AMENDED AND RESTATED CONSULTING SERVICES AGREEMENTConsulting Services Agreement |
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EXHIBIT 10.3
AMENDED AND RESTATED CONSULTING SERVICES AGREEMENT
This AMENDED AND RESTATED CONSULTING SERVICES AGREEMENT ("Agreement") is
made and entered into as of the 9th day of September, 2004, by and between
T-NETIX, Inc., a Delaware corporation ("T-NETIX"), Evercom Systems, Inc., a
Delaware corporation ("ESI", and together with T-NETIX, each a "Company" and
together the "Companies"), and H.I.G. Capital, LLC, a Delaware limited liability
company (the "Consultant"). This Agreement amends and restates in its entirety
that certain Consulting Services Agreement, dated as of March 3, 2004, by and
between T-NETIX and the Consultant.
1. Appointment of the Consultant. The Companies appoint the Consultant and
the Consultant accepts appointment on the terms and conditions provided in this
Agreement as a consultant to the business of each Company, their parent
companies and their subsidiaries, including any other entities hereafter formed
or acquired by either Company or any such parent or subsidiary to engage in any
business (collectively, the "Company Group").
2. Board of Directors Supervision. The activities of the Consultant to be
performed under this Agreement shall be subject to the supervision of the Board
of Directors of the each respective Company (each, a "Board") to the extent
required by applicable law or regulation and subject to reasonable policies not
inconsistent with the terms of this Agreement adopted by the respective Board
and in effect from time to time. Where not required by applicable law or
regulation, the Consultant shall not require the prior approval of either Board
to perform its duties under this Agreement.
3. Authority of the Consultant. Subject to any limitations imposed by
applicable law or regulation, the Consultant shall render management, consulting
and financial advisory services to the Company Group, which services shall
include advice and assistance concerning any and all aspects of the operations,
planning and financing of the Company Group as needed from time to time,
including conducting relations on behalf of the Company Group with accountants,
attorneys, bankers, financial advisors and other professionals. The Consultant
will also make periodic reports to the Companies with respect to the management
services provided hereunder and the value of the assets of the Company Group.
The Consultant will use its best efforts to cause its employees and agents to
provide the Company Group with the benefit of their special knowledge, skill and
business expertise to the extent relevant to the business and affairs of the
Company Group.
4. Reimbursement of Expenses; Independent Contractor. All obligations or
expenses incurred by the Consultant in the performance of its duties under this
Agreement shall be for the account of, on behalf of, and at the expense of the
Companies, on a joint and several basis. The Consultant shall not be obligated
to make any advance to or for the account of either Company or any other member
of the Company Group or to pay any sums, except out of funds held in accounts
maintained by either Company nor shall the Consultant be obligated to incur any
liability or obligation for the account of either Company or any other member of
the Company Group without assurance that the necessary funds for the discharge
of such liability or obligation will be provided. The Consultant shall be an
independent contractor, and nothing contained in this Agreement shall be deemed
or construed (i) to create a partnership or joint
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venture between either Company or any other member of the Company Group and the
Consultant, or (ii) to cause the Consultant to be responsible in any way for the
debts, liabilities or obligations of the Company Group or any other party, or
(iii) to constitute the Consultant or any of its employees as employees,
officers or agents of any member of the Company Group.
5. Other Activities of the Consultant; Investment Opportunities. Each
Company acknowledges and agrees that neither the Consultant nor any of the
Consultant's employees, officers, directors, affiliates or associates shall be
required to devote full time and business efforts to the duties of the
Consultant specified in this Agreement, but instead shall devote only so much of
such time and efforts as the Consultant reasonably deems necessary. Each Company
further acknowledges and agrees that the Consultant and its affiliates are
engaged in the business of investing in, acquiring and/or managing businesses
for the Consultant's own account, for the account of the Consultant's affiliates
and associates and for the account of other unaffiliated parties, and
understands that the Consultant plans to continue to be engaged in such
businesses (and other business or investment activities) during the term of this
Agreement. No aspect or element of such activities shall be deemed to be engaged
in for the benefit of the Company Group or any member thereof nor to constitute
a conflict of interest. Furthermore, notwithstanding anything herein to the
contrary, the Consultant shall be required to bring only such investments and/or
business opportunities to the attention of the Companies as the Consultant, in
its sole discretion, deems appropriate.
6. Compensation of the Consultant. In consideration of Consultant's
agreement to provide the management services described herein, the Companies
will pay, on a joint and several basis, to the Consultant the following fees:
(a) The Companies will pay, on a joint and several basis, to the
Consultant a yearly base cash consulting and management fee equal to $750,000
(the "Consulting Fee"), to be paid quarterly in arrears on each May 15, August
15, November 15 and February 15 of each year (commencing with the first such
payment on November 15, 2004). The payment by the Companies of the Consulting
Fee hereunder is subject to the applicable restrictions contained in the Credit
Agreement, dated as of September 9, 2004 (as amended, restated, supplemented or
otherwise modified from time to time, the "Credit Agreement"), by and among
Securus Technologies, Inc., a Delaware corporation (together with its successors
and assigns, the "Parent"), as borrower, each subsidiary of the Parent listed as
a Guarantor on the signature pages thereto, the financial institutions from time
to time party thereto (collectively, the "Lenders"), ING Capital LLC, as the
Issuing Lender, and ING Capital LLC, as the administrative agent (the
"Administrative Agent"). If any such restrictions prohibit the payment of any
installment of the Consulting Fee, such installment shall accrue and the
Companies shall make such installment payment as soon as it is permitted to do
so under such restrictions.
(b) Upon termination of this Agreement pursuant to Section 7(b) below, the
Companies will pay a fee of two percent (2%) of the Enterprise Value of the
Parent. As used herein, "Enterprise Value" means:
(i) with respect to the Parent's initial public offering, an amount
equal to the initial public offering price per share in such initial
public offering multiplied by the
-2-
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number of shares of the Parent outstanding on a fully diluted basis after
giving effect to such initial public offering; and
(ii) with respect to a termination described in Section 7(b)(ii)
below, the Total Value (as defined below).
(c) As used herein "Total Value" means the total cash and non-cash
consideration paid to any member of the Company Group or any shareholder thereof
in any transaction or a series of transactions described in Section 7(b)(ii)
below (each, a "Transaction"), including, without limitation, the amount of all
indebtedness for borrowed money of any member of the Company Group party to or
the subject of such Transaction, which is assumed, acquired, retired,
extinguished or defeased by the purchaser or acquiror, or with respect to any
entity acquired by the purchaser or acquiror, which otherwise remains
outstanding. The value of any non-cash consideration included in Total Value
shall be determined as follows:
(i) The value of stock and other securities that are Freely
Tradeable shall be the average closing market price of such stock or
securities for the five consecutive business days preceding the public
announcement of the definitive agreement to enter into a Transaction. For
purposes of the foregoing, a security shall be "Freely Tradeable" if such
security is listed on the New York Stock Exchange, American Stock
Exchan






