Exhibit 10.4

FORBEARANCE AGREEMENT AND FOURTH AMENDMENT TO THE SECOND LIEN CREDIT AGREEMENT

This FORBEARANCE AGREEMENT AND FOURTH AMENDMENT TO THE SECOND LIEN CREDIT
AGREEMENT (the “Agreement”) is made and entered into as of November 4, 2009, by
and among the Lenders identified on the signature pages hereof (such lenders,
together with their respective successors and permitted assigns, are referred to
hereinafter each individually as a “Lender” and collectively as the “Lenders”),
Purple Communications, Inc. (f/k/a GoAmerica, Inc.), a Delaware corporation
(“Borrower”), the other Loan Parties signatory hereto and Clearlake Capital
Group, L.P. as administrative agent for the Lenders (in such capacity, and
together with its successors and permitted assigns, the “Administrative Agent”).

W I T N E S S E T H

WHEREAS, Borrower, the other Loan Parties signatory hereto, Administrative Agent
and the Lenders are parties to that certain Second Lien Credit Agreement, dated
as of January 10, 2008 (as amended, restated, supplemented or otherwise modified
from time to time prior to the date hereof, the “Second Lien Credit Agreement”):

WHEREAS. Borrower has requested to pay in kind interest due and payable on the
Loan from July 1, 2009 through June 30, 2010 (such period, the “PIK Interest
Period”), and the Administrative Agent and Required Lenders have agreed to
accommodate such request;

WHEREAS, the Lenders have agreed to refund to Borrower cash interest actually
paid by Borrower to the Lenders in the amount of $735,000 (such amount, the
“Cash Interest Refund”); and

WHEREAS, the Specified Events of Default (as defined below) have occurred and
are continuing under the Second Lien Credit Agreement and Borrower, the Loan
Parties, Administrative Agent and Required Lenders have agreed to enter into
this Agreement as a result of the Specified Events of Defaults and Borrower and
the other Loan Parties request that Administrative Agent and Lenders forbear
from exercising their rights and remedies in respect of the Specified Events of
Default, all in the manner and on the terms and conditions provided for herein.

NOW THEREFORE, in consideration of the promises and for other good and valuable
consideration, the receipt, adequacy and sufficiency of which are hereby
acknowledged, the Loan Parties, Administrative Agent and Required Lenders hereby
agree as follows:

1. Definitions. Capitalized terms not otherwise defined herein (including in the
Recitals hereto) shall have the meanings ascribed to them in the Second Lien
Credit Agreement.

2. Existing Events of Default; Remedies. Each of Borrower and the other Loan
Parties acknowledges and agrees that the following Defaults and Events of
Defaults (collectively, the “Specified Events of Default”) have occurred and are
continuing under Sections 9.1(c)(i) and 9.1(d)(ii) of the Second Lien Credit
Agreement: (i) Borrower’s breach of the financial covenant set forth in
Section 5.1 of the Second Lien Credit Agreement for the Fiscal Quarter ending
September 30, 2009) and Section 5.2 of the Second Lien Credit Agreement for the
Fiscal Year ending December 31, 2009, (ii) Borrower’s breach of Section 6.1(a)
of the Second Lien Credit Agreement for the Fiscal month ending August 31, 2009
due to Borrower’s failure to deliver the certifications required to be delivered
to Administrative Agent pursuant to such Section 6.1(a), (iii) Borrower’s breach
of the financial covenant set forth in Section 5.1 of the First Lien Credit
Agreement for the Fiscal Quarter ending September 30, 2009 and Section 5.2 of
the First Lien Credit Agreement for the Fiscal Year ending December 31, 2009,
and (iv) Borrower’s breach of Section 6.1(a) of the First Lien Credit Agreement
for the fiscal month ending August 31, 2009 due to Borrower’s failure to deliver
the certifications required to be delivered to the First Lien Agents pursuant to
such Section 6.1(a). Each of the Borrower and the other Loan Parties
acknowledges and agrees that Administrative Agent and the Lenders have not
waived, and are not in a position at this time to waive, the Specified Events of
Default or any other defaults or Events of Defaults that may exist and any such
waiver, if any, shall be granted only by a written instrument executed and
delivered in accordance with the provisions of Section 11.1 of the Second Lien
Credit Agreement.

 

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Each of the Borrower and the other Loan Parties acknowledges and agrees that as
a result of the Specified Events of Default (a) neither Borrower nor any other
Loan Parties shall take any action that is prohibited by the Second Lien Credit
Agreement; during a Default or Event of Default, including, without limitation,
making any Restricted Payments pursuant to Section 8.5(d) of the Second Lien
Credit Agreement, (b) subject to Section 5 hereof, Administrative Agent and the
Lenders have the immediate right to exercise any and all rights and remedies
under the Second Lien Credit Agreement and the other Loan Documents including,
without limitation, the right to declare all or any portion of the Obligations
to be immediately due and payable and (c) any current or any further
non-exercise of other rights, remedies, powers and privileges under the Loan
Documents, with respect to any of the Specified Events of Default or any other
Defaults or Events of Default (whether now existing or hereafter occurring) by
Administrative Agent and the Lenders shall not be, and shall not be construed
as, a waiver thereof. Subject to Section 5 hereof, the Administrative Agent and
the Lenders reserve their right to fully invoke any and all or their rights,
remedies, powers or privileges under the Second Lien Credit Agreement and all
other Loan Documents, at any time as they deem appropriate in respect of any of
the Specified Events of Default or any other Defaults or Events of Default that
may now or hereafter exist.

3. Amendments to Second Lien Credit Agreement.

(a) Section 1.1 of the Second Lien Credit Agreement is hereby amended as of the
Forbearance Effective Date (as hereinafter defined) by:

(i) inserting the following defined terms into Section 1.1 of the Second Lien
Credit Agreement in proper alphabetical order:

“‘Amendment No. 4’ means the Forbearance Agreement and Fourth Amendment to the
Second Lien Credit Agreement, dated as of November 4, 2009 by and among the
Borrower, the Lenders party thereto and Administrative Agent, which Amendment
No. 4 amends this Agreement.”

“‘Forbearance Effective Date’ has the meaning given thereto in Amendment No. 4.”

“‘PIK’ has the meaning given thereto in Section 2.9(b).”

“‘PIK Interest Period’ has the meaning given thereto in Amendment No. 4.”

(ii) amending the definition of “Applicable Margin” by deleting such definition
in its entirety and substituting in lieu thereof the following new definition:

“‘Applicable Margin’ means (a) 13.5% during the PIK Interest Period and (b) 9%
otherwise.”

(iii) Amending the definition of “Eurodollar Base Rate” by deleting such
definition in its entirety and substituting in lieu thereof the following new
definition:

“‘Eurodollar Base Rate’ means, with respect to any Interest Period for any
Eurodollar Rate Loan, the rate determined by the Administrative Agent to be the
offered rate for deposits in Dollars for an Interest Period of one month
(notwithstanding which Interest Period is selected) appearing on the Reuters
Screen LIBOR01 Page as of 11:00 a.m. (London time) on the second full Business
Day next preceding the first day of each Interest Period. In the event that such
rate does not appear on the Reuters Screen LIBOR01 Page (or otherwise on the
Reuters screen) at such time, the “Eurodollar Base Rate” shall be determined by
reference to such other comparable publicly available service for displaying the
offered rate for deposit in Dollars in the London interbank market as may be
selected by the Administrative Agent and, in the absence of availability, such
other method to determine such offered rate as may be selected by the
Administrative Agent in its sole discretion.”

 

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(b) Section 2.1 of the Second Lien Credit Agreement is hereby amended as of the
Forbearance Effective Date (as hereinafter defined) by deleting such Section 2.1
in its entirety and substituting in lieu thereof the following new Section 2.1:

“Section 2.1 The Commitments. On the terms and subject to the conditions
contained in this Agreement, each Lender, severally but not jointly, agrees to
make a loan (including any PIK interest paid hereunder) (each, a “Loan”) in
Dollars to the Borrower on the Closing Date, in an amount not to exceed such
Lender’s Commitment. Amounts of Loans repaid may not be reborrowed. The
aggregate amount of the Commitments on the Forbearance Effective Date equals
$30,000,000 plus applicable PIK interest.”

(c) Section 2.9(b) of the Second Lien Credit Agreement is hereby amended as of
the Forbearance Effective Date (as hereinafter defined) by deleting such
Section 2.9(b) in its entirety and substituting in lieu thereof the following
new Section 2.9(b):

“(b) Payments. Interest accrued shall be payable in arrears (x) during the PIK
Interest Period, in kind (“PIK”) in the form of additional Loans (valued at 100%
of the face amount thereof, which shall be rounded upward to the nearest $1.00),
it being understood that such PIK interest shall never be payable in cash and
(y) in cash at all other times (i) if accrued on the principal amount of any
Loan, (A) at maturity (whether by acceleration or otherwise), (B) upon the
payment or prepayment of the principal amount on which such interest has accrued
and (C) on the last day of each Interest Period applicable to such Loan, and, if
applicable, on each date during such Interest Period occurring every 3 months
from the first day of such Interest Period and (ii) if accrued on any other
Obligation, on demand from Administrative Agent after the time such Obligation
is due and payable (whether by acceleration or otherwise).”

4. Default Rate of Interest. Pursuant to Section 2.9(c) of the Second Lien
Credit Agreement, all unpaid Obligations (including any Obligation that bears
interest by reference to the rate applicable to any other Obligation) shall bear
interest from September 30, 2009 and for so long as any Specified Event of
Default or any other Event of Default exists at a rate that is 2% per annum in
excess of the interest applicable to such Obligations from time to time, payable
on demand.

5. Forbearance. Without limiting Sections 2 and 4 of this Agreement,
Administrative Agent and Required Lenders hereby agree as of the Forbearance
Effective Date to forbear from exercising any rights or remedies under the Loan
Documents arising solely out of the Specified Events of Default until the date
(the “from exercising any rights or remedies under the Loan Documents arising
solely out of the Specified Events of Default until the date (the “Forbearance
Termination Date” that is the earliest of (a) November 20, 2009, (b) the
occurrence of a Default or Event of Default (other than a Specified Event of
Default) or (c) the occurrence of a breach or default by Borrower or any other
Loan Party under this Agreement (the period beginning on the Forbearance
Effective Date being referred to herein as the “Forbearance Period”). The
forbearance shall apply only to the Specified Events of Default and not to any
other Defaults or Events of Default, including without limitation, any other
existing Defaults or Events of Default known or not known to Administrative
Agent and Lender or Borrower or any other Loan Party at this time and any
Defaults or Events of Default occurring after the date hereof, and the
Administrative Agent and the Lenders reserve all of their rights to exercise
rights and remedies under the Loan Documents upon the occurrence of any such
other Default of Event of Default at any time, including, without limitation,
before the expiry or termination of the Forbearance Period.

The parties hereto agree that neither the agreements of Administrative Agent and
the Lenders herein nor the acceptance by Administrative Agent or the Lenders of
any of the payments provided for in the Loan Documents, nor any payment prior to
the date hereof shall (i) excuse Borrower or any other Loan Party from any of
its obligations under the Loan Documents, or (ii) toll the running of any time
periods applicable to any such rights and remedies, including, without
limitation, any grace periods with respect to Defaults under the Loan Documents
or otherwise. Each of the Borrower and the other Loan Parties agrees that it
will not assert laches, waiver or any other defense to the enforcement of any of
the Loan Documents based upon the agreements of Administrative Agent and the
Lenders to forbear herein or the acceptance by Administrative Agent or the
Lenders of any of the payments provided for in the Loan Documents or any payment
prior to the date hereof.

 

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6. Remedies; Expiration or Termination of Forbearance. The Forbearance Period
shall terminate immediately on the Forbearance Termination Date and upon such
termination Administrative Agent and Lenders shall be under no obligation of any
kind whatsoever to forbear from exercising any remedies on account of the
Specified Events of Default and shall have the immediate right to exercise any
and all rights and remedies under the Second Lien Credit Agreement and the other
Loan Documents, including without limitation the right to declare all or any
portion of the Obligations to be immediately due and payable. In such event, if
Administrative Agent or Lenders declare all of the Obligations to be forthwith
due and payable, Borrower and the other Loan Parties shall immediately pay all
of the Obligations in full and waive any right to receive further time to pay
such amounts. Failing immediate payment of such amounts, Administrative Agent
and Lenders may immediately proceed to enforce their other rights and remedies
under the Loan Documents. No forbearance or delay in enforcing any rights or
remedies on the part of Administrative Agent or any Lender with respect to any
Default or Event of Default shall constitute or be deemed to be any waiver by
Administrative Agent or any Lender of such Default or Event of Default or any
other or subsequent or similar Default or Event of Default. This Agreement shall
constitute a Loan Document. The breach by Borrower or any other Loan Party of
any representation, warranty, covenant or agreement in this Agreement, including
without limitation any covenant set forth in Section 7 hereof, shall constitute
an immediate Event of Default hereunder and under the other Loan Documents after
giving effect to any grace or cure periods set forth therein.

7. Covenants. Each of the Borrower and the other Loan Parties hereby covenants
and agrees with Administrative Agent and Lenders as follows:

(a) Compliance with Loan Documents. Each of the Borrower and the other Loan
Parties shall strictly adhere to all the terms, conditions and covenants of the
Loan Documents, including terms requiring prompt payment of principal and
interest amounts when due.

(b) Cooperation. Each of the Borrower and the other Loan Parties shall cooperate
fully with Administrative Agent, including, without limitation, providing all
information reasonably requested and providing Administrative Agent and its
agents, consultants and advisors, at any reasonable time during normal business
hours, full access to its books, records, property and assets wherever they may
be located, which right of access shall include the right to inspect and
appraise such property and assets.

8. Representations and Warranties. To induce Administrative Agent and Required
Lenders to enter into this Agreement, each of the Borrower and the other Loan
Parties hereby jointly and severally represents and warrants that:

(a) The execution, delivery and performance by each Loan Party of this Agreement
and the performance of the Second Lien Credit Agreement as amended by this
Amendment (the “Amended Second Lien Credit Agreement”) (i) are within such Loan
Party’s corporate or similar powers and, at the time of execution thereof, have
been duly authorized by all necessary corporate and similar action (including,
if applicable, consent of the holders of its Securities), (ii) do not
(A) contravene such Loan Party’s Constituent Documents, (B) violate any material
Requirement of Law in any material respect, (C) in any material respect,
conflict with, contravene, constitute a default or breach under any material
Contractual Obligation of any Loan Party or any of its Subsidiaries, or result
in or permit the termination or acceleration of any such material Contractual
Obligation, or (D) result in the imposition of any Lien (other than a Permitted
Lien) upon any property of any Loan Party or any of its Subsidiaries and
(iii) do not require any Permit of, or filing with, any Governmental Authority
or any consent of, or notice to, any Person.

(b) From and after its delivery to the Administrative Agent, this Agreement has
been duly executed and delivered to the other parties hereto by each Loan Party
party hereto and this Agreement and the Amended Second Lien Credit Agreement are
each the legal, valid and binding obligation of such Loan Party and are each
enforceable against such Loan Party in accordance with its terms, except as may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors rights generally or by general equitable
principles relating to enforceability.

(c) No Default or Event of Default (other than the Specified Events of Default)
has occurred and is continuing after giving effect to this Agreement.

 

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(d) Except for the Governmental Investigation (as hereinafter defined) no
action, claim or proceeding is now pending or, to the knowledge of any Loan
Party, threatened against any Loan Party, at law, in equity or otherwise, before
any court, board, commission, agency or instrumentality of any federal, state,
or local government or of any agency or subdivision thereof, or before any
arbitrator or panel of arbitrators, which (i) challenges any Loan Party’s right,
power, or competence to enter into this Agreement or perform any of its
obligations under this Agreement, the Amended Second Lien Credit Agreement or
any other Loan Document, or the validity or enforceability of this Agreement,
the Amended Second Lien Credit Agreement or any other Loan Document or any
action taken under this Agreement, the Amended Second Lien Credit Agreement or
any other Loan Document or (ii) if determined adversely, is reasonably likely to
have or result in a Material Adverse Effect. As used herein “Governmental
Investigation” and “June 2009 Subpoenas” shall have the following meanings:

“Governmental Investigation” means any claim, sanction, action, lawsuit or other
proceedings or investigation in connection with the June 2009 Subpoenas by a
Governmental Authority, which relates to the condition (financial or otherwise),
business, operations or property of the Borrower or any of the Group Members.

“June 2009 Subpoenas” means, collectively, (a) subpoena for documents from a
Grand Jury for the United States District Court for the District of Columbia,
received by the Borrower on June 25, 2009, (b) a subpoena for documents from the
San Francisco Regional Office of the United Statements Securities and Exchange
Commission, received by the Borrower on June 26, 2009 and (c) a subpoena for
testimony from the SEC to the Borrower’s chief financial officer, received by
the Borrower on June 26, 2009, copies of which, with respect to clauses (a)
through (c) immediately above, were previously delivered to the Administrative
Agent.

(e) After giving effect to this Agreement and except with respect to the
Governmental Investigation and the Specified Events of Default, the
representations and warranties of the Borrower and the other Loan Parties
contained in the Amended Second Lien Credit Agreement and each other Loan
Document are true and correct in all material respects (provided, that if any
representation or warranty is by its terms qualified by concepts of materiality,
such representation shall be true and correct in all respects) on and as of the
Forbearance Effective Date hereof with the same effect as if such
representations and warranties had been made on and as of such date, except that
any such representation or warranty which is expressly made only as of a
specified date need be true only as of such date.

9. No Amendments/Waivers. The Second Lien Credit Agreement and the other Loan
Documents shall continue to be in full force and effect in accordance with their
respective terms and, except as expressly provided herein, shall be unmodified.
In addition, except as expressly provided herein, this Agreement shall not be
deemed an amendment, consent or waiver of any term or condition of any Loan
Document or a forbearance by Administrative Agent or Lenders with respect to any
right or remedy which Administrative Agent or Lenders may now or in the future
have under the Loan Documents, at law or in equity or otherwise or be deemed to
prejudice any rights or remedies which Administrative Agent or Lenders may now
have or may have in the future under or in connection with any Loan Document or
under or in connection with any Default or Event of Default which may now exist
or which may occur after the date hereof.

10. Outstanding Indebtedness; Waiver of Claims. Each of the Borrower and the
other Loan Parties hereby acknowledges and agrees that as of the Forbearance
Effective Date the aggregate amount of Loans is $30,000,000 plus applicable PIK
interest as of the Forbearance Effective Date, and that, as of the Forbearance
Effective Date, such principal amounts are payable pursuant to the Second Lien
Credit Agreement without defense, offset, withholding, counterclaim or deduction
of any kind. Each of the Borrower and the other Loan Parties hereby acknowledges
that it has no Claims (as hereinafter defined) arising out of or relating to the
Second Lien Credit Agreement or any other Loan Document (including, without
limitation, as a result of credit having been extended thereunder) against
Administrative Agent or the Lenders and their respective employees, agents,
representatives, consultants, attorneys, fiduciaries, servants, officers,
directors, partners, predecessors, subsidiary corporations, parent corporations
and related corporate divisions and their respective successors and assigns (all
of the foregoing being the “Released Persons”) and hereby waives, releases,
remises and forever discharges Administrative Agent, each Lender and each other
Released Person from any and all Claims of any and every character, known or
unknown, direct and/or indirect, at law or in equity, of whatsoever kind or
nature, whether heretofore or hereafter

 

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arising, for or because of any matter or things done, omitted or suffered to be
done by any Released Person prior to and including the date hereof, and in any
way directly or indirectly arising out of or relating to the Second Lien Credit
Agreement or any other Loan Document. For purposes hereof, “Claims” shall mean
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits or claims which may be instituted or asserted against or incurred by such
Released Person as the result of credit having been extended under the Second
Lien Credit Agreement or any other Loan Document or otherwise arising in
connection with the transaction contemplated thereunder.

11. Expenses. Each of the Borrower and the other Loan Parties hereby reconfirms
its respective obligations pursuant to Section 11.3 of the Second Lien Credit
Agreement and to pay and reimburse Administrative Agent for all reasonable costs
and expenses (including, without limitation, reasonable fees of legal counsel)
incurred in connection with the negotiation, preparation, execution and delivery
of this Agreement and all other documents and instruments delivered in
connection therewith.

12. Affirmation of Existing Loan Documents. After giving effect to this
Agreement, Borrower and each Loan Party (a) confirms and agrees that its
obligations under each of the Loan Documents to which it is a party shall
continue without diminution thereof and shall remain in full force and effect on
and after the date hereof, and (b) confirms and agrees that the Liens granted
pursuant to the Collateral documents to which it is a party shall continue
without any diminution thereof and shall remain in full force and effect on and
after the date hereof.

13. Effectiveness. This Agreement shall become effective as of November 4, 2009
(the “Forbearance Effective Date”) only upon satisfaction in full in the
judgment of Administrative Agent of each of the following conditions on or prior
to the date hereof:

(a) Agreement. Administrative Agent shall have received four (4) copies of this
Agreement duly executed and delivered by Administrative Agent, the Required
Lenders, Borrower and the other Loan Parties.

(b) Payment of Fees and Expenses. Borrower shall have paid to the Administrative
Agent all costs, fees and expenses owing in connection with this Agreement and
the other Loan Documents and due to Administrative Agent (including, without
limitation, reasonable legal fees and expenses of legal counsel).

On the Forbearance Effective Date, the Lenders shall pay to the Borrower the
Cash Interest Refund.

14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

15. Counterparts. This Agreement may be executed by the parties hereto on any
number of separate counterparts and all of said counterparts taken together
shall be deemed to constitute one and the same instrument.

[Signature pages follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year first above written.

 

PURPLE COMMUNICATIONS, INC., as Borrower By:  

/s/ John R. Ferron

Name:   John R. Ferron Title:   Chief Financial Officer & Chief Operating
Officer PURPLE LANGUAGE SERVICES CO., as Guarantor By:  

/s/ John R. Ferron

Name:   John R. Ferron Title:   Chief Financial Officer & Chief Operating
Officer PURPLE RELAY SERVICES CO., as Guarantor By:  

/s/ John R. Ferron

Name:   John R. Ferron Title:   Chief Financial Officer & Chief Operating
Officer HANDS ON VIDEO RELAY SERVICES, INC., as Guarantor By:  

/s/ John R. Ferron

Name:   John R. Ferron Title:   Chief Financial Officer & Chief Operating
Officer

 

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AGENTS AND LENDERS; CLEARLAKE CAPITAL GROUP, L.P., as Administrative Agent By:  
CCG Operations, LLC, its general partner By:  

/s/ Jose Feliciano

Name:   Jose Feliciano Title:   Manager
RESERVOIR CAPITAL PARTNERS, L.P., as Lender By:   RCP GP, LLC, its general
partner By:  

/s/ Gregg Zeitlin

Name:   Gregg Zeitlin Title:   Senior Managing Director
RESERVOIR CAPITAL INVESTMENT PARTNERS, L.P., as Lender By:   RCIP GP, LLC, its
general partner By:  

/s/ Gregg Zeitlin

Name:   Gregg Zeitlin Title:   Senior Managing Director
RESERVOIR CAPITAL MASTER FUND II, L.P.,
as Lender By:   Reservoir Capital Group, L.L.C., its general partner By:  

/s/ Gregg Zeitlin

Name:   Gregg Zeitlin Title:   Senior Managing Director

 

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Exhibit B

Amendment to Intercreditor Agreement

 

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