YouthStream Media Networks, Inc. has entered into definitive agreements to acquire KES Acquisition Co., LLC, the owner and operator of Kentucky Electric Steel, Ashland, Ky.

This transaction was expected to close at the end of February, subject to customary closing conditions. The company will consolidate the operations of Kentucky Electric Steel through its ownership of KES Acquisition, effective from the closing date.

Kentucky Electric has been producing steel for approximately fifty years, and was acquired by the sellers through a bankruptcy proceeding in September 2003. Following the acquisition, the facility was refurbished and has been generating revenues since late January 2004.

In connection with the acquisition, YouthStream formed a new subsidiary, YouthStream Acquisition Corp. YouthStream Media will own 80.01% of the total outstanding common stock and 100% of the voting common stock of YouthStream Acquisition, and will capitalize it with an aggregate of $500,000 in cash.

YouthStream Acquisition will issue to the sellers of KES Acquisition (i) 25,000 shares of its non-convertible non-voting redeemable preferred stock with a redemption price equal to $25,000,000 and a 13% annual cumulative dividend and (ii) senior subordinated promissory notes in the aggregate principal amount of $40,000,000 with an annual interest rate of 8%. As part of this transaction, the remaining 19.99% common stock interest in Acquisition Corp. will be owned by the sellers of KES Acquisition.