SPANISH BROADCASTING SYSTEM INC, S-1/A, 1999-10-06

SPANISH BROADCASTING SYSTEM INC
S-1/A, 1999-10-06
RADIO BROADCASTING STATIONS

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 6, 1999

REGISTRATION NO. 333-85499
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- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

AMENDMENT NO. 3

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------

SPANISH BROADCASTING SYSTEM, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S> <C> <C>
DELAWARE 4832 13-3827791
(STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>

<TABLE>
<S> <C>
RAUL ALARCON, JR.
3191 CORAL WAY 3191 CORAL WAY
MIAMI, FLORIDA 33145 MIAMI, FLORIDA 33145
(305) 441-6901 (305) 441-6901
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
EXECUTIVE OFFICES)
</TABLE>

------------------------
COPIES TO:

<TABLE>
<S> <C>
JASON L. SHRINSKY, ESQ. BONNIE A. BARSAMIAN, ESQ.
WILLIAM E. WALLACE, JR., ESQ. G. DAVID BRINTON, ESQ.
KAYE, SCHOLER, FIERMAN, HAYS & HANDLER, LLP ROGERS & WELLS LLP
425 PARK AVENUE 200 PARK AVENUE
NEW YORK, NEW YORK 10022 NEW YORK, NEW YORK 10166
(212) 836-8000 (212) 878-8000
</TABLE>

------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.

If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------
CALCULATION OF REGISTRATION FEE
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<TABLE>
<S> <C> <C>
TITLE OF PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE REGISTERED AGGREGATE OFFERING PRICE(1) REGISTRATION FEE(2)
- ---------------------------------------------------------------------------------------------------------------------------
Class A Common Stock.................... $411,335,680 $114,351.32
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</TABLE>

(1) Includes shares issuable upon exercise of an over-allotment option granted
to the underwriters.

(2) Computed in accordance with Rule 457(o) under the Securities Act of 1933.

------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.

- --------------------------------------------------------------------------------
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<PAGE> 2

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

Subject to Completion, dated October 6, 1999

PROSPECTUS

22,355,200 Shares
SPANISH BROADCASTING SYSTEM, INC.
Class A Common Stock
[SBS LOGO]
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This is our initial public offering of shares of Class A Common Stock. We are
offering 17,500,000 shares of our Class A Common Stock and the selling
stockholders are offering 4,855,200 shares of Class A Common Stock. We will
receive no proceeds from the sale of Class A Common Stock by the selling
stockholders.

We are authorized to issue Class A Common Stock and Class B Common Stock. The
rights of each class are essentially identical, except each share of Class A
Common Stock entitles its holder to one vote per share and each share of Class B
Common Stock entitles its holder to ten votes per share.

No public market currently exists for our Class A Common Stock. Our shares of
Class A Common Stock have been approved for quotation on The Nasdaq Stock
Market's National Market under the symbol "SBSA," subject to official notice of
issuance. The anticipated price range of the Class A Common Stock will be $15.00
to $17.00 per share.

INVESTING IN OUR CLASS A COMMON STOCK INVOLVES RISKS. RISK FACTORS BEGIN ON PAGE
12.

<TABLE>
<CAPTION>
PER SHARE TOTAL
--------- ------
<S> <C> <C>
Public Offering Price....................................... $ $
Underwriting Discount....................................... $ $
Proceeds to SBS............................................. $ $
Proceeds to Selling Stockholders............................ $ $
</TABLE>

We have granted the underwriters a 30-day option to purchase up to 3,353,280
additional shares of Class A Common Stock on the same terms as set forth above
to cover over-allotments, if any.

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

Lehman Brothers Inc., on behalf of the underwriters, expects to deliver the
shares of Class A Common Stock on or about November , 1999.

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LEHMAN BROTHERS
MERRILL LYNCH & CO.
CIBC WORLD MARKETS

OCTOBER , 1999

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[ARTWORK]
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TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
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<S> <C>
Summary............................ 1
Risk Factors....................... 12
Use of Proceeds.................... 19
Dividend Policy.................... 20
Dilution........................... 21
Capitalization..................... 22
Selected Historical Consolidated
Financial Information............ 23
Management's Discussion and
Analysis of Financial Condition
and Results of Operations........ 26
Business........................... 37
Management......................... 62
Executive Compensation............. 64
Principal Stockholders............. 69
</TABLE>

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Selling Stockholders............... 70
Certain Relationships and Related
Transactions..................... 72
Description of Capital Stock....... 74
Description of Indebtedness........ 80
Shares Eligible for Future Sale.... 83
Certain Federal Income Tax
Considerations................... 85
Underwriting....................... 89
Legal Matters...................... 92
Experts............................ 92
Where You Can Find More
Information...................... 93
Index to Consolidated Financial
Statements....................... F-1
</TABLE>

ABOUT THIS PROSPECTUS

- - You should rely only on the information contained in this prospectus or to
which we have referred you. We have not, and our underwriters have not,
authorized anyone to provide you with different information. If anyone
provides you with different or inconsistent information, you should not rely
on it. We are not, and the underwriters are not, making an offer to sell these
securities in any jurisdiction where the offer or sale is not permitted. The
information in this prospectus may only be accurate on the date of this
prospectus.

- - You should read the entire prospectus before making an investment decision.
The information in this prospectus may not contain all of the information that
may be important to you.

- - All references to "we", "us", "our", "SBS" or "our Company" in this prospectus
mean Spanish Broadcasting System, Inc., a Delaware corporation, and all
entities owned or controlled by Spanish Broadcasting System, Inc. and, if
prior to 1994, refer to our predecessor parent company SBS-NJ.

- - All references to "SBS-NJ" in this prospectus mean our predecessor parent
company Spanish Broadcasting System, Inc., a New Jersey corporation.

- - Unless otherwise indicated, the titles of each officer are those which each
officer will hold upon completion of this offering.

- - All references to "FCC" in this prospectus refer to the Federal Communications
Commission.

- - When citing Arbitron(C) Survey data, all references to the "United States"
include the 50 states, the District of Columbia and the Commonwealth of Puerto
Rico.

- - Unless otherwise indicated, all references to "U.S. Hispanic", "Hispanic
markets in the United States" and similar phrases in this prospectus include
Hispanics in the United States and the Commonwealth of Puerto Rico.

- - All references to "N/A" in this prospectus mean "not available."

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<PAGE> 5

- - The term "broadcast cash flow" means operating income before depreciation,
amortization and corporate expenses. Broadcast cash flow should not be
considered in isolation from, or as a substitute for, net income or cash flow
and other consolidated income or cash flow statement data or as a measure of
our profitability or liquidity. Although broadcast cash flow is not a measure
of performance calculated in accordance with generally accepted accounting
principles, broadcast cash flow is widely used in the broadcasting industry as
a measure of a broadcasting company's operating performance.

- - The term "EBITDA" means earnings before extraordinary items, gain on sale of
AM stations, net interest expense, income taxes, depreciation, amortization
and other income or expenses. We have included information concerning EBITDA
in this prospectus because it is used by some investors as a measure of a
company's ability to service its debt obligations. Although EBITDA is not a
measure of performance calculated in accordance with generally accepted
accounting principles, EBITDA is widely used in the broadcasting industry as a
measure of a broadcasting company's operating performance.

- - The term "after-tax cash flow" means income before income tax benefit
(expense) and extraordinary items, minus net gain on sale of AM stations (net
of tax) and the current income tax provision, plus depreciation and
amortization expense. Although after-tax cash flow is not a measure of
performance calculated in accordance with generally accepted accounting
principles, after-tax cash flow is widely used in the broadcasting industry as
a measure of a broadcasting company's operating performance.

- - On September 29, 1999, we filed our third amended and restated certificate of
incorporation which resulted in (1) the redesignation of our previously
outstanding shares of Class A Common stock into shares of Class B Common
Stock, (2) a 50-to-1 stock split of our Class B Common Stock, and (3) a
reduction in the par value of our Class A Common Stock and Class B Common
Stock from $0.01 per share to $0.0001 per share. All financial information has
been restated to reflect this redesignation, stock split and change in par
value.

- - Our fiscal year is the twelve months ended on the last Sunday in September.

- - Unless we tell you otherwise, the information in this prospectus assumes that
the underwriters will not exercise their over-allotment option to purchase up
to 3,353,280 additional shares of Class A Common Stock.

- - We operate a Web site at www.lamusica.com. The information on our Web site is
not part of this prospectus.

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<PAGE> 6

SOURCES OF INFORMATION

- - Unless otherwise indicated, all market revenue share and revenue rankings in
this prospectus are based on information for calendar year 1999 contained in
James H. Duncan, Jr., Duncan's Radio Market Guide (1999 ed.), Miller, Kaplan,
Arase & Co., Certified Public Accountants, Executive Summary, June 1999
(Miller Kaplan), Hungerford Radio Revenue Reports, 1999 (Hungerford) and BIA
Research, Inc.'s, Investing in Radio, 1999 Market Report (BIA Research).

- - Revenue rank and revenue share information are reported cumulatively for each
calendar quarter and, therefore, include the period from January 1 through the
date indicated.

- - Unless otherwise indicated, rank in audience share data in this prospectus is
based on the "12+ average quarter hour share." This refers to the number of
persons, aged 12 and over, who listen to a radio station for at least five
minutes in a quarter-hour segment Monday through Sunday, 6:00 a.m. to midnight
in the most recent survey period (Spring 1999) as reported by the Arbitron(C)
Company, Arbitron(C) Radio Market Reports (copyright 1999). Further, and
unless otherwise noted, references in this prospectus to the rank of a station
among all the radio stations within a market have been determined with
reference to all radio stations rated by Arbitron(C) within the applicable
market.

- - Arbitron(C) does not rank radio stations. All references in this prospectus to
radio station rankings from Arbitron(C) Surveys reflect our analysis of
information published by Arbitron(C).

- - Unless otherwise indicated, all references to the demographic statistics in
this prospectus are derived from the Strategy Research Corporation -- 1998
United States Hispanic Market Study, the 1990 and 1997 reports by the Bureau
of the U.S. Census and Hispanic Business Magazine. This market study is
sponsored by advertisers and other businesses targeting the Hispanic market,
including SBS and many of our principal competitors.

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SUMMARY

This summary contains a general discussion of our business, this offering
and summary financial information. It does not contain all the information that
may be important to you. You should read the entire prospectus and the documents
to which we have referred you, including the financial data and the information
set forth under the heading "Risk Factors" for a more complete understanding of
Spanish Broadcasting System, Inc. and this offering.

OUR COMPANY

INTRODUCTION

Spanish Broadcasting System, Inc. was founded in 1983 and is the second
largest Spanish-language radio broadcasting company in the United States. We
currently own and operate 13 FM radio stations and have agreed to purchase eight
additional stations in Puerto Rico. We also have entered into a memorandum of
understanding to sell our two radio stations located in the Florida Keys. Eleven
of our stations are located in six of the largest Hispanic markets in the United
States, including Los Angeles, Puerto Rico, New York, Miami, Chicago and San
Antonio. Our radio stations reach over 51% of the U.S. Hispanic population. Our
WSKQ-FM station in New York is ranked in the Spring 1999 Arbitron(C) ratings as
the number one station in its target demographic group (men and women, ages
25-54).

Our strategy is to maximize the profitability of our radio station
portfolio and to expand in our existing markets and into additional markets that
have a significant Hispanic population. We believe that the favorable
demographics of the U.S. Hispanic population and the rapid increase in
advertising targeting Hispanics provide us with significant opportunities for
growth. We also believe that we have competitive advantages in the radio
industry due to our focus on formats targeting U.S. Hispanic audiences and our
skill in programming and marketing to these audiences.

Our Internet strategy complements our existing business and enables us to
capitalize on our U.S. Hispanic market expertise. We recently purchased 80% of
JuJu Media, Inc., the owner of LaMusica.com, a bilingual Spanish-English
Internet Web site and on-line community that focuses on the U.S. Hispanic
market. LaMusica.com is a provider of original information and interactive
content related to Latin music, entertainment, news and culture. LaMusica.com
provides our advertisers with an additional means of reaching the U.S. Hispanic
consumer markets and is a growing revenue source for us.

Due to the successful implementation of our strategy, we have achieved
significant growth over the last two years. From the twelve-month period ended
June 29, 1997 to the twelve-month period ended June 27, 1999, our:

- net revenues grew at a compound annual rate of 29.3%, from $55.0 million
to $91.9 million;

- broadcast cash flow grew at a compound annual rate of 35.8%, from $26.5
million to $48.9 million; and

- EBITDA grew at a compound annual rate of 35.5%, from $21.5 million to
$39.5 million.

SBS is led by Mr. Raul Alarcon, Jr., who has been our Chief Executive
Officer since June 1994, President and a director since October 1985 and who
will become Chairman of the Board of Directors upon completion of this offering.
The Alarcon family has been involved in

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Spanish-language radio broadcasting since the 1950's, when Mr. Pablo Raul
Alarcon, Sr., our Chairman Emeritus and a member of our board of directors,
established his first radio station in Camaguey, Cuba. Members of our senior
management team, on average, have over 15 years of experience in
Spanish-language media and radio broadcasting.

We are a corporation organized under the laws of the State of Delaware. Our
executive offices are located at 3191 Coral Way, Miami, Florida 33145, and our
telephone number is (305) 441-6901.

MARKET OPPORTUNITY

Our radio stations target the largest Hispanic markets in the United
States, including Puerto Rico. We believe that these markets have significant
growth potential for the following reasons:

- HISPANIC POPULATION GROWTH. The U.S. Hispanic population, approximately
34.3 million people, is the fastest growing segment of the U.S.
population, growing at approximately four times the rate of the
population as a whole. By 2005, Hispanics are projected to become the
largest minority group in the United States and by 2010, the second
largest Spanish-speaking population in the world.

- SIGNIFICANT GEOGRAPHIC CONCENTRATION. The U.S. Hispanic population is
highly concentrated with over 62% of U.S. Hispanics residing in the top
ten U.S. Hispanic markets. Because our stations are located in six of
these markets, advertisers can reach the U.S. Hispanic population more
cost effectively by advertising on our stations rather than advertising
through competing national media.

- ATTRACTIVE DEMOGRAPHIC GROUP FOR ADVERTISERS. The U.S. Hispanic
population accounted for estimated consumer spending of $380.0 billion in
1998 (7.4% of total U.S. consumer spending), an increase of 78.4% since
1990. By 2000, U.S. Hispanics are expected to account for estimated
consumer spending of $457.8 billion (8.2% of total U.S. consumer
spending), and by 2010 are expected to account for estimated consumer
spending of $965.3 billion (12% of total U.S. consumer spending), far
outpacing the expected growth of overall U.S. consumer spending during
the same period.

- USE OF SPANISH LANGUAGE. Approximately 69% of U.S. Hispanics speak
Spanish at home and we believe this percentage will remain relatively
constant for the near future. We believe that the continued use of
Spanish by U.S. Hispanics and their preference for Spanish-language music
will contribute to the continued popularity of Spanish-language radio as
a source of entertainment, information and culture for the U.S. Hispanic
population.
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- INTERNET USAGE. Approximately 36% of the U.S. Hispanic population
(excluding Puerto Rico) currently accesses the Internet, a percentage
which we expect will increase over the next few years. We believe the
Internet represents a complementary medium for our advertisers to reach
our target audience.

SBS AND OUR MARKETS

The table below lists the six markets where we currently own and operate
radio stations in the United States.

<TABLE>
<CAPTION>
1999
HISPANIC AUDIENCE TOTAL TOTAL ANNUAL MARKET 1998 POPULATION
MARKET SHARE AUDIENCE REVENUE RADIO RANKING --------------------
NUMBER AUDIENCE RANK SHARE % SHARE % REVENUE BY SIZE OF TOTAL HISPANIC
OF SHARE (BY TARGET (GENERAL (GENERAL ALL MARKETS HISPANIC (IN % OF
MARKET STATIONS RANK AUDIENCE) MARKET) MARKET) ($ MILLIONS) POPULATION MILLIONS) TOTAL
- ------ -------- --------- ---------- -------- -------- ------------ ---------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Los Angeles.......... 1 3 8 3.0 2.7 $727 1 16.3 38.7
Puerto Rico.......... 3 N/A 2, 12, 25 6.7 N/A 90 2 3.8 99.6
New York............. 2 1, 2 1, 11 8.0 7.3 688 3 20.1 18.1
Miami................ 3 3, 4, 5 7, 10, 14 9.4 11.7 233 4 3.7 38.1
Chicago.............. 1 1 7 2.4 2.6 471 6 9.4 12.7
San Antonio.......... 1 3 8 2.5 2.7 78 8 2.1 51.6
--
Total................ 11
</TABLE>

- Audience share and audience share rank data were obtained from the Spring
1999 Arbitron(C) Survey.

- Estimated revenue share information for all markets other than Chicago
was obtained from BIA Research and Miller Kaplan data. Revenue share
information for the Chicago market was obtained from Hungerford data.

- Population data were derived from the Strategy Research
Corporation -- 1998 U.S. Hispanic Market Report and 1990 and 1997
population reports from the Bureau of the U.S. Census.

- We currently own three radio stations in Puerto Rico, WCMA-FM (formerly
WDOY-FM), WMEG-FM and WEGM-FM. WMEG-FM and WEGM-FM are simulcast, but
have separate Arbitron(C) ratings. We have agreed to purchase eight
additional radio stations in Puerto Rico.

- We own and operate one radio station in each of Key West and Key Largo,
WVMQ-FM and WZMQ-FM, respectively, which are simulcast but are not rated
by Arbitron(C). We have entered into a memorandum of understanding to
sell these stations to Mr. Alarcon, Sr. upon completion of this offering.
Information with respect to these stations is not included in this table.

BUSINESS STRATEGY

We focus on maximizing the profitability of our radio station portfolio by
strengthening the performance of our existing radio stations and making
additional strategic station acquisitions in both our existing markets and in
new markets that have a significant Hispanic population. In addition, we are
implementing an Internet strategy in order to develop new revenue sources.
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OPERATING STRATEGY. Our operating strategy focuses on maximizing our radio
stations' appeal to our audience and our advertisers while minimizing operating
expenses, in order to grow revenue and cash flow. To achieve these goals, we
focus on:

- providing high-quality Spanish-language programming;

- retaining strong local management teams;

- utilizing aggressive sales efforts;

- controlling operating costs;

- making effective use of promotions and special events; and

- maintaining strong community involvement.

ACQUISITION STRATEGY. Our acquisition strategy is to acquire radio
stations in the largest U.S. Hispanic markets. We consider acquisitions of
stations in our existing markets, as well as acquisitions in other markets with
a large Hispanic population where we can maximize our revenues through
aggressive sales to U.S. Hispanic and general market advertisers. These
acquisitions may include stations that do not currently target the U.S. Hispanic
market, but which we believe can be successfully reformatted.

INTERNET STRATEGY. Our Internet strategy is designed to complement our
existing business and to enable us to capitalize on our U.S. Hispanic market
expertise. The core of our strategy is LaMusica.com, an Internet Web site and
on-line community focused on the U.S. Hispanic market. This Web site offers all
of our radio stations' broadcasts through the use of audio streaming technology
and will provide our advertisers with a complementary means of reaching their
target audience.

PENDING TRANSACTIONS

PURCHASE OF ADDITIONAL PUERTO RICO STATIONS. On September 22, 1999, we
entered into an agreement to purchase all of the outstanding capital stock of
nine subsidiaries of Chancellor Media Corporation of Los Angeles. The companies
we have agreed to purchase own and operate eight radio stations in Puerto Rico:
WIOA-FM, WIOB-FM, WIOC-FM, WCOM-FM, WZMT-FM, WZNT-FM, WOYE-FM, and WCTA-FM. The
purchase price we have agreed to pay for these companies is $90.0 million. In
connection with this acquisition, we have made an initial nonrefundable deposit
of $10.0 million. The agreement contains customary representations and
warranties, and the closing of our acquisition of these companies is subject to
the satisfaction of certain customary conditions, including receipt of
regulatory approval from the FCC. We expect to finance the purchase of these
companies from a combination of bank borrowings and cash on hand. Prior to the
closing of this acquisition (but following the expiration of the applicable
waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended), we intend to operate these stations under a local marketing
agreement pursuant to which we will pay a monthly fee in exchange for the
exclusive right to program and sell commercial announcements for each of the
stations. We expect to close our acquisition of these companies by the end of
December 1999. We cannot assure you, however, that we will be able to complete
the acquisition of these companies during the expected time frame or at all.

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According to financial information provided to us by Chancellor Media
Corporation of Los Angeles, these companies had the following financial results:

- Net revenues of $6.7 million for the six months ended June 30, 1999
(unaudited); and

- Broadcast cash flow of $2.2 million for the six months ended June 30,
1999 (unaudited).

SALE OF FLORIDA KEYS STATIONS. We have entered into a memorandum of
understanding with Mr. Alarcon, Sr., our Chairman Emeritus and a member of our
board of directors for the sale by us of the assets and liabilities of radio
station WVMQ-FM operating in Key West, Florida and radio station WZMQ-FM
operating in Key Largo, Florida. The sale price to be paid by Mr. Alarcon, Sr.
for these stations is $700,000. The definitive agreement will contain customary
representations, warranties and indemnities, and the closing of the sale of
these stations will be subject to the satisfaction of certain conditions,
including approval from the FCC, the completion of this offering and the receipt
by Mr. Alarcon, Sr. of his portion of the proceeds of this offering as a selling
stockholder. We cannot assure you that the sale of these stations will occur
during the expected time frame or at all.

These two stations had the following financial results:

- Net revenues of $165,873 for the nine months ended June 27, 1999
(unaudited) and $8,712 for the fiscal year ended September 28, 1998
(unaudited); and

- Negative broadcast cash flow of $351,666 for the nine months ended June
27, 1999 (unaudited) and negative broadcast cash flow of $324,219 for the
fiscal year ended September 28, 1998 (unaudited).

CONCURRENT SENIOR SUBORDINATED NOTES OFFERING AND FINANCING PLAN

The net proceeds we will receive from this offering and the concurrent
offering of $235.0 million aggregate principal amount of our senior subordinated
notes due 2009 are estimated to be approximately $260.8 million and $227.0
million, respectively. We will not receive any proceeds from the sale of Class A
Common Stock by the selling stockholders. This offering of our Class A Common
Stock is not conditioned upon any other offering. The senior subordinated notes
offering is conditioned upon the completion of this offering. We have entered
into a commitment letter for the arrangement of financing in an amount of up to
$200 million with Lehman Commercial Paper Inc., as administrative agent and
Lehman Brothers Inc., as sole lead arranger and book running manager. This
financing is expected to consist of senior credit facilities including: (1) a
$50.0 million six-year revolving credit facility, maturing in 2005, and (2) a
$150.0 million six-year delayed draw (15-months to draw) senior term loan
facility, maturing in 2005. The senior credit facilities are conditioned upon,
among other things, (1) the execution of definitive documentation on or before
November 12, 1999 in form and substance satisfactory to the senior lenders, (2)
the completion of this offering and the senior subordinated notes offering, and
(3) the redemption of our preferred stock.

We intend to use the net proceeds from this offering, the concurrent senior
subordinated notes offering and the repayment of stockholder loans to (1) redeem
our preferred stock at 105% of aggregate liquidation preference, (2) repurchase
our 11% notes and 12 1/2% notes at approximately 111% and 114% of their par
value, respectively, pursuant to the tender offers and consent solicitations we
commenced on September 30, 1999, (3) purchase an annuity for two of our retiring
executives at an estimated cost of approximately $10.6 million, and (4) for
general

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corporate purposes. We cannot assure you that we will complete the concurrent
senior subordinated notes offering or the senior credit facilities on terms that
are favorable to us, or at all or that any or all of the 11% notes and 12 1/2%
notes will be tendered or the requisite consents achieved. This prospectus
relates only to the offering of our Class A Common Stock and not to any other
securities. If only this offering of our Class A Common Stock is completed, we
would use the net proceeds from this offering, the repayment of stockholder
loans and cash on hand to redeem our outstanding preferred stock and purchase an
annuity for two of our retiring executives. The following table presents the
sources and uses of funds (1) pro forma for this offering, and (2) pro forma as
adjusted for this offering and the senior subordinated notes offering:

<TABLE>
<CAPTION>
PRO FORMA FOR THIS PRO FORMA AS ADJUSTED
OFFERING FOR BOTH OFFERINGS
------------------ ---------------------
(IN THOUSANDS) (IN THOUSANDS)
<S> <C> <C>
SOURCES OF FUNDS:
This offering............................................ $280,000 $280,000
Senior subordinated notes offering....................... -- 235,000
Repayment of loans by stockholders....................... 3,019 3,019
Cash on hand............................................. 12,359 --
-------- --------
Total............................................. $295,378 $518,019
======== ========
USES OF FUNDS:
Redemption of preferred stock............................ $265,611 $265,611
Annuity for retiring executives.......................... 10,567 10,567
Repurchase of our 11% notes and 12 1/2% notes............ -- 195,952
General corporate purposes............................... -- 18,639
Estimated fees and expenses.............................. 19,200 27,250
-------- --------
Total............................................. $295,378 $518,019
======== ========
</TABLE>

6
<PAGE> 13

THIS OFFERING

Class A Common Stock offered
by SBS(1)..................... 17,500,000 Total shares offered by SBS

Class A Common Stock offered
by selling stockholders....... 4,855,200 Total shares offered by selling
stockholders

Common stock to be outstanding
after this offering(1)...... 22,355,200 shares of Class A Common Stock
34,593,350 shares of Class B Common Stock

Voting Rights................. Holders of Class A Common Stock are entitled to
one vote per share. Holders of Class B Common
Stock are entitled to ten votes per share. Our
Class B Common Stock is convertible at the
option of its holder into an equal number of
shares of Class A Common Stock. Class B Common
Stock automatically converts to Class A Common
Stock, on a share-for-share basis, upon
transfer to any entity or person other than an
affiliate of a holder of shares of Class B
Common Stock. After this offering, our Chairman
of the Board of Directors and Chief Executive
Officer will beneficially own shares of Class B
Common Stock having approximately 71% of the
combined voting power of the outstanding shares
of common stock.

Other Rights.................. Except as to voting and conversion rights, each
class of common stock has the same rights.

Use of Proceeds............... We estimate that the net proceeds we will
receive from this offering will be
approximately $260.8 million, based on an
offering price at the mid-point of the range
stated on the cover page of this prospectus. We
will not receive any proceeds from the Class A
Common Stock sold by the selling stockholders
which are estimated to be $77.7 million. This
offering of our Class A Common Stock is not
conditioned upon any other offering. We
estimate that the net proceeds from the
concurrent senior subordinated notes offering
will be approximately $227.0 million. We intend
to use the net proceeds of these offerings and
the repayment of stockholder loans to (1)
redeem our preferred stock at 105% of aggregate
liquidation preference, (2) repurchase our 11%
notes and 12 1/2% notes at approximately 111%
and 114% of their par value, respectively,
pursuant to the tender offers and consent
solicitations we commenced on September 30,
1999, (3) purchase an annuity for two of our
retiring executives at an estimated cost of
approximately $10.6 million, and (4) for
general corporate purposes. The amounts for
redemption of preferred stock and repurchase of
our 11% notes and 12 1/2% notes, assume that
such events will occur on December 1, 1999 and
November 2, 1999, respectively. If only our
Class A

7
<PAGE> 14

Common Stock offering is completed, then we
would use the net proceeds of this offering,
the repayment of stockholder loans and a
portion of our current cash on hand to redeem
our outstanding preferred stock and purchase
the annuity for two of our retiring executives.

Nasdaq National Market
symbol........................ "SBSA"

- ---------------
(1) Excludes 3,353,280 shares of Class A Common Stock that may be issued by us
to cover over-allotment shares, if any.
8
<PAGE> 15

SUMMARY HISTORICAL AND PRO FORMA CONSOLIDATED
FINANCIAL INFORMATION
(IN THOUSANDS EXCEPT RATIOS, SHARES OUTSTANDING AND PER SHARE DATA)

The following tables contain summary historical financial information for
each of the fiscal years in the three-year period ended September 27, 1998 and
the nine months ended June 27, 1999 derived from our audited consolidated
financial statements, which have been audited by KPMG LLP, independent certified
public accountants. The tables also contain summary unaudited historical
financial information for the nine months ended June 28, 1998 and summary
unaudited pro forma financial information.

<TABLE>
<CAPTION>
NINE MONTHS ENDED
------------------------------
PRO FORMA AS
PRO FORMA FOR ADJUSTED FOR
FISCAL YEAR ENDED NINE MONTHS ENDED THIS OFFERING BOTH OFFERINGS
------------------------------------ ----------------------- ------------- --------------
9/29/96 9/28/97 9/27/98 6/28/98 6/27/99 6/27/99 6/27/99
---------- ---------- ---------- ---------- ---------- ------------- --------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Gross revenues.................. $ 55,338 $ 67,982 $ 86,766 $ 62,099 $ 80,437 $ 80,437 $ 80,437
Less: agency commissions........ 6,703 7,972 10,623 7,508 10,082 10,082 10,082
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net revenues.................. 48,635 60,010 76,143 54,591 70,355 70,355 70,355
Station operating expenses...... 27,876 31,041 39,520 28,298 31,782 31,782 31,782
Depreciation and amortization... 4,556 7,619 8,877 6,867 7,223 7,223 7,223
Corporate expenses.............. 3,748 5,595 6,893 5,122 7,658 7,658 7,658
---------- ---------- ---------- ---------- ---------- ---------- ----------
Operating income.............. 12,455 15,755 20,853 14,304 23,692 23,692 23,692
Interest expense, net........... (16,533) (22,201) (20,860) (16,002) (15,736) (15,736) (15,997)
Other income (expense), net..... (1,574) (791) (213) -- (485) (485) (485)
Gain on sale of AM stations..... -- -- 36,242 36,247 -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income (loss) before income
taxes and extraordinary
items....................... (5,652) (7,237) 36,022 34,549 7,471 7,471 7,210
Income tax expense (benefit).... (1,166) (2,715) 15,624 13,820 3,177 3,177 3,066
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income (loss) before
extraordinary items......... (4,486) (4,522) 20,398 20,729 4,294 4,294 4,144
Extraordinary gain (loss) net of
income taxes.................. -- (1,647) (1,613) (1,613) -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income (loss)............. $ (4,486) $ (6,169) $ 18,785 $ 19,116 $ 4,294 $ 4,294 $ 4,144
========== ========== ========== ========== ========== ========== ==========
Dividends on preferred stock.... (2,994) (17,044) (30,270) (22,391) (25,951) -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income (loss) applicable
to common stock............. $ (7,480) $ (23,213) $ (11,485) $ (3,275) $ (21,657) $ 4,294 $ 4,144
========== ========== ========== ========== ========== ========== ==========
Dividends per share on common
stock......................... $ -- $ -- $ 0.11 $ 0.11 $ -- $ -- $ --
========== ========== ========== ========== ========== ========== ==========
Earnings (loss) per common
share:
Basic and diluted (before
extraordinary item)......... $ (0.25) $ (0.71) $ (0.33) $ (0.06) $ (0.68) $ 0.09 $ (0.08)
Basic and diluted............. $ (0.25) $ (0.77) $ (0.38) $ (1.11) $ (0.68) $ 0.09 $ (0.08)
Weighted average common shares
outstanding:
Basic and diluted............. 30,333,400 30,333,400 30,333,400 30,333,400 31,629,918 49,129,918 49,129,918
OTHER FINANCIAL DATA:
Broadcast cash flow............. $ 20,759 $ 28,969 $ 36,623 $ 26,293 $ 38,573 $ 38,573 $ 38,573
Broadcast cash flow margin...... 42.7% 48.3% 48.1% 48.2% 54.8% 54.8% 54.8%
EBITDA.......................... $ 17,011 $ 23,374 $ 29,730 $ 21,171 $ 30,915 $ 30,915 $ 30,915
After-tax cash flow............. 70 3,097 7,530 5,848 11,517 11,517 11,367
Capital expenditures............ 3,811 2,022 1,645 1,290 1,684 1,684 1,684
</TABLE>

<TABLE>
<CAPTION>
TWELVE MONTHS ENDED
---------------------------------------
PRO FORMA AS
PRO FORMA ADJUSTED FOR
FOR THIS OFFERING BOTH OFFERINGS
----------------- --------------
6/27/99 6/27/99
----------------- --------------
(UNAUDITED)
<S> <C> <C>
Ratio of total debt to EBITDA............................... 4.38x 6.10x
Ratio of EBITDA to interest expense, net.................... 1.92x 1.89x
</TABLE>

9
<PAGE> 16

- - Our summary historical consolidated financial data should be read in
conjunction with our historical consolidated financial statements as of and
for each of the fiscal years in the three-year period ended September 27, 1998
and for the nine months ended June 27, 1999, the related notes and independent
auditor's report included in this prospectus. For additional information, see
the financial section of this prospectus and "Management's Discussion and
Analysis of Financial Condition and Results of Operations."

- - The financial information for the nine months ended June 28, 1998 is
unaudited, but in our opinion reflects all adjustments (which include any
normal recurring adjustments) necessary for a fair representation of the
financial information.

- - Operating results for the nine months ended June 27, 1999 are not necessarily
indicative of the results that may be expected for the fiscal year ended
September 26, 1999. Our summary unaudited pro forma consolidated financial
information does not purport to represent what our results of operations would
actually have been had the transactions described below occurred on the dates
indicated or to project our results of operations for any future period or
date.

- - The pro forma amounts for the period ended June 27, 1999, in the column "Pro
Forma for this Offering" are adjusted to give effect to (1) this offering, (2)
the redemption of all of our outstanding preferred stock at 105% of aggregate
liquidation preference, (3) the repayment of the loans receivable from two of
our selling stockholders with the net proceeds that such selling stockholders
will receive from this offering, as if they had occurred as of the beginning
of the period, and (4) the purchase of an annuity for two of our retiring
executives. These pro forma amounts do not reflect (a) the impact to net
income available to common stockholders resulting from the redemption of our
preferred stock at a premium and (b) the impact to net income resulting from
the purchase of an annuity for two of our retiring executives.

- - The pro forma amounts for the period ended June 27, 1999, in the column "Pro
Forma As Adjusted for Both Offerings" are adjusted to give effect to the
transactions described above and further adjusted for the offering of
approximately $235.0 million aggregate principal amount of senior subordinated
notes due 2009 at an estimated interest rate of 9 1/4% and the repurchase of
our 11% notes and 12 1/2% notes at approximately 111% and 114% of their par
value, respectively, pursuant to the tender offers and consent solicitations
we commenced on September 30, 1999, as if they had occurred as of the
beginning of the period. The pro forma interest expense for the period ended
June 27, 1999 is based on a current estimated interest rate of 9 1/4%. If the
actual interest rate in the offering varies by 1/8%, the effect on pro forma
interest expense for the nine months ended June 27, 1999 would be
approximately $0.2 million. These pro forma amounts do not reflect items (a)
and (b) in the paragraph above and the extraordinary loss on extinguishment of
debt including the write-off of related deferred financing costs, which we
will record as a result of repurchasing the 11% notes and 12 1/2% notes at a
premium.

- - On September 29, 1999, we filed a third amended and restated certificate of
incorporation which resulted in (1) the redesignation of our previously
outstanding shares of Class A Common Stock into shares of Class B Common
Stock, (2) a 50-to-1 stock split of our Class B Common Stock and (3) a
reduction in the par value of our Class A Common Stock and Class B Common
Stock from $0.01 per share to $0.0001 per share. All financial information has
been restated to reflect this redesignation, stock split and change in par
value.

data or as a measure of our profitability or liquidity. Although broadcast
cash flow is not a measure of performance calculated in accordance with
generally accepted accounting principles, broadcast cash flow is widely used
in the broadcasting industry as a measure of a broadcasting company's
operating performance.

- - The term "EBITDA" means earnings before extraordinary items, gain on sale of
AM stations, net interest expense, income taxes, depreciation, amortization
and other income or expense. We have included information concerning EBITDA in
this prospectus because it is used by some investors as a measure of a
company's ability to service its debt obligations. Although EBITDA is not a
measure of performance calculated in accordance with generally accepted
accounting principles, EBITDA is widely used in the broadcasting industry as a
measure of a broadcasting company's operating performance.

<TABLE>
<CAPTION>
AS OF JUNE 27, 1999
-------------------------------------------
PRO FORMA AS
PRO FORMA FOR ADJUSTED FOR
HISTORICAL THIS OFFERING BOTH OFFERINGS
---------- ------------- --------------
(UNAUDITED)
<S> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents................................... $ 20,895 $ 23,600 $ 57,193
Total assets................................................ 359,501 361,299 396,877
Total debt (including current portion)...................... 172,767 172,767 240,653
Preferred stock............................................. 218,802 -- --
Total stockholders' equity (deficiency)..................... (67,848) 167,189 150,383
</TABLE>

- - The pro forma balance sheet data are adjusted to give effect to the
transactions described above as if they had occurred as of June 27, 1999.
These pro forma adjustments reflect (1) the redemption of our outstanding
preferred stock at 105% of aggregate liquidation preference which results in
an additional dividend of $22.1 million and will reduce net income applicable
to common stockholders in the period such redemption occurs as if such
redemption occurred on June 27, 1999, (2) the repurchase of our 11% notes and
12 1/2% notes at approximately 111% and 114% of their par value, respectively,
which results in an extraordinary loss (net of income taxes) amounting to
$16.8 million, assuming such repurchases occurred on June 27, 1999, and (3)
the purchase of an annuity for two of our retiring executives which results in
an estimated nonrecurring charge (net of income taxes) of approximately $6.1
million, assuming such purchase occurred on June 27, 1999. Actual amounts will
differ based upon the actual dates the preferred stock is redeemed, the 11%
notes and 12 1/2% notes are repurchased, and the annuity for two of our
retiring executives is purchased.

11
<PAGE> 18

RISK FACTORS

You should carefully consider the following factors and other information
in this prospectus before deciding to invest in our shares of Class A Common
Stock.

SUBSTANTIAL DEBT -- OUR SUBSTANTIAL LEVEL OF DEBT COULD LIMIT OUR ABILITY TO
GROW AND COMPETE.

Our consolidated debt is substantial when compared to our common
stockholders' equity. As of June 27, 1999, on a pro forma basis after giving
effect to the transactions described in this prospectus (including the
concurrent senior subordinated note offering), we had outstanding long term debt
(including current portions) of approximately $240.7 million and a stockholders'
equity of $150.4 million. We are likely to incur more debt following the closing
of this offering. Such additional debt is expected to include the senior credit
facilities.

Our substantial level of debt could have several important consequences to
the holders of our securities, including the following:

- a significant portion of our cash flow from operations will be dedicated
to servicing our debt obligations and will not be available for
operations, future business opportunities or other purposes;

- our ability to obtain additional financing in the future for working
capital, capital expenditures, acquisitions, general corporate or other
purposes may be limited; and

- our substantial debt could make us more vulnerable to economic downturns,
limit our ability to withstand competitive pressures and reduce our
flexibility in responding to changing business and economic conditions.

Our ability to satisfy all of our debt obligations depends upon our future
operating performance. Our operating performance will be affected by prevailing
economic conditions and financial, business and other factors, some of which are
beyond our control. We believe that our operating cash flow will be sufficient
to meet our operating expenses and to service our debt requirements as they
become due. However, if we are unable to pay our debts, whether upon
acceleration of our debt or in the ordinary course of business, we will be
forced to pursue alternative strategies such as selling assets, restructuring or
refinancing our debt, or seeking additional equity capital. We cannot assure you
that we can successfully complete any of these strategies on satisfactory terms
or that the approval of the FCC could be obtained on a timely basis, or at all,
for the transfer of any of the stations' licenses in connection with a proposed
sale of assets.

RESTRICTIONS IMPOSED BY OUR DEBT -- THE TERMS OF OUR DEBT RESTRICT US FROM
ENGAGING IN MANY ACTIVITIES AND REQUIRE US TO SATISFY VARIOUS FINANCIAL TESTS.

The indenture governing the senior subordinated notes to be issued in our
concurrent senior subordinated notes offering will contain covenants that
restrict, among other things, our ability to:

- incur additional debt;

- create liens;

- pay dividends, distributions or make other specified restricted payments;

- sell assets;

- enter into transactions with affiliates;

- sell capital stock of our subsidiaries; and

- merge or consolidate with any other person or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of our
assets.

12
<PAGE> 19

If an event of default occurs under this indenture, the noteholders could
elect to declare all amounts outstanding under the indenture, together with
accrued interest, to be immediately due and payable. In addition, there is a
change of control provision in the indenture which would require us to make an
offer to repurchase all of our notes in the event that we experience a change of
control. If we do not complete the tender offers and consent solicitations for
our 12 1/2% and 11% notes and the concurrent senior subordinated notes offering,
we will continue to be subject to the indentures that govern our existing
12 1/2% notes and 11% notes, which contain similar, but more restrictive,
covenants. See "Description of Indebtedness -- 12 1/2% Notes" and "Description
of Indebtedness -- 11% Notes."

Similarly, if we enter into the senior credit facilities they will contain
covenants that restrict, among other things, our ability to incur additional
debt, pay cash dividends, repurchase our capital stock, make capital
expenditures, make investments or other restricted payments, swap or sell
assets, engage in transactions with related parties, secure non-senior debt with
our assets, or merge, consolidate or sell all or substantially all of our
assets.

Our senior credit facilities will require us to get our lenders' consent
before we make certain acquisitions involving the payment of cash or assumption
of indebtedness. This restriction may make it more difficult to pursue our
acquisition strategy. Our senior credit facilities will also require us to
maintain specific financial ratios. Events beyond our control could affect our
ability to meet those financial ratios, and we cannot assure you that we will
meet them.

Our senior credit facilities will mature in 2005 and will be (1) guaranteed
by our subsidiaries (other than our foreign subsidiaries created or acquired
after the date of the indenture governing the senior subordinated notes); (2)
secured by all of our assets and all material assets of each guarantor (except
to the extent prohibited by law, broadcast licenses); (3) secured by the stock
of our domestic subsidiaries, including the stock of our broadcasting license
subsidiaries; and (4) secured by two-thirds of the stock of our foreign
subsidiaries that are not guarantors, including the stock of our broadcasting
license subsidiaries. A breach of any of the covenants contained in our senior
credit facilities could allow our lenders to declare all amounts outstanding
under the senior credit facilities to be immediately due and payable. In
addition, our lenders could proceed against the collateral granted to them to
secure that indebtedness. If the amounts outstanding under the senior credit
facilities are accelerated, we cannot assure you that our assets will be
sufficient to repay in full the money owed to the banks or to our other debt
holders.

HISTORY OF NET LOSSES -- WE HAVE EXPERIENCED NET LOSSES IN THE PAST AND TO THE
EXTENT THAT WE EXPERIENCE LOSSES IN THE FUTURE, OUR ABILITY TO RAISE CAPITAL AND
THE MARKET PRICES OF OUR SECURITIES, INCLUDING OUR COMMON STOCK AND ANY NOTES TO
BE ISSUED IN THE SENIOR SUBORDINATED NOTES OFFERING, COULD BE ADVERSELY
AFFECTED.

We have experienced net losses in fiscal years 1996 and 1997. The primary
reasons for these losses are interest expense and significant charges for
depreciation and amortization related to the acquisition of radio stations and
refinancing costs. If we acquire additional stations, these charges will
probably increase.

We cannot assure you that we will achieve or sustain profitability. Failure
to achieve profitability may adversely affect the market price of our common
stock, which in turn may adversely affect our ability to raise additional equity
capital and to incur additional debt.

13
<PAGE> 20

IMPORTANCE OF THE NEW YORK AND MIAMI MARKETS -- A LARGE PORTION OF OUR NET
BROADCAST REVENUE AND BROADCAST CASH FLOW COMES FROM THESE MARKETS.

Based upon the stations we owned and operated as of June 27, 1999, our
radio stations in New York and Miami collectively accounted for 69.3% of our net
broadcast revenue and for 75.6% of our broadcast cash flow for the nine-month
period ended June 27, 1999. A significant decline in net broadcast revenue or
broadcast cash flow from our stations in any of these markets could have a
material adverse effect on our financial position and results of operations.

DEPENDENCE ON KEY PERSONNEL -- LOSS OF KEY PERSONNEL COULD ADVERSELY AFFECT OUR
BUSINESS.

Our business depends upon the efforts, abilities and expertise of our
executive officers and other key employees, including Raul Alarcon, Jr., our
Chairman of the Board of Directors and Chief Executive Officer. The loss of any
of these officers and key employees could have a material adverse effect on our
business. We do not maintain key man life insurance on any of our personnel.

COMPETITION -- WE COMPETE FOR ADVERTISING REVENUE WITH OTHER RADIO GROUPS AS
WELL AS TELEVISION AND OTHER MEDIA, MANY OPERATORS OF WHICH HAVE GREATER
RESOURCES THAN WE DO.

Broadcasting is a highly competitive business. Our radio stations compete
in their respective markets for audiences and advertising revenues with other
radio stations of all formats, as well as with other media, such as newspapers,
magazines, television, cable television, outdoor advertising, the Internet and
direct mail. As a result of this competition, our stations' audience ratings and
market shares may decline and any adverse change in a particular market could
have a material adverse effect on the revenue of our stations located in that
market.

Although we believe that each of our stations is able to compete
effectively in its respective market, we cannot assure you that any station will
be able to maintain or increase its current audience ratings and advertising
revenues. Radio stations can change formats quickly. Any other radio station
currently broadcasting could shift its format to duplicate the format of any of
our stations. If a station converts its programming to a format similar to that
of one of our stations, or if one of our competitors strengthens its operations,
the ratings and broadcast cash flow of our station in that market could be
adversely affected. In addition, other radio companies which are larger and have
more resources may also enter markets in which we operate.

RISKS OF ACQUISITION STRATEGY -- OUR GROWTH DEPENDS ON SUCCESSFULLY EXECUTING
OUR ACQUISITION STRATEGY.

We intend to grow by acquiring radio stations primarily in the largest U.S.
Hispanic markets. We cannot assure you that our acquisition strategy will be
successful. In particular, we cannot assure that our pending purchase of the
eight radio stations located in Puerto Rico will close during the expected time
frame or at all. Our acquisition strategy is subject to a number of risks,
including, but not limited to:

- our pending acquisitions may not be consummated;

- acquired stations may not increase our broadcast cash flow or yield other
anticipated benefits;

- required regulatory approvals may result in unanticipated delays in
completing acquisitions;

- we may have difficulty managing our rapid growth; and

14
<PAGE> 21

- we may be required to raise additional financing and our ability to do so
is limited by the terms of our debt instruments.

CONTROLLING STOCKHOLDER -- OUR CHAIRMAN AND CEO WILL HAVE MAJORITY CONTROL.

After this offering, Raul Alarcon, Jr., our Chairman of the Board of
Directors and Chief Executive Officer, will own shares of Class B Common Stock
having approximately 71% of the combined voting power of our outstanding shares
of common stock. Accordingly, Mr. Alarcon, Jr. will have the ability to elect
all of our directors and will effectively have control of our policies and
affairs. This control may discourage certain types of transactions involving an
actual or potential change of control of SBS such as a merger or sale of SBS.

TECHNOLOGY CHANGES, NEW SERVICES AND EVOLVING STANDARDS -- WE MUST BE ABLE TO
RESPOND TO RAPIDLY CHANGING TECHNOLOGY, SERVICES AND STANDARDS WHICH
CHARACTERIZE OUR INDUSTRY IN ORDER TO REMAIN COMPETITIVE.

The FCC is considering ways to introduce new technologies to the radio
broadcast industry, including satellite and terrestrial delivery of digital
audio broadcasting, and the standardization of available technologies which
significantly enhance the sound quality of AM and FM broadcasts. We cannot
predict the effect new technology of this nature will have on our financial
condition and the results of our operations. Several new media technologies are
being developed, including the following:

- cable television operators have introduced a service commonly referred to
as "cable radio" which provides cable television subscribers with several
high-quality channels of music, news and other information;

- the Internet is poised to offer new and diverse forms of program
distribution;

- direct satellite broadcast television companies are supplying subscribers
with several high quality music channels;

- the introduction of satellite digital audio radio technology could result
in new satellite radio services with sound quality equivalent to that of
compact discs; and

- the introduction of in-band on-channel digital radio could provide
multi-channel, multi-format digital radio services in the same bandwidth
currently occupied by traditional AM and FM radio services.

GOVERNMENT REGULATION -- OUR BUSINESS DEPENDS ON MAINTAINING OUR FCC LICENSES.
WE CANNOT ASSURE YOU THAT WE WILL BE ABLE TO MAINTAIN THESE LICENSES.

The domestic broadcasting industry is subject to extensive federal
regulation which, among other things, requires approval by the FCC for the
issuance, renewal, transfer and assignment of broadcasting station operating
licenses and limits the number of broadcasting properties we may acquire.
Federal regulations create significant new opportunities for broadcasting
companies but also create uncertainties as to how these regulations will be
interpreted and enforced by the courts.

Our success depends in part on acquiring and maintaining broadcast licenses
issued by the FCC, which are typically issued for a maximum term of eight years
and are subject to renewal. While we believe that the FCC will approve
applications for renewal of our existing broadcasting licenses when made, we
cannot guarantee that pending or future renewal applications submitted by us
will be approved, or that renewals will not include conditions or qualifications
that could adversely affect our operations. Although we may apply to renew our
FCC licenses, interested third parties may challenge our renewal applications.
In addition, if we or any of our stockholders, officers, or directors violate
the FCC's rules and regulations or the Communications

15
<PAGE> 22

Act of 1934, or are convicted of a felony, the FCC may commence a proceeding to
impose sanctions upon us. Examples of possible sanctions include the imposition
of fines; the revocation of our broadcast licenses; or the renewal of one or
more of our broadcasting licenses for a term of fewer than eight years. If the
FCC were to issue an order denying a license renewal application or revoking a
license, we would be required to cease operating the radio station covered by
the license only after we had exhausted administrative and judicial review
without success.

The radio broadcasting industry is subject to extensive and changing
federal regulation. Among other things, the Communications Act and FCC rules and
policies limit the number of broadcasting properties that any person or entity
may own (directly or by attribution) in any market and require FCC approval for
transfers of control and assignments. The filing of petitions or complaints
against SBS or any FCC licensee from which we acquire a station could result in
the FCC delaying the grant of, or refusing to grant or imposing conditions on
its consent to the assignment or transfer of licenses. The Communications Act
and FCC rules also impose limitations on non-U.S. ownership and voting of the
capital stock of SBS.

Moreover, governmental regulations and policies may change over time and we
cannot assure you that those changes would not have a material adverse impact
upon our business, financial position or results of operations. In addition, the
loss of any of our existing Los Angeles or New York stations' broadcasting
licenses is an event of default under the indenture that governs our 12 1/2%
notes, and could cause an acceleration of amounts due under those notes prior to
maturity.

ANTITRUST MATTERS -- WE MAY FACE REGULATORY REVIEW FOR ADDITIONAL ACQUISITIONS
IN OUR EXISTING MARKETS AND, POTENTIALLY, NEW MARKETS.

An important part of our growth strategy is the acquisition of additional
radio stations. After the passage of the Telecommunications Act of 1996, the
U.S. Department of Justice has become more aggressive in reviewing proposed
acquisitions of radio stations and radio station networks. The Justice
Department is particularly concerned when the proposed buyer already owns one or
more radio stations in the market of the station it is seeking to buy. Recently,
the Justice Department has challenged a number of radio broadcasting
transactions. Some of those challenges ultimately resulted in consent decrees
requiring, among other things, divestitures of certain stations. In general, the
Justice Department has more closely scrutinized radio broadcasting acquisitions
that result in market shares in excess of 40% of local radio advertising
revenue. Similarly, the FCC has announced new procedures to review proposed
radio broadcasting transactions even if the proposed acquisition otherwise
complies with the FCC's ownership limitations. In particular, the FCC may invite
public comment on proposed radio transactions that the FCC believes, based on
its initial analysis, may present ownership concentration concerns in a
particular local radio market.

RECESSION OR DOWNTURN IN THE ECONOMY -- NATIONAL OR REGIONAL RECESSIONS COULD
IMPAIR OUR REVENUES.

Our broadcasting revenues could be adversely affected by a recession or
downturn in the United States economy since advertising expenditures generally
decrease as the economy slows down. In addition, our operating results in
individual geographic markets could be adversely affected by local or regional
economic downturns. Our broadcasting revenues have been materially adversely
affected by past recessions. Future economic downturns might have a material
adverse effect on our ability to generate advertising revenue and might
materially and adversely affect our financial condition and operating results.

16
<PAGE> 23

NO PRIOR MARKET FOR COMMON STOCK -- OUR INVESTORS WILL PAY A PRICE FOR OUR CLASS
A COMMON STOCK THAT WAS NOT DETERMINED IN A COMPETITIVE MARKET.

Prior to this offering, there has not been any market for the Class A
Common Stock. Our shares of Class A Common Stock have been approved for
quotation on The Nasdaq Stock Market's National Market under the symbol "SBSA,"
subject to official notice of issuance. We do not know the extent to which
investor interest in our business will lead to the development of a trading
market or how liquid that market might be. If you purchase shares of Class A
Common Stock in this offering, you will pay a price that was not established in
a competitive market. Rather, you will pay a price that was negotiated between
us and our underwriters. The price of the Class A Common Stock that will prevail
in the market after this offering may be higher or lower than the price you pay.
For a description of the factors we will consider in negotiating the public
offering price, see "Underwriting."

In addition, in recent years, the stock market has experienced extreme
price fluctuations, sometimes without regard to the performance of particular
companies. Broad market and industry fluctuations may adversely affect the
trading price of the Class A Common Stock, regardless of our actual operating
performance.

SHARES OF COMMON STOCK ELIGIBLE FOR FUTURE SALE -- FUTURE SALES BY EXISTING
STOCKHOLDERS COULD DEPRESS THE MARKET PRICE OF OUR CLASS A COMMON STOCK.

The market price of our Class A Common Stock could drop as a result of
sales of a large number of shares of Class A Common Stock or Class B Common
Stock (convertible into Class A Common Stock) by our existing stockholders after
this offering, or the perception that these sales may occur. These factors could
make it more difficult for us to raise funds through future offerings of our
Class A Common Stock.

The shares of Class B Common Stock held by Pablo Raul Alarcon, Sr., Raul
Alarcon, Jr. and Jose Grimalt not being offered by this prospectus and the
shares of Class B Common Stock held by Joseph A. Garcia are subject to "lock-up"
agreements that prohibit them from selling these shares for 180 days after the
date of this prospectus. When the 180-day "lock-up" period expires, or if Lehman
Brothers Inc., in its sole discretion, consents to an earlier sale, Messrs.
Alarcon, Sr., Alarcon, Jr., Grimalt, and Garcia will be able to sell their
shares in the open market, subject to certain legal restrictions.

Holders of shares of Class B Common Stock (which were Class A Common Stock
prior to our redesignation) issued upon exercise of the 1994 and 1997 warrants
have demand registration rights (permitting them to have their shares registered
for resale within 180 days of making such demand for registration) and piggyback
registration rights (permitting them to have their shares registered in this
offering, subject to reduction upon determination by Lehman Brothers Inc. as the
managing underwriter of this offering). After completion of this offering, there
will be 34,593,350 shares of Class B Common Stock outstanding, of which
6,884,950 shares will have registration rights and are not subject to "lock-up"
agreements. Upon registration, these shareholders will be able to sell their
shares in the open market without restriction.

Upon completion of this offering, there will be 22,355,200 shares of Class
A Common Stock and 34,593,350 shares of Class B Common Stock outstanding. The
shares of Class A Common Stock sold in this offering will be freely tradable
without restriction, except for any shares acquired by one of our affiliates,
which can be sold under Rule 144 of the Securities Act of 1933 subject to
certain volume and other restrictions.

17
<PAGE> 24

YEAR 2000 -- COMPUTER PROGRAMS AND MICROPROCESSORS THAT HAVE DATE SENSITIVE
SOFTWARE MAY RECOGNIZE A DATE USING "00" AS YEAR 1900 RATHER THAN 2000, OR NOT
RECOGNIZE THE DATE AT ALL, WHICH COULD RESULT IN MAJOR SYSTEM FAILURES OR
MISCALCULATIONS.

We rely, directly and indirectly, on information technology systems to
operate our radio stations, provide our radio stations with up-to-date news and
perform a variety of administrative services, including accounting, financial
reporting, advertiser spot scheduling, payroll and invoicing. We also use
non-information technology systems, such as microchips, for dating and other
automated functions. We are in the process of assessing and remediating
potential risks to our business related to the year 2000 problem. Although we
believe that, as a result of these efforts, our critical systems are or will be
substantially year 2000 compliant, we cannot assure you that this will be the
case. One of our greatest potential year 2000 risks may be that third parties
with whom we deal will fail to be year 2000 compliant. For example, if our
programming suppliers or key advertisers experience significant disruptions in
their businesses because of the year 2000 problem, we may lose access to
programming and significant advertising revenue. We are in the process of
developing a contingency plan to address any possible failures by us or our
vendors related to year 2000 compliance.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements, including statements
under the captions "Summary," "Risk Factors," "Management's Discussion and
Analysis of Financial Condition and Results of Operations," "Business" and
elsewhere in this prospectus, concerning our expectations of future sales, gross
profits, research and development expenses, selling, general and administrative
expenses, product introductions and cash requirements. Forward-looking
statements often include words or phrases such as "will likely result",
"expect", "will continue", "anticipate", "estimate", "intend", "plan",
"project", "outlook" or similar expressions. The statements are not guarantees
of future performance and are subject to certain risks, uncertainties and other
factors, some of which are beyond our control, are difficult to predict and
could cause actual results to differ materially from those expressed in the
forward-looking statements. Actual results may vary materially from those
expressed in forward-looking statements. Factors which could cause actual
results to differ from expectations include those in the "Risk Factors" section
of this prospectus. We cannot assure you that our results of operations will not
be adversely affected by one or more of these factors. We caution you not to
place undue reliance on these forward-looking statements, which reflect our
management's view only as of the date of this prospectus. We are not obligated
to update these statements or publicly release the results of any revisions to
them to reflect events or circumstances occurring after the date of this
prospectus or to reflect the occurrence of unanticipated events.

18
<PAGE> 25

USE OF PROCEEDS

The net proceeds we will receive from this offering and the concurrent
senior subordinated notes offering are estimated to be approximately $260.8
million and $227.0 million, respectively. We will not receive any proceeds from
the shares of Class A Common Stock being sold by the selling stockholders, which
are estimated to be $77.7 million. This offering of our Class A Common Stock is
not conditioned upon any other offering. The senior subordinated notes offering
is conditioned upon the completion of this offering. We intend to use the net
proceeds of this offering, the concurrent senior subordinated notes offering and
the repayment of stockholder loans to (1) redeem our preferred stock at 105% of
aggregate liquidation preference, (2) repurchase our 11% notes and 12 1/2% notes
at approximately 111% and 114% of their par value, respectively, pursuant to the
tender offers and consent solicitations we commenced on September 30, 1999, (3)
purchase an annuity for two of our retiring executives at an estimated cost of
approximately $10.6 million, and (4) for general corporate purposes. The pro
forma amounts for redemption of preferred stock and repurchase of our 11% notes
and 12 1/2% notes assume that such events will occur on December 1, 1999 and
November 2, 1999, respectively. We cannot assure you that we will complete the
concurrent senior subordinated notes offering on terms that are favorable to us
or at all or that any or all of the 11% notes and 12 1/2% notes will be
tendered. If only this offering is completed, we would use the net proceeds of
this offering, the repayment of stockholder loans and a portion of our current
cash on hand to redeem our outstanding preferred stock and purchase an annuity
for two of our retiring executives. The following table presents the sources and
uses of funds (1) pro forma for this offering, and (2) pro forma as adjusted for
this offering and the senior subordinated notes offering:

<TABLE>
<CAPTION>
PRO FORMA
AS ADJUSTED
PRO FORMA FOR BOTH
FOR THIS OFFERING OFFERINGS
----------------- ------------------
(IN THOUSANDS) (IN THOUSANDS)
<S> <C> <C>
SOURCES OF FUNDS:
This offering......................................... $280,000 $280,000
Senior subordinated notes offering.................... -- 235,000
Repayment of loans by stockholders.................... 3,019 3,019
Cash on hand.......................................... 12,359 --
-------- --------
Total....................................... $295,378 $518,019
======== ========
USES OF FUNDS:
Redemption of preferred stock......................... $265,611 $265,611
Annuity for retiring executives....................... 10,567 10,567
Repurchase of our 11% notes and 12 1/2% notes......... -- 195,952
General corporate purposes............................ -- 18,639
Estimated fees and expenses........................... 19,200 27,250
-------- --------
Total....................................... $295,378 $518,019
======== ========
</TABLE>

Preferred Stock. As of June 27, 1999 we had outstanding $229.5 million
aggregate liquidation preference of our preferred stock. Our preferred stock
accrues dividends at a rate of 14 1/4% per year payable semi-annually. We can
redeem our preferred stock at 105% of its liquidation preference plus
accumulated and unpaid dividends.

Senior Notes. As of June 27, 1999 we had outstanding $93.9 million
aggregate principal amount of our 12 1/2% notes and $75.0 million aggregate
principal amount of our 11% notes. The 12 1/2% notes accrue interest at an
annual rate of 12 1/2% and mature on June 15, 2002. The 11% notes accrue
interest at an annual rate of 11% and mature on March 15, 2004.

19
<PAGE> 26

DIVIDEND POLICY

We intend to retain future earnings for use in our business and do not
anticipate declaring or paying any cash or stock dividends on shares of our
common stock in the foreseeable future. In addition, any determination to
declare and pay dividends will be made by our board of directors in light of our
earnings, financial position, capital requirements and other factors that the
board of directors deems relevant. Furthermore, the indentures governing the
senior subordinated notes to be issued in the concurrent senior subordinated
notes offering, our 12 1/2% notes and our 11% notes, and the agreement governing
the senior credit facilities each contain restrictions on our ability to pay
dividends. See "Description of Indebtedness." We previously declared and paid an
extraordinary dividend in March 1998, pursuant to which some of our
warrantholders elected to increase the conversion rates of their warrants
instead of receiving cash. We do not expect to make any similar dividends in the
near future.

20
<PAGE> 27

DILUTION

Purchasers of the Class A Common Stock offered by this prospectus will
suffer an immediate and substantial dilution in net tangible book value per
share. Dilution is the amount by which the initial public offering price paid by
the purchasers of the shares of Class A Common Stock will exceed the net
tangible book value per share of common stock after this offering. The net
tangible book value per share of common stock is determined by subtracting total
liabilities from the total book value of the tangible assets and dividing the
difference by the number of shares of common stock deemed to be outstanding on
the date the book value is determined. As of June 27, 1999, we had a negative
tangible book value of $361.9 million or $9.17 per share, excluding this
offering. Assuming the sale of 17,500,000 shares at an initial public offering
price of $16.00 per share and deducting the underwriters' discounts and
commissions and estimated offering expenses, and after giving effect to the
redemption of all our outstanding preferred stock, the repayment of loans
receivable by selling stockholders with the net proceeds that such selling
stockholders will receive from this offering, and the purchase of an annuity for
our retiring executives, our pro forma tangible book value as of June 27, 1999
would have been a negative $126.5 million or $2.22 per share. This represents an
immediate increase in pro forma net tangible book value to existing stockholders
of $6.95 per share and an immediate dilution to new investors of $18.22 per
share. The following table illustrates this per share dilution:

<TABLE>
<CAPTION>
PER SHARE
---------
<S> <C> <C>
Assumed initial public offering price....................... $16.00
Net negative tangible book value before this offering..... $(9.17)
Increase in net tangible book value per share attributable
to this offering....................................... 6.95
------
Pro forma net tangible book value after this offering....... (2.22)
------
Dilution to new investors................................... $18.22
======
</TABLE>

The following table summarizes, on a pro forma adjusted basis as of June
27, 1999, the number of shares of Class A Common Stock purchased from us, the
estimated value of the total consideration paid for or attributed to the Class A
Common Stock, and the average price per share paid by or attributable to
existing stockholders and the new investors purchasing shares in this offering
at an initial offering price of $16.00 per share.

<TABLE>
<CAPTION>
AVERAGE
SHARES OF COMMON PRICE PER
STOCK PURCHASED TOTAL CASH CONSIDERATION SHARE OF
--------------------- ------------------------ COMMON
NUMBER PERCENT NUMBER PERCENT STOCK
---------- ------- ------------ -------- ---------
<S> <C> <C> <C> <C> <C>
Existing stockholders................. 39,448,550 69% 6,873,186 2% $ 0.17
New investors......................... 17,500,000 31% 280,000,000 98% 16.00
---------- --- ----------- ---
Total....................... 56,948,550 100% 286,873,186 100%
========== === =========== ===
</TABLE>

21
<PAGE> 28

CAPITALIZATION

The table below sets forth our capitalization as of June 27, 1999 on an
actual basis, on a pro forma basis giving effect to this offering, and on a pro
forma as adjusted basis giving effect to this offering and our concurrent senior
subordinated notes offering.

<TABLE>
<CAPTION>
AS OF JUNE 27, 1999
-------------------------------------------------
PRO FORMA
PRO FORMA FOR AS ADJUSTED FOR
ACTUAL THIS OFFERING BOTH OFFERINGS
-------------- -------------- ---------------
(IN THOUSANDS) (IN THOUSANDS) (IN THOUSANDS)
<S> <C> <C> <C>
Cash and cash equivalents............................. $ 20,895 $ 23,600 $ 57,193
======== ======== ========
Long-term debt (including current portion):
12 1/2% notes....................................... 92,114 92,114 --
11% notes........................................... 75,000 75,000 --
Senior subordinated notes........................... -- -- 235,000
Other debt, including current portion............ 5,653 5,653 5,653
-------- -------- --------
Total long-term debt........................ 172,767 172,767 240,653
Preferred stock....................................... 218,802 -- --
Stockholders' equity (deficiency):
Class A Common Stock................................ -- 2 2
Class B Common Stock................................ 4 4 4
Additional paid-in capital.......................... 6,869 267,667 267,667
Accumulated deficit................................. (72,262) (100,484) (117,290)
Less: loans receivable from stockholders......... (2,459) -- --
-------- -------- --------
Total stockholders' equity (deficiency)..... (67,848) 167,189 150,383
-------- -------- --------
Total capitalization.................................. $323,721 $339,956 $391,036
======== ======== ========
</TABLE>

- The pro forma amounts as of June 27, 1999, in the column "Pro Forma for
this Offering" are adjusted to give effect to (1) this offering, (2) the
redemption of all of our outstanding preferred stock at 105% of aggregate
liquidation preference, which results in an additional dividend of $22.1
million and will reduce net income applicable to common stockholders in
the period such redemption occurs as if such redemption occurred on June
27, 1999, (3) the repayment of the loans receivable from selling
stockholders with the net proceeds that such selling stockholders will
receive from this offering, and (4) the purchase of an annuity for two of
our retiring executives which results in an estimated nonrecurring charge
(net of income taxes) of approximately $6.1 million, as if they had
occurred as of June 27, 1999.

- The pro forma amounts as of June 27, 1999, in the column "Pro Forma As
Adjusted for Both Offerings" are adjusted to give effect to the
transactions described above and further adjusted for the concurrent
offering of approximately $235.0 million aggregate principal amount of
our senior subordinated notes due 2009 and the repurchase of our 11%
notes and 12 1/2% notes at 111% and 114% of their par value,
respectively, pursuant to the tender offers and consent solicitations we
commenced on September 30, 1999 which results in an extraordinary loss
(net of income taxes) amounting to $16.8 million, as if they had occurred
as of June 27, 1999.

- Actual amounts will differ based upon the actual dates the preferred
stock is redeemed, the 11% notes and 12 1/2 notes are repurchased, and
the annuity for two of our retiring executives is purchased.

22
<PAGE> 29

SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS EXCEPT RATIOS, SHARES OUTSTANDING AND PER SHARE DATA)

The following table sets forth the historical financial information of our
business. The selected historical consolidated financial information presented
below under the caption "Statement of Operations Data" for each of the fiscal
years in the five-year period ended September 27, 1998 and for the nine months
ended June 27, 1999, are derived from our historical consolidated financial
statements, which have been audited by KPMG LLP, independent certified public
accountants. The financial information for the nine months ended June 28, 1998
is unaudited, but in our opinion reflects all adjustments (which include only
normal recurring adjustments) necessary for a fair presentation of the financial
information. Operating results for the nine months ended June 27, 1999 are not
necessarily indicative of the results that may be expected for the fiscal year
ending September 26, 1999. Our selected historical consolidated financial data
should be read in conjunction with our historical consolidated financial
statements as of September 28, 1997, September 27, 1998 and June 27, 1999 and
for each of the fiscal years in the three-year period ended September 27, 1998
and the nine months ended June 27, 1999, the related notes and independent
auditor's report, included elsewhere in this prospectus. For additional
information see the financials section of this prospectus and "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

<TABLE>
<CAPTION>
FISCAL YEAR ENDED NINE MONTHS ENDED
--------------------------------------------------------- -----------------------
9/25/94 9/24/95 9/29/96 9/28/97 9/27/98 6/28/98 6/27/99
--------- --------- --------- --------- --------- ----------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Gross revenues............................ $ 45,825 $ 54,152 $ 55,338 $ 67,982 $ 86,766 $ 62,099 $ 80,437
Less: agency commissions.................. 5,688 6,828 6,703 7,972 10,623 7,508 10,082
--------- --------- --------- --------- --------- --------- ---------
Net revenues............................ 40,137 47,324 48,635 60,010 76,143 54,591 70,355
Station operating expenses(1)............. 22,145 22,998 27,876 31,041 39,520 28,298 31,782
Depreciation and amortization............. 3,256 3,389 4,556 7,619 8,877 6,867 7,223
Corporate expenses........................ 2,884 4,281 3,748 5,595 6,893 5,122 7,658
--------- --------- --------- --------- --------- --------- ---------
Operating income........................ 11,852 16,656 12,455 15,755 20,853 14,304 23,692
Interest expense, net(2).................. (14,203) (12,874) (16,533) (22,201) (20,860) (16,002) (15,736)
Other income (expense), net(3)............ (3,423) (381) (1,574) (791) (213) -- (485)
Gain on sale of AM stations............... -- -- -- -- 36,242 36,247 --
--------- --------- --------- --------- --------- --------- ---------
Income (loss) before income taxes and
extraordinary items..................... (5,774) 3,401 (5,652) (7,237) 36,022 34,549 7,471
Income tax expense (benefit).............. (2,231) 1,411 (1,166) (2,715) 15,624 13,820 3,177
--------- --------- --------- --------- --------- --------- ---------
Income (loss) before extraordinary
items................................. (3,543) 1,990 (4,486) (4,522) 20,398 20,729 4,294
Extraordinary gain (loss) net of income
taxes(4)................................ 70,255 -- -- (1,647) (1,613) (1,613) --
--------- --------- --------- --------- --------- --------- ---------
Net income (loss)....................... $ 66,712 $ 1,990 $ (4,486) $ (6,169) $ 18,785 $ 19,116 $ 4,294
========= ========= ========= ========= ========= ========= =========
Dividends on preferred stock.............. -- -- (2,994) (17,044) (30,270) (22,391) (25,951)
--------- --------- --------- --------- --------- --------- ---------
Net income (loss) applicable to common
stock................................. $ 66,712 $ 1,990 $ (7,480) $ (23,213) $ (11,485) $ (3,275) $ (21,657)
========= ========= ========= ========= ========= ========= =========
Dividends per share on common stock....... $ -- $ -- $ -- $ -- $ 0.11 $ 0.11 $ --
========= ========= ========= ========= ========= ========= =========
Earnings (loss) per common share:
Basic (before extraordinary item)....... $ (0.36) $ 0.07 $ (0.25) $ (0.71) $ (0.33) $ (0.06) $ (0.68)
Diluted (before extraordinary item)..... (0.36) 0.06 (0.25) (0.71) (0.33) (0.06) (0.68)
Basic................................... 6.75 0.07 (0.25) (0.77) (0.38) (0.11) (0.68)
Diluted................................. 6.75 0.06 (0.25) (0.77) (0.38) (0.11) (0.68)

Weighted average common shares
outstanding(8):
Basic................................... 9,882,318 30,333,400 30,333,400 30,333,400 30,333,400 30,333,400 31,629,918
Diluted................................. 9,882,318 35,793,409 30,333,400 30,333,400 30,333,400 30,333,400 31,629,918
</TABLE>

23
<PAGE> 30

<TABLE>
<CAPTION>
AS OF
---------------------------------------------------------------------
9/25/94 9/24/95 9/29/96 9/28/97 9/27/98 6/27/99
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents................. $ 12,137 $ 17,817 $ 5,468 $ 12,288 $ 37,642 $ 20,895
Total assets.............................. 98,733 103,629 176,860 334,367 351,034 359,501
Total debt (including current portion).... 93,573 95,523 135,914 183,013 171,126 172,767
Preferred stock........................... -- -- 35,939 171,262 201,368 218,802
Total stockholders' deficiency............ (2,960) (1,150) (3,569) (32,047) (46,193) (67,848)
</TABLE>

NOTES TO SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION

(1) Station operating expenses include engineering, programming, selling and
general and administrative expenses.

(2) Interest expense includes non-cash interest, such as the accretion of
principal, the amortization of discounts on debt and the amortization of
deferred financing costs.

(3) During the 1996 and 1997 fiscal years, we wrote down the value of our land
and building located on Sunset Boulevard in Los Angeles by $697,741 and
$487,973, respectively. For the nine months ended June 27, 1999, we wrote
down the value of this land and building by $451,048. The write-downs were
based on current market values of real estate in the Los Angeles area.
Financing costs are also included in other income (expenses).

(4) On June 29, 1994, we sold 107,059 units, each consisting of $1,000 principal
amount of our 12 1/2% notes and warrants to purchase one share of common
stock per unit. The 12 1/2% notes were issued at a substantial discount from
their principal amount. The sale of the 12 1/2% notes and warrants generated
gross proceeds of $94,000,000 and proceeds to us of $87,774,002, net of
financing costs of $6,225,998. Of the $94,000,000 of gross proceeds from the
sale of the 12 1/2% notes and warrants, $88,603,000 was allocated to the
12 1/2% notes and $5,397,000 was determined to be the value of the warrants.
Of the net proceeds from the sale of the 12 1/2% notes and the warrants,
$83,000,000 was used to satisfy in full our obligations to our two former
principal lenders and the balance was used to settle litigation with a
former stockholder and for general corporate purposes. We realized a gain of
$70,254,772 in connection with our repayment of all obligations to our two
former principal lenders because we were able to satisfy in full these
obligations at substantial discounts to their face amounts in accordance
with restructuring agreements between us and the lenders.

For the fiscal year ended September 28, 1997, we recorded an extraordinary
loss resulting from the redemption of our 12 1/4% senior secured notes due
2001 at par which was approximately $1.5 million in excess of their carrying
value and from the write-off of the related unamortized deferred financing
costs of approximately $1.3 million, net of the related tax benefit of
approximately $1.1 million.

For the fiscal year ended September 27, 1998, we recorded an extraordinary
loss resulting from the repurchase of $13.2 million par value of 12 1/2%
notes, at a premium of

24
<PAGE> 31

approximately $2.2 million in excess of their carrying value and from the
write-off of the related unamortized deferred financing costs of
approximately $0.5 million, net of the related tax benefit of approximately
$1.1 million.

(5) The term "broadcast cash flow" means operating income before depreciation,
amortization and corporate expenses. Broadcast cash flow should not be
considered in isolation from, or as a substitute for, net income or cash
flow and other consolidated income or cash flow statement data or as a
measure of our profitability or liquidity. Although broadcast cash flow is
not a measure of performance calculated in accordance with generally
accepted accounting principles, broadcast cash flow is widely used in the
broadcasting industry as a measure of a broadcasting company's operating
performance.

(6) The term "EBITDA" means earnings before extraordinary items, gain on sale of
AM stations, net interest expense, income taxes, depreciation, amortization
and other income or expense. We have included information concerning EBITDA
in this prospectus because it is used by some investors as a measure of a
company's ability to service its debt obligations. Although EBITDA is not a
measure of performance calculated in accordance with generally accepted
accounting principles, EBITDA is widely used in the broadcasting industry as
a measure of a broadcasting company's operating performance.

(7) The term "after-tax cash flow" means income before income tax benefit
(expense) and extraordinary items, minus net gain on sale of AM stations
(net of tax) and the current income tax provision, plus depreciation and
amortization expense. Although after-tax cash flow is not a measure of
performance calculated in accordance with generally accepted accounting
principles, after-tax cash flow is widely used in the broadcasting industry
as a measure of a broadcasting company's operating performance.

(8) On September 29, 1999, we filed a third amended and restated certificate of
incorporation which resulted in (1) the redesignation of our previously
outstanding shares of Class A Common Stock into shares of Class B Common
Stock, (2) a 50-to-1 stock split of our Class B Common Stock and (3) a
reduction in the par value of our Class A Common Stock and Class B Common
Stock from $0.01 per share to $0.0001 per share. The financial information
has been restated to reflect this redesignation, stock split and change in
par value.

25
<PAGE> 32

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following information should be read in conjunction with "Selected
Historical Consolidated Financial Information" and the Financial Statements and
the related notes included elsewhere in this prospectus.

BACKGROUND

We commenced operations with the purchase of our first radio station,
WXLX-AM (formerly WSKQ-AM) serving the New York metropolitan area in 1983. Since
1983 we have purchased 15 stations, including two additional AM stations in six
U.S. markets. Today, we are the second largest Spanish-language radio
broadcasting company in the United States, currently owning and operating a
total of 13 FM radio stations. We have agreed to purchase eight additional radio
stations in Puerto Rico. We also have entered into a memorandum of understanding
to sell our two radio stations located in the Florida Keys. Eleven of our
stations are located in six of the largest Hispanic markets in the United
States, including Los Angeles, Puerto Rico, New York, Miami, Chicago and San
Antonio. In total, our radio stations reach over 51% of the U.S. Hispanic
population.

Our financial results depend on a number of factors, including the strength
of the national economy and the local economies served by our stations, total
advertising dollars dedicated to the markets served by our stations, advertising
dollars targeted to the Hispanic consumers in the markets served by our
stations, our stations' audience ratings, our ability to provide popular
programming, local market competition from other radio stations and other
advertising media, and government regulations and policies.

We report our revenues and expenses on a broadcast month basis. "Broadcast
month basis" means a four or five week period ending on the last Sunday of each
calendar month. For the nine months ended June 27, 1999, and the nine months
ended June 28, 1998, we reported 39 weeks of revenues and expenses. For fiscal
year 1996, we reported 53 weeks of revenues and expenses compared to 52 weeks
for each of fiscal year 1997 and 1998.

As is true of other radio groups, our performance is customarily measured
by our ability to generate broadcast cash flow, EBITDA and after-tax cash flow.
Broadcast cash flow consists of operating income before depreciation,
amortization and corporate expenses. EBITDA consists of earnings before
extraordinary items, gain on sale of AM stations, net interest expense, income
taxes, depreciation, amortization and other income or expenses. After-tax cash
flow consists of income before income tax benefit (expense) and extraordinary
items, minus net gain on sale of AM stations (net of tax) and the current income
tax provision, plus depreciation and amortization expense. Although broadcast
cash flow, EBITDA and after-tax cash flow are not measures of performance
calculated in accordance with generally accepted accounting principles, we
believe that broadcast cash flow, EBITDA and after-tax cash flow are useful in
evaluating us because these measures are accepted by the broadcasting industry
as generally recognized measures of performance and are used by securities
industry analysts who publish reports on the performance of broadcasting
companies. In addition, we have included information concerning broadcast cash
flow, EBITDA and after-tax cash flow in this prospectus because it is used by
some investors as a measure of a company's ability to service its debt
obligations and it is also the basis for determining compliance with certain
covenants contained in the indentures governing our debt securities and in the
certificate of designation governing our preferred stock. Broadcast cash flow,
EBITDA and after-tax cash flow are not intended to be substitutes for

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operating income as determined in accordance with generally accepted accounting
principles, or alternatives to cash flow from operating activities (as a measure
of liquidity) or net income.

REVENUES

Our primary source of revenue is the sale of advertising time on our radio
stations to local and national advertisers. Our revenues are affected primarily
by the advertising rates that our radio stations are able to charge as well as
the overall demand for radio advertising time in a market. Advertising rates are
based primarily on (1) a radio station's audience share in the demographic
groups targeted by advertisers, as measured principally by periodic reports
developed by Arbitron(C), (2) the number of radio stations in the market
competing for the same demographic groups, and (3) the supply of and demand for
radio advertising time. Advertising rates fluctuate daily and are generally
highest during the morning and afternoon commuting hours. Seasonal net
broadcasting revenue fluctuations are common in the radio broadcasting industry
and are due primarily to fluctuations in advertising expenditures by local and
national advertisers. Our second fiscal quarter (January through March)
generally produces the lowest net broadcasting revenue for the year because of
normal post-holiday decreases in advertising expenditures.

Our advertising contracts are generally short term, usually for periods of
three months or less, and we generate most of our revenues from local
advertising. In the 1998 fiscal year, approximately $63.1 million, or 72.7% of
our gross broadcasting revenues, was generated from local advertising and
approximately $23.7 million, or 27.3% of our gross broadcasting revenues, was
generated from national advertising. Each of our station's local sales staff
solicits advertising directly from local advertisers or through an advertising
agency representing local advertisers. For national advertising sales, we have
engaged Caballero Spanish Media, LLC, a subsidiary of Interep National Radio
Sales, Inc., a national representative company.

In the broadcasting industry, radio stations sometimes utilize trade or
barter agreements to reduce cash expenses by exchanging advertising time for
advertising time with other media, and for goods and services related to
promotional campaigns. In each of our 1996, 1997 and 1998 fiscal years, we sold
approximately 5.9%, 4.4% and 3.1%, respectively, of our available advertising
time for trade or barter. Our percentage of advertising time sold for trade or
barter may increase slightly in the next two years upon completion of the
acquisition of radio stations in Puerto Rico, a market which traditionally has
had a higher percentage of trade and barter. However, we believe that after
these stations have been integrated into our existing operations, our percentage
of advertising time sold for trade or barter will decrease.

EXPENSES

Our most significant expenses are employee compensation, rating services,
advertising and promotion expenses, lease expenses for studios and transmission
tower space and music license fees. We strive to control expenses by (1)
centralizing functions such as finance, accounting, payables, budgeting, legal,
human resources, management information systems and the overall programming
management function, and (2) using our multiple stations, market presence and
purchasing power to negotiate favorable rates with certain vendors and national
representative selling agencies. Depreciation of fixed assets and amortization
of costs associated with the acquisition of additional stations and interest
carrying charges are also significant factors in determining our overall expense
level.

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Our operating results in any period may be affected by advertising and
promotion expenses that do not produce commensurate broadcast revenue in the
period in which such expenses are incurred. We generally incur advertising and
promotion expenses in order to increase listenership and Arbitron(C) ratings.
Increased advertising revenue may wholly or partially lag behind the incurrence
of such advertising and promotion expenses because Arbitron(C) only reports
complete ratings information on a quarterly basis.

CERTAIN TRANSACTIONS

From fiscal year 1996 through fiscal year 1998, we acquired five radio
stations, disposed of all of our AM radio stations and issued and repurchased
certain of our securities. The impact of these transactions on our results of
operations is described below:

- In March 1996, we acquired the FCC broadcast license and substantially
all of the assets of WPAT-FM in New York for $86.4 million, including
closing costs of $1.8 million. The acquisition of WPAT-FM was financed by
cash on hand and by the issuance of senior secured notes and redeemable
preferred stock, each of which was subsequently redeemed in March 1997 in
connection with the refinancing associated with the purchase of WRMA-FM,
WXDJ-FM and WLEY-FM. Pursuant to the terms of a local marketing
agreement, we began operating WPAT-FM on January 26, 1996 and the
revenues and operating expenses of WPAT-FM are included in our operating
results from that date.

- In March 1997, we issued (1) $175.0 million of our 14 1/4% preferred
stock, (2) warrants to purchase 74,900 shares of our Class A Common Stock
(redesignated into shares of Class B Common Stock and subsequently split
on a 50-to-1 basis pursuant to the third amended and restated certificate
of incorporation), and (3) $75.0 million aggregate principal amount of
our 11% notes due 2004 (collectively, the "1997 Financings"). In
connection with the 1997 Financings, we capitalized finance costs of $5.7
million related to the 11% notes due 2004 and charged issuance costs of
$9.0 million related to our preferred stock and warrants. A portion of
the proceeds from the 1997 Financings was used to retire all of our then
outstanding redeemable preferred stock and 12 1/4% senior secured notes
due 2001. We realized a loss on the retirement of the 12 1/4% senior
secured notes due 2001 of approximately $1.6 million, net of taxes of
approximately $1.1 million. This amount has been classified as an
extraordinary item in the accompanying "Consolidated Statement of
Operations" in the financial statements of this prospectus.

- In March 1997, we acquired the FCC broadcast licenses and substantially
all of the assets of WRMA-FM and WXDJ-FM in Miami for $112.1 million,
including closing costs of $1.1 million. The acquisitions of WRMA-FM and
WXDJ-FM were financed by the proceeds we received from the 1997
Financings. Our results include the operation of WRMA-FM and WXDJ-FM from
their respective dates of acquisition.

- In March 1997, we acquired the FCC broadcast license and substantially
all of the assets of WLEY-FM in Chicago for $33.2 million including
closing costs of $0.2 million. The acquisition of WLEY-FM was financed by
the proceeds we received from the 1997 Financings and a note payable to
the seller of WLEY-FM for $3.0 million. Our results include the operation
of WLEY-FM from its date of acquisition.

- In September 1997, we sold the assets and FCC licenses of WXLX-AM
(serving the New York market) and WCMQ-AM (serving the Miami area) for
$26.0 million. We recorded a gain of $18.6 million on the sale which is
classified under other income as

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"Gain on sale of AM stations" in the accompanying "Consolidated Statement
of Operations" in the financial statements of this prospectus.

- In October and November 1997, we repurchased through a tender offer and
open-market purchases $13.2 million in principal amount of our 12 1/2%
senior notes due 2002. The total amount paid by us for these notes was
$15.0 million, plus accrued interest of $0.7 million. We recognized a
loss on the tender offer of $1.6 million, net of income taxes of $1.1
million, due to the premium paid for the notes and the write-off of the
deferred financing costs and original issue discounts related to the
notes purchased. This amount has been classified as an extraordinary item
in the accompanying "Consolidated Statement of Operations" in the
financial statements of this prospectus.

- In December 1997, we sold the assets and FCC license of KXMG-AM (serving
the Los Angeles metropolitan area) for $18.0 million. We recorded a gain
of $17.6 million on the sale which is classified under other income as
"Gain on sale of AM stations" in the accompanying Consolidated Statement
of Operations" in the financial statements of this prospectus.

- On May 13, 1998, we acquired the FCC broadcast license and substantially
all of the assets of KLEY-FM (formerly KRIO-FM) in San Antonio, Texas for
$9.3 million, including closing costs of $0.1 million. The acquisition of
KLEY-FM was financed with cash on hand. Our results include the operation
of this station from the date of its acquisition.

During fiscal year 1999, we acquired three stations, WCMA-FM (formerly
WDOY-FM), WMEG-FM and WEMG-FM (all serving Puerto Rico), and eighty percent of
the issued and outstanding capital stock of JuJu Media, Inc., the owner of
LaMusica.com. The acquisitions of WCMA-FM, WMEG-FM and WEGM-FM were financed by
cash on hand. The acquisition of JuJu Media, Inc. was financed by cash on hand
and the issuance of promissory notes. The results of these acquisitions did not
meet the significance test for pro forma presentation and, consequently, no pro
forma results have been included with respect to these acquisitions. Our results
include the operations of these stations and JuJu Media, Inc. from the date of
their respective acquisitions.

On September 22, 1999, we entered into an agreement to purchase all of the
outstanding capital stock of nine subsidiaries of Chancellor Media Corporation
of Los Angeles. The companies we have agreed to purchase own and operate eight
radio stations in Puerto Rico: WIOA-FM, WIOB-FM, WIOC-FM, WCOM-FM, WZMT-FM,
WZNT-FM, WOYE-FM and WCTA-FM. The purchase price we have agreed to pay for these
companies is $90.0 million. In connection with this acquisition, we have made an
initial nonrefundable deposit of $10.0 million. The agreement contains customary
representations and warranties, and the closing of our acquisition of these
companies is subject to the satisfaction of certain customary conditions,
including receipt of regulatory approvals from the FCC. We expect to finance the
purchase of these companies from a combination of bank borrowings and cash on
hand. Prior to the closing of these acquisitions, (but following the expiration
of the applicable waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended), we intend to operate these stations under
a local marketing agreement pursuant to which we will pay a monthly fee in
exchange for the exclusive right to program and sell commercial announcements
for each of the stations. We expect to close our acquisition of these companies
by the end of December 1999. We cannot assure you, however, that we will be able
to complete our acquisition of the

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companies during the expected time frame or at all. The results of operations of
these companies have not been included in our pro forma financial statements.

We have entered into a memorandum of understanding with Mr. Alarcon, Sr.,
our Chairman Emeritus and a member of our board of directors, for the sale by us
of the assets and liabilities of radio station WVMQ-FM operating in Key West,
Florida and radio station WZMQ-FM operating in Key Largo, Florida. The sale
price to be paid by Mr. Alarcon, Sr. for these stations is $700,000. The
definitive agreement will contain customary representations, warranties and
indemnities, and the closing of the sale of these stations will be subject to
the satisfaction of certain conditions, including approval of the FCC, the
completion of this offering and the receipt by Mr. Alarcon, Sr. of the proceeds
of this offering as a selling stockholder. We cannot assure you that the sale of
these stations will occur during the expected time frame or at all.

RESULTS OF OPERATIONS

Nine Months Ended June 27, 1999 Compared to the Nine Months Ended June 28, 1998

Net Revenues. Our net revenues were $70.4 million for the nine months
ended June 27, 1999, compared to $54.6 million for the nine months ended June
28, 1998, an increase of $15.8 million or 28.9%. The increase in net revenues
was mostly attributable to the Chicago and New York market stations where our
net revenues increased 34.3% and 31.7%, respectively, due to high ratings,
robust local economies and increased advertising rates. All of the markets in
which we operate stations experienced strong increases in net revenues,
including our Los Angeles FM station where net revenue increased by 19.4%.

Station Operating Expenses. Total station operating expenses were $31.8
million for the nine months ended June 27, 1999, compared to $28.3 million for
the nine months ended June 28, 1998, an increase of $3.5 million or 12.4%. The
higher station operating expenses were caused mainly by the inclusion of the
results of the recent acquisitions in San Antonio and Puerto Rico as well as
JuJu Media, Inc. accounting for $2.7 million or 77.1% of the increase in station
operating expenses. To a lesser extent, all of our other radio stations
experienced a 2.7% increase in operating expenses due to higher commissions and
music license fees associated with higher sales. In the New York and Miami
markets, we had an increase in advertising, promotional and audience research
expenses. This increase in operating expenses was offset by lower general and
administrative expenses due to improved collections.

Broadcast Cash Flow. Broadcast cash flow was $38.6 million for the nine
months ended June 27, 1999, compared to $26.3 million for the nine months ended
June 28, 1998, an increase of $12.3 million or 46.8%. This increase was
attributable to strong revenue growth and effective management of operating
expenses. Our broadcast cash flow margin increased to 54.8% for the nine months
ended June 27, 1999 compared to 48.2% for the nine months ended June 28, 1998.

Corporate Expenses. Total corporate expenses were $7.7 million for the
nine months ended June 27, 1999, compared to approximately $5.1 million for the
nine months ended June 28, 1998, an increase of $2.6 million or 51.0%. The
increase in corporate expenses resulted mainly from performance bonuses paid to
our Chief Executive Officer, increases in the number of our employees and
increased travel and other corporate overhead expenses relating to our expansion
into new markets.

EBITDA. EBITDA was $30.9 million for the nine months ended June 27, 1999,
compared to $21.2 million for the nine months ended June 29, 1998, an increase
of $9.7 million or 45.7%. Our EBITDA margin was 43.9% for the nine months ended
June 27, 1999, compared to 38.8%

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for the nine months ended June 28, 1998. The increase in EBITDA and EBITDA
margin was caused by the increase in net revenues which was partially offset by
the increase in station operating expenses and corporate expenses.

Depreciation and Amortization. Depreciation and amortization expense was
$7.2 million for the nine months ended June 27, 1999, compared to $6.9 million
for the nine months ended June 28, 1998, an increase of $0.3 million or 4.3%.
The increase was related to an increase in amortization costs as a result of the
stations purchased in Puerto Rico, WCMA-FM, WMEG-FM and WEGM-FM.

Operating Income. Operating income was $23.7 million for the nine months
ended June 27, 1999, compared to $14.3 million for the nine months ended June
28, 1998, an increase of $9.4 million or 65.7%. The increase was due to the
increase in net revenues, partially offset by the increase in operating
expenses.

Interest Expense, Net. Interest expense was $15.7 million for the nine
months ended June 27, 1999, compared to $16.0 million for the nine months ended
June 28, 1998, a decrease of $0.3 million or 1.9%. This decrease was due to the
repurchase of $13.2 million aggregate principal amount of our 12 1/2% notes due
2002 in the first quarter of fiscal 1998.

Other Income (Expense). We had other expenses of $0.5 million for the nine
months ended June 27, 1999, compared to other income of $36.2 million for the
nine months ended June 28, 1998. The other expenses in 1999 resulted primarily
from an additional write-down of owned vacant real estate in the Los Angeles
area. The other income in 1998 was the result of a gain on the sale of our AM
stations during the nine months ended June 28, 1998.

Net Income. Our net income was $4.3 million for the nine months ended June
27, 1999, compared to $19.1 million for the nine months ended June 28, 1998, a
decrease of $14.8 million or 77.5%. The decrease was caused by the absence of
the gain on the sale of our AM stations.

After-Tax Cash Flow. After-tax cash flow was $11.5 million for the nine
months ended June 27, 1999, compared to $5.8 million for the nine months ended
June 28, 1998, an increase of $5.7 million or 98.3%. This increase was primarily
attributable to an increase in EBITDA offset by higher income taxes.

Fiscal Year 1998 Compared to Fiscal Year 1997

Net Revenues. Net revenues were $76.1 million for fiscal year 1998,
compared to $60.0 million for fiscal year 1997, an increase of $16.1 million or
26.8%. This increase was due primarily to the inclusion of the full year results
of WRMA-FM, WXDJ-FM and WLEY-FM which we purchased on March 27, 1997. The
increase in net revenues also resulted from a significant increase in the net
revenues of our New York stations, WPAT-FM and WSKQ-FM, and our Miami station,
WCMQ-FM, each of whose results were positively impacted by increased ratings.
The increase in net revenues at each of our stations was partially offset by a
decrease in net revenues from our Los Angeles station, KLAX-FM, in addition to
the loss of revenues attributable to the sale of our AM stations in New York,
Miami and Los Angeles.

Station Operating Expenses. Total station operating expenses were $39.5
million for fiscal year 1998, compared to $31.0 million for the fiscal year
1997, an increase of $8.5 million or 27.4%. The increase in operating expenses
was caused mainly by the inclusion of the full year results of WRMA-FM, WXDJ-FM
and WLEY-FM.

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Broadcast Cash Flow. Broadcast cash flow was $36.6 million for fiscal year
1998, compared to $29.0 million for fiscal year 1997, an increase of $7.6
million or 26.2%. This increase was attributable to significant increases in net
revenues partially offset by increased station operating expenses. Our broadcast
cash flow margin was 48.1% for fiscal year 1998, compared to 48.3% for fiscal
year 1997.

Corporate Expenses. Total corporate expenses were $6.9 million for fiscal
year 1998, compared to $5.6 million for fiscal year 1997, an increase of $1.3
million or 23.2%. The increase in corporate expenses was caused mainly by
increased professional fees resulting from potential acquisitions and related
financings.

EBITDA. EBITDA was $29.7 million for fiscal year 1998, compared to $23.4
million for fiscal year 1997, an increase of $6.3 million or 26.9%. The increase
in EBITDA was caused by the increase in net revenues, partially offset by
increases in broadcasting operating expenses and corporate expenses, as
described above. Our EBITDA margin was 39.0% for each of the fiscal years 1998
and 1997.

Depreciation and Amortization. Depreciation and amortization expense was
$8.9 million for fiscal year 1998, compared to $7.6 million for fiscal year
1997, an increase of $1.3 million or 17.1%. The increase was related to an
increase in amortization costs as a result of the acquisitions of WRMA-FM,
WXDJ-FM and WLEY-FM offset by the decrease attributable to the sale of the AM
stations.

Operating Income. Operating income was $20.9 million for fiscal year 1998,
compared to $15.8 million for fiscal year 1997, an increase of $5.1 million or
32.3%. The increase was due to the significant increase in net revenues,
partially offset by the increase in operating expenses.

Interest Expense, Net. Interest expense was $20.9 million for fiscal year
1998 compared to $22.2 million for fiscal year 1997, a decrease of $1.3 million
or 5.9%. The decrease was primarily due to the repurchase of $13.2 million
aggregate principal amount of our 12 1/2% notes due 2002 in the first quarter
of 1998.

Other Income (Expense). Other income was $36.0 million for fiscal year
1998, including gain on sale of AM stations of $36.2 million, compared to other
expense of $0.8 million for fiscal year 1997. The other income in 1998 was due
to the gain on the sale of the AM stations. The other expense in 1997 was due
primarily to an additional write-down of owned vacant real estate in the Los
Angeles area.

Net Income (Loss). Our net income for fiscal year 1998 was $18.8 million,
compared to a net loss of $6.2 million for fiscal year 1997. The net income
resulted from the increase in operating income, the gain from the sale of the AM
stations and a slight decrease in interest expenses, partially offset by
additional income taxes.

After-Tax Cash Flow. After-tax cash flow was $7.5 million for fiscal year
1998, compared to $3.1 million for fiscal year 1997, an increase of $4.4 million
or 141.9%. This increase was primarily attributable to an increase in EBITDA,
decrease in net interest expense and gain offset by higher income taxes.

Fiscal Year 1997 Compared to Fiscal Year 1996

Net Revenues. Net revenues were $60.0 million for fiscal year 1997,
compared to $48.6 million for fiscal year 1996, an increase of $11.4 million, or
23.5%. This increase was due primarily to the inclusion of results of WRMA-FM
and WXDJ-FM, which we purchased on

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March 27, 1997, and the inclusion of the results of WPAT-FM for the entire year.
The increase in net revenues also resulted from an increase of $1.1 million in
net revenues from our Los Angeles stations and our acquisition of WLEY-FM in
Chicago which increased net revenues by $0.4 million. These increases in net
revenues were offset by decreases in net revenues from certain of our existing
stations, including a decrease of $3.0 million from the operations of WCMQ-AM
and WCMQ-FM, and a decrease of $0.5 million from the operations of WSKQ-FM and
WXLX-AM.

Station Operating Expenses. Total station operating expenses were $31.0
million for fiscal year 1997, compared to $27.9 million for fiscal year 1996, an
increase of $3.1 million, or 11.1%. The increase in station operating expenses
was caused mainly by the inclusion of the results of WRMA-FM and WXDJ-FM in
Miami and our station in Chicago, WLEY-FM, as well as the inclusion of a full
year of expenses for WPAT-FM.

Broadcast Cash Flow. Broadcast cash flow was $29.0 million for fiscal year
1997, compared to $20.8 million for fiscal year 1996, an increase of $8.2
million or 39.4%. Our broadcast cash flow margin was 48.3% for fiscal year 1997,
compared to 42.8% for fiscal year 1996. The increases in broadcast cash flow and
broadcast cash flow margin were attributable to our purchase of WRMA-FM and
WXDJ-FM which contributed to an increase in sales generated by our Miami
stations of $4.6 million, partially offset by increased expenses of $0.3
million.

Corporate Expenses. Total corporate expenses were $5.6 million for fiscal
year 1997, compared to $3.7 million for fiscal year 1996, an increase of $1.9
million or 51.4%. The increase in corporate expenses was caused by higher salary
expense and higher professional fees associated with potential acquisitions and
related financings.

EBITDA. EBITDA was $23.4 million for fiscal year 1997, compared to $17.0
million for fiscal year 1996, an increase of $6.4 million or 37.6%. The increase
in EBITDA was caused by the increase in net revenues, partially offset by an
increase in operating expenses, as described above. Our EBITDA margin was 39.0%
for fiscal year 1997, compared to 35.0% for fiscal year 1996. This increase was
attributable to the increased broadcast cash flow margin offset by the increased
corporate expenses related to operating more stations.

Depreciation and Amortization. Depreciation and amortization expense was
$7.6 million for fiscal year 1997, compared to $4.6 million for fiscal year
1996, an increase of $3.0 million or 65.2%. The significant increase was related
to an increase in amortization costs as a result of the acquisition of WRMA-FM,
WXDJ-FM, WLEY-FM and WPAT-FM.

Operating Income. Operating income was $15.8 million for fiscal year 1997,
compared to $12.5 million for fiscal year 1996, an increase of $3.3 million, or
26.4%. The increase was due to the significant increase in net revenues
partially offset by the increase in operating expenses.

Interest Expense, Net. Interest expense was $22.2 million for fiscal year
1997 compared to $16.5 million for fiscal year 1996, an increase of $5.7 million
or 34.5%. The increase was caused primarily by the increase in interest expense
associated with our 11% notes issued to partially finance the acquisitions of
WRMA-FM, WXDJ-FM and WLEY-FM.

Other Expense. Other expense for fiscal year 1997 was $0.8 million
compared to $1.6 million for fiscal year 1996, a decrease of $0.8 million or
50.0%. This expense was due primarily to an additional write-down of owned
vacant real estate in the Los Angeles area.

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Net Loss. Our net loss for fiscal year 1997 was $6.2 million, compared to
a net loss of $4.5 million for fiscal year 1996, an increase in the net loss of
$1.7 million, or 37.8%. The increase in the net loss was a result of an
extraordinary loss on the retirement of old debt for an amount paid in excess of
our carrying value and the write-off of the related unamortized debt issuance
costs.

After-Tax Cash Flow. After-tax cash flow was $3.1 million for fiscal year
1997, compared to $0.1 million for fiscal year 1996, an increase of $3.0
million. This increase was attributable to increased EBITDA offset by higher
interest expense.

LIQUIDITY AND CAPITAL RESOURCES

Our primary source of liquidity is cash provided by operations and, to the
extent necessary, undrawn commitments that will be available under the senior
credit facilities we intend to enter into after the completion of this offering
and the concurrent senior subordinated notes offering. We intend to use a
significant portion of our capital resources to make future acquisitions. These
acquisitions will be funded from the senior credit facilities and internally
generated cash flow.

From time to time we may borrow under the senior credit facilities in order
to finance acquisitions, make capital improvements and to pay for other similar
investments and transactions. The purchase price for our pending acquisition in
Puerto Rico is $90.0 million. In connection with this acquisition, we have made
an initial nonrefundable deposit of $10.0 million. We expect to finance this
acquisition from a combination of bank borrowings and cash on hand. Other
sources of liquidity will include amounts available under the revolving credit
line included in the senior credit facilities. Our ability to borrow in excess
of the commitments provided by the senior credit facilities will be limited by
the terms of the indenture governing our senior subordinated notes due 2009 to
be issued in the concurrent senior subordinated notes offering. Additionally,
such terms will place restrictions on us with respect to the sale of assets,
liens, investments, dividends, debt repayments, capital expenditures,
transactions with affiliates and consolidations and mergers, among other things.

Net cash flows provided by operating activities were $11.7 million and $5.0
million for the nine months ended June 27, 1999 and June 28, 1998, respectively.
Net cash flows provided by operating activities were $10.9 million, $6.4 million
and $8.8 million for fiscal years 1998, 1997 and 1996, respectively. Changes in
our net cash flow from operating activities are primarily a result of changes in
advertising revenues and station operating expenses which are affected by the
acquisition and disposition of stations during those periods.

Net cash flows used in investing activities were $28.0 million for the nine
months ended June 27, 1999 and net cash flows provided by investing activities
were $32.5 million for the nine months ended June 28, 1998. Net cash flows
provided by investing activities were $32.2 million for fiscal year 1998 and net
cash flows used in investing activities were $144.4 million and $90.2 million
for fiscal years 1997 and 1996, respectively. Net cash flows used in financing
activities were $0.4 million and $17.7 million for the nine months ended June
27, 1999 and June 28, 1998, respectively. Net cash flows used in financing
activities were $17.8 million for fiscal year 1998 and net cash flows provided
by financing activities were $144.8 million and $69.0 million for fiscal years
1997 and 1996, respectively.

For fiscal year 1999, management anticipates total capital expenditures to
be between $2.0 million and $2.4 million. We anticipate that these expenditures
will be financed by funds from operations.

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Management believes that cash from operating activities, together with cash
on hand, should be sufficient to permit us to meet our obligations for the
foreseeable future, including: (1) required significant cash interest payments
pursuant to the terms of the senior subordinated notes due 2009, (2) operating
obligations, and (3) capital expenditures. We base these beliefs on the
following assumptions, but cannot assure you that they will be true:

- the economic conditions within the radio broadcasting market and economic
conditions in general will not deteriorate in any material respect;

- we will be able to successfully implement our business strategy;

- we will not incur any material unforeseen liabilities, including, without
limitation, environmental liabilities; and

- no future acquisitions will adversely affect our liquidity.

We continuously review, and are currently reviewing, opportunities to
acquire additional radio stations, primarily in the largest Hispanic markets in
the United States. We engage in discussions regarding potential acquisitions
from time to time in the ordinary course of business. Other than the pending
acquisition in Puerto Rico described in this prospectus, we have no written
understandings, letter of intent or contracts to acquire radio stations. We
anticipate that any future radio station acquisitions would be financed
primarily by borrowings under our senior credit facilities and funds generated
from operations, as well as equity financings, additional permitted debt
financings or a combination of these sources. However, there can be no assurance
that financing from any of these sources, if available, will be available on
favorable terms.

IMPACT OF INFLATION, MARKET RISK EXPOSURE, CURRENCY FLUCTUATIONS

We believe that inflation has not had a material impact on our results of
operations for each of our fiscal years in the three-year period ended September
27, 1998 and in the nine month period ended June 27, 1999. However, there can be
no assurance that future inflation would not have an adverse impact on our
operating results and financial condition.

We do not have significant market risk exposure since we do not have any
outstanding variable rate debt or derivative financial and commodity instruments
as of June 27, 1999. We are not subject to currency fluctuations since we do not
have any international operations.

YEAR 2000 ISSUE

The year 2000 issue is the result of computer programs which use two digits
rather than four to define the applicable year. Any of our computer programs or
hardware that have date-sensitive software or embedded chips may recognize a
date using "00" as the year 1900 rather than the year 2000. This could cause
system failures or miscalculations at our broadcast and corporate locations
which in turn could cause disruptions of our operations, including, among other
things, a temporary inability to: produce broadcast signals, process financial
transactions, or engage in similar normal business activities.

We have performed a preliminary analysis of potential problems related to
the year 2000 issue. Internally, we bear some risks in the following areas:
computer hardware and software for our accounting and administrative functions,
computer-controlled programming of music and the transmission of our signals.
Externally, we are at risk, like most companies, of losing power and phone
lines.

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<PAGE> 42

In the administrative area, the vast majority of our hardware and software
has been purchased over the past two years and is year 2000 compliant. We have
no more than 30 computers that may need to be replaced or upgraded. In the
programming areas we utilize a system which is year 2000 compliant. Studio
equipment, transmitters and other broadcasting equipment are not date sensitive
and, consequently, do not pose a significant year 2000 threat, although we will
continue to seek assurances and/or upgrades from all significant vendors. Our
MIS manager and one of our engineers have visited the majority of our locations
and reported to upper management on definitive problems and solutions. As of
September 1, 1999, they have visited and inspected all of our stations. As of
June 27, 1999 we have spent $0.1 million to upgrade/replace non-compliant
systems and equipment.

The greatest threat to our ability to continue broadcasting on and after
January 1, 2000 comes from the utilities upon which we are dependent. To date,
we are not aware of any external utility vendor with a year 2000 issue that
would materially impact our results of operations, liquidity, or capital
resources. However, we have no means for ensuring that such vendor will be year
2000 compliant. The inability of such vendors to adequately address the year
2000 issue on a timely basis could have a material adverse effect on us,
including loss of revenue, and substantial unanticipated costs and service
interruptions. In addition, disruptions in the economy generally resulting from
the year 2000 issue could also materially adversely affect us.

While we believe our efforts will provide reasonable assurance that
material disruptions will not occur due to internal failure, the possibility of
interruption still exists. We do not anticipate spending more than an additional
$0.2 million to become year 2000 compliant. We are performing this analysis with
our MIS manager, our engineers and our accounting staff. We have anticipated
that all assessments and solutions will be in place by the fourth quarter of
fiscal year 1999. We are in the process of developing a contingency plan to
address possible failures by us or our vendors related to Year 2000 compliance.

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<PAGE> 43

BUSINESS

Spanish Broadcasting System, Inc. was founded in 1983 and is the second
largest Spanish-language radio broadcasting company in the United States. We
currently own and operate 13 FM radio stations and have agreed to purchase eight
additional radio stations in Puerto Rico. We also have entered into a memorandum
of understanding to sell our two stations located in the Florida Keys. Eleven of
our stations are located in six of the largest Hispanic markets in the United
States, including Los Angeles, Puerto Rico, New York, Miami, Chicago and San
Antonio. Our radio stations reach over 51% of the U.S. Hispanic population. Our
WSKQ-FM station in New York is ranked in the Spring 1999 Arbitron(C) ratings as
the number one station in its target demographic group (men and women ages
25-54).

- net revenues grew at a compound annual rate of 29.3%, from $55.0 million
to $91.9 million;

- broadcast cash flow grew at a compound annual rate of 35.8%, from $26.5
million to $48.9 million; and

- EBITDA grew at a compound annual rate of 35.5%, from $21.5 million to
$39.5 million.

SBS is led by Mr. Raul Alarcon, Jr., who has been Chief Executive Officer
since June 1994, President and a director since October 1985 and who will become
Chairman of the Board of Directors upon completion of this offering. The Alarcon
family has been involved in Spanish-language radio broadcasting since the
1950's, when Mr. Raul Alarcon, Sr., our Chairman Emeritus and a member of our
board of directors, established his first radio station in Camaguey, Cuba.
Members of our senior management team, on average, have over 15 years of
experience in Spanish-language media and radio broadcasting.

MARKET OPPORTUNITY

Our radio stations target the largest Hispanic markets in the United
States, including Puerto Rico. We believe that these markets have significant
growth potential for the following reasons:

- HISPANIC POPULATION GROWTH. The U.S. Hispanic population, approximately
34.3 million people, is the fastest growing segment of the U.S.
population, growing at approximately

37
<PAGE> 44

four times the rate of the population as a whole. By 2005, Hispanics are
projected to become the largest minority group in the United States and
by 2010, the second largest Spanish-speaking population in the world. We
believe that these factors will lead to significant increases in demand
for Spanish-language radio, music and entertainment.

- ATTRACTIVE DEMOGRAPHIC GROUP FOR ADVERTISERS. The U.S. Hispanic
population accounted for consumer spending of $380.0 billion in 1998
(7.2% of total U.S. consumer spending), an increase of 78.4% since 1990.
By 2000, U.S. Hispanics are expected to account for estimated consumer
spending of $457.8 billion (8.2% of total U.S. consumer spending), and by
2010 are expected to account for estimated consumer spending of $965.3
billion (12% of total U.S. consumer spending), far outpacing the expected
growth of overall U.S. consumer spending during the same period. Although
Hispanic consumer spending represented 7.2% of total consumer spending in
the United States in 1998, advertising expenditures targeted at Hispanics
represented only 1.4% of total advertising expenditures. We believe that
as U.S. Hispanic consumer spending continues to grow relative to overall
consumer spending, the advertising expenditures targeted at Hispanics
will increase significantly, eventually closing the gap between the
current level of advertising targeted at Hispanics and the buying power
that the Hispanic population in the United States represents. In addition
to increasing buying power, according to market research and compared to
the population as a whole, U.S. Hispanics (1) generally spend a larger
percentage of their household income on consumer goods, (2) have larger
households (3.6 persons per household compared to the average 2.5
persons), (3) are generally younger (median 26 years compared to 35
years) and, (4) on average, tend to be more brand conscious. These
factors make U.S. Hispanics an attractive target audience for many major
U.S. advertisers.

- GROWTH IN SPANISH-LANGUAGE ADVERTISER SPENDING. In 1998, a total of $1.7
billion was spent on Spanish-language advertising, compared to $1.1
billion in 1995. This represents a compound annual growth rate of 17.2%,
which is more than double the total advertising growth rate over the same
period. Approximately 26% of the $1.7 billion spent on Spanish-language
advertising was directed to Spanish-language radio. We believe that major
advertisers have found that Spanish-language advertising, and
Spanish-language radio advertising in particular, is a more effective
means of reaching the growing U.S. Hispanic audience compared to
English-language media.

- GROWTH IN SPANISH-LANGUAGE ADVERTISING RATES. We believe
Spanish-language advertising rates have been rising at a faster rate in
recent years than rates for general media, yet Spanish-language
advertising rates are still generally lower than for comparable
English-language media. We believe that as advertisers continue to
recognize the buying power of the U.S. Hispanic population, the gap in
advertising rates between Spanish-language and English-language media
will continue to narrow.

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<PAGE> 45

Spanish-language music will contribute to the continued popularity of
Spanish-language radio as a source of entertainment, information and
culture for the U.S. Hispanic population.

BUSINESS STRATEGY

OPERATING STRATEGY

Our operating strategy focuses on maximizing our radio stations' appeal to
our audience and our advertisers while minimizing operating expenses in order to
grow revenue and cash flow. To achieve these goals, we focus on:

Providing High-Quality Spanish-Language Programming. We format the
programming of each of our stations to capture a significant share of the
Spanish-language audience. We use extensive market research including third
party consultants and periodic music testing to assess listener preferences in
each station's target demographic audience. We then refine our programming to
reflect the results of this research and testing. Because the U.S. Hispanic
population is so diverse, consisting of numerous identifiable groups from many
different countries of origin each with its own cultural and musical heritage,
we strive to make ourselves intimately familiar with the musical tastes and the
preferences of each of the various ethnic Hispanic groups and customize our
programming accordingly.

Retaining Strong Local Management Teams. We employ local management teams
in each of our markets who are responsible for the day-to-day operations of our
radio stations. Our key local managers generally consist of a general station
manager, general sales manager and programming director. Stations are staffed
with managers who have experience and knowledge of the local radio market and
the local Hispanic market. Because of the cultural diversity of the Hispanic
population from region to region in the United States, decisions regarding
day-to-day programming, sales and promotional efforts are made by local
managers. We believe this approach improves our flexibility and responsiveness
to changing conditions in each of the markets we serve.

Utilizing Aggressive Sales Efforts. Our sales force focuses on converting
audience share into advertising revenue. In order to encourage an aggressive and
focused sales force, we have developed compensation structures tied to
advertising revenue. We seek to maximize our sales to national advertisers
because national advertising generally commands a higher rate per advertising
spot than does local advertising. We have attracted key sales executives from
general market radio who have applied their expertise and relationships with the
advertising community to increase our share of advertising from leading general
market advertisers. We believe that our focused sales efforts are working to
increase media spending targeted at the U.S. Hispanic consumer market and will
enable us to continue to achieve significant revenue growth, and to

39
<PAGE> 46

narrow the gap between the level of advertising currently targeted at U.S.
Hispanics and the potential buying power of the U.S. Hispanic population.

Controlling Operating Costs. By employing a disciplined approach to
operating our radio stations, we have been able to achieve operating margins
which we believe are among the highest in the radio broadcast industry. We
emphasize control of each station's operating costs through detailed budgeting,
tight control over staffing levels and expense analysis. While local management
is responsible for the day-to-day operation of each station, corporate
management is responsible for long-range and strategic planning, establishing
policies and procedures, maximizing cost savings where centralized activity is
appropriate, allocating resources and maintaining overall control of the
stations.

Making Effective Use of Promotions and Special Events. We believe that
effective promotional efforts play a significant role in both adding new
listeners and increasing listener loyalty. Our promotional and marketing
campaigns focus on increasing Hispanic consumer awareness of advertisers'
products and services. Our goal is to use our expertise at marketing to the
Hispanic consumer in each of the markets in which we own and operate stations,
thereby attracting a large share of advertising revenue. We have organized
special promotional appearances, such as station van appearances at client
events, concerts and tie-ins to major events which form an important part of our
marketing strategy. Many of these events build advertiser loyalty because they
enable us to offer advertisers an additional means of reaching the Hispanic
consumer. In many instances, these events are co-sponsored by local television
and newspapers, allowing our advertisers to reach a larger combined audience.

Maintaining Strong Community Involvement. We have historically been, and
will continue to be, actively involved within the local communities that we
serve. Our radio stations participate in numerous community programs,
fund-raisers and activities benefitting the local community and Hispanics
abroad. Other examples of our community involvement include free public service
announcements, free equal-opportunity employment announcements, tours and
discussions held by radio station personalities with school and community groups
designed to limit drug and gang involvement, free concerts and events designed
to promote family values within the local Hispanic communities, and extended
coverage, when necessary, of significant events which have an impact on the U.S.
Hispanic population. Our stations and members of our management have received
numerous community service awards and acknowledgments from government entities
and community and philanthropic organizations for their service to the
community. We believe that this involvement helps to build and maintain station
awareness and listener loyalty.

ACQUISITION STRATEGY

Our acquisition strategy is to acquire radio stations in the largest U.S.
Hispanic markets. We consider acquisitions of stations in our existing markets,
as well as acquisitions of stations in other markets with a large Hispanic
population, where we can maximize our revenues through aggressive sales to U.S.
Hispanic and general market advertisers. These acquisitions may include stations
which do not currently target the U.S. Hispanic market, but which we believe can
be successfully reformatted.

In analyzing potential radio station acquisition candidates, we consider
many factors including:

- the size of the Hispanic market;

- anticipated growth, demographics, and other characteristics of the
market;

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<PAGE> 47

- the nature and number of competitive stations in the market;

- the nature of other media competition in the station's market;

- the probability of achieving operating synergies through multiple station
ownership within the target market;

- the existing or potential quality of the broadcast signal and
transmission facility;

- the station's ratings, revenue and operating cash flow; and

- the price and terms of the purchase.

By implementing our operating strategy, we are successful in many markets
where our competitors have greater resources than we do. For example:

- WPAT-FM -- NEW YORK. When we acquired WPAT-FM in March of 1996, the
station had net broadcasting revenues of $8.1 million for the year ended
December 1995. Following our acquisition of WPAT-FM, we changed the
station's format to Spanish Adult Contemporary and integrated the station
into our existing New York operations. For the nine-month period ended
June 27, 1999, WPAT-FM generated net broadcasting revenues of $9.6
million, and according to the Spring 1999 Arbitron(C) Survey was the
number two ranked Spanish-language radio station in the New York market.

- WLEY-FM -- CHICAGO. When we acquired WLEY-FM (formerly WYSY-FM) in March
of 1997, the station had net broadcasting revenues of $5.0 million for
the 12-month period ended December 31, 1996. Following our acquisition of
WLEY-FM, we hired new management, changed the station's format to
Regional Mexican. For the nine-month period ended June 27, 1999, WLEY-FM
generated net broadcasting revenues of $7.4 million and according to the
Spring 1999 Arbitron(C) Survey was the number one ranked Spanish-language
radio station in Chicago.

- KLEY-FM -- SAN ANTONIO. When we acquired KLEY-FM in May of 1998, the
station had net broadcasting revenues of $1.2 million for the 12-month
period ended February 28, 1998, and was the number four ranked
Spanish-language radio station in San Antonio. Following our acquisition
of KLEY-FM, we hired new management, changed the station's format to
Tejano-Regional Mexican. For the nine-month period ended June 27, 1999,
KLEY-FM generated net broadcasting revenues of $1.3 million and according
to the Spring 1999 Arbitron(C) Survey was the number three ranked
Spanish-language radio station in San Antonio.

INTERNET STRATEGY

Our Internet strategy is designed to complement our existing business and
to enable us to capitalize on our U.S. Hispanic market expertise. The core of
our strategy is LaMusica.com, an Internet Web site and on-line community focused
on the U.S. Hispanic market. This Web site offers all of our radio stations'
broadcasts through the use of audio streaming technology and will provide our
advertisers with a complementary means of reaching their target audience.

PENDING TRANSACTIONS

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<PAGE> 48

WIOA-FM, WIOB-FM, WIOC-FM, WCOM-FM, WZMT-FM, WZNT-FM, WOYE-FM, and WCTA-FM. The
purchase price we have agreed to pay for these companies is $90.0 million. In
connection with this acquisition, we have made an initial nonrefundable deposit
of $10.0 million. The definitive agreement contains customary representations
and warranties, and the closing of our acquisition of these companies is subject
to the satisfaction of certain customary conditions, including receipt of
regulatory approval from the FCC. We expect to finance the purchase of these
companies from a combination of bank borrowings and cash on hand. Prior to the
closing of these acquisitions, (but following the expiration of the applicable
waiting period under the Hart-Scott Rodino Antitrust Improvements Act of 1976,
as amended), we intend to operate these stations under a local marketing
agreement pursuant to which we will pay a monthly fee in exchange for the
exclusive right to program and sell commercial announcements for each of the
stations. We expect to close our acquisition of these companies by the end of
December 1999. We cannot assure you, however, that we will be able to complete
our acquisition of the companies during the expected time frame or at all. The
results of operations of these companies have not been included in our pro forma
financial statements.

We have entered into a memorandum of understanding with Mr. Alarcon, Sr.,
our Chairman Emeritus and a member of our board of directors for the sale by us
of the assets and liabilities of radio station WVMQ-FM operating in Key West,
Florida and radio station WZMQ-FM operating in Key Largo, Florida. The sale
price to be paid by Mr. Alarcon, Sr. for these stations is $700,000. The
definitive agreement will contain customary representations, warranties and
indemnities, and the closing of the sale of these stations will be subject to
the satisfaction of certain conditions, including approval from the FCC, the
completion of this offering and the receipt by Mr. Alarcon, Sr. of all payments
due to him as a selling stockholder in this offering. We cannot assure you that
the sale of these stations will occur during the expected time frame or at all.

TOP 10 HISPANIC RADIO MARKETS IN THE UNITED STATES

The shaded areas in the table below indicate markets where we currently own
and operate radio stations in the United States. Population estimates are for
1998 and are based upon statistics provided by the U.S. Bureau of the Census and
the Strategy Research Corporation -- 1998 U.S. Hispanic Market Report.

<TABLE>
<CAPTION>
HISPANIC % HISPANIC OF % OF TOTAL
POPULATION TOTAL POPULATION U.S. HISPANIC
RANK MARKET (000) IN THE MARKET POPULATION
- ---- --------------------------- ---------- ---------------- -------------
<C> <S> <C> <C> <C>
1. Los Angeles 6,325.9 38.7% 18.4%
2. Puerto Rico 3,811.7 99.6 11.1
3. New York 3,645.1 18.1 10.6
4. Miami 1,422.6 38.1 4.1
5. San Francisco/San Jose 1,243.0 18.4 3.6
6. Chicago 1,198.3 12.7 3.5
7. Houston 1,141.0 24.2 3.3
8. San Antonio 1,064.7 51.6 3.1
9. McAllen/Brownsville (Texas) 823.7 89.5 2.4
10. Dallas/Ft. Worth 786.9 14.9 2.3
-------- ----
TOP 10 HISPANIC MARKETS 21,462.9 29.3% 62.4%
======== ====
</TABLE>

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<PAGE> 49

PROGRAMMING

We format the programming of each of our stations to capture a substantial
share of the U.S. Hispanic audience. The U.S. Hispanic population is diverse,
consisting of numerous identifiable groups from many different countries of
origin, each with its own musical and cultural heritage. The music, culture,
customs and Spanish dialects vary from one radio market to another. We strive to
be very familiar with the musical tastes and preferences of each of the various
ethnic Hispanic groups and customize our programming to match the local
preferences of our target demographic audience in each market we serve. We have
an in-house research department in Miami of 16 employees who conduct extensive
radio market research on a daily, weekly, monthly and annual basis. By employing
listener study groups and telephone surveys modeled after Arbitron(C) written
survey methodology, but with even larger sample sizes than Arbitron(C), we are
able to assess listener preferences, track trends and gauge our success on a
daily basis, well before Arbitron(C) results are published. In this manner, we
can respond immediately to changing listener preferences and trends by refining
our programming to reflect the results of our research and testing. Each of our
programming formats is described below.

- Spanish Tropical. The Spanish Tropical format primarily consists of
salsa, merengue, and cumbia music. Salsa is dance music combining Latin
Caribbean rhythms with jazz originating from Puerto Rico, Cuba and the
Dominican Republic, which is popular with Hispanics living in New York
and Miami. Merengue music is up-tempo dance music originating from the
Dominican Republic. Cumbia is a festive, folkloric music which originated
in Colombia.

- Regional Mexican. The Regional Mexican format consists of various types
of music played in different regions of Mexico such as ranchera, nortena,
banda and cumbia. Ranchera music, originating from Jalisco, Mexico, is a
traditional folkloric sound commonly referred to as mariachi music.
Mariachi music features acoustical instruments and is considered the
music indigenous to Mexicans who live in country towns. Nortena means
northern, and is representative of Northern Mexico. Featuring an
accordion, nortena has a polka sound with a distinct Mexican flavor.
Banda is a regional format from the state of Sinaloa, Mexico and is
popular in California. Banda resembles up-tempo marching band music with
synthesizers.

- Tejano. The Tejano format consists of music based on Mexican themes but
which originated in Texas. Tejano music is a combination of contemporary
rock, ranchera and country music, the lyrics of which are primarily sung
in Spanish.

- Spanish Adult Contemporary. The Spanish Adult Contemporary format
includes pop, Latin rock, and ballads. This format is similar to English
Adult Contemporary featured on contemporary hit radio stations.

- Spanish Adult Top 40. The Spanish Adult Top 40 format consists of a
variety of Latin hit songs from the 1980's and 1990's.

- Spanish Oldies. The Spanish Oldies format includes a variety of Latin
music mainly from the 1950's, 1960's and 1970's.

- Dance. The Dance format consists of upbeat dance and house rhythms,
mainly from the 1980's and 1990's, that are played in dance clubs, and it
includes English-language music.

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<PAGE> 50

The programming formats of our radio stations and the target demographic of
each station are as follows:

<TABLE>
<CAPTION>
TARGET
DEMOGRAPHIC
CITY STATION FORMAT (BY AGE)
---- ------- -------------------------- -----------
<S> <C> <C> <C>
New York WSKQ-FM Spanish Tropical 25-54
WPAT-FM Spanish Adult Contemporary 25-54

Los Angeles KLAX-FM Regional Mexican 18-34

Puerto Rico WCMA-FM Spanish Adult Top 40 18-34
WMEG-FM Dance 18-34
WEGM-FM Dance 18-34

Miami WRMA-FM Spanish Adult Contemporary 25-49
WXDJ-FM Spanish Tropical 18-34
WCMQ-FM Spanish Oldies 35-54

Chicago WLEY-FM Regional Mexican 18-34

San Antonio KLEY-FM Tejano-Regional Mexican 18-34
</TABLE>

RADIO STATION PORTFOLIO

The following is a general description of each of our markets and our radio
stations within each of these markets. Audience share and audience share rank
data for the New York, Los Angeles, Miami, Chicago and San Antonio markets are
from the Spring 1999 Arbitron(C) Survey based on surveys reported four times a
year. Audience share and audience share rank data for the Puerto Rico market are
from the Spring 1999 Arbitron(C) Survey, based on surveys reported twice a year.
Estimated revenue share information for our Chicago market is derived from
Hungerford data, and for all other markets, revenue share information is derived
from BIA Research and Miller Kaplan data. Revenue rank and revenue share
information are reported cumulatively for each calendar quarter and, therefore,
include the period from January 1 through the date indicated.

NEW YORK

The New York market is the second largest radio market in terms of
advertising revenues which are projected to be $688.1 million in 1999. In 1998,
the New York market had the third largest U.S. Hispanic population, with
approximately 3.6 million Hispanics, which is approximately 18.1% of the New
York market's total population. We believe that we own the strongest franchise
in terms of audience share and number of Spanish-language radio stations in the
New York market, with two of the three FM Spanish-language radio stations. New
York experienced annual radio revenue growth of 10.3% between 1992 and 1998, and
radio revenue in New York is expected to continue growing at an annual rate of
9.7% between 1999 and 2002.

<TABLE>
<CAPTION>
SUMMER
SPRING 1999 WINTER 1999 FALL 1998 1998
WSKQ-FM ----------- ----------- --------- ------
<S> <C> <C> <C> <C>
Audience share (12-plus)............................. 4.8 4.5 5.2 6.0
Audience share rank (12-plus)........................ 3 3 3 1
Audience share (25-54)............................... 5.9 5.6 6.2 7.2
Audience share rank (25-54).......................... 1 2 2 1
</TABLE>

<TABLE>
<CAPTION>
YTD YTD YTD YTD
6/30/99 3/31/99 12/31/98 9/30/98
----------- ----------- --------- -------
<S> <C> <C> <C> <C>
Estimated revenue share.............................. 5.2 4.7 4.8 4.6
Revenue rank......................................... 8 10 11 11
</TABLE>

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<PAGE> 51

<TABLE>
<CAPTION>
SUMMER
SPRING 1999 WINTER 1999 FALL 1998 1998
WPAT-FM ----------- ----------- --------- ------
<S> <C> <C> <C> <C>
Audience share (12-plus)............................. 3.2 2.9 3.0 3.2
Audience share rank (12-plus)........................ 11 13 12 12
Audience share (25-54)............................... 3.6 3.3 3.6 4.0
Audience share rank (25-54).......................... 11 12 9 7
</TABLE>

<TABLE>
<CAPTION>
YTD YTD YTD YTD
6/30/99 3/31/99 12/31/98 9/30/98
----------- ----------- --------- -------
<S> <C> <C> <C> <C>
Estimated revenue share.............................. 2.1 1.9 2.0 1.9
Revenue rank......................................... 21 20 19 19
</TABLE>

- WSKQ-FM. In January 1989, we acquired WSKQ-FM for $52.5 million. WSKQ-FM
was the first Spanish-language FM station to serve the New York market,
making its debut in 1989. In 1993, after extensive research, we changed
the station's format to Spanish Tropical. This format is a mix of salsa
and merengue rhythms. The Spanish Tropical format has proven to be very
successful and according to the Spring 1999 Arbitron(C) Survey, WSKQ-FM
is New York's number one ranked Spanish-language radio station and the
number three ranked station overall. WSKQ-FM is ranked number one in its
targeted audience, the 25-54 age demographic, with a 5.9 share.

- WPAT-FM. In March 1996, we purchased WPAT-FM for $86.4 million,
including closing costs of $1.8 million, because we believed that the New
York Spanish-language radio market was underserved. Consequently, we
reformatted WPAT-FM with a Spanish Adult Contemporary format designed to
complement WSKQ-FM's upbeat salsa and merengue format. According to the
Spring 1999 Arbitron(C) Survey, WPAT-FM is New York's number two ranked
Spanish-language radio station and the number eleven ranked station
overall. WPAT-FM is ranked number eleven in its targeted audience, the
25-54 age demographic, with a 3.6 share.

LOS ANGELES

The Los Angeles market is the largest radio market in terms of advertising
revenues which are projected to be $726.5 million in 1999. In 1998, the Los
Angeles market had the largest U.S. Hispanic population, with approximately 6.3
million Hispanics, which is approximately 38.7% of the Los Angeles market's
total population. Los Angeles experienced annual radio revenue growth of 7.5%
between 1992 and 1998, and radio revenue in Los Angeles is expected to continue
growing at an annual rate of 10.3% between 1999 and 2002.

<TABLE>
<CAPTION>
SUMMER
SPRING 1999 WINTER 1999 FALL 1998 1998
KLAX-FM ----------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Audience share (12-plus).......................... 3.0 3.3 4.1 3.2
Audience share rank (12-plus)..................... 9 9 3 11
Audience share (18-34)............................ 4.6 5.0 6.3 5.1
Audience share rank (18-34)....................... 8 8 4 6
</TABLE>

<TABLE>
<CAPTION>
YTD YTD YTD YTD
6/30/99 3/31/99 12/31/98 9/30/98
----------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Estimated revenue share........................... 2.7 2.4 2.4 2.3
Revenue rank...................................... 19 18 20 19
</TABLE>

- KLAX-FM. In February 1988, we acquired KLAX-FM for $15.0 million. The
station features a Regional Mexican format. According to the Spring 1999
Arbitron(C) Survey, KLAX-FM is Los Angeles' number three ranked
Spanish-language radio station and the

45
<PAGE> 52

number nine ranked station overall. KLAX-FM is ranked number eight in its
targeted audience, the 18-34 age demographic, with a 4.6 share.

PUERTO RICO

The Puerto Rico market is the twenty-eighth largest radio market in terms
of advertising revenues which are projected to be $90.0 million in 1999. In
1998, the Puerto Rico market had the second largest U.S. Hispanic population,
with approximately 3.8 million Hispanics, which is approximately 99.6% of the
Puerto Rico market's total population. Puerto Rico experienced annual radio
revenue growth of 5.4% between 1992 and 1998, and radio revenue in Puerto Rico
is expected to continue growing at an annual rate of 5.7% between 1999 and 2002.
We have not included results for Fall 1998 because we did not own the Puerto
Rico stations during that rating period. Additionally, estimated revenue share
and revenue rank data are not yet available.

<TABLE>
<CAPTION>
SPRING 1999
WCMA-FM -----------
<S> <C>
Audience share (12-plus).................................. 2.3
Audience share rank (12-plus)............................. 11
Audience share (18-34).................................... 3.0
Audience share rank (18-34)............................... 12
YTD 6/30/99
---
Estimated revenue share................................... N/A
Revenue rank.............................................. N/A
WMEG-FM SPRING 1999
---
Audience share (12-plus).................................. 3.8
Audience share rank (12-plus)............................. 7
Audience share (18-34).................................... 7.4
Audience share rank (18-34)............................... 2
YTD 6/30/99
---
Estimated revenue share................................... N/A
Revenue rank.............................................. N/A
WEGM-FM SPRING 1999
---
Audience share (12-plus).................................. 0.6
Audience share rank (12-plus)............................. 38
Audience share (18-34).................................... 1.2
Audience share rank (18-34)............................... 25
YTD 6/30/99
---
Estimated revenue share................................... N/A
Revenue rank.............................................. N/A
</TABLE>

- WCMA-FM. In December 1998, we acquired WCMA-FM (formerly WDOY-FM) for
$8.3 million. WCMA-FM's format is Spanish Adult Top 40. According to the
Spring 1999 Arbitron(C) Survey, WCMA-FM is Puerto Rico's number eleven
ranked radio station. WCMA-FM is ranked number twelve in its targeted
audience, the 18-34 age demographic, with a 3.0 share.

- WMEG-FM. In April 1999, we acquired WMEG-FM and WEGM-FM for $16.1
million. The format of WMEG-FM is Dance. According to the Spring 1999
Arbitron(C) Survey, WMEG-FM is Puerto Rico's number seven ranked radio
station. WMEG-FM is ranked number two in its targeted audience, the 18-34
age demographic, with a 7.4 share.

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<PAGE> 53

- WEGM-FM. The format of WEGM-FM, which is simulcast with WMEG-FM, is
Dance. According to the Spring 1999 Arbitron(C) Survey, WEGM-FM is Puerto
Rico's number thirty-eight ranked radio station. WEGM-FM is ranked number
twenty-five in its targeted audience, the 18-34 age demographic, with a
1.2 share.

We have entered into an agreement to purchase nine companies owned by
Chancellor Media Corporation of Los Angeles. The companies we have agreed to
purchase own and operate eight radio stations in Puerto Rico: WIOA-FM, WIOB-FM,
WIOC-FM, WCOM-FM, WZMT-FM, WZNT-FM, WOYE-FM and WCTA-FM. We cannot assure you,
however, that we will be able to complete our acquisition of the companies
during the expected time frame or at all.

MIAMI

The Miami market is the twelfth largest radio market in terms of
advertising revenues which are projected to be $233.0 million in 1999. In 1998,
the Miami market had the fourth largest U.S. Hispanic population, with
approximately 1.4 million Hispanics, which is approximately 38.1% of the Miami
market's total population. Miami experienced annual radio revenue growth of
12.1% between 1992 and 1998, and radio revenue in Miami is expected to continue
growing at an annual rate of 9.0% between 1999 and 2002.

<TABLE>
<CAPTION>
SUMMER
SPRING 1999 WINTER 1999 FALL 1998 1998
WCMQ-FM ----------- ----------- --------- ---------
<S> <C> <C> <C> <C>
Audience share (12-plus)............................ 2.4 3.1 2.8 2.7
Audience share rank (12-plus)....................... 18 13 18 17
Audience share (35-54).............................. 4.1 4.2 4.4 3.4
Audience share rank (35-54)......................... 10 8 6 12
</TABLE>

<TABLE>
<CAPTION>
YTD YTD YTD YTD
6/30/99 3/31/99 12/31/98 9/30/98
----------- ----------- --------- ---------
<S> <C> <C> <C> <C>
Estimated revenue share............................. 2.4 2.4 2.1 2.1
Revenue rank........................................ 17 17 19 20
</TABLE>

<TABLE>
<CAPTION>
SUMMER
SPRING 1999 WINTER 1999 FALL 1998 1998
WRMA-FM ----------- ----------- --------- ---------
<S> <C> <C> <C> <C>
Audience share (12-plus)............................ 3.1 2.9 3.3 3.3
Audience share rank (12-plus)....................... 13 18 10 12
Audience share (25-49).............................. 3.0 3.5 3.4 3.7
Audience share rank (25-49)......................... 14 14 14 11
</TABLE>

<TABLE>
<CAPTION>
YTD YTD YTD YTD
6/30/99 3/31/99 12/31/98 9/30/98
----------- ----------- --------- ---------
<S> <C> <C> <C> <C>
Estimated revenue share............................. 3.8 3.7 4.1 14.7
Revenue rank........................................ 15 15 14 3
</TABLE>

<TABLE>
<CAPTION>
SUMMER
SPRING 1999 WINTER 1999 FALL 1998 1998
WXDJ-FM ----------- ----------- --------- ------
<S> <C> <C> <C> <C>
Audience share (12-plus)............................. 3.9 3.4 3.1 2.9
Audience share rank (12-plus)........................ 8 10 12 14
Audience share (18-34)............................... 5.0 4.4 3.1 3.4
Audience share rank (18-34).......................... 7 8 10 11
</TABLE>

<TABLE>
<CAPTION>
YTD YTD YTD YTD
6/30/99 3/31/99 12/31/98 9/30/98
------- ------- -------- -------
<S> <C> <C> <C> <C>
Estimated revenue share.............................. 5.5 5.0 5.5 20.0
Revenue rank......................................... 7 11 8 2
</TABLE>

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<PAGE> 54

- WCMQ-FM. In November 1986, we acquired WCMQ-FM (and WCMQ-AM) for $15.0
million. In 1997, we sold WCMQ-AM for $8.0 million. In October 1996, to
complement WRMA-FM and WXDJ-FM, we reformatted WCMQ-FM by implementing a
Spanish Oldies format. According to the Spring 1999 Arbitron(C) Survey,
WCMQ-FM is Miami's number five ranked Spanish-language radio station and
the number eighteen ranked station overall. WCMQ-FM is ranked number ten
in its targeted audience, the 35-54 age demographic, with a 4.1 share.

- WRMA-FM. In March 1997, we purchased WRMA-FM and WXDJ-FM for $112.2
million, including closing costs of $1.1 million. A Spanish Adult
Contemporary station, WRMA-FM features a blend of ballads and pop songs
from the 1970's to the present. According to the Spring 1999 Arbitron(C)
Survey, WRMA-FM is Miami's number four ranked Spanish-language radio
station and the number thirteen ranked station overall. WRMA-FM is ranked
number fourteen in its targeted audience, the 25-49 age demographic, with
a 3.0 share.

- WXDJ-FM. By blending salsa and merengue, this station's Spanish Tropical
format targets the emerging musical tastes of the rapidly changing Miami
Hispanic population. According to the Spring 1999 Arbitron(C) Survey,
WXDJ-FM is Miami's number three ranked Spanish-language radio station and
the number eight ranked station overall. WXDJ-FM is ranked number seven
in its targeted audience, the 18-34 age demographic, with a 5.0 share.

CHICAGO

The Chicago market is the third largest radio market in terms of
advertising revenues which are projected to be $471.0 million in 1999. In 1998,
the Chicago market had the sixth largest U.S. Hispanic population, with
approximately 1.2 million Hispanics, which is approximately 12.7% of the Chicago
market's total population. We believe that we own the strongest franchise in the
Chicago market with the number one ranked FM Spanish-language radio station.
Chicago experienced annual radio revenue growth of 8.7% between 1992 and 1998,
and radio revenue in Chicago is expected to continue growing at an annual rate
of 9.0% between 1999 and 2002.

<TABLE>
<CAPTION>
SUMMER
SPRING 1999 WINTER 1999 FALL 1998 1998
WLEY-FM ----------- ----------- --------- ---------
<S> <C> <C> <C> <C>
Audience share (12-plus)............................ 2.4 2.6 2.3 1.9
Audience share rank (12-plus)....................... 18 15 18 21
Audience share (18-34).............................. 4.2 4.4 4.1 3.3
Audience share rank (18-34)......................... 7 6 7 10
</TABLE>

<TABLE>
<CAPTION>
YTD YTD YTD YTD
6/30/99 3/31/99 12/31/98 9/30/98
----------- ----------- --------- ---------
<S> <C> <C> <C> <C>
Estimated revenue share............................. 2.6 2.3 2.5 2.5
Revenue rank........................................ 18 20 20 19
</TABLE>

- WLEY-FM. In March 1997, we acquired WLEY-FM (formerly WYSY-FM) for $33.0
million because we believed that the Chicago Spanish-language radio
market was underserved and offered significant opportunities for growth.
In July 1997, after extensive research, we changed WLEY-FM's format from
70's rock to a Regional Mexican format. According to the Spring 1999
Arbitron(C) Survey, WLEY-FM is Chicago's number one ranked
Spanish-language radio station and the number eighteen ranked station
overall.

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<PAGE> 55

WLEY-FM is ranked number seven in its targeted audience, the 18-34 age
demographic, with a 4.2 share.

SAN ANTONIO

The San Antonio market is the thirty-second largest radio market in terms
of advertising revenues which are projected to be $78.4 million in 1999. In
1998, San Antonio had the eighth largest U.S. Hispanic population, with
approximately 1.1 million Hispanics, which is approximately 51.6% of the San
Antonio market's total population. San Antonio experienced annual radio revenue
growth of 8.8% between 1992 and 1998, and radio revenue in San Antonio is
expected to continue growing at an annual rate of 7.7% between 1999 and 2002.

<TABLE>
<CAPTION>
SUMMER
SPRING 1999 WINTER 1999 FALL 1998 1998
KLEY-FM ----------- ----------- --------- ---------
<S> <C> <C> <C> <C>
Audience share (12-plus)............................ 2.5 3.5 3.2 1.9
Audience share rank (12-plus)....................... 15 13 12 16
Audience share (18-34).............................. 4.0 4.4 3.3 1.8
Audience share rank (18-34)......................... 8 8 9 12
</TABLE>

<TABLE>
<CAPTION>
YTD YTD YTD YTD
6/30/99 3/31/99 12/31/98 9/30/98
----------- ----------- --------- ---------
<S> <C> <C> <C> <C>
Estimated revenue share............................. 2.7 2.1 1.5 1.4
Revenue rank........................................ 14 14 16 16
</TABLE>

- KLEY-FM. In May 1998, we acquired KLEY-FM (formerly KRIO-FM) for $9.3
million. At the time, KLEY-FM was programmed as a strictly Tejano
station. In July 1998, we expanded the format to Regional Mexican and
Tejano. According to the Spring 1999 Arbitron(C) Survey, KLEY-FM is San
Antonio's number three ranked Spanish-language radio station and the
number fifteen ranked station overall. KLEY-FM is ranked number eight in
its targeted audience, the 18-34 age demographic, with a 4.0 share.

LATIN MUSIC ON-LINE ("LAMUSICA.COM")

LaMusica.com is a bilingual Spanish-English Internet Web site and on-line
community that focuses on the U.S. Hispanic market. LaMusica.com is a provider
of original information and interactive content related to Latin music,
entertainment, news and culture. We believe that LaMusica.com, together with our
radio station portfolio, enables our audience to enjoy additional targeted and
culturally-specific entertainment options, such as concert listings, CD reviews,
local entertainment calendars, and interactive content on popular Latin
recording artists and musicians. Similarly, LaMusica.com enables our advertisers
to cost-effectively reach their targeted Hispanic consumer through an
additional, dynamic and rapidly growing medium.

LaMusica.com has links to the Web sites for all of our radio stations. This
network of Web sites, among other things, permit our target audiences to listen
to streaming audio of live radio broadcasts from each of our radio stations from
anywhere in the United States and the world. In addition to our network of
station Web sites and our production of original interactive content relating to
Latin music and entertainment, we plan to offer enhanced community features on
LaMusica.com such as branded e-mail, bulletin boards, fan clubs, chat rooms,
personals and horoscopes.

We anticipate LaMusica.com will generate revenues primarily from two
distinct sources: (1) advertising and sponsorship and (2) electronic commerce
opportunities, such as on-line

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<PAGE> 56

music sales. We will use our stations' on-air marketing power to draw visitors
to LaMusica.com. We are currently initiating a nationwide advertising campaign
on our radio stations in order to increase audience awareness of LaMusica.com.
We will also utilize our strong relationships with advertisers and the music
industry to develop banner advertising and sponsorships. With respect to
electronic commerce, we are developing a business model to sell music directly
to consumers on our Web sites, as music represents the most frequently purchased
item on-line. We plan to utilize the services of a leading music order
fulfillment company in order to facilitate our on-line music sales. As music
technology and industry standards evolve, we will explore additional
opportunities for the sale of music on-line, including downloads of digital
music and the sale of customized compact discs. We also plan to sell t-shirts,
posters and other Latin music-related merchandise.

In addition to the rapidly growing U.S. Hispanic population, we believe
that LaMusica.com will benefit from the following:

- the percentage of Hispanics in the United States (excluding Puerto Rico)
accessing the Internet either at home or at work is currently estimated
at 36%, a percentage which we believe will increase substantially over
the next few years;

- the percentage of Hispanic households in the United States (excluding
Puerto Rico) that own a computer is estimated at 26%;

- $571.0 million was spent on Latin music CDs, cassettes and music videos
in the United States (excluding Puerto Rico) during 1998, an increase in
dollar terms of 16.0% from 1997, representing the fastest growing segment
of the music industry;

- approximately two-thirds of respondents in Arbitron(C) surveys expressed
interest in purchasing music from Web sites maintained by radio stations;
and

- we believe that the U.S. Hispanic market is currently underserved by the
Internet and that there are a limited number of on-line businesses
targeting the U.S. Hispanic consumer.

We plan to use our knowledge of our Internet user base to help advertisers
create more effective on-line advertising campaigns. In addition, we intend to
use advertising techniques and tracking technologies to:

- target advertising to users with specific demographic profiles;

- gather extensive data on our users; and

- use daily tracking data to analyze a particular campaign's effectiveness.

Our management team has been developing LaMusica.com for the past four
years and has extensive technological knowledge and experience in the
development and creation of original content. LaMusica.com has been recognized
for its excellence in Latin music content on the Internet and received a "Top
5%" award from Lycos(R), has been named a "Top Latino" Web site by Tesoros del
Web, received a "Best of the Web" award from Home PC and is a snap.com editor's
choice for Latin music on-line.

MANAGEMENT AND PERSONNEL

As of September 24, 1999, we had 398 full-time employees, 11 of whom were
primarily involved in senior management, 158 in programming, 134 in sales, 83 in
general administration and 12 in technical activities.

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<PAGE> 57

To facilitate efficient management from our Miami, Florida headquarters, we
access and utilize computerized accounting systems from our properties to
provide current information to management on station operations and to assist in
cost control and the preparation of monthly financial statements. Corporate
executives regularly visit each station to monitor its operations and ensure
that our policies are properly followed.

SEASONALITY

Seasonal net broadcasting revenue fluctuations are common in the radio
broadcasting industry and are due primarily to fluctuations in advertising
expenditures by local and national advertisers. Our second fiscal quarter
(January through March) generally produces the lowest net broadcasting revenue
for the year because of normal post-holiday decreases in advertising
expenditures.

ADVERTISING

Virtually all radio station revenue is derived from advertising. This
revenue is usually classified in one of two categories -- "national" or "local."
"National" refers to advertising that is solicited by a national representative
firm that represents the station and is paid commissions based on collected net
revenues. Our national sales representative is Caballero Spanish Media, LLC, a
division of Interep National Radio Sales, Inc. "Local" refers to advertising
purchased by advertisers in the local community served by a particular station.

We believe that radio is one of the most efficient and cost-effective means
for advertisers to reach targeted demographic groups. Advertising rates charged
by a radio station are based primarily on the station's ability to attract
listeners in a given market and on the attractiveness to advertisers of the
station's listener demographics. Rates vary depending upon a program's
popularity among the listeners an advertiser is seeking to attract, the number
of advertisers vying for available air time and the availability of alternative
media in the market. Radio advertising rates generally are highest during the
morning and afternoon drive-time hours which are the peak hours for radio
audience listening. We believe that having multiple stations in a market is
desirable to national advertisers enabling the broadcaster to command higher
advertising rates. We believe we will be able to increase our rates as new and
existing advertisers recognize the increasing desirability of targeting the
growing Hispanic population in the United States.

Each station broadcasts a predetermined number of advertisements each hour
with the actual number depending upon the format of a particular station. We
determine the number of advertisements broadcast hourly that can maximize the
station's available revenue dollars without jeopardizing its audience listener
levels. While there may be shifts from time to time in the number of
advertisements broadcast during a particular time of the day, the total number
of advertisements broadcast on a particular station generally does not vary
significantly from year to year.

Our revenue mix between local and national advertising varies significantly
by market. We strive to increase the level of national advertising since
national advertising generally commands a higher dollar rate per advertising
spot than does local advertising. Currently, approximately 73% of our
advertising is local and 27% is national.

Although the majority of our advertising contracts are short-term
(generally running for less than three months), we have long-term relationships
with some of our advertisers. In each of our broadcasting markets, we employ
salespeople to obtain local advertising revenues. We believe that our local
sales force is crucial to maintaining relationships with key local advertisers
and

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<PAGE> 58

agencies and identifying new advertisers. We generally pay sales commissions to
our local sales staff upon the receipt from advertisers of the payments related
to these sales. We offer assistance to local advertisers by providing them with
studio facilities to produce 60-second commercials free of charge.

COMPETITION

The success of each of our stations depends significantly upon its audience
ratings and its share of the overall advertising revenue within its market. The
radio broadcasting industry is a highly competitive business. Each of our radio
stations competes with both Spanish-language and English-language radio stations
in its market as well as with other advertising media such as newspapers,
broadcast television, cable television, the Internet, magazines, outdoor
advertising, transit advertising and direct mail marketing. Several of the
stations with which we compete are subsidiaries of large national or regional
companies that have substantially greater resources than we do. Factors which
are material to competitive position include management experience, the
station's rank in its market, signal strength and frequency, and audience
demographics, including the nature of the Spanish market targeted by a
particular station.

Although the radio broadcasting industry is highly competitive, some
barriers to entry exist. These barriers can be mitigated to some extent by
changing existing radio station formats and upgrading power, among other
actions. The operation of a radio station requires a license or other
authorization from the FCC, and the number of radio stations that can operate in
a given market is limited by the availability of FM and AM radio frequencies
allotted by the FCC to communities in that market. In addition, the FCC's
multiple ownership rules regulate the number of stations that may be owned and
controlled by a single entity in a given market. However, in recent years, these
rules have changed significantly. For a discussion of FCC regulation, see
"Federal Regulation of Radio Broadcasting."

The radio industry is also subject to competition from new media
technologies that are being developed or introduced, such as the delivery of
audio programming by cable television systems, by satellite and by terrestrial
delivery of digital audio broadcasting (known as "DAB"). DAB may deliver to
nationwide and regional audiences, multi-channel, multi-format, digital radio
services with sound quality equivalent to that of compact discs. The FCC has
recently authorized spectrum for the use of a new technology, satellite digital
audio radio services (known as "SDARS"), to deliver audio programming. SDARS may
provide a medium for the delivery by satellite of multiple new audio programming
formats to local and national audiences. It is not known at this time whether
digital technology also may be used in the future by existing radio broadcast
stations either on existing or alternate broadcasting frequencies. There are
also proposals before the FCC to permit a new "low power" radio or
"microbroadcasting" service which could open up opportunities for low cost
neighborhood service on frequencies which would not interfere with existing
stations. No FCC action has been taken on these proposals to date.

The delivery of information through the presently unregulated Internet also
could create a new form of competition. The radio broadcasting industry
historically has grown despite the introduction of new technologies for the
delivery of entertainment and information, such as television broadcasting,
cable television, audio tapes and compact discs. A growing population and the
greater availability of radios, particularly car and portable radios, have
contributed to this growth. We cannot assure you, however, that the development
or introduction in the future of any new media technology will not have an
adverse effect on the radio broadcasting industry.

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<PAGE> 59

We cannot predict what other matters might be considered in the future by
the FCC, nor can we assess in advance what impact, if any, the implementation of
any of these proposals or changes might have on our business. See "Federal
Regulation of Radio Broadcasting."

ANTITRUST

An important part of our growth strategy is the acquisition of additional
radio stations. After the passage of the Telecommunications Act of 1996, the
Justice Department has become more aggressive in reviewing proposed acquisitions
of radio stations and radio station networks. The Justice Department is
particularly aggressive when the proposed buyer already owns one or more radio
stations in the market of the station it is seeking to buy. Recently, the
Justice Department has challenged a number of radio broadcasting transactions.
Some of those challenges ultimately resulted in consent decrees requiring, among
other things, divestitures of certain stations. In general, the Justice
Department has more closely scrutinized radio broadcasting acquisitions that
result in local market shares in excess of 40% of radio advertising revenue.
Similarly, the FCC staff has announced new procedures to review proposed radio
broadcasting transactions even if the proposed acquisition otherwise complies
with the FCC's ownership limitations. In particular, the FCC may invite public
comment on proposed ratio transactions that the FCC believes, based on its
initial analysis, may present ownership concentration concerns in a particular
local radio market.

FEDERAL REGULATION OF RADIO BROADCASTING

The radio broadcasting industry is subject to extensive and changing
regulation by the FCC of programming, technical operations, employment and other
business practices. The FCC regulates radio broadcast stations pursuant to the
Communications Act. The Communications Act permits the operation of radio
broadcast stations only in accordance with a license issued by the FCC upon a
finding that the grant of a license would serve the public interest, convenience
and necessity. The Communications Act provides for the FCC to exercise its
licensing authority to provide a fair, efficient and equitable distribution of
broadcast service throughout the United States. Among other things, the FCC:

- assigns frequency bands for radio broadcasting;

- determines the particular frequencies, locations and operating power of
radio broadcast stations;

- issues, renews, revokes and modifies radio broadcast station licenses;

- establishes technical requirements for certain transmitting equipment
used by radio broadcast stations;

- adopts and implements regulations and policies that directly or
indirectly affect the ownership, operation, program content and
employment and business practices of radio broadcast stations; and

- has the power to impose penalties, including monetary forfeitures, for
violations of its rules and the Communications Act.

The Communications Act prohibits the assignment of an FCC license, or other
transfer of control of an FCC licensee, without the prior approval of the FCC.
In determining whether to approve assignments or transfers, and in determining
whether to grant or renew a radio broadcast license, the FCC considers a number
of factors pertaining to the licensee (and any proposed

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<PAGE> 60

licensee), including restrictions on foreign ownership, compliance with FCC
media ownership limits and other FCC rules, licensee character and compliance
with the Anti-Drug Abuse Act of 1988.

The following is a brief summary of certain provisions of the
Communications Act and specific FCC rules and policies. This summary does not
purport to be complete and is subject to the text of the Communications Act, the
FCC's rules and regulations, and the rulings of the FCC. You should refer to the
Communications Act and these FCC rules and rulings for further information
concerning the nature and extent of federal regulation of radio broadcast
stations.

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

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

- changes to the license authorization and renewal process;

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

- auction of new broadcast licenses;

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

- proposals to change rules relating to political broadcasting including
proposals to grant free air time to candidates, and other changes
regarding program content;

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

- technical and frequency allocation matters, including creation of a new
low power radio broadcast service;

- the implementation of digital audio broadcasting on both a satellite and
terrestrial basis;

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

- proposals to allow telephone companies to deliver audio and video
programming to homes in their service areas; and

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

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

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<PAGE> 61

FCC LICENSES

The Communications Act provides that a broadcast station license may be
granted to any applicant if the public interest, convenience and necessity will
be served thereby, subject to certain limitations. In making licensing
determinations, the FCC considers an applicant's legal, technical, financial and
other qualifications. The FCC grants radio broadcast station licenses for
specific periods of time and, upon application, may renew them for additional
terms. Under the Communications Act, radio broadcast station licenses may be
granted for a maximum term of eight years.

Generally, the FCC renews radio broadcast licenses without a hearing upon a
finding that:

- the radio station has served the public interest, convenience and
necessity;

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

- there have been no other violations by the licensee of the Communications
Act or FCC rules and regulations which, taken together, indicate a
pattern of abuse.

After considering these factors, the FCC may grant the license renewal
application with or without conditions, including renewal for a term less than
the maximum term otherwise permitted by law, or hold an evidentiary hearing.

In addition, the Communications Act authorizes the filing of petitions to
deny a license renewal application during specific periods of time after a
renewal application has been filed. Interested parties, including members of the
public, may use these petitions to raise issues concerning a renewal applicant's
qualifications. If a substantial and material question of fact concerning a
renewal application is raised by the FCC or other interested parties, or if for
any reason the FCC cannot determine that granting a renewal application would
serve the public interest, convenience and necessity, the FCC will hold an
evidentiary hearing on the application. If as a result of an evidentiary hearing
the FCC determines that the licensee has failed to meet the requirements
specified above and that no mitigating factors justify the imposition of a
lesser sanction, then the FCC may deny a license renewal application.
Historically, our licenses have been renewed without any conditions or sanctions
being imposed, but we cannot assure you that the licenses of each of our
stations will continue to be renewed or will continue to be renewed without
conditions or sanctions.

The FCC classifies each AM and FM radio station. An AM radio station
operates on either a clear channel, regional channel or local channel. A clear
channel is one on which AM radio stations are assigned to serve wide areas,
particularly at night.

The minimum and maximum facilities requirements for an FM radio station are
determined by its class. Possible FM class designations depend upon the
geographic zone in which the transmitter of the FM radio station is located. In
general, commercial FM radio stations are classified as follows, in order of
increasing power and antenna height: Class A, B1, C3, B, C2, C1 or C radio
stations. The FCC recently has proposed to divide Class C stations into two
subclasses based on antenna height. Stations not meeting the minimum height
requirement within a three-year transition period would be downgraded
automatically to the new Class C0 category.

Ownership Matters. The Communications Act requires prior approval of the
FCC for the assignment of a broadcast license or the transfer of control of a
corporation or other entity

55
<PAGE> 62

holding a license. In determining whether to approve an assignment of a radio
broadcast license or a transfer of control of a broadcast licensee, the FCC
considers, among other things:

- the financial and legal qualifications of the prospective assignee or
transferee, including compliance with FCC restrictions on non-U.S.
citizen or entity ownership and control;

- compliance with FCC rules limiting the common ownership of attributable
interests in broadcast and newspaper properties;

- the history of compliance with FCC operating rules; and

- the character qualifications of the transferee or assignee and the
individuals or entities holding attributable interests in them.

Applications to the FCC for assignments and transfers are subject to petitions
in favor of denying the assignment and transfer by interested parties.

To obtain the FCC's prior consent to assign or transfer a broadcast
license, appropriate applications must be filed with the FCC. The application
must be placed on public notice for a period of 30 days during which petitions
to deny the application may be filed by interested parties, including members of
the public. Informal objections may be filed any time up until the FCC acts upon
the application. If the FCC grants an assignment or transfer application,
interested parties have 30 days from public notice of the grant to seek
reconsideration of that grant. The FCC usually has an additional ten days to set
aside such grant on its own motion. When ruling on an assignment or transfer
application, the FCC is prohibited from considering whether the public interest
might be served by an assignment or transfer to any party other than the
assignee or transferee specified in the application.

Under the Communications Act, a broadcast license may not be granted to or
held by any corporation that has more than 20% of its capital stock owned or
voted by non-U.S. citizens or entities or their representatives, by foreign
governments or their representatives, or by non-U.S. corporations. Furthermore,
the Communications Act provides that no FCC broadcast license may be granted to
or held by any corporation directly or indirectly controlled by any other
corporation of which more than 25% of its capital stock is owned of record or
voted by non-U.S. citizens or entities or their representatives, or foreign
governments or their representatives or by non-U.S. corporations, if the FCC
finds the public interest will be served by the refusal or revocation of such
license. These restrictions apply in modified form to other forms of business
organizations, including partnerships and limited liability companies. Thus, the
licenses for our stations could be revoked if more than 25% of our outstanding
capital stock is issued to or for the benefit of non-U.S. citizens.

The FCC generally applies its other broadcast ownership limits to
"attributable" interests held by an individual, corporation, partnership or
other association or entity, including limited liability companies. In the case
of a corporation holding broadcast licenses, the interests of officers,
directors and those who, directly or indirectly, have the right to vote five
percent or more of the stock of a licensee corporation are generally deemed
attributable interests, as are positions as an officer or director of a
corporate parent of a broadcasting licensee. The FCC treats all partnership
interests as attributable, except for those limited partnership interests that
under FCC policies are considered insulated from material involvement in the
management or operation of the media-related activities of the partnership. The
FCC currently treats limited liability companies like limited partnerships for
purposes of attribution. Stock interests held by insurance companies, mutual
funds, bank trust departments and certain other passive investors

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that hold stock for investment purposes only become attributable with the
ownership of ten percent or more of the voting stock of the corporation holding
broadcast licenses.

To assess whether a voting stock interest in a direct or an indirect parent
corporation of a broadcast licensee is attributable, the FCC uses a "multiplier"
analysis in which non-controlling voting stock interests are deemed
proportionally reduced at each non-controlling link in a multi-corporation
ownership chain. A time brokerage agreement with another radio station in the
same market creates an attributable interest in the brokered radio station as
well for purposes of the FCC's local radio station ownership rules, if the
agreement affects more than 15% of the brokered radio station's weekly broadcast
hours.

Debt instruments, non-voting stock, options and warrants for voting stock
that have not yet been exercised, insulated limited partnership interests where
the limited partner is not materially involved in the media-related activities
of the partnership, and minority voting stock interests in corporations where
there is a single holder of more than 50% of the outstanding voting stock whose
vote is sufficient to affirmatively direct the affairs of the corporation,
generally do not subject their holders to attribution. However, the FCC's rules
also specify other exceptions to these general principles for attribution. The
FCC is currently evaluating whether to:

- raise the benchmark for voting stock from five to ten percent;

- raise the benchmark for passive investors holding voting stock from ten
to twenty percent;

- continue the single 50% stockholder exception; and/or

- attribute non-voting stock or perhaps only when combined with other
rights such as voting shares or contractual relationships.

More recently, the FCC has solicited comment on proposed rules that would:

- treat an otherwise non-attributable ownership equity or debt interest in
a licensee as an attributable interest where the interest holder is a
program supplier or the owner of a broadcast station in the same market
and the equity and/or debt holding is greater than a specified benchmark;
and

- in some circumstances, treat the licensee of a broadcast station that
sells advertising time of another station in the same market pursuant to
a joint sales agreement as having an attributable interest in the station
whose advertising is being sold.

Communications Act and FCC rules generally restrict ownership, operation or
control of, or the common holding of attributable interests in:

- radio broadcast stations above certain limits servicing the same local
market;

- a radio broadcast station and a television broadcast station servicing
the same local market; and

- a radio broadcast station and a daily newspaper serving the same local
market.

These rules include specific signal contour overlap standards to determine
compliance, and the FCC defined market will not necessarily be the same market
used by Arbitron(C) or other surveys, or for purposes of the HSR Act. Under
these "cross-ownership" rules, we, absent waivers, would not be permitted to own
a radio broadcast station and acquire an attributable interest in any daily
newspaper or television broadcast station, other than a low-powered television
station, in the same market where we then owned any radio broadcast station. Our
stockholders, officers or

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directors, absent a waiver, may not hold an attributable interest in a daily
newspaper or television broadcast station in those same markets.

The FCC is currently reviewing the ban on common ownership of a radio
station and a daily newspaper in the same market. The FCC's rules provide for
the liberal grant of a waiver of the rule prohibiting common ownership of radio
and television stations in the same geographic market in the top 25 television
markets if specific conditions are satisfied, and the FCC will consider waivers
in other markets under more restrictive standards. The FCC is reviewing its ban
on the common ownership of a radio station and a television station or newspaper
including extending the policy of liberal waivers of common ownership of radio
and television stations to the top 50 television markets.

Although current FCC nationwide radio broadcast ownership rules allow one
entity to own, control or hold attributable interests in an unlimited number of
FM radio stations and AM radio stations nationwide, the Communications Act and
the FCC's rules limit the number of radio broadcast stations in local markets in
which a single entity may own an attributable interest as follows:

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

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

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

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

Because of these multiple and cross-ownership rules, if a stockholder,
officer or director of SBS holds an attributable interest in SBS, such
stockholder, officer or director may violate the FCC's rules if such person or
entity also holds or acquires an attributable interest in other television,
radio stations or daily newspapers, depending on their number and location. If
an attributable stockholder, officer or director of SBS violates any of these
ownership rules, we may be unable to obtain from the FCC one or more
authorizations needed to conduct our radio station business and may be unable to
obtain FCC consents for future acquisitions. As long as one person or entity
holds more than 50% of the voting power of the common stock of SBS where the
vote of such person or entity is sufficient to affirmatively direct the affairs
of SBS, another stockholder, unless serving as an officer and/or director,
generally would not hold an attributable interest in SBS. However, as described
above, the FCC is currently evaluating whether to continue the exception for a
single majority stockholder of more than 50% of a licensee's voting stock. As of
June 27, 1999, Raul Alarcon, Jr. held more than 50% of the total voting power of
our common stock.

Under its cross-interest policy, the FCC considers meaningful relationships
among competing media outlets that serve substantially the same area, even if
the ownership rules do not specifically prohibit the relationship. Under this
policy, the FCC may consider whether to

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prohibit one party from holding an attributable interest and a substantial
non-attributable interest (including non-voting stock, limited partnership and
limited liability company interests) in a media outlet in the same market, or
from entering into a joint venture or having common key employees with
competitors. The cross-interest policy does not necessarily prohibit all of
these interests, but requires that the FCC consider whether, in a particular
market, the meaningful relationships between competitors could have a
significant adverse effect upon economic competition and program diversity. In a
rule making proceeding concerning the attribution rules, the FCC has sought
comment on, among other things, (1) whether the cross-interest policy should be
applied only in smaller markets, and (2) whether non-equity financial
relationships, such as debt, when combined with multiple business relationships,
such as local marketing agreements or joint sales arrangements, raise concerns
under the cross-interest policy.

Programming and Operations. The Communications Act requires broadcasters
to serve the public interest. A broadcast licensee is required to present
programming in response to community problems, needs and interests and to
maintain certain records demonstrating its responsiveness. The FCC will consider
complaints from listeners about a broadcast station's programming when it
evaluates the licensee's renewal application, but listeners' complaints also may
be filed and considered at any time. Stations also must pay regulatory and
application fees, and follow various FCC rules that regulate, among other
things, political advertising, the broadcast of obscene or indecent programming,
sponsorship identification, the broadcast of contests and lotteries and
technical operation.

The FCC requires that licensees not discriminate in hiring practices,
develop and implement programs designed to promote equal employment
opportunities and submit reports to the FCC on these matters annually and in
connection with each license renewal application.

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

Local Marketing Agreements. Often radio stations enter into LMAs or time
brokerage agreements. These agreements take various forms. Separately owned and
licensed radio stations may agree to function cooperatively in programming,
advertising sales and other matters, subject to compliance with the antitrust
laws and the FCC's rules and policies, including the requirement that the
licensee of each radio station maintain independent control over the programming
and other operations of its own radio station.

Joint Sales Agreements. Over the past few years, a number of radio
stations have entered into cooperative arrangements commonly known as joint
sales agreements or JSAs. The FCC has determined that issues of joint
advertising sales should be left to enforcement by antitrust authorities, and
therefore does not generally regulate joint sales practices between stations.
Currently, stations for which another licensee sells time under a JSA are not
deemed by the FCC to be an attributable interest of that licensee. However, in
connection with its ongoing rulemaking proceedings concerning the attribution
rules, the FCC is considering whether JSAs should be considered attributable
interests or within the scope of the FCC's cross-interest policy, particularly
when JSAs contain provisions for the supply of programming services and/or other
elements typically associated with local marketing agreements.

RF Radiation. In 1985, the FCC adopted rules based on a 1982 American
National Standards Institute (ANSI) standard regarding human exposure to levels
of radio frequency
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(RF) radiation. These rules require applicants for renewal of broadcast licenses
or modification of existing licenses to inform the FCC at the time of filing
such applications whether an existing broadcast facility would expose people to
RF radiation in excess of certain limits. In 1992, ANSI adopted a new standard
for RF exposure that, in some respects, was more restrictive in the amount of
environmental RF exposure permitted. The FCC has since adopted more restrictive
radiation limits which became effective October 15, 1997, and which are based in
part on the revised ANSI standard.

Digital Audio Radio Service. The FCC has allocated spectrum to a new
technology, digital audio radio service (DARS), to deliver satellite-based audio
programming to a national or regional audience and issued regulations for a DARS
service in early 1997. The nationwide reach of satellite DARS could allow niche
programming aimed at diverse communities that SBS is targeting. Two companies
that hold licenses for authority to offer multiple channels of digital,
satellite-delivered S-Band aural services could compete with conventional
terrestrial radio broadcasting. The licensees will be permitted to sell
advertising and lease channels in these media. The FCC's rules require that
these licensees launch and begin operating at least one space station by 2001
and be fully operational by 2003.

Low Power Radio Broadcast Service. The FCC recently adopted a Notice of
Proposed Rulemaking seeking public comment on a proposal to establish two
classes of a low power radio service both of which would operate in the existing
FM radio band: a primary class with a maximum operating power of 1 kW and a
secondary class with a maximum power of 100 watts. These proposed low power
radio stations would have limited service areas of 8.8 miles and 3.5 miles,
respectively. Implementation of a low power radio service or microbroadcasting
would provide an additional audio programming service that could compete with
SBS's radio stations for listeners, but we cannot predict the effect upon SBS.

PROPERTIES

Our corporate headquarters is located in Miami, Florida. The types of
properties required to support each of our radio stations include offices,
broadcasting studios and antenna towers where broadcasting transmitters and
antenna equipment are located. We own the building housing the office and
studios in New York for WSKQ-FM and WPAT-FM, and in Los Angeles for KLAX-FM.
Additionally, we still own a building in Los Angeles that we previously used as
the office for our Los Angeles operations. We own the auxiliary transmitter site
for KLAX-FM in Long Beach, California and lease our other transmitter sites,
with lease terms that expire between 1999 and 2035, assuming all renewal options
are exercised. The studios and offices of our Miami and South Florida stations
are currently located in leased facilities with lease terms that respectively
expire in 2000 and 2012. See "Certain Relationships and Related Transactions."
We lease the office and studio facilities for our stations in Chicago, San
Antonio and Puerto Rico.

The transmitter sites for our stations are material to our overall
operations. Management believes that our properties are in good condition and
are suitable for our operations; however, we continually seek opportunities to
upgrade our properties. We own substantially all of the equipment used in our
radio broadcasting business.

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LEGAL PROCEEDINGS

From time to time we are involved in litigation incidental to the conduct
of our business, such as contract matters and employee-related matters. We are
not currently a party to litigation which, in the opinion of management, is
likely to have a material adverse effect on our business.

ENVIRONMENTAL MATTERS

We assigned the lease of the transmitter for WXLX-AM in Lyndhurst, New
Jersey, to the purchaser of the station. The transmitter is located on a former
landfill which ceased operations in the late 1960's. Although WXLX-AM has been
sold, we retain potential exposure relating to possible environmental
liabilities relating to the transmitter site. Because the lessee of the property
is under a long-term lease, we may become liable for costs associated with
remediation of the site. We are unable to assess the likelihood that any claim
for remediation of this site will arise and no amounts have been accrued in the
consolidated financial statements relating to this contingent liability.

On September 28, 1999, we received notice from the purchaser of KXMG-AM
that it would make a claim against us for indemnification under the asset
purchase agreement, pursuant to which it purchased the station, for the removal
of an underground fuel storage tank. The notice did not specify the amount of
the indemnification claim. We do not have sufficient information to assess the
potential exposure and no amounts have been accrued in the consolidated
financial statements relating to this contingent liability.

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MANAGEMENT

DIRECTORS, EXECUTIVE OFFICERS AND KEY EMPLOYEES

The following table sets forth the names, ages and positions of the
directors, executive officers and certain key employees of SBS upon completion
of this offering. Each of our directors serves until his successor is elected
and qualifies.

<TABLE>
<CAPTION>
NAME AGE POSITION WITH SBS UPON COMPLETION OF THIS OFFERING
- ---- --- --------------------------------------------------
<S> <C> <C>
Pablo Raul Alarcon, Sr............... 73 Chairman Emeritus and Director
Raul Alarcon, Jr..................... 43 Chairman of the Board of Directors, Chief Executive
Officer and President
Jose Grimalt......................... 70 Secretary Emeritus and Director
Joseph A. Garcia..................... 53 Chief Financial Officer, Executive Vice President and
Secretary
Luis Diaz-Albertini.................. 47 Vice President/Group Sales
Jesus Salas.......................... 23 Vice President of Programming
Roman Martinez IV.................... 51 Director Nominee
Jason L. Shrinsky.................... 62 Director Nominee
</TABLE>

PABLO RAUL ALARCON, SR. has been Chairman of the Board of Directors since
March 1983. Upon the completion of this offering, Mr. Alarcon, Sr. will become
Chairman Emeritus and will continue to be a member of our board of directors. He
also serves as the Chairman of the Board of Directors of SBS-NJ, and those of
SBS's other subsidiaries that own and operate SBS's radio stations. Mr. Alarcon,
Sr. has been involved in Spanish-language radio broadcasting for much of his
life. He started his broadcasting career in Cuba in the early 1950's when he
established a radio station chain in Camaguey, Cuba. Upon his arrival in the
United States, Mr. Pablo Raul Alarcon, Sr. continued his career in radio
broadcasting and was an on-air personality in a New York radio station before
being promoted to programming director. Mr. Pablo Raul Alarcon, Sr. subsequently
owned and operated a recording studio and an advertising agency. In 1983, he
purchased our first radio station. Mr. Alarcon, Sr. is Raul Alarcon, Jr.'s
father.

RAUL ALARCON, JR. has been Chief Executive Officer since June 1994 and
President and a director since October 1985. Upon completion of this offering,
Mr. Alarcon, Jr. will become Chairman of the Board of Directors and will
continue as our Chief Executive Officer and President. He also serves as the
President and a Director of Spanish Broadcasting System, Inc., a New Jersey
corporation that is wholly-owned by SBS, and President or Vice President of
those of SBS's other subsidiaries that own and operate our radio stations. Mr.
Alarcon, Jr. joined SBS-NJ as a sales manager in 1983 and became a director and
the Chief Executive Officer and President of SBS-NJ in 1986. Mr. Alarcon, Jr. is
responsible for our long-range strategic planning and was instrumental in the
acquisition and financing of each of our radio stations. Mr. Alarcon, Jr. is the
son of Mr. Alarcon, Sr. and the son-in-law of Mr. Grimalt.

JOSE GRIMALT has been Secretary and a member of our board of directors
since June 1994. Upon completion of this offering, Mr. Grimalt will become
Secretary Emeritus and will continue to be a member of our board of directors.
From 1969 to 1986, Mr. Grimalt owned and operated Spanish-language station
WLVH-FM in Hartford, Connecticut. In 1984, Mr. Grimalt became a stockholder and
the President of SBS's California subsidiary which operated KXMG-AM in Los
Angeles. Mr. Grimalt is Mr. Alarcon, Jr.'s father-in-law.

JOSEPH A. GARCIA has been Chief Financial Officer, Executive Vice President
and Assistant Secretary since June 1994. Upon completion of this offering, Mr.
Garcia will become Secretary and will continue to be our Chief Financial Officer
and Executive Vice-President. He was
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appointed Executive Vice President in March 1996. He joined SBS-NJ in 1984 and
since then has served as the Chief Financial Officer of SBS-NJ and those of
SBS's subsidiaries that own and operate SBS's radio stations. Before joining
SBS-NJ, Mr. Garcia spent thirteen years in financial positions with Philip
Morris and Revlon, where he was Manager of Financial Planning for Revlon-Latin
America.

JESUS SALAS has been the Vice President of Programming since April 1998. He
joined SBS in March 1997 as the Programming Director for the Miami stations.
Prior to joining SBS he worked for New Age Broadcasting, Inc., where he began
his career in November 1993 as a disc jockey and was eventually promoted to
programming director.

LUIS DIAZ-ALBERTINI has been the Vice President of Sales since September
1998. He began his employment with SBS as the General Manager of WLEY-FM in
Chicago in March 1997. Prior to joining SBS, Mr. Diaz-Albertini's experience
included being VP/General Manager of the four stations located in Miami for
Hispanic Broadcasting Corporation (formerly Heftel Broadcasting Corporation).
Mr. Diaz-Albertini has worked in the broadcasting industry for 26 years.

ROMAN MARTINEZ IV has been nominated to become a director upon completion
of this offering. Mr. Martinez is a Managing Director for the investment banking
firm of Lehman Brothers Inc. where he has held his title since 1978. Mr.
Martinez has been an investment banker advising corporations on financings,
mergers and acquisitions and related financial matters since 1971. Mr. Martinez
sits on the Board of Governors of New York Presbyterian Healthcare System, Inc.
and on the Board of Directors of the International Rescue Committee. Lehman
Brothers Inc. has been engaged by us as financial advisor, lead underwriter for
this offering and the concurrent offering of our senior subordinated notes due
2009, Dealer-Manager for the tender offers and consent solicitations relating to
our 11% and 12 1/2% notes, and sole lead arranger and book running manager with
respect to the senior credit facilities. An affiliate of Lehman Brothers Inc.,
Lehman Commercial Paper Inc., will act as administrative agent in connection
with the senior credit facilities.

JASON L. SHRINSKY has been nominated to become a director upon completion
of this offering. Mr. Shrinsky is a partner of the law firm of Kaye, Scholer,
Fierman, Hays & Handler, LLP, where he has been a partner since January 1, 1986.
Mr. Shrinsky has been a lawyer counseling corporations and high net worth
individuals on financings, mergers and acquisitions, other related financial
transactions and regulatory procedures since 1964. Kaye, Scholer, Fierman, Hays
& Handler, LLP has served as counsel to us for more than 15 years, including in
connection with this offering, the concurrent senior subordinated notes
offering, the tender offers for our 11% and 12 1/2% notes and the pending
purchase of the eight radio stations in Puerto Rico. The fees paid by us to
Kaye, Scholer, Fierman, Hays & Handler, LLP do not exceed five percent of such
law firm's consolidated gross revenues for its last full fiscal year.

COMMITTEES OF THE BOARD OF DIRECTORS

The board of directors intends to establish an Audit Committee whose
members will be our two independent director nominees, Roman Martinez IV and
Jason L. Shrinsky.

The board of directors also maintains a Compensation Committee, whose
members will consist of Mr. Alarcon, Jr. and the independent director nominees.
Mr. Alarcon, Jr. is our Chief Executive Officer and President. The Compensation
Committee has not met in fiscal year 1999. Compensation for our executive
officers for fiscal 1999 was determined by Mr. Alarcon, Jr. See "Certain
Relationships and Related Transactions."

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EXECUTIVE COMPENSATION

The following sets forth all compensation awarded to, earned by or paid for
services rendered to SBS and its subsidiaries in all capacities during the
fiscal years 1998, 1997 and 1996 by our Chief Executive Officer and President
and our next four highest paid executive officers at September 27, 1998, whose
annual salary and bonus exceeded $100,000. When reading this table you should
note that we intend to enter into new employment agreements with Messrs.
Alarcon, Jr., Garcia and Diaz-Albertini which will become effective upon
completion of this offering and will provide for the payment of salaries and
bonuses that may differ from those set forth below. For a description of these
agreements see "Employment Agreements and Arrangements." Effective upon
completion of this offering, Messrs. Alarcon, Sr. and Grimalt will be retiring
as salaried executives of SBS but will remain as members of our board of
directors.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
OTHER ANNUAL
NAME PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION
- ---- ----------------------------- ---- ---------- -------- ------------
<S> <C> <C> <C> <C> <C>
Raul Alarcon, Jr............. Chief Executive Officer and 1998 $1,633,743(1) $215,000 $63,624(2)
President 1997 1,361,647 -- 86,774(2)
1996 746,584 237,000 $78,036(2)
Pablo Raul Alarcon, Sr....... Chairman of the Board of 1998 492,577(4) 25,000 50,745(2)
Directors 1997 474,000 200,000 (3)
1996 464,000 112,000 (3)
Jose Grimalt................. Secretary and Director 1998 250,000(4) 25,000 (3)
1997 310,184 -- (3)
1996 250,000 12,000 (3)
Joseph A. Garcia............. Executive Vice President and 1998 266,346 27,500 (3)
Chief Financial Officer 1997 244,671 53,000 (3)
1996 214,659 5,000 (3)
Luis Diaz-Albertini.......... Vice President/Group Sales 1998 200,000 25,000 (3)
1997 69,231 -- (3)
</TABLE>

- ---------------

(1) Excludes amounts paid by us in connection with our lease of an apartment in
Manhattan owned by Mr. Alarcon, Jr. which is used primarily by Mr. Alarcon,
Jr. while on SBS business in New York. Excludes the payment of a dividend to
our stockholders, of which Mr. Alarcon, Jr. received $3.1 million. See
"Certain Relationships and Related Transactions." Excludes relocation
expenses made in connection with relocation of our headquarters. Based on
preliminary financial data, for the fiscal year ended 1999, it is
anticipated that Mr. Alarcon, Jr.'s salary and bonus pursuant to his
existing employment agreement will total approximately $3.7 million.

(2) Messrs. Alarcon, Jr. and Alarcon, Sr. receive personal benefits in addition
to their salaries and bonuses, including use of automobiles. We paid $23,400
in each of 1998, 1997, and 1996 for an automobile used primarily by Mr.
Alarcon, Jr. We paid $30,170, $54,253 and $54,636 in each of 1998, 1997 and
1996, respectively, for use of a limousine (including driver's salary) used
primarily by Mr. Alarcon, Jr. We paid $39,569 in 1998 for an automobile
(including driver's salary) used primarily by Mr. Alarcon, Sr. Based on
preliminary financial data, for fiscal year ended 1999, Mr. Alarcon, Jr.,
received personal benefits estimated at $121,200, including the use of
automobiles and an apartment in Key Biscayne, Florida. We intend to
terminate the lease for his apartment in Key Biscayne after completion of
construction of his new home.

(3) Excludes perquisites and other personal benefits, securities or property
which aggregate the lesser of $50,000 or 10% of the total of annual salary
and bonus.

(4) Messrs. Alarcon, Sr. and Grimalt have agreed with us that effective upon
completion of this offering, they will no longer be entitled to receive any
compensation from us other than

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reimbursement of their out-of-pocket expenses as members of the board of
directors. Upon completion of this offering we intend to also provide
Messrs. Alarcon, Sr. and Grimalt with the use of automobiles and, in the
case of Mr. Alarcon, Sr., a driver. We have also entered into a memorandum
of understanding to purchase annuities for the retirement of Messrs.
Alarcon, Sr. and Grimalt. See "Employment Agreements and Arrangements."

DIRECTOR COMPENSATION

Directors who are officers or former officers do not receive any additional
compensation for serving on our board of directors. All directors are reimbursed
for their out-of-pocket expenses incurred in connection with their service as
directors. All of our non-employee directors will be eligible to receive options
under our stock plans as described below. Upon election to the board of
directors following completion of this offering, we intend to grant to Messrs.
Roman Martinez IV and Jason L. Shrinsky options for 50,000 shares of Class A
Common Stock exercisable at the public offering price, of which 10,000 shall
vest immediately. See "Stock Plans -- Non-Employee Director Stock Option Plan."

Arnold Scheiffer, who served as a director from 1996 until August 1999,
will receive a cash payment of $250,000 and options to purchase 250,000 shares
of Class A Common Stock exercisable at the offering price (which vest upon
completion of this offering), for his services as a director. The cash payment
and grant of options are expected to be made upon the completion of this
offering.

EMPLOYMENT AGREEMENTS AND ARRANGEMENTS

Raul Alarcon, Jr.

We intend to enter into an amended and restated employment agreement with
Raul Alarcon, Jr. pursuant to which Mr. Alarcon, Jr. will serve as our Chairman
of the Board of Directors, Chief Executive Officer and President. This new
agreement would become effective upon the completion of this offering, expire
December 31, 2004 and renew for successive one-year periods after December 31,
2004, unless notice of termination is delivered by either party 90 days prior to
the termination date. The agreement will provide for a base salary of not less
than $1.0 million for each year of the employment term, which may be increased
by the board of directors. Under the terms of the agreement, Mr. Alarcon, Jr.
will be paid an annual cash performance bonus determined by the board of
directors based on annual same station broadcast cash flow growth. Mr. Alarcon,
Jr. will receive options to purchase 100,000 shares of Class A Common Stock each
year of employment with the initial grant to be made on the pricing date of this
offering (which vest upon completion of this offering) at an exercise price
equal to the offering price, and thereafter on each anniversary of the effective
date of the agreement at an exercise price equal to the then fair market value
of our Class A Common Stock. Mr. Alarcon, Jr. will also be entitled to
participate in our employee benefit plans and to receive other non-salary
benefits, such as health insurance, life insurance, reimbursement for business
related expenses, reimbursement for country club dues and reimbursement for
personal tax and accounting expenses. The agreement will provide that Mr.
Alarcon, Jr.'s employment may be terminated at the election of the board of
directors upon his disability or for cause (as defined in the agreement).
Pursuant to the agreement, Mr. Alarcon, Jr. will be entitled to the use of one
automobile and driver at our expense.

Joseph A. Garcia and Luis Diaz-Albertini

We intend to enter into an employment agreement with each of Joseph A.
Garcia and Luis Diaz-Albertini pursuant to which Mr. Garcia will serve as our
Chief Financial Officer, Executive Vice President and Secretary and Mr.
Diaz-Albertini will serve as our Vice President/Group Sales. These employment
agreements would become effective upon completion of this offering,

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<PAGE> 72

terminate on September 30, 2002 and automatically renew for successive one-year
periods after September 30, 2002, unless notice of termination is delivered by
either party within 90 days prior to the termination date or any succeeding
September 30. Mr. Garcia and Mr. Diaz-Albertini will receive an annual base
salary of $300,000 and $225,000, respectively, which may be increased by the
board of directors. In addition, Mr. Garcia shall be entitled to receive (i) an
annual cash bonus to be determined by the board of directors based on
performance and (ii) options to purchase 250,000 shares of Class A Common Stock
for past performance to be granted on the pricing date of this offering, with
50,000 shares to vest upon completion of this offering and 200,000 shares to
vest ratably over a four-year period. Mr. Diaz-Albertini shall receive (i) an
annual cash bonus to be determined by the board of directors based on
performance and (ii) options to purchase 50,000 shares of Class A Common Stock
for past performance to be granted on the pricing date of this offering, with
10,000 shares to vest upon completion of this offering, and 40,000 shares to
vest ratably over a four-year period. Messrs. Garcia and Diaz-Albertini will
also receive standard employee benefits provided to all of our executives, such
as health, life and long-term disability insurance and reimbursement for
business related expenses.

Annuity

We have entered into a memorandum of understanding with Messrs. Alarcon,
Sr. and Grimalt to purchase an annuity from The Canada Life Assurance Company as
a retirement vehicle for the benefit of Messrs. Alarcon, Sr. and Grimalt. We
will pay approximately $10.6 million for such annuity and Messrs. Alarcon, Sr.
and Grimalt will receive annual payments of approximately $700,000 and $300,000,
respectively.

STOCK PLANS

1999 Option Plan

We have adopted an option plan to incentivize our present and future
executive, managerial and other employees through equity ownership. The option
plan will provide for the granting of stock options to individuals selected by
the compensation committee of the board of directors (or by the board if such
committee is not appointed). An aggregate of 3,000,000 shares of Class A Common
Stock have been reserved for issuance under this option plan. The option plan
will allow us to tailor incentive compensation for the retention of personnel,
to support corporate and business objectives, and to anticipate and respond to a
changing business environment and competitive compensation practices.

The compensation committee, or such other committees as the board of
directors shall determine, has discretion to select the participants, to
determine the type, size and terms of each award, to modify the terms of awards,
to determine when awards will be granted and paid, and to make all other
determinations which it deems necessary or desirable in the interpretation and
administration of the option plan. The option plan terminates ten years from the
date that it was approved and adopted by the stockholders of SBS. Generally, a
participant's rights and interest under the option plan are not transferable
except by will or by the laws of descent and distribution.

Options, which include non-qualified stock options and incentive stock
options, are rights to purchase a specified number of shares of Class A Common
Stock at a price fixed by the compensation committee. The option price may be
less than, equal to or greater than the fair market value of the underlying
shares of Class A Common Stock, but in no event will the exercise price of an
incentive stock option be less than the fair market value on the date of grant.

Options will expire no later than ten years after the date on which they
are granted (five years in the case of incentive stock options granted to 10%
stockholders). Options will become exercisable at such times and in such
installments as the compensation committee or other

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<PAGE> 73

designated committee shall determine. Notwithstanding this, any nonexercisable
options shall immediately vest and become exercisable upon a change in control
of SBS. Upon termination of a participant's employment with SBS, options that
are not exercisable will be forfeited immediately and options that are
exercisable will remain exercisable for twelve months following any termination
by reason of an optionholder's death, disability or retirement. If termination
is for any other reason other than cause, exercisable options will remain
exercisable for three months following such termination. Payment of the option
price must be made in full at the time of exercise in such form (including, but
not limited to, cash or common stock of SBS) as the compensation committee may
determine.

In the event of a reorganization, recapitalization, stock split, stock
dividend, combination of shares, merger, consolidation, distribution of assets,
or any other change in the corporate structure of shares of SBS, the
compensation committee will have the discretion to make any adjustments it deems
appropriate in the number and kind of shares reserved for issuance upon the
exercise of options and vesting of grants under the option plan and in the
exercise price of outstanding options.

Non-Employee Director Stock Option Plan

We have also adopted a separate option plan for our non-employee directors.
The terms of the plan provide that the board of directors has the discretion to
grant stock options to any non-employee director. An aggregate of 300,000 shares
of Class A Common Stock have been reserved for issuance under this option plan.
The plan is administered by the board of directors. Upon completion of this
offering, we intend to grant each of Messrs. Shrinsky and Martinez an option
under this plan to purchase 50,000 shares of Class A Common Stock exercisable at
the offering price. Of these 50,000 shares, 10,000 shall vest immediately and
10,000 shall vest each year over the next four years on the anniversary of the
grant so long as they remain directors. Any non-exercisable options shall
immediately vest and become exercisable upon a change in control of SBS. If
their service as directors is terminated for any reason, all options held by
non-employee directors which have not then vested shall terminate automatically.

401(k) Plan

We offer a tax-qualified employee savings and retirement plan (the "401(k)
Plan") covering our employees. Pursuant to the 401(k) Plan, an employee may
elect to reduce his annual salary by 1%-15% not to exceed the statutorily
prescribed annual limit which is $10,000 for 1999, and have the amount of such
reduction contributed to the 401(k) Plan. We may, at our option and in our sole
discretion, make matching and/or profit sharing contributions to the 401(k) Plan
on behalf of all participants. The 401(k) Plan is intended to qualify under
Section 401(a) of the Code so that contributions by employees or by us to the
401(k) Plan and income earned on plan contributions are not taxable to employees
until distributed to them and contributions by us will be deductible by us when,
and if, made. The trustees under the 401(k) Plan, at the direction of each
participant, invest such participant's assets in the 401(k) Plan in selected
investment options.

LIMITATIONS ON DIRECTORS' AND OFFICERS' LIABILITY

Our third amended and restated certificate of incorporation has a provision
which limits the liability of directors to us to the maximum extent permitted by
Delaware law. The third amended and restated certificate of incorporation
specifies that our directors will not be personally liable for monetary damages
for breach of fiduciary duty as a director. This limitation does not apply to
actions by a director or officer that do not meet the standards of conduct which

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make it permissible under the Delaware General Corporation Law for the Company
to indemnify such director or officer.

Our amended and restated by-laws provide for indemnification of directors
and officers (and others) in the manner, under the circumstances and to the
fullest extent permitted by the Delaware General Corporation Law. This generally
authorizes indemnification as to all expenses incurred or imposed as a result of
actions, suits or proceedings if the indemnified parties act in good faith and
in a manner they reasonably believe to be in or not opposed to the best
interests of SBS. Upon completion of this offering, it is intended that each
director will enter into an indemnification agreement with us that provides for
indemnification to the fullest extent provided by law. We believe that these
provisions are necessary or useful to attract and retain qualified persons as
directors and officers.

We have obtained insurance for the benefit of our directors and officers
that provides for coverage of up to $100.0 million.

There is no pending litigation or proceeding involving a director or
officer as to which indemnification is being sought.

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PRINCIPAL STOCKHOLDERS

The following table sets forth information concerning the beneficial
ownership of our Class A Common Stock and our Class B Common Stock before and
after giving effect to this offering, but without giving effect to the exercise
of the underwriters' overallotment option, by:

- each person known to us to own beneficially more than 5% of any class of
common stock; and

- each director and each named executive officer.

All shares are owned with sole voting and investment power. Prior to
completion of this offering, none of the principal stockholders will own any
shares of Class A Common Stock.

<TABLE>
<CAPTION>
CLASS B SHARES CLASS B SHARES CLASS A SHARES
PRIOR TO BOTH UPON COMPLETION OF UPON COMPLETION OF
OFFERINGS(2) BOTH OFFERINGS(2) BOTH OFFERINGS(2)
----------------------- ----------------------- ---------------------- PERCENT OF
PERCENT OF PERCENT OF PERCENT OF TOTAL PERCENT OF
NUMBER OF CLASS B NUMBER OF CLASS B NUMBER OF CLASS A ECONOMIC TOTAL VOTING
NAME AND ADDRESS(1) SHARES SHARES SHARES SHARES SHARES SHARES INTEREST POWER
- ------------------- ---------- ---------- ---------- ---------- --------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Pablo Raul Alarcon,
Sr..................... 1,820,000 4.6% 1,070,000 3.1% -- 0% 1.9% 2.9%
Raul Alarcon, Jr......... 27,906,750 70.7% 26,156,750 75.6% 100,000(3) * 46.0% 71.0%
Jose Grimalt............. 606,650 1.5% 481,650 1.4% -- 0% 0.8% 1.3%
Joseph A. Garcia......... 5,000 * 5,000 * 50,000(3) * * *
Luis Diaz-Albertini...... -- 0% -- 0% 10,000(3) * * *
Roman Martinez IV........ -- 0% -- 0% 10,000(3) * * *
Jason Shrinsky........... -- 0% -- 0% 10,000(3) * * *
All executive officers
and directors as a
group.................. 30,338,400 76.8% 27,713,400 80.1% 180,000(3) * 48.7% 75.2%
</TABLE>

- ---------------
* Indicates less than 1%.

(1) The address of all directors and executive officers in this table, unless
otherwise specified, is c/o Spanish Broadcasting System, Inc., 3191 Coral
Way, Miami, Florida 33145.

(2) As used in this table, "beneficial ownership" means the sole or shared power
to vote or direct the voting of a security, or the sole or shared power to
dispose, or direct the disposition, of a security. A person is deemed as of
any date to have beneficial ownership of any security that the person has
the right to acquire within 60 days after that date. For purposes of
computing the percentage of outstanding shares held by each person named
above, any security that the person has the right to acquire within 60 days
of the date of calculation is deemed to be outstanding, but is not deemed to
be outstanding for purposes of computing the percentage ownership of any
other person.

(3) Indicates Class A Common Stock issuable upon the exercise of options that
are exercisable within sixty days of the completion of this offering and
does not include shares issuable upon exercise of options that have not yet
vested.

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SELLING STOCKHOLDERS

The following table sets forth with respect to each of the selling
stockholders (1) the number of shares of Class B Common Stock held by that
selling stockholder prior to this offering, (2) the number of shares of Class A
to be sold by that selling stockholder in this offering, (3) the amount of Class
B Common Stock that selling stockholder will hold after completion of this
offering, (4) the percentage of the outstanding Class B Common Stock that
selling stockholder will hold after completion of the offering, and (5) the
percentage of total voting power that selling stockholder will hold after
completion of this offering, without giving effect to the exercise of the
Underwriters' over-allotment option. As of the date of this prospectus, the
selling stockholders own shares of Class B Common Stock. Immediately prior to
the completion of this offering, each selling stockholder will convert a number
of shares of Class B Common Stock into an equal number of shares of Class A
Common Stock being sold by such selling stockholder in this offering. Upon
completion of this offering, the selling stockholders will only own shares of
Class B Common Stock.

<TABLE>
<CAPTION>
NUMBER OF
NUMBER OF NUMBER OF SHARES OF PERCENTAGE
SHARES OF SHARES OF CLASS B OF TOTAL
CLASS B CLASS A COMMON STOCK COMMON STOCK PERCENTAGE
COMMON STOCK COMMON STOCK HELD AFTER HELD AFTER OF TOTAL
NAME OF SELLING HELD PRIOR TO TO BE SOLD IN COMPLETION OF COMPLETION OF VOTING
STOCKHOLDER THIS OFFERING THIS OFFERING THIS OFFERING THIS OFFERING POWER
- --------------- ------------- ------------- ------------- ------------- ----------
<S> <C> <C> <C> <C> <C>
Pablo Raul Alarcon, Sr.(1)............... 1,820,000 750,000 1,070,000 1.9% 2.9%
Raul Alarcon, Jr.(2)..................... 27,906,750 1,750,000 26,156,750 46.0% 71.0%
Jose Grimalt(3).......................... 606,650 125,000 481,650 0.8% 1.3%
The Brown & Williamson Master Retirement
Trust(4)(5)(6)......................... 32,400 19,450 12,950 * *
Police Officers Pension System of the
City of Houston(4)(5)(6)............... 2,100 1,250 850 * *
Vulcan Materials(4)(5)(6)................ 400 250 150 * *
The Mainstay Funds, on Behalf of its High
Yield Corporate Bond Fund
Series(4)(5)(6)........................ 2,655,750 1,593,450 1,062,300 1.9% *
The Mainstay VP Series Fund, Inc., on
Behalf of its High Yield Corporate Bond
Portfolio(4)(5)(6)..................... 179,900 107,950 71,950 * *
Northstar High Total Return Fund(4)(7)... 250,000 250,000 -- 0.0% 0.0%
Northstar Galaxy Trust High Yield Bond
Portfolio(4)(7)........................ 5,000 5,000 -- 0.0% 0.0%
Prospect Street High Income Portfolio,
Inc.(4)(8)............................. 25,000 25,000 -- 0.0% 0.0%
Vail(4)(9)(10)........................... 30,000 30,000 -- 0.0% 0.0%
Omaha Public School Employees Retirement
System(4)(9)(10)....................... 30,000 30,000 -- 0.0% 0.0%
City of New York Police Pension
Fund(4)(9)(10)......................... 30,000 30,000 -- 0.0% 0.0%
City of New York
Employees Retirement
System(4)(9)(10)....................... 30,000 30,000 -- 0.0% 0.0%
CSAM Strategic Global Income
Fund(4)(9)(10)......................... 30,000 30,000 -- 0.0% 0.0%
Credit Suisse Asset Management Income
Fund(9)(10)............................ 30,000 30,000 -- 0.0% 0.0%
Davis Intermediate Investment Grade Bond
Fund(11)............................... 5,050 5,050 -- 0.0% 0.0%
Value Line Aggressive Income Trust(12)... 42,800 42,800 -- 0.0% 0.0%
</TABLE>

- ---------------
* Indicates less than 1%.

(1) Pablo Raul Alarcon, Sr. is the Chairman Emeritus and a member of our board
of directors.

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<PAGE> 77

(2) Raul Alarcon, Jr. is Chairman of the Board of Directors and our Chief
Executive Officer.

(3) Jose Grimalt is our Secretary Emeritus and a member of our board of
directors.

(4) Indicates that such person is a former warrantholder and is a party to a
registration rights agreement with us providing for registration and
take-along rights. See "Description of Capital Stock -- Registration
Rights; -- Take-Along Rights."

(5) MacKay Shields Financial Corp. holds the power to vote, dispose of or
direct the voting and disposition of such securities.

(6) The address of the selling stockholder is c/o MacKay Shields Financial
Corp.; 9 West 57th Street; New York, New York 10019.

(7) The address of the selling stockholder is 300 First Stamford Place;
Stamford, Connecticut 06902.

(8) The address of Prospect Street High Income Portfolio, Inc. is 60 State
Street, Suite 3750; Boston, Massachusetts 02109.

(9) Credit Suisse Asset Management, LLC holds the power to vote or direct the
vote of such securities.

(10) The address of the selling stockholder is c/o Credit Suisse Asset
Management; One Citicorp Center, 153 East 53rd Street; New York, New York
10022.

(11) The address of Davis Intermediate Investment Grade Bond Fund is 124 East
Marcy Street; Santa Fe, New Mexico 87501.

(12) The address of Value Line Aggressive Income Trust is 220 East 42nd Street,
6th Floor; New York, New York 10017.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

See "Committees of the Board of Directors."

We have a memorandum of understanding with Messrs. Alarcon, Sr. and Grimalt
to purchase an annuity from The Canada Life Assurance Company as a retirement
vehicle for the benefit of Messrs. Alarcon, Sr. and Grimalt. We will pay
approximately $10.6 million for such annuity and Messrs. Alarcon, Sr. and
Grimalt will receive annual payments of approximately $700,000 and $300,000,
respectively.

We have entered into a memorandum of understanding with Mr. Alarcon, Sr.,
our Chairman Emeritus and a member of our board of directors, for the sale by us
of the assets and liabilities of radio station WVMQ-FM operating in Key West,
Florida and radio station WZMQ-FM operating in Key Largo, Florida. The sale
price to be paid by Mr. Alarcon, Sr. for these stations is $700,000. The
definitive agreement will contain customary representations and warranties, and
the closing of the sale of these stations will be subject to the satisfaction of
certain conditions, including approval of the FCC, the completion of this
offering and the receipt by Mr. Alarcon, Sr. of his portion of the proceeds of
this offering as a selling stockholder. We cannot assure you that the sale of
these stations will occur during the expected time frame or at all.

We lease a two-bedroom furnished condominium apartment in midtown Manhattan
from Mr. Alarcon, Jr. for a monthly rent of $9,000. The lease commenced in
August 1987 and will expire in August 2007. During fiscal years 1999 and 1998,
we renovated the apartment and incurred approximately $0.2 million in renovation
expenses. Generally, the apartment is used by Mr. Alarcon, Jr. while on SBS
business in New York. We believe that the lease for this apartment is at the
market rate.

For the year ended September 27, 1998, SBS paid operating expenses
aggregating $0.1 million for a boat owned by CMQ Radio, an entity owned equally
by Messrs. Alarcon, Sr. and Alarcon, Jr. The boat is used by SBS for business
entertainment. For the year ended September 27, 1998, the amount paid by SBS for
our use of the boat owned by CMQ Radio was comparable to amounts we would have
paid had we leased the boat from an unaffiliated party. In connection with this
offering, we will discontinue our arrangement with respect to this boat. We do
not expect to make any further payments to CMQ Radio, Inc.

In connection with Mr. Alarcon, Jr.'s relocation from the New York
metropolitan area to the Miami metropolitan area, SBS advanced to Mr. Alarcon,
Jr. an aggregate of $1.1 million to pay for various expenses. On July 16, 1997,
Mr. Alarcon, Jr. executed a promissory note to SBS for the principal amount of
$1.1 million to evidence these advances. The note was payable on demand and bore
interest at a rate of 7% per annum. SBS declared and paid a dividend in 1998,
and Mr. Alarcon, Jr. used his portion of the proceeds of the dividend to repay
this promissory note in full.

Effective July 1993, Messrs. Alarcon, Sr. and Alarcon, Jr. executed
promissory notes to SBS for the principal amounts of $0.5 million and $1.6
million, respectively. These promissory notes evidenced loans made by SBS to
Messrs. Alarcon, Sr. and Alarcon, Jr. over several prior years. The notes were
to mature in 2001 and bore interest at the rate of 6% percent per annum until
July 19, 1994 and after that at the lesser of 9% percent per annum or the prime
rate charged by the Chase Manhattan Bank, N.A. Interest on the unpaid principal
amount of the notes was payable annually. In December 1995, SBS exchanged these
promissory notes for amended and restated notes in the principal amounts of $0.6
million and $1.9 million due from

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<PAGE> 79

Messrs. Alarcon, Sr. and Alarcon, Jr., respectively. The amended and restated
notes bear interest at the rate of 6.36% per annum, and mature on December 30,
2025, and the interest is payable in 30 equal annual installments of $43,570 and
$143,158, respectively, on December 30th of each year starting December 30,
1996. As of June 27, 1999, $0.6 million and $1.9 million, plus accrued and
unpaid interest of $0.1 million and $0.4 million to date, was outstanding,
respectively, on these promissory notes. In connection with this offering,
Messrs. Alarcon, Sr. and Alarcon, Jr. have agreed to pay all remaining amounts
outstanding under these notes using their portion of the proceeds they receive
as selling stockholders in this offering.

In 1992, Messrs. Alarcon, Sr. and Alarcon, Jr. acquired a building in Coral
Gables, Florida, for the purpose of housing the studios of WCMQ-AM and WCMQ-FM.
In June 1992, SBS-Florida, a subsidiary of SBS, entered into a 20-year net lease
with Messrs. Alarcon, Sr. and Alarcon, Jr. for the Coral Gables building which
provides for a base monthly rent of $9,000. Effective June 1, 1998, the lease on
this building was assigned to SBS Realty Corp., a realty management company
owned by Messrs. Alarcon, Sr. and Alarcon, Jr. This building currently houses
the offices and studios of all of the Miami stations. The lease on the stations'
previous studios expired in October 1993, was for less than half the space of
the stations' present studios and had a monthly rental of approximately $7,500.
Based upon our prior lease for studio space, we believe that the lease for the
current studio is at market rates.

In 1992, Mr. Alarcon, Jr. organized Nuestra Telefonica, Inc., a New York
corporation, to operate long distance telephone service in Spanish aimed at the
Hispanic population in the markets served by our radio stations. In February
1993, Nuestra Telefonica entered into an access agreement with a common carrier
and commenced operations. Nuestra Telefonica advertised its Spanish-language
long distance telephone service on our radio stations in Los Angeles and New
York and purchased this air time at standard station rates. Since early 1994,
Nuestra Telefonica has not utilized any air time on our radio stations. As of
September 28, 1997 and September 27, 1998, Nuestra Telefonica owed SBS $0.4
million related to unpaid air time and $0.3 million related to certain expenses
paid by SBS on Nuestra Telefonica's behalf. The amounts due are recorded on our
books as a receivable and due from related party asset, respectively. Mr.
Alarcon, Jr. has personally guaranteed the payment of $0.5 million of Nuestra
Telefonica's obligations to SBS. Mr. Alarcon, Jr. is Nuestra Telefonica's
Chairman and majority shareholder. Joseph A. Garcia is Nuestra Telefonica's
President and a minority shareholder. Nuestra Telefonica is no longer an
operating entity and, therefore, upon the completion of this offering we will
forgive the loans and cancel the guarantees described above.

Mr. Grimalt's son is employed by SBS as an operations manager. He was paid
$128,345 and a bonus of $5,000 for the fiscal year ended September 27, 1998. Mr.
Alarcon, Jr.'s uncle is currently employed by us as an operations manager and
his salary is $76,200.

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DESCRIPTION OF CAPITAL STOCK

Set forth below is a summary of the material provisions of our capital
stock as set forth in our third amended and restated certificate of
incorporation. This summary does not purport to be complete. For a more detailed
description, see our third amended and restated certificate of incorporation and
by-laws, copies of which we have filed as exhibits to the registration
statement, and the applicable provisions of Delaware law.

Our third amended and restated certificate of incorporation provides for
authorized capital stock of 100,000,000 shares of Class A Common Stock, par
value $0.0001 per share, 50,000,000 shares of Class B Common Stock, par value
$0.0001 per share and 1,000,000 shares of preferred stock, par value $0.01 per
share. All of the shares of Class A Common Stock being issued pursuant to this
offering will be fully paid and non-assessable.

We currently have outstanding 229,477 shares of preferred stock, par value
$.01 per share, all of which will be redeemed with the proceeds from this
offering.

CLASS A COMMON STOCK AND CLASS B COMMON STOCK

General. The holders of Class A Common Stock and Class B Common Stock have
identical rights except with respect to voting, conversion and transfer.

Voting Rights. Holders of our Class A Common Stock are entitled to one
vote per share on all matters to be voted on by stockholders, while holders of
Class B Common Stock are entitled to ten votes per share. Holders of shares of
Class A Common Stock and Class B Common Stock are not entitled to cumulate their
votes in the election of directors. Generally, all matters to be voted on by
stockholders must be approved by a majority of the votes entitled to be cast by
all holders of Class A Common Stock and Class B Common Stock present in person
or represented by proxy, voting together as a single class, subject to any
voting rights granted to holders of any preferred stock. Except as otherwise
provided by law or in our second amended and restated certificate of
incorporation, and subject to any voting rights granted to holders of any
outstanding preferred stock, amendments to our second amended and restated
certificate of incorporation must be approved by a majority of the votes
entitled to be cast by all holders of Class A Common Stock and Class B Common
Stock present in person or represented by proxy, voting together as a single
class. However, amendments to our second amended and restated certificate of
incorporation that would alter or change the powers, preferences or special
rights of the Class A Common Stock so as to affect them adversely also must be
approved by a majority of the votes entitled to be cast by the holders of the
Class A Common Stock, voting as a separate class. Any amendment to our second
amended and restated certificate of incorporation to increase the authorized
shares of any class requires the approval only of a majority of the votes
entitled to be cast by all holders of Class A Common Stock and Class B Common
Stock present in person or represented by proxy, voting together as a single
class, subject to the rights set forth in any series of preferred stock created
as described below.

Dividends. Holders of our Class A Common Stock and Class B Common Stock
will share equally on a per share basis in any dividend declared by the board of
directors, subject to any preferential rights of any outstanding preferred
stock. Dividends consisting of shares of Class A Common Stock and Class B Common
Stock may be paid only as follows: (1) shares of Class A Common Stock may be
paid only to holders of Class A Common Stock, and shares of Class B Common Stock
may be paid only to holders of Class B Common Stock; and (2) the number of
shares so paid will be equal on a per share basis with respect to each
outstanding share of Class A Common Stock and Class B Common Stock.

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<PAGE> 81

We may not reclassify, subdivide or combine shares of either class of
common stock without at the same time proportionally reclassifying, subdividing
or combining shares of the other class.

Other Provisions. The holders of each class of common stock will share
equally on a per share basis, upon liquidation or dissolution all of the assets
available for distribution to common stockholders. The holders of common stock
have no preemptive or other subscription rights, and there are no redemption or
sinking fund provisions with respect to these shares.

Merger or Consolidation. In the event of a merger or consolidation, the
holders of Class A Common Stock and Class B Common Stock will be entitled to
receive the same per share consideration, if any, except that if the
consideration includes voting securities (or the right to acquire voting
securities or securities exchangeable for, or convertible into, voting
securities), we may (but are not required to) provide for the holders of Class B
Common Stock to receive consideration entitling them to ten times the number of
votes per share as the consideration being received by holders of the common
stock.

Conversion of Class B Common Stock. Our Class B Common Stock will be
convertible into Class A Common Stock on a share-for-share basis at the option
of the holder at any time, or automatically upon transfer to a person or entity
which is not a permitted transferee. In general, permitted transferees will
include us, Messrs. Alarcon, Sr., Alarcon, Jr. and Grimalt, and any of their
family members, estates, heirs, guardians, trusts, accounts and controlled
entities.

Blank-check Preferred Stock. Our board of directors is empowered, without
approval of the stockholders, to cause shares of preferred stock to be issued
from time to time in one or more series, and the board of directors may fix the
number of shares of each series and the designation, powers, privileges,
preferences and rights and the qualifications, limitations and restrictions of
the shares of each series.

The specific matters that our board of directors may determine include the
following:

- the designation of each series;

- the number of shares of each series;

- the rate of any dividends;

- whether any dividends shall be cumulative or non-cumulative;

- the terms of any redemption;

- the amount payable in the event of any voluntary liquidation, dissolution
or winding up of the affairs of our company;

- rights and terms of any conversion or exchange;

- restrictions on the issuance of shares of the same series or any other
series; and

- any voting rights.

Although no shares of preferred stock will be outstanding at the time of
this offering (other than our 14 1/4% preferred stock which will be redeemed
with the proceeds from this offering) and although we have no current plans to
issue additional preferred stock, the issuance of shares of preferred stock, or
the issuance of rights to purchase shares of preferred stock, could be used to
discourage an unsolicited acquisition proposal. For example, a business
combination could be impeded by issuing a series of preferred stock containing
class voting rights that would enable the holder or holders of this series to
block the transaction. Alternatively, a business combination

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could be facilitated by issuing a series of preferred stock having sufficient
voting rights to provide a required percentage vote of the stockholders. In
addition, under certain circumstances, the issuance of preferred stock could
adversely affect the voting power and other rights of the holders of the common
stock. Although our board of directors is required to make any determination to
issue any preferred stock based on its judgement as to the best interests of our
stockholders, it could act in a manner that would discourage an acquisition
attempt or other transaction that some, or a majority, of the stockholders might
believe to be in their best interests or in which stockholders might receive a
premium for their stock over prevailing market prices of the stock. Our board of
directors does not at present intend to seek stockholder approval prior to any
issuance of currently authorized stock, unless otherwise required by law or
applicable stock exchange requirements.

LIMITATION ON LIABILITY OF DIRECTORS

Our third amended and restated certificate of incorporation provides, as
authorized by Section 102(b)(7) of the Delaware General Corporation Law
("DGCL"), that our directors will not be personally liable to us or our
stockholders for any monetary damages for breach of fiduciary duty as a
director. This limitation does not apply to actions by a director that do not
meet the standards of conduct which make it permissible under the Delaware
General Corporation Law for the Company to indemnify such director.

The inclusion of this provision in our third amended and restated
certificate of incorporation may have the effect of reducing the likelihood of
derivative litigation against our directors, and may discourage or deter
stockholders or management from bringing a lawsuit against directors for breach
of their duty of care, even though those actions, if successful, might otherwise
have benefitted our company and our stockholders.

SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW

We are a Delaware corporation and subject to Section 203 of the DGCL.
Generally, Section 203 prohibits a publicly held Delaware corporation from
engaging in a "business combination" with an "interested stockholder" for a
period of three years after the time a stockholder became an interested
stockholder unless, as described below, certain conditions are satisfied. Thus,
it may make acquisition of control of our company more difficult. The
prohibitions in Section 203 of the DGCL do not apply if the following occur:

- prior to the time the stockholder became an interested stockholder, our
board of directors approved either the business combination or the
transaction which resulted in the stockholder becoming an interested
stockholder;

- upon the closing of the transaction which resulted in the stockholder
becoming an interested stockholder, the interested stockholder owned at
least 85% of the voting stock of our company outstanding at the time the
transaction commenced; and

- at or subsequent to the time the stockholder became an interested
stockholder, the business combination is approved by our board of
directors and authorized by the affirmative vote of at least 66 2/3% of
the outstanding voting stock that is not owned by the interested
stockholder.

Under Section 203 of the DGCL, a "business combination" includes the
following:

- any merger or consolidation of our company with the interested
stockholder;

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- any sale, lease, exchange or other disposition, except proportionately as
a stockholder of our company, to or with the interested stockholder, of
assets of our company having an aggregate market value equal to 10% or
more of either the aggregate market value of all the assets of our
company or the aggregate market value of all the outstanding stock of our
company;

- transactions resulting in the issuance or transfer by our company of our
stock to the interested stockholder;

- transactions involving our company which have the effect of increasing
the proportionate share of the stock of any class or series of our
company which is owned by the interested stockholder; and

- transactions in which the interested stockholder received financial
benefits provided by us.

Under Section 203 of the DGCL, an "interested stockholder" generally is one
of the following:

- any person that owns 15% or more of the outstanding voting stock of our
company;

- any person that is an affiliate or associate of our company and was the
owner of 15% or more of the outstanding voting stock of our company at
any time within the three-year period prior to the date on which it is
sought to be determined whether that person is an interested stockholder;
and

- the affiliates or associates of that person.

Because Mr. Alarcon, Jr. will own more than 15% of our voting stock both
prior to and after the completion of this offering, Section 203 of the DGCL by
its terms is currently not applicable to business combinations with Mr. Alarcon,
Jr. even though Mr. Alarcon, Jr. owns 15% or more of our outstanding stock.
However, if any other person acquires 15% or more of our outstanding stock
following this offering, that person will be subject to the provisions of
Section 203 of the DGCL.

LISTING

Our shares of Class A Common Stock have been approved for quotation on The
Nasdaq National Market under the symbol "SBSA," subject to official notice of
issuance.

TRANSFER AGENT

Our transfer agent and registrar for our common stock is First Union
National Bank.

REGISTRATION RIGHTS

1994 Warrants. We are a party to a Common Stock Registration Rights and
Stockholders Agreement dated June 29, 1994 pursuant to which holders of at least
25% of the shares of Class B Common Stock issued upon the exercise of the 1994
warrants are entitled to require SBS to effect up to two registrations of their
shares under the Securities Act. Upon receiving a demand for registration, we
are required to prepare, file and cause to be effective within 180 days of the
demand, a registration statement in respect of all of these shares of Class B
Common Stock, provided that, in lieu of filing the registration statement, we
may make an offer to repurchase all of these shares of Class B Common Stock at a
price per share equal to the fair market value per share of common stock,
without any discount for lack of liquidity, the amount

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of common stock proposed to be sold or the fact the shares of common stock may
represent a minority interest in a private company. The fair market value of
these shares is to be determined by a nationally recognized investment banking
firm selected by SBS.

1997 Warrants. We are also a party to a Common Stock Registration Rights
and Stockholders Agreement dated March 15, 1997, pursuant to which holders of at
least 25% of the shares of Class B Common Stock issued upon the exercise of the
1997 warrants are entitled to require SBS to effect up to two registrations of
their shares under the Securities Act. Upon receiving a demand for registration,
we are required to prepare, file and cause to be effective within 180 days of
the demand, a registration statement in respect of all of these shares of Class
B Common Stock, provided that, in lieu of filing the registration statement we
may make an offer to repurchase all these shares at a price per share equal to
the fair market value per share of Class B Common Stock, without any discount
for lack of liquidity, the amount of Class B Common Stock proposed to be sold or
the fact that the shares of Class B Common Stock may represent a minority
interest in a private company. The fair market value of these shares is to be
determined by a nationally recognized investment banking firm selected by SBS.

Holders of shares of Class B Common Stock issued upon the exercise of the
1994 and the 1997 warrants also have the right to include the shares in any
registration statement under the Securities Act filed by us for our own account
or for the account of any of our securityholders for sale on the same terms and
conditions. This right does not apply to a registration statement on Form S-4 or
S-8, a registration statement filed in connection with an offer of securities
solely to existing securityholders, or a demand registration by other
securityholders who have demand rights. If the holders exercise their right to
be included in a registration statement, the number of shares requested to be
included is subject to reduction to the extent that SBS is advised by the
managing underwriter that the total number of shares proposed to be included
would materially and adversely affect the success of the offering. Holders of
2,230,200 shares have elected to exercise their piggy-back registration rights
and participate in the offering.

TAKE-ALONG RIGHTS

Pursuant to each of the Common Stock Registration Rights and Stockholders
Agreements described in the section above, the holders of the shares of Class B
Common Stock issued upon exercise of either the 1994 warrants or 1997 warrants
have certain "take-along" rights. These take-along rights require Messrs.
Alarcon, Sr., Alarcon, Jr. and Grimalt and certain of their transferees to offer
the holders of shares issued upon exercise of either the 1994 or 1997 warrants
to participate on a pro rata basis in any transfer made by Messrs. Alarcon, Sr.,
Alarcon, Jr., Grimalt and certain of their transferees if such transfer is (1)
of shares consisting of more than 15% of the shares of Class B Common Stock
collectively owned by Messrs. Alarcon, Sr., Alarcon, Jr., Grimalt and certain of
their transferees, (2) not being made as part of a bona fide public distribution
pursuant to an effective registration statement under the Securities Act of
1933, and (3) not a transfer among Messrs. Alarcon, Sr., Alarcon, Jr., Grimalt
and certain of their transferees.

ALIEN OWNERSHIP

Our third amended and restated certificate of incorporation restricts the
ownership and voting of our capital stock, including our Class A Common Stock
and Class B Common Stock, in accordance with the Communications Act and the
rules of the FCC to prohibit direct ownership of more than 25% of our
outstanding capital stock (or beneficial ownership of more than 25% of our
capital stock through others) by or for the account of aliens, foreign

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governments, or non-U.S. corporations or corporations otherwise subject to
control by those persons or entities. Our third amended and restated certificate
of incorporation also prohibits any transfer of our capital stock which would
cause SBS to violate this prohibition. In addition, our third amended and
restated certificate of incorporation authorizes our board of directors to adopt
other provisions that it deems necessary to enforce these prohibitions. See
"Business -- FCC Licenses -- Ownership Matters."

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DESCRIPTION OF INDEBTEDNESS

Concurrently with this offering of our Class A Common Stock, we are
offering approximately $235.0 million aggregate principal amount of %
senior subordinated notes due 2009 by means of a separate prospectus. Upon
completion of this offering and the senior subordinated notes offering, we
intend to enter into the senior credit facilities described below. The
documentation relating to the facilities has not been completed. Accordingly,
the description below is a preliminary description of the principal terms of the
senior credit facilities and is subject to, and qualified in its entirety by
reference to, the definitive documentation. Our senior subordinated notes
offering is conditioned upon the completion of this offering.

SENIOR CREDIT FACILITIES

We have entered into a commitment letter for the arrangement of financing
in an amount of up to $200 million with Lehman Commercial Paper Inc., as
administrative agent and Lehman Brothers Inc., as sole lead arranger and book
running manager. This financing is expected to consist of senior credit
facilities including: (1) a $50.0 million six-year revolving credit facility,
maturing in 2005 and (2) a $150.0 million six-year delayed draw (15-months to
draw) senior term loan facility, maturing in 2005. The senior credit facilities
are conditioned upon, among other things, (1) the execution of definitive
documentation on or before November 12, 1999 in form and substance satisfactory
to the senior lenders, (2) the completion of this offering and the senior
subordinated notes offering and (3) the redemption of our preferred stock. The
senior credit facilities will be available to finance working capital, issue
letters of credit, make permitted acquisitions and for other general corporate
purposes. The senior credit facilities will contain customary covenants which,
among other things will require us to maintain specified financial ratios such
as debt to EBITDA, senior debt to EBITDA, minimum interest coverage, minimum
fixed interest coverage and limits on capital expenditures. Subject to certain
exceptions, we will be required to repay some or all of the amount outstanding
under the senior credit facilities upon our issuance of debt or equity, asset
sales and certain excess cash flow. The senior credit facilities will be (1)
guaranteed by our subsidiaries (other than our foreign subsidiaries created or
acquired after the date of the indenture governing the senior subordinated
notes); (2) secured by all of our assets and all material assets of each
guarantor (except to the extent prohibited by law, broadcast licenses); (3)
secured by the stock of our domestic subsidiaries, including the stock of our
broadcasting license subsidiaries; and (4) secured by the stock of our domestic
subsidiaries, including the stock of our broadcasting license subsidiaries. In
connection with the senior credit facilities, we intend to transfer our FCC
broadcasting licenses to single-purpose subsidiaries which will be wholly-owned
by our direct subsidiaries. The stock of these single-purpose subsidiaries will,
to the extent permitted under applicable law, and in accordance with items (3)
and (4) of the preceding sentence, secure our obligations under the senior
credit facilities, but not under the notes.

__% SENIOR SUBORDINATED NOTES DUE 2009

The following summary of our % senior subordinated notes due 2009 does
not purport to be complete and is subject to the terms of the indenture
governing the senior subordinated notes.

The senior subordinated notes offering is conditioned upon the completion
of this offering. See "Summary -- Concurrent Senior Subordinated Notes Offering
and Financing Plan." The senior subordinated notes will be governed by an
indenture to be entered into by us, the guarantors named in the indenture, which
are certain of our subsidiaries, and The Bank of New York as trustee.

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The senior subordinated notes will bear cash interest at a rate of % per
annum on their principal amount of maturity. The senior subordinated notes will
be general unsecured obligations, ranking pari passu in right of payment to all
of our subordinated debt, but subordinated in right of payment to all of our
existing and future senior debt, including the senior credit facilities. The
senior subordinated notes will be unconditionally guaranteed, on a senior basis,
as to the payment of principal, premium, if any, and interest, jointly and
severally, by certain of our subsidiaries.

The senior subordinated notes are redeemable as follows: (1) before
2002, we may, subject to certain conditions, on any one or more
occasions, redeem up to 35% of the aggregate principal amount of the senior
subordinated notes at a redemption price of % of the principal amount of the
senior subordinated notes, plus accrued and unpaid interest, if any, to the
redemption date, with the net cash proceeds of an offering of our common equity,
and (2) after , 2004, we may redeem all or a part of the senior
subordinated notes at the redemption prices specified in the indenture,
expressed as percentages of principal amount plus accrued and unpaid interest,
if any, on the senior subordinated notes to the applicable redemption date, if
redeemed during the twelve-month period.

In the event of a change of control, as defined in the indenture, we were
required to make an offer to purchase all of the outstanding senior subordinated
notes at a purchase price equal to 101% of the principal amount of the senior
subordinated notes, plus accrued and unpaid interest.

The indenture governing the senior subordinated notes restricts, among
other things, our incurrence of additional indebtedness, the payment of
dividends and distributions, the creation of liens, asset sales, sale and
leaseback transactions, transactions with affiliates, sales of capital stock of
our subsidiaries and mergers and consolidations.

12 1/2% NOTES

The following summary of our 12 1/2% notes does not purport to be complete
and is subject to the terms of the indenture governing the 12 1/2% notes. On
September 30, 1999, we commenced (i) a tender offer to repurchase all of our
12 1/2% notes and (ii) a consent solicitation to approve the amendment of the
indenture governing the 12 1/2% notes so as to amend most of the financial
covenants contained in that indenture. We cannot assure you that any or all of
the 12 1/2% notes will be tendered and the requisite consents will be achieved.

In June 1994, we issued approximately $107.1 million of 12 1/2% notes due
2002 ($93.9 million of which are outstanding as of June 27, 1999), under the
Indenture dated as of June 29, 1994 among SBS, the guarantors named in the
indenture, which were the subsidiaries of SBS, and The Bank of New York, as
successor to IBJ Whitehall Bank & Trust Company (formerly known as IBJ Schroder
Bank and Trust Company), as trustee. The 12 1/2% notes bear cash interest at a
rate of 12 1/2% per annum on their principal amount until maturity. The 12 1/2%
notes are senior unsecured obligations of SBS. The 12 1/2% notes rank senior to
all future subordinated indebtedness of SBS. The 12 1/2% notes are
unconditionally guaranteed, on a senior basis, as to the payment of principal,
premium, if any, and interest, jointly and severally, by all of the active
direct and indirect subsidiaries of SBS. The 12 1/2% notes are not redeemable.
There are no mandatory redemption requirements with respect to the 12 1/2%
notes.

In the event of a change of control of SBS, as defined in the indenture
governing the 12 1/2% notes, we are required to make an offer to purchase all of
the outstanding 12 1/2% notes at a purchase price equal to 101% of the principal
amount of the 12 1/2% notes, plus accrued and unpaid interest. The 12 1/2% notes
indenture restricts, among other things, the incurrence of

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additional indebtedness, the payment of dividends and distributions, the
creation of liens, the issuance of stock of subsidiaries, transactions with
affiliates, the making of certain investments, asset sales, merger or
consolidation of SBS and its subsidiaries or the transfer of their assets,
subject to certain exceptions.

11% NOTES

The following summary of the 11% notes does not purport to be complete and
is subject to the terms of the indenture governing the 11% notes. On September
30, 1999, we commenced (i) a tender offer to repurchase all of our 11% notes and
(ii) a consent solicitation to approve the amendment of the indenture governing
the 11% notes so as to amend most of the financial covenants contained in that
indenture. We cannot assure you that any or all of the 11% notes will be
tendered and the requisite consents will be achieved.

In March 1997, we issued $75.0 million of 11% notes due 2004 under the
Indenture dated as of March 15, 1997 among SBS, the guarantors named in the
indenture, which were the subsidiaries of SBS, and The Bank of New York, as
successor to IBJ Whitehall Bank & Trust Company (formerly known as IBJ Schroder
Bank and Trust Company), as trustee. The 11% notes bear cash interest at a rate
of 11% per annum on their principal amount until maturity. The 11% notes are
senior unsecured obligations of SBS. The 11% notes rank senior to all future
subordinated indebtedness of SBS. The 11% notes are unconditionally guaranteed,
on a senior basis, as to the payment of principal, premium, if any, and
interest, jointly and severally, by all of the active direct and indirect
subsidiaries of SBS. The 11% notes are redeemable at our option as follows: (1)
any time on or after March 15, 2001 we may redeem the 11% notes at 105.50% of
their principal amount; (2) from and after March 15, 2002 we may redeem the 11%
notes at 102.75% of their principal amount; and (3) from and after March 15,
2003 we may redeem the 11% notes at 100% of their principal amount plus, in each
case, accrued and unpaid interest. There are no mandatory redemption
requirements with respect to the 11% notes.

In the event of a change of control, as defined in the indenture governing
the 11% notes, we are required to make an offer to purchase all of the
outstanding 11% notes at a purchase price equal to 101% of the principal amount
of the 11% notes, plus accrued and unpaid interest. The 11% notes indenture
restricts, among other things, the incurrence of additional indebtedness, the
payment of dividends and distributions, the creation of liens, the issuance of
stock of subsidiaries, transactions with affiliates, the making of certain
investments, asset sales, merger or consolidation of SBS and its subsidiaries or
the transfer of their assets, subject to certain exceptions.

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SHARES ELIGIBLE FOR FUTURE SALE

Sales of substantial amounts of our Class A Common Stock in the public
market following the offering could adversely affect the market price of the
Class A Common Stock and could impair our ability to raise capital.

Upon completion of this offering, we will have outstanding 22,355,200
shares of Class A Common Stock (assuming no exercise of the Underwriters'
over-allotment option) and 34,593,350 shares of Class B Common Stock. The
22,355,200 shares of Class A Common Stock sold in this offering will be freely
tradable in the public market, unless the shares are held by "affiliates" as
that term is defined in Rule 144 under the Securities Act. For purposes of Rule
144, an "affiliate" of an issuer is a person that, directly or indirectly,
through one or more intermediaries, controls, or is controlled by or is under
common control with, the issuer. The 34,593,350 shares of Class B Common Stock
are "restricted securities" as defined under Rule 144. Restricted securities may
be sold in the public market only if registered or upon the expiration of
certain holding periods under Rule 144, subject to the volume, manner of sale
and other limitations of Rule 144.

In general, under Rule 144, as currently in effect, a person (or persons
whose shares are required to be aggregated), including an affiliate, who has
beneficially owned shares for at least one year is entitled to sell, within any
three-month period beginning 90 days after the date of the completion of the
offering, a number of shares that does not exceed the greater of (a) 1% of the
then outstanding shares of common stock (approximately 569,486 shares
immediately after the offering) or (b) the average weekly trading volume in the
common stock during the four calendar weeks preceding the date on which notice
of the sale is filed. In addition, a person who is not an affiliate at any time
during the 90 days preceding a sale and who has beneficially owned the shares
proposed to be sold for at least two years is entitled to sell all those shares
under Rule 144(k) without regard to the volume limitations, manner of sale
provisions or public information requirements. To the extent that shares are
acquired from one of our affiliates in a privately negotiated transaction, the
holding period under Rule 144 of the person acquiring the shares being sold by
our affiliate commences on the date of transfer from the affiliate.

Messrs. Pablo Raul Alarcon, Sr., Raul Alarcon, Jr., Jose Grimalt and Joseph
A. Garcia who hold an aggregate of 27,758,400 shares of Class B Common Stock
have agreed not to offer to sell, sell or otherwise dispose of, directly or
indirectly, any shares of common stock during the 180-day period following the
date of the prospectus without the prior written consent of Lehman Brothers Inc.
As a result of these restrictions, notwithstanding possible earlier eligibility
for sale under the provisions of Rules 144 of 144(k), shares subject to these
"lock-up" agreements will not be salable until the agreement expires.

Following the offering, holders of 6,884,950 shares of our outstanding
Class B Common Stock will have demand and piggyback registration rights with
respect to their shares of Class B Common Stock to require us to register their
shares of Class B Common Stock under the Securities Act, and rights to
participate in any future registration of securities by us. If those holders, by
exercising their registration rights, cause a large number of shares of Class B
Common Stock to be registered and sold in the public market, these shares could
have an adverse effect on the market price for the Class A Common Stock. See
"Description of Capital Stock -- Registration Rights."

We intend to file a registration statement covering the sale of 3,550,000
shares of Class A Common Stock reserved for issuance under the 1999 Stock Plan,
the Non-Employee Director Stock Option Plan, and the grant of options to Arnold
Scheiffer. See "Management -- Stock
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Plans." Such registration statement is expected to be filed as soon as
practicable after the date of this prospectus and will automatically become
effective upon the filing. Accordingly, shares registered under such
registration statement will be available for sale in the public market unless
such shares are subject to vesting restrictions and subject to limitations on
resale by "affiliates" pursuant to Rule 144. It is anticipated that
approximately 430,000 shares of Class A Common Stock issuable upon exercise of
currently outstanding options will become eligible for sale in the public market
without restrictions 180 days after the date of this prospectus upon expiration
of the lock-up agreements, pursuant to registration under such registration
statement and subject to volume limitations and other restrictions under Rule
144.

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CERTAIN FEDERAL INCOME TAX CONSIDERATIONS

GENERAL

The following discussion summarizes the material U.S. federal income tax
considerations generally applicable to purchasers of Class A Common Stock. The
U.S. federal income tax considerations described below are based upon (1)
currently existing provisions of the Internal Revenue Code of 1986 (the "Code"),
(2) applicable permanent, temporary and proposed Treasury regulations, (3)
judicial authority, and (4) current administrative rulings and pronouncements of
the Internal Revenue Service ("IRS"). There can be no assurance that the IRS
will not take a contrary view to, and no ruling from the IRS has been, or will
be, sought on the issues discussed herein. Legislative, judicial or
administrative changes or interpretations may be adopted that could alter or
modify the statements and conclusions described in this section of this
prospectus. Any of those changes or interpretations may or may not be
retroactive and could affect the tax consequences discussed below.

This summary is not a complete analysis or description of all potential
U.S. federal income tax considerations that may be relevant to, or of the actual
tax effect that any of the matters described in this section will have on
particular purchasers. This summary does not address foreign, state, local or
other tax consequences and it does not address the concerns of special classes
of taxpayers (such as S corporations, mutual funds, insurance companies,
financial institutions, small business investment companies, regulated
investment companies, broker-dealers and tax-exempt organizations) who are
subject to special treatment under the U.S. federal income tax laws or persons
whose functional currency (within the meaning of Section 985 of the Code) is not
the U.S. dollar. Furthermore, estate and gift tax consequences are not discussed
in this section of the prospectus. No opinion of legal counsel will be requested
with respect to any of the matters discussed in this section of the prospectus.
Our discussion assumes that Class A Common Stock will be held as a capital asset
within the meaning of section 1221 of the Code.

As used in this summary, the term "U.S. Holder" means (1) a citizen or
resident of the United States for U.S. federal income tax purposes, (2) a
corporation or partnership (or other entity treated as a corporation or
partnership for U.S. federal income tax purposes) created or organized in or
under the laws of the United States or any of its political subdivisions
(including the District of Columbia), (3) an estate, the income of which is
includible in gross income for U.S. federal income tax purposes regardless of
its source, or (4) a trust if (a) a U.S. court can exercise primary supervision
over the administration of such trust and (b) one or more U.S. fiduciaries has
the authority to control all of the substantial decisions of such trust (a "U.S.
Holder"). As used in this summary, the term "Non-U.S. Holder" means a beneficial
holder of common stock that is not a U.S. Holder.

Because individual circumstances may differ, each prospective purchaser of
the Class A Common Stock is strongly urged to consult his or her own tax advisor
with respect to his or her particular tax situation and as to any U.S. federal,
foreign, state, local or other tax considerations (including any possible
changes in tax law) affecting the purchase, holding and disposition of the Class
A Common Stock.

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U.S. HOLDERS OF CLASS A COMMON STOCK

This section describes certain U.S. federal income tax considerations
applicable to U.S. Holders. Non-U.S. Holders should see the discussion below
under the heading "Non-U.S. Holders of Common Stock" for a discussion of certain
tax considerations applicable to them.

Dividends. Dividends paid on the Class A Common Stock will be taxable to
you as ordinary income, to the extent paid out of our current or accumulated
earnings and profits. Dividend distributions in excess of such earnings and
profits will be treated first as a nontaxable return of capital to the extent of
your basis in the Class A Common Stock and then as gain from the sale or
exchange of Class A Common Stock. Subject to restrictions, if you are a
corporate holder, dividends received by you generally will be eligible for a
deduction equal to 70% of the dividends received. In addition, special rules may
apply upon the receipt of any "extraordinary dividends" with respect to the
Class A Common Stock.

Sale or Exchange of Class A Common Stock. If you sell or otherwise dispose
of your common stock in a taxable transaction, you will recognize capital gain
or loss equal to the difference between the cash and the fair market value of
any property received in such sale or exchange and your tax basis in the Class A
Common Stock. Your gain or loss will be long term gain or loss if your stock was
has been held more than one year.

Redemption of Class A Common Stock. A redemption by us of some or all of
your Class A Common Stock will be treated as a dividend taxable to you as
ordinary income to the extent of our current and accumulated earnings and
profits, unless the redemption meets specified requirements under section 302(b)
of the Code. If the requirements under section 302(b) of the Code are satisfied,
the redemption will be treated as an exchange giving rise to capital gain or
loss as described above, except to the extent of declared but unpaid dividends.
You are advised to consult your tax advisors as to the application of section
302(b) of the Code to your particular circumstances.

Backup Withholding. Under section 3406 of the Code and applicable Treasury
regulations, a noncorporate holder of the Class A Common Stock may be subject to
backup withholding at the rate of 31% with respect to "reportable payments,"
which include dividends paid on, or, in certain cases, the proceeds of a sale,
exchange or redemption of, the Class A Common Stock. The payor will be required
to deduct and withhold the prescribed amounts if (1) the payee fails to furnish
a taxpayer identification number to the payor in the manner required, (2) the
IRS notifies the payor that the taxpayer identification number furnished by the
payee is incorrect, (3) there has been a "notified payee underreporting"
described in section 3406(c) of the Code, or (4) there has been a failure of the
payee to certify under penalty of perjury that the payee is not subject to
withholding under section 3406(a)(1)(C) of the Code. Amounts paid as backup
withholding do not constitute an additional tax and will be refunded (or
credited against the holder's U.S. federal income tax liability, if any), so
long as the required information is provided to the IRS. We will report to you
and to the IRS the amount of any "reportable payments" for each calendar year
and the amount of tax withheld, if any, with respect to payment on the Class A
Common Stock.

NON-U.S. HOLDERS OF CLASS A COMMON STOCK

The following information describes certain U.S. federal income tax
considerations applicable to "Non-U.S. Holders." This section does not cover the
U.S. federal tax rules that

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apply to Non-U.S. Holders whose income or gain from the Class A Common Stock is
effectively connected with the conduct of a U.S. trade or business, as defined
by applicable U.S. tax rules.

Sale or other Disposition of the Class A Common Stock. You will generally
not be subject to U.S. federal income tax or withholding tax on gain recognized
on a sale, exchange, redemption, retirement, or other disposition of the Class A
Common Stock. You may, however, be subject to tax on such gain if: (1) you are a
nonresident alien individual who was present in the United States for 183 days
or more in the taxable year of the disposition; (2) you are an individual who is
a former citizen or resident of the United States subject to certain U.S. tax
rules relevant to that status, (3) the common stock constitutes U.S. real
property interests by reason of our status as a "U.S. real property holding
company" for U.S. federal income tax purposes at any time within the shorter of
the five-year period preceding such disposition or your holding period for the
common stock. We do not believe that we are or we will become a "U.S. real
property holding company" for U.S. federal income tax purposes.

Dividends on Class A Common Stock. Dividends paid that are not effectively
connected with the conduct by you of a trade or business within the United
States will be subject to U.S. federal income tax, which generally will be
withheld at a rate of 30% of the gross amount of the dividends, unless the rate
is reduced by an applicable income tax treaty. Under the currently applicable
Treasury regulations, dividends paid to an address in a country other than the
United States are presumed to be paid to a resident of such country for purposes
of the withholding discussed above (unless the payor has knowledge to the
contrary) and for purposes of determining the applicability of a tax treaty
rate. However, under new Treasury regulations, effective for payments made after
December 31, 2000, if you wish to claim the benefit of an applicable treaty
rate, you will be required to satisfy certain certification and other
requirements.

Backup Withholding and Information Reporting. If you receive payments in
respect of common stock directly from us or through the U.S. office of a
custodian, nominee, agent or broker, there is a possibility that you will be
subject to both backup withholding at a rate of 31% and information reporting.
Non-U.S. Holders are generally exempt from information reporting and backup
withholding, but may be required to provide a properly completed Form W-8 or
otherwise comply with applicable certification and identification procedures in
order to prove their exemption. Any amounts withheld under the backup
withholding rules may be refunded or credited against the Non-U.S. Holder's U.S.
federal income tax liability, if any, provided that the required information is
furnished to the IRS.

New Treasury Regulations. New Treasury regulations relating to withholding
tax or income paid to non-U.S. persons will generally be effective for payments
made after December 31, 2000. The new Treasury regulations modify the way in
which you establish your status as a non-U.S. "beneficial owner" eligible for
withholding exemptions including a reduced treaty rate or an exemption from
backup withholding. You may be required to provide certifications that comply
with the provisions of the new Treasury regulations, where required, not later
than December 31, 2000, if you remain as a holder of the common stock on such
date. If you are a Non-U.S. Holder claiming benefit under an income tax treaty
you should be aware that you may be required to obtain a taxpayer identification
number and to certify your eligibility under the applicable treaty's limitations
on benefits article in order to comply with the new Treasury regulations'
certification requirements. The new Treasury regulations are complex and this
summary does not completely describe them. Please consult your tax advisor to
determine how the new Treasury regulations will affect your particular
circumstances.

87
<PAGE> 94

This summary is included in this section of the prospectus for general
information only and does not discuss all aspects of U.S. federal income
taxation that may be relevant to a particular holder of common stock in light of
his or her particular circumstances and income tax situation. Prospective
investors are urged to consult their own tax advisors as to any tax consequences
to them from the purchase, ownership, and disposition of Class A Common Stock,
including the application and effect of state, local, foreign, and other tax
laws.

88
<PAGE> 95

UNDERWRITING

Subject to the terms and conditions stated in the underwriting agreement
dated the date hereof, the underwriters of the offering named below (the
"Underwriters"), for whom Lehman Brothers Inc., Merrill Lynch, Pierce, Fenner &
Smith Incorporated and CIBC World Markets Corp. are acting as representatives
(the "Representatives"), have severally agreed to purchase, and we and the
selling stockholders have agreed to sell to the Underwriters, the number of
shares of Class A Common Stock set forth opposite the name of each underwriter.

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
- ------------ ----------
<S> <C>
Lehman Brothers Inc.......................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated................................
CIBC World Markets Corp. .................................
----------
Total..................................................... 22,355,200
==========
</TABLE>

The underwriting agreement provides that the obligations of the several
underwriters to purchase the shares included in the offering are subject to
approval of legal matters by counsel as well as to other conditions. The
Underwriters are obligated to purchase all the shares (other than those covered
by the over-allotment option described below) if they purchase any of the
shares.

The Underwriters propose to offer some of the shares directly to the public
at the public offering price set forth on the cover page of this prospectus and
some of the shares to certain dealers at the public offering price less a
concession not in excess of $ per share. The Underwriters may allow, and
such dealers may reallow, a concession not in excess of $ per share on
sales to certain other dealers. If all of the shares are not sold at the initial
offering price, the Representatives may change the public offering price and the
other selling terms.

The following table summarizes the compensation and estimated expenses we
and the selling stockholders will pay.

<TABLE>
<CAPTION>
TOTAL
--------------------------------
WITHOUT WITH
PER SHARE OVER-ALLOTMENT OVER-ALLOTMENT
--------- -------------- --------------
<S> <C> <C> <C>
Underwriting discounts and commissions paid by us.....

Underwriting discounts and commissions paid by the
Selling Stockholders................................
</TABLE>

We estimate that the total expenses of the offering, excluding underwriting
discounts and commissions, will be approximately $1,000,000.

We have granted to the Underwriters an option, exercisable for 30 days from
the date of this prospectus, to purchase up to 3,353,280 additional shares of
our Class A Common Stock at the public offering price less the underwriting
discount. The Underwriters may exercise this option solely for the purpose of
covering over-allotments, if any, in connection with the offering. To the extent
this option is exercised, each Underwriter will be obligated, subject to various
conditions, to purchase a number of additional shares approximately
proportionate to its initial purchase commitment.

89
<PAGE> 96

We, Pablo Raul Alarcon, Sr., Raul Alarcon, Jr., Jose Grimalt, Joseph A.
Garcia and certain of our option holders have agreed not to do any of the
following, whether any transaction described in clause (1), (2) or (3) below is
to be settled by delivery of Class A Common Stock or other securities, in cash
or otherwise, in each case without the prior written consent of Lehman Brothers
Inc., on behalf of the Underwriters, for a period of 180 days after the date of
this prospectus:

(1) offer, sell, pledge, or otherwise dispose of, or enter into any
transactions or device which is designed or could be expected to, result in
the disposition by any person at any time in the future of, any shares of
Class A Common Stock or securities convertible into or exchangeable for
Class A Common Stock or substantially similar securities, other than any of
the following:

- the Class A Common Stock sold under this prospectus; and

- shares of Class A Common Stock we issue pursuant to employee benefit
plans, qualified stock option plans or other employee compensation
plans existing on the date of this prospectus or pursuant to currently
outstanding options, warrants or rights;

(2) sell or grant options, rights or warrants with respect to any
shares of our Class A Common Stock or securities convertible into or
exchangeable for our Class A Common Stock or substantially similar
securities, other than the grant of options pursuant to option plans
existing on the date of this prospectus; and

(3) enter into any swap or other derivatives transaction that
transfers to another, in whole or in part, any of the economic benefits or
risks or ownership of shares of Class A Common Stock or securities
convertible into or exchangeable for our Class A Common Stock.

Prior to the offering, there has been no public market for the shares of
Class A Common Stock. The initial public offering price will be negotiated
between the Representatives and us. In determining the initial public offering
price of the Class A Common Stock, the Representatives will consider, among
other things and in addition to prevailing market conditions, our historical
performance and capital structure, estimates of our business potential and
earnings prospects, an overall assessment of our management and the
consideration of the above factors in relation to market valuation of companies
in related businesses.

Our shares of Class A Common Stock have been approved for quotation on The
Nasdaq National Market under the symbol "SBSA," subject to official notice of
issuance.

Any offer of the shares of Class A Common Stock in Canada will be made only
pursuant to an exemption from the prospectus filing requirement and an exemption
from the dealer registration requirement (where such an exemption is not
available, offers shall be made only by a registered dealer) in the relevant
Canadian jurisdiction where any such offer is made.

In connection with the offering, the Representatives may purchase and sell
shares of our Class A Common Stock in the open market. These transactions may
include over-allotment, syndicate covering transactions and stabilizing
transactions. Over-allotment involves syndicate sales of Class A Common Stock in
excess of the number of shares to be purchased by the Underwriters in the
offering, which creates a syndicate short position. Syndicate covering
transactions involve purchases of our Class A Common Stock in the open market
after the distribution has been completed in order to cover syndicate short
positions. Stabilizing transactions consist of certain bids or purchases of our
Class A Common Stock made for the

90
<PAGE> 97

purpose of preventing or retarding a decline in the market price of our Class A
Common Stock while the offering is in progress.

The Underwriters have informed us that they do not intend to confirm sales
to discretionary accounts that exceed 5% of the total number of shares of common
stock offered by them.

The Representatives also may impose a penalty bid. Penalty bids permit the
Representatives to reclaim a selling concession from an Underwriter when the
Representatives, in covering syndicate short positions or making stabilizing
purchases, repurchase shares originally sold by that Underwriter.

Any of these activities may cause the price of our Class A Common Stock to
be higher than the price that otherwise would exist in the open market in the
absence of such transactions. These transactions may be affected in the
over-the-counter market or otherwise and, if commenced, may be discontinued at
any time.

Purchasers of the shares of Class A Common Stock offered in this prospectus
may be required to pay stamp taxes and other charges in accordance with the laws
and practices of the country of purchase, in addition to the offering price set
forth on the cover of this prospectus.

At our request, the Underwriters have reserved for sale, at the initial
public offering price, up to 1,117,760 shares of Class A Common Stock for
employees, directors and certain other persons associated with us who have
expressed an interest in purchasing Class A Common Stock in this offering. The
number of shares available for sale to the general public in this offering will
be reduced to the extent such persons purchase such reserved shares. Any
reserved shares not so purchased will be offered by the Underwriters to the
general public on the same terms as the other shares. We have agreed to
indemnify the Underwriters against certain liabilities and expenses, including
liabilities under the Securities Act, in connection with such sales.

We and the selling stockholders have agreed to indemnify the Underwriters
against liabilities, including liabilities under the Securities Act of 1933 or
to contribute to payments the Underwriters may be required to make in respect of
any of those liabilities.

Upon completion of this offering, we intend to appoint Mr. Roman Martinez
IV, a managing director of Lehman Brothers Inc., to our board of directors. As
compensation for his services, Mr. Martinez will receive options to purchase
shares of Class A Common Stock pursuant to our Non-Employee Director Stock
Option Plan. See "Executive Compensation -- Stock Plans -- Non-Employee Director
Stock Option Plan." Lehman Brothers Inc. has been engaged by us to act as lead
manager of our concurrent offering of senior subordinated notes due 2009, to act
as dealer-manager in connection with the tender offers and consent solicitations
for our 11% and 12 1/2% notes and to provide other financial advisory services.
In addition, Lehman Brothers Inc. will act as sole lead arranger and book
running manager and an affiliate of Lehman Brothers Inc., Lehman Commercial
Paper Inc., will act as administrative agent of the senior credit facilities.
Lehman Brothers Inc. and Lehman Commercial Paper Inc. will receive customary
fees for their services in connection with the senior subordinated notes
offering and the senior credit facilities.

CIBC World Markets Corp. will act as an underwriter in connection with our
senior subordinated notes offering for which it will receive customary fees.
Each of Lehman Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated
and CIBC World Markets Corp. has from time to time provided, and in the future
may provide, certain investment banking services to us and our affiliates, for
which they have received, and in the future would receive, customary fees.

91
<PAGE> 98

LEGAL MATTERS

The validity of the Class A Common Stock being offered by this prospectus
and legal matters regarding FCC issues will be passed upon for us by Kaye,
Scholer, Fierman, Hays & Handler, LLP, New York, New York. Rogers & Wells LLP,
New York, New York will pass upon the validity of the Class A Common Stock being
offered by this prospectus for the underwriters. Jason L. Shrinsky, one of our
nominee-directors, is a partner of Kaye, Scholer, Fierman, Hays & Handler, LLP,
which firm has regularly represented us as our legal counsel and will continue
to do so. Additionally, Mr. Shrinsky will receive options to purchase shares of
our Class A common stock pursuant to our Non-Employee Director Stock Option
Plan. See "Executive Compensation -- Stock Plans."

EXPERTS

The consolidated financial statements and schedule of SBS and its
subsidiaries as of September 28, 1997, September 27, 1998 and June 27, 1999, and
for each of the fiscal years in the three-year period ended September 27, 1998
and for the nine months ended June 27, 1999, have been included herein and in
the registration statement in reliance upon the report of KPMG LLP, independent
certified public accountants, appearing elsewhere herein and upon the authority
of said firm as experts in accounting and auditing.

92
<PAGE> 99

WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and special reports, proxy statements and other
information with the SEC under the Exchange Act. The file number for our SEC
filings is 33-82114. You may read and copy any document we file at the following
SEC public reference rooms:

<TABLE>
<S> <C> <C>
Judiciary Plaza 500 West Madison Street 7 World Trade Center
450 Fifth Street, N.W. 14th Floor Suite 1300
Room 1024 Chicago, Illinois 60661 New York, New York 10048
Washington, D.C. 20549
</TABLE>

We file information electronically with the SEC. Our SEC filings also are
available from the SEC's Internet site at http://www.sec.gov, which contains
reports, proxy and information statements and other information regarding
issuers that file electronically. Our Class A Common Stock will be listed on The
Nasdaq National Market.

This prospectus is part of a Form S-1 registration statement we are filing
with the SEC. The SEC allows us to incorporate by reference any exhibits
referred to in this prospectus.

We will provide a copy of the exhibits we incorporate by reference, at no
cost, to any person who receives this prospectus, including any beneficial owner
of our common stock. To request a copy of any or all of these exhibits, you
should write or telephone us at the following address and telephone number:

Spanish Broadcasting System, Inc.
3191 Coral Way
Miami, FL 33145
Telephone: (305) 441-6901
Attention: Joseph A. Garcia

93
<PAGE> 100

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES:
Report of KPMG LLP, independent auditors.................... F-2
Consolidated Balance Sheets as of September 28, 1997,
September 27, 1998 and June 27, 1999...................... F-3
Consolidated Statements of Operations for each of the fiscal
years in the three-year period ended September 27, 1998
and the nine months ended June 28, 1998 (unaudited) and
June 27, 1999............................................. F-5
Consolidated Statements of Changes in Stockholders'
Deficiency for each of the fiscal years in the three-year
period ended September 27, 1998 and the nine months ended
June 27, 1999............................................. F-6
Consolidated Statements of Cash Flows for each of the fiscal
years in the three-year period ended September 27, 1998
and the nine months ended June 28, 1998 (unaudited) and
June 27, 1999............................................. F-7
Notes to Consolidated Financial Statements.................. F-9
Financial Statement Schedule -- Valuation and Qualifying
Accounts.................................................. F-31
</TABLE>

F-1
<PAGE> 101

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders
Spanish Broadcasting System, Inc.:

We have audited the consolidated financial statements of Spanish
Broadcasting System, Inc. and subsidiaries as listed in the accompanying index.
In connection with our audits of the consolidated financial statements, we have
also audited the financial statement schedule as listed in the accompanying
index. These consolidated financial statements and financial statement schedule
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements and financial
statement schedule based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Spanish
Broadcasting System, Inc. and subsidiaries as of September 28, 1997, September
27, 1998 and June 27, 1999 and the results of their operations and their cash
flows for each of the fiscal years in the three-year period ended September 27,
1998 and for the nine months ended June 27, 1999, in conformity with generally
accepted accounting principles. Also, in our opinion, the related financial
statement schedule, when considered in relation to the basic consolidated
financial statements taken as a whole, presents fairly, in all material
respects, the information set forth therein.

/s/ KPMG LLP
--------------------------------------

Miami, Florida
September 3, 1999, except as to
note 11 which is as of September 29, 1999,
note 15a which is as of September 22, 1999,
note 15b which is as of September 30, 1999
and note 15c which is as of September 24, 1999.

F-2
<PAGE> 102

SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
SEPTEMBER 28, 1997, SEPTEMBER 27, 1998 AND JUNE 27, 1999

<TABLE>
<CAPTION>
SEPTEMBER 28, SEPTEMBER 27, JUNE 27,
1997 1998 1999
------------- ------------- ------------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.............................. $ 12,287,764 $ 37,642,227 $ 20,895,220
Receivables:
Trade............................................... 17,226,345 20,777,151 24,462,861
Barter.............................................. 3,290,728 3,582,751 2,058,957
------------ ------------ ------------
20,517,073 24,359,902 26,521,818
Less allowance for doubtful accounts................... 5,405,095 7,770,060 6,030,687
------------ ------------ ------------
Net receivables................................ 15,111,978 16,589,842 20,491,131
Other current assets................................... 1,409,906 1,822,584 2,675,530
------------ ------------ ------------
Total current assets........................... 28,809,648 56,054,653 44,061,881
Property and equipment, net.............................. 18,409,415 14,942,933 14,838,400
Intangible assets, net of accumulated amortization of
$22,048,929 in 1997, $27,563,051 in 1998 and
$33,347,195 in 1999.................................... 273,631,766 272,261,440 293,656,711
Deferred financing costs, net of accumulated amortization
of $3,038,202 in 1997, $4,257,074 in 1998 and
$5,377,349 in 1999..................................... 9,262,314 7,275,980 6,064,968
Due from related party................................... 289,869 289,869 289,869
Deferred income taxes.................................... 3,674,287 -- --
Deferred offering costs.................................. -- -- 403,334
Other assets............................................. 289,784 209,301 185,666
------------ ------------ ------------
$334,367,083 $351,034,176 $359,500,829
============ ============ ============
</TABLE>

F-3
<PAGE> 103

<TABLE>
<CAPTION>
SEPTEMBER 28, SEPTEMBER 27, JUNE 27,
1997 1998 1999
------------- ------------- ------------
<S> <C> <C> <C>
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
Current portion of Senior unsecured notes.............. $ 15,000,000 $ -- $ --
Current portion of other long-term debt................ 44,644 47,496 1,049,791
Accounts payable....................................... 1,367,572 2,612,952 1,195,949
Accrued expenses....................................... 3,722,777 5,838,808 7,339,362
Accrued interest....................................... 4,536,627 3,941,088 3,069,431
Deferred commitment fee................................ 1,551,255 2,141,456 2,533,310
Dividends payable...................................... 960,761 1,124,360 9,640,271
------------ ------------ ------------
Total current liabilities...................... 27,183,636 15,706,160 24,828,114
12 1/2% Senior unsecured notes due 2002, net of
unamortized discount of $3,238,037 in 1997, $2,224,535
in 1998 and $1,779,173 in 1999......................... 88,820,963 91,668,465 92,113,827
11% Senior unsecured notes due 2004...................... 75,000,000 75,000,000 75,000,000
Other long-term debt, less current portion............... 4,147,676 4,410,505 4,603,251
Deferred income taxes.................................... -- 9,074,596 12,002,078
Redeemable Preferred Stock:
14 1/4% Series A Senior Exchangeable Preferred Stock,
$.01 par value. Authorized 1,000,000 shares, issued
and outstanding 186,706 shares (liquidation value
$186,706,000) in 1997, 214,260 shares (liquidation
value $214,260,000) in 1998 and 229,477 shares
(liquidation value $229,477,000) in 1999............ 171,261,919 201,367,927 218,801,691
Stockholders' deficiency
Class A common stock, $.0001 par value. Authorized
100,000,000 shares; none issued and outstanding..... -- -- --
Class B common stock, $.0001 par value. Authorized
50,000,000 shares; issued and outstanding 30,333,400
shares in 1997 and 1998 and 39,448,550 shares in
1999................................................ 3,033 3,033 3,945
Additional paid-in capital............................. 6,593,506 6,867,334 6,869,241
Accumulated deficit.................................... (35,119,184) (50,604,436) (72,261,910)
------------ ------------ ------------
(28,522,645) (43,734,069) (65,388,724)
Less loans receivable from stockholders.................. (3,524,466) (2,459,408) (2,459,408)
------------ ------------ ------------
Total stockholders' deficiency................. (32,047,111) (46,193,477) (67,848,132)
Commitments and contingencies (notes 10 and 12)
------------ ------------ ------------
$334,367,083 $351,034,176 $359,500,829
============ ============ ============
</TABLE>

See accompanying notes to consolidated financial statements.
F-4
<PAGE> 104

SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
FISCAL YEARS ENDED SEPTEMBER 29, 1996, SEPTEMBER 28, 1997,
SEPTEMBER 27, 1998 AND NINE MONTHS ENDED JUNE 28, 1998 (UNAUDITED) AND JUNE 27,
1999

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED --------------------------
------------------------------------------ JUNE 28, JUNE 27,
1996 1997 1998 1998 1999
------------ ------------ ------------ ----------- ------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Gross revenues................. $ 55,337,720 $ 67,981,407 $ 86,766,158 $62,098,840 $ 80,437,296
Less agency commissions........ 6,702,302 7,971,827 10,623,062 7,508,229 10,082,341
------------ ------------ ------------ ----------- ------------
Net revenues.............. 48,635,418 60,009,580 76,143,096 54,590,611 70,354,955
------------ ------------ ------------ ----------- ------------
Operating expenses:
Engineering.................. 1,773,027 2,099,116 1,924,744 1,380,656 1,547,904
Programming.................. 5,864,066 7,081,521 8,462,258 5,996,108 7,435,754
Selling...................... 13,864,695 14,980,035 18,574,529 13,108,606 16,055,795
General and administrative... 6,374,622 6,879,443 10,558,965 7,811,811 6,742,324
Corporate expenses........... 3,747,714 5,595,403 6,892,705 5,122,297 7,658,456
Depreciation and
amortization.............. 4,555,978 7,618,921 8,876,876 6,866,961 7,222,573
------------ ------------ ------------ ----------- ------------
36,180,102 44,254,439 55,290,077 40,286,439 46,662,806
------------ ------------ ------------ ----------- ------------
Operating income.......... 12,455,316 15,755,141 20,853,019 14,304,172 23,692,149
Other income (expense):
Interest expense, net........ (16,533,278) (22,201,114) (20,860,210) (16,002,451) (15,735,550)
Other, net................... (1,574,320) (790,548) (213,239) -- (485,018)
Gain on sale of AM
stations.................. -- -- 36,241,947 36,246,947 --
------------ ------------ ------------ ----------- ------------
Income (loss) before
income taxes and
extraordinary item...... (5,652,282) (7,236,521) 36,021,517 34,548,668 7,471,581
Income tax expense (benefit)... (1,165,800) (2,714,411) 15,624,032 13,819,467 3,177,482
------------ ------------ ------------ ----------- ------------
Income (loss) before
extraordinary item........... (4,486,482) (4,522,110) 20,397,485 20,729,201 4,294,099
Extraordinary item-loss on
extinguishment of debt, net
of income taxes of $1,097,836
in 1997, $1,075,149 in
1998......................... -- (1,646,753) (1,612,723) (1,612,723) --
------------ ------------ ------------ ----------- ------------
Net income (loss)......... $ (4,486,482) $ (6,168,863) $ 18,784,762 $19,116,478 $ 4,294,099
============ ============ ============ =========== ============
Net loss applicable to common
stockholders [note 2(o)]..... $ (7,480,808) $(23,212,494) $(11,484,845) $(3,274,875) $(21,657,474)
============ ============ ============ =========== ============
Basic and Diluted Loss Per
Common Share:
Net loss per common share
before extraordinary
item...................... $ (0.25) $ (0.71) $ (0.33) $ (0.06) $ (0.68)
Net loss per common share for
extraordinary item........ $ -- $ (0.06) $ (0.05) $ (0.05) $ --
Net loss per common share.... $ (0.25) $ (0.77) $ (0.38) $ (0.11) $ (0.68)
Weighted average common
shares outstanding (basic
and diluted).............. 30,333,400 30,333,400 30,333,400 30,333,400 31,629,918
</TABLE>

See accompanying notes to consolidated financial statements.
F-5
<PAGE> 105

SPANISH BROADCASTING SYSTEM, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY
FISCAL YEARS ENDED SEPTEMBER 29, 1996, SEPTEMBER 28, 1997
AND SEPTEMBER 27, 1998 AND THE NINE MONTHS ENDED JUNE 27, 1999

<TABLE>
<CAPTION>
CLASS B
COMMON STOCK LESS: LOANS
--------------------- ADDITIONAL RECEIVABLE TOTAL
NO. OF PAR PAID-IN ACCUMULATED FROM STOCKHOLDERS'
SHARES VALUE CAPITAL DEFICIT STOCKHOLDERS DEFICIENCY
---------- -------- ------------ ------------ ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Balance at September 24, 1995............... 30,333,400 $ 3,033 $ 5,693,967 $(4,425,882) $(2,421,272) $ (1,150,154)
Increase in loans receivable from
stockholders.............................. -- -- -- -- (52,964) (52,964)
Costs associated with issuance of Redeemable
Series A Preferred Stock.................. -- -- (1,718,437) -- -- (1,718,437)
Issuance of warrants........................ -- -- 6,833,507 -- -- 6,833,507
Accretion of preferred stock................ -- -- -- (541,416) -- (541,416)
Preferred stock dividends................... -- -- -- (2,452,910) -- (2,452,910)
Net loss.................................... -- -- -- (4,486,482) -- (4,486,482)
---------- -------- ------------ ------------ ----------- ------------
Balance at September 29, 1996............... 30,333,400 3,033 10,809,037 (11,906,690) (2,474,236) (3,568,856)
Retirement of preferred stock and
warrants.................................. -- -- (11,887,981) -- -- (11,887,981)
Issuance of warrants........................ -- -- 16,625,000 -- -- 16,625,000
Accretion of preferred stock................ -- -- -- (1,659,695) -- (1,659,695)
Preferred stock dividends................... -- -- -- (15,383,936) -- (15,383,936)
Issuance costs for preferred stock.......... -- -- (8,952,550) -- -- (8,952,550)
Increase in loans receivable from
stockholders.............................. -- -- -- -- (1,050,230) (1,050,230)
Net loss.................................... -- -- -- (6,168,863) -- (6,168,863)
---------- -------- ------------ ------------ ----------- ------------
Balance at September 28, 1997............... 30,333,400 3,033 6,593,506 (35,119,184) (3,524,466) (32,047,111)
Preferred stock dividends................... -- -- -- (27,717,142) -- (27,717,142)
Accretion of preferred stock................ -- -- -- (2,552,465) -- (2,552,465)
Decrease in loans receivable from
stockholders.............................. -- -- -- -- 14,827 14,827
Cash dividends on common stock.............. -- -- -- (3,726,579) 1,050,231 (2,676,348)
Issuance of warrants as dividends........... -- -- 273,828 (273,828) -- --
Net income.................................. -- -- -- 18,784,762 -- 18,784,762
---------- -------- ------------ ------------ ----------- ------------
Balance at September 27, 1998............... 30,333,400 3,033 6,867,334 (50,604,436) (2,459,408) (46,193,477)
Preferred stock dividends................... -- -- -- (23,727,120) -- (23,727,120)
Accretion of preferred stock................ -- -- -- (2,224,453) -- (2,224,453)
Exercised warrants for common stock......... 9,115,150 912 1,907 -- -- 2,819
Net income.................................. -- -- -- 4,294,099 -- 4,294,099
---------- -------- ------------ ------------ ----------- ------------
Balance at June 27, 1999 ................... 39,448,550 $ 3,945 $ 6,869,241 $(72,261,910) $(2,459,408) $(67,848,132)
========== ======== ============ ============ =========== ============
</TABLE>

See accompanying notes to consolidated financial statements.

F-6
<PAGE> 106

SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
FISCAL YEARS ENDED SEPTEMBER 29, 1996,
SEPTEMBER 28, 1997, SEPTEMBER 27, 1998 AND NINE MONTHS ENDED
JUNE 28, 1998 (UNAUDITED) AND JUNE 27, 1999

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED ---------------------------
------------------------------------------- JUNE 28, JUNE 27,
1996 1997 1998 1998 1999
------------ ------------- ------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income (loss)...................... $ (4,486,482) $ (6,168,863) $ 18,784,762 $ 19,116,478 $ 4,294,099
------------ ------------- ------------ ------------ ------------
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Loss on extinguishment of debt....... -- 2,744,589 2,687,872 2,687,872 --
Gain on sale of AM stations.......... -- -- (36,241,947) (36,246,947) --
Depreciation and amortization........ 4,555,978 7,618,921 8,876,876 6,866,961 7,222,573
Provision for doubtful accounts...... 4,908,699 3,530,259 2,634,509 2,779,443 1,743,705
Amortization of debt discount........ 5,591,004 4,772,539 658,297 477,029 445,362
Interest satisfied through issuance
of notes.......................... 2,199,121 1,185,722 -- -- --
Amortization of deferred financing
costs............................. 984,001 1,390,736 1,555,016 1,013,387 1,211,012
Write down of fixed assets........... 697,741 487,973 -- -- 451,048
Accretion of interest to principal on
long-term debt.................... -- 161,523 307,200 230,400 230,400
Deferred income taxes................ (1,357,722) (4,062,247) 12,748,883 11,245,578 2,927,482
Changes in operating assets and
liabilities:
Increase in receivables........... (4,538,861) (7,812,211) (4,112,373) (3,493,803) (5,644,994)
Increase in other current
assets.......................... (762,897) (294,574) (412,678) (973,270) (852,946)
Decrease (increase) in other
assets.......................... 148,272 (158,490) 80,483 72,724 23,635
Increase (decrease) in accounts
payable......................... 310,374 (196,443) 1,245,380 314,751 (1,417,003)
Increase in accrued expenses...... 292,468 368,585 2,116,031 2,119,491 1,500,554
Increase (decrease) in accrued
interest........................ 52,702 2,142,006 (595,539) (1,467,195) (871,656)
Increase in unearned revenue...... 218,381 675,999 590,201 254,610 391,854
------------ ------------- ------------ ------------ ------------
Total adjustments............... 13,299,261 12,554,887 (7,861,789) (14,118,969) 7,361,026
------------ ------------- ------------ ------------ ------------
Net cash provided by operating
activities.................... 8,812,779 6,386,024 10,922,973 4,997,509 11,655,125
------------ ------------- ------------ ------------ ------------
Cash flows from investing activities:
Proceeds from sale of AM stations, net
of disposal costs of $838,167........ -- -- 43,161,833 43,165,854 --
Additions to property and equipment.... (3,811,436) (2,022,344) (1,644,533) (1,290,128) (1,684,292)
Acquisition of radio licenses.......... (86,383,942) (142,335,513) (9,327,713) (9,327,713) (26,280,067)
------------ ------------- ------------ ------------ ------------
Net cash provided by (used in)
investing activities.......... (90,195,378) (144,357,857) 32,189,587 32,548,013 (27,964,359)
------------ ------------- ------------ ------------ ------------
</TABLE>

F-7
<PAGE> 107

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED ---------------------------
------------------------------------------- JUNE 28, JUNE 27,
1996 1997 1998 1998 1999
------------ ------------- ------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from financing activities:
Dividends on common stock.............. $ -- $ -- $ (2,676,348) $ (2,676,348) $ --
Purchase of Senior unsecured notes..... -- -- (15,055,055) (15,000,055) --
Retirement of Senior secured notes..... -- (38,414,562) -- -- --
Retirement of Series A preferred
stock................................ -- (42,699,590) -- -- --
Redemption of warrants................. -- (8,323,000) -- -- --
Exercise of warrants................... -- -- -- -- 2,819
Repayments of debt, including accrued
interest............................. (120,691) (56,143) (41,521) (37,654) (37,258)
Proceeds from senior notes, net of
financing costs of $1,605,426 in 1996
and $5,712,407 in 1997............... 33,394,574 69,287,593 -- -- --
Proceeds from Redeemable Series A
Preferred stock and warrants, net of
issuance cost of $1,718,437 in 1996
and $8,952,550 in 1997............... 35,781,563 166,047,450 -- -- --
Decrease in deferred financing costs... 33,999 -- -- -- --
Increase in deferred offering costs.... -- -- -- -- (403,334)
Decrease (increase) in loans receivable
from stockholders.................... (52,964) (1,050,230) 14,827 14,827 --
Advances to related party.............. (2,922) -- -- -- --
------------ ------------- ------------ ------------ ------------
Net cash provided by (used in)
financing activities.......... 69,033,559 144,791,518 (17,758,097) (17,699,230) (437,773)
------------ ------------- ------------ ------------ ------------
Net (decrease) increase in cash
and cash equivalents.......... (12,349,040) 6,819,685 25,354,463 19,846,292 (16,747,007)
Cash and cash equivalents at beginning of
period................................. 17,817,119 5,468,079 12,287,764 12,287,764 37,642,227
------------ ------------- ------------ ------------ ------------
Cash and cash equivalents at end of
period................................. $ 5,468,079 $ 12,287,764 $ 37,642,227 $ 32,134,056 $ 20,895,220
============ ============= ============ ============ ============
Supplemental cash flow information:
Interest paid during the period........ $ 8,254,402 $ 13,175,308 $ 20,561,613 $ 15,913,831 $ 15,861,624
============ ============= ============ ============ ============
Income taxes paid during the period.... $ 632,990 $ 294,262 $ 1,787,191 $ 1,693,335 $ 1,253,915
============ ============= ============ ============ ============
Noncash investing and financing
activities:
Issuance of notes as payment for
interest............................. $ 2,199,122 $ 1,185,722 $ -- $ -- $ --
============ ============= ============ ============ ============
Dividends declared on preferred
stock................................ $ 2,452,910 $ 15,383,936 $ 27,717,142 $ 20,507,976 $ 23,727,120
============ ============= ============ ============ ============
Issuance of preferred stock as payment
of preferred stock dividends......... $ (2,452,910) $ (13,030,211) $(27,553,543) $(13,302,857) $(15,217,047)
============ ============= ============ ============ ============
Issuance of warrants as payment of
dividends............................ $ -- $ -- $ 273,828 $ 273,828 $ --
============ ============= ============ ============ ============
Issuance of note as payment towards
purchase price of radio station...... $ -- $ 3,000,000 $ -- $ -- $ 1,000,000
============ ============= ============ ============ ============
Repayment of stockholder loan and
accrued interest through dividend
withholding.......................... $ -- $ -- $ 1,098,368 $ 1,098,368 $ --
============ ============= ============ ============ ============
</TABLE>

See accompanying notes to consolidated financial statements.
F-8
<PAGE> 108

SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 28, 1997, SEPTEMBER 27, 1998 AND JUNE 27, 1999
(INTERIM INFORMATION FOR NINE MONTHS ENDED JUNE 28, 1998 IS UNAUDITED)

(1) ORGANIZATION AND NATURE OF BUSINESS

Spanish Broadcasting System, Inc., a Delaware corporation and subsidiaries
(the "Company") owns and operates thirteen Spanish-language radio stations
serving the New York, Puerto Rico, Miami, Chicago, San Antonio and Los Angeles
markets through its subsidiaries, SBS of Greater New York, Inc., Spanish
Broadcasting System of Florida, Inc., Spanish Broadcasting System of California,
Inc., Spanish Broadcasting System of Greater Miami, Inc., Spanish Broadcasting
System of San Antonio, Inc., Spanish Broadcasting System of Illinois, Inc. and
Spanish Broadcasting System of Puerto Rico, Inc., a Puerto Rico corporation.
Additionally, the Company's other subsidiaries include Spanish Broadcasting
System, Inc., a New Jersey corporation, Spanish Broadcasting System of Puerto
Rico, Inc., a Delaware corporation, SBS Funding, Inc., a Delaware corporation,
JuJu Media, Inc., a New York corporation, Alarcon Holdings, Inc. ("Alarcon"),
Spanish Broadcasting System Network, Inc. ("SBS Network") and SBS Promotions,
Inc. ("SBS Promotions"). Alarcon owns and operates the building where the
Company's New York offices are located. SBS Network and SBS Promotions are
currently dormant. SBS Network was formerly the Company's exclusive agency
representative for national advertising sales. SBS Promotions formerly performed
promotional services for the Company's radio stations.

The domestic broadcasting industry is subject to extensive federal
regulation which, among other things, requires approval by the Federal
Communications Commission ("FCC") for the issuance, renewal, transfer and
assignment of broadcasting station operating licenses and limits the number of
broadcasting properties the Company may acquire. The Company operates in the
domestic radio broadcasting industry which is subject to extensive and changing
regulation by the FCC.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED MATTERS

(A) BASIS OF PRESENTATION

The consolidated financial statements include the accounts of the Company
and its subsidiaries. All significant intercompany balances and transactions
have been eliminated in consolidation.

The Company's subsidiaries (hereinafter referred to in this paragraph
collectively as "Subsidiary Guarantors") are fully, unconditionally, and jointly
and severally liable for the Company's senior unsecured notes referred to in
note 6. The Company has not included separate financial statements of the
Subsidiary Guarantors because (i) the Subsidiary Guarantors are wholly owned and
constitute substantially all of the Company's direct or indirect subsidiaries,
and (ii) the Company is a holding company with no independent assets or
operations other than its investments in the Subsidiary Guarantors.

The Company's fiscal year is the 52-week period which ends on the last
Sunday of September and the nine month interim is a 39 week period which ends on
the last Sunday of June.

F-9
<PAGE> 109
SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 28, 1997, SEPTEMBER 27, 1998 AND JUNE 27, 1999
(INTERIM INFORMATION FOR NINE MONTHS ENDED JUNE 28, 1998 IS UNAUDITED)

(B) INTERIM INFORMATION

The accompanying unaudited condensed consolidated financial statements for
the nine months ended June 28, 1998 reflect, in the opinion of management, all
adjustments (which include only normal recurring adjustments) necessary to
fairly state the financial position and the results of operations for the
periods presented and the disclosures herein are adequate to make the
information presented not misleading. Operating results for the interim periods
presented are not indicative of the results that can be expected for a full
year.

Revenues are recognized when advertisements are aired.

(D) PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. The Company depreciates the cost
of its property and equipment using the straight-line method over the respective
estimated useful lives. Leasehold improvements are amortized on a straight-line
basis over the shorter of the remaining life of the lease or the useful life of
the improvements.

(E) LONG-LIVED ASSETS

The Company follows the provisions of Statement of Financial Accounting
Standards No. 121, (Statement 121) "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed of." Statement 121 requires that
long-lived assets and certain identifiable intangibles to be held and used or
disposed of by an entity be reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be
recoverable. See note 5 for impairment losses related to fixed assets.

(F) INTANGIBLE ASSETS

Intangible assets represent the portion of the purchase price of station
acquisitions allocated to FCC licenses of those stations and are amortized on a
straight-line basis over 40 years, based on the industry practice of renewing
FCC licenses periodically. The Company assesses the recoverability of this
intangible asset by determining whether the amortization of the intangible asset
balance over its remaining life can be recovered through undiscounted future
operating cash flows of the acquired station. The assessment of the
recoverability of the intangible asset will be impacted if estimated future
operating cash flows are not achieved.

(G) DEFERRED FINANCING COSTS

Deferred financing costs relate to the refinancing of the Company's debt
and additional debt financing obtained in connection with Company's acquisition
of WXDJ-FM and WRMA-FM in Miami and WLEY-FM in Chicago (see note 6).

F-10
<PAGE> 110
SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 28, 1997, SEPTEMBER 27, 1998 AND JUNE 27, 1999
(INTERIM INFORMATION FOR NINE MONTHS ENDED JUNE 28, 1998 IS UNAUDITED)

Deferred financing costs are being amortized using a method which
approximates the effective interest method over the respective lives of the
related indebtedness.

(H) BARTER TRANSACTIONS

Barter transactions represent advertising time exchanged for promotional
items, advertising, supplies, equipment and services. Revenues from barter
transactions are recognized as income when advertisements are broadcast.
Expenses are recognized when goods or services are received or used. The Company
records barter transactions at the fair value of goods or services received.

(I) CASH EQUIVALENTS

Cash equivalents, consisting primarily of interest-bearing money market
accounts and certificates of deposits which have an original maturity date of
less than three months, totaled $12.3 million, $37.6 million and $20.9 million
at September 28, 1997, September 27, 1998 and June 27, 1999, respectively.

(J) INCOME TAXES

The Company files a consolidated Federal income tax return with its
subsidiaries. The Company accounts for income taxes under the asset and
liability method. Deferred tax assets and liabilities are recognized for the
future tax consequences attributable to temporary 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 income in the
period that includes the enactment date.

(K) ADVERTISING COSTS

The Company incurs various marketing and promotional costs to add and
maintain listenership. These costs are charged to expense in the period
incurred.

(L) DEFERRED COMMITMENT FEE

On December 30, 1996 the Company entered into an agreement with a national
advertising agency (the "Agency") whereby the Agency would serve as the
Company's exclusive sales representative for all national sales for a seven-year
period. Pursuant to this agreement, the Agency agreed to pay a commitment fee of
$5.1 million to the Company, of which $1.0 million was paid upon execution of
the agreement and $4.1 million is to be remitted on a monthly basis over a
three-year period. The commitment fee is recognized on a straight-line basis
over the seven-year contractual term of the arrangement as a reduction of Agency
commissions. Deferred commitment fee represents the excess of payments received
from the Agency over the amount recognized.

F-11
<PAGE> 111
SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 28, 1997, SEPTEMBER 27, 1998 AND JUNE 27, 1999
(INTERIM INFORMATION FOR NINE MONTHS ENDED JUNE 28, 1998 IS UNAUDITED)

(M) USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities, and
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

(N) CONCENTRATION OF RISK

All of the Company's business is conducted in the New York, Miami, Los
Angeles, Chicago, San Antonio and Puerto Rico markets. Net revenue earned from
radio stations in these markets as a percentage of total revenue for the fiscal
years ended September 29, 1996, September 28, 1997, and September 27, 1998 and
nine months ended June 27, 1999 is as follows:

<TABLE>
<CAPTION>
1996 1997 1998 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
New York................................................. 51% 49% 44% 45%
Miami.................................................... 17% 22% 28% 25%
Los Angeles.............................................. 32% 28% 17% 16%
Chicago.................................................. -- 1% 11% 11%
San Antonio.............................................. -- -- -- 2%
Puerto Rico.............................................. -- -- -- 1%
--- --- --- ---
100% 100% 100% 100%
=== === === ===
</TABLE>

The increase in market concentration risk in Miami and Chicago in fiscal
1997 and 1998 results from the acquisitions of WRMA-FM and WXDJ-FM in Miami and
WYSY-FM in Chicago as discussed in note 3.

(O) BASIC AND DILUTED NET LOSS PER COMMON SHARE

The Company has presented net loss per common share pursuant to SFAS No.
128, Earnings Per Share and the Securities and Exchange Commission Staff
Accounting Bulletin No. 98.

In accordance with Securities and Exchange Commission ("SEC") Staff
Accounting Bulletin No. 98, certain common stock and common stock equivalents
issued for nominal consideration prior to the initial filing of a registration
statement relating to an initial public offering are treated as outstanding for
the entire period. The Company had no nominal issuances during this period.

Basic net loss per common share was computed by dividing net loss by the
weighted average number of shares of common stock outstanding for each period
presented. Diluted net loss per common share is computed by giving effect to
common stock equivalents as if they were

F-12
<PAGE> 112
SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 28, 1997, SEPTEMBER 27, 1998 AND JUNE 27, 1999
(INTERIM INFORMATION FOR NINE MONTHS ENDED JUNE 28, 1998 IS UNAUDITED)

outstanding for the entire period. Common stock equivalents were not considered
for the years presented since their effect would be antidilutive.

<TABLE>
<CAPTION>
1996 1997 1998 6/28/98 6/27/99
----------- ------------ ------------ ----------- ------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Income (loss) before
extraordinary item......... $(4,486,482) $ (4,522,110) $ 20,397,485 $20,729,201 $ 4,294,099
Less accretion of preferred
stock...................... 541,416 1,659,695 2,552,465 1,883,377 2,224,453
Less dividends on preferred
stock...................... 2,452,910 15,383,936 27,717,142 20,507,976 23,727,120
----------- ------------ ------------ ----------- ------------
Loss before extraordinary
item....................... (7,480,808) (21,565,741) (9,872,122) (1,662,152) (21,657,474)
Extraordinary item........... -- (1,646,753) (1,612,723) (1,612,723) --
----------- ------------ ------------ ----------- ------------
Net loss applicable to common
stockholders............... $(7,480,808) $(23,212,494) $(11,484,845) $(3,274,875) $(21,657,474)
=========== ============ ============ =========== ============
Weighted average common
shares outstanding (basic
and diluted)............... 30,333,400 30,333,400 30,333,400 30,333,400 31,629,918
=========== ============ ============ =========== ============
BASIC AND DILUTED LOSS PER
COMMON SHARE
Net loss per common share
before extraordinary
item....................... $ (0.25) $ (0.71) $ (0.33) $ (0.06) $ (0.68)
Net loss per common share for
extraordinary item......... -- (0.06) (0.05) (0.05) --
----------- ------------ ------------ ----------- ------------
Net loss per common share.... $ (0.25) $ (0.77) $ (0.38) $ (0.11) $ (0.68)
=========== ============ ============ =========== ============
</TABLE>

(p) FAIR VALUE OF FINANCIAL INSTRUMENTS

Statement of Financial Accounting Standards No. 107, "Disclosures About
Fair Value of Financial Instruments," requires disclosure of fair value of
certain financial instruments. Cash and cash equivalents, receivables, other
current assets and due from related party, as well as accounts payable, accrued
expenses and other current liabilities, as reflected in the consolidated
financial statements, approximate fair value because of the short-term maturity
of these instruments. The estimated fair value of the Company's other long-term
debt instruments approximate the carrying amount as the interest rates
approximates the Company's current borrowing rate for similar debt instruments
of comparable maturity.

Fair value estimates are made at a specific point in time, based on
relevant market information and information about the financial instrument.
These estimates are subjective in nature and involve uncertainties and matters
of significant judgment and therefore cannot be determined with precision.
Changes in assumptions could significantly affect the estimates.

F-13
<PAGE> 113
SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 28, 1997, SEPTEMBER 27, 1998 AND JUNE 27, 1999
(INTERIM INFORMATION FOR NINE MONTHS ENDED JUNE 28, 1998 IS UNAUDITED)

The estimated fair value of the Company's unsecured notes and preferred
stock is as follows (in millions):

<TABLE>
<CAPTION>
1997 1998 JUNE 27, 1999
----------------- ----------------- -----------------
CARRYING FAIR CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE AMOUNT VALUE
-------- ------ -------- ------ -------- ------
<S> <C> <C> <C> <C> <C> <C>
12 1/2% Senior unsecured notes............... $103.8 $103.8 $ 91.6 $ 91.6 $ 92.1 $102.2
11% Senior unsecured notes................... 75.0 75.0 75.0 75.0 75.0 81.0
14 1/4% Series A senior exchangeable
preferred stock............................ 171.2 171.2 201.3 201.3 218.8 236.9
</TABLE>

The fair value estimates of the unsecured notes and preferred stock were
based upon quotes from major financial institutions taking into consideration
current rates offered to the Company for debt instruments of the same remaining
maturities.

(Q) REDEEMABLE PREFERRED STOCK

Redeemable preferred stock is stated at redemption value less the
unamortized discount. The discount is accreted into the carrying value of the
preferred stock through the date at which the preferred stock is mandatorily
redeemable with a charge to accumulated deficit using the effective interest
method.

(R) RECLASSIFICATION

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

(3) ACQUISITIONS

On March 25, 1996, the Company acquired the FCC broadcast license and
substantially all of the assets used or useful in the operation of radio station
WPAT-FM for $84.6 million, plus financing and closing costs of $1.8 million. The
Company assumed operational responsibility of WPAT-FM on January 26, 1996 under
an interim agreement, at which time the Company changed the musical format of
WPAT-FM to Spanish language adult contemporary. The Company financed the
acquisition of WPAT-FM through the issuance of senior notes and preferred stock
in March 1996 (see note 6).

On March 27, 1997, the Company acquired the FCC broadcast licenses and
substantially all of the assets used or useful in the operation of WYSY-FM in
Chicago for $33.0 million plus financing and closing costs of $0.2 million.

On March 27, 1997, the Company acquired the FCC broadcast licenses and
substantially all of the assets used or useful in the operation of WRMA-FM and
WXDJ-FM in Miami for $111.0 million plus financing and closing costs of $1.1
million.

The Company financed the purchases of WYSY-FM, WRMA-FM and WXDJ-FM with
proceeds from a combination of issuances consisting of 175,000 shares of the
Company's 14 1/4% Series A Senior Exchangeable Preferred Stock (see note 6) and
warrants to purchase 3,745,000

F-14
<PAGE> 114
SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 28, 1997, SEPTEMBER 27, 1998 AND JUNE 27, 1999
(INTERIM INFORMATION FOR NINE MONTHS ENDED JUNE 28, 1998 IS UNAUDITED

shares of the Company's Class B Common Stock (par value $.0001 per share) and
$75 million aggregate principal amount of the Company's 11% Senior Notes due
2004 (see note 6), plus a note payable to the seller of WLEY-FM (formerly
WYSY-FM) for $3.0 million.

The following unaudited proforma summary presents the consolidated results
of operations as if the acquisitions of WPAT-FM, WRMA-FM and WXDJ-FM had
occurred as of the beginning of fiscal 1997 after giving effect to certain
adjustments, including amortization of intangible assets and interest expense on
the acquisition debt. These pro forma results have been prepared for comparative
purposes only and do not purport to be indicative of what would have occurred
had the acquisitions been made as of that date or of results which may occur in
the future. The results of WYSY-FM prior to its respective acquisition date has
not been included in the proforma summary as this acquisition was not considered
material.

<TABLE>
<CAPTION>
YEAR ENDED
SEPTEMBER 28, 1997
------------------
(UNAUDITED)
<S> <C>
Net revenues................................................ $66,762,000
Loss before extraordinary item.............................. (3,498,000)
Net loss.................................................... (5,145,000)
</TABLE>

On May 13, 1998, the Company acquired the FCC broadcast license and
substantially all of the assets used or useful in the operation of radio station
KRIO-FM serving the San Antonio area for $9.2 million, plus closing costs of
$0.1 million. The Company financed this purchase from cash on hand and cash from
operations. The Company subsequently changed the call letters to KLEY-FM. The
aforementioned acquisition was not deemed material in fiscal 1998 for financial
pro forma presentation purposes.

On December 1, 1998, the Company acquired from Pan Caribbean Broadcasting
Corporation the FCC broadcast license and substantially all of the assets of
WDOY-FM in Puerto Rico for $8.3 million. The acquisition of WDOY-FM was financed
from cash on hand and cash from operations.

On April 30, 1999, the Company acquired the FCC broadcast licenses and
substantially all of the assets used or useful in the operation of WMEG-FM and
WEGM-FM, in Puerto Rico for $16.0 million. The Company financed this purchase
from cash on hand and cash from operations.

On April 26, 1999, the Company acquired eighty percent of the issued and
outstanding capital stock of JuJu Media, Inc., the owner and operator of
LaMusica.com, an Internet Web site and "portal" targeting the U.S. Hispanic
market, for $2.0 million in cash and the issuance of a promissory note for $1.0
million.

The aforementioned acquisitions are not deemed material in fiscal 1999 for
financial pro forma presentation purposes.

The Company's consolidated results of operations include the results of
WPAT-FM, WYSY-FM, WRMA-FM, WXDJ-FM, KRIO-FM, WDOY-FM, WMEG-FM, WEGM-FM,

F-15
<PAGE> 115
SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 28, 1997, SEPTEMBER 27, 1998 AND JUNE 27, 1999
(INTERIM INFORMATION FOR NINE MONTHS ENDED JUNE 28, 1998 IS UNAUDITED

and JuJu Media, Inc. from the respective dates of acquisition. These
acquisitions have been accounted for under the purchase method of accounting.
The purchase price has been allocated to the assets acquired, principally FCC
licenses.

(4) SALE OF AM STATIONS

On July 2, 1997, the Company entered into a definitive agreement (as
amended, the "One-on-One Agreement") with One-on-One Sports, Inc. ("One-on-One")
for the sale of the assets and FCC licenses of radio stations WXLX-AM, serving
the New York metropolitan area, KXMG-AM, serving the Los Angeles metropolitan
area, and WCMQ-AM, serving the Miami metropolitan area. The One-on-One Agreement
contained customary representations, warranties and conditions, including
receipt of FCC approval to the transfer of the FCC licenses. Pursuant to the
One-on-One Agreement, on September 29, 1997, the Company sold the assets and FCC
licenses of WXLX-AM and WCMQ-AM to One-on-One for a sales price of $26.0 million
and recorded a gain of $18.6 million. On December 2, 1997, the Company
consummated the sale of the assets and FCC license of KXMG-AM to One-on-One for
a sales price of $18.0 million and recorded a gain of $17.6 million. These
transactions are classified under other income as Gain on sale of AM stations.

Pursuant to the 1994 12 1/2% Senior Notes due 2002 (the "12 1/2% Notes")
(see note 6) the Company is required to use the greater of $25.0 million or 50%
of the net proceeds from any disposition of certain asset sales including the
FCC broadcast licenses of the aforementioned AM stations to make offers to
purchase the 12 1/2% Notes at 110% of the principal value thereof.

On October 17, 1997, the Company made a tender offer to purchase for cash
any and all of the 12 1/2% Notes up to $22.7 million plus accrued interest up
to, but not including the payment date. The amount payable by the Company was
110% of the principal amount of the 12 1/2% Notes. The Company paid $6.3 million
to the noteholders who responded to the tender offer and purchased $5.5 million
in principal amount of 12 1/2% Notes for $6.0 million plus accrued interest of
$0.3 million in November 1997. The Company also repurchased $7.7 million in
principal amount of 12 1/2% Notes for $9.0 million plus accrued interest of $0.4
million in November 1997. The Company recognized a loss on the tender offer and
repurchased notes of $1.6 million, net of income tax benefit of $1.1 million,
due to the premium paid for the 12 1/2% Notes and the subsequent write-off of
the deferred financing costs and original issue discounts related to the 12 1/2%
Notes purchased. This amount has been classified as an extraordinary item in the
accompanying Consolidated Statement of Operations.

Prior to the sale of the assets of WCMQ-AM, the Station operated on the
frequency of 1210 kHz. As part of the sale of WCMQ-AM, the Company entered into
a five-year local marketing agreement ("LMA") with One-on-One in November 1997.
Under the terms of the LMA, the Company began programming and selling
advertising on WCMQ-AM using a newly-authorized frequency of 1700 kHz. The 1700
kHz transmitter is co-located at the 1210 kHz transmitter/antenna site which was
part of the aforementioned asset sale.

F-16
<PAGE> 116
SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 28, 1997, SEPTEMBER 27, 1998 AND JUNE 27, 1999
(INTERIM INFORMATION FOR NINE MONTHS ENDED JUNE 28, 1998 IS UNAUDITED

(5) PROPERTY AND EQUIPMENT

Property and equipment consist of the following at September 28, 1997,
September 27, 1998 and June 27, 1999:

<TABLE>
<CAPTION>
ESTIMATED
1997 1998 1999 USEFUL LIVES
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Land................................... $ 1,413,287 $ 1,368,407 $ 1,000,000 --
Building and building leasehold
improvements......................... 15,324,227 11,250,742 10,898,370 20 years
Tower and antenna systems.............. 6,709,991 2,138,824 2,221,399 7-15 years
Studio and technical equipment......... 4,874,321 5,135,586 5,504,547 10 years
Furniture and fixtures................. 1,549,749 1,685,745 1,905,024 3-10 years
Transmitter equipment.................. 1,266,747 931,750 1,216,890 7-10 years
Leasehold improvements................. 1,135,176 1,405,759 1,757,377 5-13 years
Computer equipment..................... 1,378,908 1,333,888 1,657,184 5 years
Other.................................. 205,276 520,369 592,567 5 years
----------- ----------- -----------
33,857,682 25,771,070 26,753,358
Less accumulated depreciation and
amortization......................... 15,448,267 10,828,137 11,914,958
----------- ----------- -----------
$18,409,415 $14,942,933 $14,838,400
=========== =========== ===========
</TABLE>

During fiscal 1996 and 1997, and the nine months ended June 27, 1999, the
Company wrote down the value of one of its properties in Los Angeles (which was
part of the assets acquired in the purchase of the Los Angeles AM radio station)
by $0.7 million, $0.4 million, and $0.5 million respectively. The write downs
were based on current market values of real estate in the Los Angeles area. This
amount is included in other, net in the accompanying consolidated statements of
operations.

(6) SENIOR NOTES AND PREFERRED STOCK

12 1/2% SENIOR UNSECURED NOTES

On June 29, 1994, the Company, through a private placement offering (the
"Offering") completed the sale of 107,059 units (the "Units"), each consisting
of $1,000 principal amount of 12 1/2% Senior Notes (the "12 1/2% Notes") due
2002 and warrants to purchase 5,352,950 shares of Class B Common Stock. The
12 1/2% Notes and warrants are separately transferable. The 12 1/2% Notes were
issued at a discount and generated proceeds to the Company of $87.8 million, net
of financing costs of $6.2 million. Of the $94.0 million of gross proceeds,
$88.6 million was allocated to the 12 1/2% Notes and $5.4 million was determined
to be the value of the warrants.

The 12 1/2% Notes bear interest at a rate of 12 1/2% per annum until
maturity on June 15, 2002. Interest is payable semiannually on June 15 and
December 15. The 12 1/2% Notes are not

F-17
<PAGE> 117
SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 28, 1997, SEPTEMBER 27, 1998 AND JUNE 27, 1999
(INTERIM INFORMATION FOR NINE MONTHS ENDED JUNE 28, 1998 IS UNAUDITED

redeemable at the option of the Company. The 12 1/2% Notes are senior unsecured
obligations of the Company and are unconditionally guaranteed, on a senior
unsecured basis, as to payment of principal, premium, if any, and interest,
jointly and severally, by each subsidiary of the Company. In the event of a
change of control, as defined in the offering, the Company will be required to
make an offer to purchase all of the outstanding 12 1/2% Notes at a purchase
price equal to 101% of the principal amount thereof, in each case plus accrued
and unpaid interest to the date of purchase. The indenture pursuant to which the
12 1/2% Notes are issued contains covenants restricting the insurance of
additional indebtedness, the payment of dividends and distributions, the
creation of liens, asset sales, mergers or consolidations, among other things.
The 12 1/2% Notes are registered with the Securities and Exchange Commission.
The discount on the 12 1/2% Notes is being amortized over their term to result
in an effective interest rate of 12 1/2% per annum.

REDEEMABLE SERIES A PREFERRED STOCK AND 12 1/4% SENIOR SECURED NOTES DUE 2001

On March 25, 1996 the Company financed the purchase of radio station
WPAT-FM with a combination of the proceeds from the sale in a private placement
of 37,500 shares of the Company's Redeemable Series A Preferred Stock and $35.0
million of the Company's 12 1/4% Senior Secured Notes due 2001 together with
cash on hand.

On March 27, 1997, these financial instruments were redeemed and retired
with a portion of the proceeds from issuance of the Series A Preferred Stock and
11% Senior Unsecured Notes described below. The Company realized a loss on the
extinguishment of the 12 1/4% Senior Secured Notes which has been classified as
an extraordinary item in the accompanying fiscal 1997 consolidated statement of
operations.

14 1/4% SERIES A SENIOR EXCHANGEABLE PREFERRED STOCK AND 11% SENIOR UNSECURED
NOTES

On March 27, 1997, the Company financed the purchase of radio stations
WYSY-FM (renamed WLEY-FM by the Company), WRMA-FM and WXDJ-FM with proceeds from
the sale through a private placement of 175,000 shares of the Company's 14 1/4%
Series A Senior Exchangeable Preferred Stock ("Series A Preferred Stock") and
warrants to purchase 3,745,000 shares of the Company's Class B Common Stock. The
Series A Preferred Stock and the warrants are separately transferable. The gross
proceeds from the issuance of the Series A Preferred Stock and warrants,
amounted to $175.0 million. The value of the warrants was determined to be $16.6
million. The Company also issued $75.0 million aggregate principal amount of the
Company's 11% Senior Unsecured Notes (the "11% Senior Notes") due 2004. In
connection with this transaction, the Company capitalized financing costs of
$5.7 million related to the 11% Senior Notes and charged issuance costs of $9.0
million related to the Series A Preferred Stock and warrants to paid-in-capital.

The 11% Senior Notes are guaranteed by each of the Company's subsidiaries.
The 11% Senior Notes are senior obligations of the Company that rank senior in
right of payment to all subordinated indebtedness of the Company and are equally
ranked with all existing and future senior indebtedness of the Company including
the 12 1/2% Notes. The 11% Senior Notes are due

F-18
<PAGE> 118
SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 28, 1997, SEPTEMBER 27, 1998 AND JUNE 27, 1999
(INTERIM INFORMATION FOR NINE MONTHS ENDED JUNE 28, 1998 IS UNAUDITED

on March 15, 2004 and bear interest at a rate of 11% per annum payable on each
March 15 and September 15.

The 11% Senior Notes will be redeemable at the option of the Company, in
whole or in part at any time, at the following redemption (expressed as a
percentage of liquidation preference) if redeemed during the twelve month period
commencing March 15, in the applicable year set forth below plus, without
duplication, an amount in cash equal to all accumulated and unpaid dividends to
the redemption date:

<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2001........................................................ 105.50 %
2002........................................................ 102.75 %
2003........................................................ 100.00 %
</TABLE>

In addition, the Company, at its option, may redeem in the aggregate up to 25%
of the original principal amount of 11% Senior Notes at any time prior to March
15, 2000, at a redemption price equal to 110% of the principal amount plus
accrued and unpaid interest to the redemption date.

Convenants under the indebentures governing the 11% Senior Notes and Series
A Preferred Stock are substantially identical to the covenants of the 12 1/2%
Notes.

The Series A Preferred Stock is entitled to dividends at the rate of
14 1/4% per annum payable semi-annually beginning September 15, 1997. The
Company, at its option, may pay dividends on any dividend payment date occurring
on or before March 15, 2002 either in cash or by the issuance of additional
shares of Series A Preferred Stock. The Company has elected to satisfy all or
some portion of the dividends due through the issurance of additional preferred
shares for the fiscal years 1997 and 1998 and the nine month period June 27,
1999 of 11,706, 27,554 and 15,217 shares, respectively.

The Series A Preferred Stock is exchangeable at the option of the Company,
on any dividend payment date for the Company's 14 1/4% Exchange Debentures
("Exchange Debentures") due March 15, 2005. Once issued the 14 1/4% Exchange
Debentures are redeemable, at the option of the Company, at any time, on or
prior to March 15, 2000 at a redemption price equal to 105% of the aggregate
principal amount thereof, plus accrued interest to the date of redemption. After
March 15, 2000 and prior to March 15, 2002 the 14 1/4% Exchange Debentures are
not redeemable. On or after March 15, 2002, the 14 1/4% Exchange Debentures are
redeemable at the option of the Company.

The 14 1/4% Exchange Debentures are issuable in an aggregate principal
amount equal to the liquidation preference of the Series A Preferred Stock so
exchanged, plus accumulated and unpaid dividends to the date fixed for the
exchange thereof, plus any additional 14 1/4% Exchange debentures issued from
time to time in lieu of cash interest. The maturity date is March 15, 2005. The
Company has not exercised its option to exchange the Series A Preferred Stock
for the 14 1/4% Exchange Debentures.

F-19
<PAGE> 119
SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 28, 1997, SEPTEMBER 27, 1998 AND JUNE 27, 1999
(INTERIM INFORMATION FOR NINE MONTHS ENDED JUNE 28, 1998 IS UNAUDITED

The Series A Preferred Stock is redeemable, at the option of the Company,
in whole or in part, at any time on or prior to March 15, 2000 at the redemption
price equal to 105% of the liquidation preference thereof, plus accumulated and
unpaid dividends to the date of redemption. After March 15, 2000 and prior to
March 15, 2002, the Series A Preferred Stock is not redeemable. On or after
March 2002, the Series A Preferred Stock will be redeemable, at the option of
the Company, in whole or in part at any time, at the following redemption prices
(expressed as a percentage of liquidation preference) if redeemed during the
twelve-month period commencing March 15, of the applicable year set forth below
plus, without duplication, an amount in cash equal to all accumulated and unpaid
dividends to the redemption date:

<TABLE>
<CAPTION>
YEAR PERCENTAGE
- ---- ----------
<S> <C>
2002........................................................ 107%
2003........................................................ 105%
2004 and thereafter......................................... 100%
</TABLE>

The Company is required, subject to certain conditions, to redeem all of
the Series A Preferred Stock outstanding on March 15, 2005 at a redemption price
equal to 100% of the liquidation preference thereof, plus accumulated and unpaid
dividends to the date of the redemption.

(7) WARRANTS

Warrants consist of the following:

<TABLE>
<CAPTION>
NUMBER OF CLASS B COMMON SHARES REPRESENTED
BY OUTSTANDING WARRANTS
------------------------------------------------
JUNE 27,
1996 1997 1998 1999
--------- --------- --------- ------------
<S> <C> <C> <C> <C>
Issued in connection with:
12 1/2% Senior Notes(a)........................... 5,352,950 5,352,950 2,469,950 --
Redeemable Series A Preferred Stock and 12 1/4%
Senior Secured Notes(b)......................... 2,141,150 -- -- --
14 1/4% Series A Senior Exchangeable Preferred
Stock(c)........................................ -- 3,745,000 3,745,000 750
Replacement warrants(a)........................... -- -- 2,910,450 9,500
--------- --------- --------- ------
Total................................... 7,494,100 9,097,950 9,125,400 10,250
========= ========= ========= ======
</TABLE>

- ---------------
(a) In 1994, in conjunction with the issuance of 12 1/2% Senior Notes, the
Company issued warrants exercisable for 5,352,950 shares of Class B Common
Stock at an exercise price of $.01 per warrant share which are subject to
adjustment upon the occurrence of certain events, as defined in the warrant
agreement. In connection with the declaration of a cash dividend on common
stock, in March 1998, holders of these warrants were given the option to
participate in such dividends in lieu of maintaining their anti-dilution
rights with respect to such dividends. Holders of warrants representing
2,910,450 shares of Class B Common Stock exercised this option and received
cash dividends of $0.326 million and replacement warrants representing
2,910,450 shares of Class B Common Stock which have an exercise

F-20
<PAGE> 120
SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 28, 1997, SEPTEMBER 27, 1998 AND JUNE 27, 1999
(INTERIM INFORMATION FOR NINE MONTHS ENDED JUNE 28, 1998 IS UNAUDITED

price of $.01 per share. The remaining warrant holders had their underlying
shares adjusted upward resulting in an increase to additional paid in
capital and a charge to accumulated deficit of $0.274 million. The remaining
warrant holders exercised the warrants during the nine month period ended
June 27, 1999. During the nine month period ended June 27, 1999 replacement
warrants were exercised for 2,900,950 shares of Class B Common Stock. The
remaining replacement warrants expired on June 30, 1999 representing 9,500
shares of common stock.

(b) In 1996, in conjunction with the issuance of Redeemable Series A Preferred
Stock and 12 1/4% Senior Secured Notes, the Company issued warrants
exercisable for 6% at the Company's Class B Common Stock on a fully diluted
basis. In 1997 these warrants were redeemed with proceeds from the Company's
14 1/4% Series A Exchangeable Preferred Stock.

(c) In 1997, in conjunction with the issuance of the 14 1/4% Series A Senior
Exchangeable Preferred Stock, the Company issued warrants that entitle the
holder to acquire 21.4 shares of Class B Common Stock or 3,745,000 shares at
a price equal to $0.01 per 21.4 shares, subject to adjustment from time to
time upon to occurrence of certain changes of common stock, certain common
stock distributions, certain issuances of options or convertible securities,
certain dividends and distributions and certain other increases in the
number of shares or common stock. During the nine month period ended June
27, 1999 warrants were exercised for 3,744,250 shares of Class B Common
Stock. The remaining warrants expired on June 30, 1999 representing 750
shares of common stock.

(8) OTHER LONG-TERM DEBT

Other long-term debt consists of the following at September 28, 1997,
September 27, 1998 and June 27, 1999:

<TABLE>
<CAPTION>
1997 1998 1999
---------- ---------- -----------
<S> <C> <C> <C>
Obligation under capital lease with related party
payable in monthly installments of $9,000, including
interest at 6.25%, commencing June 1992 (see note
12)................................................. $1,030,797 $ 989,278 $ 953,920
Note payable due on March 27, 2003 including interest
which accrues at an annual rate of three month LIBOR
plus 450 basis points............................... 3,161,523 3,468,723 3,699,122
Note payable due on April 26, 2000 including interest
which accrues at an annual rate of 6%............... -- 1,000,000
---------- ---------- ----------
4,192,320 4,458,001 5,653,042
Less current portion.................................. 44,644 47,496 1,049,791
---------- ---------- ----------
$4,147,676 $4,410,505 $4,603,251
========== ========== ==========
</TABLE>

F-21
<PAGE> 121
SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 28, 1997, SEPTEMBER 27, 1998 AND JUNE 27, 1999
(INTERIM INFORMATION FOR NINE MONTHS ENDED JUNE 28, 1998 IS UNAUDITED

The scheduled maturities of other long-term debt are as follows at June 27,
1999:

<TABLE>
<CAPTION>
THREE MONTHS ENDING SEPTEMBER AMOUNT
- ----------------------------- ------
<S> <C>
1999...................................................... $ 12,159

FISCAL YEAR ENDING SEPTEMBER
2000...................................................... 1,050,572
2001...................................................... 53,825
2002...................................................... 57,287
2003...................................................... 3,760,094
2004...................................................... 64,894
Thereafter................................................ 654,211
----------
$5,653,042
==========
</TABLE>

(9) LOANS RECEIVABLE FROM STOCKHOLDERS AND RELATED PARTY TRANSACTIONS

Loans receivable from stockholders are comprised of loans receivable from
the Company's Chief Executive Officer (CEO) and Chairman of the Board of
Directors (Chairman), and consist of notes which bear interest at 6.36% per
annum, mature on December 30, 2025 and are payable in 30 equal annual
installments of $0.2 million. Loans receivable have been classified as an
increase in stockholders' deficiency in the accompanying consolidated balance
sheets. Interest receivable of $0.2 million, $0.4 million and $0.5 million,
respectively, at September 28, 1997, September 27, 1998 and June 27, 1999 is
included in other current assets.

At September 28, 1997, September 27, 1998 and June 27, 1999, the Company
has advances totaling $0.3 million due from a party related through common
ownership. Payment of this balance is guaranteed by the CEO. Additionally, at
September 28, 1997, September 27, 1998, and June 27, 1999, the Company had trade
receivables totaling $0.4 million due from this related party which have been
fully reserved as being uncollectible.

The Company pays the operating expenses for a boat owned by a party related
through common ownership which is used by the Company for business entertainment
purposes. Such expenses approximated $0.1 million for each of the fiscal years
ended September 29, 1996, September 28, 1997 and September 27, 1998 and for the
nine months ended June 27, 1999.

The Company leases an apartment from its CEO for annual rentals of $0.1
million through August 2007. Certain renovation expenses were paid for by the
Company totaling $0.2 million during 1998 and 1999. Additionally, the Company
occupies a building under a capital lease agreement with certain stockholders
(see note 12). The building lease expires in 2012 and calls for an annual base
rent of approximately $0.1 million.

In connection with the relocation of offices from the New York metropolitan
area to the Miami metropolitan area, the Company advanced the CEO an aggregate
of $1.1 million to pay for various expenses. On July 16, 1997, the CEO executed
a promissory note to the Company for the principal amount of $1.1 million to
evidence these advances. The note was payable on

F-22
<PAGE> 122
SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 28, 1997, SEPTEMBER 27, 1998 AND JUNE 27, 1999
(INTERIM INFORMATION FOR NINE MONTHS ENDED JUNE 28, 1998 IS UNAUDITED

demand and bore interest at a rate of 7% per annum. The Company declared and
paid a dividend in 1998 and applied a portion of the proceeds of such dividend
which were otherwise payable to the CEO to the repayment in full of this
promissory note.

(10) STOCK OPTION PLAN

The Company maintains a stock option plan pursuant to which the Company has
reserved up to 1,337,500 shares of Class B Common Stock for issuance upon the
exercise of options granted under the plan. The plan covers all regular salaried
employees of the Company and its subsidiaries. No options have been granted
under this plan to date.

(11) CAPITAL STOCK

On September 29, 1999, the Company amended and restated its Certificate of
Incorporation, resulting in a conversion of all existing shares of Class A
Common Stock into shares of Class B Common Stock equal to the number of shares
representing a 50 to 1 stock split for each share. The number of authorized
shares of capital stock was increased to 151 million comprised of 100 million
shares of Class A Common Stock, 50 million shares of Class B Common Stock and 1
million shares of Preferred Stock, and the par values of both the Class A Common
Stock and Class B Common Stock were changed from $.01 per share to $.0001 per
share. In addition, Class B Common Stockholders are entitled to ten votes per
share and Class A Common Stockholders are entitled to one vote per share. Upon
transfer or sale of stock by Class B Stockholders to non affiliate parties, as
defined, such shares automatically convert to shares of Class A Common Stock.

The accompanying consolidated financial statements have been retroactively
restated to reflect these actions.

The rights of the holders of shares of Class A Common Stock and Class B
Common Stock are identical except for voting rights and conversion provisions.
Holders of each class of common stock are entitled to receive dividends and upon
liquidation or dissolution are entitled to receive all assets available for
distribution to stockholders. The holders of each class have no preemptive or
other subscription rights and there are no redemption or sinking fund provisions
with respect to such shares. Each class of common stock is subordinate to the
Series A Preferred Stock with respect to dividend rights and rights on
liquidation, winding up and dissolution of the Company.

(12) COMMITMENTS AND CONTINGENCIES

COMMITMENTS

The Company occupies a building under a capital lease agreement with
certain stockholders of the Company expiring in June 2012. The amount
capitalized under this lease agreement and

F-23
<PAGE> 123
SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 28, 1997, SEPTEMBER 27, 1998 AND JUNE 27, 1999
(INTERIM INFORMATION FOR NINE MONTHS ENDED JUNE 28, 1998 IS UNAUDITED

included in property and equipment at September 27, 1997, September 27, 1998 and
June 27, 1999 is as follows:

<TABLE>
<CAPTION>
1997 1998 1999
---------- ---------- -----------
<S> <C> <C> <C>
Building under capital lease.......................... $1,230,440 $1,230,440 $1,230,440
Less: Accumulated depreciation........................ (328,011) (389,533) (430,548)
---------- ---------- ----------
$ 902,429 $ 840,907 $ 799,892
========== ========== ==========
</TABLE>

The Company leases office space and facilities and certain equipment under
operating leases, one of which is with a related party (see note 9), that expire
at various dates through 2035. Certain leases provide for base rental payments
plus escalation charges for real estate taxes and operating expenses.

At June 27, 1999, future minimum lease payments under such leases are as
follows:

<TABLE>
<CAPTION>
CAPITAL OPERATING
THREE MONTHS ENDING SEPTEMBER LEASE LEASES
- ----------------------------- ---------- ----------
<S> <C> <C>
1999...................................................... $ 37,250 $ 244,100
</TABLE>

<TABLE>
<CAPTION>
FISCAL YEAR ENDING SEPTEMBER
- ----------------------------
<S> <C> <C>
2000...................................................... 149,000 793,100
2001...................................................... 149,000 594,700
2002...................................................... 149,000 542,000
2003...................................................... 149,000 463,000
2004...................................................... 149,000 332,900
Thereafter.................................................. 1,142,364 2,922,800
---------- ----------
Total minimum lease payments................................ 1,924,614 $5,892,600
==========
Less executory costs........................................ (529,614)
----------
1,395,000
Less interest at 6.25%...................................... (441,080)
----------
Present value of minimum lease payments..................... $ 953,920
==========
</TABLE>

Total rent expense for the fiscal years ended September 29, 1996, September
28, 1997 and September 27, 1998 and the nine months ended June 27, 1999 amounted
to $1.1 million, $1.6 million, $1.1 million and $0.9 million, respectively.

F-24
<PAGE> 124
SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 28, 1997, SEPTEMBER 27, 1998 AND JUNE 27, 1999
(INTERIM INFORMATION FOR NINE MONTHS ENDED JUNE 28, 1998 IS UNAUDITED

The Company has agreements to sublease its radio frequencies and portions
of its tower sites. Such agreements provide for payments through 2002. The
future minimum rental income to be received under these agreements as of June
27, 1999 is as follows:

<TABLE>
<CAPTION>
THREE MONTHS ENDING SEPTEMBER AMOUNT
- ----------------------------- --------
<S> <C>
1999...................................................... $166,685
</TABLE>

<TABLE>
<CAPTION>
FISCAL YEAR ENDING SEPTEMBER
- ----------------------------
<S> <C>
2000...................................................... 320,674
2001...................................................... 259,893
2002...................................................... 109,330
----------
$ 856,582
==========
</TABLE>

At June 27, 1999, the Company is committed to employment contracts for
certain executives, on-air talent and general managers expiring through 2003.
Future payments under such contracts are as follows:

<TABLE>
<CAPTION>
AMOUNT
THREE MONTHS ENDING SEPTEMBER ------
<S> <C>
1999...................................................... $ 767,733
</TABLE>

<TABLE>
<CAPTION>
FISCAL YEAR ENDING SEPTEMBER
<S> <C>
2000...................................................... 2,247,950
2001...................................................... 1,886,433
2002...................................................... 1,282,917
2003...................................................... 62,500
----------
$6,247,533
==========
</TABLE>

Included in the future payments schedule above is a five-year employment
agreement with the CEO. The agreement provides for a base salary of not less
than $1.3 million, which may be increased by the board of directors in its sole
discretion. Under the terms of the agreement, the CEO is paid a cash bonus equal
to the sum of (a) 2.5% of the dollar increase in same station revenue in the
aggregate for any fiscal year and (b) 5.0% of the dollar increase in same
station broadcast cash flow for any fiscal year.

Certain employees' contracts provide for additional amounts to be paid if
station ratings or cash flow targets are met.

CONTINGENCIES

In connection with the sale of the AM stations (see note 4), the Company
assigned a lease for a transmitter site which is located on a former landfill
which ceased operations in the late 1960s. As part of the sales agreement, the
Company retained potential exposure relating to possible environmental
liabilities relating to this site. Management is unable to assess the likelihood
that any claim for remediation of this site will arise and no amounts have been
accrued in the consolidated financial statements relating to this contingent
liability.

F-25
<PAGE> 125
SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 28, 1997, SEPTEMBER 27, 1998 AND JUNE 27, 1999
(INTERIM INFORMATION FOR NINE MONTHS ENDED JUNE 28, 1998 IS UNAUDITED

(13) INCOME TAXES

Income tax expense (benefit) for the fiscal years ended September 29, 1996,
September 28, 1997 and September 27, 1998 and the nine months ended June 27,
1999 consists of the following and were allocated as follows:

<TABLE>
<CAPTION>
1996
---------------------------------------------------
CURRENT-
STATE AND CURRENT DEFERRED
LOCAL FEDERAL FEDERAL TOTAL
--------- -------- ----------- -----------
<S> <C> <C> <C> <C>
Loss from operations....................... $191,922 $ -- $(1,357,722) $(1,165,800)
======== ======== =========== ===========
</TABLE>

<TABLE>
<CAPTION>
1997
---------------------------------------------------
CURRENT-
STATE AND CURRENT DEFERRED
LOCAL FEDERAL FEDERAL TOTAL
--------- -------- ----------- -----------
<S> <C> <C> <C> <C>
Loss from operations....................... $250,000 $ -- $(2,964,411) $(2,714,411)
Extraordinary item -- loss on
extinguishment of debt................... -- -- (1,097,836) (1,097,836)
-------- -------- ----------- -----------
$250,000 $ -- $(4,062,247) $(3,812,247)
======== ======== =========== ===========
</TABLE>

<TABLE>
<CAPTION>
1998
---------------------------------------------------
CURRENT-
STATE AND CURRENT DEFERRED
LOCAL FEDERAL FEDERAL TOTAL
--------- -------- ----------- -----------
<S> <C> <C> <C> <C>
Income from operations..................... $950,000 $850,000 $13,824,032 $15,624,032
Extraordinary item -- loss on
extinguishment of debt................... -- -- (1,075,149) (1,075,149)
-------- -------- ----------- -----------
$950,000 $850,000 $12,748,883 $14,548,883
======== ======== =========== ===========
</TABLE>

<TABLE>
<CAPTION>
1999
---------------------------------------------------
CURRENT-
STATE AND CURRENT DEFERRED
LOCAL FEDERAL FEDERAL TOTAL
--------- -------- ----------- -----------
<S> <C> <C> <C> <C>
Income from operations..................... $200,000 $ 50,000 $ 2,927,482 $ 3,177,482
======== ======== =========== ===========
</TABLE>

During fiscal 1996, 1997 and 1998 and the nine months ended June 27, 1999,
the Company utilized net operating loss carryforwards of approximately $0.8
million, $0.7 million, $38.8 million and $1.4 million, respectively.

F-26
<PAGE> 126
SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 28, 1997, SEPTEMBER 27, 1998 AND JUNE 27, 1999
(INTERIM INFORMATION FOR NINE MONTHS ENDED JUNE 28, 1998 IS UNAUDITED

The tax effect of temporary differences and carryforwards that give rise to
deferred tax assets and deferred tax liabilities at September 28, 1997,
September 27, 1998 and June 27, 1999 is as follows:

<TABLE>
<CAPTION>
1997 1998 1999
----------- ------------ ------------
<S> <C> <C> <C>
Deferred tax assets:
Net operating loss carryforwards.................. $32,955,490 $ 16,919,249 $ 16,366,440
Deferred interest................................. 5,717,617 6,080,278 6,358,461
Allowance for doubtful accounts................... 2,162,038 3,108,024 3,376,640
Fixed assets...................................... 474,286 474,286 474,286
Unearned revenue.................................. -- 856,582 1,091,856
AMT credit........................................ -- 850,000 850,000
----------- ------------ ------------
Total gross deferred tax assets................ 41,309,431 28,288,419 28,517,683
Less valuation allowance....................... (17,396,470) (17,396,470) (17,396,470)
----------- ------------ ------------
Total net deferred tax assets.................. 23,912,961 10,891,949 11,121,213
----------- ------------ ------------
Deferred tax liabilities:
Depreciation and amortization..................... 11,776,023 14,463,595 17,620,341
Intangible assets................................. 8,382,950 5,502,950 5,502,950
Unearned revenue.................................. 79,701 -- --
----------- ------------ ------------
Total gross deferred tax liabilities........... 20,238,674 19,966,545 23,123,291
----------- ------------ ------------
Net deferred tax asset (liability)............. $ 3,674,287 $ (9,074,596) $(12,002,078)
=========== ============ ============
</TABLE>

Total income tax expense (benefit) differed from the amounts computed by
applying the U.S. Federal income tax rate of 35% for fiscal years 1996, 1997 and
1998 and the nine months ended June 27, 1999 as a result of the following:

<TABLE>
<CAPTION>
JUNE 27,
1996 1997 1998 1999
----- ----- ---- -----------
<S> <C> <C> <C> <C>
Computed "expected" tax expense (benefit)................ (35.0)% (35.0)% 35.0% 35.0%
State Income taxes, net of federal income tax benefit.... 2.2% (2.8)% 6.5% 6.4%
Non-deductible expenses.................................. 9.0% 1.4% 0.4% 1.2%
Other.................................................... 3.2% (1.8)% 1.8% 0.1%
----- ----- ---- ----
20.6% 38.2% 43.7% 42.7%
</TABLE>

The valuation allowance for deferred tax assets as of September 28, 1997,
September 27, 1998 and June 27, 1999 was $17,396,470. In assessing the
realizability of deferred tax assets, management considers whether it is more
likely than not that some portion or all of the deferred tax assets will not be
realized. The ultimate realization of deferred tax assets is dependent upon the
generation of future taxable income during the periods in which those temporary
differences become deductible. Management considers the scheduled reversal of
deferred tax liabilities, projected future taxable income, and tax planning
strategies in making this assessment.

F-27
<PAGE> 127
SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 28, 1997, SEPTEMBER 27, 1998 AND JUNE 27, 1999
(INTERIM INFORMATION FOR NINE MONTHS ENDED JUNE 28, 1998 IS UNAUDITED

Based upon the level of historical taxable income and projections for
future taxable income over the periods which the deferred tax assets are
deductible, management believes it is more likely than not the Company will
realize the benefits of these deductible differences, net of the existing
valuation allowances. The amount of the deferred tax asset considered
realizable, however, could be reduced in the near term if estimates of future
taxable income during the carryforward period are reduced.

At June 27, 1999, the Company has net operating loss carryforwards
available to offset future taxable income expiring as follows:

<TABLE>
<CAPTION>
NET
OPERATING
LOSS
EXPIRING IN SEPTEMBER CARRYFORWARDS
- --------------------- --------------
<S> <C>
2007...................................................... $ 5,772,000
2008...................................................... 12,213,000
2009...................................................... 11,445,000
2010...................................................... 12,868,000
-----------
$42,298,000
===========
</TABLE>

(14) LITIGATION

The Company is the defendant in a number of lawsuits and claims incidental
in its ordinary course of business, certain of which have been brought by former
employees. The litigation which is probable to result in an unfavorable outcome
and can be reasonably estimated amounts to $0.3 million which the Company has
accrued. The Company does not believe the outcome of any litigation, current or
pending, would have a material adverse impact on the financial position on the
results of operations of the Company.

(15) SUBSEQUENT EVENTS

(a) PURCHASE OF PUERTO RICO STATIONS

On September 22, 1999, the Company entered into a definitive agreement to
purchase all of the outstanding capital stock of nine subsidiaries of Chancellor
Media Corporation of Los Angeles. The Company has agreed to purchase, own and
operate eight radio stations in Puerto Rico, including stations WIOA-FM,
WIOP-FM, WIOC-FM, WCOM-FM, WZMT-FM, WZNT-FM, WOYE-FM, AND WCTA-FM. The purchase
price is $90.0 million. In connection with this acquisition, the Company made a
$10.0 million nonrefundable deposit on the purchase price into escrow. The
closing of this acquisition is subject to the satisfaction of certain customary
conditions, including receipt of regulatory approvals from the FCC and
Department of Justice. The Company expects to finance the purchase of these
companies from a combination of bank borrowings and cash on hand. Prior to the
closing of these acquisitions (but following approval of the Department of
Justice), the Company intends to operate these stations under a local marketing
agreement pursuant to which the Company will pay a monthly fee in exchange

F-28
<PAGE> 128
SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 28, 1997, SEPTEMBER 27, 1998 AND JUNE 27, 1999
(INTERIM INFORMATION FOR NINE MONTHS ENDED JUNE 28, 1998 IS UNAUDITED

for the exclusive right to program and sell commercial announcements for each of
the stations. The Company expects to close the acquisition of these companies by
the end of December 1999. However, there can be no assurance that this
acquisition can be completed during the expected time frame or at all.

(b) TENDER OFFER

On September 30, 1999, the Company commenced tender offers and consent
solicitations (the "Tender Offers") relating to any and all of its outstanding
11% Notes and 12 1/2% Notes, at approximately 111% and 114%, respectively, of
their par values. The Tender Offers are contingent upon completion of the
Company's planned IPO and debt offering, and the valid tender of not less than a
majority in aggregate principal amount of both the 11% Notes and the 12 1/2%
Notes. The Tender Offers expire on November 2, 1999.

On September 24, 1999, the Company entered into letters of understanding
with its then Chairman and Secretary. These letters outline the mutual
intentions of the Company and these individuals in connection with the Company's
planned IPO, and are contingent upon the completion of the IPO. These letters
provide for the following:

- the sale by these individuals of $14.0 million of their Class B Common
Stock in the IPO;

- the purchase by the Company of annuities providing aggregate annual
retirement compensation of $1.0 million to these individuals. These
annuities are estimated to cost the Company $10.6 million;

- the retention of these individuals as members of the Company's Board of
Directors, with titles of Chairman Emeritus and Secretary Emeritus,
respectively;

- an agreement to sell, to the Chairman, the Company's two radio stations
located in the Florida Keys for $0.7 million;

- the repayment by the Chairman of a stockholder loan for approximately
$0.6 million, plus accrued interest of approximately $0.1 million;

- an agreement by the Chairman to assume responsibility for a boat
currently leased by the Company; and,

- the use by the Chairman of a car and driver, and by the Secretary of a
car, to be provided by the Company.

(d) NEW BENEFIT PLANS (UNAUDITED)

In September 1999, the Company adopted an employee incentive stock option
plan ("the 1999 ISO Plan"), a non-employee director stock option plan ("the 1999
NQ Plan"), and a tax-qualified employee savings and retirement plan ("the 401(k)
Plan"). Options granted under the 1999 ISO Plan will vest according to terms to
be determined by the Compensation Committee of the Company's Board of Directors,
and will have a contractual life of five to ten years from

F-29
<PAGE> 129
SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 28, 1997, SEPTEMBER 27, 1998 AND JUNE 27, 1999
(INTERIM INFORMATION FOR NINE MONTHS ENDED JUNE 28, 1998 IS UNAUDITED

date of grant. Options granted under the 1999 NQ Plan will vest 20% upon grant,
and 20% each year for the first four years from grant. All options granted under
the 1999 ISO Plan and the 1999 NQ Plan vest immediately upon a change in control
of the Company, as defined. A total of 3,000,000 shares and 300,000 shares of
Class A Common Stock have been reserved for issuance under the 1999 ISO Plan and
the 1999 NQ Plan, respectively.

The 401(k) Plan provides for Company contributions to match 25% of an
eligible employee's contributions, up to 5% of the employee's base monthly
earnings. All employees over the age of 21 that have completed at least 500
hours of service are eligible to participate in the 401(k) Plan.

(e) PLANNED INITIAL PUBLIC OFFERING (UNAUDITED)

The Company intends to conduct an initial public offering (IPO) for a yet
to be determined number of shares of Class A Common Stock. Concurrently with
this offering the Company plans to offer $235.0 million aggregate principal
amount of senior subordinated notes due 2009. The Company has also entered into
a commitment letter with a lender for the arrangement of senior credit
facilities in an amount of up to $200.0 million. These senior credit facilities
are contingent upon completion of a definitive agreement with the lender on or
before November 12, 1999, the completion of the IPO and the concurrent offering
of the senior subordinated notes due 2009, and the redemption of the Company's
preferred stock. There is no assurance that these offerings will occur, or that
the senior credit facilities will be obtained.

In connection with these offerings, the Company intends to amend its
employment agreement with its CEO and enter into employment agreements with two
other executive officers of the Company. In addition the CEO intends to repay a
shareholder loan for approximately $1.9 million, plus accrued interest of
approximately $0.4 million.

(f) CONTINGENCY (UNAUDITED)

On September 28, 1999, the Company received notice from the purchaser of
KXMG-AM that it would make a claim against the Company for indemnification under
the agreement pursuant to which KXMG-AM was sold, for the removal of an
underground fuel storage tank located on the site of KXMG-AM's transmitter. The
notice did not specify the amount involved in the indemnification claim. The
Company does not have sufficient information to assess the potential exposure
related to this matter, and no amounts have been accrued in the consolidated
financial statements relating to this contingent liability.

F-30
<PAGE> 130

SPANISH BROADCASTING SYSTEM, INC.
AND SUBSIDIARIES

VALUATION AND QUALIFYING ACCOUNTS
FISCAL YEARS ENDED SEPTEMBER 29, 1996,
SEPTEMBER 28, 1997 AND SEPTEMBER 27, 1998
AND NINE MONTHS ENDED JUNE 27, 1999

<TABLE>
<CAPTION>
COLUMN C ADDITIONS
COLUMN B ----------------------- COLUMN E
BALANCE CHARGED TO CHARGED TO BALANCE AT
COLUMN A BEGINNING COST AND OTHER COLUMN D END
DESCRIPTION OF PERIOD EXPENSE ACCOUNTS DEDUCTIONS(1) OF PERIOD
- ----------- ---------- ---------- ---------- ------------- ----------
<S> <C> <C> <C> <C> <C>
Fiscal year 1996:
Allowance for doubtful accounts.... $5,184,886 $4,908,699 -- $5,582,822 $4,510,763
Fiscal year 1997:
Allowance for doubtful accounts.... $4,510,763 $3,530,259 -- $2,635,927 $5,405,095
Fiscal year 1998:
Allowance for doubtful accounts.... $5,405,095 $2,634,509 -- $ 269,544 $7,770,060
Nine month ended June 27, 1999:
Allowance for doubtful accounts.... $7,770,060 $1,743,705 -- $3,483,078 $6,030,687
</TABLE>

- ---------------
(1) Write-offs, net of recoveries.

F-31
<PAGE> 131

22,355,200 Shares

[SPS LOGO]
SPANISH BROADCASTING SYSTEM, INC.
Class A Common Stock
----------------------------
PROSPECTUS

October , 1999

----------------------------
LEHMAN BROTHERS
MERRILL LYNCH & CO.
CIBC WORLD MARKETS
<PAGE> 132

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following is an itemized statement of estimated expenses in connection
with the issuance and sale of the securities being registered by this
registration statement.

<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $ 114,351.32
Printing.................................................... 75,000.00
Accounting fees and expenses................................ 325,000.00
Legal fees and expenses..................................... 450,000.00
Blue sky fees and expenses.................................. --
Miscellaneous............................................... 35,648.68
-------------
Total............................................. $1,000,000.00
=============
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 145 of the Delaware General Corporation Law ("DGCL") provides that
a corporation may indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or complete action, suit or
proceeding whether civil, criminal, administrative or investigative (other than
an action by or in the right of the corporation) by reason of the fact that he
is or was a director, officer, employee or agent of the corporation, or is or
was serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. Section 145 further
provides that a corporation similarly may indemnify any such person serving in
any such capacity who was or is a party or is threatened to be made a party to
any threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor, against expenses actually and
reasonably incurred in connection with the defense or settlement of such action
or suit if he acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Delaware Court of Chancery or such other
court in which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper.

Our third amended and restated certificate of incorporation has a provision
which limits the liability of directors and officers to us to the maximum extent
permitted by Delaware law. The third amended and restated certificate of
incorporation specifies that our directors and officers will not be personally
liable for monetary damages for breach of fiduciary duty as a director or
officer, as applicable. This limitation does not apply to actions by a director
or officer that do not meet the standards of conduct which make it permissible
under the Delaware General Corporation Law for the Company to indemnify such
director or officer.

II-1
<PAGE> 133

Additionally, insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of SBS pursuant to this prospectus, we have been advised that in the opinion of
the SEC such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

We have obtained insurance for the benefit of our directors and officers
that provides for coverage of up to $100.0 million.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

On March 25, 1996 we sold 37,500 shares of our redeemable series A
preferred stock and $35.0 million of our 12 1/4% senior secured notes due 2001,
in a transaction not registered under the Securities Act in reliance upon the
exemption provided in Section 4(2) of the Securities Act. We also issued to the
holders of the preferred stock and notes warrants to purchase, in the aggregate,
6% of our common stock on a fully diluted basis which are exercisable no later
than June 29, 1998. We received gross proceeds of $72.5 million from this
offering. The securities were sold to certain qualified institutional buyers
through CIBC Wood Gundy Securities Corp., as exclusive placement agent.

In June 1996, September 1996 and December 1996, we elected to satisfy
interest due on the notes through the issuance of $3,384,843 additional notes
issued at face value. In June 1996, September 1996 and December 1996, we elected
to satisfy the dividends due of $3,773,000 through the issuance of 3,773
additional shares of preferred stock. On March 27, 1997, the notes, the
preferred stock and the warrants were repurchased or redeemed by SBS.

In lieu of paying dividends on the senior preferred stock, we paid
dividends in the form of shares of senior preferred stock on each of September
15, 1997, March 15, 1998 and September 15, 1998 of 11,706, 13,303 and 14,251,
respectively.

On March 27, 1997, we sold 175,000 units comprised of 175,000 shares of our
series A senior exchangeable preferred stock, liquidation preference $1,000 per
share, and warrants to purchase 74,900 shares of our Class B Common Stock, par
value $.01 per share and (b) $75.0 million aggregate principal amount of our 11%
notes due 2004 in transactions not registered under the Securities Act, in
reliance upon the exemption provided in Section 4(2) of the Act. We received
gross proceeds of $250,000,000 from these offerings. The securities were sold to
II-2
<PAGE> 134

certain qualified institutional buyers through CIBC Wood Gundy Securities Corp.,
as exclusive placement agent.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(A) EXHIBITS

<TABLE>
<S> <C>
1.1 Form of Underwriting Agreement with Lehman Brothers Inc.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated and CIBC
World Markets Corp., dated October , 1999.*
3.1 Third Amended and Restated Certificate of Incorporation of
the Company, dated September 29, 1999 (Exhibit A to this
exhibit 3.1 is incorporated by reference to the Company's
Current Report on Form 8-K, dated March 25, 1996 (the
"Current Report")).
3.2 Certificate of Amendment to the Third Amended and Restated
Certificate of Incorporation of the Company, dated September
29, 1999.
3.3 Amended and Restated By-Laws of the Company.
4.1 Article V of the Third Amended and Restated Certificate of
Incorporation of the Company, dated September 29, 1999. (See
Exhibit 3.1)
4.2 Certificate of Designation filed as Exhibit A to the Third
Amended and Restated Certificate of Incorporation of the
Company, dated September 29, 1999. (See Exhibit 3.1)
4.3 Indenture dated June 29, 1994 among the Company, IBJ
Schroder Bank & Trust Company, as Trustee, the Guarantors
named therein and the Purchasers named therein (incorporated
by reference to Exhibit 4.1 of the Company's 1994
Registration Statement on Form S-4).
4.4 First Supplemental Indenture dated as of March 25, 1996 to
the Indenture dated as of June 29, 1994 among the Company,
the Guarantors named therein and IBJ Schroder Bank & Trust
Company, as Trustee (incorporated by reference to the
Current Report).
4.5 Second Supplemental Indenture dated as of March 21, 1997 to
the Indenture dated as of June 29, 1994 among the Company,
the Guarantors named therein and IBJ Schroder Bank & Trust
Company, as Trustee (incorporated by reference to the
Current Report).
4.6 Form of Supplemental Indenture dated as of November , 1999
to the Indenture dated as of June 29, 1994 among the
Company, the Guarantors named therein and IBJ Schroder Bank
& Trust Company, as Trustee.
4.7 Indenture dated as of March 15, 1997, among the Company, the
Guarantors named therein and IBJ Schroder Bank & Trust
Company, as Trustee (incorporated by reference to the
Current Report).
4.8 Form of Supplemental Indenture dated as of November , 1999
to the Indenture dated as of March 15, 1997, among the
Company, the Guarantors named therein and IBJ Schroder Bank
& Trust Company, as Trustee.
4.9 Exchange Debenture Indenture dated as of March 15, 1997,
among the Company, the Guarantors named therein and U.S.
Trust Company of New York, as Trustee (incorporated by
reference to the Current Report).
</TABLE>

- ---------------
* To be filed by amendment.
II-3
<PAGE> 135

<TABLE>
<S> <C>
4.10 Indenture with respect to % Senior Subordinated Notes
due 2009 with The Bank of New York as Trustee, dated
, 1999.*
5.1 Opinion of Kaye, Scholer, Fierman, Hays & Handler, LLP
regarding legality.*
10.1 Securities Purchase Agreement dated as of March 24, 1997
among the Company, the Guarantors named therein and CIBC
Wood Gundy Securities Corp., as Initial Purchaser
(incorporated by reference to the Current Report).
10.2 Unit Agreement dated as of March 15, 1997 among the Company,
the Guarantors and IBJ Schroder Bank & Trust Company, as
Trustee (incorporated by reference to the Current Report).
10.3 Warrant Agreement dated as of March 15, 1997 among the
Company and IBJ Schroder Bank & Trust Company, as Warrant
Agent (incorporated by reference to the Current Report).
10.4 Common Stock Registration Rights and Stockholders Agreement
dated as of March 15, 1997 among the Company, certain
Management Stockholders named therein and CIBC Wood Gundy
Securities Corp., as Initial Purchaser (incorporated by
reference to the Current Report).
10.5 Notes Registration Rights Agreement dated as of March 15,
1997 among the Company, the Guarantors named therein and
CIBC Wood Gundy Securities Corp., as Initial Purchaser
(incorporated by reference to the Current Report).
10.6 Preferred Stock Registration Rights Agreement dated as of
March 15, 1997 among the Company, the Guarantors named
therein and CIBC Wood Gundy Securities Corp., as Initial
Purchaser (incorporated by reference to the Current Report).
10.7 National Radio Sales Representation Agreement dated as of
February 3, 1997 between Caballero Spanish Media, L.L.C. and
the Company (incorporated by reference to the Current
Report).
10.8 Employment Agreement dated as of March 4, 1997 between Raul
Alarcon, Jr. and the Company (incorporated by reference to
the Current Report).
10.9 Amended and Restated Employment Agreement dated as of
, 1999, by and between the Company and Raul
Alarcon, Jr.*
10.10 Employment Agreement dated February 5, 1997 between Carey
Davis and the Company.*
10.11 Employment Agreement dated as of October , 1999, by
and between the Company and Joseph A. Garcia.*
10.12 Employment Agreement dated as of October , 1999, by and
between the Company and Luis Diaz-Albertini.*
10.13 Employment Agreement, dated April 1, 1999, between Spanish
Broadcasting System of Greater Miami, Inc. and Jesus Salas.*
10.14 Letter Agreement dated January 13, 1997 between the Company
and Caballero Spanish Media, LLC (incorporated by reference
to the Current Report).
10.15 1994 Stock Option Plan of the Company (incorporated by
reference to Exhibit 10.4 of the 1994 Registration
Statement).
</TABLE>

- ---------------
* To be filed by amendment.
II-4
<PAGE> 136

<TABLE>
<S> <C>
10.16 Ground Lease dated December 18, 1995 between Louis Viola
Company and SBS-NJ (incorporated by reference to the 1996
Current Report).
10.17 Ground Lease dated December 18, 1995 between Frank F. Viola
and Estate of Thomas C. Viola and SBS-NJ (incorporated by
reference to the 1996 Current Report).
10.18 Lease and License Agreement dated February 1, 1991 between
Empire State Building Company, as landlord, and SBS-NY, as
tenant (incorporated by reference to Exhibit 10.15.1 of the
1994 Registration Statement).
10.19 Modification of Lease and License dated June 30, 1992
between Empire State Building Company and SBS-NY related to
WSKQ-FM (incorporated by reference to Exhibit 10.15.2 of the
1994 Registration Statement).
10.20 Lease and License Modification and Extension Agreement dated
as of June 30, 1992 between Empire State Building Company,
as landlord, and SBS-NY as tenant (incorporated by reference
to Exhibit 10.15.3 of the 1994 Registration Statement).
10.21 Promissory Note, dated as of December 31, 1995 of Raul
Alarcon, Sr. to SBS-NJ in the principal amount of $577,323
(incorporated by reference to Exhibit 10.26 to the Company's
1995 Annual Report on Form 10-K).
10.22 Promissory Note, dated as of December 31, 1995 of Raul
Alarcon, Jr. to SBS-NJ in the principal amount of $1,896,913
(incorporated by reference to Exhibit 10.27 to the Company's
1995 Annual Report on Form 10-K).
10.23 Lease Agreement dated June 1, 1992 among Raul Alarcon, Sr.,
Raul Alarcon, Jr., and SBS-Fla (incorporated by reference to
Exhibit 10.30 of the 1994 Registration Statement).
10.24 Indenture dated October 12, 1988 between Alarcon Holdings,
Inc. and SBS-NJ related to the studio located at 26 West
56th Street, NY, NY (incorporated by reference to Exhibit
10.32 of the 1994 Registration Statement).
10.25 Agreement of Lease dated as of March 1, 1996. No.
WT-1744-A119 1067 between The Port Authority of New Jersey
and SBS-GNY as assignee of Park Radio (incorporated by
reference to the 1996 Current Report).
10.26 Asset Purchase Agreement dated as of July 2, 1997, by and
between Spanish Broadcasting System, Inc. (New Jersey),
Spanish Broadcasting System of California, Inc., Spanish
Broadcasting System of Florida, Inc., Spanish Broadcasting
System, Inc., and One-on-One Sports, Inc. (incorporated by
reference to Exhibit 10.62 of the Company's Registration
Statement on Form S-4 (Commission File No. 333-26295)).
10.27 Amendment No. 1 dated as of September 29, 1997 to the Asset
Purchase Agreement dated as of July 2, 1997, by and between
Spanish Broadcasting System, Inc. (New Jersey), Spanish
Broadcasting System of California, Inc., Spanish
Broadcasting System of Florida, Inc., Spanish Broadcasting
System, Inc., and One-on-One Sports, Inc. (incorporated by
referent to the Company's Registration Statement on Form
S-1, dated January 21, 1999).
10.28 Promissory Note dated July 16, 1997 of Raul Alarcon, Jr. to
the Company in the principal amount of $1,050,229.63
(incorporated by reference to Exhibit 10.63 of the Company's
Registration Statement on Form S-4 (Commission File No.
333-26295)).
</TABLE>

- ---------------
* To be filed by amendment.
II-5
<PAGE> 137

<TABLE>
<S> <C>
10.29 Asset Purchase Agreement dated January 28, 1998 by and
between Spanish Broadcasting System of San Antonio, Inc. and
Radio KRIO, Ltd. (incorporated by reference to the Company's
Form 10-Q dated February 12, 1998).
10.30 Asset Purchase Agreement dated June 16, 1998 by and between
Spanish Broadcasting System of Puerto Rico, Inc. and Pan
Caribbean Broadcasting Corporation (incorporated by
reference to the Company's Form 10-Q dated July 12, 1998).
10.31 Extension of lease of a Condominium Unit (Metropolitan Tower
Condominium) between Raul Alarcon, Jr. ("Landlord") and
Spanish Broadcasting System, Inc. ("Tenant") (incorporated
by reference to the Company's 1998 Annual Report on Form
10-K).
10.32 Asset Purchase Agreement dated January 8, 1999 by and
between Spanish Broadcasting System of Puerto Rico, Inc. and
Guayama Broadcasting Company, Inc. and LaMega Estacion, Inc.
(incorporated by reference to the Company's Registration
Statement on Form S-1, dated January 21, 1999).
10.33 Stock Purchase Agreement among JuJu Media, Inc., each of the
individual sellers, and Spanish Broadcasting System, Inc.,
dated April 26, 1999.
10.34 Form of Asset Purchase Agreement, dated as of October, 1999,
by and between Spanish Broadcasting System of Florida, Inc.,
and .
10.35 Form of Indemnification Agreement, dated as of ,
1999 between the Company and .
10.36 Spanish Broadcasting System 1999 Stock Option Plan.
10.37 Spanish Broadcasting System 1999 Company Stock Option Plan
for Nonemployee Directors.
13.1 Annual Report of the Company (incorporated by reference to
the Company's 1998 Annual Report on Form 10-K).
21.1 List of Subsidiaries of the Company.
23.1 Consent of KPMG LLP.
23.2 Consent of Kaye, Scholer, Fierman, Hays & Handler, LLP
(included in Exhibit 5.1).
23.3 Consent of Roman Martinez IV.
23.4 Consent of Jason L. Shrinsky.
24.1 Power of Attorney (included herein).
</TABLE>

- ---------------

* To be filed by amendment.

(b) FINANCIAL STATEMENT SCHEDULES

The financial statement schedule -- "Valuation and Qualifying
Accounts" -- appears on page F-31. All other schedules are omitted because they
either are not applicable or the required information is included in the
financial statements or corresponding notes appearing elsewhere in this
registration statement.

ITEM 17. UNDERTAKINGS.

(a) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
SBS pursuant to the foregoing provisions, or otherwise, we have been advised
that in the opinion of the Securities and Exchange

II-6
<PAGE> 138

Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
SBS of expenses incurred or paid by a director, officer or controlling person of
SBS in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, we will, unless in the opinion of our counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification is against public policy
as expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.

(b) We hereby undertake:

(1) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved in the
transaction, that was not the subject of and included in the registration
statement when it became effective.

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

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

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

- To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.

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

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

II-7
<PAGE> 139

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, SBS has duly
caused this Amendment No. 3 to Form S-1 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 6th day of October, 1999.

SPANISH BROADCASTING
SYSTEM, INC.

By: *
------------------------------------
Name: Raul Alarcon, Jr.
Title: Chief Executive Officer and
President

Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 3 to Form S-1 has been signed below by the following persons in the
capacities indicated on the 6th day of October, 1999. Each person whose
signature appears below hereby authorizes Raul Alarcon, Jr. and Joseph A.
Garcia, and each of them, as attorney-in-fact, to sign and file in his behalf,
individually and in each capacity stated below, all amendments and
post-effective amendments to this registration statement.

<TABLE>
<CAPTION>
SIGNATURE
---------
<C> <S>

* Chief Executive Officer, President and a
- --------------------------------------------------- Director (principal executive officer)
Raul Alarcon, Jr.

/s/ JOSEPH A. GARCIA Executive Vice President, Chief Financial
- --------------------------------------------------- Officer, and Assistant Secretary
Joseph A. Garcia (principal financial and accounting
officer)

* Chairman of the Board of Directors
- ---------------------------------------------------
Pablo Raul Alarcon, Sr.

* Secretary and a Director
- ---------------------------------------------------
Jose Grimalt
</TABLE>

- ---------------

* The undersigned by signing his name hereto, does hereby sign and execute this
Amendment No. 3 to the Form S-1 Registration Statement on behalf of the above
named officers and directors of the Company pursuant to the Power of Attorney
executed by such officers and directors previously filed with the Securities
and Exchange Commission.

<TABLE>
<C> <S>
/s/ JOSEPH A. GARCIA
- ---------------------------------------------------
Joseph A. Garcia
</TABLE>

II-8
<PAGE> 140

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NO.
- -------
<S> <C>
1.1 Underwriting Agreement with Lehman Brothers Inc., Merrill
Lynch, Pierce, Fenner & Smith Incorporated and CIBC World
Markets Corp., dated October , 1999.*
3.1 Third Amended and Restated Certificate of Incorporation of
the Company, dated September 29, 1999 (Exhibit A to this
exhibit 3.1 is incorporated by reference to the Current
Report).
3.2 Certificate of Amendment to the Third Amended and Restated
Certificate of Incorporation of the Company, dated September
29, 1999.
3.3 Amended and Restated By-Laws of the Company.
4.1 Article V of the Third Amended and Restated Certificate of
Incorporation of the Company, dated September 29, 1999. (See
Exhibit 3.1)
4.2 Certificate of Designation filed as Exhibit A to the Third
Amended and Restated Certificate of Incorporation of the
Company, dated September 29, 1999. (See Exhibit 3.1)
4.3 Indenture dated June 29, 1994 among the Company, IBJ
Schroder Bank & Trust Company, as Trustee, the Guarantors
named therein and the Purchasers named therein (incorporated
by reference to Exhibit 4.1 of the Company's 1994
Registration Statement on Form S-4).
4.4 First Supplemental Indenture dated as of March 25, 1996 to
the Indenture dated as of June 29, 1994 among the Company,
the Guarantors named therein and IBJ Schroder Bank & Trust
Company, as Trustee (incorporated by reference to the
Current Report).
4.5 Second Supplemental Indenture dated as of March 21, 1997 to
the Indenture dated as of June 29, 1994 among the Company,
the Guarantors named therein and IBJ Schroder Bank & Trust
Company, as Trustee (incorporated by reference to the
Current Report).
4.6 Form of Supplemental Indenture dated as of November , 1999
to the Indenture dated as of June 29, 1994 among the
Company, the Guarantors named therein and IBJ Schroder Bank
& Trust Company, as Trustee.
4.7 Indenture dated as of March 15, 1997, among the Company, the
Guarantors named therein and IBJ Schroder Bank & Trust
Company, as Trustee (incorporated by reference to the
Current Report).
4.8 Form of Supplemental Indenture dated as of November , 1999
to the Indenture dated as of March 15, 1997, among the
Company, the Guarantors named therein and IBJ Schroder Bank
& Trust Company, as Trustee.
4.9 Exchange Debenture Indenture dated as of March 15, 1997,
among the Company, the Guarantors named therein and U.S.
Trust Company of New York, as Trustee (incorporated by
reference to the Current Report).
4.10 Indenture with respect to % Senior Subordinated Notes
due 2009 with The Bank of New York as Trustee, dated
, 1999.*
5.1 Opinion of Kaye, Scholer, Fierman, Hays & Handler, LLP
regarding legality.*
</TABLE>

- ---------------
* To be filed by amendment.
<PAGE> 141

<TABLE>
<CAPTION>
EXHIBIT
NO.
- -------
<S> <C>
10.1 Securities Purchase Agreement dated as of March 24, 1997
among the Company, the Guarantors named therein and CIBC
Wood Gundy Securities Corp., as Initial Purchaser
(incorporated by reference to the Current Report).
10.2 Unit Agreement dated as of March 15, 1997 among the Company,
the Guarantors and IBJ Schroder Bank & Trust Company, as
Trustee (incorporated by reference to the Current Report).
10.3 Warrant Agreement dated as of March 15, 1997 among the
Company and IBJ Schroder Bank & Trust Company, as Warrant
Agent (incorporated by reference to the Current Report).
10.4 Common Stock Registration Rights and Stockholders Agreement
dated as of March 15, 1997 among the Company, certain
Management Stockholders named therein and CIBC Wood Gundy
Securities Corp., as Initial Purchaser (incorporated by
reference to the Current Report).
10.5 Notes Registration Rights Agreement dated as of March 15,
1997 among the Company, the Guarantors named therein and
CIBC Wood Gundy Securities Corp., as Initial Purchaser
(incorporated by reference to the Current Report).
10.6 Preferred Stock Registration Rights Agreement dated as of
March 15, 1997 among the Company, the Guarantors named
therein and CIBC Wood Gundy Securities Corp., as Initial
Purchaser (incorporated by reference to the Current Report).
10.7 National Radio Sales Representation Agreement dated as of
February 3, 1997 between Caballero Spanish Media, L.L.C. and
the Company (incorporated by reference to the Current
Report).
10.8 Employment Agreement dated as of March 4, 1997 between Raul
Alarcon, Jr. and the Company (incorporated by reference to
the Current Report).
10.9 Amended and Restated Employment Agreement dated as of
, 1999, by and between the Company and Raul
Alarcon, Jr.*
10.10 Employment Agreement dated February 5, 1997 between Carey
Davis and the Company.*
10.11 Employment Agreement dated as of October , 1999, by
and between the Company and Joseph A. Garcia.*
10.12 Employment Agreement dated as of October , 1999, by and
between the Company and Luis Diaz-Albertini.*
10.13 Employment Agreement, dated April 1, 1999, between Spanish
Broadcasting System of Greater Miami, Inc. and Jesus Salas.*
10.14 Letter Agreement dated January 13, 1997 between the Company
and Caballero Spanish Media, LLC (incorporated by reference
to the Current Report).
10.15 1994 Stock Option Plan of the Company (incorporated by
reference to Exhibit 10.4 of the 1994 Registration
Statement).
10.16 Ground Lease dated December 18, 1995 between Louis Viola
Company and SBS-NJ (incorporated by reference to the 1996
Current Report).
</TABLE>

- ---------------
* To be filed by amendment.
<PAGE> 142

<TABLE>
<CAPTION>
EXHIBIT
NO.
- -------
<S> <C>
10.17 Ground Lease dated December 18, 1995 between Frank F. Viola
and Estate of Thomas C. Viola and SBS-NJ (incorporated by
reference to the 1996 Current Report).
10.18 Lease and License Agreement dated February 1, 1991 between
Empire State Building Company, as landlord, and SBS-NY, as
tenant (incorporated by reference to Exhibit 10.15.1 of the
1994 Registration Statement).
10.19 Modification of Lease and License dated June 30, 1992
between Empire State Building Company and SBS-NY related to
WSKQ-FM (incorporated by reference to Exhibit 10.15.2 of the
1994 Registration Statement).
10.20 Lease and License Modification and Extension Agreement dated
as of June 30, 1992 between Empire State Building Company,
as landlord, and SBS-NY as tenant (incorporated by reference
to Exhibit 10.15.3 of the 1994 Registration Statement).
10.21 Promissory Note, dated as of December 31, 1995 of Raul
Alarcon, Sr. to SBS-NJ in the principal amount of $577,323
(incorporated by reference to Exhibit 10.26 to the Company's
1995 Annual Report on Form 10-K).
10.22 Promissory Note, dated as of December 31, 1995 of Raul
Alarcon, Jr. to SBS-NJ in the principal amount of $1,896,913
(incorporated by reference to Exhibit 10.27 to the Company's
1995 Annual Report on Form 10-K).
10.23 Lease Agreement dated June 1, 1992 among Raul Alarcon, Sr.,
Raul Alarcon, Jr., and SBS-Fla (incorporated by reference to
Exhibit 10.30 of the 1994 Registration Statement).
10.24 Indenture dated October 12, 1988 between Alarcon Holdings,
Inc. and SBS-NJ related to the studio located at 26 West
56th Street, NY, NY (incorporated by reference to Exhibit
10.32 of the 1994 Registration Statement).
10.25 Agreement of Lease dated as of March 1, 1996. No.
WT-1744-A119 1067 between The Port Authority of New Jersey
and SBS-GNY as assignee of Park Radio (incorporated by
reference to the 1996 Current Report).
10.26 Asset Purchase Agreement dated as of July 2, 1997, by and
between Spanish Broadcasting System, Inc. (New Jersey),
Spanish Broadcasting System of California, Inc., Spanish
Broadcasting System of Florida, Inc., Spanish Broadcasting
System, Inc., and One-on-One Sports, Inc. (incorporated by
reference to Exhibit 10.62 of the Company's Registration
Statement on Form S-4 (Commission File No. 333-26295)).
10.27 Amendment No. 1 dated as of September 29, 1997 to the Asset
Purchase Agreement dated as of July 2, 1997, by and between
Spanish Broadcasting System, Inc. (New Jersey), Spanish
Broadcasting System of California, Inc., Spanish
Broadcasting System of Florida, Inc., Spanish Broadcasting
System, Inc., and One-on-One Sports, Inc. (incorporated by
referent to the Company's Registration Statement on Form
S-1, dated January 21, 1999).
10.28 Promissory Note dated July 16, 1997 of Raul Alarcon, Jr. to
the Company in the principal amount of $1,050,229.63
(incorporated by reference to Exhibit 10.63 of the Company's
Registration Statement on Form S-4 (Commission File No.
333-26295)).
</TABLE>

- ---------------
* To be filed by amendment.
<PAGE> 143

<TABLE>
<CAPTION>
EXHIBIT
NO.
- -------
<S> <C>
10.29 Asset Purchase Agreement dated January 28, 1998 by and
between Spanish Broadcasting System of San Antonio, Inc. and
Radio KRIO, Ltd. (incorporated by reference to the Company's
Form 10-Q dated February 12, 1998).
10.30 Asset Purchase Agreement dated June 16, 1998 by and between
Spanish Broadcasting System of Puerto Rico, Inc. and Pan
Caribbean Broadcasting Corporation (incorporated by
reference to the Company's Form 10-Q dated July 12, 1998).
10.31 Extension of lease of a Condominium Unit (Metropolitan Tower
Condominium) between Raul Alarcon, Jr. ("Landlord") and
Spanish Broadcasting System, Inc. ("Tenant") (incorporated
by reference to the Company's 1998 Annual Report on Form
10-K).
10.32 Asset Purchase Agreement dated January 8, 1999 by and
between Spanish Broadcasting System of Puerto Rico, Inc. and
Guayama Broadcasting Company, Inc. and LaMega Estacion, Inc.
(incorporated by reference to the Company's Registration
Statement on Form S-1, dated January 21, 1999).
10.33 Stock Purchase Agreement among JuJu Media, Inc., each of the
individual sellers, and Spanish Broadcasting System, Inc.,
dated April 26, 1999.
10.34 Form of Asset Purchase Agreement, dated as of October, 1999,
by and between Spanish Broadcasting System of Florida, Inc.,
and .
10.35 Form of Indemnification Agreement, dated as of ,
1999 between the Company and .
10.36 Spanish Broadcasting System 1999 Stock Option Plan.
10.37 Spanish Broadcasting System 1999 Company Stock Option Plan
for Nonemployee Directors.
13.1 Annual Report of the Company (incorporated by reference to
the Company's 1998 Annual Report on Form 10-K).
21.1 List of Subsidiaries of the Company.
23.1 Consent of KPMG LLP.
23.2 Consent of Kaye, Scholer, Fierman, Hays & Handler, LLP
(included in Exhibit 5.1).
23.3 Consent of Roman Martinez IV.
23.4 Consent of Jason L. Shrinsky.
24.1 Power of Attorney (included herein).
</TABLE>

- ---------------

* To be filed by amendment.

<PAGE> 1

EXHIBIT 3.1

THIRD AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

SPANISH BROADCASTING SYSTEM, INC.

This Third Amended and Restated Certificate of Incorporation
of Spanish Broadcasting System, Inc. was duly authorized, approved and adopted
in accordance with the provisions of Sections 228, 242 and 245 of the Delaware
General Corporation Law (the "DGCL"). Pursuant to Section 228(d) of the DGCL,
written notice has been given to the stockholders who have not consented in
writing. The original Certificate of Incorporation was filed with the Secretary
of State of the State of Delaware on June 1, 1994, and an Amended and Restated
Certificate of Incorporation was filed with the Secretary of State of Delaware
on June 27, 1994 and on March 21, 1996. The provisions of the certificate of
incorporation of the Corporation, as amended and restated, shall at the
Effective Date (as defined below) read as follows:

ARTICLE I - NAME

The name of the corporation is Spanish Broadcasting System,
Inc. (the "Corporation").

ARTICLE II - REGISTERED OFFICE

The post office address of the registered office of the
Corporation in the State of Delaware is 9 East Loockerman Street, City of Dover,
County of Kent, Delaware. The name of the registered agent of the Corporation at
that address is National Corporate Research, Ltd.

ARTICLE III - PURPOSE

The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of the State of Delaware (the "DGCL").

ARTICLE IV - RECLASSIFICATION AND STOCK SPLIT

Immediately upon the filing of this Third Amended and Restated
Certificate of Incorporation with the Secretary of State of the State of
Delaware (the "Effective Date"), each share of Class A Common Stock, par value
$.01 per share, outstanding immediately prior to the Effective Date shall be,
without further action by the Corporation or any holder thereof, changed,
converted and reclassified into a number of shares of newly authorized Class B
Common Stock equal to the number of shares representing a 50 to 1 stock split
for each share (the "Conversion Factor"). Each certificate then outstanding
stating on its face that it represents shares of Class A Common Stock existing
prior to the Effective Date, shall automatically represent, from and after the
Effective Date, a number of shares of Class B Common Stock equal to the number
of shares
<PAGE> 2
on the face of the certificate of Class A Common Stock existing prior to the
Effective Date multiplied by the Conversion Factor.

ARTICLE V - CAPITAL STOCK

Section 5.1. General. The maximum number of shares of capital
stock which the Corporation shall have authority to issue is One Hundred and
Fifty-One Million (151,000,000) shares of capital stock, of which One Hundred
Million (100,000,000) shares shall be Class A Common Stock, par value $.0001 per
share and of which Fifty Million (50,000,000) shares shall be Class B Common
Stock, par value $.0001 per share (the Class A Common Stock and Class B Common
Stock shall collectively be referred to as the "Common Stock") and One Million
(1,000,000) shares of preferred stock, par value $.01 per share (the "Preferred
Stock"). The Common Stock and the Preferred Stock are sometimes referred to
herein as the Capital Stock of the Corporation.

Section 5.2. Preferred Stock/Certificate of Designation.

(a) Preferred Stock. The Preferred Stock may be issued in one
or more series. The Corporation's Board of Directors is hereby expressly
authorized without further action by the Corporation's stockholders, subject to
limitations prescribed by the DGCL, to authorize and otherwise provide for the
issuance of the shares of Preferred Stock in one or more series, and by filing a
certificate pursuant to the applicable law of the State of Delaware, to
establish from time to time the number of shares to be included in each such
series, to determine the powers, designations, preferences and relative,
participating, optional or other special rights, including voting rights, and
the qualifications, limitations and restrictions thereof, of each series of
Preferred Stock and may increase or decrease the number of shares within each
such series; provided, however, that the Corporation's Board of Directors may
not decrease the number of shares within a series to less than the number of
shares within such series that are then outstanding and may not increase the
number of shares within a series above the total number of authorized shares of
Preferred Stock for which the powers, designations, preferences and rights have
not otherwise been set forth herein. The authority of the Board of Directors
with respect to each series shall include, but not be limited to, determination
of the following:

(i) the number of shares constituting that series and
the distinctive designation of that series;

(ii) the dividend rate on the shares of that series,
whether dividends shall be cumulative, and, if so, from which date or
dates, and the relative rights of priority, if any, of payment of
dividends on shares of that series;

(iii) whether that series shall have voting, optional
and/or special rights, in addition to the voting rights provided by
law, and, if so, the terms of such voting rights, including, without
limitation, the right to elect one or more members of the Board of
Directors;

2
<PAGE> 3
(iv) whether that series shall have conversion
privileges, and, if so, the terms and conditions of such conversion,
including provision for adjustment of the conversion rate in such
events as the Board of Directors shall determine;

(v) whether or not the shares of that series shall be
redeemable, and, if so, the terms and conditions of such redemption,
including the date or dates upon which they shall be redeemable, and
the amount per share payable in case of redemption, which amount may
vary under different conditions and at different redemption dates;

(vi) whether that series shall have a sinking fund
for the redemption or purchase of shares of that series, and, if so,
the terms and amount of such sinking fund; and

(vii) the rights of the shares of that series in the
event of voluntary or involuntary liquidation, dissolution or winding
up of the Corporation, and the relative rights of priority, if any, of
payment of shares of that series.

(b) Certificate of Designation. The Designations, Powers,
Preferences and Relative, Participating, Optional and other Special Rights of 14
1/4% Senior Exchangeable Preferred Stock, Series A, and Qualifications,
Limitations and Restrictions thereof are set forth on Exhibit A hereto.

Section 5.3. Provisions Applicable to Both Classes of Common
Stock. Except as otherwise required by the DGCL or as otherwise provided in
Sections 5.4 and 5.6 hereof and Section 5.3(a) below, the Class A Common Stock
and the Class B Common Stock shall be identical.

(a) Voting Rights. The holders of Class A Common Stock shall
be entitled to one (1) vote per share in person or by written proxy at all
annual or special meetings of the Corporation or on matters in which the holders
of Capital Stock are entitled to vote. The holders of Class B Common Stock shall
be entitled to ten (10) votes per share, in person or by written proxy at all
annual or special meetings of the Corporation or on matters in which the holders
of Capital Stock are entitled to vote. Except as set forth herein, the holders
of Class A Common Stock and Class B Common Stock shall vote together as a single
class. The holders of Class A Common Stock and Class B Common Stock shall each
be entitled to vote separately as a class with respect to (i) amendments to this
Third Amended and Restated Certificate of Incorporation that alter or change the
powers, preferences or special rights of their respective class of stock so as
to affect them adversely and (ii) such other matters as require class votes
under the DGCL or other applicable laws. Except as otherwise provided by the
DGCL or other applicable law or pursuant to Section 5.2 hereof or by resolution
or resolutions of the Board providing for the issuance of any series of
Preferred Stock, the holders of the Class A Common Stock and the Class B Common
Stock shall have the sole voting power for all purposes, each holder of the
Class A Common Stock and Class B Common Stock being entitled to vote as provided
in this Section 5.3(a).

3
<PAGE> 4
(b) Stock Splits. The Corporation shall not in any manner
subdivide (by any stock split, reclassification, stock dividend,
recapitalization or otherwise) or combine the outstanding shares of one class of
Common Stock unless the outstanding shares of all classes of Common Stock shall
be proportionately subdivided or combined; provided, however, that the
Corporation shall effect the reclassification and stock split set forth in
ARTICLE IV upon the filing of this Third Amended and Restated Certificate of
Incorporation.

(c) Liquidation Rights. Upon any voluntary or involuntary
liquidation, dissolution or winding-up of the affairs of the Corporation, after
payment shall have been made to holders of outstanding Preferred Stock, if any,
of the full amount to which they are entitled pursuant to this Third Amended and
Restated Certificate of Incorporation and any resolutions that may be adopted
from time to time by the Corporation's Board of Directors for the purpose of
fixing the designations, preferences, rights and restrictions of any series of
Preferred Stock, the holders of Common Stock shall be entitled to share ratably
in accordance with the number of shares of Common Stock held by each such
holder, in all remaining assets of the Corporation available for distribution
among the holders of Common Stock, whether such assets are capital, surplus or
earnings. For purposes of this paragraph, neither the consolidation or merger of
the Corporation with or into any other corporation or corporations pursuant to
which the holders of Capital Stock of the Corporation receive capital stock
and/or other securities (including debt securities) of the acquiring corporation
(or of the direct or indirect parent corporation of the acquiring corporation),
nor the sale, lease or transfer by the Corporation of all or any part of its
assets, nor the reduction of the capital stock of the Corporation, shall be
deemed to be a voluntary or involuntary liquidation, dissolution or winding up
of the Corporation as those terms used in this paragraph.

(d) Dividends. If and when dividends on the Class A Common
Stock and Class B Common Stock are declared payable from time to time by the
Board as provided in this Section 5.3(d), whether payable in cash, in property
or in shares of stock of the Corporation, the holders of Class A Common Stock
and the holders of Class B Common Stock shall be entitled to share equally, on a
per share basis, in such dividends, subject to the limitations described below.
If dividends are declared that are payable in shares of Class A Common Stock or
Class B Common Stock, such dividends shall be payable at the same rate on all
classes of Common Stock and the dividends payable in shares of Class A Common
Stock shall be payable only to holders of Class A Common Stock and the dividends
payable in shares of Class B common Stock shall be payable only to holders of
Class B Common Stock. If the Corporation shall in any manner subdivide or
combine the outstanding shares of Class A Common Stock or Class B Common Stock,
the outstanding shares of the other such class of Common Stock shall be
proportionally subdivided or combined in the same manner and on the same basis
as the outstanding shares of Class A Common Stock or Class B Common Stock, as
the case may be, that have been subdivided or combined.

Section 5.4. Transfer of Class B Common Stock.

(a) A Beneficial Owner (as hereinafter defined) of shares of
Class B Common Stock (herein referred to in this section as a "Class B
Stockholder") may transfer, directly or indirectly, shares of Class B Common
Stock, whether by sale, assignment, gift or otherwise, only

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to a Class B Permitted Transferee (as hereinafter defined) and no Class B
Stockholder may otherwise transfer Beneficial Ownership (as hereinafter defined)
of any shares of Class B Common Stock. In the event of any attempted transfer of
the Beneficial Ownership of any shares of Class B Common Stock in violation of
the limitation provided in the preceding sentence, the shares of Class B Common
Stock with respect to which the transfer of such Beneficial Ownership has been
attempted shall be deemed to have been converted automatically, without further
deed or action by or on behalf of any person, into the same number of shares of
Class A Common Stock.

"Class B Permitted Transferee" shall mean, if the Class B Stockholder
is an individual:

(i) the estate of the Class B Stockholder or any
legatee, heir or distributees thereof;

(ii) the spouse of the Class B Stockholder;

(iii) any parent or grandparent and any lineal
descendant (including any adopted child) of any parent or grandparent
of the Class B Stockholder or of the Class B Stockholder's spouse;

(iv) any guardian or custodian (including a custodian
for purposes of the Uniform Gift to Minors Act or Uniform Transfers to
Minor Act) for, or any executor, administrator, conservator and/or
other legal representative of, the Class B Stockholder and/or any Class
B Permitted Transferee or Class B Permitted Transferees thereof;

(v) a trust (including a voting trust), and any
savings or retirement account, such as an individual retirement account
for purposes of federal income tax laws, whether or not involving a
trust, principally for the benefit of such Class B Stockholder and/or
any Class B Permitted Transferee or Class B Permitted Transferees
thereof, including any trust in respect of which such Class B
Stockholder and/or any Class B Permitted Transferee or Class B
Permitted Transferees thereof has any general or special power of
appointment or general or special non-testamentary power or special
testamentary power of appointment limited to any Class B Permitted
Transferee or Class B Permitted Transferees;

(vi) any corporation, partnership or other business
entity if Substantial Beneficial Ownership (as hereinafter defined)
thereof is held by such Class B Stockholder and/or any Class B
Permitted Transferee or Class B Permitted Transferees thereof;
provided, however, that if such Class B Stockholder, and all Class B
Permitted Transferees thereof, cease, for whatever reason, to hold
Substantial Beneficial Ownership of such corporation, partnership or
other business entity, then any and all shares of Class B Common Stock
that such corporation, partnership or other business entity is the
Beneficial Owner of shall be deemed to be converted automatically,
without further deed or action by or on behalf of any person, into
shares of Class A Common Stock;

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(vii) Pablo Raul Alarcon, Sr., Raul Alarcon, Jr. and
Jose Grimalt (each a "Founding Investor") and/or any Class B Permitted
Transferee or Class B Permitted Transferees of a Founding Investor; and

(viii) the Corporation.

"Class B Permitted Transferee" shall mean, if the Class B Stockholder
is a corporation, partnership or other business entity:

(i) any employee benefit plan, or trust thereunder or
therefor, sponsored by the Class B Stockholder;

(ii) any trust (including any voting or liquidating
trust) principally for the benefit of the Class B Stockholder and/or
any Class B Permitted Transferee or Class B Permitted Transferees
thereof;

(iii) any corporation, partnership or other business
entity if Substantial Beneficial Ownership thereof is held by such
Class B Stockholder and/or any Class B Permitted Transferee or Class B
Permitted Transferees thereof; provided, however, that if such Class B
Stockholder, and all Class B Permitted Transferees thereof, cease, for
whatever reason, to hold Substantial Beneficial Ownership of such
corporation, partnership or other business entity, then any and all
shares of Class B Common Stock that such corporation, partnership or
other business entity is the Beneficial Owner of shall be deemed to be
converted automatically, without further deed or action by or on behalf
of any person, into shares of Class A Common Stock;

(iv) the stockholders of the corporation, partners of
the partnership or other owners of equity interests in any other
business entity, who receive such shares, by way of dividend or
distribution (upon dissolution, liquidation or otherwise), provided
that such transfer will not result in Beneficial Ownership of any of
such shares by any person who did not have the power to control such
corporation, partnership or business entity at the time such
corporation, partnership or business entity first acquired Beneficial
Ownership of such shares of Class B Common Stock (other than by any
person who qualifies as a Class B Permitted Transferee pursuant to any
other provision of this paragraph (i) of this Section 5.4);

(v) the Corporation; and

(vi) any Founding Investor and/or any Class B
Permitted Transferee or Class B Permitted Transferees of a Founding
Investor.

(b) Any person who holds shares of Class B Common Stock for
the Beneficial Ownership of another, including (A) any broker or dealer in
securities; (B) any clearing house; (C) any bank, trust company, savings and
loan association or other financial institution; (D) any other nominee; and (E)
any savings plan or account or related trust, such as an individual retirement
account, may transfer such shares to the person or persons for whose benefit it
holds

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such shares. Notwithstanding anything to the contrary set forth herein, any
holder of Class B Common Stock may pledge such shares to a pledgee pursuant to a
bona fide pledge of such shares as collateral security for indebtedness due to
the pledgee, provided that such shares may not be transferred to or registered
in the name of the pledgee unless such pledgee is a Class B Permitted
Transferee. In the event of foreclosure or other similar action by the pledgee,
such pledged shares shall automatically, without any act or deed on the part of
the Corporation or any other person, be converted into shares of Class A Common
Stock unless within five business days after such foreclosure or similar event
such pledged shares are returned to the pledgor or transferred to a Class B
Permitted Transferee. The foregoing provisions of this paragraph shall not be
deemed to restrict or prevent any transfer of such shares by operation of law
upon incompetence, death, dissolution or bankruptcy of any Class B Stockholder
or any provision of law providing for, or judicial order of, forfeiture, seizure
or impoundment.

(c) Any transferee of shares of Class B Common Stock pursuant
to a transfer made in violation of this Section shall have no rights as
stockholder of the Corporation and no other rights against or with respect to
the Corporation except the right to receive the same number of shares of Class A
Common Stock upon the automatic conversion of such transferred shares of Class B
Common Stock. Notwithstanding any other provision of this Third Amended and
Restated Certificate of Incorporation, the Corporation shall, to the full extent
permitted by law, be entitled to issue shares of Class B Common Stock to any
person from time to time.

(d) The Corporation and any transfer agent of Class B Common
Stock may as a condition to the transfer or the registration of any transfer of
shares of Class B Common Stock permitted by this Section 5.4 require the
furnishing of such affidavits or other proof as they deem necessary to establish
that such transferee is a Class B Permitted Transferee.

(e) For purposes of this Section: (A) the term "Beneficial
Ownership" in respect of shares of Class B Common Stock shall mean possession of
the power and authority, either singly or jointly with another, to vote or
dispose of or to direct the voting or disposition of such shares and the term
"Beneficial Owner" in respect of shares of Class B Common Stock shall mean the
person or persons who possess such power and authority; and (B) the term
"Substantial Beneficial Ownership" in respect of any corporation, partnership or
other business entity shall mean possession of the power and authority, either
singly or jointly with another, to vote or dispose of or to direct the voting or
disposition of at least 80% of each class of equity ownership interest in such
corporation, partnership or other business entity.

Section 5.5. Conversion of Class B Common Stock by Holder.

(a) The holder of each share of Class B Common Stock shall
have the right at any time, or from time to time, at such holder's option, to
convert such share into one fully paid and nonassessable share of Class A Common
Stock on and subject to the terms and conditions hereinafter set forth.

(b) In order to exercise his conversion privilege, the holder
of any shares of Class B Common Stock to be converted shall present and
surrender the certificate or certificates representing such shares during usual
business hours at any office or agency of the Corporation

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<PAGE> 8
maintained for the transfer of Class B Common Stock and shall deliver a written
notice of the election of the holder to convert the shares represented by such
certificate or any portion thereof specified in such notice. Such notice shall
also state the name or names (with address) in which the certificate or
certificates for shares of Class A Common Stock issuable on such conversion
shall be registered. If required by the Corporation, any certificate for shares
surrendered for conversion shall be accompanied by instruments of transfer, in
form satisfactory to the Corporation, duly executed by the holder of such shares
or his duly authorized representative. Each conversion of shares of Class B
Common Stock shall be deemed to have been effected on the date (the "conversion
date") on which the certificate or certificates representing such shares shall
have been surrendered and such notice and any required instruments of transfer
shall have been received as aforesaid, and the person or persons in whose name
or names any certificate or certificates for shares of Class A Common Stock
shall be issuable on such conversion shall be, for the purpose of receiving
dividends and for all other corporate purposes whatsoever, deemed to have become
the holder or holders of record of the shares of Class A Common Stock
represented thereby on the conversion date.

(c) As promptly as practicable after the presentation and
surrender for conversion, as herein provided, of any certificate for shares of
Class B Common Stock, the Corporation shall issue and deliver at such office or
agency, to or upon the written order of the holder thereof, certificates for the
number of shares of Class A Common Stock issuable upon such conversion. In case
any certificate for shares of Class B Common Stock shall be surrendered for
conversion of a part only of the shares represented thereby, the Corporation
shall deliver at such office or agency, to or upon the written order of the
holder thereof, a certificate or certificates for the number of shares of Class
B Common Stock represented by such surrendered certificate that are not being
converted. The issuance of certificates for shares of Class A Common Stock
issuable upon the conversion of shares of Class B Common Stock by the registered
holder thereof shall be made without charge to the converting holder for any tax
imposed on the Corporation in respect of the issue thereof. The Corporation
shall not, however, be required to pay any tax that may be payable with respect
to any transfer involved in the issue and delivery of any certificate in a name
other than that of the registered holder of the shares being converted, and the
Corporation shall not be required to issue or deliver any such certificate
unless and until the person requesting the issue thereof shall have paid to the
Corporation the amount of such tax or has established to the satisfaction of the
Corporation that such tax has been paid.

(d) Upon any conversion of shares of Class B Common Stock into
shares of Class A Common Stock pursuant hereto, no adjustment with respect to
dividends shall be made; only those dividends shall be payable on the shares so
converted as have been declared and are payable to holders of record of shares
of Class B Common Stock on a date prior to the conversion date with respect to
the shares so converted; and only those dividends shall be payable on shares of
Class A Common Stock issued upon such conversion as have been declared and are
payable to holders of record of shares of Class A Common Stock on or after such
conversion date.

(e) In case of any sale or conveyance of all or substantially
all of the property or business of the Corporation as an entirety, a holder of a
share of Class B Common Stock shall

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<PAGE> 9
have the right thereafter to convert such share into the kind and amount of
cash, shares of stock and other securities and properties receivable upon such
sale or conveyance by a holder of one share of Class A Common Stock and shall
have no other conversion rights with regard to such share. The provisions of
this subparagraph shall similarly apply to successive sales or conveyances.

(f) Shares of the Class B Common Stock converted into Class A
Common Stock shall be retired and shall resume the status of authorized but
unissued shares of Class B Common Stock.

(g) Such number of shares of Class A Common Stock as may from
time to time be required for such purpose shall be reserved for issuance upon
conversion of outstanding shares of Class B Common Stock.

Section 5.6. No Interference. Except as otherwise provided in
ARTICLE X of this Third Amended and Restated Certificate of Incorporation, the
Corporation will not close its books against the transfer of any share of Common
Stock or of any of the shares of Common Stock issued or issuable upon the
conversion of such shares of Common Stock in any manner which interferes with
the timely conversion of any of such shares.

Section 5.7. Mergers, Consolidations. In the case of a merger
or consolidation which reclassifies or changes the shares of Common Stock, or in
the case of the consolidation or merger of the Corporation with or into another
corporation or corporations or the transfer of all or substantially all of the
assets of the Corporation to another corporation or corporations, each share of
Class B Common Stock shall thereafter be convertible into the number of shares
of stock or other securities or property to which a holder of shares of Class A
Common Stock would have been entitled upon such reclassification, change,
consolidation, merger or transfer, and, in any such case, appropriate adjustment
(as determined in good faith by the Corporation's Board of Directors) shall be
made in the application of the provisions herein set forth with respect to the
rights and interests thereafter of the holders of the Class B Common Stock to
the end that the provisions set forth herein shall thereafter be applicable, as
nearly as reasonably may be practicable, in relation to any shares of stock or
other securities on property thereafter deliverable upon the conversion of
shares of Class B Common Stock, including, but not limited to, the provisions
set forth in Section 5.3(a) with respect to the ten (10) votes per share
allocable to each share of Class B Common Stock as compared to the one vote per
share allocable to each share of Class A Common Stock. In case of any such
merger or consolidation, the resulting or surviving corporation (if not the
Corporation) shall expressly assume the obligation to deliver, upon conversion
of the Class B Common Stock, such stock or other securities or property as the
holders of the Class B Common Stock remaining outstanding shall be entitled to
receive pursuant to the provisions hereof, and to make provisions for the
protection of the conversion rights provided for in this ARTICLE V.

ARTICLE VI - EXISTENCE

The Corporation is to have a perpetual existence.

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ARTICLE VII - GENERAL PROVISIONS

Section 7.1. Registration of Transfer. The Corporation shall
keep at its principal office a register for the registration of Capital Stock.
Upon the surrender of any certificate representing Capital Stock at such place,
the Corporation shall, at the request of the record holder of such certificate,
execute and deliver (at the Corporation's expense) a new certificate or
certificates in exchange therefor representing in the aggregate the number of
shares represented by the surrendered certificate. Each such new certificate
shall be registered in such name and shall represent such number of shares as is
requested by the holder of the surrendered certificate and shall be
substantially identical in form to the surrendered certificate, and dividends
shall accrue on the Capital Stock represented by such new certificate from the
date to which dividends have been fully paid on such Capital Stock represented
by the surrendered certificate. The issuance of new certificates shall be made
without charge to the original holders of the surrendered certificates for any
issuance tax in respect thereof or other cost incurred by the Corporation in
connection with such issuance.

Section 7.2. Replacement. Upon receipt of evidence reasonably
satisfactory to the Corporation (an affidavit of the registered holder shall be
satisfactory) of the ownership and the loss, theft, destruction or mutilation of
any certificate evidencing shares of any class or series of Capital Stock, and
in the case of any such loss, theft or destruction, upon receipt of an indemnity
reasonably satisfactory to the Corporation (provided that if the holder is a
financial institution or other institutional investor its own agreement shall be
satisfactory), or, in the case of any such mutilation upon surrender of such
certificate, the Corporation shall (at its expense) execute and deliver in lien
of such certificate a new certificate of like kind representing the number of
shares of such class or series represented by such lost, stolen, destroyed or
mutilated certificate and dated the date of such lost, stolen, destroyed or
mutilated certificate, and dividends shall accrue on the Capital Stock
represented by such new certificate from the date to which dividends have been
fully paid on such lost, stolen, destroyed or mutilated certificate.

Section 7.3. Issuance of Stock. The shares of all classes and
series of Capital Stock of the Corporation may be issued by the Corporation from
time to time for such consideration as from time to time may be fixed by the
Board of Directors of the Corporation, provided that shares having a par value
shall not be issued for a consideration less than such par value, as determined
by the Board. At any time, or from time to time, the Corporation may grant
rights or options to purchase from the Corporation any shares of its Capital
Stock of any class or series to run for such period of time, for such
consideration, upon such terms and conditions, and in such form as the Board of
Directors of the Corporation may determine. The Board of Directors of the
Corporation shall have authority, as provided by law, to determine that only a
part of the consideration which shall be received by the Corporation for the
shares of its Capital Stock having a par value be capital provided that the
amount of the part of such consideration so determined to be capital shall at
least be equal to the aggregate par value of such shares. The excess, if any, at
any time of the total net assets of the Corporation over the amount so
determined to be capital, as aforesaid, shall be surplus. All classes and series
of Capital Stock of the Corporation shall be and remain at all times
nonassessable.

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The Board of Directors of the Corporation is hereby expressly
authorized, in its discretion, in connection with the issuance of any
obligations or Capital Stock of the Corporation (but without intending hereby to
limit its general power so to do in other cases), to grant rights or options to
purchase Capital Stock of the Corporation of any class or series upon such terms
and during such period as the Board of Directors of the Corporation shall
determine, and to cause such rights to be evidenced by such warrants or other
instruments as it may deem advisable.

Section 7.4. Inspection of Books and Records. The Board of
Directors of the Corporation shall have power from time to time to determine to
what extent and at what times and places and under what conditions and
regulations the accounts and books of the Corporation, or any of them shall be
open to the inspection of the stockholders; and no stockholder shall have any
right to inspect any account or book or document of the Corporation, except as
conferred by the laws of the State of Delaware, unless and until authorized so
to do by resolution of the Board of Directors or the stockholders of the
Corporation.

Section 7.5. Location of Meetings, Books and Records. Except
as otherwise provided in the Bylaws, the stockholders of the Corporation and the
Board of Directors of the Corporation may hold their meetings and have an office
or offices outside of the State of Delaware, and, subject to the provisions of
the laws of said State, may keep the books of the Corporation outside of said
State at such places as may, from time to time, be designated by the Board of
Directors.

Section 7.6. Board of Directors Meeting. The Board of
Directors shall be comprised of the number of directors specified in the
Corporation's Bylaws, and such directors shall be elected in the manner
contemplated by such Bylaws.

ARTICLE VIII - AMENDMENTS

The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Third Amended and Restated Certificate of
Incorporation in the manner now or hereinafter prescribed herein and by the laws
of the State of Delaware, and all rights conferred upon stockholders herein are
granted subject to this reservation.

ARTICLE IX - LIABILITY

Section 9.1. Limitation of Liability.

(a) To the fullest extent permitted by the DGCL as it now
exists or may hereafter be amended (but, in the case of any such amendment, only
to the extent that such amendment permits the Corporation to provide broader
indemnification rights than permitted as of the date this Third Amended and
Restated Certificate of Incorporation is filed with the State of Delaware), and
except as otherwise provided in the Corporation's Bylaws, no director of the
Corporation shall be liable to the Corporation or its stockholders for monetary
damages arising from a breach of fiduciary duty owed to the Corporation or its
stockholders.

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(b) Any repeal or modification of the foregoing paragraph by
the stockholders of the Corporation shall not adversely affect any right or
protection of a director of the Corporation existing at the time of such repeal
or modification.

Section 9.2. Right to Indemnification. Each person who was or
is made party or is threatened to be made a party to or is otherwise involved
(including involvement as a witness) in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (hereinafter, a "proceeding"),
by reason of the fact that he or she is or was a director or officer of the
Corporation or, while a director or officer of the Corporation, is or was
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation (including any subsidiary of the Corporation) or of
a partnership, joint venture, trust or other enterprise, including service with
respect to an employee benefit plan (hereinafter, an "indemnitee"), whether the
basis of such proceeding is alleged action in an official capacity as a director
or officer or in any other capacity while serving as a director or officer,
shall be indemnified and held harmless by the Corporation to the fullest extent
authorized by the DGCL, as the same exists or may hereafter be amended (but, in
the case of any such amendment, only to the extent that such amendment permits
the Corporation to provide for broader indemnification rights than permitted as
of the date this Third Amended and Restated Certificate of Incorporation is
filed with the State of Delaware), against all expense, liability and loss
(including attorneys' fees, judgments, fines, excise taxes or penalties and
amounts paid in settlement) reasonably incurred or suffered by such indemnitee
in connection therewith and such indemnification shall continue as to an
indemnitee who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the indemnitee's heirs, executors and administrators;
provided, however, that except as provided in Section 9.3 of this ARTICLE IX
with respect to proceedings to enforce rights to indemnification, the
Corporation shall indemnify any such indemnitee in connection with a proceeding
(or part thereof) initiated by such indemnitee only if such proceeding (or part
thereof) was authorized by the Board of Directors of the Corporation. The right
to indemnification conferred in this Section of this ARTICLE IX shall be a
contract right and shall include the obligation of the Corporation to pay the
expenses incurred in defending any such proceeding in advance of its final
disposition (hereinafter, an "advance of expenses"); provided, however, that if
and to the extent that the Board of Directors of the Corporation requires, an
advance of expenses incurred by an indemnitee in his or her capacity as a
director or officer (and not in any other capacity in which service was or is
rendered by such indemnitee, including, without limitation, service to an
employee benefit plan) shall be made only upon delivery to the Corporation of an
undertaking (hereinafter, an "undertaking"), by or on behalf of such indemnitee,
to repay all amounts so advanced if it shall ultimately be determined by final
judicial decision from which there is no further right to appeal (hereinafter a
"final adjudication") that such indemnitee is not entitled to be indemnified for
such expenses under this Section or otherwise. The Corporation may, by action of
its Board of Directors, provide indemnification to employees and agents of the
Corporation with the same or lesser scope and effect as the foregoing
indemnification of directors and officers.

Section 9.3. Procedure for Indemnification. Any
indemnification of a director or officer of the Corporation or advance of
expenses under Section 9.2 of this ARTICLE IX shall be made promptly, and in any
event within forty-five days (or, in the case of an advance of expenses, twenty
days) upon the written request of the director or officer. If a determination by

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the Corporation that the director or officer is entitled to indemnification
pursuant to this ARTICLE IX is required, and the Corporation fails to respond
within sixty days to a written request for indemnity, the Corporation shall be
deemed to have approved the request. If the Corporation denies a written request
for indemnification or advance of expenses, in whole or in part, or if payment
in full pursuant to such request is not made within forty-five days (or, in the
case of an advance of expenses, twenty days), the right to indemnification or
advances as granted by this ARTICLE IX shall be enforceable by the director or
officer in any court of competent jurisdiction. Such person's costs and expenses
incurred in connection with successfully establishing his or her right to
indemnification, in whole or in part, in such action shall also be indemnified
by the Corporation. It shall be a defense to any such action (other than an
action brought to enforce a claim for the advance of expenses where the
undertaking required pursuant to Section 9.2 of this ARTICLE IX, if any, has
been tendered to the Corporation) that the claimant has not met the standards of
conduct which make it permissible under the DGCL for the Corporation to
indemnify the claimant for the amount claimed, but the burden of such defense
shall be on the Corporation. Neither the failure of the Corporation (including
its Board of Directors, independent legal counsel, or its stockholder) to have
made a determination prior to the commencement of such action that
indemnification of the claimant is proper in the circumstances because he or she
has met the applicable standard of conduct set forth in DGCL, nor an actual
determination by the Corporation (including its Board of Directors, independent
legal counsel, or its stockholders) that the claimant has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that the claimant has not met the applicable standard of conduct.
The procedure for indemnification of other employees and agents for whom
indemnification is provided pursuant to Section 9.2 of this ARTICLE IX shall be
the same procedure set forth in this Section for directors or officers, unless
otherwise set forth in the action of the Board of Directors of the Corporation
providing for indemnification for such employee or agent.

Section 9.4. Insurance. The Corporation may purchase and
maintain insurance on its own behalf and on behalf of any person who is or was a
director, officer, employee or agent of the Corporation or was serving at the
request of the Corporation as a director, officer, employee or agent of another
Corporation (including any subsidiary of the Corporation), partnership, joint
venture, trust or other enterprise against any expense, liability or loss
asserted against him or her and incurred by him or her in any such capacity,
whether or not the Corporation would have the power to indemnify such person
against such expenses, liability or loss under the DGCL.

Section 9.5. Service for Subsidiaries. Any person serving as a
director, officer, employee or agent of another Corporation, partnership,
limited liability company, joint venture or other enterprise, at least 50% of
whose equity interests are owned by the Corporation (hereinafter, a "subsidiary"
for this ARTICLE IX) shall be conclusively presumed to be serving in such
capacity at the request of the Corporation.

Section 9.6. Reliance. Persons who after the date of the
adoption of this provision are directors or officers of the Corporation or who,
while a director or officer of the Corporation, or a director, officer, employee
or agent of a subsidiary, shall be conclusively presumed to have relied on the
rights to indemnity, advance of expenses and other rights

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contained in this ARTICLE IX in entering into or continuing such service. The
rights to indemnification and to the advance of expenses conferred in this
ARTICLE IX shall apply to claims made against an indemnitee arising out of acts
or omissions which occurred or occur both prior and subsequent to the adoption
hereof.

Section 9.7. Non-Exclusivity of Rights. The rights to
indemnification and to the advance of expenses conferred in this ARTICLE IX
shall not be exclusive of any other right which any person may have or hereafter
acquire under this Third Amended and Restated Certificate of Incorporation or
under any statute, Bylaw, agreement, vote of stockholders or disinterested
directors or otherwise.

Section 9.8. Merger or Consolidation. For purposes of this
ARTICLE IX, references to "the Corporation" shall include any constituent
corporation (including any constituent of a constituent) absorbed into the
Corporation in a consolidation or merger which, if its separate existence had
continued, would have had power and authority to indemnify its directors,
officers, and employees or agents, so that any person who is or was a director,
officer, employee or agent of such constituent corporation, or is or was serving
at the request of such constituent corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, shall stand in the same position under this ARTICLE IX with respect
to the resulting or surviving corporation as he or she would have with respect
to such constituent corporation if its separate existence had continued.

ARTICLE X - ALIEN OWNERSHIP OF STOCK

Section 10.1. Applicability. This ARTICLE X shall be
applicable to the Corporation so long as the provisions of Section 310 of the
Communications Act of 1934, as the same may be amended from time to time (the
"Communications Act") (or any successor, provisions thereto) are applicable to
the Corporation. As used herein, the term "alien" shall have the meaning
ascribed thereto by the Federal Communications Commission ("FCC") on the date
hereof and in the future as Congress or the FCC may change such meaning from
time to time. If the provisions of Section 310 of the Communications Act (or any
successor provisions thereto) are amended, the restrictions in this ARTICLE X
shall be amended in the same way, and as so amended, shall apply to the
Corporation. The Board of Directors of the Corporation may make such rules and
regulations as it shall deem necessary or appropriate to enforce the provisions
of this ARTICLE X.

Section 10.2. Voting. Except as otherwise provided by law, not
more than twenty-five percent of the aggregate number of shares of Capital Stock
of the Corporation outstanding in any class or series entitled to vote on any
matter before a meeting of stockholders of the Corporation shall at any time be
held for the account of aliens or their representatives or for the account of a
foreign government or representative thereof, or for the account of any
corporation organized under the laws of a foreign country.

Section 10.3. Stock Certificates. Shares of Capital Stock
issued to or held by or for the account of aliens and their representatives,
foreign governments and representatives thereof, and corporations organized
under the laws of foreign countries shall be represented by

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<PAGE> 15
Foreign Share Certificates. All other shares of Capital Stock shall be
represented by Domestic Share Certificates. All of such certificates shall be in
such form not inconsistent with this Amended and Restated Certificate of
Incorporation as shall be prepared or approved by the Board of Directors of the
Corporation.

Section 10.4. Limitation on Foreign Ownership. Except as
otherwise provided by law, not more than twenty-five percent of the aggregate
number of shares of Capital Stock of the Corporation outstanding shall at any
time be owned of record by or for the account of aliens or their representatives
or by or for the account of a foreign government or representatives thereof, or
by or for the account of any corporation organized under the laws of a foreign
country. Shares of Capital Stock shall not be transferable on the books of the
Corporation to aliens or their representatives, foreign governments or
representatives thereof, or corporations organized under the laws of foreign
countries if, as a result of such transfer, the aggregate number of shares of
Capital Stock owned by or for the account of aliens and their representatives,
foreign governments and representatives thereof, and corporation organized under
the laws of foreign countries shall be more then twenty-five percent of the
number of shares of Capital Stock then outstanding. If it shall be found by the
Corporation that Capital Stock represented by a Domestic Share Certificate is,
in fact, held by or for the account of aliens or their representative, foreign
governments or representatives thereof, or corporations organized under the laws
of foreign countries, then such Domestic Share Certificate shall be canceled and
a new certificate representing such Capital Stock marked "Foreign Share
Certificate" shall be issued in lieu thereof, but only to the extent that after
such issuance the Corporation shall be in compliance with this ARTICLE X;
provided, however, that if, and to the extent, such issuance would violate this
ARTICLE X, then, the holder of such Capital Stock shall not be entitled to vote,
to receive dividends, or to have any other rights with regard to such Capital
Stock to such extent, except the right to transfer such Capital Stock to a
citizen of the United States.

Section 10.5. Transfer of Foreign Share Certificates. Any
Capital Stock represented by Foreign Share Certificates may be transferred
either to aliens or non-aliens. In the event that any Capital Stock represented
by a certificate marked "Foreign Share Certificate" is sold or transferred to a
non-alien, then such non-alien shall be required to exchange such certificate
for a certificate marked "Domestic Share Certificate." If the Board of Directors
of the Corporation reasonably determines that a Domestic Share Certificate has
been or is to be transferred to or for the account of aliens or their
representatives, foreign governments or representatives thereof, or corporations
organized under the laws of foreign countries, the Corporation shall issue a new
certificate for the shares of Capital Stock transferred to the transferee marked
"Foreign Shares Certificate", cancel the old Domestic Share Certificate, and
record the transaction upon its books, but only to the extent that after such
transfer is complete, the Corporation shall be in compliance with this ARTICLE
X.

Notwithstanding any other provision of this Amended and
Restated Certificate of Incorporation, the transfer or conversion of the
Corporation's Capital Stock, whether voluntary or involuntary, shall not be
permitted, and shall be ineffective, if such transfer or conversion would (i)
violate (or would result in violation of) the Communications Act or any of the
rules or regulations promulgated thereunder or (ii) require the prior approval
of the FCC, unless such prior approval has been obtained.

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<PAGE> 16
Signed on September 29, 1999

/s/ Raul Alarcon, Jr.
----------------------------
Raul Alarcon, Jr., President

<PAGE> 1
EXHIBIT 3.2

STATE OF DELAWARE
CERTIFICATE OF AMENDMENT
OF THE THIRD AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION

Spanish Broadcasting System, Inc., a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware,

DOES HEREBY CERTIFY:

FIRST: That at a meeting of the Board of Directors of Spanish
Broadcasting System, Inc., resolutions were duly adopted setting forth a
proposed amendment of the Third Amended and Restated Certificate of
Incorporation (the "Certificate of Incorporation") of said corporation,
declaring said amendment to be advisable. The resolution setting forth the
proposed amendment is as follows:

RESOLVED, that the Certificate of Designation of the
Powers, Preferences and Relative Rights of 14 1/4% Senior
Exchangeable Preferred Stock, Series A, and Qualifications,
Limitations and Restrictions Thereof (the "Certificate of
Designations") set forth as Exhibit A to the Certificate of
Incorporation be amended by changing the following references
in the Certificate of Designation as follows:

(i) all references to "Class A Common Stock, par
value $0.01 per share" shall be changed to "Class B Common
Stock, par value $0.0001 per share";

(ii) all references to "Class A Common Stock" shall
be changed to "Class B Common Stock";

(iii) all references to "Class B Common Stock, par
value $0.01 per share" shall be changed to "Class A Common
Stock, par value $0.0001 per share"; and

(iv) all references to "Class B Common Stock" shall
be changed to "Class A Common Stock".

SECOND: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.

THIRD: That the capital of said corporation shall not be reduced under
or by reason of said amendment.
<PAGE> 2
IN WITNESS WHEREOF, said corporation has caused this certificate to be
signed by Raul Alarcon, Jr., an Authorized Officer, this 29th day of September,
1999.

By: /s/ Raul Alarcon, Jr.
-----------------------------------
Authorized Officer

Name: Raul Alarcon, Jr.
-----------------------------------
Title: President
-----------------------------------

<PAGE> 1
EXHIBIT 3.3

AMENDED & RESTATED BYLAWS

SPANISH BROADCASTING SYSTEM, INC.

(hereinafter called the "Corporation")

ARTICLE I

OFFICES

Section 1. Registered Office. The registered office of the
Corporation shall be in the City of Dover, County of Kent, State of Delaware.

Section 2. Other Offices. The Corporation may also have
offices at such other places both within and without the State of Delaware as
the Board of Directors may from time to time determine.

ARTICLE II

MEETINGS OF STOCKHOLDERS

Section 1. Place of Meetings. Meetings of the stockholders for
the election of directors or for any other purpose shall be held at such time
and place, either within or without the State of Delaware as shall be designated
from time to time by the Board of Directors and stated in the notice of the
meeting or in a duly executed waiver of notice thereof.

Section 2. Annual Meetings. The Annual Meetings of
Stockholders shall be held on such date and at such time as shall be designated
from time to time by the Board of Directors and stated in the notice of the
meeting, at which meetings the stockholders shall elect by a plurality vote a
Board of Directors, and transact such other business as may properly be brought
before the meeting. Written notice of the Annual Meeting stating the place, date
and hour of the meeting shall be given to each stockholder entitled to vote at
such meeting not less than ten nor more than sixty days before the date of the
meeting.
<PAGE> 2
Section 3. Special Meetings. Unless otherwise prescribed by
law, or by the Certificate of Incorporation, Special Meetings of Stockholders,
for any purpose or purposes, may be called by (i) the Chairman of the Board of
Directors, (ii) the Chief Executive Officer or (iii) the President, and shall be
called by any such officer at the request in writing of a majority of the
members of the Board of Directors or upon the affirmative vote, verified in
writing, of the holders of fifty-one percent (51%) of the outstanding shares
entitled to vote. Written notice of a Special Meeting stating the place, date
and hour of the meeting and the purpose or purposes for which the meeting is
called shall be given not less than ten nor more than sixty days before the date
of the meeting to each stockholder entitled to vote at such meeting.

Section 4. Quorum. Except as otherwise provided by law or by
the Corporation's Certificate of Incorporation, as amended (the "Certificate of
Incorporation") the holders of a majority of the capital stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business. If, however, such quorum shall not be present or
represented at any meeting of the stockholders, the stockholders entitled to
vote thereat, present in person or represented by proxy, shall have power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented, any business may be
transacted which might have been transacted at the meeting as originally
noticed. If the adjournment is for more than thirty days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder entitled to vote at the
meeting.

Section 5. Voting. Unless otherwise required by law, the
Certificate of Incorporation or these Bylaws, any question brought before any
meeting of stockholders shall be

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<PAGE> 3
decided by the vote of the holders of a majority of the stock represented and
entitled to vote thereat. Each holder of Class A Common Stock represented at a
meeting of stockholders shall be entitled to cast one vote for each share of
Class A Common Stock entitled to vote thereat held by such stockholder. Each
holder of Class B Common Stock represented at a meeting of stockholders shall be
entitled to cast ten votes for each share of Class B Common Stock entitled to
vote thereat held by such stockholder. Such votes may be cast in person or by
proxy but no proxy shall be voted on or after three years from its date, unless
such proxy provides for a longer period. The Board of Directors, in its
discretion, or the officer of the Corporation presiding at a meeting of
stockholders, in his discretion, may require that any votes cast at such meeting
shall be cast by written ballot.

Section 6. Consent of Stockholders in Lieu of Meeting. Unless
otherwise provided in the Certificate of Incorporation, any action required or
permitted to be taken at any Annual or Special Meeting of Stockholders of the
Corporation, may be taken without a meeting, without prior notice and without a
vote, if a consent in writing, setting forth the action so taken, shall be
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted.
Such written consent shall be deemed effective upon receipt by the Secretary of
the Corporation of a copy of such written consent executed by each stockholder
of record by facsimile, telex, telegram or cable. Prompt notice of the taking of
the corporate action without a meeting by less than unanimous written consent
shall be given to those stockholders who have not consented in writing.

Section 7. List of Stockholders Entitled to Vote. The officer
of the Corporation who has charge of the stock ledger of the Corporation shall
prepare and make, at least ten days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the

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<PAGE> 4
meetings arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder of the
Corporation who is present.

Section 8. Stock Ledger. The stock ledger of the Corporation
shall be the only evidence as to who are the stockholders entitled to examine
the stock ledger, the list required by Section 7 of this Article II or the books
of the Corporation, or, to vote in person or by proxy at any meeting of
stockholders.

ARTICLE III

DIRECTORS

Section 1. Number and Election of Directors. The Board of
Directors shall consist of not less than three and not more than nine members
(at least two of which shall be independent directors), as such number shall be
established from time to time by resolution of the Board of Directors. Except as
provided in Section 2 of this Article, directors shall be elected by a majority
of the votes cast at Annual Meetings of Stockholders, and each director so
elected shall hold office until the next Annual Meeting and until his successor
is duly elected and qualified, or until his earlier resignation or removal. Any
director may resign at any time upon notice to the Corporation. Directors need
not be stockholders.

Section 2. Removal and Vacancies. At any time, the
stockholders may remove any director or the entire Board of Directors and elect
directors to fill the vacancies created by such

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<PAGE> 5

removal, unless otherwise provided by law. A director may be so removed, with or
without cause, at any time.

In the event that a vacancy is created on the Board of
Directors at any time, if not filled by the Board of Directors, the stockholders
shall meet or act by consent as promptly as practicable, and in any event within
twenty (20) days of the occurrence of such vacancy, for the purpose of electing
a new director.

Section 3. Duties and Powers. The business, operations and
affairs of the Corporation shall be managed by the Board of Directors; provided,
however, that the Board of Directors may delegate such management
responsibilities to such officer(s) as it may appoint to the extent permitted by
the Certificate of Incorporation, these Bylaws and the laws of the State of
Delaware.

Section 4. Meetings. The Board of Directors of the Corporation
may hold meetings, both regular and special, either within or without the State
of Delaware. Regular meetings of the Board of Directors may be held without
notice at such time and at such place as may from time to time be determined by
the Board of Directors. Any one or more members of the Board of Directors, or
the stockholders, acting by a majority vote, may call a meeting of the Board of
Directors or require action by consent for the Directors, including a meeting by
written consent, at any time. Notice thereof stating the place, date and hour of
the meeting shall be given to each director either by mail not less than
forty-eight (48) hours before the date of the meeting, by telephone or telegram
on twenty-four (24) hours' notice, or on such shorter notice as the person or
persons calling such meeting may deem necessary or appropriate in the
circumstances.

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<PAGE> 6
Section 5. Quorum. Except as may be otherwise specifically
provided by law, the Certificate of Incorporation or these Bylaws, at all
meetings of the Board of Directors, a majority of the entire Board of Directors
shall constitute a quorum for the transaction of business and the act of a
majority of the directors present at any meeting at which there is a quorum
shall be the act of the Board of Directors. If a quorum shall not be present at
any meeting of the Board of Directors, the directors present thereat may adjourn
the meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present.

Section 6. Actions of Board. Unless otherwise provided by the
Certificate of Incorporation or these Bylaws, any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting, if all the members of the Board of Directors or
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the Board of Directors or
committee. Such written consent shall be deemed effective upon receipt by the
Secretary of the Corporation of a copy of such written consent by facsimile,
telex, telegram or cable executed by each director.

Section 7. Meetings by Means of Conference Telephone. Unless
otherwise provided by the Certificate of Incorporation or these Bylaws, members
of the Board of Directors of the Corporation, or any committee designated by the
Board of Directors, may participate in a meeting of the Board of Directors or
such committee by means of a conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in a meeting pursuant to this Section 7 shall
constitute presence in person at such meeting.

Section 8. Committees. The Board of Directors may, by
resolution passed by a majority of the entire Board of Directors, designate one
or more committees, each committee to

6
<PAGE> 7
consist of one or more of the directors of the Corporation. The Board of
Directors may designate one or more directors as alternate members of any
committee, who may replace any absent or disqualified member at any meeting of
any such committee. In the absence or disqualification of a member of a
committee, and in the absence of a designation by the Board of Directors of an
alternate member to replace the absent or disqualified member, the member or
members thereof present at any meeting and not disqualified from voting, whether
or not he or they constitute a quorum, may unanimously appoint another member of
the Board of Directors to act at the meeting in the place of any absent or
disqualified member. Any committee, to the extent allowed by law and provided in
the resolution establishing such committee, shall have and may exercise all the
powers and authority of the Board of Directors in the management of the business
and affairs of the Corporation. Each committee shall keep regular minutes and
report to the Board of Directors when required.

Section 9. Compensation. The directors may be paid their
expenses, if any, of attendance at each meeting of the Board of Directors and
may, in the case of non-employee directors, receive such compensation as the
Board of Directors determines for attendance at each meeting of the Board of
Directors. No such payment shall preclude any director from serving the
Corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like compensation for attending
committee meetings.

Section 10. Interested Directors. No contract or transaction
between the Corporation and one or more of its directors or officers, or between
the Corporation and any other corporation, partnership, association or other
organization in which one or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or voidable solely for
this reason, or solely because the director or officer is present at or
participates in the meeting of the

7
<PAGE> 8
Board of Directors or committee thereof which authorizes the contract or
transaction, or solely because his or their votes are counted for such purpose
if (i) the material facts as to his or their relationship or interest and as to
the contract or transaction are disclosed or are known to the Board of Directors
or the committee, and the Board of Directors or committee in good faith
authorizes the contract or transaction by the affirmative vote of a majority of
the disinterested directors, even though the disinterested directors be less
than a quorum; or (ii) the material facts as to his or their relationship or
interest and as to the contract or transaction are disclosed or are known to the
stockholders entitled to vote thereon, and the contract or transaction is
specifically approved in good faith by a majority vote of the stockholders; or
(iii) the contract or transaction is fair as to the Corporation as of the time
it is authorized, approved or ratified by the Board of Directors, a committee
thereof or the stockholders. Common or interested directors may be counted in
determining the presence of a quorum at a meeting of the Board of Directors or
of a committee which authorizes the contract or transaction.

ARTICLE IV

OFFICERS

Section 1. General. The officers of the Corporation shall be
chosen by the Board of Directors and shall be a Chairman of the Board, a
President, a Secretary and a Treasurer. The Board of Directors, in its
discretion, may also choose one or more Vice-Presidents, Assistant Secretaries,
Assistant Treasurers and other officers. Any number of offices may be held by
the same person, unless otherwise prohibited by law, the Certificate of
Incorporation or these Bylaws. The officers of the Corporation need not be
stockholders of the Corporation nor, except in the case of the Chairman of the
Board of Directors, need such officers be directors of the Corporation.

8
<PAGE> 9

Section 2. Election. The Board of Directors at its first
meeting held after each Annual Meeting of Stockholders shall elect the officers
of the Corporation who shall hold their offices for such terms and shall
exercise such powers and perform such duties as shall be determined from time to
time by the Board of Directors; and all officers of the Corporation shall hold
office until their successors are chosen and qualified, or until their earlier
resignation or removal. Any officer elected by the Board of Directors may be
removed in accordance with the terms of the employment agreement with such
officer, and if no such agreement exists, then at any time by the affirmative
vote of a majority of the Board of Directors. Any vacancy occurring in any
office of the Corporation shall be filled by the Board of Directors. The
salaries of all officers of the Corporation shall be fixed by the Board of
Directors.

Section 3. Voting Securities Owned by the Corporation. Powers
of attorney, proxies, waivers of notice of meeting, consents and other
instruments relating to securities owned by the Corporation may be executed in
the name of and on behalf of the Corporation by the Chairman of the Board, the
President or any Vice-President and any such officer may, in the name of and on
behalf of the Corporation, take all such action as any such officer may deem
advisable to vote in person or by proxy at any meeting of security holders of
any corporation in which the Corporation may own securities and at any such
meeting shall possess and may exercise any and all rights and powers incident to
the ownership of such securities and which, as the owner thereof, the
Corporation might have exercised and possessed if present. The Board of
Directors may, by resolution, from time to time confer like powers upon any
other person or persons.

Section 4. Chairman of the Board of Directors. The Chairman of
the Board shall preside at all meetings of the stockholders and of the Board of
Directors. Except where by law the signature of the President is required, the
Chairman of the Board of Directors shall possess the same

9
<PAGE> 10
power as the President to sign all Contracts, certificates and other instruments
of the Corporation which may be authorized by the Board of Directors.

Section 5. Chief Executive Officer. The Chief Executive
Officer shall be the chief executive officer of the Corporation. He shall have
general active management responsibility for the business of the Corporation and
shall be responsible for carrying out the orders and resolutions of the Board of
Directors of the Corporation. In addition, he shall have such powers and perform
such duties as are prescribed by the Board of Directors. Subject to the control
and direction of the Board of Directors, the Chief Executive Officer may enter
into any contract or execute and deliver any instrument in the name and on
behalf of the Corporation. In general, he shall make reports to the Board of
Directors and stockholder and shall perform any and all other duties incident to
the office of Chief Executive Officer, as herein defined, and all such other
duties as from time to time may be assigned to him by the Board of Directors.
During the absence or disability of the Chairman of the Board, the Chief
Executive Officer shall exercise all the powers and discharge all the duties of
the Chairman of the Board (providing that the Chief Executive Officer is a
member of the Board of Directors).

Section 6. President. The President shall be the chief
operating officer of the Corporation. He shall have general supervision of the
affairs of the Corporation, shall sign or countersign all certificates,
contracts or other instruments of the Corporation as authorized by the Board of
Directors, shall make reports to the Board of Directors and stockholders and
shall perform any and all other duties as are incident to the office of
President or are properly assigned to him by the Board of Directors or the Chief
Executive Officer. During the absence or disability of the Chief Executive
Officer, the President shall exercise all the powers and discharge all the
duties of the Chief Executive Officer. The President shall also perform such
other duties and may exercise such other

10
<PAGE> 11
powers as from time to time may be assigned to him by these Bylaws, the Board of
Directors or the Chief Executive Officer.

Section 7. Vice-Presidents. Each Vice-President shall perform
such duties and have such powers as the Board of Directors or the Chief
Executive Officer may prescribe. If there is no Chief Executive Officer, then at
the request of the President or in his absence or in the event of the
President's inability or refusal to act, the Vice-President or the
Vice-Presidents if there is more than one (in the order designated by the Board
of Directors) shall perform the duties of the President, and when so acting,
shall have all the powers of and be subject to all the restrictions upon the
President. If there is no Chief Executive Officer and no Vice-President, the
Board of Directors shall designate the officer of the Corporation who, in the
absence of the President or in the event of the inability or refusal of the
President to act, shall perform the duties of the President, and when so acting,
shall have all the powers of and be subject to all the restrictions upon the
President.

Section 8. Secretary. The Secretary shall attend all meetings
of the stockholders and record all the proceedings thereat in a book or books to
be kept for that purpose; the Secretary shall also perform like duties for the
Board of Directors and for standing committees when required. The Secretary
shall give, or cause to be given, notice of all meetings of the stockholders and
special meetings of the Board of Directors, and shall perform such other duties
as may be prescribed by the Board of Directors or President, under whose
supervision he shall be. If the Secretary shall be unable or shall refuse to
cause to be given notice of all meetings of the stockholders and special
meetings of the Board of Directors, and if there be no Assistant Secretary, then
either the Board of Directors or the Chief Executive Officer may choose another
officer to cause such notice to be given. The Secretary shall have custody of
the seal of the Corporation and the Secretary or any Assistant Secretary, if
there be one, shall have authority to affix the same to any instrument requiring
it and

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when so affixed, it may be attested by the signature of the Secretary or by the
signature of any such Assistant Secretary. The Board of Directors may give
general authority to any other officer to affix the seal of the Corporation and
to attest the affixing by his signature. The Secretary shall see that all books,
reports, statements, certificates and other documents and records required by
law to be kept or filed are properly kept or filed, as the case may be.

Section 9. Treasurer. The Treasurer shall have the custody of
the corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. The Treasurer shall disburse the funds of the Corporation as may be
ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the President and the Board of Directors, at
its regular meetings, or when the Board of Directors so requires, an account of
all his transactions as Treasurer and of the financial condition of the
Corporation. If required by the Board of Directors, the Treasurer shall give the
Corporation a bond in such sum and with such surety or sureties as shall be
satisfactory to the Board of Directors for the faithful performance of the
duties of his office and for the restoration to the Corporation, in case of his
death, resignation, retirement or removal from office, of all books, papers,
vouchers, moneys and other property of whatever kind in his possession or under
his control belonging to the Corporation.

Section 10. Assistant Secretaries. Except as may be otherwise
provided in these Bylaws, Assistant Secretaries, if there be any, shall perform
such duties and have such powers as from time to time may be assigned to them by
the Board of Directors, the Chairman of the Board, the Chief Executive Officer,
the President, any Vice-President, if there be one, or the Secretary, and in the
absence of the Secretary or in the event of his disability or refusal to act,
shall perform the

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<PAGE> 13
duties of the Secretary, and when so acting, shall have all the powers of and be
subject to all the restrictions upon the Secretary.

Section 11. Assistant Treasurers. Assistant Treasurers, if
there be any, shall perform such duties and have such powers as from time to
time may be assigned to them by the Board of Directors, the Chairman of the
Board, the Chief Executive Officer, the President, any Vice-President, if there
be one, or the Treasurer, and in the absence of the Treasurer or in the event of
his disability or refusal to act, shall perform the duties of the Treasurer, and
when so acting, shall have all the powers of and be subject to all the
restrictions upon the Treasurer. If required by the Board of Directors, an
Assistant Treasurer shall give the Corporation a bond in such sum and with such
surety or sureties as shall be satisfactory to the Board of Directors for the
faithful performance of the duties of his office and for the restoration to the
Corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, moneys and other property of whatever
kind in his possession or under his control belonging to the Corporation.

Section 12. Other Officers. Such other officers as the Board
of Directors may choose shall perform such duties and have such powers as from
time to time may be assigned to them by the Board of' Directors. The Board of
Directors may delegate to any other officer of the Corporation the power to
choose such other officers and to prescribe their respective duties and powers.

ARTICLE V

STOCK

Section 1. Form of Certificates. Every holder of stock in the
Corporation shall be entitled to have a certificate signed, in the name of the
Corporation (i) by the Chairman of the Board of Directors, the Chief Executive
Officer, the President or a Vice-President and (ii) by the

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<PAGE> 14
Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary
of the Corporation, certifying the number of shares owned by him in the
Corporation.

Section 2. Signatures. Where a certificate is countersigned by
(i) a transfer agent other than the Corporation or its employee, or (ii) a
registrar other than the Corporation or its employee, any other signature on the
certificate may be a facsimile. In case any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the Corporation with the same effect
as if he were such officer, transfer agent or registrar at the date of issue.

Section 3. Lost Certificates. The Board of Directors may
direct a new certificate to be issued in place of any certificate theretofore
issued by the Corporation alleged to have been lost, stolen or destroyed, upon
the making of an affidavit of that fact by the person claiming the certificate
of stock to be lost, stolen or destroyed. When authorizing such issue of a new
certificate, the Board of Directors may, in its discretion and as a condition
precedent the issuance thereof, require the owner of such lost, stolen or
destroyed certificate, or his legal representative, to advertise the same in
such manner as the Board of Directors shall require and/or to give the
Corporation a bond in such sum as it may direct as indemnity against any claim
that may be made against the Corporation with respect to the certificate alleged
to have been lost, stolen or destroyed.

Section 4. Transfers. Stock of the Corporation shall be
transferable in the manner prescribed by law, the Certificate of Incorporation
and in these Bylaws. Transfers of stock shall be made on the books of the
Corporation only by the person named in the certificate or by his attorney
lawfully constituted in writing and upon the surrender of the certificate
therefor, which shall be cancelled before a new certificate shall be issued.

14
<PAGE> 15
Section 5. Record Date. In order that the Corporation may
determine the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or entitled to express consent to
corporate action in writing without a meeting, or entitled to receive payment of
any dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock,
or for the purpose of any other lawful action, the Board of Directors may fix,
in advance, a record date, which shall not be more than sixty days nor less than
ten days before the date of such meeting, nor more than sixty days prior to any
other action. A determination of stockholders of record entitled to notice of or
to vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.

Section 6. Beneficial Owners. The Corporation shall be
entitled to recognize the exclusive right of a person registered on its books as
the owner of shares to receive dividends, and to vote as such owner, and to hold
liable for calls and assessments a person registered on its books as the owner
of shares, and shall not be bound to recognize any equitable or other claim to
or interest in such share or shares on the part of any other person, whether or
not it shall have express or other notice thereof, except as otherwise provided
by law.

ARTICLE VI

NOTICES

Section 1. Notices. Whenever written notice is required by
law, the Certificate of Incorporation or these Bylaws, to be given to any
director, member of a committee or stockholder, such notice may be given by
mail, addressed to such director, member of a committee or stockholder, at his
address as it appears on the records of the Corporation, with postage thereon
prepaid, and such notice shall be deemed to be given at the time when the same
shall be deposited

15
<PAGE> 16
in the United States mail. Written notice may also be given personally or by
facsimile, telex, telegram or cable.

Section 2. Waivers of Notice. Whenever any notice is required
by law, the Certificate of Incorporation or these Bylaws to be given to any
director, member of a committee or stockholder, a waiver thereof in writing,
signed by the person or persons entitled to said notice, whether before or after
the time stated therein, shall be deemed equivalent thereto.

ARTICLE VII

GENERAL PROVISIONS

Section 1. Dividends. Dividends upon the capital stock of the
Corporation, subject to the provisions of the Certificate of Incorporation, if
any, may be declared by the Board of Directors at any regular or special
meeting, and may be paid in cash, in property, or in shares of the capital
stock. Before payment of any dividend, there may be set aside out of any funds
of the Corporation available for dividends such sum or sums as the Board of
Directors from time to time, in its absolute discretion, deems proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the Corporation, or for any proper
purpose, and the Board of Directors may modify or abolish any such reserve.

Section 2. Disbursements. All checks or demands for money and
notes of the Corporation shall be signed by such officer or officers or such
other person or persons as the Board of Directors may from time to time
designate.

Section 3. Fiscal Year. The fiscal year of the Corporation
shall be fixed by resolution of the Board of Directors.

Section 4. Corporate Seal. The corporate seal shall have
inscribed thereon the name of the Corporation, the year of its organization, and
the words "Corporate Seal, Delaware".

16
<PAGE> 17
The seal may be used by causing it or a facsimile thereof to be impressed or
affixed or reproduced or otherwise.

ARTICLE VIII

INDEMNIFICATION

Section 1. Power to Indemnify in Actions, Suits or Proceedings
other than those by or in the Right of the Corporation. Subject to Section 3 of
this Article VIII, the Corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation) by
reason of the fact that he is or was a director or officer of the Corporation,
or is or was a director or officer of the Corporation serving at the request of
the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.

Section 2. Power to Indemnify in Actions, Suits or Proceedings
by or in the Right of the Corporation. Subject to Section 3 of this Article
VIII, the Corporation shall indemnify any

17
<PAGE> 18
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
Corporation to procure a judgment in its favor by reason of the fact that he is
or was a director or officer of the Corporation, or is or was a director or
officer of the Corporation serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Corporation; except that no indemnification shall be made
in respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the Corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.

Section 3. Authorization of Indemnification. Any
indemnification under this Article VIII (unless ordered by a court) shall be
made by the Corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee or agent
is proper in the circumstances because he has met the applicable standard of
conduct set forth in Section 1 or Section 2 of this Article VIII, as the case
may be. Such determination shall be made (i) by the Board of Directors by a
majority vote of a quorum consisting of directors who were not parties to the
action, suit or proceeding, or (ii) if such a quorum is not obtainable, or, even
if obtainable a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion, or (iii) by the stockholders. To the extent,
however, that a director officer, employee or

18
<PAGE> 19
agent of the Corporation has been successful on the merits or otherwise in the
defense of any action, suit or proceeding described in Sections 1 and 2 of this
Article VIII, or in the defense of any claim, issue or matter therein, he shall
be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith, without the necessity of
authorization in the specific case.

Section 4. Good Faith Defined. For purposes of any
determination under Section 3 of this Article VIII, a person shall be deemed to
have acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation, or, with respect to any
criminal action or proceeding, to have had no reasonable cause to believe that
his conduct was unlawful, if his action is based on the records or books of
account of the Corporation or another enterprise, or on information supplied to
him by the officers of the Corporation or another enterprise in the course of
their duties, or on the advice of legal counsel for the Corporation or another
enterprise or on information or records given or reports made to the Corporation
or another enterprise by an independent certified public accountant or by an
appraiser or other expert selected with reasonable care by the Corporation or
another enterprise. The term "another enterprise" as used in this Section 4
shall mean any other corporation or any partnership, joint venture, trust,
employee benefit plan or other enterprise of which such person is or was serving
at the request of the Corporation as a director, officer, employee or agent. The
provisions of this Section 4 shall not be deemed to be exclusive or to limit in
any way the circumstances in which a person may be deemed to have met the
applicable standard of conduct set forth in Section 1 or 2 of this Article VIII,
as the case may be.

Section 5. Indemnification by a Court. Notwithstanding any
contrary determination in the specific case under Section 3 of this Article
VIII, and notwithstanding the

19
<PAGE> 20
absence of any determination thereunder, any director, officer, employee or
agent may apply to any court of competent jurisdiction in the State of Delaware
for indemnification to the extent otherwise permissible under Sections 1 and 2
of this Article VIII. The basis of such indemnification by a court shall be a
determination by such court that indemnification of the director, officer,
employee or agent is proper in the circumstances because he has met the
applicable standards of conduct set forth in Section 1 or 2 of this Article
VIII, as the case may be. Neither a contrary determination in the specific case
under Section 3 of this Article VIII nor the absence of any determination
thereunder shall be a defense to such application or create a presumption that
the director, officer, employee or agent seeking indemnification has not met any
applicable standard of conduct. Notice of any application for indemnification
pursuant to this Section 5 shall be given to the Corporation promptly upon the
filing of such application. If successful, in whole or in part, the director,
officer, employee or agent seeking indemnification shall also be entitled to be
paid the expenses of prosecuting such application.

Section 6. Expenses Payable in Advance. Expenses (including
attorneys' fees) incurred by a director or officer in defending any civil,
criminal, administrative or investigative action, suit or proceeding may be paid
by the Corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the Corporation as authorized in this Article
VIII.

Section 7. Nonexclusivity of Indemnification and Advancement
of Expenses. The indemnification and advancement of expenses provided by or
granted pursuant to this Article VIII shall not be deemed exclusive of any other
rights to which an individual seeking indemnification or advancement of expenses
may be entitled under any Bylaw, agreement, contract,

20
<PAGE> 21
vote of stockholders or disinterested directors or pursuant to the direction
(howsoever embodied) of any court of competent jurisdiction or otherwise, both
as to action in his official capacity and as to action in another capacity while
holding such office, it being the policy of the Corporation that indemnification
of the persons specified in Sections 1 and 2 of this Article VIII shall be made
to the fullest extent permitted by law. The provisions of this Article VIII
shall not be deemed to preclude the indemnification of any person who is not
specified in Section 1 or 2 of this Article VIII but whom the Corporation has
the power or obligation to indemnify under the provisions of the General
Corporation Law of the State of Delaware or otherwise.

Section 8. Insurance. The Corporation may purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or is or was a director or officer of the
Corporation serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise against any liability asserted against
him and incurred by him in any such capacity, or arising out of his status as
such, whether or not the Corporation would have the power or the obligation to
indemnify him against such liability under the provisions of this Article VIII.

Section 9. Certain Definitions. For purposes of this Article
VIII, references to "the Corporation" shall include, in addition to the
resulting corporation, any constituent corporation (including any constituent of
a constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, employees or agents, so that any person who is or was a
director, officer, employee or agent of such constituent corporation, or is or
was a director or officer of such constituent corporation serving at the request
of such constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise, shall

21
<PAGE> 22
stand in the same position under the provisions of this Article VIII with
respect to the resulting or surviving corporation as he would have with respect
to such constituent corporation if its separate existence had continued. For
purposes of this Article VIII, references to "fines" shall include any excise
taxes assessed on a person with respect to an employee benefit plan and
references to "serving at the request of the Corporation" shall include any
service as a director, officer, employee or agent of the Corporation which
imposes duties on, or involves services by, such director, officer, employee or
agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner he
reasonable believed to be in the interests of the participants and the
beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interests of the Corporation" as referred to in
this Article VIII.

Section 10. Survival of Indemnification and Advancement of
Expenses. The indemnification and advancement of expenses provided by, or
granted pursuant to, this Article VIII shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such person.

Section 11. Limitation on Indemnification. Notwithstanding
anything contained in this Article VIII to the contrary, except for proceedings
to enforce rights to indemnification (which shall be governed by Section 5
hereof) , the Corporation shall not be obligated to indemnify any director,
officer, employee or agent in connection with a proceeding (or part thereof)
initiated by such person unless such proceeding (or part thereof) was authorized
or consented to by the Board of Directors of the Corporation.

Section 12. Indemnification of Employees and Agents. The
Corporation may, to the extent authorized from time to time by the Board of
Directors, provide rights to indemnification

22
<PAGE> 23
and to the advancement of expenses to employees and agents of the Corporation
similar to those conferred in this Article VIII to directors and officers of the
Corporation.

ARTICLE IX

AMENDMENTS

Section 1. These Bylaws may be altered, amended or repealed,
in whole or in part, or new Bylaws may be adopted by the stockholders or by the
Board of Directors; provided, however, that notice of such alteration,
amendment, repeal or adoption of new Bylaws be contained in the notice of such
meeting of stockholders or Board of Directors, as the case may be. All such
amendments must be approved by either the holders of a majority of the
outstanding capital stock entitled to vote thereon or by a majority of the
entire Board of Directors then in office.

Section 2. Entire Board of Directors. As used in this Article
IX and in these Bylaws generally, the term "entire Board of Directors" means the
total number of directors which the Corporation would have if there were no
vacancies.

<PAGE> 1
EXHIBIT 4.6

FORM OF SUPPLEMENTAL INDENTURE

SUPPLEMENTAL INDENTURE (the "Supplemental Indenture"), dated
as of ________ __, 1999, by and between SPANISH BROADCASTING SYSTEM, INC., a
Delaware corporation (the "Company"), the Guarantors and IBJ WHITEHALL BANK &
TRUST COMPANY, a banking organization organized under the laws of New York, as
trustee (the "Trustee").

WITNESSETH:

WHEREAS, in accordance with Section 8.02 of the Indenture,
relating to the 12 1/2% Senior Notes due 2002, (the "Notes") of the Company,
dated as of June 29, 1994, by and between the Company, the Guarantors and the
Trustee (the "Indenture"), the Trustee, the Guarantors, the Company and the
Holders of more than a majority in principal amount of the Notes outstanding as
of the date hereof desire to amend certain terms of the Indenture as described
below (the "Proposed Amendments"); and

WHEREAS, the Company intends to consummate a series of
reorganization transactions (collectively, the "Reorganization") designed to
simplify its corporate and capital structure, which include among other
transactions: (i) the redesignation of the Company's previously outstanding
shares of Class A Common Stock into shares of Class B Common Stock and the
fifty-to-one stock split of the Company's Class B Common Stock; (ii) an initial
public offering of the Company's Class A Common Stock, par value $.0001 per
share (the "IPO"), as described in the registration statement on Form S-1
originally filed on August 18, 1999 (Registration No. 333-85499), as amended,
with the Securities and Exchange Commission (the "Commission"); (iii) a public
offering by the Company of $235.0 million aggregate principal amount of its
senior subordinated notes due 2009 (the "Debt Offering"), as described in the
registration statement on Form S-1 originally filed on August 18, 1999
(Registration No. 333-85519), as amended, with the Commission; (iv) the use by
the Company of the net proceeds of the IPO to redeem its 14 1/4% Senior
Exchangeable Preferred Stock; and (v) a concurrent tender offer for the
Company's 11% Senior Notes due 2004, Series B (the "11% Notes").

WHEREAS, the Company has solicited (the "Solicitation")
consents from the Holders to the amendments contained in this Supplemental
Indenture and the Company has received consents from Holders of more than a
majority in principal amount of the Notes outstanding as of the date hereof; and

WHEREAS, the Board of Directors of the Company has authorized
this Supplemental Indenture; and

WHEREAS, concurrent with the Solicitation, the Company has
offered to purchase for cash any and all of the outstanding Notes from the
Holders thereof upon the terms and conditions set forth in the Offer to Purchase
and Consent Solicitation Statement dated
<PAGE> 2
September 30, 1999, as amended from time to time (the "Offer"); and

WHEREAS, it is intended that this Supplemental Indenture
become effective upon acceptance for purchase by the Company pursuant to the
Offer of the Notes tendered into the Offer; and

WHEREAS, all things necessary to make this Supplemental
Indenture a valid supplement to the Indenture according to its terms and the
terms of the Indenture have been done:

NOW, THEREFORE, the parties hereto agree as follows:

SECTION 1. Certain Terms Defined in the Indenture. All
capitalized terms used and not otherwise defined herein shall have the meanings
ascribed to them in the Indenture.

SECTION 2. Deletion of Certain Definitions. The following
definitions in Section 1.01 of the Indenture are hereby deleted in their
entirety:

Acquisition Indebtedness

Asset Sale

Asset Sale Proceeds

Attributable Indebtedness

Available Asset Sale Proceeds

Change of Control Offer

Change of Control Payment Date

Change of Control Purchase Price

Consolidated Interest Expense

Consolidated Net Income

Corporate Trust Office

EBITDA

Excess Proceeds Offer

Investments

Lien

Net Income

Offer Period

Offering Memorandum

Permitted Investments

Permitted Liens

Property

Purchase Date

Reinvestment Date

Responsible Officer

Restricted Payment

Sale and Leaseback Transaction

Temporary Cash Investments

Units

2
<PAGE> 3

SECTION 3. Waiver of Application of Covenants. Subject to
Section 8(b) hereof, the application of the covenants contained in the Indenture
is hereby waived to the extent required to effect the Reorganization that is
consummated substantially concurrently with the consummation of the Offer (the
"Waiver").

SECTION 4. Deletion of Certain Covenants. The text of Sections
4.02 (SEC Reports), 4.03 (Waiver of Stay, Extension or Usury Laws), 4.04
(Compliance Certificate), 4.05 (Taxes), 4.06 (Limitation on Additional
Indebtedness), 4.07 (Limitation on Preferred Stock of Restricted Subsidiaries),
4.08 (Limitation on Capital Stock of Subsidiaries), 4.09 (Limitation on
Restricted Payments), 4.10 (Limitations on Certain Asset Sales), 4.11
(Limitations on Transactions with Affiliates), 4.12 (Limitation on Liens), 4.13
(Limitations on Investments), 4.14 (Limitation on Creation of Subsidiaries),
4.15 (Limitation on Sale and Lease-Back Transactions), 4.16 (Payments for
Consent), 4.17 (Corporate Existence), 4.18 (Change of Control) and 4.19
(Maintenance of Office or Agency) of the Indenture is hereby deleted in its
entirety and is hereby replaced in each such Section, with "[Intentionally
Deleted by Amendment]."

SECTION 5. Deletion of Certain Restrictions with Respect to
Consolidations and Mergers. The text of Section 5.01(a)(iii) (Limitations on
Consolidation, Merger, and Sale of Assets) of the Indenture is hereby deleted in
its entirety.

SECTION 6. Deletion of Certain Events of Default. The text of
paragraph (3) of Section 6.01 of the Indenture is hereby deleted in its entirety
and is hereby replaced with "[Intentionally Deleted by Amendment]." Any
reference to the text "or any Restricted Subsidiary" in paragraphs 6.01(4), (5),
(6) and (8) is hereby deleted in its entirety.

SECTION 7. Deletion of Certain Cross-References. Any reference
to Section 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12,
4.13, 4.14, 4.15, 4.16, 4.17, 4.18, 4.19, 5.01(a)(iii) and 6.01(3) in the
Indenture is hereby deleted.

SECTION 8. Effect of Supplemental Indenture. (a) Upon the
execution and delivery of this Supplemental Indenture by the Company, the
Guarantors and the Trustee, the Indenture shall be amended and supplemented in
accordance herewith, and this Supplemental Indenture shall form a part of the
Indenture for all purposes, and every Holder of Securities heretofore or
hereafter authenticated and delivered under the Indenture shall be bound
thereby, as hereby amended and supplemented; provided, however, the Proposed
Amendments, except as described in (b) with respect to the Waiver, shall not
become operative until the Company has notified the Trustee that it has accepted
for payment at least a majority of the outstanding principal amount of the
Securities pursuant to the offer to purchase for cash any and all of the Notes,
(and at such time the Proposed Amendments shall automatically become operative
without the requirement of any further action by or notice to the Company, the
Guarantor Subsidiaries, the Trustee or any Holder of Securities).

(b) The Waiver shall become operative immediately upon
execution and delivery of this Supplemental Indenture by the Company, the
Guarantors and the Trustee.

3
<PAGE> 4
However, if the Offer is terminated or withdrawn or the tendered Notes are not
accepted for payment pursuant to the Offer, the Waiver will cease to be
operative.

SECTION 9. Governing Law. This Supplemental Indenture shall be
governed by the laws of the State of New York.

SECTION 10. Counterparts. This Supplemental Indenture may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument.

[Signature pages to follow]

4
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed as of the date first above written.

SPANISH BROADCASTING SYSTEM, INC.
a Delaware corporation

By: ___________________________
Name:
Title:

SPANISH BROADCASTING SYSTEM, INC.
a New Jersey corporation

By: ___________________________
Name:
Title:

SPANISH BROADCASTING SYSTEM OF
CALIFORNIA, INC.

By: ___________________________
Name:
Title:

SPANISH BROADCASTING SYSTEM OF
FLORIDA, INC.

By: ___________________________
Name:
Title:
<PAGE> 6
SPANISH BROADCASTING SYSTEM
NETWORK, INC.

By: ___________________________
Name:
Title:

SBS PROMOTIONS, INC.

By: ___________________________
Name:
Title:

ALARCON HOLDINGS, INC.

By: ___________________________
Name:
Title:

SBS OF GREATER NEW YORK, INC.

By: ___________________________
Name:
Title:

SPANISH BROADCASTING SYSTEM OF
ILLINOIS, INC.

By: ___________________________
Name:
Title:
<PAGE> 7
SPANISH BROADCASTING SYSTEM OF
GREATER MIAMI, INC.

By: ___________________________
Name:
Title:

SPANISH BROADCASTING SYSTEM OF
SAN ANTONIO, INC.

By: ___________________________
Name:
Title:

SPANISH BROADCASTING SYSTEM OF
PUERTO RICO, INC. a Delaware corporation

By: ___________________________
Name:
Title:

SPANISH BROADCASTING SYSTEM OF
PUERTO RICO, INC. a Puerto Rico corporation

By: ___________________________
Name:
Title:

JUJU MEDIA, INC.

By: ___________________________
Name:
Title:
<PAGE> 8
IBJ WHITEHALL BANK & TRUST COMPANY,
as Trustee

By: ___________________________
Name:
Title:

<PAGE> 1
EXHIBIT 4.8

FORM OF SUPPLEMENTAL INDENTURE

SUPPLEMENTAL INDENTURE (the "Supplemental Indenture"), dated as of
________ __, 1999, by and between SPANISH BROADCASTING SYSTEM, INC., a Delaware
corporation (the "Company"), the Guarantors and IBJ WHITEHALL BANK & TRUST
COMPANY, a banking organization organized under the laws of New York, as trustee
(the "Trustee").

WITNESSETH:

WHEREAS, in accordance with Section 9.02 of the Indenture, relating
to the 11% Senior Notes due 2004, Series B (the "Notes") of the Company, dated
as of March 15, 1997, by and between the Company, the Guarantor Subsidiaries and
the Trustee (the "Indenture"), the Trustee, the Guarantor Subsidiaries, the
Company and the Holders of more than a majority in principal amount of the Notes
outstanding as of the date hereof desire to amend certain terms of the Indenture
as described below (the "Proposed Amendments"); and

WHEREAS, the Company intends to consummate a series of
reorganization transactions (collectively, the "Reorganization") designed to
simplify its corporate and capital structure, which include among other
transactions: (i) the redesignation of the Company's previously outstanding
shares of Class A Common Stock into shares of currently outstanding Class B
Common Stock and the fifty-to-one stock split of the Company's Class B Common
Stock; (ii) an initial public offering of the Company's Class A Common Stock,
par value $.0001 per share (the "IPO"), as described in the registration
statement on Form S-1 originally filed on August 18, 1999 (Registration No.
333-85499), as amended, with the Securities and Exchange Commission (the
"Commission"); (iii) a public offering by the Company of $235.0 million
aggregate principal amount of its senior subordinated notes due 2009 (the "Debt
Offering"), as described in the registration statement on Form S-1 originally
filed on August 18, 1999 (Registration No. 333-85519), as amended, with the
Commission; (iv) the use by the Company of the net proceeds of the IPO to redeem
its 14 1/4% Senior Exchangeable Preferred Stock; and (v) a concurrent tender
offer for the Company's 12 1/2% Senior Notes due 2002 (the "12 1/2% Notes").

WHEREAS, the Company has solicited (the "Solicitation") consents
from the Holders to the amendments contained in this Supplemental Indenture and
the Company has received consents from Holders of more than a majority in
principal amount of the Notes outstanding as of the date hereof; and

WHEREAS, the Board of Directors of the Company has authorized this
Supplemental Indenture; and

WHEREAS, concurrent with the Solicitation, the Company has offered
to purchase for cash any and all of the outstanding Notes from the Holders
thereof upon the terms
<PAGE> 2
and conditions set forth in the Offer to Purchase and Consent Solicitation
Statement dated September 30, 1999, as amended from time to time (the "Offer");
and

WHEREAS, it is intended that this Supplemental Indenture become
effective upon acceptance for purchase by the Company pursuant to the Offer of
the Notes tendered into the Offer; and

WHEREAS, all things necessary to make this Supplemental Indenture a
valid supplement to the Indenture according to its terms and the terms of the
Indenture have been done:

NOW, THEREFORE, the parties hereto agree as follows:

SECTION 1. Certain Terms Defined in the Indenture. All capitalized
terms used and not otherwise defined herein shall have the meanings ascribed to
them in the Indenture.

SECTION 2. Deletion of Certain Definitions. The following
definitions in Section 1.01 of the Indenture are hereby deleted in their
entirety:

Acquisition Indebtedness
Affiliate Transaction
Attributable Debt
Bank Indebtedness
Capitalized Lease Obligations
Certificate of Designation
Consolidated Interest Expense
Consolidated Net Income
Credit Facility
EBITDA
Exchange Debentures
fair market value
FCC
Independent Financial Advisor
Infinity Note
Investments
Net Income
Old Warrants
Permitted Investments
Permitted Liens
Property
Ratio Indebtedness
Redeemable Dividend
Refinancing Indebtedness
Restricted Payment
Sale and Leaseback Transaction

2
<PAGE> 3
Senior Preferred Stock
Temporary Cash Investments
Warrants
Wholly Owned Subsidiary

SECTION 3. Amendment of Certain Definitions. The following
definition in Section 1.01 of the Indenture shall be amended as indicated:

Guarantee. The text of the definition of Guarantee is hereby
restated to read in its entirety as follows:

"Guarantee" means an unconditional guarantee
executed by an Unrestricted Subsidiary.

SECTION 4. Waiver of Application of Covenants. Subject to Section
9(b) hereof, the application of the covenants contained in the Indenture is
hereby waived to the extent required to effect the Reorganization that is
consummated substantially concurrently with the consummation of the Offer (the
"Waiver").

SECTION 5. Deletion of Certain Covenants. The text of Sections 4.03
(Limitation on Additional Indebtedness), 4.04 (Limitation on Restricted
Payments), 4.05 (Corporate Existence), 4.06 (Payment of Taxes and Other Claims),
4.07 (Maintenance of Properties and Insurance), 4.08 (Compliance Certificate;
Notice of Default), 4.09 (Compliance with Laws), 4.10 (SEC Reports), 4.11
(Waiver of Stay, Extension or Usury Laws), 4.13 (Limitation on Investments),
4.14 (Limitation on Preferred Stock of Restricted Subsidiaries), 4.15
(Limitation on Liens), 4.18 (Limitations on Transactions with Affiliates), 4.19
(Limitation on Creation of Subsidiaries), 4.20 (Limitation on Capital Stock of
Restricted Subsidiaries), 4.21 (Lines of Business), 4.22 (Payment of Consents)
and 4.23 (Limitation on Sale and Lease-Back Transactions) of the Indenture is
hereby deleted in its entirety and is hereby replaced, in each such Section,
with "[Intentionally Deleted by Amendment]."

SECTION 6. Deletion of Certain Restrictions with Respect to Mergers
and Consolidations. The text of Sections 5.01(a)(ii) and 5.01(c)(iv)
(Limitations on Mergers and Consolidations) of the Indenture are hereby deleted
in their entirety and replaced with "[Intentionally Deleted by Amendment]."

SECTION 7. Deletion of Certain Events of Default. The text of
paragraphs (3), (4) and (7) of Section 6.01 of the Indenture are hereby deleted
in their entirety and are hereby replaced with "[Intentionally Deleted by
Amendment]." Any reference to the text "or any Restricted Subsidiary" in
paragraphs 6.01(5) and (6) is hereby deleted in its entirety.

SECTION 8. Deletion of Certain Cross-References. Any reference to
Section 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.13, 4.14, 4.15,
4.18, 4.19, 4.20, 4.21, 4.22, 4.23, 5.01(a)(ii), 5.01(c)(iv), 6.01(3), 6.01(4)
and 6.01(7) in the Indenture is hereby deleted.

SECTION 9. Effect of Supplemental Indenture. (a) Upon the execution
and delivery of this Supplemental Indenture by the Company, the Guarantors and
the Trustee, the Indenture shall be amended and supplemented in accordance
herewith, and this Supplemental

3
<PAGE> 4
Indenture shall form a part of the Indenture for all purposes, and every Holder
of Securities heretofore or hereafter authenticated and delivered under the
Indenture shall be bound thereby, as hereby amended and supplement; provided,
however, the Proposed Amendments, except as described in (b) with respect to the
Waiver, shall not become operative until the Company has notified the Trustee
that it has accepted for payment at least a majority of the outstanding
principal amount of the Securities pursuant to the offer to purchase for cash
any and all of the Notes, (and at such time the Proposed Amendments shall
automatically become operative without the requirement of any further action by
or notice to the Company, the Guarantor Subsidiaries, the Trustee or any Holder
of Securities).

(b) The Waiver shall become operative immediately upon execution and
delivery of this Supplemental Indenture by the Company, the Guarantors and the
Trustee. However, if the Offer is terminated or withdrawn or the tendered Notes
are not accepted for payment pursuant to the Offer, the Waiver will cease to be
operative.

SECTION 10. Governing Law. This Supplemental Indenture shall be
governed by the laws of the State of New York.

SECTION 11. Counterparts. This Supplemental Indenture may be signed
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.

[Signature pages to follow]

4
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.

SPANISH BROADCASTING SYSTEM, INC.
a Delaware corporation

By: ___________________________
Name:
Title:

SPANISH BROADCASTING SYSTEM, INC.
a New Jersey corporation

By: ___________________________
Name:
Title:

SPANISH BROADCASTING SYSTEM OF
CALIFORNIA, INC.

By: ___________________________
Name:
Title:

SPANISH BROADCASTING SYSTEM OF
FLORIDA, INC.

By: ___________________________
Name:
Title:

SPANISH BROADCASTING SYSTEM
NETWORK, INC.

By: ___________________________
Name:
Title:

SBS PROMOTIONS, INC.

By: ___________________________
Name:
Title:

5
<PAGE> 6

ALARCON HOLDINGS, INC.

By: ___________________________
Name:
Title:

SBS OF GREATER NEW YORK, INC.

By: ___________________________
Name:
Title:

SPANISH BROADCASTING SYSTEM OF
ILLINOIS, INC.

By: ___________________________
Name:
Title:

SPANISH BROADCASTING SYSTEM OF
GREATER MIAMI, INC.

By: ___________________________
Name:
Title:

SPANISH BROADCASTING SYSTEM OF
SAN ANTONIO, INC.

By: ___________________________
Name:
Title:

6
<PAGE> 7

SPANISH BROADCASTING SYSTEM OF
PUERTO RICO, INC. a Delaware corporation

By: ___________________________
Name:
Title:

SPANISH BROADCASTING SYSTEM OF
PUERTO RICO, INC. a Puerto Rico corporation

By: ___________________________
Name:
Title:

JUJU MEDIA, INC.

By: ___________________________
Name:
Title:

IBJ WHITEHALL BANK & TRUST COMPANY,
as Trustee

By: ___________________________
Name:
Title:

<PAGE> 1
EXHIBIT 10.33

STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT (this "Agreement") dated as of April 26,
1999, among JuJu Media, Inc., a New York corporation (the "Company") each of the
individuals listed under the heading "Sellers" on the signature pages hereto
(each, a "Seller," and collectively, the "Sellers"), and Spanish Broadcasting
System, Inc., a Delaware corporation or its wholly owned subsidiary ("Buyer").

RECITALS:

A. The Sellers are the record owners of 200 shares of common stock of the
Company which constitute all the issued and outstanding shares of capital stock
of the Company.

B. The Sellers desire to sell to Buyer, and Buyer desires to purchase from
the Sellers, an aggregate of 160 shares of Common Stock of the Company, which
constitutes eighty percent (80%) of the issued and outstanding capital stock of
Company (the "Purchased Shares") upon the terms set forth in this Agreement.

NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein and
subject to the terms and conditions set forth herein, the Company, the Sellers
and Buyer hereby agree as follows:

ARTICLE I

DEFINITIONS

For purposes of this Agreement:

"ACTIONS" shall mean any action, suit or legal, administrative or arbitral
proceeding or investigation before any Governmental Authority.

"AFFILIATE" shall mean with respect to any Person, any Person which
directly or indirectly controls, is controlled by or is under common control
with such Person.

"AGREEMENT" shall have the meaning set forth in the preamble to this
Agreement.

"BREACH" shall mean a Breach of a representation, warranty, covenant,
obligation or other provision of this Agreement or any instrument delivered
pursuant to this Agreement will be deemed to have occurred if there is or has
been (a) any inaccuracy in or breach of, or any failure to perform or comply
with, such representation, warranty, covenant, obligation, or other provision,
or (b) any claim (by any Person) or other occurrence or circumstance that is or
was inconsistent with such representation, warranty, covenant, obligation or
other provision, and the term "Breach" means any such inaccuracy, breach,
failure, claim, occurrence or circumstance.
<PAGE> 2
"BUSINESS DAY" means any day other than a Saturday, Sunday or a day on
which banks in New York are authorized or obligated by Law or executive order to
close.

"BUYER" shall have the meaning set forth in the preamble to this
Agreement.

"BUYER'S KNOWLEDGE" shall have the meaning set forth in Section 6.4(a).

"CLOSING" shall have the meaning set forth in Section 3.1.

"CLOSING DATE" shall have the meaning set forth in Section 3.1.

"CLOSING DATE BALANCE SHEET" shall have the meaning set forth in Section
2.3(b).

"CLOSING DATE INDEBTEDNESS" shall have the meaning set forth in Section
2.2.

"CLOSING LIABILITIES" shall have the meaning set forth in Section 2.3(e).

"CLOSING NET QUICK" shall have the meaning set forth in Section 2.3(a).

"CODE" shall mean the Internal Revenue Code of 1986, as amended.

"COMMON STOCK" shall have the meaning set forth in Section 4.3.

"COMPANY" shall have the meaning set forth in the preamble to this
Agreement.

"COMPANY'S KNOWLEDGE" shall have the meaning set forth in Section 4.3(a).

"COMPANY FINANCIAL STATEMENTS" shall have the meaning set forth in Section
4.5.

"CONFIDENTIALITY AGREEMENT" shall have the meaning set forth in Section
7.2(b).

"CONSENT" shall mean any consent, approval, authorization, qualification,
waiver, registration or notification required to be obtained from, filed with or
delivered to a Governmental Authority or any other Person in connection with the
consummation of the transactions provided for herein.

"CONTRACTS" means all contracts, leases, licenses, and other agreements
(including leases for personal or real property and employment agreements),
written or oral (including any amendments and other modifications thereto), to
which the Company or any Subsidiary is a party and which relate to or affect the
business or operations of the Company or any Subsidiary, and (i) which are in
effect on the date of this Agreement or (ii) which are entered into by the
Company or any Subsidiary between the date of this Agreement and the Closing
Date.

"CURRENT ASSETS" shall mean with respect to the Company, at the date of
measurement, the sum as at such date of all accounts receivable (including,
without limitation, all receivables related to advertising time and coop
reimbursements and other miscellaneous receivables arising in the

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<PAGE> 3
ordinary course of business), net of a reasonable loss reserve and allowance for
doubtful accounts related to such accounts receivable, plus all prepaid expenses
and other current assets other than cash, but excluding any deferred tax assets,
all to be determined in accordance with GAAP.

"CURRENT LIABILITIES" shall mean with respect to the Company, at the date
of measurement, the sum as at such date of all accounts payable plus all accrued
liabilities and expenses (excluding liability for accrued vacation and any
indebtedness of the Company), plus all agency or national representation
commissions, plus all accrued volume discounts payable, plus all sales
commissions attributable to the accounts receivable included in Current Assets,
but excluding any deferred tax liabilities, all to be determined in accordance
with GAAP.

"DAMAGES" shall have the meaning set forth in Section 9.2.

"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.

"GAAP" shall mean United States generally accepted accounting principles
in effect on the date hereof, applied on a consistent basis.

"GOVERNMENTAL AUTHORITY" shall mean any government or political
subdivision, whether federal, state, local or foreign, or any agency or
instrumentality of any such government or political subdivision, or any federal,
state, local, or foreign court or arbitrator.

"INDEBTEDNESS" means any (i) indebtedness for borrowed money of the
Company reflected in any promissory note, indenture, bond, mortgage, credit
agreement or other similar instrument, including any and all accrued but unpaid
interest thereon as well as any and all costs, fees and charges required in
connection with the payment or prepayment thereof, but excluding any broadcast
rights payables and the Reserve Square Debt, and (ii) liability for the payment
of money relating to a lease that is required to be classified as a capitalized
lease obligation in accordance with GAAP.

"INDEPENDENT ACCOUNTANTS" shall have the meaning set forth in Section
2.3(d).

"INDEMNIFIED PERSONS" shall have the meaning set forth in Section 9.2.

"INVESTMENTS" shall mean any equity interest, directly or indirectly, in
any other Person in excess of 5% of the total equity ownership of such Person.

"LAWS" shall mean any law, statute, code, ordinance, regulation or rule of
any Governmental Authority.

"LIENS" shall mean any mortgage, lien, Option, pledge, adverse claim,
interest charge or other similar encumbrance.

"MATERIAL ADVERSE EFFECT" shall have the meaning set forth in Section 4.1.

"MATERIAL CONTRACTS" shall have the meaning set forth in Section 4.14.

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<PAGE> 4
"MATERIAL EQUIPMENT" shall have the meaning as set forth in Section 4.11.

"NET QUICK" shall mean, as of the date of measurement, the amount by which
the Current Assets exceeds the Current Liabilities.

"NOTICE OF OBJECTION" shall have the meaning set forth in Section 2.3(c).

"OBJECTION PERIOD" shall have the meaning set forth in Section 2.3(c).

"OPTION" means any option, warrant, call, convertible or exchangeable
security, subscription, preemptive right, voting trust or agreement, any
agreement restricting sale or transfer, or other agreement or right of a similar
nature.

"ORDERS" shall mean any order, judgment, ruling, injunction, assessment,
award, decree or writ of any Governmental Authority.

"OUTSIDE DATE" shall have the meaning set forth in Section 10.1(b).

"PAYMENT DATE" shall have the meaning set forth in Section 2.3(e).

"PERMITS" shall mean any license, permit, authorization, certificate of
authority, grant, approval, franchise, waiver, Consent, qualification or similar
document or authority which has been, or is required to be, issued or granted by
any Governmental Authority.

"PERSON" shall mean any individual, sole proprietorship, partnership,
corporation, limited liability company, joint venture, unincorporated society or
association, trust or other entity or Governmental Authority.

"PLANS" shall have the meaning set forth in Section 4.13.

"PROCEEDING" shall mean any action, arbitration, audit, hearing,
investigation, litigation or suit (whether civil, criminal, administrative,
investigative or informal) commenced, brought, conducted, or heard by or before
or otherwise involving any Government Authority or arbitrator.

"PROMISSORY NOTE" shall have the meaning set forth in Section 2.2(a).

"PURCHASE PRICE" shall have the meaning set forth in Section 2.2.

"PURCHASED SHARES" shall have the meaning set forth in recital B of this
Agreement.

"REAL PROPERTY" means all of the Company's real property and interests in
real property, leaseholds and subleaseholds, purchase options, easements,
licenses, rights to access, right of way, all buildings and other improvements
thereon (including transmission towers and related fixtures), and other real
property interests used in the business or operations of the Company, together
with any additions thereto between the date of this Agreement and the Closing
Date.

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<PAGE> 5
"REGULATORY AUTHORIZATIONS" shall have the meaning set forth in Section
7.4(b).

"REMAINING SHARES" shall mean the issued and outstanding shares of common
stock of the Company which (i) constitute 20% of the issued and outstanding
capital stock of the Company; (ii) are not being sold to Buyer pursuant to this
Agreement, and (iii) are subject to the Right of First Refusal and the Voting
Trust Agreement.

"RIGHT OF FIRST REFUSAL" shall have the meaning set forth in Section
2.2(c).

"SELLERS" shall have the meaning set forth in the preamble to this
Agreement.

"SHARES" shall have the meaning set forth in Section 4.3 of this
Agreement.

"STRADDLE PERIOD" shall have the meaning as set forth in Section 7.6(c).

"TAX" and/or "TAXES" shall have the meaning set forth in Section 4.7 and
Section 9.

"VOTING TRUST" shall have the meaning set forth in Section 2.2(b).

"VOTING TRUST AGREEMENT" shall have the meaning set forth in Section
2.2(b).

ARTICLE II

SALE AND PURCHASE OF SHARES

2.1 SALE AND PURCHASE OF SHARES. At the Closing (a) the Sellers shall
sell, assign and transfer the Purchased Shares to Buyer, (b) each of the Sellers
shall deliver to Buyer one or more stock certificates (with any required
transfer stamps attached) representing the Purchased Shares owned by that Seller
with duly executed stock powers attached reasonably satisfactory to Buyer in
proper form for transfer, (c) Seller shall transfer the Purchased Shares free
and clear of all Liens, and (d) Buyer shall pay and deliver to the Sellers the
Purchase Price (as defined in Section 2.2. hereof) in accordance with Schedule
2.2 provided to Buyer on or prior to the Closing.

2.2 PURCHASE PRICE. (a) In full consideration for the Purchased Shares and
subject to adjustments pursuant to Section 2.3, Buyer shall (i) pay to the
Sellers at the Closing by bank wire transfer of immediately available funds an
aggregate amount in cash equal to Two Million Dollars ($2,000,000.00) less the
aggregate amount of the indebtedness of the Company outstanding as of the
Closing Date ("Closing Date Indebtedness"); (ii) repay, or cause the Company to
repay at the Closing, the Closing Date Indebtedness, to the Persons entitled
thereto; and (iii) execute and deliver to each of the Sellers a Promissory Note
in the form attached hereto as Exhibit A in the amounts set forth on Schedule
2.2 hereof.

(b) Company and Sellers shall place the Remaining Shares in a Voting
Trust pursuant to the Voting Trust Agreement attached hereto as Exhibit B and
dated as of the date of Closing.

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<PAGE> 6
(c) Company and Sellers shall deliver the Right of First Refusal
Agreement attached hereto as Exhibit C and dated as of the date of Closing.

2.3 PURCHASE PRICE ADJUSTMENT. (a) The "Closing Net Quick" shall mean the
Net Quick of the Company as of the close of business on the Closing Date as
reflected on the Closing Date Balance Sheet (as defined in Section 2.3(b)).

(b) Within forty-five (45) calendar days of the Closing Date, Buyer
shall deliver to the Sellers (i) a balance sheet of the Company as of the close
of business on the Closing Date, compiled, if necessary, by an independent
accounting firm selected by the parties (the "Closing Date Balance Sheet"),
prepared in accordance with GAAP and (ii) a calculation of the Closing Net Quick
based on the Closing Date Balance Sheet. In connection with the Seller's review
of the Closing Date Balance Sheet and Buyer's calculation of the Closing Net
Quick, Buyer shall, promptly upon request, provide to the Sellers and their
agents access to the work papers of Buyer's accountants (both internal and
external) relating to the Closing Date Balance Sheet and Buyer's calculation of
the Closing Net Quick and any and all documentation related thereto.

(c) Unless the Sellers give Buyer written notice of their objection
to Buyer's calculation of the Closing Net Quick, which notice shall include the
basis of Sellers' objection in reasonable detail ("Notice of Objection"), within
thirty (30) calendar days after receiving the Closing Date Balance Sheet and
Buyer's calculation of the Closing Net Quick (the "Objection Period"), the
Closing Date Balance Sheet and Buyer's calculation of the Closing Net Quick
shall be final, conclusive and binding on the parties to this Agreement.

(d) If Sellers deliver a Notice of Objection within the Objection
Period, Buyer and the Sellers shall use good faith efforts to resolve all
disputes regarding Sellers' objections set forth in the Notice of Objection. If
Buyer and the Sellers are not able to resolve all disputes regarding the
Sellers' objections set forth in the Notice of Objection within thirty (30)
calendar days after the Sellers delivery of the Notice of Objection, the
remaining disputed items shall be submitted for final resolution to a nationally
recognized accounting firm selected by mutual agreement of Buyer and the Sellers
(the "Independent Accountants") at Buyer's sole cost and expense. After offering
the Sellers and Sellers' representatives and Buyer and Buyers' representatives
the opportunity to present their positions as to the disputed items which
opportunity shall not extend for more than 10 calendar days after the
Independent Accountants have been selected, the Independent Accountants shall
resolve all disputed items within thirty (30) calendar days after the Sellers
and Buyer have presented their positions as to the dispute items. Such
resolution shall be final, conclusive and binding upon the parties to this
Agreement and shall be reflected if any necessary revisions to the Closing Date
Balance Sheet and Buyer's calculation of the Closing Net Quick. Notwithstanding
anything in this Agreement to the contrary, the scope of the Independent
Accountants' review of any dispute between Buyer and the Sellers regarding the
Closing Date Balance Sheet or the calculation of Closing Net Quick pursuant to
this Section 2.3(d) shall be limited solely to the resolution of the Sellers'
objections set forth in the Notice of Objection and Buyer shall have no right to
change, revise or otherwise modify the Closing Date Balance Sheet except as
agreed to in writing by the Sellers or as required by the Independent
Accountants, and Sellers shall have no

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<PAGE> 7
right to change, revise or otherwise modify the Notice of Objection, except as
agreed in writing by Buyer.

(e) Once the Closing Net Quick is finally determined pursuant to
this Section 2.3, an adjustment will be made as follows: (i) if all liabilities
of the Company as of the date of Closing ("Closing Liabilities") exceed the
Closing Net Quick amount, Sellers shall pay to Buyer an amount equal to the
difference between the Closing Net Quick and the Closing Liabilities. "Payment
Date" shall mean: (i) if no Notice of Objection is timely delivered by the
Sellers to Buyer, three Business Days after the earlier of (A) the expiration of
the Objection Period and (B) the date of delivery by the Sellers to Buyer of a
Notice of Objection that Buyer's calculation of the Closing Net Quick will be
accepted without objection; or (ii) if a Notice of Objection is timely delivered
by the Sellers to Buyer, three Business Days after the date all disputed items
are finally resolved pursuant to Section 2.3(d).

(f) The amount, if any, payable to the Buyer pursuant to this
Section 2.3, as ultimately determined in accordance with this Section 2.3, shall
bear interest from the Closing Date until the date of payment at the rate of six
percent (6%) per annum.

ARTICLE III

CLOSING AND DELIVERIES

3.1 CLOSING. The closing of the transactions contemplated hereby (the
"Closing") shall take place at the offices of Kaye, Scholer, Fierman, Hays &
Handler, LLP, 425 Park Avenue, New York, New York 10022, on the third Business
Day following the satisfaction or waiver of each of the conditions set forth in
Article VIII (other than those conditions that are to be satisfied at the
Closing), or on such other date or at such other time and place as the parties
shall mutually agree in writing (the "Closing Date"). All proceedings to be
taken and all documents to be executed and delivered by all parties at the
Closing shall be deemed to have been taken and executed simultaneously and no
proceedings shall be deemed to have been taken nor documents executed or
delivered until all have been taken, executed and delivered.

3.2. DELIVERIES BY THE SELLERS. At the Closing, the Sellers shall deliver
or cause to be delivered to Buyer the following items:

(a) One or more certificates, representing the Purchased Shares
accompanied by duly executed stock powers in proper form for transfer;

(b) The organizational documents of the Company certified as of the
most recent practicable date by the Secretary of State or the comparable
Governmental Authority of the jurisdiction of its organization;

(c) A Certificate of the Secretary of State or comparable
Governmental Authority of the jurisdiction of its organization as to the good
standing as of the most recent practicable date of the Company in such
jurisdiction and a certificate of good standing as of the most recent

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<PAGE> 8
practicable date from the appropriate Governmental Authority in each state where
the Company is qualified to do business;

(d) A certificate of the Secretary of the Company certifying as to
the bylaws of the Company and as to the resolutions of the Company authorizing
this Agreement and the transactions contemplated hereby;

(e) A certificate from an officer of the Company to the effect that
the conditions set forth in Sections 8.2(a) and (b) have been satisfied;

(f) The resignation of Tony Slevira and Judith Eve Faber as officers
of the Company and each of the members of the Board of Directors of the Company,
each effective upon Closing;

(g) A certificate of the Treasurer of the Company certifying as to
the aggregate amount of Closing Date Indebtedness, together with payoff letters
setting forth in reasonable detail the payoff amounts for all Closing Date
Indebtedness to be repaid in accordance with Section 2.2;

(h) The executed Voting Trust Agreement in the form attached hereto
as Exhibit B; and

(i) The executed Right of First Refusal Agreement in the form
attached hereto as Exhibit C.

3.3. DELIVERIES BY BUYER. At the Closing, Buyer shall deliver or cause to
be delivered to the Sellers the following items:

(a) The Purchase Price, paid by wire transfer of immediately
available funds in accordance with Section 2.2.;

(b) A certificate of an officer of Buyer to the effect that the
conditions set forth in Sections 8.1(a) and (b) have been satisfied;

(d) Employment Agreements between the Company and Juan Estaban
Rodriguez and Judy Faber and a Consulting Agreement between the Company and Tony
Slevira in substantially the form attached hereto as Exhibit D hereof.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to Buyer as of the date of this
Agreement as follows:

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<PAGE> 9
4.1 ORGANIZATION AND STANDING. The Company is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation. The Company is duly qualified to do business, and
in good standing, in each jurisdiction in which the character of the properties
owned or leased by it or in which the conduct of its business requires it to be
so qualified, except where the failure to be so qualified or to be in good
standing would not have a Material Adverse Effect on the Company. For purposes
of this Agreement, the term "Material Adverse Effect" means, with respect to the
Company or Buyer, a material adverse effect on the business, assets, liabilities
or financial condition of such party taken as a whole.

4.2. AUTHORIZATIONS, VALIDITY AND EFFECT. The Company has the requisite
corporate power and authority to execute and deliver this Agreement and all
agreements and documents contemplated hereby to be executed and delivered by it,
and to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and such other agreements and
documents, and the consummation of the transactions contemplated herein and
therein, have been duly and validly authorized by all necessary corporate action
in respect thereof on the part of the Company. This Agreement has been duly and
validly executed and delivered to the Company and represents the legal, valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as limited by (a) applicable bankruptcy
reorganization, insolvency, moratorium or other similar laws affecting the
enforcement of creditors rights generally from time to time in effect and (b)
the availability of equitable remedies (regardless of whether enforceability is
considered in a proceeding at law or in equity).

4.3 CAPITALIZATION. The authorized capital stock of the Company consists
of 200 shares of Common Stock, no par value (the "Shares"), of which 200 shares
are issued and outstanding. All of the issued and outstanding Shares are duly
and validly issued and outstanding and are fully paid and nonassessable. The
Shares have not been issued in violation of, and are not subject to, and there
are no outstanding Options relating to the Shares. Except as set forth in
Schedule 4.3, there are no authorized or outstanding Options under which the
Company may be obligated to issue or sell any shares of capital stock of any
other securities or equity interests in the Company. The Shares represent the
only issued and outstanding shares of capital stock of the Company. Except as
set forth in Schedule 4.3, there are no agreements, commitments or contracts
relating to the issuance, sale or transfer of any equity securities or other
securities of the Company.

4.4 NO CONFLICT; REQUIRED FILINGS AND CONSENTS. Neither the execution and
delivery of this Agreement by the Company, nor the consummation by the Company
of the transactions contemplated herein, nor compliance by the Company with any
of the provisions hereof, will (i) conflict with or result in a breach of any
provision of the certificate of incorporation or bylaws of the Company, or (ii)
except as set forth in Schedule 4.4, constitute or result in the breach of any
term, condition or provision of, or constitute a default under, or give rise to
any right of termination, cancellation or acceleration with respect to, or
result in the creation or imposition of any Lien upon any property or assets of
the Company, pursuant to any note, bond, mortgage, indenture, license,
agreement, lease or other instrument or obligation to which Company is a party
or by which Company or assets may be subject, and to the actual knowledge of
Juan Estaban Rodriguez, Judy Faber and Tony Slevira (the "Company's Knowledge"),
violate any Order or Law applicable to the Company or any of its respective
properties or assets.

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<PAGE> 10
4.5 FINANCIAL STATEMENTS. The compiled balance sheet of the Company as of
December 31, 1998 and the related compiled statements of operations,
shareholders' equity and cash flows for the period ended December 31, 1998 (the
"Company Financial Statements"), all of which have been delivered to Buyer,
fairly present the financial position and the results of operations and cash
flows of the Company as of the date and for the period indicated.

4.6 NO UNDISCLOSED LIABILITIES. The Company has no liabilities or
obligations of any nature (whether absolute, accrued, contingent or otherwise)
that are not fully reflected or reserved against in the Company Financial
Statements, except for (a) liabilities and obligations identified in Schedule
4.6 and (b) liabilities and obligations incurred in the ordinary course of
business and consistent with past business practice since the date of the
Company Financial Statements.

4.7 TAXES. The Company has filed extensions for all federal and state tax
returns for 1998 and has made adequate provision for the payment of all taxes,
if any, that may be shown on such returns to be owed by it, including those with
respect to income, withholding, social security, unemployment, workers
compensation, franchise, ad valorem, premium, excise and sales taxes and any
interest and penalties thereon ("Taxes"). Except as set forth on Schedule 4.7,
the Company is not a party to any pending Action, nor, to the Company's
Knowledge, is any such Action threatened by any Governmental Authority for the
assessment or collection of taxes, interest, penalties or deficiencies that
would reasonably be expected to have a Material Adverse Effect on the Company.

4.8 PROPERTIES. Except as disclosed or reserved against in the Company
Financial Statements, the Company has good and valid title to all of the
properties and assets, tangible or intangible, reflected in the Company
Financial Statements as being owned by the Company as of the dates thereof, free
and clear of all Liens except such imperfections or irregularities of title,
Liens or defaults that are publicly disclosed or do not affect the use thereof
in any material respect and statutory Liens security payments not yet due.

4.9 REAL PROPERTY. Company does not own nor does the Company have any
interest in Real Property.

4.10 LEASES. Company does not have any vehicle leases or subleases nor
lease or subleases pursuant to which the Company leases personal property.

4.11 PERSONAL PROPERTY. Schedule 4.11 specifically identifies as such and
contains a complete description of all of the Company's machinery, equipment and
other tangible personal property which are used in the operation of the
Company's business (collectively, the "Material Equipment").

4.12 COMPLIANCE WITH LAWS. Except as set forth in Schedule 4.12 of the
Company.

(i) is in material compliance with all Laws and Orders applicable to
its business or employees conducting its business; and

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(ii) has received no notification or communication from any
Governmental Authority (A) asserting that the Company is not in compliance with
any Law or (B) threatening to revoke any Permit of any Governmental Authority.

4.13 EMPLOYEE BENEFIT PLANS. Company has no "Employee Benefit Plans," as
described under Section 3(3) of ERISA, or retirement, pension, profit-sharing,
thrift, savings, target benefit, cash or deferred, multiple employer,
multiemployer or other similar plan or program, a "phantom stock" or similar
arrangement, or other program providing payment or reimbursement for or of
medical, dental or vision care, psychiatric counseling, or vacation, sick,
disability or severance pay, or other "fringe benefit" plan or welfare plan
arrangement.

4.14 MATERIAL CONTRACTS. Set forth in Schedule 4.14 is a list, as of the
date hereof, of the following agreements (the "Material Contracts"):

(a) Each partnership or joint venture agreement to which the Company
is a party;

(b) Each agreement limiting the right of the Company to engage in or
compete with any Person in any business or in any geographical area;

(c) Each agreement or other arrangement of or involving the Company
with respect to indebtedness for money borrowed, including letters of credit
guaranties, indentures, swaps and similar agreements;

(d) Each management, consulting, severance or similar agreements,
and each employment agreement to which the Company is a party;

(e) Each collective bargaining agreement to which the Company is a
party;

(f) Each other Contract that is material to the Company.

Each of the Material Contracts is in full force and effect and is a legal, valid
and binding contract or agreement, and to the Company's knowledge there is no
default or breach or any event that with the giving of notice or lapse of time
or both would result in a material default or breach by the Company or, to the
Company's Knowledge, any other party, in the timely performance of any
obligation to be performed or paid thereunder or any other material provision
thereof, that, individually or in the aggregate, would have a Material Adverse
Effect on the Company.

4.15 LEGAL PROCEEDINGS. As of the date of this Agreement, except as set
forth in Schedule 4.15, there are no Actions instituted or pending, or to the
Company's Knowledge, threatened, against the Company, or against any property,
asset, interest or right of Company. The Company is not subject to any Order
other than as set forth in Schedule 4.15.

4.16 NO BROKERS. No broker, finder or similar agent has been employed by
or on behalf of the Sellers or the Company, and no Person with which the Sellers
or the Company has had any dealings or communications of any kind is entitled to
any brokerage commission, finder's fee or any similar compensation in connection
with this Agreement or the transaction contemplated hereby.

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The Sellers shall indemnify the Buyer and hold Buyer harmless from and against
any and all claims, demands, causes of action , losses, damages, liabilities,
costs and expenses (including, without limitation, attorneys' fees and
disbursements) suffered or incurred by Buyer arising out of or in connection
with a breach by the Company of the representation contained in this Section
4.13.

4.17 TRADEMARKS, SERVICE MARKS, TRADE NAMES, COPYRIGHTS AND DATA
PROCESSING SYSTEMS. All trademarks, service marks, trade names and copyrights
and other registrable or licensed intellectual property used by the Company in
the conduct of its business is described in Schedule 4.17. Except as set forth
in Schedule 4.17, the Company has either (i) the right to use or (ii) a valid
ownership interest in each of such trademarks, service marks, trade names,
copyrights and other registrable or licensed intellectual property identified in
Schedule 4.17. The Company has no Knowledge of the infringement by any Person of
any such trademark, service mark, trade name or copyright. Except as set forth
in Schedule 4.17, all of such trademarks, service marks, trade names and
copyrights that have been registered with the United States Patent and Trademark
Office, the United States Copyrights Office, or the patent, copyright, trademark
or related office of subdivision of any state are valid and enforceable and are
currently in material compliance with all formal legal requirements (including
the timely post registration filing of affidavits of use and in consideration
and renewal applications).

4.18 INSURANCE. Schedule 4.18 sets forth all policies of insurance
covering the Company and its business and such policies are in full force and
effect.

4.19 PERSONNEL.

(a) Employees and Compensation. Schedule 4.19 contains a true and
complete list of all employees of the Company, their job titles and current
salary.

(b) Labor Relations. Except as set forth in Schedule 4.14, the
Company is not a party to or subject to any collective bargaining agreements.
Except as set forth in Schedule 4.19, the Company has complied in all material
respects with all Laws relating to the employment of labor, including those
related to wages, hours, collective bargaining, occupational safety,
discrimination, and the payment of social security and other payroll related
taxes and it has not received any written notice alleging that it has failed to
comply in any material respect with any such Laws. As of the date hereof, except
as set forth in Schedule 4.14, no labor union or other collective bargaining
unit represents, or to the Company's Knowledge, claims to represent any of its
or any Subsidiary's employees. As of the date hereof except as set forth in
Schedule 4.19, there is no union campaign being conducted to solicit cards from
employees to authorize a union to request a National Labor Relations Board
certification election with respect to the Company's employees.

4.20 CONDUCT OF BUSINESS IN ORDINARY COURSE. Except for the transactions
contemplated hereby, since December 31, 1998, the Company has conducted its
business and operations in the ordinary course of business consistent with past
practices in all material respects and has not:

(a) made any sale, assignment, lease, or other transfer of any of
its properties other than obsolete assets no longer used in the operation of its
business or other assets sold or

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<PAGE> 13
disposed of in the normal and usual course of business with suitable replacement
being obtained thereof;

(b) canceled any debts owed to or claims held by the Company, except
in the normal and usual course of business;

(c) suffered any material write-down of the value of any assets or
any material write-off as uncollectible of any accounts receivable; or

(d) suffered any Material Adverse Effect on the Company.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF SELLERS

Each Seller, severally but not jointly, represents and warrants to Buyer
as of the date of the Agreement as follows:

5.1 AUTHORITY. Such Seller has all requisite power and authority to enter
into and perform its obligations under this Agreement and to consummate the
transactions contemplated herein, and this Agreement has been duly executed and
delivered by such Seller pursuant to all necessary authorization and is the
legal, valid and binding obligations of such Seller enforceable against such
Seller in accordance with its terms, except as limited by (i) applicable
bankruptcy, reorganization, insolvency, moratorium or other similar laws
affecting the enforcement of creditors rights generally from time to time in
effect and (ii) the availability of equitable remedies (regardless of whether
enforceability is considered in a proceeding at law or in equity).

5.2 TITLE. Each of the Sellers (i) is the record and beneficial owner of
all of the Purchased Shares set forth opposite his, her or its name on Schedule
5.2; (ii) has full power, right and authority, and any approval required by Law,
to make and enter into this Agreement and to sell assign, transfer and deliver
the Purchased Shares and the Remaining Shares to Buyer, and (iii) has good and
valid title to the Purchased Shares and the Remaining Shares set forth opposite
his, her or its name on Schedule 5.2 free and clear of all Liens and Options
(other than Liens which shall be released at the Closing upon repayment of the
Closing Date Indebtedness). Upon the consummation of the transactions
contemplated by this Agreement in accordance with the terms hereof, Buyer shall
acquire good and marketable title to the Purchased Shares, free and clear of all
Liens.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to the Company and the Sellers as of the
date of this Agreement as follows:

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<PAGE> 14
6.1 INVESTMENT INTENT. The Shares are being purchased for its own account
and not with the view to, or for resale in connection with, any distribution or
public offering thereof within the meaning of the Securities Act of 1933.

6.2 ORGANIZATION AND STANDING. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and has the requisite corporate power and authority to own,
operate and lease its properties and to carry on its business as presently being
conducted.

6.3 AUTHORIZATION, VALIDITY AND EFFECT. Buyer has the requisite corporate
power and authority to execute and deliver this Agreement and all agreements and
documents contemplated hereby to be executed and delivered by it, and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and such other agreements and documents, and the
consummation of the transactions contemplated herein and therein, have been duly
and validly authorized by all necessary corporate action in respect thereof on
the part of Buyer. This Agreement has been duly and validly executed and
delivered by Buyer and represents the legal, valid and binding obligation of
Buyer, enforceable against Buyer in accordance with its terms except as limited
by (i) applicable bankruptcy, reorganization, insolvency, moratorium or other
similar laws affecting the enforcement of creditors' rights generally from time
to time in effect and (ii) the availability of equitable remedies (regardless of
whether enforceability is considered in a proceeding at law or in equity).

6.4 NO CONFLICT; REQUIRED FILINGS AND CONSENTS. (a) Neither the execution
and delivery of this Agreement by Buyer, nor the consummation by Buyer of the
transactions contemplated herein, nor compliance by Buyer with any of the
provisions hereof, will (i) conflict with or result in a breach of any provision
of the articles of incorporation or by-laws or equivalent organizational
documents of Buyer, (ii) constitute or result in the breach of any term,
condition or provision of, or constitute a default under, or give rise to any
right of termination, cancellation or acceleration with respect to, or result in
the creation or imposition of any Lien upon, any property or assets of Buyer or,
pursuant to any note, bond, mortgage, indenture, license, agreement, lease or
other instrument or obligation to which it is a party or by which it or any of
its properties or assets may be subject, and that would, in any such event, have
a Material Adverse Effect on Buyer, or (iii) violate any Order or law applicable
to Buyer or any of its properties or assets.

(b) No notice to or filing with, authorization of, or Consent of any
Governmental Authority is necessary for the consummation by Buyer of the
transactions contemplated in this Agreement.

6.5 LEGAL PROCEEDINGS. There are no Actions instituted or pending, or to
Buyer's Knowledge threatened, against Buyer, or against any of its properties,
assets, interests or rights that would have either individually or in the
aggregate, a Material Adverse Effect on Buyer if adversely decided. Buyer is not
subject to any Order that would have a Material Adverse Effect on Buyer.

6.6 INTENTIONALLY DELETED.

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<PAGE> 15
6.7 NO BROKERS. No broker, finder or similar agent has been employed by or
on behalf of Buyer, and no Person with which Buyer has had any dealings or
communications of any kind is entitled to any brokerage commission, finder's fee
or any similar compensation in connection with this Agreement or the
transactions contemplated hereby. Buyer shall indemnify the Sellers and the
Company and hold the Sellers and the Company harmless from and against any and
all claims, demands, causes of action, losses, damages, liabilities, costs and
expenses (including without limitation, attorneys' fees and disbursements)
suffered or incurred by the Seller arising out of or in connection with a breach
by Buyer of the representation contained in this Section 6.7.

ARTICLE VII

COVENANTS AND AGREEMENTS

7.1 INTERIM OPERATIONS OF THE COMPANY. (a) Prior to the Closing Date,
Sellers shall not nor shall they permit the Company to:

(i) grant any increase in compensation or benefits to its employees
or to its officers, except for increases which do not exceed in the aggregate
the amount set forth in the Company's budget for the then current year with
respect to such increases; pay any bonus compensation except in the ordinary
course consistent with past practice or in accordance with the provisions of any
applicable program or plan adopted by the Board of Directors of the Company
prior to the date hereof; enter into or amend the terms of any severance
agreements with its officers (unless such change is required by applicable Law);
provided, however, that nothing in this Section 7.1(a)(i) shall prevent the
payment or other performance of any award or grant made prior to the date hereof
and disclosed in the schedules hereto or pursuant to this Agreement;

(ii) hire or terminate any employee who is a department head or
whose salary is $20,000 or greater, amend any existing employment contract
between the Company and any person having a salary thereunder in excess of
$20,000 per year (unless such amendment is required by Law) to increase the
compensation or benefits payable thereunder or enter into any new employment
contract with any person having a salary thereunder in excess of $20,000 that
the Company does not have the unconditional right to terminate without liability
(other than liability for services already rendered) at any time on or after the
Closing Date;

(iii) adopt any new employee benefit plan or make any change in or
to any existing Plans and other than any such change that (A) is required by
Law, or (B) in the opinion of counsel is necessary or advisable to maintain the
tax qualified status of any such Plan.

(iv) sell, lease, abandon or otherwise dispose of any of its
material assets or properties (including capital stock), except in the ordinary
course of business consistent with past practice;

(v) other than in the ordinary course of business consistent with
past practices, incur or, assume indebtedness in excess of $10,000, or make any
payment with respect to any

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obligation for money borrowed before such payment is due in excess of $10,000
except as may be necessary, due to possible transmittal delays, to assure that
payment will be timely made;

(vi) guarantee any Indebtedness of any Person;

(vii) mortgage or otherwise encumber or subject to any Lien any
properties or assets owned by the Company except for such of the foregoing as
are in the normal course of business consistent with past practice and would not
have, individually or in the aggregate, a Material Adverse Effect on the
Company;

(viii)make any change to its accounting (including tax accounting)
methods, principles or practices, except as may be required by GAAP or of the
type consistent with past practices;

(ix) make any amendment to its articles of incorporation;

(x) issue or sell any capital stock of the Company or split, combine
or subdivide the capital stock of the Company;

(xi) merge or consolidate with any other corporation or entity or
acquire or agree to acquire any stock or substantially all of the assets of any
other Person;

(xii) declare or pay any dividends, or declare or make any other
distributions of any kind to its shareholders, or make any direct or indirect
redemption, retirement, purchase or other acquisition of any shares of its
capital stock, except for distributions to shareholders of the Company for the
payment of income taxes payable by the shareholders of the Company in respect of
taxable income by them which is attributable to the Company's income (which
shall not be duplicative of any loan or advance made with respect to such income
taxes pursuant to Section 7.1(a)(xiv) and for distributions in connection with
estate planning activities which are funded through the incurrence of
Indebtedness;

(xiii) terminate or fail to renew any Contract relating to the
assets, liabilities, business, operations, financial condition or results of
operations of the Company other than in the ordinary course of business or which
would not have a Material Adverse Effect on the Company;

(xiv) make any loan or advance to Sellers or any directors, officers
or employees, consultants, agents or other representatives of any of the Sellers
and the Company, or make any other loan or advance otherwise than in the
ordinary course of business, except for any loans or advances to shareholders
for payment of income taxes payable by the shareholders of the Company in
respect of taxable income payable by them which is attributable to the Company's
income (which shall not be duplicative of any distribution made with respect to
such income taxes pursuant to Section 7.1(a)(xvi) and for loans or advances in
connection with estate planning activities which are funded through the
incurrence of Indebtedness; or

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<PAGE> 17
(xv) delay or postpone the payment of accounts payable and other
liabilities or institute any unusual or accelerated collection efforts with
respect to its accounts receivable, in each case, beyond its normal practice.

7.2 REASONABLE ACCESS; CONFIDENTIALITY. (a) From the date hereof until the
Closing, the Sellers shall cause the Company to give Buyer and its
representatives, upon reasonable notice to the Company and during normal
business hours, full and complete access to the assets, properties, books,
records, agreements and employees and advisors of the Company and shall cause
the Company to permit Buyer to make such inspections as it may reasonably
require and to furnish Buyer during such period with all such information
relating to the Company as Buyer may from time to time reasonably request.

(b) Any information provided to or obtained by Buyer pursuant to
paragraph (a) above or obtained by Buyer prior to the date hereof from the
Company, the Sellers or any agent thereof, shall be held by Buyer in strict
confidence and used only in connection with evaluating the transaction
contemplated by this Agreement.

(c) Following the Closing, the Sellers agree to retain in
confidence, and to require its professional representatives and agents
(collectively, "Seller Representatives") to retain in confidence information
concerning the Company and further agrees that, at the Closing, it will not use
for its own benefit and will not use or disclose to any party, or permit the use
or disclosure to any third party of, any such information, except that Sellers
may disclose the information to those of the Seller Representatives who use
information for the property performance of their assigned duties with respect
to the consummation of the transactions contemplated hereby and the preparation
of appropriate Tax Returns. In making such information available to its
Representatives, the Sellers shall take any and all precautions necessary to
ensure that the Seller Representatives use the information only as permitted
hereby. Notwithstanding the foregoing, such information may be disclosed (a) if
it is required by court order or decree or applicable Law or in connection with
the preparation of Tax Returns, (b) if it is ascertainable or obtained from
public information, or (c) it is received from a third party not known to the
recipient to be under an obligation to keep such information confidential. If
any Seller shall be required to disclose any such information by operation of
Law (other than in connection with the preparation of Tax Returns), such Seller
shall give Buyer prior notice of the making of such disclosure and shall use all
reasonable efforts to afford Buyer an opportunity to contest the making of such
disclosure.

7.3 PUBLICITY. The Company, the Sellers and Buyer shall make a joint press
release announcing in general terms the business relationship between the
parties that shall be acceptable to each of the Company, the Sellers and Buyer.
No other publicity release or announcement concerning the transactions
contemplated hereby shall be issued by either party without the advance written
consent of such other party, except any government filings as may be required by
applicable Law.

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7.4 TAX MATTERS. From and after the Closing:

(a) Sellers and Buyer shall (i) each provide the other and shall
cause their respective accountants to provide the other party's accountant, and
Buyer shall cause the Company to provide Sellers, with such assistance as may
reasonably be requested by any of them in connection with the preparation of any
Tax Return, or the conduct of any audit or other examination by any taxing
authority or judicial or administrative proceedings relating to liability for
Taxes; (ii) each retain and provide the other and shall cause their respective
accountants to provide the other party's accountant, and Buyer shall cause the
Company to retain and provide Sellers with, any records or other information
that may be relevant to such Tax Return, audit or examination, proceeding or
determination, and (iii) each provide the other with any final determination of
any such audit or examination, proceeding or determination that affects any
amount required to be shown on any Tax Return of the other for any period.
Without limiting the generality of the foregoing, Buyer shall retain, and shall
cause the Company to retain, and Sellers shall retain, until the applicable
statute of limitations (including any extensions) have expired, copies of all
Tax Returns, supporting work schedules, and other records or information that
may be relevant to such returns for all Tax periods or portions thereof ending
before or including the Closing and shall not destroy or otherwise dispose of
any such records without first providing the other party with a reasonable
opportunity to review and copy same at the cost of such other party.

(b) Sellers shall be responsible for payment of all individual
income taxes associated with the sale of stock contemplated hereby and for
preparing income tax returns with respect thereto.

(c) The Company shall be responsible for preparing income tax
returns with respect to the Company, for all periods commencing prior to and
ending on or before the Closing Date, and shall be responsible for payment of
all income taxes of the Company that becomes due and payable prior to the
Closing Date, and Buyer shall be responsible for payment of all Taxes of the
Company for all taxable periods (pre- and post-Closing) that become due and
payable after the Closing Date, and for preparing and filing all Tax Returns
with respect to the Company for all periods commencing on the Closing Date and
ending thereafter.

(d) For any Tax period that begins on or before and ends after the
Closing Date (a "Straddle Period"), for purposes of apportioning a Tax to the
portion of such Tax period that ends on the Closing Date, the parties shall
treat the day before the Closing Date as the last day of such period; and the
Tax for the Tax period that is allocated to the portion of the Tax period ending
on the Closing Date shall be (i) in the case of a Tax that is based on income or
gross receipts, the Tax that would be due with respect to the period ending on
(and including) the Closing Date, based on actual operations of the Company
during such period as shown on its Records, and (ii) in the case of a Tax that
is not based on income or gross receipts (e.g., real estate or franchise tax),
the total Tax for the Straddle Period multiplied by a fraction, the numerator of
which is the total number of days in the Straddle Period.

(e) No new elections with respect to Taxes or any changes in current
elections with respect to Taxes affecting the Company shall be made after the
date of this Agreement without the prior written consent of Buyer, which consent
shall not be unreasonably withheld.

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(f) Sellers shall pay any state and local sales and stock transfer
taxes and all recording costs and fees however styled or designated that are
required to be paid in connection with the transfer of the Shares contemplated
by this Agreement.

(g) Sellers and Buyer shall provide to each other prompt notice of
any audit or similar investigation or proceeding in which the Internal Revenue
Services or any other Governmental Authority makes or proposes to make a Tax
adjustment to any Tax period of the Company ending on or before the Closing
Date. Buyer shall control all other such proceedings.

(h) For federal, state and local Tax purposes, Buyer and the Company
shall treat the transactions contemplated by this Agreement as resulting in
carry-over basis treatment for the Company, and Buyer shall not take any action
inconsistent with such treatment before or after the Closing.

7.5 RECORDS. With respect to the financial books and records and minute
books of the Company relating to matters on or prior to the Closing Date: (a)
for a period of ten (10) years after the Closing Date, Buyer shall not cause or
permit their destruction or disposal without first offering to surrender them to
the Sellers, and (b) where there is legitimate purpose, including, without
limitation, an audit of any of the Sellers by the Internal Revenue Service or
any other taxing authority, Buyer shall allow the Sellers and their respective
representatives access to such books and records during regular business hours.

7.6 EXCLUSIVE DEALING. The Company agrees that form the date hereof until
the earlier of (a) the termination of this Agreement in accordance with Article
IX hereof and (b) the Closing, neither the Company nor Sellers will directly or
indirectly (i) initiate, discuss or negotiate any sale or merger of the Company
or the Company assets or entertain any inquiries concerning the foregoing, or
(ii) provide any information relating to the Company or the Company assets or
any aspects of its business to any person or entity, with the exception of
information necessary to comply with the requirements of any Governmental
Authority.

7.7 UPDATING SCHEDULES. In connection with the Closing, the Company and
Buyer will promptly supplement or amend the various Schedules to this Agreement
to reflect any matter which, if existing, occurring or known on the date of this
Agreement, would have been required to be set forth or described in such
Schedules or which is necessary to correct any information in such Schedules
which was or has been rendered inaccurate thereby. No such supplement or
amendment to the Schedules shall have any effect for the purpose of determining
satisfaction of the conditions set forth in Article VIII hereof, or the
compliance by any party hereto with its covenants and agreements set forth
herein.

7.8 GUARANTEES. On or prior to the Closing, the Company shall cause any
guarantees issued by the Company between the date of this Agreement and the
Closing Date to have been terminated.

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ARTICLE VIII

CONDITIONS TO CLOSING

8.1 CONDITIONS TO OBLIGATIONS OF THE COMPANY AND SELLERS. The obligations
of the Company and the Sellers to consummate the transactions contemplated by
this Agreement shall be subject to the satisfaction or waiver at or prior to the
Closing of each of the following conditions:

(a) The representations and warranties of Buyer set forth in this
Agreement shall be true and correct in all respects (provided that any
representation or warranty of Buyer contained herein that is subject to a
materiality, Material Adverse Effect or similar qualification shall not be so
qualified for purposes of determining the existence of any breach thereof on the
part of Buyer) as of the Closing Date as though made on and as of the Closing
Date (except to the extent such representations and warranties speak as of an
earlier date), except for such breaches that would not, individually or in the
aggregate with other breaches on the party of Buyer materially adversely affect
the ability of Buyer to consummate the transactions contemplated hereby.

(b) Each of the agreements and covenants of Buyer to be performed
and complied with by Buyer pursuant to this Agreement prior to the Closing Date
shall have been duly performed and complied with in all material respects.

(c) Buyer shall have delivered to the Company a certificate, dated
as of the Closing Date and signed on its behalf by its officer and its chief
financial officer, as to the satisfaction by it of the conditions set forth in
Sections 8.1(a) and 8.1(b).

8.2 CONDITIONS TO OBLIGATION OF BUYER. The obligation of Buyer to
consummate the transactions contemplated by this Agreement shall be subject to
the satisfaction or waiver at or prior to the Closing of the following
conditions:

(a) The representations and warranties of the Company and Sellers
set forth in this Agreement shall be true and correct in all respects (provided
that any representation or warranty of the Company contained herein that is
subject to a materiality, Material Adverse Effect or similar qualification shall
not be so qualified for purposes of determining the existence of any breach
thereof on the part of the Company) as of the Closing Date as though made on and
as of the Closing Date (except to the extent such representations and warranties
speak as of an earlier date), except for such breaches that would not,
individually or in the aggregate with other breaches on the part of Company,
reasonably be expected to have a Material Adverse Effect on the Company.

(b) Each of the agreements and covenants of the Company to be
performed and complied with by the Company pursuant to this Agreement prior to
the Closing Date shall have been duly performed and complied with in all
material respects.

(c) The Company shall have delivered to Buyer a certificate, dated
as of the Closing Date and signed on its behalf by an officer of the Company, as
to the satisfaction by it of the conditions set forth in Sections 8.2(a) and
8.2(b).

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(d) Between the date of this Agreement and the Closing Date, no
change or event shall have occurred which has had a Material Adverse Effect on
the Company.

(e) Buyer shall have received a certificate signed by the Treasurer
of the Company setting forth the aggregate amount of Closing Date Indebtedness.

ARTICLE IX

INDEMNIFICATION; REMEDIES

9.1 SURVIVAL. The representations and warranties in this Agreement shall
survive for the time period set forth in Section 11.10 hereof. The right to
indemnification, payment of Damages or other remedy based on such
representations, warranties, and the covenants and obligations contained in this
Agreement will not be affected by any investigation conducted with respect to
any knowledge acquired (or capable of being acquired) at any time, whether
before or after the execution and delivery of this Agreement or the Closing
Date, with respect to the accuracy or inaccuracy of or compliance with, any such
representation, warranty, covenant or obligation. The waiver of any condition
based on the accuracy of any representation or warranty, or on the performance
of or compliance with any covenant or obligation, will not affect the right to
indemnification, payment of Damages or other remedy based on such
representations, warranties, covenants and obligations.

9.2 INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLERS. Sellers, jointly
and severally, will indemnify and hold harmless Buyer, the Company and their
representatives, stockholders, controlling persons and affiliates (collectively,
the Indemnified Persons") for, and will pay to the Indemnified Persons the
amount of, any loss, liability, claim, damage (including incidental and
consequential damages), expense (including costs of investigation and defense
and reasonably attorneys' fees) or diminution of value, whether or not involving
a third-party claim (collectively, "Damages"), arising, directly or indirectly,
from or in connection with:

(a) Any Breach of any representation or warranty made by Sellers in
their capacity as stockholders in this Agreement and the schedules hereto, or
any other certificate or document delivered by Sellers pursuant to this
Agreement; or

(b) Any Breach by any Seller of any covenant or obligation of such
Seller in this Agreement; or

(c) Any claim by any Person for brokerage or finder's fees or
commissions or similar payments based upon any agreement or understanding
alleged to have been made by any such Person with either Sellers or the Company
(or any Person acting on their behalf) in connection with any of the
transactions contemplated by this Agreement.

(d) Any taxes that may become payable after the Closing relating to
periods prior to the Closing that were not reflected as Current Liabilities in
the Closing Date Balance Sheet.

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<PAGE> 22
(e) The indemnification and payment of Damages by Sellers under this
Agreement shall be limited to the Purchase Price amount and no more.

9.3 INDEMNIFICATION AND PAYMENT OF DAMAGES BY BUYER. Buyer will
indemnify and hold harmless Sellers, and will pay to Sellers the amount of any
Damages arising, directly or indirectly, from or in connection with (a) any
Breach of any representation or warranty made by Buyer in this Agreement or in
any certificated delivered by Buyer pursuant to this Agreement, (b) any Breach
by Buyer of any covenant or obligation of Buyer in this Agreement, or (c) any
claim by any Person for brokerage or finder's fees or commissions or similar
payments based upon any agreement or understanding alleged to have been made by
such Person with Buyer (or any Person acting on its behalf) in connection with
any of the transactions contemplated by this Agreement. The indemnification and
payment of Damages by Buyer under this Agreement shall survive for the time
period set forth in Section 11.10 hereof.

9.4 ESCROW; RIGHT OF SET-OFF. Upon notice to Sellers specifying in
reasonable detail the basis for such set-off, Buyer may set-off any amount to
which it may be entitled under this Section 9 against amounts otherwise payable
under the Promissory Note. The exercise of such right of set-off by Buyer in
good faith, whether or not ultimately determined to be justified, will not
constitute an event of default under the Promissory Note. Neither the exercise
of nor the failure to exercise such right of set-off will constitute an election
of remedies or limit Buyer in any manner in the enforcement of any other
remedies that may be available to it.

9.5 PROCEDURE FOR INDEMNIFICATION - THIRD PARTY CLAIMS.

(a) Promptly after receipt by an indemnified party under Section 9.2
or 9.3 of notice of the commencement of any Proceeding against it, such
indemnified party will, if a claim is to be made against an indemnifying party
under such Section, give notice to the indemnifying party of the commencement of
such claim, but the failure to notify the indemnifying party will not relieve
the indemnifying party of any liability that it may have to any indemnified
party, except to the extent that the indemnifying party demonstrates that the
defense of such actions is prejudiced by the indemnified party's failure to give
such notice.

(b) If any Proceeding referred to in Section 9.5 is brought against
an indemnified party and it gives notice to the indemnifying party of the
commencement of such Proceeding, the indemnifying party will, unless the claim
involves Taxes, be entitled to participate in such Proceeding and, to the extent
that it wishes (unless (i) the indemnifying party is also a party to such
Proceeding and the indemnifying party determines in good faith that joint
representation would be inappropriate, or (ii) the indemnifying party fails to
provide reasonable assurance to the indemnified party of its financial capacity
to defend such Proceeding and provide indemnification with respect to such
Proceeding), to assume the defense of such Proceeding with counsel satisfactory
to the indemnified party and, after notice from the indemnifying party will not,
as long as it diligently conducts such defense, be liable to the indemnified
party under this Section 9 for any fees of other counsel or any other expenses
with respect to the defense of such Proceeding, in each case subsequently
incurred by the indemnified party in connection with the defense of such
Proceeding, other than reasonable costs of investigation. If the indemnifying
party assumes the defense of a Proceeding, (i) it will be conclusively
established for purposes of this Agreement that the claims

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<PAGE> 23
made in that Proceeding are within the scope of and subject to indemnification;
(ii) no compromise or settlement of such claims may be effected by the
indemnifying party without the indemnified party's consent unless (A) there is
no finding or admission of any violation of any federal, state or local law,
ordinance, regulation, statute or court order, or any violation of the rights of
any Person and no effect on any other claims that may be made against the
indemnified party; and (B) the sole relief provided is monetary damages that are
paid in full by the indemnifying party; and (iii) the indemnified party will
have no liability with respect to any compromise or settlement of such claims
effected without its consent. If notice is given to an indemnifying party of the
commencement of any Proceeding and the indemnifying party does not, within ten
(10) days after the indemnified party's notice is given, give notice to the
indemnified party of its election to assume the defense of such Proceeding, the
indemnifying party will be bound by any determination made in such Proceeding or
any compromise or settlement effected by the indemnified party.

(c) Notwithstanding the foregoing, if an indemnified party
determines in good faith that there is a reasonable probability that a
Proceeding may adversely affect it or its Affiliates other than as a result of
monetary damages for which it would be entitled to indemnification under this
Agreement, the indemnified party may, by notice to the indemnifying party,
assume the exclusive right to defend, compromise or settle such Proceeding, but
the indemnifying party will not be bound by any determination of a Proceeding so
defended or any compromise or settlement effected without its consent (which may
not be unreasonably withheld).

9.5 PROCEDURE FOR INDEMNIFICATION - OTHER CLAIMS. A claim for
indemnification for any matter not involving a third-party claim may be asserted
by notice to the party from whom indemnification is sought.

ARTICLE X

TERMINATION OF AGREEMENT

10.1 TERMINATION. Notwithstanding any other provision of this Agreement,
this Agreement may be terminated at any time prior to the Closing Date:

(a) by mutual written consent of Buyer and the Company (acting on
its own behalf and for the Sellers);

(b) by Buyer or the Company (acting on its own behalf and for the
Sellers), upon written notice to the other party, if the transactions
contemplated by this Agreement shall not have been consummated on or prior to
June 30, 1999 (the "Outside Date"), unless such failure of consummation shall be
due to the failure of the party seeking such termination to perform or observe
in all material respects the covenants and agreements hereof to be performed or
observed by such party; or

(c) by Buyer or the Company (acting on its own behalf and for the
Sellers) by reason of the breach by the other in any material respect of any of
its representations, warranties,

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<PAGE> 24
covenants or agreements contained in this Agreement, which breach continues
uncurred for a period of 15 days after notice thereof.

10.2 EFFECT OF TERMINATION. In the event of termination of this Agreement
pursuant to Section 10.1, no party shall have any liability or any further
obligation to any other party, except as provided in this Section 10.2 and
except that nothing herein shall release, or be construed as releasing, any
party hereto from any liability or damage to any other party hereto arising out
of the breaching party's willful and material breach in the performance of any
of its covenants, agreements, duties or obligations arising under this
Agreement. The obligations of the parties to this Agreement under Sections 4.16,
6.7, 7.2, 7.3 and 11.1 shall survive any termination of this Agreement.

ARTICLE XI

MISCELLANEOUS AND GENERAL

11.1 EXPENSES. Whether or not the transactions contemplated by this
Agreement are consummated, all costs and expenses (including all legal and
accounting fees) incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses except as
expressly provided herein (it being understood that all such costs and expenses
incurred by the Company and Sellers in connection herewith shall be borne by the
Company, subject to the provisions of Section 2.3).

11.2 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, but shall not be assignable by either party hereto without the prior
written consent of the other party hereto.

11.3 THIRD PARTY BENEFICIARIES. Each party hereto intends that this
Agreement shall not benefit or create any right or cause of action in or on
behalf of any person other than the parties hereto.

11.4 NOTICES. Any notice or other communication provided for herein or
given hereunder to a party hereto shall be sufficient if in writing, and sent by
facsimile transmission (electronically confirmed), delivered in person, mailed
by first class registered or certified mail, postage prepaid, or sent by Federal
Express or other overnight courier of national reputation, addressed as follows:

If to Buyer: Spanish Broadcasting System, Inc.
3191 Coral Way
Suite 805
Miami, Florida 33145
ATTN: Raul Alarcon, Jr.

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<PAGE> 25
With copies Jason L. Shrinsky, Esq.
Kaye, Scholer, Fierman, Hays & Handler, LLP
901 15th Street, N.W.
Suite 1100
Washington, D.C. 20005

If to Company: JuJu Media, Inc.
250 West 26th Street
New York, New York 10001
ATTN: Juan Estaban Rodriguez

If to Sellers: Juan Esteban Rodriguez
2900 St. Teresa Avenue
Apt. 4A
Bronx, New York 10461

Judith Eve Faber
11 Maiden Lane
Apt. 3A
New York, New York 10038

Mr. Tony Slevira
26 Slocum Street
New Rochelle, New York 10801

With copies to: Mauricio F. Paez, Esq.
Lowenstein Sandler PC
65 Livingston Avenue
Roseland, New Jersey 07068

or to such other address with respect to a party as such party shall notify the
other in writing as above provided.

11.5 COMPLETE AGREEMENT. This Agreement and the schedules hereto and the
other documents delivered by the parties in connection herewith contain the
complete agreement between the parties hereto with respect to the transactions
contemplated hereby and thereby and supersede all prior agreements and
understandings between the parties hereto with respect thereto.

11.6 CAPTIONS; REFERENCES. The captions contained in this Agreement are
for convenience of reference only and do not form a part of this Agreement. When
a reference is made in this Agreement to a clause, a Section or an Article, such
reference shall be to a clause, a Section or Article of this Agreement unless
otherwise indicated.

11.7 AMENDMENT. This Agreement may be amended or modified only by an
instrument in writing duly executed by the parties to this Agreement.

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<PAGE> 26
11.8 WAIVER. At any time prior to the Closing Date, the parties hereto may
(a) extend the time for the performance of any of the obligations or other acts
of the parties hereto, (b) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto, or (c)
waive compliance with any of the agreements or conditions contained herein, to
the extent permitted by applicable Law. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid only if set forth in a
writing signed on behalf of such party.

11.9 GOVERNING LAW. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York, without regard
to its rules of conflict of laws. Any claim, dispute or disagreement arising out
of, connected with or in respect of this Agreement may be brought only in the
courts of the State of New York or the federal courts within the State of New
York, which courts shall have exclusive jurisdiction thereof, and each party
hereby waives any claim that such courts do not have jurisdiction or are an
inconvenient forum.

11.10 SURVIVAL OF INDEMNIFICATION, REPRESENTATIONS, WARRANTIES AND
COVENANTS. The representations and warranties in this Agreement or in any
certificate or instrument delivered pursuant to this Agreement and the rights of
indemnification of any party for breach thereof as specified in Section 9.2(a)
and 9.3(a) shall survive the Closing Date for a period of three (3) years,
except for the representations and warranties set forth in Sections 4.2, 4.3,
5.1 and 5.2 which shall survive forever and for which indemnification will be
available forever. This Section 11.10 shall not limit any covenant or agreement
of the parties which by its terms contemplates performance after the Closing
Date.

11.11 SEVERABILITY. Any term or provision of this Agreement that is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.

11.12 BEST EFFORTS; FURTHER ASSURANCES. Subject to the terms and
conditions herein provided, each of the parties hereto shall use its best
efforts to take, or cause to be taken, all action, and to do, or cause to be
done, all things that are commercially reasonable, and proper or advisable under
applicable laws and regulations, to consummate and make effective the
transactions contemplated by this Agreement. Each of the Company and the Buyer
will use their respective best efforts to obtain consents of all Governmental
Authorities and third parties necessary to the consummation of the transactions
contemplated by this Agreement. In the event that at any time after Closing any
further action is necessary to carry out the purposes of this Agreement, the
Sellers or the Buyer and the proper directors or officers of the Buyer, as the
case may be, shall take all such action without any further consideration
therefor.

11.13 ENFORCEMENT OF AGREEMENT. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement was
not performed in accordance with its specific terms or was otherwise breached.
It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the

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<PAGE> 27
terms and provisions hereof, this being in addition to any other remedy to which
they are entitled at law or in equity.

11.14 COUNTERPARTS. This Agreement may be executed in original or by
facsimile in two or more counterparts, each of which shall be deemed an original
but all of which shall constitute but one instrument.

ARTICLE XII

PROTECTION OF REMAINING SHAREHOLDERS

12.1 PURCHASE RIGHTS. In the event that after the Closing the Company
shall propose to issue any additional shares of common stock or any securities
convertible into common stock of the Company, then the Company shall deliver
notice thereof to each holder of record of Remaining Shares and each such holder
shall have a right, exercisable for a period of twenty days after notice of such
proposed issuance, to purchase such number of shares of the common stock or
securities convertible into common stock being offered as would result in such
holder's holding the same percentage interest in the common stock (assuming the
conversion of all convertible securities being offered if any) of the Company as
such holder held immediately prior to such issuance at the same price the
Company is proposing to issue said securities; provided however that the right
specified herein shall not apply to the following issuances ("Excluded
Issuances") of capital stock: (i) securities issued in connection with any debt
financing with unaffiliated third parties, (ii) securities issued in connection
with an acquisition of an unaffiliated third party (whether by acquisition of
stock or by merger consolidation or the acquisition of all or substantially all
the assets of such third party, (iii) securities issued in a public offering,
(iv) securities issued to an employee of the Company in connection with his
employment with the Company, whether pursuant to an employee stock option plan
or otherwise, (v) securities issued in connection with a joint venture, teaming
agreement or strategic alliance with an unaffiliated third party or (vi)
securities issued upon the exercise or conversion of any of the securities
issued pursuant to clauses (i) through (v) above, notwithstanding the above,
such right shall terminate upon the occurrence of an initial public offering of
common stock of the Company. For the purposes of this Section, in determining a
holder's percentage interest in the common stock at any time, such percentage
interest shall be calculated without regard to the issuance of any securities
issued as Excluded Issuances.

12.2 AFFILIATE TRANSACTIONS TO BE ON ARMS'-LENGTH BASIS. After the
Closing, all transactions between the Company and SBS or between Company and any
Affiliates of SBS, including, without limitation, sales or purchases of Company
securities, shall be on terms as fair and reasonable to the Company as could be
obtained by the Company in a comparable transaction with an unaffiliated third
party. A good faith determination by the Board of Directors of JuJu that a
transaction is in compliance with the preceding sentence, including in making
such a determination the consideration by the Board of Directors of JuJu whether
or not it believes it needs to obtain an independent valuation, shall be
conclusive and binding on the parties hereto.

12.3 NO IMPAIRMENT. The Company will not, by any voluntary action, avoid
or seek to avoid the observance or performance of any of the terms to be
observed or performed under Sections 12.1 and 12.2 by the Company.

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<PAGE> 28
IN WITNESS WHEREOF, the parties hereto have executed this Stock Purchase
Agreement as of the day and date first above written.

<TABLE>
<S> <C>
JUJU MEDIA, INC. SPANISH BROADCASTING
SYSTEM, INC.
By: /s/ Juan Esteban Rodriquez By: /s/ Joseph A. Garcia
---------------------------------- ----------------------------
Juan Esteban Rodriguez, President Joseph A. Garcia, Vice-President
and Chief Financial Officer
</TABLE>

SELLERS:

By: /s/ Juan Esteban Rodriguez
-----------------------------------
Juan Esteban Rodriguez

By: /s/ Judith Eve Farber
-----------------------------------
Judith Eve Farber

By: /s/ Tony Slevira
-----------------------------------
Tony Slevira

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<PAGE> 1
EXHIBIT 10.34

FORM OF ASSET PURCHASE AGREEMENT

ASSET PURCHASE AGREEMENT (the "Agreement"), dated as of August __,
1999, by and between Spanish Broadcasting System of Florida, Inc.,a Florida
corporation ("Seller"), and __________________, a _____________ corporation
("Buyer").

W I T N E S S E T H:

WHEREAS, Seller is the licensee of and owns and operates radio
stations WZMQ(FM), Key Largo, Florida and WVMQ(FM), Key West, Florida
(collectively, "Stations"), and related licenses and authorizations pursuant to
licenses issued by the Federal Communications Commissions ("FCC"); and

WHEREAS, Seller desires to sell certain properties and assets
pertaining to the Stations, and Buyer desires to purchase the same, all subject
to the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants contained
herein, Seller and Buyer agree as follows:

SECTION 1. PURCHASE AND SALE OF PROPERTIES AND ASSETS.

(a) STATIONS' ASSETS. Subject to and in reliance upon the
representations, warranties and agreements set forth herein, and subject to the
terms and conditions contained herein, on the Closing Date (as defined in
Section 4), Seller agrees to convey, sell, assign, transfer and deliver to
Buyer, and Buyer agrees to purchase, accept, assume and, as the case may be,
perform the following (collectively, the "Stations' Assets"):

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<PAGE> 2
(i) LICENSES AND AUTHORIZATIONS. The licenses, permits and
authorizations of the FCC listed on Schedule A attached hereto, together with
any renewals, extensions or modifications thereof and additions thereto made
between the date of this Agreement and the Closing Date (collectively, the
"Licenses"), and the rights of Seller in and to the call letters "WVMQ(FM)" and
"WZMQ(FM)".

(ii) AGREEMENTS, ETC. The business agreements, leases and
contracts listed individually or by category on Schedule B attached hereto,
including any renewals, extensions, amendments or modifications thereof.

(iii) COPYRIGHTS, ETC. All copyrights, trademarks, service
marks or other similar rights or modifications thereto listed on Schedule C
attached hereto, made by Seller in the ordinary course of business between the
date of such schedule and the Closing Date.

(iv) PERSONAL PROPERTY. All good will and all general
intangibles and the tangible personal property owned by the Seller and used or
useful in the operation of the Stations listed on Schedule D attached hereto.

(v) REAL PROPERTY. All of Seller's right, title and interest
in the real property leases described on Schedule E attached hereto.

(vi) PUBLIC FILE. The Stations' local public inspection file
together with all its contents.

(b) EXCLUDED ASSETS. It is understood that no corporate records,
accounts receivable, bank deposits, other cash equivalents and/or investment
securities, contracts of insurance and insurance proceeds of settlement and
revenue claims made by Seller relating to property, equipment repaired, replaced
or restored by Seller prior to the Closing Date, unless

2
<PAGE> 3
otherwise specified herein (all of which are hereinafter referred to as
"Excluded Property") shall be sold, conveyed or assigned hereunder.

(c) LIENS. Seller agrees that the Stations' Assets to be conveyed on
the Closing Date pursuant to this Agreement will be conveyed free and clear of
all liens, charges, claims, adverse interests and encumbrances of any kind
whatsoever owed to, owned by, accruing to or in favor of any person whatsoever.

(d) LIABILITIES TO BE ASSUMED. Except as otherwise expressly
provided in this Agreement and as described on Schedule B attached hereto, Buyer
will not assume, incur or be charged with, in connection with the transactions
contemplated herein, any liabilities or obligations of any nature whatsoever,
contingent or otherwise arising prior to the Closing or liabilities or
obligations of Seller in connection with the Closing.

SECTION 2. PURCHASE PRICE. The aggregate purchase price to be paid
to Seller by Buyer shall be One Million Dollars ($1,000,000.00) ("Purchase
Price") payable as follows:

(a) Upon the execution of this Agreement, Buyer will deposit with
__________________________ as Escrow Agent, an escrow deposit ("Escrow Deposit")
in the amount of Fifty Thousand Dollars ($50,000) to be held in escrow and
deposited in a special interest bearing escrow account and which shall be
delivered by said Escrow Agent to Seller at the Closing hereunder to be applied
to the Purchase Price pursuant to the terms and conditions set forth in the
Escrow Agreement attached hereto as Exhibit 1. The interest earned on the Escrow
Deposit shall be the property of Buyer and paid over to Buyer at the closing of
the transactions contemplated herein (the "Closing"). In the event that Buyer
defaults under this Agreement, the Escrow Deposit shall be forfeited to Seller
as liquidated damages. In the event

3
<PAGE> 4
that there is no Closing of this Agreement and the Buyer is not in default, the
Escrow Deposit, plus interest earned thereon, shall be returned to Buyer.

(b) On the Closing Date, Buyer shall pay to Seller by wire transfer
of federally available funds the sum of One Million Dollars ($1,000,000.00).

SECTION 3. ADJUSTMENTS AND ASSUMPTIONS. The operation of the
Stations, and the cash income and the expenses attributable thereto, up to 12:01
A.M. on the Closing Date (the "Adjustment Time") shall be for the account of
Seller and thereafter shall be for the account of Buyer. Expenses such as power
and utility charges, lease rents, frequency discounts, prepaid time sales
agreements, wages, commissions, vacation pay, payroll taxes and fringe benefits
or employees of the Seller who enter the employment of Buyer, and similar
prepaid and deferred items shall be prorated between the Seller and Buyer. All
prorations shall be made and paid [insofar as feasible] on the Closing date,
with a final settlement within ninety (90) days after the Closing Date.

SECTION 4. THE CLOSING.

(a) FCC CONSENT. Consummation of the transactions contemplated
hereunder is conditioned upon the FCC having given its consent in writing to the
assignment to Buyer of the FCC licenses and other authorizations set forth in
subparagraph 1(a) hereof, and said consent becoming final. For purposes of this
Agreement, such consent shall be deemed final when it is no longer subject to
timely review by the FCC or by any court or, in the event of reconsideration
upon its own motion or otherwise by the FCC to an appeal by any person to any
court, upon the decision of such body becoming no longer subject to review. In
all events, the Closing shall take place on a date not later than three (3) days
from June 30, 2000 ("Outside Closing Date").

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<PAGE> 5
(b) FCC APPLICATION. On or before September 15, 1999, the parties
shall file an application requesting FCC consent to the transactions involved
herein. The parties hereto shall each bear their own legal fees and any and all
costs and expenses not specified herein with respect to the sale and purchase of
the assets covered by this Agreement. All FCC filing fees shall be paid by
Seller.

(c) FAILURE OF FCC CONSENT. If the FCC has failed or refused to
grant its consent to the assignment of the Licenses (as hereinafter defined) for
a period of longer than nine months following the filing of the application, or
if the application for consent to assignment of the Licenses is designated for
hearing, Buyer may terminate this Agreement upon ten (10) days prior written
notice to Seller, provided that the Buyer is not in material default or breach
at the time of said notice. In no event shall the Closing take place later than
the Outside Closing Date, unless mutually agreed to by the parties. The
termination pursuant to this subsection shall not relieve either party of any
liability previously incurred because of a party being in material default
pursuant to the terms and conditions of this Agreement.

(d) CLOSING. The date of the Closing and the time thereof (herein
referred to as the "Closing Date"), shall be set by Seller. The Closing shall
take place at the office of Seller.

(e) CONTROL OF THE STATIONS AND ACCESS TO INFORMATION. Until the
Closing, Seller shall have complete control of the Stations, their equipment and
operation. Buyer shall be entitled, however, to reasonable inspection during
normal business hours of the Stations' premises and Stations' Assets.

SECTION 5. SELLER'S REPRESENTATIONS AND WARRANTIES.

Seller represents, warrants and agrees now and as of the Closing as follows:

5
<PAGE> 6
(a) DUE INCORPORATION. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of Florida,
and has the full power and authority to own the Stations' Assets and to carry on
the business of the Stations as now being conducted.

(b) AUTHORIZATION OF AGREEMENT; NO BREACH. The execution, delivery
and performance of this Agreement has been duly and validly authorized and
approved by Seller's Board of Directors and Stockholders, and Seller has the
full corporate power and authority to execute, deliver and perform this
Agreement and to consummate the transactions contemplated hereby. Neither such
execution, delivery and performance nor compliance by Seller with the terms and
provisions hereof will (assuming receipt of all necessary approvals from the
FCC) conflict with or result in a breach of any of the terms, conditions or
provisions of the Articles of Incorporation or By-Laws of Seller or any
judgment, order, injunction, decree, law, regulation, rule or ruling of any
court or other governmental authority to which Seller is subject.

(c) LICENSES AND AUTHORIZATIONS. Schedule A attached hereto includes
a true and complete list of the Licenses and any other licenses, permits, and
authorizations of any governmental or regulatory authority currently held by the
Seller for the Stations. The Licenses constitute all of the licenses and
authorizations used in the operation of the Stations as now operated and the
Licenses are now and on the Closing Date will be in full force and effect and
with no material impairment by any act or omission of the Seller. There is not
now pending or, to the knowledge of Seller, threatened, any action by or before
the FCC to revoke, cancel, rescind, modify, or refuse to renew any of the
Licenses, or any investigation, order to show cause, notice of violation, notice
of apparent liability of forfeiture or material complaint against Stations or
Seller. In the event of any such action, or the filing or issuance of any order,
notice or

6
<PAGE> 7
complaint or knowledge of the threat thereof, Seller shall notify Buyer of same
in writing within five (5) business days, and shall take all reasonable measures
to contest in good faith or seek removal or recession of such action, order,
notice or complaint, and shall pay any sanctions imposed. All material reports,
forms, and statements required to be filed by Seller with the FCC with respect
to the Stations have been filed and are complete and accurate in all material
respects. Stations are now and on the Closing Date will be operating with the
Licenses and in compliance with the Communications Act of 1934, as amended, and
the rules and policies of the FCC.

(d) PERSONAL PROPERTY. Schedule D attached hereto contains a
complete and accurate list, as of the date hereof, of all material tangible
personal property and interests therein owned by Seller and used by it in the
operation of the Stations and the conduct of their business, except as disclosed
in such schedule. The tangible assets included in the Personal Property listed
on Schedule D attached hereto are now and will, on the Closing Date, be in
proper operating condition, normal wear and tear excepted, and will permit the
Stations to operate in accordance with the Rules and Regulations of the FCC and
in accordance with the Stations' Licenses. Between the date hereof and the
Closing Date, Seller will not transfer, convey or assign to any other person,
any of the Personal Property unless, in the case of tangible assets included in
the Personal Property, the same are replaced by assets of equal quality and
usefulness.

(e) LEASES AND OTHER AGREEMENTS. Schedule D attached hereto contains
a complete and accurate list of, or reference to, as of the date hereof, all
real estate leases, business agreements, leases and contracts of Seller (except
for music license agreements) relating to the assets or operations of the
Stations. The agreements, leases and contracts listed on Schedule B attached
hereto constitute valid and binding obligations of Seller and, to the best of
Sellers's

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<PAGE> 8
knowledge, of all other persons purported to be parties thereto and are in full
force and effect as of the date hereof.

(f) NO LITIGATION. There is as of the date hereof no suit (at law or
in equity), action, legal or administrative, arbitration or other proceeding or
governmental investigation pending or as to which Seller has received notice
which could, individually or in the aggregate, materially adversely affect the
title or interest of Seller in any of the Stations' Assets or the operation of
the Stations and conduct of their business.

(g) USE OF PREMISES. The occupancy and use of all leases or owned
real property and the occupancy, use and placement of all structure thereon, are
not at the present time, in violation in any material respect of any laws,
zoning regulations, ordinances, orders or requirement of any federal, state or
local governmental authority or in conflict with the rights of any other party
therein or thereon.

(h) PUBLIC FILE.Seller maintains a public file for the Stations
which will contain all material required by the Rules and Regulations of the FCC
on the Closing Date. Seller shall deliver to Buyer at the Closing the public
file for the Stations.

(i) INSURANCE. There is presently in force fire and liability
insurance with respect to the properties and assets to be transferred and
conveyed hereunder. Seller will maintain or cause to be maintained such
insurance in full force until the Closing hereunder.

(j) EMPLOYMENT BENEFIT PLANS. Seller does not maintain, or have any
present or future obligation or liability with respect to any bonus, deferred
compensation, pension, profit-sharing, retirement, severance pay, insurance,
stock purchase, stock option, or other fringe benefit plan, as defined in
Section 3(d) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), whether formal or informal.

8
<PAGE> 9
(k) LABOR RELATIONS, TERMS AND CONDITIONS OF EMPLOYMENT. Seller has
not recognized and has received no demand for recognition by any collective
bargaining representative. Seller has substantially complied with and is not in
default in any material respect under any laws, rules and regulations relating
to employment of labor, including those relating to wages, hours, equal
employment opportunities, employment of protected minorities (including women
and persons over 40 years of age), collective bargaining and the withholding and
payment of taxes and contributions and has withheld all amounts required or
agreed to be withheld from wages and salaries of its employees, and is not
liable for any arrearage or wages or for any tax or penalty or failure to comply
with the foregoing.

(l) TAXES. Seller has filed all federal, state, and local tax
returns required by law and has paid all taxes, estimated taxes, interest,
assessments, and penalties due and payable. There are no present disputes as to
taxes of any nature payment by Seller which in any event could affect any of the
Stations' Assets or the operation of the Stations.

SECTION 6. BUYER'S REPRESENTATIONS AND WARRANTIES. Buyer represents,
warrants and agrees now and as of the date of Closing as follows:

(a) AUTHORITY AND DUE ORGANIZATION. Buyer will be a corporation duly
organized, validly existing and in good standing under the laws of the State of
Florida. Buyer has all requisite power and authority to own its property and to
carry on its business as and where now conducted. Buyer has all requisite power
and authority to enter into, perform, and carry out the transactions
contemplated by this Agreement, and to execute, perform and carry out the terms
and conditions of all documents and instruments executed in connection herewith.
All signatures appearing for Buyer at the end of this Agreement are true and
genuine, and this Agreement and all other documents or instruments executed by
Buyer in connection herewith have been duly

9
<PAGE> 10
authorized by all necessary corporate action and constitute the legal, valid and
binding obligations of Buyer, enforceable in accordance with their respective
terms.

(b) QUALIFICATION. Buyer has no knowledge of any facts which would,
under present law (including the Communications Act of 1934, as amended) and
present rules, regulations and practices of the FCC, disqualify Buyer as an
assignee of the licenses, permits and authorizations listed on Schedule A
attached hereto, or as an owner and/or operator of the Stations' Assets, and
Buyer will not take, or unreasonably fail to take, any action which Buyer knows
or has reason to know would cause such disqualification. Buyer is financially
qualified and able to meet all financial undertakings contracted for herein.

(c) LITIGATION. There is no litigation or proceeding threatened or
pending against Buyer that would affect Buyer's ability to carry out this
Agreement.

SECTION 7. PERFORMANCE BY BUYER. The obligations of Buyer hereunder
are subject to the conditions that:

(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Seller contained in this Agreement shall be true and correct at
the time of the Closing as though made at and as of such time, and each and all
of the agreements of the Seller to be performed on or prior to the Closing
pursuant to the terms of this Agreement shall have been duly performed, and
Seller shall have delivered to Buyer certificates, dated as of the Closing Date,
signed by a corporate officer to such effect.

(b) LITIGATION, ETC. No litigation, investigation or proceeding of
any kind shall have been instituted or threatened or be pending which would
materially adversely affect or relate to the Stations' Assets or the business or
operations of the Stations.

10
<PAGE> 11
(c) FCC LICENSES. At the Closing, the Licenses shall be assigned and
transferred to Buyer, and such Licenses shall be free and clear of conditions
which would have a material adverse consequence to the operation of the Stations
as presently authorized.

(d) CONSENTS. All consents of third parties that are required for
the valid and binding assignment from Seller to Buyer of the Stations'
contracts, leases of business agreements needed to permit the operation of the
Stations in all material respects in the same manner as heretofore or that are
required shall be in full force and effect as of the Closing.

(e) LEGAL OPINION. Buyer shall have received an opinion of counsel
for Seller, dated the Closing Date, in form and content reasonably acceptable to
Buyer's counsel to the effect that:

(i) Seller is a corporation duly organized, validly existing
and in good standing under the laws of the State of Florida.

(ii) Seller has full power and authority to enter into and
perform this Agreement and the transactions contemplated hereby. Seller has
taken all actions necessary to authorize the execution, delivery and performance
of this Agreement. This Agreement has been duly executed and delivered by Seller
and is the valid and binding obligation of Seller enforceable in accordance with
its respective terms.

(iii) The execution, delivery and performance of this
Agreement by Seller does not and will not, with the passage of time or the
giving of notice or both, contravene the Articles of Incorporation or By-Laws of
the Seller or to the best of such counsel's knowledge after due inquiry,
conflict with or result in a breach, termination or modification of, or a
default under any contract, instrument, authorization, license, permit, lease,
easement, arrangement or understanding to which Buyer is a party or result in
the violation of any law of any order, writ,

11
<PAGE> 12
injunction, judgment, decree, rule or regulation of any court, administrative
agency or governmental body.

(iv) Seller is the authorized legal holder of the Licenses
listed on Schedule A attached hereto. The Licenses are in full force and effect
to the full extent to which they can be lawfully held under the rules and
regulations of the Commission. To the best of such counsel's knowledge, except
for administrative rulemaking proceedings of general applicability to the
broadcasting industry, (i) there is no litigation, proceeding or investigation
of any nature pending against Seller or the Stations affecting Seller or the
Stations which may result in a materially adverse effect upon the Stations of
the business or operation of the Stations or which seeks to enjoin, prohibit or
otherwise challenge the transactions contemplated by this Agreement and (ii) no
judgment, award, order or decrees has been rendered against or affecting Seller
or the Stations which would result in a materially adverse effect upon the
Stations or the business or operation of the Stations.

(f) INITIAL PUBLIC OFFERING. Seller's Initial Public Offering
("IPO") shall have been consummated and Raul Alarcon, Sr. shall have received
all payments due to him from the proceeds of the IPO as well as any and all
other related benefits in accordance with the terms of his agreements with
Seller.

SECTION 8. SELLER'S PERFORMANCE. Seller's performance is subject to:

(a) PAYMENTS, ETC. All payments due to Seller from Buyer as provided
for herein in Section 2 shall have been made in accordance with the terms of
this Agreement.

(b) REPRESENTATIONS AND WARRANTIES. Each of Buyer's representations
and warranties contained herein shall, to the extent applicable, be true at the
time of the Closing, as

12
<PAGE> 13
though made at and as of such time and Buyer shall have delivered to Seller
certificates, dated as of the Closing Date, signed by a corporate officer to
such effect.

(c) PERFORMANCE. Buyer shall have performed and complied with all
agreements, obligations and conditions required by this Agreement to be
performed or complied with prior to or at the Closing hereunder.

(d) LITIGATION. No litigation, investigation or proceeding of any
kind shall have been instituted or threatened which would adversely affect the
financial condition of Buyer to comply with the provisions of this Agreement.

(e) LEGAL OPINION. Seller shall have received an opinion of counsel
for Buyer, dated the Closing Date, in form and content reasonably acceptable to
Seller's counsel to the effect that:

(i) Buyer is duly organized, validly existing, in good
standing and qualified to do business under the laws of the State of Florida,
and has all requisite power and authority to conduct business and operations as
currently conducted.

(ii) Buyer has all requisite power and authority to execute,
deliver and perform under this Agreement and to perform and carry out the
transactions contemplated by this Agreement. Buyer has duly taken all actions
necessary to authorize the execution, delivery and performance of this
Agreement. This Agreement has been duly executed and delivered by Buyer and
ratified by Buyer's corporation, and is the valid and binding obligations of
Buyer and Buyer's corporation enforceable against each in accordance with its
respective terms.

(iii) The execution, delivery and performance of this
Agreement by Buyer and as ratified by Buyer's corporation does not and will not,
with the passage of time or the giving of notice or both, contravene the
Articles of Incorporation of Buyer's corporation or,

13
<PAGE> 14
to the best of our knowledge after due inquiry, conflict with or result in a
breach, termination or modification of, or a default under any contract,
instrument, authorization, license, permit, lease, easement, arrangement or
understanding to which Buyer or Buyer's corporation is a party or result in the
violation of any law or of any order, writ, injunction, judgment, decree, rule
or regulation of any court, administrative agency or governmental body.

(iv) No consent, approval or authorization of any person, or
any state, local or federal governmental authority, not already obtained and no
certificate, notice, application, report or other document required to be filed
with any state, local or federal governmental authority which as not already
been filed, is required to be obtained or filed prior to or on the Closing Date
for the execution and delivery of the Agreement by Buyer and its ratification by
Buyer's corporation, or the consummation of the transactions contemplated
thereby.

(v) There is no legal action, proceeding or investigation
pending or, to the best of our knowledge after due inquiry, threatened, before
any court or other governmental body or agency to which Buyer or Buyer's
corporation is a party, nor is there any judgement, order, writ, injunction or
decree outstanding against Buyer or Buyer's corporation or by which Buyer or
Buyer's corporation is subject, bound or affected nor, to the best of Buyer's
knowledge, after due inquiry, is there any basis for any such legal action,
proceeding, investigation or controversy.

(f) CONSENTS. Buyer and Buyer's corporation shall have used their
respective best efforts consistent with commercial reasonableness to assist
Seller in obtaining, prior to the Closing Date, all consents and approvals
required, if any, for the assignment of the contracts,

14
<PAGE> 15
leases and business agreements to be assigned hereunder by Seller to Buyer's
corporation at Closing.

SECTION 9. RIGHTS OF INDEMNIFICATION.

(a) It is understood and agreed that Buyer does not assume and shall
not be obligated to pay, any liabilities of the Seller under the terms of the
Agreement or otherwise, and it shall not be obligated to perform any obligations
of the Seller, of any kind or manner except by reason of the contracts, leases
and business agreements expressly assigned to and assumed by Buyer hereunder.
The Seller hereby agrees to indemnify and hold Buyer and its successors and
assigns (collectively, "Indemnified Parties", and individually, an "Indemnified
Party") harmless for a period of one (1) year from the Closing Date, from and
against:

(i) Any and all damage of deficiency resulting from any
misrepresentation, breach of warranty, or non-fulfillment of any agreement on
the part of the Seller under this Agreement, or from any misrepresentation in or
omission from any certificate or other instrument furnished to any Indemnified
Party pursuant to this Agreement or in connection with any of the transactions
contemplated hereby; and

(ii) Any and all actions, suits, proceeding, damages,
assessments, judgments, costs and expenses, including reasonable attorney's fees
incurred by any Indemnified Party as a result of the failure or refusal of
Seller to compromise or defend any claim incident to, or otherwise fail to
comply with, the foregoing provisions.

(b) If any claim or liability shall be asserted against any
Indemnified Party which would give rise to a claim by such Indemnified Party
against Seller for indemnification under the provisions of this Section, such
Indemnified Party shall promptly notify the Seller in

15
<PAGE> 16
writing of the same and give all reasonable cooperation in the defense thereof
and the Seller shall be entitled at its own expense to compromise or defend any
such claim.

(c) Buyer hereby agrees to indemnify and hold the Seller and its
successors and assigns harmless, for a period of one (1) year from the Closing
Date, from and against:

(i) Any and all claims, liabilities and obligations of every
kind and description, contingent or otherwise arising from or related to the
ownership or operation of the Stations subsequent to the Closing hereunder
including, but not limited to, any and all claims, liabilities and obligations
arising or required to be performed subsequent to the Closing hereunder under
any contract or instrument assumed by Buyer hereunder.

(ii) Any and all damage or deficiency resulting from any
misrepresentation, breach of warranty, non-fulfillment of any agreement or
obligation assumed or required to be assumed by Buyer under this Agreement or
from any misrepresentation in or omission from any certificate or other
instrument furnished to the Seller pursuant to this Agreement, or in connection
with any of the transactions contemplated hereby.

(iii) Any and all actions, suits, proceedings, damages,
assessment, judgments, costs and expenses, including reasonable attorney's fees
incurred by Seller as the result of the failure or refusal by Buyer to defend or
compromise any claim incident to, or otherwise fail to comply with, any of the
foregoing provisions.

(d) If any claim or liability shall be asserted against the Seller
which would give rise to a claim by the Seller against Buyer for indemnification
under the provisions of this section, the Seller shall promptly notify Buyer of
the same and give all reasonable cooperation in the defense thereof and Buyer
shall be entitled at its own expense to compromise or defend any such claim.

16
<PAGE> 17
SECTION 10. RISK OF LOSS. The risk of any loss, damage or
destruction to any of the Stations' Assets to be transferred hereunder from fire
or other casualty or cause shall be borne by the Seller at all times prior to
the Closing Date hereunder excepting that caused by Buyer.

SECTION 11. SELLER'S PERFORMANCE AT CLOSING. At the closing
hereunder, the Seller will:

(a) FCC LICENSES. Deliver to Buyer assignments of the licensees and
other pertinent authorizations set forth on Schedule A attached hereto,
transferring the same to Buyer in customary form and substance.

(b) PERSONAL PROPERTY. Deliver to Buyer a bill of sale and all other
appropriate documents and instruments in customary form and substance assigning
good and marketable title to all personal property described in Schedule D
attached hereto, free and clear of any mortgages, liens, attachments,
conditional sales contracts, claims or encumbrances of any kind whatsoever.
Seller shall pay all state and local sales tax, if any, due upon such transfer.

(c) ASSIGNMENT OF AGREEMENTS. Deliver to Buyer such assignments and
further instruments of transfer a Buyer may reasonably require to effectuate the
assignments to it of those business contracts, leases and agreements to be
assigned to it as set on Schedule B attached to this Agreement.

(d) ADJUSTMENTS AND PAYMENT. If the adjustments and assumptions
provided for in Section 3 hereof result in a net amount owing by the Seller to
Buyer, deliver a good check, subject to collection, at the Closing Date.

(e) RESOLUTIONS, ETC. Deliver to Buyer a certified copy of a
resolution of the Seller's Board of Directors and stockholders authorizing the
execution of this Agreement and the

17
<PAGE> 18
consummation of the transactions described herein, together with all other
consents and approvals which counsel for Buyer may reasonable request.

(f) OTHER DOCUMENTS. Deliver to Buyer such other documents as
counsel for Buyer may reasonably request for the purpose of consummating the
transactions described herein.

SECTION 12. BUYER'S PERFORMANCE AT CLOSING. At the closing:

(a) PAYMENTS, ETC. Buyer will cause to be delivered to Seller all
monies from Buyer as provided for in this Agreement.

(b) ASSUMPTION. Buyer will assume the contracts, leases and business
agreements set forth on Schedule B attached hereto.

(c) ADJUSTMENTS AND PAYMENT. Buyer will, if the adjustments and
assumptions provided for in Section 3 hereof result in a net amount owing to the
Seller by Buyer, deliver a good check, subject to collection, at the Closing.

(d) OPINION. Deliver the written opinion of its counsel, dated as of
the Closing Date, pursuant to the provisions of this Agreement.

(e) OTHER DOCUMENTS. Deliver to the Seller such other documents as
counsel for Seller may reasonably request for the purpose of consummating the
transactions described herein.

SECTION 13. DEFAULT.

(a) In the event of a material breach by Buyer prior to the Closing
of any term or condition of this Agreement or any warranty or representation
contained herein, Seller may terminate this Agreement and retain as its sole
property the Fifty Thousand Dollar ($50,000.00) Escrow Deposit. It is understood
and agreed that such sum shall constitute full payment for any

18
<PAGE> 19
and all damages suffered by Seller by reason of Buyer's failure to close this
Agreement. The parties agree in advance that Fifty Thousand Dollars ($50,000.00)
is a fair and equitable amount to reimburse for damages sustained due to Buyer's
failure to consummate this Agreement because of the above-stated reason and that
this provision shall constitute a liquidated damages provision between the
parties.

(b) In the event of a material breach by Seller prior to the
Closing, Buyer shall have the right to specific performance or to sue for
damages.

SECTION 14. MISCELLANEOUS.

(a) SCHEDULES AND EXHIBITS. All schedules and exhibits attached to
this Agreement (and all other documents referred to therein) shall be deemed
part of this Agreement and incorporated herein, where applicable, as if fully
set forth herein.

(b) NO ASSIGNMENT, SUCCESSORS, ASSIGNS, ETC. This Agreement shall
not be assigned or conveyed by any party hereto to any other person or entity
without the prior written consent of the other parties hereto. This Agreement
shall be binding upon and shall inure or the benefit of the parties hereto,
their heirs, personal representatives, involuntary successors and assigns.

(d) COUNTERPARTS. This Agreement may be executed simultaneously in
any number of counterparts, each of which shall be deemed an original, but all
of which shall constitute one and the same instrument.

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<PAGE> 20
(e) NOTICES. Any notice or other communications shall be in writing
and shall be considered to have been duly given when personally delivered or
deposited into first class certified mail, postage prepaid, return receipt
requested:

(i) If to the Seller to:

Spanish Broadcasting System of Florida, Inc.
3191 Coral Way
Suite 805
Miami, Florida 33145
ATTN: Mr. Raul Alarcon, Jr., President and CEO

cc: Jason L. Shrinsky, Esq.
Kaye, Scholer, Fierman, Hays & Handler
901 Fifteenth Street, N.W.
Suite 1100
Washington, D.C. 20005

(ii) If to the Buyer to:

Mr. Raul Alarcon, Sr.
Spanish Broadcasting System of Florida, Inc.
1001 Ponce de Leon Blvd
Coral Gables, Florida 33134

(f) INTEGRATION. Except as herein expressly provided, this Agreement
embodies the entire agreement and understanding between Seller and Buyer, and
supersedes all prior agreements and understandings, whether oral or in writing,
with respect to the purchase and sale of the Stations' Assets.

(g) AMENDMENT. This Agreement shall not be amended or modified in
any manner except by written document executed by the party or parties whom
enforcement of such amendment or modification may be sought.

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<PAGE> 21
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized officers on the day and year first above
written.

ATTEST: SPANISH BROADCASTING SYSTEM OF FLORIDA, INC.

________________ By: _____________________________________
Raul Alarcon, Jr., President and CEO

ATTEST:

________________ By: ______________________________________
Raul Alarcon, Sr.

21
<PAGE> 22
SCHEDULES AND EXHIBITS

SCHEDULE A Licenses, Permits & Authorizations

SCHEDULE B Contracts, Leases & Business Agreements

SCHEDULE C Copyrights, etc.

SCHEDULE D Personal Property

SCHEDULE E Real Property Leases

EXHIBIT 1 Escrow Agreement

<PAGE> 1
EXHIBIT 10.35

FORM OF INDEMNIFICATION AGREEMENT

INDEMNIFICATION AGREEMENT, dated as of ___________, 1999 between
Spanish Broadcasting System, Inc., a Delaware corporation (the "Company"), and
_____________ ("Indemnitee").

WHEREAS, it is essential that the Company retain as directors and
executive officers the most capable persons available;

WHEREAS, Indemnitee is or was a director [or executive officer] of
the Company;

WHEREAS, both the Company and Indemnitee recognize the increased
risk of litigation and other claims being asserted against directors of public
companies in today's environment;

WHEREAS, the Third Amended and Restated Certificate of Incorporation
of the Company (the "Charter") requires the Company to indemnify directors,
officers and certain other persons to the fullest extent permitted by law and
Indemnitee has been serving and continues to serve as a director [or executive
officer] of the Company in part in reliance on the Charter;

WHEREAS, in recognition of Indemnitee's need for substantial
protection against personal liability and to provide Indemnitee with specific
contractual assurance that the protection provided by the Charter will be
available to Indemnitee (regardless of, among other things, any amendment to or
revocation of the Charter or any change in the composition of the Company's
Board of Directors or any acquisition transaction relating to the Company), the
Company wishes to provide in this agreement for the indemnification of and the
advancement of expenses to Indemnitee to the fullest extent permitted by law and
as set forth in this agreement, and, to the extent insurance is maintained, for
the continued coverage of Indemnitee under the Company's directors' and
officers' liability insurance policies.

NOW, THEREFORE, in consideration of the premises and intending to be
legally bound hereby, the parties hereto agree as follows:

1. CERTAIN DEFINITIONS.

(a) Change in Control: shall be deemed to have occurred if, (i) any
"person" (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended), other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company or a
corporation owned directly or indirectly by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company,
becomes the "beneficial owner" (as defined in Rule 13d-3 under said Act),
directly or indirectly, of securities of the Company representing 15% or more of
the total voting power represented by
<PAGE> 2
the Company's then outstanding Voting Securities, or (ii) during any period of
two consecutive years, individuals who at the beginning of such period
constitute the Board of Directors of the Company and any new director whose
election by the Board of Directors or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so approved,
cease for any reason to constitute a majority thereof, or (iii) the stockholders
of the Company approve a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in the
Voting Securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into Voting Securities of the surviving entity) at least 80% of the total voting
power represented by the Voting Securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation, or the
stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of (in one
transaction or a series of transactions) all or substantially all of the
Company's assets.

(b) Claim: any threatened, pending or completed action, suit,
proceeding, arbitration, alternate dispute resolution mechanism, (whether civil,
criminal, administrative or investigative, whether instituted by or in the right
of the Company or any other party, that Indemnitee in good faith believes might
lead to the institution of any such action, suit, proceeding, arbitration or
alternate dispute resolution mechanism, whether civil, criminal, administrative
or investigative, arising from or in connection with the fact that Indemnitee,
or a person for whom Indemnitee is the legal representative, is or was a
director or officer of the Company, or is or was serving at the request of the
Company as a director, officer, employee or agent of another corporation or of a
partnership, joint venture, trust, enterprise or nonprofit entity, including
service with respect to employee benefit plans.

(c) Expenses: include reasonable attorneys' fees and all other
costs, expenses and obligations actually and reasonably incurred by the
Indemnitee in connection with investigating, defending, or preparing to defend
any Claim.

(d) Independent Legal Counsel: an attorney or firm of attorneys,
selected in accordance with the provisions of Section 3, who shall not have
otherwise performed services for the Company or Indemnitee within the last five
years (other than with respect to matters concerning the rights of Indemnitee
under this Agreement, or of other indemnitees under similar indemnity
agreements).

(e) Reviewing Party: (1) a Majority of directors who are not parties
to the action, even though less than a quorum, or (2) a Committee of such
directors designated by majority vote of such directors, even though less than a
quorum, or (3) if there are no such directors, or if such directors so direct,
independent legal counsel, or (4) the stockholders.

(f) Voting Securities: any securities which vote generally in the
election of directors.

2
<PAGE> 3
2. INDEMNIFICATION.

(a) In General. In connection with any Claim, whether relating to
events occurring before or after the Effective Date, the Company shall
indemnify, and advance Expenses, to Indemnitee as provided in this Agreement and
to the fullest extent permitted by law.

(b) Claims Other Than Claims by or in the Right of the Company. In
the event Indemnitee was, is or becomes a party to or witness or other
participant in, or is threatened to be made a party to or witness or other
participant in any proceeding pursuant to any Claim, other than a Claim by or in
the right of the Company, the Company shall, subject to Sections 2(e) and 2(f),
indemnify Indemnitee against any and all Expenses, judgments, fines, penalties
and amounts paid in settlement (including all interest, assessments and other
charges paid or payable in connection with or in respect of such Expenses,
judgments, fines, penalties or amounts paid in settlement) of such Claim;
provided, however, that Indemnitee shall not be entitled to indemnification
pursuant to this Section 2(b) in connection with conduct finally adjudged as
constituting acts or omissions not in good faith or which involved a knowing
violation of the law.

(c) Proceedings by or in the Right of the Company. In the event
Indemnitee was, is or becomes a party to or witness or other participant in, or
is threatened to be made a party to or witness or other participant in any
proceeding pursuant to any Claim brought by or in the right of the Company to
procure a judgment in its favor, the Company shall, subject to Sections 2(e) and
2(f), indemnify Indemnitee against any and all Expenses (including all interest,
assessments and other charges paid or payable in connection with or in respect
of such Expenses) of such Claim. Notwithstanding the foregoing, no such
indemnification shall be made in respect of any Claim, issue or matter as to
which Indemnitee shall have been finally adjudged to be liable to the Company
unless and only to the extent that the Court of Chancery or the court in which
such Claim was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case,
Indemnitee is fairly and reasonably entitled to indemnity for such Expenses
which the Court of Chancery or such other court shall deem proper.

(d) Payment of Indemnification; Advancement of Expenses. Subject to
Sections 2(e) and 2(f), the Company shall indemnify Indemnitee as soon as
practicable but in any event no later than 60 days after written demand is
presented to the Company. If so requested by Indemnitee, the Company shall
advance (within 10 business days of such request) any and all Expenses to
Indemnitee (an "Expense Advance"); provided, however, that the payment of
Expenses incurred by Indemnitee in advance of the final disposition of the Claim
will be made only upon receipt by the Company of an undertaking by the
Indemnitee to repay all amounts advanced if it should be ultimately determined
that the Indemnitee is not entitled to be indemnified under this Agreement or
otherwise.

(e) Indemnitee Not Entitled to Indemnification. Notwithstanding
anything in this Agreement to the contrary, Indemnitee shall not be entitled to
indemnification pursuant to this Agreement in connection with any Claim (or part
thereof) initiated by Indemnitee unless the Board of Directors has authorized or
consented to the initiation of such Claim (or part thereof).

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<PAGE> 4
(f) Determination of Entitlement. Notwithstanding anything in this
Agreement to the contrary, (i) the obligations of the Company under this Section
2 shall be subject to the condition that the Reviewing Party shall not have
determined (in a written opinion, in any case in which the Independent Legal
Counsel referred to in Section 3 is involved) that Indemnitee would not be
permitted to be indemnified under applicable law, and (ii) the obligation of the
Company to make an Expense Advance pursuant to Section 2(d) shall be subject to
the condition that, if, when and to the extent that the Reviewing Party
determines that Indemnitee would not be permitted to be so indemnified under
applicable law, the Company shall be entitled to be reimbursed by Indemnitee
(who hereby agrees to reimburse the Company) for all such amounts theretofore
paid; provided, however, that if Indemnitee has commenced or thereafter
commences legal proceedings in a court of competent jurisdiction to secure a
determination that Indemnitee should be indemnified under applicable law, any
determination made by the Reviewing Party that Indemnitee would not be permitted
to be indemnified under applicable law shall not be binding and Indemnitee shall
not be required to reimburse the Company for any Expense Advance until a final
judicial determination is made with respect thereto (as to which all rights of
appeal therefrom have been exhausted or lapsed). If there has not been a Change
in Control, the Reviewing Party shall be selected by the Board of Directors, and
if there has been such a Change in Control (other than a Change in Control which
has been approved by a majority of the Company's Board of Directors who were
directors immediately prior to such Change in Control), the Reviewing Party
shall be the Independent Legal Counsel referred to in Section 3. If there has
been no determination by the Reviewing Party within 60 days after written demand
for indemnification made under Section 2(d) or if the Reviewing Party determines
that Indemnitee would not be permitted to be indemnified in whole or in part
under applicable law, Indemnitee shall have the right to commence litigation in
any court in the State of Delaware having subject matter jurisdiction thereof
and in which venue is proper seeking an initial determination by the court or
challenging any such determination by the Reviewing Party or any aspect thereof,
including the legal or factual bases therefor, and the Company hereby consents
to service of process and to appear in any such proceeding. Any determination by
the Reviewing Party otherwise shall be conclusive and binding on the Company and
Indemnitee.

3. CHANGE IN CONTROL.

If there is a Change in Control of the Company (other than a Change in
Control which has been approved by a majority of the Company's Board of
Directors who were directors immediately prior to such Change in Control), then
with respect to all matters thereafter arising concerning the rights of
Indemnitee to indemnity payments and Expense Advances under this Agreement, the
Company shall seek legal advice only from Independent Legal Counsel selected by
Indemnitee and approved by the Company (which approval shall not be unreasonably
withheld). Such counsel, among other things, shall render its written opinion to
the Company and Indemnitee as to whether and to what extent Indemnitee would be
permitted to be indemnified under applicable law. The Company shall pay the
reasonable fees of the Independent Legal Counsel referred to above and fully
indemnify such counsel against any and all expenses (including reasonable
attorneys' fees), claims, liabilities and damages arising out of or relating to
this Agreement or its engagement pursuant hereto.

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<PAGE> 5
4. INDEMNIFICATION FOR ADDITIONAL EXPENSES.

The Company shall indemnify Indemnitee against any and all Expenses
(including reasonable attorneys' fees) and, if requested by Indemnitee, shall
(within 10 business days of such request) advance such Expenses to Indemnitee,
which are incurred by Indemnitee in connection with any action brought by
Indemnitee for (i) indemnification or advance payment of Expenses by the Company
under this Agreement, the Charter or any other agreement, certificate of
incorporation or Company by-law now or hereafter in effect relating to Claims
and/or (ii) recovery under any directors' and officers' liability insurance
policies maintained by the Company; provided, however, that the payment of
Expenses incurred by Indemnitee in advance of the final disposition of such
action will be made only upon receipt by the Company of an undertaking by the
Indemnitee to repay all amounts advanced if it should be ultimately determined
that the Indemnitee is not entitled to be indemnified under this Agreement or
otherwise.

5. PARTIAL INDEMNITY.

If Indemnitee is entitled under any provision of this Agreement to
indemnification by the Company for a portion of the Expenses, judgments, fines,
penalties and amounts paid in settlement of a Claim but not, however, for the
total amount thereof, the Company shall nevertheless indemnify Indemnitee for
the portion thereof to which Indemnitee is entitled. Moreover, notwithstanding
any other provision of this Agreement, to the extent that Indemnitee has been
successful on the merits or otherwise in defense of any or all Claims or in
defense of any issue or matter therein, including dismissal without prejudice,
Indemnitee shall be indemnified against all Expenses incurred in connection
therewith.

6. BURDEN OF PROOF.

In connection with any determination by the Reviewing Party or otherwise
as to whether Indemnitee is entitled to be indemnified hereunder, the burden of
proof shall be on the Company to establish that Indemnitee is not so entitled.

7. NO PRESUMPTIONS.

For purposes of this Agreement, the termination of any claim, action, suit
or proceeding, by judgment, order, settlement (whether with or without court
approval) or conviction, or upon a plea of nolo contendere, or its equivalent,
shall not create a presumption that Indemnitee did not meet any particular
standard of conduct or have any particular belief or that a court has determined
that indemnification is not permitted by applicable law. In addition, neither
the failure of the Reviewing Party to have made a determination as to whether
Indemnitee has met any particular standard of conduct or had any particular
belief, nor an actual determination by the Reviewing Party that Indemnitee has
not met such standard of conduct or did not have such belief, prior to the
commencement of legal proceedings by Indemnitee to secure a judicial
determination that Indemnitee should be indemnified under applicable law shall
be a defense to

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<PAGE> 6
Indemnitee's claim or create a presumption that Indemnitee has not met any
particular standard of conduct or did not have any particular belief.

8. NONEXCLUSIVITY.

The rights of Indemnitee hereunder shall be in addition to any other
rights Indemnitee may have under the Charter, the Company's by-laws, the
Delaware General Corporation Law or otherwise. To the extent that a change in
the Delaware General Corporation Law (whether by statute or judicial decision)
permits greater indemnification by agreement than would be afforded currently
under the Charter and this Agreement, it is the intent of the parties hereto
that Indemnitee shall enjoy by this Agreement the greater benefits so afforded
by such change.

9. LIABILITY INSURANCE.

Subject to the availability of insurance at substantially similar rates
for similar coverage (as determined in the sole discretion of the Company), the
Company will maintain insurance (i) at the levels in effect as of the date
hereof with respect to Indemnitee until the _____ anniversary of the date
hereof, or (ii) at the levels in effect as of the date of the expiration of the
term, death, removal, retirement or resignation of Indemnitee for a period of
_____ years after such event, whichever level is greater, in either case, with
respect to any Claim, against all liability and loss suffered and Expenses
(including reasonable attorney's fees) reasonably incurred by Indemnitee at the
Company's expense, to protect the Company and Indemnitee against any such
liability, cost, payment or Expense; provided, however, that subject to the
provisions of this Section 9, the Company shall only be required to maintain
insurance until the earlier of the date which is (a) ___ years after the
expiration of the term, death, removal, retirement or resignation of Indemnitee
and (b) the _____ anniversary of the date hereof.

10. AMENDMENTS AND WAIVERS.

No supplement, modification or amendment of this Agreement shall be
binding unless executed in writing by the parties hereto. No waiver of any of
the provisions of this Agreement shall be deemed or shall constitute a waiver of
any other provisions hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver.

11. SUBROGATION.

In the event of payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee, who shall execute all papers required and shall do everything that
may be necessary to secure such rights, including the execution of such
documents necessary to enable the Company effectively to bring suit to enforce
such rights.

12. NO DUPLICATION OF PAYMENTS.

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The Company shall not be liable under this Agreement to make any payment
in connection with any Claim made against Indemnitee to the extent Indemnitee
has otherwise actually received payment (under any insurance policy, the Charter
or otherwise) of the amounts otherwise indemnifiable hereunder.

13. BINDING EFFECT.

This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the parties hereto and their respective successors, assigns,
including any direct or indirect successor by purchase, merger, consolidation or
otherwise to all or substantially all of the business and/or assets of the
Company, spouses, heirs, executors and personal and legal representatives. This
Agreement shall continue in effect regardless of whether Indemnitee continues to
serve as an executive officer or director of the Company or of any other
enterprise at the Company's request.

14. SEVERABILITY.

The provisions of this Agreement shall be severable in the event that any
of the provisions hereof (including any provision within a single section,
paragraph or sentence) is held by a court of competent jurisdiction to be
invalid, void or otherwise unenforceable in any respect, and the validity and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired and shall remain enforceable
to the fullest extent permitted by law.

15. GOVERNING LAW.

This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware applicable to contracts made
and to be performed in such state without giving effect to the principles of
conflicts of laws.

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<PAGE> 8
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.

SPANISH BROADCASTING SYSTEM, INC.

By:
` --------------------------------
Name:

Title:

INDEMNITEE

-----------------------------------

<PAGE> 1
EXHIBIT 10.36

FORM OF SPANISH BROADCASTING SYSTEM
1999 STOCK OPTION PLAN

1. PURPOSES.

The purposes of the Plan are to further the growth, development and
financial success of Spanish Broadcasting System, Inc. (the "Company") and its
Subsidiaries by providing incentives to those officers and key employees who
have the capacity to contribute in substantial measure toward the growth and
profitability of the Company and to assist the Company in attracting and
retaining employees with the ability to make such contributions. To accomplish
such purposes, the Plan provides that the Company may grant such employees
either Nonqualified Stock and Incentive Stock Options, or both.

2. DEFINITIONS.

Wherever the masculine gender is used in the Plan, it shall include the
feminine and neuter and wherever a singular pronoun is used, it shall include
the plural, unless the context clearly indicates otherwise. Whenever the
following terms are used in the Plan, they shall have the meaning specified
below, unless the context clearly indicates to the contrary.

"Board" shall mean the Board of Directors of the Company.

"Cause" shall mean an Employee's willful failure to perform his duties
with the Company or a Subsidiary or the willful engaging in conduct which is
injurious to the Company or a Subsidiary, monetarily or otherwise, as determined
by the Committee in its sole discretion, provided that, if an Employee has
entered into an employment agreement with the Company or a Subsidiary, the
definition, if any, set forth in such agreement shall be substituted for the
above.

"Change in Control" shall mean:

(a) any "person," as such term is defined in Section 13(d) and
14(d) of the Exchange Act , other than the Company, any Subsidiary, Raul Alarcon
Jr. (or his spouse, heirs, assigns, legatees or trust for Mr. Alarcon's or any
of the foregoing's benefit) or any trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any Subsidiary, becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing fifty percent (50%)] or
more of the combined voting power of the Company's then outstanding securities;

(b) during any two consecutive years, individuals who at the
beginning of such period constitute the Board, and any new director, whose
election by the Board or nomination for election by the Company's shareholders
was approved by a vote of at least two-thirds (2/3) of the directors then still
in office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute at least a majority of the Board;
<PAGE> 2
(c) the stockholders of the Company approve a merger or
consolidation of the Company with any other company other than (i) a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than eighty percent (80%) of the combined voting power of
the voting securities of the Company (or such surviving entity) outstanding
immediately after such merger or consolidation, or (ii) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no "person" (as hereinabove defined) acquires more
than fifty percent (50%) of the combined voting power of the Company's then
outstanding securities; or

(d) the stockholders of the Company adopt a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets.

"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.

"Committee" shall mean the Compensation Committee of the Board,
appointed as provided in Section 6.1, or, if no such Committee has been
appointed, the Board.

"Company" shall mean Spanish Broadcasting System, Inc., a Delaware
corporation, and any successor corporation.

"Designated Beneficiary" shall mean any individual designated by an
Optionee, in a manner determined by the Committee, to receive amounts due the
Optionee in the event of the Optionee's death. In the absence of an effective
designation by the Optionee, Designated Beneficiary shall mean the Optionee's
estate.

"Director" shall mean a member of the Board.

"Employee" shall mean any employee (including any officer whether or
not a Director) of the Company, or of any corporation which is then a
Subsidiary, who has been designated by the Board to participate in the Plan.

"Early Retirement" shall mean an Employee's retirement from active
employment with the Company or a Subsidiary in accordance with the early
retirement provisions of a pension plan maintained by the Company or a
Subsidiary, provided that, if no such plan is in existence, it shall mean the
attainment of age fifty-five (55) and the completion of fifteen (15) years of
service.

"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

"Fair Market Value" per Share as of a particular date shall mean,
unless otherwise determined by the Committee:

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<PAGE> 3
(a) the closing sales price per Share on a national securities exchange
for the preceding ten days on which there was a sale of Shares on such exchange;
or

(b) if clause (a) does not apply and the Shares are then quoted on the
National Association of Securities Dealers Automated Quotation system
("NASDAQ"), the closing price per Share as reported on NASDAQ for the preceding
ten (10) days on which a sale was reported; or

(c) if neither clause (a) or (b) applies and the Shares are then traded
on an over-the-counter market, the average of the closing bid and asked prices
for the Shares in such over-the counter market for the preceding ten (10) days
on which such bid and asked prices were quoted; or

(d) if the Shares are not then listed on a national securities exchange
or traded in an over-the-counter market, such value as the Committee, in its
sole discretion, may determine.

"Incentive Stock Option" shall mean an Option intended to be and
designated as an "incentive stock option" within the meaning of Section 422 of
the Code.

"Nonqualified Stock Option" shall mean an Option that is not an
Incentive Stock Option.

"Normal Retirement" shall mean an Employee's retirement from active
employment with the Company or a Subsidiary in accordance with the normal
retirement provisions of a pension plan maintained by the Company or a
Subsidiary, provided that, if no such plan exists, it shall mean retirement on
or after attainment of age sixty-five (65).

"Option" shall mean an option to purchase Shares granted pursuant to
Section 4.1.

"Optionee" shall mean an Employee to whom an Option has been granted
pursuant to the Plan.

"Permanent Disability" shall mean a physical or mental incapacity that
renders an Optionee incapable of engaging in any substantial gainful employment,
or that has lasted for a continuous period of no less than six consecutive
months, or six months in any twelve-month period, as determined by the Committee
in good faith in its sole discretion, provided that, if an Employee has entered
into an employment agreement with the Company or a Subsidiary, the definition
set forth in such agreement shall be substituted for the above definition. All
determinations as to the date and extent of disability of any Optionee shall be
made by the Committee upon the basis of such evidence as it deems necessary or
desirable.

"Plan" shall mean the Spanish Broadcasting System 1999 Stock Option
Plan, as amended from time to time.

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<PAGE> 4
"Retirement" shall mean an Optionee's (a) Early Retirement which the
Committee, in its sole discretion, has determined should be treated as a
Retirement for purposes of the Plan, or (b) Normal Retirement.

"Securities Act" shall mean the Securities Act of 1933, as amended.

"Share" shall mean a share of the Company's Class A Common Stock, .01
par value per share.

"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company, if each such corporation (other than
the last corporation in the unbroken chain), or if each group of commonly
controlled corporations, then owns fifty percent (50%) or more of the total
combined voting power in one of the other corporations in such chain.

"Ten-Percent Stockholder" shall mean an Employee, who, at the time an
Incentive Stock Option is to be granted to him, owns (within the meaning of
Section 422(b)(6) of the Code) stock possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company or a
Subsidiary (or, if applicable, a parent corporation within the meaning of
Section 424(e) of the Code).

"Termination of Employment" shall mean the Employee's termination of
employment for any reason whatsoever, excluding any termination where there is a
simultaneous reemployment by either the Company or a Subsidiary, provided that,
if a corporation that is a Subsidiary ceases to be a Subsidiary as a result of a
sale of stock, such sale shall be deemed to be a Termination of Employment of
the Optionees who were employed by such corporation immediately prior to such
sale.

3. ELIGIBILITY.

Any Employee (whether or not a Director) who is an officer or who is
designated by the Committee as a key Employee shall be eligible to be granted
Options under the Plan.

4. TERMS OF OPTIONS.

4.1 TERMS OF OPTIONS.

(a) Price. The exercise price for the Shares subject to an Option, or
the manner in which such exercise price is to be determined, shall be determined
by the Committee, provided that, the exercise price per Share of any Incentive
Stock Option shall not be less than 100% of the Fair Market Value of a Share as
of the date the Option is granted (110% in the case of an Incentive Stock Option
granted to a Ten-Percent Stockholder).

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<PAGE> 5
(b) Term. Options shall be for such term as the Committee shall
determine, provided that no Option shall be exercisable after the expiration of
ten years from the date it is granted (five years in the case of an Incentive
Stock Option granted to a Ten-Percent Stockholder).

(c) Vesting. Options shall be exercisable in such installments (which
need not be equal) and at such times as the Committee may designate, as set
forth in an Option Agreement. To the extent not exercised, installments shall
accumulate and may be exercised, in whole or in part, at any time after becoming
exercisable, but not later than the date the Option expires. The Committee may
accelerate the exercisability of an Option at any time. Notwithstanding the
foregoing, any Options that are not exercisable prior to a Change in Control
shall become exercisable on the date of such Change in Control and shall remain
exercisable for the remainder of their Term.

(d) Exercise of Option After Termination of Employment.

Subject to the terms of any written employment agreement and reflected
in an option agreement, an Option granted under the Plan is exercisable by an
Optionee only while he is an Employee, provided that any Options that are
exercisable preceding an Optionee's Termination of Employment for any reason
other than Cause, shall remain exercisable for the following period.

(i) If the Optionee dies while an Employee, or if his
Termination of Employment is due to Permanent Disability or Retirement, the
Optionee (or his Beneficiary or personal representative, as applicable) may
exercise the Option no later than twelve (12) months after such death or
determination;

(ii) If the Optionee's Termination of Employment is for any
reason other than those set forth in (i) above and is not for Cause, the
Optionee may exercise the Option within three months after such termination; or

(iii) If the Optionee dies during a period described in (i) or
(ii) above, his Beneficiary may exercise such Option no later than the
expiration of such extended period;

(iv) Notwithstanding (i) through (iii) above or anything in an
Option Agreement or the Plan to the contrary, at any time after the grant of an
Option, the Committee, in its sole and absolute discretion and subject to
whatever terms and conditions it selects, may provide that an Option may be
exercised after the relevant extended period set forth above, but in no event
later than the date that it would have expired under the Option Agreement.

4.2 NONTRANSFERABILITY.

No Option granted hereunder shall be transferable by the
Optionee to whom granted otherwise than by will or the laws of descent and
distribution, and an Option may be exercised during the lifetime of such
Optionee only by the Optionee or his guardian or legal representative; provided,
however that an Optionee may designate a Beneficiary to exercise his Option or
other rights under the Plan after his death and, in the discretion of the
Committee, Options may be

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<PAGE> 6
transferable pursuant to a Qualified Domestic Relations Order ("QDRO"), as
determined by the Committee or its designee.

4.3 METHOD OF EXERCISE.

An Option shall be exercised by delivery of a written notice
(in person or by first class mail to the Secretary of the Company at the
Company's principal executive office) which specifies the number of Shares to be
purchased and is accompanied by full payment therefor and otherwise in
accordance with the Option Agreement pursuant to which the Option was granted.
The purchase price for any Shares purchased pursuant to the exercise of an
Option shall be paid in full upon such exercise in cash, by check or, at the
discretion of the Committee and upon such terms and conditions as the Committee
shall approve, by transferring previously owned Shares to the Company, having
Shares withheld or exercising pursuant to a "cashless exercise" procedure, or
any combination thereof. Any Shares transferred to the Company as payment of the
purchase price under an Option shall be valued at their Fair Market Value on the
date of exercise of such Option. If requested by the Committee, the Optionee
shall deliver the Option Agreement evidencing the Option to the Secretary of the
Company who shall endorse thereon a notation of such exercise and return such
Option Agreement to the Optionee. Not less than one hundred (100) Shares may be
purchased at any time upon the exercise of an Option unless the number of Shares
so purchased constitutes the total number of Shares then purchasable under the
Option or the Committee determines otherwise, in its sole discretion.

5. ADMINISTRATION.

5.1 COMPOSITION OF COMPENSATION COMMITTEE.

The Plan shall be administered by the Committee, which shall
consist of at least two individuals appointed by and serving at the pleasure of
the Board, provided that each Committee member must qualify as an "outside
director" as such term is used in Section 162(m) of the Code, unless the Board
determines otherwise, in its sole discretion. All Committee members shall be
members of the Board. Appointment of Committee members shall be effective upon
acceptance of appointment. Committee members may resign at any time by
delivering thirty (30) days advance written notice to the Board and may be
removed by the Board at any time for any reason. Vacancies in the Committee
shall be filled by the Board.

5.2 DUTIES AND POWERS OF COMMITTEE.

(a) Subject to the provisions hereof, the Committee shall have (a) the
sole and complete authority to determine which Employees shall be granted
options, the number of Shares to be covered by each Option, the exercise price
therefor and the terms and conditions applicable to the exercise of the Option,
(b) the authority to grant Incentive Stock Options, Nonqualified Stock Options
or both. In the case of Incentive Stock Options, the terms and conditions of
such grants shall be subject to and shall comply with Section 422 of the Code
and any rules or regulations promulgated thereunder, including the requirement
that the aggregate Fair Market Value (determined

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<PAGE> 7
as of the date of grant) of the Shares granted under the Plan and all other
option plans of the Company and any Subsidiary (and, if applicable, any parent
corporation, within the meaning of Section 424(e) of the Code) that become
exercisable by an Optionee during any calendar year shall not exceed $100,000.
To the extent that the limitation set forth in the preceding sentence is
exceeded for any reason (including the acceleration of the time for exercise of
an Option), the Options with respect to such excess amount shall be treated as
Nonqualified Stock Options.

(b) It shall be the duty of the Committee to conduct the general
administration of the Plan in accordance with its terms and provisions. The
Committee shall have the power to interpret the Plan and to adopt such rules for
the administration, interpretation and application of the Plan as are consistent
therewith and to interpret, amend or revoke any such rules. All actions taken
and all interpretations and determinations made by the Committee shall be
binding upon all persons, including, but not limited to, the Company,
stockholders, all Subsidiaries, Employees, Directors, Optionees and Designated
Beneficiaries.

5.3 COMMITTEE ACTIONS.

The Committee shall act by a majority of its members in office
in attendance at a meeting at which a quorum is present or by a memorandum or
other written instrument signed by all of the members of the Committee.

5.4 COMPENSATION; PROFESSIONAL ASSISTANCE.

Members of the Committee shall receive such compensation for
their services as members as may be determined by the Board. All expenses and
liabilities incurred by members of the Committee in connection with the
administration of the Plan shall be borne by the Company. The Committee may,
with the approval of the Board, employ attorneys, consultants, accountants,
appraisers, or other persons. The Committee, the Company and its officers and
Directors shall be entitled to rely upon the advice, opinions or valuations of
any such persons.

5.5 DELEGATION OF AUTHORITY.

The Committee may, in its sole and absolute discretion,
delegate to any proper officer of the Company, or more than one of them, any or
all of the administrative duties of the Committee under this Plan.

5.6 NO LIABILITY.

No member of the Board or the Committee, or Director, officer
of the Company or other Employee shall be liable, responsible or accountable in
damages or otherwise for any determination made or other action taken or any
failure to act by such person with respect to the Plan so long as such person is
not determined to be guilty by a final adjudication of willful misconduct with
respect to such determination, action or failure to act.

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<PAGE> 8
5.7 INDEMNIFICATION.

To the fullest extent permitted by law, each member of the
Board and the Committee and each Director, officer of the Company or Employee
shall be held harmless and be indemnified by the Company for any liability, loss
(including amounts paid in settlement), damages or expenses (including
reasonable attorneys' fees) suffered by virtue of any determinations, acts or
failures to act, or alleged acts or failures to act, in connection with the
administration of the Plan so long as such person is not determined by a final
adjudication to be guilty of willful misconduct with respect to such
determination, action or failure to act.

6. SHARES SUBJECT TO THE PLAN.

6.1 SHARES SUBJECT TO THE PLAN.

The maximum number of Shares that may be issued upon the
exercise of Options granted under the Plan is 3, 000,000. The Company shall
reserve such number of Shares for the purposes of the Plan, out of its
authorized but unissued Shares or out of Shares held in the Company's treasury,
or partly out of each. In the event that an Option expires or is terminated
unexercised as to any Shares covered thereby, or is canceled or forfeited for
any reason under the Plan without the delivery of Shares, or any Restricted
Shares are forfeited for any reason, such Shares shall thereafter be again
available for award pursuant to the Plan. The maximum number of Shares that may
be granted to an Optionee in any year is 500,000.

6.2 EFFECT OF CHANGES IN COMPANY'S SHARES.

In the event that the Committee determines that any stock
dividend, extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination, exchange of shares, warrants or
rights offering to purchase Shares at a price substantially below fair market
value, or other similar corporate event affects the Shares such that an
adjustment is required in order to preserve the benefits or potential benefits
intended to be made available under the Plan, the Committee shall, in its sole
discretion, and in such manner as the Committee may deem equitable, adjust any
or all of (a) the number and kind of shares subject to outstanding Options, and
(b) the exercise price with respect to any outstanding Option and/or, if deemed
appropriate, make provision for a cash payment to an Optionee, provided,
however, that the number of Shares subject to any Option shall always be a whole
number.

7. MISCELLANEOUS.

7.1 EFFECTIVE DATE; TERM OF PLAN.

The Plan has been approved by the Board and by the Company's
stockholders, and shall be effective as of September 30, 1999. The Plan shall
continue in effect until September 29, 2009.

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7.2 AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN.

The Plan may be wholly or partially amended or otherwise
modified, suspended or terminated at any time or from time to time by the Board.
Neither the amendment, suspension nor termination of the Plan shall, without the
consent of an Optionee, alter or impair any rights or obligations under any
option theretofore granted. No Options may be granted during any period of
suspension nor after termination of the Plan, and in no event may any Options be
granted under the Plan after September 29, 2009.

7.3 AMENDMENT OF OPTION.

The Committee may amend, modify or terminate any outstanding
Option with the Optionee's consent at any time prior to payment or exercise in
any manner not inconsistent with the terms of the Plan, including without
limitation, (a) to change the date or dates as of which an Option becomes
exercisable or Restricted Shares become vested, or (b) to cancel and reissue an
Option under such different terms and conditions as it determines appropriate.

7.4 NO RIGHTS AS STOCKHOLDER.

No holder of an Option shall be deemed to be or to have the
rights and privileges of an owner of Shares unless and until certificates
representing such Shares have been issued to such holder.

7.5 EFFECT OF PLAN UPON OTHER COMPENSATION AND INCENTIVE PLANS.

The adoption of the Plan shall not affect any other
compensation or incentive plans in effect for the Company or any Subsidiary.
Nothing in the Plan shall be construed to limit the right of the Company or any
Subsidiary to establish any other forms of incentives or compensation for
Employees.

7.6 REGULATIONS AND OTHER APPROVALS.

(a) The obligation of the Company to sell or deliver Shares with
respect to Options shall be subject to all applicable laws, rules and
regulations, including all applicable federal and state securities laws, and the
obtaining of all such approvals by governmental agencies as may be deemed
necessary or appropriate by the Committee.

(b) The Board may make such changes as may be necessary or appropriate
to comply with the rules and regulations of any government authority or to
obtain the tax benefits under the applicable provisions of the Code and
regulations promulgated thereunder for Employees granted Incentive Stock
Options.

9
<PAGE> 10
(c) Each Option is subject to the requirement that, if at any time the
Committee determines, in its sole discretion, that the listing, registration or
qualification of Shares issuable pursuant to the Plan is required by any
securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body is necessary or desirable as a
condition of, or in connection with, the grant of an Option or the issuance of
Shares, no Options shall be granted or Shares issued, in whole or in part,
unless listing, registration, qualification, consent or approval has been
effected or obtained free of any conditions as acceptable to the Committee.

(d) In the event that the disposition of Shares acquired pursuant to
the Plan is not covered by a then current registration statement under the
Securities Act, and is not otherwise exempt from such registration, such Shares
shall be restricted against transfer to the extent required by the Securities
Act or regulations thereunder, and the Committee may require any individual
receiving Shares pursuant to the Plan, as a condition precedent to receipt of
such Shares, to represent to the Company in writing that the Shares acquired by
such individual are acquired for investment only and not with a view to
distribution. The certificate for any Shares acquired pursuant to the Plan shall
include any legend that the Committee deems appropriate to reflect any
restrictions on transfer.

7.7 GOVERNING LAW.

The Plan and the rights of all persons claiming hereunder
shall be construed and determined in accordance with the laws of the State of
New York without giving effect to the choice of law principles thereof.

7.8 WITHHOLDING OF TAXES.

As a condition to the exercise of an Option and the continued
holding of shares received upon exercise of an Option, to the extent required by
law, no later than the date as to which an amount first becomes includible in
the gross income of an Optionee for federal income tax purposes with respect to
any award granted under the Plan, the Optionee shall pay to the Company, or make
arrangements satisfactory to the Company regarding the payment of, any federal,
state, or local taxes of any kind required by law or the Company to be withheld
with respect to such amount. The obligations of the Company under the Plan shall
be conditional on such payment or arrangements and the Company and its
Subsidiaries shall, to the extent permitted by law, have the right to deduct any
such taxes from any payment of any kind otherwise due to the Optionee. In its
discretion, the Committee may permit an Optionee to satisfy withholding
obligations by delivering previously owned Shares or by electing to have Shares
withheld.

7.9 NO RIGHT TO CONTINUED EMPLOYMENT.

Nothing in the Plan or in any award agreement shall confer
upon any Employee any right to continue in the employ of the Company or any
Subsidiary or shall interfere with or restrict in any way the right of the
Company and its Subsidiaries, which are hereby expressly reserved, to remove,
terminate or discharge any Employee at any time for any reason whatsoever, with
or without Cause.

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<PAGE> 11
7.10 TITLES; CONSTRUCTION.

Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of the Plan. The masculine
pronoun shall include the feminine and neuter and the singular shall include the
plural, when the context so indicates.

<PAGE> 1
EXHIBIT 10.37

FORM OF SPANISH BROADCASTING SYSTEM
1999 STOCK OPTION PLAN
FOR NONEMPLOYEE DIRECTORS

1. PURPOSE.

The purpose of the Plan is to promote the interests of Spanish
Broadcasting System, Inc. (the "Company") and its shareholders by increasing the
proprietary and personal interest of nonemployee members of the Board in the
growth and continued success of the Company by granting them Options to purchase
shares of the Company's stock.

2. DEFINITIONS.

Whenever the following terms are used in this Plan, they shall have the
meaning specified below unless the context clearly indicates to the contrary.

"Board" shall mean the Board of Directors of the Company.

"Change in Control" shall mean the occurrence of any of the following:

(a) any "person" as such term is defined in Sections 13(d) and 14(d) of
the Exchange Act (other than the Company or any Subsidiary or any trustee or
other fiduciary holding securities under an employee benefit plan of the Company
or any Subsidiary), becomes the beneficial owner (within the meaning of Rule
13d-3 under the Exchange Act) directly or indirectly, of securities of the
Company representing fifty percent (50%) or more of the combined voting power of
the Company's then outstanding securities;

(b) during any two consecutive years, individuals who at the beginning
of such period constitute the Board, and any new director (whose election by the
Board or nomination for election by the Company's shareholders was approved by a
vote of at least two-thirds (2/3) of the directors then still in office who
either were directors at the beginning of the period or whose election or
nomination for election was previously so approved), cease for any reason to
constitute at least a majority of the Board;

(c) the stockholders of the Company approve a merger or consolidation
of the Company with any other company other than (i) a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than eighty percent (80%) of the combined voting power of the
voting securities of the Company (or such surviving entity) outstanding
immediately after such merger or consolidation, or (ii) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no "person" (as hereinabove defined) acquires more
than fifty percent (50%) of the combined voting power of the Company's then
outstanding securities; or
<PAGE> 2
(d) the stockholders of the Company adopt a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets.

"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.

"Company" shall mean Spanish Broadcasting System, Inc., a Delaware
corporation, and any successor corporation.

"Disability" shall mean the inability, by reason of bodily injury or
physical or mental desease, or any combination thereof, of the Optionee to
perform his duties as a member of the Board for a period of one hundred eighty
(180) days (whether or not consecutive) in any period of three hundred and
sixty-five (365) consecutive days.

"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

"Fair Market Value" per Share as of a particular date shall mean,
unless otherwise determined by the Board:

(i) the closing sales price per Share on a national securities
exchange for the business day preceding the exercise date on which there was a
sale of Shares on such exchange;

(ii) if clause (i) does not apply and the Shares are then
quoted on the National Association of Securities Dealers Automated Quotation
system (known as "NASDAQ"), the closing price per Share as reported on such
system for the business day preceding the exercise date on which a sale was
reported;

(iii) if clause (i) or (ii) does not apply and the Shares are
then traded on an over-the-counter market, the closing price for the Shares in
such over-the-counter market for the business day preceding the exercise date;
or

(iv) if the Shares are not then listed on a national
securities exchange or traded in an over-the-counter market, such value as the
Board in its discretion may determine.

"Nonemployee Director" shall mean a member of the Board who is not an
employee of the Company.

"Option" shall mean an option to purchase Shares granted pursuant to
the Plan. Options granted under the Plan are not intended to be "incentive stock
options" within the meaning of Section 422 of the Code.

"Option Agreement" shall mean an Option Agreement to be entered into
between the Company and an Optionee, which shall set forth the terms and
conditions of the Options granted to such Optionee.

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<PAGE> 3
"Participant" shall mean a Nonemployee Director who is granted an
Option under the Plan.

"Plan" shall mean this Spanish Broadcasting System 1999 Stock Option
Plan for Nonemployee Directors, as hereinafter amended from time to time.

"Share" shall mean a share of the Company's common stock, .01 par
value.

3. SHARES SUBJECT TO THE PLAN.

(a) Shares Subject to the Plan. Subject to adjustment as set forth in
Section 3(b), the maximum number of Shares that may be issued or transferred
pursuant to Options under this Plan shall be 300,000 which may be authorized but
unissued Shares or Shares held in the Company's treasury, or a combination
thereof. Any Shares subject to an Option that cease to be subject thereto may
again be the subject of Options hereunder.

(b) Changes in Company's Shares. In the event the Board determines that
any stock dividend, extraordinary cash dividend, recapitalization,
reorganization, merger, consolidation, split-up, spin-off, combination, exchange
of shares, warrants or rights offering to purchase Shares, or other similar
corporate event, affects the value of the Shares such that an adjustment is
required in order to preserve the benefits or potential benefits intended to be
made available under this Plan, the Board shall have the right, in its sole
discretion, and in such manner as it may deem equitable, to adjust any or all of
(a) the number and kind of Shares subject to outstanding Options, and (b) the
exercise price with respect to any Option or (c) make provision for a cash
payment to an Optionee or a person who has an outstanding Option (in an amount
equal to the then difference between the exercise price and the Fair Market
Value of a Share).

4. PARTICIPATION.

Each Nonemployee Director shall be eligible to participate in the Plan,
provided that the Board shall have the discretion to determine which, if any,
Nonemployee Director shall receive a grant of Options hereunder.

5. TERMS OF OPTIONS AND SHARES.

(a) Terms. The Options granted hereunder shall have the following terms
and conditions:

(i) Exercise Price. The exercise price of any Option shall be
one hundred percent (100%) of the Fair Market Value of a Share as of the date
the Option is granted, provided, however, that the Board, in its discretion may
grant Options above or below Fair Market Value.

(ii) Term. Subject to the discretion of the Board, the term of
an Option shall be ten years from the date it is granted.

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<PAGE> 4
(iii) Vesting. Options shall be exercisable in such
installments (which need not be equal) and at such times as the Board may
designate, as embodied in the Option Agreement covering such Option, provided,
however, that any Options granted hereunder as of the Effective Date shall vest
and become exercisable at a rate of twenty percent (20%) immediately and an
additional twenty percent (20%) each year, beginning on the first anniversary of
the date of grant, and each anniversary thereof, provided that the Optionee is
still a member of the Board on each such vesting date. In addition, any Option
granted an individual who is elected to the Board as a Nonemployee Director
during calendar year 2000 or thereafter shall vest and become exercisable at a
rate of twenty percent (20%) per year, beginning on the date of grant and an
additional twenty percent (20%) on the first anniversary of the date of grant
and each anniversary thereafter, provided that the Optionee is still a member of
the Board on each such date. Notwithstanding the foregoing, any Options that are
not exercisable prior to a Change in Control shall become exercisable on the
date of such Change in Control and shall remain exercisable for the remainder of
their Term.

(iv) Number. The Board shall have the discretion to determine
the number of options to be granted any Nonemployee Director, and to determine
the terms and conditions of any such grant, all as embodied in the Option
Agreement covering such Option.

(b) Termination of Service. An Optionee who ceases to be a member of
the Board for any reason other than death, retirement on or after age 65, or
Disability shall have thirty (30) days from the date of such cessation to
exercise any then exercisable Options, after which all such Options shall
terminate and be of no further force or effects. If an Optionee ceases to be a
member of the Board due to death, retirement on or after age 65, or Disability,
all outstanding Options held by such Optionee that are exercisable on such date
shall remain exercisable for their Term, and shall thereafter terminate and be
of no further force or effect.

(c) Option Agreement. Options shall be granted only pursuant to a
written Option Agreement, which shall be executed by the Optionee and an
authorized officer of the Company and which shall contain such terms and
conditions as the Board shall determine, consistent with the Plan.

(d) Non-Transferability. No Option granted hereunder the Plan shall be
transferable by the Optionee to whom granted otherwise than by will or the laws
of descent and distribution, and an Option may be exercised during the lifetime
of such Optionee only by the Optionee or his guardian or legal representative.
The terms of such Option shall be binding upon the beneficiaries, executors,
administrators, heirs and successors of the Optionee.

(e) Method of Exercise. The exercise of an Option shall be made only by
delivery of a written notice (in person or by first class mail to the Secretary
of the Company at the Company's principal executive office) specifying the
number of Shares to be purchased and accompanied by full payment therefor and
otherwise in accordance with the Option Agreement pursuant to which the Option
was granted. The exercise price for any Shares purchased pursuant to the
exercise of an Option shall be paid in full upon such exercise in cash, by check
or, at the discretion of the Board and upon such terms and conditions as the
Board shall approve, by transferring previously owned Shares to the Company,
having Shares withheld, or pursuant to a "cashless exercise" procedure, or any
combination thereof. Any Shares transferred to the Company as payment of the
exercise price shall be valued at their Fair Market Value on the day preceding
the

4
<PAGE> 5
date of exercise of such Option. If requested by the Board, the Optionee shall
deliver the Option Agreement evidencing the Option to the Secretary of the
Company who shall endorse thereon a notation of such exercise and return such
Option Agreement to the Optionee. Not less than one hundred (100) Shares may be
purchased at any time upon the exercise of an Option unless the number of Shares
so purchased constitutes the total number of Shares then purchasable under the
Option or the Board determines otherwise in its sole discretion.

(f) Rights as Stockholder. No Optionee shall be deemed for any purpose
to be or to have the rights and privileges of the owner of any Shares subject to
any Option unless and until (a) the Option shall have been exercised pursuant to
the terms thereof, and (b) the Company shall have issued the Shares to the
Optionee.

6. ADMINISTRATION.

The Plan shall be administered by the Board. Subject to the provisions
of the Plan, the Board shall be authorized to interpret and construe the Plan
and the Option Agreements, to establish, amend, and rescind any rules and
regulations relating to the Plan, and to make all other determinations necessary
or advisable for the administration of the Plan and to carry out its purpose.
The determinations of the Board in the administration of the Plan, as described
herein, shall be final and conclusive. The Secretary shall be authorized to
implement the Plan in accordance with its terms and to take such actions of a
ministerial nature as shall be necessary to effectuate the intent and purposes
thereof. The Board may, in its sole and absolute discretion, delegate to any
proper officer of the Company, or more than one of them, any or all of its
administrative duties under this Plan.

7. OTHER PROVISIONS.

(a) Effective Date. The Plan shall become effective as of September 30,
1999, (the "Effective Date").

(b) Amendment, Suspension or Termination of the Plan. The Plan may be
wholly or partially amended or otherwise modified, suspended or terminated at
any time or from time to time by the Board; provided, however, that, except as
provided in Section 3(b), no amendment, suspension nor termination shall,
without the consent of the Optionee, alter or impair any rights or obligations
under any Option theretofore granted.

(c) Governing Law. The Plan and the rights of all persons claiming
hereunder shall be construed and determined in accordance with the laws of the
State of New York without giving effect to the choice of law principles thereof.

(d) Regulations and Other Approvals. The obligation of the Company to
sell or deliver Shares with respect to Options granted under the Plan shall be
subject to all applicable laws, rules and regulations, including all applicable
federal and state securities laws, and the obtaining of all such approvals by
governmental agencies as may be deemed necessary or appropriate by the Board.

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<PAGE> 6
(i) The Board may make such changes as may be necessary or
appropriate to comply with the rules and regulations of any government
authority.

(ii) Each Option is subject to the requirement that, if at any
time the Board determines, in its sole discretion, that the listing,
registration or qualification of Shares issuable pursuant to the Plan is
required by any securities exchange or under any state or federal law, or the
consent or approval of any governmental regulatory body is necessary or
desirable as a condition of, or in connection with, the grant of an Option or
the issuance of Shares, no Options shall be granted or payment made or Shares
issued, in whole or in part, unless listing, registration, qualification,
consent or approval has been effected or obtained free of any conditions as
acceptable to the Board.

(iii) In the event that the disposition of Shares acquired
pursuant to the Plan is not covered by a then current registration statement
under the Securities Act, and is not otherwise exempt from such registration,
such Shares shall be restricted against transfer to the extent required by the
Securities Act or regulations thereunder, and the Board may require any
individual receiving Shares pursuant to the Plan, as a condition precedent to
receipt of such Shares, to represent to the Company in writing that the Shares
acquired by such individual are acquired for investment only and not with a view
to distribution. The certificate for such shall include any legend that the
Board deems appropriate to reflect any restrictions on transfer.

(e) Withholding of Taxes. As a condition to the exercise of an Option
and to the extent required by law, no later than the date as of which an amount
first becomes includible in the gross income of an Optionee for federal income
tax purposes with respect to Options granted under this Agreement, the Optionee
shall pay to the Company, or make arrangements satisfactory to the Company
regarding the payment of, any federal, estate, or local taxes of any kind
required by law to be withheld with respect to such amount. The obligations of
the Company under this Agreement shall be conditioned on such payment or
arrangements, and the Company shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to the
employee. In its discretion, the Board may permit an Optionee to satisfy
withholding obligations by delivering previously owned Shares or by having
Shares withheld.

(f) Titles; Construction. Titles are provided herein for convenience
only and are not to serve as a basis for interpretation or construction of the
Plan. The masculine pronoun shall include the feminine and neuter and the
singular shall include the plural, when the context so indicates.

<PAGE> 1

Exhibit 21.1

SUBSIDIARIES OF THE COMPANY

Name State of Incorporation
- ---- ----------------------
Spanish Broadcasting System of California, Inc. California
Spanish Broadcasting System Network, Inc. New York
SBS Promotions, Inc. New York
SBS Funding, Inc. Delaware
Alarcon Holdings, Inc. New York
SBS of Greater New York, Inc. New York
Spanish Broadcasting System of Florida, Inc. Florida
Spanish Broadcasting System of Greater Miami, Inc. Delaware
Spanish Broadcasting System of Puerto Rico, Inc. Delaware
Spanish Broadcasting System, Inc. New Jersey
Spanish Broadcasting System of Illinois, Inc. Delaware
Spanish Broadcasting System of San Antonio, Inc. Delaware
JuJu Media, Inc. New York
Spanish Broadcasting System of Puerto Rico, Inc. Puerto Rico

<PAGE> 1

EXHIBIT 23.1

The Board of Directors and Stockholders
Spanish Broadcasting System, Inc.

We consent to the use of our report included herein and to the reference to
our firm under the headings "Summary Historical and Pro Forma Consolidated
Financial Information", "Selected Historical Consolidated Financial Information"
and "Experts" in the prospectus.

/s/ KPMG LLP
------------------------------------------------------------------------

Miami, Florida

October 6, 1999

<PAGE> 1
Exhibit 23.3

CONSENT

I hereby consent to the reference to me as a director nominee as set forth

in the registration statement of Spanish Broadcasting System, Inc.

/s/ Roman Martinez IV
--------------------------
Roman Martinez IV

<PAGE> 1
Exhibit 23.4

CONSENT

I hereby consent to the reference to me as a director nominee as set forth
in the registration statement of Spanish Broadcasting System, Inc.

/s/ Jason L. Shrinsky
-------------------------
Jason L. Shrinsky