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EXHIBIT 10.1




Bonneville International Corporation

Bonneville Holding Company

55 North 300 West

Salt Lake City, Utah 84180




October 4, 2004




Emmis Radio, LLC

One Emmis Plaza

40 Monument Circle, Suite 700

Indianapolis, IN 46204



     Re: Bonneville/Emmis



Dear Sirs:



     The purpose of this letter agreement is to set forth, on behalf of
Bonneville Holding Company (“BHC”) and Bonneville International Corporation
(“BIC”) and/or their assigns (collectively, “Bonneville”), the terms under
which Bonneville will enter into a multiple-stage transaction (the
“Transaction”) with Emmis Radio, LLC (“Emmis Radio”) and Emmis Radio License,
LLC (“Emmis License”) and/or their assigns (collectively, “Emmis”) for the
primary purpose of (a) Emmis’ transferring to Bonneville substantially all of
the assets and certain of the liabilities associated with the operations of
Phoenix, Arizona radio stations KTAR (AM), KMVP (AM) and KKLT (FM) (the “Emmis
Stations”), in exchange for (b) Bonneville’s transferring to Emmis certain of
the assets and liabilities associated with the operation of Chicago, Illinois
radio station WLUP-FM (the “Bonneville Station”) and paying Emmis $66,000,000
in cash upon the consummation of the Transaction. The Emmis Stations and the
Bonneville Station are sometimes referred to collectively as the “Stations.”



1. Definitive Agreements




     Following execution of this letter agreement, Bonneville and Emmis will
proceed expeditiously and in good faith to complete and execute the following
definitive agreements evidencing the Transaction: (a) a Time Brokerage
Agreement under which Emmis Radio will, among other things, program the
Bonneville Station, assume certain obligations of BIC related thereto, and hire
certain employees of the Bonneville Station, as described in Section 3 below
(the “Bonneville Station TBA”); and (b) another Time Brokerage Agreement under
which BIC will, among other things, program the Emmis Stations, assume certain
obligations of Emmis related thereto, and hire certain employees of the Emmis
Stations, as described in Section 3 below (the “Emmis Stations TBA” and, with
the Bonneville Station TBA, the “TBAs”). In addition, Bonneville and Emmis
will proceed expeditiously and in good faith to complete and execute, ideally
no later than 21 days after filing of the license assignment applications with
the FCC, an Asset Exchange Agreement under which Emmis and Bonneville will,
among other













 






things, exchange ownership of those assets and certain liabilities
associated with the Stations not previously transferred under the TBAs, and
enter into certain related arrangements, as described in Section 4 below (the
“Asset Exchange Agreement”).



2. Regulatory Approvals




     On October 5, 2004, Bonneville and Emmis will each file the necessary
pre-merger notification under the Hart-Scott-Rodino Antitrust Improvement Act
of 1976 (“HSR”) with the Federal Trade Commission and the appropriate license
assignment applications with the Federal Communications Commission (“FCC”)
(provided there is no FCC application filing freeze at that time, in which case
FCC applications will be filed as soon as possible after the freeze is lifted).
Such filings will include copies of this fully executed letter agreement. The
regulatory fees for the HSR and FCC filings will be shared equally between
Bonneville and Emmis.



3. Time Brokerage Agreements




     (a) Effective Date and Termination. The TBAs will be completed and
executed as soon as practicable following the date of this letter agreement.
The TBAs will become effective at 12:01 A.M. local time for the applicable
Station on December 1, 2004, assuming the HSR waiting period for the
Transaction (and any extensions thereof) has expired or otherwise been
terminated. If such HSR waiting period expiration or termination has not
occurred by such date, the TBAs will become effective five (5) business days
after such expiration or termination or on such earlier or later date as the
parties may agree. The TBAs will both terminate upon the closing or
termination of the Asset Exchange Agreement, absent earlier termination as
provided therein.



     (b) Broadcast Time. Pursuant to the terms of the TBAs, Emmis Radio will
(with respect to the Bonneville Station) and BIC will (with respect to the
Emmis Stations), among other things: (i) purchase substantially all of the
broadcast time on the other’s Station(s); (ii) provide programming for such
broadcast time; (iii) assume responsibility for and retain all revenues for the
sale of advertising time for the other’s Station(s); and (iv) assume
advertising, employment, union and other operating contracts, and certain
related obligations relating to the other’s Station(s). Except as described in
this letter agreement, the terms and conditions of the TBAs will be
substantially the same as those of that certain Time Brokerage Agreement
between Bonneville and Emmis 106.5 FM Broadcasting Corporation of St. Louis,
dated July 31, 2001.



     (c) Employees. Upon the effective date of the Bonneville Station TBA,
Emmis Radio will offer employment to each employee of the Bonneville Station
identified in a side letter between Emmis and BIC executed concurrently with
this letter agreement (the “Employee Side Letter”) at a comparable salary,
position and place as held by such employee immediately prior to the effective
date of the TBA (or in accordance with applicable, union, employment and/or
severance contracts and obligations assumed by Emmis Radio), and with such
benefits as are offered to other comparable Emmis Radio employees. Upon the
effective date of the Emmis Stations TBA, BIC will offer employment to the
employees of the Emmis Stations identified in



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the Employee Side Letter at a comparable salary, position and place as
held by such employee immediately prior to the effective date of the TBA (or in
accordance with applicable, union, employment and/or severance contracts and
obligations assumed by BIC), and with such benefits as are offered to other
comparable BIC employees.



     The collective bargaining agreement, dated December 1, 2000, between BIC
and the American Federation of Television and Radio Artists (“AFTRA”) covering
employees at the Bonneville Station has expired, and is currently being
renegotiated. Upon the effective date of the Bonneville Station TBA, Emmis
Radio will assume the bargaining obligation and, except as varied in terms of
health and welfare benefits in its offers of employment, will assume the
statutory obligation to maintain the status quo in terms and conditions of
employment, including that of severance pay. For the purposes of severance
pay, Emmis Radio will use the service credit currently used by the Bonneville
Station. If a collective bargaining agreement is reached between BIC and AFTRA
for the Bonneville Station prior to the effective date of the Bonneville
Station TBA, Emmis Radio will assume such collective bargaining agreement,
provided that Emmis Radio shall have previously furnished its written approval
of such agreement to Bonneville, which approval will not be unreasonably
withheld, conditioned or delayed.



     (d) TBA Payments. For the rights granted to Emmis under the Bonneville
Station TBA, Emmis will pay Bonneville the amounts at the times set forth in a
side letter between Emmis and Bonneville executed concurrently with this letter
(the “TBA Payment Side Letter”). For the rights granted to Bonneville under
the Emmis Stations TBA, Bonneville will pay Emmis the amounts at the times set
forth the TBA Payment Side Letter.



     (e) Prorations. As of 12:01 a.m. local time on the effective date of the
TBAs, all operating income (as defined by generally accepted accounting
principles (“GAAP”) but excluding depreciation of property, plant and
equipment, amortization of definite-lived intangibles, and impairment charges,
if any, relating to goodwill and FCC licenses) arising from the conduct of the
business and operations of the applicable Stations will be prorated between BIC
and Emmis Radio in accordance with GAAP. Such prorations shall be based upon
the principle that the party selling its broadcast time under the TBAs is
entitled to all operating revenue earned and is responsible for operating
expenses accruing in connection with each of its Station’s operations, assigned
contracts and transferred employees prior to the effective date, and the party
acquiring the broadcast time is entitled to such operating revenue earned, and
is responsible for such operating expenses (but excluding depreciation of
property, plant and equipment, amortization of definite-lived intangibles, and
impairment charges, if any, relating to goodwill and FCC licenses) accruing, on
and after the effective date for so long as the applicable TBA remains in
effect. The parties will identify such prorations in accordance with the
procedure and within the time period, and pay to the appropriate party any
proration amounts due and owing on or before the date, provided in the TBAs.
Without limiting the generality of the foregoing, the TBA prorations shall
include prepayments made under Emmis’ Amended and Restated Broadcast Agreement,
dated June 30, 2004, with AZPB Limited Partnership relating to the Arizona
Diamondbacks.



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     (f) Non-Competition. During the term of the Emmis Stations TBA, Emmis
will be prohibited from owning, operating or programming any radio stations
transmitting an over-the-air signal from a broadcast antenna located within the
Phoenix, Arizona Metro Survey Area (as defined by Arbitron, Inc.) which offer a
programming format known in the industry and classified by Arbitron, Inc. as:
(i) Adult Contemporary, including Hot AC, Modern AC and Soft AC; (ii) All News;
(iii) News/Talk/Information; (iv) All Sports; (v) Modern Rock; and (vi) All
Talk. The non-compete restrictions will be binding upon only Emmis and its
affiliates and will not apply to any purchaser of any other Emmis radio station
serving the Phoenix, Arizona metropolitan market.



     (g) Right to Move Operations. Emmis will have the right during the term
of the Bonneville Station TBA to move the studios and offices of the Bonneville
Station; provided, however, that following such move and until termination of
the Bonneville TBA: (i) Bonneville will maintain full authority, power and
control over the operation of the Bonneville Station at any new studio and
office location; (ii) BIC will enter into a mutually agreeable sublease with
Emmis for such new studios and offices for the Bonneville Station, which
sublease will accommodate BIC’s rights and obligations under the Bonneville
Station TBA, will be at no cost to Bonneville, and will terminate upon
termination of such TBA; and (iii) Emmis shall reimburse BIC for the expense of
such sublease.



4. Asset Exchange Agreement




     (a) General Terms. In addition to the transactions, assignments,
assumptions and other matters addressed under the TBAs, pursuant to the terms
of the definitive Asset Exchange Agreement: (i) Bonneville will acquire
substantially all of the remaining assets (including, but not limited to,
contractual and other rights) principally used in the operations of the Emmis
Stations (as described more thoroughly below, the “Emmis Assets”) and assume
certain other liabilities arising from the operations of the Emmis Stations;
and (ii) Emmis will acquire certain of the remaining assets (including, but not
limited to, contractual and other rights) used in the operations of the
Bonneville Station (as described more thoroughly below, the “Bonneville
Assets”), and assume certain other liabilities arising from the operations of
the Bonneville Station. Further, at closing of the Asset Exchange Agreement,
Bonneville will pay Emmis $66,000,000 in cash. The FCC licenses associated
with the Stations will be transferred to and from BHC and Emmis License, and
the non-FCC license assets will be transferred to and from BIC and Emmis Radio.



     The Emmis Assets and the Bonneville Assets will each be transferred free
and clear of all liens, claims and encumbrances of every kind (other than
customary permitted encumbrances). Except as described in this letter
agreement, the terms and conditions of the Asset Exchange Agreement will be
substantially the same as those of the Asset Exchange Agreement among
Bonneville, Emmis Communications Corporation, Emmis 106.5 Broadcasting
Corporation of St. Louis, and Emmis 106.5 License Corporation of St. Louis,
dated October 6, 2001.



     (b) Emmis Assets. The Emmis Assets will include:



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     (i) all of the licenses, permits and other authorizations issued for
any of the Emmis Stations by the FCC and other authorities, as well as
the license for the Starlink digital STL used by radio station KKFR (the
“Emmis Permits”);




     (ii) all real property, together with all improvements thereon,
owned by Emmis and used in the operation of any of the Emmis Stations,
including, without limitation: (A) the Central Avenue office and studio
real property and improvements; and (B) the KTAR (AM) tower site real
property and improvements;




     (iii) all transmitter equipment and transmission lines, antenna and
other broadcast equipment (including the KKLT/KKFR community antenna and
transmitter building on South Mountain but excluding any such equipment
and transmission lines principally used in the operations of radio
station KKFR), and all studio equipment, office equipment, office
furniture, fixtures, rolling stock, materials and supplies, inventories,
spare parts and other tangible personal property, including all
promotional, sales, marketing and format-specific programming materials,
supplies, inventories, and property principally used in the operation of
any of the Emmis Stations, all computer hardware and software principally
used in the operation of the Emmis Stations’ traffic, automation,
continuity, information technology (network, e-mail, print, file, etc.)
and office business systems, and all personal computers (and the software
and content thereon) used by those employees to be hired by BIC under the
Emmis Stations TBA (provided that Emmis may cleanse such personal
computers of proprietary Emmis information unrelated to the Emmis
Stations);




     (iv) subject to Section 5 of this letter agreement, all contracts,
leases, agreements, commitments and other arrangements principally used
or held for use in the operation of any of the Emmis Stations (and not
otherwise assumed by BIC under the Emmis Station TBA), including, without
limitation, the real property leases and occupancy and use rights to (A)
the South Mountain tower site used by KKLT (FM) and KKFR (FM); (B) the
tower site used by KMVP (AM), and (C) the tower site used by KTAR (AM)
(the “Emmis Contracts”);




     (v) all rights in and to trademarks, trade names, and service marks,
including registrations and applications for registration of any of them,
privileges, trade secrets, call signs and other similar intangible
property and interests principally relating to any of the Emmis Stations;




     (vi) all intellectual property, content and other rights principally
used in the operation of any of the Emmis Stations’ Internet and on-line
activities, including, without limitation, station-related e-mail
addresses, websites, Internet addresses and domain names; and



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     (vii) all books, records, accounts, files, logs, plans, and drawings
and other information principally pertaining to or used or held for use
in the operation of any of the Emmis Stations.



     (c) Bonneville Assets. The Bonneville Assets will include:




     (i) all of the licenses, permits and other authorizations issued for
the Bonneville Station by the FCC and other authorities (the “Bonneville
Permits”);




     (ii) certain limited studio equipment and other personal property
identified in a side letter between Emmis and BIC executed concurrently
with this letter agreement (“Bonneville Assets Side Letter”), and all
rolling stock, transmitter equipment and transmission lines principally
used in the operation of the Bonneville Station;




     (iii) all promotional, sales, marketing and format-specific
programming materials, supplies, inventories, and property, principally
used in the operation of the Bonneville Station;




     (iv) subject to Section 5 of this letter agreement, all contracts,
leases, agreements, commitments and other arrangements principally used
or held for use in the operation of the Bonneville Station (and not
otherwise assumed by Emmis Radio under the Bonneville Station TBA),
including that certain FM Broadcast Lease and License Agreement between
BIC and SRI Michigan Avenue Venture, LLC, dated October 1, 1999,
regarding location of the main and auxiliary antennas for the Bonneville
Station on the John Hancock Center and the location of the transmitter
and combiner therefor (the “Bonneville Contracts”);




     (v) that portion of BIC’s membership interest in FM Broadcasters,
LLC relating to the Bonneville Station (the entity holding certain rights
to the main antenna used by the Bonneville Station located on the John
Hancock Center);




     (vi) all rights in and to trademarks, trade names, service marks,
including registrations and applications for registration of any of them,
privileges, trade secrets, call signs and other similar intangible
property and interests principally relating to the Bonneville Station;




     (vii) all intellectual property, content and rights principally used
in the operation of the Bonneville Station’s Internet and on-line
activities, including, without limitation, station related e-mail
addresses, websites, Internet addresses and domain names; and




     (viii) all books, records, accounts, files, logs, plans, and
drawings and other information principally pertaining to or principally
used or held for use in the operation of the Bonneville Station.



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     (d) Excluded Assets. The Emmis Assets and the Bonneville Assets will not
include cash, cash equivalents, accounts receivable, securities, investments,
deposits, prepayments, refunds of taxes for periods prior to the closing of the
Asset Exchange Agreement, employee benefit plans or contracts of insurance, the
proceeds thereof or claims thereunder, certain financial, accounting, and
management information software and contractual rights, and rights, claims and
records relating to such excluded assets. The Bonneville Assets will also not
include (i) the right to use the Bonneville logo, the “Bonneville” mark or any
mark containing the word “Bonneville”, or (ii) any computer hardware or
software systems used in the hosting and operation of the Bonneville Station’s
website or traffic, automation, continuity, information technology (network,
email, print, file, etc.) and office business systems. The Emmis Assets will
also not include (i) the right to use the Emmis logo, the “Emmis” mark or any
mark containing the word “Emmis”, (ii) any computer hardware or software
systems used in the hosting and operation of the Emmis Stations’ websites,
(iii) except as otherwise provided herein, those tangible assets principally
used in the operation of station KKFR (FM) or principally used by its
employees, (iv) any Microsoft software licenses, or (v) those assets used in
the operation of the Emmis Stations that are identified as excluded assets in a
side letter between Emmis and BIC executed concurrently with this letter
agreement (“Emmis Excluded Assets Side Letter”).



     (e) Assumed Emmis Stations Liabilities. Subject to the provisions of
Section 5 of this letter agreement, BIC will assume all liabilities under the
Emmis Contracts and Emmis Permits (other than the Emmis Stations FCC licenses),
to the extent such liabilities arise during and relate to any period following
the closing of the Asset Exchange Agreement. BHC will assume the liabilities
under the Emmis Stations FCC licenses assigned and transferred to BHC to the
extent such liabilities arise during and relate to any period after the closing
of the Asset Exchange Agreement.



     (f) Assumed Bonneville Station Liabilities. Subject to the provisions of
Section 5 of this letter agreement, Emmis Radio will assume all liabilities
under the Bonneville Contracts and Bonneville Permits (other than the
Bonneville Station FCC licenses), to the extent such liabilities arise during
and relate to any period following the closing of the Asset Exchange Agreement.
Emmis License will assume the liabilities under the Bonneville Station FCC
licenses assigned and transferred to Emmis to the extent such liabilities arise
during and relate to any period after the closing of the Asset Exchange
Agreement.



     (g) Excluded Liabilities. Neither party will assume any obligations or
liabilities under the Asset Exchange Agreement except for those expressly
assumed thereunder. Without limiting the foregoing: (i) neither party will
assume any liabilities relating to activities prior to the closing of the Asset
Exchange Agreement (unless previously assumed under the TBAs); (ii) Emmis will
not assume BIC’s office and studio lease in the John Hancock Center in Chicago,
Illinois; (iii) BIC will not assume any advertising, barter or other agreements
with or related to casinos, casino operations or lotteries (except for the
broadcast of such advertising required under the Amended and Restated Broadcast
Agreement, dated June 30, 2004, between Emmis and AZPB Limited Partnership
relating to the Arizona Diamondbacks); and (iv) neither party



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will assume any liability arising from or under an assumed contract due to (A)
the breach of such contract by reason of its assignment without a required
consent, or (B) any other breach or default of a party’s contract prior to the
closing of the Asset Exchange Agreement unless caused by the other party’s
action or failure to perform under the applicable TBA.



     (h) Transition Services Agreements.



          (A) Emmis and BIC will enter into a Transition Services Agreement
(“Phoenix Transition Services Agreement”) at the closing of the Asset Exchange
Agreement wherein Emmis will have a limited right to use the current Emmis
Stations facilities located on Central Avenue for the purpose of operating
radio station KKFR (FM) while arranging for an alternative location to conduct
operations of such station. The term of the Phoenix Transition Services
Agreement will begin on the closing of the Transaction and continue until the
later to occur of: (i) the first anniversary of the effective date of the TBAs;
or (ii) six months following the closing of the Transaction.



          (B) If the Transaction closes prior to the first anniversary of the
effective date of the TBAs, Emmis and BIC will also enter into a Transition
Services Agreement (“Chicago Transition Services Agreement” and together with
the Phoenix Transition Services Agreement, the “Transition Services
Agreements”) wherein Emmis will have a limited right for the remainder of that
one-year period to use the current Bonneville Station facilities and equipment
located on the 37th floor of the John Hancock Center for the purpose of
operating WLUP (FM) while arranging for an alternative location to conduct such
operations.



          (C) In the case of both Transition Service Agreements, the operations of
the transitioning stations will approximate ordinary historical use subject to
reasonable accommodations for the allocation of services and equipment use
among each party’s radio station(s) at such locations. Emmis’ cost under the
Transition Services Agreements will be set forth in a side letter between Emmis
and BIC executed concurrently with this letter agreement (“TSA Side Letter”).



     (i) Non-Competition. The Asset Exchange Agreement will provide that, for
a period of two (2) years after the closing of the Asset Exchange Agreement,
Emmis will be prohibited from owning, operating or programming any radio
stations transmitting an over-the-air signal from a broadcast antenna located
within the Phoenix, Arizona Metro Survey Area (as defined by Arbitron, Inc.)
which offer a programming format known in the industry and classified by
Arbitron, Inc. as: (i) Adult Contemporary, including Hot AC, Modern AC and Soft
AC; (ii) All News; (iii) News/Talk/ Information; (iv) All Sports; (v) Modern
Rock; and (vi) All Talk. In exchange for such prohibition, and in addition to
the purchase price payable under the Asset Exchange Agreement, Bonneville will
pay Emmis $4,000,000 at the closing of the Asset Exchange Agreement.



     (j) South Mountain Sublicense. BIC and Emmis Radio will enter into a
sublicense upon closing of the Asset Exchange Agreement granting Emmis Radio
(or its assignee) the right



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to continue station KKFR (FM)’s prior use of the main community antenna, the
tower position for location of its auxiliary antenna and associated transmitter
space at the South Mountain facility. The sublicense will have a term of five
years from the closing of the Asset Exchange Agreement. BIC will not charge
Emmis for the sublicense during the five-year term unless the landlord
increases BIC’s fees as result of the sublicense. Any subsequent sublicense
for use of the facility after the initial five-year sublicense entered into
between Emmis (or its assignee) and BIC will be at a license rate equal to fair
market value. The sublicense will be assignable to any subsequent owner of
station KKFR (FM) upon BIC’s consent, which consent will not be unreasonably
withheld, conditioned or delayed, and will be terminable by the licensee upon
ninety days prior written notice. Emmis and Bonneville acknowledge that the
foregoing sublease arrangement will be in addition to a lease that Emmis must
obtain directly from the landlord for use of the South Mountain facility, the
terms of which shall not impact the terms of the sublicense from BIC.



     (k) AON Building Antenna. Upon closing of the Asset Exchange Agreement,
BIC will grant to Emmis an option for WLUP-FM to license space for an auxiliary
antenna on the antenna tower that is under construction on the AON Building,
which option must be exercised by Emmis within 60 days following written notice
from BIC that the tower construction is complete. The license fee will be 25%
of the all-inclusive cost of construction of the antenna and 25% of the
on-going maintenance and operating expenses, subject to a decrease in such
percentage if the antenna tower is used by more than one station for a main
antenna or more than two stations (including WLUP-FM) for an auxiliary antenna.



     (l) Indemnification. The Asset Exchange Agreement will provide that each
party will indemnify the other party for claims under the Asset Exchange
Agreement, the TBAs and for third-party claims. Such indemnification shall
apply once the aggregate amount of such claims exceeds $500,000, and then only
to the extent such claims exceed $250,000, and subject to a cap of $25,000,000,
except that claims relating to: (i) environmental conditions; (ii) proration
adjustments of revenue and expenses; (iii) liabilities not assumed; (iv)
noncompliance with applicable bulk sales requirements; (v) taxes owed by the
other party or constituting a lien on assets; or (vi) liabilities expressly
assumed, will not be counted for purposes of such thresholds or cap. Claims
for breach of any representation or warranty must be brought within 18 months
following closing of the Asset Exchange Agreement.



     (m) Prorations. As of 12:01 a.m. local time on the closing date of the
Asset Exchange Agreement, all operating income (as defined by GAAP but
excluding depreciation of property, plant and equipment, amortization of
definite-lived intangibles, and impairment charges, if any, relating to
goodwill and FCC licenses) relating to each Station will be prorated between
BIC and Emmis in accordance with GAAP to the extent not previously prorated as
of the effective date of the TBAs. The parties will identify such prorations
in accordance with the procedure and within the time period, and pay to the
appropriate party any proration amounts due and owing on or before the date,
provided in the Asset Exchange Agreement. Such prorations shall include,
without limitation: (i) any security deposits made under real property leases;
and (ii) any FCC annual regulatory fees relating to any Station paid or payable
by either party.



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     (n) Termination. In addition to customary termination provisions, the
Asset Exchange Agreement will terminate if the closing thereunder does not
occur on or before January 1, 2006.



5. Due Diligence




     To date, Bonneville and Emmis have worked to provide each other with
certain information about their respective assets and liabilities to be
exchanged in the Transaction. Due to the their mutual desire to maintain
strict confidentiality of their negotiations prior to the public disclosure of
this letter agreement, however, both parties acknowledge certain other,
material information about such assets and liabilities was not available for
disclosure. Therefore, following the anticipated public announcement of the
Transaction on the date of this letter agreement, each party will provide the
other with full access to all financial, operating, legal and other reasonably
requested information and documents relating to the Stations and the applicable
assets and liabilities, as well as reasonable access to the management and
personnel of the Stations. A party’s satisfaction with its due diligence
investigation will not be a condition to the execution of the TBAs or the
execution or closing of the Asset Exchange Agreement. Instead, to the extent a
dispute arises regarding the treatment of any asset or liability of either
party under the TBAs or Asset Exchange Agreement (except with respect to those
individual, specific assets or liabilities addressed in this letter agreement
by name and not category), the following resolution mechanism shall apply
during the period prior to the execution of the Asset Exchange Agreement and
TBAs: (i) such dispute shall first be referred for resolution to Drew Horowitz
(Bonneville’s representative) and Marv Nyren (Emmis’ representative); (ii) if
the foregoing representatives are unable to resolve the dispute within 10
business days, the dispute shall be referred for resolution to the parties’
respective Chief Executive Officers; and (iii) if the parties’ Chief Executive
Officers are unable to resolve the dispute within 20 business days, the dispute
will be settled by arbitration administered by the American Arbitration
Association (“AAA”). The venue of the arbitration will be in Chicago,
Illinois; there will be three arbitrators selected by the AAA; the arbitration
will be conducted under the Commercial Arbitration Rules of the AAA; and the
decision or award of the arbitrators will be final and binding upon the parties
and may be enforced in any court having jurisdiction over the party against
whom enforcement is sought.



     To the extent that a party acquires rights under a Station contract that
applies to the other party’s continuing radio operations (such as a
multi-station contract), the other party agrees to use commercially reasonable
efforts (excluding, however, the incurrence of material expense) to provide the
acquiring party with the benefits of such contract through a subcontract or new
contract arrangement.



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6. Exclusivity




     In consideration of the effort and expense to be incurred by Bonneville
and Emmis between the date of this letter agreement and the date of the
execution by the parties of the Asset Exchange Agreement, the parties agree
that, prior to December 1, 2004, they will not, directly or indirectly,
solicit, encourage or consider alternative offers for the sale of all or part
of the Bonneville Assets or the Emmis Assets.



7. Tax Treatment




     The parties will undertake reasonable efforts to structure the Transaction
so that it qualifies to the maximum extent possible with respect to the
Bonneville Station and the Emmis Stations as a tax-deferred exchange under
Section 1031 of the Internal Revenue Code of 1986, as amended; provided,
however: (i) none of the parties hereto will have any responsibility for the
tax consequences to any other party hereunder for the Transaction; (ii) the
Transaction is not conditioned on such qualification; and (iii) BHC may elect
to treat the exchange of FCC licenses as a taxable event, as to BHC.



     Further, either party may elect to assign all or a portion of its
interests and obligations hereunder or under the Asset Exchange Agreement to a
“qualified intermediary” in order to qualify for Section 1031 exchange
treatment.



8. Non-Disclosure




     Each party acknowledges that it has entered into and remains bound by the
provisions of that certain Mutual Confidentiality Agreement, dated August 23,
2004, and that such agreement is intended to protect the information exchanged
by the parties pursuant to this letter agreement and continued negotiation of
the Transaction. In conjunction with the execution of this letter agreement,
the parties anticipate the joint preparation and release of a press release
that has been approved by Emmis and BIC. The parties will not make any further
public disclosures regarding this letter agreement or the Transaction that
contains information other than that included in the press release, provided
that the parties recognize the public availability of certain information that
may be provided pursuant to the HSR and FCC filings contemplated herein.



9. General Provisions




     (a) Termination. This letter agreement shall terminate upon the execution
of both the Asset Exchange and the TBAs. It may also be earlier terminated by:
(i) either party if the Asset Exchange Agreement and TBAs are not all executed
on or before December 1, 2004; (ii) the party acquiring a Station if there is a
material adverse change in the business or operations of a Station being
acquired; or (iii) Bonneville upon written notice if for any reason in
connection with this letter agreement, any definitive agreement, or
consummation of any of the transactions contemplated hereunder or thereunder
Bonneville would be required to disclose financial information regarding the
Corporation of the President of The Church of Jesus Christ of Latter-



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Day Saints or any subsidiary or affiliate thereof (other than Bonneville) to
any third party. Upon termination, all rights and obligations of the parties
shall terminate without any liability of any party to any other party (except
for any liability of any party then in breach), provided, however, the
non-solicitation and non-disclosure obligations between the parties and this
Section 9 shall survive such termination.



     (b) Entire Agreement. This letter agreement, together with the side
letters referred to herein and the Mutual Confidentiality Agreement between the
parties, constitutes the entire agreement in full between the parties. Any
prior written or oral negotiations, correspondence, or understandings relating
to the subject matter hereof shall be superseded by this letter agreement and
shall have no force or effect. Except as otherwise provided herein, the terms
of this letter agreement may be amended or modified only by a writing executed
by all of the parties.



     (c) Expenses. Except as set forth herein, the parties shall each pay
their own expenses and fees incurred in connection with Transaction, including
all legal and accounting fees and expenses, whether or not the Transaction is
consummated.



     (d) Attorneys’ Fees. In the event any legal proceedings are brought by a
party to resolve a dispute under this letter agreement, the party prevailing in
such legal proceedings shall be entitled to recover its reasonable attorneys’
fees and costs in such action.



     (e) Governing Law; Binding Effect. This letter agreement shall be
governed by the substantive laws (and not the laws of conflict) of the State of
Illinois. This letter agreement may be executed in two or more counterparts
(any of which may be by facsimile signature), all of which taken together will
constitute one binding agreement among the parties hereto and their successors
and assigns.



[signature page follows]




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          We believe this letter agreement sets forth an appropriate basis for
proceeding forward. If you concur, please execute and return it to Bonneville.



	 	 	 
	

	 	Very truly yours,
	 
	 	 
	

	 	BONNEVILLE INTERNATIONAL CORPORATION
	 
	 	 
	

	 	By: /s/ Bruce T. Reece


	 
	 	 
	

	 	BONNEVILLE HOLDING COMPANY
	 
	 	 
	

	 	By: /s/ M. Farrell Benson

















ACCEPTED AND AGREED TO:



EMMIS RADIO, LLC

EMMIS RADIO LICENSE, LLC



By Emmis Operating Company, Manager



	 	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jeffrey H. Smulyan


	 	 








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