10-K

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

ý	Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the fiscal year ended December 31, 2001, or
o	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the transition period from                              to

Commission File Number
0-24516

HISPANIC BROADCASTING CORPORATION
(Exact name of registrant as specified in its charter)

Delaware
(State of Incorporation) 99-0113417
(I.R.S. Employer Identification No.)

        3102 Oak Lawn Avenue, Suite 215
Dallas, Texas 75219
Telephone (214) 525-7700
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)

        Securities registered pursuant to Section 12(b) of the Act: Class A Common Stock

        Securities registered pursuant to Section 12(g) of the Act: None

        Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    YES X    No     

        Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

        On March 15, 2002, the aggregate market price of the Class A Common Stock held by non-affiliates of the Company was approximately $1,946.5 million. (For purposes hereof, directors, executive officers and 10% or greater shareholders have been deemed affiliates).

        On March 15, 2002, there were 80,327,718 outstanding shares of Class A Common Stock, $.001 par value per share.

DOCUMENTS INCORPORATED BY REFERENCE

        Portions of the Proxy Statement for the 2002 Annual Meeting, expected to be filed within 120 days from the Company's fiscal year-end, are incorporated by reference into Part III.

HISPANIC BROADCASTING CORPORATION

INDEX TO FORM 10-K

		Page Number
PART I.
Item 1.	Business	3
Item 2.	Properties	18
Item 3.	Legal Proceedings	18
Item 4.	Submission of Matters to a Vote of Security Holders	18
PART II.
Item 5.	Market for Registrant's Class A Common Stock and Related Stockholder Matters	19
Item 6.	Selected Financial Data	19
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	21
Item 7a.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 8.	Financial Statements and Supplementary Data	29
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	49
PART III.
Item 10.	Directors and Executive Officers of the Registrant	50
Item 11.	Executive Compensation	50
Item 12.	Security Ownership of Certain Beneficial Owners and Management	50
Item 13.	Certain Relationships and Related Transactions	50
PART IV.
Item 14.	Exhibits, Financial Statement Schedules, and Reports on Form 8-K	51

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PART I.

ITEM 1. BUSINESS

General

        Hispanic Broadcasting Corporation (the "Company") is the largest Spanish-language radio broadcasting company, as measured in gross revenues, and the 9^th largest radio broadcaster in the United States^(a). The Company currently owns and programs 52 radio stations in 13 markets. Our stations are located in 12 of the 15 largest Hispanic markets in the United States, including Los Angeles, New York, Miami, San Francisco/San Jose, Chicago, Houston, San Antonio, Dallas/Fort Worth, McAllen/Brownsville/Harlingen, San Diego, Phoenix and El Paso. In addition, we also operate HBC Radio Network, which is one of the largest Spanish-language radio broadcast networks in the United States in terms of audience delivery, and HBCi which operates the Company's radio station Internet websites and a network of Hispanic community-focused bilingual websites at www.netmio.com.

        Our strategy is to own and program top performing Spanish-language and other Hispanic-targeted radio stations, principally in the 15 largest Hispanic markets in the United States. The Company programs 41 radio formats on 52 radio stations. As of the Fall 2001 Arbitron Ratings Book, we operated the leading Spanish-language radio station in the adult 25-54 age group, as measured by audience share, in 10 of the 13 markets and, during this same period, we operated 12 top-ten ranked radio stations, regardless of language or format.

        We intend to acquire or develop additional Spanish-language radio stations in the leading Hispanic markets. The Company historically has acquired under-performing radio stations with good signal coverage of the target market and converted the existing station format to a Hispanic-targeted format. In addition, the Company also seeks to acquire radio stations whose radio signals might eventually be upgraded or improved. The Company's acquisition strategy typically results in operating losses for 12 to 18 months from the date of launch of a station's format. We believe that the largest Hispanic markets are generally underserved by the existing Hispanic-targeted radio stations. As a result, we expect our acquisitions will achieve an acceptable level of profitability as we build audiences and as more and more advertisers target Hispanics.

        We frequently evaluate strategic opportunities, both within and outside our existing line of business, that closely relate to serving the Hispanic market, including opportunities outside of the United States. We expect to pursue additional acquisitions from time to time and may decide to dispose of certain businesses. Such acquisitions or dispositions could be material.

^(a)

Ranking of the Company as a radio broadcaster among all U.S. radio broadcasters is provided by BIA Research, Inc.

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        The following table sets forth certain information regarding the radio stations that we owned and programmed as of December 31, 2001:

		No. of Stations
Ranking of Market by Hispanic Population(a)
	Market	AM	FM
1	Los Angeles	1	4
2	New York	1	1
3	Miami	2	2
4	Chicago	2	1
5	Houston	2	6
6	San Francisco/San Jose	0	2
8	Dallas/Fort Worth	2	5
9	San Antonio	2	4
10	McAllen/Brownsville/Harlingen	1	2
11	Phoenix	0	5
12	San Diego	0	2
13	El Paso	2	1
18	Las Vegas	1	1
	Total	16	36

^(a)

Ranking of the principal radio market served by the Company's station(s) among all U.S. radio markets by Hispanic population as reported by SRDS Hispanic Media & Market Source.

        The Company believes Hispanic-targeted radio broadcasting has significant growth potential for the following reasons:

•

The U.S. Hispanic population is growing rapidly. The U.S. Hispanic population grew from an estimated 22.6 million (approximately 9.0% of the total United States population) at the end of 1990 to an estimated 35.3 million (approximately 12.5% of the total United States population) by the end of year 2001. The growth rate is approximately four times the growth rate for the total United States population during the same period.



•

The U.S. Hispanic population is concentrated in 15 markets. Approximately 60.5%, or approximately 21.3 million, of all U.S. Hispanics live in these markets. The U.S. Hispanic population in the top fifteen markets, as a percentage of the total population in such markets, has increased from approximately 20.7% in 1990 to approximately 26.8% in 2001. The percentage concentration of Hispanics in the top fifteen markets is more than twice the percentage of Hispanics in the U.S. as a whole. Since 1990, the Hispanic population growth has represented approximately 61.8% of the total population growth in the top fifteen Hispanic markets.



•

U.S. Hispanics represent an attractive consumer market. Advertisers target Hispanics because, on average, they are younger, their households are larger in size and they routinely spend a greater percentage of their income on many different kinds of goods and services than do non-Hispanic households. The U.S. Hispanic buying power represents approximately 7.0% of the total U.S. buying power. The Company believes that, as a result, advertisers have substantially increased their use of Spanish media. Total Spanish-language advertising revenues have increased from approximately $1.2 billion in 1996 to an estimated $2.2 billion in 2001. This represents a compound annual growth rate of approximately 13.1%, which is substantially greater than the estimated growth rate for total advertising for the comparable period.

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        The Company was incorporated under the laws of the State of Delaware in 1992. The Company's principal executive offices are located at 3102 Oak Lawn Avenue, Suite 215, Dallas, Texas 75219 and the telephone number is (214) 525-7700.

Hispanic-Targeted Radio

        Due to differences in origin, Hispanics are not a homogeneous group. The music, culture, customs and Spanish dialects vary from one radio market to another. Consequently, the Company programs its stations in a manner responsive to the local preferences of the target demographic audience in each of the markets it serves. A well-researched mix of Spanish-language music and on-air programming at an individual station can attract a wide audience targeted by advertisers. Programming is continuously monitored to maintain its quality and relevance to the target audience. Most music formats are primarily variations of Regional Mexican, Tropical, Tejano and Contemporary music styles. The local program director selects music from the various music styles that best reflect the music preferences of the local Hispanic audiences. A brief description of the Company's programming follows:

        Regional Mexican.    Regional Mexican consists of various types of music played in different regions of Mexico. Ranchera music, originating in Jalisco, Mexico, is a traditional folkloric music commonly referred to as Mariachi music. Mariachi music features acoustical instruments and is considered the music indigenous to Mexicans who have lived in the country towns. Nortena means northern, and is representative of Northern Mexico. Featuring an accordion, Nortena has a Polka sound with a distinct Mexican flavor. Banda is a regional music from the state of Sinaloa, Mexico and is popular in California. Banda is reminiscent of marching band music with mostly brass orchestrations. Mexican Cumbia represents a regional Mexican version of the tropical cumbia style. Grupo music is a synthesizer based modern version of traditional regional music and it covers all the principal styles of the regional genre.

        Tropical.    The Tropical format primarily consists of Salsa, Merengue, and Cumbia music. Salsa is dance music combining Latin Caribbean rhythms with jazz. Salsa symbolizes music from Puerto Rico, Cuba, and the Dominican Republic and is popular with Hispanics living in New York, Miami and Chicago. Merengue music is up-tempo dance music originating in the Dominican Republic. There are also regional derivatives of tropical in Mexico, Central and South America, all based substantially on the Colombian cumbia style.

        Tejano.    Tejano music originated in Texas and is based on Mexican themes but is indigenous to Texas. It is a combination of contemporary rock, Ranchera, and country music. The lyrics are primarily sung in Spanish. The on-air talent speak in Spanish and English.

        Contemporary.    The Contemporary format includes pop, Latin rock, and ballads. This format is similar to English adult contemporary and contemporary hit radio stations. A contemporary station may focus on softer music or may be quite up tempo depending on the age target.

        Full Service.    The Full Service format includes all the traditional radio services: music, news, sports, traffic reports, special information programs and weather.

        News/Talk.    News includes local, national, international reports and weather, business, traffic and sports. Talk includes commentary, analysis, discussion, interviews, call-ins and information shows.

        Mexican Spanish Oldies.    The Spanish Oldies format includes songs of all styles that were hits in Mexico in the 1960s and 1970s.

        Rhythmic.    The Rhythmic format includes Latin-oriented hip-hop, top 40 and contemporary music. The on-air talent speak primarily in English.

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Company's Stations

        The following table sets forth information regarding the radio stations owned and programmed by the Company as of December 31, 2001:

Ranking of Market by Hispanic Population	Market(a)	Station	Station Format(b)	Primary Demographic Market
1	Los Angeles	KLVE(FM) KSCA(FM) KTNQ(AM) KRCD(FM) KRCV(FM)	Contemporary Regional Mexican Spanish Oldies Spanish Oldies Spanish Oldies	A 25-54 A 25-54 A 35+ A 35+ A 35+
2	New York	WCAA(FM) WADO(AM)	Contemporary News/Talk	A 18-34 A 35+
3	Miami	WAMR(FM) WRTO(FM) WAQI(AM) WQBA(AM)	Contemporary Tropical News/Talk News/Talk	A 25-54 A 18-34 A 35+ A 35+
4	Chicago	WOJO(FM) WIND(AM) WLXX(AM)	Regional Mexican News/Talk Tropical	A 18-54 A 25-54 A 18-54
5	Houston	KLTN(FM) KOVE(FM) KPTY(FM) KLTO(FM) KRTX(FM) KLAT(AM) KRTX(AM) KQBU(FM)	Regional Mexican Contemporary Rhythmic Rhythmic Contemporary News/Talk News/Talk Regional Mexican	A 18-49 A 18-49 A 25-54 A 25-54 A 18-34 A 25-54 A 25-54 A 18-49
6	San Francisco/San Jose	KSOL(FM) KZOL(FM)	Regional Mexican Regional Mexican	A 25-54 A 25-54
8	Dallas/Fort Worth	KLNO(FM) KHCK(FM) KDXT(FM) KDXX(FM) KDOS(FM) KESS(AM) KDXX(AM)	Regional Mexican Tejano Contemporary Contemporary Contemporary Spanish Oldies/Sports Contemporary	A 18-49 A 18-49 A 18-49 A 18-49 A 18-49 A 25-54 A 18-49
9	San Antonio	KXTN(FM) KROM(FM) KXTN(AM) KCOR(AM) KBBT(FM) KCOR(FM)	Tejano Regional Mexican Tejano Spanish Oldies Rhythmic Contemporary	A 25-54 A 25-54 A 25-54 A 35+ A 18-34 A 18-49

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10	McAllen/Brownsville/Harlingen	KGBT(FM) KIWW(FM) KGBT(AM)	Regional Mexican Tejano News/Talk	A 25-54 A 25-54 A 25-54
11	Phoenix	KHOT(FM) KHOV(FM) KOMR(FM) KMRR(FM) KKMR(FM)	Regional Mexican Regional Mexican Contemporary Contemporary Contemporary	A 25-54 A 25-54 A 18-34 A 18-34 A 18-34
12	San Diego	KLQV(FM) KLNV(FM)	Contemporary Regional Mexican	A 25-54 A 18-49
13	El Paso	KBNA(FM) KBNA(AM) KAMA(AM)	Contemporary Contemporary Spanish Oldies	A 25-54 A 25-54 A 35+
18	Las Vegas	KISF(FM) KLSQ(AM)	Regional Mexican Spanish Oldies	A 18-49 A 25-54

^(a)

Actual city of license may differ from the metropolitan market served.

^(b)

See "Hispanic-Targeted Radio."

        The following table sets forth selected information with regard to Company owned radio stations:

Station/Market	Date Acquired	License Broadcast Date	Broadcast Frequency
KLVE(FM), Los Angeles, CA	10/85	12/01/05	107.5 MHz
KSCA(FM), Los Angeles, CA	09/99	12/01/05	101.9 MHz
KTNQ(AM), Los Angeles, CA	10/85	12/01/05	1020 kHz
KRCD(FM), Los Angeles, CA	01/00	12/01/05	103.9 MHz
KRCV(FM), Los Angeles, CA	01/00	12/10/05	98.3 MHz
WCAA(FM), New York, NY	05/98	06/01/06	105.9 MHz
WADO(AM), New York, NY	08/94	06/01/06	1280 kHz
WAMR(FM), Miami, FL	08/94	02/01/03	107.5 MHz
WRTO(FM), Miami, FL	10/89	02/01/03	98.3 MHz
WAQI(AM), Miami, FL	10/89	02/01/03	710 kHz
WQBA(AM), Miami, FL	08/94	02/01/03	1140 kHz
WOJO(FM), Chicago, IL	02/97	12/01/04	105.1 MHz
WIND(AM), Chicago, IL	02/97	12/01/04	560 kHz
WLXX(AM), Chicago, IL	07/95	12/01/04	1200 kHz
KOVE(FM), Houston, TX	07/01	08/01/05	106.5 MHz
KLTN(FM), Houston, TX	05/98	08/01/05	102.9 MHz
KQBU(FM), Houston, TX	02/97	08/01/05	93.3 MHz
KPTY(FM), Houston, TX	02/97	08/01/05	104.9 MHz
KLTO(FM), Houston, TX	02/97	08/01/05	105.3 MHz
KRTX(FM), Houston, TX	02/97	08/01/05	100.7 MHz
KLAT(AM), Houston, TX	02/97	08/01/05	1010 kHz
KRTX(AM), Houston, TX	02/97	08/01/05	980 kHz

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KSOL(FM), San Francisco/San Jose, CA	02/97	12/01/05		98.9 MHz
KZOL(FM), San Francisco/San Jose, CA	02/97	12/01/05		99.1 MHz
KLNO(FM), Dallas/Ft. Worth, TX	09/99	08/01/05		94.1 MHz
KHCK(FM), Dallas/Ft. Worth, TX	07/95	08/01/05		99.1 MHz
KDXT(FM), Dallas/Ft. Worth, TX	06/95	08/01/05		106.7 MHz
KDOS(FM), Dallas/Ft. Worth, TX	04/95	08/01/05	(1)	107.9 MHz
KDXX (FM), Dallas/Ft. Worth, TX	08/94		(2)	107.9 MHz
KESS(AM), Dallas/Ft. Worth, TX	08/94	08/01/05		1270 kHz
KDXX(AM), Dallas/Ft. Worth, TX	12/94	08/01/05		1480 kHz
KXTN(FM), San Antonio, TX	02/97	08/01/05		107.5 MHz
KROM(FM), San Antonio, TX	02/97	08/01/05		92.9 MHz
KXTN(AM), San Antonio, TX	02/97	08/01/05		1310 kHz
KCOR(AM), San Antonio, TX	02/97	08/01/05		1350 kHz
KBBT(FM), San Antonio, TX	09/00	08/01/05		98.5 MHz
KCOR(FM), San Antonio, TX	09/00	08/01/05		95.1 MHz
KGBT(FM), McAllen/Brownsville/Harlingen, TX	02/97	08/01/05		98.5 MHz
KIWW(FM), McAllen/Brownsville/Harlingen, TX	02/97	08/01/05		96.1 MHz
KGBT(AM), McAllen/Brownsville/Harlingen, TX	02/97	08/01/05		1530 kHz
KHOT(FM), Phoenix, AZ	04/99	12/01/05		105.9 MHz
KOMR(FM), Phoenix, AZ	10/01	12/01/05		106.3 MHz
KMRR(FM), Phoenix, AZ	10/01	12/01/05		100.3 MHz
KKMR(FM), Phoenix, AZ	10/01	12/01/05		106.5 MHz
KHOV(FM), Phoenix, AZ	10/01	12/01/05		105.3 MHz
KLQV(FM), San Diego, CA	08/98	12/01/05		102.9 MHz
KLNV(FM), San Diego, CA	08/98	12/01/05		106.5 MHz
KBNA(FM), El Paso, TX	02/97	08/01/05		97.5 MHz
KBNA(AM), El Paso, TX	02/97	08/01/05		920 kHz
KAMA(AM), El Paso, TX	02/97	08/01/05		750 kHz
KISF(FM), Las Vegas, NV	04/99	10/01/05		103.5 MHz
KLSQ(AM), Las Vegas, NV	08/95	10/01/97	(3)	870 kHz

(1)

The Company has modified the facilities of the station pursuant to a construction permit issued by the Federal Communications Commission ("FCC") (including a change in community of license from Corsicana to Robinson, Texas), and the station is currently operating with the new facilities.

(2)

The Company has modified the facilities of the station pursuant to a construction permit issued by the FCC (including a change in community of license from Gainesville to Lewisville, Texas), and the station is currently operating with the new facilities.

(3)

A renewal application was timely filed with the FCC and the station has authority to continue operation. Statistical information contained herein regarding the radio industry, population, consumer spending and advertising expenditures are taken from the 2000 U.S. Census, SRDS Hispanic Media and Market Sources, and Hispanic Business Magazine (December 1996 and 2001). The Company's station rankings were based upon the Arbitron Adults 18-34 and 25-54 category 2001 Fall Book.

Competition

        Radio broadcasting is a highly competitive business. The Company's radio stations compete for audiences and advertising revenues with other radio stations of all formats, as well as with other media, such as newspapers, magazines, television, cable television, outdoor advertising and direct mail, within

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their respective markets. In addition, the radio broadcasting industry is subject to competition from new media technologies that are being developed or introduced such as (1) satellite-delivered digital audio radio service, which has resulted and is expected to result, in the near term introduction of new subscriber based satellite radio services with numerous niche formats; and (2) audio programming by cable systems, direct broadcast satellite systems, Internet content providers, personal communications services and other digital audio broadcast formats.

        The FCC adopted a plan in 1999 for the establishment of non-commercial "microbroadcasting" stations, low-powered FM stations that will be designed to serve small localized areas and that in some localized areas may cause interference with regular broadcast by existing radio stations. Satellite delivered audio may provide a medium for the delivery by satellite or supplemental terrestrial means of multiple new audio programming formats to local and/or national audiences. XM Satellite Radio launched its commercial service on September 25, 2001 and Sirius Satellite Radio is scheduled to launch service in 2002. The Company entered into a Programming Partner Agreement with XM Satellite Radio in 1998, in which the Company agreed to develop, produce and supply to XM Satellite Radio certain Spanish-language programming to be distributed over one or more audio channels of the digital audio radio service implemented by XM Satellite Radio in the continental United States.

        Audience ratings and market shares are subject to change and any adverse change in a particular market would have a material adverse effect on the revenues of stations located in that market. Future operations are further subject to many variables which could have an adverse effect upon the Company's financial performance. These variables include economic conditions, both general and relative to the broadcasting industry; shifts in population and other demographics; the level of competition for advertising dollars with other radio stations and other entertainment and communications media; fluctuations in operating costs; technological changes and innovations; changes in labor conditions; and changes in governmental regulations and policies and actions of federal regulatory bodies, including the FCC, the Federal Trade Commission ("FTC"), and the Antitrust Division of the Department of Justice (the "Antitrust Division"). Although the Company believes that each of its stations does or will be able to compete effectively in its respective market, there can be no assurance that any such station will be able to maintain or increase its current audience ratings and advertising revenues. Radio stations can quickly change formats. Any radio station could shift its format to duplicate the format of any of the Company's stations. If a station converted its programming to a format similar to that of a station owned by the Company, the ratings and broadcast cash flow of the Company's station could be adversely affected.

Regulation of the Company's Business

Existing Regulation and Legislation.

        Radio broadcasting is subject to the jurisdiction of the FCC under the Communications Act of 1934, as amended (the "Communications Act"). The Communications Act prohibits the operation of a radio broadcast station except under a license issued by the FCC and empowers the FCC, among other things, to issue, renew, revoke and modify broadcast licenses; assign frequency bands; determine stations' frequencies, locations and power; regulate the equipment used by stations; adopt other regulations to carry out the provisions of the Communications Act; impose penalties for violation of such regulations; and impose fees for processing applications and other administrative functions. The Communications Act prohibits the assignment of a license or the transfer of control of a licensee without prior approval of the FCC.

        The Telecommunications Act of 1996 (the "1996 Act") significantly changed both the broadcast ownership rules and the process for renewal of broadcast station licenses. The 1996 Act relaxed local radio ownership restrictions. The 1996 Act also established a "two-step" renewal process that limits the FCC's discretion to consider applications filed in competition with an incumbent's renewal application.

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This new regulatory flexibility has engendered aggressive local, regional, and national acquisition campaigns. Relaxation of previous station ownership limitations on leading incumbents (i.e., existing networks and major station groups) has increased sharply the competition for radio station acquisitions, and the prices of attractive stations.

Multiple Ownership Restrictions.

        The FCC has promulgated rules that, among other things, limit the ability of individuals and entities to own or have an official position or ownership interest above a certain level (an "attributable" interest, as defined more fully below) in broadcast stations, as well as other specified mass media entities.

        The 1996 Act and the FCC's subsequently issued rule changes eliminated the national ownership restriction, allowing a single entity to own nationally any number of AM or FM broadcast stations. The 1996 Act and the FCC's rules also greatly eased local radio multiple ownership restrictions. The maximum number of radio stations in which a person or entity is allowed to hold an "attributable interest" depends on the number of radio stations within the defined market. In markets with more than 45 commercial radio stations, an entity may own, operate or control a maximum of eight stations, with no more than five in either service (AM or FM). In markets of 30 - 44 stations, an entity may own as many as seven stations, with no more than four in either service; in markets with 15 - 29 stations, an entity may own as many as six stations, with no more than four in either service. In markets with 14 stations or less, an entity may own as many as five stations or 50% of all of the stations, whichever is less, with no more than three stations in either service. It should be noted, however, that the Department of Justice has precluded certain entities from acquiring the maximum number of radio stations allowed in a market under the 1996 Act because of anti-trust concerns. Thus, it is possible that the Company would, in certain instances, be unable to acquire the maximum number of stations allowed in a market under the 1996 Act. The FCC has placed limitations on time brokerage (local marketing) agreements ("LMA") through which the licensee of one radio station provides the programming for another licensee's station in the same market. In LMA situations, stations operating in the same service (e.g., both stations are AM) with substantial contour overlap are prohibited from duplicating more than 25% of their programming. Moreover, in determining the number of stations that a single entity may control, an entity programming a station pursuant to a LMA is required, under certain circumstances, to count that station toward its numerical maximum even though it does not own the station.

        The FCC's regulations limit the number of radio stations an entity may own or control in markets where the entity also owns or controls one or more television stations. The FCC currently permits an entity to own or control more than one radio station in a market in which the entity also owns or controls one or more television stations, depending on the number of independent voices existing in the market. The FCC's regulations also prohibit an entity from owning both a radio station and a daily newspaper of general circulation in the same market, but has initiated a proceeding and sought public comment on whether it should relax or eliminate its radio/newspaper cross-ownership restriction.

        Expansion of the Company's broadcast operations in particular areas and nationwide will continue to be subject to the FCC's ownership rules and any further changes the FCC or Congress may adopt. Significantly, the 1996 Act requires the FCC to review its remaining ownership rules biennially—as part of its regulatory reform obligations—to determine whether its various rules are still necessary. In November 2001, the FCC issued a Notice of Proposed Rule Making which solicits public comment on the current local radio multiple ownership rules. Under interim processing guidelines announced by the FCC in its November 2001 Local Radio Multiple Ownership Notice of Proposed Rulemaking, the FCC recently approved a number of long-pending transactions but decided in one case (involving an application by Clear Channel Radio Licenses, Inc. to acquire Station WUMX(FM) in Charlottesville, Virginia) that, because of competitive concerns, it had insufficient facts to support a grant of that

10

application and ordered an evidentiary hearing before an FCC Administrative Law Judge to consider the matter. This is the first such hearing ordered by the FCC in an assignment of license case on competition issues since 1969. The Company cannot predict the impact of future announcements in the biennial review process or any other agency or legislative initiatives upon the FCC's broadcast rules.

        Under the FCC's ownership rules, a direct or indirect purchaser of certain types of securities of the Company could violate FCC regulations if that purchaser owned or acquired an "attributable" interest in other media properties in the same areas as stations owned by the Company or in a manner otherwise prohibited by the FCC. All officers and directors of a licensee, as well as general partners, limited partners who are not properly "insulated" from management activities, and stockholders who own five percent or more of the outstanding voting stock of a licensee (either directly or indirectly), are generally deemed to have an "attributable interest" in the licensee. Certain institutional investors who exert no control or influence over a licensee may own up to twenty percent of such outstanding voting stock without the interest being considered "attributable". In addition to the foregoing limitations, under the FCC's "equity/debt plus" standard, if an investor's interest in a licensee corporation exceeds thirty-three percent of the aggregated debt and equity of the company (i.e., the "total asset value" of the company), the investor's interest is considered attributable if the investor is also either a major program supplier to the licensee or a same-market media entity. Insulated limited partnership interests (as to which the licensee certifies that the limited partners are not "materially involved" in the management and operation of the subject media property), and voting stock held by minority stockholders where there is a single majority stockholder, are generally not considered attributable interests.

License Grant and Renewal.

        Under the 1996 Act, the FCC has implemented an eight year license term provision for radio stations. The 1996 Act also requires renewal of a broadcast license if the FCC finds that (1) the station has served the public interest, convenience, and necessity; (2) there have been no serious violations of either the Communications Act or the FCC's rules and regulations by the licensee; and (3) there have been no other serious violations which, taken together, constitute a pattern of abuse. In making its determination, the FCC may still consider petitions to deny a renewal application but cannot consider whether the public interest would be better served by a person/entity other than the renewal applicant. Instead, competing applications for the same frequency may be accepted only after the FCC has denied an incumbent's application for renewal of license.

        Although in the vast majority of cases the FCC grants broadcast license renewal applications when petitions to deny are filed against them, there can be no assurance that any of the Company's stations' licenses will be renewed.

Alien Ownership Restrictions.

        The Communications Act restricts the ability of foreign entities or individuals to own or hold certain interests in broadcast licenses. Foreign governments, representatives of foreign governments, non-U.S. citizens, representatives of non-U.S. citizens, and corporations or partnerships organized under the laws of a foreign nation are barred from holding broadcast licenses. Non-U.S. citizens, collectively, may directly or indirectly own or vote up to twenty percent of the capital stock of a licensee. In addition, a broadcast license may not be granted to or held by any corporation that is controlled, directly or indirectly, by any other corporation more than one-fourth of whose capital stock is owned or voted by non-U.S. citizens or their representatives, by foreign governments or their representatives, or by non-U.S. corporations, if the FCC finds that the public interest will be served by the refusal to grant or revocation of such license. The FCC has interpreted this provision of the Communications Act to require an affirmative public interest finding before a broadcast license may be granted to or held by any such corporation, and the FCC has made such an affirmative finding only in

11

limited circumstances. The Company, which serves as a holding company for subsidiaries that serve as licensees for the stations, therefore may be restricted from having more than one-fourth of its stock owned or voted directly or indirectly by non-U.S. citizens, foreign governments, representatives of non-U.S. citizens or foreign governments, or foreign corporations. Our articles of incorporation prohibit the ownership, voting and transfer of our capital stock in violation of the FCC restrictions, and prohibit the issuance of capital stock or the voting rights such capital stock represents to or for the account of aliens or corporations otherwise subject to domination or control by aliens in excess of the FCC limits. The articles of incorporation authorize our board of directors to enforce these prohibitions.

Other Regulations Affecting Radio Broadcasting Stations.

        Although the FCC has significantly reduced its regulation of broadcast stations FCC rules and policies, and rules and policies of other federal agencies, currently regulate matters such as political advertising practices, equal employment opportunities, application procedures and other areas affecting the business and operations of broadcast stations.

Antitrust Matters.

        An important element of the Company's growth strategy involves the acquisition of additional radio stations, many of which are likely to require preacquisition antitrust review by the FTC or the Antitrust Division. Following passage of the 1996 Act, the Antitrust Division has become more aggressive in reviewing proposed acquisitions of radio stations and radio station networks, particularly in instances where the proposed acquirer seeks to acquire another radio station in a market in which it already owns stations. The Antitrust Division has, in some cases, obtained consent decrees requiring radio station divestitures in specific markets based on allegations that proposed acquisitions would lead to unacceptable concentration levels. There can be no assurance that the Antitrust Division or the FTC will not seek to bar the Company from acquiring additional radio stations in a market where the Company already owns stations.

        The FCC has been increasingly aggressive in independently examining issues of market concentration when considering radio station acquisitions. The FCC has delayed its approval of several radio station purchases by various parties because of market concentration concerns. Moreover, the FCC has followed an informal 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.

Environmental Matters.

        As the owner, lessee or operator of various real properties and facilities, the Company is subject to various federal, state and local environmental laws and regulations. Historically, compliance with such laws and regulations has not had a material adverse effect on the Company's business. There can be no assurance, however, that compliance with existing or new environmental laws or regulations will not require the Company to make significant expenditures in the future.

Recent Developments, Proposed Legislation and Regulation.

        The FCC has approved the introduction of new technologies to the radio broadcasting industry, including terrestrial delivery of digital audio broadcasting on both the AM and FM bands. In 1997, the FCC granted two licenses for national, satellite-delivered digital audio broadcasting services. These services are capable of delivering multiple, high-quality audio channels. The Company is unable to predict the effect such new technology will have on the Company's financial condition or results of operations. In addition, cable television operators and direct satellite broadcast television companies

12

market service commonly referred to as "cable radio" which provides subscribers with several high-quality channels of music, news and other information. Technical considerations currently limit this technology to fixed locations.

        Congress and the FCC currently have under consideration, and may in the future adopt, new laws, regulations and policies regarding a wide variety of matters that could affect, directly or indirectly, the operation and ownership of the Company's broadcast properties. For example, the FCC has adopted rules which, with limited exceptions, require the holder of an FCC construction permit to complete construction of new or modified facilities within three (3) years of grant. In December 2001 the FCC issued a Second Notice of Proposed Rule Making which seeks public comments on proposed rules in the area of equal employment opportunity. In addition to the changes and proposed changes noted above, such matters include, for example, the license renewal process, spectrum use fees, political advertising rates, and potential restrictions on the advertising of certain products (liquor, beer and wine, for example). Other matters that could affect the Company's broadcast properties include technological innovations and developments generally affecting competition in the mass communications industry. The foregoing does not purport to be a complete summary of all the provisions of the Communications Act, or the 1996 Act, nor of the regulations and policies of the FCC thereunder. Proposals for revised regulations and requirements are currently pending before Congress and federal regulatory agencies, and additional regulations will undoubtedly be considered in the future from time to time. Also, various of the foregoing matters are now, or may become, the subject of court litigation, and the Company cannot predict the outcome of any such litigation or the impact on its broadcast business.

Risk Factors

Decreases in Cash Flows from Our Los Angeles Stations Could Significantly Reduce Our Overall Cash Flows.

        The portion of our overall net revenue attributable to the Los Angeles market was 27.0% for the year ended December 31, 2001. In addition, the portion of our overall broadcast cash flow attributable to the Los Angeles market was 35.2% for the year ended December 31, 2001. Increased competition for advertising dollars with other radio stations and communications media in the Los Angeles metropolitan area, both from other radio stations and from other advertising media such as television and newspapers, and other competitive and economic factors have and may continue to cause a decline in revenue generated by our Los Angeles stations. A significant decline in the revenue of the Los Angeles stations could significantly reduce our overall results of operations and broadcast cash flow.

Significant Control by the Tichenor Family May Impact or Constrain Our Future Actions.

        As of March 15, 2002, McHenry T. Tichenor, Jr., our Chairman, President and Chief Executive Officer, and his family held voting control over approximately 16.1% of the shares of our Class A common stock. Since these shares are subject to a voting agreement, the Tichenor family can exert significant influence over the election of our board of directors and other management decisions. This ownership and control by the Tichenor family could have the effect of delaying or preventing a change in control of Hispanic Broadcasting, thereby possibly having the effect of depriving our stockholders of the opportunity to receive a premium for their shares. This ownership and control could also have the effect of making us less attractive to a potential acquirer and could result in holders of our Class A common stock receiving less consideration upon a sale of their shares than might otherwise be available in the event of a takeover attempt.

Clear Channel's Ownership of All Our Class B Common Stock Means that Clear Channel May Have a Class Vote on Mergers, Consolidations, and Sales of Substantially All Our Assets.

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        As of March 15, 2002, Clear Channel Communications, Inc. owned no shares of our Class A common stock and thus was not entitled to vote in the election of our directors. However, Clear Channel does own all the outstanding shares of our Class B common stock, which accounts for approximately 26.1% of our common stock. As long as Clear Channel owns at least 20.0% of our common stock, Clear Channel will have a class vote and could potentially veto:

•

sales of all or substantially all our assets;



•

any merger or consolidation involving Hispanic Broadcasting where our stockholders immediately prior to the transaction would not own at least 50.0% of the capital stock of the surviving entity;



•

any reclassification, capitalization, dissolution, liquidation, or winding up of Hispanic Broadcasting;



•

the issuance of any shares of our preferred stock;



•

the amendment of our restated certificate of incorporation in a manner that adversely affects the rights of the holders of our Class B common stock;



•

the declaration or payment of any non-cash dividends on our common stock; or



•

any amendment to our certificate of incorporation concerning our capital stock.

        Shares of our Class B common stock are generally convertible into shares of our Class A common stock, at the holder's option, subject to any necessary governmental consents, including the consent of the FCC. Because of the FCC's multiple ownership rules, which limit the number of radio stations that a company may own or have an attributable interest in, in any single market, Clear Channel may not presently convert its shares of our Class B common stock into shares of our Class A common stock if such conversion would create an attributable interest, without first obtaining the consent of the FCC. These provisions of our Class B common stock could have the effect of delaying or preventing a change in control of Hispanic Broadcasting, thereby possibly depriving our stockholders of the opportunity to receive a premium for their shares. These provisions could also have the effect of making us less attractive to a potential acquirer and could result in holders of our Class A common stock receiving less consideration upon a sale of their shares than might otherwise be available in the event of a takeover attempt.

        In addition, Clear Channel owns a significant percentage of our common stock. Consequently, significant direct or indirect sales of our common stock by Clear Channel could significantly reduce our stock price and could impair our ability to raise money.

Hispanic Broadcasting and Clear Channel are Each Engaged in the Radio Broadcasting Business and Compete with Each Other for Advertising Revenues, Which May Give Rise to Actual or Potential Conflicts of Interest Between the Two Companies.

        The similarity of the respective businesses of Hispanic Broadcasting and Clear Channel gives rise to potential conflicts of interest between the two companies. Hispanic Broadcasting and Clear Channel are each engaged in the radio broadcasting business in certain markets, and as a result, are competing with each other for advertising revenues. As of December 31, 2001, Clear Channel owned, programmed, or sold airtime for 1,225 radio stations in the United States, as well as radio stations in a number of foreign countries. Clear Channel also owned or programmed 37 television stations and was one of the world's largest outdoor advertising companies based on its total inventory of advertising display faces. Clear Channel's television and outdoor advertising operations may also be deemed to compete with our business. In addition, conflicts could arise with respect to transactions involving the purchase or sale of radio broadcasting companies, particularly Spanish-language radio broadcasting companies, the issuance of additional equity securities, or the payment of dividends by Hispanic

14

Broadcasting Corporation. For instance, Clear Channel currently owns a 40% equity interest in Grupo ACIR Comunicaciones, one of the largest radio broadcasters in Mexico.

We May Compete Directly or Indirectly With Clear Channel in the Future With Respect to Acquisitions and Investment Opportunities in New Lines of Business and New Markets, but We May Lack the Financial Resources Necessary to Compete with Clear Channel in these New Lines and Markets.

        Clear Channel is engaged in the Spanish-language radio broadcasting business in the United States, other than through its ownership of shares in Hispanic Broadcasting. In addition, Clear Channel may from time to time acquire domestic Spanish-language radio broadcasting companies or an interest in such companies, individually or as part of a larger group. Furthermore, Clear Channel may from time to time seek to make international acquisitions of or investments in companies engaged in the Spanish-language radio broadcasting business outside the United States, and we may compete with Clear Channel for such acquisition or investment opportunities. To the extent we enter into new lines of business, we may compete directly or indirectly with Clear Channel, and we may compete with Clear Channel in the future with respect to acquisitions and investment opportunities in these areas.

        Because we are significantly smaller than Clear Channel, we may lack the financial resources necessary to compete with Clear Channel in these new lines of business and new markets. Similarly, while Clear Channel could pursue very large business expansions, acquisition opportunities could arise which require greater financial resources than those available to us.

Cancellations or Reductions of Advertising Could Adversely Affect Our Results of Operations.

        In the competitive broadcasting industry, the success of each of our radio stations is primarily dependent upon its share of the overall advertising revenue within its market. Although we believe that each of our stations can compete effectively in its broadcast area, we cannot be sure that any of our stations can maintain or increase its current audience ratings or market share, or that advertisers will not decrease the amount they spend on advertising. Shifts in population, demographics, audience tastes and other factors beyond our control could cause us to lose market share. Our stations also compete for audiences and advertising revenue directly with other radio and television stations. If a competing station converts to a format similar to that of one of our stations, or if one of our competitors strengthens its operations, our stations could suffer a reduction in ratings and advertising revenue.

        We believe that adverting is a discretionary business expense, meaning that spending on advertising may decline during an economic recession or downturn. Consequently, a recession or downturn in the U.S. economy or the economy of an individual geographic market in which we operate stations could reduce our advertising revenue and, therefore, results of operations. We do not obtain long-term commitments from our advertisers, and advertisers may cancel, reduce or postpone orders without penalty. Cancellations, reductions or delays in purchases of advertising could reduce our revenue, especially if we are unable to replace such purchases. Our expense levels are based, in part, on expected future revenue and are relatively fixed once set. Therefore, unforeseen fluctuations in adverting sales could reduce our operating results.

Our Acquisition Strategy Could Pose Risks.

        We intend to grow through the acquisition of radio stations and other assets we believe will complement our existing portfolio. Our acquisition strategy involves numerous risks, including:

•

the risk that certain acquisitions may prove unprofitable and fail to generate anticipated cash flows;



•

the risk that successful management of a portfolio of radio broadcasting properties may require us to recruit additional senior management and expand corporate infrastructure;

15

•

the risk that we may encounter difficulties in the integration of operations and systems;



•

the risk that management's attention may be diverted from other business concerns; and



•

the risk that we may lose key employees of acquired companies or stations.

        Part of our strategy is to acquire radio stations with an English-language format and convert these stations to a Spanish-language or other Hispanic-targeted format. This conversion strategy requires a heavy initial investment of both financial and management resources. Start-up stations typically incur losses for a period of time after a format change because of the time required to build up ratings and station loyalty. We cannot guarantee that this strategy will be successful in any given market, even though we may incur substantial costs and losses in implementing this part of our strategy.

International Acquisition Opportunities Pose Risks to Which We are Not Accustomed, Such as Risks of Foreign Currency Fluctuations, Foreign Taxation, and Additional or Novel Legal Restrictions.

        We continue to explore international opportunities. If we make one or more international acquisitions, we will face new risks that we do not face in the United States, such as foreign currency risks, foreign ownership restrictions, foreign taxation, restrictions on withdrawal of foreign investments and earnings, possible expropriation and other risks.

We May Not be Able to Secure Financing Necessary for Acquisition Opportunities, or We May have to Secure Financing on Unfavorable Terms.

        We face stiff competition from other companies for acquisition opportunities. If the prices sought by sellers of existing radio stations continue to rise, we may find fewer acceptable acquisition opportunities. In addition, the purchase price of possible acquisitions could require additional debt or equity financing. We can give no assurance that either we will obtain the needed financing or that we will obtain such financing on attractive terms. Additional indebtedness could increase our leverage and make us more vulnerable to economic downturns and may limit our ability to withstand competitive pressures. Additional equity financing or the issuance of our shares in connection with an acquisition would dilute the ownership interest of our stockholders. We may not have sufficient capital resources to complete acquisitions.

Caution Concerning Forward-Looking Statements.

        This report may contain forward-looking statements that are presented for illustrative purposes only, within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not statements of historical facts, but rather reflect our current expectations concerning future results and events. You can identify these forward-looking statements by our use of works such as "anticipates," "believes," "continues," "expects," "intends," "likely," "may," "opportunity," "plans," "potential," "project," "will," and similar expressions to identify forward-looking statements, whether in the negative or the affirmative. We cannot guarantee that we actually will achieve these plans, intentions or expectations. These forward-looking statements are subject to risks, uncertainties and other factors, some of which are beyond our control, which could cause actual results to differ materially from those forecast or anticipated in such forward-looking statements. These risks, uncertainties and factors include, but are not limited to:

•

the highly competitive nature of, and uncertain effect of new technologies on, the radio broadcasting industry;



•

the risks associated with our acquisition and upgrade strategies generally;



•

the risks associated with achieving positive operating results on our start-up stations



•

our vulnerability to changes in federal legislation or regulatory policy;

16

•

the impact of general economic conditions;



•

shifts in population and other demographics;



•

industry conditions, including competition;



•

technological changes and innovations;



•

changes in labor conditions;



•

capital expenditure requirements;



•

interest rates and inflation;



•

taxes;



•

access to capital markets; and



•

certain other factors set forth in our SEC filings.

        You should not place undue reliance on these forward-looking statements, which reflect our view only as of the date of this report. We undertake no obligation to update these statements or publicly release the result of any revisions to these statements to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events.

Signal Improvements

        From time to time, the Company has sought to improve the signal coverage of selected stations it owns. In addition, the Company has and will in the future seek to acquire and/or to participate in proceedings at the FCC that would allow the radio signals of the Company's existing radio stations or stations it might acquire in the future to be upgraded or improved. A proceeding to change the signal coverage of one of our radio stations can take years to complete. As a result, the Company may have to invest or spend money during the upgrade process without knowing if the process will ultimately result in the upgrade. The upgrade process is typically subjected to one or more objections and/or counterproposals by other station owners. These objections require time to resolve and might result in additional, unforeseen payments or costs in order to complete the upgrade. At December 31, 2001, the Company had invested approximately $43.2 million in various upgrade proceedings or efforts around the country. Of that amount, approximately $41.2 million represents upgrade proceedings involving five radio stations in Houston and Dallas. In February 2002, certain upgrades, representing $34.8 million of the Company's total upgrade investment, were completed and placed in service. There can be no assurances that any other pending or future upgrades will be successfully concluded. Any investments the Company makes or has made in upgrade attempts that prove to be unsuccessful would likely require write-downs or write-offs. The Company's current exposure of approximately $8.4 million in the aggregate associated with various uncompleted upgrade projects, if partially or totally written off as a result of unsuccessful outcomes of these projects, would not be material to the overall financial position of the Company.

Industry Segments

        The Company considers radio broadcasting to be its only operating segment.

Employees

        As of January 25, 2002, the Company employed 1,108 persons on a full-time basis, including corporate employees and 17 employees (at WCAA(FM) and WADO(AM), New York) who are subject to two collective bargaining agreements. The Company considers its employee relations to be good.

17

Seasonality

        Our Company's performance and that of the radio industry as a whole is affected by seasonal revenue fluctuations and variation in demand between local and national advertisers. The Company's revenues vary throughout the year. As is typical in the radio broadcasting industry, the first calendar quarter generally produces the lowest revenues. The second and third quarters generally produce the highest revenues. Revenues are also affected by audience share performance of each of the Company's radio stations as reported by The Arbitron Company. Revenue performance of a radio station tends to lag behind the audience share ratings

ITEM 2. PROPERTIES

        The Company's corporate headquarters is in Dallas, Texas. The Company has leased approximately 11,000 square feet at 3102 Oak Lawn Avenue in Dallas, Texas. The initial term of this lease expires in 2013, and the Company has one option to extend the lease for one additional five-year term.

        The types of properties required to support each of the Company's radio stations listed in Item 1 above includes offices and transmitter sites. A radio station's studios are generally housed with its offices in downtown or business districts. A radio station's transmitter sites generally are located in a manner that provides maximum market coverage subject to the station's FCC license and FCC rules and regulations.

        The offices and studios of the Company's radio stations are located in leased or owned facilities. These leases generally have expiration dates that range from three to fifteen years. The Company either owns or leases its transmitter and antenna sites. These leases generally have expiration dates that range from one to seventeen years. The Company does not anticipate any difficulties in renewing those leases that expire within the next several years or in leasing other space, if required.

        A substantial amount of the Company's broadcast cash flow was generated by the Company's Los Angeles stations during 2001. Accordingly, the offices, studios, transmitter sites and antenna sites used in the operation of the Company's Los Angeles stations may be material to the Company's overall operations.

        As noted in Item 1 above, as of December 31, 2001, the Company owns and programs 52 radio stations in 13 markets throughout the United States. Therefore, except as set forth above, no one property is material to the Company's overall operations. The Company believes that its properties are in good condition and suitable for its operations. The Company owns substantially all of the equipment used in its radio broadcasting business.

ITEM 3. LEGAL PROCEEDINGS

        In the ordinary course of business, the Company becomes involved in certain legal claims and litigation. In the opinion of management, based upon consultations with legal counsel, the disposition of such litigation pending against the Company will not have a materially adverse effect on its consolidated financial position or results of operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        None.

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PART II.

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

Price Range of Class A Common Stock

        The Class A Common Stock is traded on the New York Stock Exchange under the symbol "HSP." The following table sets forth for each of the periods presented below, the high and low closing sale prices per share:

		High		Low
Year Ended December 31, 2000
	First Quarter	$	64.19	$	43.13
	Second Quarter		52.78		30.94
	Third Quarter		41.50		20.63
	Fourth Quarter		37.60		19.13
Year Ended December 31, 2001
	First Quarter	$	37.44	$	17.90
	Second Quarter		28.69		15.69
	Third Quarter		27.74		14.11
	Fourth Quarter		26.00		15.00

        As of December 31, 2001, there were approximately 118 and 1 record holders of the Class A and Class B Common Stock, respectively. This figure does not include an estimate of the indeterminate number of beneficial holders whose shares of Class A Common Stock may be held of record by brokerage firms and clearing agencies.

Dividend Policy

        The Company has never paid a cash dividend on its Common Stock and does not anticipate paying cash dividends in the foreseeable future. The Company intends to retain any earnings for use in the growth of its business. The Company currently is restricted from paying any cash dividends on its capital stock under its credit agreement.

ITEM 6. SELECTED FINANCIAL DATA

        The selected consolidated financial data listed below should be read with Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations and with the Company's consolidated financial statements including notes thereto, included elsewhere in this document. The following table presents selected consolidated financial data for Hispanic Broadcasting Corporation and

19

its subsidiaries for the years ended December 31, 2001, 2000, 1999, 1998 and 1997 (in thousands, except per share data):

			Year Ended December 31,
			2001			2000			1999			1998			1997
Statement of Operations Data:
Net revenues			$	240,775		$	237,554		$	197,920		$	164,122		$	136,584
Operating expenses				75,399			65,741			51,154			48,511			40,860
Wages, salaries and benefits				76,363			69,985			57,389			48,947			40,738
Provision for bad debts				4,289			3,757			1,869			1,418			2,757
Depreciation and amortization				36,415			34,264			28,492			21,149			14,928
Corporate expenses				3,718			3,879			2,858			2,359			2,289
Operating income				44,591			59,928			56,158			41,738			35,012
Other income (expense):
	Interest income (expense), net			3,449			7,078			1,831			2,634			(3,541	)
	Other, net			2,871			1,585			—			252			(82	)
				6,320			8,663			1,831			2,886			(3,623	)
Income before income tax				50,911			68,591			57,989			44,624			31,389
Income tax				19,942			27,060			23,813			17,740			12,617
Net income			$	30,969		$	41,531		$	34,176		$	26,884		$	18,772
Net income per common share(a):
		Basic	$	0.28		$	0.38		$	0.34		$	0.27		$	0.23
		Diluted	$	0.28		$	0.38		$	0.33		$	0.27		$	0.22
Weighted average common shares outstanding:
	Basic			108,872			108,858			101,566			98,042			83,342
	Diluted			109,617			110,388			102,927			98,695			83,584
Statement of Cash Flow Data:
Net cash provided by operating activities			$	79,878		$	70,843		$	61,641		$	56,985		$	43,792
Net cash used in investing activities				(129,963	)		(172,514	)		(226,133	)		(246,326	)		(23,019	)
Net cash provided by (used in) financing activities				(6,017	)		2,224			369,335			193,081			(19,008	)
Other Operating Data(b):
EBITDA			$	81,006		$	94,192		$	84,650		$	62,887		$	49,940
Balance Sheet Data (at end of period):
Working capital			$	86,553		$	145,714		$	231,137		$	17,168		$	10,970
Net intangible assets				1,023,400			942,153			848,351			646,201			423,530
Total assets				1,241,743			1,204,648			1,157,138			746,689			512,249
Long-term debt, less current portion				1,418			1,404			1,448			1,547			14,122
Stockholders' equity				1,096,816			1,071,003			1,026,253			622,621			389,960

^(a)

All common share and per-common-share amounts have been adjusted retroactively for two-for-one common stock splits effective June 15, 2000 and December 1, 1997.

^(b)

EBITDA consists of operating income excluding depreciation and amortization. EBITDA is not calculated in accordance with generally accepted accounting principles. This measure should not be considered in isolation or as a substitute for or as superior to operating income, cash flows from operating activities or any other measure for determining our operating performance or liquidity that is calculated in accordance with generally accepted accounting principles. Further, such amount may not be consistent with similarly titled measures presented by other companies.

20

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        The following discussion of the consolidated results of operations and cash flows of the Company for the years ended December 31, 2001, 2000 and 1999 and consolidated financial condition as of December 31, 2001 and 2000 should be read in conjunction with the consolidated financial statements of the Company and the related notes included elsewhere in this report.

General

        The primary source of revenues is the sale of broadcasting time for advertising. In 2001, we generated approximately 67.5% of our gross revenues from local advertising, which is sold primarily by each individual local radio station's sales staff, and approximately 26.5% from national spot advertising, which is sold by independent advertising sales representatives. The balance of our 2001 revenues came from political, network sales and miscellaneous revenues such as rental income from tower sites, and from our Internet operation.

        The most significant operating expenses are programming expenses, and advertising and promotion expenses. Operating expenses are affected in part by the timing of promotion campaigns to improve audience ratings, the timing of acquisitions, and the financial performance of our new station formats.

        The Company has historically purchased primarily English-language radio stations and converted the formats to a variety of Spanish-language formats. As a result, the historical financial performance of acquired radio stations is not a good indicator of future financial performance. A new start-up radio station generates operating losses in its first year of operation. The magnitude of operating losses is determined in part by the size of the market served by the radio station, the amount of promotion expense required to attract an audience to the station, and the size of the acquisition. Thus, the Company's financial results in any given year can be affected by the timing, number, and acquisition cost and operating expenses of its start-up stations in that year.

        EBITDA consists of operating income or loss excluding depreciation and amortization. EBITDA is not calculated in accordance with generally accepted accounting principles. This measure should not be considered in isolation or as a substitute for or as superior to operating income, cash flows from operating activities or any other measure for determining operating performance or liquidity that is calculated in accordance with generally accepted accounting principles. EBITDA does not take into account the Company's debt service requirements and other commitments and, accordingly, it is not necessarily indicative of an amount that may be available for dividends, reinvestment in the Company's business or other discretionary uses. In addition, our definition of EBITDA is not necessarily comparable to similarly titled measures reported by other companies.

        We calculate same station results by measuring the operating performance of each radio station format in the current period to the performance in the comparable period of the prior year for each station format that has been in a Spanish-language format for two or more years. In some instances, existing station formats are moved to new radio frequencies. In this case, the same station designation follows the format and the start-up becomes the station that launches a new Spanish-language format.

        In 2001 and 2000, the Company funded its acquisitions with available cash. In addition, the Company's financial performance benefited from interest income generated on the Company's available cash balances. In 2002, the Company will use its excess cash to acquire more start-up radio stations and borrow from its $225.0 million revolving credit facility (the "Credit Facility"). As a result, interest income and securities gains will decline and interest expense and long-term obligations will increase.

21

Results of Operations for the Year Ended December 31, 2001 Compared to the Year Ended December 31, 2000

        The results of operations for the year ended December 31, 2001 are not comparable to the results of operations for the same period in 2000 primarily due to the acquisition of KLNO(FM) in Dallas on September 24, 1999 (the station operated under a time brokerage agreement until January 31, 2000 when the Company began programming the station in a Spanish-language format), the start-up of radio stations KRCD(FM) and KRCV(FM) in Los Angeles on January 31, 2000, the start-up of radio stations KCOR(FM) and KBBT(FM) in San Antonio on September 15, 2000 and September 29, 2000, respectively, the programming format changes on radio stations KDXX(AM/FM), KDXT(FM) and KDOS(FM) in Dallas on February 1, 2000 and KQBU(FM) in Houston on August 18, 2001, the acquisition of KOVE(FM) in Houston on July 20, 2001 and KOMR(FM), KMRR(FM), KKMR(FM) and KHOV(FM) in Phoenix on October 31, 2001, and the elimination of KTNQ(AM) in Los Angeles as a separately programmed radio station on January 1, 2001.

        Net revenues increased by $3.2 million or 1.3% to $240.8 million for the year ended December 31, 2001 from $237.6 million for the same period in 2000. Net revenues increased for the year ended December 31, 2001, compared to the same period in 2000 primarily because of (a) revenue growth of same stations, and (b) revenues from start-up stations acquired or reformatted in 2000 and 2001. For the year ended December 31, 2001, same station net revenues increased 1.4% over the same period of 2000 to $226.1 million. The Company's same station revenue performance compares favorably to an overall decline in radio revenues experienced by all radio stations operating in the Company's thirteen markets. The Company's FM same stations posted a net revenues increase of 3.4% for the year ended December 31, 2001, compared to the same period of 2000. The Company's AM same stations posted a net revenues decrease of 9.7% for the year ended December 31, 2001, compared to the same period of 2000. The decrease in AM station performance was due in part to a decision to reformat some of its news/talk stations during the first half of 2001.

        Operating expenses increased by $9.7 million or 14.8% to $75.4 million for the year ended December 31, 2001 from $65.7 million for the same period in 2000. Operating expenses increased for the year ended December 31, 2001, compared to the same period in 2000 primarily because of (a) promotion expenses to address direct competition in the key markets of Los Angeles, Chicago and Miami, (b) rent associated with the expansion of the Company's studio facilities in Los Angeles, San Francisco, Miami and New York, (c) trade expenses due to additional promotion campaigns for Los Angeles and Miami, and (d) an impairment loss on an investment. As a percentage of net revenues, operating expenses increased to 31.3% from 27.7% for the years ended December 31, 2001 and 2000, respectively.

        Wages, salaries and benefits increased by $6.4 million or 9.1% to $76.4 million for the year ended December 31, 2001 from $70.0 million for the same period in 2000. Wages, salaries and benefits increased for the year ended December 31, 2001, compared to the same period in 2000 primarily because of (a) additional personnel associated with start-up stations, (b) personnel costs associated with the programming changes in New York and Miami, (c) additional costs incurred to hire experienced sales personnel in Los Angeles and Houston, and (d) higher staffing costs in the corporate office. As a percentage of net revenues, wages, salaries and benefits increased to 31.7% from 29.5% for the years ended December 31, 2001 and 2000, respectively.

        The provision for bad debts increased by $0.5 million or 13.2% to $4.3 million for the year ended December 31, 2001 from $3.8 million for the same period in 2000. The provision for bad debts increased for the year ended December 31, 2001, compared to the same period in 2000 primarily because of the estimated uncollectability of certain notes receivable. As a percentage of net revenues, the provision increased to 1.8% from 1.6% for the years ended December 31, 2001 and 2000, respectively.

22

        Corporate expenses decreased by $0.2 million or 5.1% to $3.7 million for the year ended December 31, 2001, from $3.9 million for the same period in 2000. The decrease was primarily due to lower legal and professional fees in 2001. As a percentage of net revenues, corporate expenses decreased to 1.5% from 1.6% for the years ended December 31, 2001 and 2000, respectively.

        EBITDA for the year ended December 31, 2001 decreased $13.2 million or 14.0% to $81.0 million compared to $94.2 million for the same period in 2000. As a percentage of net revenues, EBITDA decreased to 33.6% from 39.6% for the years ended December 31, 2001 and 2000, respectively.

        Depreciation and amortization for the year ended December 31, 2001 increased $2.1 million to $36.4 million, compared to $34.3 million for the same period in 2000. The increase is due to the acquisitions of KOVE(FM) in Houston and KOMR(FM), KMRR(FM), KKMR(FM) and KHOV(FM) in Phoenix, and capital expenditures.

        Interest income, net decreased to $3.4 million from $7.1 million for the year ended December 31, 2001 and 2000, respectively. The decrease for the year ended December 31, 2001, compared to the same period in 2000 was due to cash and cash equivalents being higher in 2000 than in 2001 and lower interest rates in 2001.

        Other, net increased to $2.9 million for the year ended December 31, 2001, from $1.6 million in the same period in 2000. The increase was due to gains on the sales of securities and the final award received by the Company related to an arbitration proceeding. Other, net is identified as revenues and expense incurred outside the normal course of business.

        Federal and state income taxes are being provided at an effective rate of 39.2% and 39.5% for the years ended December 31, 2001 and 2000, respectively. The decrease in the effective rate is due to a lower effective state tax rate.

        For the year ended December 31, 2001, the Company's net income totaled $31.0 million ($0.28 per common share) compared to $41.5 million ($0.38 per common share) in the same period in 2000.

Results of Operations for the Year Ended December 31, 2000 Compared to the Year Ended December 31, 1999

        The results of operations for the year ended December 31, 2000 are not comparable to the results of operations for the same period in 1999 primarily due to the start-up of radio stations KHOT(FM) in Phoenix on April 5, 1999, the radio station broadcasting at 94.1 MHz (KLNO(FM)) in Dallas on September 24, 1999, KRCD(FM) and KRCV(FM) in Los Angeles on January 31, 2000, KCOR(FM) and KBBT(FM) in San Antonio on September 15, 2000 and September 29, 2000, respectively, and the start-up of HBCi, LLC, the Company's Internet subsidiary on January 1, 2000.

        Net revenues increased by $39.7 million or 20.1% to $237.6 million for the year ended December 31, 2000 from $197.9 million for the same period in 1999. Net revenues increased for the year ended December 31, 2000, compared to the same periods in 1999 primarily because of (a) revenue growth of same stations, and (b) revenues from start-up stations acquired or reformatted in 1999 and 2000. Same station revenues benefited from improved performance of the Company's news/talk stations, which collectively had posted revenue declines a year earlier.

        Operating expenses increased by $14.6 million or 28.6% to $65.7 million for the year ended December 31, 2000 from $51.1 million for the same period in 1999. Operating expenses increased primarily due to (a) an increase in operating expenses of same stations, (b) increases in operating expenses of start-up stations, and (c) costs associated with the development, launch and operation of the Company's radio station Internet websites and local portals. We increased the promotion of our radio stations to improve the ratings and invested in programming research and our non-traditional revenue initiative. Non-traditional revenues are revenues from the implementation of new business

23

development techniques. As a percentage of net revenues, operating expenses increased to 27.7% from 25.8% for the years ended December 31, 2000 and 1999, respectively.

        Wages, salaries and benefits increased by $12.6 million or 22.0% to $70.0 million for the year ended December 31, 2000 from $57.4 million for the same period in 1999. Wages, salaries and benefits increased for the year ended December 31, 2000, compared to the same period in 1999 primarily because of (a) increased personnel costs associated with start-up stations, (b) an additional investment in on-air talent, (c) additional sales and marketing personnel including such costs associated with our non-traditional revenue initiative, and (d) higher staffing costs of the corporate office. As a percentage of net revenues, wages, salaries and benefits increased to 29.5% from 29.0% for the years ended December 31, 2000 and 1999, respectively.

        The provision for bad debts increased by $1.9 million or 100.0% to $3.8 million for the year ended December 31, 2000 from $1.9 million for the same period in 1999. The provision for bad debts increased for the year ended December 31, 2000, compared to the same period in 1999 primarily due to our estimate that a certain agency account is uncollectable. As a percentage of net revenues, the provision increased to 1.6% from 1.0% for the years ended December 31, 2000 and 1999, respectively.

        Corporate expenses increased by $1.1 million or 39.3% to $3.9 million for the year ended December 31, 2000 from $2.8 million for the same period in 1999. The increase was primarily due to the costs of approximately $0.6 million associated with the move from the Nasdaq National Market to the New York Stock Exchange and the costs associated with the Company's unsuccessful efforts to acquire three radio stations from Clear Channel. As a percentage of net revenues, corporate expenses increased to 1.6% from 1.4% for the years ended December 31, 2000 and 1999, respectively.

        EBITDA for the year ended December 31, 2000 increased 11.2%, to $94.2 million compared to $84.7 million for the same period in 1999. As a percentage of net revenues, EBITDA decreased to 39.6% from 42.8% for the years ended December 31, 2000 and 1999, respectively.

        Depreciation and amortization for the year ended December 31, 2000 increased 20.4% to $34.3 million compared to $28.5 million for the same period in 1999. The increase is due to radio station acquisitions and capital expenditures.

        Interest income, net increased to $7.1 million from $1.8 million for the years ended December 31, 2000 and 1999, respectively. The increase for the year ended December 31, 2000 compared to the same period in 1999 was due to cash and cash equivalents being much higher in 2000 than in 1999 due to the unspent proceeds of the November 1999 secondary public stock offering being invested for the entire year.

        Other, net increased to $1.6 million for the year ended December 31, 2000. The increase was mainly due to the award received by the Company related to the Z-Spanish Media Corporation (owner of radio station KLNZ(FM)) arbitration proceedings.

        Federal and state income taxes are being provided at an effective rate of 39.5% and 41.1% for the years ended December 31, 2000 and 1999, respectively. The decrease in the effective rate is primarily due to an increase in tax-exempt interest income.

        For the year ended December 31, 2000, the Company's net income totaled $41.5 million ($0.38 per common share), compared to $34.2 million ($0.33 per common share—diluted) in the same period in 1999.

Liquidity and Capital Resources

        Net cash provided by operating activities for the year ended December 31, 2001 was $79.9 million as compared to $70.8 million for the same period in 2000. The $9.1 million increase from 2000 to 2001 is due to (a) the estimated federal and state income tax payments for the year ended December 31,

24

2001 are less than the comparative period in 2000 due to lower federal and state income tax liabilities, and (b) a greater amount of accounts receivable collections in 2001. Net cash used in investing activities was $130.0 and $172.5 million for the years ended December 31, 2001 and 2000, respectively. The $42.5 million decrease from 2000 to 2001 is primarily due to deferred charges and other assets increasing in 2000 due to expenditures for signal upgrades in process for radio stations KPTY(FM) in Houston and KDXX(FM) and KDXT(FM) in Dallas. The remaining decrease is due to the acquisition of KRCD(FM), KRCV(FM), KCOR(FM) and KBBT(FM) in 2000 having a higher aggregate purchase price than KOVE(FM), KOMR(FM), KMRR(FM), KKMR(FM) and KHOV(FM) purchased in 2001. Net cash used in financing activities was $6.0 million and net cash provided by financing activities was $2.2 million for the years ended December 31, 2001 and 2000, respectively. The $8.2 million decrease from 2000 to 2001 is primarily due to the purchase of treasury stock in 2001.

        Generally, capital expenditures are made with available cash. Capital expenditures totaled $14.3 million for the year ended December 31, 2001. Approximately $10.0 million of the capital expenditures incurred during the year ended December 31, 2001 related to radio signal upgrade projects affecting five different radio stations in Houston and Dallas and the build-out of studio and office space in Los Angeles, San Francisco, New York, Miami, Phoenix and San Antonio compared to $6.6 million incurred in the same period in 2000 for radio signal upgrade projects in Houston and Dallas and the build-out of studios in Miami, Los Angeles, Phoenix and Dallas.

        Available cash plus cash flow provided by operations was sufficient to fund the Company's operations, meet its debt obligations, and to fund capital expenditures. Management believes the Company will have sufficient cash and cash provided by operations to finance its operations, satisfy its debt service requirements, and to fund capital expenditures. Management regularly reviews potential acquisitions. Future acquisitions will be financed primarily through available cash, proceeds from borrowings under the Credit Facility, proceeds from securities or debt offerings, and/or from cash provided by operations.

Stockholders' Equity

        In 2001, the Company purchased 685,500 shares of its Class A Common Stock at a weighted average price per share of $14.75.

Long-Term Debt

        The scheduled maturities of long-term obligations, future minimum rental payments under noncancellable operating leases and radio station acquisition commitments as of December 31, 2001 are as follows (in thousands):

	Payments Due by Period
	Total		Less than 1 year		1-3 years		4-5 years		After 5 years
Long-term obligations	$	1,424	$	6	$	14	$	17	$	1,387
Operating leases		74,252		8,134		15,434		13,597		37,087
Radio station acquisitions		79,025		79,025		—		—		—
Total contractual cash obligations	$	154,701	$	87,165	$	15,448	$	13,614	$	38,474

        For the years ended December 31, 2001 and 2000, no amounts were borrowed on the Credit Facility. As of December 31, 2001, the Company had $225.0 million of credit available. Borrowings under the Credit Facility bear interest at a rate based on LIBOR plus an applicable margin as determined by the Company's leverage ratio. The Credit Facility is secured by the stock of the Company's subsidiaries. Availability under the Credit Facility reduces quarterly commencing September 30, 1999 and ending December 31, 2004. Our ability to make additional borrowings under

25

the Credit Facility is subject to compliance with certain financial ratios and other conditions set forth in the Credit Facility.

Recently Issued Accounting Pronouncements

        In July 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 142, Goodwill and Other Intangible Assets. SFAS No. 142 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized and to be tested for impairment at least annually in accordance with the provisions of SFAS No. 142. The Company is required to adopt the provisions of SFAS No. 142 effective January 1, 2002. Intangible assets determined to have an indefinite useful life that are acquired in a business combination completed after June 30, 2001 will not be amortized and will be evaluated for impairment. Goodwill and intangible assets acquired in business combinations completed before July 1, 2001 will continue to be amortized prior to the adoption of SFAS No. 142. Management believes the adoption of SFAS No. 142 will materially reduce amortization expense and increase operating income, net income and net income per common share.

        Upon adoption of SFAS No. 142, we will be required to reassess the useful lives of all intangible assets acquired on or before June 30, 2001, and make any necessary remianing amortization period adjustments by the end of the first interim period after adoption of SFAS No. 142. In addition, to the extent that an intangible asset is identified as having an indefinite useful life, we will be required to test the intangible asset for impairment in accordance with the provisions of SFAS No. 142 within the first interim period after adoption of SFAS No. 142. Any impairment loss will be measured as of the date of adoption and recognized as the cumulative effect of a change in accounting principle in the first interim period after adoption.

        In connection with the transitional cost in excess of fair value of net assets acquired impairment evaluation, SFAS No. 142 requires us to perform an assessment of whether there is an indication that cost in excess of fair value of net assets acquired is impaired as of the date of the adoption of SFAS No. 142. To accomplish this, we must identify the reporting units and determine the carrying value of each reporting unit by assigning the assets and liabilities, including the existing cost in excess of fair value of net assets acquired and other intangible assets, to those reporting units as of the date of adoption of SFAS No. 142. The Company defines its reporting unit to be an individual radio market. To the extent a reporting unit's carrying amount exceeds its fair value, the reporting unit's cost in excess of fair value of net assets acquired may be impaired and we must perform the second step of the transitional impairment test. In the second step, we must compare the implied fair value of the reporting unit's cost in excess of fair value of net assets acquired, determined by allocating the reporting unit's fair value to all of its assets (recognized and unrecognized) and liabilities in a manner similar to a purchase price allocation in accordance with SFAS No. 141, to its carrying amount, both of which would be measured as of the date of adoption of SFAS No. 142. Any transitional impairment loss will be recognized as the cumulative effect of a change in accounting principle in our statement of income and comprehensive income.

        Amortization expense related to broadcast licenses, cost in excess of fair value of net assets acquired and certain other intangible assets was $25.4 million for the year ended December 31, 2001. Because of the extensive effort needed to comply with adopting SFAS No. 141 and SFAS No. 142, it is not practicable to reasonably estimate the impact of adopting these standards on our financial statements at this time, including whether any transitional impairment losses will be required to be recognized as the cumulative effect of a change in accounting principle.

        In October 2001, the Financial Accounting Standards Board issued SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. SFAS No. 144 supersedes SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of. SFAS No. 144

26

retains the requirements of SFAS No. 121 to (a) recognize an impairment loss only if the carrying amount of a long-lived asset is not recoverable from its undiscounted cash flows and (b) measure an impairment loss as the difference between the carrying amount and fair value of the asset. The statement also removes goodwill from its scope and covers the accounting for the disposal of long-lived assets. The Company is required to adopt the provisions of SFAS No. 144 effective January 1, 2002. Management does not believe adoption of this statement will materially impact the Company's financial position or results of operations.

Critical Accounting Policies

        Critical accounting policies are defined as those that are reflective of significant judgments and uncertainties, and potentially result in materially different results under different assumptions and conditions. The Company believes that its critical accounting policies are limited to those described below.

Impairment of Long-Lived Assets

        The Company records impairment losses when events and circumstances indicate that long-lived assets might be impaired and the undiscounted cash flow estimated to be generated by those assets is less than the carrying amount of those assets. When specific assets are determined to be impaired, the cost basis of the assets is reduced to reflect their current fair market value.

        We performed a recoverability assessment of all of our long-lived assets using an undiscounted cash flow model as of December 31, 2001. Based on our assumptions, all long-lived assets were determined to be recoverable.

Revenue Recognition

        Revenue is derived primarily from the sale of advertising time to local and national advertisers. Revenue is recognized as commercials are broadcast. Revenues from barter transactions are recognized as income when commercials are broadcast. Barter transactions are recorded at the estimated fair value of the goods or services received.

Allowance For Doubtful Accounts

        The allowance for doubtful accounts is estimated using a combination of the aging of the accounts receivable balances and knowledge related to the ability of the Company to collect specific accounts. Older accounts receivable are seen to be less likely to be collected and require a greater allowance. Specific accounts which are estimated to not be collected increase the allowance.

        For additional information on our significant accounting policies, see Note 1 to our accompanying consolidated financial statements.

Inflation

        Inflation has affected financial performance due to higher operating expenses. Although the exact impact of inflation is indeterminable, we have offset these higher costs by increasing the effective advertising rates of most of our radio stations.

Ratio of Earnings to Fixed Charges and Earnings to Combined Fixed Charges and Preferred Stock Dividends

        The ratios of earnings to fixed charges for the Company are computed by dividing pretax income from continuing operations after certain adjustments, by fixed charges. Fixed charges consist of interest expense on all long and short-term borrowings and the estimated interest portion of rental expense. Set

27

forth below are the ratios of earnings to fixed charges and earnings to combined fixed charges and preferred stock dividends (in thousands except ratios):

	Year Ended December 31,
	2001	2000	1999	1998	1997
Earnings to Fixed Charges	16.7	28.6	20.0	14.6	7.5
Earnings to Combined Fixed Charges and Preferred Stock Dividends	16.7	28.6	20.0	14.6	7.5

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        The Company is subject to interest rate risk on both the interest earned on cash and cash equivalents and interest paid on borrowings under the Credit Facility. A change of 10% in the interest rate earned on short-term investments and interest paid under the Credit Facility would not have had a significant impact on our historical financial statements.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Financial Statements

	Page Number
Independent Auditors' Report	30
Consolidated Balance Sheets as of December 31, 2001 and 2000	31
Consolidated Statements of Income and Comprehensive Income for the Years Ended December 31, 2001, 2000 and 1999	32
Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 2001, 2000 and 1999	33
Consolidated Statements of Cash Flows for the Years Ended December 31, 2001, 2000 and 1999	34
Notes to Consolidated Financial Statements	35

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INDEPENDENT AUDITORS' REPORT

The Board of Directors
Hispanic Broadcasting Corporation:

        We have audited the accompanying consolidated balance sheets of Hispanic Broadcasting Corporation and subsidiaries (the "Company") as of December 31, 2001 and 2000 and the related consolidated statements of income and comprehensive income, stockholders' equity, and cash flows for each of the years in the three-year period ended December 31, 2001. In connection with our audits of the consolidated financial statements, we also have audited the financial statement schedule included at Item 14(a) (2). These consolidated financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits.

        We conducted our audits in accordance with auditing standards generally accepted in the United States of America. 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 consolidated financial statements referred to above present fairly, in all material respects, the financial position of Hispanic Broadcasting Corporation and subsidiaries as of December 31, 2001 and 2000 and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

        As discussed in Note 1 to the consolidated financial statements, effective July 1, 2001, Hispanic Broadcasting Corporation and subsidiaries adopted the provisions of Statement of Financial Accounting Standards ("SFAS") No. 141, Business Combinations, and certain provisions of SFAS No. 142, Goodwill and Other Intangible Assets, as required for goodwill and intangible assets resulting from business combinations consummated after June 30, 2001.

KPMG LLP

Dallas, Texas
February 8, 2002, except for Note 2 which is as of April 1, 2002

30

HISPANIC BROADCASTING CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands except share information)

ASSETS

			December 31,
			2001			2000
Current assets:
	Cash and cash equivalents		$	59,587		$	115,689
	Accounts receivable, net of allowance of $3,458 in 2001 and $3,181 in 2000			50,241			49,428
	Prepaid expenses and other current assets			748			886
		Total current assets		110,576			166,003
Property and equipment, at cost:
	Land and improvements			10,790			9,648
	Buildings and improvements			17,622			10,481
	Broadcast and other equipment			49,794			42,932
	Furniture and fixtures			16,642			12,901
				94,848			75,962
	Less accumulated depreciation and amortization			40,420			30,844
				54,428			45,118
Intangible assets:
	Broadcast licenses			1,018,237			908,640
	Cost in excess of fair value of net assets acquired			97,625			99,711
	Other intangible assets			17,664			17,256
				1,133,526			1,025,607
	Less accumulated amortization			110,126			83,454
				1,023,400			942,153
Restricted cash				3,151			—
Deferred charges and other assets				50,188			51,374
		Total assets	$	1,241,743		$	1,204,648
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Accounts payable		$	4,700		$	3,198
	Accrued expenses			15,968			15,330
	Income taxes payable			3,349			1,738
	Current portion of long-term obligations			6			23
		Total current liabilities		24,023			20,289
Long-term obligations, less current portion				1,418			1,404
Deferred income taxes				119,486			111,952
Commitments and contingencies
Stockholders' equity:
	Preferred Stock, cumulative, $.001 par value; authorized 5,000,000 shares; no shares issued or outstanding			—			—
	Class A Common Stock, $.001 par value; authorized 175,000,000 shares in 2001 and 2000; issued 80,923,786 shares and outstanding 80,238,286 shares in 2001 and issued and outstanding 80,645,351 shares in 2000			81			81
	Class B Common Stock, convertible, $.001 par value; authorized 50,000,000 shares; issued and outstanding 28,312,940 shares			28			28
	Additional paid-in capital			1,042,907			1,037,955
	Retained earnings			63,908			32,939
	Treasury stock, at cost, 685,500 shares at December 31, 2001			(10,108	)		—
		Total stockholders' equity		1,096,816			1,071,003
		Total liabilities and stockholders' equity	$	1,241,743		$	1,204,648

See accompanying notes to consolidated financial statements.

31

HISPANIC BROADCASTING CORPORATION AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME


(in thousands except per share data)

			Year Ended December 31,
			2001			2000			1999
Revenues			$	274,314		$	270,339		$	225,301
Agency commissions				33,539			32,785			27,381
Net revenues				240,775			237,554			197,920
Operating expenses				75,399			65,741			51,154
Wages, salaries and benefits				76,363			69,985			57,389
Provision for bad debt				4,289			3,757			1,869
Depreciation and amortization				36,415			34,264			28,492
Corporate expenses				3,718			3,879			2,858
Operating income				44,591			59,928			56,158
Other income (expense):
	Interest income			3,852			7,897			3,438
	Interest expense			(403	)		(819	)		(1,607	)
	Other, net			2,871			1,585			—
				6,320			8,663			1,831
Income before income tax				50,911			68,591			57,989
Income tax				19,942			27,060			23,813
Net income			$	30,969		$	41,531		$	34,176
Net income per common share:
	Basic		$	0.28		$	0.38		$	0.34
	Diluted		$	0.28		$	0.38		$	0.33
Weighted average common shares outstanding:
	Basic			108,872			108,858			101,566
	Diluted			109,617			110,388			102,927
Comprehensive income:
	Net income		$	30,969		$	41,531		$	34,176
	Other comprehensive income, net of tax:
		Unrealized gain on marketable equity securities (net of tax of $268)		418			—			—
		Reclassification adjustment for gains included in net income (net of tax of $268)		(418	)		—			—
Comprehensive income			$	30,969		$	41,531		$	34,176

See accompanying notes to consolidated financial statements.

32

HISPANIC BROADCASTING CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(in thousands except share information)

				Common Stock							Retained earnings (accumulated deficit)						Accummulated other comprehensive income
		Preferred Stock						Additional paid-in capital						Treasury stock
				Class A		Class B														Total
Balance at December 31, 1998		$	—	$	35	$	14	$	665,340		$	(42,768	)	$	—		$	—		$	622,621
Net proceeds from issuance of 10,145,596 shares of Class A Common Stock			—		5		—		369,451			—			—			—			369,456
Net income			—		—		—		—			34,176			—			—			34,176
Balance at December 31, 1999			—		40		14		1,034,791			(8,592	)		—			—			1,026,253
Net proceeds from issuance of 149,111 shares of Class A Common Stock			—		—		—		2,324			—			—			—			2,324
Two-for-one stock split			—		41		14		(55	)		—			—			—			—
Tax benefit of stock options exercised			—		—		—		653			—			—			—			653
Options issued to non employees for services			—		—		—		242			—			—			—			242
Net income			—		—		—		—			41,531			—			—			41,531
Balance at December 31, 2000			—		81		28		1,037,955			32,939			—			—			1,071,003
Proceeds from issuance of 278,435 shares of Class A Common Stock			—		—		—		4,094			—			—			—			4,094
Purchase of 685,500 shares of Class A Common Stock			—		—		—		—			—			(10,108	)		—			(10,108	)
Tax benefit of stock options exercised			—		—		—		729			—			—			—			729
Options issued to non employees for services			—		—		—		129			—			—			—			129
Net income			—		—		—		—			30,969			—			—			30,969
Other comprehensive income:
	Unrealized gain on marketable equity securities (net of tax of $268)		—		—		—		—			—			—			418			418
	Reclassification adjustment for gains included in net income (net of tax of $268)		—		—		—		—			—			—			(418	)		(418	)
Total comprehensive income			—		—		—		—			—			—			—			30,969
Balance at December 31, 2001		$	—	$	81	$	28	$	1,042,907		$	63,908		$	(10,108	)	$	—		$	1,096,816

See accompanying notes to consolidated financial statements.

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HISPANIC BROADCASTING CORPORATION AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CASH FLOWS


(in thousands)

					Year Ended December 31,
					2001			2000			1999
Cash flows from operating activities:
	Net income				$	30,969		$	41,531		$	34,176
	Adjustments to reconcile net income to net cash rovided by operating activities:
		Provision for bad debts				4,289			3,757			1,869
		Depreciation and amortization				36,415			34,264			28,492
		Amortization of debt facility fee included in interest expense				156			162			156
		Deferred income taxes				9,620			7,960			8,006
		Changes in operating assets and liabilities:
			Accounts receivable, net			(5,315	)		(12,533	)		(8,338	)
			Prepaid expenses and other current assets			163			(61	)		(377	)
			Accounts payable			1,502			1,988			(775	)
			Accrued expenses			637			(2,698	)		(4,173	)
			Income taxes payable			2,340			(4,369	)		2,601
			Other, net			(898	)		842			4
				Net cash provided by operating activities		79,878			70,843			61,641
Cash flows from investing activities:
	Acquisitions of radio stations					(114,129	)		(120,152	)		(208,921	)
	Cash deposited in restricted cash account related to the San Jose Acquisition and the Fresno Acquisition					(3,151	)		—			—
	Property and equipment acquisitions					(14,344	)		(11,007	)		(11,578	)
	Dispositions of property and equipment					35			111			951
	Additions to intangible assets					(143	)		(653	)		(144	)
	Increase in deferred charges and other assets					(6,842	)		(40,813	)		(6,441	)
	Proceeds from the sale of securities included in deferred charges and other assets					8,611			—			—
		Net cash used in investing activities				(129,963	)		(172,514	)		(226,133	)
Cash flows from financing activities:
	Borrowings on long-term obligations					—			—			71,000
	Payments on long-term obligations					(3	)		(120	)		(71,121	)
	Proceeds from stock issuances					4,094			2,344			369,456
	Purchase of treasury stock					(10,108	)		—			—
		Net cash provided by (used in) financing activities				(6,017	)		2,224			369,335
Net increase (decrease) in cash and cash equivalents						(56,102	)		(99,447	)		204,843
Cash and cash equivalents at beginning of year						115,689			215,136			10,293
Cash and cash equivalents at end of year					$	59,587		$	115,689		$	215,136

See accompanying notes to consolidated financial statements.

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HISPANIC BROADCASTING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies

Organization

        Hispanic Broadcasting Corporation (the "Company"), through its subsidiaries, owns and operates 52 Spanish-language and other Hispanic-targeted radio stations serving 13 markets throughout the United States (Los Angeles, New York City, Miami, San Francisco/San Jose, Chicago, Houston, San Antonio, Dallas/Fort Worth, McAllen/Brownsville/Harlingen, San Diego, Phoenix, El Paso and Las Vegas). The Company also owns and operates HBC Radio Network, which is one of the largest Spanish-language radio broadcast networks in the United States in terms of audience delivery and HBCi which operates the Company's radio station Internet websites.

Basis of Consolidation

        The accompanying consolidated financial statements include the accounts of Hispanic Broadcasting Corporation and its wholly-owned subsidiaries. The Company consolidates the accounts of subsidiaries when it has a controlling financial interest (over 50%) in the outstanding voting shares of the subsidiary.

        All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

        The preparation of financial statements in conformity with generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and related notes to the consolidated financial statements. Actual results could differ from those estimates.

Cash Equivalents

        Cash and cash equivalents include all highly liquid investments with an original maturity of three months or less.

Restricted Cash

        Restricted cash is cash held in escrow accounts for pending acquisitions which is legally restricted.

Investments

        The Company uses the equity method to account for investments when it does not have a controlling interest but has the ability to exercise significant influence over the operating and/or financial decisions of the investee. Investments where the Company does not exert significant influence are accounted for using the cost method. Investments at December 31, 2001 and 2000 (included in deferred charges and other assets) consist of interests in entities which are involved in radio broadcasting and the ownership of transmission towers. No amount was recorded in equity in earnings in 2001.

Property and Equipment

        Property and equipment are recorded at cost. Expenditures for significant renewals and betterments are capitalized. Repairs and maintenance are charged to expense as incurred. Gains or

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losses from disposition of property and equipment are recognized in the statement of income and comprehensive income.

        Depreciation is provided in amounts sufficient to relate the asset cost to operations over the estimated useful lives on a straight-line basis. Leasehold improvements are amortized over the remaining life of the lease or the estimated service life of the asset, whichever is shorter. The estimated useful lives are as follows:

Land improvements	15 years
Buildings and improvements	3 - 40 years
Broadcast and other equipment	2 - 30 years
Furniture and fixtures	2 - 10 years

Intangible Assets

        Intangible assets are recorded at cost. Amortization of intangible assets is provided in amounts sufficient to charge the asset cost to operations over the estimated useful lives on a straight-line basis. Only intangible assets acquired prior to July 1, 2001 are subject to amortization. The estimated useful lives are as follows:

Broadcast licenses	40 years
Cost in excess of fair value of net assets acquired	principally 40 years
Other intangible assets	3 - 40 years

        The Company evaluates periodically the propriety of the carrying amount of intangible assets, including cost in excess of fair value of net assets acquired, as well as the amortization period to determine whether current events or circumstances warrant adjustments to the carrying value and/or revised estimates of useful lives. This evaluation consists of the projection of undiscounted income before depreciation, amortization, and interest for each of the Company's radio stations over the remaining estimated useful life of the broadcast licenses. If such projections indicate that undiscounted cash flows are not expected to be adequate to recover the carrying amounts of the related intangible assets, a loss is recognized to the extent the carrying amount of the asset exceeds its fair value. The Company believes that no impairment of cost in excess of fair value of net assets acquired and other intangible assets has occurred and that no reduction of the estimated useful lives is currently warranted.

Revenue Recognition

        Revenue is derived primarily from the sale of advertising time to local and national advertisers. Revenue is recognized as commercials are broadcast.

Advertising Costs

        The Company incurs various marketing and promotional costs to add and maintain listenership. These costs are charged to expense in the year incurred and totaled approximately $9.5, $5.7 and $4.2 million for the years ended December 31, 2001, 2000 and 1999, respectively.

Barter Transactions

        Barter transactions represent advertising time exchanged for promotional items, advertising, supplies, equipment and services. Barter transactions are recorded at the estimated fair value of the goods or services received. Revenues from barter transactions are recognized as income when commercials are broadcast. Expenses are recognized when goods or services are received or used. Barter transactions are not significant to the Company's consolidated financial statements.

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Income Taxes

        Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date.

Earnings Per Share

        Basic earnings per common share is based on net earnings after preferred stock dividend requirements, if any, and the weighted average number of common shares outstanding during each year. Diluted earnings per common share reflects the incremental increase in the weighted average number of common shares due to the dilutive effect of stock options and the Employee Stock Purchase Plan.

Derivative Financial Instruments

        The Company has not invested in derivative financial instruments and there were no outstanding swap agreements or other derivative financial instruments at December 31, 2001 or 2000.

Financial Instruments

        The carrying amounts of financial instruments, including cash and cash equivalents, accounts receivable and payable, approximate fair value due to the relatively short maturity of these instruments. The carrying amount of long-term obligations, including the current portion, approximates fair value based upon quoted interest rates for the same or similar debt issues.

Credit Risk

        In the opinion of management, credit risk with respect to accounts receivable is limited due to the large number of diversified customers and the geographic diversification of the Company's customer base. The Company performs ongoing credit evaluations of its customers and believes that adequate allowances for uncollectible accounts receivable are maintained.

Stock Based Compensation

        The Company accounts for stock options issued to employees and directors using the intrinsic-value method as outlined under Accounting Principles Board Opinion No. 25 ("APB 25"), Accounting for Stock Issued to Employees and related interpretations including FASB Interpretation No. 44, Accounting for Certain Transactions involving Stock Compensation (an interpretation of APB Opinion No. 25), issued March 2000, to account for its fixed plan stock options.

        Under APB 25, the Company does not recognize compensation expense related to employee stock options since options are not granted at a price below the market value of the underlying common stock on the date of grant. In accordance with Statement of Financial Accounting Standards ("SFAS") No. 123, Accounting for Stock-Based Compensation, the Company has disclosed pro forma net income and net income per share using the fair-value method in calculating compensation expense. Also, in accordance with SFAS 123 and Emerging Issues Task Force No. 96-18 Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services, the Company includes in operating expenses in the statement of income and comprehensive income,

37

the cost of stock options (calculated using the fair-value method) issued to persons who are not employees or directors.

Comprehensive Income

        SFAS No. 130, Reporting Comprehensive Income, establishes guidelines for the reporting and display of comprehensive income and its components in financial statements. Comprehensive income includes unrealized gains on equity securities classified as available-for-sale and included as a component of stockholders' equity.

New Accounting Prounouncments

        In 2001, the Financial Accounting Standards Board issued SFAS No. 141, Business Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets. SFAS No. 141 requires that the purchase method of accounting be used for all business combinations. SFAS No. 142 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized and that such assets be tested for impairment at least annually in accordance with the provisions of SFAS No. 142. The Company adopted the provisions of SFAS No. 141 on July 1, 2001. SFAS No. 142 was adopted by the Company on July 1, 2001 for goodwill and intangible assets determined to have an indefinite useful life that are acquired in a business combination completed after June 30, 2001. Goodwill and intangible assets acquired in business combinations completed before July 1, 2001 continue to be amortized.

Reclassifications

        Certain prior year amounts have been reclassified to conform with the current year presentation.

2. Acquisitions

2001 Acquisitions

        On April 24, 2001, the Company entered into an asset purchase agreement to acquire for $80.0 million the FCC licenses of a radio station broadcasting at 106.5 MHz (KOVE(FM)), serving the Houston market (the "Houston Acquisition"). The Houston Acquisition closed on July 20, 2001. The asset acquisition was funded with available cash. The station's programming is an existing format from a different Company-owned radio station in the Houston market. The Company also granted to an affiliate of the seller, an option to program radio station KRTX(FM) which also serves the Houston market.

        The fair value of the assets acquired in the Houston Acquisition as of July 20, 2001 is as follows (in thousands):

Property and equipment	$	2,028
Broadcast licenses		77,863
Other intangible assets		173
	$	80,064

        On September 4, 2001, the Company entered into an asset purchase agreement to acquire for $34.0 million the assets of KOMR(FM) (formerly KEDJ(FM)), KMRR(FM), KKMR(FM) (formerly KOMR(FM)) and KHOV(FM) (formerly KSSL(FM)), serving the Phoenix market (the "Phoenix Acquisition"). The Phoenix Acquisition closed on October 31, 2001. The asset acquisition was funded with available cash. KOMR(FM), KMRR(FM) and KKMR(FM) are programmed with one new Hispanic-targeted format and KHOV(FM) will be simulcast with the Company's existing Phoenix station KHOT(FM).

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        The fair value of the assets acquired in the Phoenix Acquisition as of October 31, 2001 is as follows (in thousands):

Prepaid expenses and other current assets	$	24
Property and equipment		2,052
Broadcast licenses		31,707
Other intangible assets		282
	$	34,065

        The intangible assets acquired in the Houston Acquisition and the Phoenix Acquisition are not subject to amortization.

2000 Acquisitions

        On October 15, 1999, the Company entered into an asset purchase agreement to acquire for $75.0 million the assets of KRCD(FM) and KRCV(FM), serving the Los Angeles market (the "Los Angeles Acquisition"). The Los Angeles Acquisition closed on January 31, 2000. The asset acquisition was funded with a portion of the proceeds from the November 1999 secondary public stock offering (the "November 1999 Offering"). The stations' programming was converted to a single Spanish-language format in February 2000.

        On May 31, 2000, the Company entered into an asset purchase agreement to acquire for $45.0 million the assets of KCOR(FM) and KBBT(FM), serving the San Antonio market. The KCOR(FM) and KBBT(FM) acquisitions closed on September 15, 2000 and September 29, 2000, respectively. The asset acquisitions were funded with a portion of the proceeds from the November 1999 Offering. The stations' programming was converted to separate Hispanic-targeted formats.

1999 Acquisitions

        On January 27, 1999, the Company entered into an asset purchase agreement to acquire for $18.3 million the assets of KHOT(FM), serving the Phoenix market. The KHOT(FM) acquisition closed on April 5, 1999. The asset acquisition was funded with available cash. Immediately after closing, the station's programming was converted to a Spanish-language format.

        On March 1, 1999, the Company entered into an asset purchase agreement to acquire for $20.3 million the assets of KISF(FM), serving the Las Vegas market (the "Las Vegas Acquisition"). The Las Vegas Acquisition closed on April 30, 1999. The asset acquisition was funded with a $20.0 million borrowing from the Company's $225.0 million revolving credit facility (the "Credit Facility") and $0.3 million of available cash. Immediately after closing, the station's programming was converted to a Spanish-language format.

        On January 2, 1997, the Company acquired an option to purchase all of the assets used in connection with the operation of KSCA(FM), a radio station serving the Los Angeles market (the "KSCA Option"). In connection with the acquisition of the KSCA Option, the Company began providing Spanish-language programming to KSCA(FM) under a time brokerage agreement on February 5, 1997. The Company exercised the KSCA Option and on September 17, 1999, the Company acquired the assets of KSCA(FM) for $118.1 million. The Company had previously paid $13.0 million to acquire and renew the option to purchase the assets of KSCA(FM) and such payments were subtracted from the purchase price at closing. To fund the acquisition, the Company borrowed $38.0 million from the Credit Facility and used $67.1 million of available cash. The cash was generated from operating activities and proceeds of the June 1999 secondary public stock offering (the "June 1999 Offering").

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        On July 6, 1999, the Company entered into an agreement to acquire from a nonaffiliated trust for $65.0 million, the FCC licenses and transmission equipment of a radio station broadcasting at 94.1 MHz (KLNO(FM)), serving the Dallas/Fort Worth market (the "Dallas Acquisition"). The Dallas Acquisition closed on September 24, 1999. To fund the acquisition, the Company borrowed $8.0 million from the Credit Facility and used $57.0 million of available cash. The cash was generated from operating activities and proceeds of the June 1999 Offering.

        With the Dallas Acquisition, the Company assumed a time brokerage agreement whereby an unaffiliated party provided the programming to the radio station broadcasting at 94.1 MHz until January 31, 2000. The time brokerage payments ranged from $12,947 to $15,618 per day. Immediately after the time brokerage agreement terminated, the station's programming was converted to a Spanish-language format.

        All of the acquisitions discussed above were accounted for using the purchase method of accounting. Accordingly, the accompanying financial statements include the operations of the acquired businesses from the respective dates of acquisition.

Pending Transactions

        On August 10, 2001, the Company entered into an asset purchase agreement to acquire for $16.0 million the assets of KQMR(FM) (formerly KPXC(FM)), serving the Las Vegas market. On March 22, 2002, the Company closed on the asset purchase of KQMR(FM). The Company used its available cash to fund this acquisition.

        On October 10, 2001, the Company entered into an asset purchase agreement to acquire for $5.0 million the assets of KAJZ(FM), serving the Fresno market (the "Fresno Acquisition"). The Company has $0.3 million cash held in escrow which is included in restricted cash. On March 29, 2002, the Company closed on the Fresno Acquisition. The Company used its available cash to fund this acquisition.

        On December 17, 2001, the Company entered into an asset purchase agreement to acquire for $58.0 million the assets of KARA(FM), serving the San Jose and San Francisco markets (the "San Jose Acquisition"). The Company has $2.9 million cash held in escrow which is included in restricted cash. On April 1, 2002, the Company closed on the San Jose Acquisition. The Company used its available cash to fund this acquisition along with $15.0 million borrowed from the Credit Facility on April 1, 2002.

        The Company's contract for the acquisition of KPTY(FM) in Houston (formerly KOVA(FM)) (the station is currently owned by the Company) provided for an increase in the purchase price in the event that the Federal Communications Commission ("FCC") authorized certain station improvements. In November 2000, the FCC authorized the station improvements. Radio stations KDXX(FM) (formerly KDOS(FM)) and KDXT(FM) in Dallas are also undergoing certain station improvements. As of December 31, 2001, the Company has paid $36.9 million of upgrade costs and additional purchase price (included in deferred charges and other assets) related to these radio stations and none of them were broadcasting with an upgraded signal.

        The radio signal upgrade projects for KPTY(FM) in Houston and KDXX(FM) in Dallas were completed and the stations were broadcasting with their upgraded signals in February 2002. The upgrade costs and additional purchase price of $34.8 million incurred by the Company and included in deferred charges and other assets was reclassified to broadcast licenses in February 2002 and will not be subject to amortization.

        Unaudited pro forma results of operations for the years ended December 31, 2001 and 2000, calculated as though the Houston Acquisition, the Phoenix Acquisition, the KQMR(FM) acquisition,

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the Fresno Acquisition and the San Jose Acquisition had occurred at the beginning of each period, is as follows (in thousands, except per share data):

		Pro forma Year Ended December 31,
		2001		2000
Net revenues		$	247,998	$	249,596
Operating income			43,958		58,644
Net income			28,506		36,732
Net income per common share:
	Basic		0.26		0.34
	Diluted		0.26		0.33

        The pro forma information is presented for comparative purposes only and does not purport to be indicative of what would have occurred had the acquisitions actually been made at such dates, nor is it indicative of future operating results.

Uncompleted Transactions

        On April 14, 1999, the Company entered into an agreement with Z-Spanish Media Corporation ("Z"), to exchange the assets of KRTX(FM), a radio station serving the Houston market, for the assets of KLNZ(FM), a radio station owned by Z serving the Phoenix market. Although the asset exchange received all necessary governmental consents, the transaction did not close. The Company instituted arbitration proceedings. In December 2000, the arbitrators awarded the Company an interim amount of $2.0 million which was received in January 2001 and a final award of $0.4 million received in March 2001. The Company had incurred costs related to this transaction and $0.4 and $1.5 million of awards net of costs was included in other income, net for the years ended December 31, 2001 and 2000, respectively.

3. Investments

        The Company recognized an impairment loss of $0.8 million in 2001 associated with an investment. The fair market value of the investment was determined to be zero based on a review of current financial information. The loss is included in operating expenses for the year ended December 31, 2001.

        In 2001, the Company sold marketable equity securities. Included in other income, net for the year ended December 31, 2001 is a realized gain of $2.5 million from the sale of these securities.

4. Accrued Expenses

        Accrued expenses consist of the following (in thousands):

	December 31,
	2001		2000
Wages, salaries and benefits payable	$	4,193	$	3,453
Commissions payable		5,411		5,283
Advertising payable		1,343		233
Other accrued expenses		5,021		6,361
	$	15,968	$	15,330

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5. Long-Term Obligations

        The following is a summary of long-term obligations outstanding as of December 31, 2001 and 2000 (in thousands):

	2001		2000
Revolving credit facility payable to banks; aggregate commitment of $225.0 million; interest rate based on LIBOR plus an applicable margin as determined by the Company's leverage ratio; no balance was outstanding during 2001; payable through December 2004; secured by 100% of the common stock of the Company's wholly-owned subsidiaries; the Company is required to comply with certain financial and nonfinancial covenants	$	—	$	—
Various loans net of imputed interest of 8.1%, payable in monthly installments through 2001		—		18
Prize awards net of imputed interest (10% to 12%), payable in varying annual installments through 2044		1,424		1,409
		1,424		1,427
Less current portion		6		23
	$	1,418	$	1,404

        The Company's ability to make additional borrowings under the Credit Facility is subject to compliance with certain financial ratios and other conditions set forth in the Credit Facility. As of December 31, 2001, the Company had $225.0 million of credit available. The Credit Facility commitment began reducing on September 30, 1999 and continues quarterly through December 31, 2004.

        Maturities of long-term obligations for the five years subsequent to December 31, 2001 are as follows (in thousands):

Year	Amount
2002	$	6
2003		7
2004		7
2005		8
2006		9
Thereafter		1,387

        Interest paid for the years ended December 31, 2001, 2000 and 1999 amounted to $0.9, $0.7 and $1.7 million, respectively.

6. Commitments and Contingencies

        The Company leases office space and other property under noncancellable operating leases. Terms of the leases vary from two to thirty years. Certain leases have contingent rent clauses whereby rent is increased based on a change in the Consumer Price Index. Various leases have renewal options of five

42

to ten years. Future minimum rental payments under noncancellable operating leases in effect at December 31, 2001 are summarized as follows (in thousands):

Year	Amount
2002	$	8,134
2003		7,785
2004		7,649
2005		7,120
2006		6,477
Thereafter		37,087

        Rent expense for the years ended December 31, 2001, 2000 and 1999 was $8.5, $5.0 and $4.3 million, respectively.

        The Company is subject to legal proceedings and other claims which have arisen in the ordinary course of its business and have not been fully adjudicated. These actions, when ultimately concluded, will not, in the opinion of management, have a material adverse effect upon the financial position, results of operations or liquidity of the Company.

7. Stockholders' Equity

Common Stock

        In 2001, the Company purchased 685,500 shares of its Class A Common Stock at a weighted average price per share of $14.75.

        Clear Channel owns all of the issued and outstanding Class B Common Stock. The rights of the Class A and Class B Common Stock are identical except that the Class B Common Stock has no voting rights, except in certain matters. Shares of Class B Common Stock are convertible into shares of Class A Common Stock, at Clear Channel's option, subject to any necessary governmental consents, including the consent of the FCC.

        On May 25, 2000, the Board of Directors of the Company authorized a two-for-one stock split payable in the form of a stock dividend of one share of common stock for each issued and outstanding share of common stock. The dividend was paid on June 15, 2000 to all holders of common stock at the close of business on June 5, 2000. All financial information related to number of shares, per share amounts, stock option data and market prices of the Company's common stock have been restated to give effect to the split.

Preferred Stock

        The Company is authorized to issue 5,000,000 shares of $.001 par value Preferred Stock. The Preferred Stock may be issued in series, with the rights and preferences of each series established by the Company's Board of Directors.

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8. Operating Expenses

        Operating expenses consist of the following (in thousands):

	Year Ended December 31,
	2001		2000		1999
Rent	$	8,241	$	4,741	$	4,110
General promotion		10,680		7,374		5,110
Music fees and licenses		7,046		6,554		5,529
Special events		8,376		8,866		6,505
Representative commissions		6,445		6,797		5,096
Other operating expenses		34,611		31,409		24,804
	$	75,399	$	65,741	$	51,154

9. Corporate Expenses

        Corporate expenses consist of the following (in thousands):

	Year Ended December 31,
	2001		2000		1999
Travel costs	$	420	$	462	$	361
Outside consulting		503		367		414
Telecommunication costs		398		292		265
Legal and professional fees		777		1,012		1,036
Other corporate expenses		1,620		1,746		782
	$	3,718	$	3,879	$	2,858

10. Income Taxes

        The provision for income tax consists of the following (in thousands):

		Year Ended December 31,
		2001		2000		1999
Current:
	Federal	$	9,117	$	15,552	$	12,618
	State		1,205		3,548		3,189
Total current tax			10,322		19,100		15,807
Deferred:
	Federal		8,102		6,640		7,146
	State		1,518		1,320		860
Total deferred tax			9,620		7,960		8,006
Total income tax		$	19,942	$	27,060	$	23,813

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        The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at December 31, 2001 and 2000 are as follows (in thousands):

		2001		2000
Deferred tax assets:
	Net operating losses	$	922	$	922
	Other intangible assets		1,871		1,873
	Long-term obligations—prize awards		556		547
	Allowance for doubtful accounts receivable		1,347		1,260
	Other		749		309
Total deferred tax assets			5,445		4,911
Deferred tax liabilities:
	Broadcast licenses		115,053		107,535
	Property and equipment		2,492		1,977
	Other		7,386		7,351
Total deferred tax liabilities			124,931		116,863
Net deferred tax liabilities		$	119,486	$	111,952

        The reconciliation of income tax expense computed at the federal statutory tax rate to the Company's actual income tax expense is as follows (in thousands):

	Year Ended December 31,
	2001		2000			1999
Federal income tax at statutory rate	$	17,819	$	24,007		$	20,296
State income taxes, net of federal benefit		1,770		3,163			2,632
Nondeductible and non-taxable items, net		353		(110	)		885
	$	19,942	$	27,060		$	23,813

        As of December 31, 2001, the Company had tax net operating loss carryforwards for state tax purposes of approximately $15.0 million which expire in years 2005 through 2021 if not used.

        Income taxes paid for the years ended December 31, 2001, 2000 and 1999 amounted to $8.0, $22.9 and $13.3 million, respectively.

11. Earnings Per Share

        The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations (in thousands):

		Year Ended December 31,
		2001		2000		1999
Numerator:
	Net income	$	30,969	$	41,531	$	34,176
Denominator:
	Denominator for basic earnings per share		108,872		108,858		101,566
	Effect of dilutive securities:
	Stock options		733		1,514		1,347
	Employee Stock Purchase Plan		12		16		14
Denominator for diluted earnings per share			109,617		110,388		102,927

45

        Stock options which were excluded from the computation of diluted earnings per share due to their antidilutive effect amounted to 1.7 and 0.6 million shares for the years ended December 31, 2001 and 2000 and zero shares for the year ended December 31, 1999.

12. Retirement Plan

        The Company has a defined contribution retirement savings plan (the "Plan"). The Plan covers all employees who have reached the age of 18 years and have been employed by the Company for at least one year. The Company matches participants' contributions to the Plan in an amount not to exceed $1,500. The Company, at the sole discretion of the Board of Directors, may make additional supplemental contributions to the Plan. The Company's expenses related to the Plan for the years ended December 31, 2001, 2000 and 1999 amounted to $0.6, $0.6 and $0.3 million, respectively.

13. Stock Options

        In May 1997, the stockholders of the Company approved a stock incentive plan ("Long-Term Incentive Plan"), to be administered by the Board of Directors or by a sub-committee of the Board of Directors. The maximum number of shares of Class A Common Stock that may be the subject of awards at any one time shall be ten percent of the total number of shares of Class A Common Stock outstanding. Options granted under the Long-Term Incentive Plan have a ten-year term and vest over various periods up to five years.

        The stockholders of the Company also approved an Employee Stock Purchase Plan in May 1997. Under the plan, shares of the Company's common stock may be purchased at six-month intervals at 85% of the lower of the fair market value on the first or the last day of each six-month period. Employees may purchase shares having a value not exceeding 15% of their gross compensation during an offering period. During 2001, 2000 and 1999, employees purchased 55,980, 37,768 and 43,016 common shares at average prices of $23.35, $29.64 and $19.25, respectively.

        The Company granted 844,000, 2,169,400 and 975,500 stock options in 2001, 2000 and 1999, respectively, to various employees of the Company under its Long-Term Incentive Plan. The exercise prices of options outstanding at December 31, 2001 ranged from $8.22 to $50.57 per share, the market prices at dates of grant.

46

        The following is a summary of stock options outstanding and exercisable for the years ended December 31, 1999, 2000 and 2001 (in thousands, except per share data):

		Number Of Shares		Weighted Average Exercise Price Per Share
Stock Options Outstanding:
	Options outstanding at December 31, 1998	2,082		14.08
	Granted	974		24.21
	Forfeited	(104	)	17.28
	Options outstanding at December 31, 1999	2,952		17.31
	Granted	2,169		27.23
	Forfeited	(221	)	25.26
	Exercised	(118	)	11.75
	Options outstanding at December 31, 2000	4,782		21.58
	Granted	844		21.39
	Forfeited	(390	)	23.78
	Exercised	(222	)	12.50
	Options outstanding at December 31, 2001	5,014		21.72
Exercisable Stock Options:
	Options exercisable at December 31, 1998	50		13.07
	Vested	19		18.21
	Options exercisable at December 31, 1999	69		14.49
	Vested	623		14.09
	Exercised	(118	)	11.75
	Options exercisable at December 31, 2000	574		14.62
	Vested	1,082		20.16
	Exercised	(222	)	12.50
	Options exercisable at December 31, 2001	1,434		18.15

        Pro forma information regarding net income and net income per share is required by SFAS 123, and has been determined as if the Company had accounted for its employee stock options under the fair value method of that Statement. The weighted average fair value at date of grant for options granted in the years ended December 31, 2001, 2000 and 1999 was $12.62, $16.46 and $13.32 per share, respectively. The fair value of these options was estimated on the date of the grant using the Black-Scholes option pricing model with the following assumptions:

	2001	2000	1999
Risk-free interest rate	4.57%	5.96%	6.11%
Dividend yield	0.00%	0.00%	0.00%
Volatility factor	59.42%	57.82%	50.39%
Weighted average expected life	6 years	6 years	6 years

47

        For purposes of pro forma disclosures, the estimated fair value of the options is expensed over the options' vesting period. Pro forma results of operations calculated as though the Company had adopted the provisions of SFAS 123 are as follows (in thousands, except per share data):

		Year Ended December 31,
		2001		2000		1999
Net income		$	22,083	$	33,721	$	31,389
Net income per common share:
	Basic		0.20		0.31		0.31
	Diluted		0.20		0.31		0.30

        The following is a summary of stock options outstanding and exercisable at December 31, 2001:

Range of Exercise Prices Per Share	Shares Under Option (in thousands)	Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life (in years)
Stock Options Outstanding:
$8.22 - $11.75	848	$	11.70	5.4
12.34 - 18.13	666		17.57	6.7
18.75 - 26.00	2,420		21.03	8.5
27.70 - 41.38	1,072		33.57	8.3
41.84 - 50.57	8		48.38	8.0
	5,014
Exercisable Stock Options:
$8.22 - $11.75	569	$	11.67	5.4
12.34 - 18.13	268		17.20	6.7
18.75 - 26.00	394		20.51	8.7
32.25 - 41.38	203		32.96	8.4
	1,434

14. Quarterly Results of Operations (Unaudited)

        The following is a summary of the quarterly results of operations for the years ended December 2001 and 2000 (in thousands, except per share data):

		First Quarter		Second Quarter		Third Quarter		Fourth Quarter
Year ended December 31, 2001:
	Net revenues	$	47,796	$	65,896	$	65,801	$	61,282
	Net income		3,618		10,246		8,492		8,613
	Net income per common share—basic and diluted		0.03		0.09		0.08		0.08
	Comprehensive income		3,618		11,319		7,837		8,195
Year ended December 31, 2000:
	Net revenues	$	46,539	$	64,771	$	64,885	$	61,359
	Net income		5,219		12,054		13,111		11,147
	Net income per common share — basic and diluted		0.05		0.11		0.12		0.10
	Comprehensive income		5,219		12,054		13,111		11,147

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

        Not applicable.

49

PART III.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

        The information required by Item 10 with respect to the directors, nominees and executive officers of the Company is incorporated by reference to the information set forth under the caption "Election of Directors," "Executive Compensation and Other Matters" and "Section 16(a) Beneficial Ownership Reporting Compliance" in the Company's Definitive Schedule 14A Proxy Statement to be filed with the Securities and Exchange Commission not later than 120 days after the Company's fiscal year-end.

ITEM 11. EXECUTIVE COMPENSATION

        The information required by Item 11 is incorporated by reference to the information set forth under the caption "Executive Compensation and Other Matters" in the Company's Definitive Schedule 14A Proxy Statement to be filed with the Securities and Exchange Commission not later than 120 days after the Company's fiscal year-end.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        The information required by Item 12 is incorporated by reference to the information set forth under the captions "Security Ownership of Certain Beneficial Owners and Management" in the Company's Definitive Schedule 14A Proxy Statement to be filed with the Securities and Exchange Commission not later than 120 days after the Company's fiscal year-end.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

        The information required by Item 13 is incorporated by reference to the information set forth under the caption "Certain Transactions" in the Company's Definitive Schedule 14A Proxy Statement to be filed with the Securities and Exchange Commission not later than 120 days after the Company's fiscal year-end.

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PART IV.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)

1.

Financial Statements

The following financial statements have been filed under Item 8 of this report:

Independent Auditors' Report

Consolidated Balance Sheets as of December 31, 2001 and 2000

Consolidated Statements of Income and Comprehensive Income for the Years Ended December 31, 2001,
2000 and 1999

Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 2001, 2000 and 1999

Consolidated Statements of Cash Flows for the Years Ended December 31, 2001, 2000 and 1999

Notes to Consolidated Financial Statements

2.

Financial Statement Schedules

Hispanic Broadcasting Corporation and Subsidiaries
Valuation and Qualifying Accounts
For the years ended December 31, 2001, 2000 and 1999
(in thousands)

				Additions
Description		Balance at beginning of period		Charged to beginning of expense		Charged to other accounts		Accounts written off		Balance at end of period
For the year ended December 31, 2001:
	Allowance for Doubtful Accounts	$	3,181	$	4,289	$	52	$	4,064	$	3,458
For the year ended December 31, 2000:
	Allowance for Doubtful Accounts		1,855		3,757		—		2,431		3,181
For the year ended December 31, 1999:
	Allowance for Doubtful Accounts		2,301		1,869		283		2,598		1,855

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3.

Exhibits

Exhibit Number	Description
3.1	Second Amended and Restated Certificate of Incorporation of the Company dated February 14, 1997 (incorporated by reference to Exhibit 3.1 to the Company's Form 8-K filed March 3, 1997).
3.2	Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of the Company dated June 4, 1998 (incorporated by reference to Exhibit 3.1 to the Company's Form 10-Q filed on November 11, 1998).
3.3	Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of the Company dated June 8, 1999 (incorporated by reference to Exhibit 3.3 to the Company's Form 10-Q filed on August 12, 1999).
3.4	Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of the Company dated May 25, 2000 (incorporated by reference to Exhibit 3.4 to the Company's Form 10-Q filed on August 11, 2000).
3.5	Amended and Restated Bylaws of the Company (incorporated by reference to the Company's Registration Statement on Form S-1 (Registration No. 33-78370) filed on April 29, 1994, as amended ("Company's S-1")).
10.1	Stock Option Plan (incorporated by reference to Exhibit 10.4 of Company's S-1).
10.2	Form of Indemnification Agreement (incorporated by reference to Exhibit 10.22 of Company's S-1).
10.3	Registration Rights Agreement, dated February 14, 1997, by and among the Company, McHenry T. Tichenor, Sr., McHenry T. Tichenor, Jr., Warren W. Tichenor, William E. Tichenor, Jean T. Russell, McHenry T. Tichenor, Jr., as Custodian for David T. Tichenor, Alta Subordinated Debt Partners III, L.P., Prime II Management, LP, PrimeComm, LP, Ricardo A. del Castillo, Jeffrey Hinson and David D. Lykes (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed March 3, 1997).
10.4	Employment Agreement, dated February 14, 1997, by and between the Company and McHenry T. Tichenor, Jr. (incorporated by reference to Exhibit 10.2 to the Company's Form 8-K filed March 3, 1997).
10.5	Stockholders Agreement, dated February 14, 1997, by and among the Company and each of the stockholders listed on the signature pages thereto (incorporated by reference to Exhibit 10.4 to Schedule 13D of McHenry T. Tichenor, Jr. filed February 14, 1997).
10.6	Registration Rights Agreement, dated February 14, 1997, by and among the Company and Clear Channel Communications, Inc. (incorporated by reference to Exhibit 10.4 to the Company's Form 8-K filed March 3, 1997).
10.7	Credit Agreement among the Company and its subsidiaries, The Chase Manhattan Bank, as administrative agent, and certain other lenders, dated February 14, 1997 without Exhibits (Schedules omitted) (incorporated by reference to Exhibit 10.5 to the Company's Form 8-K filed on May 14, 1997).

52

10.8	Credit Agreement Amendment No. 1 among the Company and its subsidiaries, the Chase Manhattan Bank, as administrative agent, and certain other lenders, dated May 6, 1999 without Exhibits (Schedules omitted) (incorporated by reference to Exhibit 10.12 to the Company's Form 10-K filed on March 30, 2000).
10.9	Hispanic Broadcasting Corporation Long-Term Incentive Plan (incorporated by reference to Appendix A to the Company's Definitive Proxy Statement filed on April 24, 1997 (Commission File No. 000-24516)).
10.10	Hispanic Broadcasting Corporation Amended and Restated 1997 Employee Stock Purchase Plan (incorporated by reference to the Company's Form S-8 filed on December 31, 1997).
10.11	Asset Purchase Agreement, dated April 24, 2001, by and between KQQK License, Inc., KQQK Inc., HBC License Corporation and HBC Broadcasting Texas, L.P.
10.12	Asset Purchase Agreement, dated September 4, 2001, by and between Big City Radio—Phoenix, L.L.C., Big City Radio, Inc., HBC Phoenix, Inc. and HBC License Corporation.
10.13	Employment, Nonsolicitation and Arbitration Agreement, dated March 1, 2001, by and between HBC Management Company, Inc. and Gary Stone (incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q filed on May 14, 2001).
10.14	Asset Purchase Agreement, dated August 10, 2001, by and between Claire B. Benezra, HBC License Corporation and HBC-Las Vegas, Inc.
10.15	Asset Purchase Agreement, dated October 10, 2001, by and between San Joaquin Radio Company, LLC and Hispanic Broadcasting Corporation.
10.16	Asset Purchase Agreement, dated December 17, 2001, by and between Empire Broadcasting Corporation and Hispanic Broadcasting Corporation.
10.17	Employment, Noncompetition and Arbitration Agreement, dated November 5, 2001, by and between HBC Management Company, Inc. and Jeffrey T. Hinson.
11	Statement Regarding Computation of Per Share Earnings.
12.1	Statement Regarding Computation of Ratio of Earnings to Fixed Charges.
12.2	Statement Regarding Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends.
21	Subsidiaries of the Company.
23	Consent of KPMG LLP.
24	Power of Attorney (included on Signature Page).

        Registrant agrees to furnish supplementally a copy of any omitted schedules to the Commission upon request.

(b)

Reports on Form 8-K

        None.

53

SIGNATURES

        Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on April 1, 2002.

HISPANIC BROADCASTING CORPORATION
By:	/s/  MCHENRY T. TICHENOR, JR. McHenry T. Tichenor, Jr. President and Chief Executive Officer

        Each person whose signature appears below authorizes McHenry T. Tichenor, Jr. and Jeffrey T. Hinson, or either of them, each of whom may act without joinder of the other, to execute in the name of each such person who is then an officer or director of the Registrant and to file any amendments to this annual report on Form 10-K necessary or advisable to enable the Registrant to comply with the Securities Exchange Act of 1934, as amended, and any rules, regulations and requirements of the Securities and Exchange Commission in respect thereof, which amendments may make such changes in such report as such attorney-in-fact may deem appropriate.

        Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Name	Title	Date
/s/  MCHENRY T. TICHENOR, JR. McHenry T. Tichenor, Jr.	President, Chief Executive Officer and Chairman of the Board of Directors	April 1, 2002
/s/  JEFFREY T. HINSON Jeffrey T. Hinson	Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)	April 1, 2002
/s/  DAVID P. GEROW David P. Gerow	Vice President, Controller and Secretary (Principal Accounting Officer)	April 1, 2002
/s/  MCHENRY T. TICHENOR McHenry T. Tichenor	Director	April 1, 2002
/s/  ROBERT W. HUGHES Robert W. Hughes	Director	April 1, 2002
/s/  JAMES M. RAINES James M. Raines	Director	April 1, 2002
/s/  ERNESTO CRUZ Ernesto Cruz	Director	April 1, 2002

54

QuickLinks

DOCUMENTS INCORPORATED BY REFERENCE
HISPANIC BROADCASTING CORPORATION INDEX TO FORM 10-K
PART I.
PART II.
INDEPENDENT AUDITORS' REPORT
HISPANIC BROADCASTING CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands except share information) ASSETS
HISPANIC BROADCASTING CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands except per share data)
HISPANIC BROADCASTING CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (in thousands except share information)
HISPANIC BROADCASTING CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
HISPANIC BROADCASTING CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PART III.
PART IV.
Hispanic Broadcasting Corporation and Subsidiaries Valuation and Qualifying Accounts For the years ended December 31, 2001, 2000 and 1999 (in thousands)
SIGNATURES

EX-10.11

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Exhibit 10.11

ASSET PURCHASE AGREEMENT

        THIS ASSET PURCHASE AGREEMENT is made as of the 24^th day of April, 2001, by and among KQQK License, Inc. ("Licensee"), KQQK Inc. ("KQQK and together with Licensee, the "Seller"), HBC License Corporation ("HBC License") and HBC Broadcasting Texas, L.P. ("HBC Texas" and together with HBC License, the "Purchaser").

W I T N E S S E T H:

        WHEREAS, Licensee is the licensee of radio station KQQK(FM) (the "Station"), licensed to Galveston, Texas and authorized by the Federal Communications Commission (the "Commission" or "FCC") to operate at 106.5 MHz, and KQQK owns the assets which are used in the operation of the Station; and

        WHEREAS, the Seller desires to sell to Purchaser, and Purchaser desires to purchase from the Seller, certain of the radio station properties and assets relating to the Station as described herein under the terms and conditions herein set forth;

        NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, the parties hereto agree as follows:

        1.    PURCHASE AND SALE OF ASSETS.

        1.1  Purchase and Sale of Assets.    Subject to the conditions set forth in this Agreement, at the Closing (as defined hereinafter), the Seller shall assign, transfer, convey and deliver to Purchaser, and Purchaser shall purchase from the Seller, all right, title and interest in and to the following assets relating to the Station (the "Purchased Assets"), free and clear of all liens, security interests, charges, encumbrances and rights of others (other than liens and charges for which a proration adjustment is made pursuant to Section 15.2 hereof):

        (a)  All licenses, construction permits or authorizations issued by or pending before the FCC or any other governmental authority for use in the operation of the Station that are set forth on Schedule 1.1(a) attached hereto, together with any and all renewals, extensions and modifications thereof (the "Governmental Licenses");

        (b)  The tower site location identified on Schedule 1.1(b) hereto near Hitchcock, Texas (Galveston County), together with all broadcast towers and other improvements, fixtures and structures thereon and all rights and appurtenances pertaining thereto, together with replacements thereof and additions thereto made between the date hereof and the Closing (the "Transmitter Site");

        (c)  All antennas, main and back-up transmitters and generators, STL's, data links for transmitter telemetry, wireless microphones and other tangible personal property located, or otherwise intended for use, at the Transmitter Site, as more particularly described on Schedule 1.1(c) hereto; and

        (d)  Unless as may be otherwise required by law, all materials maintained in the FCC public inspection file relating to the Station, technical data, political advertising records and all other books and records related solely to the Purchased Assets, such as property tax records, correspondence with and documents pertaining to governmental authorities and similar third parties regarding the Purchased Assets (the "Business Records").

        The foregoing notwithstanding, in no event shall the Purchased Assets be deemed to include (i) the cash and cash equivalents of the Seller or the Station (except for any normal and customary deposits with respect to the Purchased Assets), (ii) any accounts receivable, notes receivable or other receivables of the Seller (including tax refunds), (iii) any of the Seller's or Station's call letters (which Purchaser acknowledges will be moved by Seller to a new frequency), internet addresses, programming format or other intellectual property (other than the Business Records), (iv) any studio or office equipment and fixtures, vehicles, promotional materials, tapes and record libraries and similar items in

respect of the Station, (v) the Seller's corporate seal, minute books, charter documents, corporate stock record books and other books and records that pertain to the organization of Seller, (vi) securities of any kind owned by Seller, (vii) insurance contracts or proceeds thereof or (viii) claims arising out of acts occurring before the Closing Date.

        1.2  Assumed Contracts.    At the Closing, the Purchaser shall assume the specified contractual obligations of the Station listed on Schedule 1.2 hereto (the "Assumed Contracts"), and the Purchaser agrees to pay and perform the Assumed Contracts after the Closing Date. Except as specifically set forth on such Schedule 1.2, Purchaser does not assume and shall in no event be liable for any debt, obligation, responsibility or liability of the Station or Seller, including without limitation, employee obligations, taxes, accounts payable and time sales and barter obligations of the Station.

        2.    CONSIDERATION; CLOSING.

        2.1  Purchase Price.    The consideration to be received by the Seller in exchange for the Purchased Assets shall be $80 million, which shall be paid in full to Seller by wire transfer at the Closing.

        2.2  Time of Closing.

        (a)  A closing (the "Closing") for the sale and purchase of the Purchased Assets shall be held at the offices of the Purchaser in Dallas, Texas (or such other place as may be agreed upon by the parties in writing). The Closing shall occur on such date (the "Closing Date") that is the 7th day after the FCC Order (defined below). The Closing shall be deemed to be effective as of 12:01 a.m. on the Closing Date.

        (b)  In order to consummate the transfer of the Purchased Assets, Seller and Purchaser agree to use their reasonable best efforts to file, within three business days after the date hereof, an assignment of license application (the "FCC Application") requesting FCC consent to the assignment from the Licensee to HBC License of all Governmental Licenses relating to the operation of the Station. The parties agree that the FCC Application will be prosecuted with best reasonable efforts, in good faith and with due diligence. The parties agree to use their reasonable best efforts to file additional information or amendments requested by the FCC orally or in writing within five business days after such request and, in any event, to commence preparation of such additional information or amendments immediately upon request and to complete and file the same with the FCC as rapidly as practical. Each party will be solely responsible for the expenses incurred by it in the preparation, filing and prosecution of the FCC Application (it being understood that the parties will bear equally the FCC filing fee). As used herein, the term "FCC Order" shall mean that the FCC staff has granted or given its consent, without any condition materially adverse to Purchaser or Seller, to the assignment of the Governmental Licenses; and the term "Final Order" shall mean that the FCC Order shall have become final, that the time period for filing any protests, requests for stay, reconsideration by the FCC, petitions for rehearing or appeal of such order shall have expired, and that no protest, request for stay, reconsideration by the FCC, petition for rehearing or appeal of such order shall be pending.

        (c)  To the extent required by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder (the "HSR Act"), the parties further agree to use their reasonable best efforts to make any necessary filings with the Federal Trade Commission and Department of Justice (collectively the "DOJ") under the HSR Act, within five business days after the filing of the FCC Application, with appropriate governmental agencies and shall thereafter promptly respond to all requests received from such agencies for additional information or documentation. The fees associated with any filings made pursuant to the HSR Act shall be paid equally by the Purchaser and the Seller.

        2.3  Closing Procedure.    At the Closing, the Seller shall deliver to Purchaser such bills of sale, instruments of assignment, transfer and conveyance and similar documents as Purchaser shall reasonably request. Against such delivery, Purchaser shall (i) issue and deliver to Seller the purchase

2

price in accordance with Section 2.1 above and (ii) execute and deliver the assumption agreements with respect to the Assumed Contracts as are contemplated by Section 1.2 hereof. Each party will cause to be prepared, executed and delivered all other documents required to be delivered by such party pursuant to this Agreement and all other appropriate and customary documents as another party or its counsel may reasonably request for the purpose of consummating the transactions contemplated by this Agreement. All actions taken at the Closing shall be deemed to have been taken simultaneously at the time the last of any such actions is taken or completed.

        2.4  Allocation of Purchase Price.    The Purchase Price shall be allocated among the Purchased Assets in a manner as mutually agreed between the parties based upon an appraisal prepared by Bond & Pecaro (whose fees shall be paid by Purchaser). Seller and Purchaser agree to use the allocations determined pursuant to this Section 2.4 for all tax purposes, including without limitation, those matters subject to Section 1060 of the Internal Revenue Code of 1986, as amended.

        3.    REPRESENTATIONS AND WARRANTIES OF THE SELLER.

        The Seller hereby represents and warrants to the Purchaser, as follows:

        3.1  Organization; Good Standing.    Each of KQQK and Licensee is a corporation duly organized, validly existing and in good standing under the laws of the state of Texas, and has all requisite corporate power and authority to own and lease its properties and carry on its business as currently conducted.

        3.2  Due Authorization.    Subject to the FCC Order, the Seller has full power and authority to enter into and perform this Agreement and to carry out the transactions contemplated hereby. The Seller has taken all necessary corporate action to approve the execution and delivery of this Agreement and the transactions contemplated hereby. This Agreement constitutes the legal, valid and binding obligation of the Seller, enforceable against it in accordance with its terms, except as may be limited by the availability of equitable remedies or by applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally.

        3.3  Execution and Delivery.    Neither the execution and delivery by the Seller of this Agreement nor the consummation by it of the transactions contemplated hereby will: (i) conflict with or result in a breach of the Articles of Incorporation or bylaws of Seller (ii) subject to the FCC Order, violate any statute, law, rule or regulation or any order, writ, injunction or decree of any court or governmental authority, which violation, either individually or in the aggregate, might reasonably be expected to have a material adverse effect on Purchaser's ownership of the Purchased Assets; or (iii) violate or conflict with or constitute a default under (or give rise to any right of termination, cancellation or acceleration under), or result in the creation of any lien on any of the Purchased Assets pursuant to, any material agreement, indenture, mortgage or other instrument to which the Seller is a party or by which it or its assets may be bound or affected.

        3.4  Governmental Consents.    No approval, authorization, consent, order or other action of, or filing with, any governmental authority or administrative agency is required in connection with the execution and delivery by the Seller of this Agreement or the consummation of the transactions contemplated hereby or thereby, other than those of the FCC or under the HSR Act.

        3.5  Title to Personal Property Assets.    Except for leased property, the Seller is the sole and exclusive legal owner of all right, title and interest in, and has good and marketable title to, all of the Purchased Assets constituting personal property, free and clear of liens, claims and encumbrances except (i) liens for taxes not yet payable and (ii) the Assumed Contracts.

        3.6  Transmitter Site.

        (a)  Seller has good, indefeasible and record title to the Transmitter Site, in fee simple absolute, and there are no outstanding liens or encumbrances with respect to the Transmitter Site or any part

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thereof, except as set forth on Schedule 3.6. Seller has paid or will pay (or through prorations be assessed) at Closing all taxes, charges and assessments (special or otherwise) required to be paid to any taxing authority which could in any way now or hereafter constitute a lien against the Transmitter Site or any part thereof (except for taxes and assessments for the current year). Seller has not received any notice from any taxing authority or governmental agency asserting that it has failed to file or have improperly filed any tax return or report in respect of any taxes now owing by it (except current taxes and assessments not yet delinquent) which could in any way now or hereafter constitute a lien against the Transmitter Site or any part thereof; and no action or proceeding is now pending by a governmental agency or authority for the assessment or collection of such taxes, charges or assessments against Seller. There are now in full force and effect duly issued certificates of occupancy permitting the Transmitter Site and improvements located thereon to be legally used and occupied as the same are now constituted. The Transmitter Site has permanent rights of access to dedicated public highways, and the Seller has obtained all necessary approvals of the FAA in connection with the operation of the Transmitter Site. Except as set forth on Schedule 3.6, there is not (i) any claim of adverse possession or prescriptive rights which may materially and adversely affect the Transmitter Site, (ii) any structure located on the Transmitter Site that materially encroaches on or over the boundaries of neighboring or adjacent properties; or (iii) any structure of any other party which materially encroaches on or over the boundaries of the Transmitter Site. To the knowledge of Seller, the Transmitter Site is not located in a flood plain, flood hazard area, wetland or lakeshore erosion area within the meaning of any law. No public improvements have been commenced relating to the Transmitter Site, and to the knowledge of Seller, none are planned which in either case may result in special assessments against or otherwise materially and adversely affect the Transmitter Site.

        (b)  Seller has not received any notice of, and has no knowledge of, any material violation of any zoning, building, health, fire, water use or similar statute, ordinance, law, regulation or code in connection with the Transmitter Site. To the knowledge of Seller, no fact or condition exists which would result in the termination or impairment of access of the Station to the Transmitter Site or discontinuation of necessary sewer, water, electrical, gas, telephone or other utilities or services.

        (c)  To Seller's knowledge (i) no hazardous or toxic material (as hereinafter defined) exists in any structure located on, or exists on or under the surface of, the Transmitter Site which is, in any case, in material violation by Seller of applicable environmental law; (ii) no portion of the Transmitter Site has been used as a landfill or for storage or landfill of hazardous or toxic materials; and (iii) there are not any underground storage tanks that are currently located on or that have been removed from the Transmitter Site. For purposes of this Section, "hazardous or toxic material" shall mean waste, substance, materials, smoke, gas or particulate matter designated as hazardous, toxic or dangerous under any environmental law. For purposes of this Section, "environmental law" shall include the Comprehensive Environmental Response Compensation and Liability Act, the Clean Air Act, the Clean Water Act and any other applicable federal, state or local environmental, health or safety law, rule or regulation relating to or imposing liability or standards concerning or in connection with hazardous, toxic or dangerous waste, substance, materials, smoke, gas or particulate matter.

        3.7  Condition of Assets.    All of the Purchased Assets viewed as a whole and not on an asset by asset basis are in good condition and working order, ordinary wear and tear excepted, and are suitable for the uses for which intended, free from any known defects except such minor defects that do not interfere with the continued use thereof.

        3.8  Governmental Licenses.    Schedule 1.1(a) lists and accurately describes all of the Governmental Licenses necessary for the lawful ownership and operation of the Station and the conduct of their businesses, except where the failure to hold such Governmental License would not have a material adverse effect on the Station. The Seller has furnished to Purchaser true and accurate copies of all of the Governmental Licenses. Each such Governmental License is in full force and effect and is valid under applicable federal, state and local laws; the Station is being operated in compliance in all

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material respects with the Communications Act of 1934, as amended, and all rules, regulations and policies of the FCC; and to the knowledge of the Seller, no event has occurred which (whether with or without notice, lapse of time or the happening or occurrence of any other event) is reasonably likely to result in the revocation or termination of any Governmental License or the imposition of any restriction of such a nature as might adversely affect the ownership or operation of the Station as now conducted, except for proceedings of a legislative or rule-making nature intended to affect the broadcasting industry generally. The Station, its physical facilities, electrical and mechanical systems and transmitting and studio equipment are being operated in all material respects in accordance with the specifications of the Governmental Licenses. The Governmental Licenses are unimpaired by any act or omission of the Seller or any of the Seller's officers, directors or employees and the Seller has fulfilled and performed all of its obligations with respect to the Governmental Licenses and has full power and authority thereunder. No application, action or proceeding is pending for the renewal or modification of any of the Governmental Licenses, except as described on Schedule 1.1(a). No event has occurred which, individually or in the aggregate, and with or without the giving of notice or the lapse of time or both, would constitute ground for revocation thereof and would have a materially adverse effect on the business or financial condition of the Station.

        3.9  Reports.    As of the Closing Date, the Seller will have duly filed all reports required to be filed by law or applicable rule, regulation, order, writ or decree of any court, governmental commission, body or instrumentality and has made payment of all charges and other payments, if any, shown by such reports to be due and payable, except where the failure to so file or make payment would not have a material adverse effect upon the operations of the Station. All reports required to be filed by the Seller with the FCC with respect to the Station will have been filed as of the Closing Date, except where the failure to so file would not materially and adversely affect the business, operations, properties, assets or conditions (financial or otherwise) of the Station or which challenges the validity or propriety of any of the transactions contemplated by this Agreement. Such reports and disclosures will be complete and accurate in all material respects.

        3.10 Taxes.    As of the Closing Date, (i) all tax reports and returns required to be filed by or relating to the Purchased Assets or operations of the Station (including sales, use, property and employment taxes) will have been filed with the appropriate federal, state and local governmental agencies, and there have been paid all taxes, penalties, interest, deficiencies, assessments or other charges due as reflected on the filed returns or claimed to be due by such federal, state or local taxing authorities (other than taxes, deficiencies, assessments or claims which are being contested in good faith and which in the aggregate are not material); (ii) Seller will not have received any written notice of any examinations or audits pending or unresolved examinations or audit issues with respect to the Seller's federal, state or local tax returns; (iii) all additional taxes, if any, assessed as a result of such examinations or audits shall have been paid; and (iv) to Seller's knowledge, there will be no pending claims or proceedings relating to, or asserted for, taxes, penalties, interest, deficiencies or assessments against the Purchased Assets.

        3.11 Litigation.    There is no order of any court, governmental agency or authority and no action, suit, proceeding or investigation, judicial, administrative or otherwise that is pending or, to Seller's knowledge, threatened against or affecting the Station which, if adversely determined, might materially and adversely affect the business, operations, properties, assets or conditions (financial or otherwise) of the Station or which challenges the validity or propriety of any of the transactions contemplated by this Agreement.

        3.12 Contracts and Agreements.    The Station is not in default with respect to any of the contracts contained on Schedule 1.2 hereto, and, as of the Closing Date, the Station will have paid all sums and performed all obligations under such contracts which are required to be paid or performed prior to the Closing Date. True and complete copies of such contracts have been delivered to Purchaser on or prior to the date hereof.

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        3.13 Business Records.    The Seller has, and after the Closing, Purchaser will have, the right to use the Business Records included in the Purchased Assets, free and clear of any royalty or other payment obligations.

        3.14 Third Party Consents.    The only consents from any person or entity which are required to be obtained by Seller in connection with the execution and delivery by Seller of this Agreement and the consummation of the transactions contemplated hereby are set forth on Schedule 3.14 (the "Third Party Consents"); and all such Third Party Consents have been so obtained.

        3.15 Finders and Brokers.    Except for Houlihan Lokey Howard & Zukin and Gary Stevens and Associates, no person has as a result of any agreement entered into by the Seller any valid claim against any of the parties hereto for a brokerage commission, finder's fee or other like payment.

        4.    REPRESENTATIONS AND WARRANTIES OF PURCHASER.

        Purchaser hereby represents and warrants to the Seller as follows:

        4.1  Organization and Good Standing.    Purchaser is a limited partnership duly organized, validly existing and in good standing under the laws of Texas and has all requisite power and authority to own and lease its properties and carry on its business as currently conducted.

        4.2  Due Authorization.    Subject to the FCC Order, Purchaser has full power and authority to enter into this Agreement and to carry out its obligations hereunder. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of Purchaser. This Agreement has been duly executed and delivered by Purchaser and constitutes the legal, valid and binding obligation of Purchaser, enforceable against it in accordance with its respective terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally or general equitable principles.

        4.3  Execution and Delivery.    Neither the execution and delivery by Purchaser of this Agreement nor the consummation of the transactions contemplated hereby will: (i) conflict with or result in a breach of the agreement of limited partnership of Purchaser; (ii) subject to the FCC Order, violate any law, statute, rule or regulation or any order, writ, injunction or decree of any court or governmental authority; or (iii) violate or conflict with or constitute a default under (or give rise to any right of termination, cancellation or acceleration under) any indenture, mortgage, lease, contract or other instrument to which Purchaser is a party or by which it is bound or affected.

        4.4  Consents.    No consent, approval, authorization, license, exemption of, filing or registration with any court, governmental authority, commission, board, bureau, agency or instrumentality, domestic or foreign, is required by Purchaser in connection with the execution and delivery of this Agreement or the consummation by it of any transaction contemplated hereby, other than the consent of the FCC or under the HSR Act. No approval, authorization or consent of any other third party is required in connection with the execution and delivery by Purchaser of this Agreement and the consummation of the transactions contemplated hereby, except as may have been previously obtained by Purchaser. Purchaser warrants that it is legally qualified to become a licensee of the Station and is aware of no impediment to the approval by the FCC of the assignment of the Governmental Licenses to Purchaser.

        4.5  Finders and Brokers.    No person has as a result of any agreement entered into by the Purchaser any valid claim against any of the parties hereto for a brokerage commission, finder's fee or other like payment.

        4.6  Purchaser's Qualification.    The Purchaser is in all material respects qualified legally, financially and otherwise to be the licensee of the Station, and has or shall have sufficient resources to pay in full all amounts due to the Seller under this Agreement when such amounts are due.

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        5.    CERTAIN COVENANTS AND AGREEMENTS.

        5.1  Consummation of the Transaction.

        (a)  Each of the Seller and Purchaser shall take all reasonable action necessary to consummate the transactions contemplated by this Agreement (including not only the sale and purchase of the Purchased Assets but also Seller's continued exclusive use after the Closing of the "KQQK" call letters) and will use all necessary and reasonable means at its disposal to obtain (and cooperate with the other party in obtaining) all necessary approvals of governmental authorities and Third Party Consents required to enable it to consummate the transactions contemplated by this Agreement. Except as otherwise provided herein, each of the Seller and Purchaser acknowledges and agrees that it shall pay all costs, fees and expenses incurred by it in obtaining such necessary consents and approvals. Each party shall make all filings, applications, statements and reports to all governmental agencies or entities which are required to be made prior to the Closing Date by or on its behalf pursuant to any statute, rule or regulation in connection with the transactions contemplated by this Agreement, and copies of all such filings, applications, statements and reports shall be provided to the other.

        (b)  If the FCC determines that the transactions contemplated hereby or a portion thereof are inconsistent or violative of FCC rules or regulations, or if the DOJ fails to grant the required approvals under the HSR Act, the parties agree that they will negotiate in good faith to amend, modify or restructure the transactions contemplated hereby so as to be consistent with FCC rules and regulations and/or the conditions imposed by the DOJ. Notwithstanding the foregoing, neither party shall be required to divest any of its other radio stations or agree to any material limitation on the operation of any of its radio stations as a condition of obtaining any required governmental approval.

        5.2  Public Announcements.    Prior to the Closing Date, all notices to third parties and other publicity relating to the transaction contemplated by this Agreement (other than Purchaser's press releases issued pursuant to its obligations under federal securities laws) shall be jointly planned and agreed to by the Seller and Purchaser.

        5.3  Ordinary Course of Business.    During the period from the date hereof to the Closing Date, unless the prior consent of Purchaser is first obtained, the Seller shall cause the Station to not knowingly take any action which would cause any representation contained in Article 3 to be untrue as of the Closing Date.

        5.4  Title Policy.    Seller shall reasonably assist Purchaser as requested so that Purchaser can obtain a Commitment for Title Insurance ("Commitment"), dated not earlier than the date of this Agreement, issued by a reputable title insurance company (the "Title Company") and, to the extent required by deficiencies in the Commitment, a current "as built" survey prepared by a duly licensed and registered land surveyor or engineer, for the Transmitter Site, showing Seller's title to such site to be good and indefeasible, together with legible copies of the deed which conveyed the Transmitter Site to Seller and all items and documents referred to in the Commitment. The Commitment will commit the Title Company to issue a standard Texas form of Owner's Title Policy with respect to the Transmitter Site (the "Owner's Title Policy") to Purchaser at the Closing. The cost of the Owner's Title Policy shall be borne by Purchaser. In the event that any material exceptions unacceptable to Purchaser appear in the Commitment and/or on any survey that are not set forth on Schedule 3.6, then Purchaser shall, within 15 days after receipt of the Commitment notify Seller in writing of such fact. Seller shall then use its best efforts to eliminate or modify such exceptions to the satisfaction of Purchaser prior to the Closing Date.

        5.5  Environmental Report.    At least 40 days before the FCC Order (or such longer period if necessary to avoid a delay of the Closing), Purchaser may elect, at its expense, to commission a Phase I environmental review of the Transmitter Site, using environmental consultants reasonably acceptable to Seller. The Seller will provide access to the Transmitter Site for the environmental consultants and will

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reasonably cooperate with such consultants in the preparation of their report. To the extent that such report reveals items affecting the Transmitter Site that cause the representations and warranties contained in Section 3.6(c) to be untrue (the "Remediation Activities"), Purchaser will provide a notice to the Seller listing the Remediation Activities and Purchaser's estimate of the costs to be borne by the Seller in connection with the Remediation Activities. Upon receipt of such notice, the Seller will either (i) complete the Remediation Activities prior to the Closing or (ii) authorize Purchaser to deduct the estimated cost of the Remediation Activities from the purchase price and to place such deducted funds in an escrow account (from which the actual costs of the Remediation Activities shall be paid and any remaining funds after completion of the Remediation Activities, together with any interest earned on such escrowed funds, shall be refunded to Seller); provided, however, that Seller's liability under this Section 5.5 shall not exceed an aggregate of $5.0 million. If Seller in good faith disputes the findings of the environmental consultants, it shall cause to be prepared other findings from an independent environmental consultant disputing the Remediation Activities and present them to Purchaser. If the parties cannot agree upon the Remediation Activities, the issue will be presented to an independent environmental consultant mutually acceptable to the parties (and whose fees and expenses will be borne equally by the parties), and the determination of such independent environmental consultant shall be determinative of the Remediation Activities.

        5.6  Station Announcements.    For the one week period following the Closing, the Purchaser shall broadcast on the Station two 15 second spots per hour indicating that the KQQK format has moved its frequency. Such spots will be produced by Seller, with the message content reasonably acceptable to Purchaser. Placement of the two spots within each hour will be at the discretion of Purchaser's station management.

        5.7  Non-Competition.

        (a)  For a period commencing on the Closing Date and continuing for two years thereafter (the "Restricted Period"), Purchaser hereby agrees that it will cause the Station, and any other radio station owned or operated by Hispanic Broadcasting Corporation or its subsidiaries in the Houston, Texas market (collectively the "HBC Houston Stations"), not to market itself principally as broadcasting in the "Tejano" broadcast format (the "Restricted Format"); provided, however, that the parties acknowledge that any of the HBC Houston Stations, being engaged in the business of broadcasting Spanish language programming, may broadcast Tejano music and may identify itself as broadcasting a range of music formats which includes Tejano music as a part of its general programming.

        (b)  If at any time during the Restricted Period any of the HBC Houston Stations is sold or otherwise transferred to someone other than Purchaser or one of its affiliates, then Purchaser will obtain the agreement of any such buyer, transferee and/or third party to comply with Section 5.7(a) above.

        (c)  In the event any aspect of the restrictions set forth in this Section 5.7 is declared illegal or unenforceable by the FCC or any court of competent jurisdiction, the parties hereby direct that such aspect which is determined to be illegal or unenforceable shall be amended by the FCC or such court (if either will do so) to the extent possible to make such aspect legal and enforceable.

        (d)  The breach of this Section 5.7 by Purchaser or subsequent owner of one of the HBC Houston Stations will result in irreparable and continuing damage to Seller for which there would be no adequate remedy at law. In the event that Purchaser shall fail to comply with the provisions of this Section 5.7, Seller and its successors and assigns shall be entitled to injunctive relief in addition to such other relief as may be appropriate at law in order to ensure compliance with the provisions of this Section 5.7.

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        6.    CONDITIONS TO PURCHASER'S CLOSING.

        All obligations of Purchaser under this Agreement shall be subject to the fulfillment at or prior to the Closing of the following conditions, it being understood that Purchaser may, in its sole discretion, waive any or all of such conditions in whole or in part:

        6.1  Representations, Etc.    The Seller shall have performed in all material respects the covenants and agreements contained in this Agreement that are to be performed by it at or prior to the Closing, and the representations and warranties of the Seller contained in this Agreement shall be true and correct in all material respects as of the Closing Date with the same effect as though made at such time (except as contemplated or permitted by this Agreement).

        6.2  Governmental Consents.    All consents and approvals from the FCC and governmental agencies required to consummate the transactions contemplated by this Agreement shall have been obtained and shall be in full force and effect, and the FCC Order shall, at the Closing, be in full force and effect.

        6.3  No Adverse Litigation.    No order or temporary, preliminary or permanent injunction or restraining order shall have been entered and no action, suit or other legal or administrative proceeding by any court or governmental authority, agency or other person shall be pending or threatened on the Closing Date which may have the effect of (i) making any of the transactions contemplated hereby illegal or (ii) materially adversely affecting the value of the Purchased Assets.

        6.4  Closing Deliveries.    Purchaser shall have received each of the documents or items required to be delivered to it pursuant to Section 8.1 hereof.

        7.    CONDITIONS TO SELLER'S CLOSING.

        All obligations of the Seller under this Agreement shall be subject to the fulfillment at or prior to the Closing of the following conditions, it being understood that the Seller may, in its sole discretion, waive any or all of such conditions in whole or in part:

        7.1  Representations, Etc.    Purchaser shall have performed in all material respects the covenants and agreements contained in this Agreement that are to be performed by Purchaser as of the Closing, and the representations and warranties of Purchaser contained in this Agreement shall be true and correct in all material respects as of the Closing Date with the same effect as though made at such time (except as contemplated or permitted by this Agreement).

        7.2  Consents.    All consents and approvals from the FCC and governmental agencies required to consummate the transactions contemplated by this Agreement shall have been obtained and shall be in full force and effect, and the FCC Order shall, at the Closing, be in full force and effect.

        7.3  No Adverse Litigation.    No order or temporary, preliminary or permanent injunction or restraining order shall have been entered and no action, suit or other legal or administrative proceeding by any court or governmental authority, agency or other person shall be pending or threatened on the Closing Date which may have the effect of (i) making any of the transactions contemplated hereby illegal or (ii) materially adversely affecting the value of the Purchased Assets.

        7.4  Closing Deliveries.    The Seller shall have received each of the documents or items required to be delivered to it pursuant to Section 8.2.

        8.    DOCUMENTS TO BE DELIVERED AT CLOSING.

        8.1  To Purchaser.    At the Closing, there shall be delivered to Purchaser:

        (a)  The warranty deeds, bills of sale, agreements of assignment and similar instruments of transfer to the Purchased Assets contemplated by Section 2.3 hereof.

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        (b)  A certificate, signed by an executive officer of Seller, as to the fulfillment of the conditions set forth in Sections 6.1 through 6.3 hereof.

        (c)  The Business Records.

        8.2  To Seller.    At the Closing, there shall be delivered to the Seller:

        (a)  The purchase price contemplated by Section 2.1 hereof, in the form of wire transfer or cashier's or certified check as the Seller may direct.

        (b)  A certificate, signed by an executive officer of Purchaser, as to the fulfillment of the conditions set forth in Sections 7.1 and 7.2 hereof.

        (c)  An assumption agreement pursuant to which Purchaser shall assume the Assumed Contracts.

        9.    SURVIVAL.

        All representations, warranties, covenants and agreements made by any party to this Agreement or pursuant hereto shall be deemed to be material and to have been relied upon by the parties hereto and shall survive the Closing; provided, however, that notice of any claim against the Purchaser or Seller, whether made under the indemnification provisions hereof or otherwise, based on a breach of a representation, warranty, covenant or agreement must be given within one year from the Closing Date (three years with respect to the representations set forth in Section 3.6(c)). The representations and warranties hereunder shall not be affected or diminished by any investigation at any time by or on behalf of the party for whose benefit such representations and warranties were made; provided, however, that any Phase I environmental investigation conducted by or on behalf of the Purchaser and any subsequent Remediation Activities completed pursuant to Section 5.5 shall preclude further claims after the Closing in respect of the specific matters disclosed in the Phase I environmental investigation or in respect of the matters purported to remedied by the Remediation Activities. No representation or warranty contained herein shall be deemed to be made at any time after the date of this Agreement.

        10.  INDEMNIFICATION OF PURCHASER.

        Subject to the limitations set forth in Sections 9 and 12, the Seller shall indemnify and hold Purchaser harmless from, against, for and in respect of:

        (a)  any and all damages, losses, settlement payments, obligations, liabilities, claims, actions or causes of action and encumbrances (collectively, together with the costs and expenses described in clause (c) below, being referred to herein as "Damages") suffered, sustained, incurred or required to be paid by Purchaser because of the breach of any written representation, warranty, agreement or covenant of the Seller contained in this Agreement;

        (b)  any and all liabilities, obligations, claims and demands arising out of the ownership and operation of the Station at all times prior to the Closing Date (other than the contractual liabilities specifically assumed as set forth in Section 1.2 hereto); and

        (c)  all reasonable costs and expenses (including, without limitation, attorneys' fees, interest and penalties) incurred by Purchaser in connection with any action, suit, proceeding, demand, assessment or judgment incident to any of the matters indemnified against in this Section 10;

provided, however, that after Closing, Seller shall have no liability to Purchaser hereunder until, and only to the extent that, Purchaser's aggregate Damages exceed $25,000.

        11.  INDEMNIFICATION OF SELLER.

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        Subject to the limitations set forth in Sections 9 and 12, Purchaser shall indemnify and hold the Seller harmless from, against, for and in respect of:

        (a)  any and all Damages suffered, sustained, incurred or required to be paid by the Seller because of the breach of any written representation, warranty, agreement or covenant of Purchaser contained in this Agreement;

        (b)  any and all liabilities, obligations, claims and demands arising out of the ownership and operation of the Station on and after the Closing Date, except to the extent the same arises from a breach of any written representation, warranty, agreement or covenant of the Seller contained in this Agreement or any document, certificate or agreement executed in connection with this Agreement;

        (c)  any of the Assumed Contracts specifically assumed as set forth in Section 1.2; and

        (d)  all reasonable costs and expenses (including, without limitation, attorneys' fees, interest and penalties) incurred by the Seller in connection with any action, suit, proceeding, demand, assessment or judgment incident to any of the matters indemnified against in this Section 11;

provided, however, that after Closing, Purchaser shall have no liability to Seller hereunder until, and only to the extent that, Seller's aggregate Damages exceed $25,000.

        12.  GENERAL RULES REGARDING INDEMNIFICATION.

        The obligations and liabilities of each indemnifying party hereunder with respect to claims resulting from the assertion of liability by the other party or indemnified third parties shall be subject to the following terms and conditions:

        (a)  The indemnified party shall give prompt written notice (which in no event shall exceed 30 days from the date on which the indemnified party first became aware of such claim or assertion) to the indemnifying party of any claim which might give rise to a claim by the indemnified party against the indemnifying party based on the indemnity agreements contained in Section 10 or 11 hereof, stating the nature and basis of said claims and the amounts thereof, to the extent known;

        (b)  If any action, suit or proceeding is brought against the indemnified party with respect to which the indemnifying party may have liability under the indemnity agreements contained in Section 10 or 11 hereof, the action, suit or proceeding shall, upon the written acknowledgment by the indemnifying party that it is obligated to indemnify under such indemnity agreement, be defended (including all proceedings on appeal or for review which counsel for the indemnified party shall deem appropriate) by the indemnifying party. The indemnified party shall have the right to employ its own counsel in any such case, but the fees and expenses of such counsel shall be at the indemnified party's own expense unless (A) the employment of such counsel and the payment of such fees and expenses both shall have been specifically authorized in writing by the indemnifying party in connection with the defense of such action, suit or proceeding, or (B) counsel to such indemnified party shall have reasonably concluded and specifically notified the indemnifying party that there may be specific defenses available to it which are different from or additional to those available to the indemnifying party or that such action, suit or proceeding involves or could have an effect upon matters beyond the scope of the indemnity agreements contained in Sections 10 and 11 hereof, in any of which events the indemnifying party, to the extent made necessary by such defenses, shall not have the right to direct the defense of such action, suit or proceeding on behalf of the indemnified party. In the latter such case only that portion of such fees and expenses of the indemnified party's separate counsel reasonably related to matters covered by the indemnity agreements contained in Section 10 or 11 hereof shall be borne by the indemnifying party. The indemnified party shall be kept fully informed of such action, suit or proceeding at all stages thereof whether or not it is represented by separate counsel.

        (c)  The indemnified party shall make available to the indemnifying party and its attorneys and accountants all books and records of the indemnified party relating to such proceedings or litigation

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and the parties hereto agree to render to each other such assistance as they may reasonably require of each other in order to ensure the proper and adequate defense of any such action, suit or proceeding.

        (d)  The indemnified party shall not make any settlement of any claims without the written consent of the indemnifying party, which consent shall not be unreasonably withheld or delayed.

        (e)  If any claims are made by third parties against an indemnified party for which an indemnifying party would be liable, and it appears likely that such claims might also be covered by the indemnified party's insurance policies, the indemnified party shall make a timely claim under such policies and to the extent that such party obtains any recovery from such insurance, such recovery shall be offset against any sums due from an indemnifying party (or shall be repaid by the indemnified party to the extent that an indemnifying party has already paid any such amounts). The parties acknowledge, however, that if an indemnified party is self-insured as to any matters, either directly or through an insurer which assesses retroactive premiums based on loss experience, then to the extent that the indemnified party bears the economic burden of any claims through self-insurance or retroactive premiums or insurance ratings, the indemnifying party's obligation shall only be reduced by any insurance recovery in excess of the amount paid or to be paid by the indemnified party in insurance premiums.

        (f)    Except as herein expressly provided, the remedies provided in Sections 10 through 12 hereof shall be cumulative and shall not preclude assertion by any party of any other rights or the seeking of any other rights or remedies against any other party hereto.

        13.  TERMINATION AND RESCISSION RIGHTS; RISK OF LOSS.

        13.1 Termination.    This Agreement may be terminated by the mutual consent of Purchaser and Seller, or by either Purchaser or Seller, if the terminating party is not then in material breach of its obligations hereunder, upon written notice to the other upon the occurrence of any of the following:

        (a)  By the terminating party, if the other party is in material breach of its obligations hereunder, and such breach has not been cured by the other party within 30 days of written notice of such breach (or such longer period of time if the breach cannot be reasonably cured within 30 days and the breaching party is diligently attempting to cure such breach);

        (b)  If the FCC denies the FCC Application or favorable treatment under the HSR Act has not occurred and the parties have exhausted all FCC agency appeals and HSR Act appeals and have exhausted all of the duties under Section 5.1 to modify or restructure the transaction, and the terminating party believes in good faith (based upon the advice of its FCC counsel) that any further appeal or effort is unlikely to result in overturning the FCC's decision or DOJ's decision;

        (c)  By either Purchaser of Seller, if the costs of the Remediation Activities described in Section 5.5 exceed $5.0 million and if Seller is unwilling to permit any such costs in excess of $5.0 million to be deducted from the purchase price hereunder; or

        (d)  If the Closing has not occurred on or before March 31, 2002.

In connection with the foregoing, the parties acknowledge that (i) a failure of the FCC and/or DOJ to grant approval of the transactions contemplated hereby shall not be deemed a breach of this Agreement by any party which continues to pursue in good faith the actions stated in Section 5.1(a) hereof and (ii) a failure of the Seller to deliver the lien releases contemplated by the Third Party Consents shall not be deemed a breach of this Agreement by Seller so long as Seller in good faith is attempting to obtain such lien releases.

        13.2 Rescission.    In the event the parties elect to close prior to the time the FCC Order has become a Final Order, Purchaser and Seller shall enter into rescission agreement to be mutually agreed upon which provides for unwinding the transaction in the event a Final Order is not obtained.

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        13.3 Risk of Loss.    The Seller shall bear the risk of all damage to, loss of or destruction of any of the Purchased Assets between the date of this Agreement and the Closing Date. If any material portion of the Purchased Assets shall suffer any material damage or destruction prior to the Closing Date (a "Casualty Loss"), the Seller shall promptly notify the Purchaser in writing of such damage or destruction, shall promptly take all necessary steps to restore, repair or replace such assets at its sole expense, and shall advise the Purchaser in writing of the estimated cost to complete such restoration, repair or replacement and all amounts actually paid as of the date of the estimate. The Seller may elect to extend the Closing Date for a period not exceeding 60 days to accomplish such restoration, repair or replacement and/or to locate temporary or provisional facilities that provide broadcast signal coverage at least as favorable to the Purchaser as the signal broadcast from the Transmitter Site at its authorized height and signal strength in accordance with the Governmental Licenses and at no additional cost to Purchaser ("Suitable Replacement Facilities"), but is not required to do so. If such restoration, repair or replacement is not accomplished prior to the Closing Date, as the same may be extended as provided herein, the following provisions shall apply:

        (a)  if the Station is operating from the Transmitter Site at its authorized height and signal strength in accordance with the Governmental Licenses or is operating from Suitable Replacement Facilities, the Purchaser shall receive all insurance proceeds paid or payable to Seller in respect of the Casualty Loss, close this Agreement and thereafter complete such restoration, repair or replacement at its sole expense and without any liability of Seller in respect thereof; provided, however, that if the insurance proceeds are insufficient to complete the estimated costs of such restoration, repair or replacement, Purchaser may deduct such deficiency from the purchase price payable hereunder; provided further, however, that if Seller disputes Purchaser's calculation of such deficiency, the parties shall submit such issue to a mutually acceptable firm of independent consulting engineers (the fees and expenses of which shall be borne equally by the parties), whose determination of such issue shall be binding upon the parties; or

        (b)  if the Station is not operating from the Transmitter Site at its authorized signal strength in accordance with the Governmental Licenses and is not operating from Suitable Replacement Facilities, then Purchaser may elect to terminate this Agreement without liability of Seller.

        14.  SPECIFIC PERFORMANCE

        The parties acknowledge that the Purchased Assets and the transactions contemplated hereby are unique, that a failure by Seller or Purchaser to complete such transactions will cause irreparable injury to the other, and that actual damages for any such failure may be difficult to ascertain and may be inadequate. Consequently, Seller and Purchaser agree that each shall be entitled, in the event of a default by the other, to specific performance of any of the provisions of this Agreement, in addition to any other legal or equitable remedies to which the non-defaulting party may otherwise be entitled. In the event any action is brought, the prevailing party shall be entitled to recover court costs, arbitration expenses and reasonable attorneys' fees.

        15.  MISCELLANEOUS PROVISIONS.

        15.1 Expenses.    Except as otherwise expressly provided herein, each party shall pay the fees and expenses incurred by it in connection with the transactions contemplated by this Agreement. If any action is brought for breach of this Agreement or to enforce any provision of this Agreement, the prevailing party shall be entitled to recover court costs and reasonable attorneys' fees.

        15.2 Prorations.    All items of income and expense arising from the operation of the Station with respect to the Purchased Assets and the Assumed Contracts on or before the close of business on the Closing Date shall be for the account of the Seller and thereafter shall be for the account of the Purchaser. Proration of the items described below between the Seller and the Purchaser shall be

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effective as of 11:59 p.m., local time, on such date and shall occur as follows with respect to those rights, liabilities and obligations of the Seller transferred to and assumed by the Purchaser hereunder.

        (a)  Liability for state and local taxes assessed on the Purchased Assets payable with respect to the tax year in which the Closing Date falls and the annual FCC regulatory fee for the Station payable with respect to the year in which the Closing Date falls shall each be prorated as between the Seller and the Purchaser on the basis of the number of days of the tax year elapsed to and including such date.

        (b)  Prepaid items, deposits, credits and accruals such as water, electricity, telephone, other utility and service charges, lease expenses, license fees (if any) and payments under any contracts or utility services to be assumed by the Purchaser shall be prorated between the Seller and the Purchaser on the basis of the period of time to which such liabilities, prepaid items and accruals apply.

All prorations shall be made and paid insofar as feasible on the Closing Date; any prorations not made on such date shall be made as soon as practicable (not to exceed 90 days) thereafter. The Seller and the Purchaser agree to assume, pay and perform all costs, liabilities and expenses allocated to each of them pursuant to this Section 15.2.

        15.3 Amendment.    This Agreement may be amended at any time but only by an instrument in writing signed by the parties hereto.

        15.4 Notices.    All notices and other communications hereunder shall be in writing and shall be deemed given if mailed by certified mail, return receipt requested, or by nationally recognized "next-day" delivery service, to the parties at the addresses set forth below (or at such other address for a party as shall be specified by like notice), or sent by facsimile to the number set forth below (or such other number for a party as shall be specified by proper notice hereunder):

If to the Purchaser:

        3102 Oak Lawn, Suite 215
        Dallas, Texas 75219
        Attn: President
        Fax: (214) 525-7750

        with copy (which shall not constitute notice) to:

        Hallett & Perrin
        717 N. Harwood, 14^th Floor
        Dallas, Texas 75201
        Attn: Bruce H. Hallett
        Fax: (214) 953-0576

If to the Seller:

        1980 Post Oak Boulevard, Suite 1500
        Houston, Texas 77056
        Attn: President
        Fax: (713) 621-5325

        with copy (which shall not constitute notice) to:

        Davis Wright Tremaine LLP
        1500 K Street, Suite 450
        Washington, D.C. 20005
        Attn: Lawrence Roberts and Mary Plantamura
        Fax: (202) 508-6699

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        Goldman Sachs Credit Partners
        85 Broad Street
        29^th Floor
        New York, New York 10004
        Attn: Jody LaNasa
        Fax: (212) 902-3757

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        O'Melveny & Myers, LLP
        Citigroup Center
        153 East 53^rd Street
        New York, New York 10022-4611
        Attn: Yongjin Im
        Fax: (212) 326-2061

        15.5 Assignment.    This Agreement may not be assigned by either party without the prior consent of the other party, which shall not be unreasonably withheld. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, heirs and permitted assigns.

        15.6 Counterparts.    This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

        15.7 Headings.    The headings of the Sections of this Agreement are inserted for convenience only and shall not constitute a part hereof.

        15.8 Entire Agreement.    This Agreement and the documents referred to herein contain the entire understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties, conveyances or undertakings other than those expressly set forth herein. This Agreement supersedes any prior agreements and understandings between the parties with respect to the subject matter.

        15.9 Waiver.    No attempted waiver of compliance with any provision or condition hereof, or consent pursuant to this Agreement, will be effective unless evidenced by an instrument in writing by the party against whom the enforcement of any such waiver or consent is sought.

        15.10    Governing Law.    This Agreement shall be governed by and construed in accordance with the laws of the State of Texas. Venue with respect to any dispute or controversy shall be proper only in Houston, Texas.

        15.11    Certain Definitions.    As used in this Agreement, "affiliates" of a party shall mean persons or entities that directly, or indirectly through one or more intermediaries, control or are controlled by, or are under common control with, such party.

        15.12    Intended Beneficiaries.    The rights and obligations contained in this Agreement are hereby declared by the parties hereto to have been provided expressly for the exclusive benefit of such entities as set forth herein and shall not benefit, and do not benefit, any unrelated third parties.

        15.13    Mutual Contribution.    The parties to this Agreement and their counsel have mutually contributed to its drafting. Consequently, no provision of this Agreement shall be construed against any party on the ground that such party drafted the provision or caused it to be drafted or the provision contains a covenant of such party.

        15.14    Time of the Essence.    All time periods stated in this Agreement are deemed to be material and are of the essence.

[signatures on following page]

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

HBC Broadcasting Texas, L.P. By HBC GP Texas, Inc. (general partner)
By:	/s/  JEFFREY T. HINSON
HBC License Corporation
By:	/s/  JEFFREY T. HINSON
KQQK Inc.
By:	/s/  THOMAS H. CASTRO Thomas H. Castro, President
KQQK License, Inc.
By:	/s/  THOMAS H. CASTRO Thomas H. Castro, President

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ASSET PURCHASE AGREEMENT

EX-10.12

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Exhibit 10.12

ASSET PURCHASE AGREEMENT

        THIS ASSET PURCHASE AGREEMENT is made as of the 4th day of September, 2001, by and among Big City Radio-Phoenix, L.L.C. ("BCR-Phoenix"), Big City Radio, Inc. ("BCR," and together with BCR-Phoenix, the "Seller"), HBC Phoenix, Inc. ("HBC Phoenix") and HBC License Corporation ("HBC License" and together with HBC Phoenix, the "Purchaser").

W I T N E S S E T H:

        WHEREAS, Seller is the licensee of the following radio stations (collectively the "Stations"): (i) KEDJ(FM), licensed to Sun City, Arizona, authorized by the Federal Communications Commission (the "FCC") to operate at 106.3 MHz (FCC Facility ID No. 55913); (ii) KDDJ(FM), licensed to Globe, Arizona, authorized by the FCC to operate at 100.3 MHz (FCC Facility ID No. 22977); (iii) KBZR(FM), licensed to Arizona City, Arizona, authorized by the FCC to operate at 106.5 MHz (FCC Facility ID No. 2740); and (iv) KSSL(FM), licensed to Wickenburg, Arizona, authorized by the FCC to operate at 105.3 MHz (FCC Facility ID No. 29021); and

        WHEREAS, Seller owns the assets which are used in the operation of the Stations;

        WHEREAS, the Seller desires to sell to Purchaser, and Purchaser desires to purchase from the Seller, certain of the radio station properties and assets relating to the Stations as described herein under the terms and conditions herein set forth; and

        WHEREAS, simultaneously with the execution and delivery of this Agreement, Hispanic Broadcasting Corporation ("HBC") and the Seller are entering into a Guaranty Agreement pursuant to which HBC is guaranteeing the obligations of the Purchaser under this Agreement.

        NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, the parties hereto agree as follows:

        1.    PURCHASE AND SALE OF ASSETS.

        1.1  Purchase and Sale of Assets.    Subject to the conditions set forth in this Agreement, at the Closing (as defined hereinafter), the Seller shall assign, transfer, convey and deliver to Purchaser, and Purchaser shall purchase from the Seller, all right, title and interest in and to the following assets relating to the Stations (the "Purchased Assets"), free and clear of all liens, security interests, charges, encumbrances and rights of others (other than liens and charges for which a proration adjustment is made pursuant to Section 15.2 and other Permitted Liens):

        (a)  All licenses, construction permits or authorizations issued by or pending before the FCC or any other governmental authority for use in the operation of the Stations that are set forth on Schedule 1.1(a) attached hereto, together with any and all renewals, extensions and modifications thereof (the "Governmental Licenses");

        (b)  The leasehold interest at each of the sites described on Schedule 1.1(b) hereto (the "Transmitter Sites");

        (c)  All broadcast towers, antennas, main and back-up transmitters and generators, STL's and other tangible personal property located, or otherwise intended for use, at the Transmitter Sites, together with replacements thereof and additions thereto made between the date hereof and the Closing;

        (d)  The leasehold interest at each of the sites described on Schedule 1.1(d) hereto (the "Studio Sites") and the roof top rights for the auxiliary antenna located at the Valley Commerce Center;

        (e)  All studio equipment, production and imaging equipment, office equipment, furniture, vehicles and other items of tangible personal property used, or intended for use, in the operation of the Stations, together with replacements thereof and additions thereto made between the date hereof and the Closing;

        (f)    The call letters, marti frequencies, "Que Buena" tradename and internet domain names of the Stations; and

        (g)  Unless as may be otherwise required by law, the books and records related to the Purchased Assets, such as property tax records, logs, all materials maintained in the FCC public file relating to the Stations, technical data, political advertising records and all other records, correspondence with and documents pertaining to governmental authorities and similar third parties (the "Business Records").

In no event shall the Purchased Assets be deemed to include (i) the cash and cash equivalents of the Seller or the Stations (except for any normal and customary deposits with respect to the Purchased Assets for which a proration adjustment is made in Seller's favor pursuant to Section 15.2), (ii) any accounts receivable, notes receivable or other receivables of the Seller (including tax refunds), (iii) promotional materials, tapes and record libraries and similar items of intellectual property in respect of the Stations except as specifically set forth above, (iv) the Seller's corporate seal, minute books, charter documents, corporate stock record books and other books and records that pertain to the organization of Seller, (v) securities of any kind owned by Seller, (vi) insurance contracts or proceeds thereof, (vii) time sales agreements or barter rights of the Stations, (viii) vehicles in excess of the four vehicles (reasonably acceptable to Purchaser) that are included in the Purchased Assets or (ix) claims arising out of acts occurring before the Closing Date.

        1.2  Assumed Contracts.    At the Closing, the Purchaser shall assume the specified contractual obligation of the Stations for periods on and after the Closing under the agreements set forth on Schedule 1.2 hereof (the "Assumed Contracts"), and the Purchaser agrees to pay and perform the Assumed Contracts after the Closing Date. Except as specifically set forth in the preceding sentence, Purchaser does not assume and shall in no event be liable for any debt, obligation, responsibility or liability of the Stations or Seller, including without limitation, employee obligations, taxes, accounts payable, time sales agreements and barter obligations of the Stations.

        2.    CONSIDERATION; CLOSING.

        2.1  Purchase Price.    The consideration to be received by the Seller in exchange for the Purchased Assets shall be $34 million, payable in cash at Closing.

        2.2  Time of Closing.

        (a)  A closing (the "Closing") for the sale and purchase of the Purchased Assets shall be held at the offices of the Purchaser in Dallas, Texas (or such other place as may be agreed upon by the parties in writing). The Closing shall occur on such date (the "Closing Date") that is the 7th day after the date on which the FCC Order (defined below) has occurred with respect to the FCC Licenses. The Closing shall be deemed to be effective as of 12:01 a.m. on the Closing Date.

        (b)  In order to consummate the transfer of the Purchased Assets, Seller and Purchaser agree to use their reasonable best efforts to file, within three business days after the date hereof, an assignment of license application (the "FCC Application") requesting FCC consent to the assignment from the Seller to HBC License of the FCC Licenses. The parties agree that the FCC Application will be prosecuted with reasonable best efforts, in good faith and with due diligence. The parties agree to use their reasonable best efforts to file additional information or amendments requested by the FCC orally or in writing within five business days after such request and, in any event, to commence preparation of such additional information or amendments immediately upon request and to complete and file the same with the FCC as rapidly as practical. Each party will be solely responsible for the expenses incurred by it in the preparation, filing and prosecution of the FCC Application (it being understood that the parties will bear equally the FCC filing fee).

        (c)  As used herein, the term "FCC Order" shall mean that the FCC staff (including the Mass Media Bureau pursuant to delegated authority) has granted or given its consent, without any condition

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materially adverse to Purchaser or Seller, to the assignment of the FCC Licenses; and the term "Final Order" shall mean that the FCC Order shall have become final, that the time period for filing any protests, requests for stay, reconsideration by the FCC, petitions for rehearing or appeal of such order shall have expired, and that no protest, request for stay, reconsideration by the FCC, petition for rehearing or appeal of such order shall be pending.

        2.3  Closing Procedure.    At the Closing, the Seller shall deliver to Purchaser such bills of sale, instruments of assignment, transfer and conveyance and similar documents as Purchaser shall reasonably request. Against such delivery, Purchaser shall (i) issue and deliver to Seller the purchase price in accordance with Section 2.1 above and (ii) execute and deliver the assumption agreement with respect to the Assumed Contracts as are contemplated by Section 1.2 hereof. Each party will cause to be prepared, executed and delivered all other documents required to be delivered by such party pursuant to this Agreement and all other appropriate and customary documents as another party or its counsel may reasonably request for the purpose of consummating the transactions contemplated by this Agreement. All actions taken at the Closing shall be deemed to have been taken simultaneously at the time the last of any such actions is taken or completed.

        2.4  Allocation of Purchase Price.    The Purchase Price shall be allocated among the Purchased Assets in a manner as mutually agreed between the parties based upon an appraisal prepared by Bond & Pecaro (whose fees shall be paid by Purchaser). Seller and Purchaser agree to use the allocations determined pursuant to this Section 2.4 for all tax purposes, including without limitation, those matters subject to Section 1060 of the Internal Revenue Code of 1986, as amended.

        3.    REPRESENTATIONS AND WARRANTIES OF THE SELLER.

        The Seller hereby represents and warrants to the Purchaser, as follows:

        3.1  Organization; Good Standing.    BCR-Phoenix is a limited liability company, duly organized, validly existing and in good standing under the laws of the State of Delaware. BCR is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Seller has all requisite corporate power and authority to own and lease its properties and carry on its business as currently conducted.

        3.2  Due Authorization.    Subject to the FCC Order and the Final Order, the Seller has full power and authority to enter into and perform this Agreement and to carry out the transactions contemplated hereby. The Seller has taken all necessary corporate action to approve the execution and delivery of this Agreement and the transactions contemplated hereby. This Agreement constitutes the legal, valid and binding obligation of the Seller, enforceable against it in accordance with its terms, except as may be limited by the availability of equitable remedies or by applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally.

        3.3  Execution and Delivery.    Neither the execution and delivery by the Seller of this Agreement nor the consummation by it of the transactions contemplated hereby will: (i) conflict with or result in a breach of any provisions of Seller's organizational documents, (ii) subject to the FCC Order and Final Order, violate any statute, law, rule or regulation or any order, writ, injunction or decree of any court or governmental authority, which violation, either individually or in the aggregate, might reasonably be expected to have a material adverse effect on Purchaser's ownership of the Purchased Assets; or (iii) except as set forth on Schedule 3.3, violate or conflict with or constitute a default under (or give rise to any right of termination, cancellation or acceleration under), or result in the creation of any lien on any of the Purchased Assets pursuant to, any material agreement, indenture, mortgage or other instrument to which the Seller is a party or by which it or its assets may be bound or affected.

        3.4  Governmental Consents.    No approval, authorization, consent, order or other action of, or filing with, any governmental authority or administrative agency is required in connection with the

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execution and delivery by the Seller of this Agreement or the consummation by the Seller of the transactions contemplated hereby or thereby, other than those of the FCC.

        3.5  Title to Personal Property Assets.    Except for leased property, the Seller is the sole and exclusive legal owner of all right, title and interest in, and has good and marketable title to, all of the Purchased Assets constituting personal property, free and clear of liens, claims and encumbrances except (i) Permitted Liens (ii) liens which will be released on or prior to the Closing, or (iii) the Assumed Contracts.

        3.6  Transmitter and Studio Sites.

        (a)  Except as set forth on Schedule 1.1(b), as of the Closing, Seller will have good and indefeasible title to the main Transmitter Site for KBZR and valid, binding and enforceable leasehold interests in and to the remaining Transmitter Sites and Studio Sites; and in each case such title or interest shall be free and clear of liens, claims, encumbrances, subleases or other restrictions except for Permitted Liens.

        (b)  Seller has not received any notice of, and has no knowledge of, any material violation of any zoning, building, health, fire, water use or similar statute, ordinance, law, regulation or code in connection with the Transmitter Sites or Studio Sites. To the knowledge of Seller, no fact or condition exists which would result in the termination or impairment of access of the Stations to the Transmitter Sites or Studio Sites or discontinuation of necessary sewer, water, electrical, gas, telephone or other utilities or services, except as set forth on Schedule 1.1(b).

        (c)  To Seller's knowledge, (i) no hazardous or toxic material (as hereinafter defined) exists in any structure located on, or exists on or under the surface of, the Transmitter Sites which is, in any case, in material violation by Seller of applicable environmental law; (ii) no portion of the Transmitter Sites has been used by Seller as a landfill or for storage or landfill of hazardous or toxic materials; and (iii) there are not any underground storage tanks that have been installed by Seller at or removed by Seller from the Transmitter Sites. For purposes of this Section, "hazardous or toxic material" shall mean waste, substance, materials, smoke, gas or particulate matter designated as hazardous, toxic or dangerous under any environmental law. For purposes of this Section, "environmental law" shall include the Comprehensive Environmental Response, Compensation and Liability Act, the Clean Air Act, the Clean Water Act and any other applicable federal, state or local environmental, health or safety law, rule or regulation relating to or imposing liability or standards concerning or in connection with hazardous, toxic or dangerous waste, substance, materials, smoke, gas or particulate matter.

        3.7  Tangible Personal Property Assets.    Schedule 3.7 sets forth a list, complete and accurate in all material respects, of the Purchased Assets which consist of tangible personal property. All of such tangible personal property, viewed as a whole and not on an asset by asset basis are in good condition and working order, ordinary wear and tear excepted, and are suitable for the uses for which intended, free from any known defects except such minor defects that do not interfere with the continued present use thereof by Seller.

        3.8  Governmental Licenses.    Schedule 1.1(a) lists and accurately describes all of the Governmental Licenses necessary for the lawful ownership and operation of the Stations and the conduct of their businesses, except where the failure to hold such Governmental License would not have a material adverse effect on the Stations. The Seller has furnished to Purchaser true and accurate copies of all of the Governmental Licenses. Each such Governmental License is in full force and effect and is valid under applicable federal, state and local laws; the Stations are being operated in compliance in all material respects with the Communications Act of 1934, as amended, and all rules, regulations and policies of the FCC; and to the knowledge of the Seller, no event has occurred which (whether with or without notice, lapse of time or the happening or occurrence of any other event) is reasonably likely to result in the revocation or termination of any Governmental License or the imposition of any

4

restriction of such a nature as might adversely affect the ownership or operation of the Stations as now conducted by Seller, except for proceedings of a legislative or rule-making nature intended to affect the broadcasting industry generally. The Stations, each of their physical facilities, electrical and mechanical systems and transmitting and studio equipment are being operated in all material respects in accordance with the specifications of the Governmental Licenses. The Governmental Licenses are unimpaired by any act or omission of the Seller or any of the Seller's officers, directors or employees and, the Seller has fulfilled and performed all of its obligations with respect to the Governmental Licenses and has full power and authority thereunder. Except as set forth on Schedule 3.8, no application, action or proceeding is pending for the renewal or modification of any of the Governmental Licenses. No event has occurred which, individually or in the aggregate, and with or without the giving of notice or the lapse of time or both, would constitute ground for revocation thereof.

        3.9  Reports.    Except as set forth on Schedule 3.9, the Seller has duly filed all reports required to be filed by law or applicable rule, regulation, order, writ or decree of any court, governmental commission, body or instrumentality and has made payment of all charges and other payments, if any, shown by such reports to be due and payable, except where the failure to so file or make payment would not have a material adverse effect upon the operations of the Stations. Except as set forth on Schedule 3.9, all reports required to be filed by the Seller with the FCC with respect to the Stations have been filed, except where the failure to so file would not materially and adversely affect the business, operations, properties, assets or conditions (financial or otherwise) of the Stations or which challenges the validity or propriety of any of the transactions contemplated by this Agreement. Such reports and disclosures are complete and accurate in all material respects.

        3.10 Taxes.    All tax reports and returns required to be filed by or relating to the Purchased Assets have been filed with the appropriate federal, state and local governmental agencies, and there have been paid all taxes, penalties, interest, deficiencies, assessments or other charges due with respect to such taxes, as reflected on the filed returns or claimed to be due by such federal, state or local taxing authorities (other than taxes, deficiencies, assessments or claims which are being contested in good faith and which in the aggregate are not material). Seller has not received any written notice of any examinations or audits pending or unresolved examinations or audit issues with respect to the Seller's federal, state or local tax returns that could adversely affect the Purchased Assets. All additional taxes, if any, assessed as a result of such examinations or audits have been paid, and to Seller's knowledge, there are no pending claims or proceedings relating to, or asserted for, taxes, penalties, interest, deficiencies or assessments against the Purchased Assets.

        3.11 Litigation.    There is no order of any court, governmental agency or authority and no action, suit, proceeding or investigation, judicial, administrative or otherwise that is pending or, to Seller's knowledge, threatened against or affecting the Stations which, if adversely determined would reasonably be expected to have a Material Adverse Effect or which challenges the validity or propriety of any of the transactions contemplated by this Agreement.

        3.12 Contracts and Agreements.    The Stations are not in default in any material respect with respect to the Assumed Contracts, and, as of the Closing Date, the Stations will have paid all sums and performed in all material respects all obligations under the Assumed Contracts which are required to be paid or performed prior to the Closing Date.

        3.13 Business Records.    The Seller has, and after the Closing, Purchaser will have, the right to use the Business Records included in the Purchased Assets, free and clear of any royalty or other payment obligations.

        3.14 Third Party Consents.    The only consents from any person or entity which are required to be obtained by Seller in connection with the execution and delivery by Seller of this Agreement and the consummation of the transactions contemplated hereby are set forth on Schedule 3.14 (the "Third

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Party Consents"), and Seller reasonably anticipates that it will be able to obtain the Third Party Consents prior to the Closing.

        3.15 Finders and Brokers.    Except for Jorgenson Broadcast Brokerage, the fees and expenses of which shall be borne solely by Seller, no person has as a result of any agreement entered into by the Seller any valid claim against any of the parties hereto for a brokerage commission, finder's fee or other like payment.

        3.16 Disclaimer of Warranties; Limitations of Warranties.    EXCEPT WITH RESPECT TO THE REPRESENTATIONS AND WARRANTIES SPECIFICALLY SET FORTH IN THIS AGREEMENT, SELLER MAKES NO WARRANTY, EXPRESS OR IMPLIED, WHETHER OF MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR QUALITY AS TO THE PURCHASED ASSETS, OR ANY PART THEREOF, OR AS TO THE CONDITION OR WORKMANSHIP THEREOF, OR THE ABSENCE OF ANY DEFECTS THEREIN, WHETHER LATENT OR PATENT.

        4.    REPRESENTATIONS AND WARRANTIES OF PURCHASER.

        Purchaser hereby represents and warrants to the Seller as follows:

        4.1  Organization and Good Standing.    Each of HBC Phoenix and HBC License is a corporation duly organized, validly existing and in good standing under the laws of Delaware and has all requisite power and authority to own and lease its properties and carry on its business as currently conducted.

        4.2  Due Authorization.    Subject to the FCC Order and Final Order, Purchaser has full power and authority to enter into this Agreement and to carry out its obligations hereunder. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of Purchaser. This Agreement has been duly executed and delivered by Purchaser and constitutes the legal, valid and binding obligation of Purchaser, enforceable against it in accordance with its respective terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally or general equitable principles.

        4.3  Execution and Delivery.    Neither the execution and delivery by Purchaser of this Agreement nor the consummation of the transactions contemplated hereby will: (i) conflict with or result in a breach of the certificate of incorporation or bylaws of Purchaser; (ii) subject to the FCC Order and Final Order, violate any law, statute, rule or regulation or any order, writ, injunction or decree of any court or governmental authority; or (iii) violate or conflict with or constitute a default under (or give rise to any right of termination, cancellation or acceleration under) any indenture, mortgage, lease, contract or other instrument to which Purchaser is a party or by which it is bound or affected.

        4.4  Consents.    No consent, approval, authorization, license, exemption of, filing or registration with any court, governmental authority, commission, board, bureau, agency or instrumentality, domestic or foreign, is required by Purchaser in connection with the execution and delivery of this Agreement or the consummation by it of any transaction contemplated hereby, other than the consent of the FCC. No approval, authorization or consent of any other third party is required in connection with the execution and delivery by Purchaser of this Agreement and the consummation of the transactions contemplated hereby, except as may have been previously obtained by Purchaser. Purchaser warrants that it is legally qualified to become a licensee of the Stations and is aware of no impediment to the approval by the FCC of the assignment of the Governmental Licenses to Purchaser.

        4.5  Finders and Brokers.    No person has as a result of any agreement entered into by the Purchaser any valid claim against any of the parties hereto for a brokerage commission, finder's fee or other like payment.

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        4.6  Purchaser's Qualification.    The Purchaser is in all material respects qualified legally, financially and otherwise to be the licensee of the Stations, and has or shall have on the Closing Date sufficient funds to pay in full all amounts due to the Seller under this Agreement when such amounts are due.

        5.    CERTAIN COVENANTS AND AGREEMENTS.

        5.1  Consummation of the Transaction.

        (a)  Each of the Seller and Purchaser shall take all reasonable action necessary to consummate the transactions contemplated by this Agreement and will use all necessary and reasonable means at its disposal to obtain (and cooperate with the other party in obtaining) all necessary approvals of the FCC and Third Party Consents required to enable it to consummate the transactions contemplated by this Agreement. Except as otherwise provided herein, each of the Seller and Purchaser acknowledges and agrees that it shall pay all costs, fees and expenses incurred by it in obtaining such necessary consents and approvals. Each party shall make all filings, applications, statements and reports to all governmental agencies or entities which are required to be made prior to the Closing Date by or on its behalf pursuant to any statute, rule or regulation in connection with the transactions contemplated by this Agreement, and copies of all such filings, applications, statements and reports shall be provided to the other.

        (b)  If the FCC determines that the transactions contemplated hereby or a portion thereof are inconsistent or violative of FCC rules or regulations, the parties agree that they will negotiate in good faith to amend, modify or restructure the transactions contemplated hereby so as to be consistent with FCC rules and regulations.

        (c)  Seller will use its reasonable best efforts to obtain all Third Party Consents as promptly as practicable after the date of this Agreement. All Third Party Consents shall be in form reasonably satisfactory to Purchaser, and none shall provide for any increase in cost or other change in terms and conditions after the Closing which would be adverse to Purchaser. With respect to the assignment to Purchaser of Seller's roof top rights for the auxiliary antenna located at Valley Commerce Center, the Third Party Consent shall be in writing, shall expire no later than the stated expiration date in 2004 of Seller's studio lease at Valley Commerce Center (it being acknowledged by Purchaser that Seller shall not be required to assign any roof top rights for subsequent periods) and shall not impose any costs for such rights on Purchaser.

        (d)  If any Third Party Consent has not been obtained prior to Closing and prior to Closing an Alternative Arrangement (as defined below) has been obtained with respect to the Assumed Contract to which such Third Party Consent pertains (in each case, a "Deferred Contract"), then the Seller shall retain, until such time as such Third Party Consent shall have been obtained by the Seller, all rights to and liabilities under the Deferred Contract. Until the assignment of the Deferred Contract, (i) the Seller shall continue to use reasonable best efforts and the Purchaser shall cooperate with the Seller to obtain all required consents or approvals to remove any other impediments to such assignment, and (ii) the Seller shall cooperate with the Purchaser (and the Purchaser shall cooperate with the Seller) in any lawful arrangement to provide (to the extent permitted without breach of such Deferred Contract and as determined in the reasonable opinion of the Purchaser) that the Purchaser shall receive the benefits of such Deferred Contract after the Closing Date to the same extent, and without any additional cost or expense to Purchaser and without any diminution in broadcast signal quality, as if such Deferred Contract had been assigned to the Purchaser (such arrangement, an "Alternative Arrangement"). To the extent that the Purchaser receives such benefits, the Purchaser shall assume the Seller's obligations and liabilities thereunder arising on or after the Closing Date with respect to such Alternative Arrangement and the Purchaser shall perform any such obligations of the Seller arising under such Alternative Arrangement. If, subsequent to the Closing, the Seller shall obtain all required consents or approvals required to assign any Deferred Contract, the Deferred Contract for which consent or approval to assign has been obtained shall at that time be deemed to be conveyed, granted,

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bargained, sold, transferred, setover, assigned, released, delivered and confirmed to the Purchaser and assumed by the Purchaser, without need of further action by the Seller or of further documentation except for notice from the Seller to the Purchaser that such consent or approval has been obtained; and from and after the effective date such Deferred Contract is assigned to the Purchaser, (i) no party shall have any further liability under the Alternative Arrangement related thereto, and (ii) the Deferred Contract shall be deemed to be an Assumed Contract.

        (e)  Prior to Closing, Seller shall provide written notice to third parties which have entered into material contracts with any of the Stations (other than the Assumed Contracts) regarding (i) the existence of this Agreement and the transactions contemplated hereby and (ii) that Purchaser is not assuming any obligations of the Seller or the Stations in respect of the contracts with such third parties. Seller shall promptly provide copies of these written notices to Purchaser.

        5.2  Public Announcements.    Prior to the Closing Date, all notices to third parties and other publicity relating to the transaction contemplated by this Agreement shall be jointly planned and agreed to by the Seller and Purchaser; provided, however, that each party shall be entitled to issue a press release announcing the entering of this Agreement and the transactions contemplated hereby in accordance with its respective obligations under federal securities laws.

        5.3  Ordinary Course of Business.    During the period from the date hereof to the Closing Date, unless the prior consent of Purchaser is first obtained, the Seller shall cause the Stations to not knowingly take any action which would cause the conditions set forth in Section 6.1 not to be satisfied as of the Closing Date.

        5.4  Control of the Station.    Prior to the Closing, Purchaser shall not, directly or indirectly, control, supervise, direct, or attempt to control, supervise, or direct, the operations of the Stations; such operations, including complete control and supervision of all of the Stations programs, employees, and policies, shall be the sole responsibility of Seller until the Closing.

        6.    CONDITIONS TO PURCHASER'S CLOSING.

        All obligations of Purchaser under this Agreement shall be subject to the fulfillment at or prior to the Closing of the following conditions, it being understood that Purchaser may, in its sole discretion, waive any or all of such conditions in whole or in part:

        6.1  Representations, Etc.    The Seller shall have performed in all material respects the covenants and agreements contained in this Agreement that are to be performed by it at or prior to the Closing. The representations and warranties of the Seller contained in this Agreement shall be true and correct in all material respects as of the Closing Date with the same effect as though made at such time (except as contemplated or permitted by this Agreement).

        6.2  FCC Order.    The FCC Order shall, at the Closing, be in full force and effect.

        6.3  No Adverse Litigation.    No order or temporary, preliminary or permanent injunction or restraining order shall have been entered and no action, suit or other legal or administrative proceeding by any court or governmental authority shall be pending on the Closing Date which may have the effect of (i) making any of the transactions contemplated hereby illegal or (ii) materially adversely affecting the value of the Purchased Assets.

        6.4  Third Party Consents.    Each of the Third Party Consents shall have been obtained without the imposition of any conditions adverse to Purchaser; provided, that if an Alternative Arrangement has been entered into in lieu of a Third Party Consent for an Assumed Contract as contemplated by Section 5.1(d), no consents or approvals with respect to such Assumed Contract shall be required under this Section 6.4.

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        6.5  Closing Deliveries.    Purchaser shall have received each of the documents or items required to be delivered to it pursuant to Section 8.1 hereof.

        7.    CONDITIONS TO SELLER'S CLOSING.

        All obligations of the Seller under this Agreement shall be subject to the fulfillment at or prior to the Closing of the following conditions, it being understood that the Seller may, in its sole discretion, waive any or all of such conditions in whole or in part:

        7.1  Representations, Etc.    Purchaser shall have performed in all material respects the covenants and agreements contained in this Agreement that are to be performed by Purchaser as of the Closing, and the representations and warranties of Purchaser contained in this Agreement shall be true and correct in all material respects as of the Closing Date with the same effect as though made at such time (except as contemplated or permitted by this Agreement).

        7.2  FCC Order.    The FCC Order shall, at the Closing, be in full force and effect.

        7.3  No Adverse Litigation.    No order or temporary, preliminary or permanent injunction or restraining order shall have been entered and no action, suit or other legal or administrative proceeding by any court or governmental authority shall be pending on the Closing Date which may have the effect of (i) making any of the transactions contemplated hereby illegal or (ii) materially adversely affecting the value of the Purchased Assets.

        7.4  Closing Deliveries.    The Seller shall have received each of the documents or items required to be delivered to it pursuant to Section 8.2.

        8.    DOCUMENTS TO BE DELIVERED AT CLOSING.

        8.1  To Purchaser.    At the Closing, there shall be delivered to Purchaser:

        (a)  The bills of sale, agreements of assignment and similar instruments of transfer to the Purchased Assets contemplated by Section 2.3 hereof.

        (b)  A certificate, signed by an executive officer of Seller, as to the fulfillment of the conditions set forth in Sections 6.1 through 6.3 hereof.

        (c)  The Business Records.

        (d)  A rescission agreement in the form of Exhibit A hereto (the "Rescission Agreement").

        8.2  To Seller.    At the Closing, there shall be delivered to the Seller:

        (a)  The purchase price contemplated by Section 2.1 hereof, in the form of wire transfer or cashier's or certified check as the Seller may direct.

        (b)  A certificate, signed by an executive officer of Purchaser, as to the fulfillment of the conditions set forth in Sections 7.1 through 7.3 hereof.

        (c)  An assumption agreement pursuant to which Purchaser shall assume the Assumed Contracts.

        (d)  The Rescission Agreement.

        9.    SURVIVAL.

        All representations, warranties, covenants and agreements made by any party to this Agreement or pursuant hereto shall be deemed to be material and to have been relied upon by the parties hereto and shall survive the Closing; provided, however, that notice of any claim against the Purchaser or Seller, whether made under the indemnification provisions hereof or otherwise, based on a breach of a representation, warranty, covenant or agreement must be given within one year from the Closing Date. The representations and warranties hereunder shall not be affected or diminished by any investigation

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at any time by or on behalf of the party for whose benefit such representations and warranties were made. No representation or warranty contained herein shall be deemed to be made at any time after the date of this Agreement.

        10.  INDEMNIFICATION OF PURCHASER.

        From and after the Closing and subject to the limitations set forth in Sections 9 and 12, the Seller shall indemnify and hold Purchaser harmless from, against, for and in respect of:

        (a)  any and all damages, losses, settlement payments, obligations, liabilities, claims, actions or causes of action and encumbrances (collectively, together with the costs and expenses described in clause (c) below, but excluding any indirect, consequential, incidental, exemplary or punitive or other special damages or lost profits regardless of the theory of recovery, being referred to herein as "Damages") suffered, sustained, incurred or required to be paid by Purchaser because of the breach of any written representation, warranty, agreement or covenant of the Seller contained in this Agreement;

        (b)  any and all Damages arising out of the ownership and operation of the Stations at all times prior to the Closing Date (other than the contractual liabilities specifically assumed as set forth in Section 1.2 hereto); and

        (c)  all reasonable costs and expenses (including, without limitation, attorneys' fees, interest and penalties) incurred by Purchaser in connection with any action, suit, proceeding, demand, assessment or judgment incident to any of the matters indemnified against in this Section 10;

provided, however, that after Closing, Seller shall have no liability to Purchaser hereunder until, and only to the extent that, Purchaser's aggregate Damages exceed $50,000, up to a maximum aggregate amount of $17,000,000.

        11.  INDEMNIFICATION OF SELLER.

        From and after the Closing and subject to the limitations set forth in Sections 9 and 12, Purchaser shall indemnify and hold the Seller harmless from, against, for and in respect of:

        (a)  any and all Damages suffered, sustained, incurred or required to be paid by the Seller because of the breach of any written representation, warranty, agreement or covenant of Purchaser contained in this Agreement;

        (b)  any and all Damages arising out of the ownership and operation of the Stations on and after the Closing Date, except to the extent the same arises from a breach of any written representation, warranty, agreement or covenant of the Seller contained in this Agreement or any document, certificate or agreement executed in connection with this Agreement;

        (c)  any and all Damages arising out of the Assumed Contracts in respect of periods on and after the Closing Date; and

        (d)  all reasonable costs and expenses (including, without limitation, attorneys' fees, interest and penalties) incurred by the Seller in connection with any action, suit, proceeding, demand, assessment or judgment incident to any of the matters indemnified against in this Section 11;

provided, however, that after Closing, Purchaser shall have no liability to Seller hereunder until, and only to the extent that, Seller's aggregate Damages exceed $50,000.

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        12.  GENERAL RULES REGARDING INDEMNIFICATION.

        The obligations and liabilities of each indemnifying party hereunder with respect to claims resulting from the assertion of liability by the other party or indemnified third parties shall be subject to the following terms and conditions:

        (a)  The indemnified party shall give prompt written notice (which in no event shall exceed 30 days from the date on which the indemnified party first became aware of such claim or assertion) to the indemnifying party of any claim which might give rise to a claim by the indemnified party against the indemnifying party based on the indemnity agreements contained in Section 10 or 11 hereof, stating the nature and basis of said claims and the amounts thereof, to the extent known;

        (b)  If any action, suit or proceeding is brought against the indemnified party with respect to which the indemnifying party may have liability under the indemnity agreements contained in Section 10 or 11 hereof, the action, suit or proceeding shall, upon the written acknowledgment by the indemnifying party that it is obligated to indemnify under such indemnity agreement, be defended (including all proceedings on appeal or for review which counsel for the indemnified party shall deem appropriate) by the indemnifying party. The indemnified party shall have the right to employ its own counsel in any such case, but the fees and expenses of such counsel shall be at the indemnified party's own expense unless (A) the employment of such counsel and the payment of such fees and expenses both shall have been specifically authorized in writing by the indemnifying party in connection with the defense of such action, suit or proceeding, or (B) counsel to such indemnified party shall have reasonably concluded and specifically notified the indemnifying party that there may be specific defenses available to it which are different from or additional to those available to the indemnifying party or that such action, suit or proceeding involves or could have an effect upon matters beyond the scope of the indemnity agreements contained in Sections 10 and 11 hereof, in any of which events the indemnifying party, to the extent made necessary by such defenses, shall not have the right to direct the defense of such action, suit or proceeding on behalf of the indemnified party. In the latter such case only that portion of such fees and expenses of the indemnified party's separate counsel reasonably related to matters covered by the indemnity agreements contained in Section 10 or 11 hereof shall be borne by the indemnifying party. The indemnified party shall be kept fully informed of such action, suit or proceeding at all stages thereof whether or not it is represented by separate counsel.

        (c)  The indemnified party shall make available to the indemnifying party and its attorneys and accountants all books and records of the indemnified party relating to such proceedings or litigation and the parties hereto agree to render to each other such assistance as they may reasonably require of each other in order to ensure the proper and adequate defense of any such action, suit or proceeding.

        (d)  The indemnified party shall not make any settlement of any claims without the written consent of the indemnifying party, which consent shall not be unreasonably withheld or delayed.

        (e)  If any claims are made by third parties against an indemnified party for which an indemnifying party would be liable, and it appears likely that such claims might also be covered by the indemnified party's insurance policies, the indemnified party shall make a timely claim under such policies and to the extent that such party obtains any recovery from such insurance, such recovery shall be offset against any sums due from an indemnifying party (or shall be repaid by the indemnified party to the extent that an indemnifying party has already paid any such amounts). The parties acknowledge, however, that if an indemnified party is self-insured as to any matters, either directly or through an insurer which assesses retroactive premiums based on loss experience, then to the extent that the indemnified party bears the economic burden of any claims through self-insurance or retroactive premiums or insurance ratings, the indemnifying party's obligation shall only be reduced by any insurance recovery in excess of the amount paid or to be paid by the indemnified party in insurance premiums.

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        (f)    Except as herein expressly provided, each of Purchaser and Seller acknowledges and agrees that its sole and exclusive remedy after Closing with respect to any and all claims and causes of action under or that are reasonably related to this Agreement, and the other transactions contemplated hereby, the Stations, the Purchased Assets and the Assumed Contracts shall be pursuant to the indemnification provisions set forth in Sections 10 through 12 hereof.

        13.  TERMINATION; RISK OF LOSS.

        13.1 Termination.    This Agreement may be terminated by the mutual consent of Purchaser and Seller, or, if the terminating party is not then in material breach of its obligations hereunder, upon written notice as follows:

        (a)  by Purchaser if Seller is in material breach of its obligations hereunder, such that the conditions set forth in Section 6.1 would not be satisfied as of the Closing, and such breach has not been cured by Seller within 30 days of written notice of such breach (or such longer period of time if the breach cannot be reasonably cured within 30 days and Seller is diligently attempting to cure such breach);

        (b)  by Seller if Purchaser is in material breach of its obligations hereunder, such that the conditions set forth in Section 7.1 would not be satisfied as of the Closing, and such breach has not been cured by Purchaser within 30 days of written notice of such breach (or such longer period of time if the breach cannot be reasonably cured within 30 days and Purchaser is diligently attempting to cure such breach);

        (c)  by either Purchaser or Seller if the FCC denies the FCC Application in an order that has become a Final Order, or has designated the FCC application for a hearing; or

        (d)  by either Purchaser or Seller if the Closing has not occurred on or before June 30, 2002 (the "Outside Date").

        13.2 Risk of Loss.    The Seller shall bear the risk of all damage to, loss of or destruction of any of the Purchased Assets between the date of this Agreement and the Closing Date. If any material portion of the Purchased Assets (other than items that are obsolete and not necessary for the continued operations of the Stations) shall suffer any material damage or destruction prior to the Closing Date, the Seller shall promptly notify the Purchaser in writing of such damage or destruction, shall promptly take all necessary steps to restore, repair or replace such assets at its sole expense, and shall advise the Purchaser in writing of the estimated cost to complete such restoration, repair or replacement and all amounts actually paid as of the date of the estimate. If necessary and provided that Seller is diligently pursuing such restoration, repair or replacement, the Closing Date and Outside Date shall be extended to give the Seller sufficient time to accomplish such restoration, repair or replacement.

        14.  SPECIFIC PERFORMANCE

        The parties acknowledge that the Purchased Assets and the transactions contemplated hereby are unique, that a failure by Seller or Purchaser to complete such transactions will cause irreparable injury to the other, and that actual damages for any such failure may be difficult to ascertain and may be inadequate. Consequently, Seller and Purchaser agree that each shall be entitled, in the event of a default by the other, to specific performance of any of the provisions of this Agreement in addition to any other legal or equitable remedies to which the non-defaulting party may otherwise be entitled. In the event any action is brought, the prevailing party shall be entitled to recover court costs, arbitration expenses and reasonable attorneys' fees.

        15.  MISCELLANEOUS PROVISIONS.

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        15.1 Expenses.    Except as otherwise expressly provided herein, each party shall pay the fees and expenses incurred by it in connection with the transactions contemplated by this Agreement. If any action is brought for breach of this Agreement or to enforce any provision of this Agreement, the prevailing party shall be entitled to recover court costs and reasonable attorneys' fees. The Purchaser and Seller shall bear equally the transfer taxes, recording fees and similar costs imposed in connection with the transfer of the real property assets included in the Purchased Assets.

        15.2 Prorations.    All items of income and expense arising from the operation of the Stations with respect to the Purchased Assets and the Assumed Contracts on or before the close of business on the Closing Date shall be for the account of the Seller and thereafter shall be for the account of the Purchaser. Proration of the items described below between the Seller and the Purchaser shall be effective as of 11:59 p.m., local time, on such date and shall occur as follows with respect to those rights, liabilities and obligations of the Seller transferred to and assumed by the Purchaser hereunder.

        (a)  Liability for state and local taxes assessed on the Purchased Assets payable with respect to the tax year in which the Closing Date falls and the annual FCC regulatory fee for the Stations payable with respect to the year in which the Closing Date falls shall each be prorated as between the Seller and the Purchaser on the basis of the number of days of the tax year elapsed to and including such date.

        (b)  Prepaid items, deposits, credits and accruals such as water, electricity, telephone, other utility and service charges, lease expenses, license fees (if any) and payments under any contracts or utility services to be assumed by the Purchaser shall be prorated between the Seller and the Purchaser on the basis of the period of time to which such liabilities, prepaid items and accruals apply.

        All prorations shall be made and paid insofar as feasible on the Closing Date; any prorations not made on such date shall be made as soon as practicable (not to exceed 90 days) thereafter. The Seller and the Purchaser agree to assume, pay and perform all costs, liabilities and expenses allocated to each of them pursuant to this Section 15.2.

        15.3 Amendment.    This Agreement may be amended at any time but only by an instrument in writing signed by the parties hereto.

        15.4 Notices.    All notices and other communications hereunder shall be in writing and shall be deemed given if mailed by certified mail, return receipt requested, or by nationally recognized "next-day" delivery service, to the parties at the addresses set forth below (or at such other address for a party as shall be specified by like notice), or sent by facsimile to the number set forth below (or such other number for a party as shall be specified by proper notice hereunder):

If to the Purchaser:

        3102 Oak Lawn, Suite 215
        Dallas, Texas 75219
        Attn: President
        Fax: (214) 525-7750

If to the Seller:

        Big City Radio, Inc.
        c/o Metromedia Company
        One Meadowlands Plaza
        East Rutherford, NJ 07073-2137
        Attention: David A. Persing

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        Telephone: (201) 531-8022
        Facsimile (201) 531-2803

        15.5 Assignment.    This Agreement may not be assigned by either party without the prior consent of the other party, which shall not be unreasonably withheld; provided, however, that Purchaser may assign its rights and obligations to any of its direct or indirect wholly-owned subsidiaries, without the requirement of consent of the Seller, so long as Hispanic Broadcasting Corporation remains obligated for Purchaser's obligations hereunder, including payment of the purchase price in accordance with Section 2.1, and so long as such assignment does not delay the consummation of the transactions contemplated by this Agreement. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, heirs and permitted assigns.

        15.6 Counterparts.    This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

        15.7 Headings.    The headings of the Sections of this Agreement are inserted for convenience only and shall not constitute a part hereof.

        15.8 Entire Agreement.    This Agreement and the documents referred to herein contain the entire understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties, conveyances or undertakings other than those expressly set forth herein. This Agreement supersedes any prior agreements and understandings between the parties with respect to the subject matter.

        15.9 Waiver.    No attempted waiver of compliance with any provision or condition hereof, or consent pursuant to this Agreement, will be effective unless evidenced by an instrument in writing by the party against whom the enforcement of any such waiver or consent is sought.

        15.10    Governing Law.    This Agreement shall be governed by and construed in accordance with the laws of the State of Arizona. Venue with respect to any dispute or controversy shall be proper only in Phoenix, Arizona.

        15.11    Certain Definitions.    Unless otherwise stated in this Agreement, the following terms when used herein shall have the meanings assigned to them below (such meanings to be equally applicable to both the singular and plural forms of the terms defined).

        "affiliates" of a party shall mean persons or entities that directly, or indirectly through one or more intermediaries, control or are controlled by, or are under common control with, such party.

        "FCC Licenses" shall mean the licenses, construction permits or authorizations issued by or pending before the FCC that are described in the FCC Application.

        "Material Adverse Effect" or "material adverse effect" shall mean a material adverse effect on the Purchased Assets taken as a whole, but shall specifically exclude any material adverse effect caused by (a) factors affecting the radio industry generally or the market in which the Stations operate, (b) general, national, regional or local economic or financial conditions, (c) new governmental or legislative laws, rules or regulations, (d) the failure to achieve any financial or operational targets, projections or milestones set forth in any Seller business plan or budget, or (e) liquidity or cash flow deficiencies affecting Seller's business, properties, assets, liabilities, financial condition, results of operations, properties or prospects.

        "Permitted Liens" means (a) liens for taxes not yet due and payable; (b) landlord's liens and liens for property taxes not delinquent; (c) statutory liens that were created in the ordinary course of business and which are not delinquent; (d) restrictions or rights granted to governmental authorities under applicable law to the extent not arising pursuant to any defaults thereunder; (e) zoning, building, or similar restrictions relating to or affecting property which do not arise in connection with a violation of applicable law; (f) non-monetary liens on the Transmitter and Studio Sites that do not materially affect the current use and enjoyment thereof in the operation of the Stations or the value of such Transmitter and Studio Sites; (g) customary utility and similar easements affecting property; and (h) liens and charges for which a proration adjustment is made pursuant to Section 15.2 of this Agreement.

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        15.12    Intended Beneficiaries.    The rights and obligations contained in this Agreement are hereby declared by the parties hereto to have been provided expressly for the exclusive benefit of such entities as set forth herein and shall not benefit, and do not benefit, any unrelated third parties.

        15.13    Mutual Contribution.    The parties to this Agreement and their counsel have mutually contributed to its drafting. Consequently, no provision of this Agreement shall be construed against any party on the ground that such party drafted the provision or caused it to be drafted or the provision contains a covenant of such party.

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

HBC Phoenix, Inc.
By:	/s/  JEFFREY T. HINSON
HBC License Corporation
By:	/s/  JEFFREY T. HINSON
Big City Radio, Inc.
By:	/s/  SYLVIA KESSEL
Big City Radio-Phoenix, L.L.C.
By:	/s/  SYLVIA KESSEL

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ASSET PURCHASE AGREEMENT

EX-10.14

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Exhibit 10.14

ASSET PURCHASE AGREEMENT

        THIS ASSET PURCHASE AGREEMENT, dated August 10, 2001 ("Agreement"), is by and among Claire B. Benezra (the "Seller"), HBC License Corporation ("HBC License") and HBC-Las Vegas, Inc. ("HBC Las Vegas" and together with HBC License, the "Purchaser").

W I T N E S S E T H:

        WHEREAS, Seller is the licensee of radio station KPXC(FM) (the "Station"), licensed to Indian Springs, Nevada and authorized by the Federal Communications Commission (the "Commission" or "FCC") to operate at 99.3 MHz; and

        WHEREAS, the Seller desires to sell to Purchaser, and Purchaser desires to purchase from the Seller, certain of the radio station properties and assets relating to the Station as described herein under the terms and conditions herein set forth;

        NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, the parties hereto agree as follows:

1.

PURCHASE AND SALE OF ASSETS.

        1.1    Purchase and Sale of Assets.    Subject to the conditions set forth in this Agreement, at the Closing (as defined hereinafter), the Seller shall assign, transfer, convey and deliver to Purchaser, and Purchaser shall purchase from the Seller, all right, title and interest in and to the following assets relating to the Station (the "Purchased Assets"), free and clear of all liens, security interests, charges, encumbrances and rights of others (other than liens and charges for which a proration adjustment is made pursuant to Section 15.2 hereof):

        (a)  All call letters, licenses, construction permits or authorizations issued by or pending before the FCC or any other governmental authority for use in the operation of the Station that are set forth on Schedule 1.1(a) attached hereto, together with any and all renewals, extensions and modifications thereof (the "Governmental Licenses");

        (b)  All of the broadcast equipment assets listed on Schedule 1.1(b) hereto (the "Equipment Assets"); and

        (c)  Unless as may be otherwise required by law, all materials maintained in the FCC public inspection file relating to the Station, technical data, political advertising records and all other books and records related solely to the Purchased Assets, such as property tax records, correspondence with and documents pertaining to governmental authorities and similar third parties regarding the Purchased Assets (the "Business Records").

        The foregoing notwithstanding, in no event shall the Purchased Assets be deemed to include (i) the cash and cash equivalents of the Seller or the Station (except for any normal and customary deposits with respect to the Purchased Assets), (ii) any accounts receivable, notes receivable or other receivables of the Seller (including tax refunds), (iii) any intellectual property (other than the Business Records) of the Station, (iv) any office equipment, vehicles, promotional materials, tapes and record libraries and similar items in respect of the Station, (v) securities of any kind owned by Seller, (vi) insurance contracts or proceeds thereof or (vii) claims arising out of acts occurring before the Closing Date.

        1.2    No Assumed Liabilities.    Notwithstanding any provision in this Agreement, Purchaser does not assume and shall in no event be liable for any debt, obligation, responsibility or liability of the Station or Seller, including without limitation, employee obligations, taxes, accounts payable and time sales and barter obligations of the Station.

2.

CONSIDERATION; CLOSING.

        2.1    Purchase Price.    The consideration to be received by the Seller in exchange for the Purchased Assets shall be $16.0 million, which shall be paid in full to Seller by wire transfer at the Closing.

        2.2    Time of Closing.

        (a)  A closing (the "Closing") for the sale and purchase of the Purchased Assets shall be held at the offices of the Seller in Las Vegas, Nevada (or such other place as may be agreed upon by the parties in writing). The Closing shall occur on such date (the "Closing Date") that is the 60th day after the FCC Order (defined below) has become a "Final Order." The Closing shall be deemed to be effective as of 12:01 a.m. on the Closing Date.

        (b)  In order to consummate the transfer of the Purchased Assets, Seller and Purchaser agree to use their reasonable best efforts to file, within three business days after the Effective Date (as defined in Section 2.5 below), an assignment of license application (the "FCC Application") requesting FCC consent to the assignment from the Licensee to HBC License of all Governmental Licenses relating to the operation of the Station. The parties agree that the FCC Application will be prosecuted with best reasonable efforts, in good faith and with due diligence. The parties agree to use their reasonable best efforts to file additional information or amendments requested by the FCC orally or in writing within five business days after such request and, in any event, to commence preparation of such additional information or amendments immediately upon request and to complete and file the same with the FCC as rapidly as practical. Each party will be solely responsible for the expenses incurred by it in the preparation, filing and prosecution of the FCC Application (it being understood that the parties will bear equally the FCC filing fee). As used herein, the term "FCC Order" shall mean that the FCC staff has granted or given its consent, without any condition materially adverse to Purchaser or Seller, to the assignment of the Governmental Licenses; and the term "Final Order" shall mean that the FCC Order shall have become final, that the time period for filing any protests, requests for stay, reconsideration by the FCC, petitions for rehearing or appeal of such order shall have expired, and that no protest, request for stay, reconsideration by the FCC, petition for rehearing or appeal of such order shall be pending.

        2.3    Closing Procedure.    At the Closing, the Seller shall deliver to Purchaser such bills of sale, instruments of assignment, transfer and conveyance and similar documents as Purchaser shall reasonably request. Against such delivery, Purchaser shall issue and deliver to Seller the purchase price in accordance with Section 2.1 above and Schedule 3.9 herein. Each party will cause to be prepared, executed and delivered all other documents required to be delivered by such party pursuant to this Agreement and all other appropriate and customary documents as another party or its counsel may reasonably request for the purpose of consummating the transactions contemplated by this Agreement. All actions taken at the Closing shall be deemed to have been taken simultaneously at the time the last of any such actions is taken or completed.

        2.4    Allocation of Purchase Price.    The Purchase Price shall be allocated among the Purchased Assets in a manner based upon an appraisal prepared by Bond & Pecaro (whose fees shall be paid by Purchaser), but which shall be reasonably acceptable to Seller. Seller and Purchaser agree to use the allocations determined pursuant to this Section 2.4 for all tax purposes, including without limitation, those matters subject to Section 1060 of the Internal Revenue Code of 1986, as amended.

        2.5    Construction Permit Modification; Effective Date.    Seller agrees to file, or has already filed, with the FCC, at Purchaser's sole expense, a modification to Seller's existing construction permit, such modification to be in form reasonably acceptable to Purchaser (the "CP Modification"), to allow (conditional upon the Closing) the operation of the Station at a site designated by Purchaser. To the extent practicable, such filing shall occur on the date hereof. Upon the acceptance by the FCC of the filing of the CP Modification, this Agreement shall become effective; and the date on which such acceptance by the FCC shall have occurred shall be referred to herein as the "Effective Date" of this Agreement. If the FCC fails to accept the CP Modification within 30 days of the filing or rescinds its

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acceptance within 20 days of the acceptance of the CP Modification, this Agreement shall be terminated without liability to any party hereunder.

3.

REPRESENTATIONS AND WARRANTIES OF THE SELLER.

        The Seller hereby represents and warrants to the Purchaser, as follows:

        3.1    Due Authorization.    This Agreement constitutes the legal, valid and binding obligation of the Seller, enforceable against her in accordance with its terms, except as may be limited by the availability of equitable remedies or by applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally.

        3.2    Execution and Delivery.    Neither the execution and delivery by the Seller of this Agreement nor the consummation by her of the transactions contemplated hereby will: (i) subject to the FCC Order, violate any statute, law, rule or regulation or any order, writ, injunction or decree of any court or governmental authority, which violation, either individually or in the aggregate, might reasonably be expected to have a material adverse effect on Purchaser's ownership of the Purchased Assets; or (ii) violate or conflict with or constitute a default under (or give rise to any right of termination, cancellation or acceleration under), or result in the creation of any lien on any of the Purchased Assets pursuant to, any material agreement, indenture, mortgage or other instrument to which the Seller is a party or by which she may be bound or affected.

        3.3    Consents.    No approval, authorization, consent, order or other action of, or filing with, any governmental authority or administrative agency is required in connection with the execution and delivery by the Seller of this Agreement or the consummation of the transactions contemplated hereby or thereby, other than those of the FCC. Except as described in Schedule 5.4, there are no consents or other action required of any non-governmental person or entity which are required to be obtained by Seller in connection with the execution and delivery by Seller of this Agreement and the consummation of the transactions contemplated hereby.

        3.4    Title to Personal Property Assets.    The Seller is the sole and exclusive legal owner of all right, title and interest in, and has good and marketable title to, all of the Purchased Assets constituting personal property, free and clear of liens, claims and encumbrances.

        3.5    Condition of Equipment Assets.    The Equipment Assets are in good condition and working order, ordinary wear and tear excepted, and are suitable for the uses for which intended, free from any known defects except such minor defects that do not interfere with the continued use thereof.

        3.6    Governmental Licenses.    Schedule 1.1(a) lists and accurately describes all of the Governmental Licenses necessary for the lawful ownership and operation of the Station and the conduct of their businesses, except where the failure to hold such Governmental License would not have a material adverse effect on the Station. The Seller has furnished to Purchaser true and accurate copies of all of the Governmental Licenses. Each such Governmental License is in full force and effect and is valid under applicable federal, state and local laws; the Station is being operated in compliance in all material respects with the Communications Act of 1934, as amended, and all rules, regulations and policies of the FCC; and to the knowledge of the Seller, no event has occurred which (whether with or without notice, lapse of time or the happening or occurrence of any other event) is reasonably likely to result in the revocation or termination of any Governmental License or the imposition of any restriction of such a nature as might adversely affect the ownership or operation of the Station as now conducted, except for proceedings of a legislative or rule-making nature intended to affect the broadcasting industry generally. The Station, its physical facilities, electrical and mechanical systems and transmitting and studio equipment are being operated in all material respects in accordance with the specifications of the Governmental Licenses. The Governmental Licenses are unimpaired by any act or omission of the Seller or any of the Seller's representatives, and the Seller has fulfilled and performed all of her obligations with respect to the Governmental Licenses and has full power and authority

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thereunder. No application, action or proceeding is pending for the renewal or modification of any of the Governmental Licenses, except as described on Schedule 1.1(a). No event has occurred which, individually or in the aggregate, and with or without the giving of notice or the lapse of time or both, would constitute ground for revocation thereof and would have a materially adverse effect on the business of the Station.

        3.7    Reports.    The Seller has duly filed all reports required to be filed by law or applicable rule, regulation, order, writ or decree of any court, governmental commission, body or instrumentality and has made payment of all charges and other payments, if any, shown by such reports to be due and payable, except where the failure to so file or make payment would not have a material adverse effect upon the operations of the Station. All reports required to be filed by the Seller with the FCC with respect to the Station have been filed, except where the failure to so file would not materially and adversely affect the business of the Station or which challenges the validity or propriety of any of the transactions contemplated by this Agreement. Such reports and disclosures are complete and accurate in all material respects.

        3.8    Taxes.    All tax reports and returns required to be filed by or relating to the Purchased Assets or operations of the Station (including sales, use, property and employment taxes) have been filed with the appropriate federal, state and local governmental agencies, and there have been paid all taxes, penalties, interest, deficiencies, assessments or other charges due as reflected on the filed returns or claimed to be due by such federal, state or local taxing authorities (other than taxes, deficiencies, assessments or claims which are being contested in good faith and which in the aggregate are not material); (ii) Seller has not received any written notice of any examinations or audits pending or unresolved examinations or audit issues with respect to the Seller's federal, state or local tax returns; (iii) all additional taxes, if any, assessed as a result of such examinations or audits have been paid; and (iv) to Seller's knowledge, there are no pending claims or proceedings relating to, or asserted for, taxes, penalties, interest, deficiencies or assessments against the Purchased Assets.

        3.9    Litigation.    Except as set forth on Schedule 3.9, there is no order of any court, governmental agency or authority and no action, suit, proceeding or investigation, judicial, administrative or otherwise that is pending or, to Seller's knowledge, threatened against or affecting the Station which, if adversely determined, might materially and adversely affect the business of the Station or which challenges the validity or propriety of any of the transactions contemplated by this Agreement.

        3.10    Business Records.    The Seller has, and after the Closing, Purchaser will have, the right to use the Business Records included in the Purchased Assets, free and clear of any royalty or other payment obligations.

        3.11    Finders and Brokers.    Except for Kalil & Co. (the fees of which shall be borne by Seller), no person has as a result of any agreement entered into by the Seller any valid claim against any of the parties hereto for a brokerage commission, finder's fee or other like payment.

4.

REPRESENTATIONS AND WARRANTIES OF PURCHASER.

        Purchaser hereby represents and warrants to the Seller as follows:

        4.1    Organization and Good Standing.    Purchaser is a corporation duly incorporated, validly existing and in good standing under the laws of Delaware and has all requisite power and authority to own and lease its properties and carry on its business as currently conducted.

        4.2    Due Authorization.    Subject to the FCC Order, Purchaser has full power and authority to enter into this Agreement and to carry out its obligations hereunder. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of Purchaser. This Agreement has been duly executed and delivered by Purchaser and constitutes the legal, valid and binding obligation of Purchaser, enforceable

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against it in accordance with its respective terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally or general equitable principles.

        4.3    Execution and Delivery.    Neither the execution and delivery by Purchaser of this Agreement nor the consummation of the transactions contemplated hereby will: (i) conflict with or result in a breach of the agreement of limited partnership of Purchaser; (ii) subject to the FCC Order, violate any law, statute, rule or regulation or any order, writ, injunction or decree of any court or governmental authority; or (iii) violate or conflict with or constitute a default under (or give rise to any right of termination, cancellation or acceleration under) any indenture, mortgage, lease, contract or other instrument to which Purchaser is a party or by which it is bound or affected.

        4.4    Consents.    No consent, approval, authorization, license, exemption of, filing or registration with any court, governmental authority, commission, board, bureau, agency or instrumentality, domestic or foreign, is required by Purchaser in connection with the execution and delivery of this Agreement or the consummation by it of any transaction contemplated hereby, other than the consent of the FCC. No approval, authorization or consent of any other third party is required in connection with the execution and delivery by Purchaser of this Agreement and the consummation of the transactions contemplated hereby, except as may have been previously obtained by Purchaser. Purchaser warrants that it is legally qualified to become a licensee of the Station and is aware of no impediment to the approval by the FCC of the assignment of the Governmental Licenses to Purchaser.

        4.5    Finders and Brokers.    No person has as a result of any agreement entered into by the Purchaser any valid claim against any of the parties hereto for a brokerage commission, finder's fee or other like payment.

        4.6    Purchaser's Qualification.    The Purchaser is in all material respects qualified legally, financially and otherwise to be the licensee of the Station, and has or shall have sufficient resources to pay in full all amounts due to the Seller under this Agreement when such amounts are due.

5.

CERTAIN COVENANTS AND AGREEMENTS.

        5.1    Consummation of the Transaction.

        (a)  Each of the Seller and Purchaser shall take all reasonable action necessary to consummate the sale of the Purchased Assets and will use all necessary and reasonable means at its disposal to obtain (and cooperate with the other party in obtaining) all necessary approvals of governmental authorities required to enable it to consummate the sale of the Purchased Assets. Except as otherwise provided herein, each of the Seller and Purchaser acknowledges and agrees that it shall pay all costs, fees and expenses incurred by it in obtaining such necessary consents and approvals. Each party shall make all filings, applications, statements and reports to all governmental agencies or entities which are required to be made prior to the Closing Date by or on its behalf pursuant to any statute, rule or regulation in connection with the sale of the Purchased Assets, and copies of all such filings, applications, statements and reports shall be provided to the other.

        (b)  If the FCC determines that the assignment of the Governmental Licenses to Purchaser are inconsistent or violative of FCC rules or regulations, the parties agree that they will negotiate in good faith to amend, modify or restructure the transactions contemplated hereby so as to be consistent with FCC rules and regulations.

        5.2    Public Announcements.    Prior to the Closing Date, all notices to third parties and other publicity relating to the transaction contemplated by this Agreement (other than Purchaser's press releases issued pursuant to its obligations under federal securities laws) shall be jointly planned and agreed to by the Seller and Purchaser.

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        5.3    Ordinary Course of Business.    During the period from the date hereof to the Closing Date, unless the prior consent of Purchaser is first obtained, the Seller shall cause the Station to not knowingly take any action which would cause any representation contained in Article 3 to be untrue as of the Closing Date.

        5.4    Construction Permit Activities.    Seller will take all actions necessary to prosecute the CP Modification, in consultation with Purchaser; provided, however, that Seller will not be required to undertake any expense in connection therewith other than as described in Schedule 3.3. Seller also hereby authorizes Purchaser, at its sole expense, to prepare and Seller will file an application with the FCC in respect of a second transmitter ("booster") site for the Station, so long as Seller determines that such filing to be in the public interest.

6.

CONDITIONS TO PURCHASER'S CLOSING.

        All obligations of Purchaser under this Agreement shall be subject to the fulfillment at or prior to the Closing of the following conditions, it being understood that Purchaser may, in its sole discretion, waive any or all of such conditions in whole or in part:

        6.1    Representations, Etc.    The Seller shall have performed in all material respects the covenants and agreements contained in this Agreement that are to be performed by her at or prior to the Closing, and the representations and warranties of the Seller contained in this Agreement shall be true and correct in all material respects as of the Closing Date with the same effect as though made at such time (except as contemplated or permitted by this Agreement).

        6.2    Governmental Consents.    All consents and approvals from the FCC and governmental agencies required to consummate the transactions contemplated by this Agreement shall have been obtained and shall be in full force and effect, and the FCC Order shall have become a Final Order.

        6.3    No Adverse Litigation.    No order or temporary, preliminary or permanent injunction or restraining order shall have been entered and no action, suit or other legal or administrative proceeding by any court or governmental authority, agency or other person shall be pending or threatened on the Closing Date which may have the effect of (i) making any of the transactions contemplated hereby illegal or (ii) materially adversely affecting the value of the Purchased Assets.

        6.4    Closing Deliveries.    Purchaser shall have received each of the documents or items required to be delivered to it pursuant to Section 8.1 hereof.

7.

CONDITIONS TO SELLER'S CLOSING.

        All obligations of the Seller under this Agreement shall be subject to the fulfillment at or prior to the Closing of the following conditions, it being understood that the Seller may, in its sole discretion, waive any or all of such conditions in whole or in part:

        7.1    Representations, Etc.    Purchaser shall have performed in all material respects the covenants and agreements contained in this Agreement that are to be performed by Purchaser as of the Closing, and the representations and warranties of Purchaser contained in this Agreement shall be true and correct in all material respects as of the Closing Date with the same effect as though made at such time (except as contemplated or permitted by this Agreement).

        7.2    Consents.    All consents and approvals from the FCC and governmental agencies required to consummate the transactions contemplated by this Agreement shall have been obtained and shall be in full force and effect, and the FCC Order shall have become a Final Order.

        7.3    No Adverse Litigation.    No order or temporary, preliminary or permanent injunction or restraining order shall have been entered and no action, suit or other legal or administrative proceeding by any court or governmental authority, agency or other person shall be pending or

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threatened on the Closing Date which may have the effect of (i) making any of the transactions contemplated hereby illegal or (ii) materially adversely affecting the value of the Purchased Assets.

        7.4    Closing Deliveries.    The Seller shall have received each of the documents or items required to be delivered to it pursuant to Section 8.2.

8.

DOCUMENTS TO BE DELIVERED AT CLOSING.

        8.1    To Purchaser.    At the Closing, there shall be delivered to Purchaser:

        (a)  The warranty deeds, bills of sale, agreements of assignment and similar instruments of transfer to the Purchased Assets contemplated by Section 2.3 hereof.

        (b)  A certificate, signed by an executive officer of Seller, as to the fulfillment of the conditions set forth in Sections 6.1 through 6.3 hereof.

        (c)  The Business Records.

        8.2    To Seller.    At the Closing, there shall be delivered to the Seller:

        (a)  The purchase price contemplated by Section 2.1 hereof, in the form of wire transfer or cashier's or certified check as the Seller may direct.

        (b)  A certificate, signed by an executive officer of Purchaser, as to the fulfillment of the conditions set forth in Sections 7.1 and 7.2 hereof.

9.

SURVIVAL.

        All representations, warranties, covenants and agreements made by any party to this Agreement or pursuant hereto shall be deemed to be material and to have been relied upon by the parties hereto and shall survive the Closing; provided, however, that notice of any claim against the Purchaser or Seller, whether made under the indemnification provisions hereof or otherwise, based on a breach of a representation, warranty, covenant or agreement must be given within one year from the Closing Date. The representations and warranties hereunder shall not be affected or diminished by any investigation at any time by or on behalf of the party for whose benefit such representations and warranties were made. No representation or warranty contained herein shall be deemed to be made at any time after the date of this Agreement.

10.

INDEMNIFICATION OF PURCHASER.

        Subject to the limitations set forth in Sections 9 and 12, the Seller shall indemnify and hold Purchaser harmless from, against, for and in respect of:

        (a)  any and all damages, losses, settlement payments, obligations, liabilities, claims, actions or causes of action and encumbrances (collectively, together with the costs and expenses described in clause (c) below, being referred to herein as "Damages") suffered, sustained, incurred or required to be paid by Purchaser because of the breach of any written representation, warranty, agreement or covenant of the Seller contained in this Agreement;

        (b)  any and all liabilities, obligations, claims and demands arising out of the ownership and operation of the Station at all times prior to the Closing Date; and

        (c)  all reasonable costs and expenses (including, without limitation, attorneys' fees, interest and penalties) incurred by Purchaser in connection with any action, suit, proceeding, demand, assessment or judgment incident to any of the matters indemnified against in this Section 10;

provided, however, that after Closing, Seller shall have no liability to Purchaser hereunder until, and only to the extent that, Purchaser's aggregate Damages exceed $25,000.

11.

INDEMNIFICATION OF SELLER.

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        Subject to the limitations set forth in Sections 9 and 12, Purchaser shall indemnify and hold the Seller harmless from, against, for and in respect of:

        (a)  any and all Damages suffered, sustained, incurred or required to be paid by the Seller because of the breach of any written representation, warranty, agreement or covenant of Purchaser contained in this Agreement;

        (b)  any and all liabilities, obligations, claims and demands arising out of the ownership and operation of the Station on and after the Closing Date, except to the extent the same arises from a breach of any written representation, warranty, agreement or covenant of the Seller contained in this Agreement or any document, certificate or agreement executed in connection with this Agreement; or

        (c)  all reasonable costs and expenses (including, without limitation, attorneys' fees, interest and penalties) incurred by the Seller in connection with any action, suit, proceeding, demand, assessment or judgment incident to any of the matters indemnified against in this Section 11;

provided, however, that after Closing, Purchaser shall have no liability to Seller hereunder until, and only to the extent that, Seller's aggregate Damages exceed $25,000 (provided, however, that such limitation will not apply to any claims made against Purchaser in respect of the litigation described in Schedule 3.9).

12.

GENERAL RULES REGARDING INDEMNIFICATION.

        The obligations and liabilities of each indemnifying party hereunder with respect to claims resulting from the assertion of liability by the other party or indemnified third parties shall be subject to the following terms and conditions:

        (a)  The indemnified party shall give prompt written notice (which in no event shall exceed 30 days from the date on which the indemnified party first became aware of such claim or assertion) to the indemnifying party of any claim which might give rise to a claim by the indemnified party against the indemnifying party based on the indemnity agreements contained in Section 10 or 11 hereof, stating the nature and basis of said claims and the amounts thereof, to the extent known;

        (b)  If any action, suit or proceeding is brought against the indemnified party with respect to which the indemnifying party may have liability under the indemnity agreements contained in Section 10 or 11 hereof, the action, suit or proceeding shall, upon the written acknowledgment by the indemnifying party that it is obligated to indemnify under such indemnity agreement, be defended (including all proceedings on appeal or for review which counsel for the indemnified party shall deem appropriate) by the indemnifying party. The indemnified party shall have the right to employ its own counsel in any such case, but the fees and expenses of such counsel shall be at the indemnified party's own expense unless the employment of such counsel and the payment of such fees and expenses both shall have been specifically authorized in writing by the indemnifying party in connection with the defense of such action, suit or proceeding. The indemnified party shall be kept fully informed of such action, suit or proceeding at all stages thereof whether or not it is represented by separate counsel.

        (c)  The indemnified party shall make available to the indemnifying party and its attorneys and accountants all books and records of the indemnified party relating to such proceedings or litigation and the parties hereto agree to render to each other such assistance as they may reasonably require of each other in order to ensure the proper and adequate defense of any such action, suit or proceeding.

        (d)  The indemnified party shall not make any settlement of any claims without the written consent of the indemnifying party, which consent shall not be unreasonably withheld or delayed.

        (e)  If any claims are made by third parties against an indemnified party for which an indemnifying party would be liable, and it appears likely that such claims might also be covered by the indemnified party's insurance policies, the indemnified party shall make a timely claim under such policies and to

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the extent that such party obtains any recovery from such insurance, such recovery shall be offset against any sums due from an indemnifying party (or shall be repaid by the indemnified party to the extent that an indemnifying party has already paid any such amounts). The parties acknowledge, however, that if an indemnified party is self-insured as to any matters, either directly or through an insurer which assesses retroactive premiums based on loss experience, then to the extent that the indemnified party bears the economic burden of any claims through self-insurance or retroactive premiums or insurance ratings, the indemnifying party's obligation shall only be reduced by any insurance recovery in excess of the amount paid or to be paid by the indemnified party in insurance premiums.

        (f)    Except as herein expressly provided, the remedies provided in Sections 10 through 12 hereof shall be cumulative and shall not preclude assertion by any party of any other rights or the seeking of any other rights or remedies against any other party hereto.

13.

TERMINATION; RISK OF LOSS.

        13.1    Termination.    After the Effective Date, this Agreement may be terminated by the mutual consent of Purchaser and Seller, or by either Purchaser or Seller, if the terminating party is not then in material breach of its obligations hereunder, upon written notice to the other upon the occurrence of any of the following:

        (a)  By the terminating party, if the other party is in material breach of its obligations hereunder, and such breach has not been cured by the other party within 30 days of written notice of such breach (or such longer period of time if the breach cannot be reasonably cured within 30 days and the breaching party is diligently attempting to cure such breach);

        (b)  If the FCC denies the FCC Application; or

        (c)  If the Closing has not occurred on or before August 31, 2002.

        13.2    Risk of Loss.    The Seller shall bear the risk of all damage to, loss of or destruction of any of the Purchased Assets between the date of this Agreement and the Closing Date. If any material portion of the Purchased Assets shall suffer any material damage or destruction prior to the Closing Date, the Seller shall promptly notify the Purchaser in writing of such damage or destruction, shall promptly take all necessary steps to restore, repair or replace such assets at its sole expense, and shall advise the Purchaser in writing of the estimated cost to complete such restoration, repair or replacement and all amounts actually paid as of the date of the estimate. The Purchaser or Seller may extend the Closing Date for a period not exceeding 60 days to accomplish such restoration, repair or replacement, but is not required to do so. If such restoration, repair or replacement is not accomplished prior to the Closing Date, as the same may be extended as provided herein, the Purchaser may, at its option:

        (a)  terminate this Agreement upon written notice to Seller; or

        (b)  receive all insurance proceeds paid or payable to Seller, close this Agreement and thereafter complete such restoration, repair or replacement at its sole expense; provided, however, Seller shall have no further liabilities with respect to such damage or destruction after payment to Purchaser of such insurance proceeds.

14.

REMEDIES

        14.1    Purchaser's Exclusive Remedy.    The Seller acknowledges that the Purchased Assets and the transactions contemplated hereby are unique, that a failure by Seller to complete such transactions will cause irreparable injury to the Purchaser, and that actual damages for any such failure may be difficult to ascertain and may be inadequate. Consequently, Seller and Purchaser agree that Purchaser shall be

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entitled, in the event of a default by the Seller, to specific performance of any of the provisions of this Agreement.

        14.2    Seller's Exclusive Remedy.    The Purchaser acknowledges that in the event of a material breach of this Agreement by the Purchaser, the Seller will incur substantial damages that are difficult to quantify. In such event, the sum of $800,000 is deemed by the parties to be a fair and reasonable estimate of the damages that the Seller will incur and accordingly shall be due and payable by the Purchaser as liquidated damages.

        14.3    Court Costs, Attorneys' Fees, etc.    In the event any action is brought to enforce this Agreement, the prevailing party shall be entitled to recover court costs, arbitration and mediation expenses and reasonable attorneys' fees.

15.

MISCELLANEOUS PROVISIONS.

        15.1    Expenses.    Except as otherwise expressly provided herein, each party shall pay the fees and expenses incurred by it in connection with the transactions contemplated by this Agreement. If any action is brought for breach of this Agreement or to enforce any provision of this Agreement, the prevailing party shall be entitled to recover court costs and reasonable attorneys' fees.

        15.2    Prorations.    All items of income and expense arising from the operation of the Station with respect to the Purchased Assets on or before the close of business on the Closing Date shall be for the account of the Seller and thereafter shall be for the account of the Purchaser. Liability for state and local taxes assessed on the Purchased Assets payable with respect to the tax year in which the Closing Date falls and the annual FCC regulatory fee for the Station payable with respect to the year in which the Closing Date falls shall each be prorated as between the Seller and the Purchaser on the basis of the number of days of the tax year elapsed to and including such date. All prorations shall be made and paid insofar as feasible on the Closing Date; any prorations not made on such date shall be made as soon as practicable (not to exceed 90 days) thereafter. The Seller and the Purchaser agree to assume, pay and perform all costs, liabilities and expenses allocated to each of them pursuant to this Section 15.2.

        15.3    Amendment.    This Agreement may be amended at any time but only by an instrument in writing signed by the parties hereto.

        15.4    Notices.    All notices and other communications hereunder shall be in writing and shall be deemed given if mailed by certified mail, return receipt requested, or by nationally recognized "next-day" delivery service, to the parties at the addresses set forth below (or at such other address for a party as shall be specified by like notice), or sent by facsimile to the number set forth below (or such other number for a party as shall be specified by proper notice hereunder):

If to the Purchaser:

3102 Oak Lawn Avenue, Suite 215
Dallas, Texas 75219
Attn: President
Fax: (214) 525-7750

If to the Seller:

Claire B. Benezra
1 Main Street
Las Vegas, Nevada 89101-6370
Fax:

        15.5    Assignment.    This Agreement may not be assigned by either party without the prior consent of the other party, which shall not be unreasonably withheld. This Agreement shall be binding upon

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and inure to the benefit of the parties hereto and their respective successors, heirs and permitted assigns.

        15.6    Counterparts.    This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

        15.7    Headings.    The headings of the Sections of this Agreement are inserted for convenience only and shall not constitute a part hereof.

        15.8    Entire Agreement.    This Agreement and the documents referred to herein contain the entire understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties, conveyances or undertakings other than those expressly set forth herein. This Agreement supersedes any prior agreements and understandings between the parties with respect to the subject matter.

        15.9    Waiver.    No attempted waiver of compliance with any provision or condition hereof, or consent pursuant to this Agreement, will be effective unless evidenced by an instrument in writing by the party against whom the enforcement of any such waiver or consent is sought.

        15.10    Governing Law.    This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada. Venue with respect to any dispute or controversy shall be proper only in Las Vegas, Nevada.

        15.11    Certain Definitions.    As used in this Agreement, "affiliates" of a party shall mean persons or entities that directly, or indirectly through one or more intermediaries, control or are controlled by, or are under common control with, such party.

        15.12    Intended Beneficiaries.    The rights and obligations contained in this Agreement are hereby declared by the parties hereto to have been provided expressly for the exclusive benefit of such entities as set forth herein and shall not benefit, and do not benefit, any unrelated third parties.

        15.13    Mutual Contribution.    The parties to this Agreement and their counsel have mutually contributed to its drafting. Consequently, no provision of this Agreement shall be construed against any party on the ground that such party drafted the provision or caused it to be drafted or the provision contains a covenant of such party.

[signatures on following page]

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SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT

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

/s/  CLAIRE B. BENEZRA Claire B. Benezra

HBC- LAS VEGAS, INC.
By:	/s/  JEFFREY T. HINSON Jeffrey T. Hinson Senior Vice President and CFO

HBC LICENSE CORPORATION
By:	/s/  JEFFREY T. HINSON Jeffrey T. Hinson Senior Vice President and CFO

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ASSET PURCHASE AGREEMENT

EX-10.15

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Exhibit 10.15

ASSET PURCHASE AGREEMENT

        THIS ASSET PURCHASE AGREEMENT is made as of the 10th day of October, 2001, by and between San Joaquin Radio Company, LLC (the "Seller") and Hispanic Broadcasting Corporation (the "Purchaser").

W I T N E S S E T H:

        WHEREAS, Seller is the licensee of radio station KAJZ(FM) (the "Station"), licensed to Merced, California, authorized by the Federal Communications Commission (the "FCC") to operate at 107.7 MHz, and Seller owns the assets which are used in the operation of the Station; and

        WHEREAS, on August 17, 2000, the FCC granted to Seller a construction permit (BPH- 20000515AD) to change the Station's community of license to North Fork, California and operate on Channel 300B1 (107.9MHz) and to upgrade the Station's classification to "B-1", and to change the Station's transmitter site (collectively the "Construction Permit"), and such grant has become a final order; and

        WHEREAS, the Seller desires to sell to Purchaser, and Purchaser desires to purchase from the Seller, certain of the radio station properties and assets relating to the Station as described herein under the terms and conditions herein set forth;

        NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, the parties hereto agree as follows:

1.

PURCHASE AND SALE OF ASSETS.

        1.1    Purchase and Sale of Assets.    Subject to the conditions set forth in this Agreement, at the Closing (as defined hereinafter), the Seller shall assign, transfer, convey and deliver to Purchaser, and Purchaser shall purchase from the Seller, all right, title and interest in and to the following assets relating to the Station (the "Purchased Assets"), free and clear of all liens, security interests, charges, encumbrances and rights of others (other than liens and charges for which a proration adjustment is made pursuant to Section 15.2 hereof):

        (a)  All licenses, construction permits or authorizations issued by or pending before the FCC or any other governmental authority for use in the operation of the Station that are set forth on Schedule 1.1(a) attached hereto, together with any and all renewals, extensions and modifications thereof (the "Governmental Licenses");

        (b)  Subject to Section 1.2 hereof, the leasehold interest at the real property located at the Goat Mountain Tower Site described in Schedule 1.3(a) hereto, or at the Smiley Mt. Site described in Schedule 1.3(b) hereto, as the case may be, together with all broadcast towers and other improvements, fixtures and structures thereon and all rights and appurtenances pertaining thereto, together with replacements thereof and additions thereto made between the date hereof and the Closing (the "Transmitter Site");

        (c)  All antennas, main and back-up transmitters and generators, STL's and other tangible personal property located, or otherwise intended for use, at the Transmitter Site;

        (d)  the "KAJZ" call letters and internet domain names of the Station; and

        (e)  Unless as may be otherwise required by law, the books and records related to the Purchased Assets, such as property tax records, logs, all materials maintained in the FCC public file relating to the Station, technical data, political advertising records and all other records, correspondence with and documents pertaining to governmental authorities and similar third parties (the "Business Records").

The foregoing notwithstanding, in no event shall the Purchased Assets be deemed to include (i) the cash and cash equivalents of the Seller or the Station (except for any normal and customary deposits with respect to the Purchased Assets), (ii) any accounts receivable, notes receivable or other receivables

of the Seller (including tax refunds), (iii) any studio or office equipment and fixtures, vehicles, promotional materials, tapes and record libraries and similar items in respect of the Station, (iv) the Seller's corporate seal, minute books, charter documents, corporate stock record books and other books and records that pertain to the organization of Seller, (v) securities of any kind owned by Seller, (vi) insurance contracts or proceeds thereof or (vii) claims arising out of acts occurring before the Closing Date.

        1.2    Transmitter Site Lease.

        (a)  As promptly as practicable after the date hereof, Seller will present for Purchaser's approval a proposed lease for the Transmitter Site (the "Transmitter Site Lease"). The Transmitter Site Lease shall provide that it will be assignable to a purchaser of the Station without any increase in cost and shall otherwise be in form acceptable to Purchaser.

        (b)  At the Closing, the Purchaser shall assume the specified contractual obligation of the Station for periods on and after the Closing under the Transmitter Site Lease (the "Assumed Contract"), and the Purchaser agrees to pay and perform the Assumed Contract after the Closing Date. In no event shall Purchaser be required to assume obligations under more than one Transmitter Site Lease. Accordingly, if the Closing occurs prior to the completion of broadcast facilities at the Smiley Mt. Site (as described in Section 1.3 herein), Seller shall reimburse Purchaser for any termination costs associated with the existing Transmitter Site Lease as a condition precedent to Purchaser's assumption of any new Transmitter Site Lease. Except as specifically set forth in the preceding sentences, Purchaser does not assume and shall in no event be liable for any debt, obligation, responsibility or liability of the Station or Seller, including without limitation, employee obligations, taxes, accounts payable and time sales and barter obligations of the Station.

        1.3    Construction Permit Modification.    At any time prior to the Closing, Seller may elect to file with the FCC, at Seller's sole expense, an application to modify Seller's existing Construction Permit, such modification application to be in form reasonably acceptable to Purchaser (the "CP Modification"), to allow the operation of the Station at the coordinates, and meeting the other operational criteria, listed on Schedule 1.3(b) hereto (the "Smiley Mt. Site"). If the FCC grants the CP Modification, Seller will as promptly as practicable and at its sole expense construct broadcast facilities in accordance with the terms of the CP Modification and, to the extent that such facilities are completed prior to the Closing Date, commence broadcast operations with such newly constructed facilities.

2.

CONSIDERATION; CLOSING.

        2.1    Purchase Price.    The consideration to be received by the Seller in exchange for the Purchased Assets shall be $5,000,000; provided, however, that such consideration shall be increased by $500,000 if, either as of the Closing Date or at any time within 24 months thereafter, the Station is broadcasting at the Smiley Mt. Site in accordance with the terms of the CP Modification and the terms of this Agreement; provided, however, that any costs incurred by Purchaser in relocating broadcast operations to the Smiley Mt. Site, to the extent not reimbursed by Seller, shall be deducted from such $500,000 additional consideration.

        2.2    Time of Closing.

        (a)  A closing (the "Closing") for the sale and purchase of the Purchased Assets shall be held at the offices of Seller's counsel and occur on such date (the "Closing Date") that is the 60th day after the date on which the FCC Order (defined below) has become a Final Order (defined below). The Closing shall be deemed to be effective as of 12:01 a.m. on the Closing Date. Purchaser shall have the right to accelerate the Closing Date to any date after the occurrence of the FCC Order and will use its reasonable best efforts to do so; provided, however, that Purchaser shall not be required to expend additional funds or relinquish any material rights granted hereunder in using such efforts.

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        (b)  In order to consummate the transfer of the Purchased Assets, Seller and Purchaser agree to use their reasonable best efforts to file, within three business days after the date hereof, an assignment of license application (the "FCC Application") requesting FCC consent to the assignment from the Seller to HBC License Corporation (a subsidiary of Purchaser) of all Governmental Licenses relating to the operation of the Station. The parties agree that the FCC Application will be prosecuted with best reasonable efforts, in good faith and with due diligence. The parties agree to use their reasonable best efforts to file additional information or amendments requested by the FCC orally or in writing within five business days after such request and, in any event, to commence preparation of such additional information or amendments immediately upon request and to complete and file the same with the FCC as rapidly as practical. Each party will be solely responsible for the expenses incurred by it in the preparation, filing and prosecution of the FCC Application (it being understood that the parties will bear equally the FCC filing fee).

        (c)  As used herein, the term "FCC Order" shall mean that the FCC staff has granted or given its consent, without any condition materially adverse to Purchaser or Seller, to both (i) the assignment of the Governmental Licenses and (ii) the Construction Permit (or, in the event that Seller elects to make the filing described in Section 1.3 above, the CP Modification); and the term "Final Order" shall mean that the FCC Order shall have become final, that the time period for filing any protests, requests for stay, reconsideration by the FCC, petitions for rehearing or appeal of such order shall have expired, and that no protest, request for stay, reconsideration by the FCC, petition for rehearing or appeal of such order shall be pending. In each case, the date of the FCC Order for purposes of determining the commencement of the 60 day period prior to Closing, in accordance with Section 2.2(a), shall be the later of the date of the FCC Order with respect to the Governmental Licenses or the Construction Permit.

        2.3    Closing Procedure.    At the Closing, the Seller shall deliver to Purchaser such bills of sale, instruments of assignment, transfer and conveyance and similar documents as Purchaser shall reasonably request. Against such delivery, Purchaser shall (i) issue and deliver to Seller the purchase price in accordance with Section 2.1 above and (ii) execute and deliver the assumption agreement with respect to the Assumed Contract as are contemplated by Section 1.2 hereof. Each party will cause to be prepared, executed and delivered all other documents required to be delivered by such party pursuant to this Agreement and all other appropriate and customary documents as another party or its counsel may reasonably request for the purpose of consummating the transactions contemplated by this Agreement. All actions taken at the Closing shall be deemed to have been taken simultaneously at the time the last of any such actions is taken or completed.

        2.4    Allocation of Purchase Price.    The Purchase Price shall be allocated among the Purchased Assets in a manner as mutually agreed between the parties based upon an appraisal prepared by Bond & Pecaro (whose fees shall be paid by Purchaser). Seller and Purchaser agree to use the allocations determined pursuant to this Section 2.4 for all tax purposes, including without limitation, those matters subject to Section 1060 of the Internal Revenue Code of 1986, as amended.

        2.5    Escrow Deposit.    Concurrently with the execution and delivery of this Agreement, Purchaser shall make a deposit of $250,000 in cash (the "Deposit") with Patrick Communications, L.L.C. (the "Escrow Agent") pursuant to the Escrow Agreement (the "Escrow Agreement"), in the form attached hereto as Exhibit A.

3.

REPRESENTATIONS AND WARRANTIES OF THE SELLER.

        The Seller hereby represents and warrants to the Purchaser, as follows:

        3.1    Organization; Good Standing.    The Seller is a limited liability company, duly organized, validly existing and in good standing under the laws of the state of [California], and has all requisite corporate power and authority to own and lease its properties and carry on its business as currently conducted.

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        3.2    Due Authorization.    Subject to the FCC Order and the Final Order, the Seller has full power and authority to enter into and perform this Agreement and to carry out the transactions contemplated hereby. The Seller has taken all necessary corporate action to approve the execution and delivery of this Agreement and the transactions contemplated hereby. This Agreement constitutes the legal, valid and binding obligation of the Seller, enforceable against it in accordance with its terms, except as may be limited by the availability of equitable remedies or by applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally.

        3.3    Execution and Delivery.    Neither the execution and delivery by the Seller of this Agreement nor the consummation by it of the transactions contemplated hereby will: (i) conflict with or result in a breach of the articles of organization or operating agreement of Seller, (ii) subject to the FCC Order and Final Order, violate any statute, law, rule or regulation or any order, writ, injunction or decree of any court or governmental authority, which violation, either individually or in the aggregate, might reasonably be expected to have a material adverse effect on Purchaser's ownership of the Purchased Assets; or (iii) violate or conflict with or constitute a default under (or give rise to any right of termination, cancellation or acceleration under), or result in the creation of any lien on any of the Purchased Assets pursuant to, any material agreement, indenture, mortgage or other instrument to which the Seller is a party or by which it or its assets may be bound or affected.

        3.4    Governmental Consents.    No approval, authorization, consent, order or other action of, or filing with, any governmental authority or administrative agency is required in connection with the execution and delivery by the Seller of this Agreement or the consummation of the transactions contemplated hereby or thereby, other than those of the FCC.

        3.5    Title to Personal Property Assets.    Except for leased property, the Seller is the sole and exclusive legal owner of all right, title and interest in, and has good and marketable title to, all of the Purchased Assets constituting personal property, free and clear of liens, claims and encumbrances except (i) liens for taxes not yet payable and (ii) the Assumed Contract.

        3.6    Transmitter Site.

        (a)  As of the Closing, Seller will have valid, binding and enforceable leasehold interests, which are (except as disclosed in the Assumed Contract) free and clear of liens, claims, encumbrances, subleases or other restrictions, in and to the Transmitter Site.

        (b)  Seller has not received any notice of, and has no knowledge of, any material violation of any zoning, building, health, fire, water use or similar statute, ordinance, law, regulation or code in connection with the Transmitter Site. To the knowledge of Seller, no fact or condition exists which would result in the termination or impairment of access of the Station to the Transmitter Site or discontinuation of necessary sewer, water, electrical, gas, telephone or other utilities or services.

        (c)  To Seller's knowledge, (i) no hazardous or toxic material (as hereinafter defined) exists in any structure located on, or exists on or under the surface of, the Transmitter Site which is, in any case, in material violation by Seller of applicable environmental law; (ii) no portion of the Transmitter Site has been used by Seller as a landfill or for storage or landfill of hazardous or toxic materials; and (iii) there are not any underground storage tanks that have been installed by Seller at or removed by Seller from the Transmitter Site. For purposes of this Section, "hazardous or toxic material" shall mean waste, substance, materials, smoke, gas or particulate matter designated as hazardous, toxic or dangerous under any environmental law. For purposes of this Section, "environmental law" shall include the Comprehensive Environmental Response Compensation and Liability Act, the Clean Air Act, the Clean Water Act and any other applicable federal, state or local environmental, health or safety law, rule or regulation relating to or imposing liability or standards concerning or in connection with hazardous, toxic or dangerous waste, substance, materials, smoke, gas or particulate matter.

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        3.7    Condition of Assets.    All of the Purchased Assets viewed as a whole and not on an asset by asset basis are in good condition and working order, ordinary wear and tear excepted, and are suitable for the uses for which intended, free from any known defects except such minor defects that do not interfere with the continued use thereof.

        3.8    Governmental Licenses.    Schedule 1.1(a) lists and accurately describes all of the Governmental Licenses necessary for the lawful ownership and operation of the Station and the conduct of their businesses, except where the failure to hold such Governmental License would not have a material adverse effect on the Station. The Seller has furnished to Purchaser true and accurate copies of all of the Governmental Licenses. Each such Governmental License is in full force and effect and is valid under applicable federal, state and local laws; the Station is being operated in compliance in all material respects with the Communications Act of 1934, as amended, and all rules, regulations and policies of the FCC; and to the knowledge of the Seller, no event has occurred which (whether with or without notice, lapse of time or the happening or occurrence of any other event) is reasonably likely to result in the revocation or termination of any Governmental License or the imposition of any restriction of such a nature as might adversely affect the ownership or operation of the Station as now conducted, except for proceedings of a legislative or rule-making nature intended to affect the broadcasting industry generally. The Station, its physical facilities, electrical and mechanical systems and transmitting and studio equipment are being operated in all material respects in accordance with the specifications of the Governmental Licenses. The Governmental Licenses are unimpaired by any act or omission of the Seller or any of the Seller's officers, directors or employees and the Seller has fulfilled and performed all of its obligations with respect to the Governmental Licenses and has full power and authority thereunder. No application, action or proceeding is pending for the renewal or modification of any of the Governmental Licenses. No event has occurred which, individually or in the aggregate, and with or without the giving of notice or the lapse of time or both, would constitute ground for revocation thereof and would have a materially adverse effect on the business or financial condition of the Station.

        3.9    Reports.    The Seller has duly filed all reports required to be filed by law or applicable rule, regulation, order, writ or decree of any court, governmental commission, body or instrumentality and has made payment of all charges and other payments, if any, shown by such reports to be due and payable, except where the failure to so file or make payment would not have a material adverse effect upon the operations of the Station. All reports required to be filed by the Seller with the FCC with respect to the Station have been filed, except where the failure to so file would not materially and adversely affect the business, operations, properties, assets or conditions (financial or otherwise) of the Station or which challenges the validity or propriety of any of the transactions contemplated by this Agreement. Such reports and disclosures are complete and accurate in all material respects.

        3.10    Taxes.    All tax reports and returns required to be filed by or relating to the Purchased Assets have been filed with the appropriate federal, state and local governmental agencies, and there have been paid all taxes, penalties, interest, deficiencies, assessments or other charges due with respect to such taxes, as reflected on the filed returns or claimed to be due by such federal, state or local taxing authorities (other than taxes, deficiencies, assessments or claims which are being contested in good faith and which in the aggregate are not material); (ii) Seller has not received any written notice of any examinations or audits pending or unresolved examinations or audit issues with respect to the Seller's federal, state or local tax returns that could adversely affect the Purchased Assets; (iii) all additional taxes, if any, assessed as a result of such examinations or audits have been paid; and (iv) to Seller's knowledge, there are no pending claims or proceedings relating to, or asserted for, taxes, penalties, interest, deficiencies or assessments against the Purchased Assets.

        3.11    Litigation.    There is no order of any court, governmental agency or authority and no action, suit, proceeding or investigation, judicial, administrative or otherwise that is pending or, to Seller's knowledge, threatened against or affecting the Station which, if adversely determined, might materially

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and adversely affect the business, operations, properties, assets or conditions (financial or otherwise) of the Station or which challenges the validity or propriety of any of the transactions contemplated by this Agreement.

        3.12    Contracts and Agreements.    The Station is not in default with respect to the Assumed Contract, and, as of the Closing Date, the Station will have paid all sums and performed all obligations under the Assumed Contract which are required to be paid or performed prior to the Closing Date.

        3.13    Business Records.    The Seller has, and after the Closing, Purchaser will have, the right to use the Business Records included in the Purchased Assets, free and clear of any royalty or other payment obligations.

        3.14    Third Party Consents.    The only consents from any person or entity which are required to be obtained by Seller in connection with the execution and delivery by Seller of this Agreement and the consummation of the transactions contemplated hereby are set forth on Schedule 3.14 (the "Third Party Consents"), and Seller anticipates being able to obtain all Third Party Consents as promptly as practicable after the execution and delivery of this Agreement.

        3.15    Finders and Brokers.    Except for Patrick Communications, L.L.C. (the fees and expenses of which will be borne solely by Seller), no person has as a result of any agreement entered into by the Seller any valid claim against any of the parties hereto for a brokerage commission, finder's fee or other like payment.

4.

REPRESENTATIONS AND WARRANTIES OF PURCHASER.

        Purchaser hereby represents and warrants to the Seller as follows:

        4.1    Organization and Good Standing.    Purchaser is a corporation duly organized, validly existing and in good standing under the laws of Delaware and has all requisite power and authority to own and lease its properties and carry on its business as currently conducted.

        4.2    Due Authorization.    Subject to the FCC Order and Final Order, Purchaser has full power and authority to enter into this Agreement and to carry out its obligations hereunder. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of Purchaser. This Agreement has been duly executed and delivered by Purchaser and constitutes the legal, valid and binding obligation of Purchaser, enforceable against it in accordance with its respective terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally or general equitable principles.

        4.3    Execution and Delivery.    Neither the execution and delivery by Purchaser of this Agreement nor the consummation of the transactions contemplated hereby will: (i) conflict with or result in a breach of the certificate of incorporation or bylaws of Purchaser; (ii) subject to the FCC Order and Final Order, violate any law, statute, rule or regulation or any order, writ, injunction or decree of any court or governmental authority; or (iii) violate or conflict with or constitute a default under (or give rise to any right of termination, cancellation or acceleration under) any indenture, mortgage, lease, contract or other instrument to which Purchaser is a party or by which it is bound or affected.

        4.4    Consents.    No consent, approval, authorization, license, exemption of, filing or registration with any court, governmental authority, commission, board, bureau, agency or instrumentality, domestic or foreign, is required by Purchaser in connection with the execution and delivery of this Agreement or the consummation by it of any transaction contemplated hereby, other than the consent of the FCC. No approval, authorization or consent of any other third party is required in connection with the execution and delivery by Purchaser of this Agreement and the consummation of the transactions contemplated hereby, except as may have been previously obtained by Purchaser. Purchaser warrants

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that it is legally qualified to become a licensee of the Station and is aware of no impediment to the approval by the FCC of the assignment of the Governmental Licenses to Purchaser.

        4.5    Finders and Brokers.    No person has as a result of any agreement entered into by the Purchaser any valid claim against any of the parties hereto for a brokerage commission, finder's fee or other like payment.

        4.6    Purchaser's Qualification.    The Purchaser is in all material respects qualified legally, financially and otherwise to be the licensee of the Station, and has or shall have sufficient resources to pay in full all amounts due to the Seller under this Agreement when such amounts are due.

5.

CERTAIN COVENANTS AND AGREEMENTS.

        5.1    Consummation of the Transaction.

        (a)  Each of the Seller and Purchaser shall take all reasonable action necessary to consummate the transactions contemplated by this Agreement and will use all necessary and reasonable means at its disposal to obtain (and cooperate with the other party in obtaining) all necessary approvals of the FCC and Third Party Consents required to enable it to consummate the transactions contemplated by this Agreement. Except as otherwise provided herein, each of the Seller and Purchaser acknowledges and agrees that it shall pay all costs, fees and expenses incurred by it in obtaining such necessary consents and approvals. Each party shall make all filings, applications, statements and reports to all governmental agencies or entities which are required to be made prior to the Closing Date by or on its behalf pursuant to any statute, rule or regulation in connection with the transactions contemplated by this Agreement, and copies of all such filings, applications, statements and reports shall be provided to the other.

        (b)  If the FCC determines that the transactions contemplated hereby or a portion thereof are inconsistent or violative of FCC rules or regulations, the parties agree that they will negotiate in good faith to amend, modify or restructure the transactions contemplated hereby so as to be consistent with FCC rules and regulations.

        (c)  Seller will use its reasonable best efforts to obtain all Third Party Consents within 30 days after the date of this Agreement. All Third Party Consents shall be in form reasonably satisfactory to Purchaser.

        5.2    Public Announcements.    Prior to the Closing Date, all notices to third parties and other publicity relating to the transaction contemplated by this Agreement (other than Purchaser's press releases issued pursuant to its obligations under federal securities laws) shall be jointly planned and agreed to by the Seller and Purchaser.

        5.3    Ordinary Course of Business.    During the period from the date hereof to the Closing Date, unless the prior consent of Purchaser is first obtained, the Seller shall cause the Station to not knowingly take any action which would cause any representation contained in Article 3 to be untrue as of the Closing Date.

6.

CONDITIONS TO PURCHASER'S CLOSING.

        All obligations of Purchaser under this Agreement shall be subject to the fulfillment at or prior to the Closing of the following conditions, it being understood that Purchaser may, in its sole discretion, waive any or all of such conditions in whole or in part:

        6.1    Representations, Etc.    The Seller shall have performed in all material respects the covenants and agreements contained in this Agreement that are to be performed by it at or prior to the Closing, and the representations and warranties of the Seller contained in this Agreement shall be true and correct in all material respects as of the Closing Date with the same effect as though made at such time (except as contemplated or permitted by this Agreement).

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        6.2    FCC Order.    The FCC Order shall, at the Closing, be in full force and effect and shall have become a Final Order.

        6.3    No Adverse Litigation.    No order or temporary, preliminary or permanent injunction or restraining order shall have been entered and no action, suit or other legal or administrative proceeding by any court or governmental authority shall be pending or threatened on the Closing Date which may have the effect of (i) making any of the transactions contemplated hereby illegal or (ii) materially adversely affecting the value of the Purchased Assets.

        6.4    Review of Broadcasting Signal Quality.    Purchaser, in its sole discretion, shall be satisfied with its engineering review of the quality and coverage of the broadcast signal transmitted by the Station; provided, however, that this condition shall be deemed to be satisfied if Purchaser does not terminate this Agreement within 30 days after the date on which Seller has notified Purchaser in writing that it has completed the construction of broadcast facilities as contemplated by the Construction Permit and is broadcasting from such newly constructed facilities.

        6.5    Closing Deliveries.    Purchaser shall have received each of the documents or items required to be delivered to it pursuant to Section 8.1 hereof.

7.

CONDITIONS TO SELLER'S CLOSING.

        All obligations of the Seller under this Agreement shall be subject to the fulfillment at or prior to the Closing of the following conditions, it being understood that the Seller may, in its sole discretion, waive any or all of such conditions in whole or in part:

        7.1    Representations, Etc.    Purchaser shall have performed in all material respects t he covenants and agreements contained in this Agreement that are to be performed by Purchaser as of the Closing, and the representations and warranties of Purchaser contained in this Agreement shall be true and correct in all material respects as of the Closing Date with the same effect as though made at such time (except as contemplated or permitted by this Agreement).

        7.2    FCC Order.    The FCC Order shall, at the Closing, be in full force and effect.

        7.3    No Adverse Litigation.    No order or temporary, preliminary or permanent injunction or restraining order shall have been entered and no action, suit or other legal or administrative proceeding by any court or governmental authority shall be pending or threatened on the Closing Date which may have the effect of (i) making any of the transactions contemplated hereby illegal or (ii) materially adversely affecting the value of the Purchased Assets.

        7.4    Closing Deliveries.    The Seller shall have received each of the documents or items required to be delivered to it pursuant to Section 8.2.

8.

DOCUMENTS TO BE DELIVERED AT CLOSING.

        8.1    To Purchaser.    At the Closing, there shall be delivered to Purchaser:

        (a)  The bills of sale, agreements of assignment and similar instruments of transfer to the Purchased Assets contemplated by Section 2.3 hereof.

        (b)  A certificate, signed by an executive officer of Seller, as to the fulfillment of the conditions set forth in Sections 6.1 through 6.3 hereof.

        (c)  The Business Records.

        (d)  Such other documents and materials as may be reasonably requested by Purchaser to consummate the transactions contemplated hereby.

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        8.2    To Seller.    At the Closing, there shall be delivered to the Seller:

        (a)  The purchase price contemplated by Section 2.1 hereof, in the form of wire transfer or cashier's or certified check as the Seller may direct.

        (b)  A certificate, signed by an executive officer of Purchaser, as to the fulfillment of the conditions set forth in Sections 7.1 and 7.2 hereof.

        (c)  An assumption agreement pursuant to which Purchaser shall assume the Assumed Contract.

        (d)  Such other documents and materials as may be reasonably requested by Seller to consummate the transactions contemplated hereby.

9.

SURVIVAL.

        All representations, warranties, covenants and agreements made by any party to this Agreement or pursuant hereto shall be deemed to be material and to have been relied upon by the parties hereto and shall survive the Closing; provided, however, that notice of any claim against the Purchaser or Seller, whether made under the indemnification provisions hereof or otherwise, based on a breach of a representation, warranty, covenant or agreement must be given within one year from the Closing Date. The representations and warranties hereunder shall not be affected or diminished by any investigation at any time by or on behalf of the party for whose benefit such representations and warranties were made. No representation or warranty contained herein shall be deemed to be made at any time after the date of this Agreement.

10.

INDEMNIFICATION OF PURCHASER.

        Subject to the limitations set forth in Sections 9 and 12, the Seller shall indemnify and hold Purchaser harmless from, against, for and in respect of:

        (a)  any and all damages, losses, settlement payments, obligations, liabilities, claims, actions or causes of action and encumbrances (collectively, together with the costs and expenses described in clause (c) below, being referred to herein as "Damages") suffered, sustained, incurred or required to be paid by Purchaser because of the breach of any written representation, warranty, agreement or covenant of the Seller contained in this Agreement;

        (b)  any and all liabilities, obligations, claims and demands arising out of the ownership and operation of the Station at all times prior to the Closing Date (other than the contractual liabilities specifically assumed as set forth in Section 1.2 hereto); and

        (c)  all reasonable costs and expenses (including, without limitation, attorneys' fees, interest and penalties) incurred by Purchaser in connection with any action, suit, proceeding, demand, assessment or judgment incident to any of the matters indemnified against in this Section 10;

provided, however, that after Closing, Seller shall have no liability to Purchaser hereunder until, and only to the extent that, Purchaser's aggregate Damages exceed $25,000.

11.

INDEMNIFICATION OF SELLER.

        Subject to the limitations set forth in Sections 9 and 12, Purchaser shall indemnify and hold the Seller harmless from, against, for and in respect of:

        (a)  any and all Damages suffered, sustained, incurred or required to be paid by the Seller because of the breach of any written representation, warranty, agreement or covenant of Purchaser contained in this Agreement;

        (b)  any and all liabilities, obligations, claims and demands arising out of the ownership and operation of the Station on and after the Closing Date, except to the extent the same arises from a

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breach of any written representation, warranty, agreement or covenant of the Seller contained in this Agreement or any document, certificate or agreement executed in connection with this Agreement;

        (c)  in respect of periods on and after the Closing Date, the Assumed Contract; and

        (d)  all reasonable costs and expenses (including, without limitation, attorneys' fees, interest and penalties) incurred by the Seller in connection with any action, suit, proceeding, demand, assessment or judgment incident to any of the matters indemnified against in this Section 11;

provided, however, that after Closing, Purchaser shall have no liability to Seller hereunder until, and only to the extent that, Seller's aggregate Damages exceed $25,000.

12.

GENERAL RULES REGARDING INDEMNIFICATION.

        The obligations and liabilities of each indemnifying party hereunder with respect to claims resulting from the assertion of liability by the other party or indemnified third parties shall be subject to the following terms and conditions:

        (a)  The indemnified party shall give prompt written notice (which in no event shall exceed 30 days from the date on which the indemnified party first became aware of such claim or assertion) to the indemnifying party of any claim which might give rise to a claim by the indemnified party against the indemnifying party based on the indemnity agreements contained in Section 10 or 11 hereof, stating the nature and basis of said claims and the amounts thereof, to the extent known;

        (b)  If any action, suit or proceeding is brought against the indemnified party with respect to which the indemnifying party may have liability under the indemnity agreements contained in Section 10 or 11 hereof, the action, suit or proceeding shall, upon the written acknowledgment by the indemnifying party that it is obligated to indemnify under such indemnity agreement, be defended (including all proceedings on appeal or for review which counsel for the indemnified party shall deem appropriate) by the indemnifying party. The indemnified party shall have the right to employ its own counsel in any such case, but the fees and expenses of such counsel shall be at the indemnified party's own expense unless (A) the employment of such counsel and the payment of such fees and expenses both shall have been specifically authorized in writing by the indemnifying party in connection with the defense of such action, suit or proceeding, or (B) counsel to such indemnified party shall have reasonably concluded and specifically notified the indemnifying party that there may be specific defenses available to it which are different from or additional to those available to the indemnifying party or that such action, suit or proceeding involves or could have an effect upon matters beyond the scope of the indemnity agreements contained in Sections 10 and 11 hereof, in any of which events the indemnifying party, to the extent made necessary by such defenses, shall not have the right to direct the defense of such action, suit or proceeding on behalf of the indemnified party. In the latter such case only that portion of such fees and expenses of the indemnified party's separate counsel reasonably related to matters covered by the indemnity agreements contained in Section 10 or 11 hereof shall be borne by the indemnifying party. The indemnified party shall be kept fully informed of such action, suit or proceeding at all stages thereof whether or not it is represented by separate counsel.

        (c)  The indemnified party shall make available to the indemnifying party and its attorneys and accountants all books and records of the indemnified party relating to such proceedings or litigation and the parties hereto agree to render to each other such assistance as they may reasonably require of each other in order to ensure the proper and adequate defense of any such action, suit or proceeding.

        (d)  The indemnified party shall not make any settlement of any claims without the written consent of the indemnifying party, which consent shall not be unreasonably withheld or delayed.

        (e)  If any claims are made by third parties against an indemnified party for which an indemnifying party would be liable, and it appears likely that such claims might also be covered by the indemnified party's insurance policies, the indemnified party shall make a timely claim under such policies and to

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the extent that such party obtains any recovery from such insurance, such recovery shall be offset against any sums due from an indemnifying party (or shall be repaid by the indemnified party to the extent that an indemnifying party has already paid any such amounts). The parties acknowledge, however, that if an indemnified party is self-insured as to any matters, either directly or through an insurer which assesses retroactive premiums based on loss experience, then to the extent that the indemnified party bears the economic burden of any claims through self-insurance or retroactive premiums or insurance ratings, the indemnifying party's obligation shall only be reduced by any insurance recovery in excess of the amount paid or to be paid by the indemnified party in insurance premiums.

        (f)    Except as herein expressly provided, the remedies provided in Sections 10 through 12 hereof shall be cumulative and shall not preclude assertion by any party of any other rights or the seeking of any other rights or remedies against any other party hereto.

13.

TERMINATION AND RESCISSION RIGHTS; RISK OF LOSS.

        13.1    Termination.    This Agreement shall automatically be terminated without liability to either party if Purchaser exercises its right to do so under Section 6.4. This Agreement may also be terminated by the mutual consent of Purchaser and Seller, or by either Purchaser or Seller, if the terminating party is not then in material breach of its obligations hereunder, upon written notice to the other upon the occurrence of any of the following:

        (a)  By the terminating party, if the other party is in material breach of its obligations hereunder, and such breach has not been cured by the other party within 30 days of written notice of such breach (or such longer period of time if the breach cannot be reasonably cured within 30 days and the breaching party is diligently attempting to cure such breach);

        (b)  If the FCC denies the FCC Application; or

        (c)  If the Closing has not occurred on or before May 31, 2002 (provided, however, that such date may be extended by the Purchaser for such additional period of time to obtain any required governmental consent, including the CP Modification, provided that Purchaser continues to use its reasonable best efforts to obtain such consent).

If Seller terminates this Agreement due to Purchaser's failure to consummate the Closing on the Closing Date or if this Agreement is otherwise terminated by Seller pursuant to Section 13.1(a), then the Deposit and any interest accrued thereon shall be paid to Seller, and such payment shall constitute liquidated damages. It is understood and agreed that such liquidated damages amount represents Purchaser's and Seller's reasonable estimate of actual damages and does not constitute a penalty. Further, Seller shall be entitled to the recovery of reasonable attorneys' fees and court costs in addition to such liquidated damages.

        13.2    Rescission.    In the event the parties elect to close prior to the time the FCC Order has become a Final Order, Purchaser and Seller shall enter into rescission agreement to be mutually agreed upon which provides for unwinding the transaction in the event a Final Order is not obtained.

        13.3    Risk of Loss.    The Seller shall bear the risk of all damage to, loss of or destruction of any of the Purchased Assets between the date of this Agreement and the Closing Date. If any material portion of the Purchased Assets shall suffer any material damage or destruction prior to the Closing Date, the Seller shall promptly notify the Purchaser in writing of such damage or destruction, shall promptly take all necessary steps to restore, repair or replace such assets at its sole expense, and shall advise the Purchaser in writing of the estimated cost to complete such restoration, repair or replacement and all amounts actually paid as of the date of the estimate. The Purchaser or Seller may extend the Closing Date for a period not exceeding 45 days to accomplish such restoration, repair or replacement, but is not required to do so. If such restoration, repair or replacement is not

11

accomplished prior to the Closing Date, as the same may be extended as provided herein, the Purchaser may, at its option:

        (a)  terminate this Agreement upon written notice to Seller; or

        (b)  receive all insurance proceeds paid or payable to Seller, close this Agreement and thereafter complete such restoration, repair or replacement at its sole expense; provided, however, Seller shall have no further liabilities with respect to such damage or destruction after payment to Purchaser of such insurance proceeds.

14.

SPECIFIC PERFORMANCE

        The parties acknowledge that the Purchased Assets and the transactions contemplated hereby are unique, that a failure by Seller or Purchaser to complete such transactions will cause irreparable injury to the other, and that actual damages for any such failure may be difficult to ascertain and may be inadequate. Consequently, Seller and Purchaser agree that each shall be entitled, in the event of a default by the other, to specific performance of any of the provisions of this Agreement in addition to any other legal or equitable remedies to which the non-defaulting party may otherwise be entitled. In the event any action is brought, the prevailing party shall be entitled to recover court costs, arbitration expenses and reasonable attorneys' fees.

15.

MISCELLANEOUS PROVISIONS.

        15.1    Expenses.    Except as otherwise expressly provided herein, each party shall pay the fees and expenses incurred by it in connection with the transactions contemplated by this Agreement. If any action is brought for breach of this Agreement or to enforce any provision of this Agreement, the prevailing party shall be entitled to recover court costs and reasonable attorneys' fees.

        15.2    Prorations.    All items of income and expense arising from the operation of the Station with respect to the Purchased Assets and the Assumed Contract on or before the close of business on the Closing Date shall be for the account of the Seller and thereafter shall be for the account of the Purchaser. Proration of the items described below between the Seller and the Purchaser shall be effective as of 11:59 p.m., local time, on such date and shall occur as follows with respect to those rights, liabilities and obligations of the Seller transferred to and assumed by the Purchaser hereunder.

        (a)  Liability for state and local taxes assessed on the Purchased Assets payable with respect to the tax year in which the Closing Date falls and the annual FCC regulatory fee for the Station payable with respect to the year in which the Closing Date falls shall each be prorated as between the Seller and the Purchaser on the basis of the number of days of the tax year elapsed to and including such date.

        (b)  Prepaid items, deposits, credits and accruals such as water, electricity, telephone, other utility and service charges, lease expenses, license fees (if any) and payments under any contracts or utility services to be assumed by the Purchaser shall be prorated between the Seller and the Purchaser on the basis of the period of time to which such liabilities, prepaid items and accruals apply.

All prorations shall be made and paid insofar as feasible on the Closing Date; any prorations not made on such date shall be made as soon as practicable (not to exceed 90 days) thereafter. The Seller and the Purchaser agree to assume, pay and perform all costs, liabilities and expenses allocated to each of them pursuant to this Section 15.2.

        15.3    Amendment.    This Agreement may be amended at any time but only by an instrument in writing signed by the parties hereto.

        15.4    Notices.    All notices and other communications hereunder shall be in writing and shall be deemed given if mailed by certified mail, return receipt requested, or by nationally recognized "next-day" delivery service, to the parties at the addresses set forth below (or at such other address for

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a party as shall be specified by like notice), or sent by facsimile to the number set forth below (or such other number for a party as shall be specified by proper notice hereunder):

If to the Purchaser:

3102 Oak Lawn, Suite 215
Dallas, Texas 75219
Attn: President
Fax: (214) 525-7750

If to the Seller:

P.O. Box 2837
Merced, California 95344
Fax: (208) 723-2772

with copy to:

Gary Schwartz
Narvid Scott Schwartz & Frangle
15060 Ventura Boulevard, Suite 490
Sherman Oaks, California 91403
Fax: (818) 907-9896

        15.5    Assignment.    This Agreement may not be assigned by either party without the prior consent of the other party, which shall not be unreasonably withheld; provided, however, that Purchaser may assign its rights and obligations to any of its direct or indirect subsidiaries, without the requirement of consent of the Seller, so long as Hispanic Broadcasting Corporation remains obligated hereunder for payment of the Purchase Price. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, heirs and permitted assigns.

        15.6    Counterparts.    This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

        15.7    Headings.    The headings of the Sections of this Agreement are inserted for convenience only and shall not constitute a part hereof.

        15.8    Entire Agreement.    This Agreement and the documents referred to herein contain the entire understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties, conveyances or undertakings other than those expressly set forth herein. This Agreement supersedes any prior agreements and understandings between the parties with respect to the subject matter.

        15.9    Waiver.    No attempted waiver of compliance with any provision or condition hereof, or consent pursuant to this Agreement, will be effective unless evidenced by an instrument in writing by the party against whom the enforcement of any such waiver or consent is sought.

        15.10    Governing Law.    This Agreement shall be governed by and construed in accordance with the laws of the State of California without regard to its principles of conflict of law. PURCHASER AND SELLER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING IN ANY WAY TO THIS AGREEMENT, AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE DECIDED SOLELY BY A JUDGE. Purchaser and Seller hereby acknowledge that they have each been represented by counsel in the negotiation, execution and delivery of this Agreement and that their lawyers have fully explained the meaning of this Agreement, including in particular the jury trial waiver.

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        15.11    Certain Definitions.    As used in this Agreement, "affiliates" of a party shall mean persons or entities that directly, or indirectly through one or more intermediaries, control or are controlled by, or are under common control with, such party.

        15.12    Intended Beneficiaries.    The rights and obligations contained in this Agreement are hereby declared by the parties hereto to have been provided expressly for the exclusive benefit of such entities as set forth herein and shall not benefit, and do not benefit, any unrelated third parties.

        15.13    Mutual Contribution.    The parties to this Agreement and their counsel have mutually contributed to its drafting. Consequently, no provision of this Agreement shall be construed against any party on the ground that such party drafted the provision or caused it to be drafted or the provision contains a covenant of such party.

        15.14    Attorneys' Fees.    In the event of any dispute between the parties to this Agreement, Seller or Purchaser, as the case may be, shall reimburse the prevailing party for its reasonable attorneys' fees and other costs incurred in enforcing its rights or exercising its remedies under this Agreement. Such right of reimbursement shall be in addition to any other right or remedy that the prevailing party may have under this Agreement.

        15.15    1031 Exchange.    Purchaser will cooperate with Seller in effectuating a like-kind exchange under Section 1031 of the Internal Revenue Code, provided that such exchange does not delay the Closing Date nor subject the Purchaser to any present or future cost, expense or liability or in any way subject Purchaser to any financial or tax risk. Seller's assignment of this Agreement in such exchange to any third party acting as a qualified intermediary will not relieve Seller of any of its duties or obligations herein. In no event will Purchaser have any liability or obligation to Seller for the failure of the contemplated exchange to qualify as a like-kind exchange under Section 1031 of the Internal Revenue Code unless such failure is the direct result of the material breach or default by Purchaser under this Agreement.

        15.16    Time of the Essence.    Time is of the essence for all performances by Purchaser and Seller hereunder.

        15.17    Warranty of Signatures.    Each of the persons signing this Agreement on behalf of any entity warrants and represents that he has the right, power, legal capacity and authority to execute this Agreement on behalf of such entity, without the concurrence or approval of any other person, any entity or any court, and to thereby bind such entity to this Agreement.

        15.18    Bulk Transfer.    Neither the Seller nor the transactions contemplated herein are subject to any bulk transfer or similar law.

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

HISPANIC BROADCASTING CORPORATION
By:	/s/  MCHENRY T. TICHENOR, JR.

SAN JOAQUIN RADIO COMPANY, LLC
By:	/s/  EDWARD G. HOYT, JR.

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ASSET PURCHASE AGREEMENT

EX-10.16

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Exhibit 10.16

ASSET PURCHASE AGREEMENT

        This Asset Purchase Agreement ("Agreement"), made as of the 17^th day of December, 2001, between Empire Broadcasting Corporation, a Delaware corporation ("Seller"), and Hispanic Broadcasting Corporation, a Delaware corporation ("Buyer").

WITNESSETH:

        WHEREAS, Seller is the licensee of Radio Station KARA (FM), Santa Clara, California (the "Station") and related licenses and authorizations issued by the Federal Communications Commission (the "FCC");

        WHEREAS, Seller desires to sell certain properties and assets pertaining to the Station, and Buyer desires to purchase the same, subject to the terms and conditions set forth herein;

        WHEREAS, the defined terms shall have the meanings ascribed to them in Article 13;

        NOW, THEREFORE, in consideration of the mutual covenants contained herein, Seller and Buyer hereby agree as follows:

ARTICLE 1
ASSETS TO BE CONVEYED

1.1    Closing. Subject to (i) the provisions of Section 10.1 and (ii) the satisfaction or, to the extent permissible by law, waiver (by the party for whose benefit the closing condition is imposed), on or prior to the date scheduled for the Closing, of the closing conditions set forth in Article 7 hereof, including, for example, the consent of the FCC to the transaction contemplated by this Agreement, the closing (the "Closing") of the sale and purchase of the Station Assets (as defined in Section 1.2) shall take place in the offices of Hoge, Fenton, Jones & Appel, Inc., 60 South Market Street, Suite 1400, San Jose, California, at 11:00 a.m., local time, on the seventh day following the satisfaction or waiver of the conditions set forth in Article 7 (or on the next normal business day if the tenth day is not a normal business day) or on January 2, 2002, whichever is later, or at such other place, time or date as Buyer and Seller may mutually agree in writing.

1.2    Transfer of Assets. Subject to the terms and conditions set forth in this Agreement, Seller hereby agrees to sell, assign, transfer, convey and deliver to Buyer on the Closing Date, and Buyer agrees to purchase all of Seller's right, title and interest in, the following assets, together with any additions thereto (pursuant to paragraph (a) or paragraph (e) below) between the date of this Agreement and the Closing Date, free and clear of all Liens, except as otherwise provided in this Agreement, but excluding the assets described in Section 1.3 (collectively, the "Station Assets"):

        (a)  All licenses, permits, construction permits, and other authorizations issued by the FCC, the Federal Aviation Administration, or any other federal, state or local governmental authority to Seller, currently in effect and used in the conduct of the business or operations of the Station, together with renewals or modifications thereof and any additions thereto between the date hereof and the Closing Date, including, without limitation, the licenses, permits and authorizations listed on Schedule 1.2(a) attached hereto (the licenses, permits and authorizations issued by the FCC collectively are referred to herein as the "FCC Licenses;" and the FCC Licenses and the licenses, permits and other authorizations issued by any other governmental authority collectively are referred to herein as the "Station Licenses");

        (b)  All of Seller's right, title and interest in the equipment, spare parts and other tangible personal property located at the Station's transmitters or studio site and used exclusively in the

1

operation of the Station and in any other tangible personal property identified on Schedule 1.2(b) (the "Personal Property");

        (c)  All contracts which (i) are listed on Schedule 1.2(c) hereto and designated as "material contracts" (the "Material Contracts"), (ii) are listed on Schedule 1.2(c) and designated as "other contracts" provided that, as to any such contract the assignment of which requires the consent of a party other than Seller, such consent is obtained prior to the Closing (the "Other Contracts"), or (iii) are entered into between the date hereof and the Closing which Seller has agreed to assign, and Buyer has agreed to assume, in writing at the Closing provided that, with respect to any such contract the assignment of which requires the consent of a party other than Seller, such consent is obtained prior to the Closing (the "Post-Agreement Contracts"); the Material Contracts, Other Contracts and Post-Agreement Contracts being referred to in this Agreement as the "Assumed Contracts;"

        (d)  Seller's public inspection file, filings with the FCC relating to the Station, and such technical information, engineering data, rights under manufacturers' warranties as exist at Closing and relate exclusively to the assets being conveyed hereunder;

        (e)  All copyrights, logos, slogans, trademarks, trade names, service marks, domain names and other intellectual property used by the Station, as listed on Schedule 1.2(e), together with any associated goodwill (the "Intellectual Property");

        (f)    Copies of the Assumed Contracts, and all records required by the FCC to be kept by the Station;

        (g)  All of Seller's proprietary information, technical information and data, machinery and equipment warranties, maps, computer discs and tapes, plans, diagrams, blueprints and schematics, including filings with the FCC, relating to the business and operation of the Station;

        (h)  All of Seller's right, title and interest in and to the transmission tower and related real property listed on Schedule 1.2(h) hereto, including, without limitation, the fee interest in the real property and all of the improvements thereon (the "Real Property"), free and clear of all Liens except as indicated on Schedule 1.2(h) hereto and, notwithstanding Schedule 1.2(h), free and clear of all tenancies and occupants; and

        (i)    Those agreements and arrangements for the exchange of advertising time for consideration other than money (the "Trade-Out Agreements") set forth on Schedule 1.2(i) which remain in effect and unfulfilled as of the Closing Date.

1.3    Excluded Assets. The Station Assets shall not include the following:

        (a)  All cash, cash equivalents or similar investments such as certificates of deposit, treasury bills and other marketable securities on hand and/or in banks, deposits or prepaid expenses of Seller;

        (b)  All accounts receivable of Seller;

        (c)  Any insurance policies, promissory notes, amounts due from employees, bonds, letters of credit, certificates of deposit, or other similar items, and any cash surrender value in regard thereto;

        (d)  Any pension, profit-sharing or cash or deferred (section 401(k)) plans and trust and assets thereof any other employee benefit plan or arrangement and the assets thereof of Seller;

        (e)  Duplicate copies of such records as may be necessary to enable Seller to prepare and file tax returns and reports, all original financial statements and supporting materials, all books and

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records that Seller is required by law to retain, and all records of Seller relating to the sale of the Station Assets;

        (f)    Any interest in and to any refunds of federal, state or local franchise, income or other taxes for periods prior to the Closing;

        (g)  All tangible and intangible personal property disposed of or consumed between the date of this Agreement and the Closing, as permitted under this Agreement;

        (h)  Any other assets identified on Schedule 1.3(h).

        (i)    Assets not used by Seller in the operation of the Station; and

        (j)    The real property located at 750 Story Road, San Jose, California.

1.4    Assumption of Liabilities and Obligations. As of the Closing Date, Buyer shall assume and undertake to pay, discharge and perform all obligations and liabilities of Seller arising or accruing after the Closing under the Station Licenses, Assumed Contracts and the Trade-Out Agreements. Buyer shall not assume any other obligations or liabilities of Seller, including (i) any obligations or liabilities under any contract or agreement not included in the Assumed Contracts or the Trade-Out Agreements, (ii) any obligation or liabilities under the Assumed Contracts relating to the period prior to the Closing except insofar as an adjustment therefor is made in favor of Buyer under Section 2.4, (iii) any claims or pending litigation or proceedings relating to the operation of the Station prior to the Closing, (iv) any obligations or liabilities of Seller which are unrelated to the Station, (v) any agreements, executed or executory, relating to the exchange of broadcast time on the Station for goods, wares, services, advertising, promotions, merchandising or anything other than cash ("Trade-Out Agreements"), and (vi) any obligations relating to the Excluded Assets.

ARTICLE 2
PURCHASE PRICE

2.1    Purchase Price. The purchase price (the "Purchase Price") for the Station Assets shall be Fifty Eight Million Twenty Five Thousand One Hundred Twenty Five Dollars ($58,025,125).

2.2    Payment of Purchase Price. Buyer shall pay the Purchase Price as follows:

        (a)  Simultaneous with the execution of this Agreement, Buyer shall deposit $2,901,256.25 (the "Escrow Deposit") with the Escrow Agent to be held and distributed pursuant to the Escrow Agreement attached hereto as Exhibit A.

        (b)  At the Closing, Buyer shall pay Seller the Purchase Price, less the Escrow Deposit, by wire transfer of immediately available funds to an account at a bank or other financial institution pursuant to wire transfer instructions that Seller shall deliver to Buyer at least five (5) days prior to the Closing Date.

2.3    Allocation. The Purchase Price shall be allocated for income tax purposes in the manner set forth in Schedule 2.3 to this Agreement. Such agreed allocations shall be used by the parties in preparing all relevant tax returns, information reports and other tax documents and forms. Such allocation shall be based on an appraisal by a mutually acceptable appraiser. The parties shall each pay for one-half of the appraiser's fee and expenses.

2.4    Prorations. All income and expenses arising from the conduct of the business and operations of the Station shall be prorated between Buyer and Seller as of 12.01 a.m. local time, on the Closing Date in accordance with generally accepted accounting principles. Such prorations shall be based upon the principles that Seller shall be entitled to all income earned and shall be responsible for all liabilities and obligations accruing in connection with the operation of the Station until the Closing Date, and Buyer shall be entitled to such income earned and be responsible for such liabilities and obligations

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accruing in connection with the operation of the Station thereafter. Such prorations shall include, without limitation, all ad valorem and other property taxes (but excluding taxes arising by reason of the transfer of the Station Assets as contemplated hereby, which shall be paid as set forth in Section 12.1 of this Agreement), deposits, utility expenses, liabilities and obligations under all Assumed Contracts and Trade-Out Agreements, rents and similar prepaid and deferred items and all other expenses attributable to the ownership and operation of the Station; provided, however, there shall be no adjustment for, and Seller shall remain solely liable for, any contracts or agreements not included in the Assumed Contracts and any other obligation or liability not being assumed by Buyer in accordance with Section 1.4. All real estate taxes shall be apportioned on the basis of the number of days that each party owned the Real Property during the relevant tax year.

ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER

        Seller represents and warrants to Buyer that, except as otherwise disclosed in the schedules to this Agreement, including, for example, Schedule 3.0 (Schedule of Exceptions), the following representations and warranties will be true and correct on the Closing Date, except for those representations and warranties specifically noted as being true and correct as of the date of this Agreement through the Closing Date:

3.1    Organization and Standing. As of the date of this Agreement through the Closing Date, Seller (a) is a corporation duly formed, validly existing and in good standing under the laws of the State of Delaware; (b) is qualified to do business in the State of California; and (c) has all necessary power and authority to carry on the business of the Station.

3.2    Authorization and Binding Obligation. As of the date of this Agreement through the Closing Date, Seller has all necessary power and authority to enter into and perform its obligations under this Agreement and the documents contemplated hereby and to consummate the transactions contemplated hereby and thereby. As of the date of this Agreement through the Closing Date, this Agreement has been duly executed and delivered by Seller and is enforceable in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency or similar laws affecting creditors' rights generally or the availability of equitable remedies.

3.3    Absence of Conflicting Agreements or Required Consents. As of the date of this Agreement through the Closing Date, the execution, delivery and performance of this Agreement and the documents contemplated hereby (with or without the giving of notice, the lapse of time, or both) by Seller: (a) do not and will not violate any provisions of Seller's organizational documents; (b) do not and will not conflict with, result in a breach of, constitute a default under, or violate any applicable law, judgment, order, ordinance, injunction, decree, rule regulation or ruling of any court or governmental authority; (c) do not and will not, either alone or with the giving of notice or the passage of time, or both, conflict with, constitute grounds for termination of, result in a breach of, constitute a default under, or accelerate or permit the acceleration of any performance required by the terms of, any agreement, lease, instrument, license or permit to which Seller is a party or by which Seller is bound; and (d) will not create any claim, liability, mortgage, lien, pledge, condition, charge, or encumbrance upon any of the Station Assets.

3.4    Litigation. There is no claim, action, counterclaim, suit, litigation, labor dispute, arbitration, or other legal, administrative, or tax proceeding, nor any order, decree, or judgment, pending, or to the knowledge of Seller threatened, against or relating to Seller with respect to the ownership or operation of the Station or otherwise relating to the Station Assets or the business or operations of the Station.

3.5    Station and Other Licenses.

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        (a)  Schedule 1.2(a) contains a true and complete list of the Station Licenses, and there are no other licenses, permits or other authorizations required for the lawful operation of the Station in the manner now operated. Seller has made available to Buyer true and complete copies of the Station Licenses (including any amendments and other modifications thereto). Seller is the authorized legal holder of the Station Licenses. The Station Licenses are in good standing and in full force and effect. To the best of Seller's knowledge, the Station and the facilities of the Station are being operated in all material respects in accordance with the FCC Licenses and all material FCC rules and policies.

        (b)  Except as set forth in Schedule 1.2(a), and except for proceedings affecting the radio broadcasting industry generally, there are no applications, petitions, complaints, investigations, forfeitures, proceedings or other actions pending or, to the best of Seller's knowledge, threatened before the FCC relating to the Station or the Station Licenses. Should any such filing be made or action initiated, Seller shall promptly notify Buyer thereof. To the best of Seller's knowledge, Seller's transmission tower and equipment have been operated and maintained by Seller in material compliance with the Communications Act and the rules and regulations of the FCC and the Federal Aviation Administration ("FAA"), and the tower has been properly registered with the FCC and approved by the FAA as necessary.

        (c)  Seller is qualified to hold the FCC Licenses.

        (d)  In addition to the Station Licenses, to the best of Seller's knowledge, Seller possesses all licenses and other required governmental or official approvals, permits or authorizations, the failure to possess which would have a material adverse effect on the business, financial condition or results of operations of Seller. To Seller's knowledge, such licenses, approvals, permits and authorizations are in full force and effect, Seller is in compliance with their requirements and no proceeding is pending or threatened to revoke or amend any of them. Schedule 1.2(d) contains a complete list of such licenses, approvals, permits and authorizations.

3.6    Title to and Condition of Real and Personal Property.

        (a)  Except as disclosed on Schedule 1.2(b), Seller has good and marketable title to the Personal Property free and clear of all Liens. Except as disclosed on Schedule 1.2(h), Seller has good and marketable title to the Real Property, free and clear of all Liens.

        (b)  At the Closing, the Personal Property will be in good condition and working order, ordinary wear and tear excepted, and reasonably suitable for the uses for which intended, free from any defects known to Seller, normal wear and tear excepted, and will be in material compliance with the published rules and regulations of the FCC and, to the best of Seller's knowledge, all other applicable federal, state and local statutes, ordinances, rules and regulations.

        (c)  Both the Personal Property and the Real Property are available for immediate use in the operation of the Station. Seller has not received written notice of any violation of law, municipal or county ordinances or other legal requirements with respect to the Real Property or with respect to the use, occupancy or construction thereof. Seller has not received any written notice of any pending or threatened termination or impairment of access to the Real Property or discontinuation of necessary sewer, water, electrical, gas, telephone or other utilities or services.

        (d)  Seller has not received any written notice (i) that either the whole or any portion of the Real Property is to be condemned, requisitioned or otherwise taken by any public authority, (ii) of violation of restrictive covenants, deed restrictions or governmental requirements on the Real Property which have not been remedied, (iii) of any proceedings which would cause the change, redefinition or other modification of the zoning classification or (iv) any proceedings to widen or realign any street or highway adjacent to the Real Property.

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3.7    Leased Property.

        (a)  Schedule 1.2(c) contains descriptions of all of Seller's leased property interests (the "Leased Property").

        (b)  Seller owns a valid interest as Lessee under the Leased Property free and clear of all Liens.

3.8    Assumed Contracts. To the best of Seller's knowledge, the Assumed Contracts are in full force and effect and are legally valid, binding and enforceable by Seller in accordance with their respective terms, except as limited by laws affecting creditor's rights or equitable principles generally. To the best of Seller's knowledge, Seller is not in any material respect in default under Assumed Contracts.

3.9    Compliance with Laws. To the best of Seller's knowledge, Seller has complied in all material respects with, and is not in any material respect in violation of, any federal, state or local laws, statutes, rules, regulations or orders relating to the ownership and operation of the Station.

3.10    Broker's Fees. As of the date of this Agreement through the Closing Date, other than a payment owed by Seller to Media Venture Partners, and a payment to Star Media Group owed by Buyer, neither Seller nor any person or entity acting on Seller's behalf has agreed to pay a commission, finder's fee or similar payment in connection with this Agreement or any matter related hereto to any person or entity, and no person or entity is entitled to any such payment from Seller in connection with the transactions contemplated by this Agreement.

3.11    Consents. As of the date of this Agreement, except for the FCC Consent provided in Section 5.1, a filing with the Federal Trade Commission and the United States Justice Department under the Hart-Scott-Rodino Anti-Trust Improvements Act of 1976, as amended ("Hart-Scott-Rodino"), if applicable, and the consents listed on Schedule 1.2(c), no consent, approval, permit, or authorization of, or declaration to, or filing with any governmental or regulatory authority or any other third party is required (a) to consummate the transactions contemplated hereby; or (b) to permit Seller to assign or transfer the Station Assets to Buyer.

3.12    Taxes. Seller has filed all federal, state, county and local tax returns and reports required to be filed by it with respect to taxes for which successor liability will apply, including payroll, property, withholding, social security, sales and use taxes, to the extent that such taxes relate to the Station Assets; has either paid in full all such taxes that have become due as reflected on any return or report and any interest and penalties with respect thereto or has fully accrued on its books or has established adequate reserves for all taxes payable but not yet due; and has made required cash deposits with appropriate governmental authorities representing estimated payments of taxes, including employee withholding tax obligations. No extension or waiver of any statute of limitations or time within which to file any return has been granted to or requested by Seller with respect to any such tax. No unsatisfied deficiency, delinquency or default for any tax, assessment or governmental charge has been assessed (or, to the knowledge of Seller, claimed or proposed) against Seller, nor has Seller received notice of any such deficiency, delinquency or default.

3.13    Reports. All reports and statements that the Seller is required to file with the FCC have been filed, and all reporting requirements of the FCC have been complied with in all material respects.

3.14    Trademarks and Similar Rights. To the best of Seller's knowledge, the use of the Intellectual Property in connection with the conduct or operation of the Station has not infringed, is not infringing upon and is not otherwise violating the rights of any third party in or to such Intellectual Property or the asserted proprietary rights of others, and no notices have been received by Seller that the use of the Intellectual Property in connection with the conduct or operation of the Station infringes

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upon or otherwise violates any rights of a third party in or to the Intellectual Property or the proprietary rights of others.

3.15    Financial Statements of Seller.

        Seller has previously delivered to Buyer Seller's unaudited balance sheet and income statement as of and for the year ended December 31, 2000 and unaudited balance sheet and income statement as of and for the nine (9) months ended September 30, 2001. These financial statements have been prepared in all material respects in accordance with generally accepted accounting principles consistently followed by Seller throughout the periods indicated (except that they may omit certain footnotes required by such principles and the interim financial statements do not reflect normal year-end adjustments and accruals) and fairly present financial position of Seller as of the respective dates of the balance sheets included and the results of its operations for the respective periods indicated.

3.16    Absence of Changes in Seller's Business Operations. With reference to the Station Assets and the operations of the Station, from September 30, 2001 to the date hereof, there has not been any:

        (a)  Transaction by Seller related to the Station entered into except in the ordinary course of business;

        (b)  Material adverse change in the financial condition, liabilities, assets, business, or prospects of Seller with respect to the Station;

        (c)  Destruction, damage, or loss of any asset of Seller (insured or uninsured) that materially and adversely affects the financial condition, business, or prospects of Seller with respect to the Station;

        (d)  Material change in accounting methods or practices (including any change in depreciation or amortization policies or rates) by Seller with respect to the Station;

        (e)  Sale or transfer of any material asset used by Seller in the operation of the Station, except in the ordinary course of business;

        (f)    Amendment or termination of any contract, agreement, or license related to the operation of the Station, except in the ordinary course of business;

        (g)  Commencement or notice or threat of commencement of any civil litigation or any governmental proceeding against or investigation of the Seller or the affairs of either of them; or

        (h)  Labor trouble or claim of wrongful discharge or other unlawful labor practice or action.

3.17.    Personnel. Schedule 3.17 lists the names of all persons employed by Seller directly and principally in connection with the operation of the Station. Seller is not a party to or subject to any collective bargaining agreements with respect to the Station. To the best of Seller's knowledge, there is no representation or organizing effort pending or threatened against or involving or affecting Seller with respect to employees employed at the Station. There is no pending or, to the best of Seller's knowledge, threatened labor dispute, strike, or work stoppage affecting the Station.

3.18    Employee Benefits.

        (a)  All of Seller's Employee Plans and Compensation Arrangements providing benefits to employees of the Station as of the Effective Date are listed and described in Schedule 3.18, and copies of any such written Employee Plans and Compensation Arrangements (or related insurance policies) and any amendments thereto are available to Buyer, along with copies of any currently available employee handbooks or similar documents describing such Employee Plans and Compensation Arrangements. Except as disclosed in Schedule 3.18, there is not now in effect or scheduled to become effective any new Employee Plan or Compensation Arrangement or any

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amendment to an existing Employee Plan or Compensation Arrangement which will affect the benefits of employees or former employees of the Station.

        (b)  Seller does not contribute to and is not required to contribute to any Multiemployer Plan with respect to its employees at the Station.

3.19    Environmental Matters. In respect of the Real Property:

        (a)  Seller has not received any written notice from any governmental authority that Seller is in violation or alleged violation of any judgment, decree, order, law, license, rule or regulation pertaining to environmental matters, including, without limitation those arising under the Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 as amended ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, the Federal Water Pollution Control Act, the Solid Waste Disposal Act, as amended, the Federal Clean Air Act, the Toxic Substances Control Act, or any state or local statute, regulation, ordinance, order or decree relating to the environment, (hereinafter "Environmental Laws");

        (b)  Seller has not received written notice from any third party, including without limitation any federal, state or local governmental authority, that any hazardous waste, as defined by 42 U.S.C. §6903(5), any hazardous substance as defined by 42 U.S.C. §9601(33) or any toxic substance, oil or hazardous material or other hazardous chemical or hazardous substance regulated by any Environmental Laws ("Hazardous Substances") which Seller has generated, transported or disposed of has been found at any site at which a federal, state or local agency or other third party has conducted or has ordered that Seller conduct a remedial investigation, removal or other response action pursuant to any Environmental Law;

        (c)  No portion of any of the Real Property. has been used by Seller for the handling, manufacturing, processing, storage or disposal of Hazardous Substances in material violation of applicable Environmental Laws; and

        (d)  To the knowledge of Seller, there have been no releases (i.e., any past or present releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, disposing or dumping) by Seller or threatened releases by Seller of Hazardous Substances on, upon, into or from any of the Real Property in material violation of applicable Environmental Laws.

ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER

        Buyer represents and warrants to Seller as follows:

4.1    Organization and Standing. Buyer is a corporation duly formed, validly existing and in good standing under the laws of the State of Delaware.

4.2    Authorization and Binding Obligation. Buyer has all necessary power and authority to enter into and perform its obligations under this Agreement and to consummate the transactions contemplated hereby. This Agreement and all other documents required hereby have been duly executed and delivered by Buyer and constitute valid and binding obligations enforceable against Buyer in accordance with their terms except as may be limited by applicable bankruptcy, insolvency or similar laws affecting creditors' rights generally or the availability of equitable remedies.

4.3    Absence of Conflicting Agreements or Required Consents. Except for the FCC Consent, a filing with the Federal Trade Commission and the United States Justice Department under Hart-Scott-Rodino, if applicable, and the consents on Schedule 1.2(c), the execution, delivery and performance of this Agreement by Buyer: (a) do not and will not violate any provision of Buyer's organizational

8

documents; (b) do not and will not require the consent of any third party or governmental authority; (c) do not and will not violate any law, judgment, order, injunction, decree, rule, regulation or ruling of any governmental authority; and (d) do not and will not, either alone or with the giving of notice or the passage of time, or both, conflict with, constitute grounds for termination or acceleration of or result in a breach of the terms, conditions or provisions of, or constitute a default under, any agreement, lease, instrument, license or permit to which Buyer is now subject.

4.4    Absence of Litigation. There is no claim, litigation, arbitration or proceeding pending or, to the best of Buyer's knowledge, threatened, before or by any court, governmental authority or arbitrator, that seeks to enjoin or prohibit, that questions the validity of or that might materially hinder or impair Buyer's performance of its obligations under this Agreement.

4.5    FCC Qualifications. To the best of Buyer's knowledge, Buyer is qualified under the Communications Act of 1934, as amended, and the rules and regulations of the FCC to be the assignee of the FCC Licenses, it being understood that Buyer has a duty to ascertain what would cause it to lose such qualification. There are no facts known to Buyer that would delay the consummation of the transactions contemplated by this Agreement. Buyer has no reason to believe that the FCC assignment contemplated hereby might be challenged or might not be granted by the FCC in the ordinary course solely because of its qualifications.

4.6    Broker's Fees. Other than a payment due to Media Venture Partners, to be paid by Seller at the Closing, and a payment to Star Media Group, to be paid by Buyer at the Closing, neither Buyer nor any person or entity acting on its behalf has agreed to pay a commission, finder's fee or similar payment in connection with this Agreement or any matter related hereto to any person or entity, and no person or entity is entitled to any such payment from Buyer in connection with the transactions contemplated by this Agreement.

4.7    Bankruptcy. No insolvency proceedings of any character, including, without limitation, bankruptcy, receivership, reorganization, composition or arrangement with creditors, voluntary or involuntary, affecting Buyer or any of its affiliates are pending or threatened, and neither Buyer nor any of its affiliates has made an assignment for the benefit of creditors or taken any action in contemplation of or which would constitute the basis for the institution of such insolvency proceedings.

4.8    Financial Qualifications. Buyer is financially qualified to consummate the transactions contemplated by this Agreement and to certify to its financial qualifications on FCC Form 314.

4.9    Seller's Representations and Warranties. Buyer has not relied on or been induced to enter into this Agreement by any statement, representation or warranty other than those expressly set forth in Article 3 of this Agreement.

4.10    Condition of Real and Personal Property. Prior to entering into this Agreement, Buyer has inspected the Real and Personal Property and, assuming the accuracy of Seller's representations and warranties set forth herein, is satisfied with its present condition, except that the transmitter site shall be free of all tenancies and occupants at the Closing.

ARTICLE 5
GOVERNMENTAL CONSENTS

5.1    FCC Application.

        (a)  The assignment of the FCC Licenses as contemplated by this Agreement is subject to the prior consent and approval of the FCC. Prior to the Closing, Buyer shall not directly or indirectly control, supervise, direct, or attempt to control, supervise, or direct, the operations of the Station, and all such operations, including complete control and supervision of all of the Station's programs, employees, and policies, shall be the sole responsibility of Seller until the Closing.

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        (b)  No later than ten (10) days after the date of this Agreement, Buyer and Seller shall prepare and jointly file a complete and grantable FCC Application, and the parties shall use reasonable efforts to cause the FCC to accept the FCC Application for filing as soon as practicable. Seller and Buyer shall thereafter prosecute the FCC Application in good faith and with all reasonable diligence and otherwise use their best efforts to obtain the grant of the FCC Application as expeditiously as practicable; provided, however, that neither Seller nor Buyer shall have any obligation to satisfy any complainant or the FCC by taking any steps which would have a material adverse effect upon Seller or Buyer or upon any affiliated entity, but neither the expense nor inconvenience to a party of defending against a complainant or an inquiry by the FCC shall be considered a material adverse effect on such party. If the FCC Consent imposes any condition on any party hereto, such party shall use its best efforts to comply with such condition; provided, however, that no party shall be required to comply with any condition that would have a material adverse effect upon it or any affiliated entity. If rehearing, reconsideration or judicial review is sought by a third party or by the FCC on its own motion with respect to the FCC Consent, Buyer and Seller shall vigorously oppose such efforts for rehearing, reconsideration or judicial review; provided, however, that nothing herein shall be construed to limit either party's right to terminate this Agreement pursuant to Article 10 (Termination Rights).

        (c)  All FCC filing or grant fees with respect to the assignment of the FCC Licenses from Seller to Buyer shall be paid equally by Buyer and Seller. Each party shall otherwise bear its own costs and expenses (including the fees and disbursements of its counsel) in connection with the preparation of the portion of the FCC Application to be prepared by it and in connection with the processing and defense of the application.

5.2    Other Filings and Governmental Consents. Promptly following the execution of this Agreement, the parties shall prepare and file with the appropriate governmental authorities any other requests for approval or waiver that are required from such governmental authorities in connection with the transactions contemplated hereby and shall diligently and expeditiously prosecute, and shall 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. If applicable, the parties will comply with the filing and waiting period requirements of Hart-Scott-Rodino. Buyer shall pay the Hart-Scott-Rodino filing fee. Each party shall bear its own costs and expenses in connection with the preparation of any filings, documents or requests to be prepared by it in order to obtain such governmental consents, approvals or waivers and in connection with any prosecution or defense by it of such filings, documents or requests.

ARTICLE 6
COVENANTS

6.1    Conduct of Business.

        (a)  Affirmative Covenants. Between the date of this Agreement and the Closing Date; except as expressly permitted by this Agreement or with the prior written consent of Buyer, which consent shall not be unreasonably withheld, Seller shall:

        (i)    Comply in all material respects with all laws applicable to Seller's use of the Station Assets and continue to operate and maintain the Station in conformity with the Station Licenses, the Communications Act of 1934, as amended, and the rules and regulations of the FCC.

        (ii)  Maintain the Station Assets in customary repair, maintenance and condition.

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        (iii)  Use reasonable efforts to obtain the consent of any third party necessary for the assignment to Buyer, without any material adverse change, of the contracts listed on Schedule 1.2(c).

        (iv)  Timely make or provide all payments, services or other consideration due for the Assumed Contracts so that all payments required to be made as of the Closing Date will have been paid, except for any amounts being contested by Seller in good faith.

        (v)  Maintain in full force and effect the Station Licenses and all other licenses, permits and authorizations relating to the Station and take any action necessary before the FCC, including the preparation and prosecution of applications for renewal of the FCC Licenses, if necessary, to preserve such licenses in full force and effect without material adverse change.

        (vi)  Maintain insurance on the Station Assets.

        (vii) To the extent reasonably practicable, complete all obligations owing by Seller to advertisers under the Trade-Out Agreements (it being understood that the balance of such obligations shall in no event exceed $20,000 as of the Closing Date).

        (viii) To the extent Seller may do so without penalty, terminate, or send notice of termination of, such of the Assumed Contracts as Buyer may request.

        (b)  Negative Covenants. Between the date of this Agreement and the Closing Date, except as expressly permitted by this Agreement or with the prior written consent of Buyer, which consent shall not be unreasonably withheld, Seller shall not:

        (i)    Terminate, modify or amend any Assumed Contract except as contemplated in Section 6.1(a)(viii).

        (ii)  Create any Lien on any of the Station Assets.

        (iii)  Sell, assign, lease or otherwise transfer or dispose of any of the material Station Assets now owned or hereafter acquired, except for assets consumed or disposed of in the ordinary course of business.

6.2    Access. Between the date hereof and the Closing Date, Seller will afford Buyer reasonable access to the Station and its assets. Buyer, at its sole expense, shall be entitled to make such engineering and other inspections of the Station Assets as Buyer may desire, so long as such inspection would not unreasonably interfere with the operation of the Station.

6.3    No Inconsistent Action. Between the date of this Agreement and the Closing, each party shall use its reasonable efforts to cause the fulfillment at the earliest practicable date of all of the conditions to the obligations of the other party to consummate the sale and purchase and shall take no actions which are inconsistent with its obligations under this Agreement or that would materially hinder or delay the consummation of the transactions contemplated by this Agreement. In particular, neither party shall take any action that would jeopardize the Station Licenses, result in its disqualification to hold the FCC Licenses or in any way delay grant of the FCC Application or consummation of the transactions contemplated by this Agreement, and Buyer shall take no action which would impair its financial or other qualifications to consummate this transaction in accordance with its terms. Should either party become aware of any such fact or circumstance, such party shall promptly inform the other.

6.4    Confidentiality.

        (a)  Buyer and Seller shall each keep confidential all information obtained by it with respect to the other in connection with this Agreement, except where such information is known through other lawful sources or where its disclosure is required in accordance with applicable law. If the transactions contemplated hereby are not consummated for any reason, Buyer and Seller shall

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return to the other, without retaining a copy thereof in any medium whatsoever, any schedules, documents or other written information, including all financial information, obtained from the other in connection with this Agreement and the transactions contemplated hereby. Except as is required for the consummation of the transaction contemplated by this Agreement, during the period from the date hereof through the Closing Date, both Buyer and Seller shall also keep confidential the fact that the parties have entered into this Agreement and all other matters relating to this transaction.

        (b)  Except as required by the FCC in connection with the filing of the FCC Application, without the prior consent of both Buyer and Seller, there shall be no public announcement relating to this Agreement.

6.5    Further Assurances. Seller and Buyer shall cooperate and take such actions, and execute such other documents, at the Closing or subsequently, as may be reasonably requested by the other in order to carry out the provisions and purposes of this Agreement, including, for example, promptly advising each other of all communications relevant to the transactions contemplated by this Agreement received from the FCC after the date of this Agreement and furnishing each other with copies of all such written communications and summaries of all such oral communications.

6.6    Booster Site Application. Seller shall file with the FCC such booster site applications for the Station as Buyer reasonably determines. Buyer will pay for any expenses arising from such applications.

ARTICLE 7
CONDITIONS PRECEDENT

7.1    To Buyer's Obligations. The obligations of Buyer hereunder are, at its option, subject to satisfaction or waiver by Buyer (except for prior FCC consent), at or prior to the Closing Date, of each of the following conditions:

(a)  Representations, Warranties and Covenants.

        (i)    All representations and warranties made by Seller in this Agreement shall be true and correct in all material respects (except as otherwise expressly permitted by this Agreement) on and as of the Closing Date as if made on and as of that date.

        (ii)  All of the terms, covenants and conditions to be complied with and performed by Seller under this Agreement on or prior to Closing Date shall have been complied with or performed by Seller in all material respects.

(b)  FCC Consent. The FCC Consent shall have been obtained, without the imposition of any condition materially adverse to Buyer except those that are customary in the assignment of FM licenses. Seller shall have complied with any conditions imposed on it by the FCC Consent, and (solely in the event that a petition to deny was filed in connection with the FCC Consent) the FCC Consent shall have become a Final Order (unless Buyer elects to waive the Final Order).

(c)  No Injunction. No order of any court or administrative agency shall be in effect which restrains or prohibits the transactions contemplated by this Agreement in accordance with its terms.

(d)  Governmental Authorizations. Seller shall be the holder of all FCC Licenses, and there shall not have been any modification of any Station License relating to the Station that could have an adverse effect on the Station or the conduct of the business and operations of the Station. No proceeding (other than proceedings affecting the broadcasting industry generally) shall be pending which presents a substantial probability of revocation, failure to renew, suspension or materially adverse modification of any FCC License.

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(e)  Consents. Seller shall have obtained all necessary approvals and consents to the assignment to Buyer of each Assumed Contract without any adverse change in the terms or conditions of such contracts.

(f)    Deliveries. Seller shall have made or stand willing to make all deliveries required under Section 8.1.

(g)  Title Insurance. A title insurance company reasonably acceptable to Buyer shall be prepared to issue an owner's title insurance policy in a standard ALTA form insuring Buyer's fee simple title to the Real Property, free and clear of all Liens, with liability limits in the amount of the purchase price of the Real Property, subject only to the delivery of the documents, materials and funds described in Section 8.10, the recordation of the grant deed referred to Section 8.1 and payment of the applicable title insurance premiums.

(h)  Hart-Scott-Rodino. If applicable, the parties shall have complied with the filing and waiting period requirements of Hart-Scott-Rodino.

7.2    To Seller's Obligations. The obligations of Seller hereunder are, at its option, subject to satisfaction or waiver by Seller (except for prior FCC Consent), at or prior to the Closing Date, of each of the following conditions:

(a)  Representations, Warranties and Covenants.

        (i)    All representations and warranties made by Buyer in this Agreement shall be true and correct in all material respects (except as otherwise expressly permitted by this Agreement) on and as of the Closing Date as if made on and as of that date.

        (ii)  All of the terms, covenants and conditions to be complied with or performed by Buyer under this Agreement on or prior to the Closing Date shall have been complied with or performed by Buyer in all material respects.

(b)  FCC Consent. The FCC Consent shall have been obtained, without the imposition of any condition materially adverse to Seller except those that are customary in the assignment of FM licenses. Buyer shall have complied with any conditions imposed on it by the FCC Consent, and (solely in the event that a petition to deny was filed in connection with the FCC Consent) the FCC Consent shall have become a Final Order (unless Seller elects to waive the Final Order).

(c)  No Injunction. No order of any court or administrative agency shall be in effect which restrains or prohibits the transactions contemplated by this Agreement in accordance with its terms.

(d)  Deliveries. Buyer shall have made or stand willing to make all the deliveries required under Section 8.2 and shall have paid or stand willing to pay the Purchase Price as provided in Section 2.2.

(e)  Hart-Scott-Rodino. If applicable, the parties shall have complied with the filing and waiting period requirements of Hart-Scott-Rodino.

(f)    Consent. All necessary approvals and consents to the assignment to Buyer of each Assumed Contract shall have been obtained.

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ARTICLE 8
DOCUMENTS TO BE DELIVERED AT THE CLOSING

8.1    Documents to be Delivered by Seller. At the Closing, Seller shall deliver to Buyer the following:

        (a)  Copies of resolutions of the board of directors and shareholders of Seller authorizing the execution, delivery and performance of this Agreement by Seller, and the consummation of the transactions contemplated hereby, certified by a duly authorized officer of Seller as being true, correct and complete as of the Closing Date;

        (b)  A certificate, dated as of the Closing Date, executed by an officer of Seller, certifying that the closing conditions specified in Section 7.1(a) have been satisfied;

        (c)  Duly executed instruments of conveyance and transfer, in form and substance reasonably satisfactory to Buyer, effecting the sale, transfer, assignment and conveyance of the Station Assets to Buyer free and clear of all Liens, including, but not limited to, the following:

        (i)    an assignment of the FCC Licenses;

        (ii)  bills of sale for all Personal Property;

        (iii)  a grant deed for the Real Property; and

        (iv)  an assignment of Seller's rights under the Assumed Contracts;

        (d)  A copy of any instrument evidencing receipt of any of the required consents described in Section 7.1(e);

        (e)  Opinions of Seller's corporate counsel and FCC counsel dated as of the Closing Date, substantially in the form of Exhibits B and C hereto, respectively;

        (f)    A joint notice to the Escrow Agent executed by Seller directing the Escrow Agent to pay the Escrow Deposit to Seller as part of the Purchase Price; and

        (g)  Such other documents, information, certificates and materials as may be required by this Agreement.

8.2    Documents to be Delivered by Buyer. At the Closing, Buyer shall deliver to Seller the following:

        (a)  Copies of resolutions of the managers, members, partners, board of directors and/or shareholders, as the case may be, of Buyer authorizing the execution, delivery and performance of this Agreement by Buyer and the consummation of the transactions contemplated hereby;

        (b)  A certificate, dated as of the Closing Date, executed on behalf of Buyer by a duly authorized representative of Buyer, certifying that the closing conditions specified in Section 7.2(a) have been satisfied;

        (c)  The Purchase Price in immediately available wire transferred federal funds as provided in Section 2.2 (including a joint notice to the Escrow Agent executed by Buyer directing the Escrow Agent to pay the Escrow Deposit to Seller as part of the Purchase Price);

        (d)  Such other documents, information, certificates and materials as may be required by this Agreement; and

        (e)  Opinions of Buyer's counsel dated as of the Closing Date, substantially in the form of Exhibit D hereto.

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ARTICLE 9
INDEMNIFICATION, SURVIVAL

9.1    Seller's Indemnities. From and after the Closing, Seller shall indemnify, defend, and hold harmless Buyer and its affiliates and their respective members, managers, partners, directors, officers, employees, and representatives, and the successors and assigns of any of them, and any person claiming by or through any of them, from and against, and reimburse them for, all claims, damages, liabilities, losses, costs and expenses, including, without limitation, interest, penalties, court costs and reasonable attorneys' fees and expenses, resulting from:

        (a)  The ownership or operation of the Station Assets prior to the Closing, including without limitation any liabilities arising under the Station Licenses or the Assumed Contracts which relate to events occurring prior to the Closing;

        (b)  Any liabilities of Seller not assumed by Buyer under this Agreement, including without limitation any liabilities arising at any time under any contract or agreement not included in the Assumed Contracts;

        (c)  Any untrue representation, breach of warranty or nonfulfillment of any covenant by Seller contained in this Agreement or in any certificate, document or instrument delivered by Seller to Buyer under this Agreement;

        (d)  Any failure of Seller to comply with any "bulk sales" laws applicable to the transactions contemplated hereby; or

        (e)  Any actions, suits, proceedings, claims, demands, assessments, judgments, costs and expenses, including reasonable legal fees and expenses, incident to any of the foregoing or incurred in investigating or attempting to avoid the same or to oppose the imposition thereof, or in enforcing this indemnity.

9.2    Buyer's Indemnities. From and after the Closing, Buyer shall indemnify, defend and hold harmless Seller and its affiliates and their respective members, managers, partners, directors, officers, employees, and representatives, and the successors and assigns of any of them, and any person claiming by or through any of them, from and against, and reimburse them for, all claims, damages, liabilities, losses, costs and expenses, including, without limitation, interest, penalties, court costs and reasonable attorneys' fees and expenses, resulting from:

        (a)  any untrue representation, breach of warranty or nonfulfillment of any covenant by Buyer contained in this Agreement or in any certificate, document or instrument delivered by Buyer to Seller under this Agreement;

        (b)  the ownership or operation of the Station Assets from and after the Closing;

        (c)  any actions, suits, proceedings, claims, demands, assessments, judgments, costs and expenses, including reasonable legal fees and expenses, incident to any of the foregoing or incurred in investigating or attempting to avoid the same or to oppose the imposition thereof, or in enforcing this indemnity; or

        (d)  any liability or obligations assumed by Buyer under this Agreement.

9.3    Procedure for Indemnification. The procedure for indemnification shall be as follows:

        (a)  The party seeking indemnification under this Article 9 (the "Claimant") shall give notice to the party from whom indemnification is sought (the "Indemnitor") of any claim, reasonably specifying (i) the factual basis for the claim; and (ii) the amount of the claim if then known. If the claim relates to an action, suit or proceeding filed by a third party against Claimant, notice shall be given by Claimant within fifteen (15) days after written notice of the action, suit or proceeding was

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given to Claimant. In all other circumstances, notice shall be given by Claimant within thirty (30) days after Claimant becomes aware of the facts giving rise to the claim. Notwithstanding the foregoing, Claimant's failure to give Indemnitor timely notice shall not preclude Claimant from seeking indemnification from Indemnitor if Claimant's failure has not materially prejudiced Indemnitor's ability to defend the claim or litigation.

        (b)  The Claimant shall make available to Indemnitor and/or its authorized representatives the information relied upon by the Claimant to substantiate the claim for indemnity.

        (c)  With respect to any claim by a third party as to which the Claimant is entitled to indemnification hereunder, the Indemnitor shall defend against the claim with counsel reasonably acceptable to Claimant, and the Claimant shall cooperate fully with the Indemnitor, subject to reimbursement for reasonable expenses incurred by the Claimant as the result of a request by the Indemnitor. The Claimant shall have the right to participate in the defense of the claim at its own expense. If the Indemnitor does not assume control of the defense of any third party claim, Claimant may, but shall have no obligation to, defend or settle such claim or litigation in such a manner as it deems appropriate, and in such event Indemnitor shall be bound by the results obtained by the Claimant with respect to the claim (by default or otherwise) and shall promptly reimburse Claimant for the amount of all expenses (including the amount of any judgment rendered), legal or otherwise, incurred in connection with such claim or litigation. The Indemnitor shall be subrogated to all rights of the Claimant against any third party with respect to any claim for which indemnity was paid.

9.4    Limitations. Neither party shall be required to indemnify the other party under this Article 9 unless (i) written notice of a claim under this Article 9 was received by the party within the pertinent survival period specified in Section 9.5; and (ii) the aggregate amount of claims against the party to which the other party (as a Claimant) is entitled to be indemnified under this Agreement exceeds $25,000, after which the Claimant shall be entitled to recover, and the Indemnitor shall be obligated for, all losses, costs, liabilities, damages and expenses for Claimant, including the first $25,000 of such losses.

9.5    Survival of Representations, Warranties and Covenants. The representations, warranties, covenants, indemnities and other agreements contained in this Agreement or in any certificate, document or instrument delivered pursuant to this Agreement are and will be deemed and construed to be continuing representations, warranties, covenants, indemnities and agreements and shall survive the Closing for a period of two (2) years (the "Survival Period"). No claim may be brought under this Agreement unless written notice describing in reasonable detail the nature and basis of such claim is given on or prior to the last day of the Survival Period. In the event such notice is given, the right to indemnification with respect thereto shall survive the Survival Period until such claim is finally resolved and any obligations thereto are fully satisfied. Any investigation by or on behalf of any party hereto shall not constitute a waiver as to enforcement of any representation, warranty, covenant or agreement contained herein.

ARTICLE 10
TERMINATION RIGHTS

10.1    Termination.

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        (a)  In addition to other available remedies, this Agreement may be terminated by either Buyer or Seller, if the party seeking to terminate is not in material default or breach of this Agreement, upon written notice to the other if:

        (i)    the other party is in material breach of this Agreement and such breach has been neither cured within thirty (30) days after written notice of such breach nor waived by the party giving such termination notice;

        (ii)  a court of competent jurisdiction or governmental, regulatory or administrative agency or commission shall have issued an order, decree or ruling or taken any other action permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement and such order, decree, ruling or other action shall have become final and nonappealable; or

        (iii)  the Closing has not occurred by a date that is nine (9) months from the date the FCC Application is accepted by the FCC for filing (the "Upset Date");

        (b)  This Agreement may be terminated by mutual written consent of Buyer and Seller.

        (c)  If either party believes the other to be in breach or default of this Agreement, the non-defaulting party shall, prior to exercising its right to terminate under Section 10.1(a)(i), provide the defaulting party with notice specifying in reasonable detail the nature of such breach or default. Except for a failure to pay the Purchase Price, the defaulting party shall have thirty (30) days from receipt of such notice to cure such default; provided that, if the breach or default is due to no fault of the defaulting party and is not capable of cure within such thirty (30) day period, the cure period shall be extended as long as the defaulting party is diligently and in good faith attempting to effect a cure. Nothing in this Section 10.1(c) shall be interpreted to extend the Upset Date.

10.2    Effect of Termination. The following sections shall survive the termination of this Agreement pursuant to Section 10.1(a): 6.4 (Confidentiality), 11.1 (Default by Seller), 11.2 (Default by Buyer; Liquidated Damages), 11.3 (Limitations on Damages), 12.3 (Entire Agreement; Schedules; Amendment; Waiver), 12.4 (Headings), 12.5 (Computation of Time), 12.6 (Governing Law; Waiver of Jury Trial), 12.7 (Attorneys' Fees), 12.9 (Notices), 12.10 (Counterparts) and 13.1 (Definitions).

ARTICLE 11
REMEDIES UPON DEFAULT

11.1    Default by Seller; Specific Performance. If Seller breaches or defaults in its obligations under this Agreement, Buyer may pursue any remedies available to it. In the event of such breach of this Agreement by Seller, Buyer will incur substantial damages that are difficult to quantify. Consequently, Seller agrees that Buyer shall be entitled, in the event of a default by Seller, to specific performance of any of the provisions of this Agreement in addition to any other legal or equitable remedies to which it may otherwise be entitled

11.2    Default by Buyer; Liquidated Damages. If this Agreement is terminated by Seller prior to the Closing pursuant to Section 10.1(a)(i) as a result of a breach or default by Buyer of its representations, warranties, covenants or obligations hereunder, Buyer shall pay the Escrow Deposit to Seller as liquidated damages, in full settlement of any damages of any kind or nature that Seller may suffer or allege to suffer as a result thereof, it being understood and agreed that the amount of liquidated damages represents Buyer's and Seller's reasonable estimate of actual damages and does not constitute a penalty. In the event that Seller is entitled to liquidated damages, the Escrow Deposit plus interest accruing after the date that Seller became entitled to liquidated damages shall be paid over to Seller in satisfaction of Buyer's liability for liquidated damages under this Section 11.2, and all interest

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on the Escrow Deposit up until the date that Seller was entitled to liquidated damages shall be paid to Buyer.

11.3    Limitations on Damages. Notwithstanding the foregoing, neither party shall be liable to the other for special, consequential, punitive or exemplary damages, and in no event shall Seller's total liability to Buyer under this Agreement (including, for example, Seller's liability to Buyer pursuant to Section 9.1 (Seller's Indemnities)) exceed the amount of the Purchase Price received by Seller.

ARTICLE 12
OTHER PROVISIONS

12.1    Transfer Taxes and Expenses. All recordation, transfer, and documentary fees (but not including FCC fees or sales taxes, if any) imposed on this transaction shall be paid one-half by Buyer and one-half by Seller. Sales taxes, if any, imposed in connection with the transactions contemplated by this Agreement shall be paid one-half by Buyer and one-half by Seller. Seller shall pay the premium for the title insurance referred to in Section 7.1(h). Except as otherwise provided in this Agreement, each party shall be solely responsible for and shall pay all other costs and expenses (including attorney and accounting fees) incurred by it in connection with the negotiation, preparation and performance of and compliance with the terms of this Agreement.

12.2    Benefit and Assignment. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. Neither Buyer nor Seller may assign its rights under this Agreement without the prior written consent of the other; provided, however, that Buyer may assign this Agreement to one or more of its wholly-owned subsidiaries so long as (i) such assignment does not result in any delay of the Closing and (ii) Hispanic Broadcasting Corporation continues to remain liable hereunder for the obligations of the assignee(s).

12.3    Entire Agreement; Schedules; Amendment; Waiver. This Agreement and the exhibits and schedules hereto and thereto, embody the entire agreement and understanding of the parties hereto and supersede any and all prior agreements, arrangements and understandings relating to the matters provided for herein. Any matter that is disclosed in a schedule hereto shall be deemed to have been included in other pertinent schedules, notwithstanding the omission of an appropriate cross-reference. No amendment, waiver of compliance with any provision or condition hereof or consent pursuant to this Agreement shall be effective unless evidenced by an instrument in writing signed by the party against whom enforcement of any waiver, amendment or consent is sought. No failure or delay on the part of Buyer or Seller in exercising any right or power under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any 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.

12.4    Headings. The headings set forth in this Agreement are for convenience only and shall not control or affect the meaning or construction of the provisions of this Agreement.

12.5    Computation of Time. If after making computations of time provided for in this Agreement, a time for action or notice falls on Saturday, Sunday or a federal holiday, then such time shall be extended to the next business day.

12.6    Governing Law; Waiver of Jury Trial. The construction and performance of this Agreement shall be governed by the law of the State of California without regard to its principles of conflicts of law. Any dispute which arises under or relates to this Agreement (whether in contract, tort or both) shall be resolved in the United States District Court for the Northern District of California, or state court, at San Jose, California. By executing and delivering this Agreement, the parties submit to the jurisdiction of such courts. BUYER AND SELLER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING

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RELATING IN ANY WAY TO THIS AGREEMENT, INCLUDING ANY COUNTERCLAIM MADE IN SUCH ACTION OR PROCEEDING, AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE DECIDED SOLELY BY A JUDGE. Buyer and Seller hereby acknowledge that each has been represented by counsel in the negotiation, execution and delivery of this Agreement and that their lawyers have fully explained the meaning of the Agreement, including in particular the jury-trial waiver. Any question of doubtful interpretation shall not be resolved by any rule providing for interpretation against the party who causes the uncertainty to exist or against the drafter of this Agreement.

12.7    Attorneys' Fees. In the event of any dispute between the parties to this Agreement, Seller or Buyer, as the case may be, shall reimburse the prevailing party for its reasonable attorneys' fees and other costs incurred in enforcing its rights or exercising its remedies under this Agreement. Such right of reimbursement shall be in addition to any other right or remedy that the prevailing party may have under this Agreement.

12.8    Severability. If any term or provision of this Agreement or the application thereof to any person or circumstance shall, to any extent, be held invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each such term and provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law.

12.9    Notices. Any notice, demand or request required or permitted to be given under this Agreement shall be in writing and shall be addressed to the following addresses or to such other address as any part may request:

        If to Seller:

Robert S. Kieve, President
Empire Broadcasting Corporation
P.O. Box 995
San Jose, CA 95108-0995
Fax: (408) 293-6124
kiev@empirebroadcasting.com

        With a copy to:

David W. Mitchell, Esq.
60 South Market Street, Suite 1400
San Jose, CA 95113
Fax: (408) 287-2583
E-Mail: dwm@hogefenton.com

        and

Jerome S. Silber, Esq.
23 Wilmont Avenue
White Plains, NY 10605
Fax: (914) 428-0088
E-Mail: radiolaw21@aol.com

        If to Buyer:

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Hispanic Broadcasting Corporation
3102 Oak Lawn Avenue, Suite 215
Dallas, Texas 75219
Attn: Jeffrey T. Hinson, Senior Vice President
Fax:    214-525-7750
E-mail: jhinson@hispanicbroadcasting.com

        With a copy to:

Hallett & Perrin
2001 Bryan St., Suite 3900
Dallas, Texas 75201
Attn: Bruce H. Hallett
Fax:    214-922-4170
E-mail: bhallett@hallettperrin.com

Any such notice, demand or request shall be deemed to have been duly delivered and received (a) on the date of personal delivery, (b) on the date of transmission if sent by facsimile, (c) on the date of receipt if mailed by registered or certified mail, postage prepaid and return receipt requested, or (d) on the date of a signed receipt if sent by an overnight delivery service.

12.10    Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed an original and all of which together will constitute one and the same instrument.

ARTICLE 13
DEFINITIONS

13.1    Defined Terms. Unless otherwise stated in this Agreement, the following terms when used herein shall have the meanings assigned to them below (such meanings to be equally applicable to both the singular and plural forms of the terms defined).

        "Agreement" shall mean this Asset Purchase Agreement.

        "Assumed Contracts" shall have the meaning set forth in Section 1.2(c).

        "Buyer" shall have the meaning set forth in the preamble to this Agreement.

        "Claimant" shall have the meaning set forth in Section 9.3.

        "Closing" shall have the meaning set forth in Section 1.1.

        "Closing Date" shall mean the date on which the Closing is completed.

        "Code" shall mean the Internal Revenue Code of 1986, as amended, and the regulations thereunder, or any subsequent legislative enactment thereof, as in effect from time to time.

        "Compensation Arrangement" means any plan or compensation arrangement other than an Employee Plan or a Multiemployer Plan, whether written or unwritten, which provides to employees or former employees of the Station any compensation or other benefits, whether deferred or not, in excess of base salary or wages, including, but not limited to, any bonus or incentive plan, stock rights plan, deferred compensation arrangement, stock purchase plan, severance pay plan and any other employee fringe benefit plan.

        "Employee Plan" means any pension, retirement, profit-sharing, deferred compensation, vacation, severance, bonus, incentive, medical, vision, dental, disability, life insurance or any other employee benefit plan as defined in Section 3(3) of ERISA (other than a Multiemployer Plan) to which Seller contributes or is bound or which Seller sponsors, or maintains.

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        "Escrow Agent" shall mean Media Venture Partners, Ltd..

        "Escrow Agreement" shall mean the agreement among Seller, Buyer and Escrow Agent substantially in the form attached hereto as Exhibit A.

        "Escrow Deposit" shall have the meaning set forth in Section 2.2(a).

        "FCC" shall have the meaning set forth in the preamble to this Agreement.

        "FCC Application" shall mean the application or applications that Seller and Buyer must file with the FCC requesting its consent to the assignment of the FCC Licenses from Seller to Buyer.

        "FCC Consent" shall mean the action by the FCC granting the FCC Application.

        "FCC Licenses" shall have the meaning set forth in Section 1.2(a).

        "Final Order" shall mean action by the FCC with respect to the FCC Application (i) which has not been vacated, reversed, stayed, set aside, annulled or suspended, (ii) with respect to which no timely appeal, request for stay or petition for rehearing, reconsideration or review by any party or by the FCC on its own motion is pending, and (iii) as to which the time for filing any such appeal, request, petition or similar document or for the reconsideration or review by the FCC on its own motion under the Communications Act of 1934, as amended, has expired.

        "Indemnitor" shall have the meaning set forth in Section 9.3.

        "Leased Property" shall have the meaning set forth in Section 3.7(a).

        "Liens" shall mean mortgages, deeds of trust, liens, security interests, pledges, collateral assignments, condition sales agreements, leases, encumbrances, claims or other defects of title, but shall not include (i) liens for current taxes not yet due and payable, (ii) other liens imposed by law (such as materialman's mechanic's, carrier's, worker's and repairman's liens) arising in the ordinary course of business (provided that such liens do not interfere in any material respect with the use of the Station Assets as currently used and that Seller remains liable for paying such liens), (iii) valid leases or subleases to third parties with respect to property not used in the operation of the Station, and which are listed on Schedule 1.2(h); and (iv) in respect of the Real Property, defects in title or other matters that do not materially adversely affect the continued use of the Real Property as currently used by Seller.

        "Material Contracts" shall have the meaning set forth in Section 1.2(c).

        "Other Contracts" shall have the meaning set forth in Section 1.2(c).

        "Personal Property" shall have the meaning set forth in Section 1.2.

        "Purchase Price" shall have the meaning set forth in Section 2.1.

        "Real Property" shall have the meaning set forth in Section 1.2.

        "Seller" shall have the meaning set forth in the preamble to this Agreement.

        "Station" shall have the meaning set forth in the preamble to this Agreement.

        "Station Assets" shall mean the assets to be transferred to Buyer hereunder, as more fully specified in Section 1.2.

        "Station Licenses" shall have the meaning set forth in Section 1.2(a).

        "Survival Period" shall have the meaning set forth in Section 9.5.

        "Trade-Out Agreements" shall have the meaning set forth in Section 1.2(i).

        "Upset Date" shall have the meaning set forth in Section 10.1(a)(iii).

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13.2.    Miscellaneous Terms. The term "or" is disjunctive; the term "and" is conjunctive. The term "shall" is mandatory; the term "may" is permissive. Masculine terms apply to females as well as males; feminine terms apply to males as well as females. The term "includes" or "including" is by way of example and not limitation.

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        IN WITNESS WHEREOF, the parties hereto have caused this Asset Purchase Agreement to be duly executed as of the date first written above.

        SELLER:

        Empire Broadcasting Corporation

        By: /s/ Robert S. Kieve

      Robert S. Kieve, President

        BUYER:

        Hispanic Broadcasting Corporation

        By: /s/ McHenry T. Tichenor, Jr.

      McHenry T. Tichenor, President and CEO

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QuickLinks

ASSET PURCHASE AGREEMENT
ARTICLE 1 ASSETS TO BE CONVEYED
ARTICLE 2 PURCHASE PRICE
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLER
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BUYER
ARTICLE 5 GOVERNMENTAL CONSENTS
ARTICLE 6 COVENANTS
ARTICLE 7 CONDITIONS PRECEDENT
ARTICLE 8 DOCUMENTS TO BE DELIVERED AT THE CLOSING
ARTICLE 9 INDEMNIFICATION, SURVIVAL
ARTICLE 10 TERMINATION RIGHTS
ARTICLE 11 REMEDIES UPON DEFAULT
ARTICLE 12 OTHER PROVISIONS
ARTICLE 13 DEFINITIONS

EX-10.17

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Exhibit 10.17

EMPLOYMENT, NONCOMPETITION
AND ARBITRATION AGREEMENT

        This Employment, Noncompetition and Arbitration Agreement ("Agreement") is made and entered into effective as of November 5, 2001, (the "Effective Date"), between HBC Management Company, Inc. ("Employer"), and Jeffrey T. Hinson ("Employee").

        This Agreement is made in consideration of the parties' mutual desire to enter into an employment relationship and the parties' recognition of Employer's need to protect its legitimate business interests including its Confidential Information and trade secrets, public image, market share, business relationships, customer information and goodwill. In consideration of the mutual promises set out in this Agreement and for other good and valuable consideration, Employer and Employee agree to the following:

1.

Employment.    Employer hereby employs Employee and Employee accepts such employment as of the Effective Date for the compensation and upon the terms and conditions set forth in this Agreement.

2.

Compensation.

(a)

Base Salary, Profit Sharing, and Annual Bonus.

During the Term of Employment (as hereinafter defined), subject to the conditions hereinafter set forth, as full compensation for all services to be rendered pursuant to this Agreement, Employer shall pay to Employee cash compensation as set forth on Exhibit A attached hereto. The Employee's Base Salary, Profit Sharing, and Annual Bonus shall be reviewed by the Compensation Committee of Employer's Board of Directors not less frequently than on an annual basis. Employee's base salary shall be increased 5% each January 1 during the term hereof, and Employee's Profit Sharing and Annual Bonus may be increased (but not decreased from the minimum level set forth on Exhibit A) in Employer's sole discretion. Notwithstanding the above or anything contained in Exhibit A, Employee's Cash Compensation attributable to any calendar year (i.e., Employee's Base Salary and Profit sharing paid during a certain calendar year, plus Employee's Annual Bonus attributable to such calendar year but paid the following calendar year) during the Initial Employment Term hereunder (including calendar 2001) shall not be less than $600,000 (prorated for any partial year). Any shortfall as of the end of a calendar year shall be made up in a lump sum (subject to applicable withholding and deductions) to be paid during the first calendar quarter of the subsequent year. The Base Salary, Profit Sharing, and Annual Bonus paid to Employee shall be payable in accordance with Employer's general payroll practices, less such deductions or withholdings as may be required or authorized by applicable law.

(b)

Stock Options.

Employee will receive Sixty thousand (60,000) shares of HBC stock options at a price established on the Effective Date. Thirty thousand (30,000) of these option shares shall be fully vested upon grant; and the balance shall vest as follows: 20% on the first anniversary of the stock option grant, with an additional 20% vesting on each of the following four anniversaries. During the Term of employment, Employee will be eligible to receive grants of stock options, on an annual basis, as part of and subject to the terms and conditions contained in Employer's Long-Term Incentive Plan and the terms and conditions in an Option Agreement; provided, however, that the termination of any vested options shall not be accelerated as a result of termination of Employee's employment with Employer.

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(c)

Additional Benefits.

During the Term of Employment, and subject to the right of Employer to amend or terminate any employee benefit plan, and further subject to Employer's policies, procedures and plans generally applicable to full-time, regular, exempt employees, Employee shall be entitled to (i) vacation and leave benefits; provided that Employee shall be entitled to a minimum of four weeks of vacation time, (ii) participation in medical and dental plans, and other employee and/or group benefit plans, subject to the restrictions of those plans, and (iii) reimbursement of pre-approved reasonable and necessary business expenses incurred in connection with the performance of Employee's duties in the normal course of business of Employer.

(d)

Confidentiality of Compensation.

Absent Employer's written consent or unless otherwise required by applicable law or regulation, Employee agrees not to discuss or disclose his compensation publicly or with any current, former or prospective employee, any customer, competitor, or any individual employed in the broadcasting industry.

3.

Duties of Employee.

(a)

Description of Duties.

Employee shall be employed in the position of Senior Vice President and Chief Financial Officer of Hispanic Broadcasting Corporation, reporting to the Chief Executive Officer. The services to be rendered by Employee hereunder shall include, without limitation and subject to modification based on Employer's reasonable discretion, all services customarily rendered by persons engaged in the same or a similar capacity in the broadcast and entertainment industry and such other services as Employer reasonably may require of Employee from time to time. Employee shall render Employee's services during the term of this Agreement primarily in Dallas, Texas, conscientiously, and to the full limit of Employee's ability; subject in all respects to the supervision, control and direction of Employer. In order to perform his duties hereunder, Employee shall travel to such locations as Employer may deem advisable. In addition, it is understood that Employee may work from an off-site location for up to four weeks per calendar year, provided that he can reasonably perform his duties from such location. Employer's judgment shall be final and controlling in all matters including, without limitation, matters of business judgment.

(b)

Standards of Performance and Conduct.

Employee shall devote substantially his full time, attention and best efforts in performing his duties as Chief Financial Officer for Employer, and in promotion of the affairs and interests of Employer. Employee agrees to at all times perform faithfully and to the best of his ability, experience and talent all of the duties that may be required of him under this Agreement and conduct himself in a manner to enhance the public image and acceptance of Employer.

Employee agrees further to comply at all times with all rules and regulations of applicable governmental agencies and with the standards, policies, instructions, directions, rules and regulations which may from time to time be established by Employer, related to the performance of his duties as Chief Financial Officer for Employer. In addition, Employee shall comply with and conform to all policies, rules and regulations of Employer's current version of the Employment Policies and Benefits Handbook or any other document setting forth Employer's policies, rules and regulations.

(c)

Exclusivity of Service.

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Employee agrees to devote substantially all of his working time, best efforts and attention to the affairs and interests of Employer, and Employer shall be entitled to Employee's services and the benefits of Employee's skills and efforts as a full-time employee. Employee shall not, directly or indirectly, render any service of a business, commercial or professional nature to any other person or organization, whether for compensation or otherwise, without the prior written consent of Employer, which shall not be unreasonably withheld so long as, in Employer's reasonable judgment, such rendering of service will not or does not interfere with Employee's performance of his duties as described in this Agreement.

(d)

Absence of Restrictions.

Employee represents and warrants to Employer that he knows of no reason that he cannot legally enter into this Agreement and perform the services described hereunder for Employer's benefit. Specifically, Employee represents that he is not a party to any existing agreement containing a noncompetition provision or any other restrictive agreement with respect to (i) the nature of any services of business which he is entitled to perform or conduct under this Agreement, (ii) the disclosure or use of any information which directly or indirectly relates to the nature of the business of Employer or the services to be rendered by Employee under this Agreement, or (iii) any other restriction which would restrict his employment by Employer or the performance of his duties under this Agreement.

4.

Duration of Employment.    The term of Employee's employment shall continue pursuant to this Agreement from the Effective Date for a period of three (3) years ("Initial Term of Employment"), subject to a later extension or earlier termination under the provisions of this paragraph ("Term of Employment"). The Initial Term shall automatically be extended for an additional one-year term on each the anniversary of this Agreement unless, before such anniversary, either party shall give notice to the other that it elects to terminate this automatic extension provision.

(a)

Termination Without Cause.

Employer shall have the right to terminate Employee's employment under this Agreement, at Employer's election in its sole discretion, without Just Cause, at any time. In the event of such termination without Just Cause, and in lieu of notice to Employee, Employer shall pay to Employee a lump sum equal to the minimum level of annual compensation set forth on Exhibit A hereto, prorated over any remaining period of the Initial Term of Employment, less such deductions or withholdings as may be required or authorized by applicable law. This payment shall not otherwise be subject to offset or mitigation.

(b)

Termination by Death or Disability.

Employee's employment shall terminate automatically upon the death or disability of Employee. For purposes of this Agreement, disability means Employee's inability, with or without reasonable accommodation in accordance with the Americans With Disabilities Act, whether a physical or mental disability, to substantially perform his services hereunder (i) for a period of four consecutive months, or (ii) for shorter periods aggregating six months during any twelve month period. If Employer and Employee are unable to agree whether Employee is disabled, the question will be decided by a licensed physician to be designated and paid for by Employer, subject to the approval of Employee, which approval may not be unreasonably withheld, whereby the designated physician's determination is agreed by both parties to be final and binding.

(c)

Termination for Just Cause.

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Employer shall have the right to terminate the employment of Employee under this Agreement, for "Just Cause," which for purposes of this Agreement shall mean the occurrence of any of the following:

i.

The material neglect or failure of Employee to perform his job duties satisfactorily after receiving notice from Employer of such deficiencies and being afforded a reasonable opportunity to remedy them;



ii.

The conviction of Employee for a felony or a misdemeanor involving fraud, embezzlement, theft, dishonesty, or any act of moral turpitude;



iii.

Any breach of any of the terms of this Agreement; provided, however, that Employee shall have 30 days after written notice from Employer to cure any non-egregious or non-material breach, and Employer may, in its reasonable discretion, provide Employee a reasonable opportunity to remedy a material breach consistent with Employer's customary practices of dealing with similar breaches by its senior executives;



iv.

Any material unlawful treatment of Employer's employees by Employee if Employee shall fail to cure such treatment after reasonable notice from Employer;



v.

Any material act of dishonesty, misconduct, disloyalty, fraud, gross negligence, insubordination or misappropriation of confidential information;



vi.

A material failure to follow any instructions, policies or rules from or by Employee's supervisor including the policies contained in Employer's current Employment Policies and Benefits Handbook, which failure continues without cure by Employee after written notice from Employer;



vii.

The habitual abuse of alcohol or any illegal drug that continues after written notice from Employer;



viii.

Any other conduct that is materially detrimental to Employer's business or reputation and/or exposes Employer to material liability based upon the act(s) of Employee.

5.

Payment Upon Termination of Employment.    In the event of the termination of Employee's employment under sub-paragraphs 4(b) or (c) of this Agreement, Employer's obligations under paragraph 2 of this Agreement shall cease without further responsibility by Employer to Employee or Employee's legal representative, other than for the payment of accrued Base Salary through either 1) in the case of termination under sub-paragraphs ii or v sub-paragraph 4(c) of this Agreement, the date of termination, or 2) a date that is 180 days after the date of termination (and not subject to offset or mitigation), and the payment or provision of other accrued benefits required by law, and the coverage, benefits or provision of any employee benefit plan as required by law.

6.

Property Rights.    All recordings, programming, commercials, data, copy, marketing materials, business plans, customer lists, financial information, research results, and written materials, whether or not generated or created by Employee during the term of this Agreement, are the exclusive property of Employer. All documents or other tangible property and concepts or inventions or other intangible property relating in any way to the business of Employer which are conceived of or generated by Employee or come into Employee's possession during employment shall be and remain the property of Employer. Employee must return all such documents and tangible property to Employer on termination of employment or at such earlier time as Employer may request.

7.

(Intentionally Omitted)

8.

Confidentiality.

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(a)

Definition of Confidential Information.

The term "Confidential Information" as used in this Agreement shall include all ideas, materials, information, data, records, trade secrets, methods or plans developed, used or employed by Employer or any of its radio stations, affiliates or customers and not generally known to the public. Confidential Information also includes, without limitation, all information regarding Employer, or any of its radio stations, affiliates or customers with regard to their respective financial affairs, accounts, marketing plans, operations, policies, procedures, strategies, program formats, plans for development of new services and expansion into new areas or markets, internal operations, business strategies, budgets, pricing, products, properties, processes, rate structure, services, listening audience information, customer or advertiser lists and specific information relating to needs, preferences, and pricing structure, sales and promotional programs targeting direct and agency accounts, information regarding prospective and strategic alliances and acquisitions, commission structure, employee names and addresses, employment histories, compensation, placements, or any other customer and employee information contained in Employer's files, together with all written, graphic, recorded and other materials relating to all or any of the same; provided, however, that Confidential information shall not include information which properly and lawfully has become generally known to the public rather than as a result of the act or omission of Employee.

(b)

Importance of Confidential Information.

Employee acknowledges that in and as a result of his employment by Employer, he will be making use of, acquiring, accessing and/or adding to Confidential Information. Employee recognizes that access to and knowledge of this information is essential to the performance of Employee's duties hereunder. Employee acknowledges and agrees that Employer's Confidential Information is a valuable, special and unique asset of Employer and such Confidential Information is extremely important in the highly competitive radio broadcast industry. Employee acknowledges that the disclosure of any Confidential Information may cause imminent harm and substantial, irreparable injury, including loss of profit and other damages such as loss of goodwill and a decrease in market share which are difficult to calculate. Employee acknowledges that Employer retains a proprietary interest in its Confidential Information that persists beyond the termination of Employee's employment by Employer. Employee further acknowledges that the preservation and protection of the Confidential Information is an essential part of Employee's employment by and business relationship with Employer and that Employee has a duty of fidelity and trust to Employer in handling the Confidential Information.

(c)

Non-Disclosure or Misuse.

As a material inducement to Employer to enter into this Agreement and pay Employee the Base Salary as set forth on Exhibit A attached hereto, Employee covenants and agrees that he shall not, at any time (whether during the term of this Agreement or after expiration or termination), without the prior written consent of Employer in each instance or as otherwise may be required by law or legal process, disclose to any person or entity any Confidential Information, or utilize such Confidential Information for Employee's own benefit, or for the benefit of any third party, until such time, if ever, as such Confidential Information becomes general public knowledge (unless caused by any act of Employee in violation of this Agreement). Employee will take all reasonable steps necessary, or reasonably requested by Employer, to ensure that all Confidential Information is kept confidential for the use and benefit of Employer. Further, all memoranda, records or other documents constituting Confidential Information compiled by, made available to or under the control of Employee

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during the Term of this Agreement, relating to Employer, shall be the property of Employer and shall be promptly delivered to Employer on the termination of Employee's employment or at any other time upon the request of Employer. Employee agrees he will not make or retain any copy of or extract from such materials.

9.

Noncompetition and Nonsolicitation Agreements.    Employee acknowledges and agrees that information, including the Confidential Information, he has acquired and will acquire during the course of his employment will enable Employee to irreparably injure Employer if Employee should engage in any business that is competitive with the business conducted by Employer. Employee also acknowledges that his position is one, which requires public involvement with Employer, thus the position requires loyalty to preserve a positive public image of Employer and to prevent injury to Employer by participating in a competing business. Therefore, in consideration of the compensation and benefits provided to Employee and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, Employee hereby agrees as follows:

(a)

Noncompetition.

During the Term of this Agreement and for a period of one (1) year following the termination of Employee's employment by Employer for cause, Employee will not, directly or indirectly, be employed by any other Spanish language radio programming business, Spanish language radio station, or Spanish language television station or network, whose signal or programming is available by over-the-air broadcast or subscription, within any Total Survey Area (TSA) as currently defined by The Arbitron Company in its Radio Market Reports in which Employer has operations during the term hereof.

(b)

Nonsolicitation of Employees.

During the Term of this Agreement and for a period of one (1) year following the termination of Employee's employment with Employer for any reason, including termination without cause, Employee shall not, on Employee's own behalf or on behalf of any other person or entity, hire, solicit, seek to hire, or offer employment to any person who is, during such time frame, an employee of Employer or in any other manner attempt, directly or indirectly, to influence, induce, or encourage any employee of Employer to leave the employment of Employer.

(c)

Nonsolicitation of Business Relationships.

During the Term of this Agreement and for a period of one (1) year following the termination of Employee's employment by Employer for cause, Employee will not, within the TSA of any market in which Employer has operations during the term hereof, directly or indirectly solicit Employer's customers, for the purpose of engaging in any business which is the same as or similar to the business in which Employer is engaged. For purposes of this Agreement, the term "customers" means all persons or entities with whom Employee has, during the period of Employee's employment with Employer, had contact with by virtue of Employee's position with Employer, and to whom Employer or any of its radio stations or affiliates has sold any product or service, whether or not for compensation, within a period of one year prior to the time Employee ceases to be employed by Employer.

(d)

Reasonableness of Restrictions.

Employee has carefully read and considered the provisions of this paragraph 9, and having done so, agrees that the restrictions set forth herein, including, but not limited to, the time period of restriction, the geographic areas of restriction, and the scope of the restriction are fair and reasonable, are supported by sufficient and valid consideration, and these restrictions do not impose any greater restraint than is necessary to protect the goodwill and other

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legitimate business interests of Employer and its affiliated entities, officers, directors, shareholders and other employees. Employee acknowledges that these restrictions will not prevent him from obtaining gainful employment in Employee's occupation or field of expertise or cause him undue hardship; that there are numerous other employment and business opportunities available to him that are not affected by these restrictions; and that Employee's ability to earn a livelihood without violating such restrictions is a material condition to employment with Employer.

(e)

Notification.

Employee agrees that Employer may notify any person or entity employing Employee or evidencing an intention of employing Employee of the existence and provisions of this Agreement.

10.

Communications Act.    Reference is made to Section 508 of the Federal Communications Act which provides, in part, as follows:

"[A]ny person, who in connection with the production or preparation of any program or program matter which is intended for broadcasting over any [radio] stations, accepts or agrees to accept, or pays or agrees to pay, any money, services or other valuable consideration for the inclusion of any matter as a part of such program or program matter, shall, in advance of such broadcast, disclose the fact of such acceptance or payment or agreement to the payee's employer, or to the person for whom such program or program matter is being produced, or to the license of such station over which such program is broadcast. [A]ny person who supplies to any other person any program or program matter, which is intended for broadcasting over any [radio] station shall, in advance of such broadcast, disclose to such other person any information of which he has knowledge, or which has been disclosed to him, as to any money, service or other valuable consideration which any person has paid or accepted, or has agreed to pay or accept, for the inclusion of any matter as a part of such program or program matter."

Employee acknowledges that Employee is familiar with the requirements of Section 508 of the Federal Communications Act and is aware that the violation of any of the provisions thereof constitutes a criminal offense. Employee represents and warrants that Employee has not violated and will not violate any of the provisions of said Section 508, and has not done and will not do any act which would require disclosure pursuant to said Section 508.

11.

Court's Right to Reform Restrictions.    The parties have attempted to limit Employee's right to compete only to the extent necessary to protect Employer from unfair competition. However, should a court of competent jurisdiction determine that the scope of the covenants contained in paragraphs 8 and 9 exceeds the maximum restrictiveness such court deems reasonable and enforceable, the parties intend that the court should reform, modify and enforce the provision to such narrower scope as it determines to be enforceable under the circumstances existing at that time.

12.

Severability.    If any provision, paragraph or subparagraph of this Agreement is held by any court to be void or unenforceable in whole or in part, such adjudication shall not affect the validity of the remainder of the Agreement, including any other provision, paragraph or subparagraph. Each provision, paragraph or subparagraph is separable and severable from every other provision, paragraph and subparagraph, and this Agreement shall be construed and enforced as if such void

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or unenforceable portion were never a part of this Agreement and the remaining provisions, paragraphs and subparagraphs of this Agreement shall remain in full force and effect.

13.

Enforcement of Covenants.    Employee acknowledges that compliance with the confidentiality, noncompetition or nonsolicitation restrictive covenants contained in paragraphs 8 and 9 of this Agreement is necessary to protect the business and goodwill of Employer. Employee also acknowledges that a breach of such covenants will result in irreparable and continuing damages to Employer, for which money damages may be an insufficient remedy to Employer. Further, Employee acknowledges that the ascertainment of the full amount of damages in the event of Employee's breach of any provision of this Agreement would be difficult. Consequently, Employee agrees that, in the event of a breach or threatened breach the restrictive covenants, that the parties, in addition to all other remedies they may have, and in lieu of or in addition to arbitration proceedings, shall be entitled to both (a) temporary, preliminary and/or permanent injunctive relief in any court of competent jurisdiction to restrain the breach of or otherwise to specifically enforce any of the covenants in order to prevent the continuation of such harm; and (b) money damages insofar as they can be determined. Nothing in this Agreement shall be construed to prohibit Employer from also pursuing any other remedy, the parties having agreed that all remedies are cumulative.

14.

Arbitration.    As a part of, and in consideration for this Agreement and the compensation and other benefits paid herein and in consideration for the Employer's mutual agreement to arbitrate certain claims, Employee agrees that any dispute he may have against Employer, its subsidiaries, affiliates, directors, officers, agents, representatives, attorneys, employees, successors or assigns, under either state or federal law, arising out of this Agreement, Employee's employment or Employee's termination of employment, will be submitted to final and binding arbitration in accordance with Employer's then current arbitration procedures.

However, nothing in this paragraph 14 shall be construed to prevent Employer from asking a court of competent jurisdiction to enter appropriate equitable relief to enjoin a violation of the confidentiality, noncompetition and nonsolicitation provisions contained in paragraphs 8 and 9 of this Agreement. Employer shall have the right to seek such relief in connection with or apart from the parties' rights under this clause to arbitrate all disputes.

Employee expressly acknowledges that Employer's arbitration procedures requires Employee to initiate the arbitration procedure within one hundred and eighty days (180) days after Employee's termination or resignation or after Employee knows or should have known of the adverse employment action. By agreeing to arbitrate, Employee understands that Employee and Employer are mutually agreeing to submit all disputes to an arbitral rather than judicial forum.

Employee and Employer agree that, based on Employer's current arbitration procedures, which procedures may be changed by Employer with thirty (30) days written notice to Employee, an arbitrator will be selected from JAMS/Endispute (JAMS) and that JAMS shall schedule any arbitration and appoint the arbitrator, if the parties cannot agree on the selection of the arbitrator. Employee understands that the cost of the arbitrator will be borne equally by Employee and Employer, and that the decision of the arbitrator shall be final and binding. In the event that either party to this Agreement brings or pursues a dispute in a court of law, which dispute is subject to final and binding arbitration in accordance with this Agreement and should have been brought or submitted to arbitration, that party shall pay all reasonable attorneys' fees and court costs incurred by the other party in filing any motion to compel arbitration, motion to dismiss or other pleading with said court to enforce arbitration under those procedures.

15.

Acknowledgment.    Employee acknowledges and agrees with each of the following statements:

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(a)

I am executing this Agreement voluntarily and without any duress or undue influence by Employer or anyone else;



(b)

I have carefully read this Agreement. I have asked any questions needed for me to understand the terms, consequences and binding effect of this Agreement and I fully understand the terms, consequences and effect of this Agreement; and



(c)

I was given ample time to seek the advice of an attorney of my choice before signing this Agreement.

16.

Notices.    Any notices or writings required under this Agreement shall be regarded as delivered when a copy of the same shall have been sent by certified mail with postage prepaid or personally delivered to such parties at the following addresses or at such other addresses as the parties shall hereafter designate in writing:

TO EMPLOYEE:	Jeffrey T. Hinson
	3440 Potomac Avenue
	Dallas, Texas 75205
TO EMPLOYER	HBC Management Company, Inc.
	3102 Oak Lawn Avenue, Suite 215
	Dallas, Texas 75219
	Attn: Chief Executive Officer

Hand-delivered notices shall be deemed communicated upon receipt; mailed notices shall be deemed communicated four days after mailing. Any party may change the address to which notices should be sent by giving notice as provided in this section.

17.

Modification.    No change or modification of this Agreement shall be valid or binding upon the parties to this Agreement, nor shall any waiver of any term or condition in the future be so binding, unless such change or modification or waiver is in writing and signed by the parties to this Agreement.

18.

Applicable Law, Venue and Jurisdiction.    This Agreement shall be governed by and construed in accordance with the substantive laws of the state of Texas, without regard to the rules governing conflicts of laws. The parties agree that this Agreement will be deemed to be executed and performable in Dallas County, Texas.

19.

Assignment.    By reason of the special and unique nature of the services hereunder, it is agreed that neither party hereto may assign any interest, rights or duties which it or they may have in this Agreement without the written consent of the other, provided, however, that Employer may, without the written consent of Employee, assign this Agreement to (a) any entity into which Employer is merged or to which Employer transfers substantially all of its assets, or (b) any entity controlling, under common control with, or controlled by Employer.

20.

No Waiver.    The failure to enforce at any time any of the provisions of this Agreement or to require at any time performance by the other party of any of the provisions of this Agreement shall in no way be construed (a) to be a waiver of such provisions, or (b) to affect the validity of this Agreement, or any part of this Agreement, or the right of either party to enforce each provision in accordance with the terms of this Agreement.

21.

Costs.    If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to attorney's fees and costs in addition to any other relief to which the prevailing party may be entitled.

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22.

Legal Authorization to Work in the United States.    Employee acknowledges that his employment under this Agreement is contingent upon his submitting the legally required proof of his identity and authorization to work in the United States. Employee agrees that on his first day of employment, he will provide the required identification pursuant to federal regulations. Employee also acknowledges that his continued employment under this Agreement is contingent upon his maintenance of proper and legal authorization to work in the United States.

23.

Entire Agreement.    This written Agreement contains the sole and entire agreement and understanding between the parties, and supersedes any and all prior agreements and understandings. The parties acknowledge and agree that no representations with respect to the subject matter of this Agreement or any representations, promises, agreements or understandings, whether written or oral, relating to the employment of Employee by Employer not contained herein shall be of any force or effect. Further, each of the parties hereto acknowledges that they have relied upon their own judgment in entering into this Agreement.

        THIS AGREEMENT has been executed in duplicate counterparts and each of the duplicate originals shall be deemed to be an original. This is duplicate original number            .

        EXECUTED the day, month, and year first above written.

EMPLOYER:	EMPLOYEE:
HBC Management Company, Inc.
By: /s/  MCHENRY T. TICHENOR, JR. Chief Executive Officer	/s/  JEFFREY T. HINSON Jeffrey T. Hinson

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EXHIBIT "A"

Base Salary:	$300,000 per annum, payable semi-monthly
Profit Sharing:	$150,000 target, based on a percentage of budgeted EBITDA, payable monthly
Annual Bonus:	Employee will be entitled to receive an annual bonus at the discretion of the Compensation Committee of Employer's Board of Directors. The target Annual Bonus for calendar 2001 (payable in 2002) is $150,000.

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EMPLOYMENT, NONCOMPETITION AND ARBITRATION AGREEMENT
EXHIBIT "A"

EX-11

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Exhibit 11

Hispanic Broadcasting Corporation and Subsidiaries

Statement Regarding Computation of Per Share Earnings

(in thousands except per share data)

		Year Ended December 31,
		2001		2000		1999		1998		1997
Earnings:
Income from continuing operations		$	30,969	$	41,531	$	34,176	$	26,884	$	18,772
Preferred stock dividends			—		—		—		—		—
Net income applicable to common stockholders		$	30,969	$	41,531	$	34,176	$	26,884	$	18,772
Earnings Per Share:
	Basic	$	0.28	$	0.38	$	0.34	$	0.27	$	0.23
	Diluted	$	0.28	$	0.38	$	0.33	$	0.27	$	0.22
Number of Shares On Which Net Income Per Share Is Based:
Weighted average common shares before dilutive effect of common stock equivalents			108,872		108,858		101,566		98,042		83,342
Common stock equivalents:
	Stock options		733		1,514		1,347		635		242
	Employee Stock Purchase Plan		12		16		14		18		—
Weighted average common shares			109,617		110,388		102,927		98,695		83,584

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Hispanic Broadcasting Corporation and Subsidiaries Statement Regarding Computation of Per Share Earnings (in thousands except per share data)

EX-12.1

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Exhibit 12.1

Hispanic Broadcasting Corporation and Subsidiaries

Statement Regarding Computation of Ratio of Earnings to Fixed Charges

(in thousands except ratio)

		Year Ended December 31,
		2001		2000		1999		1998		1997
Earnings:
	Income from continuing operations before income taxes	$	50,911	$	68,591	$	57,989	$	44,624	$	31,389
	Fixed charges		3,239		2,481		3,054		3,292		4,863
	Earnings as adjusted (A)	$	54,150	$	71,072	$	61,043	$	47,916	$	36,252
Fixed Charges:
	Interest expense	$	403	$	819	$	1,607	$	2,046	$	3,947
	Interest portion of rental expense(1)		2,836		1,662		1,447		1,246		916
	Total fixed charges (B)	$	3,239	$	2,481	$	3,054	$	3,292	$	4,863
Ratio of earnings to fixed charges (A) divided by (B)			16.7		28.6		20.0		14.6		7.5

(1)

Management of the Company believes one-third of rent expense is representative of the interest component of rent expense.

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Hispanic Broadcasting Corporation and Subsidiaries Statement Regarding Computation of Ratio of Earnings to Fixed Charges (in thousands except ratio)

EX-12.2

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Exhibit 12.2

Hispanic Broadcasting Corporation and Subsidiaries

Statement Regarding Computation of Ratio of Earnings to Combined Fixed Charges
and Preferred Stock Dividends

(in thousands except ratio)

		Year Ended December 31,
		2001		2000		1999		1998		1997
Earnings:
	Income from continuing operations before income taxes	$	50,911	$	68,591	$	57,989	$	44,624	$	31,389
	Fixed charges		3,239		2,481		3,054		3,292		4,863
	Earnings as adjusted (A)	$	54,150	$	71,072	$	61,043	$	47,916	$	36,252
Fixed Charges:
	Interest expense	$	403	$	819	$	1,607	$	2,046	$	3,947
	Interest portion of rental expense(1)		2,836		1,662		1,447		1,246		916
	Total fixed charges		3,239		2,481		3,054		3,292		4,863
	Preferred stock dividends(2)		—		—		—		—		—
	Total fixed charges and preferred stock dividends (B)	$	3,239	$	2,481	$	3,054	$	3,292	$	4,863
Ratio of earnings to combined fixed charges and preferred stock dividends (A) divided by (B)			16.7		28.6		20.0		14.6		7.5

(1)

Management of the Company believes approximately one-third of rent expense is representative of the interest component of rent expense.

(2)

Represents pretax earnings required to cover preferred stock dividends.

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Hispanic Broadcasting Corporation and Subsidiaries Statement Regarding Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends (in thousands except ratio)

EX-21

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Exhibit 21

Subsidiaries of Registrant

HBC Broadcasting Texas, L.P.
HBC Florida, LLC
HBC Fresno, Inc.
HBC GP Texas, Inc.
HBC Houston License Corporation
HBC Illinois, Inc.
HBC Investments, Inc.
HBC License Corporation
HBC Los Angeles, Inc.
HBC Management Company, Inc.
HBC Network, Inc.
HBC New York, Inc.
HBC Phoenix, Inc.
HBC San Diego, Inc.
HBC Tower Company, Inc.
HBCi, LLC
HBC-Las Vegas, Inc.
Hispanic Tijuana S. de R.L. de C.V.
KCYT-FM License Corp.
KECS-FM License Corp.
KESS-AM License Corp.
KESS-TV License Corp.
KHCK-FM License Corp.
KICI-AM License Corp.
KICI-FM License Corp.
KLSQ-AM License Corp.
KLVE-FM License Corp.
KMRT-AM License Corp.
KTNQ-AM License Corp.
La Oferta, Inc.
License Corp. No 1
License Corp. No. 2
Mi Casa Publications, Inc.
Momentum Research, Inc.
Spanish Coast to Coast, Ltd.
T C Television, Inc.
Tichenor License Corporation
TMS Assets California, Inc.
TMS License California, Inc.
WADO Radio, Inc.
WADO-AM License Corp.
WLXX-AM License Corp.
WPAT-AM License Corp.
WQBA-AM License Corp.
WQBA-FM License Corp.

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Subsidiaries of Registrant

EX-23

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Exhibit 23

Independent Auditors' Consent

The Board of Directors
Hispanic Broadcasting Corporation:

        We consent to incorporation by reference in the registration statements on Form S-3 (No. 333-42171) and Form S-8 (Nos. 333-43483 and 333-43495) of Hispanic Broadcasting Corporation of our report dated February 8, 2002, except for Note 2 which is as of April 1, 2002, relating to the consolidated balance sheets of Hispanic Broadcasting Corporation and subsidiaries as of December 31, 2001 and 2000, and the related consolidated statements of income and comprehensive income, stockholders' equity, and cash flows for each of the years in the three-year period ended December 31, 2001, and the related financial statement schedule, which report appears in the December 31, 2001 annual report on Form 10-K of Hispanic Broadcasting Corporation.

/s/ KPMG

Dallas, Texas
April 1, 2002

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Independent Auditors' Consent