Document:

AMENDED AND RESTATED EMPLOYMENT AGREEMENT
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     This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "EMPLOYMENT
AGREEMENT") is made this 28th day of June, 2004 by and between Ames True Temper,
Inc., a Delaware corporation (the "COMPANY"), and Joseph G. Wersosky
("EXECUTIVE").

     WHEREAS, the Company and its subsidiaries are engaged in the business of
(i) manufacturing, marketing and distributing long-handled tools, wheelbarrows,
hose reels, striking tools, pruning implements, pots and planters, snow tools,
lawn carts, repair handles, garden hoses, and decorative accessories for the
lawn and garden, and (ii) conducting such other activities as are undertaken
from time to time by the Company and each of its Affiliates, as defined in
SECTION 9(F), as a result of future acquisitions, or otherwise;

     WHEREAS, Executive entered into that certain Employment Agreement as of
February 28, 2002 (the "OLD EMPLOYMENT AGREEMENT") with the Company;

     WHEREAS, the Company desires to continue to employ Executive, and Executive
desires to continue to be employed by the Company, as the VP Sales, National
Accounts & Dynamic Design of the Company, in accordance with the terms and
conditions set forth herein; and

     WHEREAS, the Company and Executive each desire that the Old Employment
Agreement be amended and restated in its entirety as set forth in this
Employment Agreement and that this Employment Agreement supercede the Old
Employment Agreement, and all other agreements with respect to the subject
matter hereof.

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and promises in this Employment Agreement, the parties agree as follows:

     1. EMPLOYMENT. The Company hereby agrees to continue to employ Executive as
VP Sales, National Accounts & Dynamic Design of the Company, and Executive
hereby agrees to accept such employment and agrees to act as VP Sales, National
Accounts & Dynamic Design of the Company, all in accordance with the terms and
conditions of this Employment Agreement. Executive hereby represents and
warrants that neither Executive's entry into this Employment Agreement nor
Executive's performance of Executive's obligations hereunder will conflict with
or result in a breach of the terms, conditions or provisions of any other
agreement or obligation of any nature to which Executive is a party or by which
Executive is bound, including, without limitation, any development agreement,
non-competition agreement or confidentiality agreement entered into by
Executive.

     2. TERM OF EMPLOYMENT AND AUTOMATIC RENEWAL. The term of Executive's
employment under this Employment Agreement will commence on the date of this
Employment Agreement and will continue until the third (3rd) anniversary of the
date of this Employment Agreement (the "INITIAL EMPLOYMENT PERIOD"). THE INITIAL
EMPLOYMENT PERIOD AND ANY RENEWAL EMPLOYMENT PERIOD (AS DEFINED HEREIN) SHALL
AUTOMATICALLY BE RENEWED AND EXTENDED ON THE SAME TERMS AND CONDITIONS CONTAINED
HEREIN FOR CONSECUTIVE ONE-YEAR PERIODS

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(EACH, A "RENEWAL EMPLOYMENT PERIOD"), UNLESS NOT LATER THAN SIXTY (60) DAYS
PRIOR TO THE END OF THE INITIAL EMPLOYMENT PERIOD OR ANY RENEWAL EMPLOYMENT
PERIOD, AS THE CASE MAY BE, EITHER PARTY SHALL GIVE WRITTEN NOTICE TO THE OTHER
PARTY OF ITS ELECTION TO TERMINATE THIS EMPLOYMENT AGREEMENT. The Initial
Employment Period and the Renewal Employment Periods are hereinafter referred to
as the "EMPLOYMENT PERIOD." For purposes of this Employment Agreement, any
notice of termination electing not to renew this Employment Agreement pursuant
to this SECTION 2 shall be deemed: (i) a termination without Due Cause pursuant
to SECTION 9(D) if such notice is delivered by the Company; or (ii) a voluntary
resignation without Good Reason pursuant to SECTION 9(E) if such notice is
delivered by Executive. Notwithstanding anything to the contrary contained
herein, the Employment Period is subject to termination pursuant to SECTION 9
below.

     3. POSITION AND RESPONSIBILITIES. Executive shall report to and be subject
to the direction of the CEO of the Company. Executive shall perform and
discharge such duties and responsibilities for the Company as the CEO may from
time to time reasonably assign Executive. Executive understands and acknowledges
that such duties shall be subject to revision and modification by the Chief
Executive Officer and/or the Board of Advisors (the "Board") of CHATT Holdings
LLC ("CHATT"), as appropriate, upon reasonable notice to Executive. During the
Employment Period, Executive shall devote Executive's full business time,
attention, skill and efforts to the faithful performance of Executive's duties
herein, and shall perform the duties and carry out the responsibilities assigned
to Executive, to the best of Executive's ability, in a diligent, trustworthy and
businesslike manner for the purpose of advancing the Company. Executive
acknowledges that Executive's duties and responsibilities will require
Executive's full-time business efforts and agrees that during the Employment
Period, Executive will not engage in any outside business activities that
conflict with the Executive's obligations under this Employment Agreement.

     4. COMPENSATION.

         (a) Base Salary. During the Employment Period, the Company shall pay to
Executive a minimum base salary at the rate of $158,100 per year (the "BASE
SALARY"), less applicable tax withholding, subject to increase from time to
time, solely at the Company's discretion, payable at the Company's regular
employee payroll intervals. Executive's performance shall be reviewed annually
and the Base Salary may be increased at the Company's sole discretion.

         (b) Discretionary Bonus. During the Employment Period, Executive shall
be eligible to receive a cash bonus based upon the achievement of certain
budgeted performance goals pursuant to a program approved by the Board;
provided, that, notwithstanding the foregoing, for fiscal year 2004, Executive
shall be eligible to receive a cash bonus based upon budgeted performance goals
which are substantially similar to the goals approved by the Company prior to
such fiscal year. Executive shall also be eligible to receive additional
bonuses, in such amounts, if any, as determined by the Board in its sole
discretion based upon the achievement of performance goals and objectives
approved by the Board.

         (c) Stock. Pursuant to that Subscription Agreement (the "SUBSCRIPTION
AGREEMENT") entered into between CHATT and Executive, Executive purchased
certain Class B units of CHATT, which Class B units shall be subject to certain
vesting, repurchase and other

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obligations and restrictions set forth in the Subscription Agreement.

     5. BENEFIT PLANS. During the Employment Period, Executive will be entitled
to receive traditional employment benefits comparable to (i) those benefits
provided to other senior executive officers of the Company (subject to any
applicable waiting periods, eligibility requirements, or other restrictions),
which may include insurance (medical, dental, life, disability, directors and
officers, etc.), retirement plans, and profit sharing plans; and (ii) the
benefits provided to the Executive immediately prior to the Effective Date.
Notwithstanding the foregoing, the Company may, at any time or from time to
time, amend, modify, suspend or terminate any benefit plan or program
contemplated hereunder in this Section 5 for any reason and without the
Executive's prior written; provided that such amendment, modification,
suspension or termination does not disproportionately impact the Executive as
compared to the other participants under such plan or program.

     6. EXPENSES. The Company, in accordance with policies and practices
established by the Board from time to time, will pay or reimburse Executive for
all expenses (including travel and cell phone expenses) reasonably incurred by
Executive during the Employment Period in connection with the performance of
Executive's duties under this Employment Agreement, provided that Executive
shall provide to the Company documentation or evidence of expenses for which
Executive seeks reimbursement in accordance with the policies and procedures
established by the Board from time to time.

     7. VACATION. Executive shall be entitled to vacation at the rate of 4 weeks
per year in accordance with the Company's vacation policy. Executive shall make
good faith efforts to schedule vacations so as to least conflict with the
conduct of the Company's business and will give the Company adequate advance
notice of Executive's planned absences. Up to half of Executive's unused
vacation time may be carried over to subsequent years; provided, however, that
in no event shall Executive be entitled to greater than 6 weeks vacation per
year.

     8. CONFIDENTIALITY, INVENTIONS, NON-COMPETITION AND NON-SOLICITATION
AGREEMENT. As of the date hereof, Executive shall have entered into a
confidentiality, inventions, non-competition and non-solicitation agreement, in
the form of EXHIBIT A attached hereto and made a part hereof (the
"CONFIDENTIALITY, INVENTIONS, NON-COMPETITION AND NON-SOLICITATION AGREEMENT").

     9. TERMINATION.

         (a) Death. The Employment Period will terminate immediately upon the
death of Executive. If the Employment Period is terminated pursuant to this
SECTION 9(A), the Company shall have no further obligation to Executive (or the
Executive's estate) except for salary and benefits accrued through the date of
termination, and except as otherwise described in the Subscription Agreement.

         (b) Due Cause. The Company may terminate the Employment Period
immediately upon written notice to Executive for a material breach of this
Employment Agreement by Executive. The following events constitute the exclusive
list of events that will be deemed a material breach of this Employment
Agreement (each of which shall constitute "DUE CAUSE"):

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         (i)      Executive's material breach of any of Executive's obligations
                  under the Confidentiality, Inventions, Non-Competition and
                  Non-Solicitation Agreement; this Employment Agreement; the
                  Subscription Agreement; the Amended and Restated Unitholders
                  Agreement of CHATT, dated as of June 28, 2004, as in effect
                  from time to time (the "Unitholders Agreement"); or the
                  Limited Liability Company Agreement of CHATT, dated as of June
                  28, 2004, by and among the parties thereto, as in effect from
                  time to time (the "LLC Agreement"); or

         (ii)     Executive's continued and deliberate neglect of, willful
                  misconduct in connection with the performance of, or refusal
                  to perform Executive's duties in accordance with SECTION 3 of
                  this Employment Agreement, which, in the case of neglect or
                  failure to perform, has not been cured within thirty (30) days
                  after Executive has been provided notice of the same; or

         (iii)    Executive's engagement in any conduct which injures the
                  integrity, character, financial position or financial
                  performance of the business or reputation of the Company or
                  which impugns Executive's own integrity, character or
                  reputation so as to cause Executive to be unfit to act in the
                  capacity of VP Sales, National Accounts & Dynamic Design of
                  the Company; or

         (iv)     the Board's good faith determination that Executive has
                  committed an act or acts constituting a felony, or other act
                  involving dishonesty, disloyalty or fraud against the Company.

     If the Employment Period is terminated pursuant to this SECTION 9(B), the
Company shall have no further obligation to Executive except for salary and
benefits accrued through the date of termination, and except as otherwise
described in the Subscription Agreement.

         (c) Permanent Disability. The Company may terminate the Employment
Period upon the Permanent Disability (as defined below) of the Executive. If the
Employment Period is terminated pursuant to this SECTION 9(C), then Executive
will be entitled to receive the Executive's salary and benefits accrued through
the date of termination and such benefits, if any, as may be provided Executive
pursuant to the Company's disability insurance policy. Except as set forth in
the immediately preceding sentence and as otherwise described in the
Subscription Agreement, if the Employment Period is terminated pursuant to this
SECTION 9(C), the Company shall have no further obligation to Executive. For
purposes of this Employment Agreement, the term "PERMANENT DISABILITY" shall
mean that, pursuant to applicable law, Executive is unable to perform, with or
without reasonable accommodation, by reason of physical or mental incapacity,
the essential functions of the Executive's position for ninety (90) or more days
in any one hundred twenty (120) day period. The Board shall determine, according
to the facts then available, whether and when a Permanent Disability has
occurred. Such determination shall not be arbitrary or unreasonable.

         (d) Termination by the Company without Due Cause. The Company may
terminate the Employment Period without Due Cause upon thirty (30) days' prior
written notice. If the Employment Period is terminated pursuant to this SECTION
9(D), then Executive will be

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entitled to receive as severance pay the Executive's Base Salary plus benefits
(at the same cost to the Executive as in effect immediately prior to such
termination of employment) for a period of six (6) months, payable at the
Company's regular payroll intervals. Notwithstanding the above, Executive shall
receive such amounts only if Executive is not in material breach of any of the
provisions of the Confidentiality, Inventions, Non-Competition and
Non-Solicitation Agreement. Except as set forth in the first sentence of this
SECTION 9(D) and as otherwise described in the Subscription Agreement, if the
Employment Period is terminated pursuant to this SECTION 9(D), the Company shall
have no further obligation to Executive.

         (e) Voluntary Resignation by Executive. Executive may terminate the
Employment Period at any time for any reason upon thirty (30) days' prior
written notice. If the Employment Period is terminated pursuant to this SECTION
9(E), the Company shall have no further obligation to Executive except for
salary and benefits accrued through the date of termination, and except as
otherwise described in SECTION 4(C) of this Employment Agreement; provided,
however, that if Executive is terminating the Employment Period for Good Reason
(as defined below), then Executive will be entitled to receive as severance pay
the Executive's Base Salary plus benefits (at the same cost to the Executive as
in effect immediately prior to such termination of employment) for a period of
six (6) months, payable at the Company's regular payroll intervals.
Notwithstanding the above, Executive shall receive such amounts only if
Executive is not in material breach of any of the provisions of the
Confidentiality, Inventions, Non-Competition and Non-Solicitation Agreement. The
following events will be deemed "GOOD REASON" for which Executive may terminate
the Employment Period and receive the severance payments set forth in this
SECTION 9(E):

         (i)      a material diminution of the Executive's responsibilities
                  after notice to the Company and a thirty (30) day opportunity
                  to cure; or

         (ii)     any material breach of this Employment Agreement on the part
                  of the Company (including, but not limited to, any decrease in
                  the Base Salary without the consent of the Executive or
                  relocation of Executive's place of employment to a location
                  that is greater than fifty (50) miles from the Harrisburg,
                  Pennsylvania metropolitan area), after notice to the Board,
                  and a thirty (30) day opportunity to cure; provided, however,
                  that Executive is not in material breach of any of the terms
                  of this Employment Agreement.

         (f) General Release. The receipt of any severance payment as set forth
in SECTIONS 9(C)-(E) above shall be contingent upon Executive's execution of a
general release of all claims against the Company and its Affiliates (as defined
below), substantially in the form attached hereto as EXHIBIT B. For purposes of
this Employment Agreement, the term "AFFILIATES" means all persons or entities
that directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, the Company, all companies or
entities in which the Company owns an equity interest, and all predecessors,
successors and assigns of such affiliates.

         (g) Mitigation. Notwithstanding anything herein to the contrary, to the
extent Executive obtains employment at any time during the entire six (6) months
of the severance period, the Company's severance obligations under this
Employment Agreement, including, without limitation, the continuation of
Executive's benefits hereunder, shall be reduced by the amount of any
compensation or benefits received (or accrued) by the Executive, including

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without limitation any equity or other incentive compensation and any bonus,
under such new employment arrangement. Executive agrees that if Executive
accepts other employment at any time during the entire six (6) months of the
severance period, Executive shall notify the Company in writing within two (2)
business days of such acceptance. Executive acknowledges that the Executive's
failure to abide by this provision shall entitle the Company to recoup all
severance pay previously paid to Executive pursuant to this Employment
Agreement.

         (h) Survival. Termination of the Employment Period in accordance with
this SECTION 11, or expiration of the Employment Period, will not affect the
provisions of this Employment Agreement that survive such termination, including
without limitation, the provisions in the Confidentiality, Inventions,
Non-Competition and Non-Solicitation Agreement and will not limit either party's
ability to pursue remedies at law or equity.

     10. ATTORNEY'S FEES. If either party prevails in a legal action to enforce
or protect its rights under this Employment Agreement, then that party shall be
entitled to recover reasonable attorneys' fees, costs, and expenses, in addition
to all other relief, including but not limited to damages and injunctive relief.
The Company shall reimburse the Executive for the Executive's reasonable
attorneys fees and costs incurred with respect to the negotiation and execution
of the amendment and restatement of this Agreement.

     11. EXECUTIVE ASSISTANCE. Both during and for two years after Executive's
employment with the Company, Executive shall, upon reasonable notice, furnish
the Company with such information as may be in Executive's possession or
control, and cooperate with the Company, as the Company may reasonably request
(with due consideration to Executive's business activities and obligations after
the Employment Period), in connection with any litigation, claim, or other
dispute in which the Company or any of its Affiliates is or may become a party.
The Company shall reimburse Executive for all reasonable out-of-pocket expenses
incurred by Executive in fulfilling Executive's obligations under this SECTION
11. In addition, to the extent that the Executive provides such assistance at
any time after six months from the date that Executive's employment with the
Company has terminated, and Executive is required to be absent from employment
for one or more days in order to provide such assistance, the Company shall pay
the Executive for each such day an amount equal to the daily rate of the
Executive's Base Salary as in effect as of the date of termination.

     12. EFFECT OF PRIOR AGREEMENTS. This Employment Agreement, the Subscription
Agreement, the Confidentiality, Inventions, Non-Competition and Non-Solicitation
Agreement, the Unitholders Agreement and the LLC Agreement contain the entire
understanding among the Company, CHATT and Executive relating to the subject
matter hereof and supersede any prior employment agreement between Executive,
ATT Holding Co., and the Company, including, without limitation, the Old
Employment Agreement, or other agreement relating to the subject matter hereof
between ATT Holding Co., the Company and Executive.

     13. MODIFICATION AND WAIVER. This Employment Agreement may not be modified
or amended, nor may any provisions of this Employment Agreement be waived,
except by an instrument in writing signed by the parties. No written waiver will
be deemed to be a continuing waiver unless specifically stated therein, and each
such waiver will operate only as to the specific term or condition waived and
shall not constitute a waiver of such term or condition for the future or as to
any act other than that specifically waived.

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     14. SEVERABILITY. If, for any reason, any provision of this Employment
Agreement is held invalid, such invalidity will not affect any other provision
of this Employment Agreement, and each provision will to the full extent
consistent with law continue in full force and effect. If any provision of this
Employment Agreement is held invalid in part, such invalidity will in no way
affect the rest of such provision, and the rest of such provision, together with
all other provisions of this Employment Agreement, will, to the full extent
consistent with law, continue in full force and effect.

     15. NOTICES. Any notice, consent, waiver and other communications required
or permitted pursuant to the provisions of this Employment Agreement must be in
writing and will be deemed to have been properly given (a) when delivered by
hand; (b) when sent by telecopier (with acknowledgment of complete
transmission), provided that a copy is mailed by U.S. certified mail, return
receipt requested; (c) three (3) days after sent by certified mail, return
receipt requested; or (d) one (1) day after deposit with a nationally recognized
overnight delivery service, in each case to the appropriate addresses and
telecopier numbers set forth below:

         If to the Company:

               Ames True Temper, Inc.
               c/o Castle Harlan, Inc.
               150 East 58th Street
               New York, New York 10155
               Attn: Justin Wender
               Fax:  (212) 207-8042

         With a copy to:

               Schulte Roth & Zabel LLP
               919 Third Avenue
               New York, New York 10022
               Attn.: Marc Weingarten, Esq.
               Fax:   (212) 593-5955

        If to Executive:

               Joseph G. Wersosky

     Each party will be entitled to specify a different address for the receipt
of subsequent notices by giving written notice thereof to the other party in
accordance with this SECTION 15.

     16. THIRD PARTY BENEFICIARIES. Nothing herein expressed or implied is
intended or shall be construed to confer upon or give to any person or entity,
other than the parties to this Employment Agreement and their respective
permitted successors and assigns, any rights or remedies under or by reason of
this Employment Agreement.

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     17. HEADINGS. The headings and other captions in this Employment Agreement
are included solely for convenience of reference and will not control the
meaning and interpretation of any provision of this Employment Agreement.

     18. GOVERNING LAW; ARBITRATION. This Employment Agreement has been executed
in the State of Pennsylvania, and its validity, interpretation, performance, and
enforcement will be governed by the laws of such state, except with respect to
conflicts of laws principles. Except for disputes arising out of an alleged
violation of the covenants set forth in the Confidentiality, Inventions,
Non-Competition and Non-Solicitation Agreement, any controversy or claim arising
out of or relating to any provision of this Employment Agreement or any other
document or agreement referred to herein shall be resolved by arbitration. The
arbitration process shall be instigated by either party giving written notice to
the other of the desire for arbitration and the factual allegations underlying
the basis for the dispute. The arbitration shall be conducted by such
alternative dispute resolution service as is agreed to by the parties, or,
failing such agreement within thirty (30) days after such dispute arises, by
arbitrators selected as described below in accordance with the rules and
procedures established by the American Arbitration Association. Only a person
who is a practicing lawyer admitted to a state bar may serve as an arbitrator.
Each party shall select one arbitrator, and those arbitrators shall choose a
third arbitrator; these arbitrators shall constitute the panel. The American
Arbitration Association rules for employment arbitration shall control any
discovery conducted in connection with the arbitration. The expenses of
arbitration (other than attorneys' fees) shall be shared as determined by
arbitration. Each side to the claim or controversy shall pay their own
attorneys' fees. Any result reached by the panel shall be binding on all parties
to the arbitration, and no appeal may be taken. It is agreed that any party to
any award rendered in such arbitration proceeding may seek a judgment upon the
award and that judgment may be entered thereon by any court having jurisdiction.
The arbitration shall be conducted in the State of Pennsylvania.

     19. NON-ASSIGNABILITV/BINDING EFFECT. This Employment Agreement shall not
be assignable by either party without the prior written consent of the other
party. This Employment Agreement will be binding upon and inure to the benefit
of Executive, the Company, and their respective successors and permitted
assigns.

     20. NO STRICT CONSTRUCTION. The language used in this Employment Agreement
will be deemed to be the language chosen by the parties to express their mutual
intent, and no rule of strict construction will be applied against any person.

        [Remainder of Page Intentionally Blank; Signature Page to Follow]

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     IN WITNESS WHEREOF, the Company has caused this Employment Agreement to be
executed by its duly authorized officer and Executive has signed this Employment
Agreement, as of the date first above written.

                                   AMES TRUE TEMPER, INC.

                                   By:  /s/ Duane R. Greenly
                                        ----------------------------------------
                                   Its: Chief Operating Officer
                                        ----------------------------------------

                                   EXECUTIVE

                                   /s/ Joseph Wersosky
                                   ---------------------------------------------

                                       9

                                    EXHIBIT A

                          CONFIDENTIALITY, INVENTIONS,
                          ----------------------------
                 NON-COMPETITION AND NON-SOLICITATION AGREEMENT
                 ----------------------------------------------

     This Confidentiality, Inventions, Non-Competition and Non-Solicitation
Agreement (the "Agreement") is entered into this ___ day of _________ 2004 by
and between CHATT Holdings LLC, its successors or assigns (the "Company") and
__________ (the "Executive"). This Agreement sets forth the entire agreement
between the parties hereto concerning the subject matter hereof and supersedes
all prior agreements and understandings concerning the subject matter hereof. In
consideration of employment by the Company and/or its Affiliates (as defined in
Section 2(b) below) of Executive, which Executive acknowledges to be good and
valuable consideration for the Executive's obligations hereunder, the Company
and Executive agree as follows:

1.   The Business.

         Executive acknowledges that the Company and its Affiliates are engaged
         in the business of (i) manufacturing, marketing and distributing
         long-handled tools, wheelbarrows, hose reels, striking tools, pruning
         implements, pots and planters, snow tools, lawn carts, repair handles,
         garden hoses, and decorative accessories for the lawn and garden, and
         (ii) conducting such other activities as are undertaken (or are
         proposed or contemplated to be undertaken) from time to time by the
         Company and each of its Affiliates as a result of future acquisitions
         or otherwise (collectively, the "Business").

2.   Confidential Information.

     (a) Executive acknowledges that the Confidential Information (as defined
         below) constitutes a protectible business interest of the Company and
         its Affiliates, and covenants and agrees that at all times during the
         period of Executive's employment, and at all times after termination of
         such employment, Executive will not, directly or indirectly, disclose,
         furnish, make available or utilize any Confidential Information other
         than in the course of performing duties as an employee of the Company
         and/or its Affiliates. Executive will abide by Company policies and
         rules as may be established from time to time by it for the protection
         of its Confidential Information. Executive agrees that in the course of
         employment with the Company, Executive will not bring to the Company's
         offices or use, disclose to the Company, or induce the Company to use,
         any confidential information or documents belonging to others.
         Executive's obligations under this Section 2(a) with respect to
         Confidential Information will survive termination of Executive's
         employment with the Company, and will terminate only at such time (if
         any) as the Confidential Information in question becomes generally
         known to the public other than through a breach of Executive's
         obligations under this Agreement.

                                      A-1

     (b) As used in this Agreement, the term "Confidential Information" means
         any and all confidential, proprietary or trade secret information,
         whether disclosed, directly or indirectly, verbally, in writing or by
         any other means in tangible or intangible form, including that which is
         conceived or developed by Executive, applicable to or in any way
         related to: (i) the present or future business of the Company or any of
         its Affiliates (as defined below); (ii) the research and development of
         the Company or any of its Affiliates; or (iii) the business of any
         client, vendor, supplier or distributor of the Company or any of its
         Affiliates. Such Confidential Information includes the following
         property or information of the Company and its Affiliates, by way of
         example and without limitation, trade secrets, processes, formulas,
         data, program documentation, customer lists, designs, drawings,
         algorithms, source code, object code, know-how, improvements,
         inventions, licenses, techniques, all plans or strategies for
         marketing, development and pricing, business plans, financial
         statements, profit margins and all information concerning existing or
         potential clients, suppliers or vendors. Confidential Information also
         means all similar information disclosed to the Company or any Affiliate
         by third parties which is subject to confidentiality obligations. The
         term "Affiliates" means (i) all persons or entities controlling,
         controlled by or under common control with the Company, (ii) all
         companies or entities in which the Company owns an equity interest and
         (iii) all predecessors, successors and assigns of the those Affiliates
         identified in (i) and (ii).

3.   Return of Materials.

         Upon termination of employment with the Company, and regardless of the
         reason for such termination, Executive will leave with, or promptly
         return to, the Company all documents, records, notebooks, magnetic
         tapes, disks or other materials, including all copies, in Executive's
         possession or control which contain Confidential Information or any
         other information concerning the Company, any of its Affiliates or any
         of their respective products, services or clients, whether prepared by
         the Executive or others. Notwithstanding the foregoing, Executive shall
         be entitled to retain the Executive's personal effects provided any
         Confidential Information is removed therefrom.

4.   Inventions as Sole Property of the Company.

     (a) Executive covenants and agrees that all Inventions (as defined below)
         shall be the sole and exclusive property of the Company.

     (b) As used in this Agreement, the term "Inventions" means any and all
         inventions, developments, discoveries, improvements, works of
         authorship, concepts or ideas, or expressions thereof, whether or not
         subject to patents, copyright, trademark, trade secret protection or
         other intellectual property right protection (in the United States or
         elsewhere), and whether or not reduced to practice, conceived or
         developed by Executive while employed with the Company and/or any
         Affiliate of the Company or within one (1) year following termination
         of such employment which relate to or result from the actual or
         anticipated business, work, research or

                                      A-2

         investigation of the Company or any of its Affiliates or which are
         suggested by or result from any task assigned to or performed by
         Executive for the Company or any of its Affiliates.

     (c) Executive acknowledges that all original works of authorship which are
         made by the Executive (solely or jointly) are works made for hire under
         the United States Copyright Act (17 U.S.C., et seq.).

     (d) Executive agrees to promptly disclose to the Company all Inventions,
         all original works of authorship and all work product relating thereto.
         This disclosure will include complete and accurate copies of all source
         code, object code or machine-readable copies, documentation, work
         notes, flow-charts, diagrams, test data, reports, samples and other
         tangible evidence or results (collectively, "Tangible Embodiments") of
         such Inventions, works of authorship and work product. All Tangible
         Embodiments of any Invention, work of authorship or work product
         related thereto will be deemed to have been assigned to the Company as
         a result of the act of expressing any Invention or work of authorship
         therein.

     (e) Executive hereby assigns to the Company (together with the right to
         prosecute or sue for infringements or other violations of the same) the
         entire worldwide right, title and interest to any such Inventions or
         works made for hire, and Executive agrees to perform, during and after
         employment, all acts deemed necessary or desirable by the Company to
         permit and assist it, at the Company's expense, in registering,
         recording, obtaining, maintaining, defending, enforcing and assigning
         Inventions or works made for hire in any and all countries. Executive
         hereby irrevocably designates and appoints the Company and its duly
         authorized officers and agents as Executive's agents and
         attorneys-in-fact to act for and on Executive's behalf and instead of
         Executive, to execute and file any documents and to do all other
         lawfully permitted acts to further the above purposes with the same
         legal force and effect as if executed by Executive; this designation
         and appointment constitutes an irrevocable power of attorney and is
         coupled with an interest.

     (f) Without limiting the generality of any other provision of this Section
         4, Executive hereby authorizes the Company and each of its Affiliates
         (and their respective successors) to make any desired changes to any
         part of any Invention, to combine it with other materials in any manner
         desired, and to withhold Executive's identity in connection with any
         distribution or use thereof alone or in combination with other
         materials.

     (g) This Agreement does not apply to any invention for which no equipment,
         supplies, facility or trade secret information of the Company or any
         Affiliate was used and which was developed entirely on Executive's own
         time, unless (1) the invention relates (a) to the business of the
         Company or any Affiliate or (b) to the Company's or any Affiliate's
         actual demonstrably anticipated research or development; or (2) the
         invention results from any work performed by Executive for the Company
         or any Affiliate.

                                      A-3

     (h) The obligations of Executive set forth in this Section 4 (including,
         but not limited to, the assignment obligations) will continue beyond
         the termination of Executive's employment with respect to Inventions
         conceived or made by Executive alone or in concert with others during
         Executive's employment with the Company and during the one (1) year
         thereafter, whether pursuant to this Agreement or otherwise. These
         obligations will be binding upon Executive and Executive's executors,
         administrators and other representatives.

5.   List of Prior Inventions.

         All Inventions which Executive has made prior to employment by the
         Company or any Affiliate (including without limitation Ames True
         Temper, Inc.) are excluded from the scope of this Agreement. As a
         matter of record, Executive has set forth on Annex I hereto a complete
         list of those Inventions which might relate to the Company's Business
         and which have been made by Executive prior to employment with the
         Company. Executive represents that such list is complete. If no list is
         attached, Executive represents that there are no prior Inventions.

6.   Non-Competition.

     (a) Executive acknowledges that: (i) the Company and its Affiliates are and
         will be engaged in the Business during the term of the Executive's
         employment and thereafter; (ii) the Company and its Affiliates are and
         will be actively engaged in the Business throughout the world; (iii)
         Executive is one of a limited number of persons who will be developing
         the Business; (iv) Executive has and will continue to occupy a position
         of trust and confidence with the Company after the date hereof and
         during the term of the Executive's employment Executive will become
         familiar with the Company's (and its Affiliates') trade secrets and
         with other proprietary and confidential information concerning the
         Company (and its Affiliates) and the Business; (v) the agreements and
         covenants contained in this Agreement are essential to protect the
         Company, its Affiliates and the goodwill of the Business and are a
         condition precedent to the sale by the Company to Executive of certain
         Common Units, pursuant to the Subscription Agreement between the
         parties, dated as of the date hereof, and the participation in the
         exchange of equity held by Executive for strips of common and preferred
         units of the Company pursuant to the Equity Term Sheet, dated June 1,
         2004; (vi) Executive's employment with the Company and/or its
         Affiliates has special, unique and extraordinary value to the Company
         and its Affiliates and the Company would be irreparably damaged if
         Executive were to provide services to any person or entity in violation
         of the provisions of this Section 6; and (vii) Executive has means to
         support Executive and Executive's dependents other than by engaging in
         the Business, and the provisions of this Section 6 will not impair such
         ability.

     (b) Executive will not, during the Restricted Period (as defined below),
         anywhere in the world (the "Restricted Territory"), directly or
         indirectly (whether as an owner, partner, shareholder, agent, officer,
         director, employee, independent contractor,

                                      A-4

         consultant, or otherwise) own, operate, manage, control, invest in,
         perform services for, or engage or participate in any manner in, or
         render services to (alone or in association with any person or entity)
         or otherwise assist any person or entity that engages in, or owns,
         invests in, operates, manages or controls any venture or enterprise
         that engages in, the Business. The term "Restricted Period" means the
         period of time from the date of the closing of the purchase and sale of
         shares, pursuant to the Stock Purchase Agreement by and among ATT
         Holding Co., the Shareholders of ATT Holding Co., the Warrantholders of
         ATT Holding Co., Wind Point Investors V, L.P., CHATT Holdings, Inc.,
         and the Company, dated June 1, 2004, until two (2) years after the
         termination for any reason of Executive's employment relationship with
         the Company and/or any Affiliate or any successor thereto (including
         any termination based on non-renewal of any employment agreement or
         arrangement). The Restricted Period shall be extended for a period
         equal to any time period that Executive is in violation of this Section
         6. Nothing contained in this Section 6 shall be construed to prevent
         Executive from investing in the stock of any competing corporation
         listed on a national securities exchange or traded in the
         over-the-counter market, but only if Executive is not involved in the
         business of said corporation and if Executive and Executive's
         associates (as such term is defined in Regulation 14(A) promulgated
         under the Securities Exchange Act of 1934, as in effect on the date
         hereof), collectively, do not own more than an aggregate of one percent
         (1%) of the stock of such corporation.

     (c) Scope/Severability. The parties acknowledge that the business of the
         Company and its Affiliates is and will be national and international in
         scope and thus the covenants in this Section 6 would be ineffective if
         the covenants were to be limited to a particular geographic area. If
         any court of competent jurisdiction at any time deems the Restricted
         Period unreasonably lengthy, or the Restricted Territory unreasonably
         extensive, or any of the covenants set forth in this Section 6 not
         fully enforceable, the other provisions of this Section 6, and this
         Agreement in general, will nevertheless stand and, to the full extent
         consistent with law, continue in full force and effect, and it is the
         intention and desire of the parties that the court treat any provisions
         of this Agreement which are not fully enforceable as having been
         modified to the extent deemed necessary by the court to render them
         reasonable and enforceable and that the court enforce them to such
         extent (for example, that the Restricted Period be deemed to be the
         longest period permissible by law, but not in excess of the length
         provided for in Section 6(b), and the Restricted Territory be deemed to
         comprise the largest territory permissible by law under the
         circumstances but not in excess of the territory provided for in
         Section 6(b)).

                                      A-5

7.   Non-Solicitation.

     (a) Executive will not, during the Restricted Period, directly or
         indirectly (whether as an owner, partner, shareholder, agent, officer,
         director, employee, independent contractor, consultant, or otherwise)
         with or through any individual or entity:

         i. employ, engage or explicitly solicit for employment any individual
     who is, or was at any time during the twelve-month period immediately prior
     to the termination of Executive's employment with the Company and/or any
     Affiliate for any reason, an employee of the Company or any of its
     Affiliates or otherwise seek to adversely influence or alter such
     individual's relationship with the Company or any of its Affiliates; or

         ii. solicit or encourage any individual or entity that is, or was
     during the twelve-month period immediately prior to the termination of
     Executive's employment with the Company or any Affiliate for any reason, a
     customer, supplier or vendor of the Company or any Affiliate to terminate
     or otherwise alter his, her or its relationship with the Company or any
     Affiliate.

     (b) The Restricted Period shall be extended for a period equal to any time
         period that Executive is in violation of this Section 7.

8.   Equitable Remedies.

         Executive acknowledges and agrees that the agreements and covenants set
         forth in this Agreement are reasonable and necessary for the protection
         of the Company's and its Affiliates' business interests, that
         irreparable injury will result to the Company and its Affiliates if
         Executive breaches any of the terms of said covenants, and that in the
         event of Executive's actual or threatened breach of any such covenants,
         the Company and its Affiliates will have no adequate remedy at law.
         Executive accordingly agrees that, in the event of any actual or
         threatened breach by Executive of any of said covenants, the Company
         and its Affiliates will be entitled to immediate injunctive and other
         equitable relief, without posting bond or other security and without
         the necessity of showing actual monetary damages. Nothing in this
         Section 8 will be construed as prohibiting the Company or any Affiliate
         from pursuing any other remedies available to them for such breach or
         threatened breach, including the recovery of any damages that they are
         able to prove.

9.   Breach.

     (a) Executive's breach of any of the Executive's obligations under this
         Agreement will be deemed a material breach of any employment agreement
         or arrangement Executive has with the Company or any of its Affiliates
         and will constitute cause or due cause or the like for termination by
         the Company and/or its Affiliates, as appropriate.

                                      A-6

     (b) In the event that the Company and/or its Affiliates, as appropriate,
         terminates Executive without cause or due cause or the like or
         Executive voluntarily resigns, Executive will receive severance
         payments, to the extent entitled under any employment agreement or
         arrangement, only if Executive is not in breach of any of the
         provisions in this Agreement.

10.  No Right to Employment.

         No provision of this Agreement shall give Executive any right to
         continue in the employ of the Company or any of its Affiliates, create
         any inference as to the length of employment of Executive, affect the
         right of the Company or its Affiliates to terminate the employment of
         Executive, with or without cause, or give Executive any right to
         participate in any welfare or benefit plan or other program of the
         Company or any of its Affiliates.

11.  Modification and Waiver.

         This Agreement may not be modified or amended or terminated except by
         an instrument in writing signed by the parties. No term or condition of
         this Agreement will be deemed to have been waived, except by written
         instrument of the party charged with such waiver. No such written
         waiver will be deemed to be a continuing waiver unless specifically
         stated therein, and each such waiver will operate only as to the
         specific term or condition waived and shall not constitute a waiver of
         such term or condition for the future or as to any act other than that
         specifically waived.

12.  Severability.

         Executive acknowledges that the agreements and covenants contained in
         this Agreement are essential to protect the Company and its Affiliates
         and their goodwill. Each of the covenants in this Agreement will be
         construed as independent of any other covenants or other provisions of
         this Agreement. It is the intention and desire of the parties that the
         court treat any provisions of this Agreement which are not fully
         enforceable as having been modified to the extent deemed necessary by
         the court to render them reasonable and enforceable and that the court
         enforce them to such extent.

13.  Notices.

         Any notice, consent, waiver and other communications required or
         permitted pursuant to the provisions of this Agreement must be in
         writing and will be deemed to have been properly given (a) when
         delivered by hand; (b) when sent by telecopier (with acknowledgment of
         complete transmission), provided that a copy is mailed by U.S.
         certified mail, return receipt requested; (c) three (3) days after sent
         by certified mail, return receipt requested; or (d) one (1) day after
         deposit with a nationally recognized overnight delivery service, in
         each case to the appropriate addresses and telecopier numbers set forth
         below:

                                      A-7

     If to the Company:

         CHATT Holdings LLC
         c/o Castle Harlan, Inc.
         150 East 58th Street
         New York, New York 10155
         Attn: Justin Wender
         Fax:  (212) 207-8042

     With a copy to:

         Schulte Roth & Zabel LLP
         919 Third Avenue
         New York, New York 10022
         Attn.: Marc Weingarten, Esq.
         Fax:   (212) 593-5955

    If to Executive:

         Each party will be entitled to specify a different address for the
         receipt of subsequent notices by giving written notice thereof to the
         other party in accordance with this Section 13.

14.  Headings.

         The headings and other captions in this Agreement are included solely
         for convenience of reference and will not control the meaning and
         interpretation of any provision of this Agreement.

15.  Governing Law.

         This Agreement has been executed in the State of Pennsylvania, and its
         validity, interpretation, performance, and enforcement will be governed
         by the laws of such state, except with respect to conflicts of laws
         principles.

16.  Binding Effect.

         This Agreement will be binding, upon and inure to the benefit of
         Executive, the Company, and their respective successors and permitted
         assigns; provided, however, that Executive may not assign this
         Agreement or any part hereof.

17.  Survival.

         The provisions in this Agreement shall survive the termination of
         Executive's employment with the Company.

18.  Compliance.

                                      A-8

         In order to monitor compliance with the terms of this Agreement,
         Executive agrees to give written notice, including a pertinent
         description, to the Company of each position of employment, ownership
         of more than one percent (1%) of the stock of any corporation,
         participation with another entity or organization (except for religious
         institutions or charitable organizations not related to the Business)
         which Executive obtains during the Restricted Period.

19.  No Strict Construction.

         The language used in this Agreement will be deemed to be the language
         chosen by the parties to express their mutual intent, and no rule of
         strict construction will be applied against any person.

                                      A-9

     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
its duly authorized officer and Executive has signed this Agreement, as of the
date written below.

                                             EXECUTIVE:

DATE:    ________, 2004

                                             CHATT HOLDINGS LLC

                                             BY:
                                             ITS:

                                      A-10

                                    EXHIBIT B

                    SEPARATION AGREEMENT AND GENERAL RELEASE

     AMES TRUE TEMPER, INC. ("COMPANY"), and         ("Executive"), agree that
this Separation Agreement and General Release ("AGREEMENT") sets forth their
complete agreement and understanding regarding the termination of Executive's
employment with Company.

     1. Separation Date. Executive's employment with Company will terminate
effective _______________ (the "SEPARATION DATE"). Executive agrees to return
all Company property to Company no later than the Separation Date. Except as
specifically provided below, Executive shall not be entitled to receive any
benefits of employment following the Separation Date.

     2. Consideration of Company. In consideration for the releases and
covenants by Executive in this Agreement, Company will provide Executive with
the following: INSERT CONSIDERATION AS SET FORTH IN EMPLOYMENT AGREEMENT

     3. Executive Release of Rights. Executive (defined for the purpose of this
Paragraph 3 as Executive and Executive's agents, representatives, attorneys,
assigns, heirs, executors, and administrators) irrevocably, fully, and
unconditionally releases the Released Parties (defined as the Company, ATT
Holding Co., CHATT Holdings, Inc., CHATT Holdings LLC, Castle Harlan Partners
IV, L.P., and each of their affiliated companies, parents, subsidiaries,
predecessors, successors, assigns, divisions, related entities and any of their
past or present employees, officers, agents, insurers, attorneys,
administrators, officials, directors, shareholders, employee benefit plans, and
the sponsors, fiduciaries, or administrators of the Company's employee benefit
plans) from any and all liability, claims, demands, actions, causes of action,
suits, grievances, debts, sums of money, agreements, promises, damages, back and
front pay, costs, expenses, attorneys' fees, and remedies of any type, arising
or that may have arisen out of or in connection with Executive's employment with
or termination of employment from the Company, from the beginning of time to the
date hereof, including but not limited to claims, actions or liability under:
(1) Title VII of the Civil Rights Act of 1964, 42 U.S.C.(Section)2000 et seq.,
the Civil Rights Act of 1991, the Civil Rights Act of 1866, the Age
Discrimination in Employment Act, the Americans with Disabilities Act of 1990,
42 U.S.C.(Section)12101 et seq., the Fair Labor Standards Act, 29
U.S.C.(Section)201 et seq., the Family and Medical Leave Act of 1993, 29
U.S.C.(Section)2601 et seq., the Workers' Adjustment and Retraining Notification
Act, the Employee Retirement Income Security Act of 1974, 29 U.S.C.(Section)1001
et seq., Pennsylvania Human Relations Act Pa., Stat. Ann. tit.43,(Sections)951
et seq., all as amended; (2) any other federal, state or local statute,
ordinance, or regulation regarding employment, termination of employment, or
discrimination in employment, and (3) the common law relating to employment
contracts, wrongful discharge. defamation, or any other matter.

     4. Waiver of Reinstatement. Executive waives any reinstatement or future
employment with Company and agrees never to apply for employment or otherwise
seek to be hired, rehired, employed, re-employed, or reinstated by Company or
any of its affiliated companies or corporations.

     5. No Disparagement or Encouragement of Claims. Executive agrees not to
make any oral or written statement that disparages or places any Released Party
in a false or negative

                                      B-1

light. Executive further agrees not to encourage or assist any person who files
a lawsuit, charge, claim or complaint against the Released Parties unless
Executive is required to render such assistance pursuant to a lawful subpoena or
other legal obligation. The Board of Directors (and each of its individual
members) and the Chief Executive Officer of the Company agree not to make
(outside the Company; or within the Company, except as may be reasonably
necessary to conduct the business of the Company) any oral or written statement
that disparages or places Executive in a false or negative light; and these
individuals further agree not to encourage or assist any person who files a
lawsuit, charge, claim or complaint against Executive unless such individuals
are required to render such assistance pursuant to a lawful subpoena or other
legal obligation.

     6. Cooperation of Executive. Executive agrees to cooperate with Company in
any reasonable manner as Company may request, including but not limited to
furnishing information to and otherwise consulting with the Company; and
assisting Company in any litigation or potential litigation or other legal
matters, including but not limited to meeting with and fully answering the
questions of Company or its representatives or agents, and testifying and
preparing to testify at any deposition or trial. Company agrees to compensate
Executive for any reasonable out of pocket expenses incurred as a result of such
cooperation.

     7. Non-admission/Inadmissibility. This Agreement does not constitute an
admission by Company that any action it took with respect to Executive was
wrongful, unlawful or in violation of any local, state, or federal act, statute,
or constitution, or susceptible of inflicting any damages or injury on
Executive, and Company specifically denies any such wrongdoing or violation.
This Agreement is entered into solely to resolve fully all matters related to or
arising out of Executive's employment with and termination from Company, and its
execution, and implementation may not be used as evidence, and shall not be
admissible in a subsequent proceeding of any kind, except one alleging a breach
of this Agreement.

     8. Severability. The provisions of this Agreement shall be severable and
the invalidity of any provision shall not affect the validity of the other
provisions.

     9. Governing Law. This Agreement shall be governed by and construed in
accordance with laws and judicial decisions of the State of Pennsylvania,
without regard to its principles of conflicts of laws.

     10. Scope of Agreement. Executive understands that he remains bound to
those provisions in the Executive's Employment Agreement, signed on June 28,
2004, which survive the termination of the Executive's employment, including but
not limited to, those provisions in Paragraphs 9-11, 14, 19 and 20 of such
Employment Agreement. Except as specifically set forth in such provisions, this
Agreement contains the entire agreement and understanding between Executive and
Company concerning the matters described herein, and supersedes all prior
agreements, discussions, negotiations, understandings and proposals of the
parties. The terms of this Agreement cannot be changed except in a subsequent
document signed by both parties.

     11. Revocation Period. Executive has the right to revoke this Agreement for
up to seven days after he signs it. In order to revoke this Agreement, Executive
must sign and send a written notice of the decision to do so, addressed to
[NAME] at [INSERT TITLE, AND ADDRESS], and that written notice must be received
by Company no later than the eighth day after Executive signed this Agreement.
If Executive revokes this Agreement, Executive will not be entitled to

                                      B-2

any of the consideration from Company described in paragraph 2 above.

     12. Voluntary Execution of Agreement. Executive acknowledges that:

     a.  Executive has carefully read this Agreement and fully understands its
         meaning;

     b.  Executive had the opportunity to take up to 21 days after receiving
         this Agreement to decide whether to sign it;

     c.  Executive understands that the Company is hereby advising him, in
         writing, to consult with an attorney before signing it;

     d.  Executive is signing this Agreement, knowingly, voluntarily, and
         without any coercion or duress; and

     e.  everything Executive is receiving for signing this Agreement is
         described in the Agreement itself, and no other promises or
         representations have been made to cause Executive to sign it.

     13. Nondisclosure. Executive shall not disclose the contents or substance
of this Agreement to any third parties, other than the Executive's attorneys,
accountants, or as required by law and shall instruct each of the foregoing not
to disclose the same.

                                     COMPANY

                                        By:
     -------------------------------         ------------------------------
     Executive Signature
                                        Title:
                                              -----------------------------

     Dated:                             Dated:
           -------------------------          -----------------------------

                                      B-3exv10w1

 

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

2

 

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.

3

 

     (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:

4

 

     (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

5

 

     (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.

6

 

     (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

7

 

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

8

 

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.

9

 

     (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.

10

 

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-

11

 

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]

12

 

          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

	 	 

13

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