EXHIBIT 4.4
The securities represented hereby may not be transferred unless (i)
such securities have been registered for sale pursuant to the Securities Act of
1933, as amended, (ii) such securities may be sold pursuant to Rule 144(k), or
(iii) the Company has received an opinion of counsel reasonably satisfactory to
it that such transfer may lawfully be made without registration under the
Securities Act of 1933 or qualification under applicable state securities laws.
10% SENIOR SECURED CONVERTIBLE PROMISSORY NOTE
$__________ Maturity Date:
Issue Date: December 19, 2003 March 18, 2004
FOR VALUE RECEIVED, GoAmerica, Inc. (the "Company") hereby promises to
pay to the order of ________________________ or its successors, assigns and
legal representatives (the "Holder"), at ___________________________, or at such
other location as the Holder may designate from time to time, the aggregate
principal sum of $______________ (___________ Dollars), in lawful money of the
United States of America, together with interest thereon at a rate of 10.0% per
annum.
1. Company Notes. This Note (the "Note") is one of a series of Notes
(the "Company Notes") of like tenor in an aggregate principal amount of
$1,015,000 (One Million Fifteen Thousand Dollars) issued by the Company pursuant
to the terms of the Purchase Agreement, dated of even date herewith (the
"Purchase Agreement"), among the Company and the investors party thereto.
Capitalized terms used herein shall have the respective meanings ascribed
thereto in the Purchase Agreement unless otherwise defined herein.
2. Maturity Date. The aggregate principal amount of this Note and
accrued interest thereon shall be due and payable on March 18, 2004 (the
"Maturity Date"). The Maturity Date may be extended for up to 30 days upon the
written consent of the Company and the Majority Holders (as defined below),
which consent shall not be unreasonably withheld.
3. Calculation and Payment of Interest. Interest hereunder shall be
calculated on the basis of a 360-day year for the actual number of days elapsed.
Interest shall be calculated on a simple interest basis and shall accrue daily
and be payable on the Maturity Date. Interest shall be paid by the issuance to
the Holder within two (2) business days of an interest payment date of a number
(rounded downward to the nearest whole share) of newly issued, fully paid and
non-assessable shares (the "Interest Shares") of the Company's common stock, par
value $0.01 per share ("Common Stock"), equal to the interest amount owed
divided by the Share Price (as defined below). The Company shall reserve a
sufficient number of duly authorized but unissued shares of Common Stock to meet
its obligations under this Section 3. If the Company fails to pay any amount
hereunder when due, whether on the Maturity Date, upon acceleration or
otherwise, and such failure continues for a period of five (5) business days or
more, interest shall thereafter accrue on any overdue amounts at a rate of 14%
per annum until paid in full. Any such overdue interest shall be payable upon
demand in cash. As defined herein, "Share Price" means the Purchase Price per
share at which the Company has agreed to issue shares of Common Stock pursuant
to the terms of the Purchase Agreement (appropriately adjusted for any stock
split, reverse stock split, stock dividend or other reclassification or
combination of the Common Stock occurring after the date hereof).
4. Prepayment. The Company may not prepay this Note at any time without
the prior written consent of the Majority Holders. Any such prepayment shall be
made on not less than 15 days prior written notice provided to the Holder
hereof. Any permitted prepayments hereunder shall be applied first, to the
payment of any expenses then owed to the Holder, second, to accrued interest on
this Note and third, to the payment of the principal amount outstanding under
this Note. The Company shall not have the right to set off or otherwise deduct
from amounts payable by it hereunder any amounts whether liquidated or
unliquidated, which the Holder or any of its affiliates may owe to the Company,
which right is hereby expressly waived to the maximum extent permitted by
applicable law.
5. Conversion.
(a) At any time on or prior to the Maturity Date, the Holder
shall have the right to convert all, but not less than all, of the principal of
and accrued interest on this Note into a number (rounded down in the case of any
fractional shares) of fully paid and non-assessable shares of Common Stock
("Conversion Shares") equal to the amount being converted divided by the Share
Price.
(b) To effect the conversion of this Note, the Holder shall
surrender this Note to the Company together with a written notice of conversion
specifying the date on which such conversion is to be effected, which date may
not be less than two business days after the date of such notice, unless the
Company consents to an earlier date (such date, the "Conversion Date") and a
representation letter to the Company containing customary private placement
representations and warranties so that the issuance of the shares of Common
Stock upon conversion of this Note shall be exempt from registration under the
Securities Act of 1933, as amended. The Company shall issue to the Holder the
shares of Common Stock into which this Note has been converted, registered on
the books of the Company in the name of the Holder or its nominee within three
business days of the Conversion Date in the case of electronic delivery of the
Conversion Shares (if permitted by the Company's transfer agent), or five
business days of the Conversion Date in the case of physical delivery, and, in
the case of physical delivery, shall mail the certificate(s) representing such
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shares to the Holder at the address specified by the Holder. From and after the
Conversion Date, the Holder shall be treated for all purposes as the owner of
the shares of Common Stock into which this Note has been converted and the
certificate(s) for such shares shall be issued as of the Conversion Date. As
used herein, "business day" means a day, other than a Saturday or Sunday, on
which commercial banks in New York City are open for the general transaction of
business.
(c) Notwithstanding the other provisions of this Section 5,
the principal of and accrued but unpaid interest on this Note shall
automatically be converted into fully paid and non-assessable shares of Common
Stock at the Share Price without any action on the part of the Holder upon
consummation of the Closing.
(d) The Company shall, prior to any conversion of this Note by
the Holder or any automatic conversion of this Note pursuant to Section 5(c),
have reserved a sufficient number of duly authorized shares of Common Stock to
satisfy the conversion rights granted to the Holder hereunder.
6. Covenants. The Company agrees that, so long as any amount payable
under this Note remains unpaid, except as otherwise disclosed on Schedule 4.3 to
the Purchase Agreement, it will not, and will cause its Subsidiaries (as such
term is defined in the Purchase Agreement) not to, without the prior written
consent of the Majority Holders:
(a) create, incur, guarantee, issue, assume or in any manner
become liable in respect of, any obligation (i) for borrowed money, other than
trade payables incurred in the ordinary course of business, (ii) evidenced by
bonds, debentures, notes, or other similar instruments, (iii) in respect of
letters of credit or other similar instruments (or reimbursement obligations
with respect thereto), except letters of credit or other similar instruments
issued to secure payment of trade payables arising in the ordinary course of
business consistent with past practices, (iv) to pay the deferred purchase price
of property or services, except trade payables arising in the ordinary course of
business consistent with past practices, (v) as lessee under capitalized leases,
(vi) secured by a Lien (as defined below) on any asset of the Company or a
Subsidiary, whether or not such obligation is assumed by the Company or such
Subsidiary and (vii) of any other person or entity, other than indebtedness for
borrowed money existing on the date of this Note or other obligations or other
liabilities incurred in connection with Liens permitted to be incurred under
Section 6(b)(vi) or 6(b)(vii) hereof;
(b) create, incur, assume or suffer to exist any lien, claim,
pledge, charge, security interest or encumbrance of any kind ("Liens") on any
asset now owned or hereafter acquired by it, except:
(i) Liens existing on the date hereof;
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(ii) Liens for taxes or assessments and similar
charges either (x) not delinquent or (y) contested in good faith by appropriate
proceedings and as to which the Company shall have set aside on its books
adequate reserves;
(iii) Liens incurred or pledges and deposits in
connection with workers' compensation, unemployment insurance and other social
security benefits, or securing the performance bids, tenders, leases, contracts
(other than for the repayment of borrowed money), statutory obligations,
progress payments, surety and appeal bonds and other obligations of like nature,
incurred in the ordinary course of business;
(iv) Liens imposed by law, such as mechanics',
carriers', warehousemen's, materialmen's and vendors' Liens, incurred in good
faith in the ordinary course of business;
(v) zoning restrictions, easements, licenses,
covenants, reservations, restrictions on the use of real property or minor
irregularities of title incident thereto which do not in the aggregate
materially detract from the value of the property or assets of the Company and
its Subsidiaries taken as a whole or impair the use of such property in the
operation of the Company's or its Subsidiaries' businesses;
(vi) Liens incurred or assumed which are either
purchase money Liens upon or in any property acquired or Liens in connection
with capital lease transactions in the ordinary course of business; and
(vii) other Liens incidental to the conduct of the
business of the Company or a Subsidiary or the ownership of its or their
respective property and assets which were not incurred in connection with the
borrowing of money, and which do not in the aggregate materially detract from
the value of its property or assets; or
(c) declare or make any (i) any dividend, distribution or
other payment on any capital stock or (ii) any payment on account of the
purchase, redemption, retirement or acquisition of (A) any capital stock or (B)
any option, warrant or other right to acquire capital stock.
7. Events of Default. Each of the following shall constitute an "Event
of Default" hereunder:
(a) The Company shall fail to pay the principal amount of this
Note and accrued interest thereon when due and payable (whether at the Maturity
Date, upon acceleration or otherwise);
(b) The Company shall fail to pay any other amount under this
Note or any amounts under the Pledge Agreement when due and payable (whether at
the maturity date therefor, upon acceleration or otherwise) and such failure
shall continue for a period of five (5) business days;
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(c) The Company shall fail to observe or perform any of the
covenants set forth in Section 6 hereof or Section 4 of the Pledge Agreement;
(d) The Company shall fail to observe or perform any other
covenant or agreement contained in this Note or the other Transaction Documents
and such failure shall continue for a period of thirty (30) days after receipt
of notice thereof from the Holder or its agent;
(e) Any representation or warranty made by the Company in the
Transaction Documents shall have been untrue or misleading in any material
respect when made;
(f) The Company fails to make a required payment or payments
on indebtedness for borrowed money of Twenty-Five Thousand Dollars ($25,000) or
more in aggregate principal amount;
(g) There shall have occurred an acceleration of the stated
maturity of any indebtedness for borrowed money of the Company or any Subsidiary
of Twenty-Five Thousand Dollars ($25,000) or more in aggregate principal amount
(which acceleration is not rescinded, annulled or otherwise cured within ten
(10) days of receipt by the Company or such Subsidiary of notice of such
acceleration);
(h) Any material covenant, agreement or obligation of the
Company in the Pledge Agreement shall cease to be enforceable, or shall be
determined to be unenforceable in any material respect; or any of the security
interests granted pursuant to the Pledge Agreement shall be determined to be
void, voidable, invalid or unperfected, are subordinated or are ineffective to
provide the Holder with a perfected, first priority security interest in the
collateral covered by the Pledge Agreement;
(i) The Company shall sell, transfer, lease or otherwise
dispose of all or any substantial portion of its assets in one transaction or a
series of related transactions, participate in any share exchange, consummate
any recapitalization, reclassification, reorganization or other business
combination transaction or adopt a plan of liquidation or dissolution or agree
to do any of the foregoing, except as may be deemed to occur as a result of the
financing contemplated by the Purchase Agreement;
(j) One or more judgments in an aggregate amount in excess of
Twenty-Five Thousand Dollars ($25,000) shall have been rendered against the
Company or any Subsidiary and such judgment or judgments remain undischarged or
unstayed for a period of sixty (60) days after such judgment or judgments become
or became, as the case may be, final and unappealable;
(k) The Company shall have applied for or consented to the
appointment of a custodian, receiver, trustee or liquidator, or other
court-appointed fiduciary of all or a substantial part of its properties; or a
custodian, receiver, trustee or liquidator or other court appointed fiduciary
shall have been appointed with or without the consent of the Company; or the
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Company is generally not paying its debts as they become due by means of
available assets, or has made a general assignment for the benefit of creditors;
or the Company files a voluntary petition in bankruptcy, or a petition or an
answer seeking reorganization or an arrangement with creditors or seeking to
take advantage of any insolvency law, or an answer admitting the material
allegations of a petition in any bankruptcy, reorganization or insolvency
proceeding or has taken action for the purpose of effecting any of the
foregoing; or if, within sixty (60) days after the commencement of any
proceeding against the Company seeking any reorganization, rehabilitation,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under the Federal bankruptcy code or similar order under future similar
legislation, the appointment of any trustee, receiver, custodian, liquidator, or
other court-appointed fiduciary of the Company or of all or any substantial part
of its properties, such order or appointment shall not have been vacated or
stayed on appeal or otherwise or if, within sixty (60) days after the expiration
of any such stay, such order or appointment shall not have been vacated
(collectively, "Insolvency Events"); or
(l) Any Insolvency Event shall have occurred with respect to
any Subsidiary.
Upon the occurrence of any Event of Default, the Holder may,
at its option, declare all amounts due hereunder to be due and payable
immediately and, upon any such declaration, the same shall become and be
immediately due and payable. If an Insolvency Event occurs with respect to the
Company or any Subsidiary, then all amounts due hereunder shall become
immediately due and payable without any declaration or other act on the part of
the Holder. Upon the occurrence of any Event of Default, the Holder may, in
addition to declaring all amounts due hereunder to be immediately due and
payable, pursue any available remedy, whether at law or in equity, including,
without limitation, exercising its rights under the Pledge Agreement. If an
Event of Default occurs, the Company shall pay to the Holder the reasonable
attorneys' fees and disbursements and all other reasonable out-of-pocket costs
incurred by the Holder in order to collect amounts due and owing under this Note
or otherwise to enforce the Holder's rights and remedies hereunder and under the
Pledge Agreement.
8. Secured Obligation. This Note is one of the Notes referred to in the
Pledge Agreement and is secured by the collateral described therein
(collectively, the "Collateral"). The Pledge Agreement grants the Holder certain
rights with respect to the Collateral upon an Event of Default.
9. Reimbursement of Expenses. In addition to its other obligations
hereunder, not later than the close of business on the date hereof or one (1)
business day after receipt of an invoice therefor, the Company shall reimburse
the holders of the Company Notes for the fees and disbursements of only one
counsel in connection with the preparation, negotiation and execution of this
Note and the other Transactions Documents, subject to a cap of $25,000.
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10. Waiver of Presentment, Demand and Dishonor. The Company hereby
waives presentment for payment, protest, demand, notice of protest, notice of
non-payment and diligence with respect to this Note, and waives and renounces
all rights to the benefit of any statute of limitations or any moratorium,
appraisement, exemption or homestead now provided or that hereafter may be
provided by any federal or applicable state statute, including but not limited
to exemptions provided by or allowed under the Federal Bankruptcy Code, both as
to itself and as to all of its property, whether real or personal, against the
enforcement and collection of the obligations evidenced by this Note and any and
all extensions, renewals and modifications hereof.
No failure on the part of the Holder hereof to exercise any right or
remedy hereunder with respect to the Company, whether before or after the
happening of an Event of Default, shall constitute a waiver of any future Event
of Default or of any other Event of Default. No failure to accelerate the debt
of the Company evidenced hereby by reason of an Event of Default or indulgence
granted from time to time shall be construed to be a waiver of the right to
insist upon prompt payment thereafter; or shall be deemed to be a novation of
this Note or a reinstatement of such debt evidenced hereby or a waiver of such
right of acceleration or any other right, or be construed so as to preclude the
exercise of any right the Holder may have, whether by the laws of the state
governing this Note, by agreement or otherwise; and the Company hereby expressly
waives the benefit of any statute or rule of law or equity that would produce a
result contrary to or in conflict with the foregoing.
11. Amendment; Waiver. Any term of this Note may be amended or waived
upon the written consent of the Company and the holders of Company Notes
representing at least 50% of the principal amount of Company Notes then
outstanding (the "Majority Holders"); provided, that (x) any such amendment or
waiver must apply to all outstanding Company Notes; and (y) without the consent
of the Holder hereof, no amendment or waiver shall (i) subject to Section 2
hereof, change the Maturity Date of this Note, (ii) reduce the principal amount
of this Note or the interest rate due hereon, (iii) change the conversion price
of this Note or (iv) change the place of payment of this Note. No such waiver or
consent on any one instance shall be construed to be a continuing waiver or a
waiver in any other instance unless it expressly so provides.
12. Transfers. The Holder shall have the right to transfer this Note or
any interest herein in any transaction meeting the requirements of applicable
securities laws.
13. Governing Law; Consent to Jurisdiction. This Note shall be binding
upon the Company and its successors, assigns and legal representatives. The
validity, construction and interpretation of this Note will be governed, and
construed in accordance with, the laws of the State of New York. EACH OF THE
COMPANY AND, BY ITS ACCEPTANCE HEREOF, THE HOLDER HEREBY WAIVES ANY RIGHT TO
REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS NOTE AND
REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.
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Each of the Company and, by its acceptance of this Note, the Holder
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 Note and the transactions
contemplated hereby. Service of process in connection with any such suit, action
or proceeding may be served on the Company and the Holder anywhere in the world
by the same methods as are specified for the giving of notices under the
Purchase Agreement. Each of the Company and, by its acceptance of this Note, the
Holder 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 of the
Company and, by its acceptance of this Note, the Holder 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.
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ATTEST: GOAMERICA, INC.
/s/ Wayne D. Smith By: /s/ Daniel R. Luis
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Name: Wayne D. Smith Name: Daniel R. Luis
Title: Chief Executive Officer
Dated: December 19, 2003
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