EMMIS COMMUNICATIONS CORP (Form: 10-Q, Received: 01/12/2012 06:04:07)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended November 30, 2011

EMMIS COMMUNICATIONS CORPORATION

(Exact name of registrant as specified in its charter)

INDIANA
(State of incorporation or organization)

0-23264
(Commission file number)

35-1542018
(I.R.S. Employer Identification No.)

ONE EMMIS PLAZA
40 MONUMENT CIRCLE, SUITE 700
INDIANAPOLIS, INDIANA 46204
(Address of principal executive offices)

(317) 266-0100
(Registrant’s Telephone Number,
Including Area Code)

NOT APPLICABLE
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” and “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer o	Accelerated filer o	Non-accelerated filer o	Smaller reporting company þ
		(Do not check if a smaller reporting company)

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No þ

The number of shares outstanding of each of Emmis Communications Corporation’s classes of common stock, as of January 4, 2012, was:


34,007,279 4,722,684 0		Shares of Class A Common Stock, $.01 Par Value Shares of Class B Common Stock, $.01 Par Value Shares of Class C Common Stock, $.01 Par Value

INDEX


	Page

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements		3

Condensed Consolidated Statements of Operations for the three-month and nine-month periods ended November 30, 2010 and 2011		3

Condensed Consolidated Balance Sheets as of February 28, 2011 and November 30, 2011		5

Condensed Consolidated Statement of Changes in Deficit for the nine-month period ended November 30, 2011		7

Condensed Consolidated Statements of Cash Flows for the nine-month periods ended November 30, 2010 and 2011		8

Notes to Condensed Consolidated Financial Statements		10

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		31

Item 3. Quantitative and Qualitative Disclosures about Market Risk		45

Item 4. Controls and Procedures		46

PART II — OTHER INFORMATION

Item 1. Legal Proceedings		46

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		47

Item 3. Defaults Upon Senior Securities		47

Item 6. Exhibits		47

Signatures		51

Exhibit 10.1
Exhibit 10.2
Exhibit 10.18
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

-2-

PART I — FINANCIAL INFORMATION


ITEM 1.		FINANCIAL STATEMENTS

EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)


	Three Months Ended						Nine Months Ended
	November 30,						November 30,
	2010			2011			2010			2011
NET REVENUES	$	66,322		$	59,319		$	193,240		$	185,086
OPERATING EXPENSES:
Station operating expenses excluding depreciation and amortization expense of $1,989, $1,342, $6,059 and $5,017, respectively		49,131			47,903			149,375			149,386
Corporate expenses excluding depreciation and amortization expense of $307, $409, $1,007 and $955, respectively		3,403			4,972			13,278			15,276
Depreciation and amortization		2,296			1,751			7,066			5,972
Loss on sale of assets		3			—			3			814

Total operating expenses		54,833			54,626			169,722			171,448

OPERATING INCOME		11,489			4,693			23,518			13,638

OTHER INCOME (EXPENSE):
Interest expense		(5,195	)		(6,257	)		(16,084	)		(21,681	)
Loss on debt extinguishment		—			(525	)		—			(2,003	)
Gain on sale of controlling interest in Merlin Media LLC		—			31,805			—			31,805
Other expense, net		(132	)		(394	)		(238	)		(52	)

Total other income (expense)		(5,327	)		24,629			(16,322	)		8,069


INCOME BEFORE INCOME TAXES AND DISCONTINUED OPERATIONS		6,162			29,322			7,196			21,707

PROVISION (BENEFIT) FOR INCOME TAXES		4,068			(27,477	)		4,316			(26,987	)


INCOME FROM CONTINUING OPERATIONS		2,094			56,799			2,880			48,694

(GAIN) LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX		34			(1,903	)		229			(4,693	)


CONSOLIDATED NET INCOME		2,060			58,702			2,651			53,387

NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS		1,288			1,069			3,346			3,813


NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY		772			57,633			(695	)		49,574

GAIN ON EXTINGUISHMENT OF PREFERRED STOCK		—			(55,835	)		—			(55,835	)

PREFERRED STOCK DIVIDENDS		2,446			2,603			7,226			7,689


NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	(1,674	)	$	110,865		$	(7,921	)	$	97,720

The accompanying notes are an integral part of these unaudited condensed consolidated statements.

-3-

EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)

(Unaudited)

(In thousands, except per share data)


	Three Months Ended					Nine Months Ended
	November 30,					November 30,
	2010			2011		2010			2011

Amounts attributable to common shareholders for basic earnings per share:
Continuing operations	$	(1,679	)	$	108,954	$	(8,008	)	$	92,970
Discontinued operations		5			1,911		87			4,750

Net income (loss) attributable to common shareholders	$	(1,674	)	$	110,865	$	(7,921	)	$	97,720


Amounts attributable to common shareholders for diluted earnings per share:
Continuing operations	$	(1,679	)	$	111,557	$	(8,008	)	$	100,659
Discontinued operations		5			1,911		87			4,750

Net income (loss) attributable to common shareholders	$	(1,674	)	$	113,468	$	(7,921	)	$	105,409


Basic net income (loss) per share attributable to common shareholders:
Continuing operations	$	(0.04	)	$	2.85	$	(0.21	)	$	2.43
Discontinued operations, net of tax		—			0.05		—			0.13

Net loss attributable to common shareholders	$	(0.04	)	$	2.90	$	(0.21	)	$	2.56


Basic weighted average common shares outstanding		37,844			38,219		37,802			38,210

Diluted net income (loss) per share attributable to common shareholders:
Continuing operations	$	(0.04	)	$	2.44	$	(0.21	)	$	2.19
Discontinued operations, net of tax		0.00			0.05		0.00			0.10

Net loss attributable to common shareholders	$	(0.04	)	$	2.49	$	(0.21	)	$	2.29


Diluted weighted average common shares outstanding		37,844			45,647		37,802			45,950

The accompanying notes are an integral part of these unaudited condensed consolidated statements.

-4-

EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)


			November 30,
	February 28,		2011
	2011		(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	6,068	$	9,882
Accounts receivable, net		38,930		37,805
Prepaid expenses		13,615		13,379
Other current assets		2,329		1,625
Current assets — discontinued operations		2,063		1,475

Total current assets		63,005		64,166

PROPERTY AND EQUIPMENT, NET		44,816		39,776
INTANGIBLE ASSETS (Note 3):
Indefinite-lived intangibles		328,796		213,009
Goodwill		24,175		24,175
Other intangibles, net		2,689		2,057

Total intangible assets		355,660		239,241

INVESTMENTS		2,814		17,463

OTHER ASSETS, NET		5,237		5,042

NONCURRENT ASSETS — DISCONTINUED OPERATIONS		945		18

Total assets	$	472,477	$	365,706

The accompanying notes are an integral part of these unaudited condensed consolidated statements.

-5-

EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
(In thousands, except share data)


				November 30,
	February 28,			2011
	2011			(Unaudited)

LIABILITIES AND DEFICIT
CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	9,815		$	9,782
Current maturities of long-term debt		3,293			11,985
Accrued salaries and commissions		9,757			8,889
Accrued interest		3,147			3,082
Deferred revenue		18,595			15,948
Other current liabilities		5,409			6,294
Current liabilities — discontinued operations		854			560

Total current liabilities		50,870			56,540

LONG-TERM DEBT, NET OF CURRENT MATURITIES		327,704			224,991

OTHER NONCURRENT LIABILITIES		14,018			10,467

DEFERRED INCOME TAXES		81,411			52,925


Total liabilities		474,003			344,923


COMMITMENTS AND CONTINGENCIES

SERIES A CUMULATIVE CONVERTIBLE PREFERRED STOCK, $0.01 PAR VALUE; $50.00 LIQUIDATION PREFERENCE; AUTHORIZED 2,875,000 SHARES; ISSUED AND OUTSTANDING 2,809,170 SHARES AT FEBRUARY 28, 2011 AND 2,612,420 SHARES AT NOVEMBER 30, 2011. EMMIS HAS OBTAINED RIGHTS IN 1,484,679 OF THE SHARES OUTSTANDING AS OF NOVEMBER 30, 2011. SEE NOTE 11.		140,459			56,387

SHAREHOLDERS’ DEFICIT:
Class A common stock, $.01 par value; authorized 170,000,000 shares; issued and outstanding 33,499,770 shares at February 28, 2011 and 33,503,666 shares at November 30, 2011		335			335
Class B common stock, $.01 par value; authorized 30,000,000 shares; issued and outstanding 4,722,684 shares at February 28, 2011 and November 30, 2011, respectively		47			47
Additional paid-in capital		528,786			529,440
Accumulated deficit		(720,693	)		(615,284	)
Accumulated other comprehensive income		1,776			1,645

Total shareholders’ deficit		(189,749	)		(83,817	)

NONCONTROLLING INTERESTS		47,764			48,213


Total deficit		(141,985	)		(35,604	)


Total liabilities and deficit	$	472,477		$	365,706

The accompanying notes are an integral part of these unaudited condensed consolidated statements.

-6-

EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN DEFICIT

(Unaudited)

(In thousands, except share data)


															Accumulated
	Class A					Class B				Additional					Other
	Common Stock					Common Stock				Paid-in		Accumulated			Comprehensive			Noncontrolling			Total
	Shares			Amount		Shares		Amount		Capital		Deficit			Income			Interests			Deficit

BALANCE, FEBRUARY 28, 2011		33,499,770		$	335		4,722,684	$	47	$	528,786	$	(720,693	)	$	1,776		$	47,764		$	(141,985	)

Issuance of Common Stock to employees and officers and related income tax benefits		(6,104	)								651											651
Exercise of stock options and related income tax benefits		10,000									3											3
Acquisition of additional controlling interests																			(246	)		(246	)
Payments of dividends and distributions to noncontrolling interests																			(3,085	)		(3,085	)
Preferred stock purchase transactions													55,835									55,835

Comprehensive Income:
Net income													49,574						3,813
Change in value of derivative instrument and related income tax effects																(489	)
Cumulative translation adjustment																358			(33	)
Total comprehensive income		—			—		—		—		—		—			—			—			53,223

BALANCE, NOVEMBER 30, 2011		33,503,666		$	335		4,722,684	$	47	$	529,440	$	(615,284	)	$	1,645		$	48,213		$	(35,604	)

The accompanying notes are an integral part of these unaudited condensed consolidated statements.

-7-

EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)


	Nine Months Ended November 30,
	2010			2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Consolidated net income	$	2,651		$	53,387
Adjustments to reconcile consolidated net income to net cash provided by (used in) operating activities —
Discontinued operations		229			(4,693	)
Gain on sale of controlling interest in Merlin Media LLC		—			(31,805	)
Depreciation and amortization		7,956			6,511
Noncash accretion of debt instruments		—			2,652
Loss on debt extinguishment		—			2,003
Provision for bad debts		568			339
Provision for deferred income taxes		5,003			(29,273	)
Noncash compensation		1,396			777
(Gain) loss on equity method investments, net		(25	)		312
Loss on sale of assets		3			814
Changes in assets and liabilities —
Accounts receivable		(7,846	)		845
Prepaid expenses and other current assets		2,404			290
Other assets		(94	)		(374	)
Accounts payable and accrued liabilities		1,971			(1,045	)
Deferred revenue		(6,288	)		(2,424	)
Income taxes		(237	)		2,402
Other liabilities		(1,445	)		(1,099	)
Net cash used in operating activities — discontinued operations		1,591			116


Net cash provided by (used in) operating activities		7,837			(265	)


CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(2,380	)		(3,259	)
Sale of controlling interest in Merlin Media LLC		—			130,000
Proceeds from the sale of property and equipment		—			160
Distributions from and proceeds from sale of equity investments		25			1,293
Net cash provided by (used in) investing activities — discontinued operations		(163	)		5,551


Net cash provided by (used in) investing activities		(2,518	)		133,745

The accompanying notes are an integral part of these unaudited condensed consolidated statements.

-8-

EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(Unaudited)
(Dollars in thousands)


	Nine Months Ended November 30,
	2010			2011
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on long-term debt		(12,537	)		(139,655	)
Proceeds from long-term debt		16,000			45,493
Acquisition of rights in and purchase of preferred stock		—			(28,237	)
Debt-related costs		—			(4,163	)
Payments of dividends and distributions to noncontrolling interests		(2,454	)		(3,085	)
Settlement of tax withholding obligations on stock issued to employees		(82	)		(74	)
Other		—			3
Net cash used in financing activities — discontinued operations		(386	)		—


Net cash provided by (used in) financing activities		541			(129,718	)

Effect of exchange rates on cash and cash equivalents		(77	)		52


INCREASE IN CASH AND CASH EQUIVALENTS		5,783			3,814

CASH AND CASH EQUIVALENTS:
Beginning of period		6,814			6,068


End of period	$	12,597		$	9,882


SUPPLEMENTAL DISCLOSURES:
Cash paid for -
Interest	$	16,372		$	20,742
Income taxes, net of refunds		640			1,277

Noncash financing transactions-
Value of stock issued to employees under stock compensation program and to satisfy accrued incentives		1,368			725

The accompanying notes are an integral part of these unaudited condensed consolidated statements.

-9-

EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLARS IN THOUSANDS UNLESS INDICATED OTHERWISE, EXCEPT SHARE DATA)

November 30, 2011

(Unaudited)

Note 1. Summary of Significant Accounting Policies

Preparation of Interim Financial Statements

Pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), the condensed consolidated interim financial statements included herein have been prepared, without audit, by Emmis Communications Corporation (“ECC”) and its subsidiaries (collectively, “our,” “us,” “we,” “Emmis” or the “Company”). As permitted under the applicable rules and regulations of the SEC, certain information and footnote disclosures normally included in financial statements prepared in conformity with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations; however, Emmis believes that the disclosures are adequate to make the information presented not misleading. The condensed consolidated financial statements included herein should be read in conjunction with the consolidated financial statements and the notes thereto included in the Annual Report for Emmis filed on Form 10-K for the year ended February 28, 2011. The Company’s results are subject to seasonal fluctuations. Therefore, results shown on an interim basis are not necessarily indicative of results for a full year.

In the opinion of Emmis, the accompanying condensed consolidated interim financial statements contain all material adjustments (consisting only of normal recurring adjustments) necessary to present fairly the consolidated financial position of Emmis at November 30, 2011, the results of its operations for the three-month and nine-month periods ended November 30, 2010 and 2011 and cash flows for the nine-month periods ended November 30, 2010 and 2011.

Basic and Diluted Net Income (Loss) Per Common Share

Basic net income (loss) per common share is computed by dividing net income (loss) attributable to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted net income (loss) per common share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted. Potentially dilutive securities at November 30, 2010 and 2011 consisted of stock options, restricted stock awards and the 6.25% Series A cumulative convertible preferred stock. Each share of our outstanding preferred stock in which the Company has not obtained rights may, at the election of the preferred holder, convert into 2.44 shares of common stock. Conversion of these shares of preferred stock into common stock would be dilutive for the three-month and nine-month periods ended November 30, 2011. As such, the preferred dividends of $2,603 and $7,689 have been added to net income attributable to common shareholders for purposes of calculating diluted net income per common share for the three-month and nine-month periods ended November 30, 2011, respectively. Additionally, the weighted-average shares outstanding were increased by 6,556,510 and 6,755,809 for the assumed conversion of the preferred stock for the three-month and nine-month periods ended November 30, 2011, respectively. Shares excluded from the calculation as the effect of their conversion into shares of our common stock would be antidilutive were as follows:


	Three Months Ended November 30,				Nine Months Ended November 30,
	2010		2011		2010		2011
	(shares in 000’s)				(shares in 000’s)

6.25% Series A cumulative convertible preferred stock		6,854		—		6,854		—
Stock options and restricted stock awards		7,999		6,872		8,172		6,597


Antidilutive common share equivalents		14,853		6,872		15,026		6,597

-10-

Discontinued Operation — Slager

On October 28, 2009, the Hungarian National Radio and Television Board (ORTT) announced that it was awarding to another bidder the national radio license then held by our majority-owned subsidiary, Slager. Slager ceased broadcasting effective November 19, 2009. The Company believes that the awarding of the license to another bidder was unlawful. In October 2011, Emmis filed for arbitration with the International Centre for Settlement of Investment Disputes seeking resolution of its claim. In preparation for the filing of the claim, in July 2011, Emmis acquired an additional 25% interest in Slager held by a minority shareholder for a cash purchase price of $0.2 million, increasing its ownership to 85%. This acquisition allows Emmis to assert a consolidated claim.

Slager had historically been included in the radio segment. The following table summarizes certain operating results for Slager for all periods presented:


	Three months ended November 30,						Nine months ended November 30,
	2010			2011			2010			2011

Net revenues	$	10		$	—		$	30		$	7
Station operating expenses, excluding depreciation and amortization expense		127			(12	)		703			233
Other income (expense)		22			(184	)		281			(36	)
Loss before income taxes		(95	)		(100	)		(392	)		(190	)
Loss attributable to minority interests		(39	)		(8	)		(316	)		(57	)

Discontinued Operation — Flint Peak Tower Site

On April 6, 2011, Emmis sold land, towers and other equipment at its Glendale, CA tower site (the “Flint Peak Tower Site”) to Richland Towers Management Flint, Inc. for $6.0 million in cash. In connection with the sale, Emmis recorded a gain on sale of assets of approximately $4.9 million. Net proceeds from the sale were used to repay amounts outstanding under the credit facility.

The operations of the Flint Peak Tower Site had historically been included in the radio segment. The following table summarizes certain operating results for the Flint Peak Tower Site for all periods presented:


	Three months ended November 30,					Nine months ended November 30,
	2010		2011			2010		2011

Net revenues	$	143	$	—		$	411	$	59
Station operating expenses, excluding depreciation and amortization expense		25		—			87		51
Depreciation and amortization		17		—			51		7
Gain on sale of assets		—		—			—		4,882
Income (loss) before income taxes		99		—			271		4,883
Provision for income taxes		40		(2,003	)		110		—

-11-

Summary of Assets and Liabilities of Discontinued Operations:


	As of February 28, 2011				As of November 30, 2011
			Flint Peak Tower				Flint Peak Tower
	Slager		Site and Other		Slager		Site and Other
Current assets:
Cash and cash equivalents	$	1,658	$	—	$	1,110	$	—
Accounts receivable, net		63		—		—		—
Other		342		—		365		—

Total current assets		2,063		—		1,475		—


Noncurrent assets:
Property and equipment, net		—		925		—		—
Other noncurrent assets		20		—		18		—

Total noncurrent assets		20		925		18		—


Total assets	$	2,083	$	925	$	1,493	$	—


Current liabilities:
Accounts payable and accrued expenses	$	723	$	111	$	466	$	94
Deferred revenue		—		20		—		—

Total current liabilities	$	723	$	131	$	466	$	94

Local Programming and Marketing Agreement Fees

The Company from time to time enters into local programming and marketing agreements (“LMAs”) in connection with acquisitions or dispositions of radio stations, pending regulatory approval of transfer of the FCC licenses. In such cases where the Company enters into an LMA in connection with a disposition, the Company generally receives specified periodic payments in exchange for the counterparty receiving the right to program and sell advertising for a specified portion of the station’s inventory of broadcast time. Nevertheless, as the holder of the FCC license, the Company retains control and responsibility for the operation of the station, including responsibility over all programming broadcast on the station.

On June 20, 2011, Emmis entered into an LMA with LMA Merlin Media LLC for WRXP-FM in New York, WKQX-FM in Chicago and WLUP-FM in Chicago. The LMA for these stations started on July 15, 2011 and terminated upon their sale on September 1, 2011 (see Note 9 for more discussion of the sale of the stations). Emmis continues to operate KXOS-FM pursuant to an LMA with Grupo Radio Centro, S.A.B. de C.V, a Mexican broadcasting company.

LMA fees, recorded as net revenues in the accompanying condensed consolidated statements of operations, for the three-month and nine-month periods ended November 30, 2010 and 2011 were as follows:


	Three months ended November 30,				Nine months ended November 30,
	2010		2011		2010		2011

Grupo Radio Centro LMA	$	1,750	$	1,750	$	5,250	$	5,250
Merlin Media LMA		—		—		—		310

Total		1,750		1,750		5,250		5,560

-12-

Investments

Emmis has various investments, the carrying values of which are summarized in the following table:


	February 28,2011		November 30, 2011
Investment in common stock of Merlin Media LLC	$	—	$	5,031
Broadcast tower site investment — New Jersey		1,150		—
Broadcast tower site investment — Texas		1,351		1,470
Other equity method investments		124		—

Total equity method investments		2,625		6,501

Cost method investment in preferred stock of Merlin Media LLC		—		10,773
Available-for-sale investment		189		189


Total investments		2,814		17,463

Equity method investments

In connection with the sale of its controlling interest in Merlin Media LLC on September 1, 2011, the Company retained a 20.6% common equity interest in Merlin Media LLC, the fair value of which was $5.6 million as of September 1, 2011. See Note 9 for more discussion of the sale of a controlling interest in Merlin Media LLC. Additionally, Emmis, through its partnership in the Austin market, has a 25% ownership interest in a company that operates a tower site in Austin, Texas.

Cost method investment

In connection with the sale of its controlling interest in Merlin Media LLC on September 1, 2011, the Company retained a preferred equity interest in Merlin Media LLC with a par value of $28.7 million. The fair value of this preferred equity interest as of September 1, 2011, was approximately $10.8 million. As the preferred equity interest in Merlin Media LLC is non-redeemable and does not have a readily determinable fair value, as defined by accounting standards, this investment is accounted for under the cost method. See Note 9 for more discussion of the sale of a controlling interest in Merlin Media LLC.

Available for sale investment

Emmis has made investments totaling $0.5 million in a company that specializes in digital radio transmission technology. Subsequent to an impairment charge in a prior period, Emmis now carries this investment at its fair value of $0.2 million.

Although no unrealized or realized gains or losses have been recognized on our available-for-sale investments, unrealized gains and losses would be reported in other comprehensive income until realized, at which point they would be recognized in the condensed consolidated statements of operations. If the Company determines that the value of the investment is other than temporarily impaired, the Company will recognize, through the statements of operations, a loss on the investment.

-13-

Note 2. Share Based Payments

Stock Option Awards

The Company has granted options to purchase its common stock to employees and directors of the Company under various stock option plans at no less than the fair market value of the underlying stock on the date of grant. These options are granted for a term not exceeding 10 years and are forfeited, except in certain circumstances, in the event the employee or director terminates his or her employment or relationship with the Company. Generally, these options either vest annually over three years (one-third each year for three years), or cliff vest at the end of three years. The Company issues new shares upon the exercise of stock options.

The amounts recorded as share based compensation expense primarily relate to stock option and restricted stock grants, but may also include restricted common stock issued under employment agreements, common stock issued to employees and directors in lieu of cash payments, and Company matches of common stock in our 401(k) plan.

The fair value of each option awarded is estimated on the date of grant using a Black-Scholes option-pricing model and expensed on a straight-line basis over the vesting period. Expected volatilities are based on historical volatility of the Company’s stock. The Company uses historical data to estimate option exercises and employee terminations within the valuation model. The Company includes estimated forfeitures in its compensation cost and updates the estimated forfeiture rate through the final vesting date of awards. The Company uses the simplified method to estimate the expected term for all options granted. Although the Company has granted options for many years, the historical exercise activity of our options was impacted by the way the Company processed the equitable adjustment of our November 2006 special dividend. Consequently, the Company believes that reliable data regarding exercise behavior only exists for the period subsequent to November 2006, which is insufficient experience upon which to estimate the expected term. However, beginning in fiscal 2013, the Company anticipates having sufficient reliable data regarding its employees’ exercise behavior to cease using the simplified method. The risk-free interest rate for periods within the life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The following assumptions were used to calculate the fair value of the Company’s options on the date of grant during the nine months ended November 30, 2010 and 2011:


	Nine Months Ended November 30,
	2010	2011
Risk-Free Interest Rate:	2% - 2.9%	1.2% - 2.5%
Expected Dividend Yield:	0%	0%
Expected Life (Years):	6.5 - 6.7	6.0
Expected Volatility:	98.9% - 101.5%	110.2% - 111.3%

-14-

The following table presents a summary of the Company’s stock options outstanding at November 30, 2011, and stock option activity during the nine months ended November 30, 2011 (“Price” reflects the weighted average exercise price per share):


					Weighted Average		Aggregate
					Remaining		Intrinsic
	Options		Price		Contractual Term		Value
Outstanding, beginning of period		8,515,491	$	9.26
Granted		1,058,536		1.02
Exercised (1)		10,000		0.30
Forfeited		38,817		0.86
Expired		992,844		18.10

Outstanding, end of period		8,532,366		7.26		5.4	$	906
Exercisable, end of period		5,044,555		11.75		3.4	$	115


(1)		The Company did not record an income tax benefit related to option exercises in the nine months ended November 30, 2011. No options were exercised during the nine months ended November 30, 2010.

The weighted average grant date fair value of options granted during the nine months ended November 30, 2010 and 2011, was $0.67 and $0.85, respectively.

A summary of the Company’s nonvested options at November 30, 2011, and changes during the nine months ended November 30, 2011, is presented below:


			Weighted Average
			Grant Date
	Options		Fair Value
Nonvested, beginning of period		2,946,661	$	0.50
Granted		1,058,536		0.85
Vested		478,569		0.74
Forfeited		38,817		0.67

Nonvested, end of period		3,487,811		0.57

There were 3.6 million shares available for future grants under the Company’s various equity plans at November 30, 2011. The vesting dates of outstanding options at November 30, 2011 range from December 2011 to July 2014, and expiration dates range from March 2012 to September 2021.

Restricted Stock Awards

The Company grants restricted stock awards to employees and directors. These awards generally vest at the end of the second or third year after grant and are forfeited, except in certain circumstances, in the event the employee terminates his or her employment or relationship with the Company prior to vesting. Restricted stock award grants prior to fiscal 2011 were granted out of the Company’s 2004 Equity Compensation Plan and restricted stock award grants since March 1, 2010 have been granted out of the Company’s 2010 Equity Compensation Plan. The Company may also award, out of the Company’s 2010 Equity Compensation Plan, stock to settle certain bonuses and other compensation that otherwise would be paid in cash. Any restrictions on these shares are immediately lapsed on the grant date.

-15-

The following table presents a summary of the Company’s restricted stock grants outstanding at November 30, 2011, and restricted stock activity during the nine months ended November 30, 2011 (“Price” reflects the weighted average share price at the date of grant):


	Awards		Price
Grants outstanding, beginning of year		174,956	$	3.37
Granted		17,560		1.03
Vested (restriction lapsed)		166,176		3.51
Forfeited		2,195		1.03

Grants outstanding, end of year		24,145		0.90

The total grant date fair value of shares vested during the nine months ended November 30, 2010 and 2011 was $2.0 million and $0.6 million, respectively.

Recognized Non-Cash Compensation Expense

The following table summarizes stock-based compensation expense and related tax benefits recognized by the Company in the three and nine months ended November 30, 2010 and 2011:


	Three Months				Nine Months
	Ended November 30,				Ended November 30,
	2010		2011		2010		2011

Station operating expenses	$	89	$	45	$	607	$	173
Corporate expenses		198		217		789		604

Stock-based compensation expense included in operating expenses		287		262		1,396		777
Tax benefit		—		—		—		—

Recognized stock-based compensation expense, net of tax	$	287	$	262	$	1,396	$	777

As of November 30, 2011, there was $0.8 million of unrecognized compensation cost, net of estimated forfeitures, related to nonvested share-based compensation arrangements. The cost is expected to be recognized over a weighted average period of approximately 1.4 years.

Note 3. Intangible Assets and Goodwill

Valuation of Indefinite-lived Broadcasting Licenses

In accordance with Accounting Standards Codification (“ASC”) Topic 350, Intangibles — Goodwill and Other, the Company’s Federal Communications Commission (“FCC”) licenses are considered indefinite-lived intangibles. These assets, which the Company determined were its only indefinite-lived intangibles, are not subject to amortization, but are tested for impairment at least annually as discussed below.

The carrying amounts of the Company’s FCC licenses were $328.8 million as of February 28, 2011 and $213.0 million as of November 30, 2011. The decline in FCC licenses is attributable to the sale of a controlling interest in Merlin Media LLC as discussed in Note 9. These amounts are entirely attributable to our radio division. The Company generally performs its annual impairment test of indefinite-lived intangibles as of December 1 of each year. When indicators of impairment are present, the Company will perform an interim impairment test. During the quarter ended November 30, 2011, no new or additional impairment indicators emerged; hence, no interim impairment testing was warranted. These impairment tests may result in impairment charges in future periods.

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Fair value of our FCC licenses is estimated to be the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. To determine the fair value of our FCC licenses, the Company uses an income valuation method when it performs its impairment tests. Under this method, the Company projects cash flows that would be generated by each of its units of accounting assuming the unit of accounting was commencing operations in its respective market at the beginning of the valuation period. This cash flow stream is discounted to arrive at a value for the FCC license. The Company assumes the competitive situation that exists in each market remains unchanged, with the exception that its unit of accounting commenced operations at the beginning of the valuation period. In doing so, the Company extracts the value of going concern and any other assets acquired, and strictly values the FCC license. Major assumptions involved in this analysis include market revenue, market revenue growth rates, unit of accounting audience share, unit of accounting revenue share and discount rate. Each of these assumptions may change in the future based upon changes in general economic conditions, audience behavior, consummated transactions, and numerous other variables that may be beyond our control. When evaluating our radio broadcasting licenses for impairment, the testing is performed at the unit of accounting level as determined by ASC Topic 350-30-35. In our case, radio stations in a geographic market cluster are considered a single unit of accounting, provided that they are not being operated under a Local Marketing Agreement by another broadcaster.

Valuation of Goodwill

ASC Topic 350-20-35 requires the Company to test goodwill for impairment at least annually using a two-step process. The first step is a screen for potential impairment, while the second step measures the amount of impairment. The Company conducts the two-step impairment test on December 1 of each fiscal year, unless indications of impairment exist during an interim period. During the quarter ended November 30, 2011, no new or additional impairment indicators emerged; hence, no interim impairment testing was warranted. When assessing its goodwill for impairment, the Company uses an enterprise valuation approach to determine the fair value of each of the Company’s reporting units (radio stations grouped by market and magazines on an individual basis). Management determines enterprise value for each of its reporting units by multiplying the two-year average station operating income generated by each reporting unit (current year based on actual results and the next year based on budgeted results) by an estimated market multiple. The Company uses a blended station operating income trading multiple of publicly traded radio operators as a benchmark for the multiple it applies to its radio reporting units. There are no publicly traded publishing companies that are focused predominantly on city and regional magazines as is our publishing segment. Therefore, the market multiple used as a benchmark for our publishing reporting units has been based on recently completed transactions within the city and regional magazine industry or analyst reports that include valuations of magazine divisions within publicly traded media conglomerates. Management believes this methodology for valuing radio and publishing properties is a common approach and believes that the multiples used in the valuation are reasonable given our peer comparisons and recent market transactions. To corroborate the step-one reporting unit fair values determined using the market approach described above, management also uses an income approach, which is a discounted cash flow method to determine the fair value of the reporting unit.

This enterprise valuation is compared to the carrying value of the reporting unit for the first step of the goodwill impairment test. If the reporting unit exhibits impairment, the Company proceeds to the second step of the goodwill impairment test. For its step-two testing, the enterprise value is allocated among the tangible assets, indefinite-lived intangible assets (FCC licenses valued using a direct-method valuation approach) and unrecognized intangible assets, such as customer lists, with the residual amount representing the implied fair value of the goodwill. To the extent the carrying amount of the goodwill exceeds the implied fair value of the goodwill, the difference is recorded as an impairment charge in the statement of operations.

As of February 28, 2011 and November 30, 2011, the carrying amount of the Company’s goodwill was $24.2 million. As of February 28, 2011 and November 30, 2011 approximately $6.3 million and $17.9 million of our goodwill was attributable to our radio and publishing divisions, respectively.

-17-

Definite-lived intangibles

The Company’s definite-lived intangible assets consist primarily of foreign broadcasting licenses, trademarks, and favorable office leases, all of which are amortized over the period of time the assets are expected to contribute directly or indirectly to the Company’s future cash flows. The following table presents the weighted-average useful life, gross carrying amount and accumulated amortization for each major class of definite-lived intangible assets at February 28, 2011 and November 30, 2011:


		February 28, 2011						November 30, 2011
	Weighted Average	Gross				Net		Gross				Net
	Remaining Useful Life	Carrying		Accumulated		Carrying		Carrying		Accumulated		Carrying
	(in years)	Amount		Amortization		Amount		Amount		Amortization		Amount
Foreign Broadcasting Licenses	9.3	$	8,716	$	6,331	$	2,385	$	8,716	$	6,929	$	1,787
Trademarks	13.3		749		478		271		749		495		254
Favorable Office Leases	0.8		688		655		33		688		672		16

TOTAL		$	10,153	$	7,464	$	2,689	$	10,153	$	8,096	$	2,057

Total amortization expense from definite-lived intangibles for the three—month and nine-month periods ended November 30, 2010 was $0.3 million and $0.9 million, respectively. Total amortization expense from definite-lived intangibles for the three-month and nine—month periods ended November 30, 2011 was $0.1 million and $0.6 million, respectively. The following table presents the Company’s estimate of amortization expense for each of the five succeeding fiscal years for definite-lived intangibles:


YEAR ENDED FEBRUARY 28 (29),
2012	$	690
2013		225
2014		211
2015		209
2016		209

In May 2011, Emmis was granted an extension of its broadcasting license in Slovakia, which now expires in February 2021. Emmis was also awarded an option for an additional eight year extension. The remaining carrying value of the broadcasting license in Slovakia is being amortized over the initial eight-year term that expires in February 2021.

Note 4. Liquidity

The Company continually projects its anticipated cash needs, which include its operating needs, capital needs, principal and interest payments on its indebtedness and preferred stock dividends. As of the filing of this Form 10-Q, management believes the Company can meet its liquidity needs through the end of fiscal year 2012 with cash and cash equivalents on hand, projected cash flows from operations and, to the extent necessary, through its borrowing capacity under the Credit Agreement, which was approximately $9.4 million at November 30, 2011. Based on these projections, management also believes the Company will be in compliance with its debt covenants through the end of fiscal year 2012.

-18-

Borrowings under the Credit Agreement depend upon our continued compliance with certain operating covenants and financial ratios. The Company must maintain a minimum amount of trailing twelve-month Consolidated EBITDA (as defined in the Credit Agreement) and at least $5 million in Liquidity (as defined in the Credit Agreement). The Credit Agreement also contains certain other non-financial covenants. We were in compliance with all financial and non-financial covenants as of November 30, 2011. Our Liquidity (as defined in the Credit Agreement) as of November 30, 2011 was $14.2 million. Our minimum Consolidated EBITDA (as defined in the Credit Agreement) requirement and actual amount as of November 30, 2011 was as follows:


	As of November 30, 2011
			Actual Trailing
	Covenant		Twelve-Month
	Requirement		Consolidated EBITDA ¹
Trailing Twelve-month Consolidated EBITDA ¹	$	25,000	$	28,893

Note 5. Derivative Instruments and Hedging Activities

As of November 30, 2011, the Company has no outstanding interest rate derivatives. The discussion below describes the Company’s interest rate derivatives that matured during the periods presented.

Risk Management Objective of Using Derivatives

The Company is exposed to certain risk arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its debt funding and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage interest rate exposure with the following objectives:

•

manage current and forecasted interest rate risk while maintaining optimal financial flexibility and solvency

•

proactively manage the Company’s cost of capital to ensure the Company can effectively manage operations and execute its business strategy, thereby maintaining a competitive advantage and enhancing shareholder value

•

comply with covenant requirements in the Company’s Credit Agreement

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives were to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily used interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Under the terms of its Credit Agreement, the Company was required to fix or cap the interest rate on at least 30% of its debt outstanding (as defined in the Credit Agreement) for the three-year period ending November 2, 2009.

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income (loss) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The Company’s interest rate derivatives were used to hedge the variable cash flows associated with existing variable-rate debt. The ineffective portion of the change in fair value of the derivatives was recognized directly in earnings. The Company did not record any hedge ineffectiveness in earnings during the three or nine months ended November 30, 2010 and 2011. Amounts reported in accumulated other comprehensive income related to derivatives were reclassified to interest expense as interest payments were made on the Company’s variable-rate debt.


1		As defined in the Credit Agreement

-19-

In March 2007, the Company entered into a three-year interest rate exchange agreement (a “Swap”), whereby the Company paid a fixed rate of 4.795% on $165 million of notional principal to Bank of America, and Bank of America paid to the Company a variable rate on the same amount of notional principal based on the three-month London Interbank Offered Rate (“LIBOR”). This swap matured in March 2010, at which time the Company recognized a $2.0 million tax benefit that had previously been recorded in accumulated other comprehensive income. In March 2008, the Company entered into an additional three-year Swap, whereby the Company paid a fixed rate of 2.964% on $100 million of notional principal to Deutsche Bank, and Deutsche Bank paid to the Company a variable rate on the same amount of notional principal based on the three-month LIBOR. In January 2009, the Company entered into an additional two-year Swap effective as of March 28, 2009, whereby the Company paid a fixed rate of 1.771% on $75 million of notional principal to Deutsche Bank, and Deutsche Bank paid to the Company a variable rate on the same amount of notional principal based on the three-month LIBOR. The two swaps with Deutsche Bank matured in March 2011, at which time the Company recognized a $0.8 million tax benefit that had previously been recorded in accumulated other comprehensive income.

The Company does not use derivatives for trading or speculative purposes.

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the balance sheet as of February 28, 2011. The accumulated other comprehensive income balance related to our derivative instruments at February 28, 2011 was $489. The fair values of the derivative instruments was estimated by obtaining quotations from the financial institution that were the counterparty to the instruments. The fair value was an estimate of the net amount that the Company would have been required to pay on February 28, 2011, if the agreements were transferred to other parties or cancelled by the Company, as further adjusted by a credit adjustment required by ASC Topic 820, Fair Value Measurements and Disclosures, discussed below. As discussed above, the derivative instruments matured in March 2011, thus no amounts related to derivative instruments remain on the condensed consolidated balance sheets as of November 30, 2011.

Tabular Disclosure of Fair Values of Derivative Instruments

Asset Derivatives

Liability Derivatives

As of February 28, 2011

As of November 30, 2011

As of February 28, 2011

As of November 30, 2011

Balance Sheet

Location

Fair Value

Location

Fair Value

Location

Fair Value

Location

Fair Value

Derivatives designated as hedging instruments

Interest Rate Swap Agreements (Current Portion)

N/A

—

N/A

—

Other Current Liabilities

297

N/A

—

Total derivatives designated as hedging instruments

—

297

—

The table below presents the effect of the Company’s derivative financial instruments on the condensed consolidated statements of operations for the three months and nine months ended November 30, 2010 and 2011.


	For the Three Months Ended November 30,
												Location of Gain or (Loss)		Amount of Gain or (Loss)
						Location of Gain or						Recognized in Income on		Recognized in Income on Derivative
	Amount of Gain or (Loss)					(Loss) Reclassified	Amount of Gain or (Loss)					Derivative (Ineffective		(Ineffective Portion and Amount
	Recognized in OCI on Derivative					from Accumulated	Reclassified from Accumulated OCI					Portion and Amount		Excluded from Effectiveness
Derivatives in Cash Flow	(Effective Portion)					OCI into Income	into Income (Effective Portion)					Excluded from		Testing)
Hedging Relationships	2010			2011		(Effective Portion)	2010			2011		Effectiveness Testing)		2010		2011

Interest Rate Swap Agreements	$	(80	)	$	—	Interest expense	$	(922	)	$	—		N/A	$	—	$	—


Total	$	(80	)	$	—		$	(922	)	$	—			$	—	$	—

-20-


	For the Nine Months Ended November 30,
													Location of Gain or (Loss)		Amount of Gain or (Loss)
						Location of Gain or							Recognized in Income on		Recognized in Income on Derivative
	Amount of Gain or (Loss)					(Loss) Reclassified	Amount of Gain or (Loss)						Derivative (Ineffective		(Ineffective Portion and Amount
	Recognized in OCI on Derivative					from Accumulated	Reclassified from Accumulated OCI						Portion and Amount		Excluded from Effectiveness
Derivatives in Cash Flow	(Effective Portion)					OCI into Income	into Income (Effective Portion)						Excluded from		Testing)
Hedging Relationships	2010			2011		(Effective Portion)	2010			2011			Effectiveness Testing)		2010		2011

Interest Rate Swap Agreements	$	(475	)	$	—	Interest expense	$	(3,392	)	$	(297	)		N/A	$	—	$	—


Total	$	(475	)	$	—		$	(3,392	)	$	(297	)			$	—	$	—

Credit-risk-related Contingent Features

The Company managed its counterparty risk by entering into derivative instruments with global financial institutions where it believed the risk of credit loss resulting from nonperformance by the counterparty is low. The Company’s counterparties on its interest rate swaps were Deutsche Bank and Bank of America.

In accordance with ASC Topic 820, the Company made Credit Value Adjustments (CVAs) to adjust the valuation of derivatives to account for our own credit risk with respect to all derivative liability positions. The CVA was accounted for as a decrease to the derivative position with the corresponding increase or decrease reflected in accumulated other comprehensive income (loss) for derivatives designated as cash flow hedges. The CVA also accounted for nonperformance risk of our counterparty in the fair value measurement of all derivative asset positions, when appropriate. As of February 28, 2011 , the fair value of our derivative instruments was net of less than $0.1 million in CVAs.

The Company did not post any collateral related to the interest rate swap agreements.

Note 6. Fair Value Measurements

As defined in ASC Topic 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated or generally unobservable. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. ASC Topic 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).

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Recurring Fair Value Measurements

The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of February 28, 2011 and November 30, 2011. The financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.


	As of November 30, 2011
	Level 1		Level 2		Level 3
	Quoted Prices
	in Active		Significant
	Markets for		Other		Significant
	Identical Assets		Observable		Unobservable
	or Liabilities		Inputs		Inputs		Total
Available for sale securities	$	—	$	—	$	189	$	189

Total assets measured at fair value on a recurring basis	$	—	$	—	$	189	$	189


	As of February 28, 2011
	Level 1		Level 2		Level 3
	Quoted Prices
	in Active		Significant
	Markets for		Other		Significant
	Identical Assets		Observable		Unobservable
	or Liabilities		Inputs		Inputs		Total

Available for sale securities	$	—	$	—	$	189	$	189

Total assets measured at fair value on a recurring basis	$	—	$	—	$	189	$	189


Interest rate swap agreements		—		—		297		297

Total liabilities measured at fair value on a recurring basis	$	—	$	—	$	297	$	297

Available for sale securities — Emmis’ available for sale security is an investment in preferred stock of a company that is not traded in active markets. The investment is recorded at fair value, which is generally estimated using significant unobservable market parameters, resulting in Level 3 categorization.

Swap agreements — Emmis’ derivative financial instruments consisted solely of interest rate cash flow hedges in which the Company paid a fixed rate and receives a variable interest rate that was observable based upon a forward interest rate curve, as adjusted for the CVA discussed in Note 5. Because a more than insignificant portion of the valuation was based upon unobservable inputs, these interest rate swaps were considered a Level 3 input.

The following table shows a reconciliation of the beginning and ending balances for fair value measurements using significant unobservable inputs:


	For the Nine Months Ended
	November 30, 2010					November 30, 2011
	Available					Available
	For Sale		Derivative			For Sale		Derivative
	Securities		Instruments			Securities		Instruments
Beginning Balance	$	452	$	4,068		$	189	$	297
Realized losses included in earnings		—		(3,392	)		—		(297	)
Changes in other comprehensive income		—		475			—		—

Ending Balance	$	452	$	1,151		$	189	$	—

Non-Recurring Fair Value Measurements

The Company has certain assets that are measured at fair value on a non-recurring basis under circumstances and events that include those described in Note 3, Intangible Assets and Goodwill, and are adjusted to fair value only when the carrying values are more than the fair values. The categorization of the framework used to price the assets is considered a Level 3, due to the subjective nature of the unobservable inputs used to determine the fair value (see Note 3 for more discussion).

During the three months and nine months ended November 30, 2011, there were no adjustments to the fair value of these assets as there were no indicators that would have required interim testing.

-22-

Fair Value Of Other Financial Instruments

The estimated fair value of financial instruments is determined using the best available market information and appropriate valuation methodologies. Considerable judgment is necessary, however, in interpreting market data to develop the estimates of fair value. Accordingly, the estimates presented are not necessarily indicative of the amounts that the Company could realize in a current market exchange, or the value that ultimately will be realized upon maturity or disposition. The use of different market assumptions may have a material effect on the estimated fair value amounts.

The following methods and assumptions were used to estimate the fair value of financial instruments:

• Cash and cash equivalents, accounts receivable and accounts payable, including accrued liabilities : The carrying amount of these assets and liabilities approximates fair value because of the short maturity of these instruments.

• Credit Agreement debt : As of February 28, 2011 and November 30, 2011, the fair value of the Company’s Credit Agreement debt as of those dates was $311.1 million and $201.4 million, respectively, while the carrying value was $331.0 million and $208.3 million, respectively. The Company’s assessment of the fair value of the Credit Agreement debt is based on bid prices for the portion of debt that is actively traded. The Extended Term Loans are not actively traded (see Note 10 for more discussion of the Extended Term Loans). The Company believes that the current carrying value of the Extended Term Loans approximates its fair value.

• 6.25% Series A cumulative convertible preferred stock : As of February 28, 2011 and November 30, 2011, the fair value of the Company’s 6.25% Series A cumulative convertible preferred stock based on quoted market prices was $49.2 million and $17.6 million, respectively, while the carrying value was $140.5 million and $56.4 million, respectively.

• Senior unsecured notes : The senior unsecured notes are not actively traded (see Note 11 for more discussion of the senior unsecured notes). The Company believes that the current carrying value of the senior unsecured notes approximates its fair value.

-23-

Note 7. Comprehensive Income (Loss)

Comprehensive income (loss) was comprised of the following for the three months and nine months ended November 30, 2010 and 2011:


	Three Months Ended						Nine Months Ended
	November 30,						November 30,
	2010			2011			2010			2011

Consolidated net income	$	2,060		$	58,702		$	2,651		$	53,387

Comprehensive income (loss), net of tax:
Change in fair value of derivatives		843			—			924			(489	)
Translation adjustment		1,227			(573	)		(501	)		325


Comprehensive income	$	4,130		$	58,129		$	3,074		$	53,223

Less: Comprehensive income attributable to noncontrolling interests		(1,475	)		(991	)		(3,241	)		(3,780	)


Comprehensive income (loss) attributable to the Company	$	2,655		$	57,138		$	(167	)	$	49,443

Note 8. Segment Information

The Company’s operations are aligned into two business segments: (i) Radio and (ii) Publishing. These business segments are consistent with the Company’s management of these businesses and its financial reporting structure. Corporate expenses are not allocated to reportable segments. The results of operations of our Hungary radio operations and the operations related to our Flint Peak Tower Site, both of which had previously been included in the radio segment, have been classified as discontinued operations and have been excluded from the segment disclosures below. See Note 1 for more discussion of our discontinued operations.

The Company’s segments operate primarily in the United States, but we also operate radio stations located in Slovakia and Bulgaria. The following table summarizes the net revenues and long-lived assets of our international properties included in our condensed consolidated financial statements.


	Net Revenues				Net Revenues				Long-lived Assets
	Three Months Ended November 30,				Nine Months Ended November 30,				As of February 28,		As of November 30,
	2010		2011		2010		2011		2011		2011
Continuing Operations:

Slovakia	$	2,785	$	2,976	$	9,011	$	8,895	$	7,521	$	6,473

Bulgaria		288		341		1,008		959		778		662

Discontinued Operations (see Note 1):

Hungary	$	10	$	—	$	30	$	7	$	20	$	18

The accounting policies as described in the summary of significant accounting policies included in the Company’s Annual Report filed on Form 10-K, for the year ended February 28, 2011, and in Note 1 to these condensed consolidated financial statements, are applied consistently across segments.


Three Months Ended
November 30, 2011	Radio		Publishing		Corporate			Consolidated
Net revenues	$	39,782	$	19,537	$	—		$	59,319
Station operating expenses, excluding depreciation and amortization		31,029		16,874		—			47,903
Corporate expenses, excluding depreciation and amortization		—		—		4,972			4,972
Depreciation and amortization		1,225		117		409			1,751
Loss on sale of assets		—		—		—			—

Operating income (loss)	$	7,528	$	2,546	$	(5,381	)	$	4,693

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Three Months Ended
November 30, 2010	Radio		Publishing		Corporate			Consolidated
Net revenues	$	47,817	$	18,505	$	—		$	66,322
Station operating expenses, excluding depreciation and amortization		32,547		16,584		—			49,131
Corporate expenses, excluding depreciation and amortization		—		—		3,403			3,403
Depreciation and amortization		1,867		122		307			2,296
Loss on disposal of fixed assets		3		—		—			3

Operating income (loss)	$	13,400	$	1,799	$	(3,710	)	$	11,489


Nine Months Ended
November 30, 2011	Radio		Publishing		Corporate			Consolidated
Net revenues	$	135,180	$	49,906	$	—		$	185,086
Station operating expenses, excluding depreciation and amortization		101,796		47,590		—			149,386
Corporate expenses, excluding depreciation and amortization		—		—		15,276			15,276
Depreciation and amortization		4,670		347		955			5,972
Loss on sale of assets		790		24		—			814

Operating income (loss)	$	27,924	$	1,945	$	(16,231	)	$	13,638


Nine Months Ended
November 30, 2010	Radio		Publishing		Corporate			Consolidated
Net revenues	$	143,622	$	49,618	$	—		$	193,240
Station operating expenses, excluding depreciation and amortization		102,598		46,777		—			149,375
Corporate expenses, excluding depreciation and amortization		—		—		13,278			13,278
Depreciation and amortization		5,677		382		1,007			7,066
Loss on disposal of fixed assets		3							3

Operating income (loss)	$	35,344	$	2,459	$	(14,285	)	$	23,518


	As of February 28, 2011
	Radio		Publishing		Corporate		Consolidated
Assets — continuing operations	$	404,302	$	38,299	$	26,868	$	469,469
Assets — discontinued operations		3,008		—		—		3,008

Total assets	$	407,310	$	38,299	$	26,868	$	472,477


	As of November 30, 2011
	Radio		Publishing		Corporate		Consolidated

Assets — continuing operations	$	298,258	$	37,169	$	28,786	$	364,213
Assets — discontinued operations		1,493		—		—		1,493

Total assets	$	299,751	$	37,169	$	28,786	$	365,706

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Note 9. Sale of controlling interest in WRXP-FM, WKQX-FM AND WLUP-FM

On September 1, 2011, the Company completed the sale of a controlling interest in Merlin Media, LLC (“Merlin Media”), which owns the following radio stations: (i) WKQX-FM, 101.1 MHz, Channel 266, Chicago, IL (FIN 19525), (ii) WRXP-FM, 101.9 MHz, Channel 270, New York, NY (FIN 67846) and (iii) WLUP-FM, 97.9 MHz, Channel 250, Chicago, IL (FIN 73233) (collectively the “Merlin Stations”). The Company received gross cash sale proceeds of $130 million in the transaction, and incurred approximately $8.6 million of expenses, principally consisting of severance, state and local taxes, and professional and other fees and expenses. The Company used the net cash proceeds to repay approximately 38% of the term loans outstanding under its credit facility. Emmis also paid a $2.0 million exit fee to Canyon related to the repayment of Extended Term Loans on September 1, 2011.

On September 1, 2011, subsidiaries of Emmis entered into the 2nd Amended & Restated Limited Liability Company Agreement (the “LLC Agreement”) of Merlin Media, together with Merlin Holdings, LLC (“Merlin Holdings”), an affiliate of investment funds managed by GTCR, LLC, and Benjamin L. Homel (aka Randy Michaels) (together with Merlin Holdings, the “Investors”).

In connection with the completion of the disposition of assets to Merlin Media and sale of a controlling interest in Merlin Media pursuant to the Purchase Agreement dated June 20, 2011 among the Company, Merlin Holdings and Mr. Homel (the “Purchase Agreement), the Company retained preferred equity and common equity interests in Merlin Media, the terms of which are governed by the LLC Agreement. The Company’s common equity interests in Merlin Media represent 20.6% of the initial outstanding common equity interests of Merlin Media and are subject to dilution if the Company fails to participate pro rata in future capital calls. The fair value of the Company’s 20.6% common equity ownership of Merlin Media LLC as of September 1, 2011 was approximately $5.6 million, which is reflected in investments in the accompanying condensed consolidated balance sheets and accounted for under the equity method. The Company’s preferred equity interests in Merlin Media consist of approximately $28.7 million (at par) of non-redeemable perpetual preferred interests, on which a preferred return accretes quarterly at a rate of 8% per annum. The fair value of this preferred equity interest as of September 1, 2011, was approximately $10.8 million and is reflected in investments in the accompanying condensed consolidated balance sheets and accounted for under the cost method. The preferred interests held by the Company are junior to non-redeemable perpetual preferred interests held by the Investors of approximately $87 million, on which a preferred return accretes quarterly at a rate of 8% per annum. The preferred interests held by the Company and the Investors are both junior to a $60 million senior secured note issued to an affiliate of Merlin Holdings. The note matures five years from closing, and interest accrues on the note semi-annually at a rate of 15% per annum, payable in cash or in-kind at Merlin Media’s election. Distributions in respect of Merlin Media’s common and preferred interests are made when declared by Merlin Media’s board of managers. Given the Company’s continued equity interests in the stations, it is precluded from reclassifying the operating results of the stations to discontinued operations.

Upon deconsolidation, Emmis recorded the retained common and preferred equity interests at fair value. The fair value of our investments of Merlin Media LLC was calculated using the Black Scholes option-pricing model. The model’s inputs reflect assumptions that market participants would use in pricing the instrument in a current period transaction. Inputs to the model include stock volatility, dividend yields, expected term of the derivatives and risk-free interest rates. Results from the valuation model in one period may not be indicative of future period measurements.

Under the LLC Agreement, the Company is entitled initially to appoint one out of five members of Merlin Media’s board of managers and has limited consent rights with respect to specified transactions. The Company has no obligation to make ongoing capital contributions to Merlin Media, but as noted above is subject to dilution if it fails to participate pro rata in future capital calls.

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Merlin Media is a private company and the Company will have limited ability to sell its interests in Merlin Media, except pursuant to customary tag-along rights with respect to sales by Merlin Media’s controlling Investor or, after five years, in a private sale to third parties subject to rights of first offer held by the controlling Investor. The Company has customary registration rights and is subject to a “drag-along” right of the controlling Investor.

On September 30, 2011, the Compensation Committee of the Company’s Board of Directors approved a discretionary bonus of $1.7 million to certain employees that were key participants in the Merlin Media transaction. The discretionary bonus is reflected in corporate expenses, excluding depreciation and amortization expense during the three-month period ending November 30, 2011.

Note 10. Credit Agreement Amendments

On March 29, 2011, ECC and its principal operating subsidiary, Emmis Operating Company (“EOC” and the “Borrower”) entered into the Third Amendment to Amended and Restated Revolving Credit and Term Loan Agreement (the “Third Amendment”), by and among the Borrower, ECC, the lending institutions party to the Credit Agreement and Bank of America, N.A., as administrative agent for itself and the other lenders party to the Credit Agreement.

Among other things, the Third Amendment provides that (i) the leverage ratio and fixed charge covenants will not apply to any amounts outstanding under the Credit Agreement until November 30, 2012, at which time they will be set at 5.0x and 1.15x for the life of the Credit Agreement and from November 30, 2011 through August 31, 2012 there will be a minimum Consolidated EBITDA (as defined in the Credit Agreement) test of $25.0 million per rolling four quarter test period, (ii) the requirement that annual audits be certified without qualification will be waived for the fiscal years ending February 2011 and 2012, (iii) the ability of Emmis to engage in certain activities or transactions, including the payment of dividends, the incurrence of indebtedness and the ability to invest certain proceeds including from asset sales will be further restricted or prohibited and (iv) the terms of the existing Tranche B Term Loans held or purchased on or prior to the date of the Third Amendment by funds or accounts managed by Canyon Capital Advisors LLC (“Canyon”), are amended into an amended tranche of term loans with an extended maturity date of November 1, 2014. The total amount of Tranche B Term Loans outstanding as of March 29, 2011 was $329.0 million, and the amount of such term loans that Canyon amended into extended term loans was approximately $182.9 million (the “Extended Term Loans”). The pricing on the Extended Term Loans is based on Emmis’ election on the following pricing grid:


Cash Portion		Paid-in-Kind Portion
7.50%		7.00%
7.75%		6.50%
8.00%		6.00%
8.25%		5.50%
8.50%		5.00%
8.75%		4.50%
9.00%		4.00%
9.25%		3.50%
9.50%		3.00%
9.75% ¹		2.50% ¹


1		If the Company elects 9.75% Cash Portion for any payment, it may also elect to pay some or the entire Paid-in-Kind portion in cash for such period.

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Prior to the entry into the Third Amendment, Emmis entered into a backstop letter agreement, dated March 27, 2011, with Canyon (the “Backstop Letter Agreement”), pursuant to which Canyon agreed to consent to the Third Amendment and to purchase loans necessary to provide the required Lenders’ consent to the Third Amendment. In consideration of Canyon’s entering into the Backstop Letter Agreement, Canyon will receive an exit fee of 6% (or 3% during the first six months after the Third Amendment effective date) on the repayment of Tranche B Term Loans and revolving credit commitments held or purchased by funds or accounts managed by Canyon as of March 29, 2011. The Company is accreting the estimated exit fee due to Canyon over the estimated life of the Extended Term Loans. For the three-month and nine-month periods ended November 30, 2011, accretion of the exit fee totaled $1.2 million and $2.5 million, respectively, and is included in the accompanying condensed consolidated statements of operations as interest expense. The exit fee liability is included in the condensed consolidated balance sheets in other noncurrent liabilities.

The Third Amendment contains other terms and conditions customary for financing arrangements of this nature.

Subsequent to the execution of the Third Amendment on March 29, 2011, the maturity dates of the original term loan and revolver remain unchanged, but the term loans held by Canyon have been extended to November 1, 2014. The contractual future amortization schedule for the Credit Agreement subsequent to the execution of the Third Amendment, based upon amounts outstanding at November 30, 2011 is as follows:


			Amortization of		Amortization of
Year Ended	Revolver		Term Loans		Term Loans		Total
February 28 (29),	Amortization		Held by Canyon		Held by Others		Amortization
2012		—		551		440		991
2013		10,000		1,093		874		11,967
2014		—		1,081		86,783		87,864
2015		—		107,517		—		107,517

Total	$	10,000	$	110,242	$	88,097	$	208,339

In connection with the Third Amendment, the Company recognized a $1.5 million loss on debt extinguishment related to the write-off of existing deferred debt issuance costs related to the Extended Term Loans. The Company incurred approximately $3.4 million of professional fees associated with the Third Amendment. The Company capitalized approximately $0.4 million of these costs as debt issuance costs, which are being amortized over the life of the Extended Term Loans. The remaining $3.0 million of these costs were expensed as a component of corporate expenses in the nine-month period ended November 30, 2011.

On November 10, 2011, ECC and EOC entered into the Fourth Amendment to Amended and Restated Revolving Credit and Term Loan Agreement (the “Fourth Amendment”), by and among the Borrower, ECC, the lending institutions party to the Credit Agreement and Bank of America, N.A., as administrative agent for itself and the other lenders party to the Credit Agreement. The Fourth Amendment did not change any financial covenants, but amended certain provisions of the Credit Agreement to allow Emmis to purchase (either for cash or pursuant to total return swaps) its outstanding Series A cumulative convertible preferred stock with the proceeds of newly issued senior unsecured notes issued by ECC. See Note 11 for further discussion. In connection with the Fourth Amendment, the Company paid $1.1 million of fees to its Credit Agreement lenders. These costs were capitalized and are included in other assets, net in the accompanying condensed consolidated balance sheets and are being amortized over the remaining life of the Credit Agreement. In addition, the Company incurred approximately $0.3 million of legal fees that were expensed as a component of corporate expenses in the three months ended November 30, 2011.

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Note 11. Issuance of ECC Senior Unsecured Notes and Preferred Stock Transactions

During the quarter ended November 30, 2011, Emmis entered into a series of transactions that enabled it to purchase rights in a significant portion of its outstanding Series A cumulative convertible preferred stock (“Preferred Stock”). These transactions are described below.

Issuance of ECC Senior Unsecured Notes

On November 10, 2011, Emmis entered into a Note Purchase Agreement (the “Note Purchase Agreement”) with Zell Credit Opportunities Master Fund, L.P. (“Zell”).

Under the Note Purchase Agreement, Zell has agreed to purchase from ECC up to $35.0 million of unsecured notes (the “Notes”). The Notes, with respect to distributions upon the liquidation, winding-up and dissolution of the Company, rank senior to the Preferred Stock and common equity of the Company, but junior to our Credit Agreement. Emmis is permitted to sell the Notes to Zell on up to four separate occasions on or before February 2, 2012. The Note Purchase Agreement provides that Emmis may enter into transactions to purchase or purchase rights in its Preferred Stock through privately negotiated transactions with individual preferred shareholders and/or through a tender offer.

Interest on the Notes is paid in kind and compounds quarterly at a rate of 22.95% per annum, except that during the continuance of any event of default the rate will be 24.95% per annum payable on demand in cash. The Notes mature on February 1, 2015, at which time the principal balance and all accreted interest is due entirely in cash.

At any time after the discharge of certain senior obligations of Emmis and its subsidiaries described in the Note Purchase Agreement, Emmis may, upon prior written notice to Zell, redeem the Notes in whole or in part at a redemption price (including with certain make-whole amounts for redemption occurring prior to May 10, 2013) as described in the Note Purchase Agreement. Any partial redemption of the Notes shall be in denominations of at least $10.0 million and in multiples of $1.0 million in excess of such minimum denomination.

The Note Purchase Agreement contains representations, warranties, indemnities and affirmative and negative covenants that are customary for agreements of its type. The negative covenants include, without limitation, certain limitations on the ability to (1) incur liens and indebtedness, (2) consummate mergers, consolidations or asset sales, (3) make guarantees and investments, and (4) pay dividends or distributions on or make any distributions in respect of Preferred Stock or common equity. The Note Purchase Agreement also includes certain events of default customary for agreements of its type including, among others, the failure to make payments when due, insolvency, certain judgments, breaches of representations and warranties, breaches of covenants, and the occurrence of certain events, including cross acceleration to certain other indebtedness of Emmis, including its senior credit facility. In addition, Emmis is required to deliver compliance certificates demonstrating compliance with the Note Purchase Agreement and Emmis’ senior credit facility.

Through November 30, 2011, Emmis has issued, on two separate occasions, Notes to Zell totaling $28.5 million to either purchase or purchase rights in 1,681,429 shares of Preferred Stock at a weighted average price of $15.56 per share (see discussion below) and to pay $2.3 million in fees and expenses, $0.2 million of which was capitalized as deferred debt issuance costs. Emmis may draw additional funds upon satisfaction of certain conditions, including (a) the delivery of a purchase notice,(2) the correctness of the representations and warranties contained in the Note Purchase Agreement, (3) the original aggregate principal amount of the Notes issued on the applicable purchase date, taken together with all other Notes previously purchased shall not exceed $35.0 million, and (4) the purchaser shall have been registered in the note register and the purchaser shall have received customary closing deliveries.

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As of November 30, 2011, subsequent to the issuance of the Notes, outstanding long-term debt was as follows:


	As of February 28,			As of November 30,
	2011			2011
Credit Agreement Debt
Revolver	$	2,000		$	10,000
Term Loan B		328,994			88,097
Extended Term Loan B		—			110,242


Total Credit Agreement debt		330,994			208,339

Senior unsecured notes		—			28,635

Less: current maturities		(3,290	)		(11,983	)


Total long-term debt	$	327,704		$	224,991

Preferred Stock Transactions

Through November 30, 2011, Emmis either purchased or purchased rights in 1,681,429 shares of Preferred Stock at a weighted average price of $15.56 per share. We purchased 196,750 shares for cash and these shares have been retired. The purchase price for the rights in the remaining shares was also paid in cash, but these shares are subject to total return swap arrangements. We have entered into confirmations for total return swaps and voting agreements with several preferred holders, including Alden Global Distressed Opportunities Master Fund, L.P. Pursuant to these agreements and arrangements, we have the ability to direct the vote of 1,484,679 shares of Preferred Stock, or approximately 57% of the Preferred Stock outstanding as of November 30, 2011. While these shares of Preferred Stock are not retired for record purposes, they are considered extinguished for accounting purposes. Accordingly, during the three months ended November 30, 2011, we recorded a gain on extinguishment of preferred stock of $55.8 million, net of transaction fees and expenses, which is recorded as a decrease to accumulated deficit and included in the computation of net income available to common shareholders in the accompanying condensed consolidated financial statements.

The confirmations for the total return swaps are longform confirmations governed by a form of ISDA 2002 Master Agreement. The swaps, which have a five year term, provide that in return for payment of the Preferred Stock purchase price described above, we are entitled to receive all payments and other consideration received by the counterparties from us in respect of the counterparties’ Preferred Stock. Therefore, the counterparties will receive no economic benefit by virtue of their continued record ownership of these shares beyond the purchase price we already paid. Until settlement of the swaps, the counterparties will continue to hold legal title and have record ownership of the Preferred Stock, but will be required to vote the Preferred Stock as directed by the Company pursuant to their respective voting agreements. The swaps will settle by delivery of each counterparty’s Preferred Stock to the Company upon written notice of termination by the Company (or on any other applicable disruption or termination event).

Note 12. Regulatory, Legal and Other Matters

Certain individuals and groups have challenged applications for renewal of the FCC licenses of certain of the Company’s stations. The challenges to the license renewal applications are currently pending before the FCC. Emmis does not expect the challenges to result in the denial of any license renewals.

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On December 24, 2010, Emmis entered into an agreement with Bose McKinney & Evans, LLP (“Bose”) and JS Acquisition LLC for the purpose of coordinating the prosecution of certain litigation (the “Litigation”) by JS Acquisition against Alden Global Distressed Opportunities Master Fund, L.P., Alden Global Value Recovery Master Fund, L.P., and Alden Media Holdings, LLC (collectively, “Alden”) relating to the going private transaction in which Emmis, JS Acquisition and Alden participated. Under the terms of the agreement, Bose represented both Emmis and JS Acquisition in connection with the Litigation. Subsequently, Alden sued each of the directors of Emmis in New York state court alleging breach of fiduciary duty and related claims. Alden’s suit against each of the directors was dismissed on July 14, 2011. In addition, on March 21, 2011, Emmis filed suit against Alden in Federal District Court for the Southern District of New York, seeking recoupment of approximately $0.3 million of short-swing profits under section 16 of the Securities Exchange Act of 1934. Also, on November 18, 2011, Emmis filed suit against Joseph R. Siegelbaum, a director elected by the preferred shareholders in July 2011, alleging breach of fiduciary duty and tortious interference with prospective business advantage. In connection with the purchase of preferred stock owned by Alden discussed in Note 11 Alden, Emmis, Joseph R. Siegelbaum and Jeffrey H. Smulyan entered into a mutual release of any claims existing between (i) Alden, certain affiliated entities, Joseph R. Siegelbaum and certain other persons, on the one hand, and (ii) Emmis, certain affiliated entities, Jeffrey H. Smulyan, and certain entities affiliated with Mr. Smulyan, on the other hand. The mutual release became effective November 28, 2011.

The Company is a party to various other legal proceedings arising in the ordinary course of business. In the opinion of management of the Company, there are no legal proceedings pending against the Company likely to have a material adverse effect on the Company.

Effective December 31, 2009, our radio music license agreements with the two largest performance rights organizations, American Society of Composers, Authors and Publishers (“ASCAP”) and Broadcast Music, Inc. (“BMI”), expired. The Radio Music License Committee (“RMLC”), which negotiates music licensing fees for most of the radio industry with ASCAP and BMI and of which we are a participant, filed motions in the U.S. District Court in New York against BMI and ASCAP on behalf of the radio industry, seeking interim fees and a determination of fair and reasonable industry-wide license fees. The U.S. District Court in New York approved reduced interim fees for ASCAP and BMI. The final fees, still to be determined by the court, may be retroactive to January 1, 2010 and may be different from the interim fees.

Note 13. Subsequent Event

On December 1, 2011, Emmis launched a modified “Dutch auction” tender offer to purchase up to $6.0 million in cash of its Preferred Stock at a price per share not less than $14.00 and not greater than $15.56. Pursuant to the tender offer, Emmis purchased 164,400 shares of its Preferred Stock at $15.56 per share. The total purchase price of $2.9 million, including $0.3 million of fees and expenses, was funded through additional ECC senior unsecured Notes, bringing the total amount of such notes issued to date to $31.4 million out of a maximum amount of $35.0 million. After payment for the tendered Preferred Stock on January 5, 2012, there are 2,448,020 shares of Preferred Stock outstanding.


Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations

Note: Certain statements included in this report or in the financial statements contained herein which are not statements of historical fact, including but not limited to those identified with the words “expect,” “should,” “will” or “look” are intended to be, and are, by this Note, identified as “forward-looking statements,” as defined in the Securities and Exchange Act of 1934, as amended. Such statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future result, performance or achievement expressed or implied by such forward-looking statement. Such factors include, among others:

	•		general economic and business conditions;

	•		fluctuations in the demand for advertising and demand for different types of advertising media;

	•		our ability to service our outstanding debt;

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	•		loss of key personnel;

	•		increased competition in our markets and the broadcasting industry;

	•		our ability to attract and secure programming, on-air talent, writers and photographers;

	•		inability to obtain (or to obtain timely) necessary approvals for purchase or sale transactions or to complete the transactions for other reasons generally beyond our control;

	•		increases in the costs of programming, including on-air talent;

	•		new or changing regulations of the Federal Communications Commission or other governmental agencies;

	•		changes in radio audience measurement methodologies;

	•		competition from new or different technologies;

	•		war, terrorist acts or political instability; and

	•		other factors mentioned in other documents filed by the Company with the Securities and Exchange Commission.

For a more detailed discussion of these and other risk factors, see the Risk Factors section of our Annual Report on Form 10-K, for the year ended February 28, 2011. Emmis does not undertake any obligation to publicly update or revise any forward-looking statements because of new information, future events or otherwise.

GENERAL

We are a diversified media company. We own and operate radio and publishing properties located primarily in the United States. Our revenues are mostly affected by the advertising rates our entities charge, as advertising sales represent approximately 70% of our consolidated revenues. These rates are in large part based on our entities’ ability to attract audiences/subscribers in demographic groups targeted by their advertisers. Arbitron Inc. generally measures radio station ratings in our domestic markets on a weekly basis using a passive digital system of measuring listening (the Portable People Meter ^TM ). Because audience ratings in a station’s local market are critical to the station’s financial success, our strategy is to use market research and advertising and promotion to attract and retain audiences in each station’s chosen demographic target group.

Our revenues vary throughout the year. As is typical in the broadcasting industry, our revenues and operating income are usually lowest in our fourth fiscal quarter.

In addition to the sale of advertising time for cash, stations typically exchange advertising time for goods or services, which can be used by the station in its business operations. These barter transactions are recorded at the estimated fair value of the product or service received. We generally confine the use of such trade transactions to promotional items or services for which we would otherwise have paid cash. In addition, it is our general policy not to pre-empt advertising spots paid for in cash with advertising spots paid for in trade.

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The following table summarizes the sources of our revenues for the three-month and nine-month periods ended November 30, 2010 and 2011. All revenues generated by our international radio properties are included in the “Local” category. The category “Non Traditional” principally consists of ticket sales and sponsorships of events our stations and magazines conduct in their local markets. The category “Other” includes, among other items, revenues generated by the websites of our entities and barter.


	Three Months Ended November 30,										Nine Months Ended November 30,
	2010		% of Total			2011		% of Total			2010		% of Total			2011		% of Total
	(Dollars in thousands)										(Dollars in thousands)
Net revenues:
Local	$	35,868		54.1	%	$	30,645		51.7	%	$	108,109		55.9	%	$	98,996		53.5	%
National		11,534		17.4	%		10,266		17.3	%		29,267		15.1	%		28,307		15.3	%
Political		1,003		1.5	%		175		0.3	%		1,600		0.8	%		526		0.3	%
Publication Sales		3,729		5.6	%		3,819		6.4	%		9,989		5.2	%		9,889		5.3	%
Non Traditional		3,268		4.9	%		3,585		6.0	%		14,651		7.6	%		15,589		8.4	%
Other		10,920		16.5	%		10,829		18.3	%		29,624		15.4	%		31,779		17.2	%


Total net revenues	$	66,322				$	59,319				$	193,240				$	185,086

As previously mentioned, we derive approximately 70% of our net revenues from advertising sales. Our radio stations derive a higher percentage of their advertising revenues from local sales than our publishing entities. In the nine-month period ended November 30, 2011, local sales, excluding political revenues, represented approximately 82% and 63% of our advertising revenues for our radio and publishing divisions, respectively.

No customer represents more than 10% of our consolidated net revenues. Our top ten categories for radio represent approximately 59% and 61% of our radio division’s total advertising net revenues for the nine-month periods ended November 30, 2010 and 2011, respectively. The automotive industry, representing approximately 10% of our radio net revenues, is the largest category for our radio division for the nine-month periods ended November 30, 2010 and 2011, respectively.

The majority of our expenses are fixed in nature, principally consisting of salaries and related employee benefit costs, office and tower rent, utilities, property and casualty insurance and programming-related expenses. However, approximately 20% of our expenses vary in connection with changes in revenues. These variable expenses primarily relate to sales commissions and bad debt reserves. In addition, costs related to our marketing and promotions department are highly discretionary and incurred primarily to maintain and/or increase our audience and market share.

KNOWN TRENDS AND UNCERTAINTIES

Although advertising revenues are on an upswing following the recent global recession, domestic radio revenue growth has been challenged for several years. Management believes this is principally the result of three factors: (1) the proliferation of advertising inventory caused by the emergence of new media, such as various media distributed via the Internet, telecommunication companies and cable interconnects, as well as social networks and social coupon sites, all of which are gaining advertising share against radio and other traditional media, (2) the perception of investors and advertisers that satellite radio and portable media players diminish the effectiveness of radio advertising, and (3) the adoption of a new method of gathering ratings data, which has shown an increase in cumulative audience size, but a decrease in time spent listening as compared to the previous method of gathering ratings data.

The Company and the radio industry have begun several initiatives to address these issues. The radio industry is working aggressively to increase the number of portable digital media devices that contain an FM tuner, including smartphones and music players. In many countries, FM tuners are common features in portable digital media devices. The radio industry is working with leading United States network providers, device manufacturers, regulators and legislators to ensure that FM tuners are included in future portable digital media devices. Including FM as a feature on these devices has the potential to increase radio listening and improve perception of the radio industry while offering network providers the benefits of a proven emergency notification system, reduced network congestion from audio streaming services, and a host of new revenue generating applications.

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The Company has also aggressively worked to harness the power of broadband and mobile media distribution in the development of emerging business opportunities by becoming one of the fifteen largest streaming audio providers in the United States, developing highly interactive websites with content that engages our listeners, using SMS texting and delivering real-time traffic to navigation devices.

Along with the rest of the radio industry, the majority of our stations have deployed HD Radio ^® . HD Radio ^® offers listeners advantages over standard analog broadcasts, including improved sound quality and additional digital channels. To make the rollout of HD Radio ^® more efficient, a consortium of broadcasters representing a majority of the radio stations in nearly all of our markets have agreed to work together in each radio market to ensure the most diverse consumer offering possible and to accelerate the rollout of HD Radio ^® receivers, particularly in automobiles. In addition to offering secondary channels, the HD Radio ^® spectrum allows broadcasters to transmit other forms of data. We are participating in a joint venture with other broadcasters to provide the bandwidth that a third party uses to transmit location-based data to hand-held and in-car navigation devices. It is unclear what impact HD Radio ^® will have on the markets in which we operate.

Arbitron Inc., the supplier of ratings data for United States radio markets, has developed technology to passively collect data for its ratings service. The Portable People Meter ^TM (PPM ^TM ) is a small, pager-sized device that does not require any active manipulation by the end user and is capable of automatically measuring radio, television, Internet, satellite radio and satellite television signals that are encoded for the service by the broadcaster. The PPM ^TM offers a number of advantages over the traditional diary ratings collection system including ease of use, more reliable ratings data and shorter time periods between when advertising runs and when audience listening or viewing habits can be reported. This service began in the New York and Los Angeles markets in October 2008, in the St. Louis market in October 2009, and the Austin and Indianapolis markets in the fall of 2010. In each market in which the service has launched, there has been a compression in the relative ratings of all stations in the market, increasing the competitive pressure within the market for advertising dollars. In addition, ratings for certain stations when measured by the PPM ^TM as opposed to the traditional diary methodology can be materially different.

The results of our domestic radio operations are heavily dependent on the results of our New York and Los Angeles markets. These markets account for approximately 45% of our domestic radio net revenues. As discussed below, during the three-month period ended November 30, 2011, both KPWR-FM in Los Angeles and our New York radio cluster trailed the performance of the markets in which they operate.

KPWR-FM in Los Angeles trailed the overall Los Angeles radio market during the three-month period ended November 30, 2011. For the three-month period ended November 30, 2011, KPWR-FM’s gross revenues were down 4.1%, whereas Miller Kaplan reported that Los Angeles radio market total gross revenues were down 3.8% versus the same period of the prior year.

Our radio cluster in New York trailed the performance of the overall New York radio market during the three-month period ended November 30, 2011. For the three-month period ended November 30, 2011, our New York radio stations’ gross revenues were down 15.2%, whereas Miller Kaplan reported that New York radio market total gross revenues were down 1.7% versus the same period of the prior year. Our adult urban station, WRKS-FM, was particularly weak during the quarter. We have made certain programming changes and have increased promotional spending for the station in an attempt to improve its ratings position.

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As part of our business strategy, we continually evaluate potential acquisitions of radio stations, publishing properties and other businesses that we believe hold promise for long-term appreciation in value and leverage our strengths. However, Emmis Operating Company’s (the Company’s principal operating subsidiary, “EOC”) Credit Agreement substantially limits our ability to make acquisitions. We also regularly review our portfolio of assets and may opportunistically dispose of assets when we believe it is appropriate to do so. See Note 9 to our condensed consolidated financial statements for a discussion of the sale of one of our radio stations in New York and our two radio stations in Chicago.

CRITICAL ACCOUNTING POLICIES

Critical accounting policies are defined as those that encompass significant judgments and uncertainties, and potentially lead to materially different results under different assumptions and conditions. We believe that our critical accounting policies are those described below.

Revenue Recognition

Broadcasting revenue is recognized as advertisements are aired. Publication revenue is recognized in the month of delivery of the publication. Both broadcasting revenue and publication revenue recognition is subject to meeting certain conditions such as persuasive evidence that an arrangement exists and collection is reasonably assured. These criteria are generally met at the time the advertisement is aired for broadcasting revenue and upon delivery of the publication for publication revenue. Advertising revenues presented in the financial statements are reflected on a net basis, after the deduction of advertising agency fees, usually at a rate of 15% of gross revenues.

Allowance for Doubtful Accounts

An allowance for doubtful accounts is recorded based on management’s judgment of the collectability of receivables. When assessing the collectability of receivables, management considers, among other things, historical loss experience and existing economic conditions.

FCC Licenses and Goodwill

We have made acquisitions in the past for which a significant amount of the purchase price was allocated to FCC licenses and goodwill assets. As of November 30, 2011, we have recorded approximately $237.2 in goodwill and FCC licenses, which represents approximately 65% of our total assets.

In the case of our U.S. radio stations, we would not be able to operate the properties without the related FCC license for each property. FCC licenses are renewed every eight years; consequently, we continually monitor our stations’ compliance with the various regulatory requirements. Historically, all of our FCC licenses have been renewed at the end of their respective periods, and we expect that all FCC licenses will continue to be renewed in the future. We consider our FCC licenses to be indefinite-lived intangibles. Our foreign broadcasting licenses expire during periods ranging from February 2021 to February 2026. While all of our international broadcasting licenses were recently extended, we will need to submit extension applications upon their expiration to continue our broadcast operations in these countries. While there is a general expectancy of renewal of radio broadcast licenses in most countries and we expect to actively seek renewal of our foreign licenses, both of the countries in which we operate do not have the regulatory framework or history that we have with respect to license renewals in the United States. This makes the risk of non-renewal (or of renewal on less favorable terms) of foreign licenses greater than for United States licenses. We treat our foreign broadcasting licenses as definite-lived intangibles and amortize them over their respective license periods.

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We do not amortize goodwill or other indefinite-lived intangible assets, but rather test for impairment at least annually or more frequently if events or circumstances indicate that an asset may be impaired. When evaluating our radio broadcasting licenses for impairment, the testing is performed at the unit of accounting level as determined by Accounting Standards Codification (“ASC”) Topic 350-30-35. In our case, radio stations in a geographic market cluster are considered a single unit of accounting, provided that they are not being operated under a Local Marketing Agreement by another broadcaster.

We complete our annual impairment tests on December 1 of each year and perform additional interim impairment testing whenever triggering events suggest such testing is warranted.

Valuation of Indefinite-lived Broadcasting Licenses

Valuation of Goodwill

ASC Topic 350 requires the Company to test goodwill for impairment at least annually using a two-step process. The first step is a screen for potential impairment, while the second step measures the amount of impairment. The Company conducts the two-step impairment test on December 1 of each fiscal year, unless indications of impairment exist during an interim period. When assessing its goodwill for impairment, the Company uses an enterprise valuation approach to determine the fair value of each of the Company’s reporting units (radio stations grouped by market and magazines on an individual basis). Management determines enterprise value for each of its reporting units by multiplying the two-year average station operating income generated by each reporting unit (current year based on actual results and the next year based on budgeted results) by an estimated market multiple. The Company uses a blended station operating income trading multiple of publicly traded radio operators as a benchmark for the multiple it applies to its radio reporting units. There are no publicly traded publishing companies that are focused predominantly on city and regional magazines as is our publishing segment. Therefore, the market multiple used as a benchmark for our publishing reporting units is based on recently completed transactions within the city and regional magazine industry or analyst reports that include valuations of magazine divisions within publicly traded media conglomerates. Management believes this methodology for valuing radio and publishing properties is a common approach and believes that the multiples used in the valuation are reasonable given our peer comparisons and recent market transactions. To corroborate the step-one reporting unit fair values determined using the market approach described above, management also uses an income approach, which is a discounted cash flow method to determine the fair value of the reporting unit.

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Deferred Taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequence of events that have been recognized in the Company’s financial statements or income tax returns. Income taxes are recognized during the year in which the underlying transactions are reflected in the consolidated statements of operations. Deferred taxes are provided for temporary differences between amounts of assets and liabilities as recorded for financial reporting purposes and amounts recorded for income tax purposes. After determining the total amount of deferred tax assets, the Company determines whether it is more likely than not that some portion of the deferred tax assets will not be realized. If the Company determines that a deferred tax asset is not likely to be realized, a valuation allowance will be established against that asset to record it at its expected realizable value.

Estimate of Effective Tax Rates

We estimate the effective tax rates and associated liabilities or assets for each legal entity within Emmis. These estimates are based upon our interpretation of United States and local tax laws as they apply to our legal entities and our overall tax structure. Audits by local tax jurisdictions, including the United States Government, could yield different interpretations from our own and cause the Company to owe more taxes than originally recorded. We utilize advisors in the various tax jurisdictions to evaluate our position and to assist in our calculation of our tax expense and related assets and liabilities.

Results of Operations for the Three-month and Nine-Month Periods Ended November 30, 2011, Compared to November 30, 2010

Net revenues:


	For the three months ended November 30,										For the nine months ended November 30,
	2010		2011		$ Change			% Change			2010		2011		$ Change			% Change
	(As reported, amounts in thousands)										(As reported, amounts in thousands)
Net revenues:
Radio	$	47,817	$	39,782	$	(8,035	)		(16.8	)%	$	143,622	$	135,180	$	(8,442	)		(5.9	)%
Publishing		18,505		19,537		1,032			5.6	%		49,618		49,906		288			0.6	%


Total net revenues	$	66,322	$	59,319	$	(7,003	)		(10.6	)%	$	193,240	$	185,086	$	(8,154	)		(4.2	)%

Radio net revenues decreased in the three-month and nine-month periods ended November 30, 2011 as compared to the same period of the prior year principally due to the July 15, 2011 commencement of a Local Marketing Agreement (“LMA”) related to the Merlin Stations and the ultimate sale of a controlling interest in these stations on September 1, 2011. During the time these stations were operated pursuant to the LMA, Emmis recorded, as net revenue, a $0.3 million monthly LMA fee, but did not record advertising sales during this period. We typically monitor the performance of our domestic stations against the aggregate performance of the markets in which we operate based on reports for the periods prepared by Miller Kaplan. Miller Kaplan reports are generally prepared on a gross revenues basis and exclude revenues from barter arrangements. Miller Kaplan reported gross revenues for our domestic radio markets decreased 1.8% and increased 0.8% for the three-month and nine-month periods ended November 30, 2011 as compared to the same periods of the prior year. Excluding the Merlin Stations, our gross revenues as reported to Miller Kaplan decreased 4.9% and increased 0.9% for the three-month and nine-month periods ended November 30, 2011 as compared to the same periods prior year. For the three-month period ending November 30, 2011, our gross revenues exceeded the market average in Indianapolis, but trailed market performance in all other markets measured by Miller Kaplan. For the nine-month period ending November 30, 2011, our gross revenues exceeded the market growth rate in Indianapolis and Los Angeles, but trailed the market growth rate in New York, St. Louis and Austin. Miller Kaplan does not report gross revenue market data for our Terre Haute market. During the three months ended November 30, 2011, more advertisers targeted adult consumers at the expense of younger demographics. Since our portfolio of stations predominantly serves 18-34 year-old consumers, this shift in advertising adversely impacted us. Furthermore, we experienced a significant drop in movie advertising, a category that is historically among our top ten. For the nine-month period ended November 30, 2011 as compared to the same period of the prior year, our average rate per minute for our domestic radio stations was up 3.6%, and our minutes sold were down 3.1%.

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Publishing net revenues increased in the three-month and nine-month periods ended November 30, 2011 as compared to the same periods of the prior year as the local advertising environment, which had been stagnant for much of the year, began to improve in our fiscal third quarter.

Station operating expenses, excluding depreciation and amortization expense:


	For the three months ended November 30,										For the nine months ended November 30,
	2010		2011		$ Change			% Change			2010		2011		$ Change			% Change
	(As reported, amounts in thousands)										(As reported, amounts in thousands)
Station operating expenses, excluding depreciation and amortization expense:
Radio	$	32,547	$	31,029	$	(1,518	)		(4.7	)%	$	102,598	$	101,796	$	(802	)		(0.8	)%
Publishing		16,584		16,874		290			1.7	%		46,777		47,590		813			1.7	%


Total station operating expenses, excluding depreciation and amortization expense	$	49,131	$	47,903	$	(1,228	)		(2.5	)%	$	149,375	$	149,386	$	11			0.0	%

Station operating expenses, excluding depreciation and amortization expense, for the three-month and nine-month periods ended November 30, 2011 were down approximately $1.5 million and $0.8 million, respectively, for our radio division. The decrease in station operating expenses is principally due to the LMA and sale of the Merlin Stations.

Station operating expenses, excluding depreciation and amortization expense, for publishing for the three-month and nine-month periods ended November 30, 2011 were both up 1.7% over the prior year.

Corporate expenses, excluding depreciation and amortization expense:


	For the three months ended November 30,									For the nine months ended November 30,
	2010		2011		$ Change		% Change			2010		2011		$ Change		% Change
	(As reported, amounts in thousands)									(As reported, amounts in thousands)
Corporate expenses excluding depreciation and amortization expense	$	3,403	$	4,972	$	1,569		46.1	%	$	13,278	$	15,276	$	1,998		15.0	%

During the three-month period ending November 30, 2011, the Company paid a $1.7 million bonus to certain employees in connection with the sale of the Merlin Stations. We also incurred approximately $0.3 million of professional fees associated with the Fourth Amendment to our Credit Agreement as discussed in Note 11 to the accompanying condensed consolidated financial statements. During the three months ended November 30, 2010, we incurred $0.7 related to performance incentives earned during the quarter. No such incentives were earned during the three months ended November 30, 2011.

In addition to the items described above, during the nine-month period ended November 30, 2010, the Company incurred approximately $3.1 million of expenses related to a going private transaction. During the nine months ended November 30, 2011, the Company incurred approximately $3.0 million of costs associated with the Third Amendment discussed in Note 10 to the accompanying condensed consolidated financial statements and approximately $0.7 million for a discretionary bonus paid to substantially all corporate employees.

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Depreciation and amortization:


	For the three months ended November 30,										For the nine months ended November 30,
	2010		2011		$ Change			% Change			2010		2011		$ Change			% Change
	(As reported, amounts in thousands)										(As reported, amounts in thousands)
Depreciation and amortization:
Radio	$	1,867	$	1,225	$	(642	)		(34.4	)%	$	5,677	$	4,670	$	(1,007	)		(17.7	)%
Publishing		122		117		(5	)		(4.1	)%		382		347		(35	)		(9.2	)%
Corporate		307		409		102			33.2	%		1,007		955		(52	)		(5.2	)%


Total depreciation and amortization	$	2,296	$	1,751	$	(545	)		(23.7	)%	$	7,066	$	5,972	$	(1,094	)		(15.5	)%

The decrease in depreciation expense for the three-month and nine-month periods ended November 30, 2011 is mostly attributable to certain assets becoming fully depreciated; thus the Company has ceased to record depreciation expense on those assets. Also, property and equipment of the Merlin stations has been sold and is no longer being depreciated and our license in Slovakia was extended by an additional eight years and is now being amortized through February 2021.

Loss on sale of assets:


	For the three months ended November 30,							For the nine months ended November 30,
	2010		2011		$ Change			2010		2011		$ Change
	(As reported, amounts in thousands)							(As reported, amounts in thousands)
Loss on sale of assets:
Radio	$	3	$	—	$	(3	)	$	3	$	790	$	787
Publishing		—		—		—			—		24		24
Corporate		—		—		—			—		—		—


Total loss on sale of assets:	$	3	$	—	$	(3	)	$	3	$	814	$	811

In July 2011, Emmis sold its office building in Terre Haute, Indiana for $0.2 million and recorded a loss on sale of assets of $0.8 million.

Operating income (loss):


	For the three months ended November 30,												For the nine months ended November 30,
	2010			2011			$ Change			% Change			2010			2011			$ Change			% Change
	(As reported, amounts in thousands)												(As reported, amounts in thousands)
Operating income (loss):
Radio	$	13,400		$	7,528		$	(5,872	)		(43.8	)%	$	35,344		$	27,924		$	(7,420	)		(21.0	)%
Publishing		1,799			2,546			747			41.5	%		2,459			1,945			(514	)		(20.9	)%
Corporate		(3,710	)		(5,381	)		(1,671	)		(45.0	)%		(14,285	)		(16,231	)		(1,946	)		(13.6	)%


Total operating income:	$	11,489		$	4,693		$	(6,796	)		(59.2	)%	$	23,518		$	13,638		$	(9,880	)		(42.0	)%

Radio operating income decreased in the three-month and nine-month periods ended November 30, 2011 mostly due to the commencement of the LMA and sale of the Merlin Stations and related severance and transactions costs as described above.

Publishing operating income increased in the three-month period ended November 30, 2011 due to stronger local advertising demand, but is still down for the nine-month period ended November 30, 2011 as growth of operating expenses, excluding depreciation and amortization expense, while minimal, has outpaced net revenue growth.

Corporate operating losses varied during the three-month and nine-month periods ended November 30, 2011 predominately due to significant transaction-related costs in all periods as described above.

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Interest expense:


	For the three months ended November 30,									For the nine months ended November 30,
	2010		2011		$ Change		% Change			2010		2011		$ Change		% Change
	(As reported, amounts in thousands)									(As reported, amounts in thousands)

Interest expense	$	5,195	$	6,257	$	1,062		20.4	%	$	16,084	$	21,681	$	5,597		34.8	%

Although the Company repaid approximately $121.4 million of Credit Agreement debt in connection with the sale of its controlling interest of Merlin Media LLC, interest expense increased during the three-month and nine-month periods by $1.1 million and $5.6 million, respectively. The increase in interest expense for both the three-month and nine-month periods ended November 30, 2011 is mostly due to the Third Amendment to our Credit Agreement, which was effective March 29, 2011. Subsequent to the Third Amendment, the interest rate on our Credit Agreement debt held by Canyon, which as of November 30, 2011 was $110.2 million, changed from LIBOR + 4% to a minimum of 12.25% per annum. Also in accordance with the Third Amendment, the Company now pays an exit fee upon repayment of a portion of our term loans ranging from 3% to 6% of the balance repaid. The Company is accruing this exit fee over the term of the Extended Term Loans as a component of interest expense.

Loss on debt extinguishment:


	For the three months ended November 30,						For the nine months ended November 30,
	2010		2011		$ Change		2010		2011		$ Change
	(As reported, amounts in thousands)						(As reported, amounts in thousands)

Loss on debt extinguishment	$	—	$	525	$	525	$	—	$	2,003	$	2,003

During the three-month period ended November 30, 2011, the Company recorded a loss on debt extinguishment of $0.5 million related to the write-off of debt fees associated with term loans repaid during the quarter. The loss on debt extinguishment for the nine-month period ended November 30, 2011 includes a $1.5 million loss on debt extinguishment as a portion of our term loans were deemed to be substantially modified in connection with the Third Amendment.

Gain on sale of controlling interest Merlin Media LLC:


	For the three months ended November 30,						For the nine months ended November 30,
	2010		2011		$ Change		2010		2011		$ Change
	(As reported, amounts in thousands)						(As reported, amounts in thousands)

Gain on sale of controlling interest in Merlin Media LLC	$	—	$	31,805	$	31,805	$	—	$	31,805	$	31,805

On September 1, 2011, the Company sold a controlling interest in Merlin Media LLC for $130 million in cash proceeds. Additionally, the Company retained a preferred and common equity interest in Merlin Media LLC. The gain on sale of controlling interest was measured as the aggregate of cash received and the fair value of the retained noncontrolling interests in Merlin Media LLC, less the Company’s carrying value of the assets and liabilities sold.

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Provision for income taxes:


	For the three months ended November 30,								For the nine months ended November 30,
	2010		2011			$ Change			2010		2011			$ Change
	(As reported, amounts in thousands)								(As reported, amounts in thousands)

Provision (benefit) for income taxes	$	4,068	$	(27,477	)	$	(31,545	)	$	4,316	$	(26,987	)	$	(31,303	)

The benefit for income taxes for the three-month and nine-month periods ended November 30, 2011, principally relates to the utilization of previously reserved net operating losses and the elimination of the portion of the Company’s deferred tax liability attributable to indefinite-lived intangibles associated with the sale of the Merlin Stations.

The Company is recording a valuation allowance for its net deferred tax assets, including its net operating loss carryforwards, but excluding deferred tax liabilities related to indefinite-lived intangibles.

(Gain) loss from discontinued operations, net of tax:


	For the three months ended November 30,								For the nine months ended November 30,
	2010		2011			$ Change			2010		2011			$ Change
	(As reported, amounts in thousands)								(As reported, amounts in thousands)

(Gain) loss from discontinued operations, net of tax	$	34	$	(1,903	)	$	(1,937	)	$	229	$	(4,693	)	$	(4,922	)

Our Hungarian radio operations and the operations of our Flint Peak Tower Site have been classified as discontinued operations in the accompanying condensed consolidated statements. The increase in income from discontinued operations, net of tax, for the nine months ended November 30, 2011 mostly relates to the gain on sale of the Flint Peak Tower Site. The gain reflected in the three months ended November 30, 2011 mostly relates to the reclassification of tax expense previously shown in discontinued operations that is no longer applicable since we now have pre-tax income from continuing operations.

Consolidated net income:


	For the three months ended November 30,						For the nine months ended November 30,
	2010		2011		$ Change		2010		2011		$ Change
	(As reported, amounts in thousands)						(As reported, amounts in thousands)

Consolidated net income	$	2,060	$	58,702	$	56,642	$	2,651	$	53,387	$	50,736

Consolidated net income increased between periods mostly due to the gain on sale of the Merlin Stations, including the benefit for income taxes, both of which are described above.

Gain on extinguishment of preferred stock:


	For the three months ended November 30,						For the nine months ended November 30,
	2010		2011		$ Change		2010		2011		$ Change
	(As reported, amounts in thousands)						(As reported, amounts in thousands)

Gain on extinguishment of preferred stock	$	—	$	55,835	$	55,835	$	—	$	55,835	$	55,835

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During the three-month period ended November 30, 2011, the Company purchased or purchased rights in 1,681,429 shares of its preferred stock for $28.3 million. Preferred stock is carried on the balance sheet at its liquidation preference of $50 per share. The shares that Emmis purchased rights in are considered retired from an accounting perspective, and thus Emmis recognized a gain on extinguishment of the preferred stock equal to the difference of the acquisition price and the carrying amount of the preferred stock.

Liquidity and Capital Resources

Our primary sources of liquidity are cash provided by operations and cash available through revolver borrowings under our credit facility. Our primary uses of capital during the past few years have been, and are expected to continue to be, capital expenditures, working capital, debt service requirements and the repayment of debt.

At November 30, 2011, we had cash and cash equivalents of $9.9 million and net working capital of $7.6 million. At February 28, 2011, we had cash and cash equivalents of $6.1 million and net working capital of $12.1 million. Cash and cash equivalents held at various European banking institutions at February 28, 2011 and November 30, 2011 was $5.8 million and $5.2 million (which includes approximately $1.1 million of cash related to our Slager discontinued operation which is classified as current assets — discontinued operations in the condensed consolidated balance sheets), respectively. Our ability to access our share of these international cash balances (net of noncontrolling interests) is limited by country-specific statutory requirements.

During the nine months ended November 30, 2011, the Company sold its 50% share of a partnership in which the sole asset is land in New Jersey on which a transmission tower is located to the other partner for $1.3 million in cash. Prior to its sale, the carrying value of this investment was $1.2 million and was shown in other assets, net on the condensed consolidated balance sheets. Proceeds from the sale were used to repay amounts outstanding under our senior credit facility.

On September 1, 2011, the Company completed the disposition of a controlling interest in Merlin Media, LLC (“Merlin Media”), which owns the following radio stations: (i) WKQX-FM, 101.1 MHz, Channel 266, Chicago, IL (FIN 19525), (ii) WRXP-FM, 101.9 MHz, Channel 270, New York, NY (FIN 67846) and (iii) WLUP-FM, 97.9 MHz, Channel 250, Chicago, IL (FIN 73233). The sale was made pursuant to the Purchase Agreement, initially disclosed on the Company’s Current Report on Form 8-K filed with the SEC on June 21, 2011 (as amended by a Current Report on Form 8-K/A filed with the Commission on June 24, 2011). The Company received gross cash sale proceeds of $130 million in the transaction, and incurred approximately $8.6 million of expenses, principally consisting of severance, state and local taxes, and professional and other fees and expenses. The Company used the net cash proceeds to repay approximately 38% of the term loans outstanding under its credit facility. Emmis also paid a $2.0 million exit fee to Canyon related to the repayment of Extended Term Loans on September 1, 2011.

On September 30, 2011, the Compensation Committee of the Company’s Board of Directors approved a discretionary bonus of $1.7 million to certain employees that were key participants in the Merlin Media transaction. The discretionary bonus is reflected in corporate expenses, excluding depreciation and amortization expense in the three-month period ending November 30, 2011.

On various dates in November 2011, the Company issued senior unsecured notes to Zell Credit Opportunities Master Fund L.P. (“Zell”) totaling $28.5 million. Cash proceeds from the notes were used to either purchase or purchase rights in 1,681,421 shares of the Company’s preferred stock and to pay fees and expenses. Pursuant to the Notes Purchase Agreement between the Company and Zell, the Company may issue additional notes, but the aggregate total of all notes issued cannot exceed $35.0 million.

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In recent years, the Company has recorded significant impairment charges, mostly attributable to our FCC licenses. These impairment charges have had no impact on our liquidity or compliance with debt covenants.

Operating Activities

Cash used in operating activities was $0.3 million for the nine-month period ended November 30, 2011 versus cash provided by operating activities of $7.8 million in the same period of the prior year. The decrease in cash flows from operating activities is mostly due to the increase in interest costs as a result of higher interest rates associated with the Third Amendment as previously discussed, transaction costs associated with the sale of a controlling interest in Merlin Media LLC as previously discussed and a decrease in cash provided by our discontinued operations.

Investing Activities

Cash provided by investing activities was $133.7 million for the nine-month period ended November 30, 2011 versus cash used in investing activities of $2.5 million in the same period of the prior year. During the nine-month period ended November 30, 2011, the Company sold a controlling interest in the Merlin Stations for $130.0 million in cash, sold its Flint Peak Tower Site for $5.8 million of net cash proceeds and sold its 50% share of a partnership in which the sole asset is land in New Jersey on which a transmission tower is located to the other partner for $1.3 million of net cash proceeds. The proceeds related to the Flint Peak Tower sale are classified as cash provided by discontinued operations in the accompanying condensed consolidated statements of cash flows. Partially offsetting the net cash proceeds on the sales described above was approximately $3.3 million of capital expenditures. In the prior year, the only substantial use of cash was for $2.4 million of capital expenditures. Investing activities generally include capital expenditures and business acquisitions and dispositions.

We expect capital expenditures related to continuing operations to be approximately $6.8 million in the current fiscal year, compared to $4.2 million in fiscal 2011. We expect that future requirements for capital expenditures will include capital expenditures incurred during the ordinary course of business. We expect to fund such capital expenditures with cash generated from operating activities and borrowings under our credit facility.

Financing Activities

Cash used in financing activities was $129.7 million for the nine-month period ended November 30, 2011, versus cash provided by financing activities of $0.5 million in the same period of the prior year. Cash used in financing activities in the nine-month period ended November 30, 2011 primarily relates to net payments related to our senior credit agreement of $122.7 million, payments to either purchase or purchase rights in preferred stock of $28.3 million, payments for other debt-related costs of $4.2 million and distributions to noncontrolling interests of $3.1 million, all of which are partially offset by the issuance of senior unsecured notes of $28.5 million.

Cash provided by financing activities for the nine-month period ended November 30, 2010 primarily relates to the $3.5 million of net borrowings of debt under our Credit Agreement partially offset by $2.8 million used to pay cash distributions to noncontrolling interests ($0.4 million of which is related to Slager and thus classified as discontinued operations).

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As of November 30, 2011, Emmis had $208.3 million of borrowings under the Credit Agreement ($12.0 million current and $196.3 million long-term), $28.6 million of senior unsecured notes (entirely long-term) and $56.4 million of Preferred Stock outstanding. Approximately $110.2 million of borrowings under the Credit Agreement bears interest pursuant to a grid under which 7.5% to 12.25% per annum is to be paid in cash and 7.0% to 0.0% per annum is to be paid in kind, subject to a minimum yield of 12.25% per annum. The remainder of the Credit Agreement debt bears interest, at our option, at a rate equal to the Eurodollar rate or an alternative Base Rate plus a margin. The senior unsecured notes compound quarterly at a rate of 22.95% per annum and is paid in kind, except that during the continuance of any event of default the rate will be 24.95% per annum payable on demand in cash. As of November 30, 2011, our weighted average borrowing rate under our Credit Agreement was approximately 8.6%. Including the senior unsecured notes, our weighted average borrowing rate at November 30, 2011 was 10.4%.

The debt service requirements of Emmis over the next twelve-month period are expected to be $2.0 million for mandatory repayment of term notes under our Credit Agreement, $10.0 million for revolver borrowings under our Credit Agreement as the revolver is set to expire on November 2, 2012, and a minimum of $8.3 million related to interest on the Extended Term Loans. The Company may, at its election, choose to pay a portion of the interest due on the Extended Term Loans in-kind. The remainder of the Credit Agreement debt bears interest at variable rates and is not included in the debt service requirements previously discussed.

The terms of Emmis’ Preferred Stock provide for a quarterly dividend payment of $.78125 per share on each January 15, April 15, July 15 and October 15. Emmis has not declared a preferred stock dividend since October 15, 2008. As of the filing date of this report, cumulative preferred dividends in arrears total $9.8 million. Failure to pay the dividend is not a default under the terms of the Preferred Stock. However, since dividends remain unpaid for more than six quarters, the holders of the Preferred Stock exercised their right to elect two persons to our board of directors. One of these directors, Joseph R. Siegelbaum, subsequently resigned. The Third Amendment to our Credit Agreement prohibits the Company from paying dividends on the Preferred Stock during the Suspension Period (as defined in the Credit Agreement) (See “Liquidity and Capital Resources”). Subject to the restrictions of the Credit Agreement, payment of future preferred stock dividends is at the discretion of the Company’s Board of Directors.

As of January 4, 2012, we had $7.4 million available for additional borrowing under our credit facility, which is net of $0.6 million in outstanding letters of credit. Availability under the credit facility depends upon our continued compliance with certain operating covenants and financial ratios. Emmis was in compliance with these covenants as of November 30, 2011. As part of our business strategy, we continually evaluate potential acquisitions of radio stations, publishing properties and other businesses that we believe hold promise for long-term appreciation in value and leverage our strengths. However, Emmis Operating Company’s Credit Agreement, as amended, substantially limits our ability to make acquisitions. We also regularly review our portfolio of assets and may opportunistically dispose of assets when we believe it is appropriate to do so. See Note 9 to our condensed consolidated financial statements for a discussion of the sale of one of our radio stations in New York and our two radio stations in Chicago.

Intangibles

Approximately 65% of our total assets consisted of intangible assets, such as FCC broadcast licenses, foreign broadcasting licenses, and goodwill, the value of which depends significantly upon the operational results of our businesses. In the case of our U.S. radio stations, we would not be able to operate the properties without the related FCC license for each property. FCC licenses are renewed every eight years; consequently, we continually monitor our stations’ compliance with the various regulatory requirements. Historically, all of our FCC licenses have been renewed at the end of their respective periods, and we expect that all FCC licenses will continue to be renewed in the future. Our foreign broadcasting licenses expire during periods ranging from February 2021 to February 2026. While all of our international broadcasting licenses were recently extended, we will need to submit extension applications upon their expiration to continue our broadcast operations in these countries. While we expect to actively seek renewal of our foreign licenses, both of the countries in which we operate do not have the regulatory framework or history that we have with respect to license renewals in the United States. This makes the risk of non-renewal (or of renewal on less favorable terms) of foreign licenses greater than for United States licenses.

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Regulatory, Legal and Other Matters

On December 24, 2010, Emmis entered into an agreement with Bose McKinney & Evans, LLP (“Bose”) and JS Acquisition LLC for the purpose of coordinating the prosecution of certain litigation (the “Litigation”) by JS Acquisition against Alden Global Distressed Opportunities Master Fund, L.P., Alden Global Value Recovery Master Fund, L.P., and Alden Media Holdings, LLC (collectively, “Alden”) relating to the going private transaction in which Emmis, JS Acquisition and Alden participated. Under the terms of the agreement, Bose represented both Emmis and JS Acquisition in connection with the Litigation. Subsequently, Alden sued each of the directors of Emmis in New York state court alleging breach of fiduciary duty and related claims. Alden’s suit against each of the directors was dismissed on July 14, 2011. In addition, on March 21, 2011, Emmis filed suit against Alden in Federal District Court for the Southern District of New York, seeking recoupment of approximately $0.3 million of short-swing profits under section 16 of the Securities Exchange Act of 1934. Also, on November 18, 2011, Emmis filed suit against Joseph R. Siegelbaum, a director elected by the preferred shareholders in July 2011, alleging breach of fiduciary duty and tortious interference with prospective business advantage. In connection with the purchase of preferred stock owned by Alden discussed in Note 11, Alden, Emmis, Joseph R. Siegelbaum and Jeffrey H. Smulyan entered into a mutual release of any claims existing between (i) Alden, certain affiliated entities, Joseph R. Siegelbaum and certain other persons, on the one hand, and (ii) Emmis, certain affiliated entities, Jeffrey H. Smulyan, Emmis’ Chief Executive Officer and President, and certain entities affiliated with Mr. Smulyan, on the other hand. The mutual release became effective November 28, 2011.

The Company is a party to various other legal and regulatory proceedings arising in the ordinary course of business. In the opinion of management of the Company, there are no other legal or regulatory proceedings pending against the Company that are likely to have a material adverse effect on the Company.


Item 3.		Quantitative and Qualitative Disclosures About Market Risk

As a smaller reporting company, we are not required to provide this information.

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Item 4.		Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this quarterly report, the Company evaluated the effectiveness of the design and operation of its “disclosure controls and procedures” (“Disclosure Controls”). This evaluation (the “Controls Evaluation”) was performed under the supervision and with the participation of management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”).

Based upon the Controls Evaluation, our CEO and CFO concluded that as of November 30, 2011 our Disclosure Controls are effective to provide reasonable assurance that information relating to Emmis Communications Corporation and Subsidiaries that is required to be disclosed by us in the reports that we file or submit, is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms, and is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

During the period covered by this quarterly report, there were no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

It should be noted that any control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met.

PART II — OTHER INFORMATION


Item 1.		Legal Proceedings

Refer to Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a discussion of various legal proceedings pending against the Company.

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Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds

During the three-month period ended November 30, 2011, we purchased 1,681,429 shares of Series A cumulative convertible preferred stock pursuant to a previously approved repurchase program. No common stock repurchases were made during the three-month period ended November 30, 2011, nor was there withholding of shares of stock upon vesting of restricted stock to cover withholding tax obligations. The following table provides information on our purchases of preferred stock during the three months ended November 30, 2011:

(c)

(d)

Total Number of

Maximum

Shares

Approximate

Purchased as

Dollar Value of

(a)

(b)

Part of Publicly

Shares That May

Total Number

Average Price

Announced

Yet Be Purchased

of Shares

Paid Per

Plans or

Under the Plans or

Purchased

Share

Programs

Programs (in 000’s) ⁽¹⁾

September 1, 2011 – September 30, 2011

—

N/A

—

October 1, 2011 – October 31, 2011

—

N/A

—

November 1, 2011 – November 30, 2011

1,681,429

15.56

1,681,429

6,507

1,681,429


⁽¹⁾		On November 14, 2011, the Company announced that under the terms of its senior unsecured notes, the Company has the ability to purchase up to $35.0 million of its outstanding Series A cumulative convertible preferred stock. As of November 30, 2011, the Company has $6.5 million available to it for preferred stock transactions. Any prior share repurchase program is no longer operative. During the month ended November 30, 2011, Emmis purchased 1,681,429 preferred shares at an average price of $15.56 per share. In connection with the preferred share purchases, Emmis incurred approximately $2.3 million of fees and expenses which reduced availability of funds to purchase additional preferred shares.


Item 3.		Defaults Upon Senior Securities


Item 6.		Exhibits

(a) Exhibits.

The following exhibits are filed or incorporated by reference as a part of this report:


	3.1			Second Amended and Restated Articles of Incorporation of Emmis Communications Corporation, as amended effective June 13, 2005 incorporated by reference from Exhibit 3.1 to the Company’s Form 10-K for the fiscal year ended February 28, 2006.

	3.2			Second Amended and Restated Bylaws of Emmis Communications Corporation incorporated by reference from Exhibit 3.2 to the Company’s Form 8-K filed June 3, 2011.

	4.1			Note Purchase Agreement, dated November 10, 2011, by and between Zell Credit Opportunities Master Fund, L.P. and Emmis Communications Corporation incorporated by reference from Exhibit (b) to the Company’s Schedule TO-I filed December 1, 2011.

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	10.1			Employment Agreement, dated as of September 4, 2011, by and between Emmis Operating Company and Patrick M. Walsh.*++

	10.2			Change in Control Severance Agreement, dated as of September 4, 2011, by and between Emmis Operating Company and Patrick M. Walsh.*++

	10.3			Total Return Swap Confirmation, dated November 28, 2011, by and between Alden Global Distressed Opportunities Master Fund, L.P. and Emmis Communications Corporation incorporated by reference from Exhibit (d)(1) to the Company’s Schedule TO-I/A filed December 2, 2011.

	10.4			Voting Agreement, dated November 28, 2011, by and among Alden Global Distressed Opportunities Master Fund, L.P., J. Scott Enright, and Emmis Communications Corporation incorporated by reference from Exhibit (d)(2) to the Company’s Schedule TO-I/A filed December 2, 2011.

	10.5			Total Return Swap Confirmation, dated November 14, 2011, by and between Valinor Credit Partners Master Fund, L.P. and Emmis Communications Corporation incorporated by reference from Exhibit (d)(3) to the Company’s Schedule TO-I/A filed December 2, 2011.

	10.6			Voting Agreement, dated November 14, 2011, by and among Valinor Credit Partners Master Fund, L.P., J. Scott Enright, and Emmis Communications Corporation incorporated by reference from Exhibit (d)(4) to the Company’s Schedule TO-I/A filed December 2, 2011.

	10.7			Total Return Swap Confirmation, dated November 14, 2011, by and between Sugarloaf Rock Capital, LLC and Emmis Communications Corporation incorporated by reference from Exhibit (d)(5) to the Company’s Schedule TO-I/A filed December 2, 2011.
	10.8			Voting Agreement, dated November 14, 2011, by and among Sugarloaf Rock Capital, LLC, J. Scott Enright, and Emmis Communications Corporation incorporated by reference from Exhibit (d)(6) to the Company’s Schedule TO-I/A filed December 2, 2011.

	10.9			Total Return Swap Confirmation, dated November 14, 2011, by and between Third Point Partners Qualified L.P. and Emmis Communications Corporation incorporated by reference from Exhibit (d)(7) to the Company’s Schedule TO-I/A filed December 2, 2011.

	10.10			Voting Agreement, dated November 14, 2011, by and among Third Point Partners Qualified L.P., J. Scott Enright, and Emmis Communications Corporation incorporated by reference from Exhibit (d)(8) to the Company’s Schedule TO-I/A filed December 2, 2011.

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	10.11	Total Return Swap Confirmation, dated November 14, 2011, by and between Third Point Partners L.P. and Emmis Communications Corporation incorporated by reference from Exhibit (d)(9) to the Company’s Schedule TO-I/A filed December 2, 2011.

	10.12	Voting Agreement, dated November 14, 2011, by and among Third Point Partners L.P., J. Scott Enright, and Emmis Communications Corporation incorporated by reference from Exhibit (d)(10) to the Company’s Schedule TO-I/A filed December 2, 2011.

	10.13	Total Return Swap Confirmation, dated November 14, 2011, by and between Third Point Offshore Master Fund L.P. and Emmis Communications Corporation incorporated by reference from Exhibit (d)(11) to the Company’s Schedule TO-I/A filed December 2, 2011.

	10.14	Voting Agreement, dated November 14, 2011, by and among Third Point Offshore Master Fund L.P., J. Scott Enright, and Emmis Communications Corporation incorporated by reference from Exhibit (d)(12) to the Company’s Schedule TO-I/A filed December 2, 2011.

	10.15	Total Return Swap Confirmation, dated November 14, 2011, by and between Third Point Ultra Master Fund L.P. and Emmis Communications Corporation incorporated by reference from Exhibit (d)(13) to the Company’s Schedule TO-I/A filed December 2, 2011.

	10.16	Voting Agreement, dated November 14, 2011, by and among Third Point Ultra Master Fund L.P., J. Scott Enright, and Emmis Communications Corporation incorporated by reference from Exhibit (d)(14) to the Company’s Schedule TO-I/A filed December 2, 2011.

	10.17	Second Amended and Restated Limited Liability Company Agreement of Merlin Media, dated September 1, 2011 incorporated by reference from Exhibit 10.1 to the Company’s Form 8-K filed September 2, 2011.

	10.18	Fourth Amendment to Amended and Restated Revolving Credit and Term Loan Agreement.*

	31.1	Certification of Principal Executive Officer of Emmis Communications Corporation pursuant to Rule 13a-14(a) under the Exchange Act.*

	31.2	Certification of Principal Financial Officer of Emmis Communications Corporation pursuant to Rule 13a-14(a) under the Exchange Act.*

	32.1	Section 1350 Certification of Principal Executive Officer of Emmis Communications Corporation.*

	32.2	Section 1350 Certification of Principal Financial Officer of Emmis Communications Corporation.*

101.INS		XBRL Instance Document**

101.SCH		XBRL Taxonomy Extension Schema Document**

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101.CAL				XBRL Taxonomy Extension Calculation Linkbase Document**

101.LAB				XBRL Taxonomy Extension Labels Linkbase Document**

101.PRE				XBRL Taxonomy Extension Presentation Linkbase Document**

101.DEF				XBRL Taxonomy Extension Definition Linkbase Document**


*		Filed with this report

**		Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability.

-50-

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	EMMIS COMMUNICATIONS CORPORATION
Date: January 12, 2012	By:	/s/ PATRICK M. WALSH
		Patrick M. Walsh
		Executive Vice President, Chief Financial Officer and Chief Operating Officer

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Exhibit 10.1

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (“Agreement”) is effective as of September 4, 2011 (the “Effective Date”), by and between EMMIS OPERATING COMPANY , an Indiana company (“Employer”), and PATRICK WALSH , an Indiana resident (“Executive”).

RECITALS

WHEREAS, Employer and its affiliates are engaged in the ownership and operation of certain radio, magazine and related operations (together, the “Emmis Group”); and

WHEREAS, Employer desires to employ Executive and Executive desires to be so employed.

NOW, THEREFORE, in consideration of the foregoing, the mutual promises and covenants set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound, hereby agree as follows:

AGREEMENT

1. Employment Status and Duties . Upon the terms and subject to the conditions set forth in this Agreement, Employer hereby employs Executive, and Executive hereby accepts exclusive employment with Employer. During the Term (as defined below), Executive shall serve as Chief Financial Officer and Chief Operating Officer. Executive shall have direct operating responsibility for the radio division and such other duties, functions, authority and responsibilities as are commensurate with the position of Chief Financial Officer and Chief Operating Officer. Executive’s services hereunder shall be performed on an exclusive, full-time basis in a professional, diligent and competent manner to the best of Executive’s abilities. Executive shall not undertake any outside employment or business activities without the prior written consent of Employer. Executive shall be permitted to serve on the board of charitable, civic and for-profit organizations so long as such services: (i) are approved in writing in advance by Employer; and (ii) do not interfere with Executive’s duties and obligations under this Agreement. It is understood and agreed that the location for the performance of Executive’s duties and services pursuant to this Agreement shall be the offices designated by Employer in Indianapolis, Indiana. Executive is currently a member of the Board of Directors of Emmis Communications Corporation (“ECC”), and he shall continue to serve in such position, subject to election by ECC’s shareholders, without additional remuneration (unless Employer elects to remunerate “inside directors”) but shall be entitled to the benefit of indemnification pursuant to the terms of Section 18.10 . Executive shall also serve without additional remuneration as a director and/or officer of one (1) or more of Employer’s subsidiaries or affiliates if appointed to such position(s) by Employer and shall also be entitled to the benefit of indemnification pursuant to the terms of Section 18.10 .

2. Term . The term of this Agreement shall commence on the Effective Date and continue through and including September 3, 2013, unless earlier terminated in accordance with the provisions set forth in this Agreement (the “Term”). Each year commencing on the Effective Date during the Term shall be a “Contract Year.”

3. Base Salary; Auto Allowance . Upon the terms and subject to the conditions set forth in this Agreement, Employer shall pay or cause to be paid to Executive an annualized base salary of Six Hundred Thousand Dollars ($600,000) (the “Base Salary”), payable pursuant to Employer’s customary payroll practices and subject to applicable taxes and withholdings as required by law.

Except as otherwise set forth herein, Employer shall have no obligation to pay Executive the Base Salary for any periods during which Executive fails or refuses to render services pursuant to this Agreement (except that Executive shall not be considered to have failed or refused to render services during any periods of Executive’s incapacity or absence from work due to sickness or other approved leave of absence in accordance with the Company’s policies, subject to Employer’s right to terminate Executive’s employment pursuant to Section 11 ) or for any period following the expiration or termination of this Agreement. In addition, it is understood and agreed that Employer may, at its sole election, pay up to ten percent (10%) of Executive’s Base Salary in Shares (as defined below); provided that: (i) the Shares are registered with the U.S. Securities and Exchange Commission (the “SEC”) on a then-effective Form S-8 or other applicable registration statement and are issued without restriction on resale (and further provided that the Shares are listed on a securities exchange or over-the-counter market, which does not include listing on the “pink sheets,” at the time of issuance), subject to any restrictions on resale under Employer’s insider trading policy or applicable federal and state law; and (ii) the percentage of Executive’s Base Salary payable in Shares shall be consistent with, and the exact number of Shares to be awarded to Executive shall be determined in the same manner as, that utilized for the Key Executive Group. The term “Key Executive Group” refers to the Company’s General Counsel and President — Publishing Division (or, if either of those positions are no longer comparable to Executive’s position, any other positions mutually agreed upon by the parties).

During the Term, Executive shall receive a monthly auto allowance in the amount of One Thousand Dollars ($1,000) (subject to withholding and applicable taxes as required by law) consistent with Employer’s policy or practices regarding such allowances, as such policy or practices may be amended from time to time during the Term in Employer’s sole and absolute discretion; provided , however , that in no event shall the auto allowance amount paid to Executive pursuant to this provision be reduced.

4. Incentive Compensation .

4.1 Option Grant . Immediately upon execution of this Agreement, Executive shall be granted an option (the “Option”) to acquire Two Hundred Fifty Thousand (250,000) shares of Class A Common Stock of ECC (“Shares”), which shall vest on September 3, 2013, subject to the terms of this Section 4.1 . The Option granted pursuant to this Section 4.1 shall: (i) have an exercise price per share equal to the Fair Market Value (“FMV”) of the stock on the date of grant (as FMV is defined in the applicable Equity Compensation Plan, or any subsequent equity compensation or similar plan adopted by ECC and generally used to make equity-based awards to management-level employees of the Emmis Group (the “Plan”)); (ii) notwithstanding any other provisions in this Agreement, be granted according to the terms and subject to the conditions of the Plan; (iii) be evidenced by a written grant agreement containing such terms and conditions as are generally provided for other management-level employees of the Emmis Group; and (iv) be exercisable for Shares with such restrictive legends on the certificates in accordance with the Plan and applicable securities laws. Employer shall use reasonable efforts to register the Shares subject to the award on a Form S-8 or other applicable registration statement at such time as the Shares are issued to Executive. The Option granted pursuant to this Section 4.1 is intended to satisfy the regulatory exemption from the application of Code Section 409A for certain options for service recipient shares, and it shall be administered accordingly.

4.2 Fiscal Year Bonus Amounts . Upon the terms and subject to the conditions set forth in this Section 4 , in connection with each of Employer’s fiscal years ending February 29, 2012, February 28, 2013 and February 28, 2014 (each, a “Fiscal Year”), Executive shall be eligible to receive one (1) performance bonus in an annualized target amount equivalent to Executive’s Base Salary (each, a “Fiscal Year Bonus”), the exact amount of which, if any, shall be determined based upon Executive’s attainment of certain performance and financial goals as determined each Fiscal Year by the Compensation Committee of the Board of Directors of ECC (the “Compensation Committee”), in its sole and absolute discretion, and communicated to Executive within ten (10) days after a final determination by the Compensation Committee. The Fiscal Year Bonus for Employer’s fiscal year ending Febuary 29, 2012 shall be paid pursuant to the Fiscal 2012 Corporate Incentive Plan approved by the Compensation Committee as of March 1, 2011 (the “2012 CIP”), except that Executive’s Award Targets (as defined in the 2012 CIP) shall be as follows:


	Total
	Bonus		Q1		Q2		Q3		Q4
Performance Goal	Potential		Target		Target		Target		Target
Total Emmis EBITDA	$	300,000	$	55,620	$	55,620	$	60,000	$	128,760
Radio EBITDA	$	240,000	$	44,496	$	44,496	$	50,000	$	101,008
Int’l Radio EBITDA	$	30,000	$	5,562	$	5,562	$	6,000	$	12,876
Interactive EBITDA	$	30,000	$	5,562	$	5,562	$	6,000	$	12,876

In the event that Executive’s employment with Employer ends at expiration of the Term (on September 3, 2013), the Fiscal Year Bonus earned by Executive with respect to Employer’s Fiscal Year ending February 28, 2014, if any would have been earned had Executive worked through February 28, 2014, as determined by the Compensation Committee, in its reasonable discretion, shall be pro-rated according to the following formula: the amount of the Fiscal Year Bonus that Executive would have earned had Executive worked such entire Fiscal Year multiplied by a fraction, the numerator of which shall be seven (7), the denominator of which shall be twelve (12).

4.3 Completion Bonus . Except as provided below, on the condition that Executive remains employed by Employer, on a full-time, continuous basis, through September 3, 2013, Employer shall make a cash payment to Executive in an amount equal to (i) Five Hundred Thousand Dollars ($500,000), if ASP (as defined below) is less than Two Dollars ($2.00), or (ii) Eight Hundred Thousand Dollars ($800,000), if ASP is equal to or greater than Two Dollars ($2.00) but less than Three Dollars ($3.00), or (iii) One Million Two Hundred Thousand Dollars ($1,200,000), if ASP is equal to or greater than Three Dollars ($3.00)(the “Completion Bonus”). The Completion Bonus shall be paid to Executive within two (2) weeks after September 3, 2013. Notwithstanding anything contained herein to the contrary, the bonus amounts set forth in (ii) and (iii) above shall not be paid (regardless of ASP) in the event that Executive is paid any amounts as a result of a “Qualifying Termination” (as defined in the 2011 CIC Agreement) following a Change in Control (as defined below) pursuant to the 2011 CIC Agreement (as defined below). “ASP” shall mean an adjusted share price, calculated as follows: the average FMV of one (1) Share during the period August 4, 2013 to September 3, 2013, plus the amount of all dividends paid on one (1) Share between the Effective Date and September 3, 2013.

Notwithstanding the foregoing, if Executive’s employment is terminated prior to September 3, 2013 (and Executive does not receive any payment as a result of a Qualifying Termination pursuant to the 2011 CIC Agreement) and such termination is: (a) due to Executive’s death, (b) on account of Executive’s incapacity pursuant to Section 11 , (c) by Employer other than for Cause pursuant to Section 10 , or (d) by Executive for Good Reason pursuant to Section 10 , then Employer shall pay to Executive, within two (2) weeks after termination of his employment, a pro-rata portion of the Completion Bonus if ASP falls within clause (i) above, Eight Hundred Thousand Dollars ($800,000) if ASP falls within (ii) above, or One Million Two Hundred Thousand Dollars ($1,200,000) if ASP falls within clause (iii) above. If Executive’s employment is terminated prior to September 3, 2013 and such termination is due to a Qualifying Termination on or

following a Change in Control and Executive receives a Change in Control payment pursuant to the 2011 CIC Agreement, then Employer shall pay to Executive, within two (2) weeks after termination of his employment, a pro-rata portion of the Completion Bonus set forth in clause (i) above without regard to ASP. Any pro-rated portion of the Completion Bonus shall be based upon the number of calendar days elapsed between the Effective Date and the date of termination divided by the total number of calendar days between the Effective Date and September 3, 2013. In these circumstances, ASP shall be calculated as of the date of Executive’s termination from employment and the relevant period for calculating ASP shall be the calendar month immediately preceding the month in which such termination of employment occurs.

4.4 Payment of Bonus Amounts . Employer shall pay or cause to be paid to Executive the bonus amounts, if earned according to the terms and conditions set forth in Sections 4.2 and 4.3 ; provided that, unless provided otherwise in Sections 4.2 and 4.3 or Sections 9 , 10 , 11 or 12 of this Agreement, on the final day of the applicable measuring period for such bonus: (i) this Agreement is in full force and effect and has not been terminated for any reason (other than due to a material breach of this Agreement by Employer); and (ii) Executive is fully performing all of Executive’s material duties and obligations pursuant to this Agreement and is not in breach of any of the material terms and conditions of this Agreement (provided that Executive’s failure or inability to perform his duties and obligations because of his death or incapacity (pursuant to Section 11 ), including during leaves of absence, shall not be considered a breach of this Agreement or non-performance under this provision). In addition, it is understood and agreed that Employer may, at its sole election, pay any bonus amounts earned by Executive pursuant to this Section 4 in cash or Shares; provided that the Shares evidencing any portion thereof are registered with the SEC on a then-effective Form S-8 or other applicable registration statement and are issued without restriction on resale (and further provided that the Shares are listed on a securities exchange or over-the-counter market, which does not include listing on the “pink sheets,” at the time of issuance), subject to any restrictions on resale under Employer’s insider trading policy and applicable federal and state law. In the event that Employer elects pursuant to this Section 4.4 to pay any Fiscal Year Bonus amounts in Shares, the percentage of such bonus amounts payable in Shares shall be consistent with, and the exact number of Shares to be awarded to Executive shall be determined in the same manner as, that utilized for the Key Executive Group. Any Fiscal Year Bonus amounts earned by Executive pursuant to the terms and conditions of Section 4.2 shall be paid after the end of the Fiscal Year for which the bonus is earned (but in no event later than ninety (90) days after the end of such Fiscal Year), except any pro-rated Fiscal Year Bonus earned by Executive for the period ending September 3, 2013 shall be paid within two (2) weeks of September 3, 2013. Any and all bonus amounts payable by Employer to Executive pursuant to this Section 4 shall be subject to applicable taxes and withholdings as required by law. Notwithstanding any other provisions of this Agreement, any bonus pursuant to Sections 4.2 or 4.3 shall be paid to Executive by the earlier of the date specified herein or the date that is no later than two-and-a-half months after the end of either Employer’s or Executive’s first taxable year (whichever period is longer) in which any such bonus is no longer subject to a substantial risk of forfeiture for purposes of Section 409A of the Internal Revenue Code of 1986, as amended (“Code”).

5. Expenses; Travel . Employer shall pay or reimburse Executive for all reasonable expenses actually incurred or paid by Executive during the Term in connection with the performance of Executive’s services hereunder upon presentation of expense statements, vouchers or other supporting documentation as Employer may require of Executive; provided that, such expenses are otherwise in accordance with Employer’s policies. Executive shall undertake such travel as may be required in the performance of Executive’s duties pursuant to this Agreement.

6. Fringe Benefits .

6.1 Vacation and Other Benefits . Each Contract Year, Executive shall be entitled to four (4) weeks of paid vacation (annualized) in accordance with Employer’s applicable policies and procedures for executive-level employees. Executive shall also be eligible to participate in and receive the fringe benefits generally made available to other executive-level employees of Employer in accordance with and to the extent that Executive is eligible under the general provisions of Employer’s fringe benefit plans or programs; provided , however , that Executive understands that these benefits may be increased, changed, eliminated or added from time to time during the Term as determined in Employer’s sole and absolute discretion.

6.2 Insurance and Estate Planning . Each Contract Year, Employer agrees to reimburse Executive in an amount not to exceed Five Thousand Dollars ($5,000) for the annual premium and other fees and expenses associated with estate planning services for Executive, including legal and tax services, and/or Executive’s purchase or maintenance of a life or disability insurance policy or other insurance policies on the life, or related to the care, of Executive. Executive shall be entitled to freely select and change the beneficiary or beneficiaries under such policy or policies. Notwithstanding anything to the contrary contained in this Agreement, Employer’s obligations under this Section 6.2 are expressly contingent upon Executive providing required information and taking all necessary actions required of Executive in order to obtain and maintain the subject services, policy or policies, including without limitation passing any required physical examinations. Reimbursements pursuant to this Section 6.2 with respect to a Contract Year shall be made as soon as administratively feasible after Executive submits the information and documentation required for reimbursement; provided, however, under no circumstances shall such reimbursement be paid later than two-and-a-half months after the end of the calendar year or Employer’s taxable year in which such Contract Year commenced.

7. Confidential Information .

7.1 Non-Disclosure . Executive acknowledges that certain information concerning the business of the Emmis Group and its members (including but not limited to trade secrets and other proprietary information) is of a highly confidential nature, and that, as a result of Executive’s employment with Employer prior to and during the Term, Executive shall receive and develop proprietary and confidential information concerning the business of Employer and/or other members of the Emmis Group which, if known to Employer’s competitors, would damage Employer, other members of the Emmis Group and their respective businesses. Accordingly, Executive hereby agrees that during the Term and thereafter, Executive shall not divulge or appropriate for Executive’s own use, or for the use or benefit of any third party (other than Employer and its representatives, or as directed in writing by Employer), any information or knowledge concerning the business of Employer, or any other member of the Emmis Group, which is not generally available to the public other than through the activities of Executive. Executive further agrees that, immediately upon termination of Executive’s employment for any reason, Executive shall promptly surrender to Employer all documents, brochures, plans, strategies, writings, illustrations, client lists, price lists, sales, financial or marketing plans, budgets and any and all other materials (regardless of form or character) which Executive received from or developed on behalf of Employer or any member of the Emmis Group in connection with Executive’s employment prior to or during the Term. Executive acknowledges that all such materials shall remain at all times during the Term and thereafter the sole and exclusive property of Employer and that nothing in this Agreement shall be deemed to grant Executive any right, title or interest in such material.

7.2 Ownership of Materials . Employer shall solely and exclusively own all rights of every kind and nature in perpetuity and throughout the universe in: (i) the programs and broadcasts on which Executive appears or for which Executive renders services to Employer in any capacity; (ii) the results and proceeds of Executive’s services pursuant to this Agreement, including without limitation those results and proceeds provided in connection with the creation, development, preparation, writing, editing or production by Executive or any employee of any member of the Emmis Group of any and all materials, properties or elements of any and all kinds for the programs on which Executive appears or for which Executive renders services (whether directly or indirectly); and (iii) any business, financial, sales or marketing plans and strategies, documents, presentations or other similar materials, regardless of kind or character, each of which Executive acknowledges is a work specially ordered by Employer which shall be considered to be a “work made for hire” for Employer. Therefore, Employer shall be the author and copyright owner of the programs on which Executive appears or for which Executive renders services pursuant to this Agreement, the broadcasts and tapes or recordings thereof for all purposes without limitation of any kind, and all materials described in the immediately preceding sentence. All characters developed for the programs and broadcasts

during the Term shall be solely and exclusively owned by Employer, including all right, title and interest thereto. The exclusive legal title to all of the aforesaid works and matters, programs, broadcasts and materials and all secondary and derivative rights therein, shall belong, at all times, to Employer, which shall have the right to copyright the same and apply for copyright registrations and copyright renewal registrations and to make whatever use thereof that Employer, in its sole and absolute discretion, deems advisable, including but not limited to rebroadcasts of programs or use of any portions of any program in the production or broadcast of other programs at any time, notwithstanding expiration of the Term or termination of this Agreement for any reason.

7.3 Injunctive Relief . Executive acknowledges that Executive’s breach of this Section 7 will cause irreparable harm and damage to Employer, the exact amount of which will be difficult to ascertain; that the remedies at law for any such breach would be inadequate; and that the provisions of this Section 7 have been specifically negotiated and carefully written to prevent such irreparable harm and damage. Accordingly, if Executive breaches this Section 7 , Employer shall be entitled to injunctive relief (including attorneys’ fees and costs) enforcing this Section 7 to the extent reasonably necessary to protect Employer’s legitimate interests, without posting bond or other security.

8. Non-Interference; Non-Competition; Injunctive Relief .

8.1 Non-Interference . During the Term, and for a period of two (2) years immediately following the expiration or early termination of the Term for any reason, Executive shall not, directly or indirectly, take any action (or permit any action to be taken by an entity with which Executive is associated) which has the effect of interfering with Employer’s relationship (contractual or otherwise) with: (i) on-air talent of any member of the Emmis Group; or (ii) any other employee of any member of the Emmis Group. Without limiting the generality of the foregoing, Executive specifically agrees that during such time period, neither Executive nor any entity with which Executive is associated shall solicit, hire or engage any on-air talent or other employee of any member of the Emmis Group or any other employee of any member of the Emmis Group to provide services for Executive’s benefit or for the benefit of any other business or entity, or solicit or encourage them to cease their employment with any member of the Emmis Group for any reason.

8.2 Non-Competition . Executive acknowledges the special and unique nature of Executive’s employment with Employer as a senior-management-level employee, and understands that, as a result of Executive’s employment with Employer prior to and during the Term, Executive has gained and will continue to gain knowledge of and have access to highly sensitive and valuable information regarding the operations of Employer and its subsidiaries and affiliated entities, including but not limited to the confidential information described more fully in Section 7.1 . Accordingly, Executive acknowledges Employer’s interest in preventing the disclosure of such information through the engagement of

Executive’s services by any of Employer’s competitors following the expiration or termination of the Term for any reason. Consequently, during the Term and for a period of twelve (12) months immediately following the expiration or termination of the Term for any reason, Executive shall not engage directly or indirectly in, or become employed by, serve as an agent or consultant to, or become an officer, director, partner, principal or shareholder of, any corporation, partnership or other entity which is engaged in the terrestrial radio broadcasting business, or the city and regional magazine publishing business, in any market in which Employer owns or operates a radio station or magazine as of the termination date of Executive’s employment with Employer. As long as Executive does not engage in any other activity prohibited by the immediately preceding sentence, Executive’s ownership of less than five percent (5%) of the issued and outstanding stock of any corporation whose stock is traded on an established securities market shall not constitute competition with Employer for the purpose of this Section 8.2 .

8.3 Injunctive Relief . Executive acknowledges and agrees that the provisions of this Section 8 have been specifically negotiated and carefully worded in recognition of the opportunities which will be afforded to Executive by Employer by virtue of Executive’s continued association with Employer during the Term, and the influence that Executive has and will continue to have over Employer’s employees, customers and suppliers. Executive further acknowledges that Executive’s breach of Section 8.1 or 8.2 herein will cause irreparable harm and damage to Employer, the exact amount of which will be difficult to ascertain; that the remedies at law for any such breach would be inadequate; and that the provisions of this Section 8 have been specifically negotiated and carefully written to prevent such irreparable harm and damage. Accordingly, if Executive breaches Section 8.1 or 8.2 , Employer shall be entitled to injunctive relief (including attorneys’ fees and costs) enforcing Section 8.1 or 8.2 , to the extent reasonably necessary to protect Employer’s legitimate interests, without posting bond or other security. Notwithstanding anything to the contrary contained in this Agreement, if Executive violates Section 8.1 or 8.2 , and Employer brings legal action for injunctive or other relief, Employer shall not, as a result of the time involved in obtaining such relief, be deprived of the benefit of the full period of noninterference set forth therein. Accordingly, the obligations set forth in Section 8.1 or 8.2 shall have the duration set forth therein, computed from the date such relief is granted but reduced by the time expired between the date the restrictive period began to run and the date of the first violation of the obligation(s) by Executive.

8.4 Construction . Despite the express agreement herein between the parties, in the event that any provisions set forth in this Section 8 shall be determined by any court or other tribunal of competent jurisdiction to be unenforceable for any reason whatsoever, the parties agree that this Section 8 shall be interpreted to extend only to the maximum extent as to which it may be enforceable, and that this Section 8 shall be severable into its component parts, all as determined by such court or tribunal.

9. Termination of Agreement by Employer for Cause .

9.1 Termination . Employer may terminate this Agreement and Executive’s employment hereunder for Cause (as defined in Section 9.3 below) in accordance with the terms and conditions of this Section 9 . Following a determination by Employer that Executive should be terminated for Cause, Employer shall give written notice (the “Preliminary Notice”) to Executive specifying the grounds for such termination, and Executive shall have ten (10) days after receipt of the Preliminary Notice to attempt to cure any acts or omissions giving rise to Cause, if applicable, and/or to respond to Employer in writing. If following the expiration of such ten (10) day period Employer reaffirms its determination that Executive should be terminated for Cause, such termination shall be effective upon delivery by Employer to Executive of a final notice of termination.

9.2 Effect of Termination . In the event of termination for Cause as provided in Section 9.1 above:

(i) Executive shall have no further obligations or liabilities hereunder except Executive’s obligations under Sections 7 and 8 , which shall survive the termination of this Agreement, and except for any obligations arising in connection with any conduct of Executive described in Section 9.3 ;

(ii) Employer shall have no further obligations or liabilities hereunder, except that Employer shall, not later than two (2) weeks after the termination date:

(a) Pay to Executive any Base Salary which has been earned on or prior to the termination date, but which remains unpaid as of the termination date; and

(b) Pay to Executive any bonus amounts which have been earned on or prior to the termination date pursuant to Section 4 , if any, but which remain unpaid as of the termination date.

Additionally, Employer shall comply with the applicable provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) and the provisions of any Employer benefit plans in which Executive or Executive’s eligible dependents or beneficiaries are participating at the time of termination.

9.3 Definition of Cause . For purposes of this Agreement, “Cause” shall be defined to mean any of the following: (i) Executive’s failure, refusal or neglect to perform any of Executive’s material duties or obligations under this Agreement, or any material duties assigned to Executive consistent with the terms of this Agreement (Executive’s inability or failure to perform his obligations hereunder because of his death or incapacity, subject to Employer’s right to terminate Executive’s employment pursuant to Section 11 , including during approved periods of absence, shall not be considered Cause for termination under this provision), or abide by any applicable policy of Employer, or Executive’s breach of any material term or condition of this Agreement, and continuation of such failure, refusal, neglect, or breach after written notice and the expiration of a ten (10) day cure period; provided , however , that it is not the parties’ intention that the Employer shall be required to provide successive such notices, and in the event Employer has provided Executive with a notice and opportunity to cure pursuant to this Section 9.3 , Employer may terminate this Agreement for a subsequent breach similar or related to the breach for which notice was previously given or for a continuing series or pattern of breaches (whether or not similar or related) without providing notice and an opportunity to cure; (ii) commission of any felony or any other crime involving an act of moral turpitude which is harmful to Employer’s business or reputation; (iii) Executive’s action or omission, or knowing allowance of actions or omissions, which are in violation of any law or any of the rules or regulations of the Federal Communications Commission, or which otherwise jeopardize any of the licenses granted to Employer or any member of the Emmis Group in connection with the ownership or operation of any radio station; (iv) theft in any amount; (v) actual or threatened violence against any individual (in connection with his employment hereunder) or another employee; (vi) sexual or other prohibited harassment of others that is actionable under applicable laws; (vii) unauthorized disclosure or use of trade secrets or proprietary or confidential information, as described more fully in Section 7.1 ; (viii) any action which brings Employer or any member of the Emmis Group into public disrepute, contempt, scandal or ridicule, and which is harmful to Employer’s business or reputation; and (ix) any matter constituting cause or gross misconduct under applicable laws.

10. Termination by Employer Without Cause or Voluntary Resignation by Executive for Good Reason .

10.1 Effect of the Termination . If Employer Terminates Executive’s Employment (as defined below) without Cause, or Executive Terminates his Employment for Good Reason (as defined below), then:

(i) Executive shall have no further obligations or liabilities hereunder, except Executive’s obligations under Sections 7 and 8 , which shall survive the termination of this Agreement.

(ii) Employer shall have no further obligations or liabilities hereunder, except that Employer shall:

(a) Pay to Executive any Base Salary which has been earned on or prior to the termination date, but which remains unpaid as of the termination date, in a lump-sum cash payment within two (2) weeks of the termination date;

(b) Pay to Executive any bonus amounts, if any, which Executive earned prior to the termination date pursuant to Section 4 but which are unpaid as of the termination date, in a lump-sum cash payment within two (2) weeks of the termination date;

(c) Pay to Executive a lump-sum cash payment within two (2) weeks of the termination date equal to the total amount of Base Salary that would have been payable to Executive hereunder had the termination not occurred for a period that is the lesser of one (1) year from the termination date or the period between the termination date and September 3, 2013, subject to any applicable tax withholding and deductions as required by law;

(d) Pay or reimburse, for the period applicable under Section 10.1(ii)(c) above, any medical, dental or vision insurance premiums (up to the amount that Employer is paying on behalf of Executive and his eligible dependents immediately prior to the date of termination, e.g., the employer-paid premium) for the continuation of such health coverage for Executive and Executive’s dependents pursuant to the provisions of COBRA or applicable state law. If Employer becomes eligible to participate in any other group insurance program of another employer and elects coverage thereunder, these payments shall cease at that time;

(e) Pay the full amount of Executive’s bonus opportunity pursuant to Section 4.2 (for purposes of clarity only, the Fiscal Year Bonus opportunity applicable with respect to Employer’s Fiscal Year ending February 28, 2014 shall be pro-rated as set forth in Section 4.2 ), as applicable, in a lump-sum cash payment within two (2) weeks after the termination date, for the Fiscal Year in which the termination occurs, subject to applicable tax withholding;

(f) Pay the Completion Bonus described in Section 4.3 in the amounts set forth therein, in a lump-sum cash payment within two (2) weeks after the termination date, subject to applicable taxes and withholding; and

(g) Accelerate in full the vesting of any equity granted to Executive prior to the termination date within two (2) weeks after the termination date (subject to applicable tax withholding and deductions as required by law).

10.2 Definition of Termination of Employment . For purposes of this Agreement, when capitalized, “Terminates Employment,” “Termination of Employment,” or any variation of that term means a separation from service within the meaning of Section 409A (defined below). If Executive’s employment terminates but does not qualify as a separation from service under Section 409A, then Executive shall become entitled to receive the severance pay and benefits set forth in this Agreement at such time as he incurs a separation from service.

10.3 Definition of Good Reason . For purposes of this Section 10 , the term “Good Reason” shall be defined to mean, without Executive’s written consent: (i) a reduction by Employer in Executive’s Base Salary or target Fiscal Year Bonus opportunity from the amounts set forth in this Agreement; (ii) failure of Employer to provide an office to Executive, or Employer requiring Executive to work in an office that is more than thirty-five (35) miles from the location of the Company’s principal executive offices at the time of this Agreement, except for required travel on business of the Company to the extent substantially consistent with Executive’s business travel obligations, or (iii) a material breach of the terms of this Agreement by Employer; provided that Executive has given Employer notice of such breach within thirty (30) days of the initial occurrence of the event that is alleged to constitute Good Reason, such breach remains uncured in the thirty (30) day period after such notice, and Executive terminates his employment no later than ten (10) days after the cure period has expired. Employer shall not take any position that a resignation by Executive for Good Reason fails to constitute on involuntary separation from service for purposes of Section 409A.

11. Termination of Agreement by Employer for Incapacity .

11.1 Termination . If Executive shall become incapacitated (as defined in the Employer’s employee handbook or, if that is not applicable, as reasonably determined by Employer), Employer shall continue to compensate Executive under the terms of this Agreement without diminution and otherwise without regard to such incapacity or nonperformance of duties until Executive has been incapacitated for a cumulative period of six (6) months, at which time Employer may, in its sole discretion, elect to terminate Executive’s employment. The date that Executive’s employment terminates pursuant to this Section 11 is referred to herein as the “Incapacity Termination Date.”

11.2 Obligations after Termination . Executive shall have no further obligations or liabilities hereunder after an Incapacity Termination Date except Executive’s obligations under Sections 7 and 8 , which shall survive the termination or expiration of this Agreement. After an Incapacity Termination Date, Employer shall have no further obligations or liabilities hereunder except that Employer shall, not later than two (2) weeks after an Incapacity Termination Date, pay to Executive those amounts described in Sections 4.3 and 9.2(ii) ; provided , however , that in the event an Incapacity Termination Date occurs at least six (6) months after the commencement of a Fiscal Year during the Term, Employer shall pay to Executive a pro-rated portion of the Fiscal Year Bonus for the Fiscal Year during which the Incapacity Termination Date occurs, such amount to be determined in the sole discretion of Employer. Additionally, Employer shall comply with the provisions of COBRA and the provisions of any Employer benefit plans in which Executive or Executive’s eligible dependents or

beneficiaries are participating at the time of termination. Nothing in this Section 11 shall affect the amount of any benefits which may be payable to Executive under any insurance plan or policy maintained by Employer or Executive or pursuant to any Employer company practice, plan or program applicable to other senior-management-level employees of the Emmis Group.

12. Death of Executive . This Agreement shall terminate immediately upon Executive’s death. In the event of such termination, Employer shall have no further obligations or liabilities hereunder except that Employer shall, not later than two (2) weeks after Executive’s date of death, pay or grant to Executive’s estate or designated beneficiary those amounts described in Sections 4.3 and 9.2(ii) . Additionally, Employer shall comply with the provisions of COBRA and the provisions of any Employer benefit plans in which Executive or Executive’s eligible dependents or beneficiaries are participating at the time of termination. In the event that Executive dies after termination of this Agreement pursuant to Sections 9 , 10 or 11 , all amounts required to be paid by Employer prior to Executive’s death in connection with such termination that remain unpaid as of Executive’s date of death shall be paid to Executive’s estate or designated beneficiary.

13. Termination of the Agreement because of Non-renewal . If this Agreement expires on September 3, 2013 and is not renewed or extended by the parties, Executive shall have no further obligations or liabilities hereunder, except Executive’s obligations under Sections 7 and 8 , which shall survive the expiration of this Agreement. Employer shall have the liabilities and obligations set forth in Section 9.2(ii) above, and shall pay the Fiscal Year Bonus, if any, in accordance with Section 4.2 and the Completion Bonus in accordance with Section 4.3 within two (2) weeks after the expiration of the Agreement.

14. Change in Title/Duties . Notwithstanding anything to the contrary contained herein, at any time upon prior notice to Executive, Employer may change Executive’s duties and responsibilities hereunder, and may change Executive’s titles with Executive’s consent in his sole discretion to a comparable title or may promote Executive to the position of President, Chief Executive Officer or Vice Chairman of the Company without his consent. If Employer elects to exercise its rights under this Section 14 , Employer shall continue for the remainder of the Term (i) to provide Executive with an office within thirty-five (35) miles from the location of the Company’s principal executive offices at the time of this Agreement and (ii) to perform its obligations under Sections 3 , 4 , 5 and 6 of this Agreement.

15. Application of Internal Revenue Code Section 409A . Notwithstanding anything to the contrary set forth herein, any payments and benefits provided under this Agreement (the “Severance Benefits”) that constitute “deferred compensation” within the meaning of Section 409A of the Code and the regulations and other guidance thereunder and any state law of similar effect (collectively “Section 409A”) shall not commence in connection with Executive’s termination of employment unless and until Executive has also incurred a “separation from service” (as such term is defined in Treasury Regulation Section 1.409A-1(h) (“Separation From Service”), unless Employer reasonably determines that such amounts may be provided to Executive without causing Executive to incur the additional 20% tax under Section 409A.

It is intended that each installment of the Severance Benefits payments provided for in this Agreement is a separate “payment” for purposes of Treasury Regulation Section 1.409A-2(b)(2)(i). For the avoidance of doubt, it is intended that payments of the Severance Benefits set forth in this Agreement satisfy, to the greatest extent possible, the exemptions from the application of Section 409A provided under Treasury Regulation Sections 1.409A-1(b)(4), 1.409A-1(b)(5) and 1.409A-1(b)(9). However, if Employer (or, if applicable, the successor entity thereto) determines that the Severance Benefits constitute “deferred compensation” under Section 409A and Executive is, on the termination of service, a “specified employee” of Employer or any successor entity thereto, as such term is defined in Section 409A(a)(2)(B)(i) of the Code, then, solely to the extent necessary to avoid the incurrence of the adverse personal tax consequences under Section 409A, the timing of the Severance Benefit payments shall be delayed until the earlier to occur of: (i) the date that is six months and one day after Executive’s Separation From Service, or (ii) the date of Executive’s death (such applicable date, the “Specified Employee Initial Payment Date”), the Employer (or the successor entity thereto, as applicable) shall (A) pay to Executive a lump sum amount equal to the sum of the Severance Benefit payments that Executive would otherwise have received through the Specified Employee Initial Payment Date if the commencement of the payment of the Severance Benefits had not been so delayed pursuant to this Section and (B) commence paying the balance of the Severance Benefits in accordance with the applicable payment schedules set forth in this Agreement.

This Agreement is intended to comply with Section 409A, and it is intended that no amounts payable hereunder shall be subject to tax under Section 409A. Employer shall use commercially reasonable efforts to comply with Section 409A with respect to payments of benefits hereunder.

16. Adjustments for Changes in Capitalization of Employer . In the event of any change in Employer’s outstanding Shares during the Term by reason of any reorganization, recapitalization, reclassification, merger, stock split, reverse stock split, stock dividend, asset spin-off, share combination, consolidation or other event, the number and class of Shares and/or Options awarded pursuant to Section 4 (and any applicable Option exercise price) and the Share used in the calculation of ASP in Section 4.3 shall be adjusted by the Compensation Committee in its sole and absolute discretion and, if applicable, in accordance with the terms of the Plan, and the option agreement evidencing the grant of the Option. The determination of the Compensation Committee shall be conclusive and binding. All adjustments pursuant to this Section shall be made in a manner that does not result in taxation to the Executive under Section 409A.

17. Notices . All notices, requests, consents and other communications, required or permitted to be given hereunder, shall be made in writing and shall be deemed to have been made as of: (a) the date that is three (3) days after the date of mailing, if sent via the U.S. postal service, first-class, postage-prepaid, (b) the date that is the next date upon which an overnight delivery service (Federal Express or UPS only) will make such delivery, if sent via such overnight delivery service, postage prepaid, (c) the date such delivery is made, if delivered in person to the notice party specified below or (d) the date such delivery is made, if delivered via email. Such notice shall be delivered as follows (or to such other or additional address as either party shall designate by notice in writing to the other in accordance herewith):

(i) If to Employer :

Jeffrey H. Smulyan, Chairman & CEO
Emmis Communications Corporation
40 Monument Circle, Suite 700
Indianapolis, Indiana 46204

With a copy to :

Legal Department
Emmis Communications Corporation
40 Monument Circle, Suite 700
Indianapolis, Indiana 46204

(ii) If to Executive, to Executive at Executive’s address in the personnel records of Employer.

18. Miscellaneous .

18.1 Governing Law . This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Indiana without regard to its conflict of law principles.

18.2 Captions . The section headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of any of the terms and conditions of this Agreement.

18.3 Entire Agreement . This Agreement shall supersede and replace, in all respects, any prior employment agreement entered into between the parties and any such agreement shall immediately terminate and be of no further force or effect. For purposes of the preceding sentence, any change in control, restricted stock, option and other benefits-related agreement shall not constitute a “prior employment agreement.”

18.4 Assignment . This Agreement, and Executive’s rights and obligations hereunder, may not be assigned by Executive to any third party; provided , however , that Executive may designate pursuant to Section 18.6 one (1) or more beneficiaries to receive any amounts that would otherwise be payable hereunder to Executive’s estate. Employer may assign all or any portion of its rights and obligations hereunder to any other member of the Emmis Group or to any successor or assignee of Employer pursuant to a reorganization, recapitalization, merger, consolidation, sale of substantially all of the assets or stock of Employer, or otherwise.

18.5 Amendments; Waivers . Except as expressly provided in the following sentence, this Agreement cannot be changed, modified or amended, and no provision or requirement hereof may be waived, without the written consent of Executive and Employer. Employer may amend this Agreement to the extent that Employer reasonably determines that such change is necessary to comply with Section 409A and further guidance thereunder, provided that such change does not reduce the amounts payable to Executive hereunder. The failure of a party at any time to require performance of any provision hereof shall in no manner affect the right of such party at a later time to enforce such provision. No waiver by a party of the breach of any term or covenant contained in this Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such breach or a waiver of the breach of any other term or covenant contained in this Agreement.

18.6 Beneficiaries . Whenever this Agreement provides for any payment to Executive’s estate, such payment may be made instead to such beneficiary as Executive may have designated in a writing filed with Employer. Executive shall have the right to revoke any such designation and to re-designate a beneficiary by written notice to Employer (or to any applicable insurance company).

18.7 Change in Fiscal Year . If, at any time during the Term, Employer changes its fiscal year, Employer shall make such adjustments to the various dates and target amounts included herein as are necessary or appropriate, provided that no such change shall affect the date on which any amount is payable hereunder.

18.8 Executive’s Warranty and Indemnity . Executive hereby represents and warrants that Executive: (i) has the full and unqualified right to enter into and fully perform this Agreement according to each and every term and condition contained herein; (ii) has not made any agreement, contractual obligation or commitment in contravention of any of the terms and conditions of this Agreement or which would prevent Executive from performing according to any of the terms and conditions contained herein; and (iii) has not entered into any agreement with any prior employer or other person, corporation or entity which

would in any way adversely affect Executive’s or Employer’s right to enter into this Agreement. Furthermore, Executive hereby agrees to fully indemnify and hold harmless Employer and each of its subsidiaries, affiliates and related entities, and each of their respective officers, directors, employees, agents, attorneys, shareholders, insurers and representatives from and against any and all losses, costs, damages, expenses (including attorneys’ fees and expenses), liabilities and claims, arising from, in connection with, or in any way related to, Executive’s breach of any of the representations or warranties contained in this Section 18.8 .

18.9 Venue . Any action to enforce, challenge or construe the terms or making of this Agreement or to recover for its breach shall be litigated exclusively in a state court located in Marion County, Indiana, except that the Employer may elect, at its sole and absolute discretion, to litigate the action in the county or state where any breach by Executive occurred or where Executive can be found. Executive acknowledges and agrees that this venue provision is an essential provision of this Agreement and Executive hereby waives any defense of lack of personal jurisdiction or improper venue.

18.10 Indemnification . Executive shall be entitled to the benefit of the indemnification provisions set forth in Employer’s Amended and Restated Articles of Incorporation and/or By-Laws, or any applicable corporate resolution, as the same may be amended from time to time during the Term (not including any limiting amendments or additions, but including any amendments or additions that add to or broaden the protection afforded to Executive at the time of execution of this Agreement) to the fullest extent permitted by applicable law. Additionally, Employer shall cause Executive to be indemnified in accordance with Chapter 37 of the Indiana Business Corporation Law (the “IBCL”), as the same may be amended from time to time during the Term, to the fullest extent permitted by the IBCL as required to make Executive whole in connection with any indemnifiable loss, cost or expense incurred in Executive’s performance of Executive’s duties and obligations pursuant to this Agreement. Employer shall also maintain during the Term, and for a commercially reasonable period after the Term, an insurance policy providing directors’ and officers’ liability coverage in a commercially reasonable amount. It is understood that the foregoing indemnification obligations shall survive the expiration or termination of the Term.

18.11 Change in Control . Executive and Employer are, as of this day, entering into that certain Emmis Change in Control Severance Agreement effective as of September 4, 2011 (the “2011 CIC Agreement”). Without limiting the generality of the foregoing and notwithstanding anything to the contrary contained in the 2011 CIC Agreement, whichever is then applicable: (i) neither the Completion Bonus nor any bonus amount earned in excess of seventy percent (70%) of Executive’s Base Salary shall be included within the definition of “Bonus Amount” in the 2011 CIC Agreement; and (ii) the consummation of the sale, or series of sales resulting in a sale, of at least seventy percent (70%) of the domestic radio stations in which the Emmis Group owns an interest on the Effective Date constitutes at “Change in Control” under Section 1(e) of the 2011 CIC Agreement.

18.12 Survival . Provision of this Agreement shall survive the termination or expiration of this Agreement to the extent necessary in order to effectuate the intent of the parties hereunder, including without limitation Sections 7 , 8 , 9 , 10 , 11, 12 and 18 .

[Signatures on Following Page]

IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first written above.


	EMMIS OPERATING COMPANY (“Employer”)
	By:	/s/ Jeffrey H. Smulyan
		Jeffrey H. Smulyan
		Chief Executive Officer

	PATRICK WALSH (“Executive”)
	/s/ Patrick Walsh
	Patrick Walsh

Exhibit 10.2

EMMIS OPERATING COMPANY
CHANGE IN CONTROL SEVERANCE AGREEMENT

THIS EMMIS OPERATING COMPANY CHANGE IN CONTROL SEVERANCE AGREEMENT (the “Agreement”) is entered into, effective September 4, 2011 (the “Effective Date”), by and between EMMIS OPERATING COMPANY, an Indiana corporation (the “Company”), and Patrick Walsh (“Executive”).

W I T N E S S E T H

WHEREAS, Executive is an officer and employee of the Company and also an officer of the Company’s sole shareholder, Emmis Communications Corporation (“Parent”) and that the Company derives a material benefit from compensation to executives that is provided by Parent; and

WHEREAS, as a material inducement to Executive’s continued employment with the Company, Parent and Executive entered into a certain Emmis Communications Corporation Change in Control Severance Agreement effective January 1, 2008 (the “Parent CIC Agreement”); and

WHEREAS, on August 19, 2009, the Company’s Amended and Restated Revolving Credit and Term Loan Agreement, to which both the Company and Parent are parties (the “Credit Agreement”), was amended to prohibit Parent from paying compensation to officers or employees of Parent or the Company, and such amendment may have prohibited Parent from performing certain of its obligations under the Parent CIC Agreement; and

WHEREAS, the Company considers the establishment and maintenance of sound and vital management to be essential to protecting and enhancing the best interests of the Company; and

WHEREAS, the Company recognizes that, as is the case with many operating subsidiaries of publicly held corporations, the possibility of a change in control may arise and that such possibility may result in the departure or distraction of management personnel to the detriment of the Company; and

WHEREAS, the Company has determined that it is in the best interests of the Company to secure Executive’s continued services and to ensure Executive’s continued and undivided dedication to his duties in the event of any threat or occurrence of a “Change in Control” (as defined in Section 1) and that it is in the best interests of the Company to eliminate the unnecessary level of uncertainty due to the potential inability of Parent to perform its obligations under Parent CIC Agreement; and

WHEREAS, Executive and Parent have informed the Company that the Parent CIC Agreement will be terminated upon execution of this Agreement in order to ensure Executive does not receive unintended, duplicative benefits in connection with the occurrence of a Change in Control.

NOW, THEREFORE, for and in consideration of the mutual covenants and agreements herein contained, the Company and Executive hereby agree as follows:

1. Definitions . As used in this Agreement, the following terms shall have the respective meanings set forth below:

(a) “Affiliate” means, with respect to a specified person, a person that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, the person specified.

(b) “Base Salary” means Executive’s gross base salary, regardless of whether payable directly by the Company in cash or the stock compensation program or a similar program.

(c) “Board” means the Board of Directors of Parent. The board of directors of the Company agree to cause the Company to implement any and all directions of the Board hereunder.

(d) “Bonus Amount” means the greater of (i) the highest annual incentive bonus earned by Executive from the Company (and/or its Affiliates) during the last three (3) completed fiscal years of the Company immediately preceding Executive’s Date of Termination (annualized in the event Executive was not employed by the Company (or its Affiliates) for the whole of any such fiscal year), or (ii) if the Date of Termination occurs before Executive has been employed for a full fiscal year and before the date on which the Company generally pays bonuses to its executives for the fiscal year in which Executive’s employment commenced, 25% of Executive’s Base Salary for the fiscal year of the Company which includes the Executive’s Date of Termination.

(e) “Cause” means (i) the willful and continued failure of Executive to perform substantially his duties with the Company (other than any such failure resulting from Executive’s incapacity due to physical or mental illness or any such failure subsequent to Executive being delivered a notice of Termination without Cause by the Company or delivering a notice of Termination for Good Reason to the Company) after a written demand for substantial performance is delivered to Executive by the Board which specifically identifies the manner in which the Board believes that Executive has not substantially performed Executive’s duties; provided that Executive has not cured such failure or commenced such performance within 30 days after such demand is given to Executive, or (ii) the willful engaging by Executive in illegal conduct or gross misconduct which is demonstrably and materially injurious to the Company or its Affiliates. For purpose of the preceding sentence, no act or failure to act by Executive shall be considered “willful” unless done or omitted to be done by Executive in bad faith and without reasonable belief that Executive’s action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board, based upon the advice of counsel for the Company (or upon the instructions of the Company’s chief executive officer or another senior officer of the Company) shall be conclusively presumed to be done, or omitted to be done, by Executive in good faith and in the best interests of the Company. Cause shall

not exist unless and until the Company has delivered to Executive a copy of a resolution duly adopted by three-quarters (3/4) of the entire Board (excluding Executive if Executive is a Board member) at a meeting of the Board called and held for such purpose (after reasonable notice to Executive and an opportunity for Executive, together with counsel, to be heard before the Board), finding that in the good faith opinion of the Board an event set forth in clause (i) or (ii) has occurred and specifying the particulars thereof in detail. The Company must notify Executive of any event constituting Cause within ninety (90) days following the Company’s knowledge of its existence or such event shall not constitute Cause under this Agreement.

(f) “Change in Control” means any of the following: (i) any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (other than an Affiliate or any employee benefit plan (or any related trust) of Parent or an Affiliate, and other than Jeffrey H. Smulyan or an Affiliate of Mr. Smulyan) (a “Person”) becomes after the date hereof the beneficial owner of 35% or more of either the then outstanding Stock or the combined voting power of the then outstanding voting securities of Parent entitled to vote in the election of directors, except that no Change in Control shall be deemed to have occurred solely by reason of any such acquisition by a corporation with respect to which, after such acquisition, more than 60% of both the then outstanding common shares of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote in the election of directors are then beneficially owned, directly or indirectly, by the persons who were the beneficial owners of the Stock and voting securities of Parent immediately before such acquisition in substantially the same proportion as their ownership, immediately before such acquisition, of the outstanding Stock and the combined voting power of the then outstanding voting securities of Parent entitled to vote in the election of directors; (ii) individuals who, as of the Effective Date, constitute the Board (the “Incumbent Directors”) cease for any reason to constitute at least a majority of the Board; provided that any individual who becomes a director after the Effective Date whose election, or nomination for election by Parent’s shareholders, was approved by a vote or written consent of at least two-thirds of the directors then comprising the Incumbent Directors shall be considered as though such individual were an Incumbent Director, but excluding, for this purpose, any such individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the directors of Parent (as such terms are used in Rule 14a-11 under the Exchange Act); (iii) the consummation of (A) a merger, reorganization or consolidation with respect to which the individuals and entities who were the respective beneficial owners of the Stock and voting securities of Parent immediately before such merger, reorganization or consolidation do not, after such merger, reorganization or consolidation, beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding common shares and the combined voting power of the then outstanding voting securities entitled to vote in the election of directors of the corporation resulting from such merger, reorganization or consolidation, or (B) the sale or other disposition (or series of sales and/or other dispositions over time resulting in a sale and/or other disposition) of all or substantially all of the assets of the Company or Parent to any Person or Persons as part of the Company’s or Parent’s plan to sell or otherwise dispose of all or substantially all of

such assets; (iv) the approval by the shareholders of the Company or Parent of a liquidation or dissolution of the Company or Parent; (v) Parent ceasing to own at least a majority of the common stock of the Company; or (vi) such other event(s) or circumstance(s) as are determined by the Board to constitute a Change in Control. Notwithstanding the foregoing provisions of this definition, a Change in Control shall be deemed not to have occurred with respect to Executive, if he is, by written agreement executed prior to such Change in Control, a participant on his own behalf in a transaction in which the persons with whom he has the written agreement (and/or their Affiliates) Acquire Parent (as defined below) and, pursuant to the written agreement, Executive has (or has the right to acquire) an equity interest in the resulting entity.

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because any Person acquires beneficial ownership of more than 35% of the then outstanding Stock as a result of the acquisition of the Stock by Parent which reduces the number of shares of Stock outstanding; provided , that if after such acquisition by Parent such person becomes the beneficial owner of additional Stock that increases the percentage of outstanding Stock beneficially owned by such person, a Change in Control shall then occur.

For the purposes of this definition, “Acquire Parent” means the acquisition of beneficial ownership by purchase, merger, or otherwise, of either more than 50% of the Stock (such percentage to be computed in accordance with Rule 13d-3(d)(1)(i) of the SEC under the Exchange Act) or substantially all of the assets of Parent or its successors; “person” means such term as used in Rule 13d-5 of the SEC under the Exchange Act; “beneficial owner” means such term as defined in Rule 13d-3 of the SEC under the Exchange Act; and “group” means such term as defined in Section 13(d) of the Exchange Act.

(g) “Code” means the Internal Revenue Code of 1986, as amended, and regulations and rulings thereunder. References to a particular section of the Code shall include references to successor provisions.

(h) “Date of Termination” means the effective date of the Termination of Executive’s Employment.

(i) “Disability” means Termination of Executive’s Employment by the Company (A) on account of Executive’s disability or incapacity in accordance with Executive’s written employment agreement with the Company, if such agreement contains provisions relating to Termination of Employment for disability or incapacity, or (B) except as provided in clause (A), on account of Executive’s disability or incapacity in accordance with the Company’s policies applicable to salaried employees without a written employment agreement, as in effect immediately before the Change in Control.

(j) “Exchange Act” means the Securities Exchange Act of 1934, as amended. References to a particular section of, or rule under, the Exchange Act shall include references to successor provisions.

(k) “Good Reason” means, without Executive’s express written consent, the occurrence of any of the following events after a Change in Control:

(i) a material diminution in Executive’s authority, duties, or responsibilities; provided, however, Good Reason shall not be deemed to occur upon a change in duties or responsibilities (other than reporting responsibilities) that is solely and directly a result of Parent no longer being a publicly traded entity that does not involve another event described in this Subsection (l);

(ii) a material breach by the Company or an Affiliate of the Company of this Agreement or an employment agreement to which the Executive and the Company or an Affiliate of the Company are parties;

(iii) a material reduction by the Company in Executive’s rate of annual Base Salary, as in effect immediately prior to such Change in Control or as the same may be increased from time to time thereafter (with a reduction or series of reductions exceeding 5% of Base Salary being deemed material);

(iv) any requirement of the Company that Executive (A) be based anywhere more than thirty-five (35) miles from the office where Executive is based at the time of the Change in Control, if such relocation increases Executive’s commute by more than twenty (20) miles, or (B) travel on Company business to an extent materially greater than the travel obligations of Executive immediately prior to such Change in Control;

(v) the failure of the Company to obtain the assumption and, if applicable, guarantee, agreement from any successor (and parent corporation) as contemplated in Section 9(b).

Notwithstanding the preceding, an event described above shall not be considered an event of Good Reason, unless the Executive provides notice to the Company of the existence of such event of Good Reason within ninety (90) days after its first occurrence and the Company fails to cure such event within thirty (30) days after receiving Executive’s notice. Executive’s right to Terminate Employment for Good Reason shall not be affected by Executive’s incapacity due to mental or physical illness, and Executive’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any event or condition constituting Good Reason; provided , however , that Executive must Terminate Employment within ninety (90) days following the end of the thirty (30) day cure period specified above, or such event shall not constitute a termination for Good Reason under this Agreement. Notwithstanding any other provision of this Agreement to the contrary, Termination of Employment by Executive for any reason during the thirty (30)-day period beginning one (1) year after the date of a Change in Control shall constitute a Termination of Employment for Good Reason.

(l) “Qualifying Termination” means a Termination of Executive’s Employment (i) by the Company other than for Cause or (ii) by Executive for Good Reason. Termination of Executive’s employment on account of death, Disability, or Retirement shall not be treated as a Qualifying Termination.

(m) “Retirement” means Executive’s Termination of Employment by reason of retirement (not including any mandatory early retirement) in accordance with the Company’s retirement policy generally applicable to its salaried employees, as in effect immediately prior to the Change in Control, or in accordance with any retirement arrangement established with respect to Executive with Executive’s written consent; provided , however , that under no circumstances shall a resignation with Good Reason be deemed a Retirement.

(n) “SEC” means the Securities and Exchange Commission.

(o) “Stock” means the Class A Common Stock and the Class B Common Stock of Parent, par value $.01 per share.

(p) “Termination of Employment”, “Terminates Employment”, or any variation thereof means Executive’s separation from service within the meaning of Code Section 409A(a)(2)(A)(i).

(q) “Termination Period” means the period of time beginning with a Change in Control and ending two (2) years following such Change in Control. Notwithstanding anything in this Agreement to the contrary, if (i) Executive’s Employment is Terminated prior to a Change in Control for reasons that would have constituted a Qualifying Termination if they had occurred following a Change in Control; (ii) Executive reasonably demonstrates that such termination (or Good Reason event) was at the request of a Person who had indicated an intention or taken steps reasonably calculated to effect a Change in Control, or was otherwise made in connection with a Change in Control; and (iii) a Change in Control involving such third party or an Affiliate of such third party (or a party competing with such third party to effectuate a Change in Control) does occur, then for purposes of this Agreement, the date immediately prior to the date of such Termination of Employment or event constituting Good Reason shall be treated as a Change in Control. For purposes of determining the timing of payments and benefits to Executive under Section 4, the date of the actual Change in Control shall be treated as Executive’s Date of Termination under Section l(h).

2. Obligation of Executive . In the event of a tender or exchange offer, proxy contest, or the execution of any agreement which, if consummated, would constitute a Change in Control, Executive agrees not to voluntarily leave the employ of the Company, other than as a result of Disability, Retirement or an event which would constitute Good Reason if a Change in Control had occurred, until the Change in Control occurs or, if earlier, such tender or exchange offer, proxy contest, or agreement is terminated or abandoned.

3. Term of Agreement . This Agreement shall be effective on the date hereof and shall continue in effect until the Company shall have given three (3) years’ written notice of cancellation; provided , that , notwithstanding the delivery of any such notice, this Agreement shall continue in effect for a period of two (2) years after a Change in Control, if such Change in Control shall have occurred during the term of this Agreement. Moreover, if Executive is party to a written employment agreement with the Company at the time of a Change in Control, and such agreement would otherwise expire during the Termination Period, the term of such agreement shall automatically be extended to the end of the Termination Period or, if earlier, Executive’s Retirement. Notwithstanding anything in this Section to the contrary, except as provided in the second sentence of Section 1(r), this Agreement shall terminate if Executive or the Company Terminates Executive’s Employment prior to a Change in Control.

4. Payments Upon Termination of Employment .

(a) Qualifying Termination — Severance . If during the Termination Period, the Employment of Executive shall Terminate pursuant to a Qualifying Termination, the Company shall provide to Executive:

(i) within ten (10) days following the Date of Termination a lump-sum cash amount equal to the sum of (A) Executive’s Base Salary through the Date of Termination and any bonus amounts which have become payable, to the extent not theretofore paid or deferred, (B) an amount equal to (I) one hundred percent (100%) of Executive’s Base Salary at the rate in effect on the Change in Control (or, if higher, the rate in effect on Termination of Employment), multiplied by (II) a fraction, the numerator of which is the number of days in the fiscal year in which the Date of Termination occurs through the Date of Termination and the denominator of which is three hundred sixty-five (365), and (C) any accrued vacation pay, in each case to the extent not theretofore paid; plus

(ii) within ten (10) days following the Date of Termination, a lump-sum cash amount equal to (i) three (3) times Executive’s highest annual rate of Base Salary during the 36-month period immediately prior to Executive’s Date of Termination plus (ii) three (3) times Executive’s Bonus Amount.

(b) Qualifying Termination — Benefits . If during the Termination Period, the Employment of Executive shall Terminate pursuant to a Qualifying Termination, the Company shall:

(i) for a period of three (3) years following Executive’s Date of Termination, continue to provide Executive (and Executive’s dependents, if applicable) with the same level of accident and life insurance benefits upon substantially the same terms and conditions (including contributions required by Executive for such benefits) as existed immediately prior to Executive’s Date of Termination (or, if more favorable to Executive, as such benefits and terms and conditions existed immediately prior to the Change in Control); provided , that , if Executive cannot continue to participate in the Company plans providing such benefits, the Company shall otherwise provide such benefits on the same after-tax basis as if continued participation had been permitted;

(ii) for the period beginning on Executive’s Date of Termination and continuing for up to 18 months thereafter, reimburse Executive for COBRA premiums paid by Executive for continuation coverage for Executive (and Executive’s dependents, if applicable) under the Company’s medical and dental benefits plan, with such reimbursement being taxable to Executive (any reimbursement required by this paragraph (ii) may be accomplished by the Company’s direct payment of such premium, with such payment taxable to Executive, or by Company reimbursing Executive for such premium within thirty (30) days after Executive’ s payment thereof);

(iii) for the period beginning 19 months after Executive’s Date of Termination and ending 36 months after Executive’s Date of Termination, reimburse Executive for the cost of purchasing coverage substantially similar to that purchased under the Company’s medical and dental benefits plan pursuant to paragraph (ii) above (with no additional pre-existing condition exclusion), with such reimbursement being taxable to Executive (any reimbursement required by this paragraph (iii) may be accomplished by the Company’s direct payment of such premium, with such payment taxable to Executive, or by Company reimbursing Executive for such premium within thirty (30) days after Executive’ s payment thereof);

Notwithstanding the foregoing, (A) in the event Executive (or, if applicable, Executive’s dependent) becomes ineligible for COBRA continuation coverage during the first 18 months following Executive’s Date of Termination, such person shall not be eligible for further coverage under paragraph (ii) or (iii), and (B) subject to the limitations in clause (A), in the event Executive becomes employed by another employer and becomes eligible to receive welfare benefits from such employer, the welfare benefits described in paragraphs (i) through (iii) shall be secondary to such benefits during the period of Executive’s eligibility, but only to the extent that the Company reimburses Executive for any increased cost and provides any additional benefits necessary to give Executive the benefits provided hereunder;

(iv) for two years following the Executive’s Date of Termination (or such shorter period ending upon the subsequent employment of Executive at a level of service commensurate with Executive’s positions with the Company on the Date of Termination), provide outplacement services for Executive from a provider selected by the Company and at the Company’s expense;

(v) make such additional payments and provide such additional benefits to Executive as the Company and Executive may agree in writing, or to which Executive may be entitled under the compensation and benefit plans, policies, and arrangements of the Company.

(c) Nonqualifying Termination . If during the Termination Period the Employment of Executive shall Terminate other than by reason of a Qualifying Termination, the Company shall pay to Executive within thirty (30) days following the Date of Termination, a lump-sum cash amount equal to the sum of Executive’s Base Salary through the Date of Termination and any bonus amounts which have become payable, to the extent not theretofore paid or deferred, and any accrued vacation pay, to the extent not theretofore paid. The Company may make such additional payments and provide such additional benefits to Executive as the Company and Executive may agree in writing, and the Company shall provide Executive with those payments and benefits to which Executive may be entitled under the compensation and benefit plans, policies, and arrangements of the Company or any employment agreement with the Company or an Affiliate of the Company.

(d) Stock Rights . In the event of a Change in Control, all restricted Stock and all options, stock appreciation rights, and/or other stock rights held by Executive with respect to Stock that are exempt from Section 409A (“Stock Rights”) which are not fully vested (and exercisable, if applicable) shall become fully vested and exercisable as of a time established by the Board, which shall be no later than a time preceding the Change in Control which allows Executive to exercise the Stock Rights and cause the stock acquired thereby to participate in the Change in Control transaction. If the Change in Control transaction is structured so that stock participating therein at one time is or may be treated differently from stock participating therein at a different time ( e.g. , a tender offer followed by a squeeze-out merger), the Board shall interpret this Subsection (d) to provide for the required vesting acceleration in a manner designed to allow Executive to exercise the Stock Rights and cause the stock acquired thereby to participate in the earliest portion of the Change in Control transaction. If the consummation of a Change in Control transaction is uncertain ( e.g. , a tender offer in which the tender of a minimum number of shares is a condition to closing, or a voted merger or proxy contest in which a minimum number of votes is a condition to closing), the Board shall apply this Subsection (d) by using its best efforts to determine if and when the Change in Control transaction is likely to close, and proceeding accordingly. To the extent necessary to implement this Subsection d), each agreement reflecting a Stock Right, and each plan, if any, pursuant to which a Stock Right is issued, if any, shall be deemed amended.

(e) Delay in Payments to Specified Employees . Notwithstanding any other provision of this Agreement, if Executive is a specified employee within the meaning of Code Section 409A(a)(2)(B)(i), distributions pursuant to this Section shall be delayed to the earliest day on which such payments are permitted by Code Section 409A(a)(2)(B)(i) and the regulations thereunder.

5. Certain Additional Payments by the Company .

(a) If it is determined (as hereafter provided) that any payment or distribution by the Company or any Affiliate to or for the benefit of Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise pursuant to or by reason of any other agreement, policy, plan, program or arrangement, including without limitation any stock option, stock appreciation right or similar right, or the lapse or termination of any restriction on or the vesting or exercisability of any of the foregoing (a “Payment”), would be subject to the excise tax imposed by Section 4999 of the Code (or any successor provision thereto) or to any similar tax imposed by state or local law, or any interest or penalties with respect to such excise tax (such tax or taxes, together with any such interest and penalties, are hereafter collectively referred to as the “Excise Tax”), then (i) if reduction of the amount payable pursuant to paragraph 4(a)(ii) by no more than ten percent (10%) would result in no Excise Tax being imposed, the amount in paragraph 4(a)(ii) shall be reduced to the minimum extent necessary to result in no Excise Tax being imposed, and (ii) if clause (i) does not apply, Executive will be entitled to receive an additional payment or payments (a “Gross-Up Payment”) in an amount such that, after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including any Excise Tax, imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.

(b) Subject to the provisions of Section 5(f) hereof, all determinations required to be made under this Section 5, including whether an Excise Tax is payable by Executive and the amount of such Excise Tax and whether a Gross-Up Payment is required and the amount of such Gross-Up Payment, will be made by a nationally recognized firm of certified public accountants (the “Accounting Firm”) selected by Executive in his sole discretion. Executive will direct the Accounting Firm to submit its determination and detailed supporting calculations to both the Company and Executive within 15 calendar days after the date of Executive’s termination of employment, if applicable, and any other such time or times as may be requested by the Company or Executive. If the Accounting Firm determines that any Excise Tax is payable by Executive, the Company will pay the required Gross-Up Payment to Executive within five business days after receipt of such determination and calculations. If the Accounting Firm determines that no Excise Tax is payable by Executive, it will, at the same time as it makes such determination, furnish Executive with an opinion that he has substantial authority not to report any Excise Tax on his federal, state, local income or other tax return. Subject to the provisions of this Section 5, any determination by the Accounting Firm as to the amount of the Gross-Up Payment will be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 of the Code (or any successor provision thereto) and the possibility of similar uncertainty regarding applicable state or local tax law at the time of any determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made (an “Underpayment”), consistent with the calculations required to be made hereunder. In the event that an Underpayment is made and the Company exhausts or fails to pursue its remedies pursuant to Section 5(f) hereof and Executive thereafter is required to make a payment of any Excise Tax, Executive will direct the Accounting Firm to determine the amount of the Underpayment that has occurred and to submit its determination and detailed supporting calculations to both the Company and Executive as promptly as possible. Any such Underpayment will be promptly paid by the Company to, or for the benefit of, Executive within five business days after receipt of such determination and calculations.

(c) The Company and Executive will each provide the Accounting Firm access to and copies of any books, records and documents in the possession of the Company, Parent or Executive, as the case may be, reasonably requested by the Accounting Firm, and otherwise cooperate with the Accounting Firm in connection with the preparation and issuance of the determination contemplated by Section 5(b) hereof.

(d) The federal, state and local income or other tax returns filed by Executive will be prepared and filed on a consistent basis with the determination of the Accounting Firm with respect to the Excise Tax payable by Executive. Executive will make proper payment of the amount of any Excise Tax, and at the request of the Company, provide to the Company true and correct copies (with any amendments) of his federal income tax return as filed with the Internal Revenue Service and corresponding state and local tax returns, if relevant, as filed with the applicable taxing authority, and such other documents reasonably requested by the Company, evidencing such payment. If prior to the filing of Executive’s federal income tax return, or corresponding state or local tax return, if relevant, the Accounting Firm determines that the amount of the Gross-Up Payment should be reduced, Executive will within five business days pay to the Company the amount of such reduction.

(e) The fees and expenses of the Accounting Firm for its services in connection with the determinations and calculations contemplated by Sections 5(b) and (d) hereof will be borne by the Company. If such fees and expenses are initially advanced by Executive, the Company will reimburse Executive the full amount of such fees and expenses within five business days after receipt from Executive of a statement therefor and reasonable evidence of his payment thereof.

(f) Executive will notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of a Gross-Up Payment. Such notification will be given as promptly as practicable but no later than 10 business days after Executive actually receives notice of such claim and Executive will further apprise the Company of the nature of such claim and the date on which such claim is requested to be paid (in each case, to the extent known by Executive). Executive will not pay such claim prior to the earlier of (i) the expiration of the 30-calendar-day period following the date on which he gives such notice to the Company and (ii) the date that any payment of amount with respect to such claim is due. If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive will:

(i) provide the Company with any written records or documents in his possession relating to such claim reasonably requested by the Company;

(ii) take such action in connection with contesting such claim as the Company will reasonably request in writing from time to time, including without limitation accepting legal representation with respect to such claim by an attorney competent in respect of the subject matter and reasonably selected by the Company;

(iii) cooperate with the Company in good faith in order effectively to contest such claim; and

(iv) permit the Company to participate in any proceedings relating to such claim;

provided, however, that the Company will bear and pay directly all costs and expenses (including interest and penalties) incurred in connection with such contest and will indemnify and hold harmless Executive, on an after-tax basis, for and against any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. Without limiting the foregoing provisions of this Section 5(f), the Company will control all proceedings taken in connection with the contest of any claim contemplated by this Section 5(f) and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim (provided that Executive may participate therein at his own cost and expense) and may, at its option, either direct Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company will determine; provided, however, that if the Company directs Executive to pay the tax claimed and sue for a refund, the Company will advance the amount of such payment to Executive on an interest-free basis and will indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax or income tax, including interest or penalties with respect thereto, imposed with respect to such advance; and provided further, however, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which the contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s control of any such contested claim will be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Executive will be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

(g) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 5(f) hereof, Executive receives any refund with respect to such claim, Executive will (subject to the Company’s complying with the requirements of Section 5(f) hereof) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after any taxes applicable thereto). If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 5(f) hereof, a determination is made that Executive will not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial or refund prior to the expiration of 30 calendar days after such determination, then such advance will be forgiven and will not be required to be repaid and the amount of such advance will offset, to the extent thereof, the amount of Gross-Up Payment required to be paid pursuant to this Section 5.

(h) To the extent that earlier payment is not required by the preceding provisions of this Section, the Company shall pay amounts required to be paid pursuant to this Section not later than the end of the calendar year next following the calendar year in which Executive remits the related taxes.

6. Withholding Taxes . The Company may withhold from all payments due to Executive (or his beneficiary or estate) hereunder all taxes which, by applicable federal, state, local or other law, the Company is required to withhold therefrom. In the case of the withholding of an Excise Tax, such withholding shall be consistent with any determination made under Section 5.

7. Reimbursement of Expenses . If any contest or dispute shall arise under this Agreement involving termination of Executive’s employment with the Company or involving the failure or refusal of the Company and/or Parent to perform fully in accordance with the terms hereof, the Company shall reimburse Executive, on a current basis, for all reasonable legal fees and expenses, if any, incurred by Executive in connection with such contest or dispute (regardless of the result thereof); provided , however , Executive shall be required to repay any such amounts to the Company to the extent that a court or an arbitration panel issues a final order from which no appeal can be taken, or with respect to which the time period to appeal has expired, setting forth that Executive has not wholly or partially prevailed on at least one material issue in dispute. The amount of expenses eligible for reimbursement in one year pursuant to this Section shall not affect the amount of expenses eligible for reimbursement in any following year. Under no circumstances shall the Company’s reimbursement for expenses incurred in a calendar year be made later than the end of the next following calendar year; provided, however, this requirement shall not alter the Company’s obligation to reimburse Executive for eligible expenses on a current basis.

8. Scope of Agreement . Nothing in this Agreement shall be deemed to entitle Executive to continued employment with the Company or any Affiliate of the Company, and if Executive’s employment with the Company shall terminate prior to a Change in Control, Executive shall have no further rights under this Agreement (except as otherwise provided hereunder); provided , however , that any Termination of Executive’s Employment during the Termination Period shall be subject to all of the provisions of this Agreement.

9. Successors; Binding Agreement .

(a) This Agreement shall not be terminated by any Change in Control or other merger, consolidation, statutory share exchange, sale of substantially all the assets or similar form of corporate transaction involving the Company (a “Business Combination”). In the event of any Business Combination, the provisions of this Agreement shall be binding upon the surviving corporation, and such surviving corporation shall be treated as the Company hereunder. For purposes of clarity only, a corporation acquiring substantially all of the assets of the Company shall be a “surviving corporation” for purposes of the preceding sentence.

(b) The Company agrees that in connection with any Business Combination, it will cause any successor entity to the Company unconditionally to assume (and for any parent corporation in such Business Combination to guarantee), by written instrument delivered to Executive (or his beneficiary or estate), all of the obligations of the Company and Parent hereunder. Failure of the Company to obtain such assumption and guarantee prior to the effectiveness of any such Business Combination that constitutes a Change in Control, shall be a breach of this Agreement and shall constitute Good Reason hereunder, with the event of Good Reason occurring on the date on which such Business Combination becomes effective.

(c) This Agreement shall inure to the benefit of and be enforceable by Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If Executive shall die while any amounts would be payable to Executive hereunder had Executive continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to such person or persons appointed in writing by Executive to receive such amounts or, if no person is so appointed, to Executive’s estate.

10. Notice . (a) For purposes of this Agreement, all notices and other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given when actually received or, if mailed, three days after mailing by registered or certified mail, return receipt requested, or one business day after mailing by a nationally recognized express mail delivery service with instructions for next-day delivery, addressed as follows:

If to the Executive, to the Executive’s principal residence as reflected in the records of the Company.

If to the Company or Parent:

Emmis Operating Company
40 Monument Circle
Suite 700
Indianapolis, Indiana 46204
Attn.: Legal Department

or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.

(b) A written notice of Executive’s Date of Termination by the Company or Executive, as the case may be, to the other, shall (i) indicate the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, set forth in reasonable detail the facts and circumstances claimed to provide a basis for Termination of Executive’s Employment under the provision so indicated and (iii) specify the termination date (which date shall be not less than fifteen (15) (thirty (30), if termination is by the Company for Disability) nor more than sixty (60) days after the giving of such notice). The failure by Executive or the Company to set forth in such notice any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of Executive or the Company hereunder or preclude Executive or the Company from asserting such fact or circumstance in enforcing Executive’s or the Company’s rights hereunder.

11. Full Settlement; Resolution of Disputes . The Company’s obligation to make any payments and provide any benefits pursuant to this Agreement and otherwise to perform its obligations hereunder shall be in lieu and in full settlement of all other severance payments to Executive under any other severance or employment agreement between Executive and the Company, and any severance plan of the Company; provided , however , that if any such other agreement or plan would provide Executive with a greater payment or more or longer benefits in respect of any particular item described hereunder (e.g., severance, welfare benefits), then Executive shall receive such particular item of payment and/or benefit pursuant to such other agreement or plan, in lieu of receiving that particular item pursuant to this Agreement; and provided further , retention bonuses and/or completion bonuses shall not be considered severance pay for purposes of this Section. The Company’s obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against Executive or others. In no event shall Executive be obligated to seek other employment or take other action by way of mitigation of the amounts payable and benefits provided to Executive under any of the provisions of this Agreement and, except as provided in Section 4(b), such amounts shall not be reduced whether or not Executive obtains other employment. The parties agree that any controversy or claim of either party hereto arising out of or in any way relating to this Agreement, or breach thereof, shall be settled by final and binding arbitration in Indianapolis, Indiana by three arbitrators in accordance with the applicable rules of the American Arbitration Association, and that judgment upon any award rendered may be entered by the prevailing party in any court having jurisdiction thereof. The Company shall bear all costs and expenses arising in connection with any arbitration proceeding pursuant to this Section.

12. Employment by Affiliates of the Company . Employment by the Company for purposes of this Agreement shall include employment by any Affiliate.

13. Survival . The respective obligations and benefits afforded to the Company and Executive as provided in Sections 4 (to the extent that payments or benefits are owed as a result of a Termination of Employment that occurs during the term of this Agreement), 5 (to the extent that Payments are made to Executive as a result of a Change in Control that occurs during the term of this Agreement), 6, 7, 9(c) and 11 shall survive the termination of this Agreement.

14. GOVERNING LAW; VALIDITY . THE INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF INDIANA WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF, OF SUCH PRINCIPLES OF ANY OTHER JURISDICTION WHICH COULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF INDIANA. THE INVALIDITY OR UNENFORCEABILITY OF ANY PROVISION OF THIS AGREEMENT SHALL NOT AFFECT THE VALIDITY OR ENFORCEABILITY OF ANY OTHER PROVISION OF THIS AGREEMENT, WHICH OTHER PROVISIONS SHALL REMAIN IN FULL FORCE AND EFFECT.

15. Counterparts . This Agreement may be executed in counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument.

16. Miscellaneous . No provision of this Agreement may be modified or waived unless such modification or waiver is agreed to in writing and signed by Executive and by a duly authorized officer of the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. Failure by Executive or the Company to insist upon strict compliance with any provision of this Agreement or to assert any right Executive or the Company may have hereunder, including, without limitation, the right of Executive to terminate employment for Good Reason, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement. Except as otherwise specifically provided herein, the rights of, and benefits payable to, Executive, his estate or his beneficiaries pursuant to this Agreement are in addition to any rights of, or benefits payable to, Executive, his estate or his beneficiaries under any other employee benefit plan or compensation program of the Company.

17. Termination of Parent CIC Agreement; Replacement . The Parent CIC Agreement is hereby terminated and replaced in its entirely by this Agreement; and the Parent CIC Agreement shall be of no further force and effect.

[signatures appear on the following page(s)]

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by a duly authorized officer of the Company and Executive has executed this Agreement as of the day and year first above written.


	EMMIS OPERATING COMPANY
	By:	/s/ Jeffrey H. Smulyan
		Title: Chief Executive Officer
		Date: September 30, 2011

	EXECUTIVE
	/s/ Patrick M. Walsh
	Date: October 3, 2011

Parent hereby acknowledges and agrees to (i) perform all of its obligations hereunder, including without limitation obligations with respect to the Board hereunder and with respect to Stock and all options, stock appreciation rights, and/or other stock rights held by Executive; and (ii) termination of the Parent CIC Agreement.


	EMMIS COMMUNICATIONS CORPORATION
	By:	/s/ Jeffrey H. Smulyan
		Title: Chief Executive Officer
		Date: September 30, 2011

Exhibit 10.18

EXECUTION VERSION

FOURTH AMENDMENT TO AMENDED AND
RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT

This FOURTH AMENDMENT TO AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT , dated as of November 10, 2011 (this “ Amendment ”), is by and among (a) EMMIS COMMUNICATIONS CORPORATION (the “ Parent ”), an Indiana corporation, (b) EMMIS OPERATING COMPANY (the “ Borrower ”), an Indiana corporation, and (c) certain Lenders and is acknowledged by BANK OF AMERICA, N.A. , as administrative agent (the “ Administrative Agent ”) for itself and the other Lenders party to that certain Amended and Restated Revolving Credit and Term Loan Agreement, dated November 2, 2006, as amended by (i) that certain First Amendment and Consent to Amended and Restated Revolving Credit And Term Loan Agreement, dated as of March 3, 2009, by and among the Borrower, the Parent, the lending institutions party thereto (the “ Lenders ”), the Administrative Agent, Deutsche Bank Trust Company Americas, as syndication agent, General Electric Capital Corporation, Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., “Rabobank Nederland”, New York Branch and SunTrust Bank, as co-documentation agents; (ii) that certain Second Amendment to Amended and Restated Revolving Credit and Term Loan Agreement, dated as of August 19, 2009, among the Borrower, the Parent, the Lenders and the Administrative Agent and (iii) that certain Third Amendment to Amended and Restated Revolving Credit and Term Loan Agreement, dated as of March 29, 2011, among the Borrower, the Parent and, the Lenders and acknowledged by the Administrative Agent (as so amended, the “ Credit Agreement ”). Capitalized terms used herein without definition shall have the meanings assigned to such terms in the Credit Agreement.

WHEREAS , the Borrower and the Parent desire to modify certain terms and conditions of the Credit Agreement as specifically set forth in this Amendment; and

NOW THEREFORE , in consideration of the foregoing premises and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Borrower, the Parent, and the Lenders hereby agree as follows:

§1. Amendments to Credit Agreement . The Credit Agreement is hereby amended as follows:

(a) The following three new definitions are hereby added to Section 1.1 of the Credit Agreement in appropriate alphabetical order:

“ Note Purchase Agreement ” means (i) the Note Purchase Agreement between Emmis Communications Corporation, as Issuer, and Zell Credit Opportunities Master Fund, L.P., as Purchaser, as in effect on the date hereof and (ii) any other note purchase agreement entered into in the future (a) in the form attached hereto as Exhibit L, (b) containing subordination provisions identical to (or more favorable to the Lenders, and in no respect less favorable, than) those set forth in Exhibit L, (c) containing covenants, defaults, events of default and other restrictions no more restrictive than those set forth in Exhibit L, and (d) otherwise meeting all the requirements for Permitted Parent Indebtedness set out in the definition thereof, except the requirements set out in clause (c) thereof relating to subordination (which shall be met pursuant to clause (ii)(b) above) and clause (d) (which shall be met if the note purchase agreement is entered into in the form set forth in Exhibit L), in each of clauses (i) and (ii) as may be amended or modified from time to time in accordance with §10.20 of this Agreement.”

“ Specified Permitted Parent Indebtedness . Indebtedness and all other obligations of the Parent under the Note Purchase Agreement and the Notes issued thereunder, including such additional principal amount as may be added thereto as a result of payments in kind, in accordance with the provisions of the Note Purchase Agreement.”

“ Specified Parent TRS or Escrow . One or more total return swap confirmations or escrow agreements having substantially the same terms as such total return swap confirmations, in each case having substantially the terms set forth in the respective form attached as Exhibit M , to be entered into from time to time between Parent and certain existing holders of the Parent Preferred Stock.”

(b) The definition of the “Distribution” contained in Section 1.1 of the Credit Agreement is hereby amended and restated in its entirety as:

“ Distribution . The declaration or payment of any dividend on or in respect of any shares of any class of Capital Stock of the Borrower or any of its Subsidiaries, other than dividends payable solely in shares of common stock of the Borrower; the purchase, redemption, defeasance, retirement or other acquisition of any shares of any class of Capital Stock of the Parent or of any other parent entity of the Borrower, the Borrower or any of their respective Subsidiaries, directly or indirectly through a Subsidiary or otherwise (including the setting apart of assets for a sinking or other analogous fund to be used for such purpose); the return of capital by the Borrower or its Subsidiaries to its shareholders as such; or any other distribution on or in respect of any shares of any class of Capital Stock of the Borrower or its Subsidiaries.”

(c) The definition of the “Eligible Assignee” contained in Section 1.1 of the Credit Agreement is amended by deleting the period at the end thereof and adding the following proviso thereto:

“ provided , that Zell Credit Opportunities Master Fund, L.P. (“ ZCOF ”) shall be deemed to be an “Eligible Assignee” for purposes of clause (iii) of the first proviso of §17.1(b) hereof and for purposes of permitting ZCOF to purchase the Obligations pursuant to Section 21 of the Note Purchase Agreement (but only in the case of an assignment pursuant to the purchase option referred to in §17.6) and for no other purposes hereunder.”

(d) The definition of “HoldCo Corporate Overhead Expenses” contained in Section 1.1 of the Credit Agreement is hereby amended by replacing the “ and” before clause (ix) thereof with a “,”, adding “and” after clause (ix) thereof and adding a new clause (x) thereof as follows:

“(x) out-of-pocket costs and expenses incurred to unrelated third parties in connection with the Note Purchase Agreement in an aggregate amount not to exceed $250,000 in connection with execution of the Note Purchase Agreement and in an aggregate amount not to exceed $75,000 thereafter.”

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(e) The definition of “HoldCo Corporate Overhead Expenses” contained in Section 1.1 of the Credit Agreement is hereby further amended by adding the following at the beginning of clause (B) of the proviso: “except as specified in clause (x) above,”.

(f) Clause (a)(iv)(2) of the definition of “Investments” is hereby amended and restated in its entirety as:

“(2) are not used or intended for use by the Parent in connection with any redemption, purchase or other acquisition or extinguishment of any Parent Preferred Stock or, solely in the case of (A) above, any Common Stock of the Parent or any other parent entity of the Borrower”

(g) The definition of “Permitted Parent Indebtedness” contained in Section 1.1 of the Credit Agreement is hereby amended by:

(i) amending clause (c) thereof to replace the phrase “Parent Preferred Stock or Common Stock” with “Parent Preferred Stock”; and

(ii) adding the following sentence at the end thereof after clause (f), ““Specified Permitted Parent Indebtedness” meeting the requirements set forth in the definition thereof, including entry into a Note Purchase Agreement meeting the requirements set forth in the definition thereof, shall constitute “Permitted Parent Indebtedness” for all purposes hereunder.”

(h) Clause (ii) of the first sentence in Section 4.4(a) of the Credit Agreement is hereby amended and restated in its entirety as:

“(ii) one hundred percent (100%) of the Net Cash Debt Issuance Proceeds from each issuance (excluding issuances of Specified Permitted Parent Indebtedness to the extent such Net Cash Debt Issuance Proceeds are used concurrently upon receipt thereof solely to (i) acquire one or more Specified Parent TRS or Escrows or (ii) purchase Parent Preferred Stock in a tender offer) by the Parent in accordance with the terms of §10.13.”

(i) A new Section 8.25 is hereby added as follows:

“ 8.25. Representations and Warranties of the Parent . To the extent not otherwise applicable to the Parent, each of the representations and warranties contained in Section 8 of the Credit Agreement shall be deemed to be equally applicable to the Parent with respect to itself for all purposes hereunder.

(j) A new Section 9.18 of the Credit Agreement is hereby added as follows:

“ 9.18. Affirmative Covenants Applicable to the Parent . Notwithstanding anything to the contrary in this Agreement, and without limiting in any respect any of the restrictions of or obligations on the Parent or modifying in any respect any of the other covenants of the Borrower (or related definitions) set forth herein, the obligations set forth in the covenants contained in §§ 9.1, 9.3, 9.5, 9.6 through 9.11, and 9.17 and applicable to the Borrower in this Section 9 and not otherwise applicable to the Parent in accordance with the terms thereof shall be deemed to be equally applicable to the Parent with respect to itself for all purposes hereunder.”

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(k) Adding the following sentence at the end of the last paragraph of Section 10.1 of the Credit Agreement:

“Notwithstanding anything to the contrary in this §10.1, no Indebtedness (other than (x) Indebtedness permitted under clauses (a) through (d), (f), (g), (i) or (j) of this §10.1 or (y) Indebtedness otherwise permitted pursuant to clauses (e) or (k) above, the Net Debt Issuance Proceeds of which are used to repay the Loans or cancel the Revolving Commitments) shall be incurred, assumed, or guaranteed by the Borrower or any of its Subsidiaries nor will the Borrower or any of its Subsidiaries become liable therefor unless at the time of such incurrence, assumption or guarantee or at the time the Borrower or its Subsidiaries become liable therefor and after giving effect thereto, the Total Leverage Ratio shall be less than 3.0:1.0.”

(l) Section 10.2.1(xii) of the Credit Agreement is hereby amended and restated in its entirety as follows:

“[Reserved].”

(m) Section 10.3(j) of the Credit Agreement is hereby amended by removing the “and” at the end of clause (iii) thereof, adding an “and” at the end of clause (iv) thereof and adding a new clause (v) at the end thereof as follows:

“(v) no Investments made pursuant to this clause (j) may be used for the purposes of purchasing or otherwise making any Investment, directly or indirectly, in any Common Stock or Parent Preferred Stock, or in the Capital Stock of any other parent entity of the Borrower.”

(n) Section 10.4(e) of the Credit Agreement is hereby amended by restating clause (ii) thereof in its entirety as follows:

“HoldCo Corporate Overhead Expenses incurred by the Parent (a) in the ordinary course of business for any fiscal quarter of the Parent other than HoldCo Corporate Overhead Expenses incurred pursuant to clause (x) of the definition thereof and (b) in connection with the Note Purchase Agreement in accordance with clause (x) of the definition of HoldCo Corporate Overhead Expenses;”

(o) Section 10.4 of the Credit Agreement is hereby amended by replacing the “.” at the end of clause (f) with “; and” and adding a new clause (g) at the end of Section 10.4 as follows:

“(g) the Parent may use the proceeds of Specified Permitted Parent Indebtedness to make payments pursuant to a Specified Parent TRS or Escrow.”

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(p) Section 10.13.1 of the Credit Agreement is hereby amended by removing the “and” following clause (c) thereof, replacing the period following clause (d) thereof with “, and” and adding a new clause (e) thereof as follows:

“(e) enter, so long as after giving effect thereto, no Default or Event of Default shall have occurred and be continuing, into any Specified Parent TRS or Escrow and exercise any of the rights and perform any of the obligations specified thereunder; provided , however , that promptly, but in any event, no later than five (5) Business Days, after the occurrence of any vote of the holders of Parent Preferred Stock that has the effect of modifying the rights of such holders, the Parent shall terminate the total return swap transaction pursuant to the “Optional Early Termination” procedures specified in the Specified Parent TRS or Escrow.”

(q) Section 10.15 of the Credit Agreement is hereby amended by adding the following sentence at the end of the last paragraph:

“Notwithstanding anything to the contrary in this §10.15, neither the Borrower, any Bridge to Sale Excluded Subsidiary or any Bridge to Sale License Subsidiary shall enter into any Bridge to Sale Third Party Transaction on or after November 10, 2011.”

(r) Section 10.15 of the Credit Agreement is hereby amended by adding the following sentence at the end of the last paragraph:

“The Borrower and its Subsidiaries may become a party to or agree to or effect any disposition or swap of assets with respect to one (1) Bridge to Sale Third Party Transaction (that provides for the sale of the related assets by the Borrower or an Excluded Subsidiary at a future price specified pursuant to the related Bridge to Sale Transaction Documents) at a time prior to the time specified in the related Bridge to Sale Transaction Documents and at a price lower than such specified future price, so long as the aggregate sales price in such transaction is deemed to be for fair market value in the sole reasonable judgment of the Board of Directors of the Parent.”

(s) A new Section 10.19 of the Credit Agreement is hereby added as follows:

“ 10.19 Additional Restrictions Regarding Permitted Parent Indebtedness . For the avoidance of doubt and notwithstanding anything in this Agreement or any other Loan Document to the contrary, (i) no cash payments of any kind, including interest payments, amortization payments, principal repayments, mandatory or voluntary prepayments or redemptions, fee payments, or any purchase, repurchase, defeasance, setting aside of funds or other provision for, or assurance of, payment, in respect of Permitted Parent Indebtedness may be made while the Obligations hereunder remain outstanding (other than the reimbursement of out-of-pocket costs and expenses incurred to unrelated third parties pursuant to clause (x) of the definition of HoldCo Corporate Overhead Expenses) and (ii) no Asset Swaps may be made in exchange for any Permitted Parent Indebtedness; provided , that , additional Common Shares or Parent Preferred Shares may be issued in exchange for Permitted Parent Indebtedness, so long as such issuance or issuances would not result in a Change of Control hereunder.

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(t) A new Section 10.20 of the Credit Agreement is hereby added as follows:

“ 10.20. Modifications to the Purchase Documents . Notwithstanding anything to the contrary contained in the Note Purchase Agreement, the Notes issued thereunder (the “Notes”) or any other document entered into in connection therewith (the “Purchase Documents”), Parent and Borrower will not, and will not permit any of their respective subsidiaries, without the prior written consent of the Required Lenders and of the Administrative Agent on behalf of the Lenders, to (1) increase the maximum principal amount of the Notes under the Note Purchase Agreement other than (a) as a result of disbursements of new amounts used for the purposes set forth in Section 10.13 in the amount of such disbursement or (b) through the making of in kind payments in lieu of cash payments as provided thereunder, (2) provide for payment of interest in cash, (3) change (to earlier dates) the dates upon which payments of principal, interest or other amounts of the Notes are due, (4) change or add any event of default (other than to eliminate any such event of default or increase any grace period related thereto) or any covenant with respect to the Notes; (5) change any redemption or prepayment provisions of the Notes other than to eliminate or defer mandatory redemption or prepayments or reduce make whole amounts or call provisions; (6) alter the subordination provisions with respect to the Notes, including subordinating the Notes to any other indebtedness, (7) take any liens or security interests in any assets of the Parent, Borrower or any of their respective subsidiaries; (8) change or amend any other term of the Purchase Documents if such change or amendment would result in a default under this Agreement, increase the obligations of the Parent, Borrower or any of their Subsidiaries in any material respect or confer additional material rights on Zell Credit Opportunities Master Fund, L.P., as Purchaser, or any other holder of the Notes, in each case in a manner adverse to the Parent, Borrower or any of their respective subsidiaries or the Lenders in any material respect; (9) make the terms of the Note Purchase Agreement more restrictive in any respect for the Parent or the Borrower or any of their subsidiaries than the terms under this Agreement as in effect on November 10, 2011 or (10) otherwise amend, modify, replace or change in any respect any of the terms set out in Sections 20 and 21 of the Note Purchase Agreement or the related definitions.”

(u) A new Section 10.21 of the Credit Agreement is hereby added as follows:

“ 10.21. Negative Covenants Applicable to the Parent . Notwithstanding anything to the contrary in this Agreement, and without limiting in any respect the restrictions on the Parent set forth in Section 10.13 or modifying in any respect any other covenants of the Borrower (or the related definitions) set forth herein, the limitations in the covenants contained in §§ 10.1, 10.2, 10.3, 10.4, 10.5, 10.6, 10.7, 10.8(a), 10.9, 10.10, 10.12 and 10.15 and applicable to the Borrower in this Article 10 and not otherwise applicable to the Parent in accordance with the terms thereof shall be deemed to be equally applicable to the Parent for all purposes hereunder; provided that, nothing in this §10.21 shall prevent the Parent from (i) entering into any agreements for, and having outstanding, any Permitted Parent Indebtedness, not withstanding any requirement to comply with any Total Leverage Ratio requirement set forth in the last paragraph of §10.1; (ii) owning its investment in the common equity of the Borrower or in the Specified Parent TRS or Escrow; (iii) accepting and cancelling Parent Preferred Stock upon the settlement of a Specified Parent TRS or Escrow or (iv) exchanging outstanding Parent Preferred Stock for Permitted Parent Indebtedness, new Parent Preferred Stock or Common Stock.”

(v) Exhibit L and Exhibit M are hereby added to the Credit Agreement as set forth in Annex I and Annex II to this Amendment, respectively.

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(w) Section 14.1 of the Credit Agreement is hereby amended by removing the “or” following clause (z) thereof, replacing the period following clause (aa) thereof with a comma and adding a new clause (bb) thereof as follows:

“(bb) a breach of, or failure to comply with, any of (i) the subordination provisions and the other terms set out in Section 20 of the Note Purchase Agreement or any other provisions therein expressed to be for the benefit of the Administrative Agent, the Required Lenders or any Lender or (ii) pertaining to the Specified Permitted Parent Indebtedness by any of the parties thereto; or

(cc) any default shall occur with respect to all or any part of the Specified Permitted Parent Indebtedness or the holders of all or any part of the Specified Permitted Parent Indebtedness shall accelerate the maturity of all or any part of the Specified Permitted Parent Indebtedness.”

(x) Section 17.1(b) of the Credit Agreement is hereby restating clause (iii) of the first proviso thereof as follows:

“(iii) any assignment of a Commitment must be approved by the Administrative Agent (such consent not to be unreasonably withheld or delayed) unless the Person that is the proposed assignee is itself an Eligible Assignee, unless the definition of Eligible Assignee would itself require the consent of the Administrative Agent with respect to such proposed assignee.”

(y) A new Section 17.6 of the Credit Agreement is hereby added as follows:

“ 17.6. Purchase Option . In consideration of receiving the benefits of Section 20 of the Note Purchase Agreement, each Lender who shall have consented to the Fourth Amendment to this Agreement, dated November 10, 2011 hereby irrevocably agrees, on behalf of itself and any and all of its direct and indirect successors and assigns, to be bound by Section 21 of the Note Purchase Agreement, dated as of November 10, 2011 as if it were a party thereto. The provisions of this §17.6 may not be amended, restated, deleted, removed, supplemented or otherwise modified unless, in addition to satisfaction of the requirements and conditions set forth in §18.13, the consent of the Purchasers (as defined in the Note Purchase Agreement, dated as of November 10, 2011) shall have been obtained. Such Purchasers are express third party beneficiaries of this §17.6 and shall be entitled to enforce this §17.6 against the parties hereto as if such Purchasers were a party hereto.”

§2. Conditions to Effectiveness & Conditions Subsequent .

(a) This Amendment shall become effective as of the date set forth above upon the receipt by the Administrative Agent of the following items (the “ Fourth Amendment Effective Date ”:

(1) there shall exist no Default or Event of Default immediately prior to and immediately after giving effect to this Amendment;

(2) the Administrative Agent shall have received a counterpart signature page to this Amendment, duly executed and delivered by the Borrower, the Parent, each Guarantor, and the Required Lenders;

-7-

(3) the representations and warranties set forth in Section 4 of this Amendment shall be true and correct as of the date of this Amendment;

(4) the Borrower shall have paid to the Agent for the account of each Lender executing the Fourth Amendment on or prior to November 10, 2011 an amendment fee in an amount equal to 0.50% of the Revolving Credit Commitments and outstanding Tranche B Term Loans of such Lender;

(5) the Note Purchase Agreement shall (i) be in form and substance satisfactory to the Required Lenders, (ii) have been executed and delivered by the Borrower and the Purchaser (as defined in the Note Purchase Agreement and (iii) become effective in accordance with the terms thereof.

(6) the Borrower shall have paid to Canyon Capital Advisors LLC all fees and expenses of the Lenders arising in connection with this Amendment and the Note Purchase Agreement (including any fees and disbursements of legal counsel).

(b) Each Lender who shall consent to the terms of this Amendment after it becomes effective pursuant to clause (a) above, but in no event later than ten (10) Business Days after the date of such effectiveness, shall be entitled to receive from the Borrower an amendment fee in an amount equal to 0.50% of the Revolving Credit Commitments and outstanding Tranche B Term Loans of such Lender (the “ Post-Effective Amendment Fee ”). Such Post-Effective Amendment Fee shall be payable within two (2) Business Days of such Lender’s notifying the Agent of its consent to this Amendment. In no event shall any Lender who has been paid an amendment fee pursuant to clause (a) above be entitled to a Post-Effective Amendment Fee pursuant to this clause (b).

§3. Affirmation of Borrower and Parent . The Borrower and the Parent each hereby affirms its Obligations under the Credit Agreement (as amended hereby) and under each of the other Loan Documents to which each is a party and each hereby affirms its absolute and unconditional promise to pay to the Lenders the Loans and all other amounts due under the Credit Agreement (as amended hereby) and the other Loan Documents.

§4. Representations and Warranties . The Parent and the Borrower each hereby represents and warrants to the Administrative Agent and the Lenders as follows:

(a) Representations and Warranties . Each of the representations and warranties contained in Section 8 of the Credit Agreement were true and correct in all material respects (except to the extent such representations and warranties are already qualified by materiality, in which case, such representations and warranties were true and correct in all respects) when made, and, after giving effect to this Amendment, are true and correct in all material respects on and as of the date hereof (except to the extent such representations and warranties are already qualified by materiality, in which case, such representations and warranties are true and correct in all respects), except to the extent of changes resulting from transactions contemplated or permitted by the Credit Agreement and the other Loan Documents and to the extent that such representations and warranties relate specifically to a prior date. To the extent not otherwise applicable to the Parent, each of the representations and warranties contained in Section 8 of the Credit Agreement shall be deemed to be equally applicable to the Parent for all purposes hereunder, and shall be deemed to be made by the Parent with respect to itself in connection with this Section 4.

-8-

(b) Enforceability . The execution and delivery by the Borrower and the Parent of this Amendment, and the performance by the Borrower and the Parent of this Amendment and the Credit Agreement, as amended hereby, are within the corporate authority of each of the Borrower and the Parent and have been duly authorized by all necessary corporate proceedings. This Amendment and the Credit Agreement, as amended hereby, constitute valid and legally binding obligations of each of the Borrower and the Parent, enforceable against it in accordance with their terms, except as limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting the enforcement of creditors’ rights in general.

(c) No Default or Event of Default . No Default or Event of Default has occurred and is continuing, and after giving effect to this Amendment, no Default or Event of Default will result from the execution, delivery and performance by the Parent and the Borrower of this Amendment or from the consummation of the transactions contemplated herein.

(d) Disclosure . None of the information provided to the Administrative Agent and the Lenders on or prior to the date of this Amendment relating to this Amendment contained any untrue statement of material fact or omitted to state any material fact (known to the Parent, the Borrower or any of its Subsidiaries in the case of any document or information not furnished by it or any of its Subsidiaries) necessary in order to make the statements herein or therein not misleading. On the date hereof, neither the Borrower nor the Parent possess any material information with respect to the operations, business, assets, properties, liabilities (actual or contingent) or financial condition of the Parent, the Borrower and their respective Subsidiaries taken as a whole as to which the Lenders do not have access.

§5. No Other Amendments, etc. Except as expressly provided in this Amendment, (a) all of the terms and conditions of the Credit Agreement and the other Loan Documents remain unchanged, and (b) all of the terms and conditions of the Credit Agreement, as amended hereby, and of the other Loan Documents are hereby ratified and confirmed and remain in full force and effect. Nothing herein shall be construed to be an amendment, consent or a waiver of any requirements of the Parent, the Borrower or of any other Person under the Credit Agreement or any of the other Loan Documents except as expressly set forth herein. Nothing in this Amendment shall be construed to imply any willingness on the part of any Lender to grant any similar or future amendment, consent or waiver of any of the terms and conditions of the Credit Agreement or the other Loan Documents. For the avoidance of doubt, this Amendment shall constitute a “Loan Document” under the Credit Agreement and each other Loan Document.

§6. Release . In order to induce the Lenders to enter into this Amendment, the Borrower and the Parent each acknowledges and agrees that: (i) the Borrower and the Parent do not have any claim or cause of action against the Administrative Agent or any Lender (or any of their respective directors, officers, employees or agents); (ii) the Borrower and the Parent do not have any offset right, counterclaim, right of recoupment or any defense of any kind against the Borrower’s or the Parent’s obligations, indebtedness or liabilities to the Administrative Agent or any Lender; and (iii) each of the Administrative Agent and the Lenders has heretofore properly performed and satisfied in a timely manner all of its obligations to the Borrower and the Parent. The Borrower and the Parent

-9-

each wishes to eliminate any possibility that any past conditions, acts, omissions, events, circumstances or matters would impair or otherwise adversely affect any of the Administrative Agent’s and the Lenders’ rights, interests, contracts, collateral security or remedies. Therefore, the Borrower and the Parent each unconditionally releases, waives and forever discharges (A) any and all liabilities, obligations, duties, promises or indebtedness of any kind of the Administrative Agent or any Lender to the Borrower, except the obligations to be performed by the Administrative Agent or any Lender on or after the date hereof as expressly stated in this Amendment, the Credit Agreement and the other Loan Documents, and (B) all claims, offsets, causes of action, right of recoupment, suits or defenses of any kind whatsoever (if any), whether arising at law or in equity, whether known or unknown, which the Borrower or the Parent might otherwise have against the Administrative Agent, any Lender or any of their respective directors, officers, employees or agents, in either case (A) or (B), on account of any past or presently existing condition, act, omission, event, contract, liability, obligation, indebtedness, claim, cause of action, defense, circumstance or matter of any kind.

§7. Execution in Counterparts . This Amendment may be executed in any number of counterparts and by each party on a separate counterpart, each of which when so executed and delivered shall be an original, but all of which together shall constitute one instrument. In proving this Amendment, it shall not be necessary to produce or account for more than one such counterpart signed by the party against whom enforcement is sought.

§8. Interpretation . This Amendment has been the result of limited negotiation involving the Administrative Agent and its counsel. This Amendment, the Credit Agreement and the other Loan Documents are not intended to be construed against the Administrative Agent or any of the Lenders whether or to the extent of the Administrative Agent’s or any Lender’s involvement in the preparation of such documents.

§9. Loan Document . This Amendment is a Loan Document under the terms of the Credit Agreement, and any breach of any provision of this Amendment shall be a Default or Event of Default under the Credit Agreement (as applicable).

§10. Miscellaneous . This Amendment shall for all purposes be construed in accordance with and governed by the laws of the State of New York (excluding the laws applicable to conflicts or choice of law) (other than Section 5-1401 and Section 5-1402 of the General Obligations Laws of the State of New York). The captions in this Amendment are for convenience of reference only and shall not define or limit the provisions hereof. The Borrower agrees to pay to the Administrative Agent, on demand by the Administrative Agent, all reasonable costs and expenses incurred or sustained by the Administrative Agent in connection with the preparation of this Amendment, including reasonable legal fees in accordance with Section 18.2 of the Credit Agreement.

[Remainder of Page Intentionally Left Blank]

-10-

IN WITNESS WHEREOF , the undersigned have duly executed this Amendment as a sealed instrument as of the date first set forth above.


The Borrower : EMMIS OPERATING COMPANY
By:	/s/ J. Scott Enright
	Name:	J. Scott Enright
	Title:	Executive Vice President, General Counsel and Secretary

The Parent : EMMIS COMMUNICATIONS CORPORATION
By:	/s/ J. Scott Enright
	Name:	J. Scott Enright
	Title:	Executive Vice President, General Counsel and Secretary


Lenders: CANYON SPECIAL OPPORTUNITIES MASTER FUND (CAYMAN), LTD.
By:	Canyon Capital Advisors LLC, its Investment Advisor

By:	/s/ Mitchell R. Julis
	Name:	Mitchell R. Julis
	Title:	Authorized Signatory

CANPARTNERS INVESTMENTS IV, LLC
By:	Canyon Capital Advisors LLC, its Manager

By:	/s/ Mitchell R. Julis
	Name:	Mitchell R. Julis
	Title:	Authorized Signatory

Receipt of the preceding Amendment is hereby acknowledged by the Administrative Agent in its role as administrative agent and, solely with respect to Sections 1(c) and 1(x) hereof, approved in such capacity, but the remaining provisions of this Amendment are not consented to by the Administrative Agent, or by Bank of America, N.A., in its capacity as a Lender; provided , however that Bank of America, N.A. may choose, in its sole discretion, to consent to the remaining provisions of this Amendment within ten (10) Business Days of the effectiveness hereof pursuant to Section 2(b).

The Administrative Agent’s acknowledgement of receipt of this Amendment should not be construed as an agreement by the Administrative Agent or Bank of America, N.A., or confirmation by the Administrative Agent or Bank of America, N.A., that such Amendment was completed in accordance with the terms of the Credit Agreement and the other Loan Documents other than with respect to Sections 1(c) and 1(x) hereof.

The Administrative Agent and Bank of America, N.A., as Administrative Agent and Lender, respectively, each reserves all of its rights in connection with the Amendment (other than the Administrative Agent’s consent with respect to (i) the inclusion of ZCOF as an “Eligible Assignee” as provided in Section 1(c) hereof and (ii) the required consent to the assignment to ZCOF as an Eligible Assignee, in each case of (i) and (ii) preceding, only in its role as Administrative Agent to the extent such consent is required from the Administrative Agent by the terms of Section 17.1.(b) of the Credit Agreement).


BANK OF AMERICA, N.A. , as Administrative Agent
By:	/s/ Edna Aguilar Mitchell
	Name:	Edna Aguilar Mitchell
	Title:	Director

RATIFICATION OF GUARANTORS

Each of the undersigned Guarantors hereby (a) acknowledges and consents to the foregoing Amendment and the Borrower’s and the Parent’s execution thereof; (b) joins the foregoing Amendment for the sole purpose of consenting to and being bound by the provisions of Sections 3, 5 and 6 thereof, (c) ratifies and confirms all of their respective obligations and liabilities under the Loan Documents to which any of them is a party and ratifies and confirms that such obligations and liabilities extend to and continue in effect with respect to, and continue to guarantee and secure, as applicable, the Obligations of the Borrower under the Credit Agreement; (d) acknowledges and confirms that the liens and security interests granted by such Guarantor pursuant to the Loan Documents are and continue to be valid and perfected first priority liens and security interests (subject only to Permitted Liens) that secure all of the Obligations on and after the date hereof; (e) acknowledges and agrees that such Guarantor does not have any claim or cause of action against the Administrative Agent or any Lender (or any of its respective directors, officers, employees or agents); and (f) acknowledges, affirms and agrees that such Guarantor does not have any defense, claim, cause of action, counterclaim, offset or right of recoupment of any kind or nature against any of their respective obligations, indebtedness or liabilities to the Administrative Agent or any Lender.


The Guarantors : EMMIS COMMUNICATIONS CORPORATION EMMIS INDIANA BROADCASTING, L.P. , by Emmis Operating Company, its General Partner EMMIS INTERNATIONAL BROADCASTING CORPORATION EMMIS LICENSE CORPORATION OF NEW YORK EMMIS MEADOWLANDS CORPORATION EMMIS PUBLISHING CORPORATION EMMIS PUBLISHING, L.P. , by Emmis Operating Company, its General Partner EMMIS RADIO, LLC , by Emmis Operating Company, its Manager
By:	/s/ J. Scott Enright
	Name:	J. Scott Enright
	Title:	Executive Vice President, General Counsel and Secretary

[Signature Page to Ratification of Guarantors]


The Guarantors (cont) : EMMIS RADIO LICENSE CORPORATION OF NEW YORK EMMIS RADIO LICENSE, LLC , by Emmis Operating Company, its Manager EMMIS TELEVISION LICENSE, LLC , by Emmis Operating Company, its Manager EMMIS TELEVISION BROADCASTING, L.P. , by Emmis Operating Company, its General Partner LOS ANGELES MAGAZINE HOLDING COMPANY, INC. MEDIATEX COMMUNICATIONS CORPORATION ORANGE COAST KOMMUNICATIONS, INC.
By:	/s/ J. Scott Enright
	Name:	J. Scott Enright
	Title:	Executive Vice President, General Counsel and Secretary

Exhibit L

FORM OF NOTE PURCHASE AGREEMENT

ANNEX I

NOTE PURCHASE AGREEMENT

Dated as of November 10, 2011

between

EMMIS COMMUNICATIONS CORPORATION,
as Issuer

and

[PURCHASER],
as Purchaser

TABLE OF CONTENTS


	Page

1. DEFINITIONS AND RULES OF INTERPRETATION		2
1.1 Definitions		2
1.2 Rules of Interpretation		27

2. INITIAL PURCHASE DATE AND SUBSEQUENT PURCHASE DATE TRANSACTIONS		29
2.1 Commitment		29
2.2 Purchase Date Transactions		29

3. TERMS OF THE NOTES		29
3.1 Form of Notes		29
3.2 Interest on Notes		29
3.2.1 Interest Rate; Payment		29
3.2.2 Default Rate		30
3.2.3 Computations; Records		30
3.3 Redemption		30
3.3.1 Payment of Principal and Accrued Interest at Final Maturity		30
3.3.2 Mandatory Redemption of the Notes		30
3.3.3 Optional Redemption of the Notes		32
3.3.4 Pro Rata Treatment of Partial Redemptions		33
3.4 Application of Payments; Pro Rata Treatment		33
3.5 Transfer and Exchange of Notes		34
3.6 Replacement of Notes		34
3.7 No Other Prepayments		34

4. [Reserved]		35

5. [Reserved]		35

6. CERTAIN GENERAL PROVISIONS		35
6.1 [Reserved]		35
6.2 OpCo Non-Compliance Fee		35
6.3 Funds for Payments		35
6.3.1 Payments		35
6.3.2 No Offset, etc.		35
6.3.3 Forms and Certifications		36
6.3.4 Mitigation Obligations		37

7. [Reserved]		37

8. REPRESENTATIONS AND WARRANTIES		37
8.1 Corporate Authority		37
8.1.1 Incorporation; Good Standing		37
8.1.2 Authorization		37

TABLE OF CONTENTS
(continued)


	Page

8.1.3 Enforceability		37
8.2 Governmental Approvals		38
8.3 Title to Properties		38
8.4 Financial Statements and Projections		38
8.4.1 Fiscal Year		38
8.4.2 Financial Statements		38
8.4.3 Projections		38
8.5 No Material Adverse Changes, etc.		39
8.6 Franchises, Patents, Copyrights, etc.		39
8.7 Litigation		39
8.8 No Materially Adverse Contracts, etc.		39
8.9 Compliance with Other Instruments, Laws, Status as Senior Debt, etc.		39
8.10 Tax Status		39
8.11 No Event of Default		40
8.12 Investment Company Acts and Communications Act		40
8.13 Absence of Financing Statements, etc.		40
8.14 [Reserved]		40
8.15 Certain Transactions		40
8.16 Employee Benefit Plans		41
8.16.1 In General		41
8.16.2 Terminability of Welfare Plans		41
8.16.3 Guaranteed Pension Plans		41
8.16.4 Multiemployer Plans		41
8.17 [Reserved]		42
8.18 Environmental Compliance		42
8.19 Subsidiaries, etc.		43
8.20 Disclosure		43
8.21 Licenses and Approvals		43
8.22 Material Agreements		45
8.23 Solvency		45
8.24 Excluded Subsidiaries		45
8.25 Private Offering		45

9. AFFIRMATIVE COVENANTS		45
9.1 Punctual Payment		45
9.2 Maintenance of Office		46
9.3 Records and Accounts		46
9.4 Financial Statements, Certificates and Information		46
9.5 Notices and Other Information		48
9.5.1 Defaults		48
9.5.2 Environmental Events		48
9.5.3 Notices to OpCo Administrative Agent		48
9.5.4 Notice of Litigation and Judgments		48
9.5.5 Notice of FCC Filings		48
9.5.6 [Reserved]		48
9.5.7 Foreign Subsidiaries		49

TABLE OF CONTENTS
(continued)


	Page

9.6 Legal Existence; Conduct of Business; Maintenance of Properties		49
9.7 Insurance		49
9.8 Taxes		50
9.9 Inspection of Properties and Books, etc.		50
9.9.1 General		50
9.9.2 Appraisals		50
9.9.3 Communications with Accountants		50
9.10 Compliance with Laws, Contracts, Licenses, and Permits		51
9.11 Employee Benefit Plans		51
9.12 [Consenting OpCo Lender Notice Addresses		51
9.13 [Reserved]		52
9.14 [Reserved]		52
9.15 [Reserved]		52
9.16 Further Assurances		52
9.17 Bridge to Sale Transactions Generally		52
9.18 Public Disclosure		53
9.19 Use of Proceeds		54
9.20 TRS Transaction Termination		54
9.21 TRS Transaction Disposition		54

10. NEGATIVE COVENANTS		54
10.1 Restrictions on Indebtedness		54
10.2 Restrictions on Liens		55
10.2.1 Permitted Liens		55
10.2.2 Restrictions on Negative Pledges and Upstream Limitations		55
10.3 Restrictions on Investments		55
10.4 Restricted Payments		55
10.5 Merger, Consolidation, Acquisition and Disposition of Assets		56
10.5.1 Mergers and Acquisitions		56
10.5.2 Disposition of Assets		56
10.6 Sale and Leaseback; LMA Agreements		56
10.7 Compliance with Environmental Laws		56
10.8 Subordinated Debt		57
10.9 Employee Benefit Plans		57
10.10 Fiscal Year		57
10.11 Transactions with Affiliates		58
10.12 Certain Intercompany Matters		58
10.13 Activities and Indebtedness of the Issuer		58
10.14 Restrictions on Equity Issuances		58
10.15 Bridge to Sale Transactions Generally		59
10.16 Debt Repurchases		59
10.17 Restrictions on Excluded Subsidiaries		59
10.18 Restrictions on Amendments and Refinancings of the OpCo Credit Agreement		59

iii

TABLE OF CONTENTS
(continued)


	Page

11. [Reserved]		60

12. CONDITIONS		60
12.1 Purchase Documents		60
12.2 Certified Copies of Governing Documents		60
12.3 Corporate or Other Action		60
12.4 Officer’s Certificates		60
12.5 OpCo Credit Agreement		60
12.6 Fourth Amendment to the OpCo Credit Agreement		61
12.7 [Reserved]		61
12.8 Financial Statements		61
12.9 Third Party Consents		61
12.10 [Reserved]		61
12.11 Opinions of Counsel		61
12.12 Compliance Certificate		61
12.13 [Reserved]		62
12.14 Financial Condition		62
12.15 Expenses		62
12.16 [Reserved]		62
12.17 [Reserved]		62
12.18 Accountant’s Letter		62
12.19 [Reserved]		62
12.20 Proceedings and Documents		62

13. CONDITIONS TO EACH PURCHASE DATE		62
13.1 Conditions to Initial Purchase Date		62
13.2 Conditions to each Subsequent Purchase		63

14. EVENTS OF DEFAULT; ACCELERATION; ETC.		64
14.1 Events of Default and Acceleration		64
14.2 [Reserved]		68
14.3 Remedies		68

15. [Reserved]		69

16. [Reserved]		69

17. [Reserved]		69

TABLE OF CONTENTS
(continued)


	Page

18. PROVISIONS OF GENERAL APPLICATION		69
18.1 Setoff		69
18.2 Expenses		69
18.3 Indemnification		70
18.4 Treatment of Certain Confidential Information		70
18.4.1 Confidentiality		70
18.4.2 Prior Notification		71
18.4.3 Other		71
18.5 Survival of Covenants, Etc		71
18.6 Notices		72
18.7 Communications		72
18.8 Governing Law		73
18.9 Consent to Jurisdiction		73
18.10 Headings		73
18.11 Counterparts		73
18.12 Entire Agreement, Etc		74
18.13 WAIVER OF JURY TRIAL		74
18.14 Consents, Amendments, Waivers, Etc		74
18.15 Severability		75
18.16 USA PATRIOT Act Notice		75
18.17 No Advisory or Fiduciary Responsibility		75

19. FCC APPROVAL		76

20. SUBORDINATION		76
20.1 Subordination; Certain Payments Restricted		76
20.1.1 Agreement to Subordinate		76
20.1.2 Third Party Beneficiary		77
20.2 Enforcement; Standstill Period		78
20.2.1 Enforcement		78
20.2.2 Standstill Period for Notes		78
20.3 Payments Held In Trust		79
20.4 Bankruptcy, etc		80
20.4.1 Payments Relating to Obligations		80
20.4.2 Voting Rights		81
20.5 Legend		82
20.6 Rights of Holder of Senior Debt Obligations		82
20.7 Termination of Subordination		82
20.8 Participations or Interests		82

21. Purchase Right		82

Exhibits


Exhibit A		[Reserved]
Exhibit B		OpCo Credit Agreement
Exhibit C		Form of Note
Exhibit D		Projections
Exhibit E		Form of Compliance Certificate
Exhibit F		Form of Officer’s Certificate
Exhibit G		Form of Notice of Purchase
Exhibit H		Form of Assignment and Acceptance
Exhibit I		Form of U.S. Tax Compliance Certificate
Exhibit J		Form of Total Leverage Ratio Certificate

Schedules


Schedule 1		Purchaser Address
Schedule 8.3(a)		Title to Properties
Schedule 8.3(b)		Stations
Schedule 8.5		Restricted Payments
Schedule 8.7		Litigation
Schedule 8.10		Tax Status
Schedule 8.18		Environmental Compliance
Schedule 8.19		Subsidiaries Etc.
Schedule 8.21		FCC Licenses

NOTE PURCHASE AGREEMENT

Equity Group Investments, L.L.C.
Two North Riverside Plaza
Chicago, IL 60606

Date as of November 10, 2011

Emmis Communications Corporation
One Emmis Plaza
40 Monument Circle, Suite 700
Indianapolis, Indiana 46204

Dear Issuer:

WHEREAS, EMMIS COMMUNICATIONS CORPORATION , an Indiana corporation (the “ Issuer ”), has informed us that it has entered into, or will enter into one or more total return swap transactions or escrow agreements intended to accomplish the same economic purposes (each a “ TRS Transaction ”) with one or more holders of its 6.25% Series A Convertible Stock, par value $0.01 per share (the “ Preferred Stock ”) pursuant to which, among other things, the Issuer will make a cash payment to such holders on the effective date of the applicable TRS Transaction and in return such holders agree to deliver the applicable shares of Preferred Stock to the Issuer on the settlement date of the applicable TRS Transaction;

WHEREAS, in order to obtain funds to fund its obligations under the TRS Transactions or to complete a Tender Offer, the Issuer has requested that, [PURCHASER], a Delaware limited partnership, purchase one or more subordinated notes (individually a “ Note ” and collectively the “ Notes ”), all as set forth in this Note Purchase Agreement (the “ Purchase Agreement ”); provided that the aggregate original principal amount of the Notes shall not exceed $35,000,000;

WHEREAS, the Purchaser is willing to purchase the Notes in an aggregate original principal amount not to exceed $35,000,000, subject to the terms and conditions hereof;

NOW, THEREFORE, for good and valuable consideration the receipt of which is hereby acknowledged, the Issuer and the Purchaser hereby agree as follows:

1. DEFINITIONS AND RULES OF INTERPRETATION .

1.1 Definitions

The following terms shall have the meanings set forth in this §1.1 or elsewhere in the provisions of this Purchase Agreement referred to below:

Acquiring Purchaser . See §21(b).

Affiliate . With respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto. Without limiting the generality of the foregoing, a Person (for purposes of this sentence, the “ specified person ”) shall be deemed to be Controlled by another Person if such other Person possesses, directly or indirectly, power to vote ten percent (10%) or more of the securities having ordinary voting power for the election of directors, managing general partners or the equivalent of the specified person. When used with respect to the Purchaser, the term “Affiliate” shall include any investment manager, investment advisor or general partner of the Purchaser, the general partner of any investment manager or investment advisor of the Purchaser and any investment or similar fund that is managed by the same investment manager or investment advisor as the Purchaser or an Affiliate of such investment manager or advisor.

Applicable Pension Legislation . At any time, any pension or retirement benefits legislation (be it national, federal, provincial, territorial or otherwise) then applicable to the Issuer or any of its Subsidiaries.

Approved Bridge to Sale Transfer . A Bridge to Sale Transfer that (a) prior to the Discharge of the OpCo Credit Agreement, is approved in writing by the OpCo Administrative Agent in its sole discretion and subject to the terms and conditions of the OpCo Credit Agreement (as in effect on the date hereof) and (b) on or after the Discharge of the OpCo Credit Agreement, is approved by the Purchaser in its sole discretion and subject to the terms and conditions hereof.

Asset Sale . Any one or a series of related transactions (other than an Asset Swap) pursuant to which any of the Issuer, any Subsidiary, the Austin Partnership or RAM, conveys, sells, leases, licenses or otherwise transfers or disposes of, directly or indirectly (including by means of a simultaneous exchange of Stations and any Bridge to Sale Transfer), any of its properties, businesses or assets (other than to the Issuer or any wholly-owned Subsidiary of Emmis OpCo) (including the sale of the interest held by the Issuer or any of its Subsidiaries in the Austin Partnership or in RAM and the sale or issuance of Capital Stock of any Subsidiary other than to the Issuer or any wholly-owned Subsidiary of Emmis OpCo) whether owned on the date hereof or thereafter acquired.

Asset Swap . Any transfer of assets of any of the Issuer, any Subsidiary, the Austin Partnership or RAM to any Person other than the Issuer or a wholly-owned Subsidiary of Emmis OpCo in exchange for assets of such Person if such exchange would qualify, whether in part or in full, as a like-kind exchange pursuant to §1031 of the Code. Nothing in this definition shall require the Issuer, any Subsidiary, the Austin Partnership or RAM to elect that §1031 of the Code be applicable to any Asset Swap.

Assignment and Acceptance . The Assignment and Acceptance substantially in the form attached as Exhibit H hereto.

Attributable Indebtedness . On any date, (a) in respect of any Capitalized Lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, (b) in respect of any monetary obligation under any Synthetic Lease, the capitalized amount of the remaining lease or similar payments under the relevant lease or other applicable agreement or instrument that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease or other agreement or instrument were accounted for as a Capitalized Lease and (c) all Synthetic Debt of such Person.

Austin Investment . The acquisition by Emmis OpCo pursuant to the terms of the Sinclair Definitive Agreement of a 50.1% combined economic and controlling interest in the Austin Partnership and RAM, the sole general partner of the Austin Partnership.

Austin Partnership . That certain Emmis Austin Radio Broadcasting Company, L.P. (formerly known as LBJS Broadcasting Company, L.P.), a Texas limited partnership, and of which RAM is the sole general partner, referred to in the Sinclair Definitive Agreement.

Balance Sheet Date . February 28, 2011.

Bankruptcy Code . Title 11 of the United States Code, and any successor statute, each as amended.

Bridge to Sale Excluded Subsidiary . A wholly-owned Excluded Subsidiary of Emmis OpCo or any wholly-owned Subsidiary of Emmis OpCo organized under the laws of any state of the United States or the District of Columbia and in the case of any such Subsidiary prior to the Discharge of the OpCo Credit Agreement with respect to which Emmis OpCo or such Subsidiary has granted to the OpCo Administrative Agent, for the benefit of the OpCo Lenders and the OpCo Administrative Agent, a first priority perfected security interest in the Capital Stock of such Excluded Subsidiary and has taken all other actions relating thereto to the reasonable satisfaction of the OpCo Administrative Agent.

Bridge to Sale License Subsidiary . A wholly-owned subsidiary of a Bridge to Sale Excluded Subsidiary organized under the laws of any state of the United States or the District of Columbia and the sole asset of which subsidiary is the FCC License associated with the Station owned by such Bridge to Sale Excluded Subsidiary.

Bridge to Sale Third Party Transaction . The sale of a Station (and the FCC License associated with such Station) by a Bridge to Sale Excluded Subsidiary and a Bridge to Sale License Subsidiary, on the one hand, to a non-Affiliate third party, on the other hand.

Bridge to Sale Transaction Conditions . Prior to the Discharge of the OpCo Credit Agreement, the “Bridge to Sale Transaction Conditions” as defined therein and thereafter, the satisfaction of the following conditions:

(i) the sale of the applicable Station (and the FCC License associated with such Station) is consummated on an arm’s length basis to a non-Affiliate third party for fair and reasonable consideration; and

(ii) none of the Issuer, any of its Subsidiaries, any Bridge to Sale Excluded Subsidiary, any Bridge to Sale License Subsidiary or any Affiliate of any of the foregoing has made at any time during the twelve consecutive month period ending immediately prior to, or in connection with, the relevant Bridge to Sale Third Party Transaction, or, after giving effect to the relevant Bridge to Sale Third Party Transaction, will make, an Investment in such non-Affiliate third party purchaser or an Affiliate of such third party which in the aggregate with all such Investments is in excess of 25% of the total consideration received by Emmis OpCo, any Subsidiary of Emmis OpCo, any Bridge to Sale Excluded Subsidiary, any Bridge to Sale License Subsidiary or Affiliate of any of the foregoing in connection with such sale of the Station (and the FCC License associated with such Station), and any such Investment otherwise permitted hereunder shall be in the form of one or more promissory notes or any Capital Stock of such non-Affiliate third party purchaser or Affiliate of such third party received by the applicable Bridge to Sale Excluded Subsidiary and/or Bridge to Sale License Subsidiary as part of the consideration for the relevant Bridge to Sale Third Party Transaction; and

(iii) at least seventy-five percent (75%) of the consideration received by such Bridge to Sale Excluded Subsidiary, Bridge to Sale License Subsidiary or any other Affiliate of Emmis OpCo (as applicable) is in the form of cash and is received upon the consummation of the sale of such Station (and the FCC License associated with such Station); and

(iv) such sale is consummated in accordance with the Bridge to Sale Transaction Documents.

Bridge to Sale Transaction Documents . Collectively, (i) an asset sale agreement, put-call agreement or such other agreement (whether written or otherwise) pursuant to which, among other things, a Bridge to Sale Excluded Subsidiary and a Bridge to Sale License Subsidiary agrees to sell, transfer or otherwise dispose of the Station (and the FCC License associated with such Station) owned by such Person to a non-Affiliate third party and/or (ii) any LMA Agreement relating to such Station (including the FCC License associated with such Station), all in form, scope and substance satisfactory to the OpCo Administrative Agent.

Bridge to Sale Transfer . The transfer by Emmis OpCo or any of its Subsidiaries of a Station and the FCC License associated with such Station to one or more Excluded Subsidiaries.

Business Day . Any day on which banking institutions in Chicago, Illinois and New York, New York are open for the transaction of banking business.

Capital Assets . Fixed assets, both tangible (such as land, buildings, fixtures, machinery and equipment) and intangible (such as patents, copyrights, trademarks, franchises and good will) to the extent such intangible assets have not been acquired in connection with a Permitted Acquisition; provided that Capital Assets shall not include any item customarily charged directly to expense or depreciated over a useful life of twelve (12) months or less in accordance with GAAP.

Capital Expenditures . Amounts paid or Indebtedness incurred by the Issuer or any of its Subsidiaries in connection with (i) the purchase or lease by the Issuer or any of its Subsidiaries of Capital Assets that would be required to be capitalized and shown on the balance sheet of such Person in accordance with GAAP or (ii) the lease of any assets by the Issuer or any of its Subsidiaries as lessee under any Synthetic Lease to the extent that such assets would have been Capital Assets had the Synthetic Lease been treated for accounting purposes as a Capitalized Lease.

Capital Stock . Any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership or equity interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing.

Capitalized Leases . Leases under which the Issuer or any of its Subsidiaries is the lessee or obligor, the discounted future rental payment obligations under which are required to be capitalized on the balance sheet of the lessee or obligor in accordance with GAAP.

CERCLA . See §8.18(a).

Change of Control . An event or series of events as a consequence of which (a) any “person” or “group” (as such terms are used in §§13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”)), excluding any Permitted Holder, shall become, or obtain rights (whether by means of warrants, options or otherwise) to become, the “beneficial owner” (as defined in Rule 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of 35% or more of the Capital Stock of the Issuer unless the Permitted Holders own Capital Stock having a greater percentage of the general voting power of the outstanding voting Capital Stock than that held by such person or group; (b) the board of directors of the Issuer shall cease to consist of a majority of Continuing Directors; (c) the Issuer shall at any time (i) cease to own Capital Stock of any Subsidiary representing the same percentage of outstanding Capital Stock of such Subsidiary as held by the Issuer on the date hereof or as of any later date on which any new Subsidiary is created or acquired, unless the diminution of such percentage is attributable to a disposition of Capital Stock which was permitted hereunder or (ii) cease to own Capital Stock of any Subsidiary which enables it at all times to elect a majority of the board of directors of such Subsidiary unless the disposition of such Capital Stock was permitted hereunder; (d) the Issuer shall cease to directly own one hundred percent (100%) of the issued and outstanding Capital Stock of Emmis OpCo; (e) any change of control under the OpCo Credit Agreement (as in effect on the date hereof); or (f) any change of control under the OpCo Credit Agreement.

Code . The Internal Revenue Code of 1986.

Common Stock . The common stock of the Issuer, par value $.01 per share.

Communications Act . The Communications Act of 1934, as amended, and the rules and regulations of the FCC thereunder as now or hereafter in effect.

Competitor . Any Person (other than a bank or any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of its business) that owns (either directly or indirectly) a legal or beneficial interest attributable under FCC rules to one or more radio stations within any of the markets in which Emmis or any of its Subsidiaries or Excluded Subsidiaries operates.

Compliance Certificate . See §9.4(c).

Consenting OpCo Lenders . Each OpCo Lender that has executed the Fourth Amendment to the OpCo Credit Agreement, dated as of the date hereof, among the Issuer, Emmis OpCo and the lenders party thereto, and each direct or indirect successor and assign of such OpCo Lender.

Consolidated or consolidated . With reference to any term defined herein and except as otherwise expressly provided herein, shall mean that term as applied to the accounts of the Issuer and its Subsidiaries, consolidated in accordance with GAAP.

Consolidated EBITDA . Consolidated EBITDA as defined in the OpCo Credit Agreement (as in effect on the date hereof), and any defined term used therein shall for purposes of calculating Consolidated EBITDA also have the meaning specified in the OpCo Credit Agreement (as in effect on the date hereof), except that “Revert Date” shall be deemed to mean the date the Obligations hereunder and under the other Purchase Documents are indefeasibility paid in full in cash.

Consolidated Net Income . Consolidated Net Income as defined in the OpCo Credit Agreement (as in effect on the date hereof), and any defined term used therein shall for purposes of calculating Consolidated Net Income shall also have the meaning specified in the OpCo Credit Agreement (as in effect on the date hereof), except that “Revert Date” shall be deemed to mean the date the Obligations hereunder and under the other Purchase Documents are indefeasibility paid in full in cash.

Consolidated Total Funded Debt . As of any date of determination, for the Issuer and its Subsidiaries on a consolidated basis, the sum of (a) the outstanding principal amount of all obligations, whether current or long-term, for borrowed money (including Obligations hereunder) and all obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments, (b) all purchase money Indebtedness, (c) all direct obligations arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments, (d) all obligations in respect of the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business), (e) all Attributable Indebtedness, (f) without duplication, all Guarantees with respect to outstanding Indebtedness of the types specified in clauses (a) through (e) above of Persons other than the Issuer or any Subsidiary, and (g) all Indebtedness of the types referred to in clauses (a) through (f) above of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which the Issuer or a Subsidiary is a general partner or joint venturer, unless such Indebtedness is expressly made non-recourse to the Issuer or such Subsidiary.

Continuing Directors . The directors of the Issuer and Emmis OpCo on the Effective Date, and each other director of the Issuer or Emmis OpCo, if (a) in case of the Issuer, such other director’s nomination for election to the board of directors of the Issuer is recommended by at least 66 ² / ₃ % of the then Continuing Directors of the Issuer in his or her election by the shareholders of the Issuer, and (b) in the case of Emmis OpCo, such other director’s nomination for election to the board of directors of Emmis OpCo is recommended by either 66 ² / ₃ % of the then Continuing Directors of the Emmis OpCo or by the majority of the shareholders in his or her election by the shareholders of Emmis OpCo.

Default . See §14.1.

Default Rate . See §3.2.2.

Designated OpCo Obligations . All OpCo Obligations (other than contingent indemnity obligations for which no claim has been made) beneficially owned by each Consenting OpCo Lender.

Discharge of the OpCo Credit Agreement . The first date that (i) the “Obligations” (as defined in the OpCo Credit Agreement (as in effect on the date hereof)), other than contingent obligations for which no claim has been made, have been paid in full in cash other than with the proceeds of a Permitted Refinancing; (ii) all letters of credit issued under the OpCo Credit Agreement (other than letters of credit not constituting Senior Debt Obligations) have been cancelled or cash collateralized at 105% of the aggregate undrawn face amount thereof on terms and conditions and pursuant to documentation reasonably satisfactory to the OpCo Administrative Agent or otherwise assumed under or in connection with a Permitted Refinancing and (iii) all “Commitments” (as defined in the OpCo Credit Agreement (as in effect on the date hereof)) have been terminated.

Discharge of the Senior Debt Obligations . The first date that (i) the Senior Debt Obligations, other than contingent obligations for which no claim has been made, have been paid in full in cash other than with the proceeds of a Permitted Refinancing; (ii) all letters of credit issued under the OpCo Credit Agreement (other than letters of credit not constituting Senior Debt Obligations) have been cancelled or cash collateralized at 105% of the aggregate undrawn face amount thereof on terms and conditions and pursuant to documentation reasonably satisfactory to the OpCo Administrative Agent or otherwise assumed under or in connection with a Permitted Refinancing and (iii) all commitments to lend (other than commitments in excess of the maximum amount of Senior Debt Obligations) have been terminated.

Distribution . The declaration or payment of any dividend on or in respect of any shares of any class of Capital Stock of the Issuer or any of its Subsidiaries, other than dividends payable solely in shares of common stock of the Issuer; the purchase, redemption, defeasance, retirement or other acquisition of any shares of any class of Capital Stock of the Issuer or any of its Subsidiaries, directly or indirectly through a Subsidiary or otherwise (including the setting apart of assets for a sinking or other analogous fund to be used for such purpose); the return of capital by the Issuer or its Subsidiaries to its shareholders as such; or any other distribution on or in respect of any shares of any class of Capital Stock of the Issuer or its Subsidiaries.

Dollars or $ . Dollars in lawful currency of the United States of America.

Effective Date . The date that all of the conditions precedent set forth in Article 12 are satisfied.

Emmis OpCo . Emmis Operating Company, an Indiana corporation.

Employee Benefit Plan . Any employee benefit plan within the meaning of §3(3) of ERISA maintained or contributed to by the Issuer or any ERISA Affiliate, other than a Guaranteed Pension Plan or a Multiemployer Plan.

Environmental Laws . See §8.18(a).

EPA . See §8.18(b).

Equity Issuance . The sale or issuance (whether by public or private offering) by the Issuer, Emmis OpCo or any Subsidiary of either the Issuer or Emmis OpCo of any of its Capital Stock or any Equity-Like Instrument, other than sales or issuances to the Issuer, Emmis OpCo or any Subsidiary of either the Issuer or Emmis OpCo.

Equity-Like Instrument . Any instrument that is equity-like in nature (including without limitation, preferred stock and any instrument issued pursuant to the conversion of convertible Indebtedness into Capital Stock), whether or not such instrument is considered Capital Stock, which evidences a residual interest in the issuer or its assets after the payment of all indebtedness and other liabilities paid prior to equity in accordance with GAAP, and has no put or similar provisions (except for put or similar provisions applicable in the event of an asset sale or change of control), no fixed maturity date and no mandatory redemption date, unless such maturity date or such mandatory redemption date is more than six (6) months after the Final Maturity Date. For the avoidance of doubt, nothing contained herein permitting the existence in any Equity-Like Instrument of put or similar provisions applicable in the event of an asset sale or change of control shall be deemed a consent to the making of any payment resulting from the exercise of such provisions.

ERISA . The Employee Retirement Income Security Act of 1974.

ERISA Affiliate . Any Person which is treated as a single employer with the Issuer under §414 of the Code.

ERISA Reportable Event . A reportable event with respect to a Guaranteed Pension Plan within the meaning of §4043 of ERISA and the regulations promulgated thereunder.

Event of Default . See §14.1.

Excluded Subsidiaries . Collectively, (a) each subsidiary of Emmis International Broadcasting Corporation which is not organized under the laws of the United States or any state or political subdivision of the United States unless included at the election of the Issuer upon prior written notice to the Purchaser, (b) Ciudad, LLC, an Indiana limited liability company and (c) the Austin Partnership and RAM, in each case, until such subsidiary becomes wholly-owned by Emmis OpCo and upon prior written notice to the Purchaser. Notwithstanding the foregoing, no Person may be an Excluded Subsidiary hereunder if (i) it is a “Guarantor” under any indenture or other document or instrument governing Subordinated Debt or has otherwise guaranteed or given assurances of payment or performance under or in respect of any Indebtedness (including Subordinated Debt) of the Issuer or any of the Subsidiaries or (ii) it is a License Subsidiary formed or organized, as applicable, under the laws of the United States.

Excluded Taxes . See §6.3.2.

Exercise Period . See §21(d).

Extraordinary Receipt . Any cash received by or paid to or for the account (without duplication) of the Issuer, any Subsidiary, the Austin Partnership or RAM, not in the ordinary course of business, including tax refunds, pension plan reversions, proceeds of insurance (including business interruption insurance), condemnation awards (and payments in lieu thereof), indemnity payments and any purchase price adjustments. Notwithstanding the foregoing, with respect to Extraordinary Receipts with respect to the assets of the Austin Partnership and RAM, Extraordinary Receipts shall include only the Issuer’s and Emmis OpCo’s and its Subsidiaries’ aggregate equity percentage in the Austin Partnership or RAM of such Extraordinary Receipts.

FCC . The Federal Communications Commission (or any successor agency, commission, bureau, department or other political subdivision of the United States of America).

FCC License . Any license, permit, certificate of compliance, antenna structure registration, franchise, approval or authorization granted or issued by the FCC.

Final Maturity Date . February 1, 2015.

Fourth Amendment to the OpCo Credit Agreement . That certain Fourth Amendment to Amended and Restated Revolving Credit and Term Loan Agreement, dated as of November 10, 2011, by and among (a) Issuer, (b) Emmis OpCo, and (c) certain Lenders and acknowledged by Bank of America, N.A. as administrative agent.

Fund . Any Person that is or will be engaged in making, purchasing, holding or otherwise investing in loans, notes or other extensions of credit, equity interests or other securities or investments.

GAAP . Generally accepted accounting principles in effect in the United States from time to time. Notwithstanding the foregoing, if at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Purchase Document, and the Issuer or the Purchaser shall so request, the Purchaser and the Issuer shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP; provided that , until so amended, (a) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (b) the Issuer shall provide to the Purchaser financial statements and other documents required under this Purchase Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.

Governing Documents . With respect to any Person, its certificate or articles of incorporation, membership agreement, partnership agreement or similar charter document, any by-laws and all shareholder agreements, voting trusts and similar arrangements applicable to any of its Capital Stock.

Governmental Authority . Any foreign, federal, state, regional, local, municipal or other government, or any department, commission, board, bureau, agency, public authority or instrumentality thereof, or any court or arbitrator, including, without limitation, the FCC.

Guarantee . As to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “ primary obligor ”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien). The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “ Guarantee ” as a verb has a corresponding meaning.

Guaranteed Pension Plan . Any employee pension benefit plan within the meaning of §3(2) of ERISA maintained or contributed to by the Issuer or any ERISA Affiliate the benefits of which are guaranteed on termination in full or in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer Plan.

Hazardous Substances . See §8.18(b).

Indebtedness . As to any Person and whether recourse is secured by or is otherwise available against all or only a portion of the assets of such Person and whether or not contingent, but without duplication:

(a) every obligation of such Person for money borrowed,

(b) every obligation of such Person evidenced by bonds, debentures, notes or other similar instruments, including obligations incurred in connection with the acquisition of property, assets or businesses,

(c) every reimbursement obligation of such Person with respect to letters of credit, bankers’ acceptances or similar facilities issued for the account of such Person,

(d) every obligation of such Person issued or assumed as the deferred purchase price of property or services (including securities repurchase agreements but excluding trade accounts payable or accrued liabilities arising in the ordinary course of business which are not overdue or which are being contested in good faith),

(e) every obligation of such Person under any Capitalized Lease,

(f) every obligation of such Person under any Synthetic Lease,

(g) all sales by such Person of (i) accounts or general intangibles for money due or to become due, (ii) chattel paper, instruments or documents creating or evidencing a right to payment of money or (iii) other receivables (collectively “ receivables ”), whether pursuant to a purchase facility or otherwise, other than in connection with the disposition of the business operations of such Person relating thereto or a disposition of defaulted receivables for collection and not as a financing arrangement, and together with any obligation of such Person to pay any discount, interest, fees, indemnities, penalties, recourse, expenses or other amounts in connection therewith,

(h) every obligation of such Person (an “ equity related purchase obligation ”) to purchase, redeem, retire or otherwise acquire for value any shares of Capital Stock issued by such Person or any rights measured by the value of such Capital Stock,

(i) every net obligation of such Person under any forward contract, futures contract, swap, option or other financing agreement or arrangement (including, without limitation, caps, floors, collars and similar agreements), the value of which is dependent upon interest rates, currency exchange rates, commodities or other indices (a “ derivative contract ”),

(j) every obligation in respect of Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent that such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent that the terms of such Indebtedness provide that such Person is not liable therefor and such terms are enforceable under applicable law,

(k) every obligation, contingent or otherwise, of such Person guaranteeing, or having the economic effect of guarantying or otherwise acting as surety for, any obligation of a type described in any of clauses (a) through (j) (the “ primary obligation ”) of another Person (the “ primary obligor ”), in any manner, whether directly or indirectly, and including, without limitation, any obligation of such Person (i) to purchase or pay (or advance or supply funds for the purchase of) any security for the payment of such primary obligation, (ii) to purchase property, securities or services for the purpose of assuring the payment of such primary obligation, or (iii) to maintain working capital, equity capital or other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such primary obligation,

(l) every financial obligation of such Person in connection with the KMVN Sale.

The “ amount ” or “ principal amount ” of any Indebtedness at any time of determination represented by (u) any Indebtedness, issued at a price that is less than the principal amount at maturity thereof, shall be 100% of the stated principal amount thereof, (v) any Capitalized Lease shall be the principal component of the aggregate of the rental obligation under such Capitalized Lease payable over the term thereof that is not subject to termination by the lessee, (w) any sale of receivables shall be the amount of unrecovered capital or principal investment of the purchaser (other than the Issuer or any of its wholly-owned Subsidiaries) thereof, excluding amounts representative of interest earned on such investment, (x) any Synthetic Lease shall be the stipulated loss value, termination value or other equivalent amount, (y) any derivative contract shall be the maximum amount of any termination or loss payment required to be paid by such Person if such derivative contract were, at the time of determination, to be terminated by reason of any event of default or early termination event thereunder, whether or not such event of default or early termination event has in fact occurred and (z) any equity related purchase obligation shall be the maximum fixed redemption or purchase price thereof inclusive of any accrued and unpaid dividends to be comprised in such redemption or purchase price.

Indemnified Liabilities . See §18.3.

Indemnified Person . See §18.3.

Initial Purchase Date . The date upon which the conditions in Article 12 and in §13.1 shall have been satisfied.

Initial Purchaser . [PURCHASER]

Investments . All expenditures made and all liabilities incurred (contingently or otherwise) for the acquisition of Capital Stock or Indebtedness of, or in respect of any guaranties (or other commitments as described under the definition of Indebtedness) of the obligations or Indebtedness of, or obligations of, or loans, advances, capital contributions or transfers of property to, any Person, but excluding accrued interest or earnings thereon. In determining the aggregate amount of Investments outstanding at any particular time: (i) the amount of any Investment represented by a guaranty shall be taken at not less than the principal amount of the obligations guaranteed and still outstanding unless such guaranty shall be for an expressly lower amount or portion of such obligations guaranteed; (ii) there shall not be deducted in respect of any Investment any amounts received as earnings on such Investment, whether as dividends, interest or otherwise, (iii) there shall not be deducted from the aggregate amount of Investments any decrease in the value thereof, and (iv) there shall be deducted in respect of the total amount of Investments (A) the amount of Net Cash Equity Issuance Proceeds of any Equity Issuance by the Issuer or Emmis OpCo, (B) the amount of Net Cash Debt Issuance Proceeds of any issuance of Permitted Issuer Indebtedness, but in each of (A) and (B) above, only to the extent that such proceeds (1) are not subject to a mandatory prepayment under §3.3.2 or §4.4 of the OpCo Credit Agreement (as in effect on the date hereof), (2) are not used or intended for use by the Issuer in connection with any redemption, purchase or other acquisition or extinguishment of any Issuer Preferred Stock or Common Stock of the Issuer, (3) are not used or intended for use in connection with any redemption, purchase or other acquisition or extinguishment of any Indebtedness of the Issuer or any Subsidiary (except a voluntary prepayment of the revolving credit loans at par that does not reduce the revolving credit commitment in connection with the OpCo Credit Agreement (as in effect on the date hereof)), (4) are not used or intended for use in connection with a dutch auction in connection with the OpCo Credit Agreement (as in effect on the date hereof), and (5) of the Issuer are concurrently with such transaction contributed to Emmis OpCo in cash as equity, and (C) any deferred purchase price of Asset Sales (excluding the sale of KMVN), but only to the extent (1) such deferred purchase price was an Investment included in the calculation of outstanding Investments at the time of such Asset Sale and at all times prior to such date of determination, and (2) such amounts are applied to prepay the “Obligations” (as defined in the OpCo Credit Agreement) in accordance with the terms of the OpCo Credit Agreement (as in effect on the date hereof) or, after the Discharge of the Senior Debt Obligations, to prepay the Obligations under this Purchase Agreement. Notwithstanding the foregoing, in no event shall an amount in excess of $25,000,000 be deducted from the determination of the aggregate amount of Investments.

Issuer . Emmis Communications Corporation, an Indiana corporation.

Issuer Corporate Overhead Expenses . Means (i) accounting and audit costs and expenses incurred by the Issuer in the ordinary course of its business in connection with preparing consolidated and consolidating financial reports and tax filings, (ii) Securities and Exchange Commission (the “ SEC ”) filing fees and expenses incurred by the Issuer, (iii) legal fees relating to the corporate maintenance of the Issuer, (iv) director fees incurred by the Issuer, (v) costs and expenses payable by the Issuer for director and officer insurance, (vi) transfer agent fees payable in connection with Capital Stock of the Issuer, (vii) proxy solicitation costs incurred by the Issuer, (viii) franchise taxes and other fees payable to the jurisdictions of incorporation or qualification of the Issuer, (ix) out-of-pocket costs and expenses incurred in connection with this Purchase Agreement, and (x) other similar costs and expenses of the Issuer incurred in the ordinary course of conducting its business; provided, that in no event shall Issuer Corporate Overhead Expenses include (A) employees’ or officers’ salaries and bonuses, (B) debt service and dividends and other distributions in respect of the Capital Stock of the Issuer (other than debt service with respect to the Notes) or (C) costs and expenses incurred by the Issuer in connection with any actual or proposed issuance of indebtedness (other than costs or expenses with respect to the Notes) or equity by the Issuer which is permitted hereunder except to the extent such costs and expenses are paid out of the proceeds of such issuance.

KMVN Sale . See §10.5.2.

License Subsidiaries . Collectively, (a) Emmis License Corporation of New York, Emmis Radio License Corporation, Emmis Radio License Corporation of New York, Emmis Radio License, LLC, Emmis Television License, LLC and (b) any new Subsidiaries that hold licenses to broadcast or transmit radio or television signals formed or acquired in connection with any Permitted Acquisition, or any internal reorganization permitted pursuant to §10.5.1(a) of the OpCo Credit Agreement (as in effect on the date hereof).

Lien . Any mortgage, deed of trust, security interest, pledge, hypothecation, assignment, attachment, deposit arrangement, encumbrance, lien (statutory, judgment or otherwise), or other security agreement or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any Capitalized Lease, any Synthetic Lease, any financing lease involving substantially the same economic effect as any of the foregoing and the filing of any financing statement under the UCC or comparable law of any jurisdiction and with respect to stock, a Person’s right to acquire such stock).

LMA Agreement . Any time brokerage agreement, local marketing agreement or related or similar agreements pursuant to which a Person acquires the right to program substantially all of the time and to sell all of the advertising spots of a Station owned by another non-affiliated person or to otherwise operate a Station in exchange for cash payment, entered into, directly or indirectly, either between (i) Emmis OpCo or any of its Subsidiaries, on the one hand, and any Person other than the Issuer, Emmis OpCo or any of its Subsidiaries or their respective Affiliates, on the other hand or (ii) a Bridge to Sale Excluded Subsidiary, on the one hand, and any Person other than the Issuer, Emmis OpCo or any of its Subsidiaries or their respective Affiliates, on the other hand.

Make-Whole Amount . With respect to the Notes on any redemption date, the present value as of the redemption date of the amount of interest that would have been payable (including interest that would have been payable on capitalized interest) on the Notes being redeemed through the Make-Whole Expiration Date if such Notes had not been redeemed, determined by discounting such interest at a discount rate equal to the applicable Treasury Rate with a maturity date nearest the Make-Whole Expiration Date plus 25 basis points.

Make-Whole Expiration Date . May 10, 2013.

Material Adverse Effect . With respect to any event or occurrence of whatever nature (including any adverse determination in any litigation, arbitration or governmental investigation or proceeding):

(a) a material adverse effect on the business, properties, condition (financial or otherwise), assets, operations or income of the Issuer and its Subsidiaries, taken as a whole;

(b) a material adverse effect on the ability of the Issuer or Emmis OpCo individually or the Issuer and its Subsidiaries, taken as a whole, to perform any of their respective Obligations under any of the Purchase Documents to which it is a party;

(c) any impairment of the validity, binding effect or enforceability of this Purchase Agreement or any of the other Purchase Documents, any material impairment of the rights, remedies or benefits available to the Purchaser under any Purchase Document; or

(d) any “Material Adverse Effect” as defined in the OpCo Credit Agreement (as in effect on the date hereof).

Moody’s . Moody’s Investors Services, Inc.

Multiemployer Plan . Any multiemployer plan within the meaning of §3(37) of ERISA maintained or contributed to by the Issuer or any ERISA Affiliate.

Necessary Authorization . Any license, permit, consent, franchise, order, approval or authorization from, or any filing, recording or registration with, any Governmental Authority (including without limitation the FCC) necessary to the conduct of any business of the Issuer or any of its Subsidiaries or for the ownership, maintenance and operation by such Person of its Stations and other properties or to the performance by such Person of its obligations under any LMA Agreement.

Net Cash Debt Issuance Proceeds . With respect to any issuance of Indebtedness of (a) Emmis OpCo and its Subsidiaries (other than in accordance with the terms of §§10.1.(a), (b), (c), (d), (f), (g), (h), (i), and (j) of the OpCo Credit Agreement (as in effect on the date hereof) and other than any Permitted Refinancing Indebtedness), and (b) the Issuer, the gross cash proceeds received by the issuer for such issuance of Indebtedness, minus the sum of (i) the amount of any mandatory prepayment with the proceeds of such Indebtedness under the OpCo Credit Agreement (as in effect on the date hereof) and (ii) all reasonable and customary transaction expenses (including, without limitation, underwriting discounts and commissions) actually incurred in connection with such issuance.

Net Cash Equity Issuance Proceeds . With respect to any Equity Issuance, the excess of the gross cash proceeds received by the issuer for such Equity Issuance minus the sum of (i) the amount of any mandatory prepayment with the proceeds of such Equity Issuance under the OpCo Credit Agreement (as in effect on the date hereof) and (ii) all reasonable and customary transaction expenses (including, without limitation, underwriting discounts and commissions) actually incurred in connection with such issuance.

Net Cash Sale Proceeds . In respect of any Asset Sale or Asset Swap, the gross cash proceeds (without duplication) received by the Issuer, its Subsidiaries, the Austin Partnership or RAM, as applicable, minus , the sum of (a) all reasonable out-of-pocket fees, commissions and other reasonable and customary direct expenses actually incurred in connection with such Asset Sale or Asset Swap, including any income taxes payable as a result of such Asset Sale and the amount of any transfer or documentary taxes required to be paid by such Person or Persons in connection with such Asset Sale or Asset Swap, plus (b) the aggregate amount of cash so received by such Person or Persons which is required to be used to retire (in whole or in part) any Indebtedness (other than under the Purchase Documents) of such Person or Persons permitted by this Purchase Agreement that was secured by a lien or security interest permitted by this Purchase Agreement and which is required to be repaid in whole or in part (which repayment, in the case of any other revolving credit arrangement or multiple advance arrangement, reduces any commitment thereunder) in connection with such Asset Sale or Asset Swap, plus (c) any cash reserve in an amount reasonably determined by the Issuer to be necessary in connection with indemnification obligations or potential post-closing purchase price adjustments relating to such Asset Sale or Asset Swap so long as (i) the Issuer provides to the Purchaser an accounting of such proceeds reasonably satisfactory to the Purchaser and (ii) the Issuer prepays the loans due under the OpCo Credit Agreement (as in effect on the date hereof) with the remainder of such funds promptly upon settlement or extinguishment of such obligations or adjustments. If any of the Issuer, any Subsidiary, the Austin Partnership or RAM receives any promissory notes or other instruments as part of the consideration for such Asset Sale or Asset Swap or if payment in cash of any portion of the consideration for such Asset Sale or Asset Swap is otherwise deferred or if the amount previously held as a cash reserve for indemnification obligations or purchase price adjustments is reduced, Net Cash Sale Proceeds shall be deemed to include any cash payments in respect of such notes or instruments or otherwise deferred portion of such consideration when and to the extent received by such Person. Notwithstanding the foregoing, with respect to Asset Sales and Asset Swaps of the assets of the Austin Partnership and RAM, Net Cash Sale Proceeds shall be calculated only to the extent of the Issuer’s and its Subsidiaries’ aggregate equity percentage in the Austin Partnership or RAM, as applicable.

Non-Compliance Date . See §6.2.

Non-Compliance Fee . See §6.2.

Non-Excluded Taxes . See §6.3.2.

Notice of Purchase . A notice substantially in the form of Exhibit G .

Notes . The Notes issued by the Issuer in favor of the Purchaser dated as of the date hereof in the original principal amount of up to $35,000,000 substantially in the form attached as Exhibit C hereto and any other Note(s) issued pursuant to §3.5 or §3.6.

Obligations . All indebtedness, obligations and liabilities of the Issuer to the Purchaser, existing on the date of this Purchase Agreement or arising thereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law or otherwise, arising or incurred under or in connection with this Purchase Agreement or the Purchase Documents or the Notes, or other instruments at any time evidencing any thereof. This term includes, without limitation, all interest that accrues after the commencement of any case or proceeding by or against any credit party in bankruptcy whether or not allowed in such case or proceeding.

Obligor . See § 20.1.1.

OpCo Administrative Agent . “Administrative Agent” as defined in the OpCo Credit Agreement.

OpCo Credit Agreement . That certain Amended and Restated Revolving Credit and Term Loan Agreement, dated as of November 2, 2006, by and among Emmis OpCo, the lending institutions party thereto, Bank of America, N.A., as administrative agent, Deutsche Bank Trust Company Americas, as syndication agent, and General Electric Capital Corporation, Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A., Rabobank Nederland, New York Branch and Suntrust Bank, as co-documentation agents, as amended on March 3, 2009, August 19, 2009, March 29, 2011, and November 10, 2011, as attached hereto as Exhibit B and as such agreement may be amended, amended and restated, modified, supplemented, waived, restructured, renewed, replaced, extended, or refinanced (including as Permitted Refinancing Indebtedness) from time to time. At any time after the Discharge of the OpCo Credit Agreement, all references to the OpCo Credit Agreement herein or in any other Purchase Document shall survive the Discharge of the OpCo Credit Agreement and shall continue in full force and effect regardless of the validity, regularity or enforceability of the OpCo Credit Agreement and regardless of any termination, cancellation, amendments, amendments and restatements, supplements, waivers, restructurings, renewals, extensions, replacements, refinancings or other modifications to the OpCo Credit Agreement (as in effect on the date hereof). All references in the OpCo Credit Agreement to “Revert Date” shall be deemed to mean the date the Obligations hereunder under the Notes and under the other Purchase Documents are indefeasibly paid in full in cash.

OpCo Obligations . The “Obligations” (as defined in the OpCo Credit Agreement) (which for the avoidance of doubt includes interest at the default rate, if applicable, and any applicable acceleration prepayment penalties or premiums, in each case, irrespective of whether a Proceeding has been commenced by or against any OpCo Obligor, and such amounts are allowed in such Proceeding), plus (B) any Exit Fee (as defined in that certain backstop letter dated March 27, 2011 among the OpCo Obligors party thereto, and Canyon Capital Advisors LCC) that would be payable to an OpCo Lender upon the redemption or other repayment (including, without limitation, as a result of an acceleration upon any Event of Default, including the commencement of a Proceeding by any OpCo Obligor) of any Designated OpCo Obligations, or under any other circumstance).

OpCo Lenders . “Lenders” as defined in the OpCo Credit Agreement.

OpCo Loan Documents . “Loan Documents” as defined in the OpCo Credit Agreement.

OpCo Obligor . The Issuer, Emmis OpCo and its Subsidiaries, as obligors under the OpCo Loan Documents.

OpCo Required Lenders . “Required Lenders” as defined in the OpCo Credit Agreement.

OpCo Secured Parties . The OpCo Administrative Agent and the OpCo Lenders.

OpCo Security Documents . “Security Documents” as defined in the OpCo Credit Agreement.

Operating Subsidiaries . Collectively, (a) Emmis Radio Corporation, Emmis Meadowlands Corporation, Emmis Publishing Corporation, Mediatex Communications Corporation, Los Angeles Magazine Holding Company, Inc., and Emmis Enterprises, Inc., each an Indiana corporation; (b) Emmis Radio, LLC, an Indiana limited liability company; (c) Emmis International Broadcasting Corporation, a California corporation; (d) the Partnership Subsidiaries and their successors; and (e) any new Subsidiaries acquired in connection with any Permitted Acquisition or any internal reorganization permitted pursuant to §10.5.1 of the OpCo Credit Agreement (as in effect on the date hereof) (a) used to hold assets (other than broadcast licenses) used in connection with, and to conduct operations of, any Station.

Original Obligations . See Permitted Refinancing Indebtedness.

outstanding . With respect to the Notes, the aggregate unpaid principal thereof as of any date of determination.

Partnership Subsidiaries . Collectively, Emmis Indiana Broadcasting, L.P., Emmis Publishing, L.P. and Emmis Television Broadcasting, L.P., each an Indiana limited partnership.

Payment Default . An “Event of Default” under §14.1(a) or §14.1(b) of the OpCo Credit Agreement.

Payment in Full or Paid in Full . (a) Senior Debt Obligations, other than contingent obligations for which no claim has been made, have been paid in full in cash other than with the proceeds of a Permitted Refinancing and (b) all letters of credit issued under the OpCo Credit Agreement have been cancelled or cash collateralized or otherwise assumed in connection with a Permitted Refinancing.

Payment or Distribution . With respect to any indebtedness, obligation or security, (a) any payment or distribution by any Obligor of cash, securities or other assets or property, by set-off or otherwise, on account of such indebtedness, obligation or security, (b) any redemption, purchase or other acquisition of such indebtedness, obligation or security by any Obligor or (c) the granting of any lien or security interest to or for the benefit of the holders of such indebtedness, obligation or security in or upon any payment of any Obligor.

PBGC . The Pension Benefit Guaranty Corporation created by §4002 of ERISA and any successor entity or entities having similar responsibilities.

Permitted §11 Amendment . Either (a) an amendment to §11 of the OpCo Credit Agreement (as in effect on the date hereof) so long as, after giving effect thereto, (i) the definitions used in the calculation of Total Leverage Ratio shall not have changed, (ii) the Total Leverage Ratio continues to be tested as of the last day of each fiscal quarter and (iii) the Total Leverage Ratio does not exceed 5.50:1.00 or (b) any waiver of non-compliance with the covenants set forth in §11 of the OpCo Credit Agreement (as in effect on the date hereof) as of the last day of a fiscal quarter so long as, with respect to the last day of the immediately preceding fiscal quarter, no such waiver was in existence and Emmis OpCo and its Subsidiaries were in compliance with the covenants set forth in §11.

Permitted Acquisition . Any acquisition permitted under §10.5.1.

Permitted Holders . Jeffrey Smulyan, his spouse, his children, his grandchildren, his estate and trusts created for the benefit of any of the foregoing.

Permitted Issuer Indebtedness . Indebtedness under this Purchase Agreement and any other obligations under the Purchase Documents.

Permitted Liens . Liens permitted by §10.2.

Permitted Refinancing . A refinancing, extension, replacement, amendment, amendment and restatement, modification, supplement, renewal or restructuring of the OpCo Indebtedness with the proceeds of Permitted Refinancing Indebtedness.

Permitted Refinancing Indebtedness . Any Indebtedness (“ Refinancing Indebtedness ”) that extends, replaces, amends, amends and restates, modifies, supplements, renews, restructures or refinances the OpCo Obligations as in effect on the date hereof (the “ Original Obligations ”); so long as the aggregate principal amount of term loans and revolving commitments under all such Refinancing Indebtedness does not exceed the sum of (i) the principal amount of the term loans and revolving commitments outstanding under the OpCo Credit Agreement as of the date hereof by more than $25,000,000, plus any accrued and unpaid interest to the date such Permitted Refinancing Indebtedness is incurred and (ii) the costs and expenses incurred in connection with such Refinancing Indebtedness.

Person . Any individual, corporation, limited liability company, partnership, limited liability partnership, trust, other unincorporated association, business, or other legal entity, and any Governmental Authority.

Proceeding . See §20.4.1.

Projections . See §8.4.3.

Public Affiliate . An Affiliate of a Purchaser that is under common control with the Purchaser (but not controlled by the Purchaser) that has a class of equity securities listed on a national securities exchange in the United States and is a reporting company for purposes of the U.S. Securities and Exchange Act of 1934, as amended (the “Exchange Act”) so long as the majority of the members of the board of directors of such Affiliate are independent of the Purchaser and its other Affiliates and Related Funds for purposes of applicable stock exchange rules and the Exchange Act.

Purchase Agreement . This Purchase Agreement, including the Schedules and Exhibits hereto.

Purchase Date . Each date during the Purchase Period on which a Note is purchased by the Purchaser in accordance with the terms hereof; provided there shall be a maximum of three (3) Purchase Dates.

Purchase Documents . Collectively, this Purchase Agreement, the Notes, and any other documents, agreements or instruments contemplated hereby or thereby or executed by the Issuer, a Subsidiary (or an Excluded Subsidiary, to the extent required by the terms of this Purchase Agreement and the other Purchase Documents) from time to time in connection herewith or therewith.

Purchase Option . See §20.1.1(a).

Purchase Option Date . See §21(b).

Purchase Option Event . The occurrence of any of the following: (a) receipt by the Initial Purchaser of a notice (a “ Consensual Restructuring Notice ”) stating that the OpCo Obligors and the OpCo Required Lenders intend to pursue a consensual restructuring, which notice shall include a copy of a duly executed agreement among the OpCo Obligors and the OpCo Required Lenders agreeing to implement a restructuring of the Designated OpCo Obligations pursuant to a “prepackaged” or “prenegotiated” Proceeding, or (b) unless a Consensual Restructuring Notice has been previously delivered, (w) acceleration of the OpCo Obligations in accordance with the terms of the OpCo Loan Documents, which acceleration has not been waived within twenty (20) Business Days, (x) a payment default under the OpCo Loan Documents that has not been cured or waived by the OpCo Required Lenders within twenty (20) Business Days of the occurrence thereof, (y) initiation of a foreclosure action against a material portion of the “Collateral” (as defined in the OpCo Credit Agreement), which has not been stayed or withdrawn within twenty (20) Business Days, or (z) the commencement of any Proceeding by any OpCo Obligor. For greater certainty, following the delivery of a Consensual Restructuring Notice, none of the items in (b) shall be considered Purchase Option Events.

Purchase Option Notice . See §21(b).

Purchase Option Period . See §21(b).

Purchase Option Price . See §21(e)(i).

Purchase Period . The period commencing on the Effective Date and ending at 2:00 p.m. (Chicago, Illinois time) on the 60 ^th day thereafter; provided that if following the purchase on the Initial Purchase Date the Borrower commences a Tender Offer for Preferred Stock, the Purchase Period shall be extended for a period of 30 additional days.

Purchased Letter of Credit Percentage . The aggregate Commitment Percentage (as defined in the OpCo Credit Agreement (as in effect on the date hereof)) of the Total Revolving Credit Commitment (as defined in the OpCo Credit Agreement (as in effect on the date hereof)) of the OpCo Consenting Lenders.

Purchaser . [PURCHASER], a Delaware limited partnership and its successors and assigns and any other Person that becomes a Purchaser pursuant to an assignment executed pursuant to §3.5.

Purchaser Affiliate . Any Affiliate of a Purchaser (other than a Public Affiliate) and any Related Fund.

RAM . Radio Austin Management, L.L.C., the sole general partner of the Austin Partnership, which is and shall remain a single purpose entity whose sole material asset is the general partnership interest in the Austin Partnership.

Real Estate . All real property at any time owned or leased (as lessee or sublessee) by the Issuer or any of its Subsidiaries.

Reference Period . As of any date of determination, the period of four (4) consecutive fiscal quarters of the Issuer and its Subsidiaries ending on such date, or if such date is not a fiscal quarter end date, the period of four (4) consecutive fiscal quarters most recently ended (in each case treated as a single accounting period).

Refinancing . See §10.18.

Refinancing Indebtedness . See Permitted Refinancing Indebtedness.

Related Fund . Any Fund that is administered or managed by the Purchaser or an Affiliate of the Purchaser or any entity or Affiliate of an entity that administers or manages a Purchaser.

Related Parties . With respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.

Requisite Holders . The Purchasers holding at least a majority in principal amount of all Notes then outstanding.

Restricted Payment . In relation to the Issuer and its Subsidiaries, any (a) Distribution, (b) payment in respect of Subordinated Debt, (c) payment of management, consulting or similar fees to Affiliates of the Issuer or such Subsidiary, or (d) derivatives or other transactions with any financial institution, commodities or stock exchange or clearinghouse (a “ Derivatives Counterparty ”) obligating the Issuer or such Subsidiary to make payments to such Derivatives Counterparty as a result of any change in market value of any Capital Stock of the Issuer or such Subsidiary.

Senior Debt Obligations . (i) Any and all obligations, liabilities and indebtedness of any nature that is now or may hereafter be owing by any OpCo Obligor under or in connection with any of the OpCo Loan Documents, whether for principal, accrued and unpaid interest, prepayment or other premium, fees or expenses (which the parties acknowledge shall include the Exit Fee (as defined in that certain backstop letter dated March 27, 2011 among the OpCo Obligors party thereto, and Canyon Capital Advisors LCC)), and whether from time to time reduced and thereafter increased or entirely extinguished and thereafter reincurred, whether before or after the filing of a Proceeding under the Bankruptcy Code, together with any amendments, modifications, renewals or extensions thereof; and (ii) after the commencement of a Proceeding by or against any OpCo Obligor, any interest which, but for the filing by or against such OpCo Obligor of any such Proceeding, would constitute part of the foregoing indebtedness, obligations or liabilities, whether or not a claim for post-filing or post-petition interest is allowed in such Proceeding; provided that the aggregate principal amount of Senior Debt Obligations (excluding interest, premium, fees, expenses or indemnity payments) shall not exceed the sum of (i) $245,057,563.00, plus any accrued and unpaid interest to the date any Permitted Refinancing Indebtedness is incurred, and (ii) the costs and expenses incurred in connection with any Refinancing Indebtedness, as such aggregate principal amount is reduced by actual repayments of any term loan under the OpCo Credit Agreement and any actual permanent reduction of any revolving credit commitment under the OpCo Credit Agreement, in each case, other than with the proceeds of a Permitted Refinancing.

Sinclair Definitive Agreement . That certain Agreement for Purchase of Limited Partner and Member Interests, dated as of March 3, 2003, between Sinclair Telecable, Inc. and Emmis OpCo, together with all other agreements and documents entered into or delivered pursuant to or in connection therewith, relating to the Austin Investment and the governance of, or operation of the business of, the Austin Partnership thereafter.

Solvent . With respect to any Person as of any date of determination, (a) the fair value of the property of such Person (both at fair valuation and at present fair saleable value) is greater than the total amount of liabilities, including contingent liabilities, of such Person, (b) the present fair saleable value of the assets of such Person is not less than the amount that will be required to pay the probable liabilities of such Person on its debts as they become absolute and matured, (c) such Person is able to realize upon its assets and pay its debts and other liabilities, contingent obligations and other commitments as they mature in the normal course of business, (d) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature, and (e) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute unreasonably small capital after giving due consideration to current and anticipated future capital requirements and current and anticipated future business conduct and the prevailing practice in the industry in which such Person is engaged. In computing the amount of contingent liabilities at any time, such liabilities shall be computed in an amount which, in light of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

S&P . Standard & Poor’s Ratings Group.

Standstill Period . See §20.2.

Station . The properties, assets and operating rights constituting a system for transmitting radio or television signals from a transmitter licensed by the FCC.

Subject Preferred Stock . Any Preferred Stock subject to a TRS Transaction at any time during the term hereof.

Subordinated Debt . Collectively, any unsecured Indebtedness issued by the Issuer after the Effective Date that is expressly subordinated and made junior to the payment and performance in full in cash of the Obligations, and evidenced as such by a written instrument containing subordination provisions in form and substance reasonably satisfactory to the Purchaser and approved by the Purchaser in writing; provided that the material terms and conditions of such Subordinated Debt are less restrictive than the terms and conditions set forth in this Purchase Agreement with respect to the Obligations and otherwise reasonably acceptable as reasonably determined by the Purchaser and provided , further that the Purchaser shall have received from the Issuer a certificate from the principal financial or accounting office of the Issuer certifying that the Obligations of the Issuer and its Subsidiaries arising under this Purchase Agreement and the other Purchase Documents constitute “Senior Debt” under and as defined in the definitive documentation governing such Indebtedness, and the incurrence of the Obligations is permitted under the definitive documentation governing such Indebtedness and will not cause a “Default” or “Event of Default” under and as defined in such definitive documentation.

Subsidiary . Any corporation, association, trust, partnership, limited liability company or other business entity of which the designated parent shall at any time own directly or indirectly through a Subsidiary or Subsidiaries at least a majority of the shares of Capital Stock or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency). For purposes of this Purchase Agreement, with respect to the Issuer or any of their respective Subsidiaries, “Subsidiary” shall include all Subsidiaries of the Issuer other than Excluded Subsidiaries, except as otherwise expressly provided.

Synthetic Debt . With respect to any Person as of any date of determination thereof, all obligations of such Person in respect of transactions entered into by such Person that are intended to function primarily as a borrowing of funds (including any minority interest transactions that function primarily as a borrowing) but are not otherwise included in the definition of “Indebtedness” or as a liability on the consolidated balance sheet of such Person and its Subsidiaries in accordance with GAAP.

Synthetic Lease . Any lease of goods or other property, whether real or personal, which is treated as an operating lease under GAAP and as a loan or financing for U.S. income tax purposes.

Tender Offer . A broad solicitation by the Issuer to purchase shares of the Issuer’s 6.25% Series A Convertible Stock pursuant to an offer that remains open for a period that ends no later than 90 days after the Effective Date; provided that no such broad solicitation shall qualify as a Tender Offer hereunder unless the sum of (i) the Tender Offer Purchase Price plus (ii) all TRS Funding Obligations shall not be less than $35,000,000 minus the costs and expenses of the Tender Offer or TRS Transactions paid with proceeds of the Notes.

Tender Offer Purchase Price . The number of shares which the Issuer offers to purchase multiplied by the offer price, assuming the offer is accepted by all holders with respect to all shares.

Total Leverage Ratio . As at any date of determination, the ratio of (a) Consolidated Total Funded Debt outstanding on such date to (b) Consolidated EBITDA for the most recently completed Reference Period.

Treasury Rate . With respect to any prepayment pursuant to §3.3.2 or §3.3.3, the yield to maturity at a time of computation of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) which has become publicly available at least two business days prior to the date of prepayment (or, if such Statistical Release is no longer published, any publicly available source similar market data)) most nearly equal to the period from the applicable date of prepayment to May 1, 2013, provided , however , that if the period from the date of prepayment to May 1, 2013 is not equal to the constant maturity of a United States Treasury security for which a weekly average yield is given, the Treasury Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of United States Treasury securities for which such yields are given, except that if the period from the date of prepayment to May 1, 2013 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year shall be used.

TRS Funding Obligations . All obligations to fund the TRS Transactions that are in fact funded with proceeds of the Notes.

UCC. The Uniform Commercial Code as in effect in the State of New York.

1.2 Rules of Interpretation.

(a) A reference to any document or agreement shall, unless expressly provided otherwise, include such document or agreement as amended, modified or supplemented from time to time in accordance with its terms and the terms of this Purchase Agreement.

(b) The singular includes the plural and the plural includes the singular.

(d) A reference to any Person includes its permitted successors and permitted assigns.

(e) Accounting terms not otherwise defined herein have the meanings assigned to them by GAAP applied on a consistent basis by the accounting entity to which they refer. Notwithstanding the foregoing, for purposes of determining compliance with any covenant or ratio contained herein, all Indebtedness of the Issuer and its Subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof and the effects of FASB ASC 825 on financial liabilities shall be disregarded.

(f) The words “include”, “includes” and “including” are not limiting.

(g) All terms not specifically defined herein or by GAAP, which terms are defined in the UCC have the meanings assigned to them therein, with the term “instrument” being that defined under Article 9 of the UCC.

(h) Reference to a particular “§” refers to that section of this Purchase Agreement unless otherwise indicated.

(i) The words “herein”, “hereof”, “hereunder” and words of like import shall refer to this Purchase Agreement as a whole and not to any particular section or subdivision of this Purchase Agreement.

(j) Unless otherwise expressly indicated, in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including,” the words “to” and “until” each mean “to but excluding,” and the word “through” means “to and including.”

(k) This Purchase Agreement and the other Purchase Documents may use several different limitations, tests or measurements to regulate the same or similar matters. All such limitations, tests and measurements are, however, cumulative and are to be performed in accordance with the terms thereof.

(l) This Purchase Agreement and the other Purchase Documents are the result of negotiation between, and have been reviewed by counsel to, among others, the Purchaser and the Issuer and are the product of discussions and negotiations among all parties. Accordingly, this Purchase Agreement and the other Purchase Documents are not intended to be construed against the Purchaser merely on account of the Purchaser’s involvement in the preparation of such documents.

(m) Any reference contained herein to the “OpCo Credit Agreement (as in effect on the date hereof)” shall refer to the OpCo Credit Agreement attached hereto as Exhibit B regardless of the validity, regularity or enforceability of the OpCo Credit Agreement and regardless of any termination, cancellation, amendments, amendments and restatements, supplements (provided that any amendment of §11 of the OpCo Credit Agreement or the definitions set forth therein (but not any amendment of any other provision of the OpCo Credit Agreement) pursuant to a Permitted §11 Amendment shall be given effect to the extent set forth herein), waivers, restructurings, renewals, extensions, replacements, refinancings or other modifications to the OpCo Credit Agreement. Any restriction, limitation, prohibition, agreement or condition contained herein that is determined by reference to restrictions, limitations, prohibitions, agreements or conditions in the OpCo Credit Agreement (as in effect on the date hereof) shall remain in full force and effect regardless of whether the OpCo Credit Agreement remains in full force and effect, and for purposes hereof all such restrictions, limitations, prohibitions, agreements and conditions shall survive the Discharge of the OpCo Credit Agreement and be binding on the Issuer and its Subsidiaries as if fully set forth herein, regardless of the validity, regularity or enforceability of the OpCo Credit Agreement (as in effect on the date hereof). In addition, (i) any requirement that the OpCo Administrative Agent be in possession of, or have a Lien on, “Collateral” (as defined in the OpCo Credit Agreement) shall be deemed waived for purposes of this Agreement from and after the Discharge of the OpCo Credit Agreement, (ii) to the extent that compliance with the OpCo Credit Agreement (as in effect on the date hereof) requires Emmis OpCo or its Subsidiaries to provide the OpCo Administrative Agent with any financial statement, appraisal, report, projection, certificate, notice, estimate, calculation or similar writing, the Issuer shall substantially concurrently therewith deliver a copy of such financial statement, appraisal, report, projection, notice, estimate, calculation or similar writing to the Purchaser and (iii) all references to the “Revert Date” in the OpCo Credit Agreement (as in effect on the date hereof) shall be deemed to mean the date that the Obligations hereunder, under the Notes and under the other Purchase Documents have been indefeasibly paid in full in cash.

2. INITIAL PURCHASE DATE AND SUBSEQUENT PURCHASE DATE TRANSACTIONS .

2.1 Commitment . Subject to the terms and conditions hereof, the Purchaser agrees to purchase a Note on the Initial Purchase Date and up to four (4) additional dates during the Purchase Period. To request that the Purchaser consummate a purchase transaction, the Issuer shall deliver to the Purchaser a Notice of Purchase (x) in the case of transaction on the Initial Purchase Date, on or prior to the closing of transactions on such date and (y) in the case of any subsequent Purchase Date, prior to 2:00 p.m. (Chicago, Illinois time) three (3) Business Days prior to the proposed purchase.

2.2 Purchase Date Transactions . Subject to the terms and conditions hereof, on each Purchase Date, upon satisfaction of the conditions precedent in Articles 12 and 13, (a) the Issuer shall issue the Note to the Purchaser and shall register the Note in the name of the Purchaser in the Register and (b) immediately upon receipt of the Note, the Purchaser shall pay the purchase price for the Note by wire transfer of immediately available Dollars to the Issuer. The purchase price for each Note shall be 100% of the original principal amount of such Note.

3. TERMS OF THE NOTES .

3.1 Form of Notes . The Notes shall be in the form of Exhibit C , shall be in the original principal amount of up to $35,000,000 and shall be payable to Purchaser or its registered assigns.

3.2 Interest on Notes .

3.2.1 Interest Rate; Payment . Except as otherwise provided in §3.2.2, the Notes shall bear interest at the rate of 22.95% per annum, compounded quarterly (except that (i) with respect to any Note issued prior to November 30, 2011, interest accrued on any Note between the applicable Purchase Date and November 30, 2011 shall be added to the principal amount of such Note on November 30, 2011 and (ii) with respect to any Note issued after November 30, 2011, interest accrued on any Note between the applicable Purchase Date and February 29, 2012 shall be added to the principal amount of such Note on February 29, 2012); provided , if the OpCo Credit Agreement (as in effect on the date hereof) is amended, amended and restated, restructured, renewed, extended, replaced, supplemented, modified, waived or refinanced (“ Refinanced ”), and in connection therewith the weighted average cost of funds (taking into account LIBOR floors, original issue discount, upfront fees (other than arrangement or placement fees), ongoing commitment

fees, index rates, interest rates and applicable margins) (the “ Weighted Average Cost of Funds ”) applicable to the OpCo Credit Agreement as so Refinanced (including any agreements governing Permitted Refinancing Indebtedness) is greater than the Weighted Average Cost of Funds in effect for loans under the OpCo Credit Agreement as of the date hereof, the Notes shall bear interest at the greater of (x) 22.95% or (y) the Weighted Average Cost of Funds applicable to the OpCo Credit Agreement as so Refinanced (including any agreements governing Permitted Refinancing Indebtedness) plus 1125 basis points. Interest shall be payable in arrears on the last day of each May, August, November and February and on the date of any payment of principal of the Notes, commencing November 30, 2011 (each an “ Interest Payment Date ”). Except for payments at Final Maturity or that are payable in connection with the redemption of the Notes (whether by acceleration or otherwise) which shall be paid in cash in immediately available Dollars, all such interest shall paid in kind and added to the outstanding principal balance of the Notes on the date such payment is due. Payments of cash interest shall be subordinated to the extent provided in §20 hereof.

3.2.2 Default Rate . During the continuance of any Event of Default, the outstanding principal of the Notes, and to the extent permitted by law, overdue interest shall bear interest at the greater of (a) the rate of 24.95% per annum payable on demand in cash or (b) the rate then in effect pursuant to §3.2.1 plus 2.00%. Payments of cash interest shall be subordinated to the extent provided in §20 hereof and accordingly no such cash payment shall be made prior to the Discharge of the Senior Debt Obligations. Prior to the Discharge of the Senior Debt Obligations, interest at the Default Rate shall be payable in kind in arrears on the last day of each May, August, November and February and added to the outstanding principal balance of the Notes on the date such payment is due.

3.2.3 Computations; Records . All computations of interest on the Notes shall be based on a 360-day year and paid for the actual number of days elapsed. Whenever a payment hereunder becomes due on a day that is not a Business Day, the due date for such payment shall be extended to the next succeeding Business Day, and interest shall accrue during such extension. The outstanding amount of the Notes as reflected from time to time in the accounts or records maintained by the Purchaser in accordance with the provisions of this Purchase Agreement shall be considered correct and binding on the Issuer absent manifest error.

3.3 Redemption .

3.3.1 Payment of Principal and Accrued Interest at Final Maturity . The Notes shall be redeemed in full by the Issuer on the Final Maturity Date. On the Final Maturity Date, the Issuer shall pay to the Purchasers in cash by wire transfer of immediately available Dollars the principal amount of the Notes then outstanding plus all accrued and unpaid interest thereon and all other amounts due hereunder.

3.3.2 Mandatory Redemption of the Notes . From and after the Discharge of the Senior Debt Obligations, the Issuer shall make the following redemptions (the “ Mandatory Redemptions ”) of the Notes outstanding at the time of the occurrence of any of the following events.

(a) Redemption with Proceeds of Asset Sales and Asset Swaps; Etc .

(i) If the Issuer or any of its Subsidiaries receives Net Cash Sale Proceeds from any Asset Sales or Asset Swaps (whether through a single transaction or a series of related transactions), then on the next succeeding Interest Payment Date (or, if the Net Cash Sale Proceeds are received on an Interest Payment Date, such Interest Payment Date) and after giving effect to the interest payment, the Issuer shall pay to the Purchaser an amount equal to 100% of such Net Cash Sale Proceeds and the Purchaser shall apply such amount to (A) if such prepayment is prior to the Make-Whole Expiration Date, the Make-Whole Amount applicable to the portion of the principal amount of the Notes being prepaid pursuant to this §3.3.2(a)(i) and (B) the prepayment of the outstanding principal of the Notes; provided that this §3.3.2(a) shall not apply to any Net Cash Sale Proceeds from the sale or other disposition of the Subject Preferred Stock or the Issuer’s or Emmis OpCo’s right, title and interest in any TRS Transaction.

(ii) If any Bridge to Sale Excluded Subsidiary, any Bridge to Sale License Subsidiary or any Affiliate of the Issuer receives any gross cash proceeds from the sale by such Person of the Station subject to a Bridge to Sale Third Party Transaction (including the FCC License associated with the Station subject of such Bridge to Sale Third Party Transaction), then on the next succeeding Interest Payment Date (or, if such proceeds are received on an Interest Payment Date, such Interest Payment Date) and after giving effect to the interest payment, the Issuer shall pay to the Purchaser an amount equal to 100% of such gross cash proceeds, minus all reasonable out-of-pocket fees, commissions and other reasonable and customary direct expenses actually incurred in connection with such sale, including any income taxes payable as a result of such sale and the amount of any transfer or documentary taxes required to be paid by such Person in connection with such sale and the Purchaser shall apply such amount to (A) if such prepayment is prior to the Make-Whole Expiration Date, the Make-Whole Amount applicable to the portion of the principal amount of the Notes being prepaid pursuant to this §3.3.2(a)(ii) and (B) the prepayment of the outstanding principal of the Notes.

(b) Redemption with Proceeds of Equity Issuances . If the Issuer or any of its Subsidiaries receives any Net Cash Equity Issuance Proceeds, then on the next succeeding Interest Payment Date (or, if the Net Cash Equity Issuance Proceeds are received on an Interest Payment Date, such Interest Payment Date) and after giving effect to the interest payment, the Issuer shall pay to the Purchaser an amount equal to one hundred percent (100%) of such Net Cash Equity Issuance Proceeds and the Purchaser shall apply such amount to (A) if such prepayment is prior to the Make-Whole Expiration Date, the Make-Whole Amount applicable to the portion of the principal amount of the Notes being prepaid pursuant to this §3.3.2(b) and (B) the prepayment of the outstanding principal of the Notes.

(c) Redemption with Proceeds of Issuances of Indebtedness . If the Issuer or any of its Subsidiaries receives any Net Cash Debt Issuance Proceeds, then on the next succeeding Interest Payment Date (or, if the Net Cash Debt Issuance Proceeds are received on an Interest Payment Date, such Interest Payment Date) and after giving effect to the interest payment, the Issuer shall pay to the Purchaser an amount equal to one hundred percent (100%) of such Net Cash Debt Issuance Proceeds and the Purchaser shall apply such amount to (A) if such prepayment is prior to the Make-Whole Expiration Date, the Make-Whole Amount applicable to the portion of the principal amount of the Notes being prepaid pursuant to this §3.3.2(c) and (B) the prepayment of the outstanding principal of the Notes.

(d) Redemption with Proceeds of Extraordinary Receipts . If any Extraordinary Receipt is received by or paid to or for the account of the Issuer, Emmis OpCo, the Subsidiaries of the Issuer or Emmis OpCo, the Austin Partnership or RAM, and not otherwise included in §§3.3.2(a), (b) or (c), then on the next succeeding Interest Payment Date (or, if the Extra Ordinary Receipt is received by or paid to or for the account of such party on an Interest Payment Date, such Interest Payment Date) and after giving effect to the interest payment, the Issuer shall pay to the Purchaser an amount equal to one hundred percent (100%) of all such Extraordinary Receipts and the Purchaser shall apply such amount to (A) if such prepayment is prior to the Make-Whole Expiration Date, the Make-Whole Amount applicable to the portion of the principal amount of the Notes being prepaid pursuant to this §3.3.2(d) and (B) the prepayment of the outstanding principal of the Notes.

(e) Redemption upon an Event of Default . If the Purchaser has declared the Notes to become immediately due and payable in accordance with §14.1 or the Notes become immediately due and payable in accordance with §14.1 (each, an “ Acceleration Event ”) on any date (an “ Acceleration Date ”), the Issuer shall prepay the Notes, (A) if such Acceleration Date is on or prior to the Make-Whole Expiration Date, the price paid shall be equal to the sum of (w) the outstanding principal amount of the Notes, plus (x) all accrued and unpaid interest as of the Acceleration Date on such outstanding principal amount, plus (y) the Make-Whole Amount computed on such outstanding principal amount, plus (z) all other Obligations then due and owing hereunder and under the other Purchase Documents or (B) if such Acceleration Date is after the Make-Whole Expiration Date, the price paid shall be equal to the sum of (x) the outstanding principal amount of the Notes as of the Acceleration Date, plus (y) all accrued and unpaid interest as of the Acceleration Date on such outstanding principal amount, plus (z) all other Obligations then due and owing hereunder and under the other Purchase Documents.

(f) Application of Payments . All payments made pursuant to §§3.3.2(a), (b), (c), (d) or (e) shall be paid to the Purchaser in cash by wire transfer of immediately available Dollars.

3.3.3 Optional Redemption of the Notes . (a) At any time after the Discharge of the Senior Debt Obligations and on or prior to the Make-Whole Expiration Date, the Issuer may, upon prior written notice to the Purchaser, redeem the Notes in whole or in part, at a redemption price equal to the sum of (i) the outstanding principal amount of the Notes or portion thereof to be redeemed as of the redemption date, plus (ii) all accrued and unpaid interest as of the redemption date on such outstanding principal amount or portion thereof, plus (iii) the Make-Whole Amount computed on such outstanding principal amount or portion thereof, plus (iv) if redeeming the entire outstanding principal amount of the Notes, all other Obligations then due and owing hereunder and under the other Purchase Documents.

(b) At any time after the Discharge of the OpCo Credit Agreement and after the Make-Whole Expiration Date, the Issuer may, upon prior written notice to the Purchaser, redeem the Notes in whole or in part. Any such redemption shall be at a price equal to the sum of (i) the outstanding principal amount of the Notes or portion thereof to be redeemed as of the redemption date, plus (ii) all accrued and unpaid interest as of the redemption date on such outstanding principal amount or portion thereof, plus (iii) if redeeming the entire outstanding principal amount of the Notes, all other Obligations then due and owing hereunder and under the other Purchase Documents.

(c) Any partial redemption of the Notes shall be in denominations of at least $[10,000,000] and in multiples of $1,000,000 in excess of such minimum denomination.

3.3.4 Pro Rata Treatment of Partial Redemptions . In the event of a partial redemption of the Notes, such partial redemption shall be a pro rata redemption of all of the Notes based on the proportion the principal amount of each Note bears to the aggregate outstanding principal amount of all of the Notes.

3.4 Application of Payments; Pro Rata Treatment . All payments, prepayments and redemptions of the Notes shall be applied to the Obligations in the following order of priority: (a) first, to the payment of, or (as the case may be) the reimbursement of the Purchaser of all reasonable costs, expenses, indemnities, disbursements then due hereunder or under the other Purchase Documents, (b) second, to the payment of accrued and unpaid interest, (c) third, to the payment of the Make-Whole Amount, if any, and (d) fourth, to the payment of unpaid principal. Amounts shall be applied to each category of Obligations set forth above until Payment in Full thereof and then to the next category. If amounts are insufficient to satisfy a category, they shall be applied on a pro rata basis among the Obligations in the category. Notwithstanding anything to the contrary contained herein, all payments, prepayments or redemptions of principal with respect to the Notes shall be made and applied pro rata on all outstanding Notes in accordance with the respective unpaid principal amounts thereof.

3.5 Transfer and Exchange of Notes . The Issuer shall keep a register which shall provide for the registration of the Notes and the registration of transfers of the Notes (the “ Register ”). The principal amount of and stated rate of interest on the Notes, the names, addresses and commitments of the Purchasers holding the Notes, the transfer of the Notes, and the names and addresses of the transferees of the Notes shall be registered in the Register. The Notes may not be transferred or exchanged unless (i) such transfer or exchange is recorded in the Register, (ii) the Issuer has consented to such transfer or exchange (such consent not to be unreasonably withheld, delayed or conditioned, and provided that no such consent shall be required during the occurrence and continuance of an Event of Default unless such transfer is to a Competitor), (iii) after giving effect to such proposed transfer or exchange, the total number of Persons (other than the Issuer or any of its Affiliates) holding Notes shall not exceed three (3) (treating all affiliated holders as a single entity for this purpose) and (iv) the prospective transferee thereof shall have agreed to assume such Purchaser’s rights and obligations hereunder by executing an Assignment and Acceptance in substantially the form of Exhibit H . A Purchaser holding a Note may, prior to maturity or prepayment thereof, surrender such Note at the principal office of the Issuer for transfer or exchange. A Purchaser desiring to transfer or exchange a Note or portion thereof shall first notify the Issuer in writing at least three (3) days in advance of such transfer or exchange. Within a reasonable time after such notice to the Issuer from a Purchaser of its intention to make such transfer or exchange and without expense (other than transfer taxes, if any) to a Purchaser, the Issuer shall, if consenting to such transfer or exchange pursuant to the terms hereof:

(a) acknowledge such transfer or exchange by executing an Assignment and Acceptance;

(b) record such transfer or exchange in the Register, effective as of the date of such Assignment and Acceptance; and

(c) issue in exchange therefor another Note or Notes, in denominations of at least $10,000,000 and in multiples of $1,000,000 in excess of such minimum denomination (except in the case of a Note for the aggregate amount or the balance of the Note or Notes so transferred) all as requested by the Purchaser, for the same aggregate principal amount, as of the date of such issuance, as the unpaid principal amount of the Note or Notes so surrendered, and having the same maturity and rate of interest, containing the same provisions and subject to the same terms and conditions as the Note or Notes so surrendered ( provided , that no minimum shall apply to a liquidating distribution of Notes to investors in a Purchaser and any Notes so distributed may be subsequently transferred by such investor and its successors in the original denomination thereof without restriction under this sentence). Each new Note shall be made payable to such Person or Persons, or assigns, as the Purchaser holding such surrendered Note or Notes may designate, and such transfer or exchange shall be made in such a manner that no gain or loss of principal or interest shall result therefrom. The Issuer shall have no obligation hereunder or under any Note to any Person other than the Purchaser that is the registered holder of each such Note.

3.6 Replacement of Notes . Upon receipt of evidence reasonably satisfactory to the Issuer of the loss, theft, destruction or mutilation of any Note and, if requested in the case of any such loss, theft or destruction, upon delivery of an indemnity bond or other agreement or security reasonably satisfactory to the Issuer, or, in the case of any such mutilation, upon surrender and cancellation of such Note, the Issuer will issue a new Note, of like tenor and amount and dated the date to which interest has been paid, in lieu of such lost, stolen, destroyed or mutilated Note.

3.7 No Other Prepayments . Except as expressly provided in this §3, no Note may be prepaid, redeemed, retired or otherwise acquired for value without the consent of the Purchaser.

4. [ Reserved ] .

5. [ Reserved ] .

6. CERTAIN GENERAL PROVISIONS .

6.1 [Reserved] .

6.2 OpCo Non-Compliance Fee . If the Issuer fails to comply with any of the covenants set forth in §11 of the OpCo Credit Agreement as in effect on the date hereof without regard to any amendment, modification, forbearance or waiver thereof, other than a Permitted §11 Amendment, then immediately upon such failure (the “ Non-Compliance Date ”), the Issuer shall pay to the Purchaser a fee (the “ Non-Compliance Fee ”) in an amount equal to 5% of the principal amount of the Notes as of the Non-Compliance Date. Such Non-Compliance Fee shall be payable in kind (and may not be paid in cash) and shall automatically be added to the principal balance of the Notes on the Non-Compliance Date without any further action by any Person. Once a Non-Compliance Fee has been paid, no further Non-Compliance Fee shall be payable.

6.3 Funds for Payments .

6.3.1 Payments . All payments of principal, interest, fees and any other amounts due hereunder or in connection herewith (other than interest which is payable in kind pursuant to §3.2) shall be made on the due date thereof by wire transfer to the Purchaser of immediately available Dollars to its account number _____ at _____ or at such other place that the Purchaser may from time to time designate, in each case no later than 2:00 p.m. (Chicago, Illinois time).

6.3.2 No Offset, etc . All payments by the Issuer hereunder and under any of the other Purchase Documents shall be made without setoff or counterclaim and free and clear of and without deduction for any taxes, levies, imposts, duties, charges, fees, deductions, withholdings, restrictions or conditions of any nature now or hereafter imposed or levied by any jurisdiction or any political subdivision thereof or taxing or other authority therein excluding (A) income and franchise taxes imposed on (or measured by) the net income or profits of the Purchaser by the jurisdictions under the laws of which the Purchaser is organized or any political subdivision thereof, or by the jurisdictions in which the Purchaser is located or any political subdivision thereof, or by the jurisdictions in which the Purchaser is doing business or any political subdivision (other than a jurisdiction or any political subdivision thereof in which the Purchaser is doing business solely as a result of the transactions contemplated by this Purchase Agreement and the Purchase Documents) thereof, (B) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction described in clause (A) above unless, in each case, the Issuer is compelled by law to make such deduction or withholding, and (C) any withholding tax imposed on the Purchaser as a result of the Purchaser’s failure to comply with Sections 1471 through 1474 of the Code as of the date hereof (or any amended or successor version that is substantively comparable and not materially more onerous), or any applicable Treasury regulation or published administrative guidance implementing such law (such non-excluded items, including any penalties, additions, interest or reasonable expenses relating thereto, referred to as “ Non-Excluded Ta xes”).

If any such Non-Excluded Taxes are imposed upon the Issuer or the Purchaser with respect to any amount payable by the Issuer hereunder (including amounts paid or payable under this §6.3.2, the Issuer will pay to the Purchaser, on the date on which such amount is due and payable hereunder, such additional amount in Dollars as shall be necessary to enable the Purchaser to receive the same net amount which the Purchaser would have received on such due date had no such obligation been imposed upon the Issuer, whether or not such Non-Excluded Taxes were correctly or legally imposed or asserted; provided however that the Issuer shall not be required to increase any such amounts payable to the Purchaser with respect to any such Non-Excluded Taxes that are attributable to (i) the Purchaser’s failure to comply with the provisions of §6.3.3 or (ii) that are withholding taxes imposed on the amounts payable to the Purchaser at the time the Purchaser becomes a party to this Purchase Agreement, except to the extent that the Purchaser’s assignor (if any) was entitled, at the time of assignment, to receive additional amounts from the Issuer with respect to such obligation pursuant to this §6.3.2. The Issuer shall timely pay over to the relevant Governmental Authority all amounts required to be withheld and shall deliver promptly to the Purchaser certificates or other valid vouchers for all taxes or other charges deducted from or paid with respect to payments made by the Issuer hereunder.

6.3.3 Forms and Certifications . Each Purchaser (including any assignee) that is not a U.S. Person as defined in Section 7701(a)(30) of the Code for federal income tax purposes (a “ Non-U.S. Purchaser ”) hereby agrees that, if and to the extent it is legally able to do so, it shall, prior to the date on which such Purchaser becomes a Purchaser under this Agreement (and from time to time thereafter upon the reasonable request of the Issue), deliver to the Issuer such certificates, documents or other evidence, as and when required by the Code or Treasury Regulations issued pursuant thereto, including (a) in the case of a Non-U.S. Purchaser that is a “bank” for purposes of Section 881(c)(3)(A) of the Code, two (2) duly completed copies of Internal Revenue Service Form W-8BEN or Form W-8ECI and any other certificate or statement of exemption required by Treasury Regulations, or any subsequent versions thereof or successors thereto, properly completed and duly executed by such Purchaser establishing that with respect to payments of principal, interest or fees hereunder it is (i) not subject to United States federal withholding tax under the Code because such payment is effectively connected with the conduct by such Purchaser of a trade or business in the United States or (ii) totally exempt or partially exempt from United States federal withholding tax under a provision of an applicable tax treaty and (b) in the case of a Non-U.S. Purchaser that is not a “bank” for purposes of Section 881(c)(3)(A) of the Code, a certificate substantially in the form of Exhibit I hereto, together with a properly completed and executed Internal Revenue Service Form W-8ECI, W-8BEN, W-8IMY or W-9, as applicable (or successor forms). The Purchaser agrees that it shall, promptly upon a change of its lending office or the selection of any additional lending office, to the extent the forms previously delivered by it pursuant to this section are no longer effective, and promptly upon the Issuer’s reasonable request after the occurrence of any other event (including the passage of time) requiring the delivery of a Form W-8BEN, W-8ECI, W-8 IMY or W-9 in addition to or in replacement of the forms previously delivered, deliver to the Issuer, if and to the extent it is properly entitled to do so, two (2) properly completed and executed copies of Form W-8BEN, W-8ECI, W-8 IMY or W-9, as applicable (or any successor forms thereto). Each Non-U.S. Purchaser shall promptly notify the Issuer at any time it determines that it is no longer in a position to provide any previously delivered certificate to the Issuer (or any other form of certification adopted by the U.S. taxing authorities for such purpose).

6.3.4 Mitigation Obligations . If the Issuer is required to pay any additional amount to any Purchaser or any Governmental Authority for the account of any Purchaser pursuant to §6.3.2, then such Purchaser shall use reasonable efforts to designate a different lending office for funding or booking its Notes hereunder or to assign its rights and obligations hereunder to another of its officers, branches, or Affiliates, if, in the sole discretion of such Purchaser, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to §6.3.2, as the case may be, in the future and (ii) would not subject such Purchaser to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Purchaser. The Issuer hereby agrees to pay all reasonable costs and expenses incurred by any Purchaser in connection with any such designation or assignment.

7. [ Reserved ] .

8. REPRESENTATIONS AND WARRANTIES .

The Issuer represents and warrants to the Purchaser as follows:

8.1 Corporate Authority.

8.1.1 Incorporation; Good Standing . Each of the Issuer and the Subsidiaries (a) is a corporation, partnership or limited liability company (or similar business entity) duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or formation, (b) has all requisite corporate, partnership or limited liability company (or the equivalent company) power to own its property and conduct its business as now conducted and as presently contemplated, and (c) is in good standing as a foreign corporation, partnership or limited liability company (or similar business entity) and is duly authorized to do business in each jurisdiction where such qualification is necessary except where a failure to be so qualified would not have a Material Adverse Effect.

8.1.2 Authorization . The execution, delivery and performance of this Purchase Agreement and the other Purchase Documents to which the Issuer or any Subsidiary is or is to become a party and the transactions contemplated hereby and thereby (a) are within the corporate, partnership or limited liability company (or the equivalent company) authority of such Person, (b) have been duly authorized by all necessary corporate, partnership or limited liability company (or the equivalent company) proceedings, (c) do not and will not conflict with or result in any breach or contravention of any provision of law, statute, rule or regulation to which such Person is subject or any judgment, order, writ, injunction, license or permit applicable to such Person and (d) do not conflict with any provision of the Governing Documents of, or any agreement or other instrument binding upon, such Person.

8.1.3 Enforceability . The execution and delivery of this Purchase Agreement and the other Purchase Documents to which the Issuer or any Subsidiary is or is to become a party will result in valid and legally binding obligations of such Person enforceable against it in accordance with the respective terms and provisions hereof and thereof, except as enforceability is limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting generally the enforcement of creditors’ rights and except to the extent that availability of the remedy of specific performance or injunctive relief is subject to the discretion of the court before which any proceeding therefor may be brought.

8.2 Governmental Approvals . The execution, delivery and performance by the Issuer or any Subsidiary of this Purchase Agreement and the other Purchase Documents to which such Person is or is to become a party and the transactions contemplated hereby and thereby do not require the approval or consent of, or filing with, any Governmental Authority other than those already obtained.

8.3 Title to Properties (a) . (a) Except as indicated on Schedule 8.3(a) hereto, the Issuer and the Subsidiaries own all of the assets reflected in the consolidated balance sheet of the Issuer and its Subsidiaries as at the Balance Sheet Date or acquired since that date (except (i) property and assets which are not integral to the operations of the Stations or publishing operations owned by the Issuer or its Subsidiaries as such Stations or publishing operations are operated immediately prior to the Balance Sheet Date, (ii) property and assets which do not consist of a Station or publishing asset which have been sold or otherwise disposed of in the ordinary course of business since that date, (iii) property and assets which have been replaced since that date or (iv) property and assets which have been sold or otherwise disposed of after the Effective Date as permitted hereunder), subject to no rights of others, including any mortgages, leases, conditional sales agreements, title retention agreements, liens or other encumbrances except Permitted Liens.

(b) Schedule 8.3(b) hereto, as updated from time to time in accordance with §10.5 sets forth all of the Stations of the Issuer and its Subsidiaries at the time of reference thereto.

8.4 Financial Statements and Projections .

8.4.1 Fiscal Year . The Issuer and each of the Subsidiaries has a fiscal year which is the twelve (12) months ending on February 28, or in the case of a leap year, February 29, of each calendar year.

8.4.2 Financial Statements . There has been furnished to the Purchaser the consolidated balance sheet of the Issuer and its subsidiaries, as at the Balance Sheet Date, and the related, similarly adjusted, consolidated statements of income and cash flow for the fiscal year then ended, each certified by an authorized officer of the Issuer. Such balance sheet and statement of income and cash flow have been prepared in accordance with GAAP and fairly present in all material respects the financial condition of the Issuer and its subsidiaries, as at the close of business on the date thereof and the results of operations for the fiscal year then ended. There are no contingent liabilities of the Issuer or any of its subsidiaries, as of the Purchase Date, involving material amounts, known to any officer of the Issuer or of any of the Subsidiaries not disclosed in the balance sheet dated the Balance Sheet Date and the related notes thereto other than contingent liabilities disclosed to the Purchaser in writing.

8.4.3 Projections . There has been furnished to the Purchaser the projections of the consolidated earnings before interest, taxes, depreciation and amortization of the Issuer and its Subsidiaries for the fiscal years ended February 28, 2012 through the fiscal year ended February 28, 2016, copies of which are attached hereto as Exhibit D (the “Projections”), which disclose all assumptions made with respect to general economic, financial and market conditions used in formulating the Projections. To the knowledge of the Issuer or any of the Subsidiaries as of the Effective Date and each Purchase Date, no facts exist that (individually or in the aggregate) would result in any material change in any of the Projections. The Projections are based upon reasonable estimates and assumptions at the time made, have been prepared on the basis of the assumptions stated therein and reflect the reasonable estimates of the Issuer and the Subsidiaries, of the results of operations and other information projected therein.

8.5 No Material Adverse Changes, etc . Since the Balance Sheet Date there has been no event or occurrence which has had a Material Adverse Effect. Since the Balance Sheet Date, neither the Issuer nor any Subsidiary has made any Restricted Payment except as set forth on Schedule 8.5 hereto or after the Effective Date as permitted by §10.4.

8.6 Franchises, Patents, Copyrights, etc . The Issuer and each of its Subsidiaries possesses all material franchises, patents, copyrights, trademarks, trade names, licenses and permits, and rights in respect of the foregoing, necessary for the conduct of its business substantially as now conducted without known material conflict with any rights of others.

8.7 Litigation . Except as set forth in Schedule 8.7 hereto, there are no actions, suits, proceedings or investigations of any kind pending or threatened against the Issuer or any of its Subsidiaries before any Governmental Authority, (a) that, could reasonably be expected to, in each case or in the aggregate, (i) have a Material Adverse Effect or (ii) materially impair the right of the Issuer and its Subsidiaries, considered as a whole, to carry on business substantially as now conducted by them, or result in any substantial liability not adequately covered by insurance, or for which adequate reserves are not maintained on the consolidated balance sheet of the Issuer and its subsidiaries, or (b) which question the validity of this Purchase Agreement or any of the other Purchase Documents, or any action taken or to be taken pursuant hereto or thereto.

8.8 No Materially Adverse Contracts, etc . None of the Issuer or any of the Subsidiaries is subject to any Governing Document or other legal restriction, or any judgment, decree, order, law, statute, rule or regulation that has or is expected in the future to have a Material Adverse Effect. None of the Issuer or any of the Subsidiaries is a party to any contract or agreement that has or is expected, in the reasonable judgment of the Issuer’s officers, to have any Material Adverse Effect.

8.9 Compliance with Other Instruments, Laws, Status as Senior Debt, etc . None of the Issuer or any of the Subsidiaries is in violation of any provision of its Governing Documents, or any agreement or instrument to which it may be subject or by which it or any of its properties may be bound or any decree, order, judgment, statute, license, rule or regulation, in any of the foregoing cases in a manner that could reasonably be expected to have a Material Adverse Effect.

8.10 Tax Status . The Issuer and the Subsidiaries (a) have made or filed all federal, state, local and foreign income and all other tax returns, reports and declarations required by any jurisdiction to which any of them is subject, except where failure to have done so could not reasonably be expected to result in a Material Adverse Effect and (b) have paid all taxes and other governmental assessments and charges shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and by appropriate proceedings and with respect to which adequate reserves in conformity with GAAP have been provided on the books of the Issuer or its Subsidiaries, as the case may be, and except where failure to do so could not reasonably be expected to result in a Material Adverse Effect. Except as set forth on Schedule 8.10 , there are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction (except those being contested in good faith by appropriate proceedings subject to the Issuer or the applicable Subsidiary having established adequate reserves in conformity with GAAP for the payment of such disputed taxes and except where the failure to pay such disputed taxes could not reasonably be expected to result in a Material Adverse Effect), and none of the officers of the Issuer know of any reasonable basis for any such claim.

8.11 No Event of Default . No Default or Event of Default has occurred and is continuing.

8.12 Investment Company Acts and Communications Act . None of the Issuer, any Person Controlling or any Subsidiary (i) is a “public-utility company”, “holding company,” or a “subsidiary company” of a “holding company,” or an “affiliate” of a “holding company”, as such terms are defined in the Public Utility Holding Company Act of 2005, and none of its Subsidiaries is subject to regulation as a “public utility” under the Federal Power Act, as amended, or (ii) is or is required to be registered as an “investment company” under the Investment Company Act of 1940, as amended. The Issuer and each of its Subsidiaries is in compliance with the Communications Act with regard to alien control or ownership.

8.13 Absence of Financing Statements, etc . Except with respect to Permitted Liens, there is no financing statement, security agreement, chattel mortgage, real estate mortgage or other document filed or recorded with any filing records, registry or other public office, that purports to cover, affect or give notice of any present or possible future Lien on any assets or property of the Issuer or any of the Subsidiaries or any rights relating thereto.

8.14 [Reserved] .

8.15 Certain Transactions . Except for arm’s length transactions pursuant to which the Issuer or any of its Subsidiaries makes payments in the ordinary course of business upon terms no less favorable than the Issuer or such Subsidiary could obtain from third parties, none of the officers, directors, or employees of the Issuer or any of its Subsidiaries is presently a party to any transaction with the Issuer or any of its Subsidiaries (other than for services as employees, officers and directors and independent contractors in the ordinary course of business), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Issuer, any corporation, partnership, trust or other entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner.

8.16 Employee Benefit Plans .

8.16.1 In General . Each Employee Benefit Plan and each Guaranteed Pension Plan has been maintained and operated in compliance in all material respects with the provisions of ERISA and all Applicable Pension Legislation and, to the extent applicable, the Code, including but not limited to the provisions thereunder respecting prohibited transactions and the bonding of fiduciaries and other persons handling plan funds as required by §412 of ERISA. The Issuer has heretofore delivered to the Purchaser the most recently completed annual report, Form 5500, with all required attachments, and actuarial statement required to be submitted under §103(d) of ERISA, with respect to each Guaranteed Pension Plan.

8.16.2 Terminability of Welfare Plans . No Employee Benefit Plan, which is an employee welfare benefit plan within the meaning of §3(1) or §3(2)(B) of ERISA, provides benefit coverage subsequent to termination of employment, except as required by Title I, Part 6 of ERISA or the applicable state insurance laws. The Issuer may terminate each employee welfare benefit plan at any time (or at any time subsequent to the expiration of any applicable bargaining agreement) in the discretion of the Issuer without liability to any Person other than for claims arising prior to termination.

8.16.3 Guaranteed Pension Plans . Each contribution required to be made to a Guaranteed Pension Plan, whether required to be made to avoid the incurrence of an accumulated funding deficiency, the notice or lien provisions of §302(f) of ERISA, or otherwise, has been timely made. No waiver of an accumulated funding deficiency or extension of amortization periods has been received with respect to any Guaranteed Pension Plan, and neither the Issuer nor any ERISA Affiliate is obligated to or has posted security in connection with an amendment to a Guaranteed Pension Plan pursuant to §307 of ERISA or §401(a)(29) of the Code. No liability to the PBGC (other than required insurance premiums, all of which have been paid) has been incurred by the Issuer or any ERISA Affiliate with respect to any Guaranteed Pension Plan and there has not been any ERISA Reportable Event (other than an ERISA Reportable Event as to which the requirement of 30 days notice has been waived), or any other event or condition which presents a material risk of termination of any Guaranteed Pension Plan by the PBGC. Based on the latest valuation of each Guaranteed Pension Plan (which in each case occurred within twelve months of the date of this representation), and on the actuarial methods and assumptions employed for that valuation, the aggregate benefit liabilities of all such Guaranteed Pension Plans within the meaning of §4001 of ERISA did not exceed the aggregate value of the assets of all such Guaranteed Pension Plans, disregarding for this purpose the benefit liabilities and assets of any Guaranteed Pension Plan with assets in excess of benefit liabilities .

8.16.4 Multiemployer Plans . Neither the Issuer nor any ERISA Affiliate has incurred any material liability (including secondary liability) to any Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan under §4201 of ERISA or as a result of a sale of assets described in §4204 of ERISA. Neither the Issuer nor any ERISA Affiliate has been notified that any Multiemployer Plan is in reorganization or insolvent under and within the meaning of §4241 or §4245 of ERISA or is at risk of entering reorganization or becoming insolvent, or that any Multiemployer Plan intends to terminate or has been terminated under §4041A of ERISA.

8.17 [Reserved] .

8.18 Environmental Compliance . The Issuer has taken all necessary steps to investigate the past and present condition and usage of the Real Estate and the operations conducted thereon and, based upon such diligent investigation, has determined that:

(a) none of the Issuer, its Subsidiaries or any operator of the Real Estate or any operations thereon is in violation, or alleged violation, of any judgment, decree, order, law, license, rule or regulation pertaining to environmental matters, including without limitation, those arising under the Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 as amended (“ CERCLA ”), the Superfund Amendments and Reauthorization Act of 1986, the Federal Clean Water Act, the Federal Clean Air Act, the Toxic Substances Control Act, or any state, local or foreign law, statute, regulation, ordinance, order or decree relating to health, safety or the environment (hereinafter “ Environmental Laws ”), which violation could reasonably be expected to have a material adverse effect on the environment or a Material Adverse Effect;

(b) neither the Issuer nor any of its Subsidiaries has received notice from any third party including, without limitation, any Governmental Authority, (i) that any one of them has been identified by the United States Environmental Protection Agency (“ EPA ”) as a potentially responsible party under CERCLA with respect to a site listed on the National Priorities List, 40 C.F.R. Part 300 Appendix B; (ii) that any hazardous waste, as defined by 42 U.S.C. §6903(5), any hazardous substances as defined by 42 U.S.C. §9601(14), any pollutant or contaminant as defined by 42 U.S.C. §9601(33) and any toxic substances, oil or hazardous materials or other chemicals or substances regulated by any Environmental Laws (“ Hazardous Substances ”) which any one of them has generated, transported or disposed of has been found at any site at which a Governmental Authority has conducted or has ordered that any Issuer or any of its Subsidiaries conduct a remedial investigation, removal or other response action pursuant to any Environmental Law; or (iii) that it is or shall be a named party to any claim, action, cause of action, complaint, or legal or administrative proceeding (in each case, contingent or otherwise) arising out of any third party’s incurrence of costs, expenses, losses or damages of any kind whatsoever in connection with the release of Hazardous Substances except where any of the foregoing could not reasonably be expected to have a Material Adverse Effect;

(c) except as set forth on Schedule 8.18 attached hereto: (i) no portion of the Real Estate has been used for the handling, processing, storage or disposal of Hazardous Substances except in accordance with applicable Environmental Laws; and no underground tank or other underground storage receptacle for Hazardous Substances is located on any portion of the Real Estate; (ii) in the course of any activities conducted by the Issuer, its Subsidiaries or operators of its properties, no Hazardous Substances have been generated or are being used on the Real Estate except in accordance with applicable Environmental Laws, except where any failure to comply could not reasonably be expected to result in a Material Adverse Effect, (iii) there have been no releases (i.e. any past or present releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, disposing or dumping) or threatened releases of Hazardous Substances on, upon, into or from the properties of the Issuer or its Subsidiaries, which releases would have a material adverse effect on the value of any of the Real Estate or adjacent properties or the environment; (iv) to the best of the Issuer’s knowledge, there have been no releases on, upon, from or into any real property in the vicinity of any of the Real Estate which, through soil or groundwater contamination, may have come to be located on, and which would have a material adverse effect on the value of, the Real Estate; and (v) in addition, any Hazardous Substances that have been generated on any of the Real Estate have been transported offsite only by carriers having an identification number issued by the EPA (or the equivalent thereof in any foreign jurisdiction), treated or disposed of only by treatment or disposal facilities maintaining valid permits as required under applicable Environmental Laws, which transporters and facilities have been and are, to the best of the Issuer’s knowledge, operating in compliance with such permits and applicable Environmental Laws; and

(d) none of the Issuer and its Subsidiaries, any real property subject to a mortgage or any of the other Real Estate is subject to any applicable Environmental Law requiring the performance of Hazardous Substances site assessments, or the removal or remediation of Hazardous Substances, or the giving of notice to any Governmental Authority or the recording or delivery to other Persons of an environmental disclosure document or statement by virtue of the transactions set forth herein and contemplated hereby, or as a condition to the recording of any Mortgage or to the effectiveness of any other transactions contemplated hereby.

8.19 Subsidiaries, etc . Sched ule 8.19 hereto sets forth all of the Subsidiaries of the Issuer as of the Effective Date. Except as set forth on Schedule 8.19 , neither the Issuer nor any Subsidiary is engaged in any joint venture or partnership with any other Person. The jurisdiction of incorporation/formation and principal place of business of each Subsidiary is listed on Sched ule 8. 19 hereto.

8.20 Disclosure . Neither this Purchase Agreement nor any of the other Purchase Documents contains any untrue statement of a material fact or omits to state a material fact (known to the Issuer or any of its Subsidiaries in the case of any document or information not furnished by it or any of its Subsidiaries) necessary in order to make the statements herein or therein not misleading. There is no fact known to the Issuer or any of its Subsidiaries which has had a Material Adverse Effect, or which is reasonably likely in the future to have a Material Adverse Effect, exclusive of effects resulting from changes in general economic conditions, legal standards or regulatory conditions or changes affecting the broadcasting or publishing industries generally resulting from new technologies.

8.21 Licenses and Approvals .

(a) Each of the Issuer and its Subsidiaries has all requisite power and authority and Necessary Authorizations to hold the FCC Licenses and to own and operate its Stations and to carry on its businesses as now conducted.

(b) Set forth in Schedule 8.21 hereto, as updated from time to time in accordance with §10.5, is a complete description of all FCC Licenses of the Issuer and/or its Subsidiaries and the dates on which such FCC Licenses expire. Complete and correct copies of all such FCC licenses have been delivered to the Purchaser. Except as set forth on Schedule 8.21 , each such FCC License which is necessary to the operation of the business of the Issuer or any of its Subsidiaries is validly issued and in full force and effect and, in respect of each such license that has expired by its terms, a timely renewal application has been filed and the Issuer and/or its Subsidiaries has authority to continue operating the applicable Station pending action on such application and, except as set forth on Schedule 8.7 the Issuer and its Subsidiaries do not know of any matters that could reasonably be expected to result in the non-renewal of any material license; and except as set forth on Schedule 8.7 and Schedule 8.21 , the Issuer and each of its Subsidiaries has fulfilled and performed in all material respects all of its obligations with respect to each such FCC License; in each case, provided that such exceptions could not, in the aggregate, reasonably be expected to have a Material Adverse Effect and provided further that the Issuer or such Subsidiary is taking all reasonable and appropriate steps to contest or mitigate its potential liabilities in respect of such

exceptions and has set aside on its books adequate reserves in conformity with GAAP with respect thereto. Except as set forth on Schedule 8.7 and Schedule 8.21 , no event has occurred which: (i) has resulted in, or after notice or lapse of time or both would result in, revocation or termination of any FCC License, or (ii) materially and adversely affects or in the future could reasonably be expected to materially adversely affect any of the rights of the Issuer or any of its Subsidiaries under any FCC License, except for such events (including such events set forth on Schedule 8.7 and Schedule 8.21 ) which could not reasonably be expected to cause an Event of Default pursuant to §14.1(t) and so long as the Issuer or the applicable Subsidiary shall have complied with §9.10(b)(iv). No material license or franchise, other than the FCC Licenses described in Schedule 8.21 which have been obtained, is necessary for the operation of the business (including the Stations) of the Issuer or any of its Subsidiaries as now conducted.

(c) Except as set forth on Sched ule 8 . 7 and Schedule 8. 21, as such Schedule 8.21 may be updated from time to time pursuant to §10.5, none of the Issuer or any of its Subsidiaries is a party to or has knowledge of any investigation, notice of violation, order or complaint issued by or before any Governmental Authority, including the FCC, or of any other proceedings (other than proceedings relating to the radio or television broadcasting industry generally) which could in any manner threaten or adversely affect the validity or continued effectiveness of the FCC Licenses of the Issuer and its Subsidiaries taken as a whole or the business of the Issuer and its Subsidiaries taken as a whole, provided that any such investigations, violations, orders or complaints issued by or before any Governmental Authority or proceedings could not, in the aggregate, reasonably be expected to have a Material Adverse Effect and provided further that the Issuer or such Subsidiary is taking all reasonable and appropriate steps to contest or mitigate its potential liabilities in respect of such investigations, violations, orders or complaints or proceedings and has set aside on its books adequate reserves in conformity with GAAP with respect thereto. Except as set forth on Schedule 8.7 , none of the Issuer or any of its Subsidiaries has reason to believe that any of the FCC Licenses described in Schedule 8.21 , as updated from time to time pursuant to §10.5, will not be renewed, except for those the failure to be in full force and effect after the Effective Date could not reasonably be expected to have a Material Adverse Effect. Each of the Issuer and its Subsidiaries has filed all material reports, applications, documents, instruments and information required to be filed by it pursuant to applicable rules and regulations or requests of every regulatory body having jurisdiction over any of its FCC Licenses or the activities or business of such Person with respect thereto and has timely paid all FCC annual regulatory fees assessed with respect to its FCC Licenses.

(d) All FCC Licenses and other licenses, permits and approvals relating to the Stations are held by a License Subsidiary. No License Subsidiary (A) owns or holds any assets (including the ownership of stock or any other interest in any Person) other than FCC Licenses and other licenses, permits and approvals relating to the Stations, (B) is engaged in any business other than the holding, acquisition and maintenance of FCC Licenses and other licenses, permits and approvals relating to the Stations, (C) has any Investments in any Person other than the Issuer or (D) owes any Indebtedness (other than (x) Indebtedness to the Purchaser pursuant to the Guaranty and (y) contingent obligations pursuant to Subordinated Debt consisting of guaranties of Subordinated Debt to any Person other than the Issuer).

8.22 Material Agreements . All material radio or television network affiliation, programming, engineering, consulting, management, employment and related agreements, if any, of the Issuer and its Subsidiaries which are presently in effect in connection with, and are material and necessary to, the conduct of the business of the Issuer or any of its Subsidiaries, including without limitation the operation of any Station by the Issuer or any of its Subsidiaries, are valid, subsisting and in full force and effect and none of the Issuer, any of its Subsidiaries or, to the Issuer’s best knowledge, any other Person are in material default thereunder.

8.23 Solvency . As of the date on which this representation and warranty is made, each of the Issuer and the Subsidiaries is Solvent, both before and after giving effect to the transactions contemplated hereby consummated on such date and to the incurrence of all Indebtedness and other obligations incurred on such date in connection herewith and therewith.

8.24 Excluded Subsidiaries . The entities set forth in clause (a) of the definition of “Excluded Subsidiaries” do not own or operate any Station, broadcasting business or publishing business within the United States and either own no assets or own only stock of Persons whose primary businesses are owning or operating broadcasting businesses outside the United States. The primary business of Ciudad, LLC is the magazine publishing business. The Austin Partnership is a Texas limited partnership, 49.69443% of which is owned by Emmis OpCo. RAM is a Texas limited liability company, 50.1% of which is owned by Emmis OpCo.

8.25 Private Offering . Neither the Issuer nor anyone acting on the behalf of the Issuer has offered the Notes or any similar security for sale to, or solicited any offer to buy any of the same from, or otherwise approached or negotiated in respect thereof with, any person other than the Purchaser. Neither the Issuer nor anyone acting on its behalf has taken, or will take, any action that would subject the issuance or sale of the Notes to the registration requirements of Section 5 of the Securities Act of 1933.

9. AFFIRMATIVE COVENANTS .

The Issuer covenants and agrees that, so long as the Notes or other Obligation is outstanding:

9.1 Punctual Payment . The Issuer will duly and punctually pay or cause to be paid the principal and interest on the Notes and all fees and amounts provided for in this Purchase Agreement and the other Purchase Documents to which the Issuer or any of its Subsidiaries is a party, all in accordance with the terms of this Purchase Agreement and such other Purchase Documents.

9.2 Maintenance of Office . The Issuer will maintain its chief executive office at One Emmis Plaza, 40 Monument Circle, Suite 700, Indianapolis, Indiana 46204 or at such other place in the United States of America as the Issuer shall designate upon written notice to the Purchaser, where notices, presentations and demands to or upon the Issuer in respect of the Purchase Documents to which the Issuer is a party may be given or made.

9.3 Records and Accounts . The Issuer will (a) keep, and cause each of its Subsidiaries to keep, true and accurate records and books of account in which full, true and correct entries will be made in accordance with GAAP, (b) maintain adequate accounts and reserves for all taxes (including income taxes), depreciation, depletion, obsolescence and amortization of its properties and the properties of its Subsidiaries, contingencies, and other reserves, and (c) at all times engage Ernst & Young LLP or other independent certified public accountants reasonably satisfactory to the Purchaser as the independent certified public accountants of the Issuer and its Subsidiaries and will not permit more than thirty (30) days to elapse between the cessation of such firm’s (or any successor firm’s) engagement as the independent certified public accountants of the Issuer and its Subsidiaries and the appointment in such capacity of a successor firm as shall be reasonably satisfactory to the Purchaser.

9.4 Financial Statements, Certificates and Information . The Issuer will deliver to the Purchaser:

(a) as soon as practicable, but in any event not later than eighty (80) days after the end of each fiscal year of the Issuer, the audited consolidated balance sheet of the Issuer and its subsidiaries, as at the end of such year, and the related audited consolidated statements of income and audited consolidated statements of cash flow, each setting forth in comparative form the figures for the previous fiscal year and all such consolidated statements (i) to be in reasonable detail, prepared in accordance with GAAP and the requirements of the SEC and (ii) to be certified without qualification and without an expression of uncertainty as to the ability of the Issuer or any of the Subsidiaries to continue as going concerns, by Ernst & Young LLP or by other independent certified public accountants reasonably satisfactory to the Purchaser ( provided that the absences of such qualification or expression shall not be required with respect to any year prior to the fiscal year ending February 28, 2013), together with a written statement from such accountants to the effect that, in making the examination necessary to said certification, they have obtained no knowledge of any Default or Event of Default related to or arising from accounting matters, or, if such accountants shall have obtained knowledge of any then existing Default or Event of Default they shall disclose in such statement any such Default or Event of Default; provided that such accountants shall not be liable to the Purchaser for failure to obtain knowledge of any Default or Event of Default;

(b) (i) as soon as practicable, but in any event not later than fifty (50) days after the end of each of the fiscal quarters of the Issuer, copies of the unaudited consolidated balance sheets of the Issuer and its subsidiaries as at the end of such quarter, and the related consolidated statements of income and cash flows for the fiscal quarter then ended, all in reasonable detail and prepared in accordance with GAAP and SEC requirements, together with a certification by the principal financial or accounting officer of the Issuer that the information contained in such financial statements fairly presents the financial position of the Issuer and their respective subsidiaries on the date thereof (subject to year-end adjustments);

(ii) as soon as practicable, but in any event not later than thirty (30) days after the end of each month, copies of the unaudited consolidated balance sheets of the Issuer and its subsidiaries as at the end of such month, and the related consolidated statements of income for the fiscal month then ended, all in reasonable detail and prepared in accordance with GAAP, together with a certification by the principal financial or accounting officer of the Issuer that the information contained in such financial statements fairly presents the financial position of the Issuer and its subsidiaries on the date thereof (subject to year-end and quarter-end adjustments);

(c) simultaneously with the delivery of the financial statements referred to in subsections (a) and (b)(i) above, (i) a statement certified by the principal financial or accounting officer of the Issuer in substantially the form of Exhibit E hereto or any other form acceptable to the Purchaser (a “ Compliance Certificate ”) and certifying that no Default or Event of Default is then continuing or describing the nature and duration of any then continuing Default or Event of Default and setting forth in reasonable detail computations evidencing compliance with the covenants contained in §11 of the OpCo Credit Agreement (as in effect on the date hereof) and (if applicable) reconciliations to reflect changes in GAAP since the Balance Sheet Date, (ii) a schedule in form and detail reasonably satisfactory to the Purchaser of computations of (x) Consolidated Net Income (along with a schedule that reconciles the net income (or loss) of the Issuer and its subsidiaries on a consolidated basis to the net income (or loss) of Emmis OpCo and its Subsidiaries on a consolidated basis) and (y) Consolidated EBITDA and other financial covenant-related calculations detailing the adjustments made to exclude Excluded Subsidiaries from such computations, in each case, prepared by the principal financial or accounting officer of the Issuer, (iii) a schedule in form and detail reasonably satisfactory to the Purchaser of the amount of cash and cash equivalents as of the end of such fiscal quarter in each of the Issuer’s and each of the Subsidiary’s deposit accounts and securities accounts, (iv) a schedule in form and detail reasonably satisfactory to the Purchaser tracking and detailing the existing Investments made pursuant to the terms of §10.3(j) of the OpCo Credit Agreement (as in effect on the date hereof) and the replenishment in accordance with the terms of the definition of Investment and (v) a schedule in form and detail reasonably satisfactory to the Purchaser tracking and detailing the Distributions of Emmis OpCo made to the Issuer and the reasons therefor;

(d) promptly upon completion thereof and in any event no later than eighty (80) days after the beginning of each fiscal year of the Issuer, the Issuer’s annual operating budget in the form of consolidated financial projections for such fiscal year and prepared on a quarterly basis and setting forth projected operating results for each quarter in such fiscal year and for the fiscal year as a whole, including projections of operating cash flow together with a quarterly itemization of estimated taxes and Capital Expenditures for such fiscal year, which are prepared on the basis of reasonable assumptions; and

(e) from time to time such other financial data and information (including, without limitation, accountants’ management letters) with respect to the condition or operations, financial or otherwise, of the Issuer and the subsidiaries (including Excluded Subsidiaries) as the Purchaser may reasonably request.

9.5 Notices and Other Information .

9.5.1 Defaults . The Issuer will promptly notify the Purchaser in writing of the occurrence of any Default or Event of Default, together with a reasonably detailed description thereof, and the actions the Issuer proposes to take with respect thereto. If any Person shall give any notice or take any other action in respect of a claimed default (whether or not constituting an Event of Default) under this Purchase Agreement or any other note, evidence of indebtedness, indenture or other obligation in an amount equal to or greater than $5,000,000 to which or with respect to which the Issuer or any of the Subsidiaries is a party or obligor, whether as principal, guarantor, surety or otherwise, the Issuer shall forthwith give written notice thereof to the Purchaser, describing the notice or action and the nature of the claimed default.

9.5.2 Environmental Events . The Issuer will promptly give notice to the Purchaser (a) of any violation of any Environmental Law that the Issuer or any of its Subsidiaries reports in writing or is reportable by such Person in writing (or for which any written report supplemental to any oral report is made) to any Governmental Authority and (b) upon becoming aware thereof, of any inquiry, proceeding, investigation, or other action, including a notice from any agency of potential environmental liability, of any Governmental Authority that could have a Material Adverse Effect.

9.5.3 Notices to OpCo Administrative Agent . To the extent that compliance with the OpCo Credit Agreement requires Emmis OpCo or its Subsidiaries to provide the OpCo Administrative Agent with any financial statement, appraisal, report, projection, certificate, notice, estimate, calculation or similar writing, the Issuer shall substantially concurrently therewith deliver a copy of such financial statement, appraisal, report, projection, notice, estimate, calculation or similar writing to the Purchaser.

9.5.4 Notice of Litigation and Judgments . The Issuer will, and will cause each of its Subsidiaries to, give notice to the Purchaser in writing within fifteen (15) days of becoming aware of any litigation or proceedings threatened in writing or any pending litigation and proceedings affecting the Issuer or any of the Subsidiaries or to which any such Person is or becomes a party involving an uninsured claim against any such Person that could reasonably be expected to have a Material Adverse Effect and stating the nature and status of such litigation or proceedings. The Issuer will, and will cause each of its Subsidiaries to, give notice to the Purchaser, in writing, in form and detail reasonably satisfactory to the Purchaser, within ten (10) days of any judgment not covered by insurance, final or otherwise, against the Issuer or any of the Subsidiaries in an amount in excess of $5,000,000.

9.5.5 Notice of FCC Filings . The Issuer will, and will cause each of its Subsidiaries to, contemporaneously with the filing or mailing thereof, give notice to the Purchaser, of such filing or mailing of any periodic or special reports of a material nature filed with the FCC and relating to any Station owned or operated by the Issuer or any of the Subsidiaries.

9.5.6 [Reserved] .

9.5.7 Foreign Subsidiaries . The Issuer will, and will cause each of its Subsidiaries to, promptly give notice to the Purchaser in writing of the acquisition or creation of any new direct subsidiary that is not organized under the laws of the United States or any state or political subdivision of the United States.

9.6 Legal Existence; Conduct of Business; Maintenance of Properties . Except as otherwise permitted under §10.5.1(a) of the OpCo Credit Agreement (as in effect on the date hereof), the Issuer will do or cause to be done all things necessary to preserve and keep in full force and effect its legal existence, rights and franchises and those of its Subsidiaries and will not, and will not cause or permit any of its Subsidiaries to, convert to a limited liability company or a limited liability partnership without providing at least thirty (30) days’ prior written notice to the Purchaser. Except as otherwise permitted under §10.5, the Issuer (i) will cause all of its properties and those of its Subsidiaries used or useful in the conduct of its business or the business of its Subsidiaries to be maintained and kept in good condition, repair and working order and supplied with all necessary equipment, (ii) will cause to be made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as in the judgment of the Issuer may be necessary so that the business carried on in connection therewith may be properly and advantageously conducted at all times, (iii) will, and will cause each of its Subsidiaries (other than the License Subsidiaries) to, continue to engage primarily in the radio and television broadcasting and/or magazine publishing businesses now conducted by each of them and in related businesses, (iv) will cause each of the License Subsidiaries to engage solely in the business of holding the FCC Licenses necessary for the Operating Subsidiaries to operate the Stations operated by each of them, (v) will, and will cause each of its Subsidiaries to, obtain, maintain, preserve, renew, extend and keep in full force and effect all permits, rights, licenses, franchises, authorizations, patents, trademarks, copyrights and privileges to the extent necessary for the proper conduct of its business, including FCC Licenses and (vi) will, and will cause each of its Subsidiaries to, continue to engage primarily in the businesses now conducted by them and in related businesses; provided that nothing in this §9.6 shall prevent the Issuer from discontinuing the operation and maintenance of any of its properties or any of those of its Subsidiaries if such discontinuance is, in the judgment of the Issuer, desirable in the conduct of its or their business and that do not in the aggregate have a Material Adverse Effect.

9.7 Insurance . The Issuer will, and will cause each of its Subsidiaries to, maintain with financially sound and reputable insurers insurance with respect to its properties and business against such casualties and contingencies as shall be in accordance with the general practices of businesses engaged in similar activities in similar geographic areas and in amounts, containing such terms, in such forms and for such periods as may be reasonable and prudent and as is consistent with sound business practice in the industry. In the event of any failure by the Issuer or any of its Subsidiaries to provide and maintain insurance as required herein, the Purchaser may after notice to the Issuer to such effect, provide such insurance and charge the amount thereof to the Issuer and the Issuer hereby promises to pay to the Purchaser on demand the amount of any disbursements made by the Purchaser for such purpose. Within ninety (90) days of the end of each fiscal year of the Issuer, the Issuer shall furnish to the Purchaser certificates or other evidence reasonably satisfactory to the Purchaser of compliance with the foregoing provisions.

9.8 Taxes . The Issuer will, and will cause each of its Subsidiaries to, duly pay and discharge, or cause to be paid and discharged, before the same shall become overdue, all taxes, assessments and other governmental charges (other than taxes, assessments and other governmental charges imposed by foreign jurisdictions that in the aggregate are not material to the business or assets of the Issuer on an individual basis or of the Issuer and its Subsidiaries on a consolidated basis) imposed upon it and its Real Estate, sales and activities, or any part thereof, or upon the income or profits therefrom, as well as all claims for labor, materials, or supplies that if unpaid might by law become a Lien or charge upon any of its property unless failure to pay could not reasonably be expected to cause a Material Adverse Effect; provided that any such tax, assessment, charge, levy or claim need not be paid if the validity or amount thereof is then being contested in good faith by appropriate proceedings and if the Issuer or such Subsidiary shall have set aside on its books adequate reserves in conformity with GAAP with respect thereto; and provided further that the Issuer and each Subsidiary of the Issuer will pay all such taxes, assessments, charges, levies or claims forthwith upon the commencement of proceedings to foreclose any Lien that may have attached as security therefor.

9.9 Inspection of Properties and Books, etc .

9.9.1 General . The Issuer shall permit the Purchaser or Purchaser’s other designated representatives to visit and inspect any of the properties of the Issuer or any of its Subsidiaries, to examine the books of account of the Issuer and its Subsidiaries (and to make copies thereof and extracts therefrom), and to discuss the affairs, finances and accounts of the Issuer and its Subsidiaries with, and to be advised as to the same by, its and their officers, all upon reasonable advance notice to the Issuer and at such reasonable times and intervals as the Purchaser may reasonably request.

9.9.2 Appraisals . If an Event of Default shall have occurred and be continuing, upon the request of the Purchaser, the Issuer will obtain and deliver to the Purchaser appraisal reports in form and substance and from appraisers reasonably satisfactory to the Purchaser, stating (a) the then current fair market, orderly liquidation and forced liquidation values of one or more of the Stations owned by the Issuer or its Subsidiaries, business units that hold the publishing assets and/or the Mortgaged Properties and (b) the then current business value of each of the Issuer and its Subsidiaries. All such appraisals shall be conducted and made at the expense of the Issuer.

9.9.3 Communications with Accountants . The Issuer authorizes the Purchaser to communicate directly with such Person’s independent certified public accountants and authorizes such accountants to disclose to the Purchaser any and all financial statements and other supporting financial documents and schedules including copies of any management letter with respect to the business, financial condition and other affairs of the Issuer or any of the Subsidiaries. At the request of the Purchaser, the Issuer shall deliver a letter addressed to such accountants instructing them to comply with the provisions of this §9.9.3.

9.10 Compliance with Laws, Contracts, Licenses, and Permits .

(a) The Issuer will, and will cause each of its Subsidiaries to, comply with (i) the applicable laws and regulations wherever its business is conducted, including all Environmental Laws and the Communications Act, (ii) the provisions of its Governing Documents, (iii) all agreements and instruments by which it or any of its properties may be bound and (iv) all applicable decrees, orders, and judgments, unless failure to comply could not reasonably be expected to cause a Material Adverse Effect. If any authorization, consent, approval, permit or license from any officer, agency or instrumentality of any government shall become necessary or required in order that the Issuer or any of its Subsidiaries may fulfill any of its obligations hereunder or any of the other Purchase Documents to which the Issuer or such Subsidiary is a party, the Issuer will, or (as the case may be) will cause such Subsidiary to, immediately take or cause to be taken all reasonable steps within the power of the Issuer or such Subsidiary to obtain such authorization, consent, approval, permit or license and furnish the Purchaser with evidence thereof.

(b) The Issuer will, and will cause each of its Subsidiaries to, (i) operate its Stations, unless failure to comply could not reasonably be expected to cause a Material Adverse Effect, in accordance with and in compliance with the Communications Act, (ii) file in a timely manner all necessary applications for renewal of all FCC Licenses that are material to the operations of its Stations, (iii) use its reasonable best efforts to defend any proceedings which could result in the termination, forfeiture or non-renewal of any FCC License, and (iv) promptly furnish or cause to be furnished to the Purchaser: (A) a copy of any order or notice of the FCC which designates any of the Issuer’s or any of its Subsidiaries’ FCC Licenses for a hearing or which refuses renewal or extension thereof, or reverses or suspends its or any of its Subsidiaries’ authority to operate a Station, (B) a copy of any competing application filed with respect to any of its franchises, licenses (including FCC Licenses), rights, permits, consents or other authorizations pursuant to which the Issuer or any of the Issuer’s Subsidiaries operates any Station, (C) a copy of any citation, notice of violation or order to show cause issued by the FCC in relation to any of the Issuer’s or any of its Subsidiaries’ Stations and (D) a copy of any notice or application by the Issuer or any of its Subsidiaries requesting authority to cease broadcasting on any Station or to cease operating any Station for any period in excess of five (5) days.

9.11 Employee Benefit Plans . The Issuer will (a) promptly upon filing the same with the Department of Labor or Internal Revenue Service, upon request of the Purchaser, furnish to the Purchaser a copy of the most recent actuarial statement required to be submitted under §103(d) of ERISA and Annual Report, Form 5500, with all required attachments, in respect of each Guaranteed Pension Plan, (b) promptly upon receipt or dispatch, furnish to the Purchaser any notice, report or demand sent or received in respect of a Guaranteed Pension Plan under §§302, 4041, 4042, 4043, 4063, 4065, 4066 and 4068 of ERISA, or in respect of a Multiemployer Plan, under §§4041A, 4202, 4219, 4242, or 4245 of ERISA and (c) promptly upon request of the Purchaser, furnish to the Purchaser a copy of all actuarial statements required to be submitted under all Applicable Pension Legislation.

9.12 Consenting OpCo Lender Notice Addresses . Upon request from the Purchaser from time to time, the Issuer will provide to the Purchaser a notice address and contact information for each Consenting OpCo Lender to the extent the Issuer has such information. If the Issuer does not have such information, the Issuer will request such information from the OpCo Administrative Agent.

9.13 [Reserved] .

9.14 [Reserved] .

9.15 [Reserved] .

9.16 Further Assurances . The Issuer will, and will cause each of its Subsidiaries to, cooperate with the Purchaser and execute such further instruments and documents as the Purchaser shall reasonably request to carry out to their satisfaction the transactions contemplated by this Purchase Agreement and the other Purchase Documents.

9.17 Bridge to Sale Transactions Generally .

(a) (i) Bridge to Sale Transfers Generally . The Issuer agrees that the Issuer will not, and will not permit any Subsidiary to, consummate a Bridge to Sale Transfer, (x) in the case of any Bridge to Sale Transfer prior to the Discharge of the OpCo Credit Agreement, unless such Bridge to Sale Transfer is permitted under the OpCo Credit Agreement (as in effect on the date hereof) and (y) thereafter unless the following conditions have been satisfied to the satisfaction of the Purchaser:

(A) such Bridge to Sale Transfer is to a Bridge to Sale Excluded Subsidiary and a Bridge to Sale License Subsidiary; and

(B) the Investment constituting the Bridge to Sale Transfer satisfies the conditions set forth in §10.3(j) of the OpCo Credit Agreement (as in effect on the date hereof); and

(C) the Asset Sale constituting the Bridge to Sale Transfer satisfies the conditions set forth in §10.5.2(g)(i) of the OpCo Credit Agreement (as in effect on the date hereof); and

(D) such Bridge to Sale Transfer shall occur contemporaneously with the execution and delivery of a LMA Agreement that is a Bridge to Sale Transaction Document by the applicable Bridge to Sale Excluded Subsidiary and, if applicable, the applicable Bridge to Sale License Subsidiary, on the one hand, and a non-Affiliate third party, on the other hand.

(ii) Interests of Bridge to Sale Excluded Subsidiary and Bridge to Sale License Subsidiary . The Issuer agrees that, at all times, (i) the Issuer or one of its Subsidiaries shall hold 100% of the issued and outstanding Capital Stock of each Bridge to Sale Excluded Subsidiary and (ii) the applicable Bridge to Sale Excluded Subsidiary shall hold 100% of the issued and outstanding Capital Stock of any Bridge to Sale License Subsidiary that holds the FCC License associated with any Station held by such Bridge to Sale Excluded Subsidiary.

(b) [Reserved]

(c) Distributions . Upon receipt by a Bridge to Sale Excluded Subsidiary, a Bridge to Sale License Subsidiary or other Affiliate of the Issuer of any cash payments under a Bridge to Sale Transaction Document, the Issuer shall cause such Person to promptly, but in no event more than (i) two (2) Business Days thereafter for any proceeds of any Bridge to Sale Third Party Transaction and (ii) five (5) Business Days thereafter for any cash payments made under any LMA Agreement, make a cash distribution to Emmis OpCo equal to 100% of such cash payments and other proceeds received by such Person, provided that such Bridge to Sale Excluded Subsidiary, such Bridge to Sale License Subsidiary or other Affiliate of the Issuer may retain and shall not be required to make a cash distribution as otherwise required (x) with respect to that portion of any cash payments received pursuant to any LMA Agreement that are used to pay reasonable out-of-pocket expenses incurred by such Bridge to Sale Excluded Subsidiary in connection with the operation of the relevant Station during the period for which such cash payments relate, (y) with respect to that portion of any cash payments received pursuant to any LMA Agreement approved by the OpCo Administrative Agent or, after the Discharge of the OpCo Credit Agreement, the Purchaser in writing (such approval not to be unreasonably withheld) that are reserved to pay reasonable out-of-pocket expenses anticipated to be incurred by such Bridge to Sale Excluded Subsidiary in connection with the operation of the relevant Station during the relevant period for which such cash payments relate and (z) with respect to that portion of proceeds received from a Bridge to Sale Third Party Transaction that are applied to pay reasonable out-of-pocket fees, commissions and other reasonable and customary direct expenses actually incurred in connection with such sale, including any income taxes payable as a result of such sale and the amount of any transfer or documentary taxes required to be paid by such Person in connection with such sale. Such cash distributions shall not constitute cash returns of capital for purposes of §10.3(j) of the OpCo Credit Agreement (as in effect on the date hereof).

(d) Bridge to Sale Third Party Transactions Generally . Not less than three Business Days prior to the entry by the Issuer, Emmis OpCo, any Bridge to Sale Excluded Subsidiary, any Bridge to Sale License Subsidiary or any other Affiliate thereof into any Bridge to Sale Transaction Documents, the Issuer shall deliver to the Purchaser current drafts of all such Bridge to Sale Transaction Documents. Further, concurrently with the execution and delivery of such Bridge to Sale Transaction Documents by the Issuer, Emmis OpCo, any Bridge to Sale Excluded Subsidiary, any Bridge to Sale License Subsidiary or any other Affiliate thereof, the Issuer shall deliver to the Purchaser certified true, correct and complete copies of all such Bridge to Sale Transaction Documents.

The Issuer shall not permit any Bridge to Sale Excluded Subsidiary or any Bridge to Sale Licensed Subsidiary to consummate a Bridge to Sale Third Party Transaction unless the Bridge to Sale Transaction Conditions have been satisfied.

9.18 Public Disclosure . The Issuer agrees that it will not in the future issue any press release or other public disclosure using the name of the Purchaser or its Affiliates or referring to this Purchase Agreement or the other Purchase Documents without at least two (2) Business Days’ prior notice to the Purchaser and without the prior written consent of the Purchaser, unless (and only to the extent that) the Issuer is required to do so under law and then, in any event, the Issuer will consult with the Purchaser before issuing such press release or other public disclosure.

9.19 Use of Proceeds . The Issuer agrees that it will use the proceeds from the issuance of the Notes solely to fund one or more TRS Transactions, to fund the purchase price for the Preferred Stock pursuant to the Tender Offer and to pay fees and expenses in connection with the transactions contemplated hereby. No part of such proceeds will be used, whether directly or indirectly, for any purpose that entails a violation of any law, including Regulations T, U and X of the Board of Governors of the Federal Reserve System.

9.20 TRS Transaction Termination . Immediately upon the delivery of the Subject Preferred Stock to the Issuer or any Affiliate of the Issuer or upon the settlement or termination of any TRS Transaction, the Issuer or such Affiliate of the Issuer will cancel the Subject Preferred Shares upon such delivery, settlement or termination.

9.21 TRS Transaction Disposition . In the event that the Issuer or any Affiliate of the Issuer receives any proceeds (whether in cash or in kind) from the sale, transfer, assignment or other disposition of any TRS Transaction, the Issuer or such Affiliate of the Issuer will deposit such proceeds into a segregated account and not withdraw or otherwise release such proceeds without the consent of the Purchaser.

10. NEGATIVE COVENANTS .

The Issuer covenants and agrees that, so long as the Notes or any other Obligation is outstanding:

10.1 Restrictions on Indebtedness . The Issuer will not, and will not permit Emmis OpCo or any of its Subsidiaries to, create, incur, assume, guarantee or be or remain liable, contingently or otherwise, with respect to any Indebtedness, except (1) Permitted Refinancing Indebtedness incurred to refinance the OpCo Credit Agreement and (2) Indebtedness of Emmis OpCo and any of its Subsidiaries to the extent expressly permitted pursuant to §10.1 of the OpCo Credit Agreement (as in effect on the date hereof); provided , however , that notwithstanding the foregoing, no Indebtedness (other than Indebtedness permitted under clauses (a) through (d), (f), (g), (i) or (j) of §10.1 of the OpCo Credit Agreement (as in effect on the date hereof)) shall be incurred, assumed, or guaranteed by Emmis OpCo or any of its Subsidiaries nor will Emmis OpCo or any of its Subsidiaries become liable therefor unless at the time of such incurrence, assumption or guarantee or at the time Emmis OpCo or its Subsidiaries become liable therefor and after giving effect thereto, the Total Leverage Ratio shall be less than 3.0:1.0, as evidenced by a certificate of the Issuer substantially in the form of Exhibit J (the “ Total Leverage Ratio Certificate ”) delivered to the Purchaser prior to the incurrence of such indebtedness; provided , however , that Permitted Refinancing Indebtedness may be incurred without regard to the Total Leverage Ratio restrictions set forth herein.

10.2 Restrictions on Liens .

10.2.1 Permitted Liens . The Issuer will not, and will not permit Emmis OpCo or any of its Subsidiaries to, (a) create or incur or suffer to be created or incurred or to exist any Lien upon any of its property or assets of any character whether now owned or hereafter acquired, or upon the income or profits therefrom; (b) transfer any of such property or assets or the income or profits therefrom outside the ordinary course of business for the purpose of subjecting the same to the payment of Indebtedness or performance of any other obligation in priority to payment of its general creditors; (c) acquire, or agree or have an option to acquire, any property or assets upon conditional sale or other title retention or purchase money security agreement, device or arrangement; (d) suffer to exist for a period of more than thirty (30) days after the same shall have been incurred any Indebtedness or claim against it that if unpaid might by law or upon bankruptcy or insolvency, or otherwise, be given any priority whatsoever over its general creditors (other than in respect of de minimus amounts); or (e) sell, assign, pledge or otherwise transfer any “ receivables ” as defined in clause (g) of the definition of the term “ Indebtedness ,” with or without recourse (other than in connection with the disposition of the business operations of such Person relating thereto or a disposition of defaulted receivables for collection and not as a financing arrangement); provided that Emmis OpCo or any of its Subsidiaries may create or incur or suffer to be created or incurred or to exist any Lien, deposit, pledge, encumbrance, security agreement or mortgage (1) to the extent expressly permitted by §10.2.1 of the OpCo Credit Agreement (and any permitted amendment thereto) and (2) for the avoidance of doubt, in favor of the OpCo Lenders and OpCo Administrative Agent to secure the OpCo Obligations under the OpCo Credit Agreement, and any Permitted Refinancing Indebtedness; provided further that this §10.2.1 shall not apply to liens granted on the Subject Preferred Stock or the Issuer’s or Emmis OpCo’s right, title and interest in any TRS Transaction.

10.2.2 Restrictions on Negative Pledges and Upstream Limitations . The Issuer will not, nor will it permit Emmis OpCo or any of its Subsidiaries to enter into any agreement, contract or arrangement (other than this Purchase Agreement and the other Purchase Documents) restricting the ability of any Subsidiary of the Issuer to pay or make dividends or distributions in cash or kind to the Issuer, to make loans, advances or other payments of any nature to the Issuer, or to make transfers or distributions of all or any part of its assets to the Issuer; other than each of (a) and (b) in the case of restrictions or prohibitions to the text expressly permitted by clauses (i), (ii) and (iii) of §10.2.2 of the OpCo Credit Agreement (as in effect on the date hereof). Notwithstanding the forgoing, nothing in §10.2.2 shall restrict (x) the ability of Emmis OpCo or any Subsidiary of Emmis OpCo from creating, assuming or incurring any Lien upon its properties, revenues or assets or those of any of its Subsidiaries whether now owned or hereafter acquired to secure the “Obligations” (as defined in the OpCo Credit Agreement) or (y) any Subsidiary of Emmis OpCo to pay or make dividends or distributions in cash or kind to Emmis OpCo, to make loans, advances or other payments of any nature to Emmis OpCo, or to make transfers or distributions of all or any part of its assets to the Issuer.

10.3 Restrictions on Investments . The Issuer will not, and will not permit Emmis OpCo or any of its Subsidiaries to, make or permit to exist or to remain outstanding any Investment, except Emmis OpCo and its Subsidiaries may make any Investment to the extent expressly permitted by §10.3 of the OpCo Credit Agreement (as in effect on the date hereof).

10.4 Restricted Payments . The Issuer will not, and will not permit Emmis OpCo or any of its Subsidiaries to, make any Restricted Payments, except Emmis OpCo and its Subsidiaries may make Restricted Payments to the extent expressly permitted pursuant to §10.4 of the OpCo Credit Agreement (as in effect on the date hereof).

10.5 Merger, Consolidation, Acquisition and Disposition of Assets .

10.5.1 Mergers and Acquisitions . The Issuer will not, and will not permit Emmis OpCo or any of its Subsidiaries to, become a party to any merger, amalgamation or consolidation, or agree to or effect any asset acquisition or stock acquisition, or enter into any LMA Agreement, except Emmis OpCo and its Subsidiaries may become a party to any merger, amalgamation or consolidation, or agree to or effect any asset acquisition or stock acquisition, or enter into any LMA Agreement to the extent expressly permitted pursuant to §10.5.1 of the OpCo Credit Agreement (as in effect on the date hereof).

10.5.2 Disposition of Assets . The Issuer will not, and will not permit Emmis OpCo or any of its Subsidiaries to, become a party to or agree to or effect any disposition or swap of assets (which, for the avoidance of doubt, shall include Asset Sales and Asset Swaps), including Capital Stock of any Subsidiary (whether by means of a public or private offering or otherwise), except Emmis OpCo and its Subsidiaries may become a party to or agree to or effect any disposition or swap of assets (which, for the avoidance of doubt, shall include Asset Sales and Asset Swaps), including Capital Stock of any Subsidiary (whether by means of a public or private offering or otherwise) (i) to the extent expressly permitted pursuant to §10.5.2 of the OpCo Credit Agreement (as in effect on the date hereof) and (ii) with respect to one (1) Bridge to Sale Third Party Transaction that provides for the sale of the related assets by Emmis OpCo or an Excluded Subsidiary at a future price specified pursuant to the related Bridge to Sale Transaction Documents, at a time prior to the time specified in the related Bridge to Sale Transaction Documents and at a price lower than such specified future price, so long as the aggregate sales price in such transaction is deemed to be for fair market value in the sole reasonable judgment of the Board of Directors of the Issuer (such disposition described in this clause (ii), the “ KMVN Sale .”); provided that this §10.5.2 shall not apply to any sale or other disposition of the Subject Preferred Stock or the Issuer’s or Emmis OpCo’s right, title and interest in any TRS Transaction.

10.6 Sale and Leaseback; LMA Agreements . The Issuer will not, and will not permit Emmis OpCo or any of its Subsidiaries to, enter into any arrangement, directly or indirectly, whereby the Issuer or any Subsidiary of the Issuer shall sell or transfer any property or Station or any significant portion of the property, assets and ownership rights used in connection with the operation of a Station owned by it in order then or thereafter to lease such property or Station (or associated rights or assets) or lease other property that the Issuer or any Subsidiary of the Issuer intends to use for substantially the same purpose as the property being sold or transferred or in order to then or thereafter enter into a LMA Agreement (or a similar agreement regardless of whether such agreement is with a non-Affiliate or an Affiliate) directly or indirectly relating to such property or the Station operated in connection with such property except that Emmis OpCo and its Subsidiaries may enter into any such transaction to the extent expressly permitted by §10.6 of the OpCo Credit Agreement (as in effect on the date hereof).

10.7 Compliance with Environmental Laws . The Issuer will not, and will not permit Emmis OpCo or any of its Subsidiaries to, (a) use any of the Real Estate or any portion thereof for the handling, processing, storage or disposal of Hazardous Substances, (b) cause or permit to be located on any of the Real Estate any underground tank or other underground storage receptacle for Hazardous Substances, (c) generate any Hazardous Substances on any of the Real Estate, (d) conduct any activity at any Real Estate or use any Real Estate in any manner so as to cause a release (i.e. releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, disposing or dumping) or threatened release of Hazardous Substances on, upon or into the Real Estate or (e) otherwise conduct any activity at any Real Estate or use any Real Estate in any manner that in any of clauses (a) through (e) would violate any Environmental Law or bring such Real Estate in violation of any Environmental Law, except where failure to comply could not reasonably be expected to result in a Material Adverse Effect.

10.8 Subordinated Debt . The Issuer will not amend, supplement or otherwise modify the terms of, or any other agreement relating to, Subordinated Debt or (except as otherwise expressly permitted under §10.4) prepay, redeem, repurchase, defease, or issue any notice of redemption or defeasance with respect to, any of the Subordinated Debt, provided , however , that this §10.8 shall not restrict the right of the Issuer or any of its Subsidiaries to amend any document evidencing Subordinated Debt to extend the maturity thereof or amend any covenants therein so as to make such covenants less restrictive for the Issuer and its Subsidiaries.

10.9 Employee Benefit Plans . Neither the Issuer nor any ERISA Affiliate will:

(a) engage in any “ prohibited transaction ” within the meaning of §406 of ERISA or §4975 of the Code which could result in a material liability for the Issuer or any of its Subsidiaries; or

(b) permit any Guaranteed Pension Plan to incur an “accumulated funding deficiency”, as such term is defined in §302 of ERISA, whether or not such deficiency is or may be waived; or

(c) fail to contribute to any Guaranteed Pension Plan to an extent which, or terminate any Guaranteed Pension Plan in a manner which, could result in the imposition of a lien or encumbrance on the assets of the Issuer or any of its Subsidiaries pursuant to §302(f) or §4068 of ERISA; or

(d) amend any Guaranteed Pension Plan in circumstances requiring the posting of security pursuant to §307 of ERISA or §401(a)(29) of the Code; or

(e) permit or take any action which would result in the aggregate benefit liabilities (with the meaning of §4001 of ERISA) of all Guaranteed Pension Plans exceeding the value of the aggregate assets of such Plans, disregarding for this purpose the benefit liabilities and assets of any such Plan with assets in excess of benefit liabilities; or

(f) permit or take any action which would contravene any Applicable Pension Legislation in any way which could reasonably be expected to have a Material Adverse Effect.

10.10 Fiscal Year . The Issuer will not, and will not permit any of its Subsidiaries to, change the date of the end of its fiscal year from that set forth in §8.4.1.

10.11 Transactions with Affiliates . The Issuer will not, and will not permit any of its Subsidiaries to, engage in any transaction with any Affiliate (including, without limitation, the Excluded Subsidiaries), and the Issuer will not engage in any transaction with any Excluded Subsidiary, in each case whether or not in the ordinary course of business and including, without limitation, any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any such Affiliate or, to the knowledge of the Issuer or such Subsidiary, any corporation, partnership, trust or other entity in which any such Affiliate has a substantial interest or is an officer, director, trustee or partner, other than on fair and reasonable terms substantially similar to those that would be obtainable at the time by the Issuer or such Subsidiary, as applicable, and such Affiliate in a comparable arm’s length transaction between or among Persons that are not Affiliates of one another except that the Issuer, Emmis OpCo and its Subsidiaries may engage in any such transaction to the extent expressly permitted by §10.11 of the OpCo Credit Agreement (as in effect on the date hereof).

10.12 Certain Intercompany Matters . The Issuer will not permit any of its Excluded Subsidiaries to (a) fail to satisfy customary formalities with respect to organization separateness, including (i) the maintenance of separate books and records and (ii) the maintenance of separate bank accounts in its own name, (b) fail to act solely in its own name and through its authorized officers and agents, (c) commingle any money or other assets of any Excluded Subsidiary with any money or other assets of the Issuer or any other Subsidiary of the Issuer, or (d) take any action, or conduct its affairs in a manner, which could reasonably be expected to result in the separate organizational existence of the Excluded Subsidiaries being ignored under any circumstance.

10.13 Activities and Indebtedness of the Issuer . The Issuer shall not (i)(x) perform any services or activities, or make any cash payments for the performance of any services or activities, other than those services and activities described in clauses (i) through (viii) of the definition of “Issuer Corporate Overhead Expenses” or reasonably related thereto, or (y) perform any services or activities, or make any cash payments for the performance of any services or activities that are ordinarily performed or paid for by an operating company, (ii) engage in any trade or business, (iii) own any assets, (iv) directly or indirectly, beneficially or otherwise, hold or own (whether pursuant to an Asset Swap or otherwise) any Capital Stock or other securities of any Person, (v) issue or incur any Indebtedness or (vi) effect any Equity Issuances, except the Issuer may perform the services and activities, make cash payments for services and activities, engage in a trade or business, own assets, own Capital Stock or securities, issue or incur Indebtedness or effect Equity Issuances in each case to the extent expressly permitted pursuant to §10.13 of the OpCo Credit Agreement (as in effect on the date hereof).

10.14 Restrictions on Equity Issuances . None of the Issuer, Emmis OpCo or any Subsidiary shall effect any Equity Issuance on or after the Effective Date, except that Emmis OpCo may issue common stock to the extent expressly permitted pursuant to §10.14(a) of the OpCo Credit Agreement (or as otherwise consented to or approved by the OpCo Required Lenders) and the Issuer may issue common stock, other Capital Stock and Equity-Like Instruments to the extent expressly permitted by §10.14(b) of the OpCo Credit Agreement (or otherwise consented to or approved by the OpCo Required Lenders).

10.15 Bridge to Sale Transactions Generally . The Issuer shall not permit, and shall not permit Emmis OpCo or otherwise allow any Bridge to Sale Excluded Subsidiary or Bridge to Sale License Subsidiary to engage in any transaction of the type specified in clauses (i) through (viii) in §10.15 of the OpCo Credit Agreement (as in effect on the date hereof).

10.16 Debt Repurchases . The Issuer shall not, and shall not permit Emmis OpCo or any Subsidiary, Excluded Subsidiary or other Affiliate to, repurchase, buy, redeem, prepay, defease, receive an assignment of, issue any notice of redemption or defeasance with respect to, or otherwise cause the cancellation, forgiveness or purchase (including, without limitation, any setting aside of funds, or other provision for, or assurance of, payment), or enter into any other transaction which accomplishes a like result, of any of its Indebtedness (in each case other than the Notes and Obligations to the extent permitted hereby and the Senior Debt Obligations), except that the Issuer and Emmis OpCo may enter into any transaction to the extent expressly permitted pursuant to clauses (a), (b) or (c) of §10.16 of the OpCo Credit Agreement (as in effect on the date hereof).

10.17 Restrictions on Excluded Subsidiaries . The Issuer will not permit any of the Excluded Subsidiaries to (a) enter into or permit to exist any arrangement or agreement (other than the OpCo Credit Agreement (as in effect on the date hereof) and the other OpCo Loan Documents (as in effect on the date hereof)) which directly or indirectly prohibits any such Excluded Subsidiary from creating, assuming or incurring any Lien upon its properties, revenues or assets or those of any of its subsidiaries whether now owned or hereafter acquired to secure the Obligations (other than restrictions on specific assets, which assets are the subject of purchase money security interests), or (b) enter into any agreement, contract or arrangement (other than this Purchase Agreement and the other Purchase Documents) restricting the ability of any such Excluded Subsidiary to pay or make dividends or distributions in cash or kind to the Issuer or any other Subsidiary or Excluded Subsidiary, to make loans, advances or other payments of any nature to the Issuer or any other Subsidiary or Excluded Subsidiary, or to make transfers or distributions of all or any part of its assets to the Issuer or any other Subsidiary or Excluded Subsidiary; in each case other than (i) restrictions on specific assets which assets are the subject of purchase money security interests, (ii) customary anti-assignment provisions contained in leases and licensing agreements entered into by any Excluded Subsidiary in the ordinary course of its business and (iii) property subject to a pending Asset Sale.

10.18 Restrictions on Amendments and Refinancings of the OpCo Credit Agreement . The Issuer shall not permit, and shall not permit Emmis OpCo or otherwise allow any amendments, amendments and restatements, supplements, waivers, restructurings, renewals, extensions, replacements, refinancings or other modifications of the OpCo Credit Agreement (as in effect on the date hereof) (collectively, a “ Modification ”) if the effect of such Modification is that the aggregate principal amount of term loans and revolving commitments under all such Modifications exceeds the principal amount of the term loans and revolving commitments outstanding and available as of the date hereof under the OpCo Credit Agreement, which amount is $220,057,653.00, by more than the sum of (i) $25,000,000, plus any accrued and unpaid interest to the date any Permitted Refinancing Indebtedness is incurred and (ii) the costs and expenses incurred in connection with any Refinancing Indebtedness.

11. [ Reserved ] .

12. CONDITIONS .

Unless otherwise agreed to by the parties hereto, the obligations of the Issuer and the Purchaser hereunder shall be subject to the following conditions precedent on the Initial Purchase Date (unless otherwise provided herein):

12.1 Purchase Documents . This Purchase Agreement and the Notes shall have been duly executed and delivered by the respective parties thereto, shall be in full force and effect and shall be in form and substance satisfactory to the Purchaser.

12.2 Certified Copies of Governing Documents . The Purchaser shall have received from the Issuer and each of the Subsidiaries a copy, certified by a duly authorized officer of such Person to be true and complete on the Effective Date, of each of its Governing Documents as in effect on such date of certification.

12.3 Corporate or Other Action . All corporate (or other) action necessary for the valid execution, delivery and performance by the Issuer of this Purchase Agreement and the other Purchase Documents to which it is or is to become a party shall have been duly and effectively taken, and evidence thereof reasonably satisfactory to the Purchaser shall have been provided to the Purchaser.

12.4 Officer’s Certificates .

(a) The Purchaser shall have received from the Issuer an incumbency certificate, dated as of the Effective Date, signed by a duly authorized officer of such Person, and giving the name and bearing a specimen signature of each individual who shall be authorized: (i) to sign, in the name and on behalf of each of such Person, each of the Purchase Documents to which such Person is or is to become a party; and (ii) to give notices and to take other action on its behalf under the Purchase Documents.

(b) On the Effective Date, the Purchaser shall have received from the Issuer a certificate substantially in the form of Exhibit F (the “ Officer’s Certificate ”), dated as of such date, certifying that (i) each of the representations and warranties made by such Person under this Purchase Agreement and the other Purchase Documents are true and correct in all material respects on such date as though made on such date, and (ii) each of the conditions set forth in this §12 have been satisfied.

12.5 OpCo Credit Agreement . The Purchaser shall have received from the Issuer a certified copy of the OpCo Credit Agreement (as in effect on the date hereof), and the OpCo Credit Agreement shall be in full force and effect, and no “Default” or “Event of Default” (each as defined in the OpCo Credit Agreement) shall have occurred and be continuing or result from the transactions contemplated hereby.

12.6 Fourth Amendment to the OpCo Credit Agreement . The Fourth Amendment to the OpCo Credit Agreement shall (i) be in form and substance satisfactory to the Purchaser, (ii) have been executed and delivered by the OpCo Required Lenders, (iii) have been acknowledged by the OpCo Administrative Agent and the OpCo Administrative Agent shall have approved Purchaser as an “Eligible Assignee” (as defined in the OpCo Credit Agreement) for purposes of exercising its purchase right pursuant to §21 hereof and (iv) become effective in accordance with the terms thereof.

12.7 [Reserved] .

12.8 Financial Statements . The Purchaser shall have received copies of the consolidated financial statements of the Issuer and its subsidiaries as at February 28, 2011, prepared in accordance with GAAP and SEC requirements, together with a certification by the principal financial or accounting officer of the Issuer that the information contained in such financial statements fairly represents the financial position of the Issuer and its subsidiaries on the date thereof and that there are no contingent liabilities of the Issuer or any of its subsidiaries, as of the Effective Date involving material amounts, known to any officer of the Issuer or of any of the Subsidiaries not disclosed such consolidated financial statements and the related notes thereto other than contingent liabilities disclosed to the Purchaser in writing prior to the Effective Date.

12.9 Third Party Consents . All other necessary governmental and third party consents to and notices of the transactions contemplated by the Purchase Documents shall have been obtained and given, and evidence thereof reasonably satisfactory to the Purchaser shall have been provided to the Purchaser.

12.10 [Reserved] .

12.11 Opinions of Counsel . The Purchaser shall have received a favorable legal opinion addressed to the Purchaser, dated as of the Initial Purchase Date, in form and substance reasonably satisfactory to the Purchaser, from:

(a) Paul, Weiss, Rifkind, Wharton & Garrison LLP, special New York counsel to the Issuer;

(b) Taft Stettinius & Hollister LLP, special Indiana counsel to the Issuer; and

12.12 Compliance Certificate . The Purchaser shall have received from the Issuer a Compliance Certificate demonstrating compliance with the covenants set forth in §11 of the OpCo Credit Agreement as of the Effective Date (provided that, for purposes of this §12.12, the Issuer shall use Consolidated EBITDA for the Reference Period ended August 31, 2011), together with a certificate from the principal financial or accounting officer of the Issuer certifying that no Default or Event of Default or “Default” or “Event of Default” (as each such term is defined in the OpCo Credit Agreement) has occurred and is continuing as of the Effective Date.

12.13 [Reserved]

12.14 Financial Condition . The Purchaser shall be reasonably satisfied and shall have received an officer’s certificate certifying that there has been no event or occurrence which has had a Material Adverse Effect since the Balance Sheet Date.

12.15 Expenses . The Issuer shall have paid to the Purchaser all fees and expenses of the Purchaser (including fees and expenses of counsel) incurred in connection with the transactions contemplated hereby up to a maximum amount of $250,000.

12.16 [Reserved] .

12.17 [Reserved] .

12.18 Accountant’s Letter . The Purchaser shall have received a copy of the letter to the Issuer’s accountants pursuant to §9.9.3.

12.19 [Reserved] .

12.20 Proceedings and Documents . All proceedings in connection with the transactions contemplated by this Purchase Agreement, the other Purchase Documents and all other documents incident thereto shall be reasonably satisfactory in substance and in form to the Purchaser and its counsel, and the Purchaser and its counsel shall have received all information and such counterpart originals or certified or other copies of such documents as the Purchaser or its counsel may reasonably request.

13. CONDITIONS TO EACH PURCHASE DATE .

13.1 Conditions to Initial Purchase Date . The obligation of the Purchaser to purchase the Notes to be issued on such date shall be subject to the satisfaction of the conditions precedent in Article 12 and the satisfaction of the following additional conditions precedent on such date:

(a) The delivery of a Notice of Purchase;

(b) Each of the representations and warranties of the Issuer and the Subsidiaries contained in this Purchase Agreement, the other Purchase Documents or in any document or instrument delivered pursuant to or in connection with this Purchase Agreement shall be true in all material respects as of the date as of which they were made and shall also be true in all material respects at and as of the Purchase Date, with the same effect as if made at and as of that time;

(c) No Default or Event of Default has occurred and is continuing; and no “Default” or “Event of Default” has occurred and is continuing under the OpCo Credit Agreement;

(d) The original aggregate principal amount of the Notes issued on the Initial Purchase Date shall be at least $10,000,000 and not greater than $35,000,000;

(e) the Purchaser shall have received satisfactory evidence that the Issuer has registered the Purchaser or the holder of the Note in the Register;

(f) the Purchaser shall have received an officer’s certificate duly executed by a senior financial officer of Emmis OpCo certifying that Emmis OpCo would have been in compliance with clauses (b) and (c) above; and

(g) all documents, instruments and agreements relating to any TRS Transaction to be funded with the proceeds of the Note on the Initial Purchase Date shall be in form and substance consistent with the forms therefor previously delivered to the Purchaser by the Issuer.

13.2 Conditions to each Subsequent Purchase . The obligation of the Purchaser to purchase a Note on each Purchase Date (other than the Initial Purchase Date) shall be subject to the satisfaction of the following conditions precedent on such date:

(a) The delivery of a Notice of Purchase;

(c) No Default or Event of Default has occurred and is continuing and no “Default” or “Event of Default” has occurred and is continuing under the OpCo Credit Agreement;

(d) The original aggregate principal amount of the Notes issued on the applicable Purchase Date plus the original aggregate principal amount of all other Notes shall not exceed $35,000,000;

(e) the Purchaser shall have received satisfactory evidence that the Issuer has registered the Purchaser or the holder of the Note in the Register;

(g) all documents, instruments and agreements relating to any TRS Transaction to be funded with the proceeds of the Note on the Purchase Date shall be in form and substance consistent with the forms therefor previously delivered to the Purchaser by the Issuer; and

(h) the Tender Offer to be funded with the proceeds of the Note on the Purchase Date shall be executed in accordance with the terms of the definition thereof herein; and

(i) the Issuer shall afford the Purchaser a reasonable opportunity to review any provisions of any disclosure in connection with such Tender Offer that describe the existence or the terms of this Purchase Agreement, the Notes, the Purchaser and the Affiliates of the Purchaser before any such disclosure is disseminated and the Purchaser shall not have notified the Issuer within two (2) Business Days of being provided the disclosure that such disclosure is unacceptable to the Purchaser in the reasonable exercise of its discretion.

14. EVENTS OF DEFAULT; ACCELERATION; ETC .

14.1 Events of Default and Acceleration . If any of the following events (“ Events of Default ” or, if the giving of notice or the lapse of time or both is required, then, prior to such notice or lapse of time, “ Defaults ”) shall occur:

(a) the Issuer shall fail to pay any principal of the Notes when the same shall become due and payable, whether at the stated date of maturity or any accelerated date of maturity or at any other date fixed for payment;

(b) the Issuer shall fail to pay any other sums due hereunder or under any of the other Purchase Documents, within three (3) Business Days of when the same shall become due and payable, whether at the stated date of maturity or any accelerated date of maturity or at any other date fixed for payment;

(c) (i) the Issuer shall fail to comply with any of its covenants contained in §9.2, §9.4, §9.5 (other than §9.5.5), §9.6(iii) through (vi), §9.9, §9.17 (other than §9.17(b)(i), §9.17(b)(ii) and §9.17(d)(i)) or §10; or (ii) the Issuer, any Bridge to Sale Excluded Subsidiary, any Bridge to Sale License Subsidiary or any Affiliate thereof shall fail to comply with §9.17(b)(i), §9.17(b)(ii) or §9.17(d)(i) and such failure continues for fifteen (15) days;

(d) the Issuer shall fail (i) to comply with §9.7 for ten (10) Business Days after written notice of such failure has been given to the Issuer by the Purchaser; or (ii) to perform any term, covenant or agreement contained herein or in any of the other Purchase Documents (other than those specified elsewhere in this §14.1) for thirty (30) days after written notice of such failure has been given to the Issuer by the Purchaser;

(e) any representation or warranty of the Issuer in this Purchase Agreement or any of the other Purchase Documents or in any other document or instrument delivered pursuant to or in connection with this Purchase Agreement shall prove to have been false in any material respect upon the date when made or deemed to have been made or repeated;

(f) any Senior Debt Obligations or any obligation for borrowed money or credit received or in respect of any Capitalized Leases in each case in an amount greater than $10,000,000 shall be declared to be due and payable, or required to be prepaid other than by a regularly scheduled required prepayment or as a mandatory prepayment prior to the statement maturity thereof;

(g) any of the Issuer, any of the Subsidiaries or the Austin Partnership or RAM, shall make an assignment for the benefit of creditors, or admit in writing its inability to pay or generally fail to pay its debts as they mature or become due, or shall petition or apply for the appointment of a trustee or other custodian, liquidator or receiver of any of the Issuer, any of the Subsidiaries, or the Austin Partnership or RAM, or of any substantial part of the assets of any such Person, or shall commence any case or other proceeding relating to any such Person under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation or similar law of any jurisdiction, now or hereafter in effect, or shall take any action to authorize or in furtherance of any of the foregoing, or if any such petition or application shall be filed or any such case or other proceeding shall be commenced against any of the Issuer, any Subsidiary, the Austin Partnership or RAM, and any such Person shall indicate its approval thereof, consent thereto or acquiescence therein or such petition or application shall not have been dismissed within sixty (60) days following the filing thereof;

(h) a decree or order is entered appointing any such trustee, custodian, liquidator or receiver or adjudicating any of the Issuer, any Subsidiary, the Austin Partnership or RAM, bankrupt or insolvent, or approving a petition in any such case or other proceeding, or a decree or order for relief is entered in respect of any such Person in an involuntary case under federal bankruptcy laws as now or hereafter constituted;

(i) there shall remain in force, undischarged, unsatisfied and unstayed, for more than thirty (30) days, whether or not consecutive, any final judgment against any of the Issuer, any Subsidiary, the Austin Partnership or RAM, that, with other outstanding final judgments, undischarged, against such Person exceeds in the aggregate $5,000,000;

(j) any default shall occur with respect to all or any part of the Subordinated Debt or the holders of all or any part of the Subordinated Debt shall accelerate the maturity of all or any part of the Subordinated Debt; the Subordinated Debt shall be prepaid, redeemed or repurchased in whole or in part (other than pursuant to §10.4(d) of the OpCo Credit Agreement (as in effect on the date hereof)) or an offer to prepay, redeem or repurchase the Subordinated Debt in whole or in part shall have been made (other than pursuant to §10.4(d) of the OpCo Credit Agreement (as in effect on the date hereof)) or the subordination provisions of such Subordinated Debt are found by any court, or asserted by the trustee in respect of, or any holder of, Subordinated Debt in a judicial proceeding to be, invalid or unenforceable;

(k) any of the Purchase Documents shall be cancelled, terminated, revoked or rescinded with the express prior written agreement, consent or approval of the Purchaser, or any action or suit at law or in equity or other legal proceeding to cancel, revoke or rescind any of the Purchase Documents shall be commenced by or on behalf of the Issuer or any of the Subsidiaries party thereto or any of their respective stockholders, or any court or any other governmental or regulatory authority or agency of competent jurisdiction shall make a determination that, or issue a judgment, order, decree or ruling to the effect that, any one or more of the Purchase Documents is illegal, invalid or unenforceable in accordance with the terms thereof;

(l) the Issuer or any ERISA Affiliate incurs any liability to the PBGC or a Guaranteed Pension Plan pursuant to Title IV of ERISA in an aggregate amount exceeding $5,000,000, or the Issuer or any ERISA Affiliate is assessed withdrawal liability pursuant to Title IV of ERISA by a Multiemployer Plan requiring aggregate annual payments exceeding $5,000,000, or any of the following occurs with respect to a Guaranteed Pension Plan: (i) an ERISA Reportable Event, or a failure to make a required installment or other payment (within the meaning of §302(f)(1) of ERISA), provided that the Purchaser determines in its reasonable discretion that such event (A) could be expected to result in liability of the Issuer or any of its Subsidiaries to the PBGC or such Guaranteed Pension Plan in an aggregate amount exceeding $5,000,000 and (B) is reasonably likely to constitute grounds for the termination of such Guaranteed Pension Plan by the PBGC, for the appointment by the appropriate United States District Court of a trustee to administer such Guaranteed Pension Plan or for the imposition of a lien in favor of such Guaranteed Pension Plan; or (ii) the appointment by a United States District Court of a trustee to administer such Guaranteed Pension Plan; or (iii) the institution by the PBGC of proceedings to terminate such Guaranteed Pension Plan;

(m) any of the Issuer, any Subsidiary, the Austin Partnership or RAM, shall be enjoined, restrained or in any way prevented by the order of any Governmental Authority from conducting any material part of its business and such order shall continue in effect for more than thirty (30) days, provided that with respect to any such order relating to the renewal or availability of any Necessary Authorization, if the issuance of such order would not otherwise constitute an Event of Default under §14.1(t), it shall not cause an Event of Default solely by virtue of meeting the criteria of this clause (m);

(n) there shall occur any strike, lockout, labor dispute, embargo, condemnation, act of God or public enemy, or other casualty, which in any such case causes, for more than fifteen (15) consecutive days, the cessation or substantial curtailment of revenue producing activities at any facility of the Issuer or any of its Subsidiaries if such event or circumstance is not covered by business interruption insurance and would have a Material Adverse Effect;

(o) there shall occur the loss, suspension or revocation of, or failure to renew, any license or permit now held or hereafter acquired by any of the Issuer, any Subsidiary, the Austin Partnership or RAM, if such loss, suspension, revocation or failure to renew would have a Material Adverse Effect;

(p) a Change of Control shall occur;

(q) any default or event of default shall occur under any documents entered into in connection with any Permitted Acquisition, which such default or event of default could reasonably be expected to have a Material Adverse Effect;

(r) [Reserved];

(s) the commencement of proceedings to suspend, revoke, terminate or substantially and adversely modify any material FCC License or other material license of any of the Issuer, any Subsidiary, the Austin Partnership or RAM, or of any Stations of any thereof, if such proceeding shall continue uncontested for forty-five (45) days;

(t) appropriate proceedings for the renewal of any material Necessary Authorization shall not be commenced prior to the expiration thereof or if such Necessary Authorization is not renewed or otherwise made available for the use of any of the Issuer, any Subsidiary, the Austin Partnership or RAM, provided that no Event of Default shall be deemed to occur under this clause (t) if (A) no Material Adverse Effect shall have occurred as a result of such event and (B) the Issuer shall have demonstrated compliance with §11 of the OpCo Credit Agreement (as in effect on the date hereof) on a “Pro Forma Basis” (as defined in the OpCo Credit Agreement (as in effect on the date hereof) and both before and after giving effect to such event) as though the affected Station had been sold in an Asset Sale as of the first day of the Reference Period most recently ended and the Issuer, the Subsidiary, the Austin Partnership or RAM, (as applicable) received no consideration for such sale;

(u) any contractual obligation which is necessary to the broadcasting operations of any of the Issuer, any Subsidiary, the Austin Partnership or RAM, shall be revoked or terminated and not replaced by a substitute, without a Material Adverse Effect, within ninety (90) days after such revocation or termination;

(v) any order of the FCC relating to any Permitted Acquisition granting or consenting to a transfer of an FCC License in connection with any Permitted Acquisition which has been completed shall not have become final and any Governmental Authority shall have entered an order reversing such order (whether or not such order shall be subject to further appeal);

(w) [Reserved];

(x) [Reserved];

(y) (i) the Austin Partnership shall incur any Indebtedness in an aggregate amount at any one time outstanding in excess of $20,000,000 or (ii) the partnership agreement or any other governing documents relating to the Austin Partnership shall permit, after giving effect to any amendment, modification or waiver of the terms thereof, or there shall occur, any cash or other distribution (including any redemption, purchase, retirement or other acquisition of any partnership interests or return of capital attributable to any partnership interests) by the Austin Partnership to all or any of its partners which is not made simultaneously to all of its partners on a pro rata basis, in terms of both value and kind, in accordance with such partners’ proportional equity interests in the Austin Partnership; provided that it shall not be an Event of Default hereunder if the Issuer or any of its Subsidiaries receives any distribution in excess of their pro rata share as so determined or if the Issuer or any of its Subsidiaries receives any repayment of Indebtedness advanced by the Issuer or any of its Subsidiaries to the Austin Partnership;

(z) any Bridge to Sale Excluded Subsidiary or any Bridge to Sale License Subsidiary shall make an assignment for the benefit of creditors, or admit in writing its inability to pay or generally fail to pay its debts as they mature or become due, or shall petition or apply for the appointment of a trustee or other custodian, liquidator or receiver of any Bridge to Sale Excluded Subsidiary or any Bridge to Sale License Subsidiary or of any substantial part of the assets of such Person or shall commence any case or other proceeding relating to such Person under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation or similar law of any jurisdiction, now or hereafter in effect, or shall take any action to authorize or in furtherance of any of the foregoing, or if any such petition or application shall be filed or any such case or other proceeding shall be commenced against any Bridge to Sale Excluded Subsidiary or any Bridge to Sale License Subsidiary and such Person shall indicate its approval thereof, consent thereto or acquiescence therein or such petition or application shall not have been dismissed within sixty (60) days following the filing thereof;

(aa) a decree or order is entered appointing any such trustee, custodian, liquidator or receiver or adjudicating any Bridge to Sale Excluded Subsidiary or any Bridge to Sale License Subsidiary bankrupt or insolvent, or approving a petition in any such case or other proceeding, or a decree or order for relief is entered in respect of any such Person in an involuntary case under federal bankruptcy laws as now or hereafter constituted; or

(bb) the Issuer shall fail to issue a Note in accordance with §2.

then, and in any such event, so long as the same may be continuing, the Purchaser may, by notice in writing to the Issuer declare all amounts owing with respect to this Purchase Agreement, the Notes and the other Purchase Documents to be, and they shall thereupon forthwith become, immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Issuer; provided that in the event of any Event of Default specified in §14.1(g) or §14.1(h), all such amounts shall become immediately due and payable automatically and without any requirement of notice from the Purchaser.

14.2 [Reserved] .

14.3 Remedies . In case any one or more of the Events of Default shall have occurred and be continuing, and whether or not the Purchaser shall have accelerated the maturity of the Notes pursuant to §14.1, the Purchaser, if owed any amount with respect to the Notes, may proceed to protect and enforce its rights by suit in equity, action at law or other appropriate proceeding, whether for the specific performance of any covenant or agreement contained in this Purchase Agreement and the other Purchase Documents or any instrument pursuant to which the Obligations to the Purchaser are evidenced, including as permitted by applicable law the obtaining of the ex parte appointment of a receiver, and, if such amount shall have become due, by declaration or otherwise, proceed to enforce the payment thereof or any other legal or equitable right of the Purchaser. No remedy herein conferred upon the Purchaser or the holder of any Note is intended to be exclusive of any other remedy and each and every remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute or any other provision of law.

15. [Reserved] .

16. [Reserved] .

17. [Reserved] .

18. PROVISIONS OF GENERAL APPLICATION .

18.1 Setoff . Subject to §20 hereof, upon the occurrence and during the continuance of an Event of Default, the Purchaser is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by the Purchaser to or for the credit or the account of the Issuer against any and all of the obligations of the Issuer now or hereafter existing under this Purchase Agreement and the Notes, irrespective of whether or not the Issuer shall have made any demand under this Purchase Agreement or the Notes and although such obligations may be unmatured.

18.2 Expenses . The Issuer agrees to pay (a) the reasonable costs of the Purchaser in producing and reproducing this Purchase Agreement, the other Purchase Documents and the other agreements and instruments mentioned herein, (b) any taxes (including any interest and penalties in respect thereto), other than Excluded Taxes (as defined in §6.3.2), payable by the Purchaser (other than taxes based upon the Purchaser’s net income or profits) on or with respect to the transactions contemplated by this Purchase Agreement (the Issuer hereby agreeing to indemnify the Purchaser with respect thereto), (c) the reasonable fees, expenses and disbursements of the Purchaser’s Special Counsel (and only one such Purchaser’s Special Counsel at any one time) and any local or FCC counsel to the Purchaser incurred in connection with the preparation, syndication, administration or interpretation of the Purchase Documents and other instruments mentioned herein, each closing hereunder, any amendments, modifications, approvals, consents or waivers hereto or hereunder, or the cancellation of any Purchase Document upon payment in full in cash of all of the Obligations or pursuant to any terms of such Purchase Document providing for such cancellation, (d) the fees, expenses and disbursements (other than reimbursements of legal fees and expenses) of the Purchaser or any of its respective affiliates incurred by such Person or such affiliate in connection with the preparation, administration or interpretation of the Purchase Documents and other instruments mentioned herein, including appraisal and examination charges, (e) all reasonable out-of-pocket expenses (including without limitation reasonable attorneys’ fees and costs, which attorneys may be employees of the Purchaser, and reasonable consulting, accounting, appraisal, investment bankruptcy and similar professional fees and charges) incurred by the Purchaser in connection with (i) the enforcement of or preservation of rights under any of the Purchase Documents against the Issuer or any of the Subsidiaries or the administration thereof after the occurrence of a Default or Event of Default and (ii) any litigation, proceeding or dispute whether arising hereunder or otherwise, in any way related to the Purchaser’s relationship with the Issuer or any of its Subsidiaries, and (f) all reasonable fees, expenses and disbursements of the Purchaser incurred in connection with UCC searches, UCC filings, intellectual property searches, intellectual property filings or mortgage recordings. The covenants contained in this §18.2 shall survive payment or satisfaction in full of all other obligations.

18.3 Indemnification . The Issuer agrees to indemnify and hold harmless the Purchaser and its respective affiliates, officers, directors, employees, agents, trustees and advisors (each such Person an “Indem nified P erson”) from and against any and all claims, actions and suits whether groundless or otherwise, and from and against any and all liabilities, losses, damages and expenses of every nature and character arising out of this Purchase Agreement or any of the other Purchase Documents or the transactions contemplated hereby including, without limitation, (a) the Issuer or any of the Subsidiaries entering into or performing this Purchase Agreement or any of the other Purchase Documents or (b) with respect to the Issuer and its Subsidiaries and their respective properties and assets, the violation of any Environmental Law, the presence, disposal, escape, seepage, leakage, spillage, discharge, emission, release or threatened release of any Hazardous Substances or any action, suit, proceeding or investigation brought or threatened with respect to any Hazardous Substances (including, but not limited to, claims with respect to wrongful death, personal injury or damage to property), in each case including, without limitation, the reasonable fees and disbursements of counsel and allocated costs of internal counsel incurred in connection with any such investigation, litigation or other proceeding (all the foregoing, collectively, the “ Indemnified Liabilities ”), except to the extent any of the foregoing Indemnified Liabilities result solely from the gross negligence or willful misconduct of any such Indemnified Person. In litigation, or the preparation therefor, such Indemnified Person shall be entitled to select its own counsel and, in addition to the foregoing indemnity, the Issuer agrees to pay promptly the reasonable fees and expenses of such counsel. If, and to the extent that the obligations of the Issuer under this §18.3 are unenforceable for any reason, the Issuer hereby agrees to make the maximum contribution to the payment in satisfaction of such obligations which is permissible under applicable law. The covenants contained in this §18.3 shall survive payment or satisfaction in full of all other Obligations.

18.4 Treatment of Certain Confidential Information .

18.4.1 Confidentiality . The Purchaser agrees, on behalf of itself and each of its affiliates, directors, officers, employees and any Person which manages the Purchaser, to use reasonable precautions to keep confidential, in accordance with their customary procedures for handling confidential information of the same nature and in accordance with safe and sound financial industry practices, any non-public information supplied to it by the Issuer or any of its Subsidiaries pursuant to this Purchase Agreement, provided that nothing herein shall limit the disclosure of any such information (a) after such information shall have become public other than through a violation of this §18, or becomes available to the Purchaser on a nonconfidential basis from a source other than the Issuer, (b) to the extent required by statute, law, rule, regulation or judicial process, (c) to the Purchaser’s Affiliates, directors, officers, employees, trustees, advisors, and agents, including, without limitation, counsel or financial advisers for any of the Purchaser (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of the information and instructed to keep such information confidential), (d) to bank examiners or any other regulatory or self-regulatory authority having or reasonably claiming to have jurisdiction over the Purchaser, or to auditors or accountants, (e) to the Purchaser, (f) in connection with any litigation to which the Purchaser is a party, or in connection with the enforcement of rights or remedies hereunder or under any other Purchase Document, (g) to an Affiliate or a Subsidiary of the Purchaser, (h) to any actual or prospective assignee, pledgee or participant or any actual or prospective direct or indirect counterparty (or its advisors) to any swap, derivative or securitization transactions relating to credit or other risks or events arising under this Purchase Agreement or any other Purchase Document so long as such assignee, participant or direct or indirect counterparty (or its advisors), as the case may be, agrees to be bound by the provisions of §18.4 or (i) with the consent of the Issuer. Moreover, the Purchaser is hereby expressly permitted by the Issuer to refer to any of the Issuer and their respective Subsidiaries in connection with any advertising, promotion or marketing undertaken by the Purchaser and, for such purpose, the Purchaser may utilize any trade name, trademark, logo or other distinctive symbol associated with the Issuer or any of their respective Subsidiaries or any of their businesses.

The Purchaser acknowledges that (a) any confidential information may include material non-public information concerning the Issuer or a Subsidiary, as the case may be, (b) it has developed compliance procedures regarding the use of material non-public information and (c) it will handle such material non-public information in accordance with applicable law, including Federal and state securities laws.

18.4.2 Prior Notification . Unless specifically prohibited by applicable law or court order, the Purchaser shall, prior to disclosure thereof, notify the Issuer of any request for disclosure of any such non-public information by any governmental agency or representative thereof (other than any such request in connection with an examination of the financial condition of such Purchaser by such governmental agency) or pursuant to legal process.

18.4.3 Other . In no event shall the Purchaser be obligated or required to return any materials furnished to it by the Issuer or any of its respective Subsidiaries. The obligations of the Purchaser under this §18 shall supersede and replace the obligations of the Purchaser under any confidentiality letter in respect of this financing signed and delivered by the Purchaser to the Issuer prior to the date hereof and shall be binding upon any assignee of, or purchaser of any participation in, any interest in the Notes from the Purchaser.

18.5 Survival of Covenants, Etc . All covenants, agreements, representations and warranties made herein and in any of the other Purchase Documents or in any documents or other papers delivered by or on behalf of the Issuer or any of its Subsidiaries pursuant hereto (i) shall be deemed to have been relied upon by the Purchaser, notwithstanding any investigation heretofore or hereafter made by it, and (ii) shall survive the execution and delivery hereof and thereof and the issuance by the Purchaser of the Notes, as herein contemplated, and (iii) shall continue in full force and effect so long as this Purchase Agreement, the Notes or any of the other Purchase Documents remains outstanding or the Purchaser has any obligation to issue the Notes, and for such further time as may be otherwise expressly specified in this Purchase Agreement. All statements contained in any certificate or other paper delivered to the Purchaser at any time by or on behalf of the Issuer or any of its Subsidiaries pursuant hereto or in connection with the transactions contemplated hereby shall constitute representations and warranties by the Issuer or such Subsidiary hereunder and have been or will be relied upon by the Purchaser, regardless of any investigation made by the Purchaser or on its behalf and notwithstanding that the Purchaser may have had notice or knowledge of any Default at the time of any borrowing hereunder, and shall continue in full force and effect as long as the Notes or any other Obligation hereunder shall remain unpaid.

18.6 Notices . Except as otherwise expressly provided in this Purchase Agreement, all notices and other communications made or required to be given pursuant to this Purchase Agreement or any Notes shall be in writing and shall be delivered in hand, mailed by United States registered or certified first class mail, postage prepaid, sent by overnight courier, or sent by telecopy or facsimile and confirmed by delivery via courier or postal service, addressed as follows:

(a) if to the Issuer or any of the Subsidiaries, at One Emmis Plaza, 40 Monument Circle, Suite 700, Indianapolis, Indiana 46204, Attention: Jeffrey H. Smulyan, Chairman, with a copy to J. Scott Enright, Esq., Emmis Operating Company, 40 Monument Circle, Suite 700, Indianapolis, Indiana 46204 and Eric Goodison, Esq., Paul, Weiss, Rifkind, Wharton & Garrison LLP, 1285 Avenue of the Americas, New York, New York 10019, or at such other address for notice as the Issuer shall last have furnished in writing to the Person giving the notice; and

(b) if to the Purchaser, at such Purchaser’s address set forth on Schedule 1 hereto, with a copy to Seth Jacobson, Skadden, Arps, Slate, Meagher & Flom LLP, or such other address for notice as such party shall have last furnished in writing to the Person giving the notice.

Any such notice or demand shall be deemed to have been duly given or made and to have become effective (i) if delivered by hand, overnight courier or facsimile to a responsible officer of the party to which it is directed, at the time of the receipt thereof by such officer or the sending of such facsimile and (ii) if sent by registered or certified first-class mail, postage prepaid, on the third Business Day following the mailing thereof.

18.7 Communications .

(a) [Reserved] .

(b) [Reserved] .

(c) Change of Address, Etc . Each of the Issuer and the Purchaser may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the other parties hereto.

(d) Reliance by Purchaser . The Purchaser shall be entitled to rely and act upon any notices (including telephonic notices) purportedly given by or on behalf of the Issuer even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. The Issuer shall indemnify the Purchaser and the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of the Issuer. All telephonic notices to and other telephonic communications with the Purchaser may be recorded by the Purchaser, and each of the parties hereto hereby consents to such recording.

18.8 Governing Law . THIS PURCHASE AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED THEREIN, EACH OF THE OTHER PURCHASE DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID STATE OF NEW YORK (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW THAT WOULD RESULT IN THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION). THE ISSUER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS PURCHASE AGREEMENT OR ANY OF THE OTHER PURCHASE DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK OR APPELLATE COURTS FROM ANY THEREOF, AND SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS PURCHASE AGREEMENT AND THE OTHER PURCHASE DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK AND APPELLATE COURTS FROM ANY THEREOF. SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON SUCH PERSON BY MAIL AT THE ADDRESS SPECIFIED IN §18.6. THE ISSUER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.

18.9 Consent to Jurisdiction . The Issuer irrevocably and unconditionally submits for itself and its property in any legal action or proceeding relating to this Purchase Agreement and the other Purchase Documents to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the exclusive general jurisdiction of the courts of the State of New York, the courts of the United States of America for the Southern District of New York in the Borough of Manhattan and appellate courts from any thereof. To the fullest extent it may effectively do so under applicable law, the Issuer irrevocably waives and agrees not to assert, by way of motion, as a defense or otherwise, any claim that it is not subject to the jurisdiction of any such court, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

18.10 Headings . The captions in this Purchase Agreement are for convenience of reference only and shall not define or limit the provisions hereof.

18.11 Counterparts . This Purchase Agreement and any amendment hereof may be executed in several counterparts and by each party on a separate counterpart, each of which when executed and delivered shall be an original, and all of which together shall constitute one instrument. In proving this Purchase Agreement it shall not be necessary to produce or account for more than one such counterpart signed by the party against whom enforcement is sought. Delivery by facsimile by any of the parties hereto of an executed counterpart hereof or of any amendment or waiver hereto shall be as effective as an original executed counterpart hereof or of such amendment or waiver and shall be considered a representation that an original executed counterpart hereof or such amendment or waiver, as the case may be, will be delivered.

18.12 Entire Agreement, Etc . The Purchase Documents and any other documents executed in connection herewith or therewith express the entire understanding of the parties with respect to the transactions contemplated hereby. Neither this Purchase Agreement nor any term hereof may be changed, waived, discharged or terminated, except as provided in §18.14.

18.13 WAIVER OF JURY TRIAL . EACH PARTY HERETO HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS PURCHASE AGREEMENT, THE NOTES OR ANY OF THE OTHER PURCHASE DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF THE PURCHASER RELATING TO THE NOTES OR ENFORCEMENT OF THE NOTES AND AGREES THAT IT WILL NOT SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. Except as prohibited by law, the Issuer hereby waives any right it may have to claim or recover in any litigation referred to in the preceding sentence any special, exemplary, punitive or consequential damages or any damages other than, or in addition to, actual damages. The Issuer (a) certifies that no representative, agent or attorney of the Purchaser has represented, expressly or otherwise, that the Purchaser would not, in the event of litigation, seek to enforce the foregoing waivers and (b) acknowledges that the Purchaser has been induced to enter into this Purchase Agreement, the other Purchase Documents to which it is a party by, among other things, the waivers and certifications contained herein.

18.14 Consents, Amendments, Waivers, Etc . No amendment, alteration, modification or waiver of any term or provision of this Purchase Agreement, the Notes, or any other Subordinated Debt, nor consent to any departure by the Issuer therefrom, shall in any event be effective unless the same shall be in writing and signed by the Requisite Holders, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided , that no such amendment, alteration, modification or waiver shall be effective to reduce, or to postpone the date fixed for the payment, of the principal (including any Mandatory Redemption), interest, or premium, if any, payable on any Note or any fees or other amounts payable hereunder, or to alter or amend any provisions relating to Mandatory Redemptions or repurchases, or to alter or amend the consent mechanism provided for under this §18.14 without the consent of each Purchaser holding Notes then outstanding, provided , further , that a Purchaser may consent to an amendment, alteration, modification or waiver with respect to any of the matters referenced in the first proviso to this §18.14 solely with respect to the Notes held by such Purchaser and may elect to have such provisions be binding on such Purchaser, regardless of the consent of any other Purchaser. Any waiver or consent may be given subject to satisfaction of conditions stated therein. Written notice of any waiver or consent affected under this subsection shall be promptly delivered by the Issuer to any Purchaser that did not execute the same. Notwithstanding the foregoing, no amendment, alteration, modification or waiver of this §18.14, §20, §21 or any of the provisions relating to Permitted Refinancing Indebtedness, or in each case any of the related definitions shall be effective unless the parties hereunder have obtained the prior written consent of the OpCo Required Lenders.

18.15 Severability . The provisions of this Purchase Agreement are severable and if any one clause or provision hereof shall be held invalid or unenforceable in whole or in part in any jurisdiction, then such invalidity or unenforceability shall affect only such clause or provision, or part thereof, in such jurisdiction, and shall not in any manner affect such clause or provision in any other jurisdiction, or any other clause or provision of this Purchase Agreement in any jurisdiction.

18.16 USA PATRIOT Act Notice . The Purchaser that is subject to the Act (as hereinafter defined) hereby notifies the Issuer that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “ Act ”), it is required to obtain, verify and record information that identifies the Issuer, which information includes the name and address of the Issuer and other information that will allow the Purchaser to identify the Issuer in accordance with the Act.

18.17 No Advisory or Fiduciary Responsibility . In connection with all aspects of each transaction contemplated hereby, the Issuer acknowledges and agrees, and acknowledges its respective Affiliates’ understanding, that: (i) the purchase of the Notes as provided herein and any related arranging or other services in connection herewith (including in connection with any amendment, waiver or other modification hereof or of any other Purchase Document) are an arm’s-length commercial transaction between the Issuer and its Affiliates, on the one hand, and the Purchaser and its Affiliates, on the other hand, and the Issuer is capable of evaluating and understanding and understands and accepts the terms, risks and conditions of the transactions contemplated hereby and by the other Purchase Documents (including any amendment, waiver or other modification hereof or thereof); (ii) in connection with the process leading to such transaction, the Purchaser is and has been acting solely as a principal and is not the financial advisor, agent or fiduciary, for the Issuer or any of its respective Affiliates, stockholders, creditors or employees or any other Person; (iii) the Purchaser has not assumed and will not assume an advisory, agency or fiduciary responsibility in favor of the Issuer with respect to any of the transactions contemplated hereby or the process leading thereto, including with respect to any amendment, waiver or other modification hereof or of any other Purchase Document (irrespective of whether the Purchaser has advised or is currently advising the Issuer or any of its Affiliates on other matters) and the Purchaser has no obligation to the Issuer or any of its Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Purchase Documents; (iv) the Purchaser and its Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Issuer and its Affiliates, and the Purchaser has no obligation to disclose any of such interests by virtue of any advisory, agency or fiduciary relationship; and (v) the Purchaser has not provided and will not provide any legal, accounting, regulatory or tax advice with respect to any of the transactions contemplated hereby (including any amendment, waiver or other modification hereof or of any other Purchase Document) and the Issuer has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate. The Issuer hereby waives and releases, to the fullest extent permitted by law, any claims that it may have against the Purchaser with respect to any breach or alleged breach of agency or fiduciary duty.

19. FCC APPROVAL .

Notwithstanding anything to the contrary contained in this Purchase Agreement or in the other Purchase Documents, the Purchaser will not take any action pursuant to this Purchase Agreement or any of the other Purchase Documents, which would constitute or result in a change in control of the Issuer or any of its Subsidiaries requiring the prior approval of the FCC without first obtaining such prior approval of the FCC. After the occurrence of an Event of Default, the Issuer shall take or cause to be taken any action which the Purchaser may reasonably request in order to obtain from the FCC such approval as may be necessary to enable the Purchaser to exercise and enjoy the full rights and benefits granted to the Purchaser, for the benefit of the Purchaser by this Purchase Agreement or any of the other Purchase Documents, including, at the Issuer’s cost and expense, the use of the Issuer’s best efforts to assist in obtaining such approval for any action or transaction contemplated by this Purchase Agreement or any of the other Purchase Documents for which such approval is required by law, including specifically, without limitation, upon request, to prepare, sign and file with the FCC the assignor’s or transferor’s portion of any application or applications for the consent to the assignment or transfer of control necessary or appropriate under the FCC’s rules and approval of any of the transactions contemplated by this Purchase Agreement or any of the other Purchase Documents.

20. SUBORDINATION .

20.1 Subordination; Certain Payments Restricted .

20.1.1 Agreement to Subordinate .

(a) Subordination . The Issuer agrees, for itself and its respective successors and assigns, and the Purchaser agrees, and each transferee of any Note, by its acquisition and acceptance of any Note shall be deemed to have agreed, that the payment of the Obligations (including any fees payable in connection with this Purchase Agreement or the Purchase Documents or the Notes) is hereby subordinated in right of payment as provided herein to the prior Discharge of the Senior Debt Obligations, and that the subordination effected by this §20 is for the benefit of and enforceable by the holders of Senior Debt Obligations. Notwithstanding any other provision of this Purchase Agreement to the contrary (including §3), prior to the Discharge of the Senior Debt Obligations, Issuer will not, and will not permit Emmis OpCo or any of its Subsidiaries (together, the “Purchase Obligors” and together with the OpCo Obligors, the “Obligors”) to (1) make any payment or distribution of any kind or character on, or in respect of any Obligations (including in respect of any fees payable in connection with this Purchase Agreement or the Purchase Documents or the Notes), (2) acquire any Obligations or interest or rights in any Obligations (or any of the fees payable in connection with this Purchase Agreement or the Purchase Documents or the Notes) for cash or assets or otherwise, (3) cancel or discharge any Obligations (or any fees payable in connection with this Purchase Agreement or the Purchase Documents or the Notes) that result in any cash payments of any type to holders of indebtedness incurred under this Purchase Agreement, (4) permit the terms of any of its Obligations (or any of the fees payable in connection with this Purchase Agreement or the Purchase Documents or the Notes) to be modified in any way that could have an adverse effect on the rights or interests of any holders of the Senior Debt Obligations or make this Purchase Agreement

more restrictive in any respect than the OpCo Credit Agreement (as in effect as of the date hereof), (5) permit or require any voluntary or optional repayment, prepayment, redemption or repurchase of the Obligations (including of any fees payable in connection with this Purchase Agreement or the Purchase Documents or the Notes), and in each case the Purchaser shall not receive or accept any of the foregoing (by set off or otherwise), without the prior written consent of the OpCo Administrative Agent on behalf of the OpCo Lenders. Each holder of Senior Debt Obligations, whether such Senior Debt Obligations are now outstanding or hereafter created, incurred, assumed or guaranteed, shall be deemed to hold and have acquired Senior Debt Obligations and permitted the incurrence of the Obligations hereunder in reliance upon this §20 and the provisions contained in this Purchase Agreement. In consideration for the subordination provision set forth in this § 20, the Consenting OpCo Lenders have provided to the Purchaser the purchase option set forth in §1 of the Fourth Amendment to the OpCo Credit Agreement and §21 hereof (the “ Purchase Option ”) and the Purchaser has agreed to the provisions of this §20 in reliance upon the Purchase Option. Notwithstanding anything to the contrary herein, (i) out-of-pocket costs and expenses (including fees and expenses of counsel) in an aggregate amount of up to $250,000 incurred by the Purchaser in connection with this Purchase Agreement may be paid in cash by the Issuer to the Purchaser and (ii) except during the Standstill Period in addition to the out-of-pocket expenses in clause (i), the Issuer may reimburse the Purchaser in cash for its out of pocket costs and expenses (including fees and expenses of counsel) in an aggregate amount of up to $75,000 incurred in connection with this Purchase Agreement, including any amendment, modification or waiver hereof.

(b) Liquidation; Dissolution; Bankruptcy . In the event of any Proceeding involving an Obligor, the OpCo Lenders are entitled to receive Payment in Full of all monetary obligations due under any Senior Debt Obligations prior to any Payment or Distribution to the Purchaser on account of the Notes.

20.1.2 Third Party Beneficiary . Each of the OpCo Lenders and the OpCo Administrative Agent is an express third party beneficiary of §18.14, this §20, and any provisions relating to Permitted Refinancing Indebtedness, and in each case the related definitions and shall be entitled to enforce the terms hereof against the parties hereto as if the OpCo Lenders or OpCo Administrative Agent were a party hereto. For the avoidance of doubt, OpCo Required Lenders shall, at their option, be entitled to enforce the terms hereof directly and shall not be required to act through the OpCo Administrative Agent. Each of the OpCo Lenders, the OpCo Administrative Agent and OpCo Required Lenders may demand specific performance of the terms hereof and each of the parties hereto hereby irrevocably waives any defense based on the adequacy of a remedy at law and any other defense that might be asserted to bar the remedy of specific performance in any action which may be brought by the OpCo Lenders, OpCo Administrative Agent or OpCo Required Lenders.

20.2 Enforcement; Standstill Period .

20.2.1 Enforcement . This Article 20, together with the Purchase Option, defines the relative rights of the Purchaser and the holders of Senior Debt Obligations. Nothing contained herein shall:

(a) impair the obligations of the Issuer to the Purchaser to pay any Obligations as and when such Obligations shall become due and payable in accordance with its terms or, except as otherwise provided in this §20, affect the rights of the Purchaser with respect to the Issuer (it being understood that notwithstanding any provision in this §20, the failure of the Issuer to pay principal, interest and other amounts due on the Final Maturity Date in full in cash shall constitute an Event of Default hereunder);

(b) affect the relative rights of the Purchaser with respect to creditors of the Issuer other than the Purchaser’s rights in relation to holders of Senior Debt Obligations; or

(c) prevent the Purchaser from exercising all remedies otherwise permitted by applicable law upon the happening of a Default or an Event of Default, subject to the rights of holders of Senior Debt Obligations to receive distributions and payments otherwise payable to the Purchaser.

20.2.2 Standstill Period for Notes . (a) During any Standstill Period, the Purchaser shall not:

(i) take any action to accelerate the scheduled maturity of the Notes;

(ii) collect amounts pursuant to the Notes (or any part thereof), and Obligations in respect thereof, or any fees in connection with this Purchase Agreement or the Purchase Documents or the Notes;

(iii) enforce any right of repayment under any of the Notes; or

(iv) initiate (or join in) any judicial action with respect to the Notes or the Obligations, including initiating (or joining in) a filing of a petition for relief under the Bankruptcy Code,

except, in each case, that the Purchaser may make any filing that may be required to toll the running of any applicable statute of limitations (which filing is not made any earlier than 30 days prior to the expiration of such statute of limitations or such earlier date as any such filing is required to be made) and to file proofs of claims for the full accelerated amount of the Obligations.

(b) As used in this §20.2.2, the term “ Standstill Period ” means (x) any time after the occurrence of a Payment Default, or (y) the period beginning on the occurrence of any OpCo Event of Default (other than a Payment Default), and in each case ending on the earliest to occur of (i) the date on which such OpCo Event of Default shall no longer be continuing or shall have been otherwise cured or waived, (ii) the date that is 270 days following the date that the OpCo Administrative Agent or the OpCo Required Lenders shall have given notice that any OpCo Event of Default shall have occurred and be continuing so long as on such date, no Payment Default has occurred and is continuing, (iii) the acceleration of any of the Senior Debt Obligations, (iv) the date on which any Senior Debt Obligations have become due and payable at final maturity in accordance with its terms, if the OpCo Administrative Agent or the OpCo Required Lenders take any of the actions set forth in clause (v) or an event set forth in clause (v) occurs, (v) the commencement of any action to foreclose upon any portion of the collateral securing payment of Senior Debt Obligations or any case, proceeding or other judicial action by any holder of Senior Debt Obligations against any OpCo Obligor and (vi) a filing by Emmis OpCo for relief under, or the commencement of any other action or proceeding under, the federal Bankruptcy Code or any other existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, reorganization, insolvency, conservatorship or relief of debtors.

(c) Notwithstanding anything contained herein to the contrary, if following the acceleration of the Senior Debt Obligations by the holders thereof, such acceleration is rescinded (whether or not any existing OpCo Event of Default has been cured or waived), then all enforcement actions taken by the Purchaser shall likewise be rescinded if such enforcement action is based solely on clause (b) of this §20.2.2.

(d) Notwithstanding anything contained herein to the contrary, neither the acceleration of the Notes, nor the timing thereof, pursuant to §20.2.2 shall in any way impact the relative senior priority position of the holders of Senior Debt Obligations.

The Issuer shall promptly provide a copy to the Purchaser of any notice of any “Event of Default” (as defined in the OpCo Credit Agreement) under the OpCo Credit Agreement delivered to the OpCo Administrative Agent. The Issuer agrees to use best efforts to notify the Purchaser of any such Payment Default or “Event of Default” (as defined in the OpCo Credit Agreement) under the OpCo Credit Agreement that shall have occurred and be continuing.

20.3 Payments Held In Trust . If any payment or distribution of any kind or character is made to the Purchaser on account of the Obligations at a time when such payment or distribution is prohibited by this §20 (including, without limitation, a payment or other distribution of the nature described in the last sentence of this paragraph) before the Discharge of the Senior Debt Obligations, whether such payment or distribution is made as a result of the taking of any enforcement action by the Purchaser or otherwise, the Purchaser will hold such payment or distribution in trust in a segregated account for the benefit of the OpCo Lenders. The Purchaser shall promptly, and in no event later than two (2) Business Days, pay such payment or distribution over to the OpCo Administrative Agent on behalf of the OpCo Lenders in the same form of payment received by the Purchaser with appropriate endorsements, for application to the Senior Debt Obligations.

The Issuer hereby acknowledges that the provisions of this §20 require the Purchaser to pay over to the OpCo Required Lenders or the OpCo Administrative Agent on behalf of the OpCo Lenders any payments received by the Purchaser in contravention of this §20, and hereby irrevocably authorizes such payment to the OpCo Required Lenders or the OpCo Administrative Agent on behalf of such OpCo Lenders, notwithstanding any instructions to the contrary that the Issuer may deliver to the Purchaser after the date hereof. The Issuer hereby acknowledges that no such payment shall reduce the amount or otherwise alter the obligations under the Purchase Documents.

20.4 Bankruptcy, etc .

20.4.1 Payments Relating to Obligations .

(a) (i) Upon any Payment or Distribution of any kind or character, whether in cash, property or securities, to creditors upon any total or partial liquidation, dissolution, winding-up, reorganization, assignment for the benefit of creditors or marshaling of assets of any Obligor or in a bankruptcy, reorganization, insolvency, receivership, custodianship, any appointment of a custodian, receiver, trustee or other officer with similar powers, or other similar proceeding relating to any Obligor or its property, in each case whether voluntary or involuntary (any such proceeding, a “ Proceeding ”), all Senior Debt Obligations shall first be Paid in Full before any Payment or Distribution of any kind or character, whether in cash, securities or other property, is made on account of any Obligations.

(ii) In the event of any Proceeding that is continuing, any Payment or Distribution of any kind or character of any OpCo Obligor, whether in cash, property or securities, to which the Purchaser would be entitled except for the provisions hereof, shall be paid by such OpCo Obligor or by any receiver, trustee in bankruptcy, liquidating trustee, agent or other Person making such Payment or Distribution, or by the Purchaser if received by the Purchaser, to the OpCo Administrative Agent on behalf of the OpCo Lenders, for application to the payment of Senior Debt Obligations remaining unpaid until all such Senior Debt Obligations have been Paid in Full after giving effect to any concurrent Payment or Distribution to or for the OpCo Lenders.

(iii) The Purchaser agrees not to initiate, prosecute or participate in any claim, action or other proceeding challenging the enforceability, validity, perfection or priority of the Senior Debt Obligations or any liens and security interests securing or purporting to secure the Senior Debt Obligations or seek to block current payment of any Senior Debt Obligations.

(iv) The Purchaser shall not take any action which would have directly or indirectly any of the following effects: (A) extension of the final maturity of and/or forgiveness, reduction or cram-down of the Senior Debt Obligations or deferral of any required payment in respect of the Senior Debt Obligations, (B) challenging in any respect treatment of the Senior Debt Obligations as a first priority perfected fully secured claim, lien or security interest or (C) blocking current payment of any Senior Debt Obligations. The holders of the Senior Debt Obligations shall have no duty to the Purchaser with respect to any collateral securing the indebtedness arising under the OpCo Credit Documents, and the holders of Senior Debt Obligations shall have no duty to marshal assets, including any collateral securing the indebtedness arising under the OpCo Credit Documents. Notwithstanding anything to the contrary herein, this §20.4.1(a)(iv) shall not apply to the Purchaser in its capacity as an OpCo Lender, to the extent that the Purchaser exercises the Purchase Option in accordance with its terms.

(v) For the avoidance of doubt, the Purchaser agrees that the holders of Senior Debt Obligations shall not be deemed or otherwise considered to be, acting as an agent or in any fiduciary capacity on behalf of the Purchaser by virtue of this Purchase Agreement or otherwise.

(vi) Upon any Payment or Distribution referred to in this §20.4.1, the Purchaser shall be entitled to rely upon any order or decree made by any court of competent jurisdiction in which bankruptcy, dissolution, winding-up, liquidation or reorganization proceedings are pending, or upon a certificate of the receiver, trustee in bankruptcy, liquidating trustee, agent or other person making such payment or distribution, delivered to the Purchaser for the purpose of ascertaining the persons entitled to participate in such distribution, the holders of Senior Debt Obligations and other indebtedness of the OpCo Obligors, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this §20.4.1.

(b) The Senior Debt Obligations shall continue to be treated as Senior Debt Obligations and the provisions of this Purchase Agreement shall continue to govern the relative rights and priorities of the holders of the Senior Debt Obligations and the Purchaser even if all or part of the Senior Debt Obligations or the security interests securing the Senior Debt Obligations are subordinated, set aside, avoided, invalidated, declared to be fraudulent or preferential or set aside or is required to be repaid to a trustee, receiver or any other party, under any bankruptcy, insolvency, reorganization or similar act or law, state, federal or foreign law, common law or equitable cause (such payment being hereinafter referred to as a “ Voided Payment ”), and in the event of such Voided Payment:

(i) that portion of the Senior Debt Obligations that had been previously satisfied by such Voided Payment shall be revived and continue in full force and effect as if such Voided Payment had never been made; and

(ii) the provisions of this §20 shall be reinstated and continue in full force and effect until the full amount of such Voided Payment (together with interest thereon) is paid in full in cash.

20.4.2 Voting Rights . The Purchaser shall retain its rights, if any, as a holder of Obligations to vote and (subject to the other provisions hereof) otherwise act in any case or Proceeding relating to the Issuer or any OpCo Obligor with respect to the Obligations (including, without limitation, the right to vote to accept or reject any plan of partial or complete liquidation, reorganization, arrangement, composition or extension), whether at any meeting of creditors or in the event of any such case or Proceeding relating to the Issuer or any OpCo Obligor, so long as and solely to the extent that the Purchaser’s actions are at all times in compliance with the limitations and other terms set out in this §20; and the Purchaser shall not, and shall cause the Purchaser Affiliates not to, directly or indirectly support, vote for or propose any plan of reorganization or disclosure statement of Issuer or any OpCo Obligor if such plan or disclosure statement does not provide for the Payment in Full of the Senior Debt Obligations.

20.5 Legend . Any promissory note issued by the Issuer evidencing the Obligations shall contain the following legend:

THIS INSTRUMENT AND THE OBLIGATIONS EVIDENCED HEREBY ARE AND SHALL AT ALL TIMES BE AND REMAIN SUBORDINATED TO THE EXTENT AND IN THE MANNER SET FORTH IN §20 OF THAT CERTAIN NOTE PURCHASE AGREEMENT, DATED AS OF NOVEMBER 10, 2011, BETWEEN EMMIS COMMUNICATIONS CORPORATION AND [PURCHASER] (THE “ PURCHASE AGREEMENT ”), WHICH AMONG OTHER THINGS, SUBORDINATES THE OBLIGATIONS OF EMMIS COMMUNICATIONS CORPORATION HEREUNDER TO THE OBLIGATIONS TO CERTAIN HOLDERS OF SENIOR DEBT OBLIGATIONS, AS MORE FULLY DESCRIBED IN SAID PURCHASE AGREEMENT.

20.6 Rights of Holder of Senior Debt Obligations . No right of any holder of Senior Debt Obligations to enforce the subordination of the Notes shall be impaired by any act or failure to act by the Issuer or any Purchaser or the OpCo Administrative Agent or by the failure of the Issuer or any Purchaser to comply with this Purchase Agreement.

20.7 Termination of Subordination . The provisions of this §20 shall continue in full force and effect, and the obligations and agreements of the Purchaser and the Issuer hereunder shall continue to be fully operative, until the Discharge of the Senior Debt Obligations, irrespective of any amendment, amendment and restatement, modification, supplement, waiver, restructuring, renewal, replacement, extension, or refinancing (including as Permitted Refinancing Indebtedness) of the OpCo Credit Agreement.

20.8 Participations or Interests . The Purchaser shall not and shall procure that its Purchaser Affiliates do not, and shall not induce any of its Public Affiliates to, acquire, purchase, hold, maintain, accept any assignments of or participations in, or any other interest in, or rights (including any rights to direct voting) in respect of, any Senior Debt Obligations or any other indebtedness of Emmis OpCo or any of its Subsidiaries to the extent such acquisition, purchase, possession, maintenance, acceptance or assignment of or participation in such interest or rights (including any rights to direct voting) would, in the aggregate, equal one-third or more of the indebtedness eligible to vote under the Senior Debt Obligations or such other indebtedness of Emmis OpCo or any of its Subsidiaries and the Purchaser shall procure that the Purchaser and the Purchaser Affiliates collectively shall only acquire and hold any such Indebtedness using one entity. Notwithstanding anything herein to the contrary, this §20.8 shall not apply to the Purchaser’s right to exercise the Purchase Option in accordance with the terms thereof. In the event the Purchaser exercises the Purchase Option, this §20.8 shall be voided and shall no longer be enforceable.

21. Purchase Right .

(a) By accepting the benefits of §20 of this Purchase Agreement, each Consenting OpCo Lender on behalf of itself and its direct and indirect successors and assigns hereby irrevocably grants to the Purchaser the Purchase Option set forth in this §21.

(b) The Purchaser shall have the right (but not the obligation) to purchase by way of assignment (and shall thereby also assume all funding commitments and obligations of the Consenting OpCo Lenders under the OpCo Loan Documents), at any time during the Exercise Period (as hereinafter defined), all, but not less than all, of the Designated OpCo Obligations, including, without limitation, all principal of all Designated OpCo Obligations outstanding at the time of purchase and all accrued and unpaid interest, fees and expenses in respect of all Designated OpCo Obligations outstanding at the time of purchase, and as more particularly set forth in paragraph (e) below; provided , however , that the Acquiring Purchasers (as hereinafter defined) shall not be required to purchase any Designated OpCo Obligations belonging to any Defaulting Creditor, as set forth in paragraph (g) below. Such election shall occur by delivery of a notice (a “ Purchase Option Notice ”) during the Exercise Period, which Purchase Option Notice shall be addressed to each Consenting OpCo Lender at the notice address most recently provided by such Consenting OpCo Lender to the Purchaser in writing (or if no such notice address has been provided, to the OpCo Administrative Agent on behalf of such Consenting OpCo Lender), shall be signed by every Purchaser offering to make such purchase (each an “ Acquiring Purchaser ”, and collectively, the “ Acquiring Purchasers ”) and (i) indicate the percentage of the Designated OpCo Obligations to be purchased by each Acquiring Purchaser (which must equal 100 percent (100%) when added to the percentage of Designated OpCo Obligations owned by the Consenting OpCo Lenders to be purchased by all other Acquiring Purchasers) and (ii) state that (A) it is a Purchase Option Notice delivered pursuant to this §21 of this Purchase Agreement, (B) the Acquiring Purchasers are irrevocably offering to purchase all of the Designated OpCo Obligations at the Purchase Option Price in accordance with this §21, and (C) the date on which such purchase shall occur (the “ Purchase Option Date ”), which date shall not be less than five (5) Business Days, nor more than ten (10) Business Days, after the receipt by each Consenting OpCo Lender of the Purchase Option Notice (the period between delivery of the Purchase Option Notice and the proposed Purchase Option Date, being the “ Purchase Option Period ”). The Purchase Option will be allocated among the Acquiring Purchasers in the proportion they mutually agree upon, or, in the absence of agreement, in the ratio that each of the Acquiring Purchaser’s percentage share of the Obligations bears to the aggregate percentage shares of the Obligations held by all Acquiring Purchasers.

(c) During the Purchase Option Period, no Consenting OpCo Lender shall direct the OpCo Administrative Agent to, and the Consenting OpCo Lenders shall request that the OpCo Administrative Agent not, complete any enforcement action against any Collateral (as defined in the OpCo Credit Agreement) (other than the exercise of control or a right of setoff over, or to sweep funds held in, any OpCo Obligor’s deposit or securities accounts), unless the Consenting Opco Lenders reasonably determine, in their sole discretion, that the failure to direct the completion of such proceeding or enforcement action would be materially prejudicial to the OpCo Lenders.

(d) Subject to paragraph (f) below, the right to purchase the Designated OpCo Obligations as described in this §21 may be exercised by giving the Purchase Option Notice at any time during the period (the “ Exercise Period ”) commencing on the occurrence of a Purchase Option Event and ending on the forty-fifth (45th) day thereafter or, if earlier, the date that the occurrence giving rise to the Purchase Option Event is waived, cured or otherwise ceases to exist.

(e) Any purchase pursuant to this §21 shall be made on the following terms and conditions:

(i) The Purchase Option Price payable to each Consenting OpCo Lender shall be equal to the sum of (A) 100% of the Designated OpCo Obligations (including, without limitation, all accrued and unpaid interest thereon through the date of purchase, including interest at the default rate, if applicable, and any applicable acceleration prepayment penalties or premiums, in each case, irrespective of whether a Proceeding has been commenced by or against any OpCo Obligor, and such amounts are allowed in such Proceeding) beneficially owned by such Consenting OpCo Lender through the date of purchase plus (B) any Exit Fee (as defined in that certain backstop letter dated March 27, 2011 among the OpCo Obligors party thereto, and Canyon Capital Advisors LCC) that would be payable to a Consenting OpCo Lender upon the redemption or other repayment (including, without limitation, as a result of an acceleration upon any Event of Default, including the commencement of a Proceeding by any OpCo Obligor) of any Designated OpCo Obligations, or under any other circumstance, (collectively, the “ Purchase Option Price ”). In addition, unless waived by the OpCo Administrative Agent, on the Purchase Option Date, the Purchaser shall provide cash collateral to the OpCo Administrative Agent to collateralize its reimbursement obligations under §5.1.4 of the OpCo Credit Agreement in an amount equal to 105% of the Purchased Letter of Credit Percentage of the Maximum Drawing Amount (as defined in the OpCo Credit Agreement (as in effect on the date hereof)).

(ii) The Purchase Option Price shall be remitted by wire transfer of immediately available funds to the bank account(s) of each Consenting OpCo Lender, as such Consenting OpCo Lender may designate in writing to the Acquiring Purchaser(s) for such purpose (or if a Consenting OpCo Lender has not designated a bank account to the Purchaser in writing on or prior to the second (2nd) Business Day prior to the expiration of the Purchase Option Period, by wire transfer of immediately available funds to the OpCo Administrative Agent on behalf of such Consenting OpCo Lender). Interest shall be calculated to but excluding the Business Day on which such purchase and sale shall occur if the amounts so paid by the Acquiring Purchasers to the bank account designated by a Consenting OpCo Lender are received in such bank account prior to 1:00 p.m. (Eastern) and interest shall be calculated to and including such Business Day if the amounts so paid by the Acquiring Purchaser(s) to the bank account designated by such Consenting OpCo Lender are received in such bank account later than 1:00 p.m. (Eastern).

(iii) The Purchase Option Price shall be accompanied by a waiver by each Acquiring Purchaser of all claims against each Consenting OpCo Lender arising out of this Purchase Agreement and the transactions contemplated hereby as a result of exercising the Purchase Option contemplated by this §21, other than (A) claims against a Consenting OpCo Lender arising out of a breach of any representation or warranty made by such Consenting OpCo Lender hereunder and (B) claims against a Defaulting Creditor.

(iv) The purchase and sale contemplated hereby shall be made without recourse and without any representation or warranty whatsoever by any Consenting OpCo Lender, whether as to the enforceability of the Designated OpCo Obligations or the validity, enforceability, perfection, priority or sufficiency of any Lien securing, or guarantee or other supporting obligation for, any Designated OpCo Obligations or as to any other matter whatsoever, except the representation and warranty that the transferor owns free and clear of all Liens and encumbrances (other than participation interests not prohibited by the OpCo Credit Agreement, in which case the Purchase Option Price shall be appropriately adjusted so that the Acquiring Purchaser or Acquiring Purchasers do not pay amounts represented by any participation interest which remains in effect), and has the right to convey, whatever claims and interests it may have in respect of the Designated OpCo Obligations.

(v) The purchase and sale shall be made pursuant to and in accordance with §17.1(b) of the OpCo Credit Agreement, including without limitation, the parties duly executing and delivering a completed Assignment and Acceptance Agreement in the form attached as Exhibit H to the OpCo Credit Agreement; it being understood and agreed that each Consenting OpCo Lender shall retain all rights to indemnification as provided in the relevant OpCo Loan Documents for all periods prior to any assignment pursuant to the provisions of this §21.

(f) The Purchase Option shall be exercisable only following a Purchase Option Event, and be legally enforceable as to a Consenting OpCo Lender, upon receipt by each Consenting OpCo Lender or, if a Consenting OpCo Lender has not provided a notice address to the Purchaser in writing, receipt by the OpCo Administrative Agent on behalf of such Consenting OpCo Lender, of a Purchase Option Notice (which notice, once delivered, shall be irrevocable and fully binding on the respective Acquiring Purchaser or Acquiring Purchasers) during the Exercise Period. Neither the OpCo Administrative Agent nor any other Consenting OpCo Lender shall have any disclosure obligation to any Acquiring Purchaser, or any other Purchaser in connection with any exercise of such Purchase Option.

(g) The obligations of the Consenting OpCo Lenders to sell their respective Designated OpCo Obligations under this §21 are several and not joint and several. To the extent any Consenting OpCo Lender (a “ Defaulting Creditor ”) breaches its obligation to sell its Designated OpCo Obligations under this §21, nothing in this §21 shall be deemed to require the OpCo Administrative Agent or any other OpCo Lender to purchase such Defaulting Creditor’s Designated OpCo Obligations for resale to any Purchaser and in all cases, each Consenting OpCo Lender complying with the terms of this §21 shall not be deemed to be in default of this Purchase Agreement or otherwise be deemed liable for any action or inaction of any Defaulting Creditor; provided that the Acquiring Purchasers shall be required to purchase the Designated OpCo Obligations from the non-Defaulting Creditors only if the non-Defaulting Creditors hold, in the aggregate, not less than 50% of the then outstanding OpCo Obligations. Each of the Purchaser(s) may demand specific performance of this §21 and the Consenting OpCo Lenders hereby irrevocably waive any defense based on the adequacy of a remedy at law and any other defense that might be asserted to bar the remedy of specific performance in any action which may be brought by the Purchaser(s) under this §21.

(h) Each OpCo Obligor irrevocably consents to any assignment effected to one or more Acquiring Purchasers pursuant to this §21 for purposes of all OpCo Loan Documents and hereby agrees that no further consent from such OpCo Obligor shall be required.

(i) If the Purchaser(s) (x) does not duly deliver the Purchase Option Notice during an Exercise Period, or (y) fails to consummate the purchase within the Purchase Option Period, the Consenting OpCo Lenders shall have no further obligations pursuant to this §21; provided , however , that nothing shall relieve the Purchaser(s) of its obligation to consummate the purchase, and any Consenting OpCo Lender may demand specific performance of this §21 and the Purchaser(s) hereby irrevocably waives any defense based on the adequacy of a remedy at law and any other defense that might be asserted to bar the remedy of specific performance in any action which may be brought by any Consenting OpCo Lender under this §21. For the avoidance of doubt, the Purchase Option shall terminate forty-five (45) days after the commencement of a Proceeding by any OpCo Obligor, unless the Purchase Option has been duly exercised in accordance with this §21.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

Exhibit M

ANNEX II

Emmis Communication Corporation
One EMMIS Plaza, Suite 700
40 Monument Circle
Indianapolis, Indiana 46204

TOTAL RETURN SWAP TRANSACTION

[Address for Party A]


Date:		, 2011

From:		Emmis Communication Corporation (“ Party B ”)

Attention:

To:		(“ Party A ”)

Re:		Total Return Swap Transaction

Dear Sir or Madam:

The purpose of this letter agreement (this “ Confirmation ”) is to confirm the terms and conditions of the Transaction entered into between us on the Trade Date specified below (the “ Transaction ”). This Confirmation constitutes a “Confirmation” as referred to in the ISDA Master Agreement specified below.

The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the “ Equity Definitions ”), as published by the International Swaps and Derivatives Association, Inc., are incorporated into this Confirmation. In the event of any inconsistency between the Equity Definitions and this Confirmation, this Confirmation will govern.

1. This Confirmation evidences a complete binding agreement between you and us as to the terms of the Transaction to which this Confirmation relates. This Confirmation shall supplement, form a part of, and be subject to an agreement in the form of the ISDA 2002 Master Agreement, as published by the International Swaps and Derivatives Association, Inc. in 2002 (the “ ISDA Form ”), as if we had executed an agreement in such form on the Trade Date of this Transaction between us (but without any Schedule except for (a) the election of the laws of the State of New York as the governing law and United States Dollars as the Termination Currency, (b) the amendment of Section 13(b)(i)(2) to read “(2) if this Agreement is expressed to be governed by the laws of the State of New York, to the jurisdiction of the courts of the State of Indiana sitting in Marion County, Indiana, the court of the United States of America for the Southern District of Indiana and appellate courts having jurisdiction of appeals from any of the foregoing;”, (c) the replacement of “; and” in Section 13(b)(ii) with “.” and the deletion of Section 13(b)(iii), and (d) the agreement that notwithstanding Sections 5 and 6, if at any time and so long as a party to this Agreement (“ X ”) shall have satisfied in full all its payment and delivery obligations under Section 2(a)(i) and shall at the time have no future payment or delivery obligations, whether absolute or contingent, under such Section, then unless the other party (“ Y ”) is required pursuant to appropriate proceedings to return to X or otherwise returns to X upon demand of X any portion of any such payment or delivery, (i) the occurrence of an event described in Section 5(a) with respect to X or any Credit Support Provider or Specified Entity of X shall not constitute an Event of Default or Potential Event of Default with respect to X and (ii) Y shall be entitled to designate an Early Termination Date pursuant to Section 6 only as a result of the occurrence of a Termination Event set forth in Section 5(b)(i) or 5(b)(ii) with respect to X as the Affected Party only). In the event of any inconsistency between the provisions of the ISDA Form and this Confirmation, this Confirmation will prevail for the purpose of this Transaction.

2. The terms of the particular Transaction to which this Confirmation relates are as follows:


General Terms:

	Trade Date:	[ ], 2011

	Effective Date:	[ ], 2011

	Scheduled Termination Date:	[ ], 2016

	Termination Date:	The earlier to occur of: (i) the Optional Early Termination Date; (ii) the Event Termination Date; and (iii) the Scheduled Termination Date.

Shares:		6.25% Series A Cumulative Convertible Preferred Stock of Emmis Communication Corporation (the “Issuer”)


	Exchange:	NASDAQ

	Related Exchange(s):	All Exchanges

	Clearance System:	DTC

Equity Amounts payable by Party A

	Equity Amount Payer:	Party A

	Equity Amount Receiver:	Party B

	Number of Shares:	[ ]

	Equity Notional Amount:	$[total consideration]

	Initial Price:	$[price per share]

	Type of Return:	Total Return

Initial Exchange Amount payable by Party B:

	Initial Exchange Amount:	Equity Notional Amount

	Initial Exchange Date:	Effective Date

Settlement Terms:

	Physical Settlement:	Applicable; provided that the Equity Amount Receiver shall have no obligation to make any payment (including, without limitation, payment of the Equity Notional Amount) on the Settlement Date; provided further that Physical Settlement shall be deemed satisfied upon the Termination Date provided Party A has delivered the Number of Shares to Party B on the Effective Date pursuant to Section 6(a) below.

	Settlement Date:	The Termination Date.

	Settlement Currency:	Not Applicable

	Settlement Method Election:	Not Applicable


Dividends:

	Dividend Payments:	On each Dividend Payment Date, the Equity Amount Payer will pay the Equity Amount Receiver the Dividend Amount in respect of the relevant Dividend Period, unless the Equity Amount Receiver shall have otherwise received the Dividend Amount directly from the Issuer. The obligation to make Dividend Payments shall survive any termination of this Transaction.

	Dividend Period:	Each period from, but excluding one Dividend Payment Date to, and including, the next Dividend Payment Date, except that (i) the initial Dividend Period will commence on, but exclude, the Trade Date and (ii) the final Dividend Period will end on, and include, the Settlement Date.

	Dividend Amount:	Record Amount

	Dividend Payment Date:	The date, if any, that the Issuer of the Shares pays the related dividend to holders of record of such Shares as determined by the Calculation Agent.

	Re-investment of Dividends:	Not Applicable

Adjustments:

	Method of Adjustment:	Calculation Agent Adjustment


Extraordinary Events:

Consequences of Merger Events:

Share-for-Share:		As provided below

Share-for-Other:		As provided below

Share-for-Combined:		As provided below

Determining Party:		Party A and Party B

Tender Offer:		Applicable

Consequences of Tender Offers:

Share-for-Share:		As provided below

Share-for-Other:		As provided below

Share-for-Combined:		As provided below

	Determining Party:	Party A and Party B

Composition of Combined Consideration:		Applicable

Nationalization, Insolvency or Delisting:		As provided below

	Determining Party:	Party B

Additional Disruption Events:

	Change in Law:	Applicable

	Failure to Deliver:	Not Applicable

	Determining Party:	Party A and Party B

Consequences of Extraordinary Events and Additional Disruption Events:

Upon the occurrence of an Extraordinary Event or an Additional Disruption Event, and notwithstanding anything in the Equity Definitions to the contrary, each of Party A and Party B shall have the right to deliver a notice to the other party of the occurrence of such Extraordinary Event or Additional Disruption Event, which notice shall also specify a date that is not more than 2 Scheduled Trading Days and not less than 5 Scheduled Trading Days after the date on which such notice is delivered, which date, notwithstanding anything to the contrary herein, will be the Termination Date for the Transaction (the “Event Termination Date”).


Non-Reliance:		Applicable

Agreements and Acknowledgments

Regarding Hedging Activities:		Not Applicable

Additional Acknowledgments:		Applicable

3. Optional Early Termination.

(a)

Right to Terminate Early

Notwithstanding any other termination provision contained in this Confirmation or the ISDA Form, Party B may give irrevocable notice (an “ Optional Early Termination Notice ”) (which may be delivered in writing or orally by telephone) no later than the Scheduled Closing Time on any Notice Date (as defined below) of an early termination of the Transaction (an “ Optional Early Termination ”). If an Optional Early Termination Notice is given after the Scheduled Closing Time on any Scheduled Trading Day, then that Optional Early Termination Notice will be deemed delivered on the next following Scheduled Trading Day. Party B will execute and deliver a written confirmation confirming the substance of any telephonic notice in respect of an Optional Early Termination Notice within one Scheduled Trading Day of that notice. Failure to provide that written confirmation will not affect the validity of the telephonic notice.

Party B shall state in any Optional Early Termination Notice the date on which any such Optional Early Termination is to be effected (the “ Optional Early Termination Date ”) (I) which must be at least one (1) Scheduled Trading Day after the Notice Date (or such other time as the parties may agree from time to time in respect of a particular Optional Early Termination which may provide less notice), and (II) shall be no later than the Scheduled Trading Day preceding the Scheduled Termination Date.

(b)

Consequences of an Optional Early Termination

In consideration of the termination of the Transaction, Party A shall deliver to Party B a number of Shares equal to the Number of Shares on the Settlement Date; provided that such delivery shall be deemed satisfied upon delivery of the Number of Shares to Party B on the Effective Date in accordance with Section 6(a) below. Upon the Termination Date, the Transaction shall be terminated and neither party shall have any further obligation to the other party in respect thereof.

“ Notice Date ” means, a Scheduled Trading Day from, and including, the Effective Date to, and including, the second (2nd) Scheduled Trading Day preceding the Scheduled Termination Date (or such other time as the parties may agree from time to time in respect of an Optional Early Termination).

4. Calculation Agent.

Party A and Party B.

5. Ownership of Shares.

Notwithstanding anything contained in Section 6 herein, Party A shall remain the beneficial owner of, and maintain control (subject to the Transaction Documents) over the Shares in an amount equal to the Number of Shares during the term of the Transaction and, except as otherwise provided herein, may not sell any of the Number of Shares or enter into any other transactions relating to any of the Number of Shares at any time during the term of the Transaction.

6. Security Interest.

(a)

Security Interest

Party A hereby pledges to Party B, as security for all present and future obligations of Party A under this Transaction, and grants to Party B a first priority continuing security interest in, lien on and right of set-off against a number of Shares equal to the Number of Shares. Party B will hold such Shares and shall act in a fiduciary capacity on behalf of Party A, who shall remain a beneficial owner of the Shares until the Termination Date.

(b)

Further Assurances

Promptly following a demand made by Party B, Party A will execute, deliver, file and record any financing statement, specific assignment or other document and take any other action that may be necessary or desirable and reasonably requested by Party B to create, preserve, perfect or validate any security interest or lien granted under this Section 6, to enable Party B to exercise or enforce its rights under this Confirmation with respect to the Number of Shares.

7. [Reserved] .

8. Additional Representations of Party A.

Party A represents and warrants to the Party B that:

(a)

as of the Effective Date, its jurisdiction of organization, mailing address and the location of its place of business (if it has only one) or its chief executive office (if it has more than one place of business) are as set forth in Schedule 1 attached hereto;

(b)

the name in which it has executed this Confirmation is the exact name as it appeared in its organizational documents, as amended, as filed with its jurisdiction of organization on the date of such execution; and

(c)

it is the sole owner of or otherwise has the right to pledge the Shares to Party B hereunder, free and clear of any security interest, lien, encumbrance or other restrictions other than the security interest and lien in favor of Party B granted hereunder.

9. Account Details:


Account for payments to Party A:		[ ]

Account for delivery of Shares to Party B:		Account Information to be provided by Party B prior to the Effective Date.

10. Offices:

(a) The Office of Party A for the Transaction is [ ]; and

(b) The Office of Party B for the Transaction is Indiana.

[ Signatures follow on separate page ]

Please confirm that the foregoing correctly sets forth the terms of our agreement by executing the copy of this Confirmation enclosed for that purpose and returning it to us or by sending to us a letter or telex substantially similar to this letter, which letter or telex sets forth the material terms of the Transaction to which this Confirmation relates and indicates your agreement to those terms.


	Yours Sincerely, EMMIS COMMUNICATIONS CORPORATION
	By:
		Name:
		Title:

Confirmed as of the date first above written:

[Party A]


By:

		Name:
		Title:

Schedule 1

JURISDICTION OF ORGANIZATION, MAILING ADDRESS AND LOCATION OF PLACE OF BUSINESS OF PARTY A

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Jeffrey H. Smulyan, certify that:

I have reviewed this quarterly report on Form 10-Q of Emmis Communications Corporation;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: January 12, 2012



	/s/ JEFFREY H. SMULYAN
	Jeffrey H. Smulyan
	Chairman of the Board, President and Chief Executive Officer

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Patrick Walsh, certify that:

I have reviewed this quarterly report on Form 10-Q of Emmis Communications Corporation;

The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

(b)

(c)

(d)

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: January 12, 2012



	/s/ PATRICK M. WALSH
	Patrick M. Walsh
	Executive Vice President, Chief Financial Officer and Chief Operating Officer

Exhibit 32.1

SECTION 1350 CERTIFICATION

The undersigned hereby certifies, in accordance with 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in his capacity as an officer of Emmis Communications Corporation (the “Company”), that, to his knowledge:

(1)

the Quarterly Report of the Company on Form 10-Q for the period ended November 30, 2011, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: January 12, 2012


	/s/ JEFFREY H. SMULYAN
	Jeffrey H. Smulyan
	Chairman of the Board, President and Chief Executive Officer

Exhibit 32.2

SECTION 1350 CERTIFICATION

(1)

the Quarterly Report of the Company on Form 10-Q for the period ended November 30, 2011, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: January 12, 2012


	/s/ PATRICK M. WALSH
	Patrick M. Walsh
	Executive Vice President, Chief Financial Officer and Chief Operating Officer