0001104659-03-010442.txt : 20030515 0001104659-03-010442.hdr.sgml : 20030515 20030515174011 ACCESSION NUMBER: 0001104659-03-010442 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 20030331 FILED AS OF DATE: 20030515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HISPANIC BROADCASTING CORP CENTRAL INDEX KEY: 0000922503 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 990113417 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-15859 FILM NUMBER: 03706447 BUSINESS ADDRESS: STREET 1: 3102 OAK LAWN AVENUE STREET 2: STE 215 CITY: DALLAS STATE: TX ZIP: 75219 BUSINESS PHONE: 2145257700 MAIL ADDRESS: STREET 1: 3102 OAK LAWN AVENUE STREET 2: SUITE 215 CITY: DALLAS STATE: TX ZIP: 75219 FORMER COMPANY: FORMER CONFORMED NAME: HEFTEL BROADCASTING CORP DATE OF NAME CHANGE: 19940502 10-Q 1 j0989_10q.htm 10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)
ý Quarterly report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2003

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	99-0113417
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

3102 Oak Lawn Avenue, Suite 215 Dallas, Texas	75219
(Address of principal executive offices)	(Zip Code)

(214) 525-7700
(Registrant’s telephone number, including area code)

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 ý No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes ý No o

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class		Outstanding at April 30, 2003

Class A Common Stock, $.001 Par Value		80,564,617
Class B Non-Voting Common Stock, $.001 Par Value		28,312,940

HISPANIC BROADCASTING CORPORATION

MARCH 31, 2003

INDEX

PART I.		FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)

	Condensed Consolidated Balance Sheets as of March 31, 2003 and December 31, 2002

	Condensed Consolidated Statements of Income for the Three Months Ended March 31, 2003 and 2002

	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2003 and 2002

	Notes to Condensed Consolidated Financial Statements

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 3.	Quantitative and Qualitative Disclosures about Market Risk

Item 4.	Controls and Procedures

PART II.		OTHER INFORMATION

Item 1.	Legal Proceedings

Item 6.	Exhibits and Reports on Form 8-K

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

HISPANIC BROADCASTING CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share information)

	March 31, 2003			December 31, 2002
	(Unaudited)

ASSETS
Current assets:
Cash and cash equivalents	$	33,900		$	40,217
Accounts receivable, net	44,104			51,935
Prepaid expenses and other current assets	3,307			1,131
Total current assets	81,311			93,283

Property and equipment, at cost, net	54,655			55,837

Cost in excess of fair value of net assets acquired, net of accumulated amortization of $12,380 in 2003 and 2002	85,245			85,245

Intangible assets, net	1,080,750			1,080,845
Restricted cash	3,800			—
Deferred charges and other assets	10,860			10,578
Total assets	$	1,316,621		$	1,325,788

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	3,846		$	4,780
Accrued expenses	15,776			15,391
Income taxes payable	770			2,298
Current portion of long-term obligations	7			7
Total current liabilities	20,399			22,476

Long-term obligations, less current portion	1,413			16,429

Deferred income taxes	147,323			143,323

Minority interest	1,335			1,341

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 2003 and 2002; issued 81,240,083 shares and outstanding 80,554,583 shares in 2003 and issued 81,201,689 shares and outstanding 80,516,189 shares in 2002	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	1,048,883			1,048,097
Retained earnings	107,267			104,121
Treasury stock, at cost, 685,500 shares	(10,108		)	(10,108		)
Total stockholders’ equity	1,146,151			1,142,219
Total liabilities and stockholders’ equity	$	1,316,621		$	1,325,788

See accompanying notes to unaudited condensed consolidated financial statements.

HISPANIC BROADCASTING CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(in thousands, except per share data)

	Three Months Ended March 31,
	2003			2002

Net revenues	$	56,482		$	51,951
Operating expenses (exclusive of depreciationand amortization)	18,206			15,851
Wages, salaries and benefits	25,026			20,367
Provision for bad debts	798			599
Depreciation and amortization	3,223			2,842
Corporate expenses	3,425			968
Operating income	5,804			11,324
Interest income (expense), net	(83		)	67
Income before income tax	5,721			11,391
Income tax	2,575			4,465
Net income	$	3,146		$	6,926

Net income per common share - basic and diluted	$	0.03		$	0.06

Weighted average common shares outstanding:
Basic	108,859			108,589
Diluted	109,309			109,718

See accompanying notes to unaudited condensed consolidated financial statements.

HISPANIC BROADCASTING CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands)

	Three Months Ended March 31,
	2003			2002

Cash flows from operating activities:
Net income	$	3,146		$	6,926
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for bad debts	798			599
Depreciation and amortization	3,223			2,842
Minority interest	(6		)	—
Deferred income taxes	4,000			3,000
Changes in operating assets and liabilities	3,210			6,077
Other, net	(31		)	120
Net cash provided by operating activities	14,340			19,564

Cash flows from investing activities:
Acquisitions of radio stations	—			(20,774		)
Cash deposited in restricted cash account related to pending acquisitions and signal upgrades	(3,800		)	—
Property and equipment acquisitions	(1,904		)	(2,277		)
Dispositions of property and equipment	85			181
Additions to intangible assets	(69)			(422		)
Increase in deferred charges and other assets	(718)			(740		)
Net cash used in investing activities	(6,406		)	(24,032		)

Cash flows from financing activities:
Payments on long-term obligations	(15,004		)	—
Proceeds from stock issuances	753			2,098
Net cash provided by (used in) financing activities	(14,251		)	2,098

Net decrease in cash and cash equivalents	(6,317		)	(2,370		)
Cash and cash equivalents at beginning of period	40,217			59,587
Cash and cash equivalents at end of period	$	33,900		$	57,217

See accompanying notes to unaudited condensed consolidated financial statements.

HISPANIC BROADCASTING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

MARCH 31, 2003

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Hispanic Broadcasting Corporation and subsidiaries (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the disclosures required by accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended March 31, 2003 is not necessarily indicative of the results that may be expected for the year ending December 31, 2003. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002.

2. Pending Merger

On June 11, 2002, the Company agreed to merge with Univision Communications Inc. (“Univision”). Univision will acquire the Company in an all-stock transaction. In the merger, the stockholders of the Company will exchange each share of their capital stock in the Company for the right to receive 0.85 share of the Class A Common Stock of Univision. The boards of directors of both companies approved the merger, the stockholders of each company voted in favor of the merger on February 28, 2003, and the Department of Justice (the “DOJ”), Univision and the Company have reached an agreement regarding the merger. The merger is subject to approval by the Federal Communications Commission (“FCC”) and customary closing conditions. The Company expects that the merger will close in the second quarter of this year.

Included in corporate expenses are merger expenses of $0.8 million for the three months ended March 31, 2003. The Company estimates that merger costs incurred in 2003 will approximate $14.0 million.

3. Acquisitions and Radio Signal Upgrades

2002 Acquisitions and Radio Signal Upgrades

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

The fair value of the assets acquired in the Las Vegas Acquisition as of March 22, 2002 is as follows (in thousands):

Broadcast and other equipment	$	26
Broadcast licenses	15,952
Other intangible assets	57
	$	16,035

On October 10, 2001, the Company entered into an asset purchase agreement to acquire for $5.0 million the assets of KZOL(FM), serving the Fresno market (the “Fresno Acquisition”). On March 29, 2002, the Company closed on the Fresno Acquisition. The Company used its available cash to fund the acquisition.

The fair value of the assets acquired in the Fresno Acquisition as of March 29, 2002 is as follows (in thousands):

Broadcast and other equipment	$	88
Furniture and fixtures	2
Broadcast licenses	4,898
Other intangible assets	34
	$	5,022

On December 17, 2001, the Company entered into an asset purchase agreement to acquire for $58.0 million the assets of KEMR(FM), serving the San Jose and San Francisco markets (the “San Jose Acquisition”). On April 1, 2002, the Company closed on the San Jose Acquisition. The Company used its available cash to fund the acquisition along with $15.0 million borrowed from the $157.5 million revolving credit facility (the “Credit Facility”) on April 1, 2002.

The fair value of the assets acquired in the San Jose Acquisition as of April 1, 2002 is as follows (in thousands):

Land and improvements	$	99
Buildings and improvements	57
Broadcast and other equipment	246
Furniture and fixtures	13
Broadcast licenses	57,412
Other intangible assets	464
	$	58,291

On August 26, 2002, the Company entered into an asset purchase agreement to acquire for $22.5 million the assets of KJFA(FM), KIOT(FM), KVVF(FM), KKSS(FM) and KAJZ(FM), serving the Albuquerque market (the “Albuquerque Acquisition”). On November 1, 2002, the Company closed on the Albuquerque Acquisition. The Company used its available cash to fund the acquisition.

The fair value of the assets acquired in the Albuquerque Acquisition as of November 1, 2002 is as follows (in thousands):

Land and improvements	$	132
Buildings and improvements	412
Broadcast and other equipment	1,074
Furniture and fixtures	94
Broadcast licenses	20,431
Other intangible assets	244
	$	22,387

The intangible assets acquired in the Las Vegas Acquisition, the Fresno Acquisition, the San Jose Acquisition and the Albuquerque Acquisition are not subject to amortization.

Radio stations KPTY(FM) in Houston and KESS(FM) and KDXX(FM) in Dallas have been involved in a variety of proceedings before the FCC to improve each of the stations’ signal coverage. The radio signal upgrade projects for KPTY(FM) in Houston and KESS(FM) in Dallas were substantially completed in February 2002 and the stations began broadcasting according to their new authorized signal authority. The upgrade costs of $35.0 million incurred by the Company and included in deferred charges and other assets were reclassified to intangible assets during 2002. The radio signal upgrade project for KDXX(FM) in Dallas was substantially completed in July 2002 and the station began broadcasting according to its new authorized signal authority. The upgrade costs of $2.6 million incurred by the Company and included in deferred charges and other assets were reclassified to intangible assets during 2002 and are not subject to amortization.

Pending Transactions

On January 2, 2003, the Company entered into an agreement to acquire for approximately $32.9 million the assets of WVIV(FM), serving the Chicago market (the “WVIV(FM) Acquisition”). The WVIV(FM) Acquisition is subject to regulatory approvals and customary closing conditions. The Company expects to close on the WVIV(FM) Acquisition during the second or third quarter of 2003. The Company plans to use its available cash to fund the acquisition along with borrowings from the Credit Facility.

The Company began providing Spanish-language programming to WVIV(FM) under a time brokerage agreement on January 13, 2003. A monthly time brokerage fee of $75,000 was paid for the period January 13, 2003 to May 1, 2003. On May 2, 2003, the time brokerage agreement was amended and restated. The Company paid $29.9 million in May 2003 for the right to program the radio station until the earlier of the closing of the WVIV(FM) Acquisition or May 1, 2008. The Company has the right to extend the initial term for three consecutive five year terms. The $29.9 million will be credited against the payment of the $32.9 million purchase price. The Company shall also pay $3.0 million on the earlier of the closing date or November 2, 2004.

On February 13, 2003, the Company entered into an agreement to acquire for $32.0 million the stock of a company which owns and operates WKAQ(FM), WKAQ(AM), WUKQ(FM) and WUKQ(AM), serving the Puerto Rico market (the “Puerto Rico Acquisition”). The Puerto Rico Acquisition is subject to regulatory approvals and customary closing conditions. The Company expects to close on the Puerto Rico Acquisition during the third quarter of 2003 and plans to borrow from the Credit Facility to fund the acquisition.

On March 3, 2003, the Company entered into an agreement to acquire for $24.0 million the assets of KNGT(FM), serving the Sacramento market and a tower located near Dallas, Texas (the “Sacramento Acquisition”). The Sacramento Acquisition is subject to regulatory approvals and customary closing conditions. The Company expects to close on the Sacramento Acquisition during the third quarter of 2003. The Company plans to borrow from the Credit Facility to fund the acquisition.

On March 17, 2003, the Company entered into an agreement to acquire for $16.0 million the assets of KINV(FM) (formerly KTND(FM)), serving the Austin market (the “Austin Acquisition”). In addition, the Company has agreed to assume the KINV(FM) seller’s obligation to reimburse an Austin area radio station for up to $1.0 million of expenses incurred by such station to modify its broadcast facilities so as to permit KINV(FM) to upgrade its broadcast facilities pursuant to FCC authorization. The Austin Acquisition is subject to regulatory approvals and customary closing conditions. The Company expects to close on the Austin Acquisition during the third quarter of 2003. The Company plans to borrow from the Credit Facility to fund the acquisition.

The Company began providing Spanish-language programming to KTND(FM) under a time brokerage agreement on April 15, 2003. The monthly time brokerage fee is $55,000. The time brokerage agreement continues until the earlier of the twelve month anniversary of the time brokerage agreement or the closing of the asset purchase contemplated by the asset purchase agreement.

On May 1, 2003, the Company entered into an agreement to acquire for $32.0 million the assets of WJTW(FM), serving the Chicago market (the “WJTW(FM) Acquisition”). The WJTW(FM) Acquisition is subject to regulatory approvals and customary closing conditions. The Company expects to close on the WJTW(FM) Acquisition during the second or third quarter of 2003. The Company plans to borrow from the Credit Facility to fund the acquisition.

Pro forma Information

Unaudited pro forma results of operations for the three months ended March 31, 2003 and 2002, calculated as though the Las Vegas Acquisition, the Fresno Acquisition, the San Jose Acquisition, the Albuquerque Acquisition, the WVIV(FM) Acquisition, the Puerto Rico Acquisition, the Sacramento Acquisition and the Austin Acquisition had occurred at the beginning of each period, is as follows (in thousands, except per share data):

	Pro forma Three Months Ended March 31,
	2003		2002

Net revenues	$	59,891	$	56,618
Operating income	$	5,828	$	11,417
Net income	$	2,482	$	7,120
Net income per common share:
Basic	$	0.02	$	0.07
Diluted	$	0.02	$	0.06

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.

4. Intangible Assets

Intangible assets as of March 31, 2003 are summarized as follows (in thousands):

	Gross Carrying Amount		Accumulated Amortization		Net Amount

Intangible assets subject to amortization	$	13,005	$	11,254	$	1,751
Intangible assets not subject to amortization	1,264,088		99,844		1,164,244
	$	1,277,093	$	111,098	$	1,165,995

Amortization expense for the three months ended March 31, 2003 and 2002 is $0.2 and $0.1 million, respectively. Estimated amortization expense of intangible assets acquired as of March 31, 2003 with finite useful lives are summarized as follows (in thousands):

Year	Amount

2003	$	538
2004	487
2005	264
2006	105
2007	105

5. Long-Term Obligations

The Company’s ability to borrow under the Credit Facility is subject to compliance with certain financial ratios and other conditions set forth in the Credit Facility. The Credit Facility is secured by the stock of the Company’s subsidiaries. Borrowings under the Credit Facility bear interest at a rate based on the LIBOR rate plus an applicable margin as determined by the Company’s leverage ratio. The Company borrowed $15.0 million from the Credit Facility on April 1, 2002. On February 28, 2003, the Company paid the outstanding principal balance of $15.0 million and accrued interest. On May 2, 2003, the Company borrowed $27.0 million from the Credit Facility. As of May 2, 2003, the Company has $130.5 million of credit available. The Credit Facility commitment began reducing on September 30, 1999 and continues to reduce quarterly through December 31, 2004.

6. Contingencies

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.

On June 12, 2002, Spanish Broadcasting System, Inc. (“SBS”) filed Spanish Broadcasting System, Inc. v. Clear Channel Communications, Inc. and Hispanic Broadcasting Corporation in the United States District Court for the Southern District of Florida. SBS alleged a variety of claims against the defendants including claims for federal and state antitrust violations under the Sherman Act, the Florida Antitrust Act, and California’s Cartwright Act. SBS’s complaint also included numerous other state law causes of action including, among others, tortious interference, defamation, and violation of the California Unfair Competition Act. The plaintiff, and both defendants, own and operate radio stations throughout the United States, and SBS’s claims arose out of steps the defendants allegedly took to undermine SBS’s radio station business. On July 31, 2002, plaintiff amended its complaint. The amended complaint sought actual damages in excess of $500 million before any trebling under federal or state statute along with attorney fees and other unspecified damages. On January 31, 2003, the United States District Court entered a final order dismissing the case with prejudice. On February 14, 2003, SBS filed a motion for reconsideration of the order which dismissed the case. SBS has announced that, if its motion for reconsideration is not granted, then it will appeal the dismissal order. The Company is vigorously contesting this matter.

7. Stockholders’ Equity

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

	Three Months Ended March 31,
	2003		2002

Numerator:
Net income	$	3,146	$	6,926

Denominator:
Denominator for basic earnings per share	108,859		108,589
Effect of dilutive securities:
Stock options	450		1,119
Employee Stock Purchase Plan	—		10
Denominator for diluted earnings per share	109,309		109,718

Stock options which were excluded from the computation of diluted earnings per share due to their antidilutive effect amounted to 2.9 and 1.1 million shares for the three months ended March 31, 2003 and 2002, respectively.

8. 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 the three months ended March 31, 2003, employees purchased 38,394 common shares at an average price of $19.62.

The Company granted 110,500 stock options for the three months ended March 31, 2003, to various employees of the Company under its Long-Term Incentive Plan. The exercise prices of options outstanding at March 31, 2003 ranged from $8.22 to $50.57 per share, the market prices at dates of grant.

For purposes of pro forma disclosures, the estimated fair value of the options is expensed over the options’ vesting period. Pro forma net income and earnings per share disclosures as if the Company recorded compensation expense based on the fair value for stock-based awards have been presented in accordance with the provisions of SFAS No. 148, Accounting for Stock-Based Compensation — Transition and Disclosure, and are as follows (in thousands, except per share information):

	Three Months Ended March 31,
	2003			2002

Net income as reported	$	3,146		$	6,926
Stock-based employee compensation expense, net of related tax effects, included in net income as reported	15			13
Stock-based employee compensation expense determined under fair value-based method, net of related tax effects	(2,910		)	(2,307		)
Pro forma net income	$	251		$	4,632

Net income per common share:
As reported – basic and diluted	$	0.03		$	0.06
Pro forma – basic and diluted	$	—		$	0.04

The weighted average fair value at date of grant for options granted in the three months ended March 31, 2003 was $13.10 per share. 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:

Risk free interest rate	3.45	%
Dividend yield	0.00	%
Volatility factor	58.23	%
Weighted average expected life	6 years

The following is a summary of stock options outstanding and exercisable for the three months ended March 31, 2003 (in thousands, except per share data):

	Number Of Shares	Weighted Average Exercise Price Per Share
Stock Options Outstanding:
Options outstanding at December 31, 2002	5,635	$	22.47
Granted	111	22.88
Forfeited	56	24.15
Exercised	—	—
Options outstanding at March 31, 2003	5,690	22.46

Exercisable Stock Options:
Options exercisable at December 31, 2002	2,514	20.04
Vested	371	20.91
Exercised	—	—
Options exercisable at March 31, 2003	2,885	20.48

The following is a summary of stock options outstanding and exercisable at March 31, 2003:

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	672	$	11.69	4.2
12.34		-	18.13		620	17.63		5.6
18.75		-	28.02		3,362	22.07		7.8
28.75		-	41.84		1,030	33.51		7.1
50.57					6	50.57		6.8
					5,690

Exercisable Stock Options:

$	8.22	-	$	11.75	672	$	11.69	4.2
12.34		-		18.13	468	17.56		5.4
18.75		-		28.02	1,285	21.45		7.6
28.75		-		41.84	460	33.53		7.1
					2,885

ITEM 2. 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 three months ended March 31, 2003 and 2002 and consolidated financial condition as of March 31, 2003 should be read in conjunction with the unaudited condensed consolidated financial statements of the Company and its subsidiaries and the related notes included elsewhere in this report.

General

The Company’s primary source of revenues is the sale of broadcasting time for advertising. For the three months ended March 31, 2003, we generated approximately 65.5% of our gross revenues from local advertising, which is sold primarily by each individual local radio station’s sales staff, and approximately 24.2% from national spot advertising, which is sold by independent advertising sales representatives. The balance of our revenues came from network sales, political sales, miscellaneous revenues such as rental income from tower sites, and from our Internet operation.

Our most significant operating expenses are sales expenses, 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 under-performing radio stations with good signal coverage and converted the formats to a variety of Hispanic-targeted 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 typically generates operating losses in the first 12 to 18 months 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 period can be affected by the timing, number, acquisition cost and operating expenses of its start-up stations in that period.

EBITDA consists of operating income or loss excluding depreciation and amortization. The Company has included EBITDA data in this report because EBITDA is commonly used as a measure of performance for broadcast companies. 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. Below is a reconciliation of the Company’s operating income to EBITDA (in thousands):

	Three Months Ended March 31,
	2003		2002

Operating income	$	5,804	$	11,324
Depreciation and amortization	3,223		2,842
EBITDA	$	9,027	$	14,166

On June 11, 2002, the Company agreed to merge with Univision. Univision will acquire the Company in an all-stock transaction. In the merger, the stockholders of the Company will exchange each share of their capital stock in the Company for the right to receive 0.85 share of the Class A Common Stock of Univision. The boards of directors of both companies approved the merger, the stockholders of each company voted in favor of the merger on February 28, 2003, and the DOJ, Univision and the Company have reached an agreement regarding the merger. The merger is subject to approval by the FCC and customary closing conditions. The Company expects that the merger will close in the second quarter of this year.

Results of Operations for the Three Months Ended March 31, 2003 Compared to the Three Months Ended March 31, 2002

The results of operations for the three months ended March 31, 2003 are not comparable to the results of operations for the same period in 2002 primarily due to the acquisitions of KQMR(FM) in Las Vegas on March 22, 2002, KZOL(FM) in Fresno on March 29, 2002, KEMR(FM) in San Jose on April 1, 2002, KJFA(FM), KIOT(FM), KVVF(FM), KKSS(FM) and KAJZ(FM) in Albuquerque on November 1, 2002, the radio signal upgrades in 2002 of KPTY(FM) in Houston and KESS(FM) and KDXX(FM) in Dallas and the time brokerage of WVIV(FM) in Chicago on January 13, 2003.

Net revenues increased by $4.4 million or 8.5% to $56.4 million for the three months ended March 31, 2003 from $52.0 million for the same period in 2002. Net revenues increased for the three months ended March 31, 2003 compared to the same period in 2002 primarily because of (a) revenues from start-up stations acquired or reformatted in 2001 and 2002, which represent an increase of $2.0 million, and (b) revenue growth in New York, Miami, San Diego, Dallas, Chicago and Houston from stations that were not considered start-ups, which represent an increase of $2.1 million. The revenue growth was partially offset by a revenue decline on the San Francisco station that was not considered a start-up, which represents a decrease of $0.6 million.

Operating expenses increased by $2.4 million or 15.2% to $18.2 million for the three months ended March 31, 2003 from $15.8 million for the same period in 2002. Operating expenses increased for the three months ended March 31, 2003 because of (a) $1.4 million of expense for start-up stations acquired or reformatted in 2001 or 2002, and (b) $0.2 million of expense for a time brokerage agreement in Chicago related to WVIV(FM), and (c) $0.6 million mostly from the collection of an account receivable in 2002, which was previously written off. As a percentage of net revenues, operating expenses increased to 32.3% from 30.4% for the three months ended March 31, 2003 and 2002, respectively.

Wages, salaries and benefits increased by $4.6 million or 22.5% to $25.0 million for the three months ended March 31, 2003 from $20.4 million for the same period in 2002. Wages, salaries and benefits for the three months ended March 31, 2003 increased as compared to the same period in 2002 because of (a) start-up stations, which represent an increase of $1.5 million, (b) increased programming and talent costs of $1.1 million in Los Angeles and New York, (c) costs associated with increased ratings in Dallas, which represent an increase of $0.3 million, (d) group insurance in various markets, which represent an increase of $0.5 million, (e) programming costs related to radio stations in San Antonio, which represent an increase of $0.2 million, and (f) costs associated with the corporate office and HBC Sales Integration, Inc. (“HBCSi”), which represent an increase of $0.5 million. The Company has adopted the marketing name HBCSi to brand all aspects of its national and network sales efforts, including HBC Radio Network sales, new business development, and, in cooperation with Katz Hispanic Media, national spot advertising sales. As a percentage of net revenues, wages, salaries and benefits increased to 44.3% from 39.2% for the three months ended March 31, 2003 and 2002, respectively.

The provision for bad debts increased $0.2 million or 33.3% to $0.8 million for the three months ended March 31, 2003 from $0.6 million for the same period in 2002. The provision for bad debts increased due to the uncollectability of certain notes receivable, which represented $0.2 million of the increase. As a percentage of net revenues, the provision for bad debts increased to 1.4% from 1.2% for the three months ended March 31, 2003 and 2002, respectively.

Corporate expenses increased $2.4 million or 240.0% to $3.4 million for the three months ended March 31, 2003 from $1.0 million for the same period in 2002. Included in corporate expenses are merger expenses of $0.8 million for the three months ended March 31, 2003, related to the Company’s pending merger with Univision and an increase of $1.2 million in legal and professional fees unrelated to the pending merger. As a percentage of net revenues, corporate expenses increased to 6.0% from 1.9% for the three months ended March 31, 2003 and 2002, respectively.

EBITDA for the three months ended March 31, 2003 decreased $5.2 million or 36.6% to 9.0 million compared to $14.2 million for the same period in 2002. As a percentage of net revenues, EBITDA decreased to 16.0% from 27.3% for the three months ended March 31, 2003 and 2002, respectively.

Depreciation and amortization for the three months ended March 31, 2003 increased 10.3% to $3.2 million, compared to $2.9 million for the same period in 2002. The increase is due to additional depreciable assets from station acquisitions in 2002.

Interest income (expense), net decreased to $0.1 million of expense from $0.1 million of income for the three months ended March 31, 2003 and 2002, respectively. The decrease for the three months ended March 31, 2003 compared to the same period in 2002 was due to cash and cash equivalents and interest rates being higher in 2002 than in 2003.

Federal and state income taxes are being provided at an effective rate of 45.0% and 39.2% for the three months ended March 31, 2003 and 2002, respectively. The increase in the effective rate is due to merger expenses incurred and projected in 2003 which are not deductible for tax purposes.

For the three months ended March 31, 2003, the Company’s net income totaled $3.1 million ($0.03 per common share) compared to $6.9 million ($0.06 per common share) in the same period in 2002.

Our business was affected by general economic conditions. The revenue increase of the Company was impacted by its Los Angeles operations, which experienced a net revenue decrease of 0.5% for the three months ended March 31, 2003 compared to the same period in 2002. The Company’s Los Angeles operations accounted for 22.4% of total consolidated net revenues for the three months ended March 31, 2003. The relative financial impact of Los Angeles on the Company has been lowered by the Company’s success in adding to its station line-up and geographically diversifying its revenue streams over the last few years. Operating expenses will increase in 2003 partially due to the time brokerage fees incurred related to radio stations WVIV(FM) in Chicago and KTDN(FM) in Austin. Wages, salaries and benefits will increase in 2003 partially due to changes in on-air talent in Los Angeles, San Francisco, Phoenix, Houston and Dallas.

These changes in our on-air talent line up have strengthened our competitive position and improved our audience ratings in these key markets. We anticipate that improved ratings resulting from these moves will result in higher revenues growth in the second half of 2003. Corporate expenses increased for the three months ended March 31, 2003 compared to the same period in 2002 primarily as a result of merger costs and higher legal and professional fees unrelated to the merger. The Company estimates that merger costs incurred in 2003 will approximate $14.0 million. In connection with the radio station acquisitions, we expect to borrow funds from our Credit Facility. Accordingly, interest expense will increase in 2003 due to such borrowings.

Liquidity and Capital Resources

Net cash provided by operating activities for the three months ended March 31, 2003 was $14.3 million as compared to $19.5 million for the same period in 2002. The $5.2 million decrease from 2002 to 2003 is due to merger expenses of $0.8 million being recognized in 2003 and changes in operating assets and liabilities. Net cash used in investing activities was $6.4 and $24.0 million for the three months ended March 31, 2003 and 2002, respectively. The $17.6 million decrease from 2002 to 2003 is due to the Las Vegas and Fresno acquisitions in 2002 and no acquisitions in 2003. Net cash used in financing activities was $14.2 million and net cash provided by financing activities was $2.1 million for the three months ended March 31, 2003 and 2002, respectively. The $16.3 million decrease from 2002 to 2003 is due to a $15.0 million payment on the Credit Facility in 2003.

Generally, the Company’s capital expenditures are made with cash provided by operations. Capital expenditures totaled $1.9 and $2.3 million for the three months ended March 31, 2003 and 2002, respectively. Approximately $0.9 million of the capital expenditures incurred during the three months ended March 31, 2003 related to a radio signal upgrade project in Dallas, transmitter projects in McAllen, Phoenix and Chicago, and the build-out of studio and office space in Albuquerque, Corporate, Las Vegas, Houston and Miami compared to $1.0 million incurred in the same period of 2002 related to radio signal upgrade projects affecting five different radio stations in Dallas and Houston, transmitter projects in Phoenix, San Francisco and San Antonio, and the build-out of studio and office space in Las Vegas, Phoenix, San Francisco and Fresno.

The short-term liquidity needs of the Company are $134.1 million which is the sum of current liabilities, excluding the current portion of long-term obligations, and the current portion of long-term obligations as shown in the table below. The long-term liquidity needs of the Company are shown in the table below.

Available cash on hand plus cash flow provided by funds available under lines of credit 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 on hand 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 proceeds from borrowings under the Credit Facility and available cash on hand.

The Company expects to terminate the Credit Facility after the merger with Univision has been completed. Upon termination of the Credit Facility, Univision will pay the outstanding borrowings, if any, and the Company will fund future capital needs through Univision.

Material Contractual Obligations

The scheduled maturities of long-term obligations, future minimum rental payments under noncancelable operating leases and radio station acquisition commitments of the Company as of March 31, 2003 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	$	1,420	$	7	$	16	$	19	$	1,378
Operating leases	78,027		8,742		15,957		12,932		40,396
Radio station acquisitions	137,875		137,875		—		—		—
Total contractual cash obligations	$	217,322	$	146,624	$	15,973	$	12,951	$	41,774

Long-Term Obligations

For the three months ended March 31, 2003, no additional amounts were borrowed on the Credit Facility and the outstanding principal balance of $15.0 million was paid. As of March 31, 2003, the Company had $157.5 million of credit available under the Credit Facility. 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 the Credit Facility is subject to compliance with certain financial ratios and other conditions set forth in the Credit Facility.

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, 2002. Based on our assumptions, all long-lived assets were determined to be recoverable.

Revenue Recognition

Our revenue is derived primarily from the sale of advertising time to local and national advertisers. We recognize revenue 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.

Impairment of Indefinite-Lived Intangible Assets or Cost In Excess of Fair Value of Net Assets Acquired

The Company records impairment losses when events and circumstances indicate that indefinite-lived intangible assets or cost in excess of fair value of net assets acquired might be impaired. The reporting unit is defined as an individual radio market. To the extent a reporting unit’s carrying amount exceeds its fair value, the reporting unit’s indefinite-lived intangible assets or cost in excess of fair value of net assets acquired may be impaired and we perform the second step of the impairment test. In the second step, we compare the implied fair value of the reporting unit’s indefinite-lived intangible assets or 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 are measured as of the end of the year. When the indefinite-lived intangible assets or cost in excess of fair value of net assets acquired is determined to be impaired, the basis of the assets is reduced to reflect the implied fair value. We performed an impairment assessment of the indefinite-lived intangible assets or cost in excess of fair value of net assets acquired as of January 1, 2002 and December 31, 2002 and determined there was no impairment.

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.

Inflation

Inflation has affected our 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.

Forward Looking Statements

Certain statements contained in this report are not based on historical facts, but are forward looking statements that are based on numerous assumptions made as of the date of this report. When used in the preceding and following discussions, the words “believes,” “intends,” “expects,” “anticipates” and similar expressions are intended to identify forward looking statements. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed in any of the forward looking statements. Such risks and uncertainties include, but are not limited to, industry-wide market factors and regulatory developments affecting the Company’s operations, acquisitions of broadcast properties described elsewhere herein, the financial performance of start-up stations, and efforts by management to integrate its operating philosophies and practices at the station level. This report should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2002. The Company disclaims any obligation to update the forward looking statements in this report.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is subject to interest rate risk on the interest earned on cash and cash equivalents and the interest incurred on amounts borrowed from the Credit Facility. A change of 10% in the interest rate either earned on short-term investments or charged on amounts borrowed from the Credit Facility would not have had a significant impact on the Company’s historical financial statements.

ITEM 4. CONTROLS AND PROCEDURES

Our principal executive and financial officers have concluded, based on their evaluation as of a date within 90 days before the filing of this Form 10-Q, that our disclosure controls and procedures (as defined in Rule 13a-14 of the Securities Exchange Act of 1934) are effective to ensure that information we are required to disclose in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and include controls and procedures designed to ensure that information we are required to disclose in such reports is accumulated and communicated to management, including our principal executive and financial officers, as appropriate to allow timely decisions regarding required disclosure.

Subsequent to our evaluation, there were no significant changes in internal controls or other factors that could significantly affect these internal controls.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is involved in various claims and lawsuits, which are generally incidental to its business. The Company is vigorously contesting all such matters and believes that their ultimate resolution will not have a material adverse effect on its consolidated financial position or results of operations.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

Exhibit No.		Description

2.1		Agreement and Plan of Reorganization, dated June 11, 2002, by and among Univision Communications Inc., Univision Acquisition Corporation and Hispanic Broadcasting Corporation (incorporated by reference to Univision Communications Inc. Current Report on Form 8-K, dated June 12, 2002, File No. 001-12223).

2.2		Univision Stockholder Support Agreement, dated June 11, 2002, by and among Univision Communications Inc., Hispanic Broadcasting Corporation, and A. Jerrold Perenchio (incorporated by reference to Univision Communications Inc. Current Report on Form 8-K, dated June 12, 2002, File No. 001-12223).

2.3		HBC Stockholder Support Agreement, dated June 11, 2002, by and among Univision Communications Inc., Univision Acquisition Corporation, and the stockholders listed on Exhibit A thereto (incorporated by reference to Univision Communications Inc. Current Report on Form 8-K, dated June 12, 2002, File No. 001-12223).

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 on 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 12, 1998).
3.3		Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of the Company dated June 3, 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 Exhibit 3.2 to the Company’s Registration Statement on Amendment No. 3 to Form S-1 (Registration No. 33-78370) filed on July 8, 1994).

4.1		Specimen certificate for the Class A Common Stock (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Amendment No. 3 to Form S-1 (Registration No. 33-78370) filed on July 8, 1994).

4.2		Specimen certificate for the Class B Common Stock (incorporated by reference to Exhibit 4.2 to the Company’s Form 10-Q filed on August 13, 2002).

10.1		Credit Agreement Amendment No. 2 among the Company and its subsidiaries, the Chase Manhattan Bank, as administrative agent, and certain other lenders, dated October 13, 2000 without Exhibits (Schedules omitted).

10.2		Credit Agreement Amendment No. 3 among the Company and its subsidiaries, the Chase Manhattan Bank, as administrative agent, and certain other lenders, dated May 2, 2003, without Exhibits (Schedules omitted).

10.3		Second Amendment to Asset Purchase Agreement, dated May 2, 2003, by and among Big City Radio, Inc., Big City Radio-Chi, LLC, HBC Illinois, Inc. and HBC License Corporation.

10.4		Asset Purchase Agreement, dated May 1, 2003, by and among HBC Illinois, Inc., HBC License Corporation, NextMedia Operating, Inc. and NM Licensing LLC.

10.5		First Amendment to Employment, Noncompetition and Arbitration Agreement, dated April 2, 2003, by and between Jeffrey T. Hinson and HBC Management Company, Inc.

10.6		Time Brokerage Agreement, dated January 10, 2003, by and between HBC Illinois, Inc. and Big City Radio-Chi, LLC.

10.7		Amended and Restated Time Brokerage Agreement, dated May 2, 2003, by and between HBC Illinois, Inc. and Big City Radio-Chi, LLC.

10.8		Time Brokerage Agreement, dated March 17, 2003, by and between Simmons Lone Star Media, Ltd. and HBC Broadcasting Texas, L.P.

(b) Reports on Form 8-K

		None.

Signature

Pursuant to the requirements 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.

	Hispanic Broadcasting Corporation
	(Registrant)


	/s/ Jeffrey T. Hinson
	Jeffrey T. Hinson Senior Vice President/ Chief Financial Officer Principal Financial Officer


Dated: May 15, 2003

Certification

I, McHenry T. Tichenor, Jr., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Hispanic Broadcasting Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6. The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: May 15, 2003


	/s/ McHenry T. Tichenor, Jr.
	McHenry T. Tichenor, Jr. President and Chief Executive Officer

Certification

I, Jeffrey T. Hinson, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Hispanic Broadcasting Corporation;

b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

Date: May 15, 2003


	/s/ Jeffrey T. Hinson
	Jeffrey T. Hinson Senior Vice President/ Chief Financial Officer Principal Financial Officer

Index To Exhibits

Exhibit No.		Description

2.1		Agreement and Plan of Reorganization, dated June 11, 2002, by and among Univision Communications Inc., Univision Acquisition Corporation and Hispanic Broadcasting Corporation (incorporated by reference to Univision Communications Inc. Current Report on Form 8-K, dated June 12, 2002, File No. 001-12223).

2.2		Univision Stockholder Support Agreement, dated June 11, 2002, by and among Univision Communications Inc., Hispanic Broadcasting Corporation, and A. Jerrold Perenchio (incorporated by reference to Univision Communications Inc. Current Report on Form 8-K, dated June 12, 2002, File No. 001-12223).

2.3		HBC Stockholder Support Agreement, dated June 11, 2002, by and among Univision Communications Inc., Univision Acquisition Corporation, and the stockholders listed on Exhibit A thereto (incorporated by reference to Univision Communications Inc. Current Report on Form 8-K, dated June 12, 2002, File No. 001-12223).

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 on 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 12, 1998).

3.3		Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of the Company dated June 3, 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 Exhibit 3.2 to the Company’s Registration Statement on Amendment No. 3 to Form S-1 (Registration No. 33-78370) filed on July 8, 1994).

4.1		Specimen certificate for the Class A Common Stock (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Amendment No. 3 to Form S-1 (Registration No. 33-78370) filed on July 8, 1994).

4.2		Specimen certificate for the Class B Common Stock (incorporated by reference to Exhibit 4.2 to the Company’s Form 10-Q filed on August 13, 2002).

10.1		Credit Agreement Amendment No. 2 among the Company and its subsidiaries, the Chase Manhattan Bank, as administrative agent, and certain other lenders, dated October 13, 2000 without Exhibits (Schedules omitted).

10.2		Credit Agreement Amendment No. 3 among the Company and its subsidiaries, the Chase Manhattan Bank, as administrative agent, and certain other lenders, dated May 2, 2003, without Exhibits (Schedules omitted).

10.3		Second Amendment to Asset Purchase Agreement, dated May 2, 2003, by and among Big City Radio, Inc., Big City Radio-Chi, LLC, HBC Illinois, Inc. and HBC License Corporation.

10.4		Asset Purchase Agreement, dated May 1, 2003, by and among HBC Illinois, Inc., HBC License Corporation, NextMedia Operating, Inc. and NM Licensing LLC.

10.5		First Amendment to Employment, Noncompetition and Arbitration Agreement, dated April 2, 2003, by and between Jeffrey T. Hinson and HBC Management Company, Inc.

10.6		Time Brokerage Agreement, dated January 10, 2003, by and between HBC Illinois, Inc. and Big City Radio-Chi, LLC.

10.7		Amended and Restated Time Brokerage Agreement, dated May 2, 2003, by and between HBC Illinois, Inc. and Big City Radio-Chi, LLC.

10.8		Time Brokerage Agreement, dated March 17, 2003, by and between Simmons Lone Star Media, Ltd. and HBC Broadcasting Texas, L.P.

EX-10.1 3 j0989_ex10d1.htm EX-10.1

Exhibit 10.1

AMENDMENT NO. 2

AMENDMENT NO. 2 dated as of October 13, 2000 among HISPANIC BROADCASTING CORPORATION, formerly known as Heftel Broadcasting Corporation (the “Borrower”); the SUBSIDIARY GUARANTORS listed on the signature pages hereto; and the LENDERS listed on the signature pages hereto (the “Lenders”).

The Borrower, the Subsidiary Guarantors, the Lenders and The Chase Manhattan Bank, as administrative agent, are parties to a Credit Agreement dated as of February 14, 1997 (as heretofore modified and supplemented and in effect on the date hereof, the “Credit Agreement”) providing, subject to the terms and conditions thereof, for extensions of credit to be made by said Lenders to the Borrower. The Borrower, the Subsidiary Guarantors and the Lenders wish to amend the Credit Agreement in certain respects, and accordingly, the parties hereto hereby agree as follows:

Section 1. Definitions. Except as otherwise defined in this Amendment No. 2, terms defined in the Credit Agreement (as amended hereby) are used herein as defined therein.

Section 2. Amendments. Subject to the satisfaction of the conditions precedent specified in Section 4 below, but effective as of the date hereof, the Credit Agreement shall be amended as follows:

2.01. References in the Credit Agreement (including references to the Credit Agreement as amended hereby) to “this Agreement” (and indirect references such as “hereunder”, “hereby”, “herein” and “hereof”) shall be deemed to be references to the Credit Agreement as amended hereby.

2.02. Section 7.17 of the Credit Agreement shall be amended by adding the following paragraph immediately following the second paragraph thereof:

“In addition to the foregoing, the Borrower may, commencing with the effectiveness of the amendments contemplated by Amendment No. 2 hereto and without reduction of the Restricted Payment Basket, repurchase shares of its Capital Stock for consideration in an aggregate amount up to but not exceeding $150,000,000.”

Section 3. Representations and Warranties. The Borrower represents and warrants to the Lenders that the representations and warranties set forth in Article IV of the Credit Agreement are true and complete on the date hereof as if made on and as of the date hereof and as if each reference in said Article IV to the Credit Agreement included reference to the Credit Agreement as amended by this Amendment No. 2.

Section 4. Conditions Precedent. As provided in Section 2 above, the amendments to the Credit Agreement set forth in said Section 2 shall become effective, as of the date hereof, upon the execution and delivery by each of the Borrower, the Subsidiary Guarantors, and Lenders representing Required Lenders.

Section 5. Miscellaneous. Except as herein provided, the Credit Agreement shall remain unchanged and in full force and effect. This Amendment No. 2 may be executed in any number of counterparts, all of which taken together shall constitute one and the same amendatory instrument and any of the parties hereto may execute this Amendment No. 2 by signing any such counterpart. This Amendment No. 2 shall be governed by, and construed in accordance with, the law of the State of New York.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to be duly executed and delivered as of the day and year first above written.

HISPANIC BROADCASTING CORPORATION (formerly known as Heftel Broadcasting Corporation)


By	/s/ Jeffrey T. Hinson
	Title:	Senior Vice President and
		Chief Financial Officer

SUBSIDIARY GUARANTORS

	HBC BROADCASTING TEXAS, L.P.
	By HBC GP Texas, Inc., its general partner
	HBC FLORIDA, INC.
	HBC HOUSTON LICENSE CORP.
	HBC ILLINOIS, INC.
	HBC INVESTMENTS, INC.
	HBC-LAS VEGAS, INC.
	HBC LICENSE CORP.
	HBC LOS ANGELES, INC.
	HBC NETWORK, INC.
	HBC NEW YORK, INC.
	HBC PHOENIX, INC.
	HBC SAN DIEGO, INC.
	HBC TOWER COMPANY, INC.
	HBCi, INC.
	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.
	TC 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.

By	/s/	Jeffrey T. Hinson
	Title:	Senior Vice President and
		Chief Financial Officer

LENDERS

ABN AMRO BANK N.V.		BANK OF HAWAII


By	/s/ Laurie C. Tuzo	By	/s/ Luke Yeh
	Title: Senior Vice President		Title: Vice President


By	/s/ Eric R. Hollingsworth
	Title: Vice President

BANK OF MONTREAL		THE BANK OF NEW YORK


By	/s/ Karen Klapper	By
	Title: Director		Title:

THE BANK OF NOVA SCOTIA		THE CHASE MANHATTAN BANK


By	/s/ Paul Weissenberger	By	/s/ Tracey Navin Ewing
	Title: Director		Title: Vice President

CIBC, INC.		CREDIT AGRICOLE INDOSUEZ


By	/s/ M. Beth Miller	By	/s/ John McClasky
	Title: Authorized Signatory		Title: First Vice President


		By	/s/ Mark J. Whitman
			Title: Assistant Vice President

FLEET BANK, N.A.		MELLON BANK, N.A.


By	/s/ Lisa Pellow	By	/s/ Alexander M. Gordon
	Title: Managing Director		Title: Assistant Vice President

MICHIGAN NATIONAL BANK		SUNTRUST BANK, CENTRAL FLORIDA, N.A.


By	/s/ Draga Palincas	By	/s/ Kimberly S. Evans
	Title: Vice President		Title: Director

TORONTO DOMINION (TEXAS), INC.		UNION BANK OF CALIFORNIA, N.A.


By		By	/s/ Christina Moore
	Title:		Title: Assistant Vice President

EX-10.2 4 j0989_ex10d2.htm EX-10.2

Exhibit 10.2

AMENDMENT NO. 3

AMENDMENT NO. 3 dated as of May 2, 2003 among HISPANIC BROADCASTING CORPORATION, formerly known as Heftel Broadcasting Corporation (the “Borrower”); the SUBSIDIARY GUARANTORS listed on the signature pages hereto; and the LENDERS listed on the signature pages hereto (the “Lenders”).

Section 1. Definitions. Except as otherwise defined in this Amendment No. 3, terms defined in the Credit Agreement (as amended hereby) are used herein as defined therein.

Section 2. Amendments. Subject to the satisfaction of the conditions precedent specified in Section 4 below, but effective as of the date hereof, the Credit Agreement shall be amended as follows:

2.02. Clause (vi) of the definition of “Permitted Lien” in Section 1.01 of the Credit Agreement shall be amended by replacing the dollar amount of “$5,000,000” therein with the dollar amount “$35,000,000”.

2.03. Section 7.01(d) shall be amended by by replacing dollar amount of “$5,000,000” therein with the dollar amount “$35,000,000”.

Section 5. Miscellaneous. Except as herein provided, the Credit Agreement shall remain unchanged and in full force and effect. This Amendment No. 3 may be executed in any number of counterparts, all of which taken together shall constitute one and the same amendatory instrument and any of the parties hereto may execute this Amendment No. 3 by signing any such counterpart. This Amendment No. 3 shall be governed by, and construed in accordance with, the law of the State of New York.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3 to be duly executed and delivered as of the day and year first above written.

HISPANIC BROADCASTING CORPORATION (formerly known as Heftel Broadcasting Corporation)


By	/s/ Tim P. Ward
	Title:	Vice President and
		Treasurer

SUBSIDIARY GUARANTORS

	HBC BROADCASTING TEXAS, L.P.
	By HBC GP Texas, Inc., its general partner
	HBC FLORIDA, INC.
	HBC HOUSTON LICENSE CORP.
	HBC INVESTMENTS, INC.
	HBC-LAS VEGAS, INC.
	HBC LICENSE CORP.
	HBC LOS ANGELES, INC.
	HBC NETWORK, INC.
	HBC NEW YORK, INC.
	HBC PHOENIX, INC.
	HBC SAN DIEGO, INC.
	HBC TOWER COMPANY, INC.
	HBCi, INC.
	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.
	TC 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.


	By		/s/ Tim P. Ward
			Tim Ward
			Vice President and Treasurer
			All above entities


	HBC ILLINOIS, INC.


	By		/s/ Jerry Ryan
			Jerry Ryan
			President
			HBC ILLINOIS, INC.

LENDERS

ABN AMRO BANK N.V.		BANK OF HAWAII


By		By
	Title:		Title:


By
	Title:

BANK OF MONTREAL		THE BANK OF NEW YORK


By	/s/ Bruce R. Pietka	By	/s/ Kristen E. Talaber
	Title: Vice President		Title: Vice President

THE BANK OF NOVA SCOTIA		THE CHASE MANHATTAN BANK


By	/s/ John W. Campbell	By
	Title: Authorized Signatory		Title:

CIBC, INC.		CREDIT AGRICOLE INDOSUEZ


By	/s/ Joan S. Griffin	By	/s/ Laurence F. Grant
	Title: Executive Director		Title: Vice President


		By	/s/ Phillip J. Salter
			Title: Vice President

FLEET BANK, N.A.		MELLON BANK, N.A.


By	/s/ Dennis Hamboyan	By
	Title: Managing Director		Title:

MICHIGAN NATIONAL BANK		SUNTRUST BANK


By		By	/s/ William C. Washburn, Jr.
	Title:		Title: Vice President

TORONTO DOMINION (TEXAS), INC.		UNION BANK OF CALIFORNIA, N.A.


By	/s/ Carol Brandt	By
	Title: Vice President		Title:

BANK OF SCOTLAND


By	/s/ Joseph Fratus
	Title: First Vice President

EX-10.3 5 j0989_ex10d3.htm EX-10.3

Exhibit 10.3

SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT

THIS SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT (this “Amendment”), is made as of May 2, 2003, by and among BIG CITY RADIO, INC., a Delaware corporation (“BCR”), BIG CITY RADIO-CHI, L.L.C., a Delaware limited liability company (“BCR License Sub”; BCR, together with BCR License Sub, “Seller”), HBC ILLINOIS, INC., a Delaware corporation (“HBC Illinois”), and HBC LICENSE CORPORATION, a Delaware corporation (“HBC License” and together with HBC Illinois the “Purchaser”).

WHEREAS, Seller and HBC Illinois are parties to that certain Asset Purchase Agreement dated as of January 2, 2003 (as amended by the First Amendment to Asset Purchase Agreement, dated as of January 10, 2003, the “Purchase Agreement”);

WHEREAS, HBC Illinois and Seller desire to make certain modifications to the Purchase Agreement, including, among other matters, (i) to include HBC License as a party thereto and (ii) to reflect the rescission of the designation of the Designated Licensee as the proposed assignee of the FCC Licenses; and

WHEREAS, all capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to such terms in the Purchase Agreement.

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

1. The sixth “WHEREAS” paragraph of the Purchase Agreement is hereby deleted and replaced with the following:

“WHEREAS, in order to ensure an orderly, timely and efficient consummation of the transactions contemplated herein, in light of the pending Merger and Seller’s auction process, Purchaser had previously designated Designated Licensee as the assignee of the FCC Licenses and certain other assets of the Station; and

WHEREAS, with the concurrence of Seller and Designated Licensee, Purchaser has subsequently determined to rescind such designation of the Designated Licensee.”

2. The lead-in paragraph to Section 2.1 of the Purchase Agreement is hereby amended to read as follows:

2.1. Purchase and Sale of Assets.

Subject to the conditions set forth in this Agreement, at the Closing, Seller shall assign, transfer, convey and deliver to Purchaser, and Purchaser shall purchase and accept from Seller, all right, title and interest of Seller in and to the following assets relating to the Station (the “Purchased Assets”), free and clear of all Liens (other than Permitted Liens):

3. A new Section 2.4 shall be added to the Purchase Agreement to read as follows:

2.4. Initial Transfer of Certain Purchased Assets.

Notwithstanding any provision to the contrary, Purchaser and Seller have elected to effect the sale and transfer of the Purchased Assets (other than the License Assets) and the assignment and assumption of the Assumed Contract (collectively, the “Initial Transfer”), each as effective as of May 2, 2003 (the “Initial Transfer Date”). For purposes of prorating items of expense relating to the Purchased Assets transferred at the Initial Transfer pursuant to Section 3.5 and determining the risk of loss with respect to such Purchased Assets pursuant to Section 6.8, references in such Sections to the “Closing” and the “Closing Date” shall be deemed to be references to the “Initial Transfer” and the “Initial Transfer Date”.

4. The paragraph which succeeds Section 2.1.8 of the Purchase Agreement is hereby deleted in its entirety.

5. Section 3.1 of the Purchase Agreement is hereby amended to read as follows:

3.1. Purchase Price.

The purchase price for the Purchased Assets shall be Thirty-Two Million Eight Hundred Seventy-Five Thousand Dollars ($32,875,000), plus the Additional Amount (as defined below), if any (collectively, the “Purchase Price”). Purchaser shall pay the Purchase Price to Seller as follows: (a) the sum of Twenty-Nine Million Eight Hundred Seventy-Five Thousand Dollars ($29,875,000) paid by Purchaser to Seller on the Initial Transfer Date pursuant to the Time Brokerage Agreement shall be credited towards the payment of the Purchase Price and (b) the sum of Three Million Dollars ($3,000,000) shall be paid in cash to Seller on the “Deferred Payment Date” (as hereinafter defined) by wire transfer of immediately available funds to an account or accounts identified by Seller in writing prior to the Deferred Payment Date. As used herein, the “Deferred Payment Date” shall mean the earlier of (i) the Closing Date or (ii) if Purchaser has not assigned this Agreement to an unaffiliated third party in accordance with Section 11.8.1 prior to the eighteenth (18^th) month anniversary date of this Agreement (the “18 Month Date”), then the 18 Month Date. In addition, if the Closing has not occurred prior to the 18 Month Date and Purchaser has not assigned this Agreement to an unaffiliated third party in accordance with Section 11.8.1 prior to the 18 Month Date, then the Purchase Price shall increase by Three Hundred Thousand Dollars ($300,000) (the “Additional Amount”). Purchaser shall pay the Additional Amount to Seller on the Closing Date by wire transfer of immediately available funds to an account or accounts identified by Seller in writing prior to the Closing Date.

6. Section 3.2 of the Purchase Agreement is hereby amended by replacing the words “Purchased Assets” with the words “License Assets”.

7. Section 3.3 of the Purchase Agreement is hereby amended to read as follows:

3.3. Transfer and Closing Procedures.

At the Initial Transfer and the Closing, 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 (a) pay the Purchase Price to Seller in accordance with Section 3.1 above and (b) at the Initial Transfer, execute and deliver an assumption agreement with respect to the Assumed Contract in a form reasonably acceptable to both Seller and Purchaser. 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 Initial Transfer and the Closing shall be deemed to have been taken simultaneously at the time the last of any such actions is taken or completed at the Initial Transfer or the Closing, as applicable.

8. Section 5.6 of the Purchase Agreement is hereby deleted in its entirety.

9. Section 6.1.1 of the Purchase Agreement is hereby amended to read as follows:

6.1.1. No later than one (1) Business Day after the date hereof, BCR License Sub, with the concurrence of Designated Licensee, shall request that the FCC dismiss the pending application for FCC consent to the assignment of the FCC Licenses from BCR License Sub to Designated Licensee, FCC File No. BALH-20030102ACF, and no later than one (1) Business Day after such dismissal, Seller and Purchaser shall jointly cause to be filed applications with the FCC requesting the FCC’s consent to the assignment of the FCC Licenses from BCR License Sub to HBC License, which applications are attached hereto at Exhibit A (collectively, the “FCC Assignment Application”). Each party shall pay its own expenses in connection with the preparation and prosecution of the FCC Assignment Application and shall share equally any filing fees associated with the FCC Assignment Application.

10. Section 6.1.3 of the Purchase Agreement is hereby amended to read as follows:

6.1.3. Upon the terms and subject to the conditions set forth in this Agreement, Seller and Purchaser shall each use their respective reasonable best efforts to promptly (a) take, or to cause to be taken, all actions, and to do, or to cause to be done, and to assist and cooperate with the other parties in doing all things necessary, proper or advisable under applicable Law or otherwise to consummate and make effective the transactions contemplated by this Agreement; (b) obtain from any Governmental Authority or other Person any actions, non-actions, clearances, waivers, consents, approvals, permits or Orders required to be obtained by Seller, Purchaser or any of their respective Affiliates in connection with the authorization, execution, delivery and performance of this Agreement, the consummation of the other transactions contemplated hereby and thereby and the assignment of the FCC Licenses from BCR License Sub to HBC License;

(c) furnish all information required for any application or other filing to be made pursuant to any applicable Law or any applicable regulations of any Governmental Authority in connection with the transactions contemplated by this Agreement, including filings in connection with the FCC Assignment Application, and to supply promptly any additional information and documentary material that may be requested in connection with such filings or applications; (d) avoid the entry of, or have vacated or terminated, any Order that would restrain, prevent or delay the Closing or the FCC Order, including defending against and opposing any lawsuits or other proceedings (including any FCC reconsideration or review), whether judicial or administrative, reviewing or challenging this Agreement, the consummation of the other transactions contemplated hereby and thereby or the assignment of the FCC Licenses from BCR License Sub to HBC License; and (e) execute and deliver any additional instruments necessary to assign the FCC Licenses from BCR License Sub to HBC License or to consummate any other transactions contemplated by this Agreement. No party to this Agreement shall consent to any voluntary delay of the assignment of the FCC Licenses from BCR License Sub to HBC License or the consummation of the other transactions contemplated hereby at the behest of any Governmental Authority or other Person without the consent of the other party, which consent shall not be unreasonably withheld, conditioned or delayed.

11. Article 7 of the Purchase Agreement is hereby amended as follows:

(a) The words “Purchased Assets” in the introductory paragraph are replaced with the words “License Assets”;

(b) The words “that relate solely to the License Assets” are added immediately after the first occurrence of the words “this Agreement” in each of Section 7.1 and Section 7.2; and

12. Article 8 of the Purchase Agreement is hereby amended by replacing the words “Purchased Assets” in the introductory paragraph with the words “License Assets”.

13. Article 9 of the Purchase Agreement is hereby amended by deleting Section 9.1.3 and Section 9.2.3

14. Section 10.1 of the Purchase Agreement is hereby amended to read as follows:

10.1. Termination.

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

10.1.1. [intentionally omitted]

10.1.2. by Seller if Purchaser is in breach of its obligations to pay the Purchase Price in accordance with Section 3.1 and such breach has not been cured by Purchaser within five (5) days of written notice of such breach;

10.1.3. by either Purchaser or Seller if the FCC denies the FCC Assignment Application in an order that has become a Final Order; or

10.1.4. by either Purchaser or Seller if the Closing has not occurred on or before the earlier of (i) the date on which the Time Brokerage Agreement has been terminated by the Programmer thereunder or by mutual consent of the parties thereto or (ii) the 20^th anniversary date of this Agreement (the “Outside Date”).

10.1.5. [intentionally omitted]

10.1.6. [intentionally omitted]

Except as set forth in Section 10.1.2, the parties expressly acknowledge and agree that the Agreement shall not be terminated solely as a result of a material breach by either party in the performance of its obligations hereunder. In the event of such material breach, except as set forth in Section 10.1.2, the sole remedy of the non-breaching party shall be to commence an action for specific performance by the breaching party of its obligations hereunder. The non-breaching party shall also be entitled to such money damages (including attorneys’ fees and collection costs) as may be awarded in addition to, and not in lieu of, such specific performance.

15. Section 11.1 of the Purchase Agreement is hereby amended to read as follows:

11.1. Survival.

The representations and warranties in this Agreement (other than those that relate solely to the License Assets) shall terminate at, and will have no further force and effect after, the Initial Transfer Date. The representations and warranties in this Agreement that relate solely to the License Assets shall terminate at, and will have no further force and effect after, the Closing Date. No covenants or agreements of the parties contained in this Agreement shall survive the Initial Transfer or the Closing, except that covenants that contemplate or may involve actions to be taken or obligations in effect after the Initial Transfer or the Closing, as the case may be, shall survive in accordance with their terms.

16. Section 11.4 of the Purchase Agreement is hereby amended to read as follows:

11.4. Fees and Expenses.

Except as otherwise expressly provided in this Agreement, all fees and expenses, including fees and expenses of counsel, financial advisors, and accountants incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such fee or expense, whether or not the Closing shall have occurred; provided, however, that if the FCC has designated the FCC Assignment Application for a hearing, Purchaser shall reimburse Seller for all costs reasonably incurred by Seller in connection with participating in such hearing.

17. Section 11.8.1 of the Purchase Agreement is hereby amended to read as follows:

11.8.1. In the event that the FCC Order has not been granted prior to October 31, 2004, (i) Purchaser may assign its rights hereunder to an unaffiliated third party that is legally and financially qualified to be the assignee of the FCC Licenses, subject to the prior written consent of Seller (which shall not be unreasonably withheld); provided, that no such assignment shall relieve Purchaser of its obligations under this Agreement and (ii) Seller may assign its rights hereunder to a third party, subject to the prior written consent of Purchaser (which shall not be unreasonably withheld); provided, however, that in each case, the third party assignee shall be required to assume the obligations of the assigning party under the Time Brokerage Agreement. Except as set forth in the preceding sentence, no party hereto shall assign this Agreement, in whole or in part, whether by operation of law or otherwise, without the prior written consent of the other party hereto.

18. Annex I of the Purchase Agreement is hereby amended by revising the definition for “Time Brokerage Agreement” to read as follows:

“Time Brokerage Agreement” shall mean the Amended and Restated Time Brokerage Agreement between BCR License Sub and HBC Illinois dated as of May 2, 2003.

19. Annex I of the Purchase Agreement is hereby further amended by adding the following definitions:

“18 Month Date” shall have the meaning set forth in Section 3.1.

“Additional Amount” shall have the meaning set forth in Section 3.1.

“Deferred Payment Date” shall have the meaning set forth in Section 3.1.

“Initial Transfer” shall have the meaning set forth in Section 2.4.

“Initial Transfer Date” shall have the meaning set forth in Section 2.4.

“License Assets” shall mean, collectively, (i) the FCC Licenses, (ii) the transmitter equipment listed on Schedule 2.4 hereto, (iii) the intangible property described in Section 2.1.5 of this Agreement, (iv) the logs and 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 the FCC, and (v) and the promotional materials described in Section 2.1.8 of this Agreement.

20. Except as expressly modified hereby, all other terms and conditions of the Purchase Agreement shall remain in full force and effect in accordance with their terms.

21. This Amendment 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.

[The remainder of this page intentionally left blank.]

IN WITNESS WHEREOF, each of the parties hereto has caused this Second Amendment to Asset Purchase Agreement to be executed as of the date first written above.

	BIG CITY RADIO, INC.


	By:	/s/ Paul R. Thomson
		Paul R. Thomson,
		Vice President


	BIG CITY RADIO-CHI, L.L.C.
	By: BIG CITY RADIO, INC.,
	Its Managing Member


	By:	/s/ Paul R. Thomson
		Paul R. Thomson,
		Vice President


	HBC ILLINOIS, INC.


	By:	/s/ Gerald J. Ryan
		Gerald J. Ryan,
		Vice President


	HBC LICENSE CORPORATION


	By:	/s/ Jeffrey T. Hinson
		Jeffrey T. Hinson,
		Senior Vice President

SCHEDULE 2.4

TRANSMITTER EQUIPMENT

Quantity		DESCRIPTION

1		Harris Platinum Z-10 CD Transmitter
1		Harris Digit CD Exciters (one of these is an N+1 unit)
1		Burk Technology ARC-16 Remote Control w/ESI
2		Burk Technology IP-8 Interface Panels
1		Spectracom 8195A GPS Receiver w/antenna
1		Harris Intaplex TDM-163 STL Plus with Synchrocast Add On Package
1		Eastern Research DNS-1000 T-1 CSU / DSU units 1 each station
1		Harris A2D2A Analog to Digital / Digital to Analog Converter
1		Comrex Nexus ISDN Transceiver
1		ERI 960 Series 3-Pole Cavity Filters 1 each station
1		Altronics Research 10kW Dummy Loads 1 each station
1		Harris equipment racks
1		Dielectric 4 port 1 5/8 inch coax switches
1		ERI 2 bay Cavity-Backed Resonator Antenna and associated hardware, 103.1 MHz

EX-10.4 6 j0989_ex10d4.htm EX-10.4

Exhibit 10.4

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this “Agreement”) is made as of this 1st day of May, 2003 by and among HBC Illinois, Inc., a Delaware corporation (“HBC Illinois”), HBC License Corporation, a Delaware corporation (“HBC License”, and collectively with HBC Illinois, the “Buyer”), NextMedia Operating, Inc., a Delaware corporation (“Operating”), and NM Licensing LLC, a Delaware limited liability company (“Licensing”, and, collectively with Operating, the “Seller”).

RECITALS

A. Seller owns and operates radio station WJTW (FM), licensed to Joliet, Illinois (the “Station”).

B. Seller owns or holds certain tangible and intangible assets, including certain licenses, permits and authorizations issued by the Federal Communications Commission (the “FCC”), used or useful in the operation and ownership of the Station.

C. Buyer desires to purchase from Seller, and Seller desires to sell to Buyer, certain assets of Seller used or held for use in the ownership and operation of the Station.

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants, agreements and conditions hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:

1. PURCHASE AND SALE OF ASSETS

1.1 Assets to be Transferred.

Subject to the terms and conditions of this Agreement, on the Closing Date (as hereinafter defined), Seller shall sell, transfer, convey, assign, and deliver to Buyer, and Buyer shall purchase and accept from Seller the following assets of Seller that relate to the ownership and operation of the Station, together with all rights and privileges associated with such assets (collectively the “Purchased Assets”):

(a) Licenses. The licenses, permits, and authorizations issued or granted by the FCC to Seller for the operation of the Station or used in connection with the operation of the Station as listed on Schedule 1.1(a) attached hereto (the “FCC Authorizations”), and all other licenses, permits and authorizations issued to Seller by any other governmental entity in connection with the ownership and operation of the Station as listed in Schedule 1.1(a) (collectively with the FCC Authorizations, the “Licenses”).

(b) Tangible Personal Property. The items of tangible personal property and equipment owned, leased or held by Seller and used in connection with the ownership and operation of the Station which are described or listed in Schedule 1.1(b) attached hereto.

(c) Books and Records. All of Seller’s rights in and to the public files, technical information and engineering data, filings with the FCC, and logs and records related to the operation of the Purchased Assets (excluding records related to any Excluded Asset (as hereinafter defined)).

1.2 Excluded Assets.

Notwithstanding anything to the contrary contained herein, it is understood and agreed that the Purchased Assets shall not include any of the following assets or any right, title or interest therein (collectively, the “Excluded Assets”):

(a) Seller’s cash on hand as of the Closing and any of Seller’s interests in its bank accounts and all of Seller’s other cash, cash equivalents, security funds, securities, investments and deposits;

(b) Any claims, rights and interests in and to any refunds of Taxes for periods prior to the Closing Date. For purposes of this Agreement, the terms “Tax” and “Taxes” shall mean all federal, state, local, or foreign income, payroll, Medicare, withholding, unemployment insurance, social security, sales, use, service, service use, leasing, leasing use, excise, franchise, gross receipts, value added, alternative or add-on minimum, estimated, occupation, real and personal property, stamp, duty, transfer, workers’ compensation, severance, windfall profits, environmental (including Taxes under Section 59A of the Internal Revenue Code of 1986, as amended (the “Code”), or other tax, charge, fee, levy or assessment of the same or of a similar nature, including any interest, penalty, or addition thereto whether disputed or not;

(d) Seller’s business name, all records relating to the Excluded Assets and to Seller’s accounts payable and general ledger records, and Seller’s books and records relating to Seller’s internal corporate matters and financial relationships with Seller’s lenders;

(e) Any insurance policies and proceeds thereof, promissory notes, bonds, certificates of deposits or other similar items and cash surrender value in regard thereto;

(f) Any pension, profit-sharing, or employee benefits plans;

(g) All of Seller’s Tax Returns and supporting materials, all original financial statements and supporting materials, all books and records that Seller is required by law to retain, and all records of Seller relating to the sale of the Purchased Assets. The term “Tax Return” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes or any amendment thereto, and including any schedule or attachment thereto; and

(h) All of such other assets, properties, interests and rights owned by Seller that are used in connection with the business or operations of the Station that are not included in the Purchased Assets.

2. ASSUMPTION OF LIABILITIES

2.1 Liabilities to be Assumed.

Subject to the terms and conditions of this Agreement, on the Closing Date, Buyer expressly shall assume and agrees to perform and discharge those liabilities and obligations that arise from the ownership or operation of the Purchased Assets from and after the Closing Date (collectively, the “Assumed Liabilities”).

2.2 Liabilities Not to be Assumed.

Notwithstanding anything contained in this Agreement to the contrary, Buyer does not assume or agree to pay, satisfy, discharge or perform, and will not be deemed by virtue of the execution and delivery of this Agreement or any document delivered in connection with the execution of this Agreement, or as a result of the consummation of the transactions contemplated by this Agreement, to have assumed, or to have agreed to pay, satisfy, discharge or perform, any liability, obligation or responsibility, fixed or unfixed, known or unknown, asserted or unasserted, liquidated or unliquidated, secured or unsecured of Seller other than the Assumed Liabilities.

3. PURCHASE PRICE – PAYMENT

3.1 Purchase Price.

The purchase price (the “Purchase Price”) for the Purchased Assets shall be TWENTY ONE MILLION DOLLARS ($21,000,000).

3.2 Payment of Purchase Price.

The Purchase Price shall be paid by Buyer as follows:

(a) Previous Payment. Buyer, pursuant to that certain Option Agreement between Lakeshore Media, LLC (predecessor in interest to Buyer with respect to such Option Agreement) and Operating dated April 29, 2002, has previously paid to Seller ONE HUNDRED FIFTY THOUSAND DOLLARS ($150,000) (the “Option Payment”). The Option Payment shall be credited towards the Purchase Price at the Closing.

(b) Earnest Money. Within ten (10) business days of execution of this Agreement, Buyer shall deposit with the Escrow Agent (as defined in the Escrow Agreement attached hereto as Exhibit A) an earnest money deposit in the amount of NINE HUNDRED FIFTY THOUSAND DOLLARS ($950,000) in immediately available funds (the “Earnest Money”). The Earnest Money shall be deposited in an interest-bearing account pursuant to the terms of the Escrow Agreement.

(c) Cash At Closing. At Closing, Buyer shall pay to Seller TWENTY MILLION EIGHT HUNDRED FIFTY THOUSAND DOLLARS ($20,850,000), which amount shall include the transfer of the Earnest Money.

3.3 Allocation of Purchase Price.

As soon as practicable, but no later than thirty (30) days after the Closing Date, the aggregate Purchase Price (including the assumption by Buyer of the Assumed Liabilities, if any) shall be allocated among the Purchased Assets for tax purposes (the “Allocation”). Seller and Buyer shall determine such Allocation in good faith based upon an appraisal of the Purchased Assets by Bond & Pecaro (whose fees shall be paid by Buyer). Seller and Buyer will follow and use the Allocation in all Tax Returns, filings or other related reports made by them to any governmental agencies.

4. REPRESENTATIONS AND WARRANTIES OF SELLER

Each Seller makes the following representations and warranties to Buyer, each of which is true and correct on the date hereof, shall remain true and correct to and including the Closing Date, shall be unaffected by any investigation heretofore or hereafter made by Buyer, or any knowledge of Buyer other than as specifically disclosed in the Disclosure Schedule delivered to Buyer at the time of the execution of this Agreement, and shall survive the Closing of the transactions provided for herein as specified in Article 14 of this Agreement.

4.1 Organization; Power.

Operating is a corporation validly existing and in good standing under the laws of the State of Delaware and is qualified to conduct business in Illinois. Licensing is a limited liability company validly existing and in good standing under the laws of the State of Delaware and is qualified to do business in Illinois. Each Seller has full power and authority to own, operate and lease its properties, to carry on its business as and where such is now being conducted and as proposed to be conducted by it, to enter into this Agreement and the other documents and instruments to be executed and delivered by each Seller pursuant hereto and to carry out the transactions contemplated hereby and thereby.

4.2 Authority.

The execution and delivery of this Agreement and the other documents and instruments to be executed and delivered by each Seller pursuant to this Agreement and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate or limited liability company action. This Agreement constitutes, and when executed and delivered, the other documents and instruments to be executed and delivered by each Seller pursuant hereto will constitute, valid binding agreements of each Seller, enforceable in accordance with their respective terms except as such may be limited by bankruptcy, insolvency, reorganization or other laws affecting creditors’ rights generally, and by general equitable principles.

4.3 No Violation.

Neither the execution and delivery of this Agreement or the other documents and instruments to be executed and delivered by Seller pursuant hereto, nor the consummation by Seller of the transactions contemplated hereby and thereby (a) will violate any applicable law or order, (b) will violate any provision of its organizational instruments, (c) will, either with the giving of notice, the passage of time, or both, conflict with, constitute grounds for termination of, or result in a material breach of the terms of, or constitute a default under any agreement, instrument, trust instrument or permit, (d) will result in the creation of any lien, charge or encumbrance on any of the Purchased Assets, (e) will in any way affect or violate the terms or conditions of, or result in cancellation of the Licenses, and (f) except for prior approval of the transfer of ownership of the FCC Authorizations by the FCC, and any third party consents listed on Schedule 4.3 attached hereto, will require any authorization, consent, approval, exemption or other action by or notice to any entity.

4.4 Litigation.

There is no litigation pending or, to Seller’s knowledge, threatened against Seller relating to its ownership and operation of the Purchased Assets, nor does Seller know of any basis for any such litigation.

4.5 Compliance With Laws and Orders.

(a) Compliance. The Purchased Assets are in compliance in all material respects with all applicable laws and orders, including, without limitation, the Communications Act of 1934, as amended (“Communications Act”), and the rules, orders and policies of the FCC. Seller: (i) has not received notice of any violation or alleged violation pertaining to the operation of the Purchased Assets, and (ii) to its knowledge after due inquiry, is subject to no liability for past or continuing violations of any laws or orders pertaining to the operation of the Purchased Assets. All reports and returns pertaining to the operation of the Purchased Assets required to be filed by Seller with any government entity have been filed and were accurate and complete in all material respects when filed.

(b) Licenses and Permits. The FCC Authorizations are validly issued in the name of Seller. Seller is in compliance in all material respects with the FCC Authorizations and will or has applied to the FCC to obtain approval of the transfer of the FCC Authorizations to Buyer pursuant to Article 6 herein. Each of the FCC Authorizations is in full force and effect, is assignable to Buyer in accordance with the terms hereof, and all fees with respect to such Licenses have been paid. Seller has not received any notice of any material violations of the terms of any of the FCC Authorizations, the Communications Act or the rules and regulations of the FCC thereunder that remain pending and unresolved. To the knowledge of Seller, there is no action pending or threatened by or before the FCC which, if determined adversely to Seller, would result in the revocation, cancellation, rescission or material and adverse modification of any of the FCC Authorizations. Seller acknowledges that to the extent that Seller’s failure to

comply with the FCC Authorizations prior to the Closing Date directly results in the payment of any fees or expenses by Buyer to a third party, including but not limited to the FCC, that, following receipt of written notice from Buyer to Seller of the nature and the amount of such payment, Seller shall promptly reimburse Buyer for the fees or expenses paid by Buyer.

4.6 Title to and Condition of the Purchased Assets.

At Closing, Seller shall have, and shall convey to Buyer, good and marketable title to all the Purchased Assets, free and clear of all liens (statutory or otherwise), security interests, claims, pledges, licenses, equities, options, conditional sales contracts, assessments, levies, charges or encumbrances of any nature whatsoever (collectively, “Liens”) except for (a) liens for Taxes not yet due and payable; (b) rights reserved by any governmental authority to regulate the affected property; or (c) as to leased assets, interests of the lessor thereof and liens affecting the interests of the Lessors thereof (collectively, “Permitted Liens”). Except for approval of the transfer of ownership by the FCC and the consents listed on Schedule 4.3, none of the Purchased Assets are subject to any restrictions with respect to the transferability thereof. The Purchased Assets are in good operating condition and repair, ordinary wear and tear excepted.

4.7 Broker Commission or Finder’s Fees.

Neither Seller, nor any entity acting on behalf of Seller, has agreed to pay a broker, commission, finder’s fee or similar payment in connection with this Agreement or any matter related hereto.

4.8 No Third Party Options.

There are no existing agreements with, operations of rights of, or commitments to any person other than Buyer to acquire any of the Purchased Assets or any interest therein.

4.9 Disclosure.

No representation or warranty by Seller in this Agreement, or in any certificate, schedule, document or exhibit hereto or furnished or to be furnished by or on behalf of Seller pursuant to this Agreement or in connection with transactions contemplated hereby, contains or shall contain any untrue statement of material fact or omits or shall omit a material fact necessary to make the statements contained therein not misleading. All statements and information contained in any such certificate, instrument, or document delivered by or on behalf of Seller shall be deemed representations and warranties by Seller.

5. REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer makes the following representations and warranties to Seller, each of which is true and correct on the date hereof, shall remain true and correct to and including the Closing Date, shall be unaffected by any investigation heretofore or hereafter made by Seller, or any knowledge of Seller other than as specifically disclosed in the Disclosure Schedule delivered to

Seller at the time of the execution of this Agreement, and shall survive the Closing of the transactions provided for herein as specified in Article 14 of this Agreement.

5.1 Organization and Corporate Power.

(a) Organization. Both HBC Illinois and HBC License are corporations duly incorporated, validly existing and in good standing under the laws of the State of Delaware. HBC Illinois is duly qualified as a foreign corporation in the State of Illinois.

(b) Corporate Power. Buyer has all requisite corporate power to enter into this Agreement and the other documents and instruments to be executed and delivered by Buyer and to carry out the transactions contemplated hereby and thereby.

5.2 Authority.

The execution and delivery of this Agreement and the other documents and instruments to be executed and delivered by Buyer pursuant to this Agreement and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary limited liability company action. This Agreement constitutes, and when executed and delivered, the other documents and instruments to be executed and delivered by Buyer pursuant hereto will constitute, valid and binding agreements of Buyer, enforceable in accordance with their respective terms, except as such may be limited by bankruptcy, insolvency, reorganization or other laws affecting creditors’ rights generally, and by general equitable principles.

5.3 No Violation.

Neither the execution and delivery of this Agreement or the other documents and instruments to be executed and delivered by Buyer pursuant hereto, nor the consummation by Buyer of the transactions contemplated hereby and thereby (a) will violate any applicable law or order, (b) will violate any provision of its organizational instruments, or (c) will, either with the giving of notice, the passage of time, or both, conflict with, constitute grounds for termination of, or result in a material breach of the terms of, or constitute a default under any agreement, instrument, trust instrument or permit.

5.4 Qualification.

Buyer knows of no fact that would, under the Communications Act or the rules, regulations and policies of the FCC, disqualify Buyer from acquiring the Licenses.

5.5 Broker or Finders Fee.

Neither Buyer, nor any entity acting on behalf of Buyer, has agreed to pay a broker, commission, finder’s fee or similar payment in connection with the Agreement or any matter related hereto.

5.6 Financial Capability.

Buyer will have on the Closing Date, sufficient cash and cash equivalents to purchase the Purchased Assets and to consummate the transactions contemplated by this Agreement, including, without limitation, payments of fees and expenses contemplated hereunder.

6. APPLICATIONS TO AND CONSENT BY FCC

6.1 FCC Consent.

Consummation of the transactions provided for herein and the performance of the obligations of Seller and Buyer under this Agreement are subject to the condition that the FCC, within three hundred sixty five (365) days of the date of acceptance for filing of the Assignment Application (defined hereinafter), shall have issued its written consent to such assignment without any condition materially adverse to Buyer (the “FCC Consent”). In the event that Seller is unable to procure the FCC Consent, and such failure is not based on any action or inaction of the Buyer, Buyer may elect to either (i) have Seller use its commercially reasonable efforts to satisfy the FCC and obtain the FCC consent or (ii) cancel the transaction and Buyer shall receive its Earnest Money and any interest earned thereon and the Option Payment. If Buyer elects alternative (i), Seller hereby agrees to undertake any commercially reasonable actions to satisfy the FCC and obtain the FCC Consent. As used herein, the “Assignment 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 Authorizations from Seller to HBC License; provided, however, that in the event that the merger of Hispanic Broadcasting Corporation and Univision Communications Inc. (“Univision”), MB Docket No. 02-235, has not been consummated at the time the Assignment Application is to be filed, the Assignment Applications also shall include an application seeking consent to the assignment from Seller to HBC License as owned and controlled by Univision.

6.2 Assignment Application and Notice.

As promptly as practicable following the execution date of this Agreement, but no later than two (2) business days after the execution date of this Agreement, Seller and Buyer shall file the Assignment Application with the FCC, including all information, data, exhibits, resolutions, statements and other materials necessary and proper in connection with the Assignment Application. Seller shall, at its expense, give due notice of the filing of the Assignment Application by broadcasting notice of such filing on the Station or by such other means as may be required by the rules and regulations of the FCC; provided that Buyer shall deliver to Seller on the date the Assignment Application is filed with the FCC, the information relating to Buyer that is required to be included in such notice.

6.3 Mutual Covenant of Reasonable Cooperation.

Seller and Buyer shall diligently and expeditiously take all necessary and proper steps, provide any additional information requested by the FCC, and otherwise use their commercially reasonable efforts to obtain the FCC Consent and to comply with this Article 6.

6.4 Assignment Application Expenses and Fees.

Each party shall be solely responsible for the expenses incurred by it in the preparation, filing and prosecution of its respective portion of the Assignment Application. All filing fees relating to the Assignment Application imposed by the FCC shall be paid one-half each by Seller and Buyer.

7. OTHER MATTERS

7.1 Costs.

Except as otherwise provided herein, each party to this Agreement shall be responsible for and bear all of such party’s own costs and expenses, including, without limitation, any broker’s or finder’s fees and the expenses of its representatives, incurred at any time in connection with pursuing or consummating the transactions contemplated by this Agreement.

7.2 Preclosing Covenants.

Between the execution date and the Closing Date, except with the prior consent of Buyer, Seller:

(a) shall conduct the operation of the Station in accordance with the Communications Act, the rules and regulations of the FCC, and all applicable laws and orders; and

(b) shall not cause or permit the Licenses to expire or be surrendered or adversely modified, or take any action which would cause the FCC or any other governmental entity to institute proceeding for the suspension, revocation or adverse modification of any of the Licenses. Notwithstanding anything to the contrary contained in this Agreement, Seller shall not be required to construct the facilities authorized in FCC File No. BPH-20020822ABT prior to the Closing Date or in order to consummate the transactions contemplated by this Agreement.

7.3 Risk of Loss.

Risk of loss for damage to or theft, loss or destruction of the Purchased Assets (by any means, including, without limitation, acts of God) occurring after the date of this Agreement and prior to the Closing shall be borne by Seller, and after the Closing shall be borne by Buyer.

7.4 Updating of Schedules.

From time to time after the execution of this Agreement and prior to the Closing, Seller will promptly supplement or amend the Schedules delivered in connection herewith with respect to any matter which exists or occurs after the date of this Agreement and which, if existing or occurring at or prior to the date of this Agreement, would have been required to be set forth or described in the Schedules or which is necessary to correct any information therein; provided, however, that the provisions of this Section are informational only and Buyer shall not

be bound to the terms of any changed Schedules unless they are incorporated into this Agreement by a written amendment signed by Buyer.

7.5 Transfer Taxes and Similar Charges.

All recordation, transfer and documentary taxes and fees, stamps, and any excise, sales or use taxes, and all similar costs of transferring the Purchased Assets in accordance with this Agreement shall be borne by Seller.

7.6 Bulk Sales Law.

The parties do not believe that any bulk sales or fraudulent conveyance statute applies to the transactions contemplated by this Agreement. Buyer, therefore, waives compliance by Seller with the requirements of any such statutes and Seller agrees to indemnify, defend and hold Buyer harmless against any claim made against Buyer as a result of a failure to comply with any such statute.

7.7 Other Action.

Both Buyer and Seller shall use such party’s commercially reasonable efforts to cause the fulfillment at the earliest practicable date of all of the conditions to each such party’s obligations to consummate the transactions contemplated in this Agreement.

7.8 Disclosure.

Buyer and Seller shall each have a continuing obligation to promptly notify the other party in writing with respect to any matter hereafter arising or discovered which, if existing or known at the date of this Agreement, would have been required to be set forth or described in the Disclosure Schedule, but no such disclosure shall cure any breach of any representation or warranty which is inaccurate. Further, Buyer and Seller shall give prompt notice to other party at any occurrence that comes to its attention that may constitute a misrepresentation, breach of warranty, or nonfulfillment of any covenant or condition on the part of Seller or Buyer contained in this Agreement.

8. FURTHER COVENANTS OF SELLER

Seller covenants and agrees as follows:

8.1 Conduct of Business Pending the Closing.

From the date hereof until the Closing, or the earlier termination of this Agreement without a closing, Seller shall have complete control and supervision of and sole responsibility for the operation of the Station and the Purchased Assets and during such period:

(a) Operation of the Station. Seller shall operate the Station and shall take such action as may be necessary to maintain, preserve, renew and keep in force and effect (with no adverse effect thereto) the FCC authorizations.

(b) No Breach. Seller shall not take or fail to take, or permit any act or failure to act, which may cause a breach of any commitment or obligation, or a breach of any representation, warranty, covenant or agreement made by Seller herein.

(c) No Negotiations. Seller shall not directly or indirectly (through a representative or otherwise) solicit or furnish any information to any prospective buyer, commence, or conduct presently ongoing, discussions or negotiations with any other party or enter into any agreement with any other party concerning the sale of the Purchased Assets or any part thereof (an “acquisition proposal”), and Seller shall immediately advise Buyer of the receipt of any written acquisition proposal.

8.2 Consents.

Seller shall use its commercially reasonable efforts prior to Closing to obtain all consents necessary for the consummation of the transactions contemplated hereby.

8.3 Access to Facilities, Files and Records.

At the request of Buyer, Seller shall from time to time give or cause to be given to the officers, employees, accountants, counsel, agents, consultants and representatives of Buyer: (a) full access during normal business hours to all equipment, machinery, fixtures, furniture and documentation that represents a part of the Purchased Assets; and (b) all such other information concerning the Purchased Assets as Buyer may reasonably request; provided that such requests and Seller’s compliance therewith do not interfere with the normal operations of the Station. Any investigation or examination by Buyer shall not in any way diminish or obviate any representations or warranties of Seller made in this Agreement or in connection herewith. Seller shall cause its accountants and any agent of Seller in possession of Seller’s books and records to cooperate with Buyer’s requests for information pursuant to this Agreement.

8.4 FCC Cooperation.

Seller will use its commercially reasonable efforts to cooperate with Buyer with any FCC filings that Buyer may make regarding the relocation of the Station’s broadcast facilities. Notwithstanding the foregoing, Seller shall not be obligated to take any action that would result in the incurrence of any out-of-pocket expense or would adversely effect the operation of Seller’s business.

8.5 Financial Statements.

Seller shall provide unaudited financial statements related to its operation of the Station as may be reasonably requested by Buyer to the extent that such information is available and in the form in which such information is available. Notwithstanding the foregoing, Seller shall provide such information to Buyer without any representation or warranty as to its accuracy or otherwise. Seller shall not be obligated to prepare any financial statements which are not readily available or to incur any expenses in connection with providing the information referenced in this Section 8.5.

9. CONDITIONS PRECEDENT TO BUYER’S OBLIGATIONS

Each and every obligation of Buyer to be performed on the Closing Date shall be subject to the satisfaction prior to or at the Closing of each of the following conditions:

9.1 Representations and Warranties True on the Closing Date.

Each of the representations and warranties made by Seller in this Agreement, and the statements contained in any instrument, certificate or writing delivered by Seller pursuant to this Agreement, shall be true and correct when made and shall be true and correct in all material respects at and as of the Closing Date as though such representations and warranties were made or given on and as of the Closing Date, except for those given as of a specified date which must only be true and correct as of such specified date.

9.2 Compliance With Agreement.

Seller shall have performed and complied in all material respects with all of Seller’s agreements and obligations under this Agreement which are to be performed or complied with by Seller prior to or on the Closing Date, including the delivery of the closing documents specified in Section 12.2 hereof.

9.3 Absence of Litigation.

No litigation shall have been commenced or threatened, and no investigation by any government entity shall have been commenced, against Buyer, Seller or any of the affiliates, officers, members or shareholders of any of them, with respect to the transactions contemplated hereby.

9.4 Consents and Approvals.

The FCC Consent and all other approvals, consents and waivers that are required to effect the assignments of the FCC Authorizations shall have been received.

9.5 Closing Certificates.

Buyer shall have received a certificate, dated as of the Closing Date, from an authorized representative of each Seller certifying that the conditions set forth in Sections 9.1 and 9.2 hereof have been fulfilled.

9.6 Opinion of Counsel.

Buyer shall have received a written opinion of Seller’s FCC counsel dated as of the Closing Date, in substantially the form attached hereto as Exhibit B.

10. CONDITIONS PRECEDENT TO SELLER’S OBLIGATIONS

Each and every obligation of Seller to be performed on the Closing Date shall be subject to the satisfaction prior to or at the Closing of the following conditions:

10.1 Representations and Warranties True on the Closing Date.

Each of the representations and warranties made by Buyer in this Agreement, and the statements contained in any instrument, certificate or writing delivered by Buyer pursuant to this Agreement, shall be true and correct when made and shall be true and correct in all material respects at and as of the Closing Date as though such representations and warranties were made or given on and as of the Closing Date, except for those given as of a specified date which must only be true and correct as of such specified date.

10.2 Compliance With Agreement.

Buyer shall have performed and complied in all material respects with all of Buyer’s agreements and obligations under this Agreement which are to be performed or complied with by Buyer prior to or on the Closing Date, including the delivery of the closing documents and the Purchase Price specified in Section 12.3 of this Agreement.

10.3 Consents and Approvals.

The FCC Consent and all other approvals, consents and waivers that are required to effect the assignments of the FCC Authorizations shall have been received.

10.4 Certifications, etc.

Seller shall have received a certificate, dated as of the Closing Date, from an authorized representative of Buyer, certifying that the conditions set forth in Sections 10.1 and 10.2 hereof have been fulfilled.

10.5 Absence of Litigation.

11. INDEMNIFICATION

11.1 By Seller.

Subject to the terms and conditions of this Article 11, Seller hereby agrees to indemnify, defend and hold harmless Buyer, and its directors, officers, employees, members, managers and controlled and controlling persons (hereinafter “Buyer’s Affiliates”), from and against all Claims (as defined herein) asserted against, imposed upon, or incurred by Buyer, Buyer’s Affiliates or the Purchased Assets, directly or indirectly, by reason of, or resulting from:

(a) the inaccuracy or breach of any representation or warranty of Seller contained in or made pursuant to this Agreement; provided that any claim for indemnification made by Buyer pursuant to this Section 11.1(a) must be made within the time period described in Section 14 of this Agreement;

(b) the breach of any covenant of Seller contained in this Agreement;

(c) any Claim brought by or on behalf of any broker or finder retained, employed or used by Seller or any of its directors, officers, employees, members or agents in connection with the transactions provided for herein or the negotiation thereof, whether or not disclosed herein;

(d) any Claim relating to the ownership or operation of the Purchased Assets prior to the Closing Date including, without limitation, any liabilities arising under the FCC Authorizations which relate to events occurring prior to the Closing Date; or

(e) any Claim made against Buyer as a result of a failure to comply with any bulk sales or fraudulent conveyance statute.

As used in this Article 11, the term “Claim” shall include losses, damages, liabilities, judgments, awards, penalties and settlements, demands, claims, suits, actions, causes of action, proceedings and assessments, and the costs and expenses (including court costs and fees and reasonable attorneys’ fees and expenses) in connection therewith and related thereto.

11.2 By Buyer.

Subject to the terms and conditions of this Article 11, Buyer hereby agrees to indemnify, defend and hold harmless Seller, and its directors, officers, employees, members, managers, and controlled and controlling persons (hereinafter “Seller’s Affiliates”) from and against all Claims asserted against, imposed upon or incurred by Seller or Seller’s Affiliates, directly or indirectly, by reason of or resulting from:

(a) the inaccuracy or breach of any representation or warranty of Buyer contained in or made pursuant to this Agreement;

(b) the breach of any covenant of Buyer contained in this Agreement;

(c) any Claim brought by or on behalf of any broker or finder retained, employed or used by Buyer or any of its directors, officers, employees, members or agents in connection with the transactions provided for herein or the negotiation thereof, whether or not disclosed herein; or

(d) any Claim relating to the ownership or operation of the Purchased Assets arising from events that occurred on or after the Closing Date including, without limitation, any Liabilities arising under the FCC Authorizations which relate to events occurring on or after the Closing Date.

11.3 Indemnification of Third-Party Claims.

The following provisions shall apply to any Claim subject to indemnification which is (i) a suit, action or arbitration proceeding filed or instituted by any third party, or (ii) any other form of proceeding or assessment instituted by any government entity:

(a) Notice and Defense. The party or parties to be indemnified (whether one or more, the “Indemnified Party”) will give the party from whom indemnification is sought (the “Indemnifying Party”) prompt written notice of any such Claim, and the Indemnifying Party may undertake the defense thereof by representatives chosen by it. Failure to give such notice shall not affect the Indemnifying Party’s duty or obligations under this Article 11, except to the extent the Indemnifying Party is prejudiced thereby. So long as the Indemnifying Party is defending any such Claim actively and in good faith, the Indemnified Party shall not settle such Claim. The Indemnified Party shall make available to the Indemnifying Party or its representatives all records and other materials required by them and in the possession or under the control of the Indemnified Party, for the use of the Indemnifying Party and its representatives in defending any such Claim, and shall in other respects give reasonable cooperation in such defense.

(b) Failure to Defend. If the Indemnifying Party, within a reasonable time after notice of any such Claim, decides not to defend such Claim actively and in good faith, the Indemnified Party will (upon further notice) have the right to undertake the defense, compromise or settlement of such Claim or consent to the entry of a judgment with respect to such Claim, on behalf of and for the account and risk of the Indemnifying Party, and the Indemnifying Party shall thereafter have no right to challenge the Indemnified Party’s defense, compromise, settlement or consent to judgment.

(c) Indemnified Party’s Rights. Anything in this Article 11 to the contrary notwithstanding, (i) if there is a reasonable probability that a Claim may materially and adversely affect the Indemnified Party other than as a result of money damages or other money payments, the Indemnified Party shall have the right to defend, compromise or settle such Claim, and (ii) the Indemnifying Party shall not, without the written consent of the Indemnified Party, settle or compromise any Claim or consent to the entry of any judgment which does not include as an unconditional term thereof the giving by the claimant or the plaintiff to the Indemnified Party of a release from all liability in respect of such Claim.

11.4 Payment.

The Indemnifying Party shall promptly pay the Indemnified Party any amount due under this Article 11. Upon judgment, determination, settlement or compromise of any third party Claim, the Indemnifying Party shall pay promptly on behalf of the Indemnified Party, and/or to the Indemnified Party in reimbursement of any amount theretofore required to be paid by it, the amount so determined by judgment, determination, settlement or compromise and all other Claims of the Indemnified Party with respect thereto, unless in the case of a judgment, an appeal is made from the judgment. If the Indemnifying Party desires to appeal from an adverse judgment, then the Indemnifying Party shall post and pay the cost of the security or bond to stay execution of the judgment pending appeal. Upon payment in full by the Indemnifying Party, the Indemnifying Party shall succeed to the rights of such Indemnified Party, to the extent not waived in settlement, against the third party who made such third party Claim.

11.5 Limits on Indemnity.

Notwithstanding any other provision hereof or of any applicable law, neither party will be entitled to make a claim against the other party under Sections 11.1(a), 11.2(a) or 11.3 for any breach of a representation and warranty unless and until the aggregate amount of claimed losses exceeds Ten Thousand Dollars ($10,000), in which event the party seeking indemnification will be entitled to make a claim against the other party for the full amount of claimed losses. Notwithstanding the foregoing, the aggregate amount of claims that may be asserted for indemnification hereunder shall in no event exceed Two Million One Hundred Thousand Dollars ($2,100,000).

12. CLOSING

12.1 Closing.

The closing of this transaction (the “Closing”) shall take place no later than the tenth (10th) business day after the date of finality of the FCC Consent, or on such other date to which the parties mutually agree (the “Closing Date”). The Closing shall be conducted by exchange of documents by facsimile, electronically, and overnight carrier or such other means as the parties mutually agree.

12.2 Documents to be Delivered by Seller.

At the Closing, Seller shall deliver to Buyer the following documents, in each case duly executed or otherwise in proper form:

(a) Compliance Certificate. The certificates described in Section 9.5 of this Agreement.

(b) Assignment of FCC Authorizations. An Assignment of FCC Authorizations sufficient in the opinion of Buyer and its counsel to assign the FCC Authorizations to Buyer.

(c) Opinions of Counsel. A written opinion of Seller’s FCC counsel, dated as of the Closing Date, addressed to Buyer, in substantially the form of Exhibit B attached hereto.

(d) Resolutions. A copy of the resolutions of the board of directors and/or managers of each Seller authorizing and approving this Agreement and the transactions contemplated by this Agreement.

(e) Good Standing Certificates. Good standing certificates from Delaware and Illinois for each Seller.

(f) Transfer Documents. Such bills of sale, assignments, and other good and sufficient instruments of transfer as Buyer may reasonable request in order to convey and transfer to Buyer title to the Purchased Assets (collectively, the “Transfer Documents”).

(g) Other Documents. All other documents, instruments or writings required to be delivered at or prior to the Closing pursuant to this Agreement and other certificates of authority and documents as Buyer may reasonably request.

12.3 Documents to be Delivered by Buyer.

At the Closing, Buyer shall deliver to Seller the following documents, in each case duly executed or otherwise in proper form:

(a) Cash Purchase Price. A wire transfer of immediately available funds as required by Section 3.2(c) of this Agreement.

(b) Compliance Certificate. The certificate described in Section 10.4 of this Agreement.

(c) Resolutions. A copy of the resolutions of the respective boards of directors of each of HBC License and HBC Illinois authorizing and approving this Agreement and the consummation of the transactions contemplated by this Agreement.

(d) Other Documents. All other documents, instruments or writings required to be delivered to Seller at or prior to the Closing pursuant to this Agreement and such other certificates of authority and documents as Seller may reasonably request.

12.4 Post-Closing Use of FCC Authorizations.

If the Closing occurs prior to the time that Buyer can use the Purchased Assets to operate a radio station at the site proposed in the FCC Form 301 Application attached hereto as Exhibit C, Seller acknowledges and agrees that it shall negotiate in good faith with Buyer to enter into an arrangement with Buyer whereby the Purchased Assets may continue to be used to operate the Station.

13. TERMINATION

13.1 Right of Termination Without Breach.

This Agreement may be terminated without further liability of any party at any time prior to the Closing:

(a) by mutual written agreement of Buyer and Seller, or

(b) by either Buyer or Seller if the Closing shall not have occurred on or before the date which is one year from the date on which the Assignment Application is filed with the FCC, provided the terminating party has not, through breach of a representation, warranty or covenant, prevented the Closing from occurring on or before such date.

13.2 Termination for Breach.

(a) Termination by Buyer. If (i) Seller has failed to cure any material violation or breach of any of its agreements, representations or warranties contained in this Agreement within ten (10) days after delivery of written notice of such violation of breach from Buyer, (ii) there has been a failure of satisfaction of a condition to the obligations of Buyer which has not been waived by Buyer (and such failure has not been caused by an act or failure to act by Buyer) or (iii) Seller shall have attempted to terminate this Agreement under this Article 13 or otherwise without grounds to do so and without acting in good faith, then Buyer, by written notice to Seller at any time prior to the Closing that such violation, breach, failure or wrongful termination attempt is continuing, may terminate this Agreement. Upon termination of this Agreement by Buyer pursuant to this Section 13.2(a), Buyer, in addition to any other remedy that may be available, shall be entitled to equitable relief pursuant to Section 16.4 of this Agreement.

(b) Termination by Seller. If (i) Buyer has failed to cure any material violation or breach of any of its agreements, representations or warranties contained in this Agreement within ten (10) days after delivery of written notice of such violation or breach from Seller, (ii) there has been a failure of satisfaction of a condition to the obligations of Seller which has not been waived by Seller or (iii) Buyer shall have attempted to terminate this Agreement under this Article 13 or otherwise without grounds to do so and without acting in good faith, then Seller, by written notice to Buyer at any time prior to the Closing that such violation, breach, failure or wrongful termination attempt is continuing, may terminate this Agreement and shall be entitled to retain the Earnest Money and the Option Payment as its sole and exclusive remedy as liquidated damages and not as a penalty.

14. SURVIVAL OF REPRESENTATIONS AND WARRANTIES

All representations and warranties of Seller and Buyer contained in this Agreement shall survive for two (2) years after the Closing Date.

15. [INTENTIONALLY OMITTED]

16. MISCELLANEOUS

16.1 Further Assurances.

From time to time, at Buyer’s request and without further consideration, Seller shall execute and deliver to Buyer such documents, instruments and consents and take such other action as Buyer may reasonably request in order to consummate more effectively the transactions contemplated hereby, to discharge the covenants of Seller and to vest in Buyer good, valid and marketable title to the Purchased Assets. Buyer acknowledges and agrees that, from and after the Closing Date, that Buyer shall cooperate with Seller and shall take such action as Seller shall reasonably request so that Buyer may continue to operate the Excluded Assets or otherwise address any matter relating to Seller’s ownership of the Purchased Assets or operation of the Station prior to the Closing Date; provided, however, that in connection with Buyer performing

its obligations under this Section 16.1, Buyer shall not be obligated to incur any out-of-pocket costs or expenses.

16.2 Disclosures and Announcements.

Both the timing and the content of all disclosure to third parties and public announcements concerning the transactions provided for in this Agreement by either Seller or Buyer shall be subject to the approval of the other party in all material respects, except that neither party’s approval shall be required as to any statements and other information which either party may submit to the FCC, or be required to make pursuant to any rule or regulation of the FCC, or otherwise as required by law.

16.3 Assignment; Parties in Interest.

(a) Assignment. Except as expressly provided herein, the rights and obligations of a party hereunder may not be assigned, transferred or encumbered without the prior written consent of the other party. Notwithstanding the foregoing, Buyer may, upon written notice to Seller, cause one or more assignees of Buyer to carry out all or part of the transactions contemplated hereby; provided, however, that Buyer shall, nevertheless, remain liable for all of its obligations to Seller hereunder.

(b) Parties in Interest. This Agreement shall be binding upon, inure to the benefit of, and be enforceable by the respective successors and permitted assigns of the parties hereto. Nothing contained herein shall be deemed to confer upon any other person any right or remedy under or by reason of this Agreement.

16.4 Equitable Relief.

Seller agrees that any breach of Seller’s obligation to consummate the sale of the Purchased Assets on the Closing Date will result in irreparable injury to Buyer for which a remedy at law would be inadequate; and that, in addition to any relief at law which may be available to Buyer for such breach and regardless of any other provision contained in this Agreement, Buyer shall be entitled to the equitable relief of specific performance and any and all other remedies available at law or in equity. If any action is brought by Buyer against Seller for failure by Seller to complete the sale of the Purchased Assets on the Closing Date, Seller will waive the defense that there is an adequate remedy at law.

16.5 Law Governing Agreement.

This Agreement shall be construed and interpreted according to the internal laws of the State of Illinois, excluding any choice of law rules that may direct the application of the laws of another jurisdiction.

16.6 Amendment and Modification.

Buyer and Seller may amend, modify and supplement this Agreement in such manner as may be agreed upon by them in writing.

16.7 Notice.

All notices, requests, demands and other communications hereunder shall be given in writing and shall be: (a) personally delivered; (b) sent by telecopier, facsimile transmission or other electronic means of transmitting written documents; or (c) sent to the parties at their respective addresses indicated herein by registered or certified U.S. mail, return receipt requested and postage prepaid, or by private overnight mail courier service. The respective addresses to be used for all such notices, demands or requests are as follows:

(a) If to Buyer, to:

Hispanic Broadcasting Corporation

3102 Oak Lawn Avenue, Suite 215

Dallas, Texas 75219

Attention: Jeffrey T. Hinson, Senior Vice President

Facsimile: (214) 525-7750

E-mail: jhinson@hispanicbroadcasting.com

(with a copy to)

Hallett & Perrin, P.C.

2001 Bryan St., Suite 3900

Dallas, Texas 75201

Attention: Bruce H. Hallett, Esq.

Facsimile: (214) 922-4170

E-mail: bhallett@hallettperrin.com

or to such other person or address as Buyer shall furnish to Seller in writing.

(b) If to Seller to:

Next Media Operating, Inc.

6312 S. Fiddler’s Green Circle, Suite 360E

Englewood, Colorado 80111

Attention: Sean Stover

Facsimile: (303) 694-4940

(with a copy to)

Weil, Gotshal & Manges LLP

100 Crescent Court, Suite 1300

Dallas, Texas 75201

Attention: Glenn D. West, Esq.

John E. Quattrocchi, Esq.

Facsimile: (214) 746-7777

or to such other person or address as Seller shall furnish to Buyer in writing.

If personally delivered, such communication shall be deemed delivered upon actual receipt; if electronically transmitted pursuant to this paragraph, such communication shall be deemed delivered the next business day after transmission (and sender shall bear the burden of proof of delivery); if sent by overnight courier pursuant to this paragraph, such communication shall be deemed delivered upon receipt; and if sent by U.S. mail pursuant to this paragraph, such communication shall be deemed delivered as of the date of delivery indicated on the receipt issued by the relevant postal service, or, if the addressee fails or refuses to accept delivery, as of the date of such failure or refusal. Any party to this Agreement may change its address for the purposes of this Agreement by giving notice thereof in accordance with this Section.

16.8 Confidentiality.

Any and all information, disclosures, knowledge or facts regarding Buyer or Seller or their respective businesses or properties to which the other party is exposed as a result of the negotiation, preparation or performance of this Agreement shall be confidential and shall not be divulged, disclosed or communicated to any other person, firm, corporation or entity, except for the other party’s employees, attorneys, accountants, investment bankers, investors and lenders, and their respective attorneys, on a need-to-know basis for the purpose of consummating the transactions contemplated by this Agreement. Notwithstanding the foregoing, no party shall be required to keep confidential information that (a) is in the public domain, (b) is required to be disclosed pursuant to an order or request of a judicial or governmental authority (provided the non-disclosing party is given reasonable prior notice such that it may seek, at its expense, confidential treatment of the information to be disclosed), or (c) is required to be disclosed under applicable law or rule, as reasonably determined by counsel for the receiving party.

16.9 Entire Agreement.

This instrument embodies the entire agreement between the parties hereto and supersedes all prior oral or written agreements, understandings, representations and warranties and courses of conduct and dealing between the parties with respect to the transactions contemplated herein.

16.10 Counterparts.

This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. For purposes of this Agreement, facsimile signatures shall be treated the same as original signatures.

16.11 Headings.

The headings in this Agreement are inserted for convenience only and shall not constitute a part hereof.

16.12 Severability.

If any one or more of the provisions contained in this Agreement should be found invalid, illegal or unenforceable, in any respect, the validity, legality, and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. Any illegal or unenforceable term shall be deemed to be void and of no force and effect only to the minimum extent necessary to bring such term within the provisions of applicable law and such term, as so modified, and the balance of this Agreement shall then be fully enforceable.

16.13 Attorneys’ Fees.

If either party initiates any litigation against the other party involving this Agreement, the prevailing party in such action shall be entitled to receive reimbursement from the other party for all reasonable attorneys’ fees and other costs and expenses incurred by the prevailing party in respect of that litigation, including any appeal, and such reimbursement may be included in the judgment or final order issued in that proceeding.

16.14 Counsel.

Each party has been represented by its own counsel in connection with the negotiation and preparation of this Agreement and, consequently, each party hereby waives the application of any rule of law that would otherwise be applicable in connection with the interpretation of this Agreement, including, but not limited to, any rule of law to the effect that any provision of this Agreement shall be interpreted or construed against the party whose counsel drafted that provision.

16.15 Schedules.

The Schedules and Exhibits attached to this Agreement and any other documents delivered to Buyer by Seller pursuant hereto are hereby made a part of this Agreement as if set forth in full herein.

[Signature Page Follows]

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

BUYER:	HBC ILLINOIS, INC.


	By:	/s/ Gerald J. Ryan
	Name:			Gerald J. Ryan
	Title:		Vice President


	HBC LICENSE CORPORATION


	By:	/s/ Jeffrey T. Hinson
	Name:			Jeffrey T. Hinson
	Title:		Sr. Vice President


SELLER:	NEXTMEDIA OPERATING, INC


	By:	/s/ Sean R. Stover
	Name:			Sean R. Stover
	Title:		Vice President


	NM LICENSING LLC


	By:	/s/ Sean R. Stover
	Name:			Sean R. Stover
	Title:		Vice President

EX-10.5 7 j0989_ex10d5.htm EX-10.5

Exhibit 10.5

FIRST AMENDMENT

EMPLOYMENT, NONCOMPETITION

AND ARBITRATION AGREEMENT

This First Amendment to Employment, Noncompetition and Arbitration Agreement (this “Amendment”) is entered into this 2nd day of April, 2003 (the “Amendment Date”), by and between Jeffrey T. Hinson (“Employee”), and HBC Management Company, Inc. (“Employer”). Capitalized terms used herein, but not otherwise defined, shall have the same meaning assigned to them in the Agreement (as defined below).

RECITALS

A. Employee and Employer entered into that certain Employment, Noncompetition and Arbitration Agreement, dated as of November 5, 2001 (the “Agreement”);

B. The parties desire to amend the Agreement as set forth herein in anticipation of the completion of the transactions contemplated by that certain Agreement and Plan of Reorganization dated June 11, 2002 by and among Hispanic Broadcasting Corporation, Univision Communications, Inc. (“Univision”) and Univision Acquisition Corporation (the “Merger Agreement”); and

C. Employer desires to continue to employ Employee and Employee desires to continue his employment with Employer subject to the following modifications of the Agreement.

AGREEMENT

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

1. Amendment to Paragraph 4. The introductory paragraph of Paragraph 4 of the Agreement is hereby amended and restated in its entirety to read as follows (Sub-Paragraphs 4(a), (b) and (c) of the Agreement to remain as is without amendment):

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 (including any Conversion Period, as defined below, “Initial Term of Employment” or “Initial Term”), subject to a later extension or earlier termination under the provisions of this paragraph (including any Conversion Period, the “Term of Employment” or “Term”). The Initial Term shall automatically be extended for an additional one-year term on each 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; provided, however, that this automatic extension provision shall automatically terminate on the Date of Conversion, as defined below, of this Agreement.

2. Insertion of New Sub-Paragraph 4(d). The following shall be inserted as new Sub-Paragraph 4(d) of the Agreement:

(d) Conversion to Consulting Agreement.

If at any point after the Initial Meeting (as defined below) Employee is not satisfied with his duties and responsibilities, Employee shall be entitled, in his sole and absolute discretion, to terminate his employment with Employer and to convert this Agreement to a consulting agreement (the “Conversion”) pursuant to which he shall provide consulting services to Employer for the balance of the Term, by giving written notice to Employer stating his desire to terminate his employment and convert the Agreement in accordance with the provisions of this Sub-Paragraph 4(d) (the “Notice of Conversion”), and such Conversion shall take effect on the date Employer receives the Notice of Conversion (the “Date of Conversion”). The parties’ obligations under Paragraph 2 (other than the Employer’s obligations under Sub-Paragraph 2(b)) of this Agreement shall not in any way be diminished, but rather shall remain in full force and effect after the Date of Conversion, and Employee shall remain subject to the provisions of Paragraph 9 of the Agreement. Employer and Employee shall use their reasonable efforts to agree to the terms and scope of Employee’s consulting services and to amend this Agreement accordingly to reflect the Conversion within thirty (30) days following the Date of Conversion; provided, however, the following Paragraphs of the Agreement shall terminate and no longer be of any force or effect as of 12:01 a.m., Dallas time, on the Date of Conversion: 3(a), 3(b), 3(c), 3(d), 4(c)(i) and (vi), and 5.

3. Amendment to Paragraph 7. Paragraph 7 of the Agreement is hereby amended and restated in its entirety to read as follows:

Annual Meetings with Univision. Upon closing of the Transactions (as defined in the Merger Agreement), Employee shall be entitled to meet annually with representatives of Univision to discuss his employment duties and responsibilities. The initial meeting pursuant to this Paragraph 7, which shall occur in December 2003, being referred to as the “Initial Meeting.”

4. Effect. Except as amended by this Amendment, all of the provisions of the Agreement are hereby affirmed, ratified and declared to be in full force and effect.

5. Counterparts. This Amendment may be executed in multiple counterparts, each of which shall be deemed an original and together shall constitute one and the same Amendment.

6. Effectiveness. This Amendment shall become effective upon the closing of the Transactions.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, this Amendment has been entered into as of the date and year first above written.

EMPLOYEE:


/s/ Jeffrey T. Hinson
Jeffrey T. Hinson


EMPLOYER:

HBC MANAGEMENT COMPANY, INC.


By:	/s/ McHenry Tichenor, Jr.
Name:			McHenry Tichenor, Jr.
Title:		Chief Executive Officer

S-1

EX-10.6 8 j0989_ex10d6.htm EX-10.6

Exhibit 10.6

TIME BROKERAGE AGREEMENT

THIS TIME BROKERAGE AGREEMENT (this “Agreement”) is entered into as of the 10^th day of January, 2003, by and between HBC ILLINOIS, INC., a Delaware corporation (“Programmer”), and BIG CITY RADIO-CHI, L.L.C., a Delaware limited liability company (“Licensee”).

RECITALS:

WHEREAS, Licensee is the licensee pursuant to authorizations by the Federal Communications Commission (“FCC”) of radio broadcast station WXXY-FM, licensed to Highland Park, Illinois (the “Station”);

WHEREAS, during the term of this Agreement, Licensee wishes to retain Programmer to provide programming and related services for the Station, all in conformity with Licensee’s policies and procedures, FCC rules, regulations and policies for time brokerage arrangements, and the provisions hereof;

WHEREAS, Programmer agrees to use the Station to broadcast such programming of Programmer’s selection that is in conformity with the Communications Act of 1934, as amended and all rules, regulations and policies of the FCC (collectively, the “FCC Requirements”), subject to Licensee’s full authority to manage and control the operation of the Station;

WHEREAS, Programmer and Licensee have entered into an Asset Purchase Agreement dated as of January 2, 2003 (the “Purchase Agreement”), pursuant to which Licensee has agreed to sell to Programmer, and Programmer has agreed to purchase from Licensee, certain of the radio station properties and assets relating to the Station as described therein under the terms and conditions set forth in the Purchase Agreement; and

WHEREAS, Programmer and Licensee agree to cooperate to make this Agreement work to the benefit of the public and both parties and as contemplated by the terms set forth herein.

AGREEMENT:

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

SECTION 1 USE OF STATION AIR TIME.

1.1 Scope. During the Term (as defined in Section 1.2 below), Licensee shall make available to Programmer broadcast time on the Station as set forth in this Agreement. Programmer shall deliver such programming, at Programmer’s expense, to the Station’s transmitters or other authorized remote control points designated by Licensee. Programmer shall provide such programming of Programmer’s selection complete with commercial matter, news,

public service announcements and other suitable programming to the Station. Except as otherwise provided in this Agreement, Licensee agrees to broadcast such programming in its entirety, including commercials at the times specified, on the facilities of the Station without interruption, deletion, or addition of any kind. Licensee may use such time as Licensee may require up to two (2) hours per week, for the broadcast of Licensee’s own regularly-scheduled news, public affairs, and other non-entertainment programming on the Station, to be scheduled at mutually agreeable times. Licensee may elect to set aside additional air time (up to two (2) hours per week) (the “Additional Time”) to be scheduled at a mutually agreeable time, for the broadcast of specific non-entertainment programming on issues of importance to the local community. Licensee shall provide Programmer with as much notice as possible, but in no event less than three (3) weeks’ notice, of its intention to set aside such Additional Time. All program time not reserved by or designated for Licensee shall be available for use by Programmer. Licensee agrees that Programmer may sell, or engage a third party to sell, commercial time during the programming provided by Programmer to the Station for Programmer’s account.

1.2 Term. The term of this Agreement (the “Term”) shall commence at 12:01 a.m. on January 13, 2003 (the “Effective Date”), and end on the Closing Date (as defined in the Purchase Agreement), unless terminated earlier pursuant to any of the provisions of Section 5 hereof.

SECTION 2 STATION OPERATIONS.

2.1 Licensee Control Over Station Operations.

(a) Licensee shall retain ultimate authority, power and control over the operations of the Station during the Term, including specifically, control over the personnel, programming and finances of the Station.

(b) Subject to Licensee’s ultimate authority, power and control over the operations of the Station, Programmer agrees to provide programming and related services to the Station. Such related services shall include: (i) the sale of advertising time on the Station; (ii) coordination of traffic and billing functions; (iii) maintenance, repair and replacement of the Station’s transmitting or studio equipment and the other assets used or held for use in the business and operation of the Station, other than the FCC Licenses (as such term is defined in the Purchase Agreement) and (iv) other administrative or operational functions as Licensee and Programmer may agree to, consistent with FCC Requirements relating to time brokerage agreements. Programmer shall provide and perform Programmer’s obligations hereunder, including all related services, diligently and in a manner consistent in all material respects with broadcast industry practices.

(c) When on the Licensee’s premises, all employees of Programmer used to provide Programmer’s programming or other services to the Station shall be subject to the overall supervision of management personnel under Licensee’s control. Subject to Licensee’s ultimate authority, power and control over the operations of the Station, Programmer’s employees shall be solely accountable to Programmer.

2.2 Station Expenses. During the Term, Licensee shall be responsible for paying directly those expenses necessary to maintain compliance with the FCC Requirements and the terms of this Agreement. Programmer shall employ and be responsible for the salaries, taxes, programming costs, insurance and related costs for all personnel used in the production of the Programmer’s programming (including, without limitation, salespeople, traffic personnel, administrative and programming staff).

2.3 Fee. The fee payable by Programmer to Licensee in consideration for the airtime made available hereunder and the other agreements of the parties made hereunder, shall be in the amount and manner as set forth in Schedule 2.3 hereto.

2.4 Call Letters. Licensee hereby grants to Programmer a non-exclusive license to use the call letters “WXXY-FM” in connection with the provision of programming and related services for the Station in accordance with the terms and conditions of this Agreement. The license granted by the foregoing sentence shall terminate and be of no further force or effect upon the earlier of the expiration of the Term or the termination of this Agreement.

SECTION 3 STATION PUBLIC INTEREST OBLIGATIONS.

3.1 Licensee Authority. Subject to Programmer’s obligations hereunder, Licensee shall be responsible for the Station’s compliance with all FCC Requirements and all other applicable laws. Programmer shall cooperate with Licensee, at Programmer’s expense, in taking such actions as Licensee may reasonably request to assist Licensee in maintaining the Station’s compliance with the FCC Requirements and all other applicable laws. Notwithstanding any other provision of this Agreement, Programmer recognizes that Licensee has certain obligations to operate the Station in the public interest, and to broadcast programming to meet the needs and interests of the Station’s communities of license and service areas. From time to time Licensee shall air, or if Licensee requests, Programmer shall air, programming on issues of importance to the local community. Nothing in this Agreement shall abrogate or limit the unrestricted authority of Licensee to discharge Licensee’s obligations to the public and to comply with the FCC Requirements, and Licensee shall have no liability or obligation to Programmer, for taking any action that Licensee reasonably and in good faith believes to be necessary or appropriate to discharge such obligations or comply with such laws, rules, regulations or policies.

3.2 Additional Licensee Obligations. Although both Licensee and Programmer shall cooperate in the broadcast of emergency information over the Station, Licensee shall retain the right, without any liability or obligation to Programmer, to interrupt Programmer’s programming in case of an emergency or for programming which, in the good faith judgment of Licensee, is of greater local or national public importance. In all such cases, Licensee shall use Licensee’s commercially reasonable efforts to provide Programmer prior written notice of Licensee’s intention to interrupt Programmer’s programming. Licensee shall coordinate with Programmer the Station’s hourly station identification and any other announcements required to be aired by FCC Requirements. Licensee shall (a) maintain the Station’s local public inspection file within the Station’s community of license or at the Station’s main studio, and (b) prepare and place in such inspection file in a timely manner all material required by Section 73.3526 of the FCC’s Requirements, including the Station’s quarterly issues and program lists. Programmer shall,

upon request by Licensee, promptly provide Licensee with such information concerning Programmer’s programs and advertising as is necessary to assist Licensee in the preparation of such information or to enable Licensee to verify independently the Station’s compliance with any other laws, rules, regulations or policies applicable to the Station’s operation.

SECTION 4 STATION PROGRAMMING & OPERATIONAL POLICIES.

4.1 Broadcast Station Programming Policy Statement. Licensee has adopted a Broadcast Station Programming Policy Statement (the “Policy Statement”), a copy of which appears as Schedule 4.1 hereto and which may be amended from time to time in order to comply with FCC Requirements by Licensee upon written notice to Programmer. Programmer agrees and covenants to comply in all material respects with the Policy Statement, with all FCC Requirements, and with all changes subsequently made by Licensee (in good faith) or the FCC. Programmer shall furnish or cause to be furnished the artistic personnel and material for the programs as provided by this Agreement and all programs shall be prepared and presented in conformity in all material respects with FCC Requirements and with the Policy Statement. All advertising spots and promotional material or announcements shall comply in all material respects with all applicable federal, state and local laws, regulations and policies and the Policy Statement, and shall be produced in accordance with quality standards established by Programmer. If Licensee determines that a program, commercial announcement or promotional material supplied by Programmer is for any reason, in Licensee’s reasonable discretion, contrary to the public interest, or does not comply with the Policy Statement, Licensee may, upon written notice to Programmer (to the extent time permits such notice), and without any liability or obligation to Programmer, suspend or cancel such program, commercial announcement or promotional material and substitute its own programming or, if Licensee requests, Programmer shall provide promptly suitable programming, commercial announcement or other announcement or promotional material.

4.2 Licensee Control of Station Programming. Notwithstanding any contrary provision contained in this Agreement, and consistent with Licensee’s obligations pursuant to the FCC Requirements, Licensee shall have the right, without any liability or obligation to Programmer, to delete or preempt any material contained in any programming or commercial matter furnished by Programmer for broadcast over the Station that Licensee reasonably and in good faith believes to be unsuitable for broadcast or the broadcast of which Licensee reasonably and in good faith believes would be contrary to the public interest. Licensee shall have the right, without any liability or obligation to Programmer to broadcast Licensee’s own programming in place of such deleted or preempted material. Licensee expressly agrees that Licensee’s right to reject or preempt any of the programming will be exercised only for cause and will not be exercised in an arbitrary manner, for the commercial advantage of Licensee, or to cause harm to the business or operations of Programmer.

equal opportunities, compliance with lowest unit charge requirements, and the provision of reasonable access to federal political candidates. Programmer shall cooperate with Licensee, at Programmer’s expense, to assist Licensee in complying with the political broadcasting rules of the FCC. Programmer shall supply such information promptly to Licensee as may be necessary to comply with the lowest unit charge and other applicable political broadcast requirements of federal law. To the extent that Licensee reasonably and in good faith believes necessary or appropriate, Programmer shall release advertising availabilities to Licensee to permit Licensee to comply with the political broadcasting rules of the FCC and Sections 312 and 315 of the Act. Programmer shall be entitled to all revenues received by Licensee for such advertising.

4.4 Advertising of Credit Terms. To the extent prohibited by the rules of the Federal Trade Commission, no advertising of credit terms shall be made over broadcast material supplied hereunder by Programmer beyond mention of the fact that credit terms are available.

4.5 Payola/Plugola. In order to enable Licensee to fulfill Licensee’s obligations under Section 317 of the Act, Programmer, in compliance with Section 507 of the Act, will, in advance of any scheduled broadcast by the Station, disclose to Licensee any information of which Programmer has knowledge or which has been disclosed to Programmer as to any money, service, or other valuable consideration that any person has paid or accepted, or has agreed to pay or to accept, for the inclusion of any matter as a part of the programming or commercial matter to be supplied to Licensee pursuant to this Agreement. Programmer will cooperate with Licensee, at Programmer’s expense, as necessary to ensure compliance with this provision. Commercial matter with obvious sponsorship identifications shall not require disclosure in addition to that contained in the commercial copy.

4.6 Programmer Compliance with Copyright Act. Programmer represents and warrants that Programmer will have full authority to broadcast the programming on the Station; that Programmer shall not broadcast any material in violation of the Copyright Act; and the performing rights to all music contained in broadcast material supplied hereunder by Programmer are licensed by BMI, ASCAP, or SESAC, are in the public domain, are controlled by Programmer, or are cleared at the source by Programmer.

SECTION 5 TERMINATION.

5.1 Termination by Programmer. This Agreement may be terminated by Programmer by written notice to Licensee, if Programmer is not then in material default or breach hereof or of the Purchase Agreement, if Licensee is in material breach of Licensee’s representations or Licensee’s material obligations hereunder and has failed to cure such breach within thirty (30) days of written notice of the breach from Programmer.

5.2 Termination by Licensee. This Agreement may be terminated by Licensee by written notice to Programmer, if Licensee is not then in material default or breach hereof or of the Purchase Agreement, if Programmer is in material breach of Programmer’s representations or Programmer’s material obligations hereunder and Programmer has failed to cure such breach within thirty (30) days of written notice of the breach from Licensee.

5.3 Termination. If not otherwise earlier terminated, this Agreement will terminate upon the first to occur of any of the following:

(a) this Agreement is declared invalid or illegal in whole or material part by an order or decree of an administrative agency or court of competent jurisdiction the effect of which would be to materially curtail Programmer’s activities hereunder and such order or decree has become final and no longer subject to further administrative or judicial review;

(b) there has been a material change in FCC Requirements that would cause this Agreement to be in material violation thereof and such change is in effect and not the subject of an appeal or further administrative review;

(d) the termination of the Purchase Agreement in accordance with the terms thereof.

5.4 Severability. The parties hereto intend that the transactions contemplated hereunder comply in all respects with FCC Requirements. If any provision of this Agreement shall be declared void, illegal, or invalid by any governmental authority with jurisdiction thereof, the remainder of this Agreement shall remain in full force and effect without such offending provision so long as such remainder substantially reflects the intent and economic or other benefits of the original agreement of the parties hereunder. Furthermore, in such event, the parties shall use their commercially reasonable efforts to reach agreement promptly on lawful substitute provisions in place of said offending provision so as to effectuate more closely their intent as expressed hereunder. If any governmental authority grants to any other entity or individual rights which are not contained in this Agreement, then the parties shall use their commercially reasonable efforts to amend this Agreement to provide the parties hereto such lawful provisions which comport with any rules, regulations and policies adopted after the date of this Agreement.

5.5 Force Majeure. Any failure or impairment of the assets of the Station or any delay or interruption in the broadcast of programs, or failure at any time to furnish facilities, in whole or in part, for broadcast, due to acts of God, restrictions by any governmental authority, civil riot, fire, strike, labor unrest, floods or any other similar cause not reasonably within the control of Licensee or Programmer, shall not constitute a breach of this Agreement and Licensee will not be liable to Programmer nor will Programmer be liable to Licensee for any liability or obligation with respect thereto.

5.6 Insurance; Risk of Loss. From the Effective Date through the end of the Term, Programmer shall maintain with reputable insurance companies reasonably acceptable to Licensee, insurance in such amounts and with respect to such risks reasonably acceptable to Licensee, including broadcast liability insurance naming Licensee as an additional insured, and general comprehensive insurance, also naming Licensee as an additional insured, each with a commercially reasonable amount of coverage as is conventionally carried by broadcasters operating radio stations in the area comparable to those of the Station. The risk of any loss,

damage, impairment, confiscation, or condemnation of any equipment or other personal property owned or leased and used by Programmer in the performance of its obligations hereunder shall be borne by Programmer at all times throughout the Term.

SECTION 6 INDEMNIFICATION.

6.1 Indemnification by Programmer. Programmer shall indemnify and hold harmless Licensee from and against any and all claims, losses, costs, liabilities, damages, expenses, including any FCC fines or forfeitures (including reasonable legal fees and other expenses incidental thereto), of every kind, nature and description (collectively “Damages”) arising or resulting from or relating to (a) Programmer’s breach of any representation, covenant, agreement or other obligation of Programmer contained in this Agreement, (b) any action taken by Programmer or Programmer’s employees and agents with respect to the Station, or any failure by Programmer or Programmer’s employees and agents to take any action with respect to the Station, including Damages relating to violations of FCC Requirements, slander, libel, defamation or other claims relating to programming provided by Programmer or Programmer’s broadcast and sale of advertising time on the Station, except to the extent directed by or caused by Licensee or its officers, employees, agents or Affiliates, or (c) the business or operations of the Station conducted by Programmer from and after the Effective Date.

6.2 Indemnification by Licensee. Licensee shall indemnify and hold harmless Programmer from and against any and all Damages arising or resulting from or relating to (a) Licensee’s breach of any representation, covenant, agreement or other obligation of Licensee contained in this Agreement, or (b) any action taken by Licensee or Licensee’s employees and agents with respect to the Station, including Damages relating to violations of FCC Requirements, slander, libel, defamation or other claims relating to programming provided by Licensee.

SECTION 7 REPRESENTATIONS, WARRANTIES, AND COVENANTS.

7.1 Representations, Warranties, and Covenants of Licensee. Licensee represents, warrants and covenants that:

(a) The execution, delivery and performance by Licensee of this Agreement, the fulfillment of and the compliance with the terms and provisions hereof, and the consummation by Licensee of the transactions contemplated hereby have been duly authorized by all requisite corporate action (which authorization has not been modified or rescinded and is in full force and effect), and do not and will not: (i) conflict with, or violate any provision of, any Law having applicability to Licensee or any affiliate of Licensee; (ii) conflict with, or result in any breach of, or constitute a default under, any agreement to which Licensee is a party or by which Licensee is bound; or (iii) result in or require the creation or imposition of or result in the acceleration of any indebtedness, or of any mortgage, lien, pledge, encumbrance, security interest, deed of trust, option, encroachment, reservation, order, decree, judgment, restriction, charge, agreement, claim or equity of any kind (“Encumbrance”) of any nature upon, or with

respect to, Licensee or any of the assets now owned or hereafter acquired by Licensee. No other action is necessary for Licensee to enter into this Agreement and to consummate the transactions contemplated hereby.

(b) This Agreement constitutes a valid and binding obligation of Licensee, enforceable in accordance with its terms.

(c) Licensee currently is the holder of the authorizations related to the Station listed on Schedule 7.1 attached hereto.

7.2 Representations, Warranties and Covenants of Programmer. Programmer represents, warrants, and covenants that:

(a) The execution, delivery and performance by Programmer of this Agreement, the fulfillment of and the compliance with the respective terms and provisions hereof, and the consummation by Programmer of the transactions contemplated hereby have been duly authorized by all necessary corporate action (which authorization has not been modified or rescinded and is in full force and effect), and do not and will not: (i) conflict with, or violate any provision of, any Law having applicability to Programmer or any affiliate of Programmer or any provision of the organizational documents of Programmer; (ii) conflict with, or result in any breach of, or constitute a default under, any agreement to which Programmer is a party or by which Programmer is bound; or (iii) result in or require the creation or imposition of or result in the acceleration of any indebtedness, or of any Encumbrance of any nature upon, or with respect to, Programmer or any of the assets now owned or hereafter acquired by Programmer. No other corporate action is necessary for Programmer to enter into this Agreement and to consummate the transactions contemplated hereby.

(b) This Agreement constitutes a valid and binding obligation of Programmer, enforceable in accordance with its terms.

SECTION 8 MISCELLANEOUS.

8.1 Further Assurances. Each of the parties hereto hereby agrees to take or cause to be taken such further actions, to execute, deliver and file or cause to be executed, delivered and filed such further documents, and will obtain such consents, as may be necessary or as may be reasonably requested in order to fully effectuate the purposes, terms and conditions of this Agreement.

8.2 Expenses. Each party hereto will pay its own expenses incurred by such party in connection with the negotiation, preparation, execution and consummation of this Agreement and the transactions contemplated hereby, including all legal and accounting fees and disbursements.

8.3 Assignment. No party shall assign its rights and obligations under this Agreement, in whole or in part, whether by operation of law or otherwise, without the prior written consent of the other party hereto, and any such assignment contrary to the terms hereof

shall be null and void and of no force and effect. In no event shall the assignment by any party of its respective rights or obligations under this Agreement release such party from its respective liabilities and obligations hereunder.

8.4 Entire Agreement; Amendments. This Agreement constitutes the entire agreement among the parties hereto with respect to the transactions contemplated herein and, except for the Purchase Agreement, and documents delivered pursuant thereto, supersede all prior oral or written agreements, commitments or understandings with respect to the matters provided for herein. No amendment, modification or discharge of this Agreement shall be valid or binding unless set forth in writing and duly executed and delivered by the party against whom enforcement of the amendment, modification, or discharge is sought.

8.5 Waiver. No delay or failure on the part of any party hereto in exercising any right, power or privilege under this Agreement or under any other documents furnished in connection with or pursuant to this Agreement shall impair any such right, power or privilege or be construed as a waiver of any default or any acquiescence therein. No single or partial exercise of any such right, power or privilege shall preclude the further exercise of such right, power or privilege, or the exercise of any other right, power or privilege. No waiver shall be valid against any party hereto unless made in writing and signed by the party against whom enforcement of such waiver is sought and then only to the extent expressly specified therein.

8.6 Consent to Jurisdiction.

(a) This Agreement and the duties and obligations of the parties hereunder and under each of the documents referred to herein shall be enforceable against any party in the courts of the United States of America and of the State of New York. For such purpose, each party hereto hereby irrevocably submits to the non-exclusive jurisdiction of such courts, and agrees that all claims in respect of this Agreement and such other documents may be heard and determined in any of such courts.

(b) Each party hereto hereby irrevocably agrees that a final judgment of any of the courts specified above in any action or proceeding relating to this Agreement or to any of the other documents referred to herein or therein shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

8.7 Governing Law. This Agreement, the rights and obligations of the parties hereto, and any claims or disputes relating thereto, shall be governed by and construed in accordance with the laws of the State of New York (excluding the choice of law rules thereof).

8.8 Notices. All notices, demands, requests, or other communications which may be or are required to be given, served, or sent by any party to any other party pursuant to this Agreement shall be in writing and shall be hand delivered, sent by overnight courier or mailed by first-class, registered or certified mail, return receipt requested, postage prepaid, or transmitted by telegram, telecopy or telex, addressed as follows:

(a)	If the notice is to Programmer:

	Hispanic Broadcasting Corporation
	3102 Oak Lawn Avenue, Suite 215
	Dallas, Texas 75219
	Attention: Jeffrey T. Hinson, Senior Vice President
	Telephone: (214) 525-7711
	Facsimile: (214) 525-7750

with a copy (which shall not constitute notice) to:

	Hallett & Perrin, P.C.
	2001 Bryan Street, Suite 3900
	Dallas, Texas 75201
	Attention:Bruce H. Hallett
	Telephone: (214) 922-4120
	Facsimile: (214) 922-4170

(b)	If to Licensee:

	Big City Radio, Inc.
	c/o Metromedia Company
	One Meadowlands Plaza
	East Rutherford, New Jersey 07073-2137
	Attention: David A. Persing
	Telephone: (201) 531-8022
	Facsimile: (201) 531-2803

with a copy (which shall not constitute notice) to:

	Hogan & Hartson L.L.P.
	8300 Greensboro Drive
	Suite 1100
	McLean, Virginia 22102
	Attention: Thomas E. Repke
	Telephone: (703) 610-6138
	Facsimile: (703) 610-6200

or to such other address as Licensee may from time to time designate.

delivery receipt, or confirmation of facsimile transmission being deemed conclusive, but not exclusive, evidence of such delivery) or at such time as delivery is refused by the addressee upon presentation.

8.9 Interpretation. Section headings contained in this Agreement are inserted for convenience of reference only, shall not be deemed to be a part of this Agreement for any purpose, and shall not in any way define or affect the meaning, construction or scope of any of the provisions hereof. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.”

8.10 Counterparts. To facilitate execution, this Agreement may be executed in as many counterparts as may be required. It shall not be necessary that the signatures of, or on behalf of, each party, or that the signatures of all persons required to bind any party, appear on each counterpart; but it shall be sufficient that the signature of, or on behalf of, each party, or that the signatures of the persons required to bind any party, appear on one or more of the counterparts. All counterparts shall collectively constitute a single agreement. It shall not be necessary in making proof of this Agreement to produce or account for more than a number of counterparts containing the respective signatures of, or on behalf of, all of the parties hereto.

8.11 Limitation on Benefits. The covenants, undertakings and agreements set forth in this Agreement shall be solely for the benefit of, and shall be enforceable only by, the parties hereto and their respective successors, heirs, executors, administrators, legal representatives and permitted assigns.

8.12 Binding Effect. Subject to any provisions hereof restricting assignment, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors, heirs, executors, administrators, legal representatives and assigns.

8.13 Taxes. Licensee and Programmer shall each pay its own ad valorem taxes, if any, which may be assessed on such party’s personal property for the periods that such items are owned by such party.

8.14 No Joint Venture or Partnership. Programmer shall act as an independent contractor in rendering its services hereunder. Neither party shall have any power or authority to act for or on behalf of the other or to bind the other in any manner whatsoever, except as and to the extent expressly provided for in this Agreement. The parties hereto agree that nothing herein shall constitute a joint venture or partnership between them.

[SIGNATURE PAGE TO FOLLOW]

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

PROGRAMMER:

HBC ILLINOIS, INC.


By:	/s/ Jerry Ryan
Name:	Jerry Ryan
Title:	President


LICENSEE:


BIG CITY RADIO-CHI, L.L.C.
By: BIG CITY RADIO, INC.,
Its Managing Member


By:		/s/ David A. Persing
Name:		David A. Persing
Title:		Executive Vice President, General
		Counsel and Secretary

EX-10.7 9 j0989_ex10d7.htm EX-10.7

Exhibit 10.7

AMENDED AND RESTATED TIME BROKERAGE AGREEMENT

THIS AMENDED AND RESTATED TIME BROKERAGE AGREEMENT (this “Agreement”) is entered into as of the 2nd day of May, 2003, by and between HBC ILLINOIS, INC., a Delaware corporation (“Programmer”), and BIG CITY RADIO-CHI, L.L.C., a Delaware limited liability company (“Licensee”).

RECITALS:

WHEREAS, Licensee and Programmer have entered into a Time Brokerage Agreement, dated as of January 10, 2003, and mutually desire to amend and restate said agreement;

WHEREAS, Licensee is the licensee pursuant to authorizations by the Federal Communications Commission (“FCC”) of radio broadcast station WVIV-FM, licensed to Highland Park, Illinois (FCC Facility ID No. 74177) (the “Station”);

WHEREAS, Programmer and Licensee have entered into an Asset Purchase Agreement dated as of January 2, 2003 (as amended to date, the “Purchase Agreement”), pursuant to which Licensee has agreed to sell to Programmer, and Programmer has agreed to purchase from Licensee, certain of the radio station properties and assets relating to the Station as described therein under the terms and conditions set forth in the Purchase Agreement; and

WHEREAS, Programmer and Licensee agree to cooperate to make this Agreement work to the benefit of the public and both parties and as contemplated by the terms set forth herein.

AGREEMENT:

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

SECTION 1 USE OF STATION AIR TIME.

1.1 Scope. During the Term (as defined in Section 1.2 below), Licensee shall make available to Programmer broadcast time on the Station as set forth in this Agreement.

Programmer shall deliver such programming, at Programmer’s expense, to the Station’s transmitters or other authorized remote control points designated by Licensee. Programmer shall provide such programming of Programmer’s selection complete with commercial matter, news, public service announcements and other suitable programming to the Station. Except as otherwise provided in this Agreement, Licensee agrees to broadcast such programming in its entirety, including commercials at the times specified, on the facilities of the Station without interruption, deletion, or addition of any kind. Licensee may use such time as Licensee may require up to two (2) hours per week, for the broadcast of Licensee’s own regularly-scheduled news, public affairs, and other non-entertainment programming on the Station, to be scheduled at mutually agreeable times. Licensee may elect to set aside additional air time (up to two (2) hours per week) (the “Additional Time”) to be scheduled at a mutually agreeable time, for the broadcast of specific non-entertainment programming on issues of importance to the local community. Licensee shall provide Programmer with as much notice as possible, but in no event less than three (3) weeks’ notice, of its intention to set aside such Additional Time. All program time not reserved by or designated for Licensee shall be available for use by Programmer. Licensee agrees that Programmer may sell, or engage a third party to sell, commercial time during the programming provided by Programmer to the Station for Programmer’s account.

1.2 Term. The initial term of this Agreement (the “Initial Term”) shall commence at 12:01 a.m. on May 2, 2003 (the “Effective Date”), and, unless terminated earlier pursuant to any of the provisions of Section 5 hereof, shall end on the earlier of (i) the Closing Date (as defined in the Purchase Agreement) or (ii) May 1, 2008; provided, however, that the Programmer shall have the right to elect the extend the Initial Term for three (3) consecutive five (5) year terms (“Renewal Terms” and together with the Initial Term, the “Term”) by giving notice to Licensee in writing at least thirty (30) days prior to the expiration of the Initial Term or any Renewal Term.

SECTION 2 STATION OPERATIONS.

2.1 Licensee Control Over Station Operations.

including all related services, diligently and in a manner consistent in all material respects with broadcast industry practices.

2.4 Call Letters. Licensee hereby grants to Programmer a non-exclusive license to use the call letters “WVIV-FM” in connection with the provision of programming and related services for the Station in accordance with the terms and conditions of this Agreement. The license granted by the foregoing sentence shall terminate and be of no further force or effect upon the earlier of the expiration of the Term or the termination of this Agreement. Licensee hereby covenants not to change such call letters.

2.5 Facilities Upgrade Activities. With Programmer’s concurrence, Licensee shall prosecute the pending application for modification of the Station, FCC File No. BPH-20030204ABU (the “FCC Modification Application”), and shall prosecute amendments to the FCC Modification Application and/or file and prosecute other application(s) for modification of the Station as requested by Programmer and consented to by Licensee (which such consent shall not be unreasonably withheld) and (ii) supervise the relocation of the Station’s facilities to acceptable “turn-key” broadcast transmission facilities constructed by Programmer or a third party in conformance with the specifications set out in the FCC Modification Application or such other authorization of the FCC for modified facilities of the Station and leased to Licensee; provided, however, that Licensee shall not be required to expend any funds or incur any legal or engineering expenses in connection with such activities or lease unless Programmer reimburses Licensee in advance for such expenditures as reasonably estimated by Licensee.

SECTION 3 STATION PUBLIC INTEREST OBLIGATIONS.

compliance with the FCC Requirements and all other applicable laws. Notwithstanding any other provision of this Agreement, Programmer recognizes that Licensee has certain obligations to operate the Station in the public interest, and to broadcast programming to meet the needs and interests of the Station’s community of license and service area. From time to time Licensee shall air, or if Licensee requests, Programmer shall air, programming on issues of importance to the local community. Nothing in this Agreement shall abrogate or limit the unrestricted authority of Licensee to discharge Licensee’s obligations to the public and to comply with the FCC Requirements, and Licensee shall have no liability or obligation to Programmer, for taking any action that Licensee reasonably and in good faith believes to be necessary or appropriate to discharge such obligations or comply with such laws, rules, regulations or policies.

SECTION 4 STATION PROGRAMMING & OPERATIONAL POLICIES.

notice to Programmer (to the extent time permits such notice), and without any liability or obligation to Programmer, suspend or cancel such program, commercial announcement or promotional material and substitute its own programming or, if Licensee requests, Programmer shall provide promptly suitable programming, commercial announcement or other announcement or promotional material.

4.3 Political Advertising. Licensee shall oversee and shall take ultimate responsibility for the Station’s compliance with the political broadcasting rules of the FCC and Sections 312 and 315 of the Communications Act of 1934, as amended (the “Act”), including the provision of equal opportunities, compliance with lowest unit charge requirements, and the provision of reasonable access to federal political candidates. Programmer shall cooperate with Licensee, at Programmer’s expense, to assist Licensee in complying with the political broadcasting rules of the FCC. Programmer shall supply such information promptly to Licensee as may be necessary to comply with the lowest unit charge and other applicable political broadcast requirements of federal law. To the extent that Licensee reasonably and in good faith believes necessary or appropriate, Programmer shall release advertising availabilities to Licensee to permit Licensee to comply with the political broadcasting rules of the FCC and Sections 312 and 315 of the Act. Programmer shall be entitled to all revenues received by Licensee for such advertising.

SECTION 5 TERMINATION.

5.1 Termination by Programmer. This Agreement may be terminated by Programmer by written notice to Licensee, if Programmer is not then in material default or breach hereof or of the Purchase Agreement, if Licensee is in material breach of Licensee’s material obligations hereunder and has failed to cure such breach within thirty (30) days of written notice of the breach from Programmer.

5.2 Termination by Licensee. In the event that Programmer is in material breach of any of Programmer’s material obligations hereunder, the following procedures shall be applicable:

(a) Licensee shall be entitled to commence a legal action against Programmer for specific performance of such material obligations. Programmer hereby waives the defense that Licensee has an adequate remedy at law and acknowledges that the remedy of specific performance is appropriate to cure such material breach.

(b) If Programmer has failed to cure such material breach within three hundred sixty (360) days after written notice of such material breach, Licensee may terminate this Agreement upon the payment in cash to Programmer of the fee paid by Programmer pursuant to Section 2.3 hereof plus all costs incurred by Programmer pursuant to its activities described in Section 2.5 hereof.

5.3 Termination by Mutual Consent. This Agreement will terminate upon the mutual written consent of both parties.

lawful provisions which comport with any rules, regulations and policies adopted after the date of this Agreement.

5.6 Insurance; Risk of Loss. From January 10, 2003, through the end of the Term, Programmer shall maintain with reputable insurance companies reasonably acceptable to Licensee, insurance in such amounts and with respect to such risks reasonably acceptable to Licensee, including broadcast liability insurance naming Licensee as an additional insured, and general comprehensive insurance, also naming Licensee as an additional insured, each with a commercially reasonable amount of coverage as is conventionally carried by broadcasters operating radio stations in the area comparable to those of the Station. The risk of any loss, damage, impairment, confiscation, or condemnation of any equipment or other personal property owned or leased and used by Programmer in the performance of its obligations hereunder shall be borne by Programmer at all times throughout the Term.

SECTION 6 INDEMNIFICATION.

SECTION 7 REPRESENTATIONS, WARRANTIES, AND COVENANTS.

7.1 Representations, Warranties and Covenants of Licensee. Licensee represents, warrants and covenants that:

(b) This Agreement constitutes a valid and binding obligation of Licensee, enforceable in accordance with its terms.

(c) Licensee currently is the holder of the authorizations related to the Station listed on Schedule 7.1 attached hereto.

7.2 Representations, Warranties and Covenants of Programmer. Programmer represents, warrants and covenants that:

(b) This Agreement constitutes a valid and binding obligation of Programmer, enforceable in accordance with its terms.

SECTION 8 MISCELLANEOUS.

8.3 Assignment. Programmer may assign this Agreement to any third party which becomes the assignee of Programmer’s rights in accordance with the assignment provisions of the Purchase Agreement. Licensee will assign this Agreement to any third party which becomes the successor licensee of the Station pursuant to the authorization of the FCC and in accordance with the assignment provisions of the Purchase Agreement. Except as aforesaid, no party shall assign its rights and obligations under this Agreement, in whole or in part, whether by operation of law or otherwise, without the prior written consent of the other party hereto, and any such assignment contrary to the terms hereof shall be null and void and of no force and effect. In no event shall the assignment by any party of its respective rights or obligations under this Agreement release such party from its respective liabilities and obligations hereunder.

8.6 Consent to Jurisdiction.

party hereto hereby irrevocably submits to the non-exclusive jurisdiction of such courts, and agrees that all claims in respect of this Agreement and such other documents may be heard and determined in any of such courts.

(a) If the notice is to Programmer:

Hispanic Broadcasting Corporation

3102 Oak Lawn Avenue, Suite 215

Dallas, Texas 75219

Attention: Jeffrey T. Hinson, Senior Vice President

Telephone: (214) 525-7711

Facsimile: (214) 525-7750

with a copy (which shall not constitute notice) to:

Hallett & Perrin, P.C.

2001 Bryan Street, Suite 3900

Dallas, Texas 75201

Attention: Bruce H. Hallett

Telephone: (214) 922-4120

Facsimile: (214) 922-4170

or to such other address as Programmer may from time to time designate.

(b) If to Licensee:

Big City Radio, Inc.

c/o Metromedia Company

One Meadowlands Plaza

East Rutherford, New Jersey 07073-2137

Attention: David A. Persing

Telephone: (201) 531-8022

Facsimile: (201) 531-2803

with a copy (which shall not constitute notice) to:

Hogan & Hartson L.L.P.

8300 Greensboro Drive

Suite 1100

McLean, Virginia 22102

Attention: Thomas E. Repke

Telephone: (703) 610-6138

Facsimile: (703) 610-6200

or to such other address as Licensee may from time to time designate.

Each party may designate by notice in writing a new address to which any notice, demand, request or communication may thereafter be so given, served or sent. Each notice, demand, request, or communication which shall be hand delivered, sent, mailed or faxed in the manner described above, shall be deemed sufficiently given, served, sent, received or delivered for all purposes at such time as it is delivered to the addressee (with the return receipt, the delivery receipt, or confirmation of facsimile transmission being deemed conclusive, but not exclusive, evidence of such delivery) or at such time as delivery is refused by the addressee upon presentation.

8.13 Taxes. Licensee and Programmer shall each pay its own ad valorem taxes, if any, which may be assessed on such party’s personal property for the periods that such items are owned by such party.

[SIGNATURE PAGE TO FOLLOW]

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

PROGRAMMER:

HBC ILLINOIS, INC.


By:		/s/ Gerald J. Ryan
Name:						Gerald J.Ryan
Title:				Vice President


LICENSEE:


BIG CITY RADIO-CHI, L.L.C.
By:			BIG CITY RADIO, INC.,
			Its Managing Member


By:	/s/ Paul R. Thomson
Name:							Paul R. Thomson
Title:					Vice President

EX-10.8 10 j0989_ex10d8.htm EX-10.8

Exhibit 10.8

TIME BROKERAGE AGREEMENT

This Time Brokerage Agreement, dated as of March 17, 2003, is made by and between Simmons Lone Star Media, Ltd. (“Licensee”) and HBC Broadcasting Texas, L.P. (“Broker”).

W I T N E S S E T H:

WHEREAS, Licensee has available broadcasting time and is engaged in the business of radio broadcasting on radio station KTND(FM), licensed to Georgetown, Texas (the “Station”); and

WHEREAS, Broker desires to avail itself of Station’s broadcast time for the presentation of programming services, including the sale of advertising time; and

WHEREAS, Licensee is the holder of all licenses issued by governmental authorities used in the operation of the Station; and

WHEREAS, Licensee and Broker are parties to an Asset Purchase Agreement, of even date herewith (the “Purchase Agreement”), pursuant to which Broker and its affiliate have agreed to purchase the governmental licenses and other principal assets relating to the Station;

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

1. Facilities. Licensee agrees to make broadcasting transmission facilities available to Broker and to broadcast on the Station, or cause to be broadcast, Broker’s programs.

2. Term of Agreement. This Agreement shall commence at 12:01 a.m., Dallas, Texas time, on the Time Brokerage Date (as defined in the Purchase Agreement) and, subject to the terms and conditions of this Agreement, shall continue until the earliest of (i) 1:00 p.m., Dallas, Texas time, on the 12^th month anniversary of the Time Brokerage Date, (ii) the closing of the transactions contemplated by the Purchase Agreement or (iii) the termination of the Purchase Agreement.

3. Payments.

3.1 Amount of Payments. Broker hereby agrees to pay Licensee for the broadcast of the programs hereunder the “Monthly Sum” (defined hereinbelow), prorated (using a 30-day month) for any partial months during the term. As used herein, “Monthly Sum” shall mean $55,000.

3.2 Manner of Payments. The Monthly Sum shall be due and payable in full on the Time Brokerage Date and each subsequent monthly anniversary thereof and shall be prorated for partial months. The failure of Licensee to demand or insist upon prompt payment in accordance herewith shall not constitute a waiver of its right to do so. If Broker shall have produced and made available programming to air on the Station as provided herein and such programming does not air due to Licensee preempting such programming other than in

accordance with Section 10 or 11 below, or if for any reason Licensee is unable to broadcast such programming through no fault of Broker, or if this Agreement is terminated for any reason (other than a breach of this Agreement by Broker) prior to the end of a month, then Broker shall receive a payment credit to be determined by multiplying (i) the Monthly Sum by (ii) the ratio of the amount of time not aired to the total number of broadcast hours allotted to Broker each month pursuant to Section 5.1 below.

4. Programs. Broker shall furnish or cause to be furnished the artistic personnel and material for the programs as provided by this Agreement, and all programs shall be in accordance with the requirements and regulations of the Federal Communications Commission (“FCC”). All programs shall be prepared and presented in conformity with the regulations of the FCC. All advertising spots and promotional material or announcements shall comply with all applicable federal, state and local regulations and policies and shall be produced in accordance with quality standards established by Licensee.

5. Station Facilities and Operations.

5.1 Operation of Station. Throughout the term of this Agreement, Licensee shall make the Station available to the Broker for operation with the authorized facilities 24 hours a day, seven days a week, except for (i) at least two hours each week on Sunday morning between the hours of 7:00 a.m. and 11:00 a.m. during which Licensee will be responsible for public affairs programming dealing with issues affecting the Station’s service area and (ii) downtime occasioned by routine maintenance (which in the case of routine maintenance will be scheduled, to the extent practicable, to not exceed two hours each Monday morning between the hours of 1:00 a.m. and 5:00 a.m). Licensee will use its reasonable efforts to perform any maintenance work affecting the operation of the Station at off-peak hours. It is further understood and agreed that Licensee shall continue to retain full authority and control over operation of the Station during the course of this Agreement; to be responsible for assessment of the needs and interests of the community; and to determine that the programs presented are responsive to such needs and interests, and that all programming continues to meet all federal, state and local laws, including those that govern political broadcast time, presentation of lottery material, proper sponsor identification, and other programming in the public interest. Broker also agrees that all such programming as presented by Broker will be in full compliance with all such applicable rules and regulations. Licensee shall also continue to be responsible for maintenance of the Station’s public file in good order as required by the FCC, including timely placement of a copy of this Agreement in that file; to prepare and timely file in such file the quarterly issues/programs list as required by the FCC’s rules; to timely file with the FCC all required reports or other records as required by the FCC; and to otherwise comply in all respects with the FCC rules and regulations, including those rules and regulations regarding requests for political advertising. Broker agrees to cooperate fully in the gathering, compilation and completion of all such reports as may be required by Licensee. Broker agrees that Licensee will not owe any payment credit pursuant to Section 3.2(i) for any maintenance performed on the Station between the hours of 1:00 a.m. to 5:00 a.m., Monday through Sunday.

5.2 Interruption of Normal Operations. If the Station suffers loss or damage

of any nature to its transmission facilities which results in the interruption of service or the inability of the Station to operate with its authorized facilities, Licensee shall notify Broker, and shall undertake (or authorize Broker to undertake on Licensee’s behalf and at Licensee’s expense) such repairs as necessary to restore the full-time operation of the Station with its authorized facilities as soon as practicable.

5.3 Studio Location. Licensee shall maintain a main studio (“Main Studio”) capable of providing a broadcast quality signal to the Station’s transmission facility and located in accordance with the rules and regulations of the FCC. To facilitate delivery of programming by Broker to Licensee hereunder, Licensee hereby grants to Broker the non-exclusive right for the term of this Agreement to use the equipment located in the Main Studio and currently used by Licensee for broadcasting programs on the Station pursuant to this Agreement (the “Broadcast Equipment”). In addition, Broker shall have, and Licensee hereby grants to Broker, a nonexclusive license to enter the Main Studio for purposes of producing its programming hereunder. Such licenses shall apply only to the Station and may not be assigned by Broker. Broker shall maintain the Broadcast Equipment free and clear of liens, claims or encumbrances of any third party claiming by, through or under Broker.

5.4 Transmission Facility. Licensee shall operate the Station’s transmission facility in accordance with the authorizations issued to Licensee by the FCC.

5.5 Call Letters. Licensee hereby grants to Broker a non-exclusive license to utilize the call letters of the Station during the term of this Agreement solely for the purpose of delivering programming and selling advertising in connection therewith, in accordance with this Agreement. Broker, however, shall not be required to use such call letters. At Broker’s request and sole expense, Licensee shall submit an application for and pursue a change in the Station’s call letters, as reasonably directed by Broker.

6. Handling of Mail. Except as required to comply with FCC rules and policies, including those regarding the maintenance of the public inspection file (which shall at all times remain the responsibility of Licensee), Licensee shall not be required to receive or handle mail, cables, telegraph or telephone calls in connection with programs broadcast hereunder unless Licensee at the request of Broker has agreed in writing to do so.

7. Programming and Operations Standards. Broker understands that broadcast program content must comply with certain proscriptions including but not limited to those governing the broadcast of obscenity and indecency; presentation of contests; lottery information; credit terms; broadcast of telephone conversations; and political equal access, and covenants that any such programming supplied by Broker will be in full compliance with such restrictions. In addition, Broker will promptly notify Licensee of any violation of any such restriction that takes place and agrees to hold Licensee harmless for any damages, fines or other liability or loss that might result from any such broadcast program. Broker further agrees to cooperate fully with Licensee in complying with the FCC’s applicable rules and regulations that govern the sale and placement of political advertising.

8. Responsibility for Employees and Expenses.

8.1 Employees. Broker shall employ and be responsible for the salaries, taxes, insurance and related costs for all personnel used in the production and transmission of its programming (including without limitation salespeople, traffic personnel, board operators and programming staff). Broker agrees to abide by any and all legal provisions relating to its own employees, including any equal employment policies contained in Title VII of the Civil Rights Act of 1964 or in any other applicable federal, state or local statute or regulation. Licensee will provide and be responsible for the Station personnel specified in Section 10 hereof. All personnel shall be subject to the overall supervision of Licensee consistent with the Broker’s right to the use of the Station’s facilities as provided hereunder.

8.2 Operating Expenses. Broker shall be responsible for all costs associated with the production and delivery to the Station’s transmitter site of Broker’s programming and shall also pay for all telephone calls associated with production and listener responses, for all fees to ASCAP, BMI and SESAC, license fees and for any other copyright fees attributable to its programming broadcast or revenues generated on the Station.

8.3 Transmitter Site Expenses. Licensee shall remain responsible for the costs associated with the transmission of all programming at the Station’s transmitter site (including but not limited to rent, utilities, taxes and insurance).

9. Advertising and Program Revenues. Broker shall retain all revenues for the sale of advertising time on the programs it delivers to the Station and may sell such advertising in combination with the sale of advertising on any other broadcast stations of its choosing. Licensee shall retain the revenue from the sale of any advertising on the Station on programs not produced or delivered to it by Broker.

10. Control of Station. Notwithstanding anything to the contrary in this Agreement, Licensee shall have full authority and power over the operation of the Station during the period of this Agreement. Licensee shall provide and pay for a management level employee and another employee who shall report solely to and be accountable solely to Licensee and who shall direct the day-to-day operation of the Station. Licensee shall retain control over the policies, programming and operations of the Station, including, without limitation, the right to decide whether to accept or reject any programming or advertisements, the right to preempt any programs in order to broadcast a program deemed by Licensee to be of greater national, regional or local interest, and the right to take any other actions necessary for compliance with the laws of the United States; the State of Texas; the rules, regulations, and policies of the FCC (including the prohibition on unauthorized transfers of control); and the rules, regulations and policies of other federal governmental authorities. From time to time as requested by Licensee, Broker shall provide Licensee with information to enable Licensee to prepare records, reports and logs required by the FCC or other local, state or federal governmental agencies.

11. Special Events. Licensee reserves the right, in its discretion, to preempt any of the broadcasts of the programs referred to herein, and to use part or all of the time contracted for

herein by Broker for the broadcast of events of special importance. In all such cases, Licensee will use its best efforts to give Broker reasonable notice of its intention to preempt such broadcast or broadcasts.

12. Force Majeure. Any failure or impairment of the Station facilities or any delay or interruption in broadcasting programs, or the failure at any time to furnish facilities, in whole or in part, for broadcasting, due to acts of God, strikes, or threats thereof, force majeure, or to causes beyond the control of Licensee, shall not constitute a breach of this Agreement, and Licensee will not be liable to Broker, except to the extent allowing in each such case an appropriate payment credit for time not provided or broadcasts not carried based upon a pro rata adjustment to amounts due as specified in Section 3 calculated upon the length of time during which the failure or impairment exists or continues.

13. Right to Use the Programs. The right to use the programs produced by Broker and to authorize their use in any manner and in any media whatsoever shall be, and remain, vested solely in Broker. Broker shall retain all copyrights to programs, slogans, trade names, logos and all other rights associated with the programs produced by Broker.

14. Payola. Broker agrees that it will not accept any compensation or any kind of gift or gratuity of any kind whatsoever, regardless of its value or form, including, but not limited to, a commission, discount, bonus, materials, supplies or other merchandise, services or labor, whether or not pursuant to written contracts or agreements between Broker and merchants or advertisers, unless the payer is identified in the program as having paid for or furnished such consideration in accordance with the FCC’s requirements.

15. Compliance with Law. Broker agrees that, throughout the term of this Agreement, Broker will comply with all laws and regulations applicable in the conduct of Licensee’s business and Broker acknowledges that Licensee has not urged, counseled or advised the use of any unfair business practice. In the event that any new law or regulation is adopted which results in a material change in the terms of this arrangement (for example, but not limited to, a restriction on the number of hours which may be brokered), the parties agree to negotiate in good faith to modify this Agreement to conform as closely as possible to the interests of both Broker and Licensee and, in the event of their inability to so modify the Agreement, Broker or Licensee may without penalty terminate the Agreement on 60 days’ notice to the other, or such earlier time as the FCC may require.

16. Indemnification; Warranty. Broker will indemnify and hold Licensee harmless against all liability for libel, slander, illegal competition or trade practice, infringement of trade marks, trade names, or program titles, violation of rights of privacy, and infringement of copyrights and proprietary rights resulting from the broadcast or programming furnished by Broker. Further, Broker warrants that the broadcasting of its programs will not violate any rights of others and Broker agrees to indemnify and hold Licensee, the Station, and their respective officers, directors, agents, stockholders, employees, and subsidiaries, harmless from any and all claims, damages, liability, costs and expenses, including reasonable attorneys’ fees, arising from the broadcasting of such programs. Licensee reserves the right to refuse to broadcast any and all

programs containing matter which is, or in the reasonable opinion of Licensee may be, or which a third-party claims to be, violative of any right of theirs or which may constitute a personal attack as the term is and has been defined by the FCC. Licensee will indemnify and hold Broker harmless against any and all liability for libel, slander, illegal competition or trade practice, infringement of trade marks, trade names, or program titles, violation of rights of privacy, and infringement of copyrights and proprietary rights arising from Licensee’s preemption and broadcast of Licensee’s own programs. Further, Broker’s and Licensee’s obligation to hold each other harmless against the liabilities specified above shall survive any termination of this Agreement until the expiration of all applicable statutes of limitation. Unless an indemnifying party assumes the defense of a claim for which indemnity is sought hereunder on behalf of the indemnified party, the indemnified party shall have the right to employ its own counsel to conduct such defense (which shall be at the expense of the indemnifying party). The indemnified party shall render to the indemnifying party and its counsel such assistance as they may reasonably require in order to ensure the proper and adequate defense of any claim for which indemnity is sought hereunder. Neither party will settle any claim for which indemnity is sought or owed under this Section 16 in a manner which imposes any cost or penalty on the other party without the other party’s prior written consent.

17. Events of Default; Cure Periods and Remedies.

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

17.1.1 Non-Payment. Broker’s failure to timely pay the consideration provided for in Section 3 hereof (“Payment Default”) for a period of three business days after written notice of such non-payment.

17.1.2 Covenant Default. The failure of either party to observe a material provision hereunder for a period of thirty (30) days after written notice of such non-observance.

17.1.3 Insolvency Events. The occurrence of any of the following events:

(i) the entry of a decree or order for relief by a court having jurisdiction in the premises in respect of Broker in an involuntary case under the federal bankruptcy laws, as now or hereafter constituted, or any other applicable federal or state bankruptcy, insolvency or other similar law, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of Broker or for any substantial part of its property, or ordering the winding up or liquidation of its affairs and the continuance of any such decree or order unstayed and in effect for a period of 30 consecutive days; or

(ii) the commencement by Broker of a voluntary case under the federal bankruptcy laws, as now constituted or hereafter amended, or any other applicable federal or state bankruptcy, insolvency or other similar law, or the consent by it to the appointment to or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) of Broker or for any substantial part of its property,

or the making by Broker of any assignment for the benefit of creditors, or the admission by Broker in writing of its inability to pay its debts generally as they become due.

17.2 Termination Upon Default. If an Event of Default occurs, this Agreement shall automatically terminate (unless the non-defaulting party otherwise elects in writing), and the non-defaulting party may take all action necessary to remove Broker’s access to Licensee’s broadcasting transmission facilities and receive from the defaulting party such damages or other remedies as are available at law or at equity.

17.3 Liabilities Upon Termination. Broker shall be responsible for all liabilities, debts and obligations of Broker accrued from the purchase of air time and transmission facilities including, without limitation, accounts payable, barter agreements and unaired advertisements. Upon termination, Broker shall return to Licensee any Broadcast Equipment or other property of the Station used by Broker, its employees or agents, in substantially the same condition as such Broadcast Equipment or other property existed on the Time Brokerage Date, ordinary wear and tear excepted.

17.4 Termination upon Order of Judicial or Governmental Authority. In the event that any court of competent jurisdiction or any federal, state or local governmental authority designates a hearing with respect to the continuation or renewal of the main license held by Licensee for the operation of the Station, or orders the termination of this Agreement, Licensee shall seek administrative or judicial appeal of, or relief from, such order(s). If the FCC designates the renewal application of the Station for a hearing as a consequence of this Agreement or for any other reason, Licensee shall be responsible for its expenses incurred as a consequence of the FCC proceeding; provided however, that Broker shall cooperate and comply with any reasonable request of Licensee to assemble and provide to the FCC information relating to Broker’s performance under this Agreement. In the event of termination upon such governmental order(s), Broker shall pay to Licensee any fees due but unpaid as of the date of termination as may be permitted by such order(s), and Licensee shall reasonably cooperate with Broker to the extent permitted to enable Broker to fulfill advertising or other programming contracts then outstanding, in which event Licensee shall receive as compensation for the carriage of such programming that which otherwise would have been paid to Broker thereunder.

18. Time Brokerage Challenge. If this Agreement is challenged at the FCC, Licensee and Broker will jointly defend this Agreement. If portions of this Agreement do not thereafter receive the approval of the FCC staff, the parties shall reform this Agreement, or at Broker’s option and expense, seek reversal of the staff decision and approval from the full FCC on appeal.

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

20. No Waiver; Remedies Cumulative. No failure or delay on the part of Licensee or Broker in exercising any right or power hereunder shall operate as a waiver thereof, nor shall any

single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of Licensee and Broker herein provided are cumulative and are not exclusive of any right or remedies which it may otherwise have.

21. Construction. This Agreement shall be construed in accordance with the laws of the State of Texas, and the obligations of the parties hereto are subject to all federal, state or municipal laws or regulations now or hereafter in force and to the regulations of the FCC and all other governmental bodies or authorities presently or hereafter to be constituted.

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

23. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns; provided, however, that Broker may not assign this Agreement to any party unaffiliated with Hispanic Broadcasting Corporation without the prior written consent of Licensee.

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

25. 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 delivered 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 Broker:

c/o Hispanic Broadcasting Corporation

3102 Oak Lawn Avenue, Suite 215

Dallas, Texas 75201

Attn: President

Fax: (214) 525-7750

If to Licensee:

Simmons Media Group, LLC

515 South 700 East, #1C

Salt Lake City, Utah 84102

Attn: David E. Simmons

Fax: (801) 323-9316

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

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

28. 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.

29. 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.

30. FCC Certification. Licensee hereby certifies that it will maintain ultimate control over the Station’s facilities, including specifically control over station finances, personnel and programming. Notwithstanding the foregoing, Licensee shall have no power to set the terms and conditions of employment for on-air personnel utilized for or in connection with programming broadcast on the Station originated by or in conjunction with Broker. Broker hereby certifies that this Agreement complies with Section 73.3555(a)(1) of the FCC’s rules, 47 C.F.R. 73.3555(a)(1). In addition, neither Broker nor any person or entity associated with Broker shall have the ability to set the terms and conditions for on-air personnel utilized for programming originated by Licensee and broadcast on the Station during the term of this Agreement.

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

Simmons Lone Star Media, Ltd.
By Simmons Media Group, LLC (general partner)


By:	/s/ David E. Simmons
	David E. Simmons, Manager


HBC Broadcasting Texas, L.P.
By HBC GP Texas, Inc. (general partner)


By:		/s/ Jeffrey T. Hinson
		Jeffrey T. Hinson, Senior Vice President

FORM 10-Q

HISPANIC BROADCASTING CORPORATION

MARCH 31, 2003

INDEX

PART I.

FINANCIAL INFORMATION

PART II.

OTHER INFORMATION

HISPANIC BROADCASTING CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

HISPANIC BROADCASTING CORPORATION AND SUBSIDIARIES

HISPANIC BROADCASTING CORPORATION AND SUBSIDIARIES

MARCH 31, 2003

Forward Looking Statements