Exhibit 99.5
AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
GOAMERICA, INC.
Dated as of ____________, 200_
TABLE OF CONTENTS
Page
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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..................................................... 15
5.1. General Transfer Restrictions.................................... 15
5.2. Restrictions on Transfer......................................... 15
5.2.1. Private Transfers....................................... 15
5.2.2. Public Transfers........................................ 15
5.2.3. Pledge of Shares........................................ 15
6. PREEMPTIVE RIGHTS......................................................... 15
6.1. Offering......................................................... 15
6.2. Expiration of Subscription Period................................ 16
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6.3. New Securities................................................... 16
7. INFORMATION RIGHTS........................................................ 17
8. DEFINITIONS............................................................... 18
9. MISCELLANEOUS............................................................. 21
9.1. No Inconsistent Agreements....................................... 21
9.2. Remedies......................................................... 21
9.3. Amendment and Waiver............................................. 21
9.4. Successors and Assigns; Transferees.............................. 21
9.5. Severability..................................................... 22
9.6. Counterparts..................................................... 22
9.7. Descriptive Headings............................................. 22
9.8. Notices.......................................................... 22
9.9. Delivery by Facsimile............................................ 23
9.10. Governing Law.................................................... 23
9.11. Jurisdiction; Submission to Jurisdiction; Waivers................ 23
9.12. Waiver of Jury Trial............................................. 23
9.13. Termination...................................................... 24
ii
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
This Amended and Restated Investor Rights Agreement (this "Agreement") is
made as of ____________, 200_ (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 9.4 hereof (collectively, together with
the Sponsors, the "Shareholders").
RECITALS
WHEREAS, the Company and the Sponsors are parties to that certain Stock
Purchase Agreement dated as of August 1, 2007 (the "Initial Stock Purchase
Agreement"), pursuant to which the Company issued 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 that certain Amended
and Restated Stock Purchase Agreement dated as of September 12, 2007 (the
"Acquisition Stock Purchase Agreement" and, collectively with the Initial Stock
Purchase Agreement, the "Clearlake Stock Purchase Agreements"), pursuant to
which the Company has agreed to sell to the Sponsors, subject to the
satisfaction or waiver of the conditions specified therein, 7,446,809 additional
shares of Series A Preferred Stock of the Company.
WHEREAS, the parties hereto desire to enter into this Agreement to provide
for the investor rights set forth herein. Unless otherwise noted in this
Agreement, capitalized terms used herein shall have the meanings set forth in
Section 8.
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
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price of the Registrable Securities requested to be registered in any Long Form
Registration pursuant to this Section must be at least $5,000,000 unless the
Registrable Securities requested to be registered constitute all of the
Registrable Securities 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
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by the Securities and Exchange Commission to be included in a registration
statement due to Securities and Exchange Commission guidance relating to Rule
415.
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
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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 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, but only if all of the Registrable Securities
requested to be included in such registration are included in such registration,
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
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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, but only if all of the securities described in clause
(a) are included in such registration, securities requested by the Company to be
included in such registration to the extent the managing underwriter(s) advises
the Company that such inclusion will not adversely affect the marketability of
the offering, and (c) third, but only if all of the securities described in
clauses (a) and (b) are included in such registration, Registrable Securities
and other securities 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, to the extent the
managing underwriter(s) advises the Company that such inclusion will not
adversely affect the marketability of the offering.
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
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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 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;
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(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;
(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
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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 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;
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(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 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
9
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 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
10
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 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
11
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.
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,
12
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 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
13
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 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
14
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 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.
5.2.3. Pledge of Shares. Any Shareholder may Transfer any or all of
such Shareholder's Shares to a lender to such Shareholder pursuant to a
bona fide pledge of all of such Shareholder's assets.
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
15
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 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
16
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 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. INFORMATION RIGHTS.
(a) The books and records of the Company shall be available for inspection
by the Sponsors at the principal office and place of business of the Company.
The Sponsors shall have the right to receive, upon request therefor, (a) audited
annual consolidated financial statements of the Company promptly following such
statements becoming available to the Company, (b) unaudited quarterly
consolidated financial statements of the Company promptly following such
statements becoming available to the Company, (c) an annual budget of the
Company with respect to each fiscal year within thirty (30) days following
presentation thereof to the Board or, if the Board approves such budget,
approval thereof, (d) unaudited monthly consolidated income statements, balance
sheets, and cashflow statements of the Company promptly following the
preparation thereof and (e) such other information as may be reasonably
requested by a Sponsor relating to the Company which the Company is permitted to
disclose; provided, however, that any such Person gaining access to information
regarding the Company pursuant to this Section 7(a) shall agree to hold in
strict confidence, and shall not make any disclosure of, any information
regarding the Company which the Company determines in good faith to be
confidential, and of which determination such Person is notified, unless (w) the
release of such information is requested or required (by deposition,
interrogatory, requests for information or documents by a governmental entity,
subpoena or similar process), (x) such information is or becomes publicly known
without a breach of this Agreement, (y) such information is or becomes available
to such Person on a non-confidential basis from a source other than the Company
or (z) such information is independently developed by such Person.
(b) The rights of the Sponsors under Section 7(a) hereof shall terminate
at such time that the Sponsors cease to own at least 145,067 shares of Common
Stock (as adjusted for stock dividends, splits, combinations or similar events
and including all shares of Common Stock issuable to the Sponsors upon the
conversion and/or exercise of all securities held by the Sponsors that are
convertible and/or exerciseable for shares of Common Stock).
17
8. 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.
"▇▇▇▇▇" means the Security Exchange Commission's Electronic Data
Gathering, Analysis and Retrieval system.
18
"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 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
19
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).
"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,
20
indirectly, voluntarily, involuntarily, by operation of law, pursuant to
judicial process or otherwise.
9. MISCELLANEOUS.
9.1. 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.
9.2. 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.
9.3. Amendment and Waiver.
(a) 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 9.4 shall not constitute an amendment of this
Agreement for purposes of this Section 9.3. 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.
(b) 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 9.3, any Amendment to definitions to
the extent used in such Section shall also require such specified consent.
(c) It is acknowledged that this Agreement amends and restates in its
entirety that certain Investor Rights Agreement dated as of August 1, 2007
between the Company and the Sponsors, as the same may have been amended,
supplemented or otherwise modified from time to time prior to the date hereof.
9.4. 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
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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 shall be subject to the terms and conditions of, and be
entitled to enforce, this 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. Other than
with respect to a pledge permitted pursuant to Section 5.2.3 hereof, 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.
9.5. 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.
9.6. 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.
9.7. Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
9.8. 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 9.8 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:
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If to the Company:
GoAmerica, Inc.
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Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel and Chief Financial Officer
with a copy to:
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PC
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
If to any Sponsor: to the addressee specified on Schedule A hereto.
9.9. 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.
9.10. 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.
9.11. 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.
9.12. 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
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9.12 with any court as written evidence of the consent of the parties hereto to
the waiver of their rights to trial by jury.
9.13. Termination. The provisions of Section 9 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.
* * Signature pages follow * *
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IN WITNESS WHEREOF, the parties have executed this Investor Rights
Agreement on the day and year first above written.
COMPANY:
GOAMERICA, INC.
By: ___________________________
Name: ___________________________
Title: ___________________________
SHAREHOLDERS
CCP A, L.P.
By: CLEARLAKE CAPITAL PARTNERS, LLC
Its: General Partner
By: CCG Operations, LLC
Its: Managing Member
By: ______________________________
Name:
Title: Manager
Schedule A: Sponsors
CCP A, L.P.
Address for Notice:
Clearlake Capital Group, LP
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Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
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Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇