or the Issuing Lender's holding company could have achieved but
for such Change in Law (taking into consideration such Lender's or the Issuing
Lender's policies and the policies of such Lender's or the Issuing Lender's
holding company with respect to capital adequacy), then from time to time the
Borrower will pay to such Lender or the Issuing Lender, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing
Lender, or such Lender's or the Issuing Lender's holding company, for any such
reduction suffered.

          (c) A certificate of a Lender or the Issuing Lender setting forth the
amount or amounts necessary to compensate such Lender or the Issuing Lender or
its holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section 2.14 shall be delivered to the Borrower and shall be conclusive so
long as it reflects a reasonable basis for the calculation of the amounts set
forth therein and does not contain any manifest error. The Borrower shall pay
such Lender or the Issuing Lender the amount shown as due on any such
certificate within 10 days after receipt thereof.

          (d) Failure or delay on the part of any Lender or the Issuing Lender
to demand compensation pursuant to this Section 2.14 shall not constitute a
waiver of such Lender's or the Issuing Lender's right to demand such
compensation; provided that the Borrower shall not be required to compensate a
Lender or the Issuing Lender pursuant to this Section 2.14 for any increased
costs or reductions incurred more than six months prior to the date that such
Lender or the Issuing Lender, as the case may be, notifies the Borrower of the
Change in Law giving rise to such increased costs or reductions and of such
Lender's or the Issuing Lender's intention to claim compensation therefor;
provided further that, if the Change in Law giving rise to such increased costs
or reductions is (i) retroactive and (ii) occurred within such six-month period,
then the six-month period referred to above may be extended to include the
period of retroactive effect thereof, but in no event any period prior to the
Closing Date.

     2.15 Break Funding Payments.

          (a) In the event of (i) the payment of any principal of any LIBOR Loan
other than on the last day of an Interest Period applicable thereto (including
as a result of an Event of Default), (ii) the conversion of any LIBOR Loan other
than on the last day of the Interest Period applicable thereto, (iii) the
failure to borrow, convert, continue or prepay any LIBOR Loan on the date
specified in any notice delivered pursuant hereto (regardless of whether such
notice is permitted to be revocable and is revoked in accordance herewith) or
(iv) the assignment of any LIBOR Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by the Borrower pursuant to
Section 2.8, then, in any such event, the Borrower shall compensate each Lender
for the loss, cost and expense attributable to such event; provided that if

                                       60



the occurrence of any event described in clause (iii) above shall occur solely
as a result of any Lender's failure to make available such Lender's share of any
LIBOR Borrowing, such Lender shall not be entitled to compensation under this
Section 2.15(a) with respect to such event. Nothing in this Section 2.15 shall
be deemed to relieve any Lender from its obligation to fulfill its Commitments
to the extent required by this Agreement or to prejudice any rights that the
Borrower may have against any Lender as a result of any default by such Lender
hereunder.

          (b) In the case of a LIBOR Loan, the loss to any Lender attributable
to any such event shall be deemed to include an amount determined by such Lender
to be equal to the excess, if any, of

              (i)  the amount of interest that such Lender would pay for a
     deposit equal to the principal amount of such Loan for the period from the
     date of such payment, conversion, failure or assignment to the last day of
     the then current Interest Period for such Loan (or, in the case of a
     failure to borrow, convert or continue, the duration of the Interest Period
     that would have resulted from such borrowing, conversion or continuation)
     if the interest rate payable on such deposit were equal to the Adjusted
     LIBO Rate for such Interest Period (or if such Lender does not accept
     deposits, then the Adjusted LIBO Rate for such Interest Period),

over

              (ii) the amount of interest that such Lender would earn on such
     principal amount for such period if such Lender were to invest such
     principal amount for such period at the interest rate that would be bid by
     such Lender (or an Affiliate of such Lender) for U.S. dollar deposits from
     other banks in the LIBOR market at the commencement of such period.

          (c) A certificate of any Lender setting forth any amount or amounts
that such Lender is entitled to receive pursuant to this Section 2.15 shall be
delivered to the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay such Lender the amount shown as due on any such certificate
within 10 days after receipt thereof.

     2.16     Taxes.

          (a) Any and all payments by or on account of any obligation of the
Borrower hereunder shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided that if the Borrower shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments, then
(i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 2.16) the Administrative Agent, any Lender or the Issuing
Lender (as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower shall make such
deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.

          (b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.

                                       61



          (c) The Borrower shall indemnify the Administrative Agent, each Lender
and the Issuing Lender, within 10 days after written demand therefor, for the
full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes
or Other Taxes imposed or asserted on or attributable to amounts payable under
this Section 2.16) paid by the Administrative Agent, such Lender or the Issuing
Lender, as the case may be (and any penalties, interest and reasonable expenses
arising therefrom or with respect thereto during the period prior to the
Borrower making the payment demanded under this paragraph (c)), whether or not
such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the Borrower by a Lender or the
Issuing Lender, or by the Administrative Agent on its own behalf or on behalf of
a Lender or the Issuing Lender, shall be conclusive absent manifest error. If
the Administrative Agent, a Lender or the Issuing Lender (as the case may be)
shall become aware that it is entitled to claim a refund from a Governmental
Authority in respect of any Indemnified Taxes or Other Taxes as to which it has
been indemnified by the Borrower, or with respect to which the Borrower has paid
increased amounts pursuant to this Section 2.16, such Lender shall notify the
Borrower of the availability of such refund claim and shall exercise reasonable
efforts (at no cost to such Lender) to make the appropriate claim to such
Governmental Authority for such a refund. In the event any such Indemnified
Taxes or Other Taxes paid by the Borrower to the Administrative Agent, a Lender
or the Issuing Lender are refunded to such Administrative Agent, Lender or
Issuing Lender, the Lender receiving such refund shall forthwith pay over such
amount to the Administrative Agent and each such refunded amount shall be (i)
applied to prepay interest payable on the Revolving Credit Loans, or to pay any
other obligations of the Credit Parties then due hereunder, or (ii) in the event
all obligations hereunder and under all of the Loan Documents have been
indefeasibly paid in full, refunded to the Borrower.

          (d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrower to a Governmental Authority, the Borrower shall
deliver to the Administrative Agent the original or a certified copy of any
receipt issued by such Governmental Authority to the Borrower evidencing such
payment, a copy of the return reporting such payment or other evidence of such
payment reasonably satisfactory to the Administrative Agent.

          (e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of a jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law or reasonably requested by the Borrower, such properly completed and
executed documentation prescribed by applicable law as will permit such payments
to be made without withholding or at a reduced rate.

     2.17 Payments Generally: Pro Rata Treatment; Sharing of Set-Offs.

          (a) The Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest, fees or reimbursement of LC
Disbursements, or under Sections 2.14, 2.15 or 2.16, or otherwise) prior to 1:00
p.m., Boston, Massachusetts time, on the date when due, in immediately available
funds, without set-off or counterclaim. Any amounts received after such time on
any date may, in the discretion of the Administrative Agent, be

                                       62



deemed to have been received on the next succeeding Business Day for purposes of
calculating interest thereon. All such payments shall be made to the
Administrative Agent at such of its offices in Boston, Massachusetts as shall be
notified to the relevant parties from time to time, except payments to be made
directly to the Issuing Lender as expressly provided herein and except that
payments pursuant to Sections 2.14, 2.15 or 2.16 and 10.3 shall be made directly
to the Persons entitled thereto. The Administrative Agent shall distribute any
such payments received by it for the account of any other Person to the
appropriate recipient promptly following receipt thereof, and the Borrower shall
have no liability in the event timely or correct distribution of such payments
is not so made. If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest
thereon shall be payable for the period of such extension. All payments
hereunder shall be made in U.S. dollars.

          (b) If at any time insufficient funds are received by and available to
the Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder under any circumstances,
including during, or as a result of the exercise by the Administrative Agent or
the Lenders of remedies under the Collateral Documents and applicable law, such
funds shall be applied (i) first, to pay interest and fees then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
interest and fees then due to such parties, (ii) second, to pay principal and
unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and unreimbursed LC
Disbursements then due to such parties and (iii) third, to obligations with
respect to Hedging Agreements entered into by a Lender; in each case, regardless
of whether such funds are the proceeds of Collateral that is security for less
than all of the Loans.

          (c) If any Revolving Credit Lender shall obtain any payment (whether
voluntary, involuntary, through the exercise of set-off or otherwise) on account
of the Revolving Credit Loans made by it (other than pursuant to Sections 2.4,
2.14 or 2.16), then, if there is any Reimbursement Obligation outstanding in
respect of which the Issuing Lender has not received payment in full from such
Revolving Credit Lender pursuant to Section 2.4(e) (the amount of such
Reimbursement Obligation being such Revolving Credit Lender's "LC Deficiency
Amount"), such Revolving Credit Lender shall purchase a participation in such
Reimbursement Obligation in an amount equal to such Lender's LC Deficiency
Amount. If, after giving effect to the foregoing, any Lender shall, by
exercising any right of set-off or counterclaim or otherwise, obtain payment in
respect of any principal of or interest on any of its Loans (or participations
in LC Disbursements) (other than pursuant to Sections 2.4, 2.14 or 2.16),
resulting in such Lender receiving payment of a greater proportion of the
aggregate principal amount of its Loans (and participations in LC Disbursements)
and accrued interest thereon than the proportion of such amounts received by any
other Lender, then the Lender receiving such greater proportion shall purchase
(for cash at face value) participations in the Loans (and LC Disbursements) of
the other Lenders to the extent necessary so that the benefit of such payments
shall be shared by all the Lenders ratably in accordance with the aggregate
amount of principal of and accrued interest on their respective Loans (and
participations in LC Disbursements); provided that (i) if any such
participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase
price restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to

                                       63



apply to any payment obtained by a Lender as consideration for the assignment of
or sale of a participation in any of its Loans (or participations in LC
Disbursements) to any assignee or participant, other than to any Credit Party or
any Subsidiary or Affiliate thereof (as to which the provisions of this
paragraph shall apply). The Borrower consents to the foregoing and agrees, to
the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against the Borrower rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of the Borrower
in the amount of such participation.

          (d) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the Issuing Lender entitled thereto (the
"Applicable Recipient") hereunder that the Borrower will not make such payment,
the Administrative Agent may assume that the Borrower has made such payment on
such date in accordance herewith and may, in reliance upon such assumption,
distribute to the Applicable Recipient the amount due. In such event, if the
Borrower has not in fact made such payment, then each Applicable Recipient
severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Applicable Recipient with interest thereon, for
each day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the Federal Funds
Effective Rate.

          (e) If any Lender shall fail to make any payment required to be made
by it pursuant to Section 2.4(d), 2.4(e), 2.5(b), or 2.17(d), then the
Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative
Agent for the account of such Lender to satisfy such Lender's obligations under
such Section until all such unsatisfied obligations are fully paid.

                                   ARTICLE 3

                             Guarantee by Guarantors

     3.1 The Guarantee. Each Guarantor hereby jointly and severally guarantees
to each Lender, the Issuing Lender and the Administrative Agent and their
respective successors and assigns the prompt payment and performance in full
when due (whether at stated maturity, by acceleration or otherwise) of the
principal of and interest on the Loans made by the Lenders to the Borrower, all
LC Disbursements and all other amounts from time to time owing to the Lenders,
the Issuing Lender or the Administrative Agent by the Borrower hereunder or
under any other Loan Document, and all other obligations of the Borrower to any
Lender hereunder or under any Hedging Agreement, in each case strictly in
accordance with the terms thereof (such obligations being herein collectively
called the "Guaranteed Obligations"). Each Guarantor hereby further agrees that
if the Borrower shall fail to pay in full when due (whether at stated maturity,
by acceleration or otherwise) any of the Guaranteed Obligations, each Guarantor
will promptly pay the same, without any demand or notice whatsoever, and that in
the case of any extension of time of payment or renewal of any of the Guaranteed
Obligations, the same will be promptly paid in full when due (whether at
extended maturity, by acceleration or otherwise) in accordance with the terms of
such extension or renewal.

                                       64



     3.2 Obligations Unconditional. The obligations of each Guarantor under
Section 3.1 are absolute and unconditional irrespective of the value,
genuineness, validity, regularity or enforceability of this Agreement, the other
Loan Documents or any other agreement or instrument referred to herein or
therein, or any substitution, release or exchange of any other guarantee of or
security for any of the Guaranteed Obligations, and, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
that might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor, it being the intent of this Section 3.2 that the
obligations of the Guarantors hereunder shall be absolute and unconditional
under any and all circumstances. Without limiting the generality of the
foregoing, it is agreed that the occurrence of any one or more of the following
shall not alter or impair the liability of the Guarantors hereunder which shall
remain absolute and unconditional as described above:

             (i)   at any time or from time to time, without notice to such
     Guarantors, the time for any performance of or compliance with any of the
     Guaranteed Obligations shall be extended, or such performance or compliance
     shall be waived;

             (ii)  any of the acts mentioned in any of the provisions hereof or
     of the other Loan Documents or any other agreement or instrument referred
     to herein or therein shall be done or omitted;

             (iii) the maturity of any of the Guaranteed Obligations shall be
     accelerated, or any of the Guaranteed Obligations shall be modified,
     supplemented or amended in any respect, or any right hereunder or under the
     other Loan Documents or any other agreement or instrument referred to
     herein or therein shall be waived or any other guarantee of any of the
     Guaranteed Obligations or any security therefor shall be released or
     exchanged in whole or in part or otherwise dealt with; or

             (iv)  any lien or security interest granted to, or in favor of, the
     Administrative Agent, the Issuing Lender or any Lender or Lenders as
     security for any of the Guaranteed Obligations shall fail to be perfected
     or any Collateral is released or otherwise compromised or liquidated for
     less than fair value.

The Guarantors hereby expressly waive diligence, presentment, demand of payment,
protest and all notices whatsoever (except as expressly required hereby) and any
requirement that the Administrative Agent, the Issuing Lender or any Lender
exhaust any right, power or remedy or proceed against the Borrower hereunder or
under the other Loan Documents or any other agreement or instrument referred to
herein or therein, or against any other Person under any other guarantee of, or
security for, any of the Guaranteed Obligations.

     3.3 Reinstatement. The obligations of each Guarantor under this Article 3
shall be automatically reinstated if and to the extent that for any reason any
payment by or on behalf of the Borrower in respect of the Guaranteed Obligations
is rescinded or must be otherwise restored by any holder of any of the
Guaranteed Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each of the Guarantors agrees that it will
indemnify the Administrative Agent, the Issuing Lender and each Lender on demand
for all reasonable costs and expenses (including reasonable fees and expenses of
counsel) incurred by

                                       65



the Administrative Agent, any Lender or the Issuing Lender in connection with
such rescission or restoration, including any such costs and expenses incurred
in defending against any claim alleging that such payment constituted a
preference, fraudulent transfer or similar payment under any bankruptcy,
insolvency or similar law.

     3.4 Subrogation. Until such time as the Guaranteed Obligations shall have
been indefeasibly paid in full, each Guarantor hereby waives all rights of
subrogation or contribution, whether arising by contract or operation of law
(including any such right arising under the Federal Bankruptcy Code of 1978, as
amended) or otherwise by reason of any payment by it pursuant to the provisions
of this Article 3 and further agrees with the Borrower for the benefit of each
of its creditors (including each Lender, the Issuing Lender and the
Administrative Agent) that any such payment by it shall constitute a
contribution of capital by such Guarantor to the Borrower.

     3.5 Remedies. Each Guarantor agrees that, as between such Guarantor and the
Lenders, the obligations of the Borrower hereunder may be declared to be
forthwith due and payable as provided in Section 8.1 or Section 2.4(i), as
applicable (and shall be deemed to have become automatically due and payable in
the circumstances provided in Section 8.1 or Section 2.4(i), as applicable) for
purposes of Section 3.1 notwithstanding any stay, injunction or other
prohibition preventing such declaration (or such obligations from becoming
automatically due and payable) as against the Borrower and that, in the event of
such declaration (or such obligations being deemed to have become automatically
due and payable), such obligations (whether or not due and payable by the
Borrower) shall forthwith become due and payable by such Guarantor for purposes
of Section 3.1.

     3.6 Continuing Guarantee. The guarantee in this Article 3 is a continuing
irrevocable guarantee of payment and performance, and shall apply to all
Guaranteed Obligations prior to the indefeasible payment in full of Borrower's
obligations hereunder.

     3.7 Rights of Contribution. The Guarantors hereby agree, as between
themselves, that if any Guarantor shall become an Excess Funding Guarantor (as
defined below) by reason of the payment by such Guarantor of any Guaranteed
Obligations, each other Guarantor shall, on demand of such Excess Funding
Guarantor (but subject to the next sentence), pay to such Excess Funding
Guarantor an amount equal to such Guarantor's Pro Rata Share (as defined below
and determined, for this purpose, without reference to the properties, debts and
liabilities of such Excess Funding Guarantor) of the Excess Payment (as defined
below) in respect of such Guaranteed Obligations. The payment obligation of a
Guarantor to any Excess Funding Guarantor under this Section 3.7 shall be
subordinate and subject in right of payment to the prior payment in full of the
obligations of such Guarantor under the other provisions of this Article 3 and
such Excess Funding Guarantor shall not exercise any right or remedy with
respect to such excess until payment and satisfaction in full of all of such
obligations.

     For purposes of this Section 3.7, (i) "Excess Funding Guarantor" means, in
respect of any Guaranteed Obligations, a Guarantor that has paid an amount in
excess of its Pro Rata Share of such Guaranteed Obligations, (ii) "Excess
Payment" means, in respect of any Guaranteed Obligations, the amount paid by an
Excess Funding Guarantor in excess of its Pro Rata Share of such Guaranteed
Obligations and (iii) "Pro Rata Share" means, for any Guarantor, the ratio

                                       66



(expressed as a percentage) of (x) the amount by which the aggregate present
fair saleable value of all properties of such Guarantor (excluding any shares of
stock of, or ownership interest in, any other Guarantor) exceeds the amount of
all the debts and liabilities of such Guarantor (including contingent,
subordinated, unmatured and unliquidated liabilities, but excluding the
obligations of such Guarantor hereunder and any obligations of any other
Guarantor that have been Guaranteed by such Guarantor) to (y) the amount by
which the aggregate fair saleable value of all properties of all of the Credit
Parties exceeds the amount of all the debts and liabilities (including
contingent, subordinated, unmatured and unliquidated liabilities, but excluding
the obligations of the Borrower and the Guarantors hereunder and under the other
Loan Documents) of all of the Credit Parties, determined (A) with respect to any
Guarantor that is a party hereto at the Effective Time, as of the Effective
Time, and (B) with respect to any other Guarantor, as of the date such Guarantor
becomes a Guarantor hereunder.

     3.8 General Limitation on Guarantee Obligations. In any action or
proceeding involving any state or non-U.S. corporate law, or any state or
Federal or non-U.S. bankruptcy, insolvency, reorganization or other law
affecting the rights of creditors generally, if the obligations of any Guarantor
under Section 3.1 would otherwise, taking into account the provisions of Section
3.7, be held or determined to be void, invalid or unenforceable, or subordinated
to the claims of any other creditors, on account of the amount of its liability
under Section 3.1, then, notwithstanding any other provision hereof to the
contrary, the amount of such liability shall, without any further action by such
Guarantor, any Lender, Agent or other Person, be automatically limited and
reduced to the highest amount that is valid and enforceable and not subordinated
to the claims of other creditors as determined in such action or proceeding.

     3.9 Waivers. As used in this paragraph, any reference to "the principal"
includes the Borrower, and any reference to "the creditor" includes the
Administrative Agent and each of the Lenders. In accordance with Section 2856 of
the California Civil Code (a) each Guarantor waives any and all rights and
defenses available to such Guarantor by reason of Sections 2787 to 2855,
inclusive, 2899 and 3433 of the California Civil Code, including without
limitation any and all rights or defenses any Guarantor may have by reason of
protection afforded to the principal with respect to any of the Guaranteed
Obligations, or to any other guarantor of any of the Guaranteed Obligations with
respect to any of such guarantor's obligations under its guaranty, in either
case pursuant to the antideficiency or other laws of the State of California
limiting or discharging the principal's indebtedness or such guarantor's
obligations, including without limitation Section 580a, 580b, 580d, or 726 of
the California Code of Civil Procedure; and (b) each Guarantor waives all rights
and defenses arising out of an election of remedies by the creditor, even though
that election of remedies, such as a nonjudicial foreclosure with respect to
security for a Guaranteed Obligation, has destroyed Guarantor's rights of
subrogation and reimbursement against the principal by the operation of Section
580d of the Code of Civil Procedure or otherwise; and even though that election
of remedies by the creditor, such as nonjudicial foreclosure with respect to
security for an obligation of any other guarantor of any of the Guaranteed
Obligations, has destroyed Guarantor's rights of contribution against such other
guarantor. No other provision of this Guaranty shall be construed as limiting
the generality of any of the covenants and waivers set forth in this paragraph.
As provided below, this Agreement shall be governed by, and shall be construed
and enforced in accordance with, the internal laws of the Commonwealth of
Massachusetts, without regard to conflicts of laws principles. This paragraph is
included solely out of an abundance of caution, and shall not be construed to
mean

                                       67



that any of the above-referenced provisions of California law are in any way
applicable to the provisions of this Article 3 or to any of the Guaranteed
Obligations.

                                   ARTICLE 4

                         Representations and Warranties

          Each of the Credit Parties and Empire Burbank represents and warrants
to the Lenders, the Issuing Lender and the Administrative Agent, as to itself
and each other Credit Party and Empire Burbank that:

          4.1 Organization; Powers. Each Credit Party and Empire Burbank has
been duly formed or organized and is validly existing under the laws of
formations or its jurisdiction of organization. Each Credit Party and Empire
Burbank has all requisite organizational power and authority to carry on its
business as now conducted and is qualified to do business in, and is in good
standing in, every jurisdiction where such qualification is required, except
where the failure to have such power or authority or to be so qualified or in
good standing, individually or in the aggregate, would not reasonably be
expected to result in a Material Adverse Effect.

          4.2 Authorization; Enforceability. The Transactions are within the
organizational power and authority of each Credit Party and Empire Burbank to
the extent such Credit Party or Empire Burbank, as applicable, is a party to the
Basic Documents and have been duly authorized by all necessary organizational
action on the part of such Credit Party or Empire Burbank, as applicable, to the
extent such Credit Party or Empire Burbank, as applicable, is a party thereto.
This Agreement, the Collateral Documents and all other Basic Documents have been
duly authorized, executed and delivered by each Credit Party or Empire Burbank,
that is a party thereto and constitute legal, valid and binding obligations of
such Credit Party or Empire Burbank, as applicable, enforceable in accordance
with their respective terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights generally
and subject to general principles of equity, regardless of whether considered in
a proceeding in equity or at law.

          4.3 Governmental Approvals; No Conflicts. As of the Closing Date and
each Acquisition Date except as set forth on Schedule 4.3, the Transactions (a)
do not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority, (b) will not violate any applicable
law, policy or regulation or the organizational documents of any Credit Party or
Empire Burbank that is a party to the Basic Documents or any order of any
Governmental Authority where any violation would have a Material Adverse Effect,
(c) will not violate or result in a default under any material indenture,
agreement or other instrument binding upon any Credit Party or Empire Burbank,
or any assets, or give rise to a right thereunder to require any payment to be
made by any Credit Party or Empire Burbank, where any such violation or default
or right to payment would have a Material Adverse Effect, and (d) except for the
Liens created by the Collateral Documents, will not result in the creation or
imposition of any material Lien on any asset of any Credit Party or Empire
Burbank. Except as set forth therein, all consents, approvals, registrations,
filings and other actions required as set

                                       68



forth in such Schedule 4.3 have been obtained on or before the Closing Date or,
with respect to any consents, approvals, registrations, filings and other
actions related to the consummation of the El Dorado Acquisitions or the
Guajillo Acquisitions, will be obtained on or before their respective
Acquisition Dates.

     4.4  Financial Condition; No Material Adverse Change.

          (a) The Borrower has heretofore delivered to the Lenders the following
financial statements:

              (i)   the audited consolidated balance sheet, statements of
     earnings, statements of stockholders' equity, statements of cash flows and
     notes to consolidated financial statements of Holdings I and the applicable
     Credit Parties as of and for fiscal years ended December 31, 1999, 2000 and
     2001, respectively, accompanied by an opinion of Ernst & Young, LLP
     independent public accountants;

              (ii)  the unaudited consolidated balance sheet and income
     statement to consolidated financial statements of Holdings I and the
     applicable Credit Parties as of and for the three-month period ended March
     31, 2002, certified by the executive vice president of Holdings I that such
     financial statements fairly present in all material respects (subject, in
     the case of such balance sheet as at March 31, 2002 and such statements of
     income and cash flows for the three months then ended, to normal year-end
     audit adjustments) the consolidated financial condition of Holdings I and
     the applicable Credit Parties as at such dates and the consolidated results
     of the operations of Holdings I and the applicable Credit Parties for the
     periods ended on such dates and that all such financial statements,
     including the related schedules thereto have been prepared in accordance
     with GAAP applied consistently throughout the periods involved; and

              (iii) projected statements of cash flow for the Credit Parties for
     fiscal years 2002 through 2009.

Such financial statements (except for any portion thereof which represents a
projection or assumption as to future events of the date of such statement,
including any financial projections and pro formas) in the Borrower's opinion
present fairly, in all material respects, the respective actual consolidated
financial position and results of operations and cash flows of the respective
entities as of such respective dates and for such periods in accordance with
GAAP, subject to year-end audit adjustments and the absence of footnotes in the
case of such unaudited statements. Such pro forma statements were prepared by
the Credit Parties in good faith and incorporate adjustments that were
reasonable when made. Such projections were prepared by the Credit Parties in
good faith and were based on assumptions that the Credit Parties believed were
reasonable when made.

          (b) Since March 31, 2002, there has been no change in the business,
assets, operations or condition, financial or otherwise, of the Credit Parties
taken as a whole from that set forth in the March 31, 2002 unaudited
consolidated financial statements referred to in clause (ii) of paragraph (a)
above that has a Material Adverse Effect.

                                       69



          (c) None of the Credit Parties has on the date hereof any contingent
liabilities, liabilities for taxes, unusual forward or long-term commitments or
unrealized or anticipated losses from any unfavorable commitments in each case
that are material in relation to the Credit Parties taken as a whole, except as
referred to or reflected or provided for in the balance sheets as at the end of
their respective fiscal years ended in 2000 and 2001 and as at the end of the
fiscal quarter ended on March 31, 2002, referred to above, as provided for in
Schedule 4.4, or as otherwise expressly provided in this Agreement, or as
referred to or reflected or provided for in the financial statements described
in this Section 4.4.

     4.5  Properties.

          (a) Each of the Credit Parties has good and marketable title to, or
valid, subsisting and enforceable leasehold interests in, all its Property
material to its business, except where the failure to have such good and
marketable title or leasehold or license interests could not reasonably be
expected to have a Material Adverse Effect.

          (b) As of the Closing Date and each Acquisition Date except as
disclosed on Schedule 4.5(b), each of the Credit Parties owns, or is licensed to
use, all trademarks, service marks, trade names, copyrights, patents and other
intellectual property material to its business (including the call letters with
respect to each Broadcast Station) (excluding rights related to software
programs and copyrights with respect to the content of news and other
programming broadcast or disseminated as part of the Permitted Lines of
Business) as currently conducted except for those failure to own or license
which would not reasonably be expected to have a Material Adverse Effect (the
"Proprietary Rights"), and, to the Borrower's knowledge, the use thereof by the
Credit Parties does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, would not
reasonably be expected to result in a Material Adverse Effect. As of the Closing
Date and each Acquisition Date, all such trademark applications and
registrations, trademarks, registered copyrights, patents and patent
applications, together with the domain names, web sites, and web site
registrations which are owned by or licensed to any Credit Party are listed on
Schedule 4.5(b) (collectively "Registered Rights"). As of the Closing Date and
each Acquisition Date, except as set forth on Schedule 4.5, all of the
Registered Rights have been duly registered in, filed in or issued by the PTO,
the United States Register of Copyrights, a domain name registrar or other
corresponding offices of other jurisdictions as identified on such schedule, and
have been properly maintained and renewed in accordance with all applicable
provisions of law and administrative regulations in the United States or in each
such other jurisdiction, as applicable, except where the failure to so register,
file, maintain or renew would not reasonably be expected to result in a Material
Adverse Effect.

          (c) As of the Closing Date and each Acquisition Date, Schedule 4.5(c)
contains a true, accurate and complete list of (i) all owned Real Property
Assets and (ii) all material leases, subleases or assignments of leases
(together with all material amendments, modifications, supplements, renewals or
extensions of any thereof) affecting each Real Property Asset of any Credit
Party, regardless of whether such Credit Party is the landlord or tenant
(whether directly or as an assignee or successor in interest) under such lease,
sublease or assignment. As of the Closing Date and each Acquisition Date, to the
Borrower's knowledge except as specified in clause (ii) of Parts I and II of
Schedule 4.5(c), each agreement listed in

                                       70



clause (ii) of the immediately preceding sentence is in full force and effect
and, to the Borrower's knowledge, no material default has occurred and is
continuing thereunder, and each such agreement constitutes the legal, valid and
binding obligation of each applicable Credit Party, enforceable against such
Credit Party in accordance with its terms, except as enforcement may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws relating
to or limiting creditors' rights generally or by equitable principles.

     4.6  Litigation and Environmental Matters.

          (a) There are no actions, suits or proceedings by or before any
arbitrator or Governmental Authority which have been filed against or, to the
Borrower's knowledge, threatened against or affecting the Credit Parties (i) as
to which there is a reasonable possibility of an adverse determination and that,
if adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other than the Disclosed
Matters) or (ii) that involve any of the Loan Documents.

          (b) Except for the Disclosed Matters and except with respect to any
other matters that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, none of the Credit Parties (i)
has failed to comply with any Environmental Law or to obtain, maintain or comply
with any permit, license or other approval required under any Environmental Law,
(ii) to the Borrower's knowledge, has become subject to any Environmental
Liability, (iii) has received notice of any claim with respect to any
Environmental Liability or any inquiry, allegation, notice or other
communication from any Governmental Authority which is currently outstanding or
pending concerning its compliance with any Environmental Law or (iv) knows of
any basis for any Environmental Liability.

          (c) Since the date of this Agreement, there has been no change in the
status of (i) the Disclosed Matters (excluding the Disclosed Matters related to
potential Environmental Liabilities) or (ii) to the Borrower's knowledge, the
Disclosed Matters related to potential Environmental Liabilities, that, in each
case, individually or in the aggregate, has resulted in, or materially increased
the likelihood of, a Material Adverse Effect.

     4.7 Compliance with Laws and Agreements. Except as set forth on Schedule
4.7, each of the Credit Parties is in compliance with all laws, regulations,
policies and orders of any Governmental Authority applicable to it or its
property and all indentures, agreements and other instruments binding upon it or
its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

     4.8 Investment and Holding Company Status. No Credit Party is (a) an
"investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940, as amended, (b) a "holding company" as defined
in, or subject to regulation under, the Public Utility Holding Company Act of
1935, as amended or (c) a "bank holding company" as defined in, or subject to
regulation under, the Bank Holding Company Act of 1956, as amended.

     4.9 Taxes. Except as set forth on Schedule 4.9, each of the Credit Parties
has timely filed or caused to be filed all Tax returns and reports required to
have been filed and has paid or

                                       71



caused to be paid all Taxes required to have been paid by it, except (a) Taxes
that are being contested in good faith by appropriate proceedings and for which
such Credit Party has set aside on its books adequate reserves with respect
thereto in accordance with GAAP or (b) to the extent that the failure to do so
could not reasonably be expected to result in a Material Adverse Effect.

     4.10 ERISA. No ERISA Event has occurred or is reasonably expected to occur
that, when taken together with all other such ERISA Events for which liability
is reasonably expected to occur, could reasonably be expected to result in a
Material Adverse Effect.

     4.11 Disclosure. As of the Closing Date and each Acquisition Date, the
management structure of the Credit Parties after giving effect to the
Transactions occurring on or prior to such date is set forth on Schedule 4.11.
The information, reports, financial statements, exhibits and schedules furnished
in writing by or on behalf of the Credit Parties or the Holding Companies to the
Administrative Agent or any Lender, both in connection with the negotiation,
preparation or delivery of this Agreement and the other Basic Documents or
included herein or therein or delivered pursuant hereto or thereto, prepared by
the Administrative Agent in reliance on such information, when taken as a whole
do not contain any untrue statement of material fact or omit to state any
material fact necessary to make the statements herein or therein, in light of
the circumstances under which they were made, not misleading in any material
respect at the time made or delivered.

     4.12 Ownership and Capitalization. As of the Closing Date and each
Acquisition Date, the capital structure and ownership of the Credit Parties and
the Holding Companies, both before and after giving effect to the Transactions
occurring on or prior to such date, is correctly described in Schedule 4.12. As
of the Closing Date and each Acquisition Date, the authorized, issued and
outstanding capital stock of, and other equity interests in, each of the Credit
Parties and the Holding Companies consists, after giving effect to the
Transactions occurring on or prior to such date, of the stock and interests
described on Schedule 4.12, in each case all of which is duly and validly issued
and outstanding, fully paid and nonassessable. As of the Closing Date and each
Acquisition Date, except as set forth in Schedule 4.12, after giving effect to
the Transactions occurring on or prior to such date, (x) there are no
outstanding Equity Rights with respect to any Credit Party and (y) there are no
outstanding obligations of any Credit Party to repurchase, redeem, or otherwise
acquire any shares of capital stock of or other interests in any Credit Party
nor are there any outstanding obligations of any Credit Party to make payments
to any Person, such as "phantom stock" payments, where the amount thereof is
calculated with reference to the fair market value or equity value of any Credit
Party.

     4.13 Subsidiaries.

          (a) As of the Closing Date and each Acquisition Date, set forth in
Schedule 4.12 is a complete and correct list of all of the Subsidiaries of the
Credit Parties, after giving effect to the Transactions occurring on or prior to
such date, together with, for each such Subsidiary, (i) the jurisdiction of
organization of such Subsidiary, (ii) each Person holding ownership interests in
such Subsidiary and (iii) the nature of the ownership interests held by each
such Person and the percentage of ownership of such Subsidiary represented by
such ownership interests. Except as disclosed in Schedule 4.12, (x) each Credit
Party and its respective Subsidiaries owns, free and clear of Liens (other than
Liens created pursuant to the Collateral

                                       72



Documents), and has the unencumbered right to vote, all outstanding ownership
interests in each Person shown to be held by it in Schedule 4.12, (y) all of the
issued and outstanding capital stock of each such Person organized as a
corporation is validly issued, fully paid and nonassessable and (z) there are no
outstanding Equity Rights with respect to such Person.

          (b) Except as set forth in Schedule 7.8 and except for the Senior
Subordinated Note Indenture and the documents related thereto, the Holdings
Securities Purchase Documents, the Oaktree Note Purchase Documents and the
Subordination and Intercreditor Agreement referred to in Section 7.8, as of the
date of this Agreement, none of the Credit Parties is subject to any indenture,
agreement, instrument or other arrangement containing any provision of the type
described in Section 7.8, other than any such provision the effect of which has
been unconditionally, irrevocably and permanently waived so long as any portion
of the Loans or any Commitment is outstanding.

     4.14 Material Indebtedness, Liens and Agreements.

          (a) As of the Closing Date and each Acquisition Date, Schedule 4.14(a)
is a complete and correct list of all Material Indebtedness (other than
intercompany loans between or among the Credit Parties and/or to or from Empire
Burbank) to, or guarantee of any Material Indebtedness by, any Credit Party or
Holding Company, and, to the extent specified therein, the aggregate principal
or face amount outstanding or that may become outstanding with respect thereto
is correctly described in Schedule 4.14(a).

          (b) As of the Closing Date and each Acquisition Date, Schedule 4.14(b)
is a complete and correct list of each Lien securing Material Indebtedness of
any Credit Party and covering any property of the Credit Parties, and the
aggregate Material Indebtedness secured (or which may be secured) by such Liens
in the aggregate and the Property covered by each such Lien is correctly
described in the appropriate part of Schedule 4.14(b).

          (c) As of the Closing Date and each Acquisition Date, Schedule 4.14(c)
is a complete and correct list of each Material Property License and material
equipment lease to which any Credit Party is a party with an indication of
whether such license or lease requires the consent of the licensor or lessor for
it to be assignable to the Administrative Agent pursuant to the Collateral
Documents and whether such consent has been obtained.

          (d) As of the Closing Date and each Acquisition Date, Schedule 4.14(d)
is a complete and correct list of all programming, advertising, management,
network affiliation, engineering, research, service billing, purchase, "LMA",
co-location and other contracts to which any Credit Party is a party for which
breach, nonperformance, cancellation or failure to renew would have a Material
Adverse Effect.

True and complete copies of each agreement listed on the appropriate part of
Schedule 4.14 have been delivered to the Administrative Agent, together with all
amendments, waivers and other modifications thereto. As of the Closing Date and
each Acquisition Date, all such agreements are valid, subsisting, in full force
and effect, are currently binding and after the Transactions occurring on or
prior to such date will continue to be binding upon each Credit Party that is a
party thereto and, to the Credit Parties' knowledge, binding upon the other
parties thereto in

                                       73



accordance with their terms, except where the failure to be so valid,
subsisting, in full force and effect or binding would not reasonably be expected
to have a Material Adverse Effect. As of the Closing Date and each Acquisition
Date, the Credit Parties are not in default under any such agreements, except
where such default would not reasonably be expected to have a Material Adverse
Effect. As of the Closing Date and each Acquisition Date, the licenses and other
agreements listed on Schedule 4.14 collectively entitle the Credit Parties to
use all Proprietary Rights material to the conduct of the business of the Credit
Parties as presently conducted and as proposed to be conducted after the
Transactions occurring on or prior to such date, except where the failure to be
so entitled would not reasonably be expected to have a Material Adverse Effect.

     4.15 Permits and Licenses.

          (a) Each of the Credit Parties has, and is in all material respects in
compliance with respect to, all licenses, permits, approvals and authorizations
of Governmental Authorities necessary to conduct its business as presently
conducted and to own or lease and operate its properties excluding FCC Licenses.

          (b) As of the Closing Date and each Acquisition Date, Schedule 4.15 is
a complete and correct list of each Material FCC License granted or assigned to
any Credit Party, including those under which the Credit Parties have the right
to operate their respective television and radio broadcast stations covered
thereby ("Broadcast Stations") (and includes, with respect to each such FCC
License, the city of license and the call letters, frequency and expiration date
thereof). As of the Closing Date and each Acquisition Date, the FCC Licenses
listed on Schedule 4.15 with respect to any Broadcast Station owned or operated
by the Credit Parties include all material authorizations, licenses and permits
issued by the FCC (other than auxiliary services licenses) that are required or
necessary for the operation of such Broadcast Station and conduct of the
business of the Credit Parties with respect to such Broadcast Station, as now
conducted or proposed to be conducted. As of the Closing Date and each
Acquisition Date, the FCC Licenses listed on Schedule 4.15 are validly issued
and in full force and effect. As of the Closing Date and each Acquisition Date,
the Credit Parties have fulfilled all of their obligations with respect thereto
(including the filing of all registrations, applications, reports, and other
documents as required by the FCC or other Governmental Authority), and have paid
all fees and other amounts required to be paid by them under all applicable FCC
Regulations, in each case, except where the failure to do so would not result in
termination, suspension or material diminution in scope of a Material FCC
License. To the Borrower's knowledge, no rights of any Credit Party under any
Material FCC License conflict with the valid rights of any other Person in any
material respect. To the Borrower's knowledge, no event has occurred that would
be reasonably likely to result in the revocation, termination or material
adverse modification of any Material FCC License or affect materially adversely
any rights of the Credit Parties thereunder, and none of the Credit Parties has
any reason to believe that any Material FCC License will not be renewed in the
ordinary course of business other than FCC Licenses for analog television
stations which may expire upon completion of conversion to digital television or
loss of any license solely as a result from a Relocation.

     4.16 Federal Reserve Regulations. No Credit Party is engaged principally or
as one of its important activities in the business of extending credit for the
purpose of purchasing or carrying margin stock (as defined in Regulation U of
the Board). The making of the Loans

                                       74



hereunder, the use of the proceeds thereof or of any Letter of Credit as
contemplated hereby and the security arrangements contemplated by the Loan
Documents will not violate or be inconsistent with any of the provisions of
Regulation U, T or X of the Board of Governors of the Federal Reserve System.

     4.17 Burdensome Restrictions. No Credit Party is a party to or otherwise
bound by any indenture, loan or credit agreement or any lease or other agreement
or instrument or subject to any charter, corporate or partnership restriction
which has a currently operative provision which would have a Material Adverse
Effect.

     4.18 Force Majeure. Since the date of the most recent financial statements
referred to in Section 4.4(a)(ii) to the Closing Date, the business, properties
and other assets of the Credit Parties have not, as the result of any fire or
other casualty, strike, lockout or other labor trouble, embargo, sabotage,
confiscation, contamination, riot, civil disturbance, activity of armed forces
or act of God, suffered a Material Adverse Effect.

     4.19 Labor and Employment Matters.

          (a) As of the Closing Date and each Acquisition Date, except as set
forth on Schedule 4.19, (A) no employee of any Credit Party is represented by a
labor union, no labor union has been certified or recognized as a representative
of any such employee; (B) there are no pending or, to the Borrower's knowledge,
threatened representation campaigns, elections or proceedings; (C) no Credit
Party has any knowledge of any strikes, slowdowns or work stoppages of any kind,
or threats thereof; and (D) no Credit Party has engaged in, admitted committing
or been held to have committed any unfair labor practice, in each case except
where such occurrence would not reasonably be expected to have a Material
Adverse Effect.

          (b) As of the Closing Date and each Acquisition Date, Schedule 4.19
sets forth all material employment contracts for members of senior management of
the Credit Parties under which any Credit Party thereof has any obligations to
provide compensation or remuneration of any kind (other than obligations to make
current wage or salary payments that are terminable at will without notice).

          (c) Except as set forth on Schedule 4.19, each Credit Party has at all
times complied in all material respects, and are in material compliance with,
all applicable laws, rules and regulations respecting employment, wages, hours,
compensation, benefits, and payment and withholding of taxes in connection with
employment, except where the failure to so comply would not reasonably be
expected to have a Material Adverse Effect.

          (d) Except as set forth on Schedule 4.19, except as could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, the Credit Parties have at all times since March 31, 2002
complied with, and are in compliance with, all applicable laws, rules and
regulations respecting occupational health and safety, whether now existing or
subsequently amended or enacted, including the Occupational Safety & Health Act
of 1970, 29 U.S.C. Section 651 et seq. and the state analogies thereto, all as
amended or superseded from time to time, and any common law doctrine relating to
worker health and safety.

                                       75



     4.20 Subchapter S Election and QSSS Election. Holdings I has made an S
Corporation election in accordance with Code Section 1362 and an election to
treat Intermediate Holdings and the Borrower as a qualified subchapter S
subsidiaries have been made. Holdings I has not elected, pursuant to California
Revenue and Taxation Code Section 23801, not to be treated as an S Corporation
for California income tax purposes. None of Holdings I's shareholders are or
shall be nonresidents of the State of California.

     4.21 Senior Indebtedness. The obligations of the Credit Parties hereunder
and under the other Loan Documents constitute "Senior Debt" and "Designated
Senior Debt" under and as defined in the Senior Subordinated Note Indenture. The
provisions of Article 10 of the Senior Subordinated Note Indenture are
enforceable by each Lender and each other holder of any obligations of the
Credit Parties under the Loan Documents in accordance with their terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles.

                                    ARTICLE 5

                                   Conditions

     5.1 Effective Time. The obligations of the Lenders to make Revolving Credit
Loans, and of the Issuing Lender to issue Letters of Credit, hereunder shall not
become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 10.2):

          (a) Counterparts of Agreement. The Administrative Agent shall have
received from each party hereto either (i) a counterpart of this Agreement
signed on behalf of such party or (ii) written evidence satisfactory to the
Administrative Agent (which may include telecopy transmission of a signed
signature page of this Agreement) that such party has signed a counterpart of
this Agreement.

          (b) Notes. The Administrative Agent shall have received a duly
completed and executed Revolving Credit Note for each Lender, unless waived by
the Lender which would otherwise receive any such note.

          (c) Organizational Structure. The organizational structure,
capitalization and ownership of the Credit Parties, both before and after giving
effect to the Transactions occurring on the Closing Date, shall be as set forth
on Schedules 4.11 and 4.12. The Administrative Agent shall have had the
opportunity to review, and shall be reasonably satisfied with, the Credit
Parties' state and federal tax assumptions and the capital, organization and
structure of the Credit Parties, both before and after giving effect to the
Transactions occurring on the Closing Date.

          (d) Existence and Good Standing. The Administrative Agent shall have
received such documents and certificates as the Administrative Agent or Special
Counsel may reasonably request relating to the organization, existence and good
standing of Empire Burbank, each Credit Party and Holding Company, the
authorization of the Transactions occurring on the Closing Date and any other
legal matters relating to the Credit Parties or Holding Companies,

                                       76



this Agreement, the other Loan Documents or the Transactions occurring on the
Closing Date, all in form and substance reasonably satisfactory to the
Administrative Agent and Special Counsel.

          (e)  Security Interests in Personal and Mixed Property. To the extent
not otherwise satisfied pursuant to Section 5.1(f), the Administrative Agent
shall have received evidence satisfactory to it that the Credit Parties shall
have taken or caused to be taken all such actions, executed and delivered or
caused to be executed and delivered all such agreements, documents and
instruments, and made or caused to be made all such filings and recordings
(other than the filing of the UCC statements described in clauses (iii), (iv)
and (v) below) that may be necessary or, in the opinion of the Administrative
Agent, desirable in order to create in favor of the Administrative Agent, for
the benefit of the Lenders, a valid and (upon such filing and recording)
perfected First Priority security interest in the entire personal and mixed
property Collateral; provided, however, that to the extent that the
Administrative Agent in its reasonable discretion after good faith consultation
with the Borrower shall determine that the costs of obtaining a security
interest in any item of Collateral is excessive in relation to the value of the
security to be afforded thereby, the Administrative Agent may waive such
requirement with respect to such item, so long as the Credit Parties covenant
that such item shall not become subject to any Liens other than Permitted Liens.
Such actions shall include the following:

               (i)   Collateral Documents. Delivery to the Administrative Agent
     of all the Security Agreement, the Confirmation to the Pledge Agreement,
     and the Confirmation to Subordination Agreements, duly executed by the
     applicable Credit Party, together with accurate and complete schedules to
     all such Collateral Documents;

               (ii)  Stock Certificates and Instruments. To the extent not
     previously delivered to the Administrative Agent in connection with the
     Existing Credit Agreement, delivery to the Administrative Agent of (A)
     certificates (which certificates shall be accompanied by irrevocable
     undated stock powers, duly endorsed in blank and otherwise satisfactory in
     form and substance to the Administrative Agent) representing all capital
     stock and other certificated equity interests pledged pursuant to the
     Pledge Agreement and (B) all promissory notes or other instruments,
     including any promissory note made by Lenard Liberman to a Credit Party
     pursuant to Section 6.9(e), (duly endorsed, where appropriate, in a manner
     satisfactory to the Administrative Agent) evidencing any Collateral;

               (iii) Lien Searches and UCC Termination Statements. Delivery to
     the Administrative Agent of (A) the results of recent searches, by one or
     more Persons satisfactory to the Administrative Agent, of all effective UCC
     financing statements and fixture filings and all judgment and tax lien
     filings which may have been made with respect to any personal or mixed
     property of the El Dorado Sellers or the Guajillo Sellers, together with
     copies of all such filings disclosed by such search, and (B) to the extent
     any of the El Dorado Acquisitions or the Guajillo Acquisitions are being
     consummated on the Closing Date, UCC termination statements for filing in
     all applicable jurisdictions as may be necessary to terminate any effective
     UCC financing statements or fixture filings encumbering the assets being
     acquired in each such Acquisition disclosed in such search (other than any
     such financing statements or fixture filings in respect of Liens permitted
     to remain outstanding pursuant to the terms of this Agreement);

                                       77



               (iv)   UCC Financing Statements and Fixture Filings. Delivery to
     the Administrative Agent of amendments to UCC financing statements and,
     where appropriate, amendments to fixture filings, with respect to all
     personal and material mixed property Collateral of such Credit Party, for
     filing in all jurisdictions as may be necessary or, in the opinion of the
     Administrative Agent, desirable to reflect the change in name of the
     Borrower;

               (v)    PTO Cover Sheets, Etc. Delivery to the Administrative
     Agent of all cover sheets or other documents or instruments required to be
     filed with the PTO in order to reflect the change in name of the Borrower
     and to create or perfect Liens in respect of any new IP Collateral, if any;

               (vi)   Perfection Certificates. Delivery to the Administrative
     Agent of perfection certificates dated the Closing Date substantially in
     the form of Schedule I to the form of Security Agreement duly executed by a
     Financial Officer of each Credit Party;

               (vii)  [Intentionally Omitted]; and

               (viii) Opinions of Local Counsel. Delivery to the Administrative
     Agent of an opinion of counsel (which counsel shall be reasonably
     satisfactory to the Administrative Agent) under the laws of California and
     Texas with respect to the continuation of the attachment and perfection of
     the security interests in favor of the Administrative Agent in the personal
     or mixed property Collateral and such other matters governed by the laws of
     such jurisdiction regarding such security interests as the Administrative
     Agent may reasonably request in form and substance reasonably satisfactory
     to the Administrative Agent.

          (f)  Effective Time Mortgage; Effective Time Mortgage Policy; Etc. The
Administrative Agent shall have received from each Credit Party:

               (i)    Effective Time Mortgage. A fully executed and notarized
     Mortgage (the "Effective Time Mortgage"), in proper form for recording in
     all appropriate places in all applicable jurisdictions, encumbering the
     Real Property Asset listed in Part II of Schedule 4.5(c) and identified
     thereon as a property for which a Mortgage will be provided on the Closing
     Date (the "Effective Time Mortgaged Property") but in any event excluding
     the Burbank Office Property and the Hollywood Office Property;

               (ii)   Existing Mortgage Amendments. With respect to each Real
     Property Asset listed in Part I (Existing Mortgages) of Schedule 4.5(c)
     other than the Excluded Assets (each an "Existing Mortgaged Property"), a
     fully executed and notarized Existing Mortgage Amendment, in proper form
     for recording in all appropriate places in all applicable jurisdictions.

               (iii)  Surveys. With respect to the Effective Time Mortgaged
     Property, copies of all existing surveys in the Credit Parties' possession;

                                       78



               (iv)   Leasehold Interests. In the case of each Effective Time
     Mortgaged Property listed in clause (ii) of Part II of Schedule 4.5(c),
     copies of all leases between any Credit Party and any landlord or tenant;

               (v)    Landlord Waivers and Consents. In the case of each
     Effective Time Mortgaged Property listed in clause (ii) of Part II of
     Schedule 4.5(c), a Landlord Waiver and Consent with respect thereto and
     where required by the terms of any lease, the consent of the fee mortgagee,
     ground lessor or other party;

               (vi)   Licensor Consents. In the case of each Material Property
     License listed in Part II of Schedule 4.14(c), a Licensor Consent with
     respect thereto;

               (vii)  Matters Relating to Flood Hazard Properties. (A)
     Evidence reasonably acceptable to the Administrative Agent as to whether
     any Effective Time Mortgaged Property is a Flood Hazard Property and (B) if
     any Effective Time Mortgaged Property is a Flood Hazard Property, evidence
     that the applicable Credit Party has obtained flood insurance with respect
     to each Flood Hazard Property in amounts approved by the Administrative
     Agent, or evidence acceptable to the Administrative Agent that such
     insurance is not available;

               (viii) Confirmation of Environmental Indemnity. A Confirmation of
     Hazardous Materials Indemnity Agreement fully executed by each of the
     parties thereto;

               (ix)   Title Insurance. (A) an ALTA mortgagee title insurance
     policy or unconditional commitment therefor (the "Effective Time Mortgage
     Policy") issued by the Title Company with respect to each Effective Time
     Mortgaged Property listed in Part II of Schedule 4.5(c), in an amount not
     less than the amount designated therein with respect to, or a valid
     leasehold interest in, the Effective Time Mortgaged Property, insuring
     leasehold or fee simple title, as applicable to the Effective Time
     Mortgaged Property vested in such Credit Party and assuring the
     Administrative Agent that the Effective Time Mortgage creates a valid and
     enforceable First Priority mortgage Lien on the Effective Time Mortgaged
     Property, subject only to any standard exceptions as may be reasonably
     acceptable to the Administrative Agent, which Effective Time Mortgage
     Policy (I) shall include all endorsements for matters reasonably requested
     by the Administrative Agent and (II) shall provide for affirmative
     insurance and such reinsurance as the Administrative Agent may reasonably
     request, all of the foregoing in form and substance reasonably satisfactory
     to the Administrative Agent; and (B) a CLTA Form 110.5 endorsement or
     unconditional commitment therefor with respect to each of the Existing
     Title Policies issued with respect to an Existing Mortgaged Property
     located in California, and a Texas Form T-38 endorsement or unconditional
     commitment therefor with respect to each of the Existing Title Policies
     issued with respect to an Existing Mortgaged Property located in Texas,
     provided that with respect to the KSEV tower site in The Woodlands,
     Montgomery County, Texas and the Bering Property, new title policies, each
     substantially in the form of an Effective Time Mortgage Policy, shall be
     issued by the Title Company in place of such endorsements (such new title
     policies, together with the referenced endorsements, each being referred to
     herein as an "Existing Title Policy Endorsement") and (C) evidence
     satisfactory to the Administrative Agent

                                       79



     that such Credit Party has (I) delivered to the Title Company all
     certificates and affidavits required by the Title Company in connection
     with the issuance of the Effective Time Mortgage Policy or the Existing
     Title Policy Endorsement and (II) paid to the Title Company or to the
     appropriate Governmental Authorities or concurrently with the Closing Date
     shall pay all expenses and premiums of the Title Company in connection with
     the issuance of the Effective Time Mortgage Policy or the Existing Title
     Policy Endorsement and all recording and stamp taxes (including mortgage
     recording and intangible taxes) payable in connection with recording the
     Effective Time Mortgage in the appropriate real estate records;

               (x)   Copies of Documents Relating to Title Exceptions. Copies of
     all recorded documents listed as exceptions to title or otherwise referred
     to in the Effective Time Mortgage Policy or in the title reports delivered
     pursuant to Section 5.1(f)(viii);

               (xi)  Opinions of Local Counsel. An opinion of counsel (which
     counsel shall be reasonably satisfactory to the Administrative Agent) in
     each state in which the Effective Time Mortgaged Property and the Existing
     Mortgaged Property is located with respect to the enforceability of the
     form of the Effective Time Mortgage and the Existing Mortgage Amendment to
     be recorded in such state and such other matters as the Administrative
     Agent may reasonably request, in each case in form and substance reasonably
     satisfactory to the Administrative Agent;

               (xii) Empire Burbank Loan Documents. To the extent not delivered
     to the Administrative Agent in connection with the Existing Credit
     Agreement, the Administrative Agent shall have received copies of the
     Empire Burbank Loan Documents, each certified as true and correct and in
     full force and effect by the Borrower and further certified to be all the
     documents, instruments and agreements relating to the Empire Burbank Loan.

          (g)  Environmental Reports. To the extent not delivered to the
Administrative Agent in connection with the Existing Credit Agreement, the
Administrative Agent shall have received copies of all reports and other
information in possession of any Credit Party regarding environmental matters
relating to the Real Property Assets and evidence of compliance with any
recommended remediation or further investigation indicated by such reports and
information.

          (h)  Evidence of Insurance. The Administrative Agent shall have
received a certificate from the Credit Parties' insurance broker or other
evidence satisfactory to them that all insurance required to be maintained
pursuant to Section 6.5 is in full force and effect and that the Administrative
Agent on behalf of the Lenders has been named as additional insured, mortgagee
and loss payee thereunder to the extent required under Section 6.5.

          (i)  Management; Employment and Consulting Contracts. The management
structure of the Credit Parties after giving effect to the Transactions shall be
as set forth on Schedule 4.11. To the extent not delivered to the Administrative
Agent in connection with the Existing Credit Agreement, the Administrative Agent
shall have received copies of, and shall be satisfied with the form and
substance of (i) any and all agreements among any of the holders of capital
stock of or other equity interests in the Credit Parties, (ii) any and all
material consulting

                                       80



agreements with any Persons and (iii) any stock option plans, phantom stock
incentive programs and similar arrangements provided by the Credit Parties to
any Person, in each case as such will be in effect from and after the Closing
Date. The employment agreements with Messrs. Eduardo Leon dated December 1,
1999, Andrew Mars dated November 15, 1998, Jose Francisco Garza dated February
8, 1999 and Xavier Ortiz dated September 1, 1999 constitute all material
employment agreements with senior executives of the Credit Parties on the
Closing Date.

          (j) Necessary Governmental Authorizations and Consents; Expiration of
Waiting Periods, Etc. The Credit Parties have obtained all permits, licenses,
authorizations or consents from all Governmental Authorities (including the FCC)
and all consents of other Persons with respect to Material Indebtedness, Liens
and agreements listed on Schedule 4.14 (and so identified thereon), in each case
that are necessary in connection with the Transactions contemplated by the Basic
Documents and occurring on the Closing Date (except that if any of the El Dorado
Acquisitions or the Guajillo Acquisitions will not close on the Closing Date,
the permits, licenses, authorizations and consents with respect any such
Acquisition not closing on the Closing Date will not be required to be obtained
until the closing of such Acquisition), and the continued operation of the
Broadcast Stations operated and business conducted, and proposed to be
conducted, by the Credit Parties, in substantially the same manner as conducted
by the Credit Parties prior to the Closing Date, and each of the foregoing shall
be in full force and effect, in each case other than those the failure to obtain
or maintain which, either individually or in the aggregate, would not reasonably
be expected to have a Material Adverse Effect. All applicable waiting periods
shall have expired without any action being taken or threatened by any competent
authority which would restrain, prevent or otherwise impose adverse conditions
on the Transactions occurring on the Closing Date (including the
Pre-Merger/Hart-Scott-Rodino Act, as amended). No action, request for stay,
petition for review or rehearing, reconsideration or appeal with respect to any
of the foregoing shall be pending, and the time for any applicable Governmental
Authority to take action to set aside its consent on its own motion shall have
expired.

          (k) Borrowing Request. The Borrower shall have requested Loans
hereunder in an amount not to exceed the sum of the amounts payable under clause
(a) of the definition of Existing Debt plus, to the extent the proceeds of the
initial Loans hereunder are to be used on the Closing Date to fund a portion of
the purchase price of the El Dorado Acquisitions or the Guajillo Acquisitions,
the purchase price for such Acquisitions being consummated on the Closing Date
plus the Transaction Costs plus the payments to Jose and Lenard Liberman set
forth in Sections 6.9(d) and (e) plus the amount needed for working capital.

          (l) Existing Debt. The Administrative Agent shall have received
evidence that all principal, interest and other amounts owing in respect of all
Existing Debt described in clause (a) of the definition thereof (including the
payment in full of the Liberman Subordinated Debt and all obligations under the
Oaktree Note Purchase Documents) shall have been or shall simultaneously be,
repaid in full.

          (m) Financial Statements; Pro Forma Balance Sheet; Closing Date
Compliance Certificate. The Administrative Agent shall have received from the
Credit Parties (i) the certified financial statements, operating projections and
budgets referred to in Section 4.4 hereof, and the same shall be reasonably
satisfactory to the Administrative Agent and the Lenders and

                                       81



shall not be inconsistent with the information previously provided to the
Administrative Agent and (ii) a certificate of a Financial Officer
demonstrating, on a pro-forma basis, that the Senior Leverage Ratio, for the
period of four consecutive fiscal quarters of the Borrower ended March 31, 2002,
giving effect to the Transactions occurring on the Closing Date on a pro forma
basis as if such Transactions had occurred on the first day of such period, does
not exceed 4.00 to 1.

          (n) Solvency Assurances. The Administrative Agent shall have received
a certificate, substantially in the form of Exhibit H, from a Financial Officer
of the Borrower to the effect that, as of the Effective Time and after giving
effect to the initial Loans hereunder, the issuance of the Senior Subordinated
Notes and to the other Transactions occurring on the Closing Date:

              (i)   the aggregate value of all properties of the Credit Parties
     at their present fair saleable value on a going concern basis (i.e., the
     amount that may be realized within a reasonable time, considered to be six
     months to one year, either through collection or sale at the regular market
     value, conceiving the latter as the amount that could be obtained for such
     properties within such period by a capable and diligent businessman from an
     interested buyer who is willing to purchase under ordinary selling
     conditions), exceed the amount of all the debts and liabilities (including
     contingent, subordinated, unmatured and unliquidated liabilities) of the
     Credit Parties;

              (ii)  the Credit Parties will not, on a consolidated basis, have
     unreasonably small capital with which to conduct their business operations
     as heretofore conducted; and

              (iii) the Credit Parties will have, on a consolidated basis,
     sufficient cash flow to enable them to pay their debts as they mature.

     Such certificate shall include a statement to the effect that the financial
     projections and underlying assumptions contained in such analysis are, fair
     and reasonable in the opinion of such Financial Officer at the time when
     made.

          (o) Financial Officer Certificate. The Administrative Agent shall have
received a certificate, dated the Closing Date and signed by the President, an
Executive Vice President or a Financial Officer of the Borrower, confirming
compliance with the conditions set forth in paragraphs (a) and (b) of Section
5.2 at the Effective Time.

          (p) Senior Subordinated Notes. (i) The Borrower shall have issued the
Senior Subordinated Notes in an aggregate principal amount of not less than
$150,000,000, (ii) the Administrative Agent shall have received copies of the
Senior Subordinated Note Indenture and the same shall be reasonably satisfactory
to the Administrative Agent and Special Counsel, (iii) the Borrower shall have
applied the proceeds thereof in accordance with Section 6.9 and (iv) the
Administrative Agent shall have received a certificate of a Financial Officer of
the Borrower in form satisfactory to the Administrative Agent confirming that
the Borrower has received from the purchasers of the Senior Subordinated Notes
all cash proceeds from the sale of such notes.

          (q) No Material Adverse Effect. Since March 31, 2002, there shall have
occurred no Material Adverse Effect (in the reasonable judgment of the
Administrative Agent)

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with respect to the Credit Parties or on the assets to be acquired in connection
with any Acquisition occurring on the Closing Date.

          (r) Holdings Amendment; Oaktree Redemption Agreement. At or prior to
the Effective Time, (i) the Holdings Amendment and the Oaktree Redemption
Agreement shall constitute a binding written agreement of each of the parties
thereto and (ii) the Administrative Agent shall have received copies of such
amendment and agreement and the same shall be reasonably satisfactory to the
Administrative Agent and Special Counsel.

          (s) Opinions. The Administrative Agent shall have received favorable
written opinions (addressed to the Administrative Agent and the Lenders and
dated the Closing Date) of (i) O'Melveny & Myers LLP, Gilchrist & Rutter, and
Strasburger & Price, each special counsel to the Credit Parties, substantially
in the forms of Exhibits K-1, K-2 and K-3, respectively, (ii) O'Melveny & Myers
LLP, special FCC counsel to the Credit Parties substantially in the form of
Exhibit L and (iii) local counsel to the Credit Parties covering such matters
relating to local laws and the perfection of security interests as the
Administrative Agent or the Required Lenders shall request (and each Credit
Party hereby requests each such counsel to deliver such opinions).

          (t) Fees and Expenses. The Administrative Agent and the Issuing Lender
shall have received all reasonable fees and other amounts due and payable to
such Persons and Special Counsel at or prior to the Effective Time, including,
to the extent invoiced, reimbursement or payment of all out-of-pocket expenses
required to be reimbursed or paid by the Borrower hereunder.

          (u) Other Documents. The Administrative Agent shall have received all
material contracts and such other documents as the Administrative Agent or any
Lender or Special Counsel shall have reasonably requested and the same shall be
satisfactory to each of them and Special Counsel.

     5.2  Each Extension of Credit. The obligation of each Lender to make a Loan
on the occasion of any Borrowing, and of the Issuing Lender to issue, amend,
renew or extend any Letter of Credit, is subject to the satisfaction of the
following conditions:

          (a) Representations and Warranties. The representations and warranties
of each Credit Party set forth in this Agreement and the other Loan Documents
shall be true and correct on and as of the date of such Borrowing, or (as
applicable) the date of issuance, amendment, renewal or extension of such Letter
of Credit, both before and after giving effect thereto and to the use of the
proceeds thereof (or, if any such representation or warranty is expressly stated
to have been made as of an earlier date, such representation or warranty shall
have been true and correct as of such earlier date, and to the extent any
representation or warranty makes reference to one or more of the Schedules to
this Agreement, the Credit Parties shall make revisions to the Schedules,
reasonably acceptable to the Administrative Agent, to take into account the
consummation of any Acquisitions permitted hereunder and other transactions
permitted hereunder).

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          (b) No Defaults. At the time of and immediately after giving effect to
such Borrowing, or (as applicable) the date of issuance, amendment, renewal or
extension of such Letter of Credit, no Default shall have occurred and be
continuing.

     5.3  Consummation of Acquisitions. If the proceeds of the initial Loans
hereunder are to be used to fund on the Closing Date a portion of the purchase
price of the El Dorado Acquisitions or the Guajillo Acquisitions, the following
conditions must also be satisfied with respect to the Acquisition the purchase
price of which will be funded with the initial Loans on the Closing Date:

              (i)   All conditions precedent to the consummation of the El
     Dorado Acquisitions or the Guajillo Acquisitions, as applicable, including
     those set forth in the El Dorado Acquisitions Documents or the Guajillo
     Acquisitions Documents, respectively, shall have been satisfied or the
     fulfillment of any such conditions shall have been waived with the consent
     of the Administrative Agent and the Lenders;

              (ii)  the Acquisition shall have been consummated substantially in
     accordance with the terms of the El Dorado Acquisitions Documents or the
     Guajillo Acquisitions Documents, as applicable;

              (iii) the Administrative Agent shall have received copies of the
     documents relating to the Acquisition and such legal opinions relating
     thereto as are provided for in the El Dorado Acquisitions Documents or the
     Guajillo Acquisitions Documents, as applicable, (which opinions shall also
     be addressed to the Administrative Agent and the Lenders or shall be
     accompanied by letters authorizing or shall otherwise expressly permit the
     Administrative Agent and the Lenders to rely thereon) and the same shall be
     satisfactory to the Administrative Agent and Special Counsel and shall be
     in full force and effect and shall not have been amended, modified or
     supplemented except in accordance with the terms hereof;

              (iv)  the Administrative Agent shall have received evidence that
     all filings and registrations required to be made with the FCC and all
     other applicable Governmental Authorities in connection with the
     consummation of the Acquisition shall have been submitted and, to the
     extent applicable, approved, and shall be effective (except for any filings
     required to be made following the consummation of the Acquisition,
     including filing with the FCC of notice of the consummation of the
     Acquisition and of any related financing documents and ownership reports);
     and

              (v)   the Administrative Agent shall have received a certificate
     of an officer of the Borrower to the effect that the conditions set forth
     in clauses (i)-(iv) above have been satisfied.

To the extent that the El Dorado Acquisitions or the Guajillo Acquisitions are
not consummated on the Closing Date, the Credit Parties shall be required to
satisfy the requirements of Section 7.4(d) with respect to such Acquisition.

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                                    ARTICLE 6

                              Affirmative Covenants

     Until the Commitments have expired or been terminated and the principal of
and interest on each Loan and all fees payable hereunder shall have been paid in
full and all Letters of Credit shall have expired or terminated and all LC
Disbursements shall have been reimbursed, each of the Credit Parties covenants
and agrees with the Lenders that:

     6.1 Financial Statements and Other Information. The Borrower will furnish
to the Administrative Agent for distribution to each Lender:

         (a) as soon as available and in any event within 120 days after the end
of each fiscal year of the Credit Parties:

              (i)   consolidated and consolidating (by Broadcast Station)
     statements of income and consolidated statements of retained earnings and
     cash flows of the Credit Parties for such fiscal year and the related
     consolidated balance sheet of the Credit Parties as at the end of such
     fiscal year, setting forth in each case in comparative form the
     corresponding consolidated figures for the preceding fiscal year,

              (ii)  an opinion of independent certified public accountants of
     recognized national standing (without a "going concern" or like
     qualification or exception and without any qualification or exception as to
     the scope of such audit) stating that said consolidated financial
     statements referred to in the preceding clause (i) fairly present in all
     material respects the consolidated financial condition and results of
     operations of the Credit Parties as at the end of, and for, such fiscal
     year in accordance with GAAP, and a statement of such accountants that, in
     connection with their audit, nothing came to their attention that caused
     them to believe that the Credit Parties failed to comply with the terms,
     covenants, provisions or conditions of Section 7.10, insofar as they relate
     to accounting matters, and

              (iii) a certificate of a Financial Officer of the Credit Parties
     stating that said consolidating financial statements referred to in the
     preceding clause (i), substantially in the form previously delivered
     supplied by the Borrower to its lenders, fairly present the respective
     individual unconsolidated results of operations of the Credit Parties for
     such fiscal year;

          (b) as soon as available and in any event within 60 days after the end
of each quarterly fiscal period (including the fourth fiscal period) of each
fiscal year of the Credit Parties:

              (i)   consolidated and consolidating (by Broadcast Station and by
     television and radio businesses) statements of income of the Credit Parties
     for such period and for the period from the beginning of the respective
     fiscal year to the end of such period, and the related consolidated balance
     sheet of the Credit Parties as at the end of such period, together with a
     comparison of cash flows against management's budget for such period, and

                                       85



              (ii)  a certificate of a Financial Officer of the Credit Parties,
     which certificate shall state that said consolidated financial statements
     referred to in the preceding clause (i) fairly present, in all material
     respects, the consolidated financial condition and results of operations of
     the Credit Parties and that said consolidating financial statements
     referred to in the preceding clause (i) fairly present, in all material
     respects, the respective individual unconsolidated results of operations of
     the Credit Parties, in each case in accordance with generally accepted
     accounting principles, consistently applied, as at the end of, and for,
     such period (subject to normal year-end audit adjustments and the omission
     of footnotes);

          (c) commencing with the financial statements delivered under clause
(b) above for the fiscal quarter ending September 30, 2002, concurrently with
any delivery of financial statements under clauses (a) and (b) above, a
Compliance Certificate;

          (d) as soon as available and in any event within 45 days after the end
of each month of each fiscal year of the Credit Parties:

              (i)   consolidated statement of income and a statement showing a
     calculation of EBITDA for such period of the Credit Parties for such period
     and for the period from the beginning of the respective fiscal year to the
     end of such period, and, together with a comparison of results against such
     period of the prior fiscal year,

              (ii)  a certificate of a Financial Officer of the Credit Parties,
     which certificate shall state that said consolidated financial statements
     referred to in the preceding clause (i) fairly present in all material
     respects the consolidated results of operations of the Credit Parties for
     such period (subject to normal year-end audit adjustments and the omission
     of footnotes);

          (e) promptly upon the mailing thereof to the holders of any
Indebtedness or equity interests in the Credit Parties or the Holding Companies
generally, copies of all financial statements, regular reports and other
statements so mailed;

          (f) as soon as available and in any event no later than 30 days after
the commencement of each fiscal year, a budget for the Credit Parties for such
fiscal year;

          (g) promptly after the same become publicly available, copies of all
registration statements, regular periodic and other reports and statements filed
by any Holding Company or any Credit Party with the Securities and Exchange
Commission or any Governmental Authority succeeding to any or all of the
functions of said Commission or with any national securities exchange or market
quotation system and copies of all press releases by the Holding Company or any
Credit Party including, to the extent not included in the foregoing, any regular
periodic and other reports and statements provided by any Holding Company or any
Credit Party to the holders of the Senior Subordinated Notes; and

          (h) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of any Credit
Party, or compliance with the terms of this Agreement, as the Administrative
Agent or the Required Lenders may reasonably request.

                                       86



     6.2  Notices of Material Events. The Credit Parties, promptly upon
obtaining knowledge thereof, will furnish to the Administrative Agent for
distribution to each Lender written notice of the following:

          (a) the occurrence of any Default;

          (b) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or affecting any Credit
Party or other Affiliate thereof for which there is a reasonable possibility of
a determination that would have a Material Adverse Effect;

          (c) a final judgment or judgments for the payment of money in excess
of $1,000,000 in the aggregate (regardless of insurance coverage), shall be
rendered by one or more courts, administrative tribunals or other bodies having
jurisdiction against any Credit Party;

          (d) the occurrence of any ERISA Event related to the Plan of any
Credit Party or knowledge after due inquiry of any ERISA Event related to a Plan
of any other ERISA Affiliate that, alone or together with any other ERISA Events
that have occurred, could reasonably be expected to result in liability of the
Credit Parties in an aggregate amount exceeding $250,000;

          (e) the receipt by any Credit Party from the FCC or any other
Governmental Authority of (a) any order or notice of the FCC or any other
Governmental Authority or any court of competent jurisdiction which designates
any Material FCC License or any other material license, permit or authorization
of the Credit Parties, or any application therefore, for a hearing, or which
refuses renewal or extension of, or revokes, materially modifies, terminates or
suspends any Material FCC License or other material license, permit or
authorization now or hereafter held by any Credit Party, or (b) any notice of
any competing application filed with respect to any Material FCC License or
other material license, permit or authorization now or hereafter held by any
Credit Party, or any material citation, material notice of violation or material
order to show cause issued by the FCC or any other Governmental Authority with
respect to any Credit Party;

          (f) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect;

          (g) any communication, written or oral, with the Internal Revenue
Service or the California Franchise Tax Board regarding the validity,
revocation, and/or termination of the S Corporation Election or the QSSS
Election as well as the timing thereof;

          (h) copies of its federal income tax returns (Forms 1120-S),
California income tax returns, and summaries of all financial information used
to calculate the Permitted Shareholder Tax Distributions and Permitted Holdings
Tax Distributions;

          (i) any communications, written or oral, with the Internal Revenue
Service or the California Franchise Tax Board regarding proposed or agreed upon
changes in the Federal Taxable Income or the California Taxable Income which
would have a Material Adverse Effect;

                                       87



          (j) in any taxable year in which the Federal Taxable Income or the
California Taxable Income is negative, with copies of Holdings I's shareholders'
individual federal and California income tax returns for the taxable year(s) of
its shareholder(s) ending on or after such year; and

          (k) on the date of the occurrence thereof, notice that (i) any or all
of the obligations under the Senior Subordinated Note Indenture have been
accelerated, or (ii) that trustee or required holders of the Senior Subordinated
Notes has been given notice that any or all such obligations are to be
accelerated.

Each notice delivered under this Section 6.2 shall be accompanied by a statement
of a Financial Officer or other executive officer of the Credit Parties setting
forth the details of the event or development requiring such notice and any
action taken or proposed to be taken with respect thereto.

     6.3  Existence; Conduct of Business. Each of the Credit Parties will do or
cause to be done all things necessary in the exercise of its reasonable business
judgment to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises material
to the conduct of the business of the Credit Parties taken as a whole; provided
that the foregoing shall not prohibit any merger, consolidation, liquidation,
dissolution or any discontinuance or sale of such business permitted under
Section 7.4.

     6.4  Payment of Obligations. Each of the Credit Parties will pay its
obligations, including Tax liabilities, that, if not paid, could result in a
Material Adverse Effect before the same shall become delinquent or in default,
except where (a) the validity or amount thereof is being contested in good faith
by appropriate proceedings, (b) such Credit Party has set aside on its books
adequate reserves with respect thereto in accordance with GAAP and (c) the
failure to make payment pending such contest could not reasonably be expected to
result in a Material Adverse Effect.

     6.5  Maintenance of Properties; Insurance. Each of the Credit Parties will
(a) keep and maintain all property material to the conduct of its business in
good working order and condition, ordinary wear and tear excepted, and (b)
maintain insurance, with financially sound and reputable insurance companies, as
may be required by law, and such other insurance in such amounts and against
such risks as are customarily maintained by companies engaged in the same or
similar businesses operating in the same or similar locations, including
business interruption, product liability insurance media perils insurance.
Without limiting the generality of the foregoing, the Credit Parties will
maintain or cause to be maintained (or provide evidence reasonably acceptable to
the Administrative Agent that such insurance is not available at a reasonable
cost) replacement value property insurance on the Collateral under such policies
of insurance and (x) with respect to each property located in California on the
Closing Date, such policies of earthquake insurance as are currently maintained
by the Credit Parties and (y) for each property located in California acquired
after the Closing Date such additional policies of earthquake insurance with
similar scope and amounts as the policies maintained by the Credit Parties on
the Closing Date, in each case with such insurance companies, in such amounts,
with such deductibles, and covering such terms and risks as are at all times
satisfactory to the Administrative Agent in its commercially reasonable
judgment. Such policies of insurance with

                                       88



respect to the Credit Parties shall (x) name the Administrative Agent and the
Lenders as additional insureds thereunder as their interests may appear and (y)
in the case of each business interruption and property insurance policy, contain
a loss payable clause or endorsement, satisfactory in form and substance to the
Administrative Agent that names the Administrative Agent for the benefit of the
Lenders as the loss payee thereunder (except with respect to losses of less than
$500,000 per occurrence, which may be paid directly to Borrower provided no
Default is continuing) and provides for at least 30 days' prior written notice
to the Administrative Agent of any modifications or cancellation of such policy.

     6.6  Books and Records; Inspection Rights. Each of the Credit Parties will
keep proper books of record and account in which entries are made of all
material dealings and transactions in relation to its business and activities
which fairly record such transactions and activities consistent with past
practice. Each of the Credit Parties will permit any representatives designated
by the Administrative Agent or any Lender upon reasonable notice and at
reasonable times during normal business hours to visit and inspect its
properties, to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with Jose and Lenard Liberman, the
Borrower's chief financial officer and Borrower's independent accountants;
provided the Borrower may choose to be present at or participate in any of such
discussions. The Credit Parties, in consultation with the Administrative Agent,
if requested by the Administrative Agent, will arrange for a meeting to be held
at least once every year with the Lenders and the Administrative Agent hereunder
at which the business and operations of the Credit Parties are discussed.

     6.7  Fiscal Year. None of the Credit Parties will change its fiscal year or
the method of determining the last day of the first three fiscal quarters in
each of its fiscal years without the prior written consent of the Administrative
Agent, which consent shall not be unreasonably withheld but which may be
conditioned on amendments to Section 7.10.

     6.8  Compliance with Laws, Maintenance of FCC Licenses. Each of the Credit
Parties will comply with (i) all laws, rules, regulations and orders including
all FCC Regulations, Environmental Laws and all other laws, rules, regulations,
policies and orders of any Governmental Authority, (ii) the terms of all FCC
Licenses, and (iii) all contractual obligations, in each case applicable to it
or its property, except, in each case, where the failure to do so, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect. Each Credit Party shall file or cause to be filed all necessary
applications for renewal of, and shall preserve in full force and effect all,
Material FCC Licenses; provided, however, that any failure to preserve any
Material FCC License in full force and effect which results either from (x) the
conversion of analog television stations to digital television or (y) from a
Relocation shall not constitute a breach of this Section 6.8. Each Credit Party
shall promptly furnish or caused to be furnished to the Administrative Agent
copies of all material applications, reports and filings filed by the Credit
Parties with the FCC, and promptly upon the Borrower acquiring knowledge
thereof, copies of all material petitions and motions filed by third parties
with the FCC involving the Credit Parties, in each case, with respect to the
Material FCC Licenses or the Broadcast Stations.

     6.9 Use of Proceeds. The proceeds of the Loans and the Letters of Credit
(together with the proceeds of the issuance of the Senior Subordinated Notes)
will be used only for (a)

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financing the purchase price for El Dorado Acquisitions and the Guajillo
Acquisitions, (b) the refinancing on the Closing Date of amounts payable under
clause (a) of the definition of Existing Debt, (c) the redemption on the Closing
Date of existing Indebtedness of Intermediate Holdings to Oaktree and certain
other debt holders under the Oaktree Note Purchase Documents (including
redemption premiums) in an aggregate amount not in excess of $55,000,000, (d)
the repayment on the Closing Date of up to $1,580,000 aggregate principal amount
of Liberman Subordinated Debt to Jose Liberman, (e) the repayment of Liberman
Subordinated Debt, and/or the payment of a dividend, or the making of a loan, to
Lenard Liberman in an aggregate amount up to $2,130,000 on the Closing Date, in
each case, plus accrued interest, (f) Transaction Costs, (g) Permitted
Acquisitions pursuant to Section 7.4, (h) Capital Expenditures permitted
hereunder, (i) closing costs for the Transactions, and (j) general corporate and
working capital purposes of the Credit Parties. No part of the proceeds of any
Loan or the Letters of Credit will be used, whether directly or indirectly, to
purchase or carry any margin stock or for any purpose that entails a violation
of any of the Regulations of the Board, including Regulations U, T and X. All
net proceeds from the issuance of the Senior Subordinated Notes shall be applied
by the Borrower for the foregoing purposes concurrently with any proceeds of the
Loans being applied for such purposes.

     6.10 Certain Obligations Respecting Guarantors and Collateral Security.

          (a) Additional Subsidiaries. In the event that any Credit Party shall
form or acquire any new Subsidiary after the date hereof, such Credit Party will
cause such new Subsidiary,

              (i)  within ten Business Days after such formation or acquisition:

                   (A)  to execute and deliver to the Administrative Agent the
          following documents: (1) a counterpart to this Agreement (and thereby
          to become a party to this Agreement, as a "Guarantor" hereunder) and
          (2) a counterpart to the Pledge Agreement and a counterpart to the
          Security Agreement (and thereby to become a party to each such
          agreement);

                   (B)  to take such action (including delivering such shares of
          stock and executing and delivering such UCC financing statements) as
          shall be necessary to create and perfect valid and enforceable First
          Priority Liens on all assets and property of such Subsidiary, subject
          only to Permitted Liens, consistent with the provisions of the
          applicable Collateral Documents (other than the Mortgages to be
          provided under clause (ii) below); and

                   (C)  to deliver such proof of corporate action, incumbency of
          officers and other documents as is consistent with those delivered by
          each Credit Party pursuant to Section 5.1 at the Effective Time or as
          the Administrative Agent shall have reasonably requested; and

              (ii) within thirty days after such formation or acquisition to
     execute and deliver to the Administrative Agent Mortgages and such other
     instruments, documents and agreements as may be reasonably required by the
     Administrative Agent as

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     shall be necessary to create and perfect valid and enforceable First
     Priority Liens, subject only to Permitted Liens;.

          (b) Ownership of Subsidiaries. Subject to Section 7.4, no Credit Party
shall sell, transfer or otherwise dispose of any shares of stock or other equity
interests in any Subsidiary owned by it, nor issue or permit any Subsidiary, to
issue, any shares of stock of any class or other equity interests whatsoever to
any Person, except that (i) the Borrower may issue stock or equity to
Intermediate Holdings (or after the merger of Intermediate Holdings with and
into the Borrower in accordance with Section 7.4(g), to Holdings I) and (ii) any
Credit Party may issue stock or equity to another Credit Party provided such
stock or equity is pledged to the Administrative Agent as set forth below.
Subject to Section 7.4, each of the Credit Parties will cause each of its
Subsidiaries to take such action from time to time as shall be necessary to
ensure that the percentage of the equity capital of any class or character owned
by such Credit Party in any Subsidiary on the date hereof (or, in the case of
any newly formed or newly acquired Subsidiary, on the date of formation or
acquisition) is not at any time decreased, other than by reason of transfers to
another Credit Party. In the event that any additional shares of stock or other
equity interests shall be issued by any Credit Party (other than issuance by the
Borrower of its capital stock to Intermediate Holdings(or after the merger of
Intermediate Holdings with and into the Borrower in accordance with Section
7.4(g), to Holdings I)), the respective holder of such shares of stock or other
equity interests shall forthwith deliver to the Administrative Agent pursuant to
the Pledge Agreement the certificates evidencing such shares of stock,
accompanied by undated stock powers executed in blank, and shall take such other
action as the Administrative Agent shall request to perfect the security
interest created therein pursuant to such pledge agreement.

     6.11 ERISA. Except where a failure to comply with any of the following,
individually or in the aggregate, would not or could not reasonably be expected
to result in a Material Adverse Effect, (i) to the extent applicable, the Credit
Parties will maintain, and cause each ERISA Affiliate to maintain, each Plan of
any Credit Party or any ERISA Affiliate in compliance with all applicable
requirements of ERISA and of the Code and with all applicable rulings and
regulations issued under the provisions of ERISA and of the Code and (ii) the
Credit Parties will not and, to the extent they have the authority to do so,
will not permit any of the ERISA Affiliates to (a) engage in any transaction
with respect to any Plan which would subject any Credit Party to either a civil
penalty assessed pursuant to Section 502(i) of ERISA or a tax imposed by Section
4975 of the Code, (b) fail to make full payment when due of all amounts which,
under the provisions of any Plan, any of the Credit Parties or any ERISA
Affiliate is required to pay as contributions thereto, or permit to exist any
accumulated funding deficiency (as such term is defined in Section 302 of ERISA
and Section 412 of the Code), whether or not waived, with respect to any Pension
Plan or (c) fail to make any payments to any Multiemployer Plan that any of the
Credit Parties or any of the ERISA Affiliates may be required to make under any
agreement relating to such Multiemployer Plan or any law pertaining thereto.

     6.12 Environmental Matters; Reporting. The Credit Parties will observe and
comply with, and cause each Affiliate to observe and comply with all laws,
rules, regulations and orders of any government or government agency relating to
health, safety, pollution, hazardous materials or other environmental matters to
the extent non-compliance could have a Material Adverse Effect. The Credit
Parties will give the Administrative Agent prompt written notice of

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any violation as to any environmental matter by any Credit Party or Affiliate
and of the commencement of any judicial or administrative proceeding relating to
health, safety or environmental matters (a) in which an adverse result would
have a material adverse effect on any operating permits, air emission permits,
water discharge permits, hazardous waste permits or other permits held by any
Credit Party or Affiliate which are material to the operations of such Credit
Party or Affiliate, or (b) which will, or is likely to, have a Material Adverse
Effect on such Credit Party or Affiliate to any Person or which will require a
material expenditure by such Credit Party or Affiliate to cure any alleged
problem or violation.

     6.13 Conforming Leasehold Interests; Matters Relating to Real Property
Collateral.

          (a) If (i) any Credit Party acquires or (ii) at the time any Person
becomes a Subsidiary (other than a Subsidiary that is not required to become a
Guarantor), such Person holds, any Material Leasehold Property, the Credit Party
or such Person shall cause such Material Leasehold Property to be a Conforming
Leasehold Interest but excluding any Material Leasehold Property where, in the
Administrative Agent's reasonable discretion, the costs of causing such property
to become a Conforming Leasehold Interest is excessive in relation to the value
of the benefit to be afforded to the Lenders thereby or where such property is
not material to the business and operations of such Credit Party or such Person.

          (b) From and after the Effective Time, in the event that (i) any
Credit Party acquires any fee interest in real property or any Material
Leasehold Property, or (ii) at the time any Person becomes a Subsidiary (other
than a Subsidiary that is not required to become a Guarantor), such Person owns
or holds any fee interest in real property or any Material Leasehold Property,
in either case excluding any such Real Property Asset (x) where, in the
Administrative Agent's reasonable discretion, the costs of obtaining a security
interest in such Real Property Asset is excessive in relation to the value of
the benefit to be afforded to the Lenders thereby or where such property is not
material to the business and operations of such Credit Party or such Person or
(y) the encumbering of which requires the consent of any applicable lessor or
(in the case of clause (ii) above) any then-existing senior lienholder, where
the Credit Parties are unable to obtain such lessor's or senior lienholder's
consent (any such non-excluded Real Property Asset described in the foregoing
clause (i) or (ii) being a "Additional Mortgaged Property"), such Credit Party
shall deliver to the Administrative Agent, as soon as practicable after such
Person acquires such Additional Mortgaged Property or such Person is acquired,
the following:

              (i)  Additional Mortgages. A fully executed and notarized Mortgage
     (an "Additional Mortgage"), in proper form for recording in all appropriate
     places in all applicable jurisdictions, encumbering the interest of such
     Credit Party in such Additional Mortgaged Property, and the Administrative
     Agent shall have the right in its sole discretion, but only after
     consulting with the Borrower, to record such Additional Mortgage;

              (ii) Leasehold Interests. In the case of any Additional Mortgaged
     Property consisting of a Leasehold Property, copies of all leases between
     any Credit Party and any landlord or tenant;

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              (iii) Landlord Waivers and Consents. In the case of any Additional
     Mortgaged Property consisting of a Leasehold Property, (a) a Landlord
     Waiver and Consent with respect thereto and where required by the terms of
     any lease, the consent of the mortgagee, ground lessor or other party and
     (b) evidence that such Leasehold Property is a Recorded Leasehold Interest;

              (iv)   Matters Relating to Flood Hazard Properties. (A) Evidence
     as to whether any Additional Mortgaged Property is a Flood Hazard Property
     and (B) if such Additional Mortgaged Property is a Flood Hazard Property,
     evidence that the applicable Credit Party has obtained flood insurance with
     respect to each Flood Hazard Property in amounts reasonably approved by the
     Administrative Agent, or evidence acceptable to the Administrative Agent
     that such insurance is not available;

              (v)    Title Insurance.  (A) If required by the Administrative
     Agent, ALTA mortgagee title insurance policies or unconditional commitments
     therefor (the "Additional Mortgage Policies") issued by the Title Company
     with respect to the Additional Mortgaged Property, in an amount reasonably
     satisfactory to the Administrative Agent, insuring fee simple title to, or
     a valid leasehold interest in, each such Additional Mortgaged Property
     vested in such Credit Party and assuring the Administrative Agent that such
     Additional Mortgage creates a valid and enforceable First Priority mortgage
     Lien on such Additional Mortgaged Property, subject only to any standard
     exceptions as may be reasonably acceptable to the Administrative Agent,
     which Additional Mortgage Policy (I) shall include all endorsements for
     matters reasonably requested by the Administrative Agent and (II) shall
     provide for affirmative insurance and such reinsurance as the
     Administrative Agent may reasonably request, all of the foregoing in form
     and substance reasonably satisfactory to the Administrative Agent; and (B)
     evidence reasonably satisfactory to the Administrative Agent that such
     Credit Party has (I) delivered to the Title Company all certificates and
     affidavits required by the Title Company in connection with the issuance of
     the Additional Mortgage Policy and (II) paid to the Title Company or to the
     appropriate Governmental Authorities all expenses and premiums of the Title
     Company in connection with the issuance of the Additional Mortgage Policy
     and all recording and stamp taxes (including mortgage recording and
     intangible taxes) payable in connection with recording the Additional
     Mortgage in the appropriate real estate records;

              (vi)   Copies of Documents Relating to Title Exceptions. Copies of
     all recorded documents listed as exceptions to title or otherwise referred
     to in the Additional Mortgage Policy;

              (vii)  Environmental Audit. If reasonably required by the
     Administrative Agent, reports and other information in form, scope and
     substance reasonably satisfactory to the Administrative Agent and prepared
     by environmental consultants satisfactory to the Administrative Agent,
     concerning any environmental hazards or liabilities to which any Credit
     Party may be subject with respect to such Additional Mortgaged Property;
     and

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               (viii) Opinions of Counsel. (1) A favorable opinion of counsel
     (which counsel shall be reasonably satisfactory to the Administrative Agent
     and Special Counsel), as to the due authorization, execution and delivery
     by such Credit Party of such Additional Mortgage and such other matters as
     the Administrative Agent may reasonably request, and (2) if required by the
     Administrative Agent, an opinion of counsel (which counsel shall be
     reasonably satisfactory to the Administrative Agent and Special Counsel) in
     the state in which such Additional Mortgaged Property is located with
     respect to the enforceability of the form of Additional Mortgages to be
     recorded in such state and such other matters (including any matters
     governed by the laws of such state regarding personal property security
     interests in respect of any Collateral) as the Administrative Agent may
     reasonably request, in each case in form and substance reasonably
     satisfactory to the Administrative Agent.

          (c)  If (i) any Credit Party acquires or (ii) at the time any Person
becomes a Subsidiary (other than a Subsidiary that is not required to become a
Guarantor), such Person holds, any Material Property License, the Credit Party
or such Person shall cause to be delivered to the Administrative Agent, a
Licensor Consent with respect thereto excluding any Material Property License
where, in the Administrative Agent's reasonable discretion, the costs of
obtaining such consent is excessive in relation to the value of the benefit to
be afforded to the Lenders thereby.

          (d)  Notwithstanding anything herein to the contrary, the Credit
Parties shall be required only to exercise best efforts to comply with the terms
of this Section 6.13 with respect to any leasehold or license interest in any
Real Property Assets acquired in connection with the acquisition of radio
stations KEYH-AM, KQQK-FM, KIOX-FM or KXGJ-FM.

          (e) Notwithstanding the foregoing, the Credit Parties and Empire
Burbank shall not be obligated to comply with this Section 6.13 with regard to
(i) the Burbank Office Property so long as the Empire Burbank Loan shall be
outstanding, and the Empire Burbank Mortgage shall continue to encumber such
property and (ii) the Hollywood Office Property. So long as the Empire Burbank
Loan shall be outstanding, Empire Burbank shall not be required to grant to the
Administrative Agent a security interest in any of its assets.

     6.14 Hedging Agreements. The Borrower shall maintain, at all times when the
Total Leverage Ratio as at the end of the preceding fiscal quarter for which
financial statements and a Compliance Certificate shall have been delivered
pursuant to Section 6.1(c) is greater than or equal to 4.00 to 1, a Hedging
Agreement, reasonably satisfactory to the Administrative Agent, that shall cap
for the period from the Closing Date to the second anniversary thereof the rate
of interest payable by the Borrower with respect to its outstanding Indebtedness
for borrowed money with respect to the principal amount of such Indebtedness
equal to the excess of (a) 50% of the aggregate outstanding principal amount of
Indebtedness for borrowed money and with respect to letters of credit of the
Borrower minus (b) any Indebtedness for borrowed money and with respect to
letters of credit of the Borrower that is subject to a fixed rate of interest.

     6.15 Post-Closing Obligations. The Borrower will, and will cause each of
its Subsidiaries to, exercise diligent efforts to obtain a Control Agreement for
the deposit accounts

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and securities accounts maintained by the Credit Parties at Union Bank of
California, N.A. on or before the date that is sixty (60) days after the Closing
Date.

                                    ARTICLE 7

                               Negative Covenants

     Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full and
all Letters of Credit shall have expired or terminated and all LC Disbursements
shall have been reimbursed, the Credit Parties covenant and agree with the
Administrative Agent and the Lenders that:

     7.1  Indebtedness. The Credit Parties and their Subsidiaries shall not
create, incur, assume or permit to exist any Indebtedness, except:

          (a)  Indebtedness created under the Loan Documents;

          (b)  Indebtedness existing on the date hereof which is set forth in
Schedule 4.14 and has been designated on such schedule as Indebtedness that will
remain outstanding following the funding of the initial Loans, and any
extension, renewal, refunding or replacement of any such Indebtedness that does
not increase the principal amount thereof;

          (c)  Unsecured Indebtedness of any Credit Party to any other Credit
Party;

          (d)  Indebtedness of Empire Burbank under the Empire Burbank Loan
Documents; provided that the outstanding principal amount of Indebtedness under
the Empire Burbank Loan does not exceed $3,000,000;

          (e)  Indebtedness evidenced by the promissory notes described in
clause (A) of the definition of "Liberman Subordinated Debt" which shall be paid
in full on the Closing Date with the proceeds of the Loans;

          (f)  Indebtedness to Jose and/or Lenard Liberman (or their spouses,
lineal descendants, or heirs and devises or any trusts controlled by them)
referred to in clause (B) of the definition of the "Liberman Subordinated Debt"
but only to the extent such indebtedness is subordinated to the Loans (or any
Credit Party's obligations to the Lenders and the Administrative Agent) pursuant
to subordination agreements substantially identical to the Liberman
Subordination Agreements; provided that the aggregate Indebtedness of the Credit
Parties under Sections 7.1(e) and (f) shall not exceed $5,000,000 at any one
time outstanding;

          (g)  Indebtedness of the Credit Parties (determined on a consolidated
basis without duplication in accordance with GAAP) consisting of Capital Lease
Obligations, secured by Liens permitted under Section 7.2(i) and/or in
connection with the acquisition of real property (other than any real property
received or acquired in any Acquisition or Relocation) in an aggregate principal
amount not exceeding $7,000,000 at any one time outstanding;

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          (h) Indebtedness (i) under any Hedging Agreement required under
Section 6.14 or otherwise not prohibited under Section 7.5(b) or (ii) for bank
overdrafts in the ordinary course of business that are promptly repaid;

          (i) Indebtedness arising from guaranties of Indebtedness of any Credit
Party permitted hereunder or other agreements of any Credit Party providing for
indemnification, adjustment of purchase price or similar customary obligations,
in each case incurred or assumed in connection with the disposition of any
business or assets of any Credit Party permitted by Section 7.4; provided that
the maximum assumable liability in respect of all such Indebtedness shall at no
time exceed the gross proceeds actually received by the Credit Parties in
connection with such disposition;

          (j) Indebtedness in respect of the Relocation Profit to the extent
required to be paid to the Shop At Home Sellers pursuant to the Shop At Home
Acquisition Documents;

          (k) unsecured Indebtedness in respect of the Senior Subordinated Notes
in an aggregate principal amount not exceeding $150,000,000; provided the
Borrower may incur up to an additional $50,000,000 of unsecured Indebtedness in
respect of the Senior Subordinated Notes so long as no Default shall have
occurred and be continuing or caused thereby and, if the interest rate on such
additional Indebtedness exceeds 10-1/8% per annum, then subject to the delivery
by the Borrower to the Administrative Agent of an officer's certificate executed
by a Financial Officer demonstrating on a pro forma basis compliance with the
covenant set forth in Section 7.10(c) for the period of four consecutive fiscal
quarters most recently ended as if such incurrence had occurred on the first day
of such period;

          (l) Indebtedness required to be incurred in connection with any
"Incentive Bonus" which may become payable pursuant to Eduardo Leon's employment
agreement; and

          (m) In addition to the foregoing, unsecured Indebtedness in an
aggregate principal amount not exceeding $4,000,000 at any time outstanding;
provided that Indebtedness under this subsection (m) shall not include any
Indebtedness to any holder of Holding Company Debt or other Indebtedness of any
Holding Company unless such Indebtedness is subject to a subordination agreement
satisfactory in form and substance to the Administrative Agent.

     7.2  Liens. No Credit Party or Subsidiary will create, incur, assume or
permit to exist any Lien in favor of any other Person on any Property or asset
now owned or hereafter acquired by it, or assign or sell any income or revenues
(including accounts receivable) or rights in respect of any thereof, except (the
following being called "Permitted Liens"):

          (a) Liens created under the Loan Documents;

          (b) any Lien on any property or asset of any Credit Party or
Subsidiary existing on the date hereof and set forth in Schedule 7.2(b);
provided that (i) such Lien shall not apply to any other property or asset of
any Credit Party and (ii) such Lien shall secure only those obligations which it
secures on the date hereof and extensions, renewals and replacements thereof
that do not increase the outstanding principal amount thereof;

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          (c) Liens imposed by any Governmental Authority for taxes, assessments
or charges not yet due or (in the case of property taxes and assessments not
exceeding $1,000,000 in the aggregate more than 90 days overdue) which are being
contested in good faith and by appropriate proceedings if adequate reserves with
respect thereto are maintained on the books of any Credit Party or Subsidiary in
accordance with GAAP;

          (d) landlords', carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens, and vendors' Liens imposed by statute or common
law not securing the repayment of Indebtedness, arising in the ordinary course
of business which are not overdue for a period of more than 60 days or which are
being contested in good faith and by appropriate proceedings and Liens securing
judgments (including pre-judgment attachments) but only to the extent for an
amount and for a period not resulting in an Event of Default under Section
8.1(j) hereof;

          (e) pledges or deposits under worker's compensation, unemployment
insurance and other social security legislation and deposits securing liability
to insurance carriers under insurance or self-insurance agreements;

          (f) pledges and deposits to secure the performance of bids, tenders,
trade contracts (other than for borrowed money), leases, statutory obligations,
surety and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business;

          (g) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and encumbrances
consisting of zoning restrictions, easements, licenses, restrictions on the use
of Property or minor imperfections in title thereto which, in the aggregate, are
not material in amount, and which do not, in the aggregate, materially detract
from the value of the Property of any Credit Party or materially interfere with
the ordinary conduct of the business of any Credit Party;

          (h) Liens consisting of bankers' liens and rights of setoff, in each
case, arising by operation of law, and Liens on documents presented in letter of
credit drawings;

          (i) Liens on tangible property, including real or personal property,
acquired, constructed or improved by any Credit Party, provided that (A) such
Liens secure Indebtedness (including Capital Lease Obligations) permitted by
Section 7.1(g), (B) such Liens and the Indebtedness secured thereby are incurred
prior to or within 120 days after such acquisition or the completion of such
construction or improvement, (C) the Indebtedness secured thereby does not
exceed the cost of acquiring, constructing or improving such fixed or capital
assets, and (D) such security interests shall not apply to any other property or
assets of any Credit Party or Subsidiary;

          (j) the Liens created by (i) the Empire Burbank Mortgage; provided
that such Liens shall apply only to the Burbank Property and any other property
of Empire Burbank referred to in such Mortgage on the date the Empire Burbank
Loan was funded and (ii) the Empire Burbank Lease;

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          (k) Uniform Commercial Code financing statement filings with respect
to Property leased by the Credit Parties;

          (l) Assignments of uncollectible accounts receivable to collection
agencies in the ordinary course of business; and

          (m) any zoning or similar law or right reserved to or vested in any
Governmental Authority to control or regulate the use of any real property which
does not result in, or could not reasonably be expected to result in, a Material
Adverse Effect.

     7.3  Contingent Liabilities. No Credit Party or Subsidiary will Guarantee
the Indebtedness or other obligations of any Person, or Guarantee the payment of
dividends or other distributions upon the stock of, or the earnings of, any
Person, except:

          (a) endorsements of negotiable instruments for deposit or collection
or similar transactions in the ordinary course of business;

          (b) Guarantees of obligations of any Credit Party by any other Credit
Party to the extent constituting Indebtedness expressly permitted by Section
7.1, except that no Credit Party shall Guarantee the Empire Burbank Loan;

          (c) Guarantees in effect on the date hereof which are disclosed in
Schedule 4.14, and any replacements thereof in amounts not exceeding such
Guarantees;

          (d) obligations to the Issuing Lender in respect of Letters of Credit;

          (e) Guarantees of obligations of any Credit Party by any other Credit
Party for obligations to suppliers, customers, franchisees, lessors and
licensees to the extent incurred in the ordinary course of business;

          (f) unsecured Guarantees by the Guarantors of the Senior Subordinated
Notes; and

          (g) Guarantees of the Credit Parties in addition to the Guarantees
permitted under the foregoing clauses of this Section 7.3 (excluding any
Guarantee of the Empire Burbank Loan); provided that (i) the maximum aggregate
principal amount Guaranteed under this clause (g) shall not exceed $2,000,000 at
any time outstanding and (ii) the maximum aggregate principal amount Guaranteed
under this clause (g) plus principal amount of any Investments permitted under
Section 7.5(a)(iii) shall not exceed $4,000,000 at any time outstanding.

     7.4  Fundamental Changes; Asset Sales. No Credit Party will enter into any
transaction of merger or consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution). No Credit Party will
effect any Disposition or Relocation or acquire any business or property from,
or capital stock of, or other equity interests in, or be a party to any
acquisition (including any Acquisition) of, any Person except for purchases by
any Credit Party of property to be used in the ordinary course of business,
Investments permitted hereunder, Capital Expenditures permitted hereunder, and
Acquisitions permitted hereunder (including the El Dorado Acquisitions and the
Guajillo Acquisitions). No

                                       98



Credit Party will convey, sell, lease, transfer or otherwise dispose (including
any Disposition) of, in one transaction or a series of transactions, any part of
its business or property, whether now owned or hereafter acquired (including
receivables and leasehold interests, but excluding (x) obsolete or worn-out
property (including leasehold interests), tools or equipment no longer used or
useful in its business, and (y) any inventory or other property sold or disposed
of in the ordinary course of business and on ordinary business terms; provided
that a Credit Party may (1) lease or sublease real property to the extent such
lease or sublease would not materially interfere with the operation of the
businesses of the Credit Parties and (2) enter into any sale, lease, transfer or
other disposition described clauses (a) through (f) of the definition of
Disposition. The Lenders and the Administrative Agent (as the case may be) at
the Borrower's expense hereby agree to complete, execute and deliver to the
Borrower, upon reasonable prior written notice to the Administrative Agent and
upon provision by the Borrower of a draft of such instrument, any release or
termination of security interest required to permit the applicable Credit Party
conveying, selling, leasing, transferring or otherwise disposing of any part of
its property pursuant to and in accordance with the preceding sentence to
convey, sell, lease, transfer or otherwise dispose of such property free and
clear of any Lien under the Collateral Documents.

         Notwithstanding the foregoing provisions of this Section 7.4:

          (a) any Credit Party (other than the Borrower or any License
Subsidiary) may be merged or consolidated with or into the Borrower or any other
Credit Party, and any Subsidiary that is not a Credit Party may be merged into
any Credit Party (with the Credit Party as the surviving entity); provided that
if any such transaction shall be between a Subsidiary and the Borrower or a
Wholly Owned Subsidiary, the Borrower or such Wholly Owned Subsidiary, as
applicable, shall be the continuing or surviving corporation;

          (b) any Credit Party (other than the Borrower or any License
Subsidiary) may sell, lease, transfer or otherwise dispose of any or all of its
property (upon voluntary liquidation or otherwise) to any other Credit Party;

          (c) the capital stock of, or other equity interests in, any Credit
Party may be sold, transferred or otherwise disposed of to the Borrower or any
other Credit Party;

          (d) the Borrower may enter into Acquisitions to acquire all or
substantially all of the assets or any division, business or broadcast station
or capital stock of, or other equity interests in (including acquisitions by
merger and each of the El Dorado Acquisitions and the Guajillo Acquisitions, to
the extent such Acquisition is not consummated on the Closing Date), any Person
only located in and organized under the laws of the United States or any state
thereof (collectively, "Permitted Acquisitions"), subject to satisfaction of the
following conditions:

              (i)  the aggregate consideration paid or exchanged by the Borrower
     in connection with any such acquisition shall not exceed $50,000,000;

              (ii) both (A) immediately prior to the proposed Acquisition and
     (B) immediately following the proposed Acquisition after giving effect to
     such Acquisition on a pro forma basis incorporating such pro forma
     assumptions as are satisfactory to the

                                       99



     Administrative Agent in its reasonable discretion, the Credit Parties shall
     be in compliance with the covenants set forth in Section 7.10;

               (iii)  the business so acquired shall be in the Permitted Lines
     of Business and shall be located in the United States;

               (iv)   the assets so acquired shall be transferred free and clear
     of any Liens (except to the extent permitted by Section 7.2), and no
     Indebtedness shall be incurred, guaranteed, assumed or consolidated in
     connection with such Acquisition (except to the extent permitted by Section
     7.1);

               (v)    the Administrative Agent shall have received Lien searches
     reasonably satisfactory to the Administrative Agent with respect to the
     assets of, and equity interests in, any business being acquired;

               (vi)   the Administrative Agent shall have received a First
     Priority perfected security interest in substantially all of the assets
     being acquired in such Acquisition (including the assets of any entity
     acquired) but excluding real property not otherwise required under Section
     6.13 and all filings, recordings and other actions with respect thereto
     shall be reasonably satisfactory in form and substance to the
     Administrative Agent; provided, however, that the security interest or
     mortgage as to any real property asset which is required to be obtained
     hereunder shall be perfected within a reasonable time after the
     consummation of such Acquisition;

               (vii)  if requested, the Administrative Agent shall have received
     an opinion of counsel in each applicable jurisdiction reasonably
     satisfactory to it to the effect that the Administrative Agent has been
     granted a perfected security interest in such assets and as to such other
     matters as the Administrative Agent may reasonably require;

               (viii) in connection with such proposed Acquisition, the Borrower
     shall deliver to the Administrative Agent (i) a copy of the purchase
     agreement pursuant to which such Acquisition will be consummated, (ii)
     unless waived by the Administrative Agent in its reasonable discretion, a
     consent to the assignment of such purchase agreement to the Administrative
     Agent for collateral purposes, which consent shall be in form and substance
     satisfactory to the Administrative Agent; (iii) a copy of each material
     services agreement, consulting agreement, lease, credit or financing
     agreement or other material agreement relating to such Acquisition to be in
     effect after the consummation of such Acquisition, (iv) unless waived by
     the Administrative Agent in its reasonable discretion, an opinion of
     counsel to the sellers addressed to the Administrative Agent and the
     Lenders or permitting them to rely thereon and (v) such other information
     or reports as the Administrative Agent may reasonably request with respect
     to such Acquisition;

               (ix)   to the extent any representation or warranty herein makes
     reference to one or more of the Schedules to this Agreement, the Credit
     Parties shall make revisions to such Schedules, in each case as of the date
     of the consummation of such Acquisition and notwithstanding that such
     representation or warranty may expressly state that it is

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     made as of an earlier date, reasonably acceptable to the Administrative
     Agent, solely to take into account the consummation of such Acquisition;

               (x)    the Credit Parties shall have obtained all material
     permits, licenses, authorizations or consents from all Governmental
     Authorities (including the FCC and the United States Department of Justice)
     and all consents of other Persons, in each case that are necessary in
     connection with such proposed Acquisition, the continued operation of the
     business being acquired in such proposed Acquisition, as proposed to be
     conducted, by the Credit Parties, prior to or concurrently with the
     consummation thereof, and each of the foregoing shall be in full force and
     effect, in each case other than those the failure to obtain or maintain
     which, either individually or in the aggregate, would not reasonably be
     expected to have a Material Adverse Effect;

               (xi)   subject to the waiver by the Administrative Agent in its
     reasonable discretion, all applicable waiting periods with respect to such
     proposed Acquisition shall have expired without any action being taken or
     threatened by any competent authority which would restrain, prevent or
     otherwise impose adverse conditions on such Acquisition (including the
     Pre-Merger/Hart-Scott-Rodino Act, as amended), and no action, request for
     stay, petition for review or rehearing, reconsideration or appeal with
     respect to any of the foregoing shall be pending, and the time for any
     applicable Governmental Authority to take action to set aside its consent
     on its own motion shall have expired;

               (xii)  the Administrative Agent shall have received a certificate
     from the Credit Parties' insurance broker or other evidence satisfactory to
     it that all insurance required to be maintained pursuant to Section 6.5 is
     in full force and effect with respect to the assets being acquired in such
     Acquisition and that the Administrative Agent on behalf of the Lenders has
     been named as additional insured, mortgagee and loss payee thereunder to
     the extent required under Section 6.5;

               (xiii) immediately prior to such Acquisition and after giving
     effect thereto, no Default shall have occurred and be continuing;

               (xiv)  to the extent either or both of the El Dorado Acquisitions
     is not consummated on the Closing Date and only with respect to such
     Acquisition, since March 31, 2002, there shall have occurred no Material
     Adverse Effect (in the reasonable judgment of the Administrative Agent)
     with respect to the Credit Parties or the assets to be acquired in
     connection with the Acquisition;

               (xv)   to the extent either or both of the El Dorado Acquisitions
     is not consummated on the Closing Date and only with respect to such
     Acquisitions, the Administrative Agent shall have received a certificate,
     substantially in the form of Exhibit H, from a Financial Officer of the
     Borrower to the effect that, as of the date of such Acquisition and after
     giving effect to the Loans to fund a portion of the purchase price thereof:

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                     (A) the aggregate value of all properties of the Credit
          Parties at their present fair saleable value on a going concern basis
          (i.e., the amount that may be realized within a reasonable time,
          considered to be six months to one year, either through collection or
          sale at the regular market value, conceiving the latter as the amount
          that could be obtained for such properties within such period by a
          capable and diligent businessman from an interested buyer who is
          willing to purchase under ordinary selling conditions), exceed the
          amount of all the debts and liabilities (including contingent,
          subordinated, unmatured and unliquidated liabilities) of the Credit
          Parties;

                     (B) the Credit Parties will not, on a consolidated basis,
          have unreasonably small capital with which to conduct their business
          operations as heretofore conducted; and

                     (C) the Credit Parties will have, on a consolidated basis,
          sufficient cash flow to enable them to pay their debts as they mature;

     Such certificate shall include a statement to the effect that the financial
     projections and underlying assumptions contained in such analysis are, fair
     and reasonable in the opinion of such Financial Officer at the time when
     made; and

               (xvi) to the extent either or both of the El Dorado Acquisitions
     is not consummated on the Closing Date and only with respect to such
     Acquisition, such Acquisition shall have been consummated substantially in
     accordance with the terms of the El Dorado Acquisitions Documents except
     for any conditions set forth therein that shall have been waived with the
     consent of the Administrative Agent and the Lenders; and

          (e)  The Credit Parties shall be permitted to effect any Relocation,
provided that the following conditions have been satisfied:

               (i)   Such Voluntary Relocation shall not, as determined on the
     date of the consummation of such Voluntary Relocation, have a material
     adverse effect on the business, assets, operations or financial condition
     of the Credit Parties, taken as a whole;

               (ii)  The Credit Parties shall give 30 days' prior written notice
     to the Administrative Agent of the proposed Relocation which notice shall
     include a description of all material aspects of the Relocation including
     the consideration to be received by any Credit Party in connection
     therewith;

               (iii) Simultaneously with informing the Shop At Home Sellers
     under the Shop At Home Acquisition Documents of any Relocation Profit, the
     Credit Parties shall so inform the Administrative Agent and thereafter keep
     the Administrative Agent apprised of the negotiation thereof, and shall
     forward to the Administrative Agent copies of all material correspondence,
     including, without limitation, any "Buyer's Relocation Profit Notice" or
     "Challenge Notice" (as such terms are defined in the Shop At Home
     Acquisition Documents) and all correspondence pertaining to any
     implementation of the Valuation Mechanism (as defined in the Shop At Home
     Acquisition Documents);

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               (iv) to the extent any representation or warranty herein makes
     reference to one or more of the Schedules to this Agreement, the Credit
     Parties shall make revisions to such Schedules, in each case as of the date
     of the consummation of any Relocation and notwithstanding that such
     representation or warranty may expressly state that it is made as of an
     earlier date, reasonably acceptable to the Administrative Agent, solely to
     take into account the consummation of such Relocation; and

               (v)  In connection with any Involuntary Relocation the Credit
     Parties shall use their best efforts to receive only cash consideration
     therefor.

          (f)  The Credit Parties shall be permitted to sell any radio and
television stations in any fiscal year, provided that the aggregate EBITDA
attributable to all such stations sold in any fiscal year shall not exceed 15%
of the EBITDA of the Credit Parties for the immediately preceding fiscal year as
stated in the Compliance Certificate required to be delivered for such fiscal
year pursuant to Section 6.1(c) or, if such Compliance Certificate is not
available at the time of such proposed sale, as demonstrated through financial
statements and reports acceptable to the Administrative Agent in its reasonable
discretion.

          (g)  Intermediate Holdings may be merged with and into the Borrower on
or after the Closing Date; provided that (i) the Borrower shall be the surviving
corporation, (ii) immediately prior to such merger, Intermediate Holdings shall
have no assets except for its ownership interest in the Borrower and no
Indebtedness except Indebtedness pursuant to the Oaktree Note Purchase Documents
which will be paid in full on or before the date of such merger, (iii) such
merger does not require any consent or approval of, registration or filing with,
or any other action by, any Governmental Authority (other than the consent of
the FCC, which consent has been obtained) or any other Person except for such
consents, approvals, registrations, filings and other actions as have been
obtained on or before the date of such merger; and (iv) such merger will not
violate or result in a default under any material indenture, agreement or other
instrument binding upon any Credit Party, or any assets, or give rise to a right
thereunder to require any payment to be made by any Credit Party, where any such
violation or default or right to payment would have a Material Adverse Effect.

          (h)  Upon 30 days prior written notice to the Administrative Agent and
with the prior written consent of the Administrative Agent (such consent not to
be unreasonably withheld), the Borrower may merge with an Affiliate incorporated
solely for the purpose of reincorporating the Borrower in another jurisdiction
to realize tax or other benefits. The Administrative Agent shall give prompt
notice thereof to the Lenders.

7.5      Investments; Hedging Agreements.

          (a)  No Credit Party will make or permit to remain outstanding any
Investment, except in the case of any Credit Party:

               (i)  Investments by the Credit Parties in capital stock of, and
     other equity interests in, their Subsidiaries to the extent outstanding at
     the Effective Time and as set forth on Schedule 4.12 hereto, Investments
     consisting of deferred payment obligations in connection with permitted
     sales of assets in the aggregate not to exceed

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     $250,000 at any one time, advances by any Credit Party to any other Credit
     Party (which advances, whether existing on the Closing Date or made
     thereafter, may be cancelled or forgiven by such Credit Party) and capital
     contributions by any Credit Party to any other Credit Party;

               (ii)  Permitted Investments;

               (iii) advances, loans and extensions of credit to any director,
     officer or employee of a Credit Party or any other Person, Investments by
     the Credit Parties in connection with the satisfaction of accounts
     receivable or other Indebtedness due from a customer of a Credit Party or
     claims due and owing to the Credit Parties or otherwise for the benefit the
     business of the Credit Parties; provided that (A) the maximum aggregate
     principal amount of any Investments permitted under Section 7.5(a)(iii)
     shall not exceed $3,000,000 at any time outstanding and (B) the maximum
     aggregate principal amount of any Investments permitted under Section
     7.5(a)(iii) plus the principal amount Guaranteed under Section ---- 7.3(g)
     shall not exceed $4,000,000 at any time outstanding, and, so long as no
     Default shall have occurred and be continuing and no Default shall be
     caused thereby, the Credit Parties may forgive or cancel any such advance,
     loan or extension of credit;

               (iv)  Checking and deposit accounts used in the ordinary course
     of business maintained with the Administrative Agent or depository
     institutions who have executed Control Agreements except for (A) the escrow
     account maintained with U.S. Bank National Association in the amount not
     exceeding $50,000, (B) the deposit accounts maintained with Wells Fargo
     Bank, N.A., so long as the Borrower maintains an agreement to sweep the
     daily balances in such accounts at the end of each Business Day on which
     such daily balances exceed a specified balance, not to exceed $250,000 to
     (1) an account at Union Bank of California, N.A. described on Schedule 1 of
     the Control Agreement delivered in connection with the Existing Credit
     Agreement (the "Existing Control Agreement") or (2) an account covered by a
     new Control Agreement obtained pursuant to Section 6.15 or otherwise, and
     (C) the securities accounts and deposit accounts maintained with Union Bank
     of California, N.A., except to the extent a Control Agreement is obtained
     pursuant to Section 6.15;

               (v)   escrow deposits made pursuant to the El Dorado Acquisitions
     Documents, the Guajillo Acquisitions Documents and Permitted Acquisitions;

               (vi)  the Borrower and its Subsidiaries may continue to own the
     Investments owned by them and described in Schedule 7.5 annexed hereto and
     the Borrower may own any intercompany loans made by Intermediate Holdings
     to Holdings I prior to the Closing Date (the ownership of which will be
     transferred to the Borrower by operation of law upon the consummation of
     the Intercompany Merger) and the Borrower may forgive or cancel such loans;

               (vii) the Borrower may acquire and hold obligations of one or
     more officers or other employees of the Credit Parties in connection with
     such officers' or employees' acquisition of shares of Holdings I's common
     stock, so long as no cash is actually advanced by any Credit Party to such
     officers or employees or any Holding

                                      104



     Company in connection with the acquisition of any such obligations and, so
     long as no Default shall have occurred and be continuing and no Default
     shall be caused thereby, the Credit Parties may forgive or cancel any such
     advance, loan or extension of credit;

               (viii) the Credit Parties may accept promissory notes, debt or
     equity securities or other Investments as consideration in any Relocation,
     the aggregate amount of which received after the Closing Date shall not
     exceed $10,000,000; provided, that the Credit Parties may accept promissory
     notes, debt or equity securities or other Investments as consideration in
     an Involuntary Relocation in excess of such amount so long as the receipt
     of such excess Investments would not result in a Material Adverse Effect;

               (ix)   the Borrower may make a loan to Intermediate Holdings on
     the Closing Date in the amount of the Intermediate Holdings Intercompany
     Note and the Borrower may forgive or cancel such loan; and

               (x)    (1) for so long as Holdings I is an S Corporation or a
     substantially similar pass-through entity for federal income tax purposes
     and a QSSS Election is in effect for Intermediate Holdings (prior to the
     Intercompany Merger) and the Borrower, the Borrower may make loans to
     Intermediate Holdings, Holdings I or the shareholders of Holdings I in an
     amount (together with dividend payments made pursuant to Section 7.6(a))
     not in excess of the Permitted Holdings Tax Distributions and the Permitted
     Shareholder Tax Distributions, (2) so long as no Default shall have
     occurred and be continuing and no Default shall be caused thereby, at any
     time the Total Leverage Ratio is less than 4.5 to 1 as of the end of any
     fiscal year with respect thereto, as shown in the financial statements
     required to be delivered pursuant to Section 6.1(a) and in the Compliance
     Certificate required to be delivered in respect of such fiscal year
     pursuant to Section 6.1(c), the Borrower may make loans (together with
     dividend payments made pursuant to Section 7.6(c)) to any Holding Company
     or the shareholders of Holdings I to the extent of Excess Cash Flow for
     such fiscal year; provided that the aggregate amount of loans made pursuant
     to this clause (2) after the date hereof (together with the aggregate
     amount of dividends made pursuant to Section 7.6(c) after the date hereof,
     shall not exceed $5,000,000, (3) so long as no Default shall have occurred
     or be continuing or shall be caused thereby, the Borrower may make loans to
     any Holding Company to pay corporate administrative expenses, provided,
     that the amount of cash loans made pursuant to this clause (3), together
     with the amount of cash distributions made pursuant to Section 7.6(d),
     shall not exceed $1,000,000 in any fiscal year, and (4) so long as no
     Default shall have occurred or be continuing or shall be caused thereby,
     any Credit Party may make loans to Holdings I to enable Holdings I to make
     the payments with respect to any portion of the "Incentive Bonus" which may
     become payable pursuant to the employment agreements of Andrew Mars dated
     November 15, 1998 and Xavier Ortiz dated September 1, 1999, respectively,
     or with respect to any notes issued with respect thereto; provided that the
     aggregate amount of such loans together with the aggregate amount of
     dividends made pursuant to Section 7.6(g) shall not exceed the amount of
     such bonuses required to be paid under such employment agreements
     (including any amounts required to be paid under any such notes), and (5)
     Borrower may forgive or cancel any of the loans made pursuant to clause
     (1), (2), (3) or (4) above.

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          (b)  No Credit Party will enter into any Hedging Agreement, other than
(i) Hedging Agreements required to be entered into pursuant to Section 6.14 of
this Agreement and (ii) Hedging Agreements entered into in the ordinary course
of business to hedge or mitigate risks to which any Credit Party is exposed in
the conduct of its business or the management of its liabilities.

     7.6  Restricted Junior Payments. No Credit Party will declare or make any
Restricted Junior Payment at any time; provided, however, that (a) for so long
as Holdings I is an S Corporation or a substantially similar pass-through entity
for federal income tax purposes and a QSSS Election is in effect for
Intermediate Holdings (prior to the Intercompany Merger) and the Borrower, the
Borrower may declare and make dividend payments to Intermediate Holdings (or
after the merger of Intermediate Holdings with and into the Borrower in
accordance with Section 7.4(g), to Holdings I) in an amount (together with loans
made pursuant to Section 7.5(a)(x)(1)) not in excess of the Permitted Holdings
Tax Distributions and the Permitted Shareholder Tax Distributions; (b) so long
as no Default shall have occurred and be continuing and no Default shall be
caused thereby, the Borrower may make scheduled payments of interest on the
Senior Subordinated Notes to the extent required to be paid in cash pursuant to
the Senior Subordinated Note Indenture and any liquidated damages required to be
paid in connection with any registration rights agreement related thereto; (c)
so long as no Default shall have occurred and be continuing and no Default shall
be caused thereby, at any time the Total Leverage Ratio is less than 4.5 to 1 as
of the end of any fiscal year with respect thereto, as shown in the financial
statements required to be delivered pursuant to Section 6.1(a) and Compliance
Certificate required to be delivered in respect of such fiscal year pursuant to
Section 6.1(c), the Borrower may declare and make dividend payments (together
with loans made pursuant to Section 7.5(a)(x)(2)) to Intermediate Holdings (or
after the merger of Intermediate Holdings with and into the Borrower in
accordance with Section 7.4(g), to Holdings I or any other Holding Company, as
applicable) to the extent of Excess Cash Flow for such fiscal year, provided
that the aggregate amount paid pursuant to this clause (c) after the date hereof
(together with the aggregate amount of loans made pursuant to Section
7.5(a)(x)(2) after the date hereof) shall not exceed $5,000,000, (d) so long as
no Default shall have occurred or be continuing or shall be caused thereby the
Borrower may declare and make Restricted Junior Payments to any Holding Company
to pay corporate administrative expenses, provided that the amount of cash
distributions made pursuant to this clause (d) (together with the amount of
loans made pursuant to Section 7.5(a)(x)(3)) shall not exceed $1,000,000 in any
fiscal year, (e) the Credit Parties may pay their obligations to Empire Burbank
to the extent required to be paid under the Empire Burbank Lease, (f) so long as
no Default shall have occurred or be continuing or shall be caused thereby,
Liberman Broadcasting, Inc., or any successor entity thereto, may make the
payments described in clause (vi) of the definition of Restricted Junior Payment
or make the payments with respect to any notes issued under the employment
agreement described in such clause (vi), (g) so long as no Default shall have
occurred or be continuing or shall be caused thereby, any Credit Party may make
dividend payments to Holdings I (through another Holding Company, if
applicable), to enable Holdings I to make the payments with respect to any
portion of the "Incentive Bonus" which may become payable pursuant to the
employment agreements of Andrew Mars dated November 15, 1998 and Xavier Ortiz
dated September 1, 1999, respectively, or with respect to any notes issued with
respect thereto; provided that the aggregate amount of such dividends together
with the aggregate amount of loans made pursuant to Section 7.5(a)(x)(4) shall
not exceed the amount of such bonuses required to be paid under such

                                      106



employment agreements (including any amounts required to be paid under any such
notes), and (h) the Credit Parties may make payments on the Liberman
Subordinated Debt on the Closing Date in an amount not in excess of $1,920,000
and may make payments of interest on the Liberman Subordinated Debt to the
extent such payments of interest are permitted to be made under the Liberman
Subordination Agreements. Nothing herein shall be deemed to prohibit the making
of any dividend or distribution, or other payment constituting a Restricted
Junior Payment under clauses (ii) or (iii) of the definition thereof by any
Subsidiary to any Credit Party. Notwithstanding anything herein to the contrary,
if part or all of a Permitted Holdings Tax Distribution or a Permitted
Shareholder Tax Distribution is made in the form of a loan (rather than a
dividend or other form of distribution), then (i) the terms of such loan shall
be determined in the sole discretion of the Borrower, and (ii) the subsequent
cancellation or forgiveness of such loan shall not be treated as a Restricted
Junior Payment and shall not reduce the amount of subsequent Permitted Holdings
Tax Distributions or Permitted Shareholder Tax Distributions.

     7.7  Transactions with Affiliates. Except as expressly permitted by this
Agreement (including pursuant to any of the Sections of Articles 6 or 7), no
Credit Party will directly or indirectly (a) make any Investment in an
Affiliate; (b) transfer, sell, lease, assign or otherwise dispose of any
property to an Affiliate; (c) merge into or consolidate with an Affiliate, or
purchase or acquire property from an Affiliate; or (d) enter into any other
transaction directly or indirectly with or for the benefit of an Affiliate
(including guarantees and assumptions of obligations of an Affiliate); provided
that:

               (i)   any Affiliate who is an individual may serve as a director,
     officer, employee or consultant of any Credit Party, receive compensation
     for his or her services in such capacity and benefit from Investments to
     the extent specified in Section 7.5(a)(iii);

               (ii)  the Credit Parties may engage in and continue the
     transactions with or for the benefit of Affiliates which are described in
     Schedule 7.7, and in other similar transactions or transactions entered in
     the ordinary course of business provided that the terms of such similar
     transactions or such ordinary course transactions are not less favorable to
     the Credit Parties than the terms of a commercially reasonable, arms'
     length transaction between non-affiliated parties; provided, further that
     with respect to any such transaction involving the payment by a Credit
     Party of consideration in excess of $1,000,000, the Credit Parties shall
     provide adequate documentary and other evidence reasonably satisfactory to
     the Administrative Agent that the terms of such transaction satisfy the
     immediately preceding proviso;

               (iii) the Credit Parties may make the payments permitted by
     Sections 6.9(d) and (e); and

               (iv)  the Borrower may make an intercompany loan to Intermediate
     Holdings pursuant to the Intermediate Holdings Intercompany Note and
     Intermediate Holdings may merge with and into the Borrower in accordance
     with Section 7.4(g).

     7.8  Restrictive Agreements. No Credit Party will, directly or indirectly,
enter into, incur or permit to exist any agreement or other arrangement (other
than this Agreement, the

                                      107



Senior Subordinated Note Indenture and the documents related thereto and the
Holdings Securities Purchase Documents and the Subordination and Intercreditor
Agreement dated as of March 21, 2001 by and among Holdings I, Alta and Oaktree,
as such agreement is amended by the Holdings Amendment and as it may be further
amended, supplemented or otherwise modified from time to time in accordance with
the restrictions set forth in Section 7.15) that prohibits, restricts or imposes
any condition upon (a) the ability of any Credit Party to create, incur or
permit to exist any Lien upon any of its property or assets, or (b) the ability
of any Subsidiary to pay dividends or other distributions with respect to any
shares of its capital stock or other equity interests or to make or repay loans
or advances to any other Credit Party or to Guarantee Indebtedness of any other
Credit Party; provided that (i) the foregoing shall not apply to restrictions
and conditions imposed by law, this Agreement, the Senior Subordinated Note
Indenture and the documents related thereto, or the Holdings Securities Purchase
Documents or the Subordination and Intercreditor Agreement referred in this
Section 7.8 above, (ii) the foregoing shall not apply to restrictions and
conditions existing on the date hereof identified on Schedule 7.8 (but shall
apply to any extension or renewal of, or any amendment or modification expanding
the scope of, any such restriction or condition), (iii) the foregoing shall not
apply to customary restrictions and conditions contained in agreements relating
to the sale of a Subsidiary, its assets or other Dispositions pending such sale
or Disposition; provided such restrictions and conditions apply only to the
Subsidiary or assets that are to be sold or Disposed of, as the case may be, and
such sale or Disposition is permitted hereunder, (iv) clause (a) of the
foregoing shall not apply to restrictions or conditions imposed by any agreement
relating to secured Indebtedness permitted by this Agreement and (v) clause (a)
of the foregoing shall not apply to customary provisions in leases and other
contracts restricting the assignment thereof.

     7.9  Sale-Leaseback Transactions. No Credit Party will, directly or
indirectly, enter into any arrangements with any Person (other than another
Credit Party; provided the Administrative Agent receives prior written notice of
such transaction, copies of all documents and an opportunity to comment thereon)
whereby such Credit Party shall sell or transfer (or request another Person to
purchase) any property, real, personal or mixed, used or useful in its business,
whether now owned or hereafter acquired, and thereafter rent or lease such
property from any Person.

     7.10 Certain Financial Covenants. All of the following covenants shall be
measured at the end of each fiscal quarter of the Credit Parties, based on the
four immediately preceding fiscal quarters of the Credit Parties, except as
otherwise set forth below.

          (a) Total Leverage Ratio. The Credit Parties will not permit the Total
Leverage Ratio at the end of any fiscal quarter occurring during the periods
below to exceed the ratio set opposite such period below:

                       Period                               Ratio
                       ------                               -----

         Closing Date through June 29, 2003            Not applicable
         June 30, 2003 through June 29, 2004              7.25 to 1
         June 30, 2004 through December 30, 2004          6.75 to 1
         December 31, 2004 through June 29, 2005          6.25 to 1
         June 30, 2005 through December 30, 2005          6.00 to 1

                                      108



         December 31, 2005 through June 29, 2006          5.50 to 1
         June 30, 2006 through June 29, 2007              5.00 to 1
         June 30, 2007 and thereafter                     4.50 to 1

          (b) Senior Leverage Ratio. The Credit Parties will not permit the
Senior Leverage Ratio at the end of any fiscal quarter occurring during the
periods below to exceed the ratio set opposite such period below:

                      Period                                Ratio

         Closing Date through June 30, 2004               4.00 to 1
         July 1, 2004 and thereafter                      3.50 to 1

          (c) Interest Coverage Ratio. The Credit Parties will not permit the
Interest Coverage Ratio at the end of any fiscal quarter occurring during the
periods below to be less than the ratio set opposite such period below:

                      Period                                Ratio

         Closing Date through June 29, 2003               1.40 to 1
         June 30, 2003 through December 30, 2003          1.50 to 1
         December 31, 2003 through June 30, 2004          1.60 to 1
         July 1, 2004 through December 31, 2004           1.75 to 1
         January 1, 2005 through June 30, 2006            2.00 to 1
         July 1, 2006 and thereafter                      2.25 to 1

          (d) Capital Expenditures. The Credit Parties will not permit the
aggregate amount of Capital Expenditures in any fiscal year to exceed
$8,000,000; provided, however that (i) for each fiscal year, no more than
$2,000,000 in each fiscal year may be used for Real Estate Acquisition
Expenditures, (ii) for each fiscal year, no more than $6,000,000 may be used for
Capital Expenditures not constituting Real Estate Acquisition Expenditures, and
(iii) to the extent that actual Capital Expenditures permitted pursuant to
clause (ii) above in any fiscal year shall be less than the maximum amount
permitted by clause (ii) for such fiscal year, the excess of the maximum amount
permitted under clause (ii) over the actual Capital Expenditures shall be
available for Capital Expenditures under clause (ii) in the immediately
succeeding fiscal year but may not be carried over into any subsequent fiscal
year; provided that the sublimits set forth in clauses (i) and (ii) above shall
not apply to fiscal year 2002; and provided further that up to $1,000,000 of the
unused availability in fiscal year 2002 may be carried forward to fiscal year
2003 for Capital Expenditures not constituting Real Estate Acquisition
Expenditures. For purposes of this Section 7.10(d), Capital Expenditures made by
the reinvestment of Net Cash Payments in accordance with Section 2.10(b) shall
not be deemed Capital Expenditures.

          (e) Fixed Charge Ratio. The Credit Parties will not permit the Fixed
Charge Ratio at the end of any fiscal quarter occurring after the Closing Date
to be less than 1.10 to 1.

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     7.11 Lines of Business; Restrictions on the Borrower. No Credit Party shall
engage to any substantial extent in any line or lines of business activity other
than (i) the Permitted Lines of Business, and (ii) such other lines of business
as may be consented to by the Required Lenders and the Administrative Agent. The
Borrower shall not own any assets, other than holding the equity interests of
its Subsidiaries, cash and cash equivalents, and Investments permitted hereunder
and shall not conduct any business, other than performing managerial functions
relating the business of the Credit Parties and entering into and performing the
Basic Documents, the Basic Documents (as defined in the Existing Credit
Agreement) and other documents to which it is a party to the extent the
execution of such documents is not otherwise prohibited hereunder (excluding by
operation of this sentence) including agreements with respect to Acquisitions
permitted hereunder.

     7.12 Subordinated Indebtedness. No Credit Party will purchase, redeem,
retire or otherwise acquire for value, or set apart any money for a sinking,
defeasance or other analogous fund for the purchase, redemption, retirement or
other acquisition of, or make any payment or prepayment of the principal of or
interest on, or any other amount owing in respect of, any Subordinated
Indebtedness, except (a) to the extent permitted by the Liberman Subordination
Agreements and (b) payments in respect of the Senior Subordinated Notes and
payments of liquidated damages required to be paid in connection with any
registration rights agreement related thereto permitted by Section 7.6(b).

     7.13 Modifications of Certain Documents. No Credit Party will consent to
any modification, supplement or waiver of any of the provisions of any
agreements, instruments or documents in respect of any Subordinated
Indebtedness, the effect of which is to (i) increase principal, interest, fees,
reimbursements or other amounts payable with respect thereto or create any
additional payment obligations thereunder, (ii) accelerate any scheduled or
otherwise required payments of principal, interest, fees, reimbursements or
other amounts, (iii) cause any covenants or other agreements to be more
restrictive upon, or burdensome to the Credit Parties in any material respect,
(iv) alter any event of default provisions contained in any Subordinated
Indebtedness in a manner materially adverse to the Credit Parties, (v) modify
any of the subordination provisions thereof, (vi) designate any Indebtedness
(other than the Loans and the other obligations of the Credit Parties under the
Loan Documents) as "Designated Senior Debt" for purposes of the Senior
Subordinated Note Indenture, or (vii) make any other change which could
reasonably be expected to have a Material Adverse Effect, in each case, without
the prior consent of the Required Lenders or the Administrative Agent on their
behalf. No Credit Party will consent to any modification, supplement or waiver
of any of the provisions of any of the Clear Channel Acquisition Documents, the
Shop At Home Acquisition Documents El Dorado Acquisitions Documents or the
Guajillo Acquisitions Documents in a manner materially adverse to the Credit
Parties, without the prior consent of the Required Lenders or the Administrative
Agent on their behalf. Without limiting the generality of the foregoing except
as expressly permitted by this Agreement, no Credit Party will Guarantee any
Subordinated Indebtedness or any Holding Company Debt or any other Indebtedness
of any Holding Company without the prior consent of the Required Lenders and the
Administrative Agent.

     7.14 Empire Burbank.

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          (a) Empire Burbank shall not (i) make any optional payment or
prepayment under the Empire Burbank Loan Documents (other than a prepayment made
with the proceeds of a Permitted Refinancing), (ii) amend, modify or change, or
consent or agree to any amendment, modification or change to, the Empire Burbank
Loan Documents in a manner which materially adversely affects the Administrative
Agent or the Lenders (it being understood that no amendment or modification to
Section 10.1 (regarding the pledge of Empire Burbank stock to the Administrative
Agent, and the exercise of the Administrative Agent's rights in connection
therewith), Section 13, or Section 14.3 (regarding notice to the Administrative
Agent) thereof shall be permitted without the prior written consent of the
Administrative Agent) or (iii) amend, modify or change, or consent or agree to
any amendment, modification or change to, the Empire Burbank Lease in a manner
which materially adversely affects the Administrative Agent or the Lenders (it
being understood that no amendment or modification to the last sentence of
Section 5.2 of the Empire Burbank Lease (regarding the rights of creditors to
enter the premises to exercise rights and remedies regarding personal property
of LBI) shall be permitted without the prior written consent of the
Administrative Agent) without the prior written consent of the Administrative
Agent, which consent shall not be unreasonably withheld or delayed.

          (b) The Borrower agrees to deliver to the Administrative Agent prompt
written notice of any written declaration of default made by the lender under
the Empire Burbank Loan Documents.

          (c) Empire Burbank shall not (i) engage in any business other than the
ownership of the Burbank Office Property (and any additions to such Property),
the leasing of such Property pursuant to the Empire Burbank Lease, the
subleasing of certain portions thereof under the Empire Burbank Sublease, the
subleasing or renting to third parties of certain sound stages, production
equipment, studios and related office space included in such Property (or any
additions to such Property) for use by such third parties or Empire Burbank as
production facilities and businesses incidental thereto and guaranteeing the
obligations under the Loan Documents, obligations under the Senior Subordinated
Notes and the Senior Subordinated Note Indenture and the documents related
thereto or (ii) own any assets other than the Burbank Office Property and any
additions to such Property, its interests under the Empire Burbank Lease and the
Empire Burbank Sublease and certain production and related equipment for use by
third parties in connection with the subleasing of such sound stages and studios
and additional assets necessary or advisable for the conduct in the ordinary
course of its business described in clause (i).

     7.15 Holding Company Restrictions. Except for (a) the Holding Company Debt
incurred or to be incurred by Holdings I on or after March 20, 2001 pursuant to
the Holdings Securities Purchase Documents, (b) intercompany Indebtedness
incurred by any Holding Company and owing to Intermediate Holdings (and after
the Intercompany Merger, such Indebtedness and other intercompany Indebtedness
incurred by any Holding Company to the Borrower or any other Credit Party or any
other Holding Company) and (c) the Indebtedness which may be required to be
incurred by the Holding Company under the employment agreements described in
Section 5.1(i) to the extent that payments under the phantom stock incentive
provisions of such agreements are not permitted by this Agreement or any other
document to be made in cash, the Holding Companies shall not create incur,
assume or permit to exist any Indebtedness which requires the payment in cash of
any principal or interest in respect

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thereof prior to March 31, 2010 without the prior written consent of the
Required Lenders. No Holding Company will purchase, redeem, retire or otherwise
acquire for value, or set apart any money for a sinking, defeasance or other
analogous fund for the purchase, redemption, retirement or other acquisition of,
or make any payment or prepayment of the principal of, or interest on, or any
other amount owing in respect of, the Holdings Securities Purchase Documents,
except, subject to the provisions of the Alta Subordination Agreement, to the
extent required by the Holdings Securities Purchase Documents. No Holding
Company will consent to any modification, supplement or waiver of any of the
provisions of the Holdings Securities Purchase Documents, the effect of which is
to (i) increase principal, interest, fees, reimbursements or other amounts
payable with respect thereto or create any additional payment obligations
thereunder, (ii) accelerate any scheduled or otherwise required payments of
principal, interest, fees, reimbursements or other amounts, (iii) cause any
covenants or other agreements to be more restrictive upon, or burdensome to,
such Holding Company, in any respect materially adverse to the Credit Parties,
(iv) alter any event of default provisions contained in the Holdings Securities
Purchase Documents in any material respect, or (v) make any other change which
could reasonably be expected to have a Material Adversely Effect, in each case,
without the prior written consent of the Required Lenders or the Administrative
Agent on their behalf except that (A) Holdings I may enter into and perform its
obligations under the Holdings Amendment and (B) in accordance with the Holdings
Amendment, may, on the Closing Date, exchange (x) the notes outstanding under
the Holdings Securities Purchase Documents for new notes, in the form attached
to the Holdings Amendment, and (y) the warrants issued pursuant to the Holdings
Securities Purchase Documents for new warrants, in the form attached to the
Holdings Amendment. Intermediate Holdings shall not conduct any business or own
any assets other than holding all of the equity interests issued by the
Borrower, cash and cash equivalents, any loans to Holdings I or any Credit
Party, performing managerial functions relating to the businesses of the Credit
Parties and entering into and performing its obligations under the Oaktree Note
Purchase Documents, the Oaktree Redemption Agreement and the Basic Documents to
which it is a party except that Intermediate Holdings may enter and perform the
Intermediate Holdings Intercompany Note, the documents relating to the
Intercompany Merger and may merge with and into the Borrower in accordance with
the provisions of Section 7.4(g). Holdings I shall not conduct any business or
own any assets other than holding all of the equity interests issued by
Intermediate Holdings, or, after the Intercompany Merger, all of the equity
interests issued by the Borrower (or, if a new Holding Company is created after
the Closing Date, all of the equity interests of such Holding Company), cash and
cash equivalents, performing managerial functions relating to the businesses of
the Credit Parties and entering into and performing its obligations under the
Holdings Securities Purchase Documents, the other Basic Documents to which it is
a party, the key employee agreements to which it is a party (and service
agreements with any Credit Party relating to such employment agreements), the
intercreditor and subordination agreement referred to in the last sentence of
this Section 7.15, making distributions or loans to its shareholders with the
proceeds of Permitted Shareholder Tax Distributions or Permitted Holdings Tax
Distributions, and forgiving or canceling any such loans or any other loans to
its Affiliates. Intermediate Holdings (or after the merger of Intermediate
Holdings with and into the Borrower in accordance with Section 7.4(g), Holdings
I) shall not pledge, encumber or hypothecate any of the capital stock of the
Borrower. Holdings I will not consent to any modification, supplement or waiver
of any of the provisions of the Intercreditor and Subordination Agreement dated
as of March 20, 2001 among Holdings I, Alta and Oaktree,

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except pursuant to the Holdings Amendment, without the prior written consent of
the Administrative Agent in its sole discretion.

     7.16 License Subsidiaries.

          (a) Other than ancillary FCC Licenses owned by Empire Burbank (none of
which are Material FCC Licenses), the Credit Parties will cause each FCC License
which is owned or acquired by any Credit Party to be held in a License
Subsidiary at all times (and provided that any FCC License relating to a
Broadcast Station located outside the Designated Market Areas of those Broadcast
Stations owned on the Closing Date, and acquired after the date hereof shall, at
the reasonable request of the Required Lenders, be held in a separate License
Subsidiary).

          (b) The Credit Parties shall not allow any License Subsidiary to (i)
own any right, franchise or other asset except for FCC Licenses transferred to
it by a Credit Party and FCC Licenses acquired by it directly or (ii) engage in
any business or make any Investment other than holding such FCC Licenses.

          (c) Notwithstanding the foregoing, no License Subsidiary shall be
permitted, under any circumstances, to create, incur, assume or suffer to exist:

              (i)   any Indebtedness, other than Indebtedness to the Credit
     Parties or under the Loan Documents and the Indebtedness as a guarantor
     under the Senior Subordinated Note Indenture;

              (ii)  any Lien, other than Liens created under the Loan Documents;
     and

              (iii) any Guarantee, other than the Guarantee of the Loans and the
     Guarantee of the Senior Subordinated Note Indenture and the Senior
     Subordinated Notes.

                                    ARTICLE 8

                                Events of Default

     8.1 Events of Default.

     If any of the following events ("Events of Default") shall occur:

          (a) the Credit Parties shall fail to pay to the Administrative Agent
or the Lenders (i) any principal of any Loan on the due date thereof, (ii) any
interest on, any Loan or any Reimbursement Obligation in respect of any LC
Disbursement, within three Business Days after the same shall become due and
payable, whether at the due date thereof or at a date fixed for prepayment
thereof or otherwise, or (iii) any other amount payable under this Agreement or
any fee payable under this Agreement or any other agreement, within five
Business Days after the same shall become due and payable, whether at the due
date thereof or at a date fixed for prepayment thereof, by acceleration of such
due or prepayment date, or otherwise;

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          (b) any representation or warranty made or deemed made by or on behalf
of any Credit Party or Empire Burbank in or in connection with this Agreement or
any amendment or modification hereof or of any Loan Document, or in any report,
certificate, financial statement or other document furnished pursuant to or in
connection with this Agreement or any amendment or modification hereof or of any
Loan Document, shall prove to have been incorrect when made or deemed made in
any material respect;

          (c) (i) any Credit Party shall fail to observe or perform any
covenant, condition or agreement contained in Sections 6.2, 6.3, 6.7, 6.8, 6.9,
6.10, 6.14 or in Article 7, (ii) any Holding Company shall fail to observe or
perform any covenant, condition or agreement contained in Section 7.15, or (iii)
any Credit Party shall fail to observe or perform any other covenant, condition
or agreement contained in Article 6 and such failure described in this clause
(iii) shall continue unremedied for a period of 30 days after the earlier of (x)
actual knowledge by a Financial Officer of any Credit Party or (y) notice
thereof from the Administrative Agent (given at the request of any Lender) to
the Borrower;

          (d) (i) any Credit Party shall fail to observe or perform any
covenant, condition or agreement contained in this Agreement (other than those
specified in clauses (a), (b) or (c) of this Article) or any other Loan Document
or (ii) Empire Burbank shall fail to observe or perform any covenant, condition
or agreement contained in Section 7.14, and such failure described in clause (i)
or (ii) shall continue unremedied for a period of 30 days after notice thereof
from the Administrative Agent (given at the request of any Lender) to the
Borrower;

          (e) any Credit Party shall fail to make any payment (whether of
principal or interest and regardless of amount) in respect of any Material
Indebtedness (other than obligations under the Loan Documents) of any Credit
Party, when and as the same shall become due and payable, after giving effect to
any grace period with respect thereto;

          (f) any event or condition occurs that results in any Material
Indebtedness of any Credit Party becoming due prior to its scheduled maturity or
that enables or permits (with or without the giving of notice, the lapse of time
or both) the holder or holders of any such Material Indebtedness or any trustee
or agent on its or their behalf to cause any such Material Indebtedness to
become due, or to require the prepayment, repurchase, redemption or defeasance
thereof, prior to its scheduled maturity except for prepayments, repurchases,
redemptions or defeasances of secured Material Indebtedness of any Credit Party
resulting from the voluntary sale or transfer of property securing such
Indebtedness;

          (g) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other relief
in respect of any Credit Party or Holding Company or its debts, or of a
substantial part of its assets, under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for any Credit Party or Holding Company or for a substantial
part of its assets, and, in any such case, such proceeding or petition shall
continue undismissed for 60 days or an order or decree approving or ordering any
of the foregoing shall be entered;

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          (h) any Credit Party or Holding Company shall (i) voluntarily commence
any proceeding or file any petition seeking liquidation, reorganization or other
relief under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (ii) consent to the institution of,
or fail to contest in a timely and appropriate manner, any proceeding or
petition described in clause (g) of this Article, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for any Credit Party or Holding Company or for a substantial
part of its assets, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general assignment
for the benefit of creditors or (vi) take any action for the purpose of
effecting any of the foregoing; provided that none of the foregoing events of
this clause (h) shall be deemed to have occurred as a result of the consummation
of the Intercompany Merger;

          (i) any Credit Party or Holding Company shall become unable, admit in
writing or fail generally to pay its debts as they become due;

          (j) a final judgment or judgments for the payment of money in excess
of $3,500,000 in the aggregate (exclusive of judgment amounts fully covered by
insurance where the insurer has admitted liability in respect of such judgment)
shall be rendered by one or more courts, administrative tribunals or other
bodies having jurisdiction against any Credit Party and the same shall not be
vacated or discharged (or provision shall not be made for such discharge), or a
stay of execution thereof shall not be procured, within 60 days from the date of
entry thereof and the relevant Credit Party shall not, within said period of 60
days, or such longer period during which execution of the same shall have been
stayed, appeal therefrom and cause the execution thereof to be stayed during
such appeal;

          (k) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in a Material Adverse Effect;

          (l) there shall have been asserted against any Credit Party claims or
liabilities, whether accrued, absolute or contingent, based on or arising from
the generation, storage, transport, handling or disposal of Hazardous Materials
by any Credit Party or any of its Affiliates, or any predecessor in interest of
any Credit Party or any of its Affiliates, or relating to any site or facility
owned, operated or leased by any Credit Party or any of its Subsidiaries or
Affiliates, which claims or liabilities (insofar as they are payable by any
Credit Party but after deducting any portion thereof which is reasonably
expected to be paid by other credit worthy Persons jointly and severally liable
therefor), in the judgment of the Required Lenders are reasonably likely to be
determined adversely to any Credit Party, and the amount thereof is, singly or
in the aggregate, reasonably likely to have a Material Adverse Effect;

          (m) any Change of Control shall have occurred;

          (n) Lenard Liberman (1) dies or (2) shall no longer be an officer of
any Credit Party and shall not be providing any oversight role or services (in a
capacity such as, but not limited to, chairman or vice chairman of the board of
directors) and a successor of comparable experience and abilities (or a
successor otherwise having reasonable qualifications and abilities in the
broadcast industry) shall not have been engaged within 180 days of such death or
such

                                      115



cessation; provided that in the event Lenard Liberman is unable to serve as and
perform the duties as an officer of any Credit Party due to physical or mental
illness, the date of such cessation for purposes of this clause (n) shall
commence only after such inability exists for 170 days (including a period of 75
consecutive days) in any 12 consecutive month period;

          (o) any of the following shall occur: (i) the Liens created by the
Collateral Documents shall at any time (other than by reason of the
Administrative Agent relinquishing such Lien) cease in any material respect to
constitute valid and perfected Liens on the Collateral intended to be covered
thereby; (ii) except for expiration in accordance with its respective terms, any
Collateral Document shall for whatever reason be terminated, or shall cease to
be in full force and effect; or (iii) the enforceability of any Collateral
Document shall be contested in writing by any Credit Party;

          (p) any Credit Party or Empire Burbank shall assert in writing that
its obligations hereunder or under the Collateral Documents shall be invalid or
unenforceable;

          (q) any Holding Company shall fail to observe or perform any covenant,
condition or agreement in respect of any Holding Company Debt that results in
such Holding Company Debt becoming due prior to its scheduled maturity or that
enables or permits (with or without the giving of notice, the lapse of time or
both) the holder or holders of any Holding Company Debt or any trustee or agent
on its or their behalf to cause any Holding Company Debt to become due, or to
require the prepayment, repurchase, redemption or defeasance thereof, prior to
its scheduled maturity except for prepayments, repurchases, redemptions or
defeasances resulting from the voluntary sale or transfer of property securing
such Holding Company Debt to the extent permitted hereunder;

          (r) Jose or Lenard Liberman shall default in the observance or
performance of their respective obligations under the Liberman Subordination
Agreements (if any) and such default shall continue unremedied for a period of
30 days after the earlier of (x) actual knowledge by a Financial Officer of any
Credit Party or (y) notice thereof from the Administrative Agent (given at the
request of any Lender) to the Borrower;

          (s) other than as a result of a sale or other Disposition permitted
hereunder or from the conversion of any Broadcast Station to digital television
or in connection with any Relocation, except any such conversion or Relocation
which causes a Material Adverse Effect, any Credit Party shall lose, fail to
keep in force, suffer the termination, suspension or revocation of, or
terminate, forfeit or suffer an adverse amendment to, any Material FCC
License(s) held by any Credit Party which contribute(s) in the aggregate in
excess of 5% of the EBITDA of the Credit Parties for the immediately preceding
fiscal year as stated in the Compliance Certificate required to be delivered for
such fiscal year pursuant to Section 6.1(c) or, if such Compliance Certificate
is not available at the time of such loss, termination, suspension or
revocation, as demonstrated through financial statements and reports acceptable
to the Administrative Agent in its reasonable discretion; or

          (t) any Credit Party shall permit its on-the-air broadcast operations
to be interrupted at any time for more than seven days, whether or not
consecutive, during any period of ten consecutive days, if such interruption is
likely to have a Material Adverse Effect unless

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(and only so long as), substantially all damages, liabilities and other effects
of such interruption of service (including any adverse effect on the Credit
Parties' ability to perform its obligations under this Agreement) are fully
covered by business interruption insurance;

then, and in every such event (other than an event described in clause (g) or
(h) of this Section 8.1), and at any time thereafter during the continuance of
such event, the Administrative Agent may, and at the request of the Required
Lenders shall, by notice to the Credit Parties, take either or both of the
following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, (ii)
declare the Loans then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Credit Parties accrued hereunder, shall become
due and payable immediately, without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Credit Parties, and
(iii) the Administrative Agent may exercise all of the rights hereunder or under
the Collateral Documents or applicable law, including the rights as secured
party and mortgagee under the Collateral Documents; and in case of any event
described in clause (g) or (h) of this Section 8.1, the Commitments shall
automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the
Credit Parties accrued hereunder, shall automatically become due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Credit Parties, and the Administrative Agent shall be
permitted to exercise such rights hereunder or under the Collateral Documents or
applicable law, including the rights as secured party and mortgagee under the
Collateral Documents to the extent permitted by applicable law.

                                    ARTICLE 9

                            The Administrative Agent

     9.1 Appointment and Authorization. Each of the Lenders and the Issuing
Lender hereby irrevocably appoints the Administrative Agent as its agent and
authorizes the Administrative Agent to take such actions on its behalf and to
exercise such powers as are delegated to the Administrative Agent by the terms
of this Agreement and the other Loan Documents, together with such actions and
powers as are reasonably incidental thereto.

     9.2 Administrative Agent's Rights as Lender. The Lender or other financial
institution serving as the Administrative Agent or the Issuing Lender hereunder
shall have the same rights and powers in its capacity as a Lender hereunder as
any other Lender and may exercise the same as though it were not the
Administrative Agent or the Issuing Lender, and such institution and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of business with any Credit Party or any Subsidiary or other Affiliate of
any thereof as if it were not the Administrative Agent or the Issuing Lender
hereunder.

     9.3 Duties As Expressly Stated. Neither the Administrative Agent nor the
Issuing Lender shall have any duties or obligations except those expressly set
forth in this Agreement and the other Loan Documents. Without limiting the
generality of the foregoing, (a) neither the

                                      1117



Administrative Agent nor the Issuing Lender shall be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing, (b) neither the Administrative Agent nor the Issuing Lender shall
have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated by this
Agreement and the other Loan Documents that the Administrative Agent or Issuing
Lender is required to exercise in writing by the Required Lenders (or such other
number or percentage of the Lenders as is required hereunder with respect to
such action), and (c) except as expressly set forth herein and in the other Loan
Documents, neither the Administrative Agent nor the Issuing Lender shall have
any duty to disclose, or shall be liable for the failure to disclose, any
information relating to any Credit Party or any of their respective Subsidiaries
that is communicated to or obtained by the financial institution serving as the
Administrative Agent or the Issuing Lender or any of its Affiliates or Approved
Funds in any capacity. Neither the Administrative Agent nor the Issuing Lender
shall be liable for any action taken or not taken by it with the consent or at
the request of the Required Lenders (or such other number or percentage of the
Lenders as is required hereunder with respect to such action) or all of the
Lenders if expressly required, or in the absence of its own gross negligence or
willful misconduct. Neither the Administrative Agent nor the Issuing Lender
shall be deemed to have knowledge of any Default unless and until written notice
thereof is given to the Administrative Agent or the Issuing Lender by the
Borrower or a Lender, and the Administrative Agent shall not be responsible for
or have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in, or in connection with, this Agreement or the other Loan
Documents, (ii) the contents of any certificate, report or other document
delivered hereunder or under any of the other Loan Documents or in connection
herewith of therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein or in any
other Loan Document, (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement, the other Loan Documents or any other agreement,
instrument or document, or (v) the satisfaction of any condition set forth in
Article 5 or elsewhere herein, other than to confirm receipt of items expressly
required to be delivered to the Administrative Agent or the Issuing Lender.
Neither the Administrative Agent nor the Issuing Lender shall, except to the
extent the Administrative Agent expressly instructed by the Required Lenders
with respect to collateral security under the Collateral Documents, be required
to initiate or conduct any litigation or collection proceedings hereunder or
under any other Loan Document; provided, however, that the Administrative Agent
shall not be required to take any action which exposes the Administrative Agent
to personal liability or which is contrary to the Loan Documents or applicable
law.

     9.4 Reliance By Administrative Agent. The Administrative Agent and the
Issuing Lender shall be entitled to rely upon, and shall not incur any liability
for relying upon, any notice, request, certificate, consent, statement,
instrument, document or other writing believed by it to be genuine and to have
been signed or sent by the proper Person. The Administrative Agent and the
Issuing Lender also may rely upon any statement made to it orally or by
telephone and believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon. The Administrative Agent and the
Issuing Lender may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts. The Administrative Agent and
the Issuing Lender shall be fully justified in failing or refusing to take any
action under this Agreement or any other Credit Document unless it shall first
receive such advice or concurrence of the Required Lenders (or, if

                                      118



so specified by this Agreement, all Lenders) as it deems appropriate or it shall
first be indemnified to its satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action (it being understood that this provision
shall not release the Administrative Agent from performing any action with
respect to the Borrower expressly required to be performed by it pursuant to the
terms hereof) under this Agreement. The Administrative Agent and the Issuing
Lender shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement and the other Loan Documents in accordance with a
request of the Required Lenders (or, if so specified by this Agreement, all
Lenders), and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the
Loans.

     9.5 Action Through Sub-Agents. The Administrative Agent and the Issuing
Lender may perform any and all of its duties, and exercise its rights and
powers, by or through any one or more sub-agents appointed by the Administrative
Agent or the Issuing Lender. The Administrative Agent and the Issuing Lender and
any such sub-agent may perform any and all its duties and exercise its rights
and powers through its Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and the Issuing Lender and any such
sub-agent, and shall apply to its activities in connection with the syndication
of the credit facilities provided for herein as well as activities of the
Administrative Agent or the Issuing Lender.

     9.6 Resignation of Administrative Agent and Appointment of Successor
Administrative Agent. Subject to the appointment and acceptance of a successor
Administrative Agent, as provided in this paragraph, the Administrative Agent
may resign at any time upon 30 days' notice to the Lenders, the Issuing Lender
and the Borrower. Upon any such resignation, the Required Lenders shall have the
right, with the prior written consent of the Borrower (which shall not be
unreasonably withheld or delayed), to appoint a successor Administrative Agent.
If no successor shall have been so appointed and shall have accepted such
appointment within 30 days after such retiring Administrative Agent gives notice
of its resignation, then such retiring Administrative Agent may, on behalf of
the Lenders and the Issuing Lender, appoint a successor Administrative Agent,
which shall be a bank with an office in Boston, Massachusetts, Los Angeles,
California or New York, New York, or an Affiliate of any such bank. Upon the
acceptance of its appointment as Administrative Agent hereunder, by a successor,
such successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the other Loan Documents. The fees payable by the Borrower
to a successor Administrative Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrower and such successor.
After an Administrative Agent's resignation hereunder, the provisions of this
Article and Section 10.3 shall continue in effect for the benefit of such
retiring Administrative Agent, its sub-agents and their respective Related
Parties in respect of any actions taken or omitted to be taken by any of them
while it was acting as Administrative Agent.

     9.7 Lenders' Independent Decisions. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent, the Issuing
Lender or any other Lender and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also

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acknowledges that it will, independently and without reliance upon the
Administrative Agent, the Issuing Lender or any other Lender and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
upon this Agreement and the other Loan Documents, any related agreement or any
document furnished hereunder or thereunder. Except as explicitly provided
herein, neither the Administrative Agent nor the Issuing Lender has any duty or
responsibility, either initially or on a continuing basis, to provide any Lender
with any credit or other information with respect to such operations, business,
property, condition or creditworthiness, whether such information comes into its
possession on or before the first Event of Default or at any time thereafter.
Neither the Administrative Agent nor the Issuing Lender shall be deemed a
trustee or other fiduciary on behalf of any party.

     9.8  Indemnification. Each Lender agrees to indemnify and hold harmless
each of the Agents, the Sole Lead Arranger and the Issuing Lender (to the extent
not reimbursed under Section 10.3, but without limiting the obligations of the
Borrower under Section 10.3), ratably in accordance with the aggregate principal
amount of the respective Commitments of and/or Loans and LC Exposure held by the
Lenders (or, if all of the Commitments shall have been terminated or expired,
ratably in accordance with the aggregate outstanding amount of the Loans and LC
Exposure held by the Lenders), for any and all liabilities (including pursuant
to any Environmental Law), obligations, losses, damages, penalties, actions,
judgments, deficiencies, suits, costs, expenses (including reasonable attorney's
fees) or disbursements of any kind and nature whatsoever that may be imposed on,
incurred by or asserted against any of the Agents, the Sole Lead Arranger or the
Issuing Lender (including by any Lender) arising out of or by reason of any
investigation in or in any way relating to or arising out of any Loan Document
or any other documents contemplated by or referred to therein for any action
taken or omitted to be taken by any Agent, the Sole Lead Arranger or the Issuing
Lender under or in respect of any of the Loan Documents or other such documents
or the transactions contemplated thereby (including the costs and expenses that
the Borrower is obligated to pay under Section 10.3, but excluding, unless a
Default has occurred and is continuing, normal administrative costs and expenses
incident to the performance of its agency duties hereunder) or the enforcement
of any of the terms hereof or thereof or of any such other documents; provided,
however, that no Lender shall be liable for any of the foregoing to the extent
they are determined by a court of competent jurisdiction in a final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of the party to be indemnified. The agreements set forth in this
Section 9.8 shall survive the payment of all Loans and other obligations
hereunder and shall be in addition to and not in lieu of any other
indemnification agreements contained in any other Loan Document.

     9.9  Consents Under Other Loan Documents. Except as otherwise provided in
this Agreement and the other Loan Documents, the Administrative Agent may, with
the prior consent of the Required Lenders (but not otherwise), consent to any
modification, supplement or waiver under any of the other Loan Documents.

     9.10 The Agents. None of the Co-Syndication Agents nor the Co-Documentation
Agents shall have any duties or obligations under this Agreement or the other
Loan Documents, express or implied. None of the Co-Syndication Agents nor the
Co-Documentation Agents shall incur any personal liability by reason of being
named the Co-Syndication Agents or Co-Documentation Agents hereunder.

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                                   ARTICLE 10

                                  Miscellaneous

     10.1 Notices. Except in the case of notices and other communications
expressly permitted to be given by telephone, all notices and other
communications provided for herein shall be in writing and shall be delivered by
hand or overnight courier service, mailed by certified or registered mail or
sent by telephonic facsimile (fax), as follows:

          (a) if to any Credit Party, to LBI Media, Inc., 1813 Victory Place,
Burbank, CA 91504, Attention: Executive Vice President (fax no. (818) 558-4244),
with copies to: O'Melveny & Myers LLP, 400 South Hope Street, Los Angeles, CA
90071, Attention: Joseph K. Kim (fax no. (213) 430-6407).

          (b) if to the Administrative Agent, to Fleet National Bank, 1185
Avenue of the Americas, 16/th/ Floor, Media & Entertainment Group, Mail Stop
NYEH 30916K, New York, New York 10036-2600, Attention: Garret Komjathy (fax no.
(212) 819-6202), with a copy to Palmer & Dodge LLP, 111 Huntington Avenue,
Boston, Massachusetts 02199, Attention: George Ticknor (fax no. (617) 227-4420);

          (c) if to any Lender (including to Fleet in its capacity as the
Issuing Lender), to it at its address (or fax number) set forth in its
Administrative Questionnaire.

Any party hereto may change its address or fax number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.

     10.2 Waivers; Amendments.

          (a) No failure or delay by the Administrative Agent, the Issuing
Lender or any Lender in exercising any right or power hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Administrative Agent, the
Issuing Lender and the Lenders hereunder are cumulative and are not exclusive of
any rights or remedies that they would otherwise have. No waiver of any
provision of this Agreement or consent to any departure by any Credit Party or
Subsidiary therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section 10.2, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent, any Lender or the
Issuing Lender may have had notice or knowledge of such Default at the time.

          (b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except to the
extent this Agreement or any other Loan Document provides for revisions to the
schedules hereto or thereto with the

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approval of the Administrative Agent or pursuant to an agreement or agreements
in writing entered into by the Borrower and the Required Lenders or by the
Borrower and the Administrative Agent with the written consent of the Required
Lenders and the Administrative Agent; provided that no such agreement shall:

               (i)   increase the Commitment of any Lender without the written
     consent of such Lender and the Administrative Agent, except that the
     consent of the Administrative Agent shall not be required with respect to
     any Revolving Credit Commitment Increase;

               (ii)  reduce the principal amount of any Loan or LC Disbursement
     or reduce the rate of interest thereon, or reduce any fees payable
     hereunder, without the written consent of each Lender affected thereby;

               (iii) postpone the scheduled date of payment of the principal
     amount of any Loan or LC Disbursement other than mandatory prepayments of
     the Loans required under Section 2.10(b), or any interest thereon, or any
     fees payable hereunder, or reduce the amount of, waive or excuse any such
     payment, change the maturity date of any Loan, or postpone the scheduled
     date of expiration of any Commitment, or postpone the ultimate expiration
     date of any Letter of Credit beyond the Revolving Credit Maturity Date,
     without the written consent of each Lender affected thereby;

               (iv)  change Section 2.10(c) in a manner that would alter the
     application of prepayments thereunder, or change Section 2.17(b) or (c) in
     a manner that would alter the pro rata sharing of payments required
     thereby, without in each case the written consent of each Lender;

               (v)   change any of the provisions of this Section 10.2 or the
     definition of "Required Lenders" or any other provision hereof specifying
     the number or percentage of Lenders required to waive, amend or modify any
     rights hereunder or under any other Loan Document or make any determination
     or grant any consent hereunder or thereunder, without the written consent
     of each Lender;

               (vi)  release any of the Guarantors from its obligations in
     respect of its Guarantee under Article 3 or release all or substantially
     all of the Collateral (or terminate any Lien with respect thereto), except
     as expressly permitted in the Loan Documents, without the written consent
     of each Lender; or

               (vii) waive any of the conditions precedent specified in Section
     5.1 without the consent of each Lender and the Administrative Agent;

provided further that no such agreement shall amend, modify or otherwise affect
the rights or duties of any Agent or the Issuing Lender hereunder without the
prior written consent of such Agent or the Issuing Lender, as the case may be.

          (c)  None of the Collateral Documents nor any provision thereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered

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into by the Credit Parties party thereto, and by the Administrative Agent with
the written consent of the Required Lenders.

     10.3 Expenses; Indemnity; Damage Waiver.

          (a) The Credit Parties jointly and severally agree to pay, or
reimburse the Administrative Agent, the Sole Lead Arranger or the Lenders, as
applicable, for paying, (i) all reasonable out-of-pocket expenses incurred by
the Administrative Agent, the Sole Lead Arranger and their Affiliates, including
the reasonable fees, charges and disbursements of Special Counsel, any FCC
counsel or local counsel, in connection with the syndication of the credit
facilities provided for herein, the preparation of this Agreement and the other
Loan Documents or any amendments, modifications or waivers of the provisions
hereof or thereof (whether or not the transactions contemplated hereby or
thereby shall be consummated), (ii) all reasonable out-of-pocket expenses
incurred by the Issuing Lender in connection with the issuance, amendment,
renewal or extension of any Letter of Credit or any demand for payment
thereunder, (iii) all out-of-pocket expenses incurred by the Administrative
Agent, the Issuing Lender, the Sole Lead Arranger or any Lender, including the
reasonable fees, charges and disbursements of any counsel for the Administrative
Agent, the Issuing Lender, the Sole Lead Arranger or any Lender, in connection
with the enforcement or protection of its rights in connection with this
Agreement and the other Loan Documents, including its rights under this Section
10.3, or in connection with the Loans made or Letters of Credit issued
hereunder, including in connection with any workout, restructuring or
negotiations in respect thereof, and (iv) all Other Taxes levied by any
Governmental Authority in respect of this Agreement or any of the other Loan
Documents or any other document referred to herein or therein and all costs,
expenses, taxes, assessments and other charges incurred in connection with any
filing, registration, recording or perfection of any security interest
contemplated by any Collateral Document or any other document referred to
therein.

          (b) The Credit Parties jointly and severally agree to indemnify the
Agents, the Sole Lead Arranger, the Issuing Lender and each Lender, and each
Related Party of any of the foregoing Persons (each such Person being called an
"Indemnitee") against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including the fees,
charges and disbursements of any counsel for any Indemnitee and settlement
costs, incurred by or asserted against any Indemnitee arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement, the other Loan Documents or any agreement or instrument contemplated
hereby, the performance or failure to perform by the parties hereto and thereto
of their respective obligations hereunder or thereunder or the consummation of
the Transactions or any other transactions contemplated hereby or thereby, (ii)
any Loan or Letter of Credit or the use of the proceeds therefrom (including any
refusal by the Issuing Lender to honor a demand for payment under a Letter of
Credit if the documents presented in connection with such demand do not strictly
comply with the terms of such Letter of Credit), (iii) any actual or alleged
presence or release of Hazardous Materials on or from any property owned or
operated by any Credit Party or any of their Subsidiaries, or any Environmental
Liability related in any way to any Credit Party or any of their Subsidiaries,
or (iv) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory and regardless of whether any Indemnitee is a party thereto; provided
that such indemnity shall not, as to any Indemnitee, be

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available to the extent that such losses, claims, damages, liabilities or
related expenses (are determined by a court of competent jurisdiction by final
and nonappealable judgment to have) resulted from the gross negligence or
willful misconduct of such Indemnitee.

          (c) To the extent that the Credit Parties fail to pay any amount
required to be paid by them to the Administrative Agent under paragraph (a) or
(b) of this Section 10.3, each Lender severally agrees to pay to the
Administrative Agent such Lender's Applicable Percentage (determined as of the
time that the applicable unreimbursed expense or indemnity payment is sought) of
such unpaid amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Administrative Agent in its capacity as such. To the
extent that the Credit Parties fail to pay any amount required to be paid by
them to the Sole Lead Arranger under paragraph (a) or (b) of this Section 10.3,
each Lender severally agrees to pay to the Sole Lead Arranger such Lender's
Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Sole Lead Arranger in its capacity as such. To the extent that the
Credit Parties fail to pay any amount required to be paid by them to the Issuing
Lender under paragraph (a) or (b) of this Section 10.3, each Revolving Credit
Lender severally agrees to pay to the Issuing Lender such Lender's Applicable
Percentage (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount; provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the Issuing
Lender in its capacity as such.

          (d) To the extent permitted by applicable law, none of the Credit
Parties shall assert, and each Credit Party hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement, the other Loan Documents or
any agreement or instrument contemplated hereby or thereby, the Transactions,
any Loan or Letter of Credit or the use of the proceeds thereof.

          (e) All amounts due under this Section 10.3 shall be payable promptly
after written demand therefor.

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     10.4 Successors and Assigns.

          (a) The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that no Credit Party may assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender and the Administrative Agent (and any attempted assignment or
transfer by any Credit Party without such consent shall be null and void).
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective successors and
assigns permitted hereby and, to the extent expressly contemplated hereby, the
Related Parties of the Administrative Agent, the Issuing Lender and the Lenders)
any legal or equitable right, remedy or claim under or by reason of this
Agreement.

          (b) Any Lender may assign to one or more assignees all or a portion of
its rights and obligations under this Agreement (including all or a portion of
its Commitment and the Loans at the time owing to it) and may assign Revolving
Credit Commitment and Revolving Credit Loans; provided that:

              (i)   except in the case of an assignment to a Lender or an
     Affiliate of a Lender or an Approved Fund of a Lender, the Borrower and the
     Administrative Agent (and, in the case of an assignment of all or a portion
     of a Revolving Credit Commitment or any Lender's obligations in respect of
     its LC Exposure, the Issuing Lender) each must give its prior written
     consent to such assignment (which consent shall not be unreasonably
     withheld, delayed or conditioned),

              (ii)  except in the case of an assignment to a Lender or an
     Affiliate of a Lender or Approved Fund of a Lender or an assignment of the
     entire remaining amount of the assigning Lender's Loans or Commitment, the
     amount of the Loans or Commitment of the assigning Lender subject to each
     such assignment (determined as of the date the Assignment and Acceptance
     with respect to such assignment is delivered to the Administrative Agent)
     shall not be less than the lesser of $5,000,000 or the entire Commitment of
     such assigning Lender, unless the Borrower and the Administrative Agent
     otherwise consent;

              (iii) the parties to each assignment (other than an assignment to
     a Lender or its Affiliate or Approved Fund) shall execute and deliver to
     the Administrative Agent an Assignment and Acceptance, together with a
     processing and recordation fee of $3,000, and

              (iv)  the assignee shall be an Eligible Assignee and shall deliver
     to the Administrative Agent an Administrative Questionnaire;

provided further that any consent of the Borrower otherwise required under this
paragraph shall not be required (i) if an Event of Default has occurred and is
continuing, (ii) in the event of an assignment to an existing Lender, or (iii)
in the event of an assignment by General Electric Capital Corporation following
a determination by such Lender or its affiliate, the National Broadcasting
Company ("NBC"), that continued ownership of rights or obligations hereunder

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would (A) violate FCC rules pertinent to attributable ownership or (B) cause NBC
to forgo investments or acquisition opportunities in any of the markets in which
the Borrower then operates, then, in each case, such Lender shall consult with
the Borrower and the Administrative Agent regarding proposed assignees and use
reasonable efforts to cause such assignment to an assignee reasonably acceptable
to the Borrower and the Administrative Agent.

Notwithstanding the foregoing, the restrictions of this Section 10.4(b)(ii)
shall not apply until the date on which the primary syndication of the
Commitments has been completed.

          (c) Upon acceptance and recording pursuant to paragraph (e) of this
Section 10.4, from and after the effective date specified in each Assignment and
Acceptance, the assignee thereunder shall be a party hereto and, to the extent
of the interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all of the assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections 2.14,
2.15, 2.16 and 10.3 with respect to matters described therein occurring or
accruing prior to the effective date of any such Assignment and Acceptance).
Notwithstanding anything therein to the contrary, no Approved Fund shall be
entitled to receive any greater amount pursuant to Sections 2.14, 2.15 and 2.16
than the transferor Lender would have been entitled to receive in respect of the
assignment effected by such transferor Lender had no assignment occurred. Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with paragraph (b) of this Section 10.4 shall be treated
for purposes of this Agreement as a sale by such Lender of a participation in
such rights and obligations in accordance with paragraph (f) of this Section.

          (d) The Administrative Agent, acting for this purpose as an agent of
the Borrower, shall maintain at one of its offices in Boston, Massachusetts a
copy of each Assignment and Acceptance and Lender Joinder Agreement delivered to
it and a register for the recordation of the names and addresses of the Lenders,
and the Commitment of, and principal amount of the Loans and LC Disbursements
owing to, each Lender pursuant to the terms hereof from time to time (the
"Register"). The entries in the Register shall be conclusive (absent manifest
error), and the Borrower, the Administrative Agent, the Issuing Lender and the
Lenders may treat each Person whose name is recorded in the Register pursuant to
the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary (absent manifest error). The Register
shall be available for inspection by the Borrower, the Issuing Lender and any
Lender or the Administrative Agent, at any reasonable time and from time to time
upon reasonable prior notice.

          (e) (i) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section 10.4 and any written consent to such assignment required by
paragraph (b) of this Section 10.4, the Administrative Agent shall accept such
Assignment and Acceptance and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Agreement unless
it has been recorded in

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the Register as provided in this paragraph, and (ii) upon its receipt of a duly
completed Lender Joinder Agreement executed by a New Lender and Administrative
Agent in accordance with Section 2.1(b), and the New Lender's completed
Administrative Questionnaire, the Administrative Agent shall accept such Lender
Joinder Agreement and record the information contained therein in the Register.

          (f) Any Lender may, without the consent of or notice to the Borrower,
the Administrative Agent or the Issuing Lender, sell participations to one or
more banks or other entities (a "Participant") in all or a portion of such
Lender's rights and obligations under this Agreement (including all or a portion
of its Commitment and the Loans owing to it); provided that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Borrower, the Administrative Agent, the Issuing
Lender and the other Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver described in the first proviso to
Section 10.2(b), or Section 10.2(c), that affects such Participant. Subject to
paragraph (g) of this Section 10.4, the Borrower agrees that each Participant
shall be entitled to the benefits of Sections 2.14. 2.15 and 2.16 to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to paragraph (b) of this Section 10.4.

          (g) A Participant shall not be entitled to receive any greater payment
under Section 2.14 or 2.16 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrower's
prior written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 2.16 unless the Borrower
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 2.16(e) as
though it were a Lender.

          (h) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including any such pledge or assignment to a Federal Reserve Bank;
provided that no such pledge or assignment of a security interest shall release
a Lender from any of its obligations hereunder or substitute any such assignee
for such Lender as a party hereto.

          (i) Anything in this Section 10.4 to the contrary notwithstanding, no
Lender may assign or participate any interest in any Loan held by it hereunder
to any Credit Party or any of its Affiliates or Subsidiaries without the prior
consent of each Lender and the Administrative Agent.

          (j) A Lender may furnish any information concerning any Credit Party,
Holding Company or Subsidiary in the possession of such Lender from time to time
to assignees and participants (including prospective assignees and participants)
subject, however, to and so long as the recipient agrees in writing to be bound
by, the provisions of Section 10.13. In

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addition, the Administrative Agent may furnish any information concerning any
Credit Party or any of its Subsidiaries or Affiliates in the Administrative
Agent's possession to any Affiliate of the Administrative Agent, subject,
however, to the provisions of Section 10.13. The Credit Parties shall assist any
Lender in effectuating any assignment or participation pursuant to this Section
10.4 (including during syndication) in whatever manner such Lender reasonably
deems necessary, including participation in meetings with prospective
transferees.

          (k) Each Lender listed on the signature pages hereof hereby agrees (i)
that it is an Eligible Assignee described in the definition thereof. Each Lender
that becomes a party hereto pursuant to an Assignment and Acceptance shall be
deemed to agree that the agreements of such Lender contained in Section 3 of
such Assignment and Acceptance are incorporated herein by this reference.

     10.5 Survival. All covenants, agreements, representations and warranties
made by the Credit Parties and Subsidiaries herein and in the other Loan
Documents, and in the certificates or other instruments delivered in connection
with or pursuant to this Agreement and the other Loan Documents, shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the other Loan
Documents and the making of any Loans and issuance of any Letters of Credit,
regardless of any investigation made by any such other party or on its behalf
and notwithstanding that the Administrative Agent, the Issuing Lender or any
Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect so long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement or the other Loan Documents is outstanding and unpaid or any Letter of
Credit is outstanding and so long as the Commitments have not expired or
terminated. The provisions of Sections 2.14, 2.15, 2.16 and 10.3 and Article 9
shall survive and remain in full force and effect regardless of the consummation
of the transactions contemplated hereby, the repayment of the Loans, the
expiration or termination of the Letters of Credit and the Commitments or the
termination of this Agreement or any other Loan Document or any provision hereof
or thereof.

     10.6 Counterparts; Integration; References to Agreement; Effectiveness.
This Agreement may be executed in counterparts (and by different parties hereto
on different counterparts), each of which shall constitute an original, but all
of which when taken together shall constitute a single contract. This Agreement
and any separate letter agreements with respect to fees payable to the
Administrative Agent or its counsel and to certain other lenders constitute the
entire contract among the parties relating to the subject matter hereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof. Whenever there is a reference in any
Collateral Document or UCC Financing Statement to the "Credit Agreement" to
which the Administrative Agent, the Lenders and the Credit Parties are parties,
such reference shall be deemed to be made to this Agreement among the parties
hereto. Except as provided in Section 5.1, this Agreement shall become effective
when it shall have been executed by the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof which, when taken
together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an

                                      128



executed counterpart of a signature page of this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement.

     10.7 Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.

     10.8 Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender is hereby authorized at any time and from time to time,
to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender to or for the
credit or the account of the Borrower against any of and all the obligations of
the Borrower now or hereafter existing under this Agreement held by such Lender,
irrespective of whether or not such Lender shall have made any demand under this
Agreement and although such obligations may be unmatured. The rights of each
Lender under this Section 10.8 are in addition to any other rights and remedies
(including other rights of setoff) that such Lender may have.

     10.9 Governing Law; Jurisdiction; Consent to Service of Process.

          (a) This Agreement and all issues arising with respect hereto,
including the validity or enforceability of any agreement contained herein and
the issue of usury with respect to the transactions contemplated hereby, shall
be construed in accordance with and governed by the law, other than the conflict
of law rules, of The Commonwealth of Massachusetts.

          (b) Each party hereto hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of the courts of
The Commonwealth of Massachusetts and of the United States District Court for
the District of Massachusetts, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Agreement or the other
Loan Documents, or for recognition or enforcement of any judgment, and each of
the parties hereto hereby irrevocably and unconditionally agrees that all claims
in respect of any such action or proceeding may be heard and determined in such
Massachusetts court (or, to the extent permitted by law, in such Federal court).
Each of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that the Administrative Agent, the Issuing
Lender or any Lender may otherwise have to bring any action or proceeding
relating to this Agreement against any Credit Party or Subsidiary or its
properties in the courts of any jurisdiction.

          (c) Each party hereto hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection which
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the other Loan
Documents in any court referred to in paragraph (b) of this Section 10.9. Each
of the parties hereto hereby irrevocably waives, to the fullest extent

                                      129



permitted by law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.

          (d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 10.1. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.

     10.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.10.

     10.11 Headings. Article and Section headings and the Table of Contents used
herein are for convenience of reference only, are not part of this Agreement and
shall not affect the construction of, or be taken into consideration in
interpreting, this Agreement.

     10.12 Release of Collateral and Guarantees. The Administrative Agent and
the Lenders agree that if all of the capital stock of or other equity interests
in, or any assets of, any Subsidiary that is owned by the Credit Parties is sold
to any Person as permitted by the terms of this Agreement and the Collateral
Documents, or if any Subsidiary is merged or consolidated with or into any other
Person as permitted by the terms of this Agreement and such Subsidiary is not
the continuing or surviving corporation, the Administrative Agent shall, upon
request of the Borrower (and upon the receipt by the Administrative Agent of
such evidence as the Administrative Agent or any Lender may reasonably request
to establish that such sale, designation, merger or consolidation is permitted
by the terms of this Agreement), terminate the Guarantee of such Subsidiary
under Article 3 and authorize the Administrative Agent to release the Lien
created by the Collateral Documents on any capital stock of or other equity
interests in such Subsidiary and on any assets of such Subsidiary.

     10.13 Confidentiality. Each Lender agrees to keep confidential information
obtained by it pursuant hereto and the other Loan Documents confidential in
accordance with such Lender's customary practices and agrees that it will only
use such information in connection with the transactions contemplated by this
Agreement and not disclose any of such information other than (a) to such
Lender's employees, representatives, directors, attorneys, auditors, agents,
professional advisors, trustees or Affiliates who are advised of the
confidential nature of such information or to any direct or indirect contractual
counter party in swap agreements or such contractual counter party's
professional advisor (so long as such contractual counterparty or professional
advisor to such contractual counter party agrees to be bound by the provisions
of this Section 10.13), (b) to the extent such information presently is or
hereafter becomes available

                                      130



to such Lender on a non-confidential basis from any source of such information
that is in the public domain at the time of disclosure (so long as such
information does not become publicly available as a result of a breach of this
Section 10.13), (c) to the extent disclosure is required by law (including
applicable securities law), regulation, subpoena or judicial order or process
(provided that notice of such requirement or order shall be promptly furnished
to the Borrower unless such notice is legally prohibited) or requested or
required by bank, securities, insurance or investment company regulators or
auditors or any administrative body or commission (including the Securities
Valuation Office of the National Association of Insurance Commissioners) to
whose jurisdiction such Lender may be subject, (d) to any rating agency to the
extent required in connection with any rating to be assigned to such Lender, (e)
to assignees or participants or prospective assignees or participants who agree
to be bound by the provisions of this Section 10.13, (f) to the extent required
in connection with any litigation between any Credit Party and any Lender with
respect to the Loans or this Agreement and the other Loan Documents or (g) with
the Borrower's prior written consent.

     10.14 Continued Effectiveness; No Novation. Notwithstanding anything
contained herein, the terms of this Agreement are not intended to and do not
serve to effect a novation of the obligations, liabilities or indebtedness of
the Credit Parties under the Existing Credit Agreement. Instead, it is the
express intention of the parties hereto to reaffirm, amend and restate the
obligations, liabilities and indebtedness created under or otherwise evidenced
by the Existing Credit Agreement that is evidenced by the notes provided for
therein and secured by the collateral contemplated thereby and hereby. The
Credit Parties acknowledge and confirm that the liens and security interests
granted pursuant to the Loan Documents secure the obligations, liabilities and
indebtedness of the Credit Parties to the Lenders under the Existing Credit
Agreement, as amended and restated hereby, and that the term "Secured
Obligations" used in certain of the Loan Documents (or any other term used
herein to describe or refer to the obligations, liabilities and indebtedness of
the Credit Parties) describes and refers to the Credit Parties' obligations,
liabilities and indebtedness hereunder and under the Existing Credit Agreement,
as amended and restated hereby, as the same may be further amended, modified,
supplemented or restated from time to time. The Loan Documents and all
agreements, documents and instruments executed and delivered in connection with
any of the foregoing shall each be deemed to be amended to the extent necessary
to give effect to the provisions of this Agreement. Cross-references in the Loan
Documents to particular section or subsection numbers in the Existing Credit
Agreement shall be deemed to be cross-references to the corresponding sections
or subsections, as applicable, of this Agreement.

                                       131



         IN WITNESS WHEREOF, the parties hereto have caused this Credit
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.

                                    BORROWER
                                    --------

                                    LBI MEDIA, INC., (formerly known as LBI
                                    Holdings II, Inc.)
                                    a California corporation

                                    By: /s/ Lenard Liberman
                                       ------------------------------------
                                         Name:  Lenard Liberman
                                         Title: Executive Vice President


                                   GUARANTORS
                                   ----------

                                   LIBERMAN TELEVISION OF HOUSTON, INC., a
                                   California corporation

                                   By: /s/ Lenard Liberman
                                      -------------------------------------
                                         Name:  Lenard Liberman
                                         Title: Executive Vice President



                                       KZJL LICENSE CORP.,
                                       a California corporation

                                       By: /s/ Lenard Liberman
                                          --------------------------------------
                                              Name:  Lenard Liberman
                                              Title: Executive Vice President

                                       LIBERMAN TELEVISION, INC.,
                                       a California corporation

                                       By: /s/ Lenard Liberman
                                          --------------------------------------
                                              Name:  Lenard Liberman
                                              Title: Executive Vice President

                                       KRCA TELEVISION, INC.,
                                       a California corporation

                                       By: /s/ Lenard Liberman
                                          --------------------------------------
                                              Name:  Lenard Liberman
                                              Title: Executive Vice President

                                       KRCA LICENSE CORP.,
                                       a California corporation

                                       By: /s/ Lenard Liberman
                                          --------------------------------------
                                              Name:  Lenard Liberman
                                              Title: Executive Vice President



                                       LIBERMAN BROADCASTING, INC.,
                                       a California corporation

                                       By: /s/ Lenard Liberman
                                          --------------------------------------
                                              Name:  Lenard Liberman
                                              Title: Executive Vice President

                                       LBI RADIO LICENSE CORP.,
                                       a California corporation

                                       By: /s/ Lenard Liberman
                                          --------------------------------------
                                              Name:  Lenard Liberman
                                              Title: Executive Vice President


                                       LIBERMAN BROADCASTING OF HOUSTON, INC.,
                                       a California corporation

                                       By: /s/ Lenard Liberman
                                          --------------------------------------
                                              Name:  Lenard Liberman
                                              Title: Executive Vice President


                                       LIBERMAN BROADCASTING OF HOUSTON LICENSE
                                       CORP., a California corporation

                                       By: /s/ Lenard Liberman
                                          --------------------------------------
                                              Name:  Lenard Liberman
                                              Title: Executive Vice President



                                       EMPIRE BURBANK STUDIOS, INC.,
                                       a California Corporation

                                       By: /s/ Lenard Liberman
                                          --------------------------------------
                                              Name:  Lenard Liberman
                                              Title: Executive Vice President


                                       HOLDING COMPANIES
                                       -----------------

                                       Solely with respect to provisions of
                                       ------------------------------------
                                       Section 7.15:
                                       ------------

                                       LBI HOLDINGS I, INC. ,
                                       a California corporation

                                       By: /s/ Lenard Liberman
                                          --------------------------------------
                                              Name:  Lenard Liberman
                                              Title: Executive Vice President


                                       LBI INTERMEDIATE HOLDINGS, INC. ,
                                       a California corporation

                                       By: /s/ Lenard Liberman
                                          --------------------------------------
                                              Name:  Lenard Liberman
                                              Title: Executive Vice President



                                       ADMINISTRATIVE AGENT

                                       FLEET NATIONAL BANK,
                                       as Administrative Agent and Lender

                                       By: /s/ Stephen J. Healey
                                          --------------------------------------
                                              Name:  Stephen J. Healey
                                              Title: Managing Director


                                       SOLE LEAD ARRANGER
                                       ------------------

                                       FLEET SECURITIES, INC.,
                                       as Sole Lead Arranger

                                       By: /s/ Jonathan Mullen
                                          --------------------------------------
                                              Name:  Jonathan Mullen
                                              Title: Vice President



                                          CO-SYNDICATION AGENTS

                                          GENERAL ELECTRIC CAPITAL CORPORATION,
                                          as Co-Syndication Agent and Lender

                                          By: /s/ K.M. Gacevich
                                             -----------------------------------
                                                Name:  Kenneth M. Gacevich
                                                Title: Duly Authorized Signatory



                                             U.S. BANK, N.A.,
                                             as Co-Syndication Agent and Lender

                                             By: /s/ Jaycee Earll
                                                --------------------------------
                                                 Name:  Jaycee Earll
                                                 Title: Assistant Vice President



                                            CO-DOCUMENTATION AGENTS
                                            -----------------------

                                            CIT LENDING SERVICES CORPORATION,
                                            as Co-Documentation Agent and Lender

                                            By: /s/ Rosemary Abee
                                               ---------------------------------
                                                  Name:  Rosemary Abee
                                                  Title: Vice President



                                            SUNTRUST BANK,
                                            as Co-Documentation Agent and Lender

                                            By: /s/ Thomas C. King, Jr.
                                               ---------------------------------
                                                  Name:  Thomas C. King, Jr.
                                                  Title: Vice President



                              LENDERS

                              CREDIT SUISSE FIRST BOSTON, CAYMAN ISLANDS BRANCH

                              By: /s/ Paul J. Corona            /s/ Bill O'Daly
                                 ----------------------------------------------
                                  Name:  Paul J. Corona             Bill O'Daly
                                  Title: Director                   Director



                                    CIBC INC.

                                    By: /s/ Keith Labbate
                                        -----------------------
                                        Name:  Keith Labbate
                                        Title: Executive Director
                                               CIBC World Markets Corp. As Agent



                                              UBS AG, STAMFORD BRANCH

                                              By: /s/ Wilfred V. Saint
                                                 -------------------------------
                                                    Name:  Wilfred V. Saint
                                                    Title: Associate Director
                                                           Banking Products
                                                           Services, US


                                              By: /s/ Luke Goldsworthy
                                                 -------------------------------
                                                    Name:  Luke Goldsworthy
                                                    Title: Associate Director
                                                           Banking Products
                                                           Services, US



                                              CITY NATIONAL BANK

                                              By: /s/ Aaron C. Cohen
                                                 ------------------------------
                                                    Name:  Aaron C. Cohen
                                                    Title: Vice President

EX-10.2

                                                                    Exhibit 10.2


                            ASSET PURCHASE AGREEMENT

                                      Among

                         EL DORADO COMMUNICATIONS, INC.

                               EL DORADO 108, INC.

                               KXTJ LICENSE, INC.

                              LBI HOLDINGS II, INC.

                     LIBERMAN BROADCASTING OF HOUSTON, INC.

                                       and

                 LIBERMAN BROADCASTING OF HOUSTON LICENSE CORP.

                       RELATING TO THE ACQUISITION OF KQQK



                            Dated as of April 5, 2002



                               TABLE OF CONTENTS



                                                                            Page
                                                                         
ARTICLE I  DEFINITIONS.......................................................  2

     1.1   Definitions.......................................................  2

     1.2    Knowledge........................................................  7

ARTICLE II  PURCHASE AND SALE OF ASSETS......................................  7

     2.1    Assets to be Conveyed............................................  7

     2.2    Excluded Assets and Liabilities..................................  8

ARTICLE III PURCHASE PRICE; METHOD OF PAYMENT; ESCROW DEPOSIT................  9

     3.1    Purchase Price...................................................  9

     3.2    Liabilities Assumed.............................................. 11

     3.3    Escrow Deposit................................................... 11

     3.4    Buyer's Remedies................................................. 13

     3.5    Allocation....................................................... 14

     3.6    Prorations....................................................... 14

ARTICLE IV  REPRESENTATIONS AND WARRANTIES BY SELLER......................... 14

     4.1    Organization and Standing........................................ 14

     4.2    Authorization.................................................... 14

     4.3    KQQK FCC Licenses, Transmitters and Towers....................... 15

     4.4    Purchased Assets................................................. 17

     4.5    Insurance........................................................ 17

     4.6    Litigation....................................................... 17

     4.7    Contracts........................................................ 18

     4.8    Insolvency....................................................... 18

     4.9    Reports.......................................................... 18

     4.10   No Defaults...................................................... 18

     4.11   Disclosures...................................................... 19

     4.12   Environmental Compliance......................................... 19

     4.13   Intellectual Property............................................ 19

     4.14   Brokers.......................................................... 20

     4.15   Prepaid Expenses................................................. 20

     4.16   Sale Proceeds Recipients; Recipient Agreement.................... 20


                                       -i-


                               TABLE OF CONTENTS
                                  (continued)



                                                                              Page
                                                                           
ARTICLE V   REPRESENTATIONS AND WARRANTIES BY BUYER AND LBI HOLDINGS.......... 21

     5.1    Status............................................................ 21

     5.2    No Defaults....................................................... 21

     5.3    Authorization..................................................... 21

     5.4    Brokers........................................................... 21

     5.5    Qualification as a Broadcast Licensee............................. 22

     5.6    Litigation........................................................ 22

     5.7    Approvals and Consents............................................ 22

ARTICLE VI  COVENANTS OF SELLER............................................... 22

     6.1    Affirmative Covenants of Seller................................... 22

     6.2    Negative Covenants of Seller...................................... 25

ARTICLE VII ADDITIONAL AGREEMENTS............................................. 26

     7.1    Determination of KQQK Closing Date................................ 26

     7.2    Application for Commission Consent; Other Consents; Pre-Closing... 26

     7.3    Mutual Right to Terminate......................................... 27

     7.4    Buyer's Right to Terminate........................................ 28

     7.5    Seller's Right to Terminate....................................... 28

     7.6    Risk of Loss...................................................... 29

     7.7    Transfer Taxes and FCC Filings; Expenses; Bulk Sales.............. 30

     7.8    Invoices.......................................................... 31

     7.9    Access to Microwave Facilities.................................... 31

     7.10   Recipient Agreement............................................... 31

ARTICLE VIII CLOSING CONDITIONS............................................... 31

     8.1    Conditions Precedent to Buyer's Obligations....................... 31

     8.2    Conditions Precedent to Seller's Obligations...................... 33

ARTICLE IX  ITEMS TO BE DELIVERED AT THE CLOSING.............................. 34

     9.1    Seller's Performance At Closing................................... 34

     9.2    Buyer's Performance at Closing.................................... 36

ARTICLE X   INDEMNIFICATION................................................... 37


                                      -ii-


                               TABLE OF CONTENTS
                                  (continued)



                                                                            Page
                                                                         
     10.1   Indemnification by Seller........................................ 37

     10.2   Indemnification by LBI Holdings and Buyer........................ 38

     10.3   Third-Party Claims............................................... 38

     10.4   Cap and Basket................................................... 39

     10.5   Holdback......................................................... 40

     10.6   Survival of Representations and Warranties....................... 40

ARTICLE XI  MISCELLANEOUS PROVISIONS......................................... 40

     11.1   Notices.......................................................... 40

     11.2   Benefit and Assignment........................................... 42

     11.3   Other Documents.................................................. 42

     11.4   Appendices....................................................... 42

     11.5   Construction..................................................... 42

     11.6   Arbitration...................................................... 42

     11.7   Counterparts..................................................... 44

     11.8   Headings......................................................... 44

     11.9   Entire Agreement................................................. 44


                                     -iii-



SCHEDULE I     Identification of Contracts to be Assumed

SCHEDULE II    List of all Permits and KQQK FCC Licenses

SCHEDULE III   List of Required Consents; Encumbrances; UCC Financing
               Statements; UCC Termination Statements

SCHEDULE IV    Identification of Items of Tangible Personal Property Described
               in Section 2.1.1

SCHEDULE V     Allocation of the Purchase Price

SCHEDULE VI    Insurance Coverage on the Purchased Assets

SCHEDULE VII   Identification of Intellectual Property

SCHEDULE VIII  Schedule of Prepaid Expenses

SCHEDULE IX    Sale Proceeds Recipients

SCHEDULE X     Information to be Periodically Provided to Buyer


EXHIBIT A      Seller Escrow Payment Certificate (FM Only)

EXHIBIT B-1    Opinion of Sellers' Counsel

EXHIBIT B-2    Opinion of Sellers' Texas Counsel

EXHIBIT C      Opinion of Sellers' FCC Counsel

EXHIBIT D      Opinion of LBI Entities' Counsel

EXHIBIT E      Lessor Estoppel Certificates

EXHIBIT F      FM Local Marketing Agreement

EXHIBIT G      Holdback Escrow Agreement

EXHIBIT H      Forms of Required Consents

EXHIBIT I      Recipient Agreement

EXHIBIT J      Confidentiality




                           FM ASSET PURCHASE AGREEMENT

             THIS FM ASSET PURCHASE AGREEMENT is dated as of April 5, 2002, and
made and entered into by and among El Dorado Communications, Inc., a California
corporation ("EDC"), El Dorado 108, Inc., a Texas corporation ("EDC Sub") and
KXTJ License, Inc., a Delaware corporation ("EDC License Sub"), on the one hand,
and LBI Holdings II, Inc., a California corporation ("LBI Holdings"), Liberman
Broadcasting of Houston, Inc., a California corporation ("LBI"), and Liberman
Broadcasting of Houston License Corp., a California corporation ("LBI Sub"), on
the other. EDC, EDC Sub and EDC License Sub are referred to collectively as
"Seller," and LBI and LBI Sub are referred to collectively as "Buyer."

                              W I T N E S S E T H:

             WHEREAS, Seller owns certain assets used or held for use in
connection with the operation of radio station KQQK, 107.9 FM, Beaumont, Texas
("Station KQQK") and Seller owns, or has the rights to own and as of the KEYH
Closing Date will own, certain assets used or held for use in connection with
the operation of radio station KEYH, 850 AM, Houston, Texas ("Station KEYH")
(each a "Station" and, collectively, the "Stations") and Seller desires to sell
and assign to Buyer the Stations, the businesses of the Stations and their
related assets, and the licenses, permits and other authorizations issued by the
Federal Communications Commission (the "FCC" or "Commission") for or in
connection with the operation of Station KQQK (the "KQQK FCC Licenses") and for
or in connection with the operation of Station KEYH (the "KEYH FCC Licenses";
the KQQK FCC Licenses and the KEYH FCC Licenses are collectively referred to
herein as the "FCC Licenses"); and

             WHEREAS, Seller has a right to purchase Station KEYH from Artlite
Broadcasting Company, a Texas corporation ("Artlite") pursuant to the Extension
of LMA and Purchase Rights Agreement effective as of January 31, 1997 by and
between EDC and Artlite (the "KEYH Extension Agreement"), the Agreement to
Purchase Radio Assets and Enter Into Local Marketing Agreement dated July 23,
1995 by and between EDC and Artlite (the "KEYH Purchase Agreement"), the
Agreement Regarding Deposit by and among Artlite, EDC and David Best (the "KEYH
Deposit Agreement") and Agreement to Extend Due Date for Deposit dated August 5,
1996 by and among Artlite, EDC and David Best (the "KEYH Deposit Extension
Agreement") and currently has the right to operate Station KEYH under the Time
Brokerage (Local Marketing) Agreement dated as of August 1, 1995 by and between
EDC and Artlite, as extended until January 31, 2004 pursuant to the KEYH
Extension Agreement (the "KEYH Local Marketing Agreement"); and

             WHEREAS, Seller has exercised such right to purchase Station KEYH
from Artlite pursuant to Section 7.1 of the AM Asset Purchase Agreement so as to
be able to sell and assign to Buyer Station KEYH and Seller shall prior to the
KEYH Closing Date use its efforts as set forth in the AM Asset Purchase
Agreement to preserve and cause Artlite to preserve the business of the Station
KEYH; and

             WHEREAS, LBI Sub desires to acquire the FCC Licenses and LBI
desires to acquire from Seller all the other assets relating to the Stations and
businesses related thereto; and



             WHEREAS, the FCC Licenses may not be assigned to LBI Sub without
the prior written consent of the Commission; and

             WHEREAS, Buyer, Seller and LBI Holdings are concurrently entering
into the AM Asset Purchase Agreement of even date herewith (as amended,
supplemented or otherwise modified from time to time, the "AM Asset Purchase
Agreement"); and

             WHEREAS, Buyer and Seller wish to consummate the transactions
contemplated hereby and the transactions contemplated by the AM Asset Purchase
Agreement concurrently for an aggregate purchase price (prior to adjustments) of
$30,000,001 but are, under certain circumstances, willing to consummate the
transactions contemplated hereby first and thereafter seek to consummate the
transactions contemplated by the AM Asset Purchase Agreement, in each case in
accordance with the terms of this Agreement and the AM Asset Purchase Agreement.

             NOW, THEREFORE, in consideration of the mutual promises and
covenants herein contained, the Parties, intending to be legally bound, agree as
follows:

                                    ARTICLE I
                                   DEFINITIONS

             1.1   Definitions. Unless otherwise stated in this Agreement, the
following terms shall have the following meanings:

             "Agreement" means this Asset Purchase Agreement, and references to
             "Articles," "Sections," "Schedules" and "Exhibits" are to the
             Articles and Sections of this Agreement and to the Schedules and
             Exhibits attached hereto.

             "AM Asset Purchase Agreement" has the meaning set forth in the
             recitals to this Agreement, and references to "Articles,"
             "Sections," "Schedules" and "Exhibits" thereto are to the Articles
             and Sections of the AM Asset Purchase Agreement and to the
             Schedules and Exhibits attached thereto.

             "AM Local Marketing Agreement" has the meaning set forth in the AM
             Asset Purchase Agreement.

             "Artlite" has the meaning set forth in the recitals to this
             Agreement.

             "Assumed Contracts" means only (i) those Contracts listed on
             Schedule I, (ii) any other Contract which LBI specifically agrees
             in writing to assume in connection with this Agreement in its sole
             discretion, and (iii) those Contracts entered into by Seller in the
             ordinary course of business between the date hereof and the KQQK
             Closing Date which LBI specifically agrees in writing to assume in
             connection with this Agreement in its sole discretion.

             "Buyer" has the meaning set forth in the first paragraph of this
             Agreement.

                                        2



             "Closing Place" means the offices of O'Melveny & Myers LLP, 400
             South Hope Street, 15th Floor, Los Angeles, California 90071, or
             such other place mutually agreed to in writing by the Parties.

             "Commission" has the meaning set forth in the recitals hereto.

             "Communications Act" means the Communications Act of 1934, as
             amended, or any successor statute or statutes thereto, and all
             rules, regulations, published policies and published decisions of
             the FCC thereunder, in each case as from time to time in effect.

             "Contracts" means any agreement, written or oral, between Seller
             and any third party related to Station KQQK that creates a right or
             obligation for either side to make payment or provide goods or
             services or otherwise grants rights or creates obligations,
             including but not limited to advertising contracts and sales
             orders.

             "Damages" means any and all claims, demands, liabilities,
             obligations, actions suits, proceedings, losses, damages, costs,
             expenses, assessments, judgments, recoveries and deficiencies,
             including interest, penalties and reasonable attorneys' fees, of
             every kind and description, contingent or otherwise.

             "EDC," "EDC License Sub" and "EDC Sub" have the meanings specified
             in the first paragraph of this Agreement.

             "Effective Date" shall have the meaning assigned to such term in
             the FM Local Marketing Agreement.

             "Encumbrance" means any option, pledge, security interest, lien,
             charge, mortgage, claim, debt, liability, obligation, encumbrance
             or restriction (whether on voting, sale, transfer or disposition),
             whether imposed by agreement, understanding, law, rule or
             regulation, and, with respect to real property assets, including
             the Transmitter Buildings and Towers, means any leases, licenses or
             other occupancy agreements relating thereto or covering any portion
             thereof or any liens or encumbrances existing with respect to
             Seller's interest under such documents.

             "Escrow Agent" means Union Bank of California, N.A.

             "Escrow Agreement" means the Corporate Custodial Agreement Relating
             to Earnest Money to be executed by the Escrow Agent, LBI Holdings
             and EDC concurrently with the Recipient Agreement.

             "Escrow Deposit" has the meaning set forth in Section 3.3.

             "Excluded Assets" has the meaning set forth in Section 2.2.1.

             "FCC" has the meaning set forth in the recitals hereto.

                                        3



             "FCC Licenses" has the meaning set forth in the recitals hereto.

             "FM Local Marketing Agreement" means the agreement by and between
             Seller and Buyer entered into concurrently with this Agreement
             attached as Exhibit F.

             "FM Only Closing" means the consummation of the purchase and sale
             transaction contemplated by this Agreement on the KQQK Closing Date
             without the simultaneous consummation of the purchase and sale
             transaction contemplated by the AM Asset Purchase Agreement.

             "Hazardous Substance" has the meaning set forth in Section 4.12.

             "Holdback" has the meaning set forth in Section 3.1.1.

             "Holdback Escrow Agent" shall mean Bank of America, JP Morgan
             Chase, Citibank or Bank of New York, provided such financial
             institution accepts the Holdback Escrow Agreement in the form
             attached hereto, with such changes as mutually agreed to by Buyer
             or Seller, or, if none of the listed entities so accepts, Union
             Bank of California, N.A.

             "Holdback Escrow Agreement" means the Corporate Custodial Agreement
             Relating to Holdback dated on or about the KQQK Closing Date
             executed by the Holdback Escrow Agent, LBI Holdings and EDC
             substantially in the form of Exhibit G attached hereto.

             "HSRA" means the Hart-Scott-Rodino Antitrust Improvement Act of
             1976, as amended, and the regulations thereunder, as in effect from
             time to time.

             "Indemnified Party" and "Indemnifying Party" have the meanings
             specified in Section 10.3.

             "Initial Grant" means the Commission's written consent to the
             assignment of the KQQK FCC Licenses to LBI Sub pursuant to the KQQK
             Assignment Application (including without limitation, by the Media
             Bureau by delegated authority), without any conditions materially
             adverse to any Party.

             "Intellectual Property" has the meaning set forth in Section
             4.13.1.

             "KEYH Assignment Application" has the meaning set forth in the AM
             Asset Purchase Agreement.

             "KEYH Closing Date" has the meaning set forth in the AM Asset
             Purchase Agreement.

             "KEYH Deposit Agreement" has the meaning set forth in the recitals
             to this Agreement.

                                        4



             "KEYH Deposit Extension Agreement" has the meaning set forth in the
             recitals to this Agreement.

             "KEYH Extension Agreement" has the meaning set forth in the
             recitals to this Agreement.

             "KEYH FCC Licenses" has the meaning set forth in the recitals to
             this Agreement.

             "KEYH Final Grant Day" has the meaning set forth in the AM Asset
             Purchase Agreement.

             "KEYH Local Marketing Agreement" has the meaning set forth in the
             recitals to this Agreement.

             "KEYH Purchase Agreement" has the meaning set forth in the recitals
             to this Agreement.

             "KQQK Assignment Application" means the application which Seller
             and Buyer will join in and file with the Commission requesting its
             written consent to the assignment of the KQQK FCC Licenses from EDC
             License Sub to LBI Sub.

             "KQQK Closing Date" means the date as determined pursuant to
             Section 7.1.

             "KQQK FCC Licenses" has the meaning set forth in the recitals to
             this Agreement.

             "KQQK Final Grant Day" means the date on which the Initial Grant
             has become a final order, which date shall be the forty-first day
             following issuance by the Commission of a public notice announcing
             the Initial Grant, unless the Initial Grant has during the
             preceding forty-day period become subject to any administrative or
             judicial stay, appeal, review, reconsideration or rehearing, in
             which case the KQQK Final Grant Day shall not be deemed to occur
             until such administrative or judicial stay, appeal, review,
             reconsideration or rehearing shall have been resolved by a final,
             unappealable order (by the Commission or by a court of competent
             jurisdiction if Buyer elects to seek judicial review of any final
             order by the Commission) which preserves intact the Initial Grant
             without any conditions materially adverse to any Party.

             "LBI," "LBI Holdings" and "LBI Sub" have the meanings specified in
             the first paragraph of this Agreement.

             "Letter of Intent" shall mean that Letter Agreement dated January
             17, 2002 by and among EDC and Liberman Broadcasting, Inc., a
             California corporation and an indirect wholly owned subsidiary of
             LBI Holdings, as extended from time to time.

                                        5



             "Microwave Facility" shall mean that microwave studio transmitter
             link located on the roof of Sellers' Post Oak Road studio and the
             Liberty County STL transmission site shared with KSHN.

             "Party" means any of EDC, EDC Sub, EDC License Sub, LBI Holdings,
             LBI or LBI Sub, as the context requires, and the term "Parties"
             mean all such entities; provided, however, that Seller, on the one
             hand, and LBI Holdings and Buyer, on the other, shall each be
             considered a single Party for purposes of Sections 7.4, 7.5, 10.3
             and 10.4.

             "Permits" means the licenses, permits, approvals, authorizations,
             consents, and orders of any federal, state or local governmental
             authority held by Seller in connection with the operation of the
             Station KQQK (including the KQQK FCC Licenses) and all pending
             requests and applications therefor, including without limitation
             those listed on Schedule II.

             "Proceeds" has the meaning set forth in Section 7.6.1.

             "Purchased Assets" has the meaning set forth in Section 2.1.

             "Purchase Price" has the meaning set forth in Section 3.1.

             "Recipient Agreement" shall mean an agreement substantially in the
             form attached as Exhibit I.

             "Required Consents" means the FCC consents to the assignment of the
             KQQK FCC Licenses and the other governmental consents, third-party
             consents, approvals or waivers in form and substance satisfactory
             to Buyer, necessary for Seller to sell, convey or otherwise sell or
             assign the Purchased Assets to Buyer, including without limitation
             those consents set forth on Schedule III.

             "Sale Proceeds Recipients" shall mean Seller and the other entities
             and persons listed on Schedule IX.

             "Seller" has the meaning set forth in the first paragraph of this
             Agreement.

             "Seller Escrow Payment Certificate (FM Only)" shall mean a
             certificate from an executive officer of Seller in the form of
             Exhibit A attached hereto, instructing the Escrow Agent to
             distribute a portion of the Escrow Deposit to Seller.

             "Simultaneous Closing" means the consummation of the purchase and
             sale transaction contemplated by this Agreement on the KQQK Closing
             Date simultaneously with the consummation of the purchase and sale
             transaction contemplated by the AM Asset Purchase Agreement.

             "Simultaneous Closing Date" means the date on which the
             Simultaneous Closing occurs.

                                        6



             "Station KQQK", "Station KEYH", "Station" and "Stations" have the
             meanings set forth in the recitals hereto.

             "Tangible Personal Property" has the meaning set forth in Section
             2.1.1.

             "Towers" means the radio broadcast towers located at the applicable
             Transmitter Site upon which is located the broadcast antenna for
             Station KQQK.

             "Transaction and Wind Down Expenses" means the costs and expenses
             incurred by Seller in connection with the transactions contemplated
             by this Agreement, or in connection with the wind down of the
             business of Seller after the consummation of the transactions
             contemplated by this Agreement.

             "Transaction Claims" has the meaning set forth in Section 11.6.

             "Transmitter Buildings" means the transmitter buildings located at
             the Transmitter Sites.

             "Transmitter Sites" means the transmitter and antenna sites located
             at Liberty County, Texas (KQQK).

             1.2   Knowledge. The term "knowledge," as it relates to an
individual, shall mean that such individual will be deemed to have knowledge of
a particular fact or other matter if (a) such individual is actually aware of
such fact or other matter; or (b) a prudent individual could be expected to
discover or otherwise become aware of such fact or other matter in the course of
conducting a reasonably comprehensive investigation concerning the existence of
such fact or matter. The term "knowledge," as it relates to a Party or any other
person or entity (other than an individual) shall mean that such Party or such
other person or entity will be deemed to have knowledge of a particular fact or
other matter if any individual who is serving, or who has at any time served
during the twelve months prior to the date of this Agreement, as a director,
officer, partner, executor, trustee, or any other managerial employee of such
Party or such other person or entity (or in any similar capacity) has, or at any
time had, "knowledge" of such fact or other matter.

                                   ARTICLE II
                           PURCHASE AND SALE OF ASSETS

             2.1   Assets to be Conveyed. On the KQQK Closing Date at the
Closing Place, (i) Seller will sell, assign, convey, transfer and deliver to LBI
Sub the KQQK FCC Licenses and the Permits, and all applications therefor,
together with any renewals, extensions, additions or modifications thereof, and
(ii) Seller will sell, assign, convey, transfer and deliver to LBI the business
of Station KQQK and, all of Seller's right, title and interest in and to the
assets, properties and rights described below (which, together with the KQQK FCC
Licenses and the Permits and applications therefor, are collectively referred to
as the "Purchased Assets"), such sale, assignment, conveyance, transfer and
delivery to be made by instruments of conveyance in form reasonably satisfactory
to Buyer and to be free and clear of all Encumbrances. The Purchased Assets
include the following:

                                        7



             2.1.1  All tangible personal property, furniture, fixtures,
             improvements and office equipment and other equipment used in the
             operation of Station KQQK, including all furniture and inventory in
             the Transmitter Buildings, the transmitter facilities, all Towers,
             antennas, main and back-up transmitters and generators, STL's, data
             links for transmitter telemetry, wireless microphone and other
             equipment and tangible personal property located or otherwise
             intended for use at the Transmitter Sites, listed on Schedule IV,
             together with any replacements thereof or additions thereto made
             between the date hereof and the KQQK Closing Date, less any
             retirements made in the ordinary and usual course of Station KQQK's
             business (collectively, together with all tangible personal
             property described in Section 2.1.4, the "Tangible Personal
             Property");

             2.1.2  All prepaid expenses made by Seller, advance payments by
             advertisers to Seller for advertising that would run after the KQQK
             Closing Date and other advance payments by third parties for
             services to be provided by or for Station KQQK after the KQQK
             Closing Date, in each case under the Assumed Contracts;

             2.1.3  The Assumed Contracts and all of Seller's rights thereunder
             relating to periods and events occurring on and after the KQQK
             Closing Date;

             2.1.4  Such files, records and logs pertaining to the operation of
             Station KQQK as Buyer may reasonably require, including Station
             KQQK's public inspection files and other records relating to the
             KQQK FCC Licenses and other filings with the Commission and such
             sales records and other sales and traffic information that may
             exist relating to Station KQQK for the two year period prior to the
             date of this Agreement and copies of all sales orders, invoices,
             contracts, statements and station logs for such period, but
             excluding the corporate and accounting records of Seller to the
             extent not described above (it being understood by the Parties that
             Seller shall transfer the data pertaining to the operation of the
             Station KQQK (including without limitation the data resident in
             Seller's Great Plains and ABC Traffic Software) on the computer
             systems of Seller to the computer systems of Buyer)
             (notwithstanding this conveyance, Buyer agrees to allow Seller
             reasonable access to such records of Station KQQK as Seller may
             reasonably require from and after the KQQK Closing Date); and

             2.1.5  All Intellectual Property.

             2.2    Excluded Assets and Liabilities.

             2.2.1  Excluded Assets. It is understood and agreed that the
             Purchased Assets do not include any assets of Seller that are not
             used in the operation of Station KQQK, intellectual property rights
             not related to the existing station format, the name El Dorado,
             cash (other than the amounts described in Section 2.1.2), cash
             equivalents, deposits made by Seller under any contracts (other
             than the amounts described in Section 2.1.2), accounts receivable
             of Seller not accruing under the FM Local Marketing Agreement,
             causes of action, tax refunds, insurance claims or proceeds, in
             each case (for such accounts receivable, causes of action, tax

                                        8



             refunds and insurance claim and proceeds) accruing prior to the
             closing of the transactions contemplated by this Agreement (and not
             accruing under the FM Local Marketing Agreement), claims of Seller
             which accrue under this Agreement, personal art work of
             shareholders of EDC at the office buildings relating to Station
             KQQK and excess studio and excess transmission equipment not used
             in the operation of Station KQQK, nor do they include the assets of
             any pension or other employee benefit plans nor any other assets
             specifically excluded from the Purchased Assets by the provisions
             of this Agreement (all the foregoing of which are referred to as
             the "Excluded Assets").

             2.2.2  Liabilities Not Assumed. Except for the liabilities and
             obligations specifically assumed pursuant to Section 3.2, Buyer and
             LBI Holdings will not assume and will not be or become liable for,
             any liabilities or obligations of Seller of any kind or nature
             whatsoever, whether absolute, contingent, accrued, known or
             unknown, related to the ownership of the Purchased Assets, the
             Excluded Assets, the operation of Station KQQK (including without
             limitation, Seller's actions in operating Station KQQK under the FM
             Local Marketing Agreement but excluding Buyer's actions in
             operating Station KQQK under the FM Local Marketing Agreement) or
             Seller's employees or otherwise.

                                  ARTICLE III
                PURCHASE PRICE; METHOD OF PAYMENT; ESCROW DEPOSIT

             3.1    Purchase Price. Subject to Section 7.6.3, the purchase price
to be paid to Seller by Buyer for the Purchased Assets will be Twenty-Three
Million and One Dollars ($23,000,001) plus the aggregate amount of prepaid
expenses made by Seller for services to be provided to Station KQQK after the
KQQK Closing Date under the Assumed Contracts as set forth on Schedule VIII less
any accrued liabilities agreed to be assumed by Buyer, other than liabilities
assumed pursuant to and to the extent set forth in Section 3.2 (the "Purchase
Price").

             3.1.1  Payment of Purchase Price. Subject to the terms and
             conditions set forth in this Agreement, on the KQQK Closing Date,
             LBI Holdings or Buyer will (a) pay the Seller an amount equal to
             the Purchase Price minus $1,500,000, by wire transfer of
             immediately available funds in accordance with wire transfer
             instructions to be provided by Seller to Buyer not less than three
             business days prior to the KQQK Closing Date, and (b) deposit
             $1,500,000 with the Holdback Escrow Agent by wire transfer of
             immediately available funds in accordance with wire transfer
             instructions to be provided by Holdback Escrow Agent to Buyer not
             less than three business days prior to the KQQK Closing Date to be
             held under the Holdback Escrow Agreement in accordance with Section
             3.1.4 hereof and the terms of the Holdback Escrow Agreement in
             order to secure the indemnification obligations of Seller under
             Article X hereof, any other obligations of Seller under this
             Agreement, obligations of Seller under Article X of the AM Asset
             Purchase Agreement and any other obligations of Seller thereunder
             (the "Holdback").

             3.1.2  Release of Escrow Deposit. Also on the KQQK Closing Date,
             concurrently with the wire transfer of the Purchase Price to
             Seller, EDC and LBI

                                        9



             Holdings shall jointly execute and deliver to the Escrow Agent
             written instructions to deliver $1,000,000 of the Escrow Deposit
             (plus any associated interest) to LBI Holdings; provided that if
             the KQQK Closing Date is also a Simultaneous Closing Date or if the
             AM Asset Purchase Agreement has theretofore been terminated or is
             terminated on such date, then EDC and LBI Holdings shall jointly
             execute and deliver to the Escrow Agent written instructions to
             terminate the Escrow Agreement and deliver the entire Escrow
             Deposit to LBI Holdings.

             3.1.3  Post-Closing Proration. Following the KQQK Closing Date, the
             Parties shall determine and make the prorations called for in
             Section 3.6.

             3.1.4  Holdback.

       (a)   Subject to the terms and conditions set forth in this Agreement, on
       the KQQK Closing Date, LBI Holdings or Buyer shall deposit the Holdback
       with the Holdback Escrow Agent pursuant to the Holdback Escrow Agreement.
       The Holdback will be held, maintained, administered and disbursed by the
       Holdback Escrow Agent in accordance with the terms and provisions hereof,
       of the AM Asset Purchase Agreement and of the Holdback Escrow Agreement,
       with the terms of the Holdback Escrow Agreement controlling in the event
       of any conflict.

       (b)   LBI Holdings and/or Buyer will submit claims to Seller by a written
       notice specifying the amount of the claim (or estimated amount if the
       claim is not reasonably quantifiable) and describing in reasonable detail
       the basis for the claim. If Seller does not notify LBI Holdings or Buyer,
       as the case may be, within 15 days after receiving such a notice of
       Seller's objection to the claim, LBI Holdings and EDC shall at the end of
       such 15 day period execute and deliver to Holdback Escrow Agent joint
       written instructions to deliver to Buyer from the Holdback an amount
       equal to the claimed amount, as determined in accordance with this
       Section 3.1.4. If Seller gives notice of objection to LBI Holdings or
       Buyer, as the case may be, within the 15-day period, and the Parties
       cannot reach agreement on the claim, LBI Holdings and EDC shall at the
       end of such 15 day period execute and deliver to Holdback Escrow Agent
       joint written instructions to deliver to Buyer from the Holdback an
       amount equal to the amount not in dispute, and the Parties will attempt
       in good faith to agree upon the amount in dispute. If the Parties cannot
       agree within thirty (30) days thereafter, the Parties will submit such
       dispute to arbitration, as provided for in Section 11.6. Within three
       business days of (i) reaching resolution of such dispute as to the amount
       (if any) that LBI Holdings and Buyer are entitled to (in the event that
       the parties reach resolution without submitting such dispute to
       arbitration), or (ii) an arbitrator determining the amount (if any) that
       LBI Holdings and Buyer are entitled to (in the event that such dispute is
       submitted to arbitration), LBI Holdings and EDC shall execute and deliver
       to Holdback Escrow Agent joint written instructions to deliver to Buyer
       from the Holdback an amount equal to such applicable amount. The failure
       to give notice of a claim hereunder will not constitute an election of
       remedies and will not limit LBI Holdings or Buyer in any manner in the
       enforcement of other remedies that may be available to it.

                                       10



       (c)   On the twelve month anniversary of the consummation of the
       transaction contemplated by the FM Asset Purchase Agreement on the KQQK
       Closing Date, LBI Holdings and EDC shall execute and deliver to the
       Holdback Escrow Agent written instructions to deliver to Seller from the
       Holdback an amount equal to $800,000 minus the lesser of (x) $800,000 and
       (y) the sum of the aggregate amount previously paid since the KQQK
       Closing Date to satisfy claims asserted by LBI Holdings and/or Buyer and
       the aggregate amount required to satisfy claims asserted by LBI Holdings
       and/or Buyer since the KQQK Closing Date and previously resolved (to the
       extent the resolution calls for a payment to LBI Holdings and/or Buyer)
       or still pending on the date of such release, in each case pursuant to
       this Agreement or the AM Asset Purchase Agreement.

       (d)   On the twenty four month anniversary of the consummation of the
       transaction contemplated by the AM Asset Purchase Agreement (or if the
       purchase and sale transaction contemplated under the AM Asset Purchase
       Agreement does not occur, on the later of (i) the eighteenth month
       anniversary of the KQQK Closing Date or (ii) the date on which the AM
       Asset Purchase Agreement is terminated), LBI Holdings and EDC shall
       execute and deliver to the Holdback Escrow Agent written instructions to
       deliver to Seller the remainder of the Holdback, less any amounts
       required to satisfy claims asserted by LBI Holdings and/or Buyer and
       previously resolved (to the extent the resolution calls for a payment to
       LBI Holdings and/or Buyer) or still pending on the date of such release,
       in each case pursuant to this Agreement or the AM Asset Purchase
       Agreement.

             3.2    Liabilities Assumed. As of the KQQK Closing Date, Buyer will
assume and agree to pay, discharge and perform insofar as they relate to the
time period on and after the KQQK Closing Date, and arise out of events
occurring on or after the KQQK Closing Date, all the obligations and liabilities
of Seller under the Assumed Contracts.

             3.3    Escrow Deposit. Concurrently with the execution and delivery
of the Recipient Agreement by Seller and the top eight entities listed on
Schedule IX, LBI Holdings will deposit pursuant to this Section 3.3 and pursuant
to Section 3.3 of the AM Asset Purchase Agreement One Million Five Hundred
Thousand Dollars ($1,500,000) under the Escrow Agreement (together with any
interest accrued on such amount, the "Escrow Deposit"). The Escrow Deposit will
be held, maintained, administered and disbursed by the Escrow Agent in
accordance with the terms and provisions hereof, of the AM Asset Purchase
Agreement and of the Escrow Agreement, with the terms of the Escrow Agreement
controlling in the event of any conflict. Once deposited, the Escrow Deposit
will be disbursed as follows:

             3.3.1  Notification of Escrow Agent; Delivery of Seller Escrow
             Payment Certificate (FM Only). Within three business days of the
             occurrence of the KQQK Final Grant Day, Seller shall notify Escrow
             Agent in writing, with a copy to Buyer, of such occurrence. Seller
             agrees not to deliver to the Escrow Agent the Seller Escrow Payment
             Certificate (FM Only) unless it simultaneously delivers to LBI
             Holdings such certificate.

             3.3.2  Delivery to Seller. If Buyer fails to consummate the
             purchase and sale contemplated by this Agreement under
             circumstances that would constitute a material breach of this
             Agreement and Seller is not then in breach of its

                                       11



             representations, warranties or covenants hereunder in any material
             respect, then, subject to the satisfaction of the conditions set
             forth below, $1,000,000 plus any associated interest of the Escrow
             Deposit, will be delivered to Seller on the ninth business day (or,
             if Buyer has elected to defer the KQQK Closing Date as set forth in
             7.1, the thirty-ninth business day) after the KQQK Final Grant Day,
             it being understood and agreed that payment to Seller of $1,000,000
             plus any associated interest of the Escrow Deposit (and, if
             applicable, the amounts described in the second-to-last sentence of
             the following paragraph) (or, prior to the Escrow Deposit being
             made, payment to Seller of $1,000,000) will constitute full payment
             for any and all damages suffered by Seller by reason of LBI
             Holdings' or Buyer's failure to consummate the purchase and sale
             contemplated by this Agreement. Conditions to such delivery of
             $1,000,000 plus any associated interest of the Escrow Deposit to
             Seller on such day will be that (a) the Escrow Agent and LBI
             Holdings shall have received on the sixth business day (or, if
             Buyer has elected to defer the KQQK Closing Date as set forth in
             7.1, the thirty-sixth business day) after the KQQK Final Grant Day
             at or prior to 5:00 PM (California time) (with a copy by e-mail to
             Lenard Liberman at e-mail lliberman@lbimedia.com and by fax and
             e-mail to Joe Kim at fax (213) 430-6407 and e-mail jkim@omm.com and
             Steve Chen at fax (213) 430-6407 and e-mail schen@omm.com) a duly
             executed Seller Escrow Payment Certificate (FM Only) substantially
             in the form of Exhibit A annexed hereto, and (b) the Escrow Agent
             shall not have received from LBI Holdings or Buyer a written
             challenge challenging the accuracy of such Seller Escrow Payment
             Certificate (FM Only) at or prior to 5:00 PM (California time) of
             the second business day after receipt by both LBI Holdings and the
             Escrow Agent of such Seller Escrow Payment Certificate (FM Only).

                    THE PARTIES ACKNOWLEDGE AND AGREE IN ADVANCE BY INITIALING
             THIS AGREEMENT IN THE SPACES PROVIDED [LBI HOLDINGS' INITIALS
             ________, BUYER'S INITIALS ________ AND ________, AND SELLER'S
             INITIALS _________, _______ AND ________], THAT THE ACTUAL DAMAGES
             THAT SELLER WOULD SUFFER AS A RESULT OF BUYER'S FAILURE TO
             CONSUMMATE THE PURCHASE AND SALE OF THE ASSETS DESCRIBED IN THIS
             AGREEMENT WOULD BE EXTREMELY DIFFICULT OR IMPOSSIBLE TO CALCULATE;
             THAT $1,000,000 PLUS ANY ASSOCIATED INTEREST OF THE ESCROW DEPOSIT
             (OR, PRIOR TO THE ESCROW DEPOSIT BEING MADE, $1,000,000) IS A FAIR
             AND EQUITABLE AMOUNT TO REIMBURSE SELLER FOR ANY DAMAGES WHICH THE
             PARTIES ESTIMATE MAY BE SUSTAINED BY SELLER DUE TO BUYER'S FAILURE
             TO CONSUMMATE THE PURCHASE AND SALE OF THE ASSETS DESCRIBED IN THIS
             AGREEMENT UNDER THE CIRCUMSTANCES STATED IN THIS SECTION 3.3; AND
             THAT THIS SECTION 3.3 SHALL CONSTITUTE A LIQUIDATED DAMAGES
             PROVISION, WHICH DAMAGES WILL BE SELLER'S SOLE REMEDY HEREUNDER IN
             THE EVENT OF LBI HOLDINGS' OR BUYER'S FAILURE TO CONSUMMATE THE
             PURCHASE AND SALE OF THE ASSETS DESCRIBED IN THIS AGREEMENT UNDER

                                       12




             THE CIRCUMSTANCES STATED IN THIS SECTION 3.3. IN THE EVENT THAT LBI
             HOLDINGS OR BUYER PROVIDES ESCROW AGENT A WRITTEN CHALLENGE
             CHALLENGING THE ACCURACY OF THE SELLER ESCROW PAYMENT CERTIFICATE
             (FM ONLY) AND A DISPUTE OVER THE DISBURSEMENT OF $1,000,000 PLUS
             ANY ASSOCIATED INTEREST OF THE ESCROW DEPOSIT ARISES THEREFROM,
             SUCH DISPUTE SHALL BE RESOLVED IN ACCORDANCE WITH SECTION 11.6. IF
             THE ARBITRATOR FINDS THAT THE SELLER ESCROW PAYMENT CERTIFICATE (FM
             ONLY) WAS ACCURATE AND THAT SUCH WRITTEN CHALLENGE WAS WITHOUT
             MERIT, THEN BUYER SHALL PAY SELLER (1) REASONABLE ATTORNEY'S FEES
             AND EXPENSES INCURRED BY SELLER IN CONNECTION WITH SUCH DISPUTE AND
             (2) 10% INTEREST ON $1,000,000 PLUS ASSOCIATED INTEREST OF THE
             ESCROW DEPOSIT CALCULATED FROM THE DATE OF SUCH WRITTEN CHALLENGE
             TO THE DATE THE $1,000,000 PLUS ANY ASSOCIATED INTEREST OF THE
             ESCROW DEPOSIT IS PAID TO SELLER. IF THE ARBITRATOR FINDS THAT THE
             SELLER ESCROW PAYMENT CERTIFICATE (FM ONLY) WAS INACCURATE AND THAT
             SUCH WRITTEN CHALLENGE WAS WITH MERIT, SELLER SHALL PAY BUYER (1)
             REASONABLE ATTORNEY'S FEES AND EXPENSES INCURRED BY LBI HOLDINGS
             AND BUYER IN CONNECTION WITH SUCH DISPUTE AND (2) 10% INTEREST ON
             THE $1,000,000 PLUS ASSOCIATED INTEREST OF THE ESCROW DEPOSIT
             CALCULATED FROM THE DATE OF SUCH WRITTEN CHALLENGE TO THE DATE THE
             $1,000,000 PLUS ANY ASSOCIATED INTEREST OF ESCROW DEPOSIT IS
             RETURNED TO BUYER.

             3.3.3  Delivery to LBI Holdings. In the event of a Simultaneous
             Closing or in the event of an FM Only Closing in which the AM Asset
             Purchase Agreement has theretofore been terminated or is terminated
             on such date, the Escrow Deposit shall be delivered to LBI
             Holdings. Subject to the following sentence, in the event that the
             purchase and sale contemplated by this Agreement and/or the AM
             Asset Purchase Agreement is not consummated and Seller is not
             entitled to receive the Escrow Deposit in accordance with Section
             3.3.2, the entire Escrow Deposit shall be delivered to LBI
             Holdings. In the event of an FM Only Closing in which the AM Asset
             Purchase Agreement has not theretofore been terminated or is not
             terminated on such day, if the transactions contemplated by this
             Agreement are consummated, $1,000,000 of the Escrow Deposit (plus
             any associated interest) shall be delivered to LBI with the
             remainder of the Escrow Deposit remaining in place pursuant to the
             AM Asset Purchase Agreement to be released in accordance with
             Sections 3.3.2 and 3.3.3 thereof.

             3.4    Buyer's Remedies. If the purchase and sale contemplated by
this Agreement is not consummated because of the breach by Seller of its
representations, warranties or covenants hereunder in any material respect, and
Buyer is not in breach of its representations, warranties or covenants hereunder
in any material respect, Seller agrees that, in addition to any other rights and
remedies available at law or in equity, LBI Holdings and Buyer shall have the

                                       13



following rights and remedies: (i) Buyer shall have the right to specific
performance of Seller's obligation to sell the Purchased Assets upon the terms
and conditions set forth in this Agreement, and incidental damages related to
such specific performance; (ii) LBI Holdings shall have the right to the return
of $1,000,000 of the Escrow Deposit (and associated interest); and (iii) LBI
Holdings and Buyer shall have the right to recover money damages for breach of
this Agreement, including but not limited to, benefit of the bargain damages and
compensation for transaction costs; provided, that if LBI Holdings and Buyer
obtain full remedies under clause (i) pursuant to a non-appealable judgment with
which Seller complies, then Buyer shall not thereafter have additional claims
under clause (iii) and if LBI Holdings and Buyer obtain full remedies under
clause (iii) pursuant to a non-appealable judgment with which Seller complies,
then Buyer shall not thereafter have additional claims under clause (i);
provided, further, that if the purchase and sale contemplated by this Agreement
is not consummated because the representation and warranty in the second
sentence of Section 4.6 would not be true on the KQQK Closing Date, then LBI
Holdings and Buyer shall have the remedies in clauses (i) and (ii) but not in
clause (iii). The Parties agree that remedy at law is inadequate and that
damages are not adequate to compensate LBI Holdings and Buyer.

             3.5   Allocation. The Purchase Price will be allocated as set forth
on Schedule V.

             3.6   Prorations. Other than the prepaid expenses set forth on
Schedule VIII and subject to the rights of Buyer and Seller pursuant to the FM
Local Marketing Agreement, the operation of Station KQQK and, subject to the FM
Local Marketing Agreement, all income, expenses and liabilities attributable
thereto through 11:59 p.m. on the day immediately preceding the KQQK Closing
Date will be for the account of Seller and thereafter for the account of LBI,
and all income and expenses relating to the operation of Station KQQK, including
such items as power and utilities charges, rents and other deferred items
relating to the operation of Station KQQK, will be prorated between Seller and
LBI in accordance with generally accepted accounting principles consistently
applied, the proration to be made and paid, insofar as feasible, on the KQQK
Closing Date, with a final settlement sixty days after the KQQK Closing Date. In
the event of any disputes between the parties as to such adjustments, the
amounts not in dispute shall nonetheless be paid at the time provided herein and
such disputes shall be determined by an independent certified public accountant
mutually acceptable to the parties, and the fees and expenses of such accountant
shall be paid one-half by Seller and one-half by Buyer.

                                   ARTICLE IV
                    REPRESENTATIONS AND WARRANTIES BY SELLER

             Seller hereby represents and warrants to LBI Holdings and Buyer as
follows:

             4.1   Organization and Standing. Each of EDC, EDC Sub, and EDC
License Sub is a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation. Seller has the
requisite corporate power and authority to enter into and complete the
transactions contemplated by this Agreement.

             4.2   Authorization. All necessary corporate actions and
proceedings to duly approve the execution, delivery and performance of this
Agreement, the Escrow Agreement, the

                                       14



Holdback Escrow Agreement, the Recipient Agreement, the FM Local Marketing
Agreement and other agreements, documents and instruments being executed by
Seller in connection herewith or therewith and the consummation of the
transaction contemplated hereby or thereby have been duly and validly taken by
Seller, and each of this Agreement, the Escrow Agreement, the Holdback Escrow
Agreement, the Recipient Agreement, the FM Local Marketing Agreement and other
agreements, documents and instruments being executed by Seller in connection
herewith or therewith has been duly and validly authorized, executed and
delivered by Seller and constitutes the legal, valid and binding obligation of
Seller, enforceable against Seller in accordance with and subject to their
respective terms.

             4.3    KQQK FCC Licenses, Transmitters and Towers.

             4.3.1  The KQQK FCC Licenses (all of which are listed on Schedule
             II, together with any pending applications for KQQK FCC Licenses)
             constitute all the licenses, permits and other authorizations
             required for and used in connection with the operation of Station
             KQQK. As of the date of this Agreement and as of the KQQK Closing
             Date, Seller is and shall be holder of all the KQQK FCC Licenses.
             Other than the Initial Grant of the KQQK Assignment Application, no
             additional order or grant is required from the FCC in order to
             consummate the assignment of the KQQK FCC Licenses to LBI Sub.
             Schedule II correctly sets forth the respective expiration date of
             each KQQK FCC License. Each KQQK FCC License is validly issued and
             in full force and effect. Seller has taken all actions and
             performed all of their respective obligations that are necessary to
             maintain the KQQK FCC Licenses without adverse modification or
             impairment, and complete and correct copies of the KQQK FCC
             Licenses and any pending applications therefor have been delivered
             to Buyer. No event has occurred with respect to Station KQQK (other
             than directly as a result of Buyer's actions under the FM Local
             Marketing Agreement) which (i) has resulted in, or after notice or
             lapse of time or both would result in, revocation, suspension,
             adverse modification, non-renewal or termination of or any order of
             forfeiture with respect to, any KQQK FCC License or (ii) materially
             and adversely affects or in the future may materially and adversely
             affect any rights of Seller or its assignees or transferees
             thereunder. None of the KQQK FCC Licenses requires that any
             assignment thereof must be approved by any public or other
             governmental authority other than the FCC.

             4.3.2  Seller is not a party to, and there are no investigations,
             notices of apparent liability, violations, forfeitures, notices of
             violation, orders to show cause or other orders or complaints
             issued by or before any court or regulatory body, including,
             without limitation, the FCC, or of any other proceedings (other
             than proceedings relating to the radio industry generally) that
             could in any manner threaten or adversely affect the validity or
             continued effectiveness of, or result in the adverse modification
             of, any of the KQQK FCC Licenses. In the event Seller learns of any
             such action, or the filing or issuance of any such order, notice or
             complaint, Seller promptly will notify Buyer of the same in writing
             and will take all reasonable measures to contest in good faith or
             seek removal or rescission of such action, order, notice or
             complaint. Station KQQK is now operating at its licensed

                                       15



             power and antenna height, in accordance with the KQQK FCC Licenses,
             and is in compliance with the Communications Act including, without
             limitation, rules governing the location of Station KQQK's main
             studio and rules governing the required contents of Station KQQK's
             public inspection files. Seller has no reason to believe that the
             KQQK FCC Licenses will not be renewed in the ordinary course.

             4.3.3  None of the facilities used in connection with the radio
             broadcasting operations of Seller relating to Station KQQK
             (including the Transmitter Buildings, the Transmitter Sites and the
             Towers) violates the provisions of any applicable building codes,
             fire regulations, building restrictions or other governmental
             ordinances, orders or regulations (including, without limitation,
             any applicable regulation of the Federal Aviation Administration),
             except where such violation would not impair, impede or affect
             adversely in any respect currently or in the future the continued
             uninterrupted operation of Station KQQK at its licensed power and
             in accordance with the other terms of the KQQK FCC Licenses, and
             each such facility is zoned so as to permit the commercial uses
             intended by the owner or occupier thereof. Schedule II identifies
             any outstanding variances or special use permits materially
             affecting any of Seller's facilities or the uses thereof and Seller
             is in compliance therewith. Seller has received no notice of any
             complaint being made against Station KQQK relating to its Tower,
             Transmitter Site, Transmitter Building or Seller's operation of
             such Station (including, without limitation, any complaint relating
             to the signals broadcast or otherwise transmitted from any Tower,
             either by Seller or by any person subleasing a portion of such
             Tower) except, in each case, where such complaint would not impair,
             impede or adversely affect the continued, uninterrupted operation
             of such Station. Each Tower has been appropriately registered with
             the Commission, as described in Schedule II.

             4.3.4  Seller is qualified to sell Station KQQK and to assign the
             KQQK FCC Licenses in accordance with the terms of this Agreement
             and in compliance with the Communications Act. Seller knows of no
             party who has expressed any intention to oppose FCC approval of the
             assignment of the KQQK FCC Licenses to LBI Sub, nor does Seller
             know of any reason why FCC consent to such assignment might be
             denied or delayed.

             4.3.5  Each report or certification filed by or on behalf of Seller
             with the FCC, including, without limitation, any filing pursuant to
             47 C.F.R. (S) 73.3615 with respect to its ownership of Station KQQK
             and any other filing relating to such Station, was filed, and was
             at the time of filing true, correct and complete in all material
             respects; there have been no changes in the ownership of Station
             KQQK since the filing of the most recent such ownership reports or
             certifications and those ownership reports and certifications are
             true, correct and complete in all respects.

                                       16



             4.3.6  The operation of Station KQQK by Seller does not cause or
             result in exposure of workers or the general public to levels of
             radio frequency radiation in excess of the applicable limits stated
             in 47 C.F.R. ss. 1.1310.

             4.4    Purchased Assets. All items as of the date hereof used in
the operation of Station KQQK are listed and described in Schedule IV to this
Agreement. No other affiliate of EDC (including without limitations, direct or
indirect subsidiaries of EDC) other than Seller owns or has any rights, title or
interest in any Purchased Assets or is in any way involved with the operation of
Station KQQK. On the KQQK Closing Date, Seller will have good and valid title to
the Purchased Assets, free and clear of all Encumbrances, other than the
Encumbrances described in Schedule III, which Encumbrances will be released on
the KQQK Closing Date concurrently with the closing. Upon consummation of the
transactions set forth in this Agreement, Buyer will have good and valid title
to the Purchased Assets, free and clear of all Encumbrances (other than liens
granted to Buyer's lenders). Schedule III sets forth each release and/or UCC
termination statement required in order to release such Encumbrances on the KQQK
Closing Date. Schedule III also sets forth all currently effective UCC financing
statements that have been filed against any Purchased Asset. Seller has
maintained and has operated each Transmitter Site, each Tower, each Transmitter
Building and Station KQQK under and in accordance with the terms of all
applicable regulations in all material respects. Seller is not aware of any
complaints regarding the Transmitter Sites, the Towers, the Transmitter
Buildings, the antennas, the radio transmitters or the studio facilities. There
is no pending or, to the knowledge of Seller, threatened action, event,
transaction or proceeding that could interfere with the quiet enjoyment or
operation of the Purchased Assets by Seller or, on and after the KQQK Closing
Date, by Buyer. Buyer will have on and after the KQQK Closing Date reasonable
access to each of the Transmitter Sites, and a continuous means of ingress and
egress thereto from public roads. The items of Tangible Personal Property are in
all material respects in good operating condition for equipment of their age and
usage (ordinary wear and tear excepted). The technical equipment, constituting a
part of the Tangible Personal Property, has been maintained in accordance with
Station KQQK's past practice and is operating and complies in all material
respects with all applicable rules and regulations of the FCC and the terms of
the KQQK FCC Licenses and Permits. The Purchased Assets include all the personal
property and assets, including real estate rights, necessary to conduct the
operation of Station KQQK as now conducted. The sale of the Purchased Assets
relating to Station KQQK is a sale of the entire operating assets of a business
or of a separate division, branch, or identifiable segment of a business within
the meaning of Texas Tax Code Section 151.304 and Texas Administrative Code
Section 3.316.

             4.5    Insurance. Seller now has in force insurance on the
Purchased Assets as set forth in Schedule VI and will continue the present
insurance at the present limits in full force and effect up through the KQQK
Closing Date.

             4.6    Litigation. On or prior to the date of this Agreement, no

litigation, action, suit, judgment, proceeding or, to the knowledge of Seller,
investigation relating to Station KQQK is pending or outstanding before any
forum, court, or governmental body, department or agency of any kind to which
Seller or Station KQQK is a party and, to the knowledge of Seller, no such
litigation or proceeding is threatened. On or prior to the KQQK Closing Date, no
litigation, action, suit, judgment, proceeding or, to the knowledge of Seller,
investigation relating

                                       17



to Station KQQK (except for such litigation, action, suit, judgment, proceeding
or investigation arising directly as a result of Buyer's actions under the FM
Local Marketing Agreement) that could reasonably be expected or would reasonably
be expected to adversely affect the operation of Station KQQK in accordance with
Seller's past operations or could reasonably be expected or would reasonably be
expected to prevent a consummation of the transaction contemplated hereby shall
be pending or outstanding before any forum, court or governmental body,
department or agency of any kind to which Seller or Station KQQK is a party,
and, to the knowledge of Seller, no such litigation or proceeding shall be
threatened.

             4.7   Contracts. Seller has delivered to Buyer prior to the KQQK
Closing Date true and complete copies of all Contracts (in the case of oral
agreements, a written summary of the key terms of such oral Contracts),
including without limitation the Assumed Contracts. The Assumed Contracts will
be enforceable by Buyer after the consummation of the transaction contemplated
hereby in accordance with their respective terms; provided, however, that Seller
makes no warranty as to performance by any other party to any Assumed Contracts
or as to LBI's ability to collect any payments due or to become due thereunder.
Seller has not taken any action that would impair the enforceability of the
Assumed Contracts, or omitted to take any action, the omission of which would
have such effect. There are no material defaults under any of the Assumed
Contracts and the consummation of the transaction contemplated hereby will not
cause any defaults under any of the Assumed Contracts.

             4.8   Insolvency. No insolvency proceedings of any character
including, without limitation, bankruptcy, receivership, reorganization,
composition or arrangement with creditors, voluntary or involuntary, affecting
Seller or any of its assets or properties is pending or, to the knowledge of
Seller, threatened.

             4.9   Reports. All material returns, reports and statements
currently required to be filed by Seller with the Commission or with any other
governmental agency have been filed and each such return, report and statement
is true, correct and complete in all material respects. Seller has complied in
all material respects with the reporting requirements of the Commission and
other governmental authorities having jurisdiction over Station KQQK and its
operations.

             4.10  No Defaults. Neither the execution, delivery and performance
by Seller of this Agreement, the Escrow Agreement, the Holdback Escrow
Agreement, the Recipient Agreement, the FM Local Marketing Agreement and other
agreements, documents and instruments being executed by Seller in connection
herewith or therewith nor the consummation by Seller of the transaction
contemplated hereby is an event that, of itself or with the giving of notice or
the passage of time or both, will (i) conflict with the provisions of the
Articles of Incorporation or Bylaws of Seller, (ii) constitute a violation of,
conflict with or result in any breach of or any default under, result in any
termination or modification of, or cause any acceleration of any obligation
under, any material contract, mortgage, indenture, agreement, lease, license or
other instrument to which Seller is a party or by which it is bound, or by which
it may be affected, or result in the creation of any Encumbrance on any of the
Purchased Assets, (iii) violate any judgment, decree, order, statute, rule or
regulation applicable to Seller or (iv) violate or constitute a breach of any
Assumed Contract. The execution, delivery and performance by Seller of this
Agreement, the Escrow Agreement, the Holdback Escrow Agreement, the Recipient
Agreement, the FM Local Marketing Agreement and other

                                       18



agreements, documents and instruments being executed by Seller in connection
herewith or therewith and the consummation by Seller of the transactions
contemplated hereby do not require the consent of any third party other than as
listed on Schedule III.

             4.11   Disclosures. No covenant, representation or warranty by
Seller and no written statement, certificate, appendix or Schedule furnished by
Seller pursuant hereto or in connection with the transaction contemplated hereby
contains any untrue statement of a material fact or omits to state any material
fact necessary to make the statements contained herein or therein not materially
misleading.

             4.12   Environmental Compliance. (i) Seller has not, in connection
with its business or assets, generated, used, transported, treated, stored,
released or disposed of, or has suffered and has permitted no one else to
generate, use, transport, treat, store, release or dispose of any Hazardous
Substance (as defined below) in violation of any applicable environmental law;
(ii) to the knowledge of Seller, there has not been any generation, use,
transportation, treatment, storage, release or disposal of any Hazardous
Substance in connection with the conduct of Seller's business or in any
properties within 100 yards of its business which has created or might
reasonably be expected to create any material liability under any applicable
environmental law or which would require reporting to or notification of any
governmental entity; (iii) to the knowledge of Seller, no asbestos or
polychlorinated biphenyl or underground storage tank is contained in or located
at any facility used in connection with its business; and (iv) to the knowledge
of Seller, any Hazardous Substance handled or dealt with in any way in
connection with Seller's business has been and is being handled or dealt with in
all material respects in compliance with all applicable environmental laws. As
used herein, "Hazardous Substance" means substances that are defined or listed
in, or otherwise classified pursuant to, any applicable laws as "hazardous
substances," "hazardous materials," "hazardous wastes" or "toxic substances," or
any other formulation of any applicable environmental law intended to define,
list or classify substances by reason of deleterious properties such as
ignitibility, corrosivity, reactivity, radioactivity, carcinogenicity,
reproductive toxicity or "EP toxicity," and petroleum and drilling fluids,
produced waters and other wastes associated with the exploration, development,
or production of crude oil, natural gas or geothermal energy.

             4.13   Intellectual Property.

             4.13.1 Schedule VII contains a true and complete list of all
             patents and trademarks, service marks, station names, alternative
             station names, slogans, trade names, logos, jingles, assumed names,
             fictional business names, copyrights, licenses, permits,
             authorizations and other similar intellectual property rights and
             interests applied for, issued to or presently owned or used by
             Seller (other than the name "El Dorado" and programming and its
             contents used but not owned by Seller) which are material to the
             operation of Station KQQK, including the call letters "KQQK" and
             any other call signs (together with the goodwill associated
             therewith, the "Intellectual Property"). Except as set forth on
             Schedule VII, on the KQQK Closing Date, Seller will have good and
             marketable title to all of the Intellectual Property, free and
             clear of all Encumbrances. Seller has not made any registrations or
             filings in the United States Copyright Office or the United States
             Patent and Trademark Office nor has Seller been issued by the
             United States

                                       19



             Copyright Office or the United States Patent and Trademark Office
             any intellectual property rights in connection with or related to
             Station KQQK.

             4.13.2 Except as set forth on Schedule VII, on the KQQK Closing
             Date, Seller has not received any notice from any other person or
             entity pertaining to or challenging the right of Seller to use any
             of the Intellectual Property or any rights thereunder.

             4.13.3 Except as set forth on Schedule VII, Seller has not violated
             or infringed any patent, trademark, trade name, jingle, assumed
             name, fictional business name, copyright, license, permit or other
             similar intangible property right or interest held by others or any
             license or permit held by Seller in connection with or related to
             Station KQQK.

             4.13.4 Except as set forth on Schedule VII, (i) Seller has not
             granted any license or other rights and Seller has no obligations
             to grant licenses or other rights to any of the Intellectual
             Property, and (ii) Seller has not made any claim of any violation
             or infringement by others of its rights to or in connection with
             any of the Intellectual Property, and there is no basis for the
             making of any such claim.

             4.14   Brokers. No agent, broker, investment or commercial banker,
person or firm acting on behalf of Seller is or will be entitled to any broker,
finder or financial advisor fee or any other commission or similar fee directly
or indirectly in connection with the transaction contemplated by this Agreement,
other than Houlihan Lokey Howard & Zukin, whose fee shall be paid by Seller.

             4.15   Prepaid Expenses. All prepaid expenses made by Seller for
services to be provided to Station KQQK after the KQQK Closing Date under the
Assumed Contracts are set forth on Schedule VIII, except for such expenses as
are subject to proration under Section 3.6.

             4.16   Sale Proceeds Recipients; Recipient Agreement. Seller and
Sale Proceeds Recipients listed on Schedule IX constitute all entities and
persons that will receive the proceeds from the sale of the Stations pursuant to
this Agreement and/or the AM Asset Purchase Agreement other than those persons
or entities that will receive only Transaction and Wind Down Expenses. Upon
execution and delivery thereof, (to Seller's knowledge after due inquiry,
including with the Sale Proceeds Recipients) the Recipient Agreement will have
been duly and validly authorized, executed and delivered by Seller and each Sale
Proceeds Recipient signatory thereto and will constitute the legal, valid and
binding obligation of Seller and each Sale Proceeds Recipient signatory thereto,
enforceable against Seller and such Sale Proceeds Recipient in accordance with
and subject to its terms.

                                       20



                                   ARTICLE V
            REPRESENTATIONS AND WARRANTIES BY BUYER AND LBI HOLDINGS

             LBI Holdings and Buyer represent and warrant to Seller as follows:

             5.1   Status. Each of LBI Holdings, LBI and LBI Sub is a California
corporation, duly organized, validly existing and in good standing under the
laws of the State of California. LBI Holdings and Buyer each have the requisite
corporate power to enter into and complete the transaction contemplated by this
Agreement.

             5.2   No Defaults. Other than the consents set forth in Schedule
III with respect to Buyer, item (2) of which will have been obtained by the KQQK
Closing Date, neither the execution, delivery and performance by LBI Holdings or
Buyer of this Agreement, the Escrow Agreement, the Holdback Escrow Agreement,
the Recipient Agreement, the FM Local Marketing Agreement and other agreements,
documents and instruments being executed by LBI Holdings or Buyer in connection
herewith or therewith nor the consummation by Buyer of the transaction
contemplated hereby is an event that, of itself or with the giving of notice or
the passage of time or both, will (i) conflict with the provisions of the
Articles of Incorporation or Bylaws of LBI Holdings or Buyer, (ii) constitute a
violation of, conflict with or result in any breach of or any default under,
result in any termination or modification of, or cause any acceleration of any
obligation under, any material contract, mortgage, indenture, agreement, lease
or other instrument to which LBI Holdings or Buyer is a party or by which it is
bound, or by which it may be affected, or result in the creation of any
Encumbrance on any of its assets, except for agreements, indentures and
instruments related to the financing of the transaction contemplated by this
Agreement, (iii) violate any judgment, decree, order, statute, rule or
regulation applicable to LBI Holdings or Buyer, or (iv) result in the creation
or imposition of any Encumbrance on Station KQQK or the Purchased Assets, except
for liens, charges or encumbrances relating to the financing of the transaction
contemplated by this Agreement.

             5.3   Authorization. All necessary corporate actions and
proceedings to duly approve the execution, delivery and performance of this
Agreement, the Escrow Agreement, the Holdback Escrow Agreement, the Recipient
Agreement, the FM Local Marketing Agreement and other agreements, documents and
instruments being executed by LBI Holdings or Buyer in connection herewith or
therewith and the consummation of the transaction contemplated hereby or thereby
have been duly and validly taken by LBI Holdings and Buyer, and each of this
Agreement, the Escrow Agreement, the Holdback Escrow Agreement, the Recipient
Agreement, the FM Local Marketing Agreement and other agreements, documents and
instruments being executed by LBI Holdings or Buyer in connection herewith or
therewith has been duly and validly authorized, executed and delivered by LBI
Holdings and Buyer and constitutes the legal, valid and binding obligation of
LBI Holdings and Buyer, enforceable against LBI Holdings and Buyer in accordance
with and subject to their respective terms.

             5.4   Brokers. No agent, broker, investment or commercial banker,
person or firm acting on behalf of LBI Holdings or Buyer or under the authority
of LBI Holdings or Buyer is or will be entitled to any broker, finder or
financial advisor fee or any other commission or similar fee directly or
indirectly in connection with the transaction contemplated by this Agreement,
other than Kalil & Co., Inc., whose fee shall be paid by Buyer.

                                       21



             5.5    Qualification as a Broadcast Licensee. Excluding all facts
arising from changes between the date hereof and the KQQK Closing Date to the
radio broadcasting industry generally and any modification during such period of
the FCC rules, regulations or policies affecting all members of the class of
holders of FCC licenses to which Buyer would belong as the holder of KQQK FCC
Licenses or to which Buyer belongs as the holder of its existing FCC licenses,
no fact exists as of the date of this Agreement and as of the KQQK Closing Date,
that would as of the date hereof or as of the KQQK Closing Date, under the
Communications Act, disqualify Buyer as owner, operator and licensee of Station
KQQK. Excluding all requests arising from changes between the date hereof and
the KQQK Closing Date to the radio broadcasting industry generally and any
modification during such period of FCC rules, regulations or policies affecting
all members of the class of holders of FCC licenses to which Buyer would belong
as the holder of KQQK FCC Licenses or to which Buyer belongs as the holder of
its existing FCC licenses, no request for any waiver under the Communications
Act is necessary in order for LBI Holdings or Buyer to obtain a grant of the
KQQK Assignment Application or to consummate the transactions contemplated
hereby.

             5.6    Litigation. There are no suits, legal proceedings or
investigations of any nature pending or, to the knowledge of LBI Holdings or
Buyer, threatened against or affecting it that would affect the ability of LBI
Holdings or Buyer to carry out the transaction contemplated by this Agreement.

             5.7    Approvals and Consents. To knowledge of LBI Holdings or
Buyer, the only approvals or consents of persons or entities not a party to this
Agreement that are legally or contractually required to be obtained by LBI
Holdings or Buyer in connection with the consummation of the transaction
contemplated by this Agreement are identified on Schedule III.

                                   ARTICLE VI
                               COVENANTS OF SELLER

             6.1    Affirmative Covenants of Seller. Between the date hereof and
the KQQK Closing Date, except as disclosed in this Agreement:

             6.1.1  Maintenance. Seller will continue to operate Station KQQK,
             in substantial conformity with past practices, and in conformity
             with the KQQK FCC Licenses and the Communications Act.

             6.1.2  Preserve Relations. Seller will use its commercially
             reasonable efforts (such standard being determined as if Seller
             intended to continue operation of Station KQQK for at least ten
             years from the date of determination) to preserve the business of
             Station KQQK and, where commercially reasonable (such standard
             being determined as if Seller intended to continue operation of
             Station KQQK for at least ten years from the date of
             determination), the good relations with the third parties
             (including but not limited to lessors, advertisers, clients and
             service providers) under all Assumed Contracts, with owners of
             property adjacent to or in the area of the Transmitter Sites, the
             Transmitter Buildings, the Towers, and with advertisers, service
             providers, municipalities and Artlite and its affiliates.

                                       22



             6.1.3  Reasonable Access. In addition to the rights of Buyer under
             the FM Local Marketing Agreement, following reasonable advance
             notification, Seller will provide Buyer and representatives of
             Buyer with reasonable access to the employees and the properties,
             titles, contracts, books, files, logs, records and affairs of
             Station KQQK, and Seller will furnish or will cause to be furnished
             such additional information concerning Station KQQK as Buyer may
             from time to time reasonably request. Seller agrees that a request
             by Buyer at least three business days prior to a visit by personnel
             of Buyer to Station KQQK during such Station's normal business
             hours shall constitute reasonable advance notification and shall
             make best efforts to make available the documents and the personnel
             Buyer indicates that its personnel would like to see during such
             visit. Buyer will maintain the confidentiality of all such
             information in accordance with the terms of confidentiality
             previously agreed to between EDC and Liberman Broadcasting, Inc.
             pursuant to Section 9 of the Letter of Intent as replaced by
             Exhibit J. Buyer shall have the right to make offers of employment
             beginning as of the date hereof to such employees of Seller as
             Buyer may identify in its sole and absolute discretion without
             liability to Seller. Without limiting the generality of the
             foregoing, Seller will promptly (and in any event within two
             business days) deliver to Buyer any information requested by Buyer
             (if applicable, for specified time periods requested by Buyer) that
             is within the scope of information described in Schedule X annexed
             hereto and that is then available (or should reasonably be
             available) to Seller. A copy of the information so requested by
             Buyer shall be delivered to Buyer and a copy of such information
             shall also remain at the office of Seller (at the address set forth
             in Section 11.1) at all times. Seller shall update in its records
             the information described in Schedule X on a timely basis in
             accordance with its past practices. Buyer may request such
             information as often as it chooses. Seller shall comply with the
             provisions of the last paragraph of Schedule X.

             6.1.4  Obtain Consents. Seller will use its best efforts to procure
             the Required Consents.

             6.1.5  Books and Records. Seller will maintain the books and
             records of Station KQQK consistent with past practices.

             6.1.6  Insurance. Seller will maintain in force the existing
             insurance policies identified on Schedule VI or reasonably
             equivalent policies. Seller will use the proceeds of any claims for
             loss payable under such insurance policies to repair, replace, or
             restore any of the Purchased Assets destroyed by fire and other
             casualties to their former condition as soon as possible after the
             loss.

             6.1.7  Notification. Seller will promptly upon Seller's learning of
             the same notify Buyer of any order to show cause, notice of
             violation, notice of apparent liability or of forfeiture or the
             filing or written threat of filing of any complaint against Station
             KQQK or against Seller in connection with Station KQQK, occurring
             between the date hereof and the KQQK Closing Date, and respond to
             any action, order, notice or written complaints, and implement
             procedures to

                                       23



             ensure that the complaints or violations will not recur. Without
             limiting the generality of the foregoing, Seller will also promptly
             upon Seller's learning of the same notify Buyer of any complaint
             being made against Station KQQK relating to its Tower, Transmitter
             Site, Transmitter Building or Seller's operation of such Station
             (including, without limitation, any complaint related to the
             signals broadcast or otherwise transmitted from such Tower, either
             by Seller or by any person subleasing a portion of such Tower but
             not including complaints relating to the programming or content of
             Station KQQK, such complaints which are subject to the first
             sentence of this section). Without limiting the generality of the
             foregoing, Seller will promptly (and in any event within three
             business days) upon Seller's obtaining knowledge of the same notify
             Buyer of (i) any termination of sales orders or threats of
             termination in either case by any advertiser whose orders total
             more than $2,000 per month or by Seller or (ii) the ceasing of
             employment of any employee of Station KQQK who is either an account
             executive or earns more than $30,000 per year.

             6.1.8  Contracts. Seller will provide a copy of any Contract that
             involves more than $2,000 per month or with any service provider or
             advertiser it enters into prior to the KQQK Closing Date (or a
             written description of such Contract, if oral) within five business
             days of entering into such Contract and in any event prior to the
             KQQK Closing Date. Seller will not enter into any Contract after
             the execution of the FM Local Marketing Agreement without the prior
             written consent of Buyer, which consent shall not be unreasonably
             withheld.

             6.1.9  Transition Assistance. Seller will use best efforts (without
             incurring unreasonable costs) to assist Buyer in transitioning
             third party provided services such as utilities, phone service,
             etc. and in transitioning advertisers.

             6.1.10 Assistance in Transfer of Records and Data. Seller will
             fully cooperate with Buyer and make such advance preparations
             (including making copies in advance, collecting paperwork,
             coordinating information about computer systems and configurations)
             as are necessary so that Seller can deliver, and Seller shall
             deliver, the data and records required to be delivered under
             Section 2.1.4 to Buyer (including the transfer of data from
             Seller's computer systems to Buyer's computer systems) on the
             fifteenth business day prior to the Effective Date with title to
             such data and records transferring to Buyer only on the KQQK
             Closing Date; provided, however, that if after Seller's
             commercially reasonable efforts an electronic transfer is not
             possible, the same data may be transferred by Seller by manual
             input on the tenth business day prior to the Effective Date with
             costs of such manual input to be shared between Buyer and Seller.
             Such data and records shall be updated on a daily basis until the
             Effective Date.

                                       24



             6.2    Negative Covenants of Seller. From the date hereof through
consummation of the transaction contemplated hereby on the KQQK Closing Date,
except as contemplated by this Agreement, Seller will not without the prior
written consent of Buyer:

             6.2.1  Encumbrances. Create or assume any Encumbrance on any of the
             Purchased Assets, whether now owned or hereafter acquired, unless
             discharged or terminated and fully released prior to the KQQK
             Closing Date;

             6.2.2  Transfers. Sell, assign, lease or otherwise transfer or
             dispose of any of the Purchased Assets, whether now owned or
             hereafter acquired, except for retirements in the normal and usual
             course of business;

             6.2.3  Call Letters. Change Station KQQK's call letters or modify
             Station KQQK's facilities in any material respect;

             6.2.4  Change in Format or Business. Change Station KQQK's format
             (including but not limited to genre of music, demographic or
             language) or otherwise materially change Station KQQK's business
             model or advertising sales strategy; provided, however, that
             nothing in this Section 6.2.4 is intended to constitute an
             impermissible abrogation of a licensee's responsibilities under the
             Communications Act to maintain control of the operation of Station
             KQQK; provided, further, that actions taken by Buyer pursuant to
             and in compliance with the FM Local Marketing Agreement shall not
             constitute violations of this Section 6.2.4;

             6.2.5  Modification of Contracts. Amend or terminate any of the
             Assumed Contracts (or waive any substantial right thereunder) or
             any advertising contracts that involves more than $2,000 per month;

             6.2.6  Rights. Cancel or compromise any claim or waive or release
             any right of Seller relating to the Purchased Assets, except in the
             ordinary course of business consistent with past practice;

             6.2.7  KQQK FCC Licenses and Permits. Cause or permit, by any act
             or failure on its part, the KQQK FCC Licenses or Permits to expire
             or to be surrendered or modified (unless Buyer has provided prior
             written consent with respect to such modification, which consent
             shall not be withheld unreasonably in the case of modifications
             required pursuant to a casualty event), or take any action which
             would cause the FCC or any other governmental authority to
             institute proceedings for the suspension, revocation or adverse
             modification of any of the KQQK FCC Licenses or Permits, or fail to
             prosecute with due diligence any pending applications to any
             governmental authority in connection with the operation of Station
             KQQK, or take any other action within Seller's control which would
             result in Station KQQK being in non-compliance with the
             requirements of the Communications Act or any other applicable law
             material to the operation of Station KQQK; or

                                       25



             6.2.8  No Inconsistent Action. Take any other action inconsistent
             with its obligations under this Agreement or which could hinder or
             delay the consummation of the transaction contemplated by this
             Agreement.

                                  ARTICLE VII
                              ADDITIONAL AGREEMENTS

             7.1    Determination of KQQK Closing Date. The KQQK Closing Date
shall occur at 5:00 p.m. CST on the 5/th/ business day following the KQQK Final
Grant Day or such other time mutually agreed to in writing by the Parties unless
Buyer has notified Seller by that time that it intends to close on a date
consistent with the following proviso; provided, however, that (i) if on or
prior to the date which otherwise would have been the KQQK Closing Date it
appears in Buyer's reasonable judgment that the KEYH Closing Date could
reasonably be expected to occur within 30 days from the date which would
otherwise have been the KQQK Closing Date, then, if Buyer so chooses in its sole
discretion, the KQQK Closing Date shall be delayed for up to 30 days (as from
time to time specified by Buyer) in order to consummate a Simultaneous Closing,
and (ii) if following a determination to delay the KQQK Closing Date in
accordance with clause (i) of this proviso it is determined that the delay prior
to the KEYH Closing Date will be longer than 30 days from the date which would
otherwise have been the KQQK Closing Date (prior to taking into account any
delay occurring as a result of clause (i) of this proviso), Buyer may cause the
KQQK Closing Date to occur on the 5th business day after giving notice of such
determination to Seller. Notwithstanding anything in the foregoing to the
contrary, Buyer, in its sole discretion, may choose to have the KQQK Closing
Date occur prior to the KQQK Final Grant Day so long as the Initial Grant has
occurred. Buyer shall in that instance choose a date no earlier than 5:00 p.m.
on the 5th business day following notice of such determination to Seller;
provided, however, that Buyer may revoke such determination at any time prior to
the consummation of the transactions contemplated hereby with respect to Station
KQQK, in which case the KQQK Closing Date shall be determined pursuant to the
first sentence of this Section 7.l.

             7.2    Application for Commission Consent; Other Consents;
Pre-Closing.

             7.2.1  FCC Consent; Compliance with Schedule II. Buyer and Seller
             agree to proceed as expeditiously as practical, and in no event
             later than fifteen business days after the execution hereof by
             Buyer and Seller, to file or cause to be filed the KQQK Assignment
             Application requesting FCC consent to the transaction contemplated
             by this Agreement. The Parties agree that the KQQK Assignment
             Application will be prosecuted in good faith and with due
             diligence, including filing and cooperating with all requests of
             the Commission. The Parties acknowledge that this Agreement will
             have to be filed with the FCC. The Parties further acknowledge that
             the KQQK Assignment Application may have to be amended from time to
             time prior to the date it is granted to reflect any changes
             resulting from Buyer's financing and related arrangements. Seller
             shall comply with the requirements set forth in Sections A, B and C
             of Schedule II.

             7.2.2  Other Governmental Consents. Promptly, but not later than
             ten business days following the filing of the KQQK Assignment
             Application, the Parties will

                                       26



             proceed to prepare and file with all other appropriate governmental
             authorities (if any), such other requests for approval or waiver as
             may be required from such governmental authorities to permit the
             transfer of the KQQK FCC Licenses and Permits and the Purchased
             Assets, or as otherwise required in connection with the transaction
             contemplated hereby and will jointly, diligently and expeditiously
             prosecute, and will cooperate fully with each other in the
             prosecution of, such requests for approval or waiver and all
             proceedings necessary to secure such approvals and waivers. The
             Parties hereby acknowledge that no filings will be required under
             the HSRA because both the Purchase Price and the fair market value
             of the Purchased Assets and Assumed Contracts, together with the
             Purchased Assets and Assumed Contracts under the AM Asset Purchase
             Agreement, are less than $50,000,000.

             7.2.3  Control of the Station. This Agreement shall not be
             consummated until the KQQK Closing Date. Prior to the KQQK Closing
             Date, Seller shall continue to control the operation of Station
             KQQK with Buyer's interest in Station KQQK being limited to its
             rights under this Agreement, the KQQK Assignment Application and
             the FM Local Marketing Agreement.

             7.2.4  Preclosing. Buyer and Seller agree to hold a pre-closing
             (delivering to their respective counsel all closing documents to
             which they are a party) on a mutually agreeable date no later than
             at least 3 business days prior to the scheduled KQQK Closing Date.

             7.2.5  Rescission. As Buyer has the option to close the
             transactions contemplated by this Agreement prior to the KQQK Final
             Grant Day, if prior to such time the Initial Grant is reversed or
             otherwise set aside pursuant to a final order of the FCC or the
             final, unappealable order of a court of competent jurisdiction,
             then the parties shall comply with such order in a manner that
             otherwise complies with applicable law and returns the parties to
             the status quo ante in all material respects, including the return
             of the Purchase Price to Buyer and the return of Station KQQK to
             Seller (it being understood that in such event Seller may, within
             the lesser of thirty (30) days or such shorter time as is available
             to allow the Parties to comply with the final order, designate one
             or more third parties, each of whom is qualified, in Seller's
             reasonable belief, to hold the KQQK FCC Licenses in accordance with
             the FCC rules, as the assignees of Station KQQK). In the event a
             third party challenges the KQQK Assignment Application, whether
             prior to or following Initial Grant, the Parties shall cooperate to
             rebut such challenge and, in the event that the Initial Grant is
             set aside as a result of such challenge, the parties shall exhaust
             all administrative and judicial appeals to protect the Initial
             Grant and have it become a final, unappealable grant at all times
             prior to the date on which a Party terminates this Agreement
             pursuant to Section 7.3 or 7.4.

             7.3    Mutual Right to Terminate. Subject to the provisions of
Section 7.6.2, if the purchase and sale transaction contemplated by the FM Asset
Purchase Agreement has not occurred on or before the first anniversary of the
date of this Agreement (or if the effective

                                       27



period of FCC's consent is extended as described in Section 7.6.2 for a certain
number of days due to any damage or event that prevents broadcast transmissions
of Station KQQK, then the date which occurs that many days (but not exceeding in
any event 120 days) after the first anniversary of the date of this Agreement),
either Buyer or Seller, if such Party is not materially in default hereunder in
a manner which has delayed the occurrence of the purchase and sale transaction
contemplated by the FM Asset Purchase Agreement, may terminate this Agreement
upon five days' written notice to the other Party.

             7.4    Buyer's Right to Terminate. Buyer, at its option, may
terminate this Agreement, so long as Buyer is not then in material default under
or material breach of this Agreement, upon the happening of any of the following
events:

             7.4.1  (i) The KQQK FCC Licenses or other Permits are modified as a
             result of any action initiated by Seller without the consent of
             Buyer, whose consent shall not be unreasonably withheld if such
             modification is required pursuant to a casualty event, or (ii) the
             KQQK FCC Licenses or other Permits are unilaterally modified by the
             FCC and such modification results in an adverse change in Buyer's
             ability to operate Station KQQK in a manner consistent with
             Seller's past operations thereof, or (iii) the terms of the KQQK
             FCC Licenses or other Permits are substantially modified resulting
             in an adverse change in Buyer's ability to operate Station KQQK in
             a manner consistent with Seller's past operations thereof;
             provided, however, that Sections 7.4.1(ii) and 7.4.1(iii) shall not
             apply if such modification is a result of a modification of FCC
             rules, regulations or policies affecting all members of the class
             of holders of FCC licenses to which Seller belongs as the holder of
             the KQQK FCC License;

             7.4.2  The KQQK Assignment Application is designated for a hearing
             before an administrative law judge;

             7.4.3  The FCC institutes revocation of license proceedings against
             Station KQQK; or

             7.4.4  Seller is in material breach of this Agreement ten business
             days after notice of breach and has not commenced and continued to
             prosecute diligently a cure therefor or such breach is or becomes
             incurable.

             7.5    Seller's Right to Terminate. Seller, at its option, may
terminate this Agreement, so long as Seller is not then in material default
under or material breach of this Agreement, upon the happening of any of the
following events:

             7.5.1  The KQQK Assignment Application is designated for a hearing
             before an administrative law judge; or

             7.5.2  Buyer is in material breach of this Agreement ten business
             days after notice of breach and has not commenced and continued to
             prosecute diligently a cure therefor or such breach is or becomes
             incurable.

                                       28



             7.6    Risk of Loss.

             7.6.1  The risk of loss and damage, whether by force majeure or for
             any other reason, to the Purchased Assets or the operation of
             Station KQQK between the date of this Agreement and the KQQK
             Closing Date will be on Seller. Seller shall take all reasonable
             steps to repair, replace and restore the Purchased Assets as soon
             as possible after any loss or damage, it being understood and
             agreed that all insurance proceeds with respect thereto
             ("Proceeds") will be applied to or reserved for such replacement,
             restoration or repair, but that Seller will have no obligation to
             repair, replace or restore in excess of the Proceeds (plus any
             applicable deductible payment). In instances where the loss and
             damage to the Purchased Assets, together with any loss or damage to
             the Purchased Assets as defined in the AM Asset Purchase Agreement,
             is less than $1,500,000 in the aggregate (or, if the loss or damage
             is to the tower used in the operation of Station KQQK, then
             $2,500,000 in the aggregate) in Buyer's reasonable estimation,
             Buyer's sole remedy if Seller elects not to (or, with respect to
             the Purchased Assets as defined in the AM Asset Purchase Agreement,
             does not cause Artlite to or causes Artlite not to) fully repair,
             replace or restore will be to close in accordance with Section
             7.6.3 below. In instances where the loss and damage to the
             Purchased Assets, together with any loss or damage to the Purchased
             Assets as defined in the AM Asset Purchase Agreement, is equal to
             or greater than $1,500,000 (net of insurance proceeds to the extent
             received and applied to repair, replace or restore the damaged
             Purchased Assets or the Purchased Assets as defined in the AM Asset
             Purchase Agreement) in the aggregate (or, if the loss or damage is
             to the tower used in the operation of Station KQQK, then $2,500,000
             (net of insurance proceeds to the extent received and applied) in
             the aggregate) in Buyer's reasonable estimation, Buyer's sole
             remedies if Seller elects not to (or , with respect to the
             Purchased Assets as defined in the AM Asset Purchase Agreement,
             does not cause Artlite to or causes Artlite not to) fully repair,
             replace or restore will be (i) to terminate both this Agreement and
             the AM Asset Purchase Agreement, in which case the Escrow Deposit
             will be delivered to LBI Holdings, or (ii) to close in accordance
             with Section 7.6.3 below.

             7.6.2  In the event of any damage or event that prevents broadcast
             transmissions of Station KQQK in the normal and usual manner and
             substantially in accordance with the KQQK FCC Licenses (other than
             scheduled ordinary course maintenance), Seller will give prompt
             notice thereof to Buyer and Buyer, in addition to its other rights
             and remedies, will have the right to postpone the KQQK Closing Date
             until transmission in accordance with the KQQK FCC Licenses has
             been resumed. The postponed KQQK Closing Date will be any date
             within the effective period of the FCC's consent to assignment of
             the KQQK FCC Licenses to LBI Sub as Buyer may designate by not less
             than five business days' prior written notice to Seller. During the
             period of postponement, Seller shall use its best efforts to resume
             broadcast transmissions. In the event transmission in accordance
             with the KQQK FCC Licenses cannot be resumed within the effective
             period of the FCC's consent to assignment of the KQQK FCC Licenses
             to LBI Sub, the Parties will join in an application or applications
             requesting the FCC to

                                       29



             extend the effective period of its consent for one or more periods
             not to exceed 120 days in the aggregate. If transmission in
             accordance with the KQQK FCC Licenses has not been resumed so that
             the KQQK Closing Date does not occur within such extended period,
             or any agreed extension thereof, Buyer will have the right, by
             giving written notice to Seller within five business days after the
             expiration of such 120-day period, or any agreed extension thereof,
             to terminate this Agreement and the AM Asset Purchase Agreement
             forthwith without any further obligation, in which case the Escrow
             Deposit will be delivered to LBI Holdings. In the event
             transmission is not in accordance with the KQQK FCC Licenses but
             substantially in accordance with the KQQK FCC Licenses, Buyer
             agrees to negotiate in good faith with Seller for no more than
             twenty business days prior to exercising its rights under this
             Section (which negotiation shall not result in an extension of the
             120 day period).

             7.6.3  If any loss of or damage to the Purchased Assets (including
             but not limited to any Tower or any Transmitter Building) occurs
             prior to the KQQK Closing Date and full repair, replacement or
             restoration of all Purchased Assets has not been made on or before
             the KQQK Closing Date (as the KQQK Closing Date may be extended as
             provided in Section 7.6.2), or the cost thereof is greater than the
             Proceeds (plus any applicable deductible), then Buyer will be
             entitled, but not obligated (except in the instances described in
             the second to the last sentence in Section 7.6.1), to accept the
             Purchased Assets in their then-current condition and will receive
             an abatement or reduction in the Purchase Price in an amount equal
             to the difference between the amount necessary to fully repair or
             replace the damaged Purchased Assets and the amount of the unused
             Proceeds, in which case Buyer will be entitled to all the unused
             Proceeds and payment of the deductible amount. If Buyer elects to
             accept (or, in the instance described in the second to the last
             sentence in Section 7.6.1, Buyer accepts) damaged Purchased Assets
             at a reduced Purchase Price, the Parties agree to cooperate in
             determining the amount of the reduction to the Purchase Price in
             accordance with the provisions hereof.

             7.7    Transfer Taxes and FCC Filings; Expenses; Bulk Sales.

             7.7.1  Transfer Taxes; FCC Filings. All federal, state or local
             taxes based on excise, sales or use taxes or similar taxes or costs
             imposed on or in connection with the sale, purchase or transfer of
             the Purchased Assets and assumption of the Assumed Contracts by
             Buyer pursuant hereto will be borne one-half by Buyer and one-half
             by Seller; provided, however, if the representation by Seller made
             pursuant to the last sentence of Section 4.4 should be false, all
             such taxes payable by Buyer shall be considered a loss resulting
             from breach of such representation by Seller and be subject to
             indemnification pursuant to Article X. All FCC filing fees relating
             to the KQQK Assignment Application will be shared equally by Buyer
             and Seller. Buyer shall be responsible for the payment of the
             filing fees in connection with the filing (if any) required under
             the HSRA.

             7.7.2  Expenses. Except as otherwise provided herein, Buyer and
             Seller shall each pay its own expenses incident to the negotiation,
             preparation and

                                       30



             performance of this Agreement and consummation of the transaction
             contemplated hereby, including but not limited to the fees,
             expenses and disbursements of its accountants and counsel.

             7.7.3  Compliance With Bulk Sales Laws. If applicable, any loss,
             liability, obligation or cost suffered by Seller or Buyer as the
             result of the failure of Seller or Buyer to comply with the
             provisions of any bulk sales laws applicable to the transfer of the
             Purchased Assets as contemplated by this Agreement will be borne
             one-half by Buyer and one-half by Seller.

             7.8    Invoices. If advertisers whose advertisements air on Station
KQQK on or after the Effective Date make payments prior to, on or after the
consummation of the transactions contemplated by this Agreement to Seller rather
than to Buyer with respect to such advertisements, Seller shall hold such
amounts in trust for Buyer, shall promptly notify Buyer of the receipt of such
funds and shall forward such amounts to Buyer within 5 business days. If
advertisers whose advertisements aired on Station KQQK prior to the Effective
Date make payments prior to, on or after the consummation of the transactions
contemplated by this Agreement to Buyer rather than to Seller with respect to
such pre-Effective Date advertisements, Buyer shall hold such amounts in trust
for Sellers, shall promptly notify Sellers of the receipt of such funds and
shall forward such amounts to Sellers within 5 business days.

             7.9    Access to Microwave Facilities. Buyer shall have the right
to transmit programming to the Microwave Facility by telephone line and Sellers
will perform all maintenance on the Microwave Facility after the KQQK Closing
Date at Buyer's direction.

             7.10   Recipient Agreement. Seller shall use its best efforts to
cause all Sales Proceeds Recipients to promptly after the date hereof execute
and deliver the Recipient Agreement.

                                  ARTICLE VIII
                               CLOSING CONDITIONS

             8.1    Conditions Precedent to Buyer's Obligations. The obligation
of Buyer to consummate the transaction contemplated hereby is subject to the
fulfillment prior to and as of the consummation of the transaction contemplated
hereby on the KQQK Closing Date of each of the following conditions, each of
which may be waived (but only by an express written waiver) in the sole
discretion of Buyer:

             8.1.1  Commission Approval. The definition of KQQK Closing Date
             shall have been satisfied.

             8.1.2  Representations and Warranties. All representations and
             warranties of Seller contained in this Agreement shall be true and
             correct in all material respects at and as of the KQQK Closing Date
             as if made on the KQQK Closing Date except as specifically
             contemplated by this Agreement.

             8.1.3  Performance. Seller shall have performed and complied in all
             material respects with the covenants, agreements and conditions
             required by this

                                       31



             Agreement to be performed or complied with by it prior to and on
             the KQQK Closing Date.

             8.1.4  FCC Licenses. Seller shall be the holder of the KQQK FCC
             Licenses. There shall not have been any modification of any of the
             KQQK FCC Licenses (excluding any modification of FCC rules,
             regulations or policies affecting all members of the class of
             holders of KQQK FCC licenses to which Seller belongs as the holder
             of the KQQK FCC Licenses) that affects Buyer's ability to conduct
             the operation of Station KQQK after the KQQK Closing Date in
             accordance with Seller's past operations or that otherwise has or
             is reasonably likely to have a material, adverse effect on Station
             KQQK. No proceeding shall be pending, the effect of which would be
             to revoke, cancel, fail to renew, suspend, impair or modify
             adversely any of the KQQK FCC Licenses specifically.

             8.1.5  Consents. All Required Consents shall have been obtained and
             delivered to Buyer. Such Required Consents shall include, without
             limitation, (i) executed consents and releases substantially in the
             form of Exhibit H annexed hereto from creditors of Seller listed on
             Schedule III consenting to the transaction contemplated hereby and
             releasing their Encumbrances relating to the Purchased Assets
             (together with executed UCC termination statements, amendments to
             UCC financing statements and other documents and instruments
             implementing such release) and (ii) other Required Consents in form
             and substance reasonably satisfactory to Buyer. In addition, the
             lessors under the leases for the Transmitter Sites shall have
             executed and delivered to Buyer estoppels in substantially the form
             attached to this Agreement as Exhibit F together with such changes
             as may reasonably be negotiated by the Parties with respect to each
             lease (including confirmation that each lease is in full force and
             effect and no defaults exist thereunder and confirmation of the
             terms of each lease).

             8.1.6  Litigation and Insolvency. Except for matters affecting the
             radio broadcasting industry generally, no litigation, action, suit,
             judgment, proceeding, complaint or investigation shall be pending
             or outstanding before any forum, court, or governmental body,
             department or agency of any kind, relating to the operation of
             Station KQQK or which has the stated purpose or the probable effect
             of enjoining or preventing the consummation of this Agreement, or
             the transaction contemplated hereby or to recover damages by reason
             thereof, or which questions the validity of any action taken or to
             be taken pursuant to or in connection with this Agreement; provided
             that if there is pending any litigation relating to Station KQQK
             that could not reasonably be expected to or would not reasonably be
             expected to adversely affect the operation of Station KQQK in
             accordance with Seller's past operations or that could not
             reasonably be expected to or would not reasonably be expected to
             prevent a consummation of the transactions contemplated hereby,
             then the existence of such litigation shall not be considered as
             the failure of a condition to Buyer's obligation to close if its
             lenders agree to fund the loans that enable the consummation of the
             transactions contemplated hereby despite the existence of such
             litigation (and LBI Holdings, Buyer and Seller shall cooperate to
             seek to convince such lenders (but shall not be obligated

                                       32



             to mislead such lenders in any way) to fund such loans despite the
             existence of such litigation). No insolvency proceedings of any
             character including, without limitation, receivership,
             reorganization, composition or arrangement with creditors,
             voluntary or involuntary, affecting Seller or any of its assets or
             properties (other than the stock of its subsidiaries (other than
             any subsidiary that is a Seller hereunder)), shall be pending, and
             Seller shall not have taken any action in contemplation of, or
             which would constitute the basis for, the institution of any such
             insolvency proceedings.

             8.1.7  Recipient Agreement. No parties to the Sale Proceeds
             Recipients (other than LBI Holdings and Buyer) shall be in breach
             of the Recipient Agreement.

             8.1.8  Holdback Escrow Agreement. The Holdback Escrow Agent and
             Seller shall have executed and delivered the Holdback Escrow
             Agreement.

             8.1.9  Satisfaction of Schedule II. The requirement in Section A of
             Schedule II shall be satisfied.

             8.2    Conditions Precedent to Seller's Obligations. The obligation
of Seller to consummate the transaction contemplated hereby is subject to the
fulfillment prior to and as of the consummation of the transaction contemplated
hereby on the KQQK Closing Date of each of the following conditions, each of
which may be waived (but only by an express written waiver) in the sole
discretion of Seller:

             8.2.1  Commission Approval. The condition set forth in Section
             8.1.1 shall have been satisfied.

             8.2.2  Representations and Warranties. All representations and
             warranties of LBI Holdings and Buyer contained in this Agreement
             shall be true and correct in all material respects at and as of the
             KQQK Closing Date as if made on the KQQK Closing Date, except as
             specifically contemplated by this Agreement.

             8.2.3  Performance. LBI Holdings and Buyer shall each have
             performed and complied in all material respects with the covenants,
             agreements and conditions required by this Agreement to be
             performed or complied with by it prior to and at the KQQK Closing
             Date.

             8.2.4  Litigation and Insolvency. Except for matters affecting the
             radio broadcasting industry generally, no litigation, action, suit,
             judgment, proceeding, complaint or investigation shall be pending
             or outstanding before any forum, court or governmental body,
             department or agency of any kind which has the stated purpose or
             the probable effect of enjoining or preventing the consummation of
             this Agreement or the transaction contemplated hereby or to recover
             damages by reason thereof, or which questions the validity of any
             action taken or to be taken pursuant to or in connection with this
             Agreement; provided that if there is pending any litigation
             relating to Station KQQK that could not reasonably be expected to
             or would not  reasonably  be  expected  to  adversely  affect the
             operation  of  Station  KQQK in  accordance  with  Seller's  past
             operations or that could not

                                       33



             reasonably be expected to or would not reasonably be expected to
             prevent a consummation of the transactions contemplated hereby then
             the existence of such litigation shall not be considered as the
             failure of a condition to Seller's obligation to close if Buyer's
             lenders agree to fund the loans that enable the consummation of the
             transactions contemplated hereby despite the existence of such
             litigation (and LBI Holdings, Buyer and Seller shall cooperate to
             seek to convince such lenders (but shall not be obligated to
             mislead such lenders in any way) to fund such loans despite the
             existence of such litigation). No insolvency proceedings of any
             character including, without limitation, reorganization,
             receivership, composition or arrangement with creditors, voluntary
             or involuntary, affecting Buyer or any of its assets or properties
             shall be pending, and Buyer shall not have taken any action in
             contemplation of, or which would constitute the basis for, the
             institution of any such insolvency proceedings.

                                   ARTICLE IX
                      ITEMS TO BE DELIVERED AT THE CLOSING

             9.1    Seller's Performance At Closing. On the KQQK Closing Date,
at the Closing Place (i) Seller shall have executed and delivered the
assignments relating to the KQQK FCC Licenses and the Permits and all
applications therefor, together with any renewals, extensions, additions or
modifications thereof, (ii) Seller shall have executed and delivered to Buyer
all bills of sale, endorsements, assignments and other instruments of conveyance
and transfer reasonably satisfactory in form and substance to Buyer and its
counsel, effecting the sale, transfer, assignment and conveyance of the
Purchased Assets to Buyer. Without limiting the generality of the foregoing,
Seller shall have executed and delivered (or caused to be executed and
delivered) or shall have transferred or performed, as applicable, the following:

             9.1.1  One or more bills of sale conveying to LBI all of the
             Tangible Personal Property and Intellectual Property to be acquired
             by Buyer hereunder;

             9.1.2  An assignment assigning to LBI Sub the KQQK FCC Licenses
             from Seller;

             9.1.3  An assignment assigning to LBI each of the Assumed Contracts
             together with the Required Consents and the original copies of the
             Assumed Contracts;

             9.1.4  To the extent not previously transferred pursuant to Section
             6.1.10, the data, documents, copies, files, records and logs
             referred to in Section 2.1.4 and Seller shall have transferred data
             from Seller's computer systems to Buyer's computer systems on or
             prior to the KQQK Final Grant Day;

             9.1.5  Proof of payment of prepaid expenses made by Seller for
             services to be provided to Station KQQK, after the KQQK Closing
             Date under the Assumed Contracts;

             9.1.6  Seller shall have paid LBI an amount equal to the aggregate
             advance payments by advertisers and other advance payments for
             services to be provided

                                       34



             by Station KQQK after the KQQK Closing Date under the Assumed
             Contracts (calculated as of 5 days before, and updated as of, the
             KQQK Closing Date);

             9.1.7  Opinions of Seller's counsel, Seller's Texas counsel and
             Seller's FCC counsel, each dated as of the KQQK Closing Date
             substantially in the form of Exhibits "B-1", "B-2" and "C";

             9.1.8  Copies of resolutions of the Board of Directors of EDC, EDC
             Sub and EDC License Sub, in each case certified by the Party's
             Secretary, authorizing the execution, delivery and performance of
             this Agreement and the transaction contemplated hereby;

             9.1.9  A certificate, dated as of the KQQK Closing Date, executed
             by the President and Chief Executive Officer of Seller, to the
             effect that, (i) the representations and warranties of Seller
             contained in this Agreement are true and complete in all material
             respects on and as of the KQQK Closing Date as though made on and
             as of the KQQK Closing Date, except as specifically contemplated by
             this Agreement; (ii) Seller has complied in all material respects
             with or performed in all material respects all terms, covenants,
             agreements and conditions required by this Agreement to be complied
             with or performed by it prior to and at the KQQK Closing Date;
             (iii) all Required Consents have been obtained by Seller and
             delivered to Buyer; (iv) except for matters affecting the radio
             broadcasting industry generally and except for such litigation
             described in the proviso in Section 8.1.6, each of which has been
             disclosed in writing to Buyer, no litigation, action, suit,
             judgment, proceeding or investigation is pending or outstanding or,
             to the knowledge of Seller, threatened, before any forum, court, or
             governmental body, department or agency of any kind, relating to
             the operation of Station KQQK or which has the stated purpose or
             the probable effect of enjoining or preventing the consummation of
             this Agreement or the transaction contemplated hereby or to recover
             damages by reason thereof, or which questions the validity of any
             action taken or to be taken pursuant to or in connection with this
             Agreement; (v) to the knowledge of Seller, no insolvency
             proceedings of any character including, without limitation,
             receivership, reorganization, composition or arrangement with
             creditors, voluntary or involuntary, affecting Seller or any of its
             respective material assets or properties is pending, and Seller has
             not taken any action in contemplation of, or which would constitute
             the basis for, the institution of any such insolvency proceedings;
             (vi) the aggregate amount of advance payments by advertisers and
             other advance payments for services to be provided by or for
             Station KQQK after the KQQK Closing Date under the Assumed
             Contracts referred to in Section 2.1.2 equals the amount paid to
             Buyer pursuant to Section 9.1.6, and (vii) Seller has performed the
             requirements of this Section 9.1;

             9.1.10 Written instructions to deliver $1,000,000 and related
             interest (in the case of an FM Only Closing in which the AM Asset
             Purchase Agreement has not theretofore been terminated or is not
             terminated on such day) or the entire Escrow Deposit (in the case
             of a Simultaneous Closing or in the case of an FM Only Closing in
             which the AM Asset Purchase Agreement has theretofore been

                                       35



             terminated or is terminated on such day) to LBI Holdings executed
             by EDC and, in the case where the entire Escrow Deposit is
             delivered to LBI Holdings, such instructions shall also include
             instructions to terminate the Escrow Agreement; and

             9.1.11 Such other instruments of transfer, documents or
             certificates requested by Buyer as may be necessary or appropriate
             to transfer to and vest in Buyer all of Seller's right, title and
             interest in and to the Purchased Assets or as reasonably may be
             requested by Buyer to evidence consummation of this Agreement and
             the transaction contemplated hereby.

             9.2    Buyer's Performance at Closing. On the KQQK Closing Date at
the Closing Place, Buyer will execute and deliver or cause to be delivered to
Seller:

             9.2.1  The monies payable as set forth in Section 3.1.1 by wire
             transfer of federal funds;

             9.2.2  An opinion of Buyer's counsel dated as of the KQQK Closing
             Date substantially in the form of Exhibit "D";

             9.2.3  Copies of resolutions of the Boards of Directors of LBI
             Holdings, LBI and LBI Sub, in each case certified by its Secretary,
             authorizing the execution, delivery and performance of this
             Agreement and the transaction contemplated hereby;

             9.2.4  A certificate, dated as of the KQQK Closing Date, executed
             by the Executive Vice President of LBI Holdings and Buyer, to the
             effect that (i) the representations and warranties of LBI Holdings
             and Buyer contained in this Agreement are true and complete in all
             material respects on and as of the KQQK Closing Date as though made
             on and as of the KQQK Closing Date, except as specifically
             contemplated by this Agreement; (ii) LBI Holdings and Buyer have
             each complied in all material respects with or performed in all
             material respects all terms, covenants, agreements and conditions
             required by this Agreement to be complied with or performed by it
             prior to and at the KQQK Closing Date; (iii) except for matters
             affecting the radio broadcasting industry generally and except for
             such litigation described in the proviso in Section 8.2.4, no
             litigation, action, suit, judgment, proceeding or investigation is
             pending or outstanding or, to LBI Holdings' and Buyers' knowledge,
             threatened, before any forum, court or governmental body,
             department or agency of any kind which has the stated purpose or
             the probable affect of enjoining or preventing the consummation of
             this Agreement or the transaction contemplated hereby or to recover
             damages by reason thereof, or which questions the validity of any
             action taken or to be taken pursuant to or in connection with this
             Agreement; (iv) to the knowledge of LBI Holdings and Buyer, no
             insolvency proceedings of any character including, without
             limitation, receivership, reorganization, composition or
             arrangement with creditors, voluntary or involuntary, affecting LBI
             Holdings or Buyer or any of their respective assets or properties
             is pending, and neither LBI Holdings nor

                                       36



             Buyer has taken any action in contemplation of, or which would
             constitute the basis for, the institution of any such insolvency
             proceedings, and (v) LBI Holdings and Buyer have each performed the
             requirements of this Section 9.2,

             9.2.5  A writing evidencing the assumption by Buyer of each of the
             Assumed Contracts consistent with the provisions of this Agreement
             reasonably satisfactory in form and substance to Seller and its
             counsel; and

             9.2.6  Such other instruments, documents and certificates as
             reasonably may be requested by Seller to consummate this Agreement
             and the transaction contemplated hereby.

                                   ARTICLE X
                                 INDEMNIFICATION

             10.1   Indemnification by Seller. It is understood and agreed that
LBI Holdings and Buyer do not assume and will not be obligated to pay any
liability of Seller under the terms of this Agreement or otherwise and will not
be obligated to perform any obligations of Seller of any kind or manner, except
in connection with the Assumed Contracts and with respect thereto only to the
extent such obligations arise subsequent to the consummation of the transaction
contemplated hereby on the KQQK Closing Date. Seller, hereby agrees to
indemnify, defend and hold harmless LBI Holdings and Buyer, their successors and
assigns, for a period of eighteen months following the consummation of the
transaction contemplated hereby on the KQQK Closing Date, from and against:

             10.1.1 Any and all Damages occasioned by, arising out of or
             resulting from the operation of Station KQQK prior to the KQQK
             Closing Date (other than such Damages arising directly from Buyer's
             actions under the FM Local Marketing Agreement), including, but not
             limited to, any and all claims, liabilities and obligations arising
             or required to be performed prior to the KQQK Closing Date under
             any of the Assumed Contracts or otherwise with respect to Seller's
             ownership and operation of Station KQQK prior to the KQQK Closing
             Date;

             10.1.2 Any and all Damages occasioned by, arising out of or
             resulting from any material misrepresentation, material breach of
             warranty or covenant, or material default or material
             nonfulfillment of any agreement on the part of Seller under this
             Agreement, or from any material misrepresentation in or material
             breach of any certificate, agreement, appendix, Schedule, or other
             instrument furnished to LBI Holdings or Buyer pursuant to this
             Agreement or in connection with the transaction contemplated
             hereby; provided, that any breach of Section 7.8 shall be deemed
             material regardless of the cash value of such breach; and

             10.1.3 Any and all Damages occasioned by, arising out of or
             resulting from any legal, administrative, or tax proceedings
             pursuant to which Seller is or could be made liable for any taxes,
             penalties, interest, or other charges and the liability for which
             is extended to LBI Holdings or Buyer as transferee of the business
             of

                                       37



             Station KQQK or otherwise for any transferee liability for any
             taxes, penalties, or interest due or to become due from Seller.

             10.2   Indemnification by LBI Holdings and Buyer. LBI Holdings and
Buyer agree to indemnify, defend and hold harmless Seller, its successors and
assigns, for a period of eighteen months following the consummation of the
transaction contemplated hereby on the KQQK Closing Date from and against:

             10.2.1 Any and all Damages occasioned by, arising out of or
             resulting from the operation of Station KQQK on or subsequent to
             the KQQK Closing Date, including, but not limited to, any and all
             claims, liabilities and obligations arising or required to be
             performed on or subsequent to the KQQK Closing Date under any of
             the Assumed Contracts or otherwise with respect to Buyer's
             ownership and operation of Station KQQK from and after the KQQK
             Closing Date; and

             10.2.2 Any and all Damages occasioned by, arising out of or
             resulting from any material misrepresentation, material breach of
             warranty or covenant, or material default or material
             nonfulfillment, of any agreement on the part of LBI Holdings or
             Buyer under this Agreement, or from any material misrepresentation
             in or material breach of any certificate, agreement, appendix,
             Schedule or other instrument furnished to Seller pursuant to this
             Agreement or in connection with the transaction contemplated
             hereby; provided, that any breach of Section 7.8 shall be deemed
             material regardless of the cash value of such breach.

             10.3   Third-Party Claims. In the event of third party claims, each
Party ("Indemnified Party") shall give written notice to the other Party
("Indemnifying Party") as soon as practicable and in no event later than ten
business days after the Indemnified Party has knowledge of any facts which in
its opinion entitle or may entitle it to indemnification under this Section
10.3. Seller, on the one hand, and LBI Holdings and Buyer, on the other, shall
be considered a single Party for purposes of this Section 10.3 and Section 10.4.
However, failure to give such notice will not preclude the Indemnified Party
from seeking indemnification hereunder, unless, and to the extent that, such
failure adversely affects to a material degree the Indemnifying Party's ability
to defend against such a claim. The Indemnifying Party will promptly defend such
a claim by counsel approved by the Indemnified Party, which approval shall not
be unreasonably withheld, and the Indemnified Party may appear at any
proceeding, at its own cost, by counsel of its own choosing and will otherwise
reasonably cooperate in the defense of such claim, provided that the
Indemnifying Party shall promptly reimburse the Indemnified Party all reasonable
costs, expenses and attorneys' fees incurred in the course of cooperating in the
defense of such claim. The Indemnifying Party shall be responsible for all costs
and expenses of any settlement. If the Indemnifying Party within ten business
days after notice of a claim fails to defend the Indemnified Party, the
Indemnified Party will be entitled to undertake the defense, compromise or
settlement of such claim at the expense of and for the account and risk of the
Indemnifying Party. Anything in this Section to the contrary notwithstanding:

             10.3.1 If LBI Holdings or Buyer is the Indemnified Party and in the
             reasonable judgment of LBI Holdings or Buyer there is a reasonable
             probability that a claim

                                       38



             may materially and adversely affect the Indemnified Party or its
             continued operation of Station KQQK, the Indemnified Party will
             have the right, at its own cost and expense, to undertake the
             prosecution, compromise and settlement of such claim, and the
             Indemnifying Party will cooperate with the Indemnified Party;

             10.3.2 If the facts giving rise to indemnification hereunder
             involve a possible claim by the Indemnified Party against a third
             party, the Indemnified Party will have the right, at its own cost
             and expense, to undertake the prosecution, compromise and
             settlement of such claim; and

             10.3.3 The Indemnifying Party will not, without the consent of the
             Indemnified Party, enter into or settle or compromise any claim or
             consent to any entry of judgment which (i) in the reasonable
             judgment of LBI Holdings or Buyer may materially and adversely
             affect LBI Holdings or Buyer or their continued operation of
             Station KQQK, and (ii) does not include as an unconditional term
             thereof the giving by the claimant or the plaintiff to the
             Indemnified Party of a full and complete release from all liability
             in respect to such claim.

             10.4   Cap and Basket. Neither Party will be entitled to
indemnification under this Article X until Damages to such Party (combined with
any Damages to such Party under the AM Purchase Agreement) exceed $50,000 in the
aggregate (except for claims pursuant to Section 7.8 of this Agreement and
Section 7.9 of the AM Asset Purchase Agreement, which shall be reimbursed from
the first dollar for both parties). Once Damages to any Party (combined with any
Damages to such Party under the AM Purchase Agreement) exceed $50,000 in the
aggregate (excluding all claims made pursuant to Section 7.8 of this Agreement
and Section 7.9 of the AM Asset Purchase Agreement), such Party will be entitled
to recover the entire amount of the Damages to the maximum extent permitted by
this Agreement. The Parties agree that any materiality qualification set forth
in this Agreement shall not be taken into account in determining the magnitude
of Damages occasioned by any breach for purposes of calculating whether such
$50,000 threshold has been reached. The Parties agree that (i) with respect to
all claims made pursuant to Article X hereof or Article X of the AM Asset
Purchase Agreement during the period beginning on the date of consummation of
the transactions contemplated by the FM Asset Purchase Agreement on the KQQK
Closing Date and ending on the twelve month anniversary of such date, the
maximum aggregate amount for which either Buyer and LBI Holdings on the one hand
or Seller on the other hand will be responsible for pursuant to this Agreement
and, if the purchase and sale transaction contemplated by the AM Asset Purchase
Agreement occurs, the AM Asset Purchase Agreement, is $1,500,000 in the
aggregate and (ii) with respect to all claims made pursuant to Article X hereof
or Article X of the AM Asset Purchase Agreement during the period commencing on
the date after the end of the applicable period set forth in clause (i) of this
sentence and ending on the twenty four month anniversary of the consummation of
the transaction contemplated by the AM Asset Purchase Agreement (or if the
purchase and sale transaction contemplated under the AM Asset Purchase Agreement
does not occur, ending on the later of (x) the eighteenth month anniversary of
the KQQK Closing Date or (y) the date on which the AM Asset Purchase Agreement
is terminated), the maximum aggregate amount for which either Buyer and LBI
Holdings on one hand or Seller on the other hand will be responsible for
pursuant to this Agreement and, if the purchase and sale transaction
contemplated by the AM Asset Purchase Agreement occurs, the AM Asset Purchase
Agreement,

                                       39



is $700,000 (above and beyond up to $800,000 of claims made during the period
set forth in clause (i) of this sentence) (it being understood that
notwithstanding the preceding portion of this clause (ii), neither Buyer and LBI
Holdings on the one hand nor Seller on the other hand will be responsible for
any claims made after the eighteen month anniversary of the consummation of the
transaction contemplated by this Agreeement pursuant to Article X hereof and
that the maximum aggregate amount for which either Buyer and LBI Holdings on one
hand or Seller on the other hand will be responsible for pursuant to this
Agreement with respect to claims made during the six month period between the
twelve month anniversary and the eighteen month anniversary of the consummation
of the transaction contemplated by this Agreement under this Article X is
$500,000 (above and beyond up to $1,000,000 of claims made during the period set
forth in clause (i) of this sentence)); provided that the caps set forth in this
paragraph shall not apply to any claims made under the AM Asset Purchase
Agreement prior to the consummation of the transaction contemplated thereunder
on the KEYH Closing Date.

             10.5   Holdback. LBI Holdings and Buyer shall be entitled to
receive any amounts owing by Seller to LBI Holdings or Buyer pursuant to this
Agreement or the AM Asset Purchase Agreement (including Article X hereof and
thereof) from the Holdback and Seller agrees to promptly give the Holdback
Escrow Agent written instructions to immediately release such amounts from the
Holdback to LBI Holdings. Buyer agrees to promptly give the Holdback Escrow
Agent written instructions to immediately release the amounts as determined by
Sections 3.1.4(c) and 3.1.4(d) in this Agreement to the extent Seller is
entitled to receive such amounts.

             10.6   Survival of Representations and Warranties. The
representations and warranties contained in this Agreement or in any Schedule or
Exhibit, or in any certificate or other instrument delivered pursuant to this
Agreement, will survive the consummation of the transaction contemplated hereby
on the KQQK Closing Date for a period of eighteen months; provided that if a
claim or notice is given under this Article X or otherwise with respect to any
such representation and warranty prior to such expiration date, such claim shall
continue (and such representation and warranty shall survive) indefinitely until
such claim is finally resolved.

                                   ARTICLE XI
                            MISCELLANEOUS PROVISIONS

             11.1   Notices. All notices, demands and requests, required or
permitted to be given under the provisions of this Agreement shall be in writing
and will be deemed duly given if received on a business day by facsimile at the
facsimile numbers below and telephone notification is provided by the sending
Party to the receiving Party at the time of the facsimile that such notice is
about to be sent (it being understood that a voice mail left on answering
machines shall be deemed to satisfy the requirement of such telephone
notification):

                                       40



             If to Seller:

                    Roel Campos, Esq.
                    El Dorado Communications
                    1980 Post Oak Boulevard, Suite 1500
                    Houston, TX 77058
                          Phone: (713) 968-4500
                          Fax: (713) 968-4518

             Copy (which shall not, by itself, constitute notice) to:

                    Allan Duboff, Esq.
                    Richman, Mann, Chizever, Phillips & Duboff
                    9601 Wilshire
                    Penthouse Suite
                    Beverly Hills, CA 90210
                          Phone: (310) 274-8300
                          Fax: (310) 274-2831

                    Lawrence Roberts, Esq.
                    Skadden, Arps, Slate, Meagher & Flom LLP
                    1440 New York Avenue, N.W.
                    Washington, D.C. 20005
                          Phone: (202) 371-7040
                          Fax: (202) 393-5760

             If to LBI Holdings or Buyer:

                    Mr. Lenard D. Liberman
                    Executive Vice President
                    Liberman Broadcasting Inc.
                    1845 Empire Avenue
                    Burbank, California 91504
                          Phone: BOTH (818) 563-5722 and
                                 (281) 493-2900
                          Fax: BOTH (818) 558-4244 and
                               (281) 759-3963

             Copy (which shall not, by itself, constitute notice) to:

                    Joseph K. Kim, Esq.
                    O'Melveny & Myers LLP
                    400 South Hope Street, 15/th/ Floor
                    Los Angeles, California 90071
                          Phone: (213) 430-6000
                           Fax: (213) 430-6407

                                       41



Or any other such facsimile numbers, telephone numbers and addresses as any
Party may from time to time supply in writing to the other Parties.

             11.2   Benefit and Assignment. This Agreement will be binding upon
and inure to the benefit of the Parties, and their respective successors and
assigns. This Agreement will not be assignable by a Party without the prior
written consent of all of LBI Holdings, Buyer and Seller; provided, however,
that LBI Holdings and Buyer may assign their rights and obligations hereunder
without Seller's consent to any party that is majority owned, directly or
indirectly, by LBI Holdings and LBI Holdings and Buyer may assign their rights
hereunder, without Seller's consent, to any of their lenders (provided that such
assignment to such lenders does not violate the Communications Act and does not
delay the KQQK Closing Date).

             11.3   Other Documents. The Parties will execute such other
documents as may be reasonably necessary and desirable to the implementation and
consummation of this Agreement.

             11.4   Appendices. All Schedules and Exhibits are deemed to be part
of this Agreement and incorporated herein, where applicable, as if fully set
forth herein. Whenever, by the terms of this Agreement or any subsequent
agreement of the Parties, any additions or deletions are made to the Purchased
Assets shown on the Schedules, the Schedules affected shall be appropriately
modified to reflect those changes.

             11.5   Construction. This Agreement will be governed, construed and
enforced in accordance with the laws of the State of Texas.

             11.6   Arbitration. Any dispute, controversy or other matters as to
which the Parties disagree arising out of, relating to or in connection with the
provisions of this Agreement or the interpretation, breach or alleged breach
hereof shall be settled and decided by arbitration conducted by the Judicial
Arbitration and Mediation Service ("JAMS"), subject to the following:

             11.6.1 Any arbitration as set forth above shall be held and
             conducted in Houston, Texas before one arbitrator who shall be
             selected by mutual agreement of the parties. If agreement is not
             reached on the selection of the arbitrator within 30 days after
             commencement of an arbitration by (i) submission of a matter to the
             JAMS in accordance with its Commercial Arbitration Rules and (ii)
             notice to the other party of the initiating party's intention to
             arbitrate, then such arbitrator shall be appointed by the presiding
             judge of the appropriate Houston, Texas Court.

             11.6.2 The arbitrator appointed must be a former or retired judge,
             or an attorney with at least 15 years experience in the broadcast
             radio industry.

             11.6.3 All proceedings involving the parties shall be reported by a
             certified shorthand court reporter and written transcripts of the
             proceedings shall be prepared and made available to the parties.

             11.6.4 The prevailing party shall be awarded reasonable attorneys'
             fees, expert and non-expert witness costs and expenses, and other
             costs and expenses incurred

                                       42



             in connection with the arbitration unless the arbitrator, for good
             cause, determines otherwise.

             11.6.5 The dispute shall be heard in accordance with the rules and
             procedures of JAMS and the arbitrator's decision and award shall be
             final and binding.

             11.6.6 Costs and fees of the arbitrator (including the cost of the
             record of transcripts of the arbitration) shall be borne by the
             non-prevailing party, unless the arbitrator for good cause
             determines otherwise. Costs and fees payable in advance shall be
             advanced equally by the parties, subject to ultimate payment by the
             non-prevailing party in accordance with the preceding sentence.

             11.6.7 Any Party may initiate an arbitration proceeding under this
             Section 11.6 by written notice to the other Party of his or its
             intention to arbitrate, specifying the dispute or controversy to be
             arbitrated, the amount involved and the remedy sought, and by
             filing with the Dallas, Texas office of the JAMS a copy of said
             notice together with a copy of this Agreement and the fee specified
             in the JAMS fee schedule. In no event shall a demand for
             arbitration be made after the date when institution of legal or
             equitable proceedings based on the claim, dispute or other matter
             in question would be barred by the applicable statute of
             limitations.

             11.6.8 This agreement to arbitrate shall be specifically
             enforceable under applicable law in any court of competent
             jurisdiction. The award rendered by the arbitrator shall be final
             and judgment may be entered in accordance with applicable law and
             in any court having jurisdiction thereof.

             11.6.9 Notwithstanding anything contained in this Agreement
             elsewhere to the contrary, and unless modified by the arbitrator
             upon a showing of good cause, the arbitration shall proceed upon
             the following schedule: (i) within 30 days from the service of the
             notice of the request to arbitrate, the parties shall select the
             arbitrator; (ii) within 30 days after selection of the arbitrator,
             the parties shall conduct a pre-arbitration conference at which a
             schedule of pre-arbitration discovery shall be set, all
             pre-arbitration motions scheduled and any other necessary
             pre-arbitration matters decided; (iii) all discovery shall be
             completed within four months following the pre-arbitration
             conference; (iv) all pre-arbitration motions shall be filed and
             briefed so that they may be heard no later than one month following
             the discovery cut-off; (v) the arbitration shall be scheduled to
             commence no later than 30 days after the decision on all
             pre-arbitration motions but in any event no later than six months
             following the service of the notice of arbitration; and (vi) the
             arbitrator shall render his written decision within 30 days
             following the submission of the matter.

             11.6.10 Any monetary award of the arbitrator may include interest
             at the highest prime rate, as published in the Wall Street Journal,
             plus two percent, which interest shall accrue from the date the
             claim, dispute or other matter in question was rightfully due and
             payable under this agreement until the date the award is paid to
             the prevailing party.

                                       43



             11.6.11  No provision of this Section 11.6 shall limit the right of
             any Party to this Agreement to exercise self-help remedies or to
             obtain provisional or ancillary remedies from a court of competent
             jurisdiction before, after, or during the pendency of any
             arbitration or other proceeding. The exercise of such remedy does
             not waive the right of any party to resort to arbitration.

             11.7   Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signature on each such counterpart
were upon the same instrument.

             11.8   Headings. The headings of the Sections of this Agreement are
inserted as a matter of convenience and for reference purposes only and in no
respect define, limit or describe the scope of this Agreement or the intent of
any Section.

             11.9   Entire Agreement. This Agreement, the FM Local Marketing
Agreement, the AM Asset Purchase Agreement, the AM Local Marketing Agreement,
all Schedules and Exhibits and related agreements entered into as of the date
hereof and all agreements, certificates and instruments delivered by the Parties
pursuant to the terms of this Agreement or the AM Asset Purchase Agreement
represent the entire understanding and agreement between the Parties with
respect to the subject matter hereof, supersede all prior negotiations and
agreements between the Parties, including the Letter of Intent (other than
Section 9 thereof as replaced by Exhibit J hereto, which survives), and can be
amended, supplemented, waived or changed only by an amendment in writing which
makes specific reference to this Agreement, the AM Asset Purchase Agreement, or
the amendment, as the case may be, and which is signed by the Party against whom
enforcement of any such amendment, supplement, waiver or modification is sought.

                                       44



             IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed and delivered by their duly authorized officers on the day and year
first above written.

                                        EL DORADO COMMUNICATIONS, INC.


                                        By: /s/ Roel Campos
                                           --------------------------------
                                           Roel Campos
                                           Senior Vice President


                                        EL DORADO 108, INC.


                                        By: /s/ Roel Campos
                                           --------------------------------
                                           Roel Campos
                                           Senior Vice President


                                        KXTJ LICENSE, INC.


                                        By: /s/ Roel Campos
                                           --------------------------------
                                           Roel Campos
                                           Senior Vice President


                                        LBI HOLDINGS II, INC.


                                        By: /s/ Lenard D. Liberman
                                           --------------------------------
                                           Lenard D. Liberman
                                           Executive Vice President


                                        LIBERMAN BROADCASTING OF HOUSTON, INC.


                                        By: /s/ Lenard D. Liberman
                                           --------------------------------
                                           Lenard D. Liberman
                                           Executive Vice President

                                       and

                                       S-1



                                        LIBERMAN BROADCASTING OF HOUSTON
                                        LICENSE CORP.


                                        By: /s/ Lenard D. Liberman
                                           --------------------------------
                                           Lenard D. Liberman
                                           Executive Vice President

                                       S-2

EX-10.3

                                                                    Exhibit 10.3

                            ASSET PURCHASE AGREEMENT

                                      Among

                         EL DORADO COMMUNICATIONS, INC.

                               EL DORADO 108, INC.

                               KXTJ LICENSE, INC.

                              LBI HOLDINGS II, INC.

                     LIBERMAN BROADCASTING OF HOUSTON, INC.

                                       and

                 LIBERMAN BROADCASTING OF HOUSTON LICENSE CORP.

                       RELATING TO THE ACQUISITION OF KEYH

                            Dated as of April 5, 2002



                               TABLE OF CONTENTS



                                                                                Page
                                                                             
ARTICLE I   DEFINITIONS .......................................................   2

     1.1    Definitions .......................................................   2

     1.2    Knowledge .........................................................   8

ARTICLE II  PURCHASE AND SALE OF ASSETS .......................................   8

     2.1    Assets to be Conveyed .............................................   8

     2.2    Excluded Assets and Liabilities ...................................   9

ARTICLE III PURCHASE PRICE; METHOD OF PAYMENT; ESCROW DEPOSIT .................  10

     3.1    Purchase Price ....................................................  10

     3.2    Liabilities Assumed ...............................................  11

     3.3    Escrow Deposit ....................................................  11

     3.4    Buyer's Remedies ..................................................  14

     3.5    Allocation ........................................................  14

     3.6    Prorations ........................................................  15

ARTICLE IV REPRESENTATIONS AND WARRANTIES BY SELLER ...........................  15

     4.1    Organization and Standing .........................................  15

     4.2    Authorization .....................................................  15

     4.3    KEYH FCC Licenses, Transmitters and Towers ........................  15

     4.4    Artlite Documents. ................................................  17

     4.5    Purchased Assets ..................................................  19

     4.6    Insurance .........................................................  19

     4.7    Litigation ........................................................  20

     4.8    Contracts .........................................................  20

     4.9    Insolvency ........................................................  20

     4.10   Reports ...........................................................  20

     4.11   No Defaults .......................................................  20

     4.12   Disclosures .......................................................  21

     4.13   Environmental Compliance ..........................................  21

     4.14   Intellectual Property .............................................  22

     4.15   Brokers ...........................................................  22

     4.16   Prepaid Expenses ..................................................  23


                                      -i-



                               TABLE OF CONTENTS
                                  (continued)



                                                                                Page
                                                                             
     4.17   Sale Proceeds Recipients; Recipient Agreement .....................  23

ARTICLE V   REPRESENTATIONS AND WARRANTIES BY BUYER AND LBI HOLDINGS ..........  23

     5.1    Status ............................................................  23

     5.2    No Defaults .......................................................  23

     5.3    Authorization. ....................................................  24
..
     5.4    Brokers ...........................................................  24

     5.5    Qualification as a Broadcast Licensee .............................  24

     5.6    Litigation ........................................................  24

     5.7    Approvals and Consents ............................................  24

ARTICLE VI  COVENANTS OF SELLER ...............................................  25

     6.1    Affirmative Covenants of Seller ...................................  25

     6.2    Negative Covenants of Seller ......................................  27

ARTICLE VII ADDITIONAL AGREEMENTS .............................................  28

     7.1    Purchase of Station KEYH; Inquiry and Maintenance of Station KEYH..  28

     7.2    Application for Commission Consent; Other Consents; Pre-Closing....  29

     7.3    Mutual Right to Terminate .........................................  31

     7.4    Buyer's Right to Terminate ........................................  31

     7.5    Seller's Right to Terminate .......................................  32

     7.6    Risk of Loss ......................................................  32

     7.7    Transfer Taxes and FCC Filings; Expenses; Bulk Sales. .............  34

     7.8    Termination of KEYH Local Marketing Agreement. ....................  35

     7.9    Invoices. .........................................................  35

     7.10   Determination of KEYH Closing Date ................................  35

     7.11   Mutual Releases ...................................................  35

     7.12   Artlite. ..........................................................  35

     7.13   Recipient Agreement. ..............................................  36

     7.14   Auxiliary License Application. ....................................  36

     7.15   Further Estoppel Certificate. .....................................  36

ARTICLE VIII CLOSING CONDITIONS ...............................................  36


                                      -ii-



                                TABLE OF CONTENTS
                                   (continued)



                                                                                Page
                                                                             
     8.1    Conditions Precedent to Buyer's Obligations ......................   36

     8.2    Conditions Precedent to Seller's Obligations .....................   38

ARTICLE IX  ITEMS TO BE DELIVERED AT THE CLOSING .............................   39

     9.1    Seller's Performance At Closing ..................................   39

     9.2    Buyer's Performance at Closing ...................................   42

ARTICLE X   INDEMNIFICATION ..................................................   43

     10.1   Indemnification by Seller ........................................   43

     10.2   Indemnification by LBI Holdings and Buyer ........................   44

     10.3   Third-Party Claims ...............................................   44

     10.4   Cap and Basket ...................................................   45

     10.5   Holdback .........................................................   46

     10.6   Survival of Representations and Warranties .......................   46

ARTICLE XI  MISCELLANEOUS PROVISIONS .........................................   46

     11.1   Notices ..........................................................   46

     11.2   Benefit and Assignment ...........................................   47

     11.3   Other Documents ..................................................   48

     11.4   Appendices .......................................................   48

     11.5   Construction .....................................................   48

     11.6   Arbitration ......................................................   48

     11.7   Counterparts .....................................................   50

     11.8   Headings .........................................................   50

     11.9   Entire Agreement .................................................   50



                                     -iii-



SCHEDULE I      Identification of Contracts to be Assumed

SCHEDULE II     List of all Permits and KEYH FCC Licenses

SCHEDULE III    List of Required Consents; Encumbrances; UCC Financing
                Statements; UCC Termination Statements

SCHEDULE IV     Identification of Items of Tangible Personal Property Described
                in Section 2.1.1

SCHEDULE V      Allocation of the Purchase Price

SCHEDULE VI     Insurance Coverage on the Purchased Assets

SCHEDULE VII    Identification of Intellectual Property

SCHEDULE VIII   Schedule of Prepaid Expenses

SCHEDULE IX     Sale Proceeds Recipients

SCHEDULE X      Information to be Periodically Provided to Buyer


EXHIBIT A       Seller Escrow Payment Certificate (AM Only)

EXHIBIT B-1     Opinion of Sellers' Counsel

EXHIBIT B-2     Opinion of Sellers' Texas Counsel

EXHIBIT C       Opinion of Sellers' FCC Counsel

EXHIBIT D       Opinion of LBI Entities' Counsel

EXHIBIT E       Exercise Purchase Right Notice

EXHIBIT F       Lessor Estoppel Certificates

EXHIBIT G       AM Local Marketing Agreement

EXHIBIT H       Forms of Required Consents

EXHIBIT I       Recipient Agreement

EXHIBIT J       Confidentiality




                           AM ASSET PURCHASE AGREEMENT

          THIS AM ASSET PURCHASE AGREEMENT is dated as of April 5, 2002, and
made and entered into by and among El Dorado Communications, Inc., a California
corporation ("EDC"), El Dorado 108, Inc., a Texas corporation ("EDC Sub") and
KXTJ License, Inc., a Delaware corporation ("EDC License Sub"), on the one hand,
and LBI Holdings II, Inc., a California corporation ("LBI Holdings"), Liberman
Broadcasting of Houston, Inc., a California corporation ("LBI"), and Liberman
Broadcasting of Houston License Corp., a California corporation ("LBI Sub"), on
the other. EDC, EDC Sub and EDC License Sub are referred to collectively as
"Seller," and LBI and LBI Sub are referred to collectively as "Buyer."

                              W I T N E S S E T H:

          WHEREAS, Seller owns certain assets used or held for use in connection
with the operation of radio station KQQK, 107.9 FM, Beaumont, Texas ("Station
KQQK") and Seller owns, or has the rights to own and as of the KEYH Closing Date
will own, certain assets used or held for use in connection with the operation
of radio station KEYH, 850 AM, Houston, Texas ("Station KEYH") (each a "Station"
and, collectively, the "Stations") and Seller desires to sell and assign to
Buyer the Stations, the businesses of the Stations and their related assets, and
the licenses, permits and other authorizations issued by the Federal
Communications Commission (the "FCC" or "Commission") for or in connection with
the operation of Station KQQK (the "KQQK FCC Licenses") and for or in connection
with the operation of Station KEYH (the "KEYH FCC Licenses"; the KQQK FCC
Licenses and the KEYH FCC Licenses are collectively referred to herein as the
"FCC Licenses"); and

          WHEREAS, Seller has a right to purchase Station KEYH from Artlite
Broadcasting Company, a Texas corporation ("Artlite") pursuant to the Extension
of LMA and Purchase Rights Agreement effective as of January 31, 1997 by and
between EDC and Artlite (the "KEYH Extension Agreement"), the Agreement to
Purchase Radio Assets and Enter Into Local Marketing Agreement dated July 23,
1995 by and between EDC and Artlite (the "KEYH Purchase Agreement"), the
Agreement Regarding Deposit by and among Artlite, EDC and David Best (the "KEYH
Deposit Agreement") and Agreement to Extend Due Date for Deposit dated August 5,
1996 by and among Artlite, EDC and David Best (the "KEYH Deposit Extension
Agreement") and currently has the right to operate Station KEYH under the Time
Brokerage (Local Marketing) Agreement dated as of August 1, 1995 by and between
EDC and Artlite, as extended until January 31, 2004 pursuant to the KEYH
Extension Agreement (the "KEYH Local Marketing Agreement"); and

          WHEREAS, Seller has exercised such right to purchase Station KEYH from
Artlite pursuant to Section 7.1 of this Agreement so as to be able to sell and
assign to Buyer Station KEYH and Seller shall prior to the KEYH Closing Date use
its efforts as set forth in this Agreement to preserve and cause Artlite to
preserve the businesses of the Stations; and

          WHEREAS, LBI Sub desires to acquire the FCC Licenses and LBI desires
to acquire from Seller all the other assets relating to the Stations and
businesses related thereto; and



          WHEREAS, the FCC Licenses may not be assigned to LBI Sub without the
prior written consent of the Commission; and

          WHEREAS, Buyer, Seller and LBI Holdings are concurrently entering into
the FM Asset Purchase Agreement of even date herewith (as amended, supplemented
or otherwise modified from time to time, the "FM Asset Purchase Agreement"); and

          WHEREAS, Buyer and Seller wish to consummate the transactions
contemplated hereby and the transactions contemplated by the FM Asset Purchase
Agreement concurrently for an aggregate purchase price (prior to adjustments) of
$30,000,001 but are, under certain circumstances, willing to consummate the
transactions contemplated by the FM Asset Purchase Agreement first and
thereafter seek to consummate the transactions contemplated hereby, in each case
in accordance with the terms of the FM Asset Purchase Agreement and this
Agreement.

          NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the Parties, intending to be legally bound, agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

          1.1 Definitions. Unless otherwise stated in this Agreement, the
following terms shall have the following meanings:

          "Agreement" means this Asset Purchase Agreement, and references to
          "Articles," "Sections," "Schedules" and "Exhibits" are to the Articles
          and Sections of this Agreement and to the Schedules and Exhibits
          attached hereto.

          "AM Local Marketing Agreement" means the agreement by and between
          Seller and Buyer entered into concurrently with this Agreement
          attached as Exhibit G.

          "Artlite" has the meaning set forth in the recitals to this Agreement;
          provided, however, that, as it is unclear whether the actual, legal
          name of Artlite, as registered with the Secretary of State of the
          State of Texas prior to the forefeiture of Artlite's corporate status,
          was Artlite Broadcasting Company or Artlite Broadcasting Co., Inc.,
          all references in this Agreement shall refer to the entity known by
          either name or by a similar name, and the parties agree that all
          documents executed and delivered by the Parties on the KEYH Closing
          Date shall reference the name of the entity as reflected in the
          evidence provided by Seller to satisfy the requirements of Section
          8.1.7 of this Agreement.

          "Artlite Assets" means the Assets (as defined in Section 1A of the
          KEYH Purchase Agreement, as unamended, less any retirements made in
          the ordinary and usual course of Station KEYH's business and
          reasonable wear and tear excepted) and any other Tangible Personal
          Property or Intellectual Property owned by Artlite in connection with
          Station KEYH.

          "Artlite Documents" means (1) the KEYH Purchase Agreement, (2) the
          KEYH Local Marketing Agreement, (3) the KEYH Extension Agreement, (4)
          Lease

                                        2



          Agreement dated August 1, 1995, by and between D.M. Best Co., Inc., as
          Lessor, and El Dorado Communications, Inc., as Lessee, as superseded
          by a Lease Agreement dated August 1, 1995, by and between All Media
          Properties, Inc., as Lessor, and El Dorado Communications, Inc., as
          Lessee, (5) the KEYH Deposit Agreement, (6) the KEYH Deposit Extension
          Agreement, (7) the Modification Agreement dated April 4, 2002, by and
          between EDC and Artlite (the "KEYH Modification Agreement"), (8) the
          KEYH Assignment Application, (9) one or more bills of sale executed by
          Artlite conveying to Seller the Artlite Assets, (10) an assignment
          assigning from Artlite to Seller the KEYH FCC Licenses to document the
          first step of a two-step pass through of such FCC Licenses to LBI Sub,
          (11) the Confirmation of Lease Terms and Consent dated April 4, 2002,
          by and between EDC and Artlite, (12) the Confirmation of Lease Terms
          and Consent by and between EDC and Artlite to be delivered by Artlite
          to EDC and LBI in the form agreed upon by EDC and Artlite on April 4,
          2002, and (13) any other agreement, document or instrument executed by
          Artlite or any of its affiliates in connection with this Agreement or
          the transactions contemplated hereby, a copy of which has been
          delivered to Buyer prior to the KEYH Closing Date.

          "Artlite Entities" has the meaning set forth in Section 4.4.

          "Assumed Contracts" means only (i) those Contracts listed on Schedule
          I, (ii) any other Contract which LBI specifically agrees in writing to
          assume in connection with this Agreement in its sole discretion, and
          (iii) those Contracts entered into by Seller in the ordinary course of
          business between the date hereof and the KEYH Closing Date which LBI
          specifically agrees in writing to assume in connection with this
          Agreement in its sole discretion.

          "Buyer" has the meaning set forth in the first paragraph of this
          Agreement.

          "Closing Place" means the offices of O'Melveny & Myers LLP, 400 South
          Hope Street, 15th Floor, Los Angeles, California 90071, or such other
          place mutually agreed to in writing by the Parties.

          "Commission" has the meaning set forth in the recitals hereto.

          "Communications Act" means the Communications Act of 1934, as amended,
          or any successor statute or statutes thereto, and all rules,
          regulations, published policies and published decisions of the FCC
          thereunder, in each case as from time to time in effect.

          "Contracts" means any agreement, written or oral, between Seller or
          Artlite and any third party related to Station KEYH that creates a
          right or obligation for either side to make payment or provide goods
          or services or otherwise grants rights or creates obligations,
          including but not limited to advertising contracts and sales orders.

          "Damages" means any and all claims, demands, liabilities, obligations,
          actions suits, proceedings, losses, damages, costs, expenses,
          assessments, judgments,

                                        3



          recoveries and deficiencies, including interest, penalties and
          reasonable attorneys' fees, of every kind and description, contingent
          or otherwise.

          "EDC," "EDC License Sub" and "EDC Sub" have the meanings specified in
          the first paragraph of this Agreement.

          "Effective Date" shall have the meaning assigned to such term in the
          AM Local Marketing Agreement.

          "Encumbrance" means any option, pledge, security interest, lien,
          charge, mortgage, claim, debt, liability, obligation, encumbrance or
          restriction (whether on voting, sale, transfer or disposition),
          whether imposed by agreement, understanding, law, rule or regulation,
          and, with respect to real property assets, including the Transmitter
          Buildings and Towers, means any leases, licenses or other occupancy
          agreements relating thereto or covering any portion thereof or any
          liens or encumbrances existing with respect to Artlite's or Seller's
          interest under such documents.

          "Escrow Agent" means Union Bank of California, N.A.

          "Escrow Agreement" means the Corporate Custodial Agreement Relating to
          Earnest Money to be executed by the Escrow Agent, LBI Holdings and EDC
          concurrently with the Recipient Agreement.

          "Escrow Deposit" has the meaning set forth in Section 3.3.

          "Escrow Deposit Reduction Event" has the meaning set forth in Section
          3.3.2

          "Excluded Assets" has the meaning set forth in Section 2.2.1.

          "FCC" has the meaning set forth in the recitals hereto.

          "FCC Licenses" has the meaning set forth in the recitals hereto.

          "FM Asset Purchase Agreement" has the meaning set forth in the
          recitals to this Agreement, and references to "Articles," Sections,"
          "Schedules" and "Exhibits" thereto are to the Articles and Sections of
          the FM Asset Purchase Agreement and to the Schedules and Exhibits
          attached thereto.

          "FM Only Closing" has the meaning set forth in the FM Asset Purchase
          Agreement.

          "Hazardous Substance" has the meaning set forth in Section 4.13.

          "Holdback" has the meaning set forth in the FM Asset Purchase
          Agreement.

          "Holdback Escrow Agent" shall mean Bank of America, JP Morgan Chase,
          Citibank or Bank of New York, provided such financial institution
          accepts the

                                        4



          Holdback Escrow Agreement in the form attached to the FM Asset
          Purchase Agreement, with such changes as mutually agreed to by Buyer
          or Seller, or, if none of the listed entities so accepts, Union Bank
          of California, N.A.

          "Holdback Escrow Agreement" means the Corporate Custodial Agreement
          Relating to Holdback dated on or about the KQQK Closing Date executed
          by the Holdback Escrow Agent, LBI Holdings and EDC pursuant to the FM
          Asset Purchase Agreement.

          "HSRA" means the Hart-Scott-Rodino Antitrust Improvement Act of 1976,
          as amended, and the regulations thereunder, as in effect from time to
          time.

          "Indemnified Party" and "Indemnifying Party" have the meanings
          specified in Section 10.3.

          "Initial Grant" means the Commission's written consent to the
          assignment of the KEYH FCC Licenses to LBI Sub pursuant to the KEYH
          Assignment Application (including without limitation, by the Media
          Bureau by delegated authority), without any conditions materially
          adverse to any Party.

          "Intellectual Property" has the meaning set forth in Section 4.14.1.

          "KEYH Assignment Application" means the application which Seller and
          Artlite filed on or about April 4, 2002 with the Commission, and any
          amendments thereto, requesting its written consent to the assignment
          of the KEYH FCC Licenses (i) in the absence of any objection by the
          Commission to the form of the transaction, from Artlite through Seller
          to LBI Sub and (ii) in the event of any objection by the Commission to
          the form of the transaction, from Artlite to LBI Sub in accordance
          with Section 7.2.1, which application, shall, in either case, be in
          form and substance reasonably satisfactory to Buyer and Seller.

          "KEYH Closing Date" means the date as determined pursuant to Section
          7.10.

          "KEYH Deposit Agreement" has the meaning set forth in the recitals to
          this Agreement.

          "KEYH Deposit Extension Agreement" has the meaning set forth in the
          recitals to this Agreement.

          "KEYH Extension Agreement" has the meaning set forth in the recitals
          to this Agreement.

          "KEYH FCC Licenses" has the meaning set forth in the recitals to this
          Agreement.

          "KEYH Final Grant Day" means the date on which the Initial Grant has
          become a final order, which date shall be the forty-first day
          following issuance by the Commission of a public notice announcing the
          Initial Grant, unless the Initial

                                        5



          Grant has during the preceding forty-day period become subject to any
          administrative or judicial stay, appeal, review, reconsideration or
          rehearing, in which case the KEYH Final Grant Day shall not be deemed
          to occur until such administrative or judicial stay, appeal, review,
          reconsideration or rehearing shall have been resolved by a final,
          unappealable order (by the Commission or by a court of competent
          jurisdiction if Buyer elects to seek judicial review of any final
          order by the Commission) which preserves intact the Initial Grant
          without any conditions materially adverse to any Party.

          "KEYH Local Marketing Agreement" has the meaning set forth in the
          recitals to this Agreement.

          "KEYH Purchase Agreement" has the meaning set forth in the recitals to
          this Agreement.

          "KQQK Assignment Application" has the meaning set forth in the FM
          Asset Purchase Agreement.

          "KQQK Closing Date" has the meaning set forth in the FM Asset Purchase
          Agreement.

          "KQQK FCC Licenses" has the meaning set forth in the recitals to this
          Agreement.

          "LBI," "LBI Holdings" and "LBI Sub" have the meanings specified in the
          first paragraph of this Agreement.

          "Letter of Intent" shall mean that Letter Agreement dated January 17,
          2002 by and among EDC and Liberman Broadcasting, Inc., a California
          corporation and an indirect wholly owned subsidiary of LBI Holdings,
          as extended from time to time.

          "Party" means any of EDC, EDC Sub, EDC License Sub, LBI Holdings, LBI
          or LBI Sub, as the context requires, and the term "Parties" mean all
          such entities; provided, however, that Seller, on the one hand, and
          LBI Holdings and Buyer, on the other, shall each be considered a
          single Party for purposes of Sections 7.4, 7.5, 10.3 and 10.4.

          "Permits" means the licenses, permits, approvals, authorizations,
          consents, and orders of any federal, state or local governmental
          authority held by Artlite or Seller in connection with the operation
          of the Station KEYH (including the KEYH FCC Licenses) and all pending
          requests and applications therefor, including without limitation those
          listed on Schedule II.

          "Proceeds" has the meaning set forth in Section 7.6.1.

          "Purchased Assets" has the meaning set forth in Section 2.1.

                                        6



          "Purchase Price" has the meaning set forth in Section 3.1.

          "Recipient Agreement" shall mean an agreement substantially in the
          form attached as Exhibit I.

          "Required Consents" means the FCC consents to the assignment of the
          KEYH FCC Licenses and the other governmental consents, third-party
          consents, approvals or waivers in form and substance satisfactory to
          Buyer, necessary for Seller to sell, convey or otherwise sell or
          assign the Purchased Assets to Buyer and for Artlite to sell, convey
          or otherwise sell or assign the Assets (as defined in Section 1A of
          the KEYH Purchase Agreement, as unamended) to Seller and/or Buyer,
          including without limitation those consents set forth on Schedule III.

          "Sale Proceeds Recipients" shall mean Seller and the other entities
          and persons listed on Schedule IX.

          "Seller" has the meaning set forth in the first paragraph of this
          Agreement.

          "Seller Escrow Payment Certificate (AM Only)" shall mean a certificate
          from an executive officer of Seller in the form of Exhibit A attached
          hereto, instructing the Escrow Agent to distribute a portion of the
          Escrow Deposit to Seller.

          "Seller Escrow Payment Certificate(FM Only)" has the meaning set forth
          in the FM Asset Purchase Agreement.

          "Simultaneous Closing" has the meaning set forth in the FM Asset
          Purchase Agreement.

          "Simultaneous Closing Date" has the meaning set forth in the FM Asset
          Purchase Agreement.

          "Station KQQK", "Station KEYH", "Station" and "Stations" have the
          meanings set forth in the recitals hereto.

          "Tangible Personal Property" has the meaning set forth in Section
          2.1.1.

          "Towers" means the radio broadcast towers located at the applicable
          Transmitter Site upon which is located broadcast antenna for Station
          KEYH.

          "Transaction and Wind Down Expenses" means the costs and expenses
          incurred by Seller in connection with the transactions contemplated by
          this Agreement, or in connection with the wind down of the business of
          Seller after the consummation of the transactions contemplated by this
          Agreement.

          "Transaction Claims" has the meaning set forth in Section 11.6.

          "Transmitter Buildings" means the transmitter buildings located at the
          Transmitter Sites.

                                        7



          "Transmitter Sites" means the transmitter and antenna sites located at
          Ft Bend County, Texas (KEYH).

          1.2   Knowledge. The term "knowledge," as it relates to an individual,
shall mean that such individual will be deemed to have knowledge of a particular
fact or other matter if (a) such individual is actually aware of such fact or
other matter; or (b) a prudent individual could be expected to discover or
otherwise become aware of such fact or other matter in the course of conducting
a reasonably comprehensive investigation concerning the existence of such fact
or matter. The term "knowledge," as it relates to a Party or any other person or
entity (other than an individual) shall mean that such Party or such other
person or entity will be deemed to have knowledge of a particular fact or other
matter if any individual who is serving, or who has at any time served during
the twelve months prior to the date of this Agreement, as a director, officer,
partner, executor, trustee, or any other managerial employee of such Party or
such other person or entity (or in any similar capacity) has, or at any time
had, "knowledge" of such fact or other matter.

                                   ARTICLE II
                          PURCHASE AND SALE OF ASSETS

          2.1   Assets to be Conveyed. On the KEYH Closing Date at the Closing
Place, (i) Seller will (or will cause Artlite through Seller, as the case may
be, to) sell, assign, convey, transfer and deliver to LBI Sub the KEYH FCC
Licenses and the Permits, and all applications therefor, together with any
renewals, extensions, additions or modifications thereof, and (ii) Seller will
sell, assign, convey, transfer and deliver to LBI the business of Station KEYH
and, all of Seller's right, title and interest in and to the assets, properties
and rights described below (which, together with the KEYH FCC Licenses and the
Permits and applications therefor, are collectively referred to as the
"Purchased Assets"), such sale, assignment, conveyance, transfer and delivery to
be made by instruments of conveyance in form reasonably satisfactory to Buyer
and to be free and clear of all Encumbrances. The Purchased Assets include the
following:

          2.1.1 All tangible personal property, furniture, fixtures,
          improvements and office equipment and other equipment used or useful
          in the operation of Station KEYH, including all furniture and
          inventory in the Transmitter Buildings, the transmitter facilities,
          all Towers, antennas, main and back-up transmitters and generators,
          STL's, data links for transmitter telemetry, wireless microphone and
          other equipment and tangible personal property located or otherwise
          intended for use at the Transmitter Sites, listed on Schedule IV,
          together with any replacements thereof or additions thereto made
          between the date hereof and the KEYH Closing Date, less any
          retirements made in the ordinary and usual course of Station KEYH's
          business (collectively, together with all tangible personal property
          described in Sections 2.1.4 and 2.1.6, the "Tangible Personal
          Property");

          2.1.2 All prepaid expenses made by Seller, advance payments by
          advertisers to Seller for advertising that would run after the KEYH
          Closing Date and other

                                        8



          advance payments by third parties for services to be provided by or
          for Station KEYH after the KEYH Closing Date, in each case under the
          Assumed Contracts;

          2.1.3 The Assumed Contracts and all of Seller's rights thereunder
          relating to periods and events occurring on and after the KEYH Closing
          Date;

          2.1.4 Such files, records and logs pertaining to the operation of
          Station KEYH as Buyer may reasonably require, including Station KEYH's
          public inspection files and other records relating to the KEYH FCC
          Licenses and other filings with the Commission and such sales records
          and other sales and traffic information that may exist relating to
          Station KEYH for the two year period prior to the date of the
          Agreement and copies of all sales orders, invoices, contracts,
          statements and station logs for such period, but excluding the
          corporate and accounting records of Seller to the extent not described
          above (it being understood by the Parties that Seller shall transfer
          the data pertaining to the operation of the Station KEYH (including
          without limitation the data resident in Seller's Great Plains and ABC
          Traffic Software) on the computer systems of Seller to the computer
          systems of Buyer) (notwithstanding this conveyance, Buyer agrees to
          allow Seller reasonable access to such records of Station KEYH as
          Seller may reasonably require from and after the KEYH Closing Date);

          2.1.5 All Intellectual Property; and

          2.1.6 To the extent not included above, all of the Artlite Assets.

          2.2   Excluded Assets and Liabilities.

          2.2.1 Excluded Assets. It is understood and agreed that the Purchased
          Assets do not include any assets of Seller that are not used in the
          operation of Station KEYH, intellectual property rights not related to
          the existing station format, the name El Dorado, cash (other than the
          amounts described in Section 2.1.2), cash equivalents, deposits made
          by Seller under any contracts (other than the amounts described in
          Section 2.1.2), accounts receivable of Seller not accruing under the
          AM Local Marketing Agreement, causes of action, tax refunds, insurance
          claims or proceeds, in each case (for such accounts receivable, causes
          of action, tax refunds and insurance claim and proceeds) accruing
          prior to the closing of the transactions contemplated hereby, claims
          of Seller which accrue under this Agreement (and not accruing under
          the AM Local Marketing Agreement), personal art work of shareholders
          of EDC at the office buildings relating to Station KEYH and excess
          studio and excess transmission equipment not used in the operation of
          Station KEYH, nor do they include the assets of any pension or other
          employee benefit plans nor any other assets specifically excluded from
          the Purchased Assets by the provisions of this Agreement (all the
          foregoing of which are referred to as the "Excluded Assets").

          2.2.2 Liabilities Not Assumed. Except for the liabilities and
          obligations specifically assumed pursuant to Section 3.2, Buyer and
          LBI Holdings will not

                                        9



          assume and will not be or become liable for, any liabilities or
          obligations of Seller or Artlite of any kind or nature whatsoever,
          whether absolute, contingent, accrued, known or unknown, related to
          the ownership of the Purchased Assets, the Excluded Assets, the
          operation of Station KEYH, (including without limitation, Seller's
          actions in operating Station KEYH under the AM Local Marketing
          Agreement but excluding Buyer's actions in operating Station KEYH
          under the AM Local Marketing Agreement) or Seller's or Artlite's
          employees or otherwise.

                                  ARTICLE III
                PURCHASE PRICE; METHOD OF PAYMENT; ESCROW DEPOSIT

          3.1   Purchase Price. Subject to Section 7.6.3, the purchase price to
be paid to Seller by Buyer for the Purchased Assets will be Seven Million
Dollars ($7,000,000) plus the aggregate amount of prepaid expenses made by
Seller for services to be provided to Station KEYH after the KEYH Closing Date
under the Assumed Contracts as set forth on Schedule VIII less any accrued
liabilities agreed to be assumed by Buyer, other than liabilities assumed
pursuant to and to the extent set forth in Section 3.2 (the "Purchase Price").

          3.1.1 Payment of Purchase Price. Subject to the terms and conditions
          set forth in this Agreement, on the KEYH Closing Date, LBI Holdings or
          Buyer will pay the Seller an amount equal to the Purchase Price, by
          wire transfer of immediately available funds in accordance with wire
          transfer instructions to be provided by Seller to Buyer not less than
          three business days prior to the KEYH Closing Date, it being
          understood and agreed that the Holdback deposited pursuant to the
          Holdback Escrow Agreement entered into pursuant to the FM Asset
          Purchase Agreement, less any distributions made to Seller pursuant to
          the Holdback Escrow Agreement, shall secure the indemnification
          obligations of Seller under Article X hereof, any other obligations of
          Seller under this Agreement, obligations of Seller under Article X of
          the FM Asset Purchase Agreement and any other obligations of Seller
          thereunder.

          3.1.2 Release of Escrow Deposit. Also on the KEYH Closing Date,
          concurrently with the wire transfer of the Purchase Price to Seller,
          EDC and LBI Holdings shall (i) if the KEYH Closing Date is a
          Simultaneous Closing Date, comply with Section 3.1.2 of the FM Asset
          Purchase Agreement and (ii) otherwise, jointly execute and deliver to
          the Escrow Agent written instructions to terminate the Escrow
          Agreement and deliver the entire Escrow Deposit then remaining to LBI
          Holdings.

          3.1.3 Post-Closing Proration. Following the KEYH Closing Date, the
          Parties shall determine and make the prorations called for in Section
          3.6.

          3.1.4 Holdback.

     (a)  Subject to the terms and conditions set forth in the FM Asset Purchase
     Agreement, LBI Holdings or Buyer shall on the KQQK Closing Date deposit the

                                       10



     Holdback with the Holdback Escrow Agent pursuant to the Holdback Escrow
     Agreement. The Holdback will be held, maintained, administered and
     disbursed by the Holdback Escrow Agent in accordance with the terms and
     provisions hereof, of the FM Asset Purchase Agreement and of the Holdback
     Escrow Agreement, with the terms of the Holdback Escrow Agreement
     controlling in the event of any conflict.

     (b)  LBI Holdings and/or Buyer will submit claims to Seller by a written
     notice specifying the amount of the claim (or estimated amount if the claim
     is not reasonably quantifiable) and describing in reasonable detail the
     basis for the claim; provided that any such claims relating to this
     Agreement may only be made after the KEYH Closing Date. If Seller does not
     notify LBI Holdings or Buyer, as the case may be, within 15 days after
     receiving such a notice of Seller's objection to the claim, LBI Holdings
     and EDC shall at the end of such 15 day period execute and deliver to
     Holdback Escrow Agent joint written instructions to deliver to Buyer from
     the Holdback an amount equal to the claimed amount, as determined in
     accordance with this Section 3.1.4. If Seller gives notice of objection to
     LBI Holdings or Buyer, as the case may be, within the 15-day period, and
     the Parties cannot reach agreement on the claim, LBI Holdings and EDC shall
     at the end of such 15 day period execute and deliver to Holdback Escrow
     Agent joint written instructions to deliver to Buyer from the Holdback an
     amount equal to the amount not in dispute, and the Parties will attempt in
     good faith to agree upon the amount in dispute. If the Parties cannot agree
     within thirty (30) days thereafter, the Parties will submit such dispute to
     arbitration, as provided for in Section 11.6. Within three business days of
     (i) reaching resolution of such dispute as to the amount (if any) that LBI
     Holdings and Buyer are entitled to (in the event that the parties reach
     resolution without submitting such dispute to arbitration), or (ii) an
     arbitrator determining the amount (if any) that LBI Holdings and Buyer are
     entitled to (in the event that such dispute is submitted to arbitration),
     LBI Holdings and EDC shall execute and deliver to Holdback Escrow Agent
     joint written instructions to deliver to Buyer from the Holdback an amount
     equal to such applicable amount. The failure to give notice of a claim
     hereunder will not constitute an election of remedies and will not limit
     LBI Holdings or Buyer in any manner in the enforcement of other remedies
     that may be available to it.

          3.2 Liabilities Assumed. As of the KEYH Closing Date, Buyer will
assume and agree to pay, discharge and perform insofar as they relate to the
time period on and after the KEYH Closing Date, and arise out of events
occurring on or after the KEYH Closing Date, all the obligations and liabilities
of Seller under the Assumed Contracts.

          3.3 Escrow Deposit. Concurrently with the execution and delivery of
the Recipient Agreement by Seller and the top eight entities listed on Schedule
IX, LBI Holdings will deposit pursuant to this Section 3.3 and pursuant to
Section 3.3 of the FM Asset Purchase Agreement One Million Five Hundred Thousand
Dollars ($1,500,000) under the Escrow Agreement (together with any interest
accrued on such amount, the "Escrow Deposit"). The Escrow Deposit will be held,
maintained, administered and disbursed by the Escrow Agent in accordance with
the terms and provisions hereof, of the FM Asset Purchase Agreement and of the
Escrow Agreement, with the terms of the Escrow Agreement controlling in the
event of any conflict. Once deposited, the Escrow Deposit will be disbursed as
follows:

                                       11



          3.3.1  Notification of Escrow Agent; Delivery of Seller Escrow Payment
          Certificate (AM Only). Within three business days of the occurrence of
          the KEYH Final Grant Day, Seller shall notify Escrow Agent in writing,
          with a copy to Buyer, of the occurrence of the KEYH Final Grant Day.
          Seller agrees not to deliver to the Escrow Agent the Seller Escrow
          Payment Certificate (AM Only) unless it simultaneously delivers to LBI
          Holdings such certificate.

          3.3.2  Delivery to Seller. In the event that an FM Only Closing has
          occurred and $1,000,000 of the Escrow Deposit (together with accrued
          interest thereon) has been returned to LBI Holdings in connection
          therewith or in the event that $1,000,000 of the Escrow Deposit
          (together with accrued interest thereon) has been distributed to
          Seller pursuant to a Seller Escrow Payment Certificate (FM Only) (as
          defined in the FM Asset Purchase Agreement) (either event being
          referred to herein as the "Escrow Deposit Reduction Event"), if Buyer
          fails to consummate the purchase and sale contemplated by this
          Agreement under circumstances that would constitute a material breach
          of this Agreement and Seller is not then in breach of its
          representations, warranties or covenants hereunder in any material
          respect (it being understood and agreed by the Parties hereto that for
          purposes of this Section 3.3.2, that for purposes of determining such
          breach of Seller's representations, warranties and covenants, all
          knowledge qualifications in the representations and warranties of
          Seller contained in this Agreement or in any certificates delivered
          pursuant hereto that are in parenthetical (including without
          limitation such knowledge qualifications in Sections 4.3.1, 4.3.2,
          4.3.3, 4.3.4, 4.3.5, 4.4, 4.5, 4.7, 4.9, 4.10, 4.11, 4.13, 4.14, 4.15,
          4.17, 4.18 and 9.1.10) shall be disregarded and no such representation
          or warranty shall be qualified in any respect by such knowledge
          qualifications in parenthetical), then, subject to the satisfaction of
          the conditions set forth below, $500,000 plus any associated accrued
          interest of the Escrow Deposit, will be delivered to Seller on the
          ninth business day after the KEYH Final Grant Day, it being understood
          and agreed that payment to Seller of $500,000 plus any associated
          accrued interest of the Escrow Deposit (and, if applicable, the
          amounts described in the second-to-last sentence of the last paragraph
          of this Section 3.3.2) (or, prior to the Escrow Deposit being made,
          payment to Seller of $500,000) will constitute full payment for any
          and all damages suffered by Seller by reason of LBI Holdings' or
          Buyer's failure to consummate the purchase and sale contemplated by
          this Agreement. Conditions to such delivery of $500,000 plus any
          associated accrued interest of the Escrow Deposit to Seller on such
          day will be that (a) the Escrow Deposit Reduction Event shall have
          occurred, (b) the Escrow Agent and LBI Holdings shall have received on
          the sixth business day after the KEYH Final Grant Day at or prior to
          5:00 PM (California time) (with a copy by e-mail to Lenard Liberman at
          e-mail lliberman@lbimedia.com and by fax and e-mail to Joe Kim at fax
          (213) 430-6407 and e-mail jkim@omm.com and Steve Chen at fax (213)
          430-6407 and e-mail schen@omm.com) a duly executed Seller Escrow
          Payment Certificate (AM Only) substantially in the form of Exhibit A
          annexed hereto, and (c) the Escrow Agent shall not have received from
          LBI Holdings or Buyer a written challenge challenging the accuracy of
          such Seller Escrow Payment Certificate (AM Only) at or prior to 5:00
          PM (California time) of the

                                       12



          second business day after receipt by both LBI Holdings and the Escrow
          Agent of such Seller Escrow Payment Certificate (AM Only).

               THE PARTIES ACKNOWLEDGE AND AGREE IN ADVANCE BY INITIALING THIS
          AGREEMENT IN THE SPACES PROVIDED [LBI HOLDINGS' INITIALS ________,
          BUYER'S INITIALS ________ AND ________, AND SELLER'S INITIALS
          _________, _______ AND ________], THAT THE ACTUAL DAMAGES THAT SELLER
          WOULD SUFFER AS A RESULT OF BUYER'S FAILURE TO CONSUMMATE THE PURCHASE
          AND SALE OF THE PURCHASED ASSETS WOULD BE EXTREMELY DIFFICULT OR
          IMPOSSIBLE TO CALCULATE; THAT THE FULL AMOUNT OF $500,000 PLUS
          ASSOCIATED ACCRUED INTEREST OF THE ESCROW DEPOSIT (OR, PRIOR TO THE
          ESCROW DEPOSIT BEING MADE, $500,000) IS A FAIR AND EQUITABLE AMOUNT TO
          REIMBURSE SELLER FOR ANY DAMAGES WHICH THE PARTIES ESTIMATE MAY BE
          SUSTAINED BY SELLER DUE TO BUYER'S FAILURE TO CONSUMMATE THE PURCHASE
          AND SALE OF THE ASSETS DESCRIBED IN THIS AGREEMENT UNDER THE
          CIRCUMSTANCES STATED IN THIS SECTION 3.3; AND THAT THIS SECTION 3.3
          SHALL CONSTITUTE A LIQUIDATED DAMAGES PROVISION, WHICH DAMAGES WILL BE
          SELLER'S SOLE REMEDY HEREUNDER IN THE EVENT OF LBI HOLDINGS' OR
          BUYER'S FAILURE TO CONSUMMATE THE PURCHASE AND SALE OF THE ASSETS
          DESCRIBED IN THIS AGREEMENT UNDER THE CIRCUMSTANCES STATED IN THIS
          SECTION 3.3. IN THE EVENT THAT LBI HOLDINGS OR BUYER PROVIDES ESCROW
          AGENT A WRITTEN CHALLENGE CHALLENGING THE ACCURACY OF THE SELLER
          ESCROW PAYMENT CERTIFICATE (AM ONLY) AND A DISPUTE OVER THE
          DISBURSEMENT OF $500,000 PLUS ASSOCIATED ACCRUED INTEREST OF THE
          ESCROW DEPOSIT ARISES THEREFROM, SUCH DISPUTE SHALL BE RESOLVED IN
          ACCORDANCE WITH SECTION 11.6. IF THE ARBITRATOR FINDS THAT THE SELLER
          ESCROW PAYMENT CERTIFICATE (AM ONLY) WAS ACCURATE AND THAT SUCH
          WRITTEN CHALLENGE WAS WITHOUT MERIT, THEN BUYER SHALL PAY SELLER (1)
          REASONABLE ATTORNEY'S FEES AND EXPENSES INCURRED BY SELLER IN
          CONNECTION WITH SUCH DISPUTE AND (2) 10% INTEREST ON THE $500,000 PLUS
          ASSOCIATED ACCRUED INTEREST OF THE ESCROW DEPOSIT CALCULATED FROM THE
          DATE OF SUCH WRITTEN CHALLENGE TO THE DATE THE $500,000 PLUS
          ASSOCIATED ACCRUED INTEREST OF THE ESCROW DEPOSIT IS PAID TO SELLER.
          IF THE ARBITRATOR FINDS THAT THE SELLER ESCROW PAYMENT CERTIFICATE (AM
          ONLY) WAS INACCURATE AND THAT SUCH WRITTEN CHALLENGE WAS WITH MERIT,
          SELLER SHALL PAY BUYER (1) REASONABLE ATTORNEY'S FEES AND EXPENSES
          INCURRED BY LBI HOLDINGS AND BUYER IN CONNECTION WITH SUCH DISPUTE AND
          (2) 10% INTEREST ON THE $500,000 PLUS ASSOCIATED ACCRUED INTEREST OF
          THE ESCROW DEPOSIT CALCULATED FROM THE DATE OF SUCH WRITTEN

                                       13



          CHALLENGE TO THE DATE THE $500,000 PLUS ASSOCIATED ACCRUED INTEREST OF
          THE ESCROW DEPOSIT IS RETURNED TO BUYER.

          3.3.3 Delivery to LBI Holdings. The Parties agree that the Escrow
          Deposit will be delivered to LBI Holdings in accordance with Section
          3.3.3 of the FM Asset Purchase Agreement. In addition, $500,000 plus
          associated accrued interest of the Escrow Deposit shall be delivered
          to LBI Holdings if (i) the transaction contemplated by this Agreement
          is consummated or (ii) the purchase and sale contemplated by this
          Agreement is not consummated and Seller is not entitled to receive the
          $500,000 plus associated accrued interest of the Escrow Deposit in
          accordance with Section 3.3.2.

          3.4   Buyer's Remedies. If the purchase and sale contemplated by this
Agreement is not consummated because of the breach by Seller of its
representations, warranties or covenants hereunder in any material respect (it
being understood and agreed by the Parties hereto that for purposes of this
Section 3.4, that for purposes of determining such breach of Seller's
representations, warranties and covenants, all knowledge qualifications in the
representations and warranties of Seller contained in this Agreement or in any
certificates delivered pursuant hereto that are in parenthetical (including
without limitation such knowledge qualifications in Sections 4.3.1, 4.3.2,
4.3.3, 4.3.4, 4.3.5, 4.4, 4.5, 4.7, 4.9, 4.10, 4.11, 4.13, 4.14, 4.15, 4.17,
4.18 and 9.1.10) shall be disregarded and no such representation or warranty
shall be qualified in any respect by such knowledge qualifications in
parenthetical), and Buyer is not in breach of its representations, warranties or
covenants hereunder, in any material respect, Seller agrees that, in addition to
any other rights and remedies available at law or in equity, LBI Holdings and
Buyer shall have the following rights and remedies: (i) Buyer shall have the
right to specific performance of Seller's obligation to sell the Purchased
Assets upon the terms and conditions set forth in this Agreement, as applicable,
and incidental damages related to such specific performance; (ii) LBI Holdings
shall have the right to the return of $500,000 of the Escrow Deposit (and
associated interest) or a portion of the Escrow Deposit, as applicable; and
(iii) LBI Holdings and Buyer shall have the right to recover money damages for
breach of this Agreement, including but not limited to, benefit of the bargain
damages and compensation for transaction costs; provided, that if LBI Holdings
and Buyer obtain full remedies under clause (i) pursuant to a non-appealable
judgment with which Seller complies, then Buyer shall not thereafter have
additional claims under clause (iii) and if LBI Holdings and Buyer obtain full
remedies under clause (iii) pursuant to a non-appealable judgment with which
Seller complies, then Buyer shall not thereafter have additional claims under
clause (i); provided, further, that if the purchase and sale contemplated by
this Agreement is not consummated because the representation and warranty in the
second sentence of Section 4.7 would not be true on the KEYH Closing Date, then
LBI Holdings and Buyer shall have the remedies in clauses (i) and (ii) but not
in clause (iii). The Parties agree that remedy at law is inadequate and that
damages are not adequate to compensate LBI Holdings and Buyer.

          3.5   Allocation. The Purchase Price will be allocated as set forth on
Schedule V.

                                       14



          3.6   Prorations. Other than the prepaid expenses set forth on
Schedule VIII and subject to the rights of Buyer and Seller pursuant to the AM
Local Marketing Agreement, the operation of Station KEYH and, subject to the AM
Local Marketing Agreement, all income, expenses and liabilities attributable
thereto through 11:59 p.m. on the day immediately preceding the KEYH Closing
Date will be for the account of Seller and thereafter for the account of LBI,
and all income and expenses relating to the operation of Station KEYH, including
such items as power and utilities charges, rents and other deferred items
relating to the operation of Station KEYH will be prorated between Seller and
LBI in accordance with generally accepted accounting principles consistently
applied, the proration to be made and paid, insofar as feasible, on the KEYH
Closing Date, with a final settlement sixty days after the KEYH Closing Date. In
the event of any disputes between the parties as to such adjustments, the
amounts not in dispute shall nonetheless be paid at the time provided herein and
such disputes shall be determined by an independent certified public accountant
mutually acceptable to the parties, and the fees and expenses of such accountant
shall be paid one-half by Seller and one-half by Buyer.

                                   ARTICLE IV
                    REPRESENTATIONS AND WARRANTIES BY SELLER

          Seller hereby represents and warrants to LBI Holdings and Buyer as
follows:

          4.1   Organization and Standing. Each of EDC, EDC Sub, and EDC License
Sub is a corporation duly organized, validly existing and in good standing under
the laws of the state of its incorporation. Seller has the requisite corporate
power and authority to enter into and complete the transactions contemplated by
this Agreement.

          4.2   Authorization. All necessary corporate actions and proceedings
to duly approve the execution, delivery and performance of this Agreement, the
Escrow Agreement, the Holdback Escrow Agreement, the Recipient Agreement, the AM
Local Marketing Agreement and other agreements, documents and instruments being
executed by Seller in connection herewith or therewith and the consummation of
the transaction contemplated hereby or thereby have been duly and validly taken
by Seller, and each of this Agreement, the Escrow Agreement, the Holdback Escrow
Agreement, the Recipient Agreement, the AM Local Marketing Agreement and other
agreements, documents and instruments being executed by Seller in connection
herewith or therewith has been duly and validly authorized, executed and
delivered by Seller and constitutes the legal, valid and binding obligation of
Seller, enforceable against Seller in accordance with and subject to their
respective terms.

          4.3   KEYH FCC Licenses, Transmitters and Towers.

          4.3.1 The KEYH FCC Licenses (all of which are listed on Schedule II,
          together with any pending applications for KEYH FCC Licenses)
          constitute all the licenses, permits and other authorizations required
          for and used in connection with the operation of Station KEYH. As of
          the date of this Agreement and as of the KEYH Closing Date, Artlite is
          and shall be holder of all the KEYH FCC Licenses. Other than the
          Initial Grant of the KEYH Assignment Application, no additional order
          or grant is required from the FCC in order to consummate the
          assignment of the KEYH FCC Licenses to LBI Sub. Schedule II correctly
          sets

                                       15



          forth the respective expiration date of each KEYH FCC License. Each
          KEYH FCC License is validly issued and in full force and effect.
          Seller and (to Seller's knowledge after due inquiry, including with
          Artlite) Artlite have taken all actions and performed all of their
          respective obligations that are necessary to maintain the KEYH FCC
          Licenses without adverse modification or impairment, and complete and
          correct copies of the KEYH FCC Licenses and any pending applications
          therefor have been delivered to Buyer. No event (to Seller's knowledge
          after due inquiry, including with Artlite) has occurred with respect
          to Station KEYH (other than directly as a result of Buyer's actions
          under the AM Local Marketing Agreement) which (i) has resulted in, or
          after notice or lapse of time or both would result in, revocation,
          suspension, adverse modification, non-renewal or termination of or any
          order of forfeiture with respect to, any KEYH FCC License or (ii)
          materially and adversely affects or in the future may materially and
          adversely affect any rights of Seller or Artlite or any of their
          respective assignees or transferees thereunder. None of the KEYH FCC
          Licenses requires that any assignment thereof must be approved by any
          public or other governmental authority other than the FCC.

          4.3.2 Neither Seller nor (to Seller's knowledge after due inquiry,
          including with Artlite) Artlite is a party to, and there are no
          investigations, notices of apparent liability, violations,
          forfeitures, notices of violation, orders to show cause or other
          orders or complaints issued by or before any court or regulatory body,
          including, without limitation, the FCC, or of any other proceedings
          (other than proceedings relating to the radio industry generally) that
          could in any manner threaten or adversely affect the validity or
          continued effectiveness of, or result in the adverse modification of,
          any of the KEYH FCC Licenses. In the event Seller (after due inquiry,
          including with Artlite) learns of any such action, or the filing or
          issuance of any such order, notice or complaint, Seller promptly will
          notify Buyer of the same in writing and will take all reasonable
          measures to contest in good faith or seek removal or rescission of
          such action, order, notice or complaint. Station KEYH is now operating
          at its licensed power and antenna height, in accordance with the KEYH
          FCC Licenses, and is in compliance with the Communications Act
          including, without limitation, rules governing the location of Station
          KEYH's main studio and rules governing the required contents of
          Station KEYH's public inspection files. Seller (after due inquiry with
          Artlite) has no reason to believe that the KEYH FCC Licenses will not
          be renewed in the ordinary course.

          4.3.3 None of the facilities used in connection with the radio
          broadcasting operations of Seller or Artlite relating to Station KEYH
          (including the Transmitter Buildings, the Transmitter Sites and the
          Towers) violates the provisions of any applicable building codes, fire
          regulations, building restrictions or other governmental ordinances,
          orders or regulations (including, without limitation, any applicable
          regulation of the Federal Aviation Administration), except where such
          violation would not impair, impede or affect adversely in any respect
          currently or in the future the continued uninterrupted operation of
          Station KEYH at its licensed power and in accordance with the other
          terms of the KEYH FCC Licenses, and each such facility is zoned so as
          to permit the commercial uses

                                       16



          intended by the owner or occupier thereof. Schedule II identifies any
          outstanding variances or special use permits materially affecting any
          of Seller's facilities or the uses thereof and Seller is in compliance
          therewith. Neither Seller nor (to Seller's knowledge after due
          inquiry, including with Artlite) Artlite has received any notice of
          any complaint being made against Station KEYH relating to its Tower,
          Transmitter Site, Transmitter Building or Seller's or Artlite's
          operation of such Station (including, without limitation, any
          complaint relating to the signals broadcast or otherwise transmitted
          from any Tower, either by Seller or by any person subleasing a portion
          of such Tower) except, in each case, where such complaint would not
          impair, impede or adversely affect the continued, uninterrupted
          operation of such Station. Each Tower has been appropriately
          registered with the Commission, as described in Schedule II.

          4.3.4 Artlite (to Seller's knowledge after due inquiry, including with
          Artlite) is qualified to sell Station KEYH and to assign the KEYH FCC
          Licenses in accordance with the terms of this Agreement and in
          compliance with the Communications Act. Neither Seller (after due
          inquiry with Artlite) nor (to Seller's knowledge after due inquiry,
          including with Artlite) Artlite knows of any party who has expressed
          any intention to oppose FCC approval of the assignment of the KEYH FCC
          Licenses to LBI Sub, nor does Seller (after due inquiry with Artlite)
          nor (to Seller's knowledge) Artlite know of any reason why FCC consent
          to such assignment might be denied or delayed.

          4.3.5 Each report or certification filed by or on behalf of Seller or
          (to Seller's knowledge after due inquiry, including with Artlite)
          Artlite with the FCC, including, without limitation, any filing
          pursuant to 47 C.F.R.(S) 73.3615 with respect to its ownership of
          Station KEYH and any other filing relating to such Station, was filed,
          and was at the time of filing true, correct and complete in all
          material respects; there have been no changes in the ownership of
          Station KEYH since the filing of the most recent such ownership
          reports or certifications and those ownership reports and
          certifications are true, correct and complete in all respects.

          4.3.6 The operation of Station KEYH by either Artlite or by Seller
          pursuant to the KEYH Local Marketing Agreement does not cause or
          result in exposure of workers or the general public to levels of radio
          frequency radiation in excess of the applicable limits stated in 47
          C.F.R.(S) 1.1310.

          4.4   Artlite Documents. All necessary corporate actions and
proceedings to duly approve the execution, delivery and performance of the
Artlite Documents have been duly and validly taken by each of the parties
thereto and the consummation of the transactions contemplated thereby have been
duly and validly taken by each of the parties party thereto, and each of the
Artlite Documents described in clauses (1) through (8) and in clauses (10) and
(11) of the definition thereof have been, and each of the Artlite Documents
described in clauses (9) , (12) , (13) of the definition thereof will be as of
the KEYH Closing Date, duly and validly authorized, executed and delivered by
each of the parties party thereto. Seller has delivered a full and complete copy
of each of the Artlite Documents (including all exhibits and schedules

                                       17



thereto, other than Exhibits A through H of the KEYH Purchase Agreement, which
Exhibits A through H were never prepared and therefore do not exist). Each
Artlite Document described in clauses clauses (1) through (8) and in clauses
(10) and (11) of the definition thereof is in full force and effect as of the
date hereof and each of the Artlite Documents will be in full force and effect
as of the KEYH Closing Date. Each Artlite Document described in clauses clauses
(1) through (8) and in clauses (10) and (11) of the definition thereof, is as of
the date hereof, and each of the Artlite Documents will be as of the KEYH
Closing Date, the legal, valid and binding obligation of each of the parties
thereto, enforceable against each in accordance with and subject to its terms
and there are no defaults thereunder. If Seller exercises its rights to purchase
set forth in the KEYH Extension Agreement in compliance with the terms set forth
therein, Seller will gain good and valid title to the Purchased Assets relating
to Station KEYH, free and clear of all Encumbrances upon consummation of the
assignment to Seller. Seller currently operates Station KEYH pursuant to the
terms of the KEYH Local Marketing Agreement, as extended. The KEYH Local
Marketing Agreement has been extended until January 31, 2004 by the parties
thereto and complies in all material respects with the Communications Act. The
Artlite Documents described in clauses (1) through (8) and in clauses (10) and
(11) of the definition thereof are, as of the date hereof, the only agreements
between Seller on the one hand and Artlite and its affiliates on the other hand
and the only agreements relevant to the KEYH Local Marketing Agreement and
Seller's rights to purchase Station KEYH from Artlite. The Artlite Documents
will be, as of the KEYH Closing Date, the only agreements between Seller on the
one hand and Artlite and its Affiliate on the other hand and the only agreements
related to the KEYH Local Marketing Agreement and Seller's rights to purchase
Station KEYH from Artlite. None of the Artlite Documents have been amended or
otherwise modified except pursuant to amendments of which copies have been
delivered to Buyer prior to the date of this Agreement. EDC has exercised the
option to purchase Station KEYH for cash and there are no impediments to its
right to exercise such option and the consideration that Seller is required to
pay Artlite upon exercise of such option is set forth in the KEYH Modification
Agreement. The KEYH Local Marketing Agreement has been extended until January
31, 2004. As of the KEYH Closing Date, the KEYH Local Marketing Agreement will
have terminated or will have been terminated and neither Artlite nor Seller nor
any of their respective affiliates will have any rights with respect to the
Purchased Assets or the Stations (it being understood that lessors under the
applicable leases will continue to be the lessors thereunder). Seller represents
and warrants that (to the knowledge of Seller after due inquiry, including
without limitation due inquiry with Artlite) (a) each of Artlite and All Media
Properties, Inc. (the "Artlite Entities") is, or will be as of the Closing Date,
a corporation validly existing and in good standing under the laws of the State
of Texas with the corporate power to own its properties and assets and to
conduct any activity that a corporation organized under the Texas Corporation
Law may conduct, and (b) each Artlite Entity has the corporate power to enter
into and perform its obligations under the Artlite Documents to which it is a
party. Each Artlite Entity's having forfeited its existence during the period
from 1998 to 2002 does not in any way affect its ability to perform its
obligations under the Artlite Documents on and after the date hereof and does
not in any way affect the transfer and the assignment of assets from Artlite to
Seller and/or Buyer to be consummated on the KEYH Closing Date pursuant to the
Artlite Documents and the option to purchase exercised by EDC thereunder. Each
Artlite Entity's corporate existence and its corporate power and authority have
been fully reinstated. No affiliate of Artlite (other than Artlite Entities) is
a party to any Artlite Documents or any other agreement to which Seller is a

                                       18



party. The execution of the AM Local Marketing Agreement will not constitute a
breach of any of the Artlite Documents by any of the parties thereto and Artlite
has expressly consented in writing to the execution and delivery by Buyer and
Seller of the AM Local Marketing Agreement.

          4.5 Purchased Assets. All items as of the date hereof used in the
operation of Station KEYH are listed and described in Schedule IV to this
Agreement. No other affiliate of EDC (including without limitations, direct or
indirect subsidiaries of EDC) other than Seller owns or has any rights, title or
interest in any Purchased Assets or is in any way involved with the operation of
Station KEYH. On or before the KEYH Closing Date, Artlite will have assigned
good and valid title to the Artlite Assets to Seller, free and clear of all
Encumbrances, and on the KEYH Closing Date, Seller will have good and valid
title to the Purchased Assets, free and clear of all Encumbrances, other than
the Encumbrances described in Schedule III, which Encumbrances will be released
on the KEYH Closing Date concurrently with the closing. Upon consummation of the
transactions set forth in this Agreement, Buyer will have good and valid title
to the Purchased Assets, free and clear of all Encumbrances (other than liens
granted to Buyer's lenders). Schedule III sets forth each release and/or UCC
termination statement required in order to release such Encumbrances on the KEYH
Closing Date. Schedule III also sets forth all currently effective UCC financing
statements that have been filed against any Purchased Asset. Seller and (to
Seller's knowledge after due inquiry, including with Artlite) Artlite have
maintained and have operated each Transmitter Site, each Tower, each Transmitter
Building and Station KEYH under and in accordance with the terms of all
applicable regulations in all material respects. Seller (after due inquiry with
Artlite) is not, and (to Seller's knowledge) Artlite is not, aware of any
complaints regarding the Transmitter Sites, the Towers, the Transmitter
Buildings, the antennas, the radio transmitters or the studio facilities. There
is no pending or, to the knowledge of Seller (after due inquiry with Artlite) or
(to the knowledge of Seller) Artlite, threatened action, event, transaction or
proceeding that could interfere with the quiet enjoyment or operation of the
Purchased Assets by Seller or Artlite or, on and after the KEYH Closing Date, by
Buyer. Buyer will have on and after the KEYH Closing Date reasonable access to
each of the Transmitter Sites, and a continuous means of ingress and egress
thereto from public roads. The items of Tangible Personal Property are in all
material respects in good operating condition for equipment of their age and
usage (ordinary wear and tear excepted). The technical equipment, constituting a
part of the Tangible Personal Property, has been maintained in accordance with
Station KEYH's past practice and is operating and complies in all material
respects with all applicable rules and regulations of the FCC and the terms of
the KEYH FCC Licenses and Permits. The Purchased Assets include all the personal
property and assets, including real estate rights, necessary to conduct the
operation of Station KEYH as now conducted. The sale of the Purchased Assets
relating to Station KEYH is a sale of the entire operating assets of a business
or of a separate division, branch, or identifiable segment of a business within
the meaning of Texas Tax Code Section 151.304 and Texas Administrative Code
Section 3.316.

          4.6 Insurance. Seller and Artlite now have in force insurance on the
Purchased Assets as set forth in Schedule VI and will continue the present
insurance at the present limits in full force and effect up through the KEYH
Closing Date.

                                       19



          4.7  Litigation. On or prior to the date of this Agreement, no
litigation, action, suit, judgment, proceeding or, to the knowledge of Seller
(after due inquiry with Artlite) or (to Seller's knowledge) Artlite,
investigation relating to Station KEYH is pending or outstanding before any
forum, court, or governmental body, department or agency of any kind to which
Seller or Artlite or Station KEYH is a party and, to the knowledge of Seller
(after due inquiry with Artlite) or (to Seller's knowledge) Artlite, no such
litigation or proceeding is threatened. On or prior to the KEYH Closing Date, no
litigation, action, suit, judgment, proceeding or, to the knowledge of Seller
(after due inquiry with Artlite) or (to Seller's knowledge) Artlite,
investigation relating to Station KEYH (except for such litigation, action,
suit, judgment, proceeding or investigation arising directly as a result of
Buyer's actions under the AM Local Marketing Agreement) that could reasonably be
expected or would reasonably be expected to adversely affect the operation of
Station KEYH in accordance with Seller's past operations or could reasonably be
expected or would reasonably be expected to prevent a consummation of the
transaction contemplated hereby shall be pending or outstanding before any
forum, court or governmental body, department or agency of any kind to which
Seller or Artlite or Station KEYH is a party, and, to the knowledge of Seller
(after due inquiry with Artlite) or (to Seller's knowledge) Artlite, no such
litigation or proceeding shall be threatened.

          4.8  Contracts. Seller has delivered to Buyer prior to the KEYH
Closing Date true and complete copies of all Contracts (in the case of oral
agreements, a written summary of the key terms of such oral Contracts),
including without limitation the Assumed Contracts. The Assumed Contracts will
be enforceable by Buyer after the consummation of the transaction contemplated
hereby in accordance with their respective terms; provided, however, that Seller
makes no warranty as to performance by any other party to any Assumed Contracts
or as to LBI's ability to collect any payments due or to become due thereunder.
Seller has not taken any action that would impair the enforceability of the
Assumed Contracts, or omitted to take any action, the omission of which would
have such effect. There are no material defaults under any of the Assumed
Contracts and the consummation of the transaction contemplated hereby will not
cause any defaults under any of the Assumed Contracts.

          4.9  Insolvency. No insolvency proceedings of any character including,
without limitation, bankruptcy, receivership, reorganization, composition or
arrangement with creditors, voluntary or involuntary, affecting Seller or (to
Seller's knowledge after due inquiry, including with Artlite) Artlite or any of
its assets or properties is pending or, to the knowledge of Seller (after due
inquiry, including with Artlite) or (to Seller's knowledge) Artlite, threatened.

          4.10 Reports. All material returns, reports and statements currently
required to be filed by Seller or Artlite with the Commission or with any other
governmental agency have been filed and each such return, report and statement
is true, correct and complete in all material respects. Each of Seller and (to
Seller's knowledge, after due inquiry, including with Artlite) Artlite has
complied in all material respects with the reporting requirements of the
Commission and other governmental authorities having jurisdiction over Station
KEYH and its operations.

          4.11 No Defaults. Neither the execution, delivery and performance by
Seller of this Agreement, the Escrow Agreement, the Holdback Escrow Agreement,
the Recipient Agreement, the AM Local Marketing Agreement, and other agreements,
documents and instruments being executed by Seller in connection herewith or
therewith nor the consummation

                                       20



by Seller of the transaction contemplated hereby is an event that, of itself or
with the giving of notice or the passage of time or both, will (i) conflict with
the provisions of the Articles of Incorporation or Bylaws of Seller, (ii)
constitute a violation of, conflict with or result in any breach of or any
default under, result in any termination or modification of, or cause any
acceleration of any obligation under, any material contract, mortgage,
indenture, agreement, lease, license or other instrument to which Seller is a
party or by which it is bound, or by which it may be affected, or result in the
creation of any Encumbrance on any of the Purchased Assets, (iii) violate any
judgment, decree, order, statute, rule or regulation applicable to Seller or
(iv) violate or constitute a breach of any Assumed Contract or any of the
Artlite Documents. The execution, delivery and performance by Seller of this
Agreement, the Escrow Agreement, the Holdback Escrow Agreement, the Recipient
Agreement, the AM Local Marketing Agreement, and other agreements, documents and
instruments being executed by Seller in connection herewith or therewith and the
consummation by Seller and (to Seller's knowledge after due inquiry, including
with Artlite) Artlite of the transactions contemplated hereby do not require the
consent of any third party other than as listed on Schedule III.

          4.12 Disclosures. No covenant, representation or warranty by Seller
and no written statement, certificate, appendix or Schedule furnished by Seller
pursuant hereto or in connection with the transaction contemplated hereby
contains any untrue statement of a material fact or omits to state any material
fact necessary to make the statements contained herein or therein not materially
misleading.

          4.13 Environmental Compliance. (i) Seller has not, in connection with
its business or assets, generated, used, transported, treated, stored, released
or disposed of, or has suffered and has permitted no one else to generate, use,
transport, treat, store, release or dispose of any Hazardous Substance (as
defined below) in violation of any applicable environmental law; (ii) to the
knowledge of Seller or (to Seller's knowledge) Artlite, there has not been any
generation, use, transportation, treatment, storage, release or disposal of any
Hazardous Substance in connection with the conduct of Seller's business or in
any properties within 100 yards of its business which has created or might
reasonably be expected to create any material liability under any applicable
environmental law or which would require reporting to or notification of any
governmental entity; (iii) to the knowledge of Seller or (to Seller's knowledge)
Artlite, no asbestos or polychlorinated biphenyl or underground storage tank is
contained in or located at any facility used in connection with its business;
and (iv) to the knowledge of Seller or (to Seller's knowledge) Artlite, any
Hazardous Substance handled or dealt with in any way in connection with Seller's
business has been and is being handled or dealt with in all material respects in
compliance with all applicable environmental laws. As used herein, "Hazardous
Substance" means substances that are defined or listed in, or otherwise
classified pursuant to, any applicable laws as "hazardous substances,"
"hazardous materials," "hazardous wastes" or "toxic substances," or any other
formulation of any applicable environmental law intended to define, list or
classify substances by reason of deleterious properties such as ignitibility,
corrosivity, reactivity, radioactivity, carcinogenicity, reproductive toxicity
or "EP toxicity," and petroleum and drilling fluids, produced waters and other
wastes associated with the exploration, development, or production of crude oil,
natural gas or geothermal energy.

                                       21



          4.14   Intellectual Property.

          4.14.1 Schedule VII contains a true and complete list of all patents
          and trademarks, service marks, station names, alternative station
          names, slogans, trade names, logos, jingles, assumed names, fictional
          business names, copyrights, licenses, permits, authorizations and
          other similar intellectual property rights and interests applied for,
          issued to or presently owned or used by Seller or (to Seller's
          knowledge after due inquiry, including with Artlite) Artlite (other
          than the name "El Dorado" and programming and its contents used but
          not owned by Seller) which are material to the operation of Station
          KEYH, including the call letters "KEYH" and any other call signs
          (together with the goodwill associated therewith, the "Intellectual
          Property"). Except as set forth on Schedule VII, on the KEYH Closing
          Date, Seller will have good and marketable title to all of the
          Intellectual Property, free and clear of all Encumbrances. Neither
          Seller nor (to Seller's knowledge after due inquiry, including with
          Artlite) Artlite have made any registrations or filings in the United
          States Copyright Office or the United States Patent and Trademark
          Office nor have Seller or (to Seller's knowledge after due inquiry,
          including with Artlite) Artlite been issued by the United States
          Copyright Office or the United States Patent and Trademark Office any
          intellectual property rights in connection with or related to Station
          KEYH.

          4.14.2 Except as set forth on Schedule VII, on the KEYH Closing Date,
          neither Seller nor (to Seller's knowledge) Artlite will have received
          any notice and Seller (after due inquiry with Artlite) will have no
          knowledge of Artlite having received notice from any other person or
          entity pertaining to or challenging the right of Seller or Artlite to
          use any of the Intellectual Property or any rights thereunder.

          4.14.3 Except as set forth on Schedule VII, neither Seller nor (to
          Seller's knowledge after due inquiry, including with Artlite) Artlite
          has violated or infringed any patent, trademark, trade name, jingle,
          assumed name, fictional business name, copyright, license, permit or
          other similar intangible property right or interest held by others or
          any license or permit held by Seller or Artlite in connection with or
          related to Station KEYH.

          4.14.4 Except as set forth on Schedule VII, (i) neither Seller nor (to
          Seller's knowledge after due inquiry, including with Artlite) Artlite
          has granted any license or other rights and neither Seller nor (to
          Seller's knowledge after due inquiry, including with Artlite) Artlite
          has any obligations to grant licenses or other rights to any of the
          Intellectual Property, and (ii) neither Seller nor Artlite has made
          any claim of any violation or infringement by others of its rights to
          or in connection with any of the Intellectual Property, and there is
          no basis for the making of any such claim.

          4.15   Brokers. No agent, broker, investment or commercial banker,
person or firm acting on behalf of Seller or (to Seller's knowledge after due
inquiry with Artlite) Artlite or under the authority of Seller or (to Seller's
knowledge after due inquiry with Artlite) Artlite is or will be entitled to any
broker, finder or financial advisor fee or any other commission or similar

                                       22



fee directly or indirectly in connection with the transaction contemplated by
this Agreement, other than Houlihan Lokey Howard & Zukin, whose fee shall be
paid by Seller.

          4.16 Prepaid Expenses. All prepaid expenses made by Seller for
services to be provided to Station KEYH after the KEYH Closing Date under the
Assumed Contracts are set forth on Schedule VIII, except for such expenses as
are subject to proration under Section 3.6.

          4.17 Sale Proceeds Recipients; Recipient Agreement. Seller and Sale
Proceeds Recipients listed on Schedule IX constitute all entities and persons
that will receive the proceeds from the sale of the Stations pursuant to this
Agreement and/or the AM Asset Purchase Agreement other than those persons or
entities that will receive only Transaction and Wind Down Expenses. Upon
execution and delivery thereof, (to Seller's knowledge after due inquiry,
including with the Sale Proceeds Recipients) the Recipient Agreement will have
been duly and validly authorized, executed and delivered by Seller and each Sale
Proceeds Recipient signatory thereto and will constitute the legal, valid and
binding obligation of Seller and each Sale Proceeds Recipient signatory thereto,
enforceable against Seller and such Sale Proceeds Recipient in accordance with
and subject to its terms.

                                    ARTICLE V
            REPRESENTATIONS AND WARRANTIES BY BUYER AND LBI HOLDINGS

          LBI Holdings and Buyer represent and warrant to Seller as follows:

          5.1  Status. Each of LBI Holdings, LBI and LBI Sub is a California
corporation, duly organized, validly existing and in good standing under the
laws of the State of California. LBI Holdings and Buyer each have the requisite
corporate power to enter into and complete the transaction contemplated by this
Agreement.

          5.2  No Defaults. Other than the consents set forth in Schedule III
with respect to Buyer, item (2) of which will have been obtained by the KEYH
Closing Date, neither the execution, delivery and performance by LBI Holdings or
Buyer of this Agreement, the Escrow Agreement, the Holdback Escrow Agreement,
the Recipient Agreement, the AM Local Marketing Agreement, and other agreements,
documents and instruments being executed by LBI Holdings or Buyer in connection
herewith or therewith nor the consummation by Buyer of the transaction
contemplated hereby is an event that, of itself or with the giving of notice or
the passage of time or both, will (i) conflict with the provisions of the
Articles of Incorporation or Bylaws of LBI Holdings or Buyer, (ii) constitute a
violation of, conflict with or result in any breach of or any default under,
result in any termination or modification of, or cause any acceleration of any
obligation under, any material contract, mortgage, indenture, agreement, lease
or other instrument to which LBI Holdings or Buyer is a party or by which it is
bound, or by which it may be affected, or result in the creation of any
Encumbrance on any of its assets, except for agreements, indentures and
instruments related to the financing of the transaction contemplated by this
Agreement, (iii) violate any judgment, decree, order, statute, rule or
regulation applicable to LBI Holdings or Buyer, or (iv) result in the creation
or imposition of any Encumbrance on Station KEYH or the Purchased Assets, except
for liens, charges or encumbrances relating to the financing of the transaction
contemplated by this Agreement.

                                       23



          5.3 Authorization. All necessary corporate actions and proceedings to
duly approve the execution, delivery and performance of this Agreement, the
Escrow Agreement, the Holdback Escrow Agreement, the Recipient Agreement, the AM
Local Marketing Agreement and other agreements, documents and instruments being
executed by LBI Holdings or Buyer in connection herewith or therewith and the
consummation of the transaction contemplated hereby or thereby have been duly
and validly taken by LBI Holdings and Buyer, and each of this Agreement, the
Escrow Agreement, the Holdback Escrow Agreement, the Recipient Agreement, the AM
Local Marketing Agreement and other agreements, documents and instruments being
executed by LBI Holdings or Buyer in connection herewith or therewith has been
duly and validly authorized, executed and delivered by LBI Holdings and Buyer
and constitutes the legal, valid and binding obligation of LBI Holdings and
Buyer, enforceable against LBI Holdings and Buyer in accordance with and subject
to their respective terms.

          5.4 Brokers. No agent, broker, investment or commercial banker, person
or firm acting on behalf of LBI Holdings or Buyer or under the authority of LBI
Holdings or Buyer is or will be entitled to any broker, finder or financial
advisor fee or any other commission or similar fee directly or indirectly in
connection with the transaction contemplated by this Agreement, other than Kalil
& Co., Inc., whose fee shall be paid by Buyer.

          5.5 Qualification as a Broadcast Licensee. Excluding all facts arising
from changes between the date hereof and the KEYH Closing Date to the radio
broadcasting industry generally and any modification during such period of the
FCC rules, regulations or policies affecting all members of the class of holders
of FCC licenses to which Buyer would belong as the holder of KEYH FCC Licenses
or to which Buyer belongs as the holder of its existing FCC licenses, as of the
date of this Agreement and as of the KEYH Closing Date, no fact exists that
would as of the date hereof and as of the KEYH Closing Date, under the
Communications Act, disqualify Buyer as owner, operator and licensee of Station
KEYH. Excluding all requests arising from changes between the date hereof and
the KEYH Closing Date to the radio broadcasting industry generally and any
modification during such period of the FCC rules, regulations or policies
affecting all members of the class of holders of FCC licenses to which Buyer
would belong as the holder of the KEYH FCC Licenses or to which Buyer belongs as
the holder of its existing FCC licenses, no request for any waiver under the
Communications Act is necessary in order for LBI Holdings or Buyer to obtain a
grant of the KEYH Assignment Application or to consummate the transactions
contemplated hereby.

          5.6 Litigation. There are no suits, legal proceedings or
investigations of any nature pending or, to the knowledge of LBI Holdings or
Buyer, threatened against or affecting it that would affect the ability of LBI
Holdings or Buyer to carry out the transaction contemplated by this Agreement.

          5.7 Approvals and Consents. To knowledge of LBI Holdings or Buyer, the
only approvals or consents of persons or entities not a party to this Agreement
that are legally or contractually required to be obtained by LBI Holdings or
Buyer in connection with the consummation of the transaction contemplated by
this Agreement are identified on Schedule III.

                                       24



                                   ARTICLE VI
                               COVENANTS OF SELLER

          6.1   Affirmative Covenants of Seller. Between the date hereof and the
KEYH Closing Date, except as disclosed in this Agreement:

          6.1.1 Maintenance. Seller will continue to operate, and will cause
          Artlite to continue to operate, Station KEYH in substantial conformity
          with past practices, and in conformity with the KEYH FCC Licenses and
          the Communications Act.

          6.1.2 Preserve Relations. Seller will use its commercially reasonable
          efforts (such standard being determined as if Seller intended to
          continue operation of the Stations for at least ten years from the
          date of determination) to preserve the businesses of Station KEYH and,
          where commercially reasonable (such standard being determined as if
          Seller intended to continue operation of Station KEYH for at least ten
          years from the date of determination), the good relations with the
          third parties (including but not limited to lessors, advertisers,
          clients and service providers) under all Assumed Contracts, with
          owners of property adjacent to or in the area of the Transmitter
          Sites, the Transmitter Buildings, the Towers, and with advertisers,
          service providers, municipalities and Artlite and its affiliates.

          6.1.3 Reasonable Access. In addition to the rights of Buyer under the
          AM Local Marketing Agreement, following reasonable advance
          notification, Seller will provide Buyer and representatives of Buyer
          with reasonable access to the employees and the properties, titles,
          contracts, books, files, logs, records and affairs of Station KEYH,
          and Seller will furnish or will cause to be furnished such additional
          information concerning Station KEYH as Buyer may from time to time
          reasonably request. Seller agrees that a request by Buyer at least
          three business days prior to a visit by personnel of Buyer to Station
          KEYH during such Station's normal business hours shall constitute
          reasonable advance notification and shall make best efforts to make
          available the documents and the personnel Buyer indicates that its
          personnel would like to see during such visit. Buyer will maintain the
          confidentiality of all such information in accordance with the terms
          of confidentiality previously agreed to between EDC and Liberman
          Broadcasting, Inc. pursuant to Section 9 of the Letter of Intent as
          replaced by Exhibit J hereto. Buyer shall have the right to make
          offers of employment beginning as of the date hereof to such employees
          of Seller as Buyer may identify in its sole and absolute discretion
          without liability to Seller. Without limiting the generality of the
          foregoing, Seller will promptly (and in any event within two business
          days) deliver to Buyer any information requested by Buyer (if
          applicable, for specified time periods requested by Buyer) that is
          within the scope of information described in Schedule X annexed hereto
          and that is then available (or should reasonably be available) to
          Seller. A copy of the information so requested by Buyer shall be
          delivered to Buyer and a copy of such information shall also remain at
          the office of Seller (at the address set forth in Section 11.1) at all
          times. Seller shall update in its records the information described in
          Schedule X on a timely basis in accordance with its past practices.
          Buyer may request such information as often

                                       25



          as it chooses. Seller shall comply with the provisions of the last
          paragraph of Schedule X.

          6.1.4 Obtain Consents. Seller will use its best efforts and will use
          its best efforts to cause Artlite, to procure the Required Consents.

          6.1.5 Books and Records. Seller will maintain the books and records of
          Station KEYH consistent with past practices.

          6.1.6 Insurance. Seller will maintain, and will be responsible and
          bear the risk for Artlite maintaining, in force the existing insurance
          policies identified on Schedule VI or reasonably equivalent policies.
          Seller will use, and will be responsible and bear the risk for Artlite
          using, the proceeds of any claims for loss payable under such
          insurance policies to repair, replace, or restore any of the Purchased
          Assets destroyed by fire and other casualties to their former
          condition as soon as possible after the loss.

          6.1.7 Notification. Seller will promptly upon Seller's learning of the
          same notify Buyer of any order to show cause, notice of violation,
          notice of apparent liability or of forfeiture or the filing or written
          threat of filing of any complaint against Station KEYH or against
          Seller or Artlite in connection with Station KEYH, occurring between
          the date hereof and the KEYH Closing Date, and respond to any action,
          order, notice or written complaints, and implement procedures to
          ensure that the complaints or violations will not recur. Without
          limiting the generality of the foregoing, Seller will also promptly
          upon Seller's learning of the same notify Buyer of any complaint being
          made against Station KEYH relating to its Tower, Transmitter Site,
          Transmitter Building or Seller's or Artlite's operation of such
          Station (including, without limitation, any complaint related to the
          signals broadcast or otherwise transmitted from such Tower, either by
          Seller or Artlite or by any person subleasing a portion of such Tower
          but not including complaints relating to the programming or content of
          Station KEYH, such complaints which are subject to the first sentence
          of this section). Without limiting the generality of the foregoing,
          Seller will promptly (and in any event within three business days)
          upon Seller's obtaining knowledge of the same notify Buyer of (i) any
          termination of sales orders or threats of termination in either case
          by any advertiser whose orders total more than $2,000 per month or by
          Seller or (ii) the ceasing of employment of any employee of Station
          KEYH who is either an account executive or earns more than $30,000 per
          year.

          6.1.8 Contracts. Seller will provide a copy of any Contract that
          involves more than $2,000 per month or with any service provider or
          advertiser it enters into prior to KEYH Closing Date (or a written
          description of such Contract, if oral) within five business days of
          entering into such Contract and in any event prior to the KEYH Closing
          Date. Seller will not enter into any Contract after the execution of
          the AM Local Marketing Agreement without prior written consent of
          Buyer, which consent shall not be unreasonably withheld.

                                       26




          6.1.9  Transition Assistance. Seller will use best efforts (without
          incurring unreasonable costs) to (and will use reasonable efforts to
          cause Artlite to) assist Buyer in transitioning third party provided
          services such as utilities, phone service, etc. and in transitioning
          advertisers.

          6.1.10 Assistance in Transfer of Records and Data. Seller will fully
          cooperate with Buyer and make such advance preparations (including
          making copies in advance, collecting paperwork, coordinating
          information about computer systems and configurations) as are
          necessary so that Seller can deliver, and Seller shall deliver, the
          data and records required to be delivered under Section 2.1.4 to Buyer
          (including the transfer of data from Seller's computer systems to
          Buyer's computer systems) on or prior to the fifteenth business day
          prior to the Effective Date with title to such data and records
          transferring to Buyer only on the KEYH Closing Date; provided,
          however, that if after Seller's commercially reasonable efforts an
          electronic transfer is not possible, the same data may be transferred
          by Seller by manual input on or prior to the tenth business day prior
          to the Effective Date, with costs of such manual input to be shared
          between Buyer and Seller. Such data and records shall be updated on a
          daily basis until the Effective Date.

          6.2    Negative Covenants of Seller. From the date hereof through
consummation of the transaction contemplated hereby on the KEYH Closing Date,
except as contemplated by this Agreement, Seller will not, and will cause
Artlite not to, without the prior written consent of Buyer:

          6.2.1  Encumbrances. Create or assume any Encumbrance on any of the
          Purchased Assets, whether now owned or hereafter acquired, unless
          discharged or terminated and fully released prior to the KEYH Closing
          Date;

          6.2.2  Transfers. Sell, assign, lease or otherwise transfer or dispose
          of any of the Purchased Assets, whether now owned or hereafter
          acquired, except for retirements in the normal and usual course of
          business;

          6.2.3  Call Letters. Change Station KEYH's call letters or modify
          Station KEYH's facilities in any material respect;

          6.2.4  Change in Format or Business; Change Station KEYH's format
          (including but not limited to genre of music, demographic or language)
          or otherwise materially change Station KEYH's business model or
          advertising sales strategy; provided, however, that nothing in this
          Section 6.2.4 is intended to constitute an impermissible abrogation of
          a licensee's responsibilities under the Communications Act to maintain
          control of the operation of Station KEYH; provided, further, that
          actions taken by Buyer pursuant to and in compliance with the AM Local
          Marketing Agreement shall not constitute violations of this Section
          6.2.4.

                                       27



          6.2.5 Modification of Contracts. Amend or terminate any of the Assumed
          Contracts (or waive any substantial right thereunder) or any
          advertising contracts that involves more than $2,000 per month;

          6.2.6 Rights. Cancel or compromise any claim or waive or release any
          right of Seller or Artlite relating to the Purchased Assets, except in
          the ordinary course of business consistent with past practice;

          6.2.7 KEYH FCC Licenses and Permits. Cause or permit, by any act or
          failure on its part, the KEYH FCC Licenses or Permits to expire or to
          be surrendered or modified (unless Buyer has provided prior written
          consent with respect to such modification, which consent shall not be
          withheld unreasonably in the case of modifications required pursuant
          to a casualty event), or take any action which would cause the FCC or
          any other governmental authority to institute proceedings for the
          suspension, revocation or adverse modification of any of the KEYH FCC
          Licenses or Permits, or fail to prosecute with due diligence any
          pending applications to any governmental authority in connection with
          the operation of Station KEYH, or take any other action within
          Seller's or Artlite's control which would result in Station KEYH being
          in non-compliance with the requirements of the Communications Act or
          any other applicable law material to the operation of Station KEYH; or

          6.2.8 No Inconsistent Action. Take any other action inconsistent with
          its obligations under this Agreement or which could hinder or delay
          the consummation of the transaction contemplated by this Agreement.

                                  ARTICLE VII
                              ADDITIONAL AGREEMENTS

          7.1   Purchase of Station KEYH; Inquiry and Maintenance of Station
KEYH

          7.1.1 Exercise Purchase Right of Station KEYH. EDC has exercised its
          right to purchase Station KEYH set forth in Section II A of the KEYH
          Extension Agreement in compliance with the terms set forth therein and
          Seller has delivered to LBI Holdings written evidence of such exercise
          as set forth in Exhibit E.

          7.1.2 Artlite Documents. Seller will exercise and enforce all its
          rights and will protect its interests under and will not waive any of
          its rights under the Artlite Documents. If Buyer reasonably requests
          additional documents or agreements from Artlite or its affiliates
          other than the Artlite Documents or any other documents relating to
          Artlite required hereunder, Seller shall use its best efforts (without
          incurring unreasonable costs) to obtain them. Seller shall use its
          best efforts to cause Artlite to update registrations of the Towers
          with the FCC to reflect LBI Sub as the owner of the Towers following
          the KEYH Closing Date.

          7.1.3 Due Inquiry. Seller will regularly and no less frequently than
          every two weeks from the date of this Agreement to the KEYH Closing
          Date and

                                       28



          immediately prior to the KEYH Closing Date inquire (by fax or other
          written document) as to whether Artlite has any knowledge of any facts
          that would require disclosure if Seller had knowledge of such fact
          under this Agreement, including Sections 4.3.1, 4.3.2, 4.3.3, 4.3.4,
          4.3.5, 4.4, 4.5, 4.7, 4.9, 4.10, 4.11, 4.13, 4.14, 4.15, 4.17, 4.18
          and 6.1.7 and 9.1.10. Seller will request Artlite to immediately
          inform Seller of any such facts and Seller will immediately inform
          Buyer of any such facts.

          7.2   Application for Commission Consent; Other Consents; Pre-Closing.

          7.2.1 FCC Consent; Compliance with Schedule II. Buyer and Seller agree
          to proceed as expeditiously as practical, and in no event later than
          fifteen business days after the execution hereof by Buyer and Seller,
          to file or cause to be filed, and amend or cause to be amended, as the
          case may be, the KEYH Assignment Application requesting FCC consent to
          the transaction contemplated by this Agreement. The Parties agree that
          the KEYH Assignment Application will be prosecuted in good faith and
          with due diligence, including filing and cooperating with all requests
          of the Commission. The Parties acknowledge that this Agreement will
          have to be filed with the FCC. The Parties further acknowledge that
          the KEYH Assignment Application may have to be amended from time to
          time prior to the date it is granted to reflect any changes resulting
          from Buyer's financing and related arrangements. To the extent that
          actions must be taken by Artlite in order to accomplish the foregoing,
          Seller shall be responsible for causing Artlite to take such actions,
          at no expense to Buyer. In the event that the Commission informs
          Seller or Buyer that it would be necessary to obtain the Commission's
          consent to the assignment of the KEYH FCC Licenses to Seller prior to
          the filing of an assignment application to assign such KEYH FCC
          Licenses to LBI Sub, the parties shall amend or, if necessary, refile
          the KEYH Assignment Application so as to provide for the assignment of
          the KEYH FCC Licenses directly from Artlite to LBI Sub and, in
          conjunction therewith, Seller shall cause Artlite to execute an
          agreement with LBI Sub, in form and substance acceptable to Buyer in
          its sole discretion and without in any way diminishing Seller's
          obligations to Buyer hereunder, which agreement shall provide for the
          assignment of the KEYH FCC Licenses in respect of Station KEYH to LBI
          Sub on the KEYH Closing Date subject to the satisfaction of the
          conditions to Buyer's obligations hereunder. Seller shall comply with
          the requirements set forth in Sections A and B of Schedule II.

          7.2.2 Other Governmental Consents. Promptly, but not later than ten
          business days following the filing of the KEYH Assignment Application,
          the Parties will proceed to prepare and file with all other
          appropriate governmental authorities (if any), such other requests for
          approval or waiver as may be required from such governmental
          authorities to permit the transfer of the KEYH FCC Licenses, Permits
          and the Purchased Assets, or as otherwise required in connection with
          the transaction contemplated hereby and will jointly, diligently and
          expeditiously prosecute, and will cooperate fully with each other in
          the prosecution of, such requests for approval or waiver and all
          proceedings necessary to secure such

                                       29



          approvals and waivers; Seller further agrees that promptly but no
          later than ten business days following the filing of the KEYH
          Assignment Application, Seller will proceed to prepare and file with
          all other appropriate governmental authorities (if any), such other
          requests for approval or waiver as may be required from such
          governmental authorities to permit the transfer of the KEYH FCC
          Licenses, Permits and the Purchased Assets from Artlite to Seller and
          Seller will diligently and expeditiously prosecute such requests for
          approval or waiver and all proceedings necessary to secure such
          approvals and waivers. To the extent that actions must be taken by
          Artlite in order to accomplish the foregoing, Seller shall be
          responsible for causing Artlite to take such actions, at no expense to
          Buyer. The Parties hereby acknowledge that no filings will be required
          under the HSRA because both the Purchase Price and the fair market
          value of the Purchased Assets and Assumed Contracts, together with the
          Purchased Assets and Assumed Contracts under the FM Asset Purchase
          Agreement, are less than $50,000,000.

          7.2.3 Control of the Station KEYH. This Agreement shall not be
          consummated until after the KEYH Closing Date. Prior to the KEYH
          Closing Date, Artlite shall continue to control the operation of
          Station KEYH with Buyer's interest in Station KEYH being limited to
          its rights under this Agreement, the KEYH Assignment Application and
          the AM Local Marketing Agreement.

          7.2.4 Preclosing. Buyer and Seller agree to hold a pre-closing
          (delivering to their respective counsel all closing documents to which
          they are a party) on a mutually agreeable date no later than at least
          3 business days prior to the scheduled KEYH Closing Date.

          7.2.5 Rescission. As Buyer has the option to close the transactions
          contemplated by this Agreement prior to the KEYH Final Grant Day, if
          prior to such time the Initial Grant is reversed or otherwise set
          aside pursuant to a final order of the FCC or the final, unappealable
          order of a court of competent jurisdiction, then the parties shall
          comply with such order in a manner that otherwise complies with
          applicable law and returns the parties to the status quo ante in all
          material respects, including the return of the Purchase Price to Buyer
          and the return of Station KEYH to Seller (it being understood that in
          such event Seller may, within the lesser of thirty (30) days or such
          shorter time as is available to allow the Parties to comply with the
          final order, designate one or more third parties, each of whom is
          qualified, in Seller's reasonable belief, to hold the KEYH FCC
          Licenses in accordance with the FCC rules, as the assignees of Station
          KEYH). In the event a third party challenges the KEYH Assignment
          Application, whether prior to or following Initial Grant, the Parties
          shall cooperate to rebut such challenge and, in the event that the
          Initial Grant is set aside as a result of such challenge, the parties
          shall exhaust all administrative and judicial appeals to protect the
          Initial Grant and have it become a final, unappealable grant at all
          times prior to the date on which a Party terminates this Agreement
          pursuant to Section 7.3 or 7.4.

                                       30



          7.3   Mutual Right to Terminate. Subject to the provisions of Section
7.6.2, if the purchase and sale transaction contemplated by the AM Asset
Purchase Agreement has not occurred on or before the first anniversary of the
date of this Agreement (or if the effective period of FCC's consent is extended
as described in Section 7.6.2 for a certain number of days due to any damage or
event that prevents broadcast transmissions of Station KEYH, then the date which
occurs that many days (but not exceeding in any event 120 days) after the first
anniversary of the date of this Agreement), either Buyer or Seller, if such
Party is not materially in default hereunder in a manner which has delayed the
occurrence of the purchase and sale transaction contemplated by the AM Asset
Purchase Agreement, may terminate this Agreement upon five days' written notice
to the other Party; provided, however, that subsequent to the consummation of
the transactions contemplated by the FM Asset Purchase Agreement pursuant to an
FM Only Closing, the date upon which this Agreement may be terminated pursuant
to this Section 7.3 shall be extended an additional twelve months.

          7.4   Buyer's Right to Terminate. Buyer, at its option, may terminate
this Agreement, so long as Buyer is not then in material default under or
material breach of this Agreement, upon the happening of any of the following
events:

          7.4.1 (i) The KEYH FCC Licenses or other Permits are modified as a
          result of any action initiated by Seller without the consent of Buyer,
          whose consent shall not be unreasonably withheld if such modification
          is required pursuant to a casualty event, or (ii) the KEYH FCC
          Licenses or other Permits are unilaterally modified by the FCC and
          such modification results in an adverse change in Buyer's ability to
          operate Station KEYH in a manner consistent with Seller's past
          operations thereof, or (iii) the terms of the KEYH FCC Licenses or
          other Permits are substantially modified resulting in an adverse
          change in Buyer's ability to operate Station KEYH in a manner
          consistent with Seller's past operations thereof; provided, however,
          that Sections 7.4.1(ii) and 7.4.1(iii) shall not apply if such
          modification is a result of a modification of FCC rules, regulations
          or policies affecting all members of the class of holders of FCC
          licenses to which Seller or Artlite belongs as the holder of the KEYH
          FCC Licenses;

          7.4.2 The KEYH Assignment Application is designated for a hearing
          before an administrative law judge;

          7.4.3 The FCC institutes revocation of license proceedings against
          Station KEYH; or

          7.4.4 Seller is in material breach of this Agreement ten business days
          after notice of breach and has not commenced and continued to
          prosecute diligently a cure therefor or such breach is or becomes
          incurable;

          7.4.5 The FM Asset Purchase Agreement has been terminated; or

          7.4.6 The transactions contemplated by the FM Asset Purchase Agreement
          have been consummated and the KEYH Local Marketing Agreement or the AM
          Local Marketing Agreement are no longer in full force and effect
          (unless such failure to

                                       31



          be in full force and effect with respect to the AM Local Marketing
          Agreement is due to a breach by LBI Holdings or Buyer under the AM
          Local Marketing Agreement).

          7.4.7 The transactions contemplated by the FM Asset Purchase Agreement
          have been consummated and the transactions contemplated by the AM
          Asset Purchase Agreement have failed to be consummated concurrently
          therewith for reasons other than (a) Buyer's material breach of any
          representations, warranties or covenants under this Agreement in any
          respect, (b) Seller's failure to cause Artlite to perform the actions
          that Seller has agreed to cause Artlite to perform under Section 7.2.1
          or 7.2.2, (c) Seller's failure to prohibit Artlite from taking certain
          actions that Seller has agreed to cause Artlite not to take under
          Section 6.2, (d) Seller's failure to deliver one or more items
          required to be delivered under Section 9.1 solely due to the failure
          by Artlite or any of its affiliates to perform the necessary actions
          to cause such delivery or (e) breach of the representations and
          warranties set forth in Article IV solely due to or solely relating to
          Artlite.

          7.5   Seller's Right to Terminate. Seller, at its option, may
terminate this Agreement, so long as Seller is not then in material default
under or material breach of this Agreement, upon the happening of any of the
following events:

          7.5.1 The KEYH Assignment Application is designated for a hearing
          before an administrative law judge unless the KEYH Assignment
          Application is so designated as a result of any action taken by either
          Artlite or Seller; or

          7.5.2 Buyer is in material breach of this Agreement ten business days
          after notice of breach and has not commenced and continued to
          prosecute diligently a cure therefor or such breach is or becomes
          incurable.

          7.6   Risk of Loss.

          7.6.1 The risk of loss and damage, whether by force majeure or for any
          other reason, to the Purchased Assets or the operation of Station KEYH
          between the date of this Agreement and the KEYH Closing Date will be
          on Seller. Seller shall take all reasonable steps (including the
          exercise and enforcement of all rights under the Artlite Documents) to
          repair, replace and restore the Purchased Assets as soon as possible
          after any loss or damage, it being understood and agreed that all
          insurance proceeds with respect thereto ("Proceeds") will be applied
          to or reserved for such replacement, restoration or repair, but that
          Seller and Artlite will have no obligation to repair, replace or
          restore in excess of the Proceeds (plus any applicable deductible
          payment). In instances where the loss and damage to the Purchased
          Assets, together with any loss or damage to the Purchased Assets as
          defined in the FM Asset Purchase Agreement, is less than $1,500,000 in
          the aggregate (or, if the loss or damage is to the tower used in the
          operation of the Station KQQK, then $2,500,000 in the aggregate) in
          Buyer's reasonable estimation, Buyer's sole remedy if Seller elects
          not to (or does not cause Artlite to or causes Artlite not to) fully
          repair, replace or restore will be to close in

                                       32



          accordance with Section 7.6.3 below. In instances where the loss and
          damage to the Purchased Assets, together with any loss or damage to
          the Purchased Assets as defined in the FM Asset Purchase Agreement, is
          equal to or greater than $1,500,000 (net of insurance proceeds to the
          extent received and applied to repair, replace or restore the damaged
          Purchased Assets or the Purchased Assets as defined in the FM Asset
          Purchase Agreement), in the aggregate (or, if the loss or damage is to
          the tower used in the operation of the Station KQQK, then $2,500,000
          (net of insurance proceeds to the extent received and applied) in the
          aggregate), in Buyer's reasonable estimation, Buyer's sole remedies if
          Seller elects not to (or does not cause Artlite to or causes Artlite
          not to) fully repair, replace or restore will be (i) to terminate both
          this Agreement and, prior to an FM Only Closing, the FM Asset Purchase
          Agreement, in which case the Escrow Deposit will be delivered to LBI
          Holdings, or (ii) to close in accordance with Section 7.6.3 below.

          7.6.2 In the event of any damage or event that prevents broadcast
          transmissions of Station KEYH in the normal and usual manner and
          substantially in accordance with the KEYH FCC Licenses (other than
          scheduled ordinary course maintenance), Seller will give prompt notice
          thereof to Buyer and Buyer, in addition to its other rights and
          remedies, will have the right to postpone the KEYH Closing Date until
          transmission in accordance with the KEYH FCC Licenses has been
          resumed. The postponed KEYH Closing Date will be any date within the
          effective period of the FCC's consent to assignment of the KEYH FCC
          Licenses to LBI Sub as Buyer may designate by not less than five
          business days' prior written notice to Seller. During the period of
          postponement, Seller shall use its best efforts to resume broadcast
          transmissions. In the event transmission in accordance with the KEYH
          FCC Licenses cannot be resumed within the effective period of the
          FCC's consent to assignment of the KEYH FCC Licenses to LBI Sub, the
          Parties will join in (and to the extent Artlite's cooperation is
          desirable or necessary, Seller will be responsible, at its expense,
          for causing Artlite to join in) an application or applications
          requesting the FCC to extend the effective period of its consent for
          one or more periods not to exceed 120 days in the aggregate. If
          transmission in accordance with the KEYH FCC Licenses has not been
          resumed so that the KEYH Closing Date does not occur within such
          extended period, or any agreed extension thereof, Buyer will have the
          right, by giving written notice to Seller within five business days
          after the expiration of such 120-day period, or any agreed extension
          thereof, to terminate this Agreement and, prior to an FM Only Closing,
          the FM Asset Purchase Agreement forthwith without any further
          obligation, in which case the Escrow Deposit will be delivered to LBI
          Holdings. In the event transmission is not in accordance with the KEYH
          FCC Licenses but substantially in accordance with the KEYH FCC
          Licenses, Buyer agrees to negotiate in good faith with Seller for no
          more than twenty business days prior to exercising its rights under
          this Section (which negotiation shall not result in an extension of
          the 120 day period).

          7.6.3 If any loss of or damage to the Purchased Assets (including but
          not limited to any Tower or any Transmitter Building) occurs prior to
          the KEYH Closing

                                       33



          Date and full repair, replacement or restoration of all Purchased
          Assets has not been made on or before the KEYH Closing Date (as the
          KEYH Closing Date may be extended as provided in Section 7.6.2), or
          the cost thereof is greater than the Proceeds (plus any applicable
          deductible), then Buyer will be entitled, but not obligated (except in
          the instances described in the second to the last sentence in Section
          7.6.1), to accept the Purchased Assets in their then-current condition
          and will receive an abatement or reduction in the Purchase Price in an
          amount equal to the difference between the amount necessary to fully
          repair or replace the damaged Purchased Assets and the amount of the
          unused Proceeds, in which case Buyer will be entitled to all the
          unused Proceeds and payment of the deductible amount. If Buyer elects
          to accept (or, in the instance described in the second to the last
          sentence in Section 7.6.1, Buyer accepts) damaged Purchased Assets at
          a reduced Purchase Price, the Parties agree to cooperate in
          determining the amount of the reduction to the Purchase Price in
          accordance with the provisions hereof.

          7.7   Transfer Taxes and FCC Filings; Expenses; Bulk Sales.

          7.7.1 Transfer Taxes; FCC Filings. All federal, state or local taxes
          based on excise, sales or use taxes or similar taxes or costs imposed
          on or in connection with the sale, purchase or transfer of the
          Purchased Assets and assumption of the Assumed Contracts by Buyer
          pursuant hereto will be borne one-half by Buyer and one-half by
          Seller; provided, however, if the representation by Seller made
          pursuant to the last sentence of Section 4.5 should be false, all such
          taxes payable by Buyer shall be considered a loss resulting from
          breach of such representation by Seller and be subject to
          indemnification pursuant to Article X. All FCC filing fees relating to
          the KEYH Assignment Application will be shared equally by Buyer and
          Seller; provided, further, that to the extent that such filing fees
          are increased as a result of the need to assign any assets or KEYH FCC
          Licenses or Permits from Artlite to Seller, Buyer will bear no such
          portion of such increased costs. Buyer shall be responsible for the
          payment of the filing fees in connection with the filing (if any)
          required under the HSRA.

          7.7.2 Expenses. Except as otherwise provided herein, Buyer and Seller
          shall each pay its own expenses incident to the negotiation,
          preparation and performance of this Agreement and consummation of the
          transaction contemplated hereby, including but not limited to the
          fees, expenses and disbursements of its accountants and counsel. Buyer
          shall have no responsibility for any fees or expenses incurred by
          Artlite in connection with the transactions contemplated by this
          Agreement or the Artlite Documents.

          7.7.3 Compliance With Bulk Sales Laws. If applicable, any loss,
          liability, obligation or cost suffered by Seller or Buyer as the
          result of the failure of Seller or Buyer to comply with the provisions
          of any bulk sales laws applicable to the transfer of the Purchased
          Assets as contemplated by this Agreement will be borne one-half by
          Buyer and one-half by Seller.

                                       34



          7.8  Termination of KEYH Local Marketing Agreement. Seller
acknowledges that as of the KEYH Closing Date it will no longer have any rights
under the KEYH Local Marketing Agreement with respect to Station KEYH and that
Buyer shall not assume any obligations to Seller or Artlite thereunder.

          7.9  Invoices. If advertisers whose advertisements air on Station KEYH
on or after the Effective Date make payments prior to, on or after the
consummation of the transactions contemplated by this Agreement to Seller rather
than to Buyer with respect to such advertisements, Seller shall hold such
amounts in trust for Buyer, shall promptly notify Buyer of the receipt of such
funds and shall forward such amounts to Buyer within five business days. If
advertisers whose advertisements aired on Station KEYH prior to the Effective
Date make payments prior to, on or after the consummation of the transactions
contemplated by this Agreement to Buyer rather than to Seller with respect to
such pre-Effective Date advertisements, Buyer shall hold such amounts in trust
for Sellers, shall promptly notify Sellers of the receipt of such funds and
shall forward such amounts to Sellers within five business days.

          7.10 Determination of KEYH Closing Date. The KEYH Closing Date shall
be 5:00 p.m. CST on the 5th business day following the KEYH Final Grant Day or
such other time as is mutually agreed to in writing by the Parties; provided,
however, that (i) at Buyer's election, the KEYH Closing Date shall be deemed not
to have occurred if the purchase and sale transaction under the FM Asset
Purchase Agreement has not theretofore been consummated and (ii) at Buyer's
election, Buyer may cause the KEYH Closing Date to occur prior to the KEYH Final
Grant Day so long as the Initial Grant has occurred. Buyer shall in the case of
clause (ii) above choose a date no earlier than 5:00 p.m. on the 5th business
day following notice of such determination to Seller; provided, however, that
Buyer may revoke such determination at any time prior to the consummation of the
transactions contemplated hereby with respect to Station KEYH, in which case,
the KEYH Closing Date shall be determined pursuant to the remainder of this
Section 7.10.

          7.11 Mutual Releases. If this Agreement terminates after an FM Only
Closing and the transactions contemplated by this Agreement, including but not
limited to transfer of the KEYH FCC Licenses and Permits to LBI License Sub and
the transfer of the Purchased Assets to LBI Sub, have not occurred, then the
Escrow Deposit shall be delivered to LBI Holdings and Buyer and Seller will
execute mutual releases with respect to this Agreement in form and substance
reasonably satisfactory to the Parties.

          7.12 Artlite. Seller shall and shall cause Artlite to ratify the
Artlite Documents to the extent that such documents were entered into at a time
that the Artlite Entity which was a party to such a document was a corporation
with "forfeited existence" or were entered into using an incorrect corporate
name. Seller shall make best efforts to correct and cause Artlite to correct any
name discrepancies in filings with the FCC by Artlite or Seller and to have
Artlite's name properly recorded in the FCC database (and shall cause Artlite to
send one or more letters to the FCC in form and substance reasonably
satisfactory to Buyer with respect to such name discrepancy).

                                       35



          7.13  Recipient Agreement. Seller shall use its best efforts to cause
all Sales Proceeds Recipients to promptly after the date hereof execute and
deliver the Recipient Agreement.

          7.14  Auxiliary License Application. At the request of Buyer, Seller
shall use its best efforts to cause Artlite to file such documents with the FCC
as are necessary to transfer the location of the license for Aural Studio
Transmitter Link WLG401 to a location designated by Buyer.

          7.15  Further Estoppel Certificate. Seller shall use its best efforts
to obtain the lessor estoppel certificate in the form attached to this Agreement
as Exhibit F together with such changes as may reasonably be negotiated by the
Parties with respect to each lease (including confirmation that each lease is in
full force and effect and no defaults exist thereunder and confirmation of the
terms of each lease).

                                  ARTICLE VIII
                               CLOSING CONDITIONS

          8.1   Conditions Precedent to Buyer's Obligations. The obligation of
Buyer to consummate the transaction contemplated hereby is subject to the
fulfillment prior to and as of the consummation of the transaction contemplated
hereby on the KEYH Closing Date of each of the following conditions, each of
which may be waived (but only by an express written waiver) in the sole
discretion of Buyer:

          8.1.1 Commission Approval. The definition of KEYH Closing Date shall
          have been satisfied.

          8.1.2 Representations and Warranties. All representations and
          warranties of Seller contained in this Agreement shall be true and
          correct in all material respects at and as of the KEYH Closing Date as
          if made on the KEYH Closing Date except as specifically contemplated
          by this Agreement (it being understood and agreed by the Parties
          hereto that for purposes of this Section 8.1.2, that the
          representations and warranties of Seller contained in this Agreement
          or in any certificates delivered pursuant hereto shall mean such
          representations and warranties of Seller after disregarding all
          knowledge qualifications of Seller contained in such representations
          and warranties that are in parenthetical (including without limitation
          such knowledge qualifications in Sections 4.3.1, 4.3.2, 4.3.3, 4.3.4,
          4.3.5, 4.4, 4.5, 4.7, 4.9, 4.10, 4.11, 4.13, 4.14, 4.15, 4.17, 4.18
          and 9.1.10) and that such representations and warranties shall not be
          qualified in any respect by such knowledge qualifications that are in
          parenthetical).

          8.1.3 Performance. Seller shall have performed and complied in all
          material respects with the covenants, agreements and conditions
          required by this Agreement to be performed or complied with by it
          prior to and on the KEYH Closing Date.

          8.1.4 FCC Licenses. Artlite shall be the holder of the KEYH FCC
          Licenses. There shall not have been any modification of any of the
          KEYH FCC Licenses

                                       36



          (excluding any modification of FCC rules, regulations or policies
          affecting all members of the class of holders of FCC licenses to which
          Seller or Artlite belongs as the holder of the KEYH FCC Licenses) that
          affects Buyer's ability to conduct the operation of Station KEYH after
          the KEYH Closing Date in accordance with Seller's past operations or
          that otherwise has or is reasonably likely to have a material, adverse
          effect on Station KEYH. No proceeding shall be pending, the effect of
          which would be to revoke, cancel, fail to renew, suspend, impair or
          modify adversely any of the KEYH FCC Licenses specifically.

          8.1.5 Consents. All Required Consents shall have been obtained and
          delivered to Buyer. Such Required Consents shall include, without
          limitation, (i) executed consents and releases substantially in the
          form of Exhibit H annexed hereto from the creditors of Seller or
          Artlite set forth on Schedule III consenting to the transaction
          contemplated hereby and releasing their Encumbrances relating to the
          Purchased Assets (together with executed UCC termination statements,
          amendments to UCC financing statements and other documents and
          instruments implementing such release) and (ii) other Required
          Consents in form and substance reasonably satisfactory to Buyer. In
          addition, the lessors under the leases for the Transmitter Sites shall
          have executed and delivered to Buyer estoppels in substantially the
          form of the document described in clause (12) of the Artlite Documents
          and presented prior to the date hereof to Buyer.

          8.1.6 Litigation and Insolvency. Except for matters affecting the
          radio broadcasting industry generally, no litigation, action, suit,
          judgment, proceeding, complaint or investigation shall be pending or
          outstanding before any forum, court, or governmental body, department
          or agency of any kind, relating to the operation of Station KEYH or
          which has the stated purpose or the probable effect of enjoining or
          preventing the consummation of this Agreement, or the transaction
          contemplated hereby or to recover damages by reason thereof, or which
          questions the validity of any action taken or to be taken pursuant to
          or in connection with this Agreement; provided that if there is
          pending any litigation relating to Station -------- KEYH that could
          not reasonably be expected to or would not reasonably be expected to
          adversely affect the operation of Station KEYH in accordance with
          Seller's past operations or that could not reasonably be expected to
          or would not reasonably be expected to prevent a consummation of the
          transactions contemplated hereby, then the existence of such
          litigation shall not be considered as the failure of a condition to
          Buyer's obligation to close if its lenders agree to fund the loans
          that enable the consummation of the transactions contemplated hereby
          despite the existence of such litigation (and LBI Holdings, Buyer and
          Seller shall cooperate to seek to convince such lenders (but shall not
          be obligated to mislead such lenders in any way) to fund such loans
          despite the existence of such litigation). No insolvency proceedings
          of any character including, without limitation, receivership,
          reorganization, composition or arrangement with creditors, voluntary
          or involuntary, affecting Seller, Artlite or any of their respective
          assets or properties (other than the stock of its subsidiaries (other
          than any subsidiary that is a Seller hereunder)), shall be pending,
          and neither Seller nor

                                       37



          Artlite shall have taken any action in contemplation of, or which
          would constitute the basis for, the institution of any such insolvency
          proceedings.

          8.1.7  Artlite. Seller shall have delivered to LBI Holdings and Buyer
          evidence in form and substance reasonably satisfactory to LBI Holdings
          and Buyer and their counsel that each of Artlite and the other Artlite
          Entities is a corporation validly existing and in good standing under
          the laws of the State of Texas and that it is no longer a corporation
          with "forfeited existence".

          8.1.8  Termination of KEYH Local Marketing Agreement. The KEYH Local
          Marketing Agreement shall have terminated and neither Seller nor
          Artlite shall have any rights with regards to the Purchased Assets or
          Station KEYH (it being understood that lessors under the applicable
          leases will continue to be the lessors thereunder).

          8.1.9  Recipient Agreement. No parties to the Sale Proceeds Recipients
          (other than LBI Holdings and Buyer) shall be in breach of the
          Recipient Agreement.

          8.1.10 Simultaneous Closing or FM Only Closing. The FM Only Closing
          shall have previously occurred or the consummation of the purchase and
          sale transactions contemplated hereunder shall occur as part of a
          Simultaneous Closing.

          8.1.11 Satisfaction of Schedule II. The requirement in Section B of
          Schedule II shall be satisfied.

          8.2    Conditions Precedent to Seller's Obligations. The obligation of
Seller to consummate the transaction contemplated hereby is subject to the
fulfillment prior to and as of the consummation of the transaction contemplated
hereby on the KEYH Closing Date of each of the following conditions, each of
which may be waived (but only by an express written waiver) in the sole
discretion of Seller:

          8.2.1  Commission Approval. The condition set forth in Section 8.1.1
          shall have been satisfied.

          8.2.2  Representations and Warranties. All representations and
          warranties of LBI Holdings and Buyer contained in this Agreement shall
          be true and correct in all material respects at and as of the KEYH
          Closing Date as if made on the KEYH Closing Date, except as
          specifically contemplated by this Agreement.

          8.2.3  Performance. LBI Holdings and Buyer shall each have performed
          and complied in all material respects with the covenants, agreements
          and conditions required by this Agreement to be performed or complied
          with by it prior to and at the KEYH Closing Date.

          8.2.4  Litigation and Insolvency. Except for matters affecting the
          radio broadcasting industry generally, no litigation, action, suit,
          judgment, proceeding, complaint or investigation shall be pending or
          outstanding before any forum,

                                       38



          court or governmental body, department or agency of any kind which has
          the stated purpose or the probable effect of enjoining or preventing
          the consummation of this Agreement or the transaction contemplated
          hereby or to recover damages by reason thereof, or which questions the
          validity of any action taken or to be taken pursuant to or in
          connection with this Agreement; provided that if there is pending any
          litigation relating to Station KEYH that could not reasonably be
          expected to or would not reasonably be expected to adversely affect
          the operation of Station KEYH in accordance with Seller's past
          operations or that could not reasonably be expected to or would not
          reasonably be expected to prevent a consummation of the transactions
          contemplated hereby then the existence of such litigation shall not be
          considered as the failure of a condition to Seller's obligation to
          close if Buyer's lenders agree to fund the loans that enable the
          consummation of the transactions contemplated hereby despite the
          existence of such litigation (and LBI Holdings, Buyer and Seller shall
          cooperate to seek to convince such lenders (but shall not be obligated
          to mislead such lenders in any way) to fund such loans despite the
          existence of such litigation). No insolvency proceedings of any
          character including, without limitation, reorganization, receivership,
          composition or arrangement with creditors, voluntary or involuntary,
          affecting Buyer or any of its assets or properties shall be pending,
          and Buyer shall not have taken any action in contemplation of, or
          which would constitute the basis for, the institution of any such
          insolvency proceedings.

          8.2.5 Simultaneous Closing or FM Only Closing. The FM Only Closing
          shall have previously occurred or the consummation of the purchase and
          sale transactions contemplated hereunder shall occur as part of a
          Simultaneous Closing.

                                   ARTICLE IX
                      ITEMS TO BE DELIVERED AT THE CLOSING

          9.1   Seller's Performance At Closing. On the KEYH Closing Date, at
the Closing Place (i) Seller shall have executed and delivered (or shall have
caused Artlite through Seller, as the case may be, to execute and deliver) the
assignments relating to the KEYH FCC Licenses and the Permits and all
applications therefor, together with any renewals, extensions, additions or
modifications thereof, (ii) Seller shall have executed and delivered to Buyer
(or shall have caused Artlite to execute and deliver) all bills of sale,
endorsements, assignments and other instruments of conveyance and transfer
reasonably satisfactory in form and substance to Buyer and its counsel,
effecting the sale, transfer, assignment and conveyance of the Purchased Assets
to Buyer. Without limiting the generality of the foregoing, Seller shall have
executed and delivered (or caused to be executed and delivered) or shall have
transferred or performed, as applicable, the following:

          9.1.1 One or more bills of sale executed by Artlite conveying to
          Seller all of the Artlite Assets and one or more bills of sale
          conveying to LBI all of the Tangible Personal Property and
          Intellectual Property to be acquired by Buyer hereunder;

                                       39



          9.1.2  An assignment assigning to LBI Sub the KEYH FCC Licenses from
          Seller to document the second step of the two-step pass through of
          such KEYH FCC Licenses to LBI Sub;

          9.1.3  An assignment assigning to Seller the KEYH FCC Licenses from
          Artlite to document the first step of the two-step pass through of
          such KEYH FCC Licenses to LBI Sub;

          9.1.4  An assignment assigning to LBI each of the Assumed Contracts
          together with the Required Consents and the original copies of the
          Assumed Contracts;

          9.1.5  To the extent not previously transferred pursuant to Section
          6.1.10, the data, documents, copies, files, records and logs referred
          to in Section 2.1.4 and Seller shall have transferred data from
          Seller's computer systems to Buyer's computer systems on or prior to
          the KEYH Final Grant Day;

          9.1.6  Proof of payment of prepaid expenses made by Seller for
          services to be provided to Station KEYH, after the KEYH Closing Date
          under the Assumed Contracts;

          9.1.7  Seller shall have paid LBI an amount equal to the aggregate
          advance payments by advertisers and other advance payments for
          services to be provided by Station KEYH after the KEYH Closing Date
          under the Assumed Contracts (calculated as of 5 days before, and
          updated as of, the KEYH Closing Date);

          9.1.8  Opinions of Seller's counsel, Seller's Texas counsel and
          Seller's FCC counsel, each dated as of the KEYH Closing Date
          substantially in the form of Exhibits "B-1", "B-2" and "C";

          9.1.9  Copies of resolutions of the Board of Directors of EDC, EDC Sub
          and EDC License Sub, in each case certified by the Party's Secretary,
          authorizing the execution, delivery and performance of this Agreement
          and the transaction contemplated hereby;

          9.1.10 A certificate, dated as of the KEYH Closing Date, executed by
          the President and Chief Executive Officer of Seller, to the effect
          that, (i) the representations and warranties of Seller contained in
          this Agreement are true and complete in all material respects on and
          as of the KEYH Closing Date as though made on and as of the KEYH
          Closing Date, except as specifically contemplated by this Agreement
          (it being understood and agreed by the Parties hereto that for
          purposes of this Section 9.1.10, that the representations and
          warranties of Seller contained in this Agreement or any certificates
          delivered pursuant hereto shall mean such representations and
          warranties of Seller after disregarding all knowledge qualifications
          of Seller contained in such representations and warranties that are in
          parenthetical (including without limitation such knowledge
          qualifications in Sections 4.3.1, 4.3.2, 4.3.3, 4.3.4, 4.3.5, 4.4,
          4.5, 4.7, 4.9, 4.10, 4.11, 4.13, 4.14, 4.15, 4.17, 4.18 and 9.1.10)
          and that such representations and warranties shall not be qualified in
          any respect by such knowledge qualifications

                                       40



          in parenthetical); (ii) Seller has complied in all material respects
          with or performed in all material respects all terms, covenants,
          agreements and conditions required by this Agreement to be complied
          with or performed by it prior to and at the KEYH Closing Date; (iii)
          all Required Consents have been obtained by Seller and Artlite and
          delivered to Buyer; (iv) except for matters affecting the radio
          broadcasting industry generally and except for such litigation
          described in the proviso in Section 8.1.6, each of which has been
          disclosed in writing to Buyer, no litigation, action, suit, judgment,
          proceeding or investigation is pending or outstanding or, to the
          knowledge of Seller (after due inquiry with Artlite) or (to Seller's
          knowledge) Artlite, threatened, before any forum, court, or
          governmental body, department or agency of any kind, relating to the
          operation of Station KEYH or which has the stated purpose or the
          probable effect of enjoining or preventing the consummation of this
          Agreement or the transaction contemplated hereby or to recover damages
          by reason thereof, or which questions the validity of any action taken
          or to be taken pursuant to or in connection with this Agreement; (v)
          to the knowledge of Seller (after due inquiry with Artlite) or (to
          Seller's knowledge) Artlite, no insolvency proceedings of any
          character including, without limitation, receivership, reorganization,
          composition or arrangement with creditors, voluntary or involuntary,
          affecting Seller or Artlite or any of their respective material assets
          or properties is pending, and neither Seller nor Artlite has taken any
          action in contemplation of, or which would constitute the basis for,
          the institution of any such insolvency proceedings; (vi) the aggregate
          amount of advance payments by advertisers and other advance payments
          for services to be provided by or for Station KEYH after the KEYH
          Closing Date under the Assumed Contracts referred to in Section 2.1.2
          equals the amount paid to Buyer pursuant to Section 9.1.7 and (vi)
          Seller has performed the requirements of this Section 9.1;

          9.1.11 Written evidence reasonably satisfactory to Buyer that Seller
          has validly exercised its rights to purchase Station KEYH (including
          any related Purchased Assets and KEYH FCC Licenses) under the Artlite
          Purchase Agreement and has completed the acquisition of the Artlite
          Assets, including evidence in form and substance reasonably
          satisfactory to Buyer that Artlite shall have executed and delivered
          to Seller all bills of sale, endorsements, assignments and other
          instruments of conveyance and transfer reasonably satisfactory in form
          and substance to Buyer and its counsel, effecting the sale, transfer,
          assignment and conveyance of such Artlite Assets to Seller, including,
          without limitation, one or more bills of sale conveying to Seller such
          Artlite Assets and copies of the Required Consents required in
          connection with the consummation of such transactions;

          9.1.12 Written instructions to terminate the Escrow Agreement and
          deliver the Escrow Deposit to LBI Holdings executed by EDC; and

          9.1.13 Such other instruments of transfer, documents or certificates
          requested by Buyer as may be necessary or appropriate to transfer to
          and vest in Buyer all of Seller's right, title and interest in and to
          the Purchased Assets or as reasonably

                                       41



          may be requested by Buyer to evidence consummation of this Agreement
          and the transaction contemplated hereby.

          9.2   Buyer's Performance at Closing. On the KEYH Closing Date at the
Closing Place, Buyer will execute and deliver or cause to be delivered to
Seller:

          9.2.1 The monies payable as set forth in Section 3.1.1 by wire
          transfer of federal funds;

          9.2.2 An opinion of Buyer's counsel dated as of the KEYH Closing Date
          substantially in the form of Exhibit "D";

          9.2.3 Copies of resolutions of the Boards of Directors of LBI
          Holdings, LBI and LBI Sub, in each case certified by its Secretary,
          authorizing the execution, delivery and performance of this Agreement
          and the transaction contemplated hereby;

          9.2.4 A certificate, dated as of the KEYH Closing Date, executed by
          the Executive Vice President of LBI Holdings and Buyer, to the effect
          that (i) the representations and warranties of LBI Holdings and Buyer
          contained in this Agreement are true and complete in all material
          respects on and as of the KEYH Closing Date as though made on and as
          of the KEYH Closing Date, except as specifically contemplated by this
          Agreement; (ii) LBI Holdings and Buyer have each complied in all
          material respects with or performed in all material respects all
          terms, covenants, agreements and conditions required by this Agreement
          to be complied with or performed by it prior to and at the KEYH
          Closing Date; (iii) except for matters affecting the radio
          broadcasting industry generally and except for such litigation
          described in the proviso in Section 8.2.4, no litigation, action,
          suit, judgment, proceeding or investigation is pending or outstanding
          or, to LBI Holdings' and Buyers' knowledge, threatened, before any
          forum, court or governmental body, department or agency of any kind
          which has the stated purpose or the probable affect of enjoining or
          preventing the consummation of this Agreement or the transaction
          contemplated hereby or to recover damages by reason thereof, or which
          questions the validity of any action taken or to be taken pursuant to
          or in connection with this Agreement; (iv) to the knowledge of LBI
          Holdings and Buyer, no insolvency proceedings of any character
          including, without limitation, receivership, reorganization,
          composition or arrangement with creditors, voluntary or involuntary,
          affecting LBI Holdings or Buyer or any of their respective assets or
          properties is pending, and neither LBI Holdings nor Buyer has taken
          any action in contemplation of, or which would constitute the basis
          for, the institution of any such insolvency proceedings; and (v) LBI
          Holdings and Buyer have each performed the requirements of this
          Section 9.2;

          9.2.5 A writing evidencing the assumption by Buyer of each of the
          Assumed Contracts consistent with the provisions of this Agreement
          reasonably satisfactory in form and substance to Seller and its
          counsel; and

                                       42



          9.2.6  Such other instruments, documents and certificates as
          reasonably may be requested by Seller to consummate this Agreement and
          the transaction contemplated hereby.

                                   ARTICLE X
                                 INDEMNIFICATION

          10.1   Indemnification by Seller. It is understood and agreed that LBI
Holdings and Buyer do not assume and will not be obligated to pay any liability
of Seller under the terms of this Agreement or otherwise and will not be
obligated to perform any obligations of Seller of any kind or manner, except in
connection with the Assumed Contracts and with respect thereto only to the
extent such obligations arise subsequent to the consummation of the transaction
contemplated hereby on the KEYH Closing Date. Seller, hereby agrees to
indemnify, defend and hold harmless LBI Holdings and Buyer, their successors and
assigns, for a period of eighteen months following the consummation of the
transaction contemplated hereby on the KEYH Closing Date, from and against:

          10.1.1 Any and all Damages occasioned by, arising out of or resulting
          from the operation of Station KEYH prior to the KEYH Closing Date
          (other than such Damages arising directly from Buyer's actions under
          the AM Local Marketing Agreement), including, but not limited to, any
          and all claims, liabilities and obligations arising or required to be
          performed prior to the KEYH Closing Date under any of the Assumed
          Contracts or otherwise with respect to Seller's or Artlite's ownership
          and operation of Station KEYH prior to the KEYH Closing Date;

          10.1.2 Any and all Damages occasioned by, arising out of or resulting
          from any material misrepresentation, material breach of warranty or
          covenant, or material default or material nonfulfillment of any
          agreement on the part of Seller under this Agreement, or from any
          material misrepresentation in or material breach of any certificate,
          agreement, appendix, Schedule, or other instrument furnished to LBI
          Holdings or Buyer pursuant to this Agreement or in connection with the
          transaction contemplated hereby (it being understood and agreed by the
          Parties hereto that for purposes of this Section 10.1.2, that for
          purposes of determining such misrepresentation, breach of warranty or
          covenant, or material default or material nonfulfillment, all
          knowledge qualifications in the representations and warranties of
          Seller contained in this Agreement or in any certificates delivered
          pursuant hereto that are in parenthetical (including without
          limitation such knowledge qualifications in Sections 4.3.1, 4.3.2,
          4.3.3, 4.3.4, 4.3.5, 4.4, 4.5, 4.7, 4.9, 4.10, 4.11, 4.13, 4.14, 4.15,
          4.17, 4.18 and 9.1.10) shall be disregarded and no such representation
          or warranty shall be qualified in any respect by such knowledge
          qualifications in parenthetical); provided, that any breach of Section
          7.9 shall be deemed material regardless of the cash value of such
          breach;

          10.1.3 Any and all Damages occasioned by, arising out of or resulting
          from any legal, administrative, or tax proceedings pursuant to which
          Seller is or could be made liable for any taxes, penalties, interest,
          or other charges and the liability for

                                       43



          which is extended to LBI Holdings or Buyer as transferee of the
          business of Station KEYH or otherwise for any transferee liability for
          any taxes, penalties, or interest due or to become due from Seller;
          and

          10.1.4 Any and all Damages occasioned by, arising out of or resulting
          from any claim by Artlite or any other person or entity that any
          agent, broker, investment or commercial banker, person or firm acting
          on behalf of Artlite or under authority of Artlite is or will be
          entitled to any broker, finder, financial advisor fee or any other
          commission or similar fee directly or indirectly in connection with
          the transaction contemplated by this Agreement.

          10.2   Indemnification by LBI Holdings and Buyer. LBI Holdings and
Buyer agree to indemnify, defend and hold harmless Seller, its successors and
assigns, for a period of eighteen months following the consummation of the
transaction contemplated hereby on the KEYH Closing Date from and against:

          10.2.1 Any and all Damages occasioned by, arising out of or resulting
          from the operation of Station KEYH on or subsequent to the KEYH
          Closing Date, including, but not limited to, any and all claims,
          liabilities and obligations arising or required to be performed on or
          subsequent to the KEYH Closing Date under any of the Assumed Contracts
          or otherwise with respect to Buyer's ownership and operation of
          Station KEYH from and after the KEYH Closing Date; and

          10.2.2 Any and all Damages occasioned by, arising out of or resulting
          from any material misrepresentation, material breach of warranty or
          covenant, or material default or material nonfulfillment, of any
          agreement on the part of LBI Holdings or Buyer under this Agreement,
          or from any material misrepresentation in or material breach of any
          certificate, agreement, appendix, Schedule or other instrument
          furnished to Seller pursuant to this Agreement or in connection with
          the transaction contemplated hereby; provided, that any breach of
          Section 7.9 shall be deemed material regardless of the cash value of
          such breach.

          10.3   Third-Party Claims. In the event of third party claims, each
Party ("Indemnified Party") shall give written notice to the other Party
("Indemnifying Party") as soon as practicable and in no event later than ten
business days after the Indemnified Party has knowledge of any facts which in
its opinion entitle or may entitle it to indemnification under this Section
10.3. Seller, on the one hand, and LBI Holdings and Buyer, on the other, shall
be considered a single Party for purposes of this Section 10.3 and Section 10.4.
However, failure to give such notice will not preclude the Indemnified Party
from seeking indemnification hereunder, unless, and to the extent that, such
failure adversely affects to a material degree the Indemnifying Party's ability
to defend against such a claim. The Indemnifying Party will promptly defend such
a claim by counsel approved by the Indemnified Party, which approval shall not
be unreasonably withheld, and the Indemnified Party may appear at any
proceeding, at its own cost, by counsel of its own choosing and will otherwise
reasonably cooperate in the defense of such claim, provided that the
Indemnifying Party shall promptly reimburse the Indemnified Party all reasonable
costs, expenses and attorneys' fees incurred in the course of cooperating in the
defense of such claim. The Indemnifying Party shall be responsible for all

                                       44



costs and expenses of any settlement. If the Indemnifying Party within ten
business days after notice of a claim fails to defend the Indemnified Party, the
Indemnified Party will be entitled to undertake the defense, compromise or
settlement of such claim at the expense of and for the account and risk of the
Indemnifying Party. Anything in this Section to the contrary notwithstanding:

          10.3.1 If LBI Holdings or Buyer is the Indemnified Party and in the
          reasonable judgment of LBI Holdings or Buyer there is a reasonable
          probability that a claim may materially and adversely affect the
          Indemnified Party or its continued operation of Station KEYH, the
          Indemnified Party will have the right, at its own cost and expense, to
          undertake the prosecution, compromise and settlement of such claim,
          and the Indemnifying Party will cooperate with the Indemnified Party;

          10.3.2 If the facts giving rise to indemnification hereunder involve a
          possible claim by the Indemnified Party against a third party, the
          Indemnified Party will have the right, at its own cost and expense, to
          undertake the prosecution, compromise and settlement of such claim;
          and

          10.3.3 The Indemnifying Party will not, without the consent of the
          Indemnified Party, enter into or settle or compromise any claim or
          consent to any entry of judgment which (i) in the reasonable judgment
          of LBI Holdings or Buyer may materially and adversely affect LBI
          Holdings or Buyer or their continued operation of Station KEYH, and
          (ii) does not include as an unconditional term thereof the giving by
          the claimant or the plaintiff to the Indemnified Party of a full and
          complete release from all liability in respect to such claim.

          10.4   Cap and Basket. Neither Party will be entitled to
indemnification under this Article X until Damages to such Party (combined with
any Damages to such Party under the FM Purchase Agreement) exceed $50,000 in the
aggregate (except for claims pursuant to Section 7.9 of this Agreement and
Section 7.8 of the FM Asset Purchase Agreement, which shall be reimbursed from
the first dollar for both parties). Once Damages to any Party (combined with any
Damages to such Party under the FM Purchase Agreement) exceed $50,000 in the
aggregate (excluding all claims made pursuant to Section 7.9 of this Agreement
and Section 7.8 of the FM Asset Purchase Agreement), such Party will be entitled
to recover the entire amount of the Damages to the maximum extent permitted by
this Agreement. The Parties agree that any materiality qualification set forth
in this Agreement shall not be taken into account in determining the magnitude
of Damages occasioned by any breach for purposes of calculating whether such
$50,000 threshold has been reached. The Parties agree that (i) with respect to
all claims made pursuant to Article X hereof or Article X of the FM Asset
Purchase Agreement during the period beginning on the date of consummation of
the transactions contemplated by the FM Asset Purchase Agreement on the KQQK
Closing Date and ending on the twelve month anniversary of such date, the
maximum aggregate amount for which either Buyer and LBI Holdings on the one hand
or Seller on the other hand will be responsible for pursuant to this Agreement
and the FM Asset Purchase Agreement, is $1,500,000 in the aggregate and (ii)
with respect to all claims made pursuant to Article X hereof or Article X of the
FM Asset Purchase Agreement during the period commencing on the date after the
end of the applicable period set forth in clause (i) of this sentence and ending
on the twenty four month anniversary of the

                                       45



consummation of the transaction contemplated by this Agreement (or if the
purchase and sale transaction contemplated under this Agreement does not occur,
ending on the later of (x) the eighteenth month anniversary of the KQQK Closing
Date or (y) the date on which this Agreement is terminated), the maximum
aggregate amount for which either Buyer and LBI Holdings on one hand or Seller
on the other hand will be responsible for pursuant to this Agreement and the FM
Asset Purchase Agreement, is $700,000 (above and beyond up to $800,000 of claims
made during the period set forth in clause (i) of this sentence); provided that
the caps set forth in this paragraph shall not apply to any claims made under
this Agreement prior to the consummation of the transaction contemplated
hereunder on the KEYH Closing Date.

          10.5 Holdback. LBI Holdings and Buyer shall be entitled to receive any
amounts owing by Seller to LBI Holdings or Buyer pursuant to this Agreement or
the FM Asset Purchase Agreement (including Article X hereof and thereof) from
the Holdback and Seller agrees to promptly give the Holdback Escrow Agent
written instructions to immediately release such amounts from the Holdback to
LBI Holdings. Buyer agrees to promptly give the Holdback Escrow Agent written
instructions to immediately release the amounts as determined by Sections
3.1.4(c) and 3.1.4(d) in the FM Asset Purchase Agreement, to the extent Seller
is entitled to receive such amount.

          10.6 Survival of Representations and Warranties. The representations
and warranties contained in this Agreement or in any Schedule or Exhibit, or in
any certificate or other instrument delivered pursuant to this Agreement, will
survive the consummation of the transaction contemplated hereby on the KEYH
Closing Date for a period of eighteen months; provided that if a claim or notice
is given under this Article X or otherwise with respect to any such
representation and warranty prior to such expiration date, such claim shall
continue (and such representation and warranty shall survive) indefinitely until
such claim is finally resolved.

                                   ARTICLE XI
                            MISCELLANEOUS PROVISIONS

          11.1 Notices. All notices, demands and requests, required or permitted
to be given under the provisions of this Agreement shall be in writing and will
be deemed duly given if received on a business day by facsimile at the facsimile
numbers below and telephone notification is provided by the sending Party to the
receiving Party at the time of the facsimile that such notice is about to be
sent (it being understood that a voice mail left on answering machines shall be
deemed to satisfy the requirement of such telephone notification):

          If to Seller:

                  Roel Campos, Esq.
                  El Dorado Communications
                  1980 Post Oak Boulevard, Suite 1500
                  Houston, TX 77058
                        Phone: (713) 968-4500
                        Fax: (713) 968-4518

                                       46



          Copy (which shall not, by itself, constitute notice) to:

                  Allan Duboff, Esq.
                  Richman, Mann, Chizever, Phillips & Duboff
                  9601 Wilshire
                  Penthouse Suite
                  Beverly Hills, CA 90210
                        Phone: (310) 274-8300
                        Fax: (310) 274-2831

                  Lawrence Roberts, Esq.
                  Skadden, Arps, Slate, Meagher & Flom LLP
                  1440 New York Avenue, N.W.
                  Washington, D.C. 20005
                        Phone: (202) 371-7040
                        Fax: (202) 393-5760

          If to LBI Holdings or Buyer:

                  Mr. Lenard D. Liberman
                  Executive Vice President
                  Liberman Broadcasting Inc.
                  1845 Empire Avenue
                  Burbank, California 91504
                        Phone: BOTH (818) 563-5722 and
                               (281) 493-2900
                        Fax: BOTH (818) 558-4244 and
                             (281) 759-3963

          Copy (which shall not, by itself, constitute notice) to:

                  Joseph K. Kim, Esq.
                  O'Melveny & Myers LLP
                  400 South Hope Street, 15/th/ Floor
                  Los Angeles, California 90071
                        Phone: (213) 430-6000
                        Fax: (213) 430-6407

Or any other such facsimile numbers, telephone numbers and addresses as any
Party may from time to time supply in writing to the other Parties.

          11.2  Benefit and Assignment. This Agreement will be binding upon and
inure to the benefit of the Parties, and their respective successors and
assigns. This Agreement will not be assignable by a Party without the prior
written consent of all of LBI Holdings, Buyer and Seller; provided, however,
that LBI Holdings and Buyer may assign their rights and obligations hereunder
without Seller's consent to any party that is majority owned, directly or
indirectly, by LBI Holdings and LBI Holdings and Buyer may assign their rights
hereunder, without Seller's

                                       47



consent, to any of their lenders (provided that such assignment to such lenders
does not violate the Communications Act and does not delay the KEYH Closing
Date).

          11.3   Other Documents. The Parties will execute such other documents
as may be reasonably necessary and desirable to the implementation and
consummation of this Agreement. To the extent not obtained prior to the KEYH
Closing Date, Seller shall use its best efforts to cause Artlite to update
registrations of the Towers with the FCC to reflect LBI Sub as the owner of the
Towers following the KEYH Closing Date.

          11.4   Appendices. All Schedules and Exhibits are deemed to be part of
this Agreement and incorporated herein, where applicable, as if fully set forth
herein. Whenever, by the terms of this Agreement or any subsequent agreement of
the Parties, any additions or deletions are made to the Purchased Assets shown
on the Schedules, the Schedules affected shall be appropriately modified to
reflect those changes.

          11.5   Construction. This Agreement will be governed, construed and
enforced in accordance with the laws of the State of Texas.

          11.6   Arbitration. Any dispute, controversy or other matters as to
which the Parties disagree arising out of, relating to or in connection with the
provisions of this Agreement or the interpretation, breach or alleged breach
hereof shall be settled and decided by arbitration conducted by the Judicial
Arbitration and Mediation Service ("JAMS"), subject to the following:

          11.6.1 Any arbitration as set forth above shall be held and conducted
          in Houston, Texas before one arbitrator who shall be selected by
          mutual agreement of the parties. If agreement is not reached on the
          selection of the arbitrator within 30 days after commencement of an
          arbitration by (i) submission of a matter to the JAMS in accordance
          with its Commercial Arbitration Rules and (ii) notice to the other
          party of the initiating party's intention to arbitrate, then such
          arbitrator shall be appointed by the presiding judge of the
          appropriate Houston, Texas Court.

          11.6.2 The arbitrator appointed must be a former or retired judge, or
          an attorney with at least 15 years experience in the broadcast radio
          industry.

          11.6.3 All proceedings involving the parties shall be reported by a
          certified shorthand court reporter and written transcripts of the
          proceedings shall be prepared and made available to the parties.

          11.6.4 The prevailing party shall be awarded reasonable attorneys'
          fees, expert and non-expert witness costs and expenses, and other
          costs and expenses incurred in connection with the arbitration unless
          the arbitrator, for good cause, determines otherwise.

          11.6.5 The dispute shall be heard in accordance with the rules and
          procedures of JAMS and the arbitrator's decision and award shall be
          final and binding.

          11.6.6 Costs and fees of the arbitrator (including the cost of the
          record of transcripts of the arbitration) shall be borne by the
          non-prevailing party, unless the

                                       48



          arbitrator for good cause determines otherwise. Costs and fees payable
          in advance shall be advanced equally by the parties, subject to
          ultimate payment by the non-prevailing party in accordance with the
          preceding sentence.

          11.6.7  Any Party may initiate an arbitration proceeding under this
          Section 11.6 by written notice to the other Party of his or its
          intention to arbitrate, specifying the dispute or controversy to be
          arbitrated, the amount involved and the remedy sought, and by filing
          with the Dallas, Texas office of the JAMS a copy of said notice
          together with a copy of this Agreement and the fee specified in the
          JAMS fee schedule. In no event shall a demand for arbitration be made
          after the date when institution of legal or equitable proceedings
          based on the claim, dispute or other matter in question would be
          barred by the applicable statute of limitations.

          11.6.8  This agreement to arbitrate shall be specifically enforceable
          under applicable law in any court of competent jurisdiction. The award
          rendered by the arbitrator shall be final and judgment may be entered
          in accordance with applicable law and in any court having jurisdiction
          thereof.

          11.6.9  Notwithstanding anything contained in this Agreement elsewhere
          to the contrary, and unless modified by the arbitrator upon a showing
          of good cause, the arbitration shall proceed upon the following
          schedule: (i) within 30 days from the service of the notice of the
          request to arbitrate, the parties shall select the arbitrator; (ii)
          within 30 days after selection of the arbitrator, the parties shall
          conduct a pre-arbitration conference at which a schedule of
          pre-arbitration discovery shall be set, all pre-arbitration motions
          scheduled and any other necessary pre-arbitration matters decided;
          (iii) all discovery shall be completed within four months following
          the pre-arbitration conference; (iv) all pre-arbitration motions shall
          be filed and briefed so that they may be heard no later than one month
          following the discovery cut-off; (v) the arbitration shall be
          scheduled to commence no later than 30 days after the decision on all
          pre-arbitration motions but in any event no later than six months
          following the service of the notice of arbitration; and (vi) the
          arbitrator shall render his written decision within 30 days following
          the submission of the matter.

          11.6.10 Any monetary award of the arbitrator may include interest at
          the highest prime rate, as published in the Wall Street Journal, plus
          two percent, which interest shall accrue from the date the claim,
          dispute or other matter in question was rightfully due and payable
          under this agreement until the date the award is paid to the
          prevailing party.

          11.6.11 No provision of this Section 11.6 shall limit the right of any
          Party to this Agreement to exercise self-help remedies or to obtain
          provisional or ancillary remedies from a court of competent
          jurisdiction before, after, or during the pendency of any arbitration
          or other proceeding. The exercise of such remedy does not waive the
          right of any party to resort to arbitration.

                                       49



          11.7 Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signature on each such counterpart
were upon the same instrument.

          11.8 Headings. The headings of the Sections of this Agreement are
inserted as a matter of convenience and for reference purposes only and in no
respect define, limit or describe the scope of this Agreement or the intent of
any Section.

          11.9 Entire Agreement. This Agreement, the AM Local Marketing
Agreement, the FM Asset Purchase Agreement, the FM Local Marketing Agreement,
all Schedules and Exhibits and related agreements entered into as of the date
hereof and all agreements, certificates and instruments delivered by the Parties
pursuant to the terms of this Agreement or the FM Asset Purchase Agreement
represent the entire understanding and agreement between the Parties with
respect to the subject matter hereof, supersede all prior negotiations and
agreements between the Parties, including the Letter of Intent (other than
Section 9 thereof as replaced by Exhibit J hereto, which survives), and can be
amended, supplemented, waived or changed only by an amendment in writing which
makes specific reference to this Agreement, the FM Asset Purchase Agreement or
the amendment, as the case may be, and which is signed by the Party against whom
enforcement of any such amendment, supplement, waiver or modification is sought.

                                       50



                  IN WITNESS WHEREOF, the Parties have caused this Agreement to
be executed and delivered by their duly authorized officers on the day and year
first above written.

                                          EL DORADO COMMUNICATIONS, INC.

                                          By:  /s/ Roel Campos
                                             -----------------------------
                                              Roel Campos
                                              Senior Vice President


                                          EL DORADO 108, INC.

                                          By:  /s/ Roel Campos
                                             -----------------------------
                                              Roel Campos
                                              Senior Vice President


                                          KXTJ LICENSE, INC.

                                          By:  /s/ Roel Campos
                                             -----------------------------
                                              Roel Campos
                                              Senior Vice President


                                          LBI HOLDINGS II, INC.

                                          By:  /s/ Lenard D. Liberman
                                             -----------------------------
                                                Lenard D. Liberman
                                                Executive Vice President


                                          LIBERMAN BROADCASTING OF HOUSTON, INC.


                                          By: /s/ Lenard D. Liberman
                                             -----------------------------
                                                Lenard D. Liberman
                                                Executive Vice President

                              and

                                       S-1



                                          LIBERMAN BROADCASTING OF HOUSTON
                                          LICENSE CORP.

                                          By: /s/ Lenard D. Liberman
                                             -----------------------------
                                                Lenard D. Liberman
                                                Executive Vice President

                                       S-2

EX-10.4

                                                                    Exhibit 10.4


                            ASSET PURCHASE AGREEMENT

                                      Among

                            GUAJILLO INVESTMENTS, LLC

                              LBI HOLDINGS II, INC.

                     LIBERMAN BROADCASTING OF HOUSTON, INC.

                                       AND

                 LIBERMAN BROADCASTING OF HOUSTON LICENSE CORP.

                 RELATING TO THE ACQUISITION OF KIOX-FM AND KXGJ


                               Dated June 21, 2002



                               TABLE OF CONTENTS



                                                                                        Page
                                                                                     
ARTICLE I    DEFINITIONS .............................................................     1

    1.1   Definitions ................................................................     1

    1.2   Knowledge ..................................................................     6

ARTICLE II   PURCHASE AND SALE OF ASSETS .............................................     6

    2.1   Assets to be Conveyed ......................................................     6

    2.2   Excluded Assets and Liabilities ............................................     7

ARTICLE III  PURCHASE PRICE; METHOD OF PAYMENT; ESCROW DEPOSIT .......................     8

    3.1   Purchase Price .............................................................     8

    3.2   Liabilities Assumed ........................................................     8

    3.3   Escrow Deposit .............................................................     8

    3.4   Buyer's Remedies ...........................................................     9

    3.5   Allocation .................................................................    10

    3.6   Prorations .................................................................    10

ARTICLE IV   REPRESENTATIONS AND WARRANTIES BY SELLER ................................    10

    4.1   Organization and Standing ..................................................    10

    4.2   Authorization ..............................................................    10

    4.3   FCC Licenses ...............................................................    11

    4.4   Purchased Assets ...........................................................    12

    4.5   Insurance ..................................................................    14

    4.6   Litigation .................................................................    14

    4.7   Contracts ..................................................................    14

    4.8   Insolvency .................................................................    14

    4.9   Reports ....................................................................    14

    4.10  No Defaults ................................................................    14

    4.11  Disclosures ................................................................    15

    4.12  Environmental Compliance ...................................................    15

    4.13  Intellectual Property ......................................................    15

    4.14  Brokers ....................................................................    16

    4.15  Prepaid Expenses ...........................................................    16


                                      -i-



                               TABLE OF CONTENTS
                                  (continued)



                                                                                             Page
                                                                                          
ARTICLE V     REPRESENTATIONS AND WARRANTIES BY BUYER AND LBI HOLDINGS ....................    17

     5.1   Status .........................................................................    17

     5.2   No Defaults ....................................................................    17

     5.3   Authorization. .................................................................    17

     5.4   Brokers ........................................................................    17

     5.5   Qualification as a Broadcast Licensee ..........................................    18

     5.6   Litigation .....................................................................    18

     5.7   Approvals and Consents .........................................................    18

ARTICLE VI    COVENANTS OF SELLER .........................................................    18

     6.1   Affirmative Covenants of Seller ................................................    18

     6.2   Negative Covenants of Seller ...................................................    19

     6.3   Financial Information. .........................................................    20

ARTICLE VII   ADDITIONAL AGREEMENTS .......................................................    21

     7.1   Application for Commission Consent; Other Consents .............................    21

     7.2   Mutual Right to Terminate ......................................................    21

     7.3   Buyer's Right to Terminate .....................................................    22

     7.4   Seller's Right to Terminate ....................................................    22

     7.5   Risk of Loss ...................................................................    23

     7.6   Transfer Taxes and FCC Filings; Expenses; Bulk Sales. ..........................    24

ARTICLE VIII  CLOSING CONDITIONS ..........................................................    25

     8.1   Conditions Precedent to Buyer's Obligations ....................................    25

     8.2   Conditions Precedent to Seller's Obligations ...................................    27

ARTICLE IX    ITEMS TO BE DELIVERED AT THE CLOSING ........................................    27

     9.1   Seller's Performance At Closing ................................................    27

     9.2   Buyer's Performance at Closing .................................................    29

ARTICLE X     INDEMNIFICATION .............................................................    30

     10.1  Indemnification by Seller ......................................................    30

     10.2  Indemnification by LBI Holdings and Buyer ......................................    31

     10.3  Third-Party Claims .............................................................    32


                                      -ii-



                                TABLE OF CONTENTS
                                   (continued)



                                                                                              Page
                                                                                           
     10.4   Cap and Basket .................................................................    32

     10.5   Guarantee. .....................................................................    33

     10.6   Survival of Representations and Warranties .....................................    33

ARTICLE XI    MISCELLANEOUS PROVISIONS .....................................................    33

     11.1   Notices ........................................................................    33

     11.2   Benefit and Assignment .........................................................    34

     11.3   Other Documents ................................................................    35

     11.4   Appendices .....................................................................    35

     11.5   Construction ...................................................................    35

     11.6   Confidentiality ................................................................    35

     11.7   Arbitration ....................................................................    35

     11.8   Counterparts ...................................................................    37

     11.9   Headings .......................................................................    37

     11.10  Public Announcements ...........................................................    37

     11.11  Entire Agreement ...............................................................    37


                                     -iii-



SCHEDULE 4.7    Exceptions to Contracts

SCHEDULE I      Identification of Contracts to be Assumed

SCHEDULE II     List of all Permits and FCC Licenses

SCHEDULE III    List of Required Consents, Encumbrances and UCC-1 Filing
                Statements

SCHEDULE IV     Identification of Principal Items of Tangible Personal Property

SCHEDULE V      Allocation of the Purchase Price

SCHEDULE VI     Insurance Coverage Maintained by Seller on the Purchased Assets

SCHEDULE VII    Identification of Intellectual Property

SCHEDULE VIII   Schedule of Prepaid Expenses

SCHEDULE IX     Excluded Assets




EXHIBIT A       Form of Grant Deed

EXHIBIT B-1     Opinion of Seller's Counsel

EXHIBIT B-2     Opinion of Seller's Counsel (FCC)

EXHIBIT C       Opinion of LBI Entities' Counsel

EXHIBIT D       Form of Member Guarantee

EXHIBIT E       Form of Lessor Estoppels



                            ASSET PURCHASE AGREEMENT

          THIS ASSET PURCHASE AGREEMENT is made and entered into this 21st day
of June, 2002, by and among Guajillo Investments, LLC, a Louisiana limited
liability company ("Guajillo" or "Seller"), on the one hand, and LBI Holdings
II, Inc., a California corporation ("LBI Holdings"), Liberman Broadcasting of
Houston, Inc., a California corporation ("LBI"), and Liberman Broadcasting of
Houston License Corp., a California corporation ("LBI Sub"), on the other. LBI
and LBI Sub are referred to collectively as "Buyer."

                              W I T N E S S E T H:

          WHEREAS, Seller owns certain assets used or held for use in connection
with the operation of radio stations KIOX-FM, 96.9 FM, El Campo, Texas and KXGJ,
101.7 FM, Bay City, Texas (each a "Station" and, collectively, the "Stations")
and Seller desires to sell and assign to Buyer the Stations and their related
assets, and the licenses, permits and other authorizations issued by the Federal
Communications Commission (the "FCC" or "Commission") for or in connection with
the operation of the Stations (the "FCC Licenses"); and

          WHEREAS, LBI Sub desires to acquire the FCC Licenses and LBI desires
to acquire from Seller all the other assets relating to the Stations and the
businesses related thereto; and

          WHEREAS, LBI Sub and LBI are wholly-owned direct or indirect
subsidiaries of LBI Holdings;

          WHEREAS, the FCC Licenses may not be assigned to LBI Sub without the
prior written consent of the Commission.

          NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the Parties, intending to be legally bound, agree as follows:

                                   ARTICLE I
                                   DEFINITIONS

          1.1  Definitions. Unless otherwise stated in this Agreement, the
following terms shall have the following meanings:

          "Agreement" means this Asset Purchase Agreement, and references to
          "Articles," "Sections," "Schedules" and "Exhibits" are to the Articles
          and Sections of this Agreement and to the Schedules and Exhibits
          attached hereto.

          "Assignment Applications" means the applications which Seller and
          Buyer will join in and file with the Commission requesting its written
          consent to the assignment of the FCC Licenses from Seller to LBI Sub.



          "Assumed Contracts" means only (i) those Contracts listed on Schedule
          I, (ii) any other Contract which Buyer specifically agrees to assume
          in connection with this Agreement in its sole discretion, and (iii)
          those Contracts entered into by Seller in the ordinary course of
          business between the date hereof and the Closing Date which LBI
          specifically agrees in writing to assume.

          "Bay City Leasehold" means that certain ground lease covering certain
          land located at Highway 35 East, Bay City, Texas, on which are located
          Seller's Bay City Studio Building and a 90' STL tower and 6' STL
          transmit dish antenna and related documents, all of which are listed
          on Schedule I.

          "Bay City Studio Building" means the studio building owned in fee by
          Seller and located upon the land covered by the Bay City Leasehold.

          "Buyer" has the meaning set forth in the first paragraph of this
          Agreement.

          "Closing Date" means 5:00 p.m. CST on the 10th business day following
          the Final Order Day or such other time as may be mutually agreed to in
          writing by the Parties.

          "Closing Place" means the offices of O'Melveny & Myers LLP, 400 South
          Hope Street, 15/th/ Floor, Los Angeles, California 90071, or such
          other place mutually agreed to in writing by the Parties.

          "Collegeport Leasehold" means, collectively, those certain ground
          lease and tower lease agreements covering the land and tower located
          in Collegeport, Matagorda County, Texas, on which is located Seller's
          transmitter building, a 12-bay FM antenna and a 6' STL antenna and
          related documents, all of which are listed on Schedule I.

          "Commission" has the meaning set forth in the recitals hereto.

          "Communications Act" means the Communications Act of 1934, as amended,
          or any successor statute or statutes thereto, and all rules,
          regulations, written policies, orders and decisions of the FCC
          thereunder, in each case as from time to time in effect.

          "Contracts" means any agreement, written or oral, between Seller and
          any third party related to either Station that creates a right or
          obligation for either side to make payment or provide goods or
          services or otherwise grants rights or creates obligations, including
          but not limited to advertising contracts and sales orders. As used
          herein, the Contracts shall include each of the Tower Subleases.

          "Damages" means any and all claims, demands, liabilities, obligations,
          actions suits, proceedings, losses, damages, costs, expenses,
          assessments, judgments, recoveries and deficiencies, including
          interest, penalties and reasonable attorneys' fees, of every kind and
          description, contingent or otherwise.

                                       2



          "El Maton Leasehold" means that certain Towersite Lease Agreement in
          El Maton, Matagorda County, Texas, on which are located Seller's
          hop-site building, a 400' Esco tower and a 6' STL receive dish and
          transmit antenna and related documents, all of which are listed on
          Schedule I.

          "Encumbrance" means any option, pledge, security interest, lien,
          charge, mortgage, claim, debt, liability, obligation, encumbrance or
          restriction (whether on voting, sale, transfer or disposition),
          whether imposed by agreement, understanding, law, rule or regulation,
          and, with respect to Real Property assets, including the Transmitter
          Buildings and Towers, means any leases, licenses or other occupancy
          agreements relating thereto or covering any portion thereof or any
          liens or encumbrances existing with respect to Seller's interest under
          such documents.

          "Escrow Agent" means a financial institution or escrow company
          mutually acceptable to each Party.

          "Escrow Agreement" means the Corporate Custodial Agreement Relating to
          Earnest Money dated as of the date hereof executed by the Escrow
          Agent, LBI Holdings and Seller.

          "Escrow Deposit" has the meaning set forth in Section 3.3.

          "Excluded Assets" has the meaning set forth in Section 2.2.1.

          "FCC" has the meaning set forth in the recitals hereto.

          "FCC Licenses" has the meaning set forth in the recitals hereto.

          "Final Order Day" means the date on which the Initial Grants have both
          become final orders, which date shall be the forty-first day following
          issuance by the Commission of a public notice announcing the Initial
          Grants, or the date of the later public notice announcing an Initial
          Grant if both Initial Grants are not listed on the same public notice,
          unless either Initial Grant has during the preceding forty-day period
          become subject to any administrative or judicial stay, appeal, review,
          reconsideration or rehearing, in which case, the Final Order Day shall
          not be deemed to occur until such administrative or judicial stay,
          appeal, review, reconsideration or rehearing shall have been resolved
          by a final, unappealable order (by the Commission or by a court of
          competent jurisdiction if Buyer elects to seek judicial review of any
          final order by the Commission) which preserves intact the Initial
          Grants without any conditions materially adverse to Buyer.

          "Francitas Land" shall mean the 30 acres of land in Francitas, Jackson
          County, Texas on which are located Seller's 1,014' Andrews tower and
          6' STL receive dish antenna.

          "Grant Deed" shall mean a deed sufficient to convey to Buyer fee
          simple and marketable title, consistent with the terms and conditions
          of this Agreement, to

                                       3



          each of the Francitas Land and the Bay City Studio Building each
          substantially the form of Exhibit "A".

          "Guajillo" has the meanings specified in the first paragraph of this
          Agreement.

          "Hazardous Substance" has the meaning set forth in Section 4.12.

          "HSRA" means the Hart-Scott-Rodino Antitrust Improvement Act of 1976,
          as amended, and the regulations thereunder, as in effect from time to
          time.

          "Indemnified Party" and "Indemnifying Party" have the meanings
          specified in Section 10.3.

          "Initial Grant" means, with respect to any Assignment Application, the
          Commission's written consent to the assignment of the FCC Licenses
          associated with the applicable Station to LBI Sub pursuant to such
          Assignment Application (including without limitation, by the Media
          Bureau by delegated authority), without any conditions materially
          adverse to any Party.

          "Initial Grant Day" means the day on which the Commission publishes
          public notice of an Initial Grant with respect to each Assignment
          Application (and if public notice of the Initial Grants are published
          on different days, the day on which the Commission publishes public
          notice of the later of the Initial Grants).

          "Intellectual Property" has the meaning set forth in Section 4.13.1.

          "LBI," "LBI Holdings" and "LBI Sub" have the meanings specified in the
          first paragraph of this Agreement.

          "Letter of Intent" shall mean that Letter Agreement dated February 26,
          2002 by and among Guajillo and Liberman Broadcasting, Inc., a
          California corporation and wholly owned subsidiary of LBI Holdings, as
          it may be amended from time to time.

          "Member Guarantee" shall have the meaning set forth in Section 8.1.9.

          "Party" means any of Guajillo, LBI Holdings, LBI or LBI Sub, as the
          context requires, and the term "Parties" mean all such entities;
          provided, however, that Seller, on the one hand, and LBI Holdings and
          Buyer, on the other, shall each be considered a single Party for
          purposes of Sections 7.3, 7.4, 10.3 and 10.4.

          "Permits" means the licenses, permits, approvals, authorizations,
          consents, and orders of any federal, state or local governmental
          authority held by Seller in connection with the operation of the
          Stations (including the FCC Licenses) and all pending requests and
          applications therefor, including without limitation those listed on
          Schedule II.

                                       4



          "Permitted Encumbrances" means, with respect to the Real Property
          only, the Tower Subleases and those exceptions and encumbrances which
          are approved in writing by Buyer as exceptions or exclusions from
          coverage under the Title Policies as shown in the annotated title
          commitments delivered to Seller prior to closing. Notwithstanding the
          foregoing, the parties acknowledge that the title commitment for the
          Bay City Leasehold and the Bay City Studio Building were not available
          as of signing and that the only Permitted Encumbrances on such Real
          Property shall be consistent with those encumbrances similar to those
          accepted by the Buyer in the annotated title commitments previously
          delivered with respect to the other Real Property.

          "Proceeds" has the meaning set forth in Section 7.5.1.

          "Purchased Assets" means all the assets to be conveyed to Buyer by
          Seller pursuant to the terms of this Agreement.

          "Purchase Price" has the meaning set forth in Section 3.1.

          "Real Property" means the Francitas Land, the Bay City Studio Building
          and the Real Property Leaseholds.

          "Real Property Leaseholds" means the El Maton Leasehold, the Bay City
          Leasehold and the Collegeport Leasehold.

          "Required Consents" means the FCC consents to the assignment of the
          FCC Licenses and the other governmental consents, third-party
          consents, approvals or waivers in form and substance reasonably
          satisfactory to Buyer, necessary for Seller to sell, convey or
          otherwise sell or assign the Purchased Assets to Buyer, including
          without limitation those set forth on Schedule III.

          "Seller" has the meaning set forth in the first paragraph of this
          Agreement.

          "Station" and "Stations" have the meanings set forth in the recitals
          hereto.

          "Tangible Personal Property" has the meaning set forth in Section
          2.1.1.

          "Title Company" means Lawyers Title Insurance Company.

          "Title Policies" means each of (1) an ALTA extended coverage owner's
          policy with respect to the Francitas Land, (2) an ALTA extended
          coverage owner's policy with respect to the Bay City Studio Building,
          (3) an ALTA extended coverage leasehold owner's interest policy with
          respect to the El Maton Leasehold, (4) an ALTA extended coverage
          leasehold owner's interest policy with respect to the Bay City
          Leasehold, and (5) an ALTA extended coverage leasehold owner's
          interest policy with respect to the Collegeport Leasehold, each in a
          form and with coverages and amounts acceptable to Buyer and showing
          only Permitted Encumbrances.

                                       5



          "Tower Subleases" shall mean the agreements pursuant to which Seller
          leases or licenses land or tower space to third parties, all of which
          are listed on Schedule I.

          "Towers" means radio broadcast towers located at each applicable
          Transmitter Site upon which is located the Station broadcast antenna.

          "Transmitter Buildings" means studio and transmitter buildings owned
          by Seller and located at the Transmitter Sites, including the Bay City
          Studio Building.

          "Transmitter Sites" means the transmitter and antenna sites owned or
          operated by Seller located on the Real Property.

          1.2    Knowledge. The terms "knowledge" or "know" as it relates to
Seller, shall mean the knowledge of Cheryl Stewart, Peter G. Scalfano, Joseph J.
Clements, Jr., and/or Tim Michaels after reasonable investigation, including due
inquiry of Seller's employees and the investigations referenced in Section 4.3.
With respect to Real Property, "Actual Knowledge" means the actual knowledge of
Cheryl Stewart, Peter G. Scalfano, Joseph E. Clements, Jr. and/or Tim Michaels,
without any duty of inquiry or investigation, and without any personal
liabilities therefor. With respect to LBI Holdings or Buyer, the terms
"knowledge" or "know" shall mean the knowledge of Jose Liberman, Lenard Liberman
and/or George Murray after reasonable investigation, including due inquiry of
LBI Holding's or Buyer's employees.

                                   ARTICLE II
                           PURCHASE AND SALE OF ASSETS

          2.1    Assets to be Conveyed. On the Closing Date at the Closing
     Place, subject to the terms and conditions of this Agreement, Seller will
     sell, assign, convey, transfer and deliver (i) to LBI Sub, the FCC Licenses
     and the Permits, and all applications therefor, together with any renewals,
     extensions, additions or modifications thereof, and (ii) to LBI, all
     (except the Excluded Assets) of Seller's right, title and interest in and
     to the other assets, properties and rights of every kind and nature,
     whether tangible or intangible, absolute or contingent, wherever located
     and used or usable in connection with the operation of the Stations (which,
     together with the FCC Licenses and the Permits and applications therefor,
     are collectively referred to as the "Purchased Assets"), such sale,
     assignment, conveyance, transfer and delivery to be made by instruments of
     conveyance in form reasonably satisfactory to Buyer and to be free and
     clear of all Encumbrances except Permitted Encumbrances. The Purchased
     Assets include the following (except for the Excluded Assets):

          2.1.1  All tangible personal property, furniture, fixtures,
          improvements and office equipment and other equipment used or useful
          in the operation of the Stations, including all furniture and
          inventory in the Transmitter Buildings, the transmitter facilities,
          all Towers, antennas, main and back-up transmitters and generators,
          STL's, data links for transmitter telemetry, wireless microphone and
          other equipment and tangible personal property located or otherwise
          intended for use at the Transmitter Sites, all the principal items of
          which are listed on Schedule IV, together with any replacements
          thereof or additions thereto made between the date hereof and the
          Closing Date, less any retirements made in the

                                       6



          ordinary and usual course of either Station's business (collectively,
          the "Tangible Personal Property");

          2.1.2  The transmitter facilities located at the Transmitter Sites;

          2.1.3  Seller's interest, be it fee interest or leasehold interest, in
          the Real Property;

          2.1.4  All prepaid expenses made by Seller under the Assumed
          Contracts;

          2.1.5  The Assumed Contracts and all of Seller's rights thereunder
          relating to periods and events occurring on and after the Closing
          Date;

          2.1.6  Such files, records and logs pertaining to the operation of
          the Stations as Buyer may reasonably require, including each of the
          Station's public inspection files and other records relating to the
          FCC Licenses and other filings with the Commission, but excluding the
          corporate and accounting records of Seller to the extent not described
          above (notwithstanding this conveyance, Buyer agrees to allow Seller
          copies of (upon written request) and reasonable access to such records
          of the Stations as Seller may reasonably require from and after the
          Closing Date); and

          2.1.7  All Intellectual Property.

          2.2    Excluded Assets and Liabilities.

          2.2.1  Excluded Assets. It is understood and agreed that the Purchased
          Assets do not include any assets of Seller that are not used or useful
          in the operation of the Stations, the name Guajillo, the current post
          office box, all supplies on hand that are used in connection with
          station billings, certain personal items of Cheryl Stewart as listed
          on Schedule IX, cash (other than the amounts described in Section
          2.1.4), cash equivalents, deposits made by Seller under any Contracts
          (other than the amounts described in Section 2.1.4), and accounts and
          notes receivable, causes of action, tax refunds, insurance claims or
          proceeds (except as provided in Sections 6.1.6 and 7.5), in each case
          (for such accounts and notes receivable, causes of action, tax refunds
          and insurance claim and proceeds) accruing prior to the Closing (all
          the foregoing of which are referred to as the "Excluded Assets").

          2.2.2  Liabilities Not Assumed. Except for the liabilities and
          obligations specifically assumed pursuant to Section 3.2, Buyer and
          LBI Holdings will not assume and will not be or become liable for, any
          liabilities or obligations of Seller of any kind or nature whatsoever,
          whether absolute, contingent, accrued, known or unknown, related to
          the ownership of the Purchased Assets, the Excluded Assets, the
          operation of the Stations, Seller's employees or otherwise.

                                       7



                                   ARTICLE III
                PURCHASE PRICE; METHOD OF PAYMENT; ESCROW DEPOSIT

          3.1    Purchase Price. Subject to Section 7.5.3, the purchase price to
be paid to Seller by Buyer for the Purchased Assets will be Three Million One
Hundred Fifty Thousand Dollars ($3,150,000) plus the aggregate amount of prepaid
expenses made by Seller for services to be provided to the Stations after the
Closing Date under the Assumed Contracts as set forth on Schedule VIII less any
accrued liabilities of Seller agreed to be assumed by Buyer and consented to by
Seller (the "Purchase Price").

          3.1.1  Payment of Purchase Price. Subject to the terms and conditions
          set forth in this Agreement, on the Closing Date, LBI Holdings or
          Buyer will pay to Seller an amount equal to the Purchase Price by wire
          transfer of immediately available funds in accordance with wire
          transfer instructions to be provided by Seller to Buyer not less than
          five business days prior to the Closing Date.

          3.1.2  Release of Escrow Deposit. Also on the Closing Date,
          concurrently with the wire transfer of the Purchase Price to Seller,
          Seller and LBI Holdings shall jointly execute and deliver to the
          Escrow Agent written instructions to terminate the Escrow Agreement
          and deliver the entire Escrow Deposit to LBI Holdings.

          3.1.3  Post-Closing Proration. Following the Closing Date, the Parties
          shall determine and make the prorations called for in Section 3.5.

          3.2    Liabilities Assumed. As of the Closing Date, Buyer will assume
and agree to pay, discharge and perform insofar as they relate to the time
period on and after the Closing Date, and arise out of events occurring on or
after the Closing Date, all the obligations and liabilities of Seller under the
Assumed Contracts.

          3.3    Escrow Deposit. Concurrently with the execution and delivery of
this Agreement, LBI Holdings has deposited One Hundred Fifty Seven Thousand Five
Hundred Dollars ($157,500) under the Escrow Agreement (together with any
interest accrued on such amount, the "Escrow Deposit"). The Escrow Deposit will
be held, maintained, administered and disbursed by the Escrow Agent in
accordance with the terms and provisions hereof and of the Escrow Agreement,
with the terms of the Escrow Agreement controlling in the event of any conflict.
The Escrow Deposit will be disbursed as follows:

          3.3.1  Delivery to Seller. If Buyer fails to consummate the purchase
          and sale contemplated by this Agreement under circumstances that would
          constitute a material breach of this Agreement and Seller is not then
          in breach of its representations, warranties or covenants hereunder in
          any material respect (it being understood and agreed by the Parties
          hereto that for purposes of this Section 3.3.1, that for purposes of
          determining such breach of Seller's representations, warranties and
          covenants, all knowledge qualifications in the representations and
          warranties of Seller contained in Section 4.3.3 shall be disregarded
          and such representation or warranty shall not be qualified in any
          respect by such knowledge qualification), then, the Escrow Deposit,
          including accrued interest, will be

                                       8



          delivered to Seller, it being understood and agreed that payment to
          Seller of the full amount of the Escrow Deposit, including accrued
          interest, will constitute full payment for any and all damages
          suffered by Seller by reason of LBI Holdings' or Buyer's failure to
          consummate the purchase and sale contemplated by this Agreement.

               THE PARTIES ACKNOWLEDGE AND AGREE IN ADVANCE BY INITIALING THIS
          AGREEMENT IN THE SPACES PROVIDED [LBI HOLDINGS' INITIALS LDL, BUYER'S
          INITIALS LDL AND LDL, AND SELLER'S INITIALS CLS], THAT THE ACTUAL
          DAMAGES THAT SELLER WOULD SUFFER AS A RESULT OF BUYER'S FAILURE TO
          CONSUMMATE THE PURCHASE AND SALE OF THE ASSETS WOULD BE EXTREMELY
          DIFFICULT OR IMPOSSIBLE TO CALCULATE; THAT THE FULL AMOUNT OF THE
          ESCROW DEPOSIT IS A FAIR AND EQUITABLE AMOUNT TO REIMBURSE SELLER FOR
          ANY DAMAGES WHICH THE PARTIES ESTIMATE MAY BE SUSTAINED BY SELLER DUE
          TO BUYER'S FAILURE TO CONSUMMATE THE PURCHASE AND SALE OF THE ASSETS
          UNDER THE CIRCUMSTANCES STATED IN THIS SECTION 3.3.1; AND THAT THIS
          SECTION 3.3.1 SHALL CONSTITUTE A LIQUIDATED DAMAGES PROVISION, WHICH
          DAMAGES WILL BE SELLER'S SOLE REMEDY HEREUNDER IN THE EVENT OF LBI
          HOLDINGS' OR BUYER'S FAILURE TO CONSUMMATE THE PURCHASE AND SALE OF
          THE PURCHASED ASSETS UNDER THE CIRCUMSTANCES STATED IN THIS SECTION
          3.3.1.

          3.3.2  Delivery to LBI Holdings. The Escrow Deposit shall be delivered
          to LBI Holdings if (i) the transaction contemplated by this Agreement
          is consummated, or (ii) the purchase and sale contemplated by this
          Agreement is not consummated and Seller is not entitled to receive the
          Escrow Deposit in accordance with Section 3.3.1.

          3.4    Buyer's Remedies. If the purchase and sale contemplated by this
Agreement is not consummated because of the breach by Seller of its
representations, warranties or covenants in any material respects (it being
understood and agreed by the Parties hereto that for purposes of this Section
3.4, that for purposes of determining such breach of Seller's representations,
warranties and covenants, all knowledge qualifications in the representations
and warranties of Seller contained in Section 4.3.3 shall be disregarded and
such representation or warranty shall not be qualified in any respect by such
knowledge qualification), and Buyer is not in breach of its representations,
warranties or covenants hereunder in any material respects, Seller agrees that,
in addition to any other rights and remedies available at law or in equity, LBI
Holdings and Buyer shall have the following rights and remedies: (i) Buyer shall
have the right to specific performance of Seller's obligation to sell the
Purchased Assets upon the terms and conditions set forth in this Agreement and
incidental damages in an amount not to exceed $50,000 in the aggregate related
to such specific performance; (ii) LBI Holdings shall have the right to the
return of the Escrow Deposit (and associated interest); and (iii) LBI Holdings
and Buyer shall have the right to recover monetary damages for breach of this
Agreement in an amount equal to $157,500 and the right to be reimbursed for all
reasonable fees and expenses

                                       9



(including reasonable legal expenses) incurred by LBI Holdings and Buyer in
connection with the transactions contemplated hereby; provided, that if Buyer
obtains full remedies under clause (i) pursuant to a non-appealable judgment
with which Seller complies, then Buyer shall not thereafter have additional
claims under clause (iii) and if LBI Holdings and Buyer obtain full remedies
under clause (iii) pursuant to a non-appealable judgment with which Seller
complies, then Buyer shall not thereafter have additional claims under clause
(i), it being understood and agreed that obtaining full remedies under clause
(iii) will constitute full payment for any and all damages suffered by Buyer by
reason of Seller's failure to consummate the purchase and sale contemplated by
this Agreement. The Parties agree that remedy at law is inadequate and that
damages are not adequate to compensate LBI Holdings and Buyer.

          3.5    Allocation. The Purchase Price allocation will be determined by
Buyer with the consent of Seller and set forth on Schedule V.

          3.6    Prorations. The operation of the Stations and all income,
expenses and liabilities attributable thereto through 11:59 p.m. on the day
immediately preceding the Closing Date will be for the account of Seller and
thereafter for the account of LBI, and all income and expenses, including such
items as power and utilities charges, rents and other deferred items will be
prorated between Seller and LBI in accordance with generally accepted accounting
principles consistently applied, the proration to be made and paid, insofar as
feasible, on the Closing Date, with a final settlement sixty days after the
Closing Date.

                                   ARTICLE IV
                    REPRESENTATIONS AND WARRANTIES BY SELLER

          Seller hereby represents and warrants to LBI Holdings and Buyer as
follows:

          4.1    Organization and Standing. Seller is a limited liability
company duly organized, validly existing and in good standing under the laws of
the state of its formation. Seller has the requisite power and authority to
enter into and complete the transactions contemplated by this Agreement. The
only members of Seller are Cheryl Stewart, Peter Scalfano and Joseph Clements,
Jr. ("Members"). As of the date hereof, Cheryl Stewart holds a 30% interest in
the Seller, Peter Scalfano holds a 65% interest in the Seller and Joseph
Clements, Jr. holds a 5% interest in the Seller. As of the Closing Date, Cheryl
Stewart will hold a 40% interest in the Seller, Peter Scalfano will hold a 45%
interest in the Seller and Joseph J. Clements, Jr. will hold a 15% interest in
the Seller.

          4.2    Authorization. All necessary limited liability company actions
and proceedings to duly approve the execution, delivery and performance of this
Agreement, the Escrow Agreement, and other agreements, documents and instruments
being executed by Seller in connection herewith or therewith and the
consummation of the transaction contemplated hereby or thereby have been duly
and validly taken by Seller, and each of this Agreement, the Escrow Agreement,
and other agreements, documents and instruments being executed by Seller in
connection herewith or therewith has been duly and validly authorized, executed
and delivered by Seller and constitutes the legal, valid and binding obligation
of Seller, enforceable against Seller in accordance with and subject to their
respective terms. As of the Closing, the Member Guarantee shall have been duly
executed and delivered by each Member and the Member

                                       10



Guarantee shall constitute the legal, valid and binding obligation of each
Member, enforceable against each Member in accordance with and subject to its
terms.

          4.3    FCC Licenses.

          4.3.1  The FCC Licenses (all of which are listed on Schedule II,
          together with any pending applications for FCC Licenses) constitute
          all the licenses, permits and other authorizations required for and
          used in connection with the operation of the Stations as presently
          operated. No waiver of the Communications Act is necessary in order to
          permit Seller's operation of the Stations. Seller is the holder of all
          the FCC Licenses. Other than the Initial Grants of the Assignment
          Applications, no additional order or grant is required from the FCC in
          order to consummate the assignment of the FCC Licenses to LBI Sub.
          Schedule II correctly sets forth the respective expiration date of
          each FCC License. Each FCC License is validly issued and in full force
          and effect. Seller has taken all actions and performed all of its
          obligations that are necessary to maintain the FCC Licenses without
          adverse modification or impairment, and complete and correct copies of
          the FCC Licenses and any pending applications therefor have been
          delivered to Buyer. No event has occurred which (i) has resulted in,
          or after notice or lapse of time or both would result in, revocation,
          suspension, adverse modification, non-renewal or termination of or any
          order of forfeiture with respect to, any FCC License or (ii) to
          Seller's knowledge, materially and adversely affects or in the future
          would (so far as Seller can now reasonably foresee) materially and
          adversely affect any rights of Seller or any of its assignees or
          transferees thereunder. None of the FCC Licenses requires that any
          assignment thereof must be approved by any public or other
          governmental authority other than the FCC.

          4.3.2  Seller is not a party to, and has no knowledge of, any
          investigation, notice of apparent liability, violation, forfeiture,
          notice of violation, order to show cause or other order or complaint
          issued by or before any court or regulatory body, including, without
          limitation, the FCC, or of any other proceedings (other than
          proceedings relating to the radio industry generally) that would in
          any manner threaten or adversely affect, in either case, the validity
          or continued effectiveness of, or result in the adverse modification
          of, any of the FCC Licenses. In the event Seller learns of any such
          action, or the filing or issuance of any such order, notice or
          complaint, Seller promptly will notify Buyer of the same in writing
          and will take all commercially reasonable measures to contest in good
          faith or seek removal or rescission of such action, order, notice or
          complaint. To Seller's knowledge, each Station is now operating at its
          licensed power and antenna height, in accordance with the FCC
          Licenses, as confirmed by the investigation of Tim Michaels performed
          June 19, 2002. Seller has no reason to believe that the FCC Licenses
          will not be renewed in the ordinary course.

          4.3.3  To Seller's knowledge, the Stations are in compliance with the
          Communications Act, including, without limitation, rules governing the
          location of the Stations' respective main studios and rules governing
          the required contents of the Stations' respective public inspection
          files.

                                       11



          4.3.4  To Seller's Actual Knowledge, none of the facilities used in
          connection with the radio broadcasting operations of Seller relating
          to the Stations (including the Transmitter Buildings, the Transmitter
          Sites and the Towers) violates in any material respect the provisions
          of any applicable building codes, fire regulations, building
          restrictions or other governmental ordinances, orders or regulations
          (including, without limitation, any applicable regulation of the
          Federal Aviation Administration) except where such violation would not
          impair, impede or adversely affect the continued, uninterrupted
          operation of the Stations and, each such facility is zoned so as to
          permit the commercial uses intended by the owner or occupier thereof.
          Schedule II identifies any outstanding variances or special use
          permits materially affecting any of Seller's facilities or the uses
          thereof and Seller is in compliance therewith. Seller has received no
          notice of any complaint being made against either Station relating to
          its Tower, Transmitter Site, Transmitter Building or Seller's
          operation of such Station (including, without limitation, any
          complaint relating to the signals broadcast or otherwise transmitted
          from any Tower, either by Seller or by any person subleasing a portion
          of any Tower) except where such complaint would not impair, impede or
          adversely affect the continued, uninterrupted operation of such
          Station. Each Tower has been appropriately registered with the
          Commission, as described in Schedule II.

          4.3.5  Seller is qualified to sell both Stations and to assign the FCC
          Licenses in accordance with the terms of this Agreement and in
          compliance with the Communications Act. Seller does not know of any
          party who has expressed any intention to oppose FCC approval of the
          assignment of the FCC Licenses to LBI Sub, nor does Seller know of any
          reason why FCC consent to such assignment might be denied or
          inordinately delayed.

          4.3.6  To Seller's knowledge, each report or certification filed by or
          on behalf of Seller with the FCC, including, without limitation, any
          filing pursuant to 47 C.F.R. (S) 73.3615 with respect to its ownership
          of either Station and any other filing relating to either Station, was
          timely filed, and was at the time of filing true, correct and complete
          in all respects. There have been no changes in the ownership of the
          Stations since the filing of the most recent such ownership reports or
          certifications and those ownership reports and certificates are true,
          correct and complete in all respects.

          4.3.7  To Seller's knowledge, operation of the Stations by the Seller
          does not cause or result in exposure of workers or the general public
          to levels of radio frequency radiation in excess of the applicable
          limits stated in 47 C.F.R. (S) 1.1310 as confirmed by the
          investigation of Tim Michaels performed June 4, 2002.

          4.4    Purchased Assets. All material items as of the date hereof used
in the operation of the Stations are listed and described in Schedule IV to this
Agreement. Schedule III sets forth each release and UCC Termination Statements
that are required in order to release any Encumbrances (other than Permitted
Encumbrances) on the Closing Date. Schedule III also sets forth all UCC
Financing Statements that have been filed against any Purchased Asset. There is
no pending or, to the knowledge of Seller, threatened action, event, transaction
or proceeding

                                       12



that would reasonably be expected to interfere with the quiet enjoyment or
operation of the Purchased Assets (including the Real Property) by Seller or, on
and after the Closing Date, by Buyer. The Purchased Assets include all the
personal property and assets necessary to conduct the operation of the Stations
as now conducted.

          4.4.1  Real Property. On the Closing Date, Seller will have good and
          valid title to the Real Property, free and clear of all Encumbrances,
          other than (i) the Permitted Encumbrances, and (ii) the Encumbrances
          described in Schedule III, which Encumbrances will be released on the
          Closing Date concurrently with the Closing. Upon consummation of the
          transactions set forth in this Agreement, Buyer will have good and
          valid title to the Real Property, free and clear of all Encumbrances
          (other than liens granted to Buyer's lenders and the Permitted
          Encumbrances) but otherwise "AS IS" except for the representations,
          warranties and assurances specifically set forth in this Agreement.
          Upon issuance of the Title Policies, which Title Policies will show
          only the Permitted Encumbrances, Buyer agrees to look solely to the
          Title Policies with respect to assurances of title to the Real
          Property except to the extent there occurs a breach by Seller of the
          specific representations and warranties of Seller set forth in this
          Agreement. Seller has received no notice of noncompliance with any
          restriction or encumbrance encumbering the Real Property, except the
          Permitted Encumbrances. To Seller's Actual Knowledge, Seller has
          maintained and has operated the Real Property under and in accordance
          in all material respects with the terms of all applicable regulations.
          Seller has maintained and has operated each Transmitter Site, each
          Tower, each Transmitter Building and each Station under and in
          accordance in all material respects with the terms of all applicable
          regulations. To Seller's knowledge, there are no complaints regarding
          the Transmitter Sites, the Towers, the Transmitter Buildings, the
          antennas, the radio transmitters or the studio facilities. Except for
          the licensees or tenants under the Tower Subleases listed on Schedule
          I, there are no other persons which have any rights to use the Towers
          or Transmitter Sites or to occupy or use the Transmitter Buildings or
          the Real Property, whether by sublease, easement, license or other
          instrument. Buyer will have following Closing reasonable access to
          each of the Transmitter Sites, and a continuous means of ingress and
          egress thereto from public roads.

          4.4.2  Personal Property. On the Closing Date, Seller will have good
          and valid title to the Purchased Assets (other than Real Property),
          free and clear of all Encumbrances, other than the Encumbrances
          described in Schedule III, which Encumbrances will be released on the
          Closing Date concurrently with the Closing. Upon consummation of the
          transactions set forth in this Agreement, Buyer will have good and
          valid title to the Purchased Assets (other than Real Property), free
          and clear of all Encumbrances (other than liens granted to Buyer's
          lenders). The items of Tangible Personal Property are "AS IS, WHERE
          IS" except for the representations, warranties and assurances
          specifically set forth in this Agreement. To Seller's knowledge, the
          technical equipment, constituting a part of the Tangible Personal
          Property, has been maintained in accordance with the applicable
          Station's past practice and is operating and complies in all material

                                       13



          respects with all applicable rules and regulations of the FCC and the
          terms of the FCC Licenses and Permits.

          4.5    Insurance. Seller now has in force insurance on the Purchased
Assets as set forth in Schedule VI and Seller will continue the present
insurance at the present limits in full force and effect up through the Closing
Date.

          4.6    Litigation. No litigation, action, suit, judgment, proceeding
or, to the knowledge of Seller after inquiry, investigation relating to either
Station is pending or outstanding before any forum, court, or governmental body,
department or agency of any kind to which Seller or such Station is a party and,
to the knowledge of Seller, no such litigation or proceeding is threatened, in
each case where a determination thereof would have an adverse effect on the
Purchased Assets.

          4.7    Contracts. Seller has delivered to Buyer true and complete
copies of all the Assumed Contracts. The Assumed Contracts will be enforceable
by Buyer after the consummation of the transaction contemplated hereby in
accordance with their respective terms. To Seller's knowledge, Seller has not
taken any action that would impair the enforceability of the Assumed Contracts,
or omitted to take any action, the omission of which would have such effect.
Except as set forth on Schedule 4.7, there are no material defaults under any of
the Assumed Contracts and the consummation of the transaction contemplated
hereby will not cause any defaults under any of the Assumed Contracts. The
information set forth in Schedule I with respect to each of the Tower Subleases
is true, correct and complete as of the date hereof and will continue to be
true, correct and complete as of closing. Schedule I sets forth all the relevant
documents to which Seller is a party with respect to the Real Property
Leaseholds, true, correct and complete copies of which have been delivered to
Buyer.

          4.8    Insolvency. No insolvency proceedings of any character
including, without limitation, bankruptcy, receivership, reorganization,
composition or arrangement with creditors, voluntary or involuntary, affecting
Seller or any of its assets or properties is pending or, to the knowledge of
Seller, threatened.

          4.9    Reports. All material returns, reports and statements currently
required to be filed by Seller with the Commission or with any other
governmental agency have been filed and each such return, report and statement
is true, correct and complete in all material respects. Seller has complied in
all material respects with the reporting requirements of the Commission and
governmental authorities having jurisdiction over the Stations and their
respective operations.

          4.10   No Defaults. Neither the execution, delivery and performance by
Seller of this Agreement nor the consummation by Seller of the transaction
contemplated hereby nor the execution, delivery and performance by each Member
of the Member Guarantee is an event that, of itself or with the giving of notice
or the passage of time or both, will (i) conflict with the provisions of the
Articles of Organization or Operating Agreement of Seller, (ii) (with respect to
performance on or after the Closing Date, subject to the Required Consents)
constitute a violation of, conflict with or result in any breach of or any
default under, result in any termination or modification of, or cause any
acceleration of any obligation under, any contract,

                                       14



mortgage, indenture, agreement, lease, license or other instrument to which
Seller or any Member is a party or by which it is bound, or by which it may be
affected, or result in the creation of any Encumbrance on any of the Purchased
Assets, (iii) (with respect to performance on or after the Closing Date, subject
to the Required Consents) violate any judgment, decree, order, statute, rule or
regulation applicable to Seller or any Member or (iv) (with respect to
performance on or after the Closing Date, subject to the Required Consents)
violate or constitute a breach of any Assumed Contract. The execution, delivery
and performance of this Agreement by Seller and the execution, delivery and
performance of the Member Guarantee do not require the consent of any third
party other than the consent of the FCC to the Assignment Applications.

          4.11   Disclosures. No covenant, representation or warranty by Seller
and no written statement, certificate, appendix or Schedule furnished by Seller
pursuant hereto or in connection with the transaction contemplated hereby
contains any untrue statement of a material fact or omits to state any material
fact necessary to make the statements contained herein or therein not materially
misleading.

          4.12   Environmental Compliance. To Seller's Actual Knowledge, (i)
Seller has not, in connection with its business or assets, generated, used,
transported, treated, stored, released or disposed of, or has suffered or
permitted anyone else to generate, use, transport, treat, store, release or
dispose of any Hazardous Substance (as defined below) in material violation of
any applicable environmental law; (ii) there has not been any generation, use,
transportation, treatment, storage, release or disposal of any Hazardous
Substance in connection with the conduct of Seller's business or, to the
knowledge of Seller, in any properties within 100 yards of its business which
has created or might reasonably be expected to create any material liability
under any applicable environmental law or which would require reporting to or
notification of any governmental entity; (iii) no asbestos or polychlorinated
biphenyl or underground storage tank is contained in or located at any facility
used in connection with its business; and (iv) any Hazardous Substance handled
or dealt with in any way in connection with Seller's business has been and is
being handled or dealt with in all material respects in compliance with all
applicable environmental laws. As used herein, "Hazardous Substance" means
substances that are defined or listed in, or otherwise classified pursuant to,
any applicable laws as "hazardous substances," "hazardous materials," "hazardous
wastes" or "toxic substances," or any other formulation of any applicable
environmental law intended to define, list or classify substances by reason of
deleterious properties such as ignitibility, corrosivity, reactivity,
radioactivity, carcinogenicity, reproductive toxicity or "EP toxicity," and
petroleum and drilling fluids, produced waters and other wastes associated with
the exploration, development, or production of crude oil, natural gas or
geothermal energy.

          4.13   Intellectual Property.

          4.13.1 Schedule VII contains a true and complete list of all patents
          and trademarks, service marks, station names, alternative station
          names, slogans, trade names, logos, jingles, assumed names, fictional
          business names, copyrights, licenses, permits, authorizations and
          other similar intellectual property rights and interests applied for,
          issued to or presently owned or used by Seller (other than the name
          "Guajillo" and programming and its contents used but not owned by
          Seller) which are material to the operation of either Station,
          including the call letters

                                       15



          "KIOX-FM" and "KXGJ" and any other call signs (together with the
          goodwill associated therewith, the "Intellectual Property"). Seller
          does not represent or warrant that it has good and marketable title to
          any of the Intellectual Property. None of such Intellectual Property
          has been duly registered in, filed in or issued by the United States
          Copyright Office or the United States Patent and Trademark Office, as
          appropriate, the appropriate offices in the various states of the
          United States or the appropriate offices of such other jurisdictions
          where such registration, filing or issuance is necessary to protect
          such Intellectual Property from infringement and for the conduct of
          the business of Seller.

          4.13.2 Except as set forth on Schedule VII, Seller has received no
          notice from any other person or entity pertaining to or challenging
          the right of Seller to use any of the Intellectual Property or any
          rights thereunder.

          4.13.3 Except as set forth on Schedule VII, Seller, to its knowledge,
          has not violated or infringed any patent, trademark, trade name,
          jingle, assumed name, fictional business name, copyright, license,
          permit or other similar intangible property right or interest held by
          others or any license or permit held by Seller.

          4.13.4 Except as set forth on Schedule VII, (i) Seller has not granted
          any license or other rights and, to Seller's knowledge, has no
          obligations to grant licenses or other rights to any of the
          Intellectual Property, and (ii) Seller has not made any claim of any
          violation or infringement by others of its rights to or in connection
          with any of the Intellectual Property, and to Seller's knowledge there
          is no basis for the making of any such claim.

          4.13.5 Except as set forth on Schedule VII, to Seller's knowledge,
          there are no proceedings, either pending or threatened, in the United
          States Copyright Office, the United States Patent and Trademark Office
          or any Federal, state or local court or before any other governmental
          agency or tribunal, relating to any pending application with respect
          to any Intellectual Property.

          4.14   Brokers. No agent, broker, investment or commercial banker,
person or firm acting on behalf of Seller or under the authority of Seller is or
will be entitled to any broker, finder or financial advisor fee or any other
commission or similar fee directly or indirectly in connection with the
transaction contemplated by this Agreement, other than John Saunders, whose fee
shall be paid by Seller.

          4.15   Prepaid Expenses. All prepaid expenses made by Seller for
services to be provided to the Stations after the Closing Date under the Assumed
Contracts are set forth on Schedule VIII.

                                       16



                                   ARTICLE V
            REPRESENTATIONS AND WARRANTIES BY BUYER AND LBI HOLDINGS

          LBI Holdings and Buyer represent and warrant to Seller as follows:

          5.1    Status. Each of LBI Holdings, LBI and LBI Sub is a California
corporation, duly organized, validly existing and in good standing under the
laws of the State of California. LBI Holdings and Buyer each has the requisite
corporate power to enter into and complete the transaction contemplated by this
Agreement.

          5.2    No Defaults. Neither the execution, delivery and performance by
LBI Holdings or Buyer of this Agreement nor the consummation by Buyer of the
transaction contemplated hereby is an event that, of itself or with the giving
of notice or the passage of time or both, will (i) conflict with the provisions
of the Articles of Incorporation or Bylaws of LBI Holdings or Buyer, (ii) (with
respect to performance on or after the Closing Date, subject to item 2 of the
consents set forth in Schedule III, which the Buyer, Seller and LBI Holdings
acknowledge is not a condition to Closing) constitute a violation of, conflict
with or result in any breach of or any default under, result in any termination
or modification of, or cause any acceleration of any obligation under, any
contract, mortgage, indenture, agreement, lease or other instrument to which LBI
Holdings or Buyer is a party or by which it is bound, or by which it may be
affected, or result in the creation of any Encumbrance on any of its assets,
except for agreements, indentures and instruments related to the financing of
the transaction contemplated by this Agreement, (iii) (with respect to
performance on or after the Closing Date, subject to item 2 of the consents set
forth in Schedule III, which the Buyer, Seller and LBI Holdings acknowledge is
not a condition to Closing) violate any judgment, decree, order, statute, rule
or regulation applicable to LBI Holdings or Buyer, or (iv) (with respect to
performance on or after the Closing Date, subject to item 2 of the consents set
forth in Schedule III, which the Buyer, Seller and LBI Holdings acknowledge is
not a condition to Closing) result in the creation or imposition of any
Encumbrance on either Station or the Purchased Assets, except for liens, charges
or encumbrances relating to the financing of the transaction contemplated by
this Agreement.

          5.3    Authorization. All necessary corporate actions and proceedings
to duly approve the execution, delivery and performance of this Agreement, the
Escrow Agreement and other agreements, documents and instruments being executed
by LBI Holdings or Buyer in connection herewith or therewith and the
consummation of the transaction contemplated hereby or thereby have been duly
and validly taken by LBI Holdings and Buyer, and each of this Agreement, the
Escrow Agreement and other agreements, documents and instruments being executed
by LBI Holdings or Buyer in connection herewith or therewith has been duly and
validly authorized, executed and delivered by LBI Holdings and Buyer and
constitutes the legal, valid and binding obligation of LBI Holdings and Buyer,
enforceable against LBI Holdings and Buyer in accordance with and subject to
their respective terms.

          5.4    Brokers. No agent, broker, investment or commercial banker,
person or firm acting on behalf of LBI Holdings or Buyer or under the authority
of LBI Holdings or Buyer is or will be entitled to any broker, finder or
financial advisor fee or any other commission or

                                       17



similar fee directly or indirectly in connection with the transaction
contemplated by this Agreement.

          5.5    Qualification as a Broadcast Licensee. Excluding all facts
arising from changes between the date hereof and the Closing Date to the radio
broadcasting industry generally and any modification during such period of the
FCC rules, regulations or policies affecting all members of the class of holders
of FCC licenses to which Buyer would belong as the holder of the FCC Licenses or
to which Buyer belongs as the holder of its existing FCC licenses, neither LBI
Holdings nor Buyer knows of any fact that would, under the Communications Act,
disqualify Buyer from being the assignee of the FCC Licenses or the owner,
operator and licensee of the Stations. Excluding all facts arising from changes
between the date hereof and the Closing Date to the radio broadcasting industry
generally and any modification during such period of the FCC rules, regulations
or policies affecting all members of the class of holders of FCC licenses to
which Buyer would belong as the holder of the FCC Licenses or to which Buyer
belongs as the holder of its existing FCC licenses, no waivers of the
Communications Act are necessary in order to permit assignment of the FCC
Licenses to Buyer.

          5.6    Litigation. There are no suits, legal proceedings or
investigations of any nature pending or, to the knowledge of LBI Holdings or
Buyer, threatened against or affecting it that would affect the ability of LBI
Holdings or Buyer to carry out the transaction contemplated by this Agreement.

          5.7    Approvals and Consents. To the knowledge after inquiry of LBI
Holdings and Buyer, the only approvals or consents of persons or entities not a
party to this Agreement that are legally or contractually required to be
obtained by LBI Holdings or Buyer in connection with the consummation of the
transaction contemplated by this Agreement are identified on Schedule III.

                                   ARTICLE VI
                               COVENANTS OF SELLER

          6.1    Affirmative Covenants of Seller. Between the date hereof and
the Closing Date, except as disclosed in this Agreement:

          6.1.1  Maintenance. Seller will continue to operate each Station in
          conformity with the FCC Licenses and the Communications Act.

          6.1.2  Preserve Relations. Seller will use its best efforts to
          preserve good relations with the lessor under any Assumed Contract,
          with owners of property adjacent to or in the area of the Transmitter
          Sites, the Transmitter Buildings, the Towers and others having
          business relations with either Station.

          6.1.3  Reasonable Access. After the Assignment Applications have been
          filed with the FCC and following reasonable advance written
          notification and subject to the provisions of Section 11.6, Seller
          will provide Buyer and representatives of Buyer with reasonable access
          during normal business hours to Seller's properties, titles,
          contracts, books, files, logs, records and affairs of each Station,
          and Seller

                                       18



          will furnish such additional information concerning each Station as
          Buyer may from time to time reasonably request.

          6.1.4  Obtain Consents. Seller will use reasonable commercial efforts
          to procure the Required Consents.

          6.1.5  Books and Records. Seller will maintain the books and records
          of each Station consistent with past practices.

          6.1.6  Insurance. Seller will maintain in force the existing insurance
          policies identified on Schedule VI or reasonably equivalent policies.
          Subject to the provisions of Section 7.5, Seller will use the proceeds
          of any claims for loss payable under such insurance policies to
          repair, replace, or restore any of the Purchased Assets destroyed by
          fire and other casualties to their former condition as soon as
          possible after the loss.

          6.1.7  Notification. Seller will promptly upon learning of the same
          notify Buyer of any order to show cause, notice of violation, notice
          of apparent liability or of forfeiture or the filing or threat of
          filing of any complaint with the FCC or with either Station (to the
          extent that such complaints are required to be filed in that Station's
          public inspection file) or against Seller in connection with either
          Station, occurring between the date hereof and the Closing Date, and
          respond to any action, order, notice or complaints, and implement
          procedures to ensure that any valid complaints or violations will not
          recur. Without limiting the generality of the foregoing, Seller will
          also promptly upon learning of the same notify Buyer of any complaint
          being made against either Station relating to its Tower, Transmitter
          Site, Transmitter Building or Seller's operation of such Station
          (including, without limitation, any complaint related to the signals
          broadcast or otherwise transmitted from such Tower, either by Seller
          or by any person subleasing a portion of such Tower) and of any
          invoice unpaid by either Station or by Seller in connection with
          either Station that remains unpaid 60 days after the applicable due
          date of such invoice.

          6.1.8  Transition Assistance. Seller will use reasonable commercial
          efforts to assist Buyer in transitioning third party provided services
          such as utilities, phone service, etc.

          6.2    Negative Covenants of Seller. From the date hereof through
consummation of the transaction contemplated hereby on the Closing Date, except
as contemplated by this Agreement, Seller will not, without the prior written
consent of Buyer:

          6.2.1  Encumbrances. Create or assume any Encumbrance on any of the
          Purchased Assets (other than Permitted Encumbrances on the Real
          Property), whether now owned or hereafter acquired, unless discharged
          or terminated and fully released prior to the Closing Date;

                                       19



          6.2.2  Transfers. Sell, assign, lease or otherwise transfer or dispose
          of any of the Purchased Assets, whether now owned or hereafter
          acquired, except for retirements in the normal and usual course of
          business;

          6.2.3  Call Letters. Change either Station's call letters or modify
          either Station's facilities in any material respect;

          6.2.4  Modification of Contracts. Amend or terminate any of the
          Assumed Contracts (or waive any substantial right thereunder);

          6.2.5  Change in Format or Business; Except as required by Section
          7.1.3, change either Station's format (including but not limited to
          genre of music, demographic or language) or otherwise materially
          change either Station's business model or advertising sales strategy;
          provided, however, that nothing in this Section 6.2.5 is intended to
          constitute an impermissible delegation of licensee's responsibilities
          under the Communications Act to maintain control of the operation of
          the Stations;

          6.2.6  Rights. Cancel or compromise any material claim or waive or
          release any material right of Seller relating to the Purchased Assets,
          except in the ordinary course of business consistent with past
          practice;

          6.2.7  FCC Licenses and Permits. Cause or permit, by any act or
          failure on its part, the FCC Licenses or Permits to expire or to be
          surrendered or modified, or take any action which would cause the FCC
          or any other governmental authority to institute proceedings for the
          suspension, revocation or adverse modification of any of the FCC
          Licenses or Permits, or fail to prosecute with due diligence any
          pending applications to any governmental authority in connection with
          the operation of either Station, or take any other action within
          Seller's control which would result in either Station being in
          non-compliance with the requirements of the Communications Act or any
          other applicable law material to the operation of either Station; or

          6.2.8  No Inconsistent Action. Take any other action inconsistent with
          its obligations under this Agreement or which could hinder or delay
          the consummation of the transaction contemplated by this Agreement.

          6.3    Financial Information. From the date hereof until 4 months
after the consummation of the transactions contemplated by this Agreement,
Seller agrees to cooperate with, and provide reasonable assistance to, Buyer in
connection with any filings or registration statements or reports under the
Securities Act of 1933, as amended, or the Securities and Exchange Act of 1934,
as amended, including, without limitation making available on a timely basis
such financial information of Seller as may reasonably be required in connection
with any such registration statement or report (including but not limited to
that information necessary for the Buyer or any such affiliate to prepare and
file the financial statements required by Rule 3.05 of Regulation S-X). Seller
shall not be required to pay any out-of-pocket expenses in connection with the
cooperation and assistance required under this Section 6.3, including without
limitation

                                       20



for the cost of any audited financial statement of Seller, and no reference
shall be made to Seller or any of its financial information in any such
registration statement or report unless Seller and its independent auditor, if
any, has previously consented.

                                  ARTICLE VII
                              ADDITIONAL AGREEMENTS

          7.1    Application for Commission Consent; Other Consents.

          7.1.1  FCC Consent. Buyer and Seller agree to proceed as expeditiously
          as practical, and in no event later than ten business days after the
          execution hereof by Buyer and Seller, to file or cause to be filed the
          Assignment Applications requesting FCC consent to the transaction
          contemplated by this Agreement. The Parties agree that the Assignment
          Applications will be prosecuted in good faith and with due diligence,
          including filing and cooperating with all requests of the Commission.
          The Parties acknowledge that this Agreement will have to be filed with
          the FCC. The Parties further acknowledge that the Assignment
          Applications may have to be amended from time to time at Buyer's sole
          expense prior to the date they are granted to reflect any changes
          resulting from Buyer's financing and related arrangements.

          7.1.2  Other Governmental Consents. Promptly, but not later than ten
          business days following the filing of the Assignment Applications, the
          Parties will proceed to prepare and file with all other appropriate
          governmental authorities (if any), such other requests for approval or
          waiver as may be required from such governmental authorities to permit
          the transfer of the FCC Licenses, Permits and the Purchased Assets, or
          as otherwise required in connection with the transaction contemplated
          hereby and will jointly, diligently and expeditiously prosecute, and
          will cooperate fully with each other in the prosecution of, such
          requests for approval or waiver and all proceedings necessary to
          secure such approvals and waivers. The Parties hereby acknowledge that
          no filings will be required under the HSRA because both the Purchase
          Price and the fair market value of the Purchased Assets and Assumed
          Contracts are less than $50,000,000.

          7.1.3  Control of the Stations. This Agreement shall not be
          consummated until after the Initial Grant Day. Between the date of
          this Agreement and the Closing Date, Buyer, its employees or its
          agents, shall not directly or indirectly control, supervise or direct
          or attempt to control, supervise or direct the operation of the
          Stations, but such operation will be the sole responsibility and in
          the complete discretion of Seller

          7.2    Mutual Right to Terminate. Subject to the provisions of Section
7.5.2, if the closing of the purchase and sale transactions contemplated by this
Agreement has not occurred on or before the six month anniversary of the date
hereof, either Buyer or Seller, if such Party is not materially in default
hereunder in a manner which has delayed the occurrence of such closing, may
terminate this Agreement upon five days' written notice to the other Party;
provided, however, that Buyer at any time prior to the expiration of the sixth
month's

                                       21



anniversary can extend such time period by three months by depositing an
additional amount with the Escrow Agent sufficient to increase the Escrow
Deposit to $315,000.

          7.3    Buyer's Right to Terminate. Buyer, at its option, upon written
notice to Seller, may terminate this Agreement, so long as Buyer is not then in
material default under or material breach of this Agreement, upon the happening
of any of the following events:

          7.3.1  The FCC Licenses or other Permits are modified or their terms
          substantially modified, resulting in a material adverse change in
          Buyer's ability to operate either Station in the manner in which they
          have been operated prior to the date hereof;

          7.3.2  Either Assignment Application is designated for a hearing
          before an administrative law judge;

          7.3.3  The FCC institutes revocation of license proceedings against
          either Station;

          7.3.4  Seller is in material breach of this Agreement ten (10)
          business days after notice of breach and has not commenced and
          continued to prosecute diligently a cure therefor or such breach is or
          becomes incurable (it being understood and agreed by the Parties
          hereto that for purposes of this Section 7.3, that for purposes of
          determining such breach of Seller's representations, warranties and
          covenants, all knowledge qualifications in the representations and
          warranties of Seller contained in Section 4.3.3 shall be disregarded
          and such representation or warranty shall not be qualified in any
          respect by such knowledge qualification); or

          7.3.5  Within ninety (90) days of the date of this Agreement, Buyer is
          not satisfied, in its sole discretion, with the condition of the Real
          Property or the Tangible Personal Property, subject to the terms of
          Section 8.1.6 below and further subject to Buyer's right to terminate
          if title defects not previously disclosed to Buyer are discovered
          following the expiration of such 90 day period.

          If the Agreement is terminated pursuant to Sections 7.3.1, 7.3.2,
7.3.3 or 7.3.5 and Seller is not in breach of its representations, warranties
and covenants in any material respects (it being understood and agreed by the
Parties hereto that for purposes of this Section 7.3, that for purposes of
determining such breach of Seller's representations, warranties and covenants,
all knowledge qualifications in the representations and warranties of Seller
contained in Section 4.3.3 shall be disregarded and such representation or
warranty shall not be qualified in any respect by such knowledge qualification),
the Escrow Deposit shall be returned to Buyer and Buyer shall have no further
rights and remedies against Seller.

          7.4    Seller's Right to Terminate. Seller, at its option, upon
written notice to Buyer, may terminate this Agreement, so long as Seller is not
then in material default under or material breach of this Agreement, upon the
happening of any of the following events:

          7.4.1  Either Assignment Application is designated for a hearing
          before an administrative law judge; or

                                       22



          7.4.2  Buyer is in material breach of this Agreement ten (10) business
          days after notice of breach and has not commenced and continued to
          prosecute diligently a cure therefor or such breach is or becomes
          incurable.

          If the Agreement is terminated pursuant to Sections 7.4.1 and Seller
is not in breach of its representations, warranties and covenants in any
material respects (it being understood and agreed by the Parties hereto that for
purposes of this Section 7.4, that for purposes of determining such breach of
Seller's representations, warranties and covenants, all knowledge qualifications
in the representations and warranties of Seller contained in Section 4.3.3 shall
be disregarded and such representation or warranty shall not be qualified in any
respect by such knowledge qualification), the Escrow Deposit shall be returned
to Buyer and Buyer shall have no further rights and remedies against Seller.

          7.5    Risk of Loss.

          7.5.1  The risk of loss and damage, whether by force majeure or for
          any other reason, to the Purchased Assets or the operation of the
          Stations between the date of this Agreement and the Closing Date will
          be on Seller. To the extent permitted by security agreements for
          borrowed money, Seller shall take all reasonable steps to repair,
          replace and restore the Purchased Assets as soon as possible after any
          loss or damage, it being understood and agreed that all insurance
          proceeds with respect thereto ("Proceeds") will be applied to or
          reserved for such replacement, restoration or repair, but that Seller
          will have no obligation to repair, replace or restore in excess of the
          Proceeds (plus any applicable deductible payment), and that Buyer's
          sole remedies if Seller elects not to fully repair, replace or restore
          will be (i) to terminate this Agreement, in which case the Escrow
          Deposit will be delivered to LBI Holdings, or (ii) to close in
          accordance with Section 7.5.3 below.

          7.5.2  In the event of any damage or event that prevents broadcast
          transmissions of either Station in the normal and usual manner and
          substantially in accordance with the FCC Licenses (other than
          scheduled ordinary course maintenance), Seller will give prompt notice
          thereof to Buyer and Buyer, in addition to its other rights and
          remedies, will have the right to postpone the Closing Date until
          transmission in accordance with the FCC Licenses has been resumed. The
          postponed Closing Date will be any date within the effective period of
          the FCC's consent to assignment of the FCC Licenses to LBI Sub and no
          later than ten business days after Seller has given written notice to
          Buyer that transmission in accordance with the FCC Licenses has been
          resumed, which Buyer shall designate by not less than five business
          days' prior written notice to Seller. During the period of
          postponement, Seller shall use its best efforts to resume broadcast
          transmissions. In the event transmission in accordance with the FCC
          Licenses cannot be resumed within the effective period of the FCC's
          consent to assignment of the FCC Licenses to LBI Sub, the Parties will
          join in an application or applications requesting the FCC to extend
          the effective period of its consent for one or more periods not to
          exceed 120 days in the aggregate. If transmission in accordance with
          the FCC Licenses has not been resumed so that the Closing Date does
          not occur within such extended period, or any agreed extension
          thereof, Buyer will

                                       23



          have the right, by giving written notice to Seller within five
          business days after the expiration of such 120-day period, or any
          agreed extension thereof, to terminate this Agreement forthwith
          without any further obligation, in which case the Escrow Deposit will
          be delivered to LBI Holdings.

          7.5.3  If any loss of or damage to the Purchased Assets (including but
          not limited to any Tower or any Transmitter Building) occurs prior to
          the Closing Date and full repair, replacement or restoration of all
          Purchased Assets has not been made on or before the Closing Date (as
          the Closing Date may be extended as provided in Section 7.5.2), or the
          cost thereof is greater than the Proceeds (plus any applicable
          deductible), then Buyer will be entitled, but not obligated, to accept
          the Purchased Assets in their then-current condition and will receive
          an abatement or reduction in the Purchase Price in an amount equal to
          the difference between the amount necessary to fully repair or replace
          the damaged Purchased Assets and the amount of the unused Proceeds, in
          which case Buyer will be entitled to all the unused Proceeds and
          payment of the deductible amount. If Buyer elects to accept damaged
          Purchased Assets at a reduced Purchase Price, the Parties agree to
          cooperate in determining the amount of the reduction to the Purchase
          Price in accordance with the provisions hereof.

          7.6    Transfer Taxes and FCC Filings; Expenses; Bulk Sales.

          7.6.1  Transfer Taxes; FCC Filings. All federal, state or local
          excise, sales or use taxes, or similar taxes and other costs imposed
          on or in connection with the sale, purchase or transfer of the
          Purchased Assets and assumption of the Assumed Contracts by Buyer
          pursuant hereto will be borne by Seller. Except as otherwise expressly
          provided in the last sentence of Section 7.1.1, all FCC filing fees
          will be shared equally by Buyer and Seller.

          7.6.2  Title, Survey, Escrow, Recordation, and other Real Property
          Costs. The costs of issuing the Title Policies and any survey that
          might be required in order to issue such Title Policies shall be borne
          by Seller as shall the costs of recording the Grant Deed. The costs of
          any real estate escrow shall be borne equally by Buyer and Seller and
          any other costs with respect to the transfer of the Real Property
          shall be borne by Buyer and Seller in accordance with the custom and
          practice of such county in which such Real Property is located.

          7.6.3  Expenses. Except as otherwise provided herein, Buyer and Seller
          shall each pay its own expenses incident to the negotiation,
          preparation and performance of this Agreement and consummation of the
          transaction contemplated hereby, including but not limited to the
          fees, expenses and disbursements of its accountants and counsel.

          7.6.4  Compliance With Bulk Sales Laws. Any loss, liability,
          obligation or cost suffered by Seller or Buyer as the result of the
          failure of Seller to comply with the provisions of any bulk sales laws
          applicable to the transfer of the Purchased Assets as contemplated by
          this Agreement will be borne by Seller.

                                       24



          7.6.5  Software. Seller shall have the right to remove its software
          from the computers and retain all billing supplies then on hand after
          Seller has fully complied with the requirements on Section 2.1 of this
          Agreement.

          7.6.6

                                  ARTICLE VIII
                               CLOSING CONDITIONS

          8.1    Conditions Precedent to Buyer's Obligations. The obligation of
Buyer to consummate the transaction contemplated hereby is subject to the
fulfillment prior to and as of the consummation of the transaction contemplated
hereby on the Closing Date of each of the following conditions, each of which
may be waived (but only by an express written waiver) in the sole discretion of
Buyer:

          8.1.1  Commission Approval. The definition of Closing Date shall have
          been satisfied.

          8.1.2  Representations and Warranties. All representations and
          warranties of Seller contained in this Agreement shall be true and
          correct in all material respects at and as of the Closing Date as if
          made on the Closing Date except as specifically contemplated by this
          Agreement (it being understood and agreed by the Parties hereto that
          for purposes of this Section 8.1.2, that for purposes of determining
          such breach of Seller's representations and warranties, all knowledge
          qualifications in the representations and warranties of Seller
          contained in Section 4.3.3 shall be disregarded and such
          representation or warranty shall not be qualified in any respect by
          such knowledge qualification).

          8.1.3  Performance. Seller shall have performed and complied in all
          material respects with the covenants, agreements and conditions
          required by this Agreement to be performed or complied with by it
          prior to and on the Closing Date, including without limitation the
          provisions of Section 9.1. There shall not have been any material
          adverse change in either Station or the Purchased Assets, or any
          damage, destruction or loss materially and adversely affecting the
          Purchased Assets or the operation of either Station.

          8.1.4  FCC Licenses. Seller shall be the holder of the FCC Licenses,
          and there shall not have been any modification of any of the FCC
          Licenses or any modification of FCC rules, regulations or policies
          affecting the class of holders of FCC licenses to which Seller belongs
          as the holder of the FCC Licenses, that has or is reasonably likely to
          have a material adverse effect on either Station or, after the Closing
          Date, the conduct of its operations by Buyer in the manner in which
          they are currently being operated. No proceeding shall be pending, the
          effect of which would be to revoke, cancel, fail to renew, suspend,
          impair or modify adversely any of the FCC Licenses specifically or
          such class of holders generally.

          8.1.5  Consents. All Required Consents shall have been obtained and
          delivered to Buyer. Such Required Consents shall include, without
          limitation, executed

                                       25



          consents and releases in form and substance reasonably satisfactory to
          Buyer from Westburg Media Capital, L.P., the Terminal Marketing Co.,
          Inc. and other creditors of Seller consenting to the transaction
          contemplated hereby and releasing their Encumbrances relating to the
          Purchased Assets (together with executed UCC termination statements,
          amendments to UCC financing statements and other documents and
          instruments implementing such release). In addition, the lessors under
          the leases for the Transmitter Sites shall have executed and delivered
          to Buyer estoppels and consents with respect to each lease (including
          confirmation that each lease is in full force and effect and no
          defaults exist thereunder and confirmation of the terms of each lease)
          in the forms attached as Exhibit E.

          8.1.6  Real Property. The Title Company shall be irrevocably committed
          to issue Title Policies, in form and content reasonably satisfactory
          to Buyer. Prior to the execution and delivery hereof (except as
          otherwise described in the definition of Permitted Encumbrances),
          Buyer has delivered to Seller a set of the title commitments issued by
          the Title Company with respect to the Title Policies to be issued
          hereunder, which commitments have been annotated to reflect the issues
          that Buyer will require to be cleared prior to Closing. Seller and
          Buyer will work together to clear any title problems identified by
          such markups as soon as possible. Within ninety (90) days following
          the date hereof Buyer will confirm in writing its satisfaction with
          the state of title to the properties, as reflected in revised
          commitments, as appropriate. Following the expiration of such 90 day
          period, Buyer will not object to any title issues unless new issues
          are identified by the Title Company, or are otherwise identified by
          Buyer (but were not shown on the commitments issued by the Title
          Company).

          8.1.7  Litigation and Insolvency. Except for matters affecting the
          radio broadcasting industry generally, no litigation, action, suit,
          judgment, proceeding or investigation shall be pending or outstanding
          before any forum, court, or governmental body, department or agency of
          any kind, relating to the operation of either Station or which has the
          stated purpose or the probable effect of enjoining or preventing the
          consummation of this Agreement, or the transaction contemplated hereby
          or to recover damages by reason thereof, or which questions the
          validity of any action taken or to be taken pursuant to or in
          connection with this Agreement. No insolvency proceedings of any
          character including, without limitation, receivership, reorganization,
          composition or arrangement with creditors, voluntary or involuntary,
          affecting Seller or any of its assets or properties, shall be pending,
          and Seller shall not have taken any action in contemplation of, or
          which would constitute the basis for, the institution of any such
          insolvency proceedings.

          8.1.8  Member Guarantee. Each person who is a member of Seller shall
          have executed the Member Guarantee in the form attached hereto as
          Exhibit D (the "Member Guarantee").

                                       26



          8.1.9  Financial Information. To the extent requested prior to the
          Closing Date, Seller shall have provided all information required to
          be provided pursuant to Section 6.3 on or prior to the Closing Date.

          8.2    Conditions Precedent to Seller's Obligations. The obligation of
Seller to consummate the transaction contemplated hereby is subject to the
fulfillment prior to and as of the consummation of the transaction contemplated
hereby on the Closing Date of each of the following conditions, each of which
may be waived (but only by an express written waiver) in the sole discretion of
Seller:

          8.2.1  Commission Approval. The condition set forth in Section 8.1.1
          shall have been satisfied.

          8.2.2  Representations and Warranties. All representations and
          warranties of LBI Holdings and Buyer contained in this Agreement shall
          be true and correct in all material respects at and as of the Closing
          Date as if made on the Closing Date, except as specifically
          contemplated by this Agreement.

          8.2.3  Performance. LBI Holdings and Buyer shall each have performed
          and complied in all material respects with the covenants, agreements
          and conditions required by this Agreement to be performed or complied
          with by it prior to and at the Closing Date, including without
          limitation the provisions of Section 9.2 and payment of the Purchase
          Price in accordance with Article III of this Agreement.

          8.2.4  Litigation and Insolvency. Except for matters affecting the
          radio broadcasting industry generally, no litigation, action, suit,
          judgment, proceeding, complaint or investigation shall be pending or
          outstanding before any forum, court or governmental body, department
          or agency of any kind which has the stated purpose or the probable
          effect of enjoining or preventing the consummation of this Agreement
          or the transaction contemplated hereby or to recover damages by reason
          thereof, or which questions the validity of any action taken or to be
          taken pursuant to or in connection with this Agreement. No insolvency
          proceedings of any character including, without limitation,
          reorganization, receivership, composition or arrangement with
          creditors, voluntary or involuntary, affecting Buyer or any of its
          assets or properties shall be pending, and Buyer shall not have taken
          any action in contemplation of, or which would constitute the basis
          for, the institution of any such insolvency proceedings.

                                   ARTICLE IX
                      ITEMS TO BE DELIVERED AT THE CLOSING

          9.1    Seller's Performance At Closing. On the Closing Date by
facsimile or overnight courier to the Closing Place, Seller shall have executed
and delivered to Buyer all bills of sale, endorsements, assignments and other
instruments of conveyance and transfer reasonably satisfactory in form and
substance to Buyer and its counsel and consistent with the terms of this
Agreement, effecting the sale, transfer, assignment and conveyance of the
Purchased Assets to Buyer including, without limitation, the following:

                                       27



          9.1.1  The Grant Deed for each of the Francitas Land and the Bay City
          Studio Building shall have been approved and accepted for recording by
          the Title Company and Title Company shall have issued the Title Policy
          for each of the Francitas Land and the Bay City Studio Building, each
          in the form referenced in Section 8.1.6 above (it being acknowledged
          that such Title Policies will be issued prior to the actual recording
          of the Grant Deeds for such Real Property and that Buyer shall have no
          responsibility with respect to the "gap" period between Closing and
          the date the Grant Deeds are actually recorded in the appropriate
          counties);

          9.1.2  Such other instruments or documents as Buyer may reasonably
          request, or as may reasonably be required by title insurers or escrow
          holders or required for the issuance of the Title Policies, in
          connection with the transfer and assignment of the Real Property,
          including with certifications of non-foreign status and such other
          documents and instruments customary and appropriate with the transfer
          and assignment of the Real Property in each of the counties in which
          such Real Property is located;

          9.1.3  One or more bills of sale conveying to LBI all of the Tangible
          Personal Property and Intellectual Property to be acquired by Buyer
          hereunder;

          9.1.4  An assignment assigning to LBI Sub the FCC Licenses;

          9.1.5  An assignment and assumption agreement assigning to LBI each of
          the Assumed Contracts together with the Required Consents and the
          original copies of the Assumed Contracts;

          9.1.6  The data, documents, copies, files, records and logs referred
          to in Section 2.1.6 and Seller shall have transferred data from
          Seller's computer systems to Buyer's computer systems to the extent
          provided in Section 2.1.6;

          9.1.7  Proof of payment of prepaid expenses made by Seller for
          services to be provided to the Stations after the Closing Date under
          the Assumed Contracts;

          9.1.8  Opinions of Seller's counsel dated as of the Closing Date
          substantially in the forms of Exhibit "B-1" and Exhibit "B-2" together
          with such changes, if any, as Buyer's lenders shall have requested and
          to which Seller's counsel has agreed;

          9.1.9  Copies of resolutions of Guajillo and all the members of
          Guajillo, certified by an officer of Guajillo, authorizing the
          execution, delivery and performance of this Agreement, the Escrow
          Agreement and the transaction contemplated hereby;

          9.1.10 A certificate, dated as of the Closing Date, executed by the
          Managing Member of Seller, to the effect that, (i) the representations
          and warranties of Seller contained in this Agreement are true and
          complete in all material respects on and as of the Closing Date as
          though made on and as of the Closing Date, except as specifically
          contemplated by this Agreement (it being understood and

                                       28



          agreed by the Parties hereto that for purposes of this Section 9.1.10,
          that for purposes of determining such breach of Seller's
          representations and warranties, all knowledge qualifications in the
          representations and warranties of Seller contained in Section 4.3.3
          shall be disregarded and such representation or warranty shall not be
          qualified in any respect by such knowledge qualification); (ii) Seller
          has complied in all material respects with or performed in all
          material respects all terms, covenants, agreements and conditions
          required by this Agreement to be complied with or performed by it
          prior to and at the Closing Date; (iii) all Required Consents have
          been obtained by Seller and delivered to Buyer; (iv) except for
          matters affecting the radio broadcasting industry generally, no
          litigation, action, suit, judgment, proceeding or investigation is
          pending or outstanding or, to the knowledge of Seller, threatened,
          before any forum, court, or governmental body, department or agency of
          any kind, relating to the operation of any Station or which has the
          stated purpose or the probable effect of enjoining or preventing the
          consummation of this Agreement or the transaction contemplated hereby
          or to recover damages by reason thereof, or which questions the
          validity of any action taken or to be taken pursuant to or in
          connection with this Agreement; (v) to the knowledge of Seller, no
          insolvency proceedings of any character including, without limitation,
          receivership, reorganization, composition or arrangement with
          creditors, voluntary or involuntary, affecting Seller or any of its
          material assets or properties is pending, and Seller has not taken any
          action in contemplation of, or which would constitute the basis for,
          the institution of any such insolvency proceedings; and (vi) Seller
          has performed the requirements of this Section 9.1;

          9.1.11 Written instructions to terminate the Escrow Agreement and
          deliver the entire Escrow Deposit to LBI Holdings executed by Seller;

          9.1.12 The Member Guarantee shall have been delivered to Buyer
          executed by each of the parties thereto; and

          9.1.13 Such other instruments of transfer, documents or certificates
          reasonably requested by Buyer as may be necessary or appropriate to
          transfer to and vest in Buyer all of Seller's right, title and
          interest in and to the Purchased Assets or as reasonably may be
          requested by Buyer to evidence consummation of this Agreement and the
          transaction contemplated hereby.

          9.2    Buyer's Performance at Closing. On the Closing Date via
facsimile or overnight mail to such place as may be designated by Seller in
writing at least five days in advance of the Closing, Buyer will execute and
deliver or cause to be delivered to Seller:

          9.2.1  The monies payable as set forth in Section 3.1.1 by wire
          transfer of federal funds;

          9.2.2  An opinion of Buyer's counsel dated as of the Closing Date
          substantially in the form of Exhibit "C";

                                       29



          9.2.3  Copies of resolutions of the Boards of Directors of LBI
          Holdings, LBI and LBI Sub, in each case certified by its Secretary,
          authorizing the execution, delivery and performance of this Agreement
          and the transaction contemplated hereby;

          9.2.4  A certificate, dated as of the Closing Date, executed by the
          Executive Vice President of LBI Holdings and Buyer, to the effect that
          (i) the representations and warranties of LBI Holdings and Buyer
          contained in this Agreement are true and complete in all material
          respects on and as of the Closing Date as though made on and as of the
          Closing Date, except as specifically contemplated by this Agreement;
          (ii) LBI Holdings and Buyer have each complied in all material
          respects with or performed in all material respects all terms,
          covenants, agreements and conditions required by this Agreement to be
          complied with or performed by it prior to and at the Closing Date;
          (iii) to LBI Holdings' and Buyer's knowledge, except for matters
          affecting the radio broadcasting industry generally, no litigation,
          action, suit, judgment, proceeding or investigation is pending or
          outstanding or threatened, before any forum, court or governmental
          body, department or agency of any kind which has the stated purpose or
          the probable affect of enjoining or preventing the consummation of
          this Agreement or the transaction contemplated hereby or to recover
          damages by reason thereof, or which questions the validity of any
          action taken or to be taken pursuant to or in connection with this
          Agreement; (iv) to the knowledge of LBI Holdings and Buyer, no
          insolvency proceedings of any character including, without limitation,
          receivership, reorganization, composition or arrangement with
          creditors, voluntary or involuntary, affecting LBI Holdings or Buyer
          or any of their respective assets or properties is pending, and
          neither LBI Holdings nor Buyer has taken any action in contemplation
          of, or which would constitute the basis for, the institution of any
          such insolvency proceedings; and (v) LBI Holdings and Buyer have each
          performed the requirements of this Section 9.2;

          9.2.5  A writing evidencing the assumption by Buyer of each of the
          Assumed Contracts consistent with the provisions of this Agreement;
          and

          9.2.6  Such other instruments, documents and certificates as
          reasonably may be requested by Seller to consummate this Agreement and
          the transaction contemplated hereby.

                                   ARTICLE X
                                 INDEMNIFICATION

          10.1   Indemnification by Seller. It is understood and agreed that LBI
Holdings and Buyer do not assume and will not be obligated to pay any liability
of Seller under the terms of this Agreement or otherwise and will not be
obligated to perform any obligations of Seller of any kind or manner, except in
connection with the Assumed Contracts and with respect thereto only to the
extent such obligations arise subsequent to the consummation of the transaction
contemplated hereby on the Closing Date. Seller hereby agrees to indemnify,
defend and hold harmless LBI Holdings and Buyer, their successors and assigns,
for a period of twelve (12)

                                       30



months following the consummation of the purchase and sale transaction
contemplated hereby on the Closing Date, from and against:

          10.1.1 Any and all Damages, occasioned by, arising out of or resulting
          from the operation of either Station prior to the Closing Date,
          including, but not limited to, any and all claims, liabilities and
          obligations arising or required to be performed prior to the Closing
          Date under any of the Assumed Contracts or otherwise with respect to
          Seller's ownership and operation of either Station prior to the
          Closing Date; and

          10.1.2 Any and all Damages occasioned by, arising out of or resulting
          from any material misrepresentation, material breach of warranty or
          covenant, or material default or material nonfulfillment of any
          agreement on the part of Seller under this Agreement, or from any
          material misrepresentation in or material breach of any certificate,
          agreement, appendix, Schedule, or other instrument furnished to LBI
          Holdings or Buyer pursuant to this Agreement or in connection with the
          transaction contemplated hereby (it being understood and agreed by the
          Parties hereto that for purposes of this Section 10.1.2, that for
          purposes of determining such breach of Seller's representations,
          warranties and covenants, all knowledge qualifications in the
          representations and warranties of Seller contained in Section 4.3.3
          shall be disregarded and such representation or warranty shall not be
          qualified in any respect by such knowledge qualification); provided
          further, however, that if LBI Holdings or Buyer or any of their
          respective agents discovers facts from a source other than the Seller
          or any of its agents or representatives prior to the Closing Date and
          such facts constitute a breach of any of the representations and
          warranties hereof on the part of Seller and if, in spite of the
          existence of such breach, Buyer elects to consummate the transactions
          contemplated hereby without an additional written agreement by Seller
          to indemnify Buyer with respect to such breach, then LBI Holdings and
          Buyer shall not have a right to indemnification with respect to such
          breach of such representation and warranty to the extent that the
          severity of such breach is known to LBI Holdings or Buyer prior to
          Closing

          10.2   Indemnification by LBI Holdings and Buyer. LBI Holdings and
Buyer agree to indemnify, defend and hold harmless Seller, its successors and
assigns, for a period of twelve (12) months following the consummation of the
purchase and sale transaction contemplated hereby on the Closing Date from and
against:

          10.2.1 Any and all Damages occasioned by, arising out of or resulting
          from the operation of either Station on or subsequent to the Closing
          Date, including, but not limited to, any and all claims, liabilities
          and obligations arising or required to be performed on or subsequent
          to the Closing Date under any of the Assumed Contracts or otherwise
          with respect to Buyer's ownership and operation of either Station from
          and after the Closing Date; and

          10.2.2 Any and all Damages occasioned by, arising out of or resulting
          from any material misrepresentation, material breach of warranty or
          covenant, or material

                                       31



          default or material nonfulfillment, of any agreement on the part of
          LBI Holdings or Buyer under this Agreement, or from any material
          misrepresentation in or material breach of any certificate, agreement,
          appendix, Schedule or other instrument furnished to Seller pursuant to
          this Agreement or in connection with the transaction contemplated
          hereby.

          10.3   Third-Party Claims. In the event of third party claims, each
Party ("Indemnified Party") shall give written notice to the other Party
("Indemnifying Party") as soon as practicable and in no event later than ten
business days after the Indemnified Party has knowledge, or the discovery, of
any facts which in its opinion entitle or may entitle it to indemnification
under this Section 10.3. Seller, on the one hand, and LBI Holdings and Buyer, on
the other, shall be considered a single Party for purposes of this Section 10.3
or Section 10.4. However, failure to give such notice will not preclude the
Indemnified Party from seeking indemnification hereunder, unless, and to the
extent that, such failure adversely affects to a material degree the
Indemnifying Party's ability to defend against such a claim. The Indemnifying
Party will promptly defend such a claim by counsel approved by the Indemnified
Party, which approval shall not be unreasonably withheld, and the Indemnified
Party may appear at any proceeding, at its own cost, by counsel of its own
choosing and will otherwise reasonably cooperate in the defense of such claim,
provided that the Indemnifying Party shall promptly reimburse the Indemnified
Party all reasonable costs, expenses and attorneys' fees incurred in the course
of cooperating in the defense of such claim. The Indemnifying Party shall be
responsible for all costs and expenses of any settlement. If the Indemnifying
Party within ten business days after notice of a claim fails to defend the
Indemnified Party, the Indemnified Party will be entitled to undertake the
defense, compromise or settlement of such claim at the expense of and for the
account and risk of the Indemnifying Party. Anything in this Section to the
contrary notwithstanding:

          10.3.1 If LBI Holdings or Buyer is the Indemnified Party and in the
          reasonable judgment of LBI Holdings or Buyer there is a reasonable
          probability that a claim may materially and adversely affect the
          Indemnified Party or its continued operation of either Station, the
          Indemnified Party will have the right, at its own cost and expense, to
          undertake the prosecution, compromise and settlement of such claim,
          and the Indemnifying Party will cooperate with the Indemnified Party;

          10.3.2 If the facts giving rise to indemnification hereunder involve a
          possible claim by the Indemnified Party against a third party, the
          Indemnified Party will have the right, at its own cost and expense, to
          undertake the prosecution, compromise and settlement of such claim;
          and

          10.3.3 The Indemnifying Party will not, without the consent of the
          Indemnified Party (which consent shall not unreasonably be withheld,
          conditioned or delayed), enter into or settle or compromise any claim
          or consent to any entry of judgment which (i) in the reasonable
          judgment of LBI Holdings or Buyer may materially and adversely affect
          LBI Holdings or Buyer or their continued operation of either Station,
          and (ii) does not include as an unconditional term thereof the giving
          by the claimant or the plaintiff to the Indemnified Party of a full
          and complete release from all liability in respect to such claim.

                                       32



          10.4 Cap and Basket. Neither Party will be entitled to indemnification
under this Article X until Damages to such Party exceed $10,000 in the
aggregate. Once Damages to either Party exceed $10,000 in the aggregate, such
Party will be entitled to recover the entire amount of the Damages to the
maximum extent permitted by this Agreement. The Parties agree that any
materiality qualification set forth in this Agreement shall not be taken into
account in determining the magnitude of Damages occasioned by any breach for
purposes of calculating whether such $10,000 threshold has been reached. The
Parties agree that with respect to all claims made pursuant to Article X hereof
during the period beginning on the date of consummation of the purchase and sale
transaction contemplated by this Agreement on the Closing Date and ending on the
twelve month anniversary of such date, the maximum aggregate amount for which
either Buyer and LBI Holdings on the one hand or Seller on the other hand will
be responsible for pursuant to this Agreement is $800,000 in the aggregate.

          10.5 Guarantee. LBI Holdings and Buyer shall be entitled to receive
any amounts owing by Seller to LBI Holdings or Buyer pursuant to this Article X
not only from Seller but also from the members of Seller as guarantors under the
Member Guarantee. Under no circumstances will LBI Holdings and Buyer be entitled
to receive from any guarantor more money under the Member Guarantee than that
guarantor received from the sale of the Stations, which amounts are hereby
agreed to be $360,000, $320,000 and $120,000, for Peter Scalfano, Cheryl Stewart
and Joseph Clements, Jr., respectively.

          10.6 Survival of Representations and Warranties. The representations
and warranties contained in this Agreement or in any Schedule or Exhibit, or in
any certificate or other instrument delivered pursuant to this Agreement, will
survive the consummation of the purchase and sale transaction contemplated by
this Agreement on the Closing Date for a period of twelve (12) months; provided
that if a claim or notice is given under this Article X or otherwise with
respect to any such representation and warranty prior to such expiration date,
such claim shall continue (and such representation and warranty shall survive)
indefinitely until such claim is finally resolved.

                                   ARTICLE XI
                            MISCELLANEOUS PROVISIONS

          11.1 Notices. All notices, demands and requests, required or permitted
to be given under the provisions of this Agreement shall be in writing and will
be deemed duly given and effective upon receipt or, if received on a day other
than a business day, the next business day following the day of receipt, if sent
by (i) certified mail, (ii) delivery by messenger or in person or (iii) by
facsimile at the facsimile numbers below and telephone notification is provided
by the sending Party to the receiving Party at or following the time the
facsimile is sent (it being understood that a voice mail left on answering
machines shall be deemed to satisfy the requirement for such telephone
confirmation):

          If to Seller:

                                       33



               Ms. Cheryl Stewart
               Guajillo Investments, LLC
               Highway 35 East
               Big City, Texas 77414
                     Phone: (979) 245-4642
                     Fax: (979) 245-6463

          Copy (which shall not, by itself, constitute notice) to:

               Charles L. Spencer, Esq.
               Hebert, Spencer, Cusimano & Fry
               701 Laurel Street
               Baton Rouge, LA 70802
                     Phone: (225) 344-2601
                     Fax: (225) 387-1714

          If to LBI Holdings or Buyer:

               Mr. Lenard D. Liberman
               Executive Vice President
               Liberman Broadcasting Inc.
               1845 Empire Avenue
               Burbank, California 91504
                     Phone: BOTH (818) 563-5722 and
                            (281) 493-2900
                     Fax: BOTH (818) 558-4244 and
                          (281)759-3963

          Copy (which shall not, by itself, constitute notice) to:

               Joseph K. Kim, Esq.
               O'Melveny & Myers LLP
               400 South Hope Street, 15/th/ Floor
               Los Angeles, California 90071
                     Phone: (213) 430-6000
                     Fax: (213) 430-6407

or any other such facsimile numbers and addresses as any Party may from time to
time supply in writing to the other Parties.

          11.2 Benefit and Assignment. This Agreement will be binding upon and
inure to the benefit of the Parties, and their respective successors and
assigns. This Agreement will not be assignable by a Party without the prior
written consent of all of LBI Holdings, Buyer and Seller; provided, however,
that LBI Holdings and Buyer may assign their rights and obligations hereunder
without Seller's consent to any party that is majority owned, directly or
indirectly, by LBI Holdings and LBI Holdings and Buyer may assign their rights
hereunder, without Seller's consent, to any of their lenders (provided that such
assignment to such lenders does not violate the Communications Act and does not
delay the Closing Date). Any assignment contrary to this

                                       34



Section 11.2 is void. LBI Holdings and Buyer shall use reasonable efforts to
give prior written notice of such assignment to Seller and such information as
Seller may reasonably request.

          11.3   Other Documents. The Parties will execute such other documents
as may reasonably be necessary and desirable to the implementation and
consummation of this Agreement.

          11.4   Appendices. All Schedules and Exhibits are deemed to be part of
this Agreement and incorporated herein, where applicable, as if fully set forth
herein. Whenever, by the terms of this Agreement or any subsequent agreement of
the Parties, any additions or deletions are made to the Purchased Assets shown
on the Schedules, the Schedules affected shall be appropriately modified to
reflect those changes.

          11.5   Construction. This Agreement will be governed, construed and
enforced in accordance with the laws of the State of Texas.

          11.6   Confidentiality. The Parties will keep confidential any
non-public information of the other Parties, subject to required disclosure of
such terms in connection with the filing of the Assignment Applications,
obtaining necessary approvals of third parties to the consummation of the
transaction, disclosures to advisors and financing sources of each Party so long
as they are directed by Buyer and LBI Holdings to treat the information
confidentially and disclosures required in connection with FCC approvals or
financing transactions.

          11.7   Arbitration. Any dispute, controversy or other matters as to
which the Parties disagree arising out of, relating to or in connection with the
provisions of this Agreement or the interpretation, breach or alleged breach
hereof shall be settled and decided by arbitration conducted by the Judicial
Arbitration and Mediation Service ("JAMS"), subject to the following:

          11.7.1 Any arbitration as set forth above shall be held and conducted
          in Houston, Texas before one arbitrator who shall be selected by
          mutual agreement of the parties. If agreement is not reached on the
          selection of the arbitrator within 30 days after commencement of an
          arbitration by (i) submission of a matter to the JAMS in accordance
          with its Commercial Arbitration Rules and (ii) notice to the other
          party of the initiating party's intention to arbitrate, then such
          arbitrator shall be appointed by the presiding judge of the
          appropriate United States Court for the Northern District of Texas.

          11.7.2 The arbitrator appointed must be a former or retired judge, or
          an attorney with at least 15 years experience in the broadcast radio
          industry.

          11.7.3 All proceedings involving the parties shall be reported by a
          certified shorthand court reporter and written transcripts of the
          proceedings shall be prepared and made available to the parties.

          11.7.4 The prevailing party shall be awarded reasonable attorneys'
          fees, expert and non-expert witness costs and expenses, and other
          costs and expenses incurred in connection with the arbitration unless
          the arbitrator, for good cause, determines otherwise.

                                       35



          11.7.5  The dispute shall be heard in accordance with the rules and
          procedures of JAMS and the arbitrator's decision and award shall be
          final and binding.

          11.7.6  Costs and fees of the arbitrator (including the cost of the
          record of transcripts of the arbitration) shall be borne by the
          non-prevailing party, unless the arbitrator for good cause determines
          otherwise. Costs and fees payable in advance shall be advanced equally
          by the parties, subject to ultimate payment by the non-prevailing
          party in accordance with the preceding sentence.

          11.7.7  Any Party may initiate an arbitration proceeding under this
          Section 11.6 by written notice to the other Party of his or its
          intention to arbitrate, specifying the dispute or controversy to be
          arbitrated, the amount involved and the remedy sought, and by filing
          with the Dallas, Texas office of the JAMS a copy of said notice
          together with a copy of this Agreement and the fee specified in the
          JAMS fee schedule. In no event shall a demand for arbitration be made
          after the date when institution of legal or equitable proceedings
          based on the claim, dispute or other matter in question would be
          barred by the applicable statute of limitations.

          11.7.8  This agreement to arbitrate shall be specifically enforceable
          under applicable law in any court of competent jurisdiction. The award
          rendered by the arbitrator shall be final and judgment may be entered
          in accordance with applicable law and in any court having jurisdiction
          thereof.

          11.7.9  Notwithstanding anything contained in this Agreement elsewhere
          to the contrary, and unless modified by the arbitrator upon a showing
          of good cause, the arbitration shall proceed upon the following
          schedule: (i) within 30 days from the service of the notice of the
          request to arbitrate, the parties shall select the arbitrator; (ii)
          within 30 days after selection of the arbitrator, the parties shall
          conduct a pre-arbitration conference at which a schedule of
          pre-arbitration discovery shall be set, all pre-arbitration motions
          scheduled and any other necessary pre-arbitration matters decided;
          (iii) all discovery shall be completed within four months following
          the pre-arbitration conference; (iv) all pre-arbitration motions shall
          be filed and briefed so that they may be heard no later than one month
          following the discovery cut-off; (v) the arbitration shall be
          scheduled to commence no later than 30 days after the decision on all
          pre-arbitration motions but in any event no later than six months
          following the service of the notice of arbitration; and (vi) the
          arbitrator shall render his written decision within 30 days following
          the submission of the matter.

          11.7.10 Any monetary award of the arbitrator may include interest at
          the highest prime rate, as published in the Wall Street Journal, plus
          two percent, but in no event shall the total interest exceed the
          maximum amount allowed by Texas law which interest shall accrue from
          the date the claim, dispute or other matter in question was rightfully
          due and payable under this agreement until the date the award is paid
          to the prevailing party.

                                       36



          11.7.11 No provision of this Section 11.7 shall limit the right of any
          Party to this Agreement to exercise self-help remedies or to obtain
          provisional or ancillary remedies from a court of competent
          jurisdiction before, after, or during the pendency of any arbitration
          or other proceeding. The exercise of such remedy does not waive the
          right of any party to resort to arbitration.

          11.8    Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signature on each such counterpart
were upon the same instrument.

          11.9    Headings. The headings of the Sections of this Agreement are
inserted as a matter of convenience and for reference purposes only and in no
respect define, limit or describe the scope of this Agreement or the intent of
any Section.

          11.10   Public Announcements. LBI Holdings and Buyer, on the one hand,
and Seller on the other, will consult with, and obtain the approval of (such
approval not to be unreasonably withheld or delayed) each other before issuing,
and provide each other the opportunity to review, comment upon and concur with,
any press release or other public statement with respect to the transactions
contemplated by this Agreement, and shall not issue any such press release or
make any such public statement prior to such consultation and approval, except
as may be required by applicable law, court process or by obligations pursuant
to any listing agreement with any national securities exchange or the National
Association of Securities Dealers, Inc or disclosures to advisors and financing
sources of each Party and disclosures required in connection with FCC approvals
or financing transactions.

          11.11   Entire Agreement. This Agreement, all Schedules and Exhibits
and all agreements, certificates and instruments delivered by the Parties
pursuant to the terms of this Agreement represent the entire understanding and
agreement between the Parties with respect to the subject matter hereof,
supersede all prior negotiations and agreements between the Parties, including
the Letter of Intent, and can be amended, supplemented, waived or changed only
by an amendment in writing which makes specific reference to this Agreement or
the amendment, as the case may be, and which is signed by the Party against whom
enforcement of any such amendment, supplement, waiver or modification is sought.

                                       37



                  IN WITNESS WHEREOF, the Parties have caused this Agreement to
be executed and delivered by their duly authorized officers on the day and year
first above written.

                                GUAJILLO INVESTMENTS, LLC


                                By:   /s/ Cheryl Stewart
                                    -------------------------------
                                      Cheryl Stewart
                                      Managing Member

                                LBI HOLDINGS II, INC.


                                By:   /s/ Lenard D. Liberman
                                    -------------------------------
                                      Lenard D. Liberman
                                      Executive Vice President


                                LIBERMAN BROADCASTING OF HOUSTON, INC.


                                By:   /s/ Lenard D. Liberman
                                    -------------------------------
                                      Lenard D. Liberman
                                      Executive Vice President

                                and

                                LIBERMAN BROADCASTING OF HOUSTON LICENSE CORP.


                                By:   /s/ Lenard D. Liberman
                                    -------------------------------
                                      Lenard D. Liberman
                                      Executive Vice President

                                      S-1               Asset Purchase Agreement



                                  SCHEDULE 4.7

Relating to the Station Lease Agreement dated July 29, 1991, between North Star
(KIOX-FM) and Cue Paging Corporation ("Cue") Cue failed to make its June 2002
payment and information received indicates that on June 17, 2002 Cue made a
general assignment for the benefit of creditors.

                                 Schedule 4.7-1



                                   SCHEDULE I

                    Identification of Contracts to be Assumed


A.       STUDIO LOCATION- HIGHWAY 35 EAST BAY CITY, TEXAS (LAND LEASE; BUILDING
         IS OWNED IN FEE)

1.       Lease Agreement between Cathryn Long Clark, now deceased, former
         independent Executrix of the Estate of John G. Long, Deceased, and
         James M. Allen, Independent Administrator of the Estate of Mary Adams
         Long, Deceased, collectively, as Lessor and North Star Communications,
         Inc. ("North Star"), as Lessee dated August 22, 1988

B.       STL LOCATION - EL MATON, MATAGORDA COUNTY, TEXAS (LAND LEASE)

         1.    Tower Site Lease Agreement dated August 22, 1990, between Rebecca
               Jo Taska, Trustee for Amy Taska Osina under the Taska Trust
               Agreement dated June 15, 1988, as Lessor, and North Star, as
               Lessee
         2.    Letter from Landrum Enterprises, Inc. dated April 17, 1996
               regarding Tower Site Lease Agreement
         3.    Bill of Sale and Assignment Agreement dated June 1, 1996 between
               Landrum Enterprises, Inc. and Guajillo Investments, L.L.C.
         4.    Assignment of Leases dated June 1, 1996 between Landrum
               Enterprises, Inc. and Guajillo Investments, L.L.C.

C.       LAND AND TOWER LEASE IN COLLEGEPORT, TEXAS

         1.    a)   Tower Lease Agreement between Tiner Associates, Inc., as
                    Lessor, and KXGJ Radio Station & John Wiggins, as Lessee
                    dated June 26, 1995
               b)   Tower Lease Modification Agreement dated _________, 2000
               c)   Letter to Tenant from James L. Tiner ("Tiner") regarding
                    Tower Lease dated February 18, 2001
         2.    Assignment of Leases by and between 5 Star Radio, L.L.C., as
               Assignor, and Guajillo LLC, as Assignee, dated June 11, 1999
         3.    a)   Lease Agreement dated June 1, 1995, between O.B. Stanley
                    ("Stanley") and KXGJ Radio Station and John Wiggins
               b)   Land Lease Assignment dated _________, 2000
         4.    Lease Confirmation and Modification Agreement dated as of
               ________, 2002 by and among Guajillo, Tiner and Stanley with
               respect to the Land Lease and the Tower Lease to be delivered by
               Closing.

ALSO SEE SCHEDULE I - CONT. (TOWER SUBLEASES)

                                  Schedule I-1



                                   SCHEDULE II

                      List of all Permits and FCC Licenses



        --------------------------------------------------------------------------------------------
               FCC Licenses and Permits                                                Expiration
                                                                                       Date

        --------------------------------------------------------------------------------------------
                                                                                    
               Federal Communications Commission Radio Broadcast Station License       8/1/05
               for KIOX-FM, File No. BLH 19910221KA, as renewed pursuant to
               Application for Renewal of License No. BRH19970403WF, together
               with the following auxiliary licenses: WHM943 (STL), WME985
               (STL), WLQ250 (STL) and KB97120 (RPU).


               The ASR for the tower used for this station is 1047127. The tower
               is registered to Guajillo Investments, LLC.


        --------------------------------------------------------------------------------------------
               Federal Communications Commission Radio Broadcast Station License       8/1/05
               for KXGJ, File No. BLH 19951012KA, as renewed pursuant to
               Application for Renewal of License, No. BRH 19970401ZS, together
               with the following auxiliary license: WPNJ956 (STL).


               The ASR for the tower used for this station is 1028576. The tower
               is registered to Tiner Communications Service Inc. (parties
               acknowledge that this name is different than the name on the
               lease with Tiner, as amended)

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


                                 Schedule II-1



                                  SCHEDULE III

                     List of Required Consents, Encumbrances
                           and UCC-1 Filing Statements

Required Consents (Seller)

1. Federal Communications Commission consents to the Assignment Applications
which Seller and Buyer will file with the Federal Communications Commission
requesting its written consent to the assignment of the FCC Licenses from Seller
to LBI Sub.

2. An Estoppel and Memorandum of Lease and Consent from each of the landlords
under the leasehold interests in the Real Property, all in the forms attached as
Exhibit E.

3. A Consent and Release from Westburg Media Capital, L.P.

4. A Consent and Release from the Terminal Marketing Co., Inc.

5. 2/nd/ Modification to Tower Lease by and among Guajillo and Tiner Tower LLC,
as successor to Tiner Associates, Inc.

Required Consents (Buyer)

1. Federal Communications Commission consents to the Assignment Applications
which Seller and Buyer will file with the Federal Communications Commission
requesting its written consent to the assignment of the FCC Licenses to LBI Sub.

2. Consent from Buyer's lenders.

Encumbrances

                                 Schedule III-1



None, other than the following: (a) the Encumbrances resulting from the filing
of the UCC-1 filing statements described in the section in this Schedule
entitled "UCC Financing Statements" and (b) the leases that are set forth in
Schedule I (to the extent that a lease is considered to be an Encumbrance).

UCC Financing Statements



====================================================================================================================================
                                                                                             TYPE OF      DATE
        DEBTOR NAME                   JURISDICTION                SECURED PARTY              FILING       FILED         FILE NO.
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                        
Guajillo Investments, LLC       East Baton Rouge Parish   Westburg Media Capital, L.P.       UCC-1       01/14/02      17-1226519
                                          (LA)
====================================================================================================================================
Guajillo Investments, LLC       East Baton Rouge Parish   Textron Financial Corporation      UCC-3       02/20/02      17-1228134
                                          (LA)
- ------------------------------------------------------------------------------------------------------------------------------------
Guajillo Investments, LLC       Secretary of State (TX)   Westburg Media Capital, L.P.       UCC-1       06/07/99       99-114641
- ------------------------------------------------------------------------------------------------------------------------------------
Guajillo Investments, LLC       Secretary of State (TX)   The Terminal Marketing Co.,        UCC-1       07/25/00       00-549370
                                                          Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Guajillo Investments, LLC        Matagorda County (TX)    Westburg Media Capital, L.P.       UCC-1       06/08/99            5148
- ------------------------------------------------------------------------------------------------------------------------------------
Guajillo Investments, LLC        Matagorda County (TX)    The Terminal Marketing Co.,        UCC-1       07/31/00            5318
                                                          Inc.
- ------------------------------------------------------------------------------------------------------------------------------------


UCC Termination Statements

None, other than UCC release or termination statements releasing or terminating
the UCC-1 Financing statements set forth in the section in this Schedule
entitled "UCC Financing Statements" (the scope of release in such UCC release
statements to be satisfactory to Buyer).

                                Schedule III -2



                                   SCHEDULE IV

                        Identification of Principal Items
                          of Tangible Personal Property


Location:
Main studio and Office building, Bay City, Matagorda County, Texas
Highway 35 East, Bay City, Texas

**KXGJ-FM Control Room**

1)       Mini-Mix 8A stereo console
1)       Electro Voice RE-20 microphone
1)       Radioshack SCT-86 cassette deck
2)       Tascam D-501 CD PB with remote control
1)       Sony MDR-7506 headphones
2)       Pioneer three-way speaker system
1)       OPTIMUS SCT-53 dual cassette deck
1)       Automax automation system, including Pentium 200 CPU, monitor,
         keyboard, mouse, and Automax Pro Radio software
1)       Wall mounted CD/Record storage rack
1)       Radioshack telephone flasher
1)       TM Century jingle package
1)       Mike Carta Liner (Air and Production) package
1)       Holly Anne EAS receiver
1)       TM Century Classic Country Music Library
1)       lot approximately 500 Classic Country CDs
1)       G.E. 13" color TV with remote
1)       Symetric 420 stereo power amplifier
1)       Broadcast tools 8x2 stereo switcher
1)       750 watt uninterruptible power supply
1)       Audiolab TD1B bulk eraser
1)       Gentner SPH-10 telephone hybrid
1)       Sony MES 705 mini-disc recorder/player

**KIOX-FM Control Room**

1)       Arrakis 12,000 Series 12 channel audio console
2)       JBL studio monitors
1)       Curtis Mathis 13" color television with remote
1)       Edcor headphone amplifier
2)       Technics compact disc players
1)       BTS computer keyboard
2)       ElectroVoice microphones
1)       Optimus digital AM-FM stereo receiver
1)       CRL Systems stereo gain controller
1)       CRL Systems spectral energy compressor
1)       CRL Systems FM stereo modulation processor

                                 Schedule IV-1



1)       Scott Studios automation system with touch screen and PB & SS servers
1)       Sony mini-disc R/P system
1)       750 watt uninterruptible power supply
1)       TFT EAS controller
1)       TFT EAS system
1)       Crown stereo amplifier
1)       Gentner Digital Hybrid II telephone interface
1)       Broadcast tools 3x2 stereo switcher

**Production Room**

1)       Sony MDS-JE500 Minidisc R/PB unit
1)       TM Century 102 CD Production package, music beds and sound effects
1)       Arrakis Systems 12 channel audio console
1)       Electro-Voice microphone
1)       Senheiser microphone
1)       Pioneer 6-disc compact disc player
1)       Technics dual cassette deck
1)       Scott Systems production computer with PB server
2)       JBL studio monitors
1)       Fidelipac Dynamax stereo record/play cart machine
1)       Otari 2-track reel-to-reel tape recorder
1)       Edcor Sound, headphone amplifier
40)      Sound Ideas sound effects compact disc
25)      FirstComm production music library
1)       Crown stereo amplifier
1)       Gentner phone interface, Digital Hybrid II
1)       UREI 10 band stereo equalizer
1)       Eventide ultra-harmonizer
2)       Aphex compeller/aural exciter
1)       Production computer with 4 track audio card, cool edit pro software,
         and 16x CD burner
1)       Arrakis Systems; console power supply
1)       Sony portable mini-disc recorder/player

**Engineering Room**

1)       Audiolabs TD-1 bulk tape eraser
1)       Cerwin Vega three-way speaker systems
2)       Technics SL-1200 MKII turntable
2)       PD-M30 6-pak CK PB units
1)       Broadcast Electronics stereo generator
1)       TFT STL transmitter (not working)
1)       Norstar phone system
15)      Norstar phones throughout building
1)       voicemail system
1)       Marti remote pick-up transmitter frequencies 450.65 and 450.80
1)       Marti RPU transmitter and receiver
2)       Gentner Microtel remote phone interface
1)       Radioshack 12VDC to 115VAC portable power inverter

                                 Schedule IV-2



1)       Kowler 8KW back-up generator, LP gas powered with auto transfer switch
5)       Miscellaneous cartridge playback machines

**STL Rack**

1)       TFT 884 FM Modulation Monitor (not working)
1)       Moseley Associates STL Transmitter, 6000 Series
1)       Orban Optimod FM 8100

Location:
STL hop site building and tower, El Maton, Matagorda County, Texas
12 mi. south of Bay City on Hwy. 35 to FR 1095 South
1.7 mi. south on FR 1095

**Outside Building**

1)       400' Esco tower
1)       6' STL receive dish antenna (on tower)
1)       6' STL transmit dish antenna (on tower)
1)       650' 7/8" coaxial cable to STL dishes

**Inside Building**

1)       TFT STL Receiver
1)       TFT STL transmitter, 949.6375 Mhz
1)       Uninterruptable power supply

Location:
FM main transmitter & generator building and FM tower, Francitas, Jackson
County, Texas
16.5 mi. south of Bay City on Hwy. 35 to FR 616 west (Blessing)
7.8 mi. west on FR 616 to CR 446
3 mi. north on CR 446

**Outside Building**

1)       1,014' Andrews tower-solid rod utility guyed tower
1)       Broadcast Electronics 8-bay antenna (on tower)
1)       1,000' 4" helix cable-nitrogen pressurized (to antenna)
1)       6' STL receive dish antenna (on tower)
1)       300' 7/8" coaxial cable (to dish)
1)       200 gallon steel diesel gas tank for generator (full)

**Inside Building**

1)       Broadcast Electronics FM-30B transmitter, 96,9 Mhz, 208 A/C, 60 hz, 3
         phase
1)       Broadcast Electronics FX-50 exciter
1)       Broadcast Electronics MVDS microprocessor video diagnostic system
1)       Broadcast Electronics APC automatic power control
1)       Extra power tube for FM-30B

                                 Schedule IV-3



1)       TFT STL receiver, 949.6375 Mhz
2)       Gentner VRC interconnection
1)       Gentner VRC command relay
1)       Gentner data interface
1)       Belar FM modulation monitor
1)       Belar stereo monitor
1)       Gates FM10H3 FM transmitter (Standby) (Nonoperational)
1)       Flash Technology Corp. high Intensity tower strobe system FAA spec. No.
         L0856
1)       45 KW low pass filter, P/N 339-005-1
1)       Dielectric 3 1/8" rotary coaxial switch
1)       Kohler automatic power transfer switch, 120/240 volt, 225 Amp, 60 Hz, 3
         phase
1)       Detroit diesel engine with Kohler 100 amp 3-phase generator
1)       5-ton Carrier A/C unit
1)       3-ton Carrier A/C unit

**KXGJ-FM Tower Location**

Location:
FM transmitter and building, Collegeport, Matagorda County, Texas
Rt. 1 Robbins Slough Road
12.6 kilometers east of Palacios

**Outside Building**

1)       6 foot marked grid STL antenna
1)       12 Bay FM antenna-Jampro
1)       500 feet 41" tower with tapered section at antenna (leased)
1)       200 feet1/2" helix
1)       480 feet 3" helix
2)       Central air conditioning units (smaller unit needs a blower motor)
1)       Metal transmitter building approximately 10'x20'
1)       Wire fence enclosure around building and tower

**Inside Building**

1)       Moseley Associates Stereo SLT receiver, 6000 Series
1)       Sine Systems remote control system
1)       Broadcast Electronics FM-20T transmitter with BE FX50 exciter

Office Equipment

1)       Binding machine
1)       Paper cutter
5)       Business calculators
5)       Miscellaneous office computers with keyboards, monitors, and network
         hub
5)       HP color printers
1)       Ebsen wide-carriage printer
1)       Xerox copy machine
1)       Paper shredder
1)       Smith Corona electric typewriter

                                 Schedule IV-4



1)       HP plain paper fax machine

Office Furniture

1)       Executive wooden desk
1)       Executive wooden credenza
1)       Executive wooden file cabinet
1)       Executive gray desk
1)       Executive gray credenza
1)       Executive gray 2-drawer file cabinet
1)       8' wooden conference table and 8 chairs
1)       5' double door metal supply cabinet
7)       Upholstered decorative chairs
3)       Highback desk chairs
8)       Wooden desks
13)      Desk chairs
1)       Large double chair with center table
6)       Utility tables
4)       Computer stations
2)       Partitions in sales area
1)       Wooden sofa table
1)       Glass coffee table
9)       2-drawer file cabinets
8)       4-drawer file cabinets
5)       Southwestern framed prints in lobby
1)       Wooden bookcase
2)       Bar stools
2)       Wall clocks
5)       Plastic shelving units
4)       Literature racks

Office Fixtures

1)       Refrigerator
1)       Microwave
1)       lot waste baskets
1)       5' artificial plant

                                 Schedule IV-5



                                   SCHEDULE V

                        Allocation of the Purchase Price



- ----------------------------------------------------------------------------------------------------------------
                                         Method to be Used to Determine the          Allocated Amounts as
       Broadcasting Asset              Allocation of Purchase Price as of the        of the Closing Date
       ------------------                                                            -------------------
                                                  Closing Date
                                                  ------------
- ----------------------------------------------------------------------------------------------------------------
                                                                               
Property, plant and equipment
- ----------------------------------------------------------------------------------------------------------------
Goodwill and FCC License
- ----------------------------------------------------------------------------------------------------------------
Purchase Price
- ----------------------------------------------------------------------------------------------------------------


                                  Schedule V-1



                                   SCHEDULE VI

                          Insurance Coverage Maintained
                        by Seller on the Purchased Assets

                               See attached pages

                                 Schedule VI-1



                                  SCHEDULE VII

                     Identification of Intellectual Property

KIOX-FM Slogans
Gulf Coast Best Country X-97
Today's Hottest Country 96.9, X97-FM
Your Home for 20 in a Row, X-97

KIOX-FM Frequency
96.9 FM

KXGJ-FM Slogans:
Your Home for Continuous Country Classics, Pure Country, 101.7 FM
5 Decades of Back to Back Country, Pure Country 101.7 FM

KXGJ-FM Frequency
101.7 FM

                                 Schedule VII-1



                                  SCHEDULE VIII

                                Prepaid Expenses

1.   Terminal Finance - one month advance on phone system ($523).

2.   Estate of Cathryn Clark -Studio Site Lease ($754.70).

3.   Upon Closing, Buyer will reimburse Seller for up to $2,750 for the annual
FCC regulatory fee.

                                 Schedule VIII-1



                               SCHEDULE I (CONT.)
                                 Tower Subleases



- ------------------------------------------------------------------------------------------------------------------
                                   TENANT NAME                                       CURRENT            RENTAL
                                                                                   EXPIRATION           AMOUNT
                                                                                      DATE
- ------------------------------------------------------------------------------------------------------------------
                                                                                             
A.     STUDIO BUILDING, BAY CITY, TEXAS

- ------------------------------------------------------------------------------------------------------------------
   1.  [TOWER SITE LEASED TO CHAMELEON (3 AM TOWERS)]                                   Month to       $750.00 per
                                                                                           Month     month ($9,000
       Oral Lease Agreement between Guajillo, as Owner, and Chameleon Radio                              per year)
       Corporation, as Lessee
- ------------------------------------------------------------------------------------------------------------------
B.     STL LOCATION, EL MATON, TEXAS (MATAGORDA COUNTY)

- ------------------------------------------------------------------------------------------------------------------
   1.  [GUAJILLO OWNS TOWER; SPACE ON TOWER LEASED TO LBR ENTERPRISES]            April 12, 2004     $6,000.00 per
                                                                                                              year
       Simple letter agreement between Guajillo and LBR Enterprises, Inc.
       dated March 28, 2001
- ------------------------------------------------------------------------------------------------------------------
C.     MAIN TRANSMITTER SITE, FRANCITAS, TEXAS

- ------------------------------------------------------------------------------------------------------------------
   1.  [GUAJILLO OWNS LAND; LAND LEASED FOR AGRICULTURE PURPOSES]                   February 28,   $10.00 per year
                                                                                           2003;
       Surface Lease Agreement effective as of March 1, 2000 between Guajillo,      automatic 1-
       as Lessor, and Alan P. Swenson, Brian M. Swenson and Sharon Swenson dba     year renewals
       Coastal Farms, as Lessee                                                  to February 28,
                                                                                            2009
- ------------------------------------------------------------------------------------------------------------------
   2.  [GUAJILLO OWNS TOWER; LEASES TOWER SPACE TO CENTRAL & SOUTH WEST            Lease expired     $1,782.00 per
       SERVICES]                                                                  April 30, 2000              year
                                                                                        - Tenant
       A)   Tower Lease Agreement dated April 4, 1995, between Landrum                 currently
       Enterprises, Inc. ("Landrum"), as Landlord and Central and South West      occupying on a
       Services Inc, ("Central and South"), as Tenant                            hold-over basis

       B)   Assignment of Leases dated May 31, 1996 by Landrum, as Assignor,
       Guajillo, as Assignee and Central and South, Lessee
- ------------------------------------------------------------------------------------------------------------------
   3.  [GUAJILLO OWNS TOWER; LEASES TOWER SPACE TO CENTRAL POWER AND LIGHT]         June 1, 2004         $1,461.50

       A)   Tower Lease Agreement dated July 11, 1994, between North Star
       Communications, Inc. ("North Star"), as Landlord, and Central Power and
       Light Company ("Central Power"), as Tenant

       B)   Assignment of Leases between North Star, as Assignor, Landrum, as
       Assignee, and Central Power, as Lessee, dated as of December 22, 1994

       C)   Assignment of Leases by and between Landrum, as Assignor, Guajillo,
       as Assignee, and Central Power, as Lessee, dated as of May 31, 1996

- ------------------------------------------------------------------------------------------------------------------
   4.  [GUAJILLO OWNS TOWER; LEASES SPACE ON TOWER TO CUE PAGING]                  July 28, 2006     $1,005.89 per
                                                                                                             month
       A)   Station Lease Agreement dated July 29, 1991, between North Star                        ($12,070.68 per
       (KIOX-FM) and Cue Paging Corporation ("Cue") (See Schedule 4.7)                                       year)

       B)   First Amendment to Station Lease Agreement dated July 29, 1991,
       between North Star and Cue

       C)   Assignment of Leases dated December 22, 1994, between North Star, as
       Assignor, Landrum, as Assignee and Cue, as Lessee

       D)   Assignment of Leases between Landrum, as Assignor, Guajillo LLC, as
       Assignee, and Cue as Lessee, dated as of May 31, 1996
- ------------------------------------------------------------------------------------------------------------------


                              Schedule I (cont.)-1



                                                                                             
- ------------------------------------------------------------------------------------------------------------------
D.     TRANSMITTER SITE, COLLEGEPORT, TEXAS

- ------------------------------------------------------------------------------------------------------------------
   1.  [Guajillo leases space on tower from Tiner; Tiner holds ground
       leasehold from Stanley; Guajillo owns transmitter building located on
       land owned by Stanley]
- ------------------------------------------------------------------------------------------------------------------



                              Schedule I (cont.)-2



                                   SCHEDULE IX

                                 EXCLUDED ASSETS
                       CHERYL STEWART'S PERSONAL ITEMS AT
                           STUDIO SITE IN BAY CITY, TX

I.     Cheryl's Office:

       1)    wood and glass hutch
       18)   decorative items in hutch
       5)    framed prints
       1)    decorative lamp
       1)    rectangular wooden table
       1)    plant stand
       1)    artificial plant
       1)    floral swag
       1)    crystal clock
       1)    crystal paperweight
       10)   framed pictures
       1)    computer and software
       1)    computer printer
       1)    computer monitor
       1)    computer keyboard and mouse

II.    Lobby:

       1)    framed print

III.   Breakroom:

       1)    wood and glass cabinet
       1)    green table with 2 chair

IV.    Conference Room:

       2)    framed Western print

V.     KXGJ Studio:

       1)    bar stool

                                  Schedule IX-1



                                    EXHIBIT A

                               FORM OF GRANT DEED

                                   Exhibit A-1



                                   EXHIBIT B-1

                        Legal Opinion of Seller's Counsel


[Closing Date]


LBI Holdings II, Inc.
Liberman Broadcasting of Houston, Inc.
Liberman Broadcasting of Houston License Corp.
1845 Empire Avenue
Burbank, California  91504

[Buyer's various lenders]

       Re:   Sale of Certain Assets of Guajillo Investments, LLC

Ladies and Gentlemen:

             We have acted as counsel to Guajillo Investments, LLC, a Louisiana
limited liability company ("Guajillo" or the "Seller"), in connection with the
sale by the Seller and the purchase by Liberman Broadcasting of Houston, Inc.
("LBI"), and Liberman Broadcasting of Houston License Corp., a California
corporation ("LBI Sub," and together with LBI, the "Buyers" and each
individually a "Buyer") of certain assets which are used or held for use in
connection with the operation of radio stations KIOX-FM (96.9 FM, El Campo,
Texas) and KXGJ (101.7 FM, Bay City, Texas) and related assets, license, permits
and authorizations issued by the Federal Communications Commission pursuant to
the Asset Purchase Agreement dated as of June 21, 2002 (the "Asset Purchase
Agreement"), by and among the Buyers, LBI Holdings II, Inc., a California
corporation ("LBI Holdings") and the Seller. We have also reviewed, among other
things, (i) the Corporate Custodial Agreement Relating to Earnest Money dated
June 21, 2002 executed by [a financial institution or escrow company approved by
all parties], as escrow agent, LBI Holdings and Guajillo (the "Escrow
Agreement"), (ii) one or more bills of sale conveying to one or both Buyers all
of the Tangible Personal Property and Intellectual Property, (iii) one or more
assignments assigning to one or both Buyers the FCC Licenses and each of the
Assumed Contracts and Required Consents, and (iv) [list other agreements and
documents] (the agreements and documents contained in clauses (i) through (iv)
above, together with the Asset Purchase Agreement, are collectively referred to
herein as the "Agreements"). We are providing this opinion to you at the request
of the Seller pursuant to Section 9.1.8 of the Asset Purchase Agreement. All
capitalized terms used in this opinion and not defined herein will have the
meanings given in the Asset Purchase Agreement.

             We have also acted as counsel to each member of the Seller (each a
"Member" and collectively "Members") in connection with the Member Guarantee.

             In our capacity as such counsel, we have examined originals or
copies of those limited liability company and other records and documents we
considered appropriate.

                                  Exhibit B-1-1



             As to certain matters of fact related to the opinions hereafter
expressed, we have relied solely upon representations of Guajillo in the Asset
Purchase Agreement. Seller's factual representations in the Certificate of
Seller, dated __________, 2002 (the "Certificate of Seller"), and each Member's
factual representations in the Certificate of Members, dated ___________, 2002
(the "Certificate of Members"), a copy of each of which is attached hereto as
Exhibit A. In addition, we have obtained and relied upon those certificates of
public officials we considered appropriate.

             We have assumed the genuineness of all signatures, the authenticity
of all documents submitted to us as originals and the conformity with originals
of all documents submitted to us as copies. With respect to each natural person
who is a party to the transaction, we have assumed such person has sufficient
legal capacity to carry out his or her obligations under the Agreements to which
any such person is a party. To the extent the Seller's obligations under the
Agreements to which Seller is a party depend on the due authorization, execution
and delivery of the Agreements by the other parties to the Agreements (other
than Seller), we have assumed that the Agreements have been so authorized,
executed and delivered.

             On the basis of such examination, our reliance upon the assumptions
in this opinion and our consideration of those questions of law we considered
relevant, and subject to the limitations and qualifications in this opinion, we
are of the opinion that:

             (a)  Seller is a limited liability company validly existing under
the laws of the State of Louisiana with the limited liability company power to
own its properties and assets and to conduct any activity that a limited
liability company organized under the Louisiana Limited Liability Law may
conduct.

             (b)  Seller has appropriate power to enter into and to perform its
obligations under the Agreements to which Seller is a party.

             (c)  The execution, delivery and performance by Seller of the
Agreements to which Seller is a party have been duly authorized by all necessary
limited liability company action on the part of Seller, and the Agreements to
which Seller is a party have been duly executed and delivered by Seller. The
Member Guarantee has been duly executed and delivered by each Member.

             (d)  The Agreements to which Seller is a party and the Member
Guarantee constitute the legally valid and binding obligations of Seller or each
Member, as applicable, enforceable against Seller or each Member, as applicable,
in accordance with their respective terms, except as limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally (including, without limitation, fraudulent
conveyance laws) and by general principles of equity, including, without
limitation, concepts of materiality, reasonableness, good faith and fair
dealing, regardless of whether considered in a proceeding in equity or at law.

             (e)  Seller's and each Member's execution and delivery of, and
performance of its, his or her obligations on or prior to the date of this
opinion under, the Agreements to which Seller is a party and the Member
Guarantee, as the case may be, do not and will not (i) violate such Seller's
organizational documents and operating agreement, (ii) violate, breach, or
result in

                                  Exhibit B-1-2



a default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any of the assets of Seller or any Member, under any existing
obligation of or restriction on Seller or any Member under any agreement to
which it, he or she is a party identified in the Certificate of Seller or the
Certificate of Members as being a material agreement of the Seller or any
Member, or (iii) breach or otherwise violate any existing obligation of or
restriction on Seller or any Member under any order, judgment or decree of any
Louisiana or federal court or governmental authority binding on Seller or any
Member which is identified in the Certificate of Seller.

             (f)  The execution and delivery by Seller or any Member of, and
performance of its, his or her obligations on or prior to the date of this
opinion under, the Agreements to which Seller is a party or the Member
Guarantee, as the case may be, do not conflict with or violate any statute, law,
regulation or rule of the United States or the State of Louisiana known to us,
recognizing that we have not undertaken, with your consent, any due diligence
investigation or research, recognized as applicable to Seller or any Member or
to transactions of the type contemplated by the Agreements or the Member
Guarantee.

             (g)  Except as set forth on Schedule __ hereto, no order, consent,
permit or approval of any Louisiana or federal government authority known to us,
recognizing that we have not undertaken, with your consent, any due diligence
investigation or research, recognized as applicable to Seller or any Member or
to transactions of the type contemplated by the Agreements to which Seller is a
party or the Member Guarantee is required on the part of Seller or any Member
for the execution and delivery of, and performance of its, his or her
obligations on or prior to the date of this opinion under, the Agreements to
which Seller is a party or the Member Guarantee.

             (h)  Except for the matters described in Schedule __ to the Asset
Purchase Agreement, we have not given substantive attention on behalf of Seller
or represented Seller or any Member in connection with any action, suit or
proceeding pending or threatened against Seller or any Member before any court,
arbitrator or governmental agency.

             Our opinion in paragraph (d) above as to the enforceability of the
Agreements is subject to:

             (i)   public policy considerations, statutes or court decisions
             that may limit the rights of a party to obtain indemnification
             against its own negligence, willful misconduct or unlawful conduct;

             (ii)  the unenforceability under certain circumstances of broadly
             or vaguely stated waivers or waivers of rights granted by law where
             the waivers are against public policy or prohibited by law;

             (iii) the unenforceability under certain circumstances of
             provisions imposing penalties and liquidated damages; and

             (iv)  the unenforceability under certain circumstances of choice of
             law provisions.

                                  Exhibit B-1-3



             We express no opinion with respect to the creation, attachment or
priority of any security interests, or your ability to collect attorney's fees
and costs in an action involving the Agreements if you are not the prevailing
party in that action.

             We express no opinion as to any provision of any Agreement
requiring written amendments or waivers of such Agreement insofar as it suggests
that oral or other modifications, amendments or waivers could not be effectively
agreed upon by the parties or that the doctrine of promissory estoppel might not
apply.

             For purposes of the opinion expressed in paragraphs (e), (f) and
(g), we have assumed that the Seller will not in the future take any
discretionary action (including a decision not to act) permitted by the
Agreements that would cause the performance of the Agreements to constitute a
violation or breach of or default under any of the orders, judgments or decrees
referred to in clause (iii) of paragraph (e) or violate any Louisiana or federal
statute, rule or regulation, require an order, consent, permit or approval to be
obtained from a Louisiana or federal governmental authority.

             We express no opinion concerning (i) federal or state antitrust,
unfair competition or trade practice laws or regulations, (ii) pension and
employee benefit laws and regulations, (iii) federal or state environmental laws
and regulations, (iv) federal or state land use or subdivision laws or
regulations or (v) federal or state laws and regulations relating to
communications.

             In rendering the opinion set forth in paragraph (a) above with
respect to the good standing of Guajillo under the laws of the State of
Louisiana, we have relied solely upon the certificate dated [_______] from the
Secretary of State of the State of Louisiana.

             The law covered by this opinion is limited to the present federal
law of the United States and the present law of the State of Louisiana. We
express no opinion as to the laws of any other jurisdiction and no opinion
regarding the statutes, administrative decisions, rules, regulations or
requirements of any county, municipality, subdivision or local authority of any
jurisdiction. Insofar as the opinions rendered herein relate to documents
governed by the laws of the State of Texas, we have advised you that we are
members of the bar of the State of Louisiana and are not familiar with the laws
of the State of Texas and render no opinion about them. For the purpose of these
opinions, we have assumed, with your consent, that the laws of the State of
Texas are identical in all respects to the laws of the State of Louisiana.

             Our use of the terms "known to us," "to our knowledge," or similar
phrase to qualify a statement in this opinion means that those attorneys in this
firm who have given substantive attention to the representation described in the
introductory paragraph of this opinion do not have current actual knowledge that
the statement is inaccurate. Such terms do not include any knowledge of other
attorneys within our firm (regardless of whether they have represented or are
representing the Seller and the Members in connection with any other matter) or
any constructive or imputed notice of any matters or items of information. We
have not undertaken any independent investigation to determine the accuracy of
the statement, and any limited inquiry undertaken by us during the preparation
of this opinion should not be regarded as such an investigation. No inference as
to our knowledge of any matters bearing on the accuracy of any such statement
should be drawn from the fact of our representation of the Seller and the
Members in connection with this opinion or in other matters.

                                  Exhibit B-1-4



         We have made no examination or investigation to verify the accuracy or
completeness of any financial, accounting, tax or statistical information
furnished to you or with respect to any other financial, accounting, tax or
statistical matters and express no opinion with respect thereto. Further, no
opinions are expressed herein with respect to any federal or state securities
laws or federal, state or local tax laws.

         This opinion is expressed as of the above date and we do not undertake
to provide any opinion as to matters, or to advise any person or entity with
respect to any events or changes of laws or conditions, occurring subsequently
to the date hereof.

         The foregoing expresses our legal opinion as to the matters set forth
above based upon our professional knowledge and judgment. This opinion should
not be construed as a guaranty that a court considering such matters would not
rule in a manner contrary to the opinion set forth above.

         This opinion is (i) solely for your information in connection with the
Agreements, (ii) not to be relied upon by any other person or entity for any
reason whatsoever, (iii) not to be quoted in whole or in part or otherwise
referred to in any document except as directly a part of and related to such
transactions contemplated by the Agreements, and (iv), except as required by
applicable law, not to be filed with any government agency or any other entity
or person whatsoever. We have, however, delivered a copy of this opinion to
[names of Buyers' various lenders] under [list of Buyers' credit documents],
each of which lenders (together with any actual or prospective participants,
assignees and successors thereunder from time to time party thereto) may rely on
this opinion as if it were addressed and had been delivered to it on the date of
this opinion.

                             Respectfully submitted,

                                 Exhibit B-1-5



                                   EXHIBIT B-2

                     Legal Opinion of Seller's Counsel (FCC)


                                           [The Closing Date]

LBI Holdings II, Inc.
Liberman Broadcasting of Houston, Inc.
Liberman Broadcasting of Houston License Corp.
1845 Empire Avenue
Burbank, California 91504


Gentlemen:

         We have acted as special communications law counsel for Guajillo
Investments, L.L.C., a Louisiana limited liability company ("Seller"), and we
have been asked to render our opinion concerning certain matters relating to the
Asset Purchase Agreement dated the 21st day of June, 2002 (the "Agreement") by
and among Seller, on the one hand, and LBI Holdings II, Inc., a California
corporation ("LBI Holdings"), Liberman Broadcasting of Houston, Inc., a
California corporation ("LBI"), and Liberman Broadcasting of Houston License
Corp., a California corporation ("LBI Sub"), on the other, providing for the
sale of assets used or useful in the operation of Stations KIOX-FM, 96.9 FM, El
Campo, Texas and KXGJ-FM, 101.7 FM, Bay City, Texas (the "Stations").

         This opinion is limited strictly to matters arising under the
Communications Act of 1934, as amended, and the published rules, regulations and
policies promulgated thereunder by the FCC (as defined below) (collectively, the
"Communications Laws"), and we express no opinion on any other matter
whatsoever. Furthermore, this opinion addresses matters only as of the date of
this opinion, and we specifically disclaim all responsibility for advising you,
your successors or assigns, and your counsel of changes in matters addressed
herein occurring after such date.

         We have examined such records of and related to the Stations that are
routinely available for public inspection at the Federal Communications
Commission ("FCC"), as we have deemed appropriate or necessary as the basis for
the opinions hereinafter set forth, including a review of the files available in
the FCC's public reference room on _______, 2002 [Note: Date to be within five
(5) business days of the Closing Date]. We also have reviewed the Agreement, one
or more assignments assigning to one or both Buyers the FCC Licenses, and the
files of this firm with respect to our representation of Seller before the FCC.
Whenever the opinions herein with respect to the existence or absence of facts
is indicated to be based on our knowledge or awareness, it is intended to
indicate that during the course of our representation, no information has come
to our attention, which would give us actual knowledge of such facts. For
purposes of this opinion, the definition of the term "actual knowledge" as such
term relates to this firm is based solely upon the actual conscious knowledge of
attorneys who are currently members or employees of this firm who are directly
involved in representation of Seller; and to the extent not inconsistent with
such actual conscious knowledge, reliance on representations as to factual

                                 Exhibit B-2-1



matters, including representations contained in the Agreement or in one or more
certificates of Seller or of a member or members of Seller, without
investigation or special inquiry on our part to verify the accuracy of such
representations except as expressly provided otherwise herein; and a review of
the Agreement and other documents specifically identified herein as examined in
connection with the rendering of this opinion including the review of the
routinely available public records of the FCC and the files of this firm with
respect to our representation of Seller before the FCC, in each case, as
described above. Other than the review described in this paragraph, with your
consent we have not undertaken any independent investigation to determine the
existence or absence of such facts, nor have we inspected the Stations, and no
inference as to our knowledge of the existence or absence of such facts should
be drawn from our serving as special communications counsel to Seller.

         In making such examinations, we have assumed the (i) genuineness of all
signatures, (ii) legal capacity of all natural persons, (iii) authenticity of
all documents submitted to us as originals, and (iv) conformity to originals of
all documents submitted to us as certified or photostatic copies. Furthermore,
we have assumed the completeness of the public files maintained by the FCC and
the accuracy and authenticity of all documents contained therein.

         Based on the foregoing, and subject to the assumptions, qualifications
and exceptions contained herein, we are of the opinion that:

            1.  The licenses listed in the Attachment (the "FCC Licenses") are
                in full force and effect and Seller is the holder of such
                licenses. Seller has obtained all consents from the FCC
                necessary to assign the licenses for the Stations to LBI Sub. To
                the best of our knowledge, the FCC Licenses are all the licenses
                necessary to operate a Class C1 FM radio station on 96.9 MHz and
                a Class C1 FM radio station on 101.7 MHz at El Campo and Bay
                City, Texas, respectively, in the manner presently operated by
                Seller.

            2.  The order of the FCC granting its consent for the assignment of
                the FCC Licenses to LBI Sub (the "FCC Consent") was issued on
                _____________ and public notice of the FCC Consent was given on
                ____________. The time provided by the Communications Laws
                within which a party in interest other than the FCC may seek
                administrative reconsideration or review of the FCC Consent has
                expired, and to our knowledge, and based upon our review of the
                FCC's files, no petition for reconsideration or application for
                review was filed within such time with the FCC. The time
                provided by the Communications Laws within which the FCC may
                review the FCC Consent on its own motion has expired, and the
                FCC did not give public notice of its intent to review the FCC
                Consent on its own motion and, to our knowledge, the FCC has not
                otherwise stated an intent to review the FCC Consent on its own
                motion. With respect to our opinion in this paragraph 2., we
                advise you that in extraordinary circumstances, the FCC and the
                courts have held that petitions for review or reconsideration
                may be considered even if filed after the period prescribed by
                rule or statute for such submissions. Additionally, in previous
                cases where the FCC discovered procedural irregularities, it has
                reconsidered its prior action well after the standard time for
                such reconsideration had expired.

                                 Exhibit B-2-2



            3.  To our knowledge, except for proceedings of general
                applicability to the broadcast industry, we have not been
                notified of, and the FCC has not issued any public notice
                announcing, any formal investigative proceeding or claim, and we
                are not aware of any other legal or administrative proceeding
                pending before the FCC against the Stations or Seller with
                respect to the Stations which could reasonably be expected to
                result in the revocation, nonrenewal or suspension of the FCC
                Licenses, the imposition of any fine or forfeiture, reporting
                requirements or other sanction against the Stations or Seller
                with respect to the Stations by the FCC, or the adverse material
                modification of the FCC Licenses.

            4.  The execution, delivery and consummation of the Agreement by
                Seller do not violate the Communications Laws.

         This opinion is (i) solely for your information in connection with the
consummation of the assignment of the FCC Licenses by Seller to LBI Sub, (ii)
not to be relied upon by any other person or entity for any reason whatsoever,
(iii) not to be quoted in whole or in part or otherwise referred to in any
document except as directly a part of and related to transactions contemplated
by the Agreements, and (iv), except as required by applicable law, not to be
filed with any government agency or any other entity or person whatsoever. We
have, however, delivered a copy of this opinion to [names of Buyers' various
lenders] under [list of Buyers' credit documents], each of which lenders
(together with any actual or prospective participants, assignees and successors
thereunder from time to time party thereto) may rely on this opinion as if it
were addressed and had been delivered to it on the date of this opinion.

                                   Sincerely,

                                   HEBERT, SPENCER, CUSIMANO & FRY, L.L.P.



                                   Charles L. Spencer

CLS/bsb

                                 Exhibit B-2-3



                                                                      ATTACHMENT

FCC LICENSES



Call Sign                  Type                               Expiration
- ---------                  ----                               ----------

KIOX-FM                    Main Station                       08/01/2005
KXGJ-FM                    Main Station                       08/01/2005
WME985                     STL                                08/01/2005
WLQ250                     STL                                08/01/2005
WPNJ956                    STL                                08/01/2005

                                 Exhibit B-2-4



                                    EXHIBIT C

                     Legal Opinion of LBI Entities' Counsel


[Closing Date]



Guajillo Investments, LLC
[Address]



[Buyer's various lenders]

         Re: Purchase of Certain Assets of Guajillo Investments, LLC

Ladies and Gentlemen:

         We have acted as counsel to LBI Holdings II, Inc., a California
corporation ("LBI Holdings"), Liberman Broadcasting of Houston, Inc., a
California corporation ("LBI") and Liberman Broadcasting of Houston License
Corp., a California corporation ("LBI Sub", and together with LBI Holdings and
LBI, the "LBI Entities" and each individually an "LBI Entity"), in connection
with the acquisition by the LBI Entities of certain assets which are used or
held for use in connection with the radio stations KIOX-FM (96.9 FM, El Campo,
Texas) and KXGJ (101.7 FM, Bay City, Texas) and related assets, license, permits
and authorizations issued by the Federal Communications Commission to Guajillo
Investments, LLC, a Louisiana limited liability company (the "Seller") pursuant
to the Asset Purchase Agreement dated as of June 21, 2002 (the "Asset Purchase
Agreement"), by and among the LBI Entities and the Seller. We have also
reviewed, among other things, the Corporate Custodial Agreement Relating to
Earnest Money dated June 21, 2002 executed by [a financial institution or escrow
company approved by all parties], as escrow agent, LBI Holdings and Seller (the
"Escrow Agreement" and together with the Asset Purchase Agreement, the
"Agreements"). We are providing this opinion to you at the request of the LBI
Entities pursuant to Section 9.2.2 of the Asset Purchase Agreement. All
capitalized terms used in this opinion and not defined herein will have the
meanings given in the Asset Purchase Agreement.

         In our capacity as such counsel, we have examined originals or copies
of those corporate and other records and documents we considered appropriate.

         As to relevant factual matters, we have relied upon, among other
things, the LBI Entities' factual representations in the Certificates of LBI
Entity, dated __________, 2002 (the "Certificates of LBI Entity"), a copy of
each of which is attached hereto as Exhibit A. In addition, we have obtained and
relied upon those certificates of public officials we considered appropriate.

         We have assumed the genuineness of all signatures, the authenticity of
all documents submitted to us as originals and the conformity with originals of
all documents

                                   Exhibit C-1



submitted to us as copies. With respect to each natural person who is a party to
the transaction, we have assumed such person has sufficient legal capacity to
carry out his or her obligations under the Agreements to which any such person
is a party. To the extent the LBI Entities' obligations under the Agreements to
which each LBI Entity is a party depend on the due authorization, execution and
delivery of the Agreements by the other parties to the Agreements (other than
any of the LBI Entities), we have assumed that the Agreements have been so
authorized, executed and delivered.

         On the basis of such examination, our reliance upon the assumptions in
this opinion and our consideration of those questions of law we considered
relevant, and subject to the limitations and qualifications in this opinion, we
are of the opinion that:

         (a) Each LBI Entity is a corporation validly existing under the laws of
the State of California with the corporate power to own its properties and
assets and to conduct any activity that a corporation organized under the
California General Corporation Law may conduct (other than the banking,
insurance or trust company business or the rendering of "professional services"
as defined in Subdivision (a) of Section applicable 13401 of the California
Corporations Code).

         (b) Each LBI Entity has corporate power to enter into and to perform
its obligations under the Agreements to which such LBI Entity is a party.

         (c) The execution, delivery and performance by any LBI Entity of the
Agreements to which such LBI Entity is a party have been duly authorized by all
necessary corporate action on the part of such LBI Entity, and the Agreements to
which such LBI Entity is a party have been duly executed and delivered by such
LBI Entity.

         (d) The Agreements to which any LBI Entity is a party constitute the
legally valid and binding obligations of such LBI Entity, enforceable against
such LBI Entity in accordance with their respective terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors' rights generally (including, without
limitation, fraudulent conveyance laws) and by general principles of equity,
including, without limitation, concepts of materiality, reasonableness, good
faith and fair dealing, regardless of whether considered in a proceeding in
equity or at law.

         (e) The execution and delivery by any LBI Entity of, and performance of
its obligations on or prior to the date of this opinion under, the Agreements to
which such LBI Entity is a party, do not and will not (i) violate such LBI
Entity's Articles of Incorporation or Bylaws, (ii) violate, breach, or result in
a default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any of the assets of such LBI Entity under, any existing
obligation of or restriction on such LBI Entity under any agreement to which it
is a party identified in the applicable Certificate of LBI Entity as being a
material agreement of such LBI Entity, or (iii) to our knowledge, breach or
otherwise violate any existing obligation of or restriction on such LBI Entity
under any order, judgment or decree of any California or federal court or
governmental authority binding on such LBI Entity.

         (f) The execution and delivery by any LBI Entity of, and performance of
its obligations on or prior to the date of this opinion under, the Agreements to
which such LBI

                                   Exhibit C-2



Entity is a party do not violate any current California or federal statute or
regulation that we have, in the exercise of customary professional diligence,
recognized as applicable to such LBI Entity or to transactions of the type
contemplated by the Agreements.

         (g) Except as set forth on Schedule __ hereto, no order, consent,
permit or approval of any California or federal government authority that we
have, in the exercise of customary professional diligence, recognized as
applicable to any LBI Entity or to transactions of the type contemplated by the
Agreements to which such LBI Entity is a party is required on the part of such
LBI Entity for the execution and delivery of, and performance of its obligations
on or prior to the date of this opinion under, the Agreements to which such LBI
Entity is a party.

         Our opinion in paragraph (d) above as to the enforceability of the
Agreements is subject to:

         (i)   public policy considerations, statutes or court decisions that
         may limit the rights of a party to obtain indemnification against its
         own negligence, willful misconduct or unlawful conduct;

         (ii)  the unenforceability under certain circumstances of broadly or
         vaguely stated waivers or waivers of rights granted by law where the
         waivers are against public policy or prohibited by law;

         (iii) the unenforceability under certain circumstances of provisions
         imposing penalties and liquidated damages; and

         (iv)  the unenforceability under certain circumstances of choice of law
         provisions.

         We express no opinion with respect to the creation, attachment or
priority of any security interests, or your ability to collect attorney's fees
and costs in an action involving the Agreements if you are not the prevailing
party in that action (we call your attention to the effect of Section 1717 of
the California Civil Code, which provides that where a contract permits one
party thereto to recover attorney's fees, the prevailing party in any action to
enforce any provision of the contract shall be entitled to recover its
reasonable attorney's fees).

         We express no opinion as to any provision of any Agreement requiring
written amendments or waivers of such Agreement insofar as it suggests that oral
or other modifications, amendments or waivers could not be effectively agreed
upon by the parties or that the doctrine of promissory estoppel might not apply.

         For purposes of the opinion expressed in paragraphs (e), (f) and (g),
we have assumed that the Buyer will not in the future take any discretionary
action (including a decision not to act) permitted by the Agreements that would
cause the performance of the Agreements to constitute a violation or breach of
or default under any of the orders, judgments or decrees referred to in clause
(iii) of paragraph (e) or violate any California or federal statute, rule or
regulation, require an order, consent, permit or approval to be obtained from a
California or federal governmental authority.

         In rendering the opinion set forth in paragraph (a) above with respect
to the good standing of each LBI Entity under the laws of the State of
California, we have relied solely upon

                                   Exhibit C-3



a certificate dated [_______] from the Secretary of State of the State of
California as to each LBI Entity's good standing in the State of California.

         We express no opinion concerning (i) federal or state antitrust, unfair
competition or trade practice laws or regulations, (ii) pension and employee
benefit laws and regulations, (iii) federal or state environmental laws and
regulations, (iv) federal or state land use or subdivision laws or regulations
or (v) federal or state laws and regulations relating to communications.

         The law covered by this opinion is limited to the present federal law
of the United States and the present law of the State of California. We express
no opinion as to the laws of any other jurisdiction and no opinion regarding the
statutes, administrative decisions, rules, regulations or requirements of any
county, municipality, subdivision or local authority of any jurisdiction.
Insofar as the opinions rendered herein relate to documents governed by the laws
of the State of Texas, we have advised you that we are members of the bar of the
State of California and are not familiar with the laws of the State of Texas and
render no opinion about them. For the purposes of these opinions, we have
assumed, with your consent, that the laws of the State of Texas are identical in
all respect to the laws of the State of California.

         Our use of the terms "known to us," "to our knowledge," or similar
phrase to qualify a statement in this opinion means that those attorneys in this
firm who have given substantive attention to the representation described in the
introductory paragraph of this opinion do not have current actual knowledge that
the statement is inaccurate. Such terms do not include any knowledge of other
attorneys within our firm (regardless of whether they have represented or are
representing the LBI Entities in connection with any other matter) or any
constructive or imputed notice of any matters or items of information. We have
not undertaken any independent investigation to determine the accuracy of the
statement, and any limited inquiry undertaken by us during the preparation of
this opinion should not be regarded as such an investigation. No inference as to
our knowledge of any matters bearing on the accuracy of any such statement
should be drawn from the fact of our representation of the LBI Entities in
connection with this opinion or in other matters.

         This opinion is (i) solely for your information in connection with the
Agreements, (ii) not to be relied upon by any other person or entity for any
reason whatsoever, (iii) not to be quoted in whole or in part or otherwise
referred to in any document except as directly a part of and related to such
transactions contemplated by the Agreements, and (iv), except as required by
applicable law, not to be filed with any government agency or any other entity
or person whatsoever. We have, however, delivered a copy of this opinion to
[names of Buyers' various lenders] under [list of Buyers' credit documents],
each of which lenders (together with any actual or prospective participants,
assignees and successors thereunder from time to time party thereto) may rely on
this opinion as if it were addressed and had been delivered to it on the date of
this opinion.

                             Respectfully submitted,

                                   Exhibit C-4



                                    EXHIBIT D

                                MEMBER GUARANTEE


         This Guarantee is entered into as of ______________ by Cheryl Stewart,
Peter Scalfano, and Joseph Clements, Jr., each an individual (each a "Guarantor"
and collectively the "Guarantors"), in favor of and for the benefit of LBI
Holdings II, Inc., a California corporation, LBI Broadcasting of Houston, Inc.,
a California corporation and LBI Broadcasting of Houston License Corp.
(collectively the "Guarantied Parties"), party to that certain Asset Purchase
Agreement dated June 21, 2002 by and among Guajillo Investments, LLC, a
Louisiana limited liability company, (the "Seller") and the Guarantied Parties (
the "Asset Purchase Agreement"; capitalized terms defined therein and not
otherwise defined herein being used herein as therein defined).

         1. Guarantee; Limit. Guarantors jointly and severally, irrevocably and
unconditionally guarantee, as primary obligors and not merely as sureties, the
due and punctual payment in full of all Guarantied Obligations (as hereinafter
defined) when the same shall become due, whether at stated maturity, by
acceleration, demand or otherwise (including amounts that would become due but
for the operation of the automatic stay under Section 362(a) of the Bankruptcy
Code, 11 U.S.C. (S) 362(a)). The term "Guarantied Obligations" is used herein in
its most comprehensive sense and includes any and all obligations of Seller,
including all Seller's indemnities and liabilities of whatsoever nature, now or
hereafter made, incurred or created in connection with the Asset Purchase
Agreement, including but not limited to the indemnification obligations set
forth in Article X.

         In consideration of the Seller receiving funds from the Guarantied
Parties, which funds will be distributed to the Guarantors as the only members
of the Seller, each Guarantor knowingly, voluntarily and intentionally agrees
and acknowledges receipt of full and complete consideration.

         Any interest on any portion of the Guarantied Obligations that accrues
after the commencement of any proceeding, voluntary or involuntary, involving
the bankruptcy, insolvency, receivership, reorganization, liquidation or
arrangement of Seller (or, if interest on any portion of the Guarantied
Obligations ceases to accrue by operation of law by reason of the commencement
of said proceeding, such interest as would have accrued on such portion of the
Guarantied Obligations if said proceeding had not been commenced) shall be
included in the Guarantied Obligations because it is the intention of Guarantors
and the Guarantied Parties that the Guarantied Obligations should be determined
without regard to any rule of law or order that may relieve Seller of any
portion of such Guarantied Obligations.

         In the event that all or any portion of the Guarantied Obligations is
paid by Seller, the obligations of the Guarantors hereunder shall continue and
remain in full force and effect or be reinstated, as the case may be, in the
event that all or any part of such payment(s) is rescinded or recovered directly
or indirectly from a Guarantied Party as a preference, fraudulent transfer or
otherwise, and any such payments that are so rescinded or recovered shall
constitute Guarantied Obligations.

                                   Exhibit D-1



               Subject to the other provisions of this Section 1, upon
failure of Seller to pay any of the Guarantied Obligations when and as the same
shall become due, Guarantors will upon demand pay, or cause to be paid, in cash,
to such Guarantied Party entitled to the Guarantied Obligation, an amount equal
to the aggregate of the unpaid Guarantied Obligations. This obligation is joint
and several, so that each Guarantor will be liable up to the full amount of the
unpaid Guarantied Obligations; provided, however, notwithstanding anything else
in the Guarantee, that in no case shall (1) any Guarantor individually be liable
for an amount in excess of the proceeds such Guarantor has received from the
sale of the Stations (as defined in the Asset Purchase Agreement) which amounts
are agreed to be $360,000, $320,000 and $120,000, for Peter Scalfano, Cheryl
Stewart and Joseph Clements, Jr., respectively and (2) the Guarantors be liable
for an amount in aggregate exceeding $800,000.

               2.   Guarantee Absolute; Continuing Guarantee. The obligations of
Guarantors hereunder are irrevocable, absolute, independent and unconditional
and shall not be affected by any circumstance which constitutes a legal or
equitable discharge of a guarantor or surety other than payment in full of the
Guarantied Obligations. In furtherance of the foregoing and without limiting the
generality thereof, each Guarantor agrees that: (a) this Guarantee is a
Guarantee of payment when due and not of collectibility; (b) any Guarantied
Party may enforce this Guarantee upon the occurrence of an indemnifiable loss or
Damage under the Asset Purchase Agreement notwithstanding the existence of any
dispute between Seller and the Guarantied Party with respect to the existence of
such event; (c) the obligations of each Guarantor hereunder are independent of
the obligations of Seller under the Asset Purchase Agreement and a separate
action or actions may be brought and prosecuted against any or all Guarantors
whether or not any action is brought against Seller or any of such other
guarantors and whether or not Seller is joined in any such action or actions;
and (d) Guarantor's payment of a portion, but not all, of the Guarantied
Obligations shall in no way limit, affect, modify or abridge such Guarantor's
liability for any portion of the Guarantied Obligations that has not been paid.
This Guarantee is a continuing Guarantee and shall be binding upon each
Guarantor and his or her successors and assigns, and each Guarantor irrevocably
waives any right to revoke this Guarantee as to future transactions giving rise
to any Guarantied Obligations.

               3.   Actions by Guarantied Parties. Any or all Guarantied Parties
may from time to time, without notice or demand and without affecting the
validity or enforceability of this Guarantee or giving rise to any limitation,
impairment or discharge of Guarantor's liability hereunder, (a) renew, extend,
accelerate or otherwise change the time, place, manner or terms of payment of
the Guarantied Obligations, (b) settle, compromise, release or discharge, or
accept or refuse any offer of performance with respect to, or substitutions for,
the Guarantied Obligations or any agreement relating thereto and/or subordinate
the payment of the same to the payment of any other obligations, (c) request and
accept other guaranties of the Guarantied Obligations and take and hold security
for the payment of this Guarantee or the Guarantied Obligations, (d) release,
exchange, compromise, subordinate or modify, with or without consideration, any
security for payment of the Guarantied Obligations, any other guaranties of the
Guarantied Obligations, or any other obligation of any person with respect to
the Guarantied Obligations, (e) enforce and apply any security now or hereafter
held by or for the benefit of a Guarantied Party in respect of this Guarantee or
the Guarantied Obligations and direct the order or manner of sale thereof, or
exercise any other right or remedy that a Guarantied Party may have against any
such security, as such Guarantied Party in its discretion may determine
consistent with the Asset

                                   Exhibit D-2



Purchase Agreement, and (f) exercise any other rights available to the
Guarantied Party under the Asset Purchase Agreement.

               4.   No Discharge. This Guarantee and the obligations of the
Guarantors hereunder shall be valid and enforceable and shall not be subject to
any limitation, impairment or discharge for any reason (other than payment in
full of the Guarantied Obligations), including without limitation the occurrence
of any of the following, whether or not such Guarantor shall have had notice or
knowledge of any of them: (a) any failure to assert or enforce or agreement not
to assert or enforce, or the stay or enjoining, by order of court, by operation
of law or otherwise, of the exercise or enforcement of, any claim or demand or
any right, power or remedy with respect to the Guarantied Obligations or any
agreement relating thereto, or with respect to any other Guarantee of or
security for the payment of the Guarantied Obligations, (b) any waiver or
modification of, or any consent to departure from, any of the terms or
provisions of the Asset Purchase Agreement or any agreement or instrument
executed pursuant thereto, or of any other Guarantee or security for the
Guarantied Obligations, (c) the application of payments received from any source
to the payment of indebtedness other than the Guarantied Obligations, even
though a Guarantied Party might have elected to apply such payment to any part
or all of the Guarantied Obligations, (d) any defenses, set-offs or
counterclaims which Seller may assert against a Guarantied Party in respect of
the Guarantied Obligations, including but not limited to failure of
consideration, breach of warranty, payment, statute of frauds, statute of
limitations, accord and satisfaction and usury, and (e) any other act or thing
or omission, or delay to do any other act or thing, which may or might in any
manner or to any extent vary the risk of a Guarantor as an obligor in respect of
the Guarantied Obligations.

               5.   Waivers. Each Guarantor waives, for the benefit of the
Guarantied Parties: (a) any right to require any Guarantied Party, as a
condition of payment or performance by Guarantor, to (i) proceed against Seller,
the other Guarantors, or any other person, (ii) proceed against or exhaust any
security held from Seller, the other Guarantors or any other person, (iii)
proceed against or have resort to any balance of any deposit account or credit
on the books of such Guarantied Party in favor of Seller or any other person, or
(iv) pursue any other remedy in the power of a Guarantied Party; (b) any defense
arising by reason of the incapacity, lack of authority or any disability or
other defense of Seller including, without limitation, any defense based on or
arising out of the lack of validity or the unenforceability of the Guarantied
Obligations or any agreement or instrument relating thereto or by reason of the
cessation of the liability of Seller from any cause other than payment in full
of the Guarantied Obligations; (c) any defense based upon any statute or rule of
law which provides that the obligation of a surety must be neither larger in
amount nor in other respects more burdensome than that of the principal; (d) any
defense based upon a Guarantied Party's errors or omissions in the
administration of the Guarantied Obligations, except behavior that amounts to
bad faith; (e) (i) any principles or provisions of law, statutory or otherwise,
that are or might be in conflict with the terms of this Guarantee and any legal
or equitable discharge of such Guarantor's obligations hereunder, (ii) the
benefit of any statute of limitations affecting a Guarantor's liability
hereunder or the enforcement hereof, and (iii) any rights to set-offs,
recoupments and counterclaims; (f) notices, demands, presentments, protests,
notices of protest, notices of dishonor and notices of any action or inaction,
including acceptance of this Guarantee, notices of default under the Asset
Purchase Agreement or any agreement or instrument related thereto, notices of
any modification of the Guarantied Obligations or any agreement related thereto,
notices of any extension of credit to Seller and notices of any of the matters
referred to in the

                                   Exhibit D-3



preceding paragraph and any right to consent to any thereof; (g) to the
fullest extent permitted by law, any defenses or benefits that may be derived
from or afforded by law which limit the liability of or exonerate guarantors or
sureties, or which may conflict with the terms of this Guarantee and (h) each
right to which any of them may be entitled by virtue of the laws of the State of
Texas governing suretyship and guaranties, including, without limitation, any
rights under Rule 31, Texas Rules of Civil Procedure, Section 17.001 of the
Texas Civil Practice and Remedies Code and Chapter 34 of the Texas Business and
Commerce Code, as any or all of the same may be amended or construed from time
to time, or the common law of the State of Texas at all relevant times.

               6.   Guarantor's Rights of Subrogation, Contribution, Etc.;
Subordination of Other Obligations. Each Guarantor waives any claim, right or
remedy, direct or indirect, that such Guarantor now has or may hereafter have
against Seller or any of its assets in connection with this Guarantee or the
performance by Guarantor of his or her obligations hereunder, in each case
whether such claim, right or remedy arises in equity, under contract, by
statute, under common law or otherwise and including without limitation (a) any
right of subrogation, reimbursement or indemnification that a Guarantor now has
or may hereafter have against Seller, (b) any right to enforce, or to
participate in, any claim, right or remedy that a Guarantied Party now has or
may hereafter have against Seller, and (c) any benefit of, and any right to
participate in, any collateral or security now or hereafter held by the
Guarantied Party. Each Guarantor further agrees that, to the extent the waiver
or agreement to withhold the exercise of his or her rights of subrogation,
reimbursement, indemnification and contribution as set forth herein is found by
a court of competent jurisdiction to be void or voidable for any reason, any
rights of subrogation, reimbursement or indemnification Guarantor may have
against Seller or against any collateral or security, shall be junior and
subordinate to any rights any Guarantied Party may have against Seller, to all
right, title and interest any Guarantied Party may have in any such collateral
or security, and to any right any Guarantied Party may have against such other
guarantor.

               Any indebtedness of Seller now or hereafter held by a Guarantor
is subordinated in right of payment to the Guarantied Obligations, and any such
indebtedness of Seller to a Guarantor collected or received by such Guarantor
after an indemnifiable loss for which a Guarantied Party is entitled to
indemnification under the Asset Purchase Agreement has occurred and has not yet
been recovered, and any amount paid to such Guarantor on account of any
subrogation, reimbursement, indemnification or contribution rights referred to
in the preceding paragraph when all Guarantied Obligations have not been paid in
full, shall be held in trust for Guarantied Party and shall forthwith be paid
over to Guarantied Party to be credited and applied against the Guarantied
Obligations.

               7.   Expenses. The Guarantors jointly and severally agree to pay,
or cause to be paid, on demand, and to save each and every Guarantied Party
harmless against liability for, any and all costs and expenses (including fees
and disbursements of counsel and allocated costs of internal counsel) incurred
or expended by such Guarantied Party in connection with the enforcement of or
preservation of any rights under this Guarantee.

               8.   Amendments and Waivers. No amendment, modification,
termination or waiver of any provision of this Guarantee, and no consent to any
departure by Guarantor therefrom, shall in any event be effective without the
written concurrence of each and all

                                   Exhibit D-4



Guarantied Parties and, in the case of any such amendment or modification, each
and all Guarantors. Any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given.

               9.   Miscellaneous. It is not necessary for a Guarantied Party to
inquire into the capacity or powers of any Guarantor or Seller or the officers,
directors or any agents acting or purporting to act on behalf of any of them.

               The rights, powers and remedies given to the Guarantied Party by
this Guarantee are cumulative and shall be in addition to and independent of all
rights, powers and remedies given to the Guarantied Party by virtue of any
statute or rule of law or in the Asset Purchase Agreement. Any forbearance or
failure to exercise, and any delay by a Guarantied Party in exercising, any
right, power or remedy hereunder shall not impair any such right, power or
remedy or be construed to be a waiver thereof, nor shall it preclude the further
exercise of any such right, power or remedy.

               In case any provision in or obligation under this Guarantee shall
be invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.

               THIS GUARANTEE AND THE RIGHTS AND OBLIGATIONS OF THE GUARANTORS
AND THE GUARANTIED PARTIES SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF TEXAS, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES.

               This Guarantee shall inure to the benefit of each Guarantied
Party and their successors and assigns.

               ANY DISPUTE, CONTROVERSY OR OTHER MATTERS AS TO WHICH THE PARTIES
DISAGREE ARISING OUT OF, RELATING TO OR IN CONNECTION WITH THE PROVISIONS OF
THIS AGREEMENT OR THE INTERPRETATION, BREACH OR ALLEGED BREACH HEREOF SHALL BE
SETTLED AND DECIDED BY ARBITRATION CONDUCTED BY THE JUDICIAL ARBITRATION AND
MEDIATION SERVICE ("JAMS"), SUBJECT TO THE FOLLOWING:

               (a)  Any arbitration as set forth above shall be held and
conducted in Houston, Texas before one arbitrator who shall be selected by
mutual agreement of the parties. If agreement is not reached on the selection of
the arbitrator within 30 days after commencement of an arbitration by (i)
submission of a matter to the JAMS in accordance with its Commercial Arbitration
Rules and (ii) notice to the other party of the initiating party's intention to
arbitrate, then such arbitrator shall be appointed by the presiding judge of the
appropriate United States Court for the Northern District of Texas.

               (b)  The arbitrator appointed must be a former or retired judge,
or an attorney with at least 15 years experience in the broadcast radio
industry.

                                   Exhibit D-5



               (c)  All proceedings involving the parties shall be reported by a
certified shorthand court reporter and written transcripts of the proceedings
shall be prepared and made available to the parties.

               (d)  The prevailing party shall be awarded reasonable attorneys'
fees, expert and non-expert witness costs and expenses, and other costs and
expenses incurred in connection with the arbitration unless the arbitrator, for
good cause, determines otherwise.

               (e)  The dispute shall be heard in accordance with the rules and
procedures of JAMS and the arbitrator's decision and award shall be final and
binding.

               (f)  Costs and fees of the arbitrator (including the cost of the
record of transcripts of the arbitration) shall be borne by the non-prevailing
party, unless the arbitrator for good cause determines otherwise. Costs and fees
payable in advance shall be advanced equally by the parties, subject to ultimate
payment by the non-prevailing party in accordance with the preceding sentence.

               (g)  Any Guarantied Party or any Guarantor may initiate an
arbitration proceeding under this Section 9 by written notice to the other party
of his, her or its intention to arbitrate, specifying the dispute or controversy
to be arbitrated, the amount involved and the remedy sought, and by filing with
the Dallas, Texas office of the JAMS a copy of said notice together with a copy
of this Guarantee and the fee specified in the JAMS fee schedule. In no event
shall a demand for arbitration be made after the date when institution of legal
or equitable proceedings based on the claim, dispute or other matter in question
would be barred by the applicable statute of limitations.

               (h)  This agreement to arbitrate shall be specifically
enforceable under applicable law in any court of competent jurisdiction. The
award rendered by the arbitrator shall be final and judgment may be entered in
accordance with applicable law and in any court having jurisdiction thereof.

               (i)  Notwithstanding anything contained in this Guarantee
elsewhere to the contrary, and unless modified by the arbitrator upon a showing
of good cause, the arbitration shall proceed upon the following schedule: (i)
within 30 days from the service of the notice of the request to arbitrate, the
parties shall select the arbitrator; (ii) within 30 days after selection of the
arbitrator, the parties shall conduct a pre-arbitration conference at which a
schedule of pre-arbitration discovery shall be set, all pre-arbitration motions
scheduled and any other necessary pre-arbitration matters decided; (iii) all
discovery shall be completed within four months following the pre-arbitration
conference; (iv) all pre-arbitration motions shall be filed and briefed so that
they may be heard no later than one month following the discovery cut-off; (v)
the arbitration shall be scheduled to commence no later than 30 days after the
decision on all pre-arbitration motions but in any event no later than six
months following the service of the notice of arbitration; and (vi) the
arbitrator shall render his written decision within 30 days following the
submission of the matter.

               (j)  Any monetary award of the arbitrator may include interest at
the highest prime rate, as published in the Wall Street Journal, plus two
percent but in no event shall the total interest exceed the maximum amount
allowed by Texas law, which interest shall accrue from the

                                   Exhibit D-6



date the claim, dispute or other matter in question was rightfully due and
payable under this Guarantee until the date the award is paid to the prevailing
party.

               (k)  No provision of this Section 9 shall limit the right of any
Guarantied Party or any Guarantor to exercise self-help remedies or to obtain
provisional or ancillary remedies from a court of competent jurisdiction before,
after, or during the pendency of any arbitration or other proceeding. The
exercise of such remedy does not waive the right of any party to resort to
arbitration.

               EACH GUARANTOR AND, BY ITS ACCEPTANCE OF THE BENEFITS HEREOF,
GUARANTIED PARTY EACH AGREES TO WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS GUARANTEE AND INSTEAD
AGREES TO ARBITRATION AS SET FORTH ABOVE. The scope of this waiver is intended
to be all-encompassing of any and all disputes that may be filed in any court
and that relate to the subject matter of this transaction, including without
limitation contract claims, tort claims, breach of duty claims and all other
common law and statutory claims. The Guarantors and, by its acceptance of the
benefits hereof, all Guarantied Parties (i) acknowledge that the Guarantors and
the Guarantied Parties have already relied on this waiver in entering into this
Guarantee or accepting the benefits thereof, as the case may be, and that each
will continue to rely on this waiver in their related future dealings, and (ii)
further warrant and represent for itself that it has reviewed this waiver with
its legal counsel and that each knowingly and voluntarily waives its rights
following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING
THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS OF
THIS GUARANTEE.

                  [remainder of page intentionally left blank]

                                   Exhibit D-7



               IN WITNESS WHEREOF, Guarantors have executed this Guarantee as of
the date first written above.

                                     ________________________________________
                                     Cheryl Stewart

                    Home Address:    ____________________________
                                     ____________________________
                                     ____________________________


                                     ________________________________________
                                     Peter Scalfano

                    Home Address:    ____________________________
                                     ____________________________
                                     ____________________________


                                     ________________________________________
                                     Joseph Clements, Jr.


                    Home Address:    ____________________________
                                     ____________________________
                                     ____________________________

                                   Exhibit D-8



                                    EXHIBIT E

                            FORM OF LESSOR ESTOPPELS

           SEE FOLLOWING PAGES WHICH CONTAIN THE FOLLOWING DOCUMENTS:

CONFIRMATION OF LEASE TERMS AND CONSENT (Studio Location, Highway 35 East - Bay
City, Matagorda County, Texas)

CONFIRMATION OF LEASE TERMS AND CONSENT (STL Location - Matagorda County, Texas)

CONFIRMATION OF LEASE TERMS AND CONSENT (Tower Lease - Collegeport, Matagorda
County, Texas) with Stanley

CONFIRMATION OF LEASE TERMS AND CONSENT (Tower Lease - Collegeport, Matagorda
County, Texas) with Tiner

                                   Exhibit E-1

EX-10.5

                                                                    Exhibit 10.5
                                 LENARD LIBERMAN

                                 PROMISSORY NOTE

$1,916,563.00                                            Los Angeles, California
                                                                    July 9, 2002

          FOR VALUE RECEIVED, LENARD LIBERMAN, an individual ("Payor"), hereby
promises to pay to the order of LBI MEDIA, INC., a California corporation
("Payee") the principal amount of ONE MILLION, NINE HUNDRED SIXTEEN THOUSAND,
FIVE HUNDRED SIXTY THREE DOLLARS AND NO CENTS ($1,916,563.00), together with
interest on the unpaid balance thereof from the date hereof in the amounts and
at the times specified below until such principal amount shall be paid (whether
at maturity, by prepayment, upon demand, by acceleration or otherwise).

          The Payor shall repay the unpaid principal balance of this Note by no
later than July 9, 2009. The unpaid principal under this Note shall bear
interest until due and payable at a rate equal to the Alternative Federal
Short-Term Rate published by the Internal Revenue Service for the month in which
such advance was made, per annum (calculated on the basis of a 360-day year and
the actual number of days elapsed), such interest shall be payable by no later
than July 9, 2009. This Note shall not be construed to require payment of any
interest in excess of the maximum amount permitted by law.

          All payments of principal and interest in respect of this Note shall
be made in lawful money of the United States of America and same day funds to
Payee at such place as shall be designated in writing for such purpose by Payee.

          This Note may be prepaid in whole or in part at any time without
penalty or premium.

          THIS NOTE SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES.

                                       -1-



          IN WITNESS WHEREOF, the Payor has executed and delivered this Note as
of the day and year and at the place first above written.


                                                       /s/ Lenard Liberman
                                                    ----------------------------
                                                    Lenard Liberman

Pay to the Order of

_______________________________
dated as of _________________


LBI MEDIA, INC.

By:  /s/ Jose Liberman
   --------------------------
      Name: Jose Liberman
      Title: President

                                       -2-

EX-10.6

                                                                    Exhibit 10.6

          DO NOT DESTROY THIS NOTE: When paid, this Note, with the Deed of Trust
          securing same, must be surrendered to trustee under the Deed of Trust
          for cancellation before reconveyance will be made.

                          NOTE SECURED BY DEED OF TRUST
                     INSTALLMENT - INTEREST (FIXED) INCLUDED

$3,250,000.00                                                     Loan No. 65207
                                                             Customer No. 639475
                                              9701 Wilshire Boulevard, Suite 600
                                                 Beverly Hills, California 90212
                                                                   July 15, 1999

On August 1, 2014, Empire Burbank Studios, Inc., a California corporation
("Borrower") promises to pay in immediately available funds to the order of City
National Bank, a national banking association ("CNB"), at its office set forth
above, the principal sum of Three Million Two Hundred Fifty Thousand and No/100
Dollars ($3,250,000.00), or so much thereof as may be outstanding, with interest
thereon to be computed from the date of its disbursement at a rate computed on a
basis of a 360-day year, actual days elapsed, equal to eight and thirteen
one-hundredths percent (8.13%) ("Interest Rate").

The first payment under this Note shall be for accrued interest only and shall
be due on August 1, 1999, with principal and interest together payable in
installments of Thirty One Thousand Five Hundred Thirty and 45/100 Dollars
($31,530.45) each month commencing with the first day of September 1, 1999, and
continuing thereafter on the same day of each month until maturity, as above
stated, when all unpaid interest and principal shall be payable. The above
stated monthly payments of principal and interest will amortize the loan in
fifteen (15) years.

The occurrence of any of the following with respect to Borrower shall constitute
an "Event of Default" hereunder:

1.   The failure to make any payment of principal or interest when due under
     this Note within ten (10) days after it becomes due and payable;

2.   The filing of a petition by Borrower for relief under Title 11 of the
     United States Code (the "Bankruptcy Code") or under any other present or
     future state or federal law regarding bankruptcy, reorganization or other
     debtor relief law; the filing of any pleading or an answer by Borrower in
     any involuntary proceeding under the Bankruptcy Code or other debtor relief
     law which admits the jurisdiction of the court or the petition's material
     allegations regarding Borrower's insolvency; a general assignment by
     Borrower for the benefit of creditors; or Borrower applying for, or the
     appointment of, a receiver, trustee, custodian or liquidator of Borrower or
     any of its property; or

3.   The failure of Borrower to effect a full dismissal of any involuntary
     petition under the Bankruptcy Code prior to the earlier of the entry of any
     court order granting relief sought

                                        1



     in such involuntary petition or sixty (60) days after the date of filing of
     such involuntary petition.

4.   The commencement by Borrower of dissolution or liquidation proceedings or
     the disqualification of Borrower to do business in the State of California;

5.   Any financial statement provided by Borrower to CNB is false or misleading
     in any material respect;

6.   Any violation, breach or default under this Note (other than the failure to
     pay principal or interest) or under any letter agreement, guaranty,
     security agreement, deed of trust or any other contract or instrument
     executed in connection with this Note or securing this Note which
     violation, breach or default continues for a period of twenty (20) days
     after receipt by Borrower of written notice thereof from CNB or, if a cure
     of such violation, breach or default cannot be reasonably completed at or
     before the expiration of such twenty (20) day period, such longer period as
     may be reasonably necessary to complete such cure so long as Borrower is
     diligently pursuing same but in any event not to exceed an additional
     twenty-five (25) days (for a total cure period of forty-five (45) days); or

7.   Any sale or transfer of all or substantially all of the assets of Borrower
     other than in the ordinary course of business.

Upon the occurrence of an Event of Default, CNB, at its option, may declare all
sums outstanding hereunder to be immediately due and payable without
presentment, demand, protest or notice of dishonor, all of which are hereby
expressly waived by Borrower. Borrower agrees to pay all costs and expenses,
including reasonable attorneys' fees, expended or incurred by CNB (or reasonably
allocable to CNB's in-house counsel) in connection with the enforcement of this
Note or the collection of any sums due hereunder and irrespective of whether
suit is filed. Following the occurrence and during the continuance of an Event
of Default, the unpaid principal balance hereunder shall bear additional
interest at a rate of five percent (5.0%) per year higher than the interest rate
as determined and computed above.

Borrower shall pay to CNB a late charge of 6% or $5.00, whichever is greater, of
each and every monthly installment not received by CNB on or before the tenth
(10th) day after the installment is due.

Should Borrower (or any successor in interest to Borrower) without the prior
written consent of CNB, sell, transfer, mortgage, pledge, hypothecate, assign or
encumber its interest in the property or any part thereof (other than leases
which are not the Material Lease (as defined in the Deed of Trust)) which secure
this Note, or should any holder of an equity interest in Borrower transfer or
encumber such interest except for (i) a pledge of the equity interest in
Borrower (the "Pledge") to Union Bank of California, N.A. (the "Agent") as
collateral agent, or any replacement agent or lender, to secure indebtedness
under that certain Credit Agreement dated as of January 6, 1998 between LBI
Holdings, II, Inc., the Agent, and the other parties thereto and any replacement
or refinancing (together with any such replacement or refinancing thereof, the
"Liberman Credit") (ii) any exercise by Agent of its remedies under the Pledge
and (iii) any transfer to an assignee of the Agent in connection with the
exercise of such remedies, whether

                                        2



voluntarily or involuntarily, then CNB may at its option declare the whole sum
of principal and interest (and all other sums secured by any Deed of Trust taken
as security for this Note) immediately due and payable. This provision shall
apply to each and every sale, transfer, mortgage, pledge, hypothecation,
assignment or encumbrance (except as provided above) regardless whether or not
CNB has consented to, or waived, its right hereunder, whether by action or
non-action, in connection with any previous sale, transfer, mortgage, pledge,
hypothecation, assignment or encumbrance, whether one or more.

Borrower shall have the right to prepay the principal of this Note, in whole or
in part, on the first business day of a calendar month, which prepayment must be
preceded by not less than thirty (30) days prior written notice to CNB of
Borrower's intention to make such prepayment, the amount thereof, and the date
upon which such prepayment will be made, and there shall be paid to CNB
concurrently with such payment all then accrued interest and any and all other
amounts then due hereunder, TOGETHER WITH A PREPAYMENT CHARGE equal to:

                    (1)  For amounts paid during the period of August 1, 1999
                         through July 31, 2000, an amount equal to five percent
                         (5.0%) of the outstanding principal balance being
                         prepaid.

                    (2)  For amounts paid during the period of August 1, 2000
                         through July 31, 2001, an amount equal to four percent
                         (4.0%) of the outstanding principal balance.

                    (3)  For amounts paid during the period of August 1, 2001
                         through July 31, 2002, an amount equal to three percent
                         (3.0%) of the outstanding principal balance being
                         prepaid.

                    (4)  For amounts paid during the period of August 1, 2002
                         through July 31, 2003, an amount equal to two percent
                         (2.0%) of the outstanding principal balance being
                         prepaid.

                    (5)  For amounts paid during the period of August 1, 2003
                         through July 31, 2013, an amount equal to one percent
                         (1.0%) of the outstanding principal balance being
                         prepaid.

Notwithstanding the above, Borrower shall have the right to prepay the principal
of this Note, in whole or in part, without any prepayment charge during the last
six (6) months of the loan term, provided payment is received, on the first
(1st) business day of a calendar month, which prepayment must be preceded by not
less than thirty (30) days prior written notice to CNB of Borrower's intention
to make such prepayment, the amount thereof, and the date upon which payment
will be made, and there shall be paid to CNB concurrently therewith, all then
accrued interest and any and all other amounts then due thereunder.
Notwithstanding the foregoing, Borrower shall not be required to provide notice
to CNB or pay a prepayment charge if CNB applies insurance or condemnation
proceeds to the outstanding principal balance of the Loan.

In the event that CNB declares all sums due hereunder immediately due and
payable upon the occurrence of an Event of Default, Borrower shall pay to CNB a
prepayment charge equal to the

                                        3



prepayment charge (calculated as set forth above) which would be due hereunder
if Borrower had exercised its right to prepay of even date herewith executed by
Borrower in favor of CNB.

BORROWER HEREBY WAIVES ANY RIGHT IT MAY HAVE TO PREPAY THIS NOTE, IN WHOLE OR IN
PART, WITHOUT PREMIUM OR CHARGE, UPON ACCELERATION OF THE MATURITY OF THIS NOTE
(WHETHER ARISING UNDER SECTION 2954.10 OF THE CALIFORNIA CIVIL CODE OR
OTHERWISE), AND BORROWER HEREBY AGREES TO PAY THE PREPAYMENT CHARGE SET FORTH
ABOVE, WHETHER ANY PREPAYMENT IS VOLUNTARY OR UPON OR FOLLOWING ANY ACCELERATION
OF THIS NOTE (INCLUDING, WITHOUT LIMITATION, ANY ACCELERATION FOLLOWING A
TRANSFER, MORTGAGE, PLEDGE, HYPOTHECATION, ASSIGNMENT OR ENCUMBRANCE OF THE
PROPERTY (OR ANY PART THEREOF) WHICH SECURES THIS NOTE). BORROWER HAS SEPARATELY
INITIALED THIS PROVISION IN THE SPACE PROVIDED BELOW AND DECLARES THAT CNB'S
AGREEMENT TO MAKE THE LOAN EVIDENCED HEREBY ON THE TERMS AND CONDITIONS HEREOF
CONSTITUTES ADEQUATE CONSIDERATION, OF INDIVIDUAL WEIGHT, FOR THIS WAIVER AND
AGREEMENT BY BORROWER.

                                         BORROWER'S INITIALS     /s/ J.L.
                                                            --------------------

CNB's recovery against Borrower under the Loan Documents shall be limited solely
to the collateral given to CNB as security for Borrower's performance under the
Loan Documents (the "Collateral"), and such recovery shall not be a lien, or the
basis of a claim of lien or levy of execution, against the general assets of
Borrower. Notwithstanding the foregoing, Borrower and the general assets of
Borrower shall be fully liable to CNB to the same extent that Borrower would be
liable absent the foregoing limitation of this paragraph for: (a) fraud or
willful misrepresentation; (b) waste; (c) failure to pay income taxes or other
taxes, assessments or other charges attributable to Borrower which create liens
on any portion of the Collateral (to the full extent of any such liens); (d) the
amount of any Rents (as defined in the Deed of Trust) from the Collateral
collected by Borrower after Borrower's license to collect such Rents has
terminated; or (e) any breach by Borrower of any covenant or any indemnification
claim arising under any representation, warranty, covenant or indemnity relating
to hazardous materials (including, without limitation, any such breach or claim
arising under the Environmental Indemnity Agreement of even date executed by
Borrower, Jose Liberman and Lenard D. Liberman). In addition, the limitations
hereof shall not be deemed to limit: (i) any right CNB might otherwise have to
obtain injunctive relief against Borrower; (ii) any suit or action against
Borrower in connection with the preservation, enforcement or foreclosure of the
liens, mortgages, assignments and security interests now or at any time
hereafter securing the payment and performance of all sums and obligations under
the Loan Documents; or (iii) the collection of amounts which may become owing or
payable under or on account of insurance, condemnation awards or damages for
other public actions or surety bonds maintained or provided by Borrower in
connection with or related to the Collateral; provided, however, that the
assertion by CNB of any such right, suit, action or collection of amounts shall
not result in a monetary claim upon the general assets of Borrower except as
otherwise provided herein. CNB further agrees that it will not seek any recovery
of any indebtedness arising under the Loan Documents from LBI Holdings II, Inc.,
or any of its subsidiaries (collectively, the "LBI Entities"). This limitation
shall in no way impair CNB's, any receiver's or any other party's right to
enforce the terms of any lease of

                                       4



the Property by the Borrower to any LBI Entity or recover any fraudulent
transfer, preference or similar amount under any applicable state or federal
insolvency law. Notwithstanding anything to the contrary in this paragraph
(except for the provisions of the immediately preceding sentence), in the event
that Borrower were ever to be substantively consolidated with any one or more
LBI Entities, the value of the payment or other consideration received or to be
received by CNB on account of CNB's unsecured claim in such consolidated
bankruptcy shall be limited to a value not greater than the value of the payment
or other consideration which CNB would have received on account of such
unsecured claim in the event that there had been no such substantive
consolidation. The Agent and the other lenders from time to time party to the
Liberman Credit are hereby made intentional third party beneficiaries of the
provisions of this paragraph and shall be entitled to enforce them under law or
equity.

                                      Empire Burbank Studios, Inc., a California
                                      corporation

                                      By: /s/ Jose Liberman
                                          --------------------------------------
                                          Jose Liberman, President

                                      By: /s/ Lenard D. Liberman
                                          --------------------------------------
                                          Lenard D. Liberman, Secretary

                                        5

EX-10.7

                                                                    Exhibit 10.7

                          SECURITIES PURCHASE AGREEMENT

                                      AMONG

                              LBI HOLDINGS I, INC.


                                       AND

                  THE SEVERAL PURCHASERS NAMED IN SCHEDULE 2.1


                           Dated as of March 20, 2001



                                TABLE OF CONTENTS



                                                                                                               Page
                                                                                                            
                                                  ARTICLE I

                                                 DEFINITIONS

                                                  ARTICLE II

                                 SALE AND PURCHASE OF PURCHASED SECURITIES

Section 2.1.      Sale and Purchase of Purchased Securities ..................................................   7
Section 2.2.      Closing ....................................................................................   7
Section 2.3.      Use of Proceeds ............................................................................   7
Section 2.4.      The Notes ..................................................................................   8

                                                  ARTICLE III

                                REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Section 3.1.      Incorporation and Restatement of Representations and Warranties ............................  10
Section 3.2.      Consents ...................................................................................  10
Section 3.3.      Registration Rights ........................................................................  10
Section 3.4.      Capitalization .............................................................................  10
Section 3.5.      Subsidiaries ...............................................................................  11
Section 3.6.      Subchapter S Status ........................................................................  11
Section 3.7.      Transactions with Affiliates ...............................................................  11
Section 3.8.      Disclosure .................................................................................  11

                                                  ARTICLE IV

                                           PURCHASERS' REPRESENTATIONS

Section 4.1.      Investment Intent ..........................................................................  12
Section 4.2.      Authorization, etc. ........................................................................  12
Section 4.3.      Enforceability .............................................................................  12
Section 4.4.      Certain Other Matters ......................................................................  12
Section 4.5.      S Corporation Status .......................................................................  12

                                                  ARTICLE V

                       CONDITIONS TO EACH PURCHASER'S OBLIGATIONS TO PURCHASE AT THE CLOSING

Section 5.1.      Related Agreements .........................................................................  13
Section 5.2.      Charter Documents; Good Standing Certificates ..............................................  13
Section 5.3.      Proof of Corporate Action ..................................................................  13
Section 5.4.      Incumbency Certificate .....................................................................  14
Section 5.5.      Legal Opinion ..............................................................................  14


                                       i



                               TABLE OF CONTENTS
                                  (continued)



                                                                                                               Page
                                                                                                            
Section 5.6.      Representations and Warranties; Officer's Certificate ......................................  14
Section 5.7.      Legality; Governmental and Other Authorizations ............................................  14
Section 5.8.      Payment of Certain Fees and Disbursements ..................................................  14
Section 5.9.      Intercreditor Agreements ...................................................................  14
Section 5.10.     Other Indebtedness .........................................................................  15
Section 5.11.     Solvency Assurances ........................................................................  15
Section 5.12.     Legal Opinions .............................................................................  15
Section 5.13.     General ....................................................................................  15

                                              ARTICLE VI

                               CONDITIONS TO THE COMPANY'S OBLIGATIONS

Section 6.1.      Representations ............................................................................  15
Section 6.2.      Related Agreements .........................................................................  15

                                              ARTICLE VII

                               AFFIRMATIVE AND NEGATIVE COVENANTS

Section 7.1.      Corporate Existence; Subsidiaries; Maintenance of Properties ...............................  16
Section 7.2.      Insurance ..................................................................................  16
Section 7.3.      Taxes ......................................................................................  16
Section 7.4.      Compliance with Laws, Contracts, Licenses and Permits ......................................  17
Section 7.5.      Distributions ..............................................................................  17
Section 7.6.      Transactions with Affiliates ...............................................................  17
Section 7.7.      Undertakings of Lenard Liberman and Jose Liberman ..........................................  18

                                              ARTICLE VIII

                               COVENANTS APPLICABLE TO DELIVERY OF INFORMATION

Section 8.1.      Annual Statements ..........................................................................  18
Section 8.2.      Monthly and Quarterly Statements ...........................................................  18
Section 8.3.      Officer's Certificate ......................................................................  19
Section 8.4.      Operating Budgets ..........................................................................  19
Section 8.5.      Other Information; Confidentiality .........................................................  19
Section 8.6.      Meetings with Management of the Company ....................................................  19
Section 8.7.      Notice of Event of Default .................................................................  19
Section 8.8.      Board of Directors .........................................................................  20

                                              ARTICLE IX

                                               DEFAULTS


                                       ii



                               TABLE OF CONTENTS
                                  (continued)


                                                                                                             Page
                                                                                                         
                                           ARTICLE X

                                    REMEDIES ON DEFAULT, ETC.

                                           ARTICLE XI

                       SUBSEQUENT HOLDERS OF PURCHASED SECURITIES OR REGISTRABLE
                                           SECURITIES

                                           ARTICLE XII

                                      EXPENSES; INDEMNITY

Section 12.1.     Expenses ...................................................................................  25
Section 12.2.     Indemnification ............................................................................  25
Section 12.3.     Brokers' Fees ..............................................................................  26
Section 12.4.     Survival of Obligations ....................................................................  26

                                           ARTICLE XIII

                                             NOTICES

                                           ARTICLE XIV

                          SURVIVAL AND TERMINATION OF COVENANTS, AGREEMENTS,
                                   REPRESENTATIONS AND WARRANTIES


                                           ARTICLE XV

                                      AMENDMENTS AND WAIVERS

                                           ARTICLE XVI

                       CHOICE OF LAW; SUBMISSION TO JURISDICTION AND WAIVER OF JURY
                                     TRIAL; DISPUTE RESOLUTION

Section 16.1.     Governing Law ............................................................................... 28
Section 16.2.     Consent To the Exclusive Jurisdiction Of the Courts Of The Commonwealth of Massachusetts .... 28
Section 16.3.     Waiver Of Jury Trial ........................................................................ 28
Section 16.4.     Equitable Remedies .......................................................................... 29
Section 16.5.     Intercreditor Agreements                                                                      29


                                      iii




                               TABLE OF CONTENTS
                                  (continued)



                                                                                Page
                                                                             
                                    ARTICLE XVII

                                 RIGHT TO PUBLICIZE

                                    ARTICLE XVIII

                  ENTIRE AGREEMENT; COUNTERPARTS; SECTION HEADINGS


                                       iv



                               TABLE OF CONTENTS

LIST OF EXHIBITS

EXHIBIT A         Form of Junior Subordinated Note
EXHIBIT B         Form of Warrant Agreement
EXHIBIT C         Form of Voting and Co-Sale Agreement
EXHIBIT D         Form of Company Counsel Opinion



                          SECURITIES PURCHASE AGREEMENT

     THIS SECURITIES PURCHASE AGREEMENT (the "Agreement") dated as of March 20,
2001 among LBI Holdings I, Inc., a California corporation (the "Company"), and
the several purchasers named in the attached Schedule 2.1 (individually a
"Purchaser" and collectively the "Purchasers").

     WHEREAS, the Company wishes to issue and sell to the Purchasers (i) the
Company's Junior Subordinated Notes in an original aggregate principal amount of
$30,000,000 (in the form attached hereto as Exhibit A, the "Notes"), and (ii)
Warrants to purchase 14.02 shares of the Company's Common Stock (in the form
attached to the Warrant Agreement, the "Warrants") (the Notes and the Warrants
are collectively referred to herein as the "Purchased Securities"); and

     WHEREAS, the Purchasers, severally, wish to purchase such securities on the
terms and subject to the conditions set forth in this Agreement;

     NOW THEREFORE, in consideration of the premises and the mutual covenants
contained in this Agreement, the parties agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

     For all purposes of this Agreement the following terms shall have the
meanings set forth in this Article I:

     "Affidavit of Loss" has the meaning specified in Section 2.4(g) of this
Agreement.

     "Affiliate" as applied to the Company or any other specified Person, any
Person directly or indirectly controlling, controlled by or under direct or
indirect common control with the Company (or other specified Person) and shall
also include (a) any Person who is a director or beneficial owner of at least 5%
of the Company's then outstanding Capital Securities (or other specified Person)
and Family Members of any such Person, (b) any Person of which the Company (or
other specified Person) or an Affiliate (as defined in clause (a) above) of the
Company (or other specified Person) shall, directly or indirectly, either
beneficially own at least 5% of the Company's then outstanding Capital
Securities or constitute at least a 5% equity participant, and (c) in the case
of a specified Person who is an individual, any Family Member of such Person. As
used in this definition, control means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting securities, by contract or
otherwise.

     "Articles of Incorporation" means the Articles of Incorporation of the
Company, as filed with the California Secretary of State.

     "Business Day" means any day other than a Saturday, Sunday or a legal
holiday in Boston, Massachusetts, Los Angeles, California or New York, New York,
or any other day on which commercial banks in such States are authorized by law
or government decree to close.



     "Buy-Sell Agreement" means that certain Stock Purchase Agreement dated as
of January 6, 1998 by and among Jose Liberman, Esther Liberman, Lenard Liberman
and the Company, as may be amended from time to time.

     "Capital Securities" means, as to any Person that is a corporation, the
authorized shares of such Person's capital stock, including all classes of
common, preferred, voting and nonvoting capital stock, and, as to any Person
that is not a corporation or an individual, the ownership interests in such
Person, including, without limitation, the right to share in profits and losses,
the right to receive distributions of cash and property, and the right to
receive allocations of items of income, gain, loss, deduction and credit and
similar items from such Person, whether or not such interests include voting or
similar rights entitling the holder thereof to exercise control over such
Person.

     "Charter" means the articles or certificate of incorporation, statute,
constitution, joint venture or partnership agreement or articles or other
organizational document of any Person other than an individual, each as from
time to time amended or modified.

     "Closing" has the meaning given such term in Section 2.2 of this Agreement.

     "Closing Date" has the meaning specified in Section 2.2 of this Agreement.

     "Code" means the Internal Revenue Code of 1986, as amended.

     "Common Stock" means the Common Stock of the Company as set forth in the
Articles of Incorporation.

     "Company" has the meaning specified in the introduction to this Agreement.

     "Company's knowledge" means, the actual knowledge of Jose or Lenard
Liberman, after reasonable good faith inquiry made to ascertain the accuracy of
the representation or warranty.

     "Competitor" means, as of any date, a Person (other than a Purchaser or any
of its Affiliates or beneficial owners) that operates an Hispanic language
format radio or television broadcast station in a market in which the Company or
a Subsidiary has an Hispanic language format radio or television broadcast
station as of such date or any officer, director, employee or Affiliate of such
Person (other than a Purchaser or any of its Affiliates or beneficial owners).
For purposes of Section 8.6 and Section 8.8 hereof only, however, the term
Competitor shall also include a Purchaser or any of its Affiliates or beneficial
owners.

     "Consolidated" or "consolidated" means, with reference to any term defined
herein, that term as applied to the Company's accounts and all of its
Subsidiaries' accounts, that may in accordance with GAAP, be consolidated with
the Company.

     "Convertible Securities" shall mean securities or obligations that are
exercisable for, convertible into or exchangeable for shares of Common Stock.
The term includes options, warrants or other rights to subscribe for or purchase
Common Stock or to subscribe for or purchase other securities that are
convertible into or exchangeable for Common Stock.

                                       2



     "Damages" has the meaning specified in Section 12.2 of this Agreement.

     "Disabled" means, with respect to any individual, if such individual is
unable to perform the duties assigned to him as an employee of the Company or
one of its Subsidiaries due to physical or mental illness, and such inability
exists for one-hundred and eighty (180) days (including a period of ninety (90)
consecutive days) in any twelve (12) consecutive month period.

     "Distribution" means (a) the declaration or payment of any dividend of cash
or property in respect of any shares of any class of the Company's or any of its
Subsidiaries' Capital Securities or other equity securities; (b) the purchase,
redemption or other retirement of any shares of any class of the Company's or
any of its Subsidiaries' Capital Securities or other equity securities, directly
or indirectly or otherwise; or (c) any other distribution on or in respect of
any shares of any class of the Company's or any of its Subsidiaries' Capital
Securities or other equity securities.

     "Dollars" and the sign "$" mean lawful money of the United States of
America.

     "Event of Default" has the meaning specified in Article IX of this
Agreement.

     "Existing Grants" means those certain rights in the agreements set forth in
Paragraphs 2, 3 and 4 of Schedule 3.4(b) hereto.

     "Family Member" means, as applied to any individual, such individual's
spouse, child (including a stepchild or an adopted child) grandchild, parent,
brother or sister thereof or any spouse of any of the foregoing, and each trust
created for the exclusive benefit of one or more of them.

     "Fully-Diluted Outstanding Equity" has the meaning set forth in the Warrant
Agreement.

     "Generally accepted accounting principles" or "GAAP" means generally
accepted accounting principles in the United States in effect from time to time.

     "Indebtedness" means all obligations, contingent and otherwise, which in
accordance with GAAP should be classified on the obligor's balance sheet as
liabilities, or to which reference should be made by footnotes thereto,
including without limitation, in any event and whether or not so classified: (i)
all debt and similar monetary obligations, whether direct or indirect; (ii) all
liabilities secured by any mortgage, pledge, security interest, lien, charge or
other encumbrance existing on property owned or acquired subject thereto,
whether or not the liability secured thereby shall have been assumed; (iii) all
guaranties, endorsements and other contingent obligations whether direct or
indirect in respect of Indebtedness or performance of others, including any
obligation to supply funds to or in any manner to invest in, directly or
indirectly, the debtor, to purchase Indebtedness, or to assure the owner of
Indebtedness against loss, through an agreement to purchase goods, supplies or
services for the purpose of enabling the debtor to make payment of the
Indebtedness held by such owner or otherwise, and (iv) obligations to reimburse
issuers of any letters of credit.

                                       3



     "Intercreditor Agreements" means the Senior Lenders Intercreditor Agreement
and the Senior Subordinated Lenders Intercreditor Agreement.

     "Licenses" means those licenses, permits, consents, concessions and other
authorizations of governmental, regulatory or administrative agencies or
authorities, whether foreign, federal, state, or local, required of the Company
to own and lease its properties and assets and to conduct its business as now
and proposed to be conducted.

     "Lien" means (a) any encumbrance, mortgage, pledge, lien, charge or other
security interest of any kind upon any property or assets of any character, or
upon the income or profits therefrom; (b) any acquisition of or agreement to
have an option to acquire any property or assets upon conditional sale or other
title retention agreement, device or arrangement (including a capitalized
lease); or (c) any sale, assignment, pledge or other transfer for security of
any accounts, general intangibles or chattel paper, with or without recourse.

     "Loan Documents" means the Senior Loan Agreement, Senior Lenders
Intercreditor Agreement, Senior Subordinated Loan Agreement and Senior
Subordinated Lenders Intercreditor Agreement.

     "Majority Purchasers" means the Noteholders holding Notes in an aggregate
outstanding principal amount equal to more than 50% of the aggregate outstanding
principal amount of all of the Notes or if the Notes are no longer outstanding
but the Warrants remain outstanding, the holders of more than 50% of the
Warrants, subject to the proxy granted to Alta Communications VIII, L.P. or its
successor pursuant to Section 3.5 of the Voting and Co-Sale Agreement.

     "Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations or financial condition of the Company and its
Subsidiaries, taken as a whole, (b) the ability of the Company and its
Subsidiaries, taken as a whole, to perform their material obligations under this
Agreement and the Related Agreements or (c) the validity or enforceability of
the Company's obligations taken as a whole under this Agreement and the Related
Agreements.

     "Material Event of Default" has the meaning specified in Article IX of this
Agreement.

     "Maturity Date" means the earlier to occur of (i) September 20, 2009, (ii)
the acceleration of the obligations of the Company to the Purchasers under the
Notes in accordance with Article IX following the occurrence and continuance of
a Material Event of Default, (iii) a Sale of the Company, (iv) March 20, 2006,
in the event that (and only in the event that) on or prior to such date the
Senior Lenders and Senior Subordinated Lenders have granted the necessary
consents and waivers under the Loan Documents so as to permit the repayment of
the Notes and the repurchase of the Warrants pursuant to Section 5.1 of the
Warrant Agreement and the Warrants are so repurchased, or (v) the date on which
the Company repurchases the Warrants pursuant to Section 5.2 of the Warrant
Agreement.

     "Noteholders" means the holders of the Notes.

     "Notes" has the meaning specified in the Recitals to this Agreement.

                                       4



     "Other Distributions" has the meaning set forth in Section 7.5.

     "Permitted Holder" is defined as Article XI of this Agreement.

     "Permitted Lines of Business" means the television and radio broadcast
business, television and radio program production, rental of television, radio
and related facilities and properties, outdoor advertising, the leasing of
property, and general business services related to any of the foregoing and any
business incident thereto.

     "Person" means an individual, partnership, corporation, association, trust,
joint venture, unincorporated organization, and any government, governmental
department or agency or political subdivision thereof.

     "Phantom Stock" has the meaning set forth in Section 3.4(b).

     "Purchased Securities" has the meaning specified in the Recitals to this
Agreement.

     "Purchasers" means the purchasers set forth on Schedule 2.1.

     "Registrable Securities" means those shares of Common Stock issuable upon
exercise of the Warrants.

     "Related Agreements" means the Notes, the Warrant Agreement, the Warrants,
the Voting and Co-Sale Agreement and the Articles of Incorporation.

     "Sale of the Company" has the meaning set forth in the Warrant Agreement.

     "Securities Act" means the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the Securities and
Exchange Commission thereunder, all as the same shall be in effect at the time.

     "Senior Lenders" means the lenders from to time party to the Senior Loan
Agreement.

     "Senior Lenders Intercreditor Agreement" means that certain Subordination
and Intercreditor Agreement of even date herewith by and among the Company,
Purchasers and Fleet National Bank as Administrative Agent for the Senior
Lenders, as such agreement may be amended from time to time.

     "Senior Loan Agreement" means the Credit Agreement, dated as of March 20,
2001, among LBI Holdings II, Inc., as the borrower, the guarantors party thereto
and Fleet National Bank, as administrative agent, Union Bank of California, N.A.
as syndication agent, and CIT Lending Services Corporation and General Electric
Capital Corporation as co-documentation agents, and the other lenders party
thereto from time to time, and any other replacement or successor agreement
governing Indebtedness incurred to refund or refinance the borrowings and
commitments then outstanding or permitted to be outstanding under the Credit
Agreement, in whole or in part, in each case together with any related notes,
guarantees, and collateral documents executed from time to time in connection
therewith, and in each case as amended, modified, supplemented, extended,
restated, renewed, refunded, restructured, replaced or

                                       5



refinanced (in whole or in part), including any of the foregoing which increases
the amount of Indebtedness thereunder, from time to time, whether by the same or
any other agent, lender or group of lenders.

     "Senior Subordinated Lenders" means the lenders from time to time party to
the Senior Subordinated Loan Agreement.

     "Senior Subordinated Lenders Intercreditor Agreement" means that certain
Senior Subordination and Intercreditor Agreement of even date herewith by and
among the Company, the Purchasers, Oaktree Capital Management, LLC, individually
and as agent for the Senior Subordinated Lenders and, for purposes of Section 16
only, Fleet National Bank, as agent for the Senior Lenders, as such agreement
may be amended from time to time.

     "Senior Subordinated Loan Agreement" means the Notes Purchase Agreement,
dated as of March 20, 2001, among LBI Intermediate Holdings, Inc., as the
borrower, and the purchasers party thereto from time to time, and Oaktree
Capital Management, LLC, as agent for such purchasers, and any other agreement
governing Indebtedness incurred to refund or refinance the borrowings and
commitments then outstanding or permitted to be outstanding under the Notes
Purchase Agreement, in whole or in part, in each case together with any related
notes, guarantees, and collateral documents executed from time to time in
connection therewith, and in each case as amended, modified, supplemented,
extended, restated, renewed, refunded, restructured, replaced or refinanced (in
whole or in part), including any increase in the amount of Indebtedness
thereunder, from time to time, whether by the same or any other agent, purchaser
or group of purchasers.

     "Significant Subsidiary" has the meaning ascribed to such term in the Code
of Federal Regulations, Title 17, Part 210, as in effect on the date hereof.

     "Subsidiary" means any Person which the Company now or hereafter shall at
the time own and control, directly or indirectly through another Person, at
least a majority of the outstanding Capital Securities entitled to vote
generally; and the term "Subsidiaries" means all of such Persons collectively.

     "Taxes" or "Tax" means (A) all net income, gross income, gross receipts,
sales, use, ad valorem, transfer, franchise, profits, license, withholding,
payroll, employment, excise, severance, stamp, occupation, premium, property or
windfall profits taxes, or other taxes of any kind whatsoever, together with any
interest and any penalties, additions to tax or additional amounts imposed by
any taxing authority (domestic or foreign) upon the Company with respect to all
periods or portions thereof ending on or before the date hereof and/or (B) any
liability of the Company for the payment of any amounts of the type described in
the immediately preceding clause (A) as a result of being a member of an
affiliated or combined group.

     "Third Party Claims" has the meaning specified in Section 12.2 of this
Agreement.

     "Transaction Costs" means any and all costs, fees and expenses of any
broker, finder or placement agent incurred by the Company in connection with the
transactions contemplated herein.

                                       6



     "Voting and Co-Sale Agreement" means the Voting and Co-Sale Agreement dated
as of the date hereof among the Company, the Purchasers and each of the parties
named therein as "Holders", in the form of Exhibit C hereto, as such agreement
may be amended from time to time.

     "Warrant Agreement" means the Warrant Agreement dated as of the date hereof
among the Company and the Purchasers, in the form of Exhibit B hereto, as such
agreement may be amended from time to time.

     "Warrant Purchase Price" has the meaning specified in the Warrant
Agreement.

     "Warrants" has the meaning specified in the Recitals to this Agreement.

                                   ARTICLE II
                    SALE AND PURCHASE OF PURCHASED SECURITIES

     Section 2.1. Sale and Purchase of Purchased Securities. Subject to all of
the terms and conditions hereof and in reliance on the representations and
warranties set forth herein, including, without limitation, the satisfaction by
the Company of the conditions set forth in Article V hereof, the Company shall
issue and sell to each Purchaser, and each Purchaser, severally, and not
jointly, agrees to purchase from the Company, (a) the Notes in the aggregate
principal amount of $30,000,000 for an aggregate purchase price of $29,500,000
and (b) Warrants in the form attached to the Warrant Agreement to purchase
shares of the Company's Common Stock for an aggregate purchase price of
$500,000, all as set forth opposite the name of such Purchaser on Schedule 2.1.
The Purchasers acknowledge that there are restrictions on transfer of the
Purchased Securities set forth herein, in the Notes, in the Warrant Agreement
and in each Warrant. The sale of the Purchased Securities to each Purchaser at
the Closing shall constitute a separate sale hereunder.

     Section 2.2. Closing. Subject to satisfaction by the Company of the
conditions set forth in Article V hereof, the closing of the purchase and sale
of the Purchased Securities (the "Closing") will take place at the offices of
O'Melveny & Myers LLP, 400 South Hope Street, Los Angeles, California, on the
date hereof (the "Closing Date"). At the Closing, the Company will issue, sell
and deliver to each Purchaser, and each Purchaser shall purchase or acquire from
the Company: (i) the Notes in an aggregate principal amount and for an aggregate
purchase price equal to the amounts as set forth opposite the name of such
Purchaser on Schedule 2.1 under the headings "Principal Amount of Notes
Purchased" and "Purchase Price of Notes Purchased", respectively, and (ii) the
Warrants in the amounts and for the purchase price set forth opposite the name
of such Purchaser on Schedule 2.1 under the headings "Number of Warrants
Purchased" and "Purchase Price of Warrants Purchased", respectively, by wire
transfer in immediately available funds on or before the Closing Date. The
Purchased Securities will be issued on or before the Closing Date, and
registered to each such Purchaser in the Company's records, in the amounts
designated on Schedule 2.1 hereto.

     Section 2.3. Use of Proceeds. Proceeds from the sale of the Purchased
Securities hereunder shall be used by the Company to fund the acquisition of
certain radio and television stations in Texas, to pay Transaction Costs, to
repay certain existing Indebtedness of Company

                                       7



and its Subsidiaries and for working and growth capital and general corporate
purposes of Company and its Subsidiaries as determined from time to time by the
Company.

     Section 2.4. The Notes.

     (a)  Interest; Payment.

          (i)  The outstanding principal amount of the Notes shall bear interest
     at the rate of 9% per annum compounded annually in arrears on each
     anniversary of the date hereof. Interest shall be calculated on the basis
     of the actual number of days elapsed over a year of 365 days. All accrued
     and unpaid interest on the outstanding principal amount of the Notes
     (including the amounts accrued pursuant to clause (ii) below) shall only be
     due and payable in full and in cash without setoff, deduction or
     counterclaim on the Maturity Date. The Company shall have the option,
     subject to and to the extent permitted by the Loan Documents, but shall not
     be required, to pay accrued and unpaid interest on the outstanding
     principal amount of the Notes in cash without setoff, deduction or
     counterclaim on an annual basis.

          (ii) During the occurrence and continuation of an Event of Default and
     from and after the date of written notice from Majority Purchasers
     declaring that default interest rate will be charged as a result of such
     Event of Default (a "Default Notice"), unless until the same shall be cured
     or waived in writing, the outstanding principal balance of the Notes shall
     accrue at the rate of 4% per annum in excess of the then-applicable
     interest rate, compounded annually in arrears (calculated on the basis of
     the actual number of days elapsed over a 365-day year); provided that such
     rate shall increase by an additional 2% from and after September 20, 2009
     (the "Adjustment Date") and on each six (6) month anniversary of the
     Adjustment Date, so long as the Company has not repaid the Notes in full,
     subject to a maximum rate of 21% per annum, in each case compounded
     annually.

     (b) Mandatory Redemption. On the Maturity Date, subject to and to the
extent permitted by the Loan Documents, the Company shall redeem the Notes in
the amount of the then outstanding principal plus all accrued and unpaid
interest thereon.

     (c) Prepayment. The Company may prepay the Notes in whole or in part at any
time prior to the Maturity Date without penalty or premium, provided such
prepayment shall not reduce the amount of shares issuable under the Warrants.

     (d) Subordination. The Company's obligations under the Purchased Securities
shall be subject to certain subordination terms as set forth in the
Intercreditor Agreements.

     (e) Pro Rata Treatment. Except to the extent otherwise provided herein: (i)
each payment of principal of the Notes shall be made to the Noteholders pro rata
in accordance with the respective unpaid principal amounts of the Noteholders'
respective Notes; (ii) each payment of interest on the Notes shall be made to
the Noteholders pro rata in accordance with the amounts of interest due and
payable to the Noteholders under the Noteholders' respective Notes; and (iii)
each distribution of cash, property, securities or other value received by the
Noteholders in respect of the indebtedness outstanding under the Notes, whether
pursuant to any attachment,

                                       8



garnishment, execution or other proceedings for the collection thereof or
pursuant to any bankruptcy, reorganization, liquidation or other similar
proceeding or otherwise in respect of the Company or the Subsidiaries, or the
indebtedness under the Notes, after payment of collection and other expenses as
provided herein, shall be apportioned to the Noteholders pro rata in accordance
with the respective unpaid principal amounts of and interest on the Noteholders'
respective Notes, provided that if any of the Noteholders (a "Recovering Party")
shall receive any such payment or distribution disproportionately (a "Recovery")
in respect thereof, such Recovering Party shall pay to the other Noteholders
their respective pro rata shares of such Recovery, unless the Recovering Party
is legally required to return any Recovery, in which case each party receiving a
portion of such Recovery shall return to the Recovering Party its pro rata share
of the sum required to be returned without interest unless that party is
required to pay interest. For purposes of this Agreement, calculations of the
amount of the pro rata share of any Noteholder shall be rounded to the nearest
whole dollar. The Company acknowledges and agrees that if any Recovering Party
shall be obligated to pay to the other Noteholders a portion of any Recovery
pursuant to the foregoing provisions of this subsection (e), the Company shall
be deemed to have satisfied the obligations in respect of indebtedness held by
such Recovering Party only to the extent of the Recovery retained by such
Recovering Party after giving effect to the pro rata payments by such Recovering
Party to the other Noteholders contemplated by the foregoing provisions of this
subsection (e). The obligations of the Company in respect of indebtedness held
by each other Noteholder shall be deemed to have been satisfied to the extent of
the amount of the Recovery required to be distributed to each such other
Investor by the Recovering Party as contemplated above, whether or not any such
Recovery is actually distributed.

     (f) Place of Payments. All payments of principal, interest, fees and other
amounts to be made by the Company under this Agreement and the Notes shall be
made in immediately available funds to the Noteholders, not later than 2:00 P.M.
(Eastern Time) on the date on which such payment shall become due, at the
address of each Noteholder provided Schedule 2.1 hereto. If any payment
hereunder or under the Notes shall be due and payable on a day which is not a
Business Day, the due date thereof shall be extended to the next Business Day,
and interest shall be payable at the applicable rate specified herein through
such extension period.

     (g) Replacement of Notes. Upon receipt of a Noteholders' affidavit or other
evidence reasonably satisfactory to the Company of the loss theft, destruction
or mutilation of any Note and, in the case of any such loss, theft or
destruction, upon delivery of an indemnity agreement reasonably satisfactory to
the Company (which in any event shall not require the posting of a bond or other
security therefor) (an "Affidavit of Loss"), and, in the case of any such
mutilation, upon the surrender of such Note for cancellation, the Company, at
its expense, shall execute and deliver, in lieu of such lost, stolen, destroyed,
or mutilated Note, a new Note of like tenor.

     (h) Original Issue Discount. Together, the Purchased Securities issued in
accordance with this Section constitute an "investment unit" for the purposes of
Section 1273(c)(2)(A) of the Code. In accordance with Sections 1273(c)(2)(A) and
1273(b)(2) of the Code, the issue price of the investment unit is the original
principal amount of the Notes. The parties agree that the issue price of the
Notes is $29,500,000 and the issue price of the Warrants is $500,000. None of
the parties will take any position in its tax returns or otherwise that is
inconsistent with the foregoing.

                                       9



     (i) Legend. Each new and replacement Note shall contain the legend set
forth in the form of Note attached as Exhibit A hereto.

                                  ARTICLE III
                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     In order to induce each of the Purchasers to enter into this Agreement and
to purchase the Purchased Securities, the Company hereby represents and warrants
as follows:

     Section 3.1. Incorporation and Restatement of Representations and
Warranties. The representations and warranties of the Company and its
Subsidiaries made in the Senior Subordinated Loan Agreement as of the date
hereof (which representations and warranties are subject to all of the
qualifications, limitations and restrictions contained in the Senior
Subordinated Loan Agreement) and the representations and warranties of the
Company and its Subsidiaries made in Section 4.15 of the Senior Loan Agreement
(which representations and warranties are subject to all of the qualifications,
limitations and restrictions contained in the Senior Loan Agreement) are hereby
incorporated herein by reference and each such representation and warranty is
restated and re-made by the Company to the Purchasers as of the date hereof and
will be deemed to be representations and warranties made by the Company to the
Purchasers under this Agreement and relied upon by the Purchasers in entering
into this Agreement and agreeing to purchase the Purchased Securities.

     Section 3.2. Consents. Based in part on the representations by Purchasers
in Section 4.1, the execution, delivery and performance by the Company of this
Agreement and of each Related Agreement, and the issuance and sale of the
Purchased Securities hereunder, and the issuance of any Common Stock upon
exercise of the Warrants, do not and will not require the approval or consent
of, or any filing with, any governmental authority or agency or any other Person
other than (a) those set forth in Schedule 3.2, (b) those the failure of which
to obtain would not have a Material Adverse Effect, and (c) any required state
securities law filings relating to the issuance and sale of the Purchased
Securities which have been filed or are permitted to be filed after the date of
such issuance and sale (the "Blue Sky Filings").

     Section 3.3. Registration Rights. Except for the rights granted to the
Purchasers pursuant to the Warrant Agreement of even date herewith, no Person
has demand or other registration rights to cause the Company to file any
registration statement under the Securities Act relating to the securities of
the Company or any right to participate in any such registration statement.

     Section 3.4. Capitalization.

     (a) The Company's Capitalization. The Company's authorized Capital
Securities consists solely of 1,000 shares of Common Stock, par value $.01 per
share (collectively, the "Shares"). Of such authorized Shares, and after giving
effect to the transactions contemplated by this Agreement, 200 of such Shares
are issued and outstanding. All of the issued Shares are owned by the Persons
listed on Schedule 3.4(a) and have been duly authorized, validly issued and
outstanding and are fully paid and non-assessable.

                                       10



     (b) Convertible Securities; Preemptive Rights. Except for the Warrants and
as set forth on Schedule 3.4(b), there are no outstanding rights (either
preemptive or other), or options to subscribe for or purchase from the Company,
or any warrants or other agreements providing for or requiring the issuance or
purchase by the Company of, or any Liens on, any Capital Securities of the
Company or any securities convertible into or exchangeable, for, or exercisable
into, its Capital Securities, or stock appreciation rights, phantom stock rights
or other equity-like instruments (collectively, "Phantom Stock"). No holder of
any security of the Company is entitled to any preemptive or similar rights to
purchase securities from the Company except as otherwise contemplated by this
Agreement or the Related Agreements, except as set forth on Schedule 3.4(b).

     (c) Voting Trust. There are no voting trusts, proxies or agreements
relating to the voting of the Company's Capital Securities, except as set forth
in this Agreement and the Related Agreements and the Buy-Sell Agreement.

     (d) Restrictions on Transfer. There are no restrictions on transfer of the
Warrants or the Shares issuable upon the exercise thereof other than those set
forth in this Agreement and the Related Agreements and those imposed by
applicable securities laws.

     Section 3.5. Subsidiaries. Except as set forth on Schedule 3.5 hereto, the
Company does not have any Subsidiaries and does not own or hold of record and/or
beneficially own or hold, directly or through a Subsidiary, any shares of any
class of the Capital Securities of any corporation or any legal or beneficial
ownership interest in any general or limited partnership, limited liability
company, business trust or joint venture or in any other unincorporated trade or
business enterprise. Except as set forth on Schedule 3.5 hereto, all outstanding
Capital Securities or interests of each such Subsidiary and such other business
enterprises is owned by the Company or another wholly-owned Subsidiary of the
Company as set forth on such Schedule 3.5, free and clear of any Lien (other
than Liens created pursuant to the Senior Loan Agreement and the collateral
documents related thereto), is validly issued and outstanding, and is fully paid
and non-assessable, and there are no commitments for the purchase or sale of,
and no options, warrants or other rights to subscribe for or purchase, any
securities of any such Subsidiary.

     Section 3.6. Subchapter S Status. The Company made a timely and valid
election to be treated as an S corporation (as defined in Section 1361(a) of the
Code) from the date of its formation, and such status has continued without
interruption to the date hereof.

     Section 3.7. Transactions with Affiliates. Except as set forth on Schedule
3.7, no Affiliate of the Company or any Subsidiary other than a wholly-owned
Subsidiary of the Company, is party to an agreement or transaction with the
Company or Subsidiary.

     Section 3.8. Disclosure. No representation, warranty or statement made in
this Agreement, any Related Agreement, or any agreement, certificate, statement
or document furnished by or on behalf of the Company or any of its Subsidiaries
in connection with the purchase of the Purchased Securities, when taken as a
whole, contains or will contain any untrue statement of a material fact or omits
to state a material fact necessary in order to make the statements contained
herein or therein, in light of the circumstances in which they were made, not
misleading in any material respect at the time made.

                                       11



                                   ARTICLE IV
                           PURCHASERS' REPRESENTATIONS

     Section 4.1. Investment Intent. Each of the Purchasers hereby, severally
and not jointly, represents and warrants to the Company that it, he or she is
(i) an "accredited investor" as defined in Regulation D of the Securities Act
and has such knowledge and experience in financial and business matters that it
or he is capable of evaluating the merits and risks of the prospective
investment in the Company, (ii) acquiring the Purchased Securities to be
purchased by it, him or her pursuant to Section 2 hereof for investment and not
with a view to the distribution thereof, (iii) a lender actively and regularly
engaged in the business of making loans and (iv) has no present intent to
separate ownership of the Notes from ownership of the Warrants. Each of the
Purchasers hereby, severally and not jointly, represents and warrants to the
Company that no commissions, broker fees, finders fees or similar fees are being
paid by the Purchasers in connection with the sale of the Notes or the Warrants.

     Section 4.2. Authorization, etc. Each of the non-individual Purchasers
hereby represents, severally and not jointly, that this Agreement, the
Intercreditor Agreements and the Related Agreements to which it is a party have
been executed by a duly authorized Person on its behalf; and the execution,
delivery and performance hereof and thereof have been duly authorized by all
appropriate action. Each Purchaser hereby represents, severally and not jointly,
that it has the power and authority, and the legal right, to make, deliver and
perform this Agreement, the Intercreditor Agreements and the Related Agreements
to which it is a party, and consummate the transactions contemplated hereby and
thereby. Each Purchaser that is a natural person represents, severally and not
jointly, that each of this Agreement, the Intercreditor Agreements and the
Related Agreements to which he or she is a party has been duly executed and
delivered by such Purchaser.

     Section 4.3. Enforceability. Each of the Purchasers hereby, severally and
not jointly, represents that the execution and delivery by such Purchaser of
this Agreement, the Intercreditor Agreements and each of the Related Agreements
to which it is a party will result in legally binding obligations of such
Purchaser enforceable against it or him in accordance with the respective terms
and provisions hereof and thereof.

     Section 4.4. Certain Other Matters. Each Purchaser hereby, severally and
not jointly, represents that (a) it acknowledges that the Purchased Securities
and the Registrable Securities have not been registered under the Securities Act
and understands that the Purchased Securities and the Registrable Securities
must be held indefinitely unless they are subsequently registered under the
Securities Act or such sale is permitted pursuant to an available exemption from
such registration requirement and (b) if the purchase of the Purchased
Securities and the Registrable Securities were to occur on the date hereof, its
acquisition of the Purchased Securities and the Registrable Securities
contemplated herein would constitute a legal investment as of the date hereof
under the laws and regulations and orders of each jurisdiction to which it may
be subject. Section 4.5. S Corporation Status. Each Purchaser hereby, severally
and not jointly, acknowledges that Company is classified as an "S Corporation"
under Section 1361(a) of the Code and agrees that such Purchaser shall not
(whether pursuant to this Agreement, the Related Agreements or otherwise) take
any action or make any election (or fail to take any action or

                                       12



make any election if requested by Company) which would result in a termination
of such classification including, without limitation, (i) transferring all or
any portion of the Purchased Securities or Registrable Securities to any Person
other than a Permitted Holder or (ii) exercising the Warrants while the Company
is an S corporation, provided that (A) the Purchasers may exercise the Warrants
at any time on or after the conditions permitting the Board Change Date (as
defined in the Voting and Co-Sale Agreement) have occurred, and (B) the
Purchasers may take any action or make any election or fail to take any action
or make any election if the Company receives an opinion of tax counsel
reasonably acceptable to the Company in form and substance reasonably acceptable
to the Company to the effect that such action or election (or failure to take
such action or make such election) will not result in a termination of the
Company's classification as an S corporation. Any transfer of or exercise of
Warrants or Registrable Securities in violation of this Section 4.5 will be void
and ineffective.

                                   ARTICLE V
                   CONDITIONS TO EACH PURCHASER'S OBLIGATIONS
                           TO PURCHASE AT THE CLOSING

     Each Purchaser's obligation to purchase the Purchased Securities at the
Closing pursuant to Section 2.2 of this Agreement is subject to compliance by
the Company with its agreements and representations herein contained, and to the
satisfaction, on or prior to the Closing Date, of the following conditions:

     Section 5.1. Related Agreements. Each of the Related Agreements (other than
the Company's Articles of Incorporation) shall have been executed and delivered
in a form provided for herein, and each of the Related Agreements shall be in
full force and effect and no term or condition thereof shall have been amended,
modified or waived except with the prior written consent of such Purchaser. All
covenants, agreements and conditions contained in the Related Agreements which
are to be performed or complied with by Company or any of its Affiliates which
is party thereto on or prior to the Closing Date shall have been performed or
complied with in all material respects.

     Section 5.2. Charter Documents; Good Standing Certificates. Such Purchaser
shall have received from the Company (a) a copy of the Company's Charter and the
Charter of each of LBI Intermediate Holdings, Inc. and LBI Holdings II, Inc.
(the "Top Tier Subsidiaries"), in each case certified by the California
Secretary of State to be true and complete as of a date no more than 30 days
prior to the Closing Date, (b) a copy, certified by the Secretary of the Company
and the Top Tier Subsidiaries to be true and complete as of the Closing Date, of
the by-laws thereof; and (c) a certificate, dated not more than 30 days prior to
the Closing Date, of the relevant governmental authority or other appropriate
official of each state in which each of the Company and its Top Tier
Subsidiaries is incorporated or qualified to do business, as to the Company's
and each Top Tier Subsidiary's corporate good standing in such state or
qualification to do business, as the case may be.

     Section 5.3. Proof of Corporate Action. Such Purchaser shall have received
from the Company, as necessary, copies certified by the Secretary thereof to be
true and complete as of the Closing Date, of the records of all corporate action
taken to authorize the execution, delivery

                                       13



and performance of this Agreement and each of the Related Agreements to which
the Company is a party.

     Section 5.4. Incumbency Certificate. Such Purchaser shall have received
from the Company an incumbency certificate, dated the Closing Date, signed by a
duly authorized officer thereof and giving the name and bearing a specimen
signature of each individual who shall be authorized to sign, in the name and on
behalf of the Company, this Agreement and each of the Related Agreements to
which the Company is or is to become a party, and to give notices and to take
other action on behalf of the Company under each of such documents.

     Section 5.5. Legal Opinion. The Purchasers shall have received from
O'Melveny & Myers LLP, counsel to the Company, an opinion reasonably
satisfactory to the Purchasers and counsel to the Purchasers substantially in
the form set forth as Exhibit D hereto.

     Section 5.6. Representations and Warranties; Officer's Certificate. The
representations and warranties contained or incorporated by reference herein
shall be true and correct in all material respects on and as of the Closing Date
with the same force and effect as though made on and as of the Closing Date
except for those representations and warranties which relate specifically to an
earlier date, provided that such representations and warranties were true and
correct in all material respects as of such earlier date; and the Company shall
have performed and complied in all material respects with all material
conditions and agreements required to be performed or complied with by it prior
to the Closing; and such Purchaser shall have received on the Closing Date a
certificate to these effects signed by an authorized officer of the Company.

     Section 5.7. Legality; Governmental and Other Authorizations. The purchase
of the Purchased Securities by such Purchaser shall not be prohibited by any law
or governmental order or regulation. All necessary consents, approvals,
licenses, permits, orders and authorizations of, or registrations, declarations
and filings with, any governmental or administrative agency or with any other
Person, with respect to any of the transactions contemplated by this Agreement
or any of the Related Agreements, shall have been duly obtained or made and
shall be in full force and effect other than the Blue Sky Filings and those
described on Schedule 5.7 and other than those required to be obtained by the
Purchasers.

     Section 5.8. Payment of Certain Fees and Disbursements. The Purchasers
shall have been reimbursed, subject to and in accordance with Article XII
hereof, for all out of pocket reasonable costs and expenses (including, but not
limited to, reasonable legal and accounting expenses) incurred by it through the
Closing Date in connection with the transactions contemplated by this Agreement
(provided that the Company shall be required to reimburse only the reasonable
legal fees and expenses of Edwards & Angell, LLP, Latham & Watkins, FCC counsel,
and Pillsbury Winthrop LLP, California counsel) and the Company shall have paid
the reasonable legal fees and expenses of Edwards & Angell, LLP, Latham &
Watkins, and Pillsbury Winthrop LLP through the Closing Date in connection with
the transactions contemplated by this Agreement.

     Section 5.9. Intercreditor Agreements. The Intercreditor Agreements shall
have been executed and delivered by the parties other than Purchasers, and the
Intercreditor Agreements shall be in full force and effect and no term or
condition thereof shall have been amended,

                                       14



modified or waived except with the prior written consent of the Purchasers. All
covenants, agreements and conditions contained in the Intercreditor Agreements
which are to be performed or complied with on or prior to the Closing Date by
other parties thereto shall have been performed or complied with in all material
respects.

     Section 5.10. Other Indebtedness. The Senior Loan Agreement and the Senior
Subordinated Loan Agreement shall have closed and the initial loans shall be
simultaneously funded thereunder.

     Section 5.11. Solvency Assurances. The Purchasers shall have received the
solvency certificates delivered pursuant to the Senior Loan Agreement.

     Section 5.12. Legal Opinions. Each of the legal opinions (including
opinions covering FCC issues) delivered in connection with the acquisition of a
television station closing on the date hereof, together with the FCC opinions of
O'Melveny & Myers LLP delivered pursuant to the Senior Loan Agreement and Senior
Subordinated Loan Agreement, shall be addressed to the Purchasers, or the
Purchasers shall receive letters indicating that they may rely on such opinions
as if they were addressed to them.

     Section 5.13. General. All instruments and legal, governmental,
administrative, corporate and partnership proceedings in connection with the
transactions contemplated by this Agreement and the Related Agreements shall be
reasonably satisfactory in form and substance to the Purchasers in all material
respects. The Purchasers shall have received copies of all material documents,
including, without limitation, records of corporate or other proceedings, the
opinion of counsel contemplated in Section 5.5 hereof, and any material
consents, licenses, approvals, permits and orders required to be secured by the
Company in connection with the transactions contemplated herein or which any
Purchaser may have requested in connection therewith.

                                   ARTICLE VI
                     CONDITIONS TO THE COMPANY'S OBLIGATIONS

     The Company's obligation to sell and issue the Purchased Securities
pursuant to this Agreement is subject to compliance by each of the Purchasers
with the agreements herein contained, and to the satisfaction on or prior to the
Closing Date, of the following conditions:

     Section 6.1.  Representations. The representations made by each Purchaser
in Article IV hereof shall be true and correct in all material respects when
made and shall be true and correct in all material respects as of the Closing
Date.

     Section 6.2.  Related Agreements. Each of the Related Agreements to which
such Purchaser is a party shall have been executed and delivered by such
Purchaser. All covenants, agreements and conditions contained in this Agreement
and the Related Agreements which are to be performed or complied with by such
Purchaser on or prior to the Closing Date shall have been performed or complied
with by such Purchaser in all material respects.

                                       15



                                  ARTICLE VII
                       AFFIRMATIVE AND NEGATIVE COVENANTS

     The Company covenants that, while any of the Purchased Securities remain
outstanding, the Company will comply, and will cause each of its Subsidiaries to
comply, with the following provisions:

     Section 7.1. Corporate Existence; Subsidiaries; Maintenance of Properties.
Except to the extent permitted under Sections 7.4, 7.16 and Article 8 of the
Senior Subordinated Loan Agreement, as such sections exist on the date hereof,
each of the Company and its Subsidiaries will preserve and keep in full force
and effect its corporate existence and its material rights and material
franchises except for any Subsidiary of the Company which is combined or merged
with and into the Company. Except to the extent permitted under Sections 7.4,
7.16 and Article 8 of the Senior Subordinated Loan Agreement, as such sections
exist on the date hereof, the Company shall at all times own, directly or
indirectly, one hundred percent (100%) of the equity interests in each
Subsidiary, except for any Subsidiary of the Company which is combined or merged
with and into the Company or another Subsidiary. The Company and its
Subsidiaries will not engage in any business other than the Permitted Lines of
Business. Each of the Company and its Subsidiaries will maintain all of its
properties used or useful in the conduct of its business in good condition,
repair and working order (normal wear and tear excepted) and cause to be made
all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company may be necessary to conduct the
business of the Company. Notwithstanding the foregoing, nothing in this Section
7.1 shall prevent the loss of the corporate existence of any Subsidiary or any
such right or franchise if the preservation is, in the judgment of the Board of
Directors of the Company, no longer desirable in the conduct of the business of
the Company and its Subsidiaries, taken as a whole, and would not have a
Material Adverse Effect.

     Section 7.2. Insurance. Each of the Company and its Subsidiaries will
maintain with financially sound and reputable insurance companies, funds or
underwriters, insurance of the kinds, covering the risks and in the relative
proportionate amounts usually carried by reasonable and prudent companies
conducting businesses similar to that of the Company and its Subsidiaries except
as otherwise determined by the Board. Notwithstanding the foregoing, compliance
with the requirements of Section 6.5 of the Senior Loan Agreement, as such
section exists as of the date hereof, shall constitute compliance with this
Section 7.2.

     Section 7.3. Taxes. Each of the Company and its Subsidiaries will pay and
discharge, or cause to be paid and discharged, before the same shall become
overdue, all Taxes, assessments and other governmental charges imposed upon the
Company and its Subsidiaries and their respective real properties, sales and
activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for labor, materials, or supplies, which if unpaid might by
law become a Lien or charge upon any of their properties, in each case
non-payment of which would have a Material Adverse Effect; provided, however,
that any such Tax, assessment, charge, levy or claim need not be paid if the
validity or amount thereof shall currently be contested in good faith by
appropriate proceedings and if the Company or any of its Subsidiaries shall have
set aside on its books adequate reserves with respect thereto.

                                       16



     Section 7.4. Compliance with Laws, Contracts, Licenses and Permits. Each of
the Company and its Subsidiaries will (a) comply in all material respects with
all applicable laws and regulations wherever its business is conducted, (b)
comply with the provisions of its Charter and by-laws, (c) comply in all
respects with this Agreement and the Related Agreements, (d) comply with all
applicable decrees, orders, and judgments and (e) comply in all material
respects with all Licenses, in each case other than clause (c) above, where
non-compliance with which or the failure to obtain which would have a Material
Adverse Effect. If at any time while any Purchased Security is outstanding, any
material authorization, consent, approval, permit or license from any officer,
agency or instrumentality of any government shall become necessary or required
in order that any of the Company or its Subsidiaries may fulfill any of its
obligations hereunder, each of the Company and its Subsidiaries will promptly
take or cause to be taken reasonable steps to obtain such material
authorization, consent, approval, permit or License and furnish the Purchasers
with evidence thereof.

     Section 7.5. Distributions. Neither the Company nor any Subsidiary shall
make any Distribution, other than (i) Distributions between the Company and its
wholly-owned Subsidiaries, or among such wholly-owned Subsidiaries or from any
Subsidiary to any Credit Party (as defined in the Senior Loan Agreement) as
permitted under the Senior Loan Agreement, as such Senior Loan Agreement exists
on the date hereof, (ii) those Distributions necessary to enable the
stockholders of the Company to pay those income taxes (including estimated and
final income taxes) arising from all income of the Company and its Subsidiaries
(including without limitation, income from operations and sales of assets,
whether or not extraordinary) while the Company is an S corporation, (iii)
Distributions in the nature of a stock dividend or stock split, and (iv)
Distributions other than those set forth in clause (i), (ii) and (iii) above
("Other Distributions") in an aggregate amount, when combined with all Other
Distributions from and after the date hereof, not exceeding $10,000,000, except
that the Company may repurchase, pay dividends and pay redemption amounts on the
Purchased Securities and Registrable Securities in accordance with and pursuant
to the terms of this Agreement or any of the Related Agreements.

     Section 7.6. Transactions with Affiliates. Neither the Company nor any of
its Subsidiaries will (i) hire any relative of any of the Company's shareholders
or senior management as an employee or consultant or (ii) engage in any
transaction or enter into any agreement with any Affiliate thereof, except (a)
those between the Company and any wholly-owned Subsidiary or by and among
wholly-owned Subsidiaries of the Company, (b) those set forth on Schedule 7.6,
(c) those permitted pursuant to Section 7.5 hereof, and (d) those on at least as
favorable terms as the terms which could be obtained by the Company or a
Subsidiary, as the case may be, in a comparable transaction made on an arm's
length basis with Persons who are not Affiliates of the Company or any of its
Subsidiaries. Notwithstanding the foregoing, the Company shall not, without the
prior written consent of the Majority Purchasers, (A) issue any Capital
Securities, Convertible Securities or Phantom Stock to an employee, consultant
or Affiliate of the Company or a Subsidiary, except issuances of Capital
Securities, Convertible Securities and Phantom Stock to employees, consultants
and Affiliates of the Company and its Subsidiaries in an aggregate amount
including amounts under the Existing Grants, not exceeding 2.5% of the
Fully-Diluted Outstanding Equity, (B) grant registration rights to any Affiliate
of the Company or a Subsidiary, or (C) effect a Sale of the Company to any
Affiliate of the Company or a Subsidiary other than as permitted by Section 3.2
of the Voting and Co-Sale Agreement.

                                       17



     Section 7.7. Undertakings of Lenard Liberman and Jose Liberman. Except as
permitted under Section 7.6, Lenard Liberman and Jose Liberman agree that they
will not engage in any Permitted Lines of Business other than through the
Company or a Subsidiary. Further, if requested by the Majority Purchasers after
the Closing, Lenard Liberman shall enter into a subordination agreement with the
Purchasers subordinating his loans to Liberman Broadcasting, Inc. on terms
reasonably acceptable to the Purchasers, Senior Lenders and Lenard Liberman, so
long as the provisions of such subordination agreement do not restrict any
payment to Lenard Liberman that would otherwise be permitted under the Senior
Subordinated Loan Agreement and the intercreditor agreement dated the date
hereof between the Senior Subordinated Lenders and Lenard Liberman. The parties
agree that in the event of a Sale of the Company, unless the amount
distributable to the holders of Warrants is determined as provided in the
definition of Fair Market Value in the Warrant Agreement, then the amount
distributable to the holders of Warrants and stockholders of the Company shall
be reduced to reflect an allowance of 2.5% of the distributable sale proceeds
for those Capital Securities, Convertible Securities and Phantom Stock permitted
by Section 7.6(A) of this Agreement.

                                  ARTICLE VIII
                 COVENANTS APPLICABLE TO DELIVERY OF INFORMATION

     The Company hereby agrees that so long as any Purchased Securities are
outstanding it will comply with, and it will cause its Subsidiaries to comply
with, the following provisions:

     Section 8.1. Annual Statements. Within 120 days after the close of each
fiscal year of the Company, commencing with the fiscal year ending on December
31, 2000, the Company will deliver to each Purchaser (a) audited consolidated
balance sheet and statement of income and retained earnings and of cash flows of
the Company and its Subsidiaries audited by Ernst & Young or any other so-called
"Big-5" accounting firm or any other accounting firm reasonably acceptable to
the Majority Purchasers, which annual financial statements shall show the
financial condition of the Company as of the close of such fiscal year and the
results of the Company's operations during such fiscal year, to be accompanied
by a true copy of said auditors' management letter, if one was provided to the
Company and (b) a comparison of such financial information to the budget for
such year, as well as a comparison of that year's performance to the performance
in the prior year, all on a consolidated basis. Each of the audited financial
statements delivered under Section 8.1(a) shall be certified without a "going
concern" or like qualification by such accounting firm.

     Section 8.2. Monthly and Quarterly Statements. Within 45 days after the end
of each calendar month, the Company will deliver to each of the Purchasers a
consolidated unaudited statement of cash flows of the Company and its
Subsidiaries as of the end of such month and a comparison of that month's cash
flow to the cash flow in the same month of the prior year. Within 60 days after
the end of each fiscal quarter the Company will deliver to each of the
Purchasers consolidated and consolidating unaudited balance sheets and
statements of income and retained earnings and of cash flows for the Company and
its Subsidiaries all as of the end of such fiscal quarter and a comparison of
such cash flow results to the performance in the same quarter of the prior year.

                                       18



     Section 8.3. Officer's Certificate. In addition to the delivery of
financial statements of the Company and its Subsidiaries pursuant to Sections
8.1 above, in connection with the Company's annual financial statements the
Company shall deliver to each Purchaser a certificate of the President,
Executive Vice President or Chief Financial Officer of the Company, (a) that,
except as may otherwise be indicated therein or provided for in this Agreement,
to the best of his or her knowledge, such statements have been prepared in
accordance with GAAP consistently applied and fairly present, in all material
respects, the consolidated financial condition of the Company and its
Subsidiaries as of the dates specified and the results of their respective
operations and changes in financial position with respect to the periods
specified and (b) to the effect that such officer has caused the provisions of
this Agreement and the Related Agreements to be reviewed and such officer has no
knowledge of the breach of Section 7.5 or 7.6 of this Agreement.

     Section 8.4. Operating Budgets. Each calendar year the Company shall
deliver to each of the Purchasers an operating budget for such calendar year
which shall have been approved by the Company's Board of Directors no later than
30 days before the first month of such calendar year.

     Section 8.5. Other Information; Confidentiality. From time to time, upon
the request of any Purchaser, the Company will furnish such information
regarding the business, affairs, prospects and financial condition of the
Company and its Subsidiaries as such Purchaser may reasonably request. Each
Purchaser may examine the books and records of the Company and its Subsidiaries
and, may, at reasonable times and on reasonable notice and under the supervision
of the Company, inspect its or their respective facilities and may request
information at reasonable times and intervals concerning the general status of
the Company's and the Subsidiaries' financial condition and operations. All
information provided by Company to Purchasers, or any of them, hereunder or
under any of the Related Agreements shall be treated as confidential by the
recipient thereof regardless of whether it is specifically designated as such
and shall not be disclosed to any third parties except in accordance with
Article XVII or be used for any purpose other than analyzing the Company's
performance for purposes of monitoring the Purchaser's investment therein.

     Section 8.6. Meetings with Management of the Company. A representative of
the Purchasers (other than a person acting as a director or in a comparable
position with, or a consultant to, a Competitor or a person having board
visitation rights with a Competitor) shall be entitled to consult with and
advise management of the Company on significant business issues, including
management's proposed annual operating plans. Management will meet with any such
representative as is mutually convenient on a regular basis during each year at
the Company's facilities at mutually agreeable times for such consultation and
advice and to review progress in achieving said plans. The Company has no
obligation to follow any advice rendered by any Purchaser or representative of
Purchasers.

     Section 8.7. Notice of Event of Default. Upon knowledge by the President or
Executive Vice President of the Company of the existence of a condition which
has resulted in an Event of Default, such condition shall be disclosed
immediately to the Purchasers. If a condition which may reasonably lead to an
Event of Default exists and the Company is required

                                       19



to give notice of such event under either the Senior Loan Agreement or the
Senior Subordinated Loan Agreement, then the Purchasers shall simultaneously
receive a copy of such notice.

     Section 8.8. Board of Directors. The Majority Purchasers may designate one
person (other than a person acting as a director or in a comparable position
with, or a consultant to, a Competitor or a person having board visitation
rights with a Competitor) as an observer to attend meetings of the Boards of
Directors of the Company and its Subsidiaries (each a "Board") and committees
thereof, and such person and each Purchaser shall receive all information
provided to such Board and committee members at the same time as it is provided
to such members, including all notices of meetings.

                                   ARTICLE IX
                                    DEFAULTS

     In each case of the happening and during the continuance of any of the
following events (each of which is herein sometimes called an "Event of Default"
and any of those set forth in subsections (b), (c), (d), (e) or (h) through (l),
subject to the proviso in subsection (e), being sometimes called a "Material
Event of Default"):

     (a) any material representation or warranty made by or on behalf of the
Company in this Agreement or any of the Related Agreements, shall prove to be
false or misleading in any material respect when made or reconfirmed;

     (b) the Company's default in the due observance or performance of, or
compliance with, any covenant contained in Section 7.5 or 7.6, which default or
defaults, individually or in the aggregate have a Material Adverse Effect or a
material adverse effect on the Purchasers, and such default has not been cured
or waived pursuant to a written agreement satisfactory to the Majority
Purchasers within 60 days after written notice thereof from the Majority
Purchasers;

     (c) default in the payment of the principal of any Note, when the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment or by acceleration in accordance with this Article IX or
otherwise and such default continues through the close of business on the
Business Day following the due date;

     (d) default in the payment of interest on any Note, and such default
continues for a period of 60 days;

     (e) default in the due observance or performance of, or compliance with,
any covenant contained in Article 8, and such default has not been cured or
waived pursuant to a written agreement satisfactory to the Majority Purchasers
within 90 days after written notice thereof from the Majority Purchasers;
provided that in the event the Company is in breach of any of the provisions of
Sections 8.1 through 8.7 of this Agreement, such default shall not be considered
a Material Event of Default so long as the Company is in compliance with the
covenants set forth in Sections 6.1, 6.2 and 6.6 of the Senior Loan Agreement,
as such provisions are in effect on the date hereof, and is providing all such
information and access to the Purchasers and their representatives at the same
time as and on the same terms as it is being provided to the lenders or their
agent.

                                       20



     (f) except as otherwise provided in subsection (b) or (e) of this Article
IX, default or defaults in the due observance or performance of, or compliance
with, any covenant, condition or agreement contained herein or in any of the
Related Agreements by any person other than the Purchasers, which default or
defaults, individually or in the aggregate, have a Material Adverse Effect or a
material adverse effect on the Purchasers, and such default has not been cured
or waived pursuant to a written agreement satisfactory to the Majority
Purchasers within 60 days after written notice thereof from the Majority
Purchasers;

     (g) for any reason any Related Agreement shall not be in full force and
effect in all material respects or shall not be enforceable in all material
respects in accordance with its terms, or any party thereto shall disaffirm its
obligations thereunder in writing, and such default has not been cured or waived
pursuant to a written agreement satisfactory to the Majority Purchasers within
30 days after written notice thereof from the Majority Purchasers;

     (h) the Company or any of its Significant Subsidiaries pursuant to or
within the meaning of Title 11 of the United States Code or any similar Federal
or state law for the relief of debtors or affecting creditors' rights
(collectively, "Bankruptcy Law"):

         (i)   commences a voluntary case or any other action or proceeding with
     respect to itself;

         (ii)  consents by answer or otherwise to the commencement against it of
     an involuntary case or any other action or proceeding;

         (iii) seeks or consents to the appointment of a receiver, trustee,
     assignee, liquidator, custodian or similar official under any Bankruptcy
     Law (collectively, a "Custodian") of it or for all or substantially all of
     its property;

         (iv)  makes a general assignment for the benefit of its creditors; or

         (v)   admits in writing its inability to pay its debts generally as the
     same become due;

     (or takes any comparable action under any foreign laws relating to
     insolvency);

     (i) A court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:

         (i)   is for relief against the Company or any of its Significant
     Subsidiaries in an involuntary case in bankruptcy or any other action or
     proceeding for any other relief;

         (ii)  appoints a Custodian of the Company or any of its Significant
     Subsidiaries or for all or substantially all of the property of the Company
     or any of its Significant Subsidiaries; or

         (iii) orders the winding up or liquidation of the Company or any of
     its Significant Subsidiaries;

                                       21



     (or any similar relief is granted under any foreign laws) and in each case
the order or decree remains unstayed and in effect for sixty (60) days, or any
dismissal, stay, rescission or termination ceases to remain in effect for sixty
(60) days;

     (j) the holders of Indebtedness under the Senior Loan Agreement or the
Senior Subordinated Loan Agreement accelerate payment of such Indebtedness in
accordance with the respective terms thereof prior to its final scheduled
maturity;

     (k) Lenard Liberman dies, becomes Disabled or ceases to be actively
involved on a full-time basis in the management and operations of the Company
and its Subsidiaries and the Company has not hired another individual of
comparable qualifications and abilities or a person otherwise having reasonable
qualifications and abilities in the broadcast radio and television industries
within 180 days of such occurrence, or Lenard Liberman (together with his
spouse, ancestors, lineal descendents, or heirs and devises and any trusts
controlled by them) is no longer a majority shareholder of the Company (defined
for the purposes of this subsection only as holding greater than 25% of the
Company's Fully-Diluted Outstanding Equity);

     (l) neither Lenard Liberman nor Jose Liberman are actively involved on a
full-time basis in the management and operations of the Company and its
Subsidiaries (whether due to death, Disability or otherwise) and the Company has
not hired as their replacement another individual(s) of comparable
qualifications and abilities or a person otherwise having reasonable
qualifications and abilities in the broadcast radio and television industries,
in each case reasonably acceptable to the Majority Purchasers and Requisite
Holders (as defined in the Senior Subordinated Loan Agreement), within 180 days
of such occurrence, or Jose Liberman and Lenard Liberman collectively (together
with their spouses, ancestors, lineal descendents, or heirs and devises and any
trusts controlled by them) are no longer majority shareholders of the Company
(defined for the purposes of this subsection only as collectively holding
greater than 50% of the Company's Fully-Diluted Outstanding Equity);

     Then and upon every such Event of Default and at any time thereafter during
the continuance of such Event of Default, upon written notice from the Majority
Purchasers declaring that the default rate will be charged, the Interest Rate
shall immediately increase to 13% pursuant to Section 2.4(a)(ii) until such time
as the Company has cured such Event of Default or such Event of Default shall
have been waived by the Majority Purchasers. Upon the occurrence of an Event of
Default under subsection (h) or (i), the Company shall have an immediate
obligation to (i) repay the Notes and any and all other amounts owing by the
Company to the Noteholders hereunder and (ii) purchase the Warrants at the
Warrant Purchase Price, subject to and to the extent permitted by the Loan
Documents. Upon the consummation of a Sale of the Company, the Company shall
have an immediate obligation to repay the Notes and any and all other amounts
owing by the Company to the Noteholders hereunder, subject to and to the extent
permitted by the Loan Documents. In addition, subject to and to the extent
permitted by the Loan Documents, upon the occurrence of a Material Event of
Default, the Majority Purchasers may give written notice of such Material Event
of Default to the Company, and the Company shall have 180 days from receipt of
such notice of Material Event of Default to (i) repay the Notes and any and all
other amounts owing by the Company to the Noteholders hereunder and (ii)
purchase the Warrants at the Warrant Purchase Price. If, at the end of such 180
day period (A) such Material Event of Default shall be continuing and shall not
have been

                                       22



waived by the Majority Purchasers, and (B) the Company has failed to so repay
the Notes and such other amounts and to so repurchase the Warrants, then,
subject to and to the extent permitted by the Loan Documents, the Majority
Purchasers may declare the Notes and any and all other amounts owing by the
Company hereunder to the Noteholders to be immediately due and payable and
require the Company to purchase the Warrants at the Warrant Purchase Price.

     If (1) such Material Event of Default shall be continuing and shall not
have been waived by the Majority Purchasers, (2) the Majority Purchasers declare
the Notes and all other amounts owing by the Company hereunder to the
Noteholders to be immediately due and payable and require the Company to
purchase the Warrants at the Warrant Purchase Price in accordance with the
immediately preceding sentence, (3) the parties hereto have obtained the consent
of the FCC and any material consent of a state public utilities commission or
comparable state authority, if reasonably deemed by the Company or its counsel
to be necessary, and (4) any applicable waiting periods under Hart-Scott-Rodino
Antitrust Improvement Act of 1976, as amended, shall have terminated, then,
subject to and to the extent permitted by the Loan Documents, the Purchasers
shall have the right to take control of the Board of Directors pursuant to
Section 2.1 of the Voting and Co-Sale Agreement until such obligation to repay
the Notes and such other amounts and to so repurchase the Warrants is honored.

     The Purchasers agree that so long as the Company is an S corporation,
except in the case of a Sale of the Company or at any time on or after the
conditions permitting the Board Change Date have occurred, they shall not
require the Company to pay the principal and interest outstanding under the
Notes without simultaneously requiring the purchase of all of the Warrants for
the Warrant Purchase Price, and vice versa.

     It is understood by the parties hereto that where the phrase "subject to
and to the extent permitted by the Loan Documents" or a similar phrase is used
in this Agreement or in any of the Related Agreements, and where such phrase
qualifies the obligation of the Company to pay any amounts owing to the
Purchasers hereunder or thereunder and/or to purchase or redeem any securities,
such phrase shall be deemed to mean the following: "subject to and to the extent
permitted by the Loan Documents (and to the extent, but only to the extent, that
the Company's Subsidiaries at such time are permitted under the Loan Documents
to pay dividends or other distributions that would enable the Company to make
such payments or to so purchase or redeem such securities, as the case may be)".

                                   ARTICLE X
                            REMEDIES ON DEFAULT, ETC.

     In case any one or more Material Events of Default shall occur and be
continuing, the Purchasers may, subject to the terms of the Intercreditor
Agreements and subject to obtaining any FCC consents or approvals or other
material consents or approvals required in connection therewith, proceed to
protect and enforce the rights of the Purchasers by an action at law, suit in
equity or other appropriate proceeding, whether for the specific performance of
any agreement contained in this Agreement or the Notes, or for an injunction
against a violation of any of the terms hereof or thereof or in and of the
exercise of any power granted hereby or thereby or by law. No right conferred
upon the Noteholders hereby or by the Notes shall be exclusive of any

                                       23



other right referred to herein or therein or now or hereafter available at law,
in equity, by statute or otherwise.

                                   ARTICLE XI
                   SUBSEQUENT HOLDERS OF PURCHASED SECURITIES
                            OR REGISTRABLE SECURITIES

     The provisions of this Agreement that are for the benefit of each Purchaser
as the holder of any Purchased Securities or Registrable Securities are also for
the benefit of, and enforceable by, all subsequent Permitted Holders of such
Purchased Securities or Registrable Securities, and the provisions of this
Agreement that subject the Purchasers to obligations as the holder of any
Purchased Securities or Registrable Securities also shall subject all subsequent
holders of Purchased Securities and Registrable Securities thereto. Any
transfer, sale, pledge or hypothecation (collectively, "transfer") of any
Purchased Securities or Registrable Securities other than to a Permitted Holder
shall be void and ineffective. As used herein "Permitted Holder" means, any
subsequent transferee (including the initial Purchasers on the date hereof) of
Purchased Securities or Registrable Securities that became such a transferee
pursuant to a transfer that met each of the following conditions: (i) in
connection with such transfer, such transferee shall have executed a counterpart
to the Intercreditor Agreements and an agreement in form and substance
satisfactory to the Company to the effect that such transferee makes each of the
representations set forth herein (subject to the proviso at the end of this
sentence) and in the Related Agreements made by each initial Purchaser on the
date hereof and that such transferee agrees to be bound by the terms of this
Agreement and each of the Related Agreements as if it were the initial Purchaser
on the date hereof, (ii) in connection with any such transfer of all or any
portion of the Warrants, the transferor can and does transfer to the same
transferee a pro rata portion of the original portion of the Notes (and in
connection with any such transfer of all or any portion of the Notes, the
transferor can and does transfer to the same transferee a pro rata portion of
the Warrants), (iii) in connection with any such transfer of any Purchased
Securities or Registrable Securities, the Company shall have received an opinion
of tax counsel reasonably acceptable to the Company in form and substance
reasonably acceptable to the Company to the effect that such transfer will not
terminate the Company's classification as an S corporation, and (iv) such
transferee shall not be a Competitor; provided that a transferee shall not be
required to make the representation contained in Section 4.1(iii) herein if,
notwithstanding the failure to make such representation, the condition in clause
(iii) of this Article IX above shall have been otherwise satisfied. Each holder
of Purchased Securities or Registrable Securities shall give the Company notice
of any transfer by it of any Purchased Securities or Registrable Securities and
comply with each of the requirements set forth in this Article XI prior to such
transfer. Notwithstanding the foregoing, the provisions of Section 4.5 and this
Article XI shall not restrict the transfer of Purchased Securities or
Registrable Securities made pursuant to (a) Section 2.1(b), 3.1 or 3.3 of the
Voting and Co-Sale Agreement, subject to the provisions of Section 3.5 and 4.1
of the Voting and Co-Sale Agreement, or (b) pursuant to Section 5 or 6 of the
Warrant Agreement.

                                       24



                                  ARTICLE XII
                               EXPENSES; INDEMNITY

     Section 12.1. Expenses. In the event the transactions contemplated by this
Agreement and the Related Agreements shall be consummated or if the transactions
contemplated by this Agreement and the Related Agreements are not consummated by
reason of the failure by the Company to so consummate when legally obligated to
do so hereunder, the Company hereby agrees to pay all reasonable out of pocket
fees, costs and expenses incurred by each Purchaser (such as travel, photocopy
and telephone expenses and including the fees and expenses of one counsel for
the Purchasers and audit and due diligence fees). From and after the Closing,
the Company hereby agrees to pay on demand all reasonable fees, costs and
expenses (including attorneys' fees for one general counsel for the Purchasers
(including, if reasonably necessary, California counsel) and one FCC counsel for
the Purchasers) incurred by each Purchaser in connection with any enforcement,
amendment, modification, approval, consent or waiver with respect to this
Agreement or any Related Agreement, all taxes (other than taxes determined with
respect to income and taxes relating to any transfer of the Purchased Securities
or Registrable Securities other than to the Company) resulting from the sale of
Purchased Securities or Registrable Securities as provided herein, including any
recording fees and filing fees and documentary stamp and similar taxes at any
time payable in respect of this Agreement or the issuance of any of the
Purchased Securities or Registrable Securities, all reasonable out-of-pocket
expenses associated with the Company's or a Subsidiary's Board of Directors or
Board of Directors committee attendance (including as an observer), including
travel and lodging expenses related thereto, and all due diligence and legal
costs related to potential acquisitions and future financings.

     Section 12.2. Indemnification. The Company hereby agrees to indemnify and
hold each of the Purchasers and their (if applicable) general and limited
partners and their respective shareholders, officers, directors, employees and
agents (each an "Indemnitee") harmless from and against any and all actions,
causes of action, or suits brought against them by third parties ("Third Party
Claims") or brought by any Purchaser against the Company ("Purchaser Claims")
and any and all losses, liabilities, damages and expenses, including, without
limitation, reasonable attorneys' fees and disbursements (provided that with
regard to outside counsel to the Indemnitees, the Company shall be liable for
fees or disbursements to one set of attorneys for such parties (and separate FCC
counsel, if reasonably necessary) in any single action unless a potential
conflict of interest under the applicable code of professional responsibility
exists and provided further that Indemnitees shall not be entitled to
reimbursement of such attorneys' fees and disbursements incurred in connection
with a Purchaser Claim in the event such Indemnitees are not the prevailing
party in such Purchaser Claim) (collectively, "Damages") arising from any such
Third Party Claims or Purchaser Claims incurred by any of the Indemnitees as a
result of or relating to (i) any transaction by the Company financed or to be
financed in whole or in part, directly or indirectly, with proceeds from the
sale of any of the Purchased Securities, or (ii) the execution, delivery,
performance or enforcement of this Agreement, the Related Agreements or any
other agreement contemplated hereby or thereby (including, without limitation,
any failure by the Company or any of its Subsidiaries to comply with any of its
covenants or any breach of its representations and warranties in this Agreement,
the Related Agreements or any other agreement contemplated hereby or thereby),
in each case except where such Damages are caused directly by the actions of the
Indemnitee in violation of its obligations under such agreements or

                                       25



by the gross negligence or willful misconduct of any Indemnitee or their agents
or attorneys-in-fact.

     Section 12.3. Brokers' Fees. The Company hereby agrees to indemnify each of
the Purchasers against and agrees that it will hold each of them harmless from
any claim, demand or liability for any Transaction Costs alleged to have been
incurred by the Company or any Subsidiary or Affiliate in connection with the
transactions contemplated by this Agreement or the Related Agreements.

     Section 12.4. Survival of Obligations. The obligations of the Company and
each of the Purchasers under this Article XII shall survive the transfer of the
Purchased Securities or Registrable Securities and the termination of this
Agreement.

                                  ARTICLE XIII
                                     NOTICES

     All demands, notices, requests, consents and other communications required
or permitted under this Agreement, any Related Agreement or the Purchased
Securities shall be in writing and shall be personally delivered or sent by
facsimile machine (with a confirmation copy sent by one of the other methods
authorized in this Section), commercial (including FedEx) or U.S. Postal Service
overnight delivery service, or, deposited with the U.S. Postal Service mailed
first class, registered or certified mail, postage prepaid, as set forth below:

      If to the Company, addressed to:

      LBI Holdings I, Inc.
      c/o Liberman Broadcasting, Inc.
      1813 Victory Place
      Burbank, CA  91504
      Attention:  Executive Vice President
      Facsimile:  (818) 558-4244
      Telephone:  (818) 563-5722

with a copy to:

      O'Melveny & Myers LLP
      400 South Hope Street
      Los Angeles, CA  90071
      Attention:  Joseph K. Kim, Esq.
      Facsimile:  (213) 430-6407
      Telephone:  (213) 430-6511

If to any Purchaser, to such Purchaser's address as set forth on Schedule 2.1
hereto.

                                       26



with a copy to:

      Richard G. Small, Esq.
      Edwards & Angell, LLP
      2800 Financial Plaza
      Providence, RI  02903
      Facsimile:  (401) 276-6611
      Telephone:  (401) 276-6582

Notices shall be deemed given upon the earlier to occur of (i) receipt by the
party to whom such notice is directed; (ii) if sent by facsimile machine, on the
day (other than a Saturday, Sunday or legal holiday in the jurisdiction to which
such notice is directed) such notice is sent if sent (as evidenced by the
facsimile confirmed receipt) prior to 5:00 p.m. Eastern Standard Time and, if
sent after 5:00 p.m. Eastern Standard Time, on the day (other than a Saturday,
Sunday or legal holiday in the jurisdiction to which such notice is directed)
after which such notice is sent; (iii) on the first business day (other than a
Saturday, Sunday or legal holiday in the jurisdiction to which such notice is
directed) following the day the same is deposited with the commercial carrier if
sent by commercial overnight delivery service; or (iv) the fifth day (other than
a Saturday, Sunday or legal holiday in the jurisdiction to which such notice is
directed) following deposit thereof with the U.S. Postal Service as aforesaid.
Each party, by notice duly given in accordance therewith may specify a different
address for the giving of any notice hereunder.

                                  ARTICLE XIV
               SURVIVAL AND TERMINATION OF COVENANTS, AGREEMENTS,
                         REPRESENTATIONS AND WARRANTIES

     All covenants, agreements, representations and warranties made herein or in
any other document referred to herein or delivered to any party pursuant hereto
shall be deemed to have been relied on by each such party, notwithstanding any
investigation made by such party or on its behalf. All representations and
warranties made herein or in any of the Related Agreements shall survive the
execution and delivery of this Agreement and of the Purchased Securities.

                                   ARTICLE XV
                             AMENDMENTS AND WAIVERS

     Except as otherwise expressly provided herein, any term of this Agreement
may be amended and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively) only with the written consent of the Company and the Majority
Purchasers. Any amendment or waiver effected in accordance with this Article XV
shall be binding upon the Company and each holder of any Purchased Securities
sold pursuant to this Agreement and any holder of the Registrable Securities,
whether or not such holder expressly consented thereto.

                                       27



                                  ARTICLE XVI
                    CHOICE OF LAW; SUBMISSION TO JURISDICTION
                  AND WAIVER OF JURY TRIAL; DISPUTE RESOLUTION

     Section 16.1. Governing Law.

     THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE COMMONWEALTH OF MASSACHUSETTS (WITHOUT GIVING EFFECT TO ANY
CONFLICTS OR CHOICE OF LAWS PROVISIONS WHICH WOULD CAUSE THE APPLICATIONS OF THE
DOMESTIC SUBSTANTIVE LAWS OF ANY OTHER JURISDICTION).

     Section 16.2. Consent To the Exclusive Jurisdiction Of the Courts Of The
Commonwealth of Massachusetts.

     EACH OF THE PARTIES HERETO HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION OF
THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS AND THE UNITED STATES DISTRICT
COURT FOR THE DISTRICT OF THE COMMONWEALTH OF MASSACHUSETTS, AS WELL AS TO THE
JURISDICTION OF ALL COURTS TO WHICH AN APPEAL MAY BE TAKEN FROM SUCH COURTS, FOR
THE PURPOSE OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF, OR IN
CONNECTION WITH, THIS AGREEMENT INCLUDING, WITHOUT LIMITATION, ANY PROCEEDING
RELATING TO ANCILLARY MEASURES IN AID OF ARBITRATION, PROVISIONAL REMEDIES AND
INTERIM RELIEF, OR ANY PROCEEDING TO ENFORCE ANY ARBITRAL DECISION OR AWARD.

     EACH PARTY HEREBY EXPRESSLY WAIVES ANY AND ALL RIGHTS TO BRING ANY SUIT,
ACTION OR OTHER PROCEEDING ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT
IN OR BEFORE ANY COURT OR TRIBUNAL OTHER THAN THE COURTS OF THE COMMONWEALTH OF
MASSACHUSETTS AND COVENANTS THAT IT SHALL NOT SEEK IN ANY MANNER TO RESOLVE ANY
DISPUTE OTHER THAN AS SET FORTH IN THIS ARTICLE XVI OR TO CHALLENGE OR SET ASIDE
ANY DECISION, AWARD OR JUDGMENT OBTAINED IN ACCORDANCE WITH THE PROVISIONS
HEREOF.

     EACH OF THE PARTIES HERETO HEREBY EXPRESSLY WAIVES ANY AND ALL OBJECTIONS
IT MAY HAVE TO VENUE, INCLUDING, WITHOUT LIMITATION, THE INCONVENIENCE OF SUCH
FORUM, IN ANY OF SUCH COURTS. IN ADDITION, EACH OF THE PARTIES CONSENTS TO THE
SERVICE OF PROCESS BY PERSONAL SERVICE OR ANY MANNER IN WHICH NOTICES MAY BE
DELIVERED HEREUNDER IN ACCORDANCE WITH ARTICLE XIII.

     Section 16.3. Waiver Of Jury Trial.

     EACH OF THE PARTIES HERETO HEREBY VOLUNTARILY AND IRREVOCABLY WAIVES TRIAL
BY JURY IN ANY ACTION OR OTHER PROCEEDING BROUGHT IN CONNECTION WITH THIS
AGREEMENT, ANY OF THE OTHER

                                       28



TRANSACTION DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

     Section 16.4. Equitable Remedies. The parties hereto agree that irreparable
harm would occur in the event that any of the agreements and provisions of this
Agreement were not performed fully by the parties hereto in accordance with
their specific terms or conditions or were otherwise breached, and that money
damages are an inadequate remedy for breach of this Agreement because of the
difficulty of ascertaining and quantifying the amount of damage that will be
suffered by the parties hereto in the event that this Agreement is not performed
in accordance with its terms or conditions or is otherwise breached. It is
accordingly hereby agreed that the parties hereto shall be entitled to an
injunction or injunctions to restrain, enjoin and prevent breaches of this
Agreement by the other parties and to enforce specifically such terms and
provisions of such Articles in any court of the United States or any state
having jurisdiction, such remedy being in addition to and not in lieu of, any
other rights and remedies to which the other parties are entitled to at law or
in equity.

     Section 16.5. Intercreditor Agreements. This Agreement and the Related
Agreements are subject in all respects to the Intercreditor Agreements. The
parties agree that all Sections of this Agreement and the Related Agreements are
preempted to the extent in conflict with any provision of either of the
Intercreditor Agreements, unless and until all Senior Indebtedness (as defined
in the Senior Lenders Intercreditor Agreement) and all Senior Indebtedness (as
defined in the Senior Subordinated Lenders Intercreditor Agreement) are paid in
full and discharged and each such Intercreditor Agreement has terminated in
accordance with its terms.

                                  ARTICLE XVII
                               RIGHT TO PUBLICIZE

     Each of the parties hereto hereby agrees that it will not, except as
required by law, issue a press release or make any public statement regarding
the transactions contemplated hereby without the prior approval of the Company
and the Majority Purchasers, provided, however, that following the Closing, the
Majority Purchasers will have the right to publicize their investment in the
Company as contemplated hereby by means of a tombstone advertisement or other
customary advertisement in newspapers and other periodicals which advertisement
shall require the prior approval of and be reasonably acceptable to the Company.
The Company will have the right to inform actual or prospective customers and
lenders of such investment.

     Notwithstanding the foregoing, the Purchasers and any future holders and
transferees of any Purchased Securities or Registrable Securities shall take
normal and reasonable precautions to maintain the confidentiality of all
non-public information obtained pursuant to the requirements of this Agreement
or under any Related Agreement but may, in any event, make disclosures (a)
reasonably required by any bona fide transferee, assignee or participant, in
connection with the contemplated transfer or assignment of the Purchased
Securities or participation therein, (b) as required or requested by any
governmental agency or representative thereof or as required pursuant to legal
process, (c) to its attorneys, accountants and other professional advisers with
an obligation of confidentiality, and to its beneficial holders and current and
prospective investors in funds managed by the Purchasers and/or their
Affiliates, (d) as required by law or (e) in connection with litigation
involving any Purchaser; provided that

                                       29



(i) such transferee or assignee pursuant to clause (a) agrees in writing to
comply with the provisions of this Article XVII unless specifically prohibited
by applicable law or court order and (ii) in no event shall the Purchasers or
any future holders or transferees be obligated or required to return any
materials furnished by the Company, its Subsidiaries, or any of their respective
representatives.

                                 ARTICLE XVIII
                ENTIRE AGREEMENT; COUNTERPARTS; SECTION HEADINGS

     This Agreement, the Related Agreements and the other writings referred to
herein or delivered pursuant hereto which form a part hereof contain the entire
understanding of the parties hereto with respect to its subject matter. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to its subject matter. Notwithstanding the foregoing, the
provisions of the Intercreditor Agreements shall control with respect to
subordination and exercise of remedies.

     This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument. Signatures by telecopy shall constitute originals.

     The descriptive headings of sections and paragraphs of this Agreement are
inserted for convenience only, and do not constitute a part of this Agreement
and shall not affect in any way the meaning or interpretation of this Agreement.

              [The rest of this page is left blank intentionally.]

                                       30



IN WITNESS WHEREOF, the Company and the Purchasers have executed this Securities
Purchase Agreement as of the day and year first above written.

                                    COMPANY:

                                    LBI HOLDINGS I, INC.


                                    By: /s/ Lenard Liberman
                                       -----------------------------------------
                                    Name:  Lenard Liberman
                                    Title: Executive Vice President


                                    /s/ Lenard Liberman
                                    --------------------------------------------
                                    Lenard Liberman, solely for purposes of
                                    Section 7.7


                                    /s/ Jose Liberman
                                    --------------------------------------------
                                    Jose Liberman, solely for purposes of
                                    Section 7.7


                                    PURCHASERS:

                                    ALTA COMMUNICATIONS VIII, L.P.

                                    By:  Alta Communications VIII Managers, LLC,
                                             its General Partner


                                    By: /s/ Eileen McCarthy
                                       -----------------------------------------
                                    Name:_______________________________________
                                    Title:______________________________________


                                    ALTA-COMM VIII S BY S, LLC

                                    By: /s/ Eileen McCarthy
                                       -----------------------------------------
                                    Name:_______________________________________
                                    Title:______________________________________

                                       31



                                    ALTA COMMUNICATIONS VIII-B, L.P.

                                    By:  Alta Communications VIII Managers, LLC,
                                             its General Partner


                           By: /s/ Eileen McCarthy
                              -----------------------------------------------
                           Name:_____________________________________________
                           Title:____________________________________________


                           ALTA VIII ASSOCIATES, LLC

                           By:  Alta Communications, Inc.


                           By: /s/ Eileen McCarthy
                              -----------------------------------------------
                           Name:_____________________________________________
                           Title:____________________________________________

                           CALIFORNIA STATE TEACHERS'
                           RETIREMENT SYSTEM


                           By: /s/ Christopher J. Ailman
                              -----------------------------------------------
                           Name: Christopher J. Ailman
                                ---------------------------------------------
                           Title: Chief Investment Officer
                                 --------------------------------------------


                           BANCBOSTON INVESTMENTS INC.


                           By: /s/ Lars A. Swanson
                              -----------------------------------------------
                           Name:  Lars A. Swanson
                                ---------------------------------------------
                           Title: Director
                                 --------------------------------------------


                           UNIONBANCALEQUITIES, INC.


                           By: /s/ J. Kevin Sampson     /s/ David Bonrouhi
                              -----------------------------------------------
                           Name: J. Kevin Sampson           David Bonrouhi
                                ---------------------------------------------
                           Title: Vice President            Vice President
                                 --------------------------------------------

                                       32



                                  SCHEDULE 2.1



- ----------------------------------------------------------------------------------------------------------------------
                                                                                  Number of
   Purchaser's Name and             Principal Amount      Purchase Price of        Warrants       Purchase Price of
         Address                   of Notes Purchased      Notes Purchased        Purchased       Warrants Purchased
- ----------------------------------------------------------------------------------------------------------------------
                                                                                      
Alta Communications VIII, L.P.        $15,831,793.00         $15,567,929.79        7.398725         $  263,863.21
200 Clarendon Street
Boston, MA 02109
Attn:  Bob Emmert

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

Alta-Comm VIII S By S, LLC
200 Clarendon Street                  $   261,783.00         $   257,419.95        0.122340         $    4,363.05
Boston, MA 02109
Attn:  Bob Emmert

- ----------------------------------------------------------------------------------------------------------------------
Alta Communications VIII-B, L.P.
200 Clarendon Street                  $   881,424.00         $   866,733.60        0.411919         $   14,690.40
Boston, MA 02109
Attn:  Bob Emmert

- ----------------------------------------------------------------------------------------------------------------------
Alta VIII Associates, LLC
200 Clarendon Street                  $    25,000.00         $    24,583.33        0.011683         $      416.67
Boston, MA 02109
Attn:  Bob Emmert

- ----------------------------------------------------------------------------------------------------------------------
California State Teachers'
Retirement System                     $ 5,000,000.00         $ 4,916,666.67        2.336667         $   83,333.33
Mail Station #4
Investments Office
7667 Folsom Boulevard
P.O. Box 163749, MS4
Sacramento, CA  95816-3749
Attn:  Deanna Winter
- ----------------------------------------------------------------------------------------------------------------------

BancBoston Investments Inc.
175 Federal Street                    $ 6,000,000.00         $ 5,900,000.00        2.804000         $  100,000.00
10/th/ Floor
- ----------------------------------------------------------------------------------------------------------------------


                                        1



                                                                                      
- ----------------------------------------------------------------------------------------------------------------------
Boston, MA  02110
Attn:  Lars Swanson
- ----------------------------------------------------------------------------------------------------------------------

UnionBanCal Equities, Inc.
445 South Figueroa St.              $ 2,000,000.00        $  1,966,666.67       0.934667          $    33,333.33
21/st/ Floor
Los Angeles, CA 90071
Attn:  Kevin Sampson

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

       Totals:                      $30,000,000.00        $ 29,500,000.00          14.02          $   500,000.00

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





                                    EXHIBIT A

     THIS INSTRUMENT IS SUBJECT TO A SUBORDINATION AND INTERCREDITOR AGREEMENT
DATED AS OF MARCH 20, 2001 BY AND AMONG LBI HOLDINGS I, INC., A CALIFORNIA
CORPORATION, THE PURCHASERS PARTY TO THE SECURITIES PURCHASE AGREEMENT DESCRIBED
BELOW, AND FLEET NATIONAL BANK, INDIVIDUALLY AND AS ADMINISTRATIVE AGENT (THE
"ADMINISTRATIVE AGENT") FOR THE LENDERS UNDER THE CREDIT AGREEMENT BY AND AMONG
LBI HOLDINGS II, INC. (THE "BORROWER"), THE DIRECT AND INDIRECT SUBSIDIARIES OF
THE BORROWER WHICH ARE CREDIT PARTIES THEREUNDER, THE LENDERS PARTY THERETO AND
THE ADMINISTRATIVE AGENT AND UNION BANK OF CALIFORNIA, N.A. AS SYNDICATION
AGENT, AND CIT LENDING SERVICES CORPORATION AND GENERAL ELECTRIC CAPITAL
CORPORATION, AS CO-DOCUMENTATION AGENTS. BY ITS ACCEPTANCE OF THIS INSTRUMENT,
THE HOLDER HEREOF AGREES TO BE BOUND BY THE PROVISIONS OF SUCH SUBORDINATION AND
INTERCREDITOR AGREEMENT TO THE SAME EXTENT THAT THE SUBORDINATED CREDITORS (AS
DEFINED THEREIN) ARE BOUND.

     THIS INSTRUMENT IS SUBJECT TO A SUBORDINATION AND INTERCREDITOR AGREEMENT,
DATED AS OF MARCH 20, 2001, AMONG LBI HOLDINGS I, INC., THE PURCHASERS PARTY TO
THE SECURITIES PURCHASE AGREEMENT DESCRIBED BELOW, OAKTREE CAPITAL MANAGEMENT,
LLC, INDIVIDUALLY AND AS AGENT FOR CERTAIN HOLDERS, AND OTHERS. BY ITS
ACCEPTANCE OF THIS INSTRUMENT, THE HOLDER HEREOF AGREES TO BE BOUND BY THE
PROVISIONS OF SUCH SUBORDINATION AND INTERCREDITOR AGREEMENT TO THE SAME EXTENT
THAT THE SUBORDINATED CREDITORS (AS DEFINED THEREIN) ARE BOUND.

     THE SECURITIES REPRESENTED BY THIS NOTE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR APPLICABLE
STATE LAWS. THESE SECURITIES MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS THE REGISTRATION PROVISIONS OF SAID ACT AND LAWS HAVE BEEN
COMPLIED WITH OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED. FURTHERMORE,
THESE SECURITIES MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS
THE COMPANY HAS RECEIVED AN OPINION OF TAX COUNSEL REASONABLY ACCEPTABLE TO THE
COMPANY IN FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO THE COMPANY TO THE EFFECT
THAT SUCH SALE, TRANSFER, PLEDGE OR HYPOTHECATION WILL NOT TERMINATE THE
COMPANY'S CLASSIFICATION AS AN S CORPORATION.

                                      A-1



                       JUNIOR SUBORDINATED PROMISSORY NOTE

[$___________]                                                   March ___, 2001

     FOR VALUE RECEIVED, the undersigned LBI HOLDINGS I, INC., a California
corporation (the "Borrower"), hereby unconditionally promises to pay to the
order of [________________] (hereinafter with any subsequent holder referred to
as "Lender"), having its principal place of business at [________________], on
the Maturity Date (as hereinafter defined), the principal amount of [_________
Dollars ($_________)] together with interest thereon, at the rates provided for
in the Securities Purchase Agreement (hereafter described).

     This Note is one of the "Notes" referred to in, and is entitled to all the
benefits of that certain Securities Purchase Agreement dated as of the date
hereof, by and among Borrower, Lender and the other parties signatories thereto
(as may be amended from time to time, the "Securities Purchase Agreement"). All
capitalized terms used herein and not otherwise defined shall have the meanings
given to such terms in the Securities Purchase Agreement.

     Interest on the principal amount outstanding hereunder shall accrue and
shall be paid as provided in the Securities Purchase Agreement.

     The outstanding principal amount of this Note, together with all accrued
interest thereon, shall be due and payable, without setoff, deduction or
counterclaim, on September 20, 2009, or on such earlier date as provided in the
Securities Purchase Agreement (the "Maturity Date").

     Borrower may prepay the outstanding principal amount and accrued interest
hereunder, in full or in part, upon the terms and conditions set forth in the
Securities Purchase Agreement.

     Payments of principal and interest due hereunder shall be made by Borrower
in lawful money of the United States of America and immediately available funds
to Lender at its address set forth in the first paragraph of this Note, or at
such other place as Lender may designate to the Borrower in writing, in
accordance with the Securities Purchase Agreement. All payments hereunder,
unless otherwise determined by Lender, shall be applied first to interest, fees
and expenses then due and the balance, if any, to principal.

     In no event shall the undersigned be required to pay any interest or other
fees or charges in excess of the maximum permitted by applicable law. If, for
any circumstances whatsoever, fulfillment of any provisions hereof or of the
Securities Purchase Agreement, at the time performance of such provision shall
be due, shall involve exceeding such amount, then the obligation to be fulfilled
shall automatically be reduced to the limit of such validity, and if from any
circumstance Lender should ever receive as interest an amount which would exceed
such maximum amount, such amount which would be excessive interest shall be
applied to the reduction of the principal balance evidenced hereby and not to
the payment of interest. As used herein, the term "applicable law" shall mean
the law in effect as of the date hereof; provided, however, that in the event
there is a change in the law which results in a higher permissible rate of
interest, then this Note shall be governed by such new law as of its effective
date. This provision shall control every other provision of all agreements
between Borrower and Lender.

                                      A-2



     Borrower agrees to pay all costs and expenses (including reasonable
attorneys' fees) incurred by Lender in the collection of this Note and the
enforcement of any agreement or instrument securing this Note.

     Any and all sums at any time due from Lender to Borrower shall at all times
constitute security for this Note and any other obligations of Borrower to
Lender and may be applied or set off by Lender against such obligations whether
or not other collateral is available to Lender.

     Borrower, for itself and its legal representatives, successors and assigns,
hereby expressly waives presentment, dishonor, protest and demand, diligence,
notice of protest of demand and of dishonor, and any other notice otherwise
required to be given under the law in connection with the delivery, acceptance,
performance, default, enforcement or collection of this Note, and expressly
agrees that this Note, or any payment hereunder, may be extended or subordinated
(by forbearance or otherwise) as set forth in the Securities Purchase Agreement.

     No delay or omission on the part of Lender in exercising any right
hereunder shall operate as a waiver of such right or of any other right of
Lender nor shall any delay, omission or waiver on any one occasion be deemed a
bar to or waiver of the same or any other right on any future occasion. No
consent or waiver by Lender with respect to any action or failure to act which,
without such consent or waiver, would constitute a breach of any provision of
this Note shall be valid and binding unless in writing and signed by Borrower
and Lender.

     Transfer of this Note is registrable on the Note register of Borrower upon
presentation at the principal office of Borrower accompanies by a written
instrument of transfer in form reasonably satisfactory to Borrower duly executed
by, or on behalf of, the holder hereof; provided any such transferee is also a
Permitted Holder. This Note may also be exchanged at such office for one or more
Notes in any authorized denominations, as requested by the holder, of a like
aggregate unpaid principal amount. Any transfer of this Note shall be subject to
the terms of the Securities Purchase Agreement and any such transferee's
agreement to be bound to the terms of the Securities Purchase Agreement, the
Related Agreements and the Intercreditor Agreements, and by acceptance of this
Note the holder agrees to be bound by the terms of the Securities Purchase
Agreement, the Related Agreements and the Intercreditor Agreements.

     Prior to due presentment for registration of transfer, Borrower and any
agent of Borrower may treat the person in whose name this Note is registered as
the owner hereof for the purpose of receiving payment of principal and interest
as herein provided and for all other purposes.

     This Note shall be governed by and construed in accordance with the laws of
the Commonwealth of Massachusetts without giving effect to any choice or
conflict of law provision or rule that would cause the application of the
domestic substantive laws of any other jurisdiction.

     This Note is subject to certain subordination provisions as set forth in
the Intercreditor Agreements.

     BORROWER HEREBY WAIVES TRIAL BY JURY IN ANY ACTION PERTAINING TO THE
ENFORCEMENT OF THIS NOTE OR ANY AGREEMENT OR INSTRUMENT SECURING THIS NOTE.

                                      A-3



     This Note is executed as of the date first set forth above as a sealed
instrument, shall be binding upon the undersigned and its successors and
assigns, and shall inure to the benefit of Lender and its successors and
assigns.

                                    LBI HOLDINGS I, INC.

Witness:

                                    By:_________________________________________
                                    Name:_______________________________________
                                    Title:______________________________________

                                      A-4

EX-10.8

                                                                    Exhibit 10.8

                              LBI HOLDINGS I, INC.

                               FIRST AMENDMENT TO
                SECURITIES PURCHASE AGREEMENT, WARRANT AGREEMENT
                 AND SUBORDINATION AND INTERCREDITOR AGREEMENTS

     THIS FIRST AMENDMENT TO SECURITIES PURCHASE AGREEMENT, WARRANT AGREEMENT
AND SUBORDINATION AND INTERCREDITOR AGREEMENTS (this "Amendment") is dated as of
July 9, 2002 and entered into by and among LBI Holdings I, Inc., a California
corporation (the "Company"), the several purchasers (individually, a
"Purchaser," and collectively, the "Purchasers") listed on the signature pages
hereof, for purposes of Sections 3, 5, 7, 8A and 9 only, Fleet National Bank,
individually and as administrative agent for the lenders under the Senior Loan
Agreement dated as of July 9, 2002 ("Fleet"), and, for purposes of Sections 4,
7, 8A and 9 only, Oaktree Capital Management, LLC, individually and as agent for
the Senior Subordinated Lenders (as such term is defined in the Purchase
Agreement prior to giving effect to this Amendment) ("Oaktree").

     This Amendment is made with reference to that certain Securities Purchase
Agreement dated as of March 20, 2001 and entered by and among the Company and
the Purchasers (the "Purchase Agreement"; as amended hereby, the "Amended
Purchase Agreement"), that certain Warrant Agreement dated as of March 20, 2001
and entered by and among the Company and the Purchasers (the "Warrant
Agreement"; as amended hereby, the "Amended Warrant Agreement"), that certain
Subordination and Intercreditor Agreement dated as of March 20, 2001 and entered
by and among the Company, the Purchasers and Fleet (the "Senior Lenders
Intercreditor Agreement"; as amended hereby, the "Amended Intercreditor
Agreement"), that certain Subordination and Intercreditor Agreement dated as of
March 20, 2001 and entered by and among the Company, the Purchasers and Oaktree
(the "Senior Subordinated Lenders Intercreditor Agreement"; as amended hereby,
the "Amended Subordinated Intercreditor Agreement"), and that Investor
Subordination Agreement dated as of March 20, 2001 and entered by and among the
Purchasers and Fleet (the "Investor Subordination Agreement"; as amended hereby,
the "Amended Investor Subordination Agreement" and together with the Amended
Purchase Agreement, the Amended Warrant Agreement, the Amended Intercreditor
Agreement and the Amended Subordinated Intercreditor Agreement, the "Amended
Agreements").

     Capitalized terms used herein without definition shall have the same
meanings herein as set forth in the Purchase Agreement.

                                    RECITALS

     WHEREAS, the Company and the Purchasers have previously entered into the
Purchase Agreement and the Warrant Agreement, pursuant to which the Company sold
to the Purchasers (i) Notes in an original aggregate principal amount of
$30,000,000 and (ii) Warrants to purchase a certain number of shares of the
Company's Common Stock;



     WHEREAS, certain subsidiaries of the Company desire to amend and restate
the existing Senior Loan Agreement and to refinance the existing Senior
Subordinated Loan Agreement by issuing publicly-traded senior subordinated notes
pursuant to an indenture;

     WHEREAS, the obligations under the Notes will be subordinated to the
obligations under the publicly-traded senior subordinated notes and the Purchase
Agreement will be amended to insert certain provisions regarding subordination;

     WHEREAS, the parties hereto desire to amend, to the extent they are a party
thereto, the Purchase Agreement, the Warrant Agreement and the Senior Lenders
Intercreditor Agreement on the terms and subject to the conditions contained
herein;

     WHEREAS, the Company and the Purchasers desire to have the Company reissue
the Warrants and the Notes reflecting the changes set forth in this Amendment,
including the extension of the scheduled maturity date of the Notes to July 9,
2013 and the extension of the scheduled expiration date of the Warrants to
January 9, 2015;

     WHEREAS, the Company, the Purchasers and Oaktree desire to amend the
existing Senior Subordinated Lenders Intercreditor Agreement to reflect the
payment in full of all principal and interest due on the subordinated notes held
by Oaktree;

     WHEREAS, Fleet and the Purchasers desire to amend the Investor
Subordination Agreement.

     NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:

Section 1. AMENDMENTS TO THE PURCHASE AGREEMENT

     1.1   Amendments to Article I: Definitions.

     A. The definition of "Senior Loan Agreement" in Article I of the Purchase
Agreement is hereby amended by adding after the phrase "from time to time"
appearing in the fifth line thereof the phrase ", as amended and restated by the
Amended and Restated Credit Agreement dated as of July 9, 2002 among LBI Media,
as the borrower, the guarantors party thereto and Fleet National Bank, as
administrative agent, General Electric Capital Corporation and U.S. Bank, N.A.,
as co-syndication agents, and CIT Lending Services Corporation and SunTrust
Bank, as co-documentation agents, and the other lenders party thereto from time
to time."

     B. Article I of the Purchase Agreement is hereby amended by deleting each
of the following definitions therefrom in their entirety and substituting the
following therefor:

           "Maturity Date" means the earlier to occur of (i) July 9, 2013, (ii)
     the acceleration of the obligations of the Company to the Purchasers under
     the Notes in accordance with Article IX following the occurrence and
     continuance of a Material Event of Default, (iii) a Sale of the Company,
     (iv) [intentionally left blank] or (v) the date on which the Company
     repurchases the Warrants pursuant to Section 5.2 of the Warrant Agreement.

                                       2



          "Senior Subordinated Lenders" means the holders of notes from time to
     time issued pursuant to the Senior Subordinated Loan Agreement.

          "Senior Subordinated Lenders Intercreditor Agreement" means Article
     XIX of this Agreement, as such provisions may be amended from time to time.

          "Senior Subordinated Loan Agreement" means the Indenture, dated as of
     July 9, 2002, among LBI Media, as the issuer, the guarantors party thereto
     and U.S. Bank, N.A., as the trustee, and any other agreement governing
     Indebtedness incurred to refund or refinance the borrowings and commitments
     then outstanding or permitted to be outstanding under the Indenture, in
     whole or in part, in each case together with any related notes, guarantees,
     and collateral documents executed from time to time in connection
     therewith, including that certain registration rights agreement dated as of
     July 9, 2002 by and among LBI Media, the Senior Subordinated Note
     Guarantors, and the initial purchasers party thereto for the benefit of the
     Senior Subordinated Lenders, and in each case as amended, modified,
     supplemented, extended, restated, renewed, refunded, restructured, replaced
     or refinanced (in whole or in part), including any increase in the amount
     of Indebtedness thereunder, from time to time, whether by the same or any
     other agent, purchaser or group of purchasers.

     C. Article I of the Purchase Agreement is hereby amended by adding each of
the following definitions thereto in appropriate alphabetical order:

         "Agreement" means the Purchase Agreement, as amended from time to time.

         "LBI Media" means LBI Media, Inc., a California corporation (formerly
known as LBI Holdings II, Inc.).

          "Reorganization" means any distribution of the assets of any entity
     upon any voluntary or involuntary dissolution, winding-up, total or partial
     liquidation or reorganization, or bankruptcy, insolvency, receivership or
     other statutory or common law proceedings or arrangements involving any
     such party or the readjustment of the liabilities of any such party or any
     assignment for the benefit of creditors or any marshaling of the assets or
     liabilities of any such party.

          "Senior Credit Satisfaction" means the repayment in full of all loans,
     advances, extensions of credit and other fees and direct monetary
     obligations (including, without limitation, interest which accrues after
     the commencement of any proceeding in respect of any Reorganization), and
     the termination of all commitments, under the Senior Loan Agreement.

          "Senior Subordinated Notes" means the 10-1/8% Senior Subordinated
     Notes due 2012 of LBI Media, together with any additional notes issued
     pursuant to the Senior Subordinated Loan Agreement, including, but not
     limited to, notes issued in exchange or replacement therefor, and any
     refinancing, refunding or replacement of any of the foregoing.

                                       3



          "Senior Subordinated Note Guarantors" means each of the direct and
     indirect subsidiaries of LBI Media that are guarantors of the Senior
     Subordinated Notes pursuant to the Senior Subordinated Loan Agreement.

          "Senior Subordinated Note Obligations" means any and all principal,
     interest, premium, penalty, fee, indemnification, reimbursements, damages,
     including liquidated damages, and other indebtedness, obligations and
     liabilities of LBI Media and the Senior Subordinated Note Guarantors to the
     holders of the Senior Subordinated Notes, their successors and assigns, now
     existing or hereafter arising, direct or indirect, absolute or contingent,
     secured or unsecured, arising out of or in connection with the Senior
     Subordinated Loan Agreement and any other document or instrument executed
     in connection with the Senior Subordinated Notes, including any and all
     interest payable pursuant to the Senior Subordinated Loan Agreement and the
     Senior Subordinated Notes at the interest rates provided therein, any
     premium payable in accordance with the terms of the Senior Subordinated
     Loan Agreement and all other fees, expenses, and other amounts due from
     time to time under the Senior Subordinated Loan Agreement and the Senior
     Subordinated Notes.

          "Senior Subordinated Notes Trustee" means the trustee under the Senior
     Subordinated Loan Agreement.

          "Subordinated Agreements" means this Agreement, the Warrant Agreement,
     and the Voting and Co-Sale Agreement.

          "Subordinated Indebtedness" means all existing and hereafter arising
     indebtedness, obligations and liabilities of the Company, LBI Media and its
     direct and indirect subsidiaries or the shareholders of the Company to the
     Permitted Holders, whether direct or contingent, and all claims, rights,
     causes of action, judgments and decrees in respect of the foregoing,
     including, without limitation: (i) the Notes and any notes hereafter issued
     by the Company to the Permitted Holders, including, without limitation, all
     notes issued in respect of payment in kind interest, (ii) the Warrants and
     all warrants hereafter issued pursuant to the Warrant Agreement, (iii) the
     Subordinated Agreements and (iv) all obligations of the Company to
     repurchase or redeem the Notes or the Warrants.

     1.2  Amendments to Article II: Sale and Purchase of Purchased Securities

     A. Section 2.4(a)(i) of the Purchase Agreement is hereby amended by adding
after the phrase "9% per annum" appearing in the second line thereof the phrase
"(or 13% per annum after September 20, 2009), in each case".

     B. Section 2.4(a)(ii) of the Purchase Agreement is hereby amended by
deleting the reference to "September 20, 2009" contained therein and
substituting "July 9, 2013" therefor.

     C. Section 2.4(h) of the Purchase Agreement is hereby amended by deleting
the phrase "or otherwise" in the fourth sentence contained therein.

                                       4



          1.3 Amendments to Article VII: Affirmative and Negative Covenants

          A. Section 7.1 of the Purchase Agreement is hereby amended by (i)
     deleting the first reference to "under Sections 7.4, 7.16 and Article 8 of
     the Senior Subordinated Loan Agreement, as such sections exist on the date
     hereof" contained therein and substituting "or not prohibited under the
     Senior Subordinated Loan Agreement," (ii) deleting the second reference to
     "under Sections 7.4, 7.16 and Article 8 of the Senior Subordinated Loan
     Agreement, as such sections exist on the date hereof" contained therein and
     substituting "under Sections 4.10, 4.13, and Article 5 of the Senior
     Subordinated Loan Agreement, as such sections exist on July 9, 2002" and
     (iii) adding after the second sentence of such Section 7.1 the following
     sentence:

          "Notwithstanding the foregoing, LBI Intermediate Holdings, Inc. may
          merge with and into LBI Media."

          B. Section 7.2 of the Purchase Agreement is hereby amended by deleting
     the reference to "Section 6.5 of the Senior Loan Agreement, as such section
     exists as of the date hereof" contained therein and substituting "Section
     6.5 of the Senior Loan Agreement, as such section exists as of July 9,
     2002" therefor.

          C. Section 7.5(i) of the Purchase Agreement is hereby amended by
     deleting the phrase "on the date hereof" contained therein and substituting
     therefor the phrase "on July 9, 2002, or Distributions between or among LBI
     Media and/or any of its wholly-owned Subsidiaries."

          D. Section 7.5(ii) of the Purchase Agreement is hereby amended by
     inserting the phrase "or loans" after the phrase "those Distributions."

          E. Section 7.5(iv) of the Purchase Agreement is hereby amended by
     deleting the reference to "$10,000,000" contained therein and substituting
     "$15,000,000" therefor.

          F. Section 7.5 of the Purchase Agreement is hereby further amended by
     inserting the following sentence at the end of such section:

         "Notwithstanding any provision in Section 7.1 or this Section 7.5 to
         the contrary, the Company and its wholly-owned Subsidiaries may cancel,
         forgive or transfer loan receivables made under Section 7.5(ii) owing
         to Company or any of its wholly-owned Subsidiaries from the Company's
         shareholders and such cancellation, forgiveness or transfer shall not
         be deemed as Distributions hereunder."

          G. Section 7.6 of the Purchase Agreement is hereby further amended by
     inserting the following parenthetical at the end of clause (a) after the
     phrase "of the Company":

          "(including without limitation any intercompany note issued by the
          Company to any of its wholly-owned Subsidiaries in connection with
          intercompany loans made by such wholly-owned Subsidiaries to the
          Company)"

          H. Section 7.7 of the Purchase Agreement is hereby amended by deleting
     the second sentence thereof in its entirety and substituting the following
     therefor:

                                       5



         "If after July 9, 2002, Lenard Liberman, Jose Liberman and/or their
         Family Members shall loan or otherwise extend any credit to the Company
         or its Subsidiaries (except for business expenses to be reimbursed by
         the Company or its Subsidiaries in the ordinary course of business),
         then, if requested by Majority Purchasers, such person shall enter into
         a subordination agreement with the Purchasers subordinating such
         person's loans to the Company and/or its Subsidiaries on terms
         reasonably acceptable to Majority Purchasers, Senior Lenders and such
         person, and which does not restrict any payment to such person that
         would otherwise be permitted under the Senior Subordinated Loan
         Agreement."

         1.4   Amendment to Article VIII: Delivery of Information

         A.  The Purchase Agreement is hereby amended by deleting each reference
     to "the Company" or "the Company's" appearing in Sections 8.1, 8.2, 8.3 and
     8.4 thereof (other than (i) the second reference to "the Company" in such
     Section 8.1, (ii) the first and third references to "the Company" in such
     Section 8.2, (iii) the second reference to "the Company" (not including any
     reference to the phrase "the Company's") in such Section 8.3, and (iv) the
     first reference to "the Company" in such Section 8.4) and substituting
     therefor in each instance the phrase "LBI Media" or "LBI Media's", as
     applicable.

         B.  Section 8.1 of the Purchase Agreement is hereby further amended by
     inserting the following paragraph at the end of such section:

         "Within 120 days after the close of each fiscal year of the Company,
         commencing with the fiscal year ending on December 31, 2002, the
         Company will deliver to each Purchaser an unaudited consolidated
         balance sheet and statement of income and retained earnings and of cash
         flows of the Company and its Subsidiaries, which annual financial
         statements shall show the financial condition of the Company as of the
         close of such fiscal year and the results of the Company's operations
         during such fiscal year, to be accompanied by an officer's certificate
         as described in Section 8.3; provided, however, that in the event the
         Company engages in any activities beyond the activities as permitted by
         Section 7.15 of the Senior Loan Agreement as such provision is in
         effect on July 9, 2002, then the Purchasers shall be entitled to
         request and receive the audited financial statements for Company and
         its Subsidiaries (rather than LBI Media and its Subsidiaries) under
         this Section."

         1.5 Amendment to Article IX: Defaults

         A.  Subsection (e) of Article IX of the Purchase Agreement is hereby
     amended by deleting the reference to "Sections 6.1, 6.2 and 6.6 of the
     Senior Loan Agreement, as such provisions are in effect on the date hereof"
     contained therein and substituting "Sections 6.1, 6.2 and 6.6 of the Senior
     Loan Agreement, as such provisions are in effect on July 9, 2002" therefor.

         B.  Subsection (l) of Article IX of the Purchase Agreement is hereby
     amended by deleting therefrom the phrase "and Requisite Holders (as defined
     in the Senior Subordinated Loan Agreement)."

                                       6



         1.6 Addition of New Article XIX: Subordination

         The Purchase Agreement is hereby amended by adding after Article XVIII
thereof a new Article XIX as follows:

         "Section 19.1 Payment and Performance Subordinated. Notwithstanding
anything to the contrary in the Subordinated Agreements, the Notes or the
Warrants, but subject to Section 19.4, for so long as any of the Senior
Subordinated Notes are outstanding, the payment and performance of the
Subordinated Indebtedness is, and shall expressly be, subordinate and junior in
right of payment and exercise of remedies to the prior payment in full in cash
of the Senior Subordinated Note Obligations to the extent and in the manner
provided in this Article XIX, and the Subordinated Indebtedness is hereby
subordinated as a claim against the Company, LBI Media, any of their direct or
indirect subsidiaries and the Senior Subordinated Note Guarantors and any of the
assets of, or ownership interests in, such parties whether such claim be in the
event of any Reorganization or otherwise. In furtherance of the foregoing, the
Company will not make, and the Permitted Holders will not demand, accept or
receive, any payment of interest, principal or any payment in respect of the
Subordinated Indebtedness, including, without limitation, any amounts in
connection with a put of the Warrants pursuant to the Warrant Agreement, or
otherwise in respect of the Subordinated Indebtedness, until all of the Senior
Subordinated Note Obligations have been indefeasibly paid in full in cash,
except as permitted pursuant to Section 19.4 hereof. All Senior Subordinated
Note Obligations shall be entitled to the benefits of this Article XIX without
notice thereof being given to any holder of Subordinated Indebtedness.

         Section 19.2 Distribution in Reorganization.

         (a) In the event of any Reorganization relative to the Company, LBI
Media or any of their direct and indirect subsidiaries or any of their
respective properties, all of the Senior Subordinated Note Obligations shall
first be paid in full in cash before any payment on account of principal,
premium or interest or otherwise is made upon or in respect of the Subordinated
Indebtedness, and in any such proceedings any payment or distribution of any
kind or character, whether in cash or property or securities which may be
payable or deliverable in respect of the Subordinated Indebtedness shall, after
Senior Credit Satisfaction, be paid or delivered to the Senior Subordinated
Notes Trustee for application in payment of the Senior Subordinated Note
Obligations, unless and until all such Senior Subordinated Note Obligations
shall have been paid and satisfied in full in cash.

         (b) Each Permitted Holder, for itself and its heirs, legatees,
successors and assigns, hereby irrevocably authorizes and directs the Senior
Subordinated Notes Trustee and any trustee in bankruptcy, receiver, custodian or
assignee for the benefit of creditors of any of the Company, LBI Media or any of
their direct and indirect subsidiaries, whether in voluntary or involuntary
liquidation, dissolution or reorganization, on its behalf to take such action as
may be necessary or appropriate to effectuate the subordination provided for in
this Article XIX and irrevocably appoints, which appointment is coupled with an
interest, upon any Default or Event of Default under the Senior Subordinated
Loan Agreement and during the continuance thereof and upon any failure to comply
with the terms of this Article XIX, the Senior Subordinated Notes Trustee,

                                       7



or any such trustee, receiver, custodian or assignee, its attorneys-in-fact for
such purpose with full powers of substitution and revocation.

         (c) Notwithstanding the foregoing provisions of this Section 19.2, the
Permitted Holders shall be entitled to receive and retain any securities of the
Company provided for by a plan of reorganization or readjustment or the like,
the payment of which securities is subordinate, at least to the extent provided
in this Article XIX, with respect to the Subordinated Indebtedness, to the
payment of all Senior Subordinated Note Obligations.

         Section 19.3  Effect of Provisions. The provisions of Article XIX as to
subordination are solely for the purpose of defining the relative rights of the
holders of Senior Subordinated Note Obligations, on the one hand, and the
Permitted Holders, on the other hand, and none of such provisions shall impair,
as between the Company and the Permitted Holders, the obligations of the Company
to pay to the Permitted Holders in accordance with the terms of the Senior
Subordinated Note Obligations, nor, except as provided in Section 19.7 below,
shall any such provisions prevent the Permitted Holders from exercising all
rights and remedies otherwise permitted by applicable law or under the terms of
the applicable Subordinated Agreements upon a default thereunder or otherwise,
subject to the rights, if any, of the holders of Senior Subordinated Note
Obligations under the provisions of this Article XIX.

         Section 19.4  Permitted Payments of Subordinated Indebtedness.

         (a) The Company may issue additional Notes to the Permitted Holders as
payment in kind for interest accrued on the Notes in accordance with the terms
of this Agreement, and the Company may issue additional Warrants (or adjust the
number of shares of equity securities underlying Warrants) to the Permitted
Holders in accordance with the Warrant Agreement. Each such additional Note
shall have payment terms (including, without limitation, maturity date and the
absence of any scheduled payments of principal, interest or other amounts prior
to such maturity date) identical to the Notes and shall otherwise be
substantially identical to the Notes, except for any differences in the
principal amount of any such additional Note. Each such additional Warrant shall
have payment terms (including, without limitation, any terms relating to any put
or redemption thereof) identical to the Warrants and shall otherwise be
substantially identical to the Warrants, except for any differences in the
purchase price thereof or the number of shares of Common Stock of the Company
which may be purchased upon exercise thereof. If the Company issues any
additional Note or Warrant pursuant to this Section 19.4(a), such delivery shall
be deemed to constitute a representation of the Company to the holders of Senior
Subordinated Note Obligations and the Permitted Holders that such issuance is
not prohibited under this Article XIX. Until all Senior Subordinated Note
Obligations have been paid in full, the Company shall not issue any instrument,
security or other writing evidencing any part of the Subordinated Indebtedness,
except the additional Notes and additional Warrants that are permitted to be
issued pursuant to this Section 19.4(a). The Permitted Holders shall not assign
or subordinate any part of the Subordinated Indebtedness except in accordance
with this Article XIX.

         (b) The Company may pay the Permitted Holders and the Permitted Holders
may accept and retain (i) payments of accrued interest on the Notes on (but in
no event prior to) the scheduled maturity date (determined without giving effect
to any acceleration of such date

                                       8



pursuant to the Subordinated Agreements or otherwise) at a per annum rate not
exceeding the rate at which interest is stated to accrue under Section 2.4 of
this Agreement in the absence of a default under any of the Subordinated
Agreements, unless at the time of such proposed payment or immediately after
giving effect thereto, there shall exist any Event of Default under the Senior
Subordinated Loan Agreement (as defined therein), (ii) payments of principal
under the Notes on (but in no event prior to) the scheduled maturity date
(determined without giving effect to any acceleration of such date pursuant to
the Subordinated Agreements or otherwise) in the amounts required to be paid
thereunder on such maturity date, unless at the time of such proposed payment or
immediately after giving effect thereto, there shall exist any Event of Default
under the Senior Subordinated Loan Agreement (as defined therein), (iii) the
redemption of the Notes and/or the repurchase of the Warrants (or any equity
interests of the Company issued to the holder thereof in lieu of, or in
connection with, the exercise of such Warrants) and/or the payment of any
interest or any other obligation under the Subordinated Agreements, the Notes or
the Warrants with (1) proceeds received from LBI Media or any of its
Subsidiaries (in the form of dividends, distributions or loans) so long as the
payment or the making of such dividend, distribution, or loan to the Company by
LBI Media or any of its Subsidiaries is not prohibited by the Senior
Subordinated Loan Agreement or (2) proceeds received by the Company (other than
from LBI Media or any of its Subsidiaries) from the sale of any equity
securities of the Company, and (iv) payments required to be made by the Company
under Section 12.1 of this Agreement for certain fees and expenses (including
legal fees), in each case as and at the times when such reimbursements are due
and payable thereunder. If any holder of Subordinated Indebtedness receives
payment or reimbursement from the Company in accordance with clause (i) or (ii)
of the immediately preceding sentence, such payment shall be deemed to
constitute a representation of the Company to the Senior Subordinated Notes
Trustee and the holders of the Senior Subordinated Notes that no Event of
Default under the Senior Subordinated Loan Agreement exists, and that such
payment is permitted to be paid by the Company under this Article XIX; and the
Permitted Holders shall be entitled to keep and retain such payment unless,
prior to the Clawback Date (as hereinafter defined) the Senior Subordinated
Notes Trustee shall have notified the Company and LBI Media, who shall in turn
notify the Permitted Holders in writing of an Event of Default, in which case
(if such Event of Default in fact existed on the date of such payment) the
Permitted Holders shall forthwith deliver such payment or an amount of cash
equal thereto to the Senior Subordinated Notes Trustee for application in
payment of the Senior Subordinated Note Obligations.

         (c) As used in this Article XIX, the term "Clawback Date" shall mean
(i) with respect to any payment default, 60 days after the occurrence thereof
and (ii) with respect to any other Event of Default, 60 days after the Senior
Subordinated Notes Trustee and holders of the Senior Subordinated Notes knew or,
in the exercise of reasonable diligence, should have known, of such Event of
Default.

         (d) Notwithstanding anything herein or in the Subordinated Agreements
to the contrary, until such time as all Senior Subordinated Note Obligations
have been indefeasibly paid in full in cash, (i) the Company will not make, and
the Permitted Holders will not demand, accept or receive, any payments of cash
under the Subordinated Agreements (including, without limitation, the Notes or
the Warrants (including amounts in respect of a put or repurchase of the
Warrants)) or otherwise in respect of the Subordinated Indebtedness, except as
expressly permitted by Section 19.4(b), and (ii) the Company will not make, and
the Permitted Holders

                                       9



will not demand, accept or receive any payment of any other assets of any kind
under the Subordinated Agreements or otherwise in respect of the Subordinated
Indebtedness, except for the additional Notes and Warrants issued in accordance
with Section 19.4(a).

         Section 19.5  Agreement to Hold in Trust; Defense to Enforcement. If
any holder of Subordinated Indebtedness shall receive any payment on account of
the Subordinated Indebtedness in violation of this Article XIX, it shall, after
Senior Credit Satisfaction, hold such payment in trust for the benefit of the
holder or holders of the Senior Subordinated Note Obligations and pay it over to
the Senior Subordinated Notes Trustee for application in payment of the Senior
Subordinated Note Obligations. If any holder of Subordinated Indebtedness, in
contravention of the terms of this Article XIX, shall commence, prosecute or
participate in any suit, action or proceeding against the Company, then the
Company may interpose as a defense or plea the making of this Article XIX and
the Senior Subordinated Notes Trustee may intervene and interpose such defense
or plea in its name or in the name of the Company. If any holder of Subordinated
Indebtedness, in contravention of the terms of this Article XIX, shall attempt
to collect any of the Subordinated Indebtedness or enforce any of the
Subordinated Agreements, the Notes or the Warrants, then the Senior Subordinated
Notes Trustee or the Company may, by virtue of this Article XIX, restrain the
enforcement thereof in the name of the Senior Subordinated Notes Trustee and
holders of the Senior Subordinated Note Obligations or in the name of the
Company. If any holder of Subordinated Indebtedness, in contravention of this
Article XIX, obtains any cash or assets of the Company, LBI Media or any of its
direct or indirect subsidiaries as a result of any administrative, legal or
equitable actions, or otherwise, after Senior Credit Satisfaction, such holder
agrees forthwith to pay, deliver and assign to the Senior Subordinated Notes
Trustee, for the benefit of the holders of Senior Subordinated Note Obligations
and the Senior Subordinated Notes Trustee, with appropriate endorsements, any
such cash for application to the Senior Subordinated Note Obligations and any
other assets as collateral for the Senior Subordinated Note Obligations.

         Section 19.6  No Security to the Permitted Holders. The Company shall
not grant, and shall not permit any of its direct or indirect subsidiaries to
grant, and no Permitted Holder shall accept, any security of any nature in
property, real or personal, of the Company or any of its direct or indirect
subsidiaries to secure Subordinated Indebtedness. Any security interest granted
in violation of the terms of this Article XIX shall be null and void and of no
force and effect against the holders of the Senior Subordinated Note
Obligations.

         Section 19.7  Limit on Right of Action.

         (a) The Permitted Holders agree for the benefit of the holders of the
Senior Subordinated Note Obligations that so long as any Senior Subordinated
Notes or any other part of the Senior Subordinated Note Obligations remains
outstanding, but subject to Section 19.4, the Permitted Holders will not,
directly or indirectly, take any action to accelerate or demand payment by the
Company of the Subordinated Indebtedness (including any put of the Warrants
pursuant to the Warrant Agreement), to exercise any of its remedies in respect
of the Subordinated Indebtedness (including any requirement to change the
composition of the Board of Directors of the Company or to cause a "Sale of the
Company" (as defined in the Voting and Co-Sale Agreement) pursuant to the Voting
and Co-Sale Agreement), whether pursuant to any Subordinated Agreement, the
Notes, the Warrants or otherwise, or in respect of any guarantee of

                                       10



payment thereof, to initiate any litigation against the Company or any of its
direct or indirect subsidiaries or to foreclose or otherwise realize on any
security given by the Company or any other person to secure the Subordinated
Indebtedness prior to the earlier of (i) a Reorganization of the Company or (ii)
180 days after the receipt by the Senior Subordinated Notes Trustee of written
notice of intent to take any such action by the percentage of the Permitted
Holders required to authorize such action under this Agreement, provided that
(x) such notice is given during the continuance of a Material Event of Default
caused by the failure of the Company to make a payment permitted to be made
under clause (i) or (ii) of Section 19.4(b) hereof and (y) any proceeds received
or recoverable by the Permitted Holders in connection therewith shall be subject
to the other provisions of this Article XIX. Notwithstanding anything herein to
the contrary, the Permitted Holders will neither commence nor join with any
other creditor or creditors of the Company or any of its direct or indirect
subsidiaries in commencing any bankruptcy, reorganization or insolvency
proceedings against the Company or any such subsidiary.

         Notwithstanding the foregoing, in the event of a material breach by the
Company of any material covenant contained in this Agreement, the Warrant
Agreement or Voting and Co-Sale Agreement, the Permitted Holders may seek
injunctive relief and state a claim for damages; provided, however, that the
Permitted Holders shall not be entitled to collect or receive any monetary
damages in respect of such claim from the Company or any of its subsidiaries in
connection with such material breach except in accordance with the first
sentence of this Section 19.7.

         (b) The Permitted Holders shall not amend or permit amendment of the
terms of any instrument or agreement evidencing any Subordinated Indebtedness
(including, without limitation, the Subordinated Agreements, the Notes or the
Warrants), the effect of which is to (i) increase principal, interest, fees,
reimbursements or other amounts payable with respect thereto or create any
additional payment obligations thereunder, (ii) accelerate any scheduled or
otherwise required payments of principal, interest, fees, reimbursements or
other amounts, (iii) cause any covenants or other agreements to be more
restrictive upon, or burdensome to, the Company and its Subsidiaries, (iv) alter
any event of default or put provisions contained in the Subordinated Agreements,
the Notes or the Warrants (other than any alterations in favor of the Company
that are permitted under the Senior Subordinated Loan Agreement) or (v) make any
other change which materially adversely affect the interests of the holders of
Senior Subordinated Note Obligations, without the prior written consent of the
Senior Subordinated Notes Trustee.

         Section 19.8 Senior Loan Agreement. Reference is made herein to the
Amended and Restated Credit Agreement dated as of July 9, 2002 by and among LBI
Media, the guarantors party thereto and the lenders party thereto (together with
successors and assignees and lenders party to any other Senior Loan Agreement,
the "Senior Credit Parties") (such Amended and Restated Credit Agreement, and
any amendment, restatement, renewal, refunding, refinancing or replacement
thereto, including, without limitation, any such change to the Amended and
Restated Credit Agreement which increases the amount of indebtedness thereunder
(the "Senior Loan Agreement"). Notwithstanding anything herein to the contrary,
to the extent the rights of holders of Senior Subordinated Note Obligations or
obligations of the Permitted Holders hereunder directly conflict with the rights
of the Senior Credit Parties, the Senior Credit Parties

                                       11



shall have priority over and supersede the obligations hereunder; provided,
that, upon satisfaction of such conflicting rights and/or obligations under the
Senior Loan Agreement and the intercreditor agreement relating thereto, the
holders of Senior Subordinated Note Obligations may promptly exercise their
rights, and the Permitted Holders shall promptly satisfy their obligations under
this Article XIX.

         Section 19.9  Rights of Holders of Senior Subordinated Notes to Amend
Senior Subordinated Loan Agreement and Discontinue Senior Subordinated Note
Obligations. The holders of Senior Subordinated Note Obligations may, in their
sole discretion, and without notice to the Permitted Holders, modify, amend,
waive or release any of the terms of the Senior Subordinated Loan Agreement, or
any other document or agreement at any time executed by LBI Media or any of the
Senior Subordinated Notes Guarantors or any other person in connection with the
Senior Subordinated Note Obligations and may exercise or refrain from exercising
any powers, remedies or rights which any such holder may have thereunder, and
such modification, amendment, waiver, release, exercise or failure to exercise
shall not affect any of such holders' rights under this Article XIX. Each
Permitted Holder hereby agrees that the holders of Senior Subordinated Note
Obligations may from time to time in their sole discretion amend the Senior
Subordinated Loan Agreement and any other instrument or agreement evidencing the
Senior Subordinated Note Obligations, grant extensions of time of payment or
performance and make compromises and settlements with LBI Media and the Senior
Subordinated Notes Guarantors and other creditors of LBI Media and the Senior
Subordinated Notes Guarantors without affecting the agreements of the Permitted
Holders and the Company hereunder. If at any time hereafter, the holders of
Senior Subordinated Note Obligations shall, in their sole discretion, determine
to discontinue the extension of credit to LBI Media or demand payment of the
Senior Subordinated Note Obligations, it may do so without notice to the
Permitted Holders. The failure on the part of the holders of Senior Subordinated
Note Obligations to insist on the strict performance of any term, condition or
other provision of this Article XIX or any term, condition or other provision
contained in the Senior Subordinated Loan Agreement or any other document or
instrument evidencing the Senior Subordinated Note Obligations, or to exercise
any right or remedy hereunder or thereunder, shall not affect or alter this
Article XIX, the Senior Subordinated Loan Agreement or any other such document
or instrument, and each and every term, condition and other provision of this
Article XIX, the Senior Subordinated Notes, and the Senior Subordinated Loan
Agreement shall, in such event, continue in full force and effect and shall be
operative with respect to any other then existing or subsequent default or event
of default in connection therewith.

         Section 19.10 Third Party Beneficiaries. The holders of Senior
Subordinated Note Obligations and their respective successors and assigns and
the Senior Subordinated Notes Trustee are third party beneficiaries of this
Article XIX.

         Section 19.11 No Transfer. A Permitted Holder may sell or transfer any
of the Subordinated Indebtedness, including, without limitation, the Notes and
the Warrants, to an Eligible Fund (as hereinafter defined) of such Permitted
Holder, provided that no such sale or other transfer of any Subordinated
Indebtedness shall be effective unless and until (i) the proposed transfer is in
accordance with Article XI, (ii) the proposed transferee shall agree in writing
pursuant to an agreement in form and substance acceptable to the Senior
Subordinated Notes Trustee to become a party hereto, and (iii) such sale or
other transfer is effected in

                                       12



accordance with the Subordinated Agreements. As used herein, "Eligible Fund"
means, with respect to any Permitted Holder that is a fund that invests in
commercial loans or subordinated indebtedness, any other fund that invests in
commercial loans or subordinated indebtedness and is managed by the same
investment manager as such Permitted Holder.

         Section 19.12 Amendment of Article XIX. No amendment shall be made to
this Article XIX which would materially adversely affect the interests of the
holders of Senior Subordinated Note Obligations, without the prior written
consent of the Senior Subordinated Notes Trustee."

         1.7 Modification of Schedules

         A. Schedule 3.4(b) to the Purchase Agreement is hereby amended by
deleting the reference to "April 1, 1999" with respect to the Ortiz Employment
Agreement contained therein and substituting "September 1, 1999" therefor.

         B. Schedule 3.7 to the Purchase Agreement is hereby amended by deleting
the existing schedule in its entirety and substituting the Schedule 3.7 attached
to this Amendment therefor.

         C. Schedule 7.6 to the Purchase Agreement is hereby amended by (i)
adding at the end of each of items 4 and 5 thereof the following: "All amounts
owing thereunder may be paid in full on or about July 9, 2002," and (ii) adding
at the end of such Schedule 7.6 the following:

         "7. Loans by Company or its Subsidiaries (on such terms as determined
         by the sole and absolute discretion of Company or its Subsidiaries) to
         Jose Liberman and/or Lenard Liberman (and their respective Family
         Members) in an aggregate amount not exceeding $5,000,000; provided that
         no cancellation, foregiveness or transfer of any such loans shall
         increase the aggregate amount of loans otherwise permitted hereunder.

         8. The making of any loans described in Section 7.5(ii) (the terms of
         which shall be determined in the sole discretion of the Company) and
         cancellation, foregiveness or transfer of such loan."

         1.8 Substitution of Exhibit

         The Purchase Agreement is hereby amended by adding thereto a new
Exhibit A in the form of Annex A to this Amendment.

         1.9 Amendment of Recitals

         The first paragraph of the Purchase Agreement is hereby amended by
deleting the parenthetical "(the "Agreement")" contained therein.

                                       13



Section 2.   AMENDMENTS TO THE WARRANT AGREEMENT

         2.1 Amendment to Section 7: Interpretation of this Agreement

         A.  The definition of "Consolidated EBITDA" in Section 7.1 of the
Warrant Agreement is hereby amended by deleting the reference therein to "Net
Cash Proceeds" and substituting "Net Cash Payments" therefor.

         B.  The definition of "Corporate Overhead Expense" in Section 7.1 of
the Warrant Agreement is hereby amended by adding at the end thereof the
following: "(it being understood that loans by Company or any of its
Subsidiaries to Lenard or Jose Liberman shall not constitute compensation to
Lenard or Jose Liberman)."

         C.  The definition of "Expiration Date" in Section 7.1 of the Warrant
Agreement is hereby amended by deleting the reference to "March 20, 2011"
contained therein and substituting "January 9, 2015" therefor.

         2.2 Substitution of Exhibit

         The Warrant Agreement is hereby amended by adding thereto a new Exhibit
A in the form of Annex B to this Amendment.

Section 3.   AMENDMENTS TO THE SENIOR LENDERS INTERCREDITOR AGREEMENT

         3.1 Amendment to Section 1: Certain Definitions

         Section 1.1 of the Senior Lenders Intercreditor Agreement is hereby
amended by deleting the phrase "as amended, restated" appearing in the seventh
line thereof and substituting therefor the phrase "as amended and restated by
the Amended and Restated Credit Agreement dated as of July 9, 2002 among LBI
Media, Inc. (formerly known as LBI Holdings II, Inc.), as the borrower, the
guarantors party thereto, and Fleet National Bank, as administrative agent,
General Electric Capital Corporation and U.S. Bank, N.A., as co-syndication
agents, and CIT Lending Services Corporation and SunTrust Bank, as
co-documentation agents, and the other lenders party thereto from time to time,
as further amended, amended and restated,".

         3.2 Amendments to Section 3: Terms of Subordination

         Section 3.6(b) of the Senior Lenders Intercreditor Agreement is hereby
amended by (i) deleting each of the two references to "September 20, 2009"
contained therein and substituting therefor in each instance the phrase "July 9,
2013", and (ii) deleting each of the two references to "(as in effect on the
date hereof)" appearing in clauses (i) and (ii) thereof and substituting
therefor in each instance the phrase "(as in effect on July 9, 2002)".

                                       14



         3.3 Amendment to Section 8: Limit on Right of Action

         Section 8(a) of the Senior Lenders Intercreditor Agreement is hereby
amended by adding at the end thereof the following:

         "Notwithstanding the foregoing, in the event of a material breach by
         the Company of (i) any covenant set forth in the following sections of
         the Subordinated Investment Agreement, namely Section 2.4(h), the
         second and third sentences of Section 7.1, Section 7.5, Section 7.6,
         Section 7.7, Sections 8.1 through 8.8 or (ii) any material covenant
         contained in the Warrant Agreement or Voting and Co-Sale Agreement, the
         Subordinated Creditors may seek injunctive relief and state a claim for
         damages; provided, however, that the Subordinated Creditors shall not
         be entitled to collect or receive any monetary damages in respect of
         such claim from the Company or any of its subsidiaries in connection
         with such material breach except in accordance with the first sentence
         of this Section 8(a). Prior to seeking any such injunctive relief or
         stating any such claims, the Subordinated Creditors shall first deliver
         notice thereof to the Administrative Agent at least thirty (30) days,
         or shorter period if required by reason of a limitation period, filing
         requirement or like matter, prior to taking any such action."

Section 4.   AMENDMENT OF THE SENIOR SUBORDINATED LENDERS INTERCREDITOR
AGREEMENT

         A.  The parties acknowledge and understand that upon the payment of
amounts set forth in Section 1.1B of that certain Agreement Relating to Note
Purchase Agreement dated as of June 28, 2002 by and among LBI Intermediate
Holdings, Inc., the several purchasers listed on the signature pages thereof,
and Oaktree, which payment shall be made on or prior to the Amendment Effective
Date, the outstanding amounts owed by the Company under the existing Senior
Subordinated Loan Agreement with Oaktree and related notes shall be repaid in
full.

         B.  Section 1.1 of the existing Senior Subordinated Lenders
Intercreditor Agreement among the Company, the Purchasers, and Oaktree is hereby
amended by deleting the first sentence contained therein and substituting the
following therefor:

         "Reference is made herein to the Notes Purchase Agreement of even date
         herewith, by and among LBI Intermediate Holdings, Inc. (the
         "Borrower"), the Purchasers party thereto, and the Agent (as amended
         and supplemented from time to time, the "Notes Purchase Agreement"; it
         being understood by the parties hereto that the term Note Purchase
         Agreement shall not include any agreement entered into to refund,
         refinance, or otherwise replace amounts owed under the Notes Purchase
         Agreement and in no event shall include the Indenture, dated as of July
         9, 2002, among LBI Media, Inc., as the issuer, the guarantors party
         thereto and U.S. Bank, N.A., as the trustee or any documents related
         thereto)."

Section 5.   AMENDMENT OF THE INVESTOR SUBORDINATION AGREEMENT

         Section 1 of the Investor Subordination Agreement is hereby amended by
inserting the phrase "and restated by the Amended and Restated Credit Agreement
dated as of July 9, 2002 among LBI Media, Inc. (formerly known as LBI Holdings
II, Inc.), as the borrower, the

                                       15



guarantors party thereto, and Fleet National Bank, as administrative agent,
General Electric Capital Corporation and U.S. Bank, N.A., as co-syndication
agents, and CIT Lending Services Corporation and SunTrust Bank, as
co-documentation agents, and the other lenders party thereto from time to time,
and as further amended" into the second parenthetical contained in the first
sentence and immediately following the phrase "as amended."

Section 6.   EXCHANGE OF NOTES AND WARRANTS

         On or after the Amendment Effective Date and upon surrender of each
existing Note and existing Warrant held by each Purchaser, the Company agrees to
execute and deliver to such Purchaser a new Note in the form of Annex A to this
Amendment and a new Warrant in the form of Annex B to this Amendment, in each
case with appropriate insertions reflecting the same amounts as the existing
Note and Warrant. In such exchange, the parties agree that no commission or
other remuneration will be paid or given directly or indirectly for soliciting
such exchange.

         On and after the Amendment Effective Date, any existing Notes and
existing Warrants outstanding and not exchanged pursuant to this Section 6 shall
be deemed to have such terms and conditions as set forth in the new form of Note
set forth in Annex A and the new form of Warrant set forth in Annex B.

Section 7.   CONDITIONS TO EFFECTIVENESS

         Sections 1, 2, 3, 4, 5, 6, and 9F of this Amendment shall become
effective only upon the satisfaction of all of the following conditions
precedent (the date of satisfaction of such conditions being referred to herein
as the "Amendment Effective Date"):

         A. On or before the Amendment Effective Date, each of Company, Fleet,
Oaktree, and Majority Purchasers shall have delivered to the Company and to Alta
Communications VIII, L.P., as agent for each of the Purchasers, executed copies
of this Amendment.

         B. LBI Media shall have simultaneously issued the Senior Subordinated
Notes under the Senior Subordinated Loan Agreement (as defined in Section 1.1C
hereof) and the new Senior Loan Agreement dated as of July 9, 2002 shall have
become effective.

         C. The Purchasers shall have received an opinion of O'Melveny & Myers
LLP, counsel to the Company, substantially in the form attached as Annex C.

         D. The Company shall have received an opinion of Edwards & Angell, LLP,
counsel to Alta Communications VIII, L.P. and certain affiliates thereof,
substantially in the form attached as Annex D.

         E. The new Senior Loan Agreement and related documents and the new
Senior Subordinated Loan Agreement and related documents shall be in form and
substance reasonably satisfactory to Majority Purchasers.

                                       16



Section 8.   REPRESENTATIONS AND WARRANTIES

         A.  By All Parties. In order to induce each of the other parties hereto
to enter into this Amendment, each party hereto represents and warrants to each
of the other parties hereto that the following statements are true, correct and
complete:

              (i)   Corporate Power and Authority. Such party has all requisite
         corporate or partnership power and authority to enter into this
         Amendment and to carry out the transactions contemplated by, and
         perform its obligations under, this Amendment and the Amended
         Agreements.

              (ii)  Authorization of Agreements. The execution and delivery of
         this Amendment and the performance of this Amendment and the Amended
         Agreements have been duly authorized by all necessary corporate or
         partnership action on the part of such party.

              (iii) No Conflict. The execution and delivery by such party of
         this Amendment and the performance by such party of this Amendment and
         the Amended Agreements do not and will not (i) violate any provision
         of any law or any governmental rule or regulation applicable to such
         party, the articles and bylaws or the partnership agreement or any
         other organizational documents of such party, or any order, judgment
         or decree of any court or other agency of the government of the United
         States binding on such party, (ii) conflict with, result in a breach
         of or constitute (with due notice or lapse of time or both) a default
         under any material contractual obligation of such party, (iii) result
         in or require the creation or imposition of any Lien upon any of the
         properties or assets of such party, or (iv) require any approval of
         stockholders or any approval or consent of any Person under any
         contractual obligation of such party, except where applicable
         approvals or consents have been obtained.

              (iv)  Governmental Consents. The execution and delivery by such
          party of this Amendment and the performance by such party of this
          Amendment and the Amended Agreements do not and will not require any
          registration with, consent or approval of, or notice to, or other
          action to, with or by, any U.S. federal, state, provincial or other
          governmental authority or regulatory body.

              (v)   Binding Obligation. This Amendment has been duly executed
         and delivered by such party and this Amendment and the Amended
         Agreements are the legally valid and binding obligations of such party
         enforceable against such party in accordance with their respective
         terms, except as may be limited by bankruptcy, insolvency,
         reorganization, moratorium or similar laws relating to or limiting
         creditors' rights generally or by equitable principles relating to
         enforceability.

         B. By the Company. In order to induce the Purchasers to enter into this
Amendment, the Company represents and warrants to each of the Purchasers that
the following statements are true, correct and complete:

              (i)   The representations and warranties of the Company and its
         Subsidiaries made in Sections 3.3, 3.4, and 3.7 of the Purchase
         Agreement as of the Amendment

                                       17



         Effectiveness Date (which representations and warranties are subject to
         all of the qualifications, limitations and restrictions contained in
         the Purchase Agreement and any revised schedule attached to this
         Amendment); and

              (ii)  The representations and warranties of the Company and its
         Subsidiaries made in the amended and restated Senior Loan Agreement as
         of the Amendment Effectiveness Date (which representations and
         warranties are subject to all of the qualifications, limitations and
         restrictions contained in the amended and restated Senior Loan
         Agreement);

are hereby incorporated herein by reference and each such representation and
warranty is restated and re-made by the Company to the Purchasers as of the date
hereof and will be deemed to be representations and warranties made by the
Company to the Purchasers under this Amendment and relied upon by the Purchasers
in entering into this Amendment.

         C. By the Purchasers. In order to induce each of the other parties
hereto to enter into this Amendment, each Purchaser hereto represents and
warrants to each of the other parties hereto that the following statements are
true, correct and complete: (i) the execution by the Majority Purchasers of this
Amendment constitutes the requisite approval of the Purchasers necessary to
amend the Amended Agreements as contemplated by this Amendment, including but
not limited to approval as "Majority Purchasers" under the Purchase Agreement
and the "Required Holders" under the Warrant Agreement; (ii) with such approval,
each Purchaser is bound by this Amendment, whether or not such Purchaser is a
party hereto; and (iii) collectively, Alta Communications VIII, L.P., Alta-Comm
VIII S By S, LLC, Alta Communications VIII-B, L.P., and Alta VIII Associates,
LLC constitute "Majority Purchasers" under the Purchase Agreement and "Required
Holders" under the Warrant Agreement.

Section 9.    MISCELLANEOUS

         A. Headings. Section and subsection headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.

         B. Applicable Law. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE COMMONWEALTH OF MASSACHUSETTS, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES.

         C. Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.

         D. Expenses. The Company acknowledges that all costs, fees and expenses
as described in Section 12.1 of the Purchase Agreement incurred by the
Purchasers and one counsel for the

                                       18



Purchasers with respect to this Amendment and the documents and transactions
contemplated hereby shall be for the account of the Company. The Company shall
concurrently with the execution and delivery of this Amendment pay all accrued
and unpaid fees of Edwards & Angell, LLP, counsel to the Purchasers, for which
invoices shall have been received by Company on or prior to the Amendment
Effective Date.

         E. Confirmation of Tax Allocation and Budgeted Plan. The Company hereby
ratifies and confirms that this Amendment shall not amend or otherwise alter the
allocation of issue price of $29,500,000 to the Notes and $500,000 to the
Warrants as set forth in the original Purchase Agreement. The Company further
ratifies and confirms its obligation under Section 4.1(d) of the Warrant
Agreement to provide to Purchasers a breakdown of the Budgeted Plan (as defined
in the Warrant Agreement) on a quarter-annual basis, reasonably acceptable to
Required Holders (as defined in the Warrant Agreement).

         F. Consent to Amended Agreements. Fleet hereby consents to this
Amendment and the amendments and modifications to the Amended Agreements as
effected by this Amendment and the transactions described in Section 6 hereof.

         G. Consent to Registration Rights. With reference to Section 7.6(B) of
the Purchase Agreement, the Purchasers hereby consent to the grant of
registration rights to the holders of the Senior Subordinated Note Obligations
as contemplated by the Senior Subordinated Loan Agreement (as defined in Section
1.1B).

         H. Ratification and Confirmation. Except as specifically amended by
this Amendment and the Amendment and Confirmation of Subordination Agreements
dated as of the date hereof by and among the Purchasers, the Company, and Fleet,
(i) the Purchase Agreement, (ii) the Warrant Agreement, (iii) the Senior Lenders
Intercreditor Agreement, (iv) the existing Senior Subordinated Lenders
Intercreditor Agreement with Oaktree, and (v) the Investor Subordination
Agreement shall remain in full force and effect and are hereby ratified and
confirmed.

     [Remainder of page intentionally left blank; signature pages to follow]

                                       19



         IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the day and year first above written.

                                    COMPANY:

                                    LBI HOLDINGS I, INC.

                                    By: /s/ Lenard Liberman
                                       -----------------------------------------
                                    Name: Lenard Liberman
                                         ---------------------------------------
                                    Title: Executive Vice President
                                          --------------------------------------

                                    PURCHASERS:

                                    ALTA COMMUNICATIONS VIII, L.P.

                                    By:  Alta Communications VIII Managers, LLC,
                                             its General Partner

                                    By: /s/ Eileen McCarthy
                                       -----------------------------------------
                                    Name: Eileen McCarthy
                                         ---------------------------------------
                                    Title: Member
                                          --------------------------------------



                                    ALTA-COMM VIII S BY S, LLC

                                    By: /s/ Eileen McCarthy
                                       -----------------------------------------
                                    Name: Eileen McCarthy
                                         ---------------------------------------
                                    Title: Member
                                          --------------------------------------

                                    ALTA COMMUNICATIONS VIII-B, L.P.

                                    By:  Alta Communications VIII Managers, LLC,
                                             its General Partner

                                    By: /s/ Eileen McCarthy
                                       -----------------------------------------
                                    Name: Eileen McCarthy
                                         ---------------------------------------
                                    Title: Member
                                          --------------------------------------

                                       S-1



                             ALTA VIII ASSOCIATES, LLC

                             By:  Alta Communications, Inc.

                             By: /s/ Eileen McCarthy
                                ----------------------------------------------
                             Name: Eileen McCarthy
                                  --------------------------------------------
                             Title: Member
                                   -------------------------------------------

                             CALIFORNIA STATE TEACHERS'
                             RETIREMENT SYSTEM

                             By: /s/ Christopher J. Ailman
                                ----------------------------------------------
                             Name: Christopher J. Ailman
                                  --------------------------------------------
                             Title: Chief Investment Officer
                                   -------------------------------------------


                             BANCBOSTON INVESTMENTS INC.

                             By: /s/ Lars A. Swanson
                                ----------------------------------------------
                             Name: Lars A. Swanson
                                  --------------------------------------------
                             Title: Director
                                   -------------------------------------------

                             UNIONBANCAL EQUITIES, INC.

                             By: /s/ J. Kevin Sampson      /s/ David Bonrouhi
                                ----------------------------------------------
                             Name: J. Kevin Sampson          David Bonrouhi
                                  --------------------------------------------
                             Title: Vice President           Vice President
                                   -------------------------------------------

                                      S-2



                          For purposes of Sections 4, 7, 8A and 9 only:

                          OAKTREE CAPITAL MANAGEMENT, LLC,
                          individually and as agent for the Holders under that
                          certain Note Purchase Agreement

                          By: /s/ Kenneth Liang
                             ---------------------------------------------------
                          Name: Kenneth Liang
                               -------------------------------------------------
                          Title: Managing Director
                                ------------------------------------------------


                          By: /s/ Richard Ting
                             ---------------------------------------------------
                          Name: Richard Ting
                               -------------------------------------------------
                          Title: Vice President, Legal
                                ------------------------------------------------




                          For purposes of Sections 3, 5, 7, 8A and 9 only:

                          FLEET NATIONAL BANK, individually and as agent for the
                          Senior Lenders

                          By: /s/ Garnet Komjathy
                             ---------------------------------------------------
                          Name:  Garnet Komjathy
                               -------------------------------------------------
                          Title: Director
                                ------------------------------------------------

                                      S-3



                                 SCHEDULE 3.4(a)
       (to the Securities Purchase Agreement, as revised on July 9, 2002)


                                 CAPITALIZATION

Jose Liberman - 100 shares of Common Stock.

Lenard Liberman - 100 shares of Common Stock.



                                 SCHEDULE 3.4(b)
       (to the Securities Purchase Agreement, as revised on July 9, 2002)


                                  EQUITY RIGHTS

1.       Pursuant to a Stock Purchase Agreement dated as of January 6, 1998,
         between Jose Liberman, Esther Liberman, Lenard D. Liberman
         (collectively, the "Shareholders") and LBI Holdings I, Inc. (the
         "Company"), upon the death of any Shareholder, the surviving
         Shareholders and the Company will have an option to purchase the
         deceased Shareholder's stock. The Shareholders are subject to certain
         restrictions on pledging, transferring, hypothecating, dividing,
         assigning or otherwise alienating their stock in the Company.

2.       Pursuant to that certain Employment Agreement dated September 1, 1999,
         by and between LBI Holdings I, Inc. and Xavier Ortiz, Mr. Ortiz is
         entitled under an incentive plan to receive payment in either cash or
         Common Stock of LBI Holdings I, Inc. if, among other things, stock of
         LBI Holdings I, Inc. is traded on the New York Stock Exchange or the
         National Association of Securities Dealers Automated Quotation System.

3.       Pursuant to that certain Employment Agreement dated November 15, 1998,
         by and between LBI Holdings I, Inc. and Andrew F. Mars, Mr. Mars is
         entitled under an incentive plan to receive payment in either cash or
         Common Stock of LBI Holdings I, Inc. if, among other things, stock of
         LBI Holdings I, Inc. is traded on the New York Stock Exchange or the
         National Association of Securities Dealers Automated Quotation System.

4.       Pursuant to that certain Employment Agreement dated December 1, 1999,
         by and between Liberman Broadcasting Inc. and Eduardo Leon, Mr. Leon is
         entitled under an incentive plan to receive payment in either cash or
         Common Stock of Liberman Broadcasting Inc. if, among other things,
         stock of Liberman Broadcasting Inc. is capable of being immediately
         traded on the New York Stock Exchange or the National Association of
         Securities Dealers Automated Quotation System.



                                  SCHEDULE 3.7
       (to the Securities Purchase Agreement, as revised on July 9, 2002)


                             AFFILIATE TRANSACTIONS

1.       Regarding the Empire Burbank Studios located at 1845 Empire Blvd.,
         Burbank, California, the following leases are in effect:

         (a)      Lease dated as of July 15, 1999 by and between Empire Burbank
                  Studios, Inc., a California corporation ("Empire"), as
                  landlord, and Liberman Broadcasting, Inc., a California
                  corporation ("Liberman Broadcasting"), as tenant

         (b)      Sublease Agreement dated as of July 15, 1999 by and between
                  Liberman Broadcasting, as sublandlord and Empire, as subtenant

2.       Spanish Media Rep Team is a wholly owned subsidiary of Jose Liberman
         and Lenard Liberman and it receives a 15% commission from Liberman
         Broadcasting Inc. for any advertising time is sells. The agreement is
         not memorialized in writing.

3.       LBI Holdings I, Inc. will make capital contributions to LBI
         Intermediate Holdings, Inc., and LBI Intermediate Holdings, Inc. will
         make certain dividend payments to LBI Holdings I, Inc. on the Effective
         Date.

4.       Third Amended and Restated Demand Promissory Note dated March 20, 2001,
         by Liberman Broadcasting, Inc. in favor of Jose Liberman with
         accumulated principal and interest equal to $1,667,193 as of March 31,
         2002. The remaining balance of this promissory note will be paid on or
         about July 9, 2002.

5.       Third Amended and Restated Demand Promissory Note dated March 20, 2001,
         by Liberman Broadcasting, Inc. in favor of Lenard Liberman with
         accumulated principal and interest equal to $194,414 as of March 31,
         2002. The remaining balance of this promissory note will be paid on or
         about July 9, 2002.

6.       As of March 31, 2002, LBI Media, Inc. (formerly known as LBI Holdings
         II, Inc.) had outstanding loans of $243,095 and $146,950 to Jose and
         Lenard Liberman, respectively, which loans were made in December 2001.

7.       On or about July 9, 2002, LBI Media, Inc. made a loan of $1,916,563 to
         Lenard Liberman. The loan will mature in seven years and bear interest
         at the applicable federal rate.

8.       Those transactions and payments described in Section 7.6(a) through (h)
         of the Senior Loan Agreement or otherwise permitted by the Senior Loan
         Agreement.

9.       Item #1 of Schedule 3.4(b) is incorporated herein by reference.



                              ANNEX A TO AMENDMENT

                                    EXHIBIT A

         THIS INSTRUMENT IS SUBJECT TO A SUBORDINATION AND INTERCREDITOR
AGREEMENT DATED AS OF MARCH 20, 2001 BY AND AMONG LBI HOLDINGS I, INC., A
CALIFORNIA CORPORATION, FLEET NATIONAL BANK, INDIVIDUALLY AND AS ADMINISTRATIVE
AGENT FOR CERTAIN LENDERS, AND CERTAIN OTHER PARTIES, AS AMENDED FROM TIME TO
TIME. BY ITS ACCEPTANCE OF THIS INSTRUMENT, THE HOLDER HEREOF AGREES TO BE BOUND
BY THE PROVISIONS OF SUCH SUBORDINATION AND INTERCREDITOR AGREEMENT TO THE SAME
EXTENT THAT THE SUBORDINATED CREDITORS (AS DEFINED THEREIN) ARE BOUND.

         THIS INSTRUMENT IS SUBJECT TO THE SUBORDINATION AND INTERCREDITOR
PROVISIONS CONTAINED IN ARTICLE XIX OF THE SECURITIES PURCHASE AGREEMENT
DESCRIBED BELOW. BY ITS ACCEPTANCE OF THIS INSTRUMENT, THE HOLDER HEREOF AGREES
TO BE BOUND BY SUCH SUBORDINATION AND INTERCREDITOR PROVISIONS TO THE SAME
EXTENT THAT THE PERMITTED HOLDERS (AS DEFINED THEREIN) ARE BOUND.

         THE SECURITIES REPRESENTED BY THIS NOTE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
APPLICABLE STATE LAWS. THESE SECURITIES MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS THE REGISTRATION PROVISIONS OF SAID ACT AND LAWS HAVE BEEN
COMPLIED WITH OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED. FURTHERMORE,
THESE SECURITIES MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS
THE COMPANY HAS RECEIVED AN OPINION OF TAX COUNSEL REASONABLY ACCEPTABLE TO THE
COMPANY IN FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO THE COMPANY TO THE EFFECT
THAT SUCH SALE, TRANSFER, PLEDGE OR HYPOTHECATION WILL NOT TERMINATE THE
COMPANY'S CLASSIFICATION AS AN S CORPORATION.

                       JUNIOR SUBORDINATED PROMISSORY NOTE

[$___________]                                       Dated as of March 20, 2001

         FOR VALUE RECEIVED, the undersigned LBI HOLDINGS I, INC., a California
corporation (the "Borrower"), hereby unconditionally promises to pay to the
order of [________________] (hereinafter with any subsequent holder referred to
as "Lender"), having its principal place of business at [________________], on
the Maturity Date (as hereinafter defined), the principal amount of [_________
Dollars ($_________)] together with interest thereon, at the rates provided for
in the Securities Purchase Agreement (hereafter described).

         This Note is one of the "Notes" referred to in, and is entitled to all
the benefits of that certain Securities Purchase Agreement dated as of the date
hereof, by and among Borrower,

                                      A-1



Lender and the other parties signatories thereto (as may be amended from time to
time, the "Securities Purchase Agreement"). All capitalized terms used herein
and not otherwise defined shall have the meanings given to such terms in the
Securities Purchase Agreement.

         Interest on the principal amount outstanding hereunder shall accrue and
shall be paid as provided in the Securities Purchase Agreement.

         The outstanding principal amount of this Note, together with all
accrued interest thereon, shall be due and payable, without setoff, deduction or
counterclaim, on July 9, 2013, or on such earlier date as provided in the
Securities Purchase Agreement (the "Maturity Date").

         Borrower may prepay the outstanding principal amount and accrued
interest hereunder, in full or in part, upon the terms and conditions set forth
in the Securities Purchase Agreement.

         Payments of principal and interest due hereunder shall be made by
Borrower in lawful money of the United States of America and immediately
available funds to Lender at its address set forth in the first paragraph of
this Note, or at such other place as Lender may designate to the Borrower in
writing, in accordance with the Securities Purchase Agreement. All payments
hereunder, unless otherwise determined by Lender, shall be applied first to
interest, fees and expenses then due and the balance, if any, to principal.

         In no event shall the undersigned be required to pay any interest or
other fees or charges in excess of the maximum permitted by applicable law. If,
for any circumstances whatsoever, fulfillment of any provisions hereof or of the
Securities Purchase Agreement, at the time performance of such provision shall
be due, shall involve exceeding such amount, then the obligation to be fulfilled
shall automatically be reduced to the limit of such validity, and if from any
circumstance Lender should ever receive as interest an amount which would exceed
such maximum amount, such amount which would be excessive interest shall be
applied to the reduction of the principal balance evidenced hereby and not to
the payment of interest. As used herein, the term "applicable law" shall mean
the law in effect as of the date hereof; provided, however, that in the event
there is a change in the law which results in a higher permissible rate of
interest, then this Note shall be governed by such new law as of its effective
date. This provision shall control every other provision of all agreements
between Borrower and Lender.

         Borrower agrees to pay all costs and expenses (including reasonable
attorneys' fees) incurred by Lender in the collection of this Note and the
enforcement of any agreement or instrument securing this Note.

         Any and all sums at any time due from Lender to Borrower shall at all
times constitute security for this Note and any other obligations of Borrower to
Lender and may be applied or set off by Lender against such obligations whether
or not other collateral is available to Lender.

         Borrower, for itself and its legal representatives, successors and
assigns, hereby expressly waives presentment, dishonor, protest and demand,
diligence, notice of protest of demand and of dishonor, and any other notice
otherwise required to be given under the law in connection with the delivery,
acceptance, performance, default, enforcement or collection of this Note, and
expressly agrees that this Note, or any payment hereunder, may be extended or
subordinated (by forbearance or otherwise) as set forth in the Securities
Purchase Agreement.

                                      A-2



         No delay or omission on the part of Lender in exercising any right
hereunder shall operate as a waiver of such right or of any other right of
Lender nor shall any delay, omission or waiver on any one occasion be deemed a
bar to or waiver of the same or any other right on any future occasion. No
consent or waiver by Lender with respect to any action or failure to act which,
without such consent or waiver, would constitute a breach of any provision of
this Note shall be valid and binding unless in writing and signed by Borrower
and Lender.

         Transfer of this Note is registrable on the Note register of Borrower
upon presentation at the principal office of Borrower accompanies by a written
instrument of transfer in form reasonably satisfactory to Borrower duly executed
by, or on behalf of, the holder hereof; provided any such transferee is also a
Permitted Holder. This Note may also be exchanged at such office for one or more
Notes in any authorized denominations, as requested by the holder, of a like
aggregate unpaid principal amount. Any transfer of this Note shall be subject to
the terms of the Securities Purchase Agreement and any such transferee's
agreement to be bound to the terms of the Securities Purchase Agreement, the
Related Agreements and the Intercreditor Agreements, and by acceptance of this
Note the holder agrees to be bound by the terms of the Securities Purchase
Agreement, the Related Agreements and the Intercreditor Agreements.

         Prior to due presentment for registration of transfer, Borrower and any
agent of Borrower may treat the person in whose name this Note is registered as
the owner hereof for the purpose of receiving payment of principal and interest
as herein provided and for all other purposes.

         This Note shall be governed by and construed in accordance with the
laws of the Commonwealth of Massachusetts without giving effect to any choice or
conflict of law provision or rule that would cause the application of the
domestic substantive laws of any other jurisdiction.

         This Note is subject to certain subordination provisions as set forth
in the Intercreditor Agreements.

         BORROWER HEREBY WAIVES TRIAL BY JURY IN ANY ACTION PERTAINING TO THE
ENFORCEMENT OF THIS NOTE OR ANY AGREEMENT OR INSTRUMENT SECURING THIS NOTE.

         This Note is executed as of the date first set forth above as a sealed
instrument, shall be binding upon the undersigned and its successors and
assigns, and shall inure to the benefit of Lender and its successors and
assigns.

                                          LBI HOLDINGS I, INC.

Witness:

                                          By:___________________________________
______________________________            Name:_________________________________
                                          Title:________________________________

                                       A-3




                              ANNEX B TO AMENDMENT

                                    EXHIBIT A

                          [FORM OF WARRANT CERTIFICATE]

         THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES
ISSUABLE UPON EXERCISE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND THEY MAY NOT BE SOLD OR
OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE
SECURITIES UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR THE
AVAILABILITY OF AN EXEMPTION FROM REGISTRATION UNDER SAID ACT AND ANY APPLICABLE
STATE SECURITIES LAWS.

         THE SALE, TRANSFER, PLEDGE, OR HYPOTHECATION (COLLECTIVELY, THE
"TRANSFER") OR EXERCISE OF THIS WARRANT AND THE TRANSFER OF THE SECURITIES
ISSUABLE UPON EXERCISE ARE SUBJECT TO THE COMMUNICATIONS ACT OF 1934, AS
AMENDED, AND THE RULES AND REGULATIONS OF THE FEDERAL COMMUNICATIONS COMMISSION.

         FURTHERMORE, THE WARRANTS REPRESENTED BY THIS CERTIFICATE MAY NOT BE
TRANSFERRED OR EXERCISED AND THE SECURITIES ISSUABLE UPON EXERCISE MAY NOT BE
TRANSFERRED, IN EACH CASE, UNLESS THE COMPANY HAS RECEIVED AN OPINION OF TAX
COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY IN FORM AND SUBSTANCE REASONABLY
ACCEPTABLE TO THE COMPANY TO THE EFFECT THAT SUCH TRANSFER OR EXERCISE, AS
APPLICABLE, WILL NOT TERMINATE THE COMPANY'S CLASSIFICATION AS AN "S"
CORPORATION EXCEPT TO THE EXTENT SUCH EXERCISE IS OTHERWISE PERMITTED UNDER THE
PURCHASE AGREEMENT DEFINED IN THE BELOW-REFERENCED WARRANT AGREEMENT.

         THIS INSTRUMENT IS SUBJECT TO A SUBORDINATION AND INTERCREDITOR
AGREEMENT DATED AS OF MARCH 20, 2001 BY AND AMONG LBI HOLDINGS I, INC., A
CALIFORNIA CORPORATION, THE PURCHASERS PARTY TO THE PURCHASE AGREEMENT, AND
FLEET NATIONAL BANK, INDIVIDUALLY AND AS ADMINISTRATIVE AGENT (THE
"ADMINISTRATIVE AGENT") FOR CERTAIN LENDERS AND CERTAIN OTHER PARTIES, AS
AMENDED FROM TIME TO TIME. BY ITS ACCEPTANCE OF THIS INSTRUMENT, THE HOLDER
HEREOF AGREES TO BE BOUND BY THE PROVISIONS OF SUCH SUBORDINATION AND
INTERCREDITOR AGREEMENT TO THE SAME EXTENT THAT THE SUBORDINATED CREDITORS (AS
DEFINED THEREIN) ARE BOUND.

         THIS INSTRUMENT IS SUBJECT TO THE SUBORDINATION AND INTERCREDITOR
PROVISIONS CONTAINED IN ARTICLE XIX OF THE PURCHASE AGREEMENT (AS DEFINED IN THE
WARRANT AGREEMENT

                                      B-1



DESCRIBED BELOW). BY ITS ACCEPTANCE OF THIS INSTRUMENT, THE HOLDER HEREOF AGREES
TO BE BOUND BY SUCH SUBORDINATION AND INTERCREDITOR PROVISIONS TO THE SAME
EXTENT THAT THE PERMITTED HOLDERS (AS DEFINED IN THE PURCHASE AGREEMENT) ARE
BOUND.

                               WARRANT CERTIFICATE

                              LBI HOLDINGS I, INC.

         No. WR-___-2002                                        [_____] Warrants
         Dated as of March 20, 2001

         This Warrant Certificate certifies that ________, or registered
assigns, is the registered holder of ____________ (__________) Warrants to
purchase shares of Common Stock of LBI HOLDINGS I, INC. (the "Company"), a
California corporation. Each Warrant initially entitles the owner thereof to
purchase at any time on or before the Expiration Date one (1) fully paid and
nonassessable share of Common Stock of the Company, at a Purchase Price of one
cent ($0.01) upon (i) presentation and surrender of this Warrant Certificate
with a form of election to purchase duly executed and (ii) delivery to the
Company of the payment of the Purchase Price in the manner set forth in the
Warrant Agreement referred to below. The number of shares of Common Stock
purchasable pursuant to this Warrant Certificate and the Purchase Price therefor
are subject to adjustment as referred to below.

         The Warrants are issued pursuant to the Warrant Agreement, dated as of
March 20, 2001 (as it may from time to time be amended or supplemented, the
"Warrant Agreement"), between the Company and the purchasers named therein, and
are subject to all of the terms, provisions and conditions thereof, which
Warrant Agreement is hereby incorporated herein by reference and made a part
hereof and to which Warrant Agreement reference is hereby made for a full
description of the rights, obligations, duties and immunities of the Company and
the holders of the Warrant Certificates. Capitalized terms used, but not
defined, herein have the respective meanings ascribed to them in the Warrant
Agreement.

         As provided in the Warrant Agreement, the number of shares of Common
Stock purchasable pursuant to this Warrant Certificate and/or the Purchase Price
are, upon the happening of certain events, subject to adjustment. As further set
forth in, and subject to, the Warrant Agreement, the expiration date of this
Warrant Certificate is 5:00 p.m. Eastern Time on the earlier of (a) the later of
(i) January 9, 2015, or (ii) the date which is six (6) months from the date of
payment in full of all outstanding principal and interest on the Notes and (b)
the closing of the sale and issuance of shares of Common Stock of the Company in
an underwritten public offering pursuant to an effective registration statement
under the Securities Act of 1933, as amended, the gross proceeds of which exceed
$25,000,000; provided that if the holders of the Warrants have not had the right
to put the Warrants under Section 5.1 of the Warrant Agreement, the expiration
date of this Warrant Certificate shall extend until such time as the holders
have such right.

                                      B-2



         This Warrant Certificate shall be exercisable, at the election of the
holder, either as an entirety or in part from time to time. If this Warrant
Certificate shall be exercised in part, the holder shall be entitled to receive,
upon surrender hereof, another Warrant Certificate or Warrant Certificates for
the number of Warrants not exercised. This Warrant Certificate, with or without
other Warrant Certificates, upon surrender in the manner set forth in the
Warrant Agreement, may be exchanged for another Warrant Certificate or Warrant
Certificates of like tenor evidencing Warrants entitling the holder to purchase
a like aggregate number of shares of Common Stock as the Warrants evidenced by
the Warrant Certificate or Warrant Certificates surrendered shall have entitled
such holder to purchase.

         Except as expressly set forth in the Warrant Agreement, no holder of
this Warrant Certificate shall be entitled to vote or receive dividends or be
deemed for any purpose the holder of shares of Common Stock or of any other
Securities of the Company that may at any time be issued upon the exercise
hereof, nor shall anything contained in the Warrant Agreement or herein be
construed to confer upon the holder hereof, as such, any of the rights of a
holder of a share of Common Stock in the Company or any right to vote upon any
matter submitted to holders of shares of Common Stock at any meeting thereof, or
to give or withhold consent to any corporate action (whether upon any
recapitalization, issuance of stock, reclassification of Securities, change of
par value, consolidation, merger, conveyance, or otherwise) or, except as
provided in the Warrant Agreement, to receive notice of meetings, or to receive
dividends or subscription rights, or otherwise, until the Warrant or Warrants
evidenced by this Warrant Certificate shall have been exercised as provided in
the Warrant Agreement.

         THIS WARRANT CERTIFICATE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, AND THE RIGHTS OF THE COMPANY AND THE HOLDER HEREOF SHALL BE GOVERNED BY,
THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS (OTHER THAN ITS CONFLICTS OF LAW
PRINCIPLES). THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO
AGREEMENTS, COVENANTS AND RESTRICTIONS PROVIDED IN THE VOTING AND CO-SALE
AGREEMENT DATED MARCH 20, 2001, AND THE SECURITIES PURCHASE AGREEMENT DATED
MARCH 20, 2001, EACH AS AMENDED FROM TIME TO TIME, BY AND AMONG THE COMPANY AND
THE PERSONS NAMED THEREIN. A COPY OF SUCH AGREEMENTS MAY BE OBTAINED BY ANY
HOLDER OF THIS WARRANT UPON REQUEST WITHOUT CHARGE FROM THE SECRETARY OF THE
COMPANY AT THE PRINCIPAL OFFICE OF THE COMPANY.

         WITNESS the signature of a proper officer of the Company as of the date
first above written.

ATTEST:                                         LBI HOLDINGS I, INC.


______________________________                  By:_____________________________
Secretary                                            Name:
                                                     Title:


                                      B-3



                              [FORM OF ASSIGNMENT]
   (To be executed by the registered holder if such holder desires to transfer
                            the Warrant Certificate)

         FOR VALUE RECEIVED, _______________________________ hereby sells,
assigns and transfers unto
 ______________________________________________________________________________
(Please print name, address and taxpayer identification number or social
security number of transferee)
the accompanying Warrant Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint:
___________________________________________ attorney, to transfer the
accompanying Warrant Certificate on the books of the Company, with full power of
substitution.

         Dated:  _________________, ______.



                                                        ________________________
                                                        Signature of Holder

                                     NOTICE

         The signature to the foregoing Assignment must correspond to the name
as written upon the face of the accompanying Warrant Certificate or any prior
assignment thereof in every particular, without alteration or enlargement or any
change whatsoever.

                                      B-4



                         [FORM OF ELECTION TO PURCHASE]

                   (To be executed by the registered holder if
            such holder desires to exercise the Warrant Certificate)

         To: ___________:

         The undersigned hereby irrevocably elects to exercise _____ Warrants
represented by the accompanying Warrant Certificate to purchase the shares of
Common Stock issuable upon the exercise of such Warrants and requests that
certificates for such shares be issued in the name of:


         -----------------------------------------------------------------------
         (Please print name and address.)

         -----------------------------------------------------------------------
         (Please insert social security or other identifying number.)

         If such number of Warrants shall not be all the Warrants evidenced by
the accompanying Warrant Certificate, a new Warrant Certificate for the balance
remaining of such Warrants shall be registered in the name of and delivered to:

         -----------------------------------------------------------------------
         (Please print name and address.)

         -----------------------------------------------------------------------
         (Please insert social security or other identifying number.)

         Dated:_______________,________.

                                                          _____________________
                                                            Signature of Holder

                                     NOTICE

         The signature to the foregoing Election to Purchase must correspond to
the name as written upon the face of the accompanying Warrant Certificate or any
prior assignment thereof in every particular, without alteration or enlargement
or any change whatsoever.

                                      B-5

EX-10.9

                                                                    Exhibit 10.9

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


                              LBI HOLDINGS I, INC.

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

                                WARRANT AGREEMENT

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




                           DATED AS OF MARCH 20, 2001


                       WARRANTS TO PURCHASE COMMON STOCK,
                                 $0.01 PAR VALUE

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



                                TABLE OF CONTENTS
                                                                                  
1.   FORM, EXECUTION AND TRANSFER OF WARRANT CERTIFICATES ..........................  1
     1.1   Form of Warrant Certificates ............................................  1
     1.2   Execution of Warrant Certificates; Registration Books ...................  2
     1.3   Transfer, Split Up, Combination and Exchange of Warrant Certificates;
           Lost or Stolen Warrant Certificates .....................................  2
     1.4   Subsequent Issuance of Warrant Certificates .............................  3
2.   EXERCISE OF WARRANTS; PAYMENT OF PURCHASE PRICE. ..............................  4
     2.1   Exercise of Warrant .....................................................  4
     2.2   Cashless Exercise of Warrants ...........................................  4
     2.3   Issuance of Common Stock ................................................  5
     2.4   [Intentionally Omitted] .................................................  5
     2.5   Cancellation and Destruction of Warrant Certificates ....................  5
     2.6   Legend ..................................................................  5
3.   RESERVATION AND AVAILABILITY OF SHARES OF COMMON STOCK; TRANSFER TAXES ........  6
     3.1   Reservation of Common Stock .............................................  6
     3.2   Common Stock To Be Duly Authorized and Issued, Fully Paid and
           Nonassessable ...........................................................  6
     3.3   Transfer Taxes ..........................................................  6
     3.4   Common Stock Record Date ................................................  6
     3.5   CUSIP Number ............................................................  7
4.   ADJUSTMENTS; DISTRIBUTIONS; CONSOLIDATION, MERGER, SALE, RECLASSIFICATION;
     FRACTIONAL SHARES; SPECIAL AGREEMENTS. ........................................  7
     4.1   Adjustment to Purchase Price ............................................  7
     4.2   Fractional Shares ....................................................... 11
     4.3   Right of Action ......................................................... 11
     4.4   Special Agreement of Warrant Certificate Holders ........................ 12
     4.5   Special Agreements of the Company ....................................... 12
5.   PUT RIGHTS; CALL RIGHTS. ...................................................... 13
     5.1   Put Rights .............................................................. 13
     5.2   Call Right .............................................................. 13





                                                                                 
     5.3   Put and Call Closings ................................................... 14
6.   REGISTRATION .................................................................. 14
     6.1   Piggyback Registration .................................................. 14
     6.2   Registration Procedures ................................................. 15
     6.3   Grant of Other Registration Rights ...................................... 17
     6.4   Indemnification ......................................................... 18
     6.5   Contribution ............................................................ 18
7.   INTERPRETATION OF THIS AGREEMENT .............................................. 19
     7.1   Certain Defined Terms ................................................... 19
     7.2   Use of the Term "Underwritten ........................................... 28\
     7.3   Descriptive Headings .................................................... 28
8.   MISCELLANEOUS ................................................................. 28
     8.1   Amendment and Waiver .................................................... 28
     8.2   No Rights or Liabilities as Stockholder ................................. 28
     8.3   Directly or Indirectly .................................................. 29
     8.4   Survival of Representations and Warranties; Entire Agreement ............ 29
     8.5   Successors and Assigns .................................................. 29
     8.6   Notices ................................................................. 29
     8.7   Severability ............................................................ 30
     8.8   Counterparts ............................................................ 30
     8.9   Waiver of Jury Trial, Consent to Jurisdiction ........................... 31
     8.10  Governing Law ........................................................... 31
     8.11  Expiration .............................................................. 32
     8.12  Equitable Remedies ...................................................... 32



                                      -ii-



                                WARRANT AGREEMENT

         WARRANT AGREEMENT dated as of March 20, 2001, among LBI HOLDINGS I,
INC., a California corporation (together with its successors and assigns, the
"Company"), and THE PURCHASERS LISTED ON SCHEDULE A HERETO (collectively, the
"Purchasers").

RECITALS:

         A. Certain capitalized terms used in this Agreement shall have the
meanings ascribed to them in Section 7 hereof.

         B. The Board of Directors has authorized the issuance of an aggregate
of warrants (the "Warrants") of the Company, each Warrant representing the right
to purchase, upon the terms and subject to the conditions hereinafter set forth,
and subject to adjustment as set forth herein, one (1) share of Common Stock.

         C. The Company and the Purchasers have entered into that certain
Securities Purchase Agreement (as it may be amended from time to time, the
"Purchase Agreement"), of even date herewith, pursuant to which the Company
agreed to sell, and the Purchasers agreed to purchase, Thirty Million Dollars
($30,000,000) in aggregate principal amount of the Company's Junior Subordinated
Notes (the "Notes") and Warrants for 14.02 shares of Common Stock. There are
currently 200 shares of Common Stock outstanding at the time of the initial
issuance of the Warrants.

                                   AGREEMENT:

         NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth herein, the parties to this Agreement hereby agree as
follows:

1.       FORM, EXECUTION AND TRANSFER OF WARRANT CERTIFICATES.

         1.1   Form of Warrant Certificates. The warrant certificates
(individually, a "Warrant Certificate" and, collectively, the "Warrant
Certificates") evidencing the Warrants, and the forms of assignment and of
election to purchase shares to be attached to such certificates, shall be
substantially in the form set forth in Exhibit A hereto and may have such
letters, numbers or other marks of identification or designation as may be
required to comply with any law or with any rule or regulation of any
governmental authority, stock exchange or self-regulatory organization made
pursuant thereto. Each Warrant Certificate shall be dated the date of issuance
thereof by the Company, either upon initial issuance or upon transfer or
exchange, and on its face shall initially entitle the holder thereof to purchase
a number of shares of Common Stock equal to the number of Warrants represented
by such Warrant Certificate at a price per share equal to the Purchase Price,
but the number of shares of Common Stock purchasable pursuant to a Warrant
Certificate and the Purchase Price shall be subject to adjustment as provided
herein.



         1.2      Execution of Warrant Certificates; Registration Books.

                  (a) Execution of Warrant Certificates. The Warrant
         Certificates shall be executed on behalf of the Company by its
         President, its Executive Vice President or any other officer of the
         Company authorized by the Board of Directors. In case the officer of
         the Company who shall have signed any Warrant Certificate shall cease
         to be such an officer of the Company before issuance and delivery by
         the Company of such Warrant Certificate, such Warrant Certificate
         nevertheless may be issued and delivered with the same force and effect
         as though the individual who signed such Warrant Certificate had not
         ceased to be such an officer of the Company, and any Warrant
         Certificate may be signed on behalf of the Company by any individual
         who, at the actual date of the execution of such Warrant Certificate,
         shall be a proper officer of the Company to sign such Warrant
         Certificate, although at the date of the execution of this Agreement
         any such individual was not such an officer.

                  (b) Registration Books. The Company will keep or cause to be
         kept at its office maintained at the address of the Company set forth
         in Section 8.6 hereof, or at such other office of the Company in the
         United States of America of which the Company shall have given notice
         to each holder of Warrant Certificates, books for registration and
         transfer of the Warrant Certificates issued hereunder. Such books shall
         show the names and addresses of the respective holders of the Warrant
         Certificates, the registration number and the number of Warrants
         evidenced on its face by each of the Warrant Certificates and the date
         of each of the Warrant Certificates.

         1.3      Transfer, Split Up, Combination and Exchange of Warrant
Certificates; Lost or Stolen Warrant Certificates.

                  (a) Transfer, Split Up, etc. Any Warrant Certificate, with or
         without other Warrant Certificates, may be sold, transferred,
         hypothecated or pledged (collectively, "transferred") split up,
         combined or exchanged for another Warrant Certificate or Warrant
         Certificates, entitling the registered holder or transferee thereof to
         purchase a like number of shares of Common Stock as the Warrant
         Certificate or Warrant Certificates surrendered then entitled such
         registered holder to purchase; provided that any transfer of any
         Warrant Certificate shall be (i) subject to the limitations set forth
         in the Purchase Agreement and the Related Agreements and shall be made
         only to Permitted Holders and (ii) subject to compliance with all
         applicable federal and state securities laws by the transferor and the
         transferee (including the delivery of investment representation letters
         and legal opinions reasonably satisfactory to the Company, if such are
         requested by the Company). Any registered holder desiring to transfer,
         split up, combine or exchange any Warrant Certificate shall make such
         request in writing delivered to the Company, and shall surrender the
         Warrant Certificate or Warrant Certificates to be transferred, split
         up, combined or exchanged at the office of the Company referred to in
         Section 1.2(b) hereof, whereupon the Company shall, subject to the
         limitations on transfer set forth herein and in the Purchase Agreement
         and the Related Agreements,

                                      -2-



         deliver promptly to the Person entitled thereto a Warrant Certificate
         or Warrant Certificates, as the case may be, as so requested; provided,
         however, that the Company shall have no such obligation in the event
         that it reasonably determines that such transfer, split up, combination
         or exchange would constitute a violation of the Communications Act of
         1934 or the rules and regulations for the Federal Communications
         Commission (the "FCC") as then in effect ("FCC Laws"). In the event
         that the Company, on advice of its FCC counsel, or the holder, on
         advice of FCC counsel reasonably acceptable to the Company, reasonably
         determines that such violation may be remedied by receiving the consent
         of the FCC prior to such transfer, split up, combination or exchange,
         the Company and the registered holder, at the Company's expense, shall
         promptly take such actions as are reasonably necessary in order to
         obtain the FCC's consent to such transaction. Each registered holder of
         a Warrant Certificate, by its acceptance thereof, agrees not to
         transfer any Warrant Certificate in any manner which would violate
         Section 5 of the Securities Act or any other applicable securities laws
         or any other applicable laws (including the FCC Laws) or the Purchase
         Agreement or any Related Agreement.

                  (b)      Loss, Theft, etc. Upon receipt by the Company of
         evidence reasonably satisfactory to it of the ownership of and the
         loss, theft, destruction or mutilation of any Warrant Certificate
         (which evidence shall be, in the case of an Institutional Investor,
         notice from such Institutional Investor of such ownership (or of
         ownership by such Institutional Investor's nominee) and such loss,
         theft, destruction or mutilation), and:

                           (i)   in the case of loss, theft or destruction, of
                  indemnity reasonably satisfactory to the Company (which in any
                  event shall not require the posting of a bond or other
                  security therefor); or in the case of mutilation, upon
                  surrender and cancellation thereof;

the Company at its own expense will execute and deliver, in lieu thereof, a new
Warrant Certificate, dated the date of such lost, stolen, destroyed or mutilated
Warrant Certificate and of like tenor, in lieu of the lost, stolen, destroyed or
mutilated Warrant Certificate.

         1.4      Subsequent Issuance of Warrant Certificates. Subsequent to the
original issuance, no Warrant Certificates shall be issued except:

                           (a)   Warrant Certificates issued upon any transfer,
                  combination, split up or exchange of Warrants pursuant to
                  Section 1.3(a) hereof; and

                           (b)   Warrant Certificates issued in replacement of
                  mutilated, destroyed, lost or stolen Warrant Certificates
                  pursuant to Section 1.3(b) hereof; and

                           (c)   Warrant Certificates issued in respect of
                  unexercised Warrants pursuant to Section 2.4 hereof.

                                      -3-



2.       EXERCISE OF WARRANTS; PAYMENT OF PURCHASE PRICE.

         2.1 Exercise of Warrant. Subject to Section 4.5 of the Purchase
Agreement, any time on or before the Expiration Date, the holder of any Warrant
Certificate may exercise the Warrants evidenced thereby, in whole or in part, by
surrender of such Warrant Certificate, with an election to purchase (a form of
which is attached to each Warrant Certificate) attached thereto duly executed,
to the Company at its office referred to in Section 1.2(b) hereof, together with
payment of the Purchase Price for each share of Common Stock with respect to
which the Warrants are then being exercised; provided, however, that no such
exercise shall be valid in the event that the Company reasonably determines that
such exercise would constitute a violation of the FCC Laws. In the event that
the Company, on advice of its FCC counsel or the registered holder, on advice of
FCC counsel reasonable acceptable to the Company, reasonably determines that
such violation may be remedied by receiving the consent of the FCC prior to such
exercise, the Company and registered holder, at the Company's expense, shall
promptly take such actions as are reasonably necessary to obtain the FCC's
consent to such transaction. Such Purchase Price shall be payable in cash, by
check payable to the order of the Company or by wire transfer of immediately
available funds to the account of the Company.

         2.2 Cashless Exercise of Warrants. Subject to Section 4.5 of the
Purchase Agreement and notwithstanding the provisions of Section 2.1 hereof, if
the FMV (as defined below in this Section) of the Common Stock for which a
Warrant may be exercised is greater than the Purchase Price payable in
connection with the exercise thereof (at the date of calculation, as set forth
below), in lieu of exercising such Warrant as permitted in Section 2.1, the
holder of a Warrant Certificate may elect to receive shares of Common Stock
equal to the value (as determined below) of the Warrant (or the portion thereof
being canceled) by surrender of the Warrant Certificate, together with the
election to purchase (a form of which is attached to each Warrant Certificate)
attached thereto duly executed, to the Company at its office referred to in
Section 1.2(b) hereof, in which event the Company shall issue to the holder of
the Warrant Certificate that number of shares of Common Stock computed using the
following formula:

                              CS = WCS x (FMV - PP)
                                   ----------------
                                       FMV

Where

CS     equals the number of shares of Common Stock to be issued to the holder
of the Warrant Certificate;

WCS    equals the number of shares of Common Stock then purchasable under the
Warrant (at the date of such calculation);

FMV    equals the fair market value of one share of the Common Stock (at the
date of such calculation) as determined by the Company's Board of Directors in
good faith; and

PP     equals the Purchase Price (as adjusted to the date of such calculation);

                                      -4-



         provided, however, that no such exercise shall be valid in the event
that the Company reasonably determines that such exercise would constitute a
violation of the FCC Laws. In the event that the Company, on advice of its FCC
counsel or the registered holder, on advice of FCC counsel reasonable acceptable
to the Company, reasonably determines that such violation may be remedied by
receiving the consent of the FCC prior to such exercise, the Company and the
registered holder, at the Company's expense, shall promptly take such actions as
are reasonably necessary to obtain the FCC's consent to such transaction.

         2.3 Issuance of Common Stock. Upon timely receipt of a Warrant
Certificate, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for each of the shares to be purchased in the
manner provided in Section 2.1 or Section 2.2 hereof and an amount equal to any
applicable transfer tax (if not payable by the Company as provided in Section
3.3 hereof) and the receipt of any FCC consent required in accordance with
Section 2.1 or Section 2.2 and receipt of evidence of compliance with Section
4.5 of the Securities Purchase Agreement, the Company shall thereupon promptly
cause certificates representing the number of shares (including fractional
shares) of Common Stock then being purchased to be delivered to or upon the
order of the registered holder of such Warrant Certificate, registered in such
name or names as may be designated by such holder.

         2.4 Unexercised Warrants. In case the registered holder of any Warrant
Certificate shall exercise less than all the Warrants evidenced thereby (a) the
number of shares of Common Stock purchasable pursuant to such Warrant
Certificate shall be reduced by the number of shares of Common Stock purchased
upon such exercise of Warrants; and (b) a new Warrant Certificate evidencing
Warrants equal in number to the number of Warrants remaining unexercised shall
be issued by the Company to the registered holder of such Warrant Certificate or
to its duly authorized assigns.

         2.5 Cancellation and Destruction of Warrant Certificates. All Warrant
Certificates surrendered to the Company for the purpose of exercise, exchange,
substitution or transfer shall be cancelled by it, and no Warrant Certificates
shall be issued in lieu thereof except as expressly permitted by any of the
provisions of this Agreement. The Company shall cancel and retire any other
Warrant Certificates purchased or acquired by the Company otherwise than upon
the exercise thereof.

         2.6 Legend. Each Warrant Certificate issued pursuant to this Agreement
shall be stamped or otherwise have endorsed or imprinted thereon a legend in
substantially the form set forth in the form of Warrant Certificate attached
hereto as Exhibit A.

3.       RESERVATION AND AVAILABILITY OF SHARES OF COMMON STOCK; TRANSFER TAXES.

         3.1 Reservation of Common Stock. The Company covenants and agrees that
it will at all times cause to be reserved and kept available out of its
authorized and unissued shares of Common Stock such number of shares of Common
Stock as will be sufficient to permit the exercise in full of all Warrants then
outstanding hereunder.

                                      -5-



         3.2 Common Stock To Be Duly Authorized and Issued, Fully Paid and
Nonassessable. The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all shares of Common Stock delivered
upon the exercise of any Warrants, at the time of delivery of the certificates
representing such shares, shall be duly and validly authorized and issued and
fully paid and nonassessable, free of any preemptive rights and free of any
Lien, other than Liens arising from the actions of the applicable holder of a
Warrant.

         3.3 Transfer Taxes. The Company covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and charges
that may be payable in respect of the initial issuance or delivery of:

             (a) each Warrant Certificate;

             (b) each Warrant Certificate issued in exchange for any other
         Warrant Certificate pursuant to Section 1.3(a) hereof; and

             (c) each share of Common Stock issued upon the exercise of any
         Warrant.

The Company shall not, however, be required to pay any transfer tax that may be
payable in respect of the transfer or delivery of Warrant Certificates or the
issuance or delivery of certificates for shares of Common Stock in a name other
than that of the registered holder of the Warrant Certificate evidencing any
Warrant surrendered for exercise (any such tax being payable by the holder of
such Warrant Certificate at the time of surrender).

         3.4 Common Stock Record Date. Each Person in whose name any certificate
for shares of Common Stock is issued upon the exercise of Warrants shall for all
purposes be deemed to have become the holder of record of the Common Stock
represented thereby on, and such certificate shall be dated, the date upon which
the originally executed Warrant Certificate evidencing such Warrants was duly
surrendered and delivered to the Company with an election to purchase attached
thereto duly executed and payment of the aggregate Purchase Price (and any
applicable transfer taxes, if payable by such Person) was made. Prior to the
exercise of the Warrants evidenced thereby, the holder of a Warrant Certificate
shall not be entitled to any rights of a stockholder in the Company with respect
to shares for which the Warrants shall be exercisable, including, without
limitation, the right to vote, receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein, including without
limitation Section 4.1(a) hereof, or in any other applicable agreement between
the Company and such holder.

         3.5 CUSIP Number. The Company covenants and agrees that on or before
the earlier of (i) the date of the first offer for sale of Common Stock pursuant
to an effective registration statement filed by the Company under the Securities
Act, or (ii) the date thirty (30) days after the first exercise of a Warrant, it
shall have obtained, and thereafter shall maintain, a CUSIP or private placement
number, as applicable, in respect of the Common Stock from the CUSIP Service
Bureau of Standard & Poor's, a division of McGraw-Hill, Inc.

                                      -6-



4.       ADJUSTMENTS; DISTRIBUTIONS; CONSOLIDATION, MERGER, SALE,
RECLASSIFICATION; FRACTIONAL SHARES; SPECIAL AGREEMENTS.

         4.1 Adjustment to Purchase Price. The Authorized Number of Shares and
the Purchase Price shall be subject to adjustment pursuant to the provisions of
this Section 4.

                  (a)(1) Distribution of Property. In case, at any time during
         the term of the Warrants, the Company shall declare a dividend of cash
         or cash equivalents upon its Common Stock, or shall distribute to
         holders of its Common Stock (i) shares of its capital stock (other than
         Common Stock), (ii) Other Distributions (as defined in the Purchase
         Agreement) or (iii) other Securities of any other Person(s), evidences
         of indebtedness issued by the Company or any other Person(s), other
         assets or options or warrants or rights, then, as a condition of such
         declaration or distribution, lawful and adequate provision shall be
         made, and such funds, assets, Securities or other rights set aside and
         segregated, whereby each holder of Warrants shall thereafter have the
         right to receive, upon the exercise by such holder of any Warrants or
         the repurchase of any Warrants or sale of the Warrants in connection
         with a Sale of the Company, to the exclusion of other shareholders or
         creditors of the Company, such cash dividend (and interest thereon, as
         provided below), shares of stock, other Securities, evidences of
         indebtedness, other assets or options or warrants or rights as would
         have paid or distributed to such holder of the Warrants being exercised
         or repurchased or sold if the Warrants being exercised or repurchased
         or sold had been fully exercised immediately prior to the record date
         for determining the holders of Common Stock entitled to participate in
         such declaration or distribution, provided that any dividend of cash or
         cash equivalents shall accrue interest at the rate of six percent (6%),
         compounded annually in arrears on each anniversary of the date of
         payment, until payment of the dividend upon exercise or repurchase or
         sale of the Warrants as provided above. If not sooner paid above, the
         amounts payable under this Section 4.1(a)(1) shall in all events be
         paid on the Maturity Date (as defined in the Purchase Agreement). The
         foregoing provisions of this Section 4.1(a)(1) shall not apply to
         dividends or distributions made pursuant to Section 7.5(i), (ii) or
         (iii) of the Purchase Agreement.

                  (a)(2) Corporate Overhead Expense Adjustment. Schedule B
         attached hereto sets forth Corporate Overhead Expense levels for the
         periods 2001 through 2007. Upon the occurrence of the Sale of the
         Company, each holder of the Warrants shall be entitled to receive a
         payment equal to the aggregate amount of any Corporate Overhead Expense
         Adjustment, if any, multiplied by such holder's percentage of the
         Fully-Diluted Outstanding Equity of the Company at such time. If not
         sooner paid above, the amounts payable under this Section 4.1(a)(2)
         shall in all events be paid on the Maturity Date (as defined in the
         Purchase Agreement). Notwithstanding the foregoing, no payment will be
         owed to the holders of Warrants under this Section 4.1(a)(2) if there
         occurs an event that triggers a calculation of Fair Market Value under
         this Agreement.

                  (b)    Dividends, Subdivisions and Combinations. In case at
         any time during the term of the Warrants the number of shares of Common
         Stock outstanding is increased by a stock dividend payable in shares of
         Common Stock or by a subdivision or split-up of

                                      -7-



         shares of Common Stock, then, following the record date fixed for the
         determination of holders of Common Stock entitled to receive such stock
         dividend, subdivision or split-up, the Authorized Number of Shares
         shall be increased in proportion to such increase in outstanding shares
         and the Purchase Price in effect immediately prior to such stock
         dividend, subdivision or split-up shall be proportionately reduced.
         Conversely, in case at any time during the term of this Warrant the
         Company shall combine its outstanding shares of Common Stock into a
         smaller number of shares, the Authorized Number of Shares immediately
         prior to such combination shall be proportionately reduced and the
         Purchase Price in effect immediately prior to such combination shall be
         proportionately increased.

                  (c) Consolidation; Merger; Sale; Reclassification. If at any
         time during the term of the Warrants any capital reorganization or
         reclassification of the capital stock of the Company (other than a
         change in par value or from no par value to par value or as a result of
         a stock dividend, exchange or subdivision or split-up or combination of
         shares), or consolidation or merger of the Company with another
         corporation, or the sale or other disposition of all or substantially
         all of the Company's outstanding shares of Common Stock or properties
         and assets or the properties and assets of the Company's Subsidiaries,
         on a consolidated basis, to another Person, shall be effected in such a
         way that holders of shares of Common Stock shall be entitled to receive
         stock, other Securities or assets with respect to or in exchange for
         Common Stock (collectively, the "Specified Events"), then, unless the
         holders of the Warrants shall be required to participate in such
         Specified Event pursuant to Section 3.3 of the Voting and Co-Sale
         Agreement, as a condition of such reorganization, reclassification,
         consolidation, merger, sale or disposition, lawful and adequate
         provision shall be made whereby the holders of the Warrants shall
         thereafter have the right to receive upon the exercise of the Warrants,
         during the period specified herein and upon payment of the Purchase
         Price, and in lieu of the shares of Common Stock immediately
         theretofore receivable upon the exercise of the Warrants, such shares
         of stock, other Securities or assets as may be issued or payable with
         respect to or in exchange for a number of outstanding shares of Common
         Stock equal to the number of shares of Common Stock immediately
         theretofore so receivable had such reorganization, reclassification,
         consolidation, merger, sale or disposition not taken place, and in any
         such case lawful and adequate provision shall be made with respect to
         the rights and interests of the holders of the Warrants to the end that
         the provisions of this Agreement and of the Warrants (including without
         limitation provisions for adjustment of the Purchase Price and
         Authorized Number of Shares) shall thereafter be applicable, as nearly
         as may be, in relation to any shares of stock, other Securities or
         assets thereafter deliverable upon the exercise of the Warrants. The
         Company shall not effect any such consolidation, merger or sale unless
         prior to or simultaneously with the consummation thereof the survivor
         or successor corporation (if other than the Company) resulting from
         such consolidation or merger or the Person purchasing such properties
         and assets shall assume by written instrument executed and mailed or
         delivered to the holders of the Warrants, the obligation to deliver to
         such holders such shares of stock, other Securities or assets as, in
         accordance with the foregoing provisions, such holder may be entitled
         to receive, and containing the express assumption of all liabilities
         and obligations of the Company hereunder and thereunder, unless the
         holders of the Warrants are required to

                                      -8-



         participate in such transaction pursuant to Section 3.3 of the Voting
         and Co-Sale Agreement. The provisions of this Section 4.1(c) shall
         similarly apply to successive reorganizations, reclassifications,
         consolidations, mergers, sales or other dispositions. In furtherance of
         the foregoing, upon the occurrence of a Specified Event constituting a
         Sale of the Company, the holder of the Warrants shall be entitled, at
         its option, to either (i) exercise the Warrants in order to receive
         amounts available to the holders or Common Stock as described above or
         (ii) sell the Warrants, either to the Company or its successor, as the
         Company so elects, in exchange for a cash purchase price equal to the
         fair market value of the assets or other Securities issuable or payable
         with respect to the number of shares of Common Stock underlying the
         Warrant, minus the Purchase Price of such Warrants. In connection with
         any Specified Event, if the form of the transaction of any such
         Specified Event results in the receipt of consideration by the Company,
         the Company shall promptly (and in any event within sixty (60) days)
         distribute such consideration after the receipt thereof by the Company
         to the holders of the Warrants as set forth above.

                  (d) Performance-Based Adjustment. The Authorized Number of
         Shares shall be subject to decrease or increase at the earliest of (i)
         the Maturity Date (as defined in the Purchase Agreement); or (ii)
         prepayment in full of the Notes and repurchase of the Warrants; or
         (iii) a Sale of the Company; or (iv) the determination of the Warrant
         Purchase Price pursuant to Section 5.1 or 5.2, according to the
         following: (a) the Authorized Number of Shares shall be decreased by
         multiplying such number by .9367 if the Company achieves Broadcast Cash
         Flow for the trailing twelve (12) months ended at the end of its most
         recently completed fiscal quarter immediately prior to the date of the
         applicable event specified in clauses (i) through (iv) above (the
         "Trailing Twelve Months Broadcast Cash Flow") in excess of 125% of
         those thresholds set forth in the projections attached as Schedule C
         (the "Budgeted Plan") and, in the case of a Sale of the Company, the
         Sale Consideration, or in the case of a determination of the Warrant
         Purchase Price, the Total Fair Market Value, is greater than 13 times
         Trailing Twelve Months Broadcast Cash Flow; or (b) the Authorized
         Number of Shares shall be increased by multiplying such number by
         1.0633 if the Company achieves Trailing Twelve Months Broadcast Cash
         Flow less than 75% of the Budgeted Plan and, in the case of a Sale of
         the Company, the Sale Consideration, or in the case of determination of
         the Warrant Purchase Price, the Total Fair Market Value, is less than
         15 times Trailing Twelve Months Broadcast Cash Flow. For purposes
         hereof, the term "Broadcast Cash Flow" means, for any period, an amount
         equal to (a) Consolidated EBITDA of the Company and its Subsidiaries
         plus (b) Corporate Overhead Expense. The parties agree that the
         Budgeted Plan presently contains projections set forth on an annual
         basis and that the Company shall, within a reasonable period of time
         after the date of this Agreement, provide a breakdown of the Budgeted
         Plan on a quarter-annual basis, reasonably acceptable to the Required
         Holders, which shall thereupon constitute Schedule C. For purposes of
         this Section 4.1(d), the Total Fair Market Value shall mean the Net
         Asset Value as determined pursuant to the definition of Fair Market
         Value.

                  (e) Other Adjustments. In case at any time or from time to
         time during the term of the Warrants conditions arise by reason of any
         action(s) taken or omitted to be

                                      -9-



         taken by the Company which, in the opinion of the Company's Board of
         Directors, are not adequately covered by the provisions of this Section
         4, and which could reasonably be expected to be materially and
         adversely affect the exercise rights of the holders of the Warrants,
         the Company shall obtain advice from the Company's independent
         certified public accountants, or of other independent certified public
         accountants selected by the Company and reasonably satisfactory to the
         Required Holders, setting forth any adjustment of the Authorized Number
         of Shares and/or of the Purchase Price, on a basis consistent with the
         standards established in the other provisions of this Section 4.1,
         necessary in order to preserve, without diminution the exercise and
         other rights of the holders of the Warrants. Upon receipt of such
         advice, the Board of Directors of the Company shall forthwith make the
         adjustments described therein.

                  (f) Company Stock. For purposes of this Section 4.1, the
         number of shares of Common Stock outstanding or deemed to be
         outstanding at any given time shall not include shares owned or held by
         or for the account of the Company, and the disposition of any such
         shares shall be considered an issuance or sale of Common Stock for the
         purposes of this Section 4.1.

                  (g) Notice of Adjustment. Upon each adjustment of the Purchase
         Price, and upon each change in the Authorized Number Shares, and in the
         event of any change in the rights of the holders of the Warrants by
         reason of any other event(s) herein set forth, then and in each such
         case the Company promptly shall deliver to the holders of the Warrants,
         by first-class certified mail, return receipt requested, postage
         prepaid, a statement, signed by the Company's principal financial
         officer, showing in reasonable detail the basis of such determination
         or the facts requiring such adjustment and/or change, and stating the
         adjusted Purchase Price, and the new Authorized Number of Shares, or
         specifying the other shares of stock, other Securities or assets and
         the amount thereof receivable as a result of such change in rights, and
         setting forth in reasonable detail the method of calculation and the
         facts upon which such calculation is based. Where appropriate, such
         statement may be given in advance and may be included as part of a
         notice required to be mailed under the provisions of Section 4.1(h).

                  (h) Notice of Certain Events. If the Company shall propose to
         take any action requiring a calculation pursuant to this Section 4.1,
         the Company shall give notice to the holders of the Warrants in the
         manner set forth in Section 4.1(g), which notice shall specify the
         record date, if any, with respect to any such action and the date on
         which such action is to take place. Such notice also shall set forth
         such facts with respect thereto as shall be reasonably necessary to
         indicate the effect of such action (to the extent such effect may be
         known at the date of such notice) on the Authorized Number of Shares
         and the number, kind or class of shares or other Securities or other
         property or assets which shall be deliverable or purchasable upon the
         occurrence of such action or deliverable upon the exercise of the
         Warrants. In the case of any action which would require the fixing of a
         record date, such notice shall be given at least fifteen (15) days
         prior to the date so fixed, and in the case of all other actions, such
         notice shall be given at least fifteen (15) days prior to the taking of
         such proposed action. Failure to give such notice, or any defect
         therein, shall not affect the legality or validity of any such action.
         The holder of

                                      -10-



         any Warrant may within fifteen (15) days of any notice delivered by the
         Company pursuant to this Section 4.1(h) object to any of the Company's
         calculations contained in such notice by delivery of a notice setting
         forth such objection in reasonable detail. If such holder of any
         Warrant and the Company shall be unable to resolve such objection
         within ten (10) days of delivery of such notice to the Company, such
         objection shall be resolved by an independent accounting firm mutually
         agreed upon by the Company and such holder of the Warrant. The Company
         shall bear the fees and expenses of such firm.

                  (i) Agreement and Warrants Not Required to be Restated.
         Irrespective of any adjustments in the Authorized Number of Shares, the
         Purchase Price or the number or kind of cash, Securities or other
         property or assets purchasable upon the exercise of the Warrants, this
         Agreement and the Warrants may continue to express the same number of
         Warrants, Purchase Price and number and kind of Securities as are
         initially stated in this Agreement and the Warrants.

                  (j) Rounding. All calculations under this Section 4.1 shall be
         made to the nearest sixth decimal place.

                  (k) Single Adjustment. In no event shall the Authorized Number
         of Shares or Purchase Price be adjusted pursuant to more than one
         paragraph of this Section 4.1 with respect to a single event.

         4.2       Fractional Shares. The Company shall issue fractional shares
of Common Stock upon the exercise of any Warrant, as appropriate.

         4.3       Right of Action. All rights of action in respect of the
Warrants are vested in the respective registered holders of the Warrant
Certificates, and any registered holder of any Warrant Certificate, without the
consent of the registered holder of any other Warrant Certificate, may, in its
own behalf and for its own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or otherwise act in
respect of, its right to exercise the Warrants evidenced by such Warrant
Certificate in the manner provided in such Warrant Certificate and in this
Agreement.

         4.4       Special Agreement of Warrant Certificate Holders. Every
holder of a Warrant Certificate by accepting the same consents and agrees with
the Company and with every other holder of a Warrant Certificate that:

                   (a)   the Warrant Certificates are transferable only in
         accordance with the Purchase Agreement and the Related Agreements
         (subject to the conditions contained in Article XI of the Purchase
         Agreement) and only on the registry books of the Company if surrendered
         at the office of the Company referred to in Section 1.2(b) hereof, duly
         endorsed or accompanied by an instrument of transfer (in the form
         attached hereto); and

                   (b)   the Company may deem and treat the Person in whose name
         each Warrant Certificate is registered as the absolute owner thereof
         and of the Warrants evidenced thereby (notwithstanding any notations of
         ownership or writing on the Warrant

                                      -11-



         Certificates made by anyone other than the Company) for all purposes
         whatsoever, and the Company shall not be affected by any notice to the
         contrary;

         4.5      Special Agreements of the Company.  The Company covenants and
agrees that:

                  (a) The Company shall not, by amendment to its Articles of
         Incorporation, as in effect on the date hereof, or through any
         reorganization, transfer of assets, consolidation, merger, dissolution,
         liquidation, issuance or sale of Securities or any other voluntary
         action, avoid or seek to avoid the observance or performance of any of
         the terms to be observed or performed hereunder by the Company, but
         shall at all times in good faith assist in the carrying out of all the
         provisions of this Section 4 and in the taking of all such actions as
         may be necessary or appropriate in order to protect the rights of the
         holders of the Warrant Certificates against impairment.

                  (b) Before taking any action that would result in an
         adjustment to the then current Purchase Price to a price that would be
         below the then current par value of Common Stock issuable upon exercise
         of any Warrant, the Company will take or cause to be taken any and all
         necessary corporate or other action that may be necessary in order that
         the Company may validly and legally issue fully paid and nonassessable
         shares of Common Stock upon payment of such Purchase Price as so
         adjusted, provided, that if, under applicable law, no such corporate or
         other action may be lawfully taken, then the Company may nevertheless
         take the action that would result in an adjustment to the then current
         Purchase Price, and all other adjustments called for by this Section 4
         shall be made, but the Purchase Price shall not be adjusted until such
         corporate or other action is lawfully taken.

5.       PUT RIGHTS; CALL RIGHTS.

         5.1      Put Rights. Subject to and to the extent permitted by the Loan
Documents, the Required Holders have the right, at any time on or after the
Maturity Date of the Notes (as defined in the Purchase Agreement) (other than a
Maturity Date occasioned by a Sale of the Company that is either (i) a Specified
Event under Section 4.1(c) or (ii) a transaction in which the Warrant holders
are entitled to participate under Section 3.1 of the Voting and Co-Sale
Agreement or (iii) a transaction in which the Warrant holders are required to
participate under Section 3.3 of the Voting and Co-Sale Agreement), to require
the Company to purchase (the "Put") all of the Warrants at the Warrant Purchase
Price or if, in accordance with the Purchase Agreement and the Related
Agreements, the holder has exercised the Warrant, the shares of Common Stock
issued on exercise of the Warrant ("Warrant Shares") at the Fair Market Value
thereof, by delivering a written notice to the Company (the "Put Notice").
Within ten (10) days after receipt of any Put Notice, the Company will give
written notice of such requested Put to all other holders of Warrants and
Warrant Shares, and all such holders shall be required to participate in the
sale of Warrants and Warrant Shares pursuant to the Put.

         5.2      Call Right. If the Company proposes an acquisition with a
valuation of at least $5,000,000, in connection with which the senior lenders,
subordinated lenders or any proposed financing source (each a "Financial Party")
reasonably require in good faith, as a condition to the

                                      -12-



financing and/or permitting the acquisition, an amendment to the Maturity Date
of the Notes or an amendment to the dates set forth in the definition of
Maturity Date or the dates set forth in the definition of Expiration Date, and
the Majority Purchasers (as defined in the Purchase Agreement) or the Required
Holders, as appropriate, do not agree to such amendment, subject to and to the
extent permitted by the Loan Documents, the Company shall have the right to
purchase the Warrants at the Warrant Purchase Price or the Warrant Shares at the
Fair Market Value thereof in connection with its payment in full of the
aggregate principal amount and interest outstanding under the Notes, by
providing written notice of such election to the holders of the Warrants and
Warrant Shares (a "Call Notice"). The Company shall give the Purchasers written
notice (the "Requirement Notice") of any such requirement of a Financial Party,
which notice shall specify the waiver or amendment requested and the terms of
the proposed Acquisition, including, without limitation, the proposed financing,
and shall include as an attachment thereto an executed copy of the term sheet
(if any) and any other agreements (if any) relating to such proposed financing
or if no such term sheet or other agreement exists, an outline of proposed,
material terms described in good faith. Within twenty (20) days of delivery of
the Requirement Notice, the Majority Purchasers or the Required Holders shall
inform the Company in writing whether or not they shall agree to the
amendment(s) being required. In the event the Majority Purchasers or Required
Holders reject the proposed amendment(s) in their response pursuant to the
preceding sentence (a "Written Rejection") or fail to respond to the Requirement
Notice within such 20-day period, the Company, by delivery of a Call Notice
within sixty (60) days after the earlier of the delivery of a Written Rejection
or the expiration of the 20-day period, may elect to exercise its repurchase
rights set forth in this Section 5.2, provided such right shall lapse if the
repurchase is not consummated in full within six (6) months of the date of the
Company's delivery of the Call Notice.

         5.3 Put and Call Closings. The Company shall pay to each holder, in
cash or by wire transfer of immediately available funds, the Warrant Purchase
Price or Fair Market Value, as appropriate, as soon as practicable after its
receipt of the Put Notice or its delivery of the Call Notice, but in any event
within 30 days after the later of (i) the final determination of the Warrant
Purchase Price or Fair Market Value, as appropriate, and (ii) in the case of a
Call Notice, the closing date of the acquisition described in Section 5.2 (a
"Put/Call Closing Date"). In the event the Warrant Purchase Price or Fair Market
Value, as appropriate, is not paid in full by the Put/Call Closing Date, such
unpaid amount shall accrue interest at the applicable default rate of interest
under the Notes, as it may adjust from time to time, so long as the Notes remain
outstanding. If the Notes have been repaid in full in accordance with their
terms but the Warrant Purchase Price or Fair Market Value, as appropriate, has
not yet been paid in full, then the default rate of interest in effect under the
Notes immediately prior to their repayment shall be the applicable rate of
interest for purposes hereof, and such rate shall continue to increase on the
same schedule as was in effect while the Notes were outstanding, until the
Warrant Purchase Price or Fair Market Value and all accrued interest thereon has
been paid in full. Interest on the unpaid Warrant Purchase Price or Fair Market
Value, as appropriate, shall be compounded and calculated in the same manner as
provided in Section 2.4 of the Purchase Agreement with respect to the Notes.

6.       REGISTRATION.

                                      -13-



         6.1      Piggyback Registration. The Company agrees that if at any time
after the date hereof the Company shall propose to file a registration statement
with respect to any of its Common Stock on a form other than a Form S-4 or Form
S-8 (including its initial public offering), it will give notice in writing to
such effect to the Holders at least thirty (30) days prior to such filing, and,
at the written request of any such Holder, made within ten (10) days after the
receipt of such notice, will include therein at the Company's cost and expense
(including the reasonable fees and expenses of one counsel to such Holders, but
excluding underwriting discounts, commissions and filing fees attributable to
the shares of Common Stock included therein), such of the shares of Common Stock
as such Holder(s) shall request (the "Shares"); provided, however, that if the
offering being registered by the Company is underwritten and if the
representative of the underwriters certifies in writing that the inclusion
therein of the Shares would materially and adversely affect the sale of the
securities to be sold by the Company thereunder, then the Company shall be
required to include in the offering only that number of securities, including
the Shares, which the underwriters determine in their sole discretion will not
jeopardize the success of the offering (the securities so included to be
apportioned pro rata among all selling shareholders according to the total
amount of securities entitled to be included therein owned by each selling
shareholder, but in no event shall the total amount of Shares included in the
offering be less than the number of securities included in the offering by any
other single selling shareholder other than a Holder, unless all of the Shares
are included in the offering).

         6.2      Registration Procedures. Whenever the Company undertakes to
effect the registration of any of the Shares, the Company shall, as
expeditiously as reasonably possible:

                  (a) Prepare and file with the Securities and Exchange
         Commission (the "Commission") a registration statement covering such
         Shares and use its best efforts to cause such registration statement to
         be declared effective by the Commission as expeditiously as possible
         and to keep such registration effective until the earlier of (A) the
         date when all Shares covered by the registration statement have been
         sold or (B) one hundred eighty (180) days from the effective date of
         the registration statement; provided, that before filing a registration
         statement or prospectus or any amendment or supplements thereto, the
         Company will furnish to each Holder of Shares covered by such
         registration statement and the underwriters, if any, copies of all such
         documents proposed to be filed (excluding exhibits, unless any such
         person shall specifically request exhibits), which documents will be
         subject to the review of such Holders and underwriters, and the Company
         will not file such registration statement or any amendment thereto or
         any prospectus or any supplement thereto (including any documents
         incorporated by reference therein) with the Commission if (A) the
         underwriters, if any, shall reasonably object to such filing or (B) if
         information in such registration statement or prospectus concerning a
         particular selling Holder has changed and such Holder or the
         underwriters, if any, shall reasonably object.

                  (b) Prepare and file with the Commission such amendments and
         post-effective amendments to such registration statement as may be
         necessary to keep such registration statement effective during the
         period referred to in Section 6.2(a) and to comply with the provisions
         of the Securities Act with respect to the disposition of all securities
         covered by

                                      -14-



         such registration statement, and cause the prospectus to be
         supplemented by any required prospectus supplement, and as so
         supplemented to be filed with the Commission pursuant to Rule 424 under
         the Securities Act.

                  (c)    Furnish to the selling Holder(s) such numbers of copies
         of such registration statement, each amendment thereto, the prospectus
         included in such registration statement (including each preliminary
         prospectus), each supplement thereto and such other documents as they
         may reasonably request in order to facilitate the disposition of the
         Shares owned by them.

                  (d)    Use its best efforts to register and qualify under such
         other securities laws of such jurisdictions as shall be reasonably
         requested by any selling Holder and do any and all other acts and
         things which may be reasonably necessary or advisable to enable such
         selling Holder to consummate the disposition of the Shares owned by
         such Holder, in such jurisdictions; provided, however, that the Company
         shall not be required in connection therewith or as a condition thereto
         to qualify to transact business or to file a general consent to service
         of process in any such states or jurisdictions.

                  (e)    Promptly notify each selling Holder of the happening of
         any event as a result of which the prospectus included in such
         registration statement contains an untrue statement of a material fact
         or omits any fact necessary to make the statements therein not
         misleading and, at the request of any such Holder, the Company will
         prepare a supplement or amendment to such prospectus so that, as
         thereafter delivered to the purchasers of such Shares, such prospectus
         will not contain an untrue statement of a material fact or omit to
         state any fact necessary to make the statements therein not misleading.

                  (f)    Provide a transfer agent and registrar for all such
         Shares not later than the effective date of such registration
         statement.

                  (g)    Enter into such customary agreements (including
         underwriting agreements in customary form for a primary offering) and
         take all such other actions as the underwriters, if any, reasonably
         request in order to expedite or facilitate the disposition of such
         Shares (including, without limitation, effecting a stock split or a
         combination of shares).

                  (h)    Make available for inspection by any selling Holder or
         any underwriter participating in any disposition pursuant to such
         registration statement and any attorney, accountant or other agent
         retained by any such selling Holder or underwriter, all financial and
         other records, pertinent corporate documents and properties of the
         Company, and cause the officers, directors, employees and independent
         accountants of the Company to supply all information reasonably
         requested by any such seller, underwriter, attorney, accountant or
         agent in connection with such registration statement.

                  (i)    Promptly  notify the selling  Holder(s) and the
         underwriters, if any, of the following events and (if requested by any
         such person) confirm such notification in

                                      -15-



         writing: (A) the filing of the prospectus or any prospectus supplement
         and the registration statement and any amendment or post-effective
         amendment thereto and, with respect to the registration statement or
         any post-effective amendment thereto, the declaration of the
         effectiveness of such documents, (B) any requests by the Commission for
         amendments or supplements to the registration statement or the
         prospectus or for additional information, (C) the issuance or threat of
         issuance by the Commission of any stop order suspending the
         effectiveness of the registration statement or the initiation of any
         proceedings for that purpose and (D) the receipt by the Company of any
         notification with respect to the suspension of the qualification of the
         Shares for sale in any jurisdiction or the initiation or threat of
         initiation of any proceeding for such purposes.

                  (j)    Make every reasonable effort to prevent the entry of
         any order suspending the effectiveness of the registration statement
         and obtain at the earliest possible moment the withdrawal of any such
         order, if entered.

                  (k)    Cooperate with the selling Holder(s) and the
         underwriters, if any, to facilitate the timely preparation and delivery
         of certificates representing the Shares to be sold and not bearing any
         restrictive legends, and enable such Shares to be in such lots and
         registered in such names as the underwriters may request at least two
         (2) business days prior to any delivery of the Shares to the
         underwriters.

                  (l)    Provide a CUSIP  number  for all the Shares  not later
         than the effective date of the registration statement.

                  (m)    Prior to the effectiveness of the registration
         statement and any post-effective amendment thereto in connection with,
         and at each closing of, an underwritten offering, (A) make such
         representations and warranties to the selling Holder(s) and the
         underwriters, if any, with respect to the Shares and the registration
         statement as are customarily made by issuers in primary underwritten
         offerings; (B) use its best efforts to obtain "cold comfort" letters
         and updates thereof from the Company's independent certified public
         accountants addressed to the selling Holders and the underwriters, if
         any, such letters to be in customary form and covering matters of the
         type customarily covered in "cold comfort" letters by underwriters in
         connection with primary underwritten offerings; (C) deliver such
         documents and certificates as may be reasonably requested (1) by the
         holders of a majority of the Shares being sold, and (2) by the
         underwriters, if any, to evidence compliance with clause (A) above and
         with any customary conditions contained in the underwriting agreement
         or other agreement entered into by the Company; and (D) obtain opinions
         of counsel to the Company and updates thereof (which counsel and which
         opinions shall be reasonably satisfactory to the underwriters, if any),
         covering the matters customarily covered in opinions requested in
         underwritten offerings and such other matters as may be reasonably
         requested by the selling Holders and underwriters or their counsel.
         Such counsel shall also state that, subject to appropriate
         qualifications, no facts have come to the attention of such counsel
         which cause them to believe that such registration statement, the
         prospectus contained therein, or any amendment or supplement thereto,
         as of their respective effective or issue dates, contains any untrue
         statement of any material fact or omits to state any material

                                      -16-



         fact necessary to make the statements therein not misleading (except
         that no statement need be made with respect to any financial
         statements, notes thereto or other financial data or other expertized
         material contained therein). If for any reason the Company's counsel is
         unable to give such opinion, the Company shall so notify the Holders of
         the Shares and shall use its best efforts to remove expeditiously all
         impediments to the rendering of such opinion.

                  (n)    Otherwise use its best efforts to comply with all
         applicable rules and regulations of the Commission, and make generally
         available to its security holders earnings statements satisfying the
         provisions of Section 11(a) of the Securities Act, no later than
         forty-five (45) days after the end of any twelve-month period (or
         ninety (90) days, if such period is a fiscal year) (A) commencing at
         the end of any fiscal quarter in which the Shares are sold to
         underwriters in a firm or best efforts underwritten offering, or (B) if
         not sold to underwriters in such an offering, beginning with the first
         month of the first fiscal quarter of the Company commencing after the
         effective date of the registration statement, which statements shall
         cover such twelve-month periods.

         6.3      Grant of Other Registration Rights. After the date hereof, the
Company shall not grant to any holder of securities of the Company any
registration rights which have a priority greater than those granted to Holders
pursuant to this Warrant or in contravention of Section 7.6 of the Purchase
Agreement without the prior written consent of the Required Holders.

         6.4      Indemnification. The Company's obligations under Section 6.1
above with respect to each Holder of Shares are expressly conditioned upon such
Holder's furnishing to the Company in writing such information concerning such
Holder and the terms of such Holder's proposed offering as the Company shall
reasonably request for inclusion in the registration statement. If any
registration statement including any of the Shares is filed, then the Company
shall indemnify each Holder thereof (and each underwriter for such Holder and
each person, if any, who controls such Holder or such underwriter within the
meaning of the Securities Act) (collectively, the "Holder Indemnified Parties")
from any loss, claim, damage or liability arising out of, based upon or in any
way relating to any untrue statement or alleged untrue statement of a material
fact contained in such registration statement or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except for any such
statement or alleged statement or omission or alleged omission made in reliance
upon and in conformity with information furnished in writing by such Holder of
the Shares expressly for use in connection with such registration statement, and
the Company will reimburse the Holder Indemnified Parties for any legal or any
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, liability, action or proceeding; and such Holder
shall indemnify the Company (and each of its officers and directors who has
signed such registration statement, each director, each person, if any, who
controls the Company within the meaning of the Securities Act, each underwriter
for the Company and each person, if any, who controls such underwriter within
the meaning of the Securities Act) (collectively the "Company Indemnified
Parties") and each other Holder Indemnified Party against any loss, claim,
damage or liability arising from any such statement or alleged statement or
omission or alleged omission which was made in reliance upon and in conformity
with information furnished in writing to the Company

                                      -17-



by such Holder of the Shares expressly for use in connection with such
registration statement; provided, however, that the obligation of any Holder
hereunder shall be limited to an amount equal to the proceeds received by such
Holder upon the sale of Shares sold in the offering covered by such
registration.

         6.5      Contribution. If the indemnification provided for in Section
6.4 is unavailable or insufficient to hold harmless any of the Holder
Indemnified Parties or Company indemnified parties (each an "Indemnified
Party"), then each indemnifying party thereunder (an "Indemnifying Party") shall
contribute to the amount paid or payable by such Indemnified Party as a result
of the losses, claims, damages or liabilities referred to in Section 6.4 an
amount or additional amount, as the case may be, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party or Parties,
on the one hand, and the Indemnified Party, on the other, in connection with the
statements or omissions which resulted in such losses, claims, demands or
liabilities as well as any other relevant equitable considerations. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Indemnifying Party or Parties, on the one hand, or the Indemnified Party, on the
other, and the parties' relative, intent, knowledge, access to information and
opportunity to correct or prevent such untrue or alleged untrue statement or
omission or alleged omission. The amount payable to an Indemnified Party as a
result of the losses, claims, damages or liabilities referred to in the first
sentence of this Section 6.5 shall be deemed to include any legal or other
expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any action or claim which is the subject of Section
6.4. No Person guilty of fraudulent misrepresentation within the meaning of
Section 11(f) of the Securities Act shall be entitled to contribution from any
Person who was not guilty of such fraudulent misrepresentation.

7.       INTERPRETATION OF THIS AGREEMENT.

         7.1      Certain  Defined Terms.  For the purpose of this  Agreement,
the following  terms shall have the meanings specified with respect thereto
below:

         Affiliate - has the meaning specified in the Purchase Agreement.

         Agreement, this -- and references thereto shall mean this Warrant
Agreement as it may from time to time be amended or supplemented.

         Authorized Number of Shares - means the number of shares of Common
Stock purchasable upon the exercise of the Warrants, initially 14.02 shares, as
adjusted in accordance with Section 4.1.

         Board of Directors -- means the board of directors of the Company or
any committee thereof that, in the instance, shall have the lawful power to
exercise the power and authority of such board of directors.

                                      -18-



         Business Day -- means a day other than a Saturday, a Sunday or a day on
which banks in the state in which the office maintained by the Company pursuant
to Section 1.2(b) is located are required or permitted by law to be closed
(other than a general banking moratorium or holiday for a period exceeding four
(4) consecutive days).

         Capital Lease -- means any leasing or similar arrangement which, in
accordance with GAAP, is classified as a capital lease.

         Capital Securities - has the meaning specified in the Purchase
Agreement.

         Closing Date -- means the "Closing Date" as defined in the Purchase
Agreement.

         Common Stock -- means the Common Stock, $0.01 par value, of the
Company.

         Company -- shall have the meaning specified in the introductory
paragraph hereof.

         Consolidated or consolidated -- means, with reference to any term
defined herein, that term as applied to the Company's accounts and all of its
Subsidiaries' accounts, that may in accordance with GAAP, be consolidated with
the Company.

         Consolidated EBITDA -- means for any period, without duplication, an
amount equal to Consolidated Net Income of a Person for such period, plus (a)
Taxes of such Person for such period (plus Permitted Holdings Tax Distributions
and Permitted Shareholder Tax Distributions (each as defined in the Senior Loan
Agreement)), plus (b) Consolidated Interest Expense paid or accrued for such
period, plus (c) other extraordinary charges incurred during such period, plus
(d) depreciation, amortization and other non-cash charges for such period, plus
(e) Transaction Costs (as defined in the Senior Loan Agreement), plus (f)
Extraordinary Expenses (as defined in the Senior Loan Agreement); all to the
extent deducted in computing Consolidated Net Income for such period, in each
case determined on a consolidated basis in accordance with GAAP, plus (g)
without duplication, costs, expenses and other amounts described in clause (ii)
of the definition of Net Cash Proceeds as set forth in the Senior Loan Agreement
incurred in connection with any Relocation (as defined in the Senior Loan
Agreement).

         Consolidated Interest Expense -- means for any period, without
duplication, the sum of all interest (including without limitation interest on
Capital Leases) and commitment, letter of credit and similar fees on all
Indebtedness of any Person which was paid or accrued during such period plus the
net amounts payable (or minus the net amounts receivable) under Hedging
Agreements (as currently defined in the Senior Loan Agreement) accrued during
such period; in each case determined on a consolidated basis in accordance with
GAAP.

         Consolidated Net Income - means for any period, the net income (or
loss) of any Person, excluding any extraordinary income (or loss) for such
period (taken as a cumulative whole), after deducting all operating expenses,
provisions for all taxes and reserves (including reserves for deferred income
taxes) and all other proper deductions; in each case determined on a
consolidated basis in accordance with GAAP.

                                      -19-



         Convertible Securities - has the meaning specified in the Purchase
Agreement.

         Corporate Overhead Expense Adjustment - means the adjustment as
determined in accordance with Schedule B.

         Corporate Overhead Expense - means all general and administrative
expenses incurred during any fiscal period which are not associated with, or
attributable to, the particular operations of one or more of the stations owned
and operated by the Company's Subsidiaries and which are properly classified as
general and administrative expenses on the Company's financial statements,
prepared on a consolidated basis in accordance with GAAP; provided, however
that, notwithstanding any generally accepted accounting principles to the
contrary, Corporate Overhead Expense shall include all compensation paid to
Lenard or Jose Liberman and any of their relatives, except to the extent such
compensation is associated with, or attributable to, the particular operations
of one or more of the stations owned and operated by the Company's Subsidiaries
and such compensation is attributable to functions being performed by Lenard or
Jose Liberman which otherwise would have been performed by an unrelated party.

         Expiration Date - means 5:00 p.m. Eastern Time on the earlier of (a)
the later of (i) March 20, 2011, or (ii) the date which is six (6) months from
the date of payment in full of all outstanding principal and interest on the
Notes and (b) the closing of the sale and issuance of shares of Common Stock of
the Company in an underwritten public offering pursuant to an effective
registration statement under the Securities Act of 1933, as amended, the gross
proceeds of which exceed $25,000,000; provided if the holders have not had the
right to put their Warrants under Section 5.1 of this Agreement, the Expiration
Date of the Warrant shall extend until such time as the holders have such right.

         Fair Market Value - means (a)(i) the total consideration that would be
received by the holders of the Common Stock upon the sale of all of the
Company's and its Subsidiaries' assets (exclusive of cash and cash equivalents)
in a single transaction or series of related transactions to a buyer or buyers
willing to pay the highest purchase price that would be received in a sale,
which buyer or buyers is under no compulsion to buy and the Company is under no
compulsion to sell, all parties having reasonable knowledge of all relevant
facts, with no minority interest, illiquidity, restrictions on transfer or
exercise discount being applied and no other discount being applied for any
other reason, plus (ii) cash and cash equivalents of the Company and its
Subsidiaries as of the date of the determination, plus (iii) the aggregate
exercise or conversion price of all Rights in existence and remaining
unexercised on such date, plus (iv) the aggregate amount of any Corporate
Overhead Expense Adjustment, less (v) the amount of all accrued Indebtedness and
other liabilities of the Company and its Subsidiaries (collectively, the net
effect of the clauses (i) through (v), "Net Asset Value"), less (vi) 2.5% of
such Net Asset Value to take into account the existing Phantom Stock identified
in Schedule 3.4(b) to the Purchase Agreement and any Capital Securities,
Convertible Securities or Phantom Stock hereafter issued pursuant to clause (A)
of the last sentence of Section 7.6 of the Purchase Agreement, and such Phantom
Stock, Convertible Securities and Capital Securities shall not be included in
"Indebtedness and other liabilities" in the computation of the Net Asset Value,

divided by

                                      -20-



                  (b)    the number of shares of Fully-Diluted Outstanding
         Equity, which shall not include for purposes of this definition any
         Phantom Stock, Convertible Securities or Capital Securities referred to
         in subclause (vi) of the foregoing clause (a).

         The Fair Market Value shall be that which is negotiated by the Company
and the Required Holders. The procedures set forth in this definition shall
govern the determination of the Fair Market Value. The following principles and
procedures shall govern this analysis.

                  (1)    The Company shall within thirty (30) days of the
         occurrence of the event under this Agreement which requires the
         determination of the Fair Market Value inform the Purchasers in writing
         of its good faith determination of the Fair Market Value. The Company
         shall set forth its determination of the Fair Market Value in a
         reasonably detailed schedule which shall include all factors relevant
         to the Company's determination, including the Company's good faith
         determination of each of clauses (a)(i) through (a)(vi) described in
         the first paragraph of this definition. The schedule setting forth the
         Company's good faith determination of the Fair Market Value as set
         forth in this definition may be referred to herein as "Company's Fair
         Market Value Notice."

                  (2)    Following receipt of Company's Fair Market Value
         Notice, the Required Holders may request from the Company such
         additional information, data or other evidence as the Required Holders
         may reasonably determine to be necessary to verify the Company's
         determination of the Fair Market Value. The Company agrees to promptly
         respond to the Required Holders' requests for such additional
         information and shall cooperate in good faith with the Required
         Holders to assist the Required Holders in reaching such verification.

                  (3)    Within fifteen (15) days following the date of delivery
         of the Company's Fair Market Value Notice (which term may be extended
         by mutual agreement of the parties), the Required Holders shall deliver
         to the Company a written notice either (i) accepting the amount of the
         Fair Market Value set forth in the Company's Fair Market Value Notice
         or (ii) challenging the Company's determination of the Fair Market
         Value (a "Challenge Notice").

                  (4)    If the Required Holders do not elect to deliver a
         timely Challenge Notice, then the Fair Market Value set forth in the
         Company's Fair Market Value Notice shall be deemed to have been
         accepted. If the Required Holders elect to deliver a Challenge Notice,
         such notice shall include, in reasonable detail, the Required Holders'
         good faith determination of the Fair Market Value, including reasonable
         backup evidence and data. Such Challenge Notice shall specifically and
         in reasonable detail address each of the aspects of Company's Fair
         Market Value Notice which the Required Holders believe to be incorrect.

                  (5)    The Company and the Required Holders shall, promptly
         following the Company's receipt of the Required Holders' Challenge
         Notice, meet in good faith to

                                      -21-



         review the aspects of the calculation of the Fair Market Value upon
         which the parties have a material disagreement.

                  (6)    If, despite such meeting and the good faith efforts of
         the parties to agree, the parties are unable to reach agreement
         regarding the amount of the Fair Market Value, or if one party fails to
         make itself available for such meeting within 10 days of the delivery
         of the Challenge Notice, either party may, by written notice to the
         other ("Valuation Commencement Notice"), elect to have the value of the
         assets to be valued as part of the calculation of the Fair Market Value
         determined by the Valuation Mechanism set forth below.

                  (7)    As used herein, the "Valuation Mechanism" shall be the
         procedures pursuant to which the parties may elect to have the assets
         valued as part of the calculation of Fair Market Value determined by
         third party valuation professionals. The following are the procedures
         for the Valuation Mechanism:

         Within thirty (30) days after delivery of the Valuation Commencement
Notice, the Company and the Required Holders shall attempt to agree upon an
appraiser to determine the Fair Market Value, which appraiser shall be a
nationally recognized broker, investment banker or appraisal firm with expertise
in the broadcast radio and television industry (the "Appraiser"). If, within
such thirty (30) day period, the Company and the Required Holders agree upon an
Appraiser to determine the Fair Market Value, then such Appraiser shall be
engaged by the parties to conduct an independent appraisal to make a
determination of Fair Market Value based on the definition of Fair Market Value
set forth herein and shall prepare a written report explicitly identifying its
conclusion as to Fair Market Value and the assumptions, methodology and
comparables used by the Appraiser to reach that conclusion. The Appraiser shall
deliver its written report to the Company and the Required Holders within thirty
(30) days of the date of the Appraiser's engagement, provided however, that if
the Appraiser reasonably requires additional time to complete its appraisal
report and to arrive at a determination of Fair Market Value, the parties shall
grant the Appraiser one reasonable extension of time, not to exceed thirty (30)
days, to deliver its report and make its determination of Fair Market Value. The
determination of the Appraiser shall govern.

         If the Company and the Required Holders do not, within such thirty (30)
day period, agree as to a single Appraiser, or if the Appraiser appointed as
provided above fails to timely deliver to the Company and the Required Holders a
written report explicitly identifying its conclusion as to Fair Market Value and
the assumptions, methodology and comparables used by the Appraiser to reach that
conclusion, then each of the Company and the Required Holders shall within ten
(10) days thereafter appoint one Appraiser who meets the standards described in
the above definition with written notice of each party's appointment of an
Appraiser to be delivered to the other party within such ten (10) day period, or
any extension of that time period that is agreed to by the parties (the
"Appointment Date"). Any party failing to provide written notice of its
selection of an Appraiser within the time period specified above shall be deemed
to have waived its right to appoint its own Appraiser to make that determination
and to have agreed to accept as its own the Appraiser appointed by the other
party. Each of the two appraisers shall be a nationally recognized broker,
investment banker or appraisal firm with

                                      -22-



expertise in the broadcast radio and television industry. Each of the two
Appraisers so selected shall conduct an independent appraisal of Fair Market
Value based on the definition of Fair Market Value set forth herein and shall
prepare a written report explicitly identifying its conclusion as to Fair Market
Value and the assumptions, methodology and comparables used by the Appraiser to
reach that conclusion. Each Appraiser shall deliver its written report to the
Company, the Required Holders and the other Appraiser within thirty (30) days
after the Appointment Date, provided however, that if either Appraiser
reasonably requires additional time to complete its appraisal report and to
arrive at a determination of Fair Market Value, the parties shall grant the
Appraisers one extension of time, not to exceed thirty (30) days, to deliver
their reports and make their determinations of Fair Market Value. If the two
Appraisers so selected agree upon a determination of Fair Market Value, their
joint determination shall govern.

         If the two Appraisers cannot reach agreement within the time period
allowed for their respective determinations of Fair Market Value, the two
Appraisers selected shall, within a ten (10) day period following the time
period allowed for their respective determinations of Fair Market Value, select
a third Appraiser who meets the standards described above (the "Third
Appraiser"). The Third Appraiser shall conduct an independent appraisal of Fair
Market Value based on the definition of Fair Market Value set forth herein and
shall prepare a written report explicitly identifying its conclusion as to Fair
Market Value and the assumptions, methodology and comparables used by the Third
Appraiser to reach that conclusion. The Third Appraiser shall deliver its
written report to the Company and the Required Holders within thirty (30) days
of the date of its selection, provided however, that if the Third Appraiser
reasonably requires additional time to complete its appraisal report and to
arrive at a determination of Fair Market Value, the parties shall grant the
Third Appraiser one reasonable extension of time, not to exceed thirty (30)
days, to deliver its report and make its determination of Fair Market Value. The
Fair Market Value shall be the average of (i) the appraisal of the Third
Appraiser and (ii) the closest in value of the appraisal of the first two
Appraisers to the appraisal of the Third Appraiser. All decisions of the
Appraiser(s) shall be rendered in writing and shall be signed by the
Appraiser(s). Except as set forth in the next succeeding paragraph, the Fair
Market Value determined as herein provided shall be conclusive, final and
binding on the parties and shall be enforceable in any court having jurisdiction
over a proceeding brought to seek such enforcement. The cost of the Fair Market
Value determination shall not be taken into account in determining Fair Market
Value and shall be borne by the Company.

         If either party contends and produces credible, substantive evidence
that any Appraiser has acted with gross negligence or serious and willful
misconduct in the conduct of his or her appraisal, or that such Appraiser has
grossly or willfully failed to follow the appraisal methodology described in the
definition of Fair Market Value, but not otherwise, such party may by written
notice to the other party (with a copy to the American Arbitration Association)
demand that such alleged negligence, misconduct or failure be adjudicated by an
arbitration conducted in accordance with the then existing rules for commercial
arbitration of the American Arbitration Association before a single arbitrator.
Within ten (10) days following receipt of such notice, the Company and the
Required Holders shall attempt to agree upon an arbitrator, who shall be an
attorney or retired judge, preferably with experience handling

                                      -23-



disputes involving the radio or television industries (the "Arbitrator"). If the
parties are unable to agree upon an Arbitrator within ten (10) days, the parties
or either party may request the American Arbitration Association to appoint the
Arbitrator. Each party shall use its commercially reasonable best efforts to
cause the arbitration to be completed within sixty (60) days after the
appointment of the Arbitrator. Either party may apply to the Arbitrator for
interim or injunctive relief, and may seek from any court having jurisdiction
any interim or provisional relief that is necessary to protect the rights of
that party pending conclusion of the arbitration. The parties shall be allowed
discovery in the arbitration, but with depositions to be limited to a maximum of
two per party to be held within thirty (30) days after the making of a request
for depositions. If the Arbitrator determines that any Appraiser has acted with
gross negligence or serious and willful misconduct or has grossly or willfully
failed to follow the appraisal methodology described in the definition of Fair
Market Value, the Arbitrator may order appropriate relief including but not
limited to the appointment of a new Appraiser or the selection of a new
Appraiser by the parties, in either case within a ten (10) day period, to
determine Fair Market Value applying the correct methodology within a thirty
(30) day period following such selection or appointment.

         FCC and FCC Laws - have the meaning specified in Section 1.3.

         Fully-Diluted Outstanding Equity -- means, as of any time of
determination, the sum of

                  (i)    the total number of shares of Common Stock outstanding
         at such time; plus

                  (ii)   the aggregate number of shares of Common Stock issuable
         in respect of Rights in existence and remaining unexercised at such
         time, determined based on the maximum number of shares of Common Stock
         issuable pursuant to Rights, without regard to whether such Rights are
         then exercisable.

         Generally accepted accounting principles or GAAP -- means accounting
principles which are (a) consistent with the principles promulgated or adopted
by the United States Financial Accounting Standards Board and its predecessors
and other recognized principle setting bodies, in effect from time to time, (b)
applied on a basis consistent with prior periods, and (c) such that a certified
public accountant would, insofar as the use of accounting principles is
pertinent, be in a position to base an opinion as to financial statements in
which such principles have been properly applied.

         Holders -- means the registered holders of the Warrants.

         Indebtedness -- means all obligations, contingent and otherwise, which
in accordance with GAAP should be classified on the obligor's balance sheet as
liabilities, or to which reference should be made by footnotes thereto,
including without limitation, in any event and whether or not so classified: (i)
all debt and similar monetary obligations, whether direct or indirect; (ii) all
liabilities secured by any mortgage, pledge, security interest, lien, charge or
other encumbrance existing on property owned or acquired subject thereto,
whether or not the liability secured thereby shall have been assumed; (iii) all
guaranties, endorsements and other contingent

                                      -24-



obligations whether direct or indirect in respect of Indebtedness or performance
of others, including any obligation to supply funds to or in any manner to
invest in, directly or indirectly, the debtor, to purchase Indebtedness, or to
ensure the owner of Indebtedness against loss,through an agreement to purchase
goods, supplies or services for the purpose of enabling the debtor to make
payment of the Indebtedness held by such owner or otherwise, and (iv)
obligations to reimburse issuers of any letters of credit.

         Initial Purchase Price -- means $0.01 per share.

         Institutional Investor - means the Purchasers, any affiliate of the
Purchasers, and any holder of Warrants that is an "accredited investor" as
defined in Section 2(15) of the Securities Act.

         Lien -- means any mortgage, pledge, security interest, encumbrance,
lien (statutory or otherwise) or charge of any kind (including any agreement to
give any of the foregoing), any conditional sale or other title retention
agreement, any lease in the nature thereof, and the filing of or agreement to
give any financing statement under the Uniform Commercial Code of any
jurisdiction or any other type of preferential arrangement for the purpose, or
having the effect, of protecting a creditor against loss or securing the payment
or performance of an obligation.

         Loan Documents - shall have the meaning specified in the Purchase
Agreement.

         Nasdaq -- means the National Association of Securities Dealers
Automated Quotation System.

         Notes -- shall have the meaning specified in Recital C of this
Agreement.

         Permitted Holders -- shall have the meaning specified in the Purchase
Agreement.

         Person -- means an individual, a partnership, a joint venture, a
corporation, a limited liability company, a trust, an unincorporated
organization and a government or any department or agency thereof.

         Property -- means any interest in any kind of property or asset,
whether real, personal or mixed, and whether tangible or intangible.

         Purchase Agreement -- shall have the meaning specified in Recital C of
this Agreement.

         Purchase Price -- means, prior to any adjustment pursuant to Section 4
of this Agreement, the Initial Purchase Price and thereafter, the Initial
Purchase Price as adjusted and readjusted from time to time.

         Put/Call Closing Date - has the meaning specified in Section 5.3.

         Related Agreements - shall have the meaning specified in the Purchase
Agreement.

                                      -25-



         Required Holders -- means, at any time, the holders (other than the
Company or any Affiliate) of more than fifty percent (50%) of the Warrants,
subject to the proxy granted to Alta Communications VIII, L.P. or its successor
pursuant to Section 3.4 of the Voting and Co-Sale Agreement.

         Right -- means and includes any warrant (including, without limitation,
any Warrant), option or other right, to acquire Common Stock and any evidence of
indebtedness, equity security or other instruments or right convertible or
exchangeable into Common Stock, including, without limitation, any right which,
pursuant to the provisions of any Security, is convertible or exchangeable into
Common Stock.

         Sale Consideration - means the aggregate consideration received by (i)
the Company or (ii) the holders of Capital Securities and Convertible Securities
of the Company in connection with the Sale of the Company, provided that in the
case of a Sale of the Company that involves a transfer of less than 100% of the
ownership of the Capital Securities of the Company, the Sale Consideration means
the implied equity value of the Company based on the aggregate consideration
payable for the percentage ownership of the Company being transferred and (B) in
the case of a Sale of the Company that involves a transfer of less than 100% of
the assets of the Company and its Subsidiaries (except to the extent the unsold
assets are of a de minimis amount), the Sale Consideration means the aggregate
consideration received by the Company and its Subsidiaries with respect to the
sold assets plus the fair market value of the remaining assets (determined in
accordance with the Valuation Mechanism set forth in the definition of Fair
Market Value).

         Sale of the Company -- means one or more of the following, effected in
a single transaction or series of transactions, whether or not related, with one
or more Persons that is not an Affiliate of the Company:

                  (a) The sale or other disposition of all or substantially all
         of the Company's assets or the assets of the Company's Subsidiaries, on
         a consolidated basis:

                  (b) The sale or other disposition of a majority of the issued
         and outstanding Capital Securities of the Company or other rights
         giving such Person or Persons the power to elect a majority of the
         Company's board of directors (whether by merger, consolidation or
         issuance, sale or transfer of Capital Securities of the Company); or

                  (c) The merger or consolidation of the Company or
         substantially all of its Subsidiaries with one or more third parties in
         a transaction in which such third party(ies) or the holders of their
         Capital Securities thereafter control, directly or indirectly, the
         business and affairs of the Company or the Subsidiaries party to such
         transaction.

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

         Security -- shall have the meaning specified in Section 2(1) of the
Securities Act.

                                      -26-



         Senior Loan Agreement - shall have the meaning specified in the
Purchase Agreement.

         Shares - has the meaning specified in Section 6.1.

         Subsidiary -- means any Person which the Company now or hereafter shall
at the time own, directly or indirectly through another Person, at least a
majority of the outstanding Capital Securities entitled to vote generally; and
the term "Subsidiaries" means all of such Persons collectively.

         Voting and Co-Sale Agreement -- means the Voting and Co-Sale Agreement,
dated as of the date hereof, among the Company, the Purchasers and the other
shareholders of the Company named therein, as the same may be amended,
supplemented or otherwise modified from time to time.

         Voting Stock -- means, with respect to any corporation, any shares of
stock of such corporation whose holders are entitled under ordinary
circumstances to vote for the election of directors of such corporation
(irrespective of whether at the time stock of any other class or classes shall
have or might have voting power by reason of the happening of any contingency).

         Warrant -- shall have the meaning specified in Recital B hereof.

         Warrant Certificate -- shall have the meaning specified in Section 1.1
hereof.

         Warrant Purchase Price - shall mean the Fair Market Value of the shares
of Common Stock then issuable to holders upon the exercise of the Warrants as of
the date of the Put Notice or Call Notice or such other date of an adjustment to
the Authorized Number of Shares pursuant to Section 4.1(d)(i), (ii) or (iv),
less the aggregate Purchase Price of such Warrants.

         7.2 Use of the Term "Underwritten." Wherever this Agreement refers to
an "underwriting" or an "underwritten offering," such term shall mean and
include any sale pursuant to any arrangement by which any Person engages in a
distribution of the Securities subject to such underwriting, whether such
underwriting is undertaken on a best efforts or firm commitment basis.

         7.3      Descriptive  Headings.  The  descriptive  headings of the
several Sections of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.

8.       MISCELLANEOUS.

         8.1 Amendment and Waiver. This Agreement and the Warrant Certificates
may be amended, and the observance of any term of this Agreement may be waived,
with and only with the written consent of the Company and:

                  (a) in the case of Section 1 through Section 8, inclusive,
         hereof (other than this Section 8.1) and the Warrant Certificates, the
         written consent of the Required Holders; or

                                      -27-



                  (b) in the case of this Section 8.1, the written consent of
         all holders of Warrant Certificates;

provided that no such amendment or waiver of any of the provisions of this
Agreement or the Warrant Certificates, in each case pertaining to the Purchase
Price or the number of shares of Common Stock that may be purchased upon
exercise of each Warrant shall be effective as to the holder of any Warrant,
absent such holder's written consent, unless such amendment or waiver applies
equally and ratably to all holders of Warrants.

         8.2      No Rights or Liabilities as Stockholder. Except as expressly
provided herein, nothing contained in this Agreement shall be construed as
conferring upon the holder of any Warrant any rights of a stockholder of the
Company or as imposing any obligation on such holder to purchase any securities
or as imposing any liabilities on such holder as a stockholder of the Company,
whether such obligation or liabilities are asserted by the Company or by
creditors of the Company.

         8.3      Directly or Indirectly. Where any provision in this Agreement
refers to any action to be taken by any Person, or that such Person is
prohibited from taking, such provision shall be applicable whether such action
is taken directly or indirectly by such Person, including actions taken by or on
behalf of any partnership in which such Person is a general partner.

         8.4      Survival of Representations and Warranties; Entire Agreement.
All representations and warranties contained herein and in the Purchase
Agreement in connection herewith shall survive the execution and delivery of
this Agreement and the Warrant Certificates, the transfer by the Purchasers of
any Warrant Certificate or portion thereof or interest therein and the exercise
or expiration of any Warrant, and may be relied upon by the Purchasers or other
holder of a Warrant Certificate or the Company, as applicable, regardless of any
investigation made at any time by or on behalf of the Purchasers or such other
holder or the Company, as applicable. Subject to the preceding sentence, this
Agreement, the Warrant Certificates, the Purchase Agreement and the Related
Agreements embody the entire agreement and understanding between the Purchasers
and the Company, and supersede all prior agreements and understandings, relating
to the subject matter hereof.

         8.5      Successors and Assigns. All covenants and other agreements in
this Agreement contained by or on behalf of any of the parties hereto shall bind
and inure to the benefit of the respective permitted successors and permitted
assigns of the parties hereto (including, without limitation, any Permitted
Holder of a Warrant Certificate) whether so expressed or not.

         8.6      Notices. All communications hereunder or under the Warrants
shall be in writing, shall be delivered by United States mail (postage prepaid),
nationwide overnight courier, or facsimile transmission (confirmed by delivery
by nationwide overnight courier sent on the day of the sending of such facsimile
transmission), and

                                      -28-



                  (a) if to a Purchaser, addressed to it at the address set
         forth on Schedule A, or at such other address as the Purchaser shall
         have specified to the Company in writing, with a copy to:



                      Richard G. Small, Esq.
                      Edwards & Angell, LLP
                      2800 Financial Plaza
                      Providence, RI 02903
                      Telephone:  (401) 276-6582
                      Facsimile:   (401) 276-6611

                  (b) if to any other holder of a Warrant Certificate, addressed
         to such other holder at such address as such holder shall have
         specified to the Company in writing or, if any such other holder shall
         not have so specified an address to the Company, then addressed to such
         other holder in care of the last holder of such Warrant Certificate
         that shall have so specified an address to the Company; and

                  (c) if to the Company, addressed to it at:

                      LBI Holdings I, Inc.
                      c/o Liberman Broadcasting, Inc.
                      1813 Victory Place
                      Burbank, CA 91504
                      Attn.: Executive Vice President
                      Telephone: (818) 563-5722
                      Facsimile:  (818) 563-4244

with a copy to:

                      O'Melveny & Myers LLP
                      400 South Hope Street
                      Los Angeles, CA 90071
                      Attention: Joseph K. Kim, Esq.
                      Facsimile: (213) 430-6407
                      Telephone: (213) 430-6511

         or at such other address as the Company shall have specified to the
         holders of the Warrant Certificates in writing; provided that any such
         communication to the Company may also, at the option of any holder of a
         Warrant Certificate, be delivered by any other means either to the
         Company at its address specified above or to any officer of the
         Company.

Any communication addressed and delivered as herein provided shall be deemed to
be received when actually delivered to the address of the addressee (whether or
not delivery is accepted) or received by the telecopy machine of the recipient.
Any communication not so addressed and delivered shall be ineffective.

                                      -29-



         8.7      Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

         8.8      Counterparts.  This  Agreement  may be  executed  in any
number of counterparts, each of which shall be an original but all of which
together shall constitute one instrument.

         8.9      Waiver of Jury Trial, Consent to Jurisdiction.

                  (a) Waiver of Jury Trial. THE PARTIES HERETO VOLUNTARILY AND
         INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY
         IN RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER OR IN CONNECTION
         WITH THIS AGREEMENT OR ANY OF THE DOCUMENTS, AGREEMENTS OR TRANSACTIONS
         CONTEMPLATED HEREBY.

                  (b) Consent to the Exclusive Jurisdiction of the Courts of the
         Commonwealth of Massachusetts. EACH OF THE PARTIES HERETO HEREBY
         CONSENTS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE
         COMMONWEALTH OF MASSACHUSETTS AND THE UNITED STATES DISTRICT COURT FOR
         THE DISTRICT OF THE COMMONWEALTH OF MASSACHUSETTS, AS WELL AS TO THE
         JURISDICTION OF ALL COURTS TO WHICH AN APPEAL MAY BE TAKEN FROM SUCH
         COURTS, FOR THE PURPOSE OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING
         OUT OF, OR IN CONNECTION WITH, THIS AGREEMENT INCLUDING, WITHOUT
         LIMITATION, ANY PROCEEDING RELATING TO ANCILLARY MEASURES IN AID OF
         ARBITRATION, PROVISIONAL REMEDIES AND INTERIM RELIEF, OR ANY PROCEEDING
         TO ENFORCE ANY ARBITRAL DECISION OR AWARD.

                  EACH PARTY HEREBY EXPRESSLY WAIVES ANY AND ALL RIGHTS TO BRING
         ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF OR IN CONNECTION
         WITH THIS AGREEMENT IN OR BEFORE ANY COURT OR TRIBUNAL OTHER THAN THE
         COURTS OF THE COMMONWEALTH OF MASSACHUSETTS AND COVENANTS THAT IT SHALL
         NOT SEEK IN ANY MANNER TO RESOLVE ANY DISPUTE OTHER THAN AS SET FORTH
         IN THIS SECTION 8.9 OR IN THE DEFINITION OF FAIR MARKET VALUE OR TO
         CHALLENGE OR SET ASIDE ANY DECISION, AWARD OR JUDGMENT OBTAINED IN
         ACCORDANCE WITH THE PROVISIONS HEREOF OR IN THE DEFINITION OF FAIR
         MARKET VALUE IN SECTION 7.1.

                                      -30-



                  EACH OF THE PARTIES HERETO HEREBY EXPRESSLY WAIVES ANY AND ALL
         OBJECTIONS IT MAY HAVE TO VENUE, INCLUDING, WITHOUT LIMITATION, THE
         INCONVENIENCE OF SUCH FORUM, IN ANY OF SUCH COURTS. IN ADDITION, EACH
         OF THE PARTIES CONSENTS TO THE SERVICE OF PROCESS BY PERSONAL SERVICE
         OR ANY MANNER IN WHICH NOTICES MAY BE DELIVERED HEREUNDER IN ACCORDANCE
         WITH SECTION 8.6.

         8.10     Governing Law. THIS AGREEMENT AND THE WARRANT CERTIFICATES
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE
PARTIES SHALL BE GOVERNED BY, THE INTERNAL LAW OF THE COMMONWEALTH OF
MASSACHUSETTS (WITHOUT GIVING EFFECT TO ANY CONFLICTS OR CHOICE OF LAWS
PROVISIONS WHICH WOULD CAUSE THE APPLICATIONS OF THE DOMESTIC SUBSTANTIVE LAWS
OF ANY OTHER JURISDICTION).

         8.11     Expiration. All Warrants that have not been exercised or
purchased in accordance with the provisions of this Agreement shall expire and
all rights of holders of such Warrants shall terminate and cease on the
Expiration Date.

         8.12     Equitable Remedies. The parties hereto agree that irreparable
harm would occur in the event that any of the agreements and provisions of this
Agreement were not performed fully by the parties hereto in accordance with
their specific terms or conditions or were otherwise breached, and that money
damages are an inadequate remedy for breach of this Agreement because of the
difficulty of ascertaining and quantifying the amount of damage that will be
suffered by the parties hereto in the event that this Agreement is not performed
in accordance with its terms or conditions or is otherwise breached. It is
accordingly hereby agreed that the parties hereto shall be entitled to an
injunction or injunctions to restrain, enjoin and prevent breaches of this
Agreement by the other parties and to enforce specifically such terms and
provisions of such Articles in any court of the United States or any state
having jurisdiction, such remedy being in addition to and not in lieu of, any
other rights and remedies to which the other parties are entitled to at law or
in equity.

  [Remainder of page intentionally left blank; next page is a signature page.]

                                      -31-



         IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed and delivered by one of its duly authorized
officers or representatives.

                                    LBI HOLDINGS I, INC.

                                    By  /s/ Lenard Liberman
                                      --------------------------------------
                                    Name:   Lenard Liberman
                                    Title:  Executive Vice President

                                    Accepted:

                                    ALTA COMMUNICATIONS VIII, L.P.

                                    By:  Alta Communications VIII Managers, LLC,
                                         its General Partner

                                    By: /s/ Eileen McCarthy
                                       -------------------------------------
                                    Name:___________________________________
                                    Title:__________________________________


                                    ALTA-COMM VIII S BY S, LLC

                                    By: /s/ Eileen McCarthy
                                       -------------------------------------
                                    Name:___________________________________
                                    Title:__________________________________


                                    ALTA COMMUNICATIONS VIII-B, L.P.

                                    By:  Alta Communications VIII Managers, LLC,
                                         its General Partner

                                    By: /s/ Eileen McCarthy
                                       -------------------------------------
                                    Name:___________________________________
                                    Title:__________________________________



                                 ALTA VIII ASSOCIATES, LLC

                                 By:  Alta Communications, Inc.

                                 By:   /s/ Eileen McCarthy
                                    --------------------------------------------
                                 Name:__________________________________________
                                 Title:_________________________________________


                                 CALIFORNIA STATE TEACHERS'
                                 RETIREMENT SYSTEM


                                 By:    /s/ Christopher J. Ailman
                                    --------------------------------------------
                                 Name:      Christopher J. Ailman
                                      ------------------------------------------
                                 Title:     Chief Investment Officer
                                       -----------------------------------------


                                 BANCBOSTON INVESTMENTS INC.


                                 By:    /s/ Lars A. Swanson
                                    --------------------------------------------
                                 Name:      Lars A. Swanson
                                      ------------------------------------------
                                 Title:     Director
                                       -----------------------------------------


                                 UNIONBANCALEQUITIES, INC.


                                 By:    /s/ J. Kevin Sampson  /s/ David Bonrouhi
                                    --------------------------------------------
                                 Name:      J. Kevin Sampson      David Bonrouhi
                                      ------------------------------------------
                                 Title:     Vice President        Vice President
                                       -----------------------------------------



                                   Schedule A
                             Schedule of Purchasers


- -----------------------------------------------------------------------------------------
Purchaser                             Address                            No. of Warrants
- ---------                             -------                            ---------------
                                                                   
- -----------------------------------------------------------------------------------------
Alta Communications VIII, L.P.        200 Clarendon Street               7.398725
                                      Boston, MA 02109
                                      Attn: Bob Emmert

- -----------------------------------------------------------------------------------------
Alta-Comm VIII S By S, LLC            200 Clarendon Street               0.122340
                                      Boston, MA 02109
                                      Attn: Bob Emmert

- -----------------------------------------------------------------------------------------
Alta Communications VIII-B, L.P.      200 Clarendon Street               0.411919
                                      Boston, MA 02109
                                      Attn: Bob Emmert

- -----------------------------------------------------------------------------------------
Alta VIII Associates, LLC             200 Clarendon Street               0.011683
                                      Boston, MA 02109
                                      Attn: Bob Emmert

- -----------------------------------------------------------------------------------------
California State Teachers'            Mail Station #4                    2.336667
Retirement System                     Investments Office
                                      7667 Folsom Boulevard
                                      P. O. Box 163749, MS4
                                      Sacramento, CA  95816-3749
                                      Attn: Deanna Winter

- -----------------------------------------------------------------------------------------
BancBoston Investments Inc.           175 Federal Street                 2.804000
                                      10/th/ Floor
                                      Boston, MA 02110
                                      Attn: Lars Swanson

- -----------------------------------------------------------------------------------------
UnionBanCal Equities, Inc.            c/o Union Private Equity           0.934667
                                      445 South Figueroa St.
                                      21/st/ Floor
                                      Los Angeles, CA 90071
                                      Attn: Kevin Sampson

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




                                   Schedule B

                    Corporate Overhead Expense Adjustment to
                                Fair Market Value

If the Company's Corporate Overhead Expense exceeds the amounts shown below
during any calendar year, the amount of such excess, together with interest
thereon from the end of such calendar year to the date of the final
determination of the Fair Market Value, at the rate of six percent (6%), as
compounded and calculated under the Notes, shall be added to the other elements
of Fair Market Value.

         2001     $1.4 million
         2002     $1.6 million
         2003     $1.8 million
         2004     $2.1 million
         2005     $2.4 million
         2006     $2.8 million
         2007     $3.2 million



                                   Schedule C

            Projections for Performance-Based Adjustment pursuant to
                          Section 4.1(d) are attached



                                                                       EXHIBIT A

                          [FORM OF WARRANT CERTIFICATE]

         THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES
ISSUABLE UPON EXERCISE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND THEY MAY NOT BE SOLD OR
OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE
SECURITIES UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR THE
AVAILABILITY OF AN EXEMPTION FROM REGISTRATION UNDER SAID ACT AND ANY APPLICABLE
STATE SECURITIES LAWS.

         THE SALE, TRANSFER, PLEDGE, OR HYPOTHECATION (COLLECTIVELY, THE
"TRANSFER") OR EXERCISE OF THIS WARRANT AND THE TRANSFER OF THE SECURITIES
ISSUABLE UPON EXERCISE ARE SUBJECT TO THE COMMUNICATIONS ACT OF 1934, AS
AMENDED, AND THE RULES AND REGULATIONS OF THE FEDERAL COMMUNICATIONS COMMISSION.

         FURTHERMORE, THE WARRANTS REPRESENTED BY THIS CERTIFICATE MAY NOT BE
TRANSFERRED OR EXERCISED AND THE SECURITIES ISSUABLE UPON EXERCISE MAY NOT BE
TRANSFERRED, IN EACH CASE, UNLESS THE COMPANY HAS RECEIVED AN OPINION OF TAX
COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY IN FORM AND SUBSTANCE REASONABLY
ACCEPTABLE TO THE COMPANY TO THE EFFECT THAT SUCH TRANSFER OR EXERCISE, AS
APPLICABLE, WILL NOT TERMINATE THE COMPANY'S CLASSIFICATION AS AN "S"
CORPORATION EXCEPT TO THE EXTENT SUCH EXERCISE IS OTHERWISE PERMITTED UNDER THE
PURCHASE AGREEMENT DEFINED IN THE BELOW-REFERENCED WARRANT AGREEMENT.

         THIS INSTRUMENT IS SUBJECT TO A SUBORDINATION AND INTERCREDITOR
AGREEMENT DATED AS OF MARCH 20, 2001 BY AND AMONG LBI HOLDINGS I, INC., A
CALIFORNIA CORPORATION, THE PURCHASERS PARTY TO THE PURCHASE AGREEMENT, AND
FLEET NATIONAL BANK, INDIVIDUALLY AND AS ADMINISTRATIVE AGENT (THE
"ADMINISTRATIVE AGENT") FOR THE LENDERS UNDER THE CREDIT AGREEMENT BY AND AMONG
LBI HOLDINGS II, INC. (THE "BORROWER"), THE DIRECT AND INDIRECT SUBSIDIARIES OF
THE BORROWER WHICH ARE CREDIT PARTIES THEREUNDER, THE LENDERS PARTY THERETO AND
THE ADMINISTRATIVE AGENT AND UNION BANK OF CALIFORNIA, N.A. AS SYNDICATION
AGENT, AND CIT LENDING SERVICES CORPORATION AND GENERAL ELECTRIC CAPITAL
CORPORATION AS CO-DOCUMENTATION AGENTS. BY ITS ACCEPTANCE OF THIS INSTRUMENT,
THE HOLDER HEREOF AGREES TO BE BOUND BY THE PROVISIONS OF SUCH SUBORDINATION AND
INTERCREDITOR



AGREEMENT TO THE SAME EXTENT THAT THE SUBORDINATED CREDITORS (AS DEFINED
THEREIN) ARE BOUND.

         THIS INSTRUMENT IS SUBJECT TO A SUBORDINATION AND INTERCREDITOR
AGREEMENT, DATED AS OF MARCH 20, 2001, AMONG LBI HOLDINGS I, INC., THE
PURCHASERS PARTY TO THE PURCHASE AGREEMENT, OAKTREE CAPITAL MANAGEMENT, LLC,
INDIVIDUALLY AND AS AGENT FOR CERTAIN HOLDERS, AND OTHERS. BY ITS ACCEPTANCE OF
THIS INSTRUMENT, THE HOLDER HEREOF AGREES TO BE BOUND BY THE PROVISIONS OF SUCH
SUBORDINATION AND INTERCREDITOR AGREEMENT TO THE SAME EXTENT THAT THE
SUBORDINATED CREDITORS (AS DEFINED THEREIN) ARE BOUND.

                               WARRANT CERTIFICATE

                              LBI HOLDINGS I, INC.

No. WR-___                                                      [_____] Warrants
Date: ________

         This Warrant Certificate certifies that ________, or registered
assigns, is the registered holder of ____________ (__________) Warrants to
purchase shares of Common Stock of LBI HOLDINGS I, INC. (the "Company"), a
California corporation. Each Warrant initially entitles the owner thereof to
purchase at any time on or before the Expiration Date one (1) fully paid and
nonassessable share of Common Stock of the Company, at a Purchase Price of one
cent ($0.01) upon (i) presentation and surrender of this Warrant Certificate
with a form of election to purchase duly executed and (ii) delivery to the
Company of the payment of the Purchase Price in the manner set forth in the
Warrant Agreement referred to below. The number of shares of Common Stock
purchasable pursuant to this Warrant Certificate and the Purchase Price therefor
are subject to adjustment as referred to below.

         The Warrants are issued pursuant to the Warrant Agreement, dated as of
_____________, 2001 (as it may from time to time be amended or supplemented, the
"Warrant Agreement"), between the Company and the purchasers named therein, and
are subject to all of the terms, provisions and conditions thereof, which
Warrant Agreement is hereby incorporated herein by reference and made a part
hereof and to which Warrant Agreement reference is hereby made for a full
description of the rights, obligations, duties and immunities of the Company and
the holders of the Warrant Certificates. Capitalized terms used, but not
defined, herein have the respective meanings ascribed to them in the Warrant
Agreement.

         As provided in the Warrant Agreement, the number of shares of Common
Stock purchasable pursuant to this Warrant Certificate and/or the Purchase Price
are, upon the happening of certain events, subject to adjustment. As further set
forth in, and subject to, the Warrant Agreement, the expiration date of this
Warrant Certificate is 5:00 p.m. Eastern Time on

                                      A-2



the earlier of (a) the later of (i) March 20, 2011, or (ii) the date which is
six (6) months from the date of payment in full of all outstanding principal and
interest on the Notes and (b) the closing of the sale and issuance of shares of
Common Stock of the Company in an underwritten public offering pursuant to an
effective registration statement under the Securities Act of 1933, as amended,
the gross proceeds of which exceed $25,000,000.

         This Warrant Certificate shall be exercisable, at the election of the
holder, either as an entirety or in part from time to time. If this Warrant
Certificate shall be exercised in part, the holder shall be entitled to receive,
upon surrender hereof, another Warrant Certificate or Warrant Certificates for
the number of Warrants not exercised. This Warrant Certificate, with or without
other Warrant Certificates, upon surrender in the manner set forth in the
Warrant Agreement, may be exchanged for another Warrant Certificate or Warrant
Certificates of like tenor evidencing Warrants entitling the holder to purchase
a like aggregate number of shares of Common Stock as the Warrants evidenced by
the Warrant Certificate or Warrant Certificates surrendered shall have entitled
such holder to purchase.

         Except as expressly set forth in the Warrant Agreement, no holder of
this Warrant Certificate shall be entitled to vote or receive dividends or be
deemed for any purpose the holder of shares of Common Stock or of any other
Securities of the Company that may at any time be issued upon the exercise
hereof, nor shall anything contained in the Warrant Agreement or herein be
construed to confer upon the holder hereof, as such, any of the rights of a
holder of a share of Common Stock in the Company or any right to vote upon any
matter submitted to holders of shares of Common Stock at any meeting thereof, or
to give or withhold consent to any corporate action (whether upon any
recapitalization, issuance of stock, reclassification of Securities, change of
par value, consolidation, merger, conveyance, or otherwise) or, except as
provided in the Warrant Agreement, to receive notice of meetings, or to receive
dividends or subscription rights, or otherwise, until the Warrant or Warrants
evidenced by this Warrant Certificate shall have been exercised as provided in
the Warrant Agreement.

         THIS WARRANT CERTIFICATE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, AND THE RIGHTS OF THE COMPANY AND THE HOLDER HEREOF SHALL BE GOVERNED BY,
THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS (OTHER THAN ITS CONFLICTS OF LAW
PRINCIPLES). THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO
AGREEMENTS, COVENANTS AND RESTRICTIONS PROVIDED IN THE VOTING AND CO-SALE
AGREEMENT DATED MARCH 20, 2001, AND THE SECURITIES PURCHASE AGREEMENT DATED
MARCH 20, 2001, EACH AS AMENDED FROM TIME TO TIME, BY AND AMONG THE COMPANY AND
THE PERSONS NAMED THEREIN. A COPY OF SUCH AGREEMENTS MAY BE OBTAINED BY ANY
HOLDER OF THIS WARRANT UPON REQUEST WITHOUT CHARGE FROM THE SECRETARY OF THE
COMPANY AT THE PRINCIPAL OFFICE OF THE COMPANY.

WITNESS the signature of a proper officer of the Company as of the date first
above written.

ATTEST:                                       LBI HOLDINGS I, INC.

                                      A-3



______________________________                By:_____________________________
Secretary                                          Name:
                                                   Title:

                                      A-4



                              [FORM OF ASSIGNMENT]
       (To be executed by the registered holder if such holder desires to
                       transfer the Warrant Certificate)

         FOR VALUE RECEIVED, _______________________________ hereby sells,
assigns and transfers unto
_________________________________________________________________________
(Please print name, address and taxpayer identification number or social
security number of transferee.) the accompanying Warrant Certificate, together
with all right, title and interest therein, and does hereby irrevocably
constitute and appoint: ___________________________________________ attorney, to
transfer the accompanying Warrant Certificate on the books of the Company, with
full power of substitution.
Dated:  _________________, ______.



                                                           _____________________
                                                           Signature of Holder

                                     NOTICE

         The signature to the foregoing Assignment must correspond to the name
as written upon the face of the accompanying Warrant Certificate or any prior
assignment thereof in every particular, without alteration or enlargement or any
change whatsoever.



                         [FORM OF ELECTION TO PURCHASE]

                   (To be executed by the registered holder if
            such holder desires to exercise the Warrant Certificate)

To: ___________:

The undersigned hereby irrevocably elects to exercise _____ Warrants represented
by the accompanying Warrant Certificate to purchase the shares of Common Stock
issuable upon the exercise of such Warrants and requests that certificates for
such shares be issued in the name of:

_________________________________________________________________________
(Please print name and address.)

_________________________________________________________________________
(Please insert social security or other identifying number.)

If such number of Warrants shall not be all the Warrants evidenced by the
accompanying Warrant Certificate, a new Warrant Certificate for the balance
remaining of such Warrants shall be registered in the name of and delivered to:

_________________________________________________________________________
(Please print name and address.)

_________________________________________________________________________
(Please insert social security or other identifying number.)

Dated:  __________,_____.



                                                       _____________________
                                                       Signature of Holder

                                     NOTICE

         The signature to the foregoing Election to Purchase must correspond to
the name as written upon the face of the accompanying Warrant Certificate or any
prior assignment thereof in every particular, without alteration or enlargement
or any change whatsoever.

EX-10.10

                                                                   Exhibit 10.10

                    SUBORDINATION AND INTERCREDITOR AGREEMENT

       AGREEMENT, dated as of March 20, 2001 (the "Agreement"), by and among (a)
LBI Holdings I, Inc., a California corporation ("Holdings I"), (b) Alta
Communications VIII, L.P., Alta-Comm VIII S By S, LLC, Alta Communications
VIII-B, L.P., Alta VIII Associates, LLC, California State Teachers' Retirement
System, BancBoston Investments Inc. and UnionBanCalequities, Inc. (collectively,
the "Subordinated Creditors" and each individually a "Subordinated Creditor"),
and (c) Oaktree Capital Management, LLC, individually and as agent for the
Holders under the Notes Purchase Agreement described below (the "Agent").

                         W I T N E S S E T H  T H A T :

       In order to induce the Agent and the Holders to enter into the Notes
Purchase Agreement described in Section 1.1 below and to induce the Holders to
purchase the Notes as contemplated therein, Holdings I and the Subordinated
Creditors hereby agree with the Agent that so long as any Notes or any part of
the Senior Indebtedness described in Section 1.2 below is outstanding, each of
Holdings I and the Subordinated Creditors will comply with such of the-
following provisions as are applicable to it:

       1.     Certain Definitions and other Interpretative Matters.


       1.1.   Reference to Notes Purchase Agreement; Senior Credit Agreement and
              Senior Subordination Agreement.


                     (a)    Reference is made herein to the Notes Purchase
Agreement of even date herewith, by and among LBI Intermediate Holdings, Inc.
(the "Borrower"), the Purchasers party thereto, and the Agent, as amended and
supplemented from time to time (such Notes Purchase Agreement, and any
amendment, restatement, renewal, refunding, refinancing or replacement thereto,
the "Notes Purchase Agreement"). Capitalized terms defined in the Notes Purchase
Agreement and not otherwise defined herein are used herein with the meanings so
defined.

                     (b) Reference is further made herein to (i) the Credit
Agreement of even date herewith, by and among LBI Holdings II, Inc., the
guarantors party thereto, the lenders party thereto, Fleet National Bank, as
administrative agent (the "Administrative Agent"), Union Bank of California,
N.A., as syndication agent and CIT Lending Services Corporation and General
Electric Capital Corporation; as co-documentation agents (such Credit Agreement,
and any amendment, restatement, renewal, refunding, refinancing or replacement
thereto, including, without limitation, any such change to the Credit Agreement
which increases the amount of indebtedness thereunder, the "Senior Credit
Agreement"), and (ii) the Subordination and Intercreditor Agreement of even date
herewith, by and among the Subordinated Creditors and the Administrative Agent
(as used herein, as modified and amended from time to time, the "Senior
Subordination Agreement"). Notwithstanding anything herein to the contrary, to
the extent the rights of holders of Senior Indebtedness or obligations of the
Subordinated Creditors hereunder directly conflict with the rights of holders of
Senior Indebtedness (as defined in the Senior Subordination Agreement) or the
obligations of the Subordinated Creditors (as defined in the Senior
Subordination Agreement) under the Senior Subordination Agreement, the
conflicting



rights and obligations under the Senior Subordination Agreement shall have
priority over and supersede the obligations hereunder; provided, that, upon
satisfaction of such conflicting rights and/or obligations under the Senior
Subordination Agreement, the holders of Senior Indebtedness hereunder may
promptly exercise their rights, and the Subordinated Creditors shall promptly
satisfy their obligations, hereunder. For the avoidance of doubt, nothing in
this Section 1.1 (b) or the Senior Subordination Agreement shall, in any manner,
limit or otherwise restrict the consent or approval rights of the Agent or
holders of Senior Indebtedness hereunder. Neither anything in this Agreement,
nor any inaction on the part of holders of Senior Indebtedness (as defined in
the Senior Subordination Agreement) under the Senior Subordination Agreement or
the Subordinated Creditors (as defined in the Senior Subordination Agreement)
under the Senior Subordination Agreement, shall under any circumstances limit or
adversely affect in a material respect the rights of the holders of such Senior
Indebtedness or the obligations of such Subordinated Creditors. For purposes of
this Agreement, the term "Senior Credit Satisfaction" shall mean the repayment
in full of all loans, advances, extensions of credit and other fees and direct
monetary obligations (including, without limitation, interest which accrues
after the commencement of any proceeding in respect of any Reorganization), and
the termination of all commitments, under the Credit Agreement.

              By way of clarification, and not in limitation of the foregoing,
the Senior Subordination Agreement (and any provision thereof) may be waived,
amended or changed in any manner without the consent of the holders of Senior
Indebtedness under this Agreement.

              1.2.   Senior Indebtedness. The term "Senior Indebtedness" shall
mean all loans, advances, extensions of credit and other indebtedness,
obligations and liabilities of the Borrower and any of its direct and indirect
subsidiaries of the Borrower (together with the Borrower, the "Credit Parties")
to the Agent or any Holder, their successors and assigns, now existing or
hereafter arising, direct or indirect, absolute or contingent, secured or
unsecured, arising out of or in connection with the Notes Purchase Agreement or
any of the other Notes Purchase Documents, any and all interest payable pursuant
to the Notes Purchase Agreement and/or any Notes at the interest rates provided
therein (including, without limitation, interest which accrues after the
commencement of any proceeding in respect of any Reorganization, as hereinafter
defined), all premium and termination fees, if any, payable in accordance with
the terms of the Notes Purchase Documents and all other fees, expenses, and
other amounts due from time to time under the Notes Purchase Documents. The term
"Senior Indebtedness" shall include all amounts payable under the "Notes
Purchase Documents" in accordance with their terms irrespective of whether any
Credit Party may be excused from payment of any interest, fees or other amounts
payable thereunder as a result of any Reorganization (as defined in Section
3.3). All Senior Indebtedness shall be entitled to the benefit of this Agreement
without notice thereof being given to any Subordinated Creditor.

              1.3.   Subordinated Indebtedness. The term "Subordinated
Indebtedness" shall mean all existing and hereafter arising indebtedness,
obligations and liabilities of the Companies or the, shareholders of Holdings I
to the Subordinated Creditors, whether direct or contingent, and all claims,
rights, causes of action, judgments and decrees in respect of the foregoing,
including, without limitation: (i) all indebtedness and obligations under (a)
the Junior Subordinated Promissory Notes dated the date hereof and issued by
Holdings I to the Subordinated Creditors in the aggregate principal amount of
$30,000,000 on the date hereof

                                        2



pursuant to that certain Securities Purchase Agreement dated the date hereof
among Holdings I and the Subordinated Creditors (as the same may be amended from
time to time, the "Subordinated Investment Agreement") and (b) all promissory
notes hereafter issued by Holdings I to the Subordinated Creditors, including,
without limitation, all promissory notes issued in respect of payment in kind
interest and all promissory notes issued pursuant to the Subordinated Investment
Agreement (all such notes described in the preceding clauses (a) and (b) being
hereafter referred to collectively, as the same may be amended from time to
time, as the "Subordinated Notes"), (ii) all indebtedness and obligations under
(a) the Warrants dated the date hereof and issued by Holdings I to the
Subordinated Creditors for 14.02 shares of Common Stock of Holdings I on the
date hereof pursuant to that certain Warrant Agreement dated the date hereof
among Holdings I and the Subordinated Creditors (as the same may be amended from
time to time, the "Warrant Agreement") and (b) all warrants hereafter issued
pursuant to the Warrant Agreement (all such warrants described in the preceding
clauses (a) and (b) being hereafter referred to collectively, as the same may be
amended from time to time, as the "Warrants"), (iii) all indebtedness and
obligations under that certain Voting and Co-Sale Agreement dated the date
hereof among Holdings I and the Subordinated Creditors (as the same may be
amended from time to time, the "Voting and Co-Sale Agreement"), (iv) all
indemnification and other obligations of each party (other than the Subordinated
Creditors) under the Subordinated Investment Agreement, the Warrant Agreement
and the Voting and Co-Sale Agreement (the Subordinated Notes, the Warrants, the
Subordinated Investment Agreement, the Warrant Agreement and the Voting and
Co-Sale Agreement and any other agreement evidencing or relating to Subordinated
Indebtedness being hereinafter collectively referred to as the "Subordinated
Agreements") and (v) all obligations of Holdings I to repurchase or redeem the
Subordinated Notes or the Warrants (together with the Subordinated Notes, the
"Subordinated Securities") whether pursuant to a put under the Warrant Agreement
or otherwise from the Subordinated Creditors pursuant to the terms of the
Subordinated Investment Agreement, the Warrant Agreement or otherwise.

                     For the purposes of this Agreement, the term "Subordinated
Creditors" shall mean the Subordinated Creditors named in the preamble to this
Agreement, their respective heirs, successors and assigns, and any and all
assignees or holders of Subordinated Indebtedness.

       2.     Representations and Warranties. Holdings I hereby represents and
warrants (with respect to clauses (a) and (b) only) to the Agent for the benefit
of each Holder, and each Subordinated Creditor hereby represents and warrants
(with respect to clauses (a) and (c) only) to the Agent for the benefit of the
Holders with respect to the Subordinated Indebtedness which it holds, that:

       (a)    At the date hereof, the total outstanding and unpaid Subordinated
Indebtedness owing by Holdings I to the respective Subordinated Creditors is
equal to the full face amount of the Subordinated Notes held by such
Subordinated Creditors, plus the amounts, if any, required to be paid in
connection with any repurchase or redemption of the Warrants in accordance with
the Warrant Agreement;

       (b)    There is no default in respect of the Subordinated Indebtedness;
and

                                       3



       (c)    The Subordinated Creditors are the holders of the Subordinated
Indebtedness free and clear of all liens, claims and encumbrances, and no
Subordinated Creditor is subject to any contractual limitation or restriction
which would impair in any way its ability to execute or perform its obligations
under the Agreement.

       3.     Terms of Subordination.

              3.1.   No Transfer. The Subordinated Creditors will not sell,
exchange, assign, pledge or otherwise transfer any of the Subordinated
Indebtedness, including, without limitation, the Subordinated Notes and the
Warrants, without the prior written consent of the Agent in its sole discretion;
provided, however, that the consent of the Agent shall not be required for a
sale or other transfer by a Subordinated Creditor to an Eligible Fund (as
hereinafter defined) of such Subordinated Creditor. Notwithstanding the
foregoing, no sale or other transfer of any Subordinated Indebtedness shall be
effective unless and until the proposed transferee shall agree in writing
pursuant to an agreement in form and substance acceptable to the Agent to become
a party hereto and unless such sale or other transfer is effected in accordance
with the Subordinated Agreements. The Subordinated Creditors shall give the
Agent at least thirty (30) days (or, in the case of a proposed transfer to an
Eligible Fund of such Subordinated Creditor, 10 days) prior written notice of
any such proposed sale, exchange, assignment, pledge or other transfer stating
the identity of the transferee and providing such other information as the Agent
shall reasonably require. As used herein, "Eligible Fund" means, with respect to
any Subordinated Creditor that is a fund that invests in commercial loans or
subordinated indebtedness, any other fund that invests in commercial loans or
subordinated indebtedness and is managed by the same investment manager as such
Subordinated Creditor.

              3.2.   Payment and Performance Subordinated. Notwithstanding
anything to the contrary in the Subordinated Agreements and the Subordinated
Securities, the payment and performance of the Subordinated Indebtedness is and
shall be expressly subordinate and junior in right of payment and exercise of
remedies to the prior payment in full in cash of the Senior Indebtedness to the
extent and in the manner provided herein, and the Subordinated Indebtedness is
hereby subordinated as a claim against Holdings I, the Borrower and the other
Credit Parties (Holdings I and the Credit Parties being sometimes hereinafter
referred to collectively as the "Companies" or each individually as a "Company")
or any of the assets of, or ownership interests in, such parties whether such
claim be in the event of any distribution of the assets of any such party upon
any voluntary or involuntary dissolution, winding-up, total or partial
liquidation or reorganization, or bankruptcy, insolvency, receivership or other
statutory or common law proceedings or arrangements involving any such party or
the readjustment of the liabilities of any such party or any assignment for the
benefit of creditors or any marshaling of the assets or liabilities of any such
party (collectively called a "Reorganization"), or otherwise. In furtherance of
the foregoing, Holdings I will not make, and the Subordinated Creditors will not
demand, accept or receive, any payment of interest, principal or any payment in
respect of the Subordinated Indebtedness, including, without limitation, any
amounts in connection with a put of the Subordinated Securities pursuant to the
Warrant Agreement, or otherwise in respect of Subordinated Indebtedness, until
all the Senior Indebtedness has been indefeasibly paid in full in cash, except
as permitted pursuant to Section 3.6 hereof

                                        4



              3.3.   Distribution in Reorganization. (a) In the event of any
Reorganization relative to any Company or its property, all of the Senior
Indebtedness shall first be paid in full in cash before any payment on account
of principal, premium or interest or otherwise is made upon or in respect of the
Subordinated Indebtedness, and in any such proceedings any payment or
distribution of any kind or character, whether in cash or property or securities
which may be payable or deliverable in respect of the Subordinated Indebtedness
shall, after Senior Credit Satisfaction, be paid or delivered directly to the
Agent for application in payment of the Senior Indebtedness, unless and until
all such Senior Indebtedness shall have been paid and satisfied in full in cash.
Each holder of Subordinated Indebtedness does hereby authorize the Agent, after
Senior Credit Satisfaction, to accept and receive any payment or distribution
and to apply such payment or distribution to the payment of the then unpaid
Senior Indebtedness, and to do any and all things and execute all instruments
necessary to effectuate the foregoing. Upon request by any Subordinated
Creditor, the Agent shall provide such Subordinated Creditor with a written
accounting of all such payments and distributions received and the application
thereof. In the event that upon any such Reorganization, any payment or
distribution of assets of any Company, of any kind or character, whether in
cash, property or securities, shall be received by any Subordinated Creditor
before all Senior Indebtedness is paid in full in cash, after Senior Credit
Satisfaction, such payment or distribution shall be immediately paid over to the
Agent for application to the payment of all Senior Indebtedness remaining unpaid
until all such Senior Indebtedness is paid in full in cash, after giving effect
to any concurrent payment or distribution to the Agent.

              (b)    Each Subordinated Creditor, for itself and its heirs,
legatees, successors and assigns, hereby irrevocably authorizes and directs the
Agent, and any trustee in bankruptcy, receiver, custodian or assignee for the
benefit of creditors of any of the Companies, whether in voluntary or
involuntary liquidation, dissolution or reorganization, in its behalf to take
such action as may be necessary or appropriate to effectuate the subordination
provided for in this Agreement and irrevocably appoints, which appointment is
coupled with an interest, upon any Default or Event of Default under the Notes
Purchase Agreement and during the continuance thereof and upon any failure to
comply with the terms of this Agreement, the Agent, or any such trustee,
receiver, custodian or assignee, its attorneys-in-fact for such purpose with
full powers of substitution and revocation.

              (c)    After Senior Credit Satisfaction, each Subordinated
Creditor hereby irrevocably appoints, which appointment is irrevocable and
coupled with an interest, the Agent as such Subordinated Creditor's true and
lawful attorney, with full power of substitution, in the name of such
Subordinated Creditor, the Agent, the Holders or otherwise, for the sole use and
benefit of the Agent, to the extent permitted by law, to prove and vote all
claims relating to the Subordinated Indebtedness (and, upon request by any
Subordinated Creditor, the Agent shall provide to such Subordinated Creditor
copies of all written materials filed with respect thereto), and to enforce all
such claims and to receive and collect all distributions and payments to which
each Subordinated Creditor would otherwise be entitled on any liquidation of any
Company or any of its property or in any proceedings affecting any Company or
its property under any bankruptcy or insolvency laws or any laws or proceedings
relating to the relief of any Company, readjustment, composition or extension of
indebtedness or Reorganization. The Subordinated Creditors agree hereafter to
promptly execute and deliver to the Agent all such further instruments
confirming the above authorization and such powers of attorney, proofs of claim,

                                        5



assignments of claim and other instruments as may be requested by the Agent, on
behalf of the Holders, to enforce all claims upon or in respect of the
Subordinated Indebtedness.

              (d)    At any meeting of creditors of any of the Companies or in
the event of any case or proceeding, voluntary or involuntary, for the
distribution, division or application of all or part of the assets of any of the
Companies or the proceeds thereof, whether such case or proceeding be for the
liquidation, dissolution or winding up of any of the Companies or their
respective businesses, a receivership, insolvency or bankruptcy case or
proceeding, an assignment for the benefit of creditors or a proceeding by or
against any of the Companies for relief under the federal Bankruptcy Code or any
other bankruptcy, reorganization or insolvency law or any other law relating to
the relief of debtors, readjustment of indebtedness, Reorganization,
arrangement, composition or extension or marshalling of assets or otherwise, the
Agent is hereby irrevocably authorized to receive or collect, after Senior
Credit Satisfaction, any cash or other assets of any of the Companies
distributed, divided or applied by way of dividend or payment, or any securities
issued on account of any Subordinated Indebtedness, and apply such cash to or to
hold such other assets or securities as collateral for the Senior Indebtedness,
and to apply to the Senior Indebtedness any cash proceeds of any realization
upon such other assets or securities that the Agent, in its discretion, elects
to effect, until all of the Senior Indebtedness shall have been indefeasibly
paid in full in cash, rendering to the Subordinated Creditors any surplus to
which the Subordinated Creditors are then entitled. Upon request by any
Subordinated Creditor, the Agent shall provide such Subordinated Creditor with a
written accounting of all such applications of cash proceeds.

              (e)    At any such meeting of creditors or in the event of any
such case or proceeding, the Subordinated Creditors shall not vote and otherwise
act with respect to the Subordinated Indebtedness (including, without
limitation, the right to vote to accept or reject any plan of Reorganization),
and, after Senior Credit Satisfaction, the Agent is hereby irrevocably
authorized by each of the Subordinated Creditors to vote and otherwise act with
respect to the Subordinated Indebtedness at any such meeting or in any such
proceeding.

              (f)    Notwithstanding the foregoing provisions of this Section
3.3, the Subordinated Creditors shall be entitled to receive and retain any
securities of Holdings I provided for by a plan of reorganization or
readjustment or the like, the payment of which securities is subordinate, at
least to the extent provided in this Agreement with respect to the Subordinated
Indebtedness, to the payment of all Senior Indebtedness.

              3.4.   Effect of Provisions. The provisions hereof as to
subordination are solely for the purpose of defining the relative rights of the
holders of Senior Indebtedness, on the one hand, and the Subordinated Creditors,
on the other hand, and none of such provisions shall impair, as between Holdings
I and the Subordinated Creditors, the obligations of Holdings I to pay to the
Subordinated Creditors in accordance with the terms of the Subordinated
Indebtedness, nor, except as provided in Section 8 below, shall any such
provisions prevent the Subordinated Creditors from exercising all rights and
remedies otherwise permitted by applicable law or under the terms of the
applicable Subordinated Agreements upon a default thereunder or otherwise,
subject to the rights, if any, of the holders of Senior Indebtedness under the
provisions of this Agreement.

                                        6



              3.5.   Subrogation, Etc. Each Subordinated Creditor hereby waives
all rights to be subrogated to the Holders' rights in respect of payments or
distributions of assets of, or ownership interest in, the Companies made on the
Senior Indebtedness, until the Senior Indebtedness has been paid in full in
cash.

              3.6.   Permitted Payments of Subordinated Indebtedness. (a)
Holdings I may issue to each holder of Subordinated Indebtedness additional
Subordinated Notes as payment in kind for interest accrued on the Subordinated
Indebtedness held by such Subordinated Creditor and Holdings I may issue to the
Subordinated Creditors additional Warrants in accordance with the Warrant
Agreement. Each such additional Subordinated Note shall have payment terms
(including, without limitation, maturity date and the absence of any scheduled
payments of principal, interest or other amounts prior to such maturity date)
identical to the initial Subordinated Notes, including, without limitation, the
payment restrictions of this Agreement, and shall otherwise be substantially
identical to the initial Subordinated Notes, except for any differences in the
principal amount of any such additional Subordinated Note. Each such additional
Warrant shall have payment terms (including, without limitation, any terms
relating to any put or redemption thereof) identical to the initial Warrants,
including, without limitation, the payment restrictions of this Agreement, and
shall otherwise be substantially identical to the initial Warrants, except for
any differences in the purchase price thereof or the number of shares of Common
Stock of Holdings I which may be purchased upon the exercise thereof. If
Holdings I issues any additional Subordinated Note or Warrant pursuant to this
Section 3.6(a), such delivery shall be deemed to constitute a representation of
Holdings I to the Holders and to the Subordinated Creditors that such issuance
by Holdings I is not prohibited under this Agreement. Until all Senior
Indebtedness has been paid in full, Holdings I shall not issue any instrument,
security or other writing evidencing any part of the Subordinated Indebtedness
except the additional Subordinated Notes as permitted by this Section 3.6(a) and
the additional Warrants issued in accordance with this Section 3.6(a); and the
Subordinated Creditors shall not assign or subordinate any part of the
Subordinated Indebtedness except in accordance with Section 3.1.

              (b)    Holdings I may pay to the Subordinated Creditors, and the
Subordinated Creditors may accept and retain (i) payments of accrued interest on
the Subordinated Notes on (but in no event prior to) the original, scheduled
maturity date (determined without giving effect to any acceleration of such date
pursuant to the Subordinated Agreements or otherwise) set forth in the
Subordinated Investment Agreement, as in effect on the date hereof, at a per
annum rate not exceeding the rate at which interest is stated to accrue
thereunder in the absence of a default under any of the Subordinated Agreements,
unless at the time of such proposed payment or immediately after giving effect
thereto, there shall exist any Event of Default, (ii) payments of principal
under the Subordinated Notes on (but in no event prior to) the original,
scheduled maturity date (determined without giving effect to any acceleration of
such date pursuant to the Subordinated Agreements or otherwise) set forth in the
Subordinated Investment Agreement, as in effect on the date hereof, in the
amounts required to be paid thereunder on such maturity date, unless at the time
of such proposed payment or immediately after giving effect thereto, there shall
exist any Event of Default and (iii) payments required to be made by Holdings I
under Section 12.1 of the Subordinated Investment Agreement, as in effect on the
date hereof, constituting expense reimbursements for the fees and disbursements
of one general counsel for the Subordinated Creditors and one FCC counsel for
the Subordinated Creditors incurred by the

                                        7



Subordinated Creditors in connection with the preparation and negotiation of the
Subordinated Agreements or any amendments or modifications thereof permitted by
Section 8(b) and for out-of-pocket expenses incurred by the Subordinated
Creditors in connection with attendance by the Subordinated Creditors at
meetings of the Board of Directors of Holdings I, in each case as and at the
times when such reimbursements are due and payable thereunder. If any holder of
Subordinated Indebtedness receives payment or reimbursement from Holdings I in
accordance with clause (i) or (ii) of the immediately preceding sentence, such
payment shall be deemed to constitute a representation of Holdings I to the
Agent and the Holders that no Event of Default exists, and that such payment is
permitted to be paid by Holdings I under this Agreement; and the Subordinated
Creditors shall be entitled to keep and retain such payment unless, prior to the
Clawback Date (as hereinafter defined), the Agent shall have notified the
Subordinated Creditors in writing of an Event of Default, in which case (if such
Event of Default in fact existed on the date of such payment) the Subordinated
Creditors shall forthwith deliver such payment or an amount of cash equal
thereto to the Agent for application in payment of the Senior Indebtedness.

              (c)    As used herein, the term "Clawback Date" shall mean (i)
with respect to any Payment Default (as hereinafter defined), 60 days after the
occurrence thereof, (ii) with respect to any Event of Default caused by the
failure by the Credit Parties to comply with the provisions of Section 7.8 of
the Notes Purchase Agreement for any period of time, 60 days after the Agent and
Holders shall have received the financial statements and Compliance Certificate
required to be delivered in respect of such period then most recently ended
pursuant to Section 7.3 of the Notes Purchase Agreement and (iii) with respect
to any Event of Default other than those specified in clauses (i) and (ii), 60
days after the Agent and Holders knew or, in the exercise of reasonable
diligence, should have known, of such Event of Default. As used herein, the term
"Payment Default" shall mean any Event of Default under Section 9.1(a) or 9.1(b)
of the Notes Purchase Agreement. No Payment Default shall be deemed to have been
cured unless the full amount of the overdue payment to which such Payment
Default relates shall have been paid in full prior to any acceleration of the
Senior Indebtedness or unless waived by the then holders of the Senior
Indebtedness as provided in the Notes Purchase Agreement.

              (d)    Notwithstanding anything herein or in the Subordinated
Agreements to the contrary, until such time as all Senior Indebtedness has been
indefeasibly paid in full in cash, (i) Holdings I will not make, and the
Subordinated Creditors will not demand, accept or receive, any payments of cash
under the Subordinated Agreements (including, without limitation, under the
Subordinated Notes or the Warrants (including amounts in respect of a put or
repurchase of the Warrants)) or otherwise in respect of the Subordinated
Indebtedness, except as expressly permitted by Section 3.6(b), and (ii) Holdings
I will not make, and the Subordinated Creditors will not demand, accept or
receive any payment of any other assets of any kind under the Subordinated
Agreements or otherwise in respect of the Subordinated Indebtedness, except for
the additional Subordinated Notes and Warrants issued in accordance with Section
3.6(a).

       4.     Agreement to Hold In Trust; Defense to Enforcement. If any holder
of Subordinated Indebtedness shall receive any payment on account of the
Subordinated Indebtedness in violation of this Agreement, it shall, after Senior
Credit Satisfaction, hold such payment in trust for the benefit of the holder or
holders of the Senior Indebtedness and pay it over to the Agent for application
in payment of the Senior Indebtedness. If any holder of Subordinated
Indebtedness, in contravention of the terms of this Agreement, shall commence,

                                        8



prosecute or participate in any suit, action or proceeding against Holdings I,
then Holdings I may interpose a defense or plea the making of this Agreement and
the Agent may intervene and interpose such defense or plea in its name or in the
name of Holdings I. If any holder of Subordinated Indebtedness, in contravention
of the terms of this Agreement, shall attempt to collect any of the Subordinated
Indebtedness or enforce any of the Subordinated Agreements or Subordinated
Securities, then the Agent or Holdings I may, by virtue of this Agreement,
restrain the enforcement thereof in the name of the Agent and the Holders, or in
the name of Holdings I. If any holder of Subordinated Indebtedness, in
contravention of this Agreement, obtains any cash or assets of any Company as a
result of any administrative, legal or equitable actions, or otherwise, after
Senior Credit Satisfaction, such holder agrees forthwith to pay, deliver and
assign to the Agent, for the benefit of the Holders and the Agent, with
appropriate endorsements, any such cash for application to the Senior
Indebtedness and any other assets as collateral for the Senior Indebtedness.

       5.     No Security to the Subordinated Creditors. Holdings I shall not
grant, and shall not permit any other Company to grant, and no Subordinated
Creditor shall accept, any security of any nature in property, real or personal,
of any Company to secure Subordinated Indebtedness. Any security interest
granted in violation of the terms of this Agreement shall be null and void and
of no force and effect against the holders of the Senior Indebtedness.

       6.     Requirement of Notice. (a) Each Subordinated Creditor agrees to
notify the Holders immediately upon the happening of any of the following:

                     (i)    Such Subordinated Creditor becoming aware of the
                            occurrence of any event of default under any of the
                            Subordinated Agreements or any event which, upon
                            notice or lapse of time or both, would constitute
                            such an event of default;

                     (ii)   The delivery of any "Put Notice" pursuant to Section
5 of the Warrant Agreement;

                     (iii)  The delivery of any "Board Change Notice" pursuant
to Section 2.1 of the Voting and Co-Sale Agreement;

                     (iv)   Any election for a "Sale of the Company" pursuant to
Section 2.1 of the Voting and Co-Sale Agreement;

                     (v)    The waiver by a Subordinated Creditor of any event
of default under any of the Subordinated Agreements; and

                     (vi)   Acceleration of the Subordinated Indebtedness.

              (b)    The Agent agrees to notify the Subordinated Creditors upon
                     the occurrence of the following

                     (i)    The delivery of written notice by the Agent to the
Borrower of the occurrence of an Event of Default;

                                        9



                     (ii)   The waiver by the Agent and the Holders of any Event
of Default in accordance with the terms of the Notes Purchase Agreement; and

                     (iii)  Acceleration of the Senior Indebtedness;

provided, however, that the failure of the Agent to provide any such notice as
required by any of clauses (i) through (iii) of this Section 6(b) shall in no
way impair or otherwise affect the rights of the Agent and the Holders
hereunder, the obligations of the Subordinated Creditors hereunder or the
subordination terms set forth herein.

       7.     Legend. Holdings I and the Subordinated Creditors covenant to
cause each agreement and instrument evidencing any of the Subordinated
Indebtedness (including the Subordinated Securities) issued or executed by
Holdings I and held by a Subordinated Creditor to have affixed upon it a legend
which reads substantially as follows:

              "This instrument/agreement is subject to an Subordination and
              Intercreditor Agreement, dated as of March 20, 2001, among LBI
              Holdings I, Inc., [name of Subordinated Creditor], Oaktree Capital
              Management, LLC, individually and as Agent for certain Holders,
              and others. By its acceptance of this instrument/agreement, the
              holder hereof agrees to be bound by the provisions of such
              Subordination and Intercreditor Agreement to the same extent that
              the Subordinated Creditors (as defined therein) are bound."

       8.     Limit on Right of Action. (a) The Subordinated Creditors agree for
the benefit of the holders of the Senior Indebtedness that so long as any Notes
or any other part of the Senior Indebtedness remains outstanding, the
Subordinated Creditors will not, directly or indirectly, take any action to
accelerate or demand payment by Holdings I of the Subordinated Indebtedness
(including any put of the Warrants pursuant to the Warrant Agreement), to
exercise any of its remedies in respect of the Subordinated Indebtedness
(including any requirement to change the composition of the Board of Directors
of Holdings I or to cause a "Sale of the Company" (as defined in the Voting and
Co-Sale Agreement) pursuant to the Voting and Co-Sale Agreement), whether
pursuant to any Subordinated Agreement, any Subordinated Securities or
otherwise, or in respect of any guarantee of payment thereof, to initiate any
litigation against Holdings I, or to foreclose or otherwise realize on any
security given by Holdings I or any other person to secure the Subordinated
Indebtedness prior to the earlier of (i) a Reorganization or (ii) 180 days after
the receipt by the Agent of written notice of intent to take any such action by
the percentage of Subordinated Creditors required to authorize such action under
the Subordinated Investment Agreement, provided that (x) such notice is given
during the continuance of a "Material Event of Default" under the Subordinated
Investment Agreement caused by the failure of Holdings I to make a payment
permitted to be made under clause (i) or (ii) of Section 3.6(b) hereof and (y)
any proceeds received or recoverable by the Subordinated Creditors in connection
therewith shall be subject to the other provisions of this Agreement.
Notwithstanding anything herein to the contrary, the Subordinated Creditors will
neither commence nor join with any other creditor or creditors of any Company in
commencing any bankruptcy, reorganization or insolvency proceedings against any
Company.

                                       10



              (b)    The Subordinated Creditors shall not amend or permit
amendment of the terms of any instrument or agreement evidencing any
Subordinated Indebtedness (including, without limitation, the Subordinated
Agreements and the Subordinated Securities), the effect of which is to (i)
increase principal, interest, fees, reimbursements or other amounts payable with
respect thereto or create any additional payment obligations thereunder, (ii)
accelerate any scheduled or otherwise required payments of principal, interest,
fees, reimbursements or other amounts, (iii) cause any covenants or other
agreements to be more restrictive upon, or burdensome to, Holdings I, (iv) alter
any event of default or put provisions contained in the Subordinated Agreements
or in the Subordinated Securities, or (v) make any other change which could
reasonably be expected to materially adversely affect the interests of the
Holders, without the prior written consent of the Agent.

       9.     Holdings I's Additional Agreement. Holdings I agrees with the
Agent that it will not, without the Agent's prior written consent, execute or
deliver any negotiable instrument as evidence of the Subordinated Indebtedness
or any part thereof, except as otherwise permitted by this Agreement.

       10.    The Subordinated Creditors' Junior Security. Without in any way
limiting the prohibition set forth in Section 5, each Subordinated Creditor
hereby confirms that if, at any time, the Subordinated Indebtedness shall be or
become so secured by any such security interest or lien in breach of this
Agreement or with the consent of the Agent or the Holders or otherwise,
regardless of the relative times and method of attachment or perfection thereof
or the order of filing of financing statements, mortgages or other security
agreements or documents, or anything in the Subordinated Agreements or this
Agreement to the contrary, the security interests and liens granted or to be
granted from time to time to secure the Senior Indebtedness, if any, shall in
all respects be superior to any security interests and liens granted or to be
granted to the Subordinated Creditors in assets of, or ownership interests in,
the Credit Parties or any other person pursuant to the Subordinated Agreements
or otherwise, it being the express intention of the parties that,
notwithstanding anything in this Agreement to the contrary, all liens and
security interests granted to the Agent on behalf of the Holders from time to
time shall be prior and superior to any liens or security interests granted to
the Subordinated Creditors. In foreclosing on the Holders' security interests
and liens in any collateral of the Companies ("Collateral"), so long as the
Agent proceeds in a commercially reasonable manner, the Agent may proceed to
foreclose on the Holders' security interests and liens in any manner which the
Agent, in its sole discretion, chooses, even though a higher price might have
been realized if the Agent had proceeded to foreclose on the Holders' security
interests and liens in another manner.

       11.    Release of Collateral. Without limiting any of the rights
(including any of the foreclosure rights) of the Agent on behalf of the Holders
under the Notes Purchase Documents or any documents delivered to secure the
obligations of the Credit Parties to the Holders in connection therewith or
under the provisions of any applicable law, if any, and without limiting the
prohibition set forth in Section 5, in the event that the Agent releases or
discharges its security interests in, or liens upon, any Collateral which is
subject to a lien or security interest in favor of any Subordinated Creditor,
such Collateral shall thereupon be deemed to have been released from all such
liens and security interests. Each Subordinated Creditor agrees that within ten
(10) days following the Agent's written request therefor, it will execute,
deliver and file any and all such termination statements, lien releases and
other agreements and instruments as the

                                       11



Agent reasonably deems necessary or appropriate in order to give effect to the
preceding sentence. Each Subordinated Creditor hereby irrevocably appoints the
Agent the true and lawful attorney of such Subordinated Creditor for the purpose
of effecting any such executions, deliveries and filings.

       12.    Rights of Holders to Amend Notes Purchase Documents and
Discontinue Senior Indebtedness, etc. The Agent and the Holders hereby reserve
the right, in their sole discretion, and without notice to the Subordinated
Creditors, to modify, amend, waive or release any of the terms of the Notes
Purchase Documents, or any other document or agreement at any time executed by
any Credit Party or any other person securing the Senior Indebtedness or any
other document executed in connection with the Senior Indebtedness or of any
other document relative thereto and to exercise or refrain from exercising any
powers, remedies or rights which the Agent or any Holder may have thereunder,
and such modification, amendment, waiver, release, exercise or failure to
exercise shall not affect any of the Holders' rights under this Agreement. Each
Subordinated Creditor hereby agrees that the Agent and the Holders may from time
to time in their sole discretion amend the instrument and agreements evidencing
the Senior Indebtedness, grant extensions of time of payment or performance and
make compromises and settlements with the Credit Parties or other creditors of
the Credit Parties, without affecting the agreements of the Subordinated
Creditors or Holdings I hereunder. If at any time hereafter, the Agent or the
Holders shall, in their sole discretion, determine to discontinue the extension
of credit to the Credit Parties or demand payment of the Senior Indebtedness, it
may do so without notice to the Subordinated Creditors. The failure on the part
of the Holders or the Agent to insist upon the strict performance of any term,
condition or other provision of this Agreement or any Note Purchase Document, or
to exercise any right or remedy hereunder or thereunder, shall not affect or
alter this Agreement or any Note Purchase Document, and each and every term,
condition and other provision of this Agreement, the Subordinated Notes and the
Notes Purchase Documents shall, in such event, continue in full force and effect
and shall be operative with respect to any other then existing or subsequent
default or event of default in connection therewith.

       13.    Further Assurances. Holdings I and each Subordinated Creditor
covenant to execute and deliver to the Agent such further instruments and
documents and take such further actions as the Agent may from time to time
reasonably request, in each case for the purpose of carrying out the provisions
and intent of this Agreement.

       14.    Notices. All notices, requests, demands and other communications
hereunder shall be in writing and either mailed, sent by nationally recognized
overnight courier service, or delivered to the applicable party, at the
respective addresses indicated below:

       if to Holdings I, to the following address:
              LBI Holdings I, Inc.
              1813 Victory Place
              Burbank, California 91504
              Facsimile: (818) 558-4244
              Attention: Executive Vice President

                                       12



              with a copy (which shall not constitute notice) to:
              O'Melveny & Myers LLP
              400 South Hope Street
              Los Angeles, California 90071
              Facsimile: (213) 430-6407
              Attention: Joseph K. Kim, Esquire

       if to the Agent, to the following address:

              Oaktree Capital Management, LLC
              1301 Avenue of the Americas
              New York, New York 10019
              Facsimile:(212) 284-1901
              Attention: General Counsel

              with a copy (which shall not constitute notice) to:

              Munger, Tolles & Olson LLP
              355 South Grand Avenue
              Suite 3500
              Los Angeles, California 90071
              Facsimile: (213) 687-3702
              Attention: Kevin S. Masuda, Esquire

       if to the Subordinated Creditors, to the following address:
              c/o Alta Communications, Inc.
              200 Clarenden Street, 51/st/Floor
              Boston, Massachusetts 02116
              Facsimile: (617) 262-9779
              Attention: Robert Emmert

              with a copy (which shall not constitute notice) to:

              Richard G. Small, Esq.
              Edwards & Angell, LLP
              2800 Financial Plaza
              Providence, Rhode Island 02903
              Facsimile: (401) 276-6611


or, as to each party, at such other address as shall be designated by such party
in a written notice to the other parties complying as to delivery with the terms
of this Section. All such notices, requests, demands and other communication
shall be deemed given upon the earliest to occur of (a) the third day following
deposit thereof in the United States mail, (b) twelve noon local time on the
first business day following timely deposit thereof with a nationally recognized
overnight

                                       13



courier service with effective instructions to such courier to make delivery on
the next business day, or (c) receipt by the party to whom such notice is
directed.

     15.  Successors; Continuing Effect; Etc. This Agreement is being entered
into for the benefit of the holders of the Senior Indebtedness and the
Subordinated Indebtedness, and their respective successors and assigns. This
Agreement shall be a continuing agreement and shall be irrevocable and shall
remain in full force and effect until 366 days after all Senior Indebtedness has
been paid in full in cash, provided, that, in the event a Reorganization
proceeding is initiated at any time prior to the expiration of such 366-day
period, this Agreement shall remain in effect until such Reorganization
proceeding is completed and terminated, with all matters with respect thereto
settled and closed. The liability of each Subordinated Creditor hereunder shall
be reinstated and revived, and the Agent's and Holders' rights shall continue,
with respect to any amount at any time paid on account of the Senior
Indebtedness which shall thereafter be required to be restored or returned by
any Holder in any Reorganization (including, without limitation, any repayment
made pursuant to any provision of Chapter 5 of Title 11, United States Code),
all as though such amount had not been paid.

     16.  Entire Agreement; Amendment. This Agreement constitutes the entire
agreement of the parties with respect to the subject matter hereof, and no
modification or waiver of any provision of this Agreement shall in any event be
effective unless the same shall be in writing signed by the Agent and the
Subordinated Creditors (unless such amendment or modification shall impose any
additional obligations upon Holdings I, in which case such amendment or
modification shall also require execution by Holdings I). Further, no
modification or waiver of any material provision of this Agreement shall be
effective unless such modification or waiver is signed by the Bank Agent, which
joins this Agreement for the sole purpose of this provision.

     17.  Consent to Jurisdiction, Waiver of Jury Trial. (a) Each of Holdings I
and the Subordinated Creditors, to the extent that it may lawfully do so, hereby
consents to the jurisdiction of the courts of the State of New York and the
United States District Court for the Southern District of New York, as well as
to jurisdiction of all courts from which an appeal may be taken from such
courts, for the purpose of any suit, action or proceeding arising out of any of
its obligations arising hereunder or the transactions contemplated hereby, and
expressly waives any and all objections it may have as to venue in any of such
courts.

          (b)  EACH OF THE PARTIES HERETO HEREBY WAIVES TRIAL BY JURY IN ANY
ACTION BROUGHT ON OR WITH RESPECT TO THIS AGREEMENT. NEITHER HOLDINGS I, THE
SUBORDINATED CREDITORS NOR ANY ASSIGNEE OF OR SUCCESSOR THERETO, SHALL SEEK A
JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM, OR ANY OTHER LITIGATION OR
PROCEDURE BASED UPON, OR ARISING OUT OF, THIS AGREEMENT, OR ANY OF THE OTHER
DOCUMENTS, INSTRUMENTS AND AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH. NO
PARTY WILL SEEKS TO CONSOLIDATE ANY SUCH ACTION, IN WHICH A JURY TRIAL HAS BEEN
WAIVED, WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN
WAIVED.

     18.  Miscellaneous. THIS AGREEMENT, WHICH MAY BE EXECUTED IN ANY NUMBER OF
COUNTERPARTS, SHALL TAKE EFFECT AS A SEALED INSTRUMENT

                                       14



AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE STATE OF NEW YORK.
Any provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without validating the remaining provisions
hereof or affecting the validity or enforceability of such provision in any
other jurisdiction. The headings in this Agreement are for convenience of
reference only and shall not alter or otherwise affect the meaning hereof.

                                       15



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


                                     SUBORDINATED CREDITORS:

                                     ALTA COMMUNICATIONS VIII, L.P.

                                     By: Alta Communications VIII Managers, LLC,
                                         its General Partner


                                     By: /s/ Eileen McCarthy
                                         ---------------------------------------
                                         Name:
                                         Title:


                                     ALTA-COMM VIII S BY S, LLC


                                     By: /s/ Eileen McCarthy
                                         ---------------------------------------
                                         Name:
                                         Title:


                                     ALTA COMMUNICATIONS VIII-B, L.P.

                                     By: Alta Communications VIII Managers, LLC,
                                         its General Partner


                                     By: /s/ Eileen McCarthy
                                         ---------------------------------------
                                         Name:
                                         Title:



                                    ALTA VIII ASSOCIATES, LLC

                                    By: Alta Communications, Inc.


                                    By: /s/ Eileen McCarthy
                                        ----------------------------------------
                                        Name:
                                        Title:

                                    CALIFORNIA STATE TEACHERS' RETIREMENT SYSTEM


                                    By: /s/ Christopher J. Ailman
                                        ----------------------------------------
                                        Name:  Christopher J. Ailman
                                        Title: Chief Investment Officer


                                    BANCBOSTON INVESTMENTS INC.


                                    By: /s/ Lars A. Swanson
                                        ----------------------------------------
                                        Name:  Lars A. Swanson
                                        Title: Director


                                    UNIONBANCALEQUITIES, INC.


                                    By: /s/ J. Kevin Sampson
                                        ----------------------------------------
                                        Name:  J. Kevin Sampson
                                        Title: Vice President



                                    OAKTREE CAPITAL MANAGEMENT, LLC,
                                    Individually and as Agent for the Holders


                                    By: /s/ Patricia Wachtell
                                        ----------------------------------------
                                        Name: Patricia Wachtell
                                        Title: Managing Director


                                    By: /s/ Kenneth Liang
                                       -----------------------------------------
                                        Name: Kenneth Liang
                                        Title: Managing Director and General
                                               Counsel


                                    Solely with respect to Section 16
                                    ---------------------------------

                                    FLEET NATIONAL BANK, Individually and as
                                    Administrative Agent for the Lenders


                                    By: /s/ Stephen J. Healey
                                        ----------------------------------------
                                        Name:  Stephen J. Healey
                                        Title: Managing Director



                                    HOLDINGS I
                                    ----------

                                    LBI HOLDINGS I, INC.
                                    a California coporation


                                    By: /s/ Lenard Liberman
                                        ----------------------------------------
                                            Lenard Liberman
                                            Executive Vice President

EX-10.11

                                                                   Exhibit 10.11

                            STOCK PURCHASE AGREEMENT

         THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made and entered
into on January 6, 1998, by and among Jose Liberman ("Jose"), Esther Liberman
("Esther"), Lenard D. Liberman ("Lenard"), and LBI Holdings I, Inc., a
California corporation (the "Company"), with respect to the issued and
outstanding shares of Common Stock, $.01 par value, of the Company (the
"Stock").

                                    RECITALS

         A.  Jose and Esther collectively own 100 shares of the Stock,
representing one-half of the Stock. During their joint lifetimes they shall be
required to act jointly, and they shall collectively be deemed to be one
Shareholder. Following the death of the first to die of Jose and Esther, the
survivor shall be deemed to be a Shareholder.

         B.  Lenard owns 100 shares of the Stock, representing one-half of the
Stock.

         C.  Jose and Esther (collectively), the survivor of Jose and Esther,
and Lenard are sometimes referred to hereinafter individually as a "Shareholder"
and collectively as the "Shareholders."

         D.  The Shareholders and the Company believe it to be in their
respective best interests that in the event any Shareholder dies or seeks to
dispose of said Shareholder's Stock, the other of them have the rights to
acquire such Shareholder's Stock as are set forth in this Agreement.

         E.  The Shareholders and the Company have each independently concluded
that the valuation of the Stock provided for in this Agreement is fair and
equitable.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the foregoing and the mutual
Agreements and covenants contained herein, it is mutually agreed and covenanted
by and among the Shareholders and the Company as follows:

         1.  Permissible Transfers. Subject to (i) paragraph 7 below and (ii)
any required prior approval of the Federal Communications Commission (the
"FCC"), each Shareholder may transfer shares of Stock without consideration to
the Shareholder's spouse, children, or other descendants, or to a trust for
their benefit or for the Shareholder's benefit. The transferee shall be bound by
all terms of this Agreement.

         2.  Lifetime Restrictions. Except as provided in paragraph 1 above, and
subject to (i) paragraph 7 below or (ii) any required prior approval of the FCC,
no Shareholder shall transfer, pledge, hypothecate, divide, assign or otherwise
alienate (the foregoing collectively referred to as "transfer") any Stock, or
any right, title or interest therein, without the prior written consent of the
Company and of the other Shareholders, unless the Shareholder shall have first
made the offer to sell hereinafter set forth:



         (a) The offering Shareholder shall deliver a written offer (hereinafter
referred to as the "Offer") to the Company and to the other Shareholders
specifying the number of shares (the "Offered Stock"), the name and address of
the prospective transferee, the proposed price and the other terms of the
transfer. For purposes of this paragraph 2, an Offer by Jose or Esther shall be
deemed to be a joint offer by both of them, and Lenard shall be deemed to be the
only non-offering Shareholder.

         (b) For a period of 30 days following receipt of the written offer, the
Company shall have the option to purchase the Offered Stock, subject to the
restrictions governing the right of a corporation to purchase its Stock under
applicable local law. If the Company exercises the option, the Secretary of the
Company shall give written notice of such exercise to the offering Shareholder.
The terms and conditions of the purchase referred to herein shall be as
specified in the Offer; provided, however, that the price to be paid shall be
the lesser of the price set forth in the Offer or the price determined in
paragraph 5 below. If the Offer specifies that the purchase price is payable
only in cash, or if the Offer relates to a transfer other than a sale, the
Company shall have the election to pay all or part of the purchase price by a
promissory note in the form set forth in Exhibit A attached hereto.

         (c) If the Company does not exercise the option within said 30 days
after receipt of the Offer, the non-offering Shareholder shall, for the ensuing
30-day period, have the option to purchase that portion of the Offered Stock not
purchased by the Company. If the non-offering Shareholder exercises the option
within the aforementioned period, such Shareholder shall give written notice of
such exercise to the offering Shareholder. The terms and conditions of the
purchase referred to herein shall be as specified in the Offer; provided,
however, that the price to be paid shall be the lesser of the price set forth in
the Offer, or the price determined in paragraph 5 below. If the Offer specifies
that the purchase price is payable only in cash, or if the Offer relates to a
transfer other than a sale, the non-offering Shareholder shall have the election
to pay all or part of the purchase price by a promissory note in the form set
forth in Exhibit B attached hereto.

         (d) All Offered Stock not purchased by the Company or by the
non-offering Shareholder within 60 days after receipt of the Offer shall be free
of the terms of this Agreement for the period of the ensuing 30 days, and the
offering Shareholder may make a bona fide transfer to the prospective transferee
named in the Offer according to its terms and conditions. If the offering
Shareholder shall fail to make a transfer of the Offered Stock to the
prospective transferee within said 30-day period, all such untransferred shares
shall again become subject to the terms and restrictions of this Agreement.

         (e) Any transferee of shares transferred pursuant to this paragraph 2,
other than a Shareholder, shall not acquire any rights under, or become a party
to, this Agreement.

                                       2



         3.  Optional Purchase of Shares Upon a Shareholder's Death. Subject to
paragraph 7 below, upon a Shareholder's death, the surviving Shareholder and the
Company shall have the options to purchase the deceased Shareholder's Stock as
set forth below:

             (a) For purposes of this paragraph 3, options under this Agreement
     to purchase Stock owned by Jose or Esther shall arise only upon the death
     of the survivor of them, and said survivor shall be deemed to be the
     deceased Shareholder.

             (b) For the period ending on the later to occur of 180 days after
     the deceased's Shareholder's death or 60 days after the appointment of the
     deceased Shareholder's personal representative, the Company shall have the
     option to purchase the deceased Shareholder's Stock, subject to the
     restrictions governing the right of a corporation to purchase its Stock
     under the applicable local law. The price shall be determined as set forth
     in paragraph 5 below. In the event that this option shall be exercised by
     the Company, the Secretary of the Company shall give written notice of such
     exercise to the deceased Shareholder's personal representative. The Company
     shall pay the purchase price in cash, or, at its election, may pay all or
     part of the purchase price by a promissory note in the form set forth in
     Exhibit A attached hereto.

             (c) If the Company does not exercise the option under this
     paragraph 3 within said period, the surviving Shareholder shall have, for
     the ensuing 90-day period, the option to purchase that portion of the
     shares not purchased by the Company. If the surviving Shareholder exercises
     the option as set forth herein, the surviving Shareholder shall give
     written notice of such exercise to the deceased Shareholder's personal
     representative. The surviving Shareholder shall pay the purchase price in
     cash, or may, at the surviving Shareholder's election, pay all or part of
     the purchase price by a promissory note in the form set forth in Exhibit B
     attached hereto.

                 (d) All offered shares not purchased by the Company or by the
     surviving Shareholder within the foregoing period shall thereafter be free
     of the terms of this Agreement, and the deceased Shareholder's personal
     representative may make a bona fide transfer of the deceased Shareholder's
     Stock without further regard to the terms and conditions of this Agreement.

         4.  Life Insurance Provisions. The Company or the Shareholders may
elect to apply for and own insurance on a Shareholder's life for the purpose of
funding all or part of the obligations under this Agreement. Nothing in this
Agreement shall create any obligation for the Company or a Shareholder to apply
for and own such insurance, and no incident of ownership shall be attributed to
an insured Shareholder if the Company or another Shareholder elects to apply for
and own insurance on such insured Shareholder's life.

         5.  Price. The price of each share of Stock of the Company to be
purchased and sold under this Agreement shall be fixed by the Shareholders, as
evidenced by a certificate setting forth such fixed price, which certificate
shall be dated and executed by the Shareholders and attached hereto as Exhibit
C. The fixed price set forth in the certificate attached hereto shall be binding
on the Shareholders for all purposes of this Agreement, except that during the
90 day period following the last day of the Company's fiscal year ending within
the calendar years

                                       3



2001, 2004 and within each subsequent third year thereafter, any Shareholder may
request that a study be undertaken to arrive at a new fixed price to be agreed
upon by the Shareholders. No such request shall alter the then effective fixed
price prior to the execution of a new fixed price certificate. The new fixed
price shall take effect as of the date of execution of the certificate, and
shall be binding on the Shareholders for all purposes, subject to the
limitations of this paragraph. If, during the appropriate 90 day period, no
Shareholder makes a request for a study to be undertaken to arrive at a new
fixed price to be agreed upon by the parties, the fixed price set forth in the
latest executed certificate attached hereto shall remain in effect for the
subsequent three year period. If any Shareholder shall, within the appropriate
90 day period, request that a study be undertaken to arrive at a new fixed price
to be agreed upon by the Shareholders, and if the Shareholders shall be unable
to agree upon such a fixed price within 45 days following the request, then a
qualified appraiser mutually agreed upon and selected by the Shareholders shall
appraise the Company and determine the value of the Stock. The fees and costs of
the appraisal shall be borne equally by the Shareholders.

         6.  Additional Shares Covered By Agreement. This Agreement shall apply
not only to the shares of Stock now owned by the Shareholders as hereinabove set
forth, but also to all of the shares of capital stock of the Company that a
Shareholder may hereafter acquire while a party to this Agreement.

         7.  Suspension And Subordination Of Rights. Notwithstanding anything in
this Agreement to the contrary, all of the Stock (but not less than all) may be
pledged to a bank to secure loans made by such bank to the Company. In the event
of any such pledge, then as long as the pledge remains in effect and to the
extent provided in such pledge, the rights and obligations under this Agreement
shall be suspended and affected as set forth below:

             (a) The rights of each Shareholder and each Shareholder's personal
     representative to transfer stock under this Agreement shall be subordinate
     and subject to the Company's bank obligations that are secured by the
     pledge.

             (b) The Company's obligation to pay all or any part of the purchase
     price, including payments of interest and principal on the promissory note
     provided for in paragraphs 2 and 3 above and set forth in Exhibit A
     attached hereto, shall be suspended until all of the Company's bank
     obligations secured by the pledge agreement are paid in full (the
     "Suspension Period"). During the Suspension Period, the Shareholder or
     Shareholder's personal representative whose Stock is being purchased by the
     Company shall be entitled to custody of the Stock, and such Shareholder or
     Shareholder's personal representative shall deliver or redeliver the Stock
     to the Company at such time as the Suspension Period has ended and the
     Company resumes payments of the purchase price. The Company shall be
     obligated to pay the Shareholder or Shareholder's personal representative
     whose Stock is being purchased by the Company additional interest at the
     rate determined in the promissory note for the Suspension Period.

             (c) During the Suspension Period, all rights that a Shareholder may
     have to acquire the other Shareholder's Stock under this Agreement shall be
     subordinate and subject to the Company's bank obligations that are secured
     by the pledge.

                                       4



             (d) During the Suspension Period, the Shareholder who is not
     selling or transferring Stock (the "Remaining Shareholder") shall have all
     rights to exercise any voting or other consensual rights attributable to
     Stock, subject to any required prior approval of the FCC. The Shareholders
     acknowledge and agree that the rights conferred on the Remaining
     Shareholder by this paragraph 7 constitute a voting agreement between
     shareholders of a close corporation enforceable in accordance with Section
     706 of the General Corporation Law of the State of California.

         8.  Termination Provisions. This Agreement shall terminate upon the
earliest to occur of any of the following events:

             (a) Cessation of business of the Company;

             (b) Bankruptcy, receivership or dissolution of the Company;

             (c) A public offering of Stock of the Company; provided, however,
     that if there is an underwritten public offering of Stock of the Company,
     each Shareholder agrees not to effect any public sale or distribution of
     his Stock in the Company for such period as may be requested by the
     managing underwriters of such offering (not to exceed the seven day period
     preceding, and the 90 day period beginning on, the effective date of any
     such registration), except as part of such registration.

             (d) The voluntary agreement of all the parties who are then bound
     by the terms hereof.

         9.  Endorsement On Stock Certificates. Each certificate representing
shares of capital Stock of the Company now or hereafter held by the Shareholders
shall be stamped with a legend in substantially the following form:

         "This certificate is transferable only upon compliance with the
         provisions of a Stock Purchase Agreement dated January 6, 1998, by and
         among Jose Liberman, Esther Liberman, Lenard D. Liberman, and LBI
         Holdings I, Inc., a copy of which is on file in the office of the
         Corporation."

         10. Amendment. This Agreement may be altered, amended or terminated
only by a writing signed by all the parties bound by this Agreement as of the
time of such alteration, amendment or termination.

         11. Provision In Will or Trust. This Agreement shall be binding upon
the parties hereto, their heirs, legatees, executors, administrators and
assigns. In furtherance thereof, each of the parties to this Agreement shall
maintain in effect at all times a will or trust directing his or her personal
representative to carry out this Agreement and to execute all documents
necessary to accomplish that result. The failure to maintain in effect such a
will or trust shall not affect the rights or obligations of the parties to this
Agreement.

         12. Notice. Whenever this Agreement requires the giving of notice, such
notice will be effective when actually received, except that any notice
addressed to a Shareholder

                                       5



at the address on file with the Company and deposited in the United States mail
by first class mail shall be conclusively presumed to be actually received five
days after such deposit.

         13. Take All Necessary Action. The Shareholders agree to sign all
necessary documents and take all other action necessary to carry out the
provisions of this Agreement.

         14. Construction. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.

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


                                              /s/ Jose Liberman
                                              -------------------------------
                                              Jose Liberman

                                              /s/ Esther Liberman
                                              -------------------------------
                                              Esther Liberman

                                              /s/ Lenard D. Liberman
                                              -------------------------------
                                              Lenard D. Liberman

                                              LBI Holdings I, Inc.

                                              By /s/ Lenard D. Liberman
                                                -----------------------------
                                                Lenard D. Liberman
                                                Vice President

                                       6



                                 SPOUSAL CONSENT

         The undersigned, being the spouse of a Shareholder who has signed the
foregoing Stock Purchase Agreement, hereby acknowledges that she has read and is
familiar with the provisions of said Agreement and agrees to be bound thereby
and join therein to the extent, if any, that her agreement and joinder may be
necessary; she hereby further acknowledges and agrees that Stock registered in a
Shareholder's name shall be or may be purchased and sold under the terms of said
Agreement without her further consent; she further acknowledges and agrees that
her spouse may join in any future amendment or modification of said Agreement
without any further signature, acknowledgment, agreement or consent on her part;
and she hereby further acknowledges and agrees that any community property or
other legal interest which she may have or hereafter acquire in the shares of
Stock of her spouse in the Company shall be subject to the provisions of said
Agreement.

         Dated:  January 6, 1998


                                                  /s/ Sarah Liberman
                                                  ------------------------------
                                                  Sarah Liberman

                                       7



EXHIBIT A

                         NON-NEGOTIABLE PROMISSORY NOTE

$______________                                 ____________________, California
                                                                          [Date]


         FOR VALUE RECEIVED, the undersigned LBI HOLDINGS I, INC., a California
corporation (the "Company"), hereby promises to pay to
___________________________________, ("Payee"), the principal sum of
________________________________________ ($____________)

in lawful money of the United States of America, together with interest on the
unpaid balance thereof from the date hereof in the amounts and at the times
specified below until such principal amount shall be paid in full.

         The Company shall pay the principal balance of this Note in five equal
installments, the first of which shall be due and payable one year after the
date of this Note, and each remaining installment shall be due and payable on
the subsequent annual anniversary dates of this Note.

         The unpaid principal balance of this Note shall bear interest at the
Applicable Federal Mid-Term Rate as determined for purposes of Internal Revenue
Code Section 1274 for promissory notes executed in the month of this Note. This
Note shall not be construed to require payment of any interest in excess of the
maximum amount permitted by law.

         All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America and same day funds to Payee
at such place as shall be designated in writing for such purpose by Payee.

         The obligations of the Company under this Note shall be subject to the
condition that all payments under this Note be legally permissible under the
laws of the State of California and the rules and regulations of the California
Department of Corporations.

         The Company shall have the right to prepay this Note in whole at any
time or in part from time to time, by payment of the principal amount hereof to
be prepaid, plus accrued but unpaid interest thereon.

         No provision of this Note shall alter or impair the obligation of the
Company which is absolute and unconditional to pay the principal of and interest
on this Note at the place, at the times and in the currency herein prescribed;
provided, however, that the Company shall not be obligated to make any payment
on this Note if, as of the date such payment is to be made, such payment would
violate Section 500 or any other applicable provisions of the General
Corporation Law of the State of California then in effect.

                                       8



         The Company promises to pay all costs and expenses, including
reasonable attorneys' fees, incurred in the collection and enforcement of this
Note. The Company hereby waives diligence, presentment, protest, demand and
notice of every kind and, to the full extent permitted by law, the right to
plead any statute of limitations as a defense to any demands hereunder.

         This Note is to be governed by, and construed and enforced in
accordance with, the laws of the State of California.

         IN WITNESS WHEREOF, the Company has caused this Note to be executed and
delivered by a duly authorized officer, as of the day and year and at the place
first above written.

                                                    LBI HOLDINGS I, INC.
                                                    a California corporation

                                     By:                /s/
                                                       -----------------------

                                                 Title:_______________________

                                       9



EXHIBIT B

                         NON-NEGOTIABLE PROMISSORY NOTE

$______________                                ____________________, California
                                                                         [Date]


         FOR VALUE RECEIVED, the undersigned ______________
_____________________ ("Payor"), hereby promises to pay to
___________________________________, ("Payee"), the principal sum
of____________________________________________($_____________)

in lawful money of the United States of America, together with interest on the
unpaid balance thereof from the date hereof in the amounts and at the times
specified below until such principal amount shall be paid in full.

         Payor shall pay the principal balance of this Note in five equal
installments, the first of which shall be due and payable one year after the
date of this Note, and each remaining installment shall be due and payable on
the subsequent annual anniversary dates of this Note.

         The unpaid principal balance of this Note shall bear interest at the
Applicable Federal Mid-Term Rate as determined for purposes of Internal Revenue
Code Section 1274 for promissory notes executed in the month of this Note. This
Note shall not be construed to require payment of any interest in excess of the
maximum amount permitted by law.

         All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America and same day funds to Payee
at such place as shall be designated in writing for such purpose by Payee.

         Payor shall have the right to prepay this Note in whole at any time or
in part from time to time, by payment of the principal amount hereof to be
prepaid, plus accrued but unpaid interest thereon.

         No provision of this Note shall alter or impair the obligation of Payor
which is absolute and unconditional to pay the principal of and interest on this
Note at the place, at the times and in the currency herein prescribed.

         Payor promises to pay all costs and expenses, including reasonable
attorneys' fees, incurred in the collection and enforcement of this Note. Payor
hereby waives diligence, presentment, protest, demand and notice of every kind
and, to the full extent permitted by law, the right to plead any statute of
limitations as a defense to any demands hereunder.

         This Note is to be governed by, and construed and enforced in
accordance with, the laws of the State of California.

                                       10



         IN WITNESS WHEREOF, Payor has caused this Note to be executed and
delivered by a duly authorized officer, as of the day and year and at the place
first above written.

                                                 ______________________________
                                                 Payor

                                       11



EXHIBIT C

                                PRICE CERTIFICATE

         This certificate is for the purpose of establishing the price for the
Stock owned by each Shareholder under that certain Stock Purchase Agreement,
dated as of January 6, 1998, by and among Jose Liberman, Esther Liberman, Lenard
D. Liberman, and LBI Holdings I, Inc., as set forth in paragraph 5 of said
Agreement. As of the date set forth below, the Shareholders certify that the
total value of the Company is
______________________________________________($______________), so that the
price for each of the ____ shares of Stock of the Company owned by the
Shareholders, as the terms "Company," and "Shareholders" are defined in said
Agreement, is ______________________________________________($______________).


         DATED: _________________________.



                                                 SHAREHOLDERS

                                                 _______________________________
                                                 Jose Liberman

                                                 _______________________________
                                                 Esther Liberman

                                                 _______________________________
                                                 Lenard D. Liberman

                                       12




                                PRICE CERTIFICATE

         This certificate is for the purpose of establishing the price for the
Stock owned by each Shareholder under that certain Stock Purchase Agreement,
dated as of January 6, 1998, by and among Jose Liberman, Esther Liberman, Lenard
D. Liberman, and LBI Holdings I, Inc., as set forth in paragraph 5 of said
Agreement. As of the date set forth below, the Shareholders certify that the
total value of the Company is Four Hundred Two Million Eight Hundred Forty-Six
Thousand Four Hundred Twenty-Two Dollars ($402,846,422), so that the price for
each of the 200 shares of Stock of the Company owned by the Shareholders, as the
terms "Company," and "Shareholders" are defined in said Agreement, is Two
Million Fourteen Thousand Two Hundred Thirty-Two Dollars and Eleven Cents
($2,014,232.11).

         DATED: June 28, 2002


                                                  SHAREHOLDERS

                                                    /s/ Jose Liberman
                                                  ------------------------------
                                                  Jose Liberman

                                                    /s/ Esther Liberman
                                                  ------------------------------
                                                  Esther Liberman

                                                    /s/ Lenard D. Liberman
                                                  ------------------------------
                                                  Lenard D. Liberman

EX-10.12

                                                                   Exhibit 10.12

                                 LENARD LIBERMAN

                                 PROMISSORY NOTE

$243,095.00                                             Los Angeles, California
                                                               December 20, 2001


                  FOR VALUE RECEIVED, LENARD LIBERMAN, an individual ("Payor"),
hereby promises to pay to the order of LBI HOLDINGS II, INC., a California
corporation ("Payee") the principal amount of TWO HUNDRED FORTY-THREE THOUSAND
NINETY-FIVE DOLLARS AND NO CENTS ($243,095.00), together with interest on the
unpaid balance thereof from the date hereof in the amounts and at the times
specified below until such principal amount shall be paid (whether at maturity,
by prepayment, upon demand, by acceleration or otherwise).

                  The Payor shall repay the unpaid principal balance of this
Note by no later than December 20, 2008. The unpaid principal under this Note
shall bear interest until due and payable at a rate equal to the Alternative
Federal Short-Term Rate published by the Internal Revenue Service for the month
in which such advance was made, per annum (calculated on the basis of a 360-day
year and the actual number of days elapsed), such interest shall be payable by
no later than December 20, 2008. This Note shall not be construed to require
payment of any interest in excess of the maximum amount permitted by law.

                  All payments of principal and interest in respect of this Note
shall be made in lawful money of the United States of America and same day funds
to Payee at such place as shall be designated in writing for such purpose by
Payee.

                  This Note may be prepaid in whole or in part at any time
without penalty or premium.

                  THIS NOTE SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF CALIFORNIA,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

                                      -1-



                  IN WITNESS WHEREOF, the Payor has executed and delivered this
Note as of the day and year and at the place first above written.


                                                  /s/ Lenard Liberman
                                               ---------------------------------
                                               Lenard Liberman


Pay to the Order of


_________________________________
dated as of _____________________



LBI MEDIA, INC.
(formerly known as LBI Holdings II, Inc.)


By: /s/ Jose Liberman
   ------------------------------
     Name: Jose Liberman
     Title: President

                                      -2-

EX-10.13

                                                                   Exhibit 10.13

                                 JOSE LIBERMAN

                                PROMISSORY NOTE

$146,950.00                                             Los Angeles, California
                                                               December 20, 2001


                  FOR VALUE RECEIVED, JOSE LIBERMAN, an individual ("Payor"),
hereby promises to pay to the order of LBI HOLDINGS II, INC., a California
corporation ("Payee") the principal amount of ONE HUNDRED FORTY-SIX THOUSAND
NINE HUNDRED FIFTY DOLLARS AND NO CENTS ($146,950.00), together with interest on
the unpaid balance thereof from the date hereof in the amounts and at the times
specified below until such principal amount shall be paid (whether at maturity,
by prepayment, upon demand, by acceleration or otherwise).

                  The Payor shall repay the unpaid principal balance of this
Note by no later than December 20, 2008. The unpaid principal under this Note
shall bear interest until due and payable at a rate equal to the Alternative
Federal Short-Term Rate published by the Internal Revenue Service for the month
in which such advance was made, per annum (calculated on the basis of a 360-day
year and the actual number of days elapsed), such interest shall be payable by
no later than December 20, 2008. This Note shall not be construed to require
payment of any interest in excess of the maximum amount permitted by law.

                  All payments of principal and interest in respect of this Note
shall be made in lawful money of the United States of America and same day funds
to Payee at such place as shall be designated in writing for such purpose by
Payee.

                  This Note may be prepaid in whole or in part at any time
without penalty or premium.

                  THIS NOTE SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF CALIFORNIA,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

                                      -1-



                  IN WITNESS WHEREOF, the Payor has executed and delivered this
Note as of the day and year and at the place first above written.


                                              /s/ Jose Liberman
                                             -----------------------------------
                                             Jose Liberman

Pay to the Order of


_________________________________
dated as of _____________________



LBI MEDIA, INC.
(formerly known as LBI Holdings II, Inc.)



By:  /s/ Lenard Liberman
   ------------------------------------
     Name: Lenard Liberman
     Title: Executive Vice President

                                      -2-

EX-12.1

                                                                    EXHIBIT 12.1

               Computation of Ratios of Earnings to Fixed Charges



- ----------------------------------------------------------------------------------------------------------------------------
                                      SIX MONTHS ENDED                           YEARS ENDED DECEMBER 31
                                        JUNE 30, 2002        2001           2000           1999           1998        1997
- ----------------------------------------------------------------------------------------------------------------------------
                                                                                                 
 Fixed Charges:
 Interest charges                             $ 9,669       $21,446        $ 6,838        $ 6,632       $ 8,068    $ 11,020
 Interest Portion of Rent Expense                  41            56             15             30            22          32
                                       -------------------------------------------------------------------------------------
 Total Fixed Charges                          $ 9,710       $21,502        $ 6,853        $ 6,662       $ 8,090    $ 11,052
                                       -------------------------------------------------------------------------------------


 Earnings:
 Earnings                                     $ 5,001       $ 1,870        $15,528        $ 7,782       $ 4,306    $ (5,513)
 Interest Charges                               9,669        21,446          6,838          6,632         8,068      11,020
 Interest Portion of Rent Expense                  41            56             15             30            22          32
                                       -------------------------------------------------------------------------------------
 Total Earnings                               $14,711       $23,372        $22,381        $14,444       $12,396    $  5,539
                                       -------------------------------------------------------------------------------------
 Ratio of earnings to fixed charges               1.5x          1.1x           3.3x           2.2x          1.5x         --
- ----------------------------------------------------------------------------------------------------------------------------

EX-21.1

                                                                    EXHIBIT 21.1

                         SUBSIDIARIES OF LBI MEDIA, INC.

               Name of Subsidiary                 Jurisdiction of Incorporation

 Liberman Television, Inc.                                   California
 Liberman Broadcasting, Inc.                                 California
 LBI Radio License Corp.                                     California
 KRCA License Corp.                                          California
 KRCA Television, Inc.                                       California
 Empire Burbank Studios, Inc.                                California
 KZJL License Corp.                                          California
 Liberman Television of Houston, Inc.                        California
 Liberman Broadcasting of Houston, Inc.                      California
 Liberman Broadcasting of Houston License Corp.              California

EX-23.2

                                                                    Exhibit 23.2

                         CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated April 23, 2002, in the Registration Statement (Form S-4)
and related Prospectus of LBI Media, Inc. dated October 4, 2002.

                                     /s/ Ernst & Young LLP

Los Angeles, California
October 4, 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

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

                         U.S. BANK NATIONAL ASSOCIATION
                         ------------------------------
               (Exact name of trustee as specified in its charter)

                                   31-0841368
                                   ----------
                      (I.R.S. Employer Identification No.)

                                 225 South Sixth

                              Minneapolis, MN 55402
                                 --------- -----
               (Address of principal executive offices) (Zip code)

                                Sherrie L. Pantle
                         U.S. Bank National Association
                          1420 Fifth Avenue, 7th Floor
                                Seattle, WA 98101
                             Telephone 206-344-4676
            (Name, address and telephone number of agent for service)
            ---------------------------------------------------------

                                 LBI Media, Inc.
               (Exact name of obligor as specified in its charter)
               --------------------------------------------------

               California                             95-4668901
     -------------------------------      ------------------------------------
     (State or other jurisdiction of      (I.R.S. Employer Identification No.)
      incorporation or organization)

          1845 West Empire Avenue                       91504
                                                        -----
           Burbank, California                        (Zip code)
                                                      ----------

                   10-1/8% Senior Subordinated Notes due 2012
                       (Title of the indenture securities)




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.

          Comptroller of the Currency, Washington D.C. 20521

    (b)   Whether it is authorized to exercise corporate trust powers.

          Yes.

2.  Affiliations with Obligor and Underwriters.  If the obligor or any
    ------------------------------------------
underwriter for the obligor is an affiliate of the trustee, describe each
such affiliation.

    No such affiliation exists with the Trustee, U.S. Bank National Association.

    Items 3-15 are not applicable because to the best of the Trustee's
    knowledge the obligor is not in default under any Indenture for which the
    Trustee acts as Trustee.

16. List of Exhibits.  List below all exhibits filed as a part of this
    ----------------
statement of eligibility and qualification.

     1.   Articles of Association of U.S. Bank National Association.(1)

     2.   Certificate of Authority of U.S. Bank National Association to
          Commence Business.(1)

     3.   Authorization of the trustee to exercise corporate trust powers.(1)

     4.   Bylaws of U.S. Bank National Association.(1)

     5.   Not Applicable.

     6.   Consents of U.S. Bank National Association required by Section 321(b)
           of the Act.(2)

     7.   Latest Report of Condition of U.S. Bank National Association.(3)
     ---------
     (1)  Incorporated by reference to the exhibit of the same number to the
          Form T-1 filed with registration statement number 333-67188.
     (2)  Attached.
     (3)  Incorporated by reference to registration statement number 22-22451.



                                    SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939, the trustee,
U.S. Bank National Association, a national banking association organized under
the laws of the United States, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Seattle, and State of Washington, on the 23rd day of September,
2002.

                                            U.S. BANK NATIONAL ASSOCIATION


                                                     By /s/ Sherrie L. Pantle
                                                       -------------------------
                                                          Vice President



                                                                       Exhibit 6

                             CONSENT OF THE TRUSTEE

Pursuant to the requirements of Section 321(b) of the Trust Indenture Act of
1939 in connection with the proposed issuance by LBI Media, Inc. of 10-1/8%
Senior Subordinated Notes due 2012, we hereby consent that reports of
examinations by federal, state, territorial and district authorities may be
furnished by such authorities to the Securities and Exchange Commission upon its
request therefor.

                                            U.S. BANK NATIONAL ASSOCIATION


                                                     By /s/ Sherrie L. Pantle
                                                       -------------------------

                                                             Vice President

Dated:  September 23, 2002

EX-99.1

                                                                   EXHIBIT 99.1
                             LETTER OF TRANSMITTAL

                                LBI Media, Inc.

 Offer To Exchange 10 1/8% Senior Subordinated Notes Due 2012 Which Have Been
   Registered Under The Securities Act of 1933, as Amended, For Any And All
            Outstanding 10 1/8% Senior Subordinated Notes Due 2012

                Pursuant to the Prospectus dated [      ], 200

 THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK
 CITY TIME, ON [      ], 200  , UNLESS EXTENDED BY LBI MEDIA, INC. (SUCH DATE,
 AS MAY BE EXTENDED BY LBI MEDIA, INC., IS REFERRED TO HEREIN AS THE
 "EXPIRATION DATE"). TENDERS MAY BE WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY
 TIME, ON THE EXPIRATION DATE.

                 The Exchange Agent for the Exchange Offer is:

                                U.S. Bank, N.A.

             By Overnight Delivery or
                    Registered
                or Certified Mail:          By Hand Delivery:
                  U.S. Bank, N.A.            U.S. Bank, N.A.
               180 East Fifth Street      180 East Fifth Street
             St. Paul, Minnesota 55101  St. Paul, Minnesota 55101
              Attention: Specialized     Attention: Specialized
                      Finance                    Finance

                         Facsimile Transmission Number
                         (Eligible Institutions Only):
                                (651) 244-1537

                  Confirm Receipt of Facsimile by Telephone:
                                (651) 244-4512

   DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION TO A FACSIMILE NUMBER OTHER THAN THE ONE LISTED ABOVE
WILL NOT CONSTITUTE VALID DELIVERY TO THE EXCHANGE AGENT. THE INSTRUCTIONS
CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS
COMPLETED.

   The instructions set forth in this Letter of Transmittal should be read
carefully before this Letter of Transmittal is completed. The undersigned
acknowledges that he or she has received and reviewed the prospectus dated
[      ], 200  (the "Prospectus"), of LBI Media, Inc., a California corporation
(the "Company" or the "Issuer"), and this Letter of Transmittal (the "Letter of
Transmittal"), which together constitute the Company's offer (the "Exchange
Offer") to exchange an aggregate principal amount of up to $150,000,000 of the
Company's 10 1/8% Senior Subordinated Notes due 2012 which have been registered
under the Securities Act of 1933, as amended (individually an "Exchange Note"
and collectively, the "Exchange Notes"), for a like principal amount of the
Company's issued and outstanding 10 1/8% Senior Subordinated Notes due 2012
(individually an "Old Note" and collectively, the "Old Notes") from the
registered holders thereof. Recipients of the Prospectus should read the
requirements described in the Prospectus with respect to eligibility to
participate in the Exchange Offer. Capitalized terms used but not defined
herein have the meaning given to them in the Prospectus.



   This Letter of Transmittal is to be completed by holders of Old Notes either
if Old Notes are to be forwarded herewith or if tenders of Old Notes are to be
made by book-entry transfer to an account maintained by the U.S. Bank, N.A.
(the "Exchange Agent") at The Depository Trust Company ("DTC") pursuant to the
procedures set forth in "The Exchange Offer; Registration Rights--Procedures
for Tendering" in the Prospectus.

   Holders of Old Notes whose certificates (the "Certificates") for such Old
Notes are not immediately available or who cannot deliver their Certificates,
this Letter of Transmittal and all other required documents to the Exchange
Agent on or prior to the Expiration Date or who cannot complete the procedures
for book-entry transfer on a timely basis, may tender their Old Notes according
to the guaranteed delivery procedures set forth in "The Exchange Offer;
Registration Rights--Guaranteed Delivery Procedures" in the Prospectus.

                     DELIVERY OF DOCUMENTS TO DTC DOES NOT
                  CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.

                    NOTE: SIGNATURES MUST BE PROVIDED BELOW

              PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY

   List below the Old Notes of which you are a holder. If the space provided
below is inadequate, list the certificate numbers and principal amount on a
separate signed schedule and attach that schedule to this Letter of
Transmittal. See Instruction 3.

 (Boxes Below To Be Checked By Eligible Institutions Only. See Instruction 1.)

                   ALL TENDERING HOLDERS COMPLETE THIS BOX:

                                                                            
- -------------------------------------------------------------------------------------------------------
                                  DESCRIPTION OF OLD NOTES
- -------------------------------------------------------------------------------------------------------
Name(s) and Address of Registered Holder(s)      Certificate   Aggregate Principal   Principal Amount
         (Please fill in if blank)               Number(s)*    Amount Represented       Tendered**
- -------------------------------------------------------------------------------------------------------
                                                 ------------------------------------------------------
                                                 ------------------------------------------------------
                                                 ------------------------------------------------------
                                                 ------------------------------------------------------
                                                 ------------------------------------------------------
                                                 ------------------------------------------------------
                                                 ------------------------------------------------------
                                                 ------------------------------------------------------
                                                 ------------------------------------------------------
                                                 ------------------------------------------------------
                                                 ------------------------------------------------------
                                                 ------------------------------------------------------
                                                 ------------------------------------------------------
                                                 ------------------------------------------------------
                                                    Total
- -------------------------------------------------------------------------------------------------------
* Need not be completed if Old Notes are being tendered by book-entry transfer.
** Unless otherwise indicated in this column, a holder will be deemed to have tendered ALL of the Old
   Notes represented by the Old Notes indicated in Column 2. See Instruction 2. Old Notes tendered
   hereby must be in denominations of principal amount of $1,000 and any integral multiple thereof. See
   Instruction 1.
- -------------------------------------------------------------------------------------------------------



                                      2



[_] CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
    MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE DTC AND
    COMPLETE THE FOLLOWING:

Name of Tendering Institution _______________________________________________

Account Number ____________________  Transaction Code Number __________________

   By crediting the Old Notes to the Exchange Agent's account at DTC using the
Automated Tender Offer Program ("ATOP") and by complying with applicable ATOP
procedures with respect to the Exchange Offer, including transmitting to the
Exchange Agent an Agent's Message in which the holder of the Old Notes
acknowledges and agrees to be bound by the terms of, and makes the
representations and warranties contained in, this Letter of Transmittal, the
participant in DTC confirms on behalf of itself and the beneficial owners of
such Old Notes all provisions of this Letter of Transmittal (including all
representations and warranties) applicable to it and such beneficial owner as
fully as if it had completed the information required herein and executed and
transmitted this Letter of Transmittal to the Exchange Agent.

[_] CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF
    TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED
    DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING:

Name(s) of Registered Holders(s) ____________________________________________

Window Ticket Number (if any) _______________________________________________

Date of Execution of Notice of Guaranteed Delivery __________________________

Name of Institution Which Guaranteed Delivery _______________________________

If Delivered by Book-Entry Transfer, Complete the Following:

Account Number ____________________  Transaction Code Number __________________

Name of Tendering Institution _______________________________________________

[_] CHECK HERE IF TENDERED OLD NOTES ARE ENCLOSED HEREWITH.

[_] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE TEN ADDITIONAL
    COPIES OF THE PROSPECTUS AND TEN COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
    THERETO.

Name: _______________________________________________________________________

Address: ____________________________________________________________________

   If the undersigned is not a broker-dealer, the undersigned represents that
it is not engaged in, and does not intend to engage in, a distribution of
Exchange Notes. If the undersigned is a broker-dealer that will receive
Exchange Notes for its own account in exchange for Old Notes that were acquired
as a result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus meeting the requirements of the
Securities Act of 1933, as amended (the "Securities Act"), in connection with
any resale of such Exchange Notes; however, by so acknowledging and by
delivering such a prospectus, the undersigned will not be deemed to admit that
it is an "underwriter" within the meaning of the Securities Act. If the
undersigned is a broker-dealer that will receive Exchange Notes, it represents
that the Old Notes to be exchanged for the Exchange Notes were acquired as a
result of market-making activities or other trading activities.

                                      3



Ladies and Gentlemen:

   The undersigned hereby tenders to LBI Media, Inc. (the "Company") the above
described principal amount of the Company's 10 1/8% Senior Subordinated Notes
due 2012, of which $150.0 million were originally issued July 9, 2002 (the "Old
Notes"), in exchange for a like principal amount of the Company's 10 1/8%
Senior Subordinated Notes due 2012 (the "Exchange Notes"), which have been
registered under the Securities Act of 1933, as amended ("the Securities Act"),
upon the terms and subject to the conditions set forth in the prospectus dated
[      ], 200   (as the same may be amended or supplemented from time to time,
the "Prospectus"), receipt of which is hereby acknowledged, and in this Letter
of Transmittal (which, together with the Prospectus, constitute the "Exchange
Offer").

   Subject to and effective upon the acceptance for exchange of the Old Notes
tendered herewith, the undersigned hereby sells, assigns and transfers to or
upon the order of the Company all right, title and interest in and to such Old
Notes as are being tendered herewith. The undersigned hereby irrevocably
constitutes and appoints the Exchange Agent as its agent and attorney-in-fact
(with full knowledge that the Exchange Agent is also acting as agent of the
Company in connection with the Exchange Offer and as Trustee under the
Indenture dated July 9, 2002 (the "Indenture") for the Old Notes and the
Exchange Notes) with respect to the Old Notes, with full power of substitution
(such power of attorney being an irrevocable power coupled with an interest),
subject only to the right of withdrawal described in the Prospectus, to: (i)
deliver such Old Notes to the Company together 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 Exchange Notes to be
issued in exchange for such Old Notes; (ii) present Certificates for such Old
Notes for transfer, and to transfer such Old Notes on the account books
maintained by DTC; and (iii) receive for the account of the Company all
benefits and otherwise exercise all rights of beneficial ownership of such Old
Notes, all in accordance with the terms and conditions of the Exchange Offer.

   The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, exchange and transfer the Old Notes tendered
hereby and that, when the same are accepted for exchange, the Company will
acquire good, marketable and unencumbered title thereto, free and clear of all
liens, restrictions, charges and encumbrances, and that the Old Notes tendered
hereby are not subject to any adverse claims or proxies. The undersigned will,
upon request, execute and deliver any additional documents deemed by the
Company or the Exchange Agent to be necessary or desirable to complete the
exchange and transfer of the Old Notes tendered hereby. The undersigned has
read and agrees to all of the terms of the Exchange Offer.

   The name(s) and address(es) of the registered holder(s) of the Old Notes
tendered hereby should be printed above, if they are not already set forth
above, as they appear on the Certificates representing such Old Notes. The
Certificate number(s) and the Old Notes that the undersigned wishes to tender
should be indicated in the appropriate boxes above.

   If any tendered Old Notes are not exchanged pursuant to the Exchange Offer
for any reason, or if Certificates are submitted for more Old Notes than are
tendered or accepted for exchange, Certificates for such nonexchanged or
nontendered Old Notes will be returned (or, in the case of Old Notes tendered
by book-entry transfer, such Old Notes will be credited to an account
maintained at DTC), without expense to the tendering holder promptly following
the expiration or termination of the Exchange Offer.

   The undersigned understands that tenders of Old Notes pursuant to any one of
the procedures described in "The Exchange Offer; Registration
Rights--Procedures for Tendering" in the Prospectus and in the instructions
herein will, upon the Company's acceptance for exchange of such tendered Old
Notes, constitute a binding agreement between the undersigned and the Company
upon the terms and subject to the conditions of the Exchange Offer. The
undersigned recognizes that, under certain circumstances set forth in the
Prospectus, the Company may not be required to accept for exchange any of the
Old Notes tendered hereby.

                                      4



   Unless otherwise indicated herein in the box entitled "Special Registration
Instructions" below, the undersigned hereby directs that the Exchange Notes be
issued in the name(s) of the undersigned or, in the case of a book-entry
transfer of Old Notes, that such Exchange Notes be credited to the account
indicated above maintained at DTC. If applicable, substitute Certificates
representing Old Notes not exchanged or not accepted for exchange will be
issued to the undersigned or, in the case of a book-entry transfer of Old
Notes, will be credited to the account indicated above maintained at DTC.
Similarly, unless otherwise indicated under "Special Delivery Instructions,"
please deliver Exchange Notes to the undersigned at the address shown below the
undersigned's signature.

   Unless the box under the heading "Special Registration Instructions" is
checked, by tendering Old Notes and executing this Letter of Transmittal, the
undersigned hereby represents and warrants that:

      (i) neither the undersigned nor any beneficial owner of the Old Notes
   (the "Beneficial Owner") is an "affiliate," as such term is defined under
   Rule 405 under the Securities Act, of the Company, or if the undersigned or
   Beneficial Owner is an affiliate, it will comply with the registration and
   prospectus delivery requirements of the Securities Act, if applicable. Upon
   request by the Company, the undersigned or Beneficial Owner will deliver to
   the Company a legal opinion confirming it is not such an affiliate;

      (ii) the Exchange Notes acquired pursuant to the Exchange Offer are being
   obtained in the ordinary course of business of the undersigned and any
   Beneficial Owner;

      (iii) neither the undersigned nor any Beneficial Owner is engaging in or
   intends to engage in a distribution of such Exchange Notes;

      (iv) neither the undersigned nor any Beneficial Owner has an arrangement
   or understanding with any person to participate in the distribution of such
   Exchange Notes;

      (v) if the undersigned or any Beneficial Owner is a resident of the State
   of California, it falls under the self-executing institutional investor
   exemption set forth under Section 25102(i) of the Corporate Securities Law
   of 1968 and Rules 260.102.10 and 260.105.14 of the California Blue Sky
   Regulations;

      (vi) if the undersigned or any Beneficial Owner is a resident of the
   Commonwealth of Pennsylvania, it falls under the self-executing
   institutional investor exemption set forth under Sections 203(c), 102(d) and
   (k) of the Pennsylvania Securities Act of 1972, Section 102.111 of the
   Pennsylvania Blue Sky Regulations and an interpretive opinion dated November
   16, 1985;

      (vii) the undersigned and each Beneficial Owner acknowledges and agrees
   that any person who is a broker-dealer registered under the Securities
   Exchange Act of 1934, as amended (the "Exchange Act"), or is participating
   in the Exchange Offer for the purpose of distributing the Exchange Notes,
   must comply with the registration and prospectus delivery requirements of
   the Securities Act in connection with a secondary resale transaction of the
   Exchange Notes or interests therein acquired by such person and cannot rely
   on the position of the staff of the Securities and Exchange Commission (the
   "SEC") set forth in certain no-action letters; and

      (viii) the undersigned and each Beneficial Owner understands that a
   secondary resale transaction described in clause (vii) above and any resales
   of Exchange Notes or interests therein obtained by such holder in exchange
   for Old Notes or interests therein originally acquired by such holder
   directly from the Company should be covered by an effective registration
   statement containing the selling security holder information required by
   Item 507 or Item 508, as applicable, of Regulation S-K or the SEC.

   The undersigned may, IF AND ONLY IF UNABLE TO MAKE ALL OF THE
REPRESENTATIONS AND WARRANTIES CONTAINED IN (i)-(viii) ABOVE, elect to have its
Old Notes registered in the shelf registration described in the Registration
Rights Agreement, dated as of July 9, 2002, between the Company, as issuer,
Liberman Television of Houston, Inc., KZJL License Corp., Liberman Television,
Inc., KRCA Television, Inc., KRCA License Corp., Liberman Broadcasting, Inc.,
LBI Radio License Corp., Liberman Broadcasting of Houston, Inc., Liberman
Broadcasting of Houston License Corp. and Empire Burbank Studios, Inc., as

                                      5



guarantors, and Credit Suisse First Boston Corporation, UBS Warburg LLC, Banc
of America Securities LLC, CIBC World Markets Corp. and Fleet Securities, Inc.,
as initial purchasers, in the form filed as an exhibit to the registration
statement of which the Prospectus is a part. Such election may be made by
checking the box under "Special Registration Instructions" on page 7. By making
such election, the undersigned agrees, jointly and severally, as a holder of
transfer restricted securities participating in a shelf registration, to
indemnify and hold harmless the Company, its agents, employees, directors and
officers and each Person who controls the Company, within the meaning of
Section 15 of the Securities Act or Section 20(a) of the Exchange Act, against
any and all losses, claims, damages and liabilities whatsoever (including,
without limitation, the reasonable legal and other expenses actually incurred
in connection with any suit, action or proceeding or any claim asserted)
arising out of or based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in the shelf registration statement
filed with respect to such Old Notes or the Prospectus or in any amendment
thereof or supplement thereto or (ii) the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, in each case to the extent, but only to the extent, that any
such loss, claim, damage or liability arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with information relating to the
undersigned furnished to the Company in writing by or on behalf of the
undersigned expressly for use therein. Any such indemnification shall be
governed by the terms and subject to the conditions set forth in the
Registration Rights Agreement, including, without limitation, the provisions
regarding notice, retention of counsel, contribution and payment of expenses
set forth therein. The above summary of the indemnification provisions of the
Registration Rights Agreement is not intended to be exhaustive and is qualified
in its entirety by reference to the Registration Rights Agreement.

   If the undersigned is a broker-dealer that will receive Exchange Notes for
its own account in exchange for Old Notes that were acquired as a result of
market-making activities or other trading activities, it acknowledges that it
will deliver a prospectus in connection with any resale of such Exchange Notes;
however, by so acknowledging and delivering a prospectus, the undersigned will
not be deemed to admit that it is an "underwriter" within the meaning of the
Securities Act. If the undersigned is a broker-dealer and Old Notes held for
its own account were not acquired as a result of market-making or other trading
activities, such Old Notes cannot be exchanged pursuant to the Exchange Offer.

   All authority herein conferred or agreed to be conferred in this Letter of
Transmittal shall survive the death or incapacity of the undersigned and any
obligation of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, personal representatives, trustees in bankruptcy,
legal representatives, successors and assigns of the undersigned. Except as
stated in the Prospectus and in the instructions contained in this Letter of
Transmittal, this tender is irrevocable.

                                      6



                         SPECIAL ISSUANCE INSTRUCTIONS
                         (See Instructions 2, 5 and 6)

   To be completed ONLY if the Exchange Notes or any Old Notes that are not
tendered are to be issued in the name of someone other than the registered
holder(s) of the Old Notes whose name(s) appear(s) above.

Issue:

[_] Old Notes not tendered, to:

[_] Exchange Notes, to:

Name(s) _____________________________________________________________________
                            (Please Type or Print)

- --------------------------------------------------------------------------------
                            (Please Type or Print)

Address _____________________________________________________________________

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

Telephone ___________________________________________________________________

- --------------------------------------------------------------------------------
                (Tax Identification or Social Security Number)

* (Such person(s) must properly complete a Substitute Form W-9, a Form W-8BEN,
a Form W-8ECI, or a Form W-8IMY)

Credit unchanged Old Notes delivered by book-entry transfer to the Book-Entry
Transfer Facility account set forth below.

- --------------------------------------------------------------------------------
                 (Book-Entry Transfer Facility Account Number,
                                if applicable)
                         SPECIAL DELIVERY INSTRUCTIONS
                              (See Instruction 6)

   To be completed ONLY if certificates for Old Notes not exchanged and/or
Exchange Notes are to be sent to someone other than the person or persons whose
signatures(s) appear(s) on this letter below or to such person or persons at an
address other than shown in the box entitled "Description of Old Notes" on this
Letter above.

Mail Exchange Notes and/or Old Notes to:

Name(s) * ___________________________________________________________________
                            (Please Type or Print)

- --------------------------------------------------------------------------------
                            (Please Type or Print)

Address _____________________________________________________________________

- --------------------------------------------------------------------------------
                                                                       Zip Code

* (Such person(s) must properly complete a Substitute Form W-9, a Form W-8BEN,
a Form W-8ECI, or a Form W-8IMY)

                                      7



                       SPECIAL REGISTRATION INSTRUCTIONS
                                 (See Page 5)

To be completed ONLY IF (i) the undersigned satisfies the conditions set forth
on page 5, (ii) the undersigned elects to register its Old Notes in the shelf
registration described in the Registration Rights Agreement, and (iii) the
undersigned agrees to comply with the Registration Rights Agreement and to
indemnify certain entities and individuals as set forth on page 5.

[_]  By checking this box the undersigned hereby (i) represents that it is
entitled to have its Old Notes registered in a shelf registration in accordance
with the Registration Rights Agreement, (ii) elects to have its Old Notes
registered pursuant to the shelf registration described in the Registration
Rights Agreement, and (iii) agrees to comply with the Registration Rights
Agreement and to indemnify certain entities and individuals identified in, and
to the extent provided on, page 5.

IMPORTANT: THIS LETTER OR A FACSIMILE HEREOF (TOGETHER WITH THE CERTIFICATES
FOR OLD NOTES OR A BOOK-ENTRY CONFIRMATION AND ALL OTHER REQUIRED DOCUMENTS OR
THE NOTICE OF GUARANTEED DELIVERY) MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR
TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.

                                      8



                                   SIGNATURE

   Signature(s) must be guaranteed if required by Instructions 2 and 5. This
Letter of Transmittal must be signed by the registered holder(s) exactly as the
name(s) appear(s) on Certificate(s) for the Old Notes hereby tendered or on a
security position listing, or by any person(s) authorized to become the
registered holder(s) by endorsements and documents transmitted herewith,
including such opinions of counsel, certifications and other information as may
be required by the Company or the Trustee for the Old Notes to comply with
restrictions on transfer applicable to the Old Notes. If signature is by an
attorney-in-fact, executor, administrator, trustee, guardian, officer of a
corporation or another acting in a fiduciary capacity or representative
capacity, please set forth the signer's full title. See Instructions 2 and 5.

        x ___________________________________________________________________

        x ___________________________________________________________________
        Signature(s) of Registered Holder(s) or Authorized Signature

        Dated: ______________________________________________________________
                            (Please Type or Print) Name(s):

        Title: ______________________________________________________________

        Address: ____________________________________________________________
                                 (Including Zip Code)

        Area Code and Telephone Number: _____________________________________

                           GUARANTEE OF SIGNATURE(S)
                    (If Required--See Instructions 2 and 5)

Signature(s) Guaranteed by
an Eligible Institution: ____________________________________________________
                            (Authorized Signature)

Name of Eligible Institution
Guaranteeing Signature: _____________________________________________________

Capacity (full title): ______________________________________________________

Address: ____________________________________________________________________

Telephone Number: ___________________________________________________________

Dated: _______________________________________________________ , 2002

                                      9



                                 INSTRUCTIONS

       (Forming part of the terms and conditions of the Exchange Offer)

   1.  Delivery of Letter of Transmittal and Certificates; Guaranteed Delivery
Procedures.  This Letter of Transmittal is to be completed either if (a)
Certificates are to be forwarded herewith or (b) tenders are to be made
pursuant to the procedures for tender by book-entry transfer set forth in "The
Exchange Offer; Registration Rights--Book-Entry Transfer" in the Prospectus.
Certificates, or timely confirmation of a book-entry transfer of such Old Notes
into the Exchange Agent's account at DTC, as well as this Letter of Transmittal
(or facsimile thereof), properly completed and duly executed, with any required
signature guarantees and any other documents required by this Letter of
Transmittal, must be received by the Exchange Agent at its address set forth
herein on or prior to the Expiration Date. The term "book-entry confirmation"
means a timely confirmation of book-entry transfer of Old Notes into the
Exchange Agent's account at DTC. Old Notes may be tendered in whole or in part
in integral multiples of $1,000 principal amount at maturity.

   Holders who wish to tender their Old Notes and: (i) whose Certificates for
such Old Notes are not immediately available; (ii) who cannot deliver their
Certificates, this Letter of Transmittal and all other required documents to
the Exchange Agent prior to the Expiration Date; or (iii) who cannot complete
the procedures for delivery by book-entry transfer on a timely basis, may
tender their Old Notes by properly completing and duly executing a Notice of
Guaranteed Delivery pursuant to the guaranteed delivery procedures set forth
under "The Exchange Offer; Registration Rights--Guaranteed Delivery Procedures"
in the Prospectus. Pursuant to such procedures: (i) such tender must be made by
or through an Eligible Institution (as defined below); (ii) a properly
completed and duly executed Notice of Guaranteed Delivery, substantially in the
form accompanying this Letter of Transmittal, must be received by the Exchange
Agent prior to the Expiration Date; and (iii) the Certificates (or a book-entry
confirmation) representing all tendered Old Notes, in proper form for transfer,
together with a Letter of Transmittal (or facsimile thereof), properly
completed and duly executed, with any required signature guarantees and any
other documents required by this Letter of Transmittal, must be received by the
Exchange Agent within three New York Stock Exchange trading days after the date
of execution of such Notice of Guaranteed Delivery, all as provided under "The
Exchange Offer; Registration Rights--Guaranteed Delivery Procedures" in the
Prospectus.

   The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
facsimile or mail to the Exchange Agent and must include a guarantee by an
Eligible Institution in the form set forth in the Notice of Guaranteed
Delivery. For Old Notes to be properly tendered pursuant to the guaranteed
delivery procedure, the Exchange Agent must receive a Notice of Guaranteed
Delivery prior to the Expiration Date. As used herein and in the Prospectus,
"Eligible Institution" means a firm or other entity identified in Rule 17Ad-15
under the Exchange Act as "an eligible guarantor institution," including (as
such terms are defined therein): (i) a bank; (ii) a broker, dealer, municipal
securities broker or dealer or government securities broker or dealer; (iii) a
credit union; (iv) a national securities exchange, registered securities
association or clearing agency; or (v) a savings association that is a
participant in a Securities Transfer Association.

   THE METHOD OF DELIVERY OF OLD NOTES, THIS LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING
HOLDER, AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
EXCHANGE AGENT. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT HOLDERS USE
AN OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD BE
ALLOWED TO ASSURE TIMELY DELIVERY AND PROPER INSURANCE SHOULD BE OBTAINED. NO
LETTER OF TRANSMITTAL OR OLD NOTES SHOULD BE SENT TO THE COMPANY. HOLDERS MAY
REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES OR
NOMINEES TO EFFECT THESE TRANSACTIONS FOR SUCH HOLDERS.

   The Company will not accept any alternative, conditional or contingent
tenders. Each tendering holder, by execution of a Letter of Transmittal (or
facsimile thereof), waives any right to receive any notice of the acceptance of
such tender.

                                      10



   2.  Guarantee of Signatures.  No signature guarantee on this Letter of
Transmittal is required if: (i) this Letter of Transmittal is signed by the
registered holder (which shall include any participant in DTC whose name
appears on a security position listing as the owner of the Old Notes) of Old
Notes tendered herewith, unless such holder has completed either the box
entitled "Special Registration Instructions" or the box entitled "Special
Delivery Instructions" above; or (ii) such Old Notes are tendered for the
account of a firm that is an Eligible Institution. In all other cases, an
Eligible Institution must guarantee the signature(s) on this Letter of
Transmittal. See Instruction 5.

   3.  Inadequate Space.  If the space provided in the box captioned
"Description of Old Notes Tendered" is inadequate, the Certificate number(s)
and/or the principal amount of Old Notes and any other required information
should be listed on a separate signed schedule and attached to this Letter of
Transmittal.

   4.  Partial Tenders and Withdrawal Rights.  Tenders of Old Notes will be
accepted only in integral multiples of $1,000 principal amount. If less than
all the Old Notes evidenced by any Certificate submitted are to be tendered,
fill in the principal amount of Old Notes which are to be tendered in the box
entitled "Description of Old Notes--Principal Amount Tendered." In such case,
new Certificate(s) for the remainder of the Old Notes that were evidenced by
the old Certificate(s) will be sent to the tendering holder, unless the
appropriate boxes on this Letter of Transmittal are completed, promptly after
the Expiration Date. All Old Notes represented by Certificates delivered to the
Exchange Agent will be deemed to have been tendered unless otherwise indicated.

   Except as otherwise provided herein, tenders of Old Notes may be withdrawn
at any time prior to the Expiration Date. In order for a withdrawal to be
effective, a written, telegraphic or facsimile transmission of such notice of
withdrawal must be timely received by the Exchange Agent at its address set
forth above prior to the Expiration Date. Any such notice of withdrawal must
specify the name of the person who tendered the Old Notes to be withdrawn, the
aggregate principal amount of Old Notes to be withdrawn, and (if Certificates
for such Old Notes have been tendered) the name of the registered holder of the
Old Notes as set forth on the Certificate(s), if different from that of the
person who tendered such Old Notes. If Certificates for Old Notes have been
delivered or otherwise identified to the Exchange Agent, the notice of
withdrawal must specify the serial numbers on the particular Certificates for
the Old Notes to be withdrawn and the signature on the notice of withdrawal
must be guaranteed by an Eligible Institution, except in the case of Old Notes
tendered for the account of an Eligible Institution. If Old Notes have been
tendered pursuant to the procedures for book-entry transfer set forth under
"The Exchange Offer; Registration Rights--Book-Entry Transfer" in the
Prospectus, the notice of withdrawal must specify the name and number of the
account at DTC to be credited with the withdrawal of Old Notes and must
otherwise comply with the procedures of DTC. Withdrawals of tenders of Old
Notes may not be rescinded. Old Notes properly withdrawn will not be deemed
validly tendered for purposes of the Exchange Offer, but may be retendered at
any subsequent time prior to the Expiration Date by following any of the
procedures described in the Prospectus under "The Exchange Offer; Registration
Rights--Procedures for Tendering."

   All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by the Company, in its
sole discretion, which determination shall be final and binding on all parties.
Neither the Company, any affiliates of the Company, the Exchange Agent or any
other person shall be under any duty to give any notification of any defects or
irregularities in any notice of withdrawal or incur any liability for failure
to give any such notification. Any Old Notes which have been tendered but which
are withdrawn will be returned to the holder thereof promptly after withdrawal.

   5.  Signatures on Letter of Transmittal, Assignments and Endorsements.  If
this Letter of Transmittal is signed by the registered holder(s) of the Old
Notes tendered hereby, the signature(s) must correspond exactly with the
name(s) as written on the face of the Certificate(s) or on a security position
listing, without alteration, enlargement or any change whatsoever.

   If any of the Old Notes tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.

                                      11



   If any tendered Old Notes are registered in different names on several
Certificates, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal (or facsimiles thereof) as there are names in
which Certificates are registered.

   If this Letter of Transmittal or any Certificates or bond powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity,
such persons should so indicate when signing and must submit proper evidence
satisfactory to the Company, in its sole discretion, of such persons' authority
to so act.

   If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Old Notes listed and transmitted hereby, the
Certificate(s) must be endorsed or accompanied by appropriate bond power(s),
signed exactly as the name(s) of the registered owner appear(s) on the
Certificate(s), and also must be accompanied by such opinions of counsel,
certifications and other information as the Company or the Trustee for the Old
Notes may require in accordance with the restrictions on transfer applicable to
the Old Notes. Signature(s) on such Certificate(s) or bond power(s) must be
guaranteed by an Eligible Institution.

   6.  Special Registration and Delivery Instructions.  If Exchange Notes or
Certificates for Old Notes not exchanged are to be issued in the name of a
person other than the signer of this Letter of Transmittal, or are to be sent
to someone other than the signer of this Letter of Transmittal or to an address
other than that shown above, the appropriate boxes on this Letter of
Transmittal should be completed. In the case of issuance in a different name,
the taxpayer identification number of the person named must also be indicated.
Holders tendering Old Notes by book-entry transfer may request that Old Notes
not exchanged be credited to such account maintained at DTC as such holder may
designate. If no such instructions are given, Old Notes not exchanged will be
returned by mail or, if tendered by book-entry transfer, by crediting the
account indicated above maintained at DTC.

   7.  Irregularities.  The Company will determine, in its sole discretion, all
questions as to the form of documents, validity, eligibility (including time of
receipt) and acceptance for exchange of any tender of Old Notes, which
determination shall be final and binding on all parties. The Company reserves
the absolute right, in its sole and absolute discretion, to reject any and all
tenders determined by it not to be in proper form or the acceptance for
exchange of which may, in the view of counsel to the Company, be unlawful. The
Company also reserves the absolute right, subject to applicable law, to waive
any of the conditions of the Exchange Offer set forth in the Prospectus under
"The Exchange Offer; Registration Rights--Conditions to the Exchange Offer" or
any defect or irregularity in any tender of Old Notes of any particular holder
whether or not similar defects or irregularities are waived in the case of
other holders. The Company's interpretation of the terms and conditions of the
Exchange Offer (including this Letter of Transmittal and the instructions
hereto) will be final and binding. No tender of Old Notes will be deemed to
have been validly made until all defects or irregularities with respect to such
tender have been cured or waived. Neither the Company, any affiliates of the
Company, the Exchange Agent, or any other person shall be under any duty to
give any notification of any defects or irregularities in tenders or incur any
liability for failure to give any such notification.

   8.  Questions, Requests for Assistance and Additional Copies.  Questions and
requests for assistance may be directed to the Exchange Agent at its address
and telephone number set forth above. Additional copies of the Prospectus, the
Notice of Guaranteed Delivery and the Letter of Transmittal may be obtained
from the Exchange Agent or from your broker, dealer, commercial bank, trust
company or other nominee.

   9.  Mutilated, Lost, Destroyed or Stolen Certificates.  If any Certificate
representing Old Notes has been mutilated, lost, destroyed or stolen, the
holder should promptly notify the Exchange Agent. The holder will then be
instructed as to the steps that must be taken in order to replace the
Certificate. This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing mutilated, lost, destroyed or
stolen Certificates have been followed.

   10.  Security Transfer Taxes.  Holders who tender their Old Notes for
exchange will not be obligated to pay any transfer taxes in connection
therewith, except that if Exchange Notes are to be delivered to, or are to be

                                      12



issued in the name of, any person other than the registered holder of the Old
Notes tendered, or if a transfer tax is imposed for any reason other than the
exchange of Old Notes in connection with the Exchange Offer, then the amount of
any such transfer tax (whether imposed on the registered holder or any other
persons) will be payable by the tendering holder. If satisfactory evidence of
payment of such transfer tax or exemption therefrom is not submitted with the
Letter of Transmittal, the amount of such transfer tax will be billed directly
to such tendering holder.

   11.  Tax Identification Number and Backup Withholding.  Federal income tax
law generally requires that a holder of Old Notes whose tendered Old Notes are
accepted for exchange or such holder's assignee (in either case, the "Payee"),
provide the exchange agent (the "Payor") with such Payee's correct Taxpayer
Identification Number ("TIN"), which, in the case of a Payee who is an
individual, is such Payee's social security number. If the Payor is not
provided with the correct TIN or an adequate basis for an exemption, such Payee
may be subject to a $50 penalty imposed by the Internal Revenue Service and
backup withholding in an amount up to 31% of the gross proceeds received
pursuant to the Exchange Offer. If withholding results in an overpayment of
taxes, a refund may be obtained.

   To prevent backup withholding, each Payee must provide such Payee's correct
TIN by completing the "Substitute Form W-9" set forth herein, certifying that
the TIN provided is correct (or that such Payee is awaiting a TIN) and that:

  .   the Payee is exempt from backup withholding;

  .   the Payee has not been notified by the Internal Revenue Service that such
      Payee is subject to backup withholding as a result of a failure to report
      all interest or dividends; or

  .   the Internal Revenue Service has notified the Payee that such Payee is no
      longer subject to backup withholding.

   If the Payee does not have a TIN, such Payee should consult the enclosed
Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9 (the "W-9 Guidelines") for instructions on applying for a TIN, write
"Applied For" in the space for the TIN in Part 1 of the Substitute Form W-9,
and sign and date the Substitute Form W-9 and the Certificate of Awaiting
Taxpayer Identification Number set forth herein. If the Payee does not provide
such Payee's TIN to the Payor within 60 days, backup withholding will begin and
continue until such Payee furnishes such Payee's TIN to the Payor. Note:
Writing "Applied For" on the form means that the Payee has already applied for
a TIN or that such Payee intends to apply for one in the near future.

   If Old Notes are held in more than one name or are not in the name of the
actual owner, consult the W-9 Guidelines for information on which TIN to report.

   Exempt Payees (including, among others, all corporations and certain foreign
individuals) are not subject to these backup withholding and reporting
requirements. To prevent possible erroneous backup withholding, an exempt Payee
must enter its correct TIN in Part I of the Substitute Form W-9, write "Exempt"
in Part 2 of such form and sign and date the form. See the W-9 Guidelines for
additional instructions. In order for a nonresident alien or foreign entity to
qualify as exempt, such person must submit a completed Form W-8, "Certificate
of Foreign Status," signed under penalty of perjury attesting to such exempt
status. Such form may be obtained from the Payor.

   IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE THEREOF), TOGETHER
WITH CERTIFICATES REPRESENTING TENDERED OLD NOTES OR A BOOK-ENTRY CONFIRMATION
AND ALL OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR
TO THE EXPIRATION DATE.

                                      13



                  PAYOR'S NAME: U.S. BANK, N.A. (THE "PAYOR")

                                                                          
- -------------------------------------------------------------------------------------------------------------------------
SUBSTITUTE                          PART I--PLEASE PROVIDE YOUR                 TIN: _________________________
                                    TIN IN THE BOX AT RIGHT AND                     Social Security Number
Form W-9                            CERTIFY BY SIGNING AND                                    or
                                    DATING BELOW

                                    --------------------------------------------
Department of the                   PART 2--FOR PAYEES EXEMPT
Treasury                            FROM BACKUP WITHHOLDING                     ------------------------
Internal Revenue Service            (See Instructions)                          Employer Identification Number

                                    -------------------------------------------------------------------------------------
                                    PART 3--CERTIFICATION--Under penalties of perjury, I certify that:
Payer's Request for Taxpayer
Identification Number ("TIN")       (1) The number shown on this form is my correct TIN (or I am waiting for a
and Certification                       number to be issued to me), and
                                    (2) I am not subject to backup withholding because: (a) I am exempt from
                                        backup withholding, or (b) 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 (c) the IRS has notified me that I
                                        am no longer subject to backup withholding.
                                    (3) I am a U.S. person (including a U.S. resident alien).

                                    The IRS does not require your consent to any provision of this document other
                                    than the certification required to avoid backup withholding.

                                    SIGNATURE ______________________________  DATE ___________
- -------------------------------------------------------------------------------------------------------------------------
You must cross out item (2) in Part 3 above if you have been notified by the IRS that you are currently subject to backup
withholding because of underreporting interest or dividends on your tax return.
- -------------------------------------------------------------------------------------------------------------------------
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU WROTE "APPLIED FOR" IN PART 1 OF THE
SUBSTITUTE FORM W-9.
- -------------------------------------------------------------------------------------------------------------------------



         CERTIFICATE OF PAYEE AWAITING TAXPAYER IDENTIFICATION NUMBER

   I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and that I mailed or delivered an application to
receive identification number to the appropriate Internal Revenue Service
Center or Social Security Administration Office (or I intend to mail or deliver
an application in the near future). I understand that if I do not provide a
taxpayer identification number to the Payor within 60 days, the Payor is
required to withhold at the applicable backup withholding rate for all cash
payments made to me thereafter until I provide a taxpayer identification number.

SIGNATURE ____________________________________________  DATE __________________

   NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN A $50 PENALTY
IMPOSED BY THE INTERNAL REVENUE SERVICE AND IN BACKUP WITHHOLDING AT THE
APPLICABLE RATE FOR ALL CASH PAYMENTS. PLEASE REVIEW THE ENCLOSED GUIDELINES
FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR
ADDITIONAL DETAILS.

                                      14

EX-99.2

                                                                   EXHIBIT 99.2
                         NOTICE OF GUARANTEED DELIVERY

                       For Tender Of Any And All Of Its
  Outstanding 10 1/8% Senior Subordinated Notes due 2012 (the "Old Notes") of

                                LBI MEDIA, INC.

   This Notice of Guaranteed Delivery, or one substantially equivalent to this
form, must be used to tender Old Notes pursuant to the Exchange Offer described
in the Prospectus dated [      ], 200   (as the same may be amended or
supplemented from time to time, the "Prospectus") of LBI Media, Inc. (the
"Company"), if certificates for the Old Notes are not immediately available, or
time will not permit the Old Notes, the Letter of Transmittal and all other
required documents to be delivered to U.S. Bank, N.A. (the "Exchange Agent")
prior to 5:00 p.m., New York City time, on [      ], 200   or such later date
and time to which the Exchange Offer may be extended (the "Expiration Date"),
or the procedures for delivery by book-entry transfer cannot be completed on a
timely basis. This Notice of Guaranteed Delivery, or one substantially
equivalent to this form, must be delivered by hand or sent by facsimile
transmission or mail to the Exchange Agent, and must be received by the
Exchange Agent prior to the Expiration Date. See "The Exchange Offer;
Registration Rights--Guaranteed Delivery Procedures" in the Prospectus.
Capitalized terms used but not defined herein shall have the same meaning given
them in the Prospectus.

                 The Exchange Agent for the Exchange Offer is:

                                U.S. Bank, N.A.

             By Overnight Delivery or
                    Registered
                or Certified Mail:          By Hand Delivery:
                  U.S. Bank, N.A.            U.S. Bank, N.A.
               180 East Fifth Street      180 East Fifth Street
             St. Paul, Minnesota 55101  St. Paul, Minnesota 55101
              Attention: Specialized     Attention: Specialized
                      Finance                    Finance

          Facsimile Transmission Number (Eligible Institutions Only):
                                (651) 244-1537

                  Confirm Receipt of Facsimile by Telephone:
                                (651) 244-4512

   DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF THIS NOTICE OF GUARANTEED DELIVERY VIA
FACSIMILE OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.

   This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an "Eligible Institution" under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the
signature box on the Letter of Transmittal.



Ladies and Gentlemen:

   Upon the terms and conditions set forth in the Prospectus and the
accompanying Letter of Transmittal, the undersigned hereby tenders to the
Company the principal amount of Old Notes set forth below pursuant to the
guaranteed delivery procedure described in the Prospectus under the heading
"The Exchange Offer; Registration Rights--Guaranteed Delivery Procedures".

Principal Amount of Old Notes Tendered*: $ ____________________________________

Certificate Nos. (if available): ______________________________________________

Total Principal Amount Represented by Old Notes Certificate(s): $ _____________

If Old Notes will be delivered by book-entry transfer to The Depository Trust
Company, provide account number. Account Number: ______________________________

All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned and every obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned.

*  Must be in denominations of principal amount of $1,000 and any integral
   multiple thereof.

- --------------------------------------------------------------------------------
                               PLEASE SIGN HERE

             X _____________________      ______________________
             X _____________________     ______________________
             Signature(s) of Owner(s)             Date
              or Authorized Signatory

Area Code and Telephone Number: _______________________________________________

   Must be signed by the holder(s) of Old Notes as their name(s) appear(s) on
certificates for Old Notes or on a security position listing, or by person(s)
authorized to become registered holder(s) by endorsement and documents
transmitted with this Notice of Guaranteed Delivery. If signature is by a
trustee, executor, administrator, guardian, attorney-in-fact, officer or other
person acting in a fiduciary or representative capacity, such person must set
forth his or her full title below.

                     Please print name(s) and address(es)

Name(s):
         ____________________________________________________________________

         ______________________________________________________________________

         ______________________________________________________________________

Capacity:
         ______________________________________________________________________

Address(es):
         ______________________________________________________________________

         ______________________________________________________________________

         ______________________________________________________________________

         ______________________________________________________________________

               THE GUARANTEE ON THE NEXT PAGE MUST BE COMPLETED



                                   GUARANTEE

                   (NOT TO BE USED FOR SIGNATURE GUARANTEE)

   The undersigned, 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 a 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, hereby guarantees that the
undersigned will deliver to the Exchange Agent the certificates representing
the Old Notes being tendered hereby in proper form for transfer (or a
confirmation of book-entry transfer of such Old Notes into the Exchange Agent's
account at the book-entry transfer facility of The Depository Trust Company
("DTC") with delivery of a properly completed and duly executed Letter of
Transmittal (or facsimile thereof), with any required signature guarantees and
any other required documents, all within three New York Stock Exchange trading
days after the date of execution of the Notice of Guaranteed Delivery.

   The undersigned acknowledges that it must deliver the Letter of Transmittal
and Old Notes tendered hereby to the Exchange Agent within the time period set
forth above and that failure to do so could result in financial loss to the
undersigned.

             -------------------------  -------------------------
                   Name of Firm           Authorized Signature

             -------------------------  -------------------------
                      Address                     Title

             -------------------------  Name: ___________________
                     Zip Code            (Please Type or Print)


             Area Code and Tel. No. __  Dated: __________________

NOTE: DO NOT SEND CERTIFICATES FOR OLD NOTES WITH THIS FORM. CERTIFICATES FOR
      OLD NOTES SHOULD BE SENT ONLY WITH A COPY OF YOUR PREVIOUSLY EXECUTED
      LETTER OF TRANSMITTAL.