0001085146-12-000120.txt : 20120203 0001085146-12-000120.hdr.sgml : 20120203 20120203115129 ACCESSION NUMBER: 0001085146-12-000120 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20120203 DATE AS OF CHANGE: 20120203 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS COMMUNICATIONS CORP CENTRAL INDEX KEY: 0000783005 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 351542018 STATE OF INCORPORATION: IN FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-43521 FILM NUMBER: 12568567 BUSINESS ADDRESS: STREET 1: ONE EMMIS PLAZA STREET 2: 40 MONUMENT CIRCLE SUITE 700 CITY: INDIANAPOLIS STATE: IN ZIP: 46204 BUSINESS PHONE: 3172660100 MAIL ADDRESS: STREET 1: ONE EMMIS PLAZA STREET 2: 40 MONUMENT CIRCLE #700 CITY: INDIANAPOLIS STATE: IN ZIP: 46204 FORMER COMPANY: FORMER CONFORMED NAME: EMMIS BROADCASTING CORPORATION DATE OF NAME CHANGE: 19920703 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: FIRST DERIVATIVE TRADERS, L.P. CENTRAL INDEX KEY: 0001214902 IRS NUMBER: 651184171 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 1319 RUTLAND LANE CITY: WYNNEWOOD STATE: PA ZIP: 19096 BUSINESS PHONE: 215-820-8221 MAIL ADDRESS: STREET 1: 1319 RUTLAND LANE CITY: WYNNEWOOD STATE: PA ZIP: 19096 SC 13D 1 emmiscorp13d_02202012.htm EMMIS COMMUNICATIONS CORPORATION

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No.     )*

 

 

Emmis Communications Corporation

(Name of Issuer)

 

 

6.25% Series A Cumulative Convertible Preferred Stock

(Class A Common Stock, par value $0.01 per share)

(Title of Class of Securities)

 

 

291525202

(291525103)

(CUSIP Number)

 

 

Marten Hirsch
First Derivative Traders LP
1319 Rutland Lane
Wynnewood, PA 19096
610.570.7746

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

 

 

January 20, 2012

(Date of Event which Requires Filing of this Statement)

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box.

 

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

 

 

 

*   The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

 

 

 

CUSIP No. 291525202    

 

  1   

NAME OF REPORTING PERSONS

I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)

 

First Derivative Traders LP

  2   

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

(a)  ¨        (b)  x

 

  3   

SEC USE ONLY

 

  4   

SOURCE OF FUNDS

 

    OO

  5   

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)    ¨

 

  6   

CITIZENSHIP OR PLACE OF ORGANIZATION

 

   Pennsylvania

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

      7    

SOLE VOTING POWER

 

    5,500 (1) 13,420 (2)
     8   

SHARED VOTING POWER

 

    0

     9   

SOLE DISPOSITIVE POWER

 

    5,500 (1) 13,420 (2)

   10   

SHARED DISPOSITIVE POWER

 

   0

11 

  

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

    5,500 (1) 13,420 (2) (3)

12 

  

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES    ¨

 

13 

  

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

    0.2% (4) 0.04% (5)

14 

  

TYPE OF REPORTING PERSON

 

    BD

 

CUSIP No. 291525202    

 

  1   

NAME OF REPORTING PERSONS

I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)

 

First Derivative Management LLC
  2   

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

(a)  ¨        (b)  x

 
  3   

SEC USE ONLY

 
  4   

SOURCE OF FUNDS

 

    OO
  5   

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)    ¨

 
  6   

CITIZENSHIP OR PLACE OF ORGANIZATION

 

   Pennsylvania

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

      7    

SOLE VOTING POWER

 

    5,500 (1) 13,420 (2)
     8   

SHARED VOTING POWER

 

    0
     9   

SOLE DISPOSITIVE POWER

 

    5,500 (1) 13,420 (2)
   10   

SHARED DISPOSITIVE POWER

 

   0

11 

  

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

    5,500 (1) 13,420 (2) (3)

12 

  

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES    ¨

 

13 

  

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

    0.2% (4) 0.04% (5)

14 

  

TYPE OF REPORTING PERSON

 

    OO

 

CUSIP No. 291525202    

 

  1   

NAME OF REPORTING PERSONS

I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)

 

Marten Hirsch
  2   

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

(a)  ¨        (b)  x

 
  3   

SEC USE ONLY

 
  4   

SOURCE OF FUNDS

 

    OO
  5   

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)    ¨

 
  6   

CITIZENSHIP OR PLACE OF ORGANIZATION

 

   Pennsylvania

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

      7    

SOLE VOTING POWER

 

    5,500 (1) 13,420 (2)

     8   

SHARED VOTING POWER

 

    0
     9   

SOLE DISPOSITIVE POWER

 

    5,500 (1) 13,420 (2)
   10   

SHARED DISPOSITIVE POWER

 

   0

11 

  

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

     5,500 (1) 13,420 (2) (3)

12 

  

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES    ¨

 

13 

  

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

    0.2% (4) 0.04% (5)

14 

  

TYPE OF REPORTING PERSON

 

    IN

 

CUSIP No. 291525202    

 

  1   

NAME OF REPORTING PERSONS

I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)

 

Sherman Frager
  2   

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

(a)  ¨        (b)  x

 
  3   

SEC USE ONLY

 
  4   

SOURCE OF FUNDS

 

    OO
  5   

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)    ¨

 
  6   

CITIZENSHIP OR PLACE OF ORGANIZATION

 

   Pennsylvania

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

      7    

SOLE VOTING POWER

 

    5,500 (1) 13,420 (2)
     8   

SHARED VOTING POWER

 

    0
     9   

SOLE DISPOSITIVE POWER

 

    5,500 (1) 13,420 (2)
   10   

SHARED DISPOSITIVE POWER

 

   0

11 

  

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

    5,500 (1) 13,420 (2)(3)

12 

  

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES    ¨

 

13 

  

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

    0.2% (4) 0.04% (5)

14 

  

TYPE OF REPORTING PERSON

 

    IN

FOOTNOTES:

(1) The Reporting Person beneficially owns 5,500 shares of 6.25% Series A Cumulative Convertible Preferred Stock (the “Preferred Shares”), which are convertible as of the date of this Schedule 13D into 13,420 shares of Class A Common Stock (the “Common Stock”). The calculation of percentage ownership of the Preferred Shares is based upon 2,612,420 outstanding Preferred Shares as of December 1, 2011 as disclosed in the Issuer’s TENDER OFFER STATEMENT UNDER SECTION 14(D)(1) OR 13(E)(1) filed on December 1, 2011. The issuer’s assertion that there are 2,612,420 outstanding Preferred Shares assumes that the shares purchased by the Issuer pursuant to the Total Return Swap Transactions remain outstanding, which may not be the case.  Until the Preferred Shares are converted, the Reporting Persons do not have any sole or shared voting or dispositive power over any shares of Common Stock.

(2) Each Preferred Share currently is convertible into 2.44 shares of Common Stock. Accordingly, as of the date of this Schedule 13D, the 5,500 Preferred Shares beneficially owned by the Reporting Persons are convertible into approximately 13,420 shares of Common Stock

(3) The Preferred Shares included in #11 exclude the Preferred Shares held by the other parties to the Lock-Up Agreement described in Item 4 and attached as an Exhibit to this initial 13D filing. The aggregate Preferred Shares held by the parties to the Lock-Up Agreement as of the date of this filing is 809,440 which represents 30.98% of the outstanding Preferred Shares. This calculation assumes that the shares purchased by the Issuer pursuant to the Total Return Swap Transactions are treated as outstanding, which may not be the case. If the Preferred Shares that were purchased by the issuer in the Total Return Swap Transactions are treated as redeemed or otherwise not eligible to be voted, then the aggregate beneficial ownership of the parties to the Lock-Up Agreement would represent 71.77% of the Preferred Shares.


The Preferred Shares held by the parties to the Lock-Up Agreement are, in the aggregate, convertible into 1,975,033 shares of Class A Common Stock, which represents 5.57% of the outstanding shares of Class A Common Stock.


The foregoing percentage is based on 33,459,861 shares of Class A Common Stock outstanding as of October 6, 2011, as disclosed in the Issuer’s most recent Form 10Q filed with the SEC on October 13, 2011, plus 1,975,033 Class A Common Stock that would be issued upon conversion of the 809,440 Preferred Shares beneficially held by the parties to the Lock-Up Agreement.

(4) Based on 2,612,420 Preferred Shares outstanding as of December 1, 2011 as disclosed in Schedule TO-1/A filed by the Issuer on December 12, 2011 (“Schedule TO-1/A”).

(5) Based on 33,459,861 shares of Class A Common Stock outstanding as of October 6, 2011, as disclosed in the Issuer’s most recent Form 10Q filed with the SEC on October 13, 2011, plus 1,975,033 Class A Common Stock that would be issued upon conversion of the 809,440 Preferred Shares beneficially held by the parties to the Lock-Up Agreement.

 

Item 1. Security and Issuer.

This Schedule 13D relates to 6.25% Series A Cumulative Convertible Preferred Stock (the “Preferred Shares”) and the Class A Common Stock, par value $0.01 per share (the “Common Stock”) of Emmis Communications Corporation, an Indiana corporation (the “Issuer” or “Emmis”). The address of the executive offices of the Issuer is One Emmis Plaza, 40 Monument Circle, Suite 700, Indianapolis, IN 46204.

 

Item 2. Identity and Background.

 

  (a) Name of Persons Filing  
       
    This Schedule 13D is being filed by:  
  (i) First Derivative Traders, LP, a Pennsylvania limited partnership (the “Fund”), with respect to shares of 6.25% Series A Cumulative Convertible Preferred Stock (the “Preferred Shares”) directly owned by it
  (ii) First Derivative Management, LLC, a Pennsylvania limited liability company (the “General Partner”), which serves as the general partner of the Fund, with respect to the Preferred Shares directly owned by the Fund;
  (iii) Mr. Sherman Frager (“Mr. Frager”) who serves as a managing member of the General Partner with respect to the Preferred Shares directly owned by the Fund;
  (iv) Mr. Marten Hirsch (Mr. Hirsch”) who serves as a managing member of the General Partner with respect to the Preferred Shares directly owned by the Fund.
     
    The Fund, the General Partner, Mr. Frager and Mr. Hirsch are hereinafter sometimes collectively referred to as the “Reporting Persons.” Any disclosures herein with respect to persons other than the Reporting Persons are made on information and belief after making inquiry to the appropriate party.
     
  (b) Residence or business address
     
   

The principal address of each of the Reporting Persons is 1319 Rutland Lane, Wynnewood, PA 19096

     
  (c) Present Principal Occupation
     
   

The General Partner has sole and complete discretionary authority to manage the investments of the Fund. Mr. Frager and Mr. Hirsch are the co-owners and managing members of the General Partner. Shares of common stock represent shares that would be issued upon conversion of the Preferred Shares that are held at the Fund.

 

Item 3. Source and Amount of Funds or Other Consideration.

The Fund is a private investment partnership, the sole general partner of which is the General Partner. The General Partner has the power to vote and dispose of the securities owned by the Fund, including discretionary authority with regards to acquiring the Preferred Shares beneficially held by the Reporting Persons,. Mr. Frager and Mr. Hirsch share investment management duties and have investment authority over the assets of the Fund in their capacity as managing members of the General Partner. The Fund purchased the Preferred Shares of the Issuer as identified in Item 5 below in 2008 or 2009 for a nominal aggregate purchase price of less than $20,000.   No payments were made to or by any of the Reporting Persons in connection with the Lock-Up Agreement described in Items 4 of this Schedule 13D.

 

Item 4. Purpose of Transaction.

The Fund bought the Preferred Shares described herein for investment purposes approximately 4  years ago.  We continue to hold them for such purpose.  We decided to join the lock-up group because we were outraged that the Issuer was was suggesting that it will try to eliminate the cumulative rights of the Preferred Shares thereby all but making these preferred shares worthless.  This threat by the Issuer to strip the Preferred Shares of their cumulative rights undermines both the spirit and letter of corporate governance laws and practices.

On December 12, 2011 Zazove Associates, LLC, Corre Opportunities Fund, L.P., Kevan A. Fight and DJD Group, LLLP (collectively, the “Locked-Up Holders”) entered into a written lock-up agreement (the “Lock-Up Agreement”) pursuant to which, among other things, each of them agreed, subject to certain exceptions, not to sell, assign, transfer, hypothecate or otherwise dispose of, directly or indirectly, including, without limitation, by any “total return swap” arrangement or derivative transaction, or any other agreement, arrangement or understanding which could cause the ability to direct the vote of the Preferred Shares to be transferred or otherwise restricted, (i) any Preferred Shares or (ii) any option, interest in or right to acquire any Preferred Shares, in either case absent the prior written consent of at least two Locked-Up Holders that hold at least two thirds of the Preferred Shares subject to the Lock-Up Agreement and unless the transferee thereof agrees in writing to be bound by the terms of the Lock-Up Agreement by executing and delivering a joinder to all Locked-Up Holders.

On January 20, 2012, First Derivative Traders LP joined the Lock-Up Agreement.

The description of the Lock-Up Agreement in this Schedule 13D is qualified in its entirety by reference to full text of the Lock-Up Agreement, a copy of which is filed herewith as an Exhibit and is hereby incorporated herein by reference.

The Reporting Persons acquired beneficial ownership and continue to beneficially hold the shares reported herein for investment purposes. The Locked-Up Holders may from time to time engage the Issuer, its representatives or other relevant parties in discussions regarding the Preferred Shares of  the Issuer, but First Derivative Traders will not be actively involved in these discussions due to the small number of shares which it owns. Depending on market conditions and other factors that the Reporting Persons may deem material to its investment decisions, the Reporting Persons may sell all or a portion of its shares, or may purchase additional securities of the Issuer, on the open market or in a private transaction, in each case as permitted by the Lock-up Agreement. Except as set forth in this Schedule 13D, the Reporting Persons have no present plans or proposals that relate to or that would result in any of the actions specified in clauses (b) through (j) of Item 4 of Schedule 13D of the Exchange Act.

 

Item 5. Interest in Securities of the Issuer.

(a) The Reporting Persons beneficially own 5,500 shares of 6.25% Series A Cumulative Convertible Preferred Stock (“Preferred Shares”), representing approximately 0.2% of the outstanding Preferred Shares, which is based upon 2,612,420 outstanding Preferred Shares as of December 1, 2011 as disclosed in the Issuer’s TENDER OFFER STATEMENT UNDER SECTION 14 (D)(1) OR 13 (E)(1) filed on December 1, 2011. The Issuer’s assertion that there are 2,612,420 outstanding Preferred Shares assumes that the shares purchased by the Issuer pursuant to the Total Return Swap Transactions remain outstanding, which may not be the case. Because the Preferred Shares are currently convertible into shares of Common Stock, the Reporting Persons also are deemed under Rule 13-d-3(d)(1)(i)(B) of the Exchange Act to have beneficial ownership of the shares of Common Stock issuable upon conversion of the Preferred Shares. Each Preferred Share currently is convertible into 2.44 shares of Common Stock. Accordingly, as of the date of this Schedule 13D, the 5,500 Preferred Shares beneficially owned by the Reporting Persons are convertible into approximately 13,420 shares of Common Stock, representing 0.04% of the 33,901,605 shares of Common Stock deemed outstanding pursuant to Rule 13d-3(d)(1)(i) of the Exchange Act (based on 33,503,666 shares of Common Stock as disclosed as outstanding in the Issuer’s Offer to Purchase included as an Exhibit to its Schedule TO-1/A filed with the Securities and Exchange Commission on December 1, 2011).

(b) The Reporting Persons have sole voting and dispositive power with regard to the Preferred Shares that are beneficially held by the Reporting Persons.

(c) Not applicable.

(d) Not applicable.

(e) Not applicable.

 

Item 6. Contracts, Arrangements, Understandings, or Relationships with Respect to Securities of the Issuer

Other than the Lock-Up Agreement, none of the Reporting Persons have any contracts, arrangements, understandings or relationships (legal or otherwise) with respect to any securities of the Issuer.

 

 

Item 7. Material to be Filed as Exhibits.

1. Lock-Up Agreement dated December 12, 2011 between Corre Opportunities, LP and the other parties signatory thereto, filed with the initial filing of the Reporting Persons’ Schedule 13D.

 

 

 

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

Dated: February 2, 2012

 

 

/s/ Marten Hirsch

Signature

 

 

Marten Hirsch, Managing Member of First Derivative Management LLC, the General Partner of First Derivative Traders LP
Name / Title

 

 

 EX-1 2 Lockup_Agreement.htm LOCK-UP AGREEMENT Unassociated Document
EXECUTION VERSION
 
 
 
LOCK-UP AGREEMENT
 
This Lock-up Agreement (this "Agreement"), is dated as of December 12, 2011, and is made by and among the undersigned parties (each, a "Locked-Up Holder" and, collectively, the "Locked-Up Holders"), each solely in its capacity as a beneficial owner (as defined below) of shares of 6.25% Series A Cumulative Convertible Preferred Stock (the "Preferred Shares") and all holders of such shares, the "Preferred Shareholders") issued by Emmis Communications Corporation ("Emmis").
 
RECITALS
 
A.
On December 1, 2011, Emmis launched a modified "Dutch auction" tender offer to purchase up to $6,000,000 in value of Preferred Shares at a price per share not less than $12.50 and not greater than $15.56 (the "Tender Offer"). The Tender Offer is currently scheduled to expire at 5:00 p.m., New York City time, on December 30, 2011, unless extended. Depending on the final purchase price of the offer, if the offer is fully subscribed, Emmis could purchase between 385,604 and 480,000 Preferred Shares representing approximately 14.8% to 18.4% of the issued and outstanding Preferred Shares as of December 1, 2011.
 
B.
Prior to commencement of the Tender Offer, Emmis entered into securities purchase agreements structured as "total return swaps" (the "Purchase Agreements") with holders of Preferred Shares representing a total of 1,484,679 Preferred Shares (the "Purchased Shares"). Under the terms of the Purchase Agreements, the Purchased Shares remain outstanding and eligible to be voted, and Emmis obtains the authority to direct the voting of the Purchased Shares.
 
C.
Furthermore, as disclosed in the Offer to Purchase filed by Emmis on December 1, 2011, if Emmis is able to obtain the ability to direct the vote of at least 66 2/3% of the issued and outstanding Preferred Shares following the completion of the Tender Offer, Emmis may elect to, among other things, amend or eliminate various rights of the Preferred Shares, including but not limited to: (i) reducing or eliminating the liquidation preference of the Preferred Shares, (ii) removing the ability of the holders of Preferred Shares to require Emmis to repurchase all or any portion of such holders' Preferred Shares upon a change of control or certain going-private transactions, (iii) removing Emmis' obligation to pay to holders of Preferred Shares the amount of dividends in respect of their Preferred Shares that are currently accrued and unpaid, (iv) changing the designation of the Preferred Shares from "Cumulative" to "Non-Cumulative" such that dividends or distributions on the Preferred Shares shall cease to accrue, (v) eliminating the rights of the holders of Preferred Shares to nominate directors to Emmis' Board of Directors as a result of arrearages in dividends, and (vi) eliminating the restrictions on Emmis' ability to pay dividends or make distributions on its Common Shares prior to paying accrued and unpaid dividends or distributions on Preferred Shares. If the above-described amendments are made, the market value of the Preferred Shares remaining outstanding will be materially and adversely affected, and Emmis may engage in various actions that are currently prohibited or limited by the various terms and provisions of the Preferred Shares.
 
 
1
 
 
AGREEMENT
 
NOW, THEREFORE, in consideration of the promises and the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Locked-Up Holders hereby agree as follows:
 
1.   Agreement. Solely in its capacity as a beneficial owner of Preferred Shares, each Locked-Up Holder covenants and agrees that it will not (i) tender any Preferred Shares beneficially owned by it (whether beneficially owned on the date hereof or with respect to which beneficial ownership is acquired after the date hereof (such Preferred Shares with respect to which beneficial ownership is acquired after the date hereof, the "Future Preferred Shares")) into the Tender Offer, as may be amended and / or extended, or (ii) sell, assign, transfer, hypothecate or otherwise dispose of, directly or indirectly, including, without limitation, by any "total return swap" arrangement or derivative transaction, or any other agreement, arrangement or understanding which could cause the ability to direct the vote of the Preferred Shares to be transferred or otherwise restricted, any Preferred Shares to Emmis, any affiliate or associate of Emmis (each as defined under Rule 12b-2 under the Exchange Act), Zell Credit Opportunities Master Fund, L.P. ("Zell") or any affiliate or associate of Zell, in either case without the prior written consent of the Requisite Locked-Up Holders, and it will take all necessary action to achieve the foregoing.
 
2.   Sale/Acquisition.
 
(a)    For a period commencing with the date hereof until the termination of this Agreement pursuant to Section 4 hereof each Locked-Up Holder hereby agrees not to sell, assign, transfer, hypothecate or otherwise dispose of, directly or indirectly, including, without limitation, by any "total return swap" arrangement or derivative transaction, or any other agreement, arrangement or understanding which could cause the ability to direct the vote of the Preferred Shares to be transferred or otherwise restricted, (i) any Preferred Shares or (ii) any option, interest in or right to acquire any Preferred Shares, in either case absent the prior written consent of the Requisite Locked-Up Holders and unless the transferee thereof agrees in writing to be bound by the terms of this Agreement by executing and delivering to all Locked-Up Holders a joinder substantially in the form attached hereto as Annex A. In the event any Locked-Up Holder receives the prior written consent of the Requisite Locked-Up Holders to effect any of the transactions described in the foregoing clauses (i) and (ii), it shall give written notice to all Locked-Up Holders no later than the first business day after giving effect to any such transaction. This Agreement shall in no way be construed to preclude the Locked-Up Holders from acquiring Future Preferred Shares or Common Shares or any interest therein; provided, that any Future Preferred Shares so acquired shall automatically be deemed to be subject to the terms and conditions of this Agreement for so long as this Agreement remains in effect; provided further, that a Locked-Up Holder shall give written notice to all Locked-Up Holders no later than the five business days after acquiring beneficial ownership of any such Future Preferred Shares or Common Shares; provided further that notice shall be given within one business day following the purchase of 10,000 or more Preferred Shares.
 
 
2
 
 
(b)    Each Locked-Up Holder further agrees that, without the prior written consent of the Requisite Locked-Up Holders, it shall not, and shall cause its affiliates and associates (each as defined in Rule 12b-2 under the Exchange Act) not to, enter into any agreement, arrangement or understanding with any person for the purpose of holding, voting or disposing of any securities of Emmis, or derivative instruments with respect to securities of Emmis.
 
3.   Ownership and Authority; Additional Information. Each Locked-Up Holder shall deliver to Gibson Dunn & Crutcher LLP ("Gibson Dunn"), at the address provided in Section 13 hereof, a beneficial ownership certificate, substantially in the form attached hereto as Annex B (the "Ownership Certificate"), promptly upon any change (by acquisition, sale or otherwise) of its beneficial ownership of Preferred Shares or Common Shares. In addition, each Locked-Up Holder agrees to promptly furnish to Gibson Dunn (a) any information necessary or appropriate for the making of any required or advisable public filing or amendment thereto and (b) any other information supplementing information contained in any publicly filed statement or amendment thereto as is necessary in order to make the statements contained in such publicly filed statement or amendment not misleading.
 
4.   Conditions; Termination.
 
(a)   Except for the obligations contained in Section 1 hereof, this Agreement shall automatically terminate upon the earlier of (i) January 31, 2012 (the "Termination Date") or (ii) the written notice of the Requisite Locked-Up Holders of the termination of this Agreement. The Termination Date may be extended to a later date by written notice of the Requisite Locked-Up Holders. The obligations imposed by Section 1 hereof shall survive the termination of this Agreement pursuant to clause (i) or (ii) of this Section 4(a), and shall only terminate upon the prior written consent of the Requisite Locked-Up Holders.
 
(b)   In the event of termination of this Agreement pursuant to this Section 4, the obligations of the Locked-Up Holders hereunder, except those obligations imposed by Section 1 hereof, shall cease, and no party shall have any liability to any other party hereunder; provided, however, that no such termination shall relieve any party of liability for any willful and material breach of this Agreement prior to the effectiveness of such termination.
 
5.   Representations and Warranties. Each of the Locked-Up Holders hereby represents and warrants as to itself, that the following statements are true, correct and complete, as of the date hereof:
 
(a)   Beneficial Ownership. It is the beneficial owner of the Emmis securities and swaps or other derivative transactions relating to Emmis securities set forth on the signature page hereto.
 
(b)   Securities Laws. Neither it nor its affiliates or associates (i) is the beneficial owner of any securities of Emmis or is a party to any swaps or other derivative transactions relating to securities of Emmis, other than as described in the signature page hereto or (ii) has any agreement, arrangement or understanding with any person for the purpose of acquiring, holding, voting or disposing of any securities of Emmis, other than this Agreement.
 
 
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(c)   Power and Authority. It has all requisite power and authority to enter into this Agreement and to perform its respective obligations under this Agreement.
 
(d)   Authorization. The execution and delivery of this Agreement and the performance of its obligations hereunder have been duly authorized by all necessary action on its part.
 
6.   Acknowledgement. Each Locked-Up Holder agrees that it shall be responsible for compliance with any obligations such Locked-Up Holder may have pursuant to Section 13(d) or Section 16 of the Exchange Act, if any, to the extent it may be deemed part of a "Group" within the meaning of Rule 13d-5(b) under the Exchange Act or otherwise relating to its beneficial ownership of securities of Emmis (including, without limitation, making all filings, if any, required to be made by it on Schedule 13D and Forms 3, 4 and 5), it being agreed that no Locked-Up Holder shall be responsible for any such non-compliance by any other Locked-Up Holder other than itself.
 
7.   Effectiveness. This Agreement shall not become effective and binding on the parties hereto unless and until counterpart signature pages hereto shall have been executed and delivered by the parties hereto and it is executed by beneficial owners of at least seven hundred and fifty thousand (750,000) Preferred Shares.
 
8.   Miscellaneous.
 
(a)   Additional Signatories. Additional beneficial owners of Preferred Shares, with the prior consent of the Requisite Locked-Up Holders, may join and be bound by all of the terms of this Agreement by executing and delivering to all Locked-Up Holders a joinder substantially in the form attached hereto as Annex A.
 
(b)   Definitions. As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):
 
(i)   "beneficially own" or "beneficial ownership" with respect to any securities shall mean having "beneficial ownership" of such securities as determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
 
(ii)   "Common Shares" shall mean shares of any class of Emmis' Common Stock.
 
(iii)   "Requisite Locked-Up Holders" shall mean Locked-Up Holders party hereto beneficially owning more than two-thirds of the Subject Preferred Shares, but in no event shall less than two (2) Locked-Up Holders constitute the Requisite Locked Up-Holders.
 
(iv)   "Subject Preferred Shares" shall mean the Preferred Shares beneficially owned by the Locked-Up Holders on the date hereof and any Future Preferred Shares.
 
 
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9.   Amendments. This Agreement may not be modified or amended except in a writing signed by the Requisite Locked-Up Holders.
 
10.   Governing Law; Jurisdiction. This Agreement shall be construed in accordance with, and this Agreement shall be governed by, the laws of the State of New York, without regard to any conflicts of law provision which would require the application of the law of any other jurisdiction. By its execution and delivery of this Agreement, each of the Locked-Up Holders hereby irrevocably and unconditionally agrees for itself that any legal action, suit or proceeding against it with respect to any matter under or arising out of or in connection with this Agreement or for recognition or enforcement of any judgment in any such action, suit or proceeding, may be brought in any federal or state court of competent jurisdiction in the Borough of Manhattan of The City of New York.
 
By execution and delivery of this Agreement, each Locked-Up Holder hereby irrevocably accepts and submits itself to the exclusive jurisdiction of any such court, generally and unconditionally, with respect to any such action, suit or proceeding and hereby waives any defense of forum non conveniens or based upon venue if such action, suit or proceeding is brought in accordance with this provision.
 
11.   Headings. The headings of the Sections, paragraphs and subsections of this Agreement are inserted for convenience only and shall not affect the interpretation hereof.
 
12.   Limitation on Assignment; Successors and Permitted Assigns. None of the parties hereto may assign any of its respective rights or obligations under this Agreement. This Agreement is intended to bind and inure to the benefit of the parties and their respective successors, heirs, executors, administrators and representatives.
 
13.   Notice. Any notices or other communications to one or more Locked-Up Holders required or permitted hereunder shall be in writing, and shall be sufficiently given if made by hand delivery, by telecopier or registered or certified mail, postage prepaid, return receipt requested, at the names and addresses on the applicable signature page or pages hereto, with a copy to, Gibson, Dunn & Crutcher LLP, 3161 Michelson Drive, Irvine, California 92612, Attn: James J. Moloney, Esq. Any notice or communication to any party shall be deemed to have been given or made as of the date so delivered, if personally delivered; on the date actually received if sent by registered or certified mail, postage prepaid; and when receipt is acknowledged, if telecopied.
 
14.   No Agency or Advisory Relationship. Except as expressly provided herein, each Locked-Up Holder is acting independently of the others with respect to its investment in securities of Emmis and no Locked-Up Holder has the authority to represent or bind any other Locked-Up Holder. Each Locked-Up Holder (either itself or together with its investment manager) is a sophisticated financial investor that has conducted and will continue to conduct its own investigation into the affairs of Emmis as it may deem necessary for the purposes of its own investment, and no Locked-Up Holder is providing any other Locked-Up Holder with investment, tax, legal or other advice. No Locked-Up Holder is a fiduciary of any other Locked-Up Holder.
 
 
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15.   Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall constitute one and the same Agreement. Faxed or pdf signatures shall be valid and binding for all purposes.
 
16.   Coordination of Public Statements. Each Locked-Up Holder agrees that it shall, and shall cause its affiliates to, consult with the other Locked-Up Holders prior to making any public announcement concerning Emmis and/or its investment in Emmis and, where the Requisite Locked-Up Holders object to all or any part of a public announcement, not make such public announcement except to the extent it is believed in good faith, based on the advice of counsel, to be required by applicable law or regulation.
 
17.   Expenses. The Requisite Locked-Up Holders may from time to time agree in writing that certain expenses to be incurred in connection with their respective investments in the Preferred Shares shall be "Joint Expenses" for purposes of this Section 17. Unless otherwise agreed, any Joint Expenses will be for the ratable account of the Locked-Up Holders in accordance with the percentage of the Preferred Shares beneficially owned by them as of the date of the designation of such expenses as Joint Expenses (disregarding, for this purpose, any shares held by another Locked-Up Holder that may be deemed to be beneficially owned solely by virtue of the Locked-Up Holders being deemed a "group" within the meaning of Rule 13d-5(b) under the Exchange Act). Amounts incurred by a Locked-Up Holder with respect to Joint Expenses in excess of its ratable share will be reimbursed by the other Locked-Up Holders on demand upon presentation of appropriate supporting documentation. Other than Joint Expenses, each Locked-Up Holder shall bear its own costs and expenses in connection with this Agreement and its investment in Emmis.
 
18.   Liability. No Locked-Up Holder nor any of its affiliates, or any of their respective partners, members, employees, counsel, agents or representatives shall be liable to any other Locked-Up Holder or its affiliates, in each case for any loss, liability, damage or expense arising out of or in connection with this Agreement, any Schedule 13D or any Form 3, 4 or 5, or amendment thereto, filed by any Locked-Up Holder or its affiliates, or the actions or transactions contemplated hereby or thereby, except to the extent such loss, liability, damage or expense is caused by such party's actual and material breach of the express provisions of this Agreement, gross negligence, fraud, bad faith or willful misconduct.
 
19.   No Third Party Beneficiaries. Unless expressly stated herein, this Agreement shall be solely for the benefit of the parties hereto and no other person or entity.
 
20.   Specific Performance. It is understood and agreed by each of the parties hereto that money damages would not be a sufficient remedy for any breach of this Agreement by any party and each non-breaching party shall be entitled to specific performance and injunctive or other equitable relief as a remedy for any such breach.
 
21.   Further Acknowledgement. The parties to this Agreement agree and acknowledge that certain Locked-Up Holders are executing this Agreement as investment advisors for, and on behalf of, certain investment funds and institutional separate accounts. Notwithstanding the foregoing, by executing this Agreement, each such Locked-Up Holder executing this Agreement in such capacity further represents and warrants to the other Locked- Up Holders that (i) it has the requisite power and authority to agree to all of the matters set forth in this Agreement with respect to the Emmis securities such Locked-Up Holder beneficially owns in its capacity as investment advisor with discretionary authority, (ii) it has the full authority on behalf of all such funds and accounts to vote, transfer and hold all the Emmis securities such Locked-Up Holder beneficially owns, and (iii) it has all requisite power and authority to enter into this Agreement and to perform its respective obligations under, this Agreement, on behalf of each such fund.
 
 
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IN  WITNESS  WHEREOF, each  of  the  parties  hereto  has  caused  this  Agreement  to  be executed and delivered by its duly authorized officer as of the date first above written.
 
  LOCKED-UP HOLDER  
     
  Zazove Associates LLC  
       
 
By:
/s/ Steven M. Kleiman  
    Name: Steven M. Kleiman  
    Title:   Chief Operating Officer  
       
    Address: 1001 Tahoe Blvd. City/State/Zip: Incline Village, NV 89451 Country: USA  
       
    Telecopy: (847) 239-7101  
       
   
Preferred Shares Beneficially Owned by Such Locked-Up Holder: 473,153
  
       
    Common Shares Beneficially Owned by Such Locked-Up Holder: -0-  

 
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed and delivered by its duly authorized officer as of the date first above written.
 
  LOCKED-UP HOLDER  
     
  Corre Opportunities Fund, LP  
       
 
By:
/s/ John Barrett  
    Name: John Barrett  
    Title:   Managing Partner  
       
    Address: 1370 Avenue of the Americas, 29th Floor City/State/Zip: New York, NY 10019 Country: USA  
       
    Telecopy: (646) 863-7161  
       
    Preferred Shares Beneficially Owned by Such Locked-Up Holder: 159,090  
       
    Common Shares Beneficially Owned by Such Locked-Up Holder: -0-  
 
 
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed and delivered by its duly authorized officer as of the date first above written.
 
  LOCKED-UP HOLDER  
     
  DJD Group LLLP  
       
 
By:
/s/ Don DeFosset  
    Name: Don DeFosset  
    Title:   General Partner  
       
   
Address: 4221 W. Boy Scout Blvd. Suite 1000
City/State/Zip: Tampa, FL 33607
Country: USA
  
       
    Telecopy: (813) 902-9408  
       
    Preferred Shares Beneficially Owned by Such Locked-Up Holder: 76,810  
       
    Common Shares Beneficially Owned by Such Locked-Up Holder: -0-  
       
 
 
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed and delivered by its duly authorized officer as of the date first above written.
 
  LOCKED-UP HOLDER  
       
       
 
By:
/s/ Kevan A. Fight  
    Name: Kevan A. Fight  
    Title:   N/A  
       
    Address: 6787 Walter Waite Ct. City/State/Zip: Brecksville, Ohio 44141 Country: USA  
       
    Telecopy: (440) 570-0202  
       
    Preferred Shares Beneficially Owned by Such Locked-Up Holder: 57,750  
       
    Common Shares Beneficially Owned by Such Locked-Up Holder: -0-  
 
 
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ANNEX A


 
This Joinder to the Lock-Up Agreement, dated as of December____, 2011, by and among the Locked-Up Holders signatory thereto (the "Agreement"), is executed and delivered by________________ (the "Joining Party") as of_________________, 2011. Each capitalized term used herein but not otherwise defined shall have the meaning set forth in the Agreement.
 
1.  
Agreement to be Bound. The Joining Party hereby agrees to join and be bound by all of the terms of the Agreement. The Joining Party shall hereafter be deemed to be a "Locked-Up Holder" for all purposes under the Agreement.
 
2.  
Representations and Warranties. The Joining Party hereby makes, as of the date hereof, the representations and warranties of the Locked-Up Holders set forth in the Agreement in Sections 1 and 5 thereof.
 
3.  
Governing Law. This Joinder shall be governed by and construed in accordance with the internal laws of the State of New York, without regard to any conflicts of law provisions which would require the application of the law of any other jurisdiction.
 
 
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IN Witness Whereof, the Joining Party has caused this Joinder to be executed as of the date first written above.
 
  JOINING PARTY  
     
     
     
       
 
By:
   
    Name:  
    Title:  
       
  Address:    
  City/State/Zip:    
  C ountry:    
       
  Telecopy:    
       
  Preferred Shares Beneficially Owned by Such  
  Joining Party:    
       
  Common Shares Beneficially Owned by Such  
  Joining Party:    

 
 
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ANNEX B
 
OWNERSHIP CERTIFICATE
 
This Ownership Certificate, dated as of December____, 2011 is being delivered pursuant to Section 3 of the Lock-Up Agreement (the "Agreement"), dated as of December____, 2011, by and Among the Locked-Up Holders1 signatory thereto. The undersigned, on behalf of itself and its affiliates, certifies, represents and warrants that, as of the date hereof, it has acquired or transferred and is the beneficial owner of Preferred Shares and Common Shares of Emmis as follows.
 
 
Preferred Shares
Class A Common Stock
Class B Common Stock
Class C Common Stock
Previously Owned
        
Acquired
        
Transferred
        
Current Ownership
        
 
The undersigned, on behalf of itself and its affiliates, further certifies, represents and warrants that, as of the date hereof, it does not beneficially own any other securities of Emmis other than as set forth herein, and that it is not a party to any swaps or other derivative transactions relating to Preferred Shares or Common Shares of Emmis, except as disclosed on Schedule 1 hereto.
 
 
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______________
 
1  Each capitalized term used herein but not otherwise defined shall have the meaning set forth in the Agreement.
 
 
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IN WITNESS WHEREOF, the undersigned has caused this Ownership Certificate to be executed and delivered by its duly authorized officer as of the date first above written.
 
  LOCKED-UP HOLDER  
     
     
     
       
 
By:
   
    Name:  
    Title:  
       
  Address:    
  City/State/Zip:    
  Country:    
       
  Telecopy:    
 
 
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SCHEDULE 1
 
[NONE]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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