MERGER AGREEMENT AND
PLAN OF REORGANIZATION
BY AND AMONG
GOAMERICA, INC.
GOAMERICA ACQUISITION III CORP.
AND
OUTBACK RESOURCE GROUP, INC.
TABLE OF CONTENTS
ARTICLE I
THE MERGER.....................................................................1
1.1 Merger; Effective Time of the Merger................................1
1.2 Closing; Closing Date...............................................1
1.3 Effects of the Merger...............................................2
1.4 Merger Consideration................................................2
1.5 Tax-Free Reorganization.............................................3
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS;
EXCHANGE OF CERTIFICATES.......................................................3
2.1 Effect on Capital Stock.............................................3
2.2 Exchange of Certificates............................................4
2.3 Escrow of Shares....................................................6
2.4 Taking of Necessary Action; Further Action..........................6
ARTICLE III
REPRESENTATIONS AND WARRANTIES.................................................6
3.1 Representations and Warranties of OutBack and the Major
Shareholders........................................................6
3.2 Representations and Warranties of GoAmerica and Sub................19
ARTICLE IV
CONDUCT AND TRANSACTIONS PRIOR TO EFFECTIVE TIME; ADDITIONAL AGREEMENTS......21
4.1 Conduct of Business................................................21
4.2 Access to Information..............................................23
4.3 OutBack Shareholders' Consent......................................23
4.4 Preparation of Proxy Statement or Information Statement............23
4.5 Tax Matters........................................................24
4.6 Breach of Representations and Warranties...........................24
4.7 Consents...........................................................24
4.8 Commercially Reasonable Efforts....................................24
4.9 Performance by Sub.................................................24
4.10 FIRPTA.............................................................25
4.11 Legal Conditions to the Merger.....................................25
4.12 Employee Matters...................................................25
4.13 Expenses and Transfer Taxes........................................26
4.14 Issuance of Share Certificates.....................................26
4.15 Public Announcements...............................................26
4.16 Confidentiality....................................................27
4.17 Exclusivity........................................................27
4.18 Termination of OutBack Investor Rights.............................28
4.19 OutBack Stock Options..............................................28
4.20 OutBack Notes Payable..............................................28
ARTICLE V
CONDITIONS PRECEDENT..........................................................29
5.1 Conditions to Each Party's Obligation to Effect the Merger.........29
5.2 Conditions of Obligations of GoAmerica and Sub.....................30
5.3 Conditions of Obligations of OutBack...............................31
ARTICLE VI
INDEMNIFICATION...............................................................32
6.1 Indemnification by the Shareholders................................32
6.2 Procedures Relating to Indemnification.............................33
6.3 Limitation on Indemnification......................................34
6.4 Exclusive Remedy...................................................35
6.5 Event of Fraud.....................................................35
6.6 Shareholder Representative.........................................35
6.7 Breach of Representation by GoAmerica..............................36
ARTICLE VII
TERMINATION...................................................................36
7.1 Termination........................................................36
ARTICLE VIII
GENERAL PROVISIONS............................................................37
8.1 Survival of Representations, Warranties and Agreements.............37
8.2 Amendment..........................................................37
8.3 Extension; Waiver..................................................37
8.4 Notices............................................................37
8.5 Interpretation.....................................................39
8.6 Counterparts.......................................................39
8.7 Entire Agreement...................................................39
8.8 No Transfer........................................................39
8.9 Severability.......................................................39
8.10 Other Remedies.....................................................39
8.11 Further Assurances.................................................40
8.12 Absence of Third Party Beneficiary Rights..........................40
8.13 Mutual Drafting....................................................40
8.14 Governing Law......................................................40
8.15 Knowledge..........................................................40
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EXHIBITS:
EXHIBIT 1.1 CALIFORNIA AGREEMENT AND PLAN OF MERGER
EXHIBIT 1.4(b) WARRANT AGREEMENT
EXHIBIT 2.3 ESCROW AGREEMENT
EXHIBIT 5.2(f) INVENTION ASSIGNMENT AGREEMENT
EXHIBIT 5.2(g) NON-COMPETE AGREEMENT
EXHIBIT 5.2(k) SHARE RESTRICTION AGREEMENT
SCHEDULES:
SCHEDULE 4.20 NOTES PAYABLE
SCHEDULE 5.2(g) MAJOR SHAREHOLDERS TO EXECUTE NON-COMPETE AGREEMENTS
SCHEDULE 5.2(k) MAJOR SHAREHOLDERS TO EXECUTE SHARE RESTRICTION AGREEMENT
SCHEDULE 5.3(e) EMPLOYEES TO RECEIVE OFFER LETTERS
OUTBACK DISCLOSURE SCHEDULE
GOAMERICA DISCLOSURE SCHEDULE
MERGER AGREEMENT AND PLAN OF REORGANIZATION, dated as of November 13,
2001 (this "Agreement"), by and among GOAMERICA, INC. a Delaware corporation
("GoAmerica"), GOAMERICA ACQUISITION III CORP., a Delaware corporation and a
direct wholly-owned subsidiary of GoAmerica ("Sub"), OUTBACK RESOURCE GROUP,
INC., a California corporation ("OutBack") and, as to Section 2.3, Section 3.1
and Article VI only, the shareholders of OutBack as set forth on the signature
page hereto (the "Major Shareholders").
The Board of Directors of each of the above corporations, respectively,
deem it advisable for the welfare and best interests of said corporations and
for the best interests of the respective shareholders of said corporations that
Sub be merged with and into OutBack on the terms and conditions hereinafter set
forth and in accordance with the provisions of the California General
Corporation Law and the Delaware General Corporation Law. In such merger, the
shareholders of OutBack will receive shares of Common Stock and Warrants to
purchase shares of Common Stock of GoAmerica, in conversion of their shares of
OutBack Common Stock (as defined in Section 3.1(d) below).
NOW, THEREFORE, in consideration of the foregoing premises, the
provisions and the respective agreements hereinafter set forth, and in order to
set forth the terms and conditions of the merger of Sub with and into OutBack
and the mode of carrying the same into effect, the parties hereby agree as
follows:
ARTICLE I
THE MERGER
1.1 Merger; Effective Time of the Merger.
Subject to the terms and conditions of this Agreement and of the
Agreement and Plan of Merger attached hereto as Exhibit 1.1 (the "Merger
Agreement"), Sub will be merged with and into OutBack (the "Merger") in
accordance with the California General Corporation Law and the Delaware General
Corporation Law. In accordance with the provisions of this Agreement, the Merger
Agreement, together with required certificates, if any, shall be filed in
accordance with the California General Corporation Law on the Closing Date (as
defined in Section 1.2 below), a Certificate of Merger shall be filed in
accordance with the Delaware General Corporation Law on the Closing Date and,
except as otherwise set forth herein, each issued and outstanding share of
OutBack Common Stock shall be converted into (a) shares of Common Stock, par
value $.01 per share, of GoAmerica ("GoAmerica Common Stock") and (b) warrants
to purchase GoAmerica Common Stock ("GoAmerica Warrants"). The Merger shall
become effective upon confirmation of the filing of the Merger Agreement and
such other certificates with the Secretary of State of the State of California
(the date of confirmation of such filing being hereinafter referred to as the
"Effective Date of the Merger" and the time of confirmation of such filing being
hereinafter referred to as the "Effective Time of the Merger").
1.2 Closing; Closing Date.
The closing of the Merger (the "Closing") will take place as soon as
practicable on the later of (a) the date on which OutBack shareholder approval
is obtained, as contemplated by
Section 4.3 below or (b) the first business day after satisfaction or waiver of
the latest to occur of the conditions set forth in Article V (the "Closing
Date"), at the offices of Xxxx and Xxxx LLP, 000 Xxxxxxx Xxxx Xxxx, Xxxxxxxxx,
Xxx Xxxxxx 00000, unless a different date is agreed to by the parties hereto.
The Closing will be effective as of the Effective Time of the Merger.
1.3 Effects of the Merger.
At the Effective Time of the Merger, (a) the separate existence of Sub
shall cease and Sub shall be merged with and into OutBack (Sub and OutBack are
sometimes referred to collectively herein as the "Constituent Corporations" and
OutBack after the Merger is sometimes referred to herein as the "Surviving
Corporation"), (b) OutBack shall be a wholly-owned subsidiary of GoAmerica; (c)
the Articles of Incorporation of OutBack, as amended, shall be the Articles of
Incorporation of the Surviving Corporation, (d) the Bylaws of OutBack, as
amended, shall be the Bylaws of the Surviving Corporation, (e) Xxxxx Xxxxxxxxx,
Xxxxxx Xxxx, Xxxxxxx Xxxxxx and Xxxxx Xxxxxxxxx shall be the directors of the
Surviving Corporation (it being a condition to the Closing that all directors of
OutBack other than Xxxxx Xxxxxxxxx shall have resigned on or prior to the
Effective Time of the Merger), (f) Xxxxx Xxxxxxxxx (Chairman), Xxxxxx Xxxx
(Executive Vice President), Xxxxxxx Xxxxxx (Chief Financial Officer, Treasurer
and Secretary) and Xxxxx Xxxxxxxxx (President) shall be the officers of the
Surviving Corporation and (g) the Merger shall, from and after the Effective
Time of the Merger, have all the effects provided by applicable law, including
Section 1107 of the California General Corporation Law. GoAmerica agrees that it
will not amend (or permit to be amended) the Articles of Incorporation, as
amended, or the Bylaws of OutBack to adversely affect the rights of the current
OutBack officers or directors to indemnification by OutBack.
1.4 Merger Consideration.
The aggregate consideration to be paid in the Merger (the "Merger
Consideration") shall consist of:
(a) Stock Consideration. An aggregate issuance to OutBack
shareholders of 135,000 shares of GoAmerica Common Stock minus that number of
shares that would have been allocated pursuant to this Section 1.4 to the
Dissenting Shareholders (as defined in Section 2.1(d) below) had they not
exercised their dissenter's rights under the California General Corporation Law
(the "Merger Shares"). The Merger Shares shall not be registered pursuant to the
Securities Act of 1933, as amended (the "Securities Act"). Except as set forth
in Section 2.1(d) and subject to Section 2.1(e) and Section 2.3, each holder of
OutBack Common Stock shall receive that number of Merger Shares as constitutes
such shareholder's pro rata portion thereof. Each OutBack shareholder's pro rata
portion of the Merger Shares shall be calculated by multiplying the number of
shares of OutBack Common Stock held of record by that shareholder by the
quotient obtained by dividing 135,000 by the number of shares of OutBack Common
Stock outstanding immediately prior to the Effective Time of the Merger. The
value per share of a Merger Share shall be equal to the average closing price
per share of GoAmerica Common Stock on the Nasdaq National Market for the five
trading days immediately preceding the Closing Date (the " Merger Share Price").
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(b) Warrant Consideration. An aggregate issuance to OutBack
shareholders of GoAmerica Warrants to purchase 67,500 shares minus that number
of GoAmerica Warrants that would have been allocated pursuant to this Section
1.4 to the Dissenting Shareholders had they not exercised their dissenter's
rights under the California General Corporation Law (the "Merger Warrants"). The
exercise price of the Merger Warrants shall be $3.00 per share and the Merger
Warrants shall be exercisable for a term of three (3) years following the
Closing and shall be evidenced by a Warrant Agreement in substantially the form
attached hereto as Exhibit 1.4(b). Except as set forth in Section 2.1(d) and
subject to Section 2.1(e) each holder of OutBack Common Stock shall receive that
number of Merger Warrants as constitutes such shareholder's pro rata portion
thereof. Each OutBack shareholder's pro rata portion of the Merger Warrants
shall be calculated by multiplying the number of shares of OutBack Common Stock
held of record by that shareholder by the quotient obtained by dividing 67,500
by the number of shares of OutBack Common Stock outstanding immediately prior to
the Effective Time of the Merger (the "Warrant Conversion Ratio").
(c) Adjustment for Stock Splits, Stock Dividends, etc. To the
extent GoAmerica implements any stock split, stock dividend, stock distribution
or other reclassification of GoAmerica Common Stock between the date hereof and
the Effective Time of the Merger, the number of Merger Shares to be issued
pursuant to paragraph (a) above, the number of GoAmerica Warrants to be issued
pursuant to paragraph (b) above and the exercise price for such GoAmerica
Warrants shall be adjusted to account for such stock split, etc.
1.5 Tax-Free Reorganization.
The Merger is intended to be a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code").
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
2.1 Effect on Capital Stock.
As of the Effective Time of the Merger, by virtue of the Merger and
without any action on the part of the holders of any shares of capital stock of
GoAmerica, Sub or OutBack:
(a) Capital Stock of Sub. All issued and outstanding shares of
Common Stock of Sub shall be converted into an aggregate of 1,000 shares of
Common Stock of the Surviving Corporation. Each stock certificate of Sub
evidencing ownership of any such shares shall be deemed to evidence ownership of
such number of shares of Common Stock of the Surviving Corporation.
(b) Cancellation of Treasury Stock of OutBack. All shares of
capital stock of OutBack held as treasury stock, if any, shall be canceled and
no GoAmerica Common Stock, GoAmerica Warrants or other consideration shall be
delivered in conversion thereof.
(c) Conversion of Capital Stock of OutBack. All issued and
outstanding shares of OutBack Common Stock shall be converted into and become
the right to receive,
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subject to Section 2.1(d), the Merger Consideration in accordance with Section
1.4 hereof. All shares of OutBack Common Stock converted in accordance with this
Section 2.1(c) shall no longer be deemed to be outstanding and shall
automatically be canceled and retired and shall cease to exist. Each holder of
record of any such shares at the Effective Time of the Merger shall cease to
have any rights with respect thereto, except the right to receive their
respective portion of the Merger Consideration into which their shares of
OutBack Common Stock are converted.
(d) Dissenters' Rights. If holders of OutBack Common Stock are
entitled to dissenters' rights at the Effective Time of the Merger under Chapter
13 of the California General Corporation Law, the shares as to which dissenters'
rights are available ("Dissenting Shares") shall not be converted into GoAmerica
Common Stock or GoAmerica Warrants on or after the Effective Time of the Merger,
but shall instead be converted into the right to receive from the Surviving
Corporation such consideration as may be determined to be due with respect to
such Dissenting Shares pursuant to the California General Corporation Law. The
Surviving Corporation shall give GoAmerica prompt notice of any demand received
by the Surviving Corporation for appraisal of OutBack Common Stock, and
GoAmerica shall have the right to participate in all negotiations and
proceedings with respect to such demand. The Surviving Corporation agrees that,
except with the prior written consent of GoAmerica, or as required under the
California General Corporation Law, it will not voluntarily make any payment
with respect to, or settle or offer to settle, any such demand for appraisal.
Each holder of Dissenting Shares (a "Dissenting Shareholder") who, pursuant to
the provisions of Chapter 13 of the California General Corporation Law, becomes
entitled to payment of the value of shares of OutBack Common Stock shall receive
payment therefor (but only after the value therefor shall have been agreed upon
or finally determined pursuant to such provisions). In the event of the legal
obligation, after the Effective Time of the Merger, to deliver shares of
GoAmerica Common Stock and GoAmerica Warrants to any Dissenting Shareholder who
shall have failed to make an effective demand for appraisal or shall have lost
his, her or its status as a Dissenting Shareholder, GoAmerica shall issue and
deliver, upon surrender by such Dissenting Shareholder of his, her or its
certificate or certificates representing shares of OutBack Common Stock, the
shares of GoAmerica Common Stock and the GoAmerica Warrants to which such
Dissenting Shareholder is then entitled under this Section 2.1 and Chapter 13 of
the California General Corporation Law. GoAmerica will pay on behalf of the
Surviving Corporation all sums due to holders of Dissenting Shares on account of
such shares.
(e) Fractional Shares. Fractional shares of GoAmerica Common Stock
shall not be issued in the Merger. In the event that fractional shares would
otherwise be issuable upon the calculations set forth in Section 2.1(c),
GoAmerica shall pay to the holders of OutBack Common Stock the cash value of any
fractional share interest resulting therefrom (to be determined based upon
Merger Share Price). If upon application of the Warrant Conversion Ratio the
number of shares of GoAmerica Common Stock underlying any Merger Warrant would
have a fractional amount, such fractional amount must be rounded to the nearest
whole share.
2.2 Exchange of Certificates.
(a) Exchange Agent. GoAmerica shall act as exchange agent in the
Merger. OutBack hereby consents to such appointment.
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(b) GoAmerica to Provide Common Stock. Promptly after the Effective
Time of the Merger and subject to fulfillment of the obligations set forth in
Section 2.2(c) below, GoAmerica shall make available for exchange in accordance
with this Article II, through such reasonable procedures as GoAmerica may adopt,
the shares of GoAmerica Common Stock and the GoAmerica Warrants issuable
pursuant to Section 1.4 and Section 2.1 above in conversion of all of the
outstanding shares of OutBack Common Stock for which dissenter's rights were not
exercised.
(c) Exchange Procedures. Within ten (10) business days after the
Effective Time of the Merger, GoAmerica shall mail to each holder of record of a
certificate or certificates which immediately prior to the Effective Time of the
Merger represented outstanding shares of OutBack Common Stock (the
"Certificates") whose shares are being converted into GoAmerica Common Stock and
GoAmerica Warrants pursuant to Section 1.4 and Section 2.1 hereof, (i) a letter
of transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon delivery of the
Certificates to GoAmerica and which shall be in such form and have such other
provisions as GoAmerica may reasonably specify), and (ii) instructions for use
in effecting the surrender of the Certificates in exchange for GoAmerica Common
Stock and GoAmerica Warrants. Upon surrender of a Certificate for cancellation
to GoAmerica or to such other agent or agents as may be appointed thereby,
together with such letter of transmittal, duly executed, the holder of such
Certificate shall be entitled to receive in conversion thereof the number of
shares of GoAmerica Common Stock and the number of GoAmerica Warrants to which
the holder of OutBack Common Stock is entitled pursuant to Section 1.4 and
Section 2.1 hereof. The Certificate so surrendered shall forthwith be canceled.
In the event of a transfer of ownership of OutBack Common Stock which is not
registered on the transfer records of OutBack, the appropriate number of shares
of GoAmerica Common Stock and GoAmerica Warrants may be delivered to a
transferee if the Certificate representing such OutBack Common Stock is
presented to GoAmerica and accompanied by all documents required to evidence and
effect such transfer and to evidence that any applicable stock transfer taxes
have been paid. From and after the Effective Time of the Merger, until
surrendered as contemplated by this Section 2.2, subject to the provisions of
Section 2.1(d), each Certificate shall be deemed for all corporate purposes to
evidence the number of shares of GoAmerica Common Stock and the number of
GoAmerica Warrants into which the shares of OutBack Common Stock represented by
such Certificate have been converted. If any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact, in form and
substance acceptable to GoAmerica, by the person claiming such Certificate to be
lost, stolen or destroyed, and complying with such other conditions as GoAmerica
may reasonably impose (including the execution of an indemnification undertaking
in favor of the Surviving Corporation and GoAmerica with respect to the
Certificate alleged to be lost, stolen or destroyed), GoAmerica will deliver to
such person such shares of GoAmerica Common Stock and such GoAmerica Warrants
and cash for fractional shares of GoAmerica Common Stock, if any, as may be
required pursuant to Section 1.4 and Section 2.1 hereof.
(d) No Further Ownership Rights in Capital Stock of OutBack. All
GoAmerica Common Stock and GoAmerica Warrants delivered upon the surrender for
exchange of shares of OutBack Common Stock in accordance with the terms hereof
shall be deemed to have been delivered in full satisfaction of all rights
pertaining to such shares of OutBack Common Stock. There shall be no further
registration of transfers on the stock transfer books of
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the Surviving Corporation of the shares of OutBack Common Stock which were
outstanding immediately prior to the Effective Time of the Merger. If, after
the Effective Time of the Merger, Certificates are presented to the Surviving
Corporation for any reason, they shall be canceled and converted as provided in
this Article II, provided that (i) the presenting holder is listed on the
OutBack Shareholder List (as provided in Section 5.2(e) below) as a holder of
outstanding OutBack Common Stock (or can document, to the reasonable
satisfaction of the Surviving Corporation, the transfer to such presenting
holder by a holder listed on the OutBack Shareholder List as a holder of
outstanding OutBack Common Stock) and (ii) neither the Surviving Corporation
nor GoAmerica shall be obligated to issue, in the aggregate, more than the
number of shares of GoAmerica Common Stock and GoAmerica Warrants determined
pursuant to the calculations set forth in Section 1.4 above.
2.3 Escrow of Shares.
At the Effective Time of the Merger, GoAmerica shall deposit twenty
(20%) of the Merger Shares (the "Escrow Shares") with an escrow agent reasonably
satisfactory to OutBack and GoAmerica to be held and disbursed by that escrow
agent in accordance with the form of escrow agreement attached hereto as Exhibit
2.3 (the "Escrow Agreement"). The Escrow Shares will be deducted pro rata from
the Merger Shares allocable to the Shareholders (as defined in Section 6.1
hereof), each Shareholder being deemed to consent to such deduction by
acceptance of its portion of the Merger Shares. To the extent GoAmerica is
entitled to make a claim against the Escrow Shares pursuant to this Agreement,
GoAmerica shall set off and apply against Indemnifiable Losses (as defined in
Section 6.1 below) the Escrow Shares in accordance with the terms hereof and of
the Escrow Agreement. Pursuant to the terms of the Escrow Agreement, the Escrow
Shares shall be valued at any time, for purposes of set off against any
Indemnifiable Losses, at the then current market value of GoAmerica Common
Stock.
2.4 Taking of Necessary Action; Further Action.
GoAmerica, Sub and OutBack, respectively, shall take all such action as
may be necessary or appropriate in order to effect the Merger as promptly as
possible. If, at any time after the Effective Date of the Merger, any further
action is necessary or desirable to carry out the purposes of this Agreement and
to vest the Surviving Corporation with full right, title and possession to all
assets, property, rights, privileges, powers and franchises of either of the
Constituent Corporations, the officers and directors of such corporation are
fully authorized in the name of the corporation or otherwise to take, and shall
take, all such action.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of OutBack and the Major
Shareholders.
Except as disclosed in a schedule referring specifically to this
Agreement which is delivered by OutBack to GoAmerica and Sub upon the execution
of this Agreement (such schedule to be updated as of the Closing Date) (the
"OutBack Disclosure Schedule"), each of OutBack and the Major Shareholders
represents and warrants to GoAmerica and Sub as set forth below, which
representations and warranties are true and correct as of the date of this
Agreement
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and will be true and correct as of the Closing Date (except as otherwise
specifically and expressly permitted under this Agreement). As used in this
Agreement, "Business Condition" with respect to any corporate entity shall mean
the current business, financial condition, results of operations, assets and
prospects of such corporate entity.
(a) Organization and Good Standing; Articles and Bylaws. OutBack is
a corporation duly organized and existing under, and by virtue of, the laws of
the State of California and is in corporate and tax good standing under such
laws. OutBack has the requisite corporate power and authority to own and operate
its properties and assets, and to carry on its business as presently conducted.
OutBack is qualified to do business as a foreign corporation in each
jurisdiction in which the failure to be so qualified would have a material
adverse effect on OutBack's Business Condition. OutBack has furnished GoAmerica
or its counsel with copies of its Articles of Incorporation, as amended, and
Bylaws. Said copies are true, correct and complete and contain all amendments
through the date hereof.
(b) Corporate Power. OutBack has all requisite legal and corporate
power and authority to execute and deliver this Agreement, the Merger Agreement
and any other agreements or documents contemplated hereby, and, subject to
approval of this Agreement and the Merger Agreement by the shareholders of
OutBack, to carry out and perform its obligations under the terms of this
Agreement, the Merger Agreement and any other agreements or documents
contemplated hereby and to consummate the transactions contemplated hereby and
thereby.
(c) Subsidiaries. OutBack has no subsidiaries or affiliated
companies and does not otherwise own or control, directly or indirectly, any
equity interest in any corporation, association or business entity.
(d) Capitalization.
(i) Capital Stock. The authorized capital stock of OutBack
consists of 2,500,000 shares of Class A Common Stock, of which 133,400 shares
are issued and outstanding as of the date hereof and 2,500,000 shares of Class B
Common Stock of which 71,600 shares are issued and outstanding as of the date
hereof and of which 83,728 will be issued and outstanding as of the Closing Date
as a result of the fulfillment of OutBack's obligations pursuant to Section 2.4
hereof (collectively, "OutBack Common Stock")
The outstanding shares of OutBack Common Stock have been duly
authorized and validly issued, and are fully paid and nonassessable and all
shares of OutBack Common Stock that may be issued upon exercise or conversion of
options, warrants or notes payable of OutBack will be (upon issuance in
accordance with their terms), duly authorized, validly issued, fully paid,
nonassessable and free of all preemptive rights.
(ii) Options. OutBack has reserved 60,000 shares of Class B
Common Stock for issuance pursuant to its 1997 Stock Incentive Plan, of which
options to purchase 12,128 shares of Common Stock are outstanding and shall be
exercised prior to Closing in accordance with the provisions of Section 2.4
hereof.
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The OutBack Disclosure Schedule sets forth a complete and accurate list
of, and the number of shares owned of record by, the holders of outstanding
OutBack Common Stock as of the date hereof. The OutBack Disclosure Schedule sets
forth a complete and accurate list of the holders of options or warrants to
purchase shares of OutBack Common Stock as of the date hereof, setting forth the
number of shares subject to each such option or warrant and the exercise price
and term of each such option or warrant. Except as set forth above, there is no
outstanding or authorized option, warrant or other right (including but not
limited to any convertible debt) providing for the issuance or redemption of any
of OutBack's Common Stock. There are no outstanding or authorized stock
appreciation, phantom stock or similar rights with respect to any securities of
OutBack. In accordance with Section 4.18 hereof, there are no agreements to
which OutBack is a party or by which it is bound with respect to the voting
(including without limitation voting trusts or proxies), registration under the
Securities Act, or sale or transfer (including without limitation agreements
relating to pre-emptive rights, rights of first refusal, co-sale rights or
"drag-along" rights) of any securities of OutBack. In accordance with Section
4.18 hereof, to the knowledge of OutBack, there are no agreements among other
parties, to which OutBack is not a party and by which it is not bound, with
respect to the voting (including without limitation voting trusts or proxies) or
sale or transfer (including without limitation agreements relating to rights of
first refusal, co-sale rights or "drag-along" rights) of any securities of
OutBack. The shares of OutBack Common Stock are free of any rights to receive a
liquidation preference upon the occurrence of a merger or consolidation,
including the transactions contemplated hereby.
(e) Execution and Delivery. This Agreement has been duly executed
and delivered by OutBack. This Agreement and the other agreements contemplated
hereby, when duly executed and delivered by OutBack, shall constitute valid and
binding obligations of OutBack, enforceable in accordance with their respective
terms, subject to laws of general application relating to bankruptcy, insolvency
and the relief of debtors and rules of law governing specific performance,
injunctive relief or other equitable remedies.
(f) Financial Statements. OutBack has delivered to GoAmerica its
unaudited financial statements (balance sheet, statement of operations,
shareholders' equity and cash flows) for the year ended December 31, 2000 (the
"OutBack Annual Financial Statements"), and its financial statements (balance
sheet, statement of operations and cash flows) for the nine month period ended
September 30, 2001 (the "OutBack Interim Financial Statements" and, collectively
with the OutBack Annual Financial Statements, the "OutBack Financial
Statements"). The OutBack Financial Statements are complete and correct in all
material respects and have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
indicated provided that the OutBack Interim Financial Statements do not include
complete notes and are subject to year-end adjustments. The OutBack Financial
Statements present fairly the financial condition of OutBack as at the dates
thereof and reflect all material liabilities, contingent or otherwise, of
OutBack required by generally accepted accounting principles to be reflected
thereon as at such dates. Since September 30, 2001, there has not been any
change in the assets, liabilities, financial condition or operations of OutBack
from that reflected in the OutBack Financial Statements, except those changes
made in the ordinary course of business which have not been, either individually
or in the aggregate, materially adverse. All material liabilities required by
generally accepted accounting principles to be disclosed in a balance sheet
which are not disclosed in the OutBack Financial Statements in
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an amount in excess of $10,000 are set forth on the OutBack Disclosure Schedule.
The accounting records of OutBack which pertain to its business are in all
material respects complete and correct, have been maintained in accordance with
good business practices and accurately reflect the basis for the financial
position and results of operations of OutBack's business.
(g) Taxes.
(i) All returns, reports, declarations, statements or other
information required to be supplied to a taxing authority relating to "Taxes"
(as hereinafter defined) ("Tax Returns") which are required to be filed with
respect to OutBack on or before the Closing Date have been, or will be, duly and
timely filed and all such returns and reports are, or will be, complete and
correct in all material respects. All Taxes, assessments, fees and other
governmental charges imposed on or with respect to OutBack which have become due
and payable on or before the Closing Date have been, or will be prior to the
Closing Date, paid in a timely manner by OutBack or shall be accrued for in the
balance sheet and there is no liability (and no basis for any liability) for
Taxes with respect to OutBack which has not been (in the case of Taxes which are
not yet due and payable) accrued on the books of OutBack. OutBack is not and has
never been a member of a group of corporations with which it has filed (or been
required to file) consolidated, combined or unitary Tax Returns. OutBack has no
actual or potential liability for any Tax obligation of any taxpayer (including
without limitation any affiliated group of corporations or other entities that
included OutBack during a prior period) other than OutBack. All Taxes that
OutBack is or was required by law to withhold or collect have been duly withheld
or collected and, to the extent required, have been paid to the proper
governmental entity. There are no actions or proceedings which are currently
pending of which OutBack has received notice, or to the best knowledge of
OutBack, which have been threatened against OutBack by any governmental
authority for the assessment or collection of Taxes, no claim for the assessment
or collection of Taxes has been asserted or, to the best knowledge of OutBack,
threatened against OutBack and there are no matters under discussion by OutBack
with any governmental authority regarding claims for the assessment or
collection of Taxes against OutBack. There are no agreements, waivers or
applications by OutBack for an extension of time for the assessment or payment
of any Taxes. There are no Tax liens on any of the assets of OutBack (other than
any lien for current Taxes not yet due and payable). True and complete copies of
all Tax Returns of OutBack, or any predecessor entity thereof, which have been
filed for any periods since January 1, 1994 have been provided or made available
to GoAmerica.
(ii) For purposes of this Agreement, the term "Taxes" means all
taxes, charges, fees, levies or other similar assessments or liabilities,
including without limitation income, gross receipts, ad valorem, premium,
value-added, excise, real property, personal property, sales, use, transfer,
withholding, employment, unemployment insurance, social security, business
license, business organization, environmental, workers compensation, payroll,
profits, license, lease, service, service use, severance, stamp, occupation,
windfall profits, customs, duties, franchise and other taxes imposed by the
United States of America or any state, local or foreign government, or any
agency thereof, or other political subdivision of the United States or any such
government, and any interest, fines, penalties, assessments or additions to tax
resulting from, attributable to or incurred in connection with any tax or any
contest or dispute thereof and any amount payable by OutBack pursuant to any
Tax-sharing agreement or similar agreement with respect to any of the foregoing.
For the avoidance of doubt, the term Taxes shall include,
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without limitation, any Taxes duly determined to be payable or assessed under
applicable California state law in connection with the Merger.
(iii) OutBack (A) has not, with regard to any assets or
property held, acquired or to be acquired thereby, filed a consent to the
application of Section 341(f) of the Code and (B) has not been a United States
real property holding corporation within the meaning of Section 897(c)(2) of the
Code during the applicable period specified in Section 897(c)(l)(A)(ii) of the
Code;
(iv) OutBack has not conducted any operations or sales which
have been or are required to be reported to the Internal Revenue Service under
the provisions of Section 999 of the Code.
(v) OutBack has not made, is not obligated to make, and is
not a party to any agreement that under any circumstances could obligate it to
make payments, the deductibility of which would be prohibited under Section
280G of the Code.
(vi) OutBack (A) has no actual or potential liability for any
Taxes of any person (other than OutBack) under Treasury Regulation Section
1.1502-6 (or any similar provision of federal, state, local, or foreign law), or
as a transferee or successor, by contract, or otherwise; and (B) is not and has
not been required to make a basis reduction pursuant to Treasury Regulation
Section 1.1502-20(b) or Treasury Regulation Section 1.337(d)-2(b).
(vii) None of the assets of OutBack (A) is property that is
required to be treated as being owned by any other person pursuant to the
provisions of former Section 168(f)(8) of the Code, (B) is "tax-exempt use
property" within the meaning of Section 168(h) of the Code or (C) directly or
indirectly secures any debt the interest on which is tax exempt under Section
103(a) of the Code.
(viii) OutBack has not undergone, has not agreed to undergo,
and is not required to undergo (nor will it be required as a result of the
transactions contemplated in this Agreement to undergo) a change in its method
of accounting resulting in an adjustment to its taxable income pursuant to
Section 481 of the Code. OutBack will not be required to include any item of
income in, or exclude any item of deduction from, taxable income for any taxable
period (or portion thereof) ending after the Closing Date as a result of any (i)
change in method of accounting for a taxable period ending on or prior to the
Closing Date under Code Section 481(c) (or any corresponding or similar
provision of state, local or foreign income Tax law); (ii) "closing agreement"
as described in Code Section 7121 (or any corresponding or similar provision of
state, local or foreign income Tax law) executed on or prior to the Closing
Date; (iii) deferred intercompany gain or any excess loss account described in
Treasury Regulations under Code Section 1502 (or any corresponding or similar
provision of state, local or foreign income Tax law); (iv) installment sale or
open transaction disposition made on or prior to the Closing Date; or (v)
prepaid amount received on or prior to the Closing Date.
(ix) OutBack has not distributed to its shareholders or
security holders stock or securities of a controlled corporation, nor have stock
or securities of OutBack been distributed, in a transaction to which Section 355
of the Code applies (i) in the two years prior to
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the date of this Agreement or (ii) in a distribution that could otherwise
constitute part of a "plan" or "series of related transactions" (within the
meaning of Section 355(e) of the Code) that includes the transaction
contemplated by this Agreement.
(x) OutBack has not incurred (or been allocated) an "overall
foreign loss" as defined in Section 904(f)(2) of the Code which has not been
previously recaptured in full as provided in Sections 904(f)(l) and/or 904(f)(3)
of the Code.
(xi) OutBack is not a party to a gain recognition agreement
under Section 367 of the Code.
(h) No Breach of Statute, Decree, Order or Contract. The execution,
delivery and performance of and compliance with this Agreement and the other
agreements contemplated hereby, (i) have not resulted and will not result in any
material violation of, or conflict with, or constitute a material default under,
(A) OutBack's Articles of Incorporation, as amended, or Bylaws, (B) any
judgment, decree or order to which OutBack is a party or by which it is bound,
(C) any statute, rule or governmental regulation applicable to OutBack, or (D)
any of its material agreements or (ii) have not resulted and will not result in
the creation of any material (whether individually or in the aggregate)
mortgage, pledge, lien, encumbrance or charge upon any of the properties or
assets of OutBack.
(i) Litigation or Other Proceedings, etc. There is no action, suit,
proceeding or investigation pending against OutBack or its properties before any
court or governmental agency (nor, to OutBack's knowledge, is there any
reasonable basis therefor or threat thereof).
(j) Employees.
(i) The OutBack Disclosure Schedule contains a list of all
employees of OutBack, along with the position and the annual rate of
compensation of each such person. Each such employee has entered into a
confidentiality/assignment of inventions agreement with OutBack, a copy of which
has previously been delivered to GoAmerica. Any OutBack Intellectual Property
(as defined in Section 3.1(k) below) created by any current or past employee of
OutBack, during or prior to their employment with OutBack, that is directly or
indirectly related to the current or contemplated business of OutBack is the
sole and exclusive property of OutBack. The OutBack Disclosure Schedule contains
a list of all employees of OutBack who are a party to a non-competition
agreement with OutBack; copies of such agreements have previously been delivered
to GoAmerica. To the knowledge of OutBack, no key employee or group of employees
has any plans to terminate employment with OutBack.
(ii) OutBack is not a party to or bound by any collective
bargaining agreement, nor has it experienced any strikes, grievances, claims of
unfair labor practices or other collective bargaining disputes. OutBack has no
knowledge of any organizational effort made or threatened, either currently or
within the past two (2) years, by or on behalf of any labor union or employee of
OutBack with respect to employees of OutBack.
(iii) Any employee of or consultant to OutBack who is not a
citizen of the United States at the time of such employment or consulting
relationship has or had at all required times the proper documentation in order
to be so employed or to provide services at his
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or her respective work site. All citizens of countries other than the United
States have received all authorizations and visas necessary for work in the
United States and all such authorizations and visas are valid and enforceable.
(iv) To OutBack's knowledge, no employee of OutBack is in
violation of any term of any employment contract, confidentiality agreement,
patent disclosure agreement or any other contract or agreement relating to the
relationship of such employee with OutBack or any other party because of the
nature of the business conducted by OutBack. OutBack is not aware that any
employee of OutBack is obligated under any contract (including any license,
covenant or commitment of any nature), or subject to any judgment, decree or
order of any court or administrative agency, that would interfere with the use
of such employee's best efforts to promote the interests of OutBack or would
conflict with OutBack's business as presently conducted.
(v) All employees and independent contractors of OutBack have
been properly classified as employees and independent contractors, respectively,
and OutBack has no liability for benefits, taxes or other payments due to its
classification or engagement of such individuals.
(vi) All employees have been properly classified as exempt or
non-exempt under all applicable wage and hour laws.
(vii) OutBack has received no complaint (whether internal or
external) by any of its employees or contractors regarding any of OutBack's
policies, practices, rules or procedures.
(k) Intellectual Property.
(i) OutBack owns or has the right to use all Intellectual
Property (as defined below) necessary (A) to use, manufacture, market and
distribute the products manufactured, marketed, sold or licensed, and to provide
the services provided, by OutBack to other parties (together, the "Customer
Deliverables") or (B) to operate OutBack's internal systems that are material to
the business or operations of OutBack, including, without limitation, computer
hardware systems, software applications and embedded systems (the "Internal
Systems"; the Intellectual Property owned by or licensed to OutBack and
incorporated in or underlying the Customer Deliverables or the Internal Systems
is referred to herein as the "OutBack Intellectual Property") in each case, as
presently conducted by OutBack. Each item of the OutBack Intellectual Property
will be owned or available for use by the Surviving Corporation immediately
following the Closing on substantially identical terms and conditions as it was
immediately prior to the Closing. OutBack has taken reasonable measures to
protect the proprietary nature of each item of the OutBack Intellectual
Property. To the knowledge of OutBack as of the date of this Agreement and the
Closing Date, as applicable: (A) no other person or entity has any rights to any
of the OutBack Intellectual Property (except pursuant to agreements or licenses
specified on the OutBack Disclosure Schedule); and (B) no other person or entity
is infringing, violating or misappropriating any of the OutBack Intellectual
Property. For purposes of this Agreement, "Intellectual Property" means all (A)
patents and patent applications, both domestic and foreign (B) copyrights and
registrations thereof, both domestic
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and foreign (C) mask works and registrations and applications for
registration thereof, (D) products, computer software (including, source and
object code), data and documentation, (E) trade secrets and confidential
business information, whether patentable or unpatentable and whether or not
reduced to practice, know-how, manufacturing and production processes and
techniques, research and development information, copyrightable works,
financial, marketing and business data, pricing and cost information, business
and marketing plans and customer and supplier lists and information, (F)
trademarks, service marks, trade names, domain names and applications and
registrations therefor, both domestic and foreign (G) other proprietary rights
relating to any of the foregoing, and (H) licenses to any third party
intellectual property.
(ii) The OutBack Disclosure Schedule lists each domestic and
foreign patent, patent application, copyright registration or application
therefor, mask work registration or application therefor, and trademark, service
xxxx and domain name registration or application therefor of OutBack.
(iii) None of the Customer Deliverables, or the marketing,
distribution, provision or use thereof, infringes or violates, or constitutes a
misappropriation of, any Intellectual Property rights of any person or entity.
To the knowledge of OutBack, none of the Internal Systems, or the use thereof,
infringes or violates, or constitutes a misappropriation of, any Intellectual
Property rights of any person or entity. The OutBack Disclosure Schedule lists
any complaint, claim or notice, or written threat thereof, received by OutBack
alleging any such infringement, violation or misappropriation; and OutBack has
provided to GoAmerica and Sub complete and accurate copies of all written
documentation in the possession of OutBack relating to any such complaint,
claim, notice or threat. OutBack has provided to GoAmerica and Sub complete and
accurate copies of all written documentation in OutBack's possession relating to
claims or disputes known to OutBack concerning any OutBack Intellectual
Property.
(iv) The OutBack Disclosure Schedule identifies each license
or other agreement (or type of license or other agreement) pursuant to which
OutBack has licensed, distributed or otherwise granted any rights to any third
party with respect to any OutBack Intellectual Property.
(v) The OutBack Disclosure Schedule identifies each item
of OutBack Intellectual Property that is owned by a party other than OutBack,
and the license or agreement pursuant to which OutBack uses it.
(vi) OutBack has not disclosed the source code for any of
the software owned by OutBack (the "Software") or other confidential information
constituting, embodied in or pertaining to the Software to any person or entity,
except pursuant to the agreements listed on the OutBack Disclosure Schedule, and
OutBack has taken reasonable measures to prevent disclosure of such source code.
(vii) All of the copyrightable materials (including Software)
incorporated in or bundled with the Customer Deliverables have been created by
employees of OutBack within the scope of their employment by OutBack or by
independent contractors of OutBack who have executed agreements expressly
assigning all right, title and interest in such
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copyrightable materials to OutBack. No portion of such copyrightable materials
was jointly developed with any third party.
(viii) The Customer Deliverables and the Internal Systems are
free from substantial and material defects or programming errors and conform in
all material respects to the written documentation and specifications therefor.
(l) Governmental Consent, etc. No consent, approval or
authorization of or designation, declaration or filing with any governmental
authority on the part of OutBack is required in connection with the valid
execution and delivery of this Agreement or the Merger Agreement or the
consummation of the transactions contemplated hereby or thereby, except (i)
filing of the Merger Agreement with the office of the California Secretary of
State and appropriate documents with the relevant authorities of other states in
which OutBack is qualified to do business, (ii) such consents, approvals,
authorizations, designations, declarations and filings which, if not obtained or
made, would not have a material adverse affect on the Business Condition of
OutBack, and (iii) filings with federal or state authorities in order to effect
compliance with federal or state securities or "blue sky" laws.
(m) Brokers or Finders; Other Offers. OutBack has not incurred, and
will not incur, directly or indirectly, as a result of any action taken by
OutBack, any liability for brokerage or finders' fees or agents' commissions or
any similar charges in connection with this Agreement or the transactions
contemplated hereby.
(n) Insurance. OutBack maintains valid policies of workers'
compensation insurance and of insurance with respect to its properties and
business of the kinds (including product liability insurance) and in the amounts
not less than is customarily obtained by corporations engaged in the same or
similar business and similarly situated, including, without limitation,
insurance against loss, damage, fire, theft, public liability and other risks.
All premiums due and payable under all such policies have been paid. OutBack is
not liable for retroactive premiums or similar payments, and OutBack is
otherwise in compliance in all respects with the terms of such policies. OutBack
has no knowledge of any threatened material termination of, or material premium
increase with respect to, any such policy. Each such policy will continue to be
enforceable and in full force and effect immediately following the Closing in
accordance with the terms thereof as in effect immediately prior to the Closing.
(o) Material Contracts and Obligations. The OutBack Disclosure
Schedule sets forth a list of all material agreements (oral or written) of any
nature to which OutBack is a party or by which it is bound, including without
limitation (i) each agreement which requires future expenditures by OutBack in
excess of $25,000, (ii) all employment and consulting agreements, employee
benefit, bonus, pension, profit-sharing, stock option, stock purchase and
similar plans and arrangements and (iii) any arrangement, relationship,
transaction or agreement to which any shareholder, officer or director of
OutBack, or any "affiliate" or "associate" of such persons (as such terms are
defined in the rules and regulations promulgated under the Securities Act), is
presently a party, including without limitation, any agreement or other
arrangement providing for the furnishing of services by, rental of real or
personal property from, or otherwise requiring payments to, any such person or
entity, other than any material agreement entered into by OutBack in compliance
with the terms of Section 4.1 hereof after the date of this Agreement.
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OutBack has delivered or made available to GoAmerica copies of such agreements.
To OutBack's knowledge, all of such agreements and contracts are valid, binding
and in full force and effect and represent all of the currently effective
agreements and contracts by which OutBack is bound. OutBack is not, nor, to
OutBack's knowledge, is any other party thereto, in breach of any material
provision of, or in default in any material respect under the terms of, any such
agreement or contract. All other agreements and contracts to which OutBack is or
was a party have been terminated or will be terminated in accordance with the
terms of such agreements or contracts as of the Closing, including particularly
any agreements or contracts containing non-solicit or non-compete provisions.
(p) Title to Properties and Assets. OutBack has good and marketable
title to all of its properties and assets, in each case subject to no mortgage,
pledge, lien, lease, security interest, encumbrance or charge, other than (i)
the liens of current taxes not yet due and payable and (ii) possible minor liens
and encumbrances which do not in any case materially detract from the value of
the property subject thereto or materially impair the operations of OutBack, and
which have not arisen otherwise than in the ordinary course of business.
(q) Regulatory Approvals. OutBack has all necessary authorizations,
approvals, orders, licenses, certificates, permits and clearances from all
governmental regulatory officials and bodies, to own, lease or sell its
properties and products and to conduct its business as presently conducted,
where the failure to have such would have a material adverse effect on OutBack's
Business Condition.
(r) Restrictions on the Conduct of the Business. OutBack is not
restricted from conducting business in any location by agreement or court decree
where such restriction would have a material adverse effect on OutBack's
Business Condition.
(s) Powers of Attorney. OutBack has not granted any power of
attorney (revocable or irrevocable) to any person, firm or corporation for any
purpose whatsoever related to its business.
(t) No Securities Laws Violations.
(i) To OutBack's knowledge, none of the officers or directors
of OutBack or any corporation in which any of them is an officer or director has
ever been the subject of any order, judgment or decree of any governmental
authority or administrator, or of any court of competent jurisdiction, revoking
or suspending for cause any license, permit or other authority to engage in the
securities business or in the sale of a particular security or temporarily or
permanently restraining or joining any such person or any corporation of which
he is an officer or director from engaging in and/or continuing any conduct,
practice or employment in connection with the purchase or sale of securities, or
convicting such person of any felony or misdemeanor involving any security or
any aspect of the securities business, or of theft or any felony.
(ii) All outstanding securities of OutBack, including, but not
limited to, capital stock, options, warrants and notes, have been issued in
compliance with all relevant federal and state securities laws and regulations.
All prior redemptions, repurchases and
-15-
distributions by OutBack of, or relating to, its outstanding capital stock or
other securities were in compliance with applicable law.
(u) Books and Records. The books of account, minute books, stock
record books, and other records of OutBack, all of which have been made
available to GoAmerica, have been properly kept and are accurate in all
respects. At the Closing, all of OutBack's records will be in the possession of
OutBack.
(v) Employee Benefits.
(i) OutBack and its ERISA Affiliate (as defined below) do not
maintain (nor have they ever maintained) and do not have (nor have they ever
had) any obligation under (including, without limitation, any obligation to
contribute to), and have not contributed to (nor have they contributed to), an
employee benefit plan as described in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended. "ERISA Affiliate" means any entity
which is, or at any applicable time was, a member of (A) a controlled group of
corporations (as defined in Section 414(b) of the Code), (B) a group of trades
or businesses under common control (as defined in Section 414(c) of the Code),
or (C) an affiliated service group (as defined under Section 414(m) of the Code
or the regulations under Section 414(o) of the Code), any of which includes or
included OutBack.
(ii) "Employee Benefit Plan" means any "employee pension
benefit plan" (as defined in Section 3(2) of ERISA), any "employee welfare
benefit plan" (as defined in Section 3(1) of ERISA), and any other written or
oral plan, agreement or arrangement involving direct or indirect compensation,
including without limitation insurance coverage, severance benefits, disability
benefits, deferred compensation, bonuses, stock options, stock purchase, phantom
stock, stock appreciation or other forms of incentive compensation or
post-retirement compensation.
(iii) Each of the Employee Benefit Plans identified on the
OutBack Disclosure Schedule is amendable and terminable unilaterally by OutBack
at any time without liability to OutBack as a result thereof and no such
Employee Benefit Plan, plan documentation or agreement, summary plan description
or other written communication distributed generally to employees by its terms
prohibits OutBack from amending or terminating any such Employee Benefit Plan.
(iv) No act or omission has occurred and no condition exists with respect to any
Employee Benefit Plan maintained by OutBack or any ERISA Affiliate that would
subject OutBack or any ERISA Affiliate to (A) any material fine, penalty, tax or
liability of any kind imposed under ERISA or the Code or (B) any contractual
indemnification or contribution obligation protecting any fiduciary, insurer or
service provider with respect to any Employee Benefit Plan.
(v) The OutBack Disclosure Schedule sets forth the policy of
OutBack with respect to accrued vacation, accrued sick time and earned time-off
and the amount of such liabilities as of the date hereof and the Closing Date.
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(vi) All the Employee Benefit Plans that are intended to be
qualified under Section 401(a) of the Code have received determination letters
from the Internal Revenue Service to the effect that such Employee Benefit Plans
are qualified and the plans and the trusts related thereto are exempt from
federal income taxes under Sections 401(a) and 501(a), respectively, of the
Code; no such determination letter has been revoked and revocation has not been
threatened; and no such Employee Benefit Plan has been amended since the date of
its most recent determination letter or application therefor in any respect, and
no act or omission has occurred, that would adversely affect its qualification
or materially increase its cost. Each Employee Benefit Plan which is required to
satisfy Section 401(k)(3) or Section 401(m)(2) of the Code has been tested for
compliance with, and satisfies the requirements of, Section 401(k)(3) and
Section 401(m)(2) of the Code for each plan year ending prior to the Closing
Date.
(w) Environmental Matters.
(i) OutBack has complied with all applicable Environmental
Laws (as defined below), except for violations of Environmental Laws that,
individually or in the aggregate have not had and would not reasonable be
expected to have a material adverse effect on OutBack's Business Condition.
There is no pending or, to the knowledge of OutBack, threatened civil or
criminal litigation, written notice of violation, formal administrative
proceeding, or investigation, inquiry or information request by any governmental
entity, relating to any Environmental Law involving OutBack. For purposes of
this Agreement, "Environmental Law" means any federal, state or local law,
statute, rule or regulation or the common law relating to the environment or
occupational health and safety, including without limitation any statute,
regulation, administrative decision or order pertaining to (A) treatment,
storage, disposal, generation and transportation of industrial, toxic or
hazardous materials or substances or solid or hazardous waste; (B) air, water
and noise pollution; (C) groundwater and soil contamination; (D) the release or
threatened release into the environment of industrial, toxic or hazardous
materials or substances, or solid or hazardous waste, including without
limitation emissions, discharges, injections, spills, escapes or dumping of
pollutants, contaminants or chemicals; (E) the protection of wild life, marine
life and wetlands, including without limitation all endangered and threatened
species; (F) storage tanks, vessels, containers, abandoned or discarded barrels,
and other closed receptacles; (G) health and safety of employees and other
persons; and (H) manufacturing, processing, using, distributing, treating,
storing, disposing, transporting or handling of materials regulated under any
law as pollutants, contaminants, toxic or hazardous materials or substances or
oil or petroleum products or solid or hazardous waste. As used above, the terms
"release" and "environment" shall have the meaning set forth in the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended ("CERCLA").
(ii) There have been no releases of any Materials of
Environmental Concern (as defined below) into the environment at any parcel of
real property or any facility formerly or currently owned, leased, occupied,
operated or controlled by OutBack. With respect to any such releases of
Materials of Environmental Concern, OutBack has given all required notices to
governmental entities (copies of which have been provided to GoAmerica). OutBack
is not aware of any releases of Materials of Environmental Concern at parcels of
real property or facilities other than those owned, leased,
-17-
occupied, operated or controlled by OutBack that could reasonably be expected
to have an impact on the real property or facilities owned, leased, occupied,
operated or controlled by OutBack. For purposes of this Agreement, "Materials of
Environmental Concern" means any chemicals, pollutants or contaminants,
hazardous substances (as such term is defined under CERCLA), solid wastes and
hazardous wastes (as such terms are defined under the Resource Conservation and
Recovery Act), toxic materials, oil or petroleum and petroleum products or
any other material subject to regulation under any Environmental Law.
(iii) Set forth in the OutBack Disclosure Schedule is a list of
all documents (whether in hard copy or electronic form) that contain any
environmental reports, investigations and audits relating to the environment or
occupational health and safety and pertaining to OutBack premises currently or
previously owned leased, occupied, operated or controlled by OutBack (whether
conducted by or on behalf of OutBack or a third party, and whether done at the
initiative of OutBack or directed by a governmental entity or other third party)
which were issued or conducted during the past five years and which OutBack has
possession of or access to. A complete and accurate copy of each such document
has been provided to GoAmerica.
(iv) OutBack is not aware of any material environmental
liability of any solid or hazardous waste transporter or treatment, storage or
disposal facility that has been used by OutBack.
(x) Accounts Receivable. All accounts receivable of OutBack
reflected on the September 30, 2001 balance sheet (the "September Receivables")
are valid receivables subject to no setoffs or counterclaims and are current and
collectible (within ninety (90) days after the date on which it first became due
and payable), net of the applicable reserve for bad debts on the September 30,
2001 balance sheet. All accounts receivable reflected in the financial or
accounting records of OutBack that have arisen since September 30, 2001, but
prior to the Closing Date, (the "Subsequent Receivables" and, collectively with
the September Receivables, the "Accounts Receivable") are valid receivables
subject to no setoffs or counterclaims and are collectible (within ninety (90)
days after the date on which it first became due and payable), net of a reserve
for bad debts in an amount proportionate to the reserve shown on the September
30, 2001 balance sheet.
(y) Absence of Certain Changes. Since September 30, 2001, (i) there
has occurred no event or development which, individually or in the aggregate,
has had, or could reasonably be expected to have in the future, a material
adverse effect on OutBack's Business Condition, and (ii) OutBack has not taken
any of the actions set forth in paragraphs (a) through (n) of Section 4.1
hereof.
(z) Disclosure. No representation or warranty by OutBack contained
in this Agreement, and no statement contained in the OutBack Disclosure Schedule
or any other document, certificate or other instrument delivered or to be
delivered by or on behalf of OutBack pursuant to this Agreement, contains or
will contain any untrue statement of a material fact or omits or will omit to
state any material fact necessary, in light of the circumstances under which it
was or will be made, in order to make the statements herein or therein not
misleading. OutBack has disclosed to GoAmerica all material information relating
to the business of OutBack or the transactions contemplated by this Agreement.
-18-
3.2 Representations and Warranties of GoAmerica and Sub.
Except as disclosed in a schedule referring specifically to this
Agreement to be delivered by GoAmerica and Sub to OutBack upon the execution of
this Agreement (the "GoAmerica Disclosure Schedule"), GoAmerica and Sub
represent and warrant to OutBack as set forth below, which representations and
warranties are true and correct as of the date of this Agreement and will be
true and correct as of the Closing Date (except as otherwise specifically
permitted under this Agreement):
(a) Organization and Good Standing Certificate and Bylaws.
GoAmerica is a corporation duly organized and existing under, and by virtue of,
the laws of the State of Delaware and is in good standing under such laws. Sub
is a corporation duly organized and existing under, and by virtue of, the laws
of the State of Delaware and is in good standing under such laws. Each of
GoAmerica and Sub has the requisite corporate power and authority to own and
operate its properties and assets, and to carry on its business as presently
conducted. GoAmerica is qualified to do business as a foreign corporation in
each jurisdiction in which the failure to be so qualified would have a material
adverse effect on GoAmerica. GoAmerica has furnished OutBack or its counsel with
copies of the Certificate of Incorporation and Bylaws of GoAmerica and Sub, as
amended. Said copies are true, correct and complete and contain all amendments
through the date hereof.
(b) Corporate Power. Each of GoAmerica and Sub has all requisite
legal and corporate power and authority to execute and deliver this Agreement,
the Merger Agreement, the Escrow Agreement and any other agreements or documents
contemplated hereby, as applicable, and to carry out and perform its obligations
under the terms of this Agreement, the Merger Agreement, the Escrow Agreement
and any other agreement contemplated hereby and to consummate the transactions
contemplated hereby and thereby.
(c) SEC Reports. GoAmerica has timely filed all required reports,
statements and documents with the Commission, all of which have complied in all
material respects with all applicable requirements of the Securities Act and the
Securities Exchange Act of 1934, as amended. GoAmerica has delivered or made
available to OutBack true and complete copies of all forms, reports, statements
and documents filed with the Commission after December 31, 2000 and all reports,
statements and other information provided by GoAmerica to its stockholders after
December 31, 2000 (collectively, the "GoAmerica Reports"). As of their
respective dates, the GoAmerica Reports did not contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(d) Execution and Delivery. This Agreement has been duly executed
and delivered by GoAmerica and Sub. This Agreement and the Escrow Agreement and
the other agreements between the parties contemplated hereby, when duly executed
and delivered by GoAmerica and Sub, shall constitute valid and binding
obligations of GoAmerica and Sub, enforceable in accordance with their
respective terms, subject to laws of general application relating to bankruptcy,
insolvency and the relief of debtors and rules of law governing specific
performance, injunctive relief or other equitable remedies.
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(e) No Breach of Statute, Decree, Order or Contract. The execution,
delivery and performance of and compliance with this Agreement, the Escrow
Agreement and the other agreements between the parties contemplated hereby, as
applicable, (i) have not resulted and will not result in a material violation
of, or conflict with, or constitute a material default under, (A) the
Certificate of Incorporation or Bylaws of GoAmerica or Sub, as amended, (B) any
judgment, decree or order to which GoAmerica or Sub is a party or by which
either is bound, (C) any statute, rule or governmental regulation applicable to
GoAmerica or Sub, or (D) any of its material agreements or (ii) have not
resulted and will not result in the creation of any material (whether
individually or in the aggregate) mortgage, pledge, lien, encumbrance or charge
upon any of the properties or assets of GoAmerica or Sub.
(f) Litigation, etc. There is no action, suit, proceeding or
investigation pending against GoAmerica or Sub or their respective properties
before any court or governmental agency (nor, to GoAmerica's knowledge is there
any reasonable basis therefor or threat thereof).
(g) Governmental Consent, etc. No consent, approval or
authorization of or designation, declaration or filing with any governmental
authority on the part of GoAmerica or Sub is required in conjunction with the
valid execution and delivery of this Agreement or the Merger Agreement, the
consummation of the transactions contemplated hereby or thereby or the payment
of the Merger Consideration, except (i) filing of a Certificate of Merger with
the office of the Delaware Secretary of State and appropriate documents with the
relevant authorities of other states in which GoAmerica and Sub are qualified to
do business, (ii) such consents, approvals, authorizations, designations,
declarations and filings which, if not obtained or made, would not have a
material adverse effect on the Business Condition of GoAmerica, and (iii)
filings with federal or state authorities in order to effect compliance with
federal or state securities or "blue sky" laws.
(h) Brokers or Finders; Other Offers. Neither GoAmerica nor Sub has
incurred, or will incur, directly or indirectly, as a result of any action taken
by GoAmerica or Sub, any liability for brokerage or finders' fees or agents'
commissions or any similar charges in connection with this Agreement, the Merger
Agreement or the transactions contemplated hereby or thereby.
(i) Title to Properties and Assets. Each of GoAmerica and Sub has
good and marketable title to all of its respective properties and assets, in
each case subject to no mortgage, pledge, lien, lease, security interest,
encumbrance or charge, other than (i) the lien of current taxes not yet due and
payable and (ii) possible minor liens and encumbrances which do not in any case
materially detract from the value of the property subject thereto or materially
impair the operations of GoAmerica or Sub, and which have not arisen otherwise
than in the ordinary course of business.
(j) Regulatory Approvals. GoAmerica and Sub each has all necessary
authorizations, approvals, orders, licenses, certificates, permits and
clearances from all governmental regulatory officials and bodies, including the
Federal Communications Commission, to own, lease or sell its respective
properties and products and to conduct its
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respective business as presently conducted, where the failure to have such
would have a material adverse effect on the Business Condition of GoAmerica or
Sub.
(k) Restrictions on the Conduct of the Business. Neither GoAmerica
nor Sub is restricted from conducting business in any location by agreement or
court decree where such restriction would have a material adverse effect on the
Business Condition of GoAmerica or Sub.
(l) Disclosure. No representation or warranty by GoAmerica and Sub
contained in this Agreement, and no statement contained in any document,
certificate or other instrument delivered or to be delivered by or on behalf of
GoAmerica and Sub pursuant to this Agreement, contains or will contain any
untrue statement of a material fact or omits or will omit to state any material
fact necessary, in light of the circumstances under which it was or will be
made, in order to make the statements herein or therein not misleading.
ARTICLE IV
CONDUCT AND TRANSACTIONS PRIOR TO EFFECTIVE TIME;
ADDITIONAL AGREEMENTS
4.1 Conduct of Business.
During the period from the date of this Agreement and continuing until
the earlier of the termination of this Agreement or the Effective Time of the
Merger, OutBack and GoAmerica shall each carry on its business in the usual,
regular and ordinary course in substantially the same manner as heretofore
conducted and, to the extent consistent with such business, use all reasonable
efforts consistent with past practice and policies to preserve intact its
present business organizations, keep available the services of its officers and
key employees and preserve its relationship with customers, suppliers,
distributors, licensors, licensees and others having business dealings with
them, to the end that its goodwill and business shall be unimpaired at the
Effective Time of the Merger. Each party hereto shall promptly notify the other
parties hereto of any event or occurrence or emergency not in the ordinary
course of business, and any event which would be reasonably likely to have a
material and adverse effect on such party. Except as expressly contemplated by
this Agreement or the OutBack Disclosure Schedule, OutBack shall not without the
prior written consent of GoAmerica:
(a) Except as may be required by any plans or options currently in
effect or as required by this agreement, accelerate, amend or change the period
of exercisability of OutBack Options or restricted stock, or authorize payments
in exchange for any outstanding OutBack Options;
(b) Enter into any commitment or transaction not in the ordinary
course of business (i) to be performed over a period longer than six (6) months
in duration, or (ii) to purchase assets for a purchase price in excess of
$25,000;
(c) Grant any severance or termination pay (i) to any director or
(ii) to any employee except (A) payments made pursuant to standard written
agreements outstanding on the date hereof and disclosed in the OutBack
Disclosure Schedule or (B) in the case of employees who are not officers, grants
which are made in the ordinary course of business;
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(d) Declare or pay any dividends on or make any other contributions
(whether in cash, stock or property) in respect of any its capital stock, or
split, combine or reclassify any of its capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in substitution
for shares of its capital stock, or repurchase or otherwise acquire, directly or
indirectly, any shares of its capital stock except from former employees,
directors and consultants in accordance with agreements providing for the
repurchase of shares in connection with any termination of service;
(e) Issue, deliver or sell or authorize or propose the issuance,
delivery or sale of, or purchase or propose the purchase of, any shares of its
capital stock or securities convertible into, or subscriptions, rights, warrants
or options to acquire, or other agreements or commitments of any character
obligating it to issue any such shares or other convertible securities, other
than (i) the issuance of shares of OutBack Common Stock upon the exercise of
OutBack Options, outstanding on the date hereof, and (ii) with the prior written
consent of GoAmerica, the grant to employees of options with standard terms
typically granted to employees generally to purchase shares of OutBack Common
Stock from the date hereof to the Effective Time of the Merger;
(f) Cause or permit any amendments to its Articles of
Incorporation, as amended, or Bylaws;
(g) Acquire or agree to acquire by merging or consolidating with,
or by purchasing a substantial portion of the assets of, or by any other manner,
any business or any corporation, partnership, association or other business
organization or division thereof, or otherwise acquire or agree to acquire any
assets which are material, individually or in the aggregate, to the Business
Condition of OutBack;
(h) Sell, lease, license or otherwise dispose of any of its
properties or assets (including Intellectual Property) which are material,
individually or in the aggregate, to the Business Condition of OutBack except in
the ordinary course of business;
(i) Incur any indebtedness for borrowed money or guarantee any such
indebtedness or issue or sell any debt securities or guarantee any debt
securities of others or incur any other liabilities, except in the ordinary
course of business and in no event in excess of $25,000;
(j) Increase the salaries or wage rates of its employees other than
pursuant to regularly scheduled employee reviews, or in connection with the
hiring of employees other than officers in the ordinary course of business, in
all cases consistent with such party's past practices;
(k) Pay, discharge or satisfy in an amount in excess of $25,000 in
any one case any claim, liability or obligation (absolute, accrued, asserted or
unasserted, contingent or otherwise) other than the payment, discharge or
satisfaction in the ordinary course of business of liabilities reflected or
reserved against in the OutBack Financial Statements;
(l) Hire any new employees or consultants without providing notice
to GoAmerica within ten (10) days thereof of the name of such employee or
consultant and the terms of his or her employment or engagement;
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(m) Make or rescind any material Tax election, settle or compromise
any material Tax liability or make any material amendment to any Tax Return; or
(n) Take, or agree in writing or otherwise to take, any of the
actions described in Section 4.1(a) through Section 4.1(m) above, or any action
which would make any of the representations or warranties or covenants of
OutBack contained in this Agreement materially untrue or incorrect.
4.2 Access to Information.
Subject to Section 4.16, each party shall afford the other and its
accountants, counsel and other representatives, reasonable access during normal
business hours during the period prior to the Effective Time of the Merger to
(a) all of its properties, books, contracts, commitments and records, and (b)
all other information concerning its business, properties and personnel as the
other may reasonably request. No information or knowledge obtained in any
investigation pursuant to this Section 4.2 shall affect or be deemed to modify
any representation or warranty contained herein or the conditions to the
obligations of the parties to consummate the Merger.
4.3 OutBack Shareholders' Consent.
OutBack shall either (a) call a meeting of its shareholders to be held
as promptly as practicable or (b) solicit shareholder approval by written
consent in accordance with applicable law, for the purpose of obtaining the
shareholder approval required in connection with the transactions contemplated
hereby and shall use its best efforts to obtain such approval.
4.4 Preparation of Proxy Statement or Information Statement.
As soon as practicable after the execution of this Agreement, OutBack
shall prepare, with the cooperation of GoAmerica, the Proxy Statement (or
Information Statement, in the case of written consent) for purposes of
soliciting the approval of the shareholders of OutBack of this Agreement, the
Merger Agreement and the transactions contemplated hereby and thereby. OutBack
shall use its best efforts to cause the Proxy Statement (or Information
Statement, as the case may be) to comply with applicable federal and state
securities laws requirements. Each of GoAmerica and OutBack agrees to provide
promptly to the other such information concerning its business and financial
statements and affairs as, in the reasonable judgment of the providing party or
its counsel, may be required or appropriate for inclusion in the Proxy Statement
(or Information Statement, as the case may be), or any amendments or supplements
thereto, and to cause its counsel and auditors to cooperate with the other's
counsel and auditors in the preparation of the Proxy Statement (or Information
Statement, as the case may be). OutBack will promptly advise GoAmerica, and
GoAmerica will promptly advise OutBack, in writing if at any time prior to the
Effective Time of the Merger either OutBack or GoAmerica shall obtain knowledge
of any facts that might make it necessary or appropriate to amend or supplement
the Proxy Statement (or Information Statement, as the case may be) in order to
make the statements contained or incorporated by reference therein not
misleading or to comply with applicable law. The Proxy Statement (or Information
Statement, as the case may be) shall contain the unanimous recommendation of the
Board of Directors of OutBack that the OutBack shareholders approve the Merger,
this Agreement and the Merger Agreement and the conclusion of the Board of
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Directors that the terms and conditions of the Merger are fair and reasonable to
the shareholders of OutBack. Anything to the contrary contained herein
notwithstanding, OutBack shall not include in the Proxy Statement (or
Information Statement, as the case may be) any information with respect to
GoAmerica or its affiliates or associates, the form and content of which
information shall not have been approved by GoAmerica prior to such inclusion.
4.5 Tax Matters.
GoAmerica, Sub and OutBack acknowledge that each intends the Merger to
be a tax-free reorganization under Section 368(a) of the Code and that each has
consulted with and relied upon its own professional tax advisors. None of
GoAmerica, Sub or OutBack has taken any action, or will take any action or fail
to take any action that would prevent the Merger from qualifying as a
"reorganization" under Section 368(a) of the Code. None of GoAmerica, Sub or
OutBack will adopt any position on any Tax Return, information statement or
other disclosure document that is inconsistent with the treatment of the Merger
as a reorganization under Section 368 of the Code.
4.6 Breach of Representations and Warranties.
Each of GoAmerica and OutBack shall not take any action which would
cause or constitute a breach of any of their respective representations and
warranties set forth in this Agreement or which would cause any of such
representations and warranties to be materially inaccurate. In the event of, and
promptly after becoming aware of, the occurrence of or the pending or threatened
occurrence of any event which would cause or constitute such a breach or
inaccuracy, each party shall give detailed notice thereof to the other and shall
use commercially reasonable efforts to prevent or promptly remedy such breach or
inaccuracy.
4.7 Consents.
GoAmerica and OutBack shall each promptly apply for or otherwise seek,
and use commercially reasonable efforts to obtain, all consents and approvals
required to be obtained by it for the consummation of the Merger.
4.8 Commercially Reasonable Efforts.
GoAmerica and OutBack shall each use commercially reasonable efforts to
effectuate the transactions contemplated hereby and to fulfill and cause to be
fulfilled the conditions to Closing under this Agreement.
4.9 Performance by Sub.
GoAmerica, as sole stockholder of Sub, will take, and will cause Sub to
take, all action necessary or advisable for the consummation of the Merger by
Sub and the carrying out by Sub of the transactions contemplated hereby.
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4.10 FIRPTA.
On or before the Closing Date (a) OutBack will deliver to GoAmerica
notices that the capital stock of OutBack is not a "U.S. real property interest"
in accordance with the Treasury Regulations under Sections 897 and 1445 of the
Code, or (b) if OutBack does not deliver notices pursuant to clause (a), the
shareholders of OutBack will deliver to GoAmerica certifications that they are
not foreign persons in accordance with the Treasury Regulations under Section
1445 of the Code. If GoAmerica does not receive either the notices or
certifications described above on or before the Closing Date, GoAmerica shall be
permitted to withhold from the Merger Consideration any required withholding tax
under Section 1445 of the Code.
4.11 Legal Conditions to the Merger.
(a) OutBack shall take all reasonable actions necessary to comply
promptly with all legal requirements which may be imposed on OutBack with
respect to the Merger and will promptly cooperate with and furnish information
to GoAmerica in connection with any such requirements imposed upon GoAmerica or
Sub in connection with the Merger. OutBack shall take all reasonable actions to
obtain (and to cooperate with GoAmerica in obtaining) any consent,
authorization, order or approval of, or any exemption by, any governmental
entity, required to be obtained or made by OutBack (or by GoAmerica or Sub) in
connection with the Merger or the taking of any action contemplated thereby, by
this Agreement and to defend all lawsuits or other legal proceedings challenging
this Agreement, the Merger Agreement or the consummation of the transactions
contemplated hereby or thereby, to lift or rescind any injunction or restraining
order or other order adversely affecting the ability of the parties to
consummate the transactions contemplated hereby, and to effect all necessary
registrations and filings and submissions of information requested by any
governmental entity, and to fulfill all conditions to this Agreement.
(b) Each of GoAmerica and Sub shall take all reasonable actions
necessary to comply promptly with all legal requirements which may be imposed on
them with respect to the Merger and will promptly cooperate with and furnish
information to OutBack in connection with any such requirements imposed upon
OutBack in connection with the Merger. GoAmerica and Sub shall take all
reasonable actions to obtain (and to cooperate with OutBack in obtaining) any
consent, authorization, order or approval of, or exemption by, any governmental
entity required to be obtained or made by GoAmerica or Sub (or by OutBack) in
connection with the Merger or the taking of any action contemplated thereby, by
this Agreement or the Merger Agreement, and to defend all lawsuits or other
legal proceedings challenging this Agreement or the consummation of the
transactions contemplated hereby or thereby, to lift or rescind any injunction
or restraining order or other order adversely affecting the ability of parties
to consummate the transactions contemplated hereby, and to effect all necessary
registrations and filings and submissions of information requested by any
governmental entity, and to fulfill all conditions to this Agreement.
4.12 Employee Matters.
Immediately following the Effective Date of the Merger, GoAmerica will
offer to the then current employees of OutBack (the "Remaining OutBack
Employees") employment with
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GoAmerica on terms to be determined by GoAmerica, including the provision of
health insurance and long-term disability insurance on terms no more favorable
to OutBack employees than that provided to similarly situated employees of
GoAmerica. For purposes of participation in any employee benefit plans offered
by GoAmerica to the Remaining OutBack Employees, to the extent permissible under
the applicable plan, the tenure of any such employee shall be deemed to have
commenced on the first day of such employee's last continuous employment with
OutBack. GoAmerica will also offer and issue options to purchase an aggregate of
60,000 shares of GoAmerica Common Stock under the GoAmerica 1999 Stock Plan to
the Remaining OutBack Employees, the allocation of such options to be mutually
agreed upon by GoAmerica and OutBack prior to the Closing. GoAmerica shall use
its reasonable efforts to retain substantially all of the Remaining OutBack
Employees; provided, however, that nothing in this Agreement shall create an
employment agreement between GoAmerica and any OutBack employee or otherwise
create any obligation for GoAmerica or OutBack to continually employ any OutBack
employee, who shall all be otherwise "terminable at will."
4.13 Expenses and Transfer Taxes.
All losses and expenses incurred in connection with this Agreement and
the transactions contemplated hereby and thereby shall be paid by the party
incurring such expense (including fees and disbursements of counsel and
accountants). Notwithstanding the foregoing, provided that the Merger is
consummated, at the Closing, GoAmerica shall pay all expenses of OutBack
(including reasonable fees and disbursements of counsel) incurred in connection
with the consummation of the Merger; provided further, that, such reasonable
fees and disbursements shall not exceed $25,000 (including fees and disbursement
of counsel and provided that, three (3) days prior to the Closing Date, such
counsel furnishes a detailed invoice to GoAmerica which includes a reasonable
estimate of fees to be incurred through the Closing Date) provided that if all
of the conditions precedent set forth in Article V hereof have been satisfied
and one of the parties hereto refuses to consummate the Merger, then such
refusing party shall reimburse the other parties hereto for direct expenses
reasonably incurred in connection with the Merger.
4.14 Issuance of Share Certificates.
GoAmerica shall, as and when required under this Agreement, issue and
deliver (a) certificates representing the shares of GoAmerica Common Stock and
(b) warrant agreements representing the GoAmerica Warrants, into which the
OutBack Common Stock outstanding at the Effective Time of the Merger shall be
converted in accordance with Section 1.4 and Section 2.1 hereof.
4.15 Public Announcements.
GoAmerica and OutBack shall cooperate with each other prior to
releasing information concerning this Agreement and the Merger Agreement or the
transactions contemplated hereby or thereby, shall furnish to the other drafts
of all press releases or other public announcements related to the foregoing
prior to publication and shall obtain the consent of the other prior to the
issuance of press releases or the release of other public announcements.
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4.16 Confidentiality.
No party hereto shall release, publish, reveal or disclose, directly or
indirectly, any business or technical information of any other party hereto,
designated orally or in writing as "confidential" or "proprietary" (or in like
words), including, but not limited to, systems, processes, formulae, data,
functional specifications, know-how, improvements, discoveries, developments,
designs, inventions, techniques, new products, marketing and advertising
methods, supplier agreements, customer lists, pricing policies, financial
information, projections, forecasts, strategies, budgets or other information
related to its business or its customers (hereinafter referred to as "Evaluation
Material"), except to a party's directors, officers, employees, financial
advisors, legal counsel, independent public accountants or other agents,
advisors or representatives as shall require access thereto on a need-to-know
basis for the purposes of the transactions contemplated by this Agreement and
who shall agree to be bound by the terms of this Section 4.16 and that certain
Mutual Confidentiality and Non-Disclosure Agreement dated as of July 10, 2001 by
and between GoAmerica and OutBack (the "Mutual NDA"). Each party agrees to take
all reasonable precautions to safeguard the confidentiality of the other party's
Evaluation Material and to exercise the same degree of care with respect to such
Evaluation Material that such party exercises with respect to its own
confidential information. No party shall make, or permit to be made, except in
furtherance of the transactions contemplated by this Agreement, any copies,
abstracts or summaries of the Evaluation Material. In addition, all such
Evaluation Material shall be used solely for the purpose of the investigation
contemplated by this Section 4.16 and shall not be used for any other purpose,
including use which would be to the detriment of any other party, nor shall such
information be used in competition with any other party. The restrictions on
disclosure of information contained in this Section 4.16 do not extend to any
item of information that (a) is already known to the receiving party; (b) was or
is independently developed by the receiving party; (c) is now or hereafter
becomes available to the public other than as a consequence of a breach of
obligations under this Section 4.16; or (d) is disclosed to third parties
outside of the receiving party in accordance with terms approved by the
disclosing party. Upon written request, the parties shall return all writings,
documents and materials containing Evaluation Material with a letter confirming
that all copies, abstracts and summaries of the Evaluation Material have been
destroyed. In the event that any party hereto becomes legally required to
disclose another party's Evaluation Material, it shall provide such other party
with prompt prior written notice of such requirement prior to such disclosure.
In the event that a protective order or other remedy is not obtained, or such
other party waives compliance with the provisions of this Section 4.16 with
respect to the Evaluation Material subject to such requirement, such party
agrees to furnish only that portion of the Evaluation Material which it is
legally required to furnish and, where appropriate, to use its best efforts to
obtain assurances that such Evaluation Material will be accorded confidential
treatment. This Section 4.16 shall not be deemed a limitation upon the
obligations contained in the Mutual NDA but rather shall be read supplementally
therewith. To the extent any provisions of this Section 4.16 conflicts with
those contained in the Mutual NDA, the Mutual NDA shall govern.
4.17 Exclusivity.
(a) OutBack shall not, and OutBack shall require each of its
officers, directors, employees, representatives and agents not to, directly or
indirectly, (i) initiate, solicit,
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encourage or otherwise facilitate any inquiry, proposal, offer or discussion
with any party (other than GoAmerica and Sub) concerning any merger,
reorganization, consolidation, recapitalization, business combination,
liquidation, dissolution, share exchange, sale of stock, sale of material assets
or similar business transaction involving OutBack or any division of OutBack,
(ii) furnish any non-public information concerning the business, properties or
assets of OutBack or any division of OutBack to any party (other than GoAmerica
and Sub and other than information provided to potential commercial partners or
customers in the ordinary course of business) or (iii) engage in discussions or
negotiations with any party (other than GoAmerica and Sub) concerning any such
transaction.
(b) OutBack shall immediately notify any party with which
discussions or negotiations of the nature described in paragraph (a) above were
pending that OutBack is terminating such discussions or negotiations. If OutBack
receives any inquiry, proposal or offer of the nature described in paragraph (a)
above, OutBack shall, within one (1) business day after such receipt, notify
GoAmerica and Sub of such inquiry, proposal or offer, including the identity of
the other party and terms of such inquiry, proposal or offer.
4.18 Termination of OutBack Investor Rights.
OutBack shall take such steps as may be necessary to provide for the
termination as of the Effective Date of the Merger of all OutBack investor
rights granted by OutBack to its shareholders or by or among the shareholders of
OutBack and in effect prior to the Closing, including but not limited to rights
of co-sale, voting, registration, first refusal, board observation or
information or operational covenants.
4.19 OutBack Stock Options.
At or prior to the Effective Time of the Merger, each outstanding and
unexercised option to purchase shares of OutBack Common Stock under the OutBack
1997 Stock Incentive Plan, whether vested or unvested (each such option, an
"OutBack Option"), shall have been exercised or terminated (effective as of the
Effective Date of the Merger).
4.20 OutBack Notes Payable.
Prior to the Effective Time of the Merger, OutBack shall use its best
efforts to arrange for and effect the payment and cancellation of all notes
payable of OutBack (the "OutBack Notes Payable"), all such notes being listed
and described (including the amounts due and owing thereunder or of the date
hereof and the Closing Date) on Schedule 2.5 hereto. In the event the OutBack
Notes Payable (including any installment or interest payments thereon) have not
been paid and cancelled prior to the Effective Time of the Merger, GoAmerica
agrees to apply payments on Accounts Receivable received following the Effective
Time of the Merger toward payment of the OutBack Notes Payable first until no
amounts remain due thereunder. Xx. Xxxxxxxxx and Xx. Xxxxxxxxx shall remain as
guarantors on the OutBack Notes Payable until paid in full and hereby agree that
in the event that payments received on Accounts Receivable are insufficient to
make payment in full on the OutBack Notes Payable, each of them, jointly and
severally, shall be bound to make payment on the OutBack Notes Payable. In the
event Xx. Xxxxxxxxx and Xx. Xxxxxxxxx make payment in full on the OutBack Notes
Payable and within
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six (6) months thereafter GoAmerica receives payment on any Accounts Receivable,
GoAmerica shall reimburse Xx. Xxxxxxxxx and Xx. Xxxxxxxxx on a pro rata basis to
the extent of the Accounts Receivable payment. Neither GoAmerica nor the
Surviving Corporation shall have any liability with respect to the OutBack Notes
Payable.
ARTICLE V
CONDITIONS PRECEDENT
5.1 Conditions to Each Party's Obligation to Effect the Merger.
The respective obligation of each party to effect the Merger shall be
subject to the satisfaction prior to the Closing Date of the following
conditions:
(a) Shareholder Approval. This Agreement and the transactions
contemplated hereby and thereby shall have been approved and adopted by the
affirmative vote of the holders of a majority of the outstanding shares of
OutBack Common Stock in accordance with California General Corporation Law and
the Articles of Incorporation, as amended, and Bylaws of OutBack.
(b) Approvals. All authorizations, consents, orders or approvals
of, or declarations or filings with, any governmental entity necessary for the
consummation of the transactions contemplated by this Agreement shall have been
filed, occurred or been obtained, other than filings and approvals relating to
the Merger or affecting GoAmerica's ownership of OutBack or any of its
properties if failure to make such filing or obtain such approval would not be
materially adverse to GoAmerica or OutBack.
(c) Legal Action. No temporary restraining order, preliminary
injunction or permanent injunction or other order preventing the consummation of
the Merger shall have been issued by any governmental entity and remain in
effect, and no litigation or proceeding (other than with respect to the rights
of appraisal pursuant to California General Corporation Law Chapter 13), seeking
the issuance of such an order or injunction, or seeking the imposition against
the Surviving Corporation, GoAmerica or Sub of substantial damages if the Merger
is consummated, shall be pending. In the event that any such order or injunction
shall have been issued, each party agrees to use its reasonable efforts to have
any such injunction lifted.
(d) Statutes. No action shall have been taken, and no statute,
rule, regulation or order shall have been enacted, promulgated or issued or
deemed applicable to the Merger by any governmental entity which would (i) make
the consummation of the Merger illegal, (ii) prohibit GoAmerica's or OutBack's
ownership or operation of all or a material portion of the business or assets of
OutBack or GoAmerica, or compel GoAmerica or OutBack to dispose of or hold
separate all or a material portion of the business or assets of OutBack or
GoAmerica, as a result of the Merger or (iii) render GoAmerica, Sub or OutBack
unable to consummate the Merger.
(e) Securities Laws. The issuance of GoAmerica Common Stock and
GoAmerica Warrants pursuant to the Merger shall be exempt from registration
under the Securities Act, and shall have been qualified or registered (or shall
be exempt from such
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qualification or registration) with the appropriate authorities of all states
in which qualification or registration is required under state securities or
blue sky laws.
(f) Escrow Agreement. The Escrow Agreement shall have been executed
and delivered by each of the parties thereto and be in full force and effect.
5.2 Conditions of Obligations of GoAmerica and Sub.
The obligations of GoAmerica and Sub to effect the Merger are subject
to the satisfaction of the following conditions, unless waived by GoAmerica and
Sub:
(a) Representations and Warranties. The representations and
warranties of OutBack set forth in this Agreement shall be true and correct in
all material respects as of the date of this Agreement and as of the Closing
Date, as though made on and as of each such date, except as otherwise
contemplated by this Agreement, and GoAmerica shall have received a certificate
signed by the Chief Executive Officer of OutBack to such effect on the Closing
Date.
(b) Performance of Obligations of OutBack. OutBack shall have
performed in all material respects all obligations and covenants required to be
performed by it under this Agreement prior to the Closing Date, and GoAmerica
shall have received a certificate signed by the Chief Executive Officer of
OutBack to such effect.
(c) Opinion of OutBack's Counsel. GoAmerica shall have received an
opinion dated the Closing Date of Strategic Law Partners, LLP, counsel to
OutBack, in form and substance reasonably satisfactory to GoAmerica and its
counsel.
(d) Consents. GoAmerica shall have received duly executed copies of
all material third party consents and approvals contemplated by this Agreement
or the OutBack Disclosure Schedule, including the consent of First Bank of San
Xxxx Obispo, in form and substance reasonably satisfactory to GoAmerica, except
for such consents and approvals as GoAmerica and OutBack shall have agreed shall
not be obtained, as contemplated by the OutBack Disclosure Schedule.
(e) OutBack Shareholder List. OutBack shall have delivered to
GoAmerica a complete and accurate list of, and the number of shares owned of
record by, the holders of outstanding OutBack Common Stock as of the Closing
Date which list shall include all parties that become shareholders in accordance
with subsection (h) hereof.
(f) Invention Assignment Agreements. OutBack shall have delivered
to GoAmerica Invention Assignment, Confidentiality and Non-Solicitation
Agreements in substantially the form attached hereto as Exhibit 5.2(f)
executed by all current OutBack employees.
(g) Non-Compete Agreements. OutBack shall have delivered to
GoAmerica one-year Non-Compete Agreements in substantially the form attached
hereto as Exhibit 5.2(g) executed by the Major Shareholders listed on Schedule
5.2(g).
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(h) Exercise of Outstanding Securities. Prior to the Closing Date,
all OutBack Options shall have been exercised for shares of OutBack Common Stock
or shall have been terminated and canceled. OutBack shall have delivered written
confirmation of all such actions.
(i) Secretary's Certificate. OutBack shall have delivered a
certificate of the Secretary or an Assistant Secretary of OutBack dated as of
the Closing Date and certifying: (i) that attached thereto is a true and
complete copy of all resolutions adopted by the Board of Directors and
shareholders of OutBack relating to the transactions contemplated hereby, and
that all such resolutions are in full force and effect and are all the
resolutions adopted in connection with the transactions contemplated hereby;
(ii) that attached thereto are true and complete copies of the Articles of
Incorporation, as amended, and Bylaws of OutBack and that all such documents
have not been amended since the date of the last amendment; (iii) to the
incumbency and specimen signature of each officer of OutBack executing this
Agreement and any documents or certificates executed in furtherance hereof; and
a certification by another officer of OutBack as to the incumbency and signature
of the officer signing the certificate referred to in this clause; and (iv) such
other matters as GoAmerica shall reasonably request.
(j) Dissenting Shares. The number of Dissenting Shares shall not
exceed 4% of the number of outstanding shares of OutBack Common Stock as of the
Effective Time of the Merger.
(k) Share Restriction Agreements. OutBack shall have delivered to
GoAmerica Share Restriction Agreements in substantially the form attached hereto
as Exhibit 5.2(k), duly executed by those Major Shareholders listed on Schedule
5.2(k).
5.3 Conditions of Obligations of OutBack.
The obligation of OutBack to effect the Merger is subject to the
satisfaction of the following conditions unless waived by OutBack:
(a) Representations and Warranties. The representations and
warranties of GoAmerica and Sub set forth in this Agreement shall be true and
correct in all material respects as of the date of this Agreement and as of the
Closing Date as though made on and as of each such date, except as otherwise
contemplated by this Agreement, and OutBack shall have received a certificate
signed by the Chief Executive Officer or President of GoAmerica to such effect.
(b) Performance of Obligations of GoAmerica and Sub. GoAmerica and
Sub shall have performed in all material respects all obligations and covenants
required to be performed by them under this Agreement prior to the Closing Date,
and OutBack shall have received a certificate signed by the Chief Executive
Officer or President of GoAmerica to such effect.
(c) Consents. OutBack shall have received duly executed copies of
all material third-party consents and approvals contemplated by this Agreement
or the GoAmerica Disclosure Schedule in form and substance reasonably
satisfactory to OutBack, except for such consents and approvals as OutBack and
GoAmerica shall have agreed shall not be obtained, as contemplated by the
GoAmerica Disclosure Schedule.
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(d) Secretary's Certificate. GoAmerica and Sub shall have delivered
a certificate of the Secretary or an Assistant Secretary of GoAmerica and Sub
dated as of the Closing Date and certifying: (i) that attached thereto is a true
and complete copy of all resolutions adopted by the Board of Directors and
stockholders of GoAmerica and Sub relating to the transactions contemplated
hereby, and that all such resolutions are in full force and effect and are all
the resolutions adopted in connection with the transactions contemplated hereby;
(ii) that attached thereto are true and complete copies of the Amended and
Restated Certificate of Incorporation and Bylaws of GoAmerica and the
Certificate of Incorporation and Bylaws of Sub and that all such documents have
not been amended since the date of the last amendment; and (iii) to the
incumbency and specimen signature of each officer of GoAmerica and Sub executing
this Agreement and any documents or certificates executed in furtherance hereof;
and a certification by another officer of GoAmerica and Sub as to the incumbency
and signature of the officer signing the certificate referred to in this clause.
(e) Offer Letters. GoAmerica shall have executed and delivered
offer letters to the employees of OutBack listed on Schedule 5.3(e).
ARTICLE VI
INDEMNIFICATION
6.1 Indemnification by the Shareholders.
Subject to the limitations set forth in Section 6.3 and Section 8.1 and
elsewhere in this Agreement, following the Effective Time of the Merger, each of
the shareholders of OutBack who receive a portion of the Merger Shares (the
"Shareholders"), by acceptance of its portion of the Merger Shares, agrees, to
the extent of such Shareholder's pro rata portion of the Escrow Shares, as
calculated in accordance with Section 2.3 hereof, to indemnify, defend and hold
harmless GoAmerica, each affiliate of GoAmerica, including any of its direct or
indirect subsidiaries (including, after the Effective Time of the Merger, the
Surviving Corporation), and each of its respective officers, directors and
representatives and each of the heirs, executors, successors and assigns of any
of the foregoing (the "GoAmerica Indemnitees") from and against, and to pay or
reimburse the GoAmerica Indemnitees for, the following losses, liabilities,
taxes, damages, deficiencies, obligations, fines, expenses, claims, demands,
actions, suits, proceedings, judgments or settlements, whether or not resulting
from Third Party Claims, (as hereinafter defined) incurred or suffered by any
GoAmerica Indemnitee, including interest and penalties with respect thereto and
out-of-pocket expenses and reasonable attorneys' and accountants' fees and
expenses incurred in the investigation or defense of any of the same or in
asserting, preserving or enforcing any of the GoAmerica Indemnitee's rights
hereunder ("Indemnifiable Losses") to the extent:
(a) arising out of or resulting from the breach by OutBack or the
Shareholders, prior to the Effective Time of the Merger, of any agreement or
covenant contained in this Agreement; and
(b) arising out of or resulting from any breach of or inaccuracy in
any representation or warranty of OutBack or the Shareholders contained in this
Agreement.
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6.2 Procedures Relating to Indemnification.
(a) In order for a GoAmerica Indemnitee to be entitled to any
indemnification provided for under this Agreement in respect of, arising out of
or involving a claim (including for this purpose the commencement of any audit,
examination or inquiry with respect to Taxes) made by any individual,
corporation, partnership, limited liability company, joint venture, estate,
trust, association, organization governmental body or other entity who is not a
GoAmerica Indemnitee against a GoAmerica Indemnitee (a "Third Party Claim"),
such GoAmerica Indemnitee must notify the Shareholder Representative (as defined
in Section 6.6) on behalf of the Shareholders (the "Indemnifying Party") in
writing, and in reasonable detail, of the Third Party Claim promptly but in any
event within ten (10) business days after receipt of notice of such claim;
provided, however, that failure to give such notification shall not affect the
indemnification provided hereunder except to the extent the Shareholder
Representative shall have been prejudiced as a result of such failure. After any
required notification (if applicable), the GoAmerica Indemnitee shall deliver to
the Shareholder Representative, promptly but in any event within five (5)
business days, after the GoAmerica Indemnitee's receipt thereof, copies of all
notices and documents (including court papers) received by the GoAmerica
Indemnitee relating to the Third Party Claim.
(b) If a Third Party Claim is made against a GoAmerica Indemnitee,
the Shareholder Representative will be entitled to participate in the defense
thereof and, if it so chooses, to assume the defense thereof with counsel
selected by the Shareholder Representative and reasonably satisfactory to the
GoAmerica Indemnitee. Should the Shareholder Representative so elect to assume
the defense of a Third Party Claim, the Indemnifying Party will not be liable to
the GoAmerica Indemnitee for any legal expenses subsequently incurred by the
GoAmerica Indemnitee in connection with the defense thereof; provided that if,
under applicable standards of professional conduct (as advised in writing by
counsel to the Indemnifying Party), a conflict on any significant issue between
the GoAmerica Indemnitee and the Indemnifying Party exists in respect of such
Third Party Claim, the Indemnifying Party shall pay the reasonable fees and
expenses of one such additional counsel to act with respect to such issue as may
be required to be retained in order to resolve such conflict. If the Shareholder
Representative assumes such defense, the GoAmerica Indemnitee shall have the
right to participate in the defense thereof and to employ counsel, at its own
expense, separate from the counsel employed by the Shareholder Representative it
being understood that the Shareholder Representative shall control such defense.
The Indemnifying Party shall be liable for the fees and expenses of counsel
employed by the GoAmerica Indemnitee for any period during which the
Indemnifying Party has not assumed the defense thereof (other than during any
period in which the GoAmerica Indemnitee shall have failed to give notice of the
Third Party Claim as provided above and a reasonable period after such notice).
If the Shareholder Representative chooses to defend or prosecute a Third Party
Claim, all the parties hereto shall cooperate in the defense or prosecution
thereof, which cooperation shall include the retention and the provision to the
Shareholder Representative of records and information which are reasonably
relevant to such Third Party Claim, and making employees available on a mutually
convenient basis to provide additional information and explanation of any
material provided hereunder. If the Shareholder Representative chooses to defend
or prosecute any Third Party Claim, the GoAmerica Indemnitee will agree to any
settlement, compromise or discharge of such Third Party Claim which the
Shareholder Representative may recommend and which by its terms obligates the
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Indemnifying Party to pay the full amount of liability in connection with such
Third Party Claim; provided, however, that, without the GoAmerica Indemnitee's
consent (which consent shall not be unreasonably withheld or delayed), the
Indemnifying Party shall not consent to entry of any judgment or enter into any
settlement (i) that provides for injunctive or other nonmonetary relief
affecting the GoAmerica Indemnitee or (ii) that does not include as an
unconditional term thereof the giving by each claimant or plaintiff to such
GoAmerica Indemnitee of a release from all liability with respect to such claim.
Whether or not the Indemnifying Party shall have assumed the defense of a Third
Party Claim, the GoAmerica Indemnitee shall not admit any liability with respect
to, or settle, compromise or discharge, such Third Party Claim without the
Indemnifying Party's prior written consent.
(c) In order for a GoAmerica Indemnitee to be entitled to any
indemnification provided for under this Agreement in respect of a claim that
does not involve a Third Party Claim, the GoAmerica Indemnitee shall deliver
written notice of such claim, in reasonable detail, with reasonable promptness
to the Shareholder Representative. The failure by any GoAmerica Indemnitee to so
notify the Shareholder Representative shall not relieve the Indemnifying Party
from any liability which it may have to such GoAmerica Indemnitee under this
Agreement, except to the extent that the Indemnifying Party shall have been
actually prejudiced by such failure. Any notice pursuant to this Section 6.2(c)
shall contain a statement, in prominent and conspicuous type, that if the
Shareholder Representative does not dispute its liability to the GoAmerica
Indemnitee with respect to the claim made in such notice (the "Claim") by notice
to the GoAmerica Indemnitee prior to the expiration of a 30-calendar-day period
following the Shareholder Representative's receipt of the notice of the Claim,
the Claim shall be conclusively deemed a liability of the Indemnifying Party
under this Agreement and the Indemnifying Party shall pay the amount of such
liability to the GoAmerica Indemnitee on demand or, in the case of any notice in
which the amount of the Claim (or any portion thereof) is estimated, on such
later date when the amount of the Claim (or any portion thereof) becomes finally
determined. If the Shareholder Representative has timely disputed its liability
with respect to the Claim, as provided above, the Shareholder Representative and
the GoAmerica Indemnitee shall proceed in good faith to negotiate a resolution
of the Claim and, if the Claim is not resolved through negotiations, such
GoAmerica Indemnitee shall be free to pursue such remedies as may be available
to enforce the rights of such indemnitees hereunder.
6.3 Limitation on Indemnification.
Notwithstanding any provision hereof to the contrary, except Section
6.4 and Section 6.5, the Shareholders' liability for Indemnifiable Losses
arising under Section 6.1 hereof shall be limited (a) in the aggregate to the
value of the Escrow Shares and other related property on deposit under the
Escrow Agreement, and (b) to only those Indemnifiable Losses for which the
Shareholder Representative shall have received written notice in accordance with
the provisions of the Escrow Agreement. No claim, demand, suit or cause of
action shall be brought against the Shareholders under this Article VI unless
and until the aggregate amount of Indemnifiable Losses under this Article VI
exceeds $5,000, in which event the GoAmerica Indemnitees shall be entitled to
indemnification from the Shareholders for all Indemnifiable Losses in excess of
$5,000 (subject to the other limitations on liability set forth herein).
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6.4 Exclusive Remedy.
Absent actual fraud or intentional wrongdoing in connection with this
Agreement and the transactions contemplated herein, GoAmerica hereby
acknowledges and agrees, on its own behalf and on behalf of all GoAmerica
Indemnitees, that the sole and exclusive remedy with respect to any and all
claims (including for any Indemnifiable Losses) relating to this Agreement, the
transactions contemplated hereby, and OutBack and its assets, liabilities and
business, shall be pursuant to the indemnification provisions of this Article
VI. Absent actual fraud or intentional wrongdoing in connection with this
Agreement and the transactions contemplated herein, in furtherance of the
foregoing, GoAmerica hereby waives, from and after the Closing Date, to the
fullest extent permitted under applicable law, any and all rights, claims and
causes of action it or any other GoAmerica Indemnitee may have against any of
the Shareholders, except for such as may be covered by the indemnification
provisions of this Article VI.
6.5 Event of Fraud.
Notwithstanding any provision hereof, nothing in this Article VI shall
limit, in any manner, any remedy at law or equity, to which any GoAmerica
Indemnitee may be entitled as a result of any fraudulent misrepresentation made
by OutBack or the Shareholders in this Agreement except that, in any event, the
liability of any Shareholder shall not exceed the higher of the value of the
Merger Shares and Merger Warrants received by him (i) on the date of issuance or
(ii) actually realized by such Shareholder subsequent to issuance.
6.6 Shareholder Representative.
Each of the Shareholders by acceptance of its portion of the Merger
Shares shall be deemed to have designated and appointed Xxxxx Xxxxxxxxx (and
Xxxxx Xxxxxxxxx as the alternate in the event that Xx. Xxxxxxxxx is unable to
serve) with full power of substitution (the "Shareholder Representative") as the
representative of any such Shareholder to perform all such acts as are required,
authorized or contemplated by this Agreement to be performed by the Shareholders
and deemed to have acknowledged that the Shareholder Representative shall be the
only person authorized to take any action so required, authorized or
contemplated by this Agreement by any Shareholder including the execution of all
agreements and certificates referenced herein. Each Shareholder is thereby
deemed to have further acknowledged that the foregoing appointment and
designation shall be deemed to be coupled with an interest and shall survive the
death or incapacity of such Shareholder. Each Shareholder is thereby deemed to
have authorized the other parties hereto to disregard any notice or other action
taken by each Shareholder pursuant to this Agreement except for the Shareholder
Representative. The other parties hereto are and will be entitled to rely on any
action so taken or any notice given by the Shareholder Representative and are
and will be entitled and authorized to give notices only to the Shareholder
Representative for any notice contemplated by this Agreement to be given to any
such Shareholder. By the acceptance of its portion of the Merger Consideration,
each Shareholder shall be deemed to have waived any and all claims that they may
have or assert, including those that may arise in the future, against the
Shareholder Representative for any action or inaction taken or not taken by the
Shareholder Representative in connection with his service as the Shareholder
Representative, except in the case of the Shareholder Representative's own bad
faith or willful misconduct. In consideration of his agreement to serve as the
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Shareholder Representative, the Shareholder Representative shall be released
from any liability for any action or inaction taken or not taken in his capacity
as the Shareholder Representative, except in the case of the Shareholder
Representative's own bad faith or willful misconduct. Each Shareholder hereby
agrees that the reasonable and customary fees and expenses incurred by the
Shareholder Representative in the exercise of his right or the performance of
his duties hereunder (including reasonable attorneys' fees and expenses and the
fees and expenses of accountants and other experts) shall be borne by the
Shareholders based on their pro rata portion of the Escrow Shares, and each
Shareholder agrees to promptly reimburse the Shareholder Representative with
respect to such amounts.
6.7 Breach of Representation by GoAmerica.
The absence of indemnification provision in favor of OutBack or the
Shareholders for breach of representations and covenants made hereunder by
GoAmerica and Sub is not intended to limit OutBack's or the Shareholders' right
to institute a claim, demand, suit or cause of action against GoAmerica to
recover damages incurred or suffered by OutBack or the Shareholders as a result
of any such breach.
ARTICLE VII
TERMINATION
7.1 Termination.
(a) This Agreement may be terminated at any time prior to the
Effective Time of the Merger, whether before or after approval of the Merger by
the shareholders of OutBack:
(i) by mutual agreement of GoAmerica, Sub and OutBack;
(ii) by GoAmerica, if there has been a breach by OutBack of
any representation, warranty, covenant or agreement set forth in this Agreement
on the part of OutBack which is material and which OutBack fails to cure within
ten (10) business days after notice thereof is given by GoAmerica (except that
no cure period shall be provided for a breach by OutBack which by its nature
cannot be cured);
(iii) by OutBack, if there has been a breach by GoAmerica or
Sub of any representation, warranty, covenant or agreement set forth in this
Agreement on the part of GoAmerica or Sub which is material and which GoAmerica
or Sub, as the case may be, fails to cure within ten (10) days after notice
thereof is given by OutBack (except that no cure period shall be provided for a
breach by GoAmerica or Sub which by its nature cannot be cured);
(iv) by GoAmerica or OutBack, if the Merger shall not have
been consummated on or before November 15, 2001;
(v) by GoAmerica or OutBack if the required approval of the
shareholders of OutBack contemplated by this Agreement shall not have been
obtained by reason of the failure to obtain the required (i) written consent or
(ii) vote upon a vote taken at the Shareholders' Meeting or at any adjournment
thereof; or
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(vi) by GoAmerica or OutBack if any permanent injunction or
other order of a court or other competent authority preventing the Merger shall
have become final and nonappealable.
(b) Where action is taken to terminate this Agreement pursuant to
this Section 7.1, it shall be sufficient for such action to be authorized by the
Board of Directors of the party taking such action. In the event of the
termination of this Agreement, all further obligations of the parties under this
Agreement (other than the provisions of this Section 7.1, Section 4.13 and
Section 4.16) shall forthwith be terminated without further liability of any
party to the other, provided that nothing herein shall relieve any party from
liability for any breach of this Agreement.
ARTICLE VIII
GENERAL PROVISIONS
8.1 Survival of Representations, Warranties and Agreements.
All representations, warranties and agreements in this Agreement or in
any instrument delivered pursuant to this Agreement shall be deemed to be
conditions to the Merger and shall survive the consummation of the Merger for a
period of twelve (12) months, except for representations and warranties relating
to tax matters which such representations and warranties shall survive for the
duration of the applicable statute of limitations plus thirty (30) days.
8.2 Amendment.
This Agreement may be amended by the parties hereto at any time before
or after approval of the Merger by the shareholders of OutBack; provided that
following approval of the Merger by the shareholders of OutBack, no amendment
shall be made which by law requires the further approval of such shareholders
without obtaining such further approval. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto.
8.3 Extension; Waiver.
At any time prior to the Effective Time of the Merger, each of OutBack
and GoAmerica may, to the extent legally allowed, (a) extend the time for the
performance of any of the obligations or other acts of the other, (b) waive any
inaccuracies in the representations and warranties made to it contained herein
or in any document delivered pursuant hereto and (c) waive compliance with any
of the agreements or conditions for the benefit of it contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party.
8.4 Notices.
All notices and other communications hereunder shall be in writing and
shall be deemed given if delivered personally or mailed by registered or
certified mail (return receipt requested) or sent by telecopy, confirmation
received, to the parties at the following addresses and telecopy numbers (or at
such other address or number for a party as shall be specified by like notice):
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(a) if to GoAmerica or Sub, to:
GoAmerica, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xx. Xxxxx Xxxxxxxxx
Telecopy No.: (000) 000-0000
Telephone No.: (000) 000-0000
with a copy to:
Xxxx and Xxxx LLP
000 Xxxxxxx Xxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
Telecopy No.: (000) 000-0000
Telephone No.: (000) 000-0000
(b) if to OutBack, to:
OutBack Resource Group, Inc.
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxxxxxx
Telecopy No.: (000) 000-0000
Telephone No.: (000) 000-0000
with a copy to:
Strategic Law Partners, LLP
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
Telephone No.: (000) 000-0000
(c) if to any Shareholder, to:
Xxxxx Xxxxxxxxx, as Shareholder Representative
X.X. Xxx 0000
Xxx Xxxx Xxxxxx, XX 00000
Telecopy No.: (000) 000-0000
Telephone No.: (000) 000-0000
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8.5 Interpretation.
When a reference is made in this Agreement to Sections, Schedules or
Exhibits, such reference shall be to a Section, Schedule or Exhibit to this
Agreement unless otherwise indicated. The words "include," "includes" and
"including" when used herein shall be deemed in each case to be followed by the
words "without limitation." The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
8.6 Counterparts.
This Agreement may be executed in any number of counterparts, all of
which shall be considered one and the same agreement and shall become effective
when one or more counterparts have been signed by each of the parties and
delivered to the other party.
8.7 Entire Agreement.
This Agreement and the documents and instruments and other agreements
among the parties delivered pursuant hereto constitute the entire agreement
among the parties with respect to the subject matter hereof and supersede all
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof and are not intended to confer upon
any other person any rights or remedies hereunder except as otherwise expressly
provided herein.
8.8 No Transfer.
This Agreement and the rights and obligations set forth herein may not
be transferred or assigned by operation of law or otherwise without the consent
of each party hereto. This Agreement is binding upon and will inure to the
benefit of the parties hereto and their respective successors and permitted
assigns.
8.9 Severability.
If any provision of this Agreement, or the application thereof, will
for any reason and to any extent be invalid or unenforceable, the remainder of
this Agreement and application of such provision to other persons or
circumstances will be interpreted so as to reasonably effect the intent of the
parties hereto. The parties further agree to replace such void or unenforceable
provision of this Agreement with a valid and enforceable provision that will
achieve, to the extent possible, the economic, business and other purposes of
the void or unenforceable provision.
8.10 Other Remedies.
Except as otherwise provided herein, any and all remedies herein
expressly conferred upon a party will be deemed cumulative with and not
exclusive of any other remedy conferred hereby or by law or equity on such
party, and the exercise of any one remedy will not preclude the exercise of any
other.
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8.11 Further Assurances.
Each party agrees to cooperate fully with the other parties and to
prepare, execute, deliver and/or file such further instruments, documents and
agreements (including, in the case of OutBack, any documents or filings
necessary to protect or assign the OutBack Intellectual Property) and to give
such further written assurances as may be reasonably requested by any other
party to evidence and reflect the transactions described herein and contemplated
hereby and to carry into effect the intents and purposes of this Agreement.
8.12 Absence of Third Party Beneficiary Rights.
No provision of this Agreement or the Schedules or Exhibits hereto is
intended, nor will be interpreted, to provide or to create any third party
beneficiary rights or any other rights of any kind in any client, customer,
affiliate, employee, partner or any party hereto or any other person or entity
unless specifically provided otherwise herein or in the Exhibits hereto, and,
except as so provided, all provisions hereof will be personal solely between the
parties to this Agreement.
8.13 Mutual Drafting.
This Agreement is the joint product of GoAmerica and OutBack, and each
provision hereof has been subject to the mutual consultation, negotiation and
agreement of GoAmerica and OutBack, and shall not be construed for or against
any party hereto.
8.14 Governing Law.
This Agreement shall be governed in all respects, including validity,
interpretation and effect, by the laws of the State of Delaware (without giving
effect to its choice of law principles).
8.15 Knowledge.
As used in this Agreement, the expression "to OutBack's knowledge"
means that any of the officers, directors or shareholders of OutBack have
awareness or knowledge of such matter.
* * * * *
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IN WITNESS WHEREOF, GoAmerica, Sub and OutBack have caused this
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the date first written above.
GOAMERICA, INC.
By: /s/ Xxxxx Xxxxxxxxx
----------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Chief Executive Officer
GOAMERICA ACQUISITION III CORP.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
OUTBACK RESOURCE GROUP, INC.
By: /s/ Xxxxx Xxxxxxxxx
----------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: President
As to Section 2.3, Section 3.1 and Article
VI only:
THE SHAREHOLDERS:
/s/ Xxxxx Xxxxxxxxx
-------------------------------------------
Xxxxx Xxxxxxxxx, individually
/s/ Xxxxx Xxxxxxxxx
-------------------------------------------
Xxxxx Xxxxxxxxx, individually
/s/ Xxxxxxx Xxxxxxx
-------------------------------------------
Xxxxxxx Xxxxxxx, individually
/s/ Xxxxx Xxxxxxxxx
-------------------------------------------
Xxxxx Xxxxxxxxx, individually
[Signature page of Merger Agreement and Plan of Reorganization]
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EXHIBIT 1.1
CALIFORNIA AGREEMENT AND PLAN OF MERGER
EXHIBIT 1.4(b)
WARRANT AGREEMENT
EXHIBIT 2.3
ESCROW AGREEMENT
EXHIBIT 5.2(f)
INVENTION ASSIGNMENT AGREEMENT
EXHIBIT 5.2(g)
NON-COMPETE AGREEMENT
EXHIBIT 5.2(k)
SHARE RESTRICTION AGREEMENT
SCHEDULE 4.20
NOTES PAYABLE
1. $50,000 bank loan - First Bank of San Xxxx Obispo
SCHEDULE 5.2(g)
PARTIES TO EXECUTE NON-COMPETE AGREEMENTS
Xxxxx Xxxxxxxxx
Xxxxxxx Xxxxxxx
Xxxxx Xxxxxxxxx
SCHEDULE 5.2(k)
SHAREHOLDERS TO
EXECUTE SHARE RESTRICTION AGREEMENT
Xxxxx Xxxxxxxxx
Xxxxxxx Xxxxxxx
Xxxxx Xxxxxxxxx
SCHEDULE 5.3(e)
EMPLOYEES TO RECEIVE OFFER LETTERS
Xxxxx Xxxxxxxxx
Xxxxxxx Xxxxxxx
Xxxxx Xxxxxxxxx
OUTBACK DISCLOSURE SCHEDULE
GOAMERICA DISCLOSURE SCHEDULE
