Exhibit 99.2
[LOGO]CLEARLAKE CAPITAL
650 Madison Avenue,
23rd Floor
New York, New York 10022
Tel 212.610.9000
August 1, 2007
PERSONAL AND CONFIDENTIAL
GoAmerica, Inc.
433 Hackensack Avenue,
Hackensack, NJ 07601
Attn: Daniel R. Luis, Chief Executive Officer
Re: Second Lien Debt Commitment Letter
Ladies and Gentlemen:
You have advised Clearlake Capital Group, LP (together with the funds and
accounts managed or advised by it, "Clearlake") that GoAmerica, Inc. (together
with its subsidiaries, the "Company"), intends to acquire all or substantially
all of the assets of the Tele Relay Services division of Verizon Communications
Inc. (the "TRS Division" and such acquisition, the "Acquisition") pursuant to a
definitive asset purchase agreement for the Acquisition (the "Acquisition
Agreement"), and that, in addition to the financing for the Acquisition, the
Company also desires to procure financing for additional working capital
purposes and for investments and acquisitions. Upon the terms, and subject to
satisfaction of the conditions, set forth herein, CCP A, L.P., a fund managed by
Clearlake, hereby commits to provide certain debt financing for the Company for
the Company's working capital purposes and to finance investments and
acquisitions other than the Acquisition. The requested financing will be
structured as a $40 million second lien term loan or note issuance (the "Second
Lien Debt Financing") having the terms set forth in Annex A, and will be subject
to the conditions set forth in this letter and in the attached Annexes A and B
hereto (collectively, the "Commitment Letter"). On the date hereof, the parties
hereto (or their affiliates) are also entering into (i) that certain $3,500,000
Credit Agreement (the "Bridge Credit Agreement"), (ii) that certain $1,500,000
Stock Purchase Agreement (the "$1,500,000 Stock Purchase Agreement"), (iii) that
certain $48,500,000 Stock Purchase Agreement (the "$48,500,000 Stock Purchase
Agreement") and (iv) that certain First Lien Debt Commitment Letter (the "First
Lien Debt Commitment Letter" and together with the $1,500,000 Stock Purchase
Agreement, the $48,500,000 Stock Purchase Agreement and the Bridge Credit
Agreement, the "Other Financing Documents").
1. Indemnification; Exclusivity; Commitment Fee.
GoAmerica, Inc.
August 1, 2007
Page 2
(a) The Company agrees to the provisions with respect to Clearlake's
indemnity and other matters set forth in Annex B, which is incorporated by
reference into this Commitment Letter.
(b) Except as expressly permitted by Section 9.5 of the $48,500,000 Stock
Purchase Agreement, the Company hereby agrees to exclusively negotiate the
Second Lien Debt Financing with Clearlake in good faith and will not enter into
any discussions with third parties with respect to the Second Lien Debt
Financing or any other financing for any proposed investment or acquisition
(other than the financings contemplated by the Other Financing Documents) until
the earlier of (A) the execution of definitive agreements evidencing the Second
Lien Debt Financing, and (B) the date this Commitment Letter is terminated.
(c) The Company hereby agrees to pay Clearlake a commitment fee of 1.66%
of the face amount of the Second Lien Debt Financing (the "Commitment Fee"),
which shall be due and payable in full on the date that, following a written
request from the Company that Clearlake provide the Second Lien Debt Financing,
which request has not been revoked in writing, (i) Clearlake has delivered
written notice to the Company that it irrevocably waives the condition set forth
in paragraph 3(f) below (any such notice, a "Waiver Notice") and (ii) the
Company and Clearlake execute the Amended Commitment Letter (as defined herein);
provided that the condition set forth in clause (i) of this paragraph 1(c) shall
be deemed satisfied if the Company and Clearlake have executed an Amended
Commitment Letter in a form that does not include the condition set forth in
paragraph 3(f) below. The Company hereby acknowledges and agrees that the
Commitment Fee shall be fully earned and non-refundable on such date and shall
be in addition to any other fees payable by the Company in connection with the
Second Lien Debt Financing.
2. Obligations.
Clearlake's obligation under this Commitment Letter (but not under the
Definitive Agreement described below) will terminate upon the earlier of (a) the
termination of the $48,500,000 Stock Purchase Agreement by the Company pursuant
to Section 10.1(d)(ii) thereof, and (b) date that is 45 days from the date
hereof. If, prior to the date that is 45 days from the date hereof, the Company
has provided Clearlake with a reasonably detailed written description of the use
of proceeds for the Second Lien Debt Financing and Clearlake has delivered a
Waiver Notice to the Company indicating that such use of proceeds is acceptable
to Clearlake in its sole discretion, the parties agree to work together in good
faith to amend this Commitment Letter to provide for modifications to Sections
1(b), 2 and 3 hereof and to the proposed closing date set forth in Annex A
hereto comparable to the corresponding provisions set forth in the First Lien
Debt Commitment Letter and consistent with the approved use of proceeds (as so
amended, the "Amended Commitment Letter").
3. Conditions.
Clearlake's obligation to provide the Second Lien Debt Financing is subject to
the following conditions:
(a) The Company and Clearlake shall have negotiated, executed and
delivered (or, in the case of clause (3) below, the Company shall
have provided) (1) a definitive debt issuance and sale document with
respect to the Second Lien Debt Financing (the "Definitive
Agreement"), (2) all documents related to the Definitive Agreement,
including without limitation legal opinions, a solvency certificate
from the Company and officers'
GoAmerica, Inc.
August 1, 2007
Page 5
certificates, and (3) corporate records, customary documents from
public officials and customary evidence that the collateral agent
shall have a valid and perfected first priority lien and security
interest in the collateral (the documents referred to in this
paragraph, collectively, the "Second Lien Debt Financing
Documents"), which Second Lien Debt Financing Documents shall be in
form and substance acceptable to Clearlake and its counsel (such
acceptance not to be unreasonably withheld or delayed) and shall be
based upon the Bridge Credit Agreement and the Loan Documents
referenced therein; provided, however, the parties agree that the
terms of the Second Lien Debt Financing Documents will contain
looser "carve-outs" to the covenants to be agreed upon by the
parties;
(b) The closing of the Acquisition in accordance with the Acquisition
Agreement (except to the extent that the Acquisition Agreement is
subsequently amended or any term or condition thereof waived without
Clearlake's consent, such consent not to be unreasonably withheld or
delayed) shall have occurred concurrently with the closing of the
First Lien Debt Financing;
(c) The Company shall have received not less than $48,500,000 in gross
cash proceeds from the Investors under and as defined in the
$48,500,000 Stock Purchase Agreement as a result of the consummation
of the transactions contemplated thereby, including receipt of
shareholder approval for such share issuances (unless the Investors
are in material breach of their obligations under the $48,500,000
Stock Purchase Agreement);
(d) The Company shall have received not less than $30,000,000 in gross
cash proceeds from the consummation of the transactions contemplated
by the First Lien Debt Commitment Letter (unless the lenders are in
material breach of their obligations under the First Lien Debt
Commitment Letter or the definitive documentation contemplated
thereby);
(e) There shall have occurred no material adverse change in the assets,
liabilities, customer or supplier relationships, financial
condition, operations or results of operations of the Company and
the TRS Division taken as a whole, provided, however, in each case,
not including any change that (A) is generally applicable to the
U.S. economy, (B) is generally applicable to Internet protocol data
and voice providers, (C) results from the execution of the
Acquisition Agreement, the announcement of the Acquisition Agreement
or the consummation of the transactions contemplated by the
Acquisition Agreement or (D) relates to changes in generally
accepted accounting principles generally applicable to companies
serving as Internet protocol data and voice providers occurring
after the date of the Acquisition Agreement, and there shall exist
no action, suit, investigation, litigation or proceeding pending or
threatened that (i) would reasonably be expected to have a material
adverse effect on the assets, liabilities, customer or supplier
relationships, financial condition, operations or results of
operations of the Company and the TRS Division taken as a whole,
(ii) would be of the type described in Section 6.1.2 of the
Acquisition Agreement, or (iii) are for the purpose of enjoining or
preventing the Second Lien Debt Financing;
GoAmerica, Inc.
August 1, 2007
Page 4
(f) The Company shall have provided Clearlake with a reasonably detailed
written description of the use of proceeds for the Second Lien Debt
Financing and Clearlake shall be satisfied, in its sole discretion,
with such use of proceeds; and
(g) If the proceeds of the Second Lien Debt Financing are to be used in
whole or in part for an investment or acquisition, each of the
closing conditions set forth in the definitive documentation for
such transaction shall have been satisfied (unless waived with
Clearlake's consent, such consent not to be unreasonably withheld)
and such investment or acquisition shall be consummated
substantially simultaneously with the closing of the Second Lien
Debt Financing pursuant to definitive documentation for such
transaction in form and substance satisfactory to Clearlake.
4. Miscellaneous.
Except for the integration of Section 9.5 of the $48,500,000 Stock Purchase
Agreement, the provisions of Sections 1 and 4 hereof shall remain in full force
and effect unless otherwise specifically stated in the definitive documentation
for the Second Lien Debt Financing that is executed and delivered, and
notwithstanding the termination of this Commitment Letter or any commitment or
undertaking hereunder.
This Commitment Letter shall not be assignable by the Company without
Clearlake's prior written consent (and any purported assignment without such
consent shall be null and void), is intended to be solely for the benefit of the
parties hereto and is not intended to confer any benefits upon, or create any
rights in favor of, any person other than the parties hereto. This Commitment
Letter may not be amended or any term or provision hereof waived or modified
except by an instrument in writing signed by each of the parties hereto.
This letter agreement shall be governed by the internal laws of the State of New
York, without regard to conflict of laws principles, except for applicable
Federal law.
EACH OF THE PARTIES TO THIS LETTER AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS LETTER AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO
THE SUBJECT MATTER OF THIS LETTER AGREEMENT.
Clearlake hereby notifies the Company that pursuant to the requirements of the
USA PATRIOT Act, Title III of Pub. L. 107-56 (signed into law October 26, 2001)
(the "Act"), Clearlake and each other investor party (each an "Investor") to the
definitive Second Lien Debt Financing Documents are required to obtain, verify
and record information that identifies the Company, which information includes
the Company's name and address and other information that will allow Clearlake
and the Investors to identify the Company in accordance with the Act. This
notice is given in accordance with the requirements of the Act and is effective
for Clearlake and each other Investor.
Please note that neither Clearlake nor any of its affiliates provides
accounting, tax or legal advice. Notwithstanding anything herein to the
contrary, Clearlake (and each of its members, officers, directors, employees,
affiliates, agents, advisors and attorneys) may disclose to any and all persons,
without limitation of any kind, the tax treatment and tax structure of this
potential transaction and all materials of
GoAmerica, Inc.
August 1, 2007
Page 5
any kind (including tax opinions or other tax analyses) that are provided to
Clearlake relating to such tax treatment and tax structure. However, the
foregoing sentence shall not apply to any information relating to the tax
treatment or tax structure to the extent nondisclosure of such information is
reasonably necessary to enable any person to comply with applicable securities
laws. For this purpose, "tax treatment" means U.S. federal income tax treatment,
and "tax structure" is limited to any facts relevant to the U.S. federal tax
treatment of the Second Lien Debt Financing.
This Commitment Letter may be executed in any number of counterparts, each of
which when executed shall be an original, and all of which, when taken together,
shall constitute one agreement. Delivery of an executed counterpart of a
signature page of this Commitment Letter by facsimile transmission shall be
effective as delivery of a manually executed counterpart hereof. This Commitment
Letter is the only agreement that has been entered into among the parties hereto
with respect to the Second Lien Debt Financing and sets forth the entire
understanding of the parties with respect thereto and supersedes any prior
written or oral agreements among the parties hereto with respect to the Second
Lien Debt Financing.
THIS COMMITMENT LETTER REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.
[Remainder of page intentionally left blank]
Please confirm that the foregoing is in accordance with your understanding by
signing and returning to Clearlake the enclosed copy of this Commitment Letter,
whereupon this Commitment Letter shall become a binding agreement between us.
Notwithstanding the foregoing, this letter shall be void if not signed and
returned by you by 11:59 pm New York time on August 2, 2007. We look forward to
working with you on this assignment.
Very truly yours,
CCP A, L.P.
By: Clearlake Capital Partners, LLC
Its: General Partner
By: CCG Operations, LLC
Its: Managing Member
By: /s/ Behdad Eghbali
------------------
Name: Behdad Eghbali
Title:
Accepted as of the date above:
GOAMERICA, INC.
By: /s/ Daniel R. Luis
------------------
Name: Daniel R. Luis
Title: Chief Executive Officer
ANNEX A
GOAMERICA, INC.
SUMMARY OF TERMS AND CONDITIONS
This Summary of Terms and Conditions of the Proposed Second Lien Debt Financing
does not purport to summarize all the terms, conditions, representations,
warranties and other provisions with respect to the transactions referred to
herein. Certain capitalized terms used herein are defined in the Commitment
Letter.
Terms of the Second Lien Debt
Financing
Issuer: GoAmerica, Inc. ("GOAM", or the "Issuer").
Guarantors: All of GOAM's direct and indirect domestic
subsidiaries, other than non-material subsidiaries
(determined on a basis consistent with the terms
of the Bridge Credit Agreement).
Notes/Loan: Senior secured notes or a senior secured loan in
the principal amount of $40,000,000 (the "Second
Lien Debt").
Security: The Second Lien Debt will be secured by perfected
second priority pledges of all of the equity
interests of GOAM's direct and indirect domestic
subsidiaries other than the non-material
subsidiaries referenced above (GOAM and such
subsidiaries, collectively, the "Loan Parties"),
and perfected second priority security interests
in and mortgages on all tangible and intangible
assets (including, without limitation, accounts
receivable, inventory, equipment, general
intangibles, intercompany notes, insurance
policies (other than directors and officers
liability insurance policies), investment
property, intellectual property, real property,
cash and proceeds of the foregoing) of the Loan
Parties, wherever located, now or hereafter owned,
subject to such exceptions as are agreed.
Proposed Closing Date: To be determined.
Maturity: One week before the date that is five years from
the closing of the Second Lien Debt Financing.
Interest Rate: LIBOR + 900 bps per annum, payable quarterly in
cash.
Ranking: GOAM will ensure that its obligations with respect
to the Second Lien Debt will at all times
constitute general, direct,
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unsubordinated and unconditional obligations of
the Loan Parties ranking at all times at least
pari passu in priority of payment, and senior in
right of security and in all other respects, with
other senior indebtedness of GOAM now or hereafter
outstanding; provided that the Second Lien Debt
will be subordinated in right of security only to
the indebtedness contemplated by the First Lien
Debt Commitment Letter pursuant to an
intercreditor agreement in form and substance
reasonably satisfactory to the Lenders.
Amortization: None, bullet at Maturity.
Prepayment Premium: 102% during year 1 following issuance; 101% during
years 2 through 4 following issuance; and no
prepayment premium thereafter.
Covenants: The type of covenants will be customary for
transactions of this nature, including, but not
limited to, a limitation on debt incurrence,
limitation on sale of assets, restricted payments
and investments, consolidations, mergers and
change of control, issuance of subsidiary
securities, joint ventures and transactions with
affiliates.
The documents governing the Second Lien Debt will
also contain covenants requiring that the Company
maintain:
o Minimum Liquidity of $5 million at all times,
o Maximum CapEx in any fiscal year (excluding
capitalized labor) equal to the greater of
$1.5 million or 20% of prior year's EBITDA;
and
o Maximum Total Leverage Ratio (Total Debt to
Pro-Forma Adjusted EBITDA) of 3.5x, which
covenant shall be tested quarterly from and
after Q1 2009 on a TTM basis.
Use of Proceeds: General working capital purposes of GOAM and
investments and acquisitions, all as approved by
Clearlake in its sole discretion (as set forth in
the Commitment Letter).
Governing Law: The agreements contemplated hereby shall be
governed by the internal laws of the State of New
York, without regard to conflicts of laws
principles.
Assignability: Clearlake and its assignees and transferees may
assign or transfer their interests in the Second
Lien Debt Financing at their discretion (i) to
Reservoir Capital Group, L.L.C. and its affiliates
and affiliates of Clearlake, without the consent
of GOAM, (ii) in connection with the primary
syndication of the
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Second Lien Debt Financing, without the consent of
GOAM (provided, however, that Clearlake shall
remain primarily and fully liable hereunder if the
conditions set forth herein are satisfied and, for
any reason, such syndication does not provide the
financing contemplated hereunder), and (iii)
otherwise, with the consent of GOAM, which consent
shall not be unreasonably withheld, conditioned or
delayed; provided that GOAM's consent to any such
assignment or transfer shall not be required
following the occurrence and during the
continuance of a default or event of default under
the Second Lien Debt Financing Documents.
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ANNEX B
In the event that Clearlake becomes involved involuntarily in any capacity in
any action, proceeding or investigation brought by or against any person,
including stockholders or other equity holders of the Company, in connection
with the transactions contemplated by this Commitment Letter (the "Letter"), the
Company periodically will reimburse Clearlake for its reasonable legal and other
expenses (including the cost of any investigation and preparation) incurred in
connection therewith. The Company also will indemnify and hold Clearlake
harmless against any and all losses, claims, damages or liabilities to any such
person in connection with the transactions contemplated by the Letter, and
without regard to the exclusive or contributory negligence of Clearlake or its
affiliates, or the members, directors, agents, employees and controlling persons
(if any), as the case may be, of Clearlake and any such affiliate, except to the
extent that a court shall have found (in a judgment not subject to further
appeal or for which the time for appeal has expired) that any such loss, claim,
damage or liability results from the bad faith, gross negligence or willful
misconduct of Clearlake in performing obligations that are the subject of the
Letter. If for any reason the foregoing indemnification is unavailable to
Clearlake or is insufficient to hold it harmless, then the Company shall
contribute to the amount paid or payable by Clearlake as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect the
relative economic interests of the Company and its stockholders or other equity
holders on the one hand and Clearlake on the other hand in the matters
contemplated by the Letter as well as the relative fault of the Company and
Clearlake with respect to such loss, claim, damage or liability and any other
relevant equitable considerations. The reimbursement, indemnity and contribution
obligations of the Company under this paragraph shall be in addition to any
liability which the Company may otherwise have, shall extend upon the same terms
and conditions to any affiliate of Clearlake and the members, directors, agents,
employees and controlling persons (if any), as the case may be, of Clearlake and
any such affiliate, and shall be binding upon and inure to the benefit of any
successors, assigns, heirs and personal representatives of the Company,
Clearlake, any such affiliate and any such person. The Company also agrees that
neither any indemnified party nor any of such affiliates, partners, directors,
agents, employees or controlling persons shall have any liability based on its
or their exclusive or contributory negligence or otherwise to the Company or any
person asserting claims on behalf of or in right of the Company or any other
person in connection with the transactions contemplated by the Letter except to
the extent that a court shall have found (in a judgment not subject to further
appeal or for which the time for appeal has expired) that any losses, claims,
damages, liabilities or expenses incurred by the Company resulted from the bad
faith, gross negligence or willful misconduct of such indemnified party in
performing the services that are the subject of the Letter; provided, however,
that in no event shall such indemnified party or such other parties have any
liability for any indirect, consequential or punitive damages in connection with
or as a result of such indemnified party's or such other parties' activities
related to the Letter.
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