Exhibit 10.3
Execution Version
GOAMERICA, INC.
AMENDED AND RESTATED STOCK PURCHASE AGREEMENT
7,446,809 SHARES OF SERIES A PREFERRED STOCK
September 12, 2007
SCHEDULES AND EXHIBITS
SCHEDULE A Schedule of Investors
SCHEDULE B Schedule of Exceptions
SCHEDULE C Operating Subsidiaries
SCHEDULE D Insurance
EXHIBIT A-1 Form of First Restated Certificate
EXHIBIT A-2 Form of Second Restated Certificate
EXHIBIT B-1 Investor Rights Agreement
EXHIBIT B-2 Form of Amended and Restated Investor Rights Agreement
EXHIBIT B-3 Form of Second Amended and Restated Investor Rights Agreement
EXHIBIT C Form of Opinion of Company Counsel
EXHIBIT D Compliance Certificate
AMENDED AND RESTATED
SERIES A PREFERRED STOCK PURCHASE AGREEMENT
THIS AMENDED AND RESTATED SERIES A PREFERRED STOCK PURCHASE
AGREEMENT (this "Agreement") is made as of September 12, 2007, by and between
GoAmerica, Inc., a Delaware corporation (the "Company"), and the investors
listed on Schedule A hereto (each, an "Investor" and collectively, the
"Investors"), and amends and restates in its entirety that certain Series A
Preferred Stock Purchase Agreement dated as of August 1, 2007 among the parties
hereto.
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Stock.
1.1 Sale and Issuance of Series A Preferred Stock.
(a) The Board of Directors of the Company has approved,
and upon receipt of all necessary stockholder approvals, the Company shall file
with the Secretary of State of the State of Delaware (i) on or before the
Closing (as defined below), an Amended and Restated Certificate of Incorporation
in the form attached hereto as Exhibit A-1 (the "First Restated Certificate"),
and (ii) on or before the Subsequent Closing (as defined below), an Amended and
Restated Certificate of Incorporation in the form attached hereto as Exhibit A-2
(the "Second Restated Certificate"); provided that, if the Closing and the
Subsequent Closing are substantially simultaneous, the Company shall file only
the Second Restated Certificate.
(b) The Board of Directors of the Company has authorized,
subject to the receipt of all necessary stockholder approvals, (i) the sale and
issuance to the Investors of the Series A Preferred Stock (as defined below) and
(ii) the issuance of the shares of Common Stock (as defined below) to be issued
upon conversion of the Series A Preferred Stock (the "Conversion Shares"). The
Series A Preferred Stock and the Conversion Shares shall have the rights,
preferences, privileges and restrictions set forth in the First Restated
Certificate or the Second Restated Certificate, as applicable.
(c) Subject to the terms and conditions of this Agreement,
each Investor agrees, severally and not jointly, to purchase at the Closing (as
defined below) and the Company agrees to sell and issue to each Investor at the
Closing, that number of shares of the Company's Series A Preferred Stock set
forth opposite each Investor's name on Part I of Schedule A hereto for a
purchase price of $5.17 per share (the "Per Share Price").
(d) Subject to the terms and conditions of this Agreement,
each Investor agrees, severally and not jointly, to purchase at the Subsequent
Closing (as defined below) and the Company agrees to sell and issue to each
Investor at the Subsequent Closing, that number of shares of the Company's
Series A Preferred Stock set forth opposite each Investor's name on Part II of
Schedule A hereto for a purchase price of the Per Share Price.
1.2 Closing and Subsequent Closing. Assuming that all other
conditions of Closing have been satisfied or waived, the purchase and sale of
the Series A Preferred Stock to be sold at the Closing pursuant to Section
1.1(c) shall take place at the offices
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of Xxxxxxxxxx Xxxxxxx PC, 00 Xxxxxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxxxx 00000
concurrently with the consummation of the closing provided for in that certain
asset purchase agreement (the "Asset Purchase Agreement") dated as of August 1,
2007, by and between GoAmerica Relay Services Corp. (formerly Acquisition 1
Corp.) and MCI Communications Services, Inc., providing for the Company's
purchase of a telecommunications relay services business (the "TRS Business"),
or at such other time and place as the Company and Investors acquiring in the
aggregate more than half of the shares of Series A Preferred Stock sold pursuant
hereto mutually agree upon orally or in writing (which time and place are
designated as the "Closing"). At the Closing, the Company shall deliver to each
Investor a certificate representing the Series A Preferred Stock that such
Investor is purchasing against payment of the purchase price therefor by wire
transfer of immediately available funds to an account designated by the Company.
Assuming that all conditions of the Subsequent Closing have been satisfied or
waived, the purchase and sale of the Series A Preferred Stock to take place at
the Subsequent Closing shall take place at the offices of Xxxxxxxxxx Xxxxxxx PC,
00 Xxxxxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxxxx 00000 concurrently with the
consummation of the closing provided for in that certain merger agreement (the
"Merger Agreement") of even date herewith, by and between the Company, HOVRS
Acquisition Corporation and Hands On Video Relay Services, Inc. ("HOVRS"),
providing for the Company's acquisition of HOVRS, or at such other time and
place as the Company and Investors acquiring in the aggregate more than half of
the shares of Series A Preferred Stock sold pursuant hereto mutually agree upon
orally or in writing (which time and place are designated as the "Subsequent
Closing"). At the Subsequent Closing, the Company shall deliver to each Investor
a certificate representing the Series A Preferred Stock that such Investor is
purchasing at the Subsequent Closing against payment of the purchase price
therefor by wire transfer of immediately available funds to an account
designated by the Company.
1.3 Use of Proceeds. The Company shall use the proceeds from
the sale of the Series A Preferred Stock to the Investors at the Closing (a) to
fund the cash purchase price payable by the Company pursuant to the Asset
Purchase Agreement, (b) for general working capital purposes and (c) for the
repayment of certain of the Company's existing secured debt. The Company shall
use the proceeds from the sale of Series A Preferred Stock at the Subsequent
Closing (a) to fund the cash merger consideration payable by the Company
pursuant to the Merger Agreement and (b) for general working capital purposes.
1.4 Transaction Fee. Concurrently with the Closing, the
Company shall pay the Investors by wire transfer of immediately available funds
(to the account or accounts designated by the Investors prior to Closing) an
aggregate transaction fee of $960,000.
2. Representations and Warranties of the Company. The Company hereby
represents and warrants to each Investor that, except as set forth in the SEC
Reports (as defined below) or on the Schedule of Exceptions (the "Schedule of
Exceptions") furnished to each Investor prior to execution hereof and attached
hereto as Schedule B, which exceptions shall be deemed to be representations and
warranties as if made hereunder:
2.1 Organization, Good Standing and Qualification. The Company
is a corporation duly organized, validly existing and in good standing under the
laws of the State of
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Delaware. The Company is duly qualified to transact business and is in good
standing in each jurisdiction in which the failure to so qualify would have a
material adverse change in the assets, liabilities, customer or supplier
relationships, financial condition, operations or results of operations of the
Company and the TRS Business taken as a whole, provided, however, in each case,
not including any change that (A) is generally applicable to the U.S. economy,
(B) is generally applicable to Internet protocol data and voice providers, (C)
results from the execution of the Asset Purchase Agreement, the announcement of
the Asset Purchase Agreement or the consummation of the transactions
contemplated by the Asset Purchase Agreement or (D) relates to changes in
generally accepted accounting principles generally applicable to companies
serving as Internet protocol data and voice providers occurring after the date
of the Asset Purchase Agreement (a "Material Adverse Effect").
2.2 Capitalization and Voting Rights.
(a) Authorized Stock. The authorized capital of the
Company consists of:
(i) Preferred Stock. 4,351,943 shares of Preferred
Stock, par value $.01 per share (the "Preferred Stock"), and, after the filing
of the First Restated Certificate and/or the Second Restated Certificate,
11,671,180 shares of Preferred Stock, 290,135 of which are issued and
outstanding as of the date hereof (all of which were issued and outstanding
pursuant to that certain $1,500,000 Stock Purchase Agreement dated as of August
1, 2007 (the "$1.5 million Stock Purchase Agreement"), by and among the Company
and the Investors). Upon filing the First Restated Certificate with the
Secretary of State of the State of Delaware, 6,769,826 shares of Preferred Stock
shall be designated Series A Preferred Stock and upon filing the Second Restated
Certificate with the Secretary of State of the State of Delaware, 7,736,944
shares of Preferred Stock shall be designated Series A Preferred Stock (the
"Series A Preferred Stock"), all of which may be sold pursuant to this Agreement
(other than the Series A Preferred Stock issued on August 1, 2007 pursuant to
the $1.5 million Stock Purchase Agreement). As of the date of the Subsequent
Closing, the only shares of Series A Preferred Stock issued and outstanding are
(A) the shares issued to the Investors pursuant hereto on the date of the
Closing, and (B) the shares issued to the Investors pursuant to the $1.5 million
Stock Purchase Agreement; and
(ii) Common Stock. 200,000,000 shares of Common
Stock, par value $.01 per share ("Common Stock"), and, after the filing of the
First Restated Certificate and/or the Second Restated Certificate, 50,000,000
shares of Common Stock, of which 2,486,668 shares are issued and outstanding as
of the date hereof, and 24,063 shares are held in treasury as of the date
hereof.
(b) Valid Issuance. The outstanding shares of Common Stock
are all duly and validly authorized and issued, fully paid and nonassessable,
and were issued in compliance with all applicable state and federal laws
concerning the issuance of securities.
(c) Rights to Acquire. Except for (i) options to purchase
an aggregate of 83,191 shares of Common Stock granted and outstanding under the
GoAmerica Communications Corp. 1999 Stock Option Plan, the
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GoAmerica, Inc. 1999 Stock Plan, the GoAmerica, Inc. Employee Stock Purchase
Plan and the GoAmerica, Inc. 2005 Equity Compensation Plan (collectively, the
"Company Option Plans") and (ii) warrants to purchase an aggregate of 84,320
shares of Common Stock granted and outstanding, there are not outstanding any
options, warrants, rights (including conversion or preemptive rights) or
agreements for the purchase or acquisition from the Company of any shares of its
capital stock as of the date hereof. The Company has reserved a total of 272,478
shares of Common Stock for issuance under the Company Option Plans (including
the shares described above).
(d) Voting of Shares. Other than the Investor Rights
Agreement entered into by the Company and the Investors on August 1, 2007 in
connection with the $1.5 million Stock Purchase Agreement, the Amended and
Restated Investor Rights Agreement and the Second Amended and Restated Investor
Rights Agreement to be entered into in connection with the Closing and/or
Subsequent Closing hereunder, the Company is not a party or subject to any
agreement or understanding and, to the Company's knowledge, except for the
voting agreements identified on Schedule 2.2(d) hereof, there is no agreement or
understanding between any persons and/or entities which affects or relates to
the voting or giving of written consents with respect to any security of the
Company.
2.3 Operating Subsidiaries.
(a) Schedule C hereto sets forth the name of each
operating subsidiary of the Company (each, an "Operating Subsidiary" and
collectively, the "Operating Subsidiaries") and the jurisdiction in which such
Operating Subsidiary is incorporated. Each Operating Subsidiary is a duly
organized and validly existing corporation or other entity and has all requisite
corporate power and authority to carry on its business as now conducted. Each
Operating Subsidiary is duly qualified to transact business and is in good
standing in each jurisdiction in which the failure so to qualify would have a
Material Adverse Effect.
(b) All of the outstanding shares of capital stock of each
Operating Subsidiary of the Company are duly and validly authorized and issued,
fully paid and non-assessable and are owned directly by the Company, free and
clear of all liens, encumbrances, preemptive rights, subscription rights, other
rights to purchase, voting or transfer restrictions and other claims, except as
set forth in or contemplated by the Credit Agreement, the First Lien Debt
Commitment Letter and the Second Lien Debt Commitment Letter. There are no
outstanding rights, warrants or options to acquire, or instruments convertible
into or exchangeable for, any equity interests of any Operating Subsidiary.
(c) Each subsidiary of the Company that is not an
Operating Subsidiary (i) has consolidated gross revenues for the period of four
fiscal consecutive quarters most recently ended of less than $5,000, (ii) has
consolidated total assets on the last day of the fiscal quarter most recently
ended of less than $5,000 and (iii) does not own or possess the right to use any
Intellectual Property Rights or other assets that are material to the business
of the Company and its subsidiaries, taken as a whole. For purposes of this
Agreement, the terms "subsidiary" and "subsidiaries" of any person means any
corporation, partnership, joint venture, limited liability company, association
or other legal entity of which such person (either alone or through or together
with any other subsidiary), owns, directly or indirectly, 50% or more of the
stock or other equity interests the holder of which is generally entitled to
vote for the election of
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the board of directors or other governing body of such corporation, partnership,
joint venture, limited liability company, association or other legal entity.
2.4 Authorization. Other than the stockholder approvals
described in Section 2.4 of the Schedule of Exceptions, the filing of the First
Restated Certificate and/or the Second Restated Certificate, as applicable, with
the Secretary of State of the State of Delaware and filings required under
federal and state securities laws, all corporate action on the part of the
Company, its directors and stockholders necessary for the authorization,
execution and delivery by the Company of this Agreement, the Investor Rights
Agreement, a copy of which is attached hereto as Exhibit B-1 (the "Investor
Rights Agreement"), an Amended and Restated Investor Rights Agreement in
substantially the form attached hereto as Exhibit B-2 (the "Amended and Restated
Investor Rights Agreement")and a Second Amended and Restated Investor Rights
Agreement in substantially the form attached hereto as Exhibit B-3 (the "Second
Amended and Restated Investor Rights Agreement"), the performance of all
obligations of the Company hereunder and thereunder, and the authorization,
sale, issuance and delivery of the Series A Preferred Stock being sold hereunder
and the Conversion Shares issuable upon conversion of the Series A Preferred
Stock has been taken or will be taken prior to the Closing or, in respect of the
Series A Preferred Stock and Conversion Stock to be issued or issuable at the
Subsequent Closing, the Subsequent Closing. This Agreement, the Investor Rights
Agreement, and, when executed, the Amended and Restated Investor Rights
Agreement and the Second Amended and Restated Investor Rights Agreement,
constitute valid and legally binding obligations of the Company, enforceable in
accordance with their respective terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors' rights generally and (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies.
2.5 Valid Issuance of Preferred Stock. Assuming receipt of all
stockholder approvals described in Section 2.5 of the Schedule of Exceptions,
the Series A Preferred Stock that is being purchased by the Investors hereunder,
when issued, sold and delivered in accordance with the terms of this Agreement
for the consideration expressed herein, will be duly and validly issued, fully
paid and nonassessable and will be free of restrictions on transfer, other than
restrictions on transfer (a) under this Agreement, the Amended and Restated
Investor Rights Agreement and the Second Amended and Restated Investor Rights
Agreement, (b) under applicable state and federal securities laws and (c)
otherwise imposed as a result of actions taken by the Investors. The Conversion
Shares have been duly and validly reserved for issuance and, upon issuance in
accordance with the terms of the First Restated Certificate or the Second
Restated Certificate, as applicable, will be duly and validly issued, fully paid
and nonassessable and will be free of restrictions on transfer, other than
restrictions on transfer (a) under this Agreement, the Amended and Restated
Investor Rights Agreement and the Second Amended and Restated Investor Rights
Agreement, (b) under applicable state and federal securities laws and (c)
otherwise imposed as a result of actions taken by the Investors.
2.6 Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part of
the Company is required in connection with the consummation of the transactions
contemplated by this Agreement, except for (i) such consents, approvals, orders,
authorizations, registrations, qualifications, designations,
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declarations or filings which are not required to be obtained prior to the
Closing and such consents, approvals, orders, authorizations, registrations,
qualifications, designations, declarations or filings which are not required to
be obtained prior to the Subsequent Closing, (ii) the filing of the First
Restated Certificate and/or the Second Restated Certificate, as applicable, with
the Secretary of State of the State of Delaware, (iii) the filing with The
Nasdaq Stock Market, Inc. ("Nasdaq") of an application to list the Conversion
Shares and (iv) such filings as are required pursuant to applicable federal and
state securities laws and blue sky laws, which filings will be effected within
the required statutory period.
2.7 Offering. Subject in part to the truth and accuracy of
each Investor's representations set forth in Section 3 of this Agreement, the
offer, sale and issuance of the Series A Preferred Stock and Conversion Shares
as contemplated by this Agreement are exempt from the registration requirements
of the Securities Act of 1933, as amended (the "Act"), and the qualification or
registration requirements of applicable state blue sky laws, as such
registration requirements and laws currently exist. Neither the Company nor any
authorized agent acting on its behalf will take any action hereafter that would
cause the loss of such exemption.
2.8 Litigation. There is no action, suit, proceeding or
investigation pending or, to the Company's knowledge, currently threatened
against the Company that questions the validity of this Agreement, the Merger
Agreement, the Asset Purchase Agreement, the Managed Services Agreement (as
defined below) or the Investor Rights Agreement, the Amended and Restated
Investor Rights Agreement or the Second Amended and Restated Investor Rights
Agreement, or the right of the Company to enter into such agreements or to
consummate the transactions contemplated hereby, or that would reasonably be
expected to result, either individually or in the aggregate, in a Material
Adverse Effect or in any change in the current equity ownership of the Company.
Neither the Company nor any Operating Subsidiary is a party or subject to the
provisions of any order, writ, injunction, judgment or decree of any court or
government agency or instrumentality.
2.9 Asset Purchase Agreement and Managed Services Agreement.
The Company has delivered to counsel to the Investors true and complete copies
of the Managed Services Agreement, dated as of August 1, 2007, by and between
the Company and Stellar Nordia Services LLC, a Nevada limited liability company
(the "Managed Services Agreement" and, together with the Asset Purchase
Agreement, the Merger Agreement and the documents referenced in any of the Asset
Purchase Agreement, the Merger Agreement or the Managed Services Agreement
pertaining to the acquisitions described in the Asset Purchase Agreement and the
Merger Agreement, the "Operative Agreements"). All corporate action on the part
of the Company, its directors and stockholders necessary for the authorization,
execution and delivery by the Company of the Operative Agreements and the
performance of all obligations of the Company thereunder has been taken or will
be taken prior to the closing provided for in the Asset Purchase Agreement
(other than corporate actions required with respect to the transactions
contemplated by the Merger Agreement, which will be taken prior to the closing
provided for in the Merger Agreement). The Operative Agreements will constitute,
when executed, valid and legally binding obligations of the Company, and will be
enforceable in accordance with their respective terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors' rights
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generally and (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies. No consent,
approval, order or authorization of, or registration, qualification,
designation, declaration or filing with, any federal, state or local
governmental authority on the part of the Company is required in connection with
the consummation of the transactions contemplated by the Operative Agreements,
except as described in the Asset Purchase Agreement, the Merger Agreement and
the respective Schedules thereto as of the date hereof.
2.10 Intellectual Property. Except as would not have a
Material Adverse Effect:
(a) To its knowledge, the Company and each Operating
Subsidiary owns sufficient right, title and interest in and to, or has
sufficient right to use pursuant to a valid license, option, assignment or
agreement, all of the Intellectual Property Rights (as defined below) used by
them and which the Company believes are necessary for the operation of the
business of the Company and each Operating Subsidiary as presently conducted,
and the lack of which would conflict with or infringe the rights of any third
party, except for such items as have yet to be conceived or developed or that
are expected to be available for licensing on reasonable terms. The Company and
each Operating Subsidiary has taken reasonable actions to maintain and protect
the confidentiality of Intellectual Property Rights consisting of trade secrets
that it owns. The Intellectual Property Rights that the Company or any Operating
Subsidiary owns, consisting of patents, copyrights, trademarks, service marks
and trade names, do not, to the Company's knowledge, conflict with or infringe
upon the rights of third parties, except for such items as have yet to be
conceived or developed or that are expected to be available for licensing on
reasonable terms. Since January 1, 2006, there have been no written claims made
against the Company or any subsidiary asserting the invalidity, misuse or
unenforceability of any Intellectual Property Rights that the Company or any
subsidiary owns and, to the Company's knowledge, there are no valid grounds for
the same. Since January 1, 2006, neither the Company nor any subsidiary has
received any communications alleging that the Company or any subsidiary has
violated, infringed or misappropriated any Intellectual Property Rights of any
other person or entity. To the Company's knowledge, neither the Company nor any
subsidiary is violating, infringing or misappropriating the Intellectual
Property Rights of any other person or entity. Since January 1, 2006, to the
Company's knowledge, no third party has interfered with, infringed upon,
violated, misappropriated, or otherwise come into conflict with any of the
Company's or any of its Operating Subsidiary's Intellectual Property Rights, or
of any right of any third party (to the extent licensed by or through the
Company or its Operating Subsidiaries), or breached any license or agreement
involving Intellectual Property Rights. Except as set forth on the Schedule of
Exceptions, the Company has not brought any action, suit or proceeding or
asserted any claim against any person or entity related to the foregoing. The
Company is not aware that any of its employees is obligated under any contract
(including licenses, covenants or commitments of any nature) or other agreement,
or subject to any judgment, decree or order of any court or administrative
agency, that would interfere with the use of his or her best efforts to promote
the interests of the Company or that would prevent the employee from assigning
his/her inventions to the Company.
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(b) Neither the execution nor delivery of this
Agreement, the Operative Agreements or the Investor Rights Agreement, the
Amended and Restated Investor Rights Agreement or the Second Amended and
Restated Investor Rights Agreement, nor the carrying on of the Company's
business by the employees of the Company, nor the employment of any employee of
the Company, will, to the Company's knowledge, conflict with or result in a
breach of the terms, conditions or provisions of, or constitute a default under,
any contract, covenant or instrument under which any of such employees is now
obligated, including but not limited to, any employment contract, patent
disclosure agreement, confidentiality agreement or any other contract or
agreement relating to the relationship of any such employee with the Company.
(c) For purposes of this Agreement, "Intellectual
Property Rights" means all (i) patents, patent applications, patent disclosures
and inventions, (ii) trademarks, service marks, trade names, logos and corporate
names and registrations and applications for registration thereof, (iii)
copyrights (registered and unregistered) and copyrightable works and
registrations and applications for registration thereof, (iv) mask works and
registrations and applications for registration thereof, (v) computer software,
data, databases and documentation thereof, (vi) trade secrets and other
confidential information (including, without limitation, ideas, formulas,
compositions, inventions (whether patentable or unpatentable and whether or not
reduced to practice), know-how, manufacturing and production processes and
techniques, research and development information, drawings, specifications,
designs, plans, proposals, technical data, financial and marketing plans and
customer and supplier lists and information) and (vii) other intellectual
property rights. As used in this Agreement, the phrases "to the Company's
knowledge" and "the Company is not aware" or any similar expression or phrase
refers to the actual knowledge of the executive officers of the Company (and
does not include any constructive or imputed notice of any information).
2.11 Compliance with Other Instruments. The Company is not in
violation of any provision of its certificate of incorporation or Bylaws.
Neither the Company nor any of its subsidiaries is in violation of any
instrument, judgment, order, writ, decree or contract, statute, rule or
regulation to which the Company or any subsidiary is subject and a violation of
which would reasonably be expected to result in a Material Adverse Effect. The
execution, delivery and performance of this Agreement, the Operative Agreements
and the Investor Rights Agreement, the Amended and Restated Investor Rights
Agreement and the Second Amended and Restated Investor Rights Agreement, and the
consummation of the transactions contemplated hereby and thereby will not result
in any such violation, or be in conflict with or constitute, with or without the
passage of time and giving of notice, either a default under any such provision,
instrument, judgment, order, writ, decree or contract or an event that results
in the creation of any lien, charge or encumbrance upon any assets of the
Company or any subsidiary or the suspension, revocation, impairment, forfeiture
or nonrenewal of any material permit, license, authorization or approval
applicable to the Company or any subsidiary, their business or operations or any
of their assets or properties, other than conflicts, defaults or other results
which would not reasonably be expected to result in a Material Adverse Effect.
2.12 Agreements; Action.
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(a) Except for agreements explicitly contemplated hereby,
there are no agreements, written or oral, between the Company and any subsidiary
and any of their officers, directors or affiliates.
(b) There are no agreements, understandings, instruments,
contracts, proposed transactions, judgments, orders, writs or decrees to which
the Company or any subsidiary is a party or by which any of them is bound that
may involve the license of any Intellectual Property Rights or other proprietary
right to or from the Company (other than licenses entered into in the ordinary
course of business).
(c) There are no agreements, commitments, understandings,
instruments, contracts, proposed transactions, judgments, orders, writs or
decrees to which the Company or any subsidiary is a party or by which they are
bound that may involve (i) obligations (contingent or otherwise), or payments to
the Company or any subsidiary, in excess of $250,000, other than obligations of,
or payments to, the Company or any subsidiary arising from agreements entered
into in the ordinary course of business, or (ii) provisions materially
restricting the development, manufacture or distribution of the Company's
products or services (collectively, "Material Contracts"). The Material
Contracts are valid and in full force and effect as to the Company and any
Operating Subsidiary, and, to the Company's knowledge, to the other parties
thereto.
(d) With the exception of (i) indebtedness of the Company
and its subsidiaries under that certain Credit Agreement dated as of August 1,
2007 (the "Credit Agreement") by and among the Company, Clearlake Capital Group,
LP, as Administrative Agent and Collateral Agent and the Lenders party thereto,
and (ii) the indebtedness contemplated by that certain Amended and Restated
First Lien Debt Commitment Letter of even date herewith (the "First Lien Debt
Commitment Letter") and that certain Amended and Restated Second Lien Debt
Commitment Letter of even date herewith (the "Second Lien Debt Commitment
Letter"), between the Company and Clearlake Capital Group, LP (the Credit
Agreement, First Lien Debt Commitment Letter and Second Lien Debt Commitment
Letter, collectively, the "Debt Financings"), neither the Company nor any
subsidiary has outstanding any indebtedness for money borrowed (which, for
clarity, the parties agree does not include accounts payables or other trade
payables, capital leases or accrued expenses) in excess of $250,000 or, in the
case of indebtedness for money borrowed individually less than $250,000, in
excess of $5,000,000 in the aggregate, other than liabilities incurred in the
ordinary course of business.
(e) For the purposes of subsections (a) and (b) above, all
indebtedness, liabilities, agreements, understandings, instruments, contracts
and proposed transactions involving the same person or entity (including persons
or entities the Company has reason to believe are affiliated therewith) shall be
aggregated for the purpose of meeting the individual minimum dollar amounts of
such subsections.
2.13 Related Party Transactions. Since the filing of the last
SEC Report (as defined below), there have been no related party transactions
that would be required to be disclosed in the SEC Reports pursuant to Item
404(a) of the SEC's Regulation S-K that have not been so disclosed in the SEC
Reports.
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2.14 SEC Filings; Financial Statements.
(a) The Company has timely filed all reports and proxy
statements (including all information incorporated therein, amendments and
supplements thereto) required to be filed by the Company with the Securities and
Exchange Commission (the "SEC") since January 1, 2005 (all reports filed by the
Company under the Securities Exchange Act of 1934, and the applicable rules and
regulations promulgated thereunder since January 1, 2006, including any
amendments thereto, collectively, the "SEC Reports"). As of their respective
dates, the SEC Reports complied in all material respects with the requirements
of the Securities Exchange Act of 1934, and the applicable rules and regulations
promulgated thereunder. As of the time of filing with the SEC, none of the SEC
Reports so filed contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
(b) The audited consolidated financial statements of the
Company (including any related notes thereto) included in the SEC Reports (the
"Year-End Statements") have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes thereto) and fairly present in
all material respects the consolidated financial position of the Company and its
subsidiaries at the respective dates thereof and the consolidated results of
operations, cash flows and changes in stockholders' equity of the Company and
its subsidiaries for the periods indicated. The unaudited consolidated financial
statements of the Company (including any related notes thereto) for all interim
periods included in the SEC Reports (together with the Year-End Statements, the
"Financial Statements") have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes thereto) and fairly present in
all material respects the consolidated financial position of the Company and its
subsidiaries at of the respective dates thereof and the consolidated results of
operations, cash flows and changes in stockholders' equity of the Company and
its subsidiaries for the periods indicated (subject to normal and recurring
period-end adjustments that have not been and are not expected to be material to
the Company and its subsidiaries taken as a whole).
(c) To the Company's knowledge, except as set forth in
the Financial Statements, the Schedule of Exceptions or the Operative
Agreements, or as contemplated by the Debt Financings, the Company has no
material liabilities, contingent or otherwise, other than (a) liabilities
incurred in the ordinary course of business subsequent to March 31, 2007 and (b)
liabilities or obligations under contracts and commitments incurred in the
ordinary course of business or otherwise not required under generally accepted
accounting principles to be reflected in the Financial Statements. Except as
disclosed in the Financial Statements, neither the Company nor any subsidiary is
a guarantor or indemnitor of any indebtedness of any other person, firm or
corporation, other than the Company or any subsidiary. The Company maintains a
system of accounting established and administered in accordance with generally
accepted accounting principles.
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2.15 Changes. Since March 31, 2007, except as would not
reasonably be expected to have a Material Adverse Effect and except as
contemplated by the transactions associated with the Operative Agreements and
the Debt Financings, there has not been:
(a) any change in the assets, liabilities, financial condition
or operating results of the Company and its subsidiaries, taken as a whole, from
that reflected in the Financial Statements, except changes in the ordinary
course of business;
(b) any material change or amendment to a material contract or
arrangement by which the Company or any of its assets or properties is bound or
subject;
(c) any sale, assignment, pledge, grant of security interest
or transfer of any patents, trademarks, copyrights, trade secrets or other
intangible assets;
(d) any resignation or termination of employment of any key
employee of the Company and its Operating Subsidiaries;
(e) any mortgage, pledge, transfer of a security interest in,
or lien, created by the Company or any subsidiary, with respect to any of its
material properties or assets, except liens for taxes not yet due or payable; or
(f) any agreement or commitment by the Company or any
subsidiary to do any of the things described in this Section 2.15.
2.16 Tax Returns, Payments and Elections. The Company has
timely filed all tax returns (federal, state and local) required to be filed by
it, which tax returns are true and correct in all material respects. The Company
has paid all taxes and other assessments due, if any, except those contested by
it in good faith that are listed in the Schedule of Exceptions. Except as set
forth in the Schedule of Exceptions, none of the Company's federal income tax
returns and none of its state income or franchise tax or sales or use tax
returns has ever been audited by governmental authorities and, as of the date
hereof, to the Company's knowledge, there is no such audit pending or
threatened. Since March 31, 2007, the Company has not incurred any taxes,
assessments or governmental charges other than in the ordinary course of
business and the Company has made adequate provisions on its books of account
for all taxes, assessments and governmental charges with respect to its
business, properties and operations for such period. Except as would not
constitute a Material Adverse Effect, the Company has withheld or collected from
each payment made to each of its employees, the amount of all taxes (including,
but not limited to, federal income taxes, Federal Insurance Contribution Act
taxes and Federal Unemployment Tax Act taxes) required to be withheld or
collected therefrom, and has paid the same to the proper tax receiving officers
or authorized depositories.
2.17 Permits. The Company and its Operating Subsidiaries have
all franchises, permits, licenses and any similar authority necessary for the
conduct of their respective businesses as now being conducted by them, the lack
of which would result in a Material Adverse Effect. Neither the Company nor any
Operating Subsidiary is in default in any material respect under any of such
franchises, permits, licenses or other similar authority. To the Company's
knowledge, neither the Company nor any Operating Subsidiary has received
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notification of proceedings relating to revocation or modification of any such
franchises, permits, licenses or other similar authority.
2.18 Environmental and Safety Laws. To the Company's
knowledge, the Company and its subsidiaries are in compliance in all material
respects with all applicable statutes, laws and regulations relating to the
environment or occupational health and safety and, to the Company's knowledge,
no material expenditures are or will be required in order to comply with any
such existing statute, law or regulation. Neither the Company nor any subsidiary
has received any written communication from a governmental authority with
respect to any material violation of such statutes, laws or regulations.
2.19 Disclosure. Neither this Agreement (including all the
exhibits and schedules hereto) nor any certificates made or delivered in
connection herewith contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements herein or therein not
misleading in light of the circumstances under which they were made.
2.20 Title to Property and Assets. The property and assets
that the Company or any subsidiary owns are owned by the Company or that
subsidiary free and clear of all mortgages, liens, loans and encumbrances,
except (i) for statutory liens for the payment of current taxes that are not yet
delinquent, (ii) for liens, encumbrances and security interests that arise in
the ordinary course of business and that do not secure indebtedness for borrowed
money (which, for clarity, the parties agree does not include accounts payables
or other trade payables, capital leases or accrued expenses) or guarantees
thereof, (iii) defects in title, none of which, individually or in the
aggregate, materially impair the Company's or the subsidiary's ownership or use
of such property or assets, and (iv) liens created in connection with the Debt
Financings. With respect to the property and assets the Company or any
subsidiary leases, the Company or the subsidiary, as applicable, is in
compliance with such leases except where the failure to be in compliance would
not constitute a Material Adverse Effect and, to its knowledge, holds a valid
leasehold interest free of any liens, claims or encumbrances, subject to clauses
(i), (ii) and (iii).
2.21 Employee Benefit Plans. The Company does not have or
contribute to any "employee benefit plan" as such term is defined in the
Employee Retirement Income Security Act of 1974 ("ERISA") that is subject to
Title IV of ERISA or the funding requirements of Section 412 of the Internal
Revenue Code of 1986, as amended.
2.22 Labor Agreements and Actions. Neither the Company nor any
subsidiary is bound by or subject to any contract, commitment or arrangement
with any labor union. Except as disclosed in the SEC Reports, neither the
Company nor any subsidiary is a party to or bound by any currently effective
material employment contract, deferred compensation agreement, bonus plan,
incentive plan, profit sharing plan, retirement agreement or other employee
compensation agreement. To the Company's knowledge, the Company and each
subsidiary has complied in all material respects with all applicable state and
federal equal employment opportunity and other laws related to employment.
2.23 Insurance. The Company and its Operating Subsidiaries
have in full force and effect the insurance policies listed on Schedule D
hereto. There are no claims in
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excess of $100,000 in the aggregate pending against the Company under any
insurance policies currently in effect, or by the Company against any of its
insurance carriers and covering the property, business or employees of the
Company, and all premiums due and payable with respect to the policies
maintained by the Company have been paid.
2.24 Fees. Except as set forth in the Schedule of Exceptions,
the Company has no contract, arrangement or understanding with any broker,
finder or similar agent with respect to the transactions contemplated by this
Agreement.
3. Representations and Warranties of the Investors. Each Investor
severally and not jointly hereby represents, warrants and covenants that:
3.1 Authorization. Such Investor has full power and authority
to enter into this Agreement, the Investor Rights Agreement, the Amended and
Restated Investor Rights Agreement and the Second Amended and Restated Investor
Rights Agreement, and each such agreement executed and delivered by such
Investor constitutes its valid and legally binding obligation, enforceable in
accordance with its terms, except (a) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors' rights generally, (b) as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies, and (c) to the extent the indemnification provisions
contained in the Investor Rights Agreement, the Amended and Restated Investor
Rights Agreement and the Second Amended and Restated Investor Rights Agreement
may be limited by applicable federal or state securities laws.
3.2 Purchase Entirely for Own Account. This Agreement is made
with such Investor in reliance upon such Investor's representation to the
Company, which by such Investor's execution of this Agreement such Investor
hereby confirms, that the Series A Preferred Stock to be received by such
Investor and the Conversion Shares issuable upon conversion thereof
(collectively, the "Securities") will be acquired for investment for such
Investor's own account, not as a nominee or agent, and not with a view to the
resale or distribution of any part thereof, and that such Investor has no
present intention of selling, granting any participation in or otherwise
distributing the same. By executing this Agreement, such Investor further
represents that such Investor does not have any contract, undertaking, agreement
or arrangement with any person to sell, transfer or grant participations to such
person or to any third person, with respect to any of the Securities.
3.3 Disclosure of Information. Such Investor believes it has
received all the information it considers necessary or appropriate for deciding
whether to purchase the Series A Preferred Stock. Such Investor further
represents that it has had an opportunity to ask questions and receive answers
from the Company regarding the terms and conditions of the offering of the
Series A Preferred Stock and the business, properties, prospects and financial
condition of the Company. The foregoing, however, does not limit or modify the
representations and warranties of the Company in Section 2 of this Agreement or
the right of the Investors to rely thereon.
3.4 Investment Experience. Such Investor is an investor in
public companies with relatively low market capitalizations and acknowledges
that it is able to fend for
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itself, can bear the economic risk of its investment, and has such knowledge and
experience in financial or business matters that it is capable of evaluating the
merits and risks of the investment in the Series A Preferred Stock. If other
than an individual, such Investor also represents it has not been organized for
the purpose of acquiring the Series A Preferred Stock.
3.5 Accredited Investor. Such Investor is an "accredited
investor" within the meaning of SEC Rule 501 of Regulation D, as presently in
effect.
3.6 Restricted Securities. Such Investor understands that the
Securities it is purchasing are characterized as "restricted securities" under
the federal securities laws inasmuch as they are being acquired from the Company
in a transaction not involving a public offering and that under such laws and
applicable regulations such Securities may be resold without registration under
the Act only in certain limited circumstances. In the absence of an effective
registration statement covering the Securities or an available exemption from
registration under the Act, the Securities must be held indefinitely. In this
connection, such Investor represents that it is familiar with SEC Rule 144, as
presently in effect, and understands the resale limitations imposed thereby and
by the Act, including without limitation the Rule 144 condition that current
information about the Company be available to the public.
3.7 Further Limitations on Disposition. Without in any way
limiting the representations set forth above, such Investor further agrees not
to make any disposition of all or any portion of the Securities unless and until
the transferee has agreed in writing for the benefit of the Company to be bound
by this Section 3 and the Investor Rights Agreement, the Amended and Restated
Investor Rights Agreement or the Second Amended and Restated Investor Rights
Agreement, as applicable, provided and to the extent that this Section 3 and the
Investor Rights Agreement, the Amended and Restated Investor Rights Agreement or
the Second Amended and Restated Investor Rights Agreement are then applicable,
and:
(a) There is then in effect a registration statement under
the Act covering such proposed disposition and such disposition is made in
accordance with such registration statement; or
(b) (i) Such Investor shall have notified the Company of
the proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and (ii) if
requested by the Company, such Investor shall have furnished the Company with an
opinion of counsel, reasonably satisfactory to the Company that such disposition
will not require registration of such shares under the Act.
Notwithstanding the provisions of subsections (a) and (b) above, no such
registration statement or opinion of counsel shall be necessary for a transfer
by an Investor to any affiliated venture capital fund or investment fund, or by
an Investor that is a partnership to a partner of such partnership or a retired
partner of such partnership who retires after the date hereof, or to the estate
of any such partner or retired partner or the transfer by gift, will or
intestate succession of any partner to his or her spouse or to the siblings,
lineal descendants or ancestors of such partner or his or her spouse, if the
transferee agrees in writing to be subject to the terms hereof to the same
extent as if he or she were an original Investor hereunder.
-14-
3.8 Legends. It is understood that the certificates evidencing
the Securities may bear one or all of the following legends:
(a) "THESE SECURITIES HAVE NOT BEEN REGISTERED OR
QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS
OF ANY STATE. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
UNLESS (A) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS, COVERING ANY SUCH TRANSACTION INVOLVING SAID
SECURITIES, (B) THE COMPANY RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY STATING THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION, OR (C) THE
COMPANY OTHERWISE SATISFIES ITSELF THAT SUCH TRANSACTION IS EXEMPT FROM
REGISTRATION."
(b) Any legend required by applicable laws.
3.9 Tax Advisors. Such Investor has reviewed with such
Investor's own tax advisors the federal, state and local tax consequences of
this investment, where applicable, and the transactions contemplated by this
Agreement. Each such Investor is relying solely on such advisors and not on any
statements or representations of the Company or any of its agents and
understands that each such Investor (and not the Company) shall be responsible
for such Investor's own tax liability that may arise as a result of this
investment or the transactions contemplated by this Agreement.
3.10 Legal Advisors. Such Investor acknowledges that such
Investor has had the opportunity to review this Agreement, the exhibits and the
schedules attached hereto and the transactions contemplated by this Agreement,
the Debt Financings, the Asset Purchase Agreement and the Merger Agreement with
such Investor's own legal counsel. Each such Investor is relying solely on such
Investor's legal counsel and, except with respect to the opinions to be
delivered to the Investors pursuant to Sections 5.5 and 8.4 hereof, not on any
statements or representations of the Company or any of the Company's agents,
including Xxxxxxxxxx Xxxxxxx PC or Xxxxxxxxxx & Xxxxx LLP, for legal advice with
respect to this investment or the transactions contemplated by this Agreement.
4. Conditions of Investors' and Company's Obligations at the
Closing. The obligations of each Investor and the Company under Section 1.1(c)
of this Agreement are subject to the satisfaction or, where permitted by law,
waiver on or before the Closing of each of the following conditions:
4.1 Stockholder Approval. At a duly convened meeting of the
stockholders of the Company, the stockholders of the Company shall have approved
(i) the First Restated Certificate, (ii) the issuance of the Series A Preferred
Stock to be issued at the Closing and the underlying Conversion Shares, (iii)
the change of control involved in issuing the Series A Preferred Stock to the
Investors hereunder, (iv) the Asset Purchase Agreement and the acquisition of
the TRS Business and (v) such other matters as shall be required by the rules of
Nasdaq.
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4.2 Asset Purchase. The closing contemplated by the Asset
Purchase Agreement shall have been consummated concurrently with the Closing
hereunder.
4.3 No Prohibition. No law, statute, rule, regulation,
executive order, decree, ruling, injunction or other order (whether temporary,
preliminary or permanent) shall have been enacted, entered, promulgated or
enforced by any United States or state court or any governmental entity which
prohibits, restrains or enjoins the consummation of the transactions
contemplated hereunder.
4.4 Qualifications. All authorizations, approvals or permits,
if any, of any governmental authority or regulatory body of the United States or
of any state that are required in connection with the lawful issuance and sale
of the Series A Preferred Stock in the Closing pursuant to this Agreement or
that are required to consummate the closing under the Asset Purchase Agreement
shall have been duly obtained and shall be effective as of the Closing, other
than such authorizations, approvals or permits or other filings which may be
timely made after the Closing or which, if not obtained, would not materially
adversely affect the Company upon consummation of the closings contemplated by
this Agreement, the Asset Purchase Agreement and the Debt Financings.
4.5 Listing. The Conversion Shares underlying the Series A
Preferred Stock to be issued at the Closing, and the shares of Common Stock
underlying the Series A Preferred Stock issued at the $1.5 million Stock
Purchase Agreement closing, shall have been authorized for listing for quotation
on Nasdaq, subject to official notice of issuance.
4.6 Restated Certificate. The First Restated Certificate shall
have been filed with the Secretary of State of the State of Delaware; provided
that, if the Subsequent Closing occurs simultaneously with the Closing, the
Second Restated Certificate, rather than the First Restated Certificate, shall
have been filed with the Secretary of State of the State of Delaware.
5. Conditions of Investors' Obligations at the Closing. The
obligations of each Investor under Section 1.1(c) of this Agreement are also
subject to the satisfaction or, where permitted by law, waiver on or before the
Closing of each of the following conditions:
5.1 Representations and Warranties. The representations and
warranties of the Company set forth in this Agreement shall be true and correct
in all respects (without giving effect to any "materiality," "Material Adverse
Effect" or similar qualifiers contained in any such representations and
warranties, other than any qualifiers contained in any representation or
warranty requiring disclosure in the Schedule of Exceptions of a list of items
qualified as to materiality) as of the Closing as though made on and as of such
date (unless any such representation or warranty is made only as of a specific
date, in which event such representation and warranty shall be so true and
correct as of such specified date), except where the failure of any such
representations and warranties to be so true and correct, in the aggregate, has
not had, and would not reasonably be expected to have, a Material Adverse
Effect.
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5.2 Performance. The Company shall have performed and complied
in all material respects with all agreements, obligations and conditions
contained in this Agreement that are required to be performed or complied with
by it on or before the Closing.
5.3 Compliance Certificate. The President of the Company shall
deliver to each Investor at the Closing a certificate in the form attached
hereto as Exhibit D stating that the conditions specified in Sections 5.1 and
5.2 have been fulfilled.
5.4 Board of Directors. The Company shall have taken all
necessary corporate action such that immediately following the Closing, Xxxxxx
Xxxxxxx and two other well respected business people designated by the Investors
shall be elected to the Company's board of directors; provided that, if the
Subsequent Closing occurs simultaneously with the Closing, the Company shall
have taken all necessary corporate action such that immediately following the
Closing, Xxxxxx Xxxxxxx and one other well respected business person designated
by the Investors shall be elected to the Company's board of directors.
5.5 Opinion of Company Counsel. Each Investor shall have
received from Xxxxxxxxxx Xxxxxxx PC, counsel for the Company, an opinion, dated
as of the Closing, substantially in the form attached hereto as Exhibit C.
5.6 Secretary's Certificate. Investors shall have received
from the Company's Secretary a certificate in form and substance reasonably
satisfactory to the Investors having attached thereto (a) the Company's
Certificate of Incorporation as in effect at the time of the Closing, (b) the
Company's Bylaws as in effect at the time of the Closing, and (c) resolutions
approved by the Company's board of directors authorizing the transactions
contemplated hereby.
5.7 Operative Agreements. Since (i) the date hereof, in the
case of the Operative Agreements related to the transactions contemplated by the
Merger Agreement, and (ii) August 1, 2007 in respect of all other Operative
Agreements, there shall have been no material amendment of, or material waiver
under, any of the Operative Agreements other than amendments and waivers
approved by Investors who have agreed to purchase a majority of the shares of
Preferred Stock sold pursuant to this Agreement, such approval not to be
unreasonably withheld or delayed. The Operative Agreements, any agreement
required to be executed pursuant to any of the Operative Agreements which is not
an exhibit to one or more of the Operative Agreements and all other proceedings
in connection with the transactions contemplated at the Closing shall be in form
and substance acceptable to Investors who have agreed to purchase a majority of
the shares of Preferred Stock sold pursuant to this Agreement, such acceptance
not to be unreasonably withheld or delayed. Each Investor shall have received
copies of each of the executed Operative Agreements (to the extent executed
prior to or at the Closing), including any exhibits and schedules thereto.
5.8 Debt Financing. All conditions precedent to the
consummation of the debt financing contemplated by the First Lien Debt
Commitment Letter shall have been satisfied, unless the failure to satisfy any
such condition precedent is due to any act or failure to act by the Investors.
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5.9 Material Adverse Effect. Since August 1, 2007, no event
shall have occurred which shall have had a Material Adverse Effect.
5.10 Amendment to Bylaws. The Company's Bylaws shall have been
amended to eliminate all provisions pertaining to a staggered board of directors
6. Conditions of the Company's Obligations at the Closing. The
obligations of the Company under Sections 1.1(c) of this Agreement are also
subject to the satisfaction or, where permitted by law, waiver on or before the
Closing of each of the following conditions:
6.1 Representations and Warranties. The representations and
warranties of the Investors set forth in this Agreement shall be true and
correct in all respects (without giving effect to any "materiality," "Material
Adverse Effect" or similar qualifiers contained in any such representations and
warranties as of the Closing as though made on and as of such date (unless any
such representation or warranty is made only as of a specific date, in which
event such representation and warranty shall be so true and correct as of such
specified date), except where the failure of any such representations and
warranties to be so true and correct, in the aggregate, has not had, and would
not reasonably be expected to have, a Material Adverse Effect.
6.2 Performance. The Investors shall have performed and
complied in all material respects with all agreements, obligations and
conditions contained in this Agreement that are required to be performed or
complied with by it on or before the Closing.
6.3 Payment of Purchase Price at Closing. The Investors shall
have delivered to the Company the aggregate purchase price owed by such
Investors for the Series A Preferred Stock being sold hereunder at the Closing.
6.4 Debt Financings. The closing of the transactions
contemplated by the First Lien Debt Commitment Letter shall have been
consummated concurrently with the Closing hereunder.
7. Conditions of Investors' and Company's Obligations at the
Subsequent Closing. With respect to the Subsequent Closing, the obligations of
each Investor and the Company under Section 1.1(d) of this Agreement are subject
to the satisfaction or, where permitted by law, waiver on or before the
Subsequent Closing of each of the following conditions:
7.1 Closing. The Closing shall have occurred.
7.2 Stockholder Approval. To the extent required by law, at a
duly convened meeting of the stockholders of the Company, the stockholders of
the Company shall have approved (i) the Second Restated Certificate, (ii) the
issuance of the Series A Preferred Stock to be issued at the Subsequent Closing
and the underlying Conversion Shares, (iii) the Merger Agreement and the
acquisition of HOVRS and (iv) such other matters as shall be required by the
rules of Nasdaq.
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7.3 Merger. The closing contemplated by the Merger Agreement
shall have been consummated concurrently with the Subsequent Closing hereunder.
7.4 No Prohibition. No law, statute, rule, regulation,
executive order, decree, ruling, injunction or other order (whether temporary,
preliminary or permanent) shall have been enacted, entered, promulgated or
enforced by any United States or state court or any governmental entity which
prohibits, restrains or enjoins the consummation of the transactions
contemplated hereunder.
7.5 Qualifications. All authorizations, approvals or permits,
if any, of any governmental authority or regulatory body of the United States or
of any state that are required in connection with the lawful issuance and sale
of the Series A Preferred Stock in the Subsequent Closing pursuant to this
Agreement or that are required to consummate the closing contemplated by the
Merger Agreement shall have been duly obtained and shall be effective as of the
Subsequent Closing, other than such authorizations, approvals or permits or
other filings which may be timely made after the Subsequent Closing or which, if
not obtained, would not materially adversely affect the Company or the Investors
upon consummation of the closings contemplated by this Agreement, the Merger
Agreement and the Debt Financings.
7.6 Listing. The Conversion Shares underlying the Series A
Preferred Stock to be issued at the Subsequent Closing shall have been
authorized for listing for quotation on Nasdaq, subject to official notice of
issuance.
8. Conditions of Investors' Obligations at the Subsequent Closing.
The obligations of each Investor under Section 1.1(d) of this Agreement are also
subject to the satisfaction or, where permitted by law, waiver on or before the
Subsequent Closing of each of the following conditions:
8.1 Representations and Warranties. The representations and
warranties of the Company set forth in Section 2 of this Agreement, other than
those set forth in Sections 2.8, 2.10, 2.12, 2.15, 2.17 and 2.18, shall be true
and correct in all respects (without giving effect to any "materiality,"
"Material Adverse Effect" or similar qualifiers contained in any such
representations and warranties, other than any qualifiers contained in any
representation or warranty requiring disclosure in the Schedule of Exceptions of
a list of items qualified as to materiality) as of the Subsequent Closing as
though made on and as of such date (unless any such representation or warranty
is made only as of a specific date, in which event such representation and
warranty shall be so true and correct as of such specified date), except where
the failure of any such representations and warranties to be so true and
correct, in the aggregate, has not had, and would not reasonably be expected to
have, a Material Adverse Effect.
8.2 Performance. The Company shall have performed and complied
in all material respects with all agreements, obligations and conditions
contained in this Agreement that are required to be performed or complied with
by it on or before the Subsequent Closing.
8.3 Compliance Certificate. The President of the Company shall
deliver to each Investor at the Subsequent Closing a certificate in the form
attached hereto as Exhibit D stating that the conditions specified in Sections
8.1 and 8.2 have been fulfilled.
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8.4 Opinion of Company Counsel. Each Investor shall have
received from Xxxxxxxxxx Xxxxxxx PC, counsel for the Company, an opinion, dated
as of the Subsequent Closing, substantially in the form attached hereto as
Exhibit C.
8.5 Secretary's Certificate. Investors shall have received
from the Company's Secretary a certificate in form and substance reasonably
satisfactory to the Investors having attached thereto (a) the Company's
Certificate of Incorporation as in effect at the time of the Subsequent Closing,
(b) the Company's Bylaws as in effect at the time of the Subsequent Closing, and
(c) resolutions approved by the Company's board of directors authorizing the
transactions contemplated hereby.
8.6 Debt Financings. All conditions precedent to the
consummation of the debt financing contemplated by the First Lien Debt
Commitment Letter and the Second Lien Debt Commitment Letter shall have been
satisfied, unless the failure to satisfy any such condition precedent is due to
any act or failure to act by the Investors.
8.7 Operative Agreements. Since the date hereof, there shall
have been no material amendment of, or material waiver under, any of the
Operative Agreements other than amendments and waivers approved by Investors who
have agreed to purchase a majority of the shares of Preferred Stock sold
pursuant to this Agreement, such approval not to be unreasonably withheld or
delayed. The Operative Agreements, any agreement required to be executed
pursuant to any of the Operative Agreements which is not an exhibit to one or
more of the Operative Agreements and all other proceedings in connection with
the transactions contemplated at the Subsequent Closing shall be in form and
substance acceptable to Investors who have agreed to purchase a majority of the
shares of Preferred Stock sold pursuant to this Agreement, such acceptance not
to be unreasonably withheld or delayed. Each Investor shall have received copies
of each of the executed Operative Agreements, including any exhibits and
schedules thereto.
8.8 Merger Agreement Conditions. Each of the closing
conditions set forth in the Merger Agreement shall have been satisfied (unless
waived with the consent of Investors who have agreed to purchase a majority of
the shares of Preferred Stock sold pursuant to this Agreement, such consent not
to be unreasonably withheld).
9. Conditions of the Company's Obligations. The obligations of the
Company to the Investors under this Agreement in connection with the Subsequent
Closing are subject to the satisfaction or, where permitted by law, waiver on or
before the Subsequent Closing of each of the following conditions by that
Investor:
9.1 Representations and Warranties. The representations and
warranties of the Investors set forth in this Agreement shall be true and
correct in all respects (without giving effect to any "materiality," "Material
Adverse Effect" or similar qualifiers contained in any such representations and
warranties as of the Subsequent Closing as though made on and as of such date
(unless any such representation or warranty is made only as of a specific date,
in which event such representation and warranty shall be so true and correct as
of such specified date), except where the failure of any such representations
and warranties to be so
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true and correct, in the aggregate, has not had, and would not reasonably be
expected to have, a Material Adverse Effect.
9.2 Performance. The Investors shall have performed and
complied in all materials respects with all agreements, obligations and
conditions contained in this Agreement that are required to be performed or
complied with by them before the Subsequent Closing.
9.3 Payment of Purchase Price at Subsequent Closing. The
Investors shall have delivered to the Company the aggregate purchase price owed
by such Investors for the Series A Preferred Stock being sold hereunder at the
Subsequent Closing.
9.4 Debt Financings. The closing of the transactions
contemplated by the Second Lien Debt Commitment Letter shall have been
consummated concurrently with the Subsequent Closing hereunder.
10. Covenants.
10.1 Documents. Subject to satisfaction of the conditions to
Closing, the Company and the Investors shall execute the Amended and Restated
Investor Rights Agreement at or prior to the Closing, and subject to
satisfaction of the conditions to the Subsequent Closing, the Company and the
Investors shall execute the Second Amended and Restated Investor Rights
Agreement at or prior to the Subsequent Closing; provided that, if the Closing
and the Subsequent Closing are substantially simultaneous, the Company and the
Investors shall execute the Second Amended and Restated Investor Rights
Agreement, rather than the Amended and Restated Investor Rights Agreement, at or
prior to the Closing.
10.2 Conduct of Business of the Company Pending the Closing.
Between the date of this Agreement and the Closing, except as otherwise
contemplated by this Agreement, the Operative Agreements, the Debt Financings,
the First Lien Debt Commitment Letter or the Second Lien Debt Commitment Letter,
as disclosed in the SEC Reports filed prior to the date of this Agreement, as
set forth in Section 5.1 of the Schedule of Exceptions, as required by law or
unless Investors who have agreed to purchase a majority of the shares of
Preferred Stock sold pursuant to this Agreement shall otherwise consent in
writing (which consent shall not be unreasonably withheld or delayed), (i) the
business of the Company and its Operating Subsidiaries shall be conducted in the
ordinary course of business and the Company shall use its commercially
reasonable efforts to preserve substantially intact its business organization,
and material business relationships, and (ii) neither the Company nor any of its
subsidiaries shall:
(a) amend or otherwise change its Certificate of
Incorporation or By-Laws or any similar governing instruments (except for any
subsidiaries that are not Operating Subsidiaries);
(b) enter into any agreement outside the ordinary course
of business;
-21-
(c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect to any
of its capital stock (except for any dividend or distribution by a subsidiary of
the Company to the Company or another wholly owned subsidiary of the Company);
(d) reclassify, combine, split, subdivide, redeem,
purchase or otherwise acquire any shares of capital stock of the Company (except
for the acquisition of shares in connection with cashless exercises of options
and warrants and customary repurchases effected in accordance with the Company's
employee benefit plans);
(e) authorize any material new capital expenditures which
are, in the aggregate, in excess of the Company's capital expenditure budget set
forth on Section 5.1 of the Schedule of Exceptions; or
(f) agree to take any of the actions described in Sections
10.2(a) through 10.2(e).
10.3 Stockholders Meeting. The Company, acting through its
Board of Directors, shall (a) as soon as reasonably practicable following the
date of this Agreement, take all action necessary to duly call, give notice of,
convene and hold a meeting of its stockholders (the "Stockholders Meeting") for
the purpose of obtaining stockholder approval of the proposals contemplated by
Sections 4.1 and 7.2 (the "Company Proposals"), (b) include in the Proxy
Statement the recommendation of the Board of Directors that the stockholders of
the Company grant such approvals (the "Recommendation") and (c) use its
reasonable commercial efforts to obtain such approvals; provided that the Board
of Directors of the Company may fail to make or may withdraw, modify or change
the Recommendation and/or may fail to use such efforts if in the absence of an
Alternate Financing Proposal, the Board of Directors of the Company determines
in good faith (after having consulted with outside counsel) that such conduct is
required for the Board to comply with its fiduciary duties under applicable law.
Notwithstanding anything to the contrary contained in this Agreement, unless
this Agreement is terminated in accordance with Section 11.1, the Company,
regardless of whether the Board of Directors of the Company has approved,
endorsed or recommended an Alternate Financing Proposal or has withdrawn,
modified or amended the Recommendation, but in compliance with the DGCL, shall
promptly call, give notice of, convene and hold the Stockholders Meeting as soon
as reasonably practicable after the date of this Agreement and will submit the
Company Proposals for approval by the stockholders of the Company at the
Stockholders Meeting.
10.4 Proxy Statement. Promptly following the date of this
Agreement, the Company shall prepare and file with the SEC a proxy statement
describing the Company Proposals (the "Proxy Statement"). The Company shall use
reasonable commercial efforts to resolve all SEC comments with respect to the
Proxy Statement as promptly as practicable after receipt thereof and to cause
the Proxy Statement in definitive form to be cleared by the SEC and mailed to
the Company's stockholders as promptly as reasonably practicable following
filing with the SEC.
10.5 Alternate Financing Proposals.
-22-
(a) The Company shall not, nor shall the Company authorize
or permit any of its subsidiaries or any of the directors, officers, employees,
attorneys or investment bankers (collectively, "Representatives") of the Company
or any of its subsidiaries to, (i) directly or indirectly, initiate, solicit or
knowingly encourage any inquiries with respect to, or the making of, any
Alternate Financing Proposal, (ii) engage in any negotiations or discussions
concerning, or provide access to its properties, books and records or any
confidential information or data to, any person relating to an Alternate
Financing Proposal, (iii) approve, endorse or recommend, or propose publicly to
approve, endorse or recommend, any Alternate Financing Proposal or (iv) execute
or enter into, any letter of intent, agreement in principle, merger agreement,
acquisition agreement or other similar agreement relating to any Alternate
Financing Proposal; provided, however, it is understood and agreed that any
determination or action by the Board of Directors of the Company permitted under
Section 10.5(b) or Section 10.5(c), shall not be deemed to be a breach or
violation of this Section 10.5(a) or, in the case of Section 10.5(b), give the
Investors a right to terminate this Agreement pursuant to Section 11.1(e)(ii).
The Company shall, and shall direct each of its Representatives to, immediately
cease any solicitations, discussions or negotiations with any person (other than
the parties hereto) that has made or indicated an intention to make an Alternate
Financing Proposal, in each case that exist as of the date hereof, subject in
each case to the rights of the Company set forth in Sections 10.5(b) and
10.5(c).
(b) Notwithstanding anything to the contrary in Section
10.5(a), nothing contained in this Agreement shall prevent the Company or its
Board of Directors from (i) taking and disclosing to its stockholders a position
contemplated by Rule 14d-9 and Rule 14e-2(a) promulgated under the Exchange Act
(or any similar communication to stockholders in connection with the making or
amendment of a tender offer or exchange offer) or from making any legally
required disclosure to stockholders with regard to an Alternate Financing
Proposal (provided that neither the Company nor its Board of Directors may
recommend any Alternate Financing Proposal unless permitted by Section 10.5(c)
and the Company may not fail to make, or withdraw, modify or change in a manner
adverse to the Investors all or any portion of, the Recommendation unless
permitted by Section 10.3); (ii) providing access to its properties, books and
records and providing information or data in response to a request therefor by a
person or group who has made an unsolicited Alternate Financing Proposal that
the Board of Directors of the Company determines in good faith is credible if
the Board of Directors receives from the person so requesting such information
an executed confidentiality agreement; (iii) contacting and engaging in
discussions with any person or group and their respective Representatives who
has made an unsolicited Alternate Financing Proposal solely for the purpose of
clarifying such Alternate Financing Proposal and any material terms thereof and
the conditions to consummation so as to determine whether there is a reasonable
possibility that such Alternate Financing Proposal could lead to a Superior
Proposal; (iv) contacting and engaging in any negotiations or discussions with
any person or group and their respective Representatives who has made an
unsolicited Alternate Financing Proposal that the Board of Directors of the
Company determines in good faith is credible (which negotiations or discussions
are not solely for clarification purposes); or (v) prior to obtaining all
necessary stockholder approvals, (A) withdrawing, modifying or changing in any
adverse manner the Recommendation (which, in the event of an Alternate Financing
Proposal, shall be permitted only to the extent permitted by Section 10.5(c)) or
(B) recommending an unsolicited Alternate Financing Proposal that the Board of
Directors of the Company determines in good faith is
-23-
credible, if and only to the extent that in connection with the foregoing
clauses (ii), (iv) and (v)(B), the Board of Directors of the Company shall have
determined in good faith, after consultation with its legal counsel and
financial advisors that, (x) in the case of clause (v)(B) above only, such
Alternate Financing Proposal would, if consummated, result in a Superior
Proposal and (y) in the case of clauses (ii) and (iv) above only, such Alternate
Financing Proposal constitutes a Superior Proposal or there is a reasonable
possibility that such actions in respect of such Alternate Financing Proposal
could lead to a Superior Proposal. The Company shall also promptly notify the
Investors within 48 hours of the receipt of any Alternate Financing Proposal
after the date hereof, which notice shall include the material terms of such
Alternate Financing Proposal.
(c) Notwithstanding anything in this Section 10.5 to the
contrary, if (A) the Company's Board of Directors determines in good faith,
after consultation with its financial advisors and outside legal counsel, in
response to an unsolicited Alternate Financing Proposal that did not otherwise
result from a material breach of Section 10.5(a), that such proposal is a
Superior Proposal, (B) the Company notifies the Investors in writing of the
terms of the Superior Proposal and the determinations described in clause (A)
above and of its intent to terminate this Agreement, (C) the Company's Board of
Directors takes into account any revised proposal made by the Investors to the
Company (a "Revised Investor Proposal") within three business days after the
Investors' receipt of such notice and again determines in good faith after
consultation with its outside legal counsel and independent financial advisors
that such Alternate Financing Proposal (as the same may have been modified or
amended) remains a Superior Proposal, and (D) the Company's Board of Directors,
if a Revised Investor Proposal has been made, and such Alternate Financing
Proposal had been modified or amended prior to the Board's re-determination
referred to in clause (C) above, (x) first, notifies the Investors of the
revised terms of such Alternate Financing Proposal; (y) second, establishes a
deadline, and notifies the Investors and the person making such Alternate
Financing Proposal thereof, to occur not less than three nor more than seven
business days after giving such notice, for the submission of final proposals
from both the Investors and such person; and (z) within seven business days
after such deadline, again determines in good faith after consultation with its
outside legal counsel and independent financial advisors that such Alternate
Financing Proposal remains a Superior Proposal and notifies the Investors of
such determination, the Company or its Board of Directors may terminate this
Agreement in order to enter into a definitive agreement with respect to such
Superior Proposal and may withdraw, modify or change the Recommendation;
provided, however, that the Company shall not terminate this Agreement pursuant
to this Section 10.5(c), and any purported termination pursuant to this Section
10.5(c) shall be void and of no force or effect, unless the Company prior to or
concurrently with such termination pursuant to this Section 10.5(c) pays to the
Investors the Company Termination Fee.
(d) For purposes of this Agreement, the following terms
shall have the meanings assigned below:
(i) "Alternate Financing Proposal" means any inquiry,
proposal or offer from any Person or group of Persons (other than the Investors)
relating to (i) any proposal or offer concerning an alternate financing for the
transactions contemplated by the Asset Purchase Agreement together with the
transactions contemplated by the Merger Agreement or (ii) any proposal or offer
concerning an acquisition of all or substantially all of the
-24-
issued and outstanding capital stock of the Company or an acquisition of all or
substantially all the assets of the Company.
(ii) "Superior Proposal" means any Alternate Financing
Proposal (x) on terms more favorable to the Company than the transactions
contemplated by this Agreement, taking into account all of the terms and
conditions of such proposal and this Agreement (including any proposal by the
Investors to amend the terms of the transactions contemplated by this Agreement,
the First Lien Debt Commitment Letter or the Second Lien Debt Commitment
Letter), and (y) that the Board of Directors of the Company determines in good
faith is reasonably capable of being completed, taking into account the identity
of the person or persons making the proposal and all financial, regulatory,
legal and other aspects of such proposal. The parties hereto understand and
agree that an Alternate Financing Proposal consisting of a proposal or offer
concerning an alternate financing for both the transactions contemplated by the
Asset Purchase Agreement and the transactions contemplated by the Merger
Agreement will not fail to be a Superior Proposal solely because the financing
proposed with respect to either the acquisition of the TRS Business or the
acquisition of HOVRS, independent of the other terms and financing comprising
such Alternate Financing Proposal, is not more favorable to the Company than the
corresponding portion of the financings contemplated by this Agreement, so long
as such Alternate Financing Proposal, taken as a whole, is on terms more
favorable to the Company than the transactions contemplated by this Agreement,
taking into account all of the terms and conditions of such proposal and this
Agreement (including any proposal by the Investors to amend the terms of the
transactions contemplated by this Agreement, the First Lien Debt Commitment
Letter or the Second Lien Debt Commitment Letter).
10.6 Further Assurances. Subject to the terms and conditions
of this Agreement, each party will use its reasonable commercial efforts to
take, or cause to be taken, all actions and to do, or cause to be done, all
things reasonably necessary, proper or advisable under applicable laws and
regulations to consummate the transactions contemplated by this Agreement.
10.7 Public Statements. Each of the Company and the Investors
agrees that no public release or announcement concerning the transactions
contemplated hereby shall be issued without the prior written consent of the
Company or the Investors, except as such release or announcement may be required
by law or the rules or regulations of any applicable securities exchange or
regulatory or governmental body to which the relevant party is subject, wherever
situated, in which case the party required to make the release or announcement
shall use its reasonable commercial efforts to provide the Company or the
Investors, as the case may be, reasonable time to comment on such release or
announcement in advance of such issuance, it being understood that the final
form and content of any such release or announcement, to the extent so required,
shall be at the final discretion of the disclosing party.
11. Termination, Expenses
11.1 Termination. This Agreement may be terminated:
(a) by mutual written consent of the Investors and the
Company;
-25-
(b) by the Investors or the Company if any court of
competent jurisdiction or other governmental entity shall have issued a final
order, decree or ruling or taken any other final action restraining, enjoining
or otherwise prohibiting the transactions contemplated hereunder and such order,
decree, ruling or other action is or shall have become final and nonappealable;
(c) by either the Investors or the Company if:
(i) the Closing shall not have occurred on or before
December 31, 2007; provided, however, that, if one or more Governmental Consents
(as defined in the Asset Purchase Agreement as in effect on the date hereof)
have not been obtained by December 31, 2007 and the Company exercises its option
under the Asset Purchase Agreement to extend the Termination Date thereunder to
March 31, 2008, Investors who have agreed to purchase a majority of the Shares
of Series A Preferred Stock to be sold in connection with the Closing may, in
their sole discretion, extend the date after which this Agreement may be
terminated pursuant to this clause (c)(i) to March 31, 2008 by delivering
written notice of such extension to the Company; provided, further, that the
right to terminate this Agreement pursuant to this Section 11.1(c)(i) shall not
be available to the party seeking to terminate unless (x) the Asset Purchase
Agreement shall have terminated (or, in the case of termination by the
Investors, the Asset Purchase Agreement would have terminated by its terms on or
before such date except that the Company has exercised its option thereunder to
extend the Termination Date to March 31, 2008) and (y) the party seeking to
terminate pursuant to this Section 11.1(c)(i) shall not have been the cause of
the failure of the Closing to occur on or before such date and such action or
failure to perform constitutes a breach of this Agreement; or
(ii) the Subsequent Closing shall not have occurred on
or before February 29, 2008; provided, however, that (A) the right to terminate
this Agreement pursuant to this Section 11.1(c)(ii) shall not be available to
the party seeking to terminate unless the party seeking to terminate pursuant to
this Section 11.1(c)(ii) shall not have been the cause of the failure of the
Subsequent Closing to occur on or before such date and such action or failure to
perform constitutes a breach of this Agreement, and (B) if Investors who have
agreed to purchase a majority of the Shares of Series A Preferred Stock to be
sold in connection with the Closing have, in their sole discretion, extended the
date after which this Agreement may be terminated pursuant to Section 11.1(c)(i)
to March 31, 2008, the Investors may not terminate this Agreement pursuant to
this Section 11.1(c)(ii) until March 31, 2008, but from and after March 1, 2008,
the conditions to the Subsequent Closing set forth in Section 8 shall be deemed
not satisfied and the Investors shall have no obligation to provide the
financing contemplated by Section 1.1(d) hereof.
-26-
(d) by the Company:
(i) if there shall have been a breach of any
representation, warranty, covenant or agreement on the part of the Investors
such that the conditions set forth in Sections 4, 6, 7 and 9 would not be
satisfied and, in either such case, such breach is not cured or curable by (A)
in respect of the Closing and the conditions thereto, the date on which all
conditions to consummate the Asset Purchase Agreement have been satisfied, and
(B) in respect of the Subsequent Closing and the conditions thereto, the date on
which all conditions to consummate the Merger Agreement have been satisfied; or
(ii) in accordance with, and subject to the terms and
conditions of, Section 10.5(c);
(e) by Investors who have agreed to purchase a majority of
the Shares of Series A Preferred Stock to be sold in connection with the
Closing:
(i) if there shall have been a breach of any
representation, warranty, covenant or agreement on the part of the Company
contained in this Agreement such that the conditions set forth in Sections 4, 5,
7 and 8 would not be satisfied and, in either such case, such breach is not
cured or curable by (A) in respect of the Closing and the conditions thereto,
the date on which all conditions to consummate the Asset Purchase Agreement have
been satisfied, and (B) in respect of the Subsequent Closing and the conditions
thereto, the date on which all conditions to consummate the Merger Agreement
have been satisfied; or
(ii) if the Board of Directors of the Company shall
have withdrawn, modified or changed the Recommendation in a manner adverse to
the Investors (it being understood and agreed that, for all purposes of this
Agreement (including Sections 10.3 and 10.5), a communication by the Board of
Directors of the Company to the stockholders of the Company in accordance with
Rule 14d-9(f) of the Exchange Act, or any similar communication to the
stockholders of the Company in connection with the commencement of a tender
offer or exchange offer, shall not be deemed to constitute a withdrawal,
modification or change of the Recommendation) or shall have recommended to the
stockholders of the Company an Alternate Financing Proposal, or shall have
resolved to effect any of the foregoing (it being agreed that the taking of any
action by the Company, its Board of Directors or any of its Representatives of
any of the actions permitted by Section 10.5(b) shall not give rise to a right
to terminate pursuant to this clause (ii)).
(f) by either the Company or by Investors who have agreed
to purchase a majority of the Shares of Series A Preferred Stock to be sold
hereunder if, upon a vote taken on the Company Proposals at the Stockholders
Meeting or any postponement or adjournment thereof, the Company Proposals shall
not have been approved by the requisite vote of the stockholders of the Company.
11.2 Effect of Termination.
(a) In the event of the termination of this Agreement
pursuant to Section 11.1, this Agreement shall forthwith become void and there
shall be no liability or
-27-
obligation on the part of any party hereto, except as provided in this Section
11.2 and Section 12, which shall survive such termination; provided, however,
that nothing herein shall relieve any party from liability for any breach of
this Agreement.
(b) In the event that this Agreement is terminated by the
Company pursuant to Section 11.1(d)(ii), then no later than two (2) Business
Days after the execution of any letter of intent, agreement in principal,
commitment letter or definitive agreement with respect to an alternative
financing or similar agreement relating to any Alternate Financing Proposal, the
Company shall pay $2,200,000 (the "Company Termination Fee") to the Investors,
at or prior to the time of termination, payable by wire transfer of same day
funds. Such amount shall be allocated among the Investors in proportion to the
number of shares of Series A Preferred Stock that each Investor has agreed to
purchase pursuant to this Agreement.
(c) Each of the Company and the Investors acknowledges
that the agreements contained in this Section 11.2 are an integral part of the
transactions contemplated by this Agreement. In the event that the Company shall
fail to pay the Company Termination Fee when due, the Company shall reimburse
the Investors for all reasonable costs and expenses actually incurred or accrued
by the Investors (including reasonable fees and expenses of one law firm) in
connection any action (including the filing of any lawsuit) taken to collect
payment of such amount, together with interest on such unpaid amount at the
prime lending rate prevailing during such period as published in The Wall Street
Journal, calculated on a daily basis from the date such amounts were required to
be paid to the date of actual payment.
12. Miscellaneous.
12.1 Survival. The warranties, representations and covenants
of the Company and Investors contained in or made pursuant to this Agreement
shall survive the execution and delivery of this Agreement and the Closing and
shall in no way be affected by any investigation of the subject matter thereof
made by or on behalf of the Investors or the Company.
12.2 Successors and Assigns. Except as otherwise provided
herein, the terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors and assigns of the parties
(including transferees of any securities). Nothing in this Agreement, express or
implied, is intended to confer upon any party, other than the parties hereto or
their respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
12.3 Governing Law. This Agreement shall be governed by and
construed under the laws of the State of New York without regard to principles
of conflicts of law.
12.4 Titles and Subtitles. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
12.5 Notices. All notices required or permitted hereunder
shall be in writing and shall be deemed effectively given: (a) upon personal
delivery to the party to be notified; (b) when sent by confirmed telex or
facsimile or by electronic mail if sent during
-28-
normal business hours of the recipient, if not, then on the next business day;
(c) five days after having been sent by registered or certified mail, return
receipt requested, postage prepaid; or (d) one day after deposit with a
nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent to the address
as set forth on the signature page hereof or at such other address as such party
may designate by ten days' advance written notice to the other parties hereto.
12.6 Finder's Fee. Each party represents that, except as set
forth in the Schedule of Exceptions or in this Section 12.6, it neither is nor
will be obligated for any finder's fee or commission in connection with this
transaction. Each Investor agrees to indemnify and to hold harmless the Company
from any liability for any commission or compensation in the nature of a
finder's fee (and the costs and expenses of defending against such liability or
asserted liability) for which such Investor or any of its officers, partners,
employees or representatives is responsible. The Company agrees to indemnify and
hold harmless each Investor from any liability for any commission or
compensation in the nature of a finders' fee (and the costs and expenses of
defending against such liability or asserted liability) for which the Company or
any of its officers, employees or representatives is responsible.
12.7 Expenses; Attorneys' Fees. If any action at law or in
equity is necessary to enforce or interpret the terms of this Agreement, the
First Restated Certificate, the Second Restated Certificate, or the Investor
Rights Agreement, the Amended and Restated Investor Rights Agreement or the
Second Amended and Restated Investor Rights Agreement, the prevailing party
shall be entitled to reasonable attorneys' fees, costs and necessary
disbursements in addition to any other relief to which such party may be
entitled.
12.8 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), (i) prior to the Closing, only with the written consent of the
Company and Investors acquiring in the aggregate more than half the shares of
Series A Preferred Stock to be sold pursuant hereto, (ii) after the Closing but
prior to the Subsequent Closing, only with the written consent of the Company,
Investors acquiring in the aggregate more than half of the shares of Series A
Preferred Stock to be issued at the Subsequent Closing and the holders of a
majority of the Common Stock issuable or issued upon conversion of the Series A
Preferred Stock sold at the Closing pursuant to this Agreement and (iii) after
the Subsequent Closing, only with the written consent of the Company and the
holders of a majority of the Common Stock issuable or issued upon conversion of
the Series A Preferred Stock sold pursuant to this Agreement. Any amendment or
waiver effected in accordance with this Section 12.8 shall be binding upon each
holder of any securities purchased under this Agreement (including securities
into which such securities are convertible) at the time outstanding, each future
holder of all such Series A Preferred Stock and the Company. The failure of any
party to assert any rights or remedies shall not constitute a waiver of such
rights or remedies.
-29-
12.9 Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
12.10 Aggregation of Stock. All shares of the Series A
Preferred Stock held or acquired by affiliated entities or persons shall be
aggregated together for the purpose of determining the availability of any
rights under this Agreement.
12.11 Entire Agreement. This Agreement and the documents,
schedules and exhibits referred to herein constitute the entire agreement among
the parties and no party shall be liable or bound to any other party in any
manner by any warranties, representations or covenants except as specifically
set forth herein or therein.
12.12 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[SIGNATURE PAGES FOLLOW]
-30-
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
COMPANY:
GOAMERICA, INC.
By: /s/ Xxxxxx X. Xxxx
-----------------------------------------
Name: Xxxxxx X. Xxxx
Title: Chief Executive Officer
Address: 000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn.: Chief Executive Officer
With a copy to:
Xxxxxxxxxx Xxxxxxx PC
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn.: Xxxxx X. Xxxxxxxxx, Esq.
Fax No. (000) 000-0000
[SIGNATURE PAGE TO AMENDED AND RESTATED STOCK PURCHASE AGREEMENT]
INVESTOR:
CCP A, L.P.
By: CLEARLAKE CAPITAL PARTNERS, LLC
Its General Partner
By: CCG Operations, LLC
Its Managing Member
By: /s/ Xxxxxx Xxxxxxx
-----------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Authorized Signatory
Address: 000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Fax No. (000) 000-0000
With a copy to:
Milbank, Tweed, Xxxxxx & XxXxxx LLP
000 X. Xxxxxxxx Xx., 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attn.: Xxxxxxxx X. Xxxxxxxxx, Esq.
Fax No. (000) 000-0000
[SIGNATURE PAGE TO AMENDED AND RESTATED STOCK PURCHASE AGREEMENT]
SCHEDULE A
Schedule of Investors
Part I
Shares of
Investor Series A Preferred Stock Purchase Price
------------------------------------------ ----------------------------------- ----------------------------
CCP A, L.P. 6,479,691 $33,500,002.47
--------- --------------
Total 6,479,691 $33,500,002.47
Part II
Shares of
Investor Series A Preferred Stock Purchase Price
------------------------------------------ ----------------------------------- ----------------------------
CCP A, L.P. 967,118 $5,000,000.06
--------- --------------
Total 967,118 $5,000,000.06
Schedule A-1
