<PAGE>
As filed with the Securities and Exchange Commission on January 18, 2000
Registration No. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
FORM S-1
REGISTRATION STATEMENT
Under
The Securities Act of 1933
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GoAmerica, Inc.
(Exact name of registrant as specified in its charter)
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Delaware 4812 22-3693371
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Identification Number)
incorporation or Classification Code
organization) Number)
401 Hackensack Avenue,
Hackensack, New Jersey 07601
201-996-1717
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
--------------
Aaron Dobrinsky
President and Chief Executive Officer
GoAmerica, Inc.
401 Hackensack Avenue
Hackensack, New Jersey 07601
201-996-1717
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
--------------
Copies to:
David J. Sorin Scott M. Freeman
Andrew P. Gilbert Sidley & Austin
Buchanan Ingersoll Professional 875 Third Avenue
Corporation New York, New York 10022
650 College Road East (212) 906-2000
Princeton, New Jersey 08540
(609) 987-6800
--------------
Approximate date of commencement of the proposed sale to the public: As soon
as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
<TABLE>
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<CAPTION>
Title of Each Class of Proposed Maximum Amount of
Securities to be Registered Aggregate Offering Price(1) Registration Fee
- -------------------------------------------------------------------------------
<S> <C> <C>
Common stock, $0.01 par value per
share............................ $100,000,000.00 $26,400.00
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- -------------------------------------------------------------------------------
</TABLE>
(1)Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) under the Securities Act.
--------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this preliminary prospectus is not complete and may be +
+changed. We may not sell these securities until the registration statement +
+filed with the Securities and Exchange Commission is effective. This +
+preliminary prospectus is not an offer to sell these securities and it is not +
+soliciting an offer to buy these securities in any state where the offer or +
+sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED JANUARY 18, 2000
PROSPECTUS
Shares
[LOGO]
Common Stock
-----------
This is an initial public offering of shares of common stock of GoAmerica, Inc.
We are selling the shares of common stock offered under this prospectus.
There is currently no public market for our shares. We currently estimate that
the initial public offering price will be between $ and $ per share. We
have applied to have our common stock approved for listing on the Nasdaq
National Market under the symbol "GOAM."
See "Risk Factors" beginning on page 8 to read about risks that you should
consider before buying shares of our common stock.
Neither the Securities and Exchange Commission nor any other regulatory body
has approved or disapproved these securities or passed upon the adequacy or
accuracy of this prospectus. Any representation to the contrary is a criminal
offense.
-----------
<TABLE>
<CAPTION>
Per
Share Total
----- -----
<S> <C> <C>
Public offering price............................................... $ $
Underwriting discount............................................... $ $
Proceeds, before expenses, to us.................................... $ $
</TABLE>
-----------
The underwriters may purchase up to an additional shares of common stock
from us at the initial public offering price less the underwriting discount to
cover over-allotments.
The underwriters expect to deliver the shares against payment in New York, New
York on , 2000.
-----------
Bear, Stearns & Co. Inc.
Chase H&Q
U.S. Bancorp Piper Jaffray
SoundView Technology Group
The date of this prospectus is , 2000
<PAGE>
- - Inside front cover of prospectus has a photograph depicting an individual who
is outdoors and is holding, and communicating wirelessly through, a mobile
device. At the top of such photograph appears the GoAmerica logo and the
phrase, "wherever you go... there we are."
- - Attached gatefold with the GoAmerica logo at top has a backdrop of various
business people with a graphic. The graphic depicts four boxes aligned from
left to right.
- - The first box, which is labelled "Content" includes the text "World Wide Web"
and "Corporate Intranets" with an accompanying photograph of the globe.
- - The second box, which is labelled "The Wireless Internet Connectivity Center",
includes the text "Go.Web" and "Go.Web formatting, encryption, authentication,
and compression architecture" and has an accompanying photograph of computer
technology.
- - The third box, which is labelled "Networks", includes the text "CDPD", "CDMA",
"DATATAC", "GSM" and "Mobitex" and has an accompanying photograph of network
components.
- - The fourth box, which is labelled "Mobile Devices", includes text "WAP
Phones", "Windows CE", "Palm OS", "Interactive Pagers" and "Laptops" and has
an accompanying photograph of each of such devices. At the bottom of such page
the following text appears: "Through our Wireless Internet Connectivity
Center, we offer our subscribers comprehensive and flexible mobile data
solutions for wireless Internet access by providing wireless network services,
mobile devices, software and subscriber service and support."
<PAGE>
PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this prospectus.
This summary does not contain all the information that you should consider
before investing in our common stock. You should read the entire prospectus
carefully, especially "Risk Factors" beginning on page 8 and our financial
statements and related notes.
GoAmerica, Inc.
Our Company
We are a leading provider of nationwide wireless Internet services, also
known as wireless ISP services. We enable our individual and business
subscribers to access remotely the Internet, email and corporate intranets in
real time through a wide variety of mobile computing and communications
devices. Through our Wireless Internet Connectivity Center, we offer our
subscribers comprehensive and flexible mobile data solutions for wireless
Internet access by providing wireless network services, mobile devices,
software and subscriber service and support.
Our Go.Web technology and Wireless Internet Connectivity Center enable our
subscribers to access a wide variety of Internet content, such as business and
financial data, news, sports, travel, entertainment, personal contact and other
information. Our subscribers can also conduct ecommerce transactions, such as
shopping, reservations and stock trading, to the extent permitted by their
mobile device of choice. Our subscribers can also customize their personal Web
site or "personal portal," www.mygoweb.com, to access their favorite Web sites
quickly. In addition, we offer a variety of email solutions which allow our
subscribers to access their email at their existing Internet and business email
accounts as well as a GoAmerica email address.
We provide our subscribers with flexible and reliable wireless ISP services
across a number of wireless networks and mobile device platforms. We have
established strategic relationships with many leading wireless network
carriers, such as AT&T Wireless Services, American Mobile, BellSouth Wireless
Data and Bell Atlantic Mobile. Our subscribers are able to use our wireless ISP
services with their choice of a wide variety of leading mobile devices,
including Palm OS-based computing devices, Research In Motion's interactive
pagers, laptop computers, Windows CE-based computers and WAP-enabled smart
phones. We also have engineered our wireless ISP services to operate with many
next generation wireless devices.
Our Opportunity
We believe that the growth of the Internet, email and mobile wireless
communications has created a significant market opportunity for service
providers capable of efficiently delivering wireless Internet and email
services over wireless communication networks. According to International Data
Corporation, the number of Internet users worldwide is projected to increase
from approximately 140 million at the end of 1998 to over 500 million by the
end of 2003. Furthermore, email is becoming an increasingly important means of
communication. According to Forrester Research, Inc., daily Internet email
traffic in the United States will increase from 100 million email messages per
day in 1996 to 1.5 billion per day in 2002.
As access to the Internet, email and corporate intranets become increasingly
important to communicating and conducting business, we believe that individuals
will increasingly use Web-accessible mobile devices for convenience as well as
to enhance productivity when away from their home or office. International Data
Corporation forecasts that the remote and mobile workforce in the United
States, defined as employees spending more than 20% of their time away from the
office, will grow from 34 million individuals at the end of
1
<PAGE>
1998 to 47 million at the end of 2003. We further believe that the number of
individuals using mobile devices, such as handheld personal organizers,
notebook computers, pagers and mobile phones, will grow as these devices become
smaller, less expensive, more reliable including longer battery life and have
more features than earlier devices.
While the wireless data services market is developing rapidly, widespread
adoption of wireless data services has been hindered by a number of challenges,
including limited wireless data service coverage areas, incompatible mobile
devices and wireless networks, and slow wireless data transmission speeds. As a
result, we believe that adoption of wireless data applications that serve
vertical market segments or other enterprise solutions, such as financial
services and sales force automation, have shown the greatest penetration to
date. However, the rapid development of the Internet, with the resulting nearly
unlimited access to content and to corporate intranets, has created the
opportunity for rapid adoption of wireless devices for large scale horizontal
applications, including messaging, email connectivity, personal information
management (address and calendar) connectivity, and access to the Internet. As
a result, we believe that a significant opportunity exists for wireless
Internet service providers that are capable of offering individuals and
businesses easy-to-use, cost-effective and reliable wireless data service.
Our Solution
We provide our subscribers with easy-to-use wireless access to the Internet,
email and corporate intranets. Through our Wireless Internet Connectivity
Center, we offer our subscribers comprehensive and flexible mobile data
solutions for wireless Internet access by providing wireless network services,
mobile devices, software and subscriber service and support. The following are
key components of our comprehensive wireless Internet solution:
. Offer easy-to-use wireless Internet access, ecommerce and email;
. Provide nationwide services across multiple wireless networks;
. Enable wireless services through a wide variety of mobile computing and
communications devices;
. Integrate various wireless technologies and networks to provide seamless
Internet solutions;
. Offer flexible wireless solutions for individuals and businesses; and
. Focus on subscriber service and support.
Our Strategy
Our goal is to be the leading provider of nationwide wireless Internet
services and mobile data solutions for individuals and businesses. We seek to
enhance our offerings with value-added services and additional functionality to
expand our subscriber base and increase our recurring revenues. Our strategy
includes the following key elements:
. Offer comprehensive and flexible access, device and support solutions to
improve user experience;
. Capitalize on our marketing and branding initiatives to strengthen
customer relationships and capture market share;
. Expand our sales and distribution channels to reach more subscribers;
. Provide superior customer service and technical support to maximize
customer satisfaction;
. Continue to develop solutions using leading wireless technologies to
ensure functionality with next generation devices; and
. Pursue strategic acquisitions.
2
<PAGE>
GoAmerica Communications Corp. was incorporated in Delaware in 1996. In
December 1999, GoAmerica, Inc. was incorporated in Delaware and each of the
security holders of GoAmerica Communications Corp. exchanged all their
outstanding securities for newly issued securities of GoAmerica, Inc. with
equivalent rights and preferences. As a result, GoAmerica Communications Corp.
became a wholly-owned subsidiary of GoAmerica, Inc. See "Description of Capital
Stock." Our principal offices are located at 401 Hackensack Avenue, Hackensack,
New Jersey 07601, and our telephone number is (201) 996-1717. We maintain a Web
site at http://www.goamerica.net. The information contained at our Web site is
not incorporated into and does not constitute part of this prospectus, and the
only information that you should rely on in making your decision whether to
invest in our common stock is the information contained in this prospectus.
All references to "we," "us," "our," or "GoAmerica" in this prospectus mean
GoAmerica, Inc. and our wholly-owned subsidiaries, GoAmerica Communications
Corp. and GoAmerica Marketing, Inc. Our logo, "GoAmerica", "GoAmerica Your
Wireless ISP", "Go.Web" and "Law on the Go" are our trademarks. All other
trademarks or service marks appearing in this prospectus are the trademarks or
service marks of their respective owners.
Except as otherwise noted, the information in this prospectus reflects a
2,000-for-one split of our outstanding shares of common stock on May 28, 1998
and a -for- split of our outstanding shares of common stock on , 2000
and assumes (1) the conversion of all outstanding shares of preferred stock
into shares of common stock prior to the closing of this offering; and (2) no
exercise of the underwriters' overallotment option.
3
<PAGE>
The Offering
<TABLE>
<C> <S>
Common Stock offered by us.............. shares
Common Stock to be outstanding after
this offering.......................... shares
Use of proceeds......................... We expect to use the net proceeds
from this offering for working
capital, capital expenditures and
general corporate purposes, including
acquiring and implementing new
operational and financial systems,
expanding sales and marketing
activities, and for possible future
acquisitions.
Proposed Nasdaq National Market symbol.. GOAM
</TABLE>
The number of shares of common stock to be outstanding after this offering
include 1,652,845 shares of common stock to be issued upon automatic conversion
of all outstanding shares of our preferred stock upon completion of this
offering. The shares of common stock to be outstanding after this offering
exclude:
. 1,339,500 shares of common stock authorized for issuance under our stock
option plans and employee stock purchase plan, of which 305,001 shares
were subject to outstanding options as of December 31, 1999 at a
weighted average exercise price of $7.39; and
. 161,625 shares of common stock issuable upon exercise of outstanding
warrants as of December 31, 1999 at a weighted average exercise price of
$9.26.
4
<PAGE>
SUMMARY FINANCIAL DATA
The following summary statement of operations data for the period from
August 6, 1996, our date of inception, to December 31, 1996 and for the years
ended December 31, 1997 and 1998 are derived from our audited financial
statements. The following interim summary statement of operations data for the
nine months ended September 30, 1998 and 1999 and the following interim summary
balance sheet data as of September 30, 1999 are derived from our unaudited
financial statements. The unaudited financial statements include all
adjustments, consisting of normal recurring accruals, which we consider
necessary for a fair presentation of our financial position and results of
operations for the interim periods. Our operating results for the nine months
ended September 30, 1999 are not necessarily a reliable indicator of the
results that may be expected for the entire year ending December 31, 1999.
The pro forma statement of operations data and the pro forma balance sheet
data presented below give effect to: the issuance and sale of 500 additional
shares of our Series A Preferred Stock and 648,057 shares of our Series B
Preferred Stock after September 30, 1999 for total net proceeds of
approximately $25.7 million; the issuance of 28,352 shares of common stock in
connection with the Series B Preferred Stock financing; and the conversion of
all of our Series A and Series B Preferred Stock into 1,652,845 shares of
common stock upon the closing of this offering, as if such conversion had
occurred at the dates of issuance. The pro forma as adjusted balance sheet data
reflects the sale of the shares of common stock offered by us in this
offering at an assumed initial public offering price of $ per share, after
deducting the underwriting discount and estimated offering expenses payable by
us. You should read the selected financial data together with our financial
statements and the sections of this prospectus entitled "Capitalization" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
5
<PAGE>
<TABLE>
<CAPTION>
Period from
August 6,
1996 (date of Year Ended Nine Months Ended
inception) to December 31, September 30,
December 31, ---------------- -------------------
1996 1997 1998 1998 1999
------------- ------- ------- -------- ---------
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C>
Statement of Operations
Data:
Revenue:
Subscriber.............. $ -- $ 115 $ 360 $ 184 $ 664
Equipment............... -- 33 449 283 617
Other................... -- 25 18 12 200
------ ------- ------- -------- ---------
Total revenue........... -- 173 827 479 1,481
Costs and expenses:
Cost of subscriber
revenue................ -- 88 304 155 1,983
Cost of equipment
revenue................ -- 15 532 335 739
Sales and marketing..... 43 243 909 504 1,410
General and
administrative......... 175 841 1,549 1,065 2,737
Depreciation and
amortization........... 3 32 124 69 182
Non-cash employee
compensation........... -- -- -- -- 416
Settlement costs.......... -- -- -- -- (297)
Interest income........... -- -- 14 -- 81
------ ------- ------- -------- ---------
Net loss.................. $ (221) $(1,046) $(2,577) $ (1,649) $ (6,202)
Accretion of redemption
value of mandatorily
redeemable convertible
preferred stock.......... -- -- -- -- (10)
------ ------- ------- -------- ---------
Net loss applicable to
common stockholders...... $ (221) $(1,046) $(2,577) $ (1,649) $ (6,212)
====== ======= ======= ======== =========
Basic net loss per share
applicable to common
stockholders............. $(0.13) $ (0.52) $ (1.12) $ (0.74) $ (2.33)
====== ======= ======= ======== =========
Diluted net loss per share
applicable to common
stockholders............. $(0.12) $ (0.50) $ (1.09) $ (0.72) $ (2.27)
====== ======= ======= ======== =========
Weighted average shares
used in computation of
basic net loss per
share.................... 1,743 2,010 2,299 2,232 2,666
Weighted average shares
used in computation of
diluted net loss per
share.................... 1,812 2,079 2,368 2,301 2,735
Pro forma basic net loss
per share................ $ (2.10)
=========
Pro forma diluted net loss
per share................ $ (2.05)
=========
Weighted average shares
used in computation of
pro forma basic net loss
per share................ 2,951
Weighted average shares
used in computation of
pro forma diluted net
loss per share........... 3,020
</TABLE>
<TABLE>
<CAPTION>
As of September 30, 1999
------------------------------
Pro Forma As
Actual Pro Forma Adjusted
------ --------- ------------
(in thousands)
<S> <C> <C> <C>
Balance Sheet Data:
Cash and cash equivalents..................... $7,317 $33,007 $
Working capital............................... 5,679 31,369
Total assets.................................. 9,425 35,115
Series A redeemable convertible preferred
stock........................................ 9,802 --
Series B redeemable convertible preferred
stock........................................ -- -- --
Stockholders' equity (deficit)................ (3,138) 32,354
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Period from
August 6,
1996 (date of Nine Months Ended
inception) to Year Ended December 31, September 30,
December 31, ------------------------ ------------------
1996 1997 1998 1998 1999
------------- ----------- ------------ -------- --------
(in thousands)
<S> <C> <C> <C> <C> <C>
Other Financial Data:
Cash provided by (used
in):
Operating
activities......... $ (338) $ (803) $ (2,215) $ (1,500) $ (3,973)
Investing
activities......... (74) (180) (498) (344) (599)
Financing
activities......... 1,000 415 4,654 3,984 9,928
</TABLE>
Recent Developments
On January 17, 2000, we executed a binding stock purchase agreement with
Dell USA L.P., Impact Venture Partners, L.P., Carousel Capital Partners, L.P.
and Forstmann Little & Co. Equity Partnership-VI, L.P. pursuant to which we
will issue and sell an aggregate of 648,057 shares of Series B Preferred Stock
for net proceeds of approximately $25.2 million. We anticipate that the closing
of such transaction will occur during January 2000. Each share of Series B
Preferred Stock will convert into one share of common stock upon completion of
this offering.
7
<PAGE>
RISK FACTORS
Investing in our common stock involves a high degree of risk. You should
carefully consider the following risks together with the other information
contained in this prospectus before deciding to buy our common stock. If any
of the following risks or uncertainties actually occur, our business,
financial condition and operating results could be significantly and adversely
affected. If that happens, the price of our common stock could decline, and
you could lose all or part of your investment. The risks described below are
not the only ones facing our company. Additional risks and uncertainties not
presently known to us or that we currently deem immaterial also could harm our
business, financial condition and operating results.
We make certain forward-looking statements in this prospectus that are not
based on historical facts, but discuss our future expectations. The words
"may," "would," "could," "will," "expect," "anticipate," "believe," "intend,"
"plan," "estimate" and similar expressions are meant to identify such forward-
looking statements. Actual results may differ materially from those expressed
or implied by such forward-looking statements. Factors that could cause actual
results to differ materially include, but are not limited to, those set forth
below. Readers are cautioned not to place undue reliance on these forward-
looking statements which reflect our views only as of the date of this
prospectus. We undertake no obligation to update such statements or publicly
release the result of any revisions to these forward-looking statements which
we may make to reflect events or circumstances after the date of this
prospectus or to reflect the occurrence of unanticipated events.
We have historically incurred losses and these losses will increase in the
foreseeable future.
We have never earned a profit. We had net losses of $1.0 million and $2.6
million for the years ended December 31, 1997 and 1998, respectively, and a
net loss of $6.2 million for the nine months ended September 30, 1999. Since
our inception, we have invested significant capital to build our wireless
network operations and customer support centers as well as our customized
billing system. Recently, we have invested additional capital in the
development of our software application Go.Web. We plan to acquire and
implement new operational and financial systems, continue to invest in our
network operations and customer support centers, and expand our sales and
marketing efforts. We also provide and expect to continue to provide mobile
devices made by third parties to our customers at prices below our costs for
such devices. In addition, our costs of subscriber revenue, consisting
principally of our purchase of wireless airtime from network carriers, have
historically exceeded our subscriber revenue and we expect such negative
margins to continue until at least March 2000. Further, we have experienced
and expect to continue to experience negative overall gross margins, which
consist of margins on our subscriber revenues, equipment sales and other
revenue. As a result, we have incurred operating losses since our inception
and expect to continue to incur increasing operating losses for at least the
next several quarters. Therefore, we will need to generate significant revenue
to become profitable and sustain profitability on a quarterly or annual basis.
We may not achieve or sustain our revenue or profit goals, and our ability
to do so depends on the factors specified elsewhere in "Risk Factors" as well
as on a number of factors outside of our control, including the extent to
which:
. our competitors announce and develop, or lower the prices of, competing
services;
. wireless network carriers, data providers and manufacturers of mobile
devices dedicate resources to selling our services; and
. prices for our services decrease as a result of reduced demand or
competitive pressures.
As a result, we may not be able to increase revenue or achieve
profitability on a quarterly or annual basis.
8
<PAGE>
We have only a limited operating history, which makes it difficult to evaluate
an investment in our common stock.
We have only a limited operating history on which you can evaluate our
business, financial condition and operating results. We face a number of risks
encountered by early stage technology companies that participate in new
technology markets, including our ability to:
. manage our dependence on wireless data services which have only limited
market acceptance to date;
. expand our marketing, sales, engineering and support organizations, as
well as our distribution channels;
. negotiate and maintain favorable usage rates with telecommunications
carriers;
. retain and expand our subscriber base at profitable rates;
. recoup our expenses associated with the wireless devices we resell to
subscribers;
. manage expanding operations, including our ability to expand our systems
if our subscriber base grows substantially;
. attract and retain management and technical personnel; and
. anticipate and respond to market competition and changes in technologies
such as wireless data protocols and wireless devices.
We may not be successful in addressing or mitigating these risks and
uncertainties, and if we are not successful our business could be significantly
and adversely affected.
To generate increased revenue we will have to increase substantially the number
of our subscribers, which may be difficult to accomplish.
We will have to increase substantially the number of our subscribers in
order to achieve our business plan. In addition to increasing our subscriber
base, we will have to limit our churn, or the number of subscribers who
deactivate our service. Adding new subscribers will depend to a large extent on
the success of our direct and indirect marketing campaigns, and there can be no
assurance that they will be successful. Limiting our churn rate will require
that we provide our subscribers with a favorable experience in using our
wireless service. Our subscribers' experience may be unsatisfactory to the
extent that our service malfunctions or our customer care efforts, including
our Web site and 800 number customer service efforts, do not meet or exceed
subscriber expectations. In addition, factors beyond our control, such as
technological limitations of certain of the current generation of wireless
devices, which may cause our subscribers' experience with our service to not
meet their expectations, could increase our churn rate and adversely affect our
revenues. Because a significant minority of our subscribers have low or no
usage rates for our services, our churn rates could increase in the future.
The market for our services is new and highly uncertain.
The market for wireless data services is still emerging and continued growth
in demand for and acceptance of these services remains uncertain. Current
barriers to market acceptance of these services include cost, reliability,
functionality and ease of use. We cannot be certain that these barriers will be
overcome. If the market for our services does not grow or grows slower than we
currently anticipate, our business, financial condition and operating results
could be adversely affected.
We have experienced and may continue to experience negative gross margins on
our subscriber revenue.
We intend to pass through to our subscribers all the airtime charges that we
incur from our wireless carriers; however, we have not always been and will not
always be able to pass through such charges because the pricing plans offered
to us by our wireless carriers and to which we assign our subscribers may not
allow us
9
<PAGE>
to always cover our subscriber costs. For example, many of our subscribers have
contracted for our Go.Unlimited Plan, which provides for unlimited nationwide
wireless Internet service for a fixed monthly fee. If we assign those
subscribers to a carrier plan that charges us an increasing fee as subscriber
usage increases, then as subscriber usage and our related airtime costs
increase, our margins on subscriber revenues would decrease and may become
negative. Our airtime costs also increase substantially when subscribers use
our services outside of their pre-determined geographic area, which results in
roaming charges to us by the carriers that we do not pass on to our
subscribers. We do not have and may not be able to develop the automated
systems necessary to monitor our subscribers' usage and roaming patterns and
quickly switch our subscribers to a more appropriate, lower cost airtime plan.
In addition, while we continually seek to negotiate better pricing of wireless
airtime plans with our carriers, we cannot assure you that we will be
successful in that regard.
We need to improve our systems to monitor our wireless airtime costs more
effectively.
We seek to reduce our wireless airtime costs by periodically matching our
subscribers airtime usage needs to the most appropriate, lowest cost wireless
carrier plans. It is possible for a small number of subscribers, if we do not
assign them to the proper airtime pricing plan, to significantly increase our
costs. The current systems that we use to monitor the airtime charges that we
incur from our wireless carriers do not permit us to timely and effectively
respond to changes in volume and geographic location of subscriber usage, which
directly impact our costs of subscriber revenue. We currently use a manual
system to track such costs and monitor wireless plan usage. We intend to
implement alternative automated systems by mid-2000. In the interim, we have
implemented internal controls that we believe will reduce excessive usage of
our airtime plans. We cannot assure you that we will be able to acquire or
develop such automated control systems or, if implemented, that our systems
will be able to monitor all subscriber usage or improve our gross margins.
We subsidize the mobile devices that we resell which results in negative gross
margins on our equipment revenue.
In order to facilitate the sale of our wireless Internet services, the sales
prices of the mobile devices manufactured by third parties that we sell to our
subscribers are generally below our costs for such devices. Additionally, we
have also provided many of our resellers and marketing partners with
complimentary mobile devices and GoAmerica service during a trial period in
order to facilitate additional sales of our services. While we believe that
such practices are commonplace in the wireless communications industry and we
intend to continue such practices, we have experienced, and expect to continue
to experience, negative gross margins on the mobile devices that we resell.
We have limited resources and we may be unable to support effectively our
anticipated growth in operations.
We have begun aggressively expanding our operations in anticipation of an
increase in the number of our subscribers. The number of our employees
increased from 23 on December 31, 1998 to 49 on December 31, 1999. We intend to
use a portion of the net proceeds of this offering to hire a significant number
of additional employees. We also intend to use a portion of the net proceeds
from this offering to acquire a state-of-the-art accounting and business
process software package to replace our current manual systems which must be
updated. Additionally, we must continue to develop and expand our systems and
operations as the number of subscribers and the amount of information they wish
to receive, as well as the number of services we offer, increases. This
development and expansion has placed, and we expect it to continue to place,
significant strain on our managerial, operational and financial resources. We
may be unable to develop and expand our systems and operations for one or more
of the following reasons:
. we may not be able to locate or hire at reasonable compensation rates
qualified engineers and other employees necessary to expand our capacity
on a timely basis;
10
<PAGE>
. we may not be able to obtain the hardware necessary to expand the
subscriber capacity of our systems on a timely basis;
. we may not be able to expand our customer service, billing and other
related support systems; and
. we may not be able to obtain sufficient additional capacity from
wireless carriers on a timely basis.
If we cannot manage our growth effectively, our business and operating
results will suffer. Additionally, any failure on our part to develop and
maintain our wireless data services if we experience rapid growth could
significantly adversely affect our reputation and brand name which could reduce
demand for our services and adversely affect our business, financial condition
and operating results.
Our business prospects depend in part on our ability to maintain and improve
our services as well as to develop new services.
We believe that our business prospects depend in part on our ability to
maintain and improve our current services and to develop new services on a
timely basis. Our services will have to achieve market acceptance, maintain
technological competitiveness and meet an expanding range of customer
requirements. As a result of the complexities inherent in our service
offerings, major new wireless data services and service enhancements require
long development and testing periods. We may experience difficulties that could
delay or prevent the successful development, introduction or marketing of new
services and service enhancements. Additionally, our new services and service
enhancements may not achieve market acceptance.
If we do not respond effectively and on a timely basis to rapid technological
change, our business could suffer.
The wireless and data communications industries are characterized by rapidly
changing technologies, industry standards, customer needs and competition, as
well as by frequent new product and service introductions. Our services are
integrated with wireless handheld devices and the computer systems of our
corporate customers. Our services must also be compatible with the data
networks of wireless carriers. We must respond to technological changes
affecting both our customers and suppliers. We may not be successful in
developing and marketing, on a timely and cost-effective basis, new services
that respond to technological changes, evolving industry standards or changing
customer requirements. Our success will depend, in part, on our ability to
accomplish all the following in a timely and cost-effective manner:
. effectively use and integrate new technologies;
. continue to develop our technical expertise;
. enhance our wireless data, engineering and system design services;
. develop applications for new wireless networks and services;
. develop services that meet changing customer needs;
. advertise and market our services; and
. influence and respond to emerging industry standards and other changes.
We depend upon wireless carriers' networks. If we do not have continued access
to sufficient capacity on reliable networks, our business will suffer.
Our success partly depends on our ability to buy sufficient capacity on the
networks of wireless carriers such as AT&T Wireless Services, American Mobile,
Bell Atlantic Mobile and BellSouth Mobile Data and on the reliability and
security of their systems. We depend on these companies to provide
uninterrupted and "bug free" service and would be adversely affected if they
failed to provide the required capacity or needed level of service. In
addition, although we have some forward price protection in our existing
agreements with certain
11
<PAGE>
carriers, we could be adversely affected if wireless carriers were to increase
the prices of their services. Our existing agreements with the wireless
carriers generally have one-to-three year terms. Some of these wireless
carriers are, or could become, our competitors.
We depend on third parties for sales of our services.
We rely substantially on the efforts of others to sell many of our wireless
data communications services. While we monitor the activities of our resellers,
we cannot control how those who sell and market our service perform and we
cannot be certain that their performance will be satisfactory. If the number of
customers we obtain through these efforts is substantially lower than we expect
for any reason, this would have an adverse effect on our business, operating
results and financial condition.
Our goal of building the GoAmerica brand is likely to be difficult and
expensive and our inability to do so could adversely affect our business.
We believe that a quality brand identity will be essential if we are to
increase our number of subscribers and our revenues. We intend to use a
significant portion of the proceeds of the offering to increase substantially
our marketing budget as part of our efforts to build the GoAmerica brand. Our
sales and marketing expenses were approximately $909,000 for the year ended
December 31, 1998 and $1.4 million for the nine months ended September 30,
1999. In 2000, we expect our sales and marketing expenses to substantially
exceed our 2000 revenues. If our marketing efforts cost more than anticipated,
if we cannot increase our brand awareness or if the GoAmerica brand is not well
received by our existing and potential subscribers, our losses will increase
and our business will be adversely affected.
We depend on our key management and on recruiting and retaining key personnel.
We are particularly dependent on Aaron Dobrinsky and Joseph Korb, our
chairman, chief executive officer and president, and our executive vice
president, respectively, for most of our strategic, managerial and marketing
initiatives. The unexpected loss of such officers would likely have an adverse
effect on our business. In addition, because of the technical nature of our
services and the dynamic market in which we compete, our performance depends on
attracting and retaining other key employees. Competition for qualified
personnel in the wireless data, communications and software industries is
intense and finding and retaining such qualified personnel with experience in
such industries is even more difficult. We believe there are only a limited
number of individuals with the requisite skills to serve in many of our key
positions, and it is becoming increasingly difficult to hire and retain these
persons. Competitors and others may attempt to recruit our employees. A major
part of our compensation to our key employees is in the form of stock option
grants. A prolonged depression in our stock price could make it difficult for
us to retain our employees and recruit additional qualified personnel. We
currently maintain and are the beneficiary of key person life insurance
policies on the lives of Aaron Dobrinsky and Joseph Korb. We do not maintain
insurance policies for any of our other employees.
Wireless data systems failures could harm our business by injuring our
reputation or lead to claims of liability for delayed, improper or unsecured
transmission of data.
A significant barrier to the growth of ecommerce and wireless data services
has been the need for secure and reliable transmission of confidential
information. Our existing wireless data services are dependent on real-time,
continuous feeds from various sources. The ability of our subscribers to access
data in real-time requires timely and uninterrupted connections with our
wireless network carriers. Any significant disruption from our backup landline
feeds could result in delays in our subscribers' ability to receive such
information. In addition, our systems could be disrupted by unauthorized
access, computer viruses and other accidental or intentional actions. We may
incur significant costs to protect against the threat of security breaches or
to alleviate problems caused by such breaches. If a third party were able to
misappropriate our subscribers' personal or proprietary information or credit
card information, we could be subject to claims, litigation or other potential
12
<PAGE>
liabilities that could adversely impact our business. There can be no assurance
that our systems will operate appropriately if we experience a hardware or
software failure or if there is an earthquake, fire, flood or other natural
disaster, a power or telecommunications failure, an act of God or an act of
war. A failure in our systems could cause delays in transmitting data, and as a
result we may lose customers or face litigation that could adversely affect our
business.
We may face increased competition.
The market for our services is expected to become increasingly competitive.
The widespread adoption of industry standards in the wireless data
communications market may make it easier for new market entrants and existing
competitors to introduce services that compete against ours. We developed our
solutions using standard industry development tools. Many of our agreements
with wireless carriers, wireless handheld device manufacturers and data
providers are non-exclusive. Our competitors may use the same products and
services in competition with us. With time and capital, it would be possible
for competitors to replicate our services and offer similar services at a lower
price. We expect that we will compete primarily on the basis of the
functionality, breadth, quality and price of our services. Our current and
potential competitors include:
. Emerging wireless Internet services providers, including OmniSky,
Wireless Knowledge, a joint venture of Microsoft and Qualcomm,
Incorporated, and Infospace.com which recently acquired Saraide.com and
those, such as Aether Systems, Inc., focusing on specific industries
such as on-line financial trading;
. Wireless device manufacturers, such as 3Com, Motorola and Research in
Motion;
. Wireless network carriers, such as AT&T Wireless Services, Bell Atlantic
Mobile, BellSouth Wireless Data, Sprint PCS and Nextel Communications,
Inc.; and
. Wireline internet service providers and portals, such as America Online
and Yahoo!
Many of our existing and potential competitors have substantially greater
financial, technical, marketing and distribution resources than we do.
Additionally, many of these companies have greater name recognition and more
established relationships with our target customers. Furthermore, these
competitors may be able to adopt more aggressive pricing policies and offer
customers more attractive terms than we can. In addition, we have established
strategic relationships with many of our potential competitors. In the event
such companies decide to compete directly with us, such relationships would
likely be terminated, which might have an adverse effect on our business and
reduce our market share or force us to lower prices to unprofitable levels.
We may not have adequately protected our intellectual property rights.
Our success substantially depends on our ability to sell services for which
we may not have intellectual property rights. We currently do not have patents
on any of our intellectual property, and we cannot assure you we will be
successful in protecting our intellectual property through patent law. In
addition, although we have applied for U.S. federal trademark protection, we do
not have any U.S. federal trademark registrations for the marks "GoAmerica",
"Go.Web", "Law on the Go" or certain of our other marks and we may not be able
to obtain such registrations due to conflicting marks or otherwise. We rely
primarily on trade secret laws, copyright law, unfair competition law and
confidentiality agreements to protect our intellectual property. To the extent
that our technology is not adequately protected by intellectual property law,
other companies could develop and market similar products or services which
could adversely affect our business, financial condition or results of
operations.
We may be sued by third parties for infringement of their proprietary rights
and we may incur defense costs and possibly royalty obligations or lose the
right to use technology important to our business.
The telecommunications and software industries are characterized by the
existence of a large number of patents and frequent litigation based on
allegations of patent infringement or other violations of intellectual
13
<PAGE>
property rights. As the number of participants in our market increases, the
possibility of an intellectual property claim against us could increase. Any
intellectual property claims, with or without merit, could be time consuming
and expensive to litigate or settle and could divert management attention from
administering our business. A third party asserting infringement claims against
us or our customers with respect to our current or future products may
adversely affect us by, for example, causing us to enter into costly royalty
arrangements or forcing us to incur settlement or litigation costs.
We may be subject to liability for transmitting information, and our insurance
coverage may be inadequate to protect us from this liability.
We may be subject to claims relating to information transmitted over systems
we develop or operate. These claims could take the form of lawsuits for
defamation, negligence, copyright or trademark infringement or other actions
based on the nature and content of the materials. Although we carry general
liability insurance, our insurance may not cover potential claims of this type
or may not be adequate to cover all costs incurred in defense of potential
claims or to indemnify us for all liability that may be imposed.
We may acquire or make investments in companies or technologies that could
cause loss of value to our stockholders and disruption of our business.
We intend to explore opportunities to acquire companies or technologies in
the future. Entering into an acquisition entails many risks, any of which could
adversely affect our business, including:
. failure to integrate the acquired assets and/or companies with our
current business;
. the price we pay may exceed the value we eventually realize;
. loss of share value to our existing stockholders as a result of issuing
equity securities as part or all of the purchase price;
. potential loss of key employees from either our current business or the
acquired business;
. entering into markets in which we have little or no prior experience;
. diversion of management's attention from other business concerns;
. assumption of unanticipated liabilities related to the acquired assets;
and
. the business or technologies we acquire or in which we invest may have
limited operating histories and may be subject to many of the same risks
we are.
An interruption in the supply of products and services that we obtain from
third parties could cause a decline in sales of our services.
In designing, developing and supporting our wireless data services, we rely
on wireless carriers, mobile device manufacturers, content providers and
software providers. These suppliers may experience difficulty in supplying us
products or services sufficient to meet our needs or they may terminate or fail
to renew contracts for supplying us these products or services on terms we find
acceptable. Any significant interruption in the supply of any of these products
or services could cause a decline in sales of our services, unless and until we
are able to replace the functionality provided by these products and services.
We also depend on third parties to deliver and support reliable products,
enhance their current products, develop new products on a timely and cost-
effective basis and respond to emerging industry standards and other
technological changes.
14
<PAGE>
Our quarterly operating results are subject to significant fluctuations and, as
a result, period-to-period comparisons of our results of operations are not
necessarily meaningful.
Our quarterly operating results may fluctuate significantly in the future as
a result of a variety of factors, some of which are outside of our control.
These factors include:
. the demand for and market acceptance of our services;
. downward price adjustments by our competitors on services they offer
that are similar to ours;
. changes in the mix of services sold by our competitors;
. technical difficulties or network downtime affecting wireless
communications generally;
. the ability to meet any increased technological demands of our
customers; and
. economic conditions specific to our industry.
Therefore, our operating results for any particular quarter may differ
materially from our expectations or those of security analysts and may not be
indicative of future operating results. The failure to meet expectations may
cause the price of our common stock to decline substantially.
We may need additional funds which, if available, could result in an increase
in our interest expense or additional dilution to stockholders. If additional
funds are needed and are not available, our business could be negatively
impacted.
We currently anticipate that our available cash resources combined with the
net proceeds from this offering will be sufficient to fund our operating needs
for at least the next 24 months, including the expansion of our sales and
marketing program. Thereafter, we may require additional financing. At this
time, we do not have any bank credit facility or other working capital credit
line under which we may borrow funds for working capital or other general
corporate purposes. If our plans or assumptions change or are inaccurate, we
may be required to seek additional capital sooner than anticipated. We may need
to raise such capital through public or private debt or equity financing.
If funds are raised through the issuance of equity securities, the
percentage ownership of our then-current stockholders will be reduced and the
holders of new equity securities may have rights, preferences or privileges
senior to those of the holders of our common stock. If additional funds are
raised through a bank credit facility or the issuance of debt securities, the
holder of such indebtedness would have rights senior to your rights and the
terms of such indebtedness could impose restrictions on our operations. If we
need to raise additional funds, we may not be able to do so on terms favorable
to us, or at all. If we cannot raise adequate funds on acceptable terms, we may
not be able to continue to fund our operations.
New laws and regulations that impact our industry could adversely affect our
business.
We are not currently subject to direct regulation by the Federal
Communications Commission or any other governmental agency, other than
regulations applicable to businesses in general. However, in the future, we may
become subject to regulation by the FCC or another regulatory agency. In
addition, the wireless carriers who supply us airtime are subject to regulation
by the FCC and regulations that affect them could adversely affect our
business. Our business could suffer depending on the extent to which our
activities or those of our customers or suppliers are regulated.
Our stock price, like that of many technology companies, may be volatile and it
is difficult to predict whether a market for our common stock will develop.
We expect that the market price of our common stock will fluctuate as a
result of variations in our quarterly operating results. These fluctuations may
be exaggerated if the trading volume of our common stock
15
<PAGE>
is low. In addition, due to the technology-intensive and emerging nature of our
business, the market price of our common stock may rise and fall in response to
a variety of factors, including:
. announcements of technological or competitive developments;
. acquisitions or strategic alliances by us or our competitors;
. the gain or loss of a significant customer or order;
. changes in estimates of our financial performance or changes in
recommendations by securities analysts regarding us or our industry; or
. general market or economic conditions.
This risk may be heightened because our industry is new and evolving,
characterized by rapid technological change and susceptible to the introduction
of new competing technologies or competitors.
In addition, equity securities of many technology companies have experienced
significant price and volume fluctuations. These price and volume fluctuations
often have been unrelated to the operating performance of the affected
companies. Volatility in the market price of our common stock could result in
securities class action litigation. This type of litigation, regardless of the
outcome, could result in substantial costs and a diversion of management's
attention and resources.
We cannot predict the extent to which investor interest in our common stock
will lead to the development of a trading market or how liquid that market
might become. As discussed earlier, our financial results are difficult to
predict and could fluctuate significantly.
Upon completion of this offering, you will experience dilution.
Our tangible assets are readily identified assets like property, equipment,
cash, securities and accounts receivable. The value of these assets on a pro
forma as adjusted basis minus the value of our liabilities equals $ per
share, assuming the offering is completed. The offering price exceeds this
amount by $ . Therefore, you will be paying more for a share of stock than
the value reflected in our accounts of tangible assets for that share. If we
were forced to sell all our assets and distribute all the proceeds, you would
not recover the amount you paid for shares unless we can sell the assets for
more than the value we report for our tangible assets. We also have outstanding
a large number of stock options and warrants to purchase common stock with
exercise prices significantly below the price of shares in this offering. You
will experience further dilution to the extent these options or warrants are
exercised.
We have anti-takeover defenses that could delay or prevent an acquisition and
could adversely affect the price of our common stock.
Provisions of our certificate of incorporation and bylaws and provisions of
Delaware law could delay or prevent an acquisition or change of control of
GoAmerica or otherwise adversely affect the price of our common stock. For
example, our certificate of incorporation authorizes 5,000,000 shares of
undesignated preferred stock which our board of directors can designate and
issue without further action by our stockholders, establishes a classified
board of directors, eliminates the rights of stockholders to call a special
meeting of stockholders, eliminates the ability of stockholders to take action
by written consent, and requires stockholders to comply with advance notice
requirements before raising a matter at a stockholders' meeting. As a Delaware
corporation, we are also subject to the Delaware anti-takeover statute
contained in Section 203 of the Delaware General Corporation Law. Please refer
to "Description of Capital Stock" for a more detailed discussion of these
provisions.
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<PAGE>
Future sales of our common stock may negatively affect our stock price.
All the shares sold by us in this offering will be freely tradable.
Following this offering, a large number of other outstanding shares of our
common stock will be available for resale beginning at various points in time
in the future. The market price of our common stock could decline as a result
of sales of a large number of shares of our common stock in the market
following this offering, or the perception that such sales could occur. These
sales also might make it more difficult for us to sell equity securities in the
future at a time and at a price that we deem appropriate. For more information,
see "Shares Eligible for Future Sale." Our directors, executive officers, and
other stockholders, who collectively hold a total of shares of common
stock, have agreed not to dispose of any shares of common stock, subject to
limited exceptions, for a period of 180 days after the date of this prospectus,
without the prior written consent of Bear, Stearns & Co. Inc., on behalf of the
underwriters.
We will retain broad discretion in using the net proceeds from this offering
and may spend a substantial portion in ways in which you do not agree.
Our management will retain broad discretion to allocate the proceeds of this
offering. The proceeds may be spent in ways with which you and other
stockholders may not agree. Management's failure to spend the proceeds
effectively could have an adverse affect on our business, results of operation
and financial condition.
Because we do not intend to pay any cash dividends on our shares of common
stock, our stockholders will not be able to receive a return on their shares
unless they sell them.
We have never paid or declared any cash dividends on our common stock or
other securities and intend to retain any future earnings to finance the
development and expansion of our business. We do not anticipate paying any cash
dividends on our common stock in the foreseeable future. Unless we pay
dividends, our stockholders will not be able to receive a return on their
shares unless they sell them. See "Dividend Policy."
17
<PAGE>
USE OF PROCEEDS
We estimate that our net proceeds from the sale of the shares of
common stock that we are offering will be approximately $ million, assuming
an initial public offering price of $ per share, after deducting the
underwriting discount and estimated offering expenses. The net proceeds are
estimated to be approximately $ million if the underwriters fully exercise
their right to purchase additional shares of common stock to cover over-
allotments.
Our primary uses of the proceeds of this offering will be to:
. expand our sales and marketing initiatives;
. expand our customer service and support systems and capabilities;
. build our planned redundant network operating center;
. acquire and implement new automated subscriber airtime monitoring
systems and new accounting and financial software; and
. increase our working capital.
We expect that the acquisition and implementation of our automated
subscriber usage system and new accounting and business process software will
cost approximately $7.0 to $10.0 million over the next twelve months. We may
also use a portion of the net proceeds to finance acquisitions that complement
our business. Although we have discussions in the ordinary course of our
business with potential acquisition targets, we currently do not have any
binding commitments or agreements with respect to any acquisitions. See "Risk
Factors--We may acquire or make investments in companies or technologies that
could cause loss of value to our stockholders and disruption of our business."
Pending application of the net proceeds for the purposes described above, we
intend to invest such funds in short-term, investment-grade, interest bearing
securities. See "Risk Factors--We will retain broad discretion in using the net
proceeds from this offering and may spend a substantial portion in ways in
which you do not agree."
DIVIDEND POLICY
We have never declared or paid any cash dividends on our common stock. We
currently anticipate that we will retain any future earnings to fund the growth
and development of our business and, therefore, do not anticipate paying any
cash dividends in the foreseeable future. Payment of future dividends, if any,
will be at the discretion of our board of directors after taking into account
various factors, including our earnings, financial condition, operating results
and current and anticipated cash needs, as well as any economic conditions the
board of directors may deem relevant. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations--Liquidity and Capital
Resources."
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<PAGE>
CAPITALIZATION
The following table sets forth our cash and cash equivalents and
capitalization as of September 30, 1999. This unaudited information is
presented:
. on an actual basis;
. on a pro forma basis to give effect to: the issuance and sale of 500
additional shares of our Series A Preferred Stock in November 1999 for
aggregate proceeds of $500,000; the issuance and sale of 648,057 shares
of our Series B Preferred Stock in January 2000 for net proceeds of
approximately $25.2 million and 28,352 shares of common stock issued in
connection therewith; and the conversion of our Series A and Series B
Preferred Stock into an aggregate of 1,652,845 shares of common stock;
and
. on a pro forma as adjusted basis to give further effect to the sale by
us of shares of common stock offered by this prospectus, assuming an
initial public offering price of $ per share, after deducting the
underwriting discount and estimated offering expenses payable by us.
You should read this information together with "Selected Financial Data,"
our historical financial statements, and the notes relating to those financial
statements, and "Management's Discussion and Analysis of Financial Condition
and Results of Operations" which appear elsewhere in this prospectus.
<TABLE>
<CAPTION>
As of September 30, 1999
--------------------------------
Pro Pro forma as
Actual forma Adjusted
-------- -------- ------------
(in thousands,
except share and per share
data)
<S> <C> <C> <C>
Cash and cash equivalents.................... $ 7,317 $ 33,007 $
======== ======== ====
Series A redeemable convertible preferred
stock, $.01 par value, authorized: 10,000
actual and 10,500 shares pro forma and pro
forma as adjusted, respectively; issued and
outstanding: 10,000 shares actual and none
pro forma and pro forma as adjusted;
$10,000,000 liquidation preference.......... $ 9,802 $ -- $--
Series B redeemable convertible preferred
stock, $.01 par value, authorized: none
actual and 648,057 shares pro forma and pro
forma as adjusted; issued and outstanding:
none actual, pro forma and pro forma as
adjusted; $26,000,000 liquidation
preference.................................. -- -- --
Stockholders' equity (deficit):
Preferred Stock, $.01 par value,
authorized; 5,000,000 shares actual, pro
forma and pro forma as adjusted; issued
and outstanding: none actual, pro forma
and pro forma as adjusted................. -- -- --
Common Stock, $.01 par value, authorized:
5,000,000 actual, 45,000,000 shares pro
forma and pro forma as adjusted issued and
outstanding: 2,668,548 actual 4,349,745
pro forma; shares pro forma as
adjusted, respectively ................... 26 43
Additional paid-in capital................. 7,393 42,868
Deferred employee compensation............. (512) (512)
Accumulated deficit........................ (10,045) (10,045)
-------- -------- ----
Total stockholders' equity (deficit)..... (3,138) 32,354
-------- -------- ----
Total capitalization..................... $ 6,664 $ 32,354 $
======== ======== ====
</TABLE>
The number of shares as adjusted for this offering excludes:
. 1,339,500 shares of common stock authorized for issuance under our stock
option plans and employee stock purchase plan, of which 305,001 shares
were subject to outstanding options as of December 31, 1999 at a
weighted average exercise price of $7.39; and
. 161,625 shares of common stock issuable upon exercise of outstanding
warrants as of December 31, 1999 at a weighted average exercise price of
$9.26.
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<PAGE>
DILUTION
You will experience immediate and substantial dilution in the net tangible
book value per share of your common stock.
Our pro forma net tangible book value as of September 30, 1999, was $
million, or $ per share of common stock. Net tangible book value per share
is determined by dividing our tangible net worth (tangible assets less
liabilities), by the number of shares of common stock outstanding.
After giving effect to the sale of the shares of common stock offered by us
hereby, at an assumed initial public offering price of $ per share, and after
deducting the underwriting discounts and commissions and estimated offering
expenses payable by us, our pro forma net tangible book value as of September
30, 1999 was $ per share of common stock. This represents an immediate
increase in such net tangible book value of $ per share to our existing
investors and immediate dilution of $ per share to new investors
purchasing shares in this offering. The following table illustrates the per
share dilution.
<TABLE>
<S> <C> <C>
Assumed initial public offering price per share.................... $
Pro forma net tangible book value per share as of September 30,
1999............................................................ $
Increase per share attributable to this offering.................
Pro forma net tangible book value per share after this offering....
---
Dilution per share to new investors in this offering............... $
===
</TABLE>
The following table summarizes, on a pro forma basis as of September 30,
1999, the total number of shares of common stock purchased from us, the total
consideration paid and the average consideration per share paid by existing
investors and by new investors purchasing shares offered by us hereby, at an
assumed initial public offering price of $ per share. Underwriting discounts
and commissions and offering expenses have not been deducted.
<TABLE>
<CAPTION>
Shares Purchased Total Consideration
------------------- --------------------- Average Price
Number Percent Amount Percent Per Share
------- --------- --------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Existing investors...... % $ % $
New investors...........
------- --------- -------- ---------- ---
Total................. 100.0% $ 100.0% $
======= ========= ======== ========== ===
</TABLE>
The calculations above exclude from the number of outstanding shares of
common stock:
. 1,339,500 shares of common stock authorized for issuance under our stock
option plans and employee stock purchase plan, of which 305,001 shares
were subject to outstanding options as of December 31, 1999 at a
weighted average exercise price of $7.39; and
. 161,625 shares of common stock issuable upon exercise of outstanding
warrants as of December 31, 1999 at a weighted average exercise price of
$9.26.
To the extent that such options and warrants are exercised, there will be
further dilution to new investors.
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<PAGE>
SELECTED FINANCIAL DATA
The following selected statement of operations data for the period from
August 6, 1996, our date of inception, to December 31, 1996 and for the years
ended December 31, 1997 and 1998 and the following selected balance sheet data
as of December 31, 1996, 1997 and 1998 are derived from our audited financial
statements. The following selected interim statement of operations data for the
nine months ended September 30, 1998 and 1999 and the following selected
interim balance sheet data as of September 30, 1999 are derived from our
unaudited financial statements. The unaudited financial statements include all
adjustments, consisting of normal recurring accruals, which we consider
necessary for a fair presentation of our financial position and results of
operations for the interim periods. Our operating results for the nine months
ended September 30, 1999 are not necessarily a reliable indicator of the
results that may be expected for the entire year ended December 31, 1999.
The pro forma statement of operations data and the pro forma balance sheet
data presented below give effect to: the issuance and sale of 500 additional
shares of our Series A Preferred Stock and 648,057 shares of our Series B
Preferred Stock after September 30, 1999 for total net proceeds of
approximately $25.7 million; the issuance of 28,352 shares of common stock in
connection with the Series B Preferred Stock financing; and the conversion of
all of our Series A and Series B Preferred Stock into 1,652,845 shares of
common stock upon the closing of this offering, as if such conversion had
occurred at the dates of issuance. The pro forma as adjusted balance sheet data
reflects the sale of the shares of common stock offered by us in this
offering at an assumed initial public offering price of $ per share, after
deducting the underwriting discount and estimated offering expenses payable by
us. You should read the selected financial data together with our financial
statements and the sections of this prospectus entitled "Capitalization" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
21
<PAGE>
<TABLE>
<CAPTION>
Period from
August 6, Nine Months
1996 (date of Years Ended Ended
inception) to December 31, September 30,
December 31, ---------------- ----------------
1996 1997 1998 1998 1999
------------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
(in thousands, except per share data)
Statement of Operations Data:
Revenue:
Subscriber................. $ -- $ 115 $ 360 $ 184 $ 664
Equipment.................. -- 33 449 283 617
Other...................... -- 25 18 12 200
------ ------- ------- ------- -------
Total revenue.............. -- 173 827 479 1,481
Costs and expenses:
Cost of subscriber
revenue................... -- 88 304 155 1,983
Cost of equipment revenue.. -- 15 532 335 739
Sales and marketing........ 43 243 909 504 1,410
General and
administrative............ 175 841 1,549 1,065 2,737
Depreciation and
amortization.............. 3 32 124 69 182
Non-cash employee
compensation.............. 416
------ ------- ------- ------- -------
Total costs and expenses..... 221 1,219 3,418 2,128 (7,467)
------ ------- ------- ------- -------
Loss from operations......... (221) (1,046) (2,591) (1,649) (5,986)
Settlement costs............. -- -- -- -- (297)
Interest income.............. -- -- 14 -- 81
------ ------- ------- ------- -------
Net loss..................... $ (221) $(1,046) $(2,577) $(1,649) $(6,202)
====== ======= ======= ======= =======
Accretion of redemption value
of mandatorily
redeemable convertible pre-
ferred stock................ -- -- -- -- (10)
------ ------- ------- ------- -------
Net loss applicable to common
stockholders................ $ (221) $(1,046) $(2,577) $(1,649) $(6,212)
====== ======= ======= ======= =======
Basic net loss per share
applicable to common
stockholders................ $(0.13) $ (0.52) $ (1.12) $ (0.74) $ (2.33)
====== ======= ======= ======= =======
Diluted net loss per share
applicable to common
stockholders................ $(0.12) $ (0.50) $ (1.09) $ (0.72) $ (2.27)
====== ======= ======= ======= =======
Weighted average shares used
in computation of basic net
loss per share.............. 1,743 2,010 2,299 2,232 2,666
Weighted average shares used
in computation of diluted
net loss per share.......... 1,812 2,079 2,368 2,301 2,735
Pro forma basic net loss per
share....................... $ (2.10)
=======
Pro forma diluted net loss
per share................... $ (2.05)
=======
Weighted average shares used
in computation of pro forma
basic net loss per share.... 2,951
Weighted average shares used
in computation of pro forma
diluted net loss per share.. 3,020
</TABLE>
<TABLE>
<CAPTION>
As of December 31, As of September 30, 1999
-------------------- -----------------------------
Pro forma
1996 1997 1998 Actual Pro forma as adjusted
------------ ------- ------ --------- -----------
(in thousands)
<S> <C> <C> <C> <C> <C> <C>
Balance Sheet Data:
Cash and cash equivalents.. $ 587 $ 20 $ 1,961 $7,317 $33,007 $
Working capital (deficit).. 700 (143) 1,476 5,679 31,369
Total assets............... 791 324 3,010 9,425 35,115
Series A redeemable
convertible preferred
stock..................... -- -- -- 9,802 --
Series B redeemable
convertible preferred
stock..................... -- -- -- -- --
Stockholders' equity
(deficit)................. 779 148 2,225 (3,138) 32,354
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
Period from
August 6,
1996 (date of Years Ended Nine Months Ended
inception) to December 31, September 30,
December 31, ---------------- ------------------
1996 1997 1998 1998 1999
------------- ------ -------- -------- --------
(in thousands)
<S> <C> <C> <C> <C> <C>
Other Financial Data:
Cash provided by (used
in):
Operating activities... $ (338) $ (803) $ (2,215) $ (1,500) $ (3,973)
Investing activities... (74) (180) (498) (344) (599)
Financing activities... 1,000 415 4,654 3,984 9,928
</TABLE>
23
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
You should read the following discussion of our financial condition and
results of operations in conjunction with the financial statements and the
notes thereto included elsewhere in this prospectus. The results shown in this
prospectus are not necessarily indicative of the results we will achieve in any
future periods. This discussion contains forward-looking statements based upon
our current expectations which involve risks and uncertainties. Our actual
results could differ materially from those described in the forward-looking
statements due to a number of factors, including those set forth in the section
entitled "Risk Factors" and elsewhere in this prospectus.
Overview
We provide nationwide wireless Internet services. We derive our revenue
primarily from the sale of wireless data services and the sale of related
mobile devices to our subscribers. During March 1997, we commenced offering our
services to individuals and businesses. Our subscriber base has grown from
1,630 subscribers at December 31, 1998 to 5,859 subscribers at December 31,
1999. We had net losses of $1.0 million and $2.6 million for the years ended
December 31, 1997 and 1998, respectively, and a net loss of $6.2 million for
the nine months ended September 30, 1999.
Since our inception, we have invested significant capital to build our
wireless network operations and customer support centers as well as our
customized billing system. Recently, we have invested additional capital in the
development of our software application Go.Web and other software applications.
Our plan is to continue to invest in our network operations and customer
support centers, as well as to expand our sales and marketing efforts. We
provide and expect to continue to provide mobile devices made by third parties
to our customers at prices below our costs for such devices. We also expect to
continue to incur significant sales and marketing, systems development and
administrative expenses. We have incurred operating losses since our inception
and expect to continue to incur increasing operating losses for at least the
next several quarters. Therefore, we will need to generate significant revenue
to become profitable and sustain profitability on a quarterly or annual basis.
We will have to increase substantially our subscriber base in order to achieve
our business plan.
Our subscriber revenue primarily consists of monthly service fees, which we
recognize as services are provided to the subscriber. Subscriber revenue
accounted for approximately 43.5% and 44.8% of our total revenue during 1998
and the nine months ended September 30, 1999, respectively. We currently offer
two types of mobile data service plans. Our Go.Unlimited Plan provides
unlimited data usage on any mobile device for a fixed monthly fee, which is
currently $59.95 for retail subscribers. Our Go.Lite Plan provides a fixed
amount of data usage on any mobile computing device for a significantly lower
base monthly fee, which is currently $9.95 for retail subscribers. Under the
Go.Lite Plan, subscribers incur additional charges for data usage in excess of
the predetermined volume. However, we do not charge our subscribers any
additional amounts for roaming, which is using a mobile device outside of a
designated geographical area. We also generally charge a non-refundable
activation fee upon initial subscription. We offer new subscribers a 14 day
trial period during which they can cancel our service without any penalty.
Subscribers to our plans are subject to a six-month or one-year contract which
provides for an early cancellation fee.
We also typically sell third-party mobile devices in conjunction with a
service agreement to a new subscriber. Equipment revenue accounted for
approximately 54.3% and 41.7% of our total revenue during 1998 and the nine
months ended September 30, 1999, respectively. We recognize equipment revenue
at the time of the shipment of the mobile device to a subscriber. During the
nine months ended September 30, 1999, approximately 90% of our subscribers
purchased a mobile device upon their initial subscription. Over time, we expect
that such percentage will decrease as mobile devices for data transmission
become more prevalent.
In addition to our subscriber and equipment revenue, we historically have
generated other revenue which consists of consulting services relating to the
development and implementation of wireless data systems for
24
<PAGE>
certain corporate customers. We do not intend for consulting services to be a
significant element of our business in the future. Such consulting revenue is
recognized as the work is performed.
We have experienced negative overall gross margins, which consist of margins
on our subscriber revenue, equipment revenue and other revenue. We expect to
continue to experience negative overall gross margins primarily because of
negative margins on our resale of equipment and on our subscriber revenue. We
believe that our gross margins on subscriber revenue will improve during 2000.
Our cost of subscriber revenue consists primarily of wireless airtime costs.
Our airtime costs are determined by agreements we have with several wireless
carriers. Typically, we have one to three-year contracts to buy data network
capacity either for an agreed amount of kilobytes per subscriber at a flat fee
or on a cents-per-kilobyte basis. We intend to pass through to our subscribers
all the airtime charges that we incur from our wireless carriers; however, we
have not always been and will not always be able to pass through such charges
because the pricing plans offered to us by our wireless carriers and to which
we assign our subscribers may not allow us to always cover our subscriber
costs. For example, many of our subscribers have contracted for our
Go.Unlimited Plan, which provides for unlimited nationwide wireless Internet
service for a fixed monthly fee. If we assign those subscribers to a carrier
plan that charges us an increasing fee as subscriber usage increases, then as
subscriber usage and our related airtime costs increase, our margins on
subscriber revenues would decrease and may become negative. Our airtime costs
also increase substantially when subscribers use our services outside of their
pre-determined geographic area, which results in roaming charges to us by the
carriers that we do not pass on to our subscribers. We do not have and may not
be able to develop the automated systems necessary to monitor our subscribers'
usage and roaming patterns and quickly switch our subscribers to a more
appropriate, lower cost airtime plan. Our cost of subscriber revenue for the
nine months ended September 30, 1999 was approximately $2.0 million compared to
subscriber revenue of $664,000 for such period. Such negative gross margin,
which was a substantial increase over prior periods, was due in part to our
placement of subscribers in more expensive carrier plans and to excessive usage
by a few subscribers. In addition, while we continually seek to negotiate
better pricing of wireless airtime plans with our carriers, we cannot assure
you that we will be successful in that regard.
We seek to reduce our wireless airtime costs by periodically matching our
subscribers airtime usage needs to the most appropriate, lowest cost wireless
carrier plans. It is possible for a small number of subscribers, if we do not
assign them to the proper airtime pricing plan, to significantly increase our
costs. The current systems that we use to monitor the airtime charges that we
incur from our wireless carriers do not permit us to timely and effectively
respond to changes in volume and geographic location of subscriber usage, which
directly impact our costs of subscriber revenue. We currently use a manual
system to track such costs and monitor wireless plan usage. We intend to
implement alternative automated systems by mid-2000. In the interim, we have
implemented internal controls which we believe will reduce excessive usage of
our airtime plans. We cannot assure you that we will be able to acquire or
develop such automated control system or, if implemented, that our systems will
be able to monitor all subscriber usage or improve our gross margins.
In order to facilitate the sale of our wireless Internet services, the sales
prices of the third-party manufactured mobile devices that we sell to our
subscribers are generally below our costs for such devices. Additionally, we
have also provided many of our resellers and marketing partners with
complimentary mobile devices and GoAmerica service during a trial period in
order to facilitate additional sales of our services. While we believe that
such practices are commonplace in the wireless communications industry and we
intend to continue such practices, we have experienced, and expect to continue
to experience, negative gross margins on the mobile devices that we resell. We
currently are exploring an outsourcing arrangement with a third party computer
hardware aggregator that will serve as our primary source of mobile devices. We
believe that if such arrangement is implemented, we should be able to reduce
our equipment costs and inventory risks by taking advantage of such partner's
volume discounts and inventory protection programs offered to them by device
manufacturers. We cannot assure you that we will be able to consummate such
outsourcing arrangement on favorable terms, if at all. Further, such
arrangement may not result in positive gross margins on our equipment sales.
25
<PAGE>
Our sales and marketing expenses consist primarily of advertising and
promotions, cash compensation and related costs for marketing personnel,
travel and entertainment and other related costs. In 2000, we expect our sales
and marketing expense to increase substantially as a percentage of our annual
revenues. Our general and administrative expenses consist primarily of cash
compensation and related costs for general corporate, business development and
technology development personnel, along with rent and other related costs. Our
costs of performing consulting services is recorded as general and
administrative expense. We expect general and administrative expenses to
decrease as a percentage of our annual revenues. Depreciation and amortization
expenses consist primarily of depreciation expenses arising from equipment
purchased for our network operations center and other property and equipment
purchases.
During 1999, we granted options to certain of our employees at exercise
prices deemed to be below the fair market value per share of our common stock.
Such grants resulted in non-cash employee compensation expenses which have
been recorded to account for the difference, on the date of grant, between the
fair market value and the exercise price of stock options granted to
employees. The resulting deferred employee compensation will be amortized over
the vesting periods of the grants.
Net interest income consists primarily of interest earned on cash and cash
equivalents.
Results of Operations
The following table sets forth for the periods indicated certain financial
data as a percentage of revenue:
<TABLE>
<CAPTION>
Percentage of Revenue
----------------------------------
Year Ended Nine Months Ended
December 31, September,
-------------- ------------------
1997 1998 1998 1999
------ ------ -------- --------
<S> <C> <C> <C> <C>
Revenue:
Subscriber................................ 66.3% 43.5% 38.4% 44.8%
Equipment................................. 19.4 54.3 59.1 41.7
Other..................................... 14.3 2.2 2.5 13.5
------ ------ -------- --------
Total revenue........................... 100.0 100.0 100.0 100.0
Costs and expenses:
Cost of subscriber revenue................ 50.7 36.7 32.4 133.8
Cost of equipment revenue................. 8.7 64.4 70.0 49.9
Sales and marketing....................... 140.5 109.9 105.4 95.2
General and administrative................ 486.9 187.4 222.5 184.8
Depreciation and amortization............. 18.7 15.0 14.3 12.3
Non-cash employee compensation............ -- -- -- 28.1
------ ------ -------- --------
Total costs and expenses................ 705.5 413.4 444.6 504.1
------ ------ -------- --------
Loss from operations.................... 605.5 313.4 344.6 404.1
Settlement costs............................ -- -- -- (20.1)
Interest income............................. -- 1.7 -- 5.4
------ ------ -------- --------
Net loss................................ 605.5% 311.7% 344.6% 418.8%
====== ====== ======== ========
</TABLE>
Nine Months Ended September 30, 1999 Compared to Nine Months Ended September
30, 1998
Subscriber revenue. Subscriber revenue increased from $184,000 for the nine
months ended September 30, 1998 to $664,000 for the nine months ended
September 30, 1999. The increase primarily was due to having a larger
subscriber base in the nine months ended September 30, 1999 than in the nine
months ended September 30, 1998. Our increase in subscriber revenue was offset
in part by lower average revenue per subscriber. Our subscriber base increased
from 1,630 subscribers at December 31, 1998 to 3,887 subscribers at September
30, 1999. We expect the number of our subscribers to increase as a result of
our expanded sales and marketing efforts.
26
<PAGE>
Equipment revenue. Equipment revenue increased from $283,000 for the nine
months ended September 30, 1998 to $617,000 for the nine months ended September
30, 1999. This increase primarily was due to an increase in the number of the
mobile devices sold during the nine months ended September 30, 1999 compared to
the nine months ended September 30, 1998.
Other revenue. Other revenue increased from $12,000 for the nine months
ended September 30, 1998 to $200,000 for the nine months ended September 30,
1999. This increase primarily was due to the performance of a single systems
integration consulting project for a third party during the nine months ended
September 30, 1999 compared to the nine months ended September 30, 1998.
Consulting services are not expected to be a significant element of our
business in the future.
Cost of subscriber revenue. Cost of subscriber revenue increased from
$155,000 for the nine months ended September 30, 1998 to $2.0 million for the
nine months ended September 30, 1999. This increase primarily was due to an
increase in our subscriber base and a related increase in airtime usage during
the nine months ended September 30, 1999 than in the nine months ended
September 30, 1998. We expect the number of subscribers and related use of our
services to increase which will result in an increase in the cost of subscriber
revenue.
Cost of equipment revenue. Cost of equipment revenue increased from $335,000
for the nine months ended September 30, 1998 to $739,000 for the nine months
ended September 30, 1999. This increase was primarily due to an increase in the
number of mobile devices sold the during the nine months ended September 30,
1999 compared to the nine months ended September 30, 1998.
Sales and marketing. Sales and marketing expenses increased from $504,000
for the nine months ended September 30, 1998 to $1.4 million for the nine
months ended September 30, 1999. This increase was primarily due to increased
advertising costs paid to third parties and the salaries and benefits for the
additional personnel performing sales and marketing activities. We expect sales
and marketing expenses to further increase as we expand our advertising program
to increase brand awareness and add personnel to our sales and marketing
department.
General and administrative. General and administrative expenses increased
from $1.1 million for the nine months ended September 30, 1998 to $2.7 million
for the nine months ended September 30, 1999. This increase was primarily due
to the addition of salaries and benefits for personnel performing business
development and general corporate activities. We expect general and
administrative expenses to increase as we add personnel and incur additional
expenses related to the anticipated growth of our business and costs associated
with our operation as a public company.
Non-cash employee compensation. Non-cash employee compensation for the nine
months ended September 30, 1999 represents the amortization of deferred
employee compensation recorded to account for the difference, on the date of
grant, between the fair market value and the exercise price of stock options
granted to employees. No stock option grants were made prior to 1999.
Settlement costs. Settlement costs for the nine months ended September 30,
1999 represents the non-cash charge resulting from the settlement of our
obligations arising from claims by certain stockholders relating to the sale of
equity securities.
Interest income. Interest income was $81,000 for the nine months ended
September 30, 1999. Such income was primarily due to increased cash balances as
a result of our private placement financings completed in 1999.
Year Ended December 31, 1998 Compared to Year Ended December 31, 1997 and
Period from Inception at August 6, 1996 to December 31, 1996
Subscriber revenue. There was no subscriber revenue for the inception period
ended December 31, 1996. Subscriber revenue increased from $115,000 to $359,000
for the years ended December 31, 1997 and
27
<PAGE>
December 31, 1998, respectively. The increase in subscriber revenue was
primarily due to having a larger subscriber base in 1998 than in 1997. Our
subscriber base increased from 531 subscribers at December 31, 1997 to 1,630
subscribers at December 31, 1998.
Equipment revenue. There was no equipment revenue for the inception period
ended December 31, 1996. Equipment revenue increased from $33,000 to $449,000
for the years ended December 31, 1997 and December 31, 1998, respectively. The
increase in equipment revenue was primarily due to an increase in the number of
mobile devices sold during the year ended December 31, 1998 compared to the
year ended December 31, 1997.
Other revenue. There was no other revenue for the inception period ended
December 31, 1996. Other revenue decreased from $25,000 for the year ended
December 31, 1997 to $18,000 for the year ended December 31, 1998.
Cost of subscriber revenue. There was no cost of subscriber revenue for the
inception period ended December 31, 1996. Cost of subscriber revenue increased
from $88,000 to $303,000 for the years ended December 31, 1997 and December 31,
1998, respectively. We began to incur costs of subscriber revenue in March 1997
as we launched our wireless services. The increase in the cost of subscriber
revenue from 1997 to 1998 was primarily due to an increase in our subscriber
base and related increase in airtime usage.
Cost of equipment revenue. There was no cost of equipment revenue for the
inception period ended December 31, 1996. Cost of equipment revenue increased
from $15,000 to $532,000 for the years ended December 31, 1997 and December 31,
1998, respectively. We began to sell mobile devices in March 1997 in
conjunction with the launch of our wireless services. The increase in the cost
of equipment revenue from 1997 to 1998 was primarily due to an increase in the
number of mobile devices sold during the year ended December 31, 1998 compared
to the year ended December 31, 1997.
Sales and marketing. Sales and marketing expenses increased from $43,000 to
$243,000 for the inception period ended December 31, 1996 and year ended
December 31, 1997, respectively, and increased to $909,000 for the year ended
December 31, 1998. These increases were primarily due to increased advertising
costs paid to third parties and the salaries and benefits for additional
personnel performing sales and marketing activities. We expect sales and
marketing expenses to increase as we expand our advertising program to increase
brand awareness and add personnel to our sales and marketing department.
General and administrative. General and administrative expenses increased
from $175,000 to $841,000 for the inception period ended December 31, 1996 and
year ended December 31, 1997, respectively, and increased to $1.5 million for
the year ended December 31, 1998. These increases were primarily due to the
salaries and benefits for additional personnel performing business development
and general corporate activities. We expect general and administrative expenses
to increase as we add personnel and incur additional expenses related to the
anticipated growth of our business and costs associated with our operation as a
public company.
Interest income. There was no interest income earned for the inception
period ended December 31, 1996 or the year ended December 31, 1997. Net
interest income was $14,000 for the year ended December 31, 1998. The increase
for year ended December 31, 1998 was primarily due to increased cash balances.
Liquidity and Capital Resources
Since our inception, we have financed our operations primarily through
private placements of our equity securities and our redeemable convertible
preferred stock, which have resulted in aggregate net proceeds of approximately
$16.0 million through September 30, 1999, of which approximately $9.8 million
was raised since June 1999. As of September 30, 1999, we had $7.3 million in
cash and cash equivalents and $5.7 million of working capital. Subsequent to
September 30, 1999, we issued and sold 500 shares of Series A Preferred Stock
and 292,345 shares of common stock resulting in aggregate proceeds to us of
approximately $2.5 million. In addition, on January 17, 2000, we executed a
binding stock purchase agreement with Dell USA L.P., Impact Venture Partners,
L.P., Carousel Capital Partners, L.P. and Forstmann Little & Co. Equity
28
<PAGE>
Partnership-VI, L.P. pursuant to which we will issue and sell an aggregate of
648,057 shares of Series B Preferred Stock for net proceeds of approximately
$25.2 million. We anticipate that the closing of such transaction will occur
during January 2000.
Net cash used in operating activities was $338,000, $803,000 and $2.2
million for the inception period ended December 31, 1996 and for the years
ended December 31, 1997 and 1998, respectively, and $4.0 million for the nine
months ended September 30, 1999. The principal use of cash in each of these
periods was to fund our losses from operations.
Net cash used in investing activities was $74,000, $180,000, and $498,000
for the inception period ended December 31, 1996 and for the years ended
December 31, 1997 and 1998, respectively, and $599,000 for the nine months
ended September 30, 1999. Cash used in investing activities for the inception
period ended December 31, 1996 and the year ended December 31, 1997 was for
purchases of property, equipment and leasehold improvements. For the nine
months ended September 30, 1999, we used cash in investment activities for
purchases of $343,000 of property, equipment and leasehold improvements and the
purchase of $256,000 of preferred stock in DataRover Mobile Systems, Inc.
Net cash provided by financing activities was $1.0 million, $415,000 and
$4.7 million for the inception period ended December 31, 1996 and for the years
ended December 31, 1997 and 1998, respectively, and $9.9 million for the nine
months ended September 30, 1999. Cash provided by financing activities in each
of these periods was primarily attributable to proceeds from additional private
sales of our equity securities.
As of September 30, 1999, our principal commitments consisted of obligations
outstanding under operating leases. As of September 30, 1999, future minimum
payments for non-cancelable operating leases having terms in excess of one year
amounted to $3.2 million, of which $147,000 is payable in 1999 and $318,000 is
payable in 2000. On December 15, 1999, we entered into a facilities maintenance
agreement for a new network operating center in New York City. This agreement
obligates us to make aggregate payments of approximately $1.6 million through
2004. Although we have no material commitments for capital expenditures, we
anticipate a substantial increase in our capital expenditures and lease
commitments consistent with our anticipated growth in operations,
infrastructure and personnel, including the deployment of additional network
equipment.
We have undertaken several operating initiatives which will require
significant use of our cash resources. For example, we intend to use a
significant portion of the proceeds of this offering to increase substantially
our marketing budget as part of our efforts to build the GoAmerica brand. If
our marketing efforts cost more than anticipated, if we cannot increase our
brand awareness or if the GoAmerica brand is not well received by our existing
and potential subscribers, our losses and cash needs will increase. In
addition, we are pursuing the acquisition and development of automated systems
to track our airtime usage costs and monitor subscribers' wireless plan usage.
We also intend to acquire new accounting and business process software and
systems with a portion of the net proceeds from this offering. We expect that
the acquisition and implementation of our automated subscriber usage monitoring
systems and new accounting and business process software will cost
approximately $7.0 to $10.0 million over the next twelve months. We anticipate
that our development costs related to improving our service offerings will also
increase as we respond to technological changes in the wireless data industry
and as new competitors emerge. We may also need funds to complete any business
acquisitions that we may decide to pursue and to integrate such businesses,
technologies and personnel upon completion of any such transaction.
We currently anticipate that our available cash resources combined with the
net proceeds from this offering will be sufficient to fund our operating needs
for at least the next 24 months. Thereafter, we may require additional
financing. At this time, we do not have any bank credit facility or other
working capital credit line under which we may borrow funds for working capital
or other general corporate purposes. If our plans or assumptions change or are
inaccurate, we may be required to seek additional capital or to seek capital
sooner than anticipated. We may need to raise funds through public or private
debt or equity financing.
29
<PAGE>
Recent Accounting Pronouncements
In June 1998, the FASB issued Statement of Financial Accounting Standards
No. 133, "Accounting for Derivatives and Hedging Activities" (SFAS 133), which
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts
(collectively referred to as derivatives) and for hedging activities. SFAS 133,
as amended, is effective for all fiscal quarters of fiscal years beginning
after June 15, 2000. As we do not currently intend to engage in derivatives or
hedging transactions, we do not anticipate that there will be any impact on our
results of operations, financial position or cash flows upon the adoption of
SFAS 133.
Quantitative and Qualitative Disclosures About Market Risk
We have limited exposure to financial market risks, including changes in
interest rates. At September 30, 1999, all of our available excess funds are
cash or cash equivalents whose value is not subject to changes in interest
rates. We currently hold no derivative instruments and do not earn foreign-
source income. We expect to invest our cash only in debt obligations issued by
the U.S. government or its agencies with maturities of less than one year.
Update on Year 2000 Computer Issues
We did not experience any computer or systems problems relating to the Year
2000. Upon review of our internal and external systems during 1999, we
determined that we did not have any material exposure to such computer problems
and that the software and systems required to operate our business and provide
our services were Year 2000 compliant. As a result, we did not incur, and do
not expect to incur, any material expenditures relating to Year 2000 systems
remediation.
30
<PAGE>
BUSINESS
Overview
We are a leading provider of nationwide wireless Internet services, also
known as wireless ISP services. We enable our individual and business
subscribers to access remotely the Internet, email and corporate intranets in
real time through a wide variety of mobile computing and communications
devices. Through our Wireless Internet Connectivity Center, we offer our
subscribers comprehensive and flexible mobile data solutions for wireless
Internet access by providing wireless network services, mobile devices,
software and subscriber service and support.
Our Go.Web technology and Wireless Internet Connectivity Center enable our
subscribers to access a wide variety of Internet content, such as business and
financial data, news, sports, travel, entertainment, personal contact and other
information. Our subscribers can also conduct ecommerce transactions, such as
shopping, reservations and stock trading, to the extent permitted by their
mobile device of choice. Our subscribers can also customize their personal Web
site or "personal portal," www.mygoweb.com, to access their favorite Web sites
quickly. In addition, we offer a variety of email solutions which allow our
subscribers to access their email at their existing Internet and business email
accounts as well as a GoAmerica email address.
We provide our subscribers with flexible and reliable wireless ISP services
across a number of wireless networks and mobile device platforms. We have
established strategic relationships with many leading wireless network
carriers, such as AT&T Wireless Services, American Mobile, BellSouth Wireless
Data and Bell Atlantic Mobile. Our subscribers are able to use our wireless ISP
services with their choice of a wide variety of leading mobile devices,
including Palm OS-based computing devices, Research In Motion's interactive
pagers, laptop computers, Windows CE-based computers and WAP-enabled smart
phones. We also have engineered our wireless ISP services to operate with many
next generation wireless devices.
Market Opportunity
We believe that the growth of the Internet, email and mobile wireless
communications creates a significant market opportunity for service providers
capable of delivering wireless Internet and email services over wireless
communication networks. We believe that the following trends contribute to this
market opportunity:
The Growth of the Internet and Ecommerce. The Internet and corporate
intranets are becoming an increasingly important global medium for
communications and commerce. The number of Internet users worldwide is
projected to increase from approximately 140 million at the end of 1998 to over
500 million by the end of 2003, according to International Data Corporation. In
addition, International Data Corporation estimates that the worldwide volume of
commerce conducted over the Internet was approximately $50 billion in 1998 and
will grow to approximately $1.3 trillion in 2003. Until recently, ecommerce has
been dependent upon wired computer access to the Internet, which we believe has
limited the overall demand and ability to conduct commercial transactions
electronically. The ability to access the Internet remotely through a variety
of wireless devices on a nationwide basis will, we believe, fuel the increasing
demand for ecommerce. We further believe that the growth of the Internet and
ecommerce will also increase the demand for wireless access to these services.
The Proliferation of Email. Email is becoming an increasingly important
means of communication, with both the number of email users and usage level per
individual projected to increase significantly. Forrester Research, Inc.
projects that daily Internet email traffic in the United States will increase
from 100 million email messages per day in 1996 to 1.5 billion per day in 2002.
We believe that as email becomes an increasingly important means of
communication, there will be an increasing desire for mobile access to email.
The Growth of Mobile Communications. International Data Corporation
forecasts that the remote and mobile workforce in the United States, defined as
employees spending more than 20% of their time away from the office, will grow
from 34 million individuals at the end of 1998 to 47 million at the end of
2003. As a
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result, we believe that individuals will increasingly use mobile devices for
convenience and to enhance productivity when away from their home or office. We
further believe that the number of individuals using mobile devices, such as
handheld personal organizers, notebook computers, pagers and mobile phones,
will grow as these devices become smaller, less expensive, more reliable
including longer battery life and have more features than earlier devices.
Jupiter Communications estimates that shipments of advanced pagers and personal
organizers capable of accessing the Internet will grow from 1.8 million devices
in 1998 to 9.4 million in 2002.
The Challenge
While the wireless data services market is developing rapidly, widespread
adoption of wireless data services has been hindered by a number of factors,
including:
. limited geographic coverage of digital communications services;
. incompatible mobile devices and wireless carrier networks;
. high costs associated with using wireless data networks;
. an inability to access and transmit data over wireless networks at
adequate speeds;
. data security concerns;
. a lack of personnel with the expertise to develop and operate wireless
data systems; and
. mobile devices with difficult-to-read user interfaces and features.
As a result of these challenges, a significant opportunity exists for
wireless Internet service providers that are capable of offering an easy-to-
use, cost-effective and reliable wireless service.
The GoAmerica Wireless Solution
We provide our subscribers with easy-to-use wireless access to the Internet,
email and corporate intranets. Through our Wireless Internet Connectivity
Center, we offer our subscribers comprehensive and flexible mobile data
solutions for wireless Internet access by providing wireless network services,
mobile devices, software and subscriber service and support. The following are
key components of our comprehensive wireless Internet solution:
Offer Easy-To-Use Wireless Internet Access, Ecommerce and Email. Through our
Go.Web technology, we provide our subscribers with easy-to-use access to the
Internet. Our subscribers can access Web sites to obtain a broad variety of
content, such as business and financial data, news, sports, travel,
entertainment, personal contact and other information. Our subscribers can also
conduct ecommerce transactions, such as shopping, reservations and stock
trading, to the extent permitted by their mobile device of choice. We also
offer our subscribers their own personal Web site, www.mygoweb.com, which each
subscriber can customize in order to access their favorite Web sites quickly.
In addition, we offer a variety of email solutions, which allow our subscribers
to access their email at their existing Internet and business email accounts as
well as a GoAmerica email account.
Provide Nationwide Services Across Multiple Wireless Networks. We have
established relationships with many of the leading wireless network carriers,
including AT&T Wireless Services, American Mobile, Bell Atlantic Mobile and
BellSouth Wireless Data, which enable our subscribers to access their
information on a nationwide basis. Our network carriers operate on a variety of
different network technologies, such as Cellular Digital Packet Data, or CDPD,
Mobitex, dataTAC, Code Division Multiple Access, or CDMA, and Global System for
Mobile telecommunications, or GSM, which allow us to offer our services through
a broad range of wireless devices. Our airtime agreements with wireless
carriers permit us to offer our subscribers a flat-rate pricing plan and a
variable pricing plan with rates which vary depending upon the level of data
traffic utilized by a subscriber. In addition, our relationships with wireless
network carriers enable us continually to adapt our existing solutions and
develop new systems to integrate with new technologies and platforms as they
emerge for commercial use.
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Enable Wireless Services Through a Wide Variety of Mobile Devices. We
currently offer our services through a wide variety of wireless access devices
including Palm OS-based computing devices, Research-In-Motion's interactive
pagers, laptop computers, Windows CE-based computers and WAP-enabled smart
phones. We are able to provide service through these devices because we support
a range of wireless networks and utilize our own and third-party device
software. This capability enables us to offer service through devices that we
believe will achieve the greatest market acceptance and penetration.
Integrate Various Wireless Technologies and Networks to Provide Seamless
Internet Solutions. We deliver content across a broad range of wireless carrier
networks to a wide variety of mobile devices. We are able to do so through our
Wireless Internet Connectivity Center, which serves as a secure link between
broadband networks, such as the Internet, and narrowband wireless
communications networks. By using our own and third-party software, we compress
content from broadband sources to enable faster and more cost-effective data
delivery over wireless networks. We support leading wireless protocols, such as
wireless application protocol, or WAP. In addition, our Wireless Internet
Connectivity Center has the flexibility to format content automatically to meet
the requirements of a subscriber's wireless device. Our Wireless Internet
Connectivity Center is also scalable, enabling us to move quickly to meet the
demands of increased data traffic and expanding wireless network capabilities.
Offer Flexible Wireless Solutions for Corporate Customers. Businesses often
require wireless solutions that enable them to provide their customers and
employees with access to proprietary information, corporate services, the
Internet and email. However, many businesses do not have the financial and
administrative resources, internal information technology capabilities and size
required to develop and maintain wireless services on a cost-effective basis.
We provide corporate customers with a broad range of secure and reliable
wireless solutions by outsourcing our Wireless Internet Connectivity Center and
wireless networking expertise. Through our services, corporate customers can
enable employees and customers to access the Internet, intranets and Internet-
based email. Businesses can also enable wireless access to their internal
corporate databases and systems by securely interconnecting with our Wireless
Internet Connectivity Center.
Focus on Subscriber Service and Support. We strive to provide our
subscribers with easy-to-use wireless Internet services. This begins with
providing customers with flexible wireless solutions that include all the
necessary components to enable service. In addition, we provide our customers
with advice during their purchase decision process through our direct sales
representatives, dealers, resellers and Web site, in order to help them choose
the appropriate combination of device, carrier service and pricing plan. Once a
subscriber has initiated services, we offer extensive customer service and
support. We maintain toll free customer service phone lines Monday through
Friday, 8 a.m. to 8 p.m. Eastern time. Existing subscribers can inquire about
their accounts or receive technical support through the same toll free service.
The following chart illustrates the wide variety of mobile devices and
communications networks that we provide to our subscribers to enable them to
seamlessly access the Internet and their corporate networks to obtain critical
information and conduct electronic transactions:
Graphic appears here. The graphic depicts four boxes aligned from left to
right.
. The first box, which is labelled "Content" includes the text "World Wide
Web" and "Corporate Intranets" with an accompanying photograph of the
globe.
. The second box, which is labelled "The Wireless Internet Connectivity
Center", includes the text "Go.Web" and "Go.Web formatting, encryption,
authentication, and compression architecture" jand has an accompanying
photograph of computer technology.
. The third box, which is labelled "Networks", includes the text "CDPD",
"CDMA", "dataTac", "GSM" and "Mobitex" and has an accompanying
photograph of network components.
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. The fourth box, which is labelled "Mobile Devices", includes the text
"WAP Phones","Windows CE", "Palm OS", "Interactive Pagers" and "Laptops"
and has an accompanying photograph of each of such devices. At the
bottom of such page the following text appears: "Through our Wireless
Internet Connectivity Center, we offer our subscribers comprehensive and
flexible mobile data solutions for wireless Internet access by providing
wireless network services, mobile devices, software and subscriber
service and support."
The GoAmerica Strategy
Our goal is to be the leading provider of nationwide wireless Internet
services and mobile data solutions for individuals and businesses. We seek to
enhance our offerings with value-added services and additional functionality to
expand our subscriber base and increase our recurring revenues. Our strategy
includes the following key elements:
Offer Comprehensive and Flexible Solutions. We continually improve our
subscribers' wireless experience by simplifying user interfaces, expanding the
features of the Go.Web services, and improving the ease with which our
subscribers can personalize the mygo.web menus. We also intend to complement
our Web-based service offerings by providing customized solutions that meet the
specific needs of our existing and potential subscribers. For example, we
recently entered into strategic arrangements that will provide our subscribers
with direct access to Avis Rent-A-Car's rental car reservations system and
Lexis-Nexis' legal libraries and related data. We also introduced one-way
paging services which we can provide as an added feature for our Internet and
email subscribers.
Capitalize on Marketing and Branding Initiatives. We market and advertise in
order to establish our brand name and create sales opportunities. With a
portion of the net proceeds from this offering we intend to expand
significantly our presence as a mass market provider of wireless Internet
access by making a significant investment in establishing and building the
GoAmerica brand. Through a combination of mass media advertising and Web
advertising, we seek to expand our subscriber base, strengthen our customer
relationships and capture significant market share. We supplement our existing
subscriber acquisition programs through value-added reseller and dealer co-
marketing programs and partner marketing programs such as our relationship with
Lexis-Nexis. We have and will continue to target market segments and geographic
markets where we believe there is opportunity for substantial subscriber
penetration.
Expand Sales and Distribution Channels. We currently sell our services
through a combination of direct sales representatives, inbound telemarketers,
our Web site and through indirect channels such as value-added resellers and
dealers. In addition, we seek to generate sales from joint selling agreements
we have with third parties. As of December 31, 1999, we had one full-time
direct sales professional who focuses on small to mid-sized corporate
subscriber accounts and two full-time telemarketers who focus on our individual
customers. We intend to increase our dedicated sales force significantly during
the next twelve months. We have a four-tiered channel program that includes
resellers, master dealers, dealers and agents. We compensate our resellers and
dealers with commissions for each sale generated by them. As of December 31,
1999, we had four channel manager professionals. We intend to expand
significantly our indirect channel activities during the next twelve months. We
have partnered and seek to continue to partner for joint selling purposes with
other companies that have complementary wireless data products or services such
as manufacturers, application partners and cellular and PCS carriers.
Provide Superior Customer Service and Technical Support. Because wireless
Internet access is an evolving and growing communications channel, subscribers
may face a number of potential problems. We believe that even sophisticated
subscribers periodically have questions or encounter problems as applications
designed for wireless data proliferate. Consequently, we focus on providing
high levels of customer service and technical support in an effort to achieve
maximum levels of customer satisfaction. We intend to offer our customer
service and support 24 hours a day, seven days a week. In addition, through our
planned automation system, subscribers will be able to manage their accounts
and troubleshoot 24 hours a day at our Web site. We believe that superior
customer service will help us minimize subscriber deactivations and promote
customer referrals.
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Continue to Develop Solutions With Leading Wireless Technologies. We focus
our technology development efforts on applications and solutions which
integrate with and enable leading third-party mobile devices and wireless
networks. We also intend to continue to develop solutions that we expect will
allow our Go.Web service to operate on next generation protocols, devices and
networks. We believe that our relationships with leading device manufacturers
and wireless network carriers enhance our ability to continually adapt our
existing solutions and develop new systems to integrate with new technologies
and platforms as they emerge for commercial use.
Pursue Strategic Acquisitions. We intend to pursue acquisitions that we
believe will allow us to increase quickly the scale and scope of our resources.
In particular, we expect to seek acquisitions that will expand our subscriber
base or engineering force, enable us to enter new markets or industry sectors
or to provide new services.
Service Offerings
We offer comprehensive and flexible wireless data solutions that permit
subscribers to access their email, corporate intranets, personal Web pages and
the Internet anytime on a nationwide basis.
Access to the Internet. Our subscribers efficiently and reliably access
public Web sites from all our supported devices. Through our Go.Web service, we
provide a personal menu of popular Web sites which enable our subscribers to
access a wide variety of Internet content, such as business and financial data,
news, sports, travel, entertainment, personal contact and other information.
Our subscribers can also conduct ecommerce transactions, such as shopping,
reservations and stock trading, to the extent permitted by their mobile device
of choice. This menu is organized by major content categories and reduces the
amount of time and the amount of data input it takes for our customers to
access these sites. The dynamic nature of the menu allows us to update it
periodically and add valuable wireless Web sites for our subscribers. Our menu
also allows our corporate subscribers to pre-determine the choices available to
their users. Through business arrangements, we offer streamlined access to
public databases such as those from Lexis-Nexis, as well as personal ecommerce
access to banking, brokerage and shopping services. Mygo.web allows our
subscribers to customize their menus by bookmarking and linking to their Web
sites of choice.
Access to Corporate Networks. Our business customers often require secure
connections to their enterprise systems, but do not want to change the way that
their systems are configured. Through our virtual private network and data
hosting services, we provide the required secure and reliable wireless access
to corporate data. Business users can access their corporate databases through
Web servers either inside our firewall or their own security system. Through
standard Internet interfaces, our corporate subscribers can access their
enterprise messaging systems such as Microsoft Exchange and Lotus Notes or use
value-added services such as sales force automation, customer retention
management and Web dispatch offerings.
Email Services. Our services provide individual and business subscribers
access to the wide variety of Internet based email services. We also provide an
email address at goamerica.net for all of our subscribers as a free service.
Our business subscribers are able to fully manage their email accounts if their
corporate networks permit remote access. In such cases, our subscribers can
send, receive, read, reply, forward and delete their regular corporate email on
a remote basis. Individual subscribers who have accounts at Internet service
providers or Web portals, such as Earthlink or Yahoo!, can access those email
accounts when they are using their existing wireline service or their GoAmerica
wireless Internet service.
Instant Messaging, Paging and Operator Services. We currently provide an
instant messaging service between GoAmerica subscribers with compatible
interactive pagers that generally provides quicker transmission than
traditional paging. Our instant messaging service also provides confirmation of
message delivery and a read receipt between sender and recipient. In addition,
through our business alliances with paging service providers, we also provide
traditional paging and operator services that allow our subscribers to migrate
from one-way to two-way services without disruption.
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Customers
We sell and market to individual and corporate customers. Our subscriber
base has grown from 1,630 subscribers at December 31, 1998 to 5,859 subscribers
at December 31, 1999. We generally target our corporate marketing and selling
efforts toward decision-makers within communication-intensive small to mid-
sized businesses. We focus our individual consumer customer marketing and
selling efforts on high-end mobile professionals. These mobile professionals
typically have computer and Internet access, use a cellular phone or pager, and
have a strong professional or personal need to stay in touch with Web-based
information. The majority of our subscribers today are corporate customers, but
we expect over time that individual consumers will represent a larger portion
of our subscriber base. We continually seek to enhance and expand our service
offerings for our customers which we believe is a critical element in growing
our subscriber base and maintaining customer satisfaction.
We also develop corporate solutions which enable us to expand our subscriber
base while allowing our corporate partner to enhance its service offerings to
its customers. For example, regional wireless service provider, Frontier
Cellular, uses our hosting services for its wireless data products. We host and
manage Phone.com WAP servers at our Wireless Internet Connectivity Center for
Frontier and provide our content to digital PCS phones on Frontier's network.
We also developed a customer management interface to allow Frontier to
provision and manage its customers remotely. We connect to Frontier's network
over a virtual private network that we engineered jointly with Frontier. This
virtual private network connection provides the security required by Frontier
and is similar to connections deployed for our other corporate customers.
Sales and Marketing
Sales
We currently sell our services directly through a combination of sales
representatives, inbound telemarketers and our Web site and sell indirectly
through value-added resellers and dealers. In addition, we seek to generate
sales from joint marketing relationships, such as the relationship we have with
Sierra Wireless.
Direct Sales Representatives. As of December 31, 1999, we had one direct
sales professional who focuses primarily on small to mid-sized corporate
customers seeking to establish wireless Internet services for their employees
or customers. We intend to grow our direct sales force significantly over the
next 12 months. Our business development personnel and senior executives,
particularly our chief executive officer and executive vice president, also
spend a considerable amount of their time developing potential customer
relationships and selling and promoting our services.
Telemarketing. As of December 31, 1999, we had two telemarketing
professionals. Our telemarketing professionals respond to queries generated as
a result of Web site visits and our marketing efforts which usually list our
toll-free sales telephone number.
GoAmerica Web Site. Our Web site seeks to educate and inform potential
customers about wireless data networks and devices. When a customer is ready to
order, they can order directly through an online subscription form that is
automated with our order entry and product fulfillment operations. We receive
no advertising or sponsorship revenues from our Web site currently. We will
continue to explore ways to gain revenues from our Web site.
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Value-Added Resellers and Dealers. Through our GoAmerica Alliance Program,
we provide commissions to value-added resellers and dealers for each sale they
bring to us. As of December 31, 1999, we had four channel manager professionals
and a four-tiered program that includes resellers, master dealers, dealers and
agents.
Resellers buy GoAmerica service at a wholesale price and sell it at a retail
price. Resellers are not paid a commission. Resellers are responsible for
selling the GoAmerica service and mobile devices, and billing and supporting
the customer. GoAmerica is responsible for billing the reseller. We believe
that as of December 31, 1999, our resellers had in excess of 200 direct sales
professionals. In addition, in January 2000, we added significantly to our
reseller network by entering into an agreement with Arch Paging Inc., the
second largest paging company in the United States. We intend to leverage
Arch's sales force to reach potential new subscribers of our services. We also
have a reselling relationship with American Mobile pursuant to which American
Mobile resells our Go.Web service as a part of American Mobile's suite of
services to its customers through its distribution channels.
Master dealers sell GoAmerica service through a network of other dealers and
are paid a higher commission than dealers but are assigned a quota. Master
dealers are responsible for selling the GoAmerica service, training their
dealer network, providing the mobile devices, and supporting the subscriber.
Under such arrangements, we are responsible for billing the subscriber. Our
master dealers have approximately 500 direct sales professionals. Our dealers
and agents sell the GoAmerica service through their own sales efforts, and are
not assigned a quota. Dealers are paid a smaller commission than a master
dealer. Dealers are responsible for selling the GoAmerica service and providing
the mobile devices. We bill and support the subscribers provided by our
dealers. Our dealers have approximately 250 direct sales professionals. Agents
are paid a smaller commission than dealers because they are only responsible
for selling the GoAmerica service. We sell and provide the mobile devices, bill
and support the subscribers provided by our agents. Our agents have
approximately 50 direct sales professionals.
Joint Selling Relationships. We have partnered and seek to continue to
partner for joint selling purposes with other companies that have complementary
wireless data products or services. For example, we offer wireless data, PCS
and cellular carriers a single resource for outsourcing ready-to-market
wireless email and Web-based data solutions based on standard platforms from
the leading software vendors and device manufacturers. By providing a suite of
platform and device-independent services, we position these carriers to be able
to address the data needs of their customers today. We then engage in joint
selling activities with clearly defined responsibilities. We offer wireless
device manufacturers an opportunity to increase their sales because our
services increase the usefulness of their devices. We also engage in joint
selling activities with the sales professionals of these manufacturers. In
addition, we work with application providers and jointly sell into the
installed base of customers in the market segment addressed by their
application. For example, our relationship with w-Trade, a wireless financial
information software company, allows us to approach broker dealers who want to
wirelessly enable their customers using software offered by w-Trade and our
wireless data access and delivery expertise.
Marketing
We market and advertise in order to establish our brand name and create
sales opportunities. We conduct market awareness tracking research to measure
awareness of the GoAmerica brand and related sales. Our efforts have been and
will continue to be targeted in market segments and geographic markets where we
believe there is opportunity for substantial subscriber penetration. We believe
that high concentrations of potential subscribers reduce our subscriber
acquisition costs. With a portion of the net proceeds from this offering, we
intend to expand our presence as a mass market provider of wireless Internet
access by making a significant investment in establishing and building the
GoAmerica brand.
We continually seek new ways to reach potential subscribers that are
learning about wireless Internet communications. We also seek to establish
GoAmerica as a strong independent wireless Internet brand. Through a
combination of mass media advertising and Web advertising, we seek to expand
our subscriber base,
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strengthen our customer relationships and capture significant market share. We
supplement our existing subscriber acquisition programs through value added
reseller and dealer co-marketing programs and partner marketing programs. We
plan to continue to develop a variety of co-marketing programs that make use of
brand loyalties and existing customer relationships.
For example, in November 1999, we announced a preferred partnership
arrangement with Avis-Rent-a-Car, the second largest car rental company in the
United States. Under this arrangement, our customers will be able to access the
Avis reservation system through Go.Web. We anticipate that this service will be
commercially available in the second quarter of 2000. We also have a marketing
agreement with Lexis-Nexis, a leading provider of information to the legal
profession, to provide wireless access to Lexis.com services using a co-branded
service called "Law On The Go". In addition to service providers, we have also
developed joint marketing relationships with several manufacturers of wireless
devices which we believe will benefit from being able to market our value-added
services. For example, we have a preferred service provider agreement with
Novatel Wireless, a leading supplier of wireless modems for the CDPD networks,
and a reseller and joint marketing agreement with Sierra Wireless, the
manufacturer of Aircard 300, a wireless PC Card for the CDPD networks.
Wireless Carrier and Other Relationships
We have assembled a strategic combination of relationships with wireless
network operators, application developers and mobile device manufacturers.
American Mobile. American Mobile's ARDIS network serves approximately 425
metropolitan areas in the United States, encompassing approximately 11,000
cities and towns. We offer our subscribers access to the ARDIS network.
American Mobile also resells our Go.Web service, as a part of American Mobile's
suite of services, to its customers through its distribution channels.
AT&T Wireless Services. AT&T Wireless' cellular digital packet data, CDPD,
network is the largest CDPD network in the United States. We offer access to
the AT&T nationwide CDPD network to our subscribers.
Bell Atlantic Mobile. Bell Atlantic has the largest regional CDPD network
covering the New England and Mid Atlantic states. We offer the Bell Atlantic
regional CDPD network to our subscribers and receive sales leads from the Bell
Atlantic Mobile data sales force.
BellSouth Wireless Data. BellSouth's Mobitex network covers approximately
80% of the United States population and approximately 93% of the urban business
population. We have been offering the BellSouth nationwide Mobitex network to
our subscribers since 1996. We also have a software license to the BellSouth
Interactive Paging Service gateway.
Phone.com. Phone.com has developed software technology that runs on phones
that combine voice and data. We first licensed and deployed their technology in
1997. We were the first non-cellular carrier to license their UPlink software
and were the first company in North America to deploy their WAP compliant
gateway.
Research in Motion. RIM is the manufacturer of the RIM 950 interactive
pager, the RIM 850 wireless handheld device and the RIM Blackberry device. We
have a distribution agreement with RIM and co-market the Go.Web service on the
Blackberry device.
Technology and Operations
Service Infrastructure
Wireless Internet Connectivity Center. We operate a secure network
operations center at our headquarters in Hackensack, New Jersey. This Wireless
Internet Connectivity Center is connected to multiple
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Tier-1 Internet backbone providers such as UUNET/MCI Worldcom, Sprint, and
AT&T via redundant high-capacity, high-speed leased T-1 telecommunications
lines as well as fixed location frame-relay circuits. These circuits connect
to our customers' data sources and to the wireless data networks we use. Our
Wireless Internet Connectivity Center is supported by a switched fiber optic
backbone provided by Cisco Systems. The center is equipped with proven,
industry standard equipment, including Cisco and Paradyne networking
equipment, Sun Sparc Enterprise UNIX servers, high-end clustered Compaq
servers, Network Appliance NFS Servers and Clarion Raid Arrays. We believe our
Wireless Internet Connectivity Center is capable of meeting the capacity
demands and security standards for services we developed or are developing for
our customers. We staff the center from 8:00 a.m. to 8:00 p.m. Eastern time on
weekdays. In addition, our technical staff monitor network traffic, service
quality, and security 24 hours a day, seven days a week. We intend to continue
to invest in improved network monitoring software and hardware systems.
In order to provide our subscribers with the highest availability of
services we are building a completely redundant data center facility which is
expected to be operational during the second quarter of 2000. This facility
will become our primary Wireless Internet Connectivity Center. This data
center will have a back-up power supply, redundant communications connection
and will be monitored 24 hours a day, seven days a week.
Wireless Networks. Through our relationships with third-party provider-
owned wireless networks, our subscribers are able to wirelessly access the
Internet in most major metropolitan areas in the continental United States via
a local wireless network. We purchase access to wireless networks through
services agreements with a variety of carriers including BellSouth Wireless
Data, AT&T Wireless Services, Bell Atlantic Mobile and American Mobile. Using
a combination of third-party wireless network providers enables us to provide
wireless Internet access and services on a nationwide basis while managing the
timing and magnitude of our capital expenditures. We employ a strategy of
using different third-party network providers in locations where it is most
economical to do so. We periodically reevaluate the economics of this strategy
and, if warranted, move subscribers to different networks.
Software Technology
Our strategy is to develop solutions using existing technologies and
industry standards in proprietary ways to continue to deliver customer-
friendly wireless Internet services and dynamic applications, as well as
allowing our partners to develop wireless applications with standard
development tools.
Our Software Technology
We have developed a proprietary services platform, Go.Web, that we believe
is a competitive advantage because it enables our subscribers to access and
personalize the Internet from virtually any leading wireless device. Go.Web
also allows qualified developers to introduce standard Web-based applications
for virtually any wireless device or network. As a result of our Go.Web
development efforts, our engineering staff has acquired substantial wireless
and Web formatting expertise, which will enable us to develop solutions
quickly as new wireless devices are introduced. In addition, our proprietary
compression technology and enhanced wireless transport protocol included in
our software provides bandwidth efficiency and maximizes data transmission
speeds. We also have employed industry standard SSL, or secure sockets layer,
and our internally developed encryption technologies to ensure security
through our Internet gateway.
We developed our software technology to better serve our customers and
provide the following features:
. simplify installation;
. provide a convenient and intuitive starting place for subscribers;
. enhance the efficiency of our support services; and
. provide state-of-the-art wireless applications.
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Licensed Software Technology
BellSouth Wireless Data--The BellSouth Interactive Paging Service (IPS) is
based on server software that has been licensed by GoAmerica. We are one of a
limited number of companies that have deployed their own IPS gateway. This
service provides two-way messaging on devices such as the RIM interactive
pagers.
Phone.com--Phone.com has developed software technology that runs on phones
that combine voice and data. They have created a page display language, HDML,
to show Web content on small screen devices, and now support the WAP standard.
We have licensed and deployed this technology and provide services to cellular
carriers and individual customers.
Telcordia--Telcordia, formerly Bellcore, has developed software technology
that supports Microsoft Windows platforms such as laptops and CE devices. We
presently use this technology to support our subscribers using Windows
platforms to enable access to our GoAmerica services.
Customer Service and Billing
We provide customer service, billing and product fulfillment at our customer
service center. Our customer service program provides our subscribers with the
ability to contact us through toll free telephone, Web, or email. Through our
goamerica.net Web site, subscribers can access answers to Frequently Asked
Questions and information about our services 24 hours a day. Through our Web
site and customer service representatives, we verify that a potential
subscriber will have wireless network coverage where such customer plans to use
the service. For subscribers who order directly from us, we maintain an
inventory of mobile devices and wireless modems which we buy from third-party
manufacturers and resellers. We load and configure custom software on mobile
devices, activate wireless modems and perform quality assurance checks. We then
pack, ship and track the product until the subscriber receives it. For
customers who already own a mobile device, we provide only the wireless modem
and software application. Our subscribers are able to deal directly with us for
all repair, replacement and warranty issues for devices we provide to them.
As of December 31, 1999, we had 15 customer service and technical support
representatives who handle inquiries about our services, device features and
wireless communications. Our customer service and technical support personnel
are available weekdays from 8:00 a.m. until 8:00 p.m. Eastern time. We plan to
expand our customer service center hours during the first quarter of 2000. We
also intend to expand our ecommerce Web site capabilities to include self
provisioning, on-line billing, and interactive customer care. We provide
corporate or individual customer billing for all subscription fees, devices and
modems, and other fees.
Competition
The market for our services is becoming increasingly competitive. The
widespread adoption of industry standards in the wireless data communications
market may make it easier for new market entrants and existing competitors to
introduce services that compete against ours. We developed our solutions using
standard industry development tools. Many of our agreements with wireless
carriers, wireless handheld device manufacturers and data providers are non-
exclusive. Our competitors may use the same products and services in
competition with us. With time and capital, it would be possible for
competitors to replicate our services. We expect that we will compete primarily
on the basis of the functionality, breadth, quality and price of our services.
Many of our existing and potential competitors have substantially greater
financial, technical, marketing and distribution resources than we do. Please
refer to "Risk Factors--We may face increased competition" for a listing of
some our current and potential competitors. Additionally, many of these
companies have greater name recognition and more established relationships with
our target customers. Furthermore, these competitors may be able to adopt more
aggressive pricing policies and offer customers more attractive terms than we
can. In the event such companies decide to compete directly with us, such
relationships will likely be terminated, which may have a material adverse
effect on our business and reduce our market share or force us to lower prices
to unprofitable levels.
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Intellectual Property Rights
We have not obtained patents on our technology that would preclude or
inhibit competitors from using our technology. We rely on a combination of
copyright, trademark, service mark, trade secret laws, unfair competition law
and contractual restrictions to establish and protect certain proprietary
rights in our technology and intellectual property. We have applied for
registration of our GoAmerica names and marks in the United States Patent and
Trademark Office and in trademark offices in jurisdictions throughout the
world, including but not limited to, U.S. federal trademark applications for
the marks "GoAmerica", "Go.Web" and "Law on the Go". The steps taken by us to
protect our intellectual property may not prove sufficient to prevent
misappropriation of our technology or to deter independent third-party
development of similar technologies. In addition, the laws of certain foreign
countries may not protect our technologies or intellectual property rights to
the same extent as do the laws of the United States. We also rely on certain
technologies that we license from third parties. These third-party technology
licenses may not continue to be available to us on commercially attractive
terms. The loss of the ability to use such technology could require us to
obtain the rights to use substitute technology, which could be more expensive
or offer lower quality or performance, and therefore have a material adverse
effect on our business, financial condition or results of operations. Third
parties could claim infringement by us with respect to current or future
technology. We expect that we and other participants in our markets will be
increasingly subject to infringement claims as the number of services and
competitors in our industry segment grows. Any such claim, whether meritorious
or not, could be time consuming, result in costly litigation, cause service or
installation interruptions or require us to enter into royalty or licensing
agreements. Such royalty or licensing agreements might not be available on
terms acceptable to us or at all. As a result, any such claim could have a
material adverse effect upon our business, financial condition or results of
operations. We received a claim in November 1999, on behalf of ROTIS
Technologies Corporation, that our technology relating to the wireless
provision of stock quotes infringes a patent relating to a price quotation
system, which patent expires on September 25, 2001. We believe that such claim
is not material and without merit. We intend to defend such claim vigorously.
Such claim is, however, in its preliminary stages and no specific claim for
damages has been asserted. Therefore, no assurance can be made that such claim
could not become material in the future.
Government Regulation
We are not currently subject to direct federal, state or local government
regulation, other than regulations that apply to businesses generally. The
wireless network carriers we contract with to provide airtime are subject to
regulation by the Federal Communications Commission. Changes in FCC regulations
could affect the availability of wireless coverage these carriers are willing
or able to sell to us. We could also be adversely affected by developments in
regulations that govern or may in the future govern the Internet, the
allocation of radio frequencies or the placement of cellular towers. Also,
changes in these regulations could create uncertainty in the marketplace that
could reduce demand for our services or increase the cost of doing business as
a result of costs of litigation or increased service delivery cost or could in
some other manner have a material adverse effect on our business, financial
condition or results of operations.
We currently do not collect sales or other taxes with respect to the sale of
services or products in states and countries where we believe we are not
required to do so. We do collect sales and other taxes in the states in which
we have offices and are required by law to do so. One or more jurisdictions
have sought to impose sales or other tax obligations on companies that engage
in online commerce within their jurisdictions. A successful assertion by one or
more jurisdictions that we should collect sales or other taxes on our products
and services, or remit payment of sales or other taxes for prior periods, could
have a material adverse effect on our business, financial condition or results
of operations.
Any new legislation or regulation, or the application of laws or regulations
from jurisdictions whose laws do not currently apply to our business, could
have an adverse effect on our business.
Facilities
Our principal offices are located in Hackensack, New Jersey in a 20,300
square-foot leased facility. Our primary lease on approximately 15,900 square
feet of such space expires in May 2007. In addition, in
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December 1999, we entered into a facilities maintenance agreement with Data
General pursuant to which we will operate a network operating center at their
facility in New York City. Such facility will initially provide redundant data
backup for our current network operating center located at our headquarters in
Hackensack. We anticipate that our New York facility will serve as our primary
network operating center by mid-2000. We believe that our facilities will be
adequate to meet our requirements for the foreseeable future and that suitable
additional space will be available if needed.
Employees
As of December 31, 1999, we had a total of 49 full-time employees. None of
our employees is covered by a collective bargaining agreement. We believe that
our relations with our employees are good.
Legal Proceedings
We are not currently subject to any material legal proceedings. However, we
may from time to time become a party to various legal proceedings arising in
the ordinary course of our business.
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MANAGEMENT
Directors and Executive Officers
Our directors and executive officers are as follows:
<TABLE>
<CAPTION>
Name Age Position(s)
- ---- --- -----------
<S> <C> <C>
Aaron Dobrinsky......... 35 Chairman of the Board, President and Chief Executive Officer and Director
Joseph Korb............. 48 Executive Vice President and Director
Francis Elenio.......... 33 Chief Financial Officer, Treasurer and Secretary
Robi Blumenstein(1)(2).. 43 Director
Alan Docter(2).......... 56 Director
Mark Kristoff(1)........ 38 Director
Zachary Prensky(1)...... 26 Director
Andrew Seybold(2)....... 53 Director
</TABLE>
- --------
(1) Member of Audit Committee.
(2) Member of Compensation Committee.
All directors currently hold office until the next annual meeting of
stockholders or until their successors have been elected and qualified. Our
Certificate of Incorporation provides that upon closing of this offering the
terms of office of the members of the board of directors will be divided into
three classes as set forth below. All executive officers are elected annually
by the board of directors and serve at the discretion of the board of directors
and until their successors are elected and qualified. There are no family
relationships between any of our directors or executive officers.
Aaron Dobrinsky founded GoAmerica in 1996 and has served as our Chairman of
the Board, President and Chief Executive Officer and as a director since our
inception in 1996. Prior to founding the company, from February 1996 to July
1996, Mr. Dobrinsky served as Executive Vice President of Mineral Trading Corp.
Prior to that, Mr. Dobrinsky served most recently as Senior Vice President of
American International Ore Corporation from 1990 to February 1996. Mr.
Dobrinsky also serves on the board of directors of DataRover Mobile Systems,
Inc.
Joseph Korb joined GoAmerica in 1997 as Executive Vice President and has
been a director since October 1996. Prior to joining us, Mr. Korb served in
various capacities, including Vice President of Product Management and Business
Development at RAM Mobile Data (now BellSouth Wireless Data) from 1992 to 1996.
Prior to that, Mr. Korb served as Vice President at Citibank, N.A. where he
served as Director of Technology in an electronic products development group.
Mr. Korb currently serves as a board member and Vice President of Portable
Computing and Communications Association, an industry trade association.
Francis Elenio joined GoAmerica in January 1999 as Chief Financial Officer
and has also served as our Treasurer and Secretary since December 1999. Prior
to joining us, Mr. Elenio served as Corporate Controller of Bogen
Communications, Inc. from June 1997 to January 1999. Prior to that, Mr. Elenio
served most recently as Vice President of Finance and Administration and
Corporate Controller of KTI, Inc. from 1991 to 1997. He previously was a Senior
Accountant with Ernst & Young LLP and is a Certified Public Accountant in New
Jersey.
Robi Blumenstein joined our board of directors in June 1999 as the designee
of CIBC WMV, Inc. Mr. Blumenstein is a Managing Director of CIBC Capital
Partners, the merchant banking arm of CIBC World Markets. Mr. Blumenstein
joined CIBC World Markets in 1994. Mr. Blumenstein is a member of the board of
directors of a number of privately held companies. Prior to joining CIBC
Capital Partners, Mr. Blumenstein worked at First City Capital Corporation and
as an attorney at Tory, Tory, DesLauriers & Binnington.
Alan Docter joined our board of directors in October 1996 at the time of his
initial investment in GoAmerica. Since 1990, Mr. Docter has been an early-stage
investor in technology companies, including
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M.A.I.D. plc (now The Dialog Corporation), ViaWeb (sold to Yahoo!), Butterfly
V.L.S.I. Ltd. (sold to Texas Instruments) and Invino Corp. (sold to Youth
Stream Media Networks). He has served as Vice Chairman of Considar, Inc., an
international metals trading company, since he co-founded such company in 1986.
Mr. Docter also serves on the board of directors of a number of privately held
companies.
Mark Kristoff joined our board of directors in June 1998. Since 1991, Mr.
Kristoff has been President and Chief Operating Officer of Considar, Inc., an
international metals trading company. Since 1990, Mr. Kristoff also has been an
early-stage investor in many technology companies and serves on the board of
directors of a number of privately held companies.
Zachary Prensky joined our board of directors in June 1998. Since October
1998, Mr. Prensky has been Managing Director of Investment Banking for
Wellfleet Partners, an investment banking firm based in New York City. Prior to
that, Mr. Prensky served as Chief Executive Officer and Chairman of Zackfoot
Investments LLC which he founded in 1997. Zackfoot invested and facilitated a
round of private equity financing by GoAmerica in 1998. Mr. Prensky served as
Chief Financial Officer of Ram Caterers from October 1995 to May 1997. From
July 1993 to October 1995, Mr. Prensky served as President of Zackfoot Software
which developed software packages for the footwear industry. Mr. Prensky has
been an early-stage investor in technology companies, including Register.com,
HomeworkCentral.com, Liveprint.com, Inc., DataRover Mobile Systems, Inc.,
Livemind, Inc. and Aluminium.com, Inc.
Andrew Seybold joined our board of directors in December 1999. Mr. Seybold
has extensive experience as a consultant, systems designer and product analyst
in the communications and computer industries. Since 1983, Mr. Seybold has
served as publisher, Editor-in-Chief and in various management positions with
Pinecrest Press, Inc. which publishes "Andrew Seybold's Outlook on
Communications and Computing."
Key Employees
Our key employees are as follows:
<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S> <C> <C>
Ellen Flora.................. 31 Vice President of Operations
Jesse Odom................... 33 Vice President of Network Operations and
Technology
David Gantman................ 58 Vice President of Strategic Marketing
Peter Varvara................ 46 Vice President of Marketing Communications
Martin May................... 53 Director of Alternate Distribution and Carrier
Relations
Joshua Rochlin............... 33 Director of Business Development
Joseph Strempel.............. 32 Director of Direct Sales and Telemarketing
</TABLE>
Ellen Flora joined GoAmerica in October 1999 as Vice President of
Operations. Prior to joining us, Ms. Flora served in various capacities,
including most recently as Business Development Manager for the Communications
Industry Group at Electronic Data Systems from October 1993 to October 1999.
Jesse Odom joined GoAmerica in 1996 as Vice President of Network Operations.
Prior to joining GoAmerica, Mr. Odom served as Vice President of Network
Engineering at American International Ore Corporation from 1991 to 1996.
David Gantman joined GoAmerica in January 2000 as Vice President of
Strategic Marketing of GoAmerica Marketing, Inc., our wholly-owned subsidiary.
Mr. Gantman has served as President of Strategem Plus, Inc. since January 1995
and served as Executive Vice President of NW Ayer, Inc. from 1984 until January
1995.
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Peter Varvara joined GoAmerica in January 2000 as Vice President of
Marketing Communications of GoAmerica Marketing, Inc., our wholly-owned
subsidiary. Mr. Varvara has served as President of Customer Strategies
Worldwide LLC since February 1998 and served as Executive Vice President of NW
Ayer, Inc. from 1982 until February 1998.
Martin May joined GoAmerica in December 1999 as Director of Alternate
Distribution and Carrier Relations. Prior to joining us, Mr. May served as a
director of sales for BellSouth Wireless Data from November 1993 to December
1999.
Joshua Rochlin joined GoAmerica in December 1999 as Director of Business
Development. Prior to joining us, Mr. Rochlin was the founder and Chief
Executive Officer of MyCalendar.com LLC from January 1999 to December 1999. Mr.
Rochlin previously served as an associate for the law firm of Rubin Baum from
February 1995 to December 1998. Mr. Rochlin has served as a director of Hydron
Technologies, Inc. since January 2000.
Joseph Strempel joined GoAmerica in January 1998 and currently serves as
Director of Direct Sales and Telemarketing. Prior to joining us, Mr. Strempel
served in various sales positions, and most recently as a Wireless Data Account
Executive, with Bell Atlantic Mobile (formerly NYNEX) from January 1993 to
December 1997.
Board Committees
The board of directors has a compensation committee, which approves salaries
and incentive compensation for our executive officers and administers our stock
option plans and our employee stock purchase plan. The compensation committee
is made up of Robi Blumenstein, Alan Docter and Andrew Seybold. The board of
directors also has an audit committee, which reviews the results and scope of
the audit and other services provided by our independent accountants. The audit
committee is made up of Robi Blumenstein, Mark Kristoff and Zachary Prensky.
Board Composition
We currently have seven directors. Our Certificate of Incorporation provides
that, effective upon the closing of this offering, the terms of office of the
members of the board of directors will be divided into three classes: Class A,
whose term will expire at the annual meeting of stockholders to be held in
2001; Class B, whose term will expire at the annual meeting of stockholders to
be held in 2002; and Class C, whose term will expire at the annual meeting of
stockholders to be held in 2003. The Class A directors are Messrs. Kristoff,
Prensky and Seybold, the Class B directors are Messrs. Blumenstein and Korb and
the Class C directors are Messrs. Dobrinsky and Docter. At each annual meeting
of stockholders after this initial classification, the successors to directors
whose term will then expire will be elected to serve from the time of election
and qualification until the third annual meeting following election. Our By-
laws permit the board of directors to increase or decrease the size of the
board of directors. Any additional directorships resulting from an increase in
the number of directors will be distributed among the three classes so that, as
nearly as possible, each class will consist of one-third of the total number of
directors. This classification of the board of directors may have the effect of
delaying or preventing changes in control or management of GoAmerica.
Directors' Compensation
Each non-employee, non-investor director serving on our board of directors
will receive annual compensation of $20,000. In addition, each independent
director, upon election to the board of directors, will receive options to
purchase up to 8,000 shares of our common stock. On December 31, 1999, Mr.
Seybold was granted options to purchase 8,000 shares at $10.45 per share,
subject to vesting. Each director who is a stockholder of the Company and who
serves on the board of directors as a representative of another individual,
entity or group of stockholders will receive options to purchase up to 4,000
shares of our common stock. On December 31, 1999, Messrs. Blumenstein, Docter,
Kristoff and Prensky each received options to purchase 4,000 shares at $10.45
per share, subject to vesting. All future option grants shall have an exercise
price equal to the fair market value of our common stock on the date of grant
and shall vest at a rate of one-third per year, from the date of grant. Each
director will be reimbursed by us for his or her reasonable expenses incurred
in connection with his or her participation in our board of directors meetings.
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<PAGE>
Executive Compensation
The following table sets forth certain information concerning compensation
that we paid for services in all capacities awarded to, earned by or paid to
our chief executive officer and each of our other executive officers whose
aggregate compensation exceeded $100,000 during the year ended December 31,
1999 (collectively, the "Named Executive Officers").
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
-------------------- -------------
Name and Principal Position(s) Salary Bonus Stock Options
------------------------------ ---------- --------- -------------
<S> <C> <C> <C>
Aaron Dobrinsky, Chairman of the Board,
President and Chief Executive Officer..... $ 150,000 $ 50,000 10,000
Joseph Korb, Executive Vice President...... $ 150,000 $ 50,000 10,000
Francis Elenio, Chief Financial Officer,
Treasurer and Secretary................... $ 95,833 $ 20,000 30,000
</TABLE>
Option Grants in Last Fiscal Year
The following table sets forth information for the fiscal year ended
December 31, 1999 with respect to each grant of stock options to the Named
Executive Officers:
Option Grants During Year Ended December 31, 1999
<TABLE>
<CAPTION>
Individual Grants(/1/) Potential Realizable
-------------------------------- Value at Assumed
% of Total Annual Rates of Stock
Options Exercise Price Appreciation for
Granted to Price Option Term(/3/)
Options Employees in Per Expiration -----------------------
Name Granted 1999(/2/) Share Date 0% 5% 10%
---- ------- ------------ -------- ---------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Aaron Dobrinsky......... 10,000 3.6% $4.50 08/02/04 59,500 88,371 123,298
Joseph Korb............. 10,000 3.6% $4.50 08/02/04 59,500 88,371 123,298
Francis Elenio.......... 30,000 10.8% $4.50 08/02/09 178,500 375,658 678,138
</TABLE>
- --------
(1) Each of these options was granted pursuant to the 1999 Stock Option Plan of
GoAmerica Communications Corp. and is subject to the terms of such plan. In
connection with our reorganization, such options are exercisable into
shares of our common stock. All these options vested immediately.
(2) In 1999, we granted options to purchase an aggregate of 277,001 shares of
common stock to our employees. The percentage calculation excludes options
to purchase 24,000 shares of common stock granted to our non-employee
directors during 1999.
(3) Amounts represent hypothetical values that could be achieved for the
respective options if exercised at the end of the option term. These values
are based on assumed rates of stock price appreciation of 0%, 5% and 10%
compounded annually from the date the respective options were granted to
their expiration date based on the estimated fair value of the underlying
securities on the date of the grant. The fair market value per share of our
common stock was deemed to be $10.45 per share on the date of grant. These
assumptions are not intended to forecast future appreciation of our stock
price. The potential realizable value computation does not take into
account federal or state income tax consequences of option exercises or
sales of appreciated stock.
1999 Year-End Option Values
<TABLE>
<CAPTION>
Number of Options at Value of In-
December 31, the-Money
1999 Options(/1/)
----------------------- ---------------
Name Vested Unvested Vested Unvested
---- ----------- ----------- ------ --------
<S> <C> <C> <C> <C>
Aaron Dobrinsky......................... 10,000 -- $ $ --
Joseph Korb............................. 10,000 -- --
Francis Elenio.......................... 30,000 -- --
</TABLE>
- --------
(1) The value of the options is determined by subtracting the exercise price
per share from the proposed initial public offering price per share offered
hereby, multiplied by the number of shares underlying the options.
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<PAGE>
There were no options exercised during the year ended December 31, 1999.
GoAmerica Communications Corp. 1999 Stock Option Plan
The GoAmerica Communications Corp. 1999 Stock Option Plan was adopted by the
board of directors of GoAmerica Communications Corp. and became effective on
August 3, 1999. Such plan was approved by the stockholders of GoAmerica
Communications Corp. effective on such date. On December 9, 1999 the board of
directors of GoAmerica Communications Corp. determined that, upon the closing
of our reorganization, no additional awards would be issued under the 1999
Stock Option Plan. As of the closing of our reorganization, the outstanding
options to purchase 239,500 shares of common stock of GoAmerica Communications
Corp. became, by their terms, options to purchase 239,500 shares of GoAmerica,
Inc. common stock, otherwise in accordance with the terms and conditions of the
1999 Stock Option Plan. Accordingly, our board of directors has reserved
239,500 shares of our common stock for issuance upon exercise of these options.
The outstanding option under the 1999 Stock Option Plan are governed by the
compensation committee of our board of directors subject to the terms of the
1999 Stock Option Plan.
All the options granted under the 1999 Stock Option Plan were made to
employees of GoAmerica Communications Corp. and are non-qualified stock
options. All such options terminate not more than ten years from the date of
grant, subject to earlier termination upon or after a fixed period following
each optionee's death, disability or termination of employment with us. The
vesting provisions of each outstanding option was determined by the board of
directors of GoAmerica Communications Corp. and such options are not generally
assignable or otherwise transferable except by will or as per the laws of
descent and distribution. In the event of certain changes in control, and in
such other circumstances as set forth in the 1999 Stock Option Plan, the
administrator shall, in its equitable discretion, make adjustments in the terms
and conditions of any then outstanding stock options.
GoAmerica, Inc. 1999 Stock Plan
The 1999 Stock Plan was adopted by our board of directors on December 9,
1999 and approved by our stockholders on December 31, 1999. The 1999 Stock Plan
was effective as of December 9, 1999 and shall remain in effect until
terminated by our board of directors. The total number of shares of common
stock with respect to which awards may be granted under this plan is 600,000,
which amount shall be adjusted in accordance with the terms of the plan and to
an amount equal to twenty percent of the shares of our common stock outstanding
on December 31, 2000, and each December 31 thereafter. In no event shall such
annual adjustment decrease the shares available for issuance. Those eligible to
receive stock option grants under the 1999 Stock Plan include our employees,
directors and consultants. The 1999 Stock Plan is administered by the
compensation committee of our board of directors. As of December 31, 1999,
there were outstanding options to purchase 65,501 shares of common stock under
our 1999 Stock Plan.
Subject to the provisions of the 1999 Stock Plan, the administrator of the
1999 Stock Plan has the discretion to determine the optionees and/or grantees,
the type of options to be granted, the vesting provisions, the terms of the
grants and other related grant provisions. The exercise price of an incentive
stock option may not be less than the fair market value per share of the common
stock on the date of grant or, in the case of an optionee who beneficially owns
10% or more of the voting power of all classes of our capital stock, not less
than 110% of the fair market value per share on the date of grant. The exercise
price of a non-qualified stock option may not be less than 85% of the fair
market value per share of the common stock on the date of grant. Fair market
value is determined by the plan administrator in good faith. We anticipate that
following consummation of this offering, fair market value shall be determined
in accordance with the closing sales price of our common stock as quoted on the
Nasdaq National Market. The 1999 Stock Plan also allows for the grant of
restricted stock and other awards, in the discretion of the plan administrator.
Incentive stock options granted under the 1999 Stock Plan terminate not more
than ten years from the date of grant, subject to earlier termination upon or
after a fixed period following the optionee's death, disability or
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<PAGE>
termination of employment with us. The term of non-qualified option grants is
not limited, provided that the term of any options, including incentive stock
options and non-qualified options, granted to a holder of more than 10% of the
capital stock may be no longer than five years. Options granted under the 1999
Stock Plan will vest in the manner determined by the plan administrator.
Options are not assignable or otherwise transferable except by will or as per
the laws of descent and distribution. In the event of certain mergers, a
reorganization, or consolidation of us with or into another corporation or the
sale of all or substantially all our assets or all of our capital stock in
which the successor corporation does not assume outstanding options or issue
equivalent options, our board of directors is required to provide accelerated
vesting of outstanding options.
Employee Stock Purchase Plan
Our Employee Stock Purchase Plan provides our employees with an opportunity
to purchase our common stock through accumulated payroll deductions and at a
discount from fair market value. The plan was approved by our board of
directors on December 9, 1999 and was approved by our stockholders on December
31, 1999. The plan became effective on December 9, 1999. The total number of
shares of common stock with respect to which purchases may be made under the
plan is 500,000, which amount shall be adjusted in accordance with the terms of
the plan. The Employee Stock Purchase Plan will be administered by our
compensation committee.
Eligible employees may purchase up to a maximum fair market value of $25,000
for all purchases ending within the same calendar year under this plan. Our
employees are eligible to participate if they are employed by us for at least
20 hours per week and for more than five months in any calendar year and do not
own 5% or more of our voting stock. The initial offering period under the plan
will commence on the date that the registration statement with respect to this
offering is declared effective by the Securities and Exchange Commission and
ends on or about December 31, 2000. It is currently contemplated that new
offering periods will commence every six months thereafter. The purchase price
per share for our common stock under the plan will be equal to the lower of 85%
of the fair market value of our common stock on the first or last day of each
purchase period. Employees may end their participation under the plan at any
time prior to the exercise date of any one purchase period and, generally, such
participants shall be automatically terminated upon termination of employment.
In the event we are the surviving corporation in any merger, reorganization or
other business combination, options to purchase shares issued under the plan
shall be assumed. A dissolution or liquidation or a merger or consolidation in
which we are not the surviving entity will cause each option then outstanding
to terminate. Generally, our board of directors can amend, modify or terminate
the plan at any time provided the rights of plan participants are not impaired.
The plan terminates on December 31, 2004 unless earlier terminated by our board
of directors.
Employment Agreements, Non-Competition, Non-Disclosure and Invention Assignment
Agreements
Mr. Dobrinsky is a party to an agreement with us effective December 31, 1999
under which he serves as our Chairman of the Board, President and Chief
Executive Officer at a base salary of $225,000, subject to annual adjustment.
Mr. Korb is a party to an agreement with us effective December 31, 1999 under
which he serves as our Executive Vice President at a base salary of $225,000,
subject to annual adjustment. Mr. Elenio is a party to an agreement with us
effective December 31, 1999 under which he serves as our Chief Financial
Officer, Treasurer and Secretary at a base salary of $150,000, subject to
annual adjustment. Mr. Odom is a party to an agreement with us effective
December 31, 1999 under which he serves as our Vice President, Network
Operations and Technology at a base salary of $125,000, subject to annual
adjustment, with a minimum bonus of $25,000. The Compensation Committee may
award any or all of these individuals additional bonus payments or option
grants in its discretion. The initial term of each such agreement is for three
years and renews annually for one year periods thereafter. In the event Mr.
Dobrinsky, Mr. Korb or Mr. Elenio is terminated without cause, resigns for good
reason or, in the case of each of Mr. Dobrinsky and Mr. Korb, is not reelected
to our board of directors, he shall be entitled to severance in an amount to
include all payments that otherwise would have been paid to him through the end
of the then current term of the agreement. However, in no event shall such
severance amount be less than such employee's then current one year annual base
salary, or if such termination occurs after the third anniversary of the
effective date of such employee's
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<PAGE>
agreement, such amount shall be no less than such employee's then current
annual salary plus one-twelfth of such annual salary for each year of
employment commenced beyond such anniversary date. If Mr. Odom is terminated
without cause or resigns for good reason, we must pay Mr. Odom salary and
benefits for a period of six months from the date of such termination or
resignation. In the event any of the foregoing employees dies or is terminated
for disability, he or his representative shall be entitled to continued
payments of base salary for a period of one year plus, in the case of
termination for disability, certain other benefits. Each of Mr. Dobrinsky and
Mr. Korb will also receive $800 per month in automobile allowances and will be
reimbursed for additional automobile expenses incurred in connection with their
duties. In addition, each of Mr. Dobrinsky and Mr. Korb also is the beneficiary
of a term life insurance policy in his respective name, in the face amount of
up to $1.0 million, for which we pay the premiums. Each employment agreement
also contains certain non-competition, non-solicitation, invention assignment
and confidentiality provisions and also requires that we maintain standard
directors and officers insurance of no less than $10.0 million.
We require that all employees sign an agreement with us pursuant to which
they agree to maintain the confidentiality of our proprietary information, to
assign any inventions to us, and to agree not to solicit our customers,
suppliers or employees away from us.
Compensation Committee Interlocks and Insider Participation
Until our board of directors formed its compensation committee on December
9, 1999, the compensation of our executive officers during 1999 was determined
by the entire board of directors. The compensation committee consists of
Messrs. Blumenstein, Docter and Seybold. There are no compensation committee
interlocks.
Since our inception in 1996, we consummated several rounds of private equity
financing. Certain of these transactions included issuances of our capital
stock to individuals who serve on our board of directors. In addition, certain
individuals were granted certain options or issued certain warrants to purchase
shares of our common stock.
Robi . CIBC WMV Inc. purchased 7,500 shares of Series A Preferred
Blumenstein Stock on June 25, 1999 for an aggregate of $7,500,000. Mr.
Blumenstein serves on our board of directors as the
representative of CIBC WMV Inc.
. Granted options to purchase 4,000 shares of common stock at
an exercise price of $10.45 per share on December 31, 1999.
One third of such options shall vest on each of the first,
second and third anniversaries from the date of grant.
Aaron . Purchased 1,066,660 shares of common stock on August 8, 1996
Dobrinsky for an aggregate of $533.33 upon founding of GoAmerica.
. Granted options to purchase 10,000 shares of common stock at
an exercise price of $4.50 per share on August 3, 1999. All
such options vested immediately.
. Granted options to purchase 20,000 shares of common stock at
an exercise price of $40.12 per share on January 6, 2000.
All of such options vested immediately.
Alan Docter . Purchased 100,000 shares of common stock on October 15, 1996
for an aggregate of $250,000.
. Purchased, on January 31, 1998, 17,680 shares of common
stock and warrants to purchase 3,320 shares of common stock
at an exercise price of $9.80 per share, for an aggregate of
$130,000.
. Purchased, on September 22, 1998, 67,084 shares of common
stock and warrants to purchase 49,822 shares of common stock
at an exercise price of $12.08 per share, for
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an aggregate of $500,000. Such warrants were issued in
connection with Mr. Docter's assistance in our equity
financing efforts.
. Received warrants to purchase 6,708 shares of common stock
on May 15, 1999 at an exercise price of $.01 per share in
connection with the May 1999 Agreement set forth below.
. Purchased 16,352 shares of common stock pursuant to certain
pre-emptive rights on November 30, 1999 for an aggregate of
$136,703.
. Purchased 320 shares of Series A Preferred Stock pursuant to
certain pre-emptive rights on November 30, 1999 for an
aggregate of $320,000.
. Granted options to purchase 4,000 shares of common stock at
an exercise price of $10.45 per share on December 31, 1999.
One third of such options shall vest on each of the first,
second and third anniversaries from the date of grant.
Joseph Korb . Purchased 533,340 shares of common stock on October 7, 1996
for an aggregate of $266.67.
. Granted options to purchase 10,000 shares of common stock at
an exercise price of $4.50 per share on August 3, 1999. All
such options vested immediately.
. Granted options to purchase 20,000 shares of common stock at
an exercise price of $40.12 per share on January 6, 2000.
All of such options vested immediately.
Mark Kristoff . Purchased 20,000 shares of common stock on October 15, 1996
for an aggregate of $50,000.
. Purchased 19,542 shares of common stock on September 22,
1998 for an aggregate of $150,000.
. Received warrants to purchase 1,954 shares of common stock
on May 15, 1999 at an exercise price of $.01 per share in
connection with the May 1999 agreement set forth below.
. Granted options to purchase 4,000 shares of common stock at
an exercise price of $10.45 per share on December 31, 1999.
One third of such options shall vest on each of the first,
second and third anniversaries from the date of grant.
Zachary . Zackfoot Investment LLC purchased 7,396 shares of common
Prensky stock and received warrants to purchase 17,438 shares of
common stock at an exercise price of $12.08 on May 28, 1998
for an aggregate of $7,266. Such warrants were issued in
connection with Zackfoot Investment LLC's assistance in our
equity financing efforts. Mr. Prensky was Chief Executive
Officer and Chairman of Zackfoot Investment LLC.
. Zackfoot Investment LLC purchased 816 shares of common stock
and received warrants to purchase 6,470 shares of common
stock at an exercise price of $15.46 per share on June 30,
1998 for an aggregate of $7,266. Such warrants were issued
in connection with Zackfoot Investment LLC's assistance in
our equity financing efforts.
. Zackfoot Investment LLC received warrants to purchase 1,231
shares of common stock on May 19, 1999 at an exercise price
of $.01 per share in connection with the May 1999 agreement
set forth below.
. Granted options to purchase 4,000 shares of common stock at
an exercise price of $10.45 per share on December 31, 1999.
One third of such options shall vest on each of the first,
second and third anniversaries from the date of grant.
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We also entered into a financial services consulting agreement with CIBC
World Markets Corp. pursuant to which CIBC was engaged to evaluate certain
potential financial and strategic initiatives. Mr. Blumenstein is the designee
of CIBC WMV, Inc. on our Board of Directors. In exchange for such services, we
have agreed to pay a retainer fee of $50,000 to CIBC World Markets Corp. In
connection with the issuance and sale of our Series B Preferred Stock in
January 2000, we will pay CIBC World Markets, Inc. $780,000 in cash and issue
28,352 shares of our common stock. CIBC will pay a finder's fee to a third
party. For all future transactions for which CIBC is entitled to compensation,
if any, we have agreed to pay a transaction fee in the amount of 6% of gross
proceeds raised in such a financing transaction, excluding this offering. Such
payment for services, if any, will be made one-half in cash and one-half in our
equity securities. This agreement will terminate upon the closing of this
offering.
The May 1999 Agreements with Certain Prior Investors
In May 1999, each of GoAmerica, Aaron Dobrinsky, Joseph Korb and certain
prior investors, including Zackfoot Investments LLC, of which Mr. Prensky was a
managing director, and Alan Docter, entered into various agreements, including
a settlement agreement and release. The settlement agreement and release
resulted from claims by such investors that they were entitled to additional
securities of GoAmerica, at no additional cost, as a result of the issuance of
certain GoAmerica securities and the granting of certain rights by GoAmerica to
subsequent third party investors on terms and conditions alleged to be more
favorable, than were provided to the investors making such claims, including
the valuation of securities purchased. All parties entered the settlement
agreement and release without admission of any liability or wrongdoing. In
connection with the May 1999 agreements, we agreed to issue to such investors
warrants to purchase an aggregate of 68,625 shares of common stock and each of
Messrs. Dobrinsky and Korb agreed to issue to such investors options to
purchase an aggregate of 9,485 and 4,746 shares of the common stock held by
each of them respectively. As a result of such agreements, we recorded a non-
cash charge of approximately $297,000 during 1999. We anticipate that all such
options and warrants will be exercised as of the consummation of this offering.
Key Person Insurance
We maintain, and are the beneficiary of, life insurance policies on the life
of Aaron Dobrinsky in the aggregate amount of $3.0 million. We have applied for
similar life insurance on the life of Joseph Korb in the amount of $3.0 million
for which we will be the beneficiary. There can be no assurance that such
insurance on Mr. Korb will be obtained. We do not intend to maintain key person
life insurance on any of our other executive officers, or key personnel.
Limitation of Liability and Indemnification of Directors and Officers
Our Certificate of Incorporation limits the liability of directors to the
maximum extent permitted by Delaware law. Delaware law provides that directors
of a corporation will not be personally liable for monetary damages for breach
of their fiduciary duties as directors, except liability for:
. any breach of their duty of loyalty to the corporation or its
stockholders;
. acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
. unlawful payments of dividends or unlawful stock repurchases or
redemptions; or
. any transaction from which the director derived an improper personal
benefit.
This limitation of liability does not apply to liabilities arising under the
federal securities laws and does not affect the availability of equitable
remedies such as injunctive relief or rescission.
Our Certificate of Incorporation and Bylaws provide that we shall indemnify
our directors, officers, employees and agents to the fullest extent permitted
by law. We believe that indemnification under our Bylaws covers at least
negligence and gross negligence on the part of indemnified parties. We have
director and officer liability insurance in the amount of $ with respect to
claims made against our directors and officers, that covers matters, including
matters arising under the Securities Act.
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We have also entered into written agreements to indemnify our directors and
executive officers, in addition to the indemnification provided for in our
Bylaws. These agreements, among other things, provide for indemnification of
our directors and executive officers for judgments, fines, settlement amounts
and expenses, including attorneys' fees, incurred by any of these persons in
any action or proceeding, including any action by or in the right of GoAmerica,
Inc. arising out of that person's services as our director or executive
officer, or as a director or executive officer of any of our subsidiaries or
any other company or enterprise to which such person provides services at our
request. We believe that these provisions and agreements are necessary to
attract and retain qualified persons as directors and executive officers.
There is no pending litigation or proceeding involving any of our directors,
officers, employees or agents where indemnification will be required or
permitted. We are not aware of any pending or threatened litigation or
proceeding that might result in a claim for such indemnification.
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CERTAIN TRANSACTIONS
Transactions involving each of Robi Blumenstein, Aaron Dobrinsky, Alan
Docter, Joseph Korb, Mark Kristoff and Zachary Prensky are included under the
heading Compensation Committee Interlocks and Insider Participation. Those
transactions occurred while each such individual was serving on our board of
directors and, in the case of Mr. Dobrinsky, while he was also serving as our
president and chief executive officer.
Francis Elenio, our chief financial officer, treasurer and secretary, was
granted options to purchase 30,000 shares of GoAmerica Communications Corp.
common stock for $4.50 per share on August 3, 1999 in his capacity as an
officer of GoAmerica Communications Corp. In connection with our reorganization
on December 31, 1999, all such options are now exercisable into shares of our
common stock. Mr. Elenio also was granted options to purchase 10,000 shares of
common stock for $40.12 per share on January 6, 2000. All such options are
immediately exercisable.
In July 1998, we entered into a consulting arrangement with Andrew Seybold
Group LLC, pursuant to which we are obligated to pay Mr. Seybold's firm $3,000
per month for consulting services and expertise relating to the wireless data
and communications industry. On December 31, 1999, our compensation committee
granted Mr. Seybold options to purchase 8,000 shares of our common stock at
$10.45 per share in connection with his services to be rendered as a member of
our board of directors. One third of such options shall vest on each of the
first, second and third anniversaries from the date of grant.
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PRINCIPAL STOCKHOLDERS
The following table sets forth as of January 14, 2000, as adjusted to give
effect to the sale of common stock offered hereby, certain information
regarding beneficial ownership of our common stock by:
. each person or group of affiliated persons we expect to be the
beneficial owner of more than 5% of the outstanding shares of common
stock;
. each director;
. each Named Executive Officer;
. and all directors and Named Executive Officers as a group.
The address for each officer is c/o GoAmerica, Inc., 401 Hackensack Avenue,
Hackensack, New Jersey 07601.
<TABLE>
<CAPTION>
Percentage(/2/)
--------------------------------
Name Shares(/1/) Prior to Offering After Offering
---- ----------- ----------------- --------------
<S> <C> <C> <C>
Aaron Dobrinsky(/3/)............. 1,053,156 26.4% %
Dobrinsky Family Holdings,
L.P.(/4/)....................... 511,578 12.9
Dobrinsky Business Holdings,
L.P.(/4/)....................... 306,945 7.7
CIBC WMV Inc.(/5/)............... 717,704 18.1
Robi Blumenstein(/6/)............ 717,704 18.1
Joseph Korb(/7/)................. 541,594 13.6
Korb Business Holdings,
L.P.(/8/)....................... 255,797 6.5
Alan Docter(/9/)................. 335,609 8.5
Mark Kristoff(/10/).............. 41,496 1.0 *
Francis Elenio(/11/)............. 40,000 1.0 *
Zachary Prensky(/12/)............ 27,290 * *
Andrew Seybold................... -- * *
All executive officers and
directors as a group (8
persons)(/13/).................. 2,756,849 67.8% %
</TABLE>
- --------
* Less than 1%.
(1) Beneficial ownership includes any shares as to which the individual or
entity has sole or shared voting power or investment power and also any
shares which the individual or entity has a right to acquire within 60
days after January 14, 2000 through the exercise of any stock options or
warrants. We have also assumed the conversion of all outstanding shares of
Preferred Stock into shares of our common stock upon completion of this
offering. The inclusion herein of such shares, however, does not
constitute an admission that the named stockholder is a direct or indirect
beneficial owner of such shares. Unless otherwise indicated, each person
or entity named in the table has sole voting power and investment power
with respect to all shares of capital stock listed as owned by such person
or entity.
(2) Applicable percentage of ownership is based on an aggregate of 3,965,686
shares of common stock outstanding on January 14, 2000 (including
1,004,788 shares of common stock to be issued upon conversion of all
outstanding shares of Series A Preferred Stock upon completion of the
offering but excluding 648,057 shares of common stock issuable upon
conversion of our Series B Preferred Stock expected to be issued during
January 2000 and 28,352 shares of common stock issuable to CIBC World
Markets, Inc. relating to the Series B Preferred Stock financing) and an
aggregate of shares of common stock outstanding after the completion of
this offering.
(3) Includes 30,000 shares subject to options that are immediately
exercisable. Also includes 511,578 shares held by Dobrinsky Family
Holdings, L.P. and 306,945 shares held by Dobrinsky Business Holdings,
L.P.
(4) Mr. Dobrinsky has voting and dispositive power with respect to the shares
of common stock held by Dobrinsky Family Holdings, L.P. and Dobrinsky
Business Holdings, L.P.
(5) Includes 717,704 shares to be issued in connection with the conversion of
7,500 shares of Series A Preferred Stock upon completion of this offering.
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(6) Mr. Blumenstein is the designee of CIBC WMV, Inc. on our board of
directors and has the power to vote or direct the vote of and to dispose
or direct the disposition of the shares owned by CIBC WMV Inc. Mr.
Blumenstein expressly disclaims beneficial ownership of such shares.
(7) Includes 30,000 shares subject to options that are immediately
exercisable. Also includes 255,797 shares held by Korb Business Holdings,
L.P.
(8) Mr. Korb has voting and dispositive power with respect to the shares of
common stock held by Korb Business Holdings, L.P.
(9) Includes 30,623 shares to be issued in connection with the conversion of
320 shares of Series A Preferred Stock upon completion of this offering.
Also includes 59,850 shares subject to warrant agreements that are
immediately exercisable.
(10) Includes 1,954 shares subject to a warrant agreement that is immediately
exercisable.
(11) Includes 40,000 shares subject to options that are immediately
exercisable.
(12) Includes 17,438 shares subject to a warrant agreement in the name of
Zackfoot Investments, LLC that is immediately exercisable.
(13) See notes 3 through 12.
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DESCRIPTION OF CAPITAL STOCK
General
GoAmerica Communications Corp. was incorporated in Delaware in 1996. In
December 1999, GoAmerica, Inc. was incorporated in Delaware and each of the
stockholders of GoAmerica Communications Corp. exchanged all their outstanding
shares of common stock and preferred stock of that company for newly issued
shares of GoAmerica, Inc. with equivalent rights and preferences. As a result,
GoAmerica Communications Corp. became a wholly-owned subsidiary of GoAmerica,
Inc. In addition, each outstanding warrant and option to purchase shares of
common stock of GoAmerica Communication Corp. is now exercisable for shares of
common stock of GoAmerica, Inc.
Upon consummation of this offering, our authorized capital stock will
consist of 45,000,000 shares of common stock, par value $0.01 per share, and
5,000,000 shares of undesignated preferred stock, par value $0.01 per share. At
January 17, 2000, after giving effect to the conversion of all outstanding
shares of Series A Preferred Stock and Series B Preferred Stock upon
consummation of this offering, 4,613,743 shares of common stock were
outstanding and held by 77 stockholders, including the holders of our Series B
Preferred Stock which we expect to issue during January 2000. The following
statements are brief summaries of certain provisions with respect to our
capital stock contained in our Certificate of Incorporation and Bylaws, copies
of which have been filed as exhibits to our registration statement. See "Where
You Can Find More Information." The following summary is qualified in its
entirety by reference thereto.
Common Stock
The holders of our common stock are entitled to one vote for each share held
of record upon such matters and in such manner as may be provided by law.
Subject to preferences applicable to any outstanding shares of preferred stock,
the holders of common stock are entitled to receive ratably dividends, if any,
as may be declared by the board of directors out of funds legally available for
dividend payments. In the event we liquidate, dissolve or wind up, the holders
of common stock are entitled to share ratably in all assets remaining after
payment of liabilities and liquidation preferences of any outstanding shares of
the preferred stock. Holders of common stock have no preemptive rights or
rights to convert their common stock into any other securities. There are no
redemption or sinking fund provisions applicable to the common stock. All
outstanding shares of common stock are fully paid and nonassessable.
Preferred Stock
The preferred stock is issuable from time to time in one or more series and
with such designations, preferences and other rights for each series as shall
be stated in the resolutions providing for the designation and issue of each
such series adopted by our board of directors. The board of directors is
authorized by our Certificate of Incorporation to determine, among other
things, the voting, dividend, redemption, conversion, exchange and liquidation
powers, rights and preferences and the limitations thereon pertaining to such
series. The board of directors, without stockholder approval, may issue
preferred stock with voting and other rights that could adversely affect the
voting power of the holders of the common stock and that could have certain
anti-takeover effects. We have no present plans to issue any shares of
preferred stock. The ability of the board of directors to issue preferred stock
without stockholder approval could have the effect of delaying, deferring or
preventing a change in control of us or the removal of existing management.
Warrants
At December 31, 1999, we had outstanding warrants to purchase an aggregate
of 161,625 shares of our common stock. The weighted average exercise price of
the warrants is $9.26 per share. Any warrant may be exercised by applying the
value of a portion of the warrant, which is equal to the number shares issuable
under the warrant being exercised multiplied by the fair market value of a
share of our common stock, less the per share exercise price, in lieu of
payment of the exercise price per share. Of such warrants, an aggregate of
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56,292 will expire in 2001, an aggregate of 5,360 will expire in 2003, an
aggregate of 116,422 will expire in 2004, and an aggregate of 40,000 will
expire in 2008.
Delaware Anti-Takeover Law and Our Certificate of Incorporation and Bylaw
Provisions
Provisions of Delaware law and our Certificate of Incorporation and Bylaws
could make it difficult for a third party to acquire us and to remove our
incumbent officers and directors. These provisions, summarized below, are
expected to discourage coercive takeover practices and inadequate takeover bids
and to encourage persons seeking to acquire control of GoAmerica to negotiate
first with our board of directors. We believe that the benefits of increased
protection of our ability to negotiate with the proponent of an unfriendly or
unsolicited acquisition proposal outweigh the disadvantages of discouraging
such proposals because, among other things, negotiation could result in an
improvement of the terms of the proposal.
We are subject to Section 203 of the Delaware General Corporation Law, which
regulates corporate acquisitions. In general, Section 203 prohibits a publicly-
held Delaware corporation from engaging in a "business combination" with an
"interested stockholder" for a period of three years following the date the
person became an interested stockholder, unless:
. the board of directors approved the transaction in which such
stockholder became an interested stockholder prior to the date the
interested stockholder attained such status;
. upon consummation of the transaction that resulted in the stockholder's
becoming an interested stockholder, he or she owned at least 85% of the
voting stock of the corporation outstanding at the time the transaction
commenced, excluding shares owned by persons who are directors and also
officers; or
. on or subsequent to such date the business combination is approved by
the board of directors and authorized at an annual or special meeting of
stockholders by the affirmative vote of at least 66 2/3% of the
corporation's voting stock not owned by the interested stockholder.
A "business combination" generally includes a merger, sale of assets or
stock, or other transaction resulting in a financial benefit to the interested
stockholder. In general, an "interested stockholder" is a person who, together
with affiliates and associates, owns, or within three years prior to the
determination of interested stockholder status, did own, 15% or more of a
corporation's voting stock.
Our Certificate of Incorporation provides that, effective upon the closing
of this offering, the terms of office of the members of the board of directors
will be divided into three classes: Class A, whose term will expire at the
annual meeting of stockholders to be held in 2001, Class B, whose term will
expire at the annual meeting of stockholders to be held in 2002, and Class C,
whose term will expire at the annual meeting of stockholders to be held in
2003. At each annual meeting of stockholders after the initial classification,
the successors to directors whose term will then expire will be elected to
serve from the time of election and qualification until the third annual
meeting following election. Our By-laws permit the board of directors to
increase or decrease the size of the board of directors. Any additional
directorships resulting from an increase in the number of directors will be
distributed among the three classes so that, as nearly as possible, each class
will consist of one-third of the total number of directors. This classification
of the board of directors may have the effect of delaying or preventing changes
in control or management of GoAmerica.
Furthermore, our Certificate of Incorporation and Bylaws also provide that:
(i) the affirmative vote of the holders of at least 80% of the voting power of
all outstanding shares of the capital stock of GoAmerica shall be required to
adopt, amend or repeal any provision of our Bylaws; (ii) upon the closing of
this offering, stockholders of GoAmerica may not take any action by written
consent; (iii) upon the closing of this offering, special meetings of
stockholders may be called only by our president, the chairman of our board of
directors or a majority of our board of directors and business transacted at
any such special meeting shall be limited to matters relating to the purposes
set forth in the notice of such special meeting; (iv) our board of directors,
when
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evaluating an offer related to a tender or exchange offer or other business
combination, is authorized to give due consideration to any relevant factors,
including the social, legal and economic effects upon employees, suppliers,
customers, creditors, the community in which we conduct business, and the
economy of the state, region and nation; and (v) the affirmative vote of the
holders of at least 80% of the voting power of all outstanding shares of the
capital stock of GoAmerica shall be required to amend the above provisions or
the limitations on director liability.
The Delaware statute, the undesignated authorized Preferred Stock and the
foregoing provisions of our Certificate of Incorporation and our Bylaws may
discourage certain types of transactions involving an actual or potential
change in control of GoAmerica and could have the effect of delaying, deterring
or preventing a change in control of GoAmerica. In addition, in the event of
certain mergers, a reorganization or consolidation of GoAmerica with or into
another corporation or the sale of all or substantially all of our assets or
all of our capital stock wherein the successor corporation does not assume
outstanding options or issue equivalent options, our board of directors is
required to accelerate vesting of options outstanding under our 1999 Stock
Plan.
Registration Rights
In October 1996, we entered into a Registration Rights Agreement pursuant to
which we granted certain registration rights to stockholders covering an
aggregate of 687,652 shares of our common stock. Messrs. Docter and Kristoff
are among such stockholders. Pursuant to the October 1996 Registration Rights
Agreement, at any time beginning six months after the effective date of this
offering, the stockholders of at least a majority of such registrable shares of
common stock have the right, subject to certain restrictions set forth therein,
to require that we register, at our expense, on no more than two occasions any
or all of their shares of common stock covered by such agreement.
The October 1996 Registration Rights Agreement also provides that, if at any
time we propose to register any of our common stock under the Securities Act
for sale to the public on either a Form S-1, Form S-2 or Form S-3 Registration
Statement, those stockholders party to the agreement have unlimited piggyback
registration rights at our expense, subject to certain restrictions, including
the right of the managing underwriter in such offering to limit the amount of
securities registered by such stockholders.
In January 1998, we issued warrants to purchase 2,040 shares of our common
stock and such shares have registration rights similar to the registration
rights set forth in the October 1996 Registration Rights Agreement.
In June 1999, we entered into a Registration Rights Agreement pursuant to
which we granted certain registration rights to stockholders covering an
aggregate of 956,939 shares of our common stock that will be issued upon the
consummation of this offering and the automatic conversion of their shares of
Series A Preferred Stock. This number of shares also included shares of Series
A Preferred Stock sold in August 1999. CIBC WMV is one of the stockholders
party to this agreement. Pursuant to the June 1999 Registration Rights
Agreement, at any time beginning 180 days after the effective date of this
offering, the stockholders of at least 67% of such shares have the right,
subject to certain restrictions set forth in the June 1999 Registration Rights
Agreement, to request that we register, at our expense, any or all of the
shares of common stock currently underlying the shares of Series A Preferred
Stock held by such stockholders.
The June 1999 Registration Rights Agreement also provides that, if at any
time we propose to register any of our common stock under the Securities Act
for sale to the public, the stockholders party to this agreement have unlimited
piggyback registration rights at our expense, subject to certain restrictions,
subject to the right of the managing underwriter to limit the amount of
securities registered by such stockholders. In addition, the 1999 Registration
Rights Agreement provides that under certain circumstances, stockholders party
thereto may register up to fifty percent of the number of shares available to
be sold in any secondary offering of our common stock.
Our underwriters have advised our stockholders that they may not participate
in this offering or otherwise exercise any of their registration rights in
connection herewith.
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Listing
We have applied to have our common stock approved for quotation on the
Nasdaq National Market under the symbol "GOAM".
Transfer Agent and Registrar
The transfer agent and registrar for the common stock is American Stock
Transfer & Trust Company. The transfer agent's address and telephone number is
40 Wall Street, New York, New York 10005, 718-921-8200.
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SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of this offering, we will have shares of common stock
outstanding. Of these shares, the shares sold in the offering, plus any
additional shares sold upon exercise of the underwriters' over-allotment
option, will be freely transferable by persons other than "affiliates" of
GoAmerica without restriction or further registration under the Securities Act.
The remaining outstanding shares will be "restricted securities" (the
"Restricted Shares") within the meaning of Rule 144 under the Securities Act
and may not be sold in the absence of registration under the Securities Act
unless an exemption from registration is available, such as the exemption
afforded by Rule 144.
Each of GoAmerica, our officers and directors, and certain of our
stockholders have entered into "lock-up" agreements with a representative of
the underwriters, providing that, subject to certain exceptions, they will not
offer, sell or otherwise dispose of any shares of common stock, or securities
convertible into or exchangeable for common stock, or enter into any agreement
to do so, for a period of 180 days after the date of this prospectus without
the prior written consent of Bear, Stearns & Co. Inc. acting as a
representative of the underwriters. Bear, Stearns & Co. Inc. may release any of
such shares in its sole discretion at any time and without prior notice.
Following expiration of the "lock-up" period, all the Restricted Shares will
become eligible for sale at various times commencing immediately pursuant to
Rule 144, subject to certain limitations described below. In addition, certain
of the Restricted Shares may be sold upon expiration of the "lock-up" period if
eligible stockholders elect to exercise available registration rights. See
"Description of Capital Stock--Registration Rights."
Rule 144, as currently in effect, provides that an affiliate of GoAmerica or
a person, or persons whose sales are aggregated, who has beneficially owned
Restricted Shares that were issued by GoAmerica or purchased by such person
from a nonaffiliate of GoAmerica at least one year prior to such sale is
entitled to sell, commencing 90 days after the date of this prospectus, within
any three-month period, a number of shares that does not exceed the greater of
1% of the then outstanding shares of common stock (approximately shares of
common stock immediately after this offering) and the average weekly trading
volume in the common stock during the four calendar weeks preceding such sale.
Sales under Rule 144 also are subject to certain manner-of-sale provisions,
notice requirements and the availability of current public information about
us. However, a person who is not an "affiliate" of GoAmerica at any time during
the three months preceding a sale, and who has beneficially owned Restricted
Shares that were issued by GoAmerica or purchased by such person from a
nonaffiliate of GoAmerica at least two years prior to such sale, is entitled to
sell such shares under Rule 144 without regard to the limitations described
above.
As of the date of this prospectus, there were outstanding options and
warrants to purchase an aggregate of shares of common stock. After giving
effect to vesting provisions limiting the exercisability of all the outstanding
options and the "lock-up" period applicable to certain option holders, none of
these shares will become available for sale in the public market pursuant to
Rules 144 and 701 under the Securities Act until at least 180 days after
completion of this offering. Rule 701 relates to the sale of shares issuable
under compensatory stock plans. of such shares will become available for
resale at the expiration of the "lock-up" period. We intend to register on a
Form S-8 registration statement under the Securities Act, during the 180-day
lock-up period, the resale of 839,500 shares of common stock issuable upon the
exercise of outstanding options or reserved for issuance under the 1999 Stock
Plan and the resale of 500,000 shares of common stock to be sold to employees
pursuant to our Employee Stock Purchase Plan. See "Management--GoAmerica, Inc.
1999 Stock Option Plan" and "--Employee Stock Purchase Plan."
Since there has been no public market for shares of the common stock prior
to this offering, we are unable to predict the effect that sales made pursuant
to Rules 144 or 701 under the Securities Act, or otherwise, may have on the
prevailing market price of the shares of the common stock. Sales of a
substantial amount of the common stock in the public market, or the perception
that such sales could occur, could adversely affect the market prices of our
stock. See "Risk Factors--Future sales of our common stock may negatively
affect our stock price."
60
<PAGE>
CERTAIN U.S. TAX CONSEQUENCES TO NON-U.S. HOLDERS
Following is a general discussion of the material U.S. federal income and
estate tax consequences of the ownership and disposition of the common stock
applicable to non-U.S. holders of our common stock. For purposes of this
discussion, a non-U.S. holder is any holder of our common stock that, for U.S.
federal income tax purposes, is not a U.S. person (as defined below). This
discussion does not address all aspects of U.S. federal income and estate
taxation that may be relevant in light of a non-U.S. holder's particular facts
and circumstances, such as being a U.S. expatriate, and does not address any
tax consequences arising under the laws of any state, local or non-U.S. taxing
jurisdiction. Furthermore, the following discussion is based on current
provisions of the Internal Revenue Code of 1986, as amended, and administrative
and judicial interpretations thereof, all as in effect on the date hereof, and
all of which are subject to change, possibly with retroactive effect. We have
not and will not seek a ruling from the Internal Revenue Service with respect
to the U.S. federal income and estate tax consequences described below, and as
a result, there can be no assurance that the Internal Revenue Service will not
disagree with or challenge any of the conclusions set forth in this discussion.
For purposes of this discussion, the term U.S. person means:
. a citizen or resident of the United States;
. a corporation, partnership or other entity created or organized in the
United States or under the laws of the United States or any political
subdivision thereof;
. an estate whose income is included in gross income for U.S. federal
income tax purposes regardless of its source; or
. a trust whose administration is subject to the primary supervision of a
U.S. court and which has one or more U.S. persons who have the authority
to control all substantial decisions of the trust.
Dividends
A dividend paid to a non-U.S. holder generally will be subject to U.S.
withholding tax either at a rate of 30% of the gross amount of the dividend or
such lower rate as may be specified by an applicable income tax treaty.
Dividends received by a non-U.S. holder that are effectively connected with a
U.S. trade or business conducted by the non-U.S. holder are exempt from that
withholding tax. However, those effectively connected dividends, net of certain
deductions and credits, are taxed at the same graduated rates applicable to
U.S. persons.
In addition to the graduated tax described above, dividends received by a
corporate non-U.S. holder that are effectively connected with a U.S. trade or
business of the corporate non-U.S. holder may also be subject to a branch
profits tax at a rate of 30% or such lower rate as may be specified by an
applicable income tax treaty.
A non-U.S. holder that is eligible for a reduced rate of withholding tax
pursuant to an applicable income tax treaty may be required to submit
documentation to avail itself of that treaty and may be able to obtain a refund
of any excess amounts withheld by GoAmerica by filing an appropriate claim for
refund with the Internal Revenue Service.
Gain On Disposition Of Common Stock
A non-U.S. holder generally will not be subject to U.S. federal income tax
on any gain realized upon the sale or other disposition of our common stock
unless:
. the gain is effectively connected with a U.S. trade or business of the
non-U.S. holder (which gain, in the case of a corporate non-U.S. holder,
must also be taken into account for branch profits tax purposes);
61
<PAGE>
. the non-U.S. holder is an individual who holds his or her common stock
as a capital asset (generally, an asset held for investment purposes)
and who is present in the United States for a period or periods
aggregating 183 days or more during the calendar year in which the sale
or disposition occurs and certain other conditions are met; or
. we are or have been a "United States real property holding corporation"
for U.S. federal income tax purposes at any time within the shorter of
the five-year period preceding the disposition or the holder's holding
period for its common stock. We believe that we are not and do not
believe that we will become a "United States real property holding
corporation" for U.S. federal income tax purposes.
Backup Withholding and Information Reporting
Generally, we would be required to report annually to the Internal Revenue
Service the amount of dividends, if any, paid on the common stock, the name and
address of the recipient, and the amount, if any, of tax withheld. A similar
report would be sent to the recipient. Pursuant to applicable income tax
treaties or other agreements, the Internal Revenue Service may make its reports
available to tax authorities in the recipient's country of residence.
Dividends paid to a non-U.S. holder at an address within the United States
may be subject to backup withholding at a rate of 31% if the non-U.S. holder
fails to establish that it is entitled to an exemption or to provide a correct
taxpayer identification number and other information to the payer. Backup
withholding will generally not apply to the dividends paid to non-U.S. holders
at an address outside the United States on or prior to December 31, 2000 unless
the payer has knowledge that the payee is a U.S. person. Under recently
finalized Treasury Regulations regarding withholding and information reporting,
payment of dividends to non-U.S. holders at an address outside the United
States after December 31, 2000 may be subject to backup withholding at a rate
of 31% unless such non-U.S. holder satisfies various certification
requirements.
Under current Treasury Regulations, the payment of the proceeds of the
disposition of our common stock to or through the U.S. office of a broker is
subject to information reporting and backup withholding at a rate of 31% unless
the holder certifies its non-U.S. status under penalties of perjury or
otherwise establishes an exemption. Generally, the payment of the proceeds of
the disposition by a non-U.S. holder of our common stock outside the United
States to or through a foreign office of a broker will not be subject to backup
withholding but will be subject to information reporting requirements if the
broker is:
. a U.S. person;
. a "controlled foreign corporation" for U.S. federal income tax purposes;
or
. a foreign person 50% or more of whose gross income for certain periods
is from the conduct of a U.S. trade or business
unless the broker has documentary evidence in its files of the holder's non-
U.S. status and certain other conditions are met, or the non-U.S. holder
otherwise establishes an exemption. Neither backup withholding nor information
reporting generally will apply to a payment of the proceeds of a disposition of
our common stock by or through a foreign office of a foreign broker not subject
to the preceding sentence.
In general, the recently finalized Treasury Regulations, described above, do
not significantly alter substantive withholding and information reporting
requirements but would alter procedures for claiming benefits of an income tax
treaty and change the certifications procedures relating to the receipt by
intermediaries of payments on behalf of the beneficial owner of shares of
common stock. Non-U.S. holders should consult their tax advisors regarding the
effect, if any, of those final Treasury Regulations on an investment in our
common stock. Those final Treasury Regulations are generally effective for
payments made after December 31, 2000.
62
<PAGE>
Backup withholding is not an additional tax. Rather, the tax liability of
persons subject to backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, a refund may be
obtained, provided that the required information is furnished to the Internal
Revenue Service.
Estate Tax
An individual non-U.S. holder who owns our common stock at the time of his
or her death or had made certain lifetime transfers of an interest in our
common stock will be required to include the value of our common stock in his
or her gross estate for U.S. federal estate tax purposes, unless an applicable
estate tax treaty provides otherwise.
THE FOREGOING DISCUSSION IS A SUMMARY OF THE PRINCIPAL U.S. FEDERAL INCOME
AND ESTATE TAX CONSEQUENCES OF THE OWNERSHIP, SALE OR OTHER DISPOSITION OF OUR
COMMON STOCK BY NON-U.S. HOLDERS. ACCORDINGLY, INVESTORS ARE URGED TO CONSULT
THEIR OWN TAX ADVISORS WITH RESPECT TO THE INCOME AND ESTATE TAX CONSEQUENCES
OF THE OWNERSHIP AND DISPOSITION OF COMMON STOCK, INCLUDING THE APPLICATION AND
EFFECT OF THE LAWS OF ANY STATE, LOCAL, FOREIGN OR OTHER TAXING JURISDICTION.
63
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
dated , 2000, each of the underwriters named below, through their
representatives Bear, Stearns & Co. Inc., Hambrecht & Quist LLC, U.S. Bancorp
Piper Jaffray Inc. and SoundView Technology Group, Inc., has severally agreed
to purchase from us the aggregate number of shares of common stock set forth
opposite its name below at the public offering price less the underwriting
discount set forth on the cover page of this prospectus.
<TABLE>
<CAPTION>
Underwriters Number of Shares
- ------------ ----------------
<S> <C>
Bear, Stearns & Co. Inc........................................
Hambrecht & Quist LLC..........................................
U.S. Bancorp Piper Jaffray Inc.................................
SoundView Technology Group, Inc................................
-----
Total........................................................
=====
</TABLE>
The underwriting agreement provides that the obligations of the several
underwriters thereunder are subject to approval of certain legal matters by
their counsel and to various other conditions. Under the underwriting
agreement, the underwriters are obligated to purchase and pay for all of the
above shares of common stock, other than those covered by the over-allotment
option described below, if they purchase any of the shares.
The underwriters propose to initially offer some of the shares directly to
the public at the offering price set forth on the cover page of this prospectus
and some of the shares to dealers at this price less a concession not in excess
of $ per share. The underwriters may allow, and dealers may re-allow,
concessions not in excess of $ per share on sales to other dealers. After
the initial offering of the shares to the public, the underwriters may change
the offering price, concessions and other selling terms. The underwriters do
not intend to confirm sales to any accounts over which they exercise
discretionary authority.
We have granted the underwriters an option exercisable for 30 days from the
date of the underwriting agreement to purchase up to additional shares, at
the offering price less the underwriting discount. The underwriters may
exercise this option solely to cover over-allotments, if any, made in
connection with this offering. To the extent underwriters exercise this option
in whole or in part then each of the underwriters will become obligated,
subject to conditions, to purchase a number of additional shares approximately
proportionate to each underwriter's initial purchase commitment as indicated in
the preceding table.
We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act.
Our directors, executive officers and stockholders, who collectively hold a
total of shares of common stock, have agreed, subject to limited
exceptions, not to sell or offer to sell or otherwise dispose of any shares of
common stock or securities convertible into or exercisable or exchangeable for
our common stock, for a period of 180 days after the date of this prospectus
without the prior written consent of Bear, Stearns & Co. Inc., on behalf of the
underwriters.
In addition, we have agreed that for a period of 180 days after the date of
this prospectus we will not offer, sell or otherwise dispose of any shares of
common stock except for the shares offered in this offering and any shares
offered in connection with employee benefit plans, without the consent of Bear,
Stearns & Co. Inc., on behalf of the underwriters.
64
<PAGE>
Prior to the offering, there has been no public market for our common stock.
Consequently, the initial offering price for the common stock will be
determined by negotiations between us and the representatives of the
underwriters. Among the factors to be considered in these negotiations will be:
. our results of operations in recent periods;
. estimates of our business potential;
. an assessment of our management;
. prevailing market conditions; and
. the prices of similar securities of generally comparable companies.
We have applied to have our common stock approved for quotation on the
Nasdaq National Market under the symbol "GOAM." We cannot assure you, however,
that an active or orderly trading market will develop for the common stock or
that our common stock will trade in the public markets subsequent to the
offering at or above the initial offering price.
In order to facilitate the offering, the underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price of the
common stock during and after the offering. Specifically, the underwriters may
over-allot or otherwise create a short position in the common stock for their
own account by selling more shares of common stock than we have actually sold
to them. The underwriters may elect to cover any short position by purchasing
shares of common stock in the open market or by exercising the over-allotment
option granted to the underwriters. In addition, the underwriters may stabilize
or maintain the price of the common stock by bidding for or purchasing shares
of common stock in the open market and may impose penalty bids, under which
selling concessions allowed to syndicate members or other broker-dealers
participating in the offering are reclaimed if shares of common stock
previously distributed in the offering are repurchased in connection with
stabilization transactions or otherwise. The effect of these transactions may
be to stabilize or maintain the market price at a level above that which might
otherwise prevail in the open market and these transactions may be discontinued
at any time. The imposition of a penalty bid may also affect the price of the
common stock to the extent that it discourages resales. No representation is
made as to the magnitude or effect of these activities.
The underwriters have reserved for sale, at the initial public offering
price, up to shares of common stock for employees, directors and other
persons associated with us who express an interest in purchasing these shares
of common stock in the offering. The number of shares available for sale to the
general public in the offering will be reduced to the extent these persons
purchase reserved shares. Any reserved shares not purchased by these persons
will be offered by the underwriters to the general public on the same terms as
the other shares offered in this offering.
The underwriters may, from time to time, engage in transactions with, and
perform services for, us in the ordinary course of their business.
The following table shows the underwriting discount to be paid to the
underwriters in connection with this offering. These amounts are shown assuming
both no exercise and full exercise of the underwriters' option to purchase
additional shares of common stock.
<TABLE>
<CAPTION>
No Exercise Full Exercise
----------- -------------
<S> <C> <C>
Per share.......................................... $ $
Total.............................................. $ $
</TABLE>
Other expenses of this offering (including the registration fees and the
fees of financial printers, counsel and accountants) payable by us are expected
to be approximately $ million.
65
<PAGE>
LEGAL MATTERS
The validity of the shares of the common stock offered hereby will be passed
upon by Buchanan Ingersoll Professional Corporation, Princeton, New Jersey.
Certain legal matters in connection with the offering will be passed upon for
the underwriters by Sidley & Austin, New York, New York.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our financial
statements at December 31, 1997 and 1998, and for the years then ended and for
the period from our August 6, 1996 (date of inception) to December 31, 1996 as
set forth in their report. We have included our financial statements in the
prospectus and elsewhere in the registration statement in reliance on Ernst &
Young LLP's report, given on their authority as experts in accounting and
auditing.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the Securities and Exchange Commission a registration
statement on Form S-1 under the Securities Act, with respect to the shares of
common stock offered hereby. This prospectus does not contain all the
information which is in the registration statement. We refer to the
registration statement and to the exhibits and schedules filed with the
Registration Statement for further information with respect to us and the
shares of common stock offered in this prospectus. Statements contained herein
as to the content of any contract or other document are materially complete.
However, reference is made to the copy of such contract or other document filed
as an exhibit to the registration statement, and each such statement is
qualified in its entirety by such reference.
The registration statement and the exhibits and schedules thereto may be
inspected without charge at the Public Reference Room of the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the regional
offices of the Commission located at Seven World Trade Center, Suite 1300, New
York, New York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511. Copies of such documents may be obtained from the
Public Reference Room of the Commission at prescribed rates. This material also
may be obtained on the Commission's website at http://www.sec.gov. Information
regarding the operation of the Public Reference Room may be obtained by calling
the Commission at 1(800) SEC-0330.
We intend to furnish our stockholders with annual reports containing
financial statements certified by our independent accountants and make
available quarterly reports containing unaudited financial information for the
first three quarters of each year.
66
<PAGE>
GOAMERICA, INC.
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Auditors............................................ F-2
Balance Sheets as of December 31, 1997 and 1998 and September 30, 1999
(unaudited).............................................................. F-3
Statements of Operations for the period from August 6, 1996 (date of
inception) to December 31, 1996 and the years ended December 31, 1997 and
1998 and for the nine months ended September 30, 1998 and 1999
(unaudited).............................................................. F-4
Statements of Stockholders' Equity (Deficit) for the period from August 6,
1996 (date of inception) to December 31, 1996 and the years ended
December 31, 1997 and 1998 and for the nine months ended September 30,
1999 (unaudited)......................................................... F-5
Statements of Cash Flows for the period from August 6, 1996 (date of
inception) to December 31, 1996 and the years ended December 31, 1997 and
1998 and for the nine months ended September 30, 1998 and 1999
(unaudited).............................................................. F-6
Notes to Financial Statements............................................. F-7
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Board of Directors
GoAmerica, Inc.
We have audited the accompanying balance sheets of GoAmerica Communications
Corp., the predecessor entity to GoAmerica, Inc., as of December 31, 1998 and
1997, and the related statements of operations, stockholders' equity (deficit)
and cash flows for the years then ended and the period from August 6, 1996
(date of inception) to December 31, 1996. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatements. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of GoAmerica Communications
Corp. at December 31, 1998 and 1997, and the results of its operations and its
cash flows for the years then ended and the period from August 6, 1996 (date of
inception) to December 31, 1996, in conformity with accounting principles
generally accepted in the United States.
/s/ Ernst & Young LLP
MetroPark, New Jersey
December 31, 1999
F-2
<PAGE>
GOAMERICA, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
Pro forma
Stockholders'
December 31, Equity
------------------------ -------------
September 30,
September 30, 1999
1997 1998 1999 (Note 13)
----------- ----------- ------------- -------------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Assets
Current assets:
Cash and cash
equivalents.......... $ 19,589 $ 1,960,954 $ 7,316,611
Accounts receivable,
less allowance for
doubtful accounts of
$5,000 in 1997,
$20,000 in 1998 and
$75,000 in 1999...... 5,492 199,021 237,809
Merchandise
inventories.......... 6,420 66,222 279,819
Prepaid expenses and
other................ 600 34,149 449,532
----------- ----------- ------------
Total current assets.... 32,101 2,260,346 8,283,771
Property, equipment and
leasehold improvements,
net.................... 218,527 643,692 804,283
Investment in DataRover
Mobile Systems, Inc. .. 255,700
Other assets............ 72,978 105,945 81,124
----------- ----------- ------------
$ 323,606 $ 3,009,983 $ 9,424,878
=========== =========== ============
Liabilities, redeemable
convertible preferred
stock and stockholders'
equity (deficit)
Current liabilities:
Accounts payable...... $ 80,818 $ 165,383 $ 1,998,746
Accrued expenses...... 94,503 604,806 566,663
Deferred income....... 14,508 39,804
----------- ----------- ------------
Total current
liabilities............ 175,321 784,697 2,605,213
Other liabilities....... 155,746
Commitments and
contingencies
Series A redeemable
convertible preferred
stock, $.01 par value,
authorized: none in
1997 and 1998 and
10,000 shares in 1999;
issued and outstanding:
none in 1997 and 1998;
10,000 shares in 1999,
and none pro forma
1999, $10,000,000
liquidation
preference............. 9,802,018 $ --
Stockholders' equity
(deficit):
Preferred stock $.01
par value,
authorized: 5,000,000
shares 1997, 1998 and
1999; issued and
outstanding: none in
1997, 1998 and 1999;
none pro forma 1999..
Common stock, $.01 par
value; authorized:
5,000,000 shares in
1997, 1998 and 1999;
issued and
outstanding:
2,051,180 in 1997;
2,665,975 in 1998 and
2,668,548 shares in
1999 respectively,
and 3,625,489 shares
pro forma 1999....... 20,512 26,660 26,686 36,255
Additional paid-in
capital.............. 1,394,488 6,042,050 7,392,833 17,185,282
Deferred employee
compensation......... (512,325) (512,325)
Accumulated deficit... (1,266,715) (3,843,424) (10,045,293) (10,045,293)
----------- ----------- ------------ -----------
Total stockholders'
equity (deficit)....... 148,285 2,225,286 (3,138,099) $ 6,663,919
----------- ----------- ------------ ===========
$ 323,606 $ 3,009,983 $ 9,424,878
=========== =========== ============
</TABLE>
See accompanying notes.
F-3
<PAGE>
GOAMERICA, INC.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Period from
August 6, 1996 Nine months ended
(date of inception) Year ended December 31 September 30
to December 31, ------------------------ ------------------------
1996 1997 1998 1998 1999
------------------- ----------- ----------- ----------- -----------
(unaudited) (unaudited)
<S> <C> <C> <C> <C> <C>
Revenues:
Subscriber............ $ 114,524 $ 359,364 $ 183,552 $ 663,892
Equipment............. 33,431 449,027 282,868 616,938
Other................. 24,775 18,264 12,081 200,113
----------- ----------- ----------- -----------
172,730 826,655 478,501 1,480,943
Costs and expenses:
Cost of subscriber
revenue.............. 87,551 303,477 155,007 1,982,660
Cost of equipment
revenue.............. 14,960 532,074 335,184 738,747
Sales and marketing... $ 42,546 242,708 908,694 504,149 1,409,876
General and
administrative....... 174,848 841,090 1,549,188 1,064,635 2,736,761
Depreciation and
amortization......... 3,358 32,384 123,616 68,500 182,528
Non-cash employee
compensation......... 415,500
--------- ----------- ----------- ----------- -----------
220,752 1,218,693 3,417,049 2,127,475 7,466,072
--------- ----------- ----------- ----------- -----------
Loss from operations.... (220,752) (1,045,963) (2,590,394) (1,648,974) (5,985,129)
Settlement costs...... (297,310)
Interest income....... 13,685 80,570
--------- ----------- ----------- ----------- -----------
Net loss................ $(220,752) $(1,045,963) $(2,576,709) $(1,648,974) (6,201,869)
========= =========== =========== ===========
Accretion of redemption
value of manditorily
redeemable convertible
preferred stock........ (10,167)
-----------
Net loss applicable to
common stockholders.... $(6,212,036)
===========
Basic net loss per share
applicable to common
stockholders........... $ (0.13) $ (0.52) $ (1.12) $ (0.74) $ (2.33)
========= =========== =========== =========== ===========
Diluted net loss per
share applicable to
common stockholders.... $ (0.12) $ (0.50) $ (1.09) $ (0.72) $ (2.27)
========= =========== =========== =========== ===========
Weighted-average used in
computation of basic
net loss per share
applicable to common
stockholders........... 1,743,423 2,010,379 2,298,921 2,232,135 2,666,288
Weighted average shares
used in computation of
diluted net loss per
share.................. 1,812,048 2,079,004 2,367,546 2,300,760 2,734,913
Pro forma basic net loss
per share (unaudited).. $ (2.10)
===========
Pro forma diluted net
loss per share
(unaudited)............ $ (2.05)
===========
Weighted-average shares
used in computation of
pro forma basic net
loss per share
(unaudited)............ 2,951,091
Weighted average shares
used in computation of
pro forma diluted net
loss per share
(unaudited)............ 3,019,716
</TABLE>
See accompanying notes.
F-4
<PAGE>
GOAMERICA, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
Period from August 6, 1996
(date of inception) to September 30, 1999
<TABLE>
<CAPTION>
Total
Common Stock Additional Deferred Stockholders'
----------------- Paid-in Employee Accumulated Equity
Shares Amount Capital Compensation Deficit (Deficit)
--------- ------- ---------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Issuance of common
stock.................. 2,000,000 $20,000 $ 980,000 $ 1,000,000
Net loss............... $ (220,752) (220,752)
--------- ------- ---------- --------- ------------ -----------
Balance at December 31,
1996................... 2,000,000 20,000 980,000 $ -- (220,752) 779,248
Issuance of common
stock................. 51,180 512 414,488 415,000
Net loss............... (1,045,963) (1,045,963)
--------- ------- ---------- --------- ------------ -----------
Balance at December 31,
1997................... 2,051,180 20,512 1,394,488 -- (1,266,715) 148,285
Sale of common stock
and stock purchase
warrants.............. 614,792 6,148 4,647,562 4,653,710
Net loss............... (2,576,709) (2,576,709)
--------- ------- ---------- --------- ------------ -----------
Balance at December 31,
1998................... 2,665,972 26,660 6,042,050 -- (3,843,424) 2,225,286
Sale of common stock
(unaudited)........... 551 6 135,815 135,821
Issuance of common
stock upon exercise of
warrants (unaudited).. 2,025 20 20
Non-cash capital
contribution by
principal shareholders
in connection with
settlement agreements
(unaudited)........... 148,572 148,572
Issuance of warrants to
purchase common stock
in connection with
settlement agreements
(unaudited)........... 148,738 148,738
Deferred non-cash
employee compensation
(unaudited)........... 927,825 (927,825) --
Amortization of non-
cash deferred employee
compensation
(unaudited)........... 415,500 415,500
Accretion of redemption
value of redeemable
convertible preferred
stock (unaudited)..... (10,167) (10,167)
Net loss (unaudited)... (6,201,869) (6,201,869)
--------- ------- ---------- --------- ------------ -----------
Balance at September 30,
1999 (unaudited)....... 2,668,548 $26,686 $7,392,833 $(512,325) $(10,045,293) $(3,138,099)
========= ======= ========== ========= ============ ===========
</TABLE>
See accompanying notes.
F-5
<PAGE>
GOAMERICA, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Period from
August 6, 1996 Nine months ended
(date of inception) Year ended December 31 September 30
to December 31, ------------------------ ------------------------
1996 1997 1998 1998 1999
------------------- ----------- ----------- ----------- -----------
(unaudited) (unaudited)
<S> <C> <C> <C> <C> <C>
Operating activities
Net loss................ $ (220,752) $(1,045,963) $(2,576,709) $(1,648,974) $(6,201,869)
Adjustments to reconcile
net loss to net cash
used in operating
activities:
Depreciation and
amortization.......... 3,358 32,384 123,616 68,500 182,528
Provision for losses on
accounts receivable... 5,000 15,000 95,000
Non-cash employee
compensation.......... 415,500
Non-cash settlement
costs................. 297,310
Changes in operating
assets and
liabilities:
Increase in accounts
receivable............ (10,492) (199,651) (11,856) (133,788)
Increase in merchandise
inventories........... (6,420) (3,202) (18,128) (213,597)
(Increase) decrease in
prepaid expenses and
other assets.......... (132,897) 59,319 (78,316) (17,809) (390,562)
Increase (decrease) in
accounts payable...... 80,817 (20,125) 42,900 1,833,363
Increase (decrease) in
accrued expenses...... 12,003 82,501 510,303 85,484 (38,143)
Increase in deferred
income................ 14,508 25,296
Increase in other long-
term liabilities...... 155,746
---------- ----------- ----------- ----------- -----------
Net cash used in
operating activities... (338,288) (802,854) (2,214,576) (1,499,883) (3,973,216)
Investing activities
Purchase of property,
equipment and leasehold
improvements........... (74,392) (179,877) (297,769) (344,127) (343,119)
Acquisition of
business............... (200,000)
Investment in DataRover
Mobile Systems, Inc.... (255,700)
---------- ----------- ----------- ----------- -----------
Net cash used in
investing activities... (74,392) (179,877) (497,769) (344,127) (598,819)
Financing activities
Proceeds from sale of
common stock and stock
purchase warrants...... 1,000,000 415,000 4,653,710 3,984,245 135,841
Proceeds from sale of
preferred stock........ 9,791,851
---------- ----------- ----------- ----------- -----------
Net cash provided by
financing activities... 1,000,000 415,000 4,653,710 3,984,245 9,927,692
---------- ----------- ----------- ----------- -----------
Increase (decrease) in
cash and cash
equivalents............ 587,320 (567,731) 1,941,365 2,140,235 5,355,657
Cash and cash
equivalents at
beginning of period.... 587,320 19,589 19,589 1,960,954
---------- ----------- ----------- ----------- -----------
Cash and cash
equivalents at end of
period................. $ 587,320 $ 19,589 $ 1,960,954 $ 2,159,824 $ 7,316,611
========== =========== =========== =========== ===========
</TABLE>
See accompanying notes.
F-6
<PAGE>
GOAMERICA, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1997, December 31, 1998 and September 30, 1999
(All information as of September 30, 1999 and for the nine
month periods ended September 30, 1999 and 1998 is unaudited)
1. Description of Business
GoAmerica, Inc. (the "Company") offers wireless access to the internet and
corporate intranet systems to customers located in the United States. The
Company has formed strategic relationships with wireless carriers, software
providers, and hardware manufacturers who provide the mobile computer user
wireless communications, services and devices that complement the Company's
services. The Company also distributes wireless communication devices,
principally to customers of its wireless services.
The Company operates in a highly competitive environment subject to rapid
technological change and emergence of new technology. Although management
believes its services are transferable to emerging technologies, rapid changes
in technology could have an adverse financial impact on the Company.
The Company is highly dependent on third-party providers for wireless
communication services.
On December 31, 1999, the stockholders of GoAmerica Communications Corp.,
the predecessor to GoAmerica, Inc., exchanged all of the outstanding shares of
GoAmerica Communications Corp. for shares of GoAmerica, Inc., and as a result,
GoAmerica Communications Corp. became a wholly-owned subsidiary of GoAmerica,
Inc. Prior to December 31, 1999, GoAmerica, Inc. had no operations, assets or
liabilities. This corporate reorganization was accounted for as an exchange of
shares between entities under common control and no changes were made to the
historical cost basis of GoAmerica Communications Corp.'s net assets. See Note
14.
Basis of Presentation
As noted above, GoAmerica Communications Corp. became a wholly-owned
subsidiary of GoAmerica, Inc. effective December 31, 1999. The accompanying
financial statements reflect the financial position and results of operations
of GoAmerica Communications Corp. through September 30, 1999.
Interim Financial Statements
The accompanying unaudited financial statements as of September 30, 1999 and
for the nine month periods ended September 30, 1998 and 1999 include all
adjustments which, in the opinion of management, are necessary for a fair
presentation of the Company's financial position, results of operations and
cash flows for the periods presented. All such adjustments are of a normal
recurring nature. The results of the Company's operations for the nine months
ended September 30, 1999 are not necessarily indicative of the results of
operations for the full fiscal year.
2. Significant Accounting Policies
Cash Equivalents
Cash equivalents consist of highly liquid investments with a maturity of
three month or less when purchased.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and
F-7
<PAGE>
GOAMERICA, INC.
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997, December 31, 1998 and September 30, 1999
(All information as of September 30, 1999 and for the nine
month periods ended September 30, 1999 and 1998 is unaudited)
liabilities at the date of the financial statements, and the reported amounts
of certain expenses during the reporting periods. Actual results could differ
from those estimates.
Merchandise Inventories
Merchandise inventories, principally wireless devices, are stated at the
lower of cost (first-in, first-out) basis or market. The inventory of the
Company is subject to rapid technological changes which could have an adverse
impact on its realization in future periods. In addition, there are a limited
number of suppliers of the Company's inventory.
Property, Equipment and Leasehold Improvements
Property, equipment and leasehold improvements are stated at cost.
Depreciation is provided on the straight-line method over the estimated useful
lives of the related assets ranging from three to seven years. Expenditures for
maintenance and repairs are charged to expense as incurred.
Investment in DataRover Mobile Systems, Inc.
The investment in DataRover Mobile Systems, Inc. ("DataRover") consists of
the Company's investment in Series B Preferred Stock of DataRover, a private
company engaged in the hand-held mobile computing business. The investment is
accounted for on a cost basis as the Company's ownership is less than 5% of the
total outstanding shares of DataRover at September 30, 1999, the Company does
not exercise significant influence over DataRover and the DataRover stock does
not have a readily determinable fair value.
Revenue and Deferred Revenue
The Company derives subscriber revenue from the provision of wireless
communication services. Subscriber revenue consists of monthly charges for
access and usage and is recognized as the service is provided. Also included in
subscriber revenue are one-time non-refundable activation fees. To the extent
such fees exceed the related costs, they are deferred and recognized ratably
over the life of the related service contracts. Equipment revenue is recognized
upon shipment.
Cost of Revenues
Cost of subscriber revenue consists principally of airtime costs. Cost of
equipment revenue consists of the cost of equipment sold.
Income Taxes
Deferred income taxes are determined using the liability method. Under this
method, deferred tax assets and liabilities are determined based on differences
between financial reporting and tax bases of assets and liabilities and are
measured using the enacted tax rates and laws that will be in effect when the
differences are expected to reverse.
Advertising Costs
Advertising costs are expensed as incurred. During 1996, 1997 and 1998 and
the nine month periods ended September 30, 1998 and 1999, advertising expense
was approximately $17,000, $68,000, $203,000, $99,000 and $144,000,
respectively.
F-8
<PAGE>
GOAMERICA, INC.
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997, December 31, 1998 and September 30, 1999
(All information as of September 30, 1999 and for the nine
month periods ended September 30, 1999 and 1998 is unaudited)
Research and Development Costs
Research and development costs are expensed as incurred. During 1998 and the
nine month periods ended September 30, 1998 and 1999, research and development
costs totaled approximately $155,000, $105,000 and $364,000, respectively. The
Company did not incur research and development costs during 1996 and 1997.
Stock-Based Employee Compensation
The Company accounts for employee stock-based compensation in accordance
with Accounting Principles Board (APB) Opinion No. 25, "Accounting for Stock
Issued to Employees", using an intrinsic value approach to measure compensation
expense, if any. Appropriate disclosures using a fair value based method, as
provided by Statement of Financial Accounting Standards ("SFAS") No. 123,
"Accounting for Stock-Based Compensation" ("SFAS 123"), are also reflected in
the accompanying notes to the financial statements. Options issued to non-
employees are accounted for in accordance with SFAS 123, using a fair value
approach. The Company has not issued any options to non-employees.
Net Loss Available for Common Stockholders
Net loss available for common stockholders represents net loss adjusted by
accretion of the redeemable preferred stock to redemption value.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to a
concentration of credit risk consist of cash and cash equivalents and accounts
receivable. The Company maintains a significant portion of its cash and cash
equivalents with a major regional bank. The Company performs periodic credit
evaluations of its customers but generally does not require collateral.
Fair Value of Financial Instruments
The carrying amounts of the Company's financial instruments, which include
cash and cash equivalents, accounts receivable, accounts payable, accrued
expenses and Series A redeemable convertible preferred stock approximate their
fair values.
Segment Information
In June 1997, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 131, "Disclosures About Segments of an Enterprise and Related Information,"
which establishes standards for the way that a public enterprise reports
information about operating segments in annual financial statements and
requires that those enterprises report selected information about operating
segments in interim financial reports issued to shareholders. It also
establishes standards for related disclosures about products and services,
geographic areas and major customers. The Company operates in a single segment.
The chief operating decision maker allocates resources and assesses the
performance associated with wireless services and equipment sales on a single
segment basis.
Software Development Costs
In March 1998, the Accounting Standards Executive Committee of the American
Institute of Certified Public Accountants ("AICPA") issued Statement of
Position ("SOP") 98-1, "Accounting for the Costs of
F-9
<PAGE>
GOAMERICA, INC.
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997, December 31, 1998 and September 30, 1999
(All information as of September 30, 1999 and for the nine
month periods ended September 30, 1999 and 1998 is unaudited)
Computer Software Developed or Obtained for Internal Use." This SOP is
effective for fiscal years beginning after December 15, 1998. The Company has
adopted the provisions of SOP 98-1 as of January 1, 1999, with no material
effect.
All projects are being amortized over their estimated useful lives, which
has been determined by management to be three years. Amortization on the
projects begins when the software is ready for its intended use.
Start-Up Activities
In April 1998, the AICPA issued SOP 98-5, "Reporting on the Costs of Start-
up Activities." SOP 98-5, effective for fiscal years beginning after December
15, 1998, provides guidance on the financial reporting of start-up costs and
organization costs. It requires costs of start-up activities and organization
costs to be expensed as incurred. As the Company expensed these costs as
incurred, the adoption of this standard during the nine months ended September
30, 1999 had no impact on the Company's results of operations, financial
position or cash flows.
Recent Accounting Pronouncements
In June 1998, the FASB issued Statement of Financial Accounting Standards
No. 133, Accounting for Derivatives and Hedging Activities ("SFAS 133"), which
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts
(collectively referred to as derivatives) and for hedging activities. SFAS 133,
as amended, is effective for all fiscal quarters of fiscal years beginning
after June 15, 2000. As the Company does not currently intend to engage in
derivatives or hedging transactions, the Company does not anticipate any effect
on its results of operations, financial position or cash flows upon the
adoption of SFAS 133.
3. Property, Equipment and Leasehold Improvements
Property, equipment and leasehold improvements consists of the following:
<TABLE>
<CAPTION>
December 31,
------------------- September 30,
1997 1998 1999
-------- --------- -------------
<S> <C> <C> <C>
Furniture, fixtures and equipment....... $ 37,237 $ 197,573 $ 322,573
Computer equipment and software......... 217,032 589,142 792,094
Leasehold improvements.................. 16,335 31,502
-------- --------- ----------
254,269 803,050 1,146,169
Less accumulated depreciation and
amortization........................... (35,742) (159,358) (341,886)
-------- --------- ----------
$218,527 $ 643,692 $ 804,283
======== ========= ==========
</TABLE>
F-10
<PAGE>
GOAMERICA, INC.
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997, December 31, 1998 and September 30, 1999
(All information as of September 30, 1999 and for the nine
month periods ended September 30, 1999 and 1998 is unaudited)
4. Supplemental Balance Sheet Information
The following table summarizes the activity in the allowance for doubtful
accounts for the period from inception to December 31, 1996, the years ended
December 31, 1997 and 1998 and the nine month period ended September 30, 1999:
<TABLE>
<CAPTION>
December 31
------------------- September 30
1996 1997 1998 1999
---- ------ ------- ------------
<S> <C> <C> <C> <C>
Balance, beginning of period................ $-- $ -- $ 5,000 $20,000
Provision charged to operations............. -- 5,000 15,000 95,000
Amounts written off......................... -- -- -- 40,000
Balance, end of period...................... -- 5,000 20,000 75,000
</TABLE>
Accrued expenses consisted of the following:
<TABLE>
<CAPTION>
December 31,
---------------- September 30,
1997 1998 1999
------- -------- -------------
<S> <C> <C> <C>
Inventory purchases......................... $179,454
Employee compensation....................... 120,909 $ 45,000
Professional fees........................... $71,120 118,897 18,000
Equipment and leasehold improvement
purchases.................................. 175,000
Accrued legal settlement.................... 110,000
Sales and use taxes......................... 23,383 46,581 107,574
Other....................................... 138,965 111,089
------- -------- --------
$94,503 $604,806 $566,663
======= ======== ========
</TABLE>
5. Commitments and Contingencies
The Company leases office facilities under an operating lease which expires
in 2007. The Company has the option to renew the lease for an additional five
year period. Future minimum noncancelable operating leases with initial or
remaining terms of one year or more are as follows:
<TABLE>
<S> <C>
1999............................................................ $ 147,000
2000............................................................ 318,000
2001............................................................ 393,000
2002............................................................ 409,000
2003............................................................ 424,000
Thereafter...................................................... 1,528,000
</TABLE>
During 1996, 1997, 1998 and the nine month periods ended September 30, 1998
and 1999 total rent expense was approximately $20,000, $44,000, $60,000,
$43,000 and $181,000, respectively.
During 1999, the Company became a defendant in litigation involving its use
of certain computer software. On April 22, 1999, the Company entered into an
agreement under which it will pay $170,000 during 1999 and 2000 to settle all
claims. The Company recorded a charge to operating results as a result of the
settlement during the nine months ended September 30, 1999.
F-11
<PAGE>
GOAMERICA, INC.
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997, December 31, 1998 and September 30, 1999
(All information as of September 30, 1999 and for the nine
month periods ended September 30, 1999 and 1998 is unaudited)
At September 30, 1999, the Company has accrued approximately $87,000
representing the difference between the actual rental payments due under the
lease and the rent expense recorded on a straight line basis. This amount is
included in other liabilities.
6. Data Transmission Services, Inc.
In July 1998, the Company acquired certain assets and liabilities of Data
Transmission Services, Inc. ("DTS") for approximately $200,000 which was
allocated to the acquired assets and liabilities based on their respective
estimated fair values.
7. Benefit Plan
The Company has established a defined contribution plan under Section 401(k)
of the Internal Revenue Code which provides for voluntary employee
contributions of up to 15 percent of compensation for employees meeting certain
eligibility requirements. The Company does not contribute to the plan.
8. Series A Redeemable Convertible Preferred Stock
On June 25, 1999, the Company sold 7,500 shares of Series A Redeemable
Convertible Preferred Stock ("Series A Preferred Stock") to various investors
at a purchase price of $1,000 per share, resulting in net proceeds of
approximately $7,335,000. On August 31, 1999, the Company sold an additional
2,500 shares of Series A Preferred Stock to various investors at a purchase
price of $1,000 per share, resulting in net proceeds of approximately
$2,457,000.
Each share of Series A Preferred Stock has a liquidation value of $1,000 per
share and is convertible into shares of common stock at an initial conversion
price of $10.45 per share, subject to adjustments, under certain circumstances.
Potential adjustments to the initial conversion price would result principally
from the issuance or sale of certain equity instruments, as defined, at less
than the initial conversion price per share by the Company prior to the date of
such conversions. In addition, the initial conversion price is subject to
adjustment in the event of a change in control of the Company, as defined. The
Series A Preferred Stock may be converted into common stock at the option of
the Company upon the consummation of an initial public offering of the
Company's common stock with gross proceeds of at least $25 million. To the
extent not previously converted, upon the five year anniversary of the issuance
of the Series A Preferred Stock, a stockholder may request the Company to
redeem any or all shares of Series A Preferred Stock held at their then fair
market value, as defined.
The Series A Preferred Stock pay no dividends; however, such stockholders
are entitled to participate in the event dividends are paid to the holders of
the Company's common stock.
The holders of the Series A Preferred Stock vote together with all other
classes of stock on all actions taken by the stockholders of the Company as a
single class. Each holder of Series A Preferred Stock is entitled to that
number of votes such holder would be entitled to if the holder had converted
the shares of Series A Preferred Stock into shares of common stock.
The holders of the Series A Preferred Stock have registration rights under
agreements dated June 25, 1999 and August 30, 1999 which provide for the
registration of common stock held by such stockholders within the periods
specified by such agreements.
F-12
<PAGE>
GOAMERICA, INC.
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997, December 31, 1998 and September 30, 1999
(All information as of September 30, 1999 and for the nine
month periods ended September 30, 1999 and 1998 is unaudited)
The holders of the Series A Preferred Stock have anti-dilution rights
granted pursuant to agreements dated June 25, 1999 and August 30, 1999 which
allow such stockholders to purchase additional securities of the Company upon
the issuance or sale of certain equity instruments, as defined.
9. Stockholders' Equity
In connection with the sale of certain equity securities, the Company
entered into agreements with such stockholders which provided certain rights,
including the right to purchase additional equity securities to maintain their
respective proportionate ownership in the event of subsequent equity issuances
by the Company and certain registration rights in the event the Company was to
complete a qualified initial public offering, as defined. In connection with
the reorganization described in Note 1 above, the stockholders have agreed to
waive certain of these rights through June 30, 2000.
During 1998, in conjunction with the sale of its common stock, the Company
issued to the purchasers of such common stock warrants to purchase an aggregate
of 111,474 shares of the Company's common stock. Exercise prices under the
warrants range from $9.80 per share to $15.46 per share. The warrants were
exercisable at the date of issue and expire at various dates through January
2003. As of September 30, 1999, all of these warrants remain outstanding.
In connection with certain equity financings during 1998, two of the
Company's principal shareholders issued to an existing investor in the Company,
warrants to purchase 51,020 currently outstanding shares of the Company's
common stock owned by the principal shareholders at an exercise price of $7.35
per share. Such warrants were exercisable at the date of grant and expire on
February 6, 2003.
During May 1999, the Company issued to certain stockholders warrants to
purchase 14,247 shares of the Company's common stock at a price of $.01 per
share. These warrants were issued to settle the Company's obligations based
upon claims by certain stockholders arising from the sale of certain common
stock. Also, in conjunction with this settlement, two of the Company's
principal stockholders issued options to purchase 14,231 currently outstanding
shares of the Company's common stock owned by the principal stockholders at an
exercise price of $.01 per share. As a result of these agreements and the
related warrant issuances by both the Company and the principal stockholders,
the Company recorded a non-cash charge of $297,310 based on the estimated fair
value of the warrants on the date of issuance. The warrants issued by the
principal stockholders have been accounted for as a capital contribution. In
addition, the Company issued to certain stockholders warrants to purchase
54,378 shares of its common stock at a price of $.01 per share. These warrants
were issued to satisfy the Company's obligations under an agreement whereby the
Company was to issue additional shares of its common stock to these investors
based upon the subscriber levels achieved by the Company. Such warrants and
options were exercisable at the date of grant and expire five years from the
date of grant. As of September 30, 1999, 66,600 of these warrants remain
outstanding.
On April 15, 1998, the Company's Board of Directors declared a 2000 for 1
stock split. The common stock numbers and preferred stock conversion ratios
included in the financial statements reflect the stock split, retroactively for
all periods presented.
F-13
<PAGE>
GOAMERICA, INC.
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997, December 31, 1998 and September 30, 1999
(All information as of September 30, 1999 and for the nine
month periods ended September 30, 1999 and 1998 is unaudited)
As of December 31, 1998 and September 30, 1999, the Company had reserved
shares of common stock for issuance as follows:
<TABLE>
<CAPTION>
December 31, September 30,
1998 1999
------------ -------------
<S> <C> <C>
Exercise of common stock options.................. -- 239,500
Exercise of common stock purchase warrants........ 151,474 218,074
Conversion of Series A preferred stock............ -- 956,940
</TABLE>
10. Stock Option Plan and Other Stock-Based Compensation
On August 3, 1999, the Company adopted the GoAmerica Communications Corp.
1999 Stock Option Plan (the "Plan"). The Plan provides for the granting of
awards to purchase shares of common stock. The Plan provides for award grants
in the form of incentive stock options and non-qualified stock options.
Under the terms of the Plan, a committee of the Company's Board of Directors
may grant options to purchase shares of the Company's common stock to employees
and consultants of the Company at such prices as may be determined by the
committee. Options granted under the Plan generally vest annually over 4 years
and expire after 10 years.
On August 3, 1999, the Company granted options to purchase 239,500 shares of
the Company's common stock at a weighted-average exercise price of $7.58. All
such options remain outstanding at September 30, 1999.
The following table summarizes information about fixed price stock options
outstanding at September 30, 1999:
<TABLE>
<CAPTION>
Outstanding Exercisable
--------------------- ------------------------
Weighted-
Average Weighted- Number Weighted-
Range of Number Remaining Average Exercisable at Average
Exercise of Contractual Exercise September 30, Exercise
Prices Shares Life Price 1999 Price
-------- ------- ----------- --------- -------------- ---------
<S> <C> <C> <C> <C> <C>
$2.00 20,000 9.8 years $ 2.00 -- $ --
4.50 110,000 8.9 years 4.50 60,000 4.50
8.50--10.45 79,500 9.8 years 9.14 30,000 8.50
15.31--19.51 30,000 9.8 years 18.46 -- --
</TABLE>
For certain options granted during 1999, the Company has recorded pursuant
to APB No. 25 approximately $928,000 of deferred compensation expense
representing the difference between the exercise price thereof and the market
value of the common stock as of the date of grant. This compensation expense is
amortized over the vesting period of each option granted. Amortization of
deferred compensation under the Plan amounted to approximately $416,000 during
the nine months ended September 30, 1999.
During 1996, the Company granted an employee a warrant to purchase up to
40,000 shares of the Company's common stock at $3.50 per share, an amount in
excess of the estimated fair value at the date of grant. The warrant was
exercisable on the date of grant and expires in October 2008. No compensation
expense would have been recognized had the Company elected to account for such
grant under SFAS No. 123 as the fair value of this warrant at the date of grant
estimated using the minimum value method option pricing model was $0. As of
September 30, 1999, all of these warrants remain outstanding.
F-14
<PAGE>
GOAMERICA, INC.
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997, December 31, 1998 and September 30, 1999
(All information as of September 30, 1999 and for the nine
month periods ended September 30, 1999 and 1998 is unaudited)
The following table discloses, for the nine months ended September 30, 1999,
the number of options granted, the weighted-average fair values and the
weighted-average exercise prices for those options with exercise prices greater
than, equal to or were less than the market price of the common stock on the
date of grant.
<TABLE>
<CAPTION>
Number
of Fair Exercise
Options Value Price
------- ----- --------
<S> <C> <C> <C>
Exercise price greater than market price.............. 30,000 $0.00 $18.46
Exercise price equals market price.................... 26,000 1.73 10.45
Exercise price less than market price................. 183,500 5.94 5.39
</TABLE>
Pro forma information regarding net income and earnings per share is
required by SFAS No. 123, and has been determined as if the Company had been
accounting for its employee stock options under the fair value method of SFAS
No. 123. The fair value for these options was estimated at the date of grant
using the minimum value method option pricing model with the following
assumptions for 1999: weighted-average risk-free interest rate of 6.02%; no
dividends; and a weighted-average expected life of the options of 3 years.
There were no options granted prior to August 1999.
For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting period. The Company's
pro forma information follows:
<TABLE>
<CAPTION>
Nine months ended
September 30, 1999
------------------
<S> <C>
Pro forma net loss applicable to common stockholders.... $(6,298,436)
Pro forma loss per share--basic......................... $ (2.36)
Pro forma loss per share--diluted....................... $ (2.30)
</TABLE>
11. Income Taxes
Significant components of the Company's deferred tax assets and liabilities
at December 31, 1997 and 1998 and September 30, 1999 are as follows:
<TABLE>
<CAPTION>
December 31,
---------------------- September 30,
1997 1998 1999
--------- ----------- -------------
<S> <C> <C> <C>
Deferred tax assets:
Net operating loss carryforward..... $ 505,000 $ 1,542,000 4,029,000
Less valuation allowance............. (505,000) (1,536,000) (4,017,000)
--------- ----------- -----------
Deferred tax asset................... -- 6,000 12,000
Deferred tax liabilities:
Property, equipment and leasehold
improvements....................... 6,000 12,000
--------- ----------- -----------
Net deferred tax asset............... $ -- $ -- $ --
========= =========== ===========
</TABLE>
F-15
<PAGE>
GOAMERICA, INC.
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997, December 31, 1998 and September 30, 1999
(All information as of September 30, 1999 and for the nine
month periods ended September 30, 1999 and 1998 is unaudited)
A reconciliation setting forth the differences between the effective tax
rate of the Company and the U.S. statutory rate is as follows:
<TABLE>
<CAPTION>
December 31, September 30,
------------------------------- ----------------------
1996 1997 1998 1998 1999
-------- --------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C>
Statutory federal income
tax (benefit) at 34%... $(75,000) $(355,000) $ (876,000) $(561,000) $(2,109,000)
State income tax
(benefit), net of
federal benefit........ (13,000) (62,000) (155,000) (99,000) (372,000)
Increase in valuation
allowance.............. 88,000 417,000 1,031,000 660,000 2,481,000
-------- --------- ---------- --------- -----------
Total................... $ -- $ -- $ -- $ -- $ --
======== ========= ========== ========= ===========
</TABLE>
At December 31, 1998, the Company has a federal and state net operating loss
("NOL") carryforward of approximately $4.0 million. The federal NOL
carryforwards expire from 2011 to 2013. The Tax Reform Act of 1986 enacted a
complex set of rules limiting the potential utilization of net operating loss
and tax credit carryforwards in periods following a corporate "ownership
change". In general, for federal income tax purposes, an ownership change is
deemed to occur if the percentage of stock of a loss corporation owned
(actually, constructively and, in some cases, deemed) by one or more "5%
shareholders" has increased by more than 50 percentage points over the lowest
percentage of such stock owned during a three-year testing period. During 1999,
such a change in ownership occurred. As a result of the change, the Company's
ability to utilize certain of its net operating loss carryforwards will be
limited to approximately $1,400,000 of taxable income, per year.
12. Earnings (Loss) Per Share
The Company computes net loss per share under the provisions of SFAS No.
128, "Earnings per Share" (SFAS 128), and SEC Staff Accounting Bulletin No. 98
(SAB 98).
Under the provisions of SFAS 128 and SAB 98, basic and diluted net loss per
share is computed by dividing the net loss available to common stockholders for
the period by the weighted-average number of shares of Common Stock outstanding
during the period. The calculation of diluted net loss per share excludes
potential common shares if the effect is antidilutive. Basic earnings per share
is computed by dividing income or loss applicable to common stockholders by the
weighted-average number of shares of Common Stock outstanding during this
period. Diluted earnings per share is determined in the same manner as basic
earnings per share except that the number of shares is increased assuming
exercise of dilutive stock options and warrants using the treasury stock method
and assuming conversion of the Company's Series A Preferred Stock. In addition,
income or loss is adjusted for dividends and other transactions relating to
preferred shares for which conversion is assumed. The weighted average number
of shares utilized in arriving at diluted earnings per share for all periods
presented reflect an adjustment to include the effect of shares issuable
pursuant to certain warrants for nominal consideration. As the Company had a
net loss, the impact of the assumed exercise of the stock options and warrants,
other than those issued for nominal consideration, and the assumed preferred
stock conversion is anti-dilutive and as such, these amounts have been excluded
from the calculation of diluted earnings per share.
F-16
<PAGE>
GOAMERICA, INC.
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997, December 31, 1998 and September 30, 1999
(All information as of September 30, 1999 and for the nine
month periods ended September 30, 1999 and 1998 is unaudited)
13. Unaudited Pro Forma Financial Information
The unaudited pro forma net loss per share assumes the conversion of the
Series A Preferred Stock to Common Stock, at a conversion price of $10.45, as
if it had been converted as the date of issuance, even though the result is
anti-dilutive. The actual conversion price may be different upon actual
conversion.
The following table presents the calculation of basic and diluted net loss
per share and pro forma net loss per share:
<TABLE>
<CAPTION>
Nine months ended
September 30, 1999 (Unaudited)
--------------------------------------
Denominator
Numerator (Weighted-
(Net Loss) Average Shares) Per Share
----------- --------------- ---------
<S> <C> <C> <C>
Basic net loss per common share..... $(6,212,036) 2,666,288 $(2.33)
Accretion of redemption value of
mandatorily redeemable convertible
preferred stock.................... 10,167 -- --
Assumed conversion of shares of
mandatorily redeemable convertible
preferred stock into shares of
common stock at issuance........... -- 284,803 --
----------- --------- ------
Pro forma basic net loss per common
share.............................. $(6,201,869) 2,951,091 $(2.10)
=========== ========= ======
Diluted net loss per common share... $(6,212,036) 2,734,913 $(2.27)
Accretion of redemption value of
mandatorily redeemable convertible
preferred stock.................... 10,167 -- --
Assumed conversion of shares of
mandatorily redeemable convertible
preferred stock into shares of
common stock at issuance........... -- 284,803 --
----------- --------- ------
Pro forma diluted net loss per
common share....................... $(6,201,869) 3,019,716 $(2.05)
=========== ========= ======
</TABLE>
The unaudited pro forma stockholders' equity presented on the balance sheet,
assumes the conversion of the Series A Preferred Stock outstanding as of
September 30, 1999.
14. Subsequent Events
Sales and Other Issuances of Additional Equity Securities
During November 1999, the Company sold an additional 500 shares of Series A
Preferred Stock to certain stockholders exercising anti-dilution rights granted
to them upon their initial purchase of the Series A Preferred Stock. The
purchase price of such shares was $1,000 per share, resulting in net proceeds
of $500,000.
Subsequent to September 30, 1999, the Company issued an additional 292,345
shares of its common stock to certain existing common stockholders in
connection with the exercise of certain anti-dilution rights granted to them
upon their initial purchase of common stock and the exercise of existing common
stock purchase warrants. The net proceeds to the Company were approximately
$1,955,000.
F-17
<PAGE>
GOAMERICA, INC.
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997, December 31, 1998 and September 30, 1999
(All information as of September 30, 1999 and for the nine
month periods ended September 30, 1999 and 1998 is unaudited)
Corporate Reorganization
On December 31, 1999, the GoAmerica Communications Corp. completed a
corporate reorganization (the "Reorganization"). The Reorganization was
completed such that all of the Series A Preferred Stock and common stock
holders of GoAmerica Communications Corp. stock contributed all of the
outstanding shares of GoAmerica Communications Corp. in exchange for the same
number of shares of similar securities of GoAmerica, Inc.
The certificate of incorporation of GoAmerica, Inc. authorizes a total of
50,010,500 shares consisting of: 45,000,000 shares of common stock; 5,000,000
shares of undesignated preferred stock; and 10,500 shares of Series A Preferred
Stock.
All outstanding options and warrants of GoAmerica Communications Corp. were
exchanged into similar securities of GoAmerica, Inc.
GoAmerica, Inc. 1999 Stock Plan
In December 1999, the Company's Board of Directors adopted the GoAmerica,
Inc. 1999 Stock Plan, as a successor plan to the GoAmerica Communications Corp.
1999 Stock Option Plan, pursuant to which 600,000 additional shares of the
Company's common stock have been reserved for issuance to selected employees,
non-employee directors and consultants. No further option grants will be made
under the GoAmerica Communications Corp. 1999 Stock Option Plan. The GoAmerica,
Inc. 1999 Stock Plan will become effective upon completion of the Company's
initial public offering of its common stock.
Employee Stock Purchase Plan
In December 1999, the Company's Board of Directors adopted the Employee
Stock Purchase Plan to be effective upon completion of the Company's initial
public offering of its common stock. The Company initially reserved 500,000
shares of common stock for issuance under the plan.
Other Matters
In December 1999, the Company Board of Directors authorized the filing of a
registration statement with the Securities and Exchange Commission for an
initial public offering of the Company's common stock.
On December 15, 1999, the Company entered into a facilities maintenance
agreement for a new network operating center. This agreement obligates the
Company to make aggregate payments of approximately $1,607,000 through 2004.
On December 31, 1999, the Company entered into employment agreements with
certain of its key executives which provide for fixed compensation and bonuses
based upon the Company's operating results, as defined. These agreements
generally continue until terminated by the employee or the Company and, under
certain circumstances, provide for salary continuance for a specified period.
The Company's maximum aggregate liability under the agreements, if all
employees were terminated by the Company, is approximately $1,875,000 at the
inception of the agreements.
In January 2000, the Company entered into a definitive stock purchase
agreement to issue and sell 648,057 shares of its newly designated Series B
redeemable convertible preferred stock ("Series B Preferred Stock")
F-18
<PAGE>
GOAMERICA, INC.
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997, December 31, 1998 and September 30, 1999
(All information as of September 30, 1999 and for the nine
month periods ended September 30, 1999 and 1998 is unaudited)
for aggregate net proceeds of approximately $25,190,000. Each share of the
Series B Preferred Stock has a liquidation value of $40.12 per share and is
convertible at any time at the option of the holder into one share of common
stock, subject to adjustments, under certain circumstances. The Series B
Preferred Stock is subject to automatic conversion upon the completion by the
Company of a qualified initial public offering, as defined, of its common
stock. The definition of a qualified initial public offering changes after one
year from the date of sale of the Series B Preferred Stock. To the extent not
converted, commencing August 30, 2004 a holder of Series B Preferred Stock may
require the Company to redeem any or all of the shares of Series B Preferred
Stock held at their then fair market value, as defined. The Series B Preferred
Stock pays no dividends; however, such stockholders are entitled to participate
in the event dividends are paid on the Company's common and preferred stock.
The Series B Preferred Stock has voting and registration rights similar to
those of the Company's Series A Preferred Stock. In connection with the sale of
the Series B Preferred Stock, the Company will pay to its financial advisors
certain cash consideration and issue approximately 28,352 shares of its common
stock.
Based on the definitive agreement to sell shares of the Company's Series B
Preferred Stock the estimated accretion of the outstanding Series A Preferred
Stock will be approximately $2,700,000 for the fourth quarter of 1999.
During December 1999 and January 2000, the Company granted a total of
171,501 additional stock options at exercise prices ranging from $4.50 to
$40.12 per share. In connection with the grants made in December 1999, the
Company will record a non-cash employee compensation of approximately
$2,100,000 of which approximately $67,000 will be incurred in the fourth
quarter of 1999.
F-19
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Prospective investors may rely only on the information contained in this
prospectus. Neither GoAmerica, Inc. nor any underwriter has authorized anyone
to provide prospective investors different or additional information. This
prospectus is not an offer to sell nor is it seeking an offer to buy these se-
curities in any jurisdiction where the offer or sale is not permitted. The in-
formation contained in this prospectus is accurate only as of the date of the
prospectus, regardless of the time of delivery of this prospectus or of any
sale of these securities.
No action is being taken in any jurisdiction outside the United States to
permit a public offering of the common stock or possession or distribution of
this prospectus in any such jurisdiction. Persons who come into possession of
this prospectus in jurisdictions outside the United States are required to in-
form themselves about and to observe the restrictions of that jurisdiction re-
lated to this offering and the distribution of this prospectus.
---------------------
TABLE OF CONTENTS
---------------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary....................................................... 1
Risk Factors............................................................. 8
Use of Proceeds.......................................................... 18
Dividend Policy.......................................................... 18
Capitalization........................................................... 19
Dilution................................................................. 20
Selected Financial Data.................................................. 21
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 24
Business................................................................. 31
Management............................................................... 43
Certain Transactions..................................................... 52
Principal Stockholders................................................... 53
Description of Capital Stock............................................. 55
Shares Eligible for Future Sale.......................................... 59
Certain U.S. Tax Consequences to Non-U.S. Holders........................ 60
Underwriting............................................................. 63
Legal Matters............................................................ 65
Experts.................................................................. 65
Where You Can Find More Information...................................... 65
Index to Financial Statements............................................ F-1
</TABLE>
Until , 2000 (25 days after the date of this prospectus), all dealers
effecting transactions in the common stock, whether or not participating in
this distribution, may be required to deliver a prospectus. This delivery re-
quirement is in addition to the obligation of dealers to deliver a prospectus
when acting as underwriters and with respect to their unsold allotments or
subscriptions.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Shares
[LOGO OF GoAmerica}
Common Stock
---------------
PROSPECTUS
---------------
Bear, Stearns & Co. Inc.
Chase H&Q
U.S. Bancorp Piper Jaffray
SoundView Technology Group
, 2000
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
Item 13. Other Expenses of Issuance and Distribution
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable in connection with the sale and
distribution of the securities being registered. All amounts are estimated
except the Securities and Exchange Commission registration fee and the NASD
filing fee. All the expenses below will be paid by GoAmerica.
<TABLE>
<CAPTION>
Item Amount
---- -------
<S> <C>
Securities and Exchange Commission Registration fee............... $26,400
NASD filing fee................................................... 10,500
Nasdaq National Market listing (entry) fee........................ *
Blue Sky fees and expenses........................................ *
Printing and engraving expenses................................... *
Legal fees and expenses........................................... *
Accounting fees and expenses...................................... *
Transfer Agent and Registrar fees................................. *
Miscellaneous..................................................... *
-------
Total........................................................... $*
=======
</TABLE>
- --------
* To be completed by amendment.
Item 14. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law authorizes a court to
award, or a corporation's board of directors to grant indemnity to directors
and officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities, including reimbursement for expenses
incurred, arising under the Securities Act of 1933, as amended. Our Certificate
of Incorporation provides for indemnification of our directors and officers to
the maximum extent permitted by the Delaware General Corporation Law, and our
bylaws provide for indemnification of our directors, officers, employees and
other agents to the maximum extent permitted by the Delaware General
Corporation Law. In addition, we have entered into indemnification agreements
with our directors and officers containing provisions which are in some
respects broader than the specific indemnification provisions contained in the
Delaware General Corporation Law. The indemnification agreements may require
us, among other things, to indemnify our directors against certain liabilities
that may arise by reason of their status or service as directors and to advance
their expenses incurred as a result of any proceeding against them as to which
they could be indemnified. Reference is also made to Section [ ] of the
underwriting agreement contained in Exhibit 1.1 hereto, indemnifying our
officers and directors against certain liabilities.
Item 15. Recent Sales of Unregistered Securities
GoAmerica Communications Corp. was incorporated in Delaware in 1996. In
December 1999, GoAmerica, Inc. was incorporated in Delaware and each of the
stockholders of GoAmerica Communications Corp. exchanged all their outstanding
shares of common stock and preferred stock of that company for newly issued
shares of GoAmerica, Inc. with equivalent rights and preferences. As a result,
GoAmerica Communications Corp. became a wholly-owned subsidiary of GoAmerica,
Inc. Each outstanding warrant and option to purchase shares of common stock of
GoAmerica Communication Corp. are now convertible into shares of common stock
of GoAmerica, Inc. All the contractual and other rights and obligations
negotiated between the stockholders of GoAmerica Communications Corp. and
GoAmerica Communications Corp. were transferred in their entirety to GoAmerica,
Inc.
II-1
<PAGE>
Prior to this offering, we issued the following securities:
Issuances of Capital Stock by GoAmerica Communications Corp.
Preferred Stock:
. from June 1999 through November 1999, 10,500 shares of Series A Preferred
Stock were issued to various accredited investors for an aggregate
purchase price of $10,500,000
Common Stock:
. in August 1996, an aggregate of 1,600,000 shares of common stock were
issued to the founders of GoAmerica Communications Corp. for an aggregate
purchase price of $800
. in October 1996, an aggregate of 400,000 shares of common stock were
issued to certain accredited investors for an aggregate purchase price of
$1,000,000
. throughout 1997, an aggregate of 51,180 shares of common stock were
issued to certain accredited investors for an aggregate purchase price of
$415,000
. in January 1998 and March 1998, an aggregate of 79,010 shares of common
stock were issued to certain accredited investors for an aggregate
purchase price of $268,513
. in May 1998, an aggregate of 223,387 shares of common stock were issued
to certain accredited investors for an aggregate purchase price of
$1,839,247
. in June 1998, an aggregate of 48,789 shares of common stock were issued
to certain accredited investors for an aggregate purchase price of
$434,466
. in November 1998, an aggregate of 263,606 shares of common stock were
issued to certain accredited investors for an aggregate purchase price of
$2,111,484
. in September 1999, an aggregate of 2,025 shares of common stock were
issued upon the exercise of certain outstanding warrants
. in September and November 1999, an aggregate of 236,452 shares of common
stock were issued in connection with the exercise of certain outstanding
pre-emptive rights for an aggregate purchase price of $2,107,953
. in December 1999, an aggregate of 56,449 shares of common stock were
issued upon the exercise of certain outstanding warrants.
Issuances of Options and Warrants by GoAmerica Communications Corp.
. in August 1999, options to purchase an aggregate of 239,500 shares of
common stock were granted to employees at a weighted average exercise
price of $7.58
. in 1996, warrants to purchase an aggregate of 40,000 shares of common
stock were issued at a weighted average exercise price of $3.50
. in 1998, warrants to purchase an aggregate of 111,474 shares of common
stock were issued at a weighted average exercise price of $12.17
. in 1999, issued warrants to purchase an aggregate of 68,625 shares of
common stock were issued at a weighted average exercise price of $0.01
. in December 1999, options to purchase an aggregate of 65,501 shares of
common stock were granted to employees and directors at a weighted
average exercise price of $8.06
Issuances of Capital Stock of GoAmerica, Inc.
In December 1999, in connection with our reorganization and in
consideration for all the outstanding shares of capital stock and warrants
to purchase shares of GoAmerica Communications Corp. common stock, we
issued the following securities:
. 10,500 shares of our Series A Preferred Stock
. 2,899,549 shares of our common stock
II-2
<PAGE>
. warrants to purchase an aggregate of 218,074 shares of our common stock
. in addition, the outstanding options to purchase 305,001 shares of common
stock of GoAmerica Communications Corp. became exercisable to purchase
305,001 shares of our common stock
. in January 2000, options to purchase 106,000 shares of common stock were
granted to employees at a weighted average exercise price of $40.12
We believe that the foregoing described issuances of securities, if they
constitute sales, are exempt from registration under the Securities Act by
virtue of the exemption provided by Section 4(2) thereof for transactions not
involving a public offering or Rule 701 under the Securities Act as
transactions made pursuant to a written compensatory plan or pursuant to a
written contract relating to compensation. The sales of securities were made
without the use of an underwriter and the certificates evidencing the shares
bear a restrictive legend permitting the transfer thereof only upon
registration of the shares or an exemption under the Securities Act. We believe
that all recipients had adequate access to information about GoAmerica.
Item 16. Exhibits and Financial Statements
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit
No. Description of Exhibit
------- ----------------------
<C> <S>
1.1 Form of Underwriting Agreement.*
3.1 Certificate of Incorporation of GoAmerica.
3.2 Bylaws of GoAmerica.
5.1 Form of Opinion of Buchanan Ingersoll Professional Corporation.*
10.1 CDPD Value Added Reseller Agreement by and between GoAmerica and AT&T
Wireless Data, Inc. dated May 6, 1997 as amended.+
10.2 AirBridge Packet Service Agreement by and between GoAmerica and Bell
Atlantic NYNEX Mobile, Inc. dated May 13, 1997, as amended.+
10.3 Value Added Reseller Agreement by and between GoAmerica and BellSouth
Wireless Data L.P. dated August 31, 1999.+
10.4 Reseller Agreement for Messaging Services by and between GoAmerica and
ARDIS Company dated August 25, 1999.+
10.5 Form of Invention Assignment and Non-Disclosure Agreement by and
between GoAmerica and its employees.
10.6 Form of Indemnification Agreement by and between GoAmerica and each of
its directors and executive officers.
10.7 Employment Agreement by and between GoAmerica and Aaron Dobrinsky
dated as of December 31, 1999.
10.8 Employment Agreement by and between GoAmerica and Joseph Korb dated as
of December 31, 1999.
10.9 Employment Agreement by and between GoAmerica and Francis Elenio dated
as of December 31, 1999.
10.10 Employment Agreement by and between GoAmerica and Jesse Odom dated as
of December 31, 1999.
10.11 GoAmerica Communications Corp. 1999 Stock Option Plan.
10.12 GoAmerica, Inc. 1999 Stock Plan.
10.13 GoAmerica, Inc. Employee Stock Purchase Plan.
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description of Exhibit
------- ----------------------
<C> <S>
10.14 Lease Agreement by and between GoAmerica and Continental Investors,
L.P. dated August 7, 1996, as amended.
10.15 Facilities Maintenance Agreement by and between GoAmerica and Data
General, a division of EMC Corporation, dated December 13, 1999.
10.16 Registration Rights Agreement, dated October 15, 1996, by and between
GoAmerica Communications Corp. and the Investors set forth therein.
10.17 Registration Rights Agreement, dated June 25, 1999, by and between
GoAmerica Communications Corp. and CIBC WMV Inc. and other investors.
21.1 List of subsidiaries of GoAmerica.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Buchanan Ingersoll Professional Corporation (contained in
the opinion filed as Exhibit 5 to the Registration Statement).
24 Powers of Attorney of certain officers and directors of GoAmerica
(contained on the signature page of this Registration Statement).
27 Financial Data Schedule.
</TABLE>
- --------
* To be filed by amendment.
+ Confidential treatment has been requested for a portion of this Exhibit.
(b) Financial Statement Schedules
None.
Item 17. Undertakings
We hereby undertake that:
(1) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted as to directors, officers and controlling
persons of GoAmerica pursuant to the provisions described in Item 14, or
otherwise, we have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by GoAmerica of expenses incurred or paid by a director,
officer or controlling person of GoAmerica in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, we
will, unless in the opinion of our counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
(2) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus as filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by GoAmerica pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(3) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(4) At the closing, specified in the underwriting agreement, we shall
provide the underwriters certificates in such denominations and registered
in such names as required by the underwriters to permit prompt delivery to
each purchaser.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Company has duly caused this Registration Statement on Form S-1 to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Hackensack, State of New Jersey, on the 18th day of January, 2000.
GoAmerica, Inc.
/s/ Aaron Dobrinsky
By: _________________________________
Aaron Dobrinsky
President and Chief Executive
Officer
II-5
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Aaron Dobrinsky and Francis J. Elenio, and each
of them, as his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his name, place and stead,
in any and all capacities, to sign any and all amendments (including post-
effective amendments) to this Registration Statement and to sign any
registration statement for the same offering covered by the Registration
Statement that is to be effective upon filing pursuant to Rule 462 promulgated
under the Securities Act of 1933, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in connection therewith and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, or their or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<C> <S> <C>
/s/ Aaron Dobrinsky President and Chief Executive January 18, 2000
_________________________________ Officer and Director (Principal
Aaron Dobrinsky Executive Officer)
/s/ Joseph Korb Executive Vice President and January 18, 2000
_________________________________ Director
Joseph Korb
/s/ Francis Elenio Chief Financial Officer, January 18, 2000
_________________________________ Treasurer and Secretary
Francis Elenio (Principal Financial and
Accounting Officer)
/s/ Robi Blumenstein Director January 18, 2000
_________________________________
Robi Blumenstein
/s/ Alan Docter Director January 18, 2000
_________________________________
Alan Docter
/s/ Mark Kristoff Director January 18, 2000
_________________________________
Mark Kristoff
/s/ Zachary Prensky Director January 18, 2000
_________________________________
Zachary Prensky
/s/ Andrew Seybold Director January 18, 2000
_________________________________
Andrew Seybold
</TABLE>
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description of Exhibit
------- ----------------------
<C> <S> <C>
1.1 Form of Underwriting Agreement.*
3.1 Certificate of Incorporation of GoAmerica.
3.2 Bylaws of GoAmerica.
5.1 Form of Opinion of Buchanan Ingersoll Professional Corporation.*
10.1 CDPD Value Added Reseller Agreement by and between GoAmerica and
AT&T Wireless Data, Inc. dated May 6, 1997 as amended.+
10.2 AirBridge Packet Service Agreement by and between GoAmerica and
Bell Atlantic NYNEX Mobile, Inc. dated May 13, 1997, as
amended.+
10.3 Value Added Reseller Agreement by and between GoAmerica and
BellSouth Wireless Data L.P. dated August 31, 1999.+
10.4 Reseller Agreement for Messaging Services by and between
GoAmerica and ARDIS Company dated August 25, 1999.+
10.5 Form of Invention Assignment and Non-Disclosure Agreement by and
between GoAmerica and its employees.
10.6 Form of Indemnification Agreement by and between GoAmerica and
each of its directors and executive officers.
10.7 Employment Agreement by and between GoAmerica and Aaron
Dobrinsky dated as of December 31, 1999.
10.8 Employment Agreement by and between GoAmerica and Joseph Korb
dated as of December 31, 1999.
10.9 Employment Agreement by and between GoAmerica and Francis Elenio
dated as of December 31, 1999.
10.10 Employment Agreement by and between GoAmerica and Jesse Odom
dated as of December 31, 1999.
10.11 GoAmerica Communications Corp. 1999 Stock Option Plan.
10.12 GoAmerica, Inc. 1999 Stock Plan.
10.13 GoAmerica, Inc. Employee Stock Purchase Plan.
10.14 Lease Agreement by and between GoAmerica and Continental
Investors, L.P. dated August 7, 1996.
10.15 Facilities Maintenance Agreement by and between GoAmerica and
Data General, a division of EMC Corporation, dated December 13,
1999.
10.16 Registration Rights Agreement, dated October 15, 1996, by and
between GoAmerica Communications Corp. and the Investors set
forth therein.
10.17 Registration Rights Agreement, dated June 25, 1999, by and
between GoAmerica Communications Corp. and CIBC WMV Inc. and
other investors.
21.1 List of subsidiaries of GoAmerica.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Buchanan Ingersoll Professional Corporation
(contained in the opinion filed as Exhibit 5 to the Registration
Statement).
24 Powers of Attorney of certain officers and directors of
GoAmerica (contained on the signature page of this Registration
Statement).
27.1 Financial Data Schedule.
27.2 Financial Data Schedule.
27.3 Financial Data Schedule.
</TABLE>
- --------
* To be filed by amendment. All other exhibits are filed herewith.
+ Confidential treatment has been requested for a portion of this exhibit.
<PAGE>
EXHIBIT 3.1
CERTIFICATE OF INCORPORATION
OF
GOAMERICA, INC.
FIRST: The name of the Corporation is GoAmerica, Inc.
-----
SECOND: The Corporation's registered office in the State of Delaware is
------
located at Corporation Service Corporation, 1013 Centre Road, City of Wilmington
County of New Castle, Delaware 19805. The name of its registered agent at such
address is Corporation Service Corporation.
THIRD: The purpose for which the Corporation is organized is to engage
-----
in any lawful act or activity for which corporations may be organized under the
General Corporation Law of the State of Delaware.
FOURTH: (a) The total number of shares of capital stock which the
------
Corporation shall have the authority to issue is 50,010,500 shares, consisting
of: (i) forty five million (45,000,000) shares of Common Stock, par value $0.01
per share (the "Common Stock"); (ii) five million (5,000,000) shares of
Preferred Stock, par value $0.01 per share (the "Preferred Stock"); and ten
thousand five hundred (10,500) shares of Preferred Stock, par value $0.01 per
share, which shares shall be designated as Series A Preferred Stock (the "Series
A Preferred Stock"), having the terms, powers, preferences and rights as set
forth below, until such time as none of such shares of Series A Preferred Stock
remains outstanding.
(b) The authorized but undesignated Preferred Stock may be issued from
time to time in one or more series. The Board of Directors is authorized,
subject to limitations prescribed by law and the provisions of subsection (a)
above, to provide for the issuance of the shares of Preferred Stock in series,
and by filing a certificate pursuant to the applicable law of the State of
Delaware, to establish from time to time the number of shares to be included in
each such series, and to fix the designation, powers, preferences and rights of
the shares of each such series and the qualification, limitations or
restrictions thereof.
The authority of the Board of Directors with respect to each series shall
include, but not be limited to, determination of the following:
(i) The number of shares constituting that series and the distinctive
designation of that series;
(ii) The dividend rate on the shares of that series, whether dividends
shall be cumulative, and if so, from which date or dates, and the relative
rights of priority, if any, of payment of dividends on shares of that series;
(iii) Whether that series shall have voting rights, in addition to the
voting rights provided by law, and, if so, the terms of such voting rights;
<PAGE>
(iv) Whether that series shall have conversion privileges, and, if so,
the terms and conditions of such conversion, including provision for adjustment
of the conversion rate in such events as the Board of Directors shall determine;
(v) Whether or not the shares of that series shall be redeemable, and,
if so, the terms and conditions of such redemption, including the date or dates
upon or after which they shall be redeemable, and the amount per share payable
in case of redemption, which amount may vary under different conditions and at
different redemption dates;
(vi) The rights of the shares of that series in the event of voluntary or
involuntary liquidation, dissolution or winding up of the Corporation, and the
relative rights of priority, if any, of payment of shares of that series; and
(vii) Any other relative rights, preferences and limitations of that
series.
1. Terms Applicable to Series A Preferred Stock.
--------------------------------------------
Section 1. Dividends.
---------
Holders of Series A Preferred Stock shall not be entitled to
dividends in cash or property except when, as and if declared by the Board of
Directors of the Corporation as a condition to the declaration or payment of a
dividend on any other shares. No cash or property dividend or distributions
shall be declared or paid on any shares of Common Stock or on any other series
of preferred stock ranking junior to or on a parity with the Series A Preferred
Stock with respect to dividends, unless the holders of the Series A Preferred
Stock receive such cash or property dividend or distributions in an amount per
Share of Series A Preferred Stock at least equal to the greater of (i) the
dividends or distributions payable on the number of shares of Common Stock in to
which a Share of Series A Preferred Stock is then convertible or (ii) the
dividends or distributions per share payable to holders of any series of
preferred stock ranking junior to or on a parity with the Series A Preferred
Stock multiplied by a fraction, the numerator of which is the number of shares
of Common Stock into which a Share of Series A Preferred Stock is then
convertible and the denominator of which is the number of shares of Common Stock
into which a share of such series of preferred stock ranking to junior or on a
parity with the Series A Preferred Stock is then convertible; provided that if
--------
such other series of preferred stock is not convertible into Common
Stock, then the numerator of such fraction shall be the liquidation preference
of a Share of the Series A Preferred Stock and the denominator of such fraction
shall be the liquidation preference of a share of such other series of preferred
stock.
1A. Dividends and Distributions in respect of Junior Securities. If at
any time all unpaid dividends have not been paid in full in cash, the
Corporation shall not, for any reason, declare or pay any dividends in respect
to Junior Securities or repurchase, redeem or acquire any Junior Securities, or
otherwise make a distribution or other payment in respect of any Junior
Security, directly or indirectly, in cash, property, assets, rights, securities
or other consideration.
-2-
<PAGE>
Section 2. Liquidation.
-----------
2A. Expect as provided in Section 2B, upon any liquidation,
----------
dissolution or winding up of the Corporation, the holder of Series A Preferred
Stock will be entitled to be paid, before any distribution or payment is made
upon any Junior Securities, an amount in cash equal to the aggregate Liquidation
Value of all Shares outstanding, and the holders of Series A Preferred Stock
will not be entitled to any further payment. If upon any such liquidation,
dissolution or winding up of the Corporation, the Corporation's assets to be
distributed among the holders of the Series A Preferred Stock are insufficient
to permit payment to such holders of the aggregate amount which they are
entitled to be paid, then the entire assets to be distributed will be
distributed ratably among such holders based upon the aggregate Liquidation
Value of the Convertible Preferred Stock held by each such holder. The
Corporation will mail written notice of such liquidation, dissolution or winding
up, not less than 60 days prior to the payment date stated therein, to each
record holder of Series A Preferred Stock.
2B. If, upon any such liquidation, dissolution or winding up
of the Corporation, the Corporation declares or pays a dividend upon the Common
Stock payable in cash or property (a "Liquidating Dividend"), then the
--------------------
Corporation shall pay to the holders of Series A Preferred Stock at the time of
payment thereof the higher of (x) the Liquidation Value in accordance with
Section 2A above or (y) Liquidating Dividends which would have been
- ----------
paid on the shares of Common Stock had such Series A Preferred Stock been
converted immediately prior to the date on which a record is taken for such
Liquidating Dividend, or, if no record is taken, the date as of which the record
holders of Common Stock entitled to such dividends are to be determined.
2C. For purposes hereof, a liquidation or winding up of the
Corporation shall include: (i) the consolidation or merger of the Corporation
into or with any other entity; provided that the Corporation may merge with any
-------------
wholly-owned subsidiary without paying any Liquidation Value to the holders of
the Series A Preferred Stock so long as (a) the Corporation is the surviving
corporation, (b) the terms of the Series A Preferred Stock are not changed and
(c) the Series A Preferred Stock is not exchanged for cash, securities or other
property, or (ii) the sale or transfer by the Corporation of all or
substantially all of its assets to another entity.
2D. Notwithstanding any of the other provisions applicable
to the Series A Preferred Stock set forth herein, no holder of Series A
Preferred Stock shall be entitled to a dividend payment of any kind, whether in
the form of a Liquidating Dividend or otherwise, in connection with the initial
public offering of the Company's Common Stock.
Section 3. Voting Rights. The holders of the Series A Preferred
-------------
Stock shall be entitled to notice of all stockholders' meetings in accordance
with the Corporation's bylaws, and except as otherwise provided herein and as
otherwise required by law, the holders of the Series A Preferred Stock shall be
entitled to vote on all matters submitted to the stockholders for a vote
together with the holders of the Common Stock voting together as a single class;
provided, however, that the affirmative vote of holders of not less than
- -------- -------
fifty-one percent (51%) of Series A Preferred Stock then outstanding shall
be required to (i) amend or repeal any provision of the Corporation's
Certificate of Incorporation or Bylaws if such action would adversely affect the
rights, preferences or privileges of the Series A Preferred Stock, (ii) create
(by classification or otherwise) any new class or series of shares having
rights, preferences or privileges senior to or pari passu with the Series A
Preferred
-3-
<PAGE>
Stock, or (iii) redeem any shares of another series of preferred stock
or common stock (other than pursuant to employee agreements). On any matters on
which the holders of the Series A Preferred Stock shall be entitled to vote
together with the holders of Common Stock, each holder of whole shares of Common
Stock into which such holder's Shares of Series A Preferred Stock are
convertible (as adjusted from time to time pursuant to Section 4 hereof) on the
------- -
record date for such vote.
Section 4. Conversion.
----------
4A. Conversion Procedure.
--------------------
(i) At any time and from time to time, any holder of Convertible
Preferred Stock may convert all or any portion of the Series A Preferred Stock
(including any fraction of a Share) held by such holder into a number of shares
of Common Stock computed by multiplying the number of Shares to be converted by
$1,000 and dividing the result by the Conversion Price then in effect.
(ii) Concurrently with the completion of a Qualified IPO or
immediately following a Market Float Trigger, the Corporation may convert all or
any portion of the Series A Preferred Stock (including any fraction of a Share)
into a number of shares of Common Stock computed by multiplying the number of
Shares to be converted by $1,000 and dividing the result by the Conversion Price
then in effect.
(iii) Each conversion of Series A Preferred Stock shall be deemed to
have been effected as of the close of business on the date on which the
certificate or certificates representing the Series A Preferred Stock to be
converted have been duly endorsed and surrendered at a principal office of the
Corporation (a "Conversion Date") along with written notice to the Corporation
---------------
that such holder elects to convert such Shares and stating the
number of Shares being converted and setting forth the names in which such
holder wishes the certificates for shares of Common Stock to be issued if such
names shall be different than that of such holder. At such time as such
conversion has been effected, then the rights of the holder of such surrendered
Series A Preferred Stock shall cease and the Person or Persons in whose name or
names any certificate or certificates for shares of Common Stock are to be
issued upon such conversion shall be deemed to have become the holder or holders
of record of shares of Common Stock represented thereby.
(iv) Notwithstanding any other provision hereof, if a conversion
of Series A Preferred Stock is to be made in connection with a Public Offering,
the conversion of any Shares of Series A Preferred Stock may, at the election of
the holder of such Shares, be conditioned upon the consummation of the Public
Offering in which case such conversion shall not be deemed to be effective until
the consummation of the Public Offering.
(v) As soon as possible after a conversion has been effected (but
in any event within five business days in the case of subparagraph (a) below),
the Corporation shall deliver to the converting holder:
(a) a certificate or certificates representing the number
of shares of Common Stock issuable by reason of such conversion in
such name or names and such denomination or denominations as the
converting holder has specified;
-4-
<PAGE>
(b) the amount payable under subparagraph (viii) below with
respect to such conversion; and
(c) a certificate representing any Shares of Series A
Preferred Stock which were represented by the certificate or
certificates delivered to the Corporation in connection with such
conversion but which were not converted.
(vi) The issuance of certificates for shares of Common Stock upon
conversion of Series A Preferred Stock shall be made without charge to the
holders of such Series A Preferred Stock for any issuance tax in respect thereof
or other cost incurred by the Corporation in connection with such conversion and
the related issuance of shares of Common Stock. Upon conversion of each Share
of Series A Preferred Stock, the Corporation shall take all such actions as are
necessary in order to insure that the Common Stock issuable with respect to such
conversion shall be validly issued, fully paid and nonassessable.
(vii) The Corporation shall not close its books against the transfer
of Series A Preferred Stock or of Common Stock issued or issuable upon
conversion of Series A Preferred Stock in any manner which interferes with the
timely conversion of Series A Preferred Stock. The Corporation shall cooperate
with any holder of Shares required to make any governmental filings or obtain
any governmental approval prior to or in connection with any conversion of
Shares hereunder (including, without limitation, making any filings required to
be made by the Corporation).
(viii) If any fractional interest in a share of Common Stock would,
except for the provisions of this subparagraph, be deliverable upon any
conversion of the Series A Preferred Stock, the Corporation, in lieu of
delivering the fractional share therefor, shall pay an amount to the holder
thereof equal to the fair market value, as determined by the board of directors
in good faith.
(ix) The Corporation shall at all times reserve and keep available
out of its authorized but unissued shares of Common Stock, solely for the
purpose of issuance upon the conversion of the Series A Preferred Stock, such
number of shares of Common Stock issuable upon the conversion of all outstanding
Series A Preferred Stock. All shares of Common Stock which are so issuable
shall, when issued, be duly and validly issued, fully paid and nonassessable and
free from all taxes, liens and charges. The Corporation shall take all such
actions as may be necessary to assure that all such shares of Common Stock may
be so issued without violation of any applicable law or governmental regulation
or any requirements of any domestic securities exchange upon which shares of
Common Stock may be listed (except for official notice of issuance which shall
be immediately delivered by the Corporation upon each such issuance).
4B. Conversion Price.
----------------
The initial Conversion Price shall be $10.45. The Conversion Price
shall be subject to adjustment from time to time pursuant to this Section 4.
---------
4C. Adjustment to Conversion Price. The Conversion Price will be
------------------------------
adjusted as follows:
(i) If the per share price to the public of the Corporation's
Initial Public Offering is less than two and one-half times the then applicable
Conversion Price of the Preferred Stock, the Conversion Price will be adjusted
to an amount equal to 40% of the per share price of the Corporation's Initial
Public Offering.
(ii) If, prior to a Qualified IPO, the Corporation undergoes a
Fundamental Change which yields an amount which is less per Common Share than
two times the applicable
-5-
<PAGE>
Conversion Price at the time of Fundamental Change, the Conversion Price will be
adjusted to 50% of the price per share of the Fundamental Change.
(iii) If, prior to a Qualified IPO, the Corporation issues
Common Stock, warrants, options or similar securities at a price below the then
applicable Conversion Price (other than Securities issued to employees or
consultants as incentive compensation whether through a Corporation stock option
plan or otherwise), the Conversion Price will be adjusted to the issuing price
of such Common Stock and in the case of warrants, options or similar securities
(other than warrants, options or similar securities issued prior to the date
hereof), the Conversion Price will be adjusted to the sum of the issuing price
of such warrants, options, or new securities plus the additional consideration
payable to the Corporation upon exercise of such warrants, options or similar
securities; provided, that upon expiration of any such options or termination
any right to either exercise the warrants or convert similar securities, the
Conversion Price then in effect hereunder shall forthwith be increased to the
Conversion Price which would have been in effect at the time of such expiration
or termination had such option, warrant or similar security, to the extent
outstanding immediately prior to such expiration or termination, never been
issued. If the Corporation shall declare a dividend or make any other
distribution upon any stock of the Corporation payable in warrants, options or
similar securities, any warrants, options or similar securities, as the case may
be, issuable in payment of such dividend or distribution shall be deemed to have
been issued or sold without consideration to the extent no consideration is
required to be paid upon the exercise of such options or the exercise of such
warrants or similar securities.
(iv) If the Corporation at any time subdivides (by any stock
split, stock dividend, recapitalization or otherwise) one or more classes of its
outstanding shares of Common Stock into a greater number of shares, the
Conversion Price in effect immediately prior to such subdivision shall be
proportionately reduced, and if the Corporation at any time combines (by reverse
stock split or otherwise) one or more classes of is outstanding shares of Common
Stock into a smaller number of shares, the Conversion Price in effect
immediately prior to such combination shall be proportionately increased.
4D. Selection of Independent Appraiser.
----------------------------------
If the Fair Market Value of the Series A Preferred Stock is to be
determined by an Independent Appraiser, the directors other than those appointed
by the holders of the Series A Preferred Stock, and the holders of a majority of
the Series A Preferred Stock, each shall select an Independent Appraiser to make
the determination. If the determinations of Fair Market Value reached by both
Independent Appraisers vary by less than 20% of the higher determination, Fair
Market Value shall be the average of the two determinations. If the
determinations of Fair Market Value reached by both Independent Appraisers vary
by greater than 20% of the higher determination, Fair Market Value shall be
determined by a third Independent Appraiser selected jointly by the directors
other than those appointed by the holders of the Series A Preferred Stock and
the holders of a majority of the Series A Preferred Stock and the determination
of such Independent Appraiser shall be final and binding upon the parties, and
the Corporation and the holders of the Series A Preferred Stock shall pay the
fees and expenses of all such appraisers, payable one-half by the Corporation
and one-half by the holders of the Series A Preferred Stock on a pro rata basis;
provided that the Fair Market Value determined by the third Independent
- -------- ----
Appraiser is between the determination of Fair Market Value by the two other
Independent Appraisers selected and if such Fair Market Value is not between the
determination of Fair Market Value by the two other Independent Appraisers
selected, the Fair Market Value shall be such value
-6-
<PAGE>
determined by the originally selected Independent Appraiser which is nearest to
the determination may be the third Independent Appraiser.
4E. Notices.
-------
(i) Immediately upon any adjustment of the Conversion Price,
the Corporation shall give written notice thereof to all holders of Series A
Preferred Stock, setting forth in reasonable detail and certifying the
calculation of such adjustment.
(ii) The Corporation shall give written notice to all holders of
Series A Preferred Stock at least 10 days prior to the date on which the
Corporation closes its books or takes a record (a) with respect to any dividend
or distribution upon Common Stock, (b) with respect to any pro rata subscription
offer to holders of Common Stock or (c) for determining rights to vote with
respect to any Fundamental Change, dissolution or liquidation.
(iii) The Corporation shall also give written notice to the holders of
Series A Preferred Stock at least 10 days prior to the date on which any
Fundamental Change shall take place.
Section 5. Purchase Rights. If at any time the Corporation grants,
---------------
issues or sells any Options, Convertible Securities or rights to purchase stock,
warrants, securities or other property pro rata to the record holders of any
class of Common Stock (the "Purchase Rights"), then each holder of Series A
---------------
Preferred Stock shall be entitled to acquire, upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which such holder could have
acquired if such holder had held the number of shares of Common Stock acquirable
upon conversion of such holder's Series A Preferred Stock immediately before the
date on which a record is taken for the grant, issuance or sale of such Purchase
Rights, or, if no such record is taken, the date as of which the record holders
of Common Stock are to be determined for the grant, issue or sale of such
Purchase Rights.
Section 6. No Reissuance of Preferred. No shares of Preferred
--------------------------
acquired by this Corporation by reason of redemption, purchase, conversion or
otherwise shall be reissued.
2. Miscellaneous.
-------------
Section A. Registration of Transfer.
------------------------
The Corporation will keep at its principal office a register for the
registration of Series A Preferred Stock. Upon the surrender of any certificate
representing Series A Preferred Stock at such place, the Corporation will, at
the request of the record holder of such certificate, execute and deliver (at
the Corporation's expense) a new certificate or certificates in exchange
therefor representing in the aggregate the number of Shares represented by the
surrendered certificate. Each such new certificate will be registered in such
name and will represent such number of Shares as is requested by the holder of
the surrendered certificate and will be substantially identical in form to the
surrendered certificate.
Section B. Replacement.
-----------
Upon receipt of evidence reasonably satisfactory to the Corporation
(an affidavit of the registered holder will be satisfactory) of the ownership
and the loss, theft, destruction or
-7-
<PAGE>
mutilation of any certificate evidencing Shares of any class of Series A
Preferred Stock, and in the case of any such loss, theft or destruction, upon
receipt of indemnity reasonably satisfactory to the Corporation (provided that
if the holder is an institutional investor its own agreement will be
satisfactory), or, in the case of any such mutilation upon surrender of such
certificate, the Corporation will (at its expense) execute and deliver in lieu
of such certificate a new certificate of like kind representing the number of
Shares of such class represented by such lost, stolen, destroyed or mutilated
certificate and dated the date of such lost, stolen, destroyed or mutilated
certificate, and dividends will accrue on the Series A Preferred Stock
represented by such new certificate from the date to which dividends have been
fully paid on such lost, stolen, destroyed or mutilated certificate.
Section C. Definitions.
-----------
"Business Day" means a day, other than a Saturday or Sunday, on which the
------------
principal commercial banks located in New York are open for business during
normal banking hours.
"Common Stock" means the Corporation's Common Stock, par value $0.01 per
------------
share.
"Corporation" means GoAmerica, Inc., a Delaware corporation.
-----------
"Series A Preferred Stock" means the Corporation's Series A Preferred
------------------------
Stock, par value $0.01 per share.
"Fair Market Value" means, with respect to a Share, on any Business Day:
-----------------
(a) if the Common Stock is publicly traded at the time of
determination, the value determined by multiplying the number shares of
Common Stock into which all Shares are then convertible in accordance with
Section 4 by the average of the closing prices for the Common Stock on
---------
all domestic securities exchanges on which such security may at the time be
listed, or, if there have been no sales on any such exchange on such day,
the average of the highest bid and lowest asked prices on all such
exchanges at the end of such day, or, if on any day such security is not so
listed, the average of the representative bid and asked prices quoted on
the NASDAQ system as of the close of trading on such day, or if on any day
such security is not quoted in the NASDAQ system, the average of the
highest bid and lowest asked prices on such day in the domestic over-the-
counter market as reported by the National Quotation Bureau, Incorporated,
or any similar successor organization, in each such case averaged over a
period of twenty (20) days consisting of the day as of which "Fair Market
Value" is being determined and the nineteen (19) consecutive Business Days
prior to such day;
(b) if the Common Stock is being registered pursuant to an initial
Public Offering, for purposes of determining the adjustment to Conversion
Price in accordance with Section 4C in connection with such Liquidity Event
----------
and for disclosure purposes for the registration statement relating to such
Public Offering, Fair Market Value of the Series A Preferred Stock will be
determined by reference to the midpoint of the range of the initial Public
Offering price to the public as reflected on the applicable registration
statement; provided that such adjustment to Conversion Price will be
--------
further adjusted in
-8-
<PAGE>
accordance with Section 4C to reflect the Fair Market Value by reference to
----------
the initial Public Offering price on the day that the applicable
registration statement is declared effective by the Securities and Exchange
Commission; or
(c) if the Common Stock is not Publicly Traded at the time of
determination, the Fair Market Value of the Series A Preferred Stock will
be the fair value of the Series A Preferred Stock as determined jointly by
the directors other than those appointed by the holders of the Series A
Preferred Stock, taking into account their fiduciary duties, and the
holders of a majority of the Series A Preferred Stock. If such parties are
unable to reach an agreement within a reasonable period of time, such Fair
Market Value shall be determined by an Independent Appraiser chosen
pursuant to Section 4D.
----------
Any such determination made by an Independent Appraiser shall be made in
accordance with the procedures set forth in Section 4D.
----------
"Fundamental Change" means (a) a sale or transfer of more than 50% of the
------------------
assets of the Corporation on a consolidated basis in any transactions or series
of related transactions (other than in the ordinary course of business), or (b)
a sale or transfer of more than 50% of the capital stock of the Corporation on a
consolidated basis in any transactions or series of related transactions, and
(c) any merger or consolidation to which the Corporation is a party, except for
a merger in which the Corporation is the surviving entity and, after giving
effect to such merger, the holders of the Corporation's outstanding capital
stock (on a fully diluted basis) immediately prior to the merger will own the
Corporation's outstanding capital stock (on a fully diluted basis) having a
majority of the ordinary voting power to elect the Corporation's board of
directors.
"Independent Appraiser" shall mean an independent appraiser experienced in
---------------------
valuing securities selected by the Corporation and the holders of a majority of
the Series A Preferred Stock in accordance with Section 4D.
----------
"Junior Securities" means any of the Corporation's or any Subsidiaries'
-----------------
equity securities, including any warrants, options or right to acquire any such
equity security, other than the Series A Preferred Stock.
"Liquidation Value" of any Share as of any particular date will be $1,000.
-----------------
"Liquidity Event" means (a) a Public Offering; (b) the closing of any
---------------
merger, combination, consolidation or similar business transaction involving the
Corporation in which the holders of Common Stock immediately prior to such
closing are not the holders of a majority of the ordinary voting securities of
the surviving person in such transaction immediately after such closing (a
"Business Combination"); (c) the closing of any sale or transfer by the
--------------------
Corporation of all or substantially all of its assets to an acquiring person in
which the holders of Common Stock immediately prior to such closing are not the
holders of a majority of the ordinary voting securities of the acquiring person
immediately after such closing (an "Asset Sale"); or (d) the closing of any sale
----------
by the holders of Common Stock of an amount of Common Stock that equals or
exceeds a majority of the shares of Common Stock immediately prior to such
closing to a person in which the holders of the Common Stock immediately prior
to such
-9-
<PAGE>
closing are not the holders of a majority of the ordinary voting securities of
such person immediately after such closing (a "Stock Sale").
----------
"Market Float Trigger" means, following an initial Public Offering of the
--------------------
Corporation's common shares, the aggregate Fair Market Value of the Common Stock
held by the public exceeding $25,000,000, based on the average of the closing
prices for the Common Stock on all domestic securities exchanges on which such
security may at the time be listed, or, if there have been no sales on any such
exchange on such day, the average of the highest bid and the lowest asked prices
on all such exchanges at the end of such day, or, if on any day such security is
not so listed, the average of the representative bid and asked prices quoted on
the NASDAQ system as of the close of trading on such day, or if on any day such
security is not quoted in the NASDAQ system, the average of the highest bid and
lowest asked prices on such day in the domestic over-the-counter market as
reported by the National Quotation Bureau, Incorporated, or any similar
successor organization, in each such case averaged over a period of twenty (20)
days consisting of the day as of which "Market Float Trigger" is being
determined and the nineteen (19) consecutive Business Days prior to such day.
"NASDAQ" shall mean the NASDAQ National Market or the NASDAQ Smallcap
------
Market.
"Person" means an individual, a partnership, a corporation, an
------
association, a joint stock Corporation, a trust, a joint venture, an
unincorporated organization and a governmental entity or any department, agency
or political subdivision thereof.
"Public Offering" means any offering by the Corporation of its equity
---------------
securities to the public pursuant to an effective registration statement under
the Securities Act of 1933, as then in effect, or any comparable statement under
any similar federal statute then in force (other than a registration statement
on Forms S-4 or S-8, or any successor form thereto).
"Qualified IPO" means a firm commitment, underwritten Public Offering
-------------
pursuant to an effective registration statement under the Securities Act of the
Corporation's common shares to the public resulting in aggregate gross proceeds
of not less than $25,000,000 and a market valuation of the Common Stock of at
least $125,000,000.
"Share" means a share of Series A Preferred Stock.
-----
Section D. Amendment and Waiver.
--------------------
No amendment, modification or waiver will be binding or effective with
respect to any provision of subdivision I or II without the prior written
consent of the holders of at least 67% of the Series A Preferred Stock
outstanding at the time such action is taken; and provided that no such change
in the terms hereof may be accomplished by merger or consolidation of the
Corporation with another corporation unless the Corporation has obtained the
prior written consent of the holders of the applicable percentage of the Series
A Preferred Stock.
-10-
<PAGE>
Section E. Limitations. So long as any Shares of the Series A Preferred
-----------
Stock are outstanding, the Corporation shall not, without the affirmative vote
or the written consent of the holders of at least 51% of the Series A Preferred
Stock:
(a) create, authorize or issue any class or series of stock ranking
either as to payment of dividends or distribution of assets prior to or on
parity with the Series A Preferred Stock; or
(b) change the preferences, rights or powers with respect to the
Series A Preferred Stock so as to affect such stock adversely.
Section F. Notices.
-------
Except as otherwise expressly provided, all notices referred to herein will
be in writing and will be delivered by registered or certified mail, return
receipt requested, postage prepaid and will be deemed to have been given when so
mailed (i) to the Corporation, at its principal executive offices and (ii) to
any stockholder, at such holder's address as it appears in the stock records of
the Corporation (unless otherwise indicated by any such holder).
Section G. Effective Date. The effective date of this Certificate shall
--------------
be the date of filing with the Secretary of the State of Delaware.
FIFTH: Upon the consummation of an initial Public Offering, the initial
-----
Directors and the Directors thereafter elected by the holders of voting stock
shall, in accordance with the Corporation's By-laws, be classified in respect to
the time for which they shall severally serve on the Board of Directors by
dividing them into three staggered classes which shall be as nearly equal in
number as possible. Each member of each class shall serve for three-year terms.
At each annual meeting of the stockholders, the stockholders shall elect
Directors of the class which term then expires, to serve until the third
succeeding annual meeting. Except as otherwise provided in this Certificate of
Incorporation, each Director shall serve for the term for which elected and
until his or her successor shall be duly elected and shall qualify.
SIXTH: The name and mailing address of the sole incorporator is Francis J.
-----
Elenio c/o GoAmerica, Inc. 401 Hackensack Avenue, Hackensack, N.J. 07601.
SEVENTH: The Corporation is to have perpetual existence.
-------
EIGHTH: The following provisions are included for the management of the
------
business and the conduct of the affairs of the Corporation, and for further
definition, limitation and regulation of the powers of the Corporation and of
its Board of Directors and stockholders:
(i) The Board of Directors of the Corporation is expressly
authorized to adopt, amend or repeal the Bylaws of the
Corporation, subject to any limitation thereof contained in
the Bylaws. The stockholders also shall have the power to
adopt, amend or repeal the Bylaws of the Corporation;
provided, however, that, in addition to any vote of the
------- -------
holders of any class or series of stock of the Corporation
required by law or by this Certificate of Incorporation, the
affirmative
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<PAGE>
vote of the holders of at least eighty percent (80%) of the
voting power of all of the then outstanding shares of the
capital stock of the Corporation entitled to vote generally
in the election of directors, voting together as a single
class, shall be required to adopt, amend or repeal any
provision of the Bylaws of the Corporation.
(ii) Upon the consummation of an initial Public Offering of
securities of the Corporation under the Securities Act,
stockholders of the Corporation may not take any action by
written consent in lieu of a meeting.
(iii) Special meetings of stockholders may be called at any
time only by the President, the Chairman of the Board of
Directors of the Corporation (if any) or a majority of the
Board of Directors of the Corporation. Business transacted
at any special meeting of stockholders shall be limited to
matters relating to the purpose or purposes set forth in the
notice of such special meeting.
(iv) The Board of Directors of the Corporation, when
evaluating any offer of another party (a) to make a tender
or exchange offer for any equity security of the Corporation
or (b) to effect a business combination, shall, in
connection with the exercise of its judgment in determining
what is in the best interests of the Corporation as a whole,
be authorized to give due consideration to any such factors
as the Board of Directors of the Corporation determines to
be relevant, including, without limitation:
(1) the interests of the Corporation's stockholders,
including the possibility that these interests might
be best served by the continued independence of the
Corporation;
(2) whether the proposed transaction might violate
federal or state laws;
(3) not only the consideration being offered in the
proposed transaction, in relation to the then current
market price for the outstanding capital stock of the
Corporation, but also to the market price for the
capital stock of the Corporation over a period of
years, the estimated price that might be achieved in a
negotiated sale of the Corporation as a whole or in
part or through orderly liquidation, the premiums over
market price for the securities of other corporations
in similar transactions, current political, economic
and other factors bearing on securities prices and the
Corporation's financial condition and future
prospects; and
(4) the social, legal and economic effects upon
employees, suppliers, customers, creditors and others
having similar relationships with the Corporation,
upon the communities in which the Corporation conducts
its business and upon the economy of the state, region
and nation.
In connection with any such evaluation, the Board of
Directors of the Corporation is authorized to conduct such
investigations and engage in such legal proceedings as the
Board of Directors of the Corporation may determine.
-12-
<PAGE>
(v) in addition to any vote of the holders of any class or
series of stock of the Corporation required by law or by
this Certificate of Incorporation, the affirmative vote of
the holders of at least eighty percent (80%) of the voting
power of all of the then outstanding shares of the capital
stock of the Corporation entitled to vote generally in the
election of directors, voting together as a single class,
shall be required to amend any provision of Articles EIGHTH
or NINTH of this Certificate of Incorporation.
NINTH: A director of the Corporation shall not be personally liable either
-----
to the Corporation or to any stockholder for monetary damages for breach of
fiduciary duty as a director, except (i) for any breach of the director's duty
of loyalty to the Corporation or its stockholders, or (ii) for acts or omissions
which are not in good faith or which involve intentional misconduct or knowing
violation of the law, or (iii) for any matter in respect of which such director
shall be liable under Section 174 of Title 8 of the General Corporation Law of
the State of Delaware or any amendment thereto or successor provision thereto,
or (iv) for any transaction from which the director shall have derived an
improper personal benefit. Neither amendment nor repeal of this paragraph nor
the adoption of any provision of the Certificate of Incorporation inconsistent
with this paragraph shall eliminate or reduce the effect of this paragraph in
respect of any matter occurring, or any cause of action, suit or claim that, but
for this paragraph of this Article, would accrue or arise, prior to such
amendment, repeal or adoption of an inconsistent provision.
TENTH: Election of directors need not be by written ballot.
-----
*********
-13-
<PAGE>
IN WITNESS WHEREOF, the undersigned, being the sole incorporator
hereinabove named, does hereby execute this Certificate of Incorporation this
1st day of December, 1999.
By: /s/ Francis J. Elenio
----------------------
Francis J. Elenio
Sole Incorporator
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<PAGE>
EXHIBIT 3.2
BY-LAWS
OF
GOAMERICA, INC.
(a Delaware corporation)
ARTICLE I
Stockholders
------------
SECTION 1. Annual Meetings. The annual meeting of stockholders for
---------------
the election of directors and for the transaction of such other business as may
properly come before the meeting shall be held each year at such date and time,
within or without the State of Delaware, as the Board of Directors shall
determine.
SECTION 2. Special Meetings. (a) Special meetings of stockholders
----------------
for the transaction of such business as may properly come before the meeting may
be called by order of the Board of Directors or by stockholders holding together
at least a majority of all the shares of the Corporation entitled to vote at the
meeting.
(b) Notwithstanding the provisions of Section 2(a), immediately
following the consummation of a public offering by the Corporation of any of its
capital stock, special meetings of stockholders may be called only by the
President, the Chairman of the Board of Directors (if any) or by order of a
majority of the Board of Directors.
(c) Any such meeting held pursuant to this Section 2 shall be held at
such date and time, within or without the State of Delaware, as may be specified
by such order. Whenever the directors shall fail to fix such place, the meeting
shall be held at the principal executive office of the Corporation.
SECTION 3. Notice of Meetings. Written notice of all meetings of the
------------------
stockholders, stating the place, date and hour of the meeting and the place
within the city or other municipality or community at which the list of
stockholders may be examined, shall be mailed or delivered to each stockholder
not less than 10 nor more than 60 days prior to the meeting. Notice of any
special meeting shall state in general terms the purpose or purposes for which
the meeting is to be held and the business transacted at any such meeting shall
be limited to matters relating to the purpose or purposes set forth in the
notice of meeting.
SECTION 4. Fixing Date for Determination of Stockholders of Record.
-------------------------------------------------------
In order that the Corporation may determine the stockholders entitled to notice
of or to vote at any meeting of stockholders or any adjournment thereof, or to
express consent to corporate action in writing without a meeting, or entitled to
receive payment of any dividend or other distribution or
<PAGE>
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock or for the purpose of any other lawful
action, the Board of Directors may fix a record date, which record date shall
not precede the date upon which the resolution fixing the record date is adopted
by the Board of Directors and which record date: (1) in the case of
determination of stockholders entitled to vote at any meeting of stockholders or
adjournment thereof, shall, unless otherwise required by law, not be more than
sixty nor less than ten days before the date of such meeting; (2) in the case of
determination of stockholders entitled to express consent to corporate action in
writing without a meeting, shall not be more than ten days after the date upon
which the resolution fixing the record date is adopted by the Board of
Directors; and (3) in the case of any other action, shall not be more than sixty
days prior to such other action. If no record date is fixed: (1) the record date
for determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next preceding the day
on which notice is given, or, if notice is waived, at the close of business on
the day next preceding the day on which the meeting is held; (2) the record date
for determining stockholders entitled to express consent to corporate action in
writing without a meeting, when no prior action of the Board of Directors is
required by law, shall be the first date on which a signed written consent
setting forth the action taken or proposed to be taken is delivered to the
corporation in accordance with applicable law, or, if prior action by the Board
of Directors is required by law, shall be at the close of business on the day on
which the Board of Directors adopts the resolution taking such prior action; and
(3) the record date for determining stockholders for any other purpose shall be
at the close of business on the day on which the Board of Directors adopts the
resolution relating thereto. A determination of stockholders of record entitled
to notice of or to vote at a meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the Board of Directors may
fix a new record date for the adjourned meeting.
SECTION 5. Stockholder Lists. The officer who has charge of the
-----------------
stock ledger of the Corporation shall prepare and make, at least 10 days before
every meeting of stockholders, a complete list of the stockholders entitled to
vote at the meeting, arranged in alphabetical order, and showing the address of
each stockholder and the number of shares registered in the name of each
stockholder. Such list shall be open to the examination of any stockholder, for
any purpose germane to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present.
The stock ledger shall be the only evidence as to who are the
stockholders entitled to examine the stock ledger, the list required by this
section or the books of the Corporation, or to vote in person or by proxy at any
meeting of stockholders.
SECTION 6. Quorum. Except as otherwise provided by law or the
------
Corporation's Certificate of Incorporation, a quorum for the transaction of
business at any meeting of stockholders shall consist of the holders of record
of a majority of the issued and outstanding shares of the capital stock of the
Corporation entitled to vote at the meeting, present in person or by proxy. At
all meetings of the stockholders at which a quorum is present, all matters,
except as otherwise provided by law or the Certificate of Incorporation, shall
be decided by the vote of the
2
<PAGE>
holders of a majority of the shares entitled to vote thereat present in person
or by proxy. If there be no such quorum, the holders of a majority of such
shares so present or represented may adjourn the meeting from time to time,
without further notice, until a quorum shall have been obtained. When a quorum
is once present it is not broken by the subsequent withdrawal of any
stockholder.
SECTION 7. Organization. Meetings of stockholders shall be presided
------------
over by the Chairman, if any, or if none or in the Chairman's absence the Vice-
Chairman, if any, or if none or in the Vice-Chairman's absence the President, if
any, or if none or in the President's absence a Vice-President, or, if none of
the foregoing is present, by a chairman to be chosen by the stockholders
entitled to vote who are present in person or by proxy at the meeting. The
Secretary of the Corporation, or in the Secretary's absence an Assistant
Secretary, shall act as secretary of every meeting, but if neither the Secretary
nor an Assistant Secretary is present, the presiding officer of the meeting
shall appoint any person present to act as secretary of the meeting.
SECTION 8. Voting; Proxies; Required Vote. (a) At each meeting of
------------------------------
stockholders, every stockholder shall be entitled to vote in person or by proxy
appointed by instrument in writing, subscribed by such stockholder or by such
stockholder's duly authorized attorney-in-fact (but no such proxy shall be voted
or acted upon after three years from its date, unless the proxy provides for a
longer period), and, unless the Certificate of Incorporation provides otherwise,
shall have one vote for each share of stock entitled to vote registered in the
name of such stockholder on the books of the Corporation on the applicable
record date fixed pursuant to these By-laws. At all elections of directors the
voting may but need not be by ballot and a plurality of the votes cast there
shall elect. Except as otherwise required by law or the Certificate of
Incorporation, any other action shall be authorized by a majority of the votes
cast.
(b) Any action required or permitted to be taken at any meeting of
stockholders may, except as otherwise required by law or the Certificate of
Incorporation, be taken without a meeting, without prior notice and without a
vote, if a consent in writing, setting forth the action so taken, shall be
signed by the holders of record of the issued and outstanding capital stock of
the Corporation having a majority of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voted, and the writing or writings are filed with the permanent
records of the Corporation. Prompt notice of the taking of corporate action
without a meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing. Notwithstanding the provisions
of this Section 8(b), immediately following the consummation of a public
offering by the Corporation of any of its capital stock, stockholders of the
Corporation may not take any action by written consent in lieu of a meeting.
Notwithstanding any other provision of law, the Certificate of Incorporation or
these By-laws, and notwithstanding the fact that a lesser percentage may be
specified by law, the affirmative vote of the holders of at least eighty percent
(80%) of the voting power of all the then outstanding shares of the capital
stock of the Corporation entitled to vote generally in the election of
directors, voting together as a single class, shall be required to amend or
repeal, or to adopt any provision inconsistent with, this Section 8(b).
3
<PAGE>
(c) Where a separate vote by a class or classes, present in person or
represented by proxy, shall constitute a quorum entitled to vote on that matter,
the affirmative vote of the majority of shares of such class or classes present
in person or represented by proxy at the meeting shall be the act of such class,
unless otherwise provided in the Corporation's Certificate of Incorporation.
SECTION 9. Inspectors. Unless otherwise required by law, the Board
----------
of Directors, in advance of any meeting, may, but need not, appoint one or more
inspectors of election to act at the meeting or any adjournment thereof. If an
inspector or inspectors are not so appointed, the person presiding at the
meeting may, but need not, appoint one or more inspectors. In case any person
who may be appointed as an inspector fails to appear or act, the vacancy may be
filled by appointment made by the directors in advance of the meeting or at the
meeting by the person presiding thereat. Each inspector, if any, before
entering upon the discharge of his or her duties, shall take and sign an oath
faithfully to execute the duties of inspector at such meeting with strict
impartiality and according to the best of his ability. The inspectors, if any,
shall determine the number of shares of stock outstanding and the voting power
of each, the shares of stock represented at the meeting, the existence of a
quorum, and the validity and effect of proxies, and shall receive votes, ballot
or consents, hear and determine all challenges and questions arising in
connection with the right to vote, count and tabulate all votes, ballots or
consents, determine the result, and do such acts as are proper to conduct the
election or vote with fairness to all stockholders. On request of the person
presiding at the meeting, the inspector or inspectors, if any, shall make a
report in writing of any challenge, question or matter determined by such
inspector or inspectors and execute a certificate of any fact found by such
inspector or inspectors.
SECTION 10. Nominating and Proposal Procedures. Without limiting any
----------------------------------
other notice requirements imposed by law, the Certificate of Incorporation or
these By-laws, any nomination for election to the Board of Directors or other
proposal to be presented by any stockholder at a stockholders' meeting (the
"Proponent") will be properly presented only if written notice of the
Proponent's intent to make such nomination or proposal has been personally
delivered to and otherwise in fact received by the Secretary of the Corporation
not later than (i) for the annual meeting, at least 150 days prior to the
anniversary date of the prior year's annual meeting, or (ii) for any special
meeting, the close of business on the tenth day after notice of such meeting is
first given to stockholders; provided, however, that nothing contained herein
shall limit or restrict the right of any stockholder to present at a
stockholders' meeting any proposal made by such stockholder in accordance with
Rule 14a-8 promulgated pursuant to the Securities Exchange Act of 1934, as
amended, as it may hereafter be amended, or any successor rule. Such notice by
the Proponent to the Corporation shall set forth in reasonable detail
information concerning the nominee (in the case of a nomination for election to
the Board of Directors) or the substance of the proposal (in the case of any
other stockholder proposal), and shall include: (a) the name and residence
address and business address of the stockholder who intends to present the
nomination or other proposal or of any person who participates or is expected to
participate in making such nomination and of the person or persons, if any, to
be nominated and the principal occupation or employment and the name, type of
business and address of the business, corporation or other organization in which
such employment is carried on of each such stockholder, participant and nominee;
(b) a representation that the Proponent is
4
<PAGE>
a holder of record of stock of the Corporation entitled to vote at such meeting
and intends to appear in person or by proxy at the meeting to present the
nomination or other proposal specified in the notice; (c) a description of all
arrangements or understandings between the Proponent and any other person or
persons (naming such person or persons) pursuant to which the nomination or
other proposal is to be made by the Proponent; (d) such other information
regarding each proposal and each nominee as would have been required to be
included in a proxy statement filed pursuant to the proxy rules of the
Securities and Exchange Commission had the nomination or other proposal been
made by the Board of Directors; and (e) the consent of each nominee, if any, to
serve as a director of the Corporation if elected. Within fifteen (15) days
following the receipt by the Secretary of a notice of nomination or proposal
pursuant hereto, the Secretary shall advise the Proponent in writing of any
deficiencies in the notice and of any additional information the Corporation is
requiring to determine the eligibility of the proposed nominee or the substance
of the proposal. A Proponent who has been notified of deficiencies in the notice
of nomination or proposal and/or of the need for additional information shall
cure such deficiencies and/or provide such additional information within fifteen
(15) days after receipt of the notice of such deficiencies and/or the need for
additional information. The presiding officer of a meeting of stockholders may,
in his or her sole discretion, refuse to acknowledge a nomination or other
proposal presented by any person that does not comply with the foregoing
procedure and, upon his or her instructions, all votes cast for such nominee or
with respect to such proposal may be disregarded.
ARTICLE II
Board of Directors
------------------
SECTION 1. General Powers. The business, property and affairs of the
--------------
Corporation shall be managed by, or under the direction of, the Board of
Directors.
SECTION 2. Qualification; Number; Term; Remuneration. (a) Each
-----------------------------------------
director shall be at least 18 years of age. A director need not be a
stockholder, a citizen of the United States, or a resident of the State of
Delaware. The number of directors constituting the entire Board shall be such
number as may be fixed from time to time by action of the stockholders or Board
of Directors, but in no event less than one, one of whom may be selected by the
Board of Directors to be its Chairman. The use of the phrase "entire Board"
herein refers to the total number of directors which the Corporation would have
if there were no vacancies.
(b) Directors who are elected at an annual meeting of stockholders,
and directors who are elected in the interim to fill vacancies and newly created
directorships, shall hold office until the next annual meeting of stockholders
and until their successors are duly elected and qualified or until their earlier
resignation or removal; provided, however, that, immediately following the
-------- -------
consummation of a public offering by the Corporation of any of its capital
stock, the Board of Directors of the Company shall be divided into three classes
(as nearly equal in number as possible), which are hereby designated Class A,
Class B and Class C, respectively. The term of office of the initial Class A
Directors shall expire at the first annual meeting of stockholders or any
special meeting in lieu thereof following such public offering, the
5
<PAGE>
term of office of the initial Class B Directors shall expire at the second
annual meeting of stockholders or any special meeting in lieu thereof following
such public offering, and the term of office of the initial Class C Directors
shall expire at the third annual meeting of stockholders or any special meeting
in lieu thereof following such public offering. At each annual meeting of
stockholders or special meeting in lieu thereof after the initial classification
of Directors, Directors elected to succeed those Directors whose terms expire
shall be elected for a term of office to expire at the third succeeding annual
meeting of stockholders or special meeting in lieu thereof after their election
and until their successors are duly elected and qualified. Upon the addition of
any one or more new Directors to the Board of Directors, which new Director is
not a successor to any then current Director, each such new Director shall be
added in turn first to Class A, then to Class B, then to Class C, provided,
however, that the addition of any new Director to one particular class may be
modified if such modification serves to more evenly distribute the number of
Directors in all such classes.
(c) Directors may be paid their expenses, if any, of attendance at
each meeting of the Board of Directors and may be paid a fixed sum for
attendance at each meeting of the Board of Directors or a stated salary as
director. No such payment shall preclude any director from serving the
Corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like compensation for attending
committee meetings.
SECTION 3. Quorum and Manner of Voting. Except as otherwise provided
---------------------------
by law, a majority of the entire Board shall constitute a quorum. A majority of
the directors present, whether or not a quorum is present, may adjourn a meeting
from time to time to another time and place without notice. The vote of the
majority of the directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors.
SECTION 4. Places of Meetings. Meetings of the Board of Directors
------------------
may be held at any place within or without the State of Delaware, as may from
time to time be fixed by resolution of the Board of Directors, or as may be
specified in the notice of meeting.
SECTION 5. Annual Meeting. Following the annual meeting of
--------------
stockholders, the newly elected Board of Directors shall meet for the purpose of
the election of officers and the transaction of such other business as may
properly come before the meeting. Such meeting may be held without notice
immediately after the annual meeting of stockholders at the same place at which
such stockholders' meeting is held.
SECTION 6. Regular Meetings. Regular meetings of the Board of
----------------
Directors shall be held at such times and places as the Board of Directors shall
from time to time by resolution determine. Notice need not be given of regular
meetings of the Board of Directors held at times and places fixed by resolution
of the Board of Directors. Where appropriate communication facilities are
reasonably available, any or all Directors shall have the right to participate
in all or any part of a meeting of the Board of Directors, or any Committee
thereof, by means of conference telephone or any means of communication by which
all persons participating in the meeting are able to hear each other.
6
<PAGE>
SECTION 7. Special Meetings. Special meetings of the Board of
----------------
Directors shall be held whenever called by the Chairman of the Board, President,
Vice-Chairman or by a majority of the directors then in office.
SECTION 8. Notice of Special Meetings. A notice of the place, date
--------------------------
and time and the purpose or purposes of each special meeting of the Board of
Directors shall be given to each director by mailing the same at least two days
before the special meeting, or by telegraphing or telephoning the same or by
delivering the same personally not later than the day before the day of the
meeting.
SECTION 9. Organization. At all meetings of the Board of Directors,
------------
the Chairman, if any, or if none or in the Chairman's absence or inability to
act the President, or in the President's absence or inability to act any Vice-
President who is a member of the Board of Directors, or in such Vice-President's
absence or inability to act a chairman chosen by the directors, shall preside.
The Secretary of the Corporation shall act as secretary at all meetings of the
Board of Directors when present, and, in the Secretary's absence, the presiding
officer may appoint any person to act as secretary.
SECTION 10. Resignation; Removal. Any director may resign at any
--------------------
time upon written notice to the Corporation and such resignation shall take
effect upon receipt thereof by the President or Secretary, unless otherwise
specified in the resignation. Any or all of the directors may be removed, with
or without cause, by the holders of a majority of the shares of stock
outstanding and entitled to vote for the election of directors.
SECTION 11. Vacancies. Unless otherwise provided in these By-laws,
---------
vacancies on the Board of Directors, whether caused by resignation, death,
disqualification, removal, an increase in the authorized number of directors or
otherwise, may be filled by the affirmative vote of a majority of the remaining
directors, although less than a quorum, or by a sole remaining director, or at a
special meeting of the stockholders, by the holders of shares entitled to vote
for the election of directors.
SECTION 12. Action by Written Consent. Any action required or
-------------------------
permitted to be taken at any meeting of the Board of Directors may be taken
without a meeting if all the directors consent thereto in writing, and the
writing or writings are filed with the minutes of proceedings of the Board of
Directors.
ARTICLE III
Committees
----------
SECTION 1. Appointment. From time to time the Board of Directors by
-----------
a resolution adopted by a majority of the entire Board may appoint any committee
or committees for any purpose or purposes, to the extent lawful, which shall
have powers as shall be determined and specified by the Board of Directors in
the resolution of appointment.
7
<PAGE>
SECTION 2. Procedures, Quorum and Manner of Acting. Each committee
---------------------------------------
shall fix its own rules of procedure, and shall meet where and as provided by
such rules or by resolution of the Board of Directors. Except as otherwise
provided by law, the presence of a majority of the then appointed members of a
committee shall constitute a quorum for the transaction of business by that
committee, and in every case where a quorum is present the affirmative vote of a
majority of the members of the committee present shall be the act of the
committee. Each committee shall keep minutes of its proceedings, and actions
taken by a committee shall be reported to the Board of Directors.
SECTION 3. Action by Written Consent. Any action required or
-------------------------
permitted to be taken at any meeting of any committee of the Board of Directors
may be taken without a meeting if all the members of the committee consent
thereto in writing, and the writing or writings are filed with the minutes of
proceedings of the committee.
SECTION 4. Term; Termination. In the event any person shall cease to
-----------------
be a director of the Corporation, such person shall simultaneously therewith
cease to be a member of any committee appointed by the Board of Directors.
ARTICLE IV
Officers
--------
SECTION 1. Officers. The Corporation shall have as officers, a
--------
Chairman of the Board, a President, a Chief Financial Officer, a Secretary and a
Treasurer. The Corporation may also have, at the discretion of the Board of
Directors, one or more Vice Presidents, one or more assistant secretaries, one
or more assistant treasurers and such other officers as the Board may from time
to time deem proper. Any two or more offices may be held by the same person
except the offices of the President and Secretary.
SECTION 2. Election of Officers. The officers of the Corporation
--------------------
shall be chosen by the Board of Directors.
SECTION 3. Term of Office and Remuneration. The term of office of
-------------------------------
all officers shall be one year and until their respective successors have been
elected and qualified, but any officer may be removed from office, either with
or without cause, at any time by the Board of Directors. Any vacancy in any
office arising from any cause may be filled for the unexpired portion of the
term by the Board of Directors. The remuneration of all officers of the
Corporation may be fixed by the Board of Directors or in such manner as the
Board of Directors shall provide.
SECTION 4. Resignation; Removal. Any officer may resign at any time
--------------------
upon written notice to the Corporation and such resignation shall take effect
upon receipt thereof by the President or Secretary, unless otherwise specified
in the resignation. Any officer shall be subject to removal, with or without
cause, at any time by vote of a majority of the entire Board.
8
<PAGE>
SECTION 5. Chairman of the Board. The Chairman of the Board of
---------------------
Directors, if there be one, shall preside at all meetings of the Board of
Directors and shall have such other powers and duties as may from time to time
be assigned by the Board of Directors.
SECTION 6. President. The President shall have general management
---------
and supervision of the property, business and affairs of the Corporation and
over its other officers; may appoint and remove assistant officers and other
agents and employees, other than officers referred to in Section 1 of this
Article IV; and may execute and deliver in the name of the Corporation powers of
attorney, contracts, bonds and other obligations and instruments.
SECTION 7. Vice-President. A Vice-President may execute and deliver
--------------
in the name of the Corporation contracts and other obligations and instruments
pertaining to the regular course of the duties of said office, and shall have
such other authority as from time to time may be assigned by the Board of
Directors or the President.
SECTION 8. Chief Financial Officer.
-----------------------
(a) The Chief Financial Officer shall keep, or cause to be kept, the
books and records of account of the Corporation.
(b) The Chief Financial Officer shall deposit all monies and other
valuables in the name and to the credit of the Corporation with such
depositories as may be designated from time to time by resolution of the Board
of Directors. He or she shall disburse the funds of the Corporation as may be
ordered by the Board of Directors, shall render to the President and the Board,
whenever they request it, an account of all of his transactions as Chief
Financial Officer and of the financial condition of the Corporation, and shall
have such other powers and perform such other duties as may be prescribed from
time to time by the Board or as the President may from time to time delegate.
SECTION 9. Treasurer. The Treasurer shall in general have all duties
---------
incident to the position of Treasurer and such other duties as may be assigned
by the Board of Directors or the President.
SECTION 10. Secretary. The Secretary shall in general have all the
---------
duties incident to the office of Secretary and such other duties as may be
assigned by the Board of Directors or the President.
SECTION 11. Assistant Officers. Any assistant officer shall have
------------------
such powers and duties of the officer such assistant officer assists as such
officer or the Board of Directors shall from time to time prescribe.
9
<PAGE>
ARTICLE V
Books and Records
-----------------
SECTION 1. Location. The books and records of the Corporation may be
--------
kept at such place or places within or outside the State of Delaware as the
Board of Directors or the respective officers in charge thereof may from time to
time determine. The record books containing the names and addresses of all
stockholders, the number and class of shares of stock held by each and the dates
when they respectively became the owners of record thereof shall be kept by the
Secretary as prescribed in the By-laws and by such officer or agent as shall be
designated by the Board of Directors.
SECTION 2. Addresses of Stockholders. Notices of meetings and all
-------------------------
other corporate notices may be delivered personally or mailed to each
stockholder at the stockholder's address as it appears on the records of the
Corporation.
ARTICLE VI
Certificates Representing Stock
-------------------------------
SECTION 1. Certificates; Signatures. The shares of the Corporation
------------------------
shall be represented by certificates, provided that the Board of Directors of
the Corporation may provide by resolution or resolutions that some or all of any
or all classes or series of its stock shall be uncertificated shares. Any such
resolution shall not apply to shares represented by a certificate until such
certificate is surrendered to the Corporation. Notwithstanding the adoption of
such a resolution by the Board of Directors, every holder of stock represented
by certificates and upon request every holder of uncertificated shares shall be
entitled to have a certificate, signed by or in the name of the Corporation by
the Chairman or Vice-Chairman of the Board of Directors, or the President or
Vice-President, and by the Treasurer or an Assistant Treasurer, or the Secretary
or an Assistant Secretary of the Corporation, representing the number of shares
registered in certificate form. Any and all signatures on any such certificate
may be facsimiles. In case any officer, transfer agent or registrar who has
signed or whose facsimile signature has been placed upon a certificate shall
have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the Corporation with the same effect
as if he were such officer, transfer agent or registrar at the date of issue.
The name of the holder of record of the shares represented thereby, with the
number of such shares and the date of issue, shall be entered on the books of
the Corporation.
SECTION 2. Transfers of Stock. Upon compliance with provisions
------------------
restricting the transfer or registration of transfer of shares of stock, if any,
shares of capital stock shall be transferable on the books of the Corporation
only by the holder of record thereof in person, or by duly authorized attorney,
upon surrender and cancellation of certificates for a like number of shares,
properly endorsed, and the payment of all taxes due thereon.
10
<PAGE>
SECTION 3. Fractional Shares. The Corporation may, but shall not be
-----------------
required to, issue certificates for fractions of a share where necessary to
effect authorized transactions, or the Corporation may pay in cash the fair
value of fractions of a share as of the time when those entitled to receive such
fractions are determined, or it may issue scrip in registered or bearer form
over the manual or facsimile signature of an officer of the Corporation or of
its agent, exchangeable as therein provided for full shares, but such scrip
shall not entitle the holder to any rights of a stockholder except as therein
provided.
The Board of Directors shall have power and authority to make all such
rules and regulations as it may deem expedient concerning the issue, transfer
and registration of certificates representing shares of the Corporation.
SECTION 4. Lost, Stolen or Destroyed Certificates. The Corporation
--------------------------------------
may issue a new certificate of stock in place of any certificate, theretofore
issued by it, alleged to have been lost, stolen or destroyed, and the Board of
Directors may require the owner of any lost, stolen or destroyed certificate, or
his legal representative, to give the Corporation a bond sufficient to indemnify
the Corporation against any claim that may be made against it on account of the
alleged loss, theft or destruction of any such certificate or the issuance of
any such new certificate.
ARTICLE VII
Dividends
---------
Subject always to the provisions of law and the Certificate of
Incorporation, the Board of Directors shall have full power to determine whether
any, and, if any, what part of any, funds legally available for the payment of
dividends shall be declared as dividends and paid to stockholders; the division
of the whole or any part of such funds of the Corporation shall rest wholly
within the lawful discretion of the Board of Directors, and it shall not be
required at any time, against such discretion, to divide or pay any part of such
funds among or to the stockholders as dividends or otherwise; and before payment
of any dividend, there may be set aside out of any funds of the Corporation
available for dividends such sum or sums as the Board of Directors from time to
time, in its absolute discretion, thinks proper as a reserve or reserves to meet
contingencies, or for repairing or maintaining any property of the Corporation,
or for such other purpose as the Board of Directors shall think conducive to the
interest of the Corporation, and the Board of Directors may modify or abolish
any such reserve in the manner in which it was created.
11
<PAGE>
ARTICLE VIII
Ratification
------------
Any transaction, questioned in any law suit on the ground of lack of
authority, defective or irregular execution, adverse interest of director,
officer or stockholder, non-disclosure, miscomputation, or the application of
improper principles of practices of accounting, may be ratified before or after
judgment, by the Board of Directors or by the stockholders, and if so ratified
shall have the same force and effect as if the questioned transaction had been
originally duly authorized. Such ratification shall be binding upon the
Corporation and its stockholders and shall constitute a bar to any claim or
execution of any judgment in respect of such questioned transaction.
ARTICLE IX
Indemnification
---------------
SECTION 1. Right to Indemnification. The Corporation shall indemnify
------------------------
and hold harmless, to the fullest extent permitted by law as it presently exists
or may hereafter be amended, any person who was or is made or is threatened to
be made a party or is otherwise involved in any action or suit, whether or not
by or in the right of the Corporation, or proceeding, whether civil, criminal,
administrative or investigative (collectively, a "proceeding") by reason of the
fact that he, or a person for whom he is the legal representative, is or was a
director, officer, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, employee or agent of
another corporation or of a partnership, joint venture, trust, enterprise or
nonprofit entity, including service with respect to employee benefit plans,
against all liability and loss, including judgments, fines, ERISA excise taxes
or penalties and amounts paid or to be paid in settlement, incurred, suffered or
paid by or on behalf of such person, and expenses (including attorneys' fees)
reasonably incurred by such person.
SECTION 2. Prepayment of Expenses. The Corporation shall pay the
----------------------
expenses (including attorneys' fees) incurred in defending any proceeding in
advance of its final disposition, provided, however, that the payment of
-----------------
expenses incurred by a director or officer in advance of the final disposition
of the proceeding shall be made only upon receipt of an undertaking by the
director or officer to repay all amounts advanced if it should be ultimately
determined that the director or officer is not entitled to be indemnified under
this Article or otherwise.
SECTION 3. Claims. The right to indemnification and payment of
------
expenses under the Certificate of Incorporation, these By-laws or otherwise
shall be a contract right. If a claim for indemnification or payment of
expenses under this Article is not paid in full within sixty days after a
written claim therefor has been received by the Corporation, the claimant may
file suit to recover the unpaid amount of such claim and, if successful in whole
or in part, shall be entitled to be paid the expense of prosecuting such claim.
In any such action the Corporation
12
<PAGE>
shall have the burden of proving that the claimant was not entitled to the
requested indemnification or payment of expenses under applicable law.
SECTION 4. Non-Exclusivity of Rights. The rights conferred on any
-------------------------
person by this Article shall not be exclusive of any other rights which such
person may have or hereafter acquire under any statute, provision of the
Certificate of Incorporation, these By-laws, agreement, vote of stockholders or
disinterested directors or otherwise.
SECTION 5. Other Indemnification. The Corporation's obligation, if
---------------------
any, to indemnify any person who was or is serving at its request as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust, enterprise or nonprofit entity shall be reduced by any amount such person
may collect as indemnification from such other corporation, partnership, joint
venture, trust, enterprise or nonprofit enterprise.
SECTION 6. Amendment or Repeal. Any repeal or modification of the
-------------------
foregoing provisions of this Article IX shall not adversely affect any right or
protection hereunder of any person in respect of any act or omission occurring
prior to the time of such repeal or modification.
ARTICLE X
Corporate Seal
--------------
The corporate seal shall have inscribed thereon the name of the
Corporation and the year of its incorporation, and shall be in such form and
contain such other words and/or figures as the Board of Directors shall
determine. The corporate seal may be used by printing, engraving,
lithographing, stamping or otherwise making, placing or affixing, or causing to
be printed, engraved, lithographed, stamped or otherwise made, placed or
affixed, upon any paper or document, by any process whatsoever, an impression,
facsimile or other reproduction of said corporate seal.
ARTICLE XI
Fiscal Year
-----------
The fiscal year of the Corporation shall be that which is determined
by the Board of Directors, and is subject to change by the Board of Directors.
13
<PAGE>
ARTICLE XII
Waiver of Notice
----------------
Whenever notice is required to be given by these By-laws or by the
Certificate of Incorporation or by law, a written waiver thereof, signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent to notice.
ARTICLE XIII
Bank Accounts, Drafts, Contracts, Etc.
--------------------------------------
SECTION 1. Bank Accounts and Drafts. In addition to such bank
------------------------
accounts as may be authorized by the Board of Directors, the primary financial
officer or any person designated by said primary financial officer, whether or
not an employee of the Corporation, may authorize such bank accounts to be
opened or maintained in the name and on behalf of the Corporation as he may deem
necessary or appropriate, payments from such bank accounts to be made upon and
according to the check of the Corporation in accordance with the written
instructions of said primary financial officer, or other person so designated by
the Treasurer.
SECTION 2. Contracts. The Board of Directors may authorize any
---------
person or persons, in the name and on behalf of the Corporation, to enter into
or execute and deliver any and all deeds, bonds, mortgages, contracts and other
obligations or instruments, and such authority may be general or confined to
specific instances.
SECTION 3. Proxies; Powers of Attorney; Other Instruments. The
----------------------------------------------
Chairman, the President or any other person designated by either of them shall
have the power and authority to execute and deliver proxies, powers of attorney
and other instruments on behalf of the Corporation in connection with the rights
and powers incident to the ownership of stock by the Corporation. The Chairman,
the President or any other person authorized by proxy or power of attorney
executed and delivered by either of them on behalf of the Corporation may attend
and vote at any meeting of stockholders of any company in which the Corporation
may hold stock, and may exercise on behalf of the Corporation any and all of the
rights and powers incident to the ownership of such stock at any such meeting,
or otherwise as specified in the proxy or power of attorney so authorizing any
such person. The Board of Directors, from time to time, may confer like powers
upon any other person.
SECTION 4. Financial Reports. The Board of Directors may appoint the
-----------------
primary financial officer or other fiscal officer and/or the Secretary or any
other officer to cause to be prepared and furnished to stockholders entitled
thereto any special financial notice and/or financial statement, as the case may
be, which may be required by any provision of law.
14
<PAGE>
ARTICLE XIV
Amendments
----------
The Board of Directors of the Corporation is expressly authorized to
adopt, amend or repeal the By-laws of the Corporation, subject, however, to any
limitation thereof contained in these By-laws. By-laws adopted by the Board of
Directors may be repealed or changed, and new By-laws made, by the stockholders,
and the stockholders may prescribe that any By-law made by them shall not be
altered, amended or repealed by the Board of Directors. The stockholders also
shall have the power to adopt, amend or repeal the By-laws of the Corporation;
provided, however, that, immediately following the consummation of a public
- -------- -------
offering by the Corporation of any of its capital stock, in addition to any vote
of the holders of any class or series of stock of the Corporation required by
law or by the Certificate of Incorporation, the affirmative vote of the holders
of at least eighty percent (80%) of the voting power of all of the then
outstanding shares of the capital stock of the Corporation entitled to vote
generally in the election of directors, voting together as a single class, shall
be required to adopt, amend or repeal any provision of the By-laws of the
Corporation.
15
<PAGE>
EXHIBIT 10.1
CDPD VALUE ADDED RESELLER AGREEMENT
This CDPD Value Added Reseller Agreement (this "Agreement"), dated as of
May 6, 1997 is made between AT&T Wireless Data, Inc., a Delaware corporation
doing business as AT&T Wireless Services, for cellular digital packet data
("CDPD") communications service (defined below) provided by AT&T Wireless Data,
Inc., d/b/a AT&T Wireless Services and its Affiliates, collectively, ("AT&T"),
and GoAmerica, a corporation organized under the laws of the State of Delaware,
for and on behalf of its Affiliates (as defined below) and any permitted
assignee (collectively, "Customer").
RECITALS
A. Customer would like to receive Service from AT&T, in connection with
Customer's provision of certain value-added communications services to its End
Users.
B. AT&T wishes to provide Service to Customer based upon the value-added
communications services provided by Customer to its End Users, in accordance
with the terms
and conditions of this Agreement.
AGREEMENTS
In consideration of the mutual promises contained in this Agreement, the
Parties hereby agree as follows:
Section 1. Definitions
1.1 Affiliate means, with respect to any entity, any other entity that directly
Controls, is Controlled by or is under common Control with the first entity.
1.2 Application means the combination of the Service and Customer's value added
communications services provided to its End Users. The Application is more
specifically described in Exhibit A hereto.
1.3 Control (and all conjugations thereof) means, with respect to any entity,
the direct or indirect possession of the power to direct the management and
policies of such entity.
1.4 End User means the individuals or entities obtaining access to Service from
Customer.
1.5 Number means, for each End User, the AT&T network and service identifier
numbers and various other network, equipment and service numbers assigned to
Customer for that End User to obtain access to Service.
<PAGE>
1.6 Service means the cellular digital packet data (CDPD) service offered by
AT&T. Cellular digital packet data service generally consists of a wireless data
communications service in which data is sent through a cellular network in a
connectionless packet data format in accordance with the most recent CDPD
specifications, similar to the manner in which data is sent over a TCP/IP Local
Area Network.
1.7 Service Area means those portions of AT&T's CDPD operating areas as
identified by AT&T from time to time (the "Service Area") and as set forth in
Exhibit B hereto, as amended from time to time.
Section 2. The Service
2.1 Provision
2.1.1 Service is available to each of Customer's users or units
within AT&Ts Service Area as long as Customer's CDPD transmitting and receiving
equipment (the "Equipment") is turned on, programmed with AT&T network and
service identifier numbers (collectively, the "Numbers").
2.1.2 Service provided pursuant to this Agreement will be provided
only upon the request of Customer's authorized representatives, and not by End
Users, and only in connection with the Application.
2.1.3 Customer is not authorized under this Agreement to use the
Service independent of the Application or in conjunction with any other
Application unless such Application is described and attached in Exhibit A
hereto.
2.2 Support Services. AT&T will provide to Customer, and not directly to
End Users, network monitoring, technical assistance and trouble-shooting support
of the Service through AT&T's technical assistance center (the "ATAC"). The
ATAC will be staffed and available to Customer's authorized representatives
twenty-four (24) hours per day, seven (7) days per week to perform these
functions and to address Customer's inquiries. Customer will provide AT&T with
access to contacts and dispatch information to facilitate appropriate response
to Service interruptions.
2.3. Numbers. Customer shall be issued an initial amount of Numbers as
set forth in the Service Plan attached as Exhibit C hereto. Customer may order
additional Numbers by completing a Service Request Form. Additional Numbers will
be issued to Customer provided Customer is not in default hereof, and subject to
any requirements for a security deposit. AT&T may change any of Customer's
Numbers from time to time, by giving Customer written notice thereof. AT&T will
use its best efforts to minimize such changes. Customer will inform its End
Users of the provisions of this Section and agrees that neither it nor its End
Users will acquire any proprietary right in any specific Number provided by
AT&T.
2
<PAGE>
2.4 Use
2.4.1 Customer will use the Service only for lawful business purposes
and only in connection with the Application, and may resell the Service only in
connection with the Application and as provided by this Agreement.
2.4.2 AT&T authorizes Customer to provide any or all of the Service
to End Users in connection with End Users' use of the Application.
2.4.3 AT&T is obligated only to Customer, with which it is in privity
of contract, and not to End Users, with whom AT&T is not in privity. End Users
are not to be deemed third-party beneficiaries of this Agreement.
2.4.4 Customer is solely responsible for all risks and expenses
incurred with its actions or omissions in the provision of the Service or the
provision of the Application to End Users, including but not limited to payment
to AT&T for all charges for Service used by Customer or its End Users or third
Parties using a Number assigned to Customer. In connection with such
activities, Customer will act in all respects for its own account and will be
responsible for such things as credit verification, deposits, billing,
collection, bad debts and any [charges for] unauthorized use of the Service by
End Users or any third Party using a Number assigned to Customer.
2.4.5 Customer will disclose to End Users the provisions set forth in
Exhibit D.
2.4.6 Customer is responsible for all End User support regarding all
aspects of End Users' use of the Service (whether arising in connection with
hardware, software or Service), including but not limited to issues relating to
modems, protocol stacks, software configuration and setup, usability issues,
Service activation, Service coverage, billing, and any and all other aspects of
technical services and customer care. This includes, but is not limited to,
Customer taking the End Users' calls and using reasonable commercial efforts to
remedy any Customer or End User-identified problem without AT&T's participation.
Customer will report a problem to AT&T only upon reasonable verification that
the problem is due to reasons other than misuse, malfunction or the failure of
the Customer Equipment to meet the technical standards for compatibility with
the Service, or failure of the End User to understand how to use the Service.
2.4.7 The Service will not be used to transmit any communication
where the message, or its transmission or distribution would involve any local
court order or regulation or would likely be offensive to the recipient or
recipients thereof.
2.5 Continuing Right. AT&T will have the continuing right to market and
sell the service and any other communications services to any third Parties,
including but not limited to current, future and potential End Users of
Customer.
3
<PAGE>
2.6 Procedures. Customer will comply with AT&T's procedures for obtaining
Numbers and for activating Service with respect to any End User. AT&T may from
time to time modify these procedures by giving Customer written notice of such
modification.
2.7 Service Area. The Service is available only within the Service Area
and is subject to (a) transmission limitations caused by atmospheric,
topographical or other conditions affecting transmission, (b) equipment
modifications, repairs and other similar activities necessary for the proper or
improved operation of the Service, and (c) equipment failures beyond AT&T`s
reasonable Control. AT&T will not be responsible for any interruption or
inability to use the Service that results from equipment or systems used in
connection with the Service or the Application. AT&T may amend Exhibit B to add
or delete any portion of the Service Area from time to time and will use good
faith efforts to provide prior written notice to Customer.
2.8 Interruptions and Field Trials. The Service may be temporarily
refused, limited, interrupted or curtailed due to governmental regulations or
orders, system capacity limitations or equipment maintenance, repair,
modifications, upgrades or relocation. AT&T will make reasonable efforts to
perform scheduled maintenance or repairs on Sundays during the hours of four
(4:00) a.m. to six (6:00) a.m. AT&T will attempt to notify Customer of scheduled
and unscheduled network outages that are expected to last more than two (2)
hours and that may affect the Service. Customer will cooperate, at AT&T's
expense, in conducting any field tests and trials that AT&T or any Service
provider reasonably determines are necessary or desirable to ensure the
performance and reliability of the Service.
Section 3. Interconnection
Customer will be required to obtain and pay for any interconnection
services required to connect Customer to AT&T's CDPD network to be used by End
Users. In the event that individual connectivity to End Users is required,
Customer will follow AWS policies and procedures for such connections.
Section 4. Customer Equipment
Customer will be responsible for the acquisition, programming,
installation, maintenance and repair of all equipment (other than equipment
comprising portions of AT&T's CDPD network) necessary to enable Customer and its
End Users to receive the Service ("Customer Equipment"). Customer will ensure
that all Customer Equipment is technically and operationally compatible with the
Service and meets all applicable federal and state laws, rules and regulations.
Section 5. Rates
5.1 Customer will pay AT&T for Service provided to Customer and its End Users
in accordance with the Service Plan. Unless the Service Plan provides
otherwise, AT&T shall not increase the rates contained in the Service Plan
within **** from the effective date of this
*****Confidential Portion omitted and filed separately with the Securities
and Exchange Commission.
4
<PAGE>
Agreement. Thereafter, however, AT&T may increase the rates contained in the
Service Plan from time to time on thirty days (30) written notice to Customer;
provided, however, if such increase is unacceptable to Customer, Customer may
terminate this Agreement by providing AT&T with written notice at least fifteen
(15) days in advance of such termination. Notwithstanding the foregoing, if AT&T
rescinds its notice of rate increase within such fifteen days, this Agreement
will not terminate, but will remain in full force and effect. AT&T may decrease
the rates contained in the Service Plan from time to time upon written notice to
Customer, effective on the date specified on such notice. To the extent AT&T
arranges for Customer to receive Service from non-AT&T Service providers,
Customer will pay AT&T for Service at Company's regular retail rate for such
Service.
5.2 *****
Section 6. Invoices, Payments, Taxes and Security Deposits
6.1 Invoices. AT&T will provide Customer written invoices on a monthly
basis.
6.2 Payment. Customer will pay each invoice within thirty (30) days
following its receipt thereof. Any payment not received by the due date will
accrue interest at the rate of one and one-half percent (1.5%) per month or the
maximum lawful rate. Additional fees will be assessed for any check returned
for insufficient funds.
6.3. Disputed Charges. If the amount of any invoice is disputed, Customer
will pay the entire amount of the invoice by the due date and will include with
such payment a detailed statement sufficient to allow AT&T to ascertain the
disputed amount and the reasons for the dispute. Any amount not disputed within
ninety (90) days of an invoice due date may not thereafter be disputed.
Customer and AT&T will use good faith efforts to resolve any dispute within
sixty (60) days of receipt of such statement.
6.4 Taxes. Customer will pay all applicable federal, state and local
sales, use, public utilities, gross receipts or other taxes or fees imposed on
AT&T as a result of this Agreement (other than taxes imposed on the net income
of AT&T). Customer will provide certificates of resale required for the states
in which it will resell service, as indicated on Exhibit C. Customer will
reimburse AT&T for any such taxes or fees paid by AT&T on Customer's behalf.
6.5. Security Deposits. AT&T may from time to time require Customer to
provide it with a cash deposit, irrevocable letter of credit, or other security
acceptable to AT&T based upon AT&T's assessment of Customer's creditworthiness.
***** Confidential Portion omitted and filed separately with the Securities and
Exchange Commission.
5
<PAGE>
Section 7. Term and Termination
7.1 Term. The initial term of this Agreement will begin on the date
hereof and, unless earlier terminated in accordance with this Section 7, will
continue for a ***** term. This Agreement will automatically renew for
successive ***** renewal terms unless either Party, at least ***** prior to the
end of the then-current term, notifies the other Party in writing of its intent
to terminate this Agreement.
7.2 Termination
7.2.1 If either Party breaches a material term of this Agreement, and
such Party fails to cure the breach within thirty (30) days following its
receipt of written notice from the non-breaching Party (or ten days in the event
of non-payment of any amounts due hereunder), then the non-breaching Party, in
addition to any other remedies it may have at law or in equity, may terminate
this Agreement upon written notice to the breaching Party.
7.2.2 This Agreement will automatically terminate in the event of
either Party's dissolution, insolvency, assignment for the benefit of creditors
or filing for relief under the provisions of the bankruptcy laws or similar
creditor protection laws.
7.2.3 AT&T may terminate this Agreement immediately and without
penalty upon written notice to Customer if the Federal Communications Commission
or any other regulatory agency or court promulgates any rule, regulation,
judgment or order that (a) prohibits or substantially impedes (in effect or
Application) AT&T from fulfilling its obligations hereunder, (b) prohibits or
substantially impedes non-AT&T Service providers from providing Service, or (c)
adversely affects AT&T's ability to conduct business upon terms and conditions
acceptable to it. AT&T will notify Customer promptly following AT&T's
determination that an event permitting termination under this Section has
occurred.
7.2.4 If Customer shall at any time fail to meet the Service Plan
requirements set forth in Exhibit C, Company may provide Customer with ninety
(90) days written notice either 1) that Customer is no longer eligible to
receive Service under this Agreement, or 2) that Company will modify the Service
Plan in accordance with Customer's actual usage. If Customer is unable, during
the sixty (60) day period after Company's notice is sent, to satisfy the
eligibility criteria, Company and Customer will renegotiate the Service Plan
Requirements. If the parties fail to reach a mutually acceptable agreement
regarding the Service Plan within the following thirty (30) day period, Company
may either, immediately or upon notice to Customer, 1) modify the Service Plan,
or 2) terminate this Agreement without further notice, in its sole discretion.
7.3 Survival. Sections 8, 9, 10, 11, 12, 16 and 17 (together with all
other provisions of this Agreement that may reasonably be interpreted or
construed as surviving termination) will survive the termination of this
Agreement.
***** Confidential Portion omitted and filed separately with the Securities and
Exchange Commission.
6
<PAGE>
7.4 Payment upon Termination. Upon termination of this Agreement for any
reason, all amounts owing to AT&T hereunder will become due and payable.
Section 8. Force Majeure
Neither Party will be liable for any loss, damage, cost, delay or failure
to perform resulting from causes beyond its reasonable Control including, but
not limited to, acts of God, fires, floods, earthquakes, strikes, insurrections,
riots, lightening or storms, or delays of suppliers or subcontractors for the
same causes.
Section 9. Indemnification
9.1 MUTUAL INDEMNITY. EACH PARTY WILL DEFEND, INDEMNIFY AND HOLD THE
OTHER, THE OTHER'S SUBSIDIARIES AND AFFILIATES (AND THEIR RESPECTIVE OWNERS,
DIRECTORS, OFFICERS, EMPLOYEES, REPRESENTATIVES AND AGENTS) AND ANY UNDERLYING
CARRIER ENABLING THE PROVISION OF SERVICE HARMLESS AGAINST ANY DAMAGES, LOSSES
AND EXPENSES (INCLUDING REASONABLE ATTORNEYS' AND EXPERT WITNESS' FEES AND
DISBURSEMENTS, WHETHER AT TRIAL OR ON ANY APPEAL) ARISING OUT OF OR RELATING TO
ANY CLAIMS, ACTIONS OR OTHER PROCEEDINGS THAT (A) ARE BROUGHT BY OR ON BEHALF OF
ANY THIRD PARTY, AND (B) RESULT FROM THE INDEMNIFYING PARTY'S BREACH, FAILURE TO
PERFORM OR OTHER MISCONDUCT IN CONNECTION WITH ITS DUTIES, OR THE EXERCISE OF
ITS RIGHTS UNDER THIS AGREEMENT.
9.2 ADDITIONAL INDEMNITY. CUSTOMER FURTHER AGREES TO DEFEND, INDEMNIFY
AND HOLD AT&T, ITS SUBSIDIARIES AND AFFILIATES, THEIR RESPECTIVE OWNERS,
DIRECTORS, OFFICERS, EMPLOYEES, REPRESENTATIVES AND AGENTS AND ANY UNDERLYING
CARRIER ENABLING THE PROVISION OF SERVICE (COLLECTIVELY, AS USED IN THIS
SUBPARAGRAPH, "AT&T") HARMLESS AGAINST ANY DAMAGES, LOSSES AND EXPENSES
(INCLUDING REASONABLE ATTORNEYS' AND EXPERT WITNESS' FEES AND DISBURSEMENTS,
WHETHER AT TRIAL OR ON ANY APPEAL) ARISING OUT OF OR RELATING TO ANY CLAIMS,
ACTIONS OR OTHER PROCEEDINGS THAT ARE BROUGHT BY OR ON BEHALF OF END USERS;
PROVIDED THAT CUSTOMER'S OBLIGATIONS TO DEFEND, INDEMNIFY AND HOLD AT&T HARMLESS
WILL NOT APPLY TO THE EXTENT THE CLAIM, ACTION OR PROCEEDING RESULTS FROM AT&T'S
NEGLIGENCE OR WILLFUL MISCONDUCT.
Section 10. No Warranties
AT&T represents and warrant that it has all necessary rights, including but
not limited to property, governmental license, patent, trademark, and other
intellectual property rights to enable it to carry out its obligations under
this Agreement.
7
<PAGE>
Notwithstanding the foregoing, AT&T SUPPLIES A SERVICE, AND NOT GOODS. AT&T
MAKES NO WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE SERVICE OR THE
PERFORMANCE OF ANY OBLIGATIONS HEREUNDER INCLUDING, WITHOUT LIMITATION,
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. ALL SUCH
WARRANTIES ARE EXPRESSLY EXCLUDED. AT&T IS NOT THE MANUFACTURER OF ANY CUSTOMER
EQUIPMENT AND MAKES NO WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT THERETO.
AT&T PROVIDES ACCESS TO INFORMATION PROVIDED BY OTHER SOURCES, HOWEVER AT&T
ACCEPTS NO LIABILITY FOR AND MAKES NO WARRANTIES, EXPRESS OR IMPLIED, WITH
RESPECT TO THE CONTENT THEREOF.
Section 11. Limitation of Liability
11.1 NO CONSEQUENTIAL DAMAGES. NEITHER PARTY WILL BE LIABLE TO THE OTHER
(OR ITS END USERS, CUSTOMERS OR ANY THIRD PARTY) FOR ANY INDIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES ARISING OUT OF SUCH PARTY'S FAILURE TO PERFORM UNDER THIS
AGREEMENT. NOTHING IN THIS SECTION 11. 1 WILL LIMIT A PARTY'S OBLIGATION TO
FULLY INDEMNIFY THE OTHER UNDER SECTION 9 FOR ACTIONS BROUGHT BY THE
INDEMNIFYING PARTY'S CUSTOMERS, END USERS OR BY ANY THIRD-PARTY, EVEN IF SUCH
ACTIONS INCLUDE CLAIMS FOR INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES.
11.2 LIMITATION OF ACTIONS. EXCEPT FOR ACTIONS ARISING IN CONNECTION WITH
SECTION 9, NEITHER PARTY MAY BRING AN A LEGAL ACTION WITH RESPECT TO THIS
AGREEMENT MORE THAN TWENTY-FOUR (24) MONTHS AFTER THE CAUSE OF ACTION ACCRUES.
11.3 LIABILITY CAP. EXCEPT FOR LIABILITIES ARISING UNDER SECTION 9, THE
AGGREGATE LIABILITY OF AT&T TO CUSTOMER FOR CLAIMS RELATING TO THIS AGREEMENT,
WHETHER FOR BREACH OR IN TORT, WILL NOT EXCEED THE AMOUNT PAID BY CUSTOMER TO
AT&T IN THE TWO MONTH PERIOD PROCEEDING THE DATE THE CLAIM AROSE.
11.4 PARTY. FOR THE PURPOSES OF THIS SECTION 11, "PARTY" MEANS THE PARTY,
ITS SUBSIDIARIES AND AFFILIATES AND THEIR RESPECTIVE OWNERS DIRECTORS, OFFICERS,
EMPLOYEES, AGENTS, REPRESENTATIVES, SUBCONTRACTORS AND SUPPLIERS.
11.5 SECURITY. ALTHOUGH THE SERVICE USES AN ENCRYPTED TECHNOLOGY, AND THE
LAW GENERALLY PROHIBITS THIRD PARTIES FROM MONITORING CELLULAR TRANSMISSIONS,
AT&T CANNOT GUARANTY THE SECURITY OF DATA TRANSMISSIONS. AT&T SHALL NOT BE
LIABLE FOR ANY LACK OF SECURITY RELATING IN ANY WAY TO USE OF THE SERVICE OR
CUSTOMER'S OR ITS END USERS DATA TRANSMISSIONS.
8
<PAGE>
Section 12. Confidentiality
12.1 Confidential Information. As used in this Agreement, "Confidential
Information" means any information of either AT&T or Customer that is not
generally known to the public, whether of a technical, business or other nature
(including, but not necessarily limited to, trade secrets, know-how and
information relating to the technology, customers, business plans, promotional
and marketing activities, finances and other business affairs of such Party).
AT&T's Confidential Information includes, among other things, the rates, terms
and conditions relating to AT&T's provision of Service to Customer.
12.2 Use and Disclosure. In the performance of or otherwise in connection
with this Agreement, any Party (the "Receiving Party") may receive certain
Confidential Information of the other Party (the "Disclosing Party"). The
Receiving Party, except as expressly provided in this Agreement, will not
disclose such Confidential Information to anyone without the Disclosing Party's
prior written consent. The Receiving Party will not use, or permit others to
use, Confidential Information for any purpose other than the purpose for which
it was disclosed. The Receiving Party will take all reasonable measures to
avoid disclosure, dissemination or unauthorized use of Confidential Information,
including, at a minimum, those measures it takes to protect its own confidential
information of a similar nature.
12.3 Exceptions. The provisions of Section 12.2 will not apply to any
information that (a) is or becomes publicly available without breach of this
Agreement, (b) can be shown by documentation to have been known to the Receiving
Party at the time of its receipt from the Disclosing Party, (c) is rightfully
received from a third Party who did not acquire or disclose such information by
a wrongful or tortious act, or (d) can be shown by documentation to have been
independently developed by the Receiving Party without reference to any
Confidential Information.
12.4 Disclosure to Governmental Entities. If the Receiving Party becomes
legally obligated to disclose Confidential Information to any governmental
entity with jurisdiction over it, the Receiving Party will give the Disclosing
Party prompt written notice sufficient to allow the Disclosing Party to seek a
protective order or other appropriate remedy. The Receiving Party will disclose
only such information as is required by the governmental entity and will use its
reasonable best efforts to obtain confidential treatment for any Confidential
Information that is so disclosed.
12.5 Ownership; Return. All Confidential Information will remain the
exclusive property of the Disclosing Party, and the Receiving Party will have no
rights, by license or otherwise, to use the Confidential Information except as
expressly provided herein. The Receiving Party promptly will return or destroy
all tangible material embodying Confidential Information (in any form and
including, without limitation, all summaries, copies and excerpts of
Confidential Information) upon the earlier of (a) the completion or termination
of the dealings between the Disclosing Party and the Receiving Party, and (b)
the Disclosing Party's written request.
9
<PAGE>
Section 13. Notices
All notices and other communications relating to this Agreement will be
made in writing and will be deemed to have been duly delivered, effective upon
receipt, if sent to the address set forth below each Party's signature.
Section 14. Assignment
Except as provided in this Section 14, neither Party may assign or transfer
this Agreement, or its rights or obligations hereunder, without the prior
written consent of the other Party. Either Party may assign this Agreement,
without the other's consent, to (a) any Affiliate of the assignor, or (b) any
person or entity that acquires the assignor or substantially all of the
assignor's business through any merger, consolidation or stock or asset
purchase; provided that the assignee agrees in writing to be bound by the
provisions of this Agreement. In addition, AT&T may assign certain of its rights
and obligations under this Agreement without Customer's consent.
Section 15. No Agency
AT&T and Customer are independent contracting Parties. This Agreement does
not create any partnership, joint venture or agency relationship between the
Parties.
Section 16. Marks
Customer recognizes the right, title and interest of AT&T, the CDPD Systems
and their respective Affiliates in and to all service marks, trademarks and
trade names used by any of them in connection with the Service (the "Marks").
Customer will not gain any rights to the Marks by virtue of this Agreement and
will not use any Marks without Company's prior written consent.
Section 17. General
17.1 State law/venue. This Agreement will be governed by the laws of the
State of Washington, without reference to its choice of law rules.
17.2 Attorneys' fees. In the event an action is commenced by either Party
to enforce the terms of this Agreement, the substantially prevailing Party in
such action shall be entitled to its reasonable costs and attorneys' and expert
witness' fees incurred therein and on any appeal thereof.
17.3 Entire agreement. This Agreement, together with its attached
Exhibits, sets forth the entire agreement between the Parties concerning the
subject matter hereof. Any amendment or modification to this Agreement will be
effective only if made in writing and signed by both Parties. Provided, however,
this Agreement shall be deemed automatically amended to the extent
10
<PAGE>
inconsistent with any federal, state or local law, regulation, court order or
tariff required to be filed by AT&T.
17.4 Waiver. The waiver of any provision or default of this Agreement
will not constitute a waiver of any other provision or default. If any provision
of this Agreement is deemed to be unenforceable, the remaining provisions will
remain in full force and effect.
17.5 Compliance with laws. AT&T and Customer shall at all times comply in
all material respects with all laws, rules and regulations applicable to the
performance of this Agreement.
The Parties have executed this Agreement on the date first above written.
GoAmerica AT&T Wireless Data, Inc.
By: /s/ Joseph Korb By: /s/ Anne Gant
------------------------------ ---------------------------
Title: Executive Vice President Title: V.P Marketing
--------------------------- ------------------------
Address: 401 Hackensack Ave, Address: 10230 N.E. Points Drive
-------------------------
Hackensack N.J. 07601 Kirkland, Washington 98033
------------------------- Attn:
------------------------- (With copy to General Counsel)
Attn: Joseph Korb
11
<PAGE>
EXHIBIT A
Application
GoAmerica is engaged in the business of providing wireless communication
services to end users for access to the World Wide Web and Intranets as well as
certain other services such as messaging and custom information services (the
"GoAmerica Service").
12
<PAGE>
EXHIBIT B
Service Area
Customer is authorized to provide the Service in the following MSAs:
Arizona: Phoenix*, Tucson*
- -------
California: Fresno, Sacramento, San Diego*, San Francisco*, San Jose*,
- ----------- Bakersfield*
Colorado: Denver
- --------
Connecticut: Bridgeport*, Hartford*, New Haven*, New London/Norwich*
- -----------
Delaware: Wilmington*, Dover*
- --------
Florida: Orlando, Tampa/St. Petersburg, West Palm Beach/Boca Raton
- ------- Miami/Ft. Lauderdale, Lakeland/Winter Haven*
Illinois: Chicago*
- --------
Indiana: Gary*, Indianapolis*
- --------
Kentucky: Louisville*
- ---------
Maryland: Baltimore*, Frederick*
- ---------
Massachusetts: Boston*, Worcester*
- -------------
Michigan: Detroit*
- ---------
Minnesota: Minneapolis/St. Paul
- ---------
Missouri: St. Louis*
- --------
Nevada: Las Vegas, Reno
- -------
New Hampshire: Manchester*
- --------------
New Jersey: Atlantic City*, Trenton*, Long Branch*, New Brunswick*,
- ----------- Ocean City*, Vineland
New Mexico: Albuquerque*, Las Cruces*
- -----------
New York: New York
- ---------
North Carolina: Charlotte*, Raleigh*
- ---------------
Ohio: Cincinnati*, Columbus*, Dayton*, Cleveland*, Akron*, Canton*
- -----
Oklahoma: Oklahoma City, Tulsa
- ---------
Oregon: Portland
- ------
Pennsylvania: Pittsburgh, Allentown*, Philadelphia*
- ------------
South Carolina: Columbia, Greenville*
- ---------------
Tennessee: Memphis*, Nashville*
- ---------
13
<PAGE>
Texas: Austin, Dallas/Ft. Worth, San Antonio, El Paso*, Houston*,
- ------ Galveston*
Utah: Salt Lake City
- -----
Virginia: Newport News*, Richmond*, Norfolk*
- ---------
Washington: Seattle/Everett, Tacoma
- -----------
Washington D.C.*
- ----------------
* These markets are available for Service through an intercarrier arrangement.
14
<PAGE>
EXHIBIT C
Service Plan
Certificates of Resale provided for the following states: New Jersey
- ---------------------------------------------------------
Interconnection: Interconnection between the parties' networks will be
- ---------------
implemented *****.
Access Fees*: $***** per month per activated Number. $***** per month per
- -------------
assigned, but not activated, Number. On an optional basis, Reseller may request
a block of network addresses prior to activation. AT&T will hold such addresses
in a pool until Reseller requests activation. During any month in which such
held Number is activated, only the $***** (or as discounted below) Access Fee
plus any applicable usage will be charged.
*Access Fee Discount:
- ---------------------
*As Customer's number of active Numbers, increases, the monthly access fee will
be reduced according to the following schedule:
Active Numbers Access Fee
***** $*****
***** $*****
***** $*****
***** $*****
Assignment Fee: A one time fee of $***** will be charged for every new Number.
- ---------------
This reflects Company's costs of providing personnel, systems, and completing
paperwork necessary to reserve Numbers to Reseller and to activate them.
Usage Charges**: $***** per kilobyte***
- ----------------
*** Any applicable discount for usage for any given month shall be credited on
the following month's bill.
**Usage Volume Discount:
- ------------------------
As Customer's average kilobyte usage per user increases, the price per kilobyte
will be reduced according to the following schedule. The first month of usage
for a newly activated user is not included in the calculation***:
*****Confidential portion omitted and filed separately with the Securities and
Exchange Commission.
15
<PAGE>
Average Monthly Kilobyte Usage Per Number Price per Kilobyte****
***** $*****
***** $*****
***** $*****
***** $*****
***** $*****
***** $*****
***** $*****
**** Note that usage in non-AT&T markets is not subject to the discount schedule
and will be charged at the rate of $***** per kilobyte, without exception.
Cancellation Fee: ***** will be assessed upon deactivation or deassignment of
- -----------------
Numbers.
Billing Guidelines for Calls.
- -----------------------------
1. General. AT&T will bill Customer on a monthly basis for Service
--------
furnished under this Agreement, including regular monthly Service charges and
usage charges for all data transmissions processed through the Number. Usage
charges include charges on a per kilobyte basis for transmissions that are sent
or received by Equipment programmed with a Number assigned to Customer. Usage
charges may also include charges for additional services offered by AT&T which
Customer may subscribe to at rates determined by AT&T from time to time.
2. Access Charges. Access charges are billed monthly in arrears.
---------------
Usage charges are billed monthly in arrears. If AT&T agrees to provide Service
features to Customer, Company reserves the right to charge a reasonable fee for
adding or deleting Service features.
3. Measurement. The measurement of a transmission is in kilobytes.
------------
4. Loss of Registration. Registration may be "lost" (i.e.,
---------------------
involuntarily disconnected) for a variety of reasons, including atmospheric
conditions, topography, weak batteries, system overcapacity, movement outside a
service area, and gaps in coverage within a service area. Loss of registration
may result in retransmissions and additional usage charges.
Minimum Number Requirements:
- ----------------------------
Customer shall maintain, within ***** of the date of this Agreement, a
minimum of ***** active Numbers.
*****Confidential portion omitted and filed separately with the Securities and
Exchange Commission.
16
<PAGE>
Failure to Meet Minimum Number Requirements. In the event Customer fails to
- --------------------------------------------
achieve the minimum Number requirements set forth in this Exhibit C for any
given *****, Customer shall pay to AT&T in addition to all other amounts due the
difference between Customer's actual Numbers and the required minimum Numbers
times the minimum monthly usage set forth in Exhibit C for each ***** in which
Customer fails to achieve such minimum. Continued failure to meet Minimum
Number Requirements shall give rise to AT&T's right to terminate under section
7.2.4
Promotional Tools: AT&T will provide Customer with up to ***** Numbers, at *****
- ------------------
*****, with ***** usage in AT&T markets, and up to ***** Numbers at a rate of
*****, with ***** ***** in AT&T markets. Usage outside of AT&T markets and all
taxes on usage relating to such Numbers will remain the responsibility of
Customer.
***** Confidential Portion omitted and filed separately with the Securities and
Exchange Commission.
17
<PAGE>
EXHIBIT D
End User Disclosures
1. [END USER] HAS NO PROPERTY RIGHT IN ANY NUMBER ASSIGNED TO IT.
2. [END USER] UNDERSTANDS THAT [CUSTOMER] IS AN AUTHORIZED
RESELLER OF AT&T WIRELESS PACKET DATA SERVICE.
3. [END USER] UNDERSTANDS AND AGREES THAT IT HAS NO CONTRACTUAL RELATIONSHIP
WHATSOEVER WITH AT&T WIRELESS SERVICES AND THAT [END USER] IS NOT A THIRD PARTY
BENEFICIARY OF ANY AGREEMENT BETWEEN [CUSTOMER] AND AT&T WIRELESS SERVICES.
4. [END USER] UNDERSTANDS AND AGREES THAT AT&T WIRELESS SERVICES WILL HAVE NO
LEGAL, EQUITABLE OR OTHER LIABILITY OF ANY KIND TO [END USER]. IN ANY EVENT,
AT&T WIRELESS SERVICES' TOTAL LIABILITY ARISING IN CONNECTION WITH THIS
AGREEMENT (REGARDLESS OF THE FORM OF THE ACTION) FOR ANY CAUSE WHATSOEVER
(INCLUDING BUT NOT LIMITED TO ANY FAILURE OR DISRUPTION OF THE CDPD SERVICE
PROVIDED HEREUNDER) IS LIMITED TO PAYMENT OF DAMAGES IN AN AMOUNT EQUAL TO THE
PROPORTIONATE FIXED MONTHLY CHARGE PAYABLE FOR SERVICES PROVIDED TO [END USER]
UNDER THIS AGREEMENT FOR THE PERIOD OF SERVICE DURING WHICH SUCH DAMAGES OCCUR.
5. UNLESS CAUSED BY THE NEGLIGENCE OF [CUSTOMER] OR AT&T WIRELESS SERVICES,
[END USER] WILL INDEMNIFY AND HOLD AT&T WIRELESS SERVICES (AND ITS AFFILIATED
COMPANIES AND ANY OF THEIR OFFICERS, EMPLOYEES AND AGENTS) HARMLESS AGAINST ALL
CLAIMS (INCLUDING, WITHOUT LIMITATION, CLAIMS FOR LIBEL, SLANDER, COPYRIGHT OR
PATENT INFRINGEMENT OR ANY PERSONAL INJURY OR DEATH) ARISING DIRECTLY OR
INDIRECTLY FROM [END USER'S] USE, FAILURE TO USE, OR INABILITY TO USE THE
NUMBERS ASSIGNED TO IT OR THE CDPD SERVICE. THIS INDEMNITY WILL SURVIVE THE
TERMINATION OF THIS AGREEMENT.
6. ALTHOUGH CDPD SERVICE USES AN ENCRYPTED TECHNOLOGY, AND THE LAWS GENERALLY
PROHIBIT THIRD PARTIES FROM MONITORING CELLULAR TRANSMISSIONS, AT&T WIRELESS
SERVICES CANNOT GUARANTY THE SECURITY OF DATA TRANSMISSIONS. NEITHER AT&T
WIRELESS SERVICES NOR ANY
18
<PAGE>
UNDERLYING CARRIER SHALL BE LIABLE FOR ANY LACK OF SECURITY RELATING IN ANY WAY
TO USE OF THE SERVICE OR [END USER'S] DATA TRANSMISSIONS.
7. [END USER] WILL NOT USE THE SERVICE TO TRANSMIT ANY COMMUNICATION WHERE THE
MESSAGE, OMITS TRANSMISSION OR DISTRIBUTION WOULD VIOLATE ANY LAW, COURT ORDER
OR REGULATION, OR WOULD LIKELY BE OFFENSIVE TO THE RECIPIENT OR RECIPIENTS
THEREOF.
8. [END USER] USES THE THE CONTENT ACCESSED BY THE CDPD SERVICE AT ITS OWN
RISK.
19
<PAGE>
July 28, 1998
Joe Korb
Executive Vice President and Director
Go America
401 Hackensack Avenue
Hackensack, NJ 07601
I want to take this opportunity to inform you of some positive changes and
additions we have made with our VAR Rate Plans. We have lowered our Standard
VAR Rate (SVR) plan to be more competitive with other network providers
offerings as well as to be consistent with our own retail pricing. We have also
added ***** plans, which hopefully will allow you to be more creative with your
pricing as well as drive higher margins.
To summarize the changes in the ***** plan, we have implemented the following:
*****
The additional rate plans that you can now take advantage of are as follows:
*****
The details around each of the existing and new rate plans follows.
I. *****
Monthly Access Fee: *****
- -------------------
Volume Discounts: As the volume of GO AMERICA's Numbers increases across all
rate plans, GO AMERICA will receive the following discounts. These discount
levels are the same and have not changed.
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
***** *****
- ------------------------------------------------------------------------
***** *****
- ------------------------------------------------------------------------
***** *****
- ------------------------------------------------------------------------
***** *****
- ------------------------------------------------------------------------
***** Confidential Portion omitted and filed separately with the Securities and
Exchange Commission.
20
<PAGE>
Usage Charges:
- --------------
In AT&T Markets: $***** per kilobyte*
In non-AT&T Markets: $***** per kilobyte
*Usage in AT&T markets during off-peak hours (weekends and from 7 p.m. to 7
a.m., Monday through Friday) qualify for a ***** discount.
II. *****
III. *****
Volume Discounts: As the volume of GO AMERICA's Numbers increases across all
- ----------------
rate plans, GO AMERICA will receive the following discounts. *****
* Volume discounts only apply to monthly access fees and not on usage fees.
***** Confidential Portion omitted and filed separately with the Securities and
Exchange Commission.
21
<PAGE>
IV. *****
Volume Discounts: As the volume of GO AMERICA's Numbers increases across all
- ----------------
rate plans, GO AMERICA will receive the following discounts. *****
V. *****
Volume Discounts: As the volume of GO AMERICA'S Numbers increases, GO AMERICA
will receive the following discounts. *****
* Volume discounts only apply to monthly access fees and not on usage fees.
***** Confidential Portion omitted and filed separately with the Securities and
Exchange Commission.
22
<PAGE>
The following items still apply for all VAR rate plans, including the new ones
described above.
Reservation Fee: GO AMERICA may request a block of network addresses be
- ---------------
reserved to it prior to activation. AT&T will hold such addresses in a pool
until GO AMERICA requests activation. GO AMERICA will be charged $*****, but
not activated, Number. During any month in which a reserved Number is activated,
GO AMERICA will be charged only the applicable Access Fee plus any applicable
usage, and will not be charged a Reservation Fee.
Assignment Fee: A onetime fee of ***** will be charged for every new Number at
- --------------
the earlier of the time of reservation or activation.
Cancellation Fee: No cancellation fee will be assessed upon deactivation or
- ----------------
deassignment of Numbers.
The new rate plans will be available starting August 1, 1998. If you plan to
make changes based on these changes and addition, please have to us list of IPs
that need to be changed with the requested rate plans by each.
You will also receive soon an updated Exhibit C to your VAR Agreement. If you
have no changes, please sign and return this to my attention.
As always, if you have any issues or concerns please give me a call.
John Russell
National VAR Account Manager
AT&T Wireless, Wireless Data Division
***** Confidential Portion omitted and filed separately with the Securities and
Exchange Commission.
23
<PAGE>
EXHIBIT 10.2
AIRBRIDGE PACKET SERVICE AGREEMENT
BETWEEN
BELL ATLANTIC NYNEX MOBILE
AND
GOAMERICA COMMUNICATIONS CORP.
<PAGE>
Contract No. *****
AIRBRIDGE(R) PACKET SERVICE AGREEMENT
This Service Agreement is entered into by and between GoAmerica Communications
Corporation, a New Jersey corporation, with a principal place of business
located at 401 Hackensack Avenue, Hackensack, NJ 07601 ("Customer") and Cellco
Partnership, a Delaware general partnership, by its managing general partner,
Bell Atlantic NYNEX Mobile, Inc. (hereinafter known as "BANM") with offices at
180 Washington Valley Road, Bedminster, New Jersey 07921 (the "Agreement").
WHEREAS, BANM is either licensed and authorized by the Federal
Communications Commission ("FCC") to provide cellular telecommunications
service, or manages on behalf of the FCC licensee pursuant to a management
agreement in the Area (defined below); and WHEREAS, the Customer wishes to
establish a mobile data communications system through a public packet switched
network in order to utilize the system for data communication by Customer and/or
its Authorized Users (defined below); and
WHEREAS, BANM has the capability to provide Cellular Digital Packet Data
("CDPD") Service, known as AirBridge(R) Packet Service; and
WHEREAS, Customer wishes to obtain such AirBridge(R) Packet Service from
BANM in the Area; and
WHEREAS, BANM wishes to make available AirBridge(R) Packet Service to
Customer on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein and intending to be legally bound, the parties agree as
follows:
TERMS
1. DEFINITIONS.
-----------
As used herein the following terms shall have the following respective meaning:
Area. The markets listed in Exhibit A within which BANM either is licensed
----
and authorized by the FCC to provide commercial mobile service, or manages on
behalf of the FCC licensee pursuant to a management agreement and in which BANM
currently provides or may provide AirBridge Packet Service.
Authorized User. Individuals or companies authorized by Customer to use
---------------
the System established by Customer.
Cellular Digital Packet Data Service ("CDPD"). Cellular radio service
---------------------------------------------
utilizing packet switching technology to transmit data over radio frequency
channels. The raw data rate of CDPD is 19.2 Kilobits per second. It is a
connectionless multi-protocol network service providing peer network wireless
extension to existing data networks.
Customer. Customer is GOAmerica Communications Corporation.
--------
***** Confidential Portion omitted and filed separately with the Securities and
Exchange Commission.
<PAGE>
Equipment Identifier (EID). An electronic serial number "burned" into
--------------------------
a CDPD radio modem at the time of manufacture.
Fixed End System (FES). A host computer(s) operated by or on behalf of
----------------------
Customer.
Kilobyte. A kilobyte is 1000 octets of data, measures at the IP packet
--------
layer. IP header and data octets are included in the kilobyte count.
Mobile Data Base Station ("MDBS"). The unit located at BANM cell sites
---------------------------------
which serves as the data link relay point. The MDIS communicates with
each MES through the MDBS.
Mobile Service Area. Market areas or combinations of Market areas which
-------------------
Company establishes to provide Commercial Mobile service.
Mobile Data Intermediate Systems ("MDIS"). The component of the AirBridge
-----------------------------------------
Packet Service network which performs routing and which contains the
network control functions, including the mobility manager, registration and
authentication functions.
Mobile End System ("MES"). A data terminal, CDPD radio modem, and antenna.
-------------------------
Network Entity Identifier ("NEI"). A network address assigned to the
---------------------------------
MES. Each MES has an NEI and a unique corresponding EID for authentication
purposes.
Packet. The continuous sequence of binary digits of information, which is
------
routed through the AirBridge Packet Service network as an integral
unit. Packet sizes can be flexible within a range of "0" user bytes to a
maximum of "2048" bytes.
Service. The Airbridge Packet Service provided pursuant to this Agreement.
-------
2. PROVISION OF SERVICE.
--------------------
BANM hereby undertakes to provide the Service to Customer in order for the
Customer and/or its Authorized Users to transmit and receive data over the
Service network in the Area, pursuant to the terms and conditions specified
in this Agreement. Customer shall purchase CDPD service ***** from BANM or
its affiliates which provide such Service in the Area. BANM will issue
***** to customers NEIs. All such NEI assignments shall be made in
accordance with the CDPD Network Information Center policies in effect from
time to time. Customer has no property rights or interest in the NEI or IP
address assigned to its equipment. Rights in the NEIs and IP addresses
shall remain the property of BANM.
3. PRICING.
-------
The rate for Service provided by BANM is set forth in Exhibit B. The
availability of such rate is restricted to the applications set forth in
Exhibit B. In the event the Customer has selected and is purchasing
equipment through BANM the terms of payment and price of such equipment are
set forth in Exhibit B. *****
4. INSTALLATION.
------------
At Customer's request, BANM will provide and/or arrange for installation
services of MES equipment in the Area. The rate for such installation
services will be negotiated on a case by case basis and will be included in
a separate attachment to this Agreement.
***** Confidential Portion omitted and filed separately with the Securities and
Exchange Commission.
2
<PAGE>
5. COMMITMENT OF CUSTOMER.
----------------------
Customer shall, unless otherwise agreed upon in writing and in advance, at
its sole expense:
(i) purchase and maintain any equipment that Customer and/or its
Authorized Users may require to communicate with the Service network;
and
(ii) establish and maintain facilities or services for connecting
Customer's and/or its Authorized Users' networks or host processors to
the Service network (such as private line connections and/or frame
relay service); and
(iii) maintain at its sole expense and option all MES's and ensure
that each is technically and operationally compatible with the Service
network and is in compliance with applicable state and federal laws,
rules, and regulations; and
(iv) procure any other items or services, including, but not limited
to, any applications software or professional services that may be
required by Customer and/or its Authorized Users in connection with
the Service and/or this Agreement; and
(v) submit a completed copy of the form entitled, "Air-Bridge
Packet Service Request Form", attached hereto as Exhibit C, for
modification, addition or deletion of NEIs/EIDs during the term of
this Agreement; and
(vi) pay and hereby guarantees the payment of all invoices presented
by BANM under the terms of this Agreement.
(vii) provide the following to its end users:
(1) technical help desk support during normal working hours
of a five (5) day week.
(2) thorough training of the host and mobile systems.
(3) successful installation of host software and hardware
with back end connectivity.
(4) successful installation of mobile software and hardware
with wireless connectivity.
(5) successful configuring of all software and hardware to
BANM Network specifications.
(6) submission of necessary information to BANM to receive
IP Address.
(viii) subscribe to a minimum of ***** NEIs during the term of this
Agreement as shown in Exhibit B.
6. AVAILABILITY OF THE SERVICE.
---------------------------
The Service is available for Customer and/or its Authorized Users who are
equipped for the Service when they are within the range of cell sites
providing the Service. BANM will make good faith efforts to have scheduled
outages during off-peak hours.
6.1 The Service is subject to transmission limitations caused by
atmospheric and like conditions. The Service may be temporarily
interrupted or curtailed due to government regulations, suspected
fraudulent activities, equipment modifications, upgrades, relocations,
repairs and similar activities necessary or appropriate for the proper or
improved operation of the Service.
***** Confidential Portion omitted and filed separately with the Securities and
Exchange Commission.
3
<PAGE>
6.2 The Service, although encrypted, is capable of being intercepted
without knowledge of or permission from Customer by unauthorized third
parties possessing certain types of devices or equipment.
7. TARIFF FILINGS.
--------------
This Agreement and performance hereunder are subject to any required State
and Federal regulatory filings. Where required, BANM shall commence the
process for submission of any such filings upon execution of this
Agreement.
8. BILLING.
-------
BANM will provide Customer with a monthly invoice for the Service provided
under this Agreement.
8.1 The invoice will identify charges in accordance with Exhibit B. Terms
of payment shall be net thirty (30) days from the date of the invoice.
8.2 Undisputed payments received more than thirty (30) days after the date
of the invoice will incur a late payment charge in the amount of the
greater of one and one-half percent (1 1/2%) of the unpaid balance or the
applicable limit (if any) set by law for each month or fraction thereof
that such balance shall remain unpaid.
8.3 Customer will reimburse BANM for court costs, attorney's fees, costs
of investigation or collection and similar expenses incurred by BANM in the
enforcement of any right or privilege hereunder.
8.4 BANM may verify and/or reverify Customer's credit rating at any time
and BANM may require Customer at any time to make a suitable deposit that
BANM shall hold as guarantee of the payment of charges. Upon termination
of Service, BANM may apply Customer's deposit against Customer's bill for
all charges.
9. LIMITATION OF LIABILITY.
-----------------------
9.1 IN NO EVENT SHALL BANM BE LIABLE TO CUSTOMER, ITS AUTHORIZED USERS, OR
EMPLOYEES AND/OR AGENTS OF EITHER OF THEM, OR ANY THIRD PARTY, FOR ANY
INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, PUNITIVE DAMAGES, OR LOST
PROFITS OR ANY CLAIM OR DEMAND OF ANY NATURE OR KIND, INCLUDING, BUT NOT
LIMITED TO, USE OR INABILITY TO USE/ACCESS THE SERVICE, INCLUDING, BUT NOT
LIMITED TO, RELIANCE BY CUSTOMER AND/OR AN AUTHORIZED USER ON ANY DATA
OBTAINED THROUGH USE OF THE SERVICE, ANY INTERRUPTION, DEFECT, ERROR, VIRUS
OR DELAY IN OPERATION OR TRANSMISSION, ANY FAILURE TO TRANSMIT OR ANY LOSS
OF DATA, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR THE
PERFORMANCE OR BREACH THEREOF.
9.2 NOTWITHSTANDING THE FOREGOING, BANM SHALL DEFEND ANY SUIT OR
PROCEEDING BROUGHT AGAINST CUSTOMER TO THE EXTENT THAT SUCH SUIT OR
PROCEEDING IS BASED ON A CLAIM THAT THE SERVICE FURNISHED TO CUSTOMER BY
BANM UNDER THIS AGREEMENT CONSTITUTES AN INFRINGEMENT OF ANY PATENT,
COPYRIGHT OR TRADE SECRET OR A VIOLATION OF ANY FEDERAL OR OTHER LICENSE OR
4
<PAGE>
FRANCHISE REQUIRED TO BE MAINTAINED IN ORDER TO PROVIDE SUCH SERVICE;
PROVIDED, HOWEVER, THAT CUSTOMER SHALL GIVE BANM PROMPT NOTICE IN WRITING
OF SUCH SUIT OR PROCEEDING, BANM SHALL HAVE COMPLETE CONTROL OF THE
DEFENSE, AND CUSTOMER SHALL PROVIDE ANY INFORMATION AND ASSISTANCE
REASONABLY REQUESTED BY BANM (AT BANM'S EXPENSE). BANM SHALL PAY ALL
DAMAGES AND COSTS FINALLY AWARDED THEREIN AGAINST CUSTOMER, BUT BANM SHALL
NOT BE RESPONSIBLE FOR ANY COMPROMISE MADE WITHOUT ITS CONSENT.
10. DISCLAIMER OR WARRANTIES.
-------------------------
10.1 DUE TO THE POSSIBILITY OF ERRORS INCIDENT IN THE USE OF CDPD, THE
SERVICE FURNISHED BY BANM IS SUBJECT TO THE TERMS, CONDITIONS AND
LIMITATIONS SPECIFIED HEREIN. BANM MAKES NO WARRANTY, EITHER EXPRESS OR
IMPLIED, CONCERNING THE SERVICE, INCLUDING WITHOUT LIMITATION, WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE OR USE.
10.2 CUSTOMER ACKNOWLEDGES IT HAS SELECTED CUSTOMER'S SOFTWARE AND/OR
EQUIPMENT (INCLUDING EQUIPMENT THAT MAY BE PURCHASED BY CUSTOMER THROUGH
BANM). BANM HAS MADE AND MAKES NO REPRESENTATIONS OR WARRANTIES
WHATSOEVER, DIRECTLY OR INDIRECTLY, EXPRESS OR IMPLIED, AS TO THE
SUITABILITY, DURABILITY, FITNESS FOR PARTICULAR PURPOSE OR USE,
MERCHANTABILITY, CONDITION OR QUALITY OF THE CUSTOMER SELECTED EQUIPMENT
AND/OR SOFTWARE. BANM SHALL NOT BE LIABLE TO CUSTOMER AND/OR ANY AUTHORIZED
USER FOR ANY LOSS, DAMAGE OR EXPENSE OF ANY KIND OR NATURE CAUSED DIRECTLY
OR INDIRECTLY BY THE CUSTOMER SELECTED EQUIPMENT AND/OR SOFTWARE, OR BY THE
USE OR MANUFACTURE THEREOF, OR BY ANY REPAIR, SERVICE OR ADJUSTMENT THERETO
OR BY ANY INTERRUPTION OF SERVICE OR LOSS OF USE THEREOF, OR FOR ANY LOSS
OF BUSINESS OR DAMAGE WHATSOEVER AND HOWSOEVER CAUSED. TO THE EXTENT
PERMITTED, BANM AGREES TO ASSIGN TO CUSTOMER ANY OF THE EQUIPMENT
MANUFACTURER'S WARRANTIES RECEIVED BY BANM WITH RESPECT TO THE CUSTOMER
SELECTED EQUIPMENT.
11. CREDIT FOR OUTAGES.
-------------------
No credit or adjustment will be made for interruptions of the Service
unless the interruption continues for a period of twenty-four (24) hours or
more, measured from the time the interruption is reported to BANM by
Customer. In the event of an interruption of the Service that continues for
a period of twenty-four (24) hours or more, credit allowance will be made,
at Customer's request, for a pro-rata amount not to exceed the minimum
charge per NEI for that month for each NEI rendered inoperative by the
interruption. The credit shall be available only where the interruption is
in no part due to the acts or omissions of Customer or an Authorized User
whether negligent or otherwise or by interruptions caused by failure of
equipment or service not provided by BANM.
5
<PAGE>
The foregoing credit shall be the sole and exclusive remedy to Customer
and/or Authorized User for any interruption of the Service. In order to be
eligible for any such credit, Customer must request the credit within sixty
(60) days of the commencement of the interruption.
12. USE OF THE SERVICE.
------------------
12.1 The Service furnished hereunder is for use only by Customer or its
Authorized Users.
12.2 Customer will be liable for all usage and administrative, financial
charges and any other losses, damages, charges or expenses arising from or
out of the fraudulent use of Service, including unauthorized use resulting
from or attributable to Customer and/or its Authorized Users. The parties
will actively cooperate in order to minimize the fraudulent or other
unauthorized use and subsequent abuse of the Service provided by BANM.
13. USE OF MARKS.
------------
13.1 Customer shall not, directly or indirectly, hold itself out as or
otherwise create the impression that it is sponsored, authorized, endorsed
by, affiliated with, or an agent of BANM or an affiliate thereof.
Additionally, Customer shall not use the name "Bell Atlantic NYNEX Mobile",
"Bell Atlantic", "NYNEX" or any mark used by BANM, Bell Atlantic or NYNEX
or any of their affiliates, or any colorable imitation thereof, in or as
part of any company name or trade name or in any other confusing or
misleading manner, without the prior written consent of BANM. Nothing
contained in this Agreement is intended to convey a license to use any such
trademarks, service marks or trade names.
14. INDEMNIFICATION.
---------------
(a) Customer shall defend, indemnify, and save harmless BANM and its
successors and assigns and its employees and agents and their heirs, legal
representatives and assigns from any and all claims or demands whatsoever,
including the costs, expenses and reasonable attorney's fees incurred on
account thereof, that may be made by any person, specifically including,
but not limited to, employees of the Customer, including, but not limited
to, claims for bodily injury (including death to persons) or damage to
property (including theft) occasioned by or alleged to have been occasioned
by the acts or omissions of Customer, its employees or persons furnished by
the Customer whether negligent or otherwise.
(b) Customer shall defend BANM at BANMs request, against any such
liability, claim or demand. The foregoing indemnification shall apply
whether Customer or BANM defends such suit or claims. BANM agrees to
notify Customer promptly of any written claim or demands against BANM for
which Customer is responsible hereunder.
15. TERM OF AGREEMENT.
------------------
15.1 This Agreement shall be effective when executed by an authorized
representative of BANM ("Effective Date"). The term of this Agreement
shall be ***** from the Effective Date. This Agreement shall automatically
renew for additional ***** ***** terms unless either party provides at
least ***** written notice prior to the expiration thereof of its
intention not to renew this Agreement.
***** Confidential Portion omitted and filed separately with the Securities and
Exchange Commission.
6
<PAGE>
16. TERMINATION OF THE SERVICE.
--------------------------
16.1 Upon nonpayment of any sum due BANM, or upon a violation by Customer
of any of the provisions of this Agreement, BANM may give Customer written
notice of such nonpayment and/or violation. If Customer fails to rectify
the nonpayment or the violation within thirty (30) days of being given such
written notice, then BANM may immediately, without incurring any liability,
temporarily discontinue or interrupt the furnishing of the Service to
Customer.
16.2 Should Customer or its Authorized User's MES's be used with the
Service provided by BANM in violation of any of the provisions of this
Agreement, BANM may, immediately upon written notice to Customer, without
-------------------------------
incurring any liability, take such action as it may reasonably determine is
necessary or appropriate for the provision of the Service to its Customers.
Customer shall effect the discontinuance of any use of MES that is in
violation of this Agreement immediately upon notice to it of the violation,
and shall confirm in writing to BANM within five (5) business days that
such use has been discontinued. BANM may, in sole discretion, choose to
restore service to the MES in question when Customer has complied with the
provisions of this Section 17.2.
17. TERMINATION OF AGREEMENT.
------------------------
17.1 Upon Default by Customer under this Agreement, of which Customer has
been given written notice, and which Customer has not cured within thirty
(30) days of such written notice BANM may, without incurring any liability,
immediately terminate this Agreement.
17.2 For purposes of this Section 17, "Default" shall be defined as:
-------
17.2.1 Failure by Customer to pay any charge when due (i.e. within thirty
(30) days of date of invoice) or to perform or observe any term or
condition of this Agreement; or
17.2.2 Institution by the Customer of any proceeding in bankruptcy,
reorganization, or insolvency; institution against Customer of any
proceeding in bankruptcy, reorganization, or insolvency that is acquiesced
to or not dismissed within ninety (90) days; appointment of a receiver for
any substantial part of Customer assets; the making of an assignment for
the benefit of creditors or an admission in writing of Customer of its
inability to pay its debts as they mature.
17.3 Customer can terminate on notice and the buyout will be equal to the
$***** monthly access charge times the ***** line minimum, times the months
remaining in the original term.
18. PROPRIETARY AND CONFIDENTIAL INFORMATION.
----------------------------------------
In connection with BANM's provision of the AirBridge(SM) Services, certain
confidential and proprietary, technical, financial or business information
may be disclosed by either party. The term "Information," as used in this
Agreement includes all specifications, drawings, sketches, models, samples,
reports, plans, forecasts, current or historical data, computer programs or
documentation and all other technical, financial or business data.
"Proprietary and/or Confidential Information" is defined as Information
which is in the possession of the Disclosing Party, is not generally
available to the public, and which the Disclosing Party desires to protect
against unrestricted disclosure or competitive use. All Information which
is disclosed by the Disclosing Party to the Receiving Party and which
***** Confidential Portion omitted and filed separately with the Securities and
Exchange Commission.
7
<PAGE>
is to be protected hereunder as Proprietary and/or Confidential Information
of the Disclosing Party shall:
a. if in writing or other tangible form, be conspicuously labeled as
proprietary, confidential or the like at the time of delivery; and
b. if oral, be identified as Proprietary and/or Confidential Information
prior to disclosure and be reduced to a writing labeled as indicated
in (a) above within fifteen (15) business days after its disclosure.
The Disclosing Party shall have the right to correct any inadvertent
failure to designate Information as Proprietary and/or Confidential
Information as set forth above by written notification as soon as
practical (but in no event later than five (5) business days) after
such error is determined. After receiving said notification, the
Receiving Party shall from that time forward treat such Information as
Proprietary and/or Confidential Information.
c. With respect to Proprietary and/or Confidential Information provided
under this Agreement, the Receiving Party shall during the term of
this Agreement:
(1) hold the Proprietary and/or Confidential Information in strictest
confidence; and
(2) restrict disclosure and/or use to solely those employees of the
Receiving Party with a need to know and not disclose it to any
other parties; and
(3) advise those employees of their obligations with respect to the
Proprietary and/or Confidential Information and use the
Proprietary and/or Confidential Information only for the purposes
hereunder except as may otherwise be mutually agreed upon in
writing.
d. Any Information disclosed by the Disclosing Party to the Receiving
Party which the Disclosing Party holds subject to an obligation of
confidence to a third party, shall be subject to the same level of
protection as Proprietary and/or Confidential Information of the
Disclosing Party, provided the Disclosing Party advises the Receiving
Party of the confidential nature of such third party Information.
e. Neither party shall have an obligation to preserve the proprietary
nature of any Information which:
(1) was previously known to the Receiving Party free of any
obligation to keep confidential; or
(2) is disclosed to third parties by the Disclosing Party without
restriction; or
(3) is or becomes publicly available by other than unauthorized
disclosure; or
(4) is independently developed and so documented by the Receiving
Party; or
(5) which the Receiving Party is required to disclose pursuant to a
current law, regulation, or ordinance or a valid order of a court or
other governmental body or any political subdivision thereof;
provided, however, that the recipient of the Proprietary Information
shall first have given notice to the Disclosing Party and gives the
Disclosing Party a reasonable opportunity to make a reasonable effort
to obtain a protective order requiring that the Proprietary
Information and/or
8
<PAGE>
documents so disclosed be used only for the purposes for which the
order was issued.
f. All Information shall be deemed the property of the Disclosing Party.
Upon request the Receiving Party shall return all Information in tangible
form to the Disclosing Party or destroy all such Information.
g. Upon discovery of any disclosure by the Receiving Party, its agents,
employees, consultants or contractors, of any Proprietary and/or
Confidential Information, Receiving Party shall notify the Disclosing Party
and, at its own expense, take all steps necessary to prevent any further
disclosure of Proprietary and/or Confidential Information in violation of
this Agreement.
h. Nothing contained in this Agreement shall be construed as granting or
conferring any rights by license or otherwise in any Information disclosed
to the Receiving Party.
19. MISCELLANEOUS.
-------------
19.1 Entire Agreement; Amendment. This Agreement and the attached Exhibits
---------------------------
constitute the entire agreement between the parties with respect to the
provision of the Service and associated services and supersede all prior
agreements, proposals, and understandings, whether written or oral. Any
modification or waiver of any provision of this Agreement must be in
writing and signed by authorized representatives of the parties.
19.2 Severability. If any provision, or portion thereof, of this Agreement
------------
is invalid or unenforceable under applicable statute or rule of law, it is
only to that extent to be deemed omitted, and such unenforceability shall
not affect any other provision of this Agreement, but this Agreement shall
then be construed as if such unenforceable provision or provisions had
never been contained herein.
19.3 Independent Contractor. No party nor its employees or agents shall be
----------------------
deemed to be employees or agents of the other party, it being understood
that each party is an independent contractor for all purposes and at all
times, and each party shall be wholly responsible for withholding and
payment of all federal, state, and local income and other payroll taxes
with respect to its employees, including contribution from them as required
by law.
19.4 Waiver. The failure by Customer or BANM at any time to enforce any of
------
the provisions of this Agreement or any right with respect thereto, will in
no way be construed to be a waiver of such provisions or rights or in any
way to affect the validity of this Agreement. The exercise by a party of
any rights under the terms or provisions of this Agreement shall not
preclude or prejudice the exercising thereafter of the same or any other
right.
19.5 Governing Law. Subject to any tariffs on file with any state or
-------------
federal regulatory body, this Agreement shall be governed by the law of the
State of New Jersey regardless of any conflicts of laws or rules which
would require the application of the laws of another jurisdiction.
19.6 Notices. Any notice to be given hereunder by either party to the
-------
other shall be in writing and shall be valid and sufficient if dispatched
by: a) registered or certified mail,
9
<PAGE>
postage prepaid in any post office in the United States; b) hand delivery;
or c) overnight courier prepaid.
Notices to BANM shall be addressed to:
Bell Atlantic NYNEX Mobile
180 Washington Valley Road
Bedminster, New Jersey 07921
Attention: GM Product Management
with a copy to Legal Dept - same address
Notices to Customer shall be addressed to:
GOAmerica Communications Corporation
Hackensack Avenue
Hackensack, NJ 07601
Attention:
If either party changes its address during the term hereof, it shall so
advise the other party in writing and any notice thereafter required to be
given shall be sent by certified mail to such new address.
19.7 Captions. The captions in this Agreement are for convenience only and
--------
shall not be construed to define or limit any of the terms herein.
19.8 Publicity and Advertising. Without the prior written consent of the
-------------------------
other party, no party hereto will disclose to any person the terms and
conditions of this Agreement, except as may be required by law and then
only in compliance with Section 19.3(e). Customer shall submit to BANM all
advertising, sales promotion, press releases and other publicity matters
relating to the Service furnished by BANM under this Agreement wherein
BANM's name or marks is mentioned or language from which the connection of
said names or marks therewith may be inferred or implied. Customer shall
not publish or use such advertising, sales promotion, press releases, or
publicity matters without BANM's prior written approval.
19.9 Assignment. Any assignment of this Agreement, in whole or in part or
----------
any other interest hereunder without BANM's prior written consent shall be
void which consent shall not be unreasonably withheld. It is further
agreed that BANM upon written notice to Customer, may assign this
Agreement, in whole or in part, or any of its rights, duties and
obligations under this Agreement to its parent, an affiliate or affiliates
of BANM, or to a partnership or partnerships in which BANM its parent or an
affiliate has an BANM interest. This Agreement shall benefit and be
binding upon the parties hereto and their respective successors and
permitted assigns.
19.10 Authorized Signatures. BANM and Customer each represent that the
---------------------
individual signing this Agreement on its behalf has the power and authority
to enter into this Agreement and that this Agreement constitutes a valid
and binding obligation of each party.
19.11 Compliance with Laws. Both parties shall comply with all applicable
--------------------
local, state, and federal regulations, laws, ordinances, rules, and
decisions.
19.12 Acts of God. In no event shall either party have any liability for
-----------
any failure to comply with this Agreement, if such failure results from the
occurrence of any
10
<PAGE>
contingency beyond the reasonable control of such party, including without
limitation, the cellular provider serving a particular area, strike or
other labor disturbance, riot, theft, flood, fire, lightning, storm, any
act of God, power failure, war, national emergency, interference by any
government or governmental agency, embargo, seizure, or enactment of any
law, statute, ordinance, rule or regulation.
11
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives.
CELLCO PARTNERSHIP
By Bell Atlantic NYNEX Mobile, Inc., GOAMERICA COMMUNICATIONS
its managing general partner CORPORATION
/s/ Cynthia J. White /s/ Aaron Dobrinsky
By: _________________________________ By: _____________________________
Name: Cynthia White Aaron Dobrinsky
Name: ___________________________
Title: Executive Vice President & COO
Title: President
May 13, 1997
Date: _______________________________ May 12, 1997
Date: ___________________________
12
<PAGE>
EXHIBIT A
This Exhibit A sets forth the Area(s), as that term is used in this Agreement,
in which BANM is authorized to provide CRS as described in this Agreement. In
this Exhibit there is described the individual counties of the MSA's and/or
RSA's in which BANM is authorized to conduct its CRS operations
1. (a) COUNTIES OF THE MSA(s) IN WHICH BANM IS LICENSED:
Bronx NY, Kings NY, New York NY, Queens NY, Richmond NY, Putnam NY,
Rockland NY, Westchester NY, Bergen NJ, Nassau NY, Suffolk NY, Essex
NJ, Morris NJ, Somerset NJ, Union NJ, Hudson NJ and Passaic NJ of the
New York MSA; Bucks PA, Chester PA, Delaware PA, Montgomery PA,
Philadelphia PA, Burlington NJ, Camden NJ and Gloucester NJ of the
Philadelphia MSA; Essex MA, Middlesex MA, Plymouth MA, Suffolk MA and
Rockingham NH of the Boston MSA; District of Columbia, Charles MD,
Montgomery MD, Prince Georges MD, Alexandria City VA, Fairfax City VA,
Falls Church City VA, Manassas City VA, Manassas Park City VA,
Arlington VA, Fairfax VA, Loudoun VA and Prince William VA of the
Washington DC MSA; Allegheny PA, Beaver PA, Washington PA and
Westmoreland PA of the Pittsburgh MSA; Baltimore City MD, Anne Arundel
MD, Baltimore MD, Carroll MD, Harford MD and Howard MD of the
Baltimore MSA; Hartford CT, Middlesex CT and Tolland CT of the
Hartford MSA; New Haven CT of the New Haven MSA; Madison NY, Worcester
MA of the Worcester MSA; Lackawanna PA, Carbon PA, Lehigh PA,
Northampton PA and Warren NJ of the Allentown MSA; Charles City VA,
Chesterfield VA, Goochland VA, Hanover VA, Henrico VA, Gaston NC,
Meklenburg NC and Union NC of the Charlotte MSA; Middlesex NJ of the
New Brunswick MSA; Hampden MA and Hampshire MA of the Springfield MSA;
Greenville SC, Pickens SC and Spartanburg SC of the Greenville MSA;
New Castle DE, Salem NJ and Cecil MD of the Wilmington MSA; Monmouth
NJ of the Long Branch MSA; Bristol MA of the New Bedford MSA;
Lexington SC and Richland SC of the Columbia MSA; Gloucester VA,
Hampden City VA, James City VA, Poquoson City VA, Berks PA of the
Reading MSA; Mercer NJ of the Trenton MSA; Hillsborough NH of the
Manchester MSA; Atlantic NJ and Cape May NJ of the Atlantic City MSA;
Orange NY of the Orange County MSA; Dutchess NY of the Poughkeepsie
MSA; New London CT of the New London MSA; Alexander NC, Burke NC and
Catawba NC of the Hickory MSA; Berkshire MA of the Pittsfield MSA;
Anderson SC of the Anderson MSA; Cumberland NJ of the Vineland MSA;
Warren NY and Washington NY of the Glen Falls MSA; Chittenden VT and
Grand Isle VT of the Burlington MSA.
(b) COUNTIES OF THE RSA(s) IN WHICH BANM IS LICENSED:
Hunterdon in NJ 1-HUNTERDON; Ocean in NJ 2-OCEAN; Sussex in NJ 3-
SUSSEX; Kent and Sussex in DE 1-KENT; Kent, Queen Annes, Talbot,
Caroline, Dorchester, Wicomico, Somerset, Calvert, St. Marys, and
Worcester in MD 2-KENT; Frederick in MD 3-FREDERICK; Lee, Wise,
Dickenson, Buchanan,
13
<PAGE>
Russell and Norton City in VA 1-LEE; Frederick, Clark, Shenandoah,
Page, Rappahannock, Fauquier, Warren and Winchester City in VA 10-
FREDERICK (B1); Mason, Jackson, Roane, and Calhoun in WV 1-MASON;
Wetzel, Tyler, Doddridge, Ritchie, Gilmer, Lewis, Pleasants in WV 2-
WETZEL; McKean, Camerom, and Elk in PA 2-MCKEAN; Butler, Clarion,
Lawrence and Armstrong in PA 6-LAWRENCE (B2); Indiana, Jefferson and
Clearfield in PA 7- JEFFERSON; Greene and Fayette in PA 9-GREENE;
Huntingdon, Juniata and Mifflin in PA 11-HUNTINGDON; Windham in CT 2-
WINDHAM; Newport in R11-NEWPORT; Cherokee, Clay, Graham, Macon, Swain,
Haywood, Jackson and Transylvania in NC 1-CHEROKEE; Anson, Montgomery,
Richmond, Scotland in NC 5-ANSON; Cabarrus, Stanly, Rowan, Iredell,
and Davie in NC 15-CABARRUS; Laurens, Greenwood, McCormick, Edgefield,
Saluda, Newberry and Abbeville in SC 2-LAURENS; Calhoun, Orangeburg,
Barnwell, Bamberg and Allendale in SC 7-CALHOUN; Oconee in SC 1-
OCONEE; Cherokee, Chester, Union and Fairfield in SC 3-CHEROKEE;
Lancaster and York in SC 9-LANCASTER; Barnstable, Dukes and Nantucket
in MA 2-BARNSTABLE; Carroll, Belknap and Merrimack in NH 2-CARROLL;
Franklin, Orleans, Essex, Lamoille, Washington, Caledonia and Orange
in VT 1-FRANKLIN; Addison, Rutland, Windsor, Bennigton and Windham in
VT 2-ADDISON; Dawson, Lumpkin, White, Habersham, Hall, Banks,
Franklin, Stephens, Rabun, Barrow in GA 2-DAWSON.
14
<PAGE>
EXHIBIT B
PRICE SCHEDULE
***** Access Fee $***** per NEI
Kilobyte Rate - in BANM markets $*****/kb
Kilobyte Rate - out of BANM markets $*****/kb
<TABLE>
<CAPTION>
Minimum Unit Commitment
- ------------------------------------------------------------------------------------------------
Bill Cycle Committed Minimum Units Absolute Minimum Revenue
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
- ------------------------------------------------------------------------------------------------
1 ***** *****
- -------------------------------------------------------------------------------------------------
2 ***** *****
- -------------------------------------------------------------------------------------------------
3 ***** *****
- -------------------------------------------------------------------------------------------------
4 ***** *****
- -------------------------------------------------------------------------------------------------
5 ***** *****
- -------------------------------------------------------------------------------------------------
6 ***** *****
- -------------------------------------------------------------------------------------------------
7 ***** *****
- -------------------------------------------------------------------------------------------------
8 ***** *****
- -------------------------------------------------------------------------------------------------
9 ***** *****
- -------------------------------------------------------------------------------------------------
10 ***** *****
- -------------------------------------------------------------------------------------------------
11 ***** *****
- -------------------------------------------------------------------------------------------------
12 ***** *****
- -------------------------------------------------------------------------------------------------
13 ***** *****
- -------------------------------------------------------------------------------------------------
14 ***** *****
- -------------------------------------------------------------------------------------------------
15 ***** *****
- -------------------------------------------------------------------------------------------------
16 ***** *****
- -------------------------------------------------------------------------------------------------
17 ***** *****
- -------------------------------------------------------------------------------------------------
18 ***** *****
- -------------------------------------------------------------------------------------------------
19 ***** *****
- -------------------------------------------------------------------------------------------------
20 ***** *****
- -------------------------------------------------------------------------------------------------
21 ***** *****
- -------------------------------------------------------------------------------------------------
22 ***** *****
- -------------------------------------------------------------------------------------------------
23 ***** *****
- -------------------------------------------------------------------------------------------------
24 ***** *****
- -------------------------------------------------------------------------------------------------
Total *****
- -------------------------------------------------------------------------------------------------
</TABLE>
* Actual units in service on last day, of bill cycle is compared to the
minimum, and if actual is less than the minimum, an additional charge of
$***** x (******* - actual) is added to the bill.
*****Confidential Portion omitted and filed separately with the Securities and
Exchange Commission
15
<PAGE>
EXHIBIT C
AirBridge(R) Packet Service Request Form
Please fax requests to Jeffrey Pazkiewicz or Patrick Aanstoots at 908-658-4889
<TABLE>
<CAPTION>
Contract Number __________________________ Date ________________________________
Customer Number __________________________ Quantity ________________________________
<S> <C> <C> <C>
MDIS EID's NEI's Activation/Deactivation Date
_______ 1._____________ 1._____________ 1.________________________________
2._____________ 2._____________ 2.________________________________
3._____________ 3._____________ 3.________________________________
4._____________ 4._____________ 4.________________________________
5._____________ 5._____________ 5.________________________________
MDIS EID's NEI's Activation/Deactivation Date
_______ 1._____________ 1._____________ 1.________________________________
2._____________ 2._____________ 2.________________________________
3._____________ 3._____________ 3.________________________________
4._____________ 4._____________ 4.________________________________
5._____________ 5._____________ 5.________________________________
MDIS EID's NEI's Activation/Deactivation Date
_______ 1._____________ 1._____________ 1.________________________________
2._____________ 2._____________ 2.________________________________
3._____________ 3._____________ 3.________________________________
4._____________ 4._____________ 4.________________________________
5._____________ 5._____________ 5.________________________________
MDIS EID's NEI's Activation/Deactivation Date
_______ 1._____________ 1._____________ 1.________________________________
2._____________ 2._____________ 2.________________________________
3._____________ 3._____________ 3.________________________________
4._____________ 4._____________ 4.________________________________
5._____________ 5._____________ 5.________________________________
</TABLE>
Authorized Signer: ________________________________
Print Name and Title
Signature: ________________________________
16
<PAGE>
AMENDMENT NO.1
This AMENDMENT No. 1 (the "Amendment") is made and entered into by and
between GOAmerica Communications Corporation ("Customer") and Cellco
Partnership, doing business as Bell Atlantic Mobile ("BAM") for attachment to
Contract #*****, dated May 13, 1997 (the "Agreement").
1. This Amendment is an integral part of and modifies the Agreement. The
terms used herein which are defined or specified in the Agreement shall have the
meanings set forth in the Agreement. If there are any inconsistencies between
the provisions of this Amendment and the provisions of the Agreement, the
provisions of this Amendment shall control.
2. The term of the Agreement is hereby extended for *****, from the date
this Amendment is executed, and shall automatically renew for additional *****
terms, unless Customer notifies BAM in writing at least ***** prior to the
expiration of the then current term, that it does not wish to renew the
Agreement.
3. Exhibit B, Price Schedule is hereby deleted in its entirety and
replaced with a new Exhibit B and B1, as attached hereto.
4. A new Section 8.5, which applies to "Electronic Billing", is hereby
added to "Billing", of the Agreement, which shall read as follows:
8.5 Should Electronic Billing become available, BAM will notify
Customer of the availability of Electronic Billing and make Electronic
Billing available to the Customer.
4. Section 4, of the Agreement, "Installation", is hereby deleted in its
entirety.
6. Section 2, of the Agreement, "Provision of Service", second sentence,
the term *****, is hereby deleted and replaced with the term *****.
7. Section 19.6 of the Agreement, "Notices", is hereby deleted in its
entirety and replaced with the following:
Notices. Any change in the Exhibits contained herein, shall require
written notification from both parties and shall not be valid until
mutually agreed upon and accepted by both parties. In addition, any
notice to be given hereunder by either party to the other shall also
be in writing and shall be valid and sufficient only if dispatched by:
a) registered or certified mail, postage prepaid in any post office in
the United States; b) hand delivery; or c) overnight courier prepaid.
Notices to BAM shall be addressed to:
Bell Atlantic Mobile
180 Washington Valley Road
Bedminster, NJ 07921
Attn: Mr. Peter Rohr
Staff Director - Contract Mgt. and Administration
(908) 306-7550
Notices to Customer shall be addressed to:
GOAmerica Communications Corporation
401 Hackensack Avenue
Hackensack, NJ 07601
Attn: Mr. Frank Elenio
Chief Financial Officer
8. Exhibit A, is hereby deleted in its entirety and replaced with a new
Exhibit A, in the form attached hereto.
***** Confidential Portion omitted and filed separately with the Securities and
Exchange Commission.
17
<PAGE>
9. Exhibit C, "Airbridge(R) Packet Service Request Form", is hereby deleted
in its entirety and replaced with a new Exhibit C, "Bell Atlantic Mobile
Activation Procedures for Value Added Customers", in the form attached hereto.
10. This Amendment shall be effective when executed by both parties.
11. All provisions of the Agreement, including attachments thereto, not
addressed by this Amendment remain in full force and effect.
IN WITNESS WHEREOF, and intending to be bound hereby, the parties affix their
signature to this Amendment.
CELLCO PARTNERSHIP
By Bell Atlantic Mobile, Inc.
its managing general partner: GOAMERICA
COMMUNICATIONS CORPORATION
/s/ Robert J. Hirsh /s/ Francis J. Elenio
By: _______________________ By: ____________________________
Robert J. Hirsh Francis J. Elenio
Name: ______________________ Name: __________________________
Exec. Dir. Data Sales & Marketing Chief Financial Officer
Title: _______________________ Title: ___________________________
1/7/2000 12/28/99
Date:_______________________ Date:___________________________
18
<PAGE>
EXHIBIT A
This Exhibit C sets forth the Area(s), as that term is used in this Agreement,
in which BAM is authorized to provide CRS as described in this Agreement. In
this Exhibit there is described the individual counties of the MSAs and/or RSAs
in which BAM is authorized to conduct its CRS operations
(a) COUNTIES OF THE MSA(s) IN WHICH BAM IS LICENSED:
Northeast Region: Norfolk MA, Essex MA, Middlesex MA, Plymouth MA, Suffolk MA
and Rockingham NH of the Boston MSA; Hartford CT, Middlesex CT and Tolland CT of
the Hartford MSA; New Haven CT of the New Haven MSA; Madison NY, Worcester MA of
the Worcester MSA; Hampden MA and Hampshire MA of the Springfield MSA; Bristol
MA of the New Bedford MSA; Hillsborough NH of the Manchester MSA; Orange NY of
the Orange County MSA; Dutchess NY of the Poughkeepsie MSA; New London CT of the
New London MSA; Berkshire MA of the Pittsfield MSA; Warren NY and Washington NY
of the Glen Falls MSA; Chittenden VT and Grand Isle VT of the Burlington MSA;
Bristol RI, Kent RI, Providence RI, Washington RI of the Providence MSA;
Fairfield CT of the Bridgeport MSA; Albany NY, Montgomery NY, Rensselaer NY,
Saratoga NY, Schenectady NY of the Albany MSA..
Pittsburgh Region: Allegheny PA, Beaver PA, Washington PA and Westmoreland PA of
the Pittsburgh MSA
Northern New Jersey/NY Metro Region: Bronx NY, Kings NY, New York NY, Queens NY,
Richmond NY, Putnam NY, Rockland NY, Westchester NY, Bergen NJ, Nassau NY,
Suffolk NY, Essex NJ, Morris NJ, Somerset NJ, Union NJ, Hudson NJ and Passaic NJ
of the New York MSA; Middlesex NJ of the New Brunswick MSA; Monmouth NJ of the
Long Branch MSA.
Philadelphia Region: Bucks PA, Chester PA, Delaware PA, Montgomery PA,
Philadelphia PA, Burlington NJ, Camden NJ and Gloucester NJ of the Philadelphia
MSA;Carbon PA, Lehigh PA, Northampton PA and Warren NJ of the Allentown MSA;
Cumberland NJ of the Vineland MSA, New Castle DE, Salem NJ, Cecil MD of the
Wilmington MSA, Berks PA of the Reading MSA, Mercer NJ of the Trenton MSA,
Atlantic NJ, Cape May NJ of the Atlantic City MSA.
Washington/Baltimore: District of Columbia, Charles MD, Montgomery MD, Prince
Georges MD, Alexandria City VA, Fairfax City VA, Falls Church City VA, Manassas
City VA, Manassas Park City VA, Arlington VA, Fairfax VA, Loudoun VA and Prince
William VA of the Washington DC MSA; Baltimore City MD, Anne Arundel MD,
Baltimore MD, Carroll MD, Harford MD and Howard MD of the Baltimore MSA
Southeast: Gaston NC, Meklenburg NC and Union NC of the Charlotte MSA;
Greenville SC, Pickens SC and Spartanburg SC of the Greenville MSA; Lexington SC
and Richland SC of the Columbia MSA; Alexander NC, Burke NC and Catawba NC of
the Hickory MSA; Buncombe and Madison of the Asheville, NC MSA; Anderson SC of
the Anderson MSA.
(b) COUNTIES OF THE RSA(s) IN WHICH BAM IS LICENSED:
Northeast Region: Windham in CT 2-WINDHAM; Newport in R1-NEWPORT; Barnstable,
Dukes and Nantucket in MA 2-BARNSTABLE; Carroll, Belknap and Merrimack in NH 2-
CARROLL; Franklin, Orleans, Essex, Lamoille, Washington, Caledonia and Orange in
VT 1-FRANKLIN; Addison, Rutland, Windsor, Bennigton and Windham in VT 2-ADDISON
(B1); Ostego, Delaware, Schoharie, Sullivan and Ulster in NY 5-OSTEGO.
Pittsburgh Region: Mason, Jackson, Roane, and Calhoun in WV 1 MASON; Wetzel,
Tyler, Doddridge, Ritchie, Gilmer, Lewis, Pleasants in WV 2 WETZEL; McKean,
Camerom, and Elk in PA 2 MCKEAN; Butler, Clarion, Lawrence and Armstrong in PA 6
LAWRENCE (B2); Indiana, Jefferson and Clearfield in PA 7 JEFFERSON; Greene and
Fayette in PA 9 GREENE; Huntingdon, Juniata and Mifflin in PA 11 HUNTINGDON
(B2).
Northern New Jersey/NY Metro Region: Hunterdon in NJ 1-HUNTERDON; Sussex in NJ
3-SUSSEX.
Philadelphia Region: Ocean in NJ 2-OCEAN; Kent and Sussex in DE 1-KENT.
Washington/Baltimore: Kent, Queen Annes, Talbot, Caroline, Dorchester, Wicomico,
Somerset, Calvert, St. Marys, and Worcester in MD 2-KENT; Frederick in MD 3-
FREDERICK; Frederick, Clark, Shenandoah, Page, Rappahannock, Fauquier, Warren
and Winchester City in VA 10-FREDERICK (B1); Madison, Culpeper, Orange,
Fredericksburg City, Spotsylvania, Louisa and Stafford VA 11-MADISON (B3);
Caroline, King George, King William, King & Queen, Essex, Richmond,
Westmoreland, Northumberland. Lancaster, Mathews, Northampton, Accomack, and
Middlesex in VA 12-CAROLINE (B2).
Southeast: Yancey, Mitchell, Avery, Watauga,and Caldwell in NC 2-YANCEY;
Cherokee, Clay, Graham, Macon, Swain, Haywood, Jackson and Transylvania in NC 1-
CHEROKEE; Anson, Montgomery, Richmond, Scotland in NC 5-ANSON; Cabarrus, Stanly,
Rowan, Iredell, and Davie in NC 15-CABARRUS; Laurens, Greenwood, McCormick,
Edgefield, Saluda, Newberry and Abbeville in SC 2-LAURENS; Oconee in SC 1-
OCONEE; Cherokee, Chester, Union and Fairfield in SC 3-CHEROKEE; Lancaster and
York in SC 9-LANCASTER; Dawson, Lumpkin, White, Habersham, Hall, Banks,
Franklin, Stephens, Rabun, Barrow in GA 2-DAWSON, Henderson, Polk, Rutherford,
Cleveland, McDowell and Lincoln in NC4-HENDERSON; Lee, Wise, Dickenson,
Buchanan, Russell and Norton City in VA 1-LEE.
19
<PAGE>
Exhibit B
AirBridge(R) Internet Access
***** Access fee: $***** per NEI
Rate over Allowance: $*****/kilobyte
Usage outside BAM markets: $*****/kilobyte
General Pricing Terms
- ----------------------
Use of these rate plans is limited to the following software applications(note:
This list may be amended from time to time): *****
***** Confidential Portion omitted and filed separately with the Securities and
Exchange Commission.
20
<PAGE>
EXHIBIT B1
AirBridge(R) Internet Access ***** Price Plan
Access Fee $*****
Usage in BAM Markets ***** usage included*
Usage Outside BAM Markets $*****
NEI Unit Commitment *****
Activation fee $*****
Contract Term in ***** *****
Commitment Schedule:
NEIs in Service
Month ***** *****
Month ***** *****
Month ***** *****
Month ***** *****
Month ***** *****
Month ***** *****
Month ***** *****
Month ***** *****
Month ***** *****
Month ***** *****
Month ***** *****
Month ***** *****
$***** Traveler Option Available
Pricing does not include electronic billing information
Use limited to the following applications *****
NEIs in service on the rate plan shown in Exhibit B shall not count towards the
NEI commitment of this rate plan. Should Customer not have the number of active
NEIs corresponding to the commitment schedule shown above, Customer shall be
charged as if those NEIs were in service.
***** Confidential Portion omitted and filed separately with the Securities and
Exchange Commission.
21
<PAGE>
EXHIBIT C
Page 1
Objective: To streamline the data activation process for Value Added
Customers.
Goal: To establish activation procedures that will maximize efficiency
for both Bell Atlantic Mobile and our Value Added Customers. This
procedure will create an activation process that will allow for
easier activation, billing, tracking and reporting that will
benefit BAM as well as our customers.
Introduction: Once a customer has been identified as a VAC with a contract in
place, it is our recommendation that they have the ability to
reserve and activate NEIs directly through our Credit & Ordering
Operations Department. This will allow for maximum efficiency
given the quantity of NEIs that are activated through our VACs.
Alternative procedures may be evaluated due to the needs of a
particular customer on a case by case basis.
Procedure: NEI Reservations
----------------
VACs will have the ability to reserve NEIs in blocks of *****.
These NEIs will be reserved by BAM geographic region (i.e. *****
NEI's out of NY Metro, ***** NEI's out of Wash/Balt, please see
Exhibit C, page 2). This form will be filled out by an authorized
VAC representative and faxed directly to our COOS department in
Morristown, NJ (Fax number 973-971-1036, Tel number 800-627-2791).
Reservation requests may take up to 2 business days to complete.
Once the request has been processed, a COOS representative will
complete the form and list of reserved NEIs and fax it back to the
VAC representative as well as to Greg Fucheck, Manager - Value
Added Customers (Fax 908-306-4227, Tel 908-306-7746).
NEI Activations
---------------
In order to activate an NEI, Value Added Customers will be able to
fax a form directly to the BAM COOS department (Please see Exhibit
C, page 3). This form will be filled out by an authorized VAC
representative and will list the NEIs from the reserved block to
be activated. The BAM COOS department will convert these NEIs from
reserved status to active status in our systems. Once all the NEIs
have been activated, a COOS representative will fax back the
activation form to the VAC as well as to Greg Fucheck.
Note: These forms can only be signed by an authorized VAC
representative. Each VAC will be responsible for providing a list
of authorized representatives that will be forwarded to Greg
Fucheck who will then forward to the COOS department.
***** Confidential Portion omitted and filed separately with the Securities and
Exchange Commission.
22
<PAGE>
EXHIBIT C
Page 2
Customer: GO AMERICA
Customer #: ***
Address: 401 Hackensack Avenue
Hackensack, NJ 07601
Phone: (201) 996-7306
Fax: (201) 996-1772
Authorized Person: _________________________________________
Signature: ____________________ Date: ____________
Primary City, ST Price Plan Code Saleforce Contract Length NEI
ID
- -------------------------------------------------------------------------------
*****
- -------------------------------------------------------------------------------
*****
- -------------------------------------------------------------------------------
*****
- -------------------------------------------------------------------------------
*****
- -------------------------------------------------------------------------------
*****
- -------------------------------------------------------------------------------
*****
- -------------------------------------------------------------------------------
*****
- -------------------------------------------------------------------------------
*****
- -------------------------------------------------------------------------------
*****
- -------------------------------------------------------------------------------
*****
- -------------------------------------------------------------------------------
*****
- -------------------------------------------------------------------------------
*****
- -------------------------------------------------------------------------------
Special Requests/Comments
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Note: This form is to be used when requesting activation of IP addresses on BAM
CDPD Network.
Please fax this form to BAM's COOS department at 973-971-1036 (attn. Charlene or
Dave)
***** Confidential Portion omitted and filed separately with the Securities and
Exchange Commission.
23
<PAGE>
EXHIBIT C
Page 3
Customer: GO AMERICA
Customer #: *****
Address: 401 Hackensack Avenue
Hackensack, NJ 07601
Phone: (201) 996-7306
Fax: (201) 996-1772
Authorized Person: _________________________________________
Signature: ____________________ Date: ____________
Total Number of NEI to be reserved (in blocks of *****):
Qty. to Primary City, State NEI Range
Reserve (to be completed by BAM)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Special Requests/Comments
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Note: This form is to be faxed to BAM's COOS department at 973-971-1036 ( attn.
Charlene or Dave) when reserving blocks of IP addresses for future use.
***** Confidential Portion omitted and filed separately with the Securities and
Exchange Commission.
24
<PAGE>
EXHIBIT 10.3
VALUE ADDED RESELLER AGREEMENT
THIS AGREEMENT, is made and entered into as of the 31 day of August, 1999
--
(the "Effective Date"), by and between BellSouth Wireless Data L.P.
("BellSouth") having an address at 10 Woodbridge Center Drive, Woodbridge New
Jersey 07095, and GoAmerica Communications Corporation ("GoAmerica") having an
address at 401 Hackensack Avenue, Hackensack, New Jersey 07601.
WHEREAS, BellSouth provides certain intra-LATA two-way wireless data
communications services (the "BellSouth Services") using radio base stations and
switching facilities implemented and operated by BellSouth, from time to time
(the "BellSouth Facilities");
WHEREAS, GoAmerica owns and operates a data processing center located at
401 Hackensack Avenue, Hackensack New Jersey (the "GoAmerica Facilities") which
provides, or will provide to third parties, the use of certain electronic
messaging and communications gateways including computer servers and software
which are used to provide GoAmerica's GoWeb and GoMail services referred to
herein as the "GoAmerica Services";
WHEREAS, GoAmerica desires to sell and distribute the BellSouth Services in
connection with the GoAmerica Services (the combination of the BellSouth
Services and the GoAmerica Services being hereinafter referred to as the
"GoAmerica/BellSouth Services"), develop applications software appropriate to
the GoAmerica/BellSouth Services, and effect the interconnection between the
BellSouth Facilities and the GoAmerica Facilities in connection therewith on the
terms and conditions hereinafter set forth, and
WHEREAS, BellSouth desires to permit GoAmerica's above described activities
upon the terms and conditions set forth herein
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth, BellSouth and GoAmerica hereby agree as follows:
I. Solicitation of Subscribers and Value Added Requirement.
-------------------------------------------------------
a. GoAmerica shall use all reasonable efforts, consistent with good
business judgment, to solicit subscribers to the BellSouth Services to
be received in connection with the GoAmerica/BellSouth Services.
b. GoAmerica's resale of the BellSouth Services shall only be in
connection with the sale of the GoAmerica/BellSouth Services and
incidental to the GoAmerica Services, which shall constitute
significant, value to subscribers of the GoAmerica/BellSouth Services.
The BellSouth Services shall be integrated with the GoAmerica Services
and GoAmerica shall not have the right to offer, resell or otherwise
make available the BellSouth Services, including, but not limited to,
the transmission of packets included therein, as a separate service or
product.
<PAGE>
c. GoAmerica may, at its own expense and solely in connection with the
GoAmerica/BellSouth Services, market, promote, and advertise the
BellSouth Services. GoAmerica will not in any manner use, display,
broadcast, or disseminate any advertising or promotional material
which contains any (i) material misrepresentations, or omits to state
a material fact, with regard to BellSouth and/or the BellSouth
Services, or (ii) statement in derogation of BellSouth, and/or the
BellSouth Services. Notwithstanding anything to the contrary herein,
GoAmerica shall, prior to its proposed use of any advertising or
promotional material referring to the BellSouth Services, submit a
copy of such material to BellSouth for BellSouth's prior written
approval which approval shall not be unreasonably withheld.
d. The rights granted to GoAmerica hereunder are not exclusive. Subject
to Section 6 below, BellSouth is free (i) to increase or decrease the
number of parties it authorizes to solicit subscribers to the
BellSouth Services and (ii) to solicit subscribers to the BellSouth
Services in its own behalf at any time without notice to GoAmerica.
2. The BellSouth Services.
----------------------
a. BellSouth shall provide the BellSouth Services to subscribers to the
GoAmerica/BellSouth Services as GoAmerica shall notify BellSouth
during the term of this Agreement. BellSouth agrees to register on the
BellSouth Facilities subscribers to the GoAmerica/BellSouth Services
and the equipment utilized by such subscribers (each, a "Subscriber
Unit") and to provide the BellSouth Services to such Subscriber Units
thereafter, unless notified by GoAmerica to cease the provision of the
BellSouth Services to such Subscriber Units as specified in such
notice. The date on which the first Subscriber Unit is registered on
the BellSouth Facilities is hereinafter referred to as the "Initial
Service Date."
b. GoAmerica shall pay BellSouth for the provision of the BellSouth
Services to Subscriber Units in accordance with the Schedule of
Charges annexed hereto as Schedule 2.b. Notwithstanding anything to
the contrary contained in this Agreement GoAmerica shall bear full
responsibility for, and shall pay BellSouth in accordance with the
Schedule of Charges for the provision of all BellSouth Services used
by Subscriber Units activated by BellSouth pursuant to Section 2.a.
including, but not limited to, use of the BellSouth Services in
connection with Mobile-to-Mobile message transmissions by a Subscriber
Unit.
c. On approximately the fifteenth (15th) day of each month following the
Initial Service Date, BellSouth shall invoice GoAmerica for the
aggregate amount of BellSouth Services used in connection with
Subscriber Units calculated in accordance with the applicable rates
specified in the Schedule of Charges.
d. GoAmerica shall make payment in full, by Federal wire transfer or by
good check for immediately available funds, of each of BellSouth's
invoices not later than
2
<PAGE>
thirty (30) days after each invoice is rendered. BellSouth shall
provide such wire transfer instructions to GoAmerica with BellSouth's
first invoice due pursuant to Section 2.c. above.
e. GoAmerica will receive all payments from subscribers to the
GoAmerica/BellSouth Services and shall be responsible for all billing,
collection, and bad debt recovery with respect to subscribers to the
GoAmerica/BellSouth Services.
f. GoAmerica shall be responsible for assuring that the use of the
BellSouth Services by subscribers to the GoAmerica/BellSouth Services,
and the computer application software and all Subscriber Units in
connection therewith, comply with and have been approved by BellSouth
for use on the BellSouth Facilities in accordance with procedures and
technical specifications established by BellSouth, during the term of
this Agreement and comply with all applicable laws, rules, and
regulations, including without limitation the rules and regulations of
the Federal Communications Commission ("FCC") concerning the licensing
of end users of Specialized Mobile Radio Service facilities and the
type approval of end user equipment.
3. Application Software Development and Connectivity.
-------------------------------------------------
a. GoAmerica shall undertake and be responsible for, at its own expense,
the development and implementation of any and all new, modified, or
enhanced application, interface, middleware, or communications
software necessary to enable present and future subscribers to the
GoAmerica Services to receive the GoAmerica/BellSouth Services and to
achieve connectivity between and among Subscriber Units, the BellSouth
Facilities, and the GoAmerica Facilities. GoAmerica shall be
responsible for assuring that the GoAmerica Services, the GoAmerica
Facilities, and the use of the BellSouth Services by subscribers to
the GoAmerica/BellSouth Services do not cause traffic congestion,
degradation, disruption, abnormal and burdensome operating expense or
other detrimental effects, as reasonably determined by BellSouth, to
the BellSouth Facilities (or any portion thereof), the BellSouth
Services, or the use of the BellSouth Services or the BellSouth
Facilities by users other than subscribers to the GoAmerica/BellSouth
Services. BellSouth shall have the right to take such steps, including
but not limited to requiring GoAmerica to modify, at GoAmerica's
expense, the Go America Facilities or features or functions of the
GoAmerica Services (including, for example, the retry algorithm used
by the GoAmerica Services in circumstances where transmission of a
message has been aborted by application or middleware software) as
reasonably necessary to eliminate traffic congestion, degradation,
disruption, abnormal and burdensome operating expense or other
detrimental effects caused by the GoAmerica Services, the GoAmerica
Facilities, or Subscriber Units activated hereunder for GoAmerica. In
accordance with its usual Customer Service and network management
practices, BellSouth shall notify GoAmerica when the BellSouth
Facilities experience any such
3
<PAGE>
congestion, degradation, disruption, abnormal and burdensome operating
expense or other detrimental effect caused by the GoAmerica Services,
the GoAmerica Facilities, or Subscriber Units activated hereunder for
GoAmerica and GoAmerica shall thereafter cooperate with BellSouth to
resolve such problem. Each party shall be responsible at its own
expense for its own facilities. If any such congestion, degradation,
or disruption of the BellSouth Facilities occurs in a manner which has
a significant impact on the BellSouth Facilities discernible to users
of the BellSouth Services other than subscribers to the
GoAmerica/BellSouth Services, BellSouth shall have the right to
modify, curtail or terminate use of the BellSouth Services by
GoAmerica and its Subscribers as reasonably necessary to prevent such
impact until such congestion, degradation or disruption is remedied.
b. GoAmerica shall not modify the GoAmerica Services or introduce new
software or equipment to be used in connection with the BellSouth
Facilities or Service without the prior written approval of BellSouth.
c. GoAmerica shall bear the cost of procuring, implementing, operating,
and maintaining the facilities necessary to interconnect the BellSouth
Facilities and the GoAmerica Facilities, except for such digital
service units ("DSUs") as may be located on BellSouth's premises.
d. GoAmerica shall be the sole owner of any and a intellectual property
rights in any software developed by GoAmerica or on GoAmerica's behalf
pursuant to this Agreement. This Agreement does not convey to
BellSouth any license, by implication, estoppel or otherwise, to any
proprietary copyright or patent right which GoAmerica has or may have
in any software developed by GoAmerica or on GoAmerica's behalf
pursuant to this Agreement, nor does this Agreement grant any rights
to BellSouth to use or modify such software or any part thereof or to
combine such software or any part thereof with any other software,
product or parts, except as may be expressly provided herein or in any
subsequent agreement between GoAmerica and BellSouth.
4. Marketing Activities.
--------------------
Neither party shall distribute to any third parties any materials,
information or writings describing the products or services of the other
party, or use any logos, trademarks, service marks, trade names, or the
corporate names of the other party without the prior written consent of
such party, which consent shall not be unreasonably withheld or delayed.
5. Non-Exclusivity
---------------
a. Nothing herein shall be construed so as to restrict the activities of
BellSouth or GoAmerica, acting alone or in concert with others, in
connection with the development, implementation, operation, or
provision of any services or facilities whatsoever, whether similar to
or competitive with the GoAmerica Services, the
4
<PAGE>
GoAmerica Facilities, the BellSouth Services, the BellSouth
Facilities, or the GoAmerica/BellSouth Services.
b. Notwithstanding anything to the contrary in this Agreement, the
GoAmerica/BellSouth Services shall not include and GoAmerica shall
have no right whatsoever to offer the BellSouth Services in connection
with any software applications, products or services providing outdoor
billboards (including, but not limited to, structures that remotely
convey advertising, changeable traffic or other Intelligent Traffic
System Information) with fixed data application software or services
for remote illumination control and/or data collection.
6. Confidentiality and Non-Disclosure.
-----------------------------------
a. BellSouth and GoAmerica each acknowledge that, as parties to this
Agreement and in connection with the activities contemplated hereby,
they may have access to Confidential Information of each other and of
their respective affiliates. As used herein, the term "Confidential
Information" shall include, without limitation: technical, financial
and commercial data; forms of provision and computation; names,
addresses, telephone and telefax numbers, contact persons and other
identifying or valuable information relating to actual or potential
customers, shareholders, partners, independent contractors and
suppliers; reports; market studies; design, price and cost information
with respect to the BellSouth Facilities, the GoAmerica Facilities,
the BellSouth Services, the GoAmerica Services, and the
GoAmerica/BellSouth Services; and lists, compilations and archives of
any and all of the foregoing. Notwithstanding the foregoing, the term
"Confidential Information" shall not include any information that: (a)
the receiving party can demonstrate, by prior existing records, was
within its legitimate possession prior to the time of disclosure by
the furnishing party, (b) was within the public domain prior to such
disclosure; or (c) after disclosure, comes into the public domain, as
evidenced by documents that are generally published, through no fault
of the receiving party. Information that is specific to certain data
shall not be deemed to be in the public domain merely because such
information is embraced by more general disclosures in the public
domain.
b. BellSouth and GoAmerica each will afford confidential treatment to the
Confidential. Information it receives in connection with this
Agreement and the activities contemplated hereby and shall not use
such information or any other Confidential Information in any way that
is detrimental to the party furnishing the Confidential Information or
for any purpose other than those legitimate purposes contemplated in
this Agreement, nor shall the receiving party disclose any or all
Confidential Information to anyone other than its affiliates, partners
or potential partners, advisors, agents, and employees who need to
know such Confidential Information in connection with the legitimate
purposes contemplated by this Agreement. The receiving party shall
maintain adequate procedures to ensure that all of the persons to whom
it discloses or provides access to Confidential Information comply
with the restrictions set forth herein.
5
<PAGE>
c. Neither party to this Agreement shall without the written consent of
the other party (i) make any news releases, public announcements, or
denials or confirmations of the same, concerning all or any part of
the discussions or negotiations between the parties, (ii) in any
manner advertise or publish the fact that the parties have entered
into discussions or negotiations, or (iii) disclose any details of
such discussions or negotiations (whether or not Confidential
Information) to any third parties.
d. BellSouth and GoAmerica acknowledge and agree that each of them
reserves the right to take any legal action to which it may be
entitled in the event of breach, in full or in part, of the
confidentiality and non-disclosure provisions of this Agreement.
7. Term.
----
a. The initial term of this Agreement shall commence as of the date
hereof and shall continue, unless sooner terminated pursuant to the
provisions hereof, until the date which shall be ***** after the
Initial Service Date (the "Initial Term").
b. Upon expiration of the Initial Term, this Agreement shall be
automatically renewed for additional periods of ***** (each a "Renewal
Term") unless either party gives written notice to the other party
that such renewal shall not occur, such notice to be given not less
than ***** days prior to the end of the Initial Term or the then
current Renewal Term. During any Renewal Term BellSouth shall have the
right to change the prices as provided in this Agreement after *****
notice to GoAmerica. ***** per calendar year.
c. Nothing in this Agreement will be deemed to create any express or
implied obligation on either party to renew or extend this Agreement
or to create any right to continue this Agreement on the same terms
and conditions contained herein. GoAmerica understands that BellSouth
intends to review its Value Added Reseller strategy and the terms and
conditions of this Agreement on an ongoing basis and may require
execution of an amended form of this Agreement as a condition of
renewal.
8. Termination.
-----------
a. This Agreement shall terminate automatically, and without liability or
further obligation of either party to the other in the event
termination is required by:
1. the FCC or in the event BellSouth loses its authority to operate
the BellSouth Facilities or if such authority is suspended or if
required licenses are not renewed, provided, however, that in the
event BellSouth loses its authority to operate fewer than all of
the BellSouth Facilities or if the suspension of any authority or
non-renewal of any license relates to
***** Confidential Portion omitted and filed separately with the
Securities and Exchange Commission.
6
<PAGE>
fewer than all of the BellSouth Facilities, then this Agreement
shall terminate only as to the BellSouth Facilities affected by
such loss of authority, suspension, or non renewal (but nothing
herein shall be construed so as to diminish BellSouth's
responsibility to use all reasonable efforts to maintain all
required authority and licenses in full force and effect for the
duration of this Agreement); or
2. any law, rule, regulation, or valid order of a court of competent
jurisdiction (including, without limitation, the application of
any restrictions which may be applicable to BellSouth or its
affiliates pursuant to the Telecommunications Act of 1996 and the
rules and regulations of the FCC promulgated, from time to time,
in connection therewith, as subsequently modified and interpreted
from time to time) (and nothing herein shall be construed to
require BellSouth to seek waiver of any law, rule, regulation, or
restriction, or seek judicial review or appeal of any court
order).
b. Upon any Event of Default (as hereinafter defined), either party may,
upon written notice to the defaulting party (the "Defaulting Party"),
terminate this Agreement without liability to the Defaulting Party.
Each of the following constitutes an Event of Default:
1. an admission by the Defaulting Party of an inability to pay its
debts, the entering into by the Defaulting Party of a composition
or arrangement with its creditors, the appointment of a trustee
or receiver, with or without consent, for the Defaulting Party or
all or any substantial part of its property, or the filing of a
petition for relief by or against the Defaulting Party under the
Bankruptcy Code or any similar federal or state statute now or
hereafter in effect; and
2. failure by the Defaulting Party to perform any material
obligation imposed upon it by or pursuant to this Agreement, or
any other material breach of this Agreement, provided that such
breach is not corrected within thirty (30) days after written
notice to the Defaulting Party specifying the nature of such
breach (or such longer period as may be required to correct such
breach, if within said thirty (30) days, the Defaulting Party
shall commence the correction of such breach and thereafter
diligently pursue the correction thereof).
c. 1. in the event that this Agreement should not be renewed for any
Renewal Term as the result of written notice by BellSouth to
GoAmerica pursuant to the provisions of Section 7.b. herein, then
in such event BellSouth shall for a period in no event to exceed
*****, at GoAmerica's option, continue to provide the BellSouth
Services to subscribers secured by GoAmerica to the
GoAmerica/BellSouth Services up to the date of termination for so
long as GoAmerica continues to make timely payment
****** Confidential Portion omitted and filed separately with the
Securities and Exchange Commission.
7
<PAGE>
of fees due to BellSouth pursuant to Section 2.b. herein. If
GoAmerica fails to continue to make such timely payments of fees
to BellSouth, BellSouth shall have the right, at its sole option,
to terminate the BellSouth Services to subscribers secured by
GoAmerica to the GoAmerica/BellSouth Services.
2. In the event that this Agreement should not be renewed for any
Renewal Term as the result of written notice by GoAmerica to
BellSouth pursuant to the provisions of Section 7.b. herein, then
in such event BellSouth may, at its option, continue to provide
the BellSouth Services to subscribers secured by GoAmerica to the
GoAmerica/BellSouth Services up to the date of termination for so
long as GoAmerica continues to make timely payment of fees due to
BellSouth pursuant to Section 2.b. herein. If GoAmerica fails to
continue to make such timely payments of fees to BellSouth, then,
in order to assure continuity of service to all subscribers,
GoAmerica shall, within five days demand therefor by BellSouth,
provide BellSouth with a complete list of subscribers, utilizing
the BellSouth Services which have been obtained by GoAmerica to
the GoAmerica/BellSouth Services, including the name, address,
and telephone number thereof. The possession of that list shall
not relieve GoAmerica of the obligation to pay all sums to
BellSouth and shall not obligate BellSouth to make any payments
therefor to GoAmerica.
9. Independent Contractors.
-----------------------
a. GoAmerica and BellSouth shall at all times be, and represent
themselves to be, solely independent contractors each acting on their
own account in all transactions involving the BellSouth Services, the
GoAmerica Services, and the GoAmerica/BellSouth Services. Nothing in
this Agreement shall be construed to make either party (or any person
employed by either party) an employee of the other party. Neither
party shall have any authority to bind or commit the other party in
any respect or to accept legal process on behalf of the other party.
Without limiting the generality of the foregoing neither party shall
be liable to any agent reseller, subcontractor, supplier, employee, or
customer of the other party for any commission, compensation,
remuneration, benefit, damage, or claim of any nature whatsoever.
b. GoAmerica shall not, in any manner whatsoever, represent itself as the
operator of the BellSouth Facilities or the provider of the BellSouth
Services, but shall identify BellSouth as the entity authorized to
operate the BellSouth Facilities and provide the BellSouth Services
and represent itself only as an authorized reseller of the BellSouth
Services.
10. Patent, Copyright, Trademark and Trade Secret Indemnification
-------------------------------------------------------------
8
<PAGE>
a. BellSouth, at its own expense, will defend and indemnify GoAmerica
against claims that the BellSouth Services, in and of themselves,
infringe a United States patent or copyright or misappropriate trade
secrets protected under United States law, provided GoAmerica (a)
gives BellSouth prompt written notice of such claims pursuant to
Section 14, (b) permits BellSouth to defend or settle the claims, and
(c) provides reasonable assistance to BellSouth at BellSouth's expense
in defending or settling the claims.
b. As to any claim of infringement or misappropriation arising as
provided in 10.a above, BellSouth may elect to (a) obtain the right of
continued use of the BellSouth Services for GoAmerica, or (b) modify
the BellSouth Services to avoid such claim. If neither alternative is
available on commercially reasonable terms, then BellSouth shall have
the right to terminate this Agreement and no further charges will
accrue hereunder.
c. BellSouth will not defend or indemnify GoAmerica if any claim of
infringement or misappropriation (a) is asserted by a parent,
subsidiary or affiliate of GoAmerica, (b) results from use of the
BellSouth Services in combination with any product or services not
provided by BellSouth, including but not limited to the GoAmerica
Services and the GoAmerica Facilities.
d. This Section 10 states the entire liability of BellSouth and
GoAmerica's sole and exclusive remedies for patent or copyright
infringement and trade secret misappropriation.
11. Remedies: Limitation of Remedies.
--------------------------------
a. GoAmerica's sole remedies for loss or damage caused by partial or
total failure of the BellSouth Facilities or for delay or
nonperformance of any of the BellSouth Services under this Agreement,
regardless of the form of action, whether in contract, tort (including
negligence), strict liability or otherwise, shall be, where
applicable, GoAmerica's actual damages, if any, resulting from such
failure, delay, or nonperformance. Except with respect to BellSouth's
liability to indemnify GoAmerica pursuant to Section 10 above,
BellSouth's liability hereunder shall be limited solely to the amount
paid by GoAmerica to BellSouth for the BellSouth Services under this
Agreement during such period of failure, delay, or nonperformance.
b. AS A MATERIAL PART OF THE CONSIDERATION PAID BY GOAMERICA FOR THE
BELLSOUTH SERVICES PROVIDED BY BELLSOUTH UNDER THIS AGREEMENT, THE
PARTIES AGREE THAT BELLSOUTH SHALL IN NO EVENT BE LIABLE FOR, AND
GOAMERICA, FOR ITSELF AND THE SUBSCRIBERS TO THE GOAMERICA/BELLSOUTH
SERVICES, HEREBY WAIVES THE RIGHT TO CLAIM ANY INDIRECT, SPECIAL,
INCIDENTAL, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS) DIRECTLY
OR INDIRECTLY
9
<PAGE>
RELATING TO OR ARISING OUT OF GOAMERICA'S OR ITS SUBSCRIBERS'
INABILITY TO USE THE BELLSOUTH FACILITIES OR ANY PART THEREOF, EITHER
SEPARATELY OR IN COMBINATION WITH ANY OTHER FACILITIES OR SERVICES,
PERFORMED OR NOT PERFORMED BY BELLSOUTH UNDER TIES AGREEMENT, OR FOR
ANY OR ALL LOSS OR DAMAGE DIRECTLY OR INDIRECTLY RELATING TO OR
ARISING OUT OF A THIRD PARTY'S UNAUTHORIZED ACCESS TO GOAMERICA'S OR
ITS SUBSCRIBERS' DATA TRANSMITTED OVER THE BELLSOUTH FACILITIES,
REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, TORT (INCLUDING
NEGLIGENCE), STRICT LIABILITY, OR OTHERWISE, AND WHETHER OR NOT SUCH
DAMAGES WERE FORESEEN OR UNFORESEEN.
c. GoAmerica shall use a form of agreement with subscribers to the
GoAmerica/BellSouth Services that contains a provision substantially
consistent with the following language and no language inconsistent
therewith: "Neither GoAmerica, as reseller of wireless data
communications services provided through the facilities of BellSouth
Wireless Data L.P. ("BellSouth"), nor BellSouth, as the provider of
such services, shall have any liability of any kind, direct or
indirect, to [subscriber of GoAmerica] for any damages other than
actual damages directly and proximately resulting from the failure,
delay, or nonperformance of the services and the maximum collective
liability of GoAmerica and BellSouth for such damages shall be limited
solely to the amount paid by [subscriber] to GoAmerica for the
services during such period of failure, delay, or nonperformance.
Neither GoAmerica nor BellSouth shall have any liability, direct or
indirect, whatsoever for any damages other than for such directly and
proximately caused damage, and, in particular, without limitation,
neither GoAmerica nor BellSouth shall have any liability, direct or
indirect, for any special, incidental, or consequential damages
(including lost profits) directly or indirectly relating to or arising
out of [subscriber's] inability to use the services or related
facilities, equipment or software, either separately or in combination
with any other services, facilities, equipment or software, whether or
not performed or provided under this Agreement, or for any loss or
damage directly or indirectly relating to or arising out of any third
party's unauthorized access to [subscriber's] data transmitted over
the BellSouth Facilities, regardless of the form of action, whether in
contract, tort (including negligence), strict liability, or otherwise,
and whether or not such damages were foreseen or unforeseen."
12. Representations and Warranties.
------------------------------
a. GoAmerica represents and warrants to BellSouth as follows:
1. it is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Delaware, and has all
requisite corporate power and authority to own, operate, and
lease its properties and carry on
10
<PAGE>
its business as now being conducted, and to enter into this
Agreement and perform its obligations hereunder;
2. the execution and delivery of this Agreement has been duly and
validly authorized and approved by all necessary GoAmerica
corporate action and this Agreement is valid and binding upon it
in accordance with its terms;
3. the execution and carrying out of this Agreement and compliance
with the provisions hereof by it will not violate any provision
of law, will not, with or without the giving of notice and/or the
passage of time, conflict with or result in the breach of any of
the terms or conditions of or constitute a default under, any
indenture, mortgage, agreement, or other instrument to which it
is a party or by which it is bound;
4. the resale of the BellSouth Services shall only be in connection
with the sale of the GoAmerica/BellSouth Services and incidental
to the GoAmerica Services, which shall constitute the principal
value to subscribers of the GoAmerica/BellSouth Services.
b. BellSouth represents and warrants to GoAmerica as follows:
1. it is a limited partnership duly organized, validly existing, and
in good standing under the laws of the State of Delaware, and has
all requisite power and authority to own, operate, and lease its
properties and carry on its business as now being conducted, and
to enter into this Agreement and perform its obligations
hereunder
2. the execution and delivery of this Agreement has been duly and
validly authorized and approved by all necessary BellSouth
partnership action and this Agreement is valid and binding upon
it in accordance with its terms;
3. the execution and carrying out of this Agreement and compliance
with the provisions hereof by it will not violate any provision
of law, will not with or without the giving of notice and/or the
passage of time, conflict with or result in the breach of any of
the terms or conditions of or constitute a default under, any
indenture, mortgage, agreement, or other instrument to which it
is a party or by which it is bound.
13. Force Majeure
-------------
In no event shall either party have any liability for failure to comply
with this Agreement, if such failure results from the occurrence of any
contingency beyond the reasonable control of the party, including, without
limitation, strike or other labor disturbance, riot, theft, flood,
lightning, storm, any act of God, power failure, war, national emergency,
interference by any government or governmental agency, embargo, seizure, or
enactment of any law, statute, ordinance, rule, or regulation.
11
<PAGE>
14. Notices.
-------
a. All notices and other communications provided for herein shall be in
writing and sent by certified or registered mail, postage prepaid,
return receipt requested, or delivered personally to the intended
recipient, at the street address set forth below:
1. if to BellSouth:
BellSouth Mobile Data USA Limited Partnership
10 Woodbridge Center Drive
Woodbridge, New Jersey 07095
Attention: George Pappas
Executive Vice President-Operations
with a copy (which shall not constitute notice) to:
BellSouth Mobile Data USA Limited Partnership
10 Woodbridge Center Drive
Woodbridge, New Jersey 07095
Attention: Senior Vice President and General Counsel
2. if to GoAmerica:
GoAmerica Communications Corp.
401 Hackensack Avenue
Hackensack, New Jersey 07601
Attention: Aaron Dobrinsky
President
or, as to either party, at such other address as shall have been
designated by such party in a notice to the other party delivered in
accordance with the provisions hereof.
b. Except as may otherwise be provided in this Agreement, all notices and
other communications hereunder shall be deemed to have been given when
actually received by the intended recipient.
c. Notices may be given by telephone, provided that such notices are
promptly confirmed by the sender in writing and delivered as provided
herein.
15. Waivers.
-------
a. The parties may at any time waive any of the provisions of this
Agreement, but any such waivers shall be reduced to writing and duly
executed and delivered by duly authorized representatives of the
parties hereto.
12
<PAGE>
b. The failure of either party to enforce at any time any of the
provisions of this Agreement shall not constitute or be construed to
be a waiver of such provisions or of the right of such party
thereafter to enforce any such provisions.
16. Entire Agreement: Severability.
------------------------------
a. This instrument contains the entire agreement between the parties and
there are merged hereinto all prior and collateral representations,
promises, and conditions in connection with the subject matter hereof
any representation, promise, or condition not incorporated herein
shall not be binding upon either party and this Agreement supersedes
and is in lieu of all existing agreements or arrangements between the
parties with respect to the subject matter hereof ANY MODIFICATION OF
ANY PROVISION OF THIS AGREEMENT MUST BE IN WRITING AND SIGNED BY
AUTHORIZED REPRESENTATIVES OF BOTH PARTIES.
b. if any provision of this Agreement shall be invalid or unenforceable,
such invalidity or unenforceability shall not invalidate or render
unenforceable the entirety of this Agreement, but rather (unless a
failure of consideration would result therefrom), the entirety of this
Agreement shall be construed as if not containing the particular
invalid or unenforceable provision, and the rights and obligations of
the parties shall be construed and enforced accordingly.
17. Assignments and Delegation of Rights and Duties.
-----------------------------------------------
Neither party may assign any of its rights or delegate any of its duties
under this Agreement without the prior written consent of the other party,
which consent shall not be unreasonably withheld or delayed; provided,
however, that either party may assign any or all of its rights or delegate
any or all of its duties under this Agreement without the prior written
consent of the other party if and to the extent such assignment or
delegation is to (i) an entity which controls, is controlled by, or is
under common control with such party or (ii) an entity that has acquired
all or substantially all of such party's assets as a successor to the
business of the assigning party (whether by way of merger, reverse merger,
consolidation, sale and purchase of assets or otherwise) and such entity
agrees in writing within thirty (30) days of the date of such assignment or
delegation to be bound by and perform in accordance with this Agreement as
if it were a party hereto. As used herein, "control" means the ownership of
fifty percent (50%) or more of the outstanding voting stock or other equity
interest in the relevant entity. Any attempted assignment or delegation in
violation of this Agreement shall be void and of no force and effect.
18. Miscellaneous.
-------------
a. Except as may be otherwise specifically provided in this Agreement,
this Agreement is not intended to and shall not confer upon any other
person or business entity, other than the parties hereto, any rights
or remedies with respect to the subject matter hereof.
13
<PAGE>
b. This Agreement may be executed in any number of counterpart copies,
each of which shall be deemed an original, but which taken together
shall constitute a single instrument.
c. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York pertaining to contracts entered into
and to be performed entirely within the State of New York, regardless
of the place of making or performance.
d. All paragraph headings and captions used herein and in the schedules
hereto are for the convenience of the parties only and shall not be
part of the text hereof or affect the meaning of this Agreement.
IN WITNESS WHEREOF, GoAmerica and BellSouth have caused this Agreement to
be duly executed by their respective duly authorized representatives as of the
day and year first above written.
BELLSOUTH WIRELESS DATA L.P. GOAMERICA COMMUNICATIONS
CORPORATION
/s/ Chas Nelson /s/ Aaron Dobrinsky
____________________________ ____________________________
Signature Signature
Chas Nelson Aaron Dobrinsky
____________________________ ____________________________
Name (Print) Name (Print)
Sr. VP Sales President
____________________________ ____________________________
Title Title
SCHEDULE 2.2
SCHEDULE OF CHARGES
I. One Time Charges
----------------
*****................................... $*****
Per Fixed Terminal connection to the BellSouth Facilities
II. Recurring Charges for Host Connection
-------------------------------------
***** Confidential Portion omitted and filed separately with the Securities and
Exchange Commission.
14
<PAGE>
*****................................... $*****
In addition to BellSouth's Fixed Terminal charges, GoAmerica shall procure
from a carrier of its choice the necessary leased line(s) between the
GoAmerica Facilities and a point of presence of the BellSouth Facilities
specified by BellSouth as the point of interconnection. GoAmerica shall pay
directly to such carrier all initial and recurring charges for such leased
lines. BellSouth's fixed terminal connection charges include the use
maintenance and administration of two (2) digital service units provided by
BellSouth. Higher speed fixed terminal connections are available at higher
rates.
III. Recurring Charges for Subscriber Units
--------------------------------------
Whenever GoAmerica requests that BellSouth activate a Subscriber Unit under
this Agreement, GoAmerica shall designate to BellSouth in writing by MAN
Number which one of the following Price Plans shall apply to such
Subscriber Unit. The Regular Price Plan shall apply to any Subscriber Unit
for which GoAmerica fails to make such a designation at the time of
activation.
Regular Price Plan
------------------
Any Subscriber unit billable under this Agreement shall be billed each
month at the rate of i) $***** for the first ***** or part thereof plus ii)
$***** for each ***** or part thereof in excess of the ***** limit.
Special Price Plans
-------------------
For each Subscriber Unit activated under a Special Price Plan, GoAmerica
shall pay BellSouth at the following rates, and no discount shall be
applied:
*****................................... $*****
For ***** use of the BellSouth Services in connection with use of the
GoAmerica/BellSouth Services by GoAmerica *****. GoAmerica shall not
activate more than ***** such subscriptions for any single such GoAmerica
*****. Subscriptions at this price may not be activated for or used by any
end user who is not an authorized GoAmerica *****) A "GoAmerica *****"
means a business that has entered into a written agreement with GoAmerica
which agreement authorizes such business to market, promote and sell the
GoAmerica/BellSouth Services. Subscriptions at this price may not be
activated for or used for any purpose other than as provided above.
*****................................... $*****
For ***** use of the BellSouth Services in connection with the
GoAmerica/BellSouth Services for ***** activities of ***** to demonstrate,
test or promote the use of the GoAmerica/BellSouth Services in connection
with products or services offered by such *****. *****. GoAmerica shall not
activate more than ***** such
**** Confidential Portion omitted and filed separately with the Securities and
Exchange Commission.
15
<PAGE>
subscriptions for any single such *****. Subscriptions at this price may
not be activated for or used by any end user who is not a ***** as defined
above.
*****................................... $*****
For ***** use of the BellSouth Services in connection with the
GoAmerica/BellSouth Services for ***** activities of GoAmerica and ***** to
test demonstrate, market or promote the use of the GoAmerica/BellSouth
Services in connection with products or services offered by ***** such as
the *****. GoAmerica shall not activate more than ***** such subscriptions.
Subscriptions at this price may not be activated for or used for any
purpose other than as provided above, and each ***** Subscription shall be
identified and designated as such by MAN number in writing by GoAmerica at
the time of activation.
*****................................... $*****
For ***** use of the BellSouth Services in connection with evaluation of
the GoAmerica/BellSouth Services for not more than ***** days (the
"*****"). For each Subscriber Unit activated under the *****, before
expiration of the ***** with respect to such Subscriber Unit, GoAmerica,
shall designate in writing to BellSouth a Regular Price Plan (as set forth
above) which shall apply to such Subscriber Unit after the *****. If
GoAmerica fails to make such designation, BellSouth shall deactivate such
Subscriber Unit upon expiration of the *****.
*****................................... $*****
Under this Plan a subscriber may send an ***** number of kilobytes of data
using the BellSouth Services in connection with the GoAmerica/BellSouth
Services for ***** activities of ***** to demonstrate, test or promote the
use of the GoAmerica/BellSouth Services in connection with products or
services offered by *****. GoAmerica shall not activate more than *****
such subscriptions for *****.
*****................................... $*****
Under this Plan a subscriber may send an ***** number of kilobytes of data
using the BellSouth Services subject to the following:
i) GoAmerica shall make this Plan available only to consumers who
purchase a ***** on or after the date of this Amendment. The only units
activated under this Plan shall be ***** used in connection with the
GoAmerica/BellSouth Services.
ii) At any time or times hereafter as elected by BellSouth in its sole
discretion, BellSouth shall have the continuing right, after ***** days
notice to GoAmerica, to amend or discontinue this Plan. It is provided,
however, that BellSouth shall not change the price and
*****Confidential portion omitted and filed separately with the Securities
and Exchange Commission.
16
<PAGE>
allowed kilobyte usage for any units activated under the plan until such
time as the unit has been activated for a period of at *****.
iii) BellSouth shall not be obligated to make an activation under this Plan
unless the serial number of the ***** which the subscriber will use to
access the BellSouth Services is first provided to BellSouth by GoAmerica.
GoAmerica shall not request or permit an activation under this Plan unless
it has obtained from each subscriber a certification from the subscriber
certifying that the subscriber has purchased a *****, the serial number of
that computer, and that the subscriber shall access the BellSouth Service
under this Plan only through the use of a *****.
iv) GoAmerica shall for a period of at least ***** after this Agreement is
terminated, maintain the original certification described in paragraph iii
above and other records sufficient to establish that all activations under
this Plan meet the requirements of item "i" of this Plan, above. BellSouth
shall have the right, no more often than *****, during ***** business
hours, to have these records audited by an independent third party to
assure compliance with item "i" above. The independent third party shall
first sign a non-disclosure agreement reasonably satisfactory to GoAmerica
and BellSouth which protects the identities of the subscribers from
disclosure to BellSouth and third parties. Circumstances of disclosure and
use for purposes of any litigation shall be controlled by a protective
order granted pursuant to the rules of the court before which any such
litigation is pending.
IV. Mobile-to-Mobile Charges
------------------------
Data transmitted between two mobile units requires two transmissions and
the number of bytes contained in each of the two transmissions will be
billed to each Subscriber Unit. The number of bytes contained in Mobile-to-
Mobile transmissions shall be billed at BellSouth's then current standard
per kilobyte rates, and no discount shall be applied.
V. Other Charges
-------------
*****................................... *****
Applies to any amount not paid by its due date as Provided in this
Agreement. Prorated for each day past due.
*****................................... *****
Applies when GoAmerica requests a monthly Reseller Traffic Detail Report or
Host Detail Report in either BellSouth's standard electronic format or hard
copy
VI. Troubleshooting Services
------------------------
Hourly (minimum charge - 2 hours)............ $***** per hour*
Daily............................ $***** per day (***** hours)*
*****Confidential portion omitted and filed separately with the Securities
and Exchange Commission.
17
<PAGE>
These rates apply only to requests that BellSouth Customer Service resolve
problems which are not caused by problems occurring in the BellSouth
Facilities. Rates do not include expenses incurred for travel, lodging,
meals and cost of materials and equipment, which will be billed separately
and reimbursed by GoAmerica.
18
<PAGE>
EXHIBIT 10.4
ARDIS
RESELLER AGREEMENT FOR MESSAGING SERVICES
-----------------------------------------
AGREEMENT dated as of August 25, 1999, between GoAmerica Communications
Corporation, a Delaware corporation, ("GoAmerica") with offices at 401
Hackensack Ave. Hackensack, NJ 07601 and ARDIS Company, a New York general
partnership ("ARDIS"), with offices at 300 Knightsbridge Parkway, Suite 500,
Lincolnshire, Illinois 60069.
WHEREAS, ARDIS is engaged in providing shared data radio-based communications
network services as authorized by the Federal Communications Commission; and
WHEREAS, GoAmerica currently provides certain software and other value added
services in the marketplace; and
WHEREAS, ARDIS and GoAmerica desire a non-exclusive relationship to pursue
opportunities within the marketplace; and
WHEREAS, ARDIS desires to provide, and GoAmerica desires to remarket ARDIS'
services subject to the terms and conditions hereof.
GOAMERICA AND ARDIS AGREE AS FOLLOWS:
1. DEFINITIONS - For purposes of this Agreement:
-----------
(a) "Market" shall mean all commercial users of the ARDIS GoAmerica
Services.
(b) "FCC" shall mean the Federal Communications Commission.
(c) "Initial Term" shall mean the period commencing on the date hereof and
ending ***** thereafter.
(d) "Prices" shall mean ARDIS prices, as set forth in Attachment A.
(e) "Services" shall mean ARDIS' shared data radio-based communications
network services which enables a user to access and communicate
wirelessly with various third party supplied information sources, or
with certain subscribers using the ARDIS radio data network. This
Service includes the use of the ARDIS Message Switches and related
network software when accessed by user procured terminals and compatible
software, and the eLink(TM) wireless email services.
(f) "Territory" shall mean the United States and any other countries or
jurisdictions where the Services are provided by ARDIS in accordance
with applicable legal and regulatory requirements.
***** Confidential Portion omitted and filed separately with the Securities and
Exchange Commission.
<PAGE>
(g) "Additional Services" shall mean the GoAmerica webhand(TM) suite of
services running over the ARDIS radio data network.
2. SCOPE OF AGREEMENT
------------------
ARDIS hereby agrees to establish a non-exclusive marketing relationship with
GoAmerica as follows:
(a) ARDIS hereby licenses GoAmerica to be a non-exclusive remarketer of
ARDIS Services within the Market and Territory. GoAmerica acknowledges
that ARDIS reserves the right to market directly to end users and to
license other resellers within the Market and Territory.
(b) GoAmerica shall develop and implement a non-exclusive marketing plan to
facilitate the remarketing of the Services by GoAmerica. Such marketing
plan may include, without limitation:
(i) joint development of product literature describing the Services
and their capabilities;
(ii) joint attendance at trade shows, conferences and related events
within the marketplace;
(iii) joint presentations to prospective clients of the Services;
(iv) joint press releases, advertising and participation at the ARDIS
booth at certain trade shows;
(v) joint marketing projections for the Services;
(vi) joint development activities with terminal hardware vendors; and
(vii) previews of ARDIS' future technology and business plan.
(d) GoAmerica may use the ARDIS trademarks and ARDIS trade name within the
Market and Territory in sales literature, press releases and other
promotional media subject to the prior written consent of ARDIS as
provided in Section 2(e) below.
(e) GoAmerica and ARDIS agree not to publish or use advertising, sales
promotions or any publicity matters, including the mention of the
existence of this Agreement without prior written consent, which consent
will not be unreasonably withheld.
3. GOAMERICA MARKETING AND DEVELOPMENT OBLIGATIONS
-----------------------------------------------
2
<PAGE>
(a) GoAmerica shall be responsible for insuring that all users to whom it
remarkets ARDIS' Services are, if required by applicable law or
regulation, licensed by the FCC prior to use of ARDIS' Services. ARDIS
shall, however, provide administrative and consultative support to
GoAmerica to facilitate the licensing process.
(b) During the term of this Agreement, GoAmerica will use commercially
reasonable efforts to meet the following performance milestones within
the timeframes indicated below:
================================================================================
TIME ***** ***** *****
- ----
- --------------------------------------------------------------------------------
Number of GoAmerica
Subscriber Units Using ARDIS ***** ***** *****
Services *****
================================================================================
(c) In addition to the reseller responsibilities indicated in Attachment B,
GoAmerica agrees:
(a) To provide E-mail connectivity via a GoAmerica Internet domain
name.
(b) To be responsible for end-users registration and for providing
ARDIS with the following information, including but not limited to Pin
number, and LI number.
4. PRICING
-------
GoAmerica will pay ARDIS the Prices as discounted and set forth in
Attachment A.
5. BILLING AND PAYMENTS
--------------------
(a) GoAmerica will be responsible for billing to GoAmerica's end user
customers for the Services and Additional Services.
(b) ARDIS will provide GoAmerica with the information to bill
GoAmerica's end user customers via a monthly invoice that shows
individual unit usage in bytes to GoAmerica within ten (10) days'
after the end of the monthly billing period.
(c) Payment to ARDIS will be due within thirty (30) days of the receipt
of the invoice by GoAmerica.
(d) TAXES: In addition to the charges due under this Agreement,
GoAmerica agrees to pay amounts equal to any taxes resulting from
this Agreement, exclusive of taxes based on ARDIS' net income and
subject to applicable legal exemptions.
6. ORDERING
--------
(a) GoAmerica shall order data terminals for its end user customers
directly from ***** and may have the benefit of the terms and
conditions of the ***** Supply Agreement. ***** shall work with
***** to supply the relevant sections of the ***** Supply Agreement
to GoAmerica, redacted if necessary.
***** Confidential Portion omitted and filed separately with the Securities and
Exchange Commission.
3
<PAGE>
(b) GoAmerica shall order the Services for each new end user customer
electronically as mutually agreed. ARDIS shall process all such
orders no later than one day after receipt of order.
7. SUPPORT FOR ADDITIONAL UNITS: Service for additional terminals, if
----------------------------
available, will be provided under these same terms and conditions. Service for
such additional end user terminal registrations shall be authorized by GoAmerica
through the issuance of a purchase order which references this Agreement, the
number of terminals to be activated or registered, the selected Service Plan and
selected additional Services, if any. It is specifically agreed between
GoAmerica and ARDIS that no such purchase order shall be effective to modify,
substitute or supplement the terms of this Agreement.
8. DENIAL OF SERVICE: GoAmerica agrees that its end user customers will
-----------------
(a) observe and abide by all applicable statutes, laws, ordinances, rules and
regulations including, but not limited to, those of the FCC, and (b) use the
ARDIS Network or Systems on a shared basis with other companies so as not to
cause undue interference with any other companies using such systems. GoAmerica
acknowledges that ARDIS reserves the right to deny service to any GoAmerica end
user should the Service be used other than as intended [e.g. for data streaming
or for non HTTP file transfer]
9. TERM / TERMINATION
------------------
(a) This Agreement shall have an Initial Term of ***** and shall
automatically continue after the Initial Term until terminated by
either GoAmerica or ARDIS upon ***** written notice.
(b) ARDIS may modify the GoAmerica discount specified in Attachment "A"
of this Agreement upon ***** written notice for GoAmerica's failure
to meet the applicable performance levels set forth in Paragraph
3(b). Should this contract be modified pursuant to this Paragraph,
ARDIS shall continue to provide ARDIS communication services to
GoAmerica's then current users of the Services at the revised
discount
(c) Notwithstanding anything to the contrary contained herein, either
GoAmerica or ARDIS may terminate this Agreement (i) upon the
expiration of ***** from the receipt by the other party of written
notice of material breach by such other of its obligations under
this Agreement if such breach is not cured within such *****
period, or (ii) if the other party shall dissolve or commit an act
of bankruptcy or become insolvent, by sending such party written
notice of termination which shall state the nature of the breach.
Notwithstanding the foregoing, this Agreement shall terminate
immediately if the authorization held by ARDIS is revoked by the
FCC.
10. COMPANY RESPONSIBILITIES:
-------------------------
***** Confidential Portion omitted and filed separately with the Securities and
Exchange Commission.
4
<PAGE>
GoAmerica acknowledges that it will inform its end user customers that:
. 100% radio coverage for any on-street or in-building area at all
times is improbable;
. radio frequency coverage maps, if provided, are intended to
indicate expected coverage and are not binding as an exact
representation of coverage;
. uninterrupted or error-free operation is unobtainable; and
. occasionally network availability will be lost, and that ARDIS
cannot be responsible for transmission errors, for corruption of
data, or for the security of data during transmission via public
telecommunications facilities.
Consequently, the end user customers of GoAmerica should asses the
effect such problems will have on their operation and develop, implement
and maintain procedures, external to the ARDIS Network, to safeguard
their programs and data and to establish procedures for the backup and
reconstruction of lost data and programs adequate for their protection.
11. COMPANY PROGRAM AND DATA SECURITY: GoAmerica programs and data which is
----------------------------------
not end user customer data and which come into ARDIS' custody under this
Agreement shall be deemed to be the confidential information (as defined
in Section 16(a)) of GoAmerica.
12. DEFAULT AND REMEDIES
--------------------
If GoAmerica fails to make any payment of any sum due after thirty (30)
days, ARDIS may add a service charge at the maximum rate permitted by
applicable law. Such additional charge shall be due and payable upon
receipt of invoice.
If GoAmerica fails to make any payment of any sum due or fails to
perform as required by any other provision hereunder, and continues in
such failure for fifteen (15) days' after written notice has been sent
by ARDIS and received by GoAmerica, GoAmerica shall be deemed in default
under this Agreement.
In the event of default, ARDIS has the right to immediately terminate
this Agreement retain all payments made hereunder, and deny GoAmerica
and its customers any service provided under this Agreement by or
through the ARDIS Network or Systems. Each and all of the rights and
remedies of ARDIS hereunder are cumulative to and not in lieu of each
and every other such right and remedy.
There will be a ***** reactivation fee for customers who wish to re-
establish service once ARDIS has suspended or terminated service.
13. FORCE MAJEURE
-------------
***** Confidential Portion omitted and filed separately with the Securities and
Exchange Commission.
5
<PAGE>
Neither party hereto shall have any liability under this Agreement for
failure to perform, or delay in providing services due directly or
indirectly to causes beyond the reasonable control of such party
including, but not restricted to, acts of God, or governmental entities,
or of the public enemy, strikes, or unusually severe weather conditions.
14. TRAINING AND TECHNICAL SUPPORT
------------------------------
(a) ARDIS shall make available to GoAmerica, at no charge, reasonable
initial training on the use of ARDIS Services.
(b) ARDIS shall continue to provide GoAmerica, at no charge, with
technical assistance performed by competent ARDIS employees in
connection with ongoing use of the Services by GoAmerica and its
customers. Such assistance shall include, without limitation,
telephone consultation, updates relating to changes and
enhancements to the Services and diagnostic services.
15. THIRD PARTY LIABILITY
---------------------
GoAmerica warrants that it will inform its clients and others to whom it
remarkets ARDIS' services, of the applicable terms and conditions of
this Agreement, as expressed in Attachment C hereof, and warrants that
it will indemnify ARDIS Company against any liability from GoAmerica's
end user customers resulting from their use of the ARDIS service.
16. CONFIDENTIAL INFORMATION
------------------------
(a) GoAmerica and ARDIS shall not disclose each other's confidential
information and trade secrets including, without limitation data,
software, documentation, client names and addresses, and all other
proprietary information of such party to persons other than
employees of each other who are required to have such information
for the furtherance of the purposes of this Agreement. Each of
GoAmerica and ARDIS shall take all steps reasonably calculated to
protect such information from unauthorized disclosure. This
obligation shall survive the termination of this Agreement.
(b) Nothing in this Agreement shall cause either party to have any
rights or licenses in any inventions, patents, trade secrets,
trademarks and/or copyrights of the other relating to the subject
matter of this Agreement.
6
<PAGE>
17. INDEPENDENT RELATIONSHIP
------------------------
GoAmerica and ARDIS specifically disclaim any partnership relationship,
and this Agreement shall in no way be construed to make GoAmerica and
ARDIS partners or joint venturers. For the purposes of this Agreement,
GoAmerica and ARDIS shall be deemed to be independent contractors.
Furthermore, in the event GoAmerica elects to sell ARDIS services to
the U.S. Government, U.S. State or Local or any foreign Government, or
to a prime contractor selling to a Government customer, GoAmerica does
so at their own option and risk and agrees not to obligate ARDIS as a
subcontractor or otherwise to such customers. GoAmerica remains solely
and exclusively responsible for compliance with all statutes,
regulations, and clauses governing sales to the U.S. Government State or
Local or any foreign Government or to a prime contractor selling to a
Government customer. ARDIS makes no representations, certifications, or
warranties whatsoever with respect to the ability of its goods, or
services, or prices to satisfy any such statutes, regulations, or
clauses.
18. WARRANTIES:
-----------
ARDIS warrants that its Network is in good working order on the date of
the Agreement and conforms to ARDIS's officially published performance
information. ARDIS will provide preventative and remedial service to
keep its Network in, or to restore it to, good working order. ARDIS does
not warrant uninterrupted service or error-free operation.
19. DISCLAIMER: THE FOREGOING WARRANTIES ARE IN PLACE FOR ALL OTHER
-----------
WARRANTIES, EXPRESSED OR IMPLIED INCLUDING, BUT NOT LIMITED TO THE
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE.
20. EXCLUSIVE REMEDY:
-----------------
In the event of any failure or delay attributable to the fault of ARDIS
or its subcontractors, or for breach of warranty, GoAmerica's sole
remedy shall be limited to a refund of GoAmerica's charges for the
affected services during the time of such failure or delay. GoAmerica
agrees, however, that no refund shall be made for the losses resulting
from a single failure or delay which do not exceed one hundred ($
100.00) dollars.
21. LIMITATION OF LIABILITY:
------------------------
(a) Neither party shall be liable for special, incidental, indirect or
consequential damages under this Agreement, even if such party has
been advised of the possibility of such damages.
(b) Except for GoAmerica's obligation to pay amounts owing under
Section 5 of this Agreement and GoAmerica's indeminity obligation
pursuant to paragraph 15, GoAmerica's and ARDIS' total liability
for any other claim arising out of or in any way connected with
this Agreement and the sole remedy regardless of the form of
7
<PAGE>
action (whether in contract, tort or otherwise) shall be actual
damages not to exceed fifty thousand ($50,000) dollars.
22. NOTICES
-------
All notices, demands, offers, elections, requests or other
communications required or permitted by this Agreement shall be in
writing and shall be sent by prepaid registered or certified mail,
return receipt requested, and addressed to the parties at the addresses
set forth below or to such other address as shall, from time to time, be
supplied by any party to the other party by like notice, and shall be
deemed given on the date mailed. All such notices shall be addressed to
persons listed below:
<TABLE>
<S> <C>
If to ARDIS: If to GoAmerica
Vice President Attn: Mr. Joseph A. Korb
Messaging Services Executive Vice President & Director
ARDIS Company GoAmerica Communications Corp
300 Knightsbridge Parkway, Suite 500 401 Hackensack Ave.
Lincolnshire, Illinois 60069 Hackensack, NJ 07601
Copy: Copy: Chief Financial Officer
Matthew J. Whitehead, II GoAmerica Communications Corp
Vice President and Executive Counsel 401 Hackensack Ave.
ARDIS Company Hackensack, NJ 07601
300 Knightsbridge Parkway, Suite 500
Lincolnshire, Illinois 60069
</TABLE>
23. GENERAL
-------
This Agreement shall be binding on the successors and permitted assigns
of the parties hereto. Neither party shall assign this Agreement without
the other's prior written consent except in connection of a sale of
substantially all of the assets of the business to which this agreement
pertains.
If any provision of this Agreement or the application thereof to any
party or circumstance shall be determined by any court of competent
jurisdiction to be invalid and unenforceable to any extent, the
remainder of this Agreement or the application of such provision to such
person or circumstance, other than those as to which it is so determined
invalid or unenforceable, shall not be affected thereby. and each
provision hereof shall be valid and shall be enforced to the fullest
extent permitted by law.
Neither party may bring an action, regardless of form, arising out of
this Agreement more than one year after the cause of action has arisen.
ARDIS may not bring an action for nonpayment more than 2 years after the
date the last payment was due.
Failure or delay on the part of ARDIS or GoAmerica to exercise any
right, remedy, power or privilege hereunder shall not operate as a
waiver thereof. A waiver, to be effective,
8
<PAGE>
must be in writing and signed by the party making the waiver. A written
waiver of a default shall not operate as a waiver of any other default
or of the same type default on a future occasion.
The headings in this Agreement are solely for convenience of reference
and shall not affect its interpretation.
This Agreement shall be constructed and enforced in accordance with the
laws of the State of Illinois.
This Agreement is the entire agreement between the parties with respect
to the subject matter hereof, and no alteration, modification or
interpretation hereof shall be binding unless in writing signed by both
parties.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the day and year first written.
GOAMERICA ARDIS COMPANY
By: /s/ Joseph Korb /s/ Dan Croft
---------------------- ----------------------
(AUTHORIZED SIGNATURE) (AUTHORIZED SIGNATURE)
Joseph Korb Dan Croft
---------------------- ----------------------
(TYPE OR PRINT NAME) (TYPE OR PRINT NAME)
Executive Vice President VP
---------------------- ----------------------
(TITLE) (TITLE)
8/25/99 8/24/99
---------------------- ----------------------
(DATE) (DATE)
9
<PAGE>
ATTACHMENT "A"
GOAMERICA PRICING FOR PROVIDING THE SERVICES AND THE ADDITIONAL SERVICES
Network Registration Fee: $***** per unit
- ------------------------
Volume Commitments:
- ------------------
Qty. Base Wholesale Price
***** devices $*****
***** devices $*****
***** devices $*****
Unlimited Plan
- --------------
<TABLE>
<S> <C> <C> <C>
Wholesale base price $***** (****% margin) $***** (****%) $***** (****%)
Options:
Lower the wholesale price by doing the following:
. Bill customer/collections -$***** -$***** -$*****
. Hardware fulfillment
. End-user fulfillment -$***** -$***** -$*****
. Private labeling -$***** -$***** -$*****
. Customer Care 1/st/ level -$***** -$***** -$*****
. Operator Assisted Messaging -$***** -$***** -$*****
. Branding, dominant position in
marketing to customer base -$***** -$***** -$*****
------- ------- -------
Wholesale airtime price = $***** $***** $*****
</TABLE>
Faxing $*****/page
Limited Usage Plan
- ------------------
$***** plus $**** per kilobyte per subscriber.
***** Confidential Portion omitted and filed separately with the Securities and
Exchange Commission.
10
<PAGE>
ATTACHMENT B
RESELLER
RESPONSIBILITIES
================================================================================
SALES RESPONSIBILITY
- --------------------------------------------------------------------------------
Lead Generation GoAmerica shall be the primary sales lead
provider. ARDIS may provide leads to
GoAmerica as ARDIS uncovers such
opportunities as part of its normal course
of business.
- --------------------------------------------------------------------------------
Proposal Support GoAmerica will be responsible for
developing any and all proposal materials.
ARDIS will support with ARDIS background,
network coverage, cost justification model
development and any other boiler plate
requirements.
- --------------------------------------------------------------------------------
PROJECT IMPLEMENTATION
- --------------------------------------------------------------------------------
Implementation Training GoAmerica will be responsible for all
training to include ultimate customer,
help desk system administrator. ARDIS will
support such training with telephone and
documentation support.
- --------------------------------------------------------------------------------
Hardware/Software Install GoAmerica will be responsible for
installation and testing of all hardware
and software components.
- --------------------------------------------------------------------------------
POST INSTALL SUPPORT
- --------------------------------------------------------------------------------
Customer Billing - ARDIS Airtime GoAmerica will remit payment for the
timely payment of fees and charges for
ARDIS Airtime as invoiced.
- --------------------------------------------------------------------------------
Help Desk (Ultimate Customer) GoAmerica will provide the ultimate
customer with help desk training as
required and will act as the ultimate
customer's first line trouble interface.
ARDIS will provide second level help desk
support to GoAmerica; not to GoAmerica's
customers.
================================================================================
11
<PAGE>
ATTACHMENT C
1. Nature and Control of ARDIS Network: GoAmerica is remarketing ARDIS'
-----------------------------------
Services to its clients in conjunction with database information services
and/or other value-added services. ARDIS controls the radio network which
enables communication and provides access in accordance with FCC rules and
regulations to and through GoAmerica on a shared basis. All clients of
GoAmerica shall use the ARDIS Network so as not to cause undue interference
with any other users of the ARDIS Network.
2. Security: Clients of GoAmerica are responsible for developing and/or
--------
maintaining procedures, external to the ARDIS Network, to safeguard
programs and data, and for the backup and reconstruction of lost data,
programs or procedures. Consequently, Clients of GoAmerica release ARDIS
from all liability for the loss or alteration of programs or data or their
acquisition by another party, except for ARDIS' failure to implement those
aspects of security procedures which are under ARDIS' control. ARDIS will
not be responsible for transmission errors, corruption of data or for the
security of data during transmission via public telecommunications
facilities
3. Confidentiality: Any and all programs and other materials provided by ARDIS
---------------
to GoAmerica for distribution or use by its clients in connection with the
use of the ARDIS Services, shall remain the exclusive and confidential
property of ARDIS, are licensed solely for use in conjunction with the
ARDIS Services, shall not be reproduced or copied except as required for
the authorized use of the Services, and shall be returned to ARDIS upon
request.
4. Limitation of Liability: Clients of GoAmerica hereby agree that the
------------------------
following provisions govern their rights against ARDIS in the event that
they experience a partial or total failure, malfunction or defect in any of
the Services provided by ARDIS under the above-referenced Agreement. In no
event shall ARDIS be liable for incidental or consequential damages
(including without limitation, lost profits, lost savings, incidental
damages or other economic consequential damages, even if ARDIS has been
advised of the possibility of such damages) to the full extent such may be
disclaimed by law. Further, Ardis Company shall not be liable for any
damages based on any third party claim.
12
<PAGE>
EXHIBIT 10.5
GOAMERICA COMMUNICATIONS CORP.
EMPLOYEE-AT-WILL
INVENTION ASSIGNMENT, CONFIDENTIALITY
AND NON-SOLICITATION AGREEMENT
In consideration of my employment or continued employment by GoAmerica
Communications Corp., a Delaware corporation or any subsidiary or parent
corporation thereof (the "Company"), I hereby represent and agree as follows:
1. I understand that the Company is, and during the time of my active
employment was, engaged in the business of providing wireless internet service
and that I may have or had access to or acquire or acquired information with
respect to Confidential Information (as defined below), including software,
processes and methods, development tools, scientific, technical and/or business
innovations.
2. Disclosure of Innovations. I agree to disclose in writing to the
-------------------------
Company all inventions, improvements and other innovations of any kind that I
may have made, conceived, developed or reduced to practice, alone or jointly
with others, during the term of my employment with the Company, whether or not
they are related to my work for the Company and whether or not they are eligible
for patent, copyright, trademark, trade secret or other legal protection
("Innovations"). Examples of Innovations shall include, but are not limited to,
discoveries, research, inventions, formulas, techniques, processes, know-how,
marketing plans, new product plans, production processes, advertising, packaging
and marketing techniques and improvements to computer hardware or software.
3. Assignment of Ownership of Innovations. I agree that all Innovations
--------------------------------------
are the sole and exclusive property of the Company and I hereby assign all of my
rights, title or interest in the Innovations and in all related patents,
copyrights, trademarks, trade secrets, rights of priority and other proprietary
rights to the Company. At the Company's request and expense, during and after
the period of my employment with the Company, I will assist and cooperate with
the Company in all respects and will execute documents, and, subject to my
reasonable availability, give testimony and take further acts requested by the
Company to obtain, maintain, perfect and enforce for the Company patent,
copyright, trademark, trade secret and other legal protection for the
Innovations. I hereby appoint the President and Chief Executive Officer of the
Company as my attorney-in-fact to execute documents on my behalf for this
purpose. I have attached hereto as Exhibit "A" a list of Innovations as of the
date hereof which belong to me and which are not assigned to the Company
hereunder (the "Prior Innovations"), or, if no such list is attached, I
represent that there are no Prior Innovations.
<PAGE>
4. Protection of Confidential Information of the Company. I understand
-----------------------------------------------------
that my work as an employee of the Company created a relationship of trust and
confidence between myself and the Company. During and after the period of my
employment with the Company, I will not use or disclose or allow anyone else to
use or disclose any "Confidential Information" (as defined below) relating to
the Company, its products, suppliers or customers except as may be necessary in
the performance of my work for the Company or as may be authorized in advance by
appropriate officers of the Company. "Confidential Information" shall include
------------------------
methodologies, processes, tools, innovations, business strategies, financial
information, forecasts, personnel information, customer lists, trade secrets and
any other non-public technical or business information, whether in writing or
given to me orally, which I know or have reason to know the Company would like
to treat as confidential for any purpose, such as maintaining a competitive
advantage or avoiding undesirable publicity. I will keep Confidential
Information secret and will not allow any unauthorized use of the same, whether
or not any document containing it is marked as confidential. These
restrictions, however, will not apply to Confidential Information that has
become known to the public generally through no fault or breach of mine or that
the Company regularly gives to third parties without restriction on use or
disclosure. Upon termination of my work with the Company, I will promptly
deliver to the Company all documents and materials of any nature pertaining to
my work with the Company and I will not take with me any documents or materials
or copies thereof containing any Confidential Information.
5. Non-Solicitation. I understand that my work as an employee of the
----------------
Company created a relationship of trust and confidence between myself and the
Company. During and for a period of two years after the period of my employment
with the Company, I will not request or otherwise attempt to induce or
influence, directly or indirectly, any present customer or supplier, or
prospective customer or supplier, of the Company, or other persons sharing a
business relationship with the Company to cancel, to limit or postpone their
business with the Company, or otherwise take action which might be to the
material disadvantage of the Company. During and for a period of two years
after the period of my employment with the Company, I will not hire or solicit
for employment, directly or indirectly, or induce or actively attempt to
influence, any Employee of the Company or any Affiliate of the Company, as such
term is defined in the Securities Act of 1933, as amended, to terminate his or
her employment or discontinue such person's consultant, contractor or other
business association with the Company.
6. Other Agreements. I represent that my performance of all the terms of
----------------
this Agreement and my duties as an employee of the Company will not breach any
invention assignment agreement, confidential information agreement, non-
competition agreement or other agreement with any former employer or other
party. I represent that I have not and will not bring with me to the Company or
use in the performance of my duties for the Company any documents or materials
of a former employer that are not generally available to the public.
7. Disclosure of this Agreement. I hereby authorize the Company to notify
----------------------------
others, including but not limited to customers of the Company and any of my
future employers, of the terms of this Agreement and my responsibilities
hereunder.
8. Injunctive Relief. I understand that in the event of a breach or
------------------
threatened breach of this Agreement by me the Company may suffer irreparable
harm and monetary damages alone
-2-
<PAGE>
would not adequately compensate the Company. The Company will therefore be
entitled to injunctive relief to enforce this Agreement.
9. Enforcement and Severability. I acknowledge that each of the
----------------------------
provisions in this Agreement are separate and independent covenants. I agree
that if any court shall determine that any provision of this Agreement is
unenforceable with respect to its term or scope such provision shall nonetheless
be enforceable by any such court upon such modified term or scope as may be
determined by such court to be reasonable and enforceable. The remainder of
this Agreement shall not be affected by the unenforceability or court ordered
modification of a specific provision.
10. Governing Law. The laws of the State of New Jersey shall govern the
-------------
interpretation, validity and performance of the terms of this Agreement,
regardless of the law that might be applied under principles of conflicts of
law.
11. Superseding Agreement. I understand and agree that this Agreement
---------------------
contains the entire agreement of the parties with respect to subject matter
hereof and supersedes all previous agreements and understandings between the
parties with respect to its subject matter.
12. Acknowledgments. I acknowledge that I have read this agreement, was
---------------
given the opportunity to ask questions and sufficient time to consult an
attorney and I have either consulted an attorney or affirmatively decided not to
consult an attorney. I understand that my obligations under this Agreement
survive the termination of my employment with the Company.
I UNDERSTAND THAT I AM AN EMPLOYEE-AT-WILL WITH THE COMPANY, MEANING THAT
EITHER I OR THE COMPANY IS COMPLETELY FREE TO TERMINATE OUR EMPLOYMENT
RELATIONSHIP AT ANY TIME AND FOR ANY REASON OR FOR NO REASON, WITHOUT
INCURRING ANY OBLIGATIONS OR LIABILITIES OF ANY KIND WHATSOEVER. I FURTHER
ACKNOWLEDGE THAT I HAVE HAD A FULL OPPORTUNITY TO REVIEW THIS AGREEMENT AND
CONSULT WITH COUNSEL OF MY CHOICE IF I SO CHOOSE REGARDING ITS TERMS, AND
THAT I AM FREELY ENTERING THIS AGREEMENT WITH A FULL UNDERSTANDING OF ITS
EFFECTS. I FURTHER UNDERSTAND THAT THIS AGREEMENT SUPERSEDES ANY AND ALL
PRIOR OR CONTEMPORANEOUS REPRESENTATIONS OR AGREEMENTS, WHETHER ORAL,
WRITTEN, OR IMPLIED, AND MAY NOT BE MODIFIED IN ANY WAY EXCEPT BY A SIGNED
WRITING WHICH SPECIFICALLY REFERS TO THIS AGREEMENT AND IS SIGNED BY AN
OFFICER OR OTHER DULY AUTHORIZED REPRESENTATIVE OF THE COMPANY.
************
-3-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written below.
Date: _________________ _____________________________________
Name of Employee:
Address: ___________________________________
___________________________________
___________________________________
___________________________________
GoAmerica Communications Corp.
Date: _________________ By:______________________________
-4-
<PAGE>
EXHIBIT "A"
Prior Innovations:
<PAGE>
EXHIBIT 10.6
GOAMERICA, INC.
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is made as of December,
1999, by and between GoAmerica, Inc., a Delaware corporation (the "Company"),
and [INSERT NAME] ("Indemnitee").
WHEREAS, Indemnitee is an officer and/or director of the Company and
performs a valuable service in such capacity for the Company;
WHEREAS, the Company and Indemnitee recognize the substantial increase
in corporate litigation in general, subjecting directors, officers, employees,
agents and fiduciaries to expensive litigation risks at the same time as the
availability and coverage of liability insurance may be limited;
WHEREAS, the Company and Indemnitee further recognize the difficulty
in obtaining liability insurance for its directors, officers, employees, agents
and fiduciaries, the significant increases in the cost of such insurance and the
general reductions in the coverage of such insurance;
WHEREAS, Indemnitee does not regard the current protection available
as adequate under the present circumstances, and the Indemnitee and other
directors, officers, employees, agents and fiduciaries of the Company may not be
willing to continue to serve in such capacities without additional protection;
and
WHEREAS, the Company desires to attract and retain the services of
highly qualified individuals, such as Indemnitee, to serve the Company and, in
part, in order to induce Indemnitee to continue to provide services to the
Company as an officer and/or director, the Company wishes to provide for the
indemnification and advancing of expenses to Indemnitee to the maximum extent
permitted by law.
NOW, THEREFORE, the Company and Indemnitee hereby agree as follows:
1. Indemnification.
---------------
(a) Indemnification of Expenses. The Company shall indemnify
---------------------------
Indemnitee to the fullest extent permitted by law if Indemnitee was or is or
becomes a party to or witness or other participant in, or is threatened to be
made a party to or witness or other participant in, any threatened, pending or
completed action, suit, proceeding or alternative dispute resolution mechanism,
or any hearing, inquiry or investigation that Indemnitee in good faith believes
might lead to the institution of any such action, suit, proceeding or
alternative dispute resolution mechanism, whether civil, criminal,
administrative, investigative or other (hereinafter a "Claim")
<PAGE>
by reason of (or arising in part out of) any event or occurrence related to the
fact that Indemnitee is or was a director, officer, employee, agent or fiduciary
of the Company, or any subsidiary of the Company, or is or was serving at the
request of the Company as a director, officer, employee, agent or fiduciary of
another corporation, partnership, joint venture, trust or other enterprise, or
by reason of any action or inaction on the part of Indemnitee while serving in
such capacity (hereinafter an "Indemnifiable Event") against any and all
expenses (including attorneys' fees and all other costs, expenses and
obligations incurred in connection with investigating, defending, being a
witness in or participating in (including on appeal), or preparing to defend, be
a witness in or participate in, any such action, suit, proceeding, alternative
dispute resolution mechanism, hearing, inquiry or investigation), judgments,
fines, penalties and amounts paid in settlement (if such settlement is approved
in advance by the Company, which approval shall not be unreasonably withheld) of
such Claim and any federal, state, local or foreign taxes imposed on the
Indemnitee as a result of the actual or deemed receipt of any payments under
this Agreement (collectively, hereinafter "Expenses"), including all interest,
assessments and other charges paid or payable in connection with or in respect
of such Expenses. Such payment of Expenses shall be made by the Company as soon
as practicable but in any event no later than thirty (30) days after written
demand by Indemnitee therefor is presented to the Company.
(b) Reviewing Party. Notwithstanding the foregoing, (i) the
---------------
obligations of the Company under Section 1(a) shall be subject to the condition
that the Reviewing Party (as described in Section 10(e) hereof) shall not have
determined (in a written opinion, in any case in which the Independent Legal
Counsel referred to in Section 1(c) hereof is involved) that Indemnitee would
not be permitted to be indemnified under applicable law, and (ii) the obligation
of the Company to make an advance payment of Expenses to Indemnitee pursuant to
Section 2(a) (an "Expense Advance") shall be subject to the condition that, if,
when and to the extent that the Reviewing Party determines that Indemnitee would
not be permitted to be so indemnified under applicable law, the Company shall be
entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the
Company) for all such amounts theretofore paid; provided, however, that if
Indemnitee has commenced or thereafter commences legal proceedings in a court of
competent jurisdiction to secure a determination that Indemnitee should be
indemnified under applicable law, any determination made by the Reviewing Party
that Indemnitee would not be permitted to be indemnified under applicable law
shall not be binding and Indemnitee shall not be required to reimburse the
Company for any Expense Advance until a final judicial determination is made
with respect thereto (as to which all rights of appeal therefrom have been
exhausted or lapsed). Indemnitee's obligation to reimburse the Company for any
Expense Advance shall be unsecured and no interest shall be charged thereon. If
there has not been a Change in Control (as defined in Section 10(c) hereof), the
Reviewing Party shall be selected by the Board of Directors, and if there has
been such a Change in Control (other than a Change in Control which has been
approved by a majority of the Company's Board of Directors who were directors
immediately prior to such Change in Control), the Reviewing Party shall be the
Independent Legal Counsel referred to in Section 1(c) hereof. If there has been
no determination by the Reviewing Party or if the Reviewing Party determines
that Indemnitee substantively would not be permitted to be indemnified in whole
or in part under applicable law, Indemnitee shall have the right to commence
litigation seeking an initial determination by the court or challenging any such
determination by the Reviewing Party or
-2-
<PAGE>
any aspect thereof, including the legal or factual bases therefor, and the
Company hereby consents to service of process and to appear in any such
proceeding. Any determination by the Reviewing Party otherwise shall be
conclusive and binding on the Company and Indemnitee.
(c) Change in Control. The Company agrees that if there is a Change
-----------------
in Control of the Company (other than a Change in Control which has been
approved by a majority of the Company's Board of Directors who were directors
immediately prior to such Change in Control) then with respect to all matters
thereafter arising concerning the rights of Indemnitee to payments of Expenses
and Expense Advances under this Agreement or any other agreement or under the
Company's Certificate of Incorporation or By-laws as now or hereafter in effect,
the Company shall seek legal advice only from Independent Legal Counsel (as
defined in Section 10(d) hereof) selected by Indemnitee and approved by the
Company (which approval shall not be unreasonably withheld). Such counsel,
among other things, shall render its written opinion to the Company and
Indemnitee as to whether and to what extent Indemnitee would be permitted to be
indemnified under applicable law. The Company agrees to pay the reasonable fees
of the Independent Legal Counsel referred to above and to fully indemnify such
counsel against any and all expenses (including attorneys' fees), claims,
liabilities and damages arising out of or relating to this Agreement or its
engagement pursuant hereto.
(d) Mandatory Payment of Expenses. Notwithstanding any other
-----------------------------
provision of this Agreement other than Section 8 hereof, to the extent that
Indemnitee has been successful on the merits or otherwise, including, without
limitation, the dismissal of an action without prejudice, in defense of any
action, suit, proceeding, inquiry or investigation referred to in Section (1)(a)
hereof or in the defense of any claim, issue or matter therein, Indemnitee shall
be indemnified against all Expenses incurred by Indemnitee in connection
therewith.
2. Expenses; Indemnification Procedure.
-----------------------------------
(a) Advancement of Expenses. The Company shall advance all Expenses
-----------------------
incurred by Indemnitee. The advances to be made hereunder shall be paid by the
Company to Indemnitee as soon as practicable but in any event no later than five
(5) days after written demand by Indemnitee therefor to the Company.
(b) Notice/Cooperation by Indemnitee. Indemnitee shall, as a
--------------------------------
condition precedent to Indemnitee's right to be indemnified under this
Agreement, give the Company notice in writing as soon as practicable of any
Claim made against Indemnitee for which indemnification will or could be sought
under this Agreement. Notice to the Company shall be directed to the President
of the Company at the address shown on the signature page of this Agreement (or
such other address as the Company shall designate in writing to Indemnitee). In
addition, Indemnitee shall give the Company such information and cooperation as
it may reasonably require and as shall be within Indemnitee's power.
(c) No Presumptions; Burden of Proof. For purposes of this
--------------------------------
Agreement, the termination of any claim, action, suit or proceeding, by
judgment, order, settlement (whether with
-3-
<PAGE>
or without court approval) or conviction, or upon a plea of nolo contendere, or
---- ----------
its equivalent, shall not create a presumption that Indemnitee did not meet any
particular standard of conduct or have any particular belief or that a court has
determined that indemnification is not permitted by applicable law. In addition,
neither the failure of the Reviewing Party to have made a determination as to
whether Indemnitee has met any particular standard of conduct or had any
particular belief, nor an actual determination by the Reviewing Party that
Indemnitee has not met such standard of conduct or did not have such belief,
prior to the commencement of legal proceedings by Indemnitee to secure a
judicial determination that Indemnitee should be indemnified under applicable
law, shall be a defense to Indemnitee's claim or create a presumption that
Indemnitee has not met any particular standard of conduct or did not have any
particular belief. In connection with any determination by the Reviewing Party
or otherwise as to whether the Indemnitee is entitled to be indemnified
hereunder, the burden of proof shall be on the Company to establish that
Indemnitee is not so entitled.
(d) Notice to Insurers. If, at the time of the receipt by the
------------------
Company of a notice of a Claim pursuant to Section 2(b) hereof, the Company has
liability insurance in effect which may cover such Claim, the Company shall give
prompt notice of the commencement of such Claim to the insurers in accordance
with the procedures set forth in such policy or policies. The Company shall
thereafter take all necessary or desirable action to cause such insurers to pay,
on behalf of the Indemnitee, all amounts payable as a result of such action,
suit, proceeding, inquiry or investigation in accordance with the terms of such
policies.
(e) Assumption of Defense; Selection of Counsel. In the event the
-------------------------------------------
Company shall be obligated hereunder to pay the Expenses of any action, suit,
proceeding, inquiry or investigation, the Company, if appropriate, shall be
entitled to assume the defense of such action, suit, proceeding, inquiry or
investigation with counsel approved by Indemnitee (which approval shall not be
unreasonably withheld), upon the delivery to Indemnitee of written notice of its
election so to do. After delivery of such notice, approval of such counsel by
Indemnitee and the retention of such counsel by the Company, the Company will
not be liable to Indemnitee under this Agreement for any fees of counsel
subsequently incurred by Indemnitee with respect to the same action, suit,
proceeding, inquiry or investigation; provided that, (i) Indemnitee shall have
the right to employ Indemnitee's counsel in any such action, suit, proceeding,
inquiry or investigation at Indemnitee's expense and (ii) if (A) the employment
of counsel by Indemnitee has been previously authorized by the Company or (B)
Indemnitee shall have reasonably concluded that there may be a conflict of
interest between the Company and Indemnitee in the conduct of any such defense.
Notwithstanding the foregoing, in the event the Company shall not continue to
retain such counsel to defend such action, suit, proceeding, inquiry or
investigation, then the fees and expenses of Indemnitee's counsel shall be at
the expense of the Company.
-4-
<PAGE>
3. Additional Indemnification Rights; Nonexclusivity.
-------------------------------------------------
(a) Scope. The Company hereby agrees to indemnify the Indemnitee to
-----
the fullest extent permitted by law, notwithstanding that such indemnification
is not specifically authorized by the other provisions of this Agreement, the
Company's Certificate of Incorporation, the Company's By-laws or by statute. In
the event of any change after the date of this Agreement in any applicable law,
statute or rule which expands the right of a Delaware corporation to indemnify a
member of its board of directors or an officer, employee, agent or fiduciary, it
is the intent of the parties hereto that Indemnitee shall enjoy by this
Agreement the greater benefits afforded by such change. In the event of any
change in any applicable law, statute or rule which narrows the right of a
Delaware corporation to indemnify a member of its board of directors or an
officer, employee, agent or fiduciary, such change, to the extent not otherwise
required by such law, statute or rule to be applied to this Agreement, shall
have no effect on this Agreement or the parties' rights and obligations
hereunder.
(b) Nonexclusivity. The indemnification provided by this Agreement
--------------
shall be in addition to any rights to which Indemnitee may be entitled under the
Company's Certificate of Incorporation, its By-laws, any agreement, any vote of
shareholders or disinterested directors, the General Business Law of the State
of Delaware, or otherwise. The indemnification provided under this Agreement
shall continue as to Indemnitee for any action taken or not taken while serving
in an indemnified capacity even though Indemnitee may have ceased to serve in
such capacity.
4. No Duplication of Payments. The Company shall not be liable
--------------------------
under this Agreement to make any payment in connection with any action, suit,
proceeding, inquiry or investigation made against Indemnitee to the extent
Indemnitee has otherwise actually received payment (under any insurance policy,
Certificate of Incorporation, By-laws or otherwise) of the amounts otherwise
indemnifiable hereunder.
5. Partial Indemnification. If Indemnitee is entitled under any
-----------------------
provision of this Agreement to indemnification by the Company for some or a
portion of Expenses in the investigation, defense, appeal or settlement of any
civil or criminal action, suit, proceeding, inquiry or investigation, but not,
however, for all of the total amount thereof, the Company shall nevertheless
indemnify Indemnitee for the portion of such Expenses to which Indemnitee is
entitled.
6. Mutual Acknowledgment. Both the Company and Indemnitee
---------------------
acknowledge that in certain instances, Federal law or applicable public policy
may prohibit the Company from indemnifying its directors, officers, employees,
agents or fiduciaries under this Agreement or otherwise. Indemnitee understands
and acknowledges that the Company has undertaken or may be required in the
future to undertake with the Securities and Exchange Commission to submit the
question of indemnification to a court in certain circumstances for a
determination of the Company's right under public policy to indemnify
Indemnitee.
-5-
<PAGE>
7. Liability Insurance. To the extent the Company maintains
-------------------
liability insurance applicable to directors, officers, employees, agents or
fiduciaries, Indemnitee shall be covered by such policies in such a manner as to
provide Indemnitee the same rights and benefits as are accorded to the most
favorably insured of the Company's directors, if Indemnitee is a director; or of
the Company's officers, if Indemnitee is not a director of the Company but is an
officer; or of the Company's key employees, agents or fiduciaries, if Indemnitee
is not an officer or director but is a key employee, agent or fiduciary.
8. Exceptions. Any other provision herein to the contrary
----------
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:
(a) Excluded Action or Omissions. To indemnify Indemnitee for acts,
----------------------------
omissions or transactions from which Indemnitee may not be relieved of liability
under applicable law.
(b) Claims Initiated by Indemnitee. To indemnify or advance expenses
------------------------------
to Indemnitee with respect to proceedings or claims initiated or brought
voluntarily by Indemnitee and not by way of defense, except (i) with respect to
proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other agreement or insurance policy or under the Company's
Certificate of Incorporation or By-laws now or hereafter in effect relating to
Claims for Indemnifiable Events, (ii) in specific cases if the Board of
Directors has approved the initiation or bringing of such suit, or (iii) as
otherwise required under Section 145 of the Delaware General Corporation Law,
regardless of whether Indemnitee ultimately is determined to be entitled to such
indemnification, advance expense payment or insurance recovery, as the case may
be.
(c) Lack of Good Faith. To indemnify Indemnitee for any expenses
------------------
incurred by the Indemnitee with respect to any proceeding instituted by
Indemnitee to enforce or interpret this Agreement, if a court of competent
jurisdiction determines that each of the material assertions made by the
Indemnitee in such proceeding was not made in good faith or was frivolous; or
(d) Claims Under Section 16(b). To indemnify Indemnitee for expenses
--------------------------
and the payment of profits arising from the purchase and sale by Indemnitee of
securities in violation of Section 16(b) of the Securities Exchange Act of 1934,
as amended, or any similar successor statute.
9. Period of Limitations. No legal action shall be brought and no cause
---------------------
of action shall be asserted by or in the right of the Company against
Indemnitee, Indemnitee's estate, spouse, heirs, executors or personal or legal
representatives after the expiration of two years from the date of accrual of
such cause of action, and any claim or cause of action of the Company shall be
extinguished and deemed released unless asserted by the timely filing of a legal
action within such two-year period; provided, however, that if any shorter
-------- -------
period of limitations is otherwise applicable to any such cause of action, such
shorter period shall govern.
-6-
<PAGE>
10. Construction of Certain Phrases.
-------------------------------
(a) For purposes of this Agreement, references to the "Company" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, employees, agents or
fiduciaries, so that if Indemnitee is or was a director, officer, employee,
agent or fiduciary of such constituent corporation, or is or was serving at the
request of such constituent corporation as a director, officer, employee, agent
or fiduciary of another corporation, partnership, joint venture, employee
benefit plan, trust or other enterprise, Indemnitee shall stand in the same
position under the provisions of this Agreement with respect to the resulting or
surviving corporation as Indemnitee would have with respect to such constituent
corporation if its separate existence had continued.
(b) For purposes of this Agreement, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include any
excise taxes assessed on Indemnitee with respect to an employee benefit plan;
and references to "serving at the request of the Company" shall include any
service as a director, officer, employee, agent or fiduciary of the Company
which imposes duties on, or involves services by, such director, officer,
employee, agent or fiduciary with respect to an employee benefit plan, its
participants or its beneficiaries; and if Indemnitee acted in good faith and in
a manner Indemnitee reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan, Indemnitee shall be
deemed to have acted in a manner "not opposed to the best interests of the
Company" as referred to in this Agreement.
(c) For purposes of this Agreement a "Change in Control" shall be
deemed to have occurred if (i) any "person" (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other than
a trustee or other fiduciary holding securities under an employee benefit plan
of the Company or a corporation owned directly or indirectly by the shareholders
of the Company in substantially the same proportions as their ownership of stock
of the Company, is or becomes the "beneficial owner" (as determined in
accordance with Rule 13d-3 under such Act), directly or indirectly, of
securities of the Company representing more than 20% of the total voting power
represented by the Company's then outstanding Voting Securities, (ii) during any
period of two consecutive years, individuals who at the beginning of such period
constitute the Board of Directors of the Company and any new director whose
election by the Board of Directors or nomination for election by the Company's
shareholders was approved by a vote of at least two thirds (2/3) of the
directors then still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so approved,
cease for any reason to constitute a majority thereof, or (iii) the shareholders
of the Company approve a merger or consolidation of the Company with any other
corporation other than a merger or consolidation which would result in the
Voting Securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
-7-
<PAGE>
converted into Voting Securities of the surviving entity) at least 80% of the
total voting power represented by the Voting Securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation, or
the shareholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of (in one
transaction or a series of transactions) all or substantially all of the
Company's assets.
(d) For purposes of this Agreement, "Independent Legal Counsel" shall
mean an attorney or firm of attorneys, selected in accordance with the
provisions of Section 1(c) hereof, who shall not have otherwise performed
services for the Company or Indemnitee within the last three years (other than
with respect to matters concerning the rights of Indemnitee under this
Agreement, or of other indemnitees under similar indemnity agreements).
(e) For purposes of this Agreement, a "Reviewing Party" shall mean
any appropriate person or body consisting of a member or members of the
Company's Board of Directors or any other person or body appointed by the Board
of Directors who is not a party to the particular Claim for which Indemnitee is
seeking indemnification, or Independent Legal Counsel.
(f) For purposes of this Agreement, "Voting Securities" shall mean
any securities of the Company that vote generally in the election of directors.
11. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall constitute an original.
12. Binding Effect; Successors and Assigns. This Agreement shall be
--------------------------------------
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors and assigns, including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the Company, spouses, heirs,
and personal and legal representatives. The Company shall require and cause any
successor (whether direct or indirect by purchase, merger, consolidation or
otherwise) to all, substantially all, or a substantial part, of the business
and/or assets of the Company, by written agreement in form and substance
satisfactory to Indemnitee, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform if no such succession had taken place. This Agreement shall
continue in effect regardless of whether Indemnitee continues to serve as a
director of the Company or of any other enterprise at the Company's request.
13. Attorneys' Fees. In the event that any action is instituted by
---------------
Indemnitee under this Agreement or under any liability insurance policies
maintained by the Company to enforce or interpret any of the terms hereof or
thereof, Indemnitee shall be entitled to be paid all Expenses incurred by
Indemnitee with respect to such action, regardless of whether Indemnitee is
ultimately successful in such action, and shall be entitled to the advancement
of Expenses with respect to such action, unless as a part of such action the
court of competent jurisdiction over such action determines that each of the
material assertions made by Indemnitee as a basis for such action were
-8-
<PAGE>
not made in good faith or were frivolous. In the event of an action instituted
by or in the name of the Company under this Agreement to enforce or interpret
any of the terms of this Agreement, Indemnitee shall be entitled to be paid all
Expenses incurred by Indemnitee in defense of such action (including costs and
expenses incurred with respect to Indemnitee's counterclaims and cross-claims
made in such action), and shall be entitled to the advancement Expenses with
respect to such action, unless as a part of such action the court having
jurisdiction over such action determines that each of Indemnitee's material
defenses to such action were made in bad faith or were frivolous.
14. Notice. All notices, requests, demands and other communications under
------
this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and receipted for by the party addressee, on the date of such
receipt, or (ii) if mailed by domestic certified or registered mail with postage
prepaid, on the third business day after the date postmarked. Addresses for
notice to either party are as shown on the signature page of this Agreement, or
as subsequently modified by written notice.
15. Consent to Jurisdiction. The Company and Indemnitee each hereby
-----------------------
irrevocably consent to the jurisdiction of the courts of the State of Delaware
for all purposes in connection with any action or proceeding which arises out of
or relates to this Agreement and agree that any action instituted under this
Agreement shall be commenced, prosecuted and continued only in the Court of
Chancery of the State of Delaware in and for New Castle County, which shall be
the exclusive and only proper forum for adjudicating such a claim.
16. Severability. The provisions of this Agreement shall be
------------
severable in the event that any of the provisions hereof (including any
provision within a single section, paragraph or sentence) are held by a court of
competent jurisdiction to be invalid, void or otherwise unenforceable, and the
remaining provisions shall remain enforceable to the fullest extent permitted by
law. Furthermore, to the fullest extent possible, the provisions of this
Agreement (including, without limitations, each portion of this Agreement
containing any provision held to be invalid, void or otherwise unenforceable,
that is not itself invalid, void or unenforceable) shall be construed so as to
give effect to the intent manifested by the provision held invalid, illegal or
unenforceable.
17. Choice of Law. This Agreement shall be governed by and its provisions
-------------
construed and enforced in accordance with the laws of the State of Delaware, as
applied to contracts between Delaware residents, entered into and to be
performed entirely within the State of Delaware, without regard to the conflict
of laws principles thereof.
18. Subrogation. In the event of payment under this Agreement, the
-----------
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee, who shall execute all documents required and shall do
all acts that may be necessary to secure such rights and to enable the Company
effectively to bring suit to enforce such rights.
-9-
<PAGE>
19. Amendment and Termination. No amendment, modification, termination or
-------------------------
cancellation of this Agreement shall be effective unless it is in writing signed
by both the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provisions hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver.
20. Integration and Entire Agreement. This Agreement sets forth the
--------------------------------
entire understanding between the parties hereto and supersedes and merges all
previous written and oral negotiations, commitments, understandings and
agreements relating to the subject matter hereof between the parties hereto.
21. No Construction as Employment Agreement. Nothing contained in this
---------------------------------------
Agreement shall be construed as giving Indemnitee any right to be retained in
the employ of the Company or any of its subsidiaries.
**********
-10-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
GOAMERICA, INC.
By: _______________________________
Aaron Dobrinsky, President and
Chief Executive Officer
401 Hackensack Avenue
Hackensack, NJ 07601
AGREED TO AND ACCEPTED:
INDEMNITEE:
____________________________________
(signature)
____________________________________
(name of Indemnitee)
____________________________________
____________________________________
(address)
<PAGE>
EXHIBIT 10.7
EMPLOYMENT AGREEMENT
THIS AGREEMENT made effective as of the 31st day of December 1999 (the
"Effective Date") by and between GoAmerica, Inc., a Delaware corporation with
its principal place of business at 401 Hackensack Avenue, Hackensack, New Jersey
07601 (the "Company"), and Aaron Dobrinsky (the "Employee").
WITNESSETH:
WHEREAS, the Company desires to secure the employment of the Employee in
accordance with the provisions of this Agreement; and
WHEREAS, the Employee desires and is willing to accept employment with the
Company in accordance herewith.
NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. Term. The Company hereby agrees to employ the Employee and the
----
Employee hereby agrees to serve the Company pursuant to the terms and conditions
of this Agreement as Chairman of the Board, President and Chief Executive
Officer of the Company, or in a position at least commensurate therewith in all
material respects, for an initial term commencing on the Effective Date hereof
and expiring on the third anniversary thereof (the "initial term"), provided
that the Employee is elected to such office, or a comparable or higher office,
at each annual meeting of the Board of Directors of the Company (the "Board of
Directors") during the term of this Agreement. If the Employee shall not be so
elected at any such annual meeting of the Board of Directors, the Employee's
employment hereunder shall forthwith terminate and the Company shall be
obligated to compensate the Employee in accordance with Section 6(a) of this
<PAGE>
Agreement. On the expiration of the initial term and on each yearly anniversary
thereof, the Agreement shall automatically renew for an additional one-year
period (the "Renewal Term"), unless sooner terminated in accordance with the
provisions of Section 5 or unless either party notifies the other party in
writing of its intentions not to renew this Agreement not less than sixty (60)
days prior to such expiration date or anniversary, as the case may be.
2. Positions and Duties.
--------------------
(a) Duties. The Employee's duties hereunder shall be those which shall be
------
prescribed from time to time by the Board of Directors in accordance with the
bylaws of the Company and shall include such executive duties, powers and
responsibilities as customarily attend the office of Chairman of the Board,
President and Chief Executive Officer of a company comparable to the Company.
The Employee will hold, in addition to the office of Chairman of the Board,
President and Chief Executive Officer of the Company, such other executive
offices in the Company and its subsidiaries to which he may be elected,
appointed or assigned by the Board of Directors from time to time and will
discharge such executive duties in connection therewith. During the employment
period, the Employee's position (including status, offices and reporting
requirements), authority, duties and responsibilities shall be at least
commensurate in all material respects with the most significant of those held,
exercised and assigned immediately preceding the Effective Date. The Employee
shall devote his full working time, energy and skill (reasonable absences for
vacations and illness excepted), to the business of the Company as is necessary
in order to perform such duties faithfully, competently and diligently;
provided, however, that notwithstanding any provision in this Agreement to the
contrary, the Employee shall not be precluded from devoting reasonable periods
of time required for serving as a member of
-2-
<PAGE>
boards of companies which have been approved by the Board of Directors or
participating in non-business organizations so long as such memberships or
activities do not interfere with the performance of the Employee's duties
hereunder.
(b) Board Nomination. So long as the Employee is the Chairman of the Board,
----------------
President and Chief Executive Officer of the Company, the Company will use
diligent efforts to obtain the nomination and election of the Employee as a
director of the Company. In the event that the Employee is elected as a
director of the Company, the Employee shall perform all duties incident to such
directorship faithfully, diligently and competently and in the best interests of
the Company.
3. Compensation. During the term of this Agreement, the Employee shall
------------
receive, for all services rendered to the Company hereunder, the following
(hereinafter referred to as "Compensation"):
(a) Base Salary. For the term hereof, the Employee shall be paid an annual
-----------
base salary equal to $225,000. The Employee's annual base salary shall be
payable in equal installments in accordance with the Company's general salary
payment policies but no less frequently than monthly. Such base salary shall be
reviewed, and any increases in the amount thereof shall be determined, by the
Board of Directors or a compensation committee formed by the Board of Directors
(the "Compensation Committee") at the end of each 12-month period of employment
during the term hereof.
(b) Bonuses. The Employee shall be eligible for and may receive bonuses.
-------
The amount of such bonuses, if any, shall be solely within the discretion of the
Board of Directors or, if formed, the Compensation Committee thereof.
-3-
<PAGE>
(c) Incentive Compensation. The Employee shall be eligible for awards from
----------------------
the Company's incentive compensation plans, including without limitation any
stock option plans, applicable to high level executive officers of the Company
or to key employees of the Company or its subsidiaries, in accordance with the
terms thereof and on a basis commensurate with his position and
responsibilities.
(d) Automobile Allowance. The Company shall provide to the Employee a
--------------------
fixed automobile allowance of $800.00 per month to be used by Employee for
automobile lease payments, insurance and related taxes during the term of this
Agreement. In addition, automobile expenses incurred in connection with the
performance of the Employee's duties hereunder with respect to tolls, gasoline
and automobile maintenance are the responsibility of the Company and shall be
paid by the Company.
(e) Benefits. The Employee and his "dependents," as that term may be
--------
defined under the applicable benefit plan(s) of the Company, shall be included,
to the extent eligible thereunder, in any and all plans, programs and policies
which provide benefits for employees and their dependents. Such plans, programs
and policies may include health care insurance, long-term disability plans, life
insurance, supplemental disability insurance, supplemental life insurance,
holidays and other similar or comparable benefits made available to the
Company's employees.
(f) Expenses. Subject to and in accordance with the Company's policies and
--------
procedures, the Employee hereby is authorized to incur, and, upon presentation
of itemized accounts, shall be reimbursed by the Company for, any and all
reasonable and necessary
-4-
<PAGE>
business-related expenses, which expenses are incurred by the Employee on behalf
of the Company or any of its subsidiaries.
(g) Life Insurance. During the term of this Agreement, in addition to the
--------------
life insurance benefits provided to the Employee in paragraph 3(e) above, the
Company will maintain, at the Company's expense, term insurance upon the
Employee's life in the face amount of up to one million dollars ($1,000,000.00).
Such insurance will be payable to the beneficiary that the Employee shall
designate in writing to the Company, or in the absence of such designation, to
the Employee's estate.
4. Absences. The Employee shall be entitled to vacations of no less than
--------
four (4) weeks, absences because of illness or other incapacity, and such other
absences, whether for holiday, personal time, or for any other purpose, as set
forth in the Company's employment manual or current procedures and policies, as
the case may be, as same may be amended from time-to-time.
5. Termination. In addition to the events of termination and expiration
-----------
of this Agreement provided for in Section 1 hereof, the Employee's employment
hereunder may be terminated only as follows:
(a) Without Cause. The Company may terminate the Employee's employment
-------------
hereunder without cause only upon action by the Board of Directors, and upon no
less than sixty (60) days prior written notice to the Employee. The Employee
may terminate employment hereunder without cause upon no less than sixty (60)
days prior written notice to the Company.
(b) For Cause, by the Company. The Company may terminate the Employee's
-------------------------
employment hereunder for cause immediately and with prompt notice to the
Employee, which
-5-
<PAGE>
cause shall be determined in good faith solely by the Board of Directors.
"Cause" for termination shall include, but is not limited to, the following
conduct of the Employee:
(i) Material breach of any provision of this Agreement by the
Employee, which breach shall not have been cured by the Employee within sixty
(60) days of receipt of written notice of said breach;
(ii) Misconduct as an employee of the Company, including but not
limited to: misappropriating any funds or property of the Company; attempting to
willfully obtain any personal profit from any transaction in which the Employee
has an interest which is adverse to the interests of the Company; or any other
act or omission which substantially impairs the Company's ability to conduct its
ordinary business in its usual manner;
(iii) Unreasonable neglect or refusal to perform the duties assigned
to the Employee under or pursuant to this Agreement;
(iv) Conviction of a felony (including pleading guilty or no contest
to a felony or lesser charge which results from plea bargaining); or
(v) Any other act or omission which subjects the Company or any of its
subsidiaries to substantial public disrespect, scandal or ridicule.
-6-
<PAGE>
(c) For Good Reason by Employee. The Employee may terminate employment
---------------------------
hereunder for good reason immediately and with prompt notice to the Company.
"Good reason" for termination by the Employee shall include, but is not limited
to, the following conduct of the Company:
(i) Material breach of any provision of this Agreement by the Company,
which breach shall not have been cured by the Company within sixty (60) days of
receipt of written notice of said breach;
(ii) Failure to maintain the Employee in a position commensurate with
that referred to in Section 2 of this Agreement; provided however, that the
----------------
Employee may be removed as President by the Board of Directors, provided
further, that the office of President shall not be senior to the offices of
Chairman of the Board or Chief Executive Officer.
(iii) Failure to elect Employee as a director of the Company; or
(iv) The assignment to the Employee of any duties inconsistent with
the Employee's position, authority, duties or responsibilities as contemplated
by Section 2 of this Agreement, or any other action by the Company which results
in a diminution of such position, authority, duties or responsibilities,
excluding for this purpose any isolated action not taken in bad faith and which
is promptly remedied by the Company after receipt of notice thereof given by the
Employee.
(d) Death. The period of active employment of the Employee hereunder shall
-----
terminate automatically in the event of his death.
(e) Disability. In the event that the Employee shall be unable to perform
----------
duties hereunder for a period of one hundred eighty (180) consecutive calendar
days or one hundred eighty (180) work days within any 360 consecutive calendar
days, by reason of disability as a result of illness, accident or other physical
or mental incapacity or disability, the Company may,
-7-
<PAGE>
in its discretion, by giving written notice to the Employee, terminate the
Employee's employment hereunder as long as the Employee is still disabled on the
effective date of such termination.
(f) Mutual Agreement. This Agreement may be terminated at any time by
----------------
mutual agreement of the Employee and the Company.
6. Compensation in the Event of Termination. In the event that the
----------------------------------------
Employee's employment pursuant to this Agreement terminates prior to the end of
the term of this Agreement because he is not reelected pursuant to Section 1 or
for a reason provided in Section 5 hereof, the Company shall pay the Employee
compensation as set forth below:
(a) Employee not Elected by Board of Directors; By Employee for Good
----------------------------------------------------------------
Reason; By Company Without Cause. In the event that the Employee's employment
- --------------------------------
hereunder is terminated because the Employee is not elected to the office of
Chairman of the Board and Chief Executive Officer of the Company, or in a
position at least commensurate therewith in all material respects, at any annual
meeting of the Company's Board of Directors during the term of this Agreement,
as contemplated by Section 1 hereof; by the Employee for good reason pursuant to
Section 5(c) hereof; or by the Company without cause pursuant to Section 5(a)
hereof, then:
(i) the Company shall continue to pay to the Employee his annual base
salary and all other compensation and benefits provided for in Section 3 hereof
in the same manner as before termination, and for a period of time ending on the
date when the initial term or Renewal Term, as applicable, of this Agreement
would otherwise have expired in accordance with Section 1 of this Agreement;
provided, however, that in no event shall such amount be less than Employee's
then current one (1) year annual base salary; or if such termination occurs
after the date three (3) years from the date hereof, such amount shall be no
less than Employee's then
-8-
<PAGE>
current one (1) year annual base salary plus one-twelfth (1/12) of such annual
base salary for each year of employment commenced beyond such three (3) year
anniversary date. The Employee shall not be required to mitigate the amount of
any payment provided for in this Section 6(a) by seeking employment or
otherwise, nor shall any amounts received from employment or otherwise by the
Employee offset in any manner the obligations of the Company hereunder; and
(ii) the payments, rights and entitlements described in Section
6(a)(i) hereof, if any, shall only be made if the Employee shall first have
executed and delivered to the Company a release with respect to his employment
hereunder and the termination of such employment.
(b) By Company Upon Termination of Agreement Due to Employee's Death or
-------------------------------------------------------------------
Disability. In the event of the Employee's death or if the Company shall
- ----------
terminate the Employee's employment hereunder for disability pursuant to Section
5(e) hereof then:
(i) the Company shall continue to pay the base salary payable
hereunder at the then current rate for one (1) year after the termination of
employment to the Employee or his personal representative, as applicable;
(ii) in the event of a termination pursuant to Section 5(e) hereof, if
eligible, Employee shall be entitled to benefits under any salaried long-term
disability plan of the Company covering the Employee then in effect; and
(iii) all other compensation and benefits provided for in Section 3
of this Agreement shall cease upon such termination.
(c) By Company For Cause or By Employee Without Good Reason. In the event
-------------------------------------------------------
that: (i) the Company shall terminate the Employee's employment hereunder for
cause pursuant
-9-
<PAGE>
to Section 5(b) hereof; or (ii) the Employee shall terminate employment
hereunder without "good reason" as defined in Section 5(c) hereof, then the
Employee's rights hereunder shall cease as of the effective date of the
termination, including, without limitation, the right to receive the Base Salary
and all other compensation or benefits provided for in this Agreement, except
that the Company shall pay the Employee salary and other Compensation which may
have been earned and is due and payable but which has not been paid as of the
date of termination.
7. Effect of Termination. In the event of expiration or early termination
---------------------
of this Agreement as provided herein, neither the Company nor the Employee shall
have any remaining duties or obligations hereunder except that:
(a) The Company shall:
(i) Pay the Employee's accrued salary and any other accrued benefits
under Section 3 hereof;
(ii) Reimburse the Employee for expenses already incurred in
accordance with Section 3(e) hereof;
(iii) To the extent required by law, pay or otherwise provide for any
benefits, payments or continuation or conversion rights in accordance with the
provisions of any benefit plan of which the Employee or any of his dependents is
or was a participant; and
(iv) Pay the Employee or his beneficiaries any compensation due
pursuant to Section 6 hereof; and
(b) The Employee shall remain bound by the terms of Section 8 hereof and
Exhibit A attached hereto.
- ---------
-10-
<PAGE>
8. Restrictive Covenant. (a) The Employee acknowledges and agrees that
--------------------
he has access to secret and confidential information of the Company and its
subsidiaries and that the following restrictive covenant is necessary to protect
the interests and continued success of the Company. Except as otherwise
expressly consented to in writing by the Company, until the termination of the
Employee's employment (for any reason and whether such employment was under this
Agreement or otherwise) and thereafter for twelve (12) months (the "Restricted
Period"), the Employee shall not, directly or indirectly, acting as an employee,
owner, shareholder, partner, joint venturer, officer, director, agent,
salesperson, consultant, advisor, investor or principal of any corporation or
other business entity:
(i) engage, in any state or territory of the United States of America
or other country where the Company is actively doing business (determined as of
the date the Employee's employment with the Company terminates), in direct or
indirect competition with the business conducted by the Company or activities
which the Company plans to conduct within one year of termination (determined as
of the date the Employee's employment with the Company terminates);
(ii) request or otherwise attempt to induce or influence, directly or
indirectly, any present customer or supplier, or prospective customer or
supplier, of the Company, or other persons sharing a business relationship with
the Company, to cancel, limit or postpone their business with the Company, or
otherwise take action which might be to the material disadvantage of the
Company; or
(iii) hire or solicit for employment, directly or indirectly, or
induce or actively attempt to influence, any Employee of the Company or any
Affiliate, as such term is defined in
-11-
<PAGE>
the Securities Act of 1933, as amended, to terminate his or her employment or
discontinue such person's consultant, contractor or other business association
with the Company.
(b) If the Employee violates any of the restrictions contained in Section
8(a) above, the Restrictive Period shall be increased by the period of time from
the commencement of any such violation until the time such violation shall be
cured by the Employee to the satisfaction of the Company, and the Company may
withhold any and all payments, except salary, otherwise due and owing to the
Employee under this Agreement.
(c) In the event that either the geographical area or the Restrictive
Period set forth in Section 8(a) of this Agreement is deemed to be unreasonably
restrictive in any court proceeding, the court may reduce such geographical area
and Restrictive Period to the extent which it deems reasonable under the
circumstances.
(d) Nothing in this Section 8, whether express or implied, shall prevent
the Employee from being a holder of securities of a company whose securities are
registered under Section 12 of the Securities Exchange Act of 1934, as amended,
or any privately held company; provided, however, that during the term of this
agreement, and with respect to any company which may be deemed to directly or
indirectly compete with the business conducted by the Company or with the
activities which the Company plans to conduct, the Employee holds of record and
beneficially less than one percent (1%) of the votes eligible to be cast
generally by holders of securities of such company for the election of
directors.
(e) The Employee, as a condition of his continued employment, acknowledges
and agrees that he has reviewed and will continue to be bound by all of the
provisions set forth in
-12-
<PAGE>
Exhibit A attached hereto, which is incorporated herein by reference and made
- ---------
a part hereof as though fully set forth herein, during the term of this
Agreement, and any time hereafter.
(f) Employee acknowledges and agrees that in the event of a breach or
threatened breach of the provisions of this Section 8 by Employee the Company
may suffer irreparable harm and therefore, the Company shall be entitled, to the
extent permissible by law, immediately to cease to pay or provide the Employee
any compensation being, or to be, paid or provided to him pursuant to Sections 3
or 6 of this Agreement, and also to obtain immediate injunctive relief
restraining the Employee from conduct in breach or threatened breach of the
covenants contained in this Section 8. Nothing herein shall be construed as
prohibiting the Company from pursuing any other remedies available to it for
such breach or threatened breach, including the recovery of damages from the
Employee.
9. Directors and Officers Liability Insurance. During the term of this
------------------------------------------
Agreement, the Company shall maintain standard directors and officers liability
insurance in a face amount of no less than $10,000,000.
10. Resolution of Differences Over Breaches of Agreement. Except as
----------------------------------------------------
otherwise provided herein, any controversy or claim arising out of, or relating
to, this Agreement, or the breach hereof, or otherwise arising out of or
relating to the Employee's employment, compensation and benefits with the
Company or the termination thereof, shall be reviewed in the first instance in
accordance with the Company's internal review procedures, if any, with recourse
thereafter--for temporary or preliminary injunctive relief only as to the
provisions of Section 8--to the courts having jurisdiction thereof. If any
relief other than injunctive relief is sought, then to arbitration in the State
of New Jersey administered by the American Arbitration Association,
-13-
<PAGE>
under its National Rules for the Resolution of Employment Disputes and judgment
upon the award rendered by the Arbitrator(s) may be entered in any court having
jurisdiction thereof. Any claim or controversy not submitted to arbitration in
accordance with this Section 9 shall be waived and, thereafter, no arbitration
panel or tribunal or court shall have the power to rule or make any award on any
such claim or controversy.
11. No Conflicts. The Employee has represented and hereby represents to
-------------
the Company that the execution, delivery and performance by the Employee of this
Agreement do not conflict with or result in a violation or breach of, or
constitute (with or without notice or lapse of time or both) a default under any
contract, agreement or understanding, whether oral or written, to which the
Employee is a party or of which the Employee is or should be aware and the there
are no restrictions, covenants, agreements or limitations on his right or
ability to enter into and perform the terms of this Agreement, and agrees to
save the Company harmless from any liability, cost or expense, including
attorney's fees, based upon or arising out of any such restrictions, covenants,
agreements, or limitations that may be found to exist.
12. Waiver. The waiver by a party hereto of any breach by the other party
------
hereto of any provision of this Agreement shall not operate or be construed as a
waiver of any subsequent breach by a party hereto.
13. Assignment. This Agreement shall be binding upon and inure to the
----------
benefit of the successors and assigns of the Company, and the Company shall be
obligated to require any successor to expressly assume its obligations
hereunder. This Agreement shall inure to the benefit of and be enforceable by
the Employee or his legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. The Employee may not
-14-
<PAGE>
assign any of his duties, responsibilities, obligations or positions hereunder
to any person and any such purported assignment by him shall be void and of no
force and effect.
14. Notices. Any notices required or permitted to be given under this
-------
Agreement shall be sufficient if in writing, and if personally delivered or when
sent by first class certified or registered mail, postage prepaid, return
receipt requested--in the case of the Employee, to his residence address as set
forth below, and in the case of the Company, to the address of its principal
place of business as set forth below, in care of the Board of Directors--or to
such other person or at such other address with respect to each party as such
party shall notify the other in writing.
15. Construction of Agreement.
-------------------------
(a) Governing Law. This Agreement shall be governed by and its provisions
-------------
construed and enforced in accordance with the internal laws of the State of New
Jersey without reference to its principles regarding conflicts of law.
(b) Severability. In the event that any one or more of the provisions of
------------
this Agreement shall be held to be invalid, illegal or unenforceable, the
validity, legality or enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
(c) Headings. The descriptive headings of the several paragraphs of this
--------
Agreement are inserted for convenience of reference only and shall not
constitute a part of this Agreement.
16. Entire Agreement. This Agreement and Exhibit A hereto contains the
----------------
entire agreement of the parties concerning the Employee's employment and all
promises, representations, understandings, arrangements and prior agreements on
such subject are merged herein and superseded hereby. The provisions of this
Agreement may not be amended, modified,
-15-
<PAGE>
repealed, waived, extended or discharged except by an agreement in writing
signed by the party against whom enforcement of any amendment, modification,
repeal, waiver, extension or discharge is sought. No person acting other than
pursuant to a resolution of the Board of Directors shall have authority on
behalf of the Company to agree to amend, modify, repeal, waive, extend or
discharge any provision of this Agreement or anything in reference thereto or to
exercise any of the Company's rights to terminate or to fail to extend this
Agreement.
* * * * *
-16-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
and attested by its duly authorized officers, and the Employee has set his hand,
all as of the day and year first above written.
ATTEST: GoAmerica, Inc.
Francis J. Elenio By: /s/ Robi Blumenstein
- ---------------------------- ---------------------------------------
Francis J. Elenio, Secretary Robi Blumenstein, Chairman,
Compensation Committee
Address: ______________________________
______________________________
______________________________
WITNESS: EMPLOYEE
/s/ Joseph Korb /s/ Aaron Dobrinsky
- --------------- ------------------------
Aaron Dobrinsky
Address:______________________________
______________________________
______________________________
-17-
<PAGE>
EXHIBIT A
GoAmerica, Inc.
EMPLOYEE'S
INVENTION ASSIGNMENT AND CONFIDENTIALITY
AGREEMENT
In consideration of my employment or continued employment by GoAmerica,
Inc., a Delaware corporation or any subsidiary or parent corporation thereof
(the "Company"), I hereby represent and agree as follows:
1. I understand that the Company is engaged in the business of providing
wireless internet service and related services and that I may have access to or
acquire information with respect to Confidential Information (as defined below),
including processes and methods, development tools, scientific, technical and/or
business innovations.
2. Disclosure of Innovations. I agree to disclose in writing to the
-------------------------
Company all inventions, improvements and other innovations of any kind that I
may make, conceive, develop or reduce to practice, alone or jointly with others,
during the term of my employment with the Company, whether or not they are
related to my work for the Company and whether or not they are eligible for
patent, copyright, trademark, trade secret or other legal protection
("Innovations"). Examples of Innovations shall include, but are not limited to,
discoveries, research, inventions, formulas, techniques, processes, tools, know-
how, marketing plans, new product plans, production processes, advertising,
packaging and marketing techniques and improvements to computer hardware or
software.
3. Assignment of Ownership of Innovations. I agree that all Innovations
--------------------------------------
will be the sole and exclusive property of the Company and I hereby assign all
of my rights, title or interest in the Innovations and in all related patents,
copyrights, trademarks, trade secrets, rights of priority and other proprietary
rights to the Company. At the Company's request and expense, during and after
the period of my employment with the Company, I will assist and cooperate with
the Company in all respects and will execute documents, and, subject to my
reasonable availability, give testimony and take further acts requested by the
Company to obtain, maintain, perfect and enforce for the Company patent,
copyright, trademark, trade secret and other legal protection for the
Innovations. I hereby appoint the Chief Financial Officer of the Company as my
attorney-in-fact to execute documents on my behalf for this purpose.
4. Protection of Confidential Information of the Company. I understand
-----------------------------------------------------
that my work as an employee of the Company creates a relationship of trust and
confidence between myself and the Company. During and after the period of my
employment with the Company, I will not use or disclose or allow anyone else to
use or disclose any "Confidential Information" (as defined below) relating to
the Company, its products, suppliers or customers except as may be necessary in
the performance of my work for the Company or as may be authorized in
-A1-
<PAGE>
advance by appropriate officers of the Company. "Confidential Information" shall
------------------------
include innovations, methodologies, processes, tools, business strategies,
financial information, forecasts, personnel information, customer lists, trade
secrets and any other non-public technical or business information, whether in
writing or given to me orally, which I know or have reason to know the Company
would like to treat as confidential for any purpose, such as maintaining a
competitive advantage or avoiding undesirable publicity. I will keep
Confidential Information secret and will not allow any unauthorized use of the
same, whether or not any document containing it is marked as confidential. These
restrictions, however, will not apply to Confidential Information that has
become known to the public generally through no fault or breach of mine or that
the Company regularly gives to third parties without restriction on use or
disclosure. Upon termination of my work with the Company, I will promptly
deliver to the Company all documents and materials of any nature pertaining to
my work with the Company and I will not take with me any documents or materials
or copies thereof containing any Confidential Information.
5. Other Agreements. I represent that my performance of all the terms of
----------------
this Agreement and my duties as an employee of the Company will not breach any
invention assignment agreement, confidential information agreement, non-
competition agreement or other agreement with any former employer or other
party. I represent that I have not and will not bring with me to the Company or
use in the performance of my duties for the Company any documents or materials
of a former employer that are not generally available to the public.
6. Disclosure of this Agreement. I hereby authorize the Company to notify
----------------------------
others, including but not limited to customers of the Company and any of my
future employers, of the terms of this Agreement and my responsibilities
hereunder.
7. Injunctive Relief . I understand that in the event of a breach or
------------------
threatened breach of this Agreement by me the Company may suffer irreparable
harm and monetary damages alone would not adequately compensate the Company.
The Company will therefore be entitled to injunctive relief to enforce this
Agreement.
8. Enforcement and Severability. I acknowledge that each of the
----------------------------
provisions in this Agreement are separate and independent covenants. I agree
that if any court shall determine that any provision of this Agreement is
unenforceable with respect to its term or scope such provision shall nonetheless
be enforceable by any such court upon such modified term or scope as may be
determined by such court to be reasonable and enforceable. The remainder of
this Agreement shall not be affected by the unenforceability or court ordered
modification of a specific provision.
9. Governing Law. I agree that this Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of New Jersey.
10. Superseding Agreement. I understand and agree that this Agreement, as
---------------------
Exhibit A to my Employment Agreement with the Company, contains the entire
agreement of the parties with respect to the subject matter hereof and
supersedes all previous agreements and understandings between the parties with
respect to its subject matter.
-A2-
<PAGE>
11. Acknowledgments. I acknowledge that I have read this agreement, was
---------------
given the opportunity to ask questions and sufficient time to consult an
attorney and I have either consulted an attorney or affirmatively decided not to
consult an attorney. I understand that this agreement is a part of and does not
alter the terms of my Employment Agreement with the Company. I also understand
that my obligations under this Agreement survive the termination of my
employment with the Company.
*.*.*.*.*.*.*.*.*.*
-A3-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written below.
Date: 12/31/99 /s/ Aaron Dobrinsky
-------- -------------------
Aaron Dobrinsky
Address: ______________________
______________________
______________________
______________________
GoAmerica, Inc.
Date: 12/31/99 By: /s/ Joseph Korb
-------- ---------------
Name: Joseph Korb
Title: Executive Vice President
-A4-
<PAGE>
EXHIBIT 10.8
EMPLOYMENT AGREEMENT
THIS AGREEMENT made effective as of the 31st day of December 1999 (the
"Effective Date") by and between GoAmerica, Inc., a Delaware corporation with
its principal place of business at 401 Hackensack Avenue, Hackensack, New Jersey
07601 (the "Company"), and Joseph Korb (the "Employee").
WITNESSETH:
WHEREAS, the Company desires to secure the employment of the Employee in
accordance with the provisions of this Agreement; and
WHEREAS, the Employee desires and is willing to accept employment with the
Company in accordance herewith.
NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. Term. The Company hereby agrees to employ the Employee and the
----
Employee hereby agrees to serve the Company pursuant to the terms and conditions
of this Agreement as Executive Vice President of the Company, or in a position
at least commensurate therewith in all material respects, for an initial term
commencing on the Effective Date hereof and expiring on the third anniversary
thereof (the "initial term"), provided that the Employee is elected to such
office, or a comparable or higher office, at each annual meeting of the Board of
Directors of the Company (the "Board of Directors") during the term of this
Agreement. If the Employee shall not be so elected at any such annual meeting
of the Board of Directors, the Employee's employment hereunder shall forthwith
terminate and the Company shall be obligated to compensate the Employee in
accordance with Section 6(a) of this Agreement. On the expiration of the
initial term and on each yearly anniversary thereof, the Agreement shall
automatically
<PAGE>
renew for an additional one-year period (the "Renewal Term"), unless sooner
terminated in accordance with the provisions of Section 5 or unless either party
notifies the other party in writing of its intentions not to renew this
Agreement not less than sixty (60) days prior to such expiration date or
anniversary, as the case may be.
2. Positions and Duties.
--------------------
(a) Duties. The Employee's duties hereunder shall be those which shall be
------
prescribed from time to time by the Board of Directors in accordance with the
bylaws of the Company and shall include such executive duties, powers and
responsibilities as customarily attend the office of Executive Vice President of
a company comparable to the Company. The Employee will hold, in addition to the
office of Executive Vice President of the Company, such other executive offices
in the Company and its subsidiaries to which he may be elected, appointed or
assigned by the Board of Directors from time to time and will discharge such
executive duties in connection therewith. During the employment period, the
Employee's position (including status, offices and reporting requirements),
authority, duties and responsibilities shall be at least commensurate in all
material respects with the most significant of those held, exercised and
assigned immediately preceding the Effective Date. The Employee shall devote
his full working time, energy and skill (reasonable absences for vacations and
illness excepted), to the business of the Company as is necessary in order to
perform such duties faithfully, competently and diligently; provided, however,
that notwithstanding any provision in this Agreement to the contrary, the
Employee shall not be precluded from devoting reasonable periods of time
required for serving as a member of boards of companies which have been approved
by the Board of Directors or participating in non-
-2-
<PAGE>
business organizations so long as such memberships or activities do not
interfere with the performance of the Employee's duties hereunder.
(b) Board Nomination. So long as the Employee is the Executive Vice
----------------
President of the Company, the Company will use diligent efforts to obtain the
nomination and election of the Employee as a director of the Company. In the
event that the Employee is elected as a director of the Company, the Employee
shall perform all duties incident to such directorship faithfully, diligently
and competently and in the best interests of the Company.
3. Compensation. During the term of this Agreement, the Employee shall
------------
receive, for all services rendered to the Company hereunder, the following
(hereinafter referred to as "Compensation"):
(a) Base Salary. For the term hereof, the Employee shall be paid an annual
-----------
base salary equal to $225,000. The Employee's annual base salary shall be
payable in equal installments in accordance with the Company's general salary
payment policies but no less frequently than monthly. Such base salary shall be
reviewed, and any increases in the amount thereof shall be determined, by the
Board of Directors or a compensation committee formed by the Board of Directors
(the "Compensation Committee") at the end of each 12-month period of employment
during the term hereof.
(b) Bonuses. The Employee shall be eligible for and may receive bonuses.
-------
The amount of such bonuses, if any, shall be solely within the discretion of the
Board of Directors or, if formed, the Compensation Committee thereof.
(c) Incentive Compensation. The Employee shall be eligible for awards from
----------------------
the Company's incentive compensation plans, including without limitation any
stock option plans,
-3-
<PAGE>
applicable to high level executive officers of the Company or to key employees
of the Company or its subsidiaries, in accordance with the terms thereof and on
a basis commensurate with his position and responsibilities.
(d) Automobile Allowance. The Company shall provide to the Employee a
--------------------
fixed automobile allowance of $800.00 per month to be used by Employee for
automobile lease payments, insurance and related taxes during the term of this
Agreement. In addition, automobile expenses incurred in connection with the
performance of the Employee's duties hereunder with respect to tolls, gasoline
and automobile maintenance are the responsibility of the Company and shall be
paid by the Company.
(e) Benefits. The Employee and his "dependents," as that term may be
--------
defined under the applicable benefit plan(s) of the Company, shall be included,
to the extent eligible thereunder, in any and all plans, programs and policies
which provide benefits for employees and their dependents. Such plans, programs
and policies may include health care insurance, long-term disability plans, life
insurance, supplemental disability insurance, supplemental life insurance,
holidays and other similar or comparable benefits made available to the
Company's employees.
(f) Expenses. Subject to and in accordance with the Company's policies and
--------
procedures, the Employee hereby is authorized to incur, and, upon presentation
of itemized accounts, shall be reimbursed by the Company for, any and all
reasonable and necessary business-related expenses, which expenses are incurred
by the Employee on behalf of the Company or any of its subsidiaries.
(g) Life Insurance. During the term of this Agreement, in addition to the
---------------
life insurance benefits provided to the Employee in paragraph 3(e) above, the
Company will
-4-
<PAGE>
maintain, at the Company's expense, term insurance upon the Employee's life in
the face amount of up to one million dollars ($1,000,000.00). Such insurance
will be payable to the beneficiary that the Employee shall designate in writing
to the Company, or in the absence of such designation, to the Employee's estate.
4. Absences. The Employee shall be entitled to vacations of no less than
--------
four (4) weeks, absences because of illness or other incapacity, and such other
absences, whether for holiday, personal time, or for any other purpose, as set
forth in the Company's employment manual or current procedures and policies, as
the case may be, as same may be amended from time-to-time.
5. Termination. In addition to the events of termination and expiration
-----------
of this Agreement provided for in Section 1 hereof, the Employee's employment
hereunder may be terminated only as follows:
(a) Without Cause. The Company may terminate the Employee's employment
-------------
hereunder without cause only upon action by the Board of Directors, and upon no
less than sixty (60) days prior written notice to the Employee. The Employee
may terminate employment hereunder without cause upon no less than sixty (60)
days prior written notice to the Company.
(b) For Cause, by the Company. The Company may terminate the Employee's
-------------------------
employment hereunder for cause immediately and with prompt notice to the
Employee, which cause shall be determined in good faith solely by the Board of
Directors. "Cause" for termination shall include, but is not limited to, the
following conduct of the Employee:
-5-
<PAGE>
(i) Material breach of any provision of this Agreement by the
Employee, which breach shall not have been cured by the Employee within sixty
(60) days of receipt of written notice of said breach;
(ii) Misconduct as an employee of the Company, including but not
limited to: misappropriating any funds or property of the Company; attempting to
willfully obtain any personal profit from any transaction in which the Employee
has an interest which is adverse to the interests of the Company; or any other
act or omission which substantially impairs the Company's ability to conduct its
ordinary business in its usual manner;
(iii) Unreasonable neglect or refusal to perform the duties assigned
to the Employee under or pursuant to this Agreement;
(iv) Conviction of a felony (including pleading guilty or no contest
to a felony or lesser charge which results from plea bargaining); or
(v) Any other act or omission which subjects the Company or any of
its subsidiaries to substantial public disrespect, scandal or ridicule.
(c) For Good Reason by Employee. The Employee may terminate employment
---------------------------
hereunder for good reason immediately and with prompt notice to the Company.
"Good reason" for termination by the Employee shall include, but is not limited
to, the following conduct of the Company:
(i) Material breach of any provision of this Agreement by the
Company, which breach shall not have been cured by the Company within sixty (60)
days of receipt of written notice of said breach;
-6-
<PAGE>
(ii) Failure to maintain the Employee in a position commensurate
with that referred to in Section 2 of this Agreement;
(iii) Failure to elect Employee as a director of the Company; or
(iv) The assignment to the Employee of any duties inconsistent with
the Employee's position, authority, duties or responsibilities as contemplated
by Section 2 of this Agreement, or any other action by the Company which results
in a diminution of such position, authority, duties or responsibilities,
excluding for this purpose any isolated action not taken in bad faith and which
is promptly remedied by the Company after receipt of notice thereof given by the
Employee.
(d) Death. The period of active employment of the Employee hereunder shall
-----
terminate automatically in the event of his death.
(e) Disability. In the event that the Employee shall be unable to perform
----------
duties hereunder for a period of one hundred eighty (180) consecutive calendar
days or one hundred eighty (180) work days within any 360 consecutive calendar
days, by reason of disability as a result of illness, accident or other physical
or mental incapacity or disability, the Company may, in its discretion, by
giving written notice to the Employee, terminate the Employee's employment
hereunder as long as the Employee is still disabled on the effective date of
such termination.
(f) Mutual Agreement. This Agreement may be terminated at any time by
----------------
mutual agreement of the Employee and the Company.
6. Compensation in the Event of Termination. In the event that the
----------------------------------------
Employee's employment pursuant to this Agreement terminates prior to the end of
the term of this Agreement
-7-
<PAGE>
because he is not reelected pursuant to Section 1 or for a reason provided in
Section 5 hereof, the Company shall pay the Employee compensation as set forth
below:
(a) Employee not Elected by Board of Directors; By Employee for Good
----------------------------------------------------------------
Reason; By Company Without Cause. In the event that the Employee's employment
- --------------------------------
hereunder is terminated because the Employee is not elected to the office of
Executive Vice President of the Company, or in a position at least commensurate
therewith in all material respects, at any annual meeting of the Company's Board
of Directors during the term of this Agreement, as contemplated by Section 1
hereof; by the Employee for good reason pursuant to Section 5(c) hereof; or by
the Company without cause pursuant to Section 5(a) hereof, then:
(i) the Company shall continue to pay to the Employee his annual base
salary and all other compensation and benefits provided for in Section 3 hereof
in the same manner as before termination, and for a period of time ending on the
date when the initial term or Renewal Term, as applicable, of this Agreement
would otherwise have expired in accordance with Section 1 of this Agreement;
provided, however, that in no event shall such amount be less than Employee's
then current one (1) year annual base salary; or if such termination occurs
after the date three (3) years from the date hereof, such amount shall be no
less than Employee's then current one (1) year annual base salary plus one-
twelfth (1/12) of such annual base salary for each year of employment commenced
beyond such three (3) year anniversary date. The Employee shall not be required
to mitigate the amount of any payment provided for in this Section 6(a) by
seeking employment or otherwise, nor shall any amounts received from employment
or otherwise by the Employee offset in any manner the obligations of the Company
hereunder; and
-8-
<PAGE>
(ii) the payments, rights and entitlements described in Section
6(a)(i) hereof, if any, shall only be made if the Employee shall first have
executed and delivered to the Company a release with respect to his employment
hereunder and the termination of such employment.
(b) By Company Upon Termination of Agreement Due to Employee's Death or
-------------------------------------------------------------------
Disability. In the event of the Employee's death or if the Company shall
- ----------
terminate the Employee's employment hereunder for disability pursuant to Section
5(e) hereof then:
(i) the Company shall continue to pay the base salary payable
hereunder at the then current rate for one (1) year after the termination of
employment to the Employee or his personal representative, as applicable;
(ii) in the event of a termination pursuant to Section 5(e) hereof,
if eligible, Employee shall be entitled to benefits under any salaried long-term
disability plan of the Company covering the Employee then in effect; and
(iii) all other compensation and benefits provided for in Section 3
of this Agreement shall cease upon such termination.
(c) By Company For Cause or By Employee Without Good Reason. In the event
-------------------------------------------------------
that: (i) the Company shall terminate the Employee's employment hereunder for
cause pursuant to Section 5(b) hereof; or (ii) the Employee shall terminate
employment hereunder without "good reason" as defined in Section 5(c) hereof,
then the Employee's rights hereunder shall cease as of the effective date of the
termination, including, without limitation, the right to receive the Base Salary
and all other compensation or benefits provided for in this Agreement, except
that the Company shall pay the Employee salary and other Compensation which may
have been earned and is due and payable but which has not been paid as of the
date of termination.
-9-
<PAGE>
7. Effect of Termination. In the event of expiration or early
---------------------
termination of this Agreement as provided herein, neither the Company nor the
Employee shall have any remaining duties or obligations hereunder except that:
(a) The Company shall:
(i) Pay the Employee's accrued salary and any other accrued
benefits under Section 3 hereof;
(ii) Reimburse the Employee for expenses already incurred in
accordance with Section 3(e) hereof;
(iii) To the extent required by law, pay or otherwise provide for any
benefits, payments or continuation or conversion rights in accordance with the
provisions of any benefit plan of which the Employee or any of his dependents is
or was a participant; and
(iv) Pay the Employee or his beneficiaries any compensation due
pursuant to Section 6 hereof; and
(b) The Employee shall remain bound by the terms of Section 8 hereof and
Exhibit A attached hereto.
- ---------
8. Restrictive Covenant. (a) The Employee acknowledges and agrees that
--------------------
he has access to secret and confidential information of the Company and its
subsidiaries and that the following restrictive covenant is necessary to protect
the interests and continued success of the Company. Except as otherwise
expressly consented to in writing by the Company, until the termination of the
Employee's employment (for any reason and whether such employment was under this
Agreement or otherwise) and thereafter for twelve (12) months (the "Restricted
Period"), the Employee shall not, directly or indirectly, acting as an employee,
owner,
-10-
<PAGE>
shareholder, partner, joint venturer, officer, director, agent, salesperson,
consultant, advisor, investor or principal of any corporation or other business
entity:
(i) engage, in any state or territory of the United States of
America or other country where the Company is actively doing business
(determined as of the date the Employee's employment with the Company
terminates), in direct or indirect competition with the business conducted by
the Company or activities which the Company plans to conduct within one year of
termination (determined as of the date the Employee's employment with the
Company terminates);
(ii) request or otherwise attempt to induce or influence, directly or
indirectly, any present customer or supplier, or prospective customer or
supplier, of the Company, or other persons sharing a business relationship with
the Company, to cancel, limit or postpone their business with the Company, or
otherwise take action which might be to the material disadvantage of the
Company; or
(iii) hire or solicit for employment, directly or indirectly, or
induce or actively attempt to influence, any Employee of the Company or any
Affiliate, as such term is defined in the Securities Act of 1933, as amended, to
terminate his or her employment or discontinue such person's consultant,
contractor or other business association with the Company.
(b) If the Employee violates any of the restrictions contained in Section
8(a) above, the Restrictive Period shall be increased by the period of time from
the commencement of any such violation until the time such violation shall be
cured by the Employee to the satisfaction of the Company, and the Company may
withhold any and all payments, except salary, otherwise due and owing to the
Employee under this Agreement.
-11-
<PAGE>
(c) In the event that either the geographical area or the Restrictive
Period set forth in Section 8(a) of this Agreement is deemed to be unreasonably
restrictive in any court proceeding, the court may reduce such geographical area
and Restrictive Period to the extent which it deems reasonable under the
circumstances.
(d) Nothing in this Section 8, whether express or implied, shall prevent
the Employee from being a holder of securities of a company whose securities are
registered under Section 12 of the Securities Exchange Act of 1934, as amended,
or any privately held company; provided, however, that during the term of this
Agreement, and with respect to any company which may be deemed to directly or
indirectly compete with the business conducted by the Company or with the
activities which the Company plans to conduct, the Employee holds of record and
beneficially less than one percent (1%) of the votes eligible to be cast
generally by holders of securities of such company for the election of
directors.
(e) The Employee, as a condition of his continued employment, acknowledges
and agrees that he has reviewed and will continue to be bound by all of the
provisions set forth in Exhibit A attached hereto, which is incorporated herein
---------
by reference and made a part hereof as though fully set forth herein, during the
term of this Agreement, and any time hereafter.
(f) Employee acknowledges and agrees that in the event of a breach or
threatened breach of the provisions of this Section 8 by Employee the Company
may suffer irreparable harm and therefore, the Company shall be entitled, to the
extent permissible by law, immediately to cease to pay or provide the Employee
any compensation being, or to be, paid or provided to him pursuant to Sections 3
or 6 of this Agreement, and also to obtain immediate injunctive relief
restraining the Employee from conduct in breach or threatened breach of the
covenants contained
-12-
<PAGE>
in this Section 8. Nothing herein shall be construed as prohibiting the Company
from pursuing any other remedies available to it for such breach or threatened
breach, including the recovery of damages from the Employee.
9. Directors and Officers Liability Insurance. During the term of this
------------------------------------------
Agreement, the Company shall maintain standard directors and officers liability
insurance in a face amount of no less than $10,000,000.
10. Resolution of Differences Over Breaches of Agreement. Except as
----------------------------------------------------
otherwise provided herein, any controversy or claim arising out of, or relating
to, this Agreement, or the breach hereof, or otherwise arising out of or
relating to the Employee's employment, compensation and benefits with the
Company or the termination thereof, shall be reviewed in the first instance in
accordance with the Company's internal review procedures, if any, with recourse
thereafter--for temporary or preliminary injunctive relief only as to the
provisions of Section 8--to the courts having jurisdiction thereof. If any
relief other than injunctive relief is sought, then to arbitration in the State
of New Jersey administered by the American Arbitration Association, under its
National Rules for the Resolution of Employment Disputes and judgment upon the
award rendered by the Arbitrator(s) may be entered in any court having
jurisdiction thereof. Any claim or controversy not submitted to arbitration in
accordance with this Section 9 shall be waived and, thereafter, no arbitration
panel or tribunal or court shall have the power to rule or make any award on any
such claim or controversy.
11. No Conflicts. The Employee has represented and hereby represents to
-------------
the Company that the execution, delivery and performance by the Employee of this
Agreement do not conflict with or result in a violation or breach of, or
constitute (with or without notice or
-13-
<PAGE>
lapse of time or both) a default under any contract, agreement or understanding,
whether oral or written, to which the Employee is a party or of which the
Employee is or should be aware and the there are no restrictions, covenants,
agreements or limitations on his right or ability to enter into and perform the
terms of this Agreement, and agrees to save the Company harmless from any
liability, cost or expense, including attorney's fees, based upon or arising out
of any such restrictions, covenants, agreements, or limitations that may be
found to exist.
12. Waiver. The waiver by a party hereto of any breach by the other party
------
hereto of any provision of this Agreement shall not operate or be construed as a
waiver of any subsequent breach by a party hereto.
13. Assignment. This Agreement shall be binding upon and inure to the
----------
benefit of the successors and assigns of the Company, and the Company shall be
obligated to require any successor to expressly assume its obligations
hereunder. This Agreement shall inure to the benefit of and be enforceable by
the Employee or his legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. The Employee may not
assign any of his duties, responsibilities, obligations or positions hereunder
to any person and any such purported assignment by him shall be void and of no
force and effect.
14. Notices. Any notices required or permitted to be given under this
-------
Agreement shall be sufficient if in writing, and if personally delivered or when
sent by first class certified or registered mail, postage prepaid, return
receipt requested--in the case of the Employee, to his residence address as set
forth below, and in the case of the Company, to the address of its principal
place of business as set forth below, in care of the Board of Directors--or to
such other
-14-
<PAGE>
person or at such other address with respect to each party as such party shall
notify the other in writing.
15. Construction of Agreement.
-------------------------
(a) Governing Law. This Agreement shall be governed by and its provisions
-------------
construed and enforced in accordance with the internal laws of the State of New
Jersey without reference to its principles regarding conflicts of law.
(b) Severability. In the event that any one or more of the provisions of
------------
this Agreement shall be held to be invalid, illegal or unenforceable, the
validity, legality or enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
(c) Headings. The descriptive headings of the several paragraphs of this
--------
Agreement are inserted for convenience of reference only and shall not
constitute a part of this Agreement.
16. Entire Agreement. This Agreement and Exhibit A hereto contains the
----------------
entire agreement of the parties concerning the Employee's employment and all
promises, representations, understandings, arrangements and prior agreements on
such subject are merged herein and superseded hereby. The provisions of this
Agreement may not be amended, modified, repealed, waived, extended or discharged
except by an agreement in writing signed by the party against whom enforcement
of any amendment, modification, repeal, waiver, extension or discharge is
sought. No person acting other than pursuant to a resolution of the Board of
Directors shall have authority on behalf of the Company to agree to amend,
modify, repeal, waive, extend or discharge any provision of this Agreement or
anything in reference thereto or to exercise any of the Company's rights to
terminate or to fail to extend this Agreement.
* * * * *
-15-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
and attested by its duly authorized officers, and the Employee has set his hand,
all as of the day and year first above written.
ATTEST: GoAmerica, Inc.
/s/ Francis J. Elenio
__________________________________ By: /s/ Robi Blumenstein
Francis J. Elenio, Secretary _____________________________
Robi Blumenstein, Chairman
Compensation Committee
Address:____________________________
____________________________
____________________________
WITNESS: EMPLOYEE
/s/ Aaron Dobrinsky /s/ Joseph Korb
__________________________________ ________________________________
Joseph Korb
Address:_____________________________
_____________________________
_____________________________
-16-
<PAGE>
EXHIBIT A
GoAmerica, Inc.
EMPLOYEE'S
INVENTION ASSIGNMENT AND CONFIDENTIALITY
AGREEMENT
In consideration of my employment or continued employment by GoAmerica,
Inc., a Delaware corporation or any subsidiary or parent corporation thereof
(the "Company"), I hereby represent and agree as follows:
1. I understand that the Company is engaged in the business of providing
wireless internet service and related services and that I may have access to or
acquire information with respect to Confidential Information (as defined below),
including processes and methods, development tools, scientific, technical and/or
business innovations.
2. Disclosure of Innovations. I agree to disclose in writing to the
-------------------------
Company all inventions, improvements and other innovations of any kind that I
may make, conceive, develop or reduce to practice, alone or jointly with others,
during the term of my employment with the Company, whether or not they are
related to my work for the Company and whether or not they are eligible for
patent, copyright, trademark, trade secret or other legal protection
("Innovations"). Examples of Innovations shall include, but are not limited to,
discoveries, research, inventions, formulas, techniques, processes, tools, know-
how, marketing plans, new product plans, production processes, advertising,
packaging and marketing techniques and improvements to computer hardware or
software.
3. Assignment of Ownership of Innovations. I agree that all Innovations
--------------------------------------
will be the sole and exclusive property of the Company and I hereby assign all
of my rights, title or interest in the Innovations and in all related patents,
copyrights, trademarks, trade secrets, rights of priority and other proprietary
rights to the Company. At the Company's request and expense, during and after
the period of my employment with the Company, I will assist and cooperate with
the Company in all respects and will execute documents, and, subject to my
reasonable availability, give testimony and take further acts requested by the
Company to obtain, maintain, perfect and enforce for the Company patent,
copyright, trademark, trade secret and other legal protection for the
Innovations. I hereby appoint the President and Chief Executive Officer of the
Company as my attorney-in-fact to execute documents on my behalf for this
purpose.
4. Protection of Confidential Information of the Company. I understand
-----------------------------------------------------
that my work as an employee of the Company creates a relationship of trust and
confidence between myself and the Company. During and after the period of my
employment with the Company, I will not use or disclose or allow anyone else to
use or disclose any "Confidential Information" (as defined below) relating to
the Company, its products, suppliers or customers except as may be necessary in
the performance of my work for the Company or as may be authorized in advance by
appropriate officers of the Company. "Confidential Information" shall include
------------------------
innovations,
-A1-
<PAGE>
methodologies, processes, tools, business strategies, financial information,
forecasts, personnel information, customer lists, trade secrets and any other
non-public technical or business information, whether in writing or given to me
orally, which I know or have reason to know the Company would like to treat as
confidential for any purpose, such as maintaining a competitive advantage or
avoiding undesirable publicity. I will keep Confidential Information secret and
will not allow any unauthorized use of the same, whether or not any document
containing it is marked as confidential. These restrictions, however, will not
apply to Confidential Information that has become known to the public generally
through no fault or breach of mine or that the Company regularly gives to third
parties without restriction on use or disclosure. Upon termination of my work
with the Company, I will promptly deliver to the Company all documents and
materials of any nature pertaining to my work with the Company and I will not
take with me any documents or materials or copies thereof containing any
Confidential Information.
5. Other Agreements. I represent that my performance of all the terms of
----------------
this Agreement and my duties as an employee of the Company will not breach any
invention assignment agreement, confidential information agreement, non-
competition agreement or other agreement with any former employer or other
party. I represent that I have not and will not bring with me to the Company or
use in the performance of my duties for the Company any documents or materials
of a former employer that are not generally available to the public.
6. Disclosure of this Agreement. I hereby authorize the Company to
----------------------------
notify others, including but not limited to customers of the Company and any of
my future employers, of the terms of this Agreement and my responsibilities
hereunder.
7. Injunctive Relief. I understand that in the event of a breach or
-----------------
threatened breach of this Agreement by me the Company may suffer irreparable
harm and monetary damages alone would not adequately compensate the Company.
The Company will therefore be entitled to injunctive relief to enforce this
Agreement.
8. Enforcement and Severability. I acknowledge that each of the
----------------------------
provisions in this Agreement are separate and independent covenants. I agree
that if any court shall determine that any provision of this Agreement is
unenforceable with respect to its term or scope such provision shall nonetheless
be enforceable by any such court upon such modified term or scope as may be
determined by such court to be reasonable and enforceable. The remainder of
this Agreement shall not be affected by the unenforceability or court ordered
modification of a specific provision.
9. Governing Law. I agree that this Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of New Jersey.
10. Superseding Agreement. I understand and agree that this Agreement, as
---------------------
Exhibit A to my Employment Agreement with the Company, contains the entire
agreement of the parties with respect to the subject matter hereof and
supersedes all previous agreements and understandings between the parties with
respect to its subject matter.
-A2-
<PAGE>
11. Acknowledgments. I acknowledge that I have read this agreement, was
---------------
given the opportunity to ask questions and sufficient time to consult an
attorney and I have either consulted an attorney or affirmatively decided not to
consult an attorney. I understand that this agreement is a part of and does not
alter the terms of my Employment Agreement with the Company. I also understand
that my obligations under this Agreement survive the termination of my
employment with the Company.
*.*.*.*.*.*.*.*.*.*
-A3-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written below.
Date: 12/31/99 /s/ Joseph Korb
_________________ ______________________________
Joseph Korb
Address: _____________________
_____________________
_____________________
_____________________
GoAmerica, Inc.
Date: 12/31/99 By: /s/ Aaron Dobrinsky
------------------ ______________________________
Name: Aaron Dobrinsky
Title: President and Chief
Executive Officer
-A4-
<PAGE>
EXHIBIT 10.9
EMPLOYMENT AGREEMENT
THIS AGREEMENT made effective as of the 31st day of December 1999 (the
"Effective Date") by and between GoAmerica, Inc., a Delaware corporation with
its principal place of business at 401 Hackensack Avenue, Hackensack, New Jersey
07601 (the "Company"), and Francis J. Elenio (the "Employee").
WITNESSETH:
WHEREAS, the Company desires to secure the employment of the Employee in
accordance with the provisions of this Agreement; and
WHEREAS, the Employee desires and is willing to accept employment with the
Company in accordance herewith.
NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. Term. The Company hereby agrees to employ the Employee and the
----
Employee hereby agrees to serve the Company pursuant to the terms and conditions
of this Agreement as Chief Financial Officer, Treasurer and Secretary of the
Company, or in a position at least commensurate therewith in all material
respects, for an initial term commencing on the Effective Date hereof and
expiring on the third anniversary thereof (the "initial term"). On the
expiration of the initial term and on each yearly anniversary thereof, the
Agreement shall automatically renew for an additional one-year period (the
"Renewal Term"), unless sooner terminated in accordance with the provisions of
Section 5 or unless either party notifies the other party in writing of its
intentions not to renew this Agreement not less than sixty (60) days prior to
such expiration date or anniversary, as the case may be.
<PAGE>
2. Positions and Duties.
--------------------
(a) Duties. The Employee's duties hereunder shall be those which shall be
------
prescribed from time to time by the Board of Directors in accordance with the
bylaws of the Company and shall include such executive duties, powers and
responsibilities as customarily attend the office of Chief Financial Officer,
Treasurer and Secretary of a company comparable to the Company. The Employee
will hold, in addition to the office of Chief Financial Officer, Treasurer and
Secretary of the Company, such other executive offices in the Company and its
subsidiaries to which he may be elected, appointed or assigned by the Board of
Directors from time to time and will discharge such executive duties in
connection therewith. During the employment period, the Employee's position
(including status, offices and reporting requirements), authority, duties and
responsibilities shall be at least commensurate in all material respects with
the most significant of those held, exercised and assigned immediately preceding
the Effective Date. The Employee shall devote his full working time, energy and
skill (reasonable absences for vacations and illness excepted), to the business
of the Company as is necessary in order to perform such duties faithfully,
competently and diligently; provided, however, that notwithstanding any
provision in this Agreement to the contrary, the Employee shall not be precluded
from devoting reasonable periods of time required for serving as a member of
boards of companies which have been approved by the Board of Directors or
participating in non-business organizations so long as such memberships or
activities do not interfere with the performance of the Employee's duties
hereunder.
3. Compensation. During the term of this Agreement, the Employee shall
------------
receive, for all services rendered to the Company hereunder, the following
(hereinafter referred to as "Compensation"):
-2-
<PAGE>
(a) Base Salary. For the term hereof, the Employee shall be paid an annual
-----------
base salary equal to $150,000. The Employee's annual base salary shall be
payable in equal installments in accordance with the Company's general salary
payment policies but no less frequently than monthly. Such base salary shall be
reviewed, and any increases in the amount thereof shall be determined, by the
Board of Directors or a compensation committee formed by the Board of Directors
(the "Compensation Committee") at the end of each 12-month period of employment
during the term hereof.
(b) Bonuses. The Employee shall be eligible for and may receive bonuses.
-------
The amount of such bonuses, if any, shall be solely within the discretion of the
Board of Directors or, if formed, the Compensation Committee thereof.
(c) Incentive Compensation. The Employee shall be eligible for awards from
----------------------
the Company's incentive compensation plans, including without limitation any
stock option plans, applicable to high level executive officers of the Company
or to key employees of the Company or its subsidiaries, in accordance with the
terms thereof and on a basis commensurate with his position and
responsibilities.
(d) Benefits. The Employee and his "dependents," as that term may be
--------
defined under the applicable benefit plan(s) of the Company, shall be included,
to the extent eligible thereunder, in any and all plans, programs and policies
which provide benefits for employees and their dependents. Such plans, programs
and policies may include health care insurance, long-term disability plans, life
insurance, supplemental disability insurance, supplemental life insurance,
holidays and other similar or comparable benefits made available to the
Company's employees.
-3-
<PAGE>
(e) Expenses. Subject to and in accordance with the Company's policies and
--------
procedures, the Employee hereby is authorized to incur, and, upon presentation
of itemized accounts, shall be reimbursed by the Company for, any and all
reasonable and necessary business-related expenses, which expenses are incurred
by the Employee on behalf of the Company or any of its subsidiaries.
4. Absences. The Employee shall be entitled to vacations of no less than
--------
four (4) weeks, absences because of illness or other incapacity, and such other
absences, whether for holiday, personal time, or for any other purpose, as set
forth in the Company's employment manual or current procedures and policies, as
the case may be, as same may be amended from time-to-time.
5. Termination. In addition to the events of termination and expiration
-----------
of this Agreement provided for in Section 1 hereof, the Employee's employment
hereunder may be terminated only as follows:
(a) Without Cause. The Company may terminate the Employee's employment
-------------
hereunder without cause only upon action by the Board of Directors, and upon no
less than sixty (60) days prior written notice to the Employee. The Employee
may terminate employment hereunder without cause upon no less than sixty (60)
days prior written notice to the Company.
(b) For Cause, by the Company. The Company may terminate the Employee's
-------------------------
employment hereunder for cause immediately and with prompt notice to the
Employee, which cause shall be determined in good faith solely by the Board of
Directors. "Cause" for termination shall include, but is not limited to, the
following conduct of the Employee:
-4-
<PAGE>
(i) Material breach of any provision of this Agreement by the
Employee, which breach shall not have been cured by the Employee within sixty
(60) days of receipt of written notice of said breach;
(ii) Misconduct as an employee of the Company, including but not
limited to: misappropriating any funds or property of the Company; attempting to
willfully obtain any personal profit from any transaction in which the Employee
has an interest which is adverse to the interests of the Company; or any other
act or omission which substantially impairs the Company's ability to conduct its
ordinary business in its usual manner;
(iii) Unreasonable neglect or refusal to perform the duties assigned
to the Employee under or pursuant to this Agreement;
(iv) Conviction of a felony (including pleading guilty or no contest
to a felony or lesser charge which results from plea bargaining); or
(v) Any other act or omission which subjects the Company or any of
its subsidiaries to substantial public disrespect, scandal or ridicule.
(c) For Good Reason by Employee. The Employee may terminate employment
---------------------------
hereunder for good reason immediately and with prompt notice to the Company.
"Good reason" for termination by the Employee shall include, but is not limited
to, the following conduct of the Company:
(i) Material breach of any provision of this Agreement by the
Company, which breach shall not have been cured by the Company within sixty (60)
days of receipt of written notice of said breach;
-5-
<PAGE>
(ii) Failure to maintain the Employee in a position commensurate with
that referred to in Section 2 of this Agreement;
(iii) The assignment to the Employee of any duties inconsistent with
the Employee's position, authority, duties or responsibilities as contemplated
by Section 2 of this Agreement, or any other action by the Company which results
in a diminution of such position, authority, duties or responsibilities,
excluding for this purpose any isolated action not taken in bad faith and which
is promptly remedied by the Company after receipt of notice thereof given by the
Employee.
(d) Death. The period of active employment of the Employee hereunder
-----
shall terminate automatically in the event of his death.
(e) Disability. In the event that the Employee shall be unable to perform
----------
duties hereunder for a period of one hundred eighty (180) consecutive calendar
days or one hundred eighty (180) work days within any 360 consecutive calendar
days, by reason of disability as a result of illness, accident or other physical
or mental incapacity or disability, the Company may, in its discretion, by
giving written notice to the Employee, terminate the Employee's employment
hereunder as long as the Employee is still disabled on the effective date of
such termination.
(f) Mutual Agreement. This Agreement may be terminated at any time by
----------------
mutual agreement of the Employee and the Company.
6. Compensation in the Event of Termination. In the event that the
----------------------------------------
Employee's employment pursuant to this Agreement terminates prior to the end of
the term of this Agreement for a reason provided in Section 5 hereof, the
Company shall pay the Employee compensation as set forth below:
-6-
<PAGE>
(a) By Employee for Good Reason; By Company Without Cause. In the event
-----------------------------------------------------
that the Employee's employment hereunder is terminated by the Employee for good
reason pursuant to Section 5(c) hereof; or by the Company without cause pursuant
to Section 5(a) hereof, then:
(i) the Company shall continue to pay to the Employee his annual
base salary and all other compensation and benefits provided for in Section 3
hereof in the same manner as before termination, and for a period of time ending
on the date when the initial term or Renewal Term, as applicable, of this
Agreement would otherwise have expired in accordance with Section 1 of this
Agreement; provided, however, that in no event shall such amount be less than
Employee's then current one (1) year annual base salary; or if such termination
occurs after the date three (3) years from the date hereof, such amount shall be
no less than Employee's then current one (1) year annual base salary plus one-
twelfth (1/12) of such annual base salary for each year of employment commenced
beyond such three (3) year anniversary date. The Employee shall not be required
to mitigate the amount of any payment provided for in this Section 6(a) by
seeking employment or otherwise, nor shall any amounts received from employment
or otherwise by the Employee offset in any manner the obligations of the Company
hereunder; and
(ii) all other compensation and benefits provided for in Section 3 of
this Agreement shall cease upon such termination; and
(iii) the payments, rights and entitlements described in Sections
6(a)(i) hereof, if any, shall only be made if the Employee shall first have
executed and delivered to the Company a release with respect to his employment
hereunder and the termination of such employment.
-7-
<PAGE>
(b) By Company Upon Termination of Agreement Due to Employee's Death or
-------------------------------------------------------------------
Disability. In the event of the Employee's death or if the Company shall
- ----------
terminate the Employee's employment hereunder for disability pursuant to Section
5(e) hereof then:
(i) the Company shall continue to pay the base salary payable
hereunder at the then current rate for one (1) year after the termination of
employment to the Employee or his personal representative, as applicable;
(ii) in the event of a termination pursuant to Section 5(e) hereof,
if eligible, Employee shall be entitled to benefits under any salaried long-term
disability plan of the Company covering the Employee then in effect; and
(iii) all other compensation and benefits provided for in Section 3
of this Agreement shall cease upon such termination.
(c) By Company For Cause or By Employee Without Good Reason. In the event
-------------------------------------------------------
that: (i) the Company shall terminate the Employee's employment hereunder for
cause pursuant to Section 5(b) hereof; or (ii) the Employee shall terminate
employment hereunder without "good reason" as defined in Section 5(c) hereof,
then the Employee's rights hereunder shall cease as of the effective date of the
termination, including, without limitation, the right to receive the Base Salary
and all other compensation or benefits provided for in this Agreement, except
that the Company shall pay the Employee salary and other Compensation which may
have been earned and is due and payable but which has not been paid as of the
date of termination.
-8-
<PAGE>
7. Effect of Termination. In the event of expiration or early
---------------------
termination of this Agreement as provided herein, neither the Company nor the
Employee shall have any remaining duties or obligations hereunder except that:
(a) The Company shall:
(i) Pay the Employee's accrued salary and any other accrued benefits
under Section 3 hereof;
(ii) Reimburse the Employee for expenses already incurred in
accordance with Section 3(e) hereof;
(iii) To the extent required by law, pay or otherwise provide for any
benefits, payments or continuation or conversion rights in accordance with the
provisions of any benefit plan of which the Employee or any of his dependents is
or was a participant; and
(iv) Pay the Employee or his beneficiaries any compensation due
pursuant to Section 6 hereof; and
(b) The Employee shall remain bound by the terms of Section 8 hereof and
Exhibit A attached hereto.
- ---------
8. Restrictive Covenant. (a) The Employee acknowledges and agrees that
--------------------
he has access to secret and confidential information of the Company and its
subsidiaries and that the following restrictive covenant is necessary to protect
the interests and continued success of the Company. Except as otherwise
expressly consented to in writing by the Company, until the termination of the
Employee's employment (for any reason and whether such employment was under this
Agreement or otherwise) and thereafter for twelve (12) months (the "Restricted
Period"), the Employee shall not, directly or indirectly, acting as an employee,
owner,
-9-
<PAGE>
shareholder, partner, joint venturer, officer, director, agent, salesperson,
consultant, advisor, investor or principal of any corporation or other business
entity:
(i) engage, in any state or territory of the United States of
America or other country where the Company is actively doing business
(determined as of the date the Employee's employment with the Company
terminates), in direct or indirect competition with the business conducted by
the Company or activities which the Company plans to conduct within one year of
termination (determined as of the date the Employee's employment with the
Company terminates);
(ii) request or otherwise attempt to induce or influence, directly or
indirectly, any present customer or supplier, or prospective customer or
supplier, of the Company, or other persons sharing a business relationship with
the Company, to cancel, limit or postpone their business with the Company, or
otherwise take action which might be to the material disadvantage of the
Company; or
(iii) hire or solicit for employment, directly or indirectly, or
induce or actively attempt to influence, any Employee of the Company or any
Affiliate, as such term is defined in the Securities Act of 1933, as amended, to
terminate his or her employment or discontinue such person's consultant,
contractor or other business association with the Company.
(b) If the Employee violates any of the restrictions contained in Section
8(a) above, the Restrictive Period shall be increased by the period of time from
the commencement of any such violation until the time such violation shall be
cured by the Employee to the satisfaction of the Company, and the Company may
withhold any and all payments, except salary, otherwise due and owing to the
Employee under this Agreement.
-10-
<PAGE>
(c) In the event that either the geographical area or the Restrictive
Period set forth in Section 8(a) of this Agreement is deemed to be unreasonably
restrictive in any court proceeding, the court may reduce such geographical area
and Restrictive Period to the extent which it deems reasonable under the
circumstances.
(d) Nothing in this Section 8, whether express or implied, shall prevent
the Employee from being a holder of securities of a company whose securities are
registered under Section 12 of the Securities Exchange Act of 1934, as amended,
or any privately held company; provided, however, that during the term of this
Agreement, and with respect to any company which may be deemed to directly or
indirectly compete with the business conducted by the Company or with the
activities which the Company plans to conduct, the Employee holds of record and
beneficially less than one percent (1%) of the votes eligible to be cast
generally by holders of securities of such company for the election of
directors.
(e) The Employee, as a condition of his continued employment, acknowledges
and agrees that he has reviewed and will continue to be bound by all of the
provisions set forth in Exhibit A attached hereto, which is incorporated herein
---------
by reference and made a part hereof as though fully set forth herein, during the
term of this Agreement, and any time hereafter.
(f) Employee acknowledges and agrees that in the event of a breach or
threatened breach of the provisions of this Section 8 by Employee the Company
may suffer irreparable harm and therefore, the Company shall be entitled, to the
extent permissible by law, immediately to cease to pay or provide the Employee
any compensation being, or to be, paid or provided to him pursuant to Sections 3
or 6 of this Agreement, and also to obtain immediate injunctive relief
restraining the Employee from conduct in breach or threatened breach of the
covenants contained
-11-
<PAGE>
in this Section 8. Nothing herein shall be construed as prohibiting the Company
from pursuing any other remedies available to it for such breach or threatened
breach, including the recovery of damages from the Employee.
9. Directors and Officers Liability Insurance. During the term of this
------------------------------------------
Agreement, the Company shall maintain standard directors and officers liability
insurance in a face amount of no less than $10,000,000.
10. Resolution of Differences Over Breaches of Agreement. Except as
----------------------------------------------------
otherwise provided herein, any controversy or claim arising out of, or relating
to, this Agreement, or the breach hereof, or otherwise arising out of or
relating to the Employee's employment, compensation and benefits with the
Company or the termination thereof, shall be reviewed in the first instance in
accordance with the Company's internal review procedures, if any, with recourse
thereafter--for temporary or preliminary injunctive relief only as to the
provisions of Section 8--to the courts having jurisdiction thereof. If any
relief other than injunctive relief is sought, then to arbitration in the State
of New Jersey administered by the American Arbitration Association, under its
National Rules for the Resolution of Employment Disputes and judgment upon the
award rendered by the Arbitrator(s) may be entered in any court having
jurisdiction thereof. Any claim or controversy not submitted to arbitration in
accordance with this Section 9 shall be waived and, thereafter, no arbitration
panel or tribunal or court shall have the power to rule or make any award on any
such claim or controversy.
11. No Conflicts. The Employee has represented and hereby represents to
-------------
the Company that the execution, delivery and performance by the Employee of this
Agreement do not conflict with or result in a violation or breach of, or
constitute (with or without notice or
-12-
<PAGE>
lapse of time or both) a default under any contract, agreement or understanding,
whether oral or written, to which the Employee is a party or of which the
Employee is or should be aware and the there are no restrictions, covenants,
agreements or limitations on his right or ability to enter into and perform the
terms of this Agreement, and agrees to save the Company harmless from any
liability, cost or expense, including attorney's fees, based upon or arising out
of any such restrictions, covenants, agreements, or limitations that may be
found to exist.
12. Waiver. The waiver by a party hereto of any breach by the other party
------
hereto of any provision of this Agreement shall not operate or be construed as a
waiver of any subsequent breach by a party hereto.
13. Assignment. This Agreement shall be binding upon and inure to the
----------
benefit of the successors and assigns of the Company, and the Company shall be
obligated to require any successor to expressly assume its obligations
hereunder. This Agreement shall inure to the benefit of and be enforceable by
the Employee or his legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. The Employee may not
assign any of his duties, responsibilities, obligations or positions hereunder
to any person and any such purported assignment by him shall be void and of no
force and effect.
14. Notices. Any notices required or permitted to be given under this
-------
Agreement shall be sufficient if in writing, and if personally delivered or when
sent by first class certified or registered mail, postage prepaid, return
receipt requested--in the case of the Employee, to his residence address as set
forth below, and in the case of the Company, to the address of its principal
place of business as set forth below, in care of the Board of Directors--or to
such other
-13-
<PAGE>
person or at such other address with respect to each party as such party shall
notify the other in writing.
15. Construction of Agreement.
-------------------------
(a) Governing Law. This Agreement shall be governed by and its provisions
-------------
construed and enforced in accordance with the internal laws of the State of New
Jersey without reference to its principles regarding conflicts of law.
(b) Severability. In the event that any one or more of the provisions of
------------
this Agreement shall be held to be invalid, illegal or unenforceable, the
validity, legality or enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
(c) Headings. The descriptive headings of the several paragraphs of this
--------
Agreement are inserted for convenience of reference only and shall not
constitute a part of this Agreement.
16. Entire Agreement. This Agreement and Exhibit A hereto contains the
----------------
entire agreement of the parties concerning the Employee's employment and all
promises, representations, understandings, arrangements and prior agreements on
such subject are merged herein and superseded hereby. The provisions of this
Agreement may not be amended, modified, repealed, waived, extended or discharged
except by an agreement in writing signed by the party against whom enforcement
of any amendment, modification, repeal, waiver, extension or discharge is
sought. No person acting other than pursuant to a resolution of the Board of
Directors shall have authority on behalf of the Company to agree to amend,
modify, repeal, waive, extend or discharge any provision of this Agreement or
anything in reference thereto or to exercise any of the Company's rights to
terminate or to fail to extend this Agreement.
-14-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
and attested by its duly authorized officers, and the Employee has set his hand,
all as of the day and year first above written.
ATTEST: GoAmerica, Inc.
/s/ Joseph Korb
_____________________________________ By: /s/ Aaron Dobrinsky
Joseph Korb, Executive Vice President _____________________________
Aaron Dobrinsky, President
Address:______________________________
______________________________
______________________________
WITNESS: EMPLOYEE
/s/ Beverly Grecco /s/ Francis J. Elenio
__________________________ ________________________________
Francis J. Elenio
Address:______________________________
______________________________
______________________________
-15-
<PAGE>
EXHIBIT A
GoAmerica, Inc.
EMPLOYEE'S
INVENTION ASSIGNMENT AND CONFIDENTIALITY
AGREEMENT
In consideration of my employment or continued employment by GoAmerica,
Inc., a Delaware corporation or any subsidiary or parent corporation thereof
(the "Company"), I hereby represent and agree as follows:
1. I understand that the Company is engaged in the business of providing
wireless internet service and related services and that I may have access to or
acquire information with respect to Confidential Information (as defined below),
including processes and methods, development tools, scientific, technical and/or
business innovations.
2. Disclosure of Innovations. I agree to disclose in writing to the
-------------------------
Company all inventions, improvements and other innovations of any kind that I
may make, conceive, develop or reduce to practice, alone or jointly with others,
during the term of my employment with the Company, whether or not they are
related to my work for the Company and whether or not they are eligible for
patent, copyright, trademark, trade secret or other legal protection
("Innovations"). Examples of Innovations shall include, but are not limited to,
discoveries, research, inventions, formulas, techniques, processes, tools, know-
how, marketing plans, new product plans, production processes, advertising,
packaging and marketing techniques and improvements to computer hardware or
software.
3. Assignment of Ownership of Innovations. I agree that all Innovations
--------------------------------------
will be the sole and exclusive property of the Company and I hereby assign all
of my rights, title or interest in the Innovations and in all related patents,
copyrights, trademarks, trade secrets, rights of priority and other proprietary
rights to the Company. At the Company's request and expense, during and after
the period of my employment with the Company, I will assist and cooperate with
the Company in all respects and will execute documents, and, subject to my
reasonable availability, give testimony and take further acts requested by the
Company to obtain, maintain, perfect and enforce for the Company patent,
copyright, trademark, trade secret and other legal protection for the
Innovations. I hereby appoint the President and Chief Executive Officer of the
Company as my attorney-in-fact to execute documents on my behalf for this
purpose.
4. Protection of Confidential Information of the Company. I understand
-----------------------------------------------------
that my work as an employee of the Company creates a relationship of trust and
confidence between myself and the Company. During and after the period of my
employment with the Company, I will not use or disclose or allow anyone else to
use or disclose any "Confidential Information" (as defined below) relating to
the Company, its products, suppliers or customers except as may be necessary in
the performance of my work for the Company or as may be authorized in advance by
appropriate officers of the Company. "Confidential Information" shall include
------------------------
innovations,
-A1-
<PAGE>
methodologies, processes, tools, business strategies, financial information,
forecasts, personnel information, customer lists, trade secrets and any other
non-public technical or business information, whether in writing or given to me
orally, which I know or have reason to know the Company would like to treat as
confidential for any purpose, such as maintaining a competitive advantage or
avoiding undesirable publicity. I will keep Confidential Information secret and
will not allow any unauthorized use of the same, whether or not any document
containing it is marked as confidential. These restrictions, however, will not
apply to Confidential Information that has become known to the public generally
through no fault or breach of mine or that the Company regularly gives to third
parties without restriction on use or disclosure. Upon termination of my work
with the Company, I will promptly deliver to the Company all documents and
materials of any nature pertaining to my work with the Company and I will not
take with me any documents or materials or copies thereof containing any
Confidential Information.
5. Other Agreements. I represent that my performance of all the terms of
----------------
this Agreement and my duties as an employee of the Company will not breach any
invention assignment agreement, confidential information agreement, non-
competition agreement or other agreement with any former employer or other
party. I represent that I have not and will not bring with me to the Company or
use in the performance of my duties for the Company any documents or materials
of a former employer that are not generally available to the public.
6. Disclosure of this Agreement. I hereby authorize the Company to notify
----------------------------
others, including but not limited to customers of the Company and any of my
future employers, of the terms of this Agreement and my responsibilities
hereunder.
7. Injunctive Relief. I understand that in the event of a breach or
-----------------
threatened breach of this Agreement by me the Company may suffer irreparable
harm and monetary damages alone would not adequately compensate the Company.
The Company will therefore be entitled to injunctive relief to enforce this
Agreement.
8. Enforcement and Severability. I acknowledge that each of the
----------------------------
provisions in this Agreement are separate and independent covenants. I agree
that if any court shall determine that any provision of this Agreement is
unenforceable with respect to its term or scope such provision shall nonetheless
be enforceable by any such court upon such modified term or scope as may be
determined by such court to be reasonable and enforceable. The remainder of
this Agreement shall not be affected by the unenforceability or court ordered
modification of a specific provision.
9. Governing Law. I agree that this Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of New Jersey.
10. Superseding Agreement. I understand and agree that this Agreement, as
---------------------
Exhibit A to my Employment Agreement with the Company, contains the entire
agreement of the parties with respect to the subject matter hereof and
supersedes all previous agreements and understandings between the parties with
respect to its subject matter.
-A2-
<PAGE>
11. Acknowledgments. I acknowledge that I have read this agreement, was
---------------
given the opportunity to ask questions and sufficient time to consult an
attorney and I have either consulted an attorney or affirmatively decided not to
consult an attorney. I understand that this agreement is a part of and does not
alter the terms of my Employment Agreement with the Company. I also understand
that my obligations under this Agreement survive the termination of my
employment with the Company.
*.*.*.*.*.*.*.*.*.*
-A3-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written below.
Date: 12/31/99 /s/ Francis J. Elenio
_________________ _____________________________
Francis J. Elenio
Address: 26 Claremont Ave.
__________________________
Cliffside Park, N.J. 07010
__________________________
__________________________
__________________________
GoAmerica, Inc.
Date: 12/31/99 By: /s/ Aaron Dobrinsky
__________________ ______________________________
Name: Aaron Dobrinsky
Title: President
-A4-
<PAGE>
EXHIBIT 10.10
EMPLOYMENT AGREEMENT
THIS AGREEMENT made effective as of the 31st day of December 1999 (the
"Effective Date") by and between GoAmerica, Inc., a Delaware corporation with
its principal place of business at 401 Hackensack Avenue, Hackensack, New Jersey
07601 (the "Company"), and Jesse Odom (the "Employee").
WITNESSETH:
WHEREAS, the Company desires to secure the employment of the Employee in
accordance with the provisions of this Agreement; and
WHEREAS, the Employee desires and is willing to accept employment with the
Company in accordance herewith.
NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. Term. The Company hereby agrees to employ the Employee and the
----
Employee hereby agrees to serve the Company pursuant to the terms and conditions
of this Agreement as Vice President, Network Operations and Technology of the
Company, or in a position at least commensurate therewith in all material
respects, for an initial term commencing on the Effective Date hereof and
expiring on the third anniversary thereof (the "initial term"). On the
expiration of the initial term and on each yearly anniversary thereof, the
Agreement shall automatically renew for an additional one-year period (the
"Renewal Term"), unless sooner terminated in accordance with the provisions of
Section 5 or unless either party notifies the other party in writing of its
intentions not to renew this Agreement not less than sixty (60) days prior to
such expiration date or anniversary, as the case may be.
<PAGE>
2. Positions and Duties.
--------------------
(a) Duties. The Employee's duties hereunder shall be those which shall be
------
prescribed from time to time by the Board of Directors in accordance with the
bylaws of the Company and shall include such executive duties, powers and
responsibilities as customarily attend the office of Vice President, Network
Operations of a company comparable to the Company. The Employee will hold, in
addition to the office of Vice President, Network Operation of the Company, such
other executive offices in the Company and its subsidiaries to which he may be
elected, appointed or assigned by the Board of Directors from time to time and
will discharge such executive duties in connection therewith. During the
employment period, the Employee's position (including status, offices and
reporting requirements), authority, duties and responsibilities shall be at
least commensurate in all material respects with the most significant of those
held, exercised and assigned immediately preceding the Effective Date. The
Employee shall devote his full working time, energy and skill (reasonable
absences for vacations and illness excepted), to the business of the Company as
is necessary in order to perform such duties faithfully, competently and
diligently; provided, however, that notwithstanding any provision in this
Agreement to the contrary, the Employee shall not be precluded from devoting
reasonable periods of time required for serving as a member of boards of
companies which have been approved by the Board of Directors or participating in
non-business organizations so long as such memberships or activities do not
interfere with the performance of the Employee's duties hereunder.
-2-
<PAGE>
3. Compensation. During the term of this Agreement, the Employee shall
------------
receive, for all services rendered to the Company hereunder, the following
(hereinafter referred to as "Compensation"):
(a) Base Salary. For the term hereof, the Employee shall be paid an annual
-----------
base salary equal to $125,000. The Employee's annual base salary shall be
payable in equal installments in accordance with the Company's general salary
payment policies but no less frequently than monthly. Such base salary shall be
reviewed, and any increases in the amount thereof shall be determined, by the
Board of Directors or a compensation committee formed by the Board of Directors
(the "Compensation Committee") at the end of each 12-month period of employment
during the term hereof.
(b) Bonuses. The Employee shall be eligible for and may receive bonuses.
-------
The amount of such bonus shall be a minimum of $25,000. Any additional bonus
shall be solely within the discretion of the Board of Directors or, if formed,
the Compensation Committee thereof.
(c) Incentive Compensation. The Employee shall be eligible for awards from
----------------------
the Company's incentive compensation plans, including without limitation any
stock option plans, applicable to high level executive officers of the Company
or to key employees of the Company or its subsidiaries, in accordance with the
terms thereof and on a basis commensurate with his position and
responsibilities.
(d) Benefits. The Employee and his "dependents," as that term may be
--------
defined under the applicable benefit plan(s) of the Company, shall be included,
to the extent eligible thereunder, in any and all plans, programs and policies
which provide benefits for employees and their dependents. Such plans, programs
and policies may include health care insurance, long-term
-3-
<PAGE>
disability plans, life insurance, supplemental disability insurance,
supplemental life insurance, holidays and other similar or comparable benefits
made available to the Company's employees.
(e) Expenses. Subject to and in accordance with the Company's policies and
--------
procedures, the Employee hereby is authorized to incur, and, upon presentation
of itemized accounts, shall be reimbursed by the Company for, any and all
reasonable and necessary business-related expenses, which expenses are incurred
by the Employee on behalf of the Company or any of its subsidiaries.
4. Absences. The Employee shall be entitled to vacations of no less than
--------
four (4) weeks, absences because of illness or other incapacity, and such other
absences, whether for holiday, personal time, or for any other purpose, as set
forth in the Company's employment manual or current procedures and policies, as
the case may be, as same may be amended from time-to-time.
5. Termination. In addition to the events of termination and expiration
-----------
of this Agreement provided for in Section 1 hereof, the Employee's employment
hereunder may be terminated only as follows:
(a) Without Cause. The Company may terminate the Employee's employment
-------------
hereunder without cause only upon action by the Board of Directors, and upon no
less than sixty (60) days prior written notice to the Employee. The Employee
may terminate employment hereunder without cause upon no less than sixty (60)
days prior written notice to the Company.
(b) For Cause, by the Company. The Company may terminate the Employee's
-------------------------
employment hereunder for cause immediately and with prompt notice to the
Employee, which
-4-
<PAGE>
cause shall be determined in good faith solely by the Board of Directors.
"Cause" for termination shall include, but is not limited to, the following
conduct of the Employee:
(i) Material breach of any provision of this Agreement by the
Employee, which breach shall not have been cured by the Employee within sixty
(60) days of receipt of written notice of said breach;
(ii) Misconduct as an employee of the Company, including but not
limited to: misappropriating any funds or property of the Company; attempting to
willfully obtain any personal profit from any transaction in which the Employee
has an interest which is adverse to the interests of the Company; or any other
act or omission which substantially impairs the Company's ability to conduct its
ordinary business in its usual manner;
(iii) Unreasonable neglect or refusal to perform the duties assigned
to the Employee under or pursuant to this Agreement;
(iv) Conviction of a felony (including pleading guilty or no contest
to a felony or lesser charge which results from plea bargaining); or
(v) Any other act or omission which subjects the Company or any of
its subsidiaries to substantial public disrespect, scandal or ridicule.
(c) For Good Reason by Employee. The Employee may terminate employment
---------------------------
hereunder for good reason immediately and with prompt notice to the Company.
"Good reason" for termination by the Employee shall include, but is not limited
to, the following conduct of the Company:
-5-
<PAGE>
(i) Material breach of any provision of this Agreement by the
Company, which breach shall not have been cured by the Company within sixty (60)
days of receipt of written notice of said breach;
(ii) Failure to maintain the Employee in a position commensurate
with that referred to in Section 2 of this Agreement;
(iii) The assignment to the Employee of any duties inconsistent with
the Employee's position, authority, duties or responsibilities as contemplated
by Section 2 of this Agreement, or any other action by the Company which results
in a diminution of such position, authority, duties or responsibilities,
excluding for this purpose any isolated action not taken in bad faith and which
is promptly remedied by the Company after receipt of notice thereof given by the
Employee.
(d) Death. The period of active employment of the Employee hereunder shall
-----
terminate automatically in the event of his death.
(e) Disability. In the event that the Employee shall be unable to perform
----------
duties hereunder for a period of one hundred eighty (180) consecutive calendar
days or one hundred eighty (180) work days within any 360 consecutive calendar
days, by reason of disability as a result of illness, accident or other physical
or mental incapacity or disability, the Company may, in its discretion, by
giving written notice to the Employee, terminate the Employee's employment
hereunder as long as the Employee is still disabled on the effective date of
such termination.
(f) Mutual Agreement. This Agreement may be terminated at any time by
----------------
mutual agreement of the Employee and the Company.
-6-
<PAGE>
6. Compensation in the Event of Termination. In the event that the
----------------------------------------
Employee's employment pursuant to this Agreement terminates prior to the end of
the term of this Agreement for a reason provided in Section 5 hereof, the
Company shall pay the Employee compensation as set forth below:
(a) By Employee for Good Reason; By Company Without Cause. In the event
-----------------------------------------------------
that the Employee's employment hereunder is terminated by the Employee for good
reason pursuant to Section 5(c) hereof; or by the Company without cause pursuant
to Section 5(a) hereof, then:
(i) the Company shall continue to pay to the Employee his annual base
salary and all other compensation and benefits provided for in Section 3 hereof
in the same manner as before termination for a period of time ending six (6)
months from the date of such termination provided, however, that in the event
that such termination shall occur less than six (6) months from the date of
termination of this Agreement, such base salary, compensation and benefits
payable to Employee shall be equal to the base salary, compensation and benefits
then owed to Employee for the remainder of the term of this Agreement. The
Employee shall not be required to mitigate the amount of any payment provided
for in this Section 6(a) by seeking employment or otherwise, nor shall any
amounts received from employment or otherwise by the Employee offset in any
manner the obligations of the Company hereunder; and
(ii) the payments, rights and entitlements described in Sections
6(a)(i) hereof, if any, shall only be made if the Employee shall first have
executed and delivered to the
-7-
<PAGE>
Company a release with respect to his employment hereunder and the termination
of such employment.
(b) By Company Upon Termination of Agreement Due to Employee's Death or
-------------------------------------------------------------------
Disability. In the event of the Employee's death or if the Company shall
- ----------
terminate the Employee's employment hereunder for disability pursuant to Section
5(e) hereof then:
(i) the Company shall continue to pay the base salary payable
hereunder at the then current rate for one (1) year after the termination of
employment to the Employee or his personal representative, as applicable;
(ii) in the event of a termination pursuant to Section 5(e) hereof,
if eligible, Employee shall be entitled to benefits under any salaried long-term
disability plan of the Company covering the Employee then in effect; and
(iii) all other compensation and benefits provided for in Section 3
of this Agreement shall cease upon such termination.
(c) By Company For Cause or By Employee Without Good Reason. In the event
-------------------------------------------------------
that: (i) the Company shall terminate the Employee's employment hereunder for
cause pursuant to Section 5(b) hereof; or (ii) the Employee shall terminate
employment hereunder without "good reason" as defined in Section 5(c) hereof,
then the Employee's rights hereunder shall cease as of the effective date of the
termination, including, without limitation, the right to receive the Base Salary
and all other compensation or benefits provided for in this Agreement, except
that the Company shall pay the Employee salary and other Compensation which may
have been earned and is due and payable but which has not been paid as of the
date of termination.
-8-
<PAGE>
7. Effect of Termination. In the event of expiration or early termination
---------------------
of this Agreement as provided herein, neither the Company nor the Employee shall
have any remaining duties or obligations hereunder except that:
(a) The Company shall:
(i) Pay the Employee's accrued salary and any other accrued
benefits under Section 3 hereof;
(ii) Reimburse the Employee for expenses already incurred in
accordance with Section 3(e) hereof;
(iii) To the extent required by law, pay or otherwise provide for any
benefits, payments or continuation or conversion rights in accordance with the
provisions of any benefit plan of which the Employee or any of his dependents is
or was a participant; and
(iv) Pay the Employee or his beneficiaries any compensation due
pursuant to Section 6 hereof; and
(b) The Employee shall remain bound by the terms of Section 8 hereof and
Exhibit A attached hereto.
- ---------
8. Restrictive Covenant. (a) The Employee acknowledges and agrees that
--------------------
he has access to secret and confidential information of the Company and its
subsidiaries and that the following restrictive covenant is necessary to protect
the interests and continued success of the Company. Except as otherwise
expressly consented to in writing by the Company, until the termination of the
Employee's employment (for any reason and whether such employment was under this
Agreement or otherwise) and thereafter for twelve (12) months (the "Restricted
Period"), the Employee shall not, directly or indirectly, acting as an employee,
owner,
-9-
<PAGE>
shareholder, partner, joint venturer, officer, director, agent, salesperson,
consultant, advisor, investor or principal of any corporation or other business
entity:
(i) engage, in any state or territory of the United States of
America or other country where the Company is actively doing business
(determined as of the date the Employee's employment with the Company
terminates), in direct or indirect competition with the business conducted by
the Company or activities which the Company plans to conduct within one year of
termination (determined as of the date the Employee's employment with the
Company terminates);
(ii) request or otherwise attempt to induce or influence, directly
or indirectly, any present customer or supplier, or prospective customer or
supplier, of the Company, or other persons sharing a business relationship with
the Company, to cancel, limit or postpone their business with the Company, or
otherwise take action which might be to the material disadvantage of the
Company; or
(iii) hire or solicit for employment, directly or indirectly, or
induce or actively attempt to influence, any Employee of the Company or any
Affiliate, as such term is defined in the Securities Act of 1933, as amended, to
terminate his or her employment or discontinue such person's consultant,
contractor or other business association with the Company.
(b) If the Employee violates any of the restrictions contained in Section
8(a) above, the Restrictive Period shall be increased by the period of time from
the commencement of any such violation until the time such violation shall be
cured by the Employee to the satisfaction of the Company, and the Company may
withhold any and all payments, except salary, otherwise due and owing to the
Employee under this Agreement.
-10-
<PAGE>
(c) In the event that either the geographical area or the Restrictive
Period set forth in Section 8(a) of this Agreement is deemed to be unreasonably
restrictive in any court proceeding, the court may reduce such geographical area
and Restrictive Period to the extent which it deems reasonable under the
circumstances.
(d) Nothing in this Section 8, whether express or implied, shall prevent
the Employee from being a holder of securities of a company whose securities are
registered under Section 12 of the Securities Exchange Act of 1934, as amended,
or any privately held company; provided, however, that during the term of this
Agreement, and with respect to any company which may be deemed to directly or
indirectly compete with the business conducted by the Company or with the
activities which the Company plans to conduct, the Employee holds of record and
beneficially less than one percent (1%) of the votes eligible to be cast
generally by holders of securities of such company for the election of
directors.
(e) The Employee, as a condition of his continued employment, acknowledges
and agrees that he has reviewed and will continue to be bound by all of the
provisions set forth in Exhibit A attached hereto, which is incorporated herein
---------
by reference and made a part hereof as though fully set forth herein, during the
term of this Agreement, and any time hereafter.
(f) Employee acknowledges and agrees that in the event of a breach or
threatened breach of the provisions of this Section 8 by Employee the Company
may suffer irreparable harm and therefore, the Company shall be entitled, to the
extent permissible by law, immediately to cease to pay or provide the Employee
any compensation being, or to be, paid or provided to him pursuant to Sections 3
or 6 of this Agreement, and also to obtain immediate injunctive relief
restraining the Employee from conduct in breach or threatened breach of the
covenants contained
-11-
<PAGE>
in this Section 8. Nothing herein shall be construed as prohibiting the Company
from pursuing any other remedies available to it for such breach or threatened
breach, including the recovery of damages from the Employee.
9. Directors and Officers Liability Insurance. During the term of this
------------------------------------------
Agreement, the Company shall maintain standard directors and officers liability
insurance in a face amount of no less than $10,000,000.
10. Resolution of Differences Over Breaches of Agreement. Except as
----------------------------------------------------
otherwise provided herein, any controversy or claim arising out of, or relating
to, this Agreement, or the breach hereof, or otherwise arising out of or
relating to the Employee's employment, compensation and benefits with the
Company or the termination thereof, shall be reviewed in the first instance in
accordance with the Company's internal review procedures, if any, with recourse
thereafter--for temporary or preliminary injunctive relief only as to the
provisions of Section 8--to the courts having jurisdiction thereof. If any
relief other than injunctive relief is sought, then to arbitration in the State
of New Jersey administered by the American Arbitration Association, under its
National Rules for the Resolution of Employment Disputes and judgment upon the
award rendered by the Arbitrator(s) may be entered in any court having
jurisdiction thereof. Any claim or controversy not submitted to arbitration in
accordance with this Section 9 shall be waived and, thereafter, no arbitration
panel or tribunal or court shall have the power to rule or make any award on any
such claim or controversy.
11. No Conflicts. The Employee has represented and hereby represents to
------------
the Company that the execution, delivery and performance by the Employee of this
Agreement do not conflict with or result in a violation or breach of, or
constitute (with or without notice or
-12-
<PAGE>
lapse of time or both) a default under any contract, agreement or understanding,
whether oral or written, to which the Employee is a party or of which the
Employee is or should be aware and the there are no restrictions, covenants,
agreements or limitations on his right or ability to enter into and perform the
terms of this Agreement, and agrees to save the Company harmless from any
liability, cost or expense, including attorney's fees, based upon or arising out
of any such restrictions, covenants, agreements, or limitations that may be
found to exist.
12. Waiver. The waiver by a party hereto of any breach by the other party
------
hereto of any provision of this Agreement shall not operate or be construed as a
waiver of any subsequent breach by a party hereto.
13. Assignment. This Agreement shall be binding upon and inure to the
----------
benefit of the successors and assigns of the Company, and the Company shall be
obligated to require any successor to expressly assume its obligations
hereunder. This Agreement shall inure to the benefit of and be enforceable by
the Employee or his legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. The Employee may not
assign any of his duties, responsibilities, obligations or positions hereunder
to any person and any such purported assignment by him shall be void and of no
force and effect.
14. Notices. Any notices required or permitted to be given under this
-------
Agreement shall be sufficient if in writing, and if personally delivered or when
sent by first class certified or registered mail, postage prepaid, return
receipt requested--in the case of the Employee, to his residence address as set
forth below, and in the case of the Company, to the address of its principal
place of business as set forth below, in care of the Board of Directors--or to
such other
-13-
<PAGE>
person or at such other address with respect to each party as such party shall
notify the other in writing.
15. Construction of Agreement.
-------------------------
(a) Governing Law. This Agreement shall be governed by and its provisions
-------------
construed and enforced in accordance with the internal laws of the State of New
Jersey without reference to its principles regarding conflicts of law.
(b) Severability. In the event that any one or more of the provisions of
------------
this Agreement shall be held to be invalid, illegal or unenforceable, the
validity, legality or enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
(c) Headings. The descriptive headings of the several paragraphs of this
--------
Agreement are inserted for convenience of reference only and shall not
constitute a part of this Agreement.
16. Entire Agreement. This Agreement and Exhibit A hereto contains the
----------------
entire agreement of the parties concerning the Employee's employment and all
promises, representations, understandings, arrangements and prior agreements on
such subject are merged herein and superseded hereby. The provisions of this
Agreement may not be amended, modified, repealed, waived, extended or discharged
except by an agreement in writing signed by the party against whom enforcement
of any amendment, modification, repeal, waiver, extension or discharge is
sought. No person acting other than pursuant to a resolution of the Board of
Directors shall have authority on behalf of the Company to agree to amend,
modify, repeal, waive, extend or discharge any provision of this Agreement or
anything in reference thereto or to exercise any of the Company's rights to
terminate or to fail to extend this Agreement.
-14-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
and attested by its duly authorized officers, and the Employee has set his hand,
all as of the day and year first above written.
ATTEST: GoAmerica, Inc.
/s/ Francis J. Elenio /s/ Aaron Dobrinsky
________________________________ By: _____________________________
Francis J. Elenio, Secretary Aaron Dobrinsky, President
Address:______________________________
______________________________
______________________________
WITNESS: EMPLOYEE
/s/ Renee R. Metter /s/ Jesse Odom
____________________________ ________________________________
Jesse Odom
Address:______________________________
______________________________
______________________________
-15-
<PAGE>
EXHIBIT A
GoAmerica, Inc.
EMPLOYEE'S
INVENTION ASSIGNMENT AND CONFIDENTIALITY
AGREEMENT
In consideration of my employment or continued employment by GoAmerica,
Inc., a Delaware corporation or any subsidiary or parent corporation thereof
(the "Company"), I hereby represent and agree as follows:
1. I understand that the Company is engaged in the business of providing
wireless internet service and related services and that I may have access to or
acquire information with respect to Confidential Information (as defined below),
including processes and methods, development tools, scientific, technical and/or
business innovations.
2. Disclosure of Innovations. I agree to disclose in writing to the
-------------------------
Company all inventions, improvements and other innovations of any kind that I
may make, conceive, develop or reduce to practice, alone or jointly with others,
during the term of my employment with the Company, whether or not they are
related to my work for the Company and whether or not they are eligible for
patent, copyright, trademark, trade secret or other legal protection
("Innovations"). Examples of Innovations shall include, but are not limited to,
discoveries, research, inventions, formulas, techniques, processes, tools, know-
how, marketing plans, new product plans, production processes, advertising,
packaging and marketing techniques and improvements to computer hardware or
software.
3. Assignment of Ownership of Innovations. I agree that all Innovations
--------------------------------------
will be the sole and exclusive property of the Company and I hereby assign all
of my rights, title or interest in the Innovations and in all related patents,
copyrights, trademarks, trade secrets, rights of priority and other proprietary
rights to the Company. At the Company's request and expense, during and after
the period of my employment with the Company, I will assist and cooperate with
the Company in all respects and will execute documents, and, subject to my
reasonable availability, give testimony and take further acts requested by the
Company to obtain, maintain, perfect and enforce for the Company patent,
copyright, trademark, trade secret and other legal protection for the
Innovations. I hereby appoint the President and Chief Executive Officer of the
Company as my attorney-in-fact to execute documents on my behalf for this
purpose.
4. Protection of Confidential Information of the Company. I understand
-----------------------------------------------------
that my work as an employee of the Company creates a relationship of trust and
confidence between myself and the Company. During and after the period of my
employment with the Company, I will not use or disclose or allow anyone else to
use or disclose any "Confidential Information" (as defined below) relating to
the Company, its products, suppliers or customers except as may be necessary in
the performance of my work for the Company or as may be authorized in advance by
appropriate officers of the Company. "Confidential Information" shall include
------------------------
innovations,
-A1-
<PAGE>
methodologies, processes, tools, business strategies, financial information,
forecasts, personnel information, customer lists, trade secrets and any other
non-public technical or business information, whether in writing or given to me
orally, which I know or have reason to know the Company would like to treat as
confidential for any purpose, such as maintaining a competitive advantage or
avoiding undesirable publicity. I will keep Confidential Information secret and
will not allow any unauthorized use of the same, whether or not any document
containing it is marked as confidential. These restrictions, however, will not
apply to Confidential Information that has become known to the public generally
through no fault or breach of mine or that the Company regularly gives to third
parties without restriction on use or disclosure. Upon termination of my work
with the Company, I will promptly deliver to the Company all documents and
materials of any nature pertaining to my work with the Company and I will not
take with me any documents or materials or copies thereof containing any
Confidential Information.
5. Other Agreements. I represent that my performance of all the terms of
----------------
this Agreement and my duties as an employee of the Company will not breach any
invention assignment agreement, confidential information agreement, non-
competition agreement or other agreement with any former employer or other
party. I represent that I have not and will not bring with me to the Company or
use in the performance of my duties for the Company any documents or materials
of a former employer that are not generally available to the public.
6. Disclosure of this Agreement. I hereby authorize the Company to notify
----------------------------
others, including but not limited to customers of the Company and any of my
future employers, of the terms of this Agreement and my responsibilities
hereunder.
7. Injunctive Relief. I understand that in the event of a breach or
------------------
threatened breach of this Agreement by me the Company may suffer irreparable
harm and monetary damages alone would not adequately compensate the Company.
The Company will therefore be entitled to injunctive relief to enforce this
Agreement.
8. Enforcement and Severability. I acknowledge that each of the
----------------------------
provisions in this Agreement are separate and independent covenants. I agree
that if any court shall determine that any provision of this Agreement is
unenforceable with respect to its term or scope such provision shall nonetheless
be enforceable by any such court upon such modified term or scope as may be
determined by such court to be reasonable and enforceable. The remainder of
this Agreement shall not be affected by the unenforceability or court ordered
modification of a specific provision.
9. Governing Law. I agree that this Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of New Jersey.
10. Superseding Agreement. I understand and agree that this Agreement, as
---------------------
Exhibit A to my Employment Agreement with the Company, contains the entire
agreement of the parties with respect to the subject matter hereof and
supersedes all previous agreements and understandings between the parties with
respect to its subject matter.
-A2-
<PAGE>
11. Acknowledgments. I acknowledge that I have read this agreement, was
---------------
given the opportunity to ask questions and sufficient time to consult an
attorney and I have either consulted an attorney or affirmatively decided not to
consult an attorney. I understand that this agreement is a part of and does not
alter the terms of my Employment Agreement with the Company. I also understand
that my obligations under this Agreement survive the termination of my
employment with the Company.
*.*.*.*.*.*.*.*.*.*
-A3-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written below.
Date: 12/31/99 /s/ Jesse Odom
________________________ ______________________________
Jesse Odom
Address: ______________________
______________________
______________________
______________________
GoAmerica, Inc.
Date: 12/31/99
________________________ By: /s/ Aaron Dobrinsky
______________________________
Name: Aaron Dobrinsky
Title: President
-A4-
<PAGE>
EXHIBIT 10.11
GOAMERICA COMMUNICATIONS CORP.
1999 STOCK OPTION PLAN
Section 1. Purpose
-------
The purpose of this GoAmerica Communications Corp. 1999 Stock Option Plan
(the "Plan") is to provide to Employees and Consultants of GoAmerica
Communications Corp., a Delaware Corporation (the "Corporation") and its
Subsidiaries, who are in a position to contribute materially to the long-term
success of the Corporation, with options to acquire Stock of the Corporation.
The Corporation believes that this incentive program will cause those persons to
increase their interest in the Corporation's welfare, and aid in attracting and
retaining Employees and Consultants of outstanding ability.
Section 2. Definitions
-----------
Unless the context clearly indicates otherwise, the following terms, when
used in the Plan, shall have the meanings set forth in this Section:
(1) "Board" shall mean the Board of Directors of the Corporation.
(2) A "Change in Control" shall be deemed to have occurred:
(1) if any person (as defined in Section 3(a)(9) and 13(d)(3) of the
Exchange Act), other than the Corporation or an employee benefit plan of
the Corporation, acquires directly or indirectly the beneficial ownership
of any voting security of the Corporation and immediately after such
acquisition such person is, directly or indirectly, the beneficial owner of
voting securities representing 50% or more of the total voting power of any
class of voting securities of the Corporation then outstanding;
(2) upon consummation of any transaction described in Section 8,
other than any such transaction which results in at least 60% of the total
voting power represented by each of the voting securities of the
Corporation (or, if the Corporation does not survive, the surviving entity)
outstanding immediately after such transaction being beneficially owned by
at least 80% of the holders of each class of outstanding voting securities
of the Corporation immediately prior to the transaction, with the voting
power of each such continuing holder relative to other such continuing
holders are not substantially altered in the transaction;
(3) upon a complete liquidation of the Corporation or the sale or
disposition by the Corporation of all or a substantial portion of the
Corporation's assets (i.e., 50% or more of the total assets of the
Corporation); or
<PAGE>
(4) if the individuals (A) who constitute the Board as of the date
the Plan is adopted by the Board (the "Original Directors") or (B) who
thereafter are elected to the Board and whose election, or nomination for
election, to the Board was approved by a vote of at least two-thirds (2/3)
of the Original Directors then still in office (such directors becoming
"Additional Original Directors" immediately following their election) or
(C) who are elected to the Board and whose election, or nomination for
election, to the Board was approved by a vote of at least two-thirds (2/3)
of the Original Directors and Additional Original Directors then still in
office (such directors also becoming "Additional Original Directors"
immediately following their election), cease for any reason to constitute a
majority of the members of the Board.
For purposes of the foregoing, the terms "beneficial ownership", "beneficial
owner", and "beneficially owned" shall be determined in accordance with Rule
13d-3 promulgated pursuant to the Exchange Act.
(3) "Code" shall mean the Internal Revenue Code of 1986 as it may be
amended from time to time.
(4) "Committee" means the Compensation and Stock Option Committee of the
Board, or such other Board committee as may be designated by the Board to
administer the Plan.
(5) "Consultant" shall mean (i) any person who is engaged to perform
services for the Corporation or its Subsidiaries, other than as an Employee or
Director, or (ii) any person who has agreed to become a consultant within the
meaning of clause (i).
(6) "Corporation" shall mean GoAmerica Communications Corp., a Delaware
corporation.
(7) "Director" shall mean any member of the Board.
(8) "Employee" shall mean (i) any full-time employee of the Corporation or
its Subsidiaries (including Directors who are otherwise employed on a full-time
basis by the Corporation or its Subsidiaries), or (ii) any person who has agreed
to become an employee within the meaning of clause (i).
(9) "Exchange Act" shall mean the Securities Exchange Act of 1934, as it
may be amended from time to time.
(10) "Fair Market Value" means, with respect to Stock, the Fair Market
Value thereof determined by such methods or procedures as shall be established
from time to time by the Committee, provided, however, that (i) if the Stock is
-------- -------
listed on a national securities exchange or quoted in an interdealer quotation
system, the Fair Market Value of the Stock on a given date shall be based upon
the last sales price or, if unavailable, the average of the closing bid and
asked prices per share of the Stock on such date (or, if there was no trading or
quotation in the Stock on such date,
2
<PAGE>
on the next preceding date on which there was trading or quotation) as reported
in The Wall Street Journal (or other reporting service approved by the
--- -------------------
Committee).
(11) "Grantee" shall mean a person granted an Option under the Plan.
(12) "ISO" shall mean an Option granted pursuant to the Plan to purchase
shares of the Stock and intended to qualify as an incentive stock option under
Section 422 of the Code, as now or hereafter constituted.
(13) "NQSO" shall mean an Option granted pursuant to the Plan to purchase
shares of the Stock that is not an ISO.
(14) "Options" shall refer collectively to NQSOs and ISOs issued under and
subject to the Plan.
(15) "Plan" shall mean this 1999 Stock Option Plan as set forth herein and
as amended from time to time.
(16) "Stock" shall mean Common Stock of the Corporation, par value $.01 per
share.
(17) "Stock Option Agreement" shall mean a written agreement between the
Corporation and the Grantee, or a certificate accepted by the Grantee,
evidencing the grant of an Option hereunder and containing such terms and
conditions, not inconsistent with the Plan, as the Committee shall approve.
(18) "Subsidiary" shall mean (i) any corporation with respect to which the
Corporation owns, directly or indirectly, 50% or more of the total combined
voting power of all classes of stock of such corporation, or (ii) any entity
which the Committee reasonably expects to become a subsidiary within the meaning
of clause (i).
Section 3. Shares of Stock Subject to the Plan
-----------------------------------
Subject to adjustment as provided in Section 8, the total number of shares
of Stock that may be issued pursuant to Options granted under the Plan shall not
exceed 239,500 shares. Any shares of Stock delivered pursuant to an Option may
consist, in whole or in part, of authorized and unissued shares or treasury
shares. Stock subject to Options that are forfeited, lapse or terminate in
whole or in part for any reason (other than by reason of Option exercise) shall
be available for issuance pursuant to other Options.
Section 4. Administration of the Plan
--------------------------
(1) The Plan shall be administered by the Committee. Subject to the
express provisions of the Plan, the Committee shall have the authority to: (i)
interpret the Plan, (ii) prescribe, amend and rescind rules and regulations
relating to the Plan, (iii) determine the terms and provisions of Stock
3
<PAGE>
Option Agreements thereunder and (iv) make all other determinations necessary or
advisable for the administration of the Plan.
(2) Any controversy or claim arising out of or related to the Plan or the
Options granted thereunder shall be determined unilaterally by, and at the sole
discretion of, the Committee. Any action of the Committee with respect to the
Plan shall be final, conclusive and binding on all persons, including the
Corporation, subsidiaries of the Corporation, Grantees, any person claiming any
rights under the Plan from or through any Grantee, and stockholders of the
Corporation or any Subsidiary. The express grant of any specific power to the
Committee, and the taking of any action by the Committee, shall not be construed
as limiting any power or authority of the Committee. The Committee may delegate
to officers or managers of the Corporation or any Subsidiary the authority,
subject to such terms as the Committee shall determine, to perform such
functions as the Committee may determine, to the extent permitted under
applicable law. Other provisions of the Plan notwithstanding, the Board may
perform any function of the Committee under the Plan. In any case in which the
Board is performing a function of the Committee under the Plan, each reference
to the Committee herein shall be deemed to refer to the Board.
Section 5. Grant of Options to Employees and Consultants
---------------------------------------------
(1) Employees and Consultants of the Corporation and its Subsidiaries
shall be eligible to receive Options under the Plan. The Committee shall
determine and designate from time to time the Employees or Consultants who are
to be granted Options, and shall specify in each Stock Option Agreement the
nature of the Option granted and the number of shares of Stock subject to each
such Option.
(2) The Committee shall determine whether any Option granted shall be an
ISO or NQSO. Notwithstanding the foregoing, Grantees who are not Employees
(determined with reference to Section 2(h)(i) only) of the Corporation or a
Subsidiary (determined with reference to Section 2(r)(i) only) on the date an
Option is granted shall only receive NQSOs.
(3) The exercise price per share of Stock subject to an Option in the case
of an ISO shall not be less than 100% of the Fair Market Value of the Stock on
the date such Option is granted, or in the case of an ISO granted to an
individual described in Section 422(b)(6) of the Code, 110% of the Fair Market
Value of a share of the Stock on the date the Option is granted, and in the case
of a NQSO shall be the price determined by the Committee.
(4) The term of each Option granted to an Employee or Consultant shall be
determined by the Committee and specified in a Stock Option Agreement, provided
that no Option shall be exercisable more than ten years from the date such
Option is granted.
(5) The aggregate fair market value (for this purpose, determined in
accordance with Section 422(d)(3) of the Code at the time the ISO is granted) of
the Stock with respect to which ISOs are exercisable for the first time by any
Employee during any calendar year under all plans of the Corporation and its
Subsidiaries shall not exceed $100,000. To the extent the limitation set forth
in
4
<PAGE>
the preceding sentence is exceeded, the Options with respect to such excess
shall be treated as NQSOs.
(6) The Committee shall determine whether any Option granted to an
Employee or Consultant shall become vested and exercisable in one or more
installments and specify the installment dates in the Stock Option Agreement.
The Committee shall also specify in the Stock Option Agreement such other
provisions, not inconsistent with the terms of the Plan, as it may deem
desirable, including such provisions as it may deem necessary to qualify an ISO
under the provisions of Section 422 of the Code. Unless otherwise determined by
the Committee, each Option shall become vested and exercisable in three equal
installments on each of the second, third and fourth anniversaries of the date
such Option is granted; provided, however, that in the event of the death of a
-------- -------
Grantee prior to full vesting hereunder, each Option granted to any such Grantee
shall become immediately vested and exercisable upon the date of such Grantee's
death; and provided, further, that each Option not vested and exercisable on the
-------- -------
date of the consummation of a Change in Control shall become immediately vested
and exercisable to all Grantees under the Plan immediately prior to the Change
in Control.
(g) Each Option granted under the Plan shall constitute an option to
purchase one share of Stock.
(h) The Committee may, at any time, grant new or additional Options to any
eligible Employee or Consultant who has previously received Options under the
Plan, or options under other plans, whether such prior Options or other options
are still outstanding, have been exercised previously in whole or in part, or
have been canceled. The exercise price of such new or additional Options may be
established by the Committee, subject to Section 5(c) hereof, without regard to
such previously granted Options or other options.
Section 6. Exercise of Options; Cancellation for Cash
------------------------------------------
(1) A Grantee shall exercise an Option by delivery of written notice of
the Corporation setting forth the number of shares with respect to which the
Option is to be exercised. On the exercise date, the Grantee shall deliver to
the Corporation the exercise price (in cash, certified check, bank draft postal
or express money order payable to the order of the Corporation, or by wire
transfer, for an amount equal to the Option price of such shares plus any income
tax required to be withheld). The Committee may, in its sole discretion, permit
a Grantee to pay all or a portion of the exercise price by delivery of Stock or
other property (including notes or other contractual obligations of the Grantee
to make payment on a deferred basis, such as through "cashless exercise"
arrangements, to the extent permitted by applicable law), and the methods by
which Stock will be delivered or deemed to be delivered to the Grantee.
(2) Except as provided pursuant to Section 7(a), no Option granted to an
Employee or Consultant shall be exercised unless at the time of such exercise
the Grantee is then an Employee (determined with reference to Section 2(h)(i)
only) or Consultant (determined with reference to
5
<PAGE>
Section 2(e)(i) only) of the Corporation or a Subsidiary (determined with
reference to Section 2(q)(i) only).
Section 7. Termination of Employment
-------------------------
(1) Unless otherwise determined by the Committee, upon termination of a
Grantee's employment or consultancy with the Corporation and its Subsidiaries, a
Grantee's Options shall terminate as follows: (i) if such termination is on
account of permanent and total disability (as determined by the Committee), such
Options shall terminate one year thereafter; (ii) if such termination is on
account of death, such Options shall terminate six months thereafter; (iii) if
such termination is for cause (as determined by the Committee), such Options
shall terminate immediately; and (iv) if such termination is for any other
reason, such Options shall terminate 90 days thereafter. In addition, all
Options granted on the basis of clause (ii) of Section 2(e), (h) or (r) shall
immediately terminate if the Committee determines, in its sole discretion, that
the Consultant, Employee or Subsidiary, as the case may be, will not become a
Consultant, Employee or Subsidiary within the meaning of clause (i) of such
Sections.
(2) The sale of any Subsidiary shall be treated as a termination of
employment or consultancy, as the case may be, under Section 7(a)(iv) with
respect to any Grantee employed or retained by such Subsidiary.
(3) Pursuant to Section 7(a)(ii), in the event of death, Options may be
exercised by a Grantee's legal representative.
(4) During any period described in Section 7(a) following the Grantee's
termination of employment or consultancy but prior to termination of the Option,
unless otherwise determined by the Committee, the Option shall be exercisable
only to the extent that it was exercisable upon such termination of employment
or consultancy.
Section 8. Adjustment Upon Changes in Capitalization
-----------------------------------------
In the event of any recapitalization, forward or reverse split,
reorganization, merger, consolidation, spin-off, combination, repurchase, or
exchange of Stock or other securities, Stock dividend or other special, large
and nonrecurring dividend or distribution (whether in the form of cash,
securities or other property), liquidation, dissolution, or other similar
corporate transaction or event, affects the Stock such that an adjustment is
appropriate in order to prevent dilution or enlargement of the rights of
Grantees under the Plan, then the Committee shall, in such manner as it may deem
equitable, adjust any or all of (i) the number and kind of shares of Stock
deemed to be available thereafter for grants of Options under Section 3, (ii)
the number and kind of shares of Stock that may be delivered or deliverable in
respect of outstanding Options, (iii) the number of shares with respect to which
Options may be granted to a given Grantee in the specified period as set forth
in Section 5(a), and (iv) the exercise price (or, if deemed appropriate, the
Committee may make provision for a cash payment with respect to any outstanding
Option). In addition, the Committee is authorized to make adjustments in the
terms and conditions of, and the criteria included in,
6
<PAGE>
Options (including, without limitation, cancellation of Options in exchange for
the in-the-money value, if any, of the vested portion thereof, or substitution
of Options using stock of a successor or other entity) in recognition or unusual
or nonrecurring events (including, without limitation, events described in the
preceding sentence and events constituting a Change in Control) affecting the
Corporation or any Subsidiary or the financial statements of the Corporation or
any Subsidiary, or in response to changes in applicable laws, regulations, or
accounting principles.
Section 9. Restrictions on Issuing Shares
------------------------------
The Corporation shall not be obligated to deliver Stock upon the exercise
or settlement of any Option or take any other action under the Plan until the
Corporation shall have determined that applicable federal and state laws, rules,
and regulations have been complied with and such approvals of any regulatory or
governmental agency have been obtained and contractual obligations to which the
Option may be subject have been satisfied. The Corporation, in its discretion,
may postpone the issuance or delivery of Stock under any Option until completion
of such stock exchange listing or registration or qualification of such Stock or
other required action under any federal or state law, rule, or regulation as the
Corporation may consider appropriate, and may require any Grantee to make such
representations and furnish such information as it may consider appropriate in
connection with the issuance or delivery of Stock under the Plan. The
Corporation may cause a legend or legends to be placed on any certificates
representing shares issued pursuant to the Plan.
Section 10. Tax Withholding
---------------
The Corporation shall have the right to require that the Grantee make such
provision, or furnish the Corporation such authorization, necessary or desirable
so that the Corporation may satisfy its obligation, under applicable laws, to
withhold or otherwise pay for income or other taxes of the Grantee attributable
to the grant or exercise of Options granted under the Plan or the sale of Stock
issued with respect to Options. This authority shall include authority to
withhold or receive Stock or other property and to make cash payments in respect
thereof in satisfaction of a Grantee's tax obligations.
Section 11. Transferability
---------------
Options will not be transferable by a Grantee except by will or the laws of
descent and distribution or to a beneficiary in the event of the Grantee's
death, shall not be pledged, mortgaged, hypothecated or otherwise encumbered, or
otherwise subject to the claims of creditors, and, in the case of ISOs, shall be
exercisable during the lifetime of a Grantee only by such Grantee or his
guardian or legal representative; provided, however, that NQSOs may be
-----------------
transferred to one or more transferees during the lifetime of the Grantee to the
extent and on such terms as then may be permitted by the Committee.
Section 12. General Provisions
------------------
(1) Each Option shall be evidenced by a Stock Option Agreement. The terms
and
7
<PAGE>
provisions of such Stock Option Agreements may vary among Grantees and among
different Options granted to the same Grantee.
(2) The grant of an Option in any year shall not give the Grantee any
right to similar grants in future years, any right to continue such Grantee's
employment relationship with the Corporation or its Subsidiaries, or, until such
Option is exercised and share certificates are issued, any rights as a
Stockholder of the Corporation. All Grantees shall remain subject to discharge
to the same extent as if the Plan were not in effect.
(3) No Grantee, and no beneficiary or other persons claiming under or
through the Grantee shall have any right, title or interest by reason of any
Option to any particular assets of the Corporation or its Subsidiaries, or any
shares of Stock allocated or reserved for the purposes of the Plan or subject to
any Option except as set forth herein. The Corporation shall not be required to
establish any fund or make any other segregation of assets to assure the payment
of any Option.
(4) The issuance of shares of Stock to Grantees or to their legal
representatives shall be subject to any applicable taxes and other laws or
regulations of the United States or of any state having jurisdiction thereof.
Section 13. Changes to the Plan and Stock Option Agreements
-----------------------------------------------
The Board may amend, alter, suspend, discontinue or terminate the Plan or
the Committee's authority to grant Options under the Plan at any time; provided,
--------
however, that without the consent of an affected Grantee, no such action may
- -------
materially impair the rights of such Grantee under any Option theretofore
granted to him, and, provided, further, however, that any stockholder approval
-------- ------- -------
necessary in order to comply with Section 422 of the Code (or other applicable
law, regulation or listing requirement) shall be obtained in the manner required
therein.
Section 14. Effective Date of Plan
----------------------
The Plan is effective upon its approval by the Board, subject to the
approval of the Plan by the Corporation's stockholders either before or after
such effective date, and shall continue in effect until terminated by the Board.
No ISO may be granted more than ten years after such date.
8
<PAGE>
EXHIBIT 10.12
GOAMERICA, INC.
1999 STOCK PLAN
1. Purposes of the Plan. The purposes of this Stock Plan are to attract
--------------------
and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees, non-Employee
members of the Board and Consultants (sometimes referred to herein as
"Participants") of the Company and its Subsidiaries and to promote the success
of the Company's business.
2. Certain Definitions. As used herein, the following definitions shall
-------------------
apply:
(a) "Award" or "Awards," except where referring to a particular category of
----- ------
grant under the Plan, shall include Incentive Stock Options, Nonstatutory Stock
Options, Restricted Stock Awards and Stock Awards.
(b) "Board" means the Board of Directors of the Company.
-----
(c) "Code" means the Internal Revenue Code of 1986, as amended, including
----
any successor law thereto.
(d) "Committee" means any Committee appointed by the Board of Directors in
---------
accordance with Section 4 of the Plan.
(e) "Common Stock" means the Common Stock, $.01 par value, of the Company.
------------
(f) "Company" means GoAmerica, Inc., a Delaware corporation.
-------
(g) "Consultant" means any person, including an advisor, who is engaged by
----------
the Company or any Parent or Subsidiary to render services and is compensated
for such services, and any non-Employee Director of the Company whether
compensated for such services or not.
(h) "Continuous Status as an Employee" means the absence of any
--------------------------------
interruption or termination of the employment relationship by the Company or any
Subsidiary. Continuous Status as an Employee shall not be considered interrupted
in the case of: (i) sick leave; (ii) military leave; (iii) any other leave of
absence approved by the Board, provided that such leave is for a period of not
more than ninety (90) days, unless reemployment upon the expiration of such
leave is guaranteed by contract or statute, or unless provided otherwise
pursuant to Company policy adopted from time to time; or (iv) transfers between
locations of the Company or between the Company, its Subsidiaries or its
successor.
(i) "Employee" means any person, including officers and Directors, employed
--------
by the Company or any Parent or Subsidiary of the Company
(j) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
------------
<PAGE>
(k) "Fair Market Value" means: (i) if the Common Stock is admitted to
-----------------
quotation on the National Association of Securities Dealers Automated Quotation
System ("NASDAQ"), the Fair Market Value on any given date shall be the average
of the highest bid and lowest asked prices of the Common Stock reported for such
date or, if no bid and asked prices were reported for such date, for the last
day preceding such date for which such prices were reported; or (ii) if the
Common Stock is admitted to trading on a United States securities exchange or
the NASDAQ National Market System, the Fair Market Value on any date shall be
the closing price reported for the Common Stock on such exchange or system for
such date or, if no sales were reported for such date, for the last day
preceding such date for which a sale was reported; (iii) notwithstanding the
foregoing, the Fair Market Value of the Common Stock on the effective date of
the Company's Initial Public Offering shall be the offering price to the public
of the Common Stock on such date; and (iv) in the absence of an established
market for the Common Stock, the Fair Market Value thereof shall be determined
in good faith by the Plan Administrator.
(l) "Incentive Stock Option" means an Option intended to qualify as an
----------------------
incentive stock option within the meaning of Section 422 of the Code.
(m) "Initial Public Offering" means the first underwritten public offering
-----------------------
pursuant to an effective registration statement under the Securities Act of
1933, as amended, covering the offer and sale of the Common Stock to the public.
(n) "Nonstatutory Stock Option" means an Option not intended to qualify as
-------------------------
an Incentive Stock Option.
(o) "Option" means a stock option granted pursuant to the Plan.
------
(p) "Optioned Stock" means the Common Stock subject to an Option.
--------------
(q) "Optionee" means an Employee, Consultant or non-Employee Director who
--------
receives an Option.
(r) "Parent" means a "parent corporation," whether now or hereafter
------
existing, as defined in Section 424(e) of the Code.
(s) "Plan" means this 1999 Stock Plan.
----
(t) "Plan Administrator" means the Board or any of its Committees appointed
------------------
pursuant to Section 4 of the Plan.
(u) "Restricted Stock" means shares of Common Stock acquired pursuant to a
----------------
Restricted Stock Award under Section 12 below.
(v) "Restricted Stock Award" means any Award granted pursuant to Section 12
----------------------
of the Plan.
-2-
<PAGE>
(w) "Share" means a share of the Common Stock, as may be adjusted from time
-----
to time in accordance with Section 15 of the Plan.
(x) "Stock Award" means any award granted pursuant to Section 13 of the
-----------
Plan.
(y) "Subsidiary" means a "subsidiary corporation," whether now or hereafter
----------
existing, as defined in Section 424(f) of the Code.
(z) "Termination for Cause" shall include, but not be limited to, a finding
---------------------
by the Board of the Participant's: (i) performance of duties in an incompetent
manner; (ii) commission of any act of fraud, insubordination, misappropriation
or personal dishonesty relating to or involving the Company in any material way;
(iii) gross negligence; (iv) violation of any express direction of the Company
or any material violation of any rule, regulation, policy or plan established by
the Company from time to time regarding the conduct of its employees or its
business, if such violation is not remedied by the Participant within thirty
(30) days of receiving notice of such violation from the Company; (v) violation
of any obligation of Participant's consulting relationship or Continuous Status
as an Employee with the Company that is demonstrably willful and deliberate on
the Participant's part and is not remedied by the Participant within thirty (30)
days after receiving notice of such violation from the Company; (vi) disclosure
or use of confidential information of the Company, other than as required in the
performance of the Participant's duties; (vii) actions that are clearly contrary
to the best interest of the Company; (viii) conviction of a crime constituting a
felony or any other crime involving moral turpitude, or no conviction, but the
substantial weight of credible evidence indicates that the Participant has
committed such a crime; or (ix) the Participant's use of alcohol or any unlawful
controlled substance to an extent that it interferes with the performance of the
Participant's duties.
3. Stock Subject to the Plan. Subject to the provisions of Section 15 of
-------------------------
the Plan, the initial maximum number of shares of Common Stock that may be
issued under the Plan shall be 600,000; provided, however, that the maximum
-------- -------
number of shares available under the Plan shall automatically be increased to an
amount equal to twenty percent (20%) of the shares of Common Stock outstanding
on any December 31, beginning on December 31, 2000; and provided, further, that
the foregoing formula shall never result in a decrease in the maximum number of
shares of Common Stock available for issuance under the Plan. For purposes of
the foregoing limitation, the shares of Common Stock underlying any Awards which
are forfeited, canceled, reacquired by the Company, satisfied without the
issuance of Common Stock or otherwise terminated (other than by exercise) shall
be added back to the number of shares of Common Stock available for issuance
under the Plan. Notwithstanding the foregoing: (i) no more than 600,000 shares
shall be available for the award of Incentive Stock Options; and (ii) on and
after the date that the Plan is subject to Section 162(m) of the Code, Options
with respect to no more than 200,000 shares of Common Stock may be granted to
any one individual Participant during any one (1) calendar year period. Common
Stock to be issued under the Plan may be either authorized and unissued shares
or shares held in treasury by the Company.
-3-
<PAGE>
4. Administration of the Plan. The Plan shall be administered by: (i) the
--------------------------
full Board; or (ii) a committee of the Board comprised of two or more "Non-
Employee Directors" within the meaning of Rule 16b-3(b)(3) promulgated under the
Exchange Act. Subject to the provisions of the Plan, the Plan Administrator is
authorized to:
(a) construe the Plan and any Award under the Plan;
(b) select the Directors, officers, Employees and Consultants of the
Company and its Subsidiaries to whom Awards may be granted;
(c) determine the number of shares of Common Stock to be covered by
any Award;
(d) determine and modify from time to time the terms and conditions,
including restrictions, of any Award and to approve the form of
written instrument evidencing Awards;
(e) accelerate at any time the exercisability or vesting of all or
any portion of any Award and/or to include provisions in awards
providing for such acceleration;
(f) impose limitations on Awards, including limitations on transfer
and repurchase provisions;
(g) extend the exercise period within which Options may be exercised;
and
(h) determine at any time whether, to what extent, and under what
circumstances Common Stock and other amounts payable with respect
to an Award shall be deferred either automatically or at the
election of the Participant and whether and to what extent the
Company shall pay or credit amounts constituting interest (at
rates determined by the Plan Administrator) or dividends or
deemed dividends on such deferrals.
The determination of the Plan Administrator on any such matters shall be
conclusive.
5. Delegation of Authority to Grant Awards. The Plan Administrator, in
---------------------------------------
its discretion, may delegate to the Chief Executive Officer of the Company all
or part of the Plan Administrator's authority and duties with respect to
granting Awards to individuals who are not subject to the reporting provisions
of Section 16 of the Act or "covered employees" within the meaning of Section
162(m) of the Code. The Plan Administrator may revoke or amend the terms of
such a delegation at any time, but such revocation shall not invalidate prior
actions of the Co-Chairmen that were consistent with the terms of the Plan.
-4-
<PAGE>
6. Eligibility.
-----------
(a) Directors, officers, Employees and Consultants of the Company or
its Subsidiaries who, in the opinion of the Plan Administrator, are mainly
responsible for the continued growth and development and future financial
success of the business shall be eligible to participate in the Plan.
(b) The Plan shall not confer upon any Participant any right with
respect to continuation of employment or consulting relationship with the
Company, nor shall it interfere in any way with his or her right or the
Company's right to terminate his or her employment or consulting relationship at
any time, with or without cause.
7. Stock Options.
-------------
(a) Options granted pursuant to the Plan may be either Options which
are Incentive Stock Options or Nonstatutory Stock Options. Incentive Stock
Options and Nonstatutory Stock Options shall be granted separately hereunder.
The Plan Administrator, shall determine whether and to what extent Options shall
be granted under the Plan and whether such Options granted shall be Incentive
Stock Options or Nonstatutory Stock Options; provided, however, that: (i)
-------- -------
Incentive Stock Options may be granted only to Employees of the Company or any
Subsidiary; and (ii) no Incentive Stock Option may be granted following the
tenth (10th) anniversary of the effective date of the Plan. The provisions of
the Plan and any Option Agreement pursuant to which Incentive Stock Options
shall be issued shall be construed in a manner consistent with Section 422 of
the Code (or any successor provision) and rules and regulations promulgated
thereunder.
(b) To the extent that Options designated as Incentive Stock Options
(under all plans of the Company or any Parent or Subsidiary) become exercisable
by a Participant for the first time during any calendar year for Common Stock
having a Fair Market Value greater than One Hundred Thousand Dollars ($100,000),
the portion of such Options which exceeds such amount shall be treated as
Nonstatutory Stock Options. For purposes of this Section 7, Options designated
as Incentive Stock Options shall be taken into account in the order in which
they were granted, and the Fair Market Value of Common Stock shall be determined
as of the time the Option with respect to such Common Stock is granted. If the
Code is amended to provide for a different limitation from that set forth in
this Section 7, such different limitation shall be deemed incorporated herein
effective as of the amendment date and with respect to such Options as required
or permitted by such amendment to the Code. If an Option is treated as an
Incentive Stock Option in part and as a Nonstatutory Stock Option in part by
reason of the limitation set forth in this Section 7, the Participant may
designate which portion of such Option the participant is exercising. In the
absence of such designation, the Participant shall be deemed to have exercised
the Incentive Stock Option portion of the Option first. Separate certificates
representing each such portion shall be issued upon the exercise of the Option.
-5-
<PAGE>
8. Term of Plan. The Plan shall become effective on December 9, 1999,
------------
provided the Plan has been previously adopted by the Board and approved by the
shareholders of the Company as described in Section 22 of the Plan. The Plan
shall remain in effect until terminated under Section 18 of the Plan.
9. Term of Options. The term of each Option shall be the term stated in
---------------
the Option Agreement; provided, however, that in the case of an Incentive Stock
-------- -------
Option, the term shall be no more than ten (10) years from the date of grant
thereof or such shorter term as may be provided in the Option Agreement.
However, in the case of an Option granted to an Optionee who, at the time the
Option is granted, owns stock representing more than ten percent (10%) of the
voting power of all classes of stock of the Company or any Parent or Subsidiary,
the term of the Option shall be five (5) years from the date of grant thereof or
such shorter term as may be provided in the Option Agreement.
10. Option Exercise Price and Consideration.
---------------------------------------
(a) The per share exercise price for the Shares to be issued pursuant
to exercise of an Option shall be such price as is determined by the Board, but
shall be subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time of the grant of
such Incentive Stock Option, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the per Share exercise price shall be no less than
one hundred ten percent (110%) of the Fair Market Value per Share on the
date of grant.
(B) granted to any Employee, the per Share exercise price
shall be no less than one hundred percent (100%) of the Fair Market Value
per Share on the date of grant.
(ii) In the case of a Nonstatutory Stock Option granted to any
person, the per Share exercise price shall be no less than eighty-five
percent (85%) of the Fair Market Value per Share on the date of grant.
(b) The Option exercise price of each share purchased pursuant to an
Option shall be paid in full at the time of each exercise of the Option: (i) in
cash; (ii) by check; (iii) by cash equivalent; (iv) by delivering to the Company
a notice of exercise with an irrevocable direction to a broker-dealer registered
under the Exchange Act to sell a sufficient portion of the shares and deliver
the sale proceeds directly to the Company to pay the exercise price; (v) in the
discretion of the Plan Administrator, through the delivery to the Company of
previously-owned shares of Common Stock having an aggregate Fair Market Value
equal to the Option exercise price of the shares being purchased pursuant to the
exercise of the Option; provided, however,
-------- -------
-6-
<PAGE>
that shares of Common Stock delivered in payment of the exercise price must have
been held by the Participant for at least six (6) months in order to be utilized
to pay the exercise price; or (vi) in the discretion of the Plan Administrator,
through any combination of the foregoing methods of payment.
11. Exercise of Option.
------------------
(a) Procedure for Exercise; Rights as a Shareholder. Any Option
-----------------------------------------------
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Plan Administrator, including performance criteria with
respect to the Company and/or the Optionee, and as shall be permissible under
the terms of the Plan.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company through a method of payment allowable under Section 10(b) of the Plan.
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such stock certificate promptly upon exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 15 of the Plan.
(b) Termination of Employment. Except as set forth below, in the
-------------------------
event of termination of an Optionee's consulting relationship or Continuous
Status as an Employee with the Company (as the case may be), such Optionee may,
but only within ninety (90) days (or such other period of time as is determined
by the Board, with such determination in the case of an Incentive Stock Option
being made at the time of grant of the Option and not exceeding ninety (90)
days) after the date of such termination (but in no event later than the
expiration date of the term of such Option as set forth in the Option
Agreement), exercise his or her Option to the extent that Optionee was entitled
to exercise it at the date of such termination. To the extent that Optionee was
not entitled to exercise the Option at the date of such termination, or if
Optionee does not exercise such Option to the extent so entitled within the time
specified herein, the Option shall terminate.
(c) Disability of Optionee. Notwithstanding the provisions of Section
----------------------
11(b) above, in the event of termination of an Optionee's consulting
relationship or Continuous Status as an Employee as a result of his or her total
and permanent disability (as defined in Section 22(e)(3) of the Code), Optionee
may, but only within twelve (12) months from the date of such termination (but
in no event later than the expiration date of the term of such Option as set
forth in the Option Agreement), exercise the Option to the extent the Optionee
was otherwise entitled
-7-
<PAGE>
to exercise it at the date of such termination. To the extent that Optionee was
not entitled to exercise the Option at the date of termination, or if Optionee
does not exercise such Option to the extent so entitled within the time
specified herein, the Option shall terminate.
(d) Death of Optionee.
-----------------
(i) In the event of the death of an Optionee during the term of
Optionee's consulting relationship or Continuous Status as an Employee with the
Company (as the case may be), the Option may be exercised, at any time within
twelve (12) months following the date of death (but in no event later than the
expiration date of the term of such Option as set forth in the Option
Agreement), by the Optionee's estate or by a person who acquired the right to
exercise the Option by bequest or inheritance, but only to the extent the
Optionee was entitled to exercise the Option at the date of death. To the
extent that Optionee was not entitled to exercise the Option at the date of
death, or if the Option is not exercised by the Optionee's estate or by a person
who acquired the right to exercise the Option by bequest or inheritance to the
extent so entitled within the time specified herein, the Option shall terminate.
(ii) In the event of the death of an Optionee within thirty (30)
days after the termination of Optionee's consulting relationship or Continuous
Status as an Employee with the Company (as the case may be) pursuant to Section
11(b) above, the Option may be exercised, at any time within six (6) months
following the date of death (but in no event later than the expiration date of
the term of such Option as set forth in the Option Agreement), by the Optionee's
estate or by a person who acquired the right to exercise the Option by bequest
or inheritance, but only to the extent the Optionee was entitled to exercise the
Option at the date of death. To the extent that Optionee was not entitled to
exercise the Option at the date of death, or if the Option is not exercised by
the Optionee's estate or by a person who acquired the right to exercise the
Option by bequest or inheritance to the extent so entitled within the time
specified herein, the Option shall terminate.
(e) Termination for Cause or Post-Termination Relationship with
-----------------------------------------------------------
Competing Business. Notwithstanding the provisions of Section 11(b) above, in
- ------------------
the event of "Termination for Cause" of an Optionee's consulting relationship or
Continuous Status as an Employee with the Company (as the case may be) or in the
event that such Optionee within the option term becomes an employee or
consultant of a Competing Business (as defined herein), any Option held by the
Optionee, whether vested or unvested, shall forthwith terminate. In addition to
the immediate forfeiture of all Options upon the occurrence of the events
specified in the preceding sentence, Optionee shall automatically forfeit all
shares underlying any exercised portion of an Option for which the Company has
not yet delivered the share certificates, upon refund by the Company of the
exercise price paid by the Optionee for such Shares. For purposes of this Plan,
the term "Competing Business" shall mean any person, corporation or other entity
engaged in the business of: (i) providing strategic Internet consulting
services, interactive Internet solutions, application management services and
management consulting services; or (ii) selling or attempting to sell any
product or service which is the same as or similar to products or services
-8-
<PAGE>
sold by the Company within the last year prior to termination of such
Participant's employment, consulting relationship or Director status, as the
case may be, hereunder.
12. Restricted Stock Awards.
-----------------------
(a) The Plan Administrator may grant Restricted Stock Awards to any
officer, Employee or Consultant of the Company and its Subsidiaries. A
Restricted Stock Award entitles the recipient to acquire shares of Common Stock
subject to such restrictions and conditions as the Plan Administrator may
determine at the time of grant. Conditions may be based on continuing
employment (or other business relationship) and/or achievement of pre-
established performance goals and objectives.
(b) Upon execution of a written instrument setting forth the
Restricted Stock Award and paying any applicable purchase price, a Participant
shall have the rights of a shareholder with respect to the Common Stock subject
to the Restricted Stock Award, including, but not limited to, the right to vote
and receive dividends with respect thereto; provided, however, that shares of
-------- -------
Common Stock subject to Restricted Stock Awards that have not vested shall be
subject to the restrictions on transferability described in Section 12(d) below.
Unless the Plan Administrator shall otherwise determine, certificates evidencing
the Restricted Stock shall remain in the possession of the Company until such
Restricted Stock is vested as provided in Section 12(c) below.
(c) The Plan Administrator at the time of grant shall specify the date
or dates and/or the attainment of pre-established performance goals, objectives
and other conditions on which Restricted Stock shall become vested, subject to
such further rights of the Company or its assigns as may be specified in the
instrument evidencing the Restricted Stock Award. If the grantee or the
Company, as the case may be, fails to achieve the designated goals or the
grantee's relationship with the Company is terminated prior to the expiration of
the vesting period, the grantee shall forfeit all shares of Common Stock subject
to the Restricted Stock Award which have not then vested.
(d) Unvested Restricted Stock may not be sold, assigned transferred,
pledged or otherwise encumbered or disposed of except as specifically provided
herein or in the written instrument evidencing the Restricted Stock Award.
13. Stock Awards. The Plan Administrator may, in its sole discretion,
------------
grant (or sell at a purchase price determined by the Plan Administrator) a Stock
Award to any officer, Employee or Consultant of the Company or its Subsidiaries,
pursuant to which such individual may receive shares of Common Stock free of any
vesting restrictions (a "Stock Award") under the Plan. Stock Awards may be
granted or sold as described in the preceding sentence in respect of past
services or other valid consideration, or in lieu of any cash compensation due
to such individual.
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<PAGE>
14. Withholding Tax Obligations.
---------------------------
(a) Whenever Shares are to be issued under the Plan, the Company shall
have the right to require the Participant to remit to the Company an amount
sufficient to satisfy applicable federal, state and local tax withholding
requirements prior to the delivery of any certificate for Shares; provided,
--------
however, that in the case of a Participant who receives an Award of Shares under
- -------
the Plan which is not fully vested, the Participant shall remit such amount on
the first business day following the Tax Date. The "Tax Date" for purposes of
this Section 14 shall be the date on which the amount of tax to be withheld is
determined. If a Participant makes a disposition of shares acquired upon the
exercise of an Incentive Stock Option within either two (2) years after the
Option was granted or one (1) year after its exercise by the Participant, the
Participant shall promptly notify the Company and the Company shall have the
right to require the Participant to pay to the Company an amount sufficient to
satisfy federal, state and local tax withholding requirements.
(b) A Participant who is obligated to pay the Company an amount
required to be withheld under applicable tax withholding requirements may pay
such amount: (i) in cash; (ii) in the discretion of the Plan Administrator,
through the delivery to the Company of previously-owned shares of Common Stock
having an aggregate Fair Market Value on the Tax Date equal to the tax
obligation, provided that the previously owned shares delivered in satisfaction
of the withholding obligations must have been held by the Participant for at
least six (6) months; or (iii) in the discretion of the Plan Administrator,
through a combination of the procedures set forth in subsections (i) and (ii) of
this Section 14(b).
(c) A Participant who is obligated to pay to the Company an amount
required to be withheld under applicable tax withholding requirements in
connection with either the exercise of a Nonstatutory Stock Option, the receipt
of a Restricted Stock Award or Stock Award under the Plan may, in the discretion
of the Plan Administrator, elect to satisfy this withholding obligation, in
whole or in part, by requesting that the Company withhold shares of stock
otherwise issued to the Participant having a Fair Market Value on the Tax Date
equal to the amount of the tax required to be withheld; provided, however, that
-------- -------
shares may be withheld by the Company only if such withheld shares have vested.
Any fractional amount shall be paid to the Company by the Participant in cash or
shall be withheld from the Participant's next regular paycheck.
(d) An election by a Participant to have shares of stock withheld to
satisfy federal, state and local tax withholding requirements pursuant to
Section 14(c) must be in writing and delivered to the Company prior to the Tax
Date.
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<PAGE>
15. Adjustment of Number and Price of Shares.
----------------------------------------
Any other provision of the Plan notwithstanding:
(a) If, through or as a result of any merger, consolidation, sale of
all or substantially all of the assets of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other similar transaction, the outstanding shares of Common Stock are
increased or decreased or are exchanged for a different number or kind of shares
or other securities of the Company, or additional shares or new or different
shares or other securities of the Company or other non-cash assets are
distributed with respect to such shares of Common Stock or other securities, the
Plan Administrator shall make an appropriate or proportionate adjustment in: (i)
the number of Options that can be granted to any one individual Participant;
(ii) the number and kind of shares or other securities subject to any then
outstanding Awards under the Plan; (iii) the price for each share subject to any
then outstanding Options under the Plan, without changing the aggregate exercise
price (i.e., the exercise price multiplied by the number of shares) as to which
such Options remain exercisable; and (iv) the maximum number of shares that may
be issued under the Plan, the maximum number of shares that are available for
the award of Incentive Stock Options and the maximum number of shares that may
be granted to any one individual Participant during any one (1) calendar year
period, each as set forth in Section 3 hereof. The adjustment by the Plan
Administrator shall be final, binding and conclusive.
(b) In the event that, by reason of a corporate merger, consolidation,
acquisition of property or stock, separation, reorganization or liquidation, the
Board shall authorize the issuance or assumption of an Option or Options in a
transaction to which Section 424(a) of the Code applies, then, notwithstanding
any other provision of the Plan, the Plan Administrator may grant an Option or
Options upon such terms and conditions as it may deem appropriate for the
purpose of assumption of the old Option, or substitution of a new Option for the
old Option, in conformity with the provisions of Code Section 424(a) and the
rules and regulations thereunder, as they may be amended from time to time.
(c) No adjustment or substitution provided for in this Section 15
shall require the Company to issue or to sell a fractional share under any
Option Agreement or share award agreement and the total adjustment or
substitution with respect to each Option and share award agreement shall be
limited accordingly.
(d) In the case of the dissolution or liquidation of the Company, the
Plan and all Awards granted hereunder shall terminate. In the event of such
proposed termination, each Participant shall be notified of such termination and
shall be permitted to exercise for a period of at least fifteen (15) days prior
to the date of such termination all Options held by such Participant which are
then exercisable.
(e) In the case of: (i) a merger, reorganization or consolidation in
which the Company is acquired by another person or entity (other than a holding
company formed by the
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<PAGE>
Company); (ii) the sale of all or substantially all of the assets of the Company
to an unrelated person or entity which is not an "affiliate" (as defined in Rule
144 of the Securities Act of 1933) of the Company; or (iii) the sale of all of
the capital stock of the Company to an unrelated person or entity which is not
an "affiliate" (in each case, a "Fundamental Transaction"), all Options shall be
assumed or equivalent options shall be substituted by such successor corporation
or a parent or subsidiary of such successor corporation. For the purposes of
this paragraph, the Options shall be considered assumed if, following the
Fundamental Transaction, the Options confer the right to purchase, for each
Share of stock subject to the Options immediately prior to the Fundamental
Transaction, the consideration (whether stock, cash, or other securities or
property) received in the Fundamental Transaction by holders of Common Stock for
each Share held on the effective date of the Fundamental Transaction (and if
holders were offered a choice of consideration, the type of consideration chosen
by the holders of a majority of the outstanding Shares); provided, however, that
-------- -------
if such consideration received in the Fundamental Transaction was not solely
common stock of the successor corporation or its Parent, the Board may, with the
consent of the successor corporation and the Participant, provide for the
consideration to be received upon the exercise of the Options, for each Share of
stock subject to the Options, to be solely common stock of the successor
corporation or its Parent equal in Fair Market Value to the per share
consideration received by holders of Common Stock in the Fundamental
Transaction.
In the event that such successor corporation does not agree to assume
the Options or to substitute equivalent options, the Board shall provide for
each Optionee to have the right to exercise all Options then held by such
Optionee, including Options which would not otherwise be exercisable. In such
event, the Board shall notify each Optionee that such Options shall be fully
exercisable for a period of fifteen (15) days from the date of receipt of such
notice, and that such Options will terminate upon the expiration of such period.
Notwithstanding anything in the Plan to the contrary, the acceleration
of exercisability in this Section shall not occur in the event that such
acceleration would, in the opinion of the Company's independent auditors, make
the Fundamental Transaction ineligible for pooling of interests accounting
treatment and the Company intends to use such treatment with respect to such
transaction. The Board shall obtain a written statement from the Company's
independent auditors with respect to the effect of accelerated exercisability of
outstanding Options prior to providing any Optionee with the notice contemplated
by this Section.
(f) In the event that the Company shall be merged or consolidated with
another corporation or entity, other than with a corporation or entity which is
an "affiliate" of the Company, under the terms of which holders of capital stock
of the Company will receive upon consummation thereof a cash payment for each
share of capital stock of the Company surrendered pursuant to such transaction
(the "Cash Purchase Price"), the Board may provide that all outstanding options
shall terminate upon consummation of such transaction and each optionee shall
receive, in exchange therefor, a cash payment equal to the amount (if any) by
which (i) the Cash Purchase Price multiplied by the number of shares of Capital
Stock of the Company subject to outstanding options held by such optionee
exceeds (ii) the aggregate exercise price of such options.
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<PAGE>
16. Nontransferability. A Participant's rights under the Plan, including
------------------
the right to any shares or amounts payable may not be assigned, pledged, or
otherwise transferred except, in the event of a Participant's death, to the
Participant's designated beneficiary or, in the absence of such a designation,
by will or by the laws of descent and distribution; provided, however, that the
-------- -------
Plan Administrator may, in its discretion, at the time of grant of a
Nonstatutory Stock Option or by amendment of an Option Agreement for an
Incentive Stock Option or a Nonstatutory Stock Option, provide that Options
granted to or held by a Participant may be transferred, in whole or in part, to
one or more transferees and exercised by any such transferee, provided further
that: (i) any such transfer must be without consideration; (ii) each transferee
must be a member of such Participant's "immediate family" (as defined below) or
a trust, family limited partnership or other estate planning vehicle established
for the exclusive benefit of one or more members of the Participant's immediate
family; and (iii) such transfer is specifically approved by the Plan
Administrator following the receipt of a written request for approval of the
transfer; and provided further that any Incentive Stock Option which is amended
to permit transfers during the lifetime of the Participant shall, upon the
effectiveness of such amendment, be treated thereafter as a Nonstatutory Stock
Option. In the event an Option is transferred as contemplated in this Section,
such transfer shall become effective when approved by the Plan Administrator and
such Option may not be subsequently transferred by the transferee other than by
will or the laws of descent and distribution. Any transferred Option shall
continue to be governed by and subject to the terms and conditions of this Plan
and the relevant Option Agreement, and the transferee shall be entitled to the
same rights as the Participant as if no transfer had taken place. As used in
this Section, "immediate family" shall mean, with respect to any person, any
spouse, child, stepchild or grandchild, and shall include relationships arising
from legal adoption.
17. Termination of Employment - Certain Forfeitures. Notwithstanding any
-----------------------------------------------
other provision of the Plan to the contrary, a Participant shall have no right
to exercise any Option or vest or receive payment of any Restricted Stock Award
or Stock Award if: (a) the Participant is Terminated for Cause; or (b) if
following the Participant's termination of employment and prior to the Company's
delivery of the shares of Common Stock underlying an Award, the Participant
becomes an officer or director of, a consultant to or employed by a Competing
Business. Furthermore, notwithstanding any other provision of the Plan to the
contrary, in the event that a Participant receives or is entitled to the
delivery or vesting of Common Stock pursuant to an Award during the twelve (12)
month period prior to the Participant's termination of employment with the
Company or during the twelve (12) months following the Participant's termination
of employment, the Company, in its sole discretion, may require the Participant
to return or forfeit the cash and/or Common Stock received with respect to such
award (or its economic value as of (i) the date of the exercise of Options; (ii)
the date immediately following the end of the Restricted Period for Restricted
Stock Awards; or (iii) the date of grant with respect to Stock Awards, as the
case may be) in the event that the Participant becomes an officer or director
of, a consultant to or employed by a Competing Business within eighteen (18)
months of such Participant's termination of employment with the Company. The
Company's right to require forfeiture under this Section 17 must be exercised
within ninety (90) days after the discovery of an occurrence triggering the Plan
Administrator's right to require forfeiture but in no event later
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<PAGE>
than twenty-four (24) months after the Participant's termination of employment
with the Company.
18. Amendment and Termination of the Plan.
-------------------------------------
(a) Amendment and Termination. The Board may at any time amend,
-------------------------
alter, suspend or discontinue the Plan, but no amendment, alteration, suspension
or discontinuation shall be made which would impair the rights of any Optionee
under any grant theretofore made, without his or her consent. In addition, to
the extent necessary and desirable to comply with Rule 16b-3 under the Exchange
Act or with Section 422 of the Code (or any other applicable law or regulation,
including the requirements of the NASD or an established stock exchange), the
Company shall obtain shareholder approval of any Plan amendment in such a manner
and to such a degree as required.
(b) Effect of Amendment or Termination. Any such amendment or
----------------------------------
termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Optionee and
the Board, which agreement must be in writing and signed by the Optionee and the
Company.
19. Conditions Upon Issuance of Shares. Shares shall not be issued
----------------------------------
pursuant to any Award under the Plan unless the issuance and delivery of such
Shares pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange upon which the Shares may then be listed, and
shall be further subject to the approval of counsel for the Company with respect
to such compliance.
As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned relevant provisions of law.
20. Reservation of Shares. The Company, during the term of this Plan,
---------------------
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
The inability of the Company to obtain authority from any regulatory
body having jurisdiction, which authority is deemed by the Company's counsel to
be necessary to the lawful issuance and sale of any Shares hereunder, shall
relieve the Company of any liability in respect of the failure to issue or sell
such Shares as to which such requisite authority shall not have been obtained.
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<PAGE>
21. Agreements. Options and Restricted Stock Awards shall be evidenced by
----------
written agreements in such form as the Board shall approve from time to time.
22. Shareholder Approval. Continuance of the Plan shall be subject to
--------------------
approval by the shareholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such shareholder approval shall be obtained
in the degree and manner required under applicable state and federal law.
23. Information to Optionees. The Company shall provide to each Optionee,
------------------------
during the period for which such Optionee has one or more Options outstanding,
copies of all annual reports and other information which are provided to all
shareholders of the Company. The Company shall not be required to provide such
information if the issuance of Options under the Plan is limited to key
employees whose duties in connection with the Company assure their access to
equivalent information.
* * * * *
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<PAGE>
EXHIBIT 10.13
GOAMERICA, INC.
EMPLOYEE STOCK PURCHASE PLAN
I. DEFINITIONS
---------------
Account means the Employee Stock Purchase Plan Account established for a
-------
Participant under Section IX hereunder.
Board of Directors shall mean the Board of Directors of the Company.
------------------
Code shall mean the Internal Revenue Code of 1986, as amended.
----
Committee shall mean the Compensation Committee of the Board of Directors.
---------
Common Stock shall mean shares of the Company's Common Stock, par value
------------
$.01 per share, and any security into which such stock shall be converted or
shall become by reason of changes in its nature such as by way of
recapitalization, reclassification, changes in par value, merger, consolidation
or similar transaction.
Company shall mean GoAmerica, Inc., a Delaware corporation. When used in
-------
the Plan with reference to employment, Company shall include Subsidiaries.
Compensation shall mean the total cash compensation paid to an Eligible
------------
Employee by the Company, as reportable on IRS Form W-2. Notwithstanding the
foregoing, Compensation shall exclude severance pay, stay-on bonuses, long term
bonuses, retirement income, change-in-control payments, contingent payments,
income derived from stock options, stock appreciation rights and other equity-
based compensation and other forms of special remuneration.
Effective Date shall mean the date of effectiveness of the Company's
--------------
Registration Statement relating to the initial public offering of the Company's
Common Stock.
Eligible Employees shall mean only those persons who, as of the first day
------------------
of a Purchase Period, are Employees of the Company and who are not, as of the
day preceding the first day of the Purchase Period, deemed for purposes of
Section 423(b)(3) of the Code to own stock possessing 5% or more of the total
combined voting power or value of all classes of stock of the Company.
Employees shall mean all persons who are employed by the Company as common-
---------
law employees, excluding persons (i) whose customary employment is 20 hours or
less per week, or (ii) whose customary employment is for not more than five
months in a calendar year.
Exercise Date shall mean the last day of a Purchase Period.
-------------
<PAGE>
Fair Market Value shall mean: (i) as of the Effective Date the initial
-----------------
public offering price of the Company's Common Stock as approved by the Board of
Directors; or (ii) as of any date subsequent to the Effective Date, the last
reported sales price of the Common Stock on such date as reported by the Nasdaq
National Market or the principal national securities exchange on which such
stock is listed and traded, or in each such case where there is no trading on
such date, on the first previous date on which there is such trading.
Participant shall mean an Eligible Employee who elects to participate in
-----------
the Plan under Section VII hereunder.
Plan shall mean the GoAmerica, Inc. Employee Stock Purchase Plan, as set
----
forth herein and as amended from time to time.
Purchase Period shall mean: (a) for the initial purchase period, the period
---------------
commencing on the Effective Date and ending on December 31, 2000; and (b)
thereafter, purchase periods shall be annual, semi-annual or quarterly, in each
case as elected by the Committee not less than 60 days in advance of the
commencement of such period. A Purchase Period shall begin on the first
business day of, and end on the last business day of, each such calendar period.
In the absence of any such election, Purchase Periods subsequent to the first
period shall be for one calendar year. The last Purchase Period under the Plan
shall terminate on or before the date of termination of the Plan provided in
Section XXIV.
Subsidiary shall mean any corporation which is a subsidiary of the Company
----------
within the meaning of Section 424(f) of the Code.
Termination of Service shall mean the earliest of the following events with
----------------------
respect to a Participant: his retirement, death, quit, discharge or permanent
separation from service with the Company.
The masculine gender includes the feminine, the singular number includes
the plural and the plural number includes the singular unless the context
otherwise requires.
II. PURPOSE
------------
It is the purpose of this Plan to provide a means whereby Eligible
Employees may purchase Common Stock through payroll deductions. It is intended
to provide a further incentive for Employees to promote the best interests of
the Company and to encourage stock ownership by Employees in order to
participate in the Company's economic progress.
It is the intention of the Company to have the Plan qualify as an "employee
stock purchase plan" within the meaning of Section 423 of the Code and the
provisions of the Plan shall be construed in a manner consistent with the Code.
III. ADMINISTRATION
--------------------
The Plan shall be administered by the Committee. The Committee shall have
authority to make rules and regulations for the administration of the Plan, and
its interpretations and
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<PAGE>
decisions with regard thereto shall be final and conclusive. The Committee shall
have all necessary authority to communicate, from time to time, with Eligible
Employees and Participants for purposes of administering the Plan, and shall
notify Eligible Employees promptly of its election of the term of each
forthcoming Purchase Period, if other than a calendar year, and of its election
to utilize the Trust Administration Option referred to in Section IX.
IV. SHARES
-----------
There shall be 500,000 shares of Common Stock reserved for issuance to and
purchase by Participants under the Plan, subject to adjustment in accordance
with Section XXI hereof. The shares of Common Stock subject to the Plan shall
be either shares of authorized but unissued Common Stock or shares of Common
Stock reacquired by the Company. Shares of Common Stock covered by the
unexercised portion of any terminated option may again be subject to options
granted under the Plan.
V. PURCHASE PRICE
------------------
The purchase price per share of the shares of Common Stock sold to
Participants under this Plan for any Purchase Period shall be the lesser of (a)
85% of the Fair Market Value of a share of Common Stock on the first day of such
Purchase Period, or (b) 85% of the Fair Market Value of a share of Common Stock
on the Exercise Date of such Purchase Period.
VI. GRANT OF OPTION TO PURCHASE SHARES
---------------------------------------
Each Eligible Employee shall be granted an option effective on the first
day of each Purchase Period to purchase a number of full shares of Common Stock
(subject to adjustment as provided in Section XXI). No Eligible Employee shall
be permitted to purchase shares under this Plan (or under any other "employee
stock purchase plan" within the meaning of Section 423(b) of the Code, of the
Company ) with an aggregate Fair Market Value (as determined as of the first day
of the Purchase Period) in excess of $25,000 for any one calendar year within
the meaning of Section 423(b)(8) of the Code. For a given Purchase Period,
payroll deductions shall commence on the first day of the Purchase Period and
shall end on the related Exercise Date, unless sooner altered or terminated as
provided in the Plan.
Anything herein to the contrary notwithstanding, if, as of the first day of
a Purchase Period, any Eligible Employee entitled to purchase shares hereunder
would be deemed for the purposes of Section 423(b)(3) of the Code to own stock
(including any number of shares which such person would be entitled to purchase
hereunder) possessing 5% or more of the total combined voting power or value of
all classes of stock of the Company, the maximum number of shares which such
person shall be entitled to purchase pursuant to the Plan shall be reduced to
that number which when added to the number of shares of stock of the Company
which such person is so deemed to own (excluding any number of shares which such
person would be entitled to purchase hereunder), is one less than such 5%.
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<PAGE>
VII. ELECTION TO PARTICIPATE
-----------------------------
An Eligible Employee may elect to become a Participant in this Plan by
completing a "Stock Purchase Agreement" form prior to the first day of the
Purchase Period. In the Stock Purchase Agreement, the Eligible Employee shall
authorize regular payroll deductions from his Compensation subject to the
limitations in Section VIII below. Options granted to Eligible Employees who
fail to authorize payroll deductions will automatically lapse. If a
Participant's payroll deductions allow him to purchase fewer than the maximum
number of shares of Common Stock to which his option entitles him, the option
with respect to the shares which he does not purchase will lapse as of the last
day of the Purchase Period.
The execution and delivery of the Stock Purchase Agreement as between the
Participant and the Company shall be conditioned upon the compliance by the
Company at such time with Federal (and any applicable state) securities laws.
VIII. PAYROLL DEDUCTIONS
-------------------------
An Eligible Employee may authorize payroll deductions from his Compensation
for each payroll period of a specified percentage of such Compensation, not less
than 1.0% and not more than 15%, in multiples of 1.0%.
The amount of payroll deduction shall be established at the beginning of a
Purchase Period and may not be altered, except for complete discontinuance under
Section XI, XIII or XIV hereunder.
IX. EMPLOYEE STOCK PURCHASE ACCOUNT
AND TRUST ADMINISTRATION OPTION
-------------------------------
An Employee Stock Purchase Account will be established for each Participant
in the Plan. Payroll deductions made under Section VIII will be credited to the
individual Accounts. In the event the Committee determines with respect to any
Purchase Period, not to utilize the "Trust Administration Option" set forth in
the next paragraph, no interest or other earnings will be credited to a
Participant's Account.
With respect to any one or more Purchase Periods, the Committee may elect
to utilize, in addition to the separate accounting for payroll deductions
provided in the Plan, the option to administer the funding of the Accounts
through a trust established pursuant to a trust agreement between the Company
and an institution exercising fiduciary powers (the "Trust Administration
Option") as hereinafter set forth in this paragraph. The Company shall provide
for the funding of each Account on a regular basis during each Purchase Period
reflecting payroll deductions of Participants and shall cause such sums to be
deposited within 15 days following such deductions in a trust account at such
institution and upon such terms as are established by the Committee. The trust
account assets shall be invested in shares of a tax-exempt money-market
registered investment company designated in the trust agreement, which
designation shall not be changed during the Purchase Period. Assets deposited
in the aforesaid trust account shall be commingled,
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<PAGE>
but a separate accounting shall be kept for each Participant's interest therein.
Each Participant shall be credited with his allocable share of the earnings of
the trust account, which credits shall be reflected in each Participant's
Account balance hereunder. At all times, the funds in such trust account shall
be considered the property of the respective Participants, and no part of the
trust account assets may at any time revert to, or be subject to any lien or
claim of, the Company; provided, however, that such trust account assets may
-------- -------
be used only for the purchase of shares as provided in Section X hereof or for
withdrawal by or return to Participants (or their beneficiaries) as provided in
Sections XI, XIII or XXIV hereof.
X. PURCHASE OF SHARES
----------------------
If, as of any Exercise Date, there is credited to the Account of a
Participant an amount at least equal to the purchase price of one share of
Common Stock for the current Purchase Period, as determined in Section V, the
Participant shall buy and the Company shall sell at such price the largest
number of whole shares of Common Stock which can be purchased with the amount in
his Account.
Any balance remaining in a Participant's Account at the end of a Purchase
Period will be carried forward into the Participant's Account for the following
Purchase Period. In no event will the balance carried forward be equal to or
exceed the purchase price of one share of Common Stock as determined in Section
V above. Notwithstanding the foregoing provisions of this paragraph, if as of
any Exercise Date the provisions of Section XV are applicable to the Purchase
Period ending on such Exercise Date, and the Committee reduces the number of
shares which would otherwise be purchased by Participants on such Exercise Date,
the entire balance remaining credited to the Account of each Participant after
the purchase of the applicable number of shares of Common Stock on such Exercise
Date shall be refunded to each such Participant. Except with respect to a
Purchase Period for which the Trust Administration Option has been elected, no
refund of an Account balance made pursuant to the Plan shall include any amount
in respect of interest or other imputed earnings.
Anything herein to the contrary notwithstanding, no Participant may, in any
calendar year, purchase a number of shares of Common Stock under this Plan
which, together with all other shares of stock of the Company and its
Subsidiaries which he may be entitled to purchase in such year under all other
employee stock purchase plans of the Company and its Subsidiaries which meet the
requirements of Section 423(b) of the Code, have an aggregate Fair Market Value
(measured as of the first day of each applicable Purchase Period) in excess of
$25,000. The limitation described in the preceding sentence shall be applied in
a manner consistent with Section 423(b)(8) of the Code.
XI. WITHDRAWAL
---------------
A Participant may withdraw from the Plan at any time prior to the Exercise
Date of a Purchase Period by filing a notice of withdrawal. Upon a
Participant's withdrawal, the payroll deductions shall cease for the next
payroll period and the entire amount credited to his Account
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<PAGE>
shall be refunded to him. Any Participant who withdraws from the Plan may again
become a Participant hereunder at the start of the next Purchase Period in
accordance with Section VII.
XII. ISSUANCE OF STOCK CERTIFICATES
------------------------------------
The shares of Common Stock purchased by a Participant shall, for all
purposes, be deemed to have been issued and sold at the close of business on the
Exercise Date. Prior to that date, none of the rights or privileges of a
stockholder of the Company shall exist with respect to such shares. Stock
certificates shall be registered either in the Participant's name or jointly in
the names of the Participant and his spouse, as the Participant shall designate
in his Stock Purchase Agreement. Such designation may be changed at any time by
filing notice thereof. Certificates representing shares of purchased Common
Stock shall be delivered promptly to the Participant following issuance.
XIII. TERMINATION OF SERVICE
-----------------------------
(a) Upon a Participant's Termination of Service for any reason other than
death or voluntary termination of employment on or after attaining age 55
("Retirement"), no payroll deduction may be made from any Compensation due him
as of the date of his Termination of Service and the entire balance credited to
his Account shall be automatically refunded to him.
(b) Upon a Participant's Retirement, no payroll deduction shall be made
from any Compensation due him as of the date of his retirement. Such a
Participant may, prior to Retirement, elect:
(1) to have the entire amount credited to his Account as of the date
of his Retirement refunded to him, or
(2) to have the entire amount credited to his Account held therein and
utilized to purchase shares on the Exercise Date as provided in Section X
and in accordance with all applicable requirements of the Code relating to
the Plan.
(c) Upon the death of a Participant, no payroll deduction shall be made
from any Compensation due him at time of death, and the entire balance in the
deceased Participant's Account shall be paid to the Participant's designated
beneficiary, or otherwise to his estate.
XIV. TEMPORARY LAYOFF, AUTHORIZED LEAVE
OF ABSENCE, DISABILITY
----------------------
Payroll deductions shall cease during a period of absence without pay from
work due to a Participant's temporary layoff, authorized leave of absence,
disability or for any other reason. If such Participant shall return to active
service prior to the Exercise Date for the current Purchase Period, payroll
deductions shall be resumed in accordance with his prior authorization.
If the Participant shall not return to active service prior to the Exercise
Date for the current Purchase Period, the balance of his Stock Purchase Account
will be used to purchase
-6-
<PAGE>
shares on the Exercise Date as provided in Section X and in accordance with all
applicable requirements of the Code relating to the Plan, unless the Participant
elects to withdraw from the Plan in accordance with Section XI.
XV. PROCEDURE IF INSUFFICIENT SHARES AVAILABLE
-----------------------------------------------
In the event that on any Exercise Date the aggregate funds available for
the purchase of shares of Common Stock pursuant to Section X hereof would result
in purchases of shares in excess of the number of shares of Common Stock then
available for purchase under the Plan, the Committee shall proportionately
reduce the number of shares which would otherwise be purchased by each
Participant on the Exercise Date in order to eliminate such excess, and the
provisions of the second paragraph of Section X shall apply.
XVI. RIGHTS NOT TRANSFERABLE
-----------------------------
The right to purchase shares of Common Stock under this Plan is exercisable
only by the Participant during his lifetime and is not transferable by him. If
a Participant attempts to transfer his right to purchase shares under the Plan,
he shall be deemed to have requested withdrawal from the Plan and the provisions
of Section XI hereof shall apply with respect to such Participant.
XVII. NO OBLIGATION TO EXERCISE OPTION
---------------------------------------
Granting of an option under this Plan shall impose no obligation on an
Eligible Employee to exercise such option.
XVIII. NO GUARANTEE OF CONTINUED EMPLOYMENT
--------------------------------------------
Granting of an option under this Plan shall imply no right of continued
employment with the Company for any Eligible Employee.
XIX. NOTICE
------------
Any notice which an Eligible Employee or Participant files pursuant to this
Plan shall be in writing and shall be delivered personally or by mail addressed
to the Compensation Committee, c/o Chief Financial Officer at GoAmerica, Inc.,
401 Hackensack Avenue, Hackensack, New Jersey 07666 or such other person or
location as may be specified by the Committee.
XX. REPURCHASE OF STOCK
------------------------
The Company shall not be required to repurchase from any Participant shares
of Common Stock acquired under this Plan.
-7-
<PAGE>
XXI. ADJUSTMENT FOR RECAPITALIZATION, MERGER, ETC.
---------------------------------------------------
The aggregate number of shares of Common Stock which may be purchased
pursuant to options granted hereunder, the number of shares of Common Stock
covered by each outstanding option, and the purchase price thereof for each such
option shall be appropriately adjusted for any increase or decrease in the
number of outstanding shares of Common Stock resulting from a stock split or
other subdivision or consolidation of shares of Common Stock or for other
capital adjustments or payments of stock dividends or distributions or other
increases or decreases in the outstanding shares of Common Stock affected
without receipt of consideration of the Company.
Subject to any required action by the stockholders, if the Company shall be
the surviving corporation in any merger, reorganization or other business
combination, any option granted hereunder shall cover the securities or other
property to which a holder of the number of shares of Common Stock would have
been entitled pursuant to the terms of the merger. A dissolution or liquidation
of the Company or a merger or consolidation in which the Company is not the
surviving entity shall cause every option outstanding hereunder to terminate.
The foregoing adjustments and the manner of application of the foregoing
provisions shall be determined by the Committee in its sole discretion. Any
such adjustment shall provide for the elimination of any fractional share which
might otherwise become subject to an option.
XXII. AMENDMENT OF THE PLAN
----------------------------
The Board of Directors may, without the consent of the Participants, amend
the Plan at any time, provided that no such action shall adversely affect
options theretofore granted hereunder, and provided that no such action by the
Board of Directors, without approval of the Company's stockholders, may:
(a) increase the total number of shares of Common Stock which may be
purchased by all Participants, except as contemplated in Section XXI;
(b) change the class of Employees eligible to receive options under the
Plan;
(c) decrease the minimum purchase price under Section V;
(d) extend a Purchase Period hereunder; or
(e) extend the term of the Plan.
XXIII. INTERNATIONAL PARTICIPANTS
----------------------------------
With respect to Eligible Employees who reside or work outside the United
States of America, the Committee may, in its sole discretion, amend the terms of
the Plan with respect to such Eligible Employees in order to conform such terms
with the requirements of local law.
-8-
<PAGE>
XXIV. TERM OF THE PLAN
-----------------------
This Plan shall become effective as of the Effective Date upon its adoption
by the Board of Directors, provided that it is approved at a duly-held meeting
of stockholders of the Company, by an affirmative majority of the total votes
present and voting thereat, within 12 months after the earlier of the Effective
Date or the date of adoption by the Board of Directors. If the Plan is not so
approved, no Common Stock shall be purchased under the Plan and the balance of
each Participant's Account shall be promptly returned to the Participant. The
Plan shall continue in effect through the December 31st following the fourth
anniversary of the Effective Date, unless terminated prior thereto pursuant to
the next succeeding sentence. The Board of Directors shall have the right to
terminate the Plan at any time, effective as of the next succeeding Exercise
Date. In the event of the expiration of the Plan or its termination,
outstanding options shall not be affected, except to the extent provided in
Section XV and any remaining balance credited to the Account of each Participant
as of the applicable Exercise Date shall be refunded to each such Participant.
-9-
<PAGE>
EXHIBIT 10.14
LEASE AGREEMENT
BY AND BETWEEN
RREEF USA FUND-I, A California Group Trust, Lessor
- AND -
GO AMERICA INC., Lessee
DATED: August 7, 1996
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
BASIC LEASE PROVISIONS AND DEFINITIONS.......................................................................... 1
1. DESCRIPTION............................................................................................ 3
2. TERM................................................................................................... 3
3. BASIC RENT............................................................................................. 3
4. USE AND OCCUPANCY...................................................................................... 3
5. CARE AND REPAIR OF PREMISES/ENVIRONMENTAL.............................................................. 3
6. ALTERATIONS, ADDITIONS OR IMPROVEMENTS................................................................. 6
7. ACTIVITIES INCREASING FIRE INSURANCE RATES............................................................. 6
8. ASSIGNMENT AND SUBLEASE................................................................................ 6
9. COMPLIANCE WITH RULES AND REGULATIONS.................................................................. 9
10. DAMAGES TO BUILDING.................................................................................... 9
11. WAIVER OF SUBROGATION.................................................................................. 10
12. EMINENT DOMAIN......................................................................................... 10
13. INSOLVENCY OF LESSEE................................................................................... 11
14. LESSOR'S REMEDIES ON DEFAULT........................................................................... 11
15. DEFICIENCY............................................................................................. 11
16. SUBORDINATION OF LEASE................................................................................. 12
17. SECURITY DEPOSIT....................................................................................... 13
18. RIGHT TO CURE LESSEE'S BREACH.......................................................................... 13
19. LIENS.................................................................................................. 13
20. RIGHT TO INSPECT AND REPAIR............................................................................ 14
21. SERVICES TO BE PROVIDED BY LESSOR...................................................................... 14
22. AFTER-HOURS USE........................................................................................ 14
23. INTERRUPTION OF SERVICES OR USE........................................................................ 15
24. ELECTRICITY............................................................................................ 15
25. ADDITIONAL RENT........................................................................................ 18
(A) Operating Cost Escalation..................................................................... 18
(B) Fuel, Utilities and Electric Cost Escalation.................................................. 19
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
(C) Tax Escalation................................................................................ 19
(D) Lease Year.................................................................................... 20
(E) Payment....................................................................................... 20
(F) Books and Records............................................................................. 20
(G) Right of Review............................................................................... 21
(H) Occupancy Adjustment.......................................................................... 21
26. LESSEE'S ESTOPPEL...................................................................................... 21
27. HOLDOVER TENANCY....................................................................................... 22
28. RIGHT TO SHOW PREMISES................................................................................. 22
29. CONDITION OF PREMISES.................................................................................. 22
30. WAIVER OF TRIAL BY JURY................................................................................ 22
31. LATE CHARGE............................................................................................ 22
32. INSURANCE.............................................................................................. 23
(A) Lessee's Insurance............................................................................ 23
(B) Lessor's Insurance............................................................................ 25
(C) Waiver of Subrogation......................................................................... 25
33. NO OTHER REPRESENTATIONS............................................................................... 25
34. QUIET ENJOYMENT........................................................................................ 26
35. INDEMNITY.............................................................................................. 26
36. RULES OF CONSTRUCTION/APPLICABLE LAW................................................................... 26
37. APPLICABILITY TO HEIRS AND ASSIGNS..................................................................... 26
38. PARKING................................................................................................ 27
39. LESSOR'S EXCULPATION................................................................................... 27
40. COMMISSION............................................................................................. 28
41. RECORDATION............................................................................................ 28
42. NO OPTION.............................................................................................. 28
43. DEFINITIONS............................................................................................ 28
(A) Affiliate......................................................................................... 28
(B) Business Days and Building Hours.............................................................. 28
(C) Common Facilities............................................................................. 28
(D) Force Majeure................................................................................. 29
(E) Lessee's Percentage........................................................................... 29
44. LEASE COMMENCEMENT..................................................................................... 29
45. NOTICES................................................................................................ 30
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
46. ACCORD AND SATISFACTION................................................................................ 30
47. EFFECT OF WAIVERS...................................................................................... 30
48. LESSOR'S RESERVED RIGHT................................................................................ 30
49. ERISA REPRESENTATION................................................................................... 30
50. RELOCATION BY LESSEE................................................................................... 31
51. CORPORATE AUTHORITY.................................................................................... 31
52. NUMBER AND GENDER...................................................................................... 31
53. LESSEE RESTRICTION..................................................................................... 31
54. GOVERNMENT REQUIREMENTS................................................................................ 32
55. CONTINGENCY............................................................................................ 32
56. LIMITATION OF LESSOR'S LIABILITY....................................................................... 32
The following Exhibits attached to this Lease are incorporated herein
and made a part hereof:
Exhibit A Premises
Exhibit A-1 Parcel
Exhibit B Rules and Regulations
</TABLE>
iii
<PAGE>
LEASE, made the 7th day of August 1996, between RREEF USA FUND-I, A
California Group Trust, whose address is 401 Hackensack Avenue, Hackensack, New
Jersey 07601 (hereinafter called "Lessor"); and GO AMERICA INC., a New Jersey
corporation, whose address is 401 Hackensack Avenue, Hackensack, New Jersey
07601 (hereinafter called "Lessee").
REFERENCE PAGE
CONTINENTAL PLAZA
BASIC LEASE PROVISIONS AND DEFINITIONS
In addition to other terms elsewhere defined in this Lease, the
following terms whenever used in this Lease should have only the meanings set
forth in this Section, unless such meanings are expressly modified, limited or
expanded elsewhere herein.
(1) Additional Rent: All sums in addition to Term Fixed Basic Rent
payable by Lessee to Lessor pursuant to the provisions of this Lease.
(2) Base Period Costs: As to the following:
(A) Base Operating Costs: Those costs incurred for the
Building, Complex and Parcel during Calendar Year 1996.
(B) Base Real Estate Taxes: Those Real Estate Taxes
assessed against the Building, Complex and Parcel applicable to
Calendar Year 1996.
(C) Base Utility and Energy Costs: Those costs determined by
multiplying the Base Utility Rate (as hereinafter defined) by the usage
incurred for the Building, Complex and Parcel during Calendar Year
1996.
(3) Base Utility Rate: The average rate in effect (including fuel
surcharges and/or adjustments) from July 1, 1995 through June 30, 1996.
(4) Brokers: Cushman & Wakefield of New Jersey, Inc. and CB Commercial
Real Estate Group, Inc.
(5) Building: 401 Hackensack Avenue, Hackensack, New Jersey.
(6) Commencement Date: September 1, 1996 and shall for purposes hereof
be subject to Sections 29 and 44 hereof.
(7) Demised Premises or Premises: Approximately 2,354 gross rentable
square feet on the third (3rd) floor as shown on Exhibit A hereto, which
includes an allocable share of the Common Facilities as defined in
Subsection 43(C).
1
<PAGE>
(8) Electric Rent Inclusion Factor: Two Thousand Three Hundred
Fifty-four and 00/100 ($2,354.00) Dollars per annum.
(9) Term Fixed Basic Rent: One Hundred Forty-eight Thousand Three
Hundred Two and 00/100 ($148,302.00) Dollars for the Term, payable as
follows:
<TABLE>
<CAPTION>
======================================== ===================================== =====================================
Annual Fixed Monthly Fixed
Year Basic Rent Basic Rent
- ---------------------------------------- ------------------------------------- -------------------------------------
<S> <C> <C> <C>
1 $47,080.00 $3,923.33
- ---------------------------------------- ------------------------------------- -------------------------------------
2 $49,434.00 $4,119.50
- ---------------------------------------- ------------------------------------- -------------------------------------
3 $51,788.00 $4,315.67
======================================== ===================================== =====================================
</TABLE>
all subject to further adjustment as in Subsection 24(B)(i) provided.
(10) Lessee's Percentage: .40(%) percent subject to adjustment as in
Subsection 43(E) provided.
(11) Parcel: Lot 5.A Block 512.A, Lot 1 Block 514 on the tax map of
the City of Hackensack; Lot 3 Block 98 on the tax map of the Borough of
River Edge.
(12) Parking Spaces: A total of nine (9) spaces, four (4) of which
shall be covered and five (5) of which shall be uncovered.
(13) Permitted Use: For general office use and nothing else.
(14) Security Deposit: Four Thousand One Hundred Nineteen and 50/100
($4,119.50) Dollars.
(15) Term: Three (3) years from the Commencement Date unless extended
pursuant to any option contained herein.
(16) Termination Date: The third (3rd) anniversary of the Commencement
Date.
2
<PAGE>
W I T N E S S E T H:
For and in consideration of the covenants herein contained, and upon
the terms and conditions herein set forth, Lessor and Lessee agree as follows:
1. DESCRIPTION. Lessor hereby leases to Lessee, and Lessee hereby hires
from Lessor, the Demised Premises as defined on the Reference Page (hereinafter
called "Demised Premises" or "Premises"), as shown on the plan or plans,
initialed by the parties hereto, marked Exhibit A attached hereto and made part
of this Lease in the Building as defined on the Reference Page (hereinafter
called the "Building") which is situated as part of that Complex of Buildings
known as 401, 407, 411 and 433 Hackensack Avenue, Hackensack, New Jersey, also
known as Continental Plaza (hereinafter called the "Complex"), all located on
that certain Parcel as defined on the Reference Page (hereinafter called the
"Parcel"), as described on Exhibit A-1, together with the right to use in common
with other lessees of the Building, their invitees, customers and employees,
those public areas of the Common Facilities as hereinafter defined.
2. TERM. The Premises are leased for the Term to commence on the
Commencement Date, and to end at 12:00 midnight on the Termination Date, all as
defined on the Reference Page.
3. BASIC RENT. The Lessee shall pay to the Lessor during the Term, the Term
Fixed Basic Rent as defined on the Reference Page (hereinafter called the "Term
Fixed Basic Rent"), payable in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts. The Term Fixed Basic Rent shall accrue at the Annual
Fixed Basic Rent as defined on the Reference Page and shall be payable in
advance on the first day of each calendar month during the Term in installments
of Monthly Fixed Basic Rent as defined on the Reference Page, except that a
proportionately lesser sum may be paid for the first and last months of the Term
of this Lease if the Term commences on a day other than the first day of the
month, in accordance with the provisions of this Lease herein set forth. Lessor
acknowledges receipt from Lessee of the first installment of Monthly Fixed Basic
Rent for the Term, by check, subject to collection. Lessee shall pay Fixed Basic
Rent and any Additional Rent as hereinafter provided, to Lessor at Lessor's
above stated address, or at such other place as Lessor may designate in writing,
without demand and without counterclaim, deduction or setoff. The aforesaid
Fixed Basic Rent shall be subject to adjustment as in Section 24 provided. As
used in this Lease, Fixed Basic Rent shall mean either Term Fixed Basic Rent,
Annual Fixed Basic Rent or Monthly Fixed Basic Rent, as appropriate.
4. USE AND OCCUPANCY. Lessee shall use and occupy the Premises for the
Permitted Use as defined on the Reference Page and for no other purpose.
3
<PAGE>
5. CARE AND REPAIR OF PREMISES/ENVIRONMENTAL. (A) Lessee covenants to
commit no act of waste and to take good care of the Premises and the fixtures
and appurtenances thereon, and shall, in the use and occupancy of the Premises,
comply with all present and future laws, orders and regulations of the Federal,
State and municipal governments or any of their departments affecting the
Premises and with any and all environmental requirements resulting from the
Lessee's use of the Premises; this covenant to survive the expiration or sooner
termination of the Lease. Lessor shall, at Lessee's expense, make all necessary
repairs to the Premises. Lessor shall make all necessary repairs to the Common
Facilities and to the parking areas, if any, the same to be included as an
Operating Cost pursuant to Section 25 herein, except where the repair has been
made necessary by misuse or neglect by Lessee or Lessee's agents, servants,
visitors or licensees, in which event Lessor shall nevertheless make the repair
but Lessee shall pay to Lessor, as Additional Rent, immediately upon demand, the
costs therefor. All improvements made by Lessee to the Premises, which are so
attached to the Premises that they cannot be removed without material injury to
the Premises, shall become the property of Lessor upon installation. Not later
than the last day of the Term, Lessee shall, at Lessee's expense, remove all
Lessee's personal property and those improvements made by Lessee which have not
become the property of Lessor, including trade fixtures, cabinetwork, movable
paneling, partitions and the like; repair all injury done by or in connection
with the installation or removal of said property and improvements; and
surrender the Premises in as good condition as they were at the beginning of the
Term, reasonable wear and damage by fire, the elements, casualty, or other cause
not due to the misuse or neglect by Lessee, Lessee's agents, servants, visitors
or licensees excepted. All other property of Lessee remaining on the Premises
after the last day of the Term of this Lease shall be conclusively deemed
abandoned and may be removed by Lessor, and Lessee shall reimburse Lessor for
the cost of such removal. Lessor may have any such property stored at Lessee's
risk and expense.
(B) Lessee acknowledges the existence of environmental laws,
rules and regulations, including but not limited to the provisions of ISRA, as
hereinafter defined. Lessee shall comply with any and all such laws, rules and
regulations. Lessee represents to Lessor that Lessee's Standard Industrial
Classification (SIC) Number as designated in the Standard Industrial
Classifications Manual prepared by the Office of Management and Budget in the
Executive Office of the President of the United States will not subject the
Demised Premises to ISRA applicability. Any change by Lessee to an operation
with an SIC Number subject to ISRA shall require Lessor's written consent. Any
such proposed change shall be sent in writing to Lessor sixty (60) days prior to
the proposed change. Lessor, at its sole option, may deny consent.
(C) Lessee hereby agrees to execute such documents as Lessor
reasonably deems necessary and to make such applications
4
<PAGE>
as Lessor reasonably requires to assure compliance with ISRA. Lessee shall bear
all costs and expenses incurred by Lessor associated with any required ISRA
compliance resulting from Lessee's use of the Demised Premises including but not
limited to State agency fees, engineering fees, clean-up costs, filing fees and
suretyship expenses. As used in this Lease, ISRA compliance shall include
applications for determinations of nonapplicability by the appropriate
governmental authority. The foregoing undertaking shall survive the termination
or sooner expiration of the Lease and surrender of the Demised Premises and
shall also survive sale, or lease or assignment of the Demised Premises by
Lessor. Lessee agrees to indemnify and hold Lessor harmless from any violation
of ISRA occasioned by Lessee's use of the Demised Premises. The Lessee shall
immediately provide the Lessor with copies of all correspondence, reports,
notices, orders, findings, declarations and other materials pertinent to the
Lessee's compliance and the requirements of the New Jersey Department of
Environmental Protection ("NJDEP") under ISRA as they are issued or received by
the Lessee.
(D) Lessee agrees not to generate, store, manufacture, refine,
transport, treat, dispose of, or otherwise permit to be present on or about the
Demised Premises, any Hazardous Substances. As used herein, Hazardous Substances
shall be defined as any "hazardous chemical," "hazardous substance" or similar
term as defined in the Comprehensive Environmental Responsibility Compensation
and Liability Act, as amended (42 U.S.C. 9601, et seq.), the New Jersey
Environmental Cleanup Responsibility Act, as amended, N.J.S.A. 13:1K-6 et seq.
and/or the Industrial Site Recovery Act ("ISRA"), the New Jersey Spill
Compensation and Control Act, as amended, N.J.S.A. 58:10-23.11b, et seq., any
rules or regulations promulgated thereunder, or in any other applicable Federal,
State or local law, rule or regulation dealing with environmental protection. It
is understood and agreed that the provisions contained in this Section shall be
applicable notwithstanding the fact that any substance shall not be deemed to be
a Hazardous Substance at the time of its use by the Lessee but shall thereafter
be deemed to be a Hazardous Substance.
(E) In the event Lessee fails to comply with ISRA as stated in
this Section or any other governmental law as of the termination or sooner
expiration of the Lease and as a consequence thereof Lessor is unable to rent
the Demised Premises, then the Lessor shall treat the Lessee as one who has not
removed at the end of its Term, and thereupon be entitled to all remedies
against the Lessee provided by law in that situation including a monthly rental
of two hundred (200%) percent of the installment of Monthly Fixed Basic Rent for
the last month of the Term of this Lease or any renewal term, payable in advance
on the first day of each month, until such time as Lessee provides Lessor with a
negative declaration or confirmation that any required clean-up plan has been
successfully completed.
(F) Lessee agrees that Lessee, its agents and contractors,
licensees, or invitees shall not handle, use,
5
<PAGE>
manufacture, store or dispose of any Hazardous Substances on, under, or about
the Premises, without Lessor's prior written consent (which consent may be given
or withheld in Lessor's sole discretion), provided that Lessee may handle,
store, use or dispose of products containing small quantities of Hazardous
Substances, which products are of a type customarily found in offices and
households (such as aerosol cans containing insecticides, toner for copies,
paints, paint remover, and the like), and provided further that Lessee shall
handle, store, use and dispose of any such Hazardous Substances in a safe and
lawful manner and shall not allow such Hazardous Substances to contaminate the
Premises or the environment.
(G) Without limiting the above, Lessee agrees to reimburse,
defend, indemnify and hold harmless the Lessor and each mortgagee of the Demised
Premises from and against any and all liabilities, damages, claims, losses,
judgments, causes of action, costs and expenses, including without limitation,
loss of rental income, loss due to business interruption, and the reasonable
fees and expenses of counsel which may be incurred by the Lessor or any such
mortgagee or threatened against the Lessor or such mortgagee, arising out of or
in any way connected with the use, manufacture, storage or disposal of Hazardous
Substances by Lessee, its agents or contractors on, under or about the Premises
including, without limitation, the costs of any required or necessary
investigation, repair, cleanup or detoxification, and the preparation of any
closure or other required plans in connection herewith, whether voluntary or
compelled by governmental authority, or any breach by Lessee of the undertakings
set forth in this Section. The indemnity obligations of Lessee under this clause
shall survive any termination or expiration of the Lease.
(H) Notwithstanding anything set forth in this Lease, Lessee
shall only be responsible for contamination of Hazardous Substances or any
cleanup resulting directly therefrom, resulting directly from matters occurring
or Hazardous Substances deposited (other than by contractors, agents or
representatives controlled by Lessor) during the Lease Term, and any other
period of time during which Lessee is in actual or constructive occupancy of the
Premises. Lessee shall take reasonable precautions to prevent the contamination
of the Premises with Hazardous Substances by third parties.
(I) It shall not be unreasonable for Lessor to withhold its
consent to any proposed assignment or sublease if (i) the proposed assignee's or
sublessee's anticipated use of the Premises involves the generation, storage,
use, treatment or disposal of Hazardous Substances; (ii) the proposed assignee
or sublessee has been required by any prior landlord, lender or governmental
authority to take remedial action in connection with Hazardous Substances
contaminating a property if the contamination resulted from such assignee's or
sublessee's actions or use of the property in question; or (iii) the proposed
assignee or sublessee is subject to an enforcement order issued by any
governmental authority in connection with the use, disposal,
6
<PAGE>
or storage of a Hazardous Substance.
(J) Notwithstanding anything contained herein to the contrary,
in the event ISRA compliance becomes necessary due to any action or inaction on
the part of Lessor, including by way of example but not limitation, a sale of
the Building, a change in ownership, initiation of bankruptcy proceedings, or
Lessor's financial reorganization, then Lessor shall be responsible for the
making of all necessary applications and payment of all application fees related
thereto.
6. ALTERATIONS, ADDITIONS OR IMPROVEMENTS. Lessee shall not, without first
obtaining the written consent of Lessor, make any alterations, additions or
improvements in, to or about the Premises.
7. ACTIVITIES INCREASING FIRE INSURANCE RATES. Lessee shall not do or
suffer anything to be done on the Premises which will increase the rate of fire
insurance on the Building.
8. ASSIGNMENT AND SUBLEASE. Lessee may not mortgage, pledge, hypothecate,
assign, transfer, sublet or otherwise deal with this Lease or the Premises in
any manner except as specifically provided for in this Section 8:
(A) In the event that the Lessee desires to sublease the whole
or any portion of the Premises or assign the within Lease to any other
party, the terms and conditions of such sublease or assignment shall be
communicated to the Lessor in writing not less than thirty (30) days
prior to the effective date of any such sublease or assignment, and,
prior to such effective date, the Lessor shall have the option,
exercisable in writing to the Lessee within twenty (20) days following
Lessor's receipt of Lessee's request to sublease or assign, to
recapture the within Lease so that such prospective sublessee or
assignee shall then become the sole lessee of Lessor hereunder or
alternatively to recapture said space and the within Lessee shall be
fully released from any and all obligations hereunder.
(B) In the event that the Lessor elects not to recapture the
Lease or part thereof as the case may be in accordance with (A) above,
the Lessee may nevertheless assign this Lease or sublet the whole or
any portion of the Premises so offered to Lessor, subject to the
Lessor's prior written consent, which consent shall not be unreasonably
withheld, and subject to the consent of any mortgagee, trust deed
holder or ground lessor, on the basis of the terms and conditions
enumerated herein in this Subsection 8(B). However, Lessor shall not be
deemed unreasonable if it refuses to consent to any proposed sublease
or an assignment of the Lease to a tenant, subtenant or other occupant
of
7
<PAGE>
the Building or Complex (or to a subsidiary or affiliate), or if, in
the reasonable judgment of Lessor, the business of such proposed
subtenant or assignee is not compatible with the type of occupancy of
the Building, violates any exclusive granted to any other tenant in the
Building, or such business will create increased use of the Common
Facilities of the Parcel and/or Building or if the proposed sublease or
assignment is to any State, Federal or municipal agency or bureau.
(1) The Lessee shall provide to the Lessor the name
and address of the assignee or sublessee, and copies of financial
reports and other relevant financial information of the assignee or
sublessee reasonably required by Lessor.
(2) The assignee or sublessee shall assume, by
written instrument, all of the obligations of this Lease, and a copy of
such assumption agreement shall be furnished to the Lessor within ten
(10) days of its execution. Any sublease shall expressly acknowledge
that said sublessee's rights against the Lessor shall be no greater
than those of the Lessee.
(3) The Lessee and each assignee shall be and remain
liable for the observance of all the covenants and provisions of this
Lease, including, but not limited to, the payment of Term Fixed Basic
Rent and Additional Rent reserved herein as and when required to be
paid, through the entire Term of this Lease, as the same may be
renewed, extended or otherwise modified.
(4) The Lessee and any assignee shall promptly pay to
Lessor any consideration received for any assignment or all of the rent
(Fixed Basic and Additional), as and when received, in excess of the
Term Fixed Basic Rent and Additional Rent required to be paid by Lessee
for the period affected by said assignment or sublease for the area
sublet, computed on the basis of an average square foot rent for the
gross square footage Lessee has leased.
(5) In any event, the acceptance by the Lessor of any
rent (Fixed Basic and Additional) from the assignee or from any of the
subtenants or the failure of the Lessor to insist upon a strict
performance of any of the terms, conditions and covenants herein shall
not release the Lessee herein, nor any assignee assuming this Lease,
from any and all of the obligations herein during and for the entire
Term of this Lease.
(6) Lessor shall require a Five Hundred and 00/100
($500.00) Dollar payment to cover its handling
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charges for each request for consent to any sublet or assignment prior
to its consideration of the same.
(7) Lessee shall have no claim, and hereby waives the
right to any claim, against Lessor for money damages by reason of any
refusal, withholding or delaying by Lessor of any consent, and in such
event, Lessee's only remedies therefor shall be an action for specific
performance, injunction or declaratory judgment to enforce any such
requirement.
(C) Any sublet or assignment to an "Affiliate" as hereinafter
defined shall not be subject to the provisions of Subsections 8(A),
8(B)(4) or 8(B)(6) hereof and shall not require Lessor's prior written
consent, but all other provisions of this Section shall apply.
(D) In the event that any or all of Lessee's interest in the
Premises and/or this Lease is transferred by operation of law to any
trustee, receiver, or other representative or agent of Lessee, or to
Lessee as a debtor in possession, and subsequently any or all of
Lessee's interest in the Premises and/or this Lease is offered or to be
offered by Lessee or any trustee, receiver, or other representative or
agent of Lessee as to its estate or property (such person, firm or
entity being hereinafter referred to as the "Grantor"), for assignment,
conveyance, lease, or other disposition to a person, firm or entity
other than Lessor (each such transaction being hereinafter referred to
as a "Disposition"), it is agreed that Lessor has and shall have a
right of first refusal to purchase, take, or otherwise acquire, the
same upon the same terms and conditions as the Grantor thereof shall
accept upon such Disposition to such other person, firm, or entity; and
as to each such Disposition the Grantor shall give written notice to
Lessor in reasonable detail of all of the terms and conditions of such
Disposition within twenty (20) days next following its determination to
accept the same but prior to accepting the same, and Grantor shall not
make the Disposition until and unless Lessor has failed or refused to
accept such right of first refusal as to the Disposition, as set forth
herein.
Lessor shall have sixty (60) days next following its
receipt of the written notice as to such Disposition in which to
exercise the option to acquire Lessee's interest by such Disposition,
and the exercise of the option by Lessor shall be effected by notice to
that effect sent to the Grantor; but nothing herein shall require
Lessor to accept a particular Disposition or any Disposition, nor does
the rejection of any one such offer of first refusal constitute a
waiver or release of the obligation of the Grantor to submit
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other offers hereunder to Lessor. In the event Lessor accepts such
offer of first refusal, the transaction shall be consummated pursuant
to the terms and conditions of the Disposition described in the notice
to Lessor. In the event Lessor rejects such offer of first refusal,
Grantor may consummate the Disposition with such other person, firm,
or entity; but any decrease in price of more than two (2%) percent of
the price sought from Lessor or any change in the terms of payment for
such Disposition shall constitute a new transaction requiring a
further option of first refusal to be given to Lessor hereunder.
(E) Without limiting any of the provisions of Sections 13 and
14, if pursuant to the Federal Bankruptcy Code (or any similar law
hereafter enacted having the same general purpose), or if pursuant to
any State insolvency or bankruptcy law, Lessee is permitted to assign
this Lease, notwithstanding the restrictions contained in this Lease,
adequate assurance of future performance by an assignee expressly
permitted under such code or law shall be deemed to mean the deposit of
cash security in an amount equal to the sum of one (1) year's Annual
Fixed Basic Rent and Additional Rent for the next succeeding twelve
(12) months (which Additional Rent shall be reasonably estimated by
Lessor), which deposit shall be held by Lessor for the balance of the
Term, without interest, as Additional Security Deposit, as hereinafter
defined, for the full performance of all of Lessee's obligations under
this Lease, to be held and applied in the manner specified for the
Security Deposit in Section 17 hereof.
(F) The sale or transfer of stock control, if Lessee be a
corporation, shall be deemed an assignment of this Lease unless: (a) it
involves the sale or issuance of securities registered under the
Securities Act of 1933, as amended, (b) it is made amongst the existing
stockholders of Lessee, or (c) it results from the death of a
stockholder of Lessee.
(G) Except as specifically set forth above, no portion of the
Demised Premises or of Lessee's interest in this Lease may be acquired
by any other person or entity, whether by assignment, mortgage,
sublease, transfer, operation of law or act of the Lessee, nor shall
Lessee pledge its interest in this Lease or in any Security Deposit
required hereunder.
(H) If Lessee is a corporation and if at any time during the
Lease Term the persons owning a majority of its "voting stock" at the
time of the execution of this Lease should cease to own a majority of
such voting stock (except as the result of transfers by bequest or
inheritance), Lessee covenants to notify Lessor of any such transfer
and such transfer shall be deemed an
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assignment of this Lease. In the event of such transfer, Lessor may
not unreasonably withhold its consent thereto taking into account the
financial status of such transferee and its ability to perform all of
the terms, covenants and conditions of this Lease, subject to the
terms and provisions of this Section 8. This Section shall not apply
whenever Lessee is a corporation, the outstanding stock of which is
listed on a recognized stock exchange. For the purposes of this
Subsection 8(H), stock ownership shall be determined in accordance
with the principles set forth in Section 544 of the Internal Revenue
Code of 1986, as amended, to and including the date of this Lease, and
the term "voting stock" shall refer to shares of stock regularly
entitled to vote for the election of directors of the corporation.
9. COMPLIANCE WITH RULES AND REGULATIONS. Lessee shall observe and
comply with the Rules and Regulations hereinafter set forth in Exhibit B
attached hereto and made a part hereof and with such further reasonable Rules
and Regulations as Lessor may prescribe, on notice to the Lessee, for the
safety, care and cleanliness of the Building and the comfort, quiet and
convenience of other occupants of the Building.
10. DAMAGES TO BUILDING. If the Building is damaged by fire or any
other cause to such extent that the cost of restoration, as reasonably estimated
by Lessor, will equal or exceed twenty-five (25%) percent of the replacement
value of the Building (exclusive of foundations) just prior to the occurrence of
the damage, then Lessor may, no later than the sixtieth (60th) day following the
damage, give Lessee a notice of election to terminate this Lease, or if the cost
of restoration will equal or exceed fifty (50%) percent of such replacement
value and if the Premises shall not be reasonably usable for the purpose for
which they are leased hereunder, then Lessee may, no later than the sixtieth
(60th) day following the damage, give Lessor a notice of election to terminate
this Lease. In either said event of election, this Lease shall be deemed to
terminate on the thirtieth (30th) day after the giving of said notice, and
Lessee shall surrender possession of the Premises within a reasonable time
thereafter; and the Term Fixed Basic Rent and any Additional Rent shall be
apportioned as of the date of said surrender, and any Term Fixed Basic Rent or
Additional Rent paid for any period beyond the latter of the thirtieth (30th)
day after said notice, or the date Lessee surrenders possession, shall be repaid
to Lessee. If the cost of restoration shall not entitle Lessor to terminate this
Lease or if, despite the cost, Lessor does not elect to terminate this Lease,
Lessor shall restore the Building and the Premises with reasonable promptness,
subject to Force Majeure, as hereinafter defined, and except as stated above,
Lessee shall have no right to terminate this Lease. Lessor need not restore
fixtures and improvements owned by Lessee.
Except as provided in Section 5 hereof, notwithstanding
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the provisions of this Section or any other provision of this Lease, Lessor
shall not have any obligation whatsoever to repair, reconstruct, or restore the
Premises when the damages resulting from any casualty covered by the provisions
of this Section occur during the last six (6) months of the Term or any
extension thereof.
In any case in which use of the Premises is affected by any
damage to the Building, there shall be either an abatement or an equitable
reduction in Term Fixed Basic Rent and an equitable reduction in the Base Period
Costs as established in Section 25 depending on the period for which and the
extent to which the Premises are not reasonably usable for the purpose for which
they are leased hereunder. The words "restoration" and "restore" as used in this
Section 10 shall include repairs. If the damage results from the fault of the
Lessee, or Lessee's agents, servants, visitors or licensees, Lessee shall not be
entitled to any abatement or reduction in Term Fixed Basic Rent or Additional
Rent, except to the extent of any rent insurance received by Lessor.
11. WAIVER OF SUBROGATION. Except as provided in Section 5 hereof,
notwithstanding the provisions of this Section or any other provision of this
Lease, in the event of any loss or damage to the Building, the Premises and/or
any contents (herein "property damage"), each party waives all claims against
the other for any such loss or damage and each party shall look only to any
insurance which it has obtained to protect against such loss (or in the case of
Lessee, waives all claims against any tenant of the Building that has similarly
waived claims against such Lessee), and each party shall obtain, for each policy
of such insurance, provisions waiving any claim against the other party [and
against any other tenant(s) in the Building that has waived subrogation against
the Lessee] for loss or damage within the scope of such insurance.
12. EMINENT DOMAIN. If Lessee's use of the Premises is materially
affected due to the taking by eminent domain of (a) the Premises or any part
thereof or any estate therein; or (b) any other part of the Building; then, in
either event, this Lease shall terminate on the date when title vests pursuant
to such taking. The Term Fixed Basic Rent and any Additional Rent shall be
apportioned as of said termination date and any Term Fixed Basic Rent or
Additional Rent paid for any period beyond said date shall be repaid to Lessee.
Lessee shall not be entitled to any part of the award for such taking or any
payment in lieu thereof, but Lessee may file a separate claim for any taking of
fixtures and improvements owned by Lessee which have not become the Lessor's
property, and for moving expenses, provided the same shall in no way affect or
diminish Lessor's award. In the event of a partial taking which does not effect
a termination of this Lease but does deprive Lessee of the use of a portion of
the Demised Premises, there shall either be an abatement or an equitable
reduction of the Term Fixed Basic Rent, and an equitable adjustment reducing the
Base Period Costs depending on
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the period for which and the extent to which the Premises so taken are not
reasonably usable for the purpose for which they are leased hereunder.
13. INSOLVENCY OF LESSEE. Either (a) the appointment of a receiver to
take possession of all or substantially all of the assets of Lessee, or (b) a
general assignment by Lessee for the benefit of creditors, or (c) any action
taken or suffered by Lessee under any insolvency or bankruptcy act, shall
constitute a default of this Lease by Lessee, and Lessor may terminate this
Lease forthwith and upon notice of such termination Lessee's right to possession
of the Demised Premises shall cease, and Lessee shall then quit and surrender
the Premises to Lessor but Lessee shall remain liable as hereinafter provided in
Section 14 hereof.
14. LESSOR'S REMEDIES ON DEFAULT. If Lessee defaults in the payment of
Term Fixed Basic Rent or any Additional Rent, or defaults in the performance of
any of the other covenants and conditions hereof or permits the Premises to
become deserted, abandoned or vacated, or defaults in the performance of any
other lease held by Lessee or its Affiliates from Lessor or from any landlord in
which Lessor's principals have at least a twenty-five (25%) percent interest,
Lessor may give Lessee notice of such default, and if Lessee does not cure any
Term Fixed Basic Rent or Additional Rent default within five (5) days of the
giving of such notice or other default within fifteen (15) days after giving of
such notice [or if such other default is of such nature that it cannot be
completely cured within such period, if Lessee does not commence such curing
within such fifteen (15) days and thereafter proceed with reasonable diligence
and in good faith to cure such default], then Lessor may terminate this Lease on
not less than ten (10) days' notice to Lessee, and on the date specified in said
notice, Lessee's right to possession of the Demised Premises shall cease, and
Lessee shall then quit and surrender the Premises to Lessor, but Lessee shall
remain liable as hereinafter provided. If this Lease shall have been so
terminated by Lessor pursuant to Sections 13 or 14 hereof, Lessor may at any
time thereafter resume possession of the Premises by any lawful means and remove
Lessee or other occupants and their effects.
15. DEFICIENCY. In any case where Lessor has recovered possession of
the Premises by reason of Lessee's default, Lessor may, at Lessor's option,
occupy the Premises or cause the Premises to be redecorated, altered, divided,
consolidated with other adjoining premises, or otherwise changed or prepared for
reletting, and may relet the Premises or any part thereof as agent of Lessee or
otherwise, for a term or terms to expire prior to, at the same time as, or
subsequent to, the original expiration date of this Lease, at Lessor's option,
and receive Term Fixed Basic Rent and Additional Rent therefor. Term Fixed Basic
Rent or Additional Rent so received shall be applied first to the payment of
such expenses as Lessor may have incurred in connection with the recovery of
possession, redecorating,
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altering, dividing, consolidating with other adjoining premises, or otherwise
changing or preparing for reletting, and the reletting, including brokerage and
reasonable attorney's fees, and then to the payment of damages in amounts equal
to the Term Fixed Basic Rent and Additional Rent hereunder and to the costs and
expenses of performance of the other covenants of Lessee as herein provided.
Lessee agrees, in any such case, whether or not Lessor has relet, to pay to
Lessor damages equal to the Term Fixed Basic Rent and Additional Rent and other
sums herein agreed to be paid by Lessee, as and when due, less the net proceeds
of the reletting, if any, as ascertained from time to time, as of the due date,
and the same shall be payable by Lessee on the several rent days above
specified. Lessee shall not be entitled to any surplus accruing as a result of
any such reletting, nor shall any surplus be applied to offset the damages
referred to in the preceding sentence. In reletting the Premises as aforesaid,
Lessor may grant rent concessions, and Lessee shall not be credited therewith.
No such reletting shall constitute a surrender and acceptance or be deemed
evidence thereof. If Lessor elects, pursuant hereto, actually to occupy and use
the Premises or any part thereof during any part of the balance of the Term as
originally fixed or since extended, there shall be allowed against Lessee's
obligation for Term Fixed Basic Rent and Additional Rent or damages as herein
defined, during the period of Lessor's occupancy, the reasonable value of such
occupancy, not to exceed in any event the Term Fixed Basic Rent and Additional
Rent herein reserved and such occupancy shall not be construed as a release of
Lessee's liability hereunder. Alternatively, in any case where Lessor has
recovered possession of the Premises by reason of Lessee's default, Lessor may
at Lessor's option, and at any time thereafter, and without notice or other
action by Lessor, and without prejudice to any other rights or remedies it might
have hereunder or at law or equity, become entitled to recover from Lessee, as
damages for such breach, in addition to such other sums herein agreed to be paid
by Lessee, to the date of re-entry, expiration and/or dispossess, an amount
equal to the difference between the Term Fixed Basic Rent and the Additional
Rent reserved in this Lease from the date of such default to the date of
expiration of the original Term demised and the then fair and reasonable rental
value (inclusive of Additional Rent and Term Fixed Basic Rent) of the Premises
for the same period. Said damages shall become due and payable to Lessor
immediately upon such breach of this Lease and without regard to whether this
Lease be terminated or not, and if this Lease is terminated, without regard to
the manner in which it is terminated. In the computation of such damages, the
difference between any installments of rent (Fixed Basic and Additional)
thereafter becoming due, and fair and reasonable rental value of the Premises
(inclusive of the same rent components) for the period for which such
installment was payable shall be discounted to the date of such default at the
rate of not more than four (4%) percent per annum.
Lessee hereby waives all right of redemption to which Lessee
or any person under Lessee might be entitled by any law now or hereafter in
force. In addition, in the event of a
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default which results in the Lessor recovering possession of the Premises,
Lessor will use reasonable efforts to relet the Premises in order to mitigate
its damages provided that Lessor shall retain the right, in the exercise of its
reasonable business judgment, to approve any tenant and determine the reasonable
terms and conditions of any lease, including, but not limited to, rent and
length of term. Notwithstanding the foregoing, Lessor shall not be obligated to
display the Premises to prospective tenants if Lessor has other premises
available in the Building or Complex. However, if prospective tenants do not
find such other premises suitable, Lessor agrees that it will then display the
Premises to the prospective tenants.
Lessor's remedies hereunder are in addition to any remedy
allowed by law.
Lessee agrees to pay, as Additional Rent, all attorney's fees
and other expenses incurred by the Lessor in enforcing any of the obligations
under this Lease, this covenant to survive the expiration or sooner termination
of this Lease.
16. SUBORDINATION OF LEASE. This Lease and any option contained herein
shall, at Lessor's option, or at the option of any holder of any underlying
lease or holder of any first mortgage or first deed of trust, be subject and
subordinate to any such underlying leases and to any such first mortgage and/or
first trust deed which may now or hereafter affect the real property of which
the Premises form a part, and also to all renewals, modifications,
consolidations and replacements of said underlying leases and said first
mortgage and first trust deed. Although no instrument or act on the part of
Lessee shall be necessary to effectuate such subordination, Lessee will,
nevertheless, execute and deliver such further instruments confirming such
subordination of this Lease as may be desired by the holders of said first
mortgage and first trust deed or by any of the lessors under such underlying
leases. If any underlying lease to which this Lease is subject terminates,
Lessee shall, on timely request, attorn to the owner of the reversion.
17. SECURITY DEPOSIT. Lessee shall deposit with Lessor on the signing
of this Lease the Security Deposit as defined on the Reference Page for the full
and faithful performance of Lessee's obligations under this Lease, including
without limitation, the surrender of possession of the Premises to Lessor as
herein provided. If Lessor applies any part of said deposit to cure any default
of Lessee, Lessee shall on demand deposit with Lessor the amount so applied so
that Lessor shall have the full deposit on hand at all times during the Term of
this Lease. In the event of a bona fide sale, subject to this Lease, Lessor
shall have the right to transfer the Security Deposit to the vendee and Lessor
shall be considered released by Lessee from all liability for the return of such
Security Deposit; and Lessee agrees to look solely to the new lessor for the
return of the said Security Deposit, and it is agreed that this shall apply to
every transfer or assignment made of the Security Deposit to a new lessor. The
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Security Deposit (less any portions thereof used, applied or retained by Lessor
in accordance with the provisions of this Section 17), shall be returned to
Lessee after the expiration or sooner termination of this Lease without the
fault of the Lessee and after delivery of the entire Premises to Lessor in
accordance with the provisions of this Lease. Lessee covenants that it will not
assign or encumber or attempt to assign or encumber the Security Deposit and
Lessor shall not be bound by any such assignment, encumbrance or attempt
thereof.
In the event of the insolvency of Lessee or in the event of
the entry of a judgment declaring Lessee insolvent or bankrupt in any court
which is not discharged within thirty (30) days after entry, or in the event a
petition is filed by or against Lessee under any chapter of the bankruptcy laws
of the State of New Jersey or the United States of America, then and in such
event Lessor may require the Lessee to deposit additional security in the amount
specified in Subsection 8(E) (hereinafter called the "Additional Security
Deposit") to adequately assure Lessee's performance of all of its obligations
under this Lease including all payments subsequently accruing. Failure of Lessee
to deposit the Additional Security Deposit pursuant thereto within ten (10) days
after Lessor's written demand shall constitute a default by Lessee.
18. RIGHT TO CURE LESSEE'S BREACH. If Lessee breaches any covenant or
condition of this Lease, Lessor may, on reasonable notice to Lessee (except that
no notice need be given in case of emergency), cure such breach at the expense
of Lessee and the reasonable amount of all expenses, including attorneys' fees,
incurred by Lessor in so doing (whether paid by Lessor or not) shall be deemed
Additional Rent payable on demand, with interest at two (2%) percent per annum
over the prime lending rate announced as such by Chase Manhattan Bank to its
most creditworthy customers or the highest rate permitted by law, whichever is
lower.
19. LIENS. Lessee shall not do any act, or make any contract, which may
create or be the foundation for any lien or other encumbrance upon any interest
of Lessor or any ground or underlying lessor in any portion of the Premises. If,
because of any act or omission (or alleged act or omission) of Lessee, any
Construction Lien Claim or other lien (collectively "Lien"), charge, or order
for the payment of money or other encumbrance shall be filed against Lessor
and/or any ground or underlying lessor and/or any portion of the Premises
(whether or not such Lien, charge, order, or encumbrance is valid or enforceable
as such), Lessee shall, at its own cost and expense, cause same to be discharged
of record or bonded within fifteen (15) days after the filing thereof; and
Lessee shall indemnify and save harmless Lessor and all ground and underlying
lessor(s) against and from all costs, liabilities, suits, penalties, claims, and
demands, including reasonable counsel fees, resulting therefrom. If Lessee fails
to comply with the foregoing provisions, Lessor shall have the option of
discharging or bonding any such Lien,
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charge, order, or encumbrance, and Lessee agrees to reimburse Lessor for all
costs, expenses and other sums of money in connection therewith (as additional
rental) with interest at the maximum rate permitted by law promptly upon demand.
All materialmen, contractors, artisans, mechanics, laborers, and any other
persons now or hereafter contracting with Lessee or any contractor or
subcontractor of Lessee for the furnishing of any labor services, materials,
supplies, or equipment with respect to any portion of the Premises, at any time
from the date hereof until the end of the Lease Term, are hereby charged with
notice that they look exclusively to Lessee to obtain payment for same.
20. RIGHT TO INSPECT AND REPAIR. Lessor may enter the Premises but shall
not be obligated to do so (except as required by any specific provision of this
Lease) at any reasonable time on reasonable notice to Lessee (except that no
notice need be given in case of emergency) for the purpose of inspection or the
making of such repairs, replacement or additions, in, to, on and about the
Premises or the Building, as Lessor deems necessary or desirable. Lessee shall
have no claims or cause of action against Lessor by reason thereof.
21. SERVICES TO BE PROVIDED BY LESSOR. Subject to intervening laws,
ordinances, regulations and executive orders, while Lessee is not in default
under any of the provisions of this Lease, Lessor agrees to furnish, on
"Business Days," as hereinafter defined:
(A) Janitorial services to be performed in accordance with
Building standards and practices, to include restroom supplies.
(B) Heating, ventilating and air conditioning (herein "HVAC"),
as appropriate for the season, together with Common Facilities lighting
and electric energy all during "Building Hours," as hereinafter
defined.
(C) Cold and hot water for drinking and lavatory purposes.
(D) Elevator service during Building Hours.
(E) Notwithstanding any other provision of this Lease, Lessor
shall not be liable for failure to furnish any of the aforesaid
services when such failure is due to Force Majeure, as hereinafter
defined.
22. AFTER-HOURS USE. Lessee shall be entitled to make use of HVAC beyond
Building Hours, at Lessee's sole cost and expense, provided Lessee shall notify
the Lessor twenty-four (24) hours prior to such desired overtime use, except if
such use is desired for a weekend, in which event Lessee shall notify Lessor no
later than 5:00 p.m. on the Thursday immediately preceding said weekend. It is
understood and agreed that Lessee shall pay the
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sum of Eighty-five and 00/100 ($85.00) Dollars per hour, plus such additional
percentage increase of the aforesaid hourly sum computed by measuring the
percentage increase of the rate in effect (including fuel surcharges or
adjustments) during the month for which such overtime use is requested against
the Base Utility Rate, as defined on the Reference Page.
In no event shall the Lessee pay less than the sum of Eighty-five and
00/100 ($85.00) Dollars per hour for such aforesaid overtime use.
23. INTERRUPTION OF SERVICES OR USE. Interruption or curtailment of any
service maintained in the Building or the Complex or at the Parcel, if caused by
Force Majeure, as hereinafter defined, shall not entitle Lessee to any claim
against Lessor or to any abatement in Term Fixed Basic Rent or Additional Rent,
and shall not constitute a constructive or partial eviction, unless Lessor fails
to take measures as may be reasonable under the circumstances to restore the
service. If Lessor fails to take such measures as may be reasonable under the
circumstances to restore the curtailed service, Lessee's remedies shall be
limited to an equitable abatement of Term Fixed Basic Rent and Additional Rent
for the duration of the curtailment beyond said reasonable period, to the extent
such Premises are not reasonably usable by Lessee or to a claim of constructive
eviction. If the Premises are rendered untenantable in whole or in part, for a
period of ten (10) consecutive business days, by the making of repairs,
replacements or additions, other than those made with Lessee's consent or caused
by misuse or neglect by Lessee, or Lessee's agents, servants, visitors or
licensees, there shall be a proportionate abatement of Term Fixed Basic Rent and
Additional Rent from and after said tenth (10th) consecutive business day and
continuing for the period of such untenantability. In no event shall Lessee be
entitled to claim a constructive eviction from the Premises unless Lessee shall
first have notified Lessor in writing of the condition or conditions giving rise
thereto, and, if the complaints be justified, unless Lessor shall have failed,
within a reasonable time after receipt of such notice, to remedy, or commence
and proceed with due diligence to remedy, such condition or conditions, all
subject to Force Majeure, as hereinafter defined. The remedies provided for in
this Section 23 shall be Lessee's sole remedies for any interruption of services
or use as described above.
24. ELECTRICITY. (A) Lessor, subject to the provisions of this Section 24,
shall furnish electrical energy to or for the use of Lessee in the Premises in
accordance with this Section 24.
(B) Throughout the Term, Lessor shall redistribute electrical
energy to the Premises during Building Hours upon the following terms and
conditions: (i) Lessee shall pay for such electrical energy as provided by this
Section 24; (ii) Lessor will redistribute electricity to Lessee through
presently installed electrical facilities for Lessee's reasonable use of normal
office equipment and such lighting, electrical appliances
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and equipment as Lessor may permit to be installed in the Premises, all
consistent with that wiring capacity that has been installed in the Premises;
(iii) Lessee agrees that an independent electrical engineering consultant
selected by Lessor shall from time to time make a survey of the electric power
demand of the electric lighting fixtures and the electric equipment of Lessee
used in the Premises to determine the average monthly electric consumption
thereof, said survey to be at Lessee's expense. Lessor reserves the right to
estimate Lessee's electric consumption until such a survey is made. The estimate
will be based on One and 00/100 ($1.00) Dollar per square foot per year of the
rentable area of the Premises and Lessee agrees that the Annual Fixed Basic
Rent, as defined on the Reference Page, has been increased to compensate Lessor
for supplying Lessee with electric current by an estimated Electric Rent
Inclusion Factor as defined on the Reference Page. The aforesaid survey shall
take into account, among other things, any special electrical requirements of
Lessee and use by Lessee of electrical energy at times other than during
Building Hours on Business Days. The findings of such engineer or consultant as
to the proper Electric Rent Inclusion Factor based on such average monthly
electric consumption shall be conclusive and binding upon the parties and the
amount thereof, less the Electric Rent Inclusion Factor, if in excess of the
Electric Rent Inclusion Factor, shall be added to the Annual Fixed Basic Rent
which shall be payable in installments of Monthly Fixed Basic Rent, payable for
each month from the Commencement Date or if the amount thereof shall be lower
than the Electric Rent Inclusion Factor, the difference therein shall be
subtracted from the Annual Fixed Basic Rent and the resulting sum shall be the
revised Annual Fixed Basic Rent which shall be payable in installments of
Monthly Fixed Basic Rent (except that if the amount of such rent increase or
decrease shall not have been determined on the Commencement Date, then, upon
such subsequent determination, Lessee shall pay or receive a credit, as the case
may be, for the retroactive determination from the Commencement Date to the date
of such determination); (iv) If the Electric Rates (as hereinafter defined) on
which the initial determination of said consultant was based shall be increased
or decreased, then the Annual Fixed Basic Rent shall be increased or decreased
in the amount equal to the change in Lessor's cost of supplying electrical
current to the Premises resulting from such rate change, retroactive if
necessary to the date of such increase or decrease in such Electric Rates. The
Term Fixed Basic Rent, as defined on the Reference Page, shall be deemed
modified accordingly by any of the aforesaid modifications.
(C) Lessee shall make no alterations or additions to the
electric equipment appliances without first obtaining written consent from
Lessor in each instance. If Lessee installs additional or substituted electrical
equipment or appliances or otherwise increases its use of current, then the
Electric Rent Inclusion Factor shall be redetermined by Lessor's electrical
engineer or consultant, at Lessee's expense, and such determination shall be
conclusive and binding upon Lessor and Lessee. Lessee may at any time it
believes any change in its
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electrical equipment or appliances or fixtures has reduced its electrical
consumption request a resurvey of the Premises by Lessor's electrical engineer
or consultant, at Lessee's expense. Any change in the Electric Rent Inclusion
Factor resulting from a change in Lessee's consumption shall be effective as of
the date of such change, and the Term Fixed Basic Rent enumerated herein shall
be deemed modified accordingly, retroactive if necessary.
(D) Lessor shall not be liable in any way to Lessee for any
loss, damage or expense which Lessee may sustain or incur as a result of any
failure, defect or change in the quantity or character of electrical energy
available for redistribution to the Premises pursuant to this Section nor for
any interruption in the supply, and Lessee agrees that such supply may be
interrupted for inspection, repairs and replacement and in emergencies. In any
event, the full measure of Lessor's liability for any interruption in the supply
due to Lessor's acts or omissions shall be an abatement of Term Fixed Basic Rent
and Additional Rent. In no event shall Lessor be liable for any business
interruption suffered by Lessee. Lessee covenants and agrees that at all times
its use of electric current shall never exceed the capacity of existing feeders
to the Building or the risers or wiring installation. Any riser or risers to
supply Lessee's electrical requirements, upon written request of Lessee, shall
be installed by Lessor, at the sole cost and expense of Lessee, if, in Lessor's
sole judgment, the same are necessary and will not cause or create a dangerous
or hazardous condition or entail excessive or unreasonable alterations, repairs
or expense or interfere with or disturb other tenants or occupants. In addition
to the installation of such riser or risers, Lessor shall also, at the sole cost
and expense of Lessee, install all other equipment proper and necessary in
connection therewith subject to the aforesaid terms and conditions.
(E) Lessor reserves the right to terminate the redistribution
of electricity to the Premises at any time, upon thirty (30) days' written
notice to Lessee, in which event Lessee may make application directly to the
utility company servicing the Building for Lessee's entire separate supply of
electricity. Lessor, upon the expiration of the aforesaid thirty (30) day
period, may discontinue furnishing the electric current, in which latter event
Lessee's Annual Fixed Basic Rent shall be decreased by the charge for Electric
Rent Inclusion Factor as of the date of discontinuance of the supplying of
electric current, but this Lease shall otherwise remain in full force and
effect. The term "Electric Rates" shall be deemed to mean the rates for the
comparable usage charged by the public utility company furnishing electrical
energy to the Building, including but not limited to any charges or surcharges
incurred or taxes payable by Lessor in connection therewith or increase or
decrease thereof by reason of fuel adjustment or any substitutions for such
Electric Rates or additions thereto.
(F) If Lessor discontinues the furnishing of electricity, as
provided in this Section 24, then, and in such
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event, Lessor shall permit Lessee to receive electrical service directly from
the public utility supplying electrical service to the Building and shall permit
the existing feeders, risers, wiring and other electrical facilities serving the
Premises to be used by Lessee for such purpose to the extent that they are
available, suitable and safe. Lessee shall, at its own expense, install any
necessary electrical meter equipment, panel boards, feeders, risers, wiring and
other conductor and equipment which may be required to obtain electrical energy
directly from the public utility supplying the same. Lessor shall have no
liability whatsoever to Lessee by reason of Lessor's discontinuance of
electrical service.
(G) Lessor, at Lessee's expense, shall furnish and install all
lamps (including incandescent and fluorescent), starters and ballasts used in
the Premises.
(H) Following a determination of an increase or decrease in
the Electric Rent Inclusion Factor attributable to the furnishing of electrical
energy to the Premises by Lessor as set forth in this Section 24, Lessor and
Lessee shall, upon request of either party, execute, acknowledge and deliver to
each other a supplemental agreement in form satisfactory to Lessor reflecting
such change in the Annual Fixed Basic Rent and Monthly Installment of Term Fixed
Basic Rent, but any such change shall be effective whether or not such agreement
is entered into.
(I) In addition to payments of the Electric Rent Inclusion
Factor, if Lessee makes use of electric current on non-Business Days or after
Building Hours, then Lessee shall pay to Lessor, as Additional Rent, Lessor's
cost of supplying electrical current to the Premises at all such times when
electrical current is so used. Such charge shall be made on a per hour (or any
portion thereof) basis determined by the hourly cost of supplying electrical
current to the Premises or such portions of the Building as must be supplied to
provide electric current to the Premises; provided, however, that Lessee shall
not be required under this Section to pay for use of electrical current which
shall have previously been included in a survey of Lessee's use of electrical
current pursuant to Subsection 24(B) above.
(J) Notwithstanding anything contained herein to the contrary,
Lessor reserves the right, at Lessor's cost and expense, to install a separate
meter to measure electrical consumption to the Premises for lighting and
equipment purposes, in which event Lessee shall pay the meter charges based upon
the Electric Rates for said consumption in lieu of the amount determined
pursuant to Subsection 24(B) hereof, in which event Lessee's Annual Fixed Basic
Rent shall be decreased by the charge for Electric Rent Inclusion Factor as of
the date of installation of the meter.
25. ADDITIONAL RENT. It is expressly agreed that Lessee will pay in
addition to the Term Fixed Basic Rent provided in
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Section 3 above, an Additional Rent to cover Lessee's Percentage, as defined on
the Reference Page, of the increased cost to Lessor, for each of the categories
enumerated herein, over the "Base Period Costs," as defined on the Reference
Page, for said categories.
(A) Operating Cost Escalation. If during the Lease Term the
Operating Costs incurred for the Building in which the Demised Premises
are located, Complex and Parcel, for any Lease Year or proportionate
part thereof if the Lease Term expires prior to the expiration of a
Lease Year (herein the "Comparison Period") shall be greater than the
Base Operating Costs (adjusted proportionately if the Comparison Period
is less than a Lease Year), then Lessee shall pay to Lessor, as
Additional Rent, Lessee's Percentage of all such excess Operating
Costs. Operating Costs shall include, by way of illustration and not of
limitation: personal property taxes; management fees; labor, including
all wages and salaries; social security taxes, and other taxes which
may be levied against Lessor upon such wages and salaries; employee
benefits and payroll taxes; accounting and legal fees; any sales, use
or service taxes incurred in connection with the operation of the
Complex or Parcel; supplies; repairs and maintenance; maintenance and
service contracts; the cost of security and alarm services; license
permits and inspection fees; painting; wall and window washing; laundry
and towel service; tools and equipment (which are not required to be
capitalized for Federal income tax purposes); fire and other insurance;
trash removal; lawn care; snow removal and all other items properly
constituting direct operating costs according to standard accounting
practices (hereinafter collectively referred to as the "Operating
Costs"). Lessor shall be entitled to amortize and include in Operating
Costs an allocable portion of the cost of capital improvement items,
including life safety systems, which are reasonably calculated to
reduce operating expenses or which are required under any governmental
laws, regulations or ordinances which were not applicable to the
Building or Complex or Parcel at the time it was constructed. All such
costs shall be amortized over the reasonable life of such improvements
with interest at two (2%) percent over the prime lending rate announced
as such by Chase Manhattan Bank to its most creditworthy borrowers on
the unamortized amount in accordance with such reasonable life and
amortization schedules as shall be determined by Lessor in accordance
with generally accepted accounting principles. As used in this
Subsection 25(A), the Base Period Costs for Operating Costs shall be as
defined on the Reference Page.
(B) Fuel, Utilities and Electric Cost Escalation
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(hereinafter "Utility and Energy Costs"). If during the Lease Term the
Utility and Energy Costs, including any fuel surcharges or adjustments
with respect thereto, incurred for water, sewer, other utilities and
heating, ventilating and air conditioning for the Building, Complex
and Parcel to include all leased and leasable areas (not separately
billed or metered within the Building) and Common Facilities electric,
lighting, water, sewer and other utilities for the Building, the
Complex and Parcel, for any Comparison Period shall be greater than
the Base Utility and Energy Costs (adjusted proportionately if the
Comparison Period is less than a Lease Year), then Lessee shall pay to
Lessor as Additional Rent, Lessee's Percentage of all such excess
Utility and Energy Costs. Common Facilities electric consumption shall
be charged at the bulk rate at which Lessor purchases electrical
energy from the public utility supplying electrical service to the
Building. As used in this Subsection 25(B), the Base Utility and
Energy Costs shall be as defined on the Reference Page.
(C) Tax Escalation. If during the Lease Term the Real Estate
Taxes for the Building, the Complex and Parcel at which the Demised
Premises are located for any Comparison Period shall be greater than
the Base Real Estate Taxes (adjusted proportionately if the Comparison
Period is less than a Lease Year), then Lessee shall pay to Lessor as
Additional Rent, Lessee's Percentage of all such excess Real Estate
Taxes.
As used in this Subsection 25(C), the words and terms which
follow mean and include the following:
(i) The Base Period Costs for "Real Estate Taxes" shall be as
defined on the Reference Page.
(ii) "Real Estate Taxes" shall mean the property taxes and
assessments imposed upon the Building, the Complex and Parcel, or upon
the Term Fixed Basic Rent and Additional Rent, as such, payable to the
Lessor including, but not limited to, real estate, city, county,
village, school and transit taxes, or taxes, assessments or charges
levied, imposed or assessed against the Building and Complex by any
other taxing authority, whether general or specific, ordinary or
extraordinary, foreseen or unforeseen. If due to a future change in
the method of taxation, any franchise, income or profit tax shall be
levied against Lessor in substitution for, or in lieu of, or in
addition to, any tax which would otherwise constitute a Real Estate
Tax, such franchise, income or profit tax shall be deemed to be a Real
Estate Tax for the purposes hereof; conversely, any additional real
estate tax hereafter imposed in substitution for, or in lieu
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of, any franchise, income or profit tax (which is not in substitution
for, or in lieu of, or in addition to, a Real Estate Tax as
hereinbefore provided) shall not be deemed a Real Estate Tax for the
purposes hereof. Notwithstanding anything contained herein to the
contrary, Lessee shall assume and pay to Lessor in full at the time of
paying the Term Fixed Basic Rent, any excise, sales, use, gross
receipts or other taxes (other than a net income or excess profits
tax) which may be imposed on or measured by such Term Fixed Basic Rent
or Additional Rent or may be imposed on Lessor or on account of the
letting or which Lessor may be required to pay or collect under any
law now in effect or hereafter enacted.
(D) Lease Year. As used in this Lease, Lease Year shall mean the
twelve (12) month period commencing on the Commencement Date and each
twelve (12) month period thereafter. Once the base costs are
established, in the event any lease period is less than twelve (12)
months, then the Base Period Costs for the categories listed above
shall be adjusted to equal the proportion that said period bears to
twelve (12) months, and Lessee shall pay to Lessor as Additional Rent
for such period, an amount equal to Lessee's Percentage of the excess
for said period over the adjusted base with respect to each of the
aforesaid categories. Notwithstanding anything contained herein to the
contrary, once the base costs are established, Lessor reserves the
right to calendarize billing and payment in order to establish
operating consistency.
(E) Payment. At any time, and from time to time, after the
establishment of the Base Period Costs for each of the categories
referred to above, Lessor shall advise the Lessee in writing of
Lessee's Percentage, as defined on the Reference Page, with respect to
each of the categories as estimated for the current Lease Year [and
for each succeeding Lease Year or proportionate part thereof if the
last period prior to the Lease's termination is less than twelve (12)
months] as then known to the Lessor, and thereafter, the Lessee shall
pay as Additional Rent, Lessee's Percentage of the excess of these
costs over the Base Period Costs for the then current period affected
by such advice (as the same may be periodically revised by Lessor as
additional costs are incurred) in equal monthly installments on the
first day of each month, such new rates being applied to any months
for which the installments of Monthly Fixed Basic Rent shall have
already been paid which are affected by the Operating Cost Escalation
and/or Utility and Energy Cost Escalation and/or Tax Escalation Costs
above referred to, as well as the unexpired months of the current
period the adjustment for the then expired months to be
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made at the payment of the next succeeding installment of Monthly
Fixed Basic Rent, all subject to final adjustment at the expiration of
each Lease Year as defined in Subsection 25(D) hereof [or
proportionate part thereof, if the last period prior to the Lease's
termination is less than twelve (12) months]. In the event the last
period prior to the Lease's termination is less than twelve (12)
months, the Base Period Costs during said period shall be
proportionately reduced to correspond to the duration of said final
period.
(F) Books and Records. For the protection of Lessee, Lessor shall
maintain books of account which shall be open to Lessee and its
representatives at all reasonable times so that Lessee can determine
that such Operating, Utility, Energy and Tax Costs have, in fact, been
paid or incurred. Any disagreement with respect to any one or more of
said charges if not satisfactorily settled between Lessor and Lessee
shall be referred by either party to an independent certified public
accountant to be mutually agreed upon, and if such an accountant
cannot be agreed upon, the American Arbitration Association may be
asked by either party to select an arbitrator, whose decision on the
dispute will be final and binding upon both parties, who shall jointly
share any cost of such arbitration. Pending resolution of said
dispute, the Lessee shall pay to Lessor the sum so billed by Lessor
subject to its ultimate resolution as aforesaid.
(G) Right of Review. Once Lessor shall have finally determined
said Operating, Utility and Energy or Tax Costs at the expiration of a
Lease Year, then, as to the item so established, Lessee shall only be
entitled to dispute said charge as finally established for a period of
six (6) months after such charge is finally established, and Lessee
specifically waives any right to dispute any such charge at the
expiration of said six (6) month period.
(H) Occupancy Adjustment. If, with respect to Operating Cost
Escalation, as established in Subsection 25(A) hereof, and Utility and
Energy Cost Escalation, as established in Subsection 25(B) hereof, the
Building is not ninety-five (95%) percent occupied during the
establishment of the respective Base Period Costs, then the Base
Period Costs incurred with respect to said Operating Cost or Utility
and Energy Cost shall be adjusted during any such period so as to
reflect ninety-five (95%) percent occupancy. Similarly, if, during any
Lease Year or proportionate part thereof subsequent to the
establishment of the respective Base Period Costs the Building is less
than ninety-five (95%) percent occupied, then the actual costs
incurred for Operating Cost and Utility and Energy Cost shall be
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increased during any such period to reflect ninety-five (95%) percent
occupancy so that at all times after the establishment of the
aforesaid Base Period Costs, the Utility and Energy Cost and Operating
Cost shall be actual costs, but in the event less than ninety-five
(95%) percent of the Building is occupied during all or part of the
Lease Year involved, the Utility and Energy Cost and Operating Cost
shall not be less than that which would have been incurred had
ninety-five (95%) percent of the Building been occupied. The aforesaid
adjustment shall only be made with respect to those items that are in
fact affected by variations in occupancy levels. To the extent any
Operating Cost or Utility and Energy Cost is separately billed or
metered or paid for directly by any Building tenant, to include but
not be limited to Lessee, or for which Lessor receives reimbursements,
said space shall be considered vacant space for purposes of the
aforesaid adjustment.
26. LESSEE'S ESTOPPEL. (A) Lessee shall, from time to time, within ten
(10) days of Lessor's written request, execute, acknowledge and deliver to
Lessor a written statement certifying that the Lease is unmodified and in full
force and effect, or that the Lease is in full force and effect as modified and
listing the instruments of modification; the dates to which the Monthly Fixed
Basic Rent and Additional Rent and charges have been paid; and, to the best of
Lessee's knowledge, whether or not Lessor is in default hereunder, and if so,
specifying the nature of the default; and any other information which Lessor
shall reasonably request. It is intended that any such statement delivered
pursuant to this Section 26 may be relied on by a prospective purchaser of
Lessor's interest or mortgagee of Lessor's interest or assignee of any mortgage
of Lessor's interest.
(B) Lessee's failure to deliver such statement within five (5)
business days following notice from Lessor of Lessee's failure to do so pursuant
to Subsection 26(A) shall be conclusive upon Lessee that: (i) this Lease is in
full force and effect and not modified except as Lessor may represent; (ii) not
more than one (1) installment of Monthly Fixed Basic Rent has been paid in
advance; (iii) there are no such defaults; and (iv) notices to Lessee shall be
sent to Lessee's mailing address as set forth in this Lease. Notwithstanding the
presumptions of this Section, Lessee shall not be relieved of its obligation to
deliver said statement.
27. HOLDOVER TENANCY. If Lessee holds possession of the Premises after
the Term of this Lease, Lessee shall become a tenant from month to month under
the provisions herein provided, but at a Monthly Fixed Basic Rent of one hundred
fifty (150%) percent of the Monthly Fixed Basic Rent for the last month of the
Term (as the same may have been extended pursuant to any option) and without the
requirement for demand or notice by Lessor to Lessee demanding delivery of
possession of said Premises (but
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Additional Rent shall continue as provided in this Lease), which sum shall be
payable in advance on the first day of each month, and such tenancy shall
continue until terminated by Lessor, or until Lessee shall have given to Lessor,
at least sixty (60) days prior to the intended date of termination, a written
notice of intent to terminate such tenancy, which termination date must be as of
the end of a calendar month. Lessee shall pay Term Fixed Basic Rent and
Additional Rent until such alterations and corrections as are required to be
made by Lessee are made, and until such additions and improvements as Lessee is
entitled to remove have been removed. Lessee shall also pay all damages
sustained by Lessor from any loss or liability resulting from such holding over
and delay in surrender. The time limitations described in this Section 27 shall
not be subject to extension for Force Majeure.
28. RIGHT TO SHOW PREMISES. Lessor may show the Premises to prospective
purchasers and mortgagees; and, during the six (6) months prior to termination
of this Lease, to prospective tenants, during Building Hours on reasonable
notice to Lessee.
29. CONDITION OF PREMISES. Lessee hereby acknowledges to Lessor that during
the Term hereof, Lessee is leasing the Premises in its "AS IS" condition. Lessor
shall cause to be performed any alterations to the Premises which are requested
by Lessee within the first three (3) months of the Term (the "Work"). Lessor
shall estimate the cost of the Work (without overhead, profit or interest) and
Lessee shall pay, upon receipt of an invoice therefor and prior to the
performance of the Work, the full amount of such estimate. Any cost of the Work
in excess of the cost estimated by Lessor shall be paid in full by Lessee, as
Additional Rent, within ten (10) days following receipt by Lessee of an invoice
from Lessor. Lessor agrees, upon request by Lessee, to provide Lessee with
evidence of the cost of the Work by means of either third-party invoices or
other reasonable means of independent verification.
30. WAIVER OF TRIAL BY JURY. To the extent such waiver is permitted by law,
the parties waive trial by jury in any action or proceeding brought in
connection with this Lease or the Premises.
31. LATE CHARGE. Lessee recognizes that late payment of any Term Fixed
Basic Rent or Additional Rent or other sum due hereunder will result in
administrative expense to Lessor, the extent of which additional expense is
extremely difficult and economically impractical to ascertain. Lessee therefore
agrees that if Monthly Fixed Basic Rent or Additional Rent or any other sum is
due and payable pursuant to this Lease, and such amount remains due and unpaid
ten (10) days after said amount is due, such amount shall be increased by a late
charge in an amount equal to the greater of: (a) Fifty and 00/100 ($50.00)
Dollars; or (b) a sum equal to five (5%) percent of the unpaid Monthly Fixed
Basic Rent or Additional Rent or other payment. The amount of the late charge to
be paid by Lessee shall be reassessed and
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added to Lessee's obligation for each successive monthly period until paid. The
provisions of this Section 31 in no way relieve Lessee of the obligation to pay
Term Fixed Basic Rent or Additional Rent or other payment on or before the date
on which they are due nor do the terms of this Section 31 in any way affect
Lessor's remedies pursuant to Section 14 in the event said Term Fixed Basic Rent
or Additional Rent or other payment is unpaid after date due.
32. INSURANCE.
(A) Lessee's Insurance.
(1) Lessee covenants and represents, said representation being
specifically designed to induce Lessor to execute this Lease, that
during the entire Term hereof, at its sole cost and expense, Lessee
shall obtain, maintain and keep in full force and effect the following
insurance:
(a) "All Risk" property insurance against fire, theft, vandalism,
malicious mischief, sprinkler, leakage and such additional perils as
are now, or hereafter may be, included in a standard extended coverage
endorsement from time to time in general use in the State of New
Jersey upon property of every description and kind owned by Lessee or
under Lessee's care, custody or control and located in the Building,
Complex or Parcel or for which Lessee is legally liable or installed
by or on behalf of Lessee, including by way of example and not by way
of limitation, furniture, fixtures, fittings, installations and any
other personal property in an amount equal to the full replacement
cost thereof.
(b) Comprehensive General Liability Insurance coverage to include
personal injury, bodily injury, broad form property damage, operations
hazard, owner's protective coverage, contractual liability, products
and completed operations liability naming Lessor and Lessor's
mortgagee or trust deed holder and ground lessors (if any) as
additional named insureds in limits of not less than One Million and
00/100 ($1,000,000.00) Dollars.
(c) Business interruption insurance in such amounts as will
reimburse Lessee for direct or indirect loss of earnings attributable
to all perils commonly insured against by prudent tenants or assumed
by Lessee pursuant to this Lease or attributable to prevention or
denial of access to the Premises, Building, Complex or Parcel as a
result of such perils.
(d) Workers' Compensation insurance in form and amount as
required by law.
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(e) Business auto liability covering owned, non-owned and hired
vehicles with a limit of not less than One Million and 00/100
($1,000,000.00) Dollars per accident.
(f) Any other form or forms of insurance or any increase in the
limits of any of the aforesaid enumerated coverages or other forms of
insurance as Lessor or the mortgagees or ground lessors (if any) of
Lessor may reasonably require from time to time if in the reasonable
opinion of Lessor or said mortgagees or ground lessors said coverage
and/or limits become inadequate or less than that commonly maintained
by prudent tenants in similar buildings in the area by tenants making
similar uses.
(2) All insurance policies required pursuant to this Section 32
shall be taken out with insurers rated at least A+XV by A.M. Best
Company, Oldwick, New Jersey, who are licensed to do business in the
State and shall be in form satisfactory from time to time to Lessor. A
policy or certificate evidencing such insurance together with a paid
bill shall be delivered to Lessor not less than fifteen (15) days
prior to the commencement of the Term hereof. Such insurance policy or
certificate will provide an undertaking by the insurers to notify
Lessor and the mortgagees or ground lessors (if any) of Lessor in
writing not less than thirty (30) days prior to any material change,
reduction in coverage, cancellation, or other termination thereof.
Should a certificate of insurance initially be provided a policy shall
be furnished by Lessee within thirty (30) days of the Term's
commencement. The aforesaid insurance shall be written with no
deductible.
(3) In the event of damage to or destruction of the Building
and/or Premises entitling Lessor or Lessee to terminate this Lease
pursuant to Section 10 hereof, and if this Lease be so terminated,
Lessee will immediately pay to Lessor all of its insurance proceeds,
if any, relating to the leasehold improvements and alterations (but
not Lessee's trade fixtures, equipment, furniture or other personal
property of Lessee in the Premises) which have become Lessor's
property on installation or would have become Lessor's property at the
Term's expiration or sooner termination. If the termination of the
Lease, at Lessor's election, is due to damage to the Building, and if
the Premises have not been so damaged, Lessee will deliver to Lessor,
in accordance with the provisions of this Lease, the improvements and
alterations to the Premises which have become on installation or would
have become at the Term's expiration, Lessor's property.
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(4) Lessee agrees that it will not keep or use or offer for sale
(if sales of goods is a permitted use pursuant to Section 4 hereof) in
or upon the Premises or within the Building, Complex or Parcel, any
article which may be prohibited by any insurance policy in force from
time to time covering the Building, Complex or Parcel. In the event
Lessee's occupancy or conduct of business in or on the Premises,
Building, Complex or Parcel, whether or not Lessor has consented to
the same, results in any increase in premiums for insurance carried
from time to time by Lessor with respect to the Building, Complex or
Parcel, Lessee shall pay such increase in premiums as Additional Rent
within ten (10) days after being billed therefor by Lessor. In
determining whether increased premiums are a result of Lessee's use
and occupancy, a schedule issued by the organization computing the
insurance rate on the Building, Complex or Parcel showing the
components of such rate shall be conclusive evidence of the items and
charges making up such rate. Lessee shall promptly comply with all
reasonable requirements of the insurance authority or of any insurer
now or hereafter in effect relating to the Premises, Building, Complex
or Parcel.
(5) If any insurance policy carried by either party as required
by this Section 32 shall be cancelled or cancellation shall be
threatened or the coverage thereunder reduced or threatened to be
reduced in any way by reason of the use or occupation of the Premises,
Building, Complex or Parcel or any part thereof by Lessee or any
assignee or sublessee of Lessee or anyone permitted by Lessee to be
upon the Premises, and if Lessee fails to remedy the conditions giving
rise to said cancellation or threatened cancellation or reduction in
coverage on or before the earlier of (i) forty-eight (48) hours after
notice thereof from Lessor, or (ii) prior to said cancellation or
reduction becoming effective, Lessee shall be in default hereunder and
Lessor shall have all of the remedies available to Lessor pursuant to
this Lease.
(B) Lessor's Insurance. Lessor covenants and agrees that throughout the
Term it will insure the Building [excluding any property with respect to which
Lessee is obligated to insure pursuant to Subsection 32(A)(1)(a) above] against
damage by fire and standard extended coverage perils and public liability
insurance in such reasonable amounts with such reasonable deductibles as
required by any mortgagee or ground lessor, or if none, as would be carried by a
prudent owner of a similar building in the area. In addition, Lessor shall
maintain and keep in force and effect during the Term, rental income insurance
insuring Lessor against abatement or loss of Term Fixed Basic Rent, including
items of Additional Rent, in case of fire or
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other casualty similarly insured against, in an amount at least equal to the
Term Fixed Basic Rent and Additional Rent during, at the minimum, one (1) Lease
Year hereunder. Lessor may, but shall not be obligated to, take out and carry
any other forms of insurance as it or the mortgagee or ground lessor (if any) of
Lessor may require or reasonably determine available. All insurance carried by
Lessor on the Building, Complex or Parcel shall be included as an Operating Cost
pursuant to Subsection 25(A). Notwithstanding its inclusion as an Operating Cost
or any contribution by Lessee to the cost of insurance premiums by Lessee as
provided herein, Lessee acknowledges that it has no right to receive any
proceeds from any such insurance policies carried by Lessor. Lessee further
acknowledges that the exculpatory provisions of this Lease as set forth in
Section 39 and the provisions of this Section 32 as to Lessee's insurance are
designed to insure adequate coverage as to Lessee's property and business
without regard to fault and avoid Lessor obtaining similar coverage for said
loss for its negligence or that of its agents, servants or employees which could
result in additional costs includable as part of Operating Costs which are
payable by Lessee. Lessor will not carry insurance of any kind on Lessee's
furniture or furnishings, or on any fixtures, equipment, appurtenances or
improvements of Lessee under this Lease and Lessor shall not be obligated to
repair any damage thereto or replace the same.
(C) Waiver of Subrogation. Any policy or policies of fire,
extended coverage or similar casualty insurance, which either party obtains in
connection with the Premises, Building, Complex or Parcel shall include a clause
or endorsement denying the insurer any rights of subrogation against the other
party (i.e. Lessor or Lessee) for all perils covered by said policy. Should such
waiver not be available, then the policy for which the waiver is not available
must name the other party as an additional named insured affording it the same
coverage as that provided the party obtaining said coverage.
33. NO OTHER REPRESENTATIONS. No representations or promises shall be
binding on the parties hereto except those representations and promises
contained herein or in some future writing signed by the party making such
representation(s) or promise(s).
34. QUIET ENJOYMENT. Lessor covenants that if, and so long as, Lessee pays
the Term Fixed Basic Rent and any Additional Rent as herein provided, and
performs the covenants hereof, Lessor shall do nothing to affect Lessee's right
to peaceably and quietly have, hold and enjoy the Premises for the Term herein
mentioned, subject to the provisions of this Lease and to any mortgage or deed
of trust to which this Lease shall be subordinate.
35. INDEMNITY. Lessee shall indemnify and save harmless Lessor and its
agents against and from (a) any and all claims (i) arising from (x) the conduct
or management by Lessee, its
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subtenants, licensees, its or their employees, agents, contractors or invitees
on the Demised Premises or of any business therein, or (y) any work or thing
whatsoever done, or any condition created (other than by Lessor for Lessor's or
Lessee's account) in or about the Demised Premises during the Term of this Lease
or during the period of time, if any, prior to the Commencement Date that Lessee
may have been given access to the Demised Premises, or (ii) arising from any
negligent or otherwise wrongful act or omission of Lessee or any of its
subtenants or licensees or its or their employees, agents, contractors or
invitees, and (b) all costs, expenses and liabilities incurred in or in
connection with each such claim or action or proceeding brought thereon. In case
any action or proceeding be brought against Lessor by reason of any such claim,
Lessee, upon notice from Lessor, shall resist and defend such action or
proceeding. The provisions of this Section 35 shall survive the expiration or
sooner termination of this Lease.
36. RULES OF CONSTRUCTION/APPLICABLE LAW. Any table of contents,
captions, headings and titles in this Lease are solely for convenience of
reference and shall not affect its interpretation. This Lease shall be construed
without regard to any presumption or other rule requiring construction against
the party causing this Lease to be drafted. If any words or phrases in this
Lease shall have been stricken out or otherwise eliminated, whether or not any
other words or phrases have been added, this Lease shall be construed as if the
words or phrases so stricken out or otherwise eliminated were never included in
this Lease no implication or inference shall be drawn from the fact that said
words or phrases were so stricken out or otherwise eliminated. Each covenant,
agreement, obligation or other provision of this Lease on Lessee's part to be
performed, shall be deemed and construed as a separate and independent covenant
of Lessee, not dependent on any other provision of this Lease. All terms and
words used in this Lease, regardless of the number or gender in which they are
used, shall be deemed to include any other number and any other gender as the
context may require. This Lease shall be governed and construed in accordance
with the laws of the State of New Jersey (excluding New Jersey conflict of laws)
and by the State courts of New Jersey. If any of the provisions of this Lease,
or the application thereof to any person or circumstances, shall to any extent
be invalid or unenforceable, the remainder of this Lease, or the application of
such provision or provisions to persons or circumstances other than those as to
whom or which it is held invalid or unenforceable, shall not be affected
thereby, and every provision of this Lease shall be valid and enforceable to the
fullest extent permitted by law.
37. APPLICABILITY TO HEIRS AND ASSIGNS. The provisions of this Lease
shall apply to, bind and inure to the benefit of Lessor and Lessee, and their
respective heirs, successors, legal representatives and assigns. It is
understood that the term "Lessor" as used in this Lease means only the owner, a
mortgagee in possession or a term lessee of the Building, so that in the
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event of any sale of the Building or of any lease thereof, or if a mortgagee
shall take possession of the Premises, the Lessor named herein shall be and
hereby is entirely freed and relieved of all covenants and obligations of Lessor
hereunder accruing thereafter, and it shall be deemed without further agreement
that the purchaser, the term lessee of the Building, or the mortgagee in
possession has assumed and agreed to carry out any and all covenants and
obligations of Lessor hereunder.
38. PARKING. Lessor agrees that Lessee, its employees, agents,
permitted subtenants, customers and invitees shall be entitled, in the
aggregate, to the use of those parking spaces as enumerated on the Reference
Page, from time to time, as, when and where available in the parking areas
appurtenant to the Building. Lessor hereby expressly reserves the right, from
time to time, to change the area, level, location and arrangement of the parking
areas; to build multi-story parking facilities; to restrict parking by tenants
and to the occupants of the Building and their employees, agents, permitted
subtenants, customers and invitees; to enforce parking charges (by operation of
meters or otherwise); and to close temporarily all or any portion of the parking
areas or other common areas for the purpose of making repairs or changes thereto
and to discourage non-customer parking. If any vehicle of Lessee, or of any
subtenant, licensee, or concessionaire, or of their respective officers, agents
or employees, is parked in any part of the Common Facilities other than the
employee parking area(s) designated therefor by Lessor, Lessee shall pay to
Lessor such reasonable penalty as may be fixed by Lessor from time to time. All
amounts due under the provisions of this Section shall be deemed to be
Additional Rent. Lessee agrees promptly to execute Lessor's standard parking
agreement if, as and when promulgated by Lessor for use in connection with the
Building, provided that Lessee shall have been provided with a copy of such
agreement. Notwithstanding anything contained herein to the contrary, it is
understood and agreed that a gate-controlled area is utilized for covered
parking spaces. The spaces within said covered area shall not be specifically
assigned on an individual basis and those spaces enumerated on the Reference
Page as being covered shall be undercover but not specifically earmarked for
Lessee, said spaces to be available on a first come first serve basis to all
those entitled to covered spaces who have been assigned spaces within said area.
The total spaces available within said area shall equal the total number of
people with access to said area. Nothing contained herein shall be deemed to
impose any obligation on Lessor to police the parking area.
39. LESSOR'S EXCULPATION. Lessor shall not be liable to Lessee for any
property damage or business interruption loss or loss of profit suffered by
Lessee under any circumstances, including, but not limited to (i) that arising
from the negligence of Lessor, its agents, servants, invitees, contractors or
subcontractors, or from defects, errors or omissions in the construction or
design of the Premises and/or the Building and/or the Complex and/or the Parcel
including the structural and
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nonstructural portions thereof; or (ii) for loss of or injury to Lessee or to
Lessee's property or that for which Lessee is legally liable from any cause
whatsoever, including but not limited to theft or burglary; or (iii) for that
which results from or is incidental to the furnishing of or failure to furnish
or the interruption in connection with the furnishing of any service which
Lessor is obligated to furnish pursuant to this Lease; or (iv) for that which
results from any inspection, repair, alteration or addition or the failure
thereof undertaken or failed to be undertaken by Lessor; or (v) for any
interruption to Lessee's business, however occurring. The aforesaid exculpatory
Section is to induce the Lessor, in its judgment, to avoid or minimize covering
risks which are better quantified and covered by Lessee either through insurance
(or self-insurance or combinations thereof if specifically permitted pursuant to
this Lease), thereby permitting potential cost savings in connection with the
Operating Costs borne by Lessee pursuant to Section 25.
40. COMMISSION. Lessee and Lessor represent and warrant one to the other
that the Brokers, as defined on the Reference Page, are the sole brokers with
whom either party has negotiated in bringing about this Lease and Lessee and
Lessor agree to indemnify and hold each other and Lessor's mortgagee(s) harmless
from any and all claims of other brokers and expenses in connection therewith
arising out of or in connection with any conduct inconsistent with the
representations tendered by one to the other herein. In no event shall Lessor's
mortgagee(s) have any obligation to any broker involved in this transaction. In
the event that no broker was involved as aforesaid, then Lessee and Lessor
represent and warrant one to the other that no broker brought about this
transaction, and Lessee and Lessor agree to indemnify and hold each other
harmless from any and all claims of any brokers arising out of or in connection
with any conduct inconsistent with the representations tendered by one to the
other herein.
41. RECORDATION. Lessee shall not record this Lease or a short form
memorandum hereof without the prior written consent of Lessor. If Lessee does
record this Lease or a short form memorandum without the prior written consent
of Lessor, it shall be considered a default under the Lease entitling the Lessor
to terminate the Lessee's occupancy.
42. NO OPTION. The submission of this Lease Agreement for examination does
not constitute a reservation of, or option for, the Premises, and this Lease
Agreement becomes effective as a Lease Agreement only upon execution and
delivery thereof by Lessor and Lessee.
43. DEFINITIONS. (A) Affiliate. Affiliate shall mean any corporation
related to Lessee as a parent, subsidiary or brother-sister corporation so that
such corporation and such party or such corporation and such party and other
corporations constitute a controlled group as determined under Section 1563 of
the Internal Revenue Code of 1986, as amended and as elaborated
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by the Treasury Regulations promulgated thereunder or any business entity in
which Lessee has more than a fifty (50%) percent interest.
(B) Business Days and Building Hours. As used in this Lease,
the "Business Days" and the "Building Hours" shall be Monday through Friday,
8:00 a.m. to 6:00 p.m., and on Saturdays from 8:00 a.m. to 1:00 p.m., excluding
those Federal and/or State holidays observed by the employees of Lessor, except
that Common Facilities lighting in the Building, the Complex and Parcel shall be
maintained for such additional hours as, in Lessor's sole judgment, is necessary
or desirable to insure proper operation of the Building, the Complex and Parcel.
(C) Common Facilities. Common Facilities shall include, by way
of example and not by way of limitation, the parking areas; ingress and egress
areas to the Complex; lobby; elevator(s); public hallways; public lavatories;
all other general Building or Complex facilities that service all Building
tenants; air conditioning rooms; fan rooms; janitors' closets; electrical
closets; telephone closets; elevator shafts and machine rooms; flues; stacks;
pipe shafts and vertical ducts with their enclosing walls. Lessee's use of those
Common Facilities not open to all tenants is subject to Lessor's consent which
may be denied for any reason. Lessor may at any time close temporarily any of
the Common Facilities to make repairs or changes therein or to effect
construction, repairs or changes within the Building, Complex or Parcel, or to
discourage non-tenant parking or to prevent the dedication of the same, and may
do such other acts in and to any of the Common Facilities as in its judgment may
be desirable to improve the convenience thereof but shall always in connection
therewith endeavor to minimize any inconvenience to Lessee.
(D) Force Majeure. Force Majeure shall mean and include those
situations beyond either party's control, including by way of example and not by
way of limitation, acts of God; accidents; repairs; strikes; shortages of labor,
supplies or materials; inclement weather; or, where applicable, the passage of
time while waiting for an adjustment of insurance proceeds. Any time limits
required to be met by either party hereunder, whether specifically made subject
to Force Majeure or not, except those related to the payment of Term Fixed Basic
Rent or Additional Rent and except as to the time periods set forth in Section
27, shall, unless specifically stated to the contrary elsewhere in this Lease,
be automatically extended by the number of days by which any performance called
for is delayed due to Force Majeure.
(E) Lessee's Percentage. The parties agree that Lessee's
Percentage, as defined on the Reference Page, reflects and will be continually
adjusted to reflect the sum arrived at by dividing the gross square feet of the
area rented to Lessee (including an allocable share of all Common Facilities) as
set forth in Section 1 [the numerator], plus any additional gross
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square footage leased from time to time pursuant to this Lease, by the total
number of gross square feet of the Complex (or additional buildings that may be
constructed within the Parcel), [the denominator], measured outside wall to
outside wall less five (5%) percent vacancy allowance of the Complex. Lessor
shall have the right to make changes or revisions in the Common Facilities of
the Building or Complex so as to provide additional leasing area. Lessor shall
also have the right to construct additional buildings in the Parcel for such
purposes as Lessor may deem appropriate and subdivide the lands for that purpose
if necessary, and upon so doing, the Parcel shall become the subdivided lot on
which the Building in which the Demised Premises is located. If any service
provided for in Subsection 25(A) or any utility provided for in Subsection 25(B)
is separately billed or separately metered within the Building or within the
Complex, then the square footage so billed or metered shall be deemed vacant and
if applicable subject to the Occupancy Adjustment set forth in Subsection 25(H).
Lessee understands that as a result of changes in the layout of the Common
Facilities from time to time occurring due to, by way of example and not by way
of limitation, the rearrangement of corridors, the aggregate of all tenant
Building proportionate shares or complex proportionate shares may be equal to,
less than or greater than one hundred (100%) percent.
44. LEASE COMMENCEMENT. Notwithstanding anything contained herein to
the contrary, if Lessor, for any reason whatsoever, including Lessor's
negligence, cannot deliver possession of the Premises to Lessee at the
commencement of the agreed Term as set forth in Section 2, this Lease shall not
be void or voidable, nor shall Lessor be liable to Lessee for any loss or damage
resulting therefrom, but in that event, the Lease Term shall be for the full
Term as specified above to commence from and after the date Lessor shall have
delivered possession of the Premises to Lessee or from the date Lessor would
have delivered possession of the Premises to Lessee but for any reason
attributable to Lessee (herein the "Commencement Date") and to terminate
midnight of the Termination Date, and if requested by Lessor, Lessor and Lessee
shall, by a writing signed by the parties, ratify and confirm said commencement
and termination dates. Notwithstanding anything contained herein to the
contrary, if Lessor shall not have delivered possession of the Demised Premises
to Lessee on or before October 1, 1996 as such date may be extended for reasons
of Force Majeure, and provided the reason therefor has not been as a result of
Lessee's acts or omissions, then, and in such event, Lessee may cancel this
Lease upon thirty (30) days' notice to Lessor, which notice may be given on or
after November 1, 1996 (as such date may be extended for reasons of Force
Majeure), and unless Lessor delivers possession of the Demised Premises within
the aforesaid thirty (30) days (similarly extended for reasons of Force
Majeure), this Lease shall terminate upon the expiration of said thirty (30) day
period (as extended for Force Majeure if applicable) and the parties shall be
released herefrom.
45. NOTICES. Any notice by either party to the other shall
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be in writing and shall be deemed to have been duly given only if delivered
personally, sent by nationally recognized overnight courier service, or sent by
registered mail or certified mail in a postpaid envelope or by regulated carrier
service with return receipt addressed, if to Lessee, at the above-described
Building, with copy to David Pollak, Esq., Morgan Lewis & Bockius LLP, 101 Park
Avenue, New York, New York 10178; if to Lessor, at Lessor's address as set forth
above, with copy to Dollinger & Dollinger, P.A., 365 West Passaic Street,
Rochelle Park, New Jersey 07662, Attention: Martin E. Dollinger, Esq.; or to
either at such other address as Lessee or Lessor, respectively, may designate in
writing. Notice shall be deemed to have been duly given, if delivered
personally, on delivery thereof, and if mailed, upon the fifth (5th) day after
the mailing thereof.
46. ACCORD AND SATISFACTION. No payment by Lessee or receipt by Lessor
of a lesser amount than the Monthly Fixed Basic Rent and Additional Rent payable
hereunder shall be deemed to be other than a payment on account of the earliest
stipulated Monthly Fixed Basic Rent and Additional Rent, nor shall any
endorsement or statement on any check or any letter accompanying any check or
payment for Fixed Basic Rent or Additional Rent be deemed an accord and
satisfaction, and Lessor may accept such check or payment without prejudice to
Lessor's right to recover the balance of such Fixed Basic Rent and Additional
Rent or pursue any other remedy provided herein or by law.
47. EFFECT OF WAIVERS. No failure by Lessor or Lessee to insist upon
the strict performance of any covenant, agreement, term or condition of this
Lease, or to exercise any right or remedy consequent upon a breach thereof, and
no acceptance of full or partial Monthly Fixed Basic Rent or Additional Rent
during the continuance of any such breach, shall constitute a waiver of any such
breach or of such covenant, agreement, term or condition. No consent or waiver,
express or implied, by Lessor or Lessee to or of any breach of any covenant,
condition or duty of the other party shall be construed as a consent or waiver
to or of any other breach of the same or any other covenant, condition or duty,
unless in writing signed by the waiving party.
48. LESSOR'S RESERVED RIGHT. Lessor and Lessee acknowledge that the
Premises are in a Building which is not open to the general public. Access to
the Building is restricted to Lessor, Lessee, their agents, employees and
contractors and to their invited visitors. In the event of a labor dispute
including a strike, picketing, informational or associational activities
directed at Lessee or any other tenant, Lessor reserves the right unilaterally
to alter Lessee's ingress and egress to the Building or make any other change in
operating conditions to restrict pedestrian, vehicular or delivery ingress and
egress to a particular location.
49. ERISA REPRESENTATION. Lessee represents and warrants to Lessor to
the best of its knowledge that, as of the date hereof, neither Lessee nor any
affiliate of Lessee has employee
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pension or profit-sharing plans that hold, in the aggregate, beneficial
interests representing greater than five (5%) percent of the total assets of any
RREEF investment fund. Lessee acknowledges that a breach of the foregoing
representation and warranty may constitute a prohibited transaction under the
terms of the Employee Retirement Income Security Act of 1974 and the Internal
Revenue Code, as modified by PTE 82-51, an administrative exemption from certain
of the prohibited transaction rules granted to the RREEF Funds by the United
States Department of Labor [46 Fed. Reg. 14, 238 (April 2, 1982)]. If at any
time Lessee or any affiliate of Lessee has employee pension or profit-sharing
plans that hold, in the aggregate, beneficial interests representing greater
than five (5%) percent of the total assets of any RREEF investment fund, Lessee
shall promptly advise Lessor of such fact in writing.
50. RELOCATION BY LESSEE. Lessor hereby reserves the right, at its sole
expense and on at least ninety (90) days' prior written notice but not more than
once during the Term, to require Lessee to move from the Premises to other space
within the Complex of comparable size and decor in order to permit Lessor to
consolidate the space leased to Lessee with any other space leased or to be
leased provided, however, that in the event of receipt of any such notice,
Lessee, by written notice to Lessor, may elect not to move to the other space
and in lieu thereof terminate this Lease effective sixty (60) days after the
date of the original notice of relocation by Lessor. In the event Lessee elects
to terminate as aforesaid, Lessor shall have the option to withdraw its exercise
of the relocation option. In the event of any such relocation, Lessor will pay
all expenses of preparing and decorating the new premises so that they will be
substantially similar to the Premises from which Lessee is moving and Lessor
will also pay the expense of moving Lessee's furniture and equipment to the
relocated premises as well as the cost of installing telephone, internet and
computer wiring therein. In such event, this Lease and each and all of the
terms, covenants and conditions hereof, shall remain in full force and effect
and thereupon be deemed applicable to such new space except that the description
of the Premises shall be revised and if applicable Lessee's Percentage shall
likewise be revised.
51. CORPORATE AUTHORITY. If Lessee is a corporation, Lessee represents
and warrants that this Lease and the undersigned's execution of this Lease has
been duly authorized and approved by the corporation's Board of Directors. The
undersigned officers and representatives of the corporation executing this Lease
on behalf of the corporation represent and warrant that they are officers of the
corporation with authority to execute this Lease on behalf of the corporation,
and within fifteen (15) days of execution hereof, Lessee will provide Lessor
with a corporate resolution confirming the aforesaid.
52. NUMBER AND GENDER. The terms "Lessor" and "Lessee" or any pronoun
used in place thereof shall indicate and include Landlord and Tenant, the
masculine or feminine, the singular or
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plural number, individuals, firms or corporations, and their and each of their
respective successors, executors, administrators and permitted assigns,
according to the context hereof. In any case, where this Lease is signed by more
than one person, the obligations hereunder shall be joint and several.
53. LESSEE RESTRICTION. Lessee acknowledges that it has been advised by
Lessor that Lessor shall be precluded from permitting leases in the Building or
Complex to any cafeteria/restaurant operation including take-out service, coffee
wagon service, delivery service and/or catering service, and Lessee agrees that
Lessor's refusal to consent to any sublease or assignment proposed by Lessee to
any of the aforesaid entities shall not be considered unreasonable.
54. GOVERNMENT REQUIREMENTS. In the event of the imposition of Federal,
State, or local governmental control, rules, regulations, or restrictions on the
use or consumption of energy or other utilities or with respect to any other
aspect of this Lease during the Term, both Lessor and Lessee shall be bound
thereby. In the event of a difference in interpretation of any governmental
control, rule, regulation or restriction between Lessor and Lessee, the
interpretation of Lessor shall prevail, and Lessor shall have the right to
enforce compliance, including the right of entry into the Premises to effect
compliance.
55. CONTINGENCY. This Lease is hereby conditioned upon Lessor entering
into a surrender and acceptance agreement with the current tenant of the
Premises, which agreement shall be satisfactory to Lessor in its sole judgment,
failing which, at Lessor's option, this Agreement shall be deemed null and void
and of no further force or effect.
56. LIMITATION OF LESSOR'S LIABILITY. Notwithstanding anything to the
contrary provided in this Lease, it is specifically understood and agreed, such
agreement being a primary consideration for the execution of this Lease by
Lessor, that there shall be absolutely no personal liability on the part of
Lessor, its constituent members (to include but not be limited to officers,
directors, partners and trustees), their respective successors, assigns or any
mortgagee in possession (for the purposes of this Section, collectively referred
to as "Lessor"), with respect to any of the terms, covenants and conditions of
this Lease, and that Lessee shall look solely to the equity of Lessor in the
Building for the satisfaction of each and every remedy of Lessee in the event of
any breach by Lessor of any of the terms, covenants and conditions of this Lease
to be performed by Lessor, such exculpation of liability to be absolute and
without any exceptions whatsoever. A deficit capital account of any portion in
Lessor shall not be deemed an asset or property of Lessor. The foregoing
limitation of liability shall be noted in any judgment secured against Lessor
and in the judgment index.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
and seals the day and year first above written.
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GO AMERICA INC., Lessee RREEF USA FUND-I, a California
Group Trust, Lessor
BY: RREEF MANAGEMENT COMPANY, a
California Corporation
By: /s/ Aaron Dobrinsky By: /s/ Abby J. Mandel
_______________________ ___________________________
ABBY J. MANDEL,
Name: Aaron Dobrinsky District Manager
_____________________
Title: President
____________________
Dated: August 1, 1996 8/7/96
____________________ Dated:________________________
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EXHIBIT 10.15
FACILITIES MAINTENANCE AGREEMENT
This Facilities Maintenance Agreement ("Agreement") is made and entered into as
of December 13, 1999 ("Effective Date") by and between Data General A Division
of EMC Corporation, a Massachusetts corporation with a principal place of
business at 3400 Computer Drive, Westboro, Massachusetts 01580 (hereinafter
called "DG") and GoAmerica Communications Corporation, with a principal place of
business at 401 Hackensack Avenue, Hackensack, New Jersey 07601 (hereinafter
called "GoAmerica").
WHEREAS, DG and GoAmerica are entering into a lease agreement in which GoAmerica
will lease commercial space from DG; and
WHEREAS, DG agrees to perform certain services in such commercially leased space
and GoAmerica agrees to accept such services.
NOW THEREFORE, in consideration of the foregoing premises and the mutual
covenants herein contained, GoAmerica and DG hereby agree to be legally bound as
follows:
1. Definitions. As used in this Agreement, the following initially capitalized
-----------
terms, whether used in the singular or plural, shall have the respective
meanings set forth below:
"Confidential Information" shall mean any and all information or proprietary
materials (in every form and media) and which has been or is hereafter disclosed
or made available by GoAmerica to DG, including (i) all trade secrets, (ii)
existing or contemplated products, services, designs, technology, processes,
technical data, engineering, techniques, methodologies and concepts and any
information related thereto, and (iii) information relating to business plans,
sales or marketing methods and customer lists or requirements. Confidential
Information shall not include information which at the time of disclosure is
generally available to the public or after disclosure becomes generally
available to the public through no breach of this Agreement or other wrongful
act by DG.
"Data Center" means the commercially available space which is outlined in the
floor plan on Attachment A, which is hereby incorporated by reference, in the
building known as 55 Broad Street, lower level, in the Borough of Manhattan,
City of New York. During the Initial Term, as defined below, and any subsequent
term, GoAmerica will be the only tenant permitted to use the Data Center.
"Operations Manager" means an employee or agent of DG, approved by GoAmerica,
who will be located in the Data Center and who is responsible for providing the
Services to GoAmerica pursuant to this Agreement and who shall perform the
Services listed in Attachment B. If agreed upon in writing by the parties, the
Operations Manager may perform other types of services, not specified in
Attachment B and while performing such services, the Operations Manager shall
operate under the control and supervision of GoAmerica and DG shall not be
responsible for the actions or inaction of the Operations Manager.
<PAGE>
It is DG's intent to make Mr. Dominick Regina the Operations Manager for the
term of this Agreement. In the event that Mr. Regina ceases to be the Operations
Manager during the initial term or any subsequent term of this Agreement, DG
shall replace him with a suitably qualified individual capable to perform the
Services required pursuant to this Agreement. The replacement Operations Manager
shall be submitted to GoAmerica for its approval, which will not be unreasonably
withheld.
"Services" means the list of work specified in the DG's Responsibilities section
of Attachment B, which is hereby incorporated by reference. Such Services shall
include but are not limited to janitorial services, telephone services and
providing utilities for the Data Center.
2. Services.
--------
2.1 DG shall provide the Services that are listed in the DG's
Responsibilities section of Attachment B. DG shall use its best efforts to
perform the Services in a professional and timely manner and will promptly
notify GoAmerica if it is unable to perform or if the performance will be
delayed. If agreed upon in writing by the parties, DG may provide additional
services that are not listed in Attachment B. Prior to commencement, the parties
will also agree upon the time-frames, payment amounts and payment schedule for
such additional services.
2.2 The Operations Manager will be available from 9:00am - 5:00pm EST (or
EDT, as applicable) Mondays through Fridays. DG shall provide GoAmerica with a
pager or telephone number which GoAmerica may use to contact the Operations
Manager or a DG representative with a request and/or complaint during the hours
that the Operations Manager is not present at the Data Center. The Operations
Manager and/or DG representative will respond to a request and/or complaint by
GoAmerica within two (2) hours after receipt and will use best efforts to remedy
any problem.
2.3 DG's employee(s), including the Operations Manager, are not and shall
not be deemed to be employees of GoAmerica. DG shall be solely responsible for
the payment of all compensation to its employees, including provisions for
employment taxes, workmen's compensation and any similar taxes associated with
employment of DG's personnel. DG's employees shall not be entitled to any
benefits paid or made available by GoAmerica to its employees and if any DG
employees are found to be entitled to such benefits, those employees hereby
waive any right to such benefits. DG shall not permit any employees to provide
any Services without obtaining a written waiver to such benefits from the
employee.
GoAmerica's employees are not and shall not be deemed to be employees of DG.
GoAmerica shall be solely responsible for the payment of all compensation of its
employees, including provisions for employment taxes, workman's compensation and
any similar taxes associated with employment of GoAmerica's personnel.
GoAmerica's employees shall not be entitled to any benefits paid or made
available by DG to its employees and if any GoAmerica employees are found to be
entitled to such benefits,
-2-
<PAGE>
those employees hereby waive any right to such benefits. GoAmerica shall not
permit any employees to work in the Data Center without obtaining a written
waiver to such benefits from the employee.
2.4 All consents or approvals necessary to allow GoAmerica to use the Data
Center, any equipment to be provided by DG under the Master Lease Agreement, as
defined in Section 10, and the Services shall be obtained by DG. DG shall be
solely responsible for paying the costs of obtaining any such consents or
approvals.
3. Payment Terms. GoAmerica shall make payments for Services listed in
-------------
Attachment C in accordance with the payment terms set forth in the Master Lease
Agreement. For the services/charges set forth in Attachment C-1, DG will invoice
GoAmerica on a monthly basis for the expenses incurred by GoAmerica during the
preceding month. If agreed upon in writing by both parties, DG may provide
additional services not listed in Attachments B, C or C-1, the parties shall
also agree upon the time-frames, payment amounts and payment schedules for such
additional services.
4. Confidentiality.
---------------
4.1 DG acknowledges that DG may receive Confidential Information from
GoAmerica during the term of this Agreement. DG shall not disclose the
Confidential Information to any person or entity other than employees of DG who
have a need to know the Confidential Information for the purpose of this
Agreement. DG shall treat Confidential Information as it does its own valuable
and sensitive information of a similar nature, and, in any event, with not less
than reasonable care. Upon GoAmerica's request or the termination or expiration
of this Agreement, DG shall return or destroy the Confidential Information and
provide written document certifying the destruction of all Confidential
Information within ten (10) days of destruction of the Confidential Information.
4.2 Failure on the part of DG to abide by this Section 4 may cause
GoAmerica irreparable harm for which damages, although available, may not be an
adequate remedy at law. Accordingly, GoAmerica has the right, in addition to
other remedies in law or equity, to seek an injunction to prevent any further
violations of this Section 4 and recover court costs and reasonable attorney
fees incurred by GoAmerica in the enforcement of this Section 4.
5. Ownership. GoAmerica shall be the sole owner and have title to any
---------
equipment ("Equipment") it brings to the Data Center or purchases during the
Initial Term, as defined below, or any subsequent term. Further, GoAmerica shall
be the owner or licensee of various types of software ("Software") it brings to
the Data Center or it purchases, creates or licenses during the Initial Term or
any subsequent term. The Software and Equipment shall collectively be referred
to as "GoAmerica Materials". GoAmerica Materials do not include products listed
in the Master Lease Agreement or DG materials purchased by DG or brought into
the Data Center by DG. DG acknowledges GoAmerica's right and title, as
applicable, to the GoAmerica Materials and
-3-
<PAGE>
further acknowledges that DG has no right or title to the GoAmerica Materials.
6. Warranty.
--------
6.1 DG warrants and represents that DG has the right to enter into this
Agreement and that the Services will be performed in a timely and professional
manner in accordance with industry standards for such services by persons
qualified by skill, training and experience.
6.2 The foregoing warranties are the only warranties given under this
Agreement. DG disclaims all other warranties, including any implied warranties
of merchantability and fitness for a particular purpose.
7. Limitation of Liability.
-----------------------
7.1 DG's aggregate liability for any claims arising from this Agreement
shall not exceed two (2) times the total actual amounts paid by GoAmerica for
such Services to DG during the immediately preceding twelve (12) month period
prior to the claim that gave rise to the damages.
7.2 GoAmerica's aggregate liability for any claims arising from this
Agreement shall not exceed two (2) times the total actual amounts paid by
GoAmerica for such Services to DG during the immediately preceding twelve (12)
month period prior to the claim that gave rise to the damages.
7.3 IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER OR ANY OTHER
PERSON OR ENTITY FOR SPECIAL, INCIDENTAL, CONSEQUENTIAL OR EXEMPLARY DAMAGES
(INCLUDING, BUT NOT LIMITED TO, LOSS OF PROFITS, LOSS OF DATA OR LOSS OF USE
DAMAGES) ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, THE SALE,
LICENSING OR LEASE OF EQUIPMENT OR SOFTWARE OR THE PROVISION OF SERVICES, EVEN
IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR LOSSES.
8. Indemnification.
---------------
8.1 DG shall indemnify, defend and hold harmless, GoAmerica, its agents,
officers and employees against any and all liability, loss, damages, penalties,
costs or expenses for personal injury or damage to real or tangible personal
property which GoAmerica may sustain, incur or be required to pay, resulting
from, arising out of, or in connection with the Services performed or delivered
under this Agreement by reason of acts, inactions, omissions, negligence,
reckless or intentional misconduct of DG, its agent(s), officers, employees or
subcontractors; provided that DG is notified of any claim within a reasonable
time after GoAmerica has actual knowledge of such claim.
8.2 GoAmerica shall indemnify, defend and hold harmless, DG, its agents,
officers
-4-
<PAGE>
and employees against any and all liability, loss, damages, penalties, costs or
expenses for personal injury or damage to real or tangible personal property
which DG may sustain, incur or be required to pay, resulting from, arising out
of, or in connection this Agreement by reason of acts, inactions, omissions,
negligence, reckless or intentional misconduct of GoAmerica, its agents(s)
officers, employees or subcontractors, provided that GoAmerica is notified of
any claim within a reasonable time after DG has actual knowledge of such claim.
9. Compliance with Laws/Data Center Lease. DG shall comply with all
--------------------------------------
applicable laws, rules, regulations, ordinances, orders or requirements of the
State of New York and any governmental authority relating to the delivery of the
Services specified in this Agreement. GoAmerica may require DG to pay fines,
penalties, and damages that may arise out of or may be imposed because of DG's
breach or failure to comply with the provisions of this Agreement. GoAmerica
will comply with all of the terms and conditions of the Agreement of Lease
between 55 Broad Street Company and DG, dated November 19, 1997 governing use,
occupancy, renovations, etc. ("Data Center Lease"). A copy of the Data Center
Lease has been provided to GoAmerica. GoAmerica shall at all times have the
right to enter and use the Data Center and that DG shall pass through to
GoAmerica, DG's rights under Article 22 of the Data Center Lease.
10. Lease Agreement. Simultaneously with the execution of this Agreement, the
---------------
parties will execute the "Master Lease Agreement" attached hereto as Attachment
D which is hereby incorporated by reference.
11. Term.
----
11.1 The term of this Agreement shall run from the Effective Date until
June 30, 2003 ("Initial Term"), unless this Agreement is terminated in
accordance with this Section 11. The Agreement may be extended thereafter by the
written consent of both parties on terms mutually agreeable to both parties.
Negotiations for a renewal, if any, should commence no later than October 15,
2002.
11.2 Failure to make the payments set forth in the Lease Schedule of
the Master Lease Agreement shall be governed by the terms and conditions set
forth in the Master Lease Agreement.
11.3 Either party may immediately terminate this Agreement (but not the
Master Lease Agreement) by giving written notice to the other party: (i) if the
other party is in breach of its material obligations hereunder and has not cured
such breach within one hundred eighty (180) days after receiving written notice
from the non-breaching party requesting cure of the breach; or (ii) upon the
filing or institution of bankruptcy, reorganization, liquidation or receivership
proceedings, or upon an assignment of a substantial portion of the assets for
the benefit of creditors by the other party, or in the event a receiver or
custodian is appointed for such party's business, or if a substantial portion of
such party's business is subject to attachment or similar process; provided,
however, that in the case of any involuntary bankruptcy proceeding such right to
-5-
<PAGE>
terminate shall only become effective if the proceeding is not dismissed within
sixty (60) days after the filing thereof.
11.4 DG shall provide GoAmerica with termination assistance, at no charge,
for up to three (3) months after termination of this Agreement, other than for
material breach by GoAmerica. Termination assistance shall include but not be
limited to allowing GoAmerica access to the Data Center to fully remove the
GoAmerica Materials and permit GoAmerica to keep the GoAmerica Materials at the
Data Center until GoAmerica has found a suitable replacement facility for the
GoAmerica Materials or three (3) months, which is earlier. During the
termination assistance period, the terms and conditions of this Agreement shall
govern the relationship between the parties.
12. Insurance. DG acknowledges and agrees that it shall maintain, in full
---------
force and effect, adequate insurance to cover DG's obligations under this
Agreement. DG shall provide GoAmerica with evidence of such insurance upon
GoAmerica's request which may be made once per year.
GoAmerica acknowledges and agrees that it shall maintain, in full force and
effect, adequate insurance (property and liability) to cover its occupancy of
the Data Center, GoAmerica's Materials located in the Data Center and use
thereof.
13. Force Majeure/Contingency Planning.
-----------------------------------
13.1 Neither party shall be liable to the other or be deemed to be in
breach of this Agreement for any failure or delay in rendering performance
arising out of causes beyond its reasonable control and without its fault or
negligence. Such causes may include, but are not limited to, acts of God or of a
public enemy, fires, floods, epidemics, quarantine restrictions, strikes,
freight embargoes, or unusually severe weather.
13.2 Although not part of this Agreement, GoAmerica has indicated that
GoAmerica plans to develop a Data Center contingency plan. The Operations
Manager, at GoAmerica's request, will assist in the development of such a plan
as it relates to the Data Center environmental systems in Attachment B and other
building resources. Any resources or expense required beyond the Operation
Manager's time will be a chargeable effort.
14. Miscellaneous.
-------------
14.1 The rights and obligations of both parties under this Agreement are
personal and neither this Agreement or any of the Services to be provided under
this Agreement shall be assigned, delegated or otherwise transferred without the
prior written consent of the other party. Any such assignment, delegation or
other transfer shall be null and void and this Agreement shall immediately
terminate.
14.2 Any delay or failure in enforcing a party's rights under this
Agreement or any waiver as to a particular default or other matter shall not
constitute a waiver of such
-6-
<PAGE>
party's rights to the future enforcement of its rights under this Agreement, nor
operate to bar the exercise or enforcement thereof at any times thereafter.
14.3 Should any provision of this Agreement be held to be void or
unenforceable, the remaining provisions shall remain in full force and effect,
to be read and construed as if the void or unenforceable provisions were
originally deleted.
14.4 Nothing herein contained shall be deemed to create an employment,
agency, joint venture or partnership relationship between the parties hereto.
Neither party shall have any power to enter into contracts or commitments or to
incur liabilities in the name of, or on behalf of, the other party, or to bind
the other party in any respect whatsoever.
14.5 This Agreement and all attachments hereto constitute the complete and
exclusive statement of the agreement between the parties and supersedes all
prior agreements, whether written or oral, between the parties relating to the
subject matter herein. Subject to Section 10, in the event of any conflict
between any attachments and this Agreement, the terms of this Agreement shall
control.
14.6 Any notice required or permitted to be given or sent under this
Agreement shall be hand delivered or sent by express delivery services or
certified or registered mail, postage prepaid, or by facsimile transmission
(with written confirmation copy by registered first-class mail) to the parties
at the addresses and facsimile numbers indicated below.
If to DG: Data General
Park 80 West
Saddle Brook, NJ 07663
Attn.: Angelo J. Perri
Fax No.: (201) 587-9009
If to GoAmerica: GoAmerica Communications Corporation
401 Hackensack Avenue
Hackensack, New Jersey 07601
Attn.: Mr. Frank J. Elenio
Fax No.: (201) 996-1772
14.7 This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts without regard to the conflict of
laws provisions.
14.8 Any dispute, controversy or claim arising out of this Agreement (but
excluding the Master Lease Agreement) or a breach hereof, including its
interpretation, performance or termination, which can not be settled by
negotiations by the parties, shall be finally resolved by arbitration. The
arbitration shall be conducted by one (1) arbitrator appointed jointly by DG and
GoAmerica or, if they cannot agree, by the President of the American Arbitration
Association ("AAA"). The arbitration shall be conducted in
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<PAGE>
accordance with the commercial rules of the AAA. The arbitration, including the
rendering of the award, shall take place in Boston, Massachusetts, USA and shall
be the exclusive forum for resolving such dispute, controversy or claim. The
decision of the arbitrator shall be binding upon the parties hereto, and the
expense of the arbitration (including without limitation the award of reasonable
attorney's fees to the prevailing party) shall be allocated as determined by the
arbitrator. The decision of the arbitrator shall be executory, and judgement
thereon may be entered by any court of competent jurisdiction.
14.9 Sections 4, 5, 7 and 14 shall survive expiration or termination of
this Agreement for any reason.
15. Equipment Infrastructure. If agreed upon by both parties, in writing,
------------------------
the Data Center will be stocked with DG servers and network equipment purchased
and installed by DG. DG has the right to provide GoAmerica with a price quote
for various pieces of equipment, provided, however, GoAmerica is under no
obligation to purchase any equipment from DG.
***********
-8-
<PAGE>
IN WITNESS WHEREOF, this Agreement has been executed by the duly authorized
representatives of the parties as of the Effective Date.
Data General A Division of GoAmerica Communications
EMC Corporation Corporation
By: /s/ Angelo J. Perri By: /s/ Jesse Odom
----------------------- ----------------------
Name: Angelo J. Perri Name: Jesse Odom
--------------------- --------------------
Title: Director Title: VP
-------------------- -------------------
-9-
<PAGE>
ATTACHMENT A
DATA CENTER FLOOR PLAN
<PAGE>
ATTACHMENT B
------------
DG's Responsibilities:
Facilities:
. Provide a Data Center that will be available twenty four (24) hours a day,
seven (7) days a week to GoAmerica personnel and/or its agents and
GoAmerica's personnel and/or its agents shall at all times have the right
to enter and use the Data Center
. Ensure that all Data Center environmental systems, listed below, are
functioning properly and undergo regularly scheduled maintenance
. Provide standard janitorial services in the Data Center
. Provide a telephone and voice mail system in the Data Center (does not
include local or long distance usage charges which are the responsibility
of GoAmerica)
. Provide utilities (electricity, water, heat, air conditioning) to the Data
Center
. DG is not responsible for data network infrastructure or telephone data
circuits. GoAmerica may utilize the existing infrastructure, however it is
on an "as is" basis and DG makes no representations regarding the existing
infrastructure. In the event that GoAmerica decides to utilize either the
data network infrastructure or telephone data circuits, repair, upgrade,
maintenance will be GoAmerica's responsibility.
Operations Manager:
. Assign a skilled and knowledgeable Operations Manager who will be
responsible for providing the Services set forth in this Agreement
. The Operations Manager will be available to assist GoAmerica with other
aspects of running the Data Center pursuant to the terms specified in
Section 1. Some of the other services the Operations Manager may assist
GoAmerica with, at GoAmerica's request, will be:
1. Develop implementation schedule and operations planning documents
necessary to perform Data Center operations, as requested by GoAmeric
2. Notify GoAmerica of project schedule changes and, with GoAmerica,
determine staffing and financial impact of changes, if any
3. Execute accepted implementation plans
4. Maintain documentation, with input from GoAmerica, related to the
operation of the Data Center hosted administrative applications
5. Assist in the development of a Data Center contingency plan
Environmental Systems:
. (2) 10-ton Liebert air conditioning units,
. (1) 80 KVA UPS unit,
. (1) 250 KVA diesel generator,
. (1) Card access security system with office and computer room zones, and
. (1) Computer room preaction fire suppression system.
<PAGE>
ATTACHMENT C
<TABLE>
<CAPTION>
Recurring Operational Expenses
Staffing
<S> <C>
Operations Manager (240 days per year) $15,000
Subtotal - Staffing $15,000
Utilities (Includes Facilities Usage charge, Electric, Janitorial, Water, phone system, diesel generator $16,206
fee, insurance)
Maintenance and Repairs
(Includes Fire Suppression, UPS, A/C, A/C water charge, generator, Fire dept. permits, security) $ 789
Total Monthly Recurring Cost: $31,995
</TABLE>
ATTACHMENT C-1
--------------
ALL CHARGES LISTED IN THIS ATTACHMENT C-1 WILL CONTAIN AN ADMINISTRATIVE
HANDLING FEE OF FIFTEEN PERCENT (15%).
. Monthly Telephone Charges incurred by GoAmerica for telephone line usage,
local and long distance lines and charges.
Upon mutual agreement of the parties, additional services may be added,
provided, however, if GoAmerica purchases services provided by DG in DG's
ordinary course of business and such services are purchased via a purchase
order, GoAmerica will not be assessed an administrative handling fee.
<PAGE>
ATTACHMENT D
------------
MASTER LEASE AGREEMENT
----------------------
<PAGE>
EXHIBIT 10.16
EXECUTION COPY
==================================================================
======================================
REGISTRATION RIGHTS AGREEMENT
======================================
between
GOAMERICA COMMUNICATIONS CORP.
and
the INVESTORS
named herein
Dated as of October 15, 1996
==================================================================
<PAGE>
REGISTRATION RIGHTS AGREEMENT, dated as of October 15, 1996, between
GOAMERICA COMMUNICATIONS CORP., a Delaware corporation (the "Company"), and the
Investors set forth on Exhibit A (the "Investors").
---------
In consideration of the mutual agreements hereinafter set forth, the
parties agree as follows:
1. Background. Pursuant to a Stock Purchase Agreement, dated as of
----------
October 15, 1996 (the "Purchase Agreement"), between the Investors and the
Company, the Investors have agreed to purchase from the Company an aggregate of
200 shares of the Company's Common Stock, par value $1.00 per share (the
"Shares").
2. Definitions. Unless otherwise defined in context or the context
-----------
otherwise requires, capitalized terms used herein are defined on Schedule 1
hereto, which Schedule is incorporated herein by reference and made a part
hereof. Such terms shall be applicable to both the singular and plural forms of
any of the terms herein defined.
3. Registration Rights.
-------------------
3.1 Registration on Request.
-----------------------
(a) Request. Subject to Sections 3.6 and 3.8 hereof, at any time,
-------
and on not more than two (2) occasions, beginning on the date six months after
the closing of an initial public offering of equity securities of the Company,
upon the written request of the Investors or one or more holders (collectively,
the "Initiating Holders") of Registrable Securities representing not less than
fifty percent (50%) of the Registrable Securities, that the Company effect the
registration under the Securities Act of all or part of such Initiating Holders'
Registrable Securities, the Company shall promptly give written notice of such
requested registration to all holders of Registrable Securities, and thereupon
the Company shall use its best efforts to effect the registration under the
Securities Act, of:
(i) the Registrable Securities which the Company has been so
requested to register by such Initiating Holders, and
(ii) all other Registrable Securities which the Company has
been requested to register by the holders thereof (such holders together with
the Initiating Holders, the "Selling Holders") by written request given to the
Company within 30 days after the giving of such written notice by the Company,
all to the extent requisite to permit the disposition of the Registrable
Securities so to be registered.
(b) Registration of Other Securities. Whenever the Company shall
--------------------------------
effect registration pursuant to this Section 3.1 in connection with an
underwritten offering by one or more Selling Holders of Registrable Securities,
subject to Section 3.1(g) hereof, securities other than Registrable Securities
may be included among the securities covered by such registration.
<PAGE>
(c) Registration Statement Form. Registrations under this Section
---------------------------
3.1 shall be on such appropriate registration form of the Commission as shall be
selected by the Company.
(d) Expenses. The Company will pay the Registration Expenses in
--------
connection with any registration requested pursuant to this Section 3.1.
(e) Effective Registration Statement. A registration requested
--------------------------------
pursuant to this Section 3.1 shall not be deemed to have been effected (i)
unless a registration statement with respect thereto has become effective, (ii)
if after it has become effective, such registration is interfered with by any
stop order, injunction or other order or requirement of the Commission or other
governmental agency or court for any reason not primarily attributable to the
Selling Holders and has not thereafter become effective or (iii) the conditions
to closing specified in the underwriting agreement, if any, entered into in
connection with such registration are not satisfied or waived, other than by
reason of a failure on the part of the Selling Holders.
(f) Selection of Underwriters. If the registration under this
-------------------------
Section 3.1 is in connection with an underwritten offering, the underwriter or
underwriters of each underwritten offering of the Registrable Securities so to
be registered shall be selected by the Company.
(g) Priority in Requested Registration. Notwithstanding anything
----------------------------------
in this Section 3.1 to the contrary, if the managing underwriter of any
underwritten offering shall advise the Company in writing (with a copy to each
Selling Holder) that, in its opinion, the number of securities requested to be
included in such registration exceeds the number which can be sold in such
offering within a price range acceptable to the Selling Holders of 66-2/3% of
the Registrable Securities requested to be included in such registration, then
the Company shall include in such registration, to the extent of the number
which the Company is so advised can be sold in (or during the time of) such
offering, first, Registrable Securities requested to be included in such
registration, pro rata among the Selling Holders requesting such registration on
the basis of the percentage of the Registrable Securities of such Selling
Holders requested so to be registered and, second, all other securities of the
Company requested to be included in such registration by any person other than a
Selling Holder (including the Company).
(h) Limitations on Registration on Request. Notwithstanding
--------------------------------------
anything in this Section 3.1 to the contrary, in no event will the Company be
required to effect in the aggregate, without regard to the holder of Registrable
Securities making such request, more than two registrations pursuant to this
Section 3.1.
3.2 Incidental Registration.
-----------------------
(a) Right to Include Registrable Securities. If the Company
---------------------------------------
proposes to register any of its securities under the Securities Act by
registration on Form S-1, S-2 or S-3 or any successor or similar form(s) (except
registrations on such Forms or similar form(s) solely for registration of
securities in connection with an employee benefit plan or dividend reinvestment
-2-
<PAGE>
plan or merger or consolidation or other acquisition by the Company of capital,
stock or assets), whether or not for sale for its own account, it will, subject
to Section 3.8 hereof, each such time give prompt written notice to all holders
of Registrable Securities of its intention to do so and of such holders' rights
under this Section 3.2. Upon the written request of any such holder (a
"Requesting Holder") made as promptly as practicable and in any event within 10
days after the receipt of any such notice, which request shall specify the
Registrable Securities intended to be disposed of by such Requesting Holder, the
Company shall, subject to Sections 3.6 and 3.8 hereof, use reasonable efforts to
effect the registration under the Securities Act of all Registrable Securities
which the Company has been so requested to register by the Requesting Holders
thereof. If at any time after giving written notice of its intention to register
any securities and prior to the effective date of the registration statement
filed in connection with such registration, the Company shall determine for any
reason not to register or to delay registration of such securities, the Company
may, at its election, give written notice of such determination not to register,
shall be relieved of its obligation to register any Registrable Securities in
connection with such registration. No registration effected under this Section
3.2 shall relieve the Company of its obligation to effect the registration of
Registrable Securities upon request under Section 3.1. The Company shall pay all
Registration Expenses in connection with registration of Registrable Securities
requested pursuant to this Section 3.2.
(b) Priority in Incidental Registrations. Notwithstanding anything
------------------------------------
in paragraph (a) above to the contrary, if the managing underwriter of any
underwritten offering covered by paragraph (a) shall inform the Company in
writing of its belief that the number or type of Registrable Securities
requested to be included in such registration would materially and adversely
affect such offering, then the Company shall include in such registration, to
the extent of the number and type which the Company is so advised can be sold in
(or during the time of) such offering, first, all securities proposed by the
Company to be sold for its own account, second, Registrable Securities requested
to be included in such registration pro rata among the Requesting Holders on the
basis of the percentage of the aggregate Registrable Securities requested to be
so included and, third, all other securities of the Company requested to be
included in such registration by any person other than a Requesting Holder.
3.3 Registration Procedures. If and whenever the Company is required
-----------------------
to effect the registration of any Registrable Securities under the Securities
Act as provided in Section 3.1 or 3.2, the Company shall as expeditiously as
possible:
(i) prepare and (as soon as practicable, and in any event
within 90 days after the end of the period within which requests for
registration may be given to the Company) file with the Commission the requisite
registration statement to effect such registration and thereafter use best
efforts to cause such registration statement to become effective; provided,
however, that the Company may discontinue any registration of its securities
which are not Registrable Securities at any time prior to the effective date cf
the registration statement relating thereto;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may
-3-
<PAGE>
be necessary to keep such registration statement effective and to comply with
the provisions of the Securities Act with respect to the disposition of all
Registrable Securities covered by such registration statement for such period as
shall be reasonably required for the disposition of all of such Registrable
Securities, provided, that such period need not exceed 180 days;
(iii) furnish to each seller of Registrable Securities covered
by such registration statement, such number of conformed copies of such
registration statement and of each such amendment and supplement thereto (in
each case including all exhibits), such number of copies of the prospectus
contained in such registration statement (including each preliminary prospectus
and any summary prospectus) and any other prospectus filed under Rule 424 under
the Securities Act, in conformity with the requirements of the Securities Act,
and such other documents, as such seller may reasonably request;
(iv) use best efforts (x) to register or qualify all
Registrable Securities and other securities covered by such registration
statement under such other securities or Blue Sky laws of such States of the
United States of America where an exemption is not available and as the sellers
of Registrable Securities covered by such registration statement shall
reasonably request, (y) to keep such registration or qualification in effect for
so long as such registration statement remains in effect and (z) to take any
other action which may be reasonably necessary or advisable to enable such
sellers to consummate the disposition in such jurisdictions of the securities to
be sold by such sellers, except that the Company shall not for any such purpose
be required to qualify generally to do business as a foreign corporation in any
jurisdiction wherein it would not, but for the requirement of this paragraph
(iv), be obligated to be so qualified or to consent to general service of
process in any such jurisdiction;
(v) furnish to each seller and underwriter, if any, of
Registrable Securities a signed counterpart of
(x) an opinion of counsel for the Company, and
(y) if the registration statement covers an underwritten
public offering, a copy of a "comfort" letter signed by the independent public
accountants who have certified the Company's financial statements included or
incorporated by reference in such registration statement, each covering
substantially the same matters with respect to such registration statement (and
the prospectus included therein) and, in the case of the accountants' comfort
letter, with respect to events subsequent to the date of such financial
statements, as are customarily covered in opinions of issuers' counsel and in
accountants' comfort letters, respectively, delivered to the underwriters in
underwritten public offerings of securities (and dated the dates such opinions
and comfort letters are customarily dated);
(vi) notify each seller of Registrable Securities covered by
such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, upon discovery that, or upon
the happening of any event as a result of which, the prospectus included in such
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
-4-
<PAGE>
necessary to make the statements therein not misleading, in the light of the
circumstances under which they were made, and at the request of any such seller
promptly prepare and furnish to it 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 any purchaser of such 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 under which they were made; and
(vii) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission in connection with such
registration statement.
The Company may require each seller of Registrable Securities as to which
any registration is being effected to furnish the Company such information
regarding such seller and the distribution of such securities as the Company may
from time to time reasonably request in writing. The Company may exclude from
such registration any holder who fails to timely provide such information.
Each holder of Registrable Securities agrees that upon receipt of any
notice from the Company of the happening of any event of the kind described in
Section 3.3(vi), such holder will forthwith discontinue such holder's
disposition of Registrable Securities pursuant to the registration statement
relating to such Registrable Securities until such holder's receipt of the
copies of the supplemented or amended prospectus contemplated by Section 3.3(vi)
and, if so directed by the Company, will deliver to the Company at the Company's
expense all copies, other than permanent file copies, then in such holder's
possession, of the prospectus relating to such Registrable Securities current at
the time of receipt of such notice.
3.4 Underwritten Offerings.
----------------------
(a) Requested Underwritten Offerings. If requested by the
--------------------------------
underwriters for any underwritten offering by holders of Registrable Securities
pursuant to a registration requested under Section 3.1, the Company will enter
into an underwriting agreement with such underwriters for such offering, such
agreement to be satisfactory in substance and form to the Company and to contain
such representations and warranties by the Company and such other terms as are
generally prevailing in agreements of that type, including, without limitation,
indemnities to the effect and to the extent provided in Section 3.7. The holders
of the Registrable Securities proposed to be distributed by such underwriter
will cooperate with the Company in the negotiation of the underwriting
agreement. Such holders of Registrable Securities shall, upon the request of
the Company, appoint a representative of such holders. Such holders of
Registrable Securities to be distributed by such underwriter shall be parties to
such underwriting agreement.
(b) Incidental Underwritten Offerings. If the Company proposes to
---------------------------------
register any of its securities under the Securities Act as contemplated by
Section 3.2 and such securities are to be distributed by or though one or more
underwriters, the Company will, subject to Sections 3.2, 3.6 and 3.8 hereof, if
requested by any Requesting Holder of Registrable Securities, arrange for such
underwriters to include all the Registrable Securities to be offered and
-5-
<PAGE>
sold by such Requesting Holder among the securities of the Company to be
distributed by such underwriters. Such holders of Registrable Securities shall,
upon the request of the Company, appoint a representative of such holders. The
holders of Registrable Securities to be distributed by such underwriters or
their representative shall be parties to the underwriting agreement between the
Company and such underwriters.
(c) Holdback Agreements. If any registration of Registrable
-------------------
Securities hereunder shall be in connection with an underwritten public
offering, each holder of Registrable Securities agrees not to effect any public
or private sale or distribution and not to effect any such sale or distribution
of any other equity security of the Company or of any security convertible into
or exchangeable or exercisable for any equity security of' the Company (in each
case, other than as part of such underwritten public offering) during such
period of time as the managing underwriters retained by the Company, in their
business judgment, may request provided that each holder of Registrable
--------
Securities shall not be required to agree to any such "holdback" unless a
similar agreement is entered into with holders of all of the Company's equity
securities.
3.5 Preparation; Reasonable Investigation. In connection with the
-------------------------------------
preparation and filing of each registration statement under the Securities Act
pursuant to this Agreement, the Company will give the holders of Registrable
Securities registered under such registration statement, the underwriters
thereof, if any, and their respective counsel and accountants the opportunity to
participate in the preparation of such registration statement, each prospectus
included therein or filed with the Commission and each amendment thereof or
supplement thereto, and give each of them reasonable access to its books and
records, such opportunities to discuss the business of the Company with its
officers and the independent public accountants who have certified its financial
statements as shall be necessary, in the opinion of such holders' and such
underwriters' respective counsel, to conduct a reasonable investigation within
the meaning of the Securities Act, provided that such holders of Registrable
Securities and their respective attorneys agree in writing, subject to such
scope and exceptions as are customary in such circumstances, not to disclose or
use any confidential information any such holder receives in the exercise of its
rights under this Section 3.5.
3.6 Limitations, Conditions and Qualifications to Obligations under
---------------------------------------------------------------
Registration Covenants. The obligations of the Company to use best efforts to
- ----------------------
cause the Registrable Securities to be registered under the Securities Act is
subject to the following limitations, conditions and qualifications:
(a) The Company shall be entitled to postpone the filing of any
registration statement otherwise required to be prepared and filed by it
pursuant to Section 3.1(i) if the Company determines that such registration and
offering would interfere with any financing, acquisition, corporate
reorganization or other material transaction involving the Company or any of its
Affiliates or would require premature disclosures thereof, then for a period not
to exceed 120 days after the request therefor, and (ii) in the event the
registration is required to be filed during the fourth quarter of any fiscal
year and the underwriters require audited financials to be included in such
registration, then for a period not to exceed 120 days after the end of such
fiscal year.
-6-
<PAGE>
(b) In the event the Company determines to register securities
in an offering, whether pursuant to an underwritten public equity offering or an
acquisition, the Company, upon the advice of its underwriters, shall notify the
holders of Registrable Securities and (i) may request that such holders refrain
from selling Registrable Securities under Rule 144 and (ii) shall not be
obligated to file a registration statement to effect any registration,
qualification or compliance pursuant to Section 3.1, in each case for a period
of (A) up to 90 days after the closing of the underwriter's public offering or
acquisition or (B) immediately upon the Company's decision to no longer pursue
any such transaction (the "Black Out Period").
3.7 Indemnification.
---------------
-7-
<PAGE>
(a) Indemnification by the Company. In the event of any registration
------------------------------
of any securities of the Company under the Securities Act, the Company will, and
hereby does, indemnify and hold harmless, in the case of any registration
statement filed pursuant to Section 3.1 or 3.2 hereof, each seller of any
Registrable Securities covered by such registration statement, its directors,
officers, partners, agents and affiliates and each other Person who participates
as an underwriter in the offering or sale of such securities and each other
Person, if any, who controls such seller or any such underwriter within the
meaning of the Securities Act, insofar as losses, claims, damages or liabilities
(or actions or proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any registration statement under which such
securities were registered under the Securities Act, any preliminary prospectus,
final prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein in light of the circumstances in which they were made not misleading,
and the Company will reimburse such seller and each such director, officer,
partner, agent or affiliate, underwriter and controlling Person for any legal or
any other expenses reasonably incurred by them in connection with investigating
or defending any such loss, claim, liability, action or proceeding; provided,
that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage, liability (or action or proceeding in respect thereof)
or expense arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
any such preliminary prospectus, final prospectus, summary prospectus, amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company through an instrument executed by or on behalf of such
seller or underwriter, as the case may be, for use in the preparation thereof;
and provided, further, that the Company shall not be liable to any Person who
participates as an underwriter in the offering or sale of Registrable Securities
or any other Person, if any, who controls such underwriter within the meaning of
the Securities Act, in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense arises
out of such Person's failure to send or give a copy of the final prospectus, as
the same may be then supplemented or amended, to the Person asserting an untrue
statement or alleged untrue statement or omission or alleged omission at or
prior to the written confirmation of the sale of Registrable Securities to such
Person if such statement or omission was corrected in such final prospectus so
long as such final prospectus, and any amendments or supplements thereto, have
been furnished to such underwriter. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of such seller
or any such director, officer, partner, agent or affiliate or controlling Person
and shall survive the transfer of such securities by such seller.
(b) Indemnification by the Sellers. As a condition to including any
------------------------------
Registrable Securities in any registration statement, the Company shall have
received an undertaking satisfactory to it from the prospective seller of such
Registrable Securities to indemnify and hold harmless (in the same manner and to
the same extent as set forth in subdivision (a) of this Section 3.7) the Company
and its directors, officers, partners, agents and affiliates, and each other
person who participates as an underwriter in the offering or sale of such
Securities and each other person, if any, who controls the Company within the
meaning of the Securities Act, with respect to any statement or alleged
statement in or omission or alleged
-8-
<PAGE>
omission from such registration statement, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, if such statement or alleged statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company through an instrument duly executed by such
seller for use in the preparation of such registration statement, preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Company or any such director, officer, partner,
agent or affiliate or controlling Person and shall survive the transfer of such
securities by such seller.
3.8 Limitations on Registrations of Registrable Securities. The
------------------------------------------------------
Company shall not be required to effect a particular registration of Registrable
Securities pursuant to Section 3.1 or 3.2 hereof if it shall deliver to the
holder or holders requesting such registration a written opinion of counsel to
the effect that the Registrable Securities requested by such holder to be so
registered may be sold in the U.S. public securities market without restriction
or registration under the Securities Act and any applicable state securities
laws. This limitation shall not affect any other Registrable Securities held by
such holder.
4. Rule 144. With a view to making available the benefits of certain
--------
rules and regulations of the Commission which may at any time permit the sale of
the Registrable Securities to the public without registration, during such time
as the Company has a class of securities registered under the Exchange Act, the
Company agrees to:
(a) use reasonable efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under the
Exchange Act; and
(b) upon the request of any holder of Registrable Securities,
the Company will deliver to such holder a written statement as to whether it has
complied with such requirements of this Section 4.
5. Amendments and Waivers. This Agreement may be amended with the consent
----------------------
of the Company and 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 beneficial owner or owners of at least 66-2/3% of the Registrable
Securities. Each beneficial owner of any Registrable Securities at the time or
thereafter outstanding shall be bound by any consent authorized by this Section
5, whether or not such Registrable Securities shall have been marked to indicate
such consent.
6. Notices. All notices, consents, requests, instructions, approvals and
-------
other communications provided for herein shall be validly given, if in writing
and delivered personally, by confirmed telecopy or sent by registered or
certified mail or nationally recognized air courier service or overnight courier
service, postage prepaid:
-9-
<PAGE>
(a) if to any Investor, addressed to each in the manner set
forth in the Purchase Agreement, or at such other address as each shall have
furnished to the Company in writing;
(b) if to any other holder of Registrable Securities, at the
address that such holder of Registrable Securities shall have furnished to the
Company in writing or, until any such other holder of Registrable Securities so
furnishes to the Company an address, then to and at the address of the last
holder of Registrable Securities who has furnished an address to the Company;
and
(c) if to the Company, addressed to it in the manner set forth
in the Purchase Agreement, or at such other address as the Company shall have
furnished to the Investors or any other holder of Registrable Securities in
writing;
and each such notice, request, consent, instruction, approval and other
communication shall for all purposes of this Agreement be treated as being
effective or having been given when delivered, if delivered personally, or, if
sent by mail, at the earlier of its actual receipt or three (3) days after the
same has been deposited in a regularly maintained receptacle for the deposit of
United States mail, addressed and postage prepaid as aforesaid, or if sent by
telecopier, when confirmed, or if sent by air courier, two (2) days after the
same has been deposited with such air courier or if sent by overnight courier,
one (1) day after the same has been deposited with such overnight courier.
7. Assignment; Calculation of Percentage Interests in Registrable
--------------------------------------------------------------
Securities.
- ----------
(a) This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and, (i) with respect to the
Company, its legal representatives, successors and assigns and (ii), with
respect to the Investors, any beneficial owner of any Registrable Securities
including any person who purchases or otherwise acquires securities from any
Investor, subject to the provisions respecting the minimum numbers or
percentages of shares of Registrable Securities required in order to be entitled
to certain rights, or take certain actions, contained herein.
(b) For purposes of this Agreement, all references to a
percentage of the Registrable Securities shall be calculated based upon the
number of Registrable Securities outstanding at the time such calculation is
made.
8. Headings. Headings of Sections and paragraphs of this Agreement have
--------
been inserted for convenience of reference only and do not constitute a part of
this Agreement.
9. Governing Law. It is the intention of the parties that the internal
-------------
substantive laws, and not the laws of conflicts, of the State of New York should
govern the enforceability and validity of this Agreement, the construction of
its terms and the interpretation of the rights and duties of the parties.
-10-
<PAGE>
10. Recapitalization, etc. In the event that any capital stock or other
----------------------
securities are issued in respect of, in exchange for or in substitution of any
Registrable Securities by reason of any reorganization, recapitalization,
reclassification, merger, consolidation, spin-off, partial or complete
liquidation, stock dividend, split-up, sale of assets, distribution to
stockholders or combination of the shares of Registrable Securities or any other
change in the Company's capital structure, appropriate adjustments shall be made
in this Agreement so as to fairly and equitably preserve, as far as practicable,
the original rights and obligations of the parties hereto under this Agreement.
11. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
12. Successors and Assigns. All the terms and provisions of this
----------------------
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the parties hereto and their respective successors and assigns, whether so
expressed or not.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the day and year first above written.
GOAMERICA COMMUNICATIONS CORP.
By: /s/ Aaron Dobrinsky
________________________________
Name: Aaron Dobrinsky
Title: President
/s/ Aaron Dobrinsky
____________________________________
Aaron Dobrinsky
/s/ Joseph Korb
___________________________________
Joseph Korb
/s/ Alan Docter
___________________________________
Alan Docter
KALRAN INVESTMENTS LTD.
-11-
<PAGE>
By: /s/ Victor Segal
_______________________________
Name: Victor Segal
Title: Director
WELLROSE LIMITED
By: /s/ R.R. Breadner
_______________________________
Name: R.R. Breadner
Title: Director
<PAGE>
/s/ Mirjam Guggenheim
__________________________________
Mirjam Guggenheim
A.O.A. SECURITIES ANSTALT
By: /s/ Aayer Berest
_______________________________
Name: Aayer Berest
Title: Director
EXCELSIOR COMMUNICATIONS CORP.
By: /s/ Stephen Mayor
_______________________________
Name: Stephen Mayor
Title: Treasurer
/s/ Daniel A. Lehrman
__________________________________
Daniel A. Lehrman
/s/ Mark Kristoff
__________________________________
Mark Kristoff
/s/ Ingrid Schroeder
__________________________________
Ingrid Schroeder
/s/ Daniel Marks
__________________________________
Daniel Marks
/s/ Eric F. Salomon
__________________________________
Eric F. Salomon
/s/ Adam Wagner
__________________________________
Adam Wagner
<PAGE>
/s/ Anthony Sharp
__________________________________
Anthony Sharp
/s/ Shiva Bernheim
__________________________________
Shiva Bernheim
ESPRIT GROUP LTD.
By: /s/ Mr. Hannah
_______________________________
Name: Mr. Hannah
Title: Corporate Director
/s/ Alan Listhaus
__________________________________
Alan Listhaus
<PAGE>
SCHEDULE 1
DEFINITIONS
This Schedule 1 to that certain Registration Rights Agreement (the
"Agreement"), dated as of October 15, 1996, between GoAmerica Communications
- ----------
Corp. and certain Investors, defines certain of the terms used therein and is
made a part thereof.
"Affiliate" means any Person which directly or indirectly controls, is
---------
controlled by, or is under common control with, the indicated Person.
"Black Out Period" shall have the meaning set forth in Section 3.6(b).
----------------
"Commission" means the United States Securities and Exchange Commission or
----------
any similar agency then having jurisdiction to enforce the Securities Act.
"Common Stock" means the common stock, $1.00 par value, of the Company, or
------------
any other capital stock of the Company into which such stock is reclassified or
reconstituted.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
------------
any similar statute of the United States of America, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect at
the time. Reference to a particular section of the Exchange Act shall include a
reference to the comparable section, if any, of any such similar statute of the
United States of America.
"Initiating Holders" shall have the meaning set forth in Section 3.1(a).
------------------
"Person" means a corporation, an association, a partnership, an
------
organization, a business, an individual, a governmental or political subdivision
thereof or a governmental agency.
"Registrable Securities" means the shares of Common Stock acquired
----------------------
hereunder by the Investors. As to any particular Registrable Securities, once
issued, such securities shall cease to be Registrable Securities when (a) a
registration statement with respect to the sale of such securities shall have
become effective under the Securities Act and such securities shall have been
disposed of in accordance with such registration statement, (b) they shall have
been sold pursuant to Rule 144 (or successor provision) promulgated under- the
Securities Act, (c) they shall have been otherwise transferred, new certificates
for them not bearing a legend restricting further transfer under the Securities
Act shall have been delivered by the Company and their subsequent public
distribution in the United States of America shall not require registration of
them under the Securities Act or (d) they shall have ceased to be outstanding.
"Registration Expenses" means all expenses incident to the Company's
---------------------
performance of or compliance with Section 3 hereof, including, without,
limitation, all registration, filing and National Association of Securities
Dealers, Inc. fees, all listing fees, all fees and expenses of complying with
securities or blue sky laws (including, without limitation, reasonable fees and
<PAGE>
disbursements of counsel for the underwriters in connection with blue sky
qualifications of the Registrable Securities or proposed disposition thereof),
all word processing, duplicating and printing expenses, messenger and delivery
expenses, the fees and disbursements of counsel for the Company and of its
independent public accountants, including the expenses of "cold comfort" letters
required by or incident to such performance and compliance, any fees and
disbursements of underwriters customarily paid by issuers or sellers of
securities; provided, however, that Registration Expenses shall exclude, and the
sellers of the Registrable Securities being registered shall pay, (x)
underwriting fees and underwriting discounts and commissions and transfer taxes
in respect of the Registrable Securities being registered and (y) the fees and
expenses of counsel to the Selling Holders.
"Requesting Holders" shall have the meaning set forth in Section 3.2(a).
------------------
"Rule 144" means Rule 144 promulgated under the Securities Act or any
--------
similar federal rule under the Securities Act as shall be in effect at the time.
"Securities Act" means the Securities Act of 1933, as amended, or any
--------------
similar statute of the United States of America, and the rules and regulations
of the Commission thereunder, all as the same shall be in effect at the time.
References to a particular section of the Securities Act shall include a
reference to the comparable section, if any, of an, such similar statute of the
United States of America.
"Selling Holder" shall have the meaning set forth in Section 3.1(a).
--------------
<PAGE>
EXHIBIT 10.17
Execution Copy
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement"), dated as of the 25th
day of June, 1999, is made between GoAmerica Communications Corp., a Delaware
corporation (the "Company"), and CIBC WMV INC., a Delaware corporation ("CIBC").
WITNESSETH:
WHEREAS, the Company and CIBC are parties to the Convertible Preferred
Stock Purchase Agreement dated as of the date hereof (as may be amended,
supplemented or modified from time to time, the "Purchase Agreement");
WHEREAS, as a condition to closing under the Purchase Agreement and as an
inducement to CIBC to consummate the transactions contemplated by the Purchase
Agreement, the Company and CIBC desire to execute and deliver this Agreement;
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, receipt of which is hereby acknowledged, the parties to
this Agreement agree as follows:
1. Certain Definitions. As used in this Agreement, the following terms
-------------------
shall have the following respective meanings:
"Affiliate" means, with respect to any specified Person, (1) any other
Person who, directly or indirectly through one or more intermediaries, owns or
controls, is under common ownership or control with, or is owned or controlled
by, such specified Person, (2) any other Person who is a director, officer or
partner or is, directly or indirectly, the beneficial owner of 10% or more of
any class of equity securities, of the specified Person or a Person described in
clause (1) above, (3) any other Person of whom the specified Person is a
director, officer or partner or is, directly or indirectly, the beneficial owner
of 10% or more of any class of equity securities, (4) any other Person in whom
the specified Person has a substantial beneficial interest or as to whom the
specified Person serves as trustee or in a similar capacity, or (5) any relative
or spouse (including any partner with whom such Person resides on a permanent
basis) of the specified Person or any of the foregoing Persons described in
clause (1), (2), (3) or (4) above, any relative of such spouse, any spouse of
any such relative or any other Person who, directly or indirectly, is under
common ownership or control with, or is owned or controlled by such spouse or
relative. As used in this definition, the term "control" means the possession,
directly or indirectly, of the power to direct the management and policies of a
Person, whether through the
<PAGE>
ownership of voting securities, by contract or otherwise. As used in this
definition, the term "relative" means any former spouse, parent, grandparent,
great-grandparent, child, grandchild, great-grandchild, sibling, first uncle,
first aunt or first cousin (in each case, whether natural or adoptive).
"Business Day" means a day, other than a Saturday or Sunday, on which the
principal commercial banks located in New York are open for business during
normal banking hours.
"Commission" means the Securities and Exchange Commission, or any other
federal agency at the time administering the Securities Act.
"Conversion Shares" means shares of Common Stock of the Company issued upon
conversion or exchange of the Eligible Shares.
"Eligible Shares" means shares of Convertible Preferred Stock of the
Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Holder" means any holder of Eligible Shares or Conversion Shares who has
executed a joinder agreement and become a party hereto.
"Initial Public Offering" means the initial offering to the public of the
Company's securities pursuant to a firm commitment underwriting pursuant to the
Securities Act.
"Person" means any natural person, legal or personal representative,
partnership, company, corporation, incorporated syndicate, unincorporated or
incorporated association, trust or Governmental Body, howsoever designated or
constituted and whether acting in an individual, fiduciary or other capacity.
The terms "register," "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.
"Registrable Securities" means the Conversion Shares, excluding Conversion
Shares which have been registered under the Securities Act pursuant to an
effective registration statement filed thereunder and disposed of in accordance
with the registration statement covering them.
"Registration Expenses" means all expenses relating to a registration for
which the Company is responsible hereunder, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel and independent public accountants for the
-2-
<PAGE>
Company, blue sky fees and expenses, fees of any exchange or market on which the
Company's Common Stock is to be listed or quoted, transfer taxes, fees of
transfer agents and registrars, reasonable fees and disbursements of one legal
counsel for all the selling Holders and the expense of any special audits
incident to or required by any such registration (but excluding the compensation
of regular employees of the Company, which shall be paid in any event by the
Company).
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at this time.
"Selling Expenses" means all underwriting discounts and selling commissions
applicable to the sale of Registrable Securities.
Section 1.2 Certain Rules of Interpretation. In this Agreement:
-------------------------------
(a) time is of the essence in the performance of the parties'
respective obligations;
(b) unless otherwise specified, all references to monetary amounts are
to United States dollars; and
(c) the use of words in the singular or plural, or with a particular
gender, shall not limit the scope or exclude the application of any provision of
this Agreement to such Person or Persons or circumstances as the context
otherwise permits.
(d) the words "include", "includes" and "including" are deemed to be
followed by the phrase "without limitation";
(e) the phrases "ordinary course of business" and "ordinary course of
business consistent with past practice" refer to the business and practices of
GoAmerica, consistent with historical practices conducted by GoAmerica during
the past 12 months; and
(f) any representation or warranty contained herein as to the
enforceability of a Contract shall be subject to the effect of bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and to general equitable principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at Law).
2. Requested Registration.
----------------------
(a) Request for Registration. If the Company receives from
------------------------
Holders of at least 67% of the Eligible Shares at any time after 180 days
following the effective date of the
-3-
<PAGE>
Company's Initial Public Offering, a written request that the Company
effect any registration with respect to all or a part of the Registrable
Securities, the Company will:
(i) within 20 days of such written request give written notice
of the proposed registration to all other Holders, if any; and
(ii) as soon as practicable, use all reasonable efforts to
effect such registration (including, without limitation, the execution
of an undertaking to file post-effective amendments, appropriate
qualification under applicable blue sky or other state securities laws
and appropriate compliance with applicable regulations under the
Securities Act) as may be so requested and would permit or facilitate
the sale and distribution of all or such portion of such Registrable
Securities as are specified in such request, together with all or such
portion of the Registrable Securities of any Holder or Holders joining
in such request as are specified in written request given within 30
days after receipt of such written notice from the Company; provided,
--------
that the Company shall not be obligated to effect, or take any action
to effect, any such registration pursuant to this Section 2:
(A) in any particular jurisdiction in which the Company would
be required to execute a general consent to service of process in
effecting such registration, qualification or compliance, unless
the Company is already subject to service in such jurisdiction
and except as may be required by the Securities Act or applicable
rules or regulations thereunder; or
(B) after the Company has effected one such registration
pursuant to this Section 2(a) and such registration has been
declared or ordered effective and the sales of such Registrable
Securities shall have closed.
Subject to the foregoing clauses (A) and (B), the Company shall file a
registration statement covering the Registrable Securities so requested to
be registered as soon as practicable after receipt of the request of
Holders of 51% of the Eligible Shares. Each Holder will have the right to
participate ratably with the others.
The registration statement filed pursuant to the request of CIBC may,
subject to the provisions of Section 2(b) below, include other securities
of the Company including securities of the Company which are held by
persons who are entitled to include their securities in any such
registration; provided, however, that, in any underwritten public offering
-------- -------
contemplated by Sections 2, 3 and 5, the Holders of Eligible Shares shall
be entitled to sell such Eligible Shares to the underwriters for conversion
and sale of the shares of Common Stock issued upon conversion thereof,
subject to agreement of the underwriters.
The Company shall be entitled to postpone for a reasonable period of
time not to exceed six months the filing of a registration statement
otherwise required to be filed by it
-4-
<PAGE>
pursuant to this Section 2(a) if the Company determines, in its reasonable
judgment, that such registration would materially interfere with any
financing, acquisition, corporate reorganization or other material
transaction involving the Company and the Company promptly gives written
notice to the Holders who have initiated or elected to participate in such
registration including an explanation thereof. The Company shall not
exercise its right to defer a registration more than once in any 12-month
period or in any event if the effect would be to permit a registration of
securities (other than a registration that was pending at the time of the
initial demand or a registration on Form S-4, Form S-8 or any successor or
similar form) to the exclusion of such number of Registrable Securities as
would otherwise have been included in the registration statement the filing
of which was deferred.
Holders requesting registration shall be entitled to withdraw any
registration request made pursuant to this Section 2(a), provided, that
--------
such registration request shall nevertheless be counted toward the number
of registrations the Company is required to file pursuant to this Section
2(a) unless the Holders reimburse the Company for all reasonable out-of-
pocket costs incurred by the Company prior to such withdrawal.
For purposes of provisions of Sections 2(a) and 5, registrations
relative to which less than 50% of the offered securities are in fact sold
shall not be included.
(b) Underwriting.
------------
(i) If Holders requesting registration intend to distribute
the Registrable Securities covered by their request by means of an
underwriting, they shall so advise the Company as a part of their
request made pursuant to this Section 2 and the Company shall include
such information in the written notice referred to in Section 2(a)
above. The right of any Holder to registration pursuant to Section
2(a) shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities
in the underwriting. A Holder may elect to include in such
underwriting all or a part of the Registrable Securities he holds.
(ii) The Company (together with all Holders proposing to
distribute their securities through such underwriting) shall enter
into an underwriting agreement in customary form with the
representative of the underwriter or underwriters selected for such
underwriting by CIBC from the list of underwriters set forth on the
attached Schedule I. If any Holder of Registrable Securities who has
----------
requested inclusion in such registration as provided above disapproves
of the terms of the underwriting, such person may elect to withdraw
therefrom by written notice to the Company, the underwriter and CIBC.
The securities so withdrawn shall also be withdrawn from registration.
If the underwriter has not limited the number of Registrable
Securities or other securities to be underwritten, the Company may
include its securities for its own account in such registration if
-5-
<PAGE>
the underwriter so agrees and if the number of Registrable Securities
and other securities which would otherwise have been included in such
registration and underwriting will not thereby be limited or adversely
affected.
(iii) Notwithstanding the provisions of this Section 2(b), if
the underwriter determines that marketing factors require a limitation
of the total number of shares of Common Stock to be underwritten or a
limitation of the total number of shares of Common Stock to be sold by
the Company, then, subject to the provisions of Section 6 herein, the
---------
number of shares to be included in the registration and the
underwriting shall be allocated among all shareholders of the Company
who are participating in such registration, on a pro rata basis based
on the number of Registrable Securities or other shares of Common
Stock of the Company held by all such Holders and being included in
such registration; provided, that the number of shares of Registrable
--------
Securities to be included in such underwriting and registration shall
not be reduced unless all other securities included in such
registration by the Company are first entirely excluded from the
underwriting and registration. No stock excluded from the
underwriting by reason of the underwriter's marketing limitation shall
be included in such registration. If the Company determines not to
participate in any such underwriting, it may elect to withdraw
therefrom by written notice to the holders of Registrable Securities
and the underwriter. The securities so withdrawn from such
underwriting shall also be withdrawn from such registration.
3. Company Registration.
--------------------
(a) If the Company elects to register any of its securities for
purposes of a public offering of securities of the Company (including, but
not limited to, registration statements relating to secondary offerings of
securities of the Company), other than a registration relating solely to
employee benefit plans, a registration relating solely to a Commission Rule
145 transaction, or a registration on any registration form which does not
permit secondary sales or does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of Registrable Securities, the Company will:
(i) promptly give to each Holder written notice thereof (which
shall include a list of the jurisdictions in which the Company intends
to attempt to qualify such securities under the applicable blue sky or
other state securities laws) at least 30 days prior to the filing of
any registration statement; and
(ii) include in such registration (and any related qualification
under blue sky laws or other compliance), and in any underwriting
involved therein, all the Registrable Securities specified in a
written request or requests, made by any Holder within 30 days after
receipt of the written notice from the Company described in clause (i)
above, except as set forth in Section 3(b) below. Such
-6-
<PAGE>
written request may specify all or a part of a Holder's Registrable
Securities. Each Holder desiring to include in any such registration
statement all or any part of the Registrable Securities held by it
shall, within 30 days after the above-described notice from the
Company, so notify the Company in writing.
(b) Underwriting. If the registration of which the Company gives
------------
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 3(a)(i). In such event the right of any Holder to
registration pursuant to Section 3(a) shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of the
Registrable Securities such Holder elects to register in such underwriting
to the extent provided herein. All Holders proposing to distribute their
securities through such underwriting shall (together with the Company)
enter into an underwriting agreement in customary form with the underwriter
or underwriters selected by the Company from the list attached as Schedule
--------
I hereto. Notwithstanding the provisions of Section 3, if the underwriter
-
determines that marketing factors require a limitation of the total number
of shares to be underwritten or a limitation of the total number of shares
of Registrable Securities to be underwritten, the number of shares that may
be included in the underwriting shall be allocated, first, to the Company;
second, to the shareholders of the Company participating in the
underwriting, on a pro rata basis subject to the provisions of Section 6
herein. No stock excluded from the underwriting by reason of the
underwriter's marketing limitation shall be included in such registration.
If any Holder of Registrable Securities determines not to participate in
any such underwriting, such person may elect to withdraw therefrom by
written notice to the Company and the underwriter. The securities so
withdrawn from such underwriting shall also be withdrawn from such
registration. Notwithstanding the foregoing provisions, the Company may
withdraw any registration statement referred to in this Section 3 without
thereby incurring any liability to the holders of Registrable Securities.
4. Expenses of Registration. All Registration Expenses incurred in
------------------------
connection with any registration, qualification or compliance pursuant to this
Agreement shall be borne by the Company, and all Selling Expenses shall be borne
by the Holders of the securities so registered pro rata on the basis of the
number of their shares so registered. The reasonable fees of counsel retained
by any selling Holders shall be borne by the Company.
5. Registration Procedures. In the case of each registration effected by
-----------------------
the Company pursuant to the provisions of this Agreement, the Company will keep
each Holder advised in writing as to the initiation of each registration and as
to the completion thereof. At its expense, the Company will:
(a) prepare and file with the Commission a registration
statement (which, in the case of an underwritten public offering pursuant
to Section 2, shall be on Form S-1 or other form of general applicability
satisfactory to the managing underwriter selected as therein provided) with
respect to such securities and use its best efforts to cause such
registration statement to become and remain effective for a period
commencing on the
-7-
<PAGE>
effective date of such registration statement and ending on the earlier of
the 90th day thereafter and the date on which all of such Registrable
Securities have been disposed of;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for the period specified in paragraph (a) above and
comply with the provisions of the Securities Act with respect to the
disposition of such Registrable Securities covered by such registration
statement in accordance with the sellers' intended method of disposition
set forth in such registration statement for such period;
(c) furnish to each seller of Registrable Securities and to each
underwriter such number of copies of the registration statement and the
prospectus included therein (including each preliminary prospectus) as such
persons reasonably may request in order to facilitate the public sale or
other disposition of the Registrable Securities covered by such
registration statement;
(d) use its best efforts to register or qualify the Registrable
Securities covered by such registration statement under the securities or
"blue sky" laws of such jurisdictions as the sellers of Registrable
Securities or, in the case of an underwritten public offering, the managing
underwriter reasonably shall request; provided, however, that the Company
-------- -------
shall not for any such purpose under this clause (d) be required to qualify
generally to transact business as a foreign corporation in any jurisdiction
where it is not so qualified or to consent to general service of process in
any such jurisdiction;
(e) use its best efforts to list the Registrable Securities covered
by such registration statement with any securities exchange on which the
Common Stock of the Company is then listed;
(f) immediately notify each seller of Registrable Securities and each
underwriter under such registration statement, at any time when a
prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event of which the Company has
knowledge as a result of which the prospectus contained in such
registration statement, as then in effect, includes an untrue statement of
a material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in light
of the circumstances then existing and the Company will prepare a
supplement or amendment to such prospectus in order that such prospectus
will not contain an untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading;
(g) if the offering is underwritten and at the request of any seller
of Registrable Securities, use its best efforts to furnish in the date that
Registrable Securities are delivered to the underwriters for sale pursuant
to such registration: (i) an opinion dated
-8-
<PAGE>
such date of counsel representing the Company for the purposes of such
registration, addressed to the underwriters and to such seller, stating
that such registration statement has become effective under the Securities
Act and that (A) to the best knowledge of such counsel, no stop order
suspending the effectiveness thereof has been issued and no proceedings for
that purpose have been instituted or are pending or contemplated under the
Securities Act, (B) the registration statement, the related prospectus and
each amendment or supplement thereof comply as to form in all material
respects with the requirements of the Securities Act (except that such
counsel need not express any opinion as to financial statements contained
therein) and (C) to such other effects as reasonably may be requested by
counsel for the underwriters or by such seller or its counsel and (ii) a
letter dated such date from the independent public accountants retained by
the Company, addressed to the underwriters and to such seller, stating that
they are independent public accountants within the meaning of the
Securities Act and that, in the opinion of such accountants, the financial
statements of the Company included in the registration statement or the
prospectus, or any amendment or supplement thereof, comply as to form in
all material respects with the applicable accounting requirements of the
Securities Act, and such letter shall additionally cover such other
financial matters (including information as to the period ending no more
than five Business Days prior to the date of such letter) with respect to
such registration as such underwriters reasonably may request;
(h) make available for inspection by each seller of Registrable
Securities, any underwriter participating in any distribution pursuant to
such registration statement, and any attorney, accountant or other agent
retained by such seller or underwriter, all financial and other records,
pertinent corporate documents and properties of the Company, and cause the
Company's officers, directors and employees to supply all information
reasonably requested by any such seller, underwriter, attorney, accountant
or agent in connection with such registration statement;
(i) cause all Registrable Securities covered by the registration
statement to be listed on each securities exchange on which the Company's
Common Stock is then listed, and unless the same already exists, provide a
transfer agent, registrar and CUSIP number for all such Registrable
Securities not later than the effective date of the registration statement;
and
(j) otherwise comply with all applicable rules and regulations of the
Commission, and make available to its security holders, as soon as
reasonably practicable, an earnings statement covering a period of 12
months, beginning within three months after the effective date of the
registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.
Each Holder agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 5(f), such Holder will,
as soon as is practical, discontinue disposition of its Registrable Securities
until such Holder's receipt of the copies of the supplemented or amended
prospectus covering such Registrable Securities.
-9-
<PAGE>
In connection with each registration hereunder, the sellers of Registrable
Securities will furnish to the Company in writing such information with respect
to themselves and the proposed distribution by them as reasonably shall be
necessary in order to assure compliance with federal and applicable state
securities laws.
In connection with each registration pursuant to Sections 2, 3 or 5
covering an underwritten public offering, the Company and each seller agree to
enter into a written agreement with the managing underwriter selected in the
manner herein provided in such form and containing such provisions as are
customary in the securities business for such an arrangement between such
underwriter and companies of the Company's size and investment stature.
6. Secondary Offering Priority. Up to fifty percent (50%) of the number
---------------------------
of shares available to be sold in any secondary offering of the Company's Common
Stock permitted to be included by the Company's underwriters in conjunction with
an Initial Public Offering and up to fifty percent (50%) of the number of shares
available to be sold in each subsequent offering of the Company's common stock
permitted to be included therein by the Company's underwriters shall be reserved
for Holders under Section 2 until such time as Holders, as a group, have been
afforded the opportunity to include fifty percent (50%) of their Conversion
Shares through such offerings or any other registered underwritten offering
available to such Holders; provided, however, that the number of Registrable
Securities to which the foregoing priority is afforded shall not be greater than
the difference between fifty percent (50%) of the Conversion Shares and the
number of Conversion Shares as to which the opportunity to sell in any such
offerings had been made available.
7. Indemnification.
---------------
(a) The Company will indemnify each Holder, each of its
officers, directors, shareholders, employees, agents and partners, and each
other person controlling such Holder, with respect to which registration,
qualification or compliance has been effected pursuant to this Agreement,
and each underwriter, if any, and each person who controls any underwriter,
against all claims, losses, damages and liabilities (or action in respect
thereof) arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any prospectus, offering
circular or other document (including any related registration statement,
notification or the like) incident to any such registration, qualification
or compliance, or based on any omission (or alleged omission) to state
thereto a material fact required to be stated therein or necessary to make
the statements therein not misleading, or any violation by the Company of
the Securities Act, the Exchange Act, any rule or regulation thereunder, or
any other federal or state securities laws applicable to the Company and
relating to action or inaction required of the Company in connection with
any such registration, qualification or compliance, and will reimburse each
such Holder, each of its officers, directors, shareholders, employees,
agents and partners, and each other person controlling such Holder, each
such underwriter and each person who controls any such underwriter, for any
legal and any other expenses
-10-
<PAGE>
reasonably incurred in connection with investigating and defending any such
claim, loss, damage, liability or action, including any of the foregoing
incurred in settlement of any litigation commenced or threatened; provided,
--------
however, that the Company will not be liable in any such case to the extent
-------
that any such claim, loss, damage, liability or expense arises out of or is
based on any untrue statement or omission based upon written information
furnished to the Company by such Holder or underwriter and stated to be
specifically for use therein; and provided further, however, that the
-------- ------- -------
indemnity agreement contained in this Section 7(a) will not apply to
amounts paid in settlement if such settlement is effected without the
consent of the Company (which consent will not be unreasonably withheld).
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of any Holder or any such director,
officer, partner, agent, Affiliate, shareholders, underwriters, employees
or control persons and shall survive the transfer of such securities by the
Company.
(b) Each Holder will, if Registrable Securities held by him are
included in the securities as to which such registration, qualifications or
compliance is being effected, severally and not jointly, indemnify the
Company, each of its directors, shareholders, employees, agents and
officers and each underwriter, if any, of the Company's securities covered
by such a registration statement, each other person who controls the
Company or such underwriter within the meaning of the Securities Act, the
Exchange Act, any rule or regulation thereunder, or any other federal or
state securities laws and the rules and regulations thereunder, each such
other Holder and each of their officers, directors, shareholders,
employees, agents and partners, and each other person controlling such
Holder, against all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any such
registration statement, prospectus, offering circular or other document, or
any 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 any violation by such Holder of the Securities Act, the
Exchange Act, any rule or regulation thereunder, or any other federal or
state securities laws applicable to such Holder and relating to action or
in action required of such Holder in connection with any such registration,
qualification or compliance, and will reimburse the Company and any other
Holder, and each of their directors, officers, partners, underwriters,
shareholders, employees, agents or control persons for any legal or any
other expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability or action, including any
of the foregoing incurred in settlement of any litigation commenced or
threatened, in each case to the extent, but only to the extent, that such
untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering
circular or other document in reliance upon and in conformity with written
information furnished to the Company by such Holder and stated to be
specifically for use therein; provided, however, that the obligations of
-------- -------
such Holders hereunder shall be limited to an amount equal to the net
proceeds to each such Holder of securities sold as contemplated herein; and
provided further, however, that the indemnity agreement contained in this
-------- ------- -------
Section 7(b) will not
-11-
<PAGE>
apply to amounts paid in settlement if such settlement is effected without
the consent of the majority of the Holders (which consent will not be
unreasonably withheld). Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of the Company
or any such director, officer, partner, agent, or Affiliate, shareholders,
underwriters, employees or control persons and shall survive the transfer
of such securities by such Holder.
(c) Promptly after receipt by an indemnified party hereunder of
notice of the commencement of any action, such indemnified party shall, if
a claim in respect thereof is to be made against the indemnifying party
hereunder, notify the indemnifying party in writing thereof, but the
omission so to notify the indemnifying party shall not relieve it from any
liability which it may have to such indemnified party other than under this
Section 7 and shall only relieve it from any liability which it may have to
such indemnified party under this Section 7 if and to the extent the
indemnifying part is prejudiced by such omission. In case any such action
shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party
shall be entitled to participate in and, to the extent it shall wish, to
assume and undertake the defense thereof with counsel satisfactory to such
indemnified party, and, after notice from the indemnifying party to such
indemnified party of its election so to assume and undertake the defense
thereof, the indemnifying party shall not be liable to such indemnified
party under this Section 7 for any legal expenses subsequently incurred by
such indemnified party in connection with the defense thereof other than
reasonable costs of investigation and of liaison with counsel so selected
as incurred; provided, however, that, if the defendants in any such action
-------- -------
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be
reasonable defenses available to it which are different from or additional
to those available to the indemnifying party or if the interests of the
indemnified party reasonably may be deemed to conflict with the interests
of the indemnifying party, the indemnified party shall have the right to
select a separate counsel and to assume such legal defenses and otherwise
to participate in the defense of such action, with the expenses and fees of
such separate counsel and other expenses related to such participation to
be reimbursed by the indemnifying party as incurred.
(d) In order to provide for just and equitable contribution to joint
liability under the Securities Act in any case in which either (i) any
Holder exercising rights under this Agreement, or any controlling person of
any such Holder, makes a claim for indemnification pursuant to this Section
7 but it is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to
appeal or the denial of the last right of appeal) that such indemnification
may not be enforced in such case notwithstanding the fact that this Section
7 provides for indemnification in such case, or (ii) contribution under the
Securities Act may be required on the part of any such selling Holder or
any such controlling person in circumstances for which indemnification is
provided under this Section 7; then, and in each such case, the Company and
such Holder will contribute to the aggregate losses, claims, damages or
-12-
<PAGE>
liabilities to which they may be subject (after contribution from others)
in such proportion so that such Holder is responsible for the portion
represented by the percentage that the public offering price of its
Registrable Securities offered by the registration statement bears to the
public offering price of all securities offered by such registration
statement, and the Company is responsible for the remaining portion;
provided, however, that, in any such case, (A) no such Holder will be
-------- -------
required to contribute any amount in excess of the price to the
underwriters of all such Registrable Securities offered by it pursuant to
such registration statement; and (B) no person or entity guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) will be entitled to contribution from any person or entity
who was not guilty of such fraudulent misrepresentation.
8. Changes in Eligible Shares. If, and as often as, there is any change
--------------------------
in the Eligible Shares by way of a stock split, stock dividend, combination or
reclassification, or through a merger, consolidation, reorganization or
recapitalization, or by any other means, appropriate adjustment shall be made in
the provisions hereof so that the rights and privileges granted hereby shall
continue with respect to the Eligible Shares as so changed.
9. Information by Holder. Each Holder of Registrable Securities shall
---------------------
furnish to the Company such information regarding such Holder and the
distribution proposed by such Holder as the Company (or any underwriter) may
reasonably request in writing and as shall be reasonably required in connection
with any registration, qualification or compliance referred to in this
Agreement.
10. Limitations on Registration of Issues of Securities. From and after
---------------------------------------------------
the date of this Agreement, the Company shall not, without the prior written
consent of Holders of two-thirds of the Registrable Securities then outstanding
held by Holders who are signatories to this Agreement, enter into any agreement
with any holder or prospective holder of any securities of the Company giving
such holder or prospective holder equity registration rights which are superior
to, or which in any manner limit, the rights of the Holder's hereunder.
11. Rule 144 Reporting. With a view to making available the benefits of
------------------
certain rules and regulations of the Commission which may permit the sale of the
Registrable Securities to the public without registration, the Company agrees to
use its best efforts to:
(a) Make and keep public information available as those terms are
understood and defined in Rule 144 under the Securities Act, at all times
from and after the effective date of the first registration under the
Securities Act filed by the Company for an offering of its securities to
the general public;
(b) File with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange
Act at any time after it has become subject to such reporting requirements;
-13-
<PAGE>
(c) So long as a purchaser of Eligible Shares owns any Eligible
Shares or Registrable Securities, furnish to the purchaser of Eligible
Shares forthwith upon request a written statement by the Company as to its
compliance with reporting requirements of Rule 144 (at any time from and
after 90 days following the effective date of the first registration
statement filed by the Company for an offering of its securities to the
general public), and of the Securities Act and the Exchange Act (at any
time after it has become subject to such reporting requirements), a copy of
the most recent annual or quarterly report of the Company, and such other
reports and documents so filed as a purchaser of Eligible Shares may
reasonably request in availing itself of any rule or regulation of the
Commission allowing a purchaser of Eligible Shares to sell any such
securities without registration.
12. Representation and Warranties of the Company. The Company represents
--------------------------------------------
and warrants to the undersigned holders of Eligible Shares as follows:
(a) The execution, delivery and performance of this Agreement by the
Company have been duly authorized by all requisite corporate action and
will not violate any provision of law, any order of any court or other
agency of government, the Charter or Bylaws of the Company or any provision
of any indenture, agreement or other instrument to which it or any of its
properties or assets is bound, conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any
such indenture, agreement or other instrument or result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever upon
any of the properties or assets of the Company (other than Permitted Liens
as defined in the Purchase Agreement).
(b) This Agreement has been duly executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the
Company, enforceable in accordance with its terms (subject to equitable
principles and to applicable bankruptcy, reorganization, insolvency,
moratorium and other similar laws affecting the enforceability of
creditors' rights generally and to applicable laws affecting the
enforceability of indemnification and contribution).
13. Transfer or Assignment of Registration Rights. The rights to cause
---------------------------------------------
the Company to register a Holder's securities granted to each Holder by the
Company under Sections 2, 3, and 5 may be transferred or assigned by a Holder to
a transferee or assignee of any of such Holder's Registrable Securities if (i)
there is transferred to such transferee at least 20% of the total shares of
Registrable Securities originally issued to the direct or indirect transferor of
such transferee (as adjusted for stock splits and combinations), (ii) such
transferee is an Affiliate, subsidiary, parent, general partner, limited
partner, retired partner, member or retired member of a party hereto, (iii) such
transferee is a trust for the benefit of an individual Holder or (iv) in the
case of CIBC, such transferee is not a competitor of the Company; provided, that
--------
the Company is given written notice by such Holder at the time of or within a
reasonable time after said transfer or assignment, stating the name and address
of said transferee or assignee and identifying the securities with respect to
which such registration rights are being transferred or assigned; and provided
--------
further,
- -------
-14-
<PAGE>
that the transferee or assignee of such rights assumes the obligations of such
Holder under this Agreement by executing a Joinder Agreement satisfactory to the
Company, whereby such person becomes a party to this Agreement; and provided yet
-------- ---
further, that no transfer of the rights hereunder will be valid (and will be
- -------
void ab initio) if any such attempted transfer is to a Person that engages,
-- ------
directly or indirectly, in a business or intends to engage in a business that
competes with the Company.
14. "Market Stand-off" Agreement. Each Holder agrees, if requested by the
---------------------------
Company and an underwriter of Common Stock (or other securities) of the Company,
not to directly or indirectly sell, offer to sell, contract to sell (including
without limitation, short sell), grant any option to purchase or otherwise
transfer or dispose of any Common Stock (or other securities) of the Company
held by such Holder during the seven days prior to, and the 180 day period
beginning on, the effective date of a registration statement of the Company
filed under the Securities Act (except as part of such registration):
(a) such agreement only applies to the first such registration
statement of the Company including securities to be sold on its behalf to
the public in an underwritten offering; and
(b) all officers and directors of the Company enter into similar
agreements.
Such agreement shall be in writing in a form satisfactory to the Company
and such underwriter. The Holders hereby agree that the Company may impose
stop-transfer instructions with respect to the shares (or securities) subject to
the foregoing restriction until the end of said 180 day period.
15. Miscellaneous.
-------------
(a) Successors and Assigns. All covenants and agreements contained
----------------------
in this Agreement by or on behalf of any of the parties hereto shall bind
and inure to the benefit of their respective heirs, executors,
administrators, successors and assigns of the Company and each of the
Holders (including without limitation transferees of any Eligible Shares or
Restricted Stock), whether so expressed or not.
(b) Notices. Any notice or other writing required or permitted to be
-------
given under this Agreement or for the purposes of this Agreement (referred
to in this Section and throughout this Agreement as a "notice") to any
party shall be sufficiently given if delivered personally, or if sent by
prepaid registered mail or if transmitted by fax to such party:
(i) in the case of a notice to CIBC at:
425 Lexington Avenue
9th Floor
New York, NY 10017
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<PAGE>
Attention: Robi Blumenstein
Fax: (212) 687-1544
with a copy to:
Mayer, Brown & Platt
1675 Broadway
New York, NY 10019
Attention: Mark S. Wojciechowski, Esq.
Fax: (212) 262-1910
(ii) in the case of a notice to the Company at:
GoAmerica Communications Corp.
401 Hackensack Avenue
Hackensack, NJ 07601
Attention: Aaron Dobrinsky
Fax: (201) 996-1772
with a copy to:
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, NY 10178
Attention: Michael A. Doherty, Esq.
Fax: (212) 309-6273
or at such other address as the party to whom such writing is to be given
shall have last notified to the party giving the same in the manner
provided in this Section. Any notice personally delivered to the party to
whom it is addressed as provided in this Section shall be deemed to have
been given and received on the day it is so delivered at such address,
provided, that if such day is not a Business Day then the notice shall be
--------
deemed to have been given and received on the Business Day next following
such day. Any notice mailed to the address and in the manner provided for
in this Section shall be deemed to have been given and received on the
fifth Business Day next following the date of its mailing. Any notice
transmitted by fax shall be deemed given and received on the first Business
Day after its transmission.
(c) Governing Law. This Agreement shall be governed and construed in
-------------
accordance with the internal laws of the State of New York.
(d) Amendment. This Agreement may be amended, supplemented or
---------
modified only by a written instrument duly executed by or on behalf of each
party hereto.
-16-
<PAGE>
(e) Severability. If any provision of this Agreement shall be held to
------------
be illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any
manner affect or render illegal, invalid or unenforceable any other
provision of this Agreement, and this Agreement shall be carried out as if
any such illegal, invalid or unenforceable provision where not contained
herein.
(f) Entire Agreement. This Agreement, as restated herein, and the
----------------
other instruments referred to herein contain the entire agreement among the
parties with respect to the registration rights of holders of Eligible
Shares and supersede all prior and contemporaneous arrangements or
understandings with respect thereto. Each Holder who is not a signatory to
this Agreement shall be deemed to be an intended third party beneficiary
hereof and shall be entitled to enforce all rights, preferences and
privileges afforded to such Holders hereunder.
(g) Counterparts. This Agreement may be executed in counterparts,
------------
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. Facsimile counterpart signatures
to this Agreement shall be acceptable and binding.
(h) Waiver. Any term or condition of this Agreement may be waived at
------
any time by any party hereto that is entitled to the benefit thereof, but
no such waiver shall be effective unless set forth in a written instrument
duly executed by or on behalf of the party waiving such term or condition
(and no such waiver shall in any event be binding on any other party hereto
that is entitled to the benefits of such term or provision). No waiver by
any party hereto of any term or condition of this Agreement, in any one or
more instances, shall be deemed to be or construed as a waiver of the same
or any other term or condition of this Agreement on any future occasion.
All remedies, either under this Agreement or by law or otherwise afforded,
will be cumulative and not alternative.
(i) Third Party Beneficiaries. The terms and provisions of this
-------------------------
Agreement are intended solely for the benefit of each party hereto (and any
additional Holders who execute a Joinder Agreement) and their respective
successors and permitted transferees, and it is not the intention of the
parties to confer third-party beneficiary rights, and this Agreement does
not confer any such rights, upon any other Person other than any Person
entitled to indemnity under Section 7.
(j) Public Notices. All public notices to third parties and all other
--------------
publicity concerning the transactions contemplated by this Agreement shall
be jointly planned and coordinated by the parties hereto and no party shall
act unilaterally in this regard without the prior approval of the other
party, such approval not to be unreasonably withheld, except:
-17-
<PAGE>
(i) in the case of the Company for communications made in
confidence to the Company's employees affected by such transactions;
or
(ii) where required to do so by law or by the applicable
regulations or policies of any United States or other regulatory
agency of competent jurisdiction or any stock exchange in
circumstances where prior consultation with the other parties is not
practicable.
(k) Further Assurances. Each of the parties covenants and agrees to
------------------
take all such action and to execute all such documents as may be necessary
or advisable to implement the provisions of this Agreement fully and
effectively and to make them binding on the parties hereto.
-18-
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first above written.
COMPANY GOAMERICA COMMUNICATIONS CORP.
By: /s/ Aaron Dobrinsky
_____________________________
Name: Aaron Dobrinsky
Title: President
HOLDER
CIBC WMV INC.
By: /s/ Robi Blumenstein
_____________________________
Name: Robi Blumenstein
Title: Managing Director
-19-
<PAGE>
SCHEDULE I
Eligible Underwriters
-20-
<PAGE>
EXHIBIT 21.1
GoAmerica Communications Corp., a Delaware corporation
GoAmerica Marketing Corp., a Delaware corporation
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" and to
the use of our report dated December 31, 1999 in the Registration Statement
(Form S-1) and related Prospectus of Go America, Inc. dated January 18, 2000.
/s/ Ernst & Young LLP
---------------------
MetroPark, New Jersey
January 17, 2000
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