Exhibit 10.3
Execution Copy
GOAMERICA, INC.
STOCK PURCHASE AGREEMENT
290,135 SHARES OF SERIES A PREFERRED STOCK
August 1, 2007
SCHEDULES AND EXHIBITS
SCHEDULE A Schedule of Investors
SCHEDULE B Schedule of Exceptions
SCHEDULE C Operating Subsidiaries
SCHEDULE D Insurance
EXHIBIT A Certificate of Designations
EXHIBIT B Investor Rights Agreement
EXHIBIT C Opinion of Company Counsel
EXHIBIT D Compliance Certificate
SERIES A PREFERRED STOCK PURCHASE AGREEMENT
THIS SERIES A PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement") is
made as of August 1, 2007, by and between GoAmerica, Inc., a Delaware
corporation (the "Company"), and the investors listed on Schedule A hereto
(each, an "Investor" and collectively, the "Investors").
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Stock.
1.1 Sale and Issuance of Series A Preferred Stock.
(a) The Board of Directors of the Company has approved, and
the Company shall file with the Secretary of State of the State of Delaware on
or before the Closing (as defined below), a Certificate of Designations in the
form attached hereto as Exhibit A (the "Certificate of Designations").
(b) The Board of Directors of the Company has authorized (i)
the sale and issuance to the Investors of the Series A Preferred Stock (as
defined below) and (ii) the issuance of the shares of Common Stock (as defined
below) to be issued upon conversion of the Series A Preferred Stock (the
"Conversion Shares"). The Series A Preferred Stock and the Conversion Shares
shall have the rights, preferences, privileges and restrictions set forth in the
Certificate of Designations.
(c) Subject to the terms and conditions of this Agreement,
each Investor agrees, severally and not jointly, to purchase at the Closing (as
defined below) and the Company agrees to sell and issue to each Investor at the
Closing, that number of shares of the Company's Series A Preferred Stock set
forth opposite each Investor's name on Schedule A hereto for a purchase price of
$5.17 per share.
1.2 Signing and Closing. This Agreement is being executed
concurrently with the signing of that certain asset purchase agreement (the
"Asset Purchase Agreement"), dated as the date hereof, by and between
Acquisition 1 Corp., a wholly-owned subsidiary of the Company, and MCI
Communications Services, Inc., providing for the Company's purchase of a
telecommunications relay services business (the "Business"). The purchase and
sale of the Series A Preferred Stock hereunder shall take place at the offices
of Xxxxxxxxxx Xxxxxxx PC, 00 Xxxxxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxxxx 00000
promptly following the filing of the Certificate of Designations with the
Secretary of State of the State of Delaware (which time and place are designated
as the "Closing"). At the Closing, the Company shall deliver to each Investor a
certificate representing the Series A Preferred Stock that such Investor is
purchasing against payment of the purchase price therefor by wire transfer of
immediately available funds to an account designated by the Company.
1.3 Use of Proceeds. The Company shall use the proceeds from the
sale of the Series A Preferred Stock to the Investors (a) for general working
capital purposes, (b) to pay the $1,000,000 deposit payable upon execution of
the Asset Purchase Agreement and (c) to pay fees and expenses incurred in
connection with the foregoing.
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1.4 Transaction Fee. Concurrently with the Closing, the
Company shall pay to the Investors by wire transfer of immediately available
funds (to the account or accounts designated by the Investors prior to the
Closing), an aggregate transaction fee of $40,000.
2. Representations and Warranties of the Company. The Company hereby
represents and warrants to each Investor that, except as set forth in the SEC
Reports (as defined below) or on the Schedule of Exceptions (the "Schedule of
Exceptions") furnished to each Investor prior to execution hereof and attached
hereto as Schedule B, which exceptions shall be deemed to be representations and
warranties as if made hereunder:
2.1 Organization, Good Standing and Qualification. The Company
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. The Company is duly qualified to transact
business and is in good standing in each jurisdiction in which the failure to so
qualify would have a material adverse change in the assets, liabilities,
customer or supplier relationships, financial condition, operations or results
of operations of the Company and the Business taken as a whole, provided,
however, in each case, not including any change that (A) is generally applicable
to the U.S. economy, (B) is generally applicable to Internet protocol data and
voice providers, (C) results from the execution of the Asset Purchase Agreement,
the announcement of the Asset Purchase Agreement or the consummation of the
transactions contemplated by the Asset Purchase Agreement or (D) relates to
changes in generally accepted accounting principles generally applicable to
companies serving as Internet protocol data and voice providers occurring after
the date of the Asset Purchase Agreement (a "Material Adverse Effect").
2.2 Capitalization and Voting Rights.
(a) Authorized Stock. The authorized capital of the
Company consists of:
(i) Preferred Stock. 4,351,943 shares of Preferred
Stock, par value $.01 per share (the "Preferred Stock"), none of which are
issued or outstanding as of the date hereof. Upon filing the Certificate of
Designations with the Secretary of State of the State of Delaware, 290,135
shares of Preferred Stock shall be designated Series A Preferred Stock (the
"Series A Preferred Stock"), all of which shall be sold pursuant to this
Agreement; and
(ii) Common Stock. 200,000,000 shares of Common
Stock, par value $.01 per share ("Common Stock"), of which 2,486,668 shares are
issued and outstanding as of the date hereof, and 24,063 shares are held in
treasury as of the date hereof.
(b) Valid Issuance. The outstanding shares of Common
Stock are all duly and validly authorized and issued, fully paid and
nonassessable, and were issued in compliance with all applicable state and
federal laws concerning the issuance of securities.
(c) Rights to Acquire. Except for (i) options to
purchase an aggregate of 83,191 shares of Common Stock granted and outstanding
under the GoAmerica Communications Corp. 1999 Stock Option Plan, the
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GoAmerica, Inc. 1999 Stock Plan, the GoAmerica, Inc. Employee Stock Purchase
Plan and the GoAmerica, Inc. 2005 Equity Compensation Plan (collectively, the
"Company Option Plans") and (ii) warrants to purchase an aggregate of 84,320
shares of Common Stock granted and outstanding, there are not outstanding any
options, warrants, rights (including conversion or preemptive rights) or
agreements for the purchase or acquisition from the Company of any shares of its
capital stock as of the date hereof. The Company has reserved a total of 272,478
shares of Common Stock for issuance under the Company Option Plans (including
the shares described above).
(d) Voting of Shares. Other than the Investor Rights
Agreement, dated as of the date hereof, a copy of which is attached hereto as
Exhibit B (the "Investor Rights Agreement"), the Company is not a party or
subject to any agreement or understanding and, to the Company's knowledge, there
is no agreement or understanding between any persons and/or entities which
affects or relates to the voting or giving of written consents with respect to
any security of the Company.
2.3 Operating Subsidiaries.
(a) Schedule C hereto sets forth the name of each
operating subsidiary of the Company (each, an "Operating Subsidiary" and
collectively, the "Operating Subsidiaries") and the jurisdiction in which such
Operating Subsidiary is incorporated. Each Operating Subsidiary is a duly
organized and validly existing corporation or other entity and has all requisite
corporate power and authority to carry on its business as now conducted. Each
Operating Subsidiary is duly qualified to transact business and is in good
standing in each jurisdiction in which the failure so to qualify would have a
Material Adverse Effect.
(b) All of the outstanding shares of capital stock of
each Operating Subsidiary of the Company are duly and validly authorized and
issued, fully paid and non-assessable and are owned directly by the Company,
free and clear of all liens, encumbrances, preemptive rights, subscription
rights, other rights to purchase, voting or transfer restrictions and other
claims, except as set forth in or contemplated by the Credit Agreement. There
are no outstanding rights, warrants or options to acquire, or instruments
convertible into or exchangeable for, any equity interests of any Operating
Subsidiary.
(c) Each subsidiary of the Company that is not an
Operating Subsidiary (i) has consolidated gross revenues for the period of four
fiscal consecutive quarters most recently ended of less than $5,000, (ii) has
consolidated total assets on the last day of the fiscal quarter most recently
ended of less than $5,000 and (iii) does not own or possess the right to use any
Intellectual Property Rights or other assets that are material to the business
of the Company and its subsidiaries, taken as a whole. For purposes of this
Agreement, the terms "subsidiary" and "subsidiaries" of any person means any
corporation, partnership, joint venture, limited liability company, association
or other legal entity of which such person (either alone or through or together
with any other subsidiary), owns, directly or indirectly, 50% or more of the
stock or other equity interests the holder of which is generally entitled to
vote for the election of the board of directors or other governing body of such
corporation, partnership, joint venture, limited liability company, association
or other legal entity.
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2.4 Authorization. Other than the filing of the Certificate of
Designations with the Secretary of State of the State of Delaware and filings
required under federal and state securities laws, all corporate action on the
part of the Company, its directors and stockholders necessary for the
authorization, execution and delivery by the Company of this Agreement and the
Investor Rights Agreement, the performance of all obligations of the Company
hereunder and thereunder, and the authorization, sale, issuance and delivery of
the Series A Preferred Stock being sold hereunder and the Conversion Shares
issuable upon conversion of the Series A Preferred Stock has been taken or will
be taken prior to the Closing. This Agreement and the Investor Rights Agreement
constitute valid and legally binding obligations of the Company, enforceable in
accordance with their respective terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors' rights generally and (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies.
2.5 Valid Issuance of Preferred Stock. The Series A Preferred
Stock that is being purchased by the Investors hereunder, when issued, sold and
delivered in accordance with the terms of this Agreement for the consideration
expressed herein, will be duly and validly issued, fully paid and nonassessable
and will be free of restrictions on transfer, other than restrictions on
transfer (a) under this Agreement and the Investor Rights Agreement, (b) under
applicable state and federal securities laws and (c) otherwise imposed as a
result of actions taken by the Investors. The Conversion Shares have been duly
and validly reserved for issuance and, upon issuance in accordance with the
terms of the Certificate of Designations, will be duly and validly issued, fully
paid and nonassessable and will be free of restrictions on transfer, other than
restrictions on transfer (a) under this Agreement and the Investor Rights
Agreement, (b) under applicable state and federal securities laws and (c)
otherwise imposed as a result of actions taken by the Investors.
2.6 Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part of
the Company is required in connection with the consummation of the transactions
contemplated by this Agreement, except for (i) such consents, approvals, orders,
authorizations, registrations, qualifications, designations, declarations or
filings which are not required to be obtained prior to the Closing, (ii) the
filing of the Certificate of Designations with the Secretary of State of the
State of Delaware, (iii) the filing with The Nasdaq Stock Market, Inc.
("Nasdaq") of an application to list the Conversion Shares and (iv) such filings
as are required pursuant to applicable federal and state securities laws and
blue sky laws, which filings will be effected within the required statutory
period.
2.7 Offering. Subject in part to the truth and accuracy of
each Investor's representations set forth in Section 3 of this Agreement, the
offer, sale and issuance of the Series A Preferred Stock and Conversion Shares
as contemplated by this Agreement are exempt from the registration requirements
of the Securities Act of 1933, as amended (the "Act"), and the qualification or
registration requirements of applicable state blue sky laws, as such
registration requirements and laws currently exist. Neither the Company nor any
authorized agent acting on its behalf will take any action hereafter that would
cause the loss of such exemption.
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2.8 Litigation. There is no action, suit, proceeding or
investigation pending or, to the Company's knowledge, currently threatened
against the Company that questions the validity of this Agreement, the Asset
Purchase Agreement, the Managed Services Agreement (as defined below) or the
Investor Rights Agreement, or the right of the Company to enter into such
agreements or to consummate the transactions contemplated hereby, or that would
reasonably be expected to result, either individually or in the aggregate, in a
Material Adverse Effect or in any change in the current equity ownership of the
Company. Neither the Company nor any Operating Subsidiary is a party or subject
to the provisions of any order, writ, injunction, judgment or decree of any
court or government agency or instrumentality.
2.9 Asset Purchase Agreement and Managed Services Agreement.
The Company has delivered to counsel to the Investors true and complete copies
of the Managed Services Agreement, dated as of the date hereof, by and between
the Company and Stellar Nordia Services LLC, a Nevada limited liability company
(the "Managed Services Agreement" and, together with the Asset Purchase
Agreement and the documents referenced in both of the Asset Purchase Agreement
and the Managed Services Agreement pertaining to the acquisition described in
the Asset Purchase Agreement, the "Operative Agreements"). All corporate action
on the part of the Company, its directors and stockholders necessary for the
authorization, execution and delivery by the Company of the Operative Agreements
and the performance of all obligations of the Company thereunder has been taken
or will be taken prior to the closing provided for in the Asset Purchase
Agreement. The Operative Agreements will constitute, when executed, valid and
legally binding obligations of the Company, and will be enforceable in
accordance with their respective terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors' rights generally and (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies. No consent, approval, order or authorization
of, or registration, qualification, designation, declaration or filing with, any
federal, state or local governmental authority on the part of the Company is
required in connection with the consummation of the transactions contemplated by
the Operative Agreements, except as described in the Asset Purchase Agreement
and the Schedules thereto as of the date hereof.
2.10 Intellectual Property. Except as would not have a
Material Adverse Effect:
(a) To its knowledge, the Company and each Operating
Subsidiary owns sufficient right, title and interest in and to, or has
sufficient right to use pursuant to a valid license, option, assignment or
agreement, all of the Intellectual Property Rights (as defined below) used by
them and which the Company believes are necessary for the operation of the
business of the Company and each Operating Subsidiary as presently conducted,
and the lack of which would conflict with or infringe the rights of any third
party, except for such items as have yet to be conceived or developed or that
are expected to be available for licensing on reasonable terms. The Company and
each Operating Subsidiary has taken reasonable actions to maintain and protect
the confidentiality of Intellectual Property Rights consisting of trade secrets
that it owns. The Intellectual Property Rights that the Company or any Operating
Subsidiary owns, consisting of patents, copyrights, trademarks, service marks
and trade names, do not, to the Company's knowledge, conflict with or infringe
upon the rights of third parties, except for such
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items as have yet to be conceived or developed or that are expected to be
available for licensing on reasonable terms. Since January 1, 2006, there have
been no written claims made against the Company or any subsidiary asserting the
invalidity, misuse or unenforceability of any Intellectual Property Rights that
the Company or any subsidiary owns and, to the Company's knowledge, there are no
valid grounds for the same. Since January 1, 2006, neither the Company nor any
subsidiary has received any communications alleging that the Company or any
subsidiary has violated, infringed or misappropriated any Intellectual Property
Rights of any other person or entity. To the Company's knowledge, neither the
Company nor any subsidiary is violating, infringing or misappropriating the
Intellectual Property Rights of any other person or entity. Since January 1,
2006, to the Company's knowledge, no third party has interfered with, infringed
upon, violated, misappropriated, or otherwise come into conflict with any of the
Company's or any of its Operating Subsidiary's Intellectual Property Rights, or
of any right of any third party (to the extent licensed by or through the
Company or its Operating Subsidiaries), or breached any license or agreement
involving Intellectual Property Rights. Except as set forth on the Schedule of
Exceptions, the Company has not brought any action, suit or proceeding or
asserted any claim against any person or entity related to the foregoing. The
Company is not aware that any of its employees is obligated under any contract
(including licenses, covenants or commitments of any nature) or other agreement,
or subject to any judgment, decree or order of any court or administrative
agency, that would interfere with the use of his or her best efforts to promote
the interests of the Company or that would prevent the employee from assigning
his/her inventions to the Company.
(b) Neither the execution nor delivery of this
Agreement, the Operative Agreements or the Investor Rights Agreement, nor the
carrying on of the Company's business by the employees of the Company, nor the
employment of any employee of the Company, will, to the Company's knowledge,
conflict with or result in a breach of the terms, conditions or provisions of,
or constitute a default under, any contract, covenant or instrument under which
any of such employees is now obligated, including but not limited to, any
employment contract, patent disclosure agreement, confidentiality agreement or
any other contract or agreement relating to the relationship of any such
employee with the Company.
(c) For purposes of this Agreement, "Intellectual
Property Rights" means all (i) patents, patent applications, patent disclosures
and inventions, (ii) trademarks, service marks, trade names, logos and corporate
names and registrations and applications for registration thereof, (iii)
copyrights (registered and unregistered) and copyrightable works and
registrations and applications for registration thereof, (iv) mask works and
registrations and applications for registration thereof, (v) computer software,
data, databases and documentation thereof, (vi) trade secrets and other
confidential information (including, without limitation, ideas, formulas,
compositions, inventions (whether patentable or unpatentable and whether or not
reduced to practice), know-how, manufacturing and production processes and
techniques, research and development information, drawings, specifications,
designs, plans, proposals, technical data, financial and marketing plans and
customer and supplier lists and information) and (vii) other intellectual
property rights. As used in this Agreement, the phrases "to the Company's
knowledge" and "the Company is not aware" or any similar expression or phrase
refers to the actual knowledge of the executive officers of the Company (and
does not include any constructive or imputed notice of any information).
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2.11 Compliance with Other Instruments. The Company is not in
violation of any provision of its certificate of incorporation or Bylaws.
Neither the Company nor any of its subsidiaries is in violation of any
instrument, judgment, order, writ, decree or contract, statute, rule or
regulation to which the Company or any subsidiary is subject and a violation of
which would reasonably be expected to result in a Material Adverse Effect. The
execution, delivery and performance of this Agreement, the Operative Agreements
and the Investor Rights Agreement, and the consummation of the transactions
contemplated hereby and thereby will not result in any such violation, or be in
conflict with or constitute, with or without the passage of time and giving of
notice, either a default under any such provision, instrument, judgment, order,
writ, decree or contract or an event that results in the creation of any lien,
charge or encumbrance upon any assets of the Company or any subsidiary or the
suspension, revocation, impairment, forfeiture or nonrenewal of any material
permit, license, authorization or approval applicable to the Company or any
subsidiary, their business or operations or any of their assets or properties,
other than conflicts, defaults or other results which would not reasonably be
expected to result in a Material Adverse Effect.
2.12 Agreements; Action.
(a) Except for agreements explicitly contemplated
hereby, there are no agreements, written or oral, between the Company and any
subsidiary and any of their officers, directors or affiliates.
(b) There are no agreements, understandings,
instruments, contracts, proposed transactions, judgments, orders, writs or
decrees to which the Company or any subsidiary is a party or by which any of
them is bound that may involve the license of any Intellectual Property Rights
or other proprietary right to or from the Company (other than licenses entered
into in the ordinary course of business).
(c) There are no agreements, commitments,
understandings, instruments, contracts, proposed transactions, judgments,
orders, writs or decrees to which the Company or any subsidiary is a party or by
which they are bound that may involve (i) obligations (contingent or otherwise),
or payments to the Company or any subsidiary, in excess of $250,000, other than
obligations of, or payments to, the Company or any subsidiary arising from
agreements entered into in the ordinary course of business, or (ii) provisions
materially restricting the development, manufacture or distribution of the
Company's products or services (collectively, "Material Contracts"). The
Material Contracts are valid and in full force and effect as to the Company and
any Operating Subsidiary, and, to the Company's knowledge, to the other parties
thereto.
(d) With the exception of the indebtedness of the
Company and its subsidiaries under that certain Credit Agreement of even date
herewith (the "Credit Agreement") by and among the Company, Clearlake Capital
Group, LP, as Administrative Agent and Collateral Agent and the Lenders party
thereto (the "Debt Financing"), neither the Company nor any subsidiary has
outstanding any indebtedness for money borrowed (which, for clarity, the parties
agree does not include accounts payables or other trade payables, capital leases
or accrued expenses) in excess of $250,000 or, in the case of indebtedness for
money borrowed
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individually less than $250,000, in excess of $5,000,000 in the aggregate, other
than liabilities incurred in the ordinary course of business.
(e) For the purposes of subsections (a) and (b) above,
all indebtedness, liabilities, agreements, understandings, instruments,
contracts and proposed transactions involving the same person or entity
(including persons or entities the Company has reason to believe are affiliated
therewith) shall be aggregated for the purpose of meeting the individual minimum
dollar amounts of such subsections.
2.13 Related Party Transactions Since the filing of the last
SEC Report (as defined below), there have been no related party transactions
that would be required to be disclosed in the SEC Reports pursuant to Item
404(a) of the SEC's Regulation S-K that have not been so disclosed in the SEC
Reports.
2.14 SEC Filings; Financial Statements
(a) The Company has timely filed all reports and proxy
statements (including all information incorporated therein, amendments and
supplements thereto) required to be filed by the Company with the Securities and
Exchange Commission (the "SEC") since January 1, 2005 (all reports filed by the
Company under the Securities Exchange Act of 1934, and the applicable rules and
regulations promulgated thereunder since January 1, 2006, including any
amendments thereto, collectively, the "SEC Reports"). As of their respective
dates, the SEC Reports complied in all material respects with the requirements
of the Securities Exchange Act of 1934, and the applicable rules and regulations
promulgated thereunder. As of the time of filing with the SEC, none of the SEC
Reports so filed contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
(b) The audited consolidated financial statements of the
Company (including any related notes thereto) included in the SEC Reports (the
"Year-End Statements") have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes thereto) and fairly present in
all material respects the consolidated financial position of the Company and its
subsidiaries at the respective dates thereof and the consolidated results of
operations, cash flows and changes in stockholders' equity of the Company and
its subsidiaries for the periods indicated. The unaudited consolidated financial
statements of the Company (including any related notes thereto) for all interim
periods included in the SEC Reports (together with the Year-End Statements, the
"Financial Statements") have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes thereto) and fairly present in
all material respects the consolidated financial position of the Company and its
subsidiaries at of the respective dates thereof and the consolidated results of
operations, cash flows and changes in stockholders' equity of the Company and
its subsidiaries for the periods indicated (subject to normal and recurring
period-end adjustments that have not been and are not expected to be material to
the Company and its subsidiaries taken as a whole).
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(c) To the Company's knowledge, except as set forth in
the Financial Statements, the Schedule of Exceptions or the Operative
Agreements, or with respect to the Debt Financing, the Company has no material
liabilities, contingent or otherwise, other than (a) liabilities incurred in the
ordinary course of business subsequent to March 31, 2007 and (b) liabilities or
obligations under contracts and commitments incurred in the ordinary course of
business or otherwise not required under generally accepted accounting
principles to be reflected in the Financial Statements. Except as disclosed in
the Financial Statements, neither the Company nor any subsidiary is a guarantor
or indemnitor of any indebtedness of any other person, firm or corporation,
other than the Company or any subsidiary. The Company maintains a system of
accounting established and administered in accordance with generally accepted
accounting principles.
2.15 Changes. Since March 31, 2007, except as would not
reasonably be expected to have a Material Adverse Effect and except as
contemplated by the transactions associated with the Operative Agreements and
the Debt Financing, there has not been:
(a) any change in the assets, liabilities, financial condition
or operating results of the Company and its subsidiaries, taken as a whole, from
that reflected in the Financial Statements, except changes in the ordinary
course of business;
(b) any material change or amendment to a material contract or
arrangement by which the Company or any of its assets or properties is bound or
subject;
(c) any sale, assignment, pledge, grant of security interest
or transfer of any patents, trademarks, copyrights, trade secrets or other
intangible assets;
(d) any resignation or termination of employment of any key
employee of the Company and its Operating Subsidiaries;
(e) any mortgage, pledge, transfer of a security interest in,
or lien, created by the Company or any subsidiary, with respect to any of its
material properties or assets, except liens for taxes not yet due or payable; or
(f) any agreement or commitment by the Company or any
subsidiary to do any of the things described in this Section 2.15.
2.16 Tax Returns, Payments and Elections. The Company has
timely filed all tax returns (federal, state and local) required to be filed by
it, which tax returns are true and correct in all material respects. The Company
has paid all taxes and other assessments due, if any, except those contested by
it in good faith that are listed in the Schedule of Exceptions. Except as set
forth in the Schedule of Exceptions, none of the Company's federal income tax
returns and none of its state income or franchise tax or sales or use tax
returns has ever been audited by governmental authorities and, as of the date
hereof, to the Company's knowledge, there is no such audit pending or
threatened. Since March 31, 2007, the Company has not incurred any taxes,
assessments or governmental charges other than in the ordinary course of
business and the Company has made adequate provisions on its books of account
for all taxes, assessments and governmental charges with respect to its
business, properties and operations for such period. Except as would not
constitute a Material Adverse Effect, the Company has
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withheld or collected from each payment made to each of its employees, the
amount of all taxes (including, but not limited to, federal income taxes,
Federal Insurance Contribution Act taxes and Federal Unemployment Tax Act taxes)
required to be withheld or collected therefrom, and has paid the same to the
proper tax receiving officers or authorized depositories.
2.17 Permits. The Company and its Operating Subsidiaries have
all franchises, permits, licenses and any similar authority necessary for the
conduct of their respective businesses as now being conducted by them, the lack
of which would result in a Material Adverse Effect. Neither the Company nor any
Operating Subsidiary is in default in any material respect under any of such
franchises, permits, licenses or other similar authority. To the Company's
knowledge, neither the Company nor any Operating Subsidiary has received
notification of proceedings relating to revocation or modification of any such
franchises, permits, licenses or other similar authority.
2.18 Environmental and Safety Laws. To the Company's
knowledge, the Company and its subsidiaries are in compliance in all material
respects with all applicable statutes, laws and regulations relating to the
environment or occupational health and safety and, to the Company's knowledge,
no material expenditures are or will be required in order to comply with any
such existing statute, law or regulation. Neither the Company nor any subsidiary
has received any written communication from a governmental authority with
respect to any material violation of such statutes, laws or regulations.
2.19 Disclosure. Neither this Agreement (including all the
exhibits and schedules hereto) nor any certificates made or delivered in
connection herewith contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements herein or therein not
misleading in light of the circumstances under which they were made.
2.20 Title to Property and Assets. The property and assets
that the Company or any subsidiary owns are owned by the Company or that
subsidiary free and clear of all mortgages, liens, loans and encumbrances,
except (i) for statutory liens for the payment of current taxes that are not yet
delinquent, (ii) for liens, encumbrances and security interests that arise in
the ordinary course of business and that do not secure indebtedness for borrowed
money (which, for clarity, the parties agree does not include accounts payables
or other trade payables, capital leases or accrued expenses) or guarantees
thereof, and (iii) defects in title, none of which, individually or in the
aggregate, materially impair the Company's or the subsidiary's ownership or use
of such property or assets. With respect to the property and assets the Company
or any subsidiary leases, the Company or the subsidiary, as applicable, is in
compliance with such leases except where the failure to be in compliance would
not constitute a Material Adverse Effect and, to its knowledge, holds a valid
leasehold interest free of any liens, claims or encumbrances, subject to clauses
(i), (ii) and (iii).
2.21 Employee Benefit Plans. The Company does not have or
contribute to any "employee benefit plan" as such term is defined in the
Employee Retirement Income Security Act of 1974 ("ERISA") that is subject to
Title IV of ERISA or the funding requirements of Section 412 of the Internal
Revenue Code of 1986, as amended.
-10-
2.22 Labor Agreements and Actions. Neither the Company nor any
subsidiary is bound by or subject to any contract, commitment or arrangement
with any labor union. Except as disclosed in the SEC Reports, neither the
Company nor any subsidiary is a party to or bound by any currently effective
material employment contract, deferred compensation agreement, bonus plan,
incentive plan, profit sharing plan, retirement agreement or other employee
compensation agreement. To the Company's knowledge, the Company and each
subsidiary has complied in all material respects with all applicable state and
federal equal employment opportunity and other laws related to employment.
2.23 Insurance. The Company and its Operating Subsidiaries
have in full force and effect the insurance policies listed on Schedule D
hereto. There are no claims in excess of $100,000 in the aggregate pending
against the Company under any insurance policies currently in effect, or by the
Company against any of its insurance carriers and covering the property,
business or employees of the Company, and all premiums due and payable with
respect to the policies maintained by the Company have been paid.
2.24 Fees. Except as set forth in the Schedule of Exceptions,
the Company has no contract, arrangement or understanding with any broker,
finder or similar agent with respect to the transactions contemplated by this
Agreement.
3. Representations and Warranties of the Investors. Each Investor
severally and not jointly hereby represents, warrants and covenants that:
3.1 Authorization. Such Investor has full power and authority
to enter into this Agreement and the Investor Rights Agreement, and each such
agreement constitutes its valid and legally binding obligation, enforceable in
accordance with its terms, except (a) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors' rights generally, (b) as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies, and (c) to the extent the indemnification provisions
contained in the Investor Rights Agreement may be limited by applicable federal
or state securities laws.
3.2 Purchase Entirely for Own Account. This Agreement is made
with such Investor in reliance upon such Investor's representation to the
Company, which by such Investor's execution of this Agreement such Investor
hereby confirms, that the Series A Preferred Stock to be received by such
Investor and the Conversion Shares issuable upon conversion thereof
(collectively, the "Securities") will be acquired for investment for such
Investor's own account, not as a nominee or agent, and not with a view to the
resale or distribution of any part thereof, and that such Investor has no
present intention of selling, granting any participation in or otherwise
distributing the same. By executing this Agreement, such Investor further
represents that such Investor does not have any contract, undertaking, agreement
or arrangement with any person to sell, transfer or grant participations to such
person or to any third person, with respect to any of the Securities.
3.3 Disclosure of Information. Such Investor believes it has
received all the information it considers necessary or appropriate for deciding
whether to purchase the Series A Preferred Stock. Such Investor further
represents that it has had an opportunity to ask
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questions and receive answers from the Company regarding the terms and
conditions of the offering of the Series A Preferred Stock and the business,
properties, prospects and financial condition of the Company. The foregoing,
however, does not limit or modify the representations and warranties of the
Company in Section 2 of this Agreement or the right of the Investors to rely
thereon.
3.4 Investment Experience. Such Investor is an investor in
public companies with relatively low market capitalizations and acknowledges
that it is able to fend for itself, can bear the economic risk of its
investment, and has such knowledge and experience in financial or business
matters that it is capable of evaluating the merits and risks of the investment
in the Series A Preferred Stock. If other than an individual, such Investor also
represents it has not been organized for the purpose of acquiring the Series A
Preferred Stock.
3.5 Accredited Investor. Such Investor is an "accredited
investor" within the meaning of SEC Rule 501 of Regulation D, as presently in
effect.
3.6 Restricted Securities. Such Investor understands that the
Securities it is purchasing are characterized as "restricted securities" under
the federal securities laws inasmuch as they are being acquired from the Company
in a transaction not involving a public offering and that under such laws and
applicable regulations such Securities may be resold without registration under
the Act only in certain limited circumstances. In the absence of an effective
registration statement covering the Securities or an available exemption from
registration under the Act, the Securities must be held indefinitely. In this
connection, such Investor represents that it is familiar with SEC Rule 144, as
presently in effect, and understands the resale limitations imposed thereby and
by the Act, including without limitation the Rule 144 condition that current
information about the Company be available to the public.
3.7 Further Limitations on Disposition. Without in any way
limiting the representations set forth above, such Investor further agrees not
to make any disposition of all or any portion of the Securities unless and until
the transferee has agreed in writing for the benefit of the Company to be bound
by this Section 3 and the Investor Rights Agreement, provided and to the extent
that this Section 3 and the Investor Rights Agreement are then applicable, and:
(a) There is then in effect a registration statement
under the Act covering such proposed disposition and such disposition is made in
accordance with such registration statement; or
(b) (i) Such Investor shall have notified the Company of
the proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and (ii) if
requested by the Company, such Investor shall have furnished the Company with an
opinion of counsel, reasonably satisfactory to the Company that such disposition
will not require registration of such shares under the Act.
Notwithstanding the provisions of subsections (a) and (b) above, no
such registration statement or opinion of counsel shall be necessary for a
transfer by an Investor to any affiliated venture capital fund or investment
fund, or by an Investor that is a partnership to a
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partner of such partnership or a retired partner of such partnership who retires
after the date hereof, or to the estate of any such partner or retired partner
or the transfer by gift, will or intestate succession of any partner to his or
her spouse or to the siblings, lineal descendants or ancestors of such partner
or his or her spouse, if the transferee agrees in writing to be subject to the
terms hereof to the same extent as if he or she were an original Investor
hereunder.
3.8 Legends. It is understood that the certificates evidencing
the Securities may bear one or all of the following legends:
(a) "THESE SECURITIES HAVE NOT BEEN REGISTERED OR
QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS
OF ANY STATE. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
UNLESS (A) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS, COVERING ANY SUCH TRANSACTION INVOLVING SAID
SECURITIES, (B) THE COMPANY RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY STATING THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION, OR (C) THE
COMPANY OTHERWISE SATISFIES ITSELF THAT SUCH TRANSACTION IS EXEMPT FROM
REGISTRATION."
(b) Any legend required by applicable laws.
3.9 Tax Advisors. Such Investor has reviewed with such
Investor's own tax advisors the federal, state and local tax consequences of
this investment, where applicable, and the transactions contemplated by this
Agreement. Each such Investor is relying solely on such advisors and not on any
statements or representations of the Company or any of its agents and
understands that each such Investor (and not the Company) shall be responsible
for such Investor's own tax liability that may arise as a result of this
investment or the transactions contemplated by this Agreement.
3.10 Legal Advisors. Such Investor acknowledges that such
Investor has had the opportunity to review this Agreement, the exhibits and the
schedules attached hereto and the transactions contemplated by this Agreement,
the Debt Financing and the Asset Purchase Agreement with such Investor's own
legal counsel. Each such Investor is relying solely on such Investor's legal
counsel and, except with respect to the opinion to be delivered to the Investors
pursuant to Section 4.1 hereof, not on any statements or representations of the
Company or any of the Company's agents, including Xxxxxxxxxx Xxxxxxx PC or
Xxxxxxxxxx & Xxxxx LLP, for legal advice with respect to this investment or the
transactions contemplated by this Agreement.
4. Other Documents Delivered/Actions Taken Upon Signing. Prior to or
concurrently with the signing of this Agreement, the following actions shall
occur:
4.1 Opinion of Company Counsel. Each Investor shall receive
from Xxxxxxxxxx Xxxxxxx PC, counsel for the Company, an opinion in the form
attached hereto as Exhibit C.
4.2 Compliance Certificate. The President of the Company shall
deliver to each Investor a certificate in the form attached hereto as Exhibit D.
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4.3 Board of Directors. The Company shall take all necessary
corporate action such that immediately following the Closing, Xxxxxx Xxxxxxx
shall be appointed to the Company's board of directors. The Company shall
execute and deliver an indemnification agreement with such person in form and
substance satisfactory to the Investors.
4.4 Secretary's Certificate. Investors shall receive from the
Company's Secretary a certificate in form and substance reasonably satisfactory
to the Investors having attached thereto (a) the Company's Certificate of
Incorporation as in effect at the time of the signing of this Agreement, (b) the
Certificate of Designations that will be filed with the Secretary of State of
the State of Delaware, (c) the Company's Bylaws as in effect at the time of the
signing of this Agreement and (c) resolutions approved by the Company's board of
directors authorizing the transactions contemplated hereby.
4.5 Qualifications.
All authorizations, approvals or permits, if any, of any governmental authority
or regulatory body of the United States or of any state that are required in
connection with the lawful issuance and sale of the Series A Preferred Stock in
the Closing pursuant to this Agreement shall be obtained and shall be effective,
other than such authorizations, approvals or permits or other filings which may
be timely made after the Closing or which, if not obtained, would not materially
adversely affect the Company upon consummation of the closings contemplated by
this Agreement, the Asset Purchase Agreement and the Debt Financing.
4.6 Debt Financing. All conditions precedent to the
consummation of the Debt Financing, as set forth in the Credit Agreement, shall
be satisfied.
5. Conditions of Investors' and Company's Obligations at the
Closing. The obligations of each Investor and the Company under Section 1.1(c)
of this Agreement are subject to the satisfaction or, where permitted by law,
waiver on or before the Closing of each of the following conditions:
5.1 Filing of Certificate of Designations. The Certificate of
Designations shall have been filed with the Secretary of State of the State of
Delaware.
5.2 No Prohibition. No law, statute, rule, regulation,
executive order, decree, ruling, injunction or other order (whether temporary,
preliminary or permanent) shall have been enacted, entered, promulgated or
enforced by any United States or state court or any governmental entity which
prohibits, restrains or enjoins the consummation of the transactions
contemplated hereunder.
6. Covenants.
6.1 Listing. After the Closing, the Company will make all
required filings so that the Conversion Shares are authorized for quotation on
Nasdaq, subject to official notice of issuance.
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6.2 Further Assurances. Subject to the terms and conditions of
this Agreement, each party will use its reasonable commercial efforts to take,
or cause to be taken, all actions and to do, or cause to be done, all things
reasonably necessary, proper or advisable under applicable laws and regulations
to consummate the transactions contemplated by this Agreement.
6.3 Public Statements. Each of the Company and the Investors
agrees that no public release or announcement concerning the transactions
contemplated hereby shall be issued without the prior written consent of the
Company or the Investors, except as such release or announcement may be required
by law or the rules or regulations of any applicable securities exchange or
regulatory or governmental body to which the relevant party is subject, wherever
situated, in which case the party required to make the release or announcement
shall use its reasonable commercial efforts to provide the Company or the
Investors, as the case may be, reasonable time to comment on such release or
announcement in advance of such issuance, it being understood that the final
form and content of any such release or announcement, to the extent so required,
shall be at the final discretion of the disclosing party.
7. Termination, Expenses
7.1 Termination. This Agreement may be terminated:
(a) by mutual written consent of the Investors and the
Company;
(b) by the Investors or the Company if any court of
competent jurisdiction or other governmental entity shall have issued a final
order, decree or ruling or taken any other final action restraining, enjoining
or otherwise prohibiting the transactions contemplated hereunder and such order,
decree, ruling or other action is or shall have become final and nonappealable;
or
(c) by either the Investors or the Company if the
Closing shall not have occurred on or before December 31, 2007; provided,
however, that the right to terminate this Agreement pursuant to this Section
7.1(c) shall not be available to the party seeking to terminate unless the party
seeking to terminate pursuant to this Section 7.1(c) shall not have been the
cause of the failure of the Closing to occur on or before such date and such
action or failure to perform constitutes a breach of this Agreement.
7.2 Effect of Termination. In the event of the termination of
this Agreement pursuant to Section 7.1, this Agreement shall forthwith become
void and there shall be no liability or obligation on the part of any party
hereto, except as provided in this Section 7.2, and Section 8, which shall
survive such termination; provided, however, that nothing herein shall relieve
any party from liability for any breach of this Agreement.
8. Miscellaneous.
8.1 Survival. The warranties, representations and covenants of
the Company and Investors contained in or made pursuant to this Agreement shall
survive the execution and delivery of this Agreement and the Closing and shall
in no way be affected by any investigation of the subject matter thereof made by
or on behalf of the Investors or the Company.
-15-
8.2 Successors and Assigns. Except as otherwise provided
herein, the terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors and assigns of the parties
(including transferees of any securities). Nothing in this Agreement, express or
implied, is intended to confer upon any party, other than the parties hereto or
their respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
8.3 Governing Law. This Agreement shall be governed by and
construed under the laws of the State of New York without regard to principles
of conflicts of law.
8.4 Titles and Subtitles. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
8.5 Notices. All notices required or permitted hereunder shall
be in writing and shall be deemed effectively given: (a) upon personal delivery
to the party to be notified; (b) when sent by confirmed telex or facsimile or by
electronic mail if sent during normal business hours of the recipient, if not,
then on the next business day; (c) five days after having been sent by
registered or certified mail, return receipt requested, postage prepaid; or (d)
one day after deposit with a nationally recognized overnight courier, specifying
next day delivery, with written verification of receipt. All communications
shall be sent to the address as set forth on the signature page hereof or at
such other address as such party may designate by ten days' advance written
notice to the other parties hereto.
8.6 Finder's Fee. Each party represents that, except as set
forth in the Schedule of Exceptions or in this Section 8.6, it neither is nor
will be obligated for any finder's fee or commission in connection with this
transaction. Each Investor agrees to indemnify and to hold harmless the Company
from any liability for any commission or compensation in the nature of a
finder's fee (and the costs and expenses of defending against such liability or
asserted liability) for which such Investor or any of its officers, partners,
employees or representatives is responsible. The Company agrees to indemnify and
hold harmless each Investor from any liability for any commission or
compensation in the nature of a finders' fee (and the costs and expenses of
defending against such liability or asserted liability) for which the Company or
any of its officers, employees or representatives is responsible. 8.7 Expenses;
Attorneys' Fees. If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the Certificate of Designations, or the
Investor Rights Agreement, the prevailing party shall be entitled to reasonable
attorneys' fees, costs and necessary disbursements in addition to any other
relief to which such party may be entitled.
8.8 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), (i) prior to the Closing, only with the written consent of the
Company and Investors acquiring in the aggregate more than half the shares of
Series A Preferred Stock to be sold pursuant hereto, and (ii) after the Closing,
only
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with the written consent of the Company and the holders of a majority of the
Common Stock issuable or issued upon conversion of the Series A Preferred Stock
sold pursuant to this Agreement. Any amendment or waiver effected in accordance
with this Section 8.8 shall be binding upon each holder of any securities
purchased under this Agreement (including securities into which such securities
are convertible) at the time outstanding, each future holder of all such Series
A Preferred Stock and the Company. The failure of any party to assert any rights
or remedies shall not constitute a waiver of such rights or remedies.
8.9 Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
8.10 Aggregation of Stock. All shares of the Series A
Preferred Stock held or acquired by affiliated entities or persons shall be
aggregated together for the purpose of determining the availability of any
rights under this Agreement.
8.11 Entire Agreement. This Agreement and the documents,
schedules and exhibits referred to herein constitute the entire agreement among
the parties and no party shall be liable or bound to any other party in any
manner by any warranties, representations or covenants except as specifically
set forth herein or therein.
8.12 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first written above.
COMPANY:
GOAMERICA, INC.
By: /s/ Xxxxxx X. Xxxx
----------------------------------------------
Name: Xxxxxx X. Xxxx
Title: Chief Executive Officer
Address: 000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn.: Chief Executive Officer
With a copy to:
Xxxxxxxxxx Xxxxxxx PC
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn.: Xxxxx X. Xxxxxxxxx, Esq.
Fax No. (000) 000-0000
[SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT]
INVESTOR:
CCP A, L.P.
By: CLEARLAKE CAPITAL PARTNERS, LLC
Its General Partner
By: CCG Operations, LLC
Its Managing Member
By: /s/ Xxxxxx Xxxxxxx
----------------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Manager
Address: 000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Fax No. (000) 000-0000
With a copy to:
Milbank, Tweed, Xxxxxx & XxXxxx LLP
000 X. Xxxxxxxx Xx., 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attn.: Xxxxxxxx X. Xxxxxxxxx, Esq.
Fax No. (000) 000-0000
[SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT]
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SCHEDULE A
Schedule of Investors
Shares of
Investor Series A Preferred Stock Purchase Price
-------------------------------- ------------------------ --------------
CCP A, L.P. 290,135 $1,500,000
------- ----------
Total 290,135 $1,500,000
Schedule A-1
