Exhibit 10.6
Execution Version
INVESTOR RIGHTS AGREEMENT
GOAMERICA, INC.
Dated as of August 1, 2007
TABLE OF CONTENTS
Page
----
1. DEMAND REGISTRATIONS......................................................1
1.1. Requests for Registration.......................................1
1.2. Demand Notice...................................................2
1.3. Demand Registration Expenses....................................2
1.4. Short-Form Registrations........................................2
1.5. Priority on Demand Registrations................................3
1.6. Restrictions on Demand Registrations............................3
1.7. Selection of Underwriters.......................................3
1.8. Other Registration Rights.......................................3
2. PIGGYBACK REGISTRATIONS...................................................4
2.1. Right to Piggyback..............................................4
2.2. Piggyback Expenses..............................................4
2.3. Priority on Primary Registrations...............................4
2.4. Priority on Secondary Registrations.............................4
3. REGISTRATION GENERALLY....................................................5
3.1. Registration Procedures.........................................5
3.2. Registration Expenses...........................................9
3.3. Participation in Underwritten Offerings........................10
3.4. Holdback Agreements............................................10
3.4.1. Securityholder Holdback..............................10
3.4.2. Company Holdback.....................................11
3.5. Current Public Information.....................................11
4. REGISTRATION INDEMNIFICATION.............................................12
4.1. Indemnification by the Company.................................12
4.2. Indemnification by Holders of Registrable Securities...........12
4.3. Procedure......................................................13
4.4. Entry of Judgment; Settlement..................................13
4.5. Contribution...................................................13
4.6. Other Rights...................................................14
5. TRANSFER RESTRICTiONS....................................................14
5.1. General Transfer Restrictions..................................14
5.2. Restrictions on Transfer.......................................15
5.2.1. Private Transfers....................................15
5.2.2. Public Transfers.....................................15
6. PREEMPTIVE RIGHTS........................................................15
6.1. Offering.......................................................15
6.2. Expiration of Subscription Period..............................16
6.3. New Securities.................................................16
i
7. DEFINITIONS..............................................................17
8. MISCELLANEOUS............................................................20
8.1. No Inconsistent Agreements.....................................20
8.2. Remedies.......................................................20
8.3. Amendment and Waiver...........................................20
8.4. Successors and Assigns; Transferees............................20
8.5. Severability...................................................21
8.6. Counterparts...................................................21
8.7. Descriptive Headings...........................................21
8.8. Notices........................................................21
8.9. Delivery by Facsimile..........................................22
8.10. Governing Law..................................................22
8.11. Jurisdiction. Submission to Jurisdiction; Waivers.............22
8.12. Waiver of Jury Trial...........................................22
8.13. Termination....................................................22
ii
INVESTOR RIGHTS AGREEMENT
This Investor Rights Agreement (this "Agreement") is made as of August 1,
2007 (the "Effective Date") by and among:
(i) GoAmerica, Inc., a Delaware corporation (together with its
successors and permitted assigns, the "Company");
(ii) Each of the shareholders of the Company listed on Schedule A to this
Agreement (each a "Sponsor" and, collectively the "Sponsors"); and
(iii) such other Persons, if any, that from time to time become parties
hereto pursuant to Section 8.4 hereof (collectively, together with
the Sponsors, the "Shareholders").
RECITALS
WHEREAS, the Company and the Sponsors are parties to the Stock Purchase
Agreement of even date herewith (the "Initial Stock Purchase Agreement") in
which the Company has agreed to sell to the Sponsors 290,135 shares of Series A
Preferred Stock of the Company, par value $.01 per share.
WHEREAS, the Company and the Sponsors are parties to the Stock Purchase
Agreement of even date herewith (the "Acquisition Stock Purchase Agreement" and,
collectively with the Initial Stock Purchase Agreement, the "Clearlake Stock
Purchase Agreements") in which the Company has agreed to sell to the Sponsors,
subject to the happening of the conditions specified therein, up to 6,479,691
additional shares of Series A Preferred Stock of the Company.
WHEREAS, the parties hereto desire for the Company to provide the
registration rights set out in this Agreement. Unless otherwise noted in this
Agreement, capitalized terms used herein shall have the meanings set forth in
Section 7.
AGREEMENT
NOW, THEREFORE, the parties to this Agreement hereby agree as follows:
1. DEMAND REGISTRATIONS.
1.1. Requests for Registration. At any time a Sponsor may initiate the
registration of Common Stock to be sold in a Public Offering (a "Demand
Registration"). Subject to the other provisions of this Section 1, a Sponsor may
initiate (on behalf of itself and any of its Affiliate) three (3) registrations
of all or part of their Registrable Securities on Form S-1 or any similar or
successor long-form registration ("Long-Form Registrations"), and, if the
Company is eligible to utilize a registration statement on Form S-3 for resales
by selling stockholders, an unlimited (but no more than two such registrations
in any twelve month period) number of registrations of all or part of their
Registrable Securities on Form S-3 or any similar or successor short-form
registration ("Short-Form Registrations"); provided in each case that the
aggregate gross offering price of the Registrable Securities requested to be
registered in any Long Form Registration
1
pursuant to this Section must equal the greater of (a) $5,000,000 or (b) all of
the Common Stock and Conversion Shares then held by such Sponsor and its
Affiliates); and provided, further, that the Company shall have no liability to
any Shareholder with respect to any conditions that the Securities and Exchange
Commission may impose with respect to any such registration, including any
conditions that the Securities and Exchange Commission may impose upon the
utilization of Rule 415 in connection with any such registration.
1.2. Demand Notice. All requests for Demand Registrations shall be made by
giving written notice to the Company (a "Demand Notice"). Each Demand Notice
shall specify the approximate number of Registrable Securities requested to be
registered. Within ten (10) days after receipt of any such Demand Notice, the
Company will give written notice of such requested registration to all other
holders of Registrable Securities and, subject to Section 1.5, will use its
commercially reasonable efforts to include in such registration (and in all
related registrations and qualifications under blue sky laws or in compliance
with other registration requirements and in any related underwriting) all
Registrable Securities with respect to which the Company has received written
requests for inclusion therein within 15 days after the delivery of the
Company's notice.
1.3. Demand Registration Expenses. The Company will pay all Registration
Expenses in connection with any registration initiated as a Demand Registration,
whether or not it has become effective.
1.4. Short-Form Registrations. Subject to the qualifications set forth
herein and subject to any limitations that the Securities and Exchange
Commission may impose, (i) Demand Registrations will be Short-Form Registrations
whenever the Company is permitted to use any applicable short-form (unless the
managing underwriter(s) of such offering requests the Company to use a Long-Form
Registration in order to sell all of the Registrable Securities requested to be
sold) and (ii) the Sponsors may, in connection with any Demand Registration
requested by such holders that is a Short-Form Registration, require the Company
to use its commercially reasonable efforts to file such Short-Form Registration
with the Securities and Exchange Commission in accordance with and pursuant to
Rule 415 under the Securities Act (or any successor rule then in effect)
including, if the Company is then eligible, as an automatic shelf registration
statement (any such Short-Form Registration, a "Shelf Registration").
Notwithstanding anything in this Agreement to the contrary, if the Securities
and Exchange Commission refuses to declare a registration statement filed
pursuant to this Agreement effective as a valid secondary offering under Rule
415 due to the number of Registrable Securities included in such registration
statement relative to the number of shares of Common Stock outstanding or the
number of outstanding shares of Common Stock held by non-affiliates or for any
other reason, then, without any liability under this Agreement or any further
obligation to register such excess Registrable Securities, the Company shall be
permitted to reduce the number of Registrable Securities included in such
registration statement to an amount that does not exceed an amount that the
Securities and Exchange Commission allows for the offering thereunder to qualify
as a valid secondary offering under Rule 415. The Company shall not be liable
for damages under this Agreement as to any Registrable Securities which are not
permitted by the Securities and Exchange Commission to be included in a
registration statement due to Securities and Exchange Commission guidance
relating to Rule 415.
2
1.5. Priority on Demand Registrations. The Company shall not include in
any Demand Registration any securities which are not Registrable Securities
without the prior receipt of Majority Sponsor Approval. If a Demand Registration
is an underwritten offering and the managing underwriter(s) advises the Company
that in its opinion the number of Registrable Securities and, if permitted
hereunder, other securities, requested to be included in such offering exceeds
the number of Registrable Securities and other securities, if any, which can be
sold therein without adversely affecting the marketability of the offering, then
the Company shall include in such registration, (a) prior to the inclusion of
any securities that are not Registrable Securities, the number of Registrable
Securities requested to be included in such offering that, in the opinion of
such managing underwriter, can be sold without adversely affecting the
marketability of the offering, pro rata (based on the number of shares requested
to be registered) among the respective holders thereof, provided that if the
number of securities that are Registrable Securities that are included in such
offering are less than 75% of the number of securities that are Registrable
Securities requested to be included in such offering, such offering shall not
count for purposes of calculating the number of Long-Form Registrations
initiated by a Majority Sponsor, and (b) only then securities that are not
Registrable Securities, if the managing underwriter(s) has advised that such
securities may be included.
1.6. Restrictions on Demand Registrations. The Company will not be
obligated to effect any Demand Registration within 90 days after the closing of
a Public Offering (other than on Form S-4 or Form S-8 or any successor or
similar form, but including the closing of an underwritten distribution pursuant
to a Shelf Registration), except that if such Public Offering is an underwritten
offering and the managing underwriter of such Public Offering determines that a
longer period, not to exceed 180 days, is reasonably necessary in its opinion,
then such restricted period shall continue for the period designated by the
managing underwriter, provided that such period shall not extend beyond 180 days
after the closing of such Public Offering. The Company may postpone for up to 45
days (from the date of the request) the filing or the effectiveness of a
registration statement for a Demand Registration if and so long as the Company
determines that such Demand Registration would reasonably be expected to have an
adverse effect on any proposal or plan by the Company or any of the Subsidiaries
to engage in any acquisition or disposition of assets (other than in the
ordinary course of business) or any merger, consolidation, tender offer,
registration or issuance of securities, financing or other material transaction.
The Company may not postpone a Demand Registration more than two (2) times in
any twelve-month period.
1.7. Selection of Underwriters. The Sponsor(s) selling a majority of the
Registrable Securities to be sold by all Sponsors in a Demand Registration will
have the right to select the underwriter or underwriters to administer the
offering, provided that such selection will be subject to the approval of the
board of directors of the Company (the "Board"), which approval will not be
unreasonably withheld.
1.8. Other Registration Rights. The Company represents and warrants that
it is not a party to, or otherwise subject to, any other agreement granting
registration rights to any other Person with respect to any equity securities of
the Company, other than this Agreement. Except as provided in this Agreement,
the Company shall not grant to any Person the right to request the Company to
register any equity securities of the Company, or any securities convertible or
exchangeable into or exercisable for such securities, without Majority Sponsor
Approval
3
approving the grant of registration rights for such securities; provided that
without such approval, subject to Section 6, (a) the Company may grant rights to
other Persons to participate in Demand Registrations and Piggyback Registrations
so long as such rights are subordinate to the rights of the holders of
Registrable Securities with respect to such Demand Registrations and Piggyback
Registrations; and (b) the Company may grant rights to other Persons to request
registrations so long as the holders of Registrable Securities are entitled to
participate in any such registrations with such Persons pro rata on the basis of
the number of Common Stock owned by each such holder.
2. PIGGYBACK REGISTRATIONS.
2.1. Right to Piggyback. Whenever the Company proposes to register any of
its equity securities under the Securities Act (other than (a) pursuant to a
Demand Registration, (b) in connection with registration on Form S-4 or Form S-8
or any successor or similar form or (c) in connection with the registration of
shares on Form S-3 with respect to a dividend reinvestment plan) and the
registration form to be used may be used for the registration of Registrable
Securities (a "Piggyback Registration"), the Company will give prompt written
notice to all holders of Registrable Securities of its intention to effect such
a registration and, subject to Sections 2.3 and 2.4 below, will include in such
registration all Registrable Securities with respect to which the Company has
received written requests for inclusion therein within 15 days after the
delivery of the Company's notice. Each such Company notice shall specify the
approximate number of Company equity securities to be registered and the
anticipated per share price range for such offering.
2.2. Piggyback Expenses. The Company will pay all Registration Expenses in
connection with all Piggyback Registrations, whether or not any such
registration becomes effective.
2.3. Priority on Primary Registrations. If a Piggyback Registration is an
underwritten primary registration on behalf of the Company and the managing
underwriter(s) advises the Company that in its opinion the number of securities
requested to be included in such registration exceeds the number which can be
sold in such offering without adversely affecting the marketability of such
offering, the Company will include in such registration: (a) first, the
securities the Company proposes to sell, (b) second, the Registrable Securities
requested to be included in such registration, pro rata (based on the number of
shares requested to be registered) among the holders of such Registrable
Securities, and (c) third, the other securities requested to be included in the
such registration in the manner determined by the Company and such shareholders.
2.4. Priority on Secondary Registrations. If a Piggyback Registration is
an underwritten secondary registration on behalf of holders of Company
securities (other than the holders of Registrable Securities), and the managing
underwriter(s) advises the Company that in its opinion the number of securities
requested to be included in such registration exceeds the number which can be
sold in such offering without adversely affecting the marketability of the
offering, the Company will include in such registration: (a) first, the
securities requested to be included therein by the holders requesting
registration, (b) second, securities requested by the Company to be included in
such registration, and (c) third, Registrable Securities and other securities
4
requested to be included in such registration, pro rata among the holders of
such Registrable Securities and the holders of such other securities permitted
to have their securities included in such registration on the basis of the
number of shares owned by each such holder.
3. REGISTRATION GENERALLY.
3.1. Registration Procedures. Whenever the holders of Registrable
Securities have requested that any Registrable Securities be registered pursuant
to this Agreement, the Company will use its best efforts to effect the
registration and the sale of such Registrable Securities in accordance with the
intended method of disposition thereof and pursuant thereto the Company will as
expeditiously as reasonably practicable:
(a) prepare and (within 60 days after the end of the period
within which requests for inclusion in such registration may be
given to the Company) file with the Securities and Exchange
Commission a registration statement with respect to such Registrable
Securities and thereafter use commercially reasonable efforts to
cause such registration statement to become effective (provided that
before filing a registration statement or prospectus or any
amendments or supplements thereto, the Company will furnish to
counsel selected by the Sponsors owning the Registrable Securities
to be included in any Demand Registration copies of all such
documents proposed to be filed, which documents will be subject to
review by such counsel);
(b) prepare and file with the Securities and Exchange
Commission such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be
necessary (i) to keep such registration statement effective for a
period (A) of not less than 180 days (subject to extension pursuant
to Section 3.3(b)) or, if such registration statement relates to an
underwritten offering, such longer period as in the opinion of
counsel for the underwriters a prospectus is required by law to be
delivered in connection with sales of Registrable Securities by an
underwriter or dealer, or (B) in the case of a Shelf Registration,
ending on the earliest of (I) the date on which all Registrable
Securities have been sold pursuant to the Shelf Registration or have
otherwise ceased to be Registrable Securities, (II) the second
anniversary of the effective date of such Shelf Registration, (III)
such other date determined by the Majority Sponsors and (IV) when
all such Registrable Securities are freely saleable under Rule
144(k) under the Securities Act, and (ii) to comply with the
provisions of the Securities Act with respect to the disposition of
all securities covered by such registration statement until such
time as all of such securities have been disposed of in accordance
with the intended methods of disposition by the seller or sellers
thereof set forth in such registration statement;
(c) cause (i) any issuer free writing prospectus to comply
with the information and legending requirements under paragraph (c)
of Rule 433 and to be accompanied or preceded by a statutory
prospectus to the extent required under Rule 433, and (ii) any free
writing prospectus or issuer information contained in a free writing
prospectus required to be filed by the Company with
5
the Securities and Exchange Commission under paragraph (d) under
Rule 433 to be so filed in accordance with such requirements;
(d) furnish to each seller of Registrable Securities such
number of copies of such registration statement, each amendment and
supplement thereto, in each case, to the extent not available on
▇▇▇▇▇, the prospectus included in such registration statement
(including each preliminary prospectus), each free writing
prospectus used in connection with such registration, and such other
documents as such seller may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by
such seller, but in all cases only if such documents are not
available on ▇▇▇▇▇;
(e) use its best efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws
of such States as any seller reasonably requests and do any and all
other acts and things which may be reasonably necessary or advisable
to enable such seller to consummate the disposition in such
jurisdictions of the Registrable Securities owned by such seller
(provided that the Company will not be required to (i) qualify
generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subsection, (ii)
subject itself to taxation in respect of doing business in any such
jurisdiction or (iii) consent to general service of process in any
such jurisdiction);
(f) promptly notify each seller of such Registrable
Securities, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, upon discovery
that, or upon the discovery of the happening of any event as a
result of which, the prospectus included in such registration
statement contains an untrue statement of a material fact or omits
any fact necessary to make the statements therein not misleading in
the light of the circumstances under which they were made, and, at
the request of any such seller, the Company will prepare and furnish
to such seller a reasonable number of copies of a supplement or
amendment to such prospectus so that, as thereafter delivered to the
prospective purchasers of such Registrable Securities, such
prospectus will not contain an untrue statement of a material fact
or omit to state any fact necessary to make the statements therein
not misleading in the light of the circumstances under which they
were made;
(g) use best efforts to cause all such Registrable Securities
to be listed on each securities exchange or market system on which
similar securities issued by the Company are then listed and, if not
so listed, to be listed on the NASD automated quotation system and,
if listed on the NASD automated quotation system, use commercially
reasonable efforts to secure designation of all such Registrable
Securities covered by such registration statement as a "NMS
Security" within the meaning of Rule 600(b)(46) of Regulation NMS of
the Securities and Exchange Commission or, failing that, to secure
NASDAQ authorization for such Registrable Securities;
6
(h) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such registration
statement;
(i) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the
Sponsors owning a majority of the Registrable Securities to be included in
the registration or the underwriters, if any, reasonably request in order
to expedite or facilitate the disposition of such Registrable Securities
(which might include effecting a share split or a combination of shares);
(j) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to
such registration statement and any attorney, accountant or other agent
retained by any such seller or underwriter, all financial and other
records, pertinent corporate documents and properties of the Company, and
cause the Company's officers, directors, employees and independent
accountants to supply all information reasonably requested by any such
seller, underwriter, attorney, accountant or agent in connection with such
registration statement, and to cooperate and participate as reasonably
requested by any such seller in road show presentations, in the
preparation of the registration statement, each amendment and supplement
thereto, the prospectus included therein, and other activities as such
seller may reasonably request in order to facilitate the disposition of
the Registrable Securities owned by such seller;
(k) otherwise use commercially reasonable efforts to comply with all
applicable rules and regulations of the Securities and Exchange
Commission, and make available to its security holders, as soon as
reasonably practicable, but not later than 18 months after the effective
date of the registration statement, an earnings statement covering the
period of at least twelve months beginning with the first day of the
Company's first full calendar quarter after the effective date of the
registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;
(l) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the
qualification of any Securities included in such registration statement
for sale in any jurisdiction, the Company will use commercially reasonable
efforts promptly to obtain the withdrawal of such order;
(m) obtain one or more comfort letters, dated the effective date of
such registration statement (and, if such registration includes an
underwritten public offering, dated the date of the closing under the
underwriting agreement), signed by the Company's independent registered
public accounting firm in the then-current customary form and covering
such matters of the type customarily
7
covered from time to time by comfort letters as the holders of a
majority of the Registrable Securities being sold reasonably
request;
(n) provide a legal opinion of the Company's outside counsel,
dated the effective date of such registration statement (and, if
such registration includes an underwritten public offering, dated
the date of the closing under the underwriting agreement), with
respect to the registration statement, each amendment and supplement
thereto, the prospectus included therein (including the preliminary
prospectus) and such other documents relating thereto in the
then-current customary form and covering such matters of the type
customarily covered from time to time by legal opinions of such
nature (in a form reasonably acceptable to the holders of a majority
of the Registrable Securities included in the registration);
(o) cooperate with the sellers of Registrable Securities
covered by the registration statement and the managing underwriter
or agent, if any, to facilitate the timely preparation and delivery
of certificates (not bearing any restrictive legends) representing
securities to be sold under the registration statement, and enable
such securities to be in such denominations and registered in such
names as the managing underwriter or agent, if any, or such holders
may request;
(p) notify counsel for the sellers of Registrable Securities
included in such registration statement and the managing underwriter
or agent, immediately, and confirm the notice in writing (i) when
the registration statement, or any post-effective amendment to the
registration statement, shall have become effective, or any
supplement to the prospectus or any amendment prospectus shall have
been filed, (ii) of the receipt of any comments from the Securities
and Exchange Commission, (iii) of any request of the Securities and
Exchange Commission to amend the registration statement or amend or
supplement the prospectus or for additional information, and (iv) of
the issuance by the Securities and Exchange Commission of any stop
order suspending the effectiveness of the registration statement or
of any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the
registration statement for offering or sale in any jurisdiction, or
of the institution or threatening of any proceedings for any of such
purposes;
(q) use its reasonable effort to prevent the issuance of any
stop order suspending the effectiveness of the registration
statement or of any order preventing or suspending the use of any
preliminary prospectus and, if any such order is issued, to obtain
the withdrawal of any such order at the earliest possible moment;
(r) if requested by the managing underwriter or agent or any
holder of Registrable Securities covered by the registration
statement, promptly incorporate in a prospectus supplement or
post-effective amendment such information as the managing
underwriter or agent or such holder reasonably
8
requests to be included therein, including, without limitation, with
respect to the number of Registrable Securities being sold by such
holder to such underwriter or agent, the purchase price being paid
therefor by such underwriter or agent and with respect to any other
terms of the underwritten offering of the Registrable Securities to
be sold in such offering; and make all required filings of such
prospectus supplement or post-effective amendment as soon as
practicable after being notified of the matters incorporated in such
prospectus supplement or post-effective amendment;
(s) cooperate with each seller of Registrable Securities and
each underwriter or agent participating in the disposition of such
Registrable Securities and their respective counsel in connection
with any filings required to be made with the National Association
of Securities Dealers, Inc.; and
(t) cause its appropriate officers to attend and participate
in presentations to and meetings with prospective purchasers of the
Registrable Securities, or a "roadshow", as reasonably requested by
the underwriters, if any.
The Company may require each seller of Registrable Securities as to which any
registration is being effected to furnish the Company such information relating
to the sale or registration of such Securities regarding such seller and the
distribution of such securities as the Company may from time to time reasonably
request in writing, prior to including such seller's Registrable Securities in
such registration.
3.2. Registration Expenses.
(a) All expenses incident to the Company's performance of or
compliance with this Agreement, including, without limitation, all
registration, qualification and filing fees, fees and expenses of
compliance with securities or blue sky laws, printing expenses,
messenger and delivery expenses, and fees and disbursements of
counsel for the Company and all independent certified public
accountants, underwriters (excluding discounts and commissions) and
other Persons retained by the Company (all such expenses being
herein called "Registration Expenses"), will be paid by the Company
in respect of each Demand Registration and each Piggyback
Registration, whether or not it has become effective, including that
the Company will pay its internal expenses (including, without
limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any liability
insurance and the expenses and fees for listing the securities to be
registered on each securities exchange on which similar securities
issued by the Company are then listed or on the NASD automated
quotation system or any other quotation system.
(b) In connection with each Demand Registration and each
Piggyback Registration, whether or not it has become effective, the
Company will pay, and reimburse the holders of Registrable
Securities covered by such registration for the payment of, the
reasonable fees and disbursements of one
9
counsel chosen by the holders of a majority of the Registrable
Securities included in such registration, such amount not to exceed
$25,000 for each registration, and such expenses shall be considered
Registration Expenses hereunder.
3.3. Participation in Underwritten Offerings.
(a) No Person may participate in any registration hereunder
which is underwritten unless such Person (i) agrees to sell such
Person's securities on the basis provided in any underwriting
arrangements approved by the Person or Persons entitled hereunder to
approve such arrangements (including, without limitation, pursuant
to the terms of any over-allotment or "green shoe" option requested
by the managing underwriter(s), provided that no holder of
Registrable Securities will be required to sell more than the number
of Registrable Securities that such holder has requested the Company
to include in any registration) and (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms
of such underwriting arrangements.
(b) Each Person that is participating in any registration
hereunder agrees that, upon receipt of any notice from the Company
of the happening of any event of the kind described in Section
3.1(f) above, such Person will forthwith discontinue the disposition
of its Registrable Securities pursuant to the registration statement
until such Person's receipt of the copies of a supplemented or
amended prospectus as contemplated by such Section 3.1(f). In the
event the Company shall give any such notice, the applicable time
period mentioned in Section 3.1(b) during which a Registration
Statement is to remain effective shall be extended by the number of
days during the period from and including the date of the giving of
such notice pursuant to this paragraph to and including the date
when each seller of a Registrable Security covered by such
registration statement shall have received the copies of the
supplemented or amended prospectus contemplated by Section 3.1(f).
3.4. Holdback Agreements.
3.4.1. Securityholder Holdback. To the extent not inconsistent with
applicable law, each holder of Registrable Securities shall not offer,
sell, contract to sell, pledge, grant any option to purchase, make any
short sale or otherwise dispose of any Common Stock, or any options or
warrants to purchase any Common Stock, or any securities convertible into,
exchangeable for or that represent the right to receive Common Stock,
whether now owned or hereinafter acquired, owned directly by the holder
(including holding as a custodian) or with respect to which the holder has
beneficial ownership within the rules and regulations of the Securities
and Exchange Commission, during (a) with respect to any other underwritten
Demand Registration or any underwritten Piggyback Registration in which
Registrable Securities are included, the seven days prior to and the
90-day period (or such longer period not to exceed 180 days if reasonably
necessary in the opinion of such underwriter) beginning on the effective
date of such registration, and (b) upon notice from the Company of the
commencement of an
10
underwritten distribution in connection with any Shelf Registration, the
seven days prior to and the 90-day period (or such longer period not to
exceed 180 days if reasonably necessary in the opinion of such
underwriter) beginning on the date of commencement of such distribution,
in each case except as part of such underwritten registration, and in each
case unless the underwriters managing the registered public offering
otherwise agree (in each case, such period, the "Lock-Up Period");
provided, however, if (i) during the period that begins on the date that
is 15 calendar days plus three Business Days before the last day of the
Lock-Up Period and ends on the last day of the Lock-Up Period, the Company
issues an earnings release or material news or a material event relating
to the Company occurs, or (ii) prior to the expiration of the Lock-Up
Period, the Company announces that it will release earnings results during
the 16 day period beginning on the last day of the Lock-Up Period, the
restrictions imposed shall continue to apply until the expiration of the
date that is 15 calendar days plus three Business Days after the date on
which the issuance of the earnings release or the material news or
material event occurs. Any waiver by the underwriters of the foregoing
restrictions on transfers by the holders shall be granted to all holders
on equal terms.
3.4.2. Company Holdback. The Company shall not offer, sell, contract
to sell or otherwise dispose of any securities of the Company that are
substantially similar to the Common Stock, including but not limited to
any securities that are convertible into or exchangeable for, or that
represent the right to receive, Common Stock or any such substantially
similar securities, during (a) with respect to any other underwritten
Demand Registration or any underwritten Piggyback Registration in which
Registrable Securities are included, the seven days prior to and the
90-day period beginning on the effective date of such registration, and
(b) upon notice from any holder(s) of Registrable Securities subject to a
Shelf Registration that such holder(s) intend to effect an underwritten
distribution of Registrable Securities pursuant to such Shelf Registration
(upon receipt of which, the Company will promptly notify all other holders
of Registrable Securities of the date of the commencement of such
distribution), the seven days prior to and the 90-day period beginning on
the date of the commencement of such distribution, in each case except as
part of such underwritten registration or pursuant to registrations on
Form S-4 or Form S-8, and in each case unless the underwriters managing
the registered public offering otherwise agree.
3.5. Current Public Information. At all times after the Company has filed
a registration statement with the Securities and Exchange Commission pursuant to
the requirements of either the Securities Act or the Securities Exchange Act,
the Company will use its commercially reasonable efforts to timely file all
reports required to be filed by it under the Securities Act and the Securities
Exchange Act and the rules and regulations adopted by the Securities and
Exchange Commission thereunder, and will take such further action as any holder
or holders of Registrable Securities may reasonably request, all to the extent
required to enable such holders to sell Registrable Securities pursuant to Rule
144 adopted by the Securities and Exchange Commission under the Securities Act
(as such rule may be amended from time to time) or any similar rule or
regulation hereafter adopted by the Securities and Exchange Commission.
11
4. REGISTRATION INDEMNIFICATION.
4.1. Indemnification by the Company. The Company agrees to indemnify and
hold harmless, to the fullest extent permitted by law, each holder of
Registrable Securities and, as applicable, its officers, directors, trustees,
employees, shareholders, holders of beneficial interests, members, and general
and limited partners (collectively, such holder's "Indemnitees") and each Person
who controls such holder (within the meaning of the Securities Act) against any
and all losses, claims, damages, liabilities, joint or several, to which such
holder or any such Indemnitee may become subject under the Securities Act,
equivalent foreign securities laws or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon (a) any untrue or
alleged untrue statement of material fact contained in any registration
statement, prospectus, preliminary prospectus or free writing prospectus or any
amendment thereof or supplement thereto, together with any documents
incorporated therein by reference or, (b) any omission or alleged omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and the Company will reimburse such holder and each of
its Indemnitees for any legal or any other expenses, including any amounts paid
in any settlement effected with the consent of the Company, which consent will
not be unreasonably withheld or delayed, incurred by them in connection with
investigating or defending any such loss, claim, liability, action or
proceeding; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense arises out of or is based upon an
untrue statement or alleged untrue statement, or omission or alleged omission,
made in such registration statement, any such prospectus, preliminary prospectus
or free writing prospectus or any amendment or supplement thereto, or in any
application, in reliance upon, and in conformity with, written information
prepared and furnished to the Company by such holder expressly for use therein.
In connection with an underwritten offering, the Company will indemnify such
underwriters, their officers and directors and each Person who controls such
underwriters (within the meaning of the Securities Act) to the same extent as
provided above with respect to the indemnification of the holders of Registrable
Securities.
4.2. Indemnification by Holders of Registrable Securities. In connection
with any registration statement in which a holder of Registrable Securities is
participating, each such holder will furnish to the Company in writing such
information and affidavits as the Company reasonably requests for use in
connection with any such registration statement, prospectus or free writing
prospectus, and, to the extent permitted by law, will indemnify and hold
harmless the Company and its Indemnitees against any losses, claims, damages or
liabilities, joint or several, to which the Company or any such Indemnitee may
become subject under the Securities Act, equivalent foreign securities laws or
otherwise, insofar as such losses, claims, damages or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon (a) any untrue or alleged untrue statement of material fact
contained in the registration statement, prospectus, preliminary prospectus or
free writing prospectus or any amendment thereof or supplement thereto or in any
application, together with any documents incorporated therein by reference or
(b) any omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading, but only to
the extent that such untrue statement (or alleged untrue statement) or omission
(or alleged omission) is made in such registration statement, any such
prospectus, preliminary prospectus or
12
free writing prospectus or any amendment or supplement thereto, or in any
application, in reliance upon and in conformity with written information
prepared and furnished to the Company by such holder expressly for use therein,
and such holder will reimburse the Company and each such Indemnitee for any
legal or any other expenses including any amounts paid in any settlement
effected with the consent of such holder, which consent will not be unreasonably
withheld or delayed, incurred by them in connection with investigating or
defending any such loss, claim, liability, action or proceeding; provided,
however, that the obligation to indemnify will be individual (and not joint and
several) to each holder and will be limited to the net amount of proceeds
received by such holder from the sale of Registrable Securities pursuant to such
registration statement, less any other amounts paid by such holder in respect of
such untrue statement, alleged untrue statement, omission or alleged omission.
4.3. Procedure. Any Person entitled to indemnification hereunder will (a)
give prompt written notice to the indemnifying party of any claim with respect
to which it seeks indemnification (provided, however, that the failure of any
indemnified party to give such notice shall not relieve the indemnifying party
of its obligations hereunder, except to the extent that the indemnifying party
is actually prejudiced by such failure to give such notice), and (b) unless in
such indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is assumed,
the indemnifying party will not be subject to any liability for any settlement
made by the indemnified party without its consent (but such consent will not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim will not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim.
4.4. Entry of Judgment; Settlement. The indemnifying party shall not,
except with the approval of each indemnified party, consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to each indemnified party
of a release from all liability in respect to such claim or litigation without
any payment or consideration provided by such indemnified party.
4.5. Contribution. If the indemnification provided for in this Section 4
is, other than expressly pursuant to its terms, unavailable to or is
insufficient to hold harmless an indemnified party under the provisions above in
respect of any losses, claims, damages or liabilities referred to therein, then
each indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (a)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the sellers of Registrable Securities and any
other sellers participating in the registration statement on the other hand from
the sale of Registrable Securities pursuant to the registered offering of
securities as to which indemnity is sought or (b) if the allocation provided by
clause (a) above is not permitted by applicable law, in such proportion as is
appropriate to reflect the relative benefits referred to in clause (a) above but
also the relative fault of the Company on the one hand and of the sellers of
Registrable Securities and any other sellers participating in the registration
statement on the other hand in connection with the statement or omissions which
resulted in such
13
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the sellers of Registrable Securities and any other sellers participating in
the registration statement on the other hand shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) to the Company bear to the total net proceeds from the offering
(before deducting expenses) to the sellers of Registrable Securities and any
other sellers participating in the registration statement. The relative fault of
the Company on the one hand and of the sellers of Registrable Securities and any
other sellers participating in the registration statement on the other hand
shall be determined by reference to, among other things, whether the untrue or
alleged omission to state a material fact relates to information supplied by the
Company or by the sellers of Registrable Securities or other sellers
participating in the registration statement and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The obligation to provide contribution will be individual
(and not joint and several) to each holder and will be limited to the net amount
of proceeds received by such holder from the sale of Registrable Securities
pursuant to such registration statement, less any other amounts paid by such
holder, including pursuant to Section 4.2 hereof, in respect of such untrue
statement, alleged untrue statement, omission or alleged omission.
The Company and the sellers of Registrable Securities agree that it would not be
just and equitable if contribution pursuant to this Section 4 were determined by
pro rata allocation (even if the sellers of Registrable Securities were treated
as one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 4, no seller of
Registrable Securities shall be required to contribute any amount in excess of
the net proceeds received by such Seller from the sale of Registrable Securities
covered by the registration statement filed pursuant hereto, less any other
amounts paid by such holder in respect of such untrue statement, alleged untrue
statement, omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
4.6. Other Rights. The indemnification and contribution by any such party
provided for under this Agreement shall be in addition to any other rights to
indemnification or contribution which any indemnified party may have pursuant to
law or contract and will remain in full force and effect regardless of any
investigation made or omitted by or on behalf of the indemnified party or any
officer, director or controlling Person of such indemnified party and will
survive the transfer of securities.
5. TRANSFER RESTRICTIONS
5.1. General Transfer Restrictions. Each Shareholder understands and
agrees that the Shares held by such Shareholder on the date hereof have not been
registered under the Securities Act or registered or qualified under any state
law. No Shareholders shall Transfer Shares (or solicit any offers in respect of
any Transfer of such Shares), except in compliance with the
14
Securities Act, any applicable state law or in accordance with agreements
applicable to such Transfer.
5.2. Restrictions on Transfer. No Shareholder shall Transfer any of such
Shareholder's Shares to any other Person except as follows:
5.2.1. Private Transfers. Any Sponsor may Transfer any or all of
such Sponsor's Shares to such Sponsor's Permitted Transferees and such
transferee shall be deemed to be a Sponsor hereunder and shall deliver a
signature page hereto agreeing to be bound hereby, simultaneously with the
Transfer of such Shares. Any transferring Sponsor under this Section shall
provide prompt written notice to the Company of any such Transfer,
indicating its reliance on this provision and the identity and contact
information of the Permitted Transferee.
5.2.2. Public Transfers.
(a) Any Shareholder may Transfer any or all of such
Shareholders' Shares, to the extent they constitute Common Stock, in
a Public Offering undertaken in accordance with this Agreement
without the consent of the Company or the other Shareholders.
(b) A Shareholder may Transfer any or all of such
Shareholder's Shares pursuant to Rule 144 of the Securities Act.
6. PREEMPTIVE RIGHTS
6.1. Offering.
(a) If the Company issues or sells or authorizes the issuance
or sale of any New Securities (as defined in Section 6.3 below)
after the date hereof, the Company shall offer to each Sponsor by
written notice (a "Subscription Notice") a percentage of such New
Securities pro rata based on the relative number of Shares held by
such Sponsor as compared to the number of Shares and
then-exercisable stock options and warrants outstanding held by all
holders of the Company's Shares, stock options and warrants. Each
such Sponsor shall be entitled to purchase such New Securities at
the most favorable price and on the most favorable terms as such New
Securities are to be sold or issued; provided that if a Person
participating in such purchase of New Securities is required in
connection therewith also to purchase other securities of the
Company, the Sponsors exercising their rights pursuant to this
Section 6.1 shall also be required to purchase such other securities
on substantially the same economic terms and conditions as those on
which the offeree of the New Securities is required to purchase such
other securities. Each Sponsor participating in such purchase shall
also be obligated to execute agreements in the form presented to
such Sponsor by the Company, so long as such agreements are
substantially similar to those to be executed by the purchasers of
New Securities (without taking into consideration any rights which
do not entitle such a purchaser to a higher economic return on the
New Securities than the economic return to which other Sponsors
15
participating in such transaction will be entitled with respect to
New Securities). Notwithstanding anything to the contrary contained
herein, the Company shall not have any obligation to issue equity
securities or to offer to issue any equity securities under this
Section 6 to any Sponsor who is not an "accredited investor" as such
term is defined in Regulation D of the Securities Act.
(b) Each Subscription Notice delivered by the Company to a
Sponsor in respect of any proposed issuance or sale of New
Securities shall describe in reasonable detail the type, class and
number of New Securities being offered, the purchase price thereof,
the payment terms therefor and the percentage thereof offered to
such holder pursuant to this Section 6. In order to exercise its
purchase rights hereunder in respect of any issuance or sale of New
Securities described in a Subscription Notice, a Sponsor must
deliver to the Company during the fifteen (15) day period commencing
upon such holder's receipt of such Subscription Notice (the
"Subscription Period"), a written commitment describing its election
hereunder (an "Election Notice"). If a Sponsor fails for any reason
to deliver an Election Notice to the Company during the Subscription
Period with respect to a proposed issuance or sale of New
Securities, such Sponsor shall be deemed to have waived its rights
pursuant to this Section 6 in respect of such issuance or sale of
New Securities.
6.2. Expiration of Subscription Period. Within the 180-day period
immediately following the Subscription Period, the Company shall be entitled to
sell, or enter into any agreement to sell, any New Securities which any Sponsor
has not elected to purchase, on terms and conditions no more favorable to the
offeree of such New Securities than those offered to the Sponsors pursuant to
Section 6.1. Any New Securities offered or sold by the Company after such
180-day period must be reoffered to each Sponsor pursuant to the terms of this
Section 6.
6.3. New Securities. For purposes hereof, "New Securities" means any
shares of the Company's Capital Stock, or any options, convertible securities or
other rights to acquire shares of the Company's Capital Stock, other than (a)
the issuance and sale of Series A Preferred Stock in connection with the
Clearlake Stock Purchase Agreements, (b) Common Stock (or options to acquire
Common Stock) issued or issuable to any employee, director or consultant of the
Company or any of its subsidiaries pursuant to any equity incentive plan or
other arrangement approved by the Company's Board, (c) Common Stock or other
securities issued directly or indirectly upon the conversion, exchange or
exercise of any securities previously subjected to this Section 6 or outstanding
on the date hereof, (d) Common Stock or other securities issued in connection
with or in furtherance of the acquisition of or investment in another company or
business (whether through a purchase of securities, a merger, consolidation,
purchase of assets or otherwise), (e) Common Stock or other securities issued in
connection with or in furtherance of the incurrence of any indebtedness for
borrowed money or for equipment lease financings by the Company or its
subsidiaries, (f) Common Stock or other securities issued or issuable in a
Public Offering, (g) Common Stock or other securities issued in connection with
any stock split, dividend, combination, recapitalization or similar transaction,
(h) Common Stock issued or issuable upon the exercise of warrants or other
securities or rights to persons or entities with which the Company has or is
entering into a technology or other strategic relationship not for the purpose
of raising money or providing financing, (i) Common Stock issued or issuable
upon
16
conversion of Series A Preferred Stock or as dividends or distributions on the
Series A Preferred Stock and (j) Common Stock or other securities issued
directly or indirectly upon the conversion, exchange or exercise of any
securities issued pursuant to any of the clauses of this Section 6.3.
7. DEFINITIONS.
"Acquisition Stock Purchase Agreement" shall have the meaning set forth in
the Recitals.
"Affiliate" means, with respect to any Person, (i) any other Person which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such Person (for the purposes of
this definition, "control" (including, with correlative meanings, the terms
"controlling," "controlled by" and "under common control with"), as used with
respect to any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of such
Person, whether through the ownership of voting securities, by agreement or
otherwise); provided, however, that neither the Company nor any of its
Subsidiaries shall be deemed an Affiliate of any of the Shareholders (and vice
versa) and none of the Shareholders shall be deemed Affiliates of each other
solely as a result of their relationship with respect to the Company.
"Agreement" shall have the meaning set forth in the Preamble.
"Amendment" shall have the meaning set forth in Section 6.3.
"automatic shelf registration statement" has the meaning set forth in Rule
405 under the Securities Act.
"Board" shall have the meaning set forth in Section 1.7.
"Business Day" shall mean any day that is not a Saturday, a Sunday or
other day on which banks are required or authorized by law to be closed in the
states of Delaware or New York.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations, rights or other
equivalents (however designated) of corporate stock; and (ii) with respect to
any other Person, any and all partnership, membership or other equity interests
of such Person.
"Clearlake Stock Purchase Agreements" shall have the meaning set forth in
the Recitals.
"Common Stock" shall mean the common stock of the Company, par value $.01
per share.
"Company" shall have the meaning set forth in the Preamble.
"Demand Notice" shall have the meaning set forth in Section 1.2.
"Demand Registrations" means Long-Form Registrations and Short-Form
Registrations requested pursuant to Section 1.1.
17
"▇▇▇▇▇" means the Security Exchange Commission's Electronic Data
Gathering, Analysis and Retrieval system.
"Election Notice" shall have the meaning set forth in Section 6.1(b).
"Effective Date" shall have the meaning set forth in the Preamble.
"Family Member" means, with respect to any natural Person, such Person's
spouse and descendants (whether or not adopted) and any trust, family limited
partnership or limited liability company that is and remains at all times solely
for the benefit of such Person's spouse and/or descendants.
"free writing prospectus" has the meaning ascribed to such term under Rule
405 under the Securities Act.
"Indemnitees" shall have the meaning set forth in Section 4.1.
"Initial Stock Purchase Agreement" shall have the meaning set forth in the
Recitals.
"issuer free writing prospectus" has the meaning ascribed to such term
under Rule 433(h) under the Securities Act.
"Lock-Up Period" shall have the meaning set forth in Section 3.4.1.
"Long-Form Registrations" shall have the meaning set forth in Section 1.1.
"Majority Sponsor Approval" means the written approval of Persons holding
a majority of Sponsor Registrable Securities.
"New Securities" shall have the meaning set forth in Section 6.3.
"Person" means an individual, a partnership, a joint venture, a
corporation, a limited liability company, a trust, an unincorporated
organization and a government or any department or agency thereof.
"Permitted Transferee" shall mean, with respect to any Sponsor, (a) if any
Transfer involves less than all of a Sponsor's Registrable Securities, any
Affiliate of a Sponsor or Reservoir Capital Group or its Affiliates, or (b) if
any Transfer involves all of a Sponsor's Registrable Securities, to any Person
other than a direct competitor of the Company.
"Piggyback Registration" shall have the meaning set forth in Section 2.1.
"Public Offering" means a public offering and sale of Common Stock
pursuant to an effective registration statement under the Securities Act.
"Registrable Securities" means (i) any share of Common Stock issued to any
Shareholder (or any Affiliate thereof) as of the Effective Date or thereafter
acquired, including upon conversion of the Company's Series A Preferred Stock by
any Shareholder, and (ii) any equity securities issued or issuable directly or
indirectly with respect to any of the foregoing
18
securities referred to in clause (i) by way of share dividend or share split or
in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization. As to any particular shares constituting
Registrable Securities, such shares will cease to be Registrable Securities when
they have been (x) effectively registered under the Securities Act and disposed
of in accordance with the registration statement covering them, or (y) sold to
the public pursuant to Rule 144 under the Securities Act or sold in a block sale
to a financial institution in the ordinary course of its trading business. For
purposes of this Agreement, a Person will be deemed to be a holder of
Registrable Securities whenever such Person has the right to acquire directly or
indirectly such Registrable Securities (upon conversion or exercise in
connection with a transfer of securities or otherwise, but disregarding any
restrictions or limitations upon the exercise of such right), whether or not
such acquisition has actually been effected.
"Registration Expenses" shall have the meaning set forth in Section 3.2.
"Rule 433" means Rule 433 under the Securities Act or any successor
federal law then in force.
"Series A Preferred Stock" means the Series A Preferred Stock of the
Company, par value $.01 per share.
"Securities Act" means the United States Securities Act of 1933, as
amended, or any successor federal law then in force.
"Securities and Exchange Commission" means the United States Securities
and Exchange Commission and any governmental body or agency succeeding to the
functions thereof.
"Securities Exchange Act" means the United States Securities Exchange Act
of 1934, as amended, or any successor federal law then in force.
"Shareholders" shall have the meaning set forth in the Preamble.
"Shares" shall mean collectively any shares of the Company's equity
securities outstanding from time to time, including, but not limited to the
Common Stock and the Series A Preferred Stock.
"Shelf Registration" shall have the meaning set forth in Section 1.4.
"Short-Form Registrations" shall have the meaning set forth in Section
1.1.
"Sponsor" has the meaning set forth in the Preamble.
"Sponsor Registrable Securities" shall mean all of the Registrable
Securities held by any Sponsor from time to time.
"Subscription Notice" shall have the meaning set forth in Section 6.1(a).
"Subscription Period" shall have the meaning set forth in Section 6.1(b).
19
"Transfer" shall mean any sale, pledge, assignment, encumbrance or other
transfer or disposition of any shares of Registrable Securities to any other
Person, whether directly, indirectly, voluntarily, involuntarily, by operation
of law, pursuant to judicial process or otherwise.
8. MISCELLANEOUS.
8.1. No Inconsistent Agreements. The Company will not hereafter enter into
any agreement with respect to its securities which is inconsistent with or
violates the rights granted to the holders of Registrable Securities in this
Agreement.
8.2. Remedies. The parties hereto agree and acknowledge that money damages
may not be an adequate remedy for any breach of the provisions of this Agreement
and that, in addition to any other rights and remedies at law or in equity
existing in its favor, any party shall be entitled to seek specific performance
and/or other injunctive relief from any court of law or equity of competent
jurisdiction (without posting any bond or other security) in order to enforce or
prevent violation of the provisions of this Agreement.
8.3. Amendment and Waiver. Except as otherwise provided herein, this
Agreement may be amended, modified, extended or terminated, and the provisions
hereof may be waived, only by an agreement in writing signed by the Company and
Persons holding a majority of Sponsor Registrable Securities, provided, that the
admission of new parties pursuant to the terms of Section 8.4 shall not
constitute an amendment of this Agreement for purposes of this Section 8.3.
Notwithstanding the foregoing, if any amendment, modification, extension,
termination or waiver (an "Amendment") would treat any Shareholder or group of
Shareholders in a manner different from, and materially adverse relative to, the
Sponsors voting in favor of such Amendment, then such Amendment will require the
consent of the Shareholder or Shareholders holding a majority of the Registrable
Securities of such group adversely treated. Each such Amendment shall be binding
upon each party hereto and each Shareholder subject hereto. In addition, each
party hereto and each Shareholder subject hereto may waive any right hereunder,
as to itself, by an instrument in writing signed by such party or Shareholder.
The failure of any party to enforce any provisions of this Agreement shall in no
way be construed as a waiver of such provisions and shall not affect the right
of such party thereafter to enforce each and every provision of this Agreement
in accordance with its terms. To the extent the Amendment of any Section of this
Agreement would require a specific consent pursuant to this Section 8.3, any
Amendment to definitions to the extent used in such Section shall also require
the specified consent.
8.4. Successors and Assigns; Transferees. This Agreement shall be binding
upon and inure to the benefit of and be enforceable by the parties hereto and
their respective successors and assigns. Registrable Securities shall continue
to be Registrable Securities after any Transfer (except if such securities were
effectively registered under the Securities Act and disposed of in accordance
with the registration statement covering them, sold to the public pursuant to
Rule 144 under the Securities Act or sold in a block sale to a financial
institution in the ordinary course of its trading business). Any transferee
receiving shares of Registrable Securities in a Transfer effected in compliance
with the terms of this Agreement shall become a Shareholder, party to this
Agreement and subject to the terms and conditions of, and be entitled to
enforce, this
20
Agreement to the same extent, and in the same capacity, as the Person that
Transfers such Registrable Securities to such transferee; provided that only a
Permitted Transferee of a Sponsor will be deemed to be a Sponsor for purposes of
this Agreement. For the avoidance of doubt, any transferee receiving Registrable
Securities in a Transfer that is not a Sponsor or a Permitted Transferee of a
Sponsor or its Affiliates will become a party to this Agreement without the
benefit of the right to initiate Demand Registrations or other rights afforded
to the Sponsors hereunder. Prior to the Transfer of any Registrable Securities
to any transferee, and as a condition thereto, each Shareholder effecting such
Transfer shall (a) cause such transferee to deliver to the Company and each of
the Shareholders its written agreement, in form and substance reasonably
satisfactory to the Company, to be bound by the terms and conditions of this
Agreement to the extent described in the preceding sentence and (b) if such
Transfer is to a Permitted Transferee, remain directly liable for the
performance by such Permitted Transferee of all obligations of such transferee
under this Agreement.
8.5. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or the effectiveness or validity of any provision in any
other jurisdiction, and this Agreement shall be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
8.6. Counterparts. This Agreement may be executed in separate
counterparts, each of which shall be an original and all of which taken together
shall constitute one and the same Agreement.
8.7. Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
8.8. Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given, delivered and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified in this Section 8.8 prior to 5:00 p.m.
(Eastern time) on a Business Day, (ii) the Business Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified in this Agreement later than 5:00 p.m.
(Eastern time) on any Business Day and earlier than 11:59 p.m. (Eastern time) on
the day preceding the next Business Day, or (iii) one (1) Business Day after
when sent, if sent by nationally recognized overnight courier service (charges
prepaid). The address for such notices and communications shall be as follows:
If to the Company:
GoAmerica, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel and Chief Financial Officer
21
with a copy to:
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PC
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
If to any Sponsor: to the addressee specified on Schedule A hereto.
8.9. Delivery by Facsimile. This Agreement and any signed agreement or
instrument entered into in connection herewith or contemplated hereby, and any
amendments hereto or thereto, to the extent signed and delivered by means of a
facsimile machine, shall be treated in all manner and respects as an original
agreement or instrument and shall be considered to have the same binding legal
effect as if it were the original signed version thereof delivered in person. At
the request of any party hereto or to any such agreement or instrument, each
other party hereto or thereto shall re-execute original forms thereof and
deliver them to all other parties. No party hereto or to any such agreement or
instrument shall raise the use of a facsimile machine to deliver a signature or
the fact that any signature or agreement or instrument was transmitted or
communicated through the use of a facsimile machine as a defense to the
formation of a contract and each such party forever waives any such defense.
8.10. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to a contract
executed and performed in such state, without giving effect to the conflicts of
laws principles thereof.
8.11. Jurisdiction. Submission to Jurisdiction; Waivers. Each party hereto
irrevocably agrees that any proceeding with respect to this Agreement or for
recognition and enforcement of any judgment in respect thereof brought by the
other party hereto or its successors or assigns, may be brought and determined
in the Supreme Court of the State of New York in New York County or in the
United States District Court for the Southern District of New York, and each
party hereto hereby irrevocably submits with regard to any such proceeding for
itself and in respect to its properties, generally and unconditionally, for all
purposes of this Agreement.
8.12. Waiver of Jury Trial. To the extent not prohibited by applicable law
that cannot be waived, each party hereto waives, and covenants that such party
will not assert (whether as plaintiff, defendant or otherwise), any right to
trail by jury in any forum in respect of any issue, claim or proceeding arising
out of this Agreement or the subject matter hereof or in any way connected with
the dealings of any party hereto in connection with any of the above, in each
case whether now existing or hereafter arising and whether in contract, tort or
otherwise. Any party to this Agreement may file a copy of this Section 8.12 with
any court as written evidence of the consent of the parties hereto to the waiver
of their rights to trial by jury.
8.13. Termination. The provisions of Section 8 of this Agreement shall
terminate as to any Shareholder at such time as such Shareholder ceases to own
any Series A Preferred Stock or shares issued upon conversion thereof or in
exchange therefor.
22
* * Signature pages follow * *
23
IN WITNESS WHEREOF, the parties have executed this Investor Rights
Agreement on the day and year first above written.
COMPANY:
GOAMERICA, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
Title: Chief Executive Officer
-----------------------------
SHAREHOLDERS
CCP A, L.P.
By: CLEARLAKE CAPITAL PARTNERS, LLC
Its: General Partner
By: CCG Operations, LLC
Its: Managing Member
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Manager
Schedule A: Sponsors
CCP A, L.P.
Address for Notice:
Clearlake Capital Group, LP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇