Exhibit 4.11
INTERCREDITOR AGREEMENT
INTERCREDITOR AGREEMENT, dated as of September 9, 2004, among ING CAPITAL
LLC ("ING"), as Intercreditor Agent, THE BANK OF NEW YORK TRUST COMPANY, N.A.,
as Trustee, SECURUS TECHNOLOGIES INC., a Delaware corporation (the "COMPANY")
and each Subsidiary of the Company listed on Schedule I hereto.
A. The Company and the Company's Subsidiaries (such term and each
other capitalized term used herein having the meanings set forth in Section 1
below) have entered into a Credit Agreement dated as of September 9, 2004 (as
further amended, restated, refinanced, replaced, supplemented or otherwise
modified from time to time, the "CREDIT AGREEMENT") with, among others, ING, as
administrative agent for the lenders and certain lenders named therein;
B. The Company and certain of the Company's Subsidiaries have entered
into a Pledge Agreement dated as of September 9, 2004 (as further amended,
restated, supplemented, replaced or otherwise modified from time to time, the
"PLEDGE AGREEMENT") with, among others, ING, as administrative agent for the
lenders and certain lenders named therein;
C. The Company and the Company's Subsidiaries have entered into a
Security Agreement dated as of September 9, 2004 (as further amended, restated,
supplemented, replaced or otherwise modified from time to time, the "SECURITY
AGREEMENT") with, among others, ING, as administrative agent for the lenders and
certain lenders named therein;
D. The Obligations of the Company under the Credit Agreement are
secured on a first-priority basis by all personal property and certain real
property assets of the Company and certain of the Company's Subsidiaries;
E. The Company, the Company's Subsidiaries and the Trustee have
entered into an Indenture dated as of September 9, 2004 (as amended,
supplemented or otherwise modified from time to time, the "INDENTURE"), pursuant
to which the Notes shall be governed;
F. The obligations of the Company and the Subsidiary Guarantors under
the Indenture and the Notes are secured on a second-priority basis by certain
personal property and certain real property assets of the Company and certain of
the Company's Subsidiaries.
G. The Company, certain of the Company's subsidiaries, the Trustee and
the Intercreditor Agent are entering into this Agreement to set forth, among
other things, certain rights and priorities with respect to the "Senior Lender
Collateral" and the "Noteholder Collateral" (each as defined below);
Accordingly, in consideration of the foregoing, the mutual covenants
and obligations herein set forth and for other good and valuable consideration,
the sufficiency and receipt of which are hereby acknowledged, the parties
hereto, intending to be legally bound, hereby agree as follows:
SECTION 1. DEFINITIONS.
1.1 Defined Terms. As used in this Agreement, the following terms
have the meanings specified below:
"AGREEMENT" shall mean this Agreement, as amended, renewed, extended,
supplemented or otherwise modified from time to time in accordance with the
terms hereof.
"BANKRUPTCY LAW" shall mean Title 11 of the United States Code and any
similar Federal, state or foreign law for the relief of debtors.
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday or a
day that is a legal holiday under the laws of the State of New York or the State
of Georgia or on which banking institutions in the State of New York or the
State of Georgia are required or authorized by law or other governmental action
to close.
"COMMON COLLATERAL" shall mean all of the assets of any Grantor,
whether real, personal or mixed, constituting both Senior Lender Collateral and
Noteholder Collateral.
"COMPANY" shall have the meaning set forth in the preamble.
"COMPARABLE NOTEHOLDER COLLATERAL DOCUMENT" shall mean, in relation to
any Common Collateral subject to any Lien created under any Senior Collateral
Document, that Noteholder Collateral Document that creates a Lien on the same
Common Collateral, granted by the same Grantor.
"CREDIT AGREEMENT" shall have the meaning set forth in the recitals.
"DEPOSIT ACCOUNT" shall have the meaning set forth in the Uniform
Commercial Code.
"DEPOSIT ACCOUNT COLLATERAL" shall mean that part of the Common
Collateral comprised of or contained in (i) Deposit Accounts relating to
proceeds of Common Collateral or (ii) Securities Accounts.
"DIP FINANCING" shall have the meaning set forth in Section 6.1.
"DISCHARGE OF SENIOR LENDER CLAIMS" shall mean, except to the extent
otherwise provided in Section 5.6, payment in full in cash (except for
contingent indemnities and cost and reimbursement obligations to the extent no
claim has been made) of (a) all Obligations in respect of all outstanding
First-Lien Indebtedness and, with respect to letters of credit or letter of
credit guaranties outstanding thereunder, delivery of cash collateral or
backstop letters of credit in respect thereof in compliance with the Senior
Credit Agreement, in each case after or concurrently with the termination of all
commitments to extend credit thereunder and (b) any other Senior Lender Claims
that are due and payable or otherwise accrued and owing at or prior to the time
such principal and interest are paid.
"FIRST-LIEN INDEBTEDNESS" shall mean (a) all Indebtedness incurred by
the
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Company and its Subsidiaries pursuant to the Senior Lender Documents, that is
secured by a Permitted Lien (as defined in the Indenture on the date hereof and
incurred or deemed incurred pursuant to clause (7) of the definition thereof),
(b) all other Obligations (not constituting Indebtedness) of the Company and its
Subsidiaries under the Senior Lender Documents and (c) all other Obligations of
the Company and its Subsidiaries in respect of Hedging Obligations entered into
with ING, any of the Senior Lenders or any of their affiliates that are secured
under any of the Senior Lender Documents.
"FUTURE FIRST-LIEN INDEBTEDNESS" shall mean any First-Lien
Indebtedness other than First-Lien Indebtedness referred to in clauses (a) and
(b) of the definition of First-Lien Indebtedness incurred pursuant to the Credit
Agreement and the Senior Lender Documents entered into in connection therewith.
"GRANTORS" shall mean the Company and each of the Subsidiaries that
has executed and delivered a Noteholder Collateral Document or a Senior
Collateral Document.
"HEDGING OBLIGATIONS" shall mean, with respect to any Person, all
obligations and liabilities, whether now owing or hereafter arising, of such
Person in respect of (a) interest rate or commodity swap agreements, interest
rate or commodity cap agreements, and interest rate or commodity collar
agreements and (b) other agreements or arrangements designed to protect such
Person against fluctuations in interest rates or commodity prices.
"INDEBTEDNESS" shall mean and include all obligations that constitute
"Indebtedness" or "Debt" within the meaning of the Indenture or the Senior
Credit Agreement.
"INDENTURE" shall have the meaning set forth in the recitals.
"INSOLVENCY OR LIQUIDATION PROCEEDING" shall mean (a) any voluntary or
involuntary case or proceeding under any Bankruptcy Law with respect to any
Grantor, (b) any other voluntary or involuntary insolvency, reorganization or
bankruptcy case or proceeding, or any receivership, liquidation, reorganization
or other similar case or proceeding with respect to any Grantor or with respect
to any of its assets, (c) any liquidation, dissolution, reorganization or
winding up of any Grantor whether voluntary or involuntary and whether or not
involving insolvency or bankruptcy or (d) any assignment for the benefit of
creditors or any other marshalling of assets and liabilities of any Grantor.
"INTERCREDITOR AGENT" shall mean ING, in its capacity as
Administrative Agent for the Senior Lenders under the Credit Agreement and the
other Senior Lender Documents, together with its successors (or if there is more
than one Senior Credit Agreement or a subsequent Senior Credit Agreement, such
agent or trustee as is designated "Intercreditor Agent" by Senior Lenders
holding a majority of the Senior Lender Claims then outstanding) and permitted
successors and assigns under the Senior Credit Agreement exercising
substantially the same rights and powers.
"LIEN" shall mean, with respect to any asset, any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset.
"NOTEHOLDER CLAIMS" shall mean all Obligations in respect of the Notes
or arising under the Noteholder Documents or any of them, including all fees and
expenses of the Trustee
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thereunder.
"NOTEHOLDER COLLATERAL" shall mean all of the assets of any Grantor,
whether real, personal or mixed, with respect to which a Lien is granted as
security for any Noteholder Claim.
"NOTEHOLDER COLLATERAL DOCUMENTS" shall mean the Noteholder Pledge
Agreement, the Noteholder Security Agreement and any other document or
instrument pursuant to which a Lien is granted by any Grantor to secure any
Noteholder Claims or under which rights or remedies with respect to any such
Lien are governed.
"NOTEHOLDER DOCUMENTS" shall mean (a) the Indenture, the Notes, the
Noteholder Collateral Documents and (b) any other related document or instrument
executed and delivered pursuant to any Noteholder Document described in clause
(a) above evidencing or governing any Obligations thereunder.
"NOTEHOLDER PLEDGE AGREEMENT" shall mean the Pledge Agreement dated as
of September 9, 2004, among the Company, certain other domestic Grantors and the
Trustee.
"NOTEHOLDER SECURITY AGREEMENT" shall mean the Security Agreement
dated as of September 9, 2004, among the Company, certain other domestic
Grantors and the Trustee.
"NOTEHOLDERS" shall mean the Persons holding Noteholder Claims.
"NOTES" shall mean (a) the initial $154,000,000 in aggregate principal
amount of 11% second-priority senior secured notes due 2011 to be issued by the
Company pursuant to the Indenture, (b) the exchange notes issued in exchange
therefor as contemplated by the Registration Rights Agreement dated as of
September 9, 2004, among the Company, certain of the Company's Subsidiaries and
the initial purchasers party thereto, and (c) any additional notes issued under
the Indenture by the Company, to the extent permitted by the Indenture and the
Credit Agreement.
"OBLIGATIONS" shall mean, with respect to any Indebtedness, any and
all obligations, whether now owing or hereafter arising, with respect to the
payment of (a) any principal of or interest (including interest accrued on or
accruing after the commencement of any Insolvency or Liquidation Proceeding,
whether or not a claim for post-filing interest is allowed in such proceeding)
or premium on any Indebtedness, including any reimbursement obligation in
respect of any letter of credit or letter of credit guaranty, (b) any fees,
indemnification obligations, expense reimbursement obligations or other
liabilities payable under the documentation governing such Indebtedness, (c) any
obligation to post cash collateral in respect of letters of credit or letter of
credit guaranties and any other obligations and (d) with respect to any
Indebtedness constituting Senior Lender Claims, any Hedging Obligations owing to
any of the Senior Lenders holding such Senior Lender Claims or any affiliates
thereof.
"OFFICERS' CERTIFICATE" shall mean a certificate signed by any two of
the Chairman of the Board, the President, any Vice President, the Treasurer and
the Secretary of the Company.
"PLEDGE AGREEMENT" shall have the meaning set forth in the recitals.
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"PERSON" shall mean any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, entity or
other party, including any government and any political subdivision, agency or
instrumentality thereof.
"PLEDGED COLLATERAL" shall mean the Common Collateral in the
possession of the Intercreditor Agent (or its agents or bailees), to the extent
that possession thereof is necessary or effective to perfect a Lien thereon
under the Uniform Commercial Code.
"RECOVERY" shall have the meaning set forth in Section 6.4.
"REQUIRED LENDERS" shall mean, with respect to any Senior Credit
Agreement, those Senior Lenders the approval of which is required to approve an
amendment or modification of, termination or waiver of any provision of or
consent to any departure from such Senior Credit Agreement (or would be required
to effect such consent under this Agreement if such consent were treated as an
amendment of the Senior Credit Agreement).
"SECOND-PRIORITY LIEN" shall mean any Lien or any assets of the
Company or any other Grantor securing any Noteholder Claims.
"SECURITIES ACCOUNT" shall have the meaning set forth in the Uniform
Commercial Code.
"SECURITY AGREEMENT" shall have the meaning set forth in the recitals.
"SENIOR COLLATERAL DOCUMENTS" shall mean the Pledge Agreement, the
Security Agreement and any other agreement, document or instrument pursuant to
which a Lien is now or hereafter granted securing any Senior Lender Claims or
under which rights or remedies with respect to such Liens are at any time
governed.
"SENIOR CREDIT AGREEMENT" shall mean the Credit Agreement and any
other agreement governing any Future First-Lien Indebtedness.
"SENIOR LENDER CLAIMS" shall mean (a) all First-Lien Indebtedness
outstanding, including any Future First-Lien Indebtedness, and (b) all other
Obligations (not constituting Indebtedness under any such First-Lien
Indebtedness) with respect to First-Lien Indebtedness, including, without
limitation, all "Obligations" (as defined in the Senior Credit Agreement) and
all Senior Lender Hedging Obligations. Senior Lender Claims shall include all
interest and expenses accrued or accruing (or that would, absent the
commencement of an Insolvency or Liquidation Proceeding, accrue) after the
commencement of an Insolvency or Liquidation Proceeding in accordance with and
at the rate specified in the relevant Senior Lender Document whether or not the
claim for such interest or expenses is allowed as a claim in such Insolvency or
Liquidation Proceeding.
"SENIOR LENDER COLLATERAL" shall mean all of the assets of any
Grantor, whether real, personal or mixed, with respect to which a Lien is
granted as security for any Senior Lender Claim.
"SENIOR LENDER DOCUMENTS" shall mean the Senior Credit Agreement, the
Senior
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Collateral Documents and each of the other agreements, documents and instruments
(including each agreement, document or instrument providing for or evidencing a
Senior Lender Hedging Obligation) providing for, evidencing or securing any
Obligation under the Credit Agreement or any Future First-Lien Indebtedness and
any other related document or instrument executed or delivered pursuant to any
Senior Lender Document at any time or otherwise evidencing or securing any
Indebtedness arising under any Senior Lender Document.
"SENIOR LENDER HEDGING OBLIGATIONS" shall mean any Hedging Obligations
secured under the Senior Collateral Documents.
"SENIOR LENDERS" shall mean the Persons holding Senior Lender Claims,
including the Intercreditor Agent.
"SUBSIDIARY" shall mean any "Subsidiary" of the Company as defined in
the Indenture.
"TRUSTEE" shall mean The Bank of New York, in its capacity as trustee
under the Indenture and collateral agent under the Noteholder Collateral
Documents, and its permitted successors.
"UNIFORM COMMERCIAL CODE" or "UCC" shall mean the Uniform Commercial
Code as from time to time in effect in the State of New York.
1.2 Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include," "includes" and "including" shall
be deemed to be followed by the phrase "without limitation." The word "will"
shall be construed to have the same meaning and effect as the word "shall."
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified in accordance with this Agreement, (b) any
reference herein to any Person shall be construed to include such Person's
successors and assigns, (c) the words "herein," "hereof" and "hereunder," and
words of similar import, shall be construed to refer to this Agreement in its
entirety and not to any particular provision hereof, (d) all references herein
to Sections shall be construed to refer to Sections of this Agreement and (e)
the words "asset" and "property" shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.
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SECTION 2. LIEN PRIORITIES.
2.1 Subordination. Notwithstanding the date, time, manner or order of
filing or recordation of any document or instrument or grant, attachment or
perfection of any Liens granted to the Trustee or the Noteholders on the Common
Collateral or of any Liens granted to the Intercreditor Agent or the Senior
Lenders on the Common Collateral or on the Senior Lender Collateral and
notwithstanding any provision of the UCC, or any applicable law or the
Noteholder Documents or the Senior Lender Documents or any other circumstance
whatsoever, the Trustee, on behalf of itself and each Noteholder, hereby agrees
that: (a) any Lien on the Common Collateral securing any Senior Lender Claims
now or hereafter held by or on behalf of the Intercreditor Agent or any Senior
Lenders or any agent or trustee therefor regardless of how acquired, whether by
grant, statute, operation of law, subrogation or otherwise, shall have priority
over and be senior in all respects and prior to any Lien on the Common
Collateral securing any Noteholder Claims and (b) any Lien on the Common
Collateral securing any Noteholder Claims now or hereafter held by or on behalf
of the Trustee or any Noteholders or any agent or trustee therefor regardless of
how acquired, whether by grant, statute, operation of law, subrogation or
otherwise, shall be junior and subordinate in all respects to all Liens on the
Common Collateral securing any Senior Lender Claims. All Liens on the Common
Collateral securing any Senior Lender Claims shall be and remain senior in all
respects and prior to all Liens on the Common Collateral securing any Noteholder
Claims for all purposes, whether or not such Liens securing any Senior Lender
Claims are subordinated to any Lien securing any other obligation of the
Company, any other Grantor or any other Person.
2.2 Prohibition on Contesting Liens. Each of the Trustee, for itself
and on behalf of each Noteholder, and the Intercreditor Agent, for itself and on
behalf of each Senior Lender, agrees that it shall not (and hereby waives any
right to) contest or support any other Person in contesting, in any proceeding
(including any Insolvency or Liquidation Proceeding), the validity, perfection,
priority, validity or enforceability of (a) a Lien securing any Senior Lender
Claims held (or purported to be held) by or on behalf of the Intercreditor Agent
or any of the Senior Lenders or any agent or trustee therefor in any Senior
Lender Collateral or (b) a Lien securing any Noteholder Claims held (or
purported to be held) by or on behalf of any Noteholder in the Common
Collateral, as the case may be; provided, however, that nothing in this
Agreement shall be construed to prevent or impair the rights of the
Intercreditor Agent or any Senior Lender to enforce this Agreement (including
the priority of the Liens securing the Senior Lender Claims as provided in
Section 2.1) or any of the Senior Lender Documents.
2.3 No New Liens. So long as the Discharge of Senior Lender Claims
has not occurred, the parties hereto agree that, after the date hereof, if the
Trustee shall hold any Lien on any assets of the Company or any other Grantor
securing any Noteholder Claims that are not also subject to the first-priority
Lien in respect of the Senior Lender Claims under the Senior Lender Documents,
the Trustee, upon demand by the Intercreditor Agent or the Company, will assign
or release such Lien to the Intercreditor Agent as security for the Senior
Lender Claims (in the case of an assignment, the Trustee may retain a junior
lien on such assets subject to the terms hereof).
2.4 Perfection of Liens. Neither the Intercreditor Agent, the Trustee
nor the Senior Lenders shall be responsible for perfecting and maintaining the
perfection of Liens with respect to the Common Collateral for the benefit of the
Trustee and the Noteholders. The
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provisions of this Intercreditor Agreement are intended solely to govern the
respective Lien priorities as between the Senior Lenders and the Noteholders and
shall not impose on the Intercreditor Agent, the Trustee, the Noteholders or the
Senior Lenders or any agent or trustee therefor any obligations in respect of
the disposition of proceeds of any Common Collateral which would conflict with
prior perfected claims therein in favor of any other Person or any order or
decree of any court or governmental authority or any applicable law.
SECTION 3. ENFORCEMENT.
3.1 Exercise of Remedies.
(a) So long as the Discharge of Senior Lender Claims has not occurred,
whether or not any Insolvency or Liquidation Proceeding has been commenced by or
against the Company or any other Grantor, (i) neither the Trustee nor any
Noteholder will (x) exercise or seek to exercise any rights or remedies
(including setoff) with respect to any Common Collateral in respect of any
Noteholder Claims, institute any action or proceeding with respect to such
rights or remedies (including any action of foreclosure), (y) contest, protest
or object to any foreclosure proceeding or action brought with respect to the
Common Collateral by the Intercreditor Agent or any Senior Lender in respect of
the Senior Lender Claims, the exercise of any right by the Intercreditor Agent
or any Senior Lender (or any agent or sub-agent on their behalf) in respect of
the Senior Lender Claims under any lockbox agreement, control agreement,
landlord waiver or bailee's letter or similar agreement or arrangement, or other
comparable Noteholder Collateral Document, to which the Trustee or any
Noteholder either is a party or may have rights as a third party beneficiary, or
any other exercise by any such party, of any rights and remedies relating to the
Common Collateral under the Senior Lender Documents or otherwise in respect of
Senior Lender Claims, or (z) object to the forbearance by the Senior Lenders
from bringing or pursuing any foreclosure proceeding or action or any other
exercise of any rights or remedies relating to the Common Collateral in respect
of Senior Lender Claims and (ii) except as otherwise provided herein, the
Intercreditor Agent and the Senior Lenders shall have the exclusive right to
enforce rights, exercise remedies (including setoff and the right to credit bid
their debt) and make determinations regarding the release, disposition or
restrictions with respect to the Common Collateral without any consultation with
or the consent of the Trustee or any Noteholder; provided, however, that (A) in
any Insolvency or Liquidation Proceeding commenced by or against the Company or
any other Grantor, the Trustee may file a claim or statement of interest with
respect to the Noteholder Claims and (B) the Trustee may take any action (not
adverse to the prior Liens on the Common Collateral securing the Senior Lender
Claims, or the rights of the Intercreditor Agent or the Senior Lenders to
exercise remedies in respect thereof) in order to create, prove, perfect,
preserve or protect (but not enforce) its rights in, and perfection and priority
of its Lien on, the Common Collateral subject to the limitations set forth in
Section 6.3. In exercising rights and remedies with respect to the Senior Lender
Collateral, the Intercreditor Agent and the Senior Lenders may enforce the
provisions of the Senior Lender Documents and exercise remedies thereunder, all
in such order and in such manner as they may determine in the exercise of their
sole discretion. Such exercise and enforcement shall include the rights of an
agent appointed by them to sell or otherwise dispose of Common Collateral upon
foreclosure, to incur expenses in connection with such sale or disposition, and
to exercise all the rights and remedies of a secured lender under the Uniform
Commercial Code of any applicable jurisdiction and of a secured creditor under
Bankruptcy
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Laws of any applicable jurisdiction.
(b) So long as the Discharge of Senior Lender Claims has not occurred,
the Trustee, on behalf of itself and each Noteholder, agrees that it will not
take or receive any Common Collateral or any proceeds of Common Collateral in
connection with the exercise of any right or remedy (including setoff) with
respect to any Common Collateral in respect of Noteholder Claims. Without
limiting the generality of the foregoing, unless and until the Discharge of
Senior Lender Claims has occurred, except as expressly provided in the proviso
in clause (ii) of Section 3.1(a), the sole right of the Trustee and the
Noteholders with respect to the Common Collateral is to hold a Lien on the
Common Collateral in respect of Noteholder Claims pursuant to the Noteholder
Documents for the period and to the extent granted therein and to receive a
share of the proceeds thereof, if any, after the Discharge of the Senior Lender
Claims has occurred.
(c) Subject to the proviso in clause (ii) of Section 3.1(a), (i) the
Trustee, for itself and on behalf of each Noteholder, agrees that neither the
Trustee nor any Noteholder will take any action that would hinder any exercise
of remedies undertaken by the Intercreditor Agent or the Senior Lenders with
respect to the Common Collateral under the Senior Loan Documents, including any
sale, lease, exchange, transfer or other disposition of the Common Collateral,
whether by foreclosure or otherwise, and (ii) the Trustee, for itself and on
behalf of each Noteholder, hereby waives any and all rights it or any Noteholder
may have as a junior lien creditor or otherwise to object to the manner in which
the Intercreditor Agent or the Senior Lenders seek to enforce or collect the
Senior Lender Claims or the Liens granted in any of the Senior Lender
Collateral, regardless of whether any action or failure to act by or on behalf
of the Intercreditor Agent or Senior Lenders is adverse to the interests of the
Noteholders.
(d) The Trustee hereby acknowledges and agrees that no covenant,
agreement or restriction contained in any Noteholder Document shall be deemed to
restrict in any way the rights and remedies of the Intercreditor Agent or the
Senior Lenders with respect to the Senior Lender Collateral as set forth in this
Agreement and the Senior Lender Documents.
3.2 Cooperation. Subject to the proviso in clause (ii) of Section
3.1(a), the Trustee, on behalf of itself and each Noteholder, agrees that,
unless and until the Discharge of Senior Lender Claims has occurred, it will not
commence, or join with any Person (other than the Senior Lenders and the
Intercreditor Agent upon the request thereof) in commencing, any enforcement,
collection, execution, levy or foreclosure action or proceeding with respect to
any Lien held by it in the Common Collateral under any of the Noteholder
Documents or otherwise in respect of the Noteholder Claims.
SECTION 4. PAYMENTS.
4.1 Application of Proceeds. After an event of default under any
First-Lien Indebtedness has occurred with respect to which the Intercreditor
Agent has provided written notice to the Trustee, and until such event of
default is cured or waived, so long as the Discharge of Senior Lender Claims has
not occurred, the Common Collateral or proceeds thereof received in connection
with the sale or other disposition of, or collection on, such Common Collateral
upon the exercise of remedies, shall be applied by the Intercreditor Agent to
the Senior Lender
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Claims in such order as specified in the relevant Senior Lender Documents until
the Discharge of Senior Lender Claims has occurred. Upon the Discharge of the
Senior Lender Claims, the Intercreditor Agent shall deliver promptly to the
Trustee any Common Collateral or proceeds thereof held by it in the same form as
received, with any necessary endorsements or as a court of competent
jurisdiction may otherwise direct to be applied by the Trustee to the Noteholder
Claims in such order as specified in the relevant Noteholder Documents.
4.2 Payments Over. Any Common Collateral or proceeds thereof received
by the Trustee or any Noteholder in connection with the exercise of any right or
remedy (including setoff) relating to the Common Collateral in contravention of
this Agreement shall be segregated and held in trust for the benefit of and
forthwith paid over to the Intercreditor Agent for the benefit of the Senior
Lenders in the same form as received, with any necessary endorsements or as a
court of competent jurisdiction may otherwise direct. The Intercreditor Agent is
hereby authorized to make any such endorsements as agent for the Trustee or any
such Noteholder. This authorization is coupled with an interest and is
irrevocable.
SECTION 5. OTHER AGREEMENTS.
5.1 Releases.
(a) If, at any time, any Grantor or the holder of any Senior Lender
Claim delivers notice to the Trustee that any specified Common Collateral
(including, without limitation, all or substantially all of the equity interests
of a Grantor or any of its Subsidiaries) is sold, transferred or otherwise
disposed of:
(i) by the owner of such Common Collateral, other than to another
Grantor or to any subsidiary of the Company, in a transaction permitted
under the Senior Credit Agreement and the Indenture; or
(ii) during the existence of any Event of Default under (and as
defined in) the Senior Credit Agreement to the extent the Intercreditor
Agent has consented to such sale, transfer or disposition;
then (whether or not any Insolvency or Liquidation Proceeding is pending at the
time) the Liens in favor of the Trustee upon such Collateral will automatically
be released and discharged as and when, but only to the extent, such Liens on
such Collateral securing Senior Lender Claims are released and discharged. At
the sole discretion of the Intercreditor Agent, upon delivery to the Trustee of
a notice from the Intercreditor Agent stating that any release of Liens securing
or supporting the Senior Lender Claims has become effective (or shall become
effective upon Trustee's release) pursuant to the first sentence of this clause
(a), the Trustee will promptly authorize or execute and deliver such
instruments, releases, termination statements or other documents provided to it
confirming such release on customary terms. In the case of the sale of all or
substantially all of the capital stock of a Grantor or any of its Subsidiaries,
the guarantee in favor of the Noteholders, if any, made by such Grantor or
Subsidiary will automatically be released and discharged as and when, but only
to the extent, the guarantee by such Grantor or Subsidiary of Senior Lender
Claims is released and discharged.
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(b) The Trustee, for itself and on behalf of each Noteholder, hereby
irrevocably constitutes and appoints the Intercreditor Agent and any officer or
agent of the Intercreditor Agent, with full power of substitution, as its true
and lawful attorney-in-fact with full irrevocable power and authority in the
place and stead of the Trustee or such holder or in the Intercreditor Agent's
own name, from time to time in the Intercreditor Agent's discretion, for the
purpose of carrying out the terms of this Section 5.1, to take any and all
appropriate action and to execute any and all documents and instruments that may
be necessary or desirable to accomplish the purposes of this Section 5.1,
including any termination statements, endorsements or other instruments of
transfer or release.
(c) Unless and until the Discharge of Senior Lender Claims has
occurred, the Trustee, for itself and on behalf of each Noteholder, hereby
consents to the application, whether prior to or after a default, of Deposit
Account Collateral or proceeds of Common Collateral to the repayment of Senior
Lender Claims pursuant to the Senior Credit Agreement; provided that nothing in
this Section 5.1(c) shall be construed to prevent or impair the rights of the
Trustee or the Noteholders to receive proceeds in connection with the Noteholder
Claims not otherwise in contravention of this Agreement.
5.2 Insurance. Subject to the rights of the Grantors under the Senior
Lender Documents and the Noteholder Documents, unless and until the Discharge of
Senior Lender Claims has occurred, the Intercreditor Agent and the Senior
Lenders shall have the sole and exclusive right, subject to the rights of the
Grantors under the Senior Lender Documents, to adjust settlement for any
insurance policy covering the Common Collateral in the event of any loss
thereunder and to approve any award granted in any condemnation or similar
proceeding affecting the Common Collateral. Subject to the rights of the
Grantors to retain insurance proceeds under the Senior Lender Documents and the
Noteholder Documents, unless and until the Discharge of Senior Lender Claims has
occurred, all proceeds of any such policy and any such award if in respect of
the Common Collateral shall be paid (a) first, prior to the occurrence of the
Discharge of Senior Lender Claims, to the Intercreditor Agent for the benefit of
Senior Lenders pursuant to the terms of the Senior Lender Documents, (b) second,
after the occurrence of the Discharge of Senior Lender Claims, to the Trustee
for the benefit of the Noteholders pursuant to the terms of the applicable
Noteholder Documents and (c) third, if no Noteholder Obligations are
outstanding, to the owner of the subject property, such other person as may be
entitled thereto or as a court of competent jurisdiction may otherwise direct.
If the Trustee or any Noteholder shall, at any time, receive any proceeds of any
such insurance policy or any such award in contravention of this Agreement, it
shall pay such proceeds over to the Intercreditor Agent in accordance with the
terms of Section 4.2.
5.3 Amendments to Noteholder Collateral Documents.
(a) Without the prior written consent of the Intercreditor Agent and
the Required Lenders, no Noteholder Collateral Document may be amended,
supplemented or otherwise modified or entered into to the extent such amendment,
supplement or modification, or the terms of any new Noteholder Collateral
Document, would be prohibited by or inconsistent with any of the terms of this
Agreement. The Trustee agrees that each Noteholder Collateral Document shall
include the following language (or language to similar effect approved by the
Intercreditor Agent):
11
"Notwithstanding anything herein to the contrary, (i) the liens and
security interests granted to the Trustee pursuant to this Agreement are
expressly subject and subordinate to the liens and security interests
granted to ING Capital LLC, as administrative agent (and its permitted
successors and assigns), for the benefit of the credit parties referred to
below, pursuant to the Credit Agreement and related security documents
dated as of September 9, 2004 (as further amended, restated, refinanced,
replaced, supplemented or otherwise modified from time to time), by and
among Securus Technologies, Inc., ING Capital LLC, as agent, the lenders
and the other credit parties party thereto and the other parties party
thereto and (ii) the exercise of any right or remedy by the Trustee
hereunder is subject to the limitations and provisions of the Intercreditor
Agreement, dated as of September 9, 2004 (as amended, restated,
supplemented or otherwise modified from time to time, the "Intercreditor
Agreement"), by and among ING Capital LLC, as Intercreditor Agent, The Bank
of New York, as Trustee, Securus Technologies, Inc. and the subsidiaries
party thereto. In the event of any conflict between the terms of the
Intercreditor Agreement and the terms of this Agreement, the terms of the
Intercreditor Agreement shall govern."
(b) In the event that the Intercreditor Agent or the Senior Lenders
enter into any amendment, waiver or consent in respect of any of the Senior
Collateral Documents with respect to the Common Collateral for the purpose of
adding to, or deleting from, or waiving or consenting to any departures from any
provisions of, any Senior Collateral Document with respect to the Common
Collateral or changing in any manner the rights of the Intercreditor Agent, the
Senior Lenders, the Company or any other Grantor thereunder (other than the
release of Liens in Common Collateral, which, when aggregated with all other
such releases of Liens in Common Collateral made pursuant to this clause (b),
would result in a material diminution in the value of the Common Collateral),
then such amendment, waiver or consent shall apply automatically to any
comparable provision of the Comparable Noteholder Collateral Document without
the consent of the Trustee or any Noteholder and without any action by the
Trustee, the Company or any other Grantor; provided, however, that any such
amendment, waiver or consent does not disproportionately affect the rights of
the Noteholders and not the other secured creditors in a like or similar manner.
Notwithstanding the foregoing, no such amendment, waiver or consent shall have
the effect of releasing assets subject to the Lien of the Noteholder Collateral
Document, except to the extent that a release of such Lien is permitted by the
Indenture. For the avoidance of doubt, this clause (b) shall be subject to the
provisions of 5.5(g) hereof.
5.4 Rights As Unsecured Creditors. Notwithstanding anything to the
contrary in this Agreement, the Trustee and the Noteholders may exercise rights
and remedies as an unsecured creditor against the Company or any Subsidiary that
has guaranteed the Noteholder Claims in accordance with the terms of the
Noteholder Documents and applicable law. Nothing in this Agreement shall
prohibit the receipt by the Trustee or any Noteholder of the required payments
of interest and principal so long as such receipt is not the direct or indirect
result of the exercise by the Trustee or any Noteholder of rights or remedies as
a secured creditor in respect of Common Collateral or enforcement in
contravention of this Agreement of any Lien in respect of Noteholder Claims held
by any of them. In the event the Trustee or any Noteholder becomes a judgment
lien creditor in respect of Common Collateral as a result of its enforcement of
its rights as an unsecured creditor in respect of Noteholder Claims, such
judgment lien shall be
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subordinated to the Liens securing Senior Lender Claims on the same basis as the
other Liens securing the Noteholder Claims are so subordinated to such Liens
securing Senior Lender Claims under this Agreement. Nothing in this Agreement
impairs or otherwise adversely affects any rights or remedies the Intercreditor
Agent or the Senior Lenders may have with respect to the Senior Lender
Collateral.
5.5 Bailee for Perfection.
(a) The Intercreditor Agent agrees to hold the Pledged Collateral that
is part of the Common Collateral in its possession or control (or in the
possession or control of its agents or bailees) as bailee for the Trustee and
any assignee solely for the purpose of perfecting the security interest granted
in such Pledged Collateral pursuant to the Noteholder Security Agreement,
subject to the terms and conditions of this Section 5.5.
(b) The Intercreditor Agent agrees that if it exercises its right
under the Security Agreement to hold the Deposit Account Collateral, the
Intercreditor Agent shall hold such Deposit Account Collateral as bailee for the
Trustee and any assignee solely for the purpose of perfecting the security
interest granted in such Deposit Account Collateral pursuant to the Noteholder
Security Agreement, subject to the terms and conditions of this Section 5.5.
(c) In the event that the Intercreditor Agent (or its agent or
bailees) has Lien filings against Intellectual Property that is part of the
Common Collateral that are necessary for the perfection of Liens in such Common
Collateral, the Intercreditor Agent agrees to hold such Liens as bailee for the
Trustee and any assignee solely for the purpose of perfecting the security
interest granted in such Liens pursuant to the Noteholder Security Agreement,
subject to the terms and conditions of this Section 5.5.
(d) Except as otherwise specifically provided herein (including,
without limitation, Sections 3.1 and 4.1), until the Discharge of Senior Lender
Claims has occurred, the Intercreditor Agent shall be entitled to deal with the
Pledged Collateral in accordance with the terms of the Senior Lender Documents
as if the Liens under the Noteholder Collateral Documents did not exist. The
rights of the Trustee and the Noteholders with respect to such Pledged
Collateral shall at all times be subject to the terms of this Agreement.
(e) The Intercreditor Agent shall have no obligation whatsoever to the
Trustee or any Noteholder to assure that the Pledged Collateral is genuine or
owned by the Grantors or to protect or preserve rights or benefits of any Person
or any rights pertaining to the Common Collateral except as expressly set forth
in this Section 5.5. The duties or responsibilities of the Intercreditor Agent
under this Section 5.5 shall be limited solely to holding the Pledged Collateral
as bailee for the Trustee for purposes of perfecting the Lien held by the
Trustee.
(f) The Intercreditor Agent shall not have by reason of the Noteholder
Collateral Documents or this Agreement or any other document a fiduciary
relationship in respect of the Trustee or any Noteholder and the Trustee and the
Noteholders hereby waive and release the Intercreditor Agent from all claims and
liabilities arising pursuant to the Intercreditor Agent's role under this
Section 5.5, as agent and bailee with respect to the Common Collateral.
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(g) Upon the Discharge of Senior Lender Claims, the Intercreditor
Agent shall deliver to the Trustee, to the extent that it is legally permitted
to do so, the remaining Pledged Collateral (if any) and the Deposit Account
Collateral (if any) together with any necessary endorsements (or otherwise allow
the Trustee to obtain control of such Pledged Collateral and Deposit Account
Collateral) or as a court of competent jurisdiction may otherwise direct. The
Intercreditor Agent shall also execute and deliver to the Trustee assignments in
favor of the Trustee for the benefit of the Noteholders, of all of the
Intercreditor Agent's interests in any landlord waivers and moneys constituting
Common Collateral due or to become due under "Government Contracts" as described
under Section (6)(g) of the Noteholder Security Agreement held by the
Intercreditor Agent in connection with any Common Collateral. The Company shall
take such further action as is required to effectuate the transfer contemplated
hereto and shall indemnify the Intercreditor Agent for loss or damage suffered
by the Intercreditor Agent as a result of such transfer except for loss or
damage suffered by the Intercreditor Agent as a result of its own willful
misconduct, gross negligence or bad faith. The Intercreditor Agent has no
obligation to follow instructions from the Trustee in contravention of this
Agreement.
(h) Neither the Intercreditor Agent nor the Senior Lenders shall be
required to marshal any present or future collateral security for the Company's
or its Subsidiaries' obligations to the Intercreditor Agent or the Senior
Lenders under the Senior Credit Agreement or the Senior Collateral Documents or
any assurance of payment in respect thereof or to resort to such collateral
security or other assurances of payment in any particular order, and all of
their rights in respect of such collateral security or any assurance of payment
in respect thereof shall be cumulative and in addition to all other rights,
however existing or arising.
5.6 When Discharge of Senior Lender Claims Deemed to Not Have
Occurred. If, at any time after the Discharge of Senior Lender Claims has
occurred, the Company incurs and designates any Future First-Lien Indebtedness,
then such Discharge of Senior Lender Claims shall automatically be deemed not to
have occurred for all purposes of this Agreement (other than with respect to any
actions taken prior to the date of such designation as a result of the
occurrence of such first Discharge of Senior Lender Claims), and the applicable
agreement governing such Future First-Lien Indebtedness shall automatically be
treated as a Senior Credit Agreement for all purposes of this Agreement,
including for purposes of the Lien priorities and rights in respect of Common
Collateral set forth herein and the granting by the Intercreditor Agent of
amendments, waivers and consents hereunder. Upon receipt of notice of such
designation (including the identity of the new Intercreditor Agent), the Trustee
shall promptly (i) enter into such documents and agreements (at the expense of
the Company), including amendments or supplements to this Agreement, as the
Company or such new Intercreditor Agent shall reasonably request in writing in
order to provide the new Intercreditor Agent the rights of the Intercreditor
Agent contemplated hereby and (ii) to the extent then held by the Trustee,
deliver to the Intercreditor Agent the Pledged Collateral that is Common
Collateral together with any necessary endorsements (or otherwise allow such
Intercreditor Agent to obtain possession or control of such Pledged Collateral).
5.7 No Release If Event of Default. Notwithstanding any other
provisions contained in this Agreement, if an Event of Default (as defined in
the Indenture) exists on the date on which all First-Lien Indebtedness is repaid
in full and terminated (including all
14
commitments and letters of credit thereunder), the Second-Priority Liens on the
Noteholder Collateral securing the Notes will not be released, except to the
extent such Collateral or any portion thereof was disposed of in order to repay
the First-Lien Indebtedness secured by such Collateral, and thereafter the
Trustee will have the right to foreclose upon such Collateral.
SECTION 6. INSOLVENCY OR LIQUIDATION PROCEEDINGS.
6.1 Financing Issues. If the Company or any other Grantor shall be
subject to any Insolvency or Liquidation Proceeding and the Intercreditor Agent
shall desire to permit the use of cash collateral or to permit the Company or
any other Grantor to obtain financing under Section 363 or Section 364 of Title
11 of the United States Code or any similar provision in any Bankruptcy Law
("DIP FINANCING"), then the Trustee, on behalf of itself and each Noteholder,
agrees that it will raise no (a) objection to (and will not otherwise contest)
such use of cash collateral or DIP Financing and will not request adequate
protection or any other relief in connection therewith (except to the extent
permitted by the proviso in clause (ii) of Section 3.1(a) and Section 6.3) and,
to the extent the Liens securing the Senior Lender Claims under the Senior
Credit Agreement or, if no Senior Credit Agreement exists, under the other
Senior Lender Documents are subordinated to, or pari passu with, such DIP
Financing, will subordinate its Liens in the Common Collateral to such DIP
Financing (and all Obligations relating thereto) on the same basis as the other
Liens securing the Noteholder Claims are so subordinated to Liens securing
Senior Lender Claims under this Agreement, (b) objection to (and will not
otherwise contest) any motion for relief from the automatic stay or from any
injunction against foreclosure or enforcement in respect of Senior Lender Claims
made by Intercreditor Agent or any holder of Senior Lender Claims, (c) objection
to (and will not otherwise contest) any lawful exercise by any holder of Senior
Lender Claims of the right to credit bid Senior Lender Claims at any sale in
foreclosure of Senior Lender Collateral, (d) objection to (and will not
otherwise contest) any other request for judicial relief made in any court by
any holder of Senior Lender Claims relating to the lawful enforcement of any
Lien on Senior Lender Collateral or (e) objection to (and will not otherwise
contest) any motion or other pleading seeking an order or entry of an order
relating to a sale of assets of any Grantor for which the Intercreditor Agent
has consented that provides, to the extent the sale is to be free and clear of
Liens, that the Liens securing the Senior Lender Claims and the Noteholder
Claims will attach to the proceeds of the sale on the same basis of priority as
the Liens securing the Senior Lender Collateral rank to the Liens securing the
Noteholder Collateral in accordance with this Agreement.
6.2 Relief from the Automatic Stay. Until the Discharge of Senior
Lender Claims has occurred, the Trustee, on behalf of itself and each
Noteholder, agrees that none of them shall seek relief from the automatic stay
or any other stay or otherwise seek permission or authorization to take any
action against the Common Collateral in any Insolvency or Liquidation Proceeding
in respect of the Common Collateral, without the prior written consent of the
Intercreditor Agent and the Required Lenders.
6.3 Adequate Protection. The Trustee, on behalf of itself and each
Noteholder, agrees that none of them shall contest (or support any other Person
contesting) (a) any request by the Intercreditor Agent or the Senior Lenders for
adequate protection, (b) any objection by the Intercreditor Agent or the Senior
Lenders to any motion, relief, action or proceeding based on the Intercreditor
Agent's or the Senior Lenders' claiming a lack of adequate
15
protection or (c) any DIP Financing or other credit extension provided by any
Senior Lender that is secured by Liens on the Common Collateral that are pari
passu with, or senior to, the Liens securing the Senior Lender claims.
Notwithstanding the foregoing, in any Insolvency or Liquidation Proceeding, (i)
if the Senior Lenders (or any subset thereof) are granted adequate protection in
the form of replacement liens on the Common Collateral in connection with any
DIP Financing or use of cash collateral under Section 363 or Section 364 of
Title 11 of the United States Code or any similar Bankruptcy Law, then the
Trustee, on behalf of itself and any Noteholder, may seek or request adequate
protection in the form of a junior replacement Lien on such Common Collateral,
which Lien is subordinated to the Liens securing the Senior Lender Claims and
such DIP Financing (and all Obligations relating thereto) on the same basis as
the other Liens securing the Noteholder Claims are so subordinated to the Liens
securing Senior Lender Claims under this Agreement and (ii) in the event the
Trustee, on behalf of itself and each Noteholder, seeks or requests adequate
protection and such adequate protection is granted in the form of additional
collateral, then the Trustee, on behalf of itself or each Noteholder, agrees
that the Intercreditor Agent shall also be granted a senior Lien on such
additional collateral as security for the Senior Lender Claims and any such DIP
Financing and that any Lien on such additional collateral securing the
Noteholder Claims shall be subordinated to the Liens on such collateral securing
the Senior Lender Claims and any such DIP Financing (and all Obligations
relating thereto) and any other Liens granted to the Senior Lenders as adequate
protection on the same basis as the other Liens securing the Noteholder Claims
are so subordinated to such Liens securing Senior Lender Claims under this
Agreement.
6.4 Preference Issues. If any Senior Lender is required in any
Insolvency or Liquidation Proceeding or otherwise to turn over or otherwise pay
to the estate of the Company or any other Grantor (or any trustee, receiver or
similar person therefor), because the payment of such amount was declared to be
fraudulent or preferential in any respect or for any other reason, any amount (a
"RECOVERY"), whether received as proceeds of security, enforcement of any right
of setoff or otherwise, then the Senior Lender Claims shall be reinstated to the
extent of such Recovery and deemed to be outstanding as if such payment had not
occurred. If this Agreement shall have been terminated prior to such Recovery,
this Agreement shall be reinstated in full force and effect, and such prior
termination shall not diminish, release, discharge, impair or otherwise affect
the obligations of the parties hereto.
6.5 Application. This Agreement shall be applicable prior to and
after the commencement of any Insolvency or Liquidation Proceeding. All
references herein to any Grantor shall apply to any trustee for such Person and
such Person as debtor in possession. The relative rights as to the Common
Collateral and proceeds thereof shall continue after the filing thereof on the
same basis as prior to the date of the petition, subject to any court order
approving the financing of, or use of cash collateral by, any Grantor.
6.6 506(c) Claims. Until the Discharge of Senior Lender Claims has
occurred, the Trustee, on behalf of itself and each Noteholder, will not assert
or enforce any claim under Section 506(c) of the United States Bankruptcy Code
senior to or on a parity with the Liens securing the Senior Lender Claims for
costs or expenses of preserving or disposing of any Common Collateral.
16
SECTION 7. RELIANCE; WAIVERS; ETC.
7.1 Reliance. The consent by the Senior Lenders to the execution and
delivery of the Noteholder Documents to which the Senior Lenders have consented
and all loans and other extensions of credit made or deemed made on and after
the date hereof by the Senior Lenders to the Company or any Subsidiary shall be
deemed to have been given and made in reliance upon this Agreement. The Trustee,
on behalf of itself and each Noteholder, acknowledges that it and the
Noteholders have, independently and without reliance on the Intercreditor Agent
or any Senior Lender, and based on documents and information deemed by them
appropriate, made their own credit analysis and decision to enter into the
Indenture, this Agreement and the transactions contemplated hereby and thereby
and they will continue to make their own credit decision in taking or not taking
any action under the Indenture or this Agreement.
7.2 No Warranties or Liability. The Trustee, on behalf of itself and
each Noteholder, acknowledges and agrees that neither the Intercreditor Agent
nor any Senior Lender has made any express or implied representation or
warranty, including with respect to the execution, validity, legality,
completeness, collectibility or enforceability of any of the Senior Lender
Documents, the ownership of any Common Collateral or the perfection or priority
of any Liens thereon. The Senior Lenders will be entitled to manage and
supervise their respective loans and extensions of credit under the Senior
Lender Documents in accordance with law and as they may otherwise, in their sole
discretion, deem appropriate, and the Senior Lenders may manage their loans and
extensions of credit without regard to any rights or interests that the Trustee
or any of the Noteholders have in the Common Collateral or otherwise, except as
otherwise provided in this Agreement. Neither the Intercreditor Agent nor any
Senior Lender shall have any duty to the Trustee or any Noteholder to act or
refrain from acting in a manner that allows, or results in, the occurrence or
continuance of an event of default or default under any agreements with the
Company or any Subsidiary thereof (including the Noteholder Documents),
regardless of any knowledge thereof that they may have or be charged with.
Except as expressly set forth in this Intercreditor Agreement, the Intercreditor
Agent, the Senior Lenders, the Trustee and the Noteholders have not otherwise
made to each other, nor do they hereby make to each other, any warranties,
express or implied, nor do they assume any liability to each other with respect
to (a) the enforceability, validity, value or collectibility of any of the
Noteholder Claims, the Senior Lender Claims or any guarantee or security which
may have been granted to any of them in connection therewith, (b) the Company's
title to or right to transfer any of the Common Collateral or (c) any other
matter except as expressly set forth in this Intercreditor Agreement.
7.3 Obligations Unconditional. All rights, interests, agreements and
obligations of the Intercreditor Agent and the Senior Lenders, and the Trustee
and the Noteholders, respectively, hereunder shall remain in full force and
effect irrespective of:
(a) any lack of validity or enforceability of any Senior Lender
Documents or any Noteholder Documents;
(b) any change in the time, manner or place of payment of, or in any
other terms of, all or any of the Senior Lender Claims or Noteholder Claims, or
any amendment or
17
waiver or other modification, including any increase in the amount thereof,
whether by course of conduct or otherwise, of the terms of the Senior Credit
Agreement or any other Senior Lender Document or of the terms of the Indenture
or any other Noteholder Document;
(c) any exchange of any security interest in any Common Collateral or
any other collateral, or any amendment, waiver or other modification, whether in
writing or by course of conduct or otherwise, of all or any of the Senior Lender
Claims or Noteholder Claims or any guarantee thereof;
(d) the commencement of any Insolvency or Liquidation Proceeding in
respect of the Company or any other Grantor; or
(e) any other circumstances that otherwise might constitute a defense
available to, or a discharge of, the Company or any other Grantor in respect of
the Senior Lender Claims, or of the Trustee or any Noteholder in respect of this
Agreement.
SECTION 8. MISCELLANEOUS.
8.1 Conflicts. Subject to Section 8.19, in the event of any conflict
between the provisions of this Agreement and the provisions of any Senior Lender
Document or any Noteholder Document, the provisions of this Agreement shall
govern.
8.2 Continuing Nature of this Agreement; Severability. Subject to
Section 6.4 hereof, this Agreement shall continue to be effective until the
Discharge of Senior Lender Claims shall have occurred. This is a continuing
agreement of lien subordination and the Senior Lenders may continue, at any time
and without notice to the Trustee or any Noteholder, to extend credit and other
financial accommodations and lend monies to or for the benefit of the Company or
any other Grantor constituting Senior Lender Claims in reliance hereon. The
terms of this Agreement shall survive, and shall continue in full force and
effect, in any Insolvency or Liquidation Proceeding. Any provision of this
Agreement that is prohibited or unenforceable in any jurisdiction shall not
invalidate the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
8.3 Amendments; Waivers. No amendment, modification or waiver of any
of the provisions of this Agreement by the Trustee or the Intercreditor Agent
shall be deemed to be made unless the same shall be in writing signed on behalf
of the party making the same or its authorized agent (and notice of any such
amendment, modification or waiver shall be delivered to the Company in
accordance with the provisions of Section 8.8) and each waiver, if any, shall be
a waiver only with respect to the specific instance involved and shall in no way
impair the rights of the parties making such waiver or the obligations of the
other parties to such party in any other respect or at any other time. The
Company and the other Grantors shall not have any right to consent to or approve
any amendment, modification or waiver of any provision of this Agreement except
to the extent their rights are affected.
8.4 Information Concerning Financial Condition of the Company and the
Subsidiaries. The Intercreditor Agent, the Senior Lenders and the Noteholders
shall each be
18
responsible for keeping themselves informed of (a) the financial condition of
the Company and the Subsidiaries and all endorsers and/or guarantors of the
Noteholder Claims or the Senior Lender Claims and (b) all other circumstances
bearing upon the risk of nonpayment of the Noteholder Claims or the Senior
Lender Claims. The Intercreditor Agent, the Senior Lenders, the Trustee and the
Noteholders shall have no duty to advise any other party hereunder of
information known to it or them regarding such condition or any such
circumstances or otherwise. In the event that the Intercreditor Agent, any
Senior Lender, the Trustee or any Noteholder, in its or their sole discretion,
undertakes at any time or from time to time to provide any such information to
any other party, it or they shall be under no obligation (w) to make, and the
Intercreditor Agent, the Senior Lenders, the Trustee and the Noteholders shall
not make, any express or implied representation or warranty, including with
respect to the accuracy, completeness, truthfulness or validity of any such
information so provided, (x) to provide any additional information or to provide
any such information on any subsequent occasion, (y) to undertake any
investigation or (z) to disclose any information that, pursuant to accepted or
reasonable commercial finance practices, such party wishes to maintain
confidential or is otherwise required to maintain confidential.
8.5 Subrogation. The Trustee, on behalf of itself and each
Noteholder, hereby waives any rights of subrogation it may acquire as a result
of any payment hereunder until the Discharge of Senior Lender Claims has
occurred.
8.6 Application of Payments. Except as otherwise provided herein, all
payments received by the Senior Lenders may be applied, reversed and reapplied,
in whole or in part, to such part of the Senior Lender Claims as the Senior
Lenders, in their sole discretion, deem appropriate, consistent with the terms
of the Senior Lender Documents. Except as otherwise provided herein, the
Trustee, on behalf of itself and each Noteholder, assents to any such extension
or postponement of the time of payment of the Senior Lender Claims or any part
thereof and to any other indulgence with respect thereto, to any substitution,
exchange or release of any security that may at any time secure any part of the
Senior Lender Claims and to the addition or release of any other Person
primarily or secondarily liable therefor.
8.7 Consent to Jurisdiction; Waivers. The parties hereto consent to
the jurisdiction of any state or federal court located in New York, New York,
and consent that all service of process may be made by registered mail directed
to such party as provided in Section 8.8 for such party. Service so made shall
be deemed to be completed three days after the same shall be posted as
aforesaid. The parties hereto waive any objection to any action instituted
hereunder in any such court based on forum non conveniens, and any objection to
the venue of any action instituted hereunder in any such court. Each of the
parties hereto waives any right it may have to trial by jury in respect of any
litigation based on, or arising out of, under or in connection with this
Agreement, or any course of conduct, course of dealing, verbal or written
statement or action of any party hereto in connection with the subject matter
hereof.
8.8 Notices. All notices to the Noteholders and the Senior Lenders
permitted or required under this Agreement may be sent to the Trustee and the
Intercreditor Agent as provided in the Indenture and the Credit Agreement,
respectively. Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telecopied, electronically mailed or sent by
19
courier service or U.S. mail and shall be deemed to have been given when
delivered in person or by courier service, upon receipt of a telecopy or
electronic mail or upon receipt via U.S. mail (registered or certified, with
postage prepaid and properly addressed). For the purposes hereof, the addresses
of the parties hereto shall be as set forth below each party's name on the
signature pages hereto, or, as to each party, at such other address as may be
designated by such party in a written notice to all of the other parties. The
Intercreditor Agent hereby agrees to promptly notify the Trustee upon payment in
full in cash of all Indebtedness under the Credit Agreement (except for
contingent indemnities and cost and reimbursement obligations to the extent no
claim has been made).
8.9 Further Assurances. Each of the Trustee, on behalf of itself and
each Noteholder, the Intercreditor Agent, on behalf of itself and each Senior
Lender, the Company and each Subsidiary agrees that each of them shall take such
further action and shall execute and deliver to the Intercreditor Agent and the
Senior Lenders such additional documents and instruments (in recordable form, if
requested) as the Intercreditor Agent or the Senior Lenders may reasonably
request to effectuate the terms of and the lien priorities contemplated by this
Agreement.
8.10 Governing Law. This Agreement has been delivered and accepted at
and shall be deemed to have been made at New York, New York and shall be
interpreted, and the rights and liabilities of the parties bound hereby
determined, in accordance with the laws of the State of New York.
8.11 Binding on Successors and Assigns. This Agreement shall be
binding upon the Intercreditor Agent, the Senior Lenders, the Trustee, the
Noteholders, the Company, the Company's Subsidiaries party hereto and their
respective permitted successors and assigns.
8.12 Specific Performance. The Intercreditor Agent may demand
specific performance of this Agreement.
8.13 Section Titles. The section titles contained in this Agreement
are and shall be without substantive meaning or content of any kind whatsoever
and are not a part of this Agreement.
8.14 Counterparts. This Agreement may be executed in one or more
counterparts, including by means of facsimile, each of which shall be an
original and all of which shall together constitute one and the same document.
8.15 Authorization. By its signature, each Person executing this
Agreement on behalf of a party hereto represents and warrants to the other
parties hereto that it is duly authorized to execute this Agreement. The
Intercreditor Agent represents and warrants that this Agreement is binding upon
the Senior Lenders. The Trustee represents and warrants that pursuant to Article
11 of the Indenture this Agreement is binding upon the Noteholders.
8.16 No Third Party Beneficiaries; Successors and Assigns. This
Agreement and the rights and benefits hereof shall inure to the benefit of, and
be binding upon, each of the parties hereto and their respective successors and
assigns and shall inure to the benefit of each of,
20
and be binding upon, the holders of Senior Lender Claims and Noteholder Claims.
No other Person shall have or be entitled to assert rights or benefits
hereunder.
8.17 Effectiveness. This Agreement shall become effective when
executed and delivered by the parties hereto. This Agreement shall be effective
both before and after the commencement of any Insolvency or Liquidation
Proceeding. All references to the Company or any other Grantor shall include the
Company or any other Grantor as debtor and debtor-in-possession and any receiver
or trustee for the Company or any other Grantor (as the case may be) in any
Insolvency or Liquidation Proceeding.
8.18 Intercreditor Agent and Trustee. It is understood and agreed
that (a) ING is entering into this Agreement in its capacity as Administrative
Agent under the Credit Agreement and the provisions of Section 10 of the Credit
Agreement applicable to ING as administrative agent thereunder shall also apply
to ING as Intercreditor Agent hereunder and be expressly incorporated by
reference herein and (b) The Bank of New York is entering in this Agreement in
its capacity as Trustee and all the provisions of the Indenture applicable to
the Trustee thereunder shall also apply to the Trustee hereunder and be
expressly incorporated by reference herein.
8.19 Relative Rights. Notwithstanding anything in this Agreement to
the contrary (except to the extent contemplated by Section 5.3(b)), nothing in
this Agreement is intended to or will (a) amend, waive or otherwise modify the
provisions of the Senior Credit Agreement or the Indenture or any other Senior
Lender Documents or Noteholder Documents entered into in connection with the
Senior Credit Agreement or the Indenture or permit the Company or any Subsidiary
to take any action, or fail to take any action, to the extent such action or
failure would otherwise constitute a breach of, or default under, the Senior
Credit Agreement or any other Senior Lender Documents entered into in connection
with the Senior Credit Agreement or the Indenture or any other Noteholder
Documents entered into in connection with the Indenture, (b) change the relative
priorities of the Senior Lender Claims or the Liens granted under the Senior
Lender Documents on the Common Collateral (or any other assets) as among the
Senior Lenders, (c) otherwise change the relative rights of the Senior Lenders
in respect of the Common Collateral as among such Senior Lenders or (d) obligate
the Company or any Subsidiary to take any action, or fail to take any action,
that would otherwise constitute a breach of, or default under, the Senior Credit
Agreement or any other Senior Lender Document entered into in connection with
the Senior Credit Agreement or the Indenture or any other Noteholder Documents
entered into in connection with the Indenture. The Trustee shall not be deemed
to owe any fiduciary duty to the holders of First-Lien Indebtedness and shall
not be liable to any such holders if the Trustee shall in good faith and without
gross negligence or willful misconduct pay over or distribute to Holders of
Securities or to the Company or to any other person cash, property or securities
to which any holders of First-Lien Indebtedness shall be entitled by virtue of
this Article or otherwise. With respect to the holders of Senior Indebtedness,
the Trustee undertakes to perform or to observe only such of its covenants or
obligations as are specifically set forth in this Agreement and no implied
covenants or obligations with respect to holders of Senior Indebtedness shall be
read into this Indenture against the Trustee.
8.20 Indenture Reference. Notwithstanding anything to the contrary in
this Agreement, any references contained herein to any Section, clause,
paragraph, definition or other
21
provision of the Indenture (including any definition contained therein) shall be
deemed to be a reference to such Section, clause, paragraph, definition or other
provision as in effect on the date of this Agreement; provided that any
reference to any such Section, clause, paragraph or other provision shall refer
to such Section, clause, paragraph or other provision of the Indenture
(including any definition contained therein) as amended or modified from time to
time if such amendment or modification has been (1) made in accordance with the
Indenture and (2) approved in writing by, or on behalf of, the requisite Senior
Lenders as are needed under the terms of the Senior Credit Agreement to approve
such amendment or modification.
8.21 Consent of Grantors. Each Grantor hereby consents to the
provisions of this Agreement and the intercreditor arrangements provided for
herein and agrees (a) that none of the Intercreditor Agent, the Trustee, any
Noteholder or any Senior Lender shall have any liability to any Grantor as a
result of the performance of its obligations hereunder and (b) that the
obligations of the Grantors under the Senior Lender Documents and the Noteholder
Documents will in no way be diminished or otherwise affected by such provisions
or arrangements.
8.22 Existence and Amounts of Liens and Obligations. Whenever the
Trustee shall be required, in connection with the exercise of its rights or the
performance of its obligations hereunder, to determine the existence or amount
of any First-Lien Indebtedness, or the existence of any Lien securing any such
First-Lien Indebtedness, it may request that such information be furnished to it
in writing by the Intercreditor Agent and shall be entitled to make such
determination on the basis of the information so furnished; provided, however,
that if, notwithstanding the request of the Trustee, the Intercreditor Agent
shall fail or refuse reasonably promptly to provide the requested information,
the Trustee shall be entitled to make any such determination by such method as
it may, in the exercise of its good faith judgment, determine, including by
reliance upon a certificate of the Company. The Trustee may rely conclusively,
and shall be fully protected in so relying, on any determination made by it in
accordance with the provisions of the preceding sentence (or as otherwise
directed by a court of competent jurisdiction) and shall have no liability to
the Company or any of its subsidiaries, any Noteholder or any other person as a
result of such determination.
8.23 Representation and Warranties. Each party hereto represents and
warrants to the other parties hereto as follows:
(a) Such party is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization and has all
requisite power and authority to enter into and perform its obligations under
this Agreement.
(b) This Agreement has been duly executed and delivered by such party
and constitutes a legal, valid and binding obligation of such party, enforceable
in accordance with its terms.
(c) The execution, delivery and performance by such party of this
Agreement (i) do not require any consent or approval of, registration or filing
with or any other action by any governmental authority and (ii) will not violate
any applicable law or regulation or the charter, by-laws or other organizational
documents of such party or any order of any governmental authority or any
indenture, agreement or other instrument binding upon such party.
22
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
INTERCREDITOR AGENT:
ING CAPITAL LLC
By /s/ Xxxx X. Xxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxx
Title: Director
TRUSTEE:
THE BANK OF NEW YORK TRUST COMPANY, N.A.
By /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Assistant Vice President
COMPANY:
SECURUS TECHNOLOGIES, INC.
By /s/ Xxxxx Xxxxxxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxxxxxx
Title: Vice President
SUBSIDIARIES:
T-NETIX, INC.
By /s/ Xxxxx Xxxxxxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxxxxxx
Title: Vice President
23
TELEQUIP LABS, INC.
By /s/ Xxxxx Xxxxxxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxxxxxx
Title: Vice President
T-NETIX TELECOMMUNICATIONS
SERVICES, INC.
By /s/ Xxxxx Xxxxxxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxxxxxx
Title: Vice President
SPEAKEZ, INC.
By /s/ Xxxxx Xxxxxxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxxxxxx
Title: Vice President
T-NETIX MONITORING CORPORATION
By /s/ Xxxxx Xxxxxxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxxxxxx
Title: Vice President
EVERCOM HOLDINGS, INC.
By /s/ Xxxxx Xxxxxxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxxxxxx
Title: Vice President
24
EVERCOM, INC.
By /s/ Xxxxx Xxxxxxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxxxxxx
Title: Vice President
EVERCOM SYSTEMS, INC.
By /s/ Xxxxx Xxxxxxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxxxxxx
Title: Vice President
FORTUNELINX, INC.
By /s/ Xxxxx Xxxxxxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxxxxxx
Title: Vice President
EVERCONNECT, INC.
By /s/ Xxxxx Xxxxxxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxxxxxx
Title: Vice President
25
SCHEDULE I
SUBSIDIARY GUARANTORS
T-NETIX, Inc., a Delaware corporation
TELEQUIP Labs, Inc., a Nevada corporation
T-NETIX Telecommunications Services, Inc., a Texas corporation
SpeakEZ, Inc., a Colorado corporation
T-NETIX Monitoring Corporation, a Colorado corporation
Evercom Holdings, Inc., a Delaware corporation
Evercom, Inc., a Delaware corporation
Evercom Systems, Inc., a Delaware corporation
FortunelinX, Inc., a Delaware corporation
Everconnect, Inc., a Delaware corporation
