Document:

exv10w34

Exhibit 10.34

EXECUTION COPY

      

SERIES A-2 INCREMENTAL LOAN AGREEMENT*

dated as of

February 8, 2011

between

THE GEO GROUP, INC.,

As Borrower

The Lenders referred to herein

and

BNP Paribas,

as Administrative Agent

 

BNP PARIBAS SECURITIES CORP.,

as Lead Arranger

 

 

			
	*	 	Certain portions of the Series A-2 Incremental Loan Agreement have been omitted based upon a
request for confidential treatment filed with the Securities and Exchange Commission. The
non-public information has been filed with the Securities and Exchange Commission.

 

 

SERIES A-2 INCREMENTAL LOAN AGREEMENT

          SERIES A-2 INCREMENTAL LOAN AGREEMENT dated as of February 8, 2011 between THE GEO GROUP,
INC., (the “Borrower”), the GUARANTORS party hereto (the “Guarantors”), the SERIES
A-2 INCREMENTAL LENDERS party hereto and BNP PARIBAS., as Administrative Agent for the lenders (in
such capacity, together with its successors in such capacity, the “Administrative Agent”).

          The Borrower, the lenders party thereto and BNP Paribas as the Administrative Agent, are
parties to a Credit Agreement dated as of August 4, 2010 (as amended by Amendment No. 1, the
“Credit Agreement”).

          Pursuant to Section 2.01(d) of the Credit Agreement, the Borrower may request that one
or more Persons (which may include the Lenders under the Credit Agreement) offer to enter into
commitments to make “Incremental Loans” under and as defined in said Section 2.01(d),
subject to the conditions specified in said Section 2.01(d). The Borrower accordingly has
requested that Incremental Loans under said Section 2.01(d) be made available to it in an
aggregate principal amount equal to $150,000,000 in a single series of term loans to be designated
the “Series A-2 Incremental Loans”. The Series A-2 Incremental Lenders (as defined below) are
willing to make such loans on the terms and conditions set forth below and in accordance with the
applicable provisions of the Credit Agreement, and accordingly, the parties hereto hereby agree as
follows:

ARTICLE I

DEFINED TERMS

          Terms defined in the Credit Agreement are used herein as defined therein, except to the extent
the same term is defined herein, in which case this Agreement shall control. The following terms
have the meanings specified below:

     “Acquisition” means the acquisition by the Borrower of the Target Company
through its wholly-owned subsidiary GEO Acquisition IV, Inc., pursuant to the Merger
Agreement.

     “Closing Date” means the date when the Acquisition and transactions
contemplated thereby are consummated.

     “Merger Agreement” means the Agreement and Plan of Merger dated as of December
21, 2010 among the Borrower, GEO Acquisition IV, Inc. and Target Company.

 

 

     “Principal Payment Dates” means the Principal Payment Dates for Tranche A Term
Loans as in the effect on the date hereof.

     “Required Series A-2 Incremental Lenders” means, at any time, Series A-2
Incremental Lenders having Series A-2 Incremental Commitments representing at least a
majority of the sum of the total Series A-2 Incremental Commitments at such time.

     “Series A-2 Incremental Commitment” means, with respect to each Series A-2
Incremental Lender, the commitment of such Lender to make Series A-2 Incremental Loans
hereunder. The amount of each Series A-2 Incremental Lender’s Series A-2 Incremental
Commitment is on record with the Administrative Agent. The aggregate original amount of the
Series A-2 Incremental Commitments is $150,000,000.

     “Series A-2 Incremental Lender” means on the date hereof, the Persons listed on
the signature pages hereto under the caption “Series A-2 Incremental Lender”.

     “Series A-2 Incremental Loan Effective Date” means the date on which the
conditions specified in Article IV are satisfied (or waived by the Required Series A-2
Incremental Lenders in accordance with Section 9.02).

     “Series A-2 Incremental Loans” means the Loans made to the Borrower pursuant to
this Agreement which shall constitute a single Series of Incremental Loans under Section
2.01(d) of the Credit Agreement.

     “Target Company” means BII Holding Corporation, a corporation organized under
the laws of the State of Delaware.

ARTICLE II

SERIES A-2 INCREMENTAL LOANS

          Section 2.01. Series A-2 Incremental Commitments. Subject to the terms and
conditions set forth herein and in the Credit Agreement, each Series A-2 Incremental Lender agrees
to make Series A-2 Incremental Loans to the Borrower, in an aggregate principal amount equal to
such Series A-2 Incremental Lender’s Series A-2 Incremental Commitment. Proceeds of Series A-2
Incremental Loans shall be used in accordance with Section 5.08 of the Credit Agreement, to
pay expenses related to the Acquisition, and to repay certain Indebtedness of the Target Company.

          Section 2.02. Termination of Series A-2 Incremental Commitments. Unless previously
terminated, the Series A-2 Incremental Commitments shall terminate after the borrowing of the
Series A-2 Incremental Loans on the Series A-2 Incremental Loan Effective Date.

 

 

          Section 2.03. Repayment of Series A-2 Incremental Loans. The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of the Series A-2
Incremental Lenders the outstanding principal amount of the Series A-2 Incremental Loans on each
Principal Payment Date set forth below in the aggregate principal amount set forth opposite such
Principal Payment Date:

	 	 	 	 	 
	Principal Payment Date	 	Principal Amount
	Each of the Principal Payment Dates falling after the
Amendment No. 1 Effective Date and on or before the
second anniversary of the Amendment No. 1 Effective Date
	 	$	1,875,000	 
	 
	 	 	 	 
	Each of the Principal Payment Dates falling after the
second anniversary of the Amendment No. 1 Effective Date
and on or before the third anniversary of the Amendment
No. 1 Effective Date
	 	$	3,750,000	 
	 
	 	 	 	 
	Each of the Principal Payment Dates falling after the
third anniversary of the Amendment No. 1 Effective Date
and on or before the fourth anniversary of the Amendment
No. 1 Effective Date
	 	$	7,500,000	 
	 
	 	 	 	 
	Each of the Principal Payment Dates falling after the
fourth anniversary of the Amendment No. 1 Effective Date
and on or before the fifth anniversary of the Effective
Date
	 	$	45,000,000	 

To the extent not previously paid, all Series A-2 Incremental Loans shall be due and payable on the
Term Loan Maturity Date with respect to Tranche A Term Loans.

          Section 2.04. Applicable Rate. The “Applicable Rate” means, in the case of
any Type of Series A-2 Incremental Loans, applicable rate per annum set forth below, based upon the
Total Leverage Ratio as of the most recent determination date:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	ABR	 	Eurodollar	 	 
	 	 	 	 	Applicable	 	Applicable	 	Commitment
	Category	 	Total Leverage Ratio	 	Rate	 	Rate	 	Fee Rate
	1	 	>4.25 to 1.00
	 	 	2.00	%	 	 	3.00	%	 	 	0.500	%
	2	 	>3.75 to 1.00
and £4.25 to
1.00
	 	 	1.75	%	 	 	2.75	%	 	 	0.500	%
	3	 	>3.25 to 1.00
and £3.75 to
1.00
	 	 	1.50	%	 	 	2.50	%	 	 	0.500	%

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	ABR	 	Eurodollar	 	 
	 	 	 	 	Applicable	 	Applicable	 	Commitment
	Category	 	Total Leverage Ratio	 	Rate	 	Rate	 	Fee Rate
	4	 	>2.50 to 1.00
and £3.25 to
1.00
	 	 	1.25	%	 	 	2.25	%	 	 	0.500	%
	5	 	<2.50 to 1.00
	 	 	1.00	%	 	 	2.00	%	 	 	0.375	%

          For purposes of the foregoing, (i) the Total Leverage Ratio shall be Category 2 as of the
Series A-2 Incremental Loan Effective Date, and shall thereafter be determined as of the end of
each fiscal quarter of the Borrower (starting with its fiscal quarter ending nearest to December
30, 2010) based upon the Borrower’s consolidated financial statements delivered pursuant to
Section 5.01(a) or (b) of the Credit Agreement and (ii) each change in the
Applicable Rate resulting from a change in the Total Leverage Ratio shall be effective on the date
10 Business Days after delivery to the Administrative Agent of such consolidated financial
statements indicating such change and ending on the date immediately preceding the effective date
of the next such change; provided that the Total Leverage Ratio shall be deemed to be in Category 1
(A) at any time that an Event of Default has occurred and is continuing and (B) if the Borrower
fails to deliver the consolidated financial statements required to be delivered by it pursuant to
Section 5.01(a) or (b) of the Credit Agreement, during the period from the
expiration of the time for delivery thereof until such consolidated financial statements are
delivered.

          Notwithstanding anything to the contrary contained in this definition, the determination of
the Applicable Rate for any period shall be subject to the provisions of Section 2.12(f) of
the Credit Agreement.

          Section 2.05. Status of Agreement. Series A-2 Incremental Commitments of each Series
A-2 Incremental Lender constitute Incremental Loan Commitments and each Series A-2 Incremental
Lender constitutes an Incremental Loan Lender, in each case under and for all purposes of the
Credit Agreement. The Series A-2 Incremental Loans constitute a single “Series” of Incremental
Loans under Section 2.01(d) of the Credit Agreement.

ARTICLE III

REPRESENTATIONS AND WARRANTIES; NO DEFAULTS

          Borrower represents and warrants to the Administrative Agent and the Lenders as to itself and
each of its Restricted Subsidiaries that, after giving effect to the provisions hereof, (i) each of
the representations and warranties set forth in the Credit Agreement and the other Loan Documents
is true and correct on and as of the date hereof as if made on and as of the date hereof (or, if
any such representation or warranty is expressly stated to have been made as of a specific date,
such representation or warranty is true and correct as of such specific date) and as if each
reference therein to the Credit Agreement or Loan Documents included reference to this Agreement
and (ii) no Default has occurred and is continuing. All references herein to “the date hereof”
mean references to the date of the Credit Agreement.

 

 

ARTICLE IV

CONDITIONS

          The obligation of each Series A-2 Incremental Lender to make its Series A-2 Incremental
Commitment is subject to the conditions precedent that each of the following conditions shall have
been satisfied (or waived by the Required Series A-2 Incremental Lenders) on or prior to February
10, 2011:

     (a) Acquisition. Evidence that the Acquisition and transactions contemplated
thereby shall be consummated in all material respects simultaneously in accordance with the
Merger Agreement and applicable law; and all closing documentation related to the Merger
Agreement shall be reasonably satisfactory to the Administrative Agent. The Acquisition
shall have been approved by the Board of Directors of the Borrower and the Target Company
and shall otherwise be regarded as a “friendly” acquisition.

     (b) Additional Subsidiaries. Evidence that requirements of Section
5.09(a) of the Credit Agreement with respect to additional Subsidiaries have been
satisfied.

     (c) Opinions, Corporate Documentation. The Administrative Agent shall have
received such legal opinions, corporate documentation, certificates and similar documents as
shall be customary for a transaction of this type.

     (d) Fees and Expenses. Evidence that all fees and expenses have been paid in
full on or prior to the Closing Date to the Administrative Agent, BNP Paribas Securities
Corp. and the Lenders as the Borrower has agreed to pay in connection with the increase of
Series A-2 Incremental Commitments.

     (e) Ratings. The Borrower’s senior secured debt shall be rated by Standard &
Poor’s Ratings Services, a Division of the McGraw-Hill Companies, Inc. and Moody’s Investors
Service, Inc.

     (f) No Default. No Default or Event of Default under the Credit Agreement
shall have occurred and be continuing at the time of the increase of Series A-2 Incremental
Commitments after giving effect to the Acquisition.

     (g) Representations and Warranties. The representations and warranties of the
Borrower set forth in the Credit Agreement shall be true and correct as of such time (or, to
the extent any such representation or warranty is expressly stated to have been made as of a
specific date, as of such specific date), provided that neither the Borrower nor any
Guarantor shall be required to make any such representation or warranty that is inaccurate
(and the accuracy of any such representation or warranty shall not constitute a condition
precedent if both (a) the Borrower shall have notified the Administrative Agent at least
three Business Days prior to the consummation of the Acquisition of which such

 

 

representation or warranty it cannot make, and describing the inaccuracy in reasonable
detail, and (b) such inaccuracy is not materially adverse with respect to (i) the
properties, business, operations, or condition (financial or otherwise) of the Borrower and
its Subsidiaries taken as a whole, (ii) the ability of the Borrower or any Guarantors to
perform its payment and other material obligations under the Loan Documents or (iii) the
validity or enforceability of any Loan Document or the rights and remedies of the Lenders
thereunder).

     (h) Counterparts of Agreement. The Administrative Agent (or Special Counsel)
shall have received from each party hereto either (i) a counterpart of this Agreement signed
on behalf of such party or (ii) written evidence satisfactory to the Administrative Agent
(which may include telecopy transmission of a signed signature page of this Agreement) that
such party has signed a counterpart of this Agreement.

     (i) Notes. The Administrative Agent (or Special Counsel) shall have received
for each Series A-2 Incremental Lender that shall have requested a promissory note, a duly
completed and executed promissory note for such Series A-2 Incremental Lender.

     (j) Additional Conditions. Each of the conditions precedent set forth in
Sections 2.01(d) and 4.02(a) and (c) (giving effect to paragraph (h)
of Article IV hereof) of the Credit Agreement to the increase of Series A-2 Incremental
Commitments and the making of Series A-2 Incremental Loans on the Series A-2 Incremental
Loan Effective Date shall have been satisfied, and the Administrative Agent (or Special
Counsel) shall have received a certificate to such effect, dated the Series A-2 Incremental
Loan Effective Date and signed by the President, Vice President or a Financial Officer of
the Borrower.

ARTICLE V

MISCELLANEOUS

          SECTION 6.01. Expenses. The Credit Parties jointly and severally agree to pay, or
reimburse BNP Paribas Securities Corp. for paying, all reasonable out-of-pocket expenses incurred
by BNP Paribas Securities Corp. and its Affiliates, including the reasonable fees, charges and
disbursements of Special Counsel, in connection with the syndication of the Series A-2 Incremental
Commitments provided for herein and the preparation of this Agreement.

          SECTION 6.02. Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto on different counterparts), each of which
shall constitute an original, but all of which when taken together shall constitute a single
contract. This Agreement shall become effective when this Agreement shall have been executed by
the Administrative Agent and when the Administrative Agent shall have received counterparts hereof
which, when taken together, bear the signatures of each of the other parties hereto, and thereafter
shall be binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page of

 

 

this Agreement by telecopy shall be effective as delivery of a manually executed counterpart
of this Agreement.

          SECTION 6.03. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the law of the State of New York.

          SECTION 6.04. Headings. Article and Section headings used herein are for convenience
of reference only, are not part of this Agreement and shall not affect the construction of, or be
taken into consideration in interpreting, this Agreement.

          SECTION 6.05. USA Patriot Act. Each Series A-2 Incremental Lender hereby notifies
the Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)), such Series A-2 Incremental Lender may be required to obtain,
verify and record information that identifies the Borrower, which information includes the name and
address of the Borrower and other information that will allow such Series A-2 Incremental Lender to
identify the Borrower in accordance with said Act.

[Signature pages follow]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective authorized officers as of the day and year first above written.

	 	 	 	 	 
	 	THE GEO GROUP, INC.

 	 
	 	By:  	/s/ Brian R. Evans
 	 
	 	 	Name:  	Brian R. Evans 	 
	 	 	Title:  	Sr. VP & CFO 	 
	 

 

 

GUARANTORS

          By its signature below, the undersigned hereby consents to the foregoing Series A-2
Incremental Loan Agreement and confirms that the Series A-2 Incremental Loans shall constitute
“Guaranteed Obligations” under and as defined in the Guarantee Agreement and shall be entitled to
the benefits of the Guarantee and security provided under Guarantee Agreement.

	 	 	 	 	 
	 	CORRECTIONAL SERVICES CORPORATION

 	 
	 	By:  	/s/ Brian R. Evans
 	 
	 	 	Name:  	Brian R. Evans 	 
	 	 	Title:  	VP & Treasurer 	 
	 
	 	CORRECTIONAL PROPERTIES PRISON FINANCE LLC

 	 
	 	By:  	/s/ Brian R. Evans
 	 
	 	 	Name:  	Brian R. Evans 	 
	 	 	Title:  	VP, Finance 	 
	 
	 	CPT LIMITED PARTNER, LLC

 	 
	 	By:  	/s/ Brian R. Evans
 	 
	 	 	Name:  	Brian R. Evans 	 
	 	 	Title:  	VP, Finance 	 
	 
	 	CPT OPERATING PARTNERSHIP L.P.

 	 
	 	By:  	/s/ Brian R. Evans
 	 
	 	 	Name:  	Brian R. Evans 	 
	 	 	Title:  	VP, Finance 	 
	 
	 	GEO ACQUISITION II, INC.

 	 
	 	By:  	/s/ Brian R. Evans
 	 
	 	 	Name:  	Brian R. Evans 	 
	 	 	Title:  	VP, Finance 	 
	 
	 	GEO ACQUISITION IV, INC.

 	 
	 	 	 
	 	 	 
	 	 	 
	 

 

 

	 	 	 	 	 
	 	 	 
	 	By:  	                                              /s/ Brian R. Evans
 	 
	 	 	Name:  	Brian R. Evans 	 
	 	 	Title:  	VP-Finance 	 
	 
	 	GEO CARE, INC.

 	 
	 	By:  	/s/ Brian R. Evans
 	 
	 	 	Name:  	Brian R. Evans 	 
	 	 	Title:  	Treasurer 	 
	 
	 	GEO HOLDINGS I, INC.

 	 
	 	By:  	/s/ Brian R. Evans
 	 
	 	 	Name:  	Brian R. Evans 	 
	 	 	Title:  	VP, Finance 	 
	 
	 	GEO RE HOLDINGS LLC

 	 
	 	By:  	/s/ Brian R. Evans
 	 
	 	 	Name:  	Brian R. Evans 	 
	 	 	Title:  	SVP & Treasurer 	 
	 
	 	GEO TRANSPORT, INC.

 	 
	 	By:  	/s/ Brian R. Evans
 	 
	 	 	Name:  	Brian R. Evans 	 
	 	 	Title:  	VP & Treasurer 	 
	 
	 	JUST CARE, INC.

 	 
	 	By:  	/s/ Brian R. Evans
 	 
	 	 	Name:  	Brian R. Evans 	 
	 	 	Title:  	VP & Treasurer 	 
	 
	 	PUBLIC PROPERTIES DEVELOPMENT AND LEASING LLC

 	 
	 	By:  	/s/ Brian R. Evans
 	 
	 	 	Name:  	Brian R. Evans 	 
	 	 	Title:  	VP, Finance 	 
	 

 

 

	 	 	 	 	 
	 	CORNELL COMPANIES, INC.

 	 
	 	By:  	/s/ Brian R. Evans
 	 
	 	 	Name:  	Brian R. Evans 	 
	 	 	Title:  	VP, CFO 	 
	 
	 	CCG I CORPORATION

 	 
	 	By:  	/s/ Brian R. Evans
 	 
	 	 	Name:  	Brian R. Evans 	 
	 	 	Title:  	VP, CFO 	 
	 
	 	CORNELL ABRAXAS GROUP, INC.

 	 
	 	By:  	/s/ Brian R. Evans
 	 
	 	 	Name:  	Brian R. Evans 	 
	 	 	Title:  	VP, CFO 	 
	 
	 	CORNELL COMPANIES ADMINISTRATION, LLC

 	 
	 	By:  	/s/ Brian R. Evans
 	 
	 	 	Name:  	Brian R. Evans 	 
	 	 	Title:  	VP, CFO 	 
	 
	 	CORNELL COMPANIES MANAGEMENT HOLDINGS, LLC

 	 
	 	By:  	/s/ Brian R. Evans
 	 
	 	 	Name:  	Brian R. Evans 	 
	 	 	Title:  	VP, CFO 	 
	 
	 	CORNELL COMPANIES MANAGEMENT, LP

 	 
	 	By:  	/s/ Brian R. Evans
 	 
	 	 	Name:  	Brian R. Evans 	 
	 	 	Title:  	VP, CFO 	 
	 

 

 

	 	 	 	 	 
	 	CORNELL COMPANIES MANAGEMENT SERVICES, LIMITED PARTNERSHIP

 	 
	 	By:  	/s/ Brian R. Evans
 	 
	 	 	Name:  	Brian R. Evans 	 
	 	 	Title:  	VP, CFO 	 
	 
	 	CORNELL CORRECTIONS MANAGEMENT, INC.

 	 
	 	By:  	/s/ Brian R. Evans
 	 
	 	 	Name:  	Brian R. Evans 	 
	 	 	Title:  	VP, CFO 	 
	 
	 	CORNELL CORRECTIONS OF ALASKA, INC.

 	 
	 	By:  	/s/ Brian R. Evans
 	 
	 	 	Name:  	Brian R. Evans 	 
	 	 	Title:  	VP, CFO 	 
	 
	 	CORNELL CORRECTIONS OF CALIFORNIA, INC.

 	 
	 	By:  	/s/ Brian R. Evans
 	 
	 	 	Name:  	Brian R. Evans 	 
	 	 	Title:  	VP, CFO 	 
	 
	 	CORNELL CORRECTIONS OF RHODE ISLAND, INC.

 	 
	 	By:  	/s/ Brian R. Evans
 	 
	 	 	Name:  	Brian R. Evans 	 
	 	 	Title:  	VP, CFO 	 
	 
	 	CORNELL CORRECTIONS OF TEXAS, INC.

 	 
	 	 	 
	 	 	 
	 	 	 
	 

 

 

	 	 	 	 	 
	 	 	 
	 	By:  	                                              /s/ Brian R. Evans
 	 
	 	 	Name:  	Brian R. Evans 	 
	 	 	Title:  	VP, CFO 	 
	 
	 	CORNELL INTERVENTIONS, INC.

 	 
	 	By:  	/s/ Brian R. Evans
 	 
	 	 	Name:  	Brian R. Evans 	 
	 	 	Title:  	VP, CFO 	 
	 
	 	CORRECTIONAL SYSTEMS, INC.

 	 
	 	By:  	/s/ Brian R. Evans
 	 
	 	 	Name:  	Brian R. Evans 	 
	 	 	Title:  	VP, CFO 	 
	 
	 	WBP LEASING, INC.

 	 
	 	By:  	/s/ Brian R. Evans
 	 
	 	 	Name:  	Brian R. Evans 	 
	 	 	Title:  	VP, CFO 	 
	 
	 	WBP LEASING, LLC

 	 
	 	By:  	/s/ Brian R. Evans
 	 
	 	 	Name:  	Brian R. Evans 	 
	 	 	Title:  	VP, CFO 	 
	 

 

 

	 	 	 	 	 
	 	ADMINISTRATIVE AGENT

BNP PARIBAS,
    as Administrative Agent

 	 
	 	By:  	/s/ Brendan Heneghan
 	 
	 	 	Name:  	Brendan Heneghan 	 
	 	 	Title:  	Vice President 	 
	 
	 	 	 
	 	By:  	                                              /s/ John Treadwell, Jr.
 	 
	 	 	Name:  	John Treadwell, Jr. 	 
	 	 	Title:  	Vice President 	 
	 

 

 

SERIES A-2 INCREMENTAL LENDERS SIGNATORIES HERETO*

 

			
	*	 	Confidential terms omitted and provided separately to the Securities and Exchange
Commission.Exhibit 10.19

Exhibit 10.19

	 	 	 

	

	 	Ronald E. Elberger 
Direct Dial: (317) 684-5195 
Fax: (317) 223-0195
E-Mail: RElberger@boselaw.com

December 24, 2010

	 	 	 

	Jeffrey Smulyan

	 	J. Scott Enright, Esq.
	JS Acquisitions, LLC

	 	Executive Vice President, General Counsel and Secretary
	c/o James Strain, Esq.

	 	Emmis Communication Corporation
	Taft Stettinius & Hollister, LLP

	 	One Emmis Plaza, Suite 700
	One Indiana Square, Suite 3500

	 	40 Monument Circle
	Indianapolis, IN 46204

	 	Indianapolis, IN 46204

Re: Engagement Letter

Dear Jeff and Scott:

This Engagement Letter will serve to confirm that JS Acquisition, LLC (“JSA”) and Emmis
Communication Corporation (“Emmis”) have retained our services to provide representation on their
behalf with regard to the prosecution of the civil action captioned JS Acquisition, LLC v.
Alden Global Distressed Opportunities Master Fund, L.P., Alden Global Value Recovery Master Fund,
L.P., and Alden Media Holdings, LLC, originally filed in the Marion Superior Court on September
15, 2010, as cause number 49D04-1009-PL-040613, and removed to the United States District Court for
the Southern District of Indiana, Indianapolis Division, as cause number 1:10-cv-01328-WTL-TAB,
(the “civil action’), where it is now pending, which representation will be in accordance with the
following terms and conditions:

JSA, to whom Emmis will pay the sum of Two Hundred Thousand Dollars ($200,000.00) as an
investment between Emmis and JSA to which Bose McKinney & Evans LLP (“BME”) is not a party, shall
deposit the sum of Two Hundred Thousand Dollars ($200,000.00) (the “Retainer”) in BME’s trust
account. The sum of One Hundred Twenty-Five Thousand Dollars ($125,000.00) of the funds tendered
will be applied against out of pocket costs and expenses (e.g., electronic discovery, costs of
depositions, overnight courier services, etc.) relating to the aforementioned civil action. BME
shall allocate Seventy Five Thousand Dollars ($75,000.00) to be applied against its attorney’s fees
which will be calculated at an hourly blended rate of $200/hour for all attorney’s services
provided by BME. If BME obtains a recovery with respect to claims by JSA, JSA, Emmis and BME agree
that (i) the first amounts up to one hundred and fifty percent of the amount of BME attorneys fees
and costs and expenses paid from the Retainer shall be paid to Emmis, (ii) the first amounts in
excess of amounts paid under item (i) above, up to the amount of any out of pocket costs and
expenses that were incurred in excess of amounts paid from the Retainer, shall be paid to the party
who paid such additional costs and expenses, and (iii) all amounts in excess of amounts paid under
items (i) and (ii) above shall be paid as follows: one-third to BME as a contingent fee and the
remainder to JSA. Notwithstanding the foregoing, JSA shall be responsible for the payment of all
out of pocket costs and expenses in the civil action.

111 Monument Circle, Suite 2700 | Indianapolis, Indiana 46204 Main Telephone: 317-684-5000 | Main Fax: 317-684-5173

www.boselaw.com

 

 

 

Jeffrey Smulyan

J. Scott Enright

December 24, 2010

Page Two

Upon exhaustion of the retainer, we will continue to issue monthly invoices to JSA for
reimbursement of costs and expenses. In the event that our final billing in this matter is less
than the amount of the Retainer held at the conclusion of this matter, we will refund the
difference to Emmis.

This engagement is premised on candid communication with us and the understanding that we will
be kept informed with complete and accurate information, documents and other communications
relevant to the subject matter of our representation or otherwise requested by us. Because it is
important that we be able to contact you at all times in order to consult with you regarding your
representation, we ask that you inform us, in writing, of any changes in your address, telephone
number, contact person, e-mail address, or other relevant changes regarding your business.

Unless you instruct otherwise, we may communicate with you using e-mail, facsimile
transmission and cellular telephone with the understanding that these methods carry an inherent
risk of interception. By signing and returning this engagement letter, you confirm in writing your
informed consent to these risks.

Charges for BME attorney’s fees up to the sum of $75,000.00 are determined by multiplying the
$200.00 hourly discounted blended rate of the attorneys who provide services by the amount of time,
specified to the closest tenth of an hour, spent providing services to or for you during the course
of your representation for the time spent. BME agrees that it is accepting the contingent fee
arrangement and will not charge for any BME attorney’s fees in excess of $75,000, except as set
forth herein. Where appropriate, other attorneys in our firm may provide such services, subject to
the review of George Purdy, Andrew McNeil and/or myself.

JSA and Emmis will each receive a monthly statement detailing the amount of time we spend,
with a description of the services rendered on your behalf. Rates, as hereinbefore set forth, will
be applied to the amount of time we spend at any given time, in units of no less than six (6)
minute increments, or one-tenth (1/10) of an hour. The services for which you will be billed
and/or which are subject to the contingent fee include, but are not limited to: all conferences
and/or consultation with you, any other attorney (co-counsel or opposing counsel), person or party,
whether in person or by phone, and all such conferences with anyone who is or might be a fact
witness or an expert witness in this matter, analysis of legal issues and facts, legal research,
correspondence, negotiations and settlement discussions, preparation for or calendaring any of the
above, preparation for and attending hearings and trial, drafting of various pleadings, briefs,
discovery and responses and objections thereto, and travel time to and from locations away from our
office.

JSA will be responsible for the prompt payment of all out of pocket costs or expenses
necessary for this representation, including, but not limited to, filing fees, court reporter fees,
transcription costs, expert witness fees, witness attendance and mileage fees. All such costs or
expenses will be paid by JSA, in advance where applicable. We do not usually pay or advance any
such costs for clients. Where possible, we will apply the costs Retainer and, if such funds are
exhausted, we will forward these types of charges to JSA for direct payment. However, in exigent
circumstances we may advance such costs to protect or preserve certain rights.

 

 

 

Jeffrey Smulyan

J. Scott Enright

December 24, 2010

Page Three

Other out-of-pocket costs and expenses which JSA will be expected to pay, or for which we may
require reimbursement, include without limitation: excessive postage, fees for delivery or
overnight courier services, certified or recorded copies of documents, expenses associated with
out-of-town travel, parking, and other similar items. Our statements are payable within thirty
(30) days after invoice date with regard to which we may apply the retainer for fees hereinbefore
set forth.

Prompt payment is a condition of our continued representation. We reserve the right to charge
interest at the rate of 1-12% per month (18% annual percentage rate) on statements not paid within
thirty (30) days of the invoice date. In the unlikely event JSA fails to pay our invoices and we
must take legal action to collect them, JSA will be responsible for any and all collection costs we
may incur, including attorneys’ fees, in collecting the unpaid balance of any such statements,
including interest.

JSA and Emmis each have the right to terminate our representation at any time; provided that
if Emmis terminates our representation and JSA does not, BME may still pay BME fees and costs and
expenses associated with the civil action from the Retainer. If either of you do so, JSA will be
responsible for all fees, expenses, disbursements and charges incurred in connection with our
representation up to the date of termination, and the terminating party will be responsible for the
costs and fees to transfer the work to the terminating party’s new attorney. We may also terminate
our representation for any reason consistent with the Rules of Professional Conduct, including the
non-payment of fees or other failure to comply with the terms of our engagement described in this
letter.

Unless you indicate otherwise, we will assume that all papers and property that you provide to
us are originals, and we will return any such papers or property to you upon the conclusion of the
representation. Copies of papers and electronic documents and records we have retained that were
created or obtained for you likewise will be made available to you at your request. Our drafts and
work product will belong to us. We reserve the right, subject to any applicable laws or rules or
professional responsibility to the contrary, to apply records retention policies and procedures to
these items and also to destroy within a reasonable time any items described in this paragraph that
are retained by us.

 

 

 

Jeffrey Smulyan

J. Scott Enright

December 24, 2010

Page Four

In addition, although our initial engagement does not involve tax advice, to the extent that
the scope of our engagement is modified in the future to include federal tax advice, you should be
aware that pursuant to recently-enacted U.S. Treasury Department Regulations (Circular 230), we are
required to advise you that any federal tax advice we provide is not intended to be used, and
cannot be used, by anyone for the purpose of avoiding federal tax penalties that may be imposed by
the federal government or for promoting, marketing or recommending any approach or tax structure to
another party. This Agreement does not cover any claims against Alden that may be asserted by
Emmis.

If you agree to the foregoing terms, please sign the original of this letter and return it to
me at your convenience.

I look forward to assisting you with regard to the pending matter. To facilitate receipt of
the signed original of this letter, I enclose a self-addressed, postage prepaid, return envelope.

Sincerely,

/s/ Ronald E. Elberger

Ronald E. Elberger

REE/mhw

Enclosures (2)

 

 

 

Jeffrey Smulyan

J. Scott Enright

December 24, 2010

Page Five

I agree to, and accept, the foregoing terms and conditions set forth in this Engagement
Letter.

	 	 	 	 	 
	 	JS Acquisitions, LLC

 	 
	 	By:  	/s/ Jeffrey H. Smulyan
 	 
	 	 	Jeffrey Smulyan 	 
	 
	 	Dated:  December 24, 2010 	 
	 
	 	Emmis Communications Corporation

 	 
	 	By:  	/s/ J. Scott Enright
 	 
	 	 	J. Scott Enright, 	 
	 	 	Executive Vice President,

General Counsel and Secretary 	 
	 
	 	Dated:  December 24, 2010

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00189-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00189-of-00352.parquet"}]]