S-4/A

As filed with the Securities and Exchange Commission on January  22, 2003

Registration Number 333-100330

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

AMENDMENT NO. 1

TO

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.  ¨

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.

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, as amended,

for any and all of its 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, 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. 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 p.m., New York City time, on                 , 2003, unless extended. We will not receive any proceeds from the exchange offer.

We have not applied, and do not intend to apply, the notes for listing on any national securities exchange or automated quotation system.

You should carefully review the Risk Factors beginning on page 8 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     , 2003.

TABLE OF CONTENTS

	Page
PROSPECTUS SUMMARY	1
SUMMARY CONSOLIDATED FINANCIAL AND OTHER DATA	7
RISK FACTORS	8
FORWARD-LOOKING STATEMENTS	20
USE OF PROCEEDS	21
THE EXCHANGE OFFER; REGISTRATION RIGHTS	22
CAPITALIZATION	29
SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OTHER DATA	30
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	32
BUSINESS	44
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
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS	116
PLAN OF DISTRIBUTION	121
LEGAL MATTERS	123
EXPERTS	123
WHERE YOU CAN FIND MORE INFORMATION	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 those 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 the old notes were acquired by the 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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PROSPECTUS SUMMARY

You should read the entire prospectus, including “Risk Factors” and our financial statements and related notes, before making an investment decision. 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.

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 consists of six Spanish-language radio stations (five FM and one AM), two time-brokered AM stations and a full-power television station. We expect to add an additional Spanish-language FM radio station in the Los Angeles market in the second quarter of 2003 and an additional Spanish-language AM radio station in the Houston market by the end of the first quarter of 2003, both pursuant to definitive agreements we have already entered into. 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 operating income, before depreciation and amortization, 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, and our net income increased from a loss of $5.5 million to income of $1.8 million.

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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. We create cross-selling opportunities by offering our advertisers the ability to cross-advertise on radio and television, as well as to cross-merchandise through product integration. We create cross-promotion opportunities by using a portion of our spot inventory time at both our radio and television stations to run advertisements promoting our other stations and programs.

Target the local community.     We create radio and television programming specifically tailored to the preferences of the Hispanic population in each of our coverage areas. 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.

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.

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

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. 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.

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.

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.

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. 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 the Hispanic population grows, more stations may begin competing with us. However, we believe we are well positioned to capitalize on the Hispanic advertising market 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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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. We will issue and deliver the exchange notes as promptly as practicable after the expiration of the exchange offer.
Resale of Exchange Notes	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 the SEC may not 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. See “Plan of Distribution.”
Expiration Date	5:00 p.m., New York City time, on                             , 2003 , unless, in our sole discretion, we extend the exchange offer (the “Expiration Date”).
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.”

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 these old notes.
Material 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 these 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 “Material United States Federal Income Tax Consequences.”
Exchange Agent	U.S. Bank, N.A. is serving as exchange agent in connection with 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.

As of September 30, 2002, approximately $72.9 million of senior debt, which includes borrowings under our senior credit facility and non-recourse debt issued by one of our wholly-owned subsidiaries, ranks senior to the notes and guarantees, and no debt having an equal ranking with, or subordinated to, the notes and the guarantees was 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.

5

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 that 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.

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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 and for the nine months ended September 30, 2001 and September 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 nine months ended September 30, 2001 and September 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			Nine Months Ended September 30,
				2001			2002
	(dollars in thousands)
Operating Data:
Net revenues:
Radio	$	31,553		$	23,556		$	29,000
Television		28,104			21,092			22,941
Total net revenues		59,657			44,648			51,941
Operating expenses (exclusive of noncash employee compensation and depreciation and amortization shown below)		26,744			18,578			23,696
Noncash employee compensation		1,398			1,068			2,926
Depreciation and amortization		8,673			6,035			2,339
Impairment of broadcast license		—			—			1,750
Operating income		22,842			18,967			21,230
Interest expense, net		20,972			15,833			23,152
Loss on sale of property and equipment		—			—			388
Income (loss) before income taxes and cumulative effect of accounting change		1,870			3,134			(2,310	)
Income tax expense		81			91			31
Income (loss) before cumulative effect of accounting change		1,789			3,043			(2,341	)
Cumulative effect of accounting change		—			—			(8,106	)
Net income (loss)	$	1,789		$	3,043		$	(10,447	)
Other Data:
Adjusted EBITDA(1)	$	32,913		$	26,071		$	28,245
Adjusted EBITDA margin(2)		55.2	%		58.4	%		54.4	%
Cash interest expense	$	11,877		$	9,067		$	9,880
Cash flows provided by operating activities	$	14,343		$	10,959		$	10,365
Cash flows used in investing activities	$	(108,677	)	$	(105,872	)	$	(6,502	)
Cash flows provided by (used in) financing activities	$	94,980		$	105,399		$	(138	)
Ratio of earnings to fixed charges(3)		1.1	x		1.2	x		—

	As of September 30, 2002
	(in thousands)
Balance Sheet Data:
Cash and cash equivalents	$	4,856
Working capital		12,341
Broadcast licenses, net		171,440
Total assets		246,500
Total debt(5)		222,866
Total stockholders’ equity		11,883

(1) We define Adjusted EBITDA as operating income plus depreciation and amortization, noncash employee compensation and noncash impairment write-down. Adjusted EBITDA is not a measure of performance calculated in accordance with accounting principles generally accepted in the United States, and should be viewed as a supplement to, and not a substitute for, our results of operations presented on the basis of accounting principles generally accepted in the United States. We use this financial measure because management believes it is useful for all investors and users of our financial statements in understanding our cash flows. In addition, we believe that Adjusted EBITDA is useful because it is generally recognized by the broadcasting industry as a measure of performance and is used by investors and analysts who report on the performance of broadcast companies. Adjusted EBITDA does not purport to represent cash flow provided by operating activities. Our statement of cash flows presents our cash flow activity in accordance with accounting principles generally accepted in the United States. Furthermore, Adjusted EBITDA is not necessarily comparable to similarly titled measures reported by other companies.

(2) Adjusted EBITDA margin means Adjusted EBITDA divided by net revenues.

(3) 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 $2.3 million for the nine months ended September 30, 2002.

(5) 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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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 those 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 those 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 the 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 September 30, 2002, 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 $222.9 million (excluding the 9% subordinated notes issued by our parent).

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The table set forth below shows our debt to total capitalization as of September 30, 2002 (dollars in thousands):

Total indebtedness	$	222,866
Stockholders’ equity		11,883
Total capitalization		234,749
Debt to total capitalization		94.9	%

Since our total capitalization consists of over 94% debt, we are considered to be highly leveraged and will have to devote much of our resources to repaying this debt on its scheduled payment dates. In contrast, if the ratio were lower we would have more flexibility in using our cash flow because we would have lower debt service obligations and potentially fewer restrictive covenants under our debt agreements. Our substantial indebtedness could have other 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. Based on our current interest rates and assuming no additional borrowings or principal payments on our senior credit facility until its maturity in 2009, as of September 30, 2002, we would have needed approximately $94.4 million over the next five years to meet our principal and interest payments under our debt agreements, of which $18.9 million would be due over the next year.

Our business may not generate sufficient cash flow from operations, or future borrowings may not 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 may not 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.

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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 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 our 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.

The old notes and the guarantees rank junior to approximately $72.9 million of senior debt as of September 30, 2002. 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;

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• grant liens;

• transfer or sell assets;

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

• enter into transactions with affiliates.

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 may not have sufficient funds available, or we may not have access to sufficient capital from other sources, to repay any accelerated debt. Even if we could obtain additional financing, the terms of the financing may not be favorable to us. In addition, substantially all of our assets are subject to liens securing our senior credit facility. If amounts outstanding under our senior credit facility are accelerated, our lenders could foreclose on these liens. Our assets may not 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. Payments made to us by our subsidiaries may not 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.

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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 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. If our senior credit facility is accelerated, we may not be able to repay amounts outstanding under it or obtain necessary consents under it 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.

Market data and other statistical information used in this prospectus are based on independent sources that we have not independently verified and thus may not be accurate or complete.

Market data and other statistical information used throughout this prospectus are based on 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 Advertising (TVB). Although we believe that these sources are reliable, we have not independently verified the information and cannot guarantee its accuracy or completeness.

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.

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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.

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 these 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.

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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 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 these 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 that 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 that 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.

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If we violate the Communications Act of 1934, as amended, 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 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, in the event we are named as a potentially responsible party in the future 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.

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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 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 digital television, 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 digital television receivers reaches certain levels by that time. Our cost to construct digital television facilities and the additional costs to broadcast both digital and analog signals for our full-service television stations between 2002 and 2006 is estimated to be approximately $4.5 million.

The FCC initially required our full-service television stations to begin broadcasting a digital television signal by November 1, 2002. KRCA-TV met this deadline but we have 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 digital television signal by broadcasting a signal that serves, at least, each full-service television station’s applicable community of license. In Los Angeles, this new rule has permitted us to, and in Houston, we anticipate that this new rule will permit us to, temporarily install facilities of a lower-power level. These lower-power facilities will not require the initial degree of capital investment we had anticipated to meet the requirements of our stations’ digital television authorizations. Our initial cost of converting KZJL-TV to digital television, 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 digital television authorizations.

We intend to explore the most effective use of digital broadcast technology for each of our stations. We may not, however, 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. The FCC or Congress may take future actions with respect to regulatory control of these activities and these actions may have a material adverse effect on us. Also, our final costs to convert our television stations to full-service digital television could be significant, and there may not be sufficient consumer demand for digital television services to recover our investment in digital television 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 those 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

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• 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, 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 digital television 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 digital television. 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.

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 digital television broadcasting. The final rules that the FCC adopts may or may not have an effect 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 allows direct broadcast satellite 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, the 1999 Satellite Act requires that in television markets in which a direct broadcast satellite company elects to pick-up and retransmit any local broadcast station signals, the direct broadcast satellite 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 direct broadcast satellite 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 direct broadcast satellite operators and a satellite broadcasting trade association have instituted litigation challenging the constitutionality of the 1999 Satellite Act’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 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, or FTC, and the Department of Justice, may investigate certain acquisitions. After the passage of the Telecommunications Act of 1996, 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

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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.

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. The FTC or Department of Justice could 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 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 of 1934, as amended. 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. 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 may not 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;

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• 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 may not have the resources to acquire new technologies or to introduce new services that could compete with other new technologies. We may encounter increased competition arising from new technologies. 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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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.”

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.

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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 person receiving the exchange notes, whether or not the person is the registered 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 the 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 the 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

• 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 those old notes were acquired by that 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.” 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                     , 2003, 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 will be 5:00 p.m., New York City time, on                 , 2003, unless we, in our sole discretion, extend the exchange offer, in which case the Expiration Date will be the latest date and time to which the exchange offer is extended. 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” have not 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 the time that we 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 will 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 those exchange notes, whether or not that 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 the 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 those old notes or a timely Book-Entry Confirmation of those 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, those 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 those 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 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 those old notes;

• be signed by the holder in the same manner as the original signature on the letter of transmittal by which those 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 those old notes into the name of the person withdrawing the tender; and

• specify the name in which those 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 these notices will be determined by us, which determination will 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 will not be deemed a waiver of any of those rights and each of those rights will 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 is 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 September 30, 2002, giving 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.

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 September 30, 2002
	(in thousands)
Cash and cash equivalents	$	4,856
Long-term debt (including current portion):
Senior credit facility(1)	$	70,000
Old notes issued on July 9, 2002		150,000
Empire Burbank loan		2,866
Total debt(2)		222,866
Stockholders’ equity:
Common stock, $0.01 par value, 1,000 shares authorized; 100 shares issued and outstanding		—
Additional paid-in capital		22,658
Retained deficit		(10,766	)
Accumulated other comprehensive loss		(9	)
Total stockholders’ equity		11,883
Total capitalization	$	234,749

(1) On 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 on September 30, 2002, subject to the restrictions on incurrence of indebtedness in the indenture governing the notes. On October 11, 2002, we borrowed an additional $23.5 million under our senior credit facility to finance the acquisition of selected assets of three radio stations. On each of November 13, 2002 and December 12, 2002, we made principal payments of $1.75 million, or a total of $3.50 million. On January 14, 2003, we borrowed an additional $6.9 million, which leaves us with $73.1 million of available borrowing capacity. We may borrow up to $53.1 million without having to meet the restrictions contained 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 nine months ended September 30, 2001 and September 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 nine months ended September 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,															Nine Months Ended September 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		$	23,556		$	29,000
Television		—			10,603			16,997			21,916			28,104			21,092			22,941
Total net revenues		18,493			27,141			36,417			50,552			59,657			44,648			51,941
Operating expenses (exclusive of noncash employee compensation and depreciation and amortization shown below)		11,208			11,182			17,739			22,550			26,744			18,578			23,696
Noncash employee compensation		—			—			—			1,240			1,398			1,068			2,926
Depreciation and amortization		1,912			3,980			4,435			4,637			8,673			6,035			2,339
Impairment of broadcast license		—			—			—			—			—			—			1,750
Operating income		5,373			11,979			14,243			22,125			22,842			18,967			21,230
Interest expense, net		10,886			7,673			6,461			6,597			20,972			15,833			23,152
Loss on sale of property and equipment		—			—			—			—			—			—			388
Income (loss) before income taxes and cumulative effect of accounting change		(5,513	)		4,306			7,782			15,528			1,870			3,134			(2,310	)
Income tax expense		—			3			6			74			81			91			31
Income before cumulative effect of accounting change		(5,513	)		4,303			7,776			15,454			1,789			3,043			(2,341	)
Cumulative effect of accounting change		—			—			—			—			—			—			(8,106	)
Net income (loss)	$	(5,513	)	$	4,303		$	7,776		$	15,454		$	1,789		$	3,043		$	(10,447	)
Other Data:
Adjusted EBITDA(1)	$	7,285		$	15,959		$	18,678		$	28,002		$	32,913		$	26,071		$	28,245
Cash interest expense	$	3,893		$	7,037		$	6,209		$	6,162		$	11,877		$	9,067		$	9,880
Capital expenditures	$	1,169		$	2,005		$	4,668		$	4,044		$	13,954		$	11,166		$	3,489
Cash flows provided by (used in) operating activities	$	3,858		$	(1,583	)	$	11,744		$	20,393		$	14,343		$	10,959		$	10,365
Cash flows used in investing activities	$	(15,470	)	$	(60,647	)	$	(9,693	)	$	(13,507	)	$	(108,677	)	$	(105,872	)	$	(6,502	)
Cash flows provided by (used in) financing activities	$	12,016		$	61,797		$	1,340		$	(11,017	)	$	94,980		$	105,399		$	(138	)
Ratio of earnings to fixed charges (unaudited)(2)		—			1.5x			2.2x			3.3x			1.1x			1.2x			—

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	As of December 31,													As of September 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		$	4,856
Working capital (deficit)		(6,248	)		3,978		4,545		(7,069	)		(4,355	)		12,341
Broadcast licenses, net		41,078			95,587		92,990		89,797			181,294			171,440
Total assets		64,570			124,642		134,360		140,245			248,400			246,500
Total debt(3)		55,364			76,664		78,268		76,960			218,768			222,866
Total stockholders’ equity		(1,123	)		46,003		53,582		59,176			22,540			11,883

(1) We define Adjusted EBITDA as operating income plus depreciation and amortization, noncash employee compensation and noncash impairment write-down. Adjusted EBITDA is not a measure of performance calculated in accordance with accounting principles generally accepted in the United States, and should be viewed as a supplement to, and not a substitute for, our results of operations presented on the basis of accounting principles generally accepted in the United States. We use this financial measure because management believes it is useful for all investors and users of our financial statements in understanding our cash flows. In addition, we believe that Adjusted EBITDA is useful because it is generally recognized by the broadcasting industry as a measure of performance and is used by investors and analysts who report on the performance of broadcast companies. Adjusted EBITDA does not purport to represent cash flow provided by operating activities. Our statement of cash flows presents our cash flow activity in accordance with accounting principles generally accepted in the United States. Furthermore, Adjusted EBITDA is not necessarily comparable to similarly titled measures reported by other companies.

(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 and $2.3 million for the year ended December 31, 1997 and the nine months ended September 30, 2002, respectively.

(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 Los Angeles, California, Houston, Texas and San Diego, California. Our radio stations consist of three FM and two AM stations serving Los Angeles, California and its surrounding area and five FM and three AM stations serving Houston, Texas and its surrounding area. We expect to add an additional FM radio station in the Los Angeles market in the second quarter of 2003, and an additional AM radio station in the Houston, Texas market by the end of the first quarter of 2003, both pursuant to definitive agreements we have already entered into. 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 what we refer to as Adjusted EBITDA. We define Adjusted EBITDA as operating income plus depreciation and amortization, noncash employee compensation and noncash impairment write-down. Adjusted EBITDA is not a measure of performance calculated in accordance with accounting principles generally accepted in the United States, and should be viewed as a supplement to, and not a substitute for, our results of operations presented on the basis of accounting principles generally accepted in the United States. We use this financial information because management believes it is useful for all investors and users of our financial statements in understanding our cash flows. In addition, we believe that Adjusted 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. Adjusted EBITDA does not purport to represent cash flow provided by operating activities. Our statement of cash flows presents our cash flow activity in accordance with accounting principles generally accepted in the United States. Furthermore, Adjusted EBITDA is not necessarily comparable to similarly titled measures reported 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.

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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.

On October 11, 2002, we completed our acquisition of selected assets of KQQK-FM, licensed in Houston, Texas, for an aggregate purchase price of $24.7 million (including acquisition costs). The purchase was pursuant to an asset purchase agreement, dated as of April 5, 2002, with El Dorado, as amended on October 8, 2002. Pursuant to another asset purchase agreement dated April 5, 2002, with El Dorado, as amended on October 8, 2002, we have also agreed to acquire selected assets of radio station KEYH-AM, licensed in the Houston, Texas market. El Dorado has operated KEYH-AM under time brokerage agreements since 1995 and has exercised an option to purchase the radio station. Upon satisfaction of customary closing conditions specified in the asset purchase agreement, as amended, we will purchase KEYH-AM for a purchase price of approximately $5.7 million. We expect to complete this acquisition by the end of the first quarter of 2003. We began operating both KQQK-FM and KEYH-AM on May 20, 2002 under two time brokerage agreements, and have significantly changed the format, customer base, revenue stream and employee base of these stations.

On October 11, 2002, we also completed our acquisition of selected assets of KIOX-FM and KXGJ-FM, licensed to El Campo and Bay City, Texas, respectively, for an aggregate purchase price of $3.4 million (including acquisition costs).

On December 19, 2002, we entered into an agreement to purchase selected assets of radio station KMXN-FM, licensed in Garden Grove, California, for an aggregate purchase price of $35.0 million, of which we have placed $2.0 million in escrow. At the same time, we entered into a time brokerage agreement to operate the station until we complete the purchase. We expect to complete the acquisition in the second quarter of 2003, subject to closing conditions specified in the asset purchase agreement.

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,						Nine Months Ended September 30,
	1999		2000		2001		2001		2002
	(in thousands)
							(unaudited)
Net revenues:
Radio	$	19,420	$	28,636	$	31,553	$	23,556	$	29,000
Television		16,997		21,916		28,104		21,092		22,941
Total	$	36,417	$	50,552	$	59,657	$	44,648	$	51,941
Total operating expenses before noncash employee compensation, depreciation and amortization and noncash impairment write-down:
Radio	$	10,779	$	13,612	$	14,922	$	9,884	$	12,747
Television		6,960		8,938		11,822		8,694		10,949
Total	$	17,739	$	22,550	$	26,744	$	18,578	$	23,696
Noncash employee compensation:
Radio	$	—	$	1,240	$	1,398	$	1,068	$	2,926
Total	$	—	$	1,240	$	1,398	$	1,068	$	2,926
Depreciation and amortization:
Radio	$	2,132	$	1,964	$	3,678	$	2,506	$	1,034
Television		2,303		2,673		4,995		3,529		1,305
Total	$	4,435	$	4,637	$	8,673	$	6,035	$	2,339
Noncash impairment write-down:
Television	$	—	$	—	$	—	$	—	$	1,750
Total	$	—	$	—	$	—	$	—	$	1,750
Operating income:
Radio	$	6,509	$	11,820	$	11,555	$	10,098	$	12,294
Television		7,734		10,305		11,287		8,869		8,936
Total	$	14,243	$	22,125	$	22,842	$	18,967	$	21,230
Adjusted EBITDA(1):
Radio	$	8,641	$	15,024	$	16,631	$	13,672	$	16,253
Television		10,037		12,978		16,282		12,398		11,991
Total	$	18,678	$	28,002	$	32,913	$	26,071	$	28,245
Identifiable assets:
Radio	$	5,781	$	8,214	$	30,483	$	33,914	$	25,040
Television		12,270		12,668		16,334		10,898		21,099
Total	$	18,051	$	20,882	$	46,817	$	44,812	$	46,139

(1) We define Adjusted EBITDA as operating income plus depreciation and amortization, noncash employee compensation and noncash impairment write-down. Adjusted EBITDA is not a measure of performance calculated in accordance with accounting principles generally accepted in the United States, and should be viewed as a supplement to, and not a substitute for, our results of operations presented on the basis of accounting principles generally accepted in the United States. We use this financial measure because management believes it is useful for all investors and users of our financial statements in understanding our cash flows. In addition, we believe that Adjusted EBITDA is useful because it is generally recognized by the broadcasting industry as a measure of performance and is used by investors and analysts who report on the performance of broadcast companies. Adjusted EBITDA does not purport to represent cash flow provided by operating activities. Our statement of cash flows presents our cash flow activity in accordance with accounting principles generally accepted in the United States. Furthermore, Adjusted EBITDA is not necessarily comparable to similarly titled measures reported by other companies.

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Nine Months Ended September 30, 2002 Compared to Nine Months Ended September 30, 2001

Net Revenues.    Net revenues increased by $7.3 million or 16.3% to $51.9 million for the nine months ended September 30, 2002 from $44.6 million for the same period in 2001. This increase was primarily attributable to (i) revenue growth of our Houston radio and television properties acquired in March 2001 and (ii) revenues from two additional radio stations in Houston that we began operating under time brokerage agreements in May 2002.

Net revenues for our radio segment increased by $5.4 million or 23.1% to $29.0 million for the nine months ended September 30, 2002, from $23.6 million for the same period in 2001. This increase was primarily attributable to (i) revenue growth of our Houston properties acquired in March 2001 and (ii) revenues from two additional radio stations in Houston that we began operating under time brokerage agreements in May 2002.

Net revenues for our television segment increased by $1.8 million or 8.8% to $22.9 million for the nine months ended September 30, 2002, from $21.1 million for the same period in 2001. This increase was largely attributable to revenue growth from our television station in Houston Texas, which we acquired in March 2001. This increase was offset in part by a decline in revenues from the leasing of our television production facility Empire Burbank Studios.

Total operating expenses.    Total operating expenses increased by $5.0 million or 19.6% to $30.7 million for the nine months ended September 30, 2002 from $25.7 million for the same period in 2001. This increase was primarily the result of (i) a $5.1 million increase in program and technical, promotional and selling, general and administrative expenses primarily related to (a) our Houston radio and television properties acquired in March 2001 and (b) two additional radio stations in Houston that we began operating under local marketing agreements in May 2002, (ii) a $1.9 million increase in noncash employee compensation, (iii) a $0.7 million increase in depreciation expense resulting from (a) additional capital expenditures at our Houston radio and television properties and (b) the completion of construction on our Los Angeles digital television transmission facilities in April 2002 and (iv) a noncash impairment charge of $1.8 million to reduce the carrying value of one of our broadcast licenses. The above increase in program and technical, promotional and selling, general and administrative expenses includes (i) $0.7 million in local marketing payments related to two radio stations that we began operating under time brokerage agreements in May 2002 and (ii) $0.4 million related to the settlement of certain litigation. The increase in total operating expenses was offset in part by a $4.5 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 by $3.2 million or 24.1% to $16.7 million for the nine months ended September 30, 2002, from $13.5 million for the same period of 2001. This increase was primarily the result of (i) a $2.8 million increase in program and technical, promotional and selling, general and administrative expenses related to (a) our Houston properties acquired in March 2001 and (b) the two additional radio stations in Houston that we began operating under local marketing agreements in May 2002, (ii) a $1.9 million increase in noncash employee compensation and (iii) a $0.5 million increase in depreciation expense resulting primarily from additional capital expenditures at our Houston properties. The increase in program and technical, promotional and selling, general and administrative expenses includes a charge of $0.7 million for local marketing payments related to two radio stations that we began operating under time brokerage agreements in May 2002. The increase in total operating expenses was offset in part by a $2.0 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 by $1.8 million or 14.6% to $14.0 million for the nine months ended September 30, 2002, from $12.2 million for the same period in 2001. This increase was the result of (i) a $2.2 million increase in program and technical, promotional and selling, general and administrative expenses primarily related to (a) our Houston television station acquired in March 2001 and (b) the addition of a locally-produced talk show in March 2002, (ii) a $0.3 million increase in depreciation expense

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resulting from the completion of construction on our Los Angeles digital television transmission facilities in April 2002 and (iii) a noncash impairment charge of $1.8 million to reduce the carrying value of one of our broadcast licenses. The increase in total operating expenses was offset by a $2.5 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 increased by $6.9 million to $23.2 million for the nine months ended September 30, 2002 from $16.3 million for the same period in 2001. This increase was due primarily to our July 2002 refinancing, which resulted in (i) a noncash write off of $6.1 million in previously deferred financing costs and (ii) a $2.5 million early redemption penalty on our old senior subordinated notes. This increase was offset by decreased borrowing under our senior credit facility, which was refinanced in July 2002, during the first nine months of 2002.

Interest and other income.    Interest and other income decreased by $0.3 million to $0.1 million for the nine months ended September 30, 2002, compared to $0.4 million for the same period in 2001. This decrease was primarily the result of a decline in interest rates during the first nine months of 2002, as compared to the same period in 2001.

Net income (loss).    As a result of the above factors, we recognized a net loss of $10.4 million for the nine months ended September 30, 2002, compared to net income of $3.0 million for the same period in 2001, a decrease of $13.4 million. The change in net income (loss) was due primarily to our adoption of SFAS 142 in the first quarter, which required us to compare the carrying values of our radio and television broadcast licenses to their respective fair values. As a result of this initial impairment test, we recorded an $8.1 million noncash charge to reduce the carrying value of certain of our broadcast licenses. In addition, the change was attributable to the refinancing of our senior notes in July 2002, which resulted in a non-cash write off of $6.1 million in previously deferred financing costs and a $2.5 million early redemption penalty on our old senior subordinated notes. This decrease in net income was offset in part by increased income from our Houston radio and television properties, which we began operating in 2001.

Adjusted EBITDA.    Adjusted EBITDA increased by $2.1 million or 8.3% to $28.2 million for the nine months ended September 30, 2002, from $26.1 million for the same period in 2001. This increase was primarily attributable to the improved 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

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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.

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.

Adjusted EBITDA.     Adjusted 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.

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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.

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.

Adjusted EBITDA.     Adjusted 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 on June 30, 2005 until it matures on September 30, 2009. Borrowings under the senior credit facility bear interest at a rate based on LIBOR or a base rate, plus an applicable margin that is dependent upon our leverage ratio. As of September 30, 2002, we had approximately $70.0 million outstanding under the senior credit facility and approximately $100.0 million of available committed borrowing capacity. Under the indenture governing the notes, we are limited in our ability to borrow under the senior credit facility. We may borrow up to $150.0 million under the senior credit facility without restriction, but any amount over $150.0 million that we desire to borrow under the senior credit facility will be subject to our compliance with a specified leverage ratio (as defined in the indenture). On October 11, 2002, we borrowed an additional $23.5 million under our senior credit facility to finance the acquisitions of KQQK-FM, KIOX-FM and KXGJ-FM. On each of November 13, 2002 and December 12, 2002, we made principal payments of $1.75 million on each date. On January 14, 2003, we borrowed an additional $6.9 million, which leaves us with $73.1 million of available borrowing capacity. Of the available $73.1 million borrowing capacity, we may borrow up to $53.1 million without having to meet the restrictions contained in the indenture governing the notes. We may

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increase the borrowing capacity under our senior credit facility by up to 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. As of September 30, 2002, we were in compliance with these covenants.

In July 2002, we issued $150.0 million of senior subordinated notes that mature in 2012. Under the terms of our senior subordinated notes, we will pay semi-annual interest payments of approximately $7.6 million each January 15 and July 15. The indenture governing the notes contains certain restrictive covenants that, among other things, limit our ability to incur additional indebtedness and pay dividends. As of September 30, 2002, we were in compliance with all these covenants.

In March 2001, our parent issued $30.0 million principal amount of 9% subordinated notes. Our parent’s 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 the earliest of (i) July 9, 2013, (ii) their acceleration following the occurrence and continuance of a material event of default, (iii) a merger, sale or similar transaction involving our parent or substantially all of the subsidiaries of our parent, (iv) a 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 (v) the date on which the warrants issued in connection with our parent’s 9% subordinated notes are repurchased pursuant to the call options applicable to the warrants. 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. As described in “Description of Other Indebtedness—9% Subordinated Notes due 2013,” the warrants have a put feature, which would allow the warrant holders to require our parent to repurchase the warrants at fair market value under certain events, and a call feature, which would allow our parent to repurchase the warrants at its option under certain events. Since our parent is a holding company that has no operations or assets, other than its investment in us, and is dependent on us for cash flow, funding from us would be required. However, we have no legal obligation to provide that funding to our parent.

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 September 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 approximately $32,000 through maturity in August 2014. See “Description of Other Indebtedness—Empire Burbank Loan.”

For both our radio and television segments, we have historically funded, and will continue to fund, expenditures for operations, administrative expenses, capital expenditures and debt service from our operating cash flow and to a lesser extent, borrowings under our senior credit facility. For our television segment, our planned uses of liquidity during the next twelve months will be the construction of a corporate office and production facility in Houston, Texas and the construction of digital television facilities for our television station in Houston, KZJL-TV. For our radio segment, our planned uses of liquidity during the next twelve months will be additional capital expenditures related to the corporate office building and production facility noted above, from which all of our radio stations in Houston will ultimately be broadcast. We believe that our cash on hand, cash provided by our operating activities and borrowings under our senior credit facility will be sufficient to permit us to meet our debt service obligations, fund potential acquisitions and fund operations for at least the next twelve months.

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Cash and cash equivalents were $4.9 million at September 30, 2002 and $1.1 million at December 31, 2001.

Net cash flow provided by operating activities was $10.4 million and $11.0 million for the nine months ended September 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 television program purchases during the nine months ending September 30, 2002.

Net cash flow used in investing activities was $6.5 million and $105.9 million for the nine months ended September 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 $0, $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 $3.5 million, $11.2 million and $14.0 million, respectively.

Net cash flow used in financing activities was $0.1 million for the nine months ended September 30, 2002, and net cash flow provided by financing activities was $105.4 million for the nine months ended September 30, 2001 and $95.0 million for the year ended December 31, 2001. The decrease in our net cash flow provided by financing activities is primarily attributable to the additional funds required in 2001 to acquire the selected assets of our radio and television properties in Houston, Texas.

We have certain cash obligations and other commercial commitments, which will impact our short and long term liquidity. As of September 30, 2002, such obligations and commitments were the senior credit facility, the notes, non-recourse debt of our subsidiaries, operating leases and agreements to purchase the selected assets of certain radio stations as follows:

			Payments due by Period from September 30, 2002
Contractual Obligations	Total		Less than 1 year		1-3 years		3-5 years		After 5 years
Long term debt	$	222,865,518	$	151,001	$	340,785	$	401,325	$	221,972,407
Operating leases		4,673,980		613,306		845,915		862,609		2,352,150
Asset purchases		32,850,000		32,850,000		—		—		—
Total contractual cash obligations	$	260,389,498	$	33,614,307	$	1,186,700	$	1,263,934	$	224,324,557

The above table does not include our agreement to purchase selected assets of KMXN-FM for approximately $35.0 million. We entered into that agreement in December 2002 and expect to complete the acquisition in the second quarter of 2003. The table also does not include any interest payments under our long term debt, our parent’s 9% subordinated notes 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, changes in interest rates related to borrowings under our senior credit facility, and changes in the fair value of our notes. 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. We currently do not hedge interest rate exposure and are not exposed to the impact of foreign currency fluctuations.

We are exposed to changes in interest rates on our variable rate senior credit facility. A hypothetical 10% increase in the interest rates applicable to the nine months ended September 30, 2002 would have increased interest expense by approximately $0.5 million. Conversely, a hypothetical 10% decrease in the interest rates applicable to the nine months ended September 30, 2002 would have decreased interest expense by approximately $0.5 million. At September 30, 2002, we believe that the carrying value of amounts payable under our senior credit facility approximates its fair value based upon current yields for debt issues of similar quality and terms.

The fair value of our fixed rate long-term debt is sensitive to changes in interest rates. Based upon a hypothetical 10% increase in the interest rate, assuming all other conditions affecting market risk remain constant, the market value of our fixed rate debt would have decreased approximately $8.9 million at September 30, 2002. Conversely, a hypothetical 10% decrease in the interest rate, assuming all other conditions affecting market risk remain constant, would have resulted in an increase in market value of approximately $9.7 million at September 30, 2002. Management does not foresee nor expect any significant change in our exposure to interest rate fluctuations or in how such exposure is managed in the future.

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.

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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 noncash charge of approximately $8.1 million to reduce the carrying value of certain of our broadcast licenses. In the third quarter of 2002, we recorded an additional $1.8 million noncash impairment write-down relating to one of our broadcast licenses, which resulted primarily from increased competition in that station’s market. In calculating the impairment charges, the fair value of our broadcast licenses was determined using the discounted cash flow approach. This approach requires the projection of future cash flows and the restatement of these cash flows into their present valuation equivalent through the use of a discount rate.

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 used the income and market valuation approaches to determine the “net value” of our parent. The income approach analyzes future revenues and discounts them to arrive at a current estimated fair value. The market approach uses recent sales and offering prices of similar properties to determine estimated fair value. 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 these 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.

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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

Market data and other statistical information included in this Business section are based on 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 Advertising (TVB). Although we believe that these sources are reliable, we have not independently verified the information and cannot guarantee its accuracy or completeness.

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 consists of six Spanish-language radio stations (five FM and one AM), two time-brokered AM stations and a full-power television station. We expect to add an additional Spanish-language FM radio station in the Los Angeles market in the second quarter of 2003, and an additional Spanish-language AM radio station in the Houston market by the end of the second quarter of 2003, both pursuant to definitive agreements we have already entered into. 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 operating income, before depreciation and amortization, 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, and our net income increased from a loss of $5.5 million to income of $1.8 million.

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.

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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 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 summer 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

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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. We grew net revenues at these facilities from $10.3 million in 1998 to $24.7 million in 2001. Similarly, we grew net revenues at our radio station, KBUE-FM/KBUA-FM, from $7.5 million in 1997 (the year we purchased KBUA-FM and began simulcasting KBUE-FM) to $18.1 million in 2001. This station is now among the top three rated Spanish-language radio stations in Los Angeles according to the Arbitron 2002 summer 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 KMXN-FM, Garden Grove, California.    On December 19, 2002, we entered into an agreement to purchase selected assets of radio station KMXN-FM, licensed in Garden Grove, California, for an aggregate purchase price of $35.0 million. At the same time, we entered into a time brokerage agreement to operate the station until we complete the purchase. We expect to complete the acquisition in the second quarter of 2003, subject to closing conditions specified in the asset purchase agreement.

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Acquisition of KQQK-FM, Houston, Texas and Pending Acquisition of KEYH-AM, Houston, Texas.    On October 11, 2002, we completed our acquisition of selected assets of KQQK-FM, licensed in Houston, Texas, for an aggregate purchase price of $24.7 million (including acquisition costs). The purchase was pursuant to an asset purchase agreement, dated as of April 5, 2002, with El Dorado, as amended on October 8, 2002. Pursuant to another asset purchase agreement dated April 5, 2002, with El Dorado, as amended on October 8, 2002, we have also agreed to acquire selected assets of radio station KEYH-AM, licensed in the Houston, Texas market. El Dorado has operated KEYH-AM under time brokerage agreements since 1995 and has exercised an option to purchase the radio station. Upon satisfaction of customary closing conditions specified in the asset purchase agreement, as amended, we will purchase KEYH-AM for a purchase price of approximately $5.7 million. We expect to complete this acquisition by the end of the first quarter of 2003. We began operating both KQQK-FM and KEYH-AM on May 20, 2002 under two time brokerage agreements, and have significantly changed the format, customer base, revenue stream and employee base of these stations.

Acquisition of KIOX-FM and KXGJ-FM, El Campo and Bay City, Texas.    On October 11, 2002, we also completed our acquisition of selected assets of KIOX-FM and KXGJ-FM, licensed to El Campo and Bay City, Texas, respectively, for an aggregate purchase price of $3.4 million (including acquisition costs).

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 summer survey, our Houston Spanish-language radio stations captured a combined 3.4 rating, a 48% increase over their combined 2.3 rating in the Arbitron 2001 summer survey. These ratings represent the average percentage of listeners in a given population listening to our radio station during a specified time period. For the nine months ended September 30, 2002, our Houston radio and television stations, including our time brokered stations, generated a combined $11.4 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/KMXN-FM(5)(6)			105.5/94.3/94.3	Norteña	2.9
KWIZ-FM			96.7	Sonidero, Cumbia	1.0
KHJ-AM			930	Ranchera	0.7
KVNR-AM(7)			1480	Time Brokered	—
Total					4.6	2
Houston	11	4
KTJM-FM/KJOJ-FM(8)			98.5/103.3	Norteña	2.7
KQQK-FM/KIOX-FM(9)(10)			107.9/96.9	Spanish Pop	2.6
KQUE-AM			1230	Ranchera	0.7
KEYH-AM/KXGJ-FM(10)(11)			850/101.7	Sonidero, Cumbia	0.5
KSEV-AM(7)			700	Time Brokered	1.8
KJOJ-AM(7)			880	Time Brokered	—
Total					8.3	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) Represents the average percentage of listeners in a given population listening to our radio station during a specified period of time. Source: Arbitron 2002 summer survey.

  (5) KBUA-FM and KMXN-FM simulcast the signal of KBUE-FM in the San Fernando Valley and Orange County, respectively.

  (6) We entered into an agreement to purchase selected assets of KMXN-FM on December 19, 2002. We expect to complete the acquisition in the second quarter of 2003, subject to certain closing conditions. At the same time, we entered into a time brokerage agreement to begin operating the station until we complete the purchase of assets. Under the agreement, we pay a monthly fee to broadcast our programming and receive all revenue from advertising time we sell.

  (7) Three of our stations, KVNR-AM, KSEV-AM and KJOJ-AM, are operated by third parties under time brokerage agreements. We receive a monthly fee from the third parties for the air time and the third parties receive revenues from their sale of advertising spots.

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

  (9) We completed our acquisition of selected assets of KQQK-FM on October 11, 2002. Prior to then, we had been operating this station under a local marketing agreement since May 20, 2002 and had changed the station’s format.

(10) On October 11, 2002, we completed our acquisition of selected assets of KIOX-FM and KXGJ-FM. KIOX-FM simulcasts the signal of KQQK-FM and KXGJ-FM simulcasts the signal of KEYH-AM.

(11) We have entered into an agreement to purchase selected assets of KEYH-AM. We expect to close the transaction before the end of the first quarter of 2003, subject to certain closing conditions. We have been operating KEYH-AM since May 20, 2002 under a local marketing agreement and have changed the station’s format.

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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.

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/KMXN-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/KIOX-FM (XO) plays contemporary, up-tempo, Spanish pop music. The target audience for this station is adult listeners aged 18 to 49.

• KEYH-AM/KXGJ-FM (Sonido) 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 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.

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Television.    We currently air fifteen 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 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 by the end of the the first quarter of 2003. 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 9:00 PM to 10:00 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 5:00 PM to 6:00 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 9:00 PM to 10:00 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.

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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;

• 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 September 30, 2002, we had approximately 354 employees, of which approximately 292 were full-time employees. We had approximately 153 full-time employees in television and approximately 139 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.

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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. These 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.

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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 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

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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 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

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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.

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, that shareholder, officer or director may violate the FCC’s rules if that 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.

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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 control and what types of media properties a party may commonly own in a market, and the effect that those 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 Satellite Home Viewer Improvement Act of 1999

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.

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The Satellite Home Viewer Improvement Act of 1999 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 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 may not 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 that 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 that 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 began broadcasting with a digital signal in November 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

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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 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 those 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	41
Key Non-Executive Employees
Eduardo Leon	Vice President—Programming	38
Andrew Mars	Corporate Vice President—Sales	47
Xavier Ortiz	Vice President—National Sales	35

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.

Composition of the Board of Directors

Our board consists of two directors, Jose Liberman and Lenard Liberman. According to our bylaws, the directors will be elected at each annual meeting of shareholders. Each director will hold office until the next annual meeting and until a successor has been qualified and elected. Any vacancies in our board will be filled by a majority vote of the remaining directors, even if less than quorum, or a sole remaining director. The elected person will serve the remainder of the vacant director’s term.

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

The following table describes the compensation we paid to our two executive officers during the fiscal year ended December 31, 2001:

Summary Compensation Table

	Annual Compensation
Name and Principal Position	Salary		Bonus
Jose Liberman	$	60,000	$	—
President
Lenard Liberman	$	215,500	$	—
Executive Vice President, Chief Financial Officer and Secretary

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. 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. The shareholder notes were payable on demand and accrued interest at the rate of 4.99% and 5.62% at December 31, 2001 and June 30, 2002, respectively.

Shareholder Loans

As of September 30, 2002, we had outstanding loans, including accrued interest, aggregating $226,022 and $2,204,035 to Jose and Lenard Liberman, respectively. For Jose Liberman, we have made loans of $146,590, $4,432 and $75,000 on December 20, 2001, July 14, 2002 and July 29, 2002, respectively. For Lenard Liberman, we have made loans of $243,095, $32,000 and $1,916,563 on December 20, 2001, June 14, 2002 and July 9, 2002, respectively.

Each of these loans bears interest at the alternative federal short-term rate published by the Internal Revenue Service for the month in which the advance was made, which rate was 2.48%, 2.91% and 2.84% for December 2001, June 2002 and July 2002, respectively. Each loan matures on the seventh anniversary of the date on which the loan was made. Since the Sarbanes-Oxley Act of 2002 now governs us, we may no longer make any personal loans to Jose or Lenard Liberman and the maturity dates of the existing loans may not be extended.

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 that 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 that 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 that 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, which we believe approximates the market rate for commissions paid to national sales representatives. We paid approximately $589,000 to SMRT in 2001 for services provided to us and have paid approximately $927,000 to SMRT during the nine months ended September 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 that period with those 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 station KEYH-AM 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 will have the right to elect the smallest number of directors necessary to take control of our parent’s board of directors until the 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. As described below, the warrants have a put feature, which would allow the warrant holders to require our parent to repurchase the warrants at fair market value, and a call feature, which would allow our parent to repurchase the warrants at its option upon certain events. If either of these options are exercised, it could require a significant amount of cash from us to repurchase the warrants, since our parent is a holding company that has no operations or assets, other than its investment in us, and is dependent on us for cash flow. However, we have no legal obligation to provide that funding to our parent. The initial exercise price of the warrants is $.01 per share. 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.

Put Right.    Subject to the subordination agreement with our senior lenders and the holders of the notes, the warrant holders will 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.

Call Right.    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 require 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 to repurchase the warrants. In that 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.

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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 September 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 approximately $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.

As of September 30, 2002, LBI Media and the Guarantors have total Senior Debt of approximately $72.9 million. The indenture permits LBI Media and the Guarantors to incur additional Senior Debt. Payments on the notes and under the guarantees are subordinated to the payment of Senior Debt. See “—Subordination.”

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 and 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. 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 the 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 that sale or disposition or the Person formed by or surviving that 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 that 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 that 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 that 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.

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 on Senior Debt is declared fraudulent or preferential, set aside or required to be paid to any receiver, trustee in bankruptcy, liquidating trustee, agent or other similar Person under bankruptcy, insolvency, receivership, fraudulent conveyance or similar law, the payment may be recovered by, or paid over to, the receiver, trustee in bankruptcy, liquidating trustee, agent or other similar Person. In that event, the Senior Debt or part thereof originally intended to be satisfied by the payment will be deemed to be reinstated and outstanding as if that 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 that 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 that default is cured or waived; and

(2) in the case of a nonpayment default, upon the earlier of (i) the date on which that 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 that 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, those 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.”

The rights of holders of Senior Debt to enforce these subordination provisions will not 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, do any one or more of the following:

(1) 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;

(2) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing Senior Debt;

(3) release any Person liable in any manner for the payment or collection of Senior Debt; and

(4) 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 that 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 that notice is mailed. 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 that 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 those notes. 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. 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 that 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 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.

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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 that 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 that Restricted Subsidiary from further liability; and

(b) any securities, notes or other obligations received by LBI Media or that Restricted Subsidiary from the transferee converted by LBI Media or that 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 that 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 the Restricted Subsidiary receives consideration at the time of that 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 that 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 that Restricted Subsidiary in connection with any Asset Sale permitted to be consummated under this paragraph will constitute Net Proceeds subject to the provisions of the next paragraph.

Within 365 days after the receipt of any Net Proceeds from an Asset Sale, LBI Media or that 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;

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(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 other pari passu Indebtedness that may be purchased with 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 that 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 that 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 that 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 this prohibition. If LBI Media does not obtain a consent or repay the borrowings, LBI Media will remain prohibited from purchasing notes. In that 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 the Senior Debt. In that circumstance, the subordination provisions in the indenture would likely restrict payments to the Holders of notes.

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.

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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 that Indebtedness); or

(4) make any Restricted Investment (all 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 that Restricted Payment:

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

(2) LBI Media would, at the time of that Restricted Payment and after giving pro forma effect thereto as if that 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 the covenant described below under the caption “—Incurrence of Indebtedness and Issuance of Preferred Stock;” and

(3) that 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

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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 the Consolidated Net Income will be a deficit, minus 100% of that 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 the 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 those 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 those dividends or distributions were not otherwise included in Consolidated Net Income for that period and to the extent that those dividends or distributions do not represent payments in respect of taxes attributable to the activities of that 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 those net cash proceeds that are utilized for that 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;

(4) the declaration and payment of any dividend by a Restricted Subsidiary of LBI Media to the holders of that 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;

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(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 those 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 those 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 will 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 these loans made in connection with any Permitted Holdings Tax Distribution or Permitted Shareholder Tax Distribution will 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 will not be permitted 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 will not be permitted 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 the 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.

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 the

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Indebtedness or the issuance of the Disqualified Stock or preferred stock, as the case may be, after giving pro forma effect to that incurrence or issuance as of that 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 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 the 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 those 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 that Indebtedness, the 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 issuance or transfer of Equity Interests that results in that 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 that Indebtedness by LBI Media or that 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 will have a notional amount no greater than the payments due with respect to the Indebtedness being hedged thereby, or

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(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 these letters of credit or the incurrence of this Indebtedness, these obligations are reimbursed within 30 days following the 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) the Acquisition Debt is incurred within 365 days after the date on which the related definitive acquisition agreement was entered into by LBI Media or the Restricted Subsidiary, (x) the aggregate principal amount of the 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 the Restricted Subsidiary, (y) after giving pro forma effect to the acquisition described in the Incurrence Notice, LBI Media or the Restricted Subsidiary could have incurred the Acquisition Debt under the indenture, including compliance with the first paragraph of this covenant, as of the date upon which LBI Media delivers the Incurrence Notice to the trustee and (z) the Acquisition Debt is utilized solely to finance the acquisition described in the 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 that 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 the Acquisition Debt;

(12) the incurrence by LBI Media’s Unrestricted Subsidiaries of Non-Recourse Debt, provided, however, that if that Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, that 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 that Indebtedness is extinguished within five business days after notice thereof;

(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 that Indebtedness on the date of its

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incurrence, or later reclassify all or a portion of that Indebtedness, in any manner that complies with this covenant. Indebtedness under the Credit Facility, including Guarantees of that Indebtedness, on the date on which notes are first issued and authenticated under the indenture will be deemed to have been incurred on that 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 that Guarantor and senior in any respect in right of payment to that 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 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 the 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 that acquisition (except to the extent that

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Indebtedness or Capital Stock was incurred in connection with or in contemplation of that 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, that 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 that 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 those 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 those provisions after the date of the indenture will 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 that Restricted Subsidiary pending the closing of that sale or disposition; provided, that the 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; 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 that consolidation or merger (if other than LBI Media) or to which that 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;

(2) the Person formed by or surviving that consolidation or merger (if other than LBI Media) or the Person to which that 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 that transaction, no Default or Event of Default exists; and

(4) LBI Media or the Person formed by or surviving that consolidation or merger (if other than LBI Media), or to which that sale, assignment, transfer, conveyance or other disposition has been made (a) would, on the date of the transaction, after giving pro forma effect thereto and any related financing

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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:

(1) any sale, assignment, transfer, conveyance or other disposition of assets between or among LBI Media and any of its Wholly Owned Restricted Subsidiaries,

(2) any Restricted Subsidiary from consolidating with, merging into or transferring all or part of its assets to LBI Media or any Restricted Subsidiary, or

(3) 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.

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 the consolidation or into which LBI Media is merged or to which that conveyance, lease or transfer is made will 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 that surviving Person had been named as such.

Transactions with Affiliates

LBI Media will not, and will not permit any of its Restricted Subsidiaries to (i) make any payment, (ii) sell, lease, transfer or otherwise dispose of any of its properties or assets to, (iii) purchase any property or assets from, or (iv) 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 the 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 the Affiliate Transaction complies with this covenant and that the 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, will 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 that 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.

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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, that 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.”

Additional Subsidiary Guarantees

If LBI Media or any of its Subsidiaries acquires or creates another Domestic Subsidiary after the date of the indenture 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. The prior sentence does not apply to Subsidiaries that have been properly designated as Unrestricted Subsidiaries in accordance with the indenture for so long as they continue to constitute Unrestricted Subsidiaries.

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

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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 that transfer, conveyance, sale, lease or other disposition or as a result of the issuance described in the paragraph below, the Restricted Subsidiary no longer constitutes a Subsidiary; and

(2) the cash Net Proceeds from that 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 the extent it 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 the consideration 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 the 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 these 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

(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 these 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

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Unrestricted Subsidiaries of LBI Media. LBI Media will be deemed to have satisfied these 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 these reports, documents and information separately under the applicable rules and regulations of the SEC 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 this information available to securities analysts and prospective investors upon request. LBI Media and the Subsidiary Guarantors have also 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 that 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 that Indebtedness at the final stated maturity thereof (giving effect to any applicable grace periods and any extensions thereof) (a “Payment Default”); or

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

and, in each case, the principal amount of that 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;

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(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 the incurrence and after giving pro forma effect to the incurrence as of that 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 to cure the default within 30 days after notice from the trustee or Holders of at least 25% in aggregate principal amount of the outstanding notes;

(9) except as permitted by the indenture, any Subsidiary Guarantee of a Significant Subsidiary is held in any judicial proceeding to be unenforceable or invalid or ceases for any reason to be in full force and effect, or any Guarantor which is a Significant Subsidiary denies or disaffirms 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 the Insignificant Subsidiaries are held in any judicial proceeding to be unenforceable or invalid or cease for any reason to be in full force and effect or the Insignificant Subsidiaries deny or disaffirm their obligations under their Subsidiary Guarantees (other than in accordance with the terms of that 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 will 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.

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

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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 the 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 these obligations. 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 the notes when the 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. If 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.

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.

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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 the Holders of the outstanding notes will not recognize income, gain or loss for federal income tax purposes as a result of the 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 the 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 the 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 the Covenant Defeasance had not occurred;

(4) no Default or Event of Default has occurred and is continuing on the date of the deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to the deposit);

(5) the 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 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;

(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”);

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(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 that Senior Debt consent to that 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 the 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 the amendment. However, the failure to give 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 the 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 these 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 that 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 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 that other Person is merged with or into or became a Subsidiary of the specified Person, whether or not the Indebtedness is incurred in connection with, or in contemplation of, that other Person merging with or into, or becoming a Subsidiary of, the specified Person; and

(2) Indebtedness secured by a Lien encumbering any asset acquired by the 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 that 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 that 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 includes 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 will 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 the 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), that “person” will be deemed to have beneficial ownership of all securities that the “person” has the right to acquire by conversion or exercise of other securities, whether that 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 that 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 the 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, that 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 includes 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” means 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 that 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 that Person or any of the Restricted Subsidiaries in connection with (a) an Asset Sale, or (b) the disposition of any securities by that Person or any of the Restricted Subsidiaries or the extinguishment of any Indebtedness of that Person or any of the Restricted Subsidiaries, to the extent the losses were deducted in computing the Consolidated Net Income; plus

(2) provision for taxes based on income or profits of that Person and the Restricted Subsidiaries for that period (and to the extent not included in the foregoing, Permitted Shareholder Tax Distributions and Permitted Holdings Tax Distributions), to the extent that the provision for taxes, Permitted Shareholder Tax Distributions or Permitted Holdings Tax Distributions were deducted in computing the Consolidated Net Income; plus

(3) consolidated interest expense of that Person and the Restricted Subsidiaries for that period, whether paid or accrued and whether or not capitalized (including, without limitation, amortization of debt

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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 the expense was deducted in computing the 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 of those non-cash expenses to the extent that it represents amortization of a prepaid cash expense that was paid in a prior period) of that Person and its Restricted Subsidiaries for that period, to the extent that the depreciation, amortization, impairment charges and other non-cash expenses were deducted in computing the Consolidated Net Income; plus

(5) any extraordinary or non-recurring expenses and charges of that Person and the Restricted Subsidiaries for that period, including, without limitation, transaction costs in respect of acquisitions, to the extent that the expenses and charges were deducted in computing the Consolidated Net Income; minus

(6) non-cash items increasing Consolidated Net Income for that 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 that 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 that 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 the acquisition will be excluded; and

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(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, restated, 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 the 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 those lenders or to special purpose entities formed to borrow from those lenders against the 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 the 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 that Capital Stock upon the occurrence of a Change of Control or an Asset Sale will not constitute Disqualified Stock if the terms of that Capital Stock provide that LBI Media may not repurchase or redeem any such Capital Stock pursuant to those provisions unless the 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) will 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.

“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.

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“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 those 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 those 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 the 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, that 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 that 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 that 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 that 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 the agreement or arrangement giving rise to the obligation that would be payable by that 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 that 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 does 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 will not be Indebtedness until that time as those 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 that 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 that sale or disposition, that Person is no longer a Subsidiary of LBI Media, LBI Media will be deemed to have made an Investment on the date of that sale or disposition equal to the fair market value of LBI Media’s Investments in that 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 the Subsidiary in that third Person in an amount equal to the fair market value of the Investments held by the acquired Person in that 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 that 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 the calculation is made will be determined on a pro forma basis as if the Indebtedness and preferred stock giving rise to the need to perform the calculation had been incurred and issued and the proceeds therefrom had been applied, and all other transactions in respect of which that 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 will be calculated on a pro forma basis after giving effect to (i) the incurrence of the Indebtedness of that Person and the Restricted Subsidiaries and the issuance of the preferred stock of those Subsidiaries (and the application of the proceeds therefrom) giving rise to the need to make the 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 the period pursuant to clause (11) of the definition of Permitted Debt; provided, however, that Indebtedness does 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 the Incurrence Notice has been withdrawn or after the passage of 365 days following the giving of the Incurrence Notice if and to the extent that Acquisition Debt has not then been incurred), as if the 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 that computation, the amount of Indebtedness under any revolving credit facility will be computed based upon the average balance of the Indebtedness at the end of each month during that 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 the incurrence or issuance which is the subject of an Incurrence Notice delivered to the trustee during the period pursuant to clause (11) of the definition of Permitted Debt subject to the proviso in clause (i) above), as if the acquisition (including the incurrence, assumption or liability for that Indebtedness and the issuance of the 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 that 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 those 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

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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 will be deemed to have accrued at a fixed rate per annum equal to the rate of interest on that Indebtedness as in effect on the date of determination and (b) notwithstanding (a) above, interest determined on a fluctuating basis, to the extent that interest is covered by Hedging Obligations, will be deemed to accrue at the rate per annum resulting after giving effect to the operation of those 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 that 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 that 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 that gain (but not loss), realized in connection with: (a) any Asset Sale; or (b) the disposition of any securities by that Person or any of its Restricted Subsidiaries or the extinguishment of any Indebtedness of that 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 the 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 that 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 the 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 will be net of (a) all reasonable costs (as determined by LBI Media in its reasonable discretion) directly related to that 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 the Relocation under leases with respect to which it is the lessee immediately prior to the 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 the 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 that Relocation, (6) costs incurred in seeking governmental consents and permits required as part of that Relocation and (7) costs incurred in seeking FCC consent to move the replaced station’s digital operations to the site of that 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) will be based on good faith estimates of LBI Media on the date of the consummation of any Relocation which were reasonable when made but those estimates will 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 that 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 will 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 the calculation is made will 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 the calculation had been incurred and issued and the proceeds therefrom had been applied, and all other transactions in respect of which that Specified Parent Debt or Indebtedness is being incurred or preferred stock is being issued had occurred, on the first day of the Parent Reference Period. In addition to the foregoing, for purposes of this definition, the Parent Debt Ratio will 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 those Restricted Subsidiaries (and the application of the proceeds therefrom) giving rise to the need to make the 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 the incurrence or issuance which is the subject of an Incurrence Notice delivered to the trustee during the period pursuant to clause (11) of the definition of Permitted Debt; provided, however, that Indebtedness does 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 the Incurrence Notice has been withdrawn or after the passage of 365 days following the giving of that Incurrence Notice if and to the extent the Acquisition Debt has not then been incurred), as if the 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 the computation, the amount of Indebtedness under any revolving credit facility will be computed based upon the average balance of the Indebtedness at the end of each month during that 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 the incurrence or issuance which is the subject of an Incurrence Notice delivered to the trustee during the period pursuant to clause (11) of the definition of Permitted Debt subject to the proviso in clause (i) above), as if the acquisition (including the incurrence, assumption or liability for the 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 the 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 the 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 will be deemed to have accrued at a fixed rate per annum equal to the rate of interest on that Indebtedness as in effect on the date of determination and (b) notwithstanding (a) above, interest determined on a fluctuating basis, to the extent the interest is covered by Hedging Obligations, will 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 that 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 that 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 that year exceeds the aggregate Permitted Shareholder Tax Distributions paid by LBI Media for that year pursuant to the covenant entitled “Restricted Payments,” the excess will 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 that year pursuant to the covenant entitled “Restricted Payments” exceed the Dividend Limitation, the Permitted Dividend Amount will be zero and the excess will 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) is determined to be invalid, or is revoked or terminated, or the QSSS Election ceases to be in effect for LBI Media, the Permitted Dividend Amount for LBI Media will be zero from and after the date of the 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 that 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 that year will be increased by the amount of those 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 that Investment:

(a) the Person becomes a Restricted Subsidiary of LBI Media; or

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(b) the 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 will 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 the 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 the officers or employees or Parent in connection with the acquisition of the 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 the Person is merged with or into or consolidated with LBI Media or any Restricted Subsidiary; provided that the Liens were in existence prior to the contemplation of the 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 the Liens were in existence prior to the contemplation of the 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 that 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 the 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) the 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, the 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) the 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 the distributions or loans may 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 that 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 will 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 will 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 that year will be increased by the amount of those 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 those 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 that broadcast station in order to accommodate the spectrum needs of the 700 MHz Holder, including the prevention of interference with the 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 the 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 the 700 MHz Holder’s operations, with or without any consideration; it being understood that without limiting the generality of the foregoing, the term “Relocation” includes 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 that 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 that Indebtedness will be deemed not to have been incurred in violation of the indenture for purposes of this clause (4) if that Indebtedness consists of Indebtedness under any Credit Facility and holders of that Indebtedness or their agent or representative (i) had no actual knowledge at the time of the incurrence that the incurrence of that Indebtedness violated the indenture and (ii) have received an officers’ certificate to the effect that the incurrence of that Indebtedness does not violate the provisions of the indenture (but nothing in this clause (4) will 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 that 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 that 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 that 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 that Person or a Subsidiary of that 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 the 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 the 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 that Person’s financial condition or to cause that 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 the designation and an officers’ certificate certifying that the 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 that Subsidiary will be deemed to be incurred by a Restricted Subsidiary of LBI Media as of that date. If the Indebtedness is not permitted to be incurred as of that 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 that covenant. The Board of Directors of LBI Media may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that the designation will be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of LBI Media of any outstanding Indebtedness of that Unrestricted Subsidiary and the designation will only be permitted if (1) that 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 that 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 the designation.

“Voting Stock” of any Person as of any date means the Capital Stock of that Person that is at the time entitled to vote in the election of the Board of Directors of that 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 that payment; by

(2) the then outstanding principal amount of that Indebtedness.

“Wholly Owned Restricted Subsidiary” of any specified Person means a Restricted Subsidiary of that 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 that Person or by one or more Wholly Owned Restricted Subsidiaries of that 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 the 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 that system. Investors in the Regulation S Global Notes must initially hold their interests therein through Euroclear or Clearstream, if they are participants in those systems, or indirectly through organizations that are participants in those 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 those 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 those 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 those interests to Persons that do not participate in the DTC system, or otherwise take actions in respect of those interests, may be affected by the lack of a physical certificate evidencing those 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 that 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 that system in accordance with the rules and procedures and within the established deadlines (Brussels time) of that 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 that portion of the aggregate principal amount of the notes as to which the 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 those 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 those procedures, and may discontinue those 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 those 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) the 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 that 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 that 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 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 these 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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MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS

The following is a discussion 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 discussion 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 those notes as capital assets within the meaning of Section 1221 of the Code (“Holders”). This discussion does not purport to deal with all aspects of U.S. federal income taxation that might be relevant to particular Holders in light of their 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 discussion does not address U.S. federal alternative minimum tax consequences or consequences under the tax laws of any state, local or foreign jurisdiction. This discussion 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 discussion, and the IRS may not agree with these statements and conclusions.

WE URGE YOU TO CONSULT YOUR 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, we intend to take the position that stated interest on the notes is qualified stated interest. However, the IRS may 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

In the opinion of O’Melveny & Myers LLP, our counsel, the exchange of old notes for exchange notes in the Exchange Offer will not constitute a taxable event for U.S. Holders. An opinion of tax counsel is not binding on the IRS or the courts and the IRS or a court may not agree with our counsel’s opinion. The remainder of this discussion assumes the exchange of old notes for exchange notes in the exchange offer will not constitute a taxable event for all federal income tax purposes. 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.

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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. 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

In the opinion of O’Melveny & Myers LLP, our counsel, the exchange of old notes for exchange notes in the Exchange Offer will not constitute a taxable event for a Non-U.S. Holder. An opinion of tax counsel is not binding on the IRS or the courts and the IRS or a court may not agree with our counsel’s opinion. The remainder of this discussion assumes the exchange of old notes for exchange notes in the exchange offer will not constitute a taxable event for all federal income tax purposes.

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

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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 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.

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PLAN OF DISTRIBUTION

Each broker-dealer that acquired old notes for its own account as a result of market-making activities or other trading activities and 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 that 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. Broker-dealers who acquired old notes directly from us and not as a result of market-making or other trading activities may not use this prospectus in connection with the resale of the exchange notes. 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 (including any broker-dealers) 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) the holder is entitled under applicable provincial securities laws to exchange those notes without the benefit of a prospectus qualified under those 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.

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 these 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 these 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.

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 this 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 these reports and other information filed by us.

123

INDEX TO FINANCIAL STATEMENTS

	Page
Report of Independent Auditors	F-2
Consolidated Balance Sheets as of December 31, 2000 and 2001 and September 30, 2002 (unaudited)	F-3
Consolidated Statements of Operations for the Years Ended December 31, 1999, 2000 and 2001 and the Nine Months Ended September 30, 2001 and 2002 (unaudited)	F-4
Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 1999, 2000 and 2001 and the Nine Months Ended September 30, 2002 (unaudited)	F-5
Consolidated Statement of Cash Flows for the Years Ended December 31, 1999, 2000 and 2001 and the Nine Months Ended September 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,						September 30, 2002
	2000			2001
							(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	485,555		$	1,131,349		$	4,856,472
Short-term investments		220,356			332,810			119,900
Accounts receivable (less allowance for doubtful accounts of $211,536 in 2000, $161,030 in 2001 and $136,873 in 2002)		5,416,162			7,147,148			9,102,911
Current portion of program rights, net		827,336			895,165			625,321
Amounts due from related parties		752,639			1,208,818			1,139,105
Prepaid expenses and other current assets		524,647			1,304,395			2,518,463
Total current assets		8,226,695			12,019,685			18,362,172
Property and equipment, net		20,881,564			46,817,209			46,138,858
Program rights, excluding current portion		2,041,699			1,659,560			2,848,689
Notes receivable from related parties		—			—			2,430,057
Deferred financing costs, net		1,870,008			6,609,083			3,968,439
Broadcast licenses, net		89,796,784			181,293,995			171,440,223
Acquisition costs		704,606			—			1,154,058
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		$	246,499,996
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable and accrued expenses	$	1,907,029		$	1,773,911		$	1,345,676
Accrued interest		691,364			2,347,376			4,372,192
Program rights payable		56,187			—			—
Amounts due to related parties		115,078			99,872			152,515
Notes payable to related parties		3,163,836			1,861,607			—
Current portion of long-term debt		9,362,221			10,292,061			151,001
Total current liabilities		15,295,715			16,374,827			6,021,384
Long-term debt, excluding current portion		64,433,835			206,614,156			222,714,517
Deferred compensation		1,240,000			2,638,000			5,564,000
Deferred state income taxes		100,000			232,716			253,516
Other liabilities		—			—			63,397
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			22,657,667
Retained earnings (deficit)		14,197,520			(318,396	)		(10,765,966	)
Accumulated other comprehensive income (loss)		(71,680	)		40,794			(8,520	)
Total stockholders’ equity		59,175,840			22,539,833			11,883,182
Total liabilities and stockholders’ equity	$	140,245,390		$	248,399,532		$	246,499,996

See accompanying notes.

F-3

LBI MEDIA, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

	Year Ended December 31,									Nine Months Ended September 30,
	1999			2000			2001			2001			2002
										(unaudited)
Revenues	$	39,923,496		$	56,128,789		$	66,530,464		$	49,794,233		$	58,413,543
Less agency commissions		3,505,797			5,576,650			6,873,360			5,146,003			6,472,573
Net revenues		36,417,699			50,552,139			59,657,104			44,648,230			51,940,970
Operating expenses:
Program and technical, exclusive of noncash employee compensation of $94,000 and $216,000 for the years ended December 31, 2000 and 2001, respectively, and $178,000 and $572,000 for the nine months ended September 30, 2001 and 2002, respectively, and depreciation and amortization shown below		5,548,927			6,387,961			8,623,718			6,002,938			7,385,091
Promotional, exclusive of depreciation and amortization shown below		1,572,235			2,476,827			2,526,973			1,219,819			1,206,749
Selling, general and administrative, exclusive of noncash employee compensation of $1,146,000 and $1,182,000 for the years ended December 31, 2000 and 2001, respectively, and $890,000 and $2,354,000 for the nine months ended September 30, 2001 and 2002, respectively, and depreciation and amortization shown below		10,618,185			13,685,002			15,592,732			11,354,835			15,104,154
Noncash employee compensation		—			1,240,000			1,398,000			1,068,000			2,926,000
Depreciation		1,386,402			1,674,515			2,347,165			1,564,919			2,339,089
Amortization		3,048,491			2,962,799			6,326,025			4,470,755			—
Impairment of broadcast license		—			—			—			—			1,750,000
Total operating expenses		22,174,240			28,427,104			36,814,613			25,681,266			30,711,083
Operating income		14,243,459			22,125,035			22,842,491			18,966,964			21,229,887
Interest expense		(6,631,681	)		(6,837,540	)		(21,446,072	)		(16,263,271	)		(23,248,223	)
Interest and other income		170,728			240,238			473,634			430,271			96,135
Loss on sale of property and equipment		—			—			—			—			(388,169	)
Income (loss) before income taxes and cumulative effect of accounting change		7,782,506			15,527,733			1,870,053			3,133,964			(2,310,370	)
Provision for income taxes		6,400			74,274			80,583			90,968			31,200
Income (loss) before cumulative effect of accounting change		7,776,106			15,453,459			1,789,470			3,042,996			(2,341,570	)
Cumulative effect of accounting change		—			—			—			—			(8,106,000	)
Net income (loss)	$	7,776,106		$	15,453,459		$	1,789,470		$	3,042,996		$	(10,447,570	)

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)	—		—		—			(10,447,570	)		—			(10,447,570	)
Unrealized gain on investment in marketable securities (unaudited)	—		—		—			—			3,662			3,662
Adjustment to unrealized gain due to sale of investment in marketable securities (unaudited)	—		—		—			—			(52,976	)		(52,976	)
Comprehensive loss (unaudited)	—		—		—			—			—			(10,496,884	)
Distributions to Parent	—		—		(159,767	)		—			—			(159,767	)
Balances at September 30, 2002 (unaudited)	100	$	1	$	22,657,667		$	(10,765,966	)	$	(8,520	)	$	11,883,182

See accompanying notes.

F-5

LBI MEDIA, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year Ended December 31,									Nine Months Ended September 30,
	1999			2000			2001			2001			2002
										(unaudited)
Operating activities
Net income (loss)	$	7,776,106		$	15,453,459		$	1,789,470		$	3,042,996		$	(10,447,570	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Cumulative effect of accounting change		—			—			—			—			8,106,000
Depreciation and amortization		4,434,893			4,637,314			8,673,190			6,035,674			2,339,089
Impairment of broadcast license		—			—			—			—			1,750,000
Amortization of deferred financing costs		304,038			304,038			3,550,729			3,420,390			6,716,489
Noncash employee compensation		—			1,240,000			1,398,000			1,068,000			2,926,000
Gain on sale of investments		—			—			—			—			(52,976	)
Loss on sale of property and equipment		6,262			—			—			—			388,169
Provision for doubtful accounts		179,443			96,000			170,221			112,966			229,779
Changes in operating assets and liabilities:
Accounts receivable		(366,322	)		(2,141,818	)		(1,901,207	)		(2,059,420	)		(2,185,542	)
Program rights		(769,487	)		(101,969	)		314,310			431,908			(919,285	)
Amounts due from related parties		(703,753	)		487,114			(456,179	)		(64,804	)		(431,404	)
Prepaid expenses and other current assets		347,733			59,634			(779,748	)		(604,962	)		225,637
Accounts payable and accrued expenses		641,899			446,249			(133,118	)		153,099			(428,235	)
Accrued interest		(6,154	)		60,921			1,656,012			(662,643	)		2,024,816
Program rights payable		(117,058	)		(208,938	)		(56,187	)		(56,187	)		—
Amounts due to related parties		16,071			61,183			(15,206	)		(970	)		52,643
Deferred state income tax payable		—			—			132,716			143,103			20,800
Other assets and liabilities		—			—			—			—			51,020
Net cash provided by operating activities		11,743,671			20,393,187			14,343,003			10,959,150			10,365,430
Investing activities
Purchase of property and equipment		(4,668,343	)		(4,044,226	)		(13,953,528	)		(11,165,597	)		(3,488,632	)
Acquisition costs		—			(704,606	)		—			—			(1,154,058	)
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	)		(88,493,902	)		(2,228	)
Amounts deposited in escrow for the acquisition of broadcast licenses		—			(8,500,000	)		—			—			(157,500	)
Loan to related party		—			—			—			—			(1,916,563	)
Proceeds from sale of investments		—			—			—			—			216,592
Net cash used in investing activities		(9,692,965	)		(13,506,992	)		(108,677,386	)		(105,871,571	)		(6,502,389	)
Financing activities
Proceeds from issuance of long-term debt, net of financing costs		7,250,000			4,500,000			216,845,858			216,731,808			224,641,223
Payment on notes payable to related parties		—			—			(2,000,000	)		(2,000,000	)		(1,861,607	)
Payments on long-term debt		(5,646,002	)		(5,807,942	)		(81,327,730	)		(70,794,636	)		(222,757,767	)
Distributions to Parent		(263,710	)		(9,709,223	)		(68,537,951	)		(68,537,951	)		(159,767	)
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			105,399,221			(137,918	)
Net increase (decrease) in cash and cash equivalents		3,390,994			(4,130,970	)		645,794			10,486,800			3,725,123
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		$	10,972,355		$	4,856,472
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest	$	6,208,769		$	6,162,045		$	11,876,768		$	9,066,940		$	9,880,361
Income taxes	$	10,400		$	10,400		$	10,400		$	10,400		$	10,400

See accompanying notes.

F-6

LBI MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2001

(Information Pertaining to the Nine Months Ended September 30, 2001 and 2002 is Unaudited)

1.    Summary of Significant Accounting Policies

Description of Business and Basis of Presentation

LBI Media, Inc. was incorporated in California as LBI Holdings II and was a wholly owned subsidiary of LBI Intermediate Holdings, Inc., which was a wholly-owned subsidiary of LBI Holdings I (Parent). LBI Intermediate Holdings, Inc. and LBI Holdings II were 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 and KQQK-FM in Houston, Texas, KSEV-AM in Tomball, Texas, KJOJ-AM in Conroe, Texas, KJOJ-FM in Freeport, Texas, KTJM-FM in Port Arthur, Texas, KIOX-FM in El Campo, Texas and KXGJ-FM in Bay City, 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 (see Note 6) are not included in the accompanying consolidated financial statements.

Interim Financial Data

The unaudited consolidated financial statements of the Company for the nine months ended September 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 nine months ended September 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)

December 31, 2001

(Information Pertaining to the Nine Months Ended September 30, 2001 and 2002 is Unaudited)

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. A portion 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. The fair market value of the assets is determined by using current broadcasting industry equipment prices, solicited current market data from dealers of used broadcast equipment and used equipment price lists, catalogs and listings in trade magazines and publications. No adjustments to the carrying amounts of property and equipment have been made during 1999, 2000 and 2001.

F-8

LBI MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2001

(Information Pertaining to the Nine Months Ended September 30, 2001 and 2002 is Unaudited)

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 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 at least annually thereafter. Other intangible assets will continue to be amortized over their estimated useful lives. The Company believes its broadcast licenses have indefinite useful lives given that they are expected to indefinitely contribute to the future cash flows of the Company and that they may be continually renewed without substantial cost to the Company.

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, which resulted primarily from the effects of increased competition in the stations’ respective markets. Such charge is reflected as a cumulative effect of an accounting change in the accompanying consolidated statement of operations for the nine months ended September 30, 2002. In the third quarter of 2002, the Company recorded an additional $1.8 million noncash impairment write-down relating to one of its broadcast licenses. In calculating the impairment charges, the fair value of the Company’s broadcast licenses was determined using the discounted cash flow approach. This approach requires the projection of future cash flows and the restatement of these cash flows into their present valuation equivalent through the use of a discount rate.

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 nine months ended September 30, 2001 and 2002 is as follows:

	Year Ended December 31,						Nine Months Ended September 30,
	1999		2000		2001		2001		2002
Reported net income (loss)	$	7,776,106	$	15,453,459	$	1,789,470	$	3,042,996	$	(10,447,570	)
Add back: Broadcast license amortization		2,616,491		2,530,799		6,218,025		4,362,755		—
Adjusted net income (loss)	$	10,392,597	$	17,984,258	$	8,007,495	$	7,405,751	$	(10,447,570	)

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 approximately $11,477,000 and $17,696,000 at December 31, 2000 and 2001, respectively.

F-9

LBI MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2001

(Information Pertaining to the Nine Months Ended September 30, 2001 and 2002 is Unaudited)

Barter Transactions

Included in the consolidated statements of operations are nonmonetary transactions arising from the trading of advertising time for merchandise and services. Barter revenues and expenses are recorded at the fair market value of the goods or services received when the commercial is broadcast. The Company recognizes barter revenues when the commercial is broadcast. Barter expenses are recorded at the same time as barter revenue, which approximates the date the expenses were incurred. 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.

In connection with the refinancing of the Company’s credit facilities on July 9, 2002 (see Note 12), the Company wrote off to interest expense unamortized deferred financing costs of approximately $6,086,000.

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 $602,000 and $394,000 for the nine months ended September 30, 2001 and 2002, respectively.

F-10

LBI MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2001

(Information Pertaining to the Nine Months Ended September 30, 2001 and 2002 is Unaudited)

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 nine months ended September 30, 2001 and 2002, comprehensive income (loss) amounted to $3,090,680 and $(10,496,884) 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.

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

F-11

LBI MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2001

(Information Pertaining to the Nine Months Ended September 30, 2001 and 2002 is Unaudited)

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,						September 30, 2002
	2000			2001
							(Unaudited)
Land	$	1,773,014		$	14,241,494		$	14,073,994
Building and building improvements		12,193,914			15,682,344			13,928,424
Antennae, towers and transmitting equipment		5,263,322			10,588,453			15,053,770
Studio and production equipment		3,655,362			6,265,205			6,919,498
Record and tape libraries		131,782			100,560			168,554
Computer equipment and software		755,436			840,494			1,032,682
Office furnishings and equipment		1,015,368			929,068			1,002,357
Automobiles		280,776			117,672			315,960
Construction in progress		1,621,862			5,106,654			2,572,608
		26,690,836			53,871,944			55,067,847
Less accumulated depreciation and amortization		(5,809,272	)		(7,054,735	)		(8,928,989	)
	$	20,881,564		$	46,817,209		$	46,138,858

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 September 30, 2002, construction in progress related to the development and construction of building improvements.

4.    Easement Property

As part of the agreement to purchase the assets of KHJ-AM 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.

F-12

LBI MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2001

(Information Pertaining to the Nine Months Ended September 30, 2001 and 2002 is Unaudited)

5.    Notes Payable to Related Parties

Notes payable to related parties, totaling approximately $3,164,000, $1,862,000 and $0 at December 31, 2000 and 2001 and September 30, 2002, respectively, bear interest at the applicable federal rate (5.89% and 4.99% at December 31, 2000 and 2001, respectively) and are payable on demand. The notes are subordinate to the New Revolver, New Term Loans, and New Senior Notes. These notes were repaid with proceeds from the 2002 Revolver and the offering of the Senior Subordinated Notes on July 9, 2002 (see note 12).

6.    Long-Term Debt

Long-term debt consists of the following (excluding the debt of the Company’s Parent—see discussion below):

	December 31,						September 30, 2002
	2000			2001
							(Unaudited)
Revolver	$	50,000,000		$	—		$	—
New Revolver		—			4,500,000			—
2002 Revolver		—			—			70,000,000
Term Loans		20,700,000			—			—
New Term Loans		—			165,000,000			—
New Senior Notes		—			44,437,891			—
Senior Subordinated Notes		—			—			150,000,000
Empire Note		3,096,056			2,968,326			2,865,518
		73,796,056			216,906,217			222,865,518
Less current portion		(9,362,221	)		(10,292,061	)		(151,001	)
	$	64,433,835		$	206,614,156		$	222,714,517

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.

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.

F-13

LBI MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2001

(Information Pertaining to the Nine Months Ended September 30, 2001 and 2002 is Unaudited)

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 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 is a holding company that 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

F-14

LBI MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2001

(Information Pertaining to the Nine Months Ended September 30, 2001 and 2002 is Unaudited)

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. Interest is not payable until maturity.

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 described below. If either of these rights is exercised, it could require a significant amount of cash from the Company to repurchase the warrants, since the Parent is a holding company that has no operations or assets, other than its investment in the Company, and is dependent on the Company for cash flow. However, the Company has no legal obligation to provide that funding.

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 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.

F-15

LBI MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2001

(Information Pertaining to the Nine Months Ended September 30, 2001 and 2002 is Unaudited)

Based on the relative fair values at the date of issuance, the Parent allocated $13.6 million to the Parent Subordinated Notes and $16.4 million to the warrants. These fair values were determined by using the income and market valuation approaches. The income approach analyzes future revenues and discounts them to arrive at a current estimated fair value. The market approach uses recent sales and offering prices of similar properties to determine estimated fair value. 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 $1,912,000 for the nine months ended September 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, tower and/or studio 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 $413,000 and $636,000 during the nine months ended September 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, 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

F-16

LBI MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2001

(Information Pertaining to the Nine Months Ended September 30, 2001 and 2002 is Unaudited)

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 September 30, 2002, the “net value” of the Parent exceeded the base amounts set forth in the respective employment agreements, and the employees had vested in approximately $1,240,000, $2,638,000 and $5,564,000, respectively, of Incentive Compensation. As a part of the calculation of this incentive compensation, the Company used the income and market valuation approaches to determine the “net value” of the Parent. The income approach analyzes future revenues and discounts them to arrive at a current estimated fair value. The market approach uses recent sales and offering prices of similar properties to determine estimated fair value. 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 operations.

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.

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 $748,000 and $927,000 during the nine months ended September 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.

F-17

LBI MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2001

(Information Pertaining to the Nine Months Ended September 30, 2001 and 2002 is Unaudited)

The Company owed its national sales representative approximately $115,000, $100,000 and $153,000 as of December 31, 2000, December 31, 2001 and September 30, 2002, respectively. Such amounts are included in amounts due to related parties in the accompanying consolidated balance sheets.

The Company had approximately $188,000, $508,000 and $2,546,000 due from stockholders of its Parent and from affiliated companies at December 31, 2000 and 2001 and September 30, 2002, respectively. As described in Note 12, the Company loaned $1.9 million to a stockholder of the Parent in July 2002. These loans bear interest at the applicable federal rate and mature through July 2009. 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 $1,023,000 at December 31, 2000 and 2001 and September 30, 2002, respectively. These loans and advances, plus accrued interest, are included in amounts due from related parties and notes receivable 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, noncash impairment write-down and deferred compensation as its measure of profitability for purposes of assessing performance and allocating resources.

F-18

LBI MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2001

(Information Pertaining to the Nine Months Ended September 30, 2001 and 2002 is Unaudited)

	Year Ended December 31,									Nine Months Ended September 30,
	1999			2000			2001			2001			2002
										(Unaudited)
Net revenues:
Radio operations	$	19,420,288		$	28,636,489		$	31,553,517		$	23,556,004		$	29,000,196
Television operations		16,997,411			21,915,650			28,103,587			21,092,226			22,940,774
Consolidated net revenues	$	36,417,699		$	50,552,139		$	59,657,104		$	44,648,230		$	51,940,970
Operating expenses, excluding depreciation, amortization, noncash impairment write-down and deferred compensation:
Radio operations	$	10,779,359		$	13,611,424		$	14,921,503		$	9,883,610		$	12,746,702
Television operations		6,959,988			8,938,366			11,821,920			8,693,982			10,949,292
Consolidated operating expenses, excluding depreciation, amortization, noncash impairment write-down and deferred compensation	$	17,739,347		$	22,549,790		$	26,743,423		$	18,577,592		$	23,695,994
Operating income before depreciation, amortization, noncash impairment write-down and deferred compensation:
Radio operations	$	8,640,929		$	15,025,065		$	16,632,014		$	13,672,394		$	16,253,494
Television operations		10,037,423			12,977,284			16,281,667			12,398,244			11,991,482
Consolidated operating income before depreciation, amortization, noncash impairment write-down and deferred compensation	$	18,678,352		$	28,002,349		$	32,913,681		$	26,070,638		$	28,244,976
Depreciation expense:
Radio operations	$	507,132		$	534,049		$	875,595		$	495,420		$	1,033,669
Television operations		879,270			1,140,466			1,471,570			1,069,499			1,305,420
Consolidated depreciation expense	$	1,386,402		$	1,674,515		$	2,347,165		$	1,564,919		$	2,339,089
Amortization expense:
Radio operations	$	1,624,549		$	1,430,582		$	2,802,384		$	2,010,896		$	—
Television operations		1,423,942			1,532,217			3,523,641			2,459,859			—
Consolidated amortization expense	$	3,048,491		$	2,962,799		$	6,326,025		$	4,470,755		$	—
Noncash impairment write-down:
Television operations	$	—		$	—		$	—		$	—		$	1,750,000
Consolidated noncash impairment write-down	$	—		$	—		$	—		$	—		$	1,750,000
Deferred compensation:
Radio operations	$	—		$	1,240,000		$	1,398,000		$	1,068,000		$	2,926,000
Consolidated deferred compensation	$	—		$	1,240,000		$	1,398,000		$	1,068,000		$	2,926,000
Operating income:
Radio operations	$	6,509,248		$	11,820,434		$	11,556,035		$	10,098,078		$	12,293,825
Television operations		7,734,211			10,304,601			11,286,456			8,868,886			8,936,062
Consolidated operating income	$	14,243,459		$	22,125,035		$	22,842,491		$	18,966,964		$	21,229,887
Total identifiable assets:
Radio operations	$	5,780,873		$	8,214,042		$	30,483,507		$	33,913,926		$	25,039,839
Television operations		12,269,984			12,667,522			16,333,702			10,897,578			21,099,019
Total consolidated identifiable assets	$	18,050,857		$	20,881,564		$	46,817,209		$	44,811,502		$	46,138,858
Reconciliation of operating income before depreciation, amortization, noncash impairment write-down and deferred compensation to income (loss) before income taxes and cumulative effective of accounting change:
Operating income before depreciation, amortization, noncash impairment write-down and deferred compensation	$	18,678,352		$	28,002,349		$	32,913,681		$	26,070,638		$	28,244,976
Depreciation		(1,386,402	)		(1,674,515	)		(2,347,165	)		(1,564,919	)		(2,339,089	)
Amortization		(3,048,491	)		(2,962,799	)		(6,326,025	)		(4,470,755	)		—
Noncash impairment write-down		—			—			—			—			(1,750,000	)
Deferred compensation		—			(1,240,000	)		(1,398,000	)		(1,068,000	)		(2,926,000	)
Interest expense		(6,631,681	)		(6,837,540	)		(21,446,072	)		(16,263,271	)		(23,248,223	)
Interest and other income		170,728			240,238			473,634			430,271			96,135
Loss on sale of property and equipment		—			—			—			—			(388,169	)
Income before income taxes and cumulative effect of accounting change	$	7,782,506		$	15,527,733		$	1,870,053		$	3,133,964		$	(2,310,370	)

F-19

LBI MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2001

(Information Pertaining to the Nine Months Ended September 30, 2001 and 2002 is Unaudited)

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 are wholly owned and 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 borrow under the 2002 Revolver. The Company may borrow up to $150.0 million under the 2002 Revolver without restrictions, but any amount over $150.0 million will be subject to the Company's compliance with a specified leverage ratio (as defined in the indenture of the Senior Subordinated Notes). The indenture also limits the Company's ability to pay dividends.

Amounts available under the 2002 Revolver will begin decreasing quarterly, commencing on June 30, 2005 and continuing until maturity on September 30, 2009. Borrowings under the 2002 Revolver bear interest at the election of the Company, based on either the base rate (as defined in the senior credit agreement) or the LIBOR rate, in each case plus the applicable margin stipulated in the agreement ranging from 0.25% to 3.00% based on certain leverage ratios, as determined in the senior credit agreement. 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.

F-20

LBI MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2001

(Information Pertaining to the Nine Months Ended September 30, 2001 and 2002 is Unaudited)

In addition, the Company loaned $1.9 million to a stockholder of the Parent at the time of the refinancings. The loan matures in 2009 and bears interest at the applicable federal rate. The Company also repaid notes payable to the stockholders of the Parent of approximately $1.9 million.

On October 4, 2002, the Company filed a registration statement on Form S-4 (Registration No. 333-100330) with the Securities and Exchange Commission relating to an exchange offer for its Senior Subordinated Notes.

On October 11, 2002, the Company completed the acquisition of selected assets of KQQK-FM, licensed in Houston, Texas, for an aggregate purchase price of $24.7 million (including acquisition costs) and the acquisition of selected assets of KIOX-FM and KXGJ-FM, licensed to El Campo and Bay City, Texas, respectively, for an aggregate purchase price of $3.4 million (including acquisition costs).

On October 11, 2002, in conjunction with the above acquisitions, the Company borrowed an additional $23.5 million under the 2002 Revolver. On November 13, 2002 and December 12, 2002, the Company made principal payments of $1.75 million on each date. On January 14, 2003, the Company borrowed an additional $6.9 million, which leaves the Company with $73.1 million of available borrowing capacity under the 2002 Revolver. Of the $73.1 million borrowing capacity, the Company may borrow up to $53.1 million without having to meet the restrictions in the Senior Subordinated Notes indenture.

On December 19, 2002, the Company entered into an agreement to purchase selected assets of radio station KMXN-FM, licensed in Garden Grove, California, for an aggregate purchase price of $35.0 million, of which $2.0 million has been placed into escrow. At the same time, the Company entered into a time brokerage agreement to operate the station until the purchase is completed. The Company expects to complete the acquisition in the second quarter of 2003, subject to closing conditions specified in the asset purchase agreement.

F-21

We have not authorized any dealer, salesman or other person to give any information or to make any representation other than those contained in this prospectus. You must not rely upon any information or representation not contained 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 registered 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.

TABLE OF CONTENTS

Prospectus

	Page
PROSPECTUS SUMMARY	1
SUMMARY CONSOLIDATED FINANCIAL AND OTHER DATA	7
RISK FACTORS	8
FORWARD-LOOKING STATEMENTS	20
USE OF PROCEEDS	21
THE EXCHANGE OFFER; REGISTRATION RIGHTS	22
CAPITALIZATION	29
SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OTHER DATA	30
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	32
BUSINESS	44
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
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS	116
PLAN OF DISTRIBUTION	121
LEGAL MATTERS	123
EXPERTS	123
WHERE YOU CAN FIND MORE INFORMATION	123
INDEX TO FINANCIAL STATEMENTS	F-1

Until     , 2003, all dealers effecting transactions in the exchange notes, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the obligation of dealers to deliver a prospectus when acting as underwriters and with respect to their unsold allotment or subscriptions.

LBI Media, Inc.

Offer to Exchange

$150,000,000 principal amount of its 10 ¹/8% Senior Subordinated Notes due 2012 that have been registered under the Securities Act of 1933, as amended, for any and all of its outstanding 10 ¹/8% Senior Subordinated Notes due 2012

PROSPECTUS

        , 2003

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(1)
3.2	Certificate of Ownership of LBI Intermediate Holdings, Inc., dated July 9, 2002(1)
3.3	Bylaws of LBI Media, Inc.(1)
3.4	Articles of Incorporation of Liberman Television of Houston, Inc., including amendments thereto(1)
3.5	Bylaws of Liberman Television of Houston, Inc.(1)
3.6	Articles of Incorporation of KZJL License Corp., including amendments thereto(1)
3.7	Bylaws of KZJL License Corp.(1)
3.8	Articles of Incorporation of Liberman Television, Inc.(1)
3.9	Bylaws of Liberman Television, Inc.(1)
3.10	Articles of Incorporation of KRCA Television, Inc., including amendments thereto(1)

II-1

Exhibit Number	Exhibit Description
3.11	Bylaws of KRCA Television, Inc.(1)
3.12	Articles of Incorporation of KRCA License Corp., including amendments thereto(1)
3.13	Bylaws of KRCA License Corp.(1)
3.14	Articles of Incorporation of Liberman Broadcasting, Inc., including amendments thereto(1)
3.15	Bylaws of Liberman Broadcasting, Inc.(1)
3.16	Articles of Incorporation LBI Radio License Corp., including amendments thereto(1)
3.17	Bylaws of LBI Radio License Corp.(1)
3.18	Articles of Incorporation of Liberman Broadcasting of Houston, Inc., including amendments thereto(1)
3.19	Bylaws of Liberman Broadcasting of Houston, Inc.(1)
3.20	Articles of Incorporation of Liberman Broadcasting of Houston License Corp., including amendments thereto(1)
3.21	Bylaws of Liberman Broadcasting of Houston License Corp.(1)
3.22	Articles of Incorporation of Empire Burbank Studios, Inc., including amendments thereto(1)
3.23	Bylaws of Empire Burbank Studios, Inc.(1)
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(1)
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(1)
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
8.1	Opinion of O’Melveny & Myers, LLP regarding federal income tax considerations
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(1)
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(1)
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(1)
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(1)
10.5	Promissory Note dated July 9, 2002 issued by Lenard Liberman in favor of LBI Media, Inc.(1)
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(1)

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(1)
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(1)
10.9	Warrant Agreement dated March 20, 2001, by and between LBI Holdings I, Inc. and the purchasers named therein, as amended(1)
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(1)
10.11	Stock Purchase Agreement, dated January 6, 1998, by and among Jose Liberman, Esther Liberman, Lenard D. Liberman And LBI Holdings I, Inc.(1)
10.12	Promissory Note dated December 20, 2001 issued by Lenard D. Liberman in favor of LBI Media, Inc.(1)
10.13	Promissory Note dated December 20, 2001 by Jose Liberman in favor of LBI Media, Inc.(1)
10.14	Promissory Note dated June 14, 2002 issued by Lenard D. Liberman in favor of LBI Media, Inc.
10.15	Promissory Note dated July 14, 2002 issued by Jose Liberman in favor of LBI Media, Inc.
10.16	Promissory Note dated July 29, 2002 issued by Jose Liberman in favor of LBI Media, Inc.
10.17	Local Marketing Agreement, dated April 5, 2002, by and between El Dorado Communications, Inc. and Liberman Broadcasting of Houston, Inc. for the operation of KQQK-FM (terminated)
10.18	Time Brokerage (Local Marketing) Agreement, dated April 5, 2002, by and between El Dorado Communications, Inc. and Liberman Broadcasting of Houston, Inc. for the operation of KEYH-AM
10.19	Time Brokerage Agreement for KVNR, dated August 4, 2002, by and among Liberman Broadcasting, Inc., LBI Radio License Corp and Little Saigon Radio
10.20	Local Marketing Agreement, dated March 15, 2001, by and among Liberman Broadcasting of Houston, Inc., Liberman Broadcasting of Houston License Corp. and Houston Broadcasting Company, L.P. (KSEV-AM)
10.21	First Amendment to Local Marketing Agreement, dated November 2001, to the Local Marketing Agreement, dated March 15, 2001 with Houston Broadcasting Company, L.P. (KSEV-AM)
10.22	Time Brokerage Agreement for KJOJ(AM), dated November 6, 2001, by and among Liberman Broadcasting of Houston, Inc., Liberman Broadcasting of Houston License Corp. and Little Saigon Radio Broadcasting, Inc.
10.23	First Amendment to Time Brokerage Agreement for KJOJ(AM), dated August 2002, to the Time Brokerage Agreement with Little Saigon Radio Broadcasting, Inc.
10.24	Asset Purchase Agreement, dated December 19, 2002, by and among Aries Communications, Inc., Orange Broadcasting Corp., LBI Media, Inc., Liberman Broadcasting, Inc. and LBI Radio License Corp. relating to the acquisition of KMXN-FM
10.25	Local Marketing Agreement, dated December 19, 2002, by and between Aries Communications, Inc. and Liberman Broadcasting, Inc. (KMXN-FM)
12.1	Statement regarding Computation of Ratios of Earnings to Fixed Charges

II-3

Exhibit Number	Exhibit Description
21.1	Subsidiaries of LBI Media, Inc.(1)
23.1	Consent of O’Melveny & Myers, LLP (included in Exhibits 5.1 and 8.1)
23.2	Consent of Ernst & Young LLP
24.1	Power of Attorney(1)
25.1	Statement of Eligibility and Qualification under the Trust Indenture Act of 1939, as amended, of U.S. Bank, N.A., as trustee(1)
99.1	Form of Letter of Transmittal
99.2	Form of Notice of Guaranteed Delivery(1)

(1) Previously filed.

Item 22. Undertakings

The undersigned registrant hereby undertakes:

(1) to file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

(ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of a prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

(iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

(2) that, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; and

(3) to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

Each of the undersigned registrants hereby undertakes as follows: that prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other Items of the application form.

Each of the undersigned registrants hereby undertakes that every prospectus: (1) that filed pursuant to the immediately preceding paragraph or (2) that purports to meet the requirements of Section 10(a)(3) of the Securities Act of 1933, as amended, and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is

II-4

effective, and that, for purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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 provisions described under Item 20 above, 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 Securities Act of 1933 and will be governed by the final adjudication of such issue.

Each of the undersigned registrants hereby undertakes 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.

Each of the undersigned registrants hereby undertakes 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-5

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 January 22, 2003.

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

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
* Jose Liberman	President and Director of all Registrants (chief executive officer)	January 22, 2003
/s/    LENARD D. LIBERMAN         Lenard D. Liberman	Executive Vice President and Director of all Registrants (chief financial and accounting officer)	January 22, 2003

*By:	/s/    LENARD D. LIBERMAN
	Lenard D. Liberman Attorney-in-Fact

II-6

EXHIBIT INDEX

Exhibit Number	Exhibit Description
3.1	Articles of Incorporation of LBI Media, Inc., including amendments thereto(1)
3.2	Certificate of Ownership of LBI Intermediate Holdings, Inc., dated July 9, 2002(1)
3.3	Bylaws of LBI Media, Inc.(1)
3.4	Articles of Incorporation of Liberman Television of Houston, Inc., including amendments thereto(1)
3.5	Bylaws of Liberman Television of Houston, Inc.(1)
3.6	Articles of Incorporation of KZJL License Corp., including amendments thereto(1)
3.7	Bylaws of KZJL License Corp.(1)
3.8	Articles of Incorporation of Liberman Television, Inc.(1)
3.9	Bylaws of Liberman Television, Inc.(1)
3.10	Articles of Incorporation of KRCA Television, Inc., including amendments thereto(1)
3.11	Bylaws of KRCA Television, Inc.(1)
3.12	Articles of Incorporation of KRCA License Corp., including amendments thereto(1)
3.13	Bylaws of KRCA License Corp.(1)
3.14	Articles of Incorporation of Liberman Broadcasting, Inc., including amendments thereto(1)
3.15	Bylaws of Liberman Broadcasting, Inc.(1)
3.16	Articles of Incorporation LBI Radio License Corp., including amendments thereto(1)
3.17	Bylaws of LBI Radio License Corp.(1)
3.18	Articles of Incorporation of Liberman Broadcasting of Houston, Inc., including amendments thereto(1)
3.19	Bylaws of Liberman Broadcasting of Houston, Inc.(1)
3.20	Articles of Incorporation of Liberman Broadcasting of Houston License Corp., including amendments thereto(1)
3.21	Bylaws of Liberman Broadcasting of Houston License Corp.(1)
3.22	Articles of Incorporation of Empire Burbank Studios, Inc., including amendments thereto(1)
3.23	Bylaws of Empire Burbank Studios, Inc.(1)
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(1)
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(1)
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
8.1	Opinion of O’Melveny & Myers, LLP regarding federal income tax considerations
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(1)

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(1)
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(1)
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(1)
10.5	Promissory Note dated July 9, 2002 issued by Lenard Liberman in favor of LBI Media, Inc.(1)
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(1)
10.7	Securities Purchase Agreement dated March 20, 2001, by and between LBI Holdings I, Inc. and the purchasers named therein, as amended(1)
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(1)
10.9	Warrant Agreement dated March 20, 2001, by and between LBI Holdings I, Inc. and the purchasers named therein, as amended(1)
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(1)
10.11	Stock Purchase Agreement, dated January 6, 1998, by and among Jose Liberman, Esther Liberman, Lenard D. Liberman And LBI Holdings I, Inc.(1)
10.12	Promissory Note dated December 20, 2001 issued by Lenard D. Liberman in favor of LBI Media, Inc.(1)
10.13	Promissory Note dated December 20, 2001 issued by Jose Liberman in favor of LBI Media, Inc.(1)
10.14	Promissory Note dated June 14, 2002 issued by Lenard D. Liberman in favor of LBI Media, Inc.
10.15	Promissory Note dated July 14, 2002 issued by Jose Liberman in favor of LBI Media, Inc.
10.16	Promissory Note dated July 29, 2002 issued by Jose Liberman in favor of LBI Media, Inc.
10.17	Local Marketing Agreement, dated April 5, 2002, by and between El Dorado Communications, Inc. and Liberman Broadcasting of Houston, Inc. for the operation of KQQK-FM (terminated)
10.18	Time Brokerage (Local Marketing) Agreement, dated April 5, 2002, by and between El Dorado Communications, Inc. and Liberman Broadcasting of Houston, Inc. for the operation of KEYH-AM
10.19	Time Brokerage Agreement for KVNR, dated August 4, 2002, by and among Liberman Broadcasting, Inc., LBI Radio License Corp and Little Saigon Radio
10.20	Local Marketing Agreement, dated March 15, 2001, by and among Liberman Broadcasting of Houston, Inc., Liberman Broadcasting of Houston License Corp. and Houston Broadcasting Company, L.P. (KSEV-AM)
10.21	First Amendment to Local Marketing Agreement, dated November 2001, to the Local Marketing Agreement, dated March 15, 2001 with Houston Broadcasting Company, L.P. (KSEV-AM)

Exhibit Number	Exhibit Description
10.22	Time Brokerage Agreement for KJOJ(AM), dated November 6, 2001, by and among Liberman Broadcasting of Houston, Inc., Liberman Broadcasting of Houston License Corp. and Little Saigon Radio Broadcasting, Inc.
10.23	First Amendment to Time Brokerage Agreement for KJOJ(AM), dated August 2002, to the Time Brokerage Agreement with Little Saigon Radio Broadcasting, Inc.
10.24	Asset Purchase Agreement, dated December 19, 2002, by and among Aries Communications, Inc., Orange Broadcasting Corp., LBI Media, Inc., Liberman Broadcasting, Inc. and LBI Radio License Corp. relating to the acquisition of KMXN-FM
10.25	Local Marketing Agreement, dated December 19, 2002, by and between Aries Communications, Inc. and Liberman Broadcasting, Inc. (KMXN-FM)
12.1	Statement regarding Computation of Ratios of Earnings to Fixed Charges
21.1	Subsidiaries of LBI Media, Inc.(1)
23.1	Consent of O’Melveny & Myers, LLP (included in Exhibits 5.1 and 8.1)
23.2	Consent of Ernst & Young LLP
24.1	Power of Attorney(1)
25.1	Statement of Eligibility and Qualification under the Trust Indenture Act of 1939, as amended, of U.S. Bank, N.A., as trustee(1)
99.1	Form of Letter of Transmittal
99.2	Form of Notice of Guaranteed Delivery(1)

(1) Previously filed.

EX-5.1

EXHIBIT 5.1

January 22, 2003

LBI Media, Inc.

1845 West Empire Avenue

Burbank, California 91504

Re: Exchange Offer for $150,000,000 10- ¹/8% Senior Subordinated Notes due 2012 for up to $150,000,000 10- ¹/8% Senior Subordinated Notes due 2012

Ladies and Gentlemen:

At your request, we have examined the Registration Statement (the “Registration Statement”) on Form S-4 (File No. 333-100330) of LBI Media, Inc., a California corporation (the “Company”), and each of the entities listed on Schedule A attached hereto (the “Guarantors,” and together with the Company, the “Registrants”) in connection with the proposed offer (the “Exchange Offer”) to exchange any and all of the Company’s outstanding 10-1/8% Senior Subordinated Notes (the “Old Notes”) and the accompanying guarantees (the “Old Guarantees”) for the Company’s 10-1/8% Senior Subordinated Notes (the “Exchange Notes”) and accompanying guarantees (the “New Guarantees”) that are being registered pursuant to the Registration Statement.

We are of the opinion that:

(i) The Exchange Notes have been duly authorized by all necessary corporate action on the part of the Company and, when the Exchange Notes are executed, authenticated and delivered by or on behalf of the Company against the due tender and delivery of the Old Notes in an aggregate principal amount equal to the aggregate principal amount of the Exchange Notes, will be legally valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or 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 and the possible unavailability of specific performance or injunctive relief, regardless of whether considered in a proceeding in equity or at law.

(ii) Each New Guarantee to be endorsed on the Exchange Notes by each Guarantor has been duly authorized by all necessary corporate action on the part of such Guarantor, and, when executed in accordance with the terms of the Indenture and when the Exchange Notes have been executed, authenticated and delivered by or on behalf of the Company against the due tender and delivery of the Old Notes in an aggregate principal amount equal to the aggregate principal amount of the Exchange Notes, the New Guarantee of each Guarantor endorsed thereon will be the legally valid and binding obligation of such Guarantor, enforceable against such Guarantor in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or 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 and the possible unavailability of specific performance or injunctive relief, regardless of whether considered in a proceeding in equity or at law.

Our opinions in paragraphs (i) and (ii) as to the enforceability of the Exchange Notes and the New Guarantees are subject to:

(a) 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; and

(b) 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.

Without limiting the generality of the qualifications contained in clause (ii), we express no opinion as to the effect on the enforceability of the New Guarantees of Sections 544 and 548 of the U.S. Bankruptcy Code and Section 270 et seq. of the New York Debtor and Creditor Law relating to fraudulent transfers and obligations.

We hereby consent to the use of this opinion as an exhibit to the Registration Statement and to the reference to this firm under the heading “Legal Matters” in the prospectus included as part of the Registration Statement.

Respectfully submitted,

/s/    O’MELVENY & MYERS LLP

SCHEDULE A

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

Empire Burbank Studios, Inc., a California corporation

EX-8.1

EXHIBIT 8.1

January 22, 2003

LBI Media, Inc.

1845 West Empire Avenue

Burbank, California 91504

Re: Exchange Offer for $150,000,000 10 ¹/8 Senior Subordinated Notes due 2012 for up to $150,000,000 10 ¹/8 Senior Subordinated Notes due 2012

Ladies and Gentlemen:

We have acted as counsel to LBI Media, Inc., a California corporation (the “Company”), and each of the entities listed on Schedule A attached hereto (the “Guarantors,” and together with the Company, the “Registrants”) in connection with the proposed offer (the “Exchange Offer”) to exchange any and all of the Company’s outstanding 10 1/8 Senior Subordinated Notes (the “Old Notes”) and the accompanying guarantees (the “Old Guarantees”) for 10 1/8 Senior Subordinated Notes (the “Exchange Notes”) and accompanying guarantees (the “New Guarantees”) that have been registered pursuant to a registration statement on Form S-4 (such registration statement, as amended or supplemented, the “Registration Statement”) filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”).

You have requested our opinion as to certain United States federal income tax consequences of the Exchange Offer. In preparing our opinion, we have reviewed and relied upon the Registration Statement and such other documents as we deemed necessary.

On the basis of the foregoing, it is our opinion that the exchange of the Old Notes and the Old Guarantees for the Exchange Notes and the New Guarantees pursuant to the Exchange Offer will not be treated as an “exchange” for United States federal income tax purposes, because the Exchange Notes will not be considered to differ materially in kind or extent from the Old Notes. Rather, the Exchange Notes received by a holder will be treated as a continuation of the Old Notes in the hands of that holder. Accordingly, there will be no federal income tax consequences to holders solely as a result of the exchange of the Old Notes and the Old Guarantees for the Exchange Notes and the New Guarantees under the Exchange Offer.

The opinion set forth above is based upon the applicable provisions of the Internal Revenue Code of 1986, as amended, the Treasury Regulations promulgated or proposed thereunder, positions of the Internal Revenue Service (the “IRS”) contained in published revenue rulings, revenue procedures, and announcements, existing judicial decisions and other applicable authorities, all as in effect as of the date of this opinion. No tax ruling has been sought from the IRS with respect to any of the matters discussed herein. Unlike a ruling from the IRS, an opinion of counsel is not binding on the IRS. Hence, no assurance can be given that the opinion stated in this letter will not be successfully challenged by the IRS or that a court would reach the same conclusion. We express no opinion concerning any tax consequences of the Exchange Offer except as expressly set forth above.

We consent to the filing of this opinion as an exhibit to the registration statement, to the reference to this firm and the inclusion of our opinion in the section entitled “United States Federal Income Tax Considerations” in the Registration Statement. In giving this consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the Securities and Exchange Commissions promulgated thereunder.

Respectfully submitted,

/s/    O’MELVENY & MYERS LLP

SCHEDULE A

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

Empire Burbank Studios, Inc., a California corporation

EX-10.14

Exhibit 10.14

LENARD LIBERMAN

PROMISSORY NOTE

$32,000.00	Los Angeles, California
	June 14, 2002

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 THIRTY-TWO THOUSAND DOLLARS AND NO CENTS ($32,000.00), 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 June 4, 2009. The unpaid principal under this Note shall bear interest until due and payable at at 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 June 14, 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.

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

EX-10.15

EXHIBIT 10.15

JOSE LIBERMAN

PROMISSORY NOTE

$4,432.46	Los Angeles, California
	July 14, 2002

FOR VALUE RECEIVED, JOSE LIBERMAN, an individual (“Payor”), hereby promises to pay to the order of LBI MEDIA, INC., a California corporation (“Payee”) the principal amount of FOUR THOUSAND, FOUR HUNDRED AND THIRTY TWO DOLLARS AND FORTY SIX CENTS ($4,432.46), 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 14, 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 14, 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.

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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.

By:	/s/  Lenard Liberman
	Name:  Lenard Liberman       Title:  Executive Vice President

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EX-10.16

EXHIBIT 10.16

JOSE LIBERMAN

PROMISSORY NOTE

$75,000.00	Los Angeles, California
	July 29, 2002

FOR VALUE RECEIVED, JOSE LIBERMAN, an individual (“Payor”), hereby promises to pay to the order of LBI MEDIA, INC., a California corporation (“Payee”) the principal amount of SEVENTY FIVE THOUSAND DOLLARS AND NO CENTS ($75,000.00), 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 29, 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 29, 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.

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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.

By:	/s/  Lenard Liberman
	Name:  Lenard Liberman       Title:  Executive Vice President

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EX-10.17

EXHIBIT 10.17

LOCAL MARKETING AGREEMENT

This Local Marketing Agreement (the “Agreement”), dated as of April 5, 2002, is made and entered into by and between El Dorado Communications, Inc., a California corporation (the “Owner”), the owner and operator of KQQK(FM), Beaumont, Texas (the “Station”), which is licensed to its wholly owned subsidiary, KXTJ License, Inc., and Liberman Broadcasting of Houston, Inc., a California corporation (the “Broker”).

WHEREAS, Owner is engaged in the business of radio broadcasting on the Station and will have available airtime;

WHEREAS, Owner has agreed to retain Broker to provide programming for the Station pursuant to the terms and conditions set forth in this Agreement and in conformity with the Station’s policies and practices and the Communications Act of 1934, as amended together with the rules and regulations (the “FCC Rules”) of the Federal Communications Commission (the “FCC”); and

WHEREAS, Broker has agreed to supply such programming and sell advertising that is in conformance with the Station’s policies and all FCC Rules, including the requirement that the ultimate control of the Station be maintained by Owner;

NOW THEREFORE, for and in consideration of the mutual covenants herein contained, the parties hereto have agreed and do agree as follows:

1. Purchase of Airtime and Provision of Programming. From the Effective Date until the date on which this Agreement is terminated, subject to the terms and conditions of this Agreement, Owner agrees to broadcast programming supplied by Broker 24 hours-per-day, 7 days per week provided that Owner may broadcast up to one (1) hour of programming per week which is aimed at serving the needs and interests of the Station’s community of license on Sundays before 6:00 a.m. and in accordance with Section 11 of this Agreement. The Effective Date shall be 12:01 a.m. on May 20, 2002 or such other date as may be mutually agreed upon in writing by the parties; provided, however, that Broker’s obligations hereunder shall not commence unless Owner shall be in compliance with its obligations under the FM Asset Purchase Agreement with respect to this Agreement. Broker shall air the type of programming set forth on Exhibit A hereto (the “Format”); provided, however, that Broker shall have the right to change the Format should it so desire.

2. Payments. From and after the Effective Date, Broker shall pay Owner the payments as set forth on Exhibit B hereto. All payments shall be made in advance in equal monthly installments due no later than the first (1^st) day of each calendar month during the term of this Agreement; provided, however, that on or before the Effective Date, Broker shall have paid to Owner a prorated monthly payment for the month in which the Effective Date occurs as calculated based upon the number of days in such month falling on and after the Effective Date as a percentage of the total days in such month and multiplied by the monthly payment set forth on Exhibit B hereto. The parties shall similarly prorate the amount due for the last month of this Agreement in the event that this Agreement is terminated other than on the last day of a calendar month with Owner either refunding to Broker the amount of such proration within five (5) business days or, if this Agreement terminates upon consummation of the transactions contemplated by the FM Asset Purchase Agreement, Owner shall, at its election, either credit such amount against the amounts due from Broker to Owner on the KQQK Closing Date (as defined in the FM Asset Purchase Agreement) or refund such amount to Broker on the KQQK Closing Date. All monthly payments shall be by check.

Without limiting Owner’s rights and remedies under Section 16 or any other provision of this Agreement, including its right to terminate this Agreement pursuant to Section 16.1.1, if Broker has not delivered any payment owing to Owner by the tenth (10^th) day of the calendar month, after three (3) days’ written notice of the late payment to Broker, Owner may, in its sole discretion, suspend the carriage of Broker’s programming and resell such broadcast time (a “Default Segment”). Broker shall remain liable to Owner for the difference between the amount payable by Broker pursuant to Section 1 for the broadcast time comprising the Default Segment during the remainder of the term of the Agreement and the amount, if any, received by Owner upon resale of all or part of the Default Segment to a third party during the remainder of the term of the Agreement or the operation of the Station by Owner during such period.

The Broker shall receive a credit for any scheduled programming not broadcast by the Station under the powers of operation and preemption in Section 11, the amount of such credit to be equal to such percentage of the monthly payment amount as the amount of time preempted comprises of the total programming hours for such month. Such credit shall be Owner’s sole compensation to Broker for air time so lost. Owner shall have no other liability to Broker or any third party pursuant to the terms of this Section.

Notwithstanding any other provisions of this Agreement and without limiting other rights and remedies of Owner, any payment provided for in this Section 2 not made on the due date shall be subject to finance charges at a rate equal to the lesser of (x) 10% per annum or (y) the highest rate allowed by applicable law, compounded monthly.

3. Accounts Receivable. Broker shall have no interest in any cash accounts receivable for broadcasts on the Station which occur prior to the Effective Date. All revenues and cash accounts receivable for broadcasts on the Station following the Effective Date shall belong to Broker. Broker may sell advertising time consistent with the applicable rules and regulations and the Policy Statement (as defined below), on the Station in combination with any other broadcast station of its choosing, subject to compliance with applicable law. Broker shall be responsible for payment of the commissions due to any national sales representative, local sales representative, agency or employee engaged by it for the purpose of selling advertising that is carried during the programming it provides to Owner. Notwithstanding anything in the foregoing to the contrary, to the extent that Owner has received prepayment for advertising time for periods following the Effective Date, Owner shall disclose such prepayments to Broker on or prior to the Effective Date and such prepayments shall be deducted from the amounts due to Owner pursuant to Section 2 of this Agreement. All information provided by Owner prior to the Effective Date, pursuant to the terms of the FM Asset Purchase Agreement, shall accurately reflect all advertisements scheduled following the Effective Date. If advertisers whose advertisements air on the Station on or after the Effective Date make payments to Owner rather than to Broker with respect to such advertisements, Owner shall hold such amounts in trust for Broker, shall promptly notify Broker of the receipt of such funds and shall forward such amounts to Broker within five (5) business days. If advertisers whose advertisements aired on the Station prior to the Effective Date make payments to Broker rather than to Owner with respect to such pre-Effective Date advertisements, Broker shall hold such amounts in trust for Owner, shall promptly notify Owner of the receipt of such funds and shall forward such amounts to Owner within five (5) business days. If Owner fails to forward such amount to Broker within five (5) business days, Broker shall have the right to set such amounts off against the payments due under Section 2 hereunder with amounts subsequently paid by Owner being reimbursed by Broker.

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4. Prohibition on Resale. Broker agrees that it will not resell or otherwise transfer all or any portion of the airtime purchased from Owner hereunder without the express prior written consent of Owner, which consent shall not be unreasonably withheld, any such sale or transfer without such consent being void and of no force or effect; provided, however, that Broker may resell airtime in blocks of no longer than six (6) consecutive hours to one individual or firm (per resold block) without Owner’s prior written consent.

5. Program Delivery Requirements. Broker shall deliver programming at its expense to Owner at the location set forth on Exhibit E for further delivery to the Station’s transmitter facilities.

6. Term. The term of this Agreement shall be for a period beginning on the date first above written and expiring upon the earlier of (x) the KQQK Closing Date (as defined pursuant to the FM Asset Purchase Agreement) or (y) termination of the FM Asset Purchase Agreement, unless sooner terminated as provided by this Agreement.

7. Station Facilities.

7.1Operation of Station. Throughout the term of this Agreement, Owner shall operate the Station with the maximum authorized facilities. Any necessary maintenance work affecting the operation of the Station which would result in a reduction of transmitter power by more than ten percent (10%) shall be scheduled upon as much prior notice to Broker as practicable and shall be performed between the hours of 12:00 a.m. and 5:00 a.m. Owner reserves the right, subject to FCC authorization, to modify the facilities of the Station as it determines is advisable in its sole discretion and consistent with the FM Asset Purchase Agreement.

7.2 Interruption of Normal Operations. If the Station suffers loss or damage to its transmission facilities for any cause other than one governed by Section 7.3, which results in the decrease in the Station’s operating power by more than ten percent (10%), Owner shall notify Broker within two (2) hours and shall promptly undertake such repairs as necessary to restore the operation of the Station within five (5) days from the occurrence of such loss or damage. If Owner fails to return the Station to normal operations with such five (5) day period, Broker will be entitled to decrease the payments called for in Sections 1 and 2 in proportion to the loss of power by more than ten percent (10%). If Owner fails to accomplish that result within sixty (60) days, Broker may terminate this Agreement upon ten (10) days notice to Owner.

7.3 Force Majeure. Any failure or impairment of the Station’s facilities or any delay or interruption in the broadcast of programs, or failure at any time to furnish facilities, in whole or in part, for broadcast due to acts of God, strikes, lockouts, civil riot, floods and any other cause not reasonably within the control of Owner, shall not constitute a breach of this Agreement and Owner will not be liable to Broker. Broker shall not be required to make payments to Owner for periods covered by the force majeure event.

8. Programming Standards. All programs supplied by Broker shall meet in all material respects all applicable rules, regulations and policies of the FCC and the standards set out in Exhibit C of this Agreement (the “Policy Statement”). All advertising spots and promotional material or announcements shall comply with all applicable federal, state and local regulations and policies. If, in the reasonable judgment of Owner, the programming presented by Broker does not comply with the applicable rules, regulations and policies of the FCC and the standards set out in the Policy Statement, Owner may suspend or cancel any such program after

3

giving written notice of such determination to Broker and Broker having failed to remedy the problem within ten (10) business days. The provision by Broker of any programming, announcement, advertising or other matter that is slanderous, defamatory, obscene or indecent, as determined by a final, unappealable order of the FCC, a court of competent jurisdiction or in an arbitration pursuant to Section 32, shall constitute a material breach of this Agreement, and shall entitle Owner, at its sole discretion, to terminate this Agreement immediately and exercise its rights and remedies under this Agreement based on such material breach by Broker, notwithstanding the provisions of Sections 6 and 16.2. If Owner determines, in its reasonable judgment, that any programming, announcement, advertising or other matter provided by or on behalf of Broker for broadcast on the Station may be slanderous or defamatory, Owner may require a retraction to be broadcast on the Station hereunder without (i) creating any liability to Broker or any other third party or (ii) limiting Owner’s indemnification rights pursuant to Section 15, or any of its other rights pursuant to Sections 10 and 16, or any other provision of this Agreement; provided, however, that Broker shall have the right to contest such determination in accordance with Section 32 hereof and shall not be required to broadcast such retraction pending the outcome of such contest.

9. Responsibility for Expenses and Employees.

9.1 Division of Expenses. Owner will provide and be responsible for (i) the Station personnel necessary for maintenance and operation of the Station’s transmission facilities (including without limitation a Chief Operator), and will be responsible for the salaries, taxes, insurance and related costs for all Station personnel used in the maintenance and operation of the Station’s transmission facilities and main studio, (ii) all real and personal property taxes, mortgage fees and expenses and other real property costs (including insurance), (iii) all transmitter site leases and any lease payments related to the Station’s studios located at Liberty, Texas, and Post Oak Road, Houston, Texas (including the rooftop microwave studio transmitter link and the STL hop site), (iv) any utilities (excluding Broker’s telephone charges related to getting programming to the Station’s transmission facilities), and (v) all costs and expenses for the maintenance of all transmitter equipment. Whenever on the Station’s premises, all personnel shall be subject to the supervision and the direction of Owner’s General Manager and/or the Station’s Chief Operator. Except as set forth in the foregoing sentences of this Section 9, Broker shall be responsible for all other expenses involved in the operation of the Station including, without limitation, (i) all operating expenses of the Station (including telephone expenses and expenses related to sales, marketing, promotion, advertising, billing and collections and traffic), (ii) all costs and expenses for maintenance of studio equipment, (iii) the employment and salaries, taxes, insurance and related costs for all personnel used in the production of its programming, including salespeople, traffic personnel board operators and programming staff and (iv) all copyright fees attributable to Broker’s programming broadcast on the Station, including, without limitation, all ASCAP, BMI and SESAC fees, and fees for any other necessary music performance rights, as determined in the sole discretion of Owner. At Broker’s request, Owner shall file new agreements with the music licensing organizations in order to reflect the change in the Station’s format. At any time after the date first set forth above, Broker shall have the right to hire Owner’s traffic manager (the “Traffic Manager”); provided, however, that, if Broker hires the Traffic Manager during the period prior to the Effective Date, Broker shall make the Traffic Manager available to Owner to continue to prepare traffic logs for Owner during the period prior to the Effective Date; provided, further, that Broker shall incur no liability related to, and Owner hereby waives any claim against Broker with respect to, the Traffic Manager’s performance of functions for Owner.

10. Operation of Station.

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10.1 Control. Notwithstanding anything to the contrary in this Agreement, Owner shall have full authority and power over the management and operation of the Station during the period of this Agreement. In no event shall Broker, or Broker’s employees, represent, depict, describe or portray Broker as Owner of the Station. To this end, all employees of Broker, whose work involves the Station, shall be informed as to Owner’s ultimate control over the Station and Broker’s subordinate capacity. Owner shall provide and pay for the General Manager of the Station, who shall report and be accountable solely to Owner and who shall be responsible for the direction of the day-to-day operation of the Station to the extent required pursuant to the FCC Rules with Roel Campos to serve in this position at all times during his employment with Owner and in no event for less than sixty (60) days. To the extent necessary to avoid an unauthorized transfer of control of the Station’s FCC licenses, Owner shall retain control over the policies, programming and operations of the Station, including the right to pre-empt any programs in order to broadcast a program deemed by Owner to be of greater national, regional or local interest, subject to Section 11. Owner shall at all times be solely responsible for meeting all of the FCC’s requirements with respect to public service programming, for maintaining the political and public inspection files and the Station log, and for the preparation of all programs/issues lists.

10.2 Broker’s Responsibilities with Respect to Operation of Station. At Owner’s request, Broker shall cooperate with and assist Owner in complying with the FCC Rules and the other rules and regulations referenced in Section 10.1, including by reporting such information as Owner may reasonably request from time to time in order to comply with its programming reporting requirements. Broker shall cause the Station to transmit any required tests of the Emergency Alert System at such times as are reasonably directed by Owner. Broker shall prepare, maintain and deliver to Owner all records and information in Broker’s possession that are required by the FCC to be placed in the public inspection files of the Station pertaining to the broadcast of political programming and advertisements, in accordance with the provisions of Sections 73.1940 and 73.3526 of the FCC’s rules. Broker also shall consult with Owner and adhere strictly to all applicable statutes and the rules, regulations and policies of the FCC, as announced from time to time, with respect to the carriage of political advertisements and programming (including, without limitation, the rights of candidates and, as appropriate, others to “equal opportunities”) and the charges permitted therefor. Broker shall furnish within its programming, on behalf of Owner, all station identification announcements required by the FCC’s rules.

11. Public Affairs; Special Events. Nothing in this Agreement shall abrogate the unrestricted authority of Owner to discharge its obligations to the public and to comply with the FCC Rules with respect to meeting the ascertained needs and interests of the public as set forth in Section 2. Additionally, Owner shall have the right, in its reasonable discretion, to pre-empt any of the broadcasts of the programs supplied by Broker, and to use part or all of the hours of operation of the Station for the broadcast of events related to local or national emergencies if Broker is not already covering such event. In all such cases, Owner will use its best efforts to give Broker reasonable advance notice of its intention to pre-empt programming and, in the event of such pre-emption, Broker shall receive a credit for such time as may be pre-empted by Owner.

12. Right to Use the Programs. The right to use the programs produced by Broker and to authorize their use in any manner and in any media whatsoever shall be at all times vested solely in Broker except as authorized by this Agreement.

13. Payola and Plugola. Broker agrees that Broker will not accept any compensation of any kind or gift or gratuity of any kind whatsoever, regardless of its value or form, including,

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but not limited to, a commission, discount, bonus, materials, supplies or other merchandise, services or labor, whether or not pursuant to written contracts or agreements between Broker and merchants or advertisers, unless the payer is identified in the programs as having paid for or furnished such consideration in accordance with FCC requirements. Upon request from Owner, Broker agrees annually to execute and provide Owner with a Payola Affidavit, substantially in the form which is provided as Exhibit D hereto.

14. Compliance with Law. The Broker will, in good faith, endeavor to comply with all laws and regulations applicable to the broadcast of programming by the Station.

15. Indemnification; Rights of Owner; Insurance.

15.1 Indemnification. The Broker will indemnify and hold harmless Owner and its officers, directors, employees, affiliates and agents (the “Owner Parties”) against all claims, damages, liabilities, costs and expenses including, without limitation, amounts paid in settlement, any judgment and reasonable attorneys’ fees and costs (the “Losses”) resulting from claims for defamation, slander, illegal competition or trade practice, violation of rights of privacy, and infringement of copyrights or other proprietary rights or other law arising out of the content of programming broadcast on the Station and furnished by Broker pursuant to this Agreement. The Broker shall further indemnify and hold harmless each Owner Party from and against all other Losses arising from the content of programming broadcast on the Station and furnished by Broker pursuant to this Agreement with respect to a challenge to the renewal of the FCC license for the Station or any FCC enforcement proceeding.

15.2 Insurance. In addition to any other insurance coverage which Broker may be required to carry in accordance with applicable law, from the Effective Date through the date on which this Agreement is terminated, Broker shall obtain and maintain a media special perils insurance policy with errors and omissions coverage with a coverage limit of at least $5,000,000. If agreeable to the insurer on terms reasonably acceptable to Broker, Broker shall name Owner and KXTJ License, Inc. as additional insureds under the policies maintained pursuant to this Section 15.2.

16. Events of Default; Cure Periods and Remedies.

16.1 Events of Default. The following shall constitute events of default (the “Events of Default”) under the Agreement:

16.1.1 Non-Payment. The Broker’s failure to pay any broadcast fee pursuant to Sections 1 and 2 when due subject to the cure provision in Section 2.

16.1.2 Non-Timely Delivery of Program Materials. Broker’s failure to deliver programs in a timely fashion.

16.1.3 Default in Covenants. The default by Broker or by Owner in the performance of any material covenant, condition or undertaking contained in this Agreement (other than defaults governed by Sections 8, 16.1.1 or 16.1.2 and defaults arising as a result of the circumstances contemplated in Section 7.2 or 7.3, which, in each case, shall be governed by such sections).

16.1.5 Breach of Representation. If any representation or warranty made by Owner or Broker in this Agreement, or in any certificate or document furnished by Broker to Owner

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pursuant to the provisions of this Agreement, shall prove to have been false or misleading in any material respect as of the time furnished.

16.2 Cure Periods. Notwithstanding anything in Section 16.1 to the contrary, with respect to Sections 16.1.3 and 16.1.5, no Event of Default shall be deemed to have occurred until the non-defaulting party has provided the party in default with written notice specifying the event or events that, if not cured, would constitute an Event of Default and specifying the actions necessary to cure the default(s) and the defaulting party shall have failed to have cured such default within sixty days after receipt of such notice. This period may be extended for a reasonable period of time if the defaulting party is acting in good faith to cure and such delay is not materially adverse to the non-defaulting party.

16.3 Termination Upon Default. Upon the occurrence of an Event of Default, the non-defaulting party may immediately terminate this Agreement, provided that it is not also in material default of this Agreement. Notwithstanding the foregoing, this Agreement: (a) shall terminate immediately, without notice to Broker or any further action by Owner or any other person, upon Broker’s making a general assignment for the benefit of creditors, or filing a petition for bankruptcy, for reorganization or an arrangement, or for the appointment of a receiver, trustee or similar creditors’ representative for the property or assets of Broker under any federal or state insolvency law; and (b) shall terminate at the end of the thirtieth (30^th) day after any person has filed against Broker a petition for bankruptcy, for reorganization or an arrangement, or for the appointment of a receiver, trustee or similar creditors’ representative for the property or assets of Broker under any federal or state insolvency law, unless such petition has been dismissed or discharged by such time. In no event shall Owner or Broker have any liability for consequential, special, incidental, or lost profits damages. In no event shall termination extinguish any rights of Owner pursuant to Section 15.1.

17. [Reserved].

18. Termination Upon Order of Judicial or Governmental Authority. If any court of competent jurisdiction or any federal, state or local governmental authority designates a hearing with respect to the continuation or renewal of any license or authorization held by Owner for the operation of the Station, advises any party to this Agreement of its intention to investigate or to issue a challenge to or a complaint concerning the activities permitted by this Agreement, or orders the termination of the Agreement and/or the curtailment in any manner material to the relationship between the parties to this Agreement of the provision of programming by Broker, with the concurrence of Owner, Broker shall have the option to seek administrative or judicial appeal of or relief from such order(s), in which event Owner shall cooperate with Broker provided that Broker shall be responsible for legal fees incurred in such proceedings, or Broker shall notify Owner that the Agreement will be terminated in accordance with such order(s). If the FCC designates the renewal application of the Station for a hearing as a consequence of any action taken by Broker under this Agreement, Broker shall cooperate and comply with any reasonable request of Owner to assemble and provide to the FCC information relating to Broker’s performance under this Agreement, at Broker’s expense. Upon termination following such governmental order(s), Broker shall pay to Owner any fees due but unpaid as of the date of termination as may be permitted by such order(s), and Owner shall reasonably cooperate with Broker to the extent permitted to enable Broker to fulfill advertising or other programming contracts then outstanding. Thereafter, neither party shall have any liability to the other.

19. Mutual Representations and Warranties. Each of Owner and Broker represents to the other (i) that it is legally qualified and able to enter into this Agreement, (ii) that the

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execution, delivery and performance hereof does not constitute a breach or violation of any agreement, contract or other obligation to which it is subject or by which it is bound and (iii) that this Agreement constitutes the legal, valid and binding obligation of such party, enforceable in accordance with its terms.

20. Maintenance of Corporate Status. At all times during the term of this Agreement, Broker and Owner shall take such actions as are necessary to ensure that the respective party is in good standing under the laws of its jurisdiction of incorporation.

21. Modification and Waiver. No modification or waiver of any provision of the Agreement shall be effective unless made in writing and signed by the party adversely affected, and any such waiver and consent shall be effective only in the specific instance and for the purpose for which such consent was given.

22. No Waiver; Remedies Cumulative. No failure or delay on the part of Owner or Broker in exercising any right or power under this Agreement 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 waiver of any breach of this Agreement by any party hereto shall not be deemed to be a waiver of any preceding or subsequent breach under this Agreement. The rights and remedies of the parties to this Agreement are cumulative and are not exclusive of any rights or remedies which either may otherwise have.

23. Construction. This Agreement shall be construed in accordance with the laws of the State of Texas without regard to the provisions of conflicts of law thereunder. The obligations of the parties to this Agreement are subject to all federal, state or municipal laws or regulations, including those of the FCC, now or hereafter in force. The parties each acknowledge that all the terms and conditions in this Agreement have been the subject of active and complete negotiation between the parties and represent the parties’ agreement based upon all relevant considerations. The parties agree that the terms and conditions of this Agreement shall not be construed in favor of or against any party by reason of the extent to which any party or its professional advisors participated in the preparation hereof. Nothing in this agreement shall be deemed to constitute a joint venture or partnership between the parties hereto.

24. Headings. The headings contained in this Agreement are included for convenience only and shall not in any way alter the meaning of any provision.

25. Successors and Assigns. This Agreement may not be assigned by Broker without the express written consent of Owner first had and obtained. Except as otherwise provided herein, this Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns.

26. Counterpart Signatures. This Agreement may be signed in one or more counterparts, each of which shall be deemed a duplicate original and be binding on the parties to this Agreement.

27. Notices. Any notice required hereunder shall be in writing and any payment, notice or other communications shall be deemed given when delivered personally, or mailed by certified mail with return receipt requested or by Federal Express, postage prepaid, and addressed as follows:

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If, to Broker: with copies (which shall not constitute notice) to: and, If to Owner: Lenard D. Liberman Executive Vice President Liberman Broadcasting of Houston, Inc. 1845 Empire Ave. Burbank, California 91504 Phone: BOTH (818) 563-5722 and                          (281) 493-2900 Fax: BOTH (818) 558-4244 and                      (281) 759-3963 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 Roel Campos, Esq. El Dorado Communications 1980 Post Oak Boulevard, Suite 1500 Houston, TX 77058 Phone: (713) 968-4500 Fax: (713) 968-4518

with copies (which shall not, by itself, constitute notice) to: 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

28. Entire Agreement. This Agreement embodies the entire agreement between the parties and there are no other agreements, representations, warranties, or understandings, oral or written, between them with respect to the subject matter hereof.

29. Severability. In the event that any of the provisions contained in this Agreement is held to be invalid, illegal or unenforceable, it shall not affect any other provision hereof, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had not been contained herein.

30. Attorneys’ Fees. In the event of any legal action to enforce the terms of this Agreement, the prevailing party in any such action shall be entitled to recover his or its costs and reasonable attorneys’ fees incurred from the losing party.

31. Certification. For purposes of Section 73.3555, Note 2(k)(3) of the FCC Rules, Owner certifies that it maintains ultimate control over the Station’s facilities, including

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specifically control over the Station’s finances, personnel and programming and Broker certifies that this Agreement complies with the provisions of Section 73.3555(a), 73.3555(c) and 73.3555(d) of the FCC Rules.

32. Arbitration. Any disputes arising under this Agreement or any of the agreements contemplated herein and out of the relationship among the parties, will be submitted to binding arbitration in the manner specified in Section 11.6 of the FM Asset Purchase Agreement.

[Remainder of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement on the date first written above.

LIBERMAN BROADCASTING OF HOUSTON, INC.

By:	/s/    LENARD D. LIBERMAN
	Lenard D. Liberman Executive Vice President

EL DORADO COMMUNICATIONS, INC.

By:	/s/    ROEL C. CAMPOS
	Roel Campos Senior Vice President

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EXHIBIT A

Program Lineup

Broker shall provide radio programs consisting of Spanish, English and/or Tejano music, information, news or entertainment programming deemed appropriate by Broker and satisfying the requirements of the Agreement.

Owner shall keep confidential all information provided by Broker with respect to Broker’s selection of a Format for the Station; provided, however, that Owner shall be entitled to provide such information to its directors, officers and attorneys, in each case, on a need to know basis and only after apprising such parties of the requirement to maintain the confidentiality of the information. Owner shall be responsible for the failure of such parties to maintain the confidentiality of such information in accordance with the foregoing.

Except as Owner and Broker may agree in writing, Owner and Broker shall keep confidential the execution and terms of this Agreement for a period of fifteen (15) days from the date of this Agreement or such longer period as the parties may agree upon in writing; provided, however, that each party shall be entitled to provide such information to its respective directors, officers, employees, lenders and attorneys (“Related Parties”), in each case, on a need to know basis. Each party shall be responsible for the failure of its respective Related Parties to maintain the confidentiality of such information in accordance with the first sentence of this paragraph.

A-1

EXHIBIT B

Payments

In consideration for the airtime supplied to Broker pursuant to this Agreement, Broker shall provide the following consideration to Owner.

A. Monthly Rates

In accordance with Section 2 of the Agreement, Broker shall make monthly payments of $113,000 per month.

B. Costs

Broker shall promptly reimburse Owner for any amounts paid by Owner which represents costs which Broker has agreed to assume pursuant to the Agreement. Owner shall provide Broker with customary documentation demonstrating Owner’s payment of such amounts.

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Exhibit C

KQQK Station Programming Policy

1. Broadcast Content and Technical Requirements. All programs delivered to El Dorado Communications, Inc. (“Owner”) for airplay shall be professional broadcast quality.

2. Regulations and Guidelines. All programming shall conform to all requirements under the Communications Act of 1934, as amended, all rules regulations and written policies of the FCC (the “FCC Rules”) and this KQQK Station Programming Policy. Broker agrees to cooperate with Owner in the broadcasting of programs meeting general industry standards and for this purpose to observe the following regulations in the preparation, writing and broadcasting of its programs.

2.1 Respectful of Faiths. The subject of religion and references to particular faiths, tenants, and customs shall be treated with respect at all times.

2.2 No Denominational Attacks. Programs shall not be used as a medium for attack on any faith, denomination, or sect, or upon any individual or organization.

2.3 Donation Solicitation. Requests for donations in the form of a specific amount, for example, $1.00 to $5.00, shall not be made if there is any suggestion that such donation will result in miracles, cures or prosperity. However, statements generally requesting donations to support the broadcast, church or other entity are permitted.

2.4 No Ministerial Solicitations. No invitations by the minister or other individual appearing on the program to have listeners come and visit him or her for consultation or the like shall be made if such invitation implies that the listeners will receive consideration, monetary gain, or cures for illness.

2.5 No Vending of Miracles. Any exhortation to listeners to bring money to a church affair or service is prohibited if the exhortation, affair, or service contains any suggestion that miracles, cures, or prosperity will result.

2.6 No Miracle Solicitation. Any invitations to listeners to meet at places other than the church and/or to attend other than regular services of the church is prohibited if the invitation, meeting, or service contains any claim that miracles, cures, or prosperity will result.

2.7 No Claims of Undocumented Miracles. Any claims of miracles or cures not documented in biblical scripture and quoted in context are prohibited; e.g., this prohibits the minister and/or other individual appearing on the program from personally claiming any cures or miracles and also prohibits the presentation of any testimonials regarding such claims either in person or in writing.

2.8 No Lotteries. Announcements giving any information about lotteries or games prohibited by federal or state law or regulation are prohibited.

2.9 No “Dream Books”. References to “dream books,” the “straight line,” or other direct or indirect descriptions or solicitations relative to the “numbers game,” or the “policy game,” or any other form of gambling are prohibited.

C-1

2.10 No Numbers Games. References to chapter and verse numbers, paragraph numbers, or song numbers, which involve three digits should be avoided and, when used, must relate to the overall theme of the program.

2.11 Required Announcements. Broker shall broadcast (i) an announcement at the beginning and end of each program, and hourly, as appropriate, to indicate that program time has been purchased by Broker, and (ii) any other announcement that may be required by law, regulation or Station policy.

2.12 No Illegal Announcements. No announcements or promotion prohibited by federal or state law or regulation of any lottery or game shall be made over the Station. All games, contests, or promotions shall comply with the FCC Rules and applicable laws.

2.13 Programming Prohibitions. Broker shall not broadcast any of the following programs or announcements:

A. False Claims. False or unwarranted claims for any product or service.

B. Unfair Imitation. Infringements of another advertiser’s rights through plagiarism or unfair imitation of either program idea or copy, or any other unfair competition.

C. Commercial Disparagement. Any disparagement of competitors or competitive goods.

D. Profanity. Any programs or announcements that are slanderous, defamatory, obscene, profane, indecent, vulgar, repulsive or offensive, either in theme or treatment. Depictions of violence should be minimized, and may not promote or espouse the use of such violence.

E. Price Disclosure. Any price mentions except as permitted by applicable law.

F. Descriptions of Bodily Functions. Any continuity which describes in a repellent manner internal bodily functions or symptomatic results of internal disturbances, and no reference to matters which are not considered acceptable topics in social groups.

G. Fraudulent or Misleading Advertisement. Any advertising matter, announcement or claim which Broker knows to be fraudulent, misleading or untrue.

H. Advertisements. All advertising and other paid or bartered announcements included in the program must meet sponsorship identification requirements. No advertisements for cigarettes or tobacco products may be presented.

Owner may waive any of the foregoing regulations in specific instances if, in its reasonable opinion, good broadcasting in the public interest will be served thereby.

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Exhibit D

Form of Payola Affidavit

City of                    )

County of                )                                  SS:

State of         )

I,                    , having first been duly sworn, hereby state that I have read and will comply with the provisions of Section 317 and 507 of the Communications Act of 1934, as amended, copies of which are attached hereto. I also have read and will comply with the provisions of the Commission’s Sponsorship Identification Rule (73.1212), a copy of which is attached hereto.

I also will comply with the policy of this Station, KQQK, which prohibits every employee having any voice in the selection of broadcast matter from accepting any loans or other consideration from persons seeking the airing of any broadcast matter in return thereof.

I understand that receiving or agreeing to receive anything of value from a third party for the broadcast of any program material over the Station is a crime, unless the agreed payment is disclosed to the Station before broadcast of the program material. This crime, commonly called “payola”, is punishable by one year in prison and a fine of up to $10,000.

During the past year, I have not been promised or paid anything of value directly or indirectly by a third party for the broadcast of any programming material over the Station.

Affiant

The foregoing instrument was acknowledged before me this         day of                , 2001 by                , who is personally known to me or who has produced                                 as identification.

Notary Public

My Commission expires:                        

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Exhibit E

Program Delivery Location

Broker, at its option, shall deliver its programming to Owner’s facility at 1980 Post Oak Boulevard, Houston, Texas 77056, the Liberty STL site or the Clear Channel tower.

E-1

EX-10.18

EXHIBIT 10.18

TIME BROKERAGE (LOCAL MARKETING) AGREEMENT

This Time Brokerage (Local Marketing) Agreement (“Agreement”), dated as of April 5, 2002, is made and entered into by and between El Dorado Communications, Inc., a California corporation (“Broker”), and Liberman Broadcasting of Houston, Inc., a California corporation (“Programmer”).

WHEREAS, Programmer is in the business of producing and transmitting radio broadcasting in the Houston, Texas market;

WHEREAS, Broker is party to that Time Brokerage (Local Marketing) Agreement dated as of August 1, 1995, as amended (the “LMA”) by and between Broker and Artlite Broadcasting Co., Inc., a Texas corporation (“Licensee” or “Company”), the licensee of KEYH(AM), Houston, Texas (“Station”);

WHEREAS, Programmer desires to provide programming to be transmitted on the Station pursuant to the provisions hereof and pursuant to the applicable regulations of the Federal Communications Commission (the “FCC”);

WHEREAS, Broker desires to grant Programmer, and Programmer wishes to obtain from Broker, Broker’s rights under the LMA to provide programming to be transmitted on the Station pursuant to the provisions hereof, subject to the terms of the LMA and pursuant to the applicable regulations of the FCC;

WHEREAS, Licensee has consented to Broker and Programmer entering into a time brokerage (local marketing) agreement with respect to the Station.

NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained, the Parties, intending to be legally bound, agree as follows:

1. Facilities.

(a) Except as described in Paragraph 1(b), 10 and 12, beginning on the Effective Day (as defined below) Broker agrees to broadcast on the Station, or cause to be broadcast, for the period permitted by the FCC, up to twenty-four (24) hours per day, seven (7) days per week, Programmer’s programs and advertisements (the “Programs”) as described in Attachment I hereto. The Effective Date shall be 12:01 a.m. on May 20, 2002 or such other date as may be mutually agreed upon in writing by the parties; provided, however, that Programmer’s obligations hereunder shall not commence unless Broker shall be in compliance with its obligations under the AM Asset Purchase Agreement with respect to this Agreement.

(b) Programmer acknowledges that Company has, as it acknowledged in Section 1(b) of the LMA, an obligation to broadcast public affairs type programs that meet the needs and interests of its service area. Programmer acknowledges that Company will maintain sole responsibility for the ascertainment of the needs of its community of license and surrounding area and for the production and/or acquisition of public affairs programming responsive to those needs. Programmer acknowledges that Company shall have the sole responsibility to decide the scheduling of those programs subject to the requirement that it consult with Broker as to the

scheduling thereof. Broker shall consult with Programmer prior to responding to Company with respect to such consultation and shall comply with Programmer’s reasonable directions with respect thereto. On a quarterly basis, Broker shall provide to Programmer the schedule provided to Broker from Company for the public affairs programs to be broadcast during that upcoming quarter.

(c) Broker will use its best efforts to enforce its rights under the LMA and will perform all of its obligations under the LMA and any other agreements relating to the station, in each case, at all times during the term hereof; provided, however, that Broker shall not be deemed to have violated this Section 1(c) if its inability to comply with its obligations under the LMA result from Programmer’s breach of its obligations hereunder. Broker shall take no action to terminate, or otherwise modify the expiration date of, the LMA prior to the termination of this Agreement.

2. Payments.

From and after the Effective Date, Programmer shall pay Broker the payments as set forth on Attachment II hereto. All payments shall be made in advance in equal monthly installments due no later than the first (1st) day of each calendar month during the term of this Agreement; provided, however, that on or before the Effective Date, Programmer shall have paid to Broker a prorated monthly payment for the month in which the Effective Date occurs as calculated based upon the number of days in such month falling on and after the Effective Date as a percentage of the total days in such month and multiplied by the monthly payment set forth on Attachment II hereto. The parties shall similarly prorate the amount due for the last month of this Agreement in the event that this Agreement is terminated other than on the last day of a calendar month with Broker refunding to Programmer the amount of such proration within five (5) business days or, if this Agreement terminates upon consummation of the transactions contemplated by the AM Asset Purchase Agreement, Broker shall, at its election, either credit such amount against the amounts due from Programmer to Broker on the KEYH Closing Date (as defined in the AM Asset Purchase Agreement) or refund such amount to Programmer on the KEYH Closing Date. All monthly payments shall be by check.

3. Term.

The term of this Agreement shall be for a period beginning on the date first above written and expiring upon the earlier of (x) the KEYH Closing Date (as defined in the AM Asset Purchase Agreement), (y) termination of the AM Asset Purchase Agreement or (z) the expiration of the LMA; provided, however, that, in the event that the term on this Agreement does not end on either (x) the KEYH Closing Date or (y) termination of the AM Asset Purchase Agreement, in the event that the term of the LMA is extended beyond January 31, 2004, Programmer shall have the right to terminate this Agreement at any time thereafter by giving notice to Broker, which notice shall specify an effective date which is not less than three months from the date on which the notice is given. Broker shall promptly give notice to Programmer of any extension of the LMA.

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4. Programs.

Programmer shall furnish or cause to be furnished the artistic personnel and material for the Programs as provided by this Agreement and all Programs shall be in good taste and in accordance with the FCC’s requirements; provided, however, that no Program shall be deemed to fail to be in good taste or not in accordance with the FCC’s requirements unless, in either case, it is so determined by Company pursuant to the LMA; provided, further, that at Programmer’s direction, Broker shall contest any such determination by Company. All advertising spots and promotional material or announcements shall comply with all applicable federal, state and local regulations and policies.

5. Competing Products.

Programmer will endeavor to maintain appropriate separations between commercials for competing advertisers or products.

6. Handling Of Public Comments.

Broker shall be advised promptly by Programmer after Programmer becomes aware of any written public or FCC complaint or written inquiry concerning programs provided by Programmer.

7. Programming And Operations Standards.

Programmer agrees to abide by the standards set forth in Attachment III in its programming and operations. Programmer further agrees that, if in the sole judgment of Company or its Station general manager, as conveyed to either Broker or Programmer, Programmer does not comply with said standards, Company may suspend or cancel any program not in compliance by exercising its rights under the LMA to suspend or cancel programs provided by Broker. If Company notifies Broker that it is suspending or canceling any of Programmer’s Programs, Broker shall give notice thereof to Programmer on the date such notice is received by Broker if Broker does not know with certainty that Programmer is already aware of such suspension or cancellation of such Programs.

8. Operational Expenses.

As Company is responsible pursuant to the LMA for paying all the costs of operating the Station, including but not limited to, the expenses of hiring employees to comply with applicable FCC requirements and utilities, insurance, and music licensing fees, the parties agree that Programmer will not be responsible for such costs; provided, however, that Programmer shall be required to pay for any utility expenses at Programmer’s studio to the extent that Company is not responsible for such expenses pursuant to the LMA and shall be required to pay for Programmer’s insurance to the extent that Company is not responsible for such expenses pursuant to the LMA. At Programmer’s request, Broker shall use its best efforts to cause Artlite to file new agreements with the music licensing organizations in order to reflect the change in the Station’s format. Programmer will be responsible for paying the costs of purchasing the Programs and for the expenses incurred in the sale of advertising time by Programmer. Broker will request from Company documentation adequate to demonstrate that

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Company is current in its payment to all of its creditors whose services are used in connection with the operation of the Station and will deliver such documentation to Programmer promptly after delivery by Company.

9. Sale Of Advertising Time.

Programmer is permitted to sell all advertising for Programs it provides to Company through the Broker and may sell such advertising in combination with the sale of advertising on any other stations owned or operated by Programmer and will retain all revenues from the sale of such advertising. Programmer acknowledges that Company is permitted to sell all advertising available on public affairs programs and will retain all revenues from the sale of such advertising. To the extent that Broker has received prepayment for advertising time for periods following the Effective Date, Broker shall disclose such prepayments to Programmer on or prior to the Effective Date and such prepayments shall be deducted from the amounts due to Broker pursuant to Section 2 of this Agreement. All information provided to Programmer prior to the Effective Date, pursuant to the terms of the AM Asset Purchase Agreement, shall accurately reflect all advertisements scheduled following the Effective Date. If advertisers whose advertisements air on the Station on or after the Effective Date make payments to Broker rather than to Programmer with respect to such advertisements, Broker shall hold such amounts in trust for Programmer, shall promptly notify Programmer of the receipt of such funds and shall forward such amounts to Programmer within five (5) business days. If advertisers whose advertisements aired on the Station prior to the Effective Date make payments to Programmer rather than to Broker with respect to such pre-Effective Date advertisements, Programmer shall hold such amounts in trust for Broker, shall promptly notify Broker of the receipt of such funds and shall forward such amounts to Broker within five (5) business days. If Broker fails to forward such amount to Programmer within five (5) business days, Programmer shall have the right to set such amounts off against the payments due under Section 2 hereunder with amounts subsequently paid by Broker being reimbursed by Programmer.

10. Operation Of Station.

Programmer acknowledges that notwithstanding anything in this Agreement to the contrary, Company shall have full authority and power over the operation of the Station during the period of this Agreement. Programmer acknowledges that Company retains control in its reasonable discretion over the policies, programming and operations of the Station, including without limitation, the right without penalty to decide whether to accept or reject any programming or advertisements, the right without penalty to preempt or delay or delete any programs which Company reasonably believes to be unsatisfactory, unsuitable or contrary to the public interest or in order to broadcast a program deemed by Company to be of greater national, regional, or local interest, and the right without penalty to take any other actions necessary for compliance with the laws of the United States, the State of Texas, and the rules, regulations and policies of the FCC.

11. Personnel.

Programmer shall employ and be responsible for the salaries, taxes, insurance and related costs for all of its personnel, including its personnel used in the production of its

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Programs and its personnel used in the sale of advertising time. Programmer acknowledges that Company pursuant to the LMA shall provide and pay for the general manager of the Station, who shall report to and be accountable solely to Company and who shall direct the day-to-day operation of the Station. Programmer acknowledges that Company pursuant to the LMA shall also employ such personnel as Company, in its sole discretion, deems necessary to be responsible for the public affairs programming broadcast on the Station, to comply with FCC rules and record keeping to ensure that the technical operations of the Station are consistent with the Station’s license and FCC rules and to provide managerial and staff support for the Station’s main studio. Programmer acknowledges that Company pursuant to the LMA shall be responsible for the salaries, taxes, insurance and related costs for all the Company’s or Broker’s personnel under their respective employ. At any time after the date first set forth above, Programmer shall have the right to hire Broker’s traffic manager (the “Traffic Manager”); provided, however, that, if Programmer hires the Traffic Manager during the period prior to the Effective Date, Programmer shall make the Traffic Manager available to Broker to continue to perform traffic functions for Broker prior to the Effective Date; provided, further, that Programmer shall incur no liability related to, and Broker hereby waives any claim against Programmer with respect to, the Traffic Manager’s performance of functions for Broker.

12. Special Events.

Programmer acknowledges that Company pursuant to the LMA reserves the right in its discretion, and without liability, to preempt, delay or delete any of the Programs provided by Broker and the Programmer in favor of other programming which, in Company’s judgment, is of greater local or national importance. In all such cases, Broker will use its best efforts to give Programmer reasonable notice once it learns of Company’s intention to preempt such broadcast or broadcasts, and in the event of such preemption, Programmer’s monthly payment shall be reduced as further described in Attachment II, Paragraph 2 hereto.

13. Station Facilities.

(a) Broker, through its rights under the LMA, its other arrangements with Licensee and its ownership or other rights in the equipment necessary for the operation of the Station, shall provide all facilities necessary for the operation of the Station’s transmission facilities, at no additional costs to Programmer, at all times during the term of this Agreement; provided, however, that (i) Programmer shall be entitled to provide its programming, at its election from time to time, either to the existing microwave facilities at 1980 Post Oak Boulevard or to the Station’s Towers (as defined in the AM Asset Purchase Agreement) by telephone or microwave or such other means as Programmer deems appropriate, or (ii) if Broker’s facilities at 1980 Post Oak Boulevard are no longer available to Broker, Broker shall, and shall use its best efforts to cause Company to, accommodate receipt of Programmer’s programming in a manner acceptable to Programmer, at Broker’s or Company’s expense. Broker shall be responsible for all related maintenance and upkeep costs.

(b) Throughout the term of this Agreement, Broker shall, or shall cause Company to, pursuant to its rights under the LMA and other agreements between Broker and Licensee or its affiliates, operate the Station with the maximum authorized facilities. To the full extent that Broker can control the timing thereof, any necessary maintenance work affecting the operation of

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the Station and resulting in a reduction of transmitter power to less than 90% of the licensed power corresponding to the mode that is the daypart in question shall be scheduled upon as much prior notice to the Broker as practicable. Payments by Programmer for pre-empted periods for ordinary course maintenance requiring preemption for a period of six or more hours shall be refunded as set forth in Attachment II, Paragraph 2 hereto.

(c) If the Station suffers loss or damage to its transmission facilities for any cause other than one governed by Section 13(d), which results in the decrease in the station’s operating power to less than 90% of the licensed power corresponding to the mode that is the daypart in question, Broker shall notify Programmer within two (2) hours and shall undertake or shall cause Company, pursuant to Broker’s rights under the LMA, to undertake such repairs as necessary to restore the operation of the Station within five (5) days from the occurrence of such loss or damage. If Broker and/or Company fails to return the Station to normal operations with such five (5) day period, Programmer will be entitled to decrease the payments called for in Section 2, for the period of reduced power, in proportion to the loss of power to less than 90% of the licensed power corresponding to the mode that is the daypart in question. If Broker and/or Company fails to accomplish that result within sixty (60) days, Programmer may terminate this Agreement upon ten (10) days notice to Broker. Alternatively, Programmer may, at its sole option, if requested by Company, make any such necessary repairs and offset the costs thereof from the next payment or payments due Broker under this Agreement or under its purchase commitments relative to the Station.

(d) Programmer acknowledges that failure or impairment of facilities or any delay or interruption in broadcasting Programs, or failure at any time to furnish facilities, in whole or in part, for broadcasting, due to acts of God, strikes or threats thereof of force majeure or due to causes beyond the control of Broker, shall not constitute a breach of this Agreement and Broker will not be liable to Programmer, except to the extent of allowing in each such case an appropriate payment credit for time or broadcasts not provided as further described in Attachment II, Paragraph 2 hereto. Programmer shall not be required to make payments to Broker for periods covered by the force majeure event.

14. Right To Use The Programs.

The right to use the Programs provided by Programmer, and to authorize their use in any manner whatsoever, shall be and remain vested in Programmer.

15. Payola.

Programmer agrees that Programmer will not accept any compensation of any kind or gift or gratuity of any kind whatsoever, regardless of its value or form, including, but not limited to, a commission, discount, bonus, materials, supplies or other merchandise, services or labor, whether or not pursuant to written contracts or agreements between Programmer and merchants or advertisers, unless the payer is identified in the programs as having paid for or furnished such consideration in accordance with FCC requirements. Upon request from Broker, Programmer agrees annually to execute and provide Company with a Payola Affidavit, substantially in the form which is provided as Attachment IV hereto.

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16. Compliance With Law.

(a) Programmer agrees that throughout the term of this Agreement Programmer will comply with all laws and regulations applicable in the conduct of Company’s business. Broker will comply with all applicable FCC rules, regulations and policies including, but not limited to, political advertisements, sponsorship identification, lottery and contests rules, and other local, state and federal laws, rules and regulations; provided, however, that Broker shall not be deemed to have violated this obligation if its inability to comply with this obligation result from Programmer’s breach of any such rules and regulations in the performance of its rights and obligations hereunder. Broker and Programmer may, and will permit Company to, file this Agreement with the FCC, if required to do so under the FCC rules or policies and Broker and Programmer may, and will permit Company to, place a copy of this Agreement in the public file for their respective stations, if required by FCC rules.

(b) If the FCC files, indicates intention to file, issues, or indicates its intention to issue an Order to Show Cause, Notice of Apparent Liability or commences or indicates its intention to commence an action against or an investigation of the Company, Broker will provide notice to Programmer promptly upon its being notified by Company of the same. Programmer will cooperate with the Broker and the Company in taking all reasonable actions to obtain removal or rescission of such action, notice, order or investigation.

(c) For purposes of Section 73.3555, Note 2(k)(3) of the FCC rules, Broker certifies that the LMA complies with the provisions of Section 73.3555(a), 73.3555(c) and 73.3555(d) of the FCC rules and Programmer certifies that this Agreement complies with the provisions of Section 73.3555(a), 73.3555(c) and 73.3555(d) of the FCC rules. Broker and Programmer note that Licensee has certified, in connection with the LMA, that it maintains ultimate control over the station’s facilities, including specifically control over station finances, personnel and programming.

17. Indemnification.

(a) Scope. Each party shall forever protect, save, defend and keep the other party harmless and indemnify said other party against and from any and all claims, demands, losses, costs, damages, suits, judgments, penalties, expenses and liabilities of any kind or nature whatsoever arising directly or indirectly out of acts, omissions, negligence or willful misconduct of the said party, its employees or agents in connection with the performance of this Agreement. However, Programmer shall not be liable for nor responsible to indemnify Broker or the Company for the following: (1) damages arising out of mistakes, omissions, interruptions, delays, errors or defects in transmissions caused by the negligence or acts or omissions of Company or the Broker or its employees, contractors or agents; (2) damages arising out of the failure of equipment not provided by Programmer or not under its control; or (3) damages caused by acts of God, sabotage, vandalism, or negligence or acts or omissions of any third party.

(b) Procedure. Where indemnification is sought by a party (the “Claiming Party”), (a) it shall notify the other party (the “Indemnifying Party”) promptly of any claim to which the indemnification relates; (b) upon the Indemnifying Party’s written acknowledgement of its obligation to indemnify in such instance, in form and substance satisfactory to the Claiming

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Party, the Claiming Party shall afford the Indemnifying Party the opportunity to participate in and, at the option of the Indemnifying Party, control, compromise, settle, defend or otherwise resolve the claim or litigation (and the Claiming Party shall not effect any such compromise or settlement without prior written consent of the Indemnifying Party); and (c) the Claiming Party shall cooperate with the reasonable requests of the Indemnifying Party in its above-described participation in any compromise, settlement, defense or resolution or litigation.

18. Events of Default.

The following shall, after the expiration of the applicable cure periods, constitute Events of Default under the Agreement:

(a) Non-Payment. Programmer’s failure to timely pay the consideration provided for in Paragraph 2 hereto, where such failure continues beyond the expiration of the cure period set forth in Section 18(d) below.

(b) Default In Covenants. Programmer or Broker shall default in the observance or performance of any material covenant, condition or agreement contained herein, where such default continues beyond the expiration of the cure period set forth in Section 18.4 below.

(c) Breach of Representation. Any representation or warranty herein made by Programmer or Broker, or in any certificate or document furnished to Programmer or Broker pursuant to the provisions hereof, shall prove to have been false or misleading in any material respect as of the time made or furnished.

(d) Cure Periods. An Event of Default other than a regularly scheduled payment due by Programmer to Broker, shall not be deemed to have occurred until thirty (30) business days after the non-defaulting party has provided the defaulting party with written notice specifying the event or events that if not cured would constitute an Event of Default and specifying the actions necessary to cure within such period. An Event of Default that involves a failure to make a regularly scheduled payment by Programmer to Broker, shall not be deemed to have occurred until ten (10) business days after the non-defaulting party has provided the defaulting party with written notice specifying the event or events that if not cured would constitute an Event of Default and specifying the actions necessary to cure within such period. This period may be extended for a reasonable period of time if the defaulting party is acting in good faith to cure and such delay is not materially adverse to the non-defaulting party.

19. Termination.

(a) Default. Either party may terminate if the other party has caused an Event of Default to occur.

(b) FCC Prohibitions. Either party may terminate this Agreement if the FCC determines that the Agreement is not consistent with Broker’s obligations as a party to the LMA or Company’s obligations as licensee of the Station and the parties cannot reform the Agreement to satisfy the FCC’s concerns. Notwithstanding the foregoing, the parties agree to make good faith efforts to reform this Agreement under such circumstances. The party that causes the

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problem shall be responsible for the damages of the other. Any disputes under this clause shall be submitted to binding arbitration as provided herein.

(c) Obligations Upon Termination. In the event of termination, Programmer shall pay to the Broker any fees due but unpaid as of the date of termination unless prohibited by the FCC, and Broker shall reasonably cooperate with Programmer to the extent permitted to enable Programmer to fulfill advertising or other programming contracts then outstanding, in which event Broker shall receive as compensation for the carriage of such advertising or programming that which otherwise would have been paid to Programmer thereunder.

20. Representations; Warranties; And Certain Covenants

The parties hereto make the following representations, warranties and covenants to the other, as applicable:

(a) Organization and Authority. Broker is legally qualified, empowered, and able to carry out all of the transactions contemplated hereby under the LMA or other agreements governing its rights to the Station. Programmer has the authority to transmit the Programs listed on Attachment I hereto to the Broker and Programmer is legally qualified, empowered, and able to carry out all of the transactions contemplated hereby. All corporate actions necessary to be taken by or on the part of Broker and Programmer in connection with the transactions contemplated by this Agreement have been duly and validly taken, and this Agreement has been duly and validly authorized, executed, and delivered by Broker and Programmer and constitutes the legal, valid and binding obligation of Broker and Programmer, enforceable in accordance with and subject to its terms.

(b) Compliance with Law. Broker will comply with all the terms of the LMA or other agreements governing its right to the Station. Except as otherwise stated herein, no consent, approval, or authorization by or filing with any governmental authorities on the part of Programmer or Broker is required prior to undertaking the transactions contemplated herein. None of the attendant contracts and undertakings, nor the carrying out of any of the provisions of this Agreement, will result in any violation of or be in conflict with any judgment, decree, order, statute, rule or regulation of any governmental authority applicable to Programmer or Broker. Broker has obtained Company’s written consent to Programmer and Broker entering into a time brokerage (local marketing) agreement with respect to the Station.

(c) EAS Facilities. Broker will further use its rights under the LMA to maintain, or have Company maintain, at Company’s expense a dial-up remote control device which satisfies FCC requirements for remote control operation and which is capable of controlling all the Station’s EAS functions.

(d) Litigation and Claims. No litigation, proceeding, complaint, investigation or controversy is pending by or before any court or regulatory agency or to the knowledge of parties is threatened that is material to this transaction, and there is no basis known to either party for any such litigation, proceeding, controversy or claim.

(e) Music Licenses. Broker will use its rights under the LMA to cause Company to secure and maintain all music licenses from performers’ rights organizations, including, but

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not limited to, ASCAP, BMI, and SESAC, that are necessary for the legal operation of the Station and to maintain such licenses in good standing. To the extent Broker must pay under the LMA, during the term of the Agreement Programmer agrees to pay for all music licenses in connection with the operation of the Station under the LMA.

(f) Compliance with LMA; Other Agreements. The performance by Programmer of its obligations hereunder in accordance with the terms hereof would not cause Broker to violate either the LMA or the terms of any other agreement between Broker and any third party, including Company, with respect to the Station.

21. Modification and Waiver.

No modification or waiver of any provision of this Agreement shall in any event be effected unless the same shall be in writing, and then such waiver and consent shall be effective only in the specific instance and for the purpose for which given.

22. No Waiver; Remedies Cumulative.

No failure or delay on the part of Programmer or Broker 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 Programmer and Broker herein provided are cumulative and are not exclusive of any right or remedies which each may otherwise have.

23. Construction.

This Agreement shall be construed in accordance with the laws of the State of Texas and the obligations of the parties hereto are subject to all federal, state or municipal laws or regulations now or hereafter in force and the regulations of the FCC and all other governmental bodies or authorities presently or hereafter to be constituted. To the extent of conflict between the terms hereof and the terms of the LMA, the terms of this Agreement shall govern to the extent that no breach of Broker’s obligations under the LMA results therefrom. In the event that a conflict between the terms of this Agreement and the LMA would result in a breach of the LMA, the parties shall attempt to effectuate the terms of this Agreement in a manner which permits Broker to fulfill its obligations under this Agreement to the full extent possible without causing a breach of the LMA.

24. Headings.

The headings contained in this Agreement and in the Attachments hereto are included for convenience only and no such heading shall in any way alter the meaning of any provision.

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25. Successors and Assigns.

(a) This Agreement shall be binding upon and inure to the benefit of the parties hereto, and their respective representatives, successors and assigns, but may not be assigned without the consent of the non-assigning party.

(b) Programmer may retain such agents or independent contractors as it deems necessary to assist in the performance of its duties under this Agreement; and such agents and independent contractors will be supervised by and report to Programmer, provided that such agents shall be subject to the ultimate supervision and control of the Company to the extent they perform functions that otherwise would be subject to the ultimate supervision and control of the Company under the LMA if performed by Broker or its agents and independent contractors.

26. Counterpart Signature.

This Agreement may be signed in one or more counterparts, each of which shall be deemed a duplicate original, binding on the parties hereto notwithstanding that the parties are not signatory to the original or the same counterpart.

27. Notices.

Any notice required hereunder shall be in writing and any payment, notice or other communications shall be deemed given when delivered personally, or mailed by certified mail with return receipt requested or by Federal Express, postage prepaid, and addressed as follows:

If to Broker:

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:

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

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If to Programmer:

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

28. Entire Agreement.

This Agreement embodies the entire agreement between the parties and there are no other agreements, representations, warranties, or understandings, oral or written, between them with respect to the subject matter thereof. No alteration, modification or change of this Agreement shall be valid unless by like written instrument.

29. Savings Clause.

If any provision of this Agreement is held to be illegal, invalid or unenforceable, such provision shall be fully severable, and in lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as a part of this Agreement a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable. This Agreement shall then be construed and enforced as so modified.

30. No Partnership Or Joint Venture Created.

Nothing in this Agreement shall be construed to make Programmer and Broker partners or joint venturers of the other. Neither party hereto shall have the right to bind the other to transact any business in the other’s name or on its behalf, in any form or manner or to make any promises or representations on behalf of the other.

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31. Specific Performance.

Broker acknowledges and agrees that a breach of any of its obligations contained in this Agreement will cause irreparable injury to Programmer, and that Programmer has no adequate remedy at law in respect of such breach, and therefore agrees that the obligations of Broker shall be specifically enforceable against Broker.

32. Arbitration.

Any disputes arising under this Agreement or any of the agreements contemplated herein and out of the relationship among the parties, will be submitted to binding arbitration in the manner specified in Section 11.6 of the AM Asset Purchase Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

Dated: April 5, 2002	EL DORADO COMMUNICATIONS, INC.
	By:	/s/    ROEL C. CAMPOS

Dated: April 5, 2002	LIBERMAN BROADCASTING OF HOUSTON, INC.
	By:	/s/    LENARD D. LIBERMAN

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TIME BROKERAGE (LOCAL MARKETING) AGREEMENT

ATTACHMENT I

PROGRAMMING

Programmer shall provide radio programs consisting of broadcasts deemed appropriate by Programmer, and regarding which Broker shall consult with Company pursuant to the LMA. Such radio programs are contemplated to be in Spanish, English or Tejano. Programmer shall continue to use the name “La Ranchera” on KEYH(AM) in a manner similar to its prior use by Broker.

Broker shall keep confidential all information provided by Programmer with respect to Programmer’s selection of a format for the Station; provided, however, that Broker shall be permitted to disclose such plans to Company to the extent that Broker is required to consult with Company regarding the format of the Station pursuant to the LMA; provided, further, that Broker shall be entitled to provide such information to its directors, officers and attorneys, in each case, on a need to know basis and only after apprising such parties of the requirement to maintain the confidentiality of the information. Broker shall be responsible for the failure of such parties, other than Company, to maintain the confidentiality of such information in accordance with the first sentence of this paragraph. Broker shall use its best efforts to cause Company to maintain the confidentiality of information provided by Broker to Company pursuant to the consultation requirement referenced above.

Except as Broker and Programmer may agree in writing, Broker and Programmer shall keep confidential the execution and terms of this Agreement for a period of fifteen (15) days from the date of this Agreement or such longer period as the parties may agree upon in writing; provided, however, that each party shall be entitled to provide such information to its respective directors, officers, employees, lenders and attorneys (“Related Parties”), in each case, on a need to know basis. Each party shall be responsible for the failure of its respective Related Parties to maintain the confidentiality of such information in accordance with the first sentence of this paragraph.

TIME BROKERAGE (LOCAL MARKETING) AGREEMENT

ATTACHMENT II

PAYMENTS FROM PROGRAMMER

1. Monthly Payment.

The monthly payment for the duration of the Agreement shall be $37,000.

2. Preemption Rate.

Any preemption except those permitted pursuant to Section 1(b), 10 and 12 of the Agreement, will reduce the monthly amount due by the larger of either (i) loss of broadcast revenue to the Programmer from the preemption; or (ii) the monthly payment divided by the monthly number of broadcast hours, times the number of hours preempted.

TIME BROKERAGE (LOCAL MARKETING) AGREEMENT

ATTACHMENT III

PROGRAMMING STANDARDS

Programmer agrees to cooperate with Broker in the broadcasting of programs of the highest possible standard of excellence and for this purpose to observe the following regulations in the preparation, writing and broadcasting of its programs.

I. Respectful of Faiths.

The subject of religion and references to particular faiths, tenets, and customs shall be treated with respect at all times.

II. No Denominational Attacks.

Programs shall not be used as a medium for attack on any faith, denomination, or sect or upon any individual or organization.

III. Controversial Issues.

Any discussion of controversial issues of public importance shall be reasonably balanced with the presentation of contrasting viewpoints in the course of overall programming; no attacks on the honesty, integrity, or like personal qualities of any person or group of persons shall be made during discussion of controversial issues of public importance; and during the course of political campaigns, programs are not to be used as a forum for editorializing about individual candidates. If such events occur, Company may require that responsive programming be aired.

IV. Donation Solicitation.

Requests for donations in the form of a specific amount, for example, $1.00 to $5.00, shall not be made if there is any suggestion that such donation will result in miracles, cures or prosperity. However, statements generally requesting donations to support the broadcast or church are permitted.

V. [Reserved.]

VI. No Ministerial Solicitations.

No invitations by the minister or other individual appearing on the program to have listeners come and visit him or her for consultation or the like shall be made if such invitation implies that the listeners will receive consideration, monetary gain, or cures for illness.

VII. No Vending of Miracles.

Any exhortation to listeners to bring money to a church affair or service is prohibited if the exhortation, affair, or service contains any suggestion that miracles, cures, or prosperity will result.

VIII. Sale of Religious Artifacts.

The offering for sale of religious artifacts or other items for which listeners would send money is prohibited unless such items are readily available in ordinary commerce or are clearly being sold for legitimate fund-raising purposes.

IX. No Miracle Solicitation.

Any invitations to listeners to meet at places other than the church and/or to attend other than regular services of the church is prohibited if the invitation, meeting, or service contains any claims that miracles, cures, or prosperity will result.

X. No Claims of Undocumented Miracles.

Any claims of miracles or cures not documented in biblical scripture and quoted in context are prohibited; e.g., this prohibits the minister and/or other individual appearing on the program from personally claiming any cures or miracles and also prohibits the presentation of any testimonials regarding such claims either in person or in writing.

XI. No Plugola or Payola.

The mention of any business activity or “plug” for any commercial, professional, or other related endeavor, except where contained in an actual commercial message of a sponsor, is prohibited.

XII. No Lotteries.

Announcements giving any information about lotteries or games prohibited by federal or state law or regulation are prohibited. This prohibition includes announcements with respect to bingo parties and the like which are to be held by a local church, if such announcements are prohibited under Texas or Federal law.

XIII. No “Dream Books”.

References to “dream books,” the “straight line,” or other or indirect descriptions or solicitations relative to the “numbers game,” or the “policy game,” or any other form of gambling are prohibited.

XIV. No Numbers Games.

References to chapter and verse numbers, paragraph numbers, or song numbers, which involve three digits should be avoided and, when used, must relate to the overall theme of the program.

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XV. Election Procedures.

Any qualified political candidate will have access to the Station at the rate prescribed by Company consistent with the Communications Act and the rules, regulations, and policies of the FCC. Programmer shall consult with Broker and Company as necessary to insure compliance with regulations as to political advertising rates.

XVI. Required Announcements.

Programmer shall broadcast (i) an announcement in a form satisfactory to Company at the beginning of each hour to identify the Station, (ii) an announcement, if required by the rules or policies of the Federal Communications Commission to indicate that program time has been purchased by Programmer, and (iii) any other announcement that may be required by law, regulation, or Station policy.

XVII. Credit Terms Advertising.

Pursuant to rules of the Federal Trade Commission, no advertising of credit terms shall be made over the Station beyond mention of the fact that, if desired, credit terms are available.

XVIII. Commercial Record Keeping.

Programmer shall not receive any consideration in money, goods, services, or otherwise, directly or indirectly (including to relatives) from any person or company for the presentation of any programming over the Station without reporting the same in advance to and receiving the prior written consent of Company’s general manager. No commercial messages (“plugs”) or undue references shall be made in programming presented over the Station to any business venture, profit making activity, or other interest (other than noncommercial announcements for bonafide charities, church activities, or other public service activities) in which Programmer (or anyone else) is directly or indirectly interested without the same having been approved in advance by Company’s general manager and such broadcast being announced and logged and sponsored.

XIX. No Illegal Announcements.

No announcements or promotion prohibited by federal or state law or regulation of any lottery or game shall be made over the Station. Any game, contest, or promotion relating to or to be presented over the Station must be fully stated and explained in advance to Company, which reserves the right in its sole discretion to reject any game, contest or promotion.

XX. Licensee Discretion Paramount.

In accordance with the licensee’s responsibility under the Communications Act of 1934, as amended, and the Rules and Regulations of the Federal Communications Commission, Programmer acknowledges that under the LMA the Company reserves the right to reject or terminate any advertising proposed to be presented or being presented over the Station which is

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in conflict with Station policy or which in Company’s or its general manager’s sole judgment would not serve the public interest.

XXI. Programming Prohibitions.

Programmer shall not knowingly broadcast any of the following programs or announcements.

A. False Claims. False or unwarranted claims for any product or service.

B. Unfair Imitation. Infringements of another advertiser’s rights through plagiarism or unfair imitation of either program idea or copy, or any other unfair competition.

C. Profanity. Any programs or announcements that are slanderous, obscene, profane, vulgar, repulsive or offensive, either in theme or treatment.

D. Unauthenticated Testimonials. Any testimonials which cannot be authenticated.

E. Descriptions of Bodily Functions. Any statement which describes in a repellant manner internal bodily functions and no reference to matters which are not considered acceptable topics in social groups.

F. Conflict Advertising. Any advertising matter or announcement which may, in the reasonable judgment of Company, be injurious or prejudicial to the interests of the public or the Station.

In any case where questions of policy or interpretation arise, Programmer should submit the same to Company for decision before making any commitments in connection therewith.

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TIME BROKERAGE (LOCAL MARKETING) AGREEMENT

ATTACHMENT IV

AFFIDAVIT RE PAYOLA

State of                                                              )

                                                                           ) ss.

County of                                                          )

ANTI-PAYOLA/PLUGOLA AFFIDAVIT

                                                         , being duly sworn, deposes and says as follows:

1. He                                          is for LBI Broadcasting of Houston, Inc.

(position)

(“Programmer”)

2. No matter has been broadcast by station KEYH-AM (“Station”) for which service, money or other valuable consideration has been directly or indirectly paid, or promised to, or charged, or accepted, by me from any person, which matter at the time so broadcast has not been announced or otherwise indicated as paid for or furnished by such person.

3. So far as I am aware, no matter has been provided for broadcast by Station for which service, money, or other valuable consideration has been directly or indirectly paid, or promised to, or charged, or accepted by Station or by any independent contractor engaged by the Programmer in furnishing programs, from any person, which matter at the time so broadcast has not been announced or otherwise indicated as paid for or furnished by such person.

4. In the future, I will not pay, promise to pay, request, or receive any service, money, or any other valuable consideration, direct or indirect, from a third party, in exchange for the influencing of, or the attempt to influence, the preparation or presentation of broadcast matter on Station.

5. Nothing contained herein is intended to, or shall, prohibit acceptance or receipt of anything with the express knowledge and approval of Company, but henceforth any such approval must be given in writing by someone expressly authorized to give such approval.

6. Except as reflected in Paragraph 7, neither myself, nor my spouse or our immediate families have any present direct or indirect ownership interest in any entity engaged in the following business or activities (other than an investment in a corporation whose stock is publicly held), serves as an officer or director of, whether with or without compensation, or serves as an employee of, any person, firm or corporation engaged in:

a. The publishing of music;

b. The production, distribution (including wholesale and retail sales outlet), manufacture or exploitation of music, films, tapes, recordings or electrical transcriptions of any program material intended for radio broadcast use;

c. The exploitation, promotion, or management of persons rendering artistic, production and/or other services in the entertainment field;

d. The ownership or operation of one or more radio or television stations;

e. The wholesale or retail sale of records intended for public purchase;

f. Advertising on the Station, or any other station owned by its licensee (excluding nominal stockholdings in publicly owned companies).

7. The facts and circumstances relation to such interests are as follows: Shareholder, officer and director of Programmer, licensee of stations              (AM), and              (FM).

Affiant            

Subscribed and sworn to before me

this              day of             , 20            .

Notary Public

My Commission Expires:

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EX-10.19

Exhibit 10.19

TIME BROKERAGE AGREEMENT FOR KVNR

THIS TIME BROKERAGE AGREEMENT (this “Agreement”) is entered into as of August 4, 2002 by and between Liberman Broadcasting, Inc., a California corporation (the “Owner”) which is the owner and operator of KVNR, Santa Ana, California, licensed to its wholly owned subsidiary, LBI Radio License Corp., and Little Saigon Radio, a California corporation (the “Programmer”).

SECTION I.

LEASE OF STATION AIR TIME

1.1    Representations.    Both Owner and Programmer represent that they are legally qualified, empowered and able to enter into this Agreement.

1.2    Term.    Subject to the termination provisions of Section 6, the term of this Agreement shall be the Initial Term and the Renewal Term, if any (collectively, the “Term”). The initial term of this Agreement shall commence on the date first written above and shall extend through August 3, 2007 (the “Initial Term”). Unless this Agreement shall have been earlier terminated or either party shall have notified the other party hereto, on or before February 3, 2007, of such party’s intent to terminate this Agreement upon the expiration of the Initial Term, this Agreement shall, without any further act by either party, continue for an additional period of five years to commence August 4, 2007 and extend through August 3, 2012 (the “Renewal Term”).

1.3    Scope.

1.3.1    During the Term of this Agreement, and subject to Owner’s reasonable prior approval, Programmer shall provide programming for broadcast on KVNR, Santa Ana, California (formerly KWIZ(AM); the “Station”) of its selection, complete with commercial matter, news, public service announcements and other suitable programming to Owner, for the following days and times each week, for the consideration described below (the “Programmer Broadcast Period”):

Sunday and Monday, from 12:00 AM to 5:59:59 AM

Sunday, from 7:00 PM to 11:59:59 PM

Owner shall make such time available to Programmer on the Station, and Programmer shall deliver programming at its expense to the Station’s transmitter facilities or other authorized remote control points as reasonably designated by Owner. Programmer shall have the right to change the programming it supplies to Owner and shall, to the extent feasible, give Owner at least twenty-four hours notice of substantial and material changes in such programming.

1.4    Consideration.

1.4.1    Programmer acknowledges that the rates in effect as of the date hereof are as set forth in Schedule II to this Agreement.

1.4.2    Effective August 4, 2003, the amounts set forth in Section 1.4.1 shall be automatically increased, without any further action of the parties, by an amount equivalent to the greater of (A) the increase in the Consumer Price Index for the relevant year, rounded upward to the next highest whole number or (B) seven-and-one-half percent (7.5%). An increase in accordance with the formula set forth in the preceding sentence shall occur on each subsequent January 1 of the Term. Subject to the provisions of this Agreement, as consideration for the air time made available, Programmer will pay to Owner such amounts as results from the increase set forth in the first sentence of this Section 1.4.2, to be billed twice each month on the basis of the standard broadcast month, each such payment to be made two weeks in advance, due no later than the 1st and 15th day of the preceding calendar month.

1.4.3    Any payment provided for in Section 1.4.2 not made within five calendar days after the due date thereof shall (i) entitle Owner to terminate this contract without notice, notwithstanding Section 6 of this Agreement, or (ii) be subject to a late charge of ten (10.0%) of the total amount due, at Owner’s sole discretion.

1.5    Credit of Payments for Lost Air Time.    If, for any reason, other than the actions of Programmer, the Station suffers a loss of broadcast service for any period of six (6) consecutive hours during any Programmer Broadcast Period (the “Initial Period”) and if such loss continues thereafter for any subsequent Programmer Broadcast Period consecutive to the Initial Period, then, to the extent that such loss during each such subsequent Programmer Broadcast Period causes Programmer to lose scheduled air time pursuant to Section 1.3.1, Owner shall credit Programmer the amount of money which Programmer paid for such air time so lost by Programmer in each subsequent consecutive Programmer Broadcast Period (but not for air time lost during the Initial Period) in accordance with the rates set forth in Section 1.4. Such credit shall be Owner’s sole compensation to Programmer for air time so lost. Owner shall have no other liability to Programmer or any third party pursuant to the terms of this Section.

1.6    Owner Authority for Operation of the Station.    Notwithstanding any other provision of this Agreement, Owner certifies, and Programmer recognizes, that Owner will have ultimate authority, power and control over the operations of the Station at all times during the Term of this Agreement, including operations with respect to the Station’s finances, personnel, and programming. Programmer recognizes that Owner has certain obligations to operate the Station in the public interest, and to broadcast programming to meet the needs and interests of its community of license. The parties agree that Owner’s authority includes but is not limited to the right to reject or refuse such portions of the Programmer’s programming which Owner believes, in its sole discretion, to be contrary to the public interest, the Communications Act of 1934, as amended (the “Act”), the FCC Rules, any other applicable law or the Policy Statement (as defined in Section 3.1). Upon written notice to Programmer (to the extent time permits such notice), Owner may suspend or cancel such program, commercial announcement or promotional material or any portion thereof and substitute its own programming or require Programmer to provide suitable programming, commercial announcement or other

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announcement or promotional material including, without limitation, any retractions in the event Owner determines that slanderous or defamatory material may have been broadcast and such retractions are appropriate, as determined in the sole discretion of Owner, and without: (i) creating any liability to Programmer or any other third party on the part of Owner or (ii) limiting Owner’s indemnification rights pursuant to Section 4.1, or any of its other rights pursuant to Section 3.1 or any other applicable provision of this Agreement. Nothing in this Agreement shall abrogate Owner’s unrestricted authority to discharge its obligations to the public and to comply with the Act and the FCC Rules.

1.7    Programmer Responsibility.    Programmer shall be solely responsible for all expenses attributable to its programming on the Station, including but not limited to any expenses incurred in the origination and/or delivery of programming from any remote location and for any publicity or promotional expenses incurred by Programmer, including, without limitation, ASCAP, BMI and SESAC music license fees for all programming provided by Programmer. Such payments by Programmer shall be in addition to any other payments to be made by Programmer under this Agreement.

1.8    Third-Party Contracts; Resale.    Programmer will enter into no third-party contracts, leases or agreements which will bind Owner in any way except with Owner’s prior written approval. Programmer agrees that it will not resell or otherwise transfer all or any portion of the air time it is purchasing under this Agreement without the express prior written consent of Owner; provided, however, that the foregoing shall not be construed to prohibit Programmer from selling air time to third parties for advertising that is in compliance with the terms of this Agreement. Any such sale or transfer without such prior written consent shall be void and of no force or effect. Owner will enter into no third-party contracts, leases or agreements which will bind Programmer in any way except with Programmer’s prior written approval.

1.9    Use of the Station’s Studio.    Subject to Owner’s own programming needs and its discretion, Owner agrees to provide Programmer with access to the Station’s facilities including the Station studio and broadcast equipment for use by Programmer, if it so desires, but Programmer shall use such studio and equipment only for the purpose of producing programming for the Station.

1.10    Programmer’s Access to Transmission System.    Programmer agrees that it shall, by means of an access code assigned by Owner to Programmer, commence and terminate transmission of its programming in strict accordance with the authorized times specified above in Section 1.3.1. Programmer further understands and agrees that its failure to abide strictly by such time limits shall constitute a material breach of this Agreement and shall entitle Owner to terminate this Agreement immediately, effective within 24 hours of notice by Owner to Programmer of such termination, notwithstanding the provisions of Section 6.

SECTION II.

STATION OBLIGATIONS

2.1    Additional Owner Obligations.

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2.2.1.    Although both parties shall cooperate in the broadcast of emergency information over the Station, Owner shall also retain the right to interrupt Programmer’s programming in case of an emergency or for programming which, in the good faith judgment of Owner, is of greater local or national public importance.

2.2.2    Owner shall also coordinate with Programmer the Station’s hourly station identification and any other announcements required to be aired by the FCC Rules.

2.2    Programmer’s Responsibility for Employees and Expenses.    Programmer shall employ and be solely responsible for the salaries, taxes, insurance and related costs for all personnel used in Programmer’s sale of commercial advertising time and the production of Programmer’s programming (including salespeople, traffic personnel, board operators and programming staff). Whenever on the Station’s premises, all employees of Programmer shall be subject to the overall supervision of Owner’s General Manager.

SECTION III.

STATION PROGRAMMING POLICIES

3.1    Broadcast Station Programming Policy Statement.    Owner has adopted a Broadcast Station Programming Policy Statement (the “Policy Statement”), a copy of which is attached as Schedule I and which may be amended from time to time by Owner upon notice to Programmer. Programmer agrees and covenants to comply in all material respects with the Policy Statement, with the Act and all FCC Rules, and with all changes subsequently made by Owner or the FCC. Programmer shall furnish or cause to be furnished the artistic personnel and material for the programs as provided by this Agreement and all programs shall be prepared and presented in conformity with the Act, the FCC Rules and with the Policy Statement. All advertising spots and promotional material or announcements shall comply with the Act, the FCC Rules, and all other applicable federal, state and local regulations and policies and the Policy Statement, and shall be produced in accordance with quality standards established by Programmer. If Owner in its sole discretion determines that a program, commercial announcement or promotional material, or any portion thereof, supplied by Programmer is contrary to the public interest, or does not comply with the Policy Statement, the Act or the FCC Rules, it may act pursuant to Section 1.6. The submission by Programmer of any programming, announcement, advertising or other matter that is slanderous, defamatory, obscene or indecent and therefore in violation of the Policy Statement, or that is otherwise in violation of the Policy Statement, shall constitute a material breach of this Agreement, and shall entitle Owner, at its sole discretion, to terminate this Agreement immediately, effective within 24 hours of notice by Owner to Programmer of such termination, notwithstanding the provisions of Section 6.

3.2    Programmer Compliance with Copyright Act.    Programmer represents and warrants to Owner that Programmer has full authority to broadcast its programming on the Station, and that Programmer shall not broadcast any material in violation of the Copyright Act. All music supplied by Programmer shall be (i) licensed by ASCAP, SESAC or BMI, (ii) in the public domain, or (iii) cleared at the source by Programmer. The right to use the programming and to authorize its use in any manner shall be and remain vested in Programmer. Programmer shall pay any copyright fees relating to its programming broadcast on the Station, including music license fees payable to ASCAP, SESAC or BMI, and any fees for any other necessary

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music performance rights. The amounts of any such fees referenced in the immediately preceding sentence and payable by Programmer shall in each case be determined by Owner in its sole discretion.

3.3    Plugola/Payola.    Programmer agrees that it will comply with the Policy Statement regarding the prohibition against plugola and payola in accordance with the Act and FCC requirements.

SECTION IV.

INDEMNIFICATION

4.1    Programmer’s Indemnification.    Programmer shall indemnify and hold harmless Owner from and against any and all claims, losses, costs, liabilities, damages, expenses, including any FCC fine or forfeitures (including reasonable legal fees and other expenses incidental thereto) of every kind, nature and description, including but not limited to, slander or defamation arising out of Programmer’s broadcasts, sale of advertising time and related conduct in connection with this Agreement and the actions and conduct of Programmer’s principals, employees, agents and representatives acting in connection with this Agreement (except insofar as such liability arises from Owner’s willful misconduct) to the extent permitted by law.

SECTION V.

ACCESS TO PROGRAMMER MATERIALS AND CORRESPONDENCE

5.1    Correspondence and Complaints.    Programmer shall promptly provide Owner with copies of all correspondence and complaints received from the public (including any telephone logs of complaints called in), copies of all program logs and promotional materials.

SECTION VI.

TERMINATION AND REMEDIES UPON DEFAULT

6.1    Right of Termination.    In addition to other remedies available at law or equity, and subject to the requirements of Section 6.2, this Agreement may be terminated as set forth below by either Owner or Programmer by written notice to the other if the party seeking to terminate is not then in material default or breach of this Agreement, upon the occurrence of any of the following:

6.1.2 this Agreement is declared invalid or illegal in whole or substantial part by an order or decree of an administrative agency or court of competent jurisdiction and such order or decree has become final and no longer subject to further administrative or judicial review;

6.1.3 as provided in Section 1.2; or

6.1.4 the mutual consent of both parties.

Additionally, either Owner or Programmer may terminate this Agreement as otherwise provided in this Agreement, including pursuant to Sections 1.4.3, 1.10 and 3.1.

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6.2    Termination Requirements and Procedures.    Unless otherwise specified in the applicable provision or mutually agreed by Programmer and Owner, any termination of this Agreement shall become effective one business day after the date on which notice of termination is provided by Programmer or Owner pursuant to Section 6.1.

6.3    Force Majeure.    In the event of a failure or impairment of the Station’s facilities or any delay or interruption in the broadcast of programming, or failure at any time to furnish facilities, in whole or in part, for broadcast, due to Acts of God, strikes, lockouts, material or labor restrictions by any governmental authority, civil riot, floods, earthquakes and any other cause not reasonably within the control of Owner, each party hereunder shall be excused from performance under this Agreement during the period of such failure or impairment; subject, however, to the provisions of Section 1.5.

SECTION VII.

MISCELLANEOUS

7.1    Assignment.    This Agreement shall be binding upon and inure to the benefit of the parties hereto, their successors and assigns, provided, however, that Programmer may not assign its rights and obligations under this Agreement without the prior written consent of Owner, such consent not to be unreasonably withheld. In the event of any such an assignment or succession in accordance with this Agreement, all references herein to Programmer or Owner, as the case may be, shall be deemed to refer to such assignee or successor.

7.2    Governing Law.    The obligations of Owner and Programmer are subject to applicable federal, state and local law, rules and regulations, including, but not limited to, the Act and the FCC Rules. The construction and performance of the Agreement will be governed by the laws of the State of California.

7.3    Notices.    Any notice, demand or request given under the provisions of the Agreement shall be in writing and shall be deemed to have been duly delivered on the date of personal delivery or on the date of receipt if mailed by registered or certified mail, postage prepaid and return receipt requested, or if delivered by overnight courier, and shall be deemed to have been received on the date of personal delivery or on the date set forth on the return receipt, to the following addresses, in the case of Owner, by notifying Programmer, and in the case of Programmer, by notifying Owner.

To Owner: Liberman Broadcasting, Inc. 1845 Empire Avenue Burbank, CA 91504 Attn: Lenard D. Liberman, Esq. Copy to: O’Melveny & Myers LLP 400 South Hope Street Los Angeles, CA 90071-2899 Attn: Joseph K. Kim, Esq.

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To Programmer:

Little Saigon Radio Broadcasting, Inc.

15781 Brookhurst Street, #101

Westminster, California 92683

Attn: Ninh Quang Vu

7.4    Invalidity.    If any provision of this Agreement or the application thereof to any person or circumstances shall be held invalid or unenforceable to any extent, the parties shall negotiate in good faith and attempt to agree on an amendment to this Agreement that will provide the parties with substantially the same rights and obligations, to the greatest extent possible, as the original Agreement in valid, binding and enforceable form.

7.5    Attorneys’ Fees.    In the event of any legal action to enforce the terms of this Agreement, the prevailing party in any such action shall be entitled to recover from the losing party the prevailing party’s costs and reasonable attorneys’ fees and other expenses incidental thereto incurred in connection with any such action.

7.6    Complete Agreement.    This Agreement, together with the Schedules attached hereto, constitutes the entire agreement among the parties pertaining to the Programmer Broadcast Period covered hereby. This Agreement shall not be deemed to alter the rights of the parties pursuant to that certain Time Brokerage Agreement dated June 9, 2000, which remains in full force and effect.

7.7    Certification.    Pursuant to Note 2(k)(3) to Section 73.3555 of the FCC Rules, Owner certifies that it maintains ultimate control over the Station’s facilities, including specifically control over station finances, personnel and programming, and Programmer certifies that this Agreement complies with the provisions of Sections 73.3555(a), (c) and (d) of the FCC Rules.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first above written.

LIBERMAN BROADCASTING, INC.
By:	/s/    LENARD D. LIBERMAN
Its:	EVP
LITTLE SAIGON RADIO
By:	/s/    NINH QUANG VU
	Ninh Quang Vu
Its:

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Schedule I

Broadcast Station Programming Policy Statement

Programmer agrees to cooperate with Owner in the broadcasting of programs of the highest possible standard of excellence and for this purpose to observe the following regulations in the preparation, writing and broadcasting of its programs.

1.    Compliance with Applicable Law.    All programming, including advertising, announcements and promotional material, shall comply with the Communications Act of 1934, as amended (the “Communications Act”), all rules, regulations and policies of the FCC (the “FCC Rules”), all other applicable laws, and this Programming Policy Statement, as it may be amended from time to time in the sole discretion of Owner. No programming may disserve the public interest, as determined by the Station.

2.    No Plugola or Payola.    In accordance with the Communications Act and the FCC Rules, except for commercial messages aired in compliance with 47 C.F.R. § 73.1212, Programmer shall not receive any consideration in money, goods, services or otherwise, directly or indirectly (including to relatives) from any persons or company for the presentation of any programming over the Station without reporting the same to Owner’s general manager. The commercial mention of any business activity or “plug” for any commercial, professional or other related endeavor, except where contained in an actual commercial message of a sponsor, is prohibited.

3.    No Lotteries.    Announcements giving any information about lotteries or games prohibited by federal or state law or regulation are prohibited.

4.    Election Procedures.    Any and all editorial opinion, political candidate or ballot proposition endorsements are unacceptable for airing without prior approval of the Station. No advertising or paid announcement may be sold to candidates for political office or their supporters. No non-paid appearance by legally qualified candidates for political office may occur without prior approval by the Station. If Owner does give its prior approval for political candidate advertising or paid political announcements, at least sixty days before the start of any primary or election campaign (or such shorter period as may be permitted in the sole discretion of Owner), Programmer will clear with Owner’s general manager the rates Programmer will charge for the time to be sold to candidates for public office and their supporters to make certain that the rates charged are in conformance with applicable law (including the FCC Rules) and the Station policy. If any programming or other material submitted for broadcast by Programmer triggers equal access and/or related obligations to competing political candidates under the Act and the FCC Rules, Programmer shall be responsible to provide any broadcast time out of the air time purchased by it pursuant to the Time Brokerage Agreement and to ensure compliance with the Act and applicable FCC Rules.

5.    Required Announcements.    Programmer shall broadcast (i) an announcement in a form satisfactory to Owner at the beginning of each hour to identify KVNR and (ii) any other announcements that may be required by law, regulation or Owner policy.

6.    No Illegal Announcements; Fraudulent Advertising.    No announcements or promotion prohibited by federal or state law or regulation shall be made over the Station. Any game, contest or promotion relating to or to be presented over the Station must be fully stated and explained in advance to Owner, which reserves the right in its sole discretion to reject any game, contest or promotion. No advertising matter, announcement or claim which Programmer knows to be fraudulent, misleading or untrue shall be included in any matter submitted for broadcast over the Station or otherwise broadcast over the Station.

7.    Indecent, Defamatory or Certain Other Programming.    No programs, announcements, advertising matter or any other material, or any portion thereof submitted for broadcast over the Station or otherwise broadcast over the Station, shall be slanderous, defamatory, obscene, profane, indecent, vulgar, or repulsive, either in theme or treatment.

8.    Owner Discretion Paramount.    In accordance with the Owner’s responsibility under the Communications Act of 1934, as amended, and the FCC Rules, Owner reserves the right to reject or terminate any programming, advertising or other material, or any portion thereof, proposed to be presented or being presented over the Station which is in conflict with the Station policy, the FCC Rules, any other applicable law, or which in Owner’s or its relevant manager’s sole judgment would not serve the public interest.

In any case where questions of policy or interpretation arise, Programmer should submit such questions to Owner for decision before making any commitments in connection therewith.

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Schedule II

Rates

Subject to adjustment in accordance with Section 1.4.2 of the attached Amended and Restated Time Brokerage Agreement, the rates for the Programmer Broadcast Period are as follows:

Sunday and Monday, from 12:00 AM to 5:59:59 AM – $50 per hour ($600 per broadcast week)

Sunday, from 7:00 PM to 11:59:59 PM – $300 per hour ($1500 per broadcast week)

EX-10.20

Exhibit 10.20

LOCAL MARKETING AGREEMENT

This Local Marketing Agreement (the “Agreement”) dated as of March 15, 2001 is entered into by and between LIBERMAN BROADCASTING OF HOUSTON, INC., a California corporation (the “Owner”), which upon the Effective Date (as defined below) shall be the owner and operator of KSEV(AM), Tomball, Texas (the “Station”), which, upon the Effective Date, will be licensed to its wholly owned subsidiary, Liberman Broadcasting of Houston License Corp., and HOUSTON BROADCASTING COMPANY, L.P., a Texas limited partnership (the “Broker”).

WHEREAS, Owner will, upon the day that Owner consummates its acquisition of the Station (the “Effective Date”), which date shall be no earlier than March 20, 2001, be engaged in the business of radio broadcasting on the Station and will have available airtime;

WHEREAS, Owner wishes to retain Broker to provide programming for the Station pursuant to the terms and conditions set forth in this Agreement and in conformity with the Station’s policies and practices and the Communications Act of 1934, as amended together with the rules and regulations (the “FCC Rules”) of the Federal Communications Commission (the “FCC”); and

WHEREAS, Broker wishes to supply such programming and sell advertising that is in conformance with the Station’s policies and all FCC Rules, including the requirement that the ultimate control of the Station be maintained by Owner;

NOW THEREFORE, for and in consideration of the mutual covenants herein contained, the parties hereto have agreed and do agree as follows:

1.    Purchase of Airtime and Provision of Programming.    From the Effective Date until the date on which this Agreement expires or is earlier terminated, subject to the terms and conditions of this Agreement, Owner agrees to broadcast programming supplied by Broker 24 hours-per-day, 7 days per week provided that Owner may broadcast up to two (2) hours of programming per week which is aimed at serving the needs and interests of the Station’s community of license during the morning(s) of Saturday and/or Sunday in accordance with Section 11 of this Agreement.

To facilitate delivery of programming by Broker hereunder, Owner hereby grants to Broker the right for the first six months following the Effective Date, the right to use an on-air studio and on-air talk studio at the station’s studio (the “Studio Facilities”) located at 11767 Katy Freeway, Suite 1170, Houston, Texas 77079 (the “Studio Site”) and, subject to availability, for the first ninety (90) days following the Effective Date, the right to use production studios at the Studio Site at no additional cost to Broker. Broker and Owner shall negotiate in good faith to have Broker purchase the equipment used in the Studio Facilities once Owner relocates its studio to another site. Accordingly, Broker shall have, and Owner hereby grants to Broker, a license to enter on the premises currently occupied by the Station for the purpose of utilizing the Studio Facilities and the production studio. Broker shall hold Owner Parties (as defined below) harmless from all costs, fees and expenses incurred with respect to any personal injury suffered by any employee or agent of Broker while on the property of Owner. Broker also shall be responsible for and shall reimburse Owner for any damage to the property of Owner caused by Broker’s employees or agents. Additionally for a period of 30 days, and thereafter to the extent that Owner determines in its discretion that it has space available, Owner shall permit Broker to share the office space at the Studio Site which currently houses the station’s traffic equipment and additional office space which may be used for Broker’s sales manager and his assistant (collectively, the “Allocated Space”). Owner shall invoice Broker on a monthly basis for the

Allocated Space based upon a pro rata share of Owner’s lease payments for the Studio Site. In the event that Owner permits Broker to utilize the Allocated Space for longer than 30 days, Broker agrees to vacate the Allocated Space upon ten (10) days notice from Owner. Broker’s rights of access to the Studio Site (including the Studio Facilities and the Allocated Space) constitutes a temporary and non-exclusive right to occupy only and does not constitute a sublease or an assignment of any rights held by Owner with respect to such property.

Broker shall air the programming set forth on Exhibit A hereto (the “Programming Lineup”), which Exhibit A shall be provided by Broker for Owner’s approval on or before the Effective Date. Following the Effective Date, Broker shall not make any changes to the Programming Lineup without the prior written consent of Owner, which consent shall not be unreasonably withheld.

2.     Payments & Deposits.    During the term of this Agreement, Broker shall pay Owner the payments and grant Owner such other consideration as, in each case, is set forth on Exhibit B hereto. All payments shall be made in advance in equal monthly installments due no later than the seventh (7^th) day of each calendar month; provided, however, that on or before the Effective Date, Broker shall transfer to Owner by wire payment of immediately available funds to an account designated in writing by Owner a payment equaling the prorated monthly payment for March 2001 and the payment for April 2001 in the amount set forth on Exhibit B. All monthly payments shall be by certified or cashier’s check. In addition to monthly payments hereunder, concurrently with the execution hereof, Broker shall tender to Owner a deposit (the “Deposit”) in such amount as is set forth on Exhibit B. Said Deposit shall be refundable upon the expiration of the term of this Agreement. If Broker fails to make any of the payments called for by this Agreement, Owner may, but shall not be obligated to, draw on the Deposit to defray the payment owed. In such event, Broker shall within five (5) business days pay to Owner an amount necessary to restore the full amount of the Deposit before further programming may be aired. Owner, at its option, may treat the failure to make monthly payment or to replenish the amount on deposit when due as a breach of this Agreement and immediately terminate the Agreement.

Without limiting Owner’s rights and remedies under Section 16 or any other provision of this Agreement, including its right to immediately terminate this Agreement pursuant to Section 16.1.1, if Broker has not delivered any payment owing to Owner by the seventh (7^th) day of the calendar month, Owner may, in its sole discretion, suspend the carriage of Broker’s programming and resell such broadcast time (a “Default Segment”). Broker shall remain liable to Owner for the difference between the amount payable by Broker pursuant to Section 1 for the broadcast time comprising the Default Segment during the remainder of the term of the Agreement and the amount, if any, received by Owner upon resale of all or part of the Default Segment to a third party during the remainder of the term of the Agreement.

The Broker shall receive a credit for any scheduled programming not broadcast by the Station under the powers of operation and preemption in Section 11, the amount of such credit to be equal to such percentage of the monthly payment amount as the amount of time preempted comprises of the total programming hours for such month. Such credit shall be Owner’s sole compensation to Broker for air time so lost. Owner shall have no other liability to Broker or any third party pursuant to the terms of this Section. Owner may treat the failure to make payment when due as a breach under paragraph 16.1 and terminate the Agreement.

Notwithstanding any other provisions of this Agreement and without limiting other rights and remedies of Owner, any payment provided for in this Section 2 not made on the due date

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shall be subject to finance charges at a rate equal to the lesser of (x) 12.0% per annum or (y) the highest rate allowed by applicable law, compounded monthly.

3.    Accounts Receivable.    Broker shall have no interest in any cash accounts receivable for broadcasts on the Station which occur prior to the Effective Date. All revenues and cash accounts receivable for broadcasts on the Station following the Effective Date shall belong to Broker except that those revenues and accounts receivable which relate to (x) the items specified as “Other Consideration” on Exhibit B hereto and (y) public affairs programming broadcast by Owner in accordance with Section 11 hereof shall, in each case, belong to Owner. Additionally, and for the avoidance of doubt, any other revenue derived from the operation of the Station or its facilities shall belong to Owner. Broker may sell advertising time consistent with the applicable rules and regulations and the Policy Statement (as defined below), on the Station in combination with any other broadcast station of its choosing, subject to compliance with applicable law. Broker shall be responsible for payment of the commissions due to any national sales representative, local sales representative, agency or employee engaged by it for the purpose of selling advertising that is carried during the programming it provides to Owner. Neither Broker nor any representative of Broker shall solicit the placement of advertisements by any advertising client to whom Owner has sold advertising on the Station.

4.    Prohibition on Resale.    Broker agrees that it will not resell or otherwise transfer all or any portion of the airtime purchased from Owner hereunder without the express prior written consent of Owner, which consent shall not be unreasonably withheld, any such sale or transfer without such consent being void and of no force or effect; provided, however, that Broker may resell airtime in blocks of no longer than three (3) consecutive hours without Owner’s prior written consent.

5.    Program Delivery Requirements.    Broker shall deliver programming at its expense to the Station’s transmitter facilities or other authorized remote control points as reasonably designated by Owner.

6.    Term.

6.1    Initial Term.    The term of this Agreement shall be from date hereof until the fifth anniversary of the Effective Date unless sooner terminated as provided by this Agreement.

6.2    Extension Periods.    Broker shall have the option to extend the term of this Agreement for up to two successive one-year periods (each an “Extension Period”). In order to exercise such options, Broker shall (i) with respect to the first Extension Period, give written notice to Owner no later than six months prior to the fifth anniversary of the Effective Date and (ii) with respect to the second Extension Period, give written notice to Owner no later than six months prior to the scheduled termination of the first Extension Period. Rates for the Extension Periods shall be as set forth on Exhibit B.

6.3    Termination.    At any time following the second anniversary of the Effective Date, Broker may terminate this Agreement upon six (6) months notice to Owner if it is Broker’s intent to cease operations (for the avoidance of doubt, the earliest point where Broker may give such notice to Owner is six (6) months prior to the second anniversary of the Effective Date). In the event that Broker exercises its rights to terminate this Agreement in accordance with this Section 6.3, if Broker, any affiliate of Broker, or any entity in which Dan Scott Goeb or William Michael Richards or either of their respective spouses holds, directly or indirectly, an ownership interest, at any time prior to the third anniversary of the Effective Date, (x) enters into a local

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marketing agreement, time brokerage agreement or other agreement to purchase time on a radio station in the Houston DMA or (y) becomes the licensee of any radio station in the Houston DMA, (1) Broker’s termination of this Agreement shall be deemed to be null and void, (2) Broker shall be deemed to be in breach of this Agreement (a “Competition Breach”) and (3) Broker shall pay to Owner, as liquidated damages and not as a penalty, the fees which would have been due to Owner pursuant to Section 2 of this Agreement had Broker performed its obligations hereunder from the date on which Broker terminated this Agreement pursuant to Section 6.3 through the end of the initial term set forth in Section 6.1 or, if such event shall occur during an Extension Period, through the end of such Extension Period or any subsequent Extension Period for which Broker has exercised its option pursuant to Section 6.2 (the “Liquidated Damages”). The parties to this Agreement acknowledge that, due to the nature of the services provided, in the event of a Competition Breach, it would be extremely difficult or impossible to fix the actual damages, if any, which may proximately result from such Competition Breach, that an adequate remedy would be inconvenient and difficult to obtain, and that such Liquidated Damages represent a reasonable estimate of the loss to be sustained by Owner.

7.    Station Facilities.

7.1    Operation of Station.    Throughout the term of this Agreement, Owner shall operate the Station with the maximum authorized facilities. Any necessary maintenance work affecting the operation of the Station which would result in a reduction of transmitter power by more than 7.5 kW daytime or .5 kW nighttime shall be scheduled upon as much prior notice to Broker as practicable and at night or during overnight hours. Owner reserves the right, subject to FCC authorization, to modify the facilities of the station as it determines is advisable in its sole discretion.

7.2    Interruption of Normal Operations.    If the Station suffers loss or damage to its transmission facilities for any cause other than one governed by Section 7.3, which results in the decrease in the station’s operating power by more than 7.5 kW daytime and/or more than .5 kW nighttime, Owner shall notify Broker and shall undertake such repairs as necessary to restore the operation of the Station within fourteen (14) days from the occurrence of such loss or damage. If Owner fails to return the station to normal operations with such fourteen (14) day period, the Broker will be entitled to decrease the payments called for in Sections 1 and 2 in proportion to the loss of power by more than 7.5 kW daytime and .5 kW nighttime. If Owner fails to accomplish that result within sixty (60) days, Broker may terminate this Agreement upon ten (10) days notice to Owner.

7.3    Force Majeure.    Any failure or impairment of the Station’s facilities or any delay or interruption in the broadcast of programs, or failure at any time to furnish facilities, in whole or in part, for broadcast due to acts of God, strikes, lockouts, material or labor restrictions by any governmental authority, civil riot, floods and any other cause not reasonably within the control of Owner (including any obligation of Owner to reduce power or suspend operation to avoid occupational exposure to harmful RF radiation), shall not constitute a breach of this Agreement and Owner will not be liable to Broker.

8.    Programming Standards.    All programs supplied by Broker shall be in good taste and shall meet in all material respects all applicable rules, regulations and policies of the FCC and the standards set out in Exhibit C of this Agreement (the “Policy Statement”). All advertising spots and promotional material or announcements shall comply with all applicable federal, state and local regulations and policies. The program may not disserve the public interest, as determined by Owner. If, in the sole judgment of Owner, the programming presented by Broker

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does not meet such standards, Owner may suspend or cancel any such program. Notwithstanding the provisions of Section 6 and 17.2, if Owner cancels more than four (4) programs under this authority within any three (3) month period, Owner may immediately terminate this Agreement and exercise its rights and remedies under this Agreement based on Broker’s material breach thereof. The provision by Broker of any programming, announcement, advertising or other matter that is slanderous, defamatory, obscene or indecent and therefore in violation of the Policy Statement, or that is otherwise in violation of the Policy Statement, shall constitute a material breach of this Agreement, and shall entitle Owner, at its sole discretion, to terminate this Agreement immediately and exercise its rights and remedies under this Agreement based on such material breach by Broker, notwithstanding the provisions of Sections 6 and 17.2. If Owner determines, in its sole discretion, that any programming, announcement, advertising or other matter provided by or on behalf of Broker for broadcast on the Station may be slanderous or defamatory, Owner may require any retractions or related material that may be appropriate, as determined in the sole discretion of Owner, to be broadcast on the Station hereunder without (i) creating any liability to Broker or any other third party or (ii) limiting Owner’s indemnification rights pursuant to Section 16, or any of its other rights pursuant to Sections 11 and 17, or any other provision of this Agreement.

9.    Responsibility for Expenses and Employees.

9.1    Division of Expenses.    Owner will provide and be responsible for (i) the Station personnel necessary for maintenance and operation of the Station’s transmission facilities (including without limitation a Chief Operator), and will be responsible for the salaries, taxes, insurance and related costs for all Station personnel used in the maintenance and operation of the Station’s transmission facilities, (ii) such costs as are provided for in Section 9.2 and (iii) all real and personal property taxes, mortgage fees and expenses and other real property costs (including insurance), (iv) all transmitter site leases and any lease payments related to the Station’s studios located at 11767 Katy Freeway, Suite 1170, Houston, Texas 77079, (v) any utilities (excluding telephone charges), and (vi) all costs and expenses for the maintenance of all transmitter equipment, as determined by Owner in its sole discretion. Whenever on the Station’s premises, all personnel shall be subject to the supervision and the direction of Owner’s General Manager and/or the Station’s Chief Operator. Except as set forth in the foregoing sentences of this Section 9, Broker shall be responsible for all other expenses involved in the operation of the Station including, without limitation, (i) all operating expenses of the Station (including telephone expenses and expenses related to sales, marketing, promotion, advertising, billing and collections and traffic), (ii) all costs and expenses for maintenance of studio equipment, (iii) the employment and salaries, taxes, insurance and related costs for all personnel used in the production of its programming, including salespeople, traffic personnel (except that Owner will provide, subject to reimbursement from Broker, personnel to handle traffic during the first two weeks following the Effective Date in accordance with Section 1), board operators and programming staff and (iv) all copyright fees attributable to Broker’s programming broadcast on the Station, including, without limitation, all ASCAP, BMI and SESAC fees, and fees for any other necessary music performance rights, as determined in the sole discretion of Owner.

9.2    Station Engineer.    In the event that Broker employs Chuck McLeod (the “Engineer”), Broker shall provide Owner with the Engineer’s services on a part-time (13 hours per week) basis. The Engineer shall perform such tasks as Owner shall require and in a manner which is satisfactory to Owner, in each case, in Owner’s sole discretion. In the event that Owner requires the Engineer’s services for more than 13 hours in any week, Broker shall (subject to the Engineer’s unavailability due to scheduling conflicts arising from previously scheduled matters) make the Engineer available to Owner for such additional service. All time spent by the Engineer

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working on the Station’s transmitter site at the direction of Owner shall be credited toward the 13 hour weekly allotment. Conversely, if Broker requires such amount of the Engineer’s time in any week that will not permit the Engineer to provide 13 hours of service to Owner in such week, Broker shall give reasonable advanced notice thereof to Owner and Broker shall be permitted to withhold the services of the Engineer during such week (subject to Owner’s needs for the Engineer due to scheduling conflicts arising from previously scheduled matters). Owner shall pay Broker the amount of $20,000 per year for such engineering services, with such amount being payable in equal monthly installments; provided, however, that in the event that Owner is at any time dissatisfied with the services provided by the Engineer (as determined by Owner in its sole discretion), Owner may, upon giving notice to Broker, immediately terminate the effectiveness of this Section 9.2 without otherwise affecting the continuation of the other terms of this Agreement. The Engineer shall at all times be an employee of Broker and Broker shall be responsible for, and shall defend, indemnify and hold harmless the Owner Parties (as defined below) against, all aspects of such employment (including, without limitation, salary, taxes, insurance and other costs or claims arising out of or related to the Engineer’s employment) it being understood that the Engineer is being provided to Owner on an independent contractor basis. The parties do not intend that the Engineer, or any other person, shall be a third party beneficiary of this Agreement.

9.3    Non-Solicitation.    During the term of this Agreement, none of Broker, Owner or any of their respective affiliates (the “Hiring Party”) shall solicit the employment of any employee of the other party hereto (the “Employing Party”) as an employee, independent contractor or otherwise without the prior written consent of the Employing Party. No party will be deemed to have violated the covenant set forth in this Section 9.3 as a result of the placement of any job advertisement or other general solicitation of employment not specifically directed to employees of the Employing Party provided that no employee so solicited is in fact employed by the Hiring Party.

10.    Operation of Station.

10.1    Control.    Notwithstanding anything to the contrary in this Agreement, Owner shall have full authority and power over the management and operation of the Station during the period of this Agreement. In no event shall Broker, or Broker’s employees, represent, depict, describe or portray Broker as Owner of the Station. To this end, all employees of Broker, whose work involves the Station, shall be informed as to Owner’s ultimate control over the Station and Broker’s subordinate capacity. Owner shall provide and pay for the General Manager of the Station, who shall report and be accountable solely to Owner and who shall be responsible for the direction of the day-to-day operation of the Station to the extent required pursuant to the FCC Rules. Owner shall retain control over the policies, programming and operations of the Station, including without limitation the right to decide whether to accept or reject any programming or advertisements, the right to pre-empt any programs in order to broadcast a program deemed by Owner to be of greater national, regional or local interest, and the right to take any other actions necessary for compliance with the laws of the United States, the State of Texas, the rules, regulations and policies of the FCC, including the prohibition on unauthorized transfers of control and multiple ownership of stations, and the rules, regulations and policies of other federal governmental authorities, including the Federal Trade Commission and the Department of Justice. Owner shall at all times be solely responsible for meeting all of the FCC’s requirements with respect to public service programming, for maintaining the political and public inspection files and the Station log, for the sale of political advertising, and for the preparation of all programs/issues lists.

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10.2    Broker’s Responsibilities with Respect to Operation of Station.    At Owner’s request, Broker shall cooperate with and assist Owner in complying with the FCC Rules and the other rules and regulations referenced in Section 10.1. Broker shall cause the Station to transmit any required tests of the Emergency Alert System at such times as are directed by Owner. Broker shall prepare, maintain and deliver to Owner all records and information required by the FCC to be placed in the public inspection files of the Station pertaining to the broadcast of political programming and advertisements, in accordance with the provisions of Sections 73.1940 and 73.3526 of the FCC’s rules, and agrees to broadcast sponsored programming addressing political issues, in accordance with the provisions of Section 73.1212 of the FCC’s rules. Broker also shall consult with Owner and adhere strictly to all applicable statutes and the rules, regulations and policies of the FCC, as announced from time to time, with respect to the carriage of political advertisements and programming (including, without limitation, the rights of candidates and, as appropriate, others to “equal opportunities”) and the charges permitted therefor; provided, however, that in the event that Owner, in its sole discretion, determines that Broker is failing to comply with such statutes and FCC Rules, upon Owner’s instruction to such effect, Broker shall immediately cease and desist from carrying political advertisements and programming. Broker shall furnish within its programming, on behalf of Owner, all station identification announcements required by the FCC’s rules. Broker shall provide information with respect to any of its programming which is responsive to the public needs and interests of the area served by the Station so as to assist Owner in the preparation of any required programming reports, and provide other information to enable Owner to prepare other records, reports and logs required by the FCC or other local, state or federal governmental agencies. All studio facilities used by Broker shall comply with FCC Rules related to the location and staffing thereof.

11.    Public Affairs; Special Events.    Notwithstanding any other provision of this Agreement, Broker recognizes that Owner has certain obligations to broadcast programming to meet the needs and interests of the community of license for the Station. Owner shall have the right to air specific programming on issues of importance to the local community. Nothing in this Agreement shall abrogate the unrestricted authority of Owner to discharge its obligations to the public and to comply with the FCC Rules with respect to meeting the ascertained needs and interests of the public. Accordingly, Owner may broadcast public affairs programming in either one (1) hour blocks during the hours of 5am to 6am Saturday and Sunday; provided, however, that if Owner determines that it needs additional time or an alternative regularly scheduled time in order to meet its obligations as an FCC licensee Broker shall make such time available to Owner. Additionally, Owner shall have the right, in its reasonable discretion, to pre-empt any of the broadcasts of the programs supplied by Broker, and to use part or all of the hours of operation of the Station for the broadcast of events of special importance. In all such cases, Owner will use its best efforts to give Broker reasonable advance notice of its intention to pre-empt programming and, in the event of such pre-emption, Broker shall receive a credit for such time as may be pre-empted by Owner.

12.    Right to Use the Programs.    The right to use the programs produced by Broker and to authorize their use in any manner and in any media whatsoever shall be at all times vested solely in Broker except as authorized by this Agreement.

13.    Payola and Plugola.    The Broker will provide to the Station in advance any information known to Broker regarding any money or other consideration which has been paid or accepted, or has been promised to be paid or to be accepted, for the inclusion of any matter as a part of any programming or commercial material to be supplied to Owner by Broker for broadcast on the Station, unless the party making or accepting such payment is identified in the program as having paid for or furnished such consideration in accordance with the FCC Rules. Commercial

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matter shall have obvious sponsorship identification contained in the commercial copy. The Broker will at all times endeavor to proceed in good faith to comply with the requirements of Sections 317 and 507 of the Communications Act of 1934, as amended, and the related FCC Rules and regulations of the FCC. At such times as Owner may reasonably request, Broker agrees to execute and to provide Owner with affidavits from itself and all of its employees and agents who are involved with providing programming on the Station in the form of Exhibit D hereto.

14.    Compliance with Law.    The Broker will, in good faith, endeavor to comply with all laws and regulations applicable to the broadcast of programming by the Station.

15.    Indemnification; Rights of Owner; Insurance.

15.1    Indemnification.    The Broker will indemnify and hold harmless Owner and its officers, directors, employees, affiliates and agents (the “Owner Parties”) against all claims, damages, liabilities, costs and expenses including, without limitation, amounts paid in settlement, any judgment and reasonable attorneys’ fees and costs (the “Losses”) resulting from claims for defamation, slander, illegal competition or trade practice, violation of rights of privacy, and infringement of copyrights or other proprietary rights or other law arising out of the broadcast on the Station of programming furnished by Broker pursuant to this Agreement. The Broker shall further indemnify and hold harmless each Owner Party from and against all other Losses arising from the broadcasting of any programs supplied by Broker including, without limitation and for the avoidance of doubt, any such amounts related to a challenge to the renewal of the FCC license for the Station or any FCC enforcement proceeding. Owner reserves the right to refuse to broadcast any program or any portion thereof containing matter which is, or in the reasonable opinion of Owner may be, or which a third party claims to be, violative of any right of any third party or which may constitute a “personal attack,” as that term is defined by the FCC.

15.2    Insurance.    In addition to any other insurance coverage which Broker may be required to carry in accordance with applicable law, from the Effective Date through the date on which this Agreement is terminated, Broker shall obtain and maintain a media special perils insurance policy with errors and omissions coverage with a coverage limit of at least $5,000,000. Such policy shall be an occurrence policy. The insurance policy required above shall be obtained and maintained from a company reasonably acceptable to Owner. All such insurance shall, to the extent of the Broker’s indemnity obligations under this Agreement, be primary to any other available coverage and shall name Owner and Liberman Broadcasting of Houston License Corp. as additional insureds. Upon request, Broker shall provide the other Party with an insurance certificate confirming compliance with the insurance requirements of this Section 15.2. The insurance certificate shall indicate that such Owner shall be notified not less than thirty (30) days prior to any cancellation or material change in coverage. In the event coverage is denied or reimbursement of a properly presented claim is disputed by the carrier for insurance provided above, Broker shall make commercially reasonable efforts to pursue such claim with its carrier. Broker shall use its commercially reasonable efforts to obtain from the insurance companies providing the coverage required by this Agreement a waiver of all rights of subrogation or recovery in favor of Owner and the Owner Parties.

16.    Events of Default; Cure Periods and Remedies.

16.1    Events of Default.    The following shall constitute events of default (the “Events of Default”) under the Agreement:

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16.1.1    Non-Payment.    The Broker’s failure to pay any broadcast fee pursuant to Sections 1 and 2 when due.

16.1.2    Non-Timely Delivery of Program Materials.    Broker’s failure to deliver programs in a timely fashion.

16.1.3    Default in Covenants.    The default by Broker or by Owner in the performance of any material covenant, condition or undertaking contained in this Agreement (other than defaults governed by Sections 8, 16.1.1 or 16.1.2 and defaults arising as a result of the circumstances contemplated in Section 7.2 or 7.3, which, in each case, shall be governed by such sections).

16.1.4    Adverse Legal Action.    If Broker shall (a) make a general assignment for the benefit of creditors, (b) file or have filed against it a petition for bankruptcy, for reorganization or an arrangement, or for the appointment of a receiver, trustee or similar creditors’ representative for the property or assets of Broker under any federal or state insolvency law, which, if filed against Broker, has not been dismissed or discharged within thirty (30) days thereof. Also, if Broker, Dan Scott Goeb or William Michael Richards or either of their respective spouses, challenge the validity of the Guaranties provided by them upon the execution of this Agreement.

16.1.5    Breach of Representation.    If any representation or warranty made by Owner or Broker in this Agreement, or in any certificate or document furnished by Broker to Owner pursuant to the provisions of this Agreement, shall prove to have been false or misleading in any material respect as of the time furnished.

16.2    Cure Periods.    Notwithstanding anything in Section 16.1 to the contrary, with respect to Sections 16.1.3 and 16.1.5, no Event of Default shall be deemed to have occurred until the non-defaulting party has provided the party in default with written notice specifying the event or events that, if not cured, would constitute an Event of Default and specifying the actions necessary to cure the default(s) and the defaulting party shall have failed to have cured such default within thirty days after receipt of such notice. This period may be extended for a reasonable period of time if the defaulting party is acting in good faith to cure and such delay is not materially adverse to the non-defaulting party.

16.3    Termination Upon Default.    Upon the occurrence of an Event of Default, the non-defaulting party may immediately terminate this Agreement, provided that it is not also in material default of this Agreement. Notwithstanding the foregoing, this Agreement: (a) shall terminate immediately, without notice to Broker or any further action by Owner or any other person, upon Broker’s making a general assignment for the benefit of creditors, or filing a petition for bankruptcy, for reorganization or an arrangement, or for the appointment of a receiver, trustee or similar creditors’ representative for the property or assets of Broker under any federal or state insolvency law; and (b) shall terminate at the end of the thirtieth (30^th) day after any person has filed against Broker a petition for bankruptcy, for reorganization or an arrangement, or for the appointment of a receiver, trustee or similar creditors’ representative for the property or assets of Broker under any federal or state insolvency law, unless such petition has been dismissed or discharged by such time. In no event shall Owner have any liability for consequential, special, incidental, or lost profits damages. In no event shall termination extinguish any rights of Owner pursuant to Section 15.

17.    Sale of Station or Change of Format.    If the FCC licenses for the Station are assigned or transferred during the term of this Agreement, Owner’s obligations under the

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Agreement will be satisfied by the assignment to and acceptance of those obligations by the successor owner of the Station or such owner’s affiliate.

18.    Termination Upon Order of Judicial or Governmental Authority.    If any court of competent jurisdiction or any federal, state or local governmental authority designates a hearing with respect to the continuation or renewal of any license or authorization held by Owner for the operation of the Station, advises any party to this Agreement of its intention to investigate or to issue a challenge to or a complaint concerning the activities permitted by this Agreement, or orders the termination of the Agreement and/or the curtailment in any manner material to the relationship between the parties to this Agreement of the provision of programming by Broker, with the concurrence of Owner, Broker shall have the option to seek administrative or judicial appeal of or relief from such order(s), in which event Owner shall cooperate with Broker provided that Broker shall be responsible for legal fees incurred in such proceedings, or Broker shall notify Owner that the Agreement will be terminated in accordance with such order(s). If the FCC designates the renewal application of the Station for a hearing as a consequence of this Agreement or for any other reason, Broker shall cooperate and comply with any reasonable request of Owner to assemble and provide to the FCC information relating to Broker’s performance under this Agreement, at Broker’s expense. Upon termination following such governmental order(s), Broker shall pay to Owner any fees due but unpaid as of the date of termination as may be permitted by such order(s), and Owner shall reasonably cooperate with Broker to the extent permitted to enable Broker to fulfill advertising or other programming contracts then outstanding. Thereafter, neither party shall have any liability to the other.

19.    Mutual Representations and Warranties.    Each of Owner and Broker represents to the other (i) that it is legally qualified and able to enter into this Agreement, (ii) that the execution, delivery and performance hereof does not constitute a breach or violation of any agreement, contract or other obligation to which it is subject or by which it is bound and (iii) that this Agreement constitutes the legal, valid and binding obligation of such party, enforceable in accordance with its terms.

20.    Maintenance of Corporate Status.    At all times during the term of this Agreement, Broker shall take such actions as are necessary to ensure that Broker is in good standing under the laws of its jurisdiction of incorporation.

21.    Modification and Waiver.    No modification or waiver of any provision of the Agreement shall be effective unless made in writing and signed by the party adversely affected, and any such waiver and consent shall be effective only in the specific instance and for the purpose for which such consent was given.

22.    No Waiver; Remedies Cumulative.    No failure or delay on the part of Owner or Broker in exercising any right or power under this Agreement 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 waiver of any breach of this Agreement by any party hereto shall not be deemed to be a waiver of any preceding or subsequent breach under this Agreement. The rights and remedies of the parties to this Agreement are cumulative and are not exclusive of any rights or remedies which either may otherwise have.

23.    Construction.    This Agreement shall be construed in accordance with the laws of the State of Texas without regard to the provisions of conflicts of law thereunder. The obligations of the parties to this Agreement are subject to all federal, state or municipal laws or regulations,

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including those of the FCC, now or hereafter in force. The parties each acknowledge that all the terms and conditions in this Agreement have been the subject of active and complete negotiation between the parties and represent the parties’ agreement based upon all relevant considerations. The parties agree that the terms and conditions of this Agreement shall not be construed in favor of or against any party by reason of the extent to which any party or its professional advisors participated in the preparation hereof. Nothing in this agreement shall be deemed to constitute a joint venture or partnership between the parties hereto.

24.    Headings.    The headings contained in this Agreement are included for convenience only and shall not in any way alter the meaning of any provision.

25.    Successors and Assigns.    This Agreement may not be assigned by Broker without the express written consent of Owner first had and obtained. Except as otherwise provided herein, this Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns.

26.    Counterpart Signatures.    This Agreement may be signed in one or more counterparts, each of which shall be deemed a duplicate original and be binding on the parties to this Agreement.

27.    Notices.    Any notice required or permitted hereunder shall be in writing and shall be deemed given when delivered personally, or mailed by United States mail, postage prepaid, and addressed as follows:

If, to Owner:	Lenard D. Liberman Executive Vice President Liberman Broadcasting of Houston, Inc. 1813 Victory Place Burbank, California 91504
with copies (which shall not constitute notice) to:
	Joseph K. Kim, Esq. O’Melveny & Myers LLP 400 South Hope Street, 15th Floor Los Angeles, California 90071
and, If to Broker:	William Michael Richards President Pat-Rich, LLC, as general partner of Houston Broadcasting Company, L.P. 11767 Katy Freeway Suite 690 Houston Texas 77079

28.    Entire Agreement.    This Agreement embodies the entire agreement between the parties and there are no other agreements, representations, warranties, or understandings, or written, between them with respect to the subject matter hereof.

29.    Severability.    In the event that any of the provisions contained in this Agreement is held to be invalid, illegal or unenforceable, it shall not affect any other provision hereof, and this

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Agreement shall be construed as if such invalid, illegal or unenforceable provision had not been contained herein.

30.    Attorneys’ Fees.    In the event of any legal action to enforce the terms of this Agreement, the prevailing party in any such action shall be entitled to recover his or its costs and reasonable attorneys’ fees incurred from the losing party.

31.    Confidentiality.    If Owner provides (or, prior to the execution hereof, has provided) Confidential Information (as hereinafter defined) to Broker in writing and identified as such or if in the course of performing under this Agreement Broker learns Confidential Information regarding the facilities or plans of the other, the receiving party shall protect the Confidential Information from disclosure to third parties with the same degree of care accorded its own confidential and proprietary information; provided, however, that Broker shall each be entitled to provide such Confidential Information to its directors, officers, members, managers, employees, lenders, attorneys, agents, and contractors (“Representatives”), entities controlling, controlled by or under common control with Broker (“Broker Affiliates”) or the Representatives of such Broker Affiliates, in each case whose access is reasonably necessary. Each such recipient of Confidential Information shall be informed by the party disclosing Confidential Information of its confidential nature, and shall be directed to treat such information confidentially and shall agree to abide by these provisions. All obligations of Broker under this Section 31 shall be deemed to be applicable to Broker and to all Representatives of Broker, all Broker Affiliates, and all Representatives of any Broker Affiliates. In any event, Broker shall be responsible for any breach of this provision by any Person to whom that party discloses Confidential Information. Broker shall not be required to hold confidential any information that: (1) becomes publicly available other than through the recipient; (2) is required to be disclosed by a governmental or judicial order, rule or regulation; (3) is independently developed by the disclosing party; or (4) becomes available to the disclosing party without restriction from a third party. These obligations shall survive expiration or termination of this Agreement for a period of two (2) years. Confidential Information shall not include information disclosed by Broker as required by applicable law or regulation; provided, however, that the information disclosed is limited to the existence and general nature of the relationship between Broker and Owner, including, as required, the scope, approximate revenues, purposes and expectations related to such relationship and a description of any disputes relating thereto and Broker provides Owner with advanced written notice of such potential disclosure so that Owner has a reasonable opportunity to secure the confidential protections thereof. For purposes of this Agreement, “Confidential Information” means all confidential and proprietary information, currently existing or subsequently created during the term of the relationship between Broker and Owner, which Owner or any Owner Party owns or controls and which has not been released by Owner or any Owner Party to the general public or a third party without similar restrictions. Such information includes but is not limited to, all terms and conditions of this Agreement other than such terms and conditions as must be filed with the FCC in accordance with the FCC Rules, any and all proprietary information and any other information (excluding information in the public domain other than as a direct or indirect result of any breach by either party of the provisions of this section) related to the business, operations, management, assets, properties, plans or prospects, condition, financial or otherwise, or results of operation of Owner and any Owner Party, including information disclosed to or known by Broker as a consequence of, or through Broker’s relationship with the Owner pertaining to the business of Owner and any Owner Party and their customers and the methods, processes, organization, price lists, invoices, prospect/customer/client lists, procedures, or finances of Owner and any Owner Party, including, without limitation, information of or relating to research, development, scientific or technical information, methods, formulae, processes, analytical results, trade secrets, information regarding patents, copyrights, or

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other intellectual property rights, computer software and any related or other technical, corporate, marketing or trade information, and all information that gives Owner and any Owner Party an opportunity to obtain an advantage over the competitors of Owner or any Owner Party who do not know or use it; or information disclosed to or known by Owner as a consequence of, or through such party’s relationship with Broker pertaining to the businesses, products, processes, and services of the customers or clients of Owner and any Owner Party, including, without limitation, information of or relating to research, development, inventions, manufacturing, engineering, designs, methods, processes, analytical results, and any related or other technical, corporate, marketing or trade information.

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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement on the date first written above.

LIBERMAN BROADCASTING OF HOUSTON, INC.
By:	/s/    LENARD D. LIBERMAN
	Lenard D. Liberman, Esq.
	Executive Vice President
Date:	March 14, 2001

HOUSTON BROADCASTING COMPANY, L.P.
By:	PAT-RICH, LLC
Its:	General Partner

By:	/s/    WILLIAM MICHAEL RICHARDS
	William Michael Richards President
Date:	March 14, 2001

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EXHIBIT A

Program Lineup

[To Be Supplied by Broker]

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EXHIBIT B

Payments and Deposits

In consideration for the airtime supplied to Broker pursuant to this Agreement, Broker shall provide the following consideration to Owner.

A.    Monthly Rates

In accordance with Section 2 of the Agreement, Broker shall make monthly payments in the following amounts:

Year	Rate
Effective Date through March 31, 2002	$750,000 ($62,500 per month) plus a prorated portion of the $62,500 monthly amount for the remainder of March 2001.
4/1/2002-3/31/2003	$800,000 ($66,666.66 per month)
4/1/2003-3/31/2004	$875,000 ($72,916.66 per month)
4/1/2004-3/31/2005	$1,000,000 ($83,333.33 per month)
4/1/2005-3/31/2006	$1,100,000 ($91,666.66 per month)

In accordance with the foregoing, upon execution of this Agreement, Broker shall pay to Owner the amount of $87,157.50 representing the prorated payment for March, 2001 and payment for April, 2001.

B.    Other Consideration

In addition to the monthly payments, Owner shall receive 42 sixty second commercial spots per week for sale by Owner to advertisers at such rates as Owner shall determine in its sole discretion. Such commercial spots shall air between the hours of 6am-7pm Monday through Saturday; provided, however, that (1) Owner shall have the right to have 15 of such spots per week upgraded to program sponsorships (including an opening and closing sponsorship billboard by the Station’s talent which notes that Owner’s client is a sponsor of the program then airing, such announcement to be followed in the first break thereafter by the sixty second commercial spot for such advertiser) and (2) in the event that Owner receives a request from an advertiser that its commercial spots air on a particular day and/or at a particular time, Broker shall accommodate such request unless Broker shall have previously committed all of its airtime for such period to retail price cash advertisers. If Broker shall reject Owner’s request for a particular time slot based upon a prior sale which conforms to the requirements of the preceding sentence and such time shall subsequently become available, Broker shall give Owner a right of first refusal over such time. Broker shall promptly provide Owner with contracts (in triplicate) once orders are entered into Broker’s computer traffic system. Within five (5) business days of the end of each standard broadcast month, Broker shall provide Owner with such information as Owner shall require in order to invoice its advertising clients and to demonstrate that Owner has fulfilled its obligations to such advertising clients. Additionally, at Owner’s request, Broker shall provide weekly

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invoices. In the event that Broker employs a copywriter and production staff, Broker shall make such persons available to Owner upon reasonable notice and for reasonable periods of time subject to their availability. At Owner’s request, Broker shall make voice talent reasonably available to Owner, at no cost to Owner, for purposes of producing the advertising spots referred to in this paragraph.

C.    Deposits

The amount which Broker shall tender as its initial deposit in accordance with Section 2 shall be $125,000. In the event that the Effective Date does not occur within sixty (60) days of the date hereof, Owner shall refund such deposit to Broker in its entirety.

D.    Rates for Extension Periods

The monthly rates for the Extension Periods shall be (i) $1,210,000 ($100,833.33 per month) for the first Extension Period and (ii) $1,331,000 ($110,916.66 per month) for the second Extension Period.

E.    Costs

Broker shall promptly reimburse Owner for any amounts paid by Owner which represents costs which Broker has agreed to assume pursuant to the Agreement

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Exhibit C

KSEV Station Programming Policy

1.    Broadcast Content and Technical Requirements.    All programs delivered to Liberman Broadcasting of Houston, Inc. (“Owner”) for airplay shall be professional broadcast quality.

1.1    Owner reserves the right to review any program at any time for its suitability for airing either for unacceptable content or poor technical quality.

1.2    Owner reserves the right not to broadcast any material at any time due to either unacceptable content or poor technical quality. Houston Broadcasting Company, L.P. (“Broker”) shall remain obligated to pay for airtime.

1.3    Any and all transmission of Broker programming to Owner is the responsibility of the Broker.

1.4    Owner is responsible for and will provide all station IDs, public service announcements and community affairs programming.

2.    Regulations and Guidelines.    All programming shall conform to all requirements under the Communications Act of 1934, as amended, all rules regulations and policies of the FCC (the “FCC Rules”) and this KSEV Station Programming Policy as each may be amended from time to time. The program may not disserve the public interest, as determined by Owner. Broker agrees to cooperate with Owner in the broadcasting of programs of the highest possible standard of excellence and for this purpose to observe the following regulations in the preparation, writing and broadcasting of its programs.

2.1    Political & Editorial Content.    Any and all editorial opinion, political candidate or ballot proposition endorsements and non-paid political candidate appearances shall be conducted in accordance with the FCC Rules. Broker also shall consult with Owner and adhere strictly to all applicable statutes and the rules, regulations and policies of the FCC, as announced from time to time, with respect to the carriage of political advertisements and programming (including, without limitation, the rights of candidates and, as appropriate, others to “equal opportunities”) and the charges permitted therefor; provided, however, that in the event that Owner, in its sole discretion, determines that Broker is failing to comply with such statutes and FCC Rules, upon Owner’s instruction to such effect, Broker shall immediately cease and desist from carrying political advertisements and programming. If any programming or other material submitted for broadcast by Broker triggers equal access and/or related obligations to competing political candidates under the Communications act of 1934, as amended, and/or the FCC Rules, Broker shall be responsible to provide any broadcast time so required and to ensure compliance with the Communications Act of 1934, as amended, and the rules, regulations and policies of the FCC.

2.2    Respectful of Faiths.    The subject of religion and references to particular faiths, tenants, and customs shall be treated with respect at all times.

2.3    No Denominational Attacks.    Programs shall not be used as a medium for attack on any faith, denomination, or sect, or upon any individual or organization.

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2.4    Controversial Issues.    Broker shall use reasonable efforts to ensure that any discussion of controversial issues of public importance shall be reasonably balanced with the presentation of contrasting viewpoints in the course of overall programming through the use of hosts, guests and callers expressing a variety of viewpoints. To the extent required in accordance with the FCC Rules, Owner may require that responsive program be aired if any programming contains (x) attacks on the honesty, integrity, or like personal qualities of any person or group of issues of public importance or (y) during the course of political campaigns, editorializing about individual candidates.

2.5    Donation Solicitation.    Requests for donations in the form of a specific amount, for example, $1.00 to $5.00, shall not be made if there is any suggestion that such donation will result in miracles, cures or prosperity. However, statements generally requesting donations to support the broadcast, church or other entity may be permitted.

2.6    Treatment of Parapsychology.    The advertising or promotion of fortune telling, occultism, astrology, phrenology, palm reading, numerology, mind-reading, character readings, or subject of like nature is not permitted.

2.7    No Ministerial Solicitations.    No invitations by the minister or other individual appearing on the program to have listeners come and visit him or her for consultation or the like shall be made if such invitation implies that the listeners will receive consideration, monetary gain, or cures for illness.

2.8    No Vending of Miracles.    Any exhortation to listeners to bring money to a church affair or service is prohibited if the exhortation, affair, or service contains any suggestion that miracles, cures, or prosperity will result.

2.9    Sale of Religious Artifacts.    The offering for sale of religious artifacts or other items for which listeners would send money is prohibited unless such items are readily available in ordinary commerce or are clearly being sold for legitimate fundraising purposes.

2.10    No Miracle Solicitation.    Any invitations to listeners to meet at places other than the church and/or to attend other than regular services of the church is prohibited if the invitation, meeting, or service contains any claim that miracles, cures, or prosperity will result.

2.11    No Claims of Undocumented Miracles.    Any claims of miracles or cures not documented in biblical scripture and quoted in context are prohibited; e.g., this prohibits the minister and/or other individual appearing on the program from personally claiming any cures or miracles and also prohibits the presentation of any testimonials regarding such claims either in person or in writing.

2.12    Contests.    All contest-type programs and promotions must first be submitted to Owner for approval at least thirty (30) days prior to airing. In the event that such programs and/or promotions are not submitted by the Broker for prior approval, Owner may refuse to permit the airing thereof, in addition to such other rights and remedies which Owner may have as a result of the breach of the Agreement by Broker.

2.13    No Lotteries.    Announcements giving any information about lotteries or games prohibited by federal or state law or regulation are prohibited.

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2.14    No “Dream Books”.    References to “dream books,” the “straight line,” or other direct or indirect descriptions or solicitations relative to the “numbers game,” or the “policy game,” or any other form of gambling are prohibited.

2.15    No Numbers Games.    References to chapter and verse numbers, paragraph numbers, or song numbers, which involve three digits should be avoided and, when used, must relate to the overall theme of the program.

2.16    Required Announcements.    Broker shall broadcast (i) an announcement at the beginning and end of each program, and hourly, as appropriate, to indicate that program time has been purchased by Broker, and (ii) any other announcement that may be required by law, regulation or Station policy.

2.17    Credit Terms Advertising.    Pursuant to rules of the Federal Trade Commission, no advertising of credit terms shall be made over the Station beyond mention of the fact that, if desired, credit terms are available.

2.18    No Illegal Announcements.    No announcements or promotion prohibited by federal or state law or regulation of any lottery or game shall be made over the Station. Any game, contest, or promotion relating to or to be presented over the Station must be fully stated and explained in advance to Owner, which reserves the right in its sole discretion to reject any game, contest or promotion.

2.19    Owner Discretion Paramount.    In accordance with Owner’s responsibility under the Communications Act of 1934, as amended, and the FCC Rules, Owner reserves the right to reject or terminate any advertising proposed to be presented or being presented over the Station which is in conflict with Station policy or which in the reasonable judgment of Owner or its General Manager or Chief Engineer would not serve the public interest.

2.20    Programming Prohibitions.    Broker shall not broadcast any of the following programs or announcements:

A.    False Claims.    False or unwarranted claims for any product or service.

B.    Unfair Imitation.    Infringements of another advertiser’s rights through plagiarism or unfair imitation of either program idea or copy, or any other unfair competition.

C.    Commercial Disparagement.    Any disparagement of competitors or competitive goods.

D.    Profanity.    Any programs or announcements that are slanderous, defamatory, obscene, profane, indecent, vulgar, repulsive or offensive, either in theme or treatment. Depictions of violence should be minimized, and may not promote or espouse the use of such violence.

E.    Price Disclosure.    Any price mentions except as permitted by Owner’s policies current at the time.

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F.    Unauthenticated Testimonials.    Any testimonials which cannot be authenticated.

G.    Descriptions of Bodily Functions.    Any continuity which describes in a repellent manner internal bodily functions or symptomatic results of internal disturbances, and no reference to matters which are not considered acceptable topics in social groups.

H.    Conflict Advertising.    Any advertising matter or announcement which may, in the reasonable opinion of Owner, be injurious or prejudicial to the interest of the public, the Station or honest advertising and reputable business in general.

I.    Fraudulent or Misleading Advertisement.    Any advertising matter, announcement or claim which Broker knows to be fraudulent, misleading or untrue.

J.    Advertisements.    All advertising and other paid or bartered announcements included in the program must meet sponsorship identification requirements. No advertisements for cigarettes or tobacco products may be presented.

K.    Clearance and Releases.    Programs may not include material taped from other broadcast stations without all necessary consents in writing. Program may not include taped telephone calls without all necessary consents in writing. All copyright licenses, right of publicity releases and other necessary clearances must be obtained by the program supplier.

Owner may waive any of the foregoing regulations in specific instances if, in its reasonable opinion, good broadcasting in the public interest will be served thereby. In any case where questions of policy or interpretation arise, Broker shall submit the same to Owner for decision before making any commitments in connection therewith.

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EX-10.21

Exhibit 10.21

FIRST AMENDMENT TO LOCAL MARKETING AGREEMENT

This First Amendment to Local Marketing Agreement (this “First Amendment”), dated as of November     , 2001, to the Local Marketing Agreement, dated as of March 15, 2001, by and among the parties hereto (as amended hereby, the “LMA”) is entered into by and among LIBERMAN BROADCASTING OF HOUSTON, INC., a California corporation (the “Owner”) and HOUSTON BROADCASTING COMPANY, L.P., a Texas limited partnership (the “Broker”). Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the LMA.

RECITALS

WHEREAS, the parties hereto are parties to the LMA pursuant to which Station has made available airtime on KSEV(AM), Tomball, Texas (the “Station”), to Broker in exchange for the consideration provided for in the LMA and subject to the terms and conditions thereof; and

WHEREAS, the parties desire to amend the LMA as set forth below.

NOW, THEREFORE, in consideration of the mutual agreements contained herein and for other good and valuable consideration, the value, receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

AGREEMENT

1.    Amendment to Section 9.2 of the LMA.    Section 9.2 of the LMA shall be amended by inserting “$10,000” in lieu of the reference to “$20,000” in the sixth sentence thereof.

2.    Clarification of Engineering Expenses.    The parties agree and acknowledge that (i) Owner’s payment for 2001 shall be $833.33 and (ii) payments to be made pursuant to Section 9.2 represent the only payment obligation of Owner to Broker with respect to the performance of engineering services for the station.

3.    Miscellaneous.

a.    Governing Law.    This First Amendment shall be governed by and interpreted under the laws of the State of Texas, without regard to principles of choice or conflict of laws thereof.

b.    Counterparts.    This First Amendment may be executed in any number of counterparts, and by the parties hereto on the same or separate counterparts, and each such counterpart, when executed and delivered, shall be deemed to be an original, but all such counterparts shall together constitute but one and the same First Amendment.

c.    Reference to LMA.    Except as herein amended, the LMA shall remain in full force and effect and is hereby ratified in all respects. On and after the

effectiveness of this First Amendment, each reference in the LMA to “this Agreement,” “hereunder,” “hereof,” “herein” or words of like import, and each reference to the LMA in any other agreements, documents or other instruments executed and delivered pursuant to or in connection with the LMA shall mean and be a reference to the LMA as amended through this First Amendment.

d.    Successors.    This First Amendment shall be binding upon the parties hereto and their respective successors and assigns, and shall inure to the benefit of the parties hereto and their respective successors and assigns.

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IN WITNESS WHEREOF, the parties hereto have executed and delivered this First Amendment on the date first written above.

LIBERMAN BROADCASTING OF HOUSTON, INC.
By:	/s/    Lenard D. Liberman
	Lenard D. Liberman, Esq.
	Executive Vice President
Date:	November     , 2001
HOUSTON BROADCASTING COMPANY, L.P.
	By:    PAT-RICH, LLC
	Its:    General Partner
	/s/    William Michael Richards
	William Michael Richards
	President
	Date:    November     , 2001

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By their execution of this acknowledgement, the undersigned, as Guarantors under that certain Guaranty (the “Guaranty”) in favor of Owner with respect to the LMA, hereby acknowledge that they have read this First Amendment and consent to the terms thereof and further hereby confirm and agree that, notwithstanding the effectiveness of the First Amendment, the obligations of the undersigned under the Guaranty shall not be impaired or affected and the Guaranty is, and shall continue to be, in full force and effect and is hereby confirmed and ratified in all respects.

WILLIAM MICHAEL RICHARDS
By:	/s/    William Michael Richards
Date:	November     , 2001
Address:
1217 North Horseshoe Drive
Sugar Land, Texas 77478
CYNTHIA SUE RICHARDS
By:	/s/    Cynthia Sue Richards
Date:	November     , 2001
Address:
1217 North Horseshoe Drive
Sugar Land, Texas 77478

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By their execution of this acknowledgement, the undersigned, as Guarantors under that certain Guaranty (the “Guaranty”) in favor of Owner with respect to the LMA, hereby acknowledge that they have read this First Amendment and consent to the terms thereof and further hereby confirm and agree that, notwithstanding the effectiveness of the First Amendment, the obligations of the undersigned under the Guaranty shall not be impaired or affected and the Guaranty is, and shall continue to be, in full force and effect and is hereby confirmed and ratified in all respects.

DAN SCOTT GOEB
By:	/s/    Dan Scott Goeb
Date:	November     , 2001
Address:
3307 Winding Way
Katy, Texas 77450
JANET LEA PATRICIA GOEB
By:	/s/    Janet Lea Patricia Goeb
Date:	November     , 2001
Address:
3307 Winding Way
Katy, Texas 77450

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EX-10.22

Exhibit 10.22

TIME BROKERAGE AGREEMENT FOR KJOJ(AM)

THIS TIME BROKERAGE AGREEMENT (this “Agreement”) is entered into as of November 6, 2001 by and between Liberman Broadcasting of Houston, Inc., a California corporation (the “Owner”) which is the owner and operator of KJOJ(AM), Conroe, Texas (the “Station”), licensed to its wholly owned subsidiary, Liberman Broadcasting of Houston License Corp., and Little Saigon Radio Broadcasting, Inc., a California corporation (the “Programmer”).

SECTION I.

LEASE OF STATION AIR TIME

1.1    Representations.    Each of Owner and Programmer represents to the other (i) that it is legally qualified and able to enter into this Agreement, (ii) that the execution, delivery and performance hereof does not constitute a breach or violation of any agreement, contract or other obligation to which it is subject or by which it is bound and (iii) that this Agreement constitutes the legal, valid and binding obligation of such party, enforceable in accordance with its terms.

1.2    Term.    Subject to the termination provisions of Section 5, the term of this Agreement shall be the Initial Term and the Renewal Term, if any (collectively, the “Term”). The initial term of this Agreement shall commence at 12:01 AM on November 19, 2001 (the “Effective Date”) and shall extend through November 18, 2006 (the “Initial Term”). Unless this Agreement shall have been earlier terminated or either party shall have notified the other party hereto, on or before May 17, 2006, of such party’s intent to terminate this Agreement upon the expiration of the Initial Term, this Agreement shall, without any further act by either party, continue for an additional period of five years to commence November 19, 2006 and extend through November 18, 2011 (the “Renewal Term”).

1.3    Scope.

1.3.1    During the Term of this Agreement, and subject to Owner’s reasonable prior approval, Programmer shall provide programming for broadcast on the Station 24 hours-per-day, 7 days per week provided that Owner may broadcast up to two (2) hours of programming per week which is aimed at serving the needs and interests of the Station’s community of license during the morning(s) of Saturday and/or Sunday in accordance with Section 2.4 of this Agreement. Owner shall make such time available to Programmer on the Station, and Programmer shall deliver programming at its expense to the Station’s transmitter facilities or other authorized remote control points as reasonably designated by Owner. Programmer shall have the right to change the programming it supplies to Owner and shall, to the extent feasible, give Owner at least twenty-four hours notice of substantial and material changes in such programming.

1.4    Consideration.

1.4.1    Programmer shall pay Owner the payments as is set forth on Exhibit A hereto. Programmer shall pay Owner such amounts in not more than two monthly installments

(each of which must equal at least 50% of the monthly payment amount), due no later than the 1st and 15th day of the preceding calendar month.

1.4.2    Any payment provided for in Section 1.4.1 not made within five calendar days after the due date thereof shall (i) entitle Owner to terminate this contract without notice, notwithstanding Section 5 of this Agreement, or (ii) at Owner’s sole discretion, be subject to a late charge of the lesser of (A) ten (10.0%) of the total amount due or (B) the highest rate allowed by applicable law, compounded monthly.

1.5    Credit of Payments for Lost Air Time.    If, for any reason, other than the actions of Programmer, the Station suffers a loss of broadcast service for any period of six (6) consecutive hours or more, then, to the extent that such loss causes Programmer to lose air time beyond the initial period of six (6) consecutive hours, Owner shall credit Programmer the amount of money which Programmer paid for such air time so lost by Programmer in accordance with the rates set forth on Exhibit A; provided, however, that no credit shall be given for the initial six (6) hour period. Such credit shall be Owner’s sole compensation to Programmer for air time so lost. Owner shall have no other liability to Programmer or any third party pursuant to the terms of this Section.

1.6    Third-Party Contracts; Resale.    Programmer will not enter into any third-party contracts, leases or agreements which will bind Owner in any way except with Owner’s prior written approval. Programmer agrees that it will not resell or otherwise transfer all or any portion of the airtime it is purchasing under this Agreement without the express prior written consent of Owner; provided, however, that the foregoing shall not be construed to prohibit Programmer from selling air time to third parties for advertising that is in compliance with the terms of this Agreement. Any such sale or transfer without such prior written consent shall be void and of no force or effect. Owner will not enter into any third-party contracts, leases or agreements which will bind Programmer in any way except with Programmer’s prior written approval.

1.7    Use of the Station’s Studio.    Subject to Owner’s own programming needs and its discretion, Owner agrees to provide Programmer with access to the Station’s facilities including the Station studio and broadcast equipment for use by Programmer, if it so desires, but Programmer shall use such studio and equipment only for the purpose of producing programming for the Station.

1.8    Accounts Receivable.    Programmer shall have no interest in any cash accounts receivable for broadcasts on the Station which occur prior to the Effective Date. All revenues and cash accounts receivable for broadcasts on the Station following the Effective Date shall belong to Programmer except that those revenues and accounts receivable which relate to public affairs programming broadcast by Owner in accordance with Section 2.4 hereof shall, in each case, belong to Owner. Additionally, and for the avoidance of doubt, any other revenue derived from the operation of the Station or its facilities shall belong to Owner. Programmer may sell advertising time consistent with the applicable rules and regulations and the Policy Statement (as defined below) on the Station in combination with any other broadcast station of its choosing, subject to compliance with applicable law. Programmer shall be responsible for payment of the commissions due to any national sales representative, local sales representative,

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agency or employee engaged by it for the purpose of selling advertising that is carried during the programming it provides to Owner.

SECTION II.

OBLIGATIONS OF THE PARTIES

2.1    Division of Expenses.    Owner will provide and be responsible for (i) the Station personnel necessary for maintenance and operation of the Station’s transmission facilities (including without limitation a Chief Operator), and will be responsible for the salaries, taxes, insurance and related costs for all Station personnel used in the maintenance and operation of the Station’s transmission facilities, (ii) all real and personal property taxes, mortgage fees and expenses and other real property costs (including insurance), in each case, related to Owner’s real property, (iii) all transmitter site leases and any lease payments related to the Station’s studios located at 11767 Katy Freeway, Suite 1170, Houston, Texas 77079 (v) any utilities (excluding telephone charges), and (vi) all costs and expenses for the maintenance of all transmitter equipment, as determined by Owner in its sole discretion. Whenever on the Station’s premises, all personnel shall be subject to the supervision and the direction of Owner’s General Manager and/or the Station’s Chief Operator. Except as set forth in the foregoing sentences of this Section 2.1, Programmer shall be responsible for all other expenses involved in the operation of the Station including, without limitation, (i) all operating expenses of the Station (including telephone expenses and expenses related to sales, marketing, promotion, advertising, billing and collections and traffic), (ii) all costs and expenses for maintenance of Programmer’s studio equipment, (iii) the employment and salaries, taxes, insurance and related costs for all personnel used in the production of its programming, including salespeople, traffic personnel, board operators and programming staff and (iv) all copyright fees attributable to Programmer’s programming broadcast on the Station, including, without limitation, all ASCAP, BMI and SESAC fees, and fees for any other necessary music performance rights, as determined in the sole discretion of Owner.

2.2    Control.

2.2.1    Notwithstanding anything to the contrary in this Agreement, Owner shall have full authority and power over the management and operation of the Station during the period of this Agreement including operations with respect to the Station’s finances, personnel, and programming. The parties agree that Owner’s authority includes but is not limited to the right to reject or refuse such portions of the Programmer’s programming which Owner believes, in its sole discretion, to be contrary to the public interest, the Communications Act of 1934, as amended (the “Act”), the rules and regulations of the Federal Communications Commission (the “FCC Rules”), any other applicable law or the Policy Statement (as defined in Section 3.1).

2.2.2    Upon written notice to Programmer (to the extent time permits such notice), Owner may suspend or cancel such program, commercial announcement or promotional material or any portion thereof and substitute its own programming or require Programmer to provide suitable programming, commercial announcement or other announcement or promotional material including, without limitation, retractions, in the event Owner determines in good faith, but in its sole discretion, that slanderous or defamatory material may have been broadcast. Upon making such a good faith determination, Owner may take such measures

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without: (i) creating any liability to Programmer or any other third party on the part of Owner or (ii) limiting Owner’s indemnification rights pursuant to Section 4.1, or any of its other rights pursuant to Section 3.1 or any other applicable provision of this Agreement. In no event shall Programmer, or Programmer’s employees, represent, depict, describe or portray Programmer as Owner of the Station. To this end, all employees of Programmer, whose work involves the Station, shall be informed as to Owner’s ultimate control over the Station and Programmer’s subordinate capacity.

2.2.3    Owner shall provide and pay for the General Manager of the Station, who shall report and be accountable solely to Owner and who shall be responsible for the direction of the day-to-day operation of the Station to the extent required pursuant to the FCC Rules. Owner shall retain control over the policies, programming and operations of the Station, including without limitation the right to decide whether to accept or reject any programming or advertisements, the right to pre-empt any programs in order to broadcast a program deemed by Owner to be of greater national, regional or local interest, and the right to take any other actions necessary for compliance with the laws of the United States, the State of Texas, the rules, regulations and policies of the FCC, including the prohibition on unauthorized transfers of control and multiple ownership of stations, and the rules, regulations and policies of other federal governmental authorities, including the Federal Trade Commission and the Department of Justice.

2.2.4    Owner shall at all times be solely responsible for meeting all of the FCC’s requirements with respect to public service programming, for maintaining the political and public inspection files and the Station log, for the sale of political advertising, and for the preparation of all programs/issues lists. Nothing in this Agreement shall abrogate Owner’s unrestricted authority to discharge its obligations to the public and to comply with the Act and the FCC Rules.

2.2.5    Pursuant to Note 2(k)(3) to Section 73.3555 of the FCC Rules, Owner certifies that it maintains ultimate control over the Station’s facilities, including specifically control over station finances, personnel and programming, and Programmer certifies that this Agreement complies with the provisions of Sections 73.3555(a), (c) and (d) of the FCC Rules.

2.3    Programmer’s Responsibilities with Respect to Operation of Station.    At Owner’s request, Programmer shall cooperate with and assist Owner in complying with the FCC Rules and the other rules and regulations referenced in Section 2.2. Programmer shall cause the Station to transmit any required tests of the Emergency Alert System at such times as are directed by Owner. Programmer shall prepare, maintain and deliver to Owner all records and information required by the FCC to be placed in the public inspection files of the Station pertaining to the broadcast of political programming and advertisements, in accordance with the provisions of Sections 73.1940 and 73.3526 of the FCC’s rules, and agrees to broadcast sponsored programming addressing political issues, in accordance with the provisions of Section 73.1212 of the FCC’s rules. Programmer also shall consult with Owner and adhere strictly to all applicable statutes and the rules, regulations and policies of the FCC, as announced from time to time, with respect to the carriage of political advertisements and programming (including, without limitation, the rights of candidates and, as appropriate, others to “equal opportunities”) and the charges permitted therefor; provided, however, that in the event that Owner, in its sole

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discretion, determines that Programmer is failing to comply with such statutes and FCC Rules, upon Owner’s instruction to such effect, Programmer shall immediately cease and desist from carrying political advertisements and programming. Programmer shall furnish within its programming, on behalf of Owner, all station identification announcements required by the FCC’s rules. Programmer shall provide information with respect to any of its programming which is responsive to the public needs and interests of the area served by the Station so as to assist Owner in the preparation of any required programming reports, and provide other information to enable Owner to prepare other records, reports and logs required by the FCC or other local, state or federal governmental agencies. Programmer shall promptly provide Owner with copies of all correspondence and complaints received from the public (including any telephone logs of complaints called in), copies of all program logs and promotional materials. All studio facilities used by Programmer shall comply with FCC Rules related to the location and staffing thereof.

2.4    Public Affairs; Special Events.    Notwithstanding any other provision of this Agreement, Programmer recognizes that Owner has certain obligations to broadcast programming to meet the needs and interests of the community of license for the Station. Owner shall have the right to air specific programming on issues of importance to the local community. Nothing in this Agreement shall abrogate the unrestricted authority of Owner to discharge its obligations to the public and to comply with the FCC Rules with respect to meeting the ascertained needs and interests of the public. Accordingly, Owner may broadcast public affairs programming in either one (1) hour blocks during the hours of 5am to 6am Saturday and Sunday; provided, however, that if Owner determines that it needs additional time or an alternative regularly scheduled time in order to meet its obligations as an FCC licensee Programmer shall make such time available to Owner. Additionally, Owner shall have the right, in its reasonable discretion, to pre-empt any of the broadcasts of the programs supplied by Programmer, and to use part or all of the hours of operation of the Station for the broadcast of events of special importance. In all such cases, Owner will use its best efforts to give Programmer reasonable advance notice of its intention to pre-empt programming and, in the event of such pre-emption, Programmer shall receive a credit for such time as may be pre-empted by Owner.

SECTION III.

STATION PROGRAMMING POLICIES

3.1    Broadcast Station Programming Policy Statement.    Owner has adopted a Broadcast Station Programming Policy Statement (the “Policy Statement”), a copy of which is attached as Exhibit B and which may be amended from time to time by Owner upon notice to Programmer. Programmer agrees and covenants to comply in all material respects with the Policy Statement, with the Act and all FCC Rules, and with all changes subsequently made by Owner or the FCC. Programmer shall furnish or cause to be furnished the artistic personnel and material for the programs as provided by this Agreement and all programs shall be prepared and presented in conformity with the Act, the FCC Rules and with the Policy Statement. All advertising spots and promotional material or announcements shall comply with the Act, the FCC Rules, and all other applicable federal, state and local regulations and policies and the Policy Statement, and shall be produced in accordance with quality standards established by Programmer. If Owner in its sole discretion determines in good faith that a program, commercial announcement or promotional material, or any portion thereof, supplied by Programmer is

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contrary to the public interest, or does not comply with the Policy Statement, the Act or the FCC Rules, it may act pursuant to Section 2.2.2. The submission by Programmer of any programming, announcement, advertising or other matter that is slanderous, defamatory, obscene or indecent and therefore in violation of the Policy Statement, or that is otherwise in violation of the Policy Statement, shall constitute a material breach of this Agreement, and shall entitle Owner, at its sole discretion, to terminate this Agreement immediately, effective within 24 hours of notice by Owner to Programmer of such termination (or, if the giving of such notice is impractical, as determined by Owner in good faith, in the absence of such notice), notwithstanding the provisions of Section 5.

3.2    Programmer Compliance with Copyright Act.    Programmer represents and warrants to Owner that Programmer has full authority to broadcast its programming on the Station, and that Programmer shall not broadcast any material in violation of the Copyright Act. All music supplied by Programmer shall be (i) licensed by ASCAP, SESAC or BMI, (ii) in the public domain, or (iii) cleared at the source by Programmer. The right to use the programming and to authorize its use in any manner shall be and remain vested in Programmer.

3.3    Plugola/Payola.    Programmer agrees that it will comply with the Policy Statement regarding the prohibition against plugola and payola in accordance with the Act and FCC Rules.

SECTION IV.

INDEMNIFICATION

4.1    Programmer’s Indemnification.    Programmer shall indemnify and hold harmless Owner and its officers, directors, employees, affiliates and agents (the “Owner Parties”) from and against any and all claims, losses, costs, liabilities, damages, expenses, judgments, amounts paid in settlement and FCC fines or forfeitures or in response to any FCC enforcement investigation (including, in each case, all reasonable legal fees and other expenses incidental thereto) of every kind, nature and description, including but not limited to, slander or defamation arising out of Programmer’s broadcasts, sale of advertising time and related conduct in connection with this Agreement and the actions and conduct of Programmer’s principals, employees, agents and representatives acting in connection with this Agreement (except insofar as such liability arises from Owner’s willful misconduct) to the fullest extent permitted by law.

SECTION V.

TERMINATION AND REMEDIES UPON DEFAULT

5.1.    Events of Default.    The following shall constitute events of default (the “Events of Default”) under the Agreement:

5.1.1    Non-Payment.    The Programmer’s failure to pay any broadcast fee pursuant to Section 1 when due.

5.1.2    Non-Timely Delivery of Program Materials.    Programmer’s failure to deliver programs in a timely fashion.

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5.1.3    Default in Covenants.    The default by Programmer or by Owner in the performance of any material covenant, condition or undertaking contained in this Agreement (other than defaults governed by Sections 3.1, 5.1 or 5.2, which, in each case, shall be governed by such sections).

5.1.4    Adverse Legal Action.    If Programmer shall (a) make a general assignment for the benefit of creditors, (b) file or have filed against it a petition for bankruptcy, for reorganization or an arrangement, or for the appointment of a receiver, trustee or similar creditors’ representative for the property or assets of Programmer under any federal or state insolvency law, which, if filed against Programmer, has not been dismissed or discharged within thirty (30) days thereof.

5.1.5    Breach of Representation.    If any representation or warranty made by Owner or Programmer in this Agreement, or in any certificate or document furnished by Programmer to Owner pursuant to the provisions of this Agreement, shall prove to have been false or misleading in any material respect as of the time furnished.

5.2    Cure Periods.    Notwithstanding anything in Section 5.1 to the contrary, with respect to Sections 5.1.3 and 5.1.5, no Event of Default shall be deemed to have occurred until the non-defaulting party has provided the party in default with written notice specifying the event or events that, if not cured, would constitute an Event of Default and specifying the actions necessary to cure the default(s) and the defaulting party shall have failed to have cured such default within thirty days after receipt of such notice. This period may be extended for a reasonable period of time if the defaulting party is acting in good faith to cure and such delay is not materially adverse to the non-defaulting party.

5.3    Termination Upon Default.    Upon the occurrence of an Event of Default, the non-defaulting party may immediately terminate this Agreement, provided that it is not also in material default of this Agreement. Notwithstanding the foregoing, this Agreement: (a) shall terminate immediately, without notice to Programmer or any further action by Owner or any other person, upon Programmer’s making a general assignment for the benefit of creditors, or filing a petition for bankruptcy, for reorganization or an arrangement, or for the appointment of a receiver, trustee or similar creditors’ representative for the property or assets of Programmer under any federal or state insolvency law; and (b) shall terminate at the end of the thirtieth (30th) day after any person has filed against Programmer a petition for bankruptcy, for reorganization or an arrangement, or for the appointment of a receiver, trustee or similar creditors’ representative for the property or assets of Programmer under any federal or state insolvency law, unless such petition has been dismissed or discharged by such time. In no event shall Owner have any liability for consequential, special, incidental, or lost profits damages. In no event shall termination extinguish any rights of Owner pursuant to Section 4.

5.4.    Sale of Station or Change of Format.    If the FCC licenses for the Station are assigned or transferred during the term of this Agreement, Owner’s obligations under the Agreement will be satisfied by the assignment to and acceptance of those obligations by the successor owner of the Station or such owner’s affiliate.

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5.5.    Termination Upon Order of Judicial or Governmental Authority.    If any court of competent jurisdiction or any federal, state or local governmental authority designates a hearing with respect to the continuation or renewal of any license or authorization held by Owner for the operation of the Station, advises any party to this Agreement of its intention to investigate or to issue a challenge to or a complaint concerning the activities permitted by this Agreement, or orders the termination of the Agreement and/or the curtailment in any manner material to the relationship between the parties to this Agreement of the provision of programming by Programmer, with the concurrence of Owner, Programmer shall have the option to seek administrative or judicial appeal of or relief from such order(s), in which event Owner shall cooperate with Programmer provided that Programmer shall be responsible for legal fees incurred in such proceedings, or Programmer shall notify Owner that the Agreement will be terminated in accordance with such order(s). If the FCC designates the renewal application of the Station for a hearing as a consequence of this Agreement or for any other reason, Programmer shall cooperate and comply with any reasonable request of Owner to assemble and provide to the FCC information relating to Programmer’s performance under this Agreement, at Programmer’s expense. Upon termination following such governmental order(s), Programmer shall pay to Owner any fees due but unpaid as of the date of termination as may be permitted by such order(s), and Owner shall reasonably cooperate with Programmer to the extent permitted to enable Programmer to fulfill advertising or other programming contracts then outstanding. Thereafter, neither party shall have any liability to the other.

5.6    Force Majeure.    In the event of a failure or impairment of the Station’s facilities or any delay or interruption in the broadcast of programming, or failure at any time to furnish facilities, in whole or in part, for broadcast, due to Acts of God, strikes, lockouts, material or labor restrictions by any governmental authority, civil riot, floods, earthquakes and any other cause not reasonably within the control of Owner, each party hereunder shall be excused from performance under this Agreement during the period of such failure or impairment; subject, however, to the provisions of Section 1.5.

SECTION VI.

MISCELLANEOUS

6.1    Assignment.    This Agreement shall be binding upon and inure to the benefit of the parties hereto, their successors and assigns, provided, however, that Programmer may not assign its rights and obligations under this Agreement without the prior written consent of Owner, such consent not to be unreasonably withheld. In the event of any such an assignment or succession in accordance with this Agreement, all references herein to Programmer or Owner, as the case may be, shall be deemed to refer to such assignee or successor.

6.2    Governing Law.    The obligations of Owner and Programmer are subject to applicable federal, state and local law, rules and regulations, including, but not limited to, the Act and the FCC Rules. The construction and performance of the Agreement will be governed by the laws of the State of California.

6.3    Notices.    Any notice, demand or request given under the provisions of the Agreement shall be in writing and shall be deemed to have been duly delivered on the date of personal delivery or on the date of receipt if mailed by registered or certified mail, postage

8

prepaid and return receipt requested, or if delivered by overnight courier, and shall be deemed to have been received on the date of personal delivery or on the date set forth on the return receipt, to the following addresses, in the case of Owner, by notifying Programmer, and in the case of Programmer, by notifying Owner.

To Owner:	Copy to:
Liberman Broadcasting of Houston, Inc.	O’Melveny & Myers LLP
c/o Liberman Broadcasting, Inc.	400 South Hope Street
1845 Empire Ave.	15th Floor
Burbank, California 91504	Los Angeles, California 90071-2899
Attn: Lenard D. Liberman, Esq.	Attn: Joseph K. Kim

To Programmer:

Little Saigon Radio Broadcasting, Inc.

15781 Brookhurst Street, #101

Westminster, California 92683

Attn: Ninh Quang Vu

6.4    Invalidity.    If any provision of this Agreement or the application thereof to any person or circumstances shall be held invalid or unenforceable to any extent, the parties shall negotiate in good faith and attempt to agree on an amendment to this Agreement that will provide the parties with substantially the same rights and obligations, to the greatest extent possible, as the original Agreement in valid, binding and enforceable form.

6.5    Attorneys’ Fees.    In the event of any legal action to enforce the terms of this Agreement, the prevailing party in any such action shall be entitled to recover from the losing party the prevailing party’s costs and reasonable attorneys’ fees and other expenses incidental thereto incurred in connection with any such action.

6.6    Modification and Waiver.    No modification or waiver of any provision of the Agreement shall be effective unless made in writing and signed by the party adversely affected, and any such waiver and consent shall be effective only in the specific instance and for the purpose for which such consent was given.

6.7    No Waiver; Remedies Cumulative.    No failure or delay on the part of Owner or Programmer in exercising any right or power under this Agreement 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 waiver of any breach of this Agreement by any party hereto shall not be deemed to be a waiver of any preceding or subsequent breach under this Agreement. The rights and remedies of the parties to this Agreement are cumulative and are not exclusive of any rights or remedies which either may otherwise have.

6.8    Headings.    The headings contained in this Agreement are included for convenience only and shall not in any way alter the meaning of any provision.

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6.9    Counterpart Signatures.    This Agreement may be signed in one or more counterparts, each of which shall be deemed a duplicate original and be binding on the parties to this Agreement.

6.10    Entire Agreement.    This Agreement embodies the entire agreement between the parties and there are no other agreements, representations, warranties, or understandings, or written, between them with respect to the subject matter hereof.

6.11    Severability.    In the event that any of the provisions contained in this Agreement is held to be invalid, illegal or unenforceable, it shall not affect any other provision hereof, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had not been contained herein.

[Remainder of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first above written.

LIBERMAN BROADCASTING OF HOUSTON, INC.
By:	/s/    LENARD D. LIBERMAN
Its:	Executive Vice President
LITTLE SAIGON RADIO BROADCASTING, INC.
By:	/s/    NINH QUANG VU
	Ninh Quang Vu
Its:	President

Exhibit A

Payments

In consideration for the airtime supplied to Programmer pursuant to this Agreement, Programmer shall provide the following consideration to Owner.

A.    Monthly Rates

In accordance with Section 1.4 of the Agreement, Programmer shall make monthly payments in the following amounts:

Year	Rate
Effective Date through November 30, 2002	$30,000 per month plus a prorated portion of the $30,000 monthly amount for the remainder of November 2001 to be paid upon execution of the Agreement.

Effective December 1, 2002, the amounts set forth above shall be automatically increased, without any further action of the parties, by an amount equivalent to the greater of (A) the increase in the Consumer Price Index for the relevant year, rounded upward to the next highest whole number or (B) five percent (5%). An increase in accordance with the formula set forth in the preceding sentence shall occur on each subsequent December 1 of the Term.

B.    Costs

Programmer shall promptly reimburse Owner for any amounts paid by Owner which represents costs which Programmer has agreed to assume pursuant to the Agreement

Exhibit B

KJOJ(AM) Station Programming Policy

1.    Broadcast Content and Technical Requirements.    All programs delivered to Liberman Broadcasting of Houston, Inc. (“Owner”) for airplay shall be professional broadcast quality.

1.1    Owner reserves the right to review any program at any time for its suitability for airing either for unacceptable content or poor technical quality.

1.2    Owner reserves the right not to broadcast any material at any time due to either unacceptable content or poor technical quality. Little Saigon Radio (“Programmer”) shall remain obligated to pay for airtime.

1.3    Any and all transmission of Programmer programming to Owner is the responsibility of the Programmer.

1.4    Owner is responsible for and will provide all station IDs, public service announcements and community affairs programming.

2.    Regulations and Guidelines.    All programming shall conform to all requirements under the Communications Act of 1934, as amended, all rules regulations and policies of the Federal Communications Commission (the “FCC Rules”) and this KJOJ(AM) Station Programming Policy as each may be amended from time to time. The program may not disserve the public interest, as determined by Owner in good faith. Programmer agrees to cooperate with Owner in the broadcasting of programs of the highest possible standard of excellence and for this purpose to observe the following regulations in the preparation, writing and broadcasting of its programs.

2.1    Political & Editorial Content.    Any and all editorial opinion, political candidate or ballot proposition endorsements and non-paid political candidate appearances shall be conducted in accordance with the FCC Rules. Programmer also shall consult with Owner and adhere strictly to all applicable statutes and the rules, regulations and policies of the FCC, as announced from time to time, with respect to the carriage of political advertisements and programming (including, without limitation, the rights of candidates and, as appropriate, others to “equal opportunities”) and the charges permitted therefor; provided, however, that in the event that Owner, in its sole discretion, determines that Programmer is failing to comply with such statutes and FCC Rules, upon Owner’s instruction to such effect, Programmer shall immediately cease and desist from carrying political advertisements and programming. If any programming or other material submitted for broadcast by Programmer triggers equal access and/or related obligations to competing political candidates under the Communications act of 1934, as amended, and/or the FCC Rules, Programmer shall be responsible to provide any broadcast time so required and to ensure compliance with the Communications Act of 1934, as amended, and the rules, regulations and policies of the FCC.

2.2    Respectful of Faiths.    The subject of religion and references to particular faiths, tenants, and customs shall be treated with respect at all times.

2.3    No Denominational Attacks.    Programs shall not contain any personal attacks within the meanings of the FCC’s personal attack rule (currently codified at 47 CFR §73.1920).

2.4    Controversial Issues.    Programmer shall use reasonable efforts to ensure that any discussion of controversial issues of public importance shall be reasonably balanced with the presentation of contrasting viewpoints in the course of overall programming through the use of hosts, guests and callers expressing a variety of viewpoints. To the extent required in accordance with the FCC Rules, Owner may require that responsive program be aired if any programming contains (x) attacks on the honesty, integrity, or like personal qualities of any person or group of issues of public importance or (y) during the course of political campaigns, editorializing about individual candidates.

2.5     Contests.    All contest-type programs and promotions must comply with Section 73.1216 of the FCC Rules and all other applicable federal, state and local laws. In the event that Owner determines that such programs and promotions do not comply with the foregoing or are otherwise in poor taste, Owner may refuse to permit the airing thereof, in addition to such other rights and remedies which Owner may have under the Agreement including, without limitation, rights and remedies resulting from the breach of the Agreement by Programmer.

2.6    No Lotteries.    Announcements giving any information about lotteries or games prohibited by federal or state law or regulation are prohibited.

2.7    No “Dream Books”.    References to “dream books,” the “straight line,” or other direct or indirect descriptions or solicitations relative to the “numbers game,” or the “policy game,” or any other form of gambling are prohibited.

2.8    No Numbers Games.    References to chapter and verse numbers, paragraph numbers, or song numbers, which involve three digits should be avoided and, when used, must relate to the overall theme of the program.

2.9    Required Announcements.    Programmer shall broadcast (i) an announcement at the beginning and end of each program, and hourly, as appropriate, to indicate that program time has been purchased by Programmer, and (ii) any other announcement that may be required by law, regulation or Station policy.

2.10    Credit Terms Advertising.    All advertising of credit terms shall comply with the rules and regulations of the Federal Trade Commission and with all other applicable laws.

2.11    No Illegal Announcements.    No announcements or promotion prohibited by federal or state law or regulation of any lottery or game shall be made over the Station. Any game, contest, or promotion relating to or to be presented over the Station must be fully stated

2

and explained in advance to Owner, which reserves the right in its sole discretion to reject any game, contest or promotion.

2.12    Owner Discretion Paramount.    In accordance with Owner’s responsibility under the Communications Act of 1934, as amended, and the FCC Rules, Owner reserves the right to reject or terminate any advertising proposed to be presented or being presented over the Station which is in conflict with Station policy or which in the reasonable judgment of Owner or its General Manager or Chief Engineer would not serve the public interest.

2.13    Programming Prohibitions.    Programmer shall not broadcast any of the following programs or announcements:

A.    False Claims.    False or unwarranted claims for any product or service.

B.    Unfair Imitation.    Infringements of another advertiser’s rights through plagiarism or unfair imitation of either program idea or copy, or any other unfair competition.

C.    Commercial Disparagement.    Any disparagement of competitors or competitive goods.

D.    Profanity.    Any programs or announcements that are slanderous, defamatory, obscene, profane, indecent, vulgar, repulsive or offensive, either in theme or treatment. Depictions of violence should be minimized, and may not promote or espouse the use of such violence.

E.    Price Disclosure.    Any price mentions except as permitted by Owner’s policies current at the time.

F.    Unauthenticated Testimonials.    Any testimonials which cannot be authenticated.

G.    Descriptions of Bodily Functions.    Any continuity which describes in a repellent manner internal bodily functions or symptomatic results of internal disturbances, and no reference to matters which are not considered acceptable topics in social groups.

H.    Conflict Advertising.    Any advertising matter or announcement which may, in the reasonable opinion of Owner, be injurious or prejudicial to the interest of the public, the Station or honest advertising and reputable business in general.

I.    Fraudulent or Misleading Advertisement.    Any advertising matter, announcement or claim which Programmer knows to be fraudulent, misleading or untrue.

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J.    Advertisements.    All advertising and other paid or bartered announcements included in the program must meet sponsorship identification requirements. No advertisements for cigarettes or tobacco products may be presented.

K.    Taped Material/Telephone Calls.    Any program containing material taped from other broadcast stations or containing taped telephone calls must comply with all copyright laws and privacy laws.

2.14    Payola and Plugola.    The Programmer will provide to the Station in advance any information known to Programmer regarding any money or other consideration which has been paid or accepted, or has been promised to be paid or to be accepted, for the inclusion of any matter as a part of any programming or commercial material to be supplied to Owner by Programmer for broadcast on the Station, unless the party making or accepting such payment is identified in the program as having paid for or furnished such consideration in accordance with the FCC Rules. Commercial matter shall have obvious sponsorship identification contained in the commercial copy. The Programmer will at all times endeavor to proceed in good faith to comply with the requirements of Sections 317 and 507 of the Communications Act of 1934, as amended, and the related FCC Rules and regulations of the FCC. At such times as Owner may reasonably request, Programmer agrees to execute and to provide Owner with affidavits from itself and all of its employees and agents who are involved with providing programming on the Station in the form of Annex A hereto.

Owner may waive any of the foregoing regulations in specific instances if, in its reasonable opinion, good broadcasting in the public interest will be served thereby. In any case where questions of policy or interpretation arise, Programmer shall submit the same to Owner for decision before making any commitments in connection therewith.

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ANNEX A TO KJOJ(AM) STATION PROGRAMMING POLICY

Form of Payola Affidavit

City of Westminster)

County of Orange)                         SS: ###-##-####

State of California)

I, Ninh Quang Vu, having first been duly sworn, hereby state that I have read and will comply with the provisions of Section 317 and 507 of the Communications Act of 1934, as amended, copies of which are attached hereto. I also have read and will comply with the provisions of the Commission’s Sponsorship Identification Rule (73.1212), a copy of which is attached hereto.

I also will comply with the policy of this Station, KJOJ(AM), which prohibits every employee having any voice in the selection of broadcast matter from (a) engaging in any outside business or economic activity which would create a conflict of interest in the selection of broadcast matter; (b) accepting any favors, loans, entertainment or other consideration from persons seeking the airing of any broadcast matter in return thereof, and (c) promoting over the air (except by means of an appropriate commercial announcement) any activity or matter in which the employee has a direct or indirect financial interest.

I understand that receiving or agreeing to receive anything of value from a third party for the broadcast of any program material over the Station is a crime, unless the agreed payment is disclosed to the Station before broadcast of the program material. This crime, commonly called “payola”, is punishable by one year in prison and a fine of up to $10,000.

During the past year, I have not been promised or paid anything of value directly or indirectly by a third party for the broadcast of any programming material over the Station.

/s/ Ninh Quang Vu

Affiant

The foregoing instrument was acknowledged before me this 7th day of November, 2001 by Ninh Vu, who is personally known to me or who has produced Driver License as identification.

/s/ Kathleen Bui

Notary Public     /s/ Kathleen Bui

My Commission expires:    08-09-03

EX-10.23

Exhibit 10.23

FIRST AMENDMENT TO

TIME BROKERAGE AGREEMENT FOR KJOJ(AM)

This First Amendment to Time Brokerage Agreement for KJOJ(AM) (this “First Amendment”), dated as of August     , 2002, to the Time Brokerage Agreement for KJOJ(AM), dated as of November 6, 2001 (the “Agreement”), is entered into by and between Liberman Broadcasting of Houston, Inc., a California corporation (the “Owner”), which is the owner and operator of KJOJ(AM), Conroe, Texas, licensed to its wholly owned subsidiary, Liberman Broadcasting of Houston License Corp., and Little Saigon Radio, a California corporation (the “Programmer”).

RECITALS

WHEREAS, the parties wish to amend certain terms of the “Agreement”; and

WHEREAS, the parties wish that all other terms of the Agreement remain as therein provided.

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

AGREEMENT

1.    Amendment to Exhibit A of the Agreement.    Effective as of August 1, 2002 (the “Effective Date”), Exhibit A of the Agreement is hereby amended by replacing the text thereof in its entirety with the text of Exhibit A hereto.

2.    Miscellaneous.

a.    Governing Law.    The construction and performance of this First Amendment shall be governed by the laws of the State of California.

b.    Counterparts.    This First Amendment may be executed in any number of counterparts, and by the parties hereto on the same or separate counterparts, and each such counterpart, when executed and delivered, shall be deemed to be an original, but all such counterparts shall together constitute but one and the same Fourth Amendment.

c.    Reference to Agreement.    Except as herein amended, the Agreement shall remain in full force and effect and is hereby ratified in all respects. On and after the effectiveness of this First Amendment to the Agreement accomplished hereby, each reference in the Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or words of like import, and each reference to the Agreement in any other agreements, documents or other instruments executed and delivered pursuant to or in connection with the Agreement or this First Amendment shall mean and be a reference to the Agreement as amended through this First Amendment.

d.    Successors.    This First Amendment shall be binding upon Owner, Programmer and their respective successors and assigns, and shall inure to the benefit of Owner, Programmer and their respective successors and assigns.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

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IN WITNESS WHEREOF, the parties have executed this First Amendment as of the date first written above.

LIBERMAN BROADCASTING, INC.
/s/    LENARD D. LIBERMAN
By:	Lenard D. Liberman
Its:	EVP
LITTLE SAIGON RADIO
/s/    NINH QUANG VU
By:
Its:

Exhibit A

Payments

In consideration for the airtime supplied to Programmer pursuant to this Agreement, Programmer shall provide the following consideration to Owner.

A.    Monthly Rates

In accordance with Section 1.4 of the Agreement, Programmer shall make monthly payments in the following amounts:

Year	Rate
Effective Date through December 1, 2002	$20,000 per month.1

Effective December 1, 2002, the amounts set forth above shall be automatically increased, without any further action of the parties, by an amount equivalent to the greater of (A) the increase in the Consumer Price Index for the relevant year, rounded upward to the next highest whole number or (B) five percent (5%). An increase in accordance with the formula set forth in the preceding sentence shall occur on each subsequent December 1 of the Term.

B.    Costs

Programmer shall promptly reimburse Owner for any amounts paid by Owner which represents costs which Programmer has agreed to assume pursuant to the Agreement

¹ As the previously issued bill for August, 2002 was for $20,000, a true-up will be made to the September bill to reflect the portion of the month of August prior to the rate decrease. The true-up will be in the amount of $1,288.

EX-10.24

Exhibit 10.24

ASSET PURCHASE AGREEMENT

Among

ARIES COMMUNICATIONS, INC.

ORANGE BROADCASTING CORP.

LBI MEDIA, INC.

LIBERMAN BROADCASTING, INC.

AND

LBI RADIO LICENSE CORP.

RELATING TO THE ACQUISITION OF KMXN-FM

Dated December 19, 2002

TABLE OF CONTENTS

		Page
ARTICLE I    DEFINITIONS		1
1.1	Definitions	1
1.2	Knowledge	5
ARTICLE II   PURCHASE AND SALE OF ASSETS		5
2.1	Assets to be Conveyed	5
2.2	Excluded Assets and Liabilities	6
ARTICLE III  PURCHASE PRICE; METHOD OF PAYMENT; ESCROW DEPOSIT		7
3.1	Purchase Price	7
3.2	Liabilities Assumed	7
3.3	Escrow Deposit	7
3.4	Buyer’s Remedies	8
3.5	Allocation	9
3.6	Prorations	9
ARTICLE IV  REPRESENTATIONS AND WARRANTIES BY SELLER		9
4.1	Organization and Standing	9
4.2	Authorization	9
4.3	Permits; FCC Licenses	10
4.4	Purchased Assets	12
4.5	Insurance	12
4.6	Litigation	13
4.7	Contracts	13
4.8	Insolvency	13
4.9	Reports	13
4.10	No Defaults	13
4.11	Disclosures	14
4.12	Environmental Compliance	14
4.13	Intellectual Property	14
4.14	Brokers	15
4.15	Prepaid Expenses	15
4.16	Financial Statements	15

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TABLE OF CONTENTS

(continued)

4.17	Indebtedness	16
ARTICLE V       REPRESENTATIONS AND WARRANTIES BY BUYER AND LBI MEDIA		16
5.1	Status	16
5.2	No Defaults	16
5.3	Authorization	16
5.4	Brokers	17
5.5	Qualification as a Broadcast Licensee	17
5.6	Litigation	17
5.7	Approvals and Consents	17
ARTICLE VI      COVENANTS OF SELLER		17
6.1	Affirmative Covenants of Seller	17
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
	7.1.1  FCC Consent	21
	7.1.2  Other Governmental Consents	21
	7.1.3  Control of the Station	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	22
7.6	Transfer Taxes and FCC Filings; Expenses; Bulk Sales.	23
ARTICLE VIII   CLOSING CONDITIONS		24
8.1	Conditions Precedent to Buyer’s Obligations	24
	8.1.1  Commission Approval	24
	8.1.2  Representations and Warranties	24
	8.1.3  Performance	24
	8.1.4  FCC Licenses	24

ii

TABLE OF CONTENTS

(continued)

	8.1.5  Consents	25
	8.1.6  Litigation and Insolvency	25
	8.1.7  Financial Information	25
	8.1.8  Guarantee	25
	8.1.9  Deliveries	25
8.2	Conditions Precedent to Seller’s Obligations	26
	8.2.1  Commission Approval	26
	8.2.2  Representations and Warranties	26
	8.2.3  Performance	26
	8.2.4  Litigation and Insolvency	26
	8.2.5  Deliveries	26
ARTICLE IX      ITEMS TO BE DELIVERED AT THE CLOSING		26
9.1	Seller’s Performance At Closing	26
9.2	Buyer’s Performance at Closing	28
ARTICLE X       INDEMNIFICATION		29
10.1	Indemnification by Seller	29
10.2	Indemnification by LBI Media and Buyer	30
10.3	Third-Party Claims	30
10.4	Survival of Representations and Warranties	31
ARTICLE XI      MISCELLANEOUS PROVISIONS		31
11.1	Notices	31
11.2	Benefit and Assignment	32
11.3	Public Announcements	33
11.4	Other Documents	33
11.5	Appendices	33
11.6	Construction	33
11.7	Counterparts	33
11.8	Headings	33
11.9	Entire Agreement	33

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TABLE OF CONTENTS

(continued)

SCHEDULE 4.6	Litigation
SCHEDULE I	Identification of Contracts to be Assumed
SCHEDULE II	List of all Permits and FCC Licenses
SCHEDULE III	List of Required Consents
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	INTENTIONALLY OMITTED
SCHEDULE X	Specified Employees
SCHEDULE XI	Information Requests
EXHIBIT A-1	Form of Personal Guarantee
EXHIBIT A-2	Form of Corporate Guarantee
EXHIBIT B	Legal Opinion of Seller’s Counsel
EXHIBIT C	Legal Opinion of Seller’s FCC Counsel
EXHIBIT D	Legal Opinion of LBI Entities’ Counsel
EXHIBIT E	Form of KMXN-FM LMA
EXHIBIT F	Form of Estoppel and Consent
EXHIBIT G	Form of Escrow Agreement

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ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT is made and entered into this 19th day of December, 2002, by and among Aries Communications, Inc, a California corporation (“Astor”) and Orange Broadcasting Corp., a California corporation (“Astor KMXN Sub”), on the one hand, and LBI Media, Inc., a California corporation (“LBI Media”), Liberman Broadcasting, Inc., a California corporation (“LBI”), and LBI Radio License Corp., a California corporation (“LBI Sub”), on the other. Astor and Astor KMXN 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 KMXN-FM, (94.3 FM, Garden Grove, California) (the “Station”) and Seller desires to sell and assign to Buyer the Station and its 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 Station (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 Station; and

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 hereto, 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 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 FCC Licenses from Seller to LBI Sub.

“Assumed Contracts” means only (i) those Contracts listed on Schedule I, including the Licenses, (ii) any other contract which LBI 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.

“Astor,” and “Astor KMXN Sub” have the meanings specified in the first paragraph of this Agreement.

“Buyer” has the meaning set forth in the first paragraph of this Agreement.

“Closing Date” means the later of (i) 5:00 p.m. PST on the 10th business day following the Final Order Day, or (ii) such other time 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.

“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 policy, 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 the 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.

“Corporate Guarantee” means the Corporate Guarantee by the Seller and the Other Subsidiaries in substantially the form of Exhibit A-2.

“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.

“Effective Date” shall have the meaning assigned to such term in the KMXN-FM LMA.

“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, the Licenses, 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.

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“Escrow Agent” means Commonwealth Land Title Company.

“Escrow Agreement” means the Corporate Custodial Agreement Relating to Earnest Money dated December         , 2002 executed by the Escrow Agent, LBI Media and Astor substantially in the form of Exhibit G attached hereto.

“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 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 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 Grant without any conditions materially adverse to Buyer.

“Financial Statements” has the meaning set forth in Section 4.16.

“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.

“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 real property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such real property from such Person); (b) obligations of such Person to pay the deferred purchase or acquisition price of real 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 an Encumbrance on the real property of such Person, whether or not the respective indebtedness so secured

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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.

“Indemnified Party” and “Indemnifying Party” have the meanings specified in Section 10.3.

“Initial Grant” means, with respect to the Assignment Application, the Commission’s written consent to the assignment of the FCC Licenses associated with the Station to LBI Sub pursuant to such Assignment Application (including without limitation, by the Mass Media Bureau or 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 the Assignment Application.

“Intellectual Property” has the meaning set forth in Section 4.13.1.

“KMXN-FM LMA” means the local marketing agreement by and between Astor and LBI entered into concurrently with this Agreement attached as Exhibit E.

“LBI,” “LBI Media” and “LBI Sub” have the meanings specified in the first paragraph of this Agreement.

“License” or “Licenses” means each of the leases or licenses set forth in Schedule I.

“Other Subsidiaries” shall mean North County Broadcasting Corporation, a California corporation, and Ontario Broadcasting, LLC, a California limited liability company and each may be referred to as an “Other Subsidiary” in the singular.

“Party” means any of Astor, Astor KMXN Sub, LBI Media, 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 Media and Buyer, on the other, shall each be considered a single Party for purposes of Sections 7.3, 7.4 and 10.3.

“Permits” means the licenses, permits, approvals, authorizations, consents, and orders of any federal, state or local governmental authority in connection with the operation of the Station (including the FCC Licenses) and all pending requests and applications therefor, including without limitation those listed on Schedule II.

“Permitted Encumbrances” means, with respect to the Licenses only those Encumbrances, if any, approved in writing by Buyer.

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“Personal Guarantee” means the Personal Guarantee by N. Arthur Astor in substantially the form of Exhibit A-1.

“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.

“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 satisfactory to Buyer, necessary 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” has 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 applicable Station broadcast antenna.

“Transmitter Buildings” means the studio and transmitter buildings (including any enclosures or equipment rooms in which Seller’s equipment is located at the Transmitter Site) located at the Transmitter Sites.

“Transmitter Sites” means the transmitter and antenna sites listed in Schedule I.

1.2    Knowledge.    The term “knowledge,” as it relates to a party hereto, shall mean the knowledge of such party after reasonable investigation, including due inquiry of such party’s employees.

ARTICLE II

PURCHASE AND SALE OF ASSETS

2.1    Assets to be Conveyed.    On the Closing Date at the Closing Place, 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 Station (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, with respect to the Licenses, the Permitted Encumbrances). The Purchased Assets include the following:

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2.1.1    The tangible personal property, furniture, fixtures, improvements and office equipment, other equipment, the furniture and inventory in the Transmitter Buildings, the 94.3 FM main broadcast studio equipment, the Site Equipment (as defined in the Licenses), 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, in each case 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 ordinary and usual course of the Station’s business (collectively, the “Tangible Personal Property”);

2.1.2    The transmitter facilities located at the Transmitter Sites;

2.1.3    All prepaid expenses made by Seller, advance payments by advertisers for advertising that would be aired after the Effective Date and other advance payments by third parties for services to be provided by or for the Station after the Effective Date, in each case under the Assumed Contracts;

2.1.4    The Assumed Contracts and all of Seller’s rights thereunder relating to periods and events occurring on and after the Closing Date;

2.1.5    Such files, records and logs pertaining to the operation of the Station as Buyer may reasonably require, including the Station’s public inspection files and other records relating to the FCC Licenses and other filings with the Commission and such sales records and other sales and traffic information that may exist relating to the Station 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 (including without limitation the data resident in Seller’s CBSI 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 the Station as Seller may reasonably require from and after the Closing Date; and

2.1.6    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 Station, those items which are personal effects of principals of the Seller (which shall not include any items listed on Schedule IV), that broadcast studio equipment other than the 94.3 FM main broadcast studio equipment, cash (other than the amounts described in Section 2.1.3), cash equivalents, deposits made by Seller under any contracts (other than the amounts described in Section 2.1.3), and accounts receivable of Seller not accruing under the KMXN-FM LMA,

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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 and not accruing under the KMXN-FM LMA (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 by Buyer pursuant to Section 3.2, Buyer and LBI Media 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 Station (including, without limitation, Seller’s actions in operating the Station under the KMXN-FM LMA but excluding Buyer’s actions in operating the Station under the KMXN-FM LMA), Seller’s employees or otherwise.

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 Thirty-Five Million Dollars ($35,000,000) plus the aggregate amount of prepaid expenses made by Seller for services to be provided to the Station after the Closing Date under the Assumed Contracts as set forth on Schedule VIII less any accrued liabilities agreed to be assumed by Buyer (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, Buyer will pay 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 in accordance with Section 3.1.1 above, Seller and LBI Media shall jointly execute and deliver to the Escrow Agent written instructions to terminate the Escrow Agreement and deliver the entire Escrow Deposit to LBI Media.

3.1.3    Post-Closing Proration.    Following the Closing Date, the Parties shall determine and make the prorations called for in Section 3.6.

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 Media has deposited Two Million Dollars ($2,000,000) 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

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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 by Buyer of this Agreement and Seller is not then in breach of its representations, warranties or covenants hereunder in any material respect, then, the Escrow Deposit, including accrued interest, will be delivered to Seller, it being understood and agreed that payment to Seller of the full amount of the Escrow Deposit will constitute full payment for any and all damages suffered by Seller by reason of LBI Media’s or Buyer’s failure to consummate the purchase and sale contemplated by this Agreement.

THE PARTIES HERETO ACKNOWLEDGE AND AGREE IN ADVANCE BY INITIALING THIS AGREEMENT IN THE SPACES PROVIDED [LBI MEDIA’S 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 PAYMENT OF THE FULL AMOUNT OF THE ESCROW DEPOSIT TO SELLER IS A FAIR AND EQUITABLE AMOUNT TO REIMBURSE SELLER FOR ANY DAMAGES WHICH THE PARTIES HERETO ESTIMATE MAY BE SUSTAINED BY SELLER DUE TO BUYER’S FAILURE TO CONSUMMATE THE PURCHASE AND SALE OF THE PURCHASED 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 MEDIA’S 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 Media.    The Escrow Deposit shall be delivered to LBI Media 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 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 Media and Buyer shall have the following rights and remedies: (i) Buyer shall have the right to specific performance of Seller’s

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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 Media shall have the right to the return of the Escrow Deposit; and (iii) LBI Media 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 Media 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 Media 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). The Parties agree that a remedy at law is inadequate and that damages are not adequate to compensate LBI Media 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 KMXN-FM LMA, the operation of the Station and all income, expenses and liabilities attributable thereto through 11:59 p.m., PST, 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 Media and Buyer as follows:

4.1    Organization and Standing.    Each Seller and Other Subsidiary is a corporation or a limited liability company duly organized, validly existing and in good standing under the laws of the state of its incorporation or formation. Each Seller and Other Subsidiary has the requisite power and authority to enter into and complete the transactions contemplated by this Agreement, the Escrow Agreement, the KMXN-FM LMA and the Corporate Guarantee. Astor is the 100% owner of the issued and outstanding capital stock of Astor KMXN Sub and North County Broadcasting Corporation and N. Arthur Astor is the 100% owner of the issued and outstanding capital stock of Astor. N. Arthur Astor is the sole managing member and owner of 99% of the ownership interests of Ontario Broadcasting, LLC, and has the requisite power and authority to enter into and complete the transactions contemplated by the Personal Guarantee.

4.2    Authorization.    All necessary corporate actions and proceedings to duly approve the execution, delivery and performance of this Agreement, the Escrow Agreement, the KMXN-FM LMA, and the Corporate Guarantee and other agreements, documents and instruments being executed by any Seller or any Other Subsidiary in connection herewith or therewith and the consummation of the transaction contemplated hereby or thereby have been duly and validly taken by such Seller or Other Subsidiary, as applicable, and each of this

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Agreement, the Escrow Agreement, the KMXN-FM LMA, and the Corporate Guarantee, and other agreements, documents and instruments being executed by any Seller or any Other Subsidiary, as applicable, in connection herewith or therewith has been (or, in the case of the Corporate Guarantee, will be) duly and validly authorized, executed and delivered by such Seller or such Other Subsidiary, as applicable, and constitutes (or, in the case of the Corporate Guarantee, will constitute) the legal, valid and binding obligation of such Seller or such Other Subsidiary, as applicable, enforceable against such Seller or such Other Subsidiary, as applicable, in accordance with and subject to their respective terms. As of the Closing Date, the Personal Guarantee will have been duly executed and delivered by N. Arthur Astor and will constitute the legal, valid and binding obligation of N. Arthur Astor, enforceable against him in accordance with its terms.

4.3    Permits; FCC Licenses.

4.3.1    The licenses (including the FCC Licenses), permits, authorizations consents, orders and all pending requests and applications therefore, which are listed on Schedule II, constitute all the Permits required for and used in connection with the operation of the Station. No waivers of the Communications Act are necessary in order to permit Seller’s operation of the Station. Seller is the holder of all the FCC Licenses. Other than the Initial Grant of the Assignment Application, 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 respective 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. Except for events affecting the broadcast industry generally, 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) materially and adversely affects or in the future may 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 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 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,

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order, notice or complaint. The Station is now operating at its licensed power and antenna height, in accordance with the FCC Licenses, and is in compliance with the Communications Act, including, without limitation, rules governing the location of the Station’s respective main studios and rules governing the required contents of the Station’s respective public inspection files. Seller has no reason to believe that the 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 the Station (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 could not impair, impede or affect the continued, uninterrupted operation of the Station and, each such facility is zoned so as to permit the commercial uses intended by the owner or occupier thereof; provided, that with respect to the Licenses, such representation is to Seller’s knowledge. 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 not received any notice of any complaint being made against the Station relating to its Tower, Transmitter Site, Transmitter Building or Seller’s operation of the 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 affect the continued, uninterrupted operation of the Station. Each Tower has been appropriately registered with the Commission, as described in Schedule II.

4.3.4    Seller is qualified to sell the Station 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 person 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 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. § 73.3615 with respect to its ownership of the Station and any other filing relating to the 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 Station 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.

4.3.6    The operation of the Station 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. § 1.1310.

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4.4    Purchased Assets.    All material items of the Purchased Assets used in the operation of the Station are listed and described in Schedule IV to this Agreement. No other affiliate of Seller (including without limitation the Other Subsidiaries or any other direct or indirect subsidiaries of Seller) other than Seller owns or has any rights, title or interest in any Purchased Assets. On the Closing Date, Seller will have good and valid title to the Purchased Assets, free and clear of all Encumbrances, other than (i) with respect to the Licenses, 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 Purchased Assets, free and clear of all Encumbrances (other than liens granted to Buyer’s lenders and, with respect to the Licenses, the Permitted Encumbrances). Schedule III sets forth each release and UCC Termination Statements that are required in order to release such Encumbrances on the Closing Date. Schedule III also sets forth all UCC Financing Statements that have been filed against any Purchased Asset.

4.4.1    Licenses.    Seller has not received any notice of noncompliance with any restriction or encumbrance encumbering the Licenses, except the Permitted Encumbrances. Seller has maintained and has operated the Licenses, each Transmitter Site, each Tower, each Transmitter Building and the Station under and in accordance with the terms of all applicable regulations. 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. Except as set forth in and permitted under the terms of the Licenses, 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 (including the Licenses) by Seller or, on and after the Closing Date, by Buyer. Except as set forth in the Licenses listed in 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 other interests covered by the Licenses, whether by lease, sublease, easement, license or other instrument. Buyer will have following the closing reasonable access to each of the Transmitter Sites, and a continuous means of ingress and egress thereto from public roads.

4.4.2    Tangible Personal Property.    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 the Station’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 FCC Licenses and Permits. The Purchased Assets include all the Permits, personal property and assets, including real estate rights, necessary to conduct the operation of the Station as now conducted, except for the Excluded Assets.

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.

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4.6    Litigation.    Except as set forth in Schedule 4.6, no litigation, action, suit, judgment, proceeding or, to the knowledge of Seller, investigation relating to the Station is pending or outstanding before any forum, court, or governmental body, department or agency of any kind to which Seller or the Station is a party and, to the knowledge of Seller, no such litigation or proceeding is threatened.

4.7    Contracts.    Seller has delivered to Buyer true and complete copies of all Contracts, including 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. 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. Schedule I sets forth all the relevant documents to which Seller is a party with respect to the Licenses, 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, including the Purchased Assets, are 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 the Station and its operations.

4.10    No Defaults.    Neither the execution, delivery and performance by Seller, the Other Subsidiaries and N. Arthur Astor of this Agreement, the Personal Guarantee, the Escrow Agreement, the KMXN-FM LMA, and the Corporate Guarantee and the other agreements, documents and instruments being executed by Seller, the Other Subsidiaries and N. Arthur Astor, as applicable, in connection herewith or therewith nor the consummation by Seller, the Other Subsidiaries and N. Arthur Astor of the transaction contemplated hereby or thereby 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 organizational document or Bylaws of Seller or the Other Subsidiaries, (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 contract, mortgage, indenture, agreement, lease, license or other instrument to which Seller, the Other Subsidiaries or N. Arthur Astor is a party or by which it or he is bound, or by which it or he 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, the Other Subsidiaries or N. Arthur Astor or (iv) violate or constitute a breach of any Assumed Contract. The execution, delivery and performance by Seller, the Other Subsidiaries and N. Arthur Astor of this Agreement, the Personal Guarantee, the Escrow Agreement, the KMXN-FM LMA, and the Corporate Guarantee and the other agreements, documents and instruments being executed by Seller, the Other Subsidiaries or N.

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Arthur Astor in connection herewith or therewith 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, the Other Subsidiaries and N. Arthur Astor and no written statement, certificate, appendix or Schedule furnished by Seller, the Other Subsidiaries and N. Arthur Astor 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, including the Purchased 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 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 operation of the Station 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) 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 the operation of the Station; and (iv) any Hazardous Substance handled or dealt with in any way in connection with the operation of the Station 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 programming and its contents used but not owned by Seller) which are material to the operation of the Station, including the call letters “KMXN-FM” and any other call signs (together with the goodwill associated therewith, the “Intellectual Property”). Except as set forth on Schedule VII, Seller has good and marketable title to all of the Intellectual Property, free and clear of all Encumbrances and, to the extent indicated on Schedule VII, 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

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in the various states of the United States and 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 operation of the Station. Except as set forth on Schedule VII, all requisite renewals and affidavits of use have been filed with respect to each of the registrations set forth in Schedule VII, and each is presently in full force and effect, and each of the trade names and trademarks is valid, and is in good standing and active use and none has been abandoned.

4.13.2    Except as set forth on Schedule VII, Seller is the sole and exclusive owner of the Intellectual Property, has the sole and exclusive right to use the trade names and trademarks included in the Intellectual Property and 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 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 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.

4.13.5    Except as set forth on Schedule VII, 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 N. Arthur Astor or under the authority of Seller or N. Arthur Astor 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., whose fee shall be paid by Seller.

4.15    Prepaid Expenses.    All prepaid expenses made by Seller for services to be provided to the Station after the Closing Date under the Assumed Contracts are set forth on Schedule VIII.

4.16    Financial Statements.    Seller has delivered as of the Closing Date to LBI Media and Buyer true, correct and complete copies of (i) for fiscal year 2001, consolidated financial statements for the entities (and if available, the Station), and (b) unaudited consolidating financial statements for the entities (and, if available, the Station), and (ii) for 9 months ended December 31, 2002, (a) audited consolidated financial statements for the entities

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(and, if available, the Station), and (b) unaudited consolidating financial statements for the entities (and if available, the Station) (the “Financial Statements”). Such Financial Statements have been prepared in conformity with GAAP in all material respects except as disclosed therein or in the footnotes thereto. The financial statements present fairly, in accordance with GAAP, in all material respects, the results of operations and cash flows of the applicable entities and the Station for the respective periods covered, and present fairly, in accordance with GAAP, in all material respects the financial condition of the applicable entities and the Station as of their respective dates.

4.17    Indebtedness.    As of the Closing Date, after giving effect to the transactions contemplated by this Agreement and the application of the proceeds thereof, the Seller, Ontario Broadcasting LLC and North County Broadcasting Corporation will have an aggregate amount of Indebtedness of not more than $8,000,000.

ARTICLE V

REPRESENTATIONS AND WARRANTIES BY BUYER AND LBI MEDIA

LBI Media and Buyer represent and warrant to Seller as follows:

5.1    Status.    Each of LBI Media, 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 Media and Buyer each has 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 on Schedule III with respect to Buyer, neither the execution, delivery and performance by LBI Media or Buyer, as applicable, of this Agreement, the Escrow Agreement, the KMXN-FM LMA and the other agreements, documents and instruments being executed by LBI Media 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 Media 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 Media 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 Media or Buyer, or (iv) result in the creation or imposition of any Encumbrance on the 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, the KMXN-FM LMA and other agreements, documents and instruments being executed by LBI Media 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 Media and Buyer, and

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each of this Agreement, the Escrow Agreement, the KMXN-FM LMA and other agreements, documents and instruments being executed by LBI Media or Buyer in connection herewith or therewith has been duly and validly authorized, executed and delivered by LBI Media and Buyer and constitutes the legal, valid and binding obligation of LBI Media and Buyer, enforceable against LBI Media 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 Media or Buyer or under the authority of LBI Media 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.

5.5    Qualification as a Broadcast Licensee.    Neither LBI Media nor Buyer knows of any fact that would as of the date hereof, under the Communications Act, disqualify Buyer as owner, operator and licensee of the Station.

5.6    Litigation.    There are no suits, legal proceedings or investigations of any nature pending or, to the knowledge of LBI Media or Buyer, threatened against or affecting it that would affect the ability of LBI Media or Buyer to carry out the transaction contemplated by this Agreement.

5.7    Approvals and Consents.    To knowledge of LBI Media 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 Media 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 otherwise expressly permitted by this Agreement or caused as a direct result of Seller’s compliance with KMXN-FM LMA:

6.1.1    Maintenance.    Seller will continue to operate the Station in substantial conformity with past practices, and in conformity with the FCC Licenses and the Communications Act.

6.1.2    Preserve Relations.    Seller will use its best efforts to preserve the business of the Station and 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 the Station (including but not limited to lessors, advertisers, clients, service providers and municipalities).

6.1.3    Reasonable Access.    In addition to the rights of Buyer under the KMXN-FM LMA, 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 the Station, and Seller will furnish or will cause to be furnished such additional information

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concerning the Station 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 the Station during the Station’s normal business hours shall constitute reasonable advance notification and Seller shall use its best efforts to make available the documents and the personnel Buyer indicates that its personnel would like to see during such visit. 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 except with respect to those employees identified on Schedule X. 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 XI 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 XI on a timely basis in accordance with its past practices. Buyer may request such information as often as it chooses.

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 the 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. 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 prior to the Closing Date 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 against the Station or against Seller in connection with the 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 the 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 the Station relating to its Tower, Transmitter Site, Transmitter Building or Seller’s operation of the 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 the Station or by Seller in connection with the Station that remains unpaid 60 days after the applicable due date of such invoice. Without limiting the generality

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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 the Station who is either an account executive or earns more than $30,000 per year.

6.1.8    Contracts.    Seller will not enter into any Contract relating to the Station after the execution of the KMXN-FM LMA without the prior written consent of Buyer, which consent shall not be unreasonably withheld.

6.1.9    Transition Assistance.    Seller will use its best efforts to assist Buyer in transitioning to Buyer third party provided services such as utilities, phone service, etc.

6.1.10    Assistance in Transfer of Records and Data.    Seller will fully cooperate with Buyer and use its best efforts (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 use its best efforts to deliver, the data and records required to be delivered under Section 2.1.5 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 Closing Date. 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 Closing Date, except as contemplated by this Agreement, Seller will not, without the prior written consent of Buyer (except as expressly permitted by this Agreement or the terms of the KMXN-FM LMA):

6.2.1    Encumbrances.    Create or assume any Encumbrance on any of the Purchased Assets (other than Permitted Encumbrances on the Licenses), whether now owned or hereafter acquired, unless discharged or terminated and fully released prior to the 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 the Station’s call letters or modify the 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; Change the Station’s format (including but not limited to genre of music, demographic or language) or otherwise

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materially change the 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 Station provided, further, that actions taken by Buyer pursuant to and in compliance with the KMXN-FM LMA shall not constitute violations of this Section 6.2.5;

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    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 the Station, or take any other action within Seller’s control which would result in the Station being in non-compliance with the requirements of the Communications Act or any other applicable law material to the operation of the 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; provided, however, that any actions by Seller, including omission to act, that are necessary or appropriate for the Seller to be in compliance with the terms and conditions of the KMXN-FM LMA shall not constitute an action inconsistent with Seller’s obligations under this Agreement.

6.3    Financial Information.    From the date hereof until four months after the consummation of the transaction contemplated by this Agreement, Seller agrees to cooperate with, and provide reasonable assistance to, Buyer, and use commercially reasonable efforts to get the cooperation and assistance of its auditors (including but not limited to consents to inclusion of audited financial statements of Seller in filings by LBI Media or Buyer and reliance letters in connection therewith) 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 agrees to use commercially reasonable efforts to get the consent by its accountants to include the Financial Statements to the extent necessary or advisable by LBI Media or the Buyer or its advisors in any filings or registration statements or reports of LBI Media or the Buyer under the Securities Act of 1933, as amended, or the Securities and Exchange Act of 1934, as amended (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).

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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 Application requesting FCC consent to the transaction contemplated by this Agreement. The Parties agree that the 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 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.

7.1.2    Other Governmental Consents.    Promptly, but not later than ten business days following the filing of the 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 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 Station.    The purchase and sale transaction contemplated by this Agreement shall not be consummated until the Closing Date. 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 Station, but such operation will be the sole responsibility and in the complete discretion of Seller. Until the Closing Date, Buyer’s interest in the Station are limited to its rights under this Agreement, the Assignment Application and the KMXN-FM LMA.

7.2    Mutual Right to Terminate.    Subject to the provisions of Section 7.5.2, if the purchase and sale transaction contemplated by this Agreement has not occurred on or before the ninth (9) 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 the purchase and sale transaction contemplated by this Agreement, may terminate this Agreement upon five days’ written notice to the other Party

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7.3    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:

7.3.1    The FCC Licenses or other Permits are modified or their terms substantially modified resulting in an adverse change in Buyer’s ability to operate the Station;

7.3.2    Any Assignment Application is designated for a hearing before an administrative law judge;

7.3.3    The FCC institutes revocation of license proceedings against the Station; or

7.3.4    Seller is in material breach of this Agreement ten business days after Buyer has given Seller written notice of breach, and Seller has not commenced and continued to prosecute diligently a cure therefor or such breach is or becomes incurable.

7.4    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:

7.4.1    The Assignment Application is designated for a hearing before an administrative law judge; or

7.4.2    Buyer is in material breach of this Agreement ten business days after Seller has given Buyer written notice of breach, and Buyer has not commenced and continued to prosecute diligently a cure therefor or such breach is or becomes incurable.

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 Station between the date of this Agreement and the 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), 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 Media, 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 the Station in the normal and usual manner and substantially in accordance

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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 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 FCC Licenses cannot be resumed within the effective period of the FCC’s consent to assignment of the FCC Licenses to LBI Sub, at Buyer’s request, 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 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 Media.

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. All FCC filing fees will be shared equally by Buyer and Seller.

7.6.2    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

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contemplated hereby, including but not limited to the fees, expenses and disbursements of its accountants and counsel.

7.6.3    Compliance With Bulk Sales Laws.    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 by Seller.

7.7    Invoices.    If advertisers whose advertisements air on the Station 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 the Station 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 Seller, shall promptly notify Seller of the receipt of such funds and shall forward such amounts to Seller within five business days.

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.

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. There shall not have been any material adverse change in the Station or the Purchased Assets, or any damage, destruction or loss materially and adversely affecting the Purchased Assets or the operation of the 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 the Station or, after

24

the Closing Date, the conduct of its operations by Buyer. 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 consents and releases in form and substance reasonably satisfactory to Buyer from the 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 each of the Licenses shall have executed and delivered to Buyer estoppels and consents substantially in the form attached hereto as Exhibit F with respect to each License (including confirmation of the terms of each License, that each License is in full force and effect and that no defaults exist thereunder, together with such documents and consents that may be required by Buyer’s lender). Furthermore, the creditors of Seller shall have delivered to Buyer the full reconveyances of the deeds of trust filed against the Licenses.

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 the 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.

8.1.7    Financial Information.    Seller shall have provided the Financial Statements. To the extent requested prior to the Closing Date, Seller shall have provided any other information required to be provided pursuant to Section 6.3 on or prior to the Closing Date.

8.1.8    Guarantee.    N. Arthur Astor shall have executed and delivered the Personal Guarantee and the Seller and the Other Subsidiaries shall have executed and delivered the Corporate Guarantee.

8.1.9    Deliveries.    All deliveries required under Section 9.1 shall have been completed to the satisfaction of Buyer (including issuance of the legal opinions).

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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 Media 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 Media 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.

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.

8.2.5    Deliveries.    All deliveries required under Section 9.2 shall have been completed to the satisfaction of Seller (including issuance of the legal opinions).

ARTICLE IX

ITEMS TO BE DELIVERED AT THE CLOSING

9.1    Seller’s Performance At Closing.    On the Closing Date at 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, effecting the sale, transfer, assignment and conveyance of the Purchased Assets to Buyer including, without limitation, the following:

9.1.1    Such other instruments or documents as Buyer may reasonably request in connection with the transfer and assignment of the Licenses, including such

26

documents and instruments customary and appropriate in each of the counties in which a property covered by a License is located;

9.1.2    One or more bills of sale conveying to LBI all of the Tangible Personal Property and Intellectual Property to be acquired by Buyer hereunder;

9.1.3    An assignment assigning to LBI Sub the FCC Licenses;

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    The data, documents, copies, files, records and logs referred to in Section 2.1.5 and Seller shall have transferred data from Seller’s computer systems to Buyer’s computer systems to the extent provided in Section 2.1.5;

9.1.6    Proof of payment of prepaid expenses made by Seller for services to be provided to the Station after the 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 or for the Station after the Effective Date under the Assumed Contracts;

9.1.8    Opinions of Seller’s counsel and Seller’s FCC counsel, each dated as of the Closing Date substantially in the form of Exhibits “B” and “C”;

9.1.9    Copies of resolutions of the Boards of Directors of Astor, Astor KMXN Sub and the Other Subsidiaries, in each case certified by its Secretary, authorizing the execution, delivery and performance of this Agreement, the Escrow Agreement, the KMXN-FM LMA and the Corporate Guarantee and the transaction contemplated hereby and thereby;

9.1.10    A certificate, dated as of the Closing Date, executed by the President and Chief Executive Officer of Seller and the Other Subsidiaries, 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; (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 the 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;

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(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, N. Arthur Astor, the Other Subsidiaries or any of their respective material assets or properties is pending, and none of Seller, N. Arthur Astor or the Other Subsidiaries 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 the Station after the Effective Date under the Assumed Contracts referred to in Section 2.1.4 equals the amount paid to Buyer pursuant to Section 9.1.7; and (vii) 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 Media executed by Seller; and

9.1.12    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 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 Closing Date substantially in the form of Exhibit “D”;

9.2.3    Copies of resolutions of the Boards of Directors of LBI Media, LBI and LBI Sub, in each case certified by its Secretary, authorizing the execution, delivery and performance of this Agreement, the Escrow Agreement, the KMXN-FM LMA and the transaction contemplated hereby and thereby;

9.2.4    A certificate, dated as of the Closing Date, executed by the Executive Vice President of LBI Media and Buyer, to the effect that (i) the representations and warranties of LBI Media 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 Media 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) except for matters effecting the radio broadcasting industry generally, no litigation, action, suit, judgment, proceeding or investigation is pending or outstanding or threatened, before any forum, court

28

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; (iv) to the knowledge of LBI Media and Buyer, no insolvency proceedings of any character including, without limitation, receivership, reorganization, composition or arrangement with creditors, voluntary or involuntary, affecting LBI Media or Buyer or any of their respective material assets or properties is pending, and neither LBI Media 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 Media 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 Media 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 Media and Buyer, their successors and assigns, for a period of eighteen 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 the 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 the 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 Media or Buyer pursuant to this Agreement or in connection with the

29

transaction contemplated hereby; provided, that any breach of Section 7.7 shall be deemed material regardless of the cash value of such breach.

10.2    Indemnification by LBI Media and Buyer.    LBI Media 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 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 the 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 the 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 default or material nonfulfillment, of any agreement on the part of LBI Media 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 7.7 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, 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 Media and Buyer, on the other, shall be considered a single Party for purposes of this Section 10.3. 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 Media or Buyer is the Indemnified Party and in the reasonable judgment of LBI Media or Buyer there is a reasonable probability that a claim

30

may materially and adversely affect the Indemnified Party or its continued operation of the 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, enter into or settle or compromise any claim or consent to any entry of judgment which (i) in the reasonable judgment of LBI Media or Buyer may materially and adversely affect LBI Media or Buyer or their continued operation of the Station, and (ii) does not include as an unconditional provision 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    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 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 for such telephone notification):

If to Seller or the Other Subsidiaries:

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Mr. N. Arthur Astor

Astor Broadcast Group

1045 South East Street

Anaheim, California 92805

        Phone: (714) 502-9494

Copy (which shall not, by itself, constitute notice) to:

Mr. Roger J. Metzler, Jr.

McQuaid, Metzler, Bedford & Van Zandt

211 Main Street, 16^th Floor

San Francisco, California

        Phone: (415) 905-0200

        Fax: (415) 905-0202

If to LBI Media 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 Media, Buyer and Seller; provided, however, that LBI Media and Buyer may assign their rights and obligations hereunder without Seller’s consent to any party owned, directly or indirectly, by LBI Media and LBI Media 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).

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11.3    Public Announcements.    LBI Media 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 under financing documents.

11.4    Other Documents.    The parties will execute such other documents as may be necessary and desirable to the implementation and consummation of this Agreement.

11.5    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 deemed to be appropriately modified to reflect those changes.

11.6    Construction.    This Agreement will be governed, construed and enforced in accordance with the laws of the State of California.

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 Personal Guarantee, the Escrow Agreement, the Corporate Guarantee, the KMXN-FM LMA and all Schedules and Exhibits hereto and thereto 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 represent the entire understanding and agreement between the parties with respect to the subject matter hereof, supersede all prior negotiations and agreements among the parties, 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.

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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.

ARIES COMMUNICATIONS, INC.
By:	/s/    Arthur Astor N. Arthur Astor President

ORANGE BROADCASTING CORP.
By:	/s/    Arthur Astor N. Arthur Astor President

LBI MEDIA, INC.
By:	/s/    Jose Liberman
	Jose Liberman President

LIBERMAN BROADCASTING, INC.
By:	/s/    Jose Liberman
	Jose Liberman President

and

LBI RADIO LICENSE CORP.
By:	/s/    Jose Liberman
	Jose Liberman President

S-1

SCHEDULE 4.6

LITIGATION

1.    Len Agosta, Plaintiff, vs. N. Arthur Astor, Astor Broadcast Group, North County Broadcasting Corporation, Orange Broadcasting Corporation, Susan Burke and Does 1-25, inclusive, Defendants. Filed in Superior Court of the State of California for the County of San Diego. Case No. GIC 772436

2.    Craig Powers, an individual, Plaintiff, vs. Astor Broadcasting Group, a corporation; Art Astor, an individual, and Does 1 through 10, inclusive, Defendant. Filed in Superior Court of the State of California for the County of Orange. Case No. 02CC05068

Schedule 4.6-1

SCHEDULE I

Identification of Contracts to be Assumed

KMXN-FM—ANTENNA SITE LICENSE AGREEMENT, “City Plaza”, One City Boulevard West, Orange, California (Orange County)

1. Antenna Site License Agreement dated June 13, 2002 between EOP-The City, LLC, as Licensor and Astor KMXN Sub, as Licensee, as amended from time to time.

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 for KMXN-FM, File No.BLH19980610KA, as modified by BMLH20000501ACK.	12/1/2005

Antenna Structure Registration Number 1018358

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 Application 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 from each of the landlords under the Licenses, all in a form reasonably acceptable to Buyer and Buyer’s lenders all in the form of Exhibit F.

3.    Consents and releases from AMRESCO Funding Corporation/AMRESCO Commercial Finance, Inc./Goldman Sachs Credit Partners, L.P

4.    Consents and releases from Colonial Pacific Leasing Corporation.

5.    Consents and releases from BSB Leasing, Inc.

Required Consents (Buyer)

1.    Consents of Buyer’s creditors

2.    Federal Communications Commission consents to the Assignment Application 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.

Encumbrances

None other than those pursuant to the UCC Financing Statements below

UCC Financing Statements

Schedule III-1

DEBTOR NAME	STATE	JURISDICTION	SECURED PARTY	TYPE OF FILING	DATE FILED	FILE NO.
Ontario Broadcasting, LLC dba KIKA(AM)	CA	Secretary of State	Goldman Sachs Credit Partners L.P.	UCC-1	01/19/00	0002560460
Ontario Broadcasting, LLC dba KIKA(AM)	CA	Secretary of State	Goldman Sachs Credit Partners L.P.	UCC-2	07/05/01	01197C0350
Orange Broadcasting Corporation	CA	Secretary of State
Orange Broadcasting Corporation dba KIKF(FM)	CA	Secretary of State	AMRESCO Funding Corporation	UCC-1	01/13/97	9701460118
Orange Broadcasting Corporation dba KIKF(FM)	CA	Secretary of State	AMRESCO Funding Corporation	UCC-2	07/13/99	99203C0212
Orange Broadcasting Corporation dba KIKF(FM)	CA	Secretary of State	AMRESCO Commercial Finance, Inc.	UCC-2	11/12/99	99322C0137
Orange Broadcasting Corporation dba KIKF(FM)	CA	Secretary of State	Goldman Sachs Credit Partners L.P.	UCC-2	07/05/01	01197C0351
Orange Broadcasting Corporation dba KIKF(FM)	CA	Secretary of State	Goldman Sachs Credit Partners L.P.	UCC-2	08/31/01	01248C0449
Orange Broadcasting Corporation dba KIKF(FM)	CA	Secretary of State	Goldman Sachs Credit Partners L.P.	UCC-2	09/25/01	01270C0518
Orange Broadcasting Corporation	CA	Secretary of State	Colonial Pacific Leasing Corporation	UCC-1	01/16/97	97017600048
Orange Broadcasting dba KIK-FM	CA	Secretary of State	Imperial Business Corporation dba Imperial Capital Corporation	UCC-1	09/15/97	9726160086

Schedule III-2

DEBTOR NAME	STATE	JURISDICTION	SECURED PARTY	TYPE OF FILING	DATE FILED	FILE NO.
Orange Broadcasting Corp.	CA	Secretary of State	Colonial Pacific Leasing Corporation	UCC-1	02/13/98	9805060810
Orange Broadcasting Corp.	CA	Secretary of State	Colonial Pacific Leasing Corporation	UCC-1	08/04/98	9821860740
Orange Broadcasting Corp.	CA	Secretary of State	Colonial Pacific Leasing Corporation	UCC-1	10/22/98	9830260439
Orange Broadcasting Corp.	CA	Secretary of State	AT&T Capital Leasing Services, Inc.	UCC-1	12/28/98	9900560632
Orange Broadcasting Corporation	CA	Secretary of State	GE Capital Colonial Pacific Leasing Corp.	UCC-1	07/09/99	9920060216
Orange Broadcasting Corporation	CA	Secretary of State	GE Capital Colonial Pacific Leasing Corp.	UCC-2	10/05/00	00285C0427
Orange Broadcasting Corp. dba KMSL(AM) and KIKA(AM)	CA	Secretary of State	AMRESCO Commerical Finance, Inc.	UCC-1	07/29/99	9922260846
Orange Broadcasting Corp. dba KMSL(AM) and KIKA(AM)	CA	Secretary of State	AMRESCO Commerical Finance, Inc.	UCC-2	11/12/99	99322C0139
Orange Broadcasting Corp. dba KMSL(AM) and KIKA(AM)	CA	Secretary of State	Goldman Sachs Credit Partners L.P.	UCC-2	07/05/01	01197C0349
Orange Broadcasting	CA	Secretary of State	GE Colonial Pacific Leasing Corp.	UCC-1	07/30/99	9922460363
Orange Broadcasting Corp.	CA	Secretary of State	BSB Leasing, Inc.	UCC-1	10/29/99	9931260224
Orange Broadcasting Corp.	CA	Secretary of State	BSB Leasing, Inc.	UCC-2	05/26/00	00154C0252

Schedule III-3

DEBTOR NAME	STATE	JURISDICTION	SECURED PARTY	TYPE OF FILING	DATE FILED	FILE NO.
Orange Broadcasting	CA	Secretary of State	BSB Leasing, Inc.	UCC-1	02/07/00	0004160611
Orange Broadcasting	CA	Secretary of State	BSB Leasing, Inc.	UCC-2	07/07/00	00195C0240
Orange Broadcasting	CA	Secretary of State	Colonial Pacific Leasing Corp.	UCC-1	03/06/00	0006960492
Orange Broadcasting	CA	Secretary of State	Colonial Pacific Leasing Corp.	UCC-2	06/19/02	02171C0726
Orange Broadcasting	CA	Secretary of State	Conseco Finance Vendor Services Corp.	UCC-1	07/28/00	0021660355
Orange Broadcasting Corp.	CA	Secretary of State	GE Colonial Pacific Leasing Corp.	UCC-1	04/08/02	0209960631

UCC Termination Statements

Terminations or releases are required for all UCC Financing Statements listed above

Schedule III-4

SCHEDULE IV

Identification of Principal Items

of Tangible Personal Property

1.  All of Seller’s right, title and interest to the tower and/or antenna mounting pole located on top of One City Boulevard West, Orange, California.

2.  The Attached Schedule of Property

Schedule IV-1

SCHEDULE V

Allocation of the Purchase Price

Broadcasting Asset	Method to be Used to Determine the Allocation of Purchase Price as of the                 Closing Date	Allocated Amounts as of the Closing Date
Property, plant and equipment
Goodwill and FCC License
Purchase Price

[ . . . to come from Buyer and Seller . . . ]

Schedule V-1

SCHEDULE VI

Insurance

See attached

Schedule VI-1

SCHEDULE VII

Identification of Intellectual Property

KMXN-FM

Schedule VII-1

SCHEDULE VIII

PREPAID EXPENSES

Other than those which will be handled pursuant to Section 3.6, none.

Schedule VIII-1

SCHEDULE IX

INTENTIONALLY OMITTED

Schedule IX-1

SCHEDULE X

SPECIFIED EMPLOYEES

ORANGE BROADCASTING CORP.

1) N. Arthur Astor

2) Susan E. Burke – Exec VP

3) Jeff Gehringer – Business Manager

NORTH COUNTY BROADCASTING CORPORATION

1) Marla Frost – Traffic Mgr.

2) Rick Roome—Ops Mgr.

3) Craig Herdrich – Production

4) David Baum – GSM

5) Kristy Coday – AE

6) Thomas Noto – AE

7) Luis Bowden – Board Op/KCEO

8) Michael Howard – Board Op/KCEO

9) Melissa Johnson – Board Op/KCEO

10) Steve Schwartz – Board Op/KCEO

11) Brennan Vanorstran – Board Op/KCEO

Schedule X-1

SCHEDULE XI

INFORMATION REQUESTS

Copies of all engineering reports prepared by or for the Sellers relating to the Station including FCC filings and all work conducted by consulting engineers. Provide all executive summaries.

Schedule XI-1

EXHIBIT A-1

FORM OF PERSONAL GUARANTEE

See Attached

Schedule A-1-1

EXHIBIT A-2

FORM OF CORPORATE GUARANTEE

See Attached

Schedule A-2-1

EXHIBIT B

Legal Opinion of Seller’s Counsel

[Closing Date]

LBI Media, Inc.

Liberman Broadcasting, Inc.

LBI Radio License Corp.

1845 Empire Avenue

Burbank, California 91504

[Buyer’s various lenders]

Re:    Sale of Certain Assets of Astor Broadcast Group

Ladies and Gentlemen:

We have acted as counsel to Aries Communications, Inc, a California corporation (“Astor”) and Orange Broadcasting Corp., a California corporation (“Astor KMXN Sub”), in connection with the sale by the Seller and the purchase by Liberman Broadcasting, Inc., a California corporation (“LBI”), and LBI Radio 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 station KMXN-FM, (94.3 FM, Garden Grove, California) and related assets, license, permits and authorizations issued by the Federal Communications Commission pursuant to the Asset Purchase Agreement dated as of December 19, 2002 (the “Asset Purchase Agreement”), by and among the Buyers, LBI Media, Inc., a California corporation (“LBI Media”) and the Seller. We have also reviewed, among other things, (i) the Corporate Custodial Agreement Relating to Earnest Money dated             , 2002, in each case executed by Commonwealth Land Title Company, as escrow agent, LBI Media and Astor (the “Escrow Agreement”), (ii) the Local Marketing Agreement relating to KMXN-FM dated,             , 2002 executed by LBI and Astor (the “KMXN-FM LMA”), (iii) one or more bills of sale conveying to one or both Buyers all of the Tangible Personal Property and Intellectual Property, (iv) one or more assignments assigning to one or both Buyers the FCC Licenses and each of the Assumed Contracts and Required Consents, (v) the Personal Guarantee dated             , 2002 by N. Arthur Astor, (vi) the Corporate Guarantee dated             , 2002 by Astor, Astor KMXN Sub, North County Broadcasting Corporation, a California corporation and Ontario Broadcasting LLC, a California limited liability company and (vii) [list other agreements and documents] (the agreements and documents contained in clauses (i) through (vii) 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.

Exhibit B-1

We have also acted as counsel to N. Arthur Astor and the Other Subsidiaries.

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 Seller’s factual representations in the Certificate of Seller, dated             , 2002 (the “Certificate of Seller”), the Other Subsidiaries’ factual representations in the Certificates of Other Subsidiaries, dated             , 2002 (each a “Certificate of Other Subsidiary”), and N. Arthur Astor’s factual representations in the Certificate of Shareholder, dated             , 2002 (the “Certificate of Shareholder”), 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 or the Other Subsidiaries’ obligations under the Agreements to which Seller or the Other Subsidiaries, as the case may be, is a party depend on the due authorization, execution and delivery of the Agreements by the other parties to the Agreements (other than Seller or the Other Subsidiaries, as the case may be), 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 Seller and Other Subsidiaries is a corporation or limited liability company validly existing under the laws of the State of California with the power to own its properties and assets and to conduct any activity that a corporation or limited liability company organized under the California General Corporation Law may conduct.

(b)    Each Seller and Other Subsidiary has corporate power to enter into and to perform its obligations under the Agreements to which such Seller or Other Subsidiary, as the case may be, is a party.

(c)    The execution, delivery and performance by each Seller and each Other Subsidiary of the Agreements to which such Seller or such Other Subsidiary, as the case may be, is a party have been duly authorized by all necessary corporate action on the part of such Seller or such Other Subsidiary, as the case may be, and the Agreements to which such Seller or such Other Subsidiary, as the case may be, is a party have been duly executed and delivered by such Seller or such Other Subsidiary, as the case may be. The Personal Guarantee has been duly executed and delivered by N. Arthur Astor.

Exhibit B-2

(d)    The Agreements to which any Seller, the Other Subsidiaries or N. Arthur Astor is a party constitute the legally valid and binding obligations of such Seller, Other Subsidiary or N. Arthur Astor, as applicable, enforceable against such Seller, Other Subsidiary or N. Arthur Astor, 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)    Each Seller’s, Other Subsidiary’s and N. Arthur Astor’s execution and delivery of, and performance of its or his obligations on or prior to the date of this opinion under, the Agreements to which such Seller, Other Subsidiary or N. Arthur Astor is a party, do not and will not (i) violate such Seller’s or Other Subsidiary’s organizational documents and operating agreements, (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 any Seller, any Other Subsidiary or N. Arthur Astor, under any existing obligation of or restriction on such Seller, any Other Subsidiary or N. Arthur Astor under any agreement to which it or he is a party identified in the Certificate of Seller, any Certificate of Other Subsidiary or the Certificate of Shareholder as being a material agreement of any Seller, any Other Subsidiary or N. Arthur Astor, or (iii) to our knowledge, breach or otherwise violate any existing obligation of or restriction on any Seller, any Other Subsidiary or N. Arthur Astor under any order, judgment or decree of any California or federal court or governmental authority binding on any Seller, any Other Subsidiary or N. Arthur Astor.

(f)    The execution and delivery by any Seller, any Other Subsidiary or N. Arthur Astor of, and performance of its or his obligations on or prior to the date of this opinion under, the Agreements to which Seller, any Other Subsidiary or N. Arthur Astor is a party do not violate any California or federal statute or regulation that we have, in the exercise of customary professional diligence, recognized as applicable to any Seller, any Other Subsidiary or N. Arthur Astor 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 Seller, any Other Subsidiary or N. Arthur Astor or to transactions of the type contemplated by the Agreements to which any Seller, any Other Subsidiary or N. Arthur Astor is a party is required on the part of Seller, any Other Subsidiary or N. Arthur Astor for the execution and delivery of, and performance of its or his obligations on or prior to the date of this opinion under, the Agreements to which any Seller, any Other Subsidiary or N. Arthur Astor is a party.

(h)    Except for the matters described in Schedule          to the Asset Purchase Agreement, we have not given substantive attention on behalf of any Seller, any Other Subsidiary or N. Arthur Astor or represented any Seller, any Other Subsidiary or N. Arthur Astor in connection with any action, suit or proceeding pending or threatened against any Seller, any Other Subsidiary or N. Arthur Astor before any court, arbitrator or governmental agency.

Exhibit B-3

[Qualifications to be provided by Counsel to Seller]

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.

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 any Seller, any Other Subsidiary and N. Arthur Astor 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 any Seller, any Other Subsidiary and N. Arthur Astor in connection with this opinion or in other matters.

This opinion is furnished by us as counsel for each Seller, each Other Subsidiary and N. Arthur Astor and may be relied upon by you only in connection with the Agreements. With the specific exception of [INSERT NAME OF AGENT] for itself and as Administrative Agent for the Lenders, and the Lenders and other Agents (and their respective actual and prospective participants, assignees and successors) from time to time party to the [INSERT DESCRIPTION OF APPLICABLE FINANCING DOCUMENT(S) AND INSERT APPLICABLE DESCRIPTION OF PARTIES THERETO], this opinion may not be used or relied upon by you for any other purpose, or disclosed or delivered to any other person, without in each instance our prior written consent.

Respectfully submitted,

Exhibit B-4

EXHIBIT C

Legal Opinion of Seller’s FCC Counsel

[Closing Date]

LBI Media, Inc.

Liberman Broadcasting, Inc.

LBI Radio License Corp.

1845 Empire Avenue

Burbank, California 91504

[Buyer’s various lenders]

Re:    Assignment of Authorizations of KMXN-FM, Garden Grove, California.

Gentlemen:

We have acted as special communications counsel to Aries Communications, Inc., a California corporation and Orange Broadcasting Corp., a California corporation (collectively the “Sellers” and each individually a “Seller”), in connection with the sale by the Sellers and the purchase by Liberman Broadcasting, Inc., a California corporation (“LBI”), and LBI Radio 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 station KMXN-FM (94.3FM, Garden Grove, California) (the “Station”) and related assets, license, permits and authorizations issued by the Federal Communications Commission (“FCC”) pursuant to the Asset Purchase Agreement dated as of December 19, 2002 (the “Asset Purchase Agreement”), by and among Buyers, LBI Media, Inc., a California corporation (“LBI Media”) and Sellers. We are providing this opinion to you at the request of Sellers 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 not reviewed any agreement, contract or corporate document other than the Asset Purchase Agreement and Exhibits and Schedules thereto in connection with the opinions expressed herein. The opinions stated herein do not purport to cover matters that would require or involve an inspection of the Station or the work product, records or operations of the Station and we have not conducted such an inspection. We render no opinion with respect to whether a security interest may be held in any authorization issued by the FCC. We have not searched the docket files of any court.

This opinion is limited to and addresses only matters within the jurisdiction of the FCC under the Communications Act of 1934, as amended, and the rules, regulations and published orders of the FCC pertaining to the Station (all hereinafter collectively referred to as the “Communications Laws”). We have assumed, and relied upon without any independent

Exhibit C-1

inquiry or verification by us, the accuracy and completeness of (i) representations and warranties of Sellers as to factual matters in the Asset Purchase Agreement, Exhibits and Schedules thereto, and (ii) the accuracy and completeness of the FCC’s publicly available records for the Station in the FCC’s Washington, D.C. offices at the time of examination by us on                 , 2002 [NOTE: INSERT DATE NOT MORE THAN 3 BUSINESS DAYS PRIOR TO THE CLOSING DATE], and the absence of changes since the date of our examination. We have also reviewed the files of this firm with respect to our representation of the Sellers.

Whenever an opinion herein with respect to the existence or absence of facts is indicated to be based on our knowledge, it is intended to signify that, during the course of our representation of Sellers in connection herewith, including, without limitation, during the course of the examination described in the preceding paragraph, no information has come to the attention of the attorneys in our firm who have devoted substantive legal attention to the representation of Sellers that gives those attorneys actual knowledge of the existence or absence of such facts. Other than our above-described review of the records of the FCC and the files of this firm, we have not undertaken any independent investigation to determine the existence or absence of such facts and no inference as to our knowledge of the existence or absence of such facts should be drawn from our serving as communications counsel to Sellers. In our examination we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified or photostatic copies, and the authenticity of the originals of such copies. As to any facts material to this opinion which we did not independently establish or verify, we have relied upon statements and representations of the Sellers and their officers and other representatives and of public officials.

Our opinion is limited strictly to the matters stated herein and no opinions may be inferred or are implied beyond the matters expressly stated herein. We have assumed no obligation to advise you beyond the opinion specifically expressed herein. The opinion set forth herein is as of the date hereof, and we have undertaken no obligation to advise you of any changes that may occur thereafter.

Based upon our examination of the foregoing disclosures, documents, records and matters of law and subject to the qualifications, assumptions and limitations set forth herein, we are of the opinion (or, where indicated, confirm) that:

1. Orange Broadcasting Corp. holds the FCC licenses, which have been granted or assigned to Sellers by the FCC with respect to KMXN-FM, as listed on Exhibit A hereto (the “Orange Broadcasting FCC Licenses” and together with the North County FCC Licenses, the “FCC Licenses”). The FCC’s records reflect that the main station license for KMXN-FM expires on December 1, 2005. The Orange Broadcasting FCC Licenses include all FCC licenses, permits and authorizations necessary for the Sellers to operate KMXN-FM. The Orange Broadcasting FCC Licenses are in full force and effect.

2. To our knowledge, except for proceedings of general applicability to the radio broadcast industry, we have not been notified of, and the

Exhibit C-2

FCC has not issued any public notice announcing, any formal investigative proceeding or claim, and there is no other legal or administrative proceeding pending or threatened before the FCC against the Station or any Seller with respect to the Station 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 Station or any Seller with respect to the Station by the FCC, or the adverse material modification of any FCC License.

3. The order of the FCC granting its consent for the assignment of the Orange Broadcasting FCC Licenses to LBI Sub (the “Orange Broadcasting FCC Consent” and, together with the North County FCC Consents, the “FCC Consents”) was issued on                  and public notice of the Orange Broadcasting 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 Orange Broadcasting FCC Consent has expired, and to our knowledge 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 Orange Broadcasting FCC Consent on its own motion has expired, and the FCC did not give public notice of its intent to review the Orange Broadcasting FCC Consent on its own motion and, to our knowledge, the FCC has not otherwise stated an intent to review the Orange Broadcasting FCC Consent on its own motion.

4. Other than the FCC Consents, no additional order or grant is required from the FCC in order to consummate the assignment of the FCC Licenses from Sellers to the Buyers pursuant to the Asset Purchase Agreement.

5. The execution, delivery and consummation by Sellers of the Asset Purchase Agreement do not violate the Communications Laws.

This opinion is furnished by us as counsel for the Sellers and may be relied upon by you only in connection with the Asset Purchase Agreement. With the specific exception of [INSERT NAME OF AGENT] for itself and as Administrative Agent for the Lenders, and the Lenders and other Agents (and their respective actual and prospective participants, assignees and successors) from time to time party to the [INSERT DESCRIPTION OF APPLICABLE FINANCING DOCUMENT(S) AND INSERT APPLICABLE DESCRIPTION OF PARTIES THERETO], this letter may not be used or relied upon by you for any other purpose, or disclosed or delivered to any other person, without in each instance our prior written consent.

Exhibit C-3

Very truly yours,

[SELLER’S FCC COUNSEL]

By:                                                              

Exhibit C-4

Exhibit A to Seller’s FCC Opinion

Orange Broadcasting FCC Licenses

[Note: Seller to provide appropriate language.]

Exhibit C-5

EXHIBIT D

Legal Opinion of LBI Entities Counsel

[Closing Date]

Aries Communications, Inc.

[Address]

[Buyer’s various lenders]

Re:    Purchase of Certain Assets of Astor Broadcast Group

Ladies and Gentlemen:

We have acted as counsel to LBI Media, Inc., a California corporation (“LBI Media”), Liberman Broadcasting, Inc., a California corporation (“LBI”) and LBI Radio License Corp., a California corporation (“LBI Sub”, and together with LBI Media 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 station KMXN-FM, (94.3 FM, Garden Grove, California) and related assets, license, permits and authorizations issued by the Federal Communications Commission to Aries Communications, Inc, a California corporation (“Astor”) and Orange Broadcasting Corp., a California corporation (“Astor KMXN Sub,” together with Astor, the “Seller”) pursuant to the Asset Purchase Agreement dated as of December 19, 2002 (the “Asset Purchase Agreement”), by and among the LBI Entities and the Seller. We have also reviewed, among other things, (i) the Corporate Custodial Agreement Relating to Earnest Money dated                 , 2002 (the “Escrow Agreement”) by and among LBI, Astor and Commonwealth Land Title Company, (ii) the Local Marketing Agreement relating to KMXN-FM dated                 , 2002 executed by LBI and Astor (the “KMXN-FM LMA”), (iii) one or more bills of sale conveying to one or both Buyers all of the Tangible Personal Property and Intellectual Property, (iv) one or more assignments assigning to one or both Buyers the FCC Licenses and each of the Assumed Contracts and Required Consents, and (v) [list other agreements and documents] (the agreements and documents contained in clauses (i) through (v) 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 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.

Exhibit D-1

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 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 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

Exhibit D-2

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 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.

[Qualifications to come from Counsel to LBI Entities]

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.

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 furnished by us as counsel for the Buyer and may be relied upon by you only in connection with the Agreements. With the specific exception of [INSERT NAME OF AGENT] for itself and as Administrative Agent for the Lenders, and the Lenders and other Agents (and their respective actual and prospective participants, assignees and successors) from time to time party to the [INSERT DESCRIPTION OF APPLICABLE FINANCING DOCUMENT(S) AND INSERT APPLICABLE DESCRIPTION OF PARTIES THERETO],

Exhibit D-3

this opinion may not be used or relied upon by you for any other purpose, or disclosed or delivered to any other person, without in each instance our prior written consent.

Respectfully submitted,

Exhibit D-4

EXHIBIT E

Form of KMXN-FM LMA

See Attached

Exhibit E-1

EXHIBIT F

Form of Estoppel and Consent

See Attached

Exhibit F-1

EXHIBIT G

Form of Escrow Agreement

See Attached

Exhibit G-1

EX-10.25

EXHIBIT 10.25

LOCAL MARKETING AGREEMENT

This Local Marketing Agreement (the “Agreement”), dated as of December 19, 2002, is made and entered into by and between Aries Communications, Inc., a California corporation (the “Owner”), the owner and operator of KMXN-FM (94.3 FM), Orange County, California (the “Station”), which is licensed to its wholly owned subsidiary, Orange Broadcasting Corporation, and Liberman Broadcasting, Inc., a California corporation (the “Broker”).

WHEREAS, Owner is engaged in the business of radio broadcasting on the Station and will have available airtime;

WHEREAS, Owner has agreed to retain Broker to provide programming for the Station pursuant to the terms and conditions set forth in this Agreement and in conformity with the Station’s policies and practices and the Communications Act of 1934, as amended together with the rules and regulations (the “FCC Rules”) of the Federal Communications Commission (the “FCC”); and

WHEREAS, Broker has agreed to supply such programming and sell advertising that is in conformance with the Station’s policies and all FCC Rules, including the requirement that the ultimate control of the Station be maintained by Owner;

NOW THEREFORE, for and in consideration of the mutual covenants herein contained, the parties hereto have agreed and do agree as follows:

1.    Purchase of Airtime and Provision of Programming.    From the Effective Date until the date on which this Agreement is terminated, subject to the terms and conditions of this Agreement, Owner agrees to broadcast programming supplied by Broker 24 hours-per-day, 7 days per week provided that Owner may broadcast up to one (1) hour of programming per week which is aimed at serving the needs and interests of the Station’s community of license on Sundays before 6:00 a.m. and in accordance with Section 11 of this Agreement. The Effective Date shall be (i) 12:01 a.m. on the date immediately following the date of the filing with the FCC of the Assignment Application relating to the Station, as the term “Assignment Application” is defined in the Asset Purchase Agreement, dated as of December 19, 2002, by and among the Owner and Orange Broadcasting Corp., a California corporation, on the one hand, the Broker, LBI Media, Inc., a California corporation, and LBI Radio License Corp., a California corporation, on the other (as amended from time to time, the “Asset Purchase Agreement”) or (ii) such other date as may be mutually agreed upon in writing by the parties. Notwithstanding anything to the contrary in this Agreement, Broker’s obligations hereunder shall not commence unless Owner shall be in compliance with its obligations under the Asset Purchase Agreement with respect to this Agreement. Broker shall have the right to select the format for programming on the Station (the “Format”).

2.    Payments.    From and after the Effective Date, Broker shall pay Owner the payments as set forth on Exhibit B hereto. All payments shall be made in advance in equal monthly installments due no later than the first (1^st) day of each calendar month during the term of this Agreement; provided, however, that on or before the Effective Date, Broker shall have paid to Owner a prorated monthly payment for the month in which the Effective Date occurs as calculated based upon the number of days in such month falling on and after the Effective Date as a percentage of the total days in such month and multiplied by the monthly payment set forth on Exhibit B hereto. The parties shall similarly prorate the amount due for the last month of this Agreement in the event that this Agreement is terminated other than on the last day of a calendar month with Owner either refunding to Broker the amount of such proration within five (5) business days or, if this Agreement terminates upon consummation of the transactions

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contemplated by the Asset Purchase Agreement, Owner shall, at its election, either credit such amount against the amounts due from Broker to Owner on the Closing Date (as defined in the Asset Purchase Agreement) or refund such amount to Broker on the Closing Date. All monthly payments shall be by check.

If Broker has not delivered any payment owing to Owner by the tenth (10^th) day of the calendar month, after three (3) days’ written notice of the late payment to Broker, Owner may, in its sole discretion, suspend the carriage of Broker’s programming and resell such broadcast time (a “Default Segment”). Broker shall remain liable to Owner for the difference between the amount payable by Broker pursuant to Section 1 for the broadcast time comprising the Default Segment during the remainder of the term of the Agreement and the amount, if any, received by Owner upon resale of all or part of the Default Segment to a third party during the remainder of the term of the Agreement or the operation of the Station by Owner during such period.

The Broker shall receive a credit for any scheduled programming not broadcast by the Station under the powers of operation and preemption in Section 11, the amount of such credit to be equal to such percentage of the monthly payment amount as the amount of time preempted comprises of the total programming hours for such month. Such credit shall be Owner’s sole compensation to Broker for air time so lost. Owner shall have no other liability to Broker or any third party pursuant to the terms of this paragraph.

Notwithstanding any other provisions of this Agreement and without limiting other rights and remedies of Owner, any payment provided for in this Section 2 not made on the due date shall be subject to finance charges at a rate equal to the lesser of (x) 10% per annum or (y) the highest rate allowed by applicable law, compounded monthly.

3.    Accounts Receivable.    Broker shall have no interest in any cash accounts receivable for broadcasts on the Station which occur prior to the Effective Date. Except for revenues from a Default Segment, all revenues and cash accounts receivable for broadcasts on the Station on or following the Effective Date shall belong to Broker. Broker may sell advertising time consistent with the applicable rules and regulations and the Policy Statement (as defined below), on the Station in combination with any other broadcast station of its choosing, subject to compliance with applicable law. Broker shall be responsible for payment of the commissions due to any national sales representative, local sales representative, agency or employee engaged by it for the purpose of selling advertising that is carried during the programming it provides to Owner. Notwithstanding anything in the foregoing to the contrary, to the extent that Owner has received prepayment for advertising time for periods following the Effective Date, Owner shall disclose such prepayments to Broker on or prior to the Effective Date and such prepayments shall be deducted from the amounts due to Owner pursuant to Section 2 of this Agreement, but only in the event Broker airs such prepaid advertising. All information provided by Owner prior to the Effective Date, pursuant to the terms of the Asset Purchase Agreement, shall accurately reflect all advertisements scheduled following the Effective Date. If advertisers whose advertisements air on the Station on or after the Effective Date make payments to Owner rather than to Broker with respect to such advertisements, Owner shall hold such amounts in trust for Broker, shall promptly notify Broker of the receipt of such funds and shall forward such amounts to Broker within five (5) business days. If Owner fails to forward such amount to Broker within five (5) business days, Broker shall have the right to set such amounts off against the payments due under Section 2 hereunder with amounts subsequently paid by Owner being reimbursed by Broker.

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4.    Prohibition on Resale.    Broker agrees that it will not resell or otherwise transfer all or any portion of the airtime purchased from Owner hereunder without the express prior written consent of Owner, which consent shall not be unreasonably withheld, any such sale or transfer without such consent being void and of no force or effect; provided, however, that Broker may resell airtime in blocks of no longer than six (6) consecutive hours to one individual or firm (per resold block) without Owner’s prior written consent.

5.    Program Delivery Requirements.    Broker shall deliver programming at its expense to Owner at the location set forth on Exhibit E for further delivery to the Station’s transmitter facilities via telephone line. Owner agrees to use its best commercially reasonable efforts to facilitate the program delivery, including installation of the telephone line and use of the Owner’s QEI Catlink equipment without additional charge, from the date of this Agreement.

6.    Term.    The term of this Agreement shall be for a period beginning on the date first above written and expiring upon the earlier of (x) the Closing Date (as defined pursuant to the Asset Purchase Agreement) or (y) termination of the Asset Purchase Agreement, unless sooner terminated as provided by this Agreement.

7.    Station Facilities.

7.1    Operation of Station.    Throughout the term of this Agreement, Owner shall operate the Station with the maximum authorized facilities. Any necessary maintenance work affecting the operation of the Station which would result in a reduction of transmitter power by more than ten percent (10%) shall be scheduled upon as much prior notice to Broker as practicable and shall be performed between the hours of 12:00 a.m. and 5:00 a.m. Owner reserves the right, subject to FCC authorization, to modify the facilities of the Station as it determines is advisable in its sole discretion and consistent with the Asset Purchase Agreement.

7.2     Interruption of Normal Operations.    If the Station suffers loss or damage to its transmission facilities for any cause other than one governed by Section 7.3, which results in the decrease in the Station’s operating power by more than ten percent (10%), Owner shall notify Broker within two (2) hours and shall promptly undertake such repairs as necessary to restore the operation of the Station within five (5) days from the occurrence of such loss or damage. If Owner fails to return the Station to normal operations within such five (5) day period, Broker will be entitled to decrease the payments called for in Sections 1 and 2 in proportion to the loss of power by more than ten percent (10%) dating back to the initial decrease in power. If Owner fails to accomplish that result within thirty (30) days, Broker may terminate this Agreement upon ten (10) days notice to Owner.

7.3    Force Majeure.    Any failure or impairment of the Station’s facilities or any delay or interruption in the broadcast of programs, or failure at any time to furnish facilities, in whole or in part, for broadcast due to acts of God, strikes, lockouts, civil riot, floods and any other cause not reasonably within the control of Owner, shall not constitute a breach of this Agreement and Owner will not be liable to Broker. Broker shall not be required to make payments to Owner for periods covered by the force majeure event.

8.    Programming Standards.    All programs supplied by Broker shall meet in all material respects all applicable rules, regulations and policies of the FCC and the standards set out in Exhibit C of this Agreement (the “Policy Statement”). All advertising spots and promotional material or announcements shall comply with all applicable federal, state and local

3

regulations and policies. If, in the reasonable judgment of Owner, the programming presented by Broker does not comply with the applicable rules, regulations and policies of the FCC and the standards set out in the Policy Statement, Owner may suspend or cancel any such program after giving written notice of such determination to Broker and Broker having failed to remedy the problem within ten (10) business days. The provision by Broker of any programming, announcement, advertising or other matter that is slanderous, defamatory, obscene or indecent, as determined by a final, unappealable order of the FCC or a court of competent jurisdiction, shall constitute a material breach of this Agreement, and shall entitle Owner, at its sole discretion, to terminate this Agreement immediately and exercise its rights and remedies under this Agreement based on such material breach by Broker, notwithstanding the provisions of Sections 6 and 16.2. If any programming, announcement, advertising or other matter provided by or on behalf of Broker for broadcast on the Station is slanderous or defamatory, Owner may require a retraction to be broadcast on the Station hereunder without (i) creating any liability to Broker or any other third party or (ii) limiting Owner’s indemnification rights pursuant to Section 15, or any of its other rights pursuant to Sections 10 and 16, or any other provision of this Agreement.

9.    Responsibility for Expenses and Employees.

9.1    Division of Expenses.    Owner will provide and be responsible for (i) the Station personnel necessary for maintenance and operation of the Station’s transmission facilities (including without limitation a Chief Operator), and will be responsible for the salaries, taxes, insurance and related costs for all Station personnel used in the maintenance and operation of the Station’s transmission facilities and main studio, (ii) all real and personal property taxes, mortgage fees and expenses and other real property costs (including insurance), (iii) all transmitter site leases and any lease payments related to the Station’s studios, (iv) any utilities, and (v) all costs and expenses for the maintenance of all transmitter equipment. Whenever on the Station’s premises, all personnel shall be subject to the supervision and the direction of Owner’s General Manager and/or the Station’s Chief Operator. Except as set forth in the foregoing sentences of this Section 9, Broker shall be responsible for all other expenses involved in the operation of the Station including, without limitation, (i) all operating expenses of the Station (including telephone expenses and expenses related to sales, marketing, promotion, advertising, billing and collections and traffic), (ii) all costs and expenses for maintenance of studio equipment to the extent used by Broker to provide programming hereunder, (iii) the employment and salaries, taxes, insurance and related costs for all personnel used in the production of its programming, including salespeople, traffic personnel board operators and programming staff and (iv) all copyright fees attributable to Broker’s programming broadcast on the Station, including, without limitation, all ASCAP, BMI and SESAC fees, and fees for any other necessary music performance rights, as determined in the sole discretion of Owner. At Broker’s request, Owner shall file new agreements with the music licensing organizations in order to reflect the change in the Station’s format.

10.    Operation of Station.

10.1    Control.    Notwithstanding anything to the contrary in this Agreement, Owner shall have full authority and power over the management and operation of the Station during the period of this Agreement. In no event shall Broker, or Broker’s employees, represent, depict, describe or portray Broker as Owner of the Station. To this end, all employees of Broker, whose work involves the Station, shall be informed as to Owner’s ultimate control over the Station and Broker’s subordinate capacity. Owner shall provide and pay for the General Manager of the Station, who shall report and be accountable solely to Owner and who shall be responsible for the direction of the day-to-day operation of the Station to the extent required pursuant to the FCC

4

Rules. To the extent necessary to avoid an unauthorized transfer of control of the Station’s FCC licenses, Owner shall retain control over the policies, programming and operations of the Station, including the right to pre-empt any programs in order to broadcast a program deemed by Owner to be of greater national, regional or local interest, subject to Section 11. Owner shall at all times be solely responsible for meeting all of the FCC’s requirements with respect to public service programming, for maintaining the political and public inspection files and the Station log, and for the preparation of all programs/issues lists.

10.2    Broker’s Responsibilities with Respect to Operation of Station.    At Owner’s request, Broker shall use commercially reasonable efforts to cooperate with and assist Owner in complying with the FCC Rules and the other rules and regulations referenced in Section 10.1, including by reporting such information as Owner may reasonably request from time to time in order to comply with its programming reporting requirements. Broker shall cause the Station to transmit any required tests of the Emergency Alert System at such times as are reasonably directed by Owner. Broker shall prepare, maintain and deliver to Owner all records and information in Broker’s possession that are required by the FCC to be placed in the public inspection files of the Station pertaining to the broadcast of political programming and advertisements, in accordance with the provisions of Sections 73.1940 and 73.3526 of the FCC’s rules. Broker also shall consult with Owner and adhere to all applicable statutes and the rules, regulations and policies of the FCC, as announced from time to time, with respect to the carriage of political advertisements and programming (including, without limitation, the rights of candidates and, as appropriate, others to “equal opportunities”) and the charges permitted therefor. Broker shall furnish within its programming, on behalf of Owner, all station identification announcements required by the FCC’s rules.

11.    Public Affairs; Special Events.    Nothing in this Agreement shall abrogate the unrestricted authority of Owner to discharge its obligations to the public and to comply with the FCC Rules with respect to meeting the ascertained needs and interests of the public. Additionally, Owner shall have the right, in its reasonable discretion, to pre-empt any of the broadcasts of the programs supplied by Broker, and to use part or all of the hours of operation of the Station for the broadcast of events related to local or national emergencies if Broker is not already covering such event. In all such cases, Owner will use its best efforts to give Broker reasonable advance notice of its intention to pre-empt programming and, in the event of such pre-emption, Broker shall receive a credit for such time as may be pre-empted by Owner.

12.    Right to Use the Programs.    The right to use the programs produced by Broker and to authorize their use in any manner and in any media whatsoever shall be at all times vested solely in Broker except as authorized by this Agreement.

13.    Payola and Plugola.    Broker agrees that Broker will not accept any compensation of any kind or gift or gratuity of any kind whatsoever, regardless of its value or form, including, but not limited to, a commission, discount, bonus, materials, supplies or other merchandise, services or labor, whether or not pursuant to written contracts or agreements between Broker and merchants or advertisers, unless the payer is identified in the programs as having paid for or furnished such consideration in accordance with FCC requirements. Upon request from Owner, Broker agrees annually to execute and provide Owner with a Payola Affidavit, substantially in the form which is provided as Exhibit D hereto.

14.    Compliance with Law.    The Broker will, in good faith, endeavor to comply with all laws and regulations applicable to the broadcast of programming by the Station.

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15.    Indemnification.    The Broker will indemnify and hold harmless Owner and its officers, directors, employees, affiliates and agents (the “Owner Parties”) against all claims, damages, liabilities, costs and expenses including, without limitation, amounts paid in settlement, any judgment and reasonable attorneys’ fees and costs (the “Losses”) resulting from claims for defamation, slander, illegal competition or trade practice, violation of rights of privacy, and infringement of copyrights or other proprietary rights or other law arising out of the content of programming broadcast on the Station and furnished by Broker pursuant to this Agreement. The Broker shall further indemnify and hold harmless each Owner Party from and against all other Losses arising from the content of programming broadcast on the Station and furnished by Broker pursuant to this Agreement with respect to any FCC enforcement proceeding.

16.    Events of Default; Cure Periods and Remedies.

16.1    Events of Default.    The following shall constitute events of default (the “Events of Default”) under the Agreement:

16.1.1    Non-Payment.    The Broker’s failure to pay any broadcast fee pursuant to Sections 1 and 2 when due subject to the cure provision in Section 2.

16.1.2    Non-Timely Delivery of Program Materials.    Broker’s failure to deliver programs in a timely fashion.

16.1.3    Default in Covenants.    The default by Broker or by Owner in the performance of any material covenant, condition or undertaking contained in this Agreement (other than defaults governed by Sections 8, 16.1.1 or 16.1.2 and defaults arising as a result of the circumstances contemplated in Section 7.2 or 7.3, which, in each case, shall be governed by such sections).

16.1.4    Breach of Representation.    If any representation or warranty made by Owner or Broker in this Agreement, or in any certificate or document furnished by Broker to Owner pursuant to the provisions of this Agreement, shall prove to have been false or misleading in any material respect as of the time furnished.

16.2    Cure Periods.    Notwithstanding anything in Section 16.1 to the contrary, with respect to Sections 16.1.3 and 16.1.4, no Event of Default shall be deemed to have occurred until the non-defaulting party has provided the party in default with written notice specifying the event or events that, if not cured, would constitute an Event of Default and specifying the actions necessary to cure the default(s) and the defaulting party shall have failed to have cured such default within sixty days after receipt of such notice. This period may be extended for a reasonable period of time if the defaulting party is acting in good faith to cure and such delay is not materially adverse to the non-defaulting party.

16.3    Termination Upon Default.    Upon the occurrence of an Event of Default, the non-defaulting party may immediately terminate this Agreement, provided that it is not also in material default of this Agreement. Notwithstanding the foregoing, this Agreement: (a) shall terminate immediately, without notice to Broker or any further action by Owner or any other person, upon Broker’s making a general assignment for the benefit of creditors, or filing a petition for bankruptcy, for reorganization or an arrangement, or for the appointment of a receiver, trustee or similar creditors’ representative for the property or assets of Broker under any federal or state insolvency law; and (b) shall terminate at the end of the thirtieth (30^th) day after any person has filed against Broker a petition for bankruptcy, for reorganization or an

6

arrangement, or for the appointment of a receiver, trustee or similar creditors’ representative for the property or assets of Broker under any federal or state insolvency law, unless such petition has been dismissed or discharged by such time. In no event shall Owner or Broker have any liability for consequential, special, incidental, or lost profits damages.

17.    [Reserved].

18.    Termination Upon Order of Judicial or Governmental Authority.    If any court of competent jurisdiction or any federal, state or local governmental authority designates a hearing with respect to the continuation or renewal of any license or authorization held by Owner for the operation of the Station, advises any party to this Agreement of its intention to investigate or to issue a challenge to or a complaint concerning the activities permitted by this Agreement, or orders the termination of the Agreement and/or the curtailment in any manner material to the relationship between the parties to this Agreement of the provision of programming by Broker, with the concurrence of Owner, Broker shall have the option to seek administrative or judicial appeal of or relief from such order(s), in which event Owner shall cooperate with Broker provided that Broker shall be responsible for legal fees incurred in such proceedings, or Broker shall notify Owner that the Agreement will be terminated in accordance with such order(s). If the FCC designates the renewal application of the Station for a hearing as a consequence of any action taken by Broker under this Agreement, Broker shall cooperate and comply with any reasonable request of Owner to assemble and provide to the FCC information relating to Broker’s performance under this Agreement, at Broker’s expense. Upon termination following such governmental order(s), Broker shall pay to Owner any fees due but unpaid as of the date of termination as may be permitted by such order(s), and Owner shall reasonably cooperate with Broker to the extent permitted to enable Broker to fulfill advertising or other programming contracts then outstanding. Thereafter, neither party shall have any liability to the other.

19.    Mutual Representations and Warranties.    Each of Owner and Broker represents to the other (i) that it is legally qualified and able to enter into this Agreement, (ii) that the execution, delivery and performance hereof does not constitute a breach or violation of any agreement, contract or other obligation to which it is subject or by which it is bound and (iii) that this Agreement constitutes the legal, valid and binding obligation of such party, enforceable in accordance with its terms.

20.    Maintenance of Corporate Status.    At all times during the term of this Agreement, Broker and Owner shall take such actions as are necessary to ensure that the respective party is in good standing under the laws of its jurisdiction of incorporation.

21.    Modification and Waiver.    No modification or waiver of any provision of the Agreement shall be effective unless made in writing and signed by the party adversely affected, and any such waiver and consent shall be effective only in the specific instance and for the purpose for which such consent was given.

22.    No Waiver; Remedies Cumulative.    No failure or delay on the part of Owner or Broker in exercising any right or power under this Agreement 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 waiver of any breach of this Agreement by any party hereto shall not be deemed to be a waiver of any preceding or subsequent breach under this Agreement. The rights and remedies of the parties to this Agreement are cumulative and are not exclusive of any rights or remedies which either may otherwise have.

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23.    Construction.    This Agreement shall be construed in accordance with the laws of the State of California without regard to the provisions of conflicts of law thereunder. The obligations of the parties to this Agreement are subject to all federal, state or municipal laws or regulations, including those of the FCC, now or hereafter in force. The parties each acknowledge that all the terms and conditions in this Agreement have been the subject of active and complete negotiation between the parties and represent the parties’ agreement based upon all relevant considerations. The parties agree that the terms and conditions of this Agreement shall not be construed in favor of or against any party by reason of the extent to which any party or its professional advisors participated in the preparation hereof. Nothing in this agreement shall be deemed to constitute a joint venture or partnership between the parties hereto.

24.    Headings.    The headings contained in this Agreement are included for convenience only and shall not in any way alter the meaning of any provision.

25.    Successors and Assigns.    This Agreement may not be assigned by Broker without the express written consent of Owner first had and obtained. Except as otherwise provided herein, this Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns.

26.    Counterpart Signatures.    This Agreement may be signed in one or more counterparts, each of which shall be deemed a duplicate original and be binding on the parties to this Agreement.

27.    Notices.    Any notice required hereunder shall be in writing and any payment, notice or other communications shall be deemed given when delivered personally, or mailed by certified mail with return receipt requested or by Federal Express, postage prepaid, and addressed as follows:

If, to Broker:	Lenard D. Liberman
	Executive Vice President
	Liberman Broadcasting of Houston, Inc.
	1845 Empire Ave.
	Burbank, California 91504
	Phone: BOTH (818) 563-5722 and
	(281) 493-2900
	Fax: BOTH (818) 558-4244 and
	(281) 759-3963
with copies (which shall not constitute notice) to:
	Joseph K. Kim, Esq.
	O’Melveny & Myers LLP
	400 South Hope Street, 15th Floor
	Los Angeles, California 90071
	Phone: (213) 430-6000
	Fax: (213) 430-6407
If to Seller:

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	Mr. N. Arthur Astor
	Astor Broadcast Group
	1045 South East Street
	Anaheim, California 92805
	Phone: (714) 502-9494
	Fax: (714) 502-9400
with copies (which shall not constitute notice) to:
	Roger J. Metzler, Jr., Esq.
	McQuaid, Metzler, Bedford & Van Zandt
	211 Main Street, 16th Floor
	San Francisco, California
	Phone: (415) 905-0200
	Fax: (415) 905-0202

28.    Entire Agreement.    This Agreement embodies the entire agreement between the parties and there are no other agreements, representations, warranties, or understandings, oral or written, between them with respect to the subject matter hereof.

29.     Severability.    In the event that any of the provisions contained in this Agreement is held to be invalid, illegal or unenforceable, it shall not affect any other provision hereof, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had not been contained herein.

30.    Attorneys’ Fees.    In the event of any legal action to enforce the terms of this Agreement, the prevailing party in any such action shall be entitled to recover his or its costs and reasonable attorneys’ fees incurred from the losing party.

31.    Certification.    For purposes of Section 73.3555, Note 2(k)(3) of the FCC Rules, Owner certifies that it maintains ultimate control over the Station’s facilities, including specifically control over the Station’s finances, personnel and programming and Broker certifies that this Agreement complies with the provisions of Section 73.3555(a), 73.3555(c) and 73.3555(d) of the FCC Rules.

[Remainder of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement on the date first written above.

LIBERMAN BROADCASTING, INC.
By:	/s/ Jose Liberman
	Jose Liberman President

ARIES COMMUNICATIONS, INC.
By:	/s/ Arthur Astor
	N. Arthur Astor

S-1

EXHIBIT A

[To Come]

A-1

EXHIBIT B

Payments

In consideration for the airtime supplied to Broker pursuant to this Agreement, Broker shall provide the following consideration to Owner.

A.     Monthly Rates

In accordance with Section 2 of the Agreement, Broker shall make monthly payments of $200,000 per month.

B.    Costs

Broker shall promptly reimburse Owner for any amounts paid by Owner which represents costs which Broker has agreed to assume pursuant to the Agreement. Owner shall provide Broker with customary documentation demonstrating Owner’s payment of such amounts.

B-1

Exhibit C

KMXN Station Programming Policy

1.    Broadcast Content and Technical Requirements.    All programs delivered to Aries Communications, Inc. (“Owner”) for airplay shall be professional broadcast quality.

2.    Regulations and Guidelines.    All programming shall conform to all requirements under the Communications Act of 1934, as amended, all rules regulations and written policies of the FCC (the “FCC Rules”) and this KMXN Station Programming Policy. Broker agrees to cooperate with Owner in the broadcasting of programs meeting general industry standards and for this purpose to observe the following regulations in the preparation, writing and broadcasting of its programs.

        2.1    Respectful of Faiths.    The subject of religion and references to particular faiths, tenants, and customs shall be treated with respect at all times.

        2.2    No Denominational Attacks.    Programs shall not be used as a medium for attack on any faith, denomination, or sect, or upon any individual or organization.

        2.3    Donation Solicitation.    Requests for donations in the form of a specific amount, for example, $1.00 to $5.00, shall not be made if there is any suggestion that such donation will result in miracles, cures or prosperity. However, statements generally requesting donations to support the broadcast, church or other entity are permitted.

        2.4    No Ministerial Solicitations.    No invitations by the minister or other individual appearing on the program to have listeners come and visit him or her for consultation or the like shall be made if such invitation implies that the listeners will receive consideration, monetary gain, or cures for illness.

        2.5    No Vending of Miracles.    Any exhortation to listeners to bring money to a church affair or service is prohibited if the exhortation, affair, or service contains any suggestion that miracles, cures, or prosperity will result.

        2.6    No Miracle Solicitation.    Any invitations to listeners to meet at places other than the church and/or to attend other than regular services of the church is prohibited if the invitation, meeting, or service contains any claim that miracles, cures, or prosperity will result.

        2.7    No Claims of Undocumented Miracles.    Any claims of miracles or cures not documented in biblical scripture and quoted in context are prohibited; e.g., this prohibits the minister and/or other individual appearing on the program from personally claiming any cures or miracles and also prohibits the presentation of any testimonials regarding such claims either in person or in writing.

        2.8    No Lotteries.    Announcements giving any information about lotteries or games prohibited by federal or state law or regulation are prohibited.

        2.9    No “Dream Books”.     References to “dream books,” the “straight line,” or other direct or indirect descriptions or solicitations relative to the “numbers game,” or the “policy game,” or any other form of gambling are prohibited.

C-1

        2.10    No Numbers Games.    References to chapter and verse numbers, paragraph numbers, or song numbers, which involve three digits should be avoided and, when used, must relate to the overall theme of the program.

        2.11    Required Announcements.    Broker shall broadcast (i) an announcement at the beginning and end of each program, and hourly, as appropriate, to indicate that program time has been purchased by Broker, and (ii) any other announcement that may be required by law, regulation or Station policy.

        2.12    No Illegal Announcements.    No announcements or promotion prohibited by federal or state law or regulation of any lottery or game shall be made over the Station. All games, contests, or promotions shall comply with the FCC Rules and applicable laws.

        2.13    Programming Prohibitions.    Broker shall not broadcast any of the following programs or announcements:

A.    False Claims.    False or unwarranted claims for any product or service.

B.    Unfair Imitation.    Infringements of another advertiser’s rights through plagiarism or unfair imitation of either program idea or copy, or any other unfair competition.

C.    Commercial Disparagement.    Any disparagement of competitors or competitive goods.

D.    Profanity.    Any programs or announcements that are slanderous, defamatory, obscene, profane, indecent, vulgar, repulsive or offensive, either in theme or treatment. Depictions of violence should be minimized, and may not promote or espouse the use of such violence.

E.    Price Disclosure.    Any price mentions except as permitted by applicable law.

F.    Descriptions of Bodily Functions.    Any continuity which describes in a repellent manner internal bodily functions or symptomatic results of internal disturbances, and no reference to matters which are not considered acceptable topics in social groups.

G.    Fraudulent or Misleading Advertisement.    Any advertising matter, announcement or claim which Broker knows to be fraudulent, misleading or untrue.

H.    Advertisements.    All advertising and other paid or bartered announcements included in the program must meet sponsorship identification requirements. No advertisements for cigarettes or tobacco products may be presented.

Owner may waive any of the foregoing regulations in specific instances if, in its reasonable opinion, good broadcasting in the public interest will be served thereby.

C-2

Exhibit D

Form of Payola Affidavit

City of                                                      )

County of                                                  )         SS:

State of                 )

I,                                              , having first been duly sworn, hereby state that I have read and will comply with the provisions of Section 317 and 507 of the Communications Act of 1934, as amended, copies of which are attached hereto. I also have read and will comply with the provisions of the Commission’s Sponsorship Identification Rule (73.1212), a copy of which is attached hereto.

I also will comply with the policy of this Station, KMXN, which prohibits every employee having any voice in the selection of broadcast matter from accepting any loans or other consideration from persons seeking the airing of any broadcast matter in return thereof.

I understand that receiving or agreeing to receive anything of value from a third party for the broadcast of any program material over the Station is a crime, unless the agreed payment is disclosed to the Station before broadcast of the program material. This crime, commonly called “payola”, is punishable by one year in prison and a fine of up to $10,000.

During the past year, I have not been promised or paid anything of value directly or indirectly by a third party for the broadcast of any programming material over the Station.

Affiant

The foregoing instrument was acknowledged before me this      day of                             , 2001 by                                                  , who is personally known to me or who has produced                                               as identification.

Notary Public

My Commission expires:                                                      

D-1

Exhibit E

Program Delivery Location

[To Come]

E-1

EX-12.1

EXHIBIT 12.1

Computation of Ratios of Earnings to Fixed Charges

	Nine Months Ended					Years Ended December 31
	Sept 30, 2002			Sept 30, 2001		2001		2000		1999		1998		1997
Fixed Charges:
Interest charges	$	23,248		$	16,263	$	21,446	$	6,838	$	6,632	$	8,068	$	11,020
Interest portion of rent expense		64			41		56		15		30		22		32
Total fixed charges	$	23,312		$	16,304	$	21,502	$	6,853	$	6,662	$	8,090	$	11,052
Earnings:
Earnings	$	(2,310	)	$	3,134	$	1,870	$	15,528	$	7,782	$	4,306	$	(5,513	)
Interest charges		23,248			16,263		21,446		6,838		6,632		8,068		11,020
Interest portion of rent expense		64			41		56		15		30		22		32
Total earnings	$	21,002		$	19,438	$	23,372	$	22,381	$	14,444	$	12,396	$	5,539
Ratio of earnings to fixed charges		—			1.2x		1.1x		3.3x		2.2x		1.5x		—

EX-23.2

EXHIBIT 23.2

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the captions “Selected Historical Consolidated Financial And Other Data” and “Experts” and to the use of our report dated April 23, 2002, in Amendment No. 1 to the Registration Statement (Form S-4 No. 333-100330) and related Prospectus of LBI Media, Inc. dated January 22, 2003.

/s/    ERNST & YOUNG LLP

Los Angeles, California

January 22, 2003

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             , 2003

THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON             , 2003, 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. 180 East Fifth Street St. Paul, Minnesota 55101 Attention: Specialized Finance	U.S. Bank, N.A. 180 East Fifth Street St. Paul, Minnesota 55101 Attention: Specialized 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             , 2003 (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) (Please fill in if blank)	Certificate Number(s)*	Aggregate Principal Amount Represented	Principal Amount 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 WHO ACQUIRED OLD NOTES FOR YOUR OWN ACCOUNT AS A RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES 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             , 2003 (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 and the prospectus for the exchange offer may not be used in connection with any such resale.

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 8. 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 acquired directly from the Issuer and not as a result of market-making or other trading activities, such Old Notes cannot be exchanged pursuant to the Exchange Offer and the broker-dealer may not use the prospectus for the exchange offer in connection with resales of the notes. Furthermore, such broker-dealer may not rely on certain SEC no-action letters and, absent an exemption, must comply with the registration and prospectus delivery requirements of the Securities Act in connection with the resale of the notes.

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 signature(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:                                                                                                                                                                                                    , 2003

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.

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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.

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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

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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.

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PAYOR’S NAME: U.S. BANK, N.A. (THE “PAYOR”)

SUBSTITUTE Form W-9	PART I—PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT AND CERTIFY BY SIGNING AND DATING BELOW	TIN:                                                            Social Security Number or
Department of the Treasury Internal Revenue Service	PART 2—FOR PAYEES EXEMPT FROM BACKUP WITHHOLDING (See Instructions)	Employer Identification Number
Payer’s Request for Taxpayer Identification Number (“TIN”) and Certification	PART 3—CERTIFICATION—Under penalties of perjury, I certify that: (1)    The number shown on this form is my correct TIN (or I am waiting for a 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.

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