Document:

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                                                                   Exhibit 10.66

                                                                  EXECUTION COPY

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                              EMPLOYMENT AGREEMENT

                                     BETWEEN

                                 RADIO ONE, INC.

                                       AND

                             ALFRED C. LIGGINS, III

                       Dated effective as of April 9, 2001

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11.     Resolution of Disputes ........................................... 15

12.     Successors ....................................................... 15
        12.1.   Executive ................................................ 15
        12.2.   The Company .............................................. 15

13.     Miscellaneous .................................................... 15
        13.1.   Applicable Law ........................................... 15
        13.2.   Amendments/Waiver ........................................ 15
        13.3.   Notices .................................................. 16
        13.4.   Withholding .............................................. 16
        13.5.   Severability ............................................. 16
        13.6.   Captions ................................................. 17
        13.7.   Entire Agreement ......................................... 17
        13.8.   Counterparts ............................................. 17
        13.9.   Representation ........................................... 17
        13.10.  Survivorship ............................................. 17
        13.11.  Right of Offset .......................................... 17

Exhibits
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Exhibit A     -     Option Agreement
Exhibit B     -     Form of 83(b) Election
Exhibit C     -     Promissory Note and Stock Pledge Agreement

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                              EMPLOYMENT AGREEMENT

                  THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated effective
as of April 9, 2001, is made by and between Radio One, Inc., a Delaware
corporation (the "Company"), and Alfred C. Liggins, III (the "Executive").

                  In consideration of the premises and mutual covenants herein
contained, the Company and Executive hereby agree as follows:

         1.       Definitions.

                  "Affiliate" shall mean any Person directly or indirectly
controlling, controlled by, or under common control with, the Company.

                  "Annual Base Salary" shall mean the annual base salary as
described in Section 5.1 hereof.

                  "Annual Incentive" shall have the meaning set forth in Section
5.2 hereof.

                  "Board" shall mean the board of directors of the Company.

                  "Cause" shall mean (i) the commission by the Executive of a
felony, fraud, embezzlement or an act of serious, criminal moral turpitude
which, in case of any of the foregoing, in the good faith judgment of the Board,
is likely to cause material harm to the business of the Company and the Company
Affiliates, taken as a whole, provided that in the absence of a conviction or
plea of nolo contendere, the Company will have the burden of proving the
commission of such act by clear and convincing evidence, (ii) the commission of
an act by the Executive constituting material financial dishonesty against the
Company or any Company Affiliate, provided that in the absence of a conviction
or plea of nolo contendere, the Company will have the burden of proving the
commission of such act by a preponderance of the evidence, (iii) the repeated
refusal by the Executive to use his reasonable and diligent efforts to follow
the lawful and reasonable directives (in light of the terms of this Agreement)
of the Board with respect to a matter or matters within the control of the
Executive, or (iv) the Executive's willful gross neglect in carrying out his
material duties and responsibilities under this Agreement, provided, that,
unless the Board reasonably determines that a breach described in clause (iii)
or (iv) is not curable, the Executive will, subject to the following proviso, be
given written notice of such breach and will be given an opportunity to cure
such breach to the reasonable satisfaction of the Board within thirty (30) days
of receipt of such written notice (subject to the Executive's right to seek
arbitration of the cure of such breach as provided in Section 11 of this
Agreement), and, provided further, that the Executive will only be entitled to
cure two such defaults during the Term of Employment.

                  "Change of Control" shall be deemed to have occurred in the
event of a transaction or series of related transactions pursuant to which any
Person or group (as such term is defined in Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended) of Persons, other than the Executive and
Catherine L. Hughes, (a) acquire, whether by merger, consolidation or transfer
or

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issuance of capital stock, capital stock of the Company (or any surviving or
resulting company) possessing the voting power to elect a majority of the Board
of the Company (or such surviving or resulting company) or (b) acquire all or
substantially all of the Company's assets determined on a consolidated basis.

                  "Class D Common Stock" shall mean the Company's class D common
stock, par value $.001 per share.

                  "COBRA" shall mean the requirements of Part 6 of Subtitle B of
Title I of ERISA and Codess.4980B and of similar state law.

                  "Code" shall mean the Internal Revenue Code of 1986, as
amended.

                  "Commencement Date" shall have the meaning set forth in
Section 3 hereof.

                  "Common Stock" shall mean all classes of the Company's Common
Stock and any capital stock of the Company distributed after the date of this
Agreement with respect to shares of Common Stock by way of dividend,
distribution, stock split, exchange, conversion, merger, consolidation,
reorganization or other recapitalization.

                  "Company Affiliate" shall mean any Subsidiary of the Company.

                  "Competing Business" shall have the meaning set forth in
Section 9(a) hereof.

                  "Competing Market" shall have the meaning set forth in Section
9(a) hereof.

                  "Confidential Information" shall have the meaning set forth in
Section 7 hereof.

                  "Date of Termination" shall mean the earlier of (a) the date
of termination, if any, specified in the Notice of Termination (which date shall
not be earlier than the date of receipt of such Notice of Termination) or (b)
the date on which the Executive's employment under this Agreement actually
terminates.

                  "Disability" shall mean the Executive's inability to render
the services required under this Agreement by reason of a physical or mental
disability for ninety (90) days, which need not be consecutive, during any
twelve (12) consecutive month period, and the effective date of such Disability
shall be the day next following such ninetieth (90th) day. A determination of
Disability will be made by a physician satisfactory to both the Executive and
the Company; provided that if the Executive and the Company cannot agree as to a
physician, then each will select a physician and such physicians shall together
select a third physician, whose determination as to Disability shall be
completed within ten (10) days of the date on which the disagreement between the
Executive and the Company arose and the decision of such third physician will be
final and binding on the Executive and the Company. The Executive and the
Company shall have the right to present to such physician such information and
arguments as each deems appropriate, including the opinion of other physicians.

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                  "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.

                  "Good Reason" shall be deemed to exist if, without the express
written consent of the Executive, (a) the Executive's rate of Annual Base Salary
(as provided in Section 5.1 of this Agreement), including any increases, is
reduced, (b) the Executive suffers a substantial reduction in his title, duties
or responsibilities, (c) the Company's headquarters shall be located outside the
geographic area described in Section 5.9 hereof, (d) the Company fails to pay
the Executive's Annual Base Salary when due or to pay any other material amount
due to the Executive hereunder within five (5) days of written notice from the
Executive, (e) the Company materially breaches this Agreement (other than a
breach described in the preceding clause (d)) and fails to correct such breach
within thirty (30) days after receiving the Executive's demand that it remedy
the breach, or (f) the Company fails to obtain a satisfactory written agreement
from any successor to assume and agree to perform this Agreement, which
successor the Executive reasonably concludes is capable of performing the
Company's financial obligations under this Agreement.

                  "Material Lines" shall have the meaning set forth in Section
9(a) hereof.

                  "Noncompete Period" shall have the meaning set forth in
Section 9(a) hereof.

                  "Note and Pledge Agreement" shall have the meaning set forth
in Section 5.12 hereof.

                  "Notice of Termination" shall have the meaning set forth in
Section 6.5 hereof.

                  "Options" shall have the meaning set forth in Section 5.10
hereof.

                  "Option Agreement" shall have the meaning set forth in Section
5.10 hereof.

                  "Option Shares" shall have the meaning set forth in Section
5.10 hereof.

                  "Person" shall mean any natural or legal person including any
individual, partnership, joint venture, corporation, association, joint stock
company, limited liability company, trust, unincorporated organization or
government or any department or agency or political subdivision thereof.

                  "Purchased Class D Common Stock" shall have the meaning set
forth in Section 5.11(a) hereof.

                  "Section 6.1 Severance Period" shall have the meaning set
forth in Section 6.1(a)(i) hereof.

                  "Section 6.2 Severance Period" shall have the meaning set
forth in Section 6.2(a)(i) hereof.

                  "Subsidiary" shall mean, with respect to any Person, a
corporation of which the securities having a majority of the voting power in
electing directors are, at the time of determination, owned by such Person,
directly or through one or more Subsidiaries.

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                  "Term of Employment" shall have the meaning set forth in
Section 3 hereof.

                  "Transfer" shall mean a sale, transfer, assignment, pledge,
hypothecation, mortgage or other disposition (whether with or without
consideration and whether voluntarily or involuntarily or by operation of law)
of any interest in any Option Shares or Common Stock; except that a transfer or
assignment to any trust established and maintained for the benefit of the
Executive shall not be deemed a Transfer hereunder; provided that such trust
agrees in writing to be bound by any transfer restrictions set forth herein.

                  "Vehicle Allowance" shall have the meaning set forth in
Section 5.7 hereof.

                  "Withholding Amount" shall have the meaning set forth in
Section 5.11(c) hereof.

                  "Work Product" shall have the meaning set forth in Section 8
hereof.

         2.       Employment. During the Term of Employment, subject to the
terms and provisions set forth in this Agreement, the Company shall employ
the Executive as the Chief Executive Officer and President of the Company and
the Executive hereby accepts such employment.

         3.       Term of Employment. The term of employment under this
Agreement shall commence as of the date hereof (the "Commencement Date") and,
unless earlier terminated by the Company or the Executive under Section 6 of
this Agreement, shall continue until April 8, 2005 (the "Term of Employment").

         4.       Positions, Responsibilities and Duties.

                  4.1.  Duties. During the Term of Employment, the Executive, as
the Chief Executive Officer and President of the Company, shall be responsible,
subject to the direction of the Board, for identifying acquisition opportunities
for the Company and providing strategic guidance, leadership and direction to
the management team of the Company and for such other duties and functions of a
senior executive nature, commensurate with his title, responsibility and
remuneration as may be directed from time to time by the Board. Executive shall
report solely to the Board.

                  4.2.  Attention to Duties and Responsibilities. During the
Term of Employment, the Executive shall devote substantially all of his business
time to the business and affairs of the Company and shall use his best efforts,
ability and fidelity to perform faithfully and efficiently his duties and
responsibilities.

         5.       Compensation and Other Awards.

                  5.1.  Annual Base Salary. Commencing on July 1, 2001, as
compensation for the services to be provided by the Executive under this
Agreement, the Company shall pay the Executive an annual base salary of
Five-Hundred Thousand Dollars ($500,000.00). The Executive's annual base salary
shall be increased (but not decreased) at the commencement of each subsequent
calendar year by an amount which shall be no less than five percent (5%) of such
annual base salary in effect immediately prior to such increase, or such greater
amount as the Board in its sole discretion shall

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decide. Such annual base salary shall be payable to the Executive in equal
installments at least twice per month in accordance with the Company's regular
payroll practice.

                  5.2.  Annual Incentive Compensation. The Board may, in its
sole discretion, award an annual incentive cash payment (the "Annual Incentive")
to the Executive during each or any year occurring during the Term of Employment
based upon the Executive's performance and the Company's operating results
during any such year. The Annual Incentive, if any, shall be due and payable by
the Company on or before February 28 of the year immediately following the year
for which such Annual Incentive is awarded.

                  5.3.  Retirement and Savings Plans. During the Term of
Employment and to the extent eligible, the Executive shall be entitled to
participate in all pension, retirement, savings and other employee benefit plans
and programs applicable to peer executives of the Company.

                  5.4.  Welfare Benefit Plans and Perquisites. During the Term
of Employment and to the extent eligible, Executive, Executive's spouse, if any,
and Executive's eligible dependents, if any, shall be entitled to participate in
and be covered by all welfare benefit plans and programs, if any, and shall be
entitled to receive such perquisites and fringe benefits, if any, generally
applicable to executives of the Company.

                  5.5.  Expense Reimbursement. During the Term of Employment,
the Executive shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by the Executive in performing his duties and
responsibilities hereunder in accordance with the policies and procedures of the
Company as in effect at the time the expense was incurred, as the same may be
changed prospectively from time to time.

                  5.6.  Vacation Benefits. During the Term of Employment, the
Executive shall be entitled to four (4) weeks paid vacation annually at such
times which do not materially interfere with the operations of the Company. Any
vacation not used by the Executive during any calendar year during the Term of
Employment shall accumulate to the extent permitted by and in accordance with
the Company policy then in effect.

                  5.7   Vehicle Allowance. During the Term of Employment, the
Executive shall be entitled to use of an automobile leased by the Company and
the Company shall also cover the cost of any and all applicable insurance
coverage therefor (the "Vehicle Allowance"). During the Term of Employment, the
monthly cost to the Company of such Vehicle Allowance shall be at least equal to
the monthly amount being paid by the Company for the Executive's automobile
lease and applicable insurance expenses on the date of this Agreement. Upon
expiration of the Company's lease, the Executive shall have the right to
purchase such vehicle in accordance with the terms of the Company's lease
agreement for such vehicle.

                  5.8.  Wireless Communications Allowance. During the Term of
Employment, the Executive shall be entitled to use of a wireless telephone
and/or other wireless communications devices with all equipment and service
costs thereof to be borne by the Company.

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                  5.9.  Geographic Location. The Executive's services hereunder
shall be rendered primarily in (a) the Washington, D.C. metropolitan area, or
(b) such other location mutually agreed to by the Company and the Executive.

                  5.10. Stock Options. Effective as of April 3, 2001, the
Company granted to the Executive options to purchase Two Hundred Fifty Thousand
shares of Class D Common Stock (the "Options," and the shares of Class D Common
Stock obtainable upon exercise of such Options, the "Option Shares"). Except as
set forth in this Section 5.10, all terms and conditions of such Options (and
such Option Shares) shall be set forth in the option agreement attached hereto
as Exhibit A evidencing the grant of such Options (the "Option Agreement").

                        (a)   The price payable by the Executive for each Option
Share shall be as set forth in the Option Agreement.

                        (b)   The Options to purchase Option Shares shall vest
and first become exercisable as described in the vesting schedule set forth in
the Option Agreement.

                        (c)   Upon a Change of Control, all of the Executive's
Options shall become fully and immediately exercisable.

                        (d)   Upon termination of the Executive's employment
hereunder, any then unexercisable Option shall expire and be immediately
forfeited. The Executive's right to exercise any exercisable Option following
termination of his employment shall also expire and be forfeited to the extent
that such Options are not exercised on or before the ninetieth (90th) day
following such termination.

                        (e)   All unexercised Options to acquire Option Shares
shall expire on the tenth anniversary of their respective dates of grant.

                        (f)   During the Term of Employment, the Executive may
not Transfer any Options, whether or not exercised.

                  5.11. Subscription for and Purchase of Class D Common Stock;
Repurchase of Purchased Class D Common Stock.

                        (a)   The Executive hereby subscribes for and agrees to
purchase,  and the Company hereby agrees to issue and sell to the Executive on
the date hereof, One Million Five Hundred Thousand (1,500,000) shares of Class D
Common Stock (the "Purchased Class D Common Stock"), for an aggregate purchase
price of Twenty One Million One Hundred Five Thousand Dollars ($21,105,000.00).

                        (b)   The Company and the Executive agree that as of the
Commencement Date, the value of the Purchased Class D Common Stock is Twenty One
Million One Hundred Five Thousand Dollars ($21,105,000.00). The Company and the
Executive shall use reasonable efforts to take accounting and tax positions
consistent with such valuation. Not later than thirty (30) days after the
Commencement Date, the Executive shall make an election, in the form attached
hereto as

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Exhibit B, to have the Purchased Class D Common Stock taxed under the provisions
of ss.83(b) of the Internal Revenue Code.

                        (c)   The Executive shall be responsible for the payment
of any withholding tax requirement arising from his purchase of the Purchased
Class D Common Stock. The amount of withholding tax required with respect to the
Executive's purchase of the Purchased Class D Common Stock (the "Withholding
Amount") shall be determined by the Chief Financial Officer, Controller or other
appropriate officer of the Company, and the Executive shall furnish such
information and make such representations as such officer requires to make such
determination. The Company shall notify the Executive of the Withholding Amount
and the Executive shall pay such Withholding Amount to the Company, either in
cash, by certified cashier's check, or by delivery to the Company of a full
recourse promissory note of the Executive in form and substance acceptable to
the Company. The Company shall remit the Withholding Amount to the appropriate
taxing authority or authorities.

                        (d)   The Purchased Class D Common Stock shall vest in
accordance with the following vesting schedule:

                           Vesting Date               Number of Shares Vested
                           -------------              -----------------------
                           April 8, 2002                      375,000
                           April 8, 2003                      750,000
                           April 8, 2004                    1,125,000
                           April 8, 2005                    1,500,000

                        (e)   Upon a Change of Control, all of the Executive's
unvested Class D Common Stock shall immediately become fully vested.

                        (f)   During the Term of  Employment, the Executive may
not Transfer any unvested Purchased Class D Common Stock, except as provided
in Section 5.11(g) hereof and except that the Executive may pledge shares of
unvested Purchased Class D Common Stock to the Company. Any Transfer or
attempted Transfer of any unvested Purchased Class D Common Stock in violation
of this Section 5.11(f) shall be null and void, and the Company shall not record
such Transfer on its books or treat any purported transferee of such unvested
Purchased Class D Common Stock as the owner of such securities for any purpose.

                        (g)   Upon termination of the Executive's employment
hereunder, (i) the Company may repurchase from the Executive any unvested
Purchased Class D Common Stock and (ii) the Executive may require the Company to
repurchase from the Executive any unvested Purchased Class D Common Stock, in
each case for a purchase price of Fourteen Dollars and Seven Cents ($14.07) per
share.

                        (h)   The Executive hereby  acknowledges  that the
Purchased Class D Common Stock has not been registered under the Securities Act
of 1933, as amended, and accordingly, such Purchased Class D Common Stock may be
subject to certain transfer restrictions (in addition to the transfer
restrictions on unvested Purchased Class D Common Stock set forth in Section
5.11(f) hereof). The certificate(s) representing such Purchased Class D Common
Stock will bear the following legend:

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          THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
          REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
          AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
          REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION
          THEREUNDER. THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY ALSO BE
          SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER, CERTAIN REPURCHASE
          OPTIONS, AND CERTAIN OTHER AGREEMENTS SET FORTH IN AN EMPLOYMENT
          AGREEMENT BETWEEN THE COMPANY AND THE SIGNATORY THERETO. A COPY OF
          SUCH AGREEMENT MAY BE OBTAINED BY THE HOLDER HEREOF AT THE COMPANY'S
          PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE.

                        (i)   The Company shall use its commercially reasonable
efforts to include in any registration statement on Form S-3 (or any similar or
successor "short-form" registration statement, other than any such registration
statement relating to the issuance of shares of Common Stock or rights to
receive shares of Common Stock pursuant to any employee benefit or equity
compensation plan or relating to any transaction described in Rule 145 under the
Securities Act of 1933, as amended) filed with the Securities and Exchange
Commission after April 8, 2002, shares of Purchased Class D Common Stock owned
by the Executive that have become vested pursuant to Section 5.11(d) hereof on
or before the date on which such registration statement is filed or becomes
effective.

                  5.12. Promissory Note and Stock Pledge Agreement. In order to
finance the Executive's purchase of the Purchased Class D Common Stock pursuant
to Section 5.11 hereof, the Company shall loan to the Executive on the
Commencement Date the principal amount of Twenty One Million One Hundred Five
Thousand Dollars ($21,105,000.00), evidenced by the Promissory Note and Stock
Pledge Agreement of even date herewith and attached hereto as Exhibit C (the
"Note and Pledge Agreement"), pursuant to which the Executive shall pledge all
of the Purchased Class D Common Stock to the Company.

         6.       Termination.  The Executive's employment hereunder may be
terminated under the following circumstances:

                  6.1.  Termination Upon Expiration of Term of Employment or by
Executive Upon Change of Control.

                        (a)   In the event of a termination by the Company of
the Executive's employment under this Agreement upon expiration of the Term of
Employment in accordance with Section 3 hereof (except as provided in Section
6.2 hereof) or pursuant to Section 6.1(c) hereof, the Term of Employment shall
end and, notwithstanding Section 5 hereof, the Executive shall only be entitled
to:

                              (i)   the continuation of the Annual Base Salary
         at the rate then in effect (as provided in Section 5.1 of this
         Agreement) on the Date of Termination for a period of six (6) months
         commencing on such Date of Termination (the "Section 6.1 Severance
         Period").

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                              (ii)  any Annual Base Salary accrued to the Date
         of Termination, and any Annual Incentive relating to a prior year
         actually awarded or, relating to any year, objectively determinable,
         but not yet paid as of the Date of Termination;

                              (iii) reimbursement for all expenses (under
         Sections 5.5, 5.7 and 5.8 of this Agreement) incurred as of the Date of
         Termination, but not yet paid as of the Date of Termination;

                              (iv)  to the extent applicable, and as so
         permitted by applicable law, the continuation of the Executive's
         welfare benefits (as described in Section 5.4 of this Agreement) at the
         level in effect on the Date of Termination during the Section 6.1
         Severance Period or beyond as the law requires, and any other
         compensation and benefits as may be provided in accordance with the
         terms and provisions of applicable plans and programs, if any,
         generally applicable to executives of the Company or specifically
         applicable to the Executive, provided, that if Company is not able to
         provide continuing coverage under any such welfare benefit plan or
         program following the Executive's termination, the Company shall pay to
         the Executive cash in an amount sufficient to permit Executive to
         obtain substantially similar coverage outside of the Company's policy
         or program during such Section 6.1 Severance Period, and provided,
         further, that the Company shall pay all premiums for COBRA group health
         continuation coverage for the Executive and his dependents during such
         Section 6.1 Severance Period; and

                              (v)   such rights as the Executive may have under
         any other written agreement between the Company and the Executive which
         is then currently in effect.

                        (b)   The amounts owed under Section 6.1(a)(i) shall be
payable in equal bi-weekly installments from the Date of Termination through the
expiration of the Section 6.1 Severance Period. The amounts owed under Section
6.1(a)(ii) shall be paid within fifteen (15) days of the Date of Termination.
The amounts owed under Section 6.1(a)(iii), unless otherwise expressly specified
herein, shall be paid in accordance with the policies and procedures of the
Company in effect at the time the applicable expenses were incurred. The amounts
owed under Section 6.1(a)(iv) shall be payable in accordance with the terms of
the applicable plans and programs, except cash amounts to be paid in accordance
with the proviso of Section 6.1(a)(iv), which shall be paid within sixty (60)
days of the Date of Termination. The amounts owed under Section 6.1(a)(v) shall
be paid within sixty (60) days of the Date of Termination.

                        (c)   At any time during the six (6) month period
immediately following a Change of Control, the Executive may, in his sole
discretion and upon thirty (30) days' prior written notice to the Board,
terminate his employment under this Agreement and receive the benefits provided
under Section 6.1(a) hereof.

                  6.2.  Termination by the Company Without Cause or Upon Change
of Control or by Executive for Good Reason.

                        (a)   In the event that the Company  terminates the
Executive's employment without Cause, or in accordance with Section 3 hereof at
any time during the six month period

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immediately following a Change of Control, or if the Executive terminates his
employment for Good Reason, the Executive shall only be entitled to:

                              (i)   the continuation of the Annual Base Salary
         at the rate then in effect (as provided in Section 5.1 of this
         Agreement) on the Date of Termination for a period of twelve (12)
         months commencing on such Date of Termination (the "Section 6.2
         Severance Period").

                              (ii)  any Annual Base Salary accrued to the Date
         of Termination, and any Annual Incentive relating to a prior year
         actually awarded or, relating to any year, objectively determinable,
         but not yet paid as of the Date of Termination;

                              (iii) reimbursement for all expenses (under
         Sections 5.5, 5.7 and 5.8 of this Agreement) incurred as of the Date of
         Termination, but not yet paid as of the Date of Termination;

                              (iv)  to the extent applicable, and as so
         permitted by applicable law, the continuation of the Executive's
         welfare benefits (as described in Section 5.4 of this Agreement) at the
         level in effect on the Date of Termination during the Section 6.2
         Severance Period or beyond as the law requires, and any other
         compensation and benefits as may be provided in accordance with the
         terms and provisions of applicable plans and programs, if any,
         generally applicable to executives of the Company or specifically
         applicable to the Executive, provided, that if Company is not able to
         provide continuing coverage under any such welfare benefit plan or
         program following the Executive's termination, the Company shall pay to
         the Executive cash in an amount sufficient to permit Executive to
         obtain substantially similar coverage outside of the Company's policy
         or program during such Section 6.2 Severance Period, and provided,
         further, that the Company shall pay all premiums for COBRA group health
         continuation coverage for the Executive and his dependents during such
         Section 6.2 Severance Period; and

                              (v)   such rights as the Executive may have under
         any other written agreement between the Company and the Executive which
         is currently in effect.

                        (b)   The amounts owed under Section 6.2(a)(i) shall be
payable in equal bi-weekly installments from the Date of Termination through the
expiration of the Section 6.2 Severance Period. The amounts owed under Section
6.2(a)(ii) shall be paid within fifteen (15) days of the Date of Termination.
The amounts owed under Section 6.2(a)(iii), unless otherwise expressly specified
herein, shall be paid in accordance with the policies and procedures of the
Company in effect at the time the applicable expenses were incurred. The amounts
owed under Section 6.2(a)(iv) shall be payable in accordance with the terms of
the applicable plans and programs, except cash amounts to be paid in accordance
with the proviso of Section 6.2(a)(iv), which shall be paid within sixty (60)
days of the Date of Termination. The amounts owed under Section 6.2(a)(v) shall
be paid within sixty (60) days of the Date of Termination.

                        (c)   Upon thirty (30) days' prior written notice to the
Board, the Executive may terminate his employment under this Agreement for Good
Reason and such notification shall specify the act, or acts, on the basis of
which the Executive has found Good Reason. The Board shall then

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be provided the opportunity, within thirty (30) days of its receipt of such
notification, to meet with the Executive to discuss such act or acts. If the
Executive does not rescind his termination of employment at such meeting, the
Executive's employment by the Company shall be terminated for Good Reason
pursuant to this Section 6.2, subject to the Company's right to seek arbitration
of the existence of Good Reason as provided in Section 11 of this Agreement, and
the Executive shall receive the benefits provided under Section 6.2(a) hereof.
The Company agrees that the Executive's continuation of his employment during
the initial six-month period following the occurrence of a Good Reason shall not
constitute a waiver of his rights to resign for Good Reason, which shall be
preserved during such period.

                  6.3.  Termination Due to Death or Disability, by the Company
for Cause or by Executive without Good Reason.

                        (a)   In the event of the Executive's  death, or a
termination of the Executive's employment under this Agreement by either the
Company or the Executive due to Disability, or the termination by the Company of
the Executive's employment under this Agreement for Cause, or if the Executive
terminates his employment with the Company without Good Reason (other than as
provided in Section 6.1(c)), the Term of Employment shall end and,
notwithstanding Section 5 hereof, the Executive, his estate or other legal
representative, as the case may be, shall only be entitled to:

                              (i)   any Annual Base Salary accrued to the Date
         of  Termination, and any Annual Incentive relating to a prior year
         actually  awarded or, relating to any year, objectively determinable,
         but not yet paid as of the Date of Termination;

                              (ii)  reimbursement for all expenses (under
         Sections 5.5, 5.7 and 5.8 of this Agreement) incurred as of the Date of
         Termination, but not yet paid as of the Date of Termination;

                              (iii) any other compensation and benefits as may
         be provided in accordance with the terms and provisions of applicable
         plans and programs, if any, generally applicable to executives of the
         Company or specifically applicable to the Executive; and

                              (iv)  such rights as the Executive may have under
         any other written agreement between the Company and the Executive which
         is currently in effect.

                        (b)   The amounts owed under Section 6.3(a)(i) shall be
paid within fifteen (15) days of the Date of Termination. The amounts owed under
Section 6.3(a)(ii), unless otherwise expressly specified herein, shall be paid
in accordance with the policies and procedures of the Company in effect at the
time the applicable expenses were incurred. The amounts owed under Section
6.3(a)(iii) shall be payable in accordance with the terms of the applicable
plans and programs. The amounts owed under Section 6.3(a)(iv) shall be paid
within sixty (60) days of the Date of Termination.

                        (c)   The Company may terminate the Executive for Cause.
In each case, the existence of Cause must be confirmed by the Board prior to any
termination therefor. In the event of such a confirmation, the Company shall
notify the Executive that the Company intends to

                                      -11-

<PAGE>

terminate the Executive's employment for Cause under this Section 6.3. Such
notification shall specify the act, or acts, on the basis of which the Board has
so confirmed the existence of Cause.

                        (d)   Upon sixty (60) days' prior written  notice to the
Board, Executive may terminate his employment under this Agreement without Good
Reason.

                  6.4.  No Mitigation; No Offset. In the event of any
termination of employment, the Executive shall be under no obligation to seek
other employment and there shall be no offset against any amounts due the
Executive under this Agreement on account of any remuneration attributable to
any subsequent employment that the Executive may obtain. Any amounts due under
this Section 6 are in the nature of severance payments, or liquidated damages,
or both, and are not in the nature of a penalty.

                  6.5.  Notice of Termination. Any termination of the
Executive's employment under this Section 6 shall be communicated by a notice of
termination (the "Notice of Termination") to the other party hereto given in
accordance with Section 13.3 of this Agreement. Such notice shall (a) indicate
the specific termination provision in this Agreement relied upon, (b) set forth
in reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated, and
(c) if the termination date is other than the date of receipt of such notice,
specify the date on which the Executive's employment is to be terminated (which
date shall not be earlier than the date on which such notice is actually
received).

         7.       Confidential Information. The Executive acknowledges that the
confidential or proprietary information obtained by him while employed by the
Company concerning the business or affairs of the Company or any Affiliate of
the Company ("Confidential Information") is the property of the Company or such
Affiliate, as the case may be. For purposes of this Agreement, the term
"Confidential Information" does not include information that the Executive can
demonstrate (a) was in the Executive's possession prior to first being employed
by the Company, provided that such information is not known by the Executive to
be subject to another confidentiality agreement with, or other obligation of
secrecy to, the Company or another party, (b) is generally available to the
public and became generally available to the public other than as a result of a
disclosure in violation of this Agreement, (c) became available to the Executive
on a non-confidential basis from a third party, provided that such third party
is not known by the Executive to be bound by a confidentiality agreement with,
or other obligation of secrecy to, the Company or another party or is otherwise
prohibited from providing such information to the Executive by a contractual,
legal or fiduciary obligation or (d) the Executive is required to disclose
pursuant to applicable law or regulation (as to which information, the Executive
will provide the Company with prior notice of such requirement and, if
practicable, an opportunity to obtain an appropriate protective order). The
Executive agrees that he will not during the Term of Employment and for the
two-year period following the Term of Employment, willfully disclose
Confidential Information to any Person (other than employees of the Company or
any Subsidiary thereof or any other Person expressly authorized by the Board to
receive Confidential Information or otherwise as required in the course of his
duties during the Term of Employment) or use for his own account any
Confidential Information without the prior written consent of the Board. The
Executive shall deliver to the Company at the termination of the Term of
Employment, or at any other time the Board may request in writing, all
memoranda, notes, plans, records, reports, computer tapes and software and other
documents and

                                      -12-

<PAGE>

data (and copies thereof) containing Confidential Information or Work Product
which he may then possess or have under his control. The Company shall, upon the
Executive's request, provide to the Executive a copy of such documents as may be
reasonably necessary for the Executive to exercise his rights under Section 11
hereof, or to defend himself in any third party shareholder disputes, and which
shall otherwise remain subject to the provisions of this Section 7.

         8.       Work Product. The Executive agrees that all inventions,
innovations, improvements, developments, methods, designs, analyses, reports and
all similar or related information which relate to the Company's or its
Subsidiaries' actual business, research and development or existing products or
services and which are conceived, developed or made by the Executive while
employed with the Company ("Work Product") belong to the Company or such
Subsidiary. Upon the written request of the Board, the Executive will promptly
disclose such Work Product to the Board and perform all actions reasonably
requested by the Board (whether during or after the Term of Employment) to
establish and confirm such ownership.

         9.       Noncompete, Non-Solicitation.

                        (a)   Executive acknowledges that in the course of his
employment with the Company he will become familiar with the trade secrets and
other confidential information of the Company and the Subsidiaries of the
Company and that his services will be of special, unique and extraordinary value
to the Company. Therefore, Executive agrees that, during the Term of Employment
and for an additional period (the "Noncompete Period") equal to (i) in the event
that Executive's employment is terminated pursuant to Section 6.1 hereof, for a
period of six (6) months thereafter or (ii) in the event that Executive's
employment terminated pursuant to Section 6.2 or Section 6.3 hereof, for a
period of one (1) year thereafter, he shall not directly or indirectly own,
manage, control, participate in, consult with, or render services for any
"Competing Business" (as defined below) in any "Competing Market" (as defined
below). For purposes of this section, a "Competing Business" is one in which the
predominant activities of the business are classified under the same principal
Standard Industrial Classification category (using the categories as in effect
on April 9, 2001) as any of the "Material Lines" (as defined below) of the
Company and the Company Affiliates. A division or subsidiary of a diversified
business will be treated as a Competing Business only if (i) the diversified
business falls within the preceding sentence and (ii) either (I) Executive
directly provides services to that division or subsidiary as his primary
employment within the diversified business or (II) that division or subsidiary
would be a Material Line on a consolidated basis as defined below for the
potentially competing diversified business. A "Competing Market" is a geographic
market (as defined by The Arbitron Company) in which the Company or any Company
Affiliate has, on or before the Date of Termination, with respect to one or more
Material Lines, (i) commenced material operations or (ii) determined before such
date to commence such material operations and committed substantial resources to
either determining the feasibility of such commencement or actually commencing
such operations. A geographic market in which the Company or any Company
Affiliate operates a Material Line will only be treated as a Competing Market
for the Material Line in that market, and not for other Material Lines or other
operations of the Company and its Company Affiliates. A "Material Line" is a
division, subsidiary, or business line from which the Company and its Company
Affiliates derived at least 25% of audited consolidated gross revenues for the
Company's fiscal year ended before the Date of Termination. The Company agrees
that any businesses arising out of or related to (y) the interest in or
ownership of an FM radio station licensed in Mableton, Georgia by Mableton
Investment Group (in which the

                                      -13-

<PAGE>

Executive has an equity interest), and (z) Executive's current ownership of and
interest in Music One, Inc., are expressly excluded from the intended scope of
this provision and thus not Competing Businesses. Nothing herein shall prohibit
Executive from being a passive owner of not more than 4.9% of the outstanding
stock of any class of a corporation which is publicly traded, so long as
Executive has no active participation in the business of such corporation.

                        (b)   During the Noncompete Period, the Executive shall
not directly or indirectly through another Person (i) induce or attempt to
induce any employee of the Company or any Subsidiary of the Company to leave the
employ of such Person, (ii) hire any individual who was an executive of the
Company or its Subsidiaries, a general, station or regional manager of the
Company or its Subsidiaries or a radio personality employed by the Company or
its Subsidiaries at any time during the Term of Employment (other than
individuals who have not been employed by the Company or a Subsidiary of the
Company for a period of at least six months prior to employment by the Executive
directly or indirectly through another Person), or (iii) induce or attempt to
induce any customer, supplier, licensee or other Person having a business
relationship with the Company or any Subsidiary of the Company to cease doing
business with the Company or such Subsidiary of the Company, or interfere
materially with the relationship between any such customer, supplier, licensee
or other Person having a business relationship with the Company or any
Subsidiary of the Company.

                        (c)   If, at the time of enforcement of this Section 9,
a court shall hold that the duration, scope or area restrictions stated herein
are unreasonable under circumstances then existing, the parties agree that the
maximum duration, scope or area reasonable under such circumstances shall be
substituted for the stated duration, scope or area and that the court shall be
allowed to revise the restrictions contained herein to cover the maximum period,
scope and area permitted by law.

         10.      Non-Exclusivity of  Rights. Nothing in this Agreement shall
limit or otherwise prejudice such rights as the Executive may have under any
future agreements with the Company.

         11.      Resolution of Disputes. Any disputes arising under or in
connection with this Agreement shall be resolved by arbitration, to be held in
Baltimore, Maryland, in accordance with the Commercial Arbitration Rules and
procedures of the American Arbitration Association. Such arbitration shall be
before a single arbitrator who shall be a retired federal or Maryland State
judge acceptable to the Company and the Executive. In the event that the
Executive and the Company cannot agree upon an arbitrator within thirty (30)
days of a notice demanding such agreement from one to the other, the arbitrator
shall be chosen by the American Arbitration Association in accordance with its
Commercial Arbitration Rules. The decision of the arbitrator shall be final,
conclusive and binding upon the Company and the Executive. All costs, fees and
expenses, including attorney fees, of any arbitration in connection with this
Agreement, which results in any final decision of the arbitrator requiring the
Company to make a payment to the Executive beyond what was offered to the
Executive by the Company, shall be borne by, and be the obligation of, the
Company. In no event shall the Executive be required to reimburse the Company
for any of the costs and expenses incurred by the Company relating to any
arbitration. If the Executive has had an opportunity to be heard by the Board
and the Board has made a good faith determination to terminate the Executive
hereunder, the Company may suspend payments to the Executive of his Annual Base
Salary; provided that in the event that an arbitrator finds in favor of the
Executive, the Company
                                      -14-

<PAGE>

shall pay such suspended Annual Base Salary payments to the Executive, together
with interest thereon at the greater of 8% or prime plus 3% per annum from the
date such payments were due to the date actually paid. The obligation of the
Company and the Executive under this Section 11 shall survive the termination
for any reason of the Term of Employment (whether such termination is by the
Company, by the Executive, or upon the expiration of the Term of Employment).

         12.      Successors.

                  12.1. Executive. This Agreement is personal to the Executive
and, without the prior express written consent of the Company, shall not be
assignable by the Executive, except that the Executive's rights to receive any
compensation or benefits under this Agreement may be transferred or assigned
pursuant to testamentary disposition, intestate succession or pursuant to a
qualified domestic relations order. This Agreement shall inure to the benefit of
and be enforceable by the Executive's heirs, beneficiaries and/or legal
representatives.

                  12.2. The Company. This Agreement shall inure to the benefit
of and be binding upon the Company and its successors and assigns, provided that
the Company may only transfer or assign this Agreement with the Executive's
prior written consent.

         13.      Miscellaneous.

                  13.1. Applicable Law. The corporate law of the State of
Delaware will govern all questions concerning the relative rights of the Company
and its stockholders. All other questions concerning the construction, validity
and interpretation of this Agreement shall be governed by and construed in
accordance with the internal laws of the State of Maryland.

                  13.2. Amendments/Waiver. This Agreement may not be amended or
modified other than by a written agreement executed by the parties hereto or
their respective successors and legal representatives. No waiver by any party to
this Agreement of any breach of any term, provision or condition of this
Agreement by the other party shall be deemed a waiver of a similar or dissimilar
term, provision or condition at the same time, or any prior or subsequent time.

                  13.3. Notices. All notices, waivers and other communications
hereunder shall be in writing and shall be given by hand-delivery to the other
party, by facsimile (with appropriate confirmation of transmission), by
reputable overnight courier, or by registered or certified mail, return receipt
requested, postage prepaid, and shall be deemed delivered when actually
delivered by hand, upon receipt of confirmation of facsimile transmission, three
days after mailing, or one day after dispatch by overnight courier, addressed as
follows:

                  If to the Executive:

                        Mr. Alfred C. Liggins
                        813 Maryland Avenue, NE
                        Washington, DC 20002

                                      -15-

<PAGE>

                  If to the Company:

                        Radio One, Inc.
                        5900 Princess Garden Parkway, 7th Floor
                        Lanham, MD 20706
                        Attention:  General Counsel
                        Facsimile:  301-306-9638

or to such other address as either party shall have furnished to the other in
writing in accordance herewith.

                  13.4.   Withholding. Notwithstanding anything else to the
contrary herein, the Company may withhold from any amounts payable under this
Agreement such taxes as shall be required to be withheld pursuant to any
applicable law or regulation. Where amounts are payable to the Executive
pursuant to this Agreement both in cash and in a form other than cash, the
Company may, at its option and upon prior notice to the Executive, withhold from
such cash payments, or withhold from such payments in a form other than cash, or
withhold from both.

                  13.5.   Severability. If any provision of this Agreement is
held to be illegal, invalid or unenforceable under any present or future law,
and if the rights or obligations of any party hereto under this Agreement will
not be materially and adversely affected thereby: (a) such provision will be
fully severable; (b) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof;
(c) the remaining provisions of this Agreement will remain in full force and
effect and will not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom; and (d) in lieu of such illegal, invalid
or unenforceable provision, there will be added automatically as a part of this
Agreement a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as shall be agreed upon by the
Company and the Executive.

                  13.6.   Captions. The captions of this Agreement are not part
of the provisions hereof and shall have no force or effect.

                  13.7.   Entire Agreement. This Agreement contains the entire
agreement between the parties concerning the subject matter hereof and
supersedes all prior agreements, understandings, discussions, negotiations and
undertakings, whether written or oral, between the parties with respect thereto.

                  13.8.   Counterparts. This Agreement may be executed in
separate counterparts, each of which is deemed to be an original and all of
which taken together constitute one and the same agreement.

                  13.9.   Representation. The Executive represents and warrants
that the performance of the Executive's duties and obligations under this
Agreement will not violate any agreement between the Executive and any other
Person.

                  13.10.  Survivorship. The respective rights and obligations of
the parties under this Agreement shall survive any termination of this Agreement
or the Executive's employment

                                      -16-

<PAGE>

hereunder for any reason to the extent necessary to the intended preservation of
such rights and obligations.

                  13.11.  Right of Offset. The Executive and the Company agree
that concurrently with the execution and delivery of this Agreement the Company
and the Executive are entering into the Note and Pledge Agreement. At the sole
option of Executive, any amounts due under the Note and Pledge Agreement shall
be offset against any amount due under or with respect to this Agreement.

                                  [END OF PAGE]

                            [SIGNATURE PAGE FOLLOWS]

                                      -17-

<PAGE>

                  IN WITNESS WHEREOF, the Executive has hereunto set his hand,
and the Company has caused this Employment Agreement to be executed in its name
and on its behalf by its authorized representative, all as of the day and year
first above written.

                                          RADIO ONE, INC.,
                                          a Delaware corporation

                                          By:  /s/   Scott R. Royster
                                             -----------------------------------
                                             Name:   Scott R. Royster
                                             Title:  Chief Financial Officer and
                                                     Executive Vice President

                                          EXECUTIVE:

                                               /s/   Alfred C. Liggins, III
                                          --------------------------------------
                                                     Alfred C. Liggins, III<PAGE>

                                                                   EXHIBIT 10.35

[LOGO]

                          LIMITED GUARANTY AGREEMENT
                          --------------------------

    THIS LIMITED GUARANTY AGREEMENT ("Guaranty") is made as of the 10th day of
                                      --------
April, 2001, by Guarantor (as hereinafter defined) for the benefit of Lender (as
hereinafter defined).

     1.   Definitions. As used in this Guaranty, the following terms shall have
          -----------
the meanings indicated below:

     (a)  The term "Lender" shall mean THE FROST NATIONAL BANK, a national
                    ------
banking association, whose address for notice purposes is the following:

                    P.O. Box 1600, San Antonio, Texas 78296
                           Attn:  Ms. Shannon Bettis

     (b)  The term "Borrower" (whether one or more) shall mean the following:
                    --------

              SCHLOTZSKY'S NATIONAL ADVERTISING ASSOCIATION, INC.
                        and SCHLOTZSKY'S N.A.M.F., INC.

     (c)  The term "Guarantor" shall mean SCHLOTZSKY'S, INC., a Texas
                    ---------
corporation, whose address for notice purposes is the following:

                              203 Colorado Street
                              Austin, Texas 78701
                            Attn:  Legal Department

     (d)  The term "Guaranteed Indebtedness" shall mean (i) all indebtedness,
                    -----------------------
obligations and liabilities of Borrower to Lender of any kind or character, now
existing or hereafter arising, whether direct, indirect, related, unrelated,
fixed, contingent, liquidated, unliquidated, joint, several or joint and
several, and regardless of whether such indebtedness, obligations and
liabilities may, prior to their acquisitions by Lender, be or have been payable
to or in favor of a third party and subsequently acquired by Lender (it being
contemplated that Lender may make such acquisitions from third parties),
including without limitation all principal indebtedness owing by Borrower to
Lender now existing or hereafter arising under or evidenced by (a) that one
certain Revolving Promissory Note (the "Revolving Note") of even date herewith
in the original principal amount of $500,000.00, executed by Borrower and
payable to the order of Lender and (b) that one certain Promissory Note (the
"Term Note") of even date herewith in the original principal amount of
$3,500,000.00, executed by Borrower and payable to the order of Lender, all
indebtedness, obligations and liabilities of Borrower to Lender now existing or
hereafter arising by note, draft, acceptance, guaranty, endorsement, letter of
credit, assignment, purchase, overdraft, discount, indemnity agreement or
otherwise, (ii) all accrued but unpaid interest on any of the indebtedness
described in (i) above, (iii) all obligations of Borrower to Lender under any
documents evidencing, securing, governing and/or pertaining to all or any part
of the indebtedness described in (i) and (ii) above (collectively, the "Loan
                                                                        ----
Documents"),
---------

                                       1
<PAGE>

(iv) all costs and expenses incurred by Lender in connection with the collection
and administration of all or any part of the indebtedness and obligations
described in (i), (ii) and (iii) above or the protection or preservation of, or
realization upon, the collateral securing all or any part of such indebtedness
and obligations, including without limitation all reasonable attorneys' fees,
and (v) all renewals, extensions, modifications and rearrangements of the
indebtedness and obligations described in (i), (ii), (iii) and (iv) above.

     2.   Obligations. As an inducement to Lender to extend or continue to
          -----------
extend credit and other financial accommodations to Borrower, Guarantor, for
value received, does hereby unconditionally and absolutely guarantee the prompt
and full payment and performance of the Guaranteed Indebtedness when due or
declared to be due and at all times thereafter; provided, however, Guarantor's
obligations hereunder for that portion of the Guaranteed Indebtedness that
represents principal shall be limited to the sum of (a) the cash received
contemporaneously herewith by Borrower in the amount of $3,500,000 from the
proceeds of the Term Note, which amounts paid down certain notes owed to
Guarantor by Borrower, and (b) any cash proceeds of the Revolving Note received
by Guarantor from time to time.

     3.   Character of Obligations.
          ------------------------

     (a)  This is an absolute, continuing and unconditional guaranty of payment
and not of collection and if at any time or from time to time there is no
outstanding Guaranteed Indebtedness, the obligations of Guarantor with respect
to any and all Guaranteed Indebtedness incurred thereafter shall not be
affected. This Guaranty and the Guarantor's obligations hereunder are
irrevocable and, in the event of Guarantor's death, shall be binding upon
Guarantor's estate. All of the Guaranteed Indebtedness shall be conclusively
presumed to have been made or acquired in acceptance hereof. Guarantor shall be
liable, jointly and severally, with Borrower and any other guarantor of all or
any part of the Guaranteed Indebtedness.

     (b)  Lender may, at its sole discretion and without impairing its rights
hereunder, (i) apply any payments on the Guaranteed Indebtedness that Lender
receives from Borrower or any other source other than Guarantor to that portion
of the Guaranteed Indebtedness, if any, not guaranteed hereunder, and (ii) apply
any proceeds it receives as a result of the foreclosure or other realization on
any collateral for the Guaranteed Indebtedness to that portion, if any, of the
Guaranteed Indebtedness not guaranteed hereunder or to any other indebtedness
secured by such collateral.

     (c)  Guarantor agrees that its obligations hereunder shall not be released,
diminished, impaired, reduced or affected by the existence of any other guaranty
or the payment by any other guarantor of all or any part of the Guaranteed
Indebtedness and, in the event Paragraph 2 above partially limits Guarantor's
                               -----------
obligations under this Guaranty, Guarantor's obligations hereunder shall
continue until Lender has received payment in full of the Guaranteed
Indebtedness.

     (d)  Guarantor's obligations hereunder shall not be released, diminished,
impaired, reduced or affected by, nor shall any provision contained herein be
deemed to be a limitation upon, the amount of credit which Lender may extend to
Borrower, the number of transactions

                                       2
<PAGE>

between Lender and Borrower, payments by Borrower to Lender or Lender's
allocation of payments by Borrower.

     (e)  Without further authorization from or notice to Guarantor, Lender may
compromise, accelerate, or otherwise alter the time or manner for the payment of
the Guaranteed Indebtedness, increase or reduce the rate of interest thereon, or
release or add any one or more guarantors or endorsers, or allow substitution of
or withdrawal of collateral or other security and release collateral and other
security or subordinate the same.

     4.   Representations and Warranties. Guarantor hereby represents and
          ------------------------------
warrants the following to Lender:

     (a)  This Guaranty may reasonably be expected to benefit, directly or
indirectly, Guarantor, and (i) if Guarantor is a corporation, the Board of
Directors of Guarantor has determined that this Guaranty may reasonably be
expected to benefit, directly or indirectly, Guarantor, or (ii) if Guarantor is
a partnership, the requisite number of its partners have determined that this
Guaranty may reasonably be expected to benefit, directly or indirectly,
Guarantor; and

     (b)  Guarantor is familiar with, and has independently reviewed the books
and records regarding, the financial condition of Borrower and is familiar with
the value of any and all collateral intended to be security for the payment of
all or any part of the Guaranteed Indebtedness; provided, however, Guarantor is
not relying on such financial condition or collateral as an inducement to enter
into this Guaranty; and

     (c)  Guarantor has adequate means to obtain from Borrower on a continuing
basis information concerning the financial condition of Borrower and Guarantor
is not relying on Lender to provide such information to Guarantor either now or
in the future; and

     (d)  Guarantor has the power and authority to execute, deliver and perform
this Guaranty and any other agreements executed by Guarantor contemporaneously
herewith, and the execution, delivery and performance of this Guaranty and any
other agreements executed by Guarantor contemporaneously herewith do not and
will not violate (i) any agreement or instrument to which Guarantor is a party,
(ii) any law, rule, regulation or order of any governmental authority to which
Guarantor is subject, or (iii) its articles or certificate of incorporation or
bylaws, if Guarantor is a corporation, or its partnership agreement, if
Guarantor is a partnership; and

     (e)  Neither Lender nor any other party has made any representation,
warranty or statement to Guarantor in order to induce Guarantor to execute this
Guaranty; and

     (f)  The financial statements and other financial information regarding
Guarantor heretofore and hereafter delivered to Lender are and shall be true and
correct in all material respects and fairly present the financial position of
Guarantor as of the dates thereof, and no material adverse change has occurred
in the financial condition of Guarantor reflected in the financial statements
and other financial information regarding Guarantor heretofore delivered to
Lender since the date of the last statement thereof; and

                                       3
<PAGE>

     (g)  As of the date hereof, and after giving effect to this Guaranty and
the obligations evidenced hereby, (i) Guarantor is and will be solvent, (ii) the
fair saleable value of Guarantor's assets exceeds and will continue to exceed
its liabilities (both fixed and contingent), (iii) Guarantor is and will
continue to be able to pay its debts as they mature, and (iv) if Guarantor is
not an individual, Guarantor has and will continue to have sufficient capital to
carry on its business and all businesses in which it is about to engage.

     5.   Covenants.  Guarantor hereby covenants and agrees with Lender as
          ---------
follows:

     (a)  Guarantor shall not, so long as its obligations under this Guaranty
continue, transfer or pledge any material portion of its assets for less than
full and adequate consideration; and

     (b)  Guarantor shall promptly furnish to Lender at any time and from time
to time such financial statements and other financial information of Guarantor
as the Lender may require, in form and substance satisfactory to Lender; and

     (c)  Guarantor shall comply with all terms and provisions of the Loan
Documents that apply to Guarantor; and

     (d)  Guarantor shall promptly inform Lender of (i) any litigation or
governmental investigation against Guarantor or affecting any security for all
or any part of the Guaranteed Indebtedness or this Guaranty which, if determined
adversely, could reasonably be expected to have a material adverse effect upon
the financial condition of Guarantor or upon such security or might cause a
default under any of the Loan Documents, and (ii) any material adverse change in
the financial condition of Guarantor.

     6.   Schlotzsky's Inc. Term Note. Each of the following shall constitute an
          ---------------------------
Event of Default under the Loan Documents:

     (a)  The occurrence of a payment or financial covenant default under that
     certain Credit Agreement dated as of December 7, 1999 by and between
     Guarantor and Wells Fargo Bank Texas, National Association ("Wells Fargo"),
     as agent for itself and the other lenders party thereto (as it may be
     amended and modified from time to time, the "Schlotzsky's Inc. Term Note");
                                                  ---------------------------
     provided, with respect to a financial covenant default, such default shall
     --------
     only be an Event of Default under the Loan Documents if such financial
     covenant is the consolidated working capital, consolidated net worth,
     leverage or fixed charge coverage covenants or ratios and only upon the
     failure of Guarantor to cure or obtain a waiver of such default within
     sixty (60) days of the date of such default.

     (b)  Except as specifically provided in Section 6(a), the occurrence of any
     event (and the expiration of any applicable cure period) which permits the
     acceleration of the maturity of any indebtedness in an amount of
     $250,000.00 or more owing by Guarantor to any third party under any
     agreement or understanding including, without limitation, the Schlotzsky's
     Inc. Term Note.

                                       4
<PAGE>

     7.   Consent and Waiver.
          ------------------

     (a)  Guarantor waives (i) promptness, diligence and notice of acceptance of
this Guaranty and notice of the incurring of any obligation, indebtedness or
liability to which this Guaranty applies or may apply and waives presentment for
payment, notice of nonpayment, protest, demand, notice of protest, notice of
intent to accelerate, notice of acceleration, notice of dishonor, diligence in
enforcement and indulgences of every kind, and (ii) the taking of any other
action by Lender, including without limitation giving any notice of default or
any other notice to, or making any demand on, Borrower, any other guarantor of
all or any part of the Guaranteed Indebtedness or any other party.

     (b)  Guarantor waives any rights Guarantor has under, or any requirements
imposed by, Chapter 34 of the Texas Business and Commerce Code, as in effect on
the date of this Guaranty or as it may be amended from time to time.

     (c)  Lender may at any time, without the consent of or notice to Guarantor,
without incurring responsibility to Guarantor and without impairing, releasing,
reducing or affecting the obligations of Guarantor hereunder: (i) change the
manner, place or terms of payment of all or any part of the Guaranteed
Indebtedness, or renew, extend, modify, rearrange or alter all or any part of
the Guaranteed Indebtedness; (ii) change the interest rate accruing on any of
the Guaranteed Indebtedness (including, without limitation, any periodic change
in such interest rate that occurs because such Guaranteed Indebtedness accrues
interest at a variable rate which may fluctuate from time to time); (iii) sell,
exchange, release, surrender, subordinate, realize upon or otherwise deal with
in any manner and in any order any collateral for all or any part of the
Guaranteed Indebtedness or this Guaranty or setoff against all or any part of
the Guaranteed Indebtedness; (iv) neglect, delay, omit, fail or refuse to take
or prosecute any action for the collection of all or any part of the Guaranteed
Indebtedness or this Guaranty or to take or prosecute any action in connection
with any of the Loan Documents; (v) exercise or refrain from exercising any
rights against Borrower or others, or otherwise act or refrain from acting; (vi)
settle or compromise all or any part of the Guaranteed Indebtedness and
subordinate the payment of all or any part of the Guaranteed Indebtedness to the
payment of any obligations, indebtedness or liabilities which may be due or
become due to Lender or others; (vii) apply any deposit balance, fund, payment,
collections through process of law or otherwise or other collateral of Borrower
to the satisfaction and liquidation of the indebtedness or obligations of
Borrower to Lender not guaranteed under this Guaranty; and (viii) apply any sums
paid to Lender by Guarantor, Borrower or others to the Guaranteed Indebtedness
in such order and manner as Lender, in its sole discretion, may determine.

     (d)  Should Lender seek to enforce the obligations of Guarantor hereunder
by action in any court or otherwise, Guarantor waives any requirement,
substantive or procedural, that (i) Lender first enforce any rights or remedies
against Borrower or any other person or entity liable to Lender for all or any
part of the Guaranteed Indebtedness, including without limitation that a
judgment first be rendered against Borrower or any other person or entity, or
that Borrower or any other person or entity should be joined in such cause, or
(ii) Lender first enforce rights against any collateral which shall ever have
been given to secure all or any part of the Guaranteed Indebtedness or this
Guaranty. Such waiver shall be without prejudice to Lender's

                                       5
<PAGE>

right, at its option, to proceed against Borrower or any other person or entity,
whether by separate action or by joinder.

     (e)  In addition to any other waivers, agreements and covenants of
Guarantor set forth herein, Guarantor hereby further waives and releases all
claims, causes of action, defenses and offsets for any act or omission of
Lender, its directors, officers, employees, representatives or agents in
connection with Lender's administration of the Guaranteed Indebtedness, except
for Lender's willful misconduct and gross negligence.

     8.   Obligations Not Impaired.
          ------------------------

     (a)  Guarantor agrees that its obligations hereunder shall not be released,
diminished, impaired, reduced or affected by the occurrence of any one or more
of the following events: (i) the death, disability or lack of corporate power of
Borrower, Guarantor (except as provided in Paragraph 10 herein) or any other
                                           ------------
guarantor of all or any part of the Guaranteed Indebtedness, (ii) any
receivership, insolvency, bankruptcy or other proceedings affecting Borrower,
Guarantor or any other guarantor of all or any part of the Guaranteed
Indebtedness, or any of their respective property; (iii) the partial or total
release or discharge of Borrower or any other guarantor of all or any part of
the Guaranteed Indebtedness, or any other person or entity from the performance
of any obligation contained in any instrument or agreement evidencing, governing
or securing all or any part of the Guaranteed Indebtedness, whether occurring by
reason of law or otherwise; (iv) the taking or accepting of any collateral for
all or any part of the Guaranteed Indebtedness or this Guaranty; (v) the taking
or accepting of any other guaranty for all or any part of the Guaranteed
Indebtedness; (vi) any failure by Lender to acquire, perfect or continue any
lien or security interest on collateral securing all or any part of the
Guaranteed Indebtedness or this Guaranty; (vii) the impairment of any collateral
securing all or any part of the Guaranteed Indebtedness or this Guaranty; (viii)
any failure by Lender to sell any collateral securing all or any part of the
Guaranteed Indebtedness or this Guaranty in a commercially reasonable manner or
as otherwise required by law; (ix) any invalidity or unenforceability of or
defect or deficiency in any of the Loan Documents; or (x) any other circumstance
which might otherwise constitute a defense available to, or discharge of,
Borrower or any other guarantor of all or any part of the Guaranteed
Indebtedness.

     (b)  This Guaranty shall continue to be effective or be reinstated, as the
case may be, if at any time any payment of all or any part of the Guaranteed
Indebtedness is rescinded or must otherwise be returned by Lender upon the
insolvency, bankruptcy or reorganization of Borrower, Guarantor, any other
guarantor of all or any part of the Guaranteed Indebtedness, or otherwise, all
as though such payment had not been made.

     (c)  In the event Borrower is a corporation, joint stock association or
partnership, or is hereafter incorporated, none of the following shall affect
Guarantor's liability hereunder: (i) the unenforceability of all or any part of
the Guaranteed Indebtedness against Borrower by reason of the fact that the
Guaranteed Indebtedness exceeds the amount permitted by law; (ii) the act of
creating all or any part of the Guaranteed Indebtedness is ultra vires; or (iii)
the officers or partners creating all or any part of the Guaranteed Indebtedness
acted in excess of their authority. Guarantor hereby acknowledges that
withdrawal from, or termination of, any

                                       6
<PAGE>

ownership interest in Borrower now or hereafter owned or held by Guarantor shall
not alter, affect or in any way limit the obligations of Guarantor hereunder.

     9.   Actions Against Guarantor. In the event of a default in the payment or
          -------------------------
performance of all or any part of the Guaranteed Indebtedness when such
Guaranteed Indebtedness becomes due, whether by its terms, by acceleration or
otherwise, Guarantor shall, without notice or demand, promptly pay the amount
due thereon to Lender, in lawful money of the United States, at Lender's address
set forth in Subparagraph 1(a) above. One or more successive or concurrent
             -----------------
actions may be brought against Guarantor, either in the same action in which
Borrower is sued or in separate actions, as often as Lender deems advisable. The
exercise by Lender of any right or remedy under this Guaranty or under any other
agreement or instrument, at law, in equity or otherwise, shall not preclude
concurrent or subsequent exercise of any other right or remedy. The books and
records of Lender shall be admissible as evidence in any action or proceeding
involving this Guaranty and shall be prima facie evidence of the payments made
                                     ----- -----
on, and the outstanding balance of, the Guaranteed Indebtedness.

     10.  Payment by Guarantor. Whenever Guarantor pays any sum which is or may
          --------------------
become due under this Guaranty, written notice must be delivered to Lender
contemporaneously with such payment. Such notice shall be effective for purposes
of this paragraph when contemporaneously with such payment Lender receives such
notice either by: (a) personal delivery to the address and designated department
of Lender identified in Subparagraph 1(a) above, or (b) United States mail,
                        -----------------
certified or registered, return receipt requested, postage prepaid, addressed to
Lender at the address shown in Subparagraph 1(a) above. In the absence of such
                               -----------------
notice to Lender by Guarantor in compliance with the provisions hereof, any sum
received by Lender on account of the Guaranteed Indebtedness shall be
conclusively deemed paid by Borrower.

     11.  Death of Guarantor. In the event of the death of Guarantor, the
          ------------------
obligations of the deceased Guarantor under this Guaranty shall continue as an
obligation against his estate as to (a) all of the Guaranteed Indebtedness that
is outstanding on the date of Guarantor's death, and any renewals or extensions
thereof, and (b) all loans, advances and other extensions of credit made to or
for the account of Borrower on or after the date of Guarantor's death pursuant
to an obligation of Lender under a commitment or agreement described in
Subparagraph 1(d) above and made to or with Borrower prior to the date of
-----------------
Guarantor's death. The terms and conditions of this Guaranty, including without
limitation the consents and waivers set forth in Paragraph 7 hereof, shall
                                                 -----------
remain in effect with respect to the Guaranteed Indebtedness described in the
preceding sentence in the same manner as if Guarantor had not died.

     12.  Notice of Sale. In the event that Guarantor is entitled to receive any
          --------------
notice under the Uniform Commercial Code, as it exists in the state governing
any such notice, of the sale or other disposition of any collateral securing all
or any part of the Guaranteed Indebtedness or this Guaranty, reasonable notice
shall be deemed given when such notice is deposited in the United States mail,
postage prepaid, at the address for Guarantor set forth in Subparagraph 1(c)
                                                           -----------------
above, ten (10) days prior to the date any public sale, or after which any
private sale, of any such collateral is to be held; provided, however, that
                                                    --------  -------
notice given in any other reasonable manner or at any other reasonable time
shall be sufficient.

                                       7
<PAGE>

     13.  Waiver by Lender. No delay on the part of Lender in exercising any
          ----------------
right hereunder or failure to exercise the same shall operate as a waiver of
such right. In no event shall any waiver of the provisions of this Guaranty be
effective unless the same be in writing and signed by an officer of Lender, and
then only in the specific instance and for the purpose given.

     14.  Successors and Assigns. This Guaranty is for the benefit of Lender,
          ----------------------
its successors and assigns. This Guaranty is binding upon Guarantor and
Guarantor's heirs, executors, administrators, personal representatives and
successors, including without limitation any person or entity obligated by
operation of law upon the reorganization, merger, consolidation or other change
in the organizational structure of Guarantor.

     15.  Costs and Expenses. Guarantor shall pay on demand by Lender all costs
          ------------------
and expenses, including without limitation all reasonable attorneys' fees,
incurred by Lender in connection with the preparation, administration,
enforcement and/or collection of this Guaranty. This covenant shall survive the
payment of the Guaranteed Indebtedness.

     16.  Severability. If any provision of this Guaranty is held by a court of
          ------------
competent jurisdiction to be illegal, invalid or unenforceable under present or
future laws, such provision shall be fully severable, shall not impair or
invalidate the remainder of this Guaranty and the effect thereof shall be
confined to the provision held to be illegal, invalid or unenforceable.

     17.  No Obligation. Nothing contained herein shall be construed as an
          -------------
obligation on the part of Lender to extend or continue to extend credit to
Borrower.

     18.  Amendment. No modification or amendment of any provision of this
          ---------
Guaranty, nor consent to any departure by Guarantor therefrom, shall be
effective unless the same shall be in writing and signed by an officer of
Lender, and then shall be effective only in the specific instance and for the
purpose for which given.

     19.  Cumulative Rights. All rights and remedies of Lender hereunder are
          -----------------
cumulative of each other and of every other right or remedy which Lender may
otherwise have at law or in equity or under any instrument or agreement, and the
exercise of one or more of such rights or remedies shall not prejudice or impair
the concurrent or subsequent exercise of any other rights or remedies. This
Guaranty, whether general, specific and/or limited, shall be in addition to and
cumulative of, and not in substitution, novation or discharge of, any and all
prior or contemporaneous guaranty agreements by Guarantor in favor of Lender or
assigned to Lender by others.

     20.  Governing Law, Venue. This Guaranty is intended to be performed in the
          --------------------
State of Texas. Except to the extent that the laws of the United States may
apply to the terms hereof, the substantive laws of the State of Texas shall
govern the validity, construction, enforcement and interpretation of this
Guaranty. In the event of a dispute involving this Guaranty or any other
instruments executed in connection herewith, the undersigned irrevocably agrees
that venue for such dispute shall lie in any court of competent jurisdiction in
Bexar County, Texas.

                                       8
<PAGE>

     21.  Compliance with Applicable Usury Laws.  Notwithstanding any other
          -------------------------------------
provision of this Guaranty or of any instrument or agreement evidencing,
governing or securing all or any part of the Guaranteed Indebtedness, Guarantor
and Lender by its acceptance hereof agree that Guarantor shall never be required
or obligated to pay interest in excess of the maximum non-usurious interest rate
as may be authorized by applicable law for the written contracts which
constitute the Guaranteed Indebtedness.  It is the intention of Guarantor and
Lender to conform strictly to the applicable laws which limit interest rates,
and any of the aforesaid contracts for interest, if and to the extent payable by
Guarantor, shall be held to be subject to reduction to the maximum non-usurious
interest rate allowed under said law.

     22.  Gender.  Within this Guaranty, words of any gender shall be held and
          ------
construed to include the other gender.

     23.  Captions.  The headings in this Guaranty are for convenience only and
          --------
shall not define or limit the provisions hereof.

     24.  Right of Revocation. Guarantor understands and agrees that Guarantor
          -------------------
may revoke its future obligations under this Guaranty at any time by giving
Lender written notice that Guarantor will not be liable hereunder for any
indebtedness or obligations of Borrower incurred on or after the effective date
of such revocation. Such revocation shall be deemed to be effective on the day
following the day Lender receives such notice delivered either by: (a) personal
delivery to the address and designated department of Lender identified in
Subparagraph 1(a) above, or (b) United States mail, registered or certified,
-----------------
return receipt requested, postage prepaid, addressed to Lender at the address
shown in Subparagraph 1(a) above. Notwithstanding such revocation, Guarantor
         -----------------
shall remain liable on its obligations hereunder until payment in full to Lender
of (a) all of the Guaranteed Indebtedness that is outstanding on the effective
date of such revocation, and any renewals and extensions thereof, and (b) all
loans, advances and other extensions of credit made to or for the account of
Borrower on or after the effective date of such revocation pursuant to the
obligation of Lender under a commitment or agreement made to or with Borrower
prior to the effective date of such revocation. The terms and conditions of this
Guaranty, including without limitation the consents and waivers set forth in
Paragraph 7 hereof, shall remain in effect with respect to the Guaranteed
-----------
Indebtedness described in the preceding sentence in the same manner as if such
revocation had not been made by Guarantor.

     EXECUTED as of the date first above written.

                              GUARANTOR:
                              ----------

                              SCHLOTZSKY'S, INC.,
                              a Texas corporation

                              By:
                                   -----------------------------------
                              Name:
                                   -----------------------------------
                              Title:
                                   -----------------------------------

                                       9

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