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RESTRICTED STOCK PURCHASE AGREEMENT

Shareholder Agreement

RESTRICTED STOCK PURCHASE AGREEMENT | Document Parties: SECURUS TECHNOLOGIES, INC. You are currently viewing:
This Shareholder Agreement involves

SECURUS TECHNOLOGIES, INC.

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Title: RESTRICTED STOCK PURCHASE AGREEMENT
Governing Law: Delaware     Date: 6/24/2008

RESTRICTED STOCK PURCHASE AGREEMENT, Parties: securus technologies  inc.
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EXHIBIT A

 

 

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:

 

 

 

 

 

 

 

 


 

1.

Purchase and Sale of Shares .

(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

 

 

 

 

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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.

 

2.

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

 

 

 

 

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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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