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RESTRICTED STOCK PURCHASE
AGREEMENT
This Restricted Stock Purchase Agreement (this
“ Agreement ”) is dated as of June 30, 2008 between Securus
Technologies, Inc., a Delaware corporation (the “
Corporation ”),
and William Markert (the “ Executive ”). Capitalized terms
not otherwise defined herein shall have their respective meanings
as set forth in the Securus Technologies, Inc. 2004 Restricted
Stock Plan (the “ Plan
”), a copy of which has been provided to the
Executive.
W I
T N
E S
S E
T H
:
WHEREAS, the Corporation and the Executive desire
that the Corporation grant to the Executive shares of Class B
Common Stock, par value $.001 per share (the “
Restricted Stock ”), equal to approximately one percent (1%) of the
aggregate of the Corporation’s outstanding Common Stock, par
value $.001 per share (“ Common
Stock ”), the Restricted Stock,
warrants to purchase Common Stock (on an as exercised basis), and
Series A Convertible Preferred Stock (the “
Series A Preferred Stock ”)(on an as converted basis), in each case, as of July 1,
2008; and
WHEREAS, as of the date hereof, each share of Series
A Preferred Stock is convertible into 1 share of Common Stock;
and
WHEREAS, the Certificate of Designation for the
Series A Preferred Stock (the “ Certificate of Designation ”)
provides that if the Corporation’s Credit Facility Cash Flow
(as defined in the Certificate of Designation) for the 12 months
ended June 30, 2008 is less than $45,000,000, each share of Series
A Preferred Stock is convertible into 200 shares of Common Stock;
and
WHEREAS, the Corporation desires to issue to the
Executive either (a) eleven-thousand four-hundred fourteen 52/100
(11,414.52) shares of Restricted Stock if each share of Series A
Preferred Stock is convertible into 200 shares of Common Stock as
of June 30, 2008 pursuant to Section 5(d)(iii) of the Certificate
of Designation, or (b) sixty-four 71/100 (64.71) shares of
Restricted Stock if each share of the Series A Preferred Stock is
not convertible into 200 shares of Common Stock as of June 30,
2008, (the “ Shares
”).
NOW, THEREFORE, in consideration of the Executive's
employment with the Corporation and the non-competition and
confidentiality provisions contained in his Employment Agreement
(as defined herein) and as an inducement and incentive to the
Executive to perform the Executive’s duties and fulfill the
Executive’s responsibilities on behalf of the Corporation at
the highest level of dedication and competence (and other good and
valuable consideration receipt of which is hereby acknowledged),
the Corporation hereby sells to the Executive the Shares, pursuant
to the terms and subject to the conditions of the Plan and this
Agreement, including a restriction period (the “
Restriction Period ”) and such other restrictions as are hereinafter set
forth, and in connection with such purchase and sale, the
Corporation and the Executive agree as follows:
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1.
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Purchase and Sale of Shares
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(a) Upon
the execution of this Agreement, the Executive shall purchase, and
the Corporation shall sell to the Executive, the Shares for a
purchase price of $0.01 per share or an aggregate of $114.14;
provided, however, that if the Shares are decreased to sixty-four
71/100 as set forth herein, the aggregate purchase price shall be
reduced to $0.64 (the “ Purchase
Price ”). Subject to Section 4, the
Restriction Period and the other restrictions contained herein and
those restrictions set forth in that certain Stockholders’
Agreement by and among the Corporation and the investors and
management stockholders named therein (the “
Stockholders’ Agreement
”), on or before September 15, 2008, the
Corporation shall deliver to the Executive stock certificates
evidencing the Shares of Restricted Stock in the amount of either
(i) eleven-thousand four-hundred fourteen 52/100 (11,414.52) if
each share of Series A Preferred Stock is convertible into 200
shares of Common Stock as of June 30, 2008, or (ii) sixty-four
71/100 (64.71) if each share of the Series A Preferred Stock is not
convertible into 200 shares of Common Stock as of June 30, 2008. If
at any time after September 15, 2008 it is determined that each
share of the Series A Preferred Stock was not convertible into 200
shares of Common Stock as of June 30, 2008, the shares of
Restricted Stock shall be immediately reduced to sixty-four 71/100
(64.71) without any further action by the Executive and, within
five (5) days written notice thereof, the Executive shall return to
the Corporation any stock certificates issued to him evidencing
shares of Restricted Stock in excess of such amount.
(b) In
connection with the purchase and sale of the Shares hereunder, the
Executive represents and warrants to the Corporation
that:
(i) The Shares
to be acquired by the Executive pursuant to this Agreement will be
acquired for the Executive’s own account and not with a view
to, or intention of, distribution thereof in violation of the
Securities Act of 1933, as amended (the “
Securities Act ”), or any applicable state securities laws, and the
Shares will not be disposed of in contravention of the Securities
Act or any applicable state securities laws or the Stockholders
Agreement.
(ii) The
Executive is able to evaluate the risks and benefits of the
investment in the Shares. The Executive is an officer of the
Corporation and is an “accredited investor” within the
meaning of the Securities Act. The Executive is domiciled in, and
the certificates representing the Shares will come to rest in, the
State of Texas.
(iii) The
Executive is able to bear the economic risk of his investment in
the Shares for an indefinite period of time and acknowledges that
the Shares have not been registered under the Securities Act and,
therefore, cannot be sold unless subsequently registered under the
Securities Act or an exemption from such registration is
available.
(iv) The
Executive has had an opportunity to ask questions and receive
answers concerning the terms and conditions of the sale of the
Shares and has had full access to such other information concerning
the Corporation as he has requested. The Executive has also
reviewed, or has had an opportunity to review, the
Corporation’s
certificate of incorporation (as amended and
restated), bylaws (as amended and restated), and financial
statements. The Executive acknowledges and understands that (A) it
is unlikely that the Corporation will pay dividends in respect of
the Shares and (B) payment of dividends and distributions in
respect of the Shares is restricted by the financing documents that
the Corporation has entered into and may be restricted by future
agreements or instruments binding on the Corporation, its operating
Subsidiaries or its properties. The Executive acknowledges that the
Shares of Restricted Stock are junior to the Corporation’s
Series A Convertible Preferred Stock, par value $.01 per share (the
“ Series A Preferred
Stock ”), the Corporation’s
common stock, $0.01 par value per share (the “
Common Stock ”),
and may be junior to other securities issued by the Corporation, in
each case in right of payment upon liquidation of the Corporation.
The decision of the Executive to purchase the Shares hereunder has
been made by the Executive independent of any other purchaser and
independent of any statements, disclosures or judgments as to the
properties, business, prospects or conditions (financial or
otherwise) of the Corporation which may have been made or given by
any Executive or other Person. The Executive agrees and
acknowledges that no other Person has acted, is expected to act, or
will act as the agent or financial advisor of such Executive in
connection with making, closing or monitoring of his investments
hereunder. The Executive acknowledges that he has been advised that
an investment in the Shares involves a high degree of risk and is
suitable only for persons of adequate financial means who have no
need for liquidity with respect to this investment and who can
afford the risk of a complete loss of their investment.
(v) This
Agreement constitutes the legal, valid and binding obligation of
the Executive, enforceable in accordance with its terms, and the
execution, delivery and performance of this Agreement by the
Executive does not and will not conflict with, violate or cause a
breach of any agreement, contract or instrument to which the
Executive is a party or any judgment, order or decree to which the
Executive is subject.
(c) As an
inducement to the Corporation to issue the Shares to the Executive,
and as a condition thereto, the Executive acknowledges and agrees
that the Corporation shall have no duty or obligation to disclose
to the Executive, and the Executive shall have no right to be
advised of, any material information regarding the Corporation and
its Subsidiaries at any time other than (i) in connection with any
repurchase of the Shares upon the termination of the
Executive’s employment with the Corporation and its
Subsidiaries, (ii) pursuant to the Stockholders Agreement, (iii)
pursuant to applicable law or (iv) as otherwise provided
hereunder.
(d) As an
inducement to the Executive to acquire the Shares from the
Corporation, and as a condition thereto, the Corporation represents
and warrants to the Executive that the Shares issued under this
Agreement are duly and validly authorized and, when paid for by the
Executive in accordance with Section 2, will be issued, fully paid
and non-assessable and will not have been issued in violation of
any pre-emptive or similar right of any person or of any federal or
state law.
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2.
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Corporation's Right to Purchase Shares
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(a) Upon
termination under any circumstances of the Executive’s
employment with the Corporation or a Subsidiary, the Corporation
shall have the right, but not the obligation, to purchase any or
all of the Shares then held by the Executive or any permitted
transferee of such Shares (other than the maximum number of Shares
that remain subject to the vesting provisions of Section 3(b) after
such termination) by delivering written notice of its intention to
purchase the Shares, to the Executive and/or such transferee within
ninety (90) calendar days (or, if such termination of employment
occurs by reason of the Executive’s death or disability, one
hundred eighty (180) days) after such termination of employment, at
the purchase price determined in accordance with subparagraph (b)
or (c), as applicable, of this Section 2. In addition, in the event
of a Sale of the Corporation, the Corporation shall have the right,
but not the obligation, to purchase any or all of the Shares
described in Section 3(b) and 3(c) hereof as to which the
Restriction Period has not lapsed as of the date of such Sale of
the Corporation at the purchase price determined in accordance with
subparagraph (c) of this Section 2.
(b) If the
termination of the Executive’s employment occurs under any
circumstances other than (i) the Executive’s termination by
the Corporation or a Subsidiary for Cause (as defined in the
Employment Agreement) or (ii) the Executive’s resignation
other than for Constructive Discharge, the purchase price to be
paid by the Corporation (A) for any Shares pursuant to this Section
2 as to which the Restriction Period has lapsed in accordance with
Section 3 hereof as of the date of such termination (the
“ Vested Shares
”) shall be the fair market value of such
Vested Shares, as determined by the Corporation’s board of
directors, as of the date of termination of the Executive’s
employment, and (B) for any Shares that are not Vested Shares,
shall be determined in accordance with Section 2(c)
hereof.
(c) If the
termination of the Executive’s employment is by the
Corporation or a Subsidiary for Cause (as defined in the Employment
Agreement), the purchase price to be paid by the Corporation for
any Shares pursuant to this Section 2 shall be the original
purchase price set forth in Section 1 of this Agreement for such
Shares. If the termination of the Executive’s employment
results from the Executive’s resignation other than for
Constructive Discharge (as defined in the Employment Agreement),
the purchase price to be paid by the Corporation for any Shares
pursuant to this Section 2 shall be (i) for all Shares subject to
Section 3(a) that have become Vested Shares as of such resignation,
the fair market value of such Vested Shares, as determined by the
Corporation’s board of directors, as of the date of
termination of the Executive’s employment and (ii) for all
other Shares, the original purchase price set forth in Section 1 of
this Agreement for such Shares.
(d) If the
Corporation elects to exercise its right to purchase any Shares
under this Section 2, the closing of the purchase by the
Corporation of the Shares shall take place no later than forty-five
(45) days after the exercise of such right, which time in the case
of the death of the Executive may be extended to provide for
probate of the Executive’s estate. On the date scheduled for
such closing, the price for the Shares shall be paid by the
Corporation by (i) check or checks to the record holder of such
Shares against delivery of a certificate or certificates
representing the purchased Shares in proper form for transfer or
(ii) offsetting amounts outstanding under any indebtedness or
obligations owed by the Executive or permitted transferees hereof
to the Corporation or any affiliate thereof. In connection with
such closing, such record holder shall warrant in writing to the
Corporation good and marketable title to the Shares, free and clear
of all claims, liens, charges, encumbrances and security interests
of any
nature whatsoever except those under this Agreement
and the Stockholders Agreement. All repurchases of the Shares by
the Corporation will be subject to applicable restrictions
contained in the Delaware General Corporation Law and in the
Corporation’s and any affiliate’s debt and equity
financing agreements. If any such restrictions prohibit the
Corporation’s purchase of the Shares pursuant to this Section
2 which the Corporation is otherwise entitled to make, the
Corporation may make such purchases as soon as it is permitted to
do so under such restrictions.
3.
Restriction Period .
The Restriction Period applicable
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