H.I.G. CAPITAL PARTNERS III, L.P.

1001 BRICKELL BAY DRIVE, 27TH FLOOR

MIAMI, FLORIDA 33131

 

 

 

November 12, 2007

 

CONFIDENTIAL

 

Securus Technologies, Inc.

14651 Dallas Parkway, 6th Floor

Dallas, Texas 75254

 

Gentlemen:

 

We understand that Securus Technologies, Inc., a Delaware corporation (“you” or
“Securus”), will be in violation of certain financial covenants in the (i)
Credit Agreement, dated September 9, 2004, by and among Securus, ING and the
other lenders party thereto, as amended (the “Credit Agreement”) and (ii)
Indenture for its 11% Second-Priority Senior Secured Notes due 2011 (the
“Indenture”), and may not meet those covenants through 2008 (the “Anticipated
Defaults”).

 

This letter agreement will confirm the commitment of H.I.G. Capital Partners
III, L.P. (“H.I.G.”) to directly or indirectly purchase capital stock of Securus
in an amount necessary to cure the Anticipated Defaults up to a maximum
aggregate amount of Ten Million Dollars ($10,000,000) (the “H.I.G. Financing”)
if and when requested by Securus’ Chief Executive Officer in writing. The terms
and conditions of the capital stock will be negotiated by H.I.G. and Securus in
good faith. H.I.G. hereby represents to the Purchaser that as of the date hereof
H.I.G. has unused capital commitments well in excess of the H.I.G. Financing and
can provide the H.I.G. Financing on or before December 31, 2007.

 

Subject to the termination provisions of this letter agreement contained in the
second succeeding paragraph, this letter agreement is irrevocable.

 

Notwithstanding any other term or condition of this letter agreement, under no
circumstances may anyone but the named addressee (or the named addressee’s
assigns) bring any action under this letter agreement. Furthermore,
notwithstanding any other term or condition of this letter agreement, under no
circumstances shall H.I.G have any obligation or liability under this letter
agreement arising out of any breach by Securus of any of its obligations under
the Credit Agreement or Indenture. There is no express or implied intention to
benefit any third party and nothing contained in this letter agreement is
intended, nor shall anything herein be construed, to confer any rights, legal or
equitable, in any person or entity other than Securus.

 

Our commitment will be effective upon Securus’ acceptance of the terms and
conditions of this letter agreement and will expire on the earliest to occur of
(i) the date the Anticipated Defaults are cured, or (ii) December 31, 2008. This
commitment supersedes any and all prior understandings or

 

 

MIAMI 754990 v2 (2K)

 

 

 

 

 

agreements, whether written or oral, regarding HIG and its affiliates
willingness to provide capital to Securus, including without limitation, that
certain Letter Agreement, dated August 13, 2007, between Securus and H.I.G.
T-Netix, Inc. and the guarantee of that certain loan by Harris N.A., dated
August 17, 2007 (the “Harris Loan”). In the event the Harris Loan is drawn or
otherwise not terminated, the HIG Financing shall be reduced dollar for dollar
for the full amount of H.I.G.’s and its affiliates’ liability thereunder.

 

We represent and warrant to you that (i) we are organized, validly existing, and
in good standing under the laws of our jurisdiction of formation and have the
requisite power and authority to carry on our business as now being conducted
and to effect the transactions contemplated herein, (ii) we have the requisite
power and authority to execute and to deliver this letter agreement and to
perform our obligations hereunder, (iii) the execution and delivery by us of
this letter agreement, the performance of our obligations hereunder and the
consummation by us of the transactions contemplated hereby have been duly
authorized by all necessary entity action on our part, and no other action on
our part is necessary to authorize the execution and delivery of this letter
agreement or the consummation of the transactions contemplated hereby, and (iv)
this letter agreement has been duly and validly executed and delivered by us and
constitutes a valid and binding obligation of ours, enforceable against us in
accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting
creditors’ rights and remedies.

 

This letter agreement shall be governed by and construed in accordance with the
internal laws of the State of New York, excluding the provisions of such laws
regarding conflicts of law or choice of law.

 

This letter agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which when executed
and delivered shall be an original, but all of which shall together constitute
one and the same instrument.

 

The terms and conditions of this letter agreement may be modified only in
writing signed by both parties hereto.

 

Please confirm the above agreement between you and us by signing and returning
to us a copy of this letter agreement.

 

 

Sincerely,

 

 

 

 

 

 

 

 

 

 

H.I.G. CAPITAL PARTNERS III, L.P.

 

 

 

 

 

 

 

 

 

By: H.I.G. Advisors III, L.L.C.

 

 

 

 

Its: General Partner

 

 

 

 

 

 

 

 

 

By: H.I.G. - GPII, Inc.

 

 

 

 

Its: Manager

 

 

 

 

 

 

 

 

 

By:

/S/ANTHONY TAMER

 

 

 

Name:   Anthony Tamer

 

 

 

 

 

MIAMI 754990 v2 (2K)

 

 

 

 

 

 

 

 

Its:        President

 

 

 

 

 

 

 

 

 

Accepted and Agreed as of

 

 

 

 

November 12, 2007:

 

 

 

 

 

 

 

 

 

SECURUS TECHNOLOGIES, INC.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

/S/RICHARD FALCONE

 

 

 

By: Richard Falcone

 

 

 

 

Its: Chief Executive Officer

 

 

 

 

 

 

MIAMI 754990 v2 (2K)