EXHIBIT 99.1
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and entered
into as of this 6th day of July, 2005 by and among GoAmerica, Inc., a Delaware
corporation (the "Company"), Xxxxxx X. Xxxxx and Xxxxxx X. Xxxxx (collectively,
the "Investors").
The parties hereby agree as follows:
1. Effectiveness of Agreement; Certain Definitions.
(a) This terms of this Agreement shall become effective upon the
Effective Time (as defined in the Merger Agreement).
(b) As used in this Agreement, the following terms shall have the
following meanings:
"Affiliate" means, with respect to any person, any other person
which directly or indirectly controls, is controlled by, or is under common
control with, such person.
"Business Day" means a day, other than a Saturday or Sunday, on
which banks in New York City are open for the general transaction of business.
"Common Stock" shall mean the Company's common stock, par value
$0.01 per share, and any securities into which such shares may hereinafter be
reclassified.
"Market Price" as of a particular date (the "Valuation Date") shall
mean the following: (a) if the Common Stock is then listed on a national stock
exchange, the closing sale price of one share of Common Stock on such exchange
on the last trading day prior to the Valuation Date; (b) if the Common Stock is
then quoted on The Nasdaq Stock Market, Inc. ("Nasdaq"), the National
Association of Securities Dealers, Inc. OTC Bulletin Board (the "Bulletin
Board") or such similar exchange or association, the closing sale price of one
share of Common Stock on Nasdaq, the Bulletin Board or such other exchange or
association on the last trading day prior to the Valuation Date or, if no such
closing sale price is available, the average of the high bid and the low asked
price quoted thereon on the last trading day prior to the Valuation Date; or (c)
if the Common Stock is not then listed on a national stock exchange or quoted on
Nasdaq, the Bulletin Board or such other exchange or association, the fair
market value of one share of Common Stock as of the Valuation Date, shall be
determined in good faith by the Board of Directors of the Company and the
Investors.
"Merger Agreement" means the Agreement and Plan of Reorganization,
dated July 6, 2005, among the Company, the Investors and the other parties
thereto.
"Prospectus" shall mean the prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement, with respect
to the terms of the offering of the Registrable Securities covered by such
Registration Statement and by all other amendments and supplements to the
prospectus, including post-effective amendments and all material incorporated by
reference in such prospectus.
"Register," "registered" and "registration" refer to a registration
made by preparing and filing a Registration Statement or similar document in
compliance with the 1933 Act (as defined below), and the declaration or ordering
of effectiveness of such Registration Statement or document.
"Registrable Securities" shall mean the Shares; provided, that, a
security shall cease to be a Registrable Security upon (A) sale pursuant to a
Registration Statement or Rule 144 under the 1933 Act, or (B) such security
becoming eligible for sale by the Investors pursuant to Rule 144(k).
"Registration Statement" shall mean any registration statement of
the Company filed under the 1933 Act that covers the resale of any of the
Registrable Securities pursuant to the provisions of this Agreement, amendments
and supplements to such Registration Statement, including post-effective
amendments, all exhibits and all material incorporated by reference in such
Registration Statement.
"SEC" means the U.S. Securities and Exchange Commission.
"Shares" means the shares of Common Stock issued to the Investors
pursuant to the Merger Agreement.
"1933 Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"1934 Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
2. Registration.
(a) S-3 Registration Statement. If, at any time during the two
year period immediately following the Effective Time (as defined in the Merger
Agreement), the Investors are not permitted, under applicable law or otherwise,
to sell their Shares pursuant to Rule 144 and Rule 145 under the 1933 Act, the
Company promptly shall prepare and file with the SEC one Registration Statement
on Form S-3 (or, if Form S-3 is not then available to the Company, on such form
of registration statement as is then available to effect a registration for
resale of the Registrable Securities), covering the resale of the Registrable
Securities then held by the Investors (the "S-3 Registration Statement").
(b) Effectiveness. The Company shall use commercially reasonable
efforts to have the S-3 Registration Statement contemplated in Section 2(a)
declared effective as soon as practicable.
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(c) Company Registration. If (but without any obligation to do so)
the Company proposes to register (including for this purpose a registration
effected by the Company for shareholders other than the Investors) any of its
stock or other securities under the 1933 Act in connection with a public
offering of such securities solely for cash (other than a registration on form
S-8 or similar or successor form relating solely to the sale of securities to
participants in a Company stock plan or other compensatory arrangements, or a
registration on Form S-4 or similar or successor form), the Company shall, at
such time, promptly give each Investor written notice of such registration. Upon
the written request of any Investor given within twenty (20) days after mailing
of such notice by the Company, the Company shall use its best efforts to cause
to be registered under the 1933 Act all of the Registrable Securities that each
such Investor has requested to be registered. The Company shall have no
obligation under this Section 2(c) to make any offering of its securities, or to
complete an offering of its securities that it proposes to make.
(d) Expenses. The Company will pay all of the fees associated with
any registration contemplated by this Agreement, except that the Company shall
not pay more than $2,500 in costs associated with clearing the Registrable
Securities for sale under applicable state securities laws, any discounts,
commissions, fees of underwriters, selling brokers, dealers, managers or similar
securities industry professionals or any fees and expenses of separate counsel
for the Investors with respect to or in connection with the Registrable
Securities being sold.
3. Company Obligations.
(a) The Company will use commercially reasonable efforts to effect
the registration of the Registrable Securities in accordance with the terms
hereof, and pursuant thereto the Company will, as expeditiously as possible:
(i) use commercially reasonable efforts to cause the S-3
Registration Statement to become effective and to remain continuously
effective for a period that will terminate upon the earlier of (A) the
date on which all Registrable Securities covered by such S-3 Registration
Statement, as amended from time to time, have been sold, and (B) the date
on which all Registrable Securities covered by such Registration Statement
may be sold pursuant to Rule 144(k);
(ii) prepare and file with the SEC such amendments and
post-effective amendments to the S-3 Registration Statement and the
related Prospectus as may be necessary to keep the S-3 Registration
Statement effective for the period specified in Section 3(a)(i);
(iii) provide copies to and permit counsel designated by the
Investors to review each Registration Statement and all amendments and
supplements thereto, and each request for acceleration of effectiveness
thereof, no fewer than three (3) Business Days prior to their filing with
the SEC;
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(iv) furnish to the Investors' legal counsel (A) promptly
after the same is prepared and publicly distributed, filed with the SEC,
or received by the Company (but not later than two (2) Business Days after
the filing date, receipt date or sending date, as the case may be) one (1)
copy of any Registration Statement and any amendment thereto, each
preliminary prospectus and Prospectus and each amendment or supplement
thereto, and each letter written by or on behalf of the Company to the SEC
or the staff of the SEC, and each item of correspondence from the SEC or
the staff of the SEC, in each case relating to such Registration Statement
(other than any portion of any thereof which contains information for
which the Company has sought confidential treatment), and (B) within two
(2) Business Days after any Registration Statement is declared effective,
such number of copies of any related Prospectus to be used in connection
with the sale or other disposition of the securities covered thereby, as
the Investors may reasonably request;
(v) use commercially reasonable efforts to (A) prevent the
issuance of any stop order or other suspension of effectiveness and, (B)
if such order is issued, obtain the withdrawal of any such order at the
earliest possible moment;
(vi) immediately notify the Investors, at any time when a
Prospectus relating to Registrable Securities is required to be delivered
under the 1933 Act, upon discovery that, or upon the happening of any
event as a result of which, the Prospectus included in a Registration
Statement, as then in effect, includes an untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of
the circumstances then existing, and at the request of the Investors,
promptly prepare and furnish to such Investors a reasonable number of
copies of a supplement to or an amendment of such Prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such
Registrable Securities, such Prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing;
(vii) notify the Investors by facsimile or e-mail as promptly
as practicable, and in any event, within twenty-four (24) hours, after any
Registration Statement is declared effective; and
(viii) cause all Registrable Securities covered by a
Registration Statement to be listed on each securities exchange,
interdealer quotation system or other market on which similar securities
issued by the Company are then listed.
4. Obligations of the Investors.
(a) Each Investor shall furnish in writing to the Company such
information regarding itself, the Registrable Securities held by it and the
intended method of disposition of the Registrable Securities held by it, as
shall be reasonably required to effect the registration of such Registrable
Securities and shall execute such documents in connection with such registration
as the Company may reasonably request. At least five (5) Business Days prior to
the first anticipated filing date of the Registration Statement, the Company
shall notify each Investor of the information the Company requires from such
Investor if such Investor elects to have any of the Registrable Securities
included in the Registration Statement. An Investor shall provide such
information to the Company at least two (2) Business Days prior to the first
anticipated filing date of such Registration Statement if such Investor elects
to have any of the Registrable Securities included in the Registration
Statement.
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(b) Each Investor, by its acceptance of the Registrable
Securities, agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of a Registration
Statement hereunder, unless such Investor has notified the Company in writing of
its election to exclude all of its Registrable Securities from such Registration
Statement.
(c) Each Investor agrees that, upon receipt of any notice from the
Company of an event pursuant to Section 3(a)(vi) hereof, such Investor will
immediately discontinue disposition of Registrable Securities pursuant to the
Registration Statement covering such Registrable Securities, until the
Investors' receipt of the copies of the supplemented or amended prospectus filed
with the SEC and until any related post-effective amendment is declared
effective and, if so directed by the Company, the Investors shall deliver to the
Company or destroy (and deliver to the Company a certificate of destruction) all
copies in the Investors' possession of the Prospectus covering the Registrable
Securities current at the time of receipt of such notice.
(d) No Investor may participate in any third party underwritten
registration hereunder unless it (i) agrees to sell the Registrable Securities
on the basis provided in any underwriting arrangements in usual and customary
form entered into by the Company, (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements, and (iii) agrees to pay its pro rata share of all underwriting
discounts and commissions.
(e) The Investors agree that they shall not, in the aggregate,
with respect to the Shares received by them, (A) during each of the two
successive one-year periods immediately following the Effective Time (as defined
in the Merger Agreement), sell, transfer or otherwise dispose of more than the
greater of (i) one percent (1%) of the largest number of shares of Common Stock
outstanding at any time during each such one year period and (ii) ten percent
(10%) of the number of Shares received by them in the Merger and (B) during each
month in each of the eight quarters in the two successive one-year periods
immediately following the Effective Time, sell, transfer or otherwise dispose of
more than one half of one percent (0.5%) of the largest number of shares of
Common Stock outstanding at any time during each such quarter.
5. Indemnification.
(a) Indemnification by the Company. The Company will indemnify and
hold harmless each Investor and its successors and assigns, and each other
person, if any, who controls such Investor within the meaning of the 1933 Act,
against any losses, claims, damages or liabilities, joint or several, to which
they may become subject under the 1933 Act or otherwise, insofar as such losses,
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claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon: (i) any untrue statement or alleged untrue statement of any
material fact contained in any Registration Statement, any preliminary
prospectus or final prospectus contained therein, or any amendment or supplement
thereof; (ii) any blue sky application or other document executed by the Company
specifically for that purpose or based upon written information furnished by the
Company filed in any state or other jurisdiction in order to qualify any or all
of the Registrable Securities under the securities laws thereof (any such
application, document or information herein called a "Blue Sky Application");
(iii) the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading;
or (iv) any violation by the Company or its agents of any rule or regulation
promulgated under the 1933 Act applicable to the Company or its agents and
relating to action or inaction required of the Company in connection with such
registration and will reimburse such Investor, and each such officer, director
or member and each such controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; PROVIDED, HOWEVER, that the
Company will not be liable in any such case if and to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission so made in
conformity with information furnished by such Investor or any such controlling
person in writing specifically for use in such Registration Statement or
Prospectus.
(b) Indemnification by the Investors. In connection with any
registration pursuant to the terms of this Agreement, each Investor will furnish
to the Company in writing such information as the Company reasonably requests
concerning the holders of Registrable Securities or the proposed manner of
distribution for use in connection with any Registration Statement or Prospectus
and agrees, severally but not jointly, to indemnify and hold harmless, to the
fullest extent permitted by law, the Company, its directors, officers,
employees, stockholders and each person who controls the Company (within the
meaning of the 0000 Xxx) against any losses, claims, damages, liabilities and
expense (including reasonable attorney fees) resulting from any untrue statement
or alleged untrue statement of a material fact or any omission or alleged
omission of a material fact required to be stated in the Registration Statement
or Prospectus or preliminary prospectus or amendment or supplement thereto or
necessary to make the statements therein not misleading, to the extent, but only
to the extent, that such untrue statement or omission is contained in any
information furnished in writing by such Investor to the Company specifically
for inclusion in such Registration Statement or Prospectus or amendment or
supplement thereto. In no event shall the liability of an Investor be greater in
amount than the dollar amount of the net proceeds received by such Investor upon
the sale of the Registrable Securities included in the Registration Statement
giving rise to such indemnification obligation.
(c) Conduct of Indemnification Proceedings. Any person entitled to
indemnification hereunder shall (i) give prompt notice to the indemnifying party
of any claim with respect to which it seeks indemnification and (ii) permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party; provided that any person entitled to
indemnification hereunder shall have the right to employ separate counsel and to
participate in the defense of such claim, but the fees and expenses of such
counsel shall be at the expense of such person unless (a) the indemnifying party
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has agreed to pay such fees or expenses, or (b) the indemnifying party shall
have failed to assume the defense of such claim and employ counsel reasonably
satisfactory to such person or (c) in the reasonable judgment of any such
person, based upon written advice of its counsel, a conflict of interest exists
between such person and the indemnifying party with respect to such claims (in
which case, if the person notifies the indemnifying party in writing that such
person elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the defense of
such claim on behalf of such person); and provided, further, that the failure of
any indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations hereunder, except to the extent that such
failure to give notice shall materially adversely affect the indemnifying party
in the defense of any such claim or litigation. It is understood that the
indemnifying party shall not, in connection with any proceeding in the same
jurisdiction, be liable for fees or expenses of more than one separate firm of
attorneys at any time for all such indemnified parties. No indemnifying party
will, except with the consent of the indemnified party, consent to entry of any
judgment or enter into any settlement that does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
of a release from all liability in respect of such claim or litigation.
(d) Contribution. If for any reason the indemnification provided
for in the preceding paragraphs (a) and (b) is unavailable to an indemnified
party or insufficient to hold it harmless, other than as expressly specified
therein, then the indemnifying party shall contribute to the amount paid or
payable by the indemnified party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect the relative fault of
the indemnified party and the indemnifying party, as well as any other relevant
equitable considerations. No person guilty of fraudulent misrepresentation
within the meaning of Section 11(f) of the 1933 Act shall be entitled to
contribution from any person not guilty of such fraudulent misrepresentation. In
no event shall the contribution obligation of a holder of Registrable Securities
be greater in amount than the dollar amount of the net proceeds received by it
upon the sale of the Registrable Securities giving rise to such contribution
obligation.
6. Miscellaneous.
(a) Amendments and Waivers. This Agreement may be amended only by
a writing signed by the Company and the Investors. The Company may take any
action herein prohibited, or omit to perform any act herein required to be
performed by it, only if the Company shall have obtained the written consent to
such amendment, action or omission to act, of the Investors.
(b) Notices. All notices and other communications provided for or
permitted hereunder shall be made as set forth in the Merger Agreement.
(c) Assignments and Transfers by Investors. The provisions of this
Agreement shall be binding upon and inure to the benefit of the Investors and
their respective successors and assigns.
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(d) Assignments and Transfers by the Company. This Agreement may
not be assigned by the Company (whether by operation of law or otherwise)
without the prior written consent of the Investors, provided, however, that the
Company may assign its rights and delegate its duties hereunder to any surviving
or successor corporation in connection with a merger or consolidation of the
Company with another corporation, or a sale, transfer or other disposition of
all or substantially all of the Company's assets to another corporation, without
the prior written consent of the Investors.
(e) Benefits of the Agreement. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
permitted successors and assigns of the parties. Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
(f) Counterparts; Faxes. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement may also
be executed via facsimile, which shall be deemed an original.
(g) Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
(h) Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof but shall be interpreted as if it
were written so as to be enforceable to the maximum extent permitted by
applicable law, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereby
waive any provision of law which renders any provisions hereof prohibited or
unenforceable in any respect.
(i) Entire Agreement. This Agreement is intended by the parties as
a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
(j) Governing Law; Consent to Jurisdiction. This Agreement shall
be governed by, and construed in accordance with, the internal laws of the State
of New York without regard to the choice of law principles thereof. Each of the
parties hereto irrevocably submits to the exclusive jurisdiction of the courts
of the State of New York located in New York County and the United States
District Court for the Southern District of New York for the purpose of any
suit, action, proceeding or judgment relating to or arising out of this
Agreement and the transactions contemplated hereby. Service of process in
connection with any such suit, action or proceeding may be served on each party
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hereto anywhere in the world by the same methods as are specified for the giving
of notices under this Agreement. Each of the parties hereto irrevocably consents
to the jurisdiction of any such court in any such suit, action or proceeding and
to the laying of venue in such court. Each party hereto irrevocably waives any
objection to the laying of venue of any such suit, action or proceeding brought
in such courts and irrevocably waives any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum.
EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY
LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN
CONSULTED SPECIFICALLY AS TO THIS WAIVER.
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IN WITNESS WHEREOF, the parties have executed this Agreement or caused
their duly authorized officers to execute this Agreement as of the date first
above written.
The Company: GOAMERICA, INC.
By: /s/ Xxxxxx X. Xxxx
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Name: Xxxxxx X. Xxxx
Title: President and Chief
Executive Officer
The Investors: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
/s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
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